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SUBJECT MATTER JURISDICTION - DOC

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					SUBJECT MATTER JURISDICTION
   - Power of a court to hear a certain kind of case. Particularly the power of the
     federal court.
   - Two types of s.m.j.:
         o General s.m.j. broadly defined means that almost any sort of case can be
             heard by that particular trial court.
         o Limited s.m.j. means only particular generic classes of cases can be heard
             by that particular trial level court.
                  For example, Traffic Court has limited s.m.j. – doesn‟t hear murder
                     cases, patent cases, etc.
                  Federal courts have limited s.m.j. over
                          Federal question jurisdiction.
                          Diversity jurisdiction. Under 28 USC §1332(a):
                                  o Amount in controversy >$75K.
                                  o Citizens of different states.
   - Type of law.
         o State law
                  Mostly private law.
                  State SC is the ultimate arbiter of state law issues.
         o Federal law.
                  Comes from Constitution by statute (federal common law).
   - US SC is the ultimate arbiter on federal law questions through exercise of
     certiorari.
   - In order for a federal court to take jurisdiction over a particular case, two things
     must always be met:
         o Sufficient grant of Constitutional authority for the exercise of that
             jurisdiction (under Art. III)
         o There also has to be statutory grounding for federal jurisdiction.
   - Article III
         o Section 1 sets up US SC, leaves the rest up to Congress. “During good
             behavior” gives federal judges a degree of independence b/c, unlike state
             judges, the federal judges serve for life and don‟t have to pander for votes.
         o Section 2 extends judicial power of federal courts to nine categories such
             as “between citizens of different states,” cases where US is a party, cases
             btw two state, and those affecting Ambassadors. (see p.260 for Art. III)
DIVERSITY JURISDICTION
   - Under 28 USC §1332(a), need to have:
         o Amount in controversy >$75K.
                  This amt. in controversy can change at any time b/c Congress has
                     the power to dictate the limitations.
         o Citizens of different states.
   - Strategic views on diversity jurisdiction:
         o It‟s good.
                  Eliminates prejudices against out of state litigants that otherwise
                     would exist in favor of in-state parties.
                          State court judges are elected.
                          Elected  incentive not to disappoint local litigants.
                 Parties have a preference for using FRCP.
                          FRCP = thoughtful and comprehensive.
                          May not be available historically in every state.
                          Uniformity.
                 Federal courts less congested.
                 Historical: Outgrowth of post-colonial America where lenders
                     wouldn‟t extend credit to parts of the country that didn‟t have a
                     federal forum. Diversity jurisdiction gave lenders the opportunity
                     to sue in federal courts, where things would be uniform.
        o It‟s bad.
                 This is a modern, mobile society, and it‟s silly to think there are
                     meaningful geographic biases.
                 Diversity jurisdiction is wasteful and ends up clogging up the
                     federal courts.
                 Inappropriate for federal courts to encroach on state law.
                          Erie doctrine – substantive state law doctrines in cases at
                             federal courts, federal courts required to apply the state
                             law, etc.
                          No expertise that federal court will offer beyond what a
                             state court would offer.
-   Two areas considered to be those “in equity” in which federal courts won‟t act
    even if diversity is present:
        o probate matters
        o domestic relations
-   THREE QUESTIONS:
        o What does it mean to satisfy that there are citizens of different states?
        o How do we assess citizenship for diversity purposes?
        o How do courts assess allegations by parties concerning the amount in
            controversy?
-   QUESTION ONE: What does it mean to satisfy that there are citizens of different
    states?
        o There needs to be complete diversity btw parties. “No diversity
            jurisdiction if any π is a citizen of the same state as any ∆, no matter how
            many parties are involved in the litigation.” Strawbridge v. Curtiss CFMS
            p.260.
        o Proceedings must allege all parties to have diversity. Parties can‟t create
            diversity jurisdiction through consent/waiver. Capron v. Van Noorden, US
            SC p.21 where US SC destroys judgment for ∆ as if case hadn‟t occurred
            at all; π didn‟t allege π to be an alien/out of state.
        o Constitutional Issue:
                 Strawbridge NOT mandated by the Constitution.
                 Interpleader statute USC §1335:
                          Enacted by Congress under authority of Art. III §2.
                      So long as there are two or more adverse claimants of
                       diverse citizenship, then that interpleader suit can proceed
                       in federal courts.
                    US SC has yet to rule if minimal diversity such that §1335
                       provides for is allowed by Art III. §2.
-   QUESTION TWO: How to assess citizenship?
      o Citizenship of persons
             Citizenship at time of filing suit.
             To be a citizen:
                    Citizen of the US.
                    Need to be a domiciliary of a particular state.
                           o Domicile is NOT residence.
                           o Domicile is:
                                    “true, fixed, and permanent home and
                                       principal establishment”
                                    intention of returning to this domicile
                           o Can change domicile:
                                    take up residence in a different domicile
                                       AND
                                    intend to remain there
             Mas v. Perry p.265 where wife‟s being domiciliary of Mississippi
               is not disturbed by her attending college in Louisiana b/c
                    She didn‟t have intention of returning to Louisiana.
                    Even though she was unsure of intent to go back to MS,
                       until you make up your mind, then domicile is where home
                       WAS until you decide otherwise.
      o Citizenship of corporations
             Can be a citizen of more than one state.
             A corporation is a citizen of: White v. Halstead Industries, Inc.
               p.268
                    State in which it is incorporated.
                           o Businesses decide which state in which to
                               incorporate usually for tax purposes.
                           o Many are incorporated in Delaware.
                    State in which it has its principal place of business.
                           o “nerve center” test = where the center of corporate
                               decision making takes place
                           o “muscle/operating assets” test = location of
                               corporation‟s actual place of operation
                                    easier when corporations actually produce
                                       stuff
                                    where they had forklifts, factories, etc.
                           o “total activity” test = both tests put together
             Strategy point: Reason why citizenship isn‟t just place of
               incorporation is b/c it has little to do w/the realities of where a
                 corporation actually does things. Otherwise, we could have huge
                 national corporations being sued only in state courts.
      o What doesn’t have citizenship?
              unincorporated association = not a citizen for purposes of federal
                 jurisdiction but instead consider the citizenship of each of its
                 members
              limited partnership = not a citizen of the state under whose laws
                 it was created but citizenship determined by the citizenship of each
                 of its partners
      o Sometimes, parties try to create diversity to get their suit heard in a
         federal court. Congress has answered this problem w/28 USC §1359,
         which says district court has no jurisdiction if the diversity was
         “improperly or collusively made…to invoke the jurisdiction of such
         court.” Kramer v. Caribbean Mills, Inc. p.269 where π reassigned recovery
         to a foreign company in attempt to create diversity of citizenship.
      o 28 USC §1332(c) = prevents appointment of administrators to create
         (or destroy) diversity.
              legal representatives of decedents = citizens of state of decedent
              legal representatives of infants/incompetents = citizens only of the
                 state of the infant/incompetent.
      o Sometimes, parties try to destroy diversity.
              Distinction made btw real party and formal or nominal party
                 where we can disregard the formal/nominal party for purposes of
                 finding diversity of citizenship. Rose v. Giamatti p.270
                       Real party = Party who has the duty sought to be
                          enforced/enjoined.
                       Formal/nominal party = In legal sense, no interest in the
                          result of the suit.
              Name fictitious defendants.
                       π try to name as ∆ “Does 1 through 10” (as in John/Jane
                          Doe). Abels v. State Farm Fire & Cas. Co. p.270.
                       28 USC §1441(a) = “The citizenship of ∆s sued under
                          fictitious names shall be disregarded.”
-   QUESTION THREE: How to assess allegations and amount in controversy?
      o The sum claimed by π controls as long as it‟s made in good faith. It must
         be a legal certainty that it is less than that claimed in order for the actual
         damages NOT to be as much as the actual damages claimed. A.F.A.
         Tours, Inc. v. Whitchurch p.271 where appellate court reverses dismissal
         of complaint in a case where tour operator profits are hard to determine
         and the amount in controversy claimed is actually possible considering
         many different nuances of the industry.
      o Multiple claims/Multiple parties
              General rule – each π‟s total claim must exceed amt. in controversy
                 requirement for each ∆.
              Aggregating: Zahn v. International Paper Co. p.275
                       Each π can aggregate multiple claims against same ∆.
                          CANNOT aggregate counterclaims.
                  If two πs sue jointly, seeking $80K in damages, this is okay b/c
                     same underlying nucleus.
         o To determine amount in controversy for cases seeking injunctive relief,
             use the value to the π to determine the jurisdictional amount. McCarty v.
             Amoco Pipeline Co. p.276.
         o If damages end up being <$75K, then the district court can deny costs (of
             going to court) to π and actually can impose such costs upon the π. Sort of
             like a penalty for being such a crappy estimator of how much the amount
             in controversy really was for π.
FEDERAL QUESTION JURISDICTION
   - Marbury v. Madison said that there needs to be a Constitutional basis for every
     statute
   - 28 USC §1331 – “The district courts shall have original jurisdiction of all civil
     actions arising under the Constitution, laws, or treaties of the United States.”
         o original jurisdiction = district courts are the place where these question
             have to be raised in the first instance
         o arising under = most interpretation comes up here
   - Constitutional basis for §1331 is US Const. Art III §2 – “The judicial power shall
     extend to all cases, in law and equity, arising under this Constitution, the laws of
     the US, and treaties made, or which shall be made, under their authority.”
   - Marshall states that if there is some “federal ingredient” then Article III is
     satisfied. Osborn v. Bank of the US p.278 in dicta that later became law.
         o For purposes of Art. III §2, the “arising under” language is interpreted
             very broadly.
         o The “Osborn” ingredient test says that jurisdiction exists when it‟s an
             ingredient to the resolution of the suit.
   - Need a well pleaded complaint to show the federal question. Cannot depend on
     possible defenses the other party might raise in order to show that there‟s a federal
     question. Louisville & Nashville R. Co. v. Mottley p.280
   - Even though Osborn‟s “federal ingredient” is enough for Art. III purposes, it‟s not
     enough under §1331.
         o A suit “arises under” a law if that is its cause of action.
         o Grey area? Then it goes to the state courts absent congressional speaking
             to the contrary.
   - Typically NO amt. in controversy at play in federal question jurisdiction.
JOINDER OF CLAIMS AND PARTIES
   - Trend that permits and actually encourages larger suits w/ multiple claims and
     multiple parties.
         o Idea is increased efficiency.
         o Idea is that we can avoid multiple start-up costs associated w/piecemeal
             suits.
         o Avoid determining issues several times.
   - Joinder of claims:
        o Reversing joinder: Under FRCP 42(b), trial courts can sever other
           properly joined suits into separate trials for reasons of fairness and
           prudence.
        o Compulsory counterclaim (FRCP 13a) – Any claim that the recipient of
           the complaint (usually ∆) has against the π.
                Key factors:
                        arises out of the same transaction that is the subject matter
                           of π‟s complaint
                        doesn‟t require inclusion of third parties that the
                           jurisdiction does not have authority over
                Penalty = waiver
                Not compulsory if at the time the action was commenced the claim
                   was brought somewhere else.
        o Permissive counterclaim (FRCP 13b) – Similar to FRCP 13a, but
           situation NOT related to the original suit.
                No penalty for not bringing this counterclaim.
        o Crossclaim against co-party (FRCP 13g)
                Co-party is a party who is on the same side of the “v.” that you‟re
                   on.
                Arises under same transaction.
                Ex: ∆1 sues ∆2. A cross claim under FRCP 13g comes when
                   there‟s a “v” in the case already. It comes btw the defendants, ∆1
                   suing/being sued by ∆2. So π v. ∆1, ∆2  π v. ∆1, ∆2 AND ∆1 v.
                   ∆2.
        o Joinder claims (FRCP 18)
                Anyone who has asserted a claim against a party can join as many
                   claims as he or she has against that party, even if they‟re unrelated
                   claims.
                It‟s not just enough to have a hook under FRCP to properly put any
                   and all claims into the case.
                        Must have Const. basis.
                        BUT, once you do have that claim, you‟re able to join
                           unrelated claims. (Different from FRCP 13b b/c 13b
                           addresses counterclaims, not claims that original π brings
                           against ∆).
-   Joinder of parties
        o Mandatory joinder (FRCP 19)
                These parties “shall be joined.” If not feasible, then court uses
                   “indispensability” test in FRCP 19b.
                Ask three questions:
                        Availability (19a) – Is the party available?
                        Necessity (19a) – Is the interest related to the subject matter
                           such that it cannot be resolved w/o this party?
                        Indispensability (19b) – The party is indispensable if
                           without the individual, the party itself will be dismissed.
                  If Availability and Necessity are satisfied, then party will be
                   joined. If only Indispensability and not Availability, then the court
                   cannot go on adjudicating.
        o Permissive joinder (Rule 20)
                Rule 20a – π can join together or join multiple ∆
                        common question of law or fact
                        claims arise out of same transaction
                Reversing joinder. Rule 20b – Court can separate them into
                   separate trials to prevent prejudice or delay.
        o Interpleader (Rule 22) – Avoids double or multiple liability.
                Okay if claim doesn‟t have common origin.
                Okay if the claims aren‟t identical but are adverse to and
                   independent of one another.
        o Class Actions (Rule 23)
                Used when joinder is impossible.
                Must be common issue of law.
        o Intervening Parties (Rule 24)
                Intervention of rights
                        Statute says so or practical matters dictate.
                Discretionary intervention – Court has discretion:
                        Statute says so conditionally or
                        There is a common question of law or fact
-   One way to join BOTH claim and party
        o Impleading a Third Party (Rule 14)
        o This is both a new party and a new claim.
        o “Arising out of the same transaction or occurrence” test.
        o Both π and ∆ can implead.
                ∆ brings a new party.
                In the event of a counterclaim, π can implead.
        o Combined w/Rule 18 – once one claim passes the “arising out of” test you
           can add others.
-   Interpleader, revisited.
        o A technique where a party is faced w/multiple claimants to a thing or fund.
        o Various potential claimants resolve w/in themselves who really owns the
           thing so that the claimants get their appropriate share.
                Stakeholder = who holds/owns the thing or fund.
        o Strategic GOOD things:
                Avoid multiple related suits  cost effective and time efficient
                Avoid conflicting judgments concerning a property at issue.
                Interesting twist: When properly invoked, it forces all the
                   claimants t litigate in the interpleader forum.
        o Two types of interpleader:
                Rule Interpleader (FRCP 22) – A stakeholder can invoke
                   inerpleader when there are competing claims and the stakeholder
                   there described as the π is or may be exposed to the multiple
                   claimants.
                            $75K or more in value.
                            It‟s not a ground for objection that the source of claim
                             doesn‟t have common origin/aren‟t identical.
                  Statutory Interpleader (28 USC §1335) – Broader scope.
                          $500 or more in value.
                          If there are two or more adverse claimants of diverse
                             citizenship.
                  Key distinctions:
                          Diversity:
                                  o Rule interpleader requires complete diversity btw
                                      stakeholder and putative πs.
                                  o Statutory requires only minimal diversity.
                          The monetary minimum.
                          Rule interpleader‟s service of process limited to the state in
                             which the district court sits (accord. to FRCP 4) unless state
                             law provides for out of state service.
         o It‟s constitutional for statutory interpleader to require only minimal
             diversity. Strawbridge teaches us that minimal diversity IS sufficient. Idea
             that under Art. III, Congress has adopted complete, but that‟s not enough
             to REQUIRE complete. State Farm Fire & Cas. Co. v. Tashire p.671
             where US SC rejects idea that interpleader is an all purpose “bill of peace”
             through which to “solve all the vexing problems of multiparty litigation
             arising out of a mass tort.”
FEDERAL SUPPLEMENTAL JURISDICTION 28 USC §1367
   - When courts can use joinder rules even though they don‟t have jurisdiction for all
     the claims.
   - Broad point: We‟ve got a broad notion of supplemental jurisdiction that‟s
     consistent w/FRCP to the extent of trying whole cases in one action/trial.
   - BEFORE supplemental jurisdiction was available, people who wanted to bring
     both a federal. Q and state law suit either had to
         o bring the two suits separately in separate courts
         o bring them both in state court
                  state courts have concurrent jurisdiction over federal claims unless
                     Congress makes federal jurisdiction exclusive
                  This would run against the primary purpose of federal courts,
                     which is to expound and develop federal law.
   - Two types
         o Pendent jurisdiction – (The claim!) π appends a claim that doesn‟t have a
             basis for federal subject matter jurisdiction (e.g. a state law claim) into a
             claim that DOES have a basis for federal subject matter jurisdiction (as
             long as the claim arises from the same event).
         o Ancillary jurisdiction – (The party!) Jurisdiction allowing federal courts
             the power to hear claims brought by parties other than the original π
             related to the original π‟s original claim.
         o Cases leading up to §1367:
                Even though there‟s no independent basis for s.m.j. over the non-
                 federal s.m.j. claim, US SC says that Article III grants jurisdiction
                 over entire cases and not just particular claims or issues in a case.
                 United Mine Workers of America v. Gibbs p.298.
               Two step test in Gibbs:
                       Court has power to hear related claim if the related claim
                          arises out of the same “common nucleus of operative
                          facts.” (So long as first claim was proper under federal law,
                          diversity, or some other federal ground.
                       Discretionary: Once we‟ve determined court has power,
                          then ask the question whether it makes sense to exercise
                          that jurisdiction.
               Gibbs test refined in Finley v. United States p.306
                       Constitutional power under Art III §2 to hear the claims.
                       Is there a statutory grant of jurisdiction?
               Distinction btw party and claim. US SC refuses to apply pendent
                 jurisdiction to an add‟l PARTY w/respect to whom no independent
                 basis of federal jurisdiction existed. Makes a distinction btw
                 adding a new party as opposed to a new claim. Aldinger v. Howard
                 p.304
               §1332‟s complete diversity requirement still applies. Owen
                 Equipment & Erection Co. v. Kroger p.305 where it‟s later
                 discovered that impleaded ∆ corporation Owen is actually a citizen
                 of the same state as π.
-   28 USC §1367 – Statutory basis for supplemental jurisdiction in federal courts.
       o There is presumptively supplemental jurisdiction whenever Art. III allows
          it.
               Exception: You can‟t defeat complete diversity.
       o 1367a – π brings a proper federal claim or diversity claim, then the federal
          court may hear all claims that are part of the same “case or controversy
          under Art. III.”
               Interpreted to mean the Gibbs test i.e. “common nucleus of
                 operative facts.”
       o 1367b – Supplemental jurisdiction doesn‟t extend to πs in these certain
          diversity cases
               Rule 14 (made party by impleader when brought by π)
               Rule 19 (necessary party joinder)
               Rule 20 (permissive party joinder)
               Rule 24 (intervention)
       o §1367 essentially was the answer to Aldinger, Kroger, and Finley, wherein
          the US SC emphasized that it was no enough for the court to have const.
          power; the court must also have statutory power.
       o The three-part test under §1367 is then:
               Is there a Const. power to hear the supplemental claim? (This
                 cannot be changed by statute – it‟s in the Const.)
                       Gibbs test.
                            Substantial federal question.
                            Common nucleus of operative fact.
                     Is there a statutory grant of jurisdiction over the claim?
                            Such a grant is provided in most cases by §1367 itself.
                            §1367a grants jurisdiction over all related claims that are
                              part of the same “case.”
                                   o Make sure the Gibbs const. test is met.
                                   o Keep in mind that §1367b has some exceptions in
                                       diversity cases
                     Discretionary: Even if 1 and 2 are met, the court must decide
                      whether or not to hear the case.
                            From second part of Gibbs test.
                            Factors to consider:
                                   o Has/will the federal claim likely be dismissed?
                                   o Are the claims tightly connected?
                                   o Will there be jury confusion?
                                   o Is this really a state law claim dressed up like a
                                       federal statutory wolf in sheep‟s clothing?
REMOVAL
  - Removal allows the ∆, after the π has chosen a state court, to second-guess that
    choice by removing some types of cases from state court to federal court.
        o ∆ as well as π should have the option to choose federal court for cases
            w/in federal jurisdiction.
        o removal should be available only in cases that the π could have
            commenced in federal court (true, but there are still further restrictions)
  - 28 USC §1441
        o 1441a – Unless Congress says otherwise, any civil suit brought in state
            court that could have been brought by π in federal court can be removed to
            federal court by ∆ or ∆s.
                 Only ∆ can remove.
                 ALL ∆s must agree to remove.
        o 1441b – If federal Q case as framed by π, ∆ or ∆s can remove regardless
            of diversity of parties.
                 But in diversity cases, if one of the ∆s was a resident of the state in
                    which the suit was brought, you can‟t remove.
                 Also, always remember the amt. in controversy requirement!
        o 1441c – Discretion – Federal court can pick, choose, and remand based on
            when it thinks state law is at the forefront.
  - Removal is only available to the ∆. π picked this forum in the first place and π is
    then stuck w/that forum. Shamrock Oil & Gas Corp. v. Sheets p.321 where ∆ files
    a counterclaim that π doesn‟t want to litigate in federal court.


PERSONAL JURISDICTION & VENUE
PERSONAL JURISDICTION
   - PJ = geographical limitation on the places where a π may choose to sue a ∆ for a
     particular claim.
   - PJ is a right/defense. It‟s waive-able. Contrast this w/smj, which is never waive-
     able.
INTRODUCTION
   - PJ deals with the relationship btw ∆ and state where suit is brought.
   - Historical case Pennoyer v. Neff p.62 states
         o two main principles about whether state can assert jurisdiction over
              another:
                   Each state has exclusive jurisdiction over persons and property
                      w/in its own borders.
                   By negative implication subject to a few caveats, NO state can
                      exercise any jurisdiction or authority over persons or property
                      located outside of its territory.
         o Why? B/c states are of equal dignity and authority, so no state can try to
              assert direct authority over any state and its people.
         o Full faith and credit clause: This is a BIG DEAL b/c under full faith and
              credit clause, every state must defer to and enforce the decisions of other
              courts. That‟s why it‟s important to get this jurisdiction question RIGHT!
         o Pennoyer based on robust view of state sovereignty. This may be a bit
              outdated, though, considering modern realities of the world in which we
              live. Other influential factors:
                   Fairness to ∆ and π.
                   Practicality concerns:
                           rise of automobiles
                           rise of airplanes
                           corporations that have activities that span the nation and
                              affect the lives of individuals across the continent

MODERN PERSONAL JURISDICTION
  - Three types of PJ:
       o In personam – Authority based on person‟s presence w/in the state‟s
           territory or citizenship there.
                authority – over person in territory
                notice – formal personal service required
       o In rem – Authority over the property w/in that state, no matter who owns
           it.
                authority – over property in territory
                notice – attach and publish
       o Quasi-in-rem – Jurisdiction over someone‟s property as a way of forcing
           judgment over the ∆. Get jurisdiction over the property & satisfy the
           judgment up to the value of the property.
                authority – over property in territory
                notice – attach and publish
  - Nonresident use of highways – Hess v. Pawloski p.71 where statute is okay that
    subjects nonresident motorist to local forum.
-   Minimum Contacts: Changing nature of economic institution from agrarian to
    incorporated model addressed in International Shoe Co. v. Washington p.75.
        o In Int‟l Shoe, US SC discards Pennoyer framework.
        o Test changed from Pennoyer‟s “Is the ∆ there in the state?” to “Is it fair
           for this particular suit to move forward against this particular party in this
           particular state?” New two-part test:
                 Minimum contacts w/the state that it would not offend “traditional
                     notions of fair play and substantial justice.”
                          fairness to ∆
                          forum state interest
                          π interest
                          efficiency
                          public policy
                          where witnesses and evidence are
                 Nature and quality of the contacts w/that state.
                          fairness to ∆
                          compelling state interest
                          nexus test: level of related activity at time of action
        o Rationale behind minimum contacts idea:
                 A corporation that chooses to conduct activities w/in a particular
                     state accepts a duty to answer for its in-state activities in the local
                     courts.
                 ∆ chooses to take advantage of the “benefits and protections of the
                     laws” of that state.
        o Specific v. general jurisdiction under Int‟l Shoe.
                 No jurisdiction
                          no contacts
                          “casual” or “isolated” contacts
                 Specific in personam jurisdiction where ∆ is subject to jurisdiction
                     for claims arising out of those minimum contacts
                          single act (their quality and nature)
                          continuous but limited activity (Burger King)
                 General in personam jurisdiction where ∆ can be sued in the state
                     for any claim, even one completely unrelated to its in-state
                     activities.
                          substantial and continuous contacts
                          “so substantial and continuous that ∆ would expect to be
                              subject tot suit there on any claim and would suffer no
                              inconvenience from defending there.” (Helicopteros,
                              Perkins)
-   To get PJ, first need
        o valid Const. basis
        o statutory basis
                 At state level, those statutes are “longarm statutes”
                              comprehensive, enumerated longarm statute – list of factors
                               that the state says will be a sufficient basis for its state
                               courts to assert jurisdiction over a ∆
                              comprehensive, unenumerated longarm statute (broader) –
                               statutes that say they‟ll allow their state boards to assert PJ
                               whenever and wherever. Doing so is permissible under 14 th
                               Amend. due process. Lots of litigation that turns into due
                               process analysis under this statute.

SPECIFIC JURISDICTION
   - Test
           o Cause of action must arise out of or relate to ∆‟s contacts w/the forum
               state.
           o Minimum contacts
                    purposeful availment (Hanson v. Denckla p.93) by ∆ concerning
                       putative forum state.
                            Hanson: Contact btw ∆ and forum state has to be brought
                               about by the ∆ and not by a third party (like the deceased
                               woman in this case).
                            Rationale: Individual ∆ given ability/autonomy to structure
                               its own primary conduct in the world.
                    Mere placement in the stream of commerce is NOT enough.
                       (World-Wide Volkswagen p.97)
           o Discretionary: Policy/Reasonableness
                    burden on ∆
                    forum state‟s interest in adjudicating the dispute
                    π‟s interest in obtaining effective relief
                    efficient resolution
                    evidenciary issues (such as McGee, where the suicide makes it so
                       that maybe it‟s easier to obtain accurate evidence in the state of the
                       suicide)
   - McGee v. Int‟l Life Insurance Company (p.91) – High watermark to assertion of
      PJ by a state. Insurance policy that moves from AZ to TX company by virtue of
      corporate merger and transition. Could the CA courts validly assert personal
      jurisdiction over the TX insurance company?
   - World-Wide Volkswagen v. Woodson p.97 – Mere placement in stream of
      commerce is not enough. Rejects foreseeability of car‟s being there – even though
      it‟s foreseeable that the Audi would be driven in OK, ∆ had no way of foreseeing
      getting haled into court there. Important foreseeability is whether or not it‟s
      foreseeable ∆ will be haled to court there. No purposeful availment. (There might
      be purposeful availment if, say, WWV were to advertise there or something like
      that.)
   - Burger King v. Rudzewicz p.111 – Global long arm statute (unenumerated).
           o Contract itself isn‟t enough. (“Contract plus test” of contract plus other
               things that shows purposeful availment.)
          o ∆ knew that BK was a FL corporation, sought them out, purposely availed
              himself of the business of contracting there.
   -   Asahi Metal Industry Co. v. Superior Court p.121 – Car part maker can‟t be
       brought into CA courts by foreign company to which it sold parts.
          o Even though claim arises/relates to contacts, reasonableness standard NOT
              met.
                   Large expense for Asahi.
                   Little value for CA
                   Diplomatic concerns, foreign companies retaliating against US
                     companies
          o Re: minimum contacts and stream of commerce
                   O‟Connor majority says that knowledge + stream of commerce =
                     NOT enough
                           Test: Did ∆ “purposefully direct” the product into stream of
                             commerce?
                           Purposefully direct: advertising, special manufacturing
                             incentives, product service stations, etc.
                   Brennan‟s concurrence:
                           Stream of commerce + knowledge it‟s being sold = Asahi
                             shouldn‟t find a lawsuit to be a surprise.
                           Test: Does ∆ benefit economically from the retail sale of
                             the final product in the state?
                   Stevens concurrence:
                           The key is volume – high volume of goods = purposeful
                             availment
                           Test: What is the volume of products sold?
          o Circuits are split btw the three tests.

GENERAL JURISDICTION
  - Jurisdiction over a particular person or entity that can be sued on any cause of
     action. No relation to that person‟s contacts w/in a particular forum.
  - Six ways to get general jurisdiction:
         o sue in ∆‟s domicile
         o sue in ∆ corporation‟s domicile (place of incorporation) – Delaware
             popular for incorporation
         o consent – indiv. consents to be sued there
                 Rule 12h2 – PJ is for benefit of ∆  ∆ can waive it.
                 Insurance Co of Ireland v. Bauxites p.177 where making a special
                    appearance sufficed to waive exemption from PJ
                 Forum selection clauses – only when suit is on the contract
                         NOT given full weight of consent, but still factored in.
                         M/X Bremen v. Zapata Off-Shore Co. & Carnival Cruise
                             Lines, Inc. v. Shute – FSC enough to get PJ in that forum.
                                 o Bremen: No reason to think that London court isn‟t
                                     a fair place to litigate.
                                   o Carnival Cruise: There are reasons a cruise line
                                       might want to keep this contractual right to insert a
                                       forum-selection clause.
          o principle place of business Perkins v. Benguet p.131 where general
              jurisdiction found b/c there were continuous and systematic contacts
              w/forum state – usually preferred over place of incorporation
          o ∆‟s presence within the state Burnham (Tag/transient jurisdiction:
              Considered present when in CA for three hours on layover in the airport!)
          o continuous/systematic contacts – controversial
   -   Helicopteros Nacionales De Colombia, S.A. v. Hall p.133
          o ∆ Helicopteros a Colombian corporation hired by a S. American company
              to provide helicopter services. A fatal crash and four Americans die.
          o Perkins test: “Continuous and systematic contacts w/forum”
                   US SC finds no continuous and systematic contacts here
                   Possible contacts rejected:
                           CEO travels to TX for contract negotiation: Contract itself
                              was struck in Peru and was in Spanish with a FSC for
                              Peruvian courts.
                           Houston bank: Bank on which checks are drawn are usually
                              of little consequence to the payee, so accepting checks from
                              the bank shouldn‟t matter.
                           Purchase of helicopter equip. from TX company: Purchases
                              alone don‟t warrant general jurisdiction.
                           Sending personnel to TX for training: Attached to purchase
                              of helicopters, same rationale.

JURISDICTION BASED ON POWER OVER PROPERTY
   - in rem jurisdiction – right to adjudicate property located in the state
   - quasi-in-rem jurisdiction – attach the property in the state and adjudicate up to the
      value of the property
   - Historical: Harris v. Balk 1905, p.152 = classic quasi-in-rem, US SC says that
      debt follows a person anywhere, over state lines.
   - Modern: quasi-in-rem is no more!
          o Shaffer v. Heitner p.154 – Shareholder derivative suit against a
              corporation by a shareholder of ONE share in the corporation. π attaches
              sharea of stock in the corporation that belong to the directors and officers.
              US SC says that b/c in personem and quasi-in-rem are alternatives ways at
              getting to a person, should use same standards for in personem when
              looking at QIR.  Int‟l Shoe‟s “sufficient contatcts” must be satisfied.
          o QIR by definition means that contacts are unrelated to the cause of action
               Int‟l Shoe can never be satisfied.

JURISDICTION BASED ON PRESENCE
   - Most, if not all, states currently allow tag jurisdiction and have done so for a very
      long time.
          o On the other hand, Int‟l Shoe and other cases have moved towards
             minimum contacts & fair play/substantial justice idea.
   -   Burnham v. Superior Court p.167 where husband visits kids in CA for one
       weekend and is served during that visit.
          o Scalia majority
                  The courts of a state have jurisdiction over non-residents who are
                     physically present in that state at the time they are served.
                  B/c of historical understanding and practice, jurisdiction based on
                     presence alone in itself constitutes due process.
                          Historically understood to be law.
                          That‟s exactly what due process is – people are aware of
                            what the law is and have rec‟d due notice.

CONSENT
(see above)

NOTICE
  - Required to be reasonably calculated under all the circumstances, to apprise
     interested parties of the pendency of the action and afford them an opportunity to
     present their objections.
  - Easier it is to give actual notice, the more likely actual notice will be required.
  - Mullane v. Central Hanover Bank & Trust Co. p.191
         o notice by publication in a journal/newspaper NOT sufficient b/c not
             reasonably calculated to reach those who could easily be reached by other
             means
                  reasonable to convey the required information
                  reasonable time for those interested to make an appearance p.194-
                     195
         o What would have sufficed for the known parties = actual notice through
             mail – certified mail.
         o Notice by publication is okay if you don‟t know who the parties are.
         o There‟s a “due diligence” requirement for notice.
         o Notice is important b/c if you have rights you could possibly choose to
             assert in litigation, those rights are meaningless unless you know about the
             suit going on in the first place.

VENUE
  - Waive-able
  - π puts something somewhere but there IS the ability for transfers to go through.
  - IDs geographic place where action will be litigated (more so than PJ)
  - NOT a Const. area – statute or common law created.
  - Venue IDs most convenient forum among those offered by SMJ and PJ.
  - 28 USC…
        o §1391
               1391a = diversity
               1391b = non-diversity
                   1. district where ∆ resides (where resides = domicile
                    accord. to weight of authority)
                 2. district where claim arose
                 3. no district in which PJ exists and 1 & 2 are satisfied, then
                    you can get venue anywhere that you can exert PJ over ∆
          1391c = corporation = resident anywhere there is PJ
    o §1404 = venue transfers btw judicial districts w/in the federal system.
          1404a codifies forum non conveniens “For the convenience of the
            parties and the witnesses and in the interest of justice, a district
            court can transfer any civil litigation to any other district or
            division where it might have been brought.”
          Five things:
                 Where it might have been brought
                        o Hoffman v. Blaski p.352 – where it might have
                             been brought by the π. Court in Hoffman rejects
                             transfer to a forum that requires ∆ to waive.
                 Burden on ∆ to show there‟s a more convenient forum.
                 Balance of conveniences must weigh strongly in favor of
                    transfer – inertia is with the π.
                        o Gulf Oil Corp. v. Gilbert p.359
                                  relative ease of access to proof
                                  costs assoc. w/preparing and willing to
                                     travel witnesses to come to the trial
                                  availability of compulsory process to get
                                     unwilling witnesses to come to the trial
                                  general practical problems – easy,
                                     expeditious, expensive?
                                 
                 3 Factor substantive test:
                        o convenience of parties and witnesses
                        o access to proof
                        o efficiency
                 Van Dusen Rule ( Van Dusen v. Barrack p.356)
                        o State law: Substantive law that would have occurred
                             in the case travels w/the case to the new forum.
                                  Ex: IL law, IL case transferred to FL  IL
                                     substantive law will travel w/the case to FL
                        o Federal law: Does NOT travel in transfer.
                                  Ex: IL to FL  the law that governs in FL is
                                     the law as interpreted by the 11 th Cir. in FL
                                     and NOT the 7th Cir. interpretation back in
                                     IL.
-
    o §1407 – Re: multi-district litigation. Consolidation of civil actions
      involving common questions of fact in different districts.
           o §1441 – Actions are generally removable from one fed. court to another.
             This is covered under Federal Removal Jurisdiction above.

FORUM NON CONVENIENS
  - Allows a court to dismiss a case b/c it is brought in an inconvenient venue.
  - This is a common law thing!!!! That means you go through the twin aims, etc. if
    you‟re trying to argue this is what matters.
  - Burden on ∆ to show why an alternative forum would be better!
  - Factors to consider in transferring from Gulf Oil Corp. v. Gilbert (p.359)
     relative ease of access to proof
     costs associated w/getting prepared and willing to travel witnesses to come to
       the trial
     availability of compulsory process to get unwilling witnesses to come to the
       trial
     general practical problems that affect whether or not trial will be easy,
       expeditious, and inexpensive
     π should not be allowed to harrass or oppress the ∆ simply by putting the trial
       in such an inconvenient place that the trial will be driven by vexation and
       NOT the facts of the case
     familiarity w/the law that applies
     adequate recovery
     public interest factors
            o don‟t want to impose jury duty on community w/o vested interest in it
            o forum selection clauses
            o judicial burden
            o idea that, if the law is going to apply, there are interest in terms of
                convenience, accuracy, and state autonomy
                      having the courts of that state making the state‟s decision
                      other courts will likely be clueless about other states‟ laws
  - When is forum non conveniens used?
       o When transfer is impossible under 1404 and a better venue exists
            elsewhere, forum nonconveniens is used to drop the suit and π brings the
            suit in the alternate forum.
                 1404 only works from one fed. court to another fed. court.
  - Piper Aircraft Co. v. Reyno p.360
       o Brutal forum shopping! – Is this an abuse of the system?
       o US SC says differences in substantive law aren‟t relevant in forum non
            conveniens unless they indicate that the entire claim will be extinguished.




GOVERNING LAW / ERIE ISSUES
PRE-ERIE / INTRO TO CHOICE OF LAW
  - Two types of choice of law.
         o Horizontal: Which state‟s law applies to this lawsuit?
         o Vertical: The choice of law btw two judicial systems in the same territory.
   -   The forum you choose dictates the governing law to some extent:
           o §1331 Federal question jurisdiction:
                     Federal law governs.
                     Federal law is the trump card over any conflicting state law.
           o §1332 Diversity jurisdiction:
                     The law of the forum state governs.
                     Question of meaning  Feds decide it.
           o 28 USC §1652 – Federal Rules of Decision Act
                     The laws of the several states shall be regarded as rules of decision
                        in civil actions in the courts of the US in cases where they apply.
   -   Swift v. Tyson
           o §1652‟s “laws of the several states” = statutes and constitutions, NOT
               judge-made law
           o Two philosophical ideas:
                     An overarching, transcendent body of common law that the courts
                        in the state and fed. systems are trying to divine and expose as
                        THE true common law.
                     Legislature makes the laws, not courts. Courts just discover the
                        law.
   -   This philosophical idea is shown to be open to manipulation in Black & White
       Taxicab Co. v. Brown & Yellow Taxicab Co. (supplement) where π pulls out of
       KY and reincorporates in TN in order to create diversity and get into fed. court. In
       state court, the state court would‟ve thrown out the monopoly contract for
       exclusive pick up/drop off of passengers. In fed. court, however, the fed. court
       had the authority under Swift to reach its own conclusion on the common law
       issue of whether or not the contract should be enforced.


ERIE
   - Erie R.R. Co. v. Tompkins p.374:
   - In diversity cases, federal courts must apply the law that would be applied by the
     courts of the state in which they sit. Rather than create “general common law,”
     their job in a diversity case is to apply substantive state common law.
         o substantive = state court rules, state rules on contracts, everything that‟s a
             matter of state law (can differ from state to state)
   - Easy Erie: Overrules Swift, says Fed. courts will apply state common law. “There
     is no federal general common law. Congress has no power to declare
     substantive rules of common law applicable in a state whether they be local in
     their nature or „general.‟” p.376-377
         o Swift didn‟t work at creating a general common law – state judges went
             off on their own and took their own views instead of following the course
             set out by federal courts.
         o Discrimination in the administration of justice under Swift rule – look at
             the manipulation in Taxicabs case.
         o MOST importantly: Federal judges aren‟t lawmakers – when it comes to
             common law matters not within the delegated powers, the body with the
               authority to make rules is the state, and the state speaks through BOTH
               statute AND judicial decisions.

EVOLUTION OF ERIE
  - Rules Enabling Act 28 USC §2072 – US SC shall have the power to proscribe
    general rules of practice and procedure and rules of evidence for cases in the US
    DCs and Cts. of Appeal. Such rules shall not abridge, enlarge, or modify any
    substantive right. All laws in conflict w/such rules shall be of no further force or
    effect after such rules have taken effect.
  - Substantive / Procedural:
        o Outcome-determinative test in Guaranty Trust Company v. York p.381
            where court says if it would affect the outcome, then it is considered
            substantive.
                  leaves no room for anything procedural
                  York a case where state‟s statute of limitations would bar
                     proceedings but more lenient federal laches approach would allow
                     them. US SC says to go with the state‟s SOL b/c of the outcome-
                     determinative test.
        o Balancing Test in Byrd v. Blue Ridge Electric Cooperative p.386 says
            you may override the state rule w/the federal rule if there is a federal
            interest in maintaining balance and uniformity in practice greater than the
            state interest.
                  In this situation, state courts don‟t control on Q of whether a
                     question is an issue of law (to the judge) or an issue of fact (to the
                     jury).
                          Policy reason for favoring the federal rule? The federal rule
                            says it‟s an issue of law – we‟ll listen to them!
                  Federal interests: uniformity in its decisions, consistency in
                     procedure
                  State‟s interests: sovereignty
                  Outcome-determinative test is still a factor, but Byrd just
                     introduces the balancing test to go with it.
  - Hanna v. Plumer p.392 addresses what happens when fed. court has its own
    procedure already.
        o Measure any rule against the Rules Enabling Act and Constitution.
        o Trying to invoke Erie to avoid FRCP in favor of state rule for serving
            process. Court says NO. FRCP overrule state rules.
        o Is it in direct conflict?
        o Arguably procedural: Where matters fall roughly btw state substantive
            and federal procedural law and are rationally capable of classification as
            either, the Const. grants the fed. court system the power to regulate their
            practice and procedure.
        o Twin Aims of Erie (nonsubstantial/trivial variations in the law are not
            likely to implicate either of these concerns)
                  discourage forum shopping
                  avoid inequitable administration of the law
       o Modified Outcome Test
                  Could application of the federal rule lead to a different outcome?
                  If so, does this fact tend to increase the chances that the twin aims
                    of Erie will be routed?
                  If so, then state law should be applied. If not, then the federal rule
                    is procedural and can be applied in diversity case.
-   Really, there are four types of federal provisions that may conflict w/state law:
       o Fed. Const. provision and state law: Federal const. provision might
            mandate a fed. court procedure that differs from state law.
                  US Const. is the boss of everyone!!! It trumps anything and
                    everything. “Supreme law of the land” – US Const. Art. VI, ¶2.
       o Fed. statute and state law: Federal statute may govern federal practice
            but conflict with state law.
                  Fed. statute is usually the boss on this playground.
                  Q: Is the fed. statute valid/did Congress have the authority to enact
                    the statute?
                         A: Arguably procedural test: From Hanna, Congress has
                            authority if it “falls in the uncertain area btw substance and
                            procedure and are rationally capable of classification as
                            either.”
                  Stewart Organization Inc. v. Ricoh Corp. p.408
                         In conflict:
                                 o State practice that refuses to enforce forum
                                     selection clauses
                                 o §1404a (transfer) that says to look at it on a case-
                                     by-case basis
                         Does Congress have power to enact 1404a? §1404a wins
                            here. It‟s “arguably procedural.”
       o Federal rule and state law: Formal FRCP may conflict w/state law.
                  When FRCP conflicts w/state law, the FRCP applies if it is valid.
                  Valid, according to Hanna, if FRCP is “rationally capable of
                    classification” as a procedural regulation.
       o Federal judicial practice and state law: There may be behavior or
            practice that federal judges develop that aren‟t codified anywhere formal
            (i.e. nowhere in the FRCP or statutes).
                  If the fed. judicial practice purports to est. rules of primary
                    behavior, then invalid against state law. (NO fed. const. power to
                    make this rule.)
                  If fed. judicial practice relates to the conduct of the litigation (and
                    there is thus fed. authority to make this separate rule), then
                    diversity court should apply modified outcome determinative test.
-   Cases that avoid having to choose (and avoid having to find a “direct conflict”
    btw federal versus state):
       o Walker v. Armco Steel Corp. p.402 – FRCP 3 doesn‟t affect state statutes
            of limitation, so we‟ll end our query here.
           o Gasperini v. Center for Humanities, Inc. p.411 – Fed. court sitting in
             diversity should apply different standard of review for jury awards if the
             relevant state law dictates such.
                  Amend. VII doesn‟t preclude appellate review of a trial judge‟s
                     denial of a motion to set aside a jury verdict as excessive.
                  US SC ID‟s state interest in terms of policing size of verdicts – a
                     significant substantive overtone.
                  Gasperini shows us that the balancing approach and
                     accommodating federal v. state interests is NOT dead.
                  Gasperini renews Byrd!

INTERSTATE CHOICE OF LAW
   - When you go into a courtroom, there‟s a body of rules that the state will have that
     as a threshold matter they will use to decide what substantive law gets applied to
     each matter in the case.
   - Klaxon v. Stentor Electric Manuf. Co. – The choice of law rules a federal district
     court will apply in a diversity case.
         o choice of law rules are substantive for Erie purposes
   - Van Dusen v. Barrack
         o The choice of law rules, just like all of the other substantive stuff we
             talked about in Van Dusen‟s PJ area, travels to each forum
         o Dampens forum shopping.


PRIOR ADJUDICATION
   -   Effect that a judgment/decision in a prior case can have on future decisions.

CLAIM PRECLUSION / RES JUDICATA
  - “One bite of the apple.”
  - Big picture thing: Claims splitting. Courts want to discourage claims splitting
     where πs try to bring lots of itsy bitsy claims to test the waters of what‟s gonna
     win and what‟s not.
  - Does case stem from same transaction? If a case concerns the same parties (or
     parties that are in privity) and the same general fact pattern as a previous case,
     then the previous case may preclude the new one.
  - In a tort case, there may be multiple claims but there is still only ONE act, ONE
     wrong, and those other claims are precluded once the wrong has been tried in
     court.
         o Rush v. City of Maple Heights p.1225 where there‟s a motorcycle accident
             and there‟s damage both to person and personal property.
                   Tries to bring two suits.
                           First suit: Damage to personal property.
                           Second suit: Injury to person.
                   Rule: Injuries to person and property need to be brought in the
                      same suit!!
                           prevents a multiplicity suit
                          lowers expenses (instead of having two trials, two lawyers,
                           etc.)
                         prevents delays
       o Federated Department Stores, Inc. v. Moitie p.1234 where two πs in a
           group anti-trust case remove themselves from the group‟s appeal and refile
           their claim in state court.
                Procedurally…
                         the appeal wins
                         the two πs in state court lose
                Rule: US SC says we should apply res judicata! What‟s with the
                    exception the Cir. Ct. tried to make?? Its not simple justice to
                    apply res judicata here.
                         Res judicata serves “vital public interest.”
                         It offers a finality to litigation.
                         Res judicata is the heart of fairness and justice – the ∆
                           doesn‟t have to wonder what to expect next!
                         The litigants who lost can go through appeals process.
-   EXCEPTIONS to res judicata:
       o jury and/or judge bribery
       o NO jurisdiction in that court at all
       o judgment procured by fraud
-   Five part test for claim preclusion (Where C1 = case 1 and C2 = case 2)
       o C2 has same parties as in C1 or at least people in privity.
       o C2 and C1 = same cause of action. (Transaction or occurrence test.)
       o C1 judgment has to be final, valid, and on the merits.
                finality – typically est‟d when trial court enters its judgment
                         even when an appeal is pending, unless and until that
                           appeal disturbs things, finality attaches w/the judgment
                           rendered by the trial court
                merits – categorical level, not a merits determination if there is no
                         SMJ
                         PJ
                         Venue
                         (Rules 12b1-3)
                         IS satisfied if there was a 12b6 motion granted
       o If 1-3 satisfied, all legal claims that would have been or were raised in C1
                “could have been raised” means whether or not, taken together, the
                    various claims/disputes would have been a convenient/sensible
                    unit
                         relatedness in time, place, origin of injuries
                         exception:
                                o latent injuries that could only have been discovered
                                   at a later, subsequent time
                                  o issues that couldn‟t have been brought in C1 b/c of
                                      jurisdictional bar (this is rare b/c there‟s usu.
                                      supplemental jurisdiction)
                                            ex: litigation in state tax board of appeals
                                               wherein claims cannot be brought there
                                            ex: immigration context – bureau of
                                               immigration affairs precluded from hearing
                                               global constitutional challenges
           o If 1-3 satisfied, then all legal claims that could have been raised or were
             raised in C1 are precluded from relitigation in C2 so long as the litigant
             that would benefit from res judicata has executed it.

ISSUE PRECLUSION / COLLATERAL ESTOPPEL
   - Issue preclusion justifications:
         o efficiency
         o lowered costs
         o credibility and legitimacy in legal system
   - Seven aspects of traditional definition of issue preclusion
         o Look at whether it‟s a: issue of fact or law
         o actually litigated and necessarily decided (i.e. essential to judgment) of C1
         o in a judgment final, valid, and on the merits
         o  resolution of issue in C1 is conclusive in C2
                 if raised
                 and if C2 is btw same parties or parties in privity (mutuality – no
                    longer the law and now more discretionary)
                 even if C2 involves a different claim (not issue, obviously)
   - Differences btw claim and issue preclusion
         o ax (claim preclusion) versus scalpel (issue preclusion)
                 ax bars the entire damn thing!
                         claim preclusion is dispositive of the resolution in C2
                 scalpel addresses only certain issues
                         issue preclusion will resolve only part of the issue in C2
         o parties
                 claim preclusion only applicable when there are the same parties or
                    those in privity from C1
                 issue preclusion = for some types of issue preclusion you don‟t
                    even need same parties or privity
         o issues raised and necessarily decided
                 claim preclusion also covers issues that “could have been raised”
                    b/c a main thrust is prohibition of claims splitting
                 issue preclusion requires that issues were raised, decided, and
                    essential to the judgment
         o defensive versus offensive use of the right
                 claim preclusion in practical terms can only be used defensively to
                    forestall the second suit
                 issue preclusion can sometimes be used offensively
           o Frequently both are applicable. Look out for both preclusions when new
               cases are presented.
   -   Issue preclusion NOT used as often as claim preclusion.
   -   Situations where issue preclusion just overlooked in favor of other stuff:
           o Losing party in C1 allowed to relitigate where there‟s differences in the
               available procedural or discovery options/avenues that will fairly allow
               them to represent their cases.
           o Proceedings in C1 were informal/perfunctory.
                    e.g. if the issue in C1 was litigated in small claims court and then
                       in C2 the stakes are MUCH higher.
                    cases treated differently btw $10M at stake versus $100.
           o Burden of proof materially different or shifted.
           o Diff. parties in C2 than there were in C1.
   -   Cromwell v. County of Sac p.1244 – π wants to offer evidence in C2 on validity
       of the bond and that π is a BFP even though in C1 π had failed to give such proof.
           o US SC says π‟s allowed to give such proof in C2 b/c that was NOT the
               issue decided in C1.
           o Key point: You have to examine VERY carefully btw C1 and C2 what
               was actually litigated in C1.
                    Concession: If one party concedes an issue, then it‟s typically NOT
                       viewed as being adjudicated on the merits.
   -   Russell v. Place p.250
           o C1 = patent infringement w/2 bases for claim:
                    use of fat liquor in the treatment of liquor
                    process of treating skin by means of a compound composed and
                       applied in a particular manner
           o ∆ in C2 wants to litigate the same defenses that it litigated in C1.
           o What we‟d need for issue preclusion:
                    must appear, either upon the face of the record or be shown by
                       extrinsic evidence, that the precise Q for the issue preclusion has to
                       have been raised and determined in the prior lawsuit
           o US SC says to go ahead and litigate those defenses.
                    Each infringement litigated (i.e. C2, C3, C18, etc.) is a separate
                       action and issue was NOT “actually litigated.”
                    Ruling must be necessary to the judgment – dicta doesn‟t count!

PRIVITY AND NONMUTUALIITY
   - Claim preclusion requirement that the two parties be the same or in privity.
   - Different parties?  two questions re: privity
          o Who can potentially be bound by a prior judgment?
          o Who can take advantage of a prior judgment?
   - Mutuality
          o required in claim preclusion
          o NOT required in issue preclusion
   - Non-mutual collateral estoppel – A party that took place in (or is in privity w/a
      party that took place in) n litigation is bound by it.
-   Defensive non-mutual collateral estoppel
       o Raised by winning ∆ party to try to say that the party NOW bringing suit
           should have brought it along w/the now losing π in C1 b/c party is in
           privity!
       o If at first you don‟t succeed, quit!
       o Encourages joinder.
       o Bernhard v. Bank of America p.1284 – Grandma transfers money. C1
           finds that ∆ didn‟t take the money; it was a gift. In C2, new π is precluded
           from relitigating the issue. Traynor makes the point that the ∆ in C1π‟s
           OWN chosen forum actually won.
       o Blonder-Tongue Labs v. University of Illinois p.1288 – Patent
           infringement. C1 = UI lost patent declared invalid. C2 = UI wins.
                US SC reverses.
                Court says that defensive nonmutual collateral estoppel WILL
                    apply
                         it‟s costly for ∆ to relitigate issues that π already had a
                            chance to litigate
                         patent specific reason: costs associated w/patent litigation
                            are high, particularly for ∆
-   Offensive non-mutual collateral estoppel
       o highly litigated
       o very controversial
       o Courts have a lot of discretion re: allowing offensive nonmutual collateral
           estoppel
       o Parklane Hosiery v. Shore p.1291
                C1 resolves ∆ had issued materially false and misleading statement
                    (which is a violation of fed. law)
                C2 has SAME allegations as C1 and π in C2 wants to use offensive
                    nonmutual collateral estoppel to keep the findings of C1. US SC
                    says ∆ is precluded from relitigating same facts.
                Court IDs several reasons why offensive and defensive nonmutual
                    collateral estoppel should be treated differently:
                         judicial economy – offensive does NOT promote judicial
                            economy in the way defensive use does
                         fairness to ∆ -- offensive nonmutual collateral estoppel
                            might be unfair to ∆
                                o e.g.: if sued the first time for $100, they might not
                                    litigate vigorously. Then if they‟re sued in C2 for
                                    $10K, they‟re in the cahoots! If they realized that
                                    the suit was an issue that implicated a lot of people,
                                    then hey might have litigated more vigorously.
                         Second action might afford the ∆ procedural opportunities
                            unavailable in C1 that could cause a different result.
                                o e.g.: Discovery opportunities Esp. in arbitration – in
                                    arbitration, usu. allowed 3 depositions whereas in
                                    fed. case they‟ll allow up to 25.
                        Did C2π have opportunity to join in the first action?
          o Martin v. Wilks p.1307
                C1 resolved with consent judgment by City to promote goals to
                   hire more black firefighters.
                C2 raised against City where white firefighters allege they‟re being
                   denied promotions illegally in favor of less qualified black
                   candidates.
                Developments:
                        Principle of Anglo-American jurisprudence = one is not
                           bound by an in personam judgment in a litigation in which
                           he is not designated a party
                        BUT there‟s a vein that‟s been developing where if you
                           could have been a party to C1 then you can‟t bring C2.
                US SC rejects new development, says that the law doesn‟t require
                   the parties in C2 to join in C1.
                        The two parties are different and the white firefighters
                           cannot be held a party to a judgment they weren‟t a part of.
                DISSENT (which Congress soon after adopts): If you‟re on the
                   sidelines (like the white firefighters here) and you know what‟s
                   going on and have a right to participate, then the advantage you
                   gain from being a sideline sitter outweighs not knowing at all.


CLASS ACTIONS
INTRO
   - Two things:
        o Academic: Academic debate usually has a big disconnection w/the actual
            occurrences of real life legal cases.
        o Real world: Oftentimes biggest event in a class action case is whether or
            not a class is certified.
   - Certification FRCP 23
        o Potential damages can change a LOT.
                 Litigation is unpredictable.
        o Once certified, the case will almost always be settled.
        o NOT certified such that it‟s a $10K or $100K case 
                 If case is objectively meritless  it will likely go away.
                 If case is meritorious  still might not be litigated b/c stakes too
                    low for litigants and lawyers to take on the case.
        o Huge effect on the lawyers and the incentives under which the lawyers are
            operating, part. if they‟re operating under a contingency basis.
        o π or π‟s attorney does NOT need permission from potential class
            members in order to get certified.
        o Discovery for class certification is NOT a mini-trial.
                 focuses on whether or not the claims of the people of the class can
                    fairly be adjudicated on the basis of class-wide proof
                  Should each indiv. go forward? Maybe there should be 10 different
                   classes?
                  NOT whether a suit can go forward (but look back at the practical
                   reality of whether people can really go forward with indiv. $3
                   suits)
-   FRCP 23
      o Considerations:
              Defined/definable class w/boundaries that are reasonably
                 ascertained.
              Standing: Proposed class representative has to be a member of
                 the proposed class.
              Numbers: FRCP 23a1 – Class has to be large enough that joinder
                 is impracticable.
                      Basic rubric – 40+ qualifies, <25 people doesn‟t qualify.
              Commonality: FRCP 23a2 – Litigant has to raise at least one issue
                 of common law or fact that runs throughout all the class members.
              Typicality: FRCP 23a3 – Claims or defenses of the named parties
                 have to be typical of the claims or defenses of the class members.
              Adequacy: FRCP 23a4 – Representative parties and attorneys will
                 fairly and adequately represent interests of the proposed class.
                 Also ensure that there is no strife w/in the proposed class such that
                 subclasses might make more sense.
                      Constitutionality: Hansberry v. Lee p.718 where class
                         actions are okay as long as class members are adequately
                         represented.
                             o adequacy issue! US SC finds that white
                                 landowners who signed the covenant to keep black
                                 homeowners away were NOT representative of all
                                 future potential property owners (who would
                                 include black landowners, too).
                             o Due process issue!  Granting res judicata effect to
                                 class action (where it doesn‟t satisfy prereqs and
                                 procedure of class action to insure protection of
                                 absent parties) violates due process. US SC finds
                                 that covenant signing landowners are NOT
                                 members of the same class as the future property
                                 owners.
      o Three kinds of class actions (once FRCP 23a considerations are
         satisfied):
              FRCP 23b1 – class action allowed where doing it separately would
                 create risk of
                      23b1a inconsistent judgments
                      23b1b individual litigation unfair to absentees
                             o seen in big payouts from a limited fund
              FRCP 23b2 – Actions by ∆ affect entire class and we‟re looking
                 for injunctive relief here
                          most common
                          employment discrimination, consumer, env. .cases, civil
                           rights
                        ∆‟s conduct need only be “generally applicable” to the
                           class
                    FRCP 23b3 – When damages are at stake (i.e. monetary claims).
                     When it‟s an “opt-out” class action, have to meet:
                        Predominance – common Q of law or fact predominate
                           over indiv. issues that have to be analyzed on a π – by – π
                           basis
                        Superiority – whether or not a class action is superior to
                           other available methods to handle a case
                                o interests of member in indiv. litigating
                                o extent nature of any pending litigation concerning
                                   the controversy involving the members
                                o desirability of concentrating litigation in part. forum
                        Manageability – whether a class is manageable or not
                           (tends to feed back into a predominance analysis)
   -   Two sides:
         o Good
                   Fairness to ∆ and similarly situated πs b/c gives equal outcomes to
                    everyone.
                   Efficiency.
                   The little guy: Allow small wrongs to be righted b/c of ability to
                    aggregate π‟s claims.
         o Bad
                   Agency problems
                         Oftentimes no client  attorneys sell out their “client.”
                         Named π might not be a faithful agent of all class members.
                   Judicial blackmail
                   Different members of the class  Erie problems in terms of how
                    state law issues will be handled.
                   Not a sensible way to resolve billion dollar Qs.
                         Real people w/real life issues – retirement funds,
                            employment, etc. that are v. important to them.
                         Allocation of big chunks of society‟s assets.
         o Both are right at different times.

JURISDICTION / PRECLUSIVE EFFECT OF JUDGMENTS
   - VENUE – residences of named π only
   - SMJ
        o Federal cause of action: People try to get federal cause of action. If the
           named πs are invoking a fed. statute, SMJ is easy. We have SMJ b/c it‟s a
           federal question/federal cause of action and for the class so long as it‟s
           otherwise appropriate.
                  One way people try to do it is to say what might more naturally be
                   a state law claim is actually a federal cause of action (i.e. a state
                   fraud claim becomes a RICO violation).
         o State law causes of action / Diversity jurisdiction
                Two main issues
                        Citizenship
                                o §1332 US SC says in Supreme Tribe of Ben-Hur v.
                                   Cauble p.735 that diversity of citizenship in class
                                   actions based on citizenship of named parties only.
                        Amount in controversy – each of the members or only main
                            πs?
                                o Zahn v. Int‟l Paper (squib case p.735) – EACH of
                                   the members must satisfy amt in controversy.
                                o What do we look at for amt in controversy?
                                        Split in the circuits.
                                                In re Abbott Laboratories p.737 says
                                                   include the aggregate attorney fees.
                                                Sometimes can monetize the value of
                                                   injunctive relief.
                                        Legislative history for §1367 supp.
                                           jurisdiction says §1367 is NOT intended to
                                           tinker w/the Zahn rule.
-   PJ
         o Phillips Petroleum Co. v. Shutts p.738 – π a class of royalty owners, 97%
           of whom don‟t have any ties to forums state, who want to recover royalty
           rights from ∆ gas company.
                ∆ wants to establish whether or not the π class will be bound by the
                    KS court‟s decree. ∆ concerned about res judicata effect (b/c ∆ will
                    be bound by the decision) and that, should π NOT be bound by PJ,
                    π would be able to sue individually and use res judicata to bind ∆
                    without having π be bound by res judicata themselves.
                ∆ wants to ensure that the resolution in the KS court IS the
                    resolution and not just the opening bid in a 33K person indiv.
                    lawsuit fiasco.
                PJ: KS court rightfully asserted PJ over the class. US SC
                    determines this for absent class members b/c:
                         consent and notice:
                                o If the class members get notice and they don‟t opt
                                    out of the proceeding going forward, then they are
                                    presumed to consent.
                                o Under Mullane, best practical notice under the
                                    circumstances
                                o opt-out option
                                         doesn‟t violate due process
                                         gives opportunity to pursue the issue
                                            separately
                           due process
                                o adequacy of representation – interests of parties
                                   speaking must be aligned w/the interests of the
                                   entire class
                        FRCP 23c – How this all works re:notice question
                 Choice of Law: KS court applying KS law in this case.
                        ∆ arguing that KS law shouldn‟t apply b/c no meaningful
                            attachment btw most of the class members and the forum
                            state.
                        US SC says that due process and full faith and credit
                            requirements require that there has to be a significant
                            contact or aggregation of contacts to claims asserted by
                            EACH member of the π class that creates state interests
                            such that application of KS law is not arbitrary or
                            fundamentally unfair.
                                o threshold issue: Are there differences in state law?
                                o If there are meaningful differences, for a state to
                                   apply its own law there has to be a meaningful
                                   connection btw out of state litigants and the forum
                                   state
                                o on a π by π analysis (to ALL of the members of the
                                   class)
   -   PRIOR JUDGMENTS
          o Cooper v. Federal Reserve Bank of Richmond p.747 – A successful
            defense of a class-action discrimination suit doesn‟t bar individual suits by
            members OR potential members of the class.
                 Res judicata DOES apply in a class action setting – sure, why not?
                   BUT you have to be careful and thoughtful as to what‟s actually
                   being decided.
                 In these C1 and C2, they‟re different!
                        Class action is re: pattern of discrimination in this case.
                        Individual suit is re: discrimination against that individual
                            person

MASS TORTS / SETTLEMENT
  - Tradeoff of fairness v. efficiency
  - Two views:
       o Good
                only efficient way to resolve these issues
                vindication of the rights of the little guy!
       o Bad
                enormous legal fees
                inflated product prices reflect the high cost of litigation
                mass torts prompt corporate bankruptcies
  - Castano v. American Tobacco Co. p.754
       o Proposed class = all nicotine dependent persons, possibly largest class
           ever
       o π‟s theory of liability = ∆ fraudulently didn‟t inform people that nicotine is
           addictive and manipulated that information so as to keep smokers addicted
       o Class actions need to meet predominance and superiority in order to be
           certified. That‟s A-okay.
       o US SC reverses this certification, though, b/c
                  predominance
                          Castano hasn‟t considered how variations in state law
                             might have effect
                          The district court didn‟t adequately address predominance
                             and superiority – they just assumed that b/c common issues
                             would be involved in every trial, they would be significant.
                  Superiority
                          Immature mass tort (one w/few prior verdicts) should be
                             litigated in indiv. actions first so that we can get the lay of
                             the land.
                          judicial blackmail – damages SO big that the uncertainty of
                             winning or losing  incentives to settle (blackmailing the
                             single company ∆ with the minute possibility that the suit
                             might turn out against them)
-   Argument for an intermediate spot btw one giant mass tort case and a million
    separate little cases:
       o Use subclasses by state – 50 separate trials then.
       o Or just do 50 different class actions.
       o Fifth Circuit thinks smaller proceedings ensuing w/o nationwide class very
           probable b/c the amt. of money for each individual case is REAL, not just
           the nominal $3/person or anything.
-   Asbestos Exposure Cases
       o Effects of asbestos can take a long time to manifest itself. Also, a LOT of
           money has gone to the attorneys in these cases, so transaction costs are
           real and eat away at recovery.
       o Amchem Products, Inc. v. Windsor p.760 – current and future claims
                  proposed class: people who have current or who would ever get
                     asbestos related injuries in the future (current sufferers in addition
                     to those who have had exposure to asbestos)
                  Multi-district litigation panel handles cases like this where
                     there‟s litigation in different parts of the country. The MDL
                     proceeding occurs in one day – just enter, file complaint, file
                     answer, and settlement determined.
                  Settlement is relevant here – it answers the question for everyone
                     in the π class. Even in settlement need to comply w/certification.
                  Agreement would bind the π class forever, the ∆ can opt out after
                     10 years.
                  OBJECTIONS:
                          Settlement terms fair?
               The individuals in the π class were different.
       Adequacy
               Problems
                      o Interclass conflict: There‟s a difference btw the
                          current sufferers and the “in the future” sufferers.
                               current sufferers will want immediate relief
                               in the future sufferers will probably want
                                  some sort of trust fund or whatever from
                                  which they can build long term
                      o Attorneys will have to address the two at the same
                          time (and it‟s hard to navigate btw the two)
               Solutions
                      o Subclassing
                      o different counsel for the indiv. classes
                      o nationwide legislative answer
o Ortiz v. Fibreboard Corp. p.773
       By the time this case rolls around, ∆ Fibreboard had settled 45K
          lawsuits already.
       Limited fund case (FRCP 23b1b) – They‟re putting up a certain
          amt for the claimants to pick from. This is all that ∆ is willing to
          pay out, period!
       Limitations on the π claimants
               The people in the settlement can‟t come back and relitigate
               They can only go through a mediation process
               If that doesn‟t work, then they have to face a $500K cap on
                 what they can recover from the fund
               They can‟t recover punitive damages
       Punitive damages – whether or not you can invoke punitive
          damages is a big deal in terms of what kind of coverage/leverage
          you can expect
       Usu. NO opt-out rights in a limited fund setting.
       US SC says “no way are we allowing this to go through!”
               adequacy issues – the future claims are different from the
                 current claims
               Using Rule 23 as a corporate reorganization under the
                 bankruptcy principle where the ∆ corp. gets to keep a lot of
                 its equity and the limited fund is used to satisfy the
                 undersecured tort creditors. Usually there are limits to
                 shareholder‟s takings in the bankruptcy setting but when
                 Rule 23 used for the same purposes, the shareholders are
                 actually taking FIRST b/c they have kept this equity out of
                 the hands of the claimants.