Civil Procedure
I. Commencing the Case Service of Process Rule 4a (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, state the name and address of the plaintiff‟s attorney (or plaintiff). It also must indicate a time limit and that default judgment will occur if no response is given Rule 4b (Issuance) – After filing complaint, summons is to be submitted to the clerk, and if correct will be signed, sealed, and issued to each defendant Rule 4c (Service with Complaint; by Whom Made) 1. Summons shall be served with a complaint in the permitted amount of time (under m) 2. Service may be given by anyone over 18 not a party to the action. The plaintiff can request the court to appoint a marshal of other person to serve notice Rule 4d (Waiver of Service; Duty to save costs of service; Request to Waive) 1. A defendant who waives service does not waive any objection to venue or jurisdiction 2. An individual, corporation, or association (subject to service under e, f, or h) has a duty to avoid unnecessary costs. The plaintiff may notify such defendant of a request to waive service summons. The notice and request A. shall be in writing; directed to the defendant, or agent/manager of corp. B. shall be sent via first class mail C. shall be accompanied by a complaint D. shall inform the defendant of the consequences of compliance/non compliance E. shall set forth the date it was sent F. shall allow a reasonable time to return the waiver (30 days in U.S.; 60 out) G. shall provide an extra copy and a prepaid means of responding 3. A defendant who returns the waiver in time is not required to serve an answer for 60 days after the date the waiver was sent (90 out of U.S.) 4. After waiver is submitted to court, process will continue as normal; no proof of service will be required 5. If defendant does not return waiver, he will be responsible for all costs incurred in effecting service, along with associated legal costs Rule 4e (Service upon Individual within the U.S.) – service may be effected in any jud. District 1. pursuant to the law of the state in which the district court is located or where service is effected, or 2. by delivering a copy of the summons and complaint to the individual personally, or by leaving copies with a person of suitable age living at the defendant‟s place of abode, or to an appointed agent for receiving summons. Rule 4l (Proof of Service) – if not served by a marshal of deputy, then the server shall make an affidavit thereof; or other proof of service Rule 4m (Time Limit for Service) – within 120 days after filing of the complaint; the court may dismiss the claim without prejudice or if there is good cause may grant an extension. A. Greene v Lindsey 1. The notice was not handed to them (if it was, there would be no possibility of appeal); not given to someone over 16 in the residence; it was posted on the door (followed the procedure) 2. There are two lawsuits: 1975 landlords filed a forcible entry; won on default judgment because defendants didn‟t show up; 1981: tenants filed a suit saying they didn‟t get due process
3. Did the housing project gave proper notice (due process)? -There needs to be reasonable assurance that the tenant would get it; there was good evidence that the tenant would not get that in that housing project (kids tear it down) -The court rules that posting the notice on the door in public (governmental) housing is unconstitutional, if there is another reasonable way to serve; remanded to the courts. Because it is governmental and the officer is an official, then plaintiffs can bring suit against the state. B. Proper Notice includes a summons and complaint 1. Summons – it is in plain language so that the person will know what is happening and what to do; the California summons is in English and Spanish 2. Complaint – letter explaining the issue C. Serving – 1. must be served by agent over 18 not involved; or an agent of the court; marshal; your lawyer might not be a good choice (may have to testify; might seem pretentious) 2. must be hand delivered to the person; given to someone of suitable age that resides in the usual place of abode; agent authorized by person for receiving process; or by the laws of proper notice of the state (either where the case is located or where the defendant is located) -federal rules: it is most likely going to be constitutional; must prove that for some reason that the circumstances may make some method unconstitutional; rule provides the base line…they give three ways that are acceptable to serve notice (states can add onto this standard) -mail option: requesting a waiver – defendant waives the right to formal process (infants, incompetents, agencies); if he ignores the request, then they could be responsible for the costs of service…the waiver allows for an extension on the response to the suit 3. you have 120 days to serve the defendant after filing with the court…if you send a request for a fee waiver, you must allow for 30 days for response. Statute of Limitations (amount of time that you have to get something done) affects whether you want to use request for waiver (at the end of the 120 days or if you need it to be done quickly) 4. There is a “who” and a “how” element of serving. If states have there own statutes about serving notice, then if you are using a statutory rule for one or the elements, it is generally a good idea to use the statutory rule for both D. The requirements for objection to Notice: Objection to process – forgot something; something is missing Objection to service of process – served in the wrong way, wrong person
II. Modern Pleading Stating a Claim Rule 8a (Claims for Relief) – Claims for relief will have: 1. a short and plain statement on the grounds on which the court‟s jurisdiction depends; 2. short and plain statement showing that the pleader is entitled to relief; 3. a demand for judgment for that relief Rule 8e (Pleading to be concise and Direct) 1. Each averment of the pleading shall be simple, concise, and direct 2. A party may make more than one statement in a claim or defense (either alternatively or hypothetically). If one is sufficient, it isn‟t nullified by the other‟s insufficiency. Rule 8f (Construction of Pleading) – All pleadings will be constructed as to do substantial justice Rule 10a (Caption; Names of Parties) –pleading will contain a caption with the name of the court, title of the action, file, number and designation. Title of action will include names of parties. Rule 10b (Paragraphs; Separate Statements) – All averments shall be in numbered paragraphs, limited to what is practicable to a single set of circumstances, and the paragraphs can be referred to by number Rule 10c (Adoption by Reference; Exhibits) – Statements in a pleading may be adopted by reference in a different part of the same pleading of in another pleading or in any motion. A copy of any written instrument which is an exhibit to a pleading is a part thereof. A. Pleas that the defendant can use to answer; if you don‟t make them at the right time you waive 1. Dilatory Pleas – jurisdiction pleas (wrong court); pleas in suspension (not now); pleas in abatement (error in the pleading) 2. Peremptory (in the old system: after dilatory plea, you can enter one) – Demurrer (even if all the facts that the plaintiff alleges are true, there is no case); traverse (there may be a legal claim, but the facts are wrong); confession & avoidance (everything is right, but the defendant should be excused for some reason (self defense, emergency), affirmative defense B. Difference between code and notice in a complaint 1. Code has to show facts that lead to legal conclusion; in the code system, you can only go to trial on things in the complaint; the issue is how much “facts” are needed to make a claim as opposed to a cause of action; the goal of code pleading is to be specific enough to get to discovery, but not to specific as to eliminate possible arguments for trial 2. Notice just has to show legal conclusion; the notice is fine as long as a reasonable person would know what the course of action is C. Department of Transportation v. Superior Court 1. Accident victims were injured on Ca. highway. They filled out a form, saying that they were traveling north, when a car traveling south crossed the dirt center divider and hit them. Does the form make you demurrer proof? No, you still need to include some description. 2. Even when using statutory forms, there must be sufficiency of pleading. It must state enough facts to state a cause of action (CalTrans role in the accident). It must give the defendant adequate notice to prepare its defense. D. Gillispie v. Goodyear 1. Plaintiff alleged that the company was negligent by trespassing onto her property and confining her against her will and for generally causing her injuries (humiliated and embarrassed; public scorn) [no other details] 2. The court ruled that she only stated a cause of action. The complaint gave the basics, but failed to give the specific facts that the legal conclusions would be predicated. E. Rannels v. Nichols 1. After customer discovered that the jeans were defective and the department store refused to replace it or refund her money, she stopped payment on her check. Store filed a criminal
complaint under the PA bad check statute, and Rannels was acquitted. Rannels filed an action in district court for malicious prosecution and defamation, but the complaint was dismissed for failure to make proper factual allegations (but seemed to use code pleading standards). On appeal, the court reversed (it had the necessary elements to have a case). 2. Malicious prosecution has the following elements: termination of the suit Lack of probable cause – looking at the bad check statute, it can be concluded that this was incorrect; she had money and wasn‟t writing a bad check at the time Malice – letter from manager, making an example; but just saying that they acted maliciously is enough in notice pleading The court justified its opinion by recognizing that the purpose of pleadings under the Federal Rules was to give notice of claims being made and that a wide latitude in pleadings was in order.) F. Haddle v. Garrison (I) 1. Haddle claims he was fired because he was going to be a federal witness against company officers. He was an at will employee. He says that he was injured when he was fired. Suing for violation of civil rights (conspiracy to cause injury to a witness) 2. Just because he called it an injury doesn‟t mean he has a cause of action. Rule 12b6 permits a defendant to move to dismiss when the complaint fails to state a claim upon which relief may be sought. Firing of an at will employee is not an injury (no claim) G. Haddle v. Garrison (II) 1. Same as I. The case was appealed as to whether there was injury. The third element of the conspiracy claim is that there was injury to person or property. 2. The court ruled that the injury to property was the third party interference of the at will employment. The officers should not have been involved once they were arrested. 3. should not be dismissed on 12b6 unless it is clear that the plaintiff cannot state a claim that would entitle him to relief Constraints Imposed by Pleading Rule 11a (Signature) – Every pleading shall be signed by at least one attorney of record (or the party, if unrepresented), and shall include an address and telephone number. No verification or affidavit is necessary; no signature will be stricken, unless promptly fixed. Rule 11b (Representations to Court) – by presenting to the court a pleading, motion, or other paper, the attorney is certifying to the best of his knowledge, information, or belief, formed after an inquiry reasonable under the circumstances 1. it is not for an improper purpose (harass, delay, increase costs, etc) 2. they are warranted by existing law or for a nonfrivolous argument for extension, modification or reversal of existing law 3. the allegations have evidentiary support or will likely have it through investigation 4. denials of factual contentions are warranted on the evidence or are based on a lack of information or belief Rule 11c (Sanctions) – if rule 11b has been violated, the court may impose sanctions on attorneys, law firm, or the party who are responsible for the violation 1. It can be initiated by: A. a separate motion and shall describe the specific conduct. It should be served under rule 5, but shall not be filed until 21 days after the service if it is not withdrawn or corrected. The court may fine the party the amount of costs associated with filing this motion; B. the court may enter an order on its own initiative describing the violation 2. A sanction imposed for violations is limited to what is sufficient to deter repetition. It may consist of nonmonetary, an order to pay a penalty to the court, an order to pay opposing party
for reasonable attorney‟s fees. Monetary sanctions cannot be awarded for 12b2 violations; or on the court‟s initiative unless the court orders the party to show cause before a voluntary dismissal or settlement of the claim made by the party which is to be sanctioned. 3. when imposing sanctions, the court shall describe the violation and the reason for the sanction A. Rule 11; signing and certifying validity 1. for complaints/pleadings; not for discovery (26g is the rule for discovery; harsher) 2. to prevent harassment and malicious prosecution; frivolous lawsuits; sloppy work on the part of the lawyer and client (negligence part; proper investigation) 3. does not require you to be right/perfect; as long as lawyer acts reasonably 4. Court has discretion as to whether to impose a sanction (to deter future repeats of this) 5. After 1983; you are not guaranteed to recover lawyer‟s fees; now it allows for safe harbor (21 days to amend, respond, withdraw); it is not as used a method as before; now, only the person who signs it can be sanctioned (usually the lawyer), and also law firms and parties that are responsible for the violation; before you could sanction lawyer, represented party, or both 6. why not just file both this and the answer? Rule 11 is often not granted. Judge may not look favorably on parties that file it. It may be better to just file a 12b6. Also, an award of attorney‟s fees may not go to the party (part of it may go to the court). B. Business Guides v. Chromatic 1. Business guides publishes directories. They claimed to have put 10 “seeds” in that were copied by Chromatic. They filed suit for copyright infringement (quick file in order to get injunction). The clerk asked for the companies and found out that 9 of the 10 were actually correct. 2. The court accepted the weak excuse that it was not in bad faith; said that sanctions were still proper because they had the chance to discover the error after the initial filing. The la wyers were sanctioned for signing off; the party was also sanctioned if there is objective reasonableness and should have discovered the error. C. Religious Technology v. Gerbode 1. RTC alleged that Gerbode violated RICO (mail fraud in formation of formation of nonprofit corporation). The complaint was dropped and Gerbode is now filing for frivolous filing and seeking sanctions (attorney‟s fees for multiplying the costs of the other party). 2. there is a safe harbor provision that was not followed according to the plaintiff; excuse says that there is an amendment: if action has already been dismissed (nothing to withdraw) then there is no reason to wait the 21 days; problem: complaint is served, you have 20 days to respond…if you want to file a rule 11 motion, and you do it immediately, you may have to wait 21 days (which is longer than the time you have to respond to the complaint) 3. In this case, the court found that the claim was frivolous. Therefore they were required to sanction. They gave attorney‟s fees in an attempt to quell the continuous back and forth relationship between the two parties. Judge did not file sanctions for both sets of attorney‟s for the plaintiff. Court has discretion over who is sanctioned. 4. lodstar method: attorney‟s hourly rate, that can be altered by the judge Rule 9b (Fraud, Mistake, Condition of mind) – In all averments of fraud or mistake, the circumstances constituting fraud shall be stated will particularity. Malice, intent, knowledge and other conditions of mind can be averred generally (heightened pleading). Rule 12e (Motion for more definite statement) – if the pleading is so vague or ambiguous that a party cannot reasonably be required to frame a response, the party may move for a more definite statement. The motion should point out the defects and the details desired. If the motion is not fixed within 10 days, the pleading may be stricken.
Rule 12f (Motion to Strike) – upon motion, the court may order stricken from any pleadings, any insufficient defense or redundant, immaterial, impertinent or scandalous material. Rule 12b (How a defense is Presented) – every defense shall be asserted in a responsive pleading, except that the following can be made by motion: 1. lack of jurisdiction over the matter; 2. lack of jurisdiction over the person; 3. improper venue; 4. insufficiency of process; 5. insufficiency of service of process; 6. failure to state a claim that relief can be granted; 7. failure to join a party. D. Leatherman v. Tarrant Couth Narcotics Intelligence & Coordination Unit 1. arose out of two incidents of forcible entry (drugs). One claims that he was assaulted; the other claims the police killed her two dogs. Claim that there was an unreasonable search and seizure; also the policemen were acting under the color of the law. The defendants were trying to get heightened pleading (saying they had immunity; externality cost to citizens, etc) 2. there should not be heightened pleading because it would be burden to little guy plaintiff. It is allowed in instances of fraud and mistake. Responsive Pleading Rule 8b (Defenses; Forms of Denial) – party shall state in plain terms the defenses to each claim and shall admit or deny the averments. If there is not enough information/knowledge sufficient, then that can be said (and it will be a denial). A party can deny part of a claim. The pleader can give a general denial if he intends to controvert all averments. Rule 8c (Affirmative Defenses) – the following are allowed: 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; release; res judicata; statute of frauds; statute of limitations; waiver; and other matter constituting an avoidance or affirmative defense Rule 8d (Effect of Failure to Deny) – averments in a pleading to which responsive pleading is required, are admitted when not denied. Averments in a pleading in which no responsive pleading is required, shall be taken as denied or avoided. Rule 12a (When a defense is Presented) 1. answer shall be given within 20 days or if waiver of service has been granted, within 60 days in the U.S. or 90 days outside the U.S. 2. within 20 days to give a counterclaim, and the other party has 20 days after receiving the counter claim (unless otherwise directed) 3. A. The U.S., an agency of the U.S., or an officer/employee of the U.S. sued in an official capacity shall respond within 60 days; B. officer/employee sued in individual capacity for acts or omissions occurring in connection with performance of duties shall respond within 60 days 4. A. if a court denies a motion, the responsive pleading shall be given within 10 days of the notice by the court; B. If the court grants a motion for more definite statement, the responsive pleading shall be given within 10 days after more definite statement arrives Rule 12b (How a defense is Presented) – every defense shall be asserted in a responsive pleading, except that the following can be made by motion: 1. lack of jurisdiction over the matter; 2. lack of jurisdiction over the person; 3. improper venue; 4. insufficiency of process; 5. insufficiency of service of process; 6. failure to state a claim that relief can be granted; 7. failure to join a party. Rule 12c (Motion for Judgment on the Pleadings) – after pleadings are closed, but within such time as not to delay the trial, any party can move for judgment on the pleadings. If matters outside the pleadings are presented, the motion shall be treated as a motion for summary judgment and disposed of.
Rule 12d (Preliminary Hearing) – the 12b1-7 rules and the 12c rules shall be heard before trial Rule 12e (Motion for more definite statement) – if the pleading is so vague or ambiguous that a party cannot reasonably be required to frame a response, the party may move for a more definite statement. The motion should point out the defects and the details desired. If the motion is not fixed within 10 days, the pleading may be stricken. Rule 12f (Motion to Strike) – upon motion, the court may order stricken from any pleadings, any insufficient defense or redundant, immaterial, impertinent or scandalous material. 12e and 12f (pg 455-456) -motion for more definite statement: can‟t answer the claim because you don‟t know the details; disfavored motion: courts usually won‟t grant it; you must point out the claims and problems -motion to strike: inappropriate stuff in the complaint; redundant, immaterial, impertinent also disfavored; however, it can be used in a different way: if you don‟t get a replay, you can strike something that is not a cognizable defense (like a 12B6) Rule 12g (Consolidation of Defenses of Motion) – A party may move to join any other motions available. If a party makes a motion under rule 12, it is not allowed to make another motion on defense or objections omitted from this motion (except under rule 12h2) Rule 12h (Waiver or Preservation of Certain Defenses) 1. a defense of lack of personal jurisdiction, improper venue, insufficiency of process or service of process is waived if omitted from a rule 12 motion. 2. a defense of failure to state a claim with relief, failure to join a party, or an objection to failure to state legal defense to claim can be made by pleading, motion after pleading, or at trial on the merits 3. whenever it appears by suggestion of the parties that the court lacks jurisdiction of subject matter, the court shall dismiss the action Throughout the process you can always claim there is no legal claim for recovery 12B6 – no legal claim in the pleading; Directed Verdict/Summary Judgment/JNOV – after pleading Burdens of Proof Pleading- you have to put some element into the complaint; possibility of winning Production – you have to come with evidence showing that it is more likely than not Persuasion – not just come forward with evidence, you have to prove it Affirmative defenses shift he burden A. Gomez v. Toledo 1. Gomez, employed at Puerto Rican police station, gave a sworn statement that two officers had offered false evidence (investigated and found to be true). Toledo (superintendent) filed suit against Gomez for illegal wiretapping (suspended and discharged). The court found no proof of this, and Gomez was reinstated with back pay. He filed suit (those under color of law deprived his constitutional rights). Toledo moved to dismiss, saying he had qualified immunity for acts done in good faith (Gomez failed to allege bad faith). 2. The allegation only requires deprivation of right and the person doing the depriving is under the color of law. The claim doesn‟t need to address the good faith issue (that is an affirmative defense). Also, good faith is subjective (can‟t expect to know the defendants state); the burden of proof for this should be on defendant (has better understanding and knowledge). 3. Toledo brings the defense of qualified immunity, so he has the burden B. Burdens of proof 1. look at knowledge; 2. statute language; 3. precedent [may already be answered; contributory negligence=defendant‟s burden (affirmative defense)]; 4. legislative history/policy [why was this created and what was the purpose behind it; Gomez: 1983 – civil rights statute that should be interpreted broadly; historically it has been interpreted as extremely broad in vindicating
rights; not a lot of burden on plaintiff]; 5. Maybe whoever is trying to prove the more atypical case is the one with the burden C. Rule 12 - Served a complaint; what are the options 1. do nothing; usually you will have default judgment against you (it can be ok if you have a very good response; lindsey v greene) 2. answer – assert your defense -conditional denial: not enough info to know/respond -general denial: deny everything; generally not favored -you can deny paragraphs/points 3. rule 12 motions (you may not answer if you feel it will be dismissed by a motion) -only one pre-answer motion is allowed to be used; except for 12g -you should put all your rule 12 motions into that one motion -if you do a rule 12 motion, and you don‟t allege a certain rule 12 defense, you waive the right to that defense (the first time you make an answer/motion, you must name all possible defenses or you lose the ability to use those defenses). The defenses you lose are: 12b1 -5; not 12b6 or 12b7/12h2 (if you know about 12b7 parties to join, you should not delay it, the judge may not look favorably on withholding that info); you never lose the right to say that the court does not have subject matter jurisdiction (12h3) D. Zielinski v. Philadelphia Piers (Answers 8b) 1. Zielinski was injured when his forklift collided with a forklift with PPI on it. He sued PPI, who responded and the insurance company also acknowledged responsibility. At a pretrial motion, information came out that PPI had sold the forklift to Carlton. There was a deposition of the driver that said that he didn‟t know the forklift and his employment had switched. 2. They couldn‟t change defendants because the statute of limitations had already passed. The court also said that there can‟t be a general denial, when some of the claims were clearly true. Also, the party that is going to end up paying is the insurance company, who actually covered both PPI and Carlton. They knew of the incident and also the information of ownership. They were withholding information and there is no prejudice to them to keep the case open. -court rules that 8b the defendant should make clear what is being denied and admitted -Penn. rule (pg 460) when there is an improper answer, and it doesn‟t become clear, we are going to deem agency admitted (???); the outcome would be that the agency would be deemed to be the principle -principle of equity; to try to do justice; there isn‟t much injustice to the defendant E. Layman v. Southwestern Bell Telephone Co. (affirmative defenses) 1. Southwestern Bell came in dug a trench and laid some lines; suing for destruction of property, trespass; Southwestern Bell came back with a general denial because there was an easement (right given to enter land; from previous owner; travels with the land, not owner) 2. The affirmative defense of an easement was not allowed because it was not pled at pleading. - when is it affirmative defense and when is it denial? defendant‟s argument call into question the plaintiffs claim (denial), or say “fine, even if it is true, I am not liable” (affirmative defense) -the way civil procedure works is that everyone is supposed to know everything; then find a reasonable, rational way for the law to work – that is why there is a huge period of discovery -the plaintiff says, you can‟t bring a defense that is not in your pleading…if you are the defense, you would try to get an amendment to conform the pleading to the evidence Amendment Rule 15a (Amendments) – a party may amend at any time before responsive pleading is served (or within 20 days if responsive pleading is not allowed and it has not been scheduled for trial).
Otherwise, amendment may occur only by leave of the court or written consent of the opposing party. Opposing party has 10 days of receiving amendment to reply Rule 15b (Amendments to conform to the Evidence) – a pleading may be amended to conform to evidence at any time. If evidence is objected to on the grounds that it is not in the pleading, the court may allow the pleadings to be amended. The court may also grant a continuance to enable the objecting party to meet such evidence. Rule 15c (Relation Back of Amendments) – amendment of a pleading related back to the original pleading when: 1. relation back is permitted by the law that provides for statute of limitations; or 2. 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 3. the amendment changes the party against whom the claim is asserted (if 15c2 is satisfied and if the new party has : A. received notice of the institution of action and B. knew or should have known that (except for the mistake in identifying) the action would have been brought against the party Rule 15d (Supplemental Pleadings) – Upon motion of a party, the court may permit a party to serve a supplemental pleading as to occurrences which happened since the date of the pleading. It may be granted even if the initial pleading was deficient. A. Standards 1. matter of course: you find out right away, after you file the complaint 2. written consent of the adversary (repeat players with other lawyers), even if it is outside SOL 3. with leave of court; discretionary (it ought to be given because justice requires it - 15a) B. Not allowing amendment is an abuse of discretion unless one of these factors is true: 1) undue delay; 2) bad faith/dilatory motive (they held out information on purpose); 3) Repeated failure to cure (12b…many times); 4) undue prejudice (unreasonable harm because you are given information at this time rather than before; statute of limitations is about to run out); 5) futility (you can amend it, but it won‟t do anything for the case; time barred, no case, etc) C. When outside the statutes of limitation, amendment will be allowed to relate back if there are no core changes to the claim; just amending some issues. C. Beeck v. Aquaslide ‘N’ Dive Corp 1. Beeck was injured at a water park. The park said that Aquaslide manufactured the slide, and they concurred. Being sued for negligent manufacture. During discovery, they found that it was not their slide and moved to amend the answer to deny manufacture. 2. Amendment should be freely given when justice requires. There was no bad faith in their actions. Statute of limitations hasn‟t run out on fraud, if they can find the real defendants. D. Moore v. Baker 1. Moore‟s risky surgery went bad. On the last day of statute of limitation, he filed suit claiming Baker violated informed consent law. Later tried to amend, adding negligence. 2. No amendment was allowed (not similar to the original claim). The amendment should have arisen out of the same occurrence as the first claim (different facts); also might be futile. E. Bonerb v. Richard Caron Foundation 1. injured while playing basketball during mandatory exercise at alcohol rehabilitation. He originally sued for negligence in maintenance. He moved to amend adding malpractice. 2. The malpractice relates back to the same incident. It was mandatory and they were negligent. There is no prejudice because it is the same set of facts.
III. Information Gathering Discovery Rule 26a (Required Disclosures; Methods to Discover Additional Matter 1. Initial Disclosures – except for what is in E and directed by the court, a party must provide to the other party the following. A. name, address, telephone number of each person likely to have discoverable information to support the claim or defense, unless solely for impeachment B. a copy of (or description by category and location) of all documents, data, and tangible things that are in the possession or control of the party, unless solely for impeachment C. a computation of any category of damages, making available for inspection and copying the documents (not privileged) on which computation is based D. any insurance agreement in which the insurance company may be responsible to pay part of the judgment or to reimburse payments to satisfy the judgment E. the following are exempt from initial disclosure: i. action for review on an administrative record; ii. petition for habeas corpus or other proceeding to challenge a criminal conviction/sentence; iii. action brought without cousel by a person in custody of the U.S., a state, or subdivision; iv. action to enforce or quash an administrative summons or subpoena; v. action by the U.S. to recover benefit payments; vi. action by U.S. to collect on a student loan guaranteed by the U.S.; vii. proceeding ancillary to proceedings in other courts; viii. action to enforce an arbitration award. • These may be disclosed within 14 days after the rule 26f conference (unless court orders or there is an objection to what is presented in the conference). Any party added after the conference has 30 days. A party must disclose all information that it has at that time. 2. Disclosure of Expert Testimony A. a party must disclose the identity of any person that my be used at trial (to present under 702, 703, 705) B. for expert witnesses, the identity shall be accompanied by a signed statement by the witness. It shall include all statements of all opinions to be expressed and the basis/reasons; the data/information used by the witness; any exhibits; qualifications of the witness, including all publications in the last 10 years; compensation to be paid to the witness; a list of all other cases the witness has testified in the past 4 years C. all disclosures shall be done under direction of the court, or at least 90 days prior to the date of the trial. Any evidence meant to contradict other evidence shall be provided within 30 days after disclosure was made by other party. 3. The party must also provide and promptly file the following A. name, address, telephone number of each witness, separating those who they expect to testify and those who may testify B. designation of the witnesses who will testify by deposition C. identification of each document or exhibit, signifying what it expects to present and what it may present • these must be made at least 30 days prior to the trial. Within 14 days thereafter, a party may serve and file any objections to the use of a deposition designated by the other party (under 32a), and any objection that may be made to the admissibility of materials. Objections not disclosed (other than under 402, 403) are waived. 4. all disclosures under 26a1-3 must be made in writing, signed, and served. 5. Discovery may be made in the following manners: depositions upon oral examination or written questions; written interrogatories; production of documents or things or permissions to enter upon land or property (warrant, etc); physical and mental examinations, and request
Rule 26a – tells you what needs to be disclosed [computation of damages; any insurance agreement (you need to know to see if there is a suit); facilitates settlement] Rule 26b (Discovery Scope and Limits) 1. parties may obtain discovery regarding any matter not privileged that is relevant to the claim or defense of any party. 2. by order, the court may alter the limits in these rules on the number of depositions and interrogatories, or the length of depositions. By order or local rule, the court may limit the number of requests under rule 36. Discovery may be limited if: the discovery sought is unreasonably cumulative or duplicative (or it is available in a more convenient manner); the party seeking discovery has had ample opportunity to obtain the discovery sought; the burden/cost greatly outweighs the potential benefit Rule 26b – any matter, not privileged (doctor, attorney, self incriminating), that is relevant to the claim or defense of any party; used to say “subject matter,” narrows it down; this rule is tied to pleadings (why it is important to do a good pleading); for good cause, the court may order discovery of any matter relevant to the “subject matter” – it should be an extraordinary situation Rule 26e (Supplementation of Disclosures and Responses) – a party who has made a disclosure or responded to a request for discovery is under a duty to supplement or correct the disclosure or response to include information thereafter acquired or in the following circumstances: 1. at appropriate intervals if the party learns that in some material respect the information is incomplete or incorrect. As to expert witnesses, this applies to information in the report and also to the deposition of the expert. 2. under duty seasonably to amend a prior response to an interrogatory, request for production, or request for admission if the party learns that the response is in some material respect incomplete or incorrect. A. Overview of U.S. discovery – most liberal discovery process; tries to prevent trial be surprise; most lengthy and expensive part of trial; a lot of times, a case will end in discovery • it is supposed to be cooperative; sit down with other side to work things out • rule 26 requires the parties to sit down (early on and also later) with the other side to work out a discovery schedule; you cannot refuse to sit down with the other party during discovery. • from 1993-2000, it was up to the court, whether this early mandatory disclosure was granted • 2000 amendment, makes it mandatory • discoverable information that the party may use to support its claims or defenses; not stu ff that undermines your case (you don‟t have to bring this adverse information initially, but it probably will come out through depositions, requests for documents, etc) • because it is so early, you have a broad duty to supplement information B. Blank v Sullivan & Cromwell 1. Several female attorneys formed a class action against the firm for discriminatory hiring practices (they didn‟t get the promotion). They sent interrogatories asking for statistics on partnership selection (would not be admissible in their case about hiring). 2. Although the questions didn‟t directly pertain to their case specifically, they were allowed to ask these questions because they were likely to lead to the discovery of admissible evidence. C. Steffen v. Cheney 1. Steffen resigned from the Navy when he admitted he was gay (no homosexual conduct). He filed suit. In the interrogatories, he refused to answer question about any homosexual conduct (5th amendment rights). The case was dismissed for failure to comply with discovery. 2. The court ruled that the only pertinent issues are those pertaining to the act. He was discharged for admitting, not conduct.
D. Protective order -no discovery -change the terms and conditions (time and place) -restrict the methods of discovery -limit the scope (ex. Clinton v jones; 5 years, only ask about gov‟t employees; facilitated by state troopers); what about nonconsensual? Doesn‟t fully apply to sexual harassment; some are consensual; also, the defendant wouldn‟t want to admit anything was nonconsensual -seal the transcript -punished for telling anyone else (confidentiality); they don‟t work well E. Tools of Discovery • Interrogatories (rule 33) – have the advantage of being cheap; problem is that there are no follow up questions; also the answers are constructed by the lawyers; limited to 25 per party; can only go to parties; you need to state a ground for objection (overly broad, burdensome, privilege, attorney work product, won‟t lead to discovery of admissible evidence) • Document production (rule 34) – relates only to parties (to get it from 3 rd parties, you need to subpoena them); this is subject of abuse (ask for too much; don‟t want to miss anything) • Depositions – expensive, time consuming; can provide the most information; limited to 10; might want to wait until the end, when you have the most info and it will be the most useful; can be aimed at non parties; limited to 1 day of 7 hours • Using depositions at trial (rule 32) – for impeachment; when the party is an agent of the party; person in deposition is dead; what about when the person is out of jurisdiction? You can go fly out there, get a subpoena and then dipose her; you can use telephone or other way to do it; you can fly that person out; you can use a rule 31 (deposition on written question: non party allowed, answers directly, but no follow up questions) • medical examinations (rule 35) – applies only to parties; requires a court order and showing of good cause; must be related to an issue in the controversy; right to see a copy if the other party requests it; right to see everything (both parties) about this injury; doctor patient is waived because the injured party is putting her physical question on trial -you can ask for protective order if something is revealed that isn‟t relevant • request for admissions – no limit on number; is there stuff that we can all admit to, and not have to stipulate at trial; these things are binding; authenticating documents hunter (pg 86) – can be helpful for a defendant who wants to get the plaintiff to admit things; defendant has already had to admit some things in the answer; see what points of the answer the plaintiff is not going to contest -if failure to admit, and the requesting party proves it, then they can try to get sanctions for the expenses (including attorney‟s fees) associated with investigating; doesn‟t apply if you thought you had a reasonable belief that you win that point at trial Before Trial Rule 26b3 (Trial Preparations – Materials) – a party may obtain discovery of documents and tangible things discoverable under 26b1 and prepared in anticipation of litigation only upon showing that the party seeking discovery has substantial need in preparation of the party‟s case, and that the party is unable (without undue hardship) to obtain substantial equivalent material by other means. A party may obtain previous statements (signed documents, stenographic, mechanical, electrical, or other recordings) without showing; a person not a party must have a written request.
Rule 26b5 (Claims of Privilege or Protection of Trial Preparation materials) – when a party withholds information otherwise discoverable under these rules by claiming that it is privileged, the party shall make the claim expressly and describe the nature of the documents, without revealing what is privileged, so the other party can assesss the applicability of privilege. Rule 26c (Protective Orders) – Upon motion by a party or a person from whom discovery is sought, accompanied by a certification that the movant has in good faith conferred or attempted to confer with the other party, the court may make an order to protect the party from annoyance, embarrassment, oppression or undue burden/expense, including: 1. that the disclosure not be had 2. that the disclosure may be had only on specified terms and conditions, including a designation of place and time 3. that the discovery may be had by a method other than the one selected by the party 4. that certain matters not be inquired into (or limited scope) 5. that discovery only be done by persons designated by the court 6. that a deposition, after being sealed, be opened only by order of the court 7. that a trade secret or other confidential research not be revealed 8. that parties simultaneously file specified documents enclosed in a sealed envelop to be opened as directed by the court. If the motion for a protective order is denied, court may order that any party provide discovery. A. Hickman v. Taylor 1. tug boat accident; a little suspicious; some of crew being tugged died; negligence on part of tug; 4 of 5 have settled • ask tug boat owner to turn over all documents concerning the maintenance records. • can you ask the repair shop for the records? Yes, send the request for production of documents from non-party (subpoena). Non-parties: deposition or subpoena of records • can you depose the lawyer and ask what his client told him? No, privileged; attorney-client covers anything that is covered during the term of relationship 2. Work Product – • trying to get memoranda that the tug boat lawyer had gotten through interviews of employees of the corporate client; send interrogatories • trial court ruled that the lawyer should turn over the information; he refuses; they punish him (imprison) for contempt (this is how the discovery process got to appellate and supreme court) • the supreme court said that the lawyer was not required to turn it over; -the other party could have done the discovery themselves; court is saying that the other party should not be allowed to ride the coattails of the party doing the work -if it is about cost, can they just require the other party to pay for the fees of the attorney? No. The system is about an adversarial system; questioning the quality of work of the lawyer •quality of representation: some lawyers are better at investigation…why not allow for it to be shared (trials based on the truth rather than investigative skills)? The lawyer, in interviewing and producing facts, tries to get it in the right angle for their case. The work product does not protect the facts of the case, it protects the angles/impressions/conclusions. Court wants the lawyers to come up with their own angles (it would also be an advantage if you knew the other side‟s angle). Another point is that good lawyers are paid for coming up with good angles (the more money you have, the better lawyer, the better angles) •nature of adversarial system: Jackson‟s dissent was concerned about putting in a bad policy (undermining the lawyer‟s role with respect to the duty to the client). In Hickman, this would
also put lawyers in an awkward situation because he may be testifying on the stand as to what he thought. If he can be a witness, he cannot be representation for the client. Allowing for work product to be discovery would create a problem for the adversarial system as a whole. •when is work product (materials provided by adversary’s lawyer that has an eye toward litigation) still discoverable? If the other side doesn‟t have access to that discovery; no other way to get that information. Impressions are not allowed; only documents/materials; would memoranda by the attorney be allowed? Probably not, because it would compromise the quality of representation and put the lawyer in awkward situation. They might order the lawyer to turn over information in the memoranda that is factual (not ideas, impressions, etc) Rule 26b4 (Trial Preparations – Experts) A. a party may depose an expert witness. If a report is required, the deposition shall take place after the report is provided B. A party may (interrogatory/deposition) discover facts known or opinions held by an expert who has been retained by the other party in anticipation of trial but not expected to testify only under rule 35b or upon showing exceptional circumstances (impractical by other means). C. Unless manifest injustice would result, (i) the court will require the party seeking discovery to pay the expert for time spent responding; (ii) with respect to discovery under b4B, court will require the party seeking discovery to pay a portion of the fees and expenses reasonably incurred by the latter party in obtaining facts and opinions from the expert A. Experts 1. Hire them to help prepare case; sometimes, just to find facts; usually it is for their opinions 2. Three types a. Testifying: very available to the other side through discovery -Rule 26A2 – mandatory disclosure; kinds of info that must be sent (expert report (opinions, other cases, etc) within 90 days prior to trial); make available for deposition; it would normally fall into work product, but not once it is a testifying expert b. Non testifying, but retained – gave you some opinions you didn‟t like; no disclosure -Consider them to be work product (they may not be testifying because they are bad on the stand; they might have opinions that hurt your case) -Rule 26b4B – information can only be obtained by opposing party in exceptional showing of need cases (just like work product); the only difference is that if there is need, then the opinions are discoverable; exceptional (that this expert witness has specific knowledge for that specific case); once hired, their opinions cannot be discovered by the other side c. Non testifying, not retained, but consulted -Nothing in rules about this; possibly protected as work product (indication of strategy) B. Thompson v. The Haskell Co. 1. suit for sexual harassment. She alleged she was fired for not acquiescing to advances. Her attorney retained a psychologist to make a report. The Haskell Co. wanted to get the report through discovery. 2. A party can‟t compel discovery of the opinions or findings of a non-testifying expert unless there are exceptional circumstances. In this case, the report was made soon after the incident and was highly probative to her emotional state. There would be no other way for the company to obtain this evidence. C. Chiquita v. M/V Bolero Reefer 1. Hired Reefer to ship154,000 boxes from Ecuador to Germany. They said that the loading cranes were defective, which forced 43,000 boxes to be left and thrown away. Those that did
arrive were in poor condition. They hired someone to inspect the ship. Reefer wanted to depose the witness and get the documents disclosed 2. This was a non-testifying expert (he had technical knowledge). Although it may be exceptional circumstances, it isn‟t allowed because they had the opportunity to do an inspection also. D. Summary of Discovery • Rule 26g – like the rule 11 for discovery; front end discovery protection; before you send over requests, you sign and certify that you are not doing them to be unreasonable; same for responses; duty to supplement; once you find a sanctionable violation, you sanction; not at court discretion; lots of discretion as to how to sanction, like rule 11, except that attorney‟s fees is ok in 26g • Rule 26c – allows for protective orders (Clinton 109); management tool to deal with shape of discovery as it is happening • Rule 37a – back end; move to compel that they answer; obligation to try to work it out before going to court; if motion is unnecessary, the court may sanction costs, including attorney‟s fees • Rule 37b – sanctions allowed after order to compel is ignored by other party; sanctions could be that it will be dismissed; it will be taken as admitted; held in contempt; attorney‟s fees • Rule 37c – if you don‟t admit something you should have, you may have to pay the costs of proving it; if you don‟t disclose or supplement, you may be precluded from making those arguments at trial • Rule 30d3 – part of deposition rule; getting at the problem (433 q 4) when the other party keeps objecting at deposition; frustration; allows for motion to stop or extension of time • Rule 37d – when someone doesn‟t show up for deposition; punished under A,B,C of b2; various trial limitations (no contempt); would Clinton have been better off by not showing up (he got impeached for stuff in deposition; punishment would have Review - Rule 30a; 30d; 30g; Rule 31; Rule 32a; Rule 33; Rule 34; Rule 35; Rule 36; Rule 37c2 Discovery Abuse Rule 26g (Signing of Disclosures, Discovery Requests, Responses, Objections) 1. Every disclosure made by a1 and a3 shall be signed by at least one attorney of record. The signature constitutes a certification that to the best of his knowledge formed a reasonable inquiry (complete and correct as of the time it was made. 2. Every discovery request, response or objection shall be signed. The signature certifies: A. that it is consistent with these rules and warranted by existing law or good faith argument for the extension, modification or reversal of existing law; B. not interposed for any improper purpose (harass, delay, cost) C. not unreasonable or unduly burdensome or expensive, given the needs of the case, the discovery already had in the case, the amount of controversy, and the importance of the issues at stake. 3. If without substantial justification a certification is made in violation of the rule, the court, upon motion or on its own initiative, shall impose upon the person who made the certification, the party on whose behalf the disclosure, request, response, or objection is made, an appropriate sanction Rule 37 (Failure to Make or Cooperate in Discovery: Sanctions) – see below Rule 37a (Motion for Order Compelling Disclosure or Discovery) – a party upon reasonable notice may apply for an order by: 1. Appropriate Court – application for an order to a party shall be made in the court where the action is pending. Application for an order not to a party shall be made to the court in the district where the discovery is being, or is to be, taken.
2. Motion A. If a party fails to disclose (Rule 26a), then any other party may move to compel disclosure and impose sanctions. There must be certification that the moving party has in good faith tried to confer with the other party. B. If a person fails to answer a question in a deposition or interrogatory, or a person fails to respond to a request to inspect, the discovering party may move for an order compelling an answer/inspection. There must be a certification of good faith. 3. Evasive or Incomplete Disclosure, answer, or response – These are treated as a failure to disclose, answer, or respond 4. Expenses and Sanctions A. if the motion is granted, after affording an opportunity to be heard, shall require the party, deponent, or attorney (if advising the party not to answer) to pay for the costs incurred by the other party in filing the motion, including attorney‟s fees, unless the party did not first make a good faith effort to obtain the disclosure without court action, if the opposing party was justified, or the award of expenses would be unjust. B. if the motion is denied, the court may enter a protective order, and shall order the moving party to pay for expenses incurred from the motion, unless the motion was justified or the award of expenses would be unjust. C. if the motion is granted in part and denied in part, the court may enter a protective order and may apportion the reasonable expenses incurred in relation to the motion. Rule 37b (Failure to Comply with Order) 1. Sanctions by court in district where deposition was taken – If a despondent fails to be sworn or answer after being directed to do so, he may be held in contempt 2. Sanction by court where action is pending – if a party fails to obey an order to provide or permit discovery, the court may make orders including: A. an order that the matters regarding which the order was made shall be taken to be established for the purpose of the action in accordance with the claim of the moving party B. an order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting that party from introducing designated matters in evidence C. an order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceeding, or rendering judgment by default. D. in lieu of any of the foregoing orders or in addition thereto, an order treating it as a contempt of the court E. where the party has failed to comply with Rule 35a (examination), it may give such orders as in A, B, or C, unless the party shows that it is unable to produce such person for examination. In lieu of any of these orders, the court may order payment of expenses incurred. Rule 37c (Failure to Disclose; false disclosure; refusal to admit) 1. A party that without substantial justification fails to disclose information required by Rule 26(a) or 26(e)(1) will not, unless such failure is harmless, be allowed to use any witness or information not so disclosed. In addition to this sanction, the court, on motion and after affording an opportunity to be heard, may impose other appropriate sanctions. In addition to requiring payment of reasonable expenses, including attorney's fees, caused by the failure, these sanctions may include any of the actions under (A), (B), and (C) of subdivision (b)(2) of this rule and may include informing the jury of the failure to make the disclosure. 2. If a party fails to admit the genuineness of any document or the truth of any matter as requested under Rule 36, and if the other party thereafter proves the genuineness of the document or the truth of the matter, the party may apply to the court for an order requiring the
failing party to pay reasonable expenses incurred in making the proof, including reasonable attorney's fees. The court shall make the order unless it finds that: A) the request was held objectionable pursuant to Rule 36(a); or B) the admission sought was of no substantial importance; or C) the party failing to admit had reasonable ground to believe that the party might prevail on the matter; or D) there was other good reason for the failure to admit. Rule 37d (Failure of party to attend at own deposition) – If a party or an officer, director, or managing agent of a party designated under Rule 30(b)(6) or 31(a) to testify on behalf of a party fails: 1) to appear before the officer who is to take the deposition; or 2) to serve answers or objections to interrogatories submitted under Rule 33; or 3) to serve a written response to a request for inspection submitted under Rule 34, the court in which the action is pending on motion may make such orders in regard to the failure as are just, and among others it may take any action authorized under paragraphs (A), (B), and (C) of subdivision (b)(2) of this rule. Any motion specifying a failure under clause (2) or (3) of this subdivision shall include a certification that the movant has in good faith attempted to confer with the party failing to answer or respond in an effort to obtain an answer or response without court action. In lieu of any order or in addition to, the court shall require the party failing to act or the attorney advising that party or both to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust. The failure to act described in this subdivision may not be excused on the ground that the discovery sought is objectionable unless the party failing to act has a pending motion for a protective order as provided by Rule 26(c). Rule 37e (Subpoena of person in foreign country - abrogated Rule 37f (Expenses Against the US) - repealed Rule 37g (Failure to participate in the framing of discovery plan) – if a party fails to participate in good faith, the court may order it to pay opposing costs (& attorney‟s fees) caused by failure. A. Chudasama v. Mazda Motor Corp 1. Plaintiffs bought a minivan and got into an accident wrecking the car and suffering injury. Filed suit based on two defects. Plaintiff overwhelmed Mazda with discovery requests for everything. The interrogatories contained 121 requests, expanded to 635 because of the sub parts. Mazda objected 10 times, and asked the court to rule on the objections 25 times, but the court refused to respond. Mazda also sought dismissal of the fraud claim (allows for more discovery) and a protective order. The court didn‟t answer on these. Mazda didn‟t respond to discovery requests. Then plaintiff asked for an order to compel which the judge granted, giving Mazda 15 days to complete. They tried, but were unable. Default judgment. 2. A court abuses its discretion when it imposes severe discovery sanctions on a party whose rights were materially prejudiced by the court‟s mismanagement of the case. The appeals court says that there are a lot of other motions that were not ruled on by the judge; then the order to compel was an abuse because there was a lack of rulings that could have avoided the problem. However, the violation of 26g by mazda‟s self help (not answering) was an alternative reason for sanctions that might be nullified by rule 37; they must be sanctioned, but the court has discretion B. Standards of Review 1. abuse of discretion; where the defendant is prejudiced 2. clear error (review trial judges finding of facts); pg 559 mazda case; they are reviewing whether the trial judge got the fact wrong as to rule 26g; after finding error in fact, the were sanctioning on abuse of discretion 3. de novo (no deference at all; look at it as a question of law; look at all the facts)
IV. The Pretrial Process and Dispute Resolution Settlement Rule 41a (Voluntary Dismissal) 1. By Plaintiff; by Stipulation – Subject to 23e, 66, and any state of US, an action may be dismissed without order of the court (i) by filing notice of dismissal at any time before service by the adverse party of an answer or of a motion for summary judgment, or (ii) by filing a stipulation of dismissal signed by all parties in the action 2. By order of Court – Except as provided in a1, an action shall not be dismissed at the plaintiff‟s instance except by order of the court. If a counterclaim has been pleaded, the action shall not be dismissed unless the counterclaim can remain pending fro independent adjudication Rule 68 (Offer of Judgment) – At any time more than 10 days before the trial begins, a defending party may serve the other party an offer to allow judgment to be taken against the defending party for the money or property with costs then accrued. If the other party approves within 10 days, either party may file with the clerk for judgment. If the judgment is not more favorable than the offer, the offeree must pay costs incurred after making the offer. A. General • a lot of it has to do with bargaining power, not many rules • discovery (both in terms of information and costs) plays a huge role in settlement; it also should play a role because it is supposed to be cooperative; (packet 23-25: example of final pretrial order) • it is like a contract; voluntarily entered into by the two parties; plaintiff usually offers consideration in terms; defendant usually offers consideration in money form; there can be other stipulations put into it • exceptions: court has to approve settlements in class actions and in cases with minors; minors may not be able to protect themselves; class action has a lot of unrepresented parties • confidentiality has been allowed in settlement (sometimes it is to protect the one being sued; sometimes it is to protect the privacy of the victim; the victim gets more money for confidentiality) B. Kalinauskas v. Wong 1. Plaintiff sued Caesar‟s Palace for sexual discrimination. She sought to depose a former employee who settled in her sexual discrimination suit. There was a confidentiality agreement in that settlement. 2. Courts are permitted to modify agreements to place private litigants in a position they would otherwise reach only after a repetition of another‟s discovery (it will be denied when it prejudices the opposing party). This makes a conflict between policies behind liberal discovery and secrecy of settlements. C. Evans v. Jeff D. 1. handicapped class sued the state for injunctive relief for better treatment (civil rights case). The lawyer‟s contract contained no provision for legal fees. The state agreed to a settlement on the condition that there be no attorney‟s fees. Bad for attorney, but good for the plaintiff 2. the court said that fee shifting should be allowed and the lawyer should go for what is best for the client. D. Rule 68 • CA has similar rule except it is to offer by either party; federal is only to defendant offer • the general rule is that each side pays his own attorney‟s fees; but costs (fees, witness costs, document costs, admin., etc) are shifted to the losing party • interesting rule, but the bite is minimal
• example: defendant offers $50,000; plaintiff refuses; wins $40,000 at trial; because the final award is less than the offer, plaintiff is only entitled to costs up to the point of the offer of $50,000; sometimes cost of experts is allowed to be shifted. • if there are federal statutes that allow attorney‟s fees (civil rights), then they are allowed in this rule; in above example, plaintiff would have to pay attorney‟s fees up to the time of offer • doesn‟t apply if defendant wins Preliminary Relief Rule 64 (Seizure of Person or Property) – At the beginning of and during the course of an action, all remedies providing for seizure of person or property for satisfaction of the judgment, existing at the time of remedy are limited to the following: 1. any existing statute of the US governs to the extent that it is applicable; 2. the action shall be commenced and prosecuted pursuant to these rules. The remedies include: arrest, attachment, garnishment, replevin, sequestration, and other remedies. Rule 65a (Preliminary Injunction) 1. Notice – injunction shall be issued without notice to the adverse party 2. Consolidation of hearing with trial on merits – before or after the commencement for the hearing on the preliminary injunction, the court may order the trial of the action on the merits to be advanced and consolidated with the hearing of the application. Rule 65b (Temporary restraining order; notice; hearing; duration) – a TRO may be granted without notice to the other party only if: 1. it clearly appears from specific facts (affidavit or verified complaint) that immediate injury loss will result to the applicant before the adverse party can be heard; and 2. the applicant‟s attorney certifies in writing the efforts that have been made to give notice and the reasons supporting the claim. The TRO shall have the date and hour of issuance, be filed with the clerk, shall define the injury and why the TRO is granted, and shall expire within 10 days unless otherwise stipulated by the court Rule 65c (Security) – No restraining order or preliminary injunction shall issue except upon the giving of security by the applicant for payment of such costs and damages as may be incurred or suffered by any party who is found to have been wrongfully enjoined/restrained. Rule 65d (Form and scope of injunction or restraining order) – Every order granting injunction and every restraining order shall set forth the reasons for issuance; be specific; describe in reasonable detail (not referencing other documents) the act(s) sought to be restrained; and is binding only upon the parties, their officers, agents, servants, etc. who receive actual notice Rule 65e (Employer and Employee; interpleader; constitutional cases) – these rules do not modify any statute of the US relating to temporary restraining orders and preliminary injunctions in actions affecting employer and employee; or to interpleaders Rule 65f (Copyright Impoundment) – this rule applies to copyright impoundment proceedings A. General • preliminary injunction and TRO • Rule 65: preliminary injunction essentially freezes things until you can have a trial; you can have a full blown hearing on an injunction; it can decide to combine the injunction and trial; you can speed up the trial; however, it might be too early; facts that come out in the hearing are binding in the trial; both parties (and attorneys are present); may be in place for the entire span of the trial • TRO have some procedural issues: it must be done immediately; try to get other party in there, but it is imminent that it needs to be done; should make us nervous because the other party isn‟t represented
-they can only be a very short duration (10 days); with ability to renew for another 10 days; during that time, there is supposed to be a hearing on whether to grant a preliminary injunction (that is the most important thing to figure out on the judge‟s docket) • Rule 65c – requirement of a security; party is asking for something without the court really knowing whether it will win; requiring security to give to other party if they are wrong; in other words, you better be pretty sure that you are going to win (you lose the money is you lose; you lose the use of that money if you win); up to the judges discretion as to the amount • Rule 64 – not that important; process when other laws allows for preliminary relief; it is not limited to injunctions; it is ancillary to other laws that provide relief B. William Inglis & Sons Baking Co. v. ITT Continental Baking Co. 1. Bakeries filed antitrust suit against ITT. Inglis moved for preliminary injunction to prevent below cost pricing. They said that it was a good faith effort to meet competition. 2. to obtain a preliminary injunction, the party must be likely to win on the merits. Granted for: 1) will suffer irreparable injury; 2) plaintiff is likely to prevail; 3) defendants will not be harmed more than plaintiff is helped; 4) it is in the public interest. 3. the appellate affirms, but says there is a second test. There can be possible win on the merits, but the harm would be very great. C. Fuentes v. Shevin 1. Fuentes bought a stove and stereo on a conditional sales contract. Firestone would retain the rights to the property until Fuentes finished making payment. There was a dispute over service, and she stopped making payments. Firestone got replevin (ordering sheriff to seize the property without a pretrial hearing). 2. Absent extraordinary circumstances, there must be notice and an opportunity to be heard prior to depriving the party of the property. Although not fully owned, the 14 th amendment talks about possession and ownership. For replevin, you must post a bond for double the value of the good as security. 3. The court seems to be appalled at these types of contracts. However, they may be the only way that the poor can gain access to these products. Summary Judgment Rule 56a (For Claimant) – The claimant, may, at any time after 20 days after the commencement of the action or after service of a motion for summary judgment by the adverse party, move (with or without affidavit support) for summary judgment in their favor. Rule 56b (For Defending Party) – A defendant may, at any time, move (with or without affidavit support) for summary judgment in their favor. Rule 56c (Motion and Proceedings Thereon) – The motion shall be served at least 10 days before the hearing. The adverse party may serve opposing affidavits. The judgment sought will be rendered if it is shown that there is no genuine issue as to any material fact (and that the party making the motion is entitled to judgment). Rule 56d (Case not fully Adjudicated on Motion) – if after judgment on the motion, the case is not settled and a trial is necessary, the court shall if practicable ascertain what material facts exist without substantial controversy and are actually and in good faith controverted. These facts will be binding in the trial Rule 56e (Form of Affidavit; Further Testimony; Defense Required) – Affidavits shall be made on personal knowledge, containing facts that would be admissible in evidence, and show that the person is competent to testify. The court may allow affidavits to be supplemented or opposed by depositions, answers to interrogatories, or further affidavits. When there is a motion for summary judgment, the adverse party must show through affidavits, that there is a genuine
issue for trial. If there is no response, then summary judgment, if appropriate, will be entered against the adverse party. Rule 56f (When Affidavits are unavailable) – if affidavits for the opposing party cannot for reasons stated present affidavit facts, the court may refuse the application for judgment or allow for a continuance to get affidavits or depositions or discovery. Rule 56g (Affidavits made in Bad Faith) – if any affidavits are made in bad faith, the court may order that party to pay for opposing costs (including attorney‟s fees) from the filing of the affidavits. Rule 12b6 – defense on the claim that there is failure to state a claim on which relief can be granted A. compare motion to dismiss with summary judgment 1. Pleadings -MTD just go to pleadings (even if everything you allege is true, there is no relief – doesn‟t test the facts) -SJ looks at the facts; looks at the proof that you already got -if you deny MTD then you are saying that it is a triable issue -if you deny SJ, it is saying that there is enough to go to trial; and that it could succeed -MTD (Complaint) – is this a case where remedy is available -Summary Judgment – after some discovery, do the facts support that there is remedy 2. Another difference – what happens at the end -MTD – chance to amend; no adjudication on the merits (you can bring the claim again) -Summary – before granting, the court may delay and allow for more discovery; once it is granted it is an adjudication on the merits (case over); no genuine issue of fact; appealable 3. Who can move -defendants can move for MTD; plaintiffs can only move for motions to strike -either side can move for summary judgment (rule 56) -if premature, it will probably get more time -realistically, this is something used by the defense; easier for defendant because all the defendant has to do is show that one element of the claim is not sufficient -the plaintiff can get it, but it has show that each element is proved; can she move for summary judgment on one element? Yes, partial summary judgment; the other contested facts will be taken care of at trial B. Celotex Corp. v. Catrett 1. Catrett sued Celotex for negligence, breach of warranty, strict liability. Her husband‟s death was caused by exposure to products containing asbestos manufactured by Celotex. Celotex moved for SJ on the grounds that they failed to show any evidence that it was their product. Trial court granted; appellate reversed (Celotex made no effort to show any evidence) 2. A party moving for SJ does not necessarily bear the burden of supplying evidence or affidavits showing the absence of a genuine dispute of material facts. Whoever fails to establish the existence of an essential element has the burden of proof. In this case, Celotex would have to show evidence that the other party has not made a case. C. Visser v. Packer Engineering Associates 1. Visser sued employer for age discrimination (fired). Various members of the board defected and formed a new company. Visser stayed on. The CEO asked Visser for personal loyalty and he refused. He was fired 9 months before his pension was to vest. 2. plaintiff came forward with affidavits that say that he was fired because of his age; they did not have personal knowledge of that issue (nothing admissible; just opinions; no factual basis; they are not experts); this is a case of suspicious timing and the court won‟t rule based on that. A reasonable jury could not find for him on this.
V. The Trial The Jury Rule 38a (Right to Jury Trial) – as declared by the 7th amendment or as given by a statute of the U.S. shall be preserved to the parties inviolate Rule 38b (Demand of a Jury Trial) – any party may demand a trial by jury by (1) serving upon the other parties a demand therefore in writing at any time after the commencement and not later than 10 days after the service of the last pleading directed to such issue; and (2) filing and demand as required by Rule 5d Rule 38c (Demand: specification of Issues) – in the demand, a party may specify the issues which the party wishes so tried (otherwise, it will by on all issues). If a party has demanded a trial by jury on some issues, any other party may request within 10 days, a trial by jury on the other issues Rule 38d (Waiver of Jury Trial) – no demand shall constitute a waiver of a trial by jury; a demand may not be withdrawn Rule 38e (Admiralty and Maritime Claims) – these rules don‟t apply to admiralty/maritime claims Rule 39a (Trial by Jury) – Once demanded, trial by jury shall by designated on the docket. The trial shall be by jury unless (1) the parties, by written or oral stipulation, consent to trial by the court, or (2) the court, upon motion or of its own initiative, rules that trial by jury does not exist under the Constitution or statutes of the U.S. Rule 39b (Trial by the Court) – when trial by jury is not demanded, the court shall try the case. The court may order a trial by jury in its discretion upon motion. Rule 39c (Trial by advisory Jury; by Consent) – if it is not triable by jury, the court may try by advisory jury or it may, with consent of both parties, may order a trial with a jury whose verdict has the same effect as a trial by jury (except where trial by jury is not allowed) A. General -7th amendment: right to jury trial Why stick with jury? 1. It did come first; 2. arguably better (self informing; more cost efficient – both for individual cases and as a system as a whole); 3. political culture (requires more individual participation) -wording of 7th amendment: suits at common law [not equity] right of trial by jury shall be preserved. This freezes trial by jury to the date of amendment (1791)…would you have gotten the jury in terms of that date? -purpose for a jury is that you want the jury to go on self conscience once in a while; (America was in large debt; hope that jury would rule for it); also, when little guy is against government, you don‟t want government official deciding the case B. Freezing the status quo? Would there have been right to jury in 1971? -look to the law of England (there was better record keeping, and that is where our system came from, you can look at common law vs. equity) -only legal/common law got the right to jury -interesting question is when there was no cause of action back in 1971; or there is a completely different proceeding/institutions; what do you do when there is a merger of both law and equity claims? C. Chauffeurs, Teamsters, & Helpers v. Terry 1. Terry (and 26 others) was employed by McLean Trucking and was in the Chauffeurs union. They filed a grievance with the union, but they ignored. Terry filed suit, saying that it had violated its duty of fair representation. Disputed that jury trial should be allowed. 2. Employee seeking back pay from union‟s alleged breach of representation has the right to a jury trial. Must look at nature of the issue and nature of the remedy:
First part of the trust: Most of the judges think it is like a trust; 1. Trust Action (equity) – fiduciary relationship in which the benefactors put their faith in the trustee (like drivers putting faith in union) 2. Arbitration (equity) –there is no grievance committee and this is not a good analogy 3. Malpractice (jury) – the court doesn‟t buy this because attorney client relationship is different; more control by client (Stevens says it is this) 4. Breach of contract (jury) – breach of collective bargaining is similar -Marshall says that it is the nature of the claim (contract breach and fair representation) is two parts. One is legal (contract breach) and one is equity (fair representation; like a trust action) -Kennedy dissented because he says there should be no jury because it is an equity issue and when you are in a trust-like issue, then it is an equitable remedy, too Second part of test is the remedies: back pay for fair representation is legal =Decision: first part (split); second part (legal) = legal (jury) trial D. Amoco Oil Co. v Torcomian 1. Torcomian was to run a gas station franchised out by Amoco. Torcomian ran the store for a while without executing the agreement. Amoco brought suit for: -ejectment [legal; maybe equitable] – they argue that this is equitable, court doesn‟t buy it -preliminary injunction (enjoining them) [equitable] -preliminary injunction [equitable] -mesne (disgorgement; unjust) profits [equitable claim] -damages [legal] – they drop this because they are tying to get equitable 2. The joining of an equitable claim with a legal claim does not defeat the right to jury trial. Torcomian‟s counter-claim had both legal and equitable. Jury trial should be granted. E. if you two claims, one equitable and one legal, you hear the legal one first. The facts would be binding for the second case. F. You can waive you right to jury trial (also waived by not asking for trial by jury) -best to make your jury demand right away (pg 17); either plaintiff or defendant can request a jury trial; do the demand in complaint or answer -rule 12f: move to strike the jury demand (no right to jury trial); court can also do this on its own volition Judgment as a Matter of Law (Directed Verdict and JNOV) Rule 50a (Judgment as a Matter of Law) 1. after a party has fully been heard, the judge can grant a motion for judgment as a matter of law against the party, if there is no legally sufficient evidentiary basis for a reasonable jury to find for that party. 2. these motions may be made at any time before submission of the case to the jury. Rule 50b (Renewing Motion for Judgment after Trial; Alternative Motion for new Trial) – if the court denies this motion, it sends it to the jury subject to the court‟s later deciding the legal question raised by the motion. The movant may renew the request within 10 days after the judgment (along with a motion for a new trial). If a verdict was returned, the court may allow the judgment, order a new trial, or direct an entry as a matter of law. If no verdict was returned, the court may order a new trial or direct the verdict. Rule 50c (Granting Renewed Motion; Conditional Rulings; New Trial Motion) – If the renewed motion is granted, the court must decide if a new trial is warranted. It shall specify the grounds for granting the motion. A motion for new trial must be made within 10 days of entry of the judgment.
Rule 50d (Denial of Motion for Judgment as a Matter of Law) – if the motion is denied, the party that won on the motion may assert the grounds entitling him to a new trial should the appellate court reverse the motion. The appellate court may or may not grant a new trial, or it may send it back the trial court to determine this. A. General -directed verdict: direct the jury to come back with a certain ruling; -summary judgment is appropriate when directed verdict would be appropriate; different timing (summary is before the trial; the other two are after the trial) -summary (rule 56c) - no genuine issue as to material fact; and the moving party is entitled to movement as a standard of law -directed (rule 50) - there is no reasonable evidence to support the genuine issues of facts Can there be instances where you can have DV with no SJ? -If the judge just doesn‟t want to grant it -If he gives a little for trial, then more will be revealed than is evident with the papers. -If the judge is not sure at the time for SJ; time to think about the issue When would you not do a directed verdict and do a JNOV? -hoping the jury will make the right decision -appellate courts are more deferential to jury decisions. For a JNOV, you must have already moved for a directed verdict B. Reid v. San Pedro, LA & Salt Lake Railroad 1. Reid‟s cow was hit and killed by a train. Claim for negligence because part of the fence was down about a mile from the accident. There was a gate by the accident for the use of the landowner. 2. A directed verdict should be granted because there were two equally possible inferences for the cause [broken fence (negligence) or open gate (owner‟s responsibility)]; plaintiff must prove negligence by a preponderance of the evidence. C. Pennsylvania Railroad v. Chamberlain 1. There were 7 cars in front of the decedent‟s string of 2 cars. There were 9 cars behind, that allegedly struck the 2 cars, causing him to fall and get run over. There was testimony (from passengers and others) that said the collision didn‟t occur. One witness said that he saw the cars in the configuration, looked down, heard a crash, and then saw the cars all together with the decedent run over. 2. A directed verdict should be granted because the facts give equal support to two inconsistent inferences. There is no conflict in the testimony (if there was, it would be a question for the jury); one witness said that the 9 car didn‟t crash; another said he heard a collision. 3. The court is being aggressive in taking it away from the jury. If there were only two trains, then you can infer that the sound of the crash was the two trains. D. Different standards in different states for directed verdict; basing what evidence should be weighed in this determination; 3 different methods 1. scintilla of evidence that favors the plaintiff…let it go to the jury 2. look only at evidence that supports non-moving (usually plaintiff) party; is that enough to say that the plaintiff could win 3. federal standard: look at the non-moving evidence and any evidence that is put forward by moving party (that is not impeached or contradicted) E. In civil cases, we want the jury to decide; but we want rational decisions -JMOL is a way to control for rationality by not letting a non-issue get to jury
-Voir Dire – question the jurors before the trial; selection process; make sure that they are not prejudice; get rid of juror for cause (they can‟t be neutral) or preemptory (if the lawyer just doesn‟t want them; there is some case law saying that you cannot use this for race or gender) -Control of Evidence – limit what the jury hears so they aren‟t prejudiced by erroneous evidence -Jury Instructions -Comment on the Evidence – usually not done, because it might be too opinionated (on appeal) -Special Verdict – ask a series of questions to reach a structure for the decision; not as common because it may produce inconsistencies and irrational decisions (may have to grant new trial) New Trial Rule 49a (Special Verdicts) – The court may require the jury to return a special verdict in writing upon each issue of fact. In that event, the court may submit written questions, forms, or other methods that require the jury to give written findings. It must give sufficient explanation and instructions. If any facts are omitted, then each party has waived the right to trial by jury on those omitted issues. Rule 49b (General Verdict Accompanied by Answer to Interrogatories) – The court may submit (along with the appropriate forms for a general verdict) written interrogatories that are necessary to the verdict. The court should give sufficient instructions so that they can answer the interrogatories and get to a general verdict. When all answers are harmonious with the general verdict, then a verdict may be entered under rule 58. When the answers are harmonious to each other, but one or more is not harmonious with the general verdict, verdict may be granted under 58, in accordance with the answers not withstanding the general verdict, or it may return it to the jury for further consideration, or it may grant a new trial. No judgment shall be entered if the answers are not harmonious with each other and one or more is not harmonious with the general verdict. Rule 50 – See Directed Verdict Rule 51 (Instructions to Jury: Objection) – At the close of evidence, any party may file written requests that the court instruct the jury on the law set forth in the requests. The court may instruct the jury before or after the arguments. No party may assign as error the giving or failure to give instructions, unless they object with the grounds for objection, before the jury retires to consider its verdict. Rule 59 (New Trials; Amendment of Judgments) a. Grounds – New trial may be granted to all or any party on all or part of the issues (1) in an action by jury, where it would be granted by law; and (2) in actions without jury where rehearings have been granted in suits of equity in the courts of the US. The court may open the judgment, take additional testimony, amend findings of fact and conclusions of law or make new findings and conclusions, and direct new judgment. b. Time for Motion – no later than 10 days after entry of the judgment c. Time for Serving Affidavits – if the motion is filed based on affidavits that shall be filed with the motion, the opposing party has 10 days after service to file opposing affidavits (can be extended to 20 days for good cause or parties‟ written stipulation) d. On Court‟s Initiative; Notice; specifying grounds – No later than 10 days after entry, the court may order a new trial for any reason that would be justify granting one on a party‟s motion. After giving notice and an opportunity to be heard, the court may grant a timely motion for a new trial for a reason not stated in the motion. It must specify the grounds for granting the order
e. Motion to alter or amend a judgment – shall be made no later than 10 days after entry of judgment. A. General: Rule 59 – motion for new trial -10 day rule-jurisdictional; can‟t be waived; longer will be motion under rule 60 (reopen trial) 1. Procedural error at trial (wrong instructions, wrong evidence, etc) -juries acted inappropriately (harder to prove, have to look at you jurisdiction rule, you would need third party evidence) -legal error that on appeal would be looked at de novo 2. Result was wrong (has to choose either 1 or 2 and comes back with 1.5); against the great weight of the evidence; Judge can‟t render a verdict on the facts (there is an issue, but it is tilted way to one side) – must grant a new trial B. Lind v. Schenley Industries 1. Lind is a salesman on a commission basis. He got promoted and a salary. He became district manager; same salary, but gets oral promise saying that he will get 1% of commission (more than anyone else in the company). Jury found for Lind; judge granted JNOV and NT because it was against the weight of the evidence. (can‟t appeal NT on its own; coupled with JNOV). 2. A judge cannot substitute his judgment for the jury just based on the weight of the evidence. In order to grant new trial the jury must have made a seriously erroneous decision.
VI. Appeals Final Judgment Rule 28 U.S.C. § 1292a – the court of appeals shall have jurisdiction of appeals from: 1. Interlocutory orders of US district courts (plus Canal Zone, Guam, Virgin Islands) or of the judges thereof, granting, continuing, modifying, refusing, dissolving injunctions except where direct review may be had by the Supreme Court 2. Interlocutory orders appointing receivers or refusing orders or to take steps to accomplish the purposes thereof (such as directing sales or other disposals of property) 3. Interlocutory decrees determining the rights and liabilities of the parties to admiralty cases in which appeals from final decrees are allowed 28 U.S.C. § 1292b – When a district judge, in making an order not otherwise appealable, shall be of the opinion that such order involves a question of law with substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order. The court of appeals may take such an order in its discretion, if the application is made within 10 days of the order (it shall not stay proceedings in the district court unless the judge so orders) Rule 54b (Judgment upon Multiple Claims or Involving Multiple Parties) – the court may direct entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination of judgment. In the absence of such determination, any order or other form of decision which adjudicates fewer than all of the claims shall not terminate the action as to any of the claims or parties, and the order is subject to revision at any time before entry of the judgment adjudicating all the claims. A. General 1. What issues can be appealed? -final decision: ends litigation on the merits; nothing left except to execute judgment -had to be brought up before (on objection, exceptions) 2. How do you preserve an issue for appeal? -object to evidence; you don‟t have to take exception to an overruling the objection (rule 46) -why do you have to preserve? You don‟t want to sandbag -exceptions: 1) plain error exception: you can argue when the error was so obvious, that anyone should have recognized it; seems like you should have objected; this is used primarily in the criminal context; fairly narrow in civil context 2) you can always raise issues of jurisdiction; subject matter jurisdiction (liberty mutual is a case that is about personal jurisdiction) 3) significant change in the law since the trial court made its decision 4) prevailing party (won below) in the appeal can defend its judgment on any issue that was raised but not decided below B. AetnaCasualty & Surety Co. v. Cunningham (packet): insurance company v school 1. there are two claims: contract indemnification ($32k) and fraud (no punitive damages) 2. trial court finds that defendant liable for indemnity claim and not on fraud claim -they got the money they were looking for -they were allowed to appeal because of the “Quality of Judgment” -winning on indemnity claim is different from winning on fraud claim -C is close to bankruptcy and will discharge the contract claim in bankruptcy;, if they got a fraud claim, they can possibly keep that money (argue that to the bankruptcy judge) -It has to be something more than “I am outraged” or “One looks better”
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3. Aetna is allowed to appeal, but they end up losing on appeal Carson Products, Co. v. Califano 1. Carson loses at trial court; Carson is arguing that their product is a trade secret; don‟t want to have to reveal it on the label; the court ruled that it was not a trade secret because FDA said it wasn‟t (revealed in journal article) 2. while it was in appeal, Zotos decision came down and changed the rule on trade secrets (FDA process for trade secrets was wrong) -appealed because it might have been a trade secret and because the process was changed (rights are being violated); -Carson‟s lawyer is trying to free-ride on the Zotos‟ lawyer work; Should they be allowed to go back because it was pending and the law changed? Yes, there is no “final decision.” 3. Zotos case is more persuasive because of the degree that it was surprising (different from precedent). To allow new law to be brought in to the appeal/case: -it must also be sweeping/profound – changes some sort of procedure (FDA changed the procedure for future cases on trade secrets) -it must be a purely legal question for the appellate court; -full opportunity to brief at the appellate court –court knew that it was an important issue that needed to be determined; both parties got to present its case (there is a paper record) 4. Carson wins on allowing the appeal, but it actually lost the appeal; the importance is the ability to appeal things not raised before (change in law) Massachusetts Mutual Life v. Ludwig – life insurance claim 1. double indemnity insurance; if killed while a passenger on a train, he gets double payment; he was killed by a train, on his way to the train; insurer did not pay indemnity -Policy (contract) was issued in Michigan; incident occurred in Illinois -the different laws will strengthen one case of the other -insurer wants Il because it will probably get no double indemnity 2. case was brought in Illinois (must look at Illinois Laws to tell which state laws apply) -trial court determines that Michigan applied (insurer lost this); however, they say that it is not double indemnity (opposite of what was expected) -appealed by the State vs. the Insurer; because single indemnity was not what they wanted -insurer said that the decision was correct, and if it wasn‟t, the court was incorrect in applying Michigan laws. Illinois laws would only allow for single indemnity. -if you are defending an appeal, you can defend on any ground (even a prior decision that was in your favor; anywhere in the record) supported by evidence Liberty Mutual Insurance v. Wetzel 1. Wetzel sued Liberty alleging the insurance benefits and maternity leave provisions violated Title VII of the Civil Rights Act. The court granted partial summary judgment (violation of Title VII, but didn‟t give any of the remedies sought). Liberty appealed; appellate court ruled it had jurisdiction and affirmed. 2. No appeal should be allowed on partial summary judgment; there was no final judgment Lauro Lines v. Chasser 1. Lauro, a cruise ship, was hijacked by terrorists. Passenger(s) are suing for injuries and a wrongful death in NY. Lauro moved to dismiss because of a forum clause printed on the back of the ticket (Naples). District court ruled that the clause didn‟t give proper notice; appealed. 2. Except in rare circumstance, appeals can only be made after final judgments. The appeal of the forum was an interlocutory order that couldn‟t be appealed until after the final judgment.
G. Factors for collateral order doctrine (interlocutory appeals) 1. lower court has to have conclusively determined the disputed question. There is nothing gained by waiting, and it isn‟t going to be changed in the district court 2. resolve a completely separate issue from the merits of the claim (correct court, immunity, huge bond that has to be posted to proceed with the case, etc) 3. effectively unreviewable on appeal from a final judgment. One of the reasons you can‟t wait is that you can‟t do anything at the end. If you wait until after you have been in the court room, immunity would mean nothing. (Lauro fails on this point) -this decision might be about it being tied to expenditure of time and resources; -continuum: Immunity ---- MTD (no legal claim): in this spectrum, there are costs involved with going through with the trial; forum selection clauses fall in the middle of this range Immunity will always allow appeal on collateral order; MTD won‟t Post-Trial Motions and Standards of Review Rule 52a (Findings by the court; Judgment on Partial Finding: Effect) – In all actions tried upon the facts without a jury, the court shall find the facts specially and state separately its conclusions of law thereon. In granting or denying interlocutory injunctions, the court shall similarly set forth fact and conclusions of law. Requests for finding are not necessary for purposes of review. Findings of fact shall not be set aside unless clearly erroneous and due regard will be given to the trial judge in determining the creditability of the witness. The finding of fact and conclusion of law may be made orally and recorded into the record. Rule 61 (Harmless Error) – No error in the admission/exclusion of evidence; in any ruling/order; in anything done by the court/parties is ground for granting a new trial unless refusal to take such action appears to the court inconsistent with substantial justice. A. Standard of review (Intensity of review) - Jury decision: hard to get questions of fact overturned 1.Abuse of discretion -most deferential; least likely to overrule -typically used when the trial court is applying the law to the facts; only if the district court judge acted unreasonably in applying -when it is a big decision made, the appellate court will look more carefully (if it is going to be under this standard, then you may want to argue that it was a really important decision) 2.Clearly erroneous -standard of review for looking at judges determination of fact 3.De Novo -least deferential -trial court determines a question of law (procedural, bad evidence, etc) -appellate court reviews the whole case B. Anderson v. Bessemer City 1. Anderson sued the city for gender discrimination for a position. Trial court found that she was the most qualified. Appellate court overruled, saying it was clearly erroneous. 2. When reviewing factual findings, the appellate court should not be reviewing de novo. When there are two permissible views of evidence, the factfinder‟s choice can‟t be clearly erroneous (unreasonable and manifest injustice) 3. If it was based on just paper evidence, there would be more scrutiny.
VII. Personal Jurisdiction Foundations of Personal Jurisdiction Rule 12a (When a defense is Presented) 1. answer shall be given within 20 days or if waiver of service has been granted, within 60 days in the U.S. or 90 days outside the U.S. 2. within 20 days to give a counterclaim, and the other party has 20 days after receiving the counter claim (unless otherwise directed) 3. A. The U.S., an agency of the U.S., or an officer/employee of the U.S. sued in an official capacity shall respond within 60 days; B. officer/employee sued in individual capacity for acts or omissions occurring in connection with performance of duties shall respond within 60 days 4. A. if a court denies a motion, the responsive pleading shall be given within 10 days of the notice by the court; B. If the court grants a motion for more definite statement, the responsive pleading shall be given within 10 days after more definite statement arrives Rule 12b (How a defense is Presented) – every defense shall be asserted in a responsive pleading, except that the following can be made by motion: 1. lack of jurisdiction over the matter; 2. lack of jurisdiction over the person; 3. improper venue; 4. insufficiency of process; 5. insufficiency of service of process; 6. failure to state a claim that relief can be granted; 7. failure to join a party. Rule 12c (Motion for Judgment on the Pleadings) – after pleadings are closed, but within such time as not to delay the trial, any party can move for judgment on the pleadings. If matters outside the pleadings are presented, the motion shall be treated as a motion for summary judgment and disposed of. Rule 12d (Preliminary Hearing) – the 12b1-7 rules and the 12c rules shall be heard before trial Rule 12e (Motion for more definite statement) – if the pleading is so vague or ambiguous that a party cannot reasonably be required to frame a response, the party may move for a more definite statement. The motion should point out the defects and the details desired. If the motion is not fixed within 10 days, the pleading may be stricken. Rule 12f (Motion to Strike) – upon motion, the court may order stricken from any pleadings, any insufficient defense or redundant, immaterial, impertinent or scandalous material. Rule 12g (Consolidation of Defenses of Motion) – A party may move to join any other motions available. If a party makes a motion under rule 12, it is not allowed to make another motion on defense or objections omitted from this motion (except under rule 12h2) Rule 12h (Waiver or Preservation of Certain Defenses) 1. a defense of lack of personal jurisdiction, improper venue, insufficiency of process or service of process is waived if omitted from a rule 12 motion. 2. a defense of failure to state a claim with relief, failure to join a party, or an objection to failure to state legal defense to claim can be made by pleading, motion after pleading, or at trial on the merits 3. whenever it appears by suggestion of the parties that the court lacks jurisdiction of subject matter, the court shall dismiss the action A. General -In personam: if you win, you have ability to go after the person for that amount -In rem: if you win, you have the ability to go after the value of the land; must deal with the status of the land -Quasi In rem: way to get around the in personam jurisdiction; use hook (land) to get jurisdiction, but it is limited to the value of the land; if the land is worth more than the judgment, then the remainder after legal fees would be sent to the owner.
-You can try to use intangible property to get in rem. If a debtor (owes money to the defendant) walks through the state, then they can get jurisdiction through quasi in rem. Limited to the amount of the debt (value of the property). -Can you use quasi in rem to get process started, and then serve them personally when they showed up? Constitutional? Seems like it, presence is good. -states began to pass laws for special appearances to argue that there is no jurisdiction; not going to allow it to go to the point of allowing in personam. B. Sources for jurisdiction: -Due process clause: violates due process to render judgment unless it has jurisdiction. (not relevant yet, in this case; becomes very important) -Full Faith in Credit clause (at this point the 14 th amendment hadn‟t been ratified yet): pg 81; one state has to give full faith and credit to the judgments of other states; unless it is so invalid (the first court doesn‟t have the power to render the judgment) that it shouldn‟t have been made; this case was in federal court, so technically, it does not apply -There is a federal law that says that it has to give full faith and credit to valid state decision C. Pennoyer v. Neff 1. Mitchell v Neff (case 1) -Mitchell helping Neff get the land; owed money (legal fees in Oregon); default judgment because Neff never showed up (as good as any other judgment) -why is there a case? Service was ok…except that the court didn‟t have jurisdiction -Neff didn‟t show up because he lived out of state; there was a constructive notice of process (notification by publication) in a small religious local newspaper in Oregon -Neff actually did not own the property, he had a land patent (which arrived between the two cases); that is when he actually owned it -Mitchell attached the land; and when he won on default judgment, the land was sold at auction so Mitchell could get his payment (coincidentally Mitchell won the bidding, too)…Mitchell then assigned the property to Pennoyer 2. Pennoyer v. Neff (case 2) -ejectment case in Oregon federal court; Neff was claiming he still owed the land -this case is dependant on whether the first case was valid (who owned the deed to the land) -this is about service of process and whether the court had jurisdiction in case one 3. The court held that there was no personal jurisdiction; if he was not in the state, you cannot serve notice; presence is sufficient and necessary to have jurisdiction 4. In this case, the statute says that when the damages are for money or property, it must be attached; no person is subject to the lawsuit unless he appears in the court, or is served in the state, or owns property that is attached. So…There was a statutory problem (didn‟t even have to get to whether it was constitutional) -the US supreme court decided not to deal with the statutory problem -they wanted to take this case to talk about the constitutional powers to personal jurisdiction; focusing on the federal issue of jurisdiction -even if you followed the statute, you can‟t constitutionally assert jurisdiction without presence -assume that Neff did own property, and it was attached. No problem with the statute. Is it constitutional? There is a question of notice, but the assumption is that if you own property you have a vested interest. States can require more, but not constitutionally necessary. -Can you adjudicate just because the person owns land in the state? Yes, because the person owns property, he has presence/benefits from the state. If there are questions about the land,
the state should have jurisdiction over that cause of action (in rem jurisdiction…tort, trespass, title, etc). This is a a case of quasi in rem: against a person not in the jurisdiction, but owns land there (hook). D. Presence is the key: it is not functional to force people to be subject to jurisdiction; requiring them to come to the claim (when there is no presence) is a huge imposition 1. you could be sued all over the place; convenience to the defendant -what about for the plaintiff? Not convenient, but he is the one bringing the suit (started the litigation and has control over the litigation); however, in tort cases, defendant may have started the issue that is coming to suit -less non-meritorious claims, but also less meritorious -if it is convenience, why not say that you have jurisdiction over 100 mile radius 2. this case is all about sovereignty; using international to guide the state 3. worry that there will be a home court advantage; bias -choice of law is a completely different question; this is decided by the choice of law principles that apply in the state where action is brought (usually in tort cases, the choice will be where the tort occurred). 4. it is the equivalence of notice; you know you have notice if presence is as stated above E. Carnival Cruise Line v. Shute 1. The Shutes purchased cruise tickets for a Carnival Cruise (FL) going from CA to Mexico from a travel agent in WA. A provision of the ticket said that all litigation would take place in FL. Mr. Shute was injured and filed suit in WA 2. A reasonable forum selection clause is enforceable to establish consent to a jurisdiction. Therefore the minimum contacts test is not applicable. 1) it would be hard for Carnival to have to travel all over the place; 2) clause allows for definiteness; 3) lower costs should lead to lower ticket prices F. Hess v. Palowski -Hess is from PA; hits Palowski on a MA highway; leaves the state -the court says that there is jurisdiction based on a PA statute; driving on the road = accept the risk of coming under jurisdiction; appointing the registrar as an agent for you for service of process -this is implying consent (without you knowing about it) that you will have presence when you leave; the difference between formal and implied appointment is not substantial -MA can‟t keep PA citizens out of the state; license is a privilege (there should be implied consent) -you are not outraged that Hess has to stand trial for a tort he caused in another state…trying to fit it into a jurisdiction. You say that you are accepting responsibility for the actions that you do while in the state. -if you reach out and touch another state for a certain activity, you open yourself to a lawsuit related to that particular action in that state - this seems to be more convenient: plaintiff is there, witnesses are there; MA has an interest in how its roads are used, etc [functional consideration] -the statute is there because that was the way around Pennoyer rule; before IS came around G. Milliken v. Meyer (presence and consent are the previous basis for jurisdiction) -Third traditional basis for jurisdiction: Domicile 1. Meyer is domiciled in Wy, but he has left the state. He is sued in Wy -Domicile: where you have an indefinite intent to remain. Where the “true fixed and permanent” home is. Resident is where you are, but don‟t intend to stay. -Meyer was out of state; so he wasn‟t actually served there. He was served notice through the newspaper. He didn‟t know about the case until he returned and someone was living there. 2. He is subject to jurisdiction in Wy; the only issue is if he got proper notice
-as jurisdiction gets more construed, the question of notice becomes a more separate issue -this service was served in newspaper, at the abode, personally (but out of the state); ok -domicile: you get privileges of that state; as a quid pro quo, you should have to stand trial there; the other issues don‟t really stand (no bias in your home state; it is fairly convenient to come back to your domicile, which is the biggest connection to any state; notice is satisfied because there are probably people who would inform you) Redefining Personal Jurisdiction A. International Shoe v. Washington (the big case that sets the standards for jurisdiction) 1. IS was a DE corporation with principle business in MO. A claim was brought in WA because they employed 11-13 salesmen, who showed samples. The orders were shipped directly from MO to the customer; but the salesmen got commission. The state sued for its contribution to unemployment by giving notice to a salesman and by mail to headquarters. 2. There is personal jurisdiction when there is minimum contacts with the state. -you could have argued that by doing business there, you are implying consent (it would be stronger if you had a statute saying that they were required to appoint an agent in order to sell goods) -didn‟t require an agent; so how did they get around this -they break from Pennoyer: In Personam jurisdiction is allowed if there are minimum contacts and it doesn‟t infringe on sense of fairness/justice; Pennoyer is outdated -defendant, if not present, must have certain minimum contacts with the state, such that maintenance of the suit does not offend traditional notions of fair play and justice -due process depends on the quality and nature of the activity and the sense of fairness -when looking at fairness: you should look at inconvenience to the defendant of having to defend a suit in a foreign state (distance, money, resources; relative to the size of the defendant); assumption is that big corporations can get themselves anywhere in the US (not inconvenienced) -level of activity required for jurisdiction and the relationship between activity and harm -if there is a lot of activity, then it isn‟t inconvenience for you to get there -if the relationship between act and harm is close, then you should be responsible for the consequences of the action 3. International Shoe – test from personal jurisdiction; from due process doctrine -minimum contacts that purport to the standards of fair play -standard, not a rule; case by case basis -if the contacts get so persuasive, it becomes general jurisdiction (usually domicile/incorporation) -territorial lines still matter; it isn‟t completely about convenience (still have to observe sovereignty) -Pennoyer: is there presence; International Shoe: is it fair for defendant to come here -you look at contacts at the point when the claim arose B. McGee v. International Life Insurance Co. (high water mark of per. jur. –single contact) 1. Franklin (CA) had a policy with Empire (AZ). International (TX) bought out Empire; they sent statements to CA and Franklin sent payments to TX. When Franklin died, they refused to pay because they said she committed suicide. McGee brought suit in CA, won, but TX did not enforce (improper jurisdiction)
2. A state can exercise jurisdiction over a defendant whose contacts with that state consist solely of a single act or contact. International only had the one policy in CA, but it had continuous contact, and the suit was highly related to that interaction. C. Functional considerations for taking jurisdiction: 1) plaintiff‟s interest? Usually they ask about the defendant; in this case, the plaintiff will be at a real disadvantage because the little guy will have to go down and chase the big guy; 2) what is the foreign state‟s interest? Insurance is usually a pretty big state law issue (regulated by the state); 3) efficiency? Where does it make more sense. In this case CA is more efficient because the case turns on evidence and witnesses that would mostly be in CA (suicide or not); 4) defendant‟s interest? The defendant is bigger and has more resources. They can more easily travel to another jurisdiction D. Applying Jurisdiction: Jurisdiction is always two part process: plaintiff has already consented to that court; the defendant is the one who will question 1. find some authorization for this court to hear the case about this defendant; statute or common law; long arm statutes (37-39 in packet) 2. is the exercise of jurisdiction constitutional? -Two types of long arm statutes: 1. RI – they want to enforce every case where it is constitutional; if the constitutionality changes, the statute changes with it; the two step process becomes a one step process 2. IL – they set up what types of cases they want jurisdiction over; they are going to have less cases than are constitutionally allowable (pick and choose within the entire set of constitutional jurisdiction); Supreme Court cannot determine the meaning of the statute once the State has invoked jurisdiction. E. Hanson v. Denkla 1. Donner (Penn) set up a trust with a DE bank. Donner moved to FL, where she drew up a will with her two daughters as primary heirs. She said that the trust was to go to the grandchildren of her third daughter. When she died, the daughters filed suit in FL, saying that the appointment was invalid and the trust should go into the estate. At the same time, there was a trial in DE to determine where the trust should go. The FL court said that the money should go into the state. When introduced in DE, the court said that FL didn‟t have jurisdiction over the trust company; they said it was valid and should go to the grandchildren. 2. A state may not exercise jurisdiction over a non-resident defendant with only sporadic and inadvertent contacts with the state. Allowing FL laws to govern over the DE trust would be allowing FL to impose its rules in DE. Without minimum contacts between trust company and FL, there is no jurisdiction. The only semblance of contact is that Donner moved there after establishing the trust. There was no purposeful availment by the company. F. World-Wide Volkswagen v. Woodson 1. Bought car in NY; the car blew up in OK. They‟re claiming there was defective design in the fuel tank and sued distributor, manufacturer, and small dealership. Volkswagen didn‟t contest jurisdiction – they‟rebig (not sympathetic); they had service contracts to fix cars in those states; had national advertisements (probably wouldn‟t get out of general jurisdiction) 2. all the money is with the big two. Why is the little guy fighting so hard about jurisdiction? They are trying to split up the defendants so they can point the finger. State courts were giving out large awards (not federal). There is a rule that says that defendants can enact removal (take the case to federal court). If they can keep the NY defendant and NY plaintiffs in the case, then it cannot be removed 3. Oklahoma didn‟t have jurisdiction over World Wide and the mom and pop store a. Applying the McGee factors for jurisdiction 1. Plaintiff‟s interest – they were in NY; they are probably now in AZ; why OK
2. state‟s interest – there laws are not going to be applied; there is some interest because it deals with their roads 3. efficiency – the witnesses and evidence is there; but it is a product liability case, so there is also outside evidence 4. defendant‟s interest – might be inconvenient because it is a small company, b. What about hanson (purposeful availment)? There is no jurisdiction if you apply this threshold test. Did they purposefully avail themselves to the jurisdiction of this state or is it because of the actions of a third party. c. Another factor seems to be the issue of foreseeability. It is foreseeable that if you sell a car, that the car will travel to any of the 48 states and get into an accident. However, this is not the test. The test is whether it was foreseeable that your actions would open you up to jurisdiction in that state. G. Asahi Metal Industry Co. v. Superior Court 1. Zurcher filed suit against Cheng Shin (Taiwan; tire tube manufacturer) in CA court. Cheng Shin filed a cross claim for indemnification against Asahi (Japan; tire tube valve assembly). Zurcher settled with Cheng Shin. The only thing left was the cross claim. Asahi did no direct business with CA; 1-2% went to Cheng; some of that went to US; 20% of that went to CA. 2. For minimum contacts, you need to do more than put a product into the stream of commerce and foresee that it would come to the forum state. It must take advantage of the benefits of the state (if Asahi made them conform to CA standards; advertising; repair shop). 3. Traditional notions of fair play and substantial justice. CA interests were put to rest with Zurcher; between to foreign companies; inconvenience to defend. 4. Three opinions: a. O‟Conner - just putting it into the stream of commerce does not give jurisdiction; not foreseeable that suit will be brought; Knowledge + Intent/Benefit/Target b. Brennan – knowledge that it will go into the state is enough; he even casts doubt on International shoe; they had the ability to contract for keeping it out of certain jurisdiction (easier for the upstream guy than the downstream guy) c. Stevens – depends on the number of things out there. If you put enough into that jurisdiction, then you are liable. H. Burger King Corp. v. Rudzewicz 1. Rudzewicz (MI) entered into franchise agreement with BK (FL). The contract said that it would be governed by FL law; payments to Miami headquarters. They had to attend training in FL. Fell behind in payments; BK brought suit in FL. 2. there is a statutory rule. It is constitutional. Purposeful availment and min. contacts: 1) contract (not enough alone because of unequal bargaining power; 2) training class; payments 3. Fairness: not only to defendant; also to plaintiff, federal system, forum state; Trial in FL The most Recent Approach: A return to the Foundations A. Burnham v. Superior Court 1. Burnham (CA) sued for divorce in CA. Husband was served notice while voluntarily visiting the kids for three days. He was in on business and then came to visit. 2. Transient jurisdiction is valid and does not violate due process. -scalia: when he started writing the opinion he had the majority (7 votes). After the opinion, he barely has plurality (holding stood because brennen agreed that there was jurisdiction -scalia: doesn‟t base it on IS test; he said that for jurisdiction presence is enough; good enough for due process when constitution was written, good enough now
-brennan (transitory jurisdiction still fits with IS) says that just because he was there for 3 days, he was availing himself of the benefits of CA; he enjoyed and has ability to travel there -makes the minimum contacts test a farce -white opinion: doesn‟t line up with minimum contacts; IS is the standard; there should be certainty as to jurisdiction. The rule in this case is a bright line, clear rule; no min. contacts Footnote 1 on pg 152: general jurisdiction -due process is not offended by corporation jurisdiction (continuous contacts) -it has been applied only to corporation; no general jurisdiction with respect to individuals -suggests that you should be wary of putting general jurisdiction over individual (except domicile) B. Misc. Points 1. General Jurisdiction and Specific Jurisdiction: in terms of cases where the defendant is not there; use IS terms for jurisdiction 2. Transient Jurisdiction is like GJ; served while in the state, suit for anything; but it is for when the defendant is present 3. 4k1B –case between two parties; there is a third party who would be subsequently liable -it is good to have everyone in the same room; so that you don‟t have to have a second suit -there are other necessary parties to have in the suit; you can pull them into the federal court if the party is within 100 miles 4. 4k2 – claims arising in federal law (no diversity claim) -there are some defendants who are foreigners; they have enough contacts with the US to get jurisdiction, but not enough with any particular state (for availment) -subject to federal jurisdiction Notice and Personal Jurisdiction A. Mullane v. Central Hanover Bank & Trust Co. 1. Bank tried to establish a common trust (113 small trusts) through the NY court. Pursuant to NY statute, all beneficiaries were notified through publication in a local paper for 4 weeks. Mullane, who was appointed special guardian for all beneficiaries not otherwise appearing in the action, objected to the notice. They should have done it by mail, since they had the names and addresses of the beneficiaries. No due process (14 th amendment). 2. The bank put it in the Wall Street Journal. It was probably tough to serve every single beneficiary. The whole idea behind the trust is that it is for the unsophisticated guy to diversify (probably won‟t read WSJ). 3. notice must be of such nature as to afford that the people would reasonably learn; this is a standard, not a rule; keep costs down; groups of people that are representative, so 100% notice is not needed. Publication by mail is almost never going to be sufficient; should supplement 4. Personal service is not required to give notice; there is a circumstances test; here mailing was fine for notice
VIII. Subject Matter Jurisdiction Introduction: the Constitution Article III: section 1 – the judicial power of the US shall be vested in the Supreme Court, and in inferior courts (that Congress shall establish). Judges shall hold their office during good behavior and shall at stated times, receive compensation that shall not diminish while there. Article III: section 2 – the judicial power shall extend to all cases (law and equity) arising under the constitution, laws, treaties; all cases affecting ambassadors, ministers, consuls; cases of admiralty and maritime; to controversies where the US is a party; to controversies between two states; between citizens of two states; etc. The Supreme Court shall have original jurisdiction over Ambassadors, ministers, consuls; and where a state is a party. In all other cases, the Supreme Court shall have appellate jurisdiction. The trial of all crimes (except impeachment) shall be by jury; shall take place in the state where the crime happened. A. Does the court have power over the case itself? Federal entities only have the power granted to them by the constitution. If Federal Court has SMJ, this does not mean that the state courts do not have jurisdiction; most federal cases are concurrent (also jurisdiction in state court). There are some exclusive federal jurisdiction [copyright and patent (trademark is concurrent)] B. Constitution: Article III -List of types of cases (heads of jurisdiction) that constitution is giving power to federal courts -must fall within these heads of jurisdiction; there must be statutory grant allowing it (congress must give fed court jurisdiction) C. Two heads of subject matter jurisdiction: diversity and federal question jurisdictions Diversity Jurisdiction 28 USC § 1332 – Diversity of Citizenship; Amount in Controversy; Costs a. the district courts shall have original jurisdiction of all civil actions under $75,000, exclusive of interest and costs, and is between: 1) citizens of different states; 2) citizens of a state, and citizens and subjects of a foreign state; 3) citizens of different states and in which foreign states or citizens or subjects are additional parties; 4) a foreign state as plaintiff and citizens of a state or of a different state. b. Except where provisions made in a statute of the US, in a case under $75,000 (with no setoff or counterclaim) court may deny costs to the plaintiff and may impose costs on the plaintiff. c. For purposes of this section: 1) a corporation shall be deemed a citizen of the state where it is incorporated and the state where it has principle place of business except in insurance cases. Insurers are citizens of the states where the insured are citizens. 2) legal representative of the estate of a decedent shall be deemed a citizen in the same state as decedent. d. the word “states” includes territories, DC, and Commonwealth of Puerto Rico 28 USC § 1335 – Interpleader a. district court shall have original jurisdiction of any civil action of interpleader filed by any person or entity having possession of money or property over $500 (or a bond, note, etc), if: 1) two or more adverse claimants, of diverse citizenship are claiming to be entitled to such money or property; and if 2) the plaintiff has deposited such money or property into the registry of the court, there to abide the judgment of the court. b. 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 each other.
A. Mas v. Perry 1. Mas (citizen of France) was married in Mississippi. They lived in LA, where they were graduate students. Two years later, they moved to Illinois, but they intended to return to LA until Mas finished his studies; they were undecided where they would go after that. While Mas lived in LA, they rented an apartment from Perry. They got judgment against Perry in federal court, for watching them through a two way mirror. 2. For diversity purposes, a person must change his domicile by taking up residence in another jurisdiction with the intent to remain. For diversity, there must be complete diversity, and it is based on domicile, not residence. There was diversity for two reasons: Mas was an alien; the wife was a domiciliary of Mississippi (never established a new one). B. corporation has one principle place of business and one place of incorporation; to determine principle place of business, a court will look at: -nerve center: where are the main (executive) offices -major assets: where the factories, equipment, sales, every day business -total activity: look at everything, make a subjective decision Additional Citizenships: -Insurance co: have extra citizenship of being a citizen where they have an insured -Partnership/Unions: wherever there is a member; they are a citizen. C. General There may be a bias to staying in a state court; reason for moving it to federal court if there is jurisdiction - the argument is that the judges might be higher caliber, better process; another argument is that state judges are elected and they have other issues (protect citizens) Why would people choose fed over state if they have home field advantage? -prefer better quality -better procedure for you -less congestion; faster adjudication Seems a little troubling if the policy issue is to limit federal claims -there have been attempts to get rid of diversity jurisdiction (no bias any more; people bringing the suit take it straight to federal court) -or at least to only let the defendants choose Amount in controversy requirement: to get to federal court it has to be over $75k D. Saadeh v. Farouki 1. Saadeh (Greek) sued Faouki (Jordan, permanent resident in MD) for a defaulted loan. 2. There is no diversity jurisdiction between two aliens. Might be constitutional, but they are interpreting a statute to avoid the constitution. The revision was about restricting jurisdiction. It would be against the policy of the amendment to allow more cases in (legislative intent). E. Hypos: -sarah (ok) and candi (va) v. Miranda (ok) -no diversity; not complete (is there a state on both sides of the v.) -complete diversity is a statute requirement; the constitution only requires minimal diversity -statute and constitution has very similar language as to diversity; in terms of jurisdiction generally, statutes are more restrictive than constitution -in interpleader cases (§ 1335): treat it as a whole; you can‟t have complete diversity unless each person is from a different state; the courts said that the constitution has a minimal test (so that you can get into federal court; gives congress more flexibility); congress doesn‟t have to use it always (Congress has the power to change the rule) -must have complete diversity to get to federal, unless congress enacts its power
-Sarah (ok) v. Corp (DE & ok) – doesn‟t meet complete diversity; also doesn‟t meet minimal diversity (there is only one entity and it is a citizen of OK) -Mark (md) v. Farouki (?) -if it is citizen v. alien, then it gets to federal court -1332 amended: alien admitted to US for permanent residence is citizen where he is domiciled Federal Question Jurisdiction 28 USC § 1331 (Federal Question; Amount in Controversy; Costs) – district courts shall have jurisdiction of all civil actions arising under Constitution, laws, treaties of the US 28 USC § 1257 (State Courts; Certiorari) a. Final judgments rendered in the highest state court may be reviewed by the supreme court by writ of certiorari (where validity of a statute of any state is drawn in question on the ground that of its being repugnant to the constitution, law, treaties of the US or where any title, right, privilege, or immunity is set up by the constitution, laws, treaties of the US) b. highest state court includes DC court of appeals A. General 1. Importance of this test is to allow federal questions to get into a federal court to preserve rights -uniformity of interpretation; national scope of what the law means -but if there is concurrent (supreme and state court to choose between); states don‟t have to follow federal precedent -a disdain for competence of the state judges (not stated; may not be true) -states might not have enforced the federal question of the law (in the time of civil rights, there may have been forums that were unsympathetic to the federal law; would southern states enforce the civil rights laws?) -in federal court, the congress can appoint people who are committed to the federal principles 2. Holmes opinion: federal questions are those that arise under the federal law; the source of the law that creates the cause of action -title 7 suit (gender equity) between people in the same state: can get to federal court -what if the case is just about the facts; not the concerns (not about uniformity, competence, forums) or the interpretation of the federal law? YES, you get into federal court; you have to determine jurisdiction at the outset, and most times (in notice) it will be hard to tell 3. Fink and Tushnet: what you ought to do is ask “what is the national implication for disposing the case in federal court?” -how likely is it that the national interest will in the fact be implicated? -how likely is it that the supreme court will use its limited resource to decide the federal issues where the record is made in the state court? 4. No amount in controversy determination for federal question jurisdiction B. Shoshone Mining -you can get a mining patent for the right to the land -if there is a dispute over who owns the land, there is no diversity jurisdiction -federal law is the one that gives patents -patents are federal; but the issue of the claim is who owns the land (statutory) -probably no federal jurisdiction -technically meets the Holmes test: you are arguing about the land in terms of the patent law (but the case won‟t be affected by the patent; it is just about ownership)
C. Louisville & Nashville Railroad v. Mottley 1. Motleys were injured while riding on the train. Given lifetime passes to settle. Congress made free passes unlawful (used for bribes). They tried to sue in federal court. 2. They claimed it was a federal question because the affirmative defense would be a federal law. This case is all around a federal law question. The problem is that the federal question is not raised until a response to the claim, even though they knew from day 1 that it was going to be about federal question (of at least fairly early, when the answer is filed) 3. Doesn‟t get to federal court because the claim itself is not a federal question; you can‟t anticipate the defense and get into federal court Garrett side note: seems like you could wait at least until the answer; allowing the defendant to get into federal court; it is still early on 4. Ends up going to state court; goes all the way up to the state supreme court, and they rule for Motley; unconstitutional to take lifetime passes -it ends up in Fed. Ct. because Congress has the appellate jurisdiction over other courts. By the time it gets to the Fed. Ct., it is clear that it is about constitutionality (federal question) Supplemental Jurisdiction 28 USC § 1367 – Supplemental Jurisdiction a. Except as provided in subsections (b) and (c) or by Federal statute, in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are part of the same case or controversy under Article III of US Constitution. b. In any civil action with original jurisdiction, the district courts shall not have supplemental jurisdiction under subsection (a) over claims by plaintiffs against persons made parties under Rule 14, 19, 20, or 24, or 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 the jurisdictional requirements of section 1332. c. The district courts may decline to exercise supplemental jurisdiction over a claim under subsection (a) if: 1) the claim raises a complex issue of State law; 2) the claim substantially predominates over the claim which the district court has original jurisdiction; 3) the district court has dismissed all claims over which it has original jurisdiction, or 4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction. d. The period of limitations for any claim asserted under subsection (a), and for any other claim in the same action that is voluntarily dismissed at the same time as or after the dismissal of the claim under subsection (a), shall be tolled while the claim is pending and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period. e. As used in this section, the term ''State'' includes the DC, Puerto Rico, and any territory or possession of the United States Sect 1367 (1990): wanted to keep all of the case law (Gibbs, Kroger; doesn‟t like Finley) -a. broad grant of supplemental jurisdiction (except for b and c); any federal action where you got something in there independently, the court will have jurisdiction over other claims under the same facts (pendant party or claim); this is the congressional grant of power for these -c. may decline if: 1) is a complex issue of state law; 2) the state claim is the main issue; 3) federal claim is dismissed; 4) exceptional circumstances -a and c codify Gibbs -b. exception only in diversity cases; if you are trying to add a pendant party, then plaintiff can‟t bring them in if it would not be complete diversity in the first place
-if it is a federal question; you can get all supplemental claims authorized -d. there is a provision that tolls the statute of limitations on the piggy backed claim while it is in federal court plus an additional 30 days A. Hypo: -two parties of same state; two claims (one federal, one not) -before statute: you could get one claim in federal court; the other would be thrown out (you have to take it to state court) -this seems silly: you are going to court on the same issue and facts, but you have to go to trial twice (unless you want to just take both of them in state court) -this problem takes away some of the reasons for selecting federal court in the first place (preserve the viability of the federal forum for hearing important claims) B. Supplemental jurisdiction-bring state claims to the federal court if it is has the same core nucleus -pendant claim jurisdiction (Gibbs): brings an additional claim that is brought by the plaintiff; could not be brought independently in federal court -pendant party: add another party to a suit that would not normally be allowed in federal court (Kroger/finley) -ancillary claims 1. Federal lawsuit against matt; wants to bring counter claim State law claim for assault 2. impleading of a third party (if I am guilty, a third party is also liable for some or all) Sarah sues Laura in federal claim (diversity); impleads mike (not diverse from Laura) C. United Mine Workers v. Gibbs 1. Gibbs was hired to run a mine. Union threatened Gibbs and forcibly prevented the mine from opening. Gibbs lost his job and began losing trucking contracts in nearby areas. Gibbs brought suit on a Federal claim under the Labor Management Relations Act, and a state claim of conspiracy to maliciously interfere with his contracts. 2. The Federal court can hear both claims, as long as they arise from a common nucleus of operative facts. If it appears that the real claim is the state claim (and the federal claim is an appendage), the court can dismiss the state claim so that it can be heard in state court. Results from Gibbs -common nucleus of operative facts: if the same set of occurrences will be brought in both cases -what is convenient; what makes sense to be brought in the same case -it is a malleable standard -246: consider without regard to federal/state, and try to see if it would be expected to be brought in one proceeding; but expectations will be determined by the rules (this is circular) -common sense test -under this test; Gibbs can be brought in federal court; federal court is not obligated to take it -factors for allowing supplemental: - substantiality and complexity of the claims; if the main issue under consideration is under state jurisdiction, it may be better for the state to decide -is it within the exclusive jurisdiction of the federal courts; if it is, then they don‟t have the option of bringing both in state court -how much overlap is there? -has the federal claim been dismissed for some reason? If the federal claim is dismissed early, they might want to dismiss the state claim and have it heard in state court
-if the court decided that the federal claim didn‟t have subject matter jurisdiction, the state claim cannot be heard (can‟t piggy back on a non-legitimate federal claim) D. Owen Equipment & Erection Co. v. Kroger 1. Kroger (Iowa) brought suit against OPPD (Neb); can get into federal court on diversity jurisdiction. OPPD impleaded Owen (Neb and Iowa) into the case; there is no complete diversity between OPPD and Owen; thus, there is no federal jurisdiction in this claim. 2. allowed in on supplemental jurisdiction (piggyback on the first claim); ancillary jurisdiction; convenient to try both of these at the same time -if it was separate and OPPD is liable; they would have to file a state suit against Owen and the state court is not bound by the decision of the federal court 3. Kroger wants to amend to bring claims against Owen, once it is in the federal court -this is not allowed because the claims could not have been brought in the first place (no diversity); they were just brought in to share in the liability; this would be a way to circle around the statutory rule -it could constitutionally allow this; but as a matter of policy they are not going to use supplemental jurisdiction gut the essence of diversity jurisdiction 11/5 and 11/6 E. Finley v. United States -brings suit against US (federal tort claim); there has to be a grant of authority to bring suit against US -this would be exclusive to federal court -she wants to add state power company (no diversity); Rule 20 -it is within constitutional authority to be brought in federal -preserve the federal forum (can‟t bring one case in state court); convenience -there are specific limitations in complete diversity -in this case, the limitation ???? -scalia says that this is pendant party case -you need both constitutional and statutory authority -the whole line of precedent is invalid -there is no statute -this could have been said in the cases before; forced congress to do something; it was undermining all supplemental jurisdiction -why can‟t she sue state power in federal? She has to go to federal on the US case. -scalia is right in that congress hasn‟t given the courts the power yet ??????????????????????? Class Action: Nancy (MD) suing Okarche (DE and OK) on state law -some of the individuals have a claim for only $20k; not enough for amount in controversy -Zahn (before 1367) said that each person had to have the amount in controversy -note: only the person bringing has to have diversity Sarah and nancy are in a car hit by Laura Sarah sues for $80k; diversity; brought in federal court Nancy wants to join; only has a claim for $25k Class action suit: just look at the citizenship of the leader to determine citizenship
-rule of aggregation: each member of the class had to meet the minimum amount in controversy (Zahn) -if it is a state claim, then this keeps a lot out of federal courts -if it is federal, it automatically gets to federal court -there is probably constitutional reason to allow it -there is diversity -it undermines the amount in controversy requirement -claims to plaintiffs proposed to be joined; but class actions are under rule 23 (not mentioned in the exceptions)…by the text, the statute allows supplemental jurisdiction -reverses Zahn (probably not the intention of Zahn) -can you attach a bunch of people under the amount in controversy to one person who is over it? -can the SC rule on the statutory intent? Didn‟t mean to expand diversity jurisdiction. The language allows it; the reading depends on the judge (textual: will use the actual words of the statute; others: will look at the intent and history) -why didn‟t they just mention rule 23 in the exception Hypo: sarah is suing laura (has diversity and amount in controversy -can Nancy join even though she doesn‟t meet amount in controversy? -the rule doesn‟t allow supplemental for persons proposed by the plaintiff against persons joined; they left out rule 20 in the second part about joining as a plaintiff -then Nancy can be joined; poor drafting has changed the law (expanding diversity) -again, it is up to the judge whether to allow it The supreme court has been unable to decide on this issue; there is still a split -should there be jurisdiction? Wording of statute vs. History -you must look at the rules in your circuit to know how to approach it Hypo: sarah (MA) is suing laura (ok); wants to join Schmo (MA) under rule 20…not allowed Class actions: it may have not thought that Zahn was good law -it turns out that no one really thought about that case; error in drafting -why don‟t they just amend? It just isn‟t that high on congresses wish list -if every member has a low claim, it is unlikely that the class leader has a sufficient amount in controversy -some courts (texas) say that attorney‟s fees for the class action are allowed for amount in controversy Note: must meet diversity and amount in controversy unless it is a federal question Removal Jurisdiction 28 USC § 1441 – Actions Removable Generally a. Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court that the US has original jurisdiction, may be removed by the defendant to the district court of the US. b. Any civil action where the district courts have original jurisdiction founded on a claim arising under the Constitution, treaties or laws of the US shall be removable without regard
to the citizenship or residence of the parties. Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought. c. Whenever a separate and independent claim within the jurisdiction conferred by section 1331 is joined with other non-removable claims, 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. d. Any civil action brought in a State court against a foreign state as defined in section 1603(a) may be removed by the foreign state to the district court of the US. Upon removal the action shall be tried by the court without jury. Where removal is based upon this subsection, the time limitations of section 1446(b) may be enlarged at any time for cause shown e. 1) Notwithstanding b, a defendant in a civil action in a state court may remove it to the district and division embracing the place where the action is pending if: (A) the action could be brought under §1369; or (B) the defendant is a party to an action which is brought, in whole or in part, under §1369 and arises from the same accident as the action in the State court, even if the action to be removed could not have been brought in district court as an original matter. The removal shall be made in accordance with §1446, except that notice may also be filed before trial in the State court within 30 days after the date on which the defendant first becomes a party to an action under §1369, or at a later time with leave from the court. 2) Whenever an action is removed and the district court has made a liability determination requiring further proceedings as to damages, the district court shall remand it to the state court from which it was removed, unless the court finds that it is much more convenient for it to be retained for determination of damages. 3) Any remand under 2) shall not be effective until 60 days after the district court has issued an order determining liability and has certified its intention to remand. An appeal with respect to liability determination may be taken during this period to the court of appeals. If it does appeal, the remand shall not be effective until the appeal is over. Once the remand becomes effective, the liability determination shall not be subject to further review. 4) Any decision under this subsection concerning remand for the determination of damages shall not be reviewable by appeal or otherwise. 5) Action removed under this subsection shall be an action under §1369; jurisdiction is based on §1369 for purposes of this section and §1407, 1697, 1785 of this title. 6) Nothing in this subsection shall restrict the authority of the district court to transfer or dismiss an action on the ground of inconvenient forum f. The court to which a civil action is removed in not precluded from hearing and determining any claim in such civil action because the state court did not have jurisdiction. 28 USC § 1446 – Procedure for Removal a. A defendant desiring to remove any civil action or criminal prosecution from a State court shall file in the district court of the US for the district and division where such action is pending a notice of removal signed pursuant to Rule 11 and containing a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon defendant in the action. b. The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading
setting forth the claim, or within thirty days after the service of summons if no service is required, whichever period is shorter. If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant of a copy of an amended pleading, motion, order or other paper that makes it removable, except that a case may not be removed on the basis of jurisdiction conferred by section 1332 more than 1 year after commencement of the action. d. Promptly after the filing of such notice of removal of a civil action the defendant shall give written notice thereof to all adverse parties and shall file a copy of the notice with the clerk of such State court, which shall effect the removal and the State court shall proceed no further unless the case is remanded. A. Hypo: 1. Efton v. Mark on Title VII – you can remove to federal court because it is a federal question Section 1441a -if federal court would have had original jurisdiction, the defendant may remove it -reduces the plaintiff‟s autonomy 2. Sarah (MA) v Laura (OK) for state claim for $100k -can remove because there is diversity and amount in controversy -plaintiff had the ability to bring the case; defendant has some power in this situation -the one exception is in diversity cases where the defendant is in the home state *what about when Sarah brings it in MA state court? There is no bias for sarah; why is she allowed to choose between state and federal? Seems unfair -maybe it should be: if you are bringing a case in your state, you can‟t get to federal court based on diversity (it is the defendant‟s choice); but that isn‟t the rule -if she wanted it kept in state, she could sue for $50k 3. Nancy v Mark: title VII and State law disclosure (same facts) -mark can remove because there is a federal question (and supplemental jurisdiction) -if Nancy really doesn‟t want to go to federal court, she can get rid of the tile VII claim 4. Nancy v Mark: title VII and loan default (different facts) -once you have that defendant in court, you can technically add any claim (it is up to the court whether to allow it) -assume that Nancy is trying to work the system (keep it out of fed court) -1441c: allows for the removal of the entire case; if there is a federal claim; the district court may decide all claims or remand all of the state issues back to state court -should the federal court decide both? -the federal court would never have jurisdiction over the loan default -the federal court has no choice but to remand this claim down if it is removed -it can only hear the state claim if it is within their jurisdiction (supplemental or otherwise) -sloppy drafting: it should have said that the federal court has to remand any issues that it doesn‟t have power over
IX. Venue, Transfer of Venue, and Forum Non Conveniens 28 USC § 1391 – a. A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in: 1) a judicial district where any defendant resides, if all defendants reside in the same State; 2) 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) a judicial district where 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. b. A civil action wherein jurisdiction is not founded solely on diversity of citizenship may, except as otherwise provided by law, be brought only in: 1) a judicial district where any defendant resides, if all defendants reside in the same State; 2) 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) a judicial district where any defendant is found, if there is no district in which the action may otherwise be brought. c. For purposes of venue, a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced. In a State which has more than one judicial district and in which a defendant corporation is subject to personal jurisdiction at the time an action is commenced, the corporation shall be deemed to reside in any district in that State within which its contacts would be sufficient to subject it to personal jurisdiction if that district were a separate State, and, if there is no such district, the corporation shall be deemed to reside in the district within which it has the most significant contacts. d. An alien may be sued in any district. e. A civil action in which a defendant is an officer or employee of US or any agency thereof acting in his official capacity or under color of legal authority, or an agency of the US, or the United States, may, except as otherwise provided by law, be brought in any judicial district in which: 1) a defendant in the action resides; 2) 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) the plaintiff resides if no real property is involved in the action. Additional persons may be joined as parties to any such action in accordance with the Federal Rules of Civil Procedure and with such other venue requirements as would be applicable if the US or one of its officers, employees, or agencies were not a party. The summons and complaint in such an action shall be served as provided by the Federal Rules of Civil Procedure except that the delivery of the summons and complaint to the officer or agency as required by the rules may be made by certified mail beyond the territorial limits of the district in which the action is brought. f. A civil action against a foreign state as defined in section 1603(a) of this title may be brought: 1) in any 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; 2) in any judicial district in which the vessel or cargo of a foreign state is situated, if the claim is asserted under section 1605(b) of this title; 3) in any judicial district in which the agency or instrumentality is licensed to do business or is doing business, if the action is brought against an agency or instrumentality of a foreign state as defined in section 1603(b) of this title; or 4) in the United States District Court for the District of Columbia if the action is brought against a foreign state or political subdivision thereof g. Civil action where jurisdiction of the district court is based on §1369 may be brought in any district where a defendant resides or where a substantial part of the accident occurred.
28 USC § 1404 – Change of Venue a. For the 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. b. Upon motion, consent or stipulation of all parties, any action, suit or proceeding of a civil nature may be transferred, in the discretion of the court, from the division in which pending to any other division in the same district. Transfer of proceedings in rem brought by the US may be transferred under this section without the consent of the United States where all other parties request transfer. c. District ct may order a civil action be tried at any place w/in the division where it is pending. d. As used in this section, the term ''district court'' includes the District Court of Guam, the District Court for the Northern Mariana Islands, and the District Court of the Virgin Islands, and the term ''district'' includes the territorial jurisdiction of each such court A. Venue: 1. has to be in a court with personal jurisdiction 2. has to be in a court with subject matter jurisdiction 3. must decide venue (statutory only) B. §1391: venue rules -if there are multiple places where there is jurisdiction; there will be one that is proper venue -just run through the rules; fairly easy to follow -if all live in the state, you choose a district where either is a resident/citizen -you can also choose where a substantial part of the injury took place -catchall: there is always a place to sue C. Misc. Venue Issues 1. Objecting to venue must be done at very first time (pre answer motion or answer) 2. Remove it to the district court where the state court was located 3. Moving to transfer venue (1404) -if it would be more convenient elsewhere (for parties or witnesses) -either party may move to transfer -standard: does it make sense to move it? D. Venue rules for federal court -where any defendant resides or where parts of the claim took place -if you don‟t have the first two, you can go where the defendant has personal jurisdiction -venue rules are designed to make it fair, efficient -right to challenge venue is waived if not objected to right away E. Moving cases between courts -Removal (state to federal) -Transfer of venue (fed to fed; has to be in another federal court where it could have been brought) – §1404; what serves interest of justice; discretion of judge; reviewed under abuse of discretion -Forum Non convenience (State to State; fed to international) –goofy to try it in one place because all the evidence, witnesses, etc are in another place; the other place‟s rules govern; the case is dismissed so that it can be filed elsewhere -what happens if the statute has run in the other place? Often the US court will say, that the defendant can have it moved, but it must waive the statute of limitation defense -what happens if the other rules aren‟t up to standards of US system? The US court will allow it to be moved, as long as the defendant agrees to certain things -what if the foreign country doesn‟t have basic rights and privileges of due process? The US court won‟t allow it to be moved
X. The Erie Problem 28 USC § 1652 – the laws of the several states, except where the Constitution or treaties of the US or Acts of Congress otherwise require, shall be regarded as rules of decision in civil actions. 28 USC § 2072 – (a) the Supreme Court shall have the power to prescribe general rules of practice and procedure and rules of evidence for cases in the US district courts and courts of appeals. (b) Such rules shall not abridge, enlarge, modify any substantive right. All laws in conflict with such rules shall be of no further force after such rules have taken effect. (c) such rules may define when a ruling of a district court is final for the purposes of appeal under §1291. A. Swift v. Tyson -opinion written by Story -in federal court on diversity -what is consideration in a contract -is the release of a preexisting debt consideration? yes -NY law said that it isn‟t -Story said that they were going to construct a federal common law and ignore NY B. Sect 1652 (Rules Decision Act) -the laws of the several states shall be regarded as the rules of decision -Story took this to mean statutes (interpretation of statutes, long established local customs), not common law…the NY law was based on common law, not in a statute Federal courts are establishing common law for 100 years after that, until Erie…. C. Two limitations for choice of law issues 1. Horizontal – have a case in some court, need to decide what laws to apply -parts manufactured in one state, assembled in another, sold in another -which state law determines the rights and responsibilities of the parties -erie has this: NY or Penn; Penn won out 2. Vertical -could be brought in state court; but it is brought in fed (diversity or supplemental) -state law claim brought in federal court -does federal or state law rule D. Erie Railroad v. Tompkins 1. Tompkins was injured while on an Erie train. He brought suit in federal court on diversity. Erie claimed that the case should be ruled by PA law, which provided duty of care for a railroad is no greater than a trespasser. Federal common law allows for recovery on normal negligence stance. State law is better for commercial interest (atypical); suit is brought in federal court because there is a better chance of recovery. Rules of Decision Act said that state laws apply in federal cases unless otherwise provided by the constitution. The lower court didn‟t use state law, and instead, they used federal general common law. 2. The court held that substantive laws of the state must be applied (unless governed by Federal Constitution or Acts of Congress). Disproves Swift v. Tyson (not required to apply unwritten state law; exercise judgment as to the common law of the state). Application of Swift has revealed defects (no uniformity of common law or certainty regarding what is general law or local law). Diversity is meant to prevent bias for non-citizens; however, bias for citizens has resulted. 3. Brandeis decides to overrule Tyson. There is no federal general common law. Applying Swift is an unconstitutional assumption of powers by the courts (invaded the rights reserved by the constitution to the states. -thus, when they say “laws of the several states” it includes state statutes and common law -each states may have different interpretations of common laws
Why was it so hard to change? -there was some congressional acquiescence (silence in changing the language to include common law) -there was a 100 years of rulings following this and no changes Then, looked at Policy (and the consequences of the Swift ruling) -uniformity? Not really. There is a lot of forum shopping going on. -certainty? Not really. You don‟t know where it is going What about the policy of applying state laws instead of federal common law? -federal judges may not have expertise to the state common law -isn‟t the point of diversity jurisdiction, to have some difference? Why shou ld we be concerned with there being a different set of fed laws? -the actual reason for diversity is to avoid bias Expertise: federal judge may have trouble with this -federal court should look at what the supreme court for the state has said -often there is no opinion, or it is very old -federal court should try to rule based on how the state supreme court would rule today -look at appellate decisions to get guidance; look at other states -in some states, the state constitution allows a decision to be certified by supreme court -problems: not all allow it; it is an expensive process; SC may not take it Hypo: suppose you are in OK and there is 150 year old precedent -if you file in OK, you are subject to that -if you file in fed, you can argue that it is old and outdated; not bound in the same way as state courts; they have the ability to update, if they think that the SC would change it. -after federal court overrules, it might force the state court to look at the decision 4. Two reasons to overrule Swift: disagree with it and bad policy, but… There must be a constitutional hook as well -it might be unconstitutional because of 14 th amendment (equal protection clause) -each sovereign must treat people equally (ok in Swift because there were two separate courts each treating equally) -federal courts in Swift were making federal policy for state law; maybe this should have been a job for congress -another issue: if there is a state court and it gets into federal court on diversity; the federal law shouldn‟t be imposed (FEDERALISM – garrett down plays this) E. Courts v. Congress (ask Marie on this) -courts should only act within their powers -can fed gov‟t set down rules governing the RR? They can: if they are trying to regulate interstate commerce -not a federalism issue; the problem is ????????????? Separation of powers issue -they can make these interstate rules, but it is for congress to do so -the courts should only do this when they are expressly given the power to do so, through common law (congress delegates the power to make these rules) Why isn‟t diversity allowed to be a granting of power to the federal courts? Because diversity is like a pseudo granting of power…they don‟t really have the power, it is more about finding a fair place to try the case
Diversity grant is a grant to determine and establish the procedures and rules for hearing the cases; it is stretching to allow them to also establish the substantive laws for the case Congress can delegate to the courts to establish laws They also have the power to establish procedural rules Hard to draw the line between the two =not a federalism issue; it is an issue of the congressional grant of power and what the federal courts can do on their own (as opposed to having to follow state law) Other reasons for overturning (delegating the power to court) -there is a law (RDA) that says that you should apply state substantive law (pretty good signal from congress that they would rather apply the state laws) If you are trying to come up with a rule for decision, that should be a state law If you are trying to come up with procedure, that is for federal court Sect 2072 – rule enabling act – where do we draw the line between substantive (rule of decision) and procedure (rules enabling act) Example: State courts limit all briefs to 50 pages; Fed limit it to 30 pages …procedural issue, therefore it would be limited to 30 …not in the actual rules, but once it is granted to fed court they can make their own rules as to procedure In the Erie case (Brandeis) 1. Story misinterpreted RCA because he misinterpreted the statute (the legislative history) -that is probably not enough to overturn 2. Policy implications: a lot of forum shopping because of the Swift decision -unequal treatment of litigants; uncertainty; etc If writing on a clean slate, this might be enough; but there was 100 years of rulings 3. unconstitutional -structure: congress can make a rule to govern erie; regardless of the statutory ruling -congress had been silence; states regulated unless congress delegated power to say how to govern -this isn‟t a federalism issue??? Erie does have some federalism concerns -even when congress and fed gov‟t don‟t have power to make substantive rules, they can make procedural rules -diversity; other rules to make it so fed courts can hear the case -some uniformity to make it more efficient Will have the question of what is substance and what is procedure (so that fed court can rule). -if you are outside of a federal rule (enumerated power), then you can‟t touch the substantive rules -even if it is within the enumerated power of the fed gov‟t, you have to be careful if they have been silent Congressional decisions in the Rules and Decisions Act -use state laws as the rules of decision -constitution will have limits on what courts can do; -we must figure out what is a “Rule of Decision” -is it a synonym for “substantive”; or is it more -Erie is a substantive rule: purely tort question of trespass and liability Rules of decision includes some procedure (ones that have a different implication than just a simple procedural question – 30 or 50 page briefs)
2 different tests -constitutional test: what makes it procedural; what can the federal courts regulate on its own? That comes from the constitution‟s enumerated power, necessary and proper clause, diversity/supplemental jurisdiction -what is the statutory authorization? E. Guaranty Trust v. York 1. York sued Guaranty in federal diversity action for misrepresentation and breach of trust. Guaranty said that it was outside the NY SOL. Laches: in equitable cases it allows cases that are outside the SOL for the purpose of justice; more allowable in federal court (not clear in terms of NY law) 2. In determining whether to apply a statute, using “substance” or “procedural” is not enough (it is used a lot and is ambiguous). The Erie ruling (state laws apply in federal diversity cases) was to ensure that the outcome should be substantially the same in federal or state court. By using this outcome determinative rule, the court held that in this diversity case, the state SOL should apply. 3. this test seems kind of loose: any rule that is threatened with dismissal will eventually fall into this category -maybe the distinction is: whether it will get in court at all or whether you are following the formalistic rules -it might be determinative if the issue is one that had resulted in forum shopping -difference in outcome that leads to an inequitable treatment of parties =Twin aims of Erie (Hanna) To determine whether state law applies: outcome determinative + Twin aims of Erie F. Byrd v. Blue Ridge Rural Electric 1. Byrd was hired as an independent contractor. He was injured on the job and sued in federal court under diversity. Blue Ridge said that Byrd was a “statutory” employee whose only remedy was under the state‟s workman‟s compensation act (if true, tort action would be barred). They also argue that a judge should decide (precedent in state court for workman‟s) 2. The court said that the precedent wouldn‟t rule. Using outcome-determinative rule, the court found that allowing the judge to decide is about form and mode, and it is not a rule bound up with the definition of the rights and obligations of the parties. However, the outcome may be determinative of this decision. They said that other factors should be balanced. In state court, the judge makes the ruling (expedience; maybe there will always be a jury bias for the plaintiff). They said that the federal right to a jury trial kind of trumps the other issues. Balancing the state and federal issues; if there is an important federal issue relative to the state interest, then the federal rules will apply (7th amendment right v. expediency; bias) G. Hanna v. Plumer 1. Hanna filed suit for personal injuries against Plumer (executor of estate of negligent car driver). Service of notice and summons followed federal rules. Plumer contends that the service was not in line with statutory state law (in-hand service). The case was thrown out. 2. The Rules Enabling Act provides that the SC shall have the power to prescribe by general rules, the forms of process and the practice and procedure of the federal courts in civil actions. Such rules shall not abridge, enlarge, or modify any substantive right and shall preserve the right to jury trial. There needs to be a conflicting state law, or federal rules could apply 3. Plumer asserts that the state rule to service should apply (and the case would be dismissed). The court ruled that they must apply the outcome determinative test, along with the twin aims of Erie (discouragement from forum shopping and avoidance of inequitable administration of
the laws). Although it is outcome determinative, the difference between the two rules had little to do with choice of forum. It can be said that serving a spouse at home won‟t materially affect the mode of enforcement of state rights. Erie is not the proper test. It must look at the scope of the Rules Enabling Act and the constitutionality of certain federal rules. H. The rule tree for determining the court See handout Byrd, Hanna, York gives you a good foundation for determining Erie issues -determine if the state rule is bound up with state created rights and obligations -if it is, then the state rules must apply in federal court -if it is a purely substantive rule; might go further: say that you must do it constitutionally -they haven‟t said anything (silence) to change it -not within the enumerated power of the federal gov‟t -is the rule a form and mode of enforcing the right (procedure)? -is it the kind of form/mode that is outcome determinative in the York/Hanna way -no: then use federal -yes: use outcome determinant + twin aims of Erie (almost to applying state) -Byrd: you have to balance the state and federal interest; if federal is more important then use federal rules. The question is if you use the balancing in every cases, or only some set. G. Burlington Northern v. Woods 1. A state statute said that the successful party must be awarded 10% damages on the amount of the judgment affirmed plus costs (penalized for frivolous and non-frivolous suits). The federal rules only allow for penalties for frivolous suits. Burlington lost on appeal in federal diversity, and Woods sought the 10%. 2. the court held that the federal rule and state statute were in conflict. They used Hanna (Rules Enabling Act and constitutionality of the specific federal rule). This is about the rule; you are in track 2 under FRCP/FRAP part; Federal rule usually wins -but is there a conflict? Any time there is an appeal that fails on a stayed judgment, there is a mandatory fee. If there is a frivolous appeal, there is a discretionary penalty -the conflict? In fed rule, the judge does not have to impose penalty if he thinks that it was frivolous…the state rule makes it mandatory -there is a conflict…because we are on track 2c, when there is a conflict, fed wins. -if the conflict is decisional (track 1), then state sometimes win H. Stewart Organization v. Ricoh 1. Stewart entered into a dealership agreement to market Ricoh products. The agreement had a forum selection clause (Manhattan). Stewart sued in Alabama district court; Ricoh moved to transfer venue. The district court denied the motion to transfer (they looked unfavorably on forum selection clauses). The 11 th circuit reversed, concluding that federal law governed. 2. There is a two part analysis when a federal statute conflicts with a state law. First, is the statute broad enough to cover the issue at hand (in this case, the statute allows a district court, in its discretion, to weigh a number of factors in determining a transfer); second, it must represent a valid exercise of congressional power under the constitution (the statute was a valid exercise of power under the Necessary and Proper Clause). I. Gasperini v. Center for Humanities 1. Gasperini was a photographer in Central America. He supplied 300 slides to The Center. The Center lost the slides and couldn‟t return them. Gasperini sued in federal court under diversity. An expert testified that each slide was worth $1.5k and $450k was awarded. Center moved for new trial and was denied. The 2 nd circuit court vacated the decision and
applied NY law (required that they determine whether the award deviates materially from what is reasonable). They said it was excessive and order a new trial unless Gasperini agreed to $100k. Gasperini says that the 7 th amendment controls and nothing determined by the jury should be reexamined in federal court except under federal common law (the standard of review is “shocks the conscience”). 2. The SC ruled that a state statute can govern reexamination without violating the 7 th amendment. The NY standard of review (deviates materially from reasonable) is both procedural (assigns decision making to the NY appellate courts) and substantive (controls how much can be awarded). The standard of review is outcome determinative. It is not clear that the court used the federal (abuse of discretion) or the NY law. It was remanded so that the court could apply the NY standard of material deviation. 3. Applying the tree for standard of review -most likely on track 1. How do you determine which rules will apply? The tree. -is it procedural or substantive? Seems like it is bound up with the state rights and obligations (substantive); what the state is willing to give you in terms of awards (like award caps, etc). -BUT, even if it is a form and mode (procedural), then it is outcome determinative (which rules apply will affect the amount of damages that apply) and should still be state rules. It is OD in a twin aims way, because it is about forum shopping and getting to the right place for the right outcome -Byrd balancing of federal and state interest – court didn‟t do this Fed: uniformity across (that has been the historical standard); State: they thought that tort awards were way to excessive Seems like the state should win 4. Now…on to Intensity of review (abuse of discretion or de novo) - is the abuse of discretion a conflict in track 2? Doesn‟t seem like it -can you make an argument? It is generally a practice??; but there is 7 th amendment implicaiton; no one can reexamine the decision of the jury. Regardless of the standard, you may have undermined the 7 th amendment. Court doesn‟t go into this -track 1; applying the tree -is it procedural or substantive? Don‟t use that; use: is it bound up with state rights or is it forms and mode? Appealing is generally form and mode -is it OD in a twin aims way? Seems like it; same reason as standard of review; forum shopping (twin aims) -Byrd balancing? Yes, because it is a 7 th amendment issue -fed: 7th amendment rights -state: tort reform law; state wanted there to be lower awards Garrett: can‟t imagine how state laws will ever win if it is a 7th amendment issue Byrd balancing has been almost exclusively about the 7 th amendment; almost a constitutional issue (therefore just about always wins)
XI. Former Adjudication Claim Preclusion *28 USC § 1738 – look it up Rule 41b (Involuntary Dismissal: Effect thereof) – for failure of plaintiff to prosecute or to comply with these rules, a defendant may move for dismissal of an action against the defendant. Unless the court in its order for dismissal otherwise specifies, a dismissal (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 A. Introductory hypotheticals – 1. if you bring a suit for replevin and you lose. You know the judge is senile can you bring a second case for a second bite at the apple? Answer: No. What are the policy justifications. Finality Efficiency – we would rather use our resources for other people that have not yet Inconsistent judgments 2. Four of your cars get towed in the same transaction. You bring a suit for replevin for one of the cars. You don‟t get to come back and argue for replevin for another car. The policy concerns are the same for you having that second case. 3. Why is claim preclusion a defense that the defendant must raise or lose (Rule 8) the right to make the argument? It is the obligation of the defendant to plead it and prove it. The idea of claim preclusion as an affirmative defense may indicate that the rule is actually for the defendant, not for the judicial system. Why? o finality – allowing the claim to continue to be brought could constitute harassment against the defendant. B. Frier v. City of Vandalia 1. Frier had a “problem” with parking his car on a narrow street, and others had to drive on another citizen‟s lawn to get by. The police had four of his cars towed to various garages. Frier didn‟t pay the $10 garage fee and instead filed suit in Illinois for replevin. One of the suits was dismissed when the cars were returned, and the other two were consolidated. Replevin was denied. Then, Frier tried to go to federal court, arguing that he didn‟t get a hearing before his cars were seized (Due Process Clause and §1983). 2. A court ought not to resolve a constitutional dispute unless absolutely necessary. Frier had his day in court on the replevin action. The district court said that he didn‟t have his chance to make constitutional arguments. However, he could have joined the constitutional (punitive) claim. As long as the claims have the same common core of operative facts, claim preclusion would not allow the second action. 3. No problem kicking out this second claim claim preclusion prevents you from bringing claims you could have and should have brought originally. If Frier had won the first suit, would he have been precluded in the second? Answer: YES – claim preclusion is NOT biased What if the first case was in a court that only allowed $10,000 and this second case was for $200,000. Is he still precluded? Answer: Courts are going to differ. This is a question of him choosing courts. He choose a municipal court, when he could have chosen a different court that would have been able to hear both cases. some courts will say you live with the ramification of the court you choose. others will say you are not precluded b/c you were not able to bring this claim in the court you choose.
C. The effect of the judgment is determined by the law of the court that renders the judgment. An IL judgment has the strength of law that IL gives it (regardless of which court in which state or federal government you are in). You look at the law of the court that renders the judgment. 1. 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. 2. State to Federal - §1738 says federal courts have to do the same thing; give same affect to judgment that the state gives that judgment (§1738 = statutory equivalent to full faith and credit). 3. Federal to Federal – look at common law. 4. Federal to State – look at common law. D. Sarah – federal anti-trust (exclusive Federal question jurisdiction) AND state anti-trust claim. if the first case is just the federal claim and in federal court, is she precluded from bringing the second claim in a separate case? o Answer: Yes she is precluded (no she cannot bring the case) – she cannot bring the second claim. What if she tried to bring both cases and under §1367(c) the court has discretion not to hear the case and used §1367(b) and did not hear the state claim. Precluded from bringing the case? o Answer: NO, not precluded (yes she can bring the case). What if she brought the state claim first and then tried to bring the federal claim, precluded? o Answer: most jurisdictions would say yes, she chose and that‟s that. circuit split – 7th circuit agrees with this analysis. o some other circuits argue – no - She could not bring the federal claim in state court (the first case), so she should still be allowed to bring the suit. E. CANNOT BIND a party that was NOT part of the first trial. limited exception to this rule o husband and wife are NOT same party for claim preclusion o partners in business are the same party F. Hypos 1. What if the second case in Frier was Vandalia bringing claim for towing fees. Answer: That is NOT precluded. Why? Frier can effect his ability to bring claims, but NOT Vandalia. 2. HOWEVER, What if IL has a rule like 13(a)? Answer: When Frier sues Vandalia, Vandalia has to bring a counterclaim b/c it is compulsory counterclaims. it operates the same way as claim preclusion b/c it is based on “same transaction or occurrence.” What if there is something like rule 13(a), but Vandalia has an argument why it did not want that case to be in that court. Answer: Vandalia has to bring it in that court as a counterclaim – basically, tough luck. IMPORTANT NOTE – Removal only the Δ can remove on the basis of the π’s claim. The Δ CANNOT remove on the basis of his own counterclaim. Beth sues matt for assault in state court. Matt counterclaims with §1983. B/c of removal law, he cannot remove based on his counterclaim. B/c §1983 is a concurrent jurisdiction claim, he must raise that counterclaim or he loses it in compulsory counterclaim.
G. 3 rules for claim preclusion – we have already talked about the first two. 1. same parties 2. “same transaction or occurrence” 3. final judgment on the merits H. Final judgment on the merits: Different jurisdictions have different rules for final judgments. 1. In Frier, no question once the jury has decided, there is a final judgment. Would it be different if the judge decided on summary judgment rather than letting the case make it to the jury? Answer: no, summary judgment still decision on the merits. What if the judgment was a default judgment? Answer: still a final decision on the merits. What if it was a 12(b)(6)? Answer: motion to dismiss is a final judgment on the merits – if the Δ wins on a 12(b)(6) or a 12(c). If the judge fails to say with prejudice, the judge means with prejudice (the default rule). o some states do NOT consider motion to dismiss a final judgment on the merits. that may be changed if the judge says “with prejudice” but that depends on the jurisdiction. 2. Laura v. Sarah – OK federal court. Sarah wins 12(b)(2) – no personal jurisdiction. Is that a final decision on the merits? Answer: No – there is no preclusion. 3. Semtek – was a question of claim preclusion on diversity the state rule does not think that as many cases are final decisions than federal claims. if the state rule is one way and the federal rule is another way. if there is a conflict b/t the two laws, what do you do? o it is forum shopping vs. uniformity all over again Semtek says in diversity cases, federal courts should be „sensitive to state concerns‟ but the federal rules are 4. BOTTOM LINE - How do you find out if something is precluded for claim preclusion? Answer: look at the law of the FIRST forum. The federal law is generally in rule 41 – but it is just procedure not substance. I. Gargallo v. Merrill, Lynch, Pierce, Fenner & Smith 1. Gargallo opened an account with Merrill Lynch. His investments went bad, resulting in a $17k debt. Gargallo refused to pay and Merrill brought suit in Ohio state court. Gargallo counterclaimed (violation of federal securities laws). The state court dismissed the claim with prejudice when Gargallo failed to comply with discovery requests. Gargallo then filed suit in federal district court for the securities violations. 2. The securities violations claim was the same one as was brought in the counterclaim. Must look to the Ohio claim preclusion rules. The dismissal with prejudice was a final judgment on the merits. It is also about the same transaction and common core of operative facts. Ohio federal court would be barred from taking the case. This claim was brought in a federal district court. The federal court ruled that the state court must have subject matter jurisdiction over the claim to have a final judgment for claim preclusion. Thus, because it didn‟t have it in this case, the claim can be brought in federal court. Issue Preclusion A. General 1. claim preclusion shuts down the second claim; it was something that should have been litigated in case one)
2. issue is narrower (it will relate only to issues that were actually determined and litigated in the first action) and broader (raised in different claims; don‟t have to have identity of claim, just identity of issues) -not the same set of transactions; occurrences; facts -identical issues but different claims B. Rules of issue preclusion (834) 1. same issue (subtleties in difference based on kind of claim; crim v. civil) 2. litigated and determined 3. valid and final judgment on the merits 4. determination is essential to judgment -Reasons for claim preclusion (finality, efficiency, consistency, etc) -Issue isn‟t as much about finality (the claim may not be ended by issue preclusion) Efficiency (you have already litigated; but maybe you will be willing to use more resources because the issue is bigger) Consistency (embarrassing for the court to come to different conclusion on the same issue) C. Illinois Central v. Parks 1. Jesse and Bertha were injured when their car collided with an Illinois Central train. Both sued; Bertha got $30k for injuries and Jesse got nothing for loss of consortium. He then filed suit for his own injuries 2. must decide which issues are precluded -in the first case, Bertha won and Jesse lost -RR owed and breached a duty to Bertha = negligent -Jesse‟s claim is derivative (duty was also to him) -RR said that Jesse didn‟t get to recover because of contributory negligence (and there were no damages) 3. So, what issue is Jesse going to argue? -The issue of the RR negligence should not be re-litigated; the jury must find this in the second; it was a necessary determination for the judgment On either defense, the RR would say that there is no recovery -the general verdict didn‟t say which defense led the jury to decide (no issue preclusion) -if RR thinks that they might be sued later by Jesse, they may point to rule 49 (special verdicts/interrogatories); ask the judge to do this to determine how the jury decided Special verdict – not liked, because sometimes, the final verdict is not consistent with some of the answers; allows for jury verdicts to be attacked -seems like a good way to settle issue preclusion -seems like a good way to make sure the jury is understanding the rules 4. Because of the outcome of the first, we know that the RR was negligent (Bertha won) -assume there was a special verdict and Jessie was negligent and suffered no damages (both are sufficient; neither is necessary because the other would satisfy) -is there issue preclusion in the second suit? You would think so -first restatement said that you should allow claim preclusion on both -second restatement said that you get preclusion on neither (because neither was necessary) Reason for this: don‟t want to re-litigate; but it makes it bad to “win big” Reason for sufficient but not necessary not being allowed for issue preclusion: maybe the jury really focused on CN, and just threw in the second because it didn‟t really matter Preclusion in second lawsuit: one reason is that you already have a second chance through appeal
D. Mutuality -claim preclusion: important to have the same parties -in issue preclusion, this is not necessary E. Issue preclusion (3 requirements) 1. must be exactly the same issue (self defense against two different parties is probably different issues even if it is the same occurrence 2. must be determined and litigated; if there is a general verdict, you have to reason backwards (what was necessary to the judgment) -you can look at trial record, instructions, etc 3. requirement of final judgment -requirement that the issue be necessary -verdict on two possible issues, precluded for using for issue preclusion -won on verdict, but lost on the issue (not necessary for the decision) F. Hypos 1. Bertha v. RR: Bertha loses (CN) Bertha then files a suit that the City is negligent in the maintenance of the RR -city will claim issue preclusion on the ground that Bertha was CN -probably allowed because Bertha had her day in court (issue of CN was important, litigated) =Non-mutual defense issue preclusion (party not in the first law suit; defendant using issue) -can be used to eliminate one of the elements of the prima facie case, or it can be used to state an affirmative defense that has already been proven; some courts are more comfortable with defensive, non-mutual defense issue preclusion (can‟t prove prima facie; used like a shield) 2. Bertha v. RR – RR wins on special verdict (not negligent) -second suit: Jessie v. RR -RR wants issue preclusion that they weren‟t negligent; not allowed because Jessie didn‟t have day in court. -even if you think the first one is right; Jessie still gets to go to court (due process) *A different rule may require Jessie to join the first claim; problems: Bertha is controlling the party, Jessie‟s lawyer might make different approaches/decisions; joining might hurt you (even though it is more efficient and you are supposed to put everything that is related in the same claim) *Can‟t bind a person (through issue preclusion) that wasn‟t in the first lawsuit 3. Bertha v. RR – Bertha wins on special verdict (crossing not maintained–duty of city and RR) -second suit: Bertha v. City -Bertha wants to have the negligence in the first allowed =Offensive, non-mutual issue preclusion -no preclusion because City didn‟t have its day in court Non-mutuality: allowed when the person being precluded already had its day in court 4. Bertha v. RR: bertha wins, RR negligent -Jessie v. RR: issue preclusion for Jessie (offensive non-mutual); doesn‟t want to litigate whether the RR was negligent -it is possible that Jessie gets issue preclusion -no unconstitutionality because RR already had day in court (due process) -factors that go into allowing it (courts are less sympathetic to offensive claims) a. forum: maybe it was in small claim court; different procedures (no full and fair opportunity to litigate; need this to justify not allowing to relitigate)
b. maybe they didn‟t take the first case as serious: importance; maybe it was so small, that they didn‟t really care if they lost (should consider future litigation; by shareholders) c. could the party have affected joinder (efficiency) in the first lawsuit; if they could, then they had the opportunity to have their claim heard -this gives an incentive not to join: if Bertha is successful, then he will try to get issue preclusion; if Bertha loses, he is not bound because he wasn‟t a party and he gets to use what was learned at trial -good reason why offensive issue preclusion is not favored (BUT, he can only wait as long as the SOL) *Could court force joinder? It could; it would be in line with efficiency…but Bertha may not want Jessie joined if he is going to be a hindrance in the case…which factor should be more important? There is a strong feeling that plaintiffs should be able to control their own fate and not be joined. G. Parklane Hosiery v. Shore 1. Shore (stockholder) brought suit against Parklane, alleging that they had issued a materially false and misleading proxy statement in connection with a merger. Before reaching trial, SEC filed suit based on the same allegations. The District Court ruled for the SEC; the court of appeals affirmed. Shore moved for summary judgment, asserting that Parklane was collaterally estopped from litigating the same issue resolved in the other suit. 2. A party can be estopped from re-litigating an issue that was resolved adversely in a prior proceeding (if it had fair and full opportunity to litigate). This is a case of offensive issue preclusion. Plaintiff has incentive to wait for the first suit (only thing is SOL). It may also be unfair to the defendant because they might not have defended as vigorously (not important to them. In this case, they litigated vigorously against SEC and they knew of the Shore suit. 3. Offensive issue preclusion would not violate the 7 th amendment. They already had their day in court and the facts have already been established. H. Curry Hypo: -passenger 1 v. RR: finds that RR is negligent -there is issue preclusion for the rest of the cases -passenger 1 v. RR: finds that RR is not negligent -there is no issue preclusion for the next case (no day in court) -RR wins on the next 25 cases -passenger 26 wins…is there issue preclusion for the rest? No…it is an anomaly -problem: what if the 1st one is the anomaly and you find the RR negligent? -the whole reason for preclusion is that there are very few anomalies -if you accept curry, then you have to have a lot of questions about our system I. State Farm Fire v. Century Home: before the case, it was a civ pro hypothetical 1. State fame stored some property in a Century shed. A fire started; and it was potentially a result of the actions of a Century janitor. Over 50 lawsuits were filed. In the first three, two resulted in judgment for the plaintiff and one resulted in judgment for Century. State Farm amended the suit to match the winning ones and said that the case should be subject to issue preclusion (negligence); Century relied on the one suit that it won. 2. When there is inconsistency in verdicts, a court may refuse to apply issue preclusion. There is something offensive about precluding an issue when the defendant has shown beyond a reasonable doubt he could prevail on another day. 1. NW Bell v. CHC CHC wins; appealed 2. Sylwester v CHC
CHC wins; no appeal 3. Hesse v. CHC Hesse wins; affirmed on appeal 4. NW Bell v. CHC (retrial of 1) NW Bell wins 5. State Farm v. CHC CHC has no issue preclusion claim (State farm had no day in court State farm is trying to get issue preclusion on negligence (2 of 3 have found negligent; in the 3rd , there was no appeal…was it bad lawyering?) If Hesse had gone first, everybody could have used issue preclusion The court said that issue preclusion was not allowed If there are any circumstances of abnormalities, then it shouldn‟t be allowed It seems that there is a certain point, after many cases, that it will become clear that the first case was an anomaly; and issue preclusion will apply In reality: if CHC keeps losing, they will start settling Bottom line on issue -claim requires same parties; issue does not -claim can only be used defensively; issue can be used either way (just determining an issue, not the case??) -claim is made by defendant; issue can be made by either -if defendant is claiming issue he must plead the affirmative defense at pleading -whoever claims issue, it is moving it to summary judgment
XII. Multiparty Litigation Joinder of Claims Rule 18a (Joinder of Claims) – a party asserting a claim as an original claim may join, either as independent or alternate claims, as many claims as the party has against opposing party Rule 18b (Joinder of Remedies; Fraudulent Conveyances) – Where a claim is only cognizable after another claim has been concluded, they may be joined in a single action. Rule 42b (Separate Trials) – the court, for convenience or to avoid prejudice, may order a separate trial on any claim or of any separate issue, always preserving inviolate the right of trial by jury Rule 18 (permissive joinder of claims) - permission to join every claim you have against a party, no matter if they arise out of the same occurrence. -if you are joining unrelated claims, you better find subject matter jurisdiction for all of them -make sure that they independently meet diversity requirements -make sure that they independently meet the amount in controversy -make sure that if you got it in based on specific jurisdiction, all claims meet requirements -just because the rule allows you to join, doesn‟t mean the court has to allow it. Under rule 42b, the judge has the right to sever trials. -if there is a claim (counterclaim, third party, cross); you can try to join all claims against that party Counterclaims Rule 13a (Compulsory Counterclaims) – Pleading will state as a counterclaim any claim which at the time of serving the pleading the pleader has, if it arises out of the same transaction or occurrence and does not require a third party of whom the court cannot acquire jurisdiction. Pleader does not need to state a claim if: 1) at the time the action was commenced, the claim was the subject of another pending action; 2) the 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 the claim, and the pleader is not stating any counterclaim under this rule 13. Rule 13b (Permissive Counterclaims) – Pleading may state as a counterclaim any claim against opposing party not arising from the transaction that is the subject of the opposing party‟s claim Rule 13c (Counterclaim Exceeding Opposing Claim) – 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. Rule 13d (Counterclaim Against the US) – There rules will not be construed to enlarge beyond the limits now fixed by law and the right to assert counterclaims or to claim credits against the US or an officer or agency. Rule 13e (Counterclaim Maturing or Acquired after Pleading) – Claim which either matured or was acquired by the pleader after serving may, with permission of the court, be presented as a counterclaim by supplemental pleading Rule 13f (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 the court set up a counterclaim by amendment Rule 13g (Cross-Claim Against Co-party) – Pleading may state as a cross-claim any claim by one party against co-party arising out of the transaction that is the subject of the original action or counterclaim. Such cross-claim may include a claim that the party is liable to the crossclaimant for all or part of the claim asserted in the action against the cross-claimant. Rule 13h (Joinder of Additional Parties) – Persons other than those made parties to the original action may be made parties to a counterclaim under the provisions of Rules 19 and 20.
Rule 13i (Separate Trials; Separate Judgments) – If the court orders separate trials under 42b, judgment on a counterclaim may be rendered under 54b when the court has jurisdiction, even if the claims of the opposing party have been dismissed. A. Plant v. Blazer Financial Services 1. Plant executed a note in favor of Blazer to be paid back in monthly installments. No payments were made. Eight months later, Plant commenced a suit under the Truth and Lending Act for failure to make required disclosures. Blazer counterclaimed for the balance. 2. if Blazer wins on the disclosure issue (didn‟t violate); nothing happens; everyone bears their fees. If Blazer wins on the counterclaim (never paid any money on the loan); they may get some money from Plant. This means that she is less likely to bring the suit, if there is going to be a countersuit (if the amount was small, Blazer might not have had the incentive to take her to court for it) Analysis under 1367 (didn‟t apply yet in this case) -in federal court under subject matter; the counterclaim is a state claim (they must get it in on supplemental jurisdiction – same set of common occurrence) -seems ok; only exception for supplemental is when the original claim is in on diversity -is there any way for judge to not allow it in? 1367c4 says that it can disallow it if there are compelling reasons; policy reasons This was before 1367 -if the court labeled it permissive, it could be disallowed -if the court labeled it compulsory, it would be heard Test for compulsory counter claim -pragmatic…what makes sense; related -compulsory counterclaim…have to assert, or you lose it -FRCP has a compulsory counter claim rule -you look at the rules of the first case (laws of the state); just like claim preclusion Cross-claim – any claim by one party against a co-party that arises out of the same transaction or occurrence -If there is two defendants and there is a cross claim…there can be a counter claim between them also…sometimes he must assert the counterclaim -If there is a completely different issue…the party can bring it on a cross claim…there must be independent subject matter jurisdiction…can be thrown out by court -Can you add a party through counterclaim? Yes rule 13h…but you have to have personal jurisdiction over that person in that court Permissive Joinder of Parties Rule 20a (Permissive Joinder) – All persons may join in one action as plaintiffs if they assert to relief jointly, severally, or if it is arising out of the same transaction or occurrence and if any question of law or fact common to all these persons will arise in the action. All persons may be joined as defendants if it is asserted against them jointly, severally, or if it is arising out of the same transaction and if any question of law or fact to all defendants will arise in the action. Judgment may be given for one or more of the plaintiffs according to their respective rights to relief and against one or more defendants based on respective liability. A. Mosley v. General Motors Corp 1. 10 employees joined in bringing individual suits against GM and union on charges of discrimination. Permissive joinder (rule 20) allows joining of Co and union. The issue is: can the 10 plaintiffs all join their independent claims in the same case?
2. Why would they want to be joined (sometimes it is better to be in charge of your own case; see how previous ones come out)? -efficiency? Maybe…save some costs in terms of the common issues. But, you also get efficiency through issue preclusion. The common issue in this case is the pattern of discrimination…everyone will have to prove this pattern -in this case, joining them is about trial strategy. Having these 10 victims in the courtroom will play to the sympathies of the jury. It is hard to say that all of them were bad employees (and just a coincident that they are all blacks and women) 3. interlocutory appeal brought under 1292b; can they join under rule 20? Usually we wait until final judgment; but everyone knows that the case turns on this decision. If it is allowed, the case will settle. If not, they will go to court and say that each individually was a bad employee. They must look at rule 20 (permissive joinder). The court rules they can join because it is out of the same transaction and there is a common question of law or fact. They have independent claims…each will be decided separately and distinctly. The court has the ability to sever the parties and claims and have separate trials (abuse of discretion standard) Impleader Rule 14a (When Defendant may bring in a Third Party) – after commencement of action defendant, 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 plaintiff. The third-party plaintiff need not obtain leave to make the service if the third-party plaintiff files the third-party complaint not later than 10 days after serving the original answer. Otherwise the third-party plaintiff must obtain leave on motion upon notice to all parties to the action. The person served with the summons and third-party complaint, hereinafter called the third-party defendant, shall make any defenses to the third-party plaintiff's claim as provided in Rule 12 and any counterclaims against the third-party plaintiff and cross-claims against other third-party defendants as provided in Rule 13. Third-party defendant may assert any defenses which it has to the plaintiff's claim. The third-party defendant may also assert any claim against the plaintiff arising out of the transaction or occurrence that is the subject matter of the plaintiff's claim against the third-party plaintiff. The plaintiff may assert any claim against the third-party defendant arising out of the transaction or occurrence that is the subject matter of the plaintiff's claim against the third-party plaintiff, and the third-party defendant shall assert any defenses as provided in Rule 12 and any counterclaims and cross-claims as provided in Rule 13. Any party may move to strike the third-party claim, or for its severance or separate trial. 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 14b (When Plaintiff may bring in a 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 A. Watergate Landmark Condominium v. Wiss, Janey, Elstner Associates 1. Watergate hired a Legum and Norman, a management firm. The balconies were falling apart. Legum hired Wiss to draw specifications. Then, Watergate hired Brisk to do the repairs based on the specifications. They were unsatisfied with the repairs and they sued only Wiss and Legum in federal court on diversity jurisdiction (didn‟t include Brisk). Legum then filed a crossclaim against Wiss; they filed a third party claim against Brisk (negligently performed the repairs and they are solely liable). Brisk moved for 12b6.
2. The original claim was that it was solely about the specifications…if it was about negligence, it would be allowed…Brisk only did the construction following the specifications and can‟t be impleaded in. It must be derivative liability (indemnification agreement; agentprinciple relationship; joint tortfeasors in a state with a right of contribution) to be allowed. B. Response by the third party -the third party would try to sever the claim between the 3P plaintiff and them -the third party defendant can also argue (in the alternative) that they shouldn‟t be in there because there was no claim in the first place (13a sentence 4-5) C. For impleading, as long as the first claim is in the appropriate court, it will be easy to get subject matter jurisdiction on the second… the same standard is used for supplemental jurisdiction and derivative liability (common nucleus of operative facts). The problem may be about personal jurisdiction -you would have to make a minimum contacts argument -purposeful availment -Mcgee factors: was it fair; what makes sense for the plaintiff; etc D. We have impleader for fairness and sometimes efficiency 1. the impleading will sometimes have to do with interpreting an indemnification clause…no real overlap with the first claim…not really efficiency 2. fairness: if they are found liable, they shouldn‟t have to run the risk of not getting the 3P defendant. What about just having a second case? -issue of preclusion: the 3P defendant can‟t be bound by the finding that the first claim came out as negligent…scared of inconsistent verdicts. It is possible that the first insurance company will lose on both cases (differing opinion of negligence) Rule 14 – impleader rule -liability must be derivative (joint tortfeasors where the law in that jurisdiction allows) Cross-Claims Rule 13g (Cross-Claim Against Co-party) – Pleading may state as a cross-claim any claim by one party against co-party arising out of the transaction that is the subject of the original action or counterclaim. Such cross-claim may include a claim that the party is liable to the crossclaimant for all or part of the claim asserted in the action against the cross-claimant. Cross Claim (13g) – permissive; claims between defendants; once cross claim gets in court, then it is just like a normal claim and all other rules apply (all compulsory claims must be brought between the defendants, etc). -see glannon for graphs…garrett likes Cumpulsory Joinder Rule 19a (Person to be joined if feasible) – A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in the person's absence complete relief cannot be accorded among those already parties, or (2) 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 (i) as a practical matter impair or impede the person's ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest. If the person has not been so joined, the court shall order that the person 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 from the action. Rule 19b (Determination by court whenever joinder is not feasible) – If a person as described in subdivision (a)(1)-(2) hereof 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, the absent person being thus regarded as indispensable. The factors to be considered by the court include: first, to what extent a judgment rendered in the person's absence might be prejudicial to the person or those already parties; second, 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; third, whether a judgment rendered in the person's absence will be adequate; fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder. Rule 19c (Pleading Reasons for Nonjoinder) – a pleading asserting a claim for relief will state the names, if known to the pleader, of any persons (under a1 and a2) who are not joined and reasons why there are not joined. Rule 19d (Exception of Class Actions) – This is subject to rule 23 (class actions) A. Necessary Parties (19a) – tells who is a necessary party (just a label after going through the analysis). They ought to be joined if possible because of prejudice to the parties in the claim or prejudices to outside parties. Some party (typically defendant) moves to dismiss for failure to join another party (12b7). If the court decides that they are necessary, it will try to join them if possible, and if they can‟t, they might dismiss. The court can raise this on their own. -You never lose 12b7 (can bring it at any time). The judge may not look kindly at you delaying (he is supposed to take the delay into account when deciding). The court will look at whose interest is going to be harmed by not joining. If it is the 3 rd party, he will probably allow it. B. Indispensable Party (19b) – someone who you ought to join, and if you can‟t then you must dismiss the case. This means that the plaintiff must find a place to sue that would allow all parties to be in the claim. [possibly transfer venue if you are worried about SOL]. -the court shall determine (court‟s discretion) in equity and good conscience if you can proceed. Factors include: see bold above C. Helzberg’s Diamond Shops v. Valley West Des Moines Shopping Center 1. Helzberg got into a least in a shopping center to be a full line jewelry store. In the lease, the mall said that they would allow no more than 2 other full line jewelry stores. Two more stores entered the mall. Then Valley West gave a lease to Lord‟s to be a retail specialty store (not full line). However, Lords intended to open as a full line. Helzberg filed suit seeking preliminary and permanent injunction on the breach of contract. It was filed in MO federal court on diversity and AIC ($10k). There was also personal jurisdiction based on “long arm.” Valley West moved to dismiss for failure to join Lord‟s; denied and injunctive relief granted. 2. If injunction is allowed then the 2 nd contract is not good; VW might be subject to another verdict (in a suit with Lord‟s) that says lease is valid 3. It is in MO court on diversity; there is no personal jurisdiction over Lord‟s. It would have been great to join, but maybe there is justification in that VW got itself into the mess and maybe they should have to adhere to the first and pay for making the second. -what if there was only one mall and there was no other adequate remedy for Lords. -if you were Lords, you want to try to do this…their goal was to dismiss the suit anyways -this is a good reason why they should be joined in the suit…settle all of this at once
4. Maybe the court should have transferred venue to Iowa…all parties have personal jurisdiction. In this case, the subject matter is based on diversity. H (MO) suing in Mo federal court. VW and Lords are Iowa…no problems ****see how 1367 b relates to rule 19 and 24**** Intervention Rule 24a (Intervention of Right) – Upon timely application anyone shall be permitted to intervene in an action: (1) when a statute of the United States confers an unconditional right to intervene; or (2) when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant 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. Rule 24b (Permissive Intervention) – 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 the 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 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. Rule 24c (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 therefor 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. When the constitutionality of an act of Congress affecting the public interest is drawn in question in any action in which the United States or an officer, agency, or employee thereof is not a party, the court shall notify the Attorney General of the United States as provided in Title 28, U.S.C. § 2403. When the constitutionality of any statute of a State affecting the public interest is drawn in question in any action in which that State or any agency, officer, or employee thereof is not a party, the court shall notify the attorney general of the State as provided in Title 28, U.S.C. § 2403. A party challenging the constitutionality of legislation should call the attention of the court to its consequential duty, but failure to do so is not a waiver of any constitutional right otherwise timely asserted. A. Intervention – flip side; 3rd party wanting to come in; consenting to personal jurisdiction -someone outside, seeking on their own motion, to come in B. Natural Resources Defense Council v. US Nuclear Regulatory Commission 1. Original suit is about whether environmental impact statements have to be prepared before they get permission for mining uranium (administration law case). The federal law requires these statements before licensing. There is a statute that allowed the fed to delegate their licensing to the states; states then are arguing that they don‟t have to require the statements because they are not federal (seems like the fed might be circumventing the rule). The statements are costly and time consuming and will lead to less licenses 2. United Nuclear is allowed in; they have a special interest not shared by the other members of the mining industry. They said that they already had a license and it was very important that they are in and no one opposed. If the statements are required, and United wasn‟t allowed in, then they could turn around and sue NRDC for granting the license
3. other parties are trying to get in also including AMC (trade organization; representative agency). Kerr-McGee is trying to get in (they were at tension with United and AMC). 4. Rule 24b analysis a. Interest; that impairs their rights (precedence); the applicants interest is adequately represented in the party (clearly not in this case)…slam dunk for united to get in b. The other parties are trying to get in. They have an interest, but it isn‟t quite as vested. United had a pending license. The others will apply, but haven‟t yet. The court said that they shouldn‟t be let in because their rights will be adequately represented by United. 5. The other parties interest might be different. United may be willing to accept a judgment where the statement requirements will be prospective. They might only need the one license and it will hurt all of its future competitors. Also, United might have a small interest relative to the other parties. ***Intervening as a right is almost the same as being a necessary party*** Interpleader Rule 22 (Interpleader) - (1) 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 depend 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 counterclaim. The provisions of this rule supplement and do not in any way limit the joinder of parties permitted in Rule 20. (2) The remedy herein provided is in addition to and in no way supersedes or limits the remedy provided by Title 28, U.S.C. §§ 1335, 1397, and 2361. Actions under those provisions shall be conducted in accordance with these rules. 28 USC § 1335 – (a) The district courts 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 providing 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 (1) Two or more adverse claimants, of diverse citizenship as defined in § 1332 of this title, 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 (2) the plaintiff has deposited such money or property or has paid the amount of or the loan or 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. (b) 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 and independent of one another
Class Actions Rule 23a (Prerequisite to Class Action) – One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class. Rule 23b (Class Actions Maintainable) – An action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and in addition: (1) the prosecution of separate actions by or against individual members of the class would create a risk of (A) inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or (B) adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or (2) the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; or (3) the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to the findings include: (A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action. Rule 23c (Determination by order whether Class Action to be maintained; Notice; Judgment; Actions conducted partially as Class Actions) – (1) As soon as practicable after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained. An order under this subdivision may be conditional, and may be altered or amended before the decision on the merits. (2) In any class action maintained under subdivision (b)(3), the court shall direct to the members of the class the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. The notice shall advise each member that (A) the court will exclude the member from the class if the member so requests by a specified date; (B) the judgment, whether favorable or not, will include all members who do not request exclusion; and (C) any member who does not request exclusion may, if the member desires, enter an appearance through counsel. (3) The judgment in an action maintained as a class action under subdivision (b)(1) or (b)(2), whether or not favorable to the class, shall include and describe those whom the court finds to be members of the class. The judgment in an action maintained as a class action under subdivision (b)(3), whether or not favorable to the class, shall include and specify or
describe those to whom the notice provided in subdivision (c)(2) was directed, and who have not requested exclusion, and whom the court finds to be members of the class. (4) When appropriate (A) an action may be brought or maintained as a class action with respect to particular issues, or (B) a class may be divided into subclasses and each subclass treated as a class, and the provisions of this rule shall then be construed and applied accordingly. Hansbury v. Lee Class actions are constitutional You can collaterally attack it on due process grounds; you can say in a subsequent suit that you shouldn‟t have been a part of it You can enter default judgment, but in a subsequent action, you can attack it. Communities for Equity v. Michigan High School Athletic Association Heaven v. Trust Company Bank Phillips Petroleum v. Shutts
Class Action -the members of the class are not there; they are represented by the class leader; bound by the decision -Hansbury v. Lee says that you should be careful in constructing the class so as not to violate due process. Otherwise, you can collaterally attack the service of process and being bound. -the had to lay out a way to make sure that the representative really represents all the members; make sure that service is given to all Rule 23: constitutionality in terms of due process; but it goes further than it requires Must certify the class action (define the action) -spells out with specificity who the members of the class are for res judicata; sometimes, once it is certified, that is it….they will just settle Rule 23f: all people who had been injured by second hand smoke in airplanes; got certified; the defendant can‟t appeal because it isn‟t a final decision; most of the times people didn‟t want to go through the whole trial…they settled; so there were no appeals except for interlocutory appeals. Certification became huge…no appeal…would determine the case Rule 23f: allows defendant to appeal certification, but it is vested in the court of appeals -eliminate the fact that district court must grant it first -supposed to made early on Rule 23a conjunctive requirements for class action: 1. numerosity: too many people to join in another way 2. commonality: there have to be common issues of common law
3. typicality: is the representative typical of the members of the class; necessary to bind all the people; sometimes it is an organization; sometimes it excludes certain people -it is possible to have subclasses within the class action; you may have different hearing to be going at the same time, then come together later (for damages) -judges must manage the trial; when it makes sense to proceed as a large class and when to break it down 4. representation: representative will adequately serve all of the members of the class; is there a decent attorney here? Financial ability, quality, etc. Then, you have to certify it as one of the things under Rule 23b (if you are the representative, you want to be in 1 or 2; more flexibility; easier) 1. limited fund: super rule 19. are there fairness reasons to having this remain a class action; does it open up the defendant to the specter of inconsistent verdict? This part of B1 is not used too often (defendant would rarely want this). The interesting part of this is Limited Fund (there is a limited pot of money available to plaintiffs; not going to be sufficient for all of the claims; problem is that the first people to sue will get all the money; let‟s get everyone in here and set up an equitable system to allocate the money); no opt out – there is no reason to; if you let them opt out then they will try to race to the court before the class action -what about personal jurisdiction? All the plaintiffs don‟t have opt out (pseudo consent); there is jurisdiction by necessity (you gotta have jurisdiction otherwise it won‟t work out); you gotta imagine there will be collateral attacks if the judgment is not favorable 2. injunctive relief: if you have an injunction, they often set policies that affect the rights of lots of people. De facto class action because that is how they operate anyways. It is institutionalizing something that is a part of all class actions. It is really a way to protect the defendant from having to defend lots of suits.??? 3. these are disfavored; but there are special provisions that only apply to this (additional factors; only one that require notice for C2 (the court shall direct the best notice, including individual notice identifiable through reasonable measures paid by the plaintiff); requires the ability of opting out for the members – if you don‟t opt out, then the court can infer consent to jurisdiction) -empowerment: there is a substantial problem that needs to be addressed, but it would not be addressed without class action; cause defendant to internalize costs that wouldn‟t otherwise be done (there are a million plaintiffs that have a $20 claim) -is it goofy to opt out? Sometimes unsophisticated people opt out because they don‟t understand. -efficiency: so many efficiency gains from having it together; so many claims that it is more efficient that the “common issues predominate” -this is a super joinder rule; there are a lot of claims and a lot of people have these claims; too many people to join…let‟s have a class action Factors for allowing -interest of the members: class action is the only way it is going to happen (too small a payout for plaintiff to bring it; it is the only way to punish defendant) -extent and nature of any litigation already commenced: if there are a lot of suits, that suggests that you don‟t need a class action. The principle of civil action is that everybody controls their own suit…if it is already happening and enough money, there is no need to do class action -desirability and undesirability of concentrating litigation of the claims in the particular forum: one court is supposed to be litigating under the laws of many different states. Sometimes, each
individual member is going to be subject to contributory negligent; sometimes, there will be different causations issue…may be hard to litigate if it is a class action
The new rules are mostly about damages; the concern is that the attorney is settling things in a way that is too generous to the defendants so that they can get their attorney‟s fees; these are making sure that the defendant is adequately rewarded -hearings -notice with respect to proposed settlement -with respect to b3, there is a second opt out chance -getting at some of the abuses of class actions; the judge is looking out for the interest of the members; judge must be a more aggressive manager Notice in class action Eisen: US supreme court; class action (odd lot traders on NYSE); against two brokerage firms; each of the claims was for approx $70; there were 2 million possible members who could be identified (it would cost $225k to serve notice)…the court said that you didn‟t have to serve individuality because no one should opt out -the court says that you give notice to: -all NYSE member firms and banks with trust departments -2000 members who did the most trading -5000 random selection -notice in WSJ and large newspapers =total cost is $21k The supreme court said that you can‟t do this…you must, under rule 23c2, send notice to all identifiable plaintiffs. It seems like the solution was constitutional in terms of notice. It could be argued that it was jurisdiction by necessity (wouldn‟t be brought otherwise) The court looked at the merits; thought it was a good claim; required defendant to pay 90% of costs of notice (reimbursed if they win)…Supreme court said that you can‟t do this either. This is not fair, and you shouldn‟t be making judgments on the merits at this early of a stage =these two things make it harder to bring class actions Rule 23e1b requires reasonable notice to all class members who could be bound by a proposed settlement, voluntary dismissal, or compromise; possibly split the cost Rule 23h: deals with attorney‟s fees
Subject Matter Jurisdiction -if it is FQJ; there is no amount if controversy; this is easy to get in class actions -if it is diversity; there is AIC and citizenship problems; for diversity, the only thing that matters in class actions is the citizenship of the class representative. However, each person has to meet the AIC requirement (Zahn). -state class actions that were empowerment, could not get into federal court; it is pretty much limited to the empowerment ones and often they don‟t get certified
-1367b seems to have changed this rule: as long as you have one claim that meets the AIC then everyone else can aggregate…however, if one person has really big claim and the rest are small, then there is a problem with typicality -some courts will allow attorney‟s fees to be included in AIC…this is the only time it changes things in those cases Personal Jurisdiction -comfortable with inferring jurisdiction if they don‟t opt out; inferring a lot by silence (they might not know about it). This doesn‟t bother us when it wouldn‟t have been brought otherwise. It is different being a class member instead of a defendant (for notice)…one gets money, one has to pay. The only problem is if they would get more if they litigated on their own. -there are no requirements for class members; as long as the judge manages actively, then there shouldn‟t be a problem with representation -these issues should be taken into account when certifying the case. -a problem occurs in which law applies. It is possible that the class members are under different laws. It will have to either make subclasses, or decide which law to apply The Shutt case: they send it back down to decide if the common interest is more important than the problem with different laws -you have to look at different choice of law -individual defenses, causation, etc The Shutt case ends up saying that all of the state laws say basically the same thing…allows it to move forward