Civil Procedure Notes for Law School by JohnMValentine


									Civ Pro 08/23/04
This course is based on civil lawsuits, specifically w/the rules that govern lawsuits in our courts; federal fiscal year 2001, in the 94 federal district courts, there were 280,907 civil actions filed; federal courts are of limited jurisdiction; state courts hold great bulk of civil litigation; fewer than 10% to trial; we are dealing w/the phase of the process where the vast majority of all these lawsuits get resolved “Public law”—govern public agencies, particularly the courts; we are interested in the procedure and no the final result; rules are procedural as opposed to substantive “Private law”—contracts, torts, property; governing human beings and their relationships I.E.) S from PA vs. B from NJ (PA state court) In S Complaint, S alleges B entered into an oral contract w/S in which B agreed to buy land from S in NJ; S contends B breached contract; S is seeking judgment for the purchase price In B’s answer, he asserts 1. There was no contract, 2. Statute of Frauds—certain kinds of contracts are only enforceable if they are in writing, and 3. PA Court lacks jurisdiction over B from NJ If B is right about any of those 3 defenses, S cannot get what he asked for Defense #1—No K = pure question of fact; cannot answer w/law; have to have a trier of fact to decide which version is true; the trier has historically been the jury; the vast majority of lawsuits are about this Defense #2—Statue of Frauds = pure question of law; no factual issues; only relevant fact is that it was an oral contract; does Statute of Fraud bar this kind of contract if it’s not in writing; judge decides applicable law If court decides that this contract is w/in statute of frauds, the case will not go to trial Defense #3—Does the PA court have jurisdiction? This is a mixed factual/legal issue; this is the true procedural question; Defenses #1 and #2 are substantive; rules pertaining to personal jurisdiction don’t govern the primary activities of people, it governs what the court can and cannot do Our courts are our official dispute resolution mechanism; now there are also alternative dispute resolution mechanisms (arbitration, mediation, etc.); a court is backed up by state power; the state has a monopoly over using it’s sovereign force; when all else fails, there is always the option of trial We have 50 sovereign states and the federal government w/their own set of courts and their own set of rules (rules of court, statutes, judge made, etc.); if you understand how it works in the federal court, you can understand the PA courts; problems are always the same in every system, the difference is in how we attempt to solve those problems Civ pro is an area that is predominantly statutory, unlike our other courses like contracts, torts, or property; every jurisdiction has its statutes and rules of court; they are written rules and not judicial decisions; statutes are difficult at times b/c statutes are more so the law than judicial decisions; they are not secondary to judicial decisions; they must be read w/great care; the federal rules of civil procedure are mandatory and binding, not suggested help; judicial decisions are written to be persuasive, statutes are written to lead; written rules, if read carefully enough, you should be able to find a definite answer; 95% of all procedural questions could be answered by reading rules of civil procedure Sometimes you have a choice about what court in which to file; to determine which court or courts are available forums, there are rules having to do w/jurisdiction over the person of the Def.; jurisdiction of subject matter in controversy; which court is proper venue Some courts have heavier workloads than others; Plaintiffs have an inclination to take their case to trial faster and this can effect consideration of courts 1

First thing you do is select the court in which to pursuer your lawsuit Whatever court you have in mind, will it be able to obtain jurisdiction over the Defendant If it cannot, then you cannot get a valid enforceable judgment in that court

Pennoyer v. Neff Mitchell v. Neff First, Mitchell sues Neff to recover unpaid legal fees Neff did not live in OR, service was made by publication in an OR newspaper for a few weeks; Neff didn’t show up and a default judgment was obtained against him (p. 18); Mitchell then sought a writ of execution for a piece of land Neff owned in OR; writ was executed and sold at sheriff’s sale to Pennoyer Neff sues Pennoyer to recover his land, an action of ejectment; Neff brings his action of ejectment against Pennoyer in Circuit Ct. of the US for OR (US District Ct. for Dist. Of OR) Why was this brought to federal court? Neff was not a citizen of OR (p. 5) Neff was able to bring case against Pennoyer as diversity of citizenship b/c he could, not b/c he had to Article 3, Section 2 of US constitution says federal court is allowed to bring suits between citizens of different jurisdictions (like states, here) And at least $75,000 at stake All of this is subject matter jurisdiction Neff said judgment from Mitchell was void b/c he was never served w/process in that action and never voluntarily appeared; if that judgment was annulity, then sheriff’s sale was also void “Appearance”—means Neff did not defend the lawsuit, which is why Mitchell got his default judgment What body of law to look to? Justice Field says Neff’s position was correct on the basis of 2 well-established matters of public law regarding jurisdiction 1.) Every state possesses exclusive jurisdiction over people and property 2.) No state can exercise direct jurisdiction and authority over persons and property outside of its territory Where do we look to find state regulations? One of the authorities Justice Field cites principals of law for international law and applying them to one of the American states Neff did own property; OR didn’t have jurisdiction on him b/c he was OSS, but it did have jurisdiction over his property “In Personam” jurisdiction—jurisdiction over person “In Rem” jurisdiction—jurisdiction over property Seems OR courts could not follow In Personam over his person, but could In Rem over Neff’s property 2

What went wrong here? What did Mitchell do wrong that prevented him from getting a valid judgment? Mitchell didn’t attach the property in the initial lawsuit; should’ve done it at the commencement of the action “Attachment”—seizure (also “garnishment”) If at the beginning of the action Mitchell had attached the land, then substituted service by publication would’ve been acceptable and Pennoyer would’ve gotten good title Court says if this was permitted, that this would constantly be a source of fraud Justice Field says the law assumes the property is always in possession of the owner or they are at least keeping tabs, and that he will be informed of its seizure This is rationale why service by publication is good service for an In Rem action Mitchell’s mistake is that he proceeded In Personem What if Mitchell having filed his complaint, knew Neff was in San Francisco, so he sends an OR Deputy Sheriff and he goes w/him to serve papers? There is no question of notice Service is no good b/c tribunals of one State can’t run into another Why does OR’s writ not run in CA? Justice Field never really says why, but States are geographical territorial animals In an In Personem action a state can’t exercise jurisdiction over Neff unless he appears voluntarily or unless he is served w/process w/in the state of OR

Pennoyer v. Neff Mitchell should’ve attached Neff’s property at onset of lawsuit “Writ of attachment”—would give it to Sheriff and Sheriff would post it on the property and that would be the seizure How likely, if Neff lives in PA, is it that Neff would know that property had been posted In most jurisdictions, a copy of the writ of attachment would be filed in Recorder’s Office Court’s primary concern was notice and in personem actions Full Faith and Credit In general, a state must give full faith and credit to final judgments issued by courts in any other state Pennoyer bought property for $50,000.00 (cost $100,000.00); judgment brought to PA as a final judgment… Does PA have to give it full faith and credit? No, PA doesn’t to give full faith and credit to OR judgment b/c OR never had jurisdiction over Neff; An American state must give full faith and credit to final judgments provided that the original state had jurisdiction PA is allowed to ask if it is jurisdictionally valid; If it isn’t, then PA doesn’t have to give it full faith and credit 3

“Collateral attack”—not made in the original proceeding that rendered the judgment; Neff is allowed to collaterally attack What if it’s present day and Neff lives in PA; no property in OR, just relationship w/Mitchell; Mitchell beings his lawsuit in OR and realized his has a problem b/c there’s no way Neff will come to PA; but Neff is flying to HI and plane winds up over OR and is forced to make an emergency landing in OR and Mitchell rushes out there w/Sheriff and hands Neff Complaint and summons; default judgment entered against him; now Mitchell brings certified judgment to PA for $100,000 and PA would have to enforce OR judgment No matter how unintentional or unrelated Neff’s visit was, he still got served no matter how little time he spent there Grace v. McArthur (p. 26) “Transient jurisdiction”—if you catch the defendant in the state where he/she needed served, you got him/her What could OR do to show that they had jurisdiction over Neff while in OR? Send Sheriff out to use physical force against Neff If person or property is w/in state, state can use power and force b/c a state is a sovereign power (aside from constitutional restrictions) Why is Justice Field talking about full faith and credit in Pennoyer v. Neff? Then he starts talking about 14th Amendment If OR afforded Neff due process, then PA, or anyone else, would have to give full faith and credit Now that we have the 14th Amendment, the test for validity under 14th Amendment is the same requirement for judgments for full faith and credit clause Two ways to get Neff in OR: 1. personal service w/in state 2. voluntary appearance Full faith and credit test and 14th Amendment test requirements are exactly the same—court must have jurisdiction over person **14th Amendment didn’t exist when Neff happened; Justice Field’s elaborate dicta This case provided conceptual framework for in personem jurisdiction Application of pennoyer approach imposed substantial restraint on states; if person didn’t own property in state, only personal service or voluntary appearance was acceptablethis is very restrictive on states A corporation is abstract, it has no physical existence—hard to fit into scheme of jurisdiction; courts struggled w/between Pennoyer and International Shoe Court said in Pennoyer, Defendant can always consent to jurisdiction, that’s what he does if he appears, in advance and sometimes the State can require him to if he wants to do stuff in that state Corporation is not a person for the purposes of the privilege and immunity clause A state can, if it wants to, exclude foreign (from other states) corporation and corporations must register in states and appoint an agent for service w/in that statejurisdiction by consent Advent of cars PA resident might drive to MA and run over someone and return to PA, if he never went back to MA, he was never served 4

Response of the states to this was “long-arm statutes” Original long-arm statutes made drivers appoint an agent in the state in which they want to accept for service (Cane v. NJ) What if they didn’t and didn’t consent to jurisdiction? If you drive a car in MA, you have consented to appointing registrar of vehicles to be your agent to accept service (Hess v. Pawloski) Hess relied on Pennoyer to say he wasn’t a resident of MA and he didn’t consent to appointing agent Suppose that today you are going to vacation on Cape Cod, but you have read Hess case and send a letter to DMV (certified), which says that you don’t appoint them for your agent of service and go to MA and you run over Pawloski’s grandson… Does MA have jurisdiction over your person on the basis of consent?

Question from Friday: Consent is an act to the will—you either consent or you don’t MA can exercise jurisdiction over him, then consent is a fiction Foreign corporations gave particular problems b/c a corporation is an incorporal being; as corporation became dominant way of doing business, it became more and more of a problem; as law developed (pp. 29-30) principal came to be corporations could be subject to jurisdiction if it was doing business in the state or “present” in that state

International Shoe Company v. WA US Supreme Court decided to use this case to break new law for in personem jurisdiction, but what if they didn’t decide to do that? What if they decided to do it on the conservative path, would they have decided Int’l Shoe was present in WA? “Solicitation plus test” (p. 30)—it was followed in many jurisdictions; mere solicitation of orders for purchase of goods w/in a state plus some additional activities there was required to subject corporation to foreign court Int’l Shoe did solicit plenty of business, but what was the plus? WA Supreme Court decided they didn’t believe solicitation plus, there was no plus Salesmen were only given one shoe so that no one pair of shoes was sold and they couldn’t be liable under solicitation plus test Many courts accepted the test of presence and rejected solicitation plus; Supreme Court had never adopted solicitation plus Justice Stone says (p. 34) presence in the state has never been doubted when these two elements combined b/c of the activities of Int’l Shoe have been systematic and continuous International Shoe Systematic and continuous activity—arising out of/related to activity **Yes** 5

Court elected not to rely on old precedence and create new rule: The new test is “minimum contacts” Difficulty w/minimum contacts is that they are subjective and evasive concepts

p. 37/3 Does the court give us any idea as to how it would act, based on Int’l Shoe? If you were the DefendantIn this case, we have a single, isolated contact w/the foreign state rather then the systematic, continuous activity If you were the PlaintiffYou would argue similarity on the basis that the injury claim arises out of the shoe; the selling of the shoes to the OR shoe store Single or isolated—arising out of/related to activity **Maybe** Justice Stone gives us Kane v. NJ and Hess v. Pawloski (long-arm statue) examples as one time incidents where jurisdiction worked So why shouldn’t any one act give rise to action and jurisdiction?

McGee v. International Life Insurance Gives reference to International Shoe Defendant had a single contact w/state of CA Supreme Court said yes, the fact that the one contact w/state of CA was sufficient CA long-arm statute was a provision of CA Insurance Code that specifically applied to foreign insurance companies which insured Californians As long as it is a purposeful action, if it does produce consequences which give rise to lawsuit, then jurisdiction is likely to be upheld

p. 38/4 If you were for the PlaintiffInt’l Shoe has systematic and continuous activity in WA If you were for the DefendantConsequences didn’t arise out of their activity in WA; unrelated claim or cause of action Systematic and continuous—unrelated claim or cause of action **Maybe** Single and isolated—unrelated claim or cause of action **No** Argue: Personal injury claim does relate to activities w/in state of WA If drummers had never been in WA, Plaintiff never would’ve bought the shoe and never would’ve sustained the injury






NO JURISDICTION SINGLE OR OCCASOINAL UNRELATED SINGLE OR OCCASIONAL RELATED MAYBE SYSTEMATIC AND CONTINUOUS RELATED “But for”  Specific jurisdiction arises out of what defendant did in that state; related  General jurisdiction claims are claims that can arise out of systematic and continuous; unrelated claim

HELICOPTER V. HALL Justice Brennan says yes it is a related claim, it might not formally arise, but it is at least related; he sees relation as being enough; Helicopter’s contract was negotiated in TX, actual contract was executed in Columbia, but executed in TX—that is sufficient to make it a related claim (his “but for”) In 60 years since Int’l Shoe, Supreme Court has never addressed foreign activities like this; during those 60 years, Justice Brennan’s dissent in Helicopter is the only one to address and his “but for” is the only word anyone’s had on this subject Why didn’t majority address contacts between Helicon and TX b/c it wasn’t raised “but for” standard—p. 89

PERKINS V. BENGUET CONSOLIDATED MINING CO. Systematic and continuous activity but claim was completely unrelated “General jurisdiction”—as distinct from “specific jurisdiction”; p.135 discusses this; anybody in the world can sue that defendant in that state on any claim whatsoever, no matter how unrelated to defendant’s activities in that state; nature of defendant’s connection w/state must be substantially greater to sustain general jurisdictionplaintiff must show defendant engage in systematic and continuous activities w/in that state How systematic and continuous does it have to be? Only addressed twice by Supreme Court in Perkins in Helicopters of general jurisdiction and how systematic and continuous defendant’s activities had to be Perkins-Yes; Helicopters-No If you accept notion a foreign corporation can high such a high level of activity in the state that it is fair and reasonable that it can be sued for any claim anywhere, then Perkins is the strongest case Banguet kind of became an adopted OH corporation Court said it can have general jurisdiction based on fact pattern In Helicopters, no, contacts weren’t systematic and continuous, which is a matter of degree 7

Justice Blackman says contacts in TX just won’t do; basically Helicopters was just a customer, buying helicopters from Bell Helicopter and doing training there; continuous purchasing activity is not good enough for jurisdiction Mere purchases is not sufficient to infer jurisdiction over unrelated claims And certainly the trip of the CEO to TX isn’t systematic and continuous Checks from TX—Helicopters just received the money into its account Helicopters seems to say that something approaching the Perkins scenario might be required Suppose we had a case w/an int’l corporation that does what Int’l Shoe does—sends drummers into state to sell shoes, but is sued on a completely unrelated cause of action Only activity is the selling of shoes, but like in Helicopters, that is not enough Nicholas v. GD Searle & co. p. 140 4th circuit says expansion of specific jurisdiction renders general jurisdiction almost useless, so we should narrow it strictly

SPECIFIC JURISDICTION Response of state to Int’l Shoe was to enact all new long-arm statutes Older long-arm statutes identified a particular activity and would confer long arm jurisdiction in claims arising out of that activityoperation of automobile Hess Focused on specific acitiy for jurisdiction Beginning w/Int’l Shoe—tend to much broader; speak in much broader terms GRAY V. AMERICAN RADIATOR & STANDARD SANITARY CORP., Supreme Court of Illinois One of the first after Int’l Shoe to enact a new long-arm statute IL served as model for statutues in other states What happened in Gray happens every day by the thousands that gives rise to a problem that continues to give great difficulty

p. 39 (a) Court would not have jurisdiction if tortuous act had occurred outside of IL Non-resident commits a tortuous act w/in state of IL, they submit to action in an IL court (p. 82 Section 16 of the Civil Practice Act) Court doesn’t have inherent power to serve its process outside of the sovereign; no inherent power to make long-arm service of process; courts can’t simply do it on their own, they must have a statutory basis That’s why we have long-arm statutes—to do stuff like that 8

Feathers v. McLucas, NY Ct. of Appeals Factually same as Gray; NY long arm statute was modeled on IL statute NY Ct. of Appeals read the language differently Defendant was not charged w/committing a tortuous act and not subject to NY court’s jurisdiction

GRAY If court construes statute as authorizing long arm then you decide if it’s due process Always potentionally a two step inquiry 1. is service authorized by long arm statute 2. is that consistent w/due process RI statute incorporates due process into its long arm statute (p. 289 statute book) But if you come up w/a negative answer to the first part, you never get to the 2nd part Most long-arm statutes were very broad originally Not all states did that, though

p. 39 (b) Titan’s act was that they manufactured a water valve and sold it to American (both occur in OH, NOT in IL) The place of a tort (wrong) is where the last event took place which is necessary to render the tort Determines which state laws are used Like, when does the statute of limitations begin to run? Injury will always be the last place (court’s reasoning) In Gray, statute doesn’t contain the word “tort” and doesn’t mention place of the tort, it uses “tortuous act” What NY Ct. used in Feathers Doesn’t that imply the act the party made, not the tort made to them? Act was not tortuous until it injures somebody Act wasn’t tortuous in OH b/c Gray was injured in IL Court points to consideration of the words and legislative intention less from technicalities and more from intention of how the case was written In Nelson v. Miller, to extent permitted by due process clause NY Ct. of appeals didn’t regard their statute as being able to go as far as it constitutionally could In Feathers, there was a dissenting opinion which read statutory language as reaching the defendant, a/k/a got same conclusion as IL—a tort or tortuous act is made up of a series of occurrences: act of making defective produce and act of injuring the plaintiff; both of those are torts, therefore they are both tortuous acts 9

All of that was the statutory aspect Court moves on to due process in the middle of p. 83 Since Titan was decided, US Supreme Ct. has decided 3 cases dealing w/this particular problem What were Titan’s contacts w/IL? Titan manufactured valve in OH Sold it to American in PA American incorporated part into a water heater Sold to IL consumer through course of commerce OH  PA  Minn distributor  WI wholesaler  IL retailer  IL consumer Stream of commerce—valve was carried into IL by the stream of commerce IL court says that the one sale was the only contact between Titan and the state of IL, cites many cases Courts say they must ask if defendant engaged in some act or conduct which may have invoked the benefits and protection of the law of the forum Hanson v. Denckla—in every case, some way or another defendant’s performed act invoked benefits; since Int’l Shoe How did Court see connection in IL? Titan has enjoyed indirect benefit for servicing the IL market containing water heaters containing safety valves Defendant Titan didn’t say Gray situation was an insolated incident, court will presume there was more than one b/c Titan manufactured them and sold them in the stream of commerce; it has indirectly service its market for valves in IL thereby enjoying benefits of that state If that reasoning is valid, doesn’t that apply to any manufacturer who sells their product in the stream of commerce (stream of commerce jurisdiction)

WORLD-WIDE VOLKSWAGEN CORP. V. WOODSON p. 40 (a) In Gray, court held Titan was subject to long-arm statute litigation and long-arm statute did not violate Due Process (14th Amendment) - it is not supreme as to IL law; IL Supreme Ct. tells US Supreme Ct. what is supreme in IL Must figure argument around Due Process In WOODSON, foreseeability alone is not enough for personal jurisdiction under Due Process Clause Just b/c item sold in stream of commerce may end up in forum state and injure someone there, that is not enough to establish contacts there Rejects Gray, as far as foreseeability under due process clause In GRAY, Titan sold water heater through stream of commerce turned up in IL And it was only one, but chances are there are other ones that are used in IL and Titan enjoys economic benefit of IL market 10

p. 40 (b) Distinction may be if it is taken into a state by a consumer or if it is in the stream of commerce and moved into another jurisdiction In WOODSON, court accepts that a state may exercise jurisdiction over a distributor which serves that state indirectly by delivering its products into the stream of commerce w/the expectation that they will be purchased by consumers in the forum state Gray is not consistent w/Woodson, but it’s still good law

WOODSON What must be shown before a state can exercise long-arm jurisdiction? What must defendant have done? It’s essential Defendant must have directed his activities towards the forum state in such a way that he would enjoy the benefits of that state If consumer brings the product into the state, what benefit is the defendant enjoying? It’s hard to see how those two defendants are servicing anyone in OK b/c Robinsons’ took their Audi into OK themselves When consumer brings the product into the state

KULKO V. SUPERIOR COURT Foreseeability in the highest degree wasn’t sufficient

BURGER KING CORP. V. RUDZEWICZ Last time Court attempted to lay out minimum contacts test This case is different b/c this is the 1st time case arose about jurisdiction and contacts in a federal court (district court in FL) Federal district courts can exercise jurisdictions of defendant if state court of general jurisdiction if state court can do so—incorporates state jurisdiction statutes, including long arm statutes

TWO STEP TEST “Purposeful Availment Requirement”—Did defendant purposefully establish contacts w/in forum state Minimum contacts means def must have conducted activities w/forum state which it could be said to have the benefits and protections of that state’s laws If the answer is “no”, state cannot exercise jurisdiction If “yes”, might be considered w/other factors to see if it conforms with… Other factors which decide if it’s fair and reasonable - burden on defendant 11

- interest of plaintiff in litigating in that forum - interest of the state - interstate judicial system’s interest in settling - interest of other states

Mad Max’s Appliances  Located in Camden, NJ  50% of customers from PA  Someone buys a water heater from Mad Max and takes it to Phila, where it explodes and burns down his house What about someone who advertises nationally? 10th and 5th says no, national advertising alone doesn’t target any specific state 11th circuit says yes, every state is targeted in national advertising If it is specifically targeted, that can do it  There is no advertising that could be interpreted by Mad Max to be targeted at Philadelphia, PA In WW VW, Justice White says the out-of-stater can be subject to jurisdiction where he has made efforts to serve in the forum state (leading up to stream of commerce, citing Gray case)  If only b/c of location, Mad Max is serving market in PA

Justice Brennan’s two part test 1. Did def purposefully direct activities to the forum state so he could enjoy benefits/protections of forum state? “purposeful availment” 2. Fairness and reasonableness of jurisdiction—would it be fair and reasonable to require defendant to defend against this lawsuit in this particular forum? “reasonableness and fairness” Purposeful availment These two inquiries are not sealed off from each other There is a relationship between the two * Maybe if other factors weigh heavily enough in terms of making it fair and reasonable to litigate in that forum, they can take a little less of minimum contacts * He’s envisioning a “sliding scale” in terms of the questions—more of one, less of another If we assume 1st test has passed, defendant has availed himself of benefits/protections of law (plaintiff’s claim has risen out of what defendant has done in that forum), what must defendant show in terms of other factors in term of fairness and reasonableness in order to defeat jurisdiction? He must present a compelling case that presence of other considerations would render jurisdiction unreasonable 12

Must show it would be “gravely” difficult This is not a stream of commerce case Applying facts to case at hand, BK did enjoy benefits/protections  Franchise agreement provisions said law of FL was to be followed o Hanson v. Denckla—courts often apply laws of other states; MI courts can apply FL law; for determining whether a court in a state has jurisdiction, choice of law is irrelevant - Hanson had a choice of law analysis, where in BK, there was a choice of law provision - In BK, parties picked the provision  Choice of law provision alone is not enough  Contract is a contact, but the contract in BK was for 20-years This contract had a substantial connection w/state of FL: It wasn’t an ordinary, one shot contract 20 years Created a carefully structured 20 year relationship of continuing and widereaching contact w/BK Justice Brennan cites another case—McGee v. Int’l—only contact was a contract Dissenting opinion (same as court of appeals)—disagreement w/fairness and reasonableness Franchisees had no bargaining power They had to just sign on the dotted line Once purposeful availment is shown, burden is on defendant to show he would be at a substantially unfair position to litigate in forum state KEETON V. HUSTLER Court upheld jurisdiction said 15,000 copies sold in NH is a substantial connection Keeton had no contacts whatsoever in NH, she was just using NH b/c they had the most lax statute of limitations to bring the libel suit If Plaintiff is a resident of forum state, it enhances defendants contacts w/that forum CALDER V. JONES National Inquirer sells 40% in CA Attached editor and writer (FL) Requiring media defendants to defend suits of this sort, the burden and expense of doing that, their 1st amendment rights should be considered against exercising jurisdiction Once purposeful availment is shown, defendant would have to make quite a compelling argument of other factors

BURGER KING V. RUDZEWICZ Choice of law doesn’t say they consent to the jurisdiction of FL courts 13

They could’ve used FL law in MI

ASAHI METAL INDUSTRY CO V. SUPERIOR COURT  Strong structural similarity to Gray v. American Radiator

Asahi sold a valve to Cheng Shin in Taiwan, Cheng Shin incorporated it into another product and sold it to a person in CA p. 124, Justice O’Connor “Defendant’s awareness that stream of commerce may sweep product into that state does not convert the mere act of placing the product into the stream into an act purposefully directed towards the state” Additional conduct may indicate intent or purpose to serve the market in the forum state, such as— designing it for the forum state, advertising in the forum state, marketing, or establishing channels for business Now using a more restrictive, stream of commerce plus position O’Connor’s viewpure stream of commerce theory, Gray theory, is not good law p.41 (b) Justice O’Connor would say Gray would not be good law Justice Brennan would say Gray would still be good law Justice Stephens would say Gray depends Depends on volume We have to take a more factual look at the volume, numbers, value, nature of product, etc. In this case, there was a record or large volume IL Court said—Fact that there was one in that state, and manufacturer regularly sells it into stream of commerce, it is reasonable to infer Stephens would probably say no Assuming Stephens would say water heater is as hazardous as bike tire, and go along w/inference IL Supreme Court drew about one being there, so there must be more, if he were willing to do thatIf every time a company releases a product into the stream of commerce, then Gray jurisdiction would apply everywhere (c) Jurisdiction through GrayWW VWAsahi Part IIA—Which one is good law? Restrictive Stream Plus O’Connor Rehnquist Scalia Powell - no jurisdiction Open Stream of Commerce Brennan White Marshall Blackman - jurisdiction


p. 130, 6.) 5th Circuit said there is no binding b/c it was 4/4, so go back to last decision that was binding by majority, which was WorldWide VW 14

Lower federal courts have split about even— 1st, 4th, 11th Circuit have held Justice O’Connor’s view is controlling 5th, 7th, 8th Circuit have in effect taken Brennan’s view (5th says WW VW, which is technically Brennan’s view) Similar division in state courts, too Stream of commerce swing vote would depend on how Stevens would have voted Holding: Asahi was a unanimous decision—no jurisdiction over Asahi Section II-B Goes to fair and reasonableness BK says degree of burden on defendant is a factor It’s not just that Japan is further than PA, Asahi has been demanded to traverse the distance, but also to submit to a foreign nation’s judicial system Asahi’s foreign corporation status, it would be a language barrier and litigation in a completely different system How would you weigh the burdens if the Defendant was a Mexican corporation? She said that it was a foreign sovereign nation b/c it affects foreign relations policies This is a factor b/c foreign relations policies are important

ASAHI p. 41 C. (a) You can’t say it would be different if it was in PA; court has to weigh and balance a number of factors—cost of litigation, interest of forum state, litigation efficiency Justice O’Connor says: In terms of social policy, we have to determine public interest on foreign relations In terms of Cheng Shin’s interest, it’s not necessarily easier than it would be in Japan or Hong Kong (b) If bike shop was added, it was a CA store, so jurisdiction could be different (c) It would’ve changed every factor court relied upon in reaching decision in Asahi When we get into this 2nd step of BK analysis (Asahi is best illustration of it from Supreme Court), it is a very fact-specific kind of inquiry; have to look at particular facts of every single case


BELLINO V. SIMON—INTERNET, electronic, or cyber contacts
Plaintiff argues for general jurisdiction for Simon b/c of his web-site, which solicits business in LA and other 49 states Specific jurisdiction for Simon As for Spence, even if contacts were systematic and continuous, it wasn’t Spence’s b/c it was his corporation’s Court says it has specific jurisdiction over Simon, but lacks it over Spence EXAMPLE: PA couple buys wine in San Francisco in little mom and pop winery and come back to PA and got botchulism; cannot get specific jurisdiction in PA What if mom and pop have a web-site w/coupons and contains a PO Box address to which checks and orders can be mailed? Plaintiffs see the web-site and when they are in CA, they see the winery and remember the ad from the web-site… Does that change specific jurisdiction? NO, something more than the mere maintenance of a web-site is needed to show defendant directs its activities at that forum (ZIPPO MFG CO. V. ZIPPO DOT COM p. 148) 2nd, 5th, 9th, 10th, 3rd, District Courts and some states courts

ZIPPO MFG CO V. ZIPPO DOT COM “sliding scale”—pp. 148-149, it is clear under Zippo that a purely passive web-site that simply gives information (probably gives name and address), there is an emerging consensus that it’s not sufficient Other possibilities: 1. Business over internet, if defendant entered into contract where personal files were continuously transmitted over web-site; inter-activemore than passive, there is the capacity for exchange of info, but less than a true active web-site In these cases, jurisdiction is determined by examining level of inter-activity and commercial nature; not an exact test

INSET SYSTEMS, INC. V. INSTRUCTION SET, INC. One of the 1st cases of this kind District court said no, by maintaining the web-site, you are advertising in Conn., you are intensively advertising it to promote your commercial interests, so you are purposefully directing your activities towards Conn; Inset had also done business in Conn.

Advertising in national media, is that sufficient to confer specific jurisdiction? Courts are split Could this be seen as similar to releasing into the stream of commerce? When you put it on the internet, that is almost like the stream of commerce Trend is a passive web-site by itself is not sufficient to do it


BELLINO V. SIMON Spence: Court says only contact Spence has is a single phone convo as to which Spence was a recipient, nor did he solicit the call Court said that’s not enough to enjoy benefit/protection of LA law Simon: Through the inter-active web-site, Simon communicated w/Aubert; there was a visitor form that Aubert filled out First phone call resulted from some e-mails back and forth In a broad sense, Simon solicited the communication through his web-site; he solicited business in LA If you have an inter-active web-site that invites guests to communicate and they do so, that is sufficient Simon initiated 7 subsequent e-mails, 3 of which contained defamatory statements; Simon sent to Aubert in LA If I send a letter to Aubert in LA, that would be sufficient to do it; so e-mail is similar Not just inter-active web-site, you also have Simon’s 3 defamatory e-mails Plaintiff did not sustain any injury in LA, except for his sale of 2 baseballs to Aubert

CYBERSPACE JURISDICTION 9th Circuit Caseheld that foreign corp was subject to long-arm in CA based on internet activities, subject to general jurisdiction on an unrelated claim; defendant involved was L.L. Bean, Inc.; LL Bean was subject o general b/c it operated on internet a “virtual store” through which it made massive sales in millions of $$$ over a substantial period of time; forum directed activities substantial systematic and continuous based on web-site activity and sales… **re-argument granted on bank** pp. 42-43 Was not a question of judicial jurisdiction, it was jurisdiction of ND to impose a use tax on foreign corporations based on it solicitation of business in ND by mail and telephone Court applied due process jurisdiction using Int’l Shoe through BK Quill was soliciting business on a large scale basis as was Int’l Shoe in WA Quill was doing phone solicitation; Int’l Shoe used drummers—Justice Stevens said that’s irrelevant; jurisdiction can’t be avoided b/c defendant didn’t physically enter forum state  physical presence is not required JURISDICTION BASED ON PROPERTY W/IN STATE—IN REM JURISDICTION Pennoyer v. Neff—state can always exercise jurisdiction over property w/in its boundaries Very restrictive rules of in personam jurisdiction at that time pp. 22-24 Note 17

In rem jurisdiction/quasi in rem jurisdiction In personam jurisdiction pp. 44-48 Following Pennoyer, law of in rem jurisdiction seemed to be straight forward; if property was located w/in state and if plaintiff when beginning action attached or otherwise seized property and brought it w/in custody of the court and proper notice was given to property owner, plaintiff could proceed in rem TYLER V. JUDGES OF THE COURT OF REGISTRATION   Proceedings are against persons Even if it’s about a property, it’s really about the property rights, which is a person vs. other people o In personam, not in rem

PENNINGTON V. FOURTH NATIONAL BANK   Power of state to proceed against the property of an absent defendant is the same whether the obligation sought to be enforced is an admitted indebtedness or a contested claim 14th Amendment did not abridge jurisdiction which a state possessed over property w/in its borders, regardless of the residence or presence of the owner

Application of these rules were straight-forward b/c property was tangible As intangible objects like stock, notes, etc., stuff that has not physical situs in the world Courts had to assign a physical situs EXAMPLE: Cannon owns 1000 shares of Microsoft common stock… What is the situs? Different possibilities: 1. It is wherever Cannon is 2. Since it is Microsoft, situs is where Microsoft is 3. Or, where Microsoft has it’s principal place of business 4. Wherever share certificate is at that time

HARRIS V. BALK  Supreme Court says situs of a debt for jurisdictional purposes is wherever the debtor happens to be

SHAFFER V. HEITNER Named 28 present and former directors at Greyhound as defendants (none of whom resided in DE) Said they had breached contract w/Greyhound, costing Greyhound millions By sequestering stock in Greyhound, this was the basis for jurisdiction Courts of DE upheld it p. 49 C 18

Most courts have situs where stock certificate is located What is the rule governing in rem jurisdiction? Court adopted “minimum contacts” rule from Int’l Shoe All assertions of jurisdiction must be tested from this minimum contacts test  Major change in the law Heitner lost b/c he didn’t anticipate the Supreme Court would take this step If DE court had jurisdiction and case proceeded and Heitner won, what would’ve been result of that? Sequestered property would’ve been sold to satisfy the judgment Non-resident defendants would’ve lost their interest in that property Proceeding is not against the property, the proceeding is against the owners of the property, against the interest of the owners in that property b/c that is what’ll be lost if Plaintiff prevails This is another example of exercising jurisdiction over owner of property, so it’s really just another kind of in personam jurisdiction Use in personam jurisdiction rules If you use minimum contacts test, there really was no contacts b/c defendants were non-residents w/only contact being the owning of stock That one contact w/DE is completely unrelated to cause of action, so no in personam jurisdiction p. 49 D 1. Cases involving physical property w/in a state Property in that state is a contact, he is enjoying benefits and protections of that state’s laws Presence of property may bear on contacts w/in that state i.e.) when claims to property itself, yes presence of property is sufficient; defendant’s claim of property in state implies defendant wanted to enjoy benefits of that state’s interest In Rem action, true in rem, yes, presence of property is sufficient 2. Presence of property may also favor jurisdiction in suits of injuries sustained on land Quasi in rem jurisdiction—attachment jurisdiction; jurisdiction is all right in these circumstances ** Both sufficient to support in rem jurisdiction, also sufficient to support in personam jurisdiction ** Difference between these two instances where in rem jurisdiction would be valid and other in rem situations is that the presence of property is related to claim raised and in personam jurisdiction would also be valid In rem jurisdiction as a separate animal is a dead letter since Shaffer was decided Did not say two example were exhaustive

RHOADES V. WRIGHT Supreme Court upheld jurisdiction attachment of farm land 19

In Shaffer, property was intangible In Rhoades, property was tangible b/c/ it was land UT court said he actively used the land

SHAFFER V. HEITNER Two instances in which property in state alone would be sufficient: a. where litigation involves conflicting claims of interest in property b. where claims arises out of property i. personal injury claim by person who was inured on property States can exercise in personam jurisdiction in those two instances Is anything left of quasi-in rem jurisdiction? In PA, answer is no

FEDER V. TURKISH AIRLINE In some cases, quasi-in rem is not dead NY Resident killed in air crash in Turkey; NY survivors brought wrongful death against Turkish airline in NY; decedents family got jurisdiction by garnishing bank account in NY Court says had to be from in-rem basis—attachment of bank account Pure quasi-in rem based on bank account After Shaffer, can’t obtain in personam jurisdiction or quasi-in rem jurisdiction There is no guarantee you can exercise jurisdictions over anybody in the world, anywhere “jurisdiction by necessity”—willing to stretch rules where failure to do so, Plaintiff would have no forum that was practically available; no court has formally adopted this theory FEDER

p. 49 Question E “Non-resident director’s statute”  If a state has one, does it comply w/requirements of due process? DE did not purport to exercise in personam jurisdiction, just strictly quasi-in rem jurisdiction assert state’s interest, to base its jurisdiction over people as officers 7 out of 28 defendants named didn’t have stock Even if DE attempted to do this, it’s still not sufficient to establish that DE is a fair forum for this litigation Wherever this case was tried, DE substantive law would be tried Basic principle of choice of law 20

Doesn’t satisfy due process purposeful availment test even if there was a statute W/in 13 days after Shaffer, DE legislature enacted a statute that anyone who accepts service as an officer, shall be deemed to have consented to jurisdiction in DE courts in cases arising out of activities in DE If you accept the office, you accept jurisdiction Corporations are always subject to general jurisdiction No one is bound to follow the dicta In 3 or 4 states that has statute, constitutionality has been upheld

BURNHAM V. SUPERIOR COURT Circling back to in personam jurisdiction p. 51 Question A All 8 say traditional jurisdiction say service of process w/in state is still good law no matter how unrelated case is to what you have done in that state, even if you haven’t done anything Justice Scalia says p. 173 Burnham voluntarily went to CA, while he was there, he did enjoy protection of CA law If his presence wasn’t voluntary, Brennan might say he didn’t invoke protection of those laws

“Transient jurisdiction”—personal jurisdiction over a defendant who is served w/process while in the forum state only temporarily (such as during travel) “Quasi-in-rem jurisdiction”—jurisdiction over a person but based on that person’s interest in property located within the court’s territory “Specific jurisdiction”—jurisdiction that stems from the defendant’s having certain minimum contacts w/the forum state so that the court may hear a case whose issues arise from those minimum contacts “General jurisdiction”—a court’s authority to hear a wide range of cases, civil or criminal, that arise within its geographic area; a court’s authority to hear all claims against a defendant, at the place of the defendant’s domicile or the place of service, without any showing that a connection exists between the claims and the forum state Int’l Shoe  “continuous and systematic” contacts with the forum 21

Pennoyer v. Neff  must be brought within the court’s jurisdiction by service of process within the state or voluntary appearance

Addresses problem of Int’l Shoe (p. 34): “doctrine of minimum contracts”  is it in lieu of or in addition to p. 51 (b) it is still good law w/respect to Burnham, question of transient jurisdiction, purpose is to supplement Why does Scalia say it is still good? Crucial time transient jurisdiction (p.169) is always good since 14th Amendment (1868 adoption) Traditional notions of fair play—what notion was more traditional than this one? Why does Brennan uphold practice of transient jurisdiction? Contemporary notions of fairness and justice; tradition is relevant; contemporary notions of fair play and justice, no matter how traditional it was, the inquiry noted before must come into play Must make independent inquiry into what is fair and reasonable No clear majority on opinion why transient jurisdiction is upheld

p. 51 (c) On page 169—until 1978, no court had rejected doctrine of transient jurisdiction; after 1977 Shaffer, a few lower courts said doctrine of transient jurisdiction was inconsistent w/what Shaffer said about transient jurisdiction What happened in Shaffer, sequestration of that stock, could only have happened in DE—if you view it that way—attachment could only happen in DE p. 51 (d) Brennan’s does—every application must be tested against contemporary standards of fair play and justice Transient jurisdiction was never based on fairness, etc. p. 51 (e) In Shaffer, we recognize quasi-in-rem and in personam are basically the same; in personam rules of jurisdiction of Int’l Shoe can be applied Scalia had some problems; reliance on history is clear enough p. 51 (f) 22

Transient defendant avails himself of the benefits of the forum state by visiting there p. 51 (g) This question is transient jurisdiction This happens in a few cases from time to time

JURISDICTION BY CONSENT pp. 180-182 “Forum selection clause” Forum selection clauses, under common law, were treated as being unforceable

M/S BREMEN V. ZAPATA OFF-SHORE CO. p. 180 Admirality and maritime conflict—admirality is of the sea Forum selection clause was valid and enforceable Court emphasized it was a contract voluntarily entered into by 2 large entities; also emphasized international

CARNIVAL CRUISE LINES, INC. V. SHUTE p. 181 Court upheld the forum selection clause Said it was a reasonable provision that parties were free to enter into and should be enforced in court In federal courts, policy is in favor of forum selection provision enforcement Forum selection clauses, prima facie, are enforceable unless resisting party can show by some circumstance shows it’s unreasonable—unequal bargaining power, etc. Pennoyer jurisdiction by consent

FEDERAL COURT PERSONAL JURISDICTION Many similarities to state court systems But also some significant differences that arise over the nature of the federal system Congress has tied geographical jurisdiction to the states One federal district court who jurisdiction crosses state lines—Wyoming crosses into Idaho and Montana 23

B/c of Yellowstone National Park to keep all jurisdiction w/in the same area

OMNI CAPITAL V. RUDOLF WOLFF (1987) May be confusing b/c it talks about F.R.C.P. 4; Rule 4 was substantially changed History: Plaintiffs v. Omni ( Implead/join 3rd party defendants ) v. British Corp. Implead—if I am liable, you 3rd party are liable over to me for all, or at least part, of what I have to pay For purposes of jurisdiction, it’s as if Omni just sued British Corp in the first place p. 67 (2) Rule 4 (k) (1) (a) Rule 4 governs service of process If state court of general jurisdiction could serve process on a defendant in these circumstances, this court can, as well General Rule: Federal court can serve its process anywhere geographically where the state could Also incorporates state’s long-arm statute If a state court could exercise long-arm jurisdiction, any federal court can do the same Incorporating state rules for service of process

p. 67 (3) LA long-arm statute didn’t have jurisdiction over them, so the Federal court couldn’t have jurisdiction over them, either

p. 67 (4) Pursue a case in Britain But that would be distant and burdensome Contract signed in NY—could you try there? You would need to know: What sort of contacts both had there, and If NY long-arm statute would be long enough If yes, NY state court could do, so could the NY federal district court If defendant is subject to jurisdiction of any state, then he is subject to jurisdiction in at least one federal court If state courthouse door is closed, then federal courthouse door is not open, either Federal long-arm can reach just as far as state long-arm, but no further 4 (k) (1) (b) Can be served outside the state, but w/in 100 miles of the courthouse Britishers were joined as defendants, but 4 k1b doesn’t help that b/c Britain is not 100 miles from the courthouse 24

4 (k) (1) (c) Very specialized 4 (k) (1) (d) That’s what Omni had hoped under Commodities Exchange Act (CEA) If there’s no federal forum, there’s no state forum b/c w/out state forum, there is no federal forum There is no guarantee there will be an American forum for every case

p. 67 (5) 4 (k) (2)—you would need to know if person was subject to jurisdiction under any other state; “fallback provision”; kicks in only when person involved is not subject to jurisdiction in any state Added as a reaction to Omni Needed to make sure there was a federal forum open Three requirements for claim arising under federal law 1. Jurisdiction must be consistent w/laws and constitution of the US 2. Defendant must not be subject to jurisdiction of any other state

p. 68, Query #7 What due process standard does court apply in Omni? Nothing about applicable due process standard b/c court never has to reach it b/c there is no authorization for service so we don’t reach that question of due process 14th amendment applicable only to states, so that doesn’t count in Omni 5th Amendment due process clause, part of bill of rights, which is applicable to gov’t No matter how many contacts someone has in a forum, there must be a mechanism for service of process If not served, not subject to jurisdiction Justice Blackman discusses this on pp. 64-65 There is a basic principle that is so basic courts usually don’t talk about—court don’t exercise long arm jurisdiction w/out statutory jurisdiction OMNI is one case where they do address it Rule 4k1 doesn’t allow jurisdiction OMNI says court should fashion a judge-made rule Court declines that invitation Blackman says on p. 64 at common law, court lacked authority to authorize service of process outside its district… After Omni, it will take a compelling showing to induce court to attempt something Omni, like Asahi, doesn’t shed any light


Does PANAMA case shed any light? 4k1d extra-territorial service is good when authorized by a statute RICO authorizes service   Fairness/reasonableness would correspond w/2nd prong of Burger King test for federal courts 1st prong—minimum contacts w/the US as a whole o rule 4k2 is limited to cases under federal law o “national contacts”—if defined this way, it becomes easy b/c they were American defendants - if answer is yes, according to 11th circuit, court should ask if it would be unreasonable and unfair

1st purposeful availment part of test—we substitute u.s. as whole for a state; if answer to first part is negative, not sufficient minimum contacts w/u.s. as a whole, that’s the end of it 11th circuit says only in unusual cases that inconvenience will rise to a level of constitutional concern if minimum contacts are present, def. must make a compelling showing of inconvenience p. 78 Note 3 Does def. have sufficient contacts w/u.s.? If answer is yes, that def. is subject to jurisdiction of federal court What court Congress assigns it to is up to Congress This is the constitutional limitations on jurisdiction National contacts has become the dominant approach

CONSTITUTIONAL REQUIREMENT OF NOTICE What is nature of relationship between forum state and defendant and will allow them to exercise jurisdiction is what we have been talking about “nexus” NOTICE Notice goes all the way back to Pennoyer They expressed concern as to adequateness of notice to the defendant Pennoyer implied only in-hand service would do it in a in personam action Separate due process independent requirement that def. must be given adequate notice of lawsuit against him What is adequate?? There is a constitutional requirement of adequate Supreme court in recent years has been increasingly concerned w/adequateness

WUCHTER V. PIZZUTTI Statute did not explicitly require statutory agent to forward notice to non-resident defendant 26

Supreme Court said that was not sufficient Agent appointed by statute to receive notice, statute must require notice must be sent to defendant at last most recent address GREENE V. LINDSEY Court said posting on apt door wasn’t sufficient, it must be more certain than that What is adequate?

p. 85 Questions on Mullane In Mullane, we were in surrogate’s court/orphan’s court Jurisdiction limited to administration of estates/trust NY had enacted a statute which permitted corporate trustees to pull the assets of smaller trusts b/c it was more practical and efficient As part of this, trustees were required to periodically file an accounting w/surrogate’s court, to account for how they had administered the trust over a period of time, profits/losses/costs If that was approved, would see if properly performed If yes, enter a decree and trustee would be free of any further liability from manner in which it had administered the trust Statute required giving notice to beneficiaries could be done in NY newspaper in general circulation for 6 successive weeks 2. Notes/Questions (a.) Requiring him to make the trust whole Mullane says if this decree is empty, since it’s final, it cuts off all my rights to trustees, can no longer seek to surcharge Money judgment would be an in personam action Money needs to be paid upon plaintiff and he if doesn’t, it’s an in personam judgment All this statute does is permit trustee to get to court first Surrogate’s court cannot adjudicate rights of nonresident beneficiaries who were not served w/p[rocess in NY Courts answer is it doesn’t matter, they don’t have to decided if it’s an in rem or in personam action For various purposes those proceedings have been treated either way, in rem, quasi in rem, etc. For due process purposes, these vague distinctions (relevant in law for other purposes) shouldn’t be controlling Why does he say the state ought to be able Refers to long standing custom Interest in each state to closing trusts is so compelling that it is basis What could bank do to arrive at a point where they have reached repose and not subject to claims against them for alleged breach of judiciary? Conclusive binding judicial judgment which cuts off possibility of future claims If NY couldn’t do this, it couldn’t be done 27

Jackson says we shouldn’t concern ourselves SHAFFER says in rem is another kind of in personam

Justice Jackson rejects mullan’es theory NY lacked power to exercise jurisdiction over non-residents who weren’t served (pennoyer argument) Notice? Notice doesn’t just pertain to non-residents but to resident beneficiaries, also

p.85 (b) There is a problem w/adequacy of notice by publication Whether it is “reasonably calculated under all circumstances of the case to give notice in fact to the interested parties” is the test Justice Jackson sets out Notice must provide required info, time to respond—but don’t get into that unless they get the notice If they really want defendant to learn about it, the means selected will give the defendant notice Green v. Lindsey—given Mullane standard, we have to look at the facts of the particular case Substitute most likely to reach defendant p. 85 (c) There was a large group of the beneficiaries whose names and whereabouts were not known to bank, so publication was acceptable As to those, whose names and addresses appeared, service by publication was not acceptable there and something more was required What if everyone was unknown? Does that mean publication is acceptable there? Due process doesn’t require notice “in fact” Court says service must be attempted the best it can and that will be acceptable in those cases where it is the best they can Emphasizing actual notice is not required Names/addresses you know or can ascertain by reasonable effort, you must try to serve them People we can’t find, do the best you can; a method as best you can  publication Mullane standard is to be used in all case, whether in rem or in personam Known parties (in rem, there may be unknown parties)


SERVICE OF PROCESS p. 86 Service of Process serves two functions 1. Notice function—the way in which the defendant is given notice of the lawsuit so he can appear and defend his interst (due process considerations) 2. Court’s jurisdiction attaches to defendant—contacts don’t matter; court’s jurisdiction doesn’t attach until you are served w/process Complaint and summons are contained in what is served to you MSFA V. CHAVES p. 94 (a) It’s clear Chaves received mail at his address and plaintiff’s counsel received a call from Chaves atty w/in a few days saying case had been referred to an atty in NY for defense (b) Chaves did not return the waiver No service is being served, a waiver has to be submitted that he will waive service of process Summons is process FRCP 4(d) is not about summons, it’s about waiver of service Under this rule as it was written in 1993, it is clear when you send it, you are requesting a waiver; either defendant waives it or he doesn’t Under old rule, if acknowledgement was returned, it didn’t matter if the defendant received notice or not Rule 4d2 was adopted to fix that problem—if he doesn’t sign waiver and return it, he didn’t waive service; if he does sign and return it, he waives service Rule says defendant has a duty to avoid unnecessary costs Court applies those service costs to the defendant unless good reason is shown as to why they couldn’t return the waiver Default judgment was entered, so if service was invalid, judgement is invalid 4k talks about where service 4e and 4h talks about how the service is made federal district court can serve it anywhere state court can, but federal court can serve it any way a state court could do it PA rules allow service at business; federal rules don’t 29

Chaves wasn’t served w/certified mail as required in MD Must mirror state practice where and how served

p. 94 Question E Whether the action begins w/the complaint is filed or when the defendant is served Federally when the complaint is filed is when the action is commenced But some states don’t start until defendant is served You would have to know what kind of jurisdiction MD was

NATIONAL EQUIPMENT RENTAL V. SZUKHENT This lease agreement between NY lessor and MI farmers; this action is brought in US dist court for validity of Florence’s appt as agent for accepting svc In determining if contracts is valid, what law do you look to? Federal rule used applying to all 50 states But even if they looked at MI and NY law, the answer would be the same under all 3 Justice Black would use NY law Justice Brennan, Goldberg, and chief justice would use federal standards District court quashed service of process; it was a failure to achieve an intrinsic/continuing reality Florence was not explicitly required to give notice to farmers about the action But she did, and plaintiff did by certified mail on their own Justice Stewart said Florence’s prompt transmission was sufficient Wuchter was different b/c it dealt w/14th amendment limitations upon a statutory scheme upon which a state attempts to subject individuals to jurisdiction In Wuchter, the state was appointing the agent In National, the private contract appointed the agent National is not a due process case, the parties chose Florence as agent BK involved due process limitation Court is interpreting whether Florence was an agent authorized by appointment to accept service of process under Federal Rule 4e2 We are not construing the Constitution, we are looking at Federal Rules of Civil Procedure Purpose of contractual provision to assure any litigation under lease could be conducted in NY This is why it’s in there It’s valid per Majority 30

Simple straight forward jurisdiction by consent case Justice Brennan’s dissent said: 1. Must be express provision 2. Construe rule 4e2 to deny validity to appt of a purported agent whose interests conflict w/those of his supposed principal a. Majority said both parties had an interest in a speedy resolution 3. Corporate prepared printed contract a. Individual not bound by mere signature on form b. Proof that he understood what the language meant We could construe the normal way and if it produces a bad, unjust, impracticable, unacceptable result, then amend the rule Jurisdiction by consent in most states is denied by state law But there are exceptions (p. 216  PA they are valid and enforceable here) “special appearance”—procedure at common law by which a defendant presented a challenge to the court’s jurisdiction for any other purpose

p. 97 (1) If D ignores lawsuit, a default judgment would be entered against him In this question, he has no property in NY so nothing could be executed on P would have to bring judgment to Pennsylvania and try to sue on judgment in a PA court, where D is subject to service and he might have assets to satisfy this judgment Assert that judgment that D is indebted to P for $300,000; PA court is obligated to give it full faith and credit Then D could collaterally attack the NY judgment; could assert NY court lacked judgment over his person, therefore judgment is not entitled to full faith and credit (Pennoyer) If PA court inquires into NY court, if NY lacked jurisdiction, judgment is not entitled to full faith and credit Any risks involved with ignoring? If PA court finds NY court had jurisdiction over D’s person, then he would lose that objection; PA court would have to give it full faith and credit Why wouldn’t NY court have had jurisdiction over you? Burnham says if they get you and serve you, they get service of process no matter how unrelated claim is B/c D was induced fraudulently, you would advise NY lacked jurisdiction over his person (Wyman v. Newhouse) Whenever service of process is secured by fraud and if it’s shown, court can refuse to exercise jurisdiction and throw it out of court Deters fraud 31

In Tickle, there is no full faith and credit problem; and it was a direct attack, not a collateral attack Restatement on Judgments says it’s not a lack of jurisdiction but a policy decision to not exercise jurisdiction If D didn’t present it when he might have in NY, and if PA finds NY judgment is valid, D will never get to present forgery claim You should be careful in advising D of risks and uncertainty

p. 97 (2) He could go to NY and enter a special appearance This is why it exists—to address the problem of someone like D; if sued in another state, can assure himself of the chance to litigate on jurisdictional issue on the state in which it is brought (pp. 36-37); w/out submitting to jurisdiction of NY, which is what would happen if he entered a general appearance “special appearance”—strictly to challenging jurisdiction of the court of your person; if you stray into the merits, defending any aspects of the merits, you have waived jurisdiction objections, made a general appearance, and submitted jurisdiction of that court What do we need to know about NY law and making a special appearance? That NY law allows you to make a special appearance Everyone American jurisdiction allows defendants at least the special appearance If this is your preferred route, you can go to NY and challenge jurisdiction of NY court through the special appearance As opposed to staying home and challenging the collateral attack If you go and argue jurisdiction, you give up jurisdictional defense If you don’t go, you aren’t able to bring up other issues

p. 97 (3) Special appearance gives point to fact defendant entered MI court to litigate jurisdiction over his person; had option not to appear at all If you raise jurisdictional issue and lose, you are bound by that determination; you have litigated in S1, which means S2 must give full faith and credit If he appears and litigates jurisdiction question, he will be beound by S1 on jurisdictional issue You get one bite at jurisdictional apple—you can do it at S1, or wait and do it at home, collaterally challenging S1 court S2 court is always free to inquire into jurisdiction of S1 court and make it’s own decision, unless defendant entered special appearance and challenged jurisdiction in S1 and lost Baldwin

p. 97 (4) One possibility is to appeal trial court’s jurisdictional decision to appropriate NY appellate court 32

If he does that and appellate court agrees, it dismisses the action Cost of briefing and arguing that appeal and if appellate court agrees w/trial court, then it’s kind of wasted If you win w/appellate court, you are out of NY In most American jursidcition, order of trail court denying motion to dimiss for want of jurisdiction is not an appealable order b/c it’s not a final judgment p. 98 most American jurisdictions follow some variation of final judgment rule Certain kinds of non-final orders that are appealable If it’s not a final order, unless it is one of those 1292 exceptions, it is not appealable Order denying motion to dismiss for lack of jurisdiction is not final In federal courts, and in many state courts, not appealable NY courts, as a general matter, don’t follow appeal rule Only final judgments are appealbe, but then a list of exceptions for each state PA has an exception allowing appeal for moitoni denying appeal for lack of jursicitoin p. 99 “Query” Judicial efficiency and economy; cases would go back and forth between trial and appellate courts; hundreds of orders could be entered and would be hopelessly disruptive Every time something was filed, peole would run to appellate court and file an appeal

p. 99 (5) What would you say trial court did wrong? Trial court lacked jurisdiction over your person; if you can persuade NY court the trial court erred in jurisdiction over your person, it would vacate the judgment and dismiss the action You have final judgment that is appealable, but is there any problem w/asserting the court didn’t have jurisdiction? He had pleaded on the merits and defended on the merits and had a full-blown trial… Has he waived his jurisdictional defense? Yes he did submit his case on merits, but what else could he have done? He did raise the jurisdiction problem and it was denied, so what else could he do? If defendant makes a special appearance and loses, he can thereafter get appellate review of jurisdictional defense You do not waive your jurisdictional defense if you raised it at the beginning - this is the rule in the great majority of jurisdictions there have been some that have gone the other way if you don’t make special appearance, or if you do and defend on merits, you waived any jurisdictional defense 33

p. 99 (6) Jurisdictional objection you would make is “no minimum contacts” (Shaffer) Due process precludes attachment under Shaffer D’s only contact w/NY is his bank account If jurisdictional objection is unsuccessful, What would you like to be able to do? Enter limited appearance to defend quasi-in rem w/out submitting to jurisdiction of that court You already made motion to dismiss but you lost on that, so what do you do at this point? You’d like to defend on the merits and limit scope of judgment to garnished property If this is an in rem action founded upon granished bank account and palintff wins and gets 300k judgment and 250k will be applied to satisy it, what can Plaintiff do to get the other 50K Court jurisdiction is limited to That judgment will be applied to plaintiff’s claim of action Scope of judgment is limited to property Starts in rem and goes to in personam b/c defendant defended on merits b/c very important b/c scope changes Limited appearance problem in in rem action do we allow def to appear defend claim on merits and still treat it as an in rem action so resulting judgment is limited in scope to attached property If we don’t allow that, when def. defends on merits, he submits to the jurisction of the court p. 188-189: There has been a considerable difference of opnion on judgment limited appearance only in rem you can defend on merits and still treat it as in rem p. 189 Note 1 footnote 12, p. 155 special appearance submitting themselves to in personam liability before defending on merits defending the action on the merits forfeit ur property by not defending on merits or appear and defend on merits if court’s jurisdiction is limited to the property gransihed in first action and judgment is limited accordingly, if plaintiff wins limited, why should it not also be limited if the defendant wins p. 99 (7) i.)  Ignore it, let default judgment be taken since he has no property, and he can collaterally attack judgment (Baldwin)—rule that one out no special appearances in federal courts b/c of FRCP 12b

FRCP 12a120 days to represent defendant and 20 days to respond to plaintiff, unless you can convince them to give you an extension (this is usually what happens) 34

Motion to Dismiss 12b,g,h 15a Procedurally, how can you raise these defenses? Insufficient svc of process-fraud Lack of jurisdiction-same reason

p. 99 Question 7 i) You are representing the defendant What do you do to raise the defenses we are concerned about? File a motion under FRCP 12b2 and 12b5  both service defenses OR you could include it in the Answer Defendant has the option w/7 defenses, he may include them in his answer or he can make a preliminary motion raising one of more of those 12b defenses FRCP 7a  pleadings Very frequently these defenses are raised by preliminary motions Defendant would like to get disposed of up front b/c if he wins, it can be thrown out up front What if defendant decides to include these defenses in his answer 1st defense—insufficient process of service 2nd defense—lack of jurisdiction over his person 3rd defense—forged signature on note No defense/objection by being joined w/other defense/objections Good difference between common law and how we do it federally At common law, if defendant added forgery and merits, he waived his jurisdictional defense  In general, the only things in a civil action that can be raised by preliminary motions are the seven enumerated in 12b, and everything else should be raised in responsive pleading o but that isn’t all true - there are other things that are raised by preliminary rules (won’t find them in the FRCP)

ii) No, based on FRCP 15a The party can amend w/in 20 days after it is served if it hasn’t put on the trial calendar Complaint and Answer then pleadings are cut off No responsive pleading permitted to Answer Defendant may amend Answer once w/in 20 days 35

FRCP 15a—Can’t do it as a matter of course But can do it as a leave from court And such leave will be given where justice requires FRCP 12g—If you make a motion under Rule 12 and omit certain defenses, then you can’t make a motion based on defense/objection that was omitted Our defendant hasn’t made a motion under Rule 12 You can’t omit something from a motion you don’t make 12h1—Three options: preliminary motion under Rule 12, included in responsive pleading, or include it in responsive pleading as a matter of course You can do it by prelim motion, you can do in responsive pleading answer, you can do it in responsive pleading answer amendment, if you don’t do it in one of those three ways, they are waived (12h1b) Under 12h1a, if you make a prelim motion, a 12b motion, and you omit something from one of those motions, you have waived it You can waive it in 12b motion and admitting defense in one of those, or you don’t file it in 12 motion you can do it in responsive pleading or pleading as a matter of course That’s how it is in Federal court, but it is almost the same in state systems Time might just be off or something But these are threshold defenses, which must be raised at the threshold Why do we take this approach? None of these defenses go to the merits, so it would be a waste of the court’s time to find out there was no jurisdiction If defendant asks for leave to amend to add omitted defenses Court could grant the motion, but all that does is allow defendant to assert those defenses and waive them Futility of amendment—it doesn’t advance process to allow somebody to amend to assert legal defense on which he will eventually lose

SUBJECT MATTER JURISDICTION IF YOU HAVE BINDING JUDGMENT Pennoyer said: court has jurisdiction over party and has to have had jurisdiction over the subject matter of the dispute Subject matter jurisdiction gives federal courts big problems Federal courts are courts of limited jurisdiction, not general Outer limits are Constitutional, Article III, Section 2 Congress cannot give federal courts subject matter jurisdiction that is not one of the nine in Article II, Section 2 Congress can contract it Constitutional outer limits but there also must be statutory basis Federal question jurisdiction—cases arising under federal law or cases from citizens of different states (diversity jurisdiction) FEDERAL QUESTION JURISDICTION 36

28 USC 1331  District courts shall have original jurisdiction of all civil actions under Constitution, laws, or treaties of the US Jurisdictional amount requirement State courts can adjudicate the claim, also Congress can make federal jurisdiction exclusive Even if a claim is w/in federal jurisdiction of federal courts, unless congress has specified otherwise

FEDERAL QUESTION JURISDICTION Title 28 UCS 1331 a/k/a “Judicial Code” b/c it regulates Fedearl Judicial System Theya re both applicable to operations of federal courts Judicial code is statutory; enacted by Congress and codified in title 28 (civil/criminal/etc.) FRCP are not statutory; they are adopted; Supreme Court promulgates these rules and fwds them to Congress, and if not rejected, it takes effect; done by civil rules enabler act; they have statutory force Different aspects are governed by FRCP then Title 28


LOUISVILLE/NASHVILLE V. MOTTLEY Court concluded there was no federal jurisdiction and federal dist. Court that decided it lacked subject matter jurisdiction Supreme Court raised the issue of federal subject matter jurisdiction Defendant lost on merits of the claim and appealed to Supreme Court on the merits, still didn’t raise jurisdictional defense Supreme Court said that it wasn’t necessary to discuss two issues b/c the court below was w/out jurisdiction on the cause In federal courts, lack of subject matter jurisdiction is a non-waivable defense Defense that court must raise on its on initiative Parties can’t litigate in federal courts just b/c they want to; can’t confer subject jurisdiction on a federal court by agreement, and if they can’t do it by express agreement, they can’t do it by not raising that defense either Court must raise it if parties don’t Federal courts are courts of limited jurisdiction 37

FRCP 12h3 (this case promulgated in this rule) Court shall dismiss action when it appears by parties or otherwise that the court lacks jurisdiction of subject matter

CAPRON V. VAN NOORDEN Supreme Court decided there was a lack of jurisdiction Plaintiff tried case on merits and lost and appealed verdict asserting there was no jurisdiction for federal court anyway and diversity didn’t exist Supreme Court said yes, that’s right Plaintiff could start the case all over again in state courts

MOTTLEY No factual dispute in Mottley Only questions were interpretation of a federal statute and constitutionality of that statute under 5th Amendment Why were Mottleys wrong? Mottleys realized plaintiff/defendant were both citizens of KY so there wasn’t diversity jurisdiction and breach of contract wouldn’t satisfy it, so he said in his complaint defendant will attempt to justify his breach of contract by justifying it by raising some federal statute Interpretation of “arising under”—not enough plaintiff alleges anticipated defense;  Federal question nature of case must be determined by face of plaintiff’s complaint and not be looking at what def might say by answer  Must be a “well-pleaded complaint” o Can’t anticipate defenses FRCP 8a—Claims for Relief Burden is on plaintiff to make allegation of basic facts establishing federal jurisdiction, no matter what the basis is How do you do this? Appendix of forms p. 184 Form 2. Allegation of Jurisdiction

p. 282 Note 2 Not a doctrine of efficiency


p. 107 (1) 2 requirements for diversity jurisdiction: 1332 exceeds $75,000 between citizens of different states (2) Yes, that court still has subject matter jurisdiction You can conceptualize subject matter jurisdiction as ticket of admission to federal court as a whole Which one or ones can he bring his action in? Under 1391a, can this plaintiff bring this action in ED of PA? 1391a2 where events took place As far as venue is concerned, Eastern District is an appropriate venue to bring case in Plaintiff should be worried about in personam jurisdiction (minimum contacts, serving him w/process) 1. subject matter jurisdiction 2. appropriate venue 3. in personam jurisdiction can be obtained Why do we have diversity jurisdiction? It’s not federal question jurisdiction They are applying state law and deciding state law cases Only justification is so that out-of-staters won’t be at an unfair disadvantage p. 111 Note 9 At any given moment, 15-25% of judges are deciding questions of state law, no particular federal moment, functioning as state judges

Congress has amended diversity statute It has cut back on diversity jurisdiction over past 50 years; cut back on scope One example (p. 271 Note 11)

p. 107 Question 3 A—citizen of PA joins B—NY citizen against D—Corporation in US Dist Ct for SD of NY (D is incorporated in DE and has offices in Manhattan); is there subject matter jurisdiction? 1332c1  no subject matter jurisdiction Strawbridge (p. 160)  principal of total or complete diversity—for federal court to have jurisdiction there has to be complete diversity between all defendants So here, there are two litigants from NY, so there isn’t total diversity Federal inter-pleader act—court construed this statute as being intended to have minimal diversity; polar opposite of total diversity; and upheld the constitutionality of that 39

Total diversity is not constitutionally required In general, total diversity requirement is firmly entrenched If requirement of total diversity isn’t met, it doesn’t has jurisdiction over the lawsuit as long as alignment of parties stays the same SD of NY doesn’t have subject matter jurisdiction We assume executive offices are the principal place of business Statute doesn’t say what a principal place of business is and that can be a tricky question “Nerve center test”—where is the decision-making power, etc. Other approaches are more complex, but more realistic than nerve center test

p. 107 Question 4 1332c2—legal representative of an infant/incompetent is a citizen only of the same state of an infant/incompetent Stella would be considered to be a citizen of the same state of the little boy (PA) Only had this statutory answer since 1988 Federal court awarded higher damages than the court of common pleas and that is why Richard’s parents sought a secretary in NJ and looked to bring suit in federal court * Court of Common Pleas pools jury from Philadelphia County * Eastern District pools jury pulls from Eastern District of PA, including Delaware/Montgomery/etc. counties where incomes tend to run higher, and verdicts ran higher McSparran v. Weist 3rd Circuit reversed its former position and said making Stella the plaintiff was improper of 1359 and federal court lacked diversity jurisdiction What made it improper? Appointment was made only for manufacturing diversity jurisdiction where it wouldn’t otherwise exist, that is improper joiner p. 269 Note 7 Only for the purpose of creating diversity jurisdiction where it wouldn’t have otherwise existed Turns entirely on the motive If it’s an estate representative, the rep is soley a citizen of the state where the decendent lived In those cases, there is a clear statutory answer which does not inquire into the motive of selecting the person Another example where Congress has cut back on diversity jurisdiction 1332c2 applies regardless of motive if it’s to create diversity jurisdiction Practically these devices were more often used to create diversity jurisdiction So this too is a cutting back on diversity jurisdiction Assignment is most common device by which diversity can be created for litigation purpose 1359 and Kramer are still relevant 40

p. 263 Note 2 read carefully to top of page 264 Two judge-made exceptions to diversity jursidction Two Exceptions to Diversity Jurisdiction:

MAS V. PERRY p. 112 Question 1 What is the test for determining citizenship for diversity purposes? Court says it means domicile, residence is not sufficient Domicile is the true fixed and permanent home blah blah blah pp. 115-116 excerpts from 2nd restatement of conflict of laws which deals at length w/domicile Everyone has to have a domicile b/c domicile has proven to be a very useful concept and answers legal questions In personam jurisdiction Citizenship for diversity jurisdiction purposes To tax his personal estate

MAS V. PERRY Jurisdictional statute 1332—confers jurisdiction between citizens of different states; and citizens of a state and a foreign state (alien jurisdiction) Court in Mas says for diversity purposes state citizenship means domicile pp. 115-116 flushes out some definitions of domicile Everyone must have a domicile at all times and can never have more than one domicile at one time A domicile continues, once established, until it is superceded by another domicile Must not be mentally incompetent; Convicts cannot change their domiciles 18—intent to stay Two elements to change domicile  1. Taking up residence 2. Intention to remain 41

(france) John Paul & Judy (mississippi) v. (alien) Perry (LA) v. (subject matter jurisdiction)

p. 112 What two reasons did court give for why he is not a citizen of LA? Mental element is lacking that is required for a change of domicile; he was physically present, but did not have intent to remain b/c he was a student, which means he would have to keep his previous domicile o Where you are domiciled is a question of fact; here, we have no other facts on his intent to remain b/c he is a student Fact that John Paul was an alien would preclude him from being a citizen of LA, or any other state o Even if he had been domiciled in LA, he was still not a citizen of the U.S. o What would be John Paul’s citizenship for alienage/jurisdictional purposes?  France—both a citizen and domicilian of France o If he sued alone, he could evoke alienage jurisdiction  Court would have alienage jurisdiction p. 112 Question 3 Generally, a married woman will be deemed to have the domicile of her husband for diversity purposes As long as they are together, they will have the same domicile If court had applied the traditional rule (like above) and concluded Judy had the same domicile as Jean Paul, would federal subject matter jurisdiction have existed? No, she would have been a citizen of France Could she sue him under alienage? No, b/c she’s not an alien, she is still a citizen of the U.S., she takes his domicile, not his citizenship If Judy could not invoke alien or subject matter jurisdiction, what would’ve been the result in Mas v. Perry? District court would not have subject matter jurisdiction You wouldn’t have total diversity We can combine diversity and alienage jurisdiction Court did not extend the traditional rule to an american woman who marries an alien John Paul would’ve been able to sue landlord, but Judy could not, and they could not together Where was Judy domiciled? Mississippi—she was only in LA as a student, so she kept her domicile of origin, which is Mississippi Americans who are domiciled abroad cannot be sued in diversity jurisdiction American ex-patriot—if you move to England, you are still a citizen of the U.S., but since you are not domiciled in any American state, you cannot sue or be sued in federal court


p. 112 Question 4 Would result in Mas be different under 28 USC 1332a (new paragraph—last one)? Was John Paul admitted for permanent residence? If we assume he was, would result be different? Then he would domiciled in LA, as well, and it would not be total diversity You’d have to show he in fact established a domicile in LA Under Amendment - Must have been admitted for permanent residence - If yes, then he has to domiciled in that state Would it change the result? No, it wouldn’t change the results; he would acquire the capacity to acquire an American domicile, but it won’t happen unless he changes it Court’s first reason would be changed—he could acquire a domicile in an American state Court’s second reason would not change—he was still only temporarily there as a student Where would his domicile be? He would still be domiciled in France; it was his domicile of origin Statute only applies to people who have been admitted for permanent resident Not for naturalization purposes, just for jurisdictional purposes Why did Congress enact this change? To limit diversity jurisdiction Intent of Congress was to restrict the reach of diversity jurisdiction

What about dual citizenship? We consider only their status under American law; do not consider if they are citizens of other countries

Pp. 112-113 Question 5 While restricting diversity in one situation, did they inadvertendly expand it in other situations? Neither P nor D was an American citizen No alien v. alien actions Article III, Section 2 says that and so does 1332a 3rd Circuit took a plain reading of it whether congress could do it where there is no diversity Congress has said and can substitute minimal diversity for total diversity Read 117-121 Will take up supplemental jurisdiction


SUPPLEMENTAL JURISDICTION Note the confusion in terminology Statute calls it supplemental jurisdiction Prior to enactment of statute, there was no statutory basis, it was a judge-made doctrine One reason to enact statute to get ride of terminological confusion—ancillary v. pendent

UMW V. GIBBS Most significant Supplemental Jurisdiction case Gibbs (TN) v. UMW ( Gibbs asserted boycott was a violation of Section 303—specifically confers subject matter jurisdiction on federal courts for actions on boycott Gibbs also asserted a claim for unlawful conspiracy under TN common law Gibbs prevailed at jury trial Verdict set aside b/c not all elements of boycott under federal law, but allowed verdict under state law to stand Let’s assume Gibbs brings his action in District Court in TN for $1M Court I—Section 303 Count II—TN common law claim He says he is a citizen of TN, and UMW is a citizen of a state other than TN Does US District Court have jurisdiction over case in that posture? YES, Federal jurisdiction over Count I and diversity jurisdiction over Count II if they were split up If he can pursue them in federal court in two lawsuits as a matter of subject matter jurisdiction, nothing changes if he puts them together, there is an independent jurisdictional basis for both We might decide he can assert each in federal court, it is no good to assert in one lawsuit, like it makes it too complex, jury confusion at trial FRCP 18a Joinder of Claims and Remedies Any plaintiff may join any claims he has against a single defendant in a single lawsuit if he wants to Why did he not allege diversity jurisdiction to give himself necessary jurisdictional basis? If he did, we wouldn’t have to talk about supplemental jurisdiction He didn’t b/c diversity didn’t exist between himself and UMW Why not? Labor unions do not incorporate; unincorporated associations    Note 6, p. 269  For purposes of diversity jurisdiction, unincorporated associations will be considered by residency of its members Unlike corporations where we have a statutory definition of state citizenship Problem as to Gibbs Count II, we have action w/in citizens in same state, so no diversity and a claim which doesn’t arise under federal law 44

p. 121 Scenario 1 Same as Gibbs

What is the nature of the relationship? What kind of relationship has to exist between federal claim (claim as to which federal court has basis for jurisdiction, whether it be federal question or diversity) and that one where this is none HYPO: Cannon buys power mower and goes to mow and mower goes bizurk and cuts off his foot and chews up his shoe and bottom of his pants; Cannon lacks diversity but brings action in federal court; complaint has 2 claims (1) bodily injuries for $1M, and (2) seeks to recover for damage to shoes/trousers ($100) Allege as a basis for recovery negligence on part of manufacturer of power mower and strict liability in tort Defendant files motion to dismiss property matter claim for lack of jurisdiction—does court have supplemental jurisdiction over property matter claim under Hurn? Claims have to be considered one action; if two completely distinct, then no supplemental jurisdiction How you define a cause of action Is it a single cause of action under Hurn or two separate and distinct causes of action? Violation of one legal right Under Hurn court would not be able to exercise jurisdiction of separate causes of action for bodily injury and property What had changed between Hurn and Gibbs? 1. Adoption of Federal Rules of Civil Procedure a. Dropped terminology cause of action for claim 2. Considerable confusion a. In applying the Hurn test b/c it is so elusive, abstract and conceptual i. What does cause of action mean? What is now the test under Gibbs? Both claims have to arise from the “common nucleus of operative fact” We would expect the claims to be exerted under a single lawsuit Clearly Cannon’s case would rise under a single lawsuit b/c it came from a single fact Why would we expect a plaintiff who sustained bodily injury in a car accident, where car was also damages, to exert both claims in a single lawsuit rather than different lawsuits? It would be inefficient to have two lawsuits, rather than getting rid of it in one Judicial economy! If claims do arise out of common nucleus of operative fact, then they probably share facts That is policy basis for rule of supplemental jurisdiction Justice Brennan says judicial efficiency and fairness pp. 302-303 Law review quote about policy basis for doctrine of supplemental jurisdiction Another policy basis for supplemental jurisdiction 45

If we didn’t have it, litigants entitled for federal claim, might be discouraged from entering that forum and enter state court b/c they could do both claims in state court Judicial economy and efficiency is good, but we have been told over and over again federal courts are courts of limited jurisdiction, but aren’t we going outside when we allow those claims? No diversity jurisdiction and no federal question—hence problem of supplemental jurisdiction Aren’t we stretching boundaries and can we do that? Justice Brennan says cases arises out of Constitution and relationship between that claim, jurisdictional sufficient claim and state claims, permit conclusion that entire action comprises one constitutional case (Article III, Section 2) If state law claim is close enough to federal, we can view them as the same case for constitutional purposes Exercise of supplemental jurisdiction even where it exists is a matter of discretion and court has discretion to decline to exercise it, where declining to exercise it would be justified by considerations of judicial economy, fairness, etc. Gives 4 Examples where district court judge could use discretion to decline exercising supplemental jurisdiction 1. Dismissed before trial, state claims should be dismissed as well 2.

OWEN EQUIPMENT AND ERECTION COMPANY V. KROGER Ms. Kroger (Iowa) v. OPPD (NE) v. Owen Ms. Kroger then v. Owen OPPD “impleaded” Owen as a 3rd party defendant under FRCP 14a 14a Third Party Defendant OPPD said Owen was “liable over” to us for all or part of money required to pay to plaintiff OPPD got out of case from motion for summary judgment granted SO THEN IT’S  Kroger v. Owen Does Kroger’s claim against Owen arise out of same transactin or occurrence as her claim against OPPD? If it does not, rule doesn’t permit her to bring claim Transaction/occurrence is Kroger’s death Clearly she satisfies requirement of FRCP 14a, which says she could amend complaint to assert claim against Owen Court says rule 14a allows a claim against 3rd party defendant, doesn’t say if has to have independent diversity jurisidciont claim 46

Rule 82 Rules won’t be construedc to extent/limit the jurisdiction of district courts Clearly this means subject matter jurisdiction, b/c rules do limit in personam jurisdiction Congress has reserved jurisdiction to itself FRCP have nothing to do w/subject matter jurisdiction Therefore what we are dealing with is a two step process (1) procedural—do rules permit this to be done; do rules permit Kroger to assert claim against Owen directlyyes; but that ssumes that it is a claim proper to federal subject matter jurisdiction, to decide if it is is an inquiry separate from the rules, (2) FRCP can’t extend/contract federal subject matter jurisdiction Why can’t Kroger invoked supplemental jurisdiction? Did her two claims arise out of a common nucleus of operative fact? Majority does not dispute Kroger’s claim against Owen rose out of same fact as claim against OPPD Gibbs didn’t have a claim under federal law and no diversity, but a federal court still decided his state law claim Court says Gibbs didn’t end inquiry Bioggs gives us constitutional test There also must be a statutory inquiry, also and this is where majority/dissent disagree Majority concludes Kroger flunks this statutory test b/c the case violates 1332a (the only relevant statute); congress has repeatedly amended 1332a and never tried to change requirement of diversity jurisdiction No, you would not have had total diversity, only partial diversity if they had been codefendants from the beginning Kroger probably knew if she sued OPPD that they would bring in Owen Majority’s conclusion is if Kroger can wait and see who defendant impleads, and then amend her complaint to assert her claims to directly, it’s just as if she had sued them in the first place; there is no principle reason she could not have done that in the first instance If Kroger had sued both of them as codefendants in original complaint, what would have happened? Case would’ve been dismissed for lack of subject matter jurisdiction District Court would be obligated to do that on its own discretion even if parties didn’t file motion to dismiss Kroger would jstu bring her action in state court then So what would’ve been practical if she joined both defendants in the beginning If Kroger wants to pursue claim against Owen—state court Kroger’s claim against OPPD—would stay in federal court Kroger v. Owen would be split off and sent to state court Justice Stewart/Brennan

Could Mrs. Kroger assert a claim directly against Owen, was question before court Supreme Court in Kroger held Mrs. Kroger couldn’t invoke supplemental jurisdiction (ancillary) as a basis for jurisdiction 47

Wasn’t it apparent court lacked subject-matter jurisdiction If court lacked it over Kroger v. OPPD, why didn’t OPPD lack it over Owen Supreme Court said it’s different for OPPD over Owen b/c OPPD is a defendant and Kroger was a plaintiff Claims asserted by defendants: impleader, cross-claims, counterclaims Court said non-federal claim was asserted by Plaintiff who voluntarily chose federal court Do we treat supplemental jurisdiction different from defendant as opposed to plaintiff? Plaintiff has a choice, Defendant doesn’t b/c of lack of diversity and subject-matter jurisdiction, OPPD couldn’t bring Owen so where does that leave OPPD? If it wants to pursue claim against Owen, it will just have to bring a separate same controversy action in state court This is why we have 14a to resolve it all in one lawsuit instead of a separate lawsuit

LAW OF SUPPLEMENTAL JURISDICTION 28 USC 1367 Judge-made law of supplemental jurisdiction by cases like Gibbs, Kroger, Finley, Aldinger (pp. 304-308) These were leading SC decision when Congress came in 1990 to enact 28 USC 1367 Statute is controlling no matter what SC said in prior cases, extent that SC was laying down constitutional rules Congress is free other than that to change it Legislative histories weighed heavily than remarks made on the floor p. 134 Question 1 Statute says it must be part of the same case or controversy Justice Brennan when answering question by saying if they rise out of the common nucleus of operative fact Since it codified his language, it intended to codify his intention Cases cited at end of 134 say 1367 was intended to codify Gibbs test Congress has laid down a rule that courts can exercise supplemental jurisdiction to the fullest extent possible and that extent is defined by Gibbs p. 135 Question 2—Given 1367, in civil actions commenced on or after December 1, 1990, is it good law? What is the test for supplemental jurisdiction under 1367? Under what circumstances can a court exercise jurisdiction in absence of diversity citizenship? When they are of the same case or controversy under Article III of US Constitution Sounds like Gibbs “common nucleus” Coincidence of language suggests that what they had in mind Does legislative history shed any light on this? Subsection (a) codifies scope of supplemental jurisdiction first articulated in Mine Workers v. Gibbs a.) Gibbs—1367a codifies Gibbs so YES b.) Owen v. Kroger—NO (rule 14 exception 48

a. Did Kroger’s claims come out of same accident? YES b. Under 1367b, NO b/c district court supplemental jurisdiction language exception over any civil action based on 1332 (diversity/alien actions) i. Footnote 16 says Subsection (b) bars use of diversity jurisdiction in certain situation and the net affect of this is to implement rationale of Owen v. Kroger ii. If Congress had gone the other way, what would it have to change to overrule Kroger? 1. If it deleted Rule 14 1367(a) says federal courts can exercise supplemental jurisdiction to the fullest extent constitutionally possible (nucleus of operative fact) (b) says there are certain diversity exceptions c.) Finley—NO, section a says if supplemental jurisdiction is met, it won’t be defeated merely b/c it involves joinder/intervention of additional parties a. Finley didn’t have option of suing anyone b/c of Federal Torts Claim Act (if you want to sue US for a tort, you have to sue in US District Court), but private defendants were not diverse i. SC said supplemental jurisdiction didn’t apply b. if her claim against private the same i. Yes, same as Kroger’s c. subsection b doesn’t apply b/c claim wasn’t founded solely on diversity; had to sue in federal court b/c of Federal Torts Claim Act d. reason for writing this statute was to overrule Finley d.) Aldinger—NO, same structure as Finley, jurisdiction founded on a federal statute p. 135 Question 4 Justice Blackman Justice Brennan—it codifies his decision in Gibbs, but still was a dissenter in Kroger

REMOVAL JURISDICTION OF FEDERAL COURTS Permits defendant to reverse plaintiff’s choice of forum Plaintiff who has played by jurisdictional rules and brought it somewhere where he could bring it and we allow defendant to reverse proper choice of forum and to shift it into federal court Lots of defendants take trouble to remove cases and lots of plaintiffs fight about it and try to get it shifted back p. 146 QUESTIONS Question A. P (Pa) v. D comp (NY) in a NY court 49

1447c—motion for remand must be w/in 30 days after filing of notice of removal Applies to anything except subject-matter jurisdiction Court shall remand if at any time prior to final judgment it appears it is a case not of subject-matter jurisdiction Plaintiff has waived right to remand b/c he waited for longer than 30 days, unless he is claiming something other than subject matter jurisdiction Plaintiff is always the one who moves to remand Why would plaintiff argue it needed to be remanded? 1441(b) “Any other such actions” means diversity actions Diversity action cannot be removed into US district court from state court if a party is a citizen of state where claim was brought 1441(a) says any civil action brought in state court of which district courts of US have original jurisdiction may be removed Plaintiff in this question could have brought this suit in southern district court of NY—there is total diversity, jurisdictional amount 1441(b) limitation says action once brought there cannot be removed, but is that a jurisdictional limitation? If it isn’t subject-matter jurisdiction, then it is non-jurisdictional and subject to 30 day limitation When a defendant removes case to district court, judge never sees it and you don’t need permission to remove it to district court, you file a removal (1446), notice is sent to state court and it is effective and case is removed Defendant can file a motion for remand and then the court gets involved This case was improperly removed Removal violates limitation imposed by 1441(b) b/c D is a citizen of NY; but if plaintiff waives that objection by not moving w/in 30 days Overwhelmingly, federal courts have said no, this is not a jurisdictional limitation b/c statute (1441a) speaks in terms of original jurisdiction of which district courts have original jurisdiction Yes 1441b imposes a limitation Would it be a basis for remand if timely raised? Yes 1331 & 1390 diversity statutes Could they have sued and brought action against D in a federal court in Eastern District in PA? Yes, P could’ve done that, he would’ve had to have in personam jurisdiction over D and eastern district would’ve had to be a proper venue under proper venue statute Plaintiff can sue D in P’s homestate in federal court, but if P sues D in D’s homestate in federal court, D cannot remove Question B. No, b/c it’s a federal question Question C. US courts of appeals, like us district courts, are courts of limited jurisdiction, they have what subject-matter jurisdiction Congress have given them 50

1447(d) order remanding case to a state court from which it was removed is not reviewable on repeal or otherwise Only applies to orders granting remand Suppose motion for remand is denied, can you appeal to Court of appeals? Not until you get a final decision Order granting motion to remand is a final order in federal court and not appeallable at any point in the proceedings Any argument to be made on the behalf of the defendant that maybe 1447(d) isn’t as absolute as it reads? If it was remanded under 1443 Civil rights cases, is subject to appellate review Thermatron opinion, US SC said despite language of 1447(d), we have a judge-made exception 1447d must be read in junction w/1447c, and it is only where the remand order issued under 1447c and invoking grounds specified therein are immune from review under 1447d only if District court based and stated its order on one of the grounds innumerated in 1447c that it is immune from appellate review Can we bring, if we are representing defendant here, this w/in the scope of the Thermatron exception to 1447d? Why did District Court remand? B/c of forum selection clause in the contract to litigate only in state court Is that a 1447c ground? Anything other than subject matter jurisdiction and subject matter jurisdiction Doesn’t that make Thermatron a dead letter? Congress amended statute that 30 day limitation for filing a motion to remand was applicable to a motion to remand anything in the universe EXCEPT subject-matter jurisdiction Therefore it is not a 1447c clause The word “defect” other than lack of subject-matter jurisdiction… is there a limitation implied? It no longer has to be a defect in removal procedure

p. 146 Question C. Does court of appeals have jurisdiction over appeal? Does this case fall under Thermatron exception, 1447d, not reviewable on appeal or otherwise rule? 3rd circuit’s answer in Foster, typical answer of courts under statutory language from1988-1996, remand based on subject matter jurisdiction or procedural effect remand based on forum selection clause did not fall into either of these categories, not a jurisdictional problem Procedural Defect Forum Selection Jurisdictional

Under Thermatron, not sheltered from appellate review NOW, we have… 51

Defect other than Subject matter jurisdiction


So Thermatron would be a dead letter, not b/c it’s been overruled, but there is nothing to apply it to, if we perceive 1447c as occupying entire universe of grounds for removal So what if moved from state court to district court and judge wanted to remand it b/c he didn’t like the plaintiff’s attorney, would court of appeals have jurisdiction to hear an appeal of that order and reverse it No if 1447d occupies the whole universe, that order would not be reviewable If district court judge, today, entered remand order from Thermatron for same reason, would it be wrong? Yes Would it be unreviewable under current reading of 1447c? Yes Is there any other way of reading new 1447c? The word “defect”—any defect other than lack of subject matter jurisdiction Amendment to 1996 statute eliminated procedural defects, but still left he word defect… is there some implication in that? What would defect be? Doesn’t have to be a procedural defect, it must b e a defect to be immune from appellate review 3rd circuit thinks forum selection clause is not a defect for purposes of 1447c and remand order based on forum selection clause continues to be subject to appellate review b/c it is in 1447c ground b/c it is neither jurisdictional in nature and is not a “defect” 1447c talks about “any defect” motion to remand based on anything other than subject matter jurisdiction had to be filed in 30 day limitation any motion to remand not about subject matter jurisdiction has to be made in 30 day limitation any defect means any defect other than subject matter jurisdiction QUERY: Let’s assume 3rd circuit says this case is exactly like Thermatron, as we said in thermatron under old statutory language, and under present statutory language, forum selection clause is not a defect, no matter how you define defect, therefore this remand based on forum selection clause was not based on 1447c grounds, therefore under Thermatron, subject to our appellate review; how would it come out on the merits? Argument for defendant that this is not a proper basis for remand? Defednat only has right to remand if he meets statutory requirement; Court of appeals said we can’t review this b/c it is not grounds for remand subject to review District court has authority to remand on one of those grounds 1447c is controlling statute grounds for remand announced in 1447c are exhaustive; district court can only remand on one of those grounds if you accept its exhaustive, then by act of saying we have jurisdiction, since it’s not authorized by statute, its wrong and we must reverse the remand Note 6 p. 145 Cohill—to dismiss claims so plaintiff has to go back to state court and refile would be inefficient; district court can remand to state court based on pendent jurisdiction 52

Is this a narrow exception to Thermatron? Or does it contain broader implications? If language changes, analysis has to change as well and argument would be we no longer have limited categories for reasons of remand; we used to limit to lack of jurisdictional and defect This is unresolved

p. 147 Question D.A. Does court of appeals have jurisdiction in face of 1447d? Why do you think district court judge granted motion to remand? Where there are multiple defendants, they all must manifest assent to removal notice It can’t be done by just one defendant In this question, only B filed removal, C didn’t file or assent It was improperly removed Could plaintiff have brought action in federal court? YES Plaintiff has waived this defect for failing to remand w/in 30 day period Yes, therefore district court judge erred in granting this remand But does court of appeals have jurisdiction; they can’t conclude court erred; under thermatron, does district court have jurisdiction? If you are representing plaintiff and want to get appellate review, you can’t get it by arguing it was wrong even though 30 day rule was violated, is there any basis for arguing this judge remanded on ground not authorized by 1447c? Does 1447c say a district court can remand for defect other than lack of subject matter jurisdiction Can the first line be read to mean 1447c doesn’t authorize remands on dfects unless it has been made timely; 1st sentence is tied to a motion to remand, can we read 1447c to say district judge shall remand for subject matter jurisdciont at any time prior to judgment, district court will also have power for any other defect provided that a timely motion is filed

Question D.B. Can District Court judge do it on his own notion? If a timely motion is a pre-requisite, if court lacks power to remand ifit wasn’t made timely, then it should lack power if no motion is made To have a remand based on anything other than subject matter jur, there must be a timely motion filed asking for it w/30 days; if it is not, and court grants remand, under Thermatron, it is subject to appellate review and since by hypothesis, cout is acting outside of statutory powers, it is subject to reversal

p. 147 Question E. You need to know where defendant business has its principal place of business 53

The action would not be removable if D corporation has its principal place of business in the state of Pennsylvania (P’s state) or the state of New York Under 1441(a) not removable But if it’s in NY for jurisdiction, it’s not removable under 1441(d) b/c it’s diversity jurisdiction and could be brought in state court Question F. Under 1446(b) defendant usually has 30 days to remove an action B has gone beyond 30 days, C has acted promptly Action is not removable unless all def’s join in notice of removal (here they are unanimous, but B has joined in after a time where he has the right to remove) If C wasn’t here, B wouldn’t be able to remove If we start 30 days when B is served, then he’s waived his right and C’s right Do we base the 30 day clock on service of B or C? Lower courts are divided 5th Circuit follows the first-served rule Begins when B is served; and if he doesn’t join, C can’t remove the action and effectively loses his right to remove 4th Circuit says new defendant C is entitled to his 30 days and he can remove in that period provided that the other defendant is willing to remove END OF REMOVAL AND SUBJECT MATTER JURISDICTION


Has to be viewed together w/subject matter jurisdiction Dictated by notions of fairness for resolution of this kind of lawsuit Most basic point is  Venue is statutory; statutes or at least written rules In federal system, it is statutory, Title 28 In PA, it’s in Pennsylvania Rules of Civil Procedure There are some exceptions: REASOR-HILL CORP. V. HARRISON Judge-made rule of venue that goes far back into common law Local action rule—actions concerning real property must be brought in jurisdiction where property is located Action of replevin—action to recover possession of some chattel; seeking decree awarding possession of a chattel; it is commenced by getting a writ for sheriff to seize a chattel; “local action”


Actions of ejectment, actions to quiet title, actions to foreclose mortgages—conflicting claims to interest in the land Local actions—must be brought where the land is located Most of the evidence/witnesses are concentrated in area where property is Recorder of Deeds is a local office No dispute about this Periperhal cases cause the problem EXAMPLE: Action for trespass to land; no conflict about who owned the land in Missouri; what was sought was a money judmgnet for damages to crops growing on Missouri land; do we apply the local action rule in cases of this kind? If we do, then our plaintiff has a problem If AK Supreme Court had followed majority rule and said it was a local action What would you advise? Bring action in Missouri where the land is located But pesticide manufacturer was not subject to jurisdiction in personam in Missouri, not authorized to do business there This problem wouldn’t present itself in the core cases In the core cases, there is always a forum available to resolve the dispute; this is not true in trespass to land cases Most famous trespassing case: Livingston v. Jefferson LA purchase, Jefferson directed officials to seize land belonging to Livingston (LA); when Jefferson retired (VA), Livingston invoked diversity jurisdiction to sue for trespass Court invoked common law and the property was in LA, and Jefferson had never been there nor was ever going to be there, so they couldn’t serve him and case couldn’t be brought Court in Reasor-Hill refuses to extend concept to this case, but Restatement takes Reason-Hill exception Head count of recent decision, majority account is that it does The change that is significant, problem w/local action rule is that it leaves the plaintiff w/out a forum b/c in the one forum he can’t get jurisdiction over the defendant, the long-arm has gotten condsiderably longer We have relaxed the rules of in personam jurisdiction, it’s easier to get long-arm jurisdiction, so there will be fewer cases in which the plaintiff can’t get long-arm jurisdiction or in personam jurisdiction EXAMPLE: What is likelihood product made in Missouri, caused damage in Missouri, that it wouldn’t be able to have suit in MissourI/ Low Reasor-Hill was not a question of venue It would be a question of subject-matter jurisdiction If there is a jurisdictional problem it’s not in personam, so it’s subject-matter What suggests we are talking about sj jurisdiction and not about venue at all? Could any AK court decide this case? Not in personam jurisdiction problem and not venue problem, so it must be subject-matter jurisdictional problem 55

It’s both venue and subject matter jurisdiction Within a particular jurisdiction if we have a rule this action in this jurisdiction must be in A and no B, that is a rule of venue as between counties, statutes are required as it operates between states, that can’t be a rule of venue, it’s a rule of subject-matter jurisdiction  depending on what mode you are operating in, decideds if it’s a venue question or subject matter jurisdiction question Improper venue as a defense, if you don’t raise it, you waive it Subject matter jurisdiction is not a waivable

p. 167 A (NY) v. B (NJ) + C (Dist of PA) Accident occurs in MD 1(a). No 1391(a) One difference between A and B in this stauttue and it arises from ambiguity in a word 3 possibilities Does it qualify as proper venue under 1? 2? 3?

p. 167 Question 1.a. If motion is granted, A has serious problems b/c he is now out of court and if he files in a correct venue, he will find his action is barred by statute of limitations Under 1391a, we do not have a correct venue? NO 1. Residential: Southern District of NY  Neither defendant resides in southern district of NY, no residential venue 2. Transactional: No actions in NY that gave rise to claim, all relevant evidence happened in MD 3. “Fall-back”: C does business in NY, so might be subject to jurisdiction in NY; B has never even been to NY and drives trucks for C, we have no evidence he was even there a. Would we have transactional jurisdiction in MD? 56

i. Then 3 has no application and that’s why it’s called “fall-back”

Question 1.c. Federal courts have subject matter jursidciton over A’s claim b/c it is a diversity action In what federal court can A maintain that action? Eastern district of PA—residential We have an appropriate transactional venue in MD What else do we need to know about MD to know if A can bring his action there? Does MD have a long-arm statute to reach B and C… If not, it coldn’t be maintained in a district court in MD MD seems to be only appropriate answer at this time To defeat diversity jurisdiction, B must have principal place of business in NY Two requirements: 1. In personam jurisdiction—is there an available long arm statute 2. Whether it is a correct venue MD is the only federal forum open to this case What if A (NY) and B (Scranton, PA) and C (Villanova, PA) Under 1391a, we have now added two districts as appropriate venues—Middle Dist of PA, Eastern Dist of PA AND MD is still available as transactional venue In either middle or eastern district of PA would satisfy requirements of venue and jurisdiction p. 168 Question 1.d. Could not be brought under 1391a1 b/c they all live in different states Could not be brought under 1391a2, so no transactional venue, b/c all transactions occurred in Canada Foreign based cause of action Triggers fall back clause 1391a3 They have to have personal jurisdiction over any defendant at the time the action is commenced C lives in Villanova in Eastern District of PA, subject to personal service at any time *Action is commenced in federal courts when the complaint is filed w/the court * Any defendant must be subject to service of process when complaint is filed and action is commenced Any defendant is subject to personal jurisdiction when action is commenced and that is enough to make it “fallback” under 1391a3 When is the only scenario when we need to use “fall-back” under 1391a3? You can only invoke C if there is no other district in which the action can be brought If you have a domestic cause of action, you will have transactional Subpar 3 is only when there are multiple defendants, not all living in same state, and a foreign based cause of action 57

There should be at least one federal forum open for all federal claims under federal law 4k2—plug jurisdictional gap for service of process in omni case Question 2. No transactional venue For residential—would need to know if D had sufficient contacts w/eastern district of PA to subject it to jurisdiction Usually, when we talk about sufficient contacts, we are talking about the state Venue questions turn on fact—what kind of contacts defendant has to determine venue questions Incorporate law of jurisdiction into law of venue Have to look at Eastern District of pa like it was a separate state, would there be jurisdiction

Final  bring statutory supplement, can bring casebook, notes, outlines, etc. student prepared, but NOT commercial p. 168 Question 3. Would 1391(b) amendment change Leroy? Residential venue (a) would still be unavailable, defendants are not residents of Texas Court in Leroy said no, northern district of TX is not where claim against OH defendants arose What events or omission giving rise to Great Western’s claim against ID defendant occurred in Northern District of Texas? Court of Appeals said under 2nd relevant test that claim arose in Dallas b/c that is where ID officials invalidly prevented Great Western from initiating a tender offer for sunshine Supreme Court uses the word “impact” and reject Court of appeals reasoning claim arose in Dallas and that is where ID statute had its allegedly unlawful impact; injury defendant complaining about; SC said it was not enough to make ND of TX, Dallas, place where claim arose If that was the only relevant event that occurred, it remains that way under the new amendment to 1391 Is it enough to satisfy the new statutory language? B/c plaintiff felt impact of defendants wrong in Northern District of TX that is a substantial part of the events or omissions giving rise to the plaintiffs claim? 3rd Circuit court puts weight on the word “substantial” If plaintiff did suffer injury as a result of what defendants did in ID, would a claim have arisen at all? 1391(a)(2) seems to focus on where the defendants did something/failed to do something, rather than on the results to the plaintiff 1990 amendment broadens the test ***New statutory language says “a” judicial district in which a substantial part of events giving rise to the claim arose—intended to broaden the test, there may be more than one*** When can we say on a particular set of facts that a substantial part of facts or omissions arose in a particular district? Plaintiff suffered his injury there and isn’t that a substantial part of what gave rise to his claim 58

BATES V. C&S 2nd Circuit saw it as an easy question  statute protects plaintiffs from a certain kind of harassment by mail 2nd Circuit says statute has changed the law in some respects Leroy remain important sources of guidance, so maybe Leroy still has some general relevance in construing the new statutory language; we must look at Leroy’s rationale, not just specific holding Why was court in Leroy disturbed by decision of lower courts? Disgruntled investors scattered all over a50 states who are unhappy b/c they couldn’t take advantage of the tendered off could have sued the state officials in their home states What follows if you adopt a rule that says “impact on the plaintiff” is a substantial part of events or omissions giving rise to the plaintiffs claim Plaintiff can always sue in his home district, under that line of reason Large class of lawsuits where if plaintiff suffers injury it’s where he is Economic injury, not physical injury, to the plaintiff—has to be where he lives, where else could he suffer economic injury? Why do we have venue statutes? Purpose is to protect the defendant against risk plaintiff will select an unfair or inconvenient place for trial For that reason, in non-diversity cases, congress has generally not made home of plaintiff the venue Up to 1990, there another venue in diversity only, the district where plaintiff lived if all parties lived in same state Plaintiff’s district of residence is usually not an option for venue If you answer QUESTION 3 in the negative Could it successfully invoke “fall-back” venue? NO, b/c there is another district in which action can be brought—Idaho, both as residential and transactional, defendants do live in ID and did acts which allegedly injured plaintiff, ID defendants are subject to service of process Would it still be appropriate if ID, NY, nor MD had a long-arm statute? TX had a long-arm statute that would reach the three defendants Those districts would not be open to Great Western b/they could not obtain in personam jurisdiction Is there a chance fall back could be enacted for a domestic action?? It can’t be brought in those 3 state b/c they can’t get personal jurisdiction YES ND of TX MIGHT be an appropriate fall-back venue 1391(b)(3) says defendant is found and 1391(a)(3) says defendant subject to personal jurisdiction found has been read to mean not long arm service

Court has subject matter jurisdiction, is able to obtain jurisdiction over defendant, has appropriate venue under venue statute, yet it seems to result in action being brought in an inconvenient forum Court can decline to exercise its jurisdiction 59

** MI does not recognize doctrine of Forum Non Conveniens GULF OIL CORP. V. GILBERT In most states, PA included, courts cite Gulf Oil Threshold question where def seeks to dismiss on grounds of forum non conveniens, there is an alterniatve forum practically avaialbe to plaintiff to bring the action, b/c the plaintiff could not be said to be acting unreasonably if it is the only forum available Factors of public interest

Forum non conveniens assumes case is in a court that is proper under jurisdictional statutes Gulf Oil says federal courts have power to There must be an alternative forum avalialbe, if there’s not one, then plaintiff could not be said to have acted improperly and no dismall But if there is one or more practical alternative forums then we analyze factors which justice Jackson enurmerated (private/public interest) factors court must balance and come to a conclusion action must be dimissed even though brought in proper forum Jakcson says unless balance is strongly in favor of defendant, plaintiff’s forum should rarely be disturbed (p. 360) He says this in connection w/private litigant interests In state courts in general, Gulf Oil analysis is applied PIPER AIRCRAFT CO. V. REYNO FORUM NON COVENIENS Hartzell moved to dismiss for lack of person jurisdiction or transfer to middle district Piper moved to transfer to middle district Moved to middle district of PA Defendants then moved to dismiss on forum non conveniens SC reinstated district court’s decision dismissing on forum non conveniens grounds You are representing plaintiff, what do you do to pursue against Piper and Hartzell the wrongful death action? - Go to Scotland - Ohio—Hartzell is an OH corporation, you might be able to sue both here - PA—Piper is a PA corporation If brought in PA or OH, it can’t be removed back to federal courts What might be a problem w/bringing action then in a Court of Common Please in PA? Move for Forum Non Conveniens again If state court agrees w/US SC, it will grant motion and dismiss there But there is a substantial risk you won’t Availability of another American forum, while it is there, is no certain 60

Might not be another American forum open and have to litigate plaintiff’s claims against Piper and Hartzell in a Scottish court, if Scottish forum is open to you Note p. 369 Islamic Republic v. Pahlavi All states recognize Forum Non Conveniens differently How can you be certain Scottish courts can exercise jurisdiction? Piper and Hartzell agreed to submit to jurisdiction of Scotland and agreed to waive statute of limitations (note 4, pp. 368-369) District court judge said you could; Court of Appeals disagreed; Supreme Court reinstates District court’s dismissal order What is difference between Supreme Court and Third Circuit? SC says dismissal on forum non conveniens was never appropriate where law in alternative forum would be less favorable to the plaintiff; w/change in forum would come change in applicable law that disadvantages plaintiff SC says it should not be treated as controlling, but it is not even very significant SC does not say possibility of unfavorable change should never be a consideration Cases where remedy from other forum is clearly unsatisfactory Anything other than total unavailability of remedy where we can say there is a remedy there but it is so unsatisfactory, that there is no remedy at all Problem is that it is difficult to imagine what that situation may be Delay, like 25 years in India, is no remedy at all SC says 3rd Circuit was wrong—forum non conveniens is not precluded b/c a change would be disadvantaged to plaintiff, even substantially, change in the law Generally, subject to no remedy at all, that is not controlling or even a substantial consideration Two disagreements about Gulf Oil: 1. Court recognizes real parties in interest are heirs of Scottish decedents and they are all Scottish and so presumption in favor of plaintiff’s choice of forum is entitled to substantial weight and burden is on defendant to make a compelling showing using Gulf Oil factors to rebut that assumption; in a case where those factors balance closely, that is an important consideration; Justice Marshall says not true where real parties are foreign; distinction between resident and foreign plaintiffs is justified; plaintiff’s choice deserves less deference a. Courts since Piper say foreign plaintiff’s choice still has some weight, but significantly less weight b. Balance of witnesses was closely balanced—evidence was in Scotland, but witnesses about strict liability were here Public/private interests factors have balanced closely Where degree of weight you give to plaintiff’s choice becomes very important when balance is so close One other consideration that might account for Court’s decision: Discretion, forum non conveniens is dependant on discretion of courts; it’s not absolute or unreviewable, but it is broad b/c assumption is trial judge 61

is closer to practicalities of the situation and better suited to make those decisions; only should be reversed where there has been a clear abuse of discretion/clearly unreasonable decision


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