Civil Procedure – Professor Vaughns Spring 2002 I. Subject Matter Jurisdiction – criteria for removal to federal court [this can occur at any time before the case has ended] A. § 1332 (a) The district courts shall original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs and is between – (1) citizens of different states; (2) citizens of a state and citizens of subjects of a foreign state; (3) . . . B. Diversity of Citizenship 1. Complete Diversity Jurisdiction (Strawbridge v. Curtiss) – that there be no defendant having the same citizenship as any plaintiff. The constitution actually says nothing about complete diversity. §1332 actually narrows the scope of the constitution. 2. Domicile – must establish a physical presence and the intent to remain. a. pre merits determination b. fact based determination c. burden is on the removing party d. at the time of the lawsuit e. Sua Sponte – “on its on motion” – to take a course of action without the suggestion of another 3. Corporations a. Dual citizenship 1. Incorporation 2. Principal Place of Business i. Place of Operations ii. Nerve Center iii. Total Activity b. Limited Partnerships (Carden v. Arkoma Associates) – the citizenships of all limited partners must be taken into account for purposes of determining complete diversity. Hypothetical Plaintiff, a New York resident, brings a wrongful death action in a New York state court against Amway Airlines International, a Delaware corporation, for damages resulting from a plane crash that occurred upon take-off at the JFK Airport. Defendant removes the action to federal court on the basis of diversity jurisdiction and plaintiff seeks to remand the case for want of federal court jurisdiction. The record in this case shows that defendant airlines has its executive offices in New York City, has its greatest number of flights out of O'Hare Airport in Chicago, has training facilities in Kansas City, and has its greatest number of employees living in Kansas City and Chicago. If you were the judge making this pre-merits determination re the propriety of removal, how would 4. Alienage you rule on plaintiff's motion to remand? a. Permanent Aliens – citizens of the states in which they are domiciled
2 5. Class Action a. only the citizenship of the named representatives is considered in determining diversity b. Zahn v. International Paper Co. – each class member must have a sufficient claim unless the claims were legally joint. C. Amount in Controversy ($75,000) – the monetary limitation seeks to ensure that only substantial cases will be brought in federal court. 1. Legal Certainty Test – the requirement is met unless the plaintiff‟s complaint shows to a legal certainty that she could not recover more than the minimum amount 2. Good Faith limitation 3. Aggregation a. all claims of a single plaintiff against a single defendant, whether or not related, can be aggregated to meet the minimum b. claims of a single plaintiff against several defendants is only valid if the defendants are jointly liable c. claims of several plaintiffs against a single defendant can be aggregated only if they have a common undivided ownership interest in the claims d. counterclaim – not usually aggregated to meet the requirement D. Federal Question Jurisdiction 1. §1331- The district courts shall have original jurisdiction of all civil actions arising under the constitution, laws, or treaties of the United States. 2. “Arising Under” – narrowly construed to limit the jurisdiction of the federal courts 3. Well Pleaded Complaint Test – federal question must appear in the plaintiff‟s well pleaded complaint, answers and defenses are not sufficient a. Exception – Declaratory Judgment – federal courts can hear cases where potential defendant seeks a declaration that a potential plaintiff has no claim – here a defense can be utilized to prove that plaintiff has no claim * Louisville & Nashville Railroad v. Mottley, 1908 – the federal courts did not have federal federal question jurisdiction over the case because the allegations relating to the federal statute were not essential to Plaintiff‟s action for breach of contract; they merely anticipated a defense that the railroad would have to plead and prove Cert. was granted because the Supremes are not confined by the well pleaded complaint rule * Gully v. First National Bank, 1936 – where federal law is an element of a state law claim, it suffices to support federal question jurisdiction only where it is important to the outcome of the case. * Smith v. Kansas City Title & Trust Co., 1921 – There was federal question jurisdiction over whether the bonds were validly issued under federal law. (Was the act creating the bonds constitutional?) similar to Gully, except the issue is of greater importance * Osborn v. Bank of the United States, 1824 – jurisdiction was defined broadly to include matters where the bank of the United States is a party. * Merrell Dow Pharmaceuticals, Inc. v. Thompson, 1986 – there is no federal question jurisdiction over a state tort claim for negligent manufacture of a drug even though it was a violation of the Federal Food, Drug, and Cosmetic Act.
3 Procedural Sharing Substantive Sharing
State and Federal Courts
Laws of the Environment Fed exclusive (fed can preempt in this area)
Fed. Exclusive
E. Supplemental Jurisdiction – claims that do not have an independent basis of federal jurisdiction because of their relationship to an “anchor” claim that falls within the court‟s subject matter jurisdiction [***Goal – to promote judicial economy and consistency of decision***] 1. United Mine Workers v. Gibbs – “Under the Federal Rules of Civil Procedure, the impulse is toward entertaining the broadest possible scope of action consistent with fairness to the parties.” - - - Plaintiff claimed that defendant union violated federal labor laws and committed the state law tort of interference with a contract by pressuring customers not to employ his services. Both federal and state claims arose from the same series of actions by defendant‟s agents. The federal court could grant plaintiff judgment on the state law claims even if it decided after trial that plaintiff had not established a federal claim. a. “anchor claim” b. common nucleus of facts” 2. Owen Equipment & Erection Co. v. Kroger – court says that it is not fair to make defendant have claim in state court that deals with the same situation in federal claim because defendant was brought into court against his will. a. must establish that the anchor claim has an independent jurisdiction 3. Finley v. United States – there could be no jurisdiction over a related, nonfederal claim against a nondiverse party because a grant of jurisdiction over claims involving particular parties does not itself confer jurisdiction over additional claims by or against different parties. 4. Joinders a. no supplemental jurisdiction over joinders under Rule 19 or 24 b. some additional parties may be joined under the courts supplemental jurisdiction pursuant to rule 20 5. Discretionary decline of jurisdiction §1367 [Gibbs] a. novel or complex issue of State Law b. the claim substantially predominates over the claim or claims over which the district court has original jurisdiction c. the district court has dismissed all claims over which it has original jurisdiction d. in exceptional circumstances, there are other compelling reasons for declining jurisdiction
4 Hypotheticals 1. A New York employee asserts a federal labor claim and state breach of contract claim arising out of a single set of events against a labor union. May both claims be brought in federal court? Yes What if federal claim is brought against the labor union and the state contract claim is brought against a different defendant, such as the New York employer? Yes 2. Plaintiff, a citizen of New York, brings a federal court action against the defendant, a citizen of Pennsylvania, for $100,000, asserting that the defendant assaulted him. Defendant counterclaims in that action, asserting a claim for libel growing out of that altercation and claiming damages of $30,000. Can the counterclaim be heard in federal court? Yes, since the counterclaim is brought by the defendant and he does not have a choice. 3. A New York resident attempts to bring suit in federal court against a Pennsylvania doctor and a Pennsylvania hospital for medical malpractice. The claim against the doctor is for $100,000. The claim against the hospital is for $10,000 (the result of a damage limit under the relevant statute). May both actions be heard in the federal court? Split in the courts - - - Rule 20 v. Rule 82 §1332 changes the outcome of Zahn!
Ancillary Jurisdiction A party (usually the defendant) could assert a related claim against another defendant, the plaintiff, or a third party, even though the second claim was not itself within the court‟s jurisdiction
Pendent Jurisdiction A plaintiff with a jurisdictionally sufficient claim (usually a federal question) could join a related claim against the same defendant even though the second claim was not itself within the court‟s subject matter jurisdiction
F. Removal Jurisdiction 1. Shamrock Oil & Gas Corp. v. Sheets (1941) – right of removal is given only to the defendant. 2. this is a waivable right 3. must be sought 30 days after receipt of pleading 4. Well Pleaded Complaint Rule – the fact that the defendant has raised a federal defense to the plaintiff‟s state law claim is not sufficient to support removal 5. Counterclaim involving a federal issue does not count
Summary of Removal Issues 1. A federal court must have jurisdiction over the case; jurisdiction need not have been proper in that state court 2. Removal is to the federal district court whose territory encompasses the state court 3. Only defendants can remove; all defendants must join in the removal 4. A case may not be removed on diversity grounds if any defendant is a citizen of the forum state 5. must be filed within 30 days of receipt by defendant 6. If the case contains a separate ad independent claim based on a federal question, defendant may remove the whole case
5 II. Personal Jurisdiction – “Keep in mind as you read all of the cases in this chapter that we are looking at an evolution of legal concepts, not a static picture of the law as it now stands” A. Aspects of Personal Jurisdiction 1. Power – defined in terms of the sovereign state a. In Personum – a court can impose a personal liability or obligation on a defendant, or require a defendant to act or refrain from acting. (over natural persons or corporations) b. In Rem – declares the rights to all persons over things (claim of title) c. Quasi In Rem – affects the interests of a particular person in a thing i. related to the claim ii. unrelated to the claim d. Pennoyer v. Neff – in order for the court to exercise power over individuals or property there must be a valid service of process on the individual or the attached property 2. Presence a. Transient Jurisdiction (TAG Jurisdiction) – a defendant served with process while physically present within a state is normally subject to the personal jurisdiction of the trial courts within that state. i. exception is if the defendant was forced or induced by fraud into the jurisdiction b. An agent of you or your corporation can be served c. Service on an airplane flying over the jurisdiction is sufficient d. Burnham v. Superior Court of California - the Court upheld the constitutionality of transient jurisdiction, obtained y service on a non resident temporarily within the state [may not hold true if presence is involuntary] even though the business trips were unrelated. e. Immunity from Process – witnesses, attorneys on unrelated matters, parties and public officials on official business. 3. Domicile (residency with intent to remain) 4. Consent a. Express i. Forum selection clause – you give consent where you form a contract ii. Choice of Law clause (Burger King) – entering into an ongoing contract via the internet communications usually should suffice to support jurisdiction at the forum of either party for an action alleging breach of contract against the other. b. implied consent – a defendant‟s in state activities are sufficient to justify service for suits related to the activities, despite doubts about the power to forbid them. i. Hess v. Pawloski – driving within a state is implied consent to suit in that state on claims arising from that driving. Appointed a state officer as agent of driver – must still be given notice. c. Waiver B. Minimum Contact Standard [expanded in personum jurisdiction] 1. International Shoe Co. v. Washington – held that to subject a defendant to a judgment in personam, due process requires only that “he have certain minimum contacts with the forum, such that the maintenance of the suit does not offend „traditional notions of fair play and justice.‟
6 a. Purposeful availment – there are limitations – there must be “some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws. b. reasonableness The “Shoe Spectrum” No Contact Casual/ Isolated Contact Single Contact Continuous Contact Substantial Contact
No Jurisdiction
Specific Jurisdiction
General Jurisdiction
Helicopteros Nacionales de Colombia v. Hall Plaintiffs sued in Texas to recover for the deaths of workers killed in a helicopter crash in Peru. The helicopter was operated by defendant, a Colombian Co. The parties conceded that the claims did not arise out of defendant‟s contacts with Texas, and so there was no basis for specific jurisdiction. Neither did the court find a basis for general jurisdiction C. Long Arm Statute (1) statute (2) constitutional 1. General (“sky is the limit”) – states allow the exercise of jurisdiction whenever it would not violate the constitution. In such states, the only question that need be considered is the constitutionality of jurisdiction. Do not need to look at statutory interpretation as long as activities are so substantial as to not violate the concept of traditional notions of due process and fairness. 2. Specific – specific acts warrant the exercise of jurisdiction - - - “arising from” a. The transaction of any business within the State b. The commission of a tortuous act within the State c. Ownership, use, or possession of real property, or risk located in the state at the time of contracting d. The maintenance of marital domicile in the state in an action for divorce 3. Gray v. American Radiator – The court read the Illinois statute‟s provision of jurisdiction for the “commission of a tortuous act within this state to cover the manufacture in Ohio of an allegedly defective valve that was shipped to a manufacturer in Pennsylvania and incorporated into a boiler made there. [they stretched the stream of commerce approach here.] World Wide VW v. Woodson - under due process, there must be foreseeability that one will be under jurisdiction. [Plaintiffs bought a car in New York and drove it to Oklahoma, where they were in an accident and suffered sever injuries allegedly caused by a defective design and placement of the car‟s gas tank. This action by plaintiffs did not establish a contact between the New York retail seller and Oklahoma.] *Defendant‟s conduct and connection with the forum state are such that he could reasonably anticipate being hauled into court there
7 Hensla v. Denkla – there must be purposeful conduct on the part of the defendant. Purposeful availment, some voluntary action by the defendant establishing a relationship with the forum. Gives notice of jurisdiction, that they can be hauled into court - - - benefit is protection. D. Stream of Commerce – presence + 1. “placing a product in the stream of commerce is not sufficient and that some additional conduct by which the defendant indicates an intent to serve the forum state is essential. The circumstances under which a manufacturer will be found subject to jurisdiction in a state because its product is sold there remain unclear. 2.. Began by looking at traditional notions of fairness 3. Asahi – look at the reasonableness a. burden on defendant b. interest in the forum state c. plaintiff interest in obtaining relief 4. Burger King v. Rudzewicz – A Michigan defendant entered into a 20-year franchise agreement with a Florida fast food corporation that required him to adhere to a detailed set of specifications in the operation of his franchised restaurant, to send payments to Florida, and to agree to the application of Florida law in construing the contract. The Court stated that Florida jurisdiction was proper because the defendant reached out beyond Michigan and negotiated with a Florida corporation for the purchase of a long-term franchise and the manifold benefits that would derive from affiliation with a national organization. a. long-term relationship with forum state can constitute minimum contact b. as a commercial actor (sent payments and notices) this constitutes a purposeful availment c. must balance minimum contacts and other elements to determine reasonableness of suit d. Once minimum contact is established – defendant must prove that forum is so unreasonable that he will be at a gross disadvantage 5. But For Test – they cannot benefit but for the laws of the state (adopted through statute by the state) E. Property Based Jurisdiction 1. Shaffer v. Heitner – the minimum contacts test applied in International Shoe can be applied to property but liability is limited to the amount of the property a. Statute passed after Shaffer: every non-resident who accepts appointment as a director, trustee, or member of the governing body of a corporation organized under the laws of this state is deemed to have consented to appointment of the registered agent of such corporation as his agent upon who the service of process may be made in all civil actions or proceedings brought in this State by or on behalf of, or against such corporation, in which any action for, trustee, or member is a necessary or proper party, or in any action against such director, trustee or member for violation of his duty in such capacity. F. Choice of Law [Why?!?] 1. Convenience 2. Values and Bias 3. Procedural Advantages
8 4. Choice of Law G. Nationwide Jurisdiction and Due Process [ Service] 1. Statutory Requirement - In Federal Court – Governed by Rule 4 – if these guidelines are met – notice requirement almost always satisfied, even if D does not get notice a. Rule 4e(1) – Any method of service allowed by state law of the state where federal court sits or the state where service was made effective. b. Rule 4e(2) - Allows three ways to serve: i. Personal in hand service ii. Serve D‟s agent iii. Substituted service – go to D‟s usual abode and serve someone of suitable age who lives there – this eliminates baby-sitter. c. Rule 4k – You can serve out of state if state allows d. Rule 4c(2) – Can be served by any non-party person who is over 18 e. Rule 4d – Waiver of service is possible – reduces fees – Send D first class mail with return envelope so they don‟t have to serve you personally – can still contest PJ (you do not waive any of your rights) f. Rule 4h – Service on a corporation – must serve an officer or managing general agent g. Rule 4k1(b) – Bulge Rule – You can serve outside the state lines even if there is no state law specifically allowing it if the service takes place within 100 miles of the courthouse and the D being served is not an ORIGINAL PARTY TO THE SUIT! (THEY ARE RULE 19 OR 24 D‟S) h. Rule 4(1)(2) – foreign country defendant relates only to federal question cases. Federal court must look to state court to authorize suit. 2. The fifth amendment has usually been held to require only that the defendant have minimum contacts with the United States as a whole to support jurisdiction, not with any particular state. Jurisdiction over a defendant who has scattered contracts with a number of states may be constitutional under the fifth amendment, even though the defendant has too few contacts in any one state to support personal jurisdiction under the fourteenth amendment. H. Notice 1. Mullane v. Central Hanover Bank – the method of giving notice must have a reasonable prospect of giving actual notice 2. “best notice practicable” – if substantial form of notice is reasonably calculated to give notice to all parties under all the circumstances a. publication okay for some b. publication not okay for readily available parties c. when addresses are known, the mail is acceptable I. Personal Jurisdiction Technical Defenses 1. Affirmative Defenses a. Immunity of parties – cannot be served if in state for judicial reasons b. Fraud or duress – Can‟t entice someone or fraudulently pull someone into jurisdiction 2. Affirmative Defenses a. Immunity of parties – cannot be served if in state for judicial reasons
9 b. Fraud or duress – Can‟t entice someone or fraudulently pull someone into jurisdiction 3. Procedural Challenges – Look at pleadings section a. Counterclaims under Rule 13 i. If they are compulsory - 13(a) – courts have held that D is not waiving PJ if he brings this up as well ii. If they are permissive – 13(b) – courts have held that D is waiving PJ defense – b/c D is asking court to rule on an issue – inconsistent with lack of juris. request. b. FRCP – LOOK TO RULE 12 – Must raise most defenses at once c. Within 20 days you must make a motion or an answer – the seven 12b defenses can be raised either in the answer or in a motion. i. Personal Jurisdiction defense automatically waived if Defendant omits in 12b motion OR is not made in the answer to the complaint d. Special appearance – only in some jurisdictions in state court– D can object w/o subjecting himself to PJ – showing up for the hearing is not basis for PJ and you cannot serve someone who shows up to make special appearance i. Limited to contesting PJ ii. Abolished in fed. ct. – only possible in state court iii. Some courts allow D who loses special appearance to defend on merits w/o losing right to appeal juris. issue iv. Other courts require D to default or attack collaterally after or defend on merits and then appeal juris. issue v. MUST BE CAREFUL NOT TO WAIVE PJ – don‟t argue anything on the merits e. D must raise in answer AND follow up as a motion to dismiss (see Rule 12c) 4. Collateral attack – default in original suit and then defend when P attempts to enforce – much more available a. D may argue that first court lacked PJ or SMJ over him b. D‟s failure to appear was due to P‟s fraud or duress c. Loses right to challenge on the merits 5. Direct Attack – Challenge to the jurisdiction ruling is made on appeal – either interlocutory or after the final judgment
Five options for Personal Jurisdiction defenses: 1. D appears, defends on the merits and loses – court enters judgment for the P – D has waived defense of lack of PJ – he can appeal the case only on the merits 2. D makes a special appearance – 12b2 motion to dismiss for lack of PJ – court agrees and says it lacks juris. – either dismisses or orders P to fix (give proper service) – P may then refile in court with proper PJ if SOL has not run 3. D makes a special appearance 12b2 motion – court disagrees and upholds juris. – D then defaults – enforcing court must enforce because the court has already rendered a decision about PJ – D can only appeal this decision 4. D loses on objection to PJ – defends on the merits and loses – he appeals – a. Most states have said that appellate court can still review PJ defense to see if it was proper b. Some courts have said that arguing on the merits precludes appeal on PJ defense c. If juris. is upheld or defense is considered waived – the enforcing court must enforce the judgment 5. D defaults, contests in enforcing court – judgment entered for the P – enforcing court will decide if juris. was proper – but D loses opportunity to defend on the merits. Full faith and credit clause precludes reexamination on the merits once D defaults
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III. Local Actions, Venue, Forum Non and Transfer A. Venue – Four different types of general venue rules 1. Diversity 1391(a) – a. venue should be where resides, as long as all s are in the same state b. venue should be where substantial events or ommisions giving rise to the claim occurred c. ONLY WHERE FIRST TWO ARE NOT PROPER – where any is subject to Personal Jurisdiction at the time the action is commenced – in the district, not the state – (only if no other state has venue) RARE 2. Federal Question 1391(b) – same as 1 and 2 above 3. Corporations 1391(c) – Resides in every district where subject to Personal Jurisdiction at the time the action is commenced 4. Against a Foreign State 1603 a. Where the action occurred or the property is located B. Transfer/ Change of Venue §1404(a) 1. Used when venue is proper but inconvenient – transfer is discretionary 2. Can only transfer to a court that is proper – must be within the same judicial system 3. Up to the discretion of the judge based on the convenience of parties and witnesses C. Transfer to cure improper venue §1406 1. Used when venue is improper 2. Discretionary – allows either dismissal, or in the interest of justice it may be transferred to a court in which it could have been brought originally D. Forum Non Conveniens 1. Where venue is proper but another court is much more convenient (used when the appropriate court is in another judicial system so that transfer is impossible – usually another country) Dismissed on condition that it will be transferred to another court 2. Piper Aircraft v. Reyno – Looks at the availability of alternative forums. Usually substantial weight is given to the plaintiff‟s choice to sue in a forum where the venue and jurisdiction requirements are satisfied. When the plaintiff is foreign, however, that deference is not warranted. 2. Van Dusen - where the plaintiff sues in a court that has proper venue and jurisdiction, a transfer for the convenience of the parties does not affect choice of law because the transferee court is to apply the same choice of law rules that the transfereror court would have applied 3. Klaxon Co. – In cases in federal court on grounds of diversity of citizenship, the transfer could affect choice of law b/c in such cases the federal court is required to look to the choice of law rules of the state in which it sits. 4. Ferrens v. John Deere – Van Dusen rule applies even when the transfer is on a motion by the plaintiff.
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Private Factors Relative ease of access to sources of proof – will access to needed proof be significantly easier in another forum? Availability of compulsory process – as to unwilling witnesses whose testimony is important, will there be compulsory process to compel them to attend trial in another forum that is not available in the forum chosen by the plaintiff? Cost of obtaining attendance of willing witnesses? Need to view premise – does the jury need to view the premises?
Public Factors Local interest – in having localized controversies decided at home. Interest in having the trial in a forum familiar with the law to be applied.
Avoiding unnecessary problems with conflict of laws. Unfairness of burdening citizens of an unrelated forum with jury duty.
E. Choice of Law 1. When original venue is proper but transferred anyway – law of original venue remains 2. When original venue is improper – choice of new/proper venue applies 3. Don‟t want to encourage forum shopping or reward for filing incorrectly IV. Erie Doctrine A. Rules of Decision Act – “The laws of the several states. Except where the Constitution or treaties of the U.S. or Acts of Congress otherwise require or provide, shall be regarded as rules of decision in civil actions in the courts of the U.S., in cases where they apply B. Swift v. Tyson – Interpreted RDA to not include state common law of a general, rather than local, nature. This meant that the federal courts could and did follow their own view of what the general common law was and should be. 1. no true common law existed 2. failure to achieve uniformity 3. led to forum shopping C. Erie v. Tompkins (concerned with horizontal) – in the absence of an act of congress, a federal court should follow applicable state common law principles rather than developing and applying its own “general” common law. 1. Statutory interpretation – The term “laws of the several states” includes state common law, general and local, as well as “positive” law like state constitutions, statutes, regulations, and ordinances. Concerned with federalism. 2. Equality –Erie eliminates the discrimination in favor of out-of-staters introduced in Two Pillars Swift. While an in-state defendant had no choice of law, out of state plaintiffs did. Now it of Erie is based on the state. 3. Forum-shopping – Erie made possible the application of different state laws in a diversity suit; depending on plaintiff‟s residence, her choice of forum, and that forum‟s choice of law rules. D. Guaranty Trust Co. v. New York – whether a state statute of limitations or the more flexible federal decisional rule of “laches” which asks whether delay has been excessive and caused the other side prejudice. - - - The court ruled that the NY state statute of limitations applies. 1. Outcome Determination Test: Will application of federal law instead of the state law significantly affect the outcome of the litigation.
12 a. if applied broadly, almost any rule would qualify. 2. Substance v. Procedural – look at whether it directly relates to the primary conduct of the plaintiff. E. Byrd v. Blue Ridge Electric Cooperative – The outcome is ambiguous (judge v. jury) so the outcome determinative test is not helpful. 1. Balancing Approach a. Relation between state rule in question and underlying state right (whether the state procedural practice was an integral part of the substantive right.) b. affirmative Countervailing interests of the federal judicial system – party asserting state law has to demonstrate legitimate state interests, failing that, applying the countervailing interests, federal rules should prevail if it outweighs the state interests. c. Likelihood of effect on outcome 2. inconsistencies can result when trying to balance a variety of state and federal interests. F. Hanna v. Plumer – (concerns the vertical) the Supreme Court held that Federal Rule of Civil Procedure 4(d)(1), allowing “substituted” service of process on a defendant‟s spouse at their home, rather than the personal service required by Massachusetts law, was valid and controlling, even though the “substituted” service would not have sufficed had the same action been brought in Massachusetts state court. 1. Rules of Enabling Act – although in Erie, the federal court did not have common law, Congress here acts to give federal procedural rule making power. Developed in the Federal Rules of Procedure – provides a presumption of validity. G. Stewart Organization v. Ricoh Corporation – although Alabama law that would govern an action conducted in Alabama state court disfavored contractual forum-selection clauses, on transfer of venue between federal courts was sufficiently broad to cover, and governed in a state law case in Alabama federal court. H. Determining the Content of State Law – When a federal court determines that state law is to be followed, it must then proceed to ascertain the content of that law. 1. Salve Regina College v. Russell – The federal court must review district court‟s state law determination de novo. I. Substantive Federal Common Law – Since Erie, the federal courts have created common law based on substantive federal interests. Federal Common Law is used to fill the gaps where application of state law to the question would frustrate the legislative purpose 1. “Reverse Erie Doctrine” – applied in cases when the use of state procedure does not adequately vindicate the federal right. V. Pleadings – Complaint and answer documents containing the factual allegations that each party is required to communicate before trial A. Rule 11 – governs all papers filed with the court except discovery papers 1. Attorneys have a duty not to take frivolous claims – have a duty to engage in pre-filing discovery to ensure proof of allegations filed. They must do research into: a. the legal principles b. the facts of the claim 2. Imposes duty to STOP, THINK, INVESTIGATE and RESEARCH before filing papers
13 B. Rule 8 – governs in Federal Court – Substance of a complaint (Rule 8(a)(2) – short and plain statements) 1. must only give sufficient notice of the claim to the defendant a. Conley v. Gibson – held that complaint should only be dismissed for failure to state a claim if it appears beyond a reasonable doubt that can prove no set of facts in support of his claim that would entitle him to no relief C. Rule 9 – Special Pleading Matters 1. governs when there is fraud or mistake – higher standard of facts and proof required (clear and convincing) 2. Special damages – give details, not things that you normally expect to flow from the events 3. Malice, intent, knowledge and other conditions of the mind of a person may be averred generally D. Ad Domnum Clause – “Wherefore” – or demand clause 1. Rule 8(a)(3) E. Burden of pleadings 1. Production is on the - evidentiary proof 2. Persuasion – trier of fact must come to the conclusion that they would be satisfied beyond a preponderance of evidence a. Clear and Convincing – party with burden of production must establish a trier of facts 3. Dismissal is on the - very heavy, must prove in light of the evidence viewed most favorably for the that the case has no weight F. Motion to Dismiss 1. Within 20 days of receiving the complaint (60 days if service was waived under Rule 4(d)) 2. Defenses are listed under Rule 12. a. Failure to state a claim – Rule 12(b)(6) VI. Answer – paragraph by paragraph response to the allegations of the complaint. A. Pre-Answer Motion – Defendant has 10 days under Rule 12a4(b) 1. Defendant can usually include any or all of the possible responses in his answer unless he has made a pre-answer motion – he can not include them now pursuant to Rule 12 g, h a. Defenses must be raised initially or they are waived b. Defenses can be raised for the first time at anytime throughout the trial c. Subject Matter Jurisdiction can be raised at anytime 2. Technical Defenses or Dilatory Rules pursuant to Rule 12b (Defenses in Answer pursuant to Rule 8(b) a. 12b(1) – lack of subject matter jurisdiction, cannot be waived in answer if not mentioned in pre-answer b. 12b(2) – lack of personal jurisdiction c. 12b(3) – lack of venue d. 12b(4) – insufficiency of process – very rare e. 12b(5) – insufficiency of service of process f. 12b(6) - Failure to state a claim for relief i. even if everything in the complaint is true, Plaintiff has no right to relief
14 ii. Claim may be dismissed on legal technicality with or without leave to amend iii. tests the legal sufficiency of that complaint g. 12b(7) – failure to join a party under Rule 19 3. Denials – to put at issue the allegations of the complaint, the defendant‟s answer must contain effective denials – allegations that are not denied are deemed admitted a. General Denials – only used when the whole paragraph is being denied b. Specific/ Qualified Denials – i. by parts – paragraph by paragraph or sentence by sentence ii. of time, dates or places – held pregnant with the admission that the event occurred at some other time, date or place c. Zielinski v. PPI – Plaintiff sued the wrong party, but in the answer, defendant was held responsible because he provided a general denial where some facts were true and the SOL had tolled 4. Affirmative Defenses – Rule 8(c) a. along with the substance of the chart below, Rule 8(c) provides that, “any other matter constituting an avoidance or affirmative defense may also be specially pleaded”
Tort Self Defense Consent Justification Privilege Contributory Negligence Illegality
Contract
Other Statute of Limitations Pleas in abatement – plaintiff lacks capacity, non joinder of parties, another action on the same issue is pending between the parties, the action is premature, lack of personal jurisdiction, improper venue
Lack of Consideration Statute of Frauds Failure to Mitigate Damages
5. Counterclaim – Cross Claim – Rule 13(a),(b) a. Permissive – does not raise out of the same transaction or occurrence as Plaintiff‟s claim b. Compulsory – arises out of the same transaction or occurrence as Plaintiff‟s claim c. Rule 13g – Involves parties on the same side of the “v” i. several defendants sue each other d. Rule 14 – Third Party claim 6. Amendments a. Rule 8a – amendments shall be given when justice so requires b. Rule 15 – Right to Amend
15 i. right to amend answer anytime within 20 days – after 20 days, it is up to the discretion of the court ii. after the answer, plaintiff may not amend without permission of the court iii. Discretion - can not be a mistake of bad faith - can‟t prejudice the opposing party - no undue delay - If 12bs are not in the answer, can only be amended in the 20 day period – court cannot grant leave to amend these after this period. c. Variance i. Evidence at trial does not match pleading ii. If opposing side does not object – court may give leave to amend iii. If the opposing side does object – the evidence does not come in but this is grounds for appeal – party can move to amend d. Relation back doctrine – statute of limitations problems i. If the plaintiff seeks to amend the complaint after the statute of limitations would otherwise have run on the claim, there is a question of whether the amended claim “relates back” to the date of filing of the original complaint ii. Anytime the pleading is amended, it is treated as if that was how it was filed originally. iii. must arise out of a transactional nexus between the original complaint and the newly sought original complaint 7. Supplemental Pleading – calls the court‟s attention to material facts that have occurred subsequent to the filing of the original complaint – Rule 15(d) 8. Dismissal – can take place at any stage of the litigation a. Pleading stage – can only occur if there are NO facts the Defendant can rely on – not specific facts – Rule 12b(6) b. Pre-Trial stage – Rule 56 – Summary Judgment c. Trial – Rule 50 – judgment as a matter of law (directed verdict) after a party has been fully heard and there is no legally sufficient evidence as a basis for a reasonable jury to find for that party on that issue d. Review standard not limited VII. Discovery – Rule 12(b)(1) – anything relevant or reasonably calculated to lead to admissible evidence [the goal is that both sides gather information about both sides claims and defenses – "full knowledge of all evidentiary information that will be relied upon during a trial" A. Unilateral Disclosure 1. Required Initial Disclosure – Rule 26(a) – 200 amendments
16 a. The names and, if known addresses and phone numbers of persons with discoverable information that the disclosing party may use to support its claim or defense b. Copies or descriptions of all documents that the party posseses which it may use to support its claim or defense c. A computation of damages and the documents on which the computation is based; and d. Any insurance agreement that might cover the claim 2. Timing – At least 21 days prior to the first pre trial conference the parties are required under Rule 26(f) to confer and develop a discovery plan. Within 14 days of that discussion, they must provide their initial disclosures, unless otherwise stipulated by agreement or ordered by the court. 3. Expert Disclosure – Rule 26(a)(2) – a party must disclose the identity of any expert it expects to call at trial and submit a report outlining the expert‟s conclusions, basis, and qualifications, at least 90 days before trial or when otherwise directed by the court. B. Adversarial Discovery – Rule 16 – review of discovery plan and the issuance of discovery order during pretrial discovery [judicial management rule] 1. Interrogatories a. Rule 33 – only 25 questions may be asked if one side refuses to comply [usually done informally in a good faith effort prior to motion to compel] b. Rule 57 – a magistrate will order to compel 2. Depositions a. Rule 30 – examinations of a witness under oath, recorded for possible later use in the proceedings b. Rule 45(B)(3)(A) – a non party may not be subpoenaed for deposition more than 100 miles from his home 3. Request for Production a. Rule 34 – obtaining materials from parties b. Rule 45 – obtaining material from non parties 4. Mental and Physical Examination a. Rule 35 5. Requests for Admissions a. Rule 36 – similar to the pleadings C. Privileges 1. applies to communications made in confidence while seeking legal advice from a lawyer, and it is waivable by the client Attorney2. The advice must be sought from one whom the claimant reasonably believes is an Client attorney Privilege 3. The communication for which privilege is being asserted must relate to the legal advice sought 4. The communication must have been made in confidence 5. UpJohn CO. v. U.S. – The Supreme Court rejected the control group test as a matter of federal common law of evidence. Instead the Court adopted a test that can extend the privilege to any employee. Although the contours of the test are unclear, it turns basically on the following factors a. Matters within the scope of employment
Employment Privilege
17 b. Information not available from higher management c. Other requirements of privilege are met (e.g. knowledge that it is in confidence) 6. Waiver a. in some jurisdictions, even an inadvertent disclosure of a confidential communication waives the privilege as to the subject matter – all communications become discoverable b. Unintentional Production of Documents i. the American Bar Association – when an attorney receives, through the apparent mistake of another party, information that appears to be privileged, it is the duty of that attorney to not read the document, notify the other party, and abide by her instructions c. Disclosure to third party – if the communication is shared with a third party, the privilege is destroyed d. Implied Waiver – when confidential communication is at issue in the litigation 7. Self Incrimination – Fifth Amendment (only dealing with testimony, not documents) 8. Work Product a. Hickman v. Taylor – Materials presented by or under the direction of a party or her attorney in anticipation of litigation are subject to discovery only if the seeker can show substantial need and an inability to obtain equivalent material by other means
Intangible attorney work product Mental impressions of attorney Protected by both Tangible nonattorney litigation preparation materials Memo, other written documents Qualified
Hickman Work Product v. Rule 26(b)(3) Litigation Preparation
Absolute
D. Duty to Update – Rule 26(e) – requires a party to supplement her prior responses and initial disclosures if the party learns that in some material respect the information disclosed is incomplete or incorrect – "at appropriate interval should seasonable amend" – use judgment as to what is appropriate E. Procedures to Block and Compel Discovery 1. Objections a. Rule 30(d)(3) – unilateral refusals to produce the requested information; they place the burden of seeking judicial intervention on the party seeking discovery 2. Orders Compel a. Rule 37(a) – tests the validity of an objection – sanctions may be granted if not met by the opposing party i. punishment ii. preclusion from challenging iii. dismissal 3. Protective Orders a. Rule 26(c) – requires good cause for a protective order
18 i. discretionary on the courts part if it is within the scope of relevant nonprivileged information, confidential in nature 4. Sanctions F. Final Pretrial Order 1. Rule 16(e) – lists every witness to be called by each party and the substance of their testimony – any evidence not included may be excluded from trial unless to prevent manifest injustice VIII. Right to a jury trial A. Responsibilities of Judge and Jury Judge Intelligent More informal – easier to conduct without procedural hurdles More likely to ignore irrelevant or inadmissible evidence (could also be a con) Do not have to prepare jury instructions No jury fees Not sympathetic Only one person deciding Strict on procedural matters Ignore inadmissible evidence Jury Societal values Greater number of people involved Embraces local community value
Pros
Cons
Lay persons – hard to understand complexity of a case Emotional – rule of law ignored May not take seriously – time Easily manipulated by the Voir Dire process
IX. Summary Judgment – Rule 12(b)(6) – The court is to grant summary judgment when it determines that there is no genuine issue of material fact or that there is no triable issue as to any material fact A. Celotex Corp. v. Catrett - The court held that the manufacturer was not entitled to summary judgment because the record contained sufficient evidence to create a genuine issue of material fact with respect to the decedent's exposure to the particular asbestos product. The court found that the record reflected a direct link between the manufacturer and the product because (1) the letter reflected knowledge of the decedent's exposure to the product and that its maker was a corporation now owned by the manufacturer; (2) the author of the letter could testify to the facts contained therein; and (3) the manufacturer submitted documents recording its sale of the asbestos product to decedent's employer during the period of his employ. 1. “summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed „to secure the just speedy and inexpensive determination of every action.‟”
19 X. Trial A. Jury Selection 1. Voir Dire a. Preemptory Challenge – each side has a limited number of challenges without a showing of cause b. For Cause i. if the juror has a financial stake ii. if immediate family has an interest iii. or if there are other reasons that the juror may be impartial B. Opening Statement 1. The function of the opening statement is to provide an outline of the case that the attorney intends to provide an outline of the case that the attorney intends to present a. a brief statement of legal theory b. summary of the testimony c. legal relevance 2. If a party fails to deliver on its promise, it severely undermines its credibility C. Presentation of the Evidence 1. Order of Proof a. plaintiff's entire case b. defendant's entire case c. plaintiff's rebuttal d. defendant's closing summation e. plaintiff's closing summation f. bifurcation request – separation between liability and damages i. save time and money on useless damage consideration if there is no liability (like in A Civil Action) ii. isolates evidence that is germane to only one of the issues 2. Testimony a. Direct Examination – attorney may not ask leading questions b. Cross-Examination c. Re-Direct d. Objection [sustain or overrule] e. Presentation of real evidence i. before real or demonstrative evidence is admissible, the attorney must establish a connection to the controversy 3. Summation a. review the evidence presented and highlight its significance b. attorney's argue how the applicable legal standards apply to the evidence presented D. Post-Trial Relief 1. Rule 50(b) – Judgment as a matter of law 2. Rule 59 – Motion for a new trial a. if the verdict was against the weight of the evidence
20 b. if the size of the damages were inappropriate c. otherwise necessary to prevent injustice 3. Conditional Dispositions of the New Trial Motion a. remittur – the court denies the motion on condition that plaintiff accepts a specified smaller award [once this is complete, no appeal is allowed] b. additur – coerce defendant into accepting a higher liability than the jury actually awarded –UNCONSTITUTIONAL 4. Motions for Reconsideration a. Rule 60(b) – authorizes the court to relieve a party from an adverse judgment or ruling upon such terms are just b. Reasons include: mistake, inadvertance, surprise, excusable neglect, newly discovered evidence, fraud, misrepresentation, or any other reason justifying relief XI. Appeals – Independent appellate review of legal issues best serves the dual goals of doctrinal coherence and economy of judicial administration
U.S. Supreme Court
Court of Appeals
District Court A. Supreme Court – nine justices who hear appeals on writ if certerori B. Court of Appeals – thirteen circuits (eleven numbered consecutively, plus the court of appeals for D.C. and for the federal circuit) All but the federal circuit is based on geography, while the federal circuit is based on subject matter 1. patent and certain claims against the government C. Rule 52(a) – factual determination by the district court shall not be set aside unless clearly erroneous D. Appealability 1. Who may appeal? a. parties to the original action, "aggrieved" by the lower court judgment b. cross appeals may be allowed but it is not usual that both parties are aggrieved unless it is a complex case 2. When may an appeal be taken? a. Final Judgment Rule – leaves nothing for the court to do except execute the judgment – this is usually the only time an appeal will be permitted (28 USC §1291) i. avoids disruption of the trial court proceedings ii. many issues may be mooted by the judgment
21 b. Interlocutory Appeals (non-final judgments) – are permitted from orders relating to injunctions, orders appointing receives to direct sales or other disposals of property, and decreed from the district courts determining the rights and liabilities of the parties to admiralty cases 3. Multiple Claims/ Parties and the Rule of Finality a. Rule 54(b) – gives the trial court the flexibility to weigh competing considerations on a case by case basis – provides the court the power to weigh a variety of factors in determining whether to certify the claim and allow a party to proceed with a partial appeal i. allows the district court to deal with multiple claims or parties to direct the entry of final judgment as to fewer than all of the claims or parties; to do so, the court must make an express determination that there is not reason for the delay b. Curtiss-Wright v. General Electric Co. - Petitioner sought review of judgment from the appeals court holding the trial court abused its discretion by granting Fed. R. Civ. P. 54(b) certification to petitioner. On appeal, the court vacated the judgment and remanded for further proceedings. The court explained Fed. R. Civ. P. 54(b) allows a trial court dealing with multiple claims to direct entry of final judgment as to fewer than all claims after making an express determination there is no just reason for delay. The presence of a counterclaim does not render certification inappropriate. An appeals court must scrutinize the trial court's evaluation of such factors as interrelationship of the claims so as to prevent piecemeal appeals in cases that should be reviewed only as single units. Once such juridical concerns have been met, the discretionary judgment of the trial court should be given substantial deference. Here, the trial court's assessment of equities between the parties was based on an intimate knowledge of the case and a reasonable one. Because the trial court found no other reason justifying delay, the court concluded the trial court did not abuse its discretion in granting petitioner's motion for certification. 4. Collateral Orders – treated as appealable final judgments a. Digital Equipment Corp. v. Desktop Direct, Inc. - The court of appeals dismissed the appeal, holding that the court order was not appealable under 28 U.S.C.S. § 1291 because it neither ended the litigation on the merits nor fell within the longrecognized collateral order exception to the final judgment requirement. On appeal from certiorari, the court concluded that despite petitioner's position that it held a right not to stand trial requiring protection by way of immediate appeal, the rights under private settlement agreements would be better vindicated on appeal from final judgment rather than a § 1291 collateral order appeal. The lower court's refusal to enforce the settlement agreement that was claimed to shelter petitioner from suit did not supply the basis for immediate appeal under § 1291. 5. Interlocutory Appeals – an appeal brought prior to final judgment a. Grants or Denials of Injunctions – 28 U.S.C. §1292(a) i. appellate review is immediate and does not require permission from the court
22 ii. injunction – temporary restraining order orders pursuant to Rule 65(b) b. Discretionary – 28 U.S.C. §1292(b) i. there must be substantial ground to believe that the ruling is incorrect ii. and that the litigation would be expedited by appellate review iii. this is rare 6. Extraordinary Writs a. Writ of Prohibition – forbids the judge from subjecting defendants to jurisdiction b. Writ of Mandamus – to require a judge to exercise particular authority c. All Writs Act – 23 U.S.C. §1651(a) – Congress provides the courts with the power to issue necessary writs E. Appellate Practice 1. "Perfecting the Appeal" – series of requirements that an appellant must comply with in order to effectively bring its appeal a. making an adequate objection to the trial court's decision b. filing a timely and sufficient form of appeal (Rule 3(a)) c. assembling an appellate record 2. Briefing and Oral Argument a. Rule 28 and 32 – form and elements b. Rule 31 – must be filed within 40 days after the record is filed and Appellee has 30 days to respond c. Oral Arguments may be dispensed if the panel assigned to the case find the lawsuit frivolous 3. Disposition – written opinion or affirmation or refusal without written opinion 4. Rehearing a. 14 days on the ground that the court overlooked or misunderstood a point of fact or law b. no oral argument is permitted c. En Banc – a losing party may seek a rehearing argued to ALL active judges (this is unusual F. Standards of Review 1. Pullman-Standard v. Swint - Appellant class action employee group brought a series of actions claiming that appellees corporation and union engaged in a number of racially discriminatory employment practices in violation of Title VII. There was a very lengthy and complex history to the actions and, ultimately, appellant was denied the relief sought and thereafter appealed. Appellant asserted errors with reference to rulings against them on the seniority system, the date from which appellee corporation's liability was measured, and the date that discrimination ended. On review, the court focused on the purpose of Title VII. The court found that there was no error in the lower court's determination of when appellee corporation stopped discriminating in assignments. The court agreed with appellant regarding the longer statute of limitations for the claims asserted. Furthermore, the court did find merit regarding aspects of a portion of the former employees' claims regarding the seniority system in that relief could have been awarded. Further, appellee corporation could have been liable for any discrimination in departmental assignments. The decision was reversed and remanded in this respect.
23 2. Clearly Erroneous Standard – "to be clearly erroneous, a decision must strike the court as more than just maybe or probably wrong, it must strike the court with the force of a fiveweek old, unrefrigerated dead fish"
XII. Prior Adjudication A. Claim Preclusion – res judicata - forbids the relitigation of the same "claim" in a subsequent proceeding [could have been raised] 1. Rush v. City of Maple Heights - The court reversed a judgment against defendant city for personal injuries suffered by plaintiff and entered judgment for defendant. Plaintiff was injured in a motorcycle accident and prevailed on a claim for property damage against defendant for failing to maintain the roadway. Plaintiff filed a second action for personal injuries, which was resolved in her favor based on res judicata. The court reversed, holding that plaintiff could not split her cause of action and file separate actions for property damage and personal injuries based on the same accident. The court adopted the majority rule and held that if a person suffers both personal injuries and property damage as a result of the same wrongful act, there is only a single cause of action, and the different injuries are separate items of damage, not separate causes of action a. The final adjudication of a material issue by a court of competent jurisdiction binds the parties in any subsequent proceeding between or among them, irrespective of a difference in forms or causes of action. b. A right, question or fact in issue which was necessarily determined by a court of competent jurisdiction in a judgment which has become final, cannot be disputed or litigated in a subsequent suit between the same parties, although the subsequent suit is based upon a different cause of action. 2. Herendeen v. Champion International Corp. - First lawsuit was brought in state court . . . plaintiff claimed breach of contract relating to the oral agreement to agree re: new employment (including fraudulent inducement with respect to leaving thinking that he would have a new job.) He was seeking to recover pension benefits that he lost as a result of not getting the new job. At the time of the suit, he had already terminated his original employment. The first suit was dismissed for failure to state a claim (this is rare in Federal Court because of Rule of 11). The second lawsuit was about pension benefits that were withheld during his first employment. These were found to be separate claims B. On the Merits – with prejudice 1. Costello v. United States - Appellant former employee brought suit against appellee former employers in state court, alleging that appellees induced him to leave the paper business in order to deprive him of his employee and pension benefits. The state court entered judgment for appellees on the ground that there was no enforceable contract and that appellant therefore failed to state a claim upon which relief could be granted. Thereafter, appellant commenced an action in federal district court seeking to obtain pension benefits that vested before he resigned. The court concluded that the issues set forth in plaintiff's complaint had been previously decided in the state court proceeding and dismissed the complaint on the ground of res judicata. On appeal, the court held that while the same parties were defendants in both suits, the requisite measure of identity of the two causes of action essential to support the trial court's finding of res judicata was not present.
24 The court held that because appellant in his second suit had set forth an independent claim of wrongdoing, the federal action was not barred by the state court judgment. The court reversed the judgment and remanded for further proceedings. The court reversed the judgment of the district court that dismissed appellant former employee's complaint on the ground that it was barred by res judicata because it held that appellant in his second suit had set forth an independent claim of wrongdoing and that the federal action was not barred by the state court judgment. 2. Rule 41(b) – defines which issues of dismissal are regarded as with prejudice a. failure to comply with prejudice b. failure to prosecute c. exceptions are lack of jurisdiction (dismissed without prejudice) C. Issue Preclusion – Collateral Estoppel – forbids relitigation of specific determinations made in prior proceedings [must have been raised] 1. Little v. Blue Goose Motor Coach Co. - Plaintiff challenged the lower court's decision to reverse a recovery under the Injuries Act, in the death of her husband arising out of a motor vehicle accident with defendant. The declaration consisted of two counts. The first was a general charge of negligence, and the second charged that the defendant willfully operated its bus, causing injury to the deceased .Defendant moved to instruct the jury to find defendant not guilty because of another judgment against plaintiff, alleging that the issue of the negligence of plaintiff's husband and that of the driver of the bus was settled and could not be raised in the present suit. The court affirmed the decision below and held that plaintiff could not bring an action for damages because it was based on circumstances under which her husband, were he alive, could not bring an action against the defendant. (Who was negligent was determined in the first lawsuit) although contributory negligence does not bar a willful act, the appellate court made a finding of fact precluding the second lawsuit. a. you could also use claim preclusion because he should have brought it during the first litigation – judicial efficiency is still the goal! – But the first was in front of a justice of the peace, and the second could not be brought there because of the amount in controversy b. Rule 13(a) compulsory counter-claim on the defendant‟s side (contributory negligence) c. How do we determine whether the same issue is involved? i. relevance to the action that caused the suit ii. look to the pleading iii. look to the final pretrial order iv. trial transcript v. jury instructions vi. general verdict form v. special verdict form ~ special is more helpful (Rule 49) because the jury answers factual questions as to why they decided the way they did 2. Kaufman v. Eli Lilly & Co. - The trial court gave collateral estoppel effect to jury findings in a related, prior case, holding the drug manufacturer liable to a different plaintiff for acting in concert with the other drug manufacturers in inadequately testing diethylstilbestrol (DES), which was ingested by that plaintiff's mother and the injured
25 party's mother during pregnancy. The court held the concerted action finding should not be given such effect because the appropriateness of this novel theory was an open question not litigated in the prior case due to failure to object. The drug manufacturer was properly precluded from relitigating the other issues because they related solely to the facts underlying negligent testing and the pregnant mothers ingested DES in the same time period and the daughters developed similar cancers at the same age [offensive] a. the first suit is Blchler v. Eli Lilly – the first 15 actions i. a set of seven findings of fact set out by the jury in that case b. the second suit is Kaufman – the issue is whether nonmutuality of parties should be permitted (she tried to use 6 of the issues to try to preclude Eli Lilly from relitigating) c. if Kaufman was not a party, she is not bound by an adverse judgment, but Eli Lilly was a party in the first lawsuit d. a nonparty may benefit if they meet their burden; i. identify the “same issues” offensively brought up ii. actually litigated e. court has discretion as to fairness i. the need for uniformity and certainty D. Parties Bound and Advantaged – only those who are parties to the lawsuit may be bound by the judgment, unless they are somehow in privity with the party so bound 1. Vicarious Representation --- Privity --- “Virtual Representation” a. General Foods v. Mass. Dept of Public Health - Appellant food packaging companies filed an action for declaratory judgment and injunctive relief against appellee department of public health, alleging the unconstitutionality of a state open date food labeling regulation, Mass. Regs. Code tit. 105, § 520.119. Appellants challenged the district court's judgment, which granted a motion to dismiss in favor of appellee because the matter was precluded by claims made in a previous litigation. On appeal, appellants contended that the judgment in the previous litigation did not preclude appellants from maintaining the present action. The court affirmed the judgment as to one appellant because appellant impliedly authorized parties in the previous litigation to represent it in the litigation and contributed money toward the expenses of the previous litigation. The court vacated the judgment as to the other appellant because the undisputed facts did not show that appellant controlled the trade association in the previous litigation, or expressly or impliedly authorized the trade association to represent it in the previous litigation, or participated in that litigation. [Defensive] i. Choice of Law – what persons are bound by a valid judgment is determined by the local law of the State where the judgment was rendered ii. Constitutional Issues – a non-party is protected from being bound by an in personum judgment unless he had directly or vicariously argued and presented evidence on his behalf. Federal Question of Due Process! iii. The Doctrine of Privity – the category includes parties represented by a formal agent or trustee; as well as members of a class action iv. 12(b)(6) – motion to dismiss for failure to state a claim – pretrial motion
26 v. 12(c) – motion to dismiss on the merits – trial motion – ripe to convert to a summary judgment motion [Rule 56(f) – summary judgment is appropriate after discovery] 2. Mutuality – only a party may take advantage of the prior judgment a. Defensive Nonmutual Estoppel – defendant is asserting another party‟s victory against plaintiff as a defense (should have joined pursuant to Rule 19) i. Bernhard v. Bank of America Nat’l Trust & Savings Assoc. – [The Bernhard Rule] – If a party has had a full and fair opportunity to litigate an issue in one action, there is no reason to waste the time of the court and other persons in relitigating that issue ii. Indemnification Exception b. Offensive Nonmutual Estoppel – another party‟s victory against defendant to preclude defendant from contesting the issue of liability [discretionary bar as to fairness] i. Parklane Hosiery Co. v. Shore – In action 1, the SEC files suit against corporations for false statements in a proxy solicitation in connection with a proposed merger. Judgment is rendered against corporation. In action 2, shareholders file suit against corporation seeking damages as a result of their reliance on the same proxy solicitation. The judgment rendered against corporations in the SEC action may be held to bar corporation from relitigating the issue of whether the solicitation was false or misleading. ii. non-party has the burden of establishing the identity of issues ~ must show that defendant was a party or was in privity with that party – the burden then shifts to defendant to show that it would be unfair – this prevents a wait and see plaintiff iii. Party Autonomy – the party governs itself “master of its claim” iv. at a bench trial the judge must (52(a)) conclude the law in order to identify issues from the first trial v. the pleadings in the second complaint 3. Litigating against the Government – federal government is not subject to issue preclusion from prior determination in litigation with different parties 4. Interjurisdictional Preclusion – in some circumstances, preclusion may represent an incursion into the sovereign prerogatives of the enforcing state a. Full Faith and Credit – the judgment must receive the same respect in another jurisdiction b. State/Federal Preclusion – the policy of full faith and credit may defeat the substantive goals of federal law. c. Interstate Preclusion – must give full faith and credit which concludes how that case would be treated as far as estoppel d. Enforcement and Recognition of Foreign Judgments i. Based on acts implementing treaties ii. Makes international decision hard to enforce
27 Claim Preclusion Judgment must be: On the same claim Final Valid; and On the merits Issue Preclusion Issue decided in prior action was: Actually litigated Essential to the first judgment; and Identical to the issue presented in the instant action
Party against who claim preclusion is sought was a party to the prior litigation or in privity with such a party
Party against whom issue preclusion is sought was a party to the prior litigation or in privity with such a party
XIII. The Boundaries of the Lawsuit: Joinders of Claims and Parties A. Real Party in Interest – Rule 17(a) requires that the lawsuit be brought in the name of the person in possession of the substantive right to recover B. Joinder of Claims 1. By Plaintiffs a. Common Law – plaintiffs could join claims in a single action only if the claims belonged to the same form of action b. Field Code – created categories under which plaintiffs could join claims; i. A contract ii. Injuries by force to property or person iii. Injuries without force to property or person iv. Injuries to character v. Claims to recover real property vi. Claims against a trustee vii. Same claim c. Rule 18 – does not require any transactional relationship between the claims in order for them to be joined 2. By Defendants and Co Parties a. Counterclaims i. Grumman Systems Support Corp. v. Data General Corp. b. Cross Claims – claims asserted between previously adverse coparties i. Rule 13(g) the purpose is to permit a defendant to state as a cross-claim a claim against a co-defendant growing out of the transaction or occurrence that is the subject matter of the original action 3. Compulsory Joinder – Rule 19(a) provides that any person with an interest in the subject matter of a pending action shall be joined as a party if; a. in his absence, complete relief cannot be accorded those already parties
28 b. his interest is such that to proceed without him would be substantially prejudicial as a practical matter because it would i. impair his ability to protect his interest in later proceedings ii. expose the parties already before the court to the risk of double liability or inconsistent obligations 4. Permissive Joinder – Parties may join or be joined in one action if; a. a right to relief is asserted by (or against) them jointly, severally, or in the alternative; b. the right to relief arises out of the same transaction or series of transactions; and c. there is atleast one question of law or fact common to all parties sought to be joined C. Impleader – Rule 14 1. Common Law – a defendant could “vouch in” a third party who had given a warranty of title or who had agreed to indemnify the original defendant 2. Modern Law – allows a defendant to join the third party in the main lawsuit, and it extends to any type of indemnification or contribution relationship (prior business relationship may due) a. May not be brought invoked by a defendant who asserts only that plaintiff has sued the wrong party. 3. Indemnification – impleader is confined to those situations in which the defending party has the right to indemnity, in whole or in part, against the impleaded third party 4. Jurisdiction – even if there is not subject matter jurisdiction, there may be supplemental jurisdiction a. 1367(b) – limitations placed on plaintiff seeking to join or intervene D. Intervention – a procedure whereby a non-party, upon timely application, may become a party in a lawsuit in order to protect her interests in that action 1. As of right – Rule 24 a. When a federal statute confers a right to intervene b. When the applicant claims an interest relating to the property or transaction which is the subject of the action, and the applicant is so situated that the disposition of the action may be as a practical matter impair or impede the applicant‟s ability to protect that interest, unless the applicant‟s interest is adequately represented by existing parties. c. Rule 24(a) – requires that the intervenor have a legally protected interest 2. Permissive Intervention – Rule 24(b) a. Where a federal statute confers a conditional right to intervene b. When the applicant‟s claim or defense and the main action have a question of law or fact in common c. Within the discretion of the trial court 3. Mandatory Intervention
29 E. Interpleader – a device that enables a party against whom conflicting claims with respect to the same debt or property are asserted to join all the adverse claimants in the same action and require them to litigate among themselves to determine which, if any, has a valid claim to the debt or property involved 1. Rules 19 – 24 protects the interests by either bringing potentially affected parties into the litigation, or by dismissing the litigation in their absence 2. Statutory interpleader - §1335 – contains special provisions as to jurisdiction, venue, and service of process, if; a. two or more claimants are of diverse citizenshio are making adverse claims to the same debt, instrument, or property owed or held by the plaintiff; and b. the debt, instrument, or property has a value of atleast $500 3. Rule 22 – permits impleader in any action that meets the normal jurisdictional requirements in federal court – a sufficient amount in controversy (if applicable) and diversity or federal question F. Class Actions and Other Complex Joinder Devices 1. Class Actions a. True Class Action – one where the rights of all members of the class were joint or common. A judgment rendered in such an action bound all members of the class, including absentees. For example, stockholders‟ suits and suits by or against the members of labor unions or other unincorporated associations b. Hybrid Class Action – one where the subject of the action had separate rights therein. A judgment in such action was conclusive upon the rights of all members in the specific fund or property involved, but did not otherwise affect or bind class members not before the court c. Spurious Class Action – one where there was simply a common question of law or fact, affecting all members of the class, and the claims of each member were separate. A judgment in such an action bound only those members of the class actually before the court. Accordingly, this was not really a class action, but rather a permissive joinder device b. Rule 23 – eliminated the distinction above and provided that members of a class can be sued with binding effect on the class as a whole. 2. Predominance factors; a. the interest of individual members in personally controlling their cases b. the nature and extent of any litigation in progress involving the same controversy c. the desirability of consolidating all claims in a single action before a single court; and d. any probable difficulties managing a class action XIV. Alternative Dispute Resolution A. Settlement 1. Contract – an agreement entered into b the parties to a dispute for the purposes of rendering some or all of their claims a. Usually they can agree to whatever they want, but there are some exceptions; i. 23(e) class actions B. Settlement Negotiations and Strategic Behavior
30 1. Imbalance of information 2. Personal litigation styles 3. Relationship between the attorneys C. Special Forms of Settlement Agreements 1. Mary Carter Agreement – arises in a lawsuit that has multiple parties on either side of the dispute. One party, usually the defendant secretly agrees to settle its claims with plaintiff. Here, they do not alert the court of the settlement. As part of the bargain, the defendant agrees to help the plaintiff prosecute the other defendants (look upon with disapproval) 2. High-Low agreement – the parties basically give themselves an insurance policy against extreme results at trial. This agreement sets a range of possible outcomes that the parties find acceptable. D. The Forms and Functions of ADR 1. Adversarial a. Arbitration – trial like hearing before an arbitrator. Available in civil actions where damages are less than $150,000, except civil rights or constitutional claims. Rules of evidence and procedure are relaxed. The arbitrator‟s award will be entered as a court order unless a trial de novo is timely demanded 2. Alternative a. Mediation – a neutral third party who attempts to find common ground on which the parties can reach an agreement and resolve their dispute. 3. Supplemental a. Mandatory Arbitration b. Mandatory Mediation c. Mini-Trials and Summary Jury Trials – i. usually occurs once a final pretrial order has been entered ii. proceeded in normal manner (before judge or jury) iii. summaries of the lawyers iv. instruction by the court v. verdict vi. effort to settle vii. can be binding if agreed upon by the parties d. Rent-a-Judge E. ADR and Public Values 845 – 873 886 -912 12(b)(6) v. 12(c) ???????? what makes a case complex? Multiple parties Multiple claims Rule 20(a) –permissive Technical or Scientific info experts – Rule 26(b)(4) Mass torts
31 Consolidation – Rule 42(a) Rule 8(e)(2) permits you to plead in the alternative! Rule 23(a) – Class Action prerequisites 1. no 2. Declaratory Judgment Act – remedy, must look at the underlying complaint Right to Trial by Jury – if the claim is cognizable at common law, than the party has a right to jury trial if the remedy that is sought is money damages, than there will be a jury trial, but if you fail to seek it at the appropriate time, it can be waived Summary Judgment – apply the well pleaded complaint rule If no diversity, no reason to be in federal court Absolved of having to honor because of intervening statute Reverse the parties, would the plaintiff be the defendant here if defendant sought this, than it arises under federal law Look to what form of relief they would have Collateral Order Doctrine – under Interlocutory Appeal Forum non convenien is only applicable when transfer under 1404, 1406 is not available