civil procedure outline – Vaughns 1 CIVIL PROCEDURE GENERALLY For a court to have jurisdiction there must be: 1. Subject matter jurisdiction 2. Personal jurisdiction 3. Venue Concurrent jurisdiction – the majority of cases can be heard in state court; only those issues reserved exclusively for the federal courts (e.g. maritime law) cannot be heard in state court (procedural issues). Supplemental Jurisdiction – state and federal courts share issues substantively. Jurisdictional dismissal – dismissal for lack of SMJ or PJ and is w/o prejudice. Merits dismissal – is w/prejudice unless it was dismissed w/leave to amend. Preemption – If one court system preempts the other substantively. Direct and Collateral Attacks: Direct – show up and assert the challenge, which can be appealed (single lawsuit). Collateral – if you attack only after someone has come to get you (two lawsuits). Standards of Review: 1. Independent/plenary: a. DeNovo/Plenary 2. Deferential: a. Clearly erroneous b. Abuse of discretion Standards of Proof: 1. Preponderance of the evidence – civil 2. Beyond a reasonable doubt – criminal 3. Clear and convincing – for fraud and misrepresentation FRCP Underlying Concepts: FRCP 1 – federal courts and attorneys who appear before them are required to construe and administer the rules in a manner that achieves the just, speedy, and inexpensive determination of each action – considered the “touchstones” of civil procedure. FRCP 82 – these rules shall not be construed “to extend or limit the jurisdiction of the U.S. district courts or the venue of actions therein,” meaning that SMJ and venue are determined by statute and are not affected by the rules (except for joinder of ancillary claims and parties). civil procedure outline – Vaughns 2 SUBJECT MATTER JURISDICTION I) Subject matter jurisdiction generally – state courts generally have full subject matter jurisdiction, and the way into federal court is through Subject Matter Jurisdiction (SMJ), either via federal question or diversity jurisdiction. A) Kind of controversy – subject matter jurisdiction refers to the kind of controversy rather than to the parties. B) Party claiming federal jurisdiction has the burden of proving that the issues falls into federal jurisdiction. C) Subject matter jurisdiction cannot be waived and can be raised at any time either by the parties or the courts. D) If a party loses a motion for federal SMJ, they can refile in state court. II) Diversity Jurisdiction – when parties are completely diverse, the case can be brought before federal court. A) Sources of Authority: 1) U.S. Constitution, Article III, §2 – “ the judicial power shall extend to all cases … to controversies between two states, between a state and citizens of another state, between citizens of different states…” 2) U.S.C. 28 U.S.C. §1332: repeats Art III, §2 and adds an amount in controversy requirement of >$75,000. 3) Policy Rationale – to avoid local bias and provide for a fair trial. B) Complete Diversity requirement – was judicially established in Strawbridge (1806)(was not Constitutionally compelled). Congress has not legislated otherwise and so the requirement stands. 1) This requirement is easy to defeat by adding an additional in-state D. C) Exceptions to Diversity Jurisdiction – to avoid overloading the federal system there are several types of diversity cases that fed court can decline to hear, including: 1) Domestic relations (e.g. divorce and child custody). (a) Judicial interpretation. (b) Sexual assault is a tort and would still qualify for diversity. civil procedure outline – Vaughns 3 2) Probate. D) Determining Citizenship – Citizenship, for diversity purposes, is established at the time the complaint is filed. 1) Citizenship of natural individuals – (a) People are considered to be residents/domicilliaries of the state where: i They have a fixed and habitual residence, and ii The intent to remain indefinitely (not necessarily forever.) (b) Changing domicile – you retain your domicile until you change it, which requires: i Physically go there, and ii Form the subjective intent to remain there. (c) Administrators and guardians are citizens of the state of the person that they are representing. (d) Americans living abroad indefinitely do not reside in any state and thus do not have diversity against another American citizen from a state. (e) Alienage jurisdiction – 28 U.S.C. §1332 (a). i Suits between citizens of a state and a foreign country or citizens thereof satisfies diversity (a)(2). ♦ Example – P (Georgia) v. D (Afghanistan) = diversity. ii Citizens of different state that are joined by subjects of the same foreign country do not defeat diversity (a)(3). ♦ Example – Ps (Ohio & Canada) v. Ds (NJ & Canada) = diversity. iii Resident aliens – aliens admitted to the U.S. for permanent residence are considered to be citizens of the state in which they are domiciled. iv Policy rationale for alienage jurisdiction – both to avoid bias and for foreign relations. civil procedure outline – Vaughns 4 2) Citizenship of corporations – “A corporations shall be deemed to be a citizen of any state by which it has been incorporated and the state in which it has its principal place of business…” 28 U.S.C. §1332 (c)(1). (a) Principal place of business (can only have one ppb) can be decided by either or both of the following two tests: i Nerve center – corporate headquarters, decision making ability. ii Bulk of activity/Major place of business – where the corporation has most of its production and assets invested. 3) Unincorporated associations (e.g. limited partnerships and labor unions) are not considered corporate citizens for diversity and instead the citizenship of each member must be considered, thus usually defeating diversity (Carden v Arkoma). E) Improper/Fraudulent Joinder – Diversity cannot be fabricated solely to reach federal court. 1) 28 U.S.C. §1359 – “A district court shall not have jurisdiction of a civil action in which any party, by assignment or otherwise, has been improperly or collusively made or joined to invoke the jurisdiction of such a court.” (a) Purpose – to avoid sham federal jurisdiction. (b) Failure to name indispensable parties – plaintiffs cannot create diversity by failing to name indispensable parties as part of a suit. (c) Devices to defeat removal – Ps trying to defeat removal are given more leeway in their attempts to foil removal. i Removal cannot be defeated by the joinder of a non-diverse defendant if that party has no bona fide claim. ♦ Example – In Rose v Giamatti, P added Cincinatti Reds and Major League Baseball as co-defendants to defeat diversity and removal, but court held that Reds and MLB were not related to the principal purpose of the suit, they were not real parties, and thus were fraudulently joined. F) Amount in Controversy – To establish diversity, the amount in controversy must be >$75,000, as determined by Congress to limit the cases to the federal courts, but is not a constitutional requirement (28 U.S.C. §1332(a)). 1) Evaluation of amount in controversy: civil procedure outline – Vaughns 5 (a) Timing – the amount in controversy is determined at the time the complaint is made. (b) Proof of amount in controversy – the party claiming diversity does not have to prove that the amount in controversy meets the statutory amount, just that there is some possibility that that much is in question. Once it has been established it will hold for the entire case. i Standard for dismissal – it must appear to a legal certainty that the amount in controversy is ≤ $75,000 to justify dismissal. ii Good faith – if P made the estimate in good faith, her claim will usually be sustained for diversity purposes. (c) Actual amount of ultimate recovery is irrelevant. 2) Aggregation of claims to reach the Amount in Controversy – depending on the situation, sometimes claims can be aggregated. (a) Claims can be aggregated when: i A single P may aggregate against D no matter how dissimilar the claims: ♦ One P sues one D on two related claims (e.g. $70K personal injury and $6K damage to car). ♦ One P sues one D on two unrelated claims. ii Two or more Ps sue D for the same claim and none of the Ps meet the amount in controversy or only one meets amount in controversy – aggregation is allowed only when Ps have united to enforce a single title or right in which they have a common and undivided interest (e.g. joint tenants). (b) Claims cannot be aggregated when: i Two or more Ps sue D for the same claim and at least one P meets the amount in controversy (although this may be defeated by supplemental jurisdiction). ii Class action – Zahn held that all Ps in the class must meet the amount in controversy, but that has been nullified by supplemental jurisdiction (although still a split in the courts whether Zahn is good law). iii Two Ps sue one D on two unrelated claims. civil procedure outline – Vaughns 6 III) Federal Question – Federal courts are authorized to adjudicate questions arising under the constitution. A) Sources of Authority: 1) U.S. Constitution, Article III, §2 – provides broad judicial authority to “extend to all cases, in law and equity, arising under this constitution, the laws of the U.S., and treaties made…” Federal issue can be an “ingredient” of the case. 2) U.S.C. 28 §1331: Federal question – follows the Constitution and been interpreted more narrowly: “The district courts shall have original jurisdiction of all civil actions arising under the constitution, laws or treaties of the U.S.” (a) Procedurally – if a case is dismissed for want of federal SMJ, it can be refiled in state court. 3) Original jurisdiction v. Appellate jurisdiction – courts will used the narrower §1331 standard when evaluating original jurisdiction cases, and the broader constitutional language of “arising under” for appellate review. B) “Arising under” – is not clearly defined, but generally the suit must be “a substantial claim founded directly on federal law” or “either that federal law creates the cause of action or that the P’s right to relief necessarily depends on resolution of a substantial question of federal law” for appellate review. 1) Well Pleaded Complaint Rule – the federal issue must arise on the face of the complaint to allow a determination to be made at the earliest point possible. (a) Anticipatory defense not sufficient to establish federal question jurisdiction – the federal question must be integral to the case as revealed in the complaint – only the elements necessary to state the claim (e.g. Mottley v. RR). (b) Federal element must be an essential one – Just because a federal issue is raised in the complaint doesn’t necessarily confer federal SMJ; the federal element must be an essential one to resolving the case (e.g. Gully – federal tax issue was raised but the real issue was a state contract claim). 2) State Law Claims turning on a Substantial Federal Issue – if the resolution of a state claim issue depends on a proposition of federal law, courts may grant federal SMJ. civil procedure outline – Vaughns 7 (a) Smith v. Kansas – where the federal issue, the constitutionality of the law authorizing the bonds, was embedded in the state claim regarding corporations and essential to its resolution. i Political rationale – increased federal court intervention may relate to the impact of federalism – i.e. if federal SMJ will not interfere with state’s rights, court may be more willing to grant. 3) Federal Issues without a Private Cause of Action – Court ruled that a federal law must create a private cause of action before arising under jurisdiction can exist. (a) Ps bringing a state product liability suit that turns on violation of a federal statute is not “arising under” b/c Congress specifically denied a private right of action as part of the statute (Merrell Dow). (b) Substantial federal interest will prevail – even if there is not a private cause of action, if the federal interest is substantial enough the court can find federal SMJ (following Smith). 4) Declaratory Judgment Procedure (28 U.S.C. §§2201-2202) – creates a jump start for a likely D that will declare a certain position and allows a party who believes they may be sued to take the offensive and become the P (making the defense the asserted complaint). When the declaratory judgment procedure is used to try to obtain federal SMJ, the court will still look at the actual basis of the coercive action that it anticipates would actually fall under federal law (e.g. can’t use to manipulate SMJ). (a) Example – if Ds in Mottley received a declaratory judgment, thus raising the federal issue in the complaint (originally would have been in the defense), it would not fall under federal SMJ. IV) Supplemental Jurisdiction – allows two related claims, only one of which would have federal jurisdiction, to be heard together for purposes of judicial efficiency. A) History of Supplemental Jurisdiction: 1) Pendent Jurisdiction – allowed two claims by P, one state and one federal (anchor claim), to be combined under one federal case if the claims “arise from the same nucleus of operative facts” (Gibbs). (a) Legal rationale – if a claim is proper under article III cases & controversies requirement, then the court has the power to hear the entire dispute. A case includes all claims that arise from the same set of historical facts. civil procedure outline – Vaughns 8 (b) Policy rationale – efficiency. (c) Discretionary – pendent jurisdiction was authorized, but not required. The discretionary decision was based on a number of factors including: i Whether the state law claim predominates. ii Whether the court would have to decide novel issues of state law. iii Whether hearing the claims together would confuse a jury. iv Whether the federal issues are resolved early in a case, leaving only a state law decision. 2) Ancillary Jurisdiction – allowed related claims asserted by defendants or other parties after the complaint (e.g. compulsory counterclaim) if there was a logical relationship between the claims. (a) Ex – P sued D under federal anti trust laws and D counter claimed on a state claim and court upheld jurisdiction b/c the claims arose from the same transaction as the main claim (Moore v. NY Cotton). (b) Legal rationale – similar to pendent, court could authorize jurisdiction because the claims were part of a “single constitutional case”; efficiency. 3) Statutory Limits on Pendent and Ancillary Jurisdiction – were imposed in several cases (Kroger – court foreclosed pendent jurisdiction over claims by a P in diversity cases against a non-diverse D & Finley) where court looked to determine if authority was conveyed to the federal courts via statute and restricted pendent jurisdiction. Analysis thus became: (a) Case arises from common nucleus of operative facts. (b) Analyze Congressional intent behind the federal claim to determine if there was the intent to confer broad jurisdiction over all claims of a case. (c) Discretionary factors (see above). 4) Supplemental Jurisdiction is created by Congress 28 U.S.C. §1367 (1990) as a result. B) Supplemental Jurisdiction: 28 U.S.C. §1367 provided the statutory authorization for federal courts to hear related claims as part of one case. 1) General authority -§1367(a) provides that “any civil action of which the district courts have original jurisdiction, the district courts shall have civil procedure outline – Vaughns 9 supplemental jurisdiction over all claims that are so related to claims in the original action that they form part of the same case or controversy…” 2) No end run around diversity requirement -§1367(b) provides that if the original federal jurisdiction is based solely on diversity, court can’t hear the supplemental parties (via joinder, etc.) unless they are also diverse. (a) Only for plaintiffs – D can counterclaim against a non-diverse party. 3) Supplemental jurisdiction remains discretionary -§1367(c) provides discretionary factors similar to Gibbs that allow courts to decline jurisdiction over supplemental claims: (a) Whether the state law claim predominates. (b) Whether the court would have to decide novel issues of state law. (c) Whether hearing the claims together would confuse a jury. (d) Whether the federal issues are resolved early in a case, leaving only a state law decision. C) Supplemental jurisdiction analysis now includes: 1) Constitutional power to hear claim – original federal SMJ to hear first claim. 2) Statutory authority to hear case: (a) 1367(a) – same constitutional case/nucleus of operative facts. (b) 1367(b) – limits supplemental jurisdiction for Ps if first claim is based on diversity to uphold 1332. (c) 1367(c) – courts have discretion to deny case based on discretionary factors. V) Removal of Cases to Federal Court (28 U.S.C. §1441) – once the P has filed in state court, D has the chance to “remove” to federal court in cases where the federal court would have had original jurisdiction (§1441(a)). Only original D can remove. A) Purpose – in cases where there could be federal jurisdiction, it allows D to claim this jurisdiction in the name of fairness. B) Criteria – case must be one where the feds would have had original jurisdiction (except for protection of court officers, military, etc. (§1442): civil procedure outline – Vaughns 10 1) Diversity cases – D can remove where there is complete diversity and the suit was not filed in D’s home state (§1441(b)). (a) P can try to defeat by adding non-diverse Ds, but fraudulent joinder rules still apply (e.g. Rose). 2) Federal question – if P raises a federal question, but files in state court, D can remove to federal court. (a) Just because D believes that there is a federal issue does not justify removal – P had to claim it as part of the complaint (P is the master of his complaint). (b) Removal of multiple claims – if separate and independent federal claims are part of the same case as non-federal claims, the entire case can be removed (§1441(c)). i Rationale – prohibits P from adding a number of non-federal claims to case to defeat removal. C) Limitations on Removal – 1) Non-removable claims – some claims are not removable as defined in (§1445). 2) Location of removal – cases will be removed “to the district court of the United States for the district and division embracing the place where [the state] action is pending” (§1441(a)). 3) If there are multiple Ds, all Ds must agree to removal. D) Original state-court jurisdiction not required for removal (§1441(e)). 1) Example – if P files a copyright case in state court, D can remove even though the state court never really had jurisdiction. (a) Rationale – prevents case from being dismissed. E) Removal procedures and mechanics (§1446-§1450). 1) Filing – D must file for removal within 30 days of receipt of the complaint (§1446(b)) by filing a notice of removal to the district court. civil procedure outline – Vaughns 11 2) Amended complaints – Removal can be made within one-year of the original complaint as long as it is within 30 days of the amended complaint and federal jurisdiction is based on diversity (§1446(b)). (a) Example – P files a diversity case in state court for $10,000, and 6 months later, amends to $100,000. D can now file for removal. 3) Remand (§1447) – federal court may remand case to state court if federal SMJ is lacking or otherwise doesn’t satisfy removal. PERSONAL JURISDICTION AND COURT ACCESS RULES I) Personal Jurisdiction Generally – Established as a way to limit state court’s “power” to adjudicate over individuals – to determine “in what state can D be sued?” A) Purpose – to ensure fairness for Ds based on where they can be required to defend a lawsuit. 1) 14th Amendment – Based on due process requirement that D’s have a right to fair judicial procedure. (a) Procedural due process – notice. (b) Substantive due process – amenability to suit. B) Types of personal jurisdiction: 1) In personam – over the person. 2) In rem – jurisdiction over a thing (e.g. property). 3) Quasi in rem: (a) Settling claims related to an interest in the property. (b) Settling claims by attaching property to satisfy a prior claim (claim is unrelated to property). i Quasi in rem no longer used on its own – Shaffer (derivative shareholder suit) established that quasi in rem could only work when the minimum contacts needed for personal jurisdiction were satisfied for reasons of fairness and justice. ♦ → Now quasi in rem can’t do anything better than minimum contacts. civil procedure outline – Vaughns 12 C) Specific v. General Jurisdiction: 1) Specific jurisdiction – D can only be sued in the forum for contacts that are related to the claim sued upon (either a single act or systematic and continuous)(see below). 2) General jurisdiction – D can be sued based on claims arising from anywhere – does not have to be contacts related to the claim – as long as the contacts in the state are systematic and continuous and generally “substantial” and is inliin with general notions of “justice and fairplay”. 3) Line between specific and general is not always clear. D) Procedurally – if personal jurisdiction is challenged directly and rejected in federal court, party cannot refile in state court b/c state and fed courts use the same inquiry to determine personal jurisdiction. E) Historical background – 1) Pennoyer v. Neff and the “Power theory of jurisdiction” – presence in the state was originally the chief basis for personal jurisdiction. The state could not reach outside of its boundaries to establish jurisdiction. (a) Narrow standard – hard to achieve in many cases. F) Factors in jurisdictional calculus include: 1) In state contacts (most important – see below) balanced with factors below to ensure “fair play and substantial justice”: (a) Interest in forum state of providing redress to its citizens. (b) Interest of P in obtaining relief in a convenient forum. (c) Interest of state in enforcing its substantive law or policy. (d) Extent of inconvenience for D if forced to defend away from home. 2) Even if minimum contacts are established, personal jurisdiction can be denied if it is outweighed by the other factors (e.g. Asahi). civil procedure outline – Vaughns 13 G) Personal Jurisdiction Analysis – 1) Is personal jurisdiction authorized by state statute (states can have personal jurisdiction equal to or less than Constitutional limits). 2) Is personal jurisdiction constitutional based on due process clause? II) Constitutional Bases for Personal Jurisdiction (due process boundary) A) Physical presence – individual’s voluntary presence, even if brief, can confer personal jurisdiction (e.g. Pennoyer). 1) State has personal jurisdiction over an out-of state-resident if they are served while in the state. (a) D was in state just for a brief visit unrelated to the suit, and service was made and personal jurisdiction upheld (Burnham – but no majority). i Plurality – Scalia brightline – jurisdiction based on Pennoyer. ii Others – presence here would suffice b/c there was slight but adequate purposeful availment, but there could be situations in which it would be unfair. ♦ Based on Burnham, service on someone while in the airport on a layover, result is unclear. (b) D was served in an airplane while flying over a state and personal jurisdiction was upheld – “tag” jurisdiction (Grace v. McArthur). i Represents the outer limits of the physical presence theory. B) Domicile – general personal jurisdiction may be exercised over any individual who is domiciled in that state, even if temporarily absent. 1) Rationale – someone who is a domiciliary of a state is receiving the benefits and protections of that state, and thus can expect to defend a suit therein – reciprocity. 2) Domicile defined – same as used for diversity purposes = where they have a fixed and habitual residence and the intent to remain indefinitely. 3) Notice requirements – must be followed. 4) Statutory authorization – most courts have held that personal jurisdiction based on domicile must be authorized by statute. civil procedure outline – Vaughns 14 (a) A California statute authorizing personal jurisdiction was used retroactively to grant personal jurisdiction over insurance companies writing policies on its residents (McGee v. International Life Insurance). C) Consent – A party can consent to in-state jurisdiction even without in-state contacts in a number of ways: 1) Filing an action – a P has submitted to personal jurisdiction by filing a suit. 2) General appearance – If D makes an appearance in the forum state to contest the case on the merits, he has submitted to that states personal jurisdiction. 3) Forum selection clauses – are often included in contracts and will be upheld as long as they are “fundamentally fair.” (a) Example – Ps agree to FL forum selection clause when they go on a cruise, which is later upheld because i) passengers are from many locales, and thus D has a strong interest in not defending all over the world, ii) centralized litigation allows lower prices (public policy reason), and iii) D is based in FL (Carnival Cruise Lines v. Shute). 4) Implied Consent – expands consent via statute. Certain actions can imply that a party has consented to personal jurisdiction via specific activities in-state that otherwise might not constitute minimum contacts (legal fiction). (a) Non-resident motorist statutes – by driving in the state there is an implied consent to jurisdiction in that state (Hess v. Palowski). i Statute designates state official as your agent when you drive on state highways. D) Miniumum Contacts – was established in International Shoe (1945) and greatly expands PJ by providing an alternative to physical presence. Means that a state can exercise personal jurisdiction over a non-resident D if she has had such minimum contacts with the forum state that it would within the bounds of fair play and substantial justice to make her return to defend. Service of process no longer has to be in the forum state. 1) Rationale – (a) Fairness – a company or individual that has contacts in a state should know that such contacts may have consequences that would lead to a lawsuit and it would only be fair to defend there – a duty to answer in the local courts. civil procedure outline – Vaughns 15 (b) Reciprocity – a company/individual who takes advantage of the benefits and protections of the laws should be expected to shoulder the burden of answering there. 2) Relatedness Requirement – because minimum contacts is based on voluntary contacts with the state, personal jurisdiction can arise only from the claims arising from or related to D’s contacts in the forum state; random contacts ≠ minimum contacts. (a) Example – In Shoe, D could be required to defend in WA. because the issue (non payment of worker compensation) arose from shoe sales in WA. D could not be required to defend in WA. based on shoe sales in another state. 3) Criteria for Minimum Contacts – personal jurisdiction depends on the “quality and nature” of the contacts. (a) Purposeful availment – is the main ‘quality and nature’ test – D must have ‘purposefully availed herself of the privilege of conducting activities within the forum state, thus invoking the privileges and protections of its law’ and will not be surprised to be hauled into court. i In a suit between potential trustees in FL and DE the Court held that FL did not have jurisdiction b/c the party’s contacts were not sufficient – the business done was not in FL and thus no relevant contact w/FL, only the trustee had moved to FL. (Hanson v. Denckla). ♦ A unilateral act by P will not suffice as purposeful availment (id). ii Example – In World Wide Volkswagen, D (regional car dealer) was not s.t. personal jurisdiction b/c although they could foresee that their cars could be driven there, D had not sold or advertised the cars insttat → no purposeful availment. ♦ Foreseeability of D that he would be sued in forum state is what is relevant – not that he could foresee that some of his products would be driven there. iii Internet business – did company purposefully avail themselves of business in the state through advertisement or customers? civil procedure outline – Vaughns 16 4) General versus Specific Jurisdiction & Minimum Contacts – Shoe can be used to analyze situations ranging from no contacts to substantial contacts. (a) Limited state activity and personal jurisdiction is limited to claims arising out of those minimum contacts. i No contacts, no jurisdiction (unless established by another means like consent). ii Casual or isolated, no jurisdiction. iii Single act – if of a level of a certain “quality and nature” (outer limits of minimum contacts), there can be PJ. ♦ CA. was held to have personal jurisdiction over an insurance company with in state policy holder based on a statute and that CA had a strong interest in protecting its citizens; there was a “substantial relationship” between contract and forum state (McGee). iv Continuous but limited – see notes for Burger King below. (b) State activity is substantial (continuous and systematic) enough that state can exercise personal jurisdiction over D (usually corporations) for all actions, even those unrelated to its in-state activities (=general jurisdiction). i Rationale for general jurisdiction – if D’s activities are so substantial and continuous in a state, then D would expect to be subject to suit there and it would not be inconvenient for D to defend. ii Example – Court used a general jurisdiction analysis b/c the wrongful death claim did not arise out of in state activities, and rejected such jurisdiction b/c D merely purchased products in state which was not sufficient (Helicopteros). No contacts casual or single act continuous but substantial or isolated limited pervasive No jurisdiction specific jurisdiction general jurisdiction ?? civil procedure outline – Vaughns 17 5) Minimum contacts apply to both individuals and corporations. 6) Minimum contacts can be fulfilled without specifically acting within the state if the actions have an impact within the state (“effects test”). (a) Causing harmful effects within a state can give rise to personal jurisdiction for claims arising from the action. i Example – D writes defamatory article in FL. about P who lives in CA, but D knows that article is to be published in CA. D is s.t. personal jurisdiction in CA. (Calder). (b) Business advice from out-of-state – if D in N.C. is a professional who regularly gives advice to clients in GA., D can be s.t. suit in GA. for a malpractice claim since D is deriving benefit from her business contacts there. 7) Timing of minimum contacts analysis – is at the time D acted (e.g. when professional gave advice), and not at the time of the lawsuit, when such contacts may no longer be occurring. 8) Stream of Commerce (out of state act with in state consequences) – when is there personal jurisdiction for manufacturers (of either components or products) who sell their products to others who may then sell or incorporate them into products that are sold in other states? (a) Fairness plays a role (see WWV below – where unilateral activity of P to take product into state was an isolated incident and D could not have anticipated being taken to court in that state). (b) Court is split on this issue (Asahi): i “Placement plus” – Personal jurisdiction depends on more than “mere awareness” – there must be some additional evidence (e.g. advertising, etc.) to show that D ‘purposefully availed’ itself of state market contacts (O’Connor in Asahi and followed by 4th Cir.). ♦ Asahi added reasonableness to decision factors in addition to minimum contacts. ii By sending products into the market, which is now completely connected, even if D does not know specifically that his products will go to a certain state, if he sends sufficient quantities of products into the stream of commerce he should know that they may well end up in civil procedure outline – Vaughns 18 the state and that should suffice for ‘purposeful availment’ (concurrence in Asahi). 9) Personal Jurisdiction based on commercial contractual relationship: (a) Significance of contract – a contract will not be dispositive, but will often serve to establish the party’s minimum contacts (e.g. franchisee with franchisor). (b) Choice of law clause – if a contract includes a choice of law clause, the court will often read that D accepted the state law and thus purposefully availed herself of the forum state’s legal system. (c) Payment stream – if the out-of-state party is required to make payment to the forum state that will also be a factor in favor of establishing minimum contacts. (d) Reasonableness – could the out-of-state party (franchisee) reasonably anticipate out-of-state litigation. i Example – in Burger King, a franchisee in MI. signed a contract with FL. based company and with a FL. choice of law clause. D attended training in FL and then returned to MI and sent all payments and correspondence to FL. Although D had little contact with FL., b/c of FL. long arm statute and the choice of law clause, court held that FL could exercise personal jurisdiction b/c D had purposefully availed themselves of FL law by signing the contract and would not be unfairly surprised. ♦ Burden is on D to show that it is unfair once minimum contacts are established. ii Court’s analysis is based on: ♦ Purposeful establishment of minimum contacts, and ♦ Does fair play and substantial justice/reasonableness defeat first criteria. E) Personal Jurisdiction Analysis (Constitutional) – 1) Are there any traditional bases for PJ (e.g. physical presence, consent, etc.) 2) If not, are minimum contacts established? (a) Relevant contact between D and forum state: civil procedure outline – Vaughns 19 i Purposeful availment. ii Foreseeability of being sued in forum state. (b) Reasonableness/Fairness: i Relatedness – did claim arise from contact. ii Burden on D and witnesses (burden on D to show that it is unfair). iii State’s interest. iv P’s interest (less important). v Judicial efficiency. III) State Statutory Limits on Personal Jurisdiction – the constitutional limits of the due process clause sets the outer limits for state courts – states can go up to this limit or they can set boundaries more narrowly. A) Full scope – Some states grant jurisdiction permissible up to the outer boundaries as defined by due process clause. 1) California – authorizes its courts jurisdiction on any basis “not inconsistent with the Constitution” e.g. occupies the entire constitutional field. B) Enumerated Act/Long Arm Statutes – is where a state specifically defines jurisdiction based only on some sorts of contacts. 1) Rationale – (a) Based on historical state statutes. (b) Gives states the flexibility to reject cases in which they do not have an interest and/or to grant jurisdiction to hometown Ps. 2) All long arm statutes that base personal jurisdiction upon specific enumerated acts require that the act sued upon arise out of the act itself. 3) Enumerated statutes personal jurisdiction can be based acts including: (a) In state business transactions. (b) In state tortuous acts. i Personal jurisdiction is upheld over an out-of-state manufacturer for a product liability suit b/c the tortuous act is committed where the resultant damage occurs (Gray v. American Radiator). civil procedure outline – Vaughns 20 ♦ Some states hold that tortuous act is where product is manufactured, so analyze both ways. (c) Using or possessing real property in state. 4) Enumerated statutes must be constitutional and Supremes can curtail use based on FAIRNESS. (a) Example – Supremes overruled OK’s use of a long arm statute by P, resident of NY who bought car in NJ, and crashed in OK. Although Ds could possibly foresee that one of their cars would be in OK, because Ds had never made any effort to have business in OK, they could not have anticipated being brought to court on OK. (WWV v. Woodson). IV) Challenges to Personal Jurisdiction A) Direct Attacks – once a suit is brought, D may contest personal jurisdiction directly to the “rendering” state. 1) Procedurally – the objection to personal jurisdiction must be raised immediately or it will be waived; D can’t raise personal jurisdiction objections once the case has been defended on the merits. (a) State court (common law approach) – objection to personal jurisdiction must be made as a special appearance solely to challenge personal jurisdiction; any argument re the merits will count as a general appearance and waive ability to challenge. (b) Federal court (use by some state courts) – D may make a pre-answer objection to personal jurisdiction at the same time he raises another 12(b) defense (e.g. motion to dismiss)(FRCP 12(b)(2)). 2) Appeals – if the state court rules in favor of P and grants personal jurisdiction and D defends on the merits and loses, D can appeal the personal jurisdiction issue at the next level. B) Collateral attacks – once a suit is brought D can ignore the suit and challenge in his home (“enforcing”) court. 1) Procedurally – if D fails to defend b/c she believes that the rendering state does not have personal jurisdiction, a default judgment will be entered against her and she must then challenge personal jurisdiction when P brings the judgment to D’s home state for enforcement (via Full Faith and Credit Clause) with two possible outcomes: civil procedure outline – Vaughns 21 (a) Home court upholds personal jurisdiction and judgment is entered against D with no chance to defend on the merits; or, (b) Home court denies personal jurisdiction and judgment can’t be enforced. 2) Personal jurisdiction challenge can only be raised once – if it is raised and rejected in the rendering court, it cannot be raised again in the enforcing court. V) Choice of Law and Personal Jurisdiction – choice of law and personal jurisdiction are different, but related. A) Choice of law – governs which state’s law will be applied to resolve a case. B) Examples of choice of law and personal jurisdiction: 1) Hanson – choice of FL. law did not play a role b/c the Court looked only to see if D had purposefully availed themselves of those state laws; using the choice of law clause by itself was not sufficient to use that law. 2) Burger King – FL choice of law clause was used as a supporting factor to grant personal jurisdiction in FL, b/c it showed that there was no surprise that FL law would apply. C) Forum selection clauses are usually given great deference by federal courts, whereas state courts are less likely to uphold them. VI) Nationwide Jurisdiction and Due Process – federal court service can be effectuated pursuant to nationwide service of process. A) FRCP 4(k)(2) – confers on all district courts world-wide jurisdiction over defendants in federal question cases only, if the D is not otherwise s.t. jurisdiction in any other state → basically applies to foreign country Ds. 1) Due Process – is satisfied via the “aggregate contacts” theory whereby personal jurisdiction is allowed if the party has minimum contacts with the country as a whole. (a) Reasonableness inquiry may also be added to pass constitutional scrutiny. VII) Notice/Service of Process – provides procedural due process required by the 14th Am. A) Defined – Service is the initial notice to the D of the filing of a lawsuit against him, including a summons and the complaint, governed by FRCP 4. B) Purpose – provides an opportunity for D to raise a defense. civil procedure outline – Vaughns 22 1) Reponses to service include: (a) No show – default judgment entered against D. (b) Special appearance – to challenge jurisdiction. (c) General appearance – no challenge. C) Methods of Service: 1) For individuals within the U.S. (FRCP 4(e)): (a) Personal service can be anywhere within the state. (b) Substituted service -leaving at dwelling place served to a person of suitable age and discretion who resides there (e.g. cannot be left with the plumber). (c) Delivering to an agent appointed by D. (d) Service following state procedures for the state court in the district in which the federal court sits. (e) Service following state procedures for the state in which service takes place. (f) Publication is only used rarely as notice of service when Ds are unknown, but it is usually in conjunction with one of the other methods of service if Ds are known or ascertainable. i State rules for service of process are usually more expansive and provide more options for substituted service. 2) For Corporations and other entities (FRCP 4(h)): (a) Personal service to an officer, managing or general agent of D. (b) Personal service to an agent appointed by D. (c) Service following state procedures for corporations for the state court in the district in which the federal court sits. (d) Service following state procedures for the state in which service takes place. civil procedure outline – Vaughns 23 3) Test for sufficiency of service – Court will use a flexible balancing approach to ensure that “notice is reasonably calculated, under all the circumstances to give the best notice practicable” (Mullane). (a) Reasonableness can include cost considerations. D) Mechanics of Service of Process – 1) Commencing the action – file a complaint and the statute of limitations is tolled (FRCP 3). 2) Obtain a summons – summons must be filed with the court and signed and sealed by the clerk (FRCP 4(a)(b)(c)). 3) Time limit for service – service must be made within 120 days of filing the complaint (FRCP 4(m)). 4) Service can be made by anyone over 18 who is not a party to the suit (FRCP 4(c)). E) Waiver of Service of Process – provides an alternative to the methods of service if D agrees to waive process pursuant to FRCP 4(d). 1) Procedure – P solicits a waiver of process by sending D the complaint, two copies of the action and a request to waive service (4(d)(2)). 2) Incentive to Waive – (a) Duty to avoid unnecessary costs – the Court must impose costs of service on a D who refuses to waive service w/o good reason. (b) Extended time to respond to complaint – 4(d)(3) offers D 60 days instead of 20 (pursuant to FRCP 12(1)(A) and 12(1)(B)) to respond to complaint. F) Service of Process vs. Personal Jurisdiction – distinct concepts that must be analyzed separately. 1) Motion to dismiss for insufficiency of process (12(b)(5)) – attacks the adequacy of the method used by P to give D notice, not the power of the court to authorize jurisdiction. 2) Motion to dismiss for lack of personal jurisdiction (12(b)(2)) – attacks the power of the court to exercise jurisdiction. 3) Can have one without the other. civil procedure outline – Vaughns 24 VENUE I) Venue generally – after SMJ and PJ, venue can further limit where suits can be brought and refers to the place within a sovereign jurisdiction in which a given action is to be brought. Considered a “localizing factor.” A) Purpose – venue rules further limit where P can bring a lawsuit to assure that suits are tied to the place that bears some practical relationship to the claims asserted or to the parties to the action. B) Venue in Federal Actions – is governed by 28 U.S.C. §1391. 1) Venue in diversity cases is based on (28 U.S.C. §1391(a)): (a) Judicial district where any D resides if all Ds are from the same state. i Residence = domicile for venue purposes. (b) Judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated. i Purpose – to assure a relation between the underlying events that are litigated and the place where the case is tried. (c) A judicial district on which any D is s.t. personal jurisdiction at the time the action is commenced if there is no district in which the action may otherwise be brought (fallback). 2) Venue for cases not solely based on diversity is based on (28 U.S.C. §1391(b)): (a) Judicial district where any D resides if all Ds are from the same state. (b) Judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated. (c) A judicial district in which any D may be found, if there is no district in which the action may otherwise be brought (fallback). 3) Venue for Corporations as defendants (28 U.S.C. §1391(c)) – a corporation will be a resident of any district as to which it would have the minimum contacts necessary to support personal jurisdiction if that district were a separate state (provides more places for venue that for citizenship related to SMJ). civil procedure outline – Vaughns 25 (a) §1391(c) defines residence for corporate Ds, which is then applied to §1391 (a)(1) and §1391(b)(1). 4) Venue is waivable – objection to venue can be made as part of the answer to the complaint or as part of a pre-answer motion (12(h)(1)), and otherwise it is waived. (a) Venue is also assignable – e.g. forum selection clauses. II) Forum Non Conveniens – federal judicial doctrine that a court having jurisdiction over a particular case may use its discretion to decline to exercise that jurisdiction if the Court concludes that the action could be more appropriately tried in another jurisdiction (state court → dismissal, federal court → transfer). A) Rationale: 1) Convenience of parties (usually D). 2) State’s interest in not burdening courts with litigation not connected to the state. B) Analytical steps to determine forum non conveniens: 1) Is there an alternate forum? 2) Is alternate forum adequate in terms of: (a) Fair trial – not a perfect trial or trial by jury. (b) Remedy exists (but doesn’t have to be the same). i Unfavorable law is not a factor unless it is totally unsatisfactory (Piper). (c) Amenability to suit. i Can be waived if party consents to suit. ii Statue of limitations can also be waived by consent. 3) Court will look at both: (a) Private interests – parties, litigation costs, availability of witnesses and sources of proof, etc. civil procedure outline – Vaughns 26 (b) Public interests – efficiency, administration, knowledge of state law, etc. (c) Unless balance of factors is strongly in favor of D, P’s choice of forum should not be disturbed. (d) If trial court grants forum nc, appellate court will reverse only if there has been an abuse of discretion. C) Federal Rule – whereas in state court application of forum conveniens would equal dismissal, in fed court it is covered by transfer (1404(a)). 1) Transfer/Change of Venue 28 U.S.C. §1404(a): “for the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.” Grants broad discretion to courts. (a) P’s motion – transfer only to a district where D could initially have been served (e.g. Ferrens v. John Deere). (b) D’s motion – only to districts where P would have had the right, independent of D, to bring action. i D cannot consent to be sued somewhere just to get forum. 2) Choice of Law – when §1404(a) is invoked, the state choice of law of the transferor court is to be applied by the transferee court. Just a “change of courtroom,” not a change of law. (a) Transferor choice of law applied regardless of which party makes the motion. 3) Transfer where original venue improper/Cure or waiver of defects 28 U.S.C. §1406 – gives the court the discretion to dismiss or transfer (in the interest of justice) a case that has been filed in the wrong district. civil procedure outline – Vaughns 27 THE LAW APPLIED IN FEDERAL COURT – WHAT LAW SHOULD BE APPLIED IN DIVERSITY CASES? I) Erie History and Basics A) Swift v. Tyson (1842) – federal judges should act like state judges when deciding what law to apply – to choose the right rule from among the states. 1) Rules of Decision Act (1789)(now codified as 28 U.S.C. §1652) – “the laws of the several states except where the constitution, treaties or statutes of the U.S. shall otherwise require or provide, shall be regarded as rules of decision in trials at common law in the courts of the U.S.” (a) Gives great deference to state court decisions. 2) Swift reinterprets the RDA so that it does not apply to judicial decisions interpreting general principles of common law. 3) Swift Philosophy: (a) Law is an absolute body of rules/natural law. i Allows manipulation of state law via choice of law (Black and White Taxicab). 4) Legal Realist Attack on Swift: (a) Law changes with time and place (Holmes). B) Erie v. Tompkins (1938) – Court overrules Swift and holds that the RDA applies to common law as well as constitutional and statutory provisions. 1) Decision based on: (a) Swift has not achieved one of its goals of uniformity in common law. (b) Swift led to discrimination by allowing Ps to manipulate choice of law. (c) Swift gave judges too much discretion in making laws and was thus unconstitutional b/c it was not a power delegated to the judiciary – separation of powers. 2) Basic Erie holding: In federal diversity cases, judges shall apply the law of the state in which they sit – job is to apply state common law b/c there can be no other law. civil procedure outline – Vaughns 28 3) Erie goals: (a) Prevent forum shopping. i Forum shopping is unfair to Ds who can’t act and/or plan a defense unless they know what law applies. (b) Prevent the inequitable administration of justice. C) Ascertaining State Law: 1) If there is a clear and recent ruling on point, that law is applied “as announced.” 2) If the state common law is unclear for some reason, then federal judge should apply the law as it would be announced by the state’s highest court. (a) Judge cannot make law up but must base prediction on data from lower courts and legislative actions. 3) Certification – some states allow a federal judge to certify a question for the state’s highest court for opinion, which federal judges then apply. (a) Lengthy and expensive. 4) Appeals – parties can appeal a federal diversity ruling to the Circuit Court of Appeals, but the SC cannot hear cases based only on state law. (a) SC granted cert on a diversity case when there was a federal issue relating to the content of state law – e.g. what standard of review should an appellate court use to review a district court’s interpretation of state law (Salve Regina). i Appellate court must use de novo review to decide what state law is, and can look to district court ruling as part of the evidence. D) Federal Common Law – still exists for certain areas including: 1) Federal court interpretation of federal laws. 2) Admiralty. 3) Federal substantive law where federal authority is not linked to diversity. 4) Forum non conveniens. civil procedure outline – Vaughns 29 5) Areas of law with uniquely federal interests, such as where Congress could have legislated. (a) Example – liability of federal contractor working for the military (Boyle). II) Erie and the Substance/Procedure Distinction A) Extension of Erie to procedural law/rules – although Erie did not mandate that federal courts apply state procedural rules, subsequent interpretations did to some extent. 1) Procedural rule that relates to a “substantive right” falls under Erie. (a) State burden of proof law must be applied to diversity case b/c it relates to enforcement of states rights (Dunlap). 2) Outcome determinative test – following a federal procedural rule that would substantively affect the result of a litigation falls under Erie and state law must apply, b/c it implements the “policy” of Erie that the outcome of a case should be substantially the same if tried in state or federal court. (a) State statute of limitations must be applied instead of federal laches doctrine b/c the claim was disallowed under state law but not fed law (York v. Guaranty Trust). (b) State law should be applied as a matter of policy (supporting Erie), rather than a Constitutional compulsion. (c) Statute of limitations and tolling generally considered outcome determinative. 3) Potential impact – at its broadest these decisions could require state procedural law to be applied in almost all situations, and the FRCP would not be followed in diversity cases. B) Narrowing of Erie as applied to state procedural law/rules – balancing test between states rights and federal policies established in Byrd holding that: 1) Procedural law bound up with the rights and obligations created by state law which will affect P’s primary state law – apply state law following Erie. (a) Statute of limitations will affect primary conduct whereas the closing time of a federal court being open one hour later than a state court does not. 2) Matters of procedure where applying separate federal rule would likely affect the outcome – apply state law following York. civil procedure outline – Vaughns 30 3) Matters of procedure where applying separate federal rule would likely affect the outcome (ambiguous), but there are important federal countervailing considerations – apply federal law (Bryd). (a) Federal policy of availability of a jury trial outweighed benefit of uniformity of state law (Bryd). 4) Matters of procedure where applying separate federal rule is unlikely to affect the outcome – apply federal law. C) Return of Dominance of Federal Procedural Rules via the REA – Hanna. 1) Hanna holdings: (a) Modified outcome determinative test – when a state law conflicts with a judicial practice – outcome determinative test must be modified by the twin policy aims of Erie (prevention of forum shopping and inequitable administration of justice) even in the absence of a federal rule. i Using federal service of process instead of state service of process will not influence forum shopping or cause the inequitable administration of justice and thus federal procedural rules can apply even though it is outcome determinative (Hanna). (b) Removed the Federal Rules entirely from Erie – Direct conflict between FRCP and state law, FRCP will control. i Rationale – b/c the Rules Enabling Act (REA) gives broad authority to Court to adopt rules recommended by the Advisory Committee on Civil Rules, which are then implicitly endorsed by Congress, there is broad statutory and constitutional authority for such procedural rules and they thus deserve great deference. Rules promulgated pursuant to the REA are presumptively procedural and constitutional. D) Modern Analysis Framework: for determining when federal courts must apply state law in diversity cases. 1) Conflicts between Constitutional Provision and State Law – Constitutional requirements trump state procedural and substantive law. 2) Conflicts between a Federal Statute and a State Law – If the federal statute is “arguably procedural” then it trumps state law. civil procedure outline – Vaughns 31 (a) Court upheld application of §1404(a), federal statute of transfer, b/c deciding which federal court can hear the case is arguably procedural (Stewart). 3) Conflicts between a Federal Rule and State Law – federal rule will apply if it is “rationally capable of classification” as a procedural regulation – almost all federal rules will satisfy this test and federal rules are valid unless they “abridge, enlarge, or modify” a substantive right. (a) Federal rules are almost always valid and have rarely been found to violate substantive rights. 4) Conflict between a Federal Judicial Practice and State Law – requires application of the Hanna 1 modified outcome determinative test – the court should still choose the state rule if the difference between it and the federal practice could prove outcome determinative balanced with Erie’s goals. 5) Other analysis issues: (a) Direct conflicts – unless there is a direct conflict between the federal rule/statute and state law, there is no need to choose between them. i Direct conflict is not clearly defined, but is likely where a relevant federal provision was meant to “occupy the field” or where application of state rules would impair the operation of the federal provision. III) State Choice of Law – Vertical and Horizontal A) State choice of law for state conflicts – states have all adopted their own choice of law rules that may be governed by a number of theories such as state interests, significant relationships, place of injury, or others. There is not a consistent choice of law rule for all states. B) Federal Courts choosing State Law – federal courts must apply the forum state’s choice of law rules in addition to state’s substantive law (Klaxon). 1) Implications: (a) Vertical uniformity (between state and federal courts) is strengthened. (b) Horizontal uniformity (between federal courts in different states) is weakened b/c federal courts can end up applying different state substantive law based on varying choice of law rules. civil procedure outline – Vaughns 32 i Undermines Erie goal to discourage forum shopping for favorable substantive law, b/c parties can now choose between federal courts in different states. C) Impact of Transfer on Federal Courts choosing State Law: 1) Transfer under §1404(a) should effect the court but not the law – the transferee court must apply the law that the transferor court would have applied if the case had not been transferred (Van Dusen). (a) Example – Ps bring a diversity action in PA. and D’s transfer to MA. For a number of reasons including that MA. had more favorable substantive law, but to avoid D’s forum shopping, court held that MA. fed court would have to apply whatever substantive and choice of law rules that the PA federal court (transferor court) would have applied. IV) Reverse Erie Doctrine – where state law would infringe on federal substantive rights. A) State procedure can be preempted by federal substantive law if the state procedure does not adequately vindicate the federal right – e.g. the state procedure has an impermissible outcome determinative effect. PLEADING, DISCOVERY AND ADJUDICATION I) Pleadings – refer to the complaint and the answer. A) Pleading Rules – Pleadings are governed by FRCP 7-11. 1) General pleading rules (FRCP 8) – “notice pleading” → primary function is to put the other party on notice of the general nature of the allegations so that they can prepare a defense. (a) Claim for relief – must contain a short and plain statement of jurisdiction, grounds for relief, and a demand for judgment (relief in the alternative is allowed). (b) Defenses – answer shall admit, deny or claim to be without knowledge to each averment in the complaint. (c) Affirmative defenses shall be set forth (e.g. contributory negligence, duress, statute of limitations, etc.). (d) Failure to deny an averment will be construed as admitted. (e) Pleadings may be presented as alternative theories for one claim. civil procedure outline – Vaughns 33 2) Candor in pleading (FRCP 11) – signing of pleadings and representations to the Court. (a) Requires lawyers to make a pre-filing investigation of the evidentiary support of their claim to ensure that it is sufficient to file a complaint or will likely be sufficient upon further investigation i Duty to investigate is non-delegable – can’t just rely on the client’s story or another attorney (Garr). ♦ Time is a factor – if client comes to attorney a day before statute of limitations runs out, will be taken into consideration as compared to an attorney who had a month to investigate. ii Sanctions for violations upon court’s discretion. (b) Purpose – is to deter future misconduct. (c) Appeal of sanctions – court of appeals will apply the abuse of discretion standard when reviewing a district court ruling. B) Amended and Supplemental Pleadings – governed by FRCP 15: 1) Amended Pleadings – liberal policy. (a) Party may amend once as a matter of right at any time before a responsive pleading (motions are not considered responsive pleadings) is served or any time within 20 days if no responsive pleading is required. (b) Otherwise pleading may be amended only by consent of opposing party or with leave/permission of the court which is given by court “when justice so requires.” i Courts have construed ‘when justice requires’ liberally so that unless the opposing party has substantially relied on proceedings, amendment should be granted. (c) Relation back (FRCP 15(c)) – if a claim or defense asserted in the amended pleading “arose out of the conduct, transaction or occurrence set forth or attempted to be set forth in the original pleading,” (transactional nexus) the amendment will relate back to the date of the original pleading (courts construe narrowly). i Purpose – allows P to meet the statute of limitations in situations where an amendment is not much different than the original. civil procedure outline – Vaughns 34 ii Rationale – an amendment arising out of the same conduct, etc. will give the opposing party fair notice. iii Examples: ♦ If claim or theory has changed but not facts, amendment will usually be allowed to relate back. ♦ If the amendment materially changes the underlying facts, amendment probably will not relate back. ♦ If a the party is changed, then P must also satisfy notice requirements of 4(m)(within 120 days of the filing of the complaint). 2) Supplemental pleadings – additional claims occurring after the filing of the complaint can be added on with leave of court (15(d)). C) Complaint Drafting – is generally governed by FRCP 8(a) (a short and plain statement of jurisdiction, grounds for relief, and a demand for judgment). 1) Statement of a claim (8(a)(2)) – a short and plain statement of jurisdiction, grounds for relief, and a demand for judgment – must be sufficient to give notice. (a) However, 8(a) is only the minimum and lawyers may include more for strategic reasons including: i Powerful first impressions. ii Indication of a serious claim. iii Complaint sets boundaries for discovery. 2) Exceptions to the short and simple complaint – pleading special matters – some claims may require more detail in the complaint (FRCP 9): (a) Fraud and mistake (9(b)) – require more detail since they can be tried either criminally or civilly. (b) Special damages (9(g)) – damages that would not usually be expected to result from the alleged conduct must be detailed. i Consistent with theory of notice. civil procedure outline – Vaughns 35 ♦ Example – pregnancy lost in an auto accident. 3) Subject matter jurisdiction must be asserted (8(a)(1)). 4) Legal theories not required although can be included. 5) Pleading in the alternative (8(e)(2)) is allowed, but governed by R.11 so that P cannot assert an alternative claim where she would be expected to know that it was inaccurate. 6) Form of pleadings (FRCP 10). D) Answer -FRCP 8(b). 1) Admit, deny or state that D is without sufficient information to reply (has the same effect as a denial). (a) Without sufficient information – can only be used after D has made a reasonable investigation into the allegations. (b) Partial denials – D can partially deny any of the averments. 2) Affirmative defenses – must be put forth in the answer and serve to avoid rather than deny the truth of the allegation. (a) Rationale – puts P on notice. 3) Cross claims and counter claims should be included in the answer pursuant to FRCP 13. II) Pre-Answer Motions – objections to the complaint only can be made through preansswe motions as governed by FRCP 12, or such objections can be raised in the answer. A) Categories of pre-answer motions: 1) Immediately fatal to suit – D should not even be required to answer if the suit has been brought in the wrong court: (a) Lack of SMJ (12(b)(1)) – can be raised at any time. (b) Lack of personal jurisdiction (12(b)(2)). (c) Improper venue (12(b)(3)). civil procedure outline – Vaughns 36 2) Curable defects – are procedural defects in the way P initiated the action. (a) Insufficiency of process (12(b)(4)). (b) Insufficiency of service of process (12(b)(5)). (c) Failure to join an indispensable party (12(b)(7)). 3) Challenge to substantive merits (12(b)(6)) – motion to dismiss for failure to state a claim upon which relief can be granted – will be dismissed unless P can amend the claim sufficiently. Can be raised at any time throughout trial. (a) Standards for granting 12(b)(6) – motion must not be granted unless it appears beyond doubt that P can prove no set of facts in support of his claim which would entitle him to relief. Legal question. i Rationale – reluctance to dismiss claims before argument can be made on the merits. (b) 12(b)(6) dismissals: i Technical with leave to amend and without prejudice. ii Substantive with prejudice. (c) Options for P if 12(b)(6) is granted for D: i P can amend. ii P can appeal the decision on the motion – judge will enter motion so it becomes final and appealable. ♦ Loss on appeal can either be dismissed or remanded for repleading. (d) Options for D if 12(b)(6) is denied (not a “final judgment”): i Continue the action by answering, or; ♦ If D answers and loses at trial, the basis for the 12(b)(6) motion will likely be reviewed as part of the appeal or in a motion for summary judgment. ii Allowing a default judgment to be entered against him and then appealing since default judgment is a final judgment. civil procedure outline – Vaughns 37 ♦ If D loses on appeal, court may or may not remand with leave to answer (risk). ♦ If D wins on appeal, P will have a chance to replead. 4) Failure to state a claim (12(b)(6)) v. summary judgment (FRCP 56). (a) 12(b)(6) – does the complaint state a legally sufficient claim. Complaint should not be dismissed unless it appears beyond doubt that P can prove no set of facts in support of his claim which would entitle him to relief. (b) 56 – Summary judgment is appropriate is there are no disputed issues of material fact to be tried and that the moving party is entitled to relief as a matter of law. Evidence must be viewed in a light most favorable to the non-moving party. 5) Challenge of failure to state a claim can be made after the pleadings via 12(c). (a) 12(c) is treated like a R. 56 motion for summary judgment. B) Timing of Answer and Pre-Answer Motions: 1) D shall serve an answer or a Rule 12 motion within 20 days of being served or within 60 days if service was waived (12(a)(1). 2) Failure to state a claim and failure to join a party may be brought at any time during the trial, but is usually brought before the answer (12(h)(2)) or else it is a 12(c). 3) Lack of SMJ can be brought at any time by the parties or by the court even after the trial (12(h)(3)). C) Waiver of Rule 12 Defenses: 1) Objections to personal jurisdiction, venue, method of process, or form of process are waived if they are not raised by D in the pre-answer motion or the answer (12(h)(1). (a) Rationale – D is aware of any of the above defects once she is served with the complaint, and thus for judicial efficiency purposes, they must be raised before the case proceeds further. 2) Consolidation of defenses in motion (12(g)) – if a party makes a motion under Rule 12, but omits any other Rule 12 defense permitted to be raised by the motion (except for failure to state a claim or failure to join a party), the party has waived its right to raise such defenses. civil procedure outline – Vaughns 38 (a) Rule 12 does not allow the bringing of 2 separate pre-answer motions – they must be consolidated. D) Other Rule 12 requirements: 1) Preliminary hearings (12(d)) – if D raises any of the defenses in 12(b)(1-7), D can request the court to hold a preliminary hearing to address the merits of the defense. 2) Motion for a more definite statement (12(e)) – if the complaint is too vague, D can move for a more definite statement to clarify. E) Advantages and disadvantage of answering versus asserting a R. 12(b) Motion: 1) Advantages of 12(b)/Disadvantages of Answering: (a) 12(b) can avoid the costs of discovery. (b) Filing an answer terminates the ability of P to amend w/o getting leave of court, whereas a 12(b) motion does not. Thus D may prefer to answer to prevent P from curing the defect in the complaint. 2) Advantages of answering/Disadvantages of 12(b): (a) If D has a compelling story it might be better to develop the factual record. III) Discovery – Courts follow expansive discovery process conducted by the parties pursuant to FRCP 16, 26-37. A) Discovery generally: 1) Expansive discovery rules provide fairness via equal access to evidence, but can create a more expensive process. 2) Scope of discovery FRCP 26(b)(1) – parties may obtain discovery regarding any matter not privileged that is relevant to the claim or defense of any party, including the existence, description, nature custody, condition of any documents or other things and the identity and location of persons having knowledge of any discoverable matter involved in the action. (a) Relevant = reasonably calculated to produce admissible evidence. 3) Limits on scope of discovery: civil procedure outline – Vaughns 39 (a) Privilege – as a way to protect certain confidential relationships to best promote frank and effective representation. i Attorney-client – bars inquiry into communications between attorney and client in the course of representation. ♦ Corporate context – attorney-client privilege extends beyond the “control group” to any employee who communicates directly/provides information to the attorney or her agent, and extend as far down the chain as necessary (Upjohn). ♦ Waivable – attorney-client privilege is easily waivable by mistake through: ⇒ Talking about it to anyone other than the client/third party disclosure. ⇒ Unintentional production of documents. ⇒ Implied waiver – by placing the confidential information at issue in the litigation. ii Priest and parishioner. iii Doctor-patient. iv Husband-wife. v Work product – bars production of certain materials developed in anticipation of litigation following Hickman v. Taylor and now codified in FRCP 26(b)(3). ♦ Documents prepared in anticipation of litigation that contains information that can reasonably be obtained through other means – discovery is barred. ⇒ Addresses the free-rider problem. ♦ If requesting party demonstrates a substantial need for materials developed in anticipation of litigation and similar information cannot be obtained through other means without substantial hardship, the court may order production of such materials – qualified privilege. ♦ Opposing counsel’s thought process is preparing a case (e.g. legal theories, litigation strategy) cannot be discovered. civil procedure outline – Vaughns 40 (b) Expert witnesses – i Testifying expert witnesses – are s.t discovery; parties must disclose the names of testifying witnesses at least 90 days before trial and the bases of their testimony (26(a)(2)). ii Non-testifying expert witnesses – identity and testimony of nontestiifyin expert witnesses is only discoverable upon a showing of “exceptional circumstances” (26(b)(4)(B)). ♦ Rationale – such experts are treated as part of the trial preparation process and help develop case theory and trial strategy. (c) Protective orders FRCP 26(c) – parties can preemptively seek protection from responding to certain discovery requests if it would cause annoyance, embarrassment, oppression, or undue burden or expense. i Application to proprietary information (e.g Coke formula). 4) Duty to Update (FRCP 26(e)) – supplementing disclosure in required if “the party learns that in some material respect, the information disclosed in incomplete or incorrect” it must be updated at regular intervals. (a) No clear guidelines as to when to update – driven by ethics (attorney is an advocate and an officer of the court). (b) Sanctions/recourse – if attorney does not update and it effects the judgment, opposing party can try to get relief from judgment or order (FRCP 60(b)) to reopen the judgment based on fraud. B) Automatic Disclosure requirements – were added in 1993 as a way to speed the discovery process and reduce its cost (26(a)(1)). 1) Initial disclosures – include information that the disclosing party may use to support its claims or defenses, unless solely for impeachment, identifying the subjects or the information (26(a)(1)(A)). (a) Narrow enough so that not everything must be disclosed – just that to be used in the case – and means that other discovery methods will still be necessary. 2) Exemptions – certain categories are exempt from automatic disclosure (26(a)(1)(E)). civil procedure outline – Vaughns 41 C) Methods of Discovery: 1) Interrogatories (FRCP 33) – written questions from one party to the other, limited to 25. (a) Advantages: i Inexpensive. ii Effective for obtaining background information and identifying additional witnesses. (b) Disadvantages: i Answers crafted by attorneys to minimize information revealed. 2) Requests for Production of Documents (FRCP 34) between the parties and inspection of land and other items: (a) Advantages: i Open access. (b) Disadvantages: i Broad requests catch meaningless information. (c) 34(b) requires parties who produce documents for inspection to keep records in the order in which they are usually organized. 3) Depositions – are the taking of oral testimony under oath from any witness (FRCP 30). (a) Advantages: i Most effective for detailed information. ii Evaluate effectiveness of witness at trial. iii More accurate preview of witnesses actual testimony at trial. iv Follow-up questions allowed. v On the record. vi Allowed for people other than the parties. civil procedure outline – Vaughns 42 (b) Disadvantages: i Time and expense (requires court reporter). (c) Timing and mechanics of depositions – depositions are usually taken late in the discovery process as a follow-up to other techniques and only when it is highly likely that case will actually go to trial. i Tactical advantage of early depositions – to pin down a version of the story. (d) Deposing a party to the suit – notice must be sent pursuant to FRCP 30(b). (e) Deposing a non-party to the suit – requires a subpoena pursuant to FRCP 45. (f) Process – deponent must answer all questions unless there is an issue of privilege (30(d)(1)); other objections are made and preserved for the record, but an answer is still required. 4) Physical or Mental Examinations – will be required upon order of the court only “for good cause shown” (FRCP 35). Most often used in cases where P is claiming damages for physical injuries. 5) Requests to Admit – is a way to narrow the scope of the trial by eliminating uncontested issues (FRCP 36). D) Sanctions – are governed by FRCP 37: 1) Process: (a) Party who believes that opponent has failed to comply with a discovery request must first confer with opponent in an attempt to resolve (37(a)(2)). (b) If that fails, requesting party can bring a motion to compel (37(a)(2)). (c) If motion is granted court may order noncomplying party to pay the moving party’s expenses (37(a)(4)). (d) If party fails to comply with order, court can impose a number of sanctions including striking claims, excluding evidence, or dismissing the action (37(b)). 2) Failure to disclose or admit – party who fails to disclose the proper information pursuant to R.26 without substantial justification is not permitted civil procedure outline – Vaughns 43 to use that information as any part of his case and court may also sanction (37(e)). 3) Failure of party to attend deposition, serve interrogatory answers, or respond to requests can also be sanctioned (37(d)). E) Final Pretrial Order and Conference (FRCP 16) – following discovery, the pretrial order mapping all of the case (contentions, theories, evidence) and the trial for purposes of judicial management. 1) Pretrial order can only be modified to prevent manifest injustice b/c of the extent of resources that have already been expended. (a) Relief is more easily granted for a default judgment in which case fewer judicial resources have been spent (60(b)). IV) Judge and Jury A) Right to a jury trial: 1) Advantages: (a) Valued democratic ideal; (b) Embraces community values/measured by the “reasonable person;” (c) Safety in numbers. 2) Disadvantages: (a) Juries can be “irrational;” (b) Difficulty w/technical issues; (c) Jurors may not take their duty seriously; (d) Lawyers profile and manipulate juries. B) Judicial Control of Jury Decision Making prior to Verdict – there are a number of ways for judge to control juries through the federal system. 1) Failure to state a claim on which relief can be granted (FRCP 12(b)(6)). 2) Summary Judgment (FRCP 56) – after discovery parties can make a motion for summary judgment, which will be granted if, viewing the evidence in a light most favorable to the non-moving party, there is no genuine issue as to civil procedure outline – Vaughns 44 any material fact, and judgment can be made as a matter of law. Case never goes to the jury. (a) Although there is a reluctance to prevent cases from going to trial, SC has told lower courts that it is okay to do so (Celotex). (b) Summary judgment motion based on affidavits, but not supposed to try the merits of disputed facts and judge credibility – is not a “trial by affidavit.” 3) Directed Verdict/Judgment as a Matter of Law (FRCP 50(a)) – following the presentation of evidence at the trial, parties can make a motion for judgment as a matter of law. If the judge decides that no reasonable jury could find for that party, she can grant judgment as a matter of law, and case doesn’t go to the jury. (a) Timing of the motion: i D can make a 50(a) motion first after P presents her evidence and again after D presents her own evidence. ii P can make a 50(a) motion only after D presents her evidence. (b) Standard for entering judgment as a matter of law – 50(a) specifies that it is only appropriate when “there is no legally sufficient basis for a reasonable jury to find for” the nonmoving party. i Federal standard for sufficient basis: judge must consider non-moving party’s evidence in its most favorable light, and also consider any evidence put forward by the moving party that is not impeached or contradicted by the opposing party’s evidence. ii Party w/burden of proof has failed to put forth evidence sufficient for the element in question. (c) Appeals – for both 50(a) and 50(b), appellate court uses de novo review since it is an issue of law. i Judgment is more insulated from appeal if a jury decides instead of a judge since appeals will have a higher lever of scrutiny with a de novo review compared to a clearly erroneous review of jury decision. 4) Special Verdict (FRCP (49)) – is a specific finding of fact (as opposed to a general verdict, which grants victory to one side) whereby judge can submit specific written questions to jury. 5) Trial Bifurcation ((FRCP (42(b)) – judge can order two trials out of one case (e.g. separation of liability and damages). civil procedure outline – Vaughns 45 (a) Rationale: i Convenience. ii Avoidance of prejudice. 6) Jury Selection – “voir dire” (a) Attorneys select juries and can strike jurors: i For cause (e.g. bias) – unlimited. ii Preemptory (w/o cause) – limited to 3 (28 U.S.C. §1870). ♦ Preemptory are appealable to the judge to challenge discriminatory selections (e.g. sex, race, religion). Burden is on opposing party to show a pattern of discrimination. 7) Jury Instructions – Judge instructs jury as to their duties, process and specific jury instructions for the instant case. (a) Request for instruction to jury (FRCP 51) – at the close of evidence, any party may file written requests that the court instruct the jury on the law as set forth in the requests. C) Judicial Control of Jury Decision Making Post-Verdict: 1) Judgment Notwithstanding Verdict/Renewed Motion for Judgment as a Matter of Law after Trial (FRCP 50(b)) – following trial, losing party moves for judgment, using same standard as 50(a), asserting that jury acted irrationally given the evidence. (a) Requirements for 50(b) motion: i Timing – 50(b) motion must be made within 10 days of the judgment. ii Process – 50(b) motion cannot be made unless 50(a) was made at the end of all of the evidence. ♦ Rationale: fairness b/c evidentiary defect is curable at the 50(a) stage (before jury evaluation), but not at the 50(b) stage, and so allowing only a 50(b) would allow a party to sandbag her opponent. (b) Appeals – for both 50(a) and 50(b), appellate court uses de novo review since it is an issue of law. civil procedure outline – Vaughns 46 (c) 50(c) – If 50(b) is granted, court shall also rule on motion for a new trial – conditional granting of new trial. 2) Motion for a New Trial (FRCP 59) – discretionary ruling by a judge, w/o any clearcut criteria. (a) Categories of cases for which new trials can be granted: i Errors in the trial process – to avoid due process violations a new trial can be granted for a number of procedural defects such as admission of inadmissible evidence, improper jury instructions, attorney misconduct, etc. ii Flawed verdict – if the result was clearly wrong – must pass a high bar; judge must believe that jury verdict was “against the clear weight of the overwhelming evidence” or necessary to prevent a “miscarriage of justice.” ♦ Judge can evaluate credibility of witnesses – thus acts like 13th juror (in contrast to 50 motions where evidence for non moving party is assumed to be true). However, not really like a 13th juror since the motion is for a new jury trial – e.g. jury will ultimately decide verdict. (b) Timing – motion for a new trial must be made within 10 days of the judgment. (c) New trial sua sponte – Court may order a new trial on its own initiative within 10 days of the judgment (59(d)). i Sua sponte standard – judge must believe that jury verdict is “against the great weight of the evidence.” (d) Procedurally – if 59 motion is granted it is not immediately appealable, b/c it does not represent a final judgment – another jury will try the case to come to a final judgment. (e) Partial new trials can also be granted. (f) Appeals – once final judgment is entered, granting of new trial can be appealed, and appellate court reviews the decision to grant a new trial under an ‘abuse of discretion’ standard since it is largely a matter of fact. As long as judge used proper standard to grant the motion (‘against the great weight of the evidence’), it is not an abuse of discretion. civil procedure outline – Vaughns 47 (g) Remittitur – if the judge believes that the jury verdict was correct, but that the damage award was excessively too high, the judge can conditionally order a new trial unless the P agrees to a reduced award. D) Right to a Jury Trial – VII Amendment provides “in suits at common law… the right of trial by jury shall be preserved,” for civil cases in federal court, adopted in FRCP 38. 1) Not applicable to states for civil cases. 2) Jury trial must be demanded within 10 days after the last pleading or it will be waived (38(b)). 3) Right to jury trial applies to legal forms of relief, but not equitable forms (e.g. injunctions, declaratory judgments, reformation). (a) Case with legal and equitable claims – legal claims usually predominate, and thus trial by jury remains a right. (b) Where there are common issues of fact between two claims, with legal and equitable issues, legal issues must be submitted and tried first and there is a right to trial by jury on those claims (Beacon Theatres). (c) Court can also re-characterize equitable claims to be legal claims to preserve jury trial generally – broad reading of right to a jury trial (Dairy Queen). APPEALS I) Appeals Generally: A) Right to appeal – parties have an initial right of appeal and usually to the second level. 1) Aggrieved party – to make an appeal, the party must have been “aggrieved” by the lower court judgment: (a) Judgment against party. (b) Relief received was less than requested. i Ordinarily, winners are not able to appeal, except in some cases. ♦ Example – Plaintiff received total requested award, but only for one of its claims (contract), and it wanted judgment on the other (fraud) as well, b/c they had different legal implications (Aetna). civil procedure outline – Vaughns 48 2) Aggrieved party – to make an appeal, the party must have been “aggrieved” by the lower court judgment: B) Goals of appellate review: 1) Promotes decisional accuracy. 2) Provides doctrinal coherence. 3) Judicial administration. C) Standard of Review – depends on whether review is of fact or law. 1) Review of law – de novo – calls for a remand. 2) Review of fact – clearly erroneous – can reverse or remand. 3) Review of mixed law and fact – review will be in between full and limited on a roughly proportional sliding scale. D) Trial Court Errors – according to the harmless error rule, trial court errors will only be corrected upon review if they affect substantial rights of the parties (28 U.S.C. §2111). E) Appeals Procedure – federal appeals are governed by the FRCP and Fed Rules of Appellate Procedure, which are presumptively constitutional. 1) Federal appeals (circuit court) are held by 3-judge panels or in some cases by en banc (all judges) for important issues. 2) Subsequent overruling of panels – depends on local rules or an intervening Supreme Court decision. II) Final Judgment Rule (28 U.S.C. §1291) – judgment of a district court must be final before it can be appealed (e.g. a disposition that leaves nothing for the court to do but execute the judgment). 30 days to appeal. A) Evaluating the final judgment rule: 1) Advantages of final judgment rule: (a) Avoid disruptions of trial court proceedings. (b) Protects appellate court from unnecessary work (all appealable issues will be consolidated to increase efficiency). civil procedure outline – Vaughns 49 (c) Appellate decisions will be made in the context of a fully developed factual record. 2) Disadvantages of final judgment rule: (a) Wasted effort by trial courts. (b) Frustration of effective appellate review of underlying rights at issue. B) Exceptions to final judgment rule – 1) Interlocutory decisions: (a) Injunctions (28 U.S.C. §1292(a)) – injunctions can be immediately appealed as of right. (b) Discretionary appeals (28 U.S.C. §1292(b)) – if trial judge certifies that the case is governed by a “controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the lawsuit.” (c) Class certification in class action lawsuits (FRCP 23(f)). 2) Judgment upon multiple claims or involving multiple parties (FRCP 54(b)) – the Court may direct a final judgment for one or more but less than all of the claims or parties if there is no just reason for delay. In that situation, the claims/parties with final judgment can be appealed while the remaining claims are being tried. (a) General criteria – whether after balancing the competing factors, finality of judgment should be ordered to advance the interests of sound judicial administration (judicial efficiency and fairness). Relevant factors include: i Certification will not result in unnecessary appellate review. ii Claims “finally” adjudicated were separate, distinct, and independent of any of the other claims or counterclaims involved. iii Review of such adjudicated claims would not be mooted by any future developments in the case. iv The nature of the claims is such that no appellate court would have to decide the same issues more than once even if there were subsequent appeals. civil procedure outline – Vaughns 50 (b) Presence of unresolved counterclaims does not preclude a 54(b) ruling. (c) Appeals of 54(b) – appeals court will use an abuse of discretion standard to review a 54(b) decision. (d) Example – Curtiss-Wright was granted a 54(b) motion against GE to recover $19 million balance due in spite of the fact that there were counterclaims pending b/c the balance due and interest lost was large and that counterclaims might not be resolved for several years. 3) Collateral order doctrine – judicially created that if an issue is collateral (separate) to the merits then it may be appealed. Represents a narrow set of decisions that do not terminate the litigation, but must in the interest of achieving a healthy legal system, must be treated as final. (a) Criteria for collateral order exception: i Conclusive/final word on issue. ii Review would be unavailable if you have to wait. iii Separability – issues decided that can be separated from the merits. iv Important issue – often public policy related issues or one rooted in constitution or statute (e.g. immunity). (b) Example: Collateral order exception not granted to party who claimed the right not to go to trial based on a private settlement agreement that was later rescinded b/c private party negotiations did not rise to the level of an important issue (Desktop). PRIOR ADJUDICATION I) Res judiciata – only one bite at the apple. Prevents cases from being tried twice on the merits. A) Purpose of limits based on prior adjudication: 1) Judicial efficiency and economy. 2) Finality/repose for Ds. 3) Avoid two inconsistent outcomes for the same case, which would undermine judicial integrity. civil procedure outline – Vaughns 51 B) Prior adjudication and Joinder: 1) FRCP 18 is permissive, but doctrine of prior adjudication sometimes makes it functionally mandatory (e.g. join case or you will be precluded from filing separately). II) Claim Preclusion – governs when a second case can be precluded based on a first case where claim has already been resolved. If party brought or could have brought same claim, claim will be precluded later. A) Criteria for claim preclusion: 1) Both cases were by the same claimant against the same D. 2) First case ended in a final valid judgment on the merits. (a) On the merits includes full jury trial, directed verdict, summary judgment, 12(b)(6) w/prejudice, etc. (b) Not on the merits (FRCP 41(b)) – provides the exceptions to merits including: i Lack of jurisdiction. ii Improper venue. iii Failure to join a party under FRCP 19. 3) Both cases based on the same claim. (a) Defining “same claim:” i Arising out of the same transactional nexus or occurrence – based on Rest 2nd and followed by federal courts – expansive view. ♦ Transaction – is defined pragmatically, based on a series of facts and events and whether they form a “convenient trial unit.” ♦ Sometimes hard to draw the line. ii Based on the specific substantive rights & obligations – older view, more narrow, and followed by some state courts. Determined by looking at evidence used, essential facts, and impairing of rights. ♦ Does not promote efficiency as well as the ‘transaction’ definition. civil procedure outline – Vaughns 52 III) Issue Preclusion/Collateral Estoppel – governs when a second case can be precluded based on a first case where issue has already been resolved. A) Criteria for collateral estoppel: 1) First case ended in a final valid judgment on the merits. 2) Same issue was litigated to finality and determined in first case. (a) “Same issue” – determining the scope of the issue can be difficult (e.g. negligence generally or negligence for specific act). (b) Factors to be taken into account when determining same issue: i Pleadings. ii Final pre-trial order. iii Jury instructions. iv Verdict form (especially special form FRCP 49). 3) Issue in question was essential to the judgment in case 1. 4) Against whom can collateral estoppel be used? (a) Only can be used against someone who was a party in case 1 – only those individuals parties (or privies) to the lawsuit are bound to the judgment. i Constitutional requirement. ii Vicarious/virtual representation – if the party was represented by a party in the suit they can be precluded from re-litigating the issue – considered in privity. ♦ General Foods could not challenge a labeling law b/c they had already been represented by a trade group for the same issue. B) Who can assert Collateral Estoppel: 1) By whom can collateral estoppel be used? (a) Traditional basis = mutuality. i Must be the party or someone in privity with the party. (b) Modern – mutuality not required – don’t have to be a party on case 1 to assert collateral estoppel (Bernhard). civil procedure outline – Vaughns 53 C) Types of non-mutual collateral estoppel: 1) Non-mutual defensive collateral estoppel – D in case 2 was not a party in case 1. D is trying to assert that another party’s ruling precludes the issue from being re-litigated. 2) Non-mutual offensive collateral estoppel – P in case 2 was not a party in case 1. P is seeking to assert estoppel against D. (a) Majority – reject the use of non-mutual offensive collateral estoppel. i Provides an incentive against consolidation of suits (FRCP 42(a)) b/c Ps are waiting for the right judgment before they sue. ii May be unfair to D if there was some reason he did not vigorously litigate. (b) Minority and increasing trend – allow it to be used with the following fairness factors (Parklane): i D has had a full and fair chance to litigate. ii D could foresee multiple suits. iii P could not have easily joined the first suit. iv No inconsistent judgments. (c) Example – in Kaufman v. Eli Lilly – fill in. (d) Example – Parklane established the case-by-case approach for offensive collateral estoppel, which was allowed b/c: i D had full chance to litigate – the case first tried was against the SEC and D knew about the shareholder suit. ii P could not join in a suit w/the SEC. civil procedure outline – Vaughns 54 JOINDER I) Joinder Generally: A) Purpose – efficiency and avoid inconsistent results. B) Real Party in Interest (FRCP 17) – determines who may prosecute an action. 1) The only parties on behalf suits may be initiated are those such persons whose interests will be materially affected by the outcome. (a) Rationale – so Ds will only have to face one suit over the same interest. C) SMJ – all claims in federal court must have an independent basis for SMJ (federal question, diversity, or supplemental). II) Claim Joinder – governs which claims can or must be joined to an existing suit. A) Permissive Joinder of Claims by P (FRCP 18(a)) – P can join any and all claims against D to an original claim against D, even if claims are unrelated, although SMJ must be independently established. Liberal joinder policy. Never compulsory. 1) If joinder is related to the main claim then SMJ is already satisfied. 2) If joinder is unrelated to the main claim, then there must be an independent basis for SMJ. (a) If anchor claim has diversity SMJ, then unrelated claim will also be diverse and have an independent basis for SMJ (assuming claim meets amount in controversy – must be met – can’t aggregate). (b) If anchor claim is based on federal question SMJ, and unrelated claim is a non-diverse state question, then go to supplemental jurisdiction analysis (§1367): i Constitutional power to hear claim – original federal SMJ to hear first claim. ii Statutory authority to hear supplemental claim: ♦ 1367(a) – same constitutional case/nucleus of operative facts. ♦ 1367(b) – limits supplemental jurisdiction for Ps if first claim is based on diversity to uphold 1332. Kills only claims by the P (NA for counterclaims). civil procedure outline – Vaughns 55 ♦ 1367(c) – courts have discretion to deny case based on discretionary factors. B) Joinder of Claims by D: 1) Counter Claim (FRCP 13(a)&(b)) – counter claim is against an opposing party – original D makes claim against original P. (a) Compulsory Counter Claim (FRCP 13(a)) – arises from the same transaction/occurrence as P’s claim and must be asserted as part of this case or it will be lost – e.g. can’t be asserted later. i Assess SMJ: federal, diversity. ♦ Amount in controversy – each claim must be >$75,000 – no aggregation. ii Supplemental (see above). (b) Permissive Counter Claim (FRCP 13(b)) – counter claim does not arise from the same transaction or occurrence as P’s claim – can be asserted now or later. i Assess SMJ: federal, diversity. ♦ Amount in controversy – each claim must be >$75,000 – no aggregation. ii Supplemental. 2) Cross Claim (FRCP 13(g)) – original D makes a claim against a co-party (another D). Must arise out of the same transaction/occurrence. Permissive – never compulsory. (a) Claims must be related. (b) Assess SMJ for the cross claim. 3) Omitted Counterclaim (FRCP 13(f)) – when pleader fails to set up a counterclaim through oversight, inadvertence or excusable neglect, or when justice requires, pleader may by leave of court set up the counterclaim by amendment. (a) Rationale – liberal joinder policy to ensure that the entire case is taken care of together. civil procedure outline – Vaughns 56 III) Party Joinder – when parties are allowed to join or have to join the case. A) Permissive Joinder of Parties (FRCP 20): 1) Joinder of Ps (FRCP 20(a)) – multiple Ps or Ds can join together in a case if claims arise from the same transactional nexus/occurrence and raise ≥1 common question of law or fact. (a) Transactional nexus – broadly construed, flexible test. i Policy rationale – efficiency. (b) Commonality of Law or Fact – at least one issue of law or fact must be in common. 2) Evaluate SMJ. 3) Propriety of joinder is decided at the pleading stage so parties can get the benefits of discovery. 4) Separate Trials (FRCP 20(b)) – the Court retains broad discretion to order separate trials or other proceedings for properly joined parties if necessary and in the interest of justice. (a) Criteria – primary factors include: i Unreasonable embarrassment. ii Expense. iii Delay. B) Necessary and Indispensable Parties (compulsory joinder of parties)(FRCP 19) – who must be joined as a party or else forgo their chance to bring the case – A way for the Court to force a party into a suit if it is a necessary party (P may have intentionally left out). 1) Policy rationale – efficiency and fairness. 2) Steps for determining necessary parties: (a) An absentee party absolutely necessary1/“needed for just adjudication” if it meets one of the following 3 tests: i Without absentee, court cannot accord full relief (FRCP 19(a)(1)). 1 Joint tortfeasors are not considered “necessary” parties. civil procedure outline – Vaughns 57 ii Absentee’s interests may be harmed of she is not joined (FRCP 19(a)(2)(i)). iii Absentee’s interest may subject D to multiple or inconsistent obligations (FRCP 19(a)(2)(ii)). (b) Is joinder of absentee feasible? i PJ. ii SMJ – joinder of absentee party can’t destroy federal SMJ. ♦ Motion to dismiss for failure to join a necessary party (12(b)(7)) – can be dismissed if it will destroy diversity or PJ. (c) If joinder is not feasible (FRCP 19(b)), either: i Proceed w/o absentee, or ii Dismiss. ♦ Factors to determine between proceeding and dismissing: ⇒ Dismissal should be avoided if it will leave P w/o any remedy. ⇒ Adverse consequences of proceeding w/o a party. ⇒ Avoiding adverse consequences. ⇒ Adequacy of a judgment. C) Misjoinder and Non-Joinder of Parties (FRCP 21) – if parties are improperly joined, it is not grounds for dismissal. Claims can be severed and separate trials ordered by court, and the remainder of the claims can proceed. 1) Incentive for parties to err on the side of caution and join claims together b/c they can always be separated later. D) Impleader (FRCP 14) – D joins another party (3rd party) who owes indemnity, derivative liability, or contribution to D (e.g. a joint tortfeador)(e.g. Kroger). 1) 3rd Party D/impleaded party must be liable to D for all or part of Ps claim against D. (a) Then also allow the P to claim against 3rd party D and vice versa if related to the same transactional nexus. 2) SMJ over original claim is not affected by the impleading of a 3rd party D – e.g. D can’t defeat diversity by adding a non-diverse 3rd party. civil procedure outline – Vaughns 58 (a) Nor does 3rd party affect venue. 3) Independent jurisdiction must be established for the impleader claim. 4) Rationale for 3rd party impleader: (a) Efficiency. (b) Avoiding inconsistent results. 5) Reasons against granting 3rd party impleader: (a) Undue delay. (b) Confusion of the issues. (c) Potential prejudice to P by impleading a sympathetic 3rd party. E) Interpleader (FRCP 22) – allows stakeholder who has possession of property to force all claimants into one suit to quiet title or otherwise settle property disputes. F) Class Actions (FRCP 23) – where a representative P sues on behalf of a group. 1) Requirements for class actions: (a) Must meet all 4 prerequisites of FRCP 23(a): i Too numerous for practical joinder. ii Commonality between all class members. iii Representative claim is typical of the class. iv Representative and her lawyer must be adequate. (b) Must meet requirements of at least one type of class in FRCP 23(b): i Specialized class (FRCP 23(b)(1-2). ii For “damages” (FRCP 23(b)(3)) – mass torts. ♦ Common questions predominate. ♦ Class action is superior method for dispute resolution. ♦ Representative must pay for notice to all class members (FRCP 23(c). civil procedure outline – Vaughns 59 ♦ All members are bound by ruling unless they opt out. ♦ Settlement must be approved by court. (c) SMJ – for diversity jurisdiction in class action suits, Zahn held that every member must individually meet the >$75,000 amount in controversy, but 28 U.S.C. §1367 may have changed so that as long as representative meets amount in controversy, other parties do not have to meet. ALTERNATIVE DISPUTE RESOLUTION I) Settlement: A) Settlement as contract – 1) Settlement can include: (a) A release from further suit and as a bar to further claims. (b) Confidentiality. (c) Global release. 2) Courts usually don’t have to approve. (a) Exceptions: i FRCP 23(e) – class actions. ii Judge can invalidate if contrary to principles of public policy. B) Strategic Behavior: 1) Potential conflicts for lawyers as advocates for their clients and as settlements. 2) Offer of Judgment (FRCP 68) – creates a formal mechanism for making an offer and establishes consequences for a party that does not accept the offer. (a) Consequences of non-acceptance – if an offer is made by D and the nonacceeptin party (P) goes on to trial and wins less than the offer, the nonacceeptin party (P) must pay the costs of the offering party after the settlement was offered. i May influence P to settle if a borderline offer. (b) Settlement offers and negotiations cannot be used as evidence if later the case goes to trial. civil procedure outline – Vaughns 60 C) Special forms of settlement agreements: 1) Mary Carter Agreements – In a suit w/multiple parties where one party secretly agrees to settle in exchange for helping P prosecute its remaining claims against the other Ds. (a) Can influences settlement by: i Apportioning more liability to other Ds. ii Would affect credibility of witnesses if known. (b) Courts responses have differed, but generally they are disfavored. i Some courts ban altogether or require disclosure to promote a fair trial. ii Other courts encourage b/c it helps to administer punitive damages in a large class action (Icicle Seafoods) or other situations. 2) High-Low Agreement – an insurance policy against extreme results at trial. (a) Parties set a range of acceptable options and if the jury award is lower than the minimum, party will pay the minimum, and if award is higher than maximum, party will only have to pay maximum. II) Forms and Functions of ADR: A) Adversarial forms of ADR – Arbitration 1) Arbitration is a form of adjudication that mimics the actual court system but is more efficient and based on the consent of the parties. 2) Form: (a) Contractual agreement and arbitration clause. (b) Federal Arbitration Act – made arbitration agreements enforceable in court as if they were contracts. i Motion to compel arbitration. (c) Arbitration is by private and agreed upon parties. (d) Arbitrators are chosen in part by parties. (e) Discovery is limited. civil procedure outline – Vaughns 61 (f) Relief granted: i Damages okay. ii Equitable relief – limited b/c arbitrators do not have power to impact 3rd parties and is not available to oversee enforcement. 3) Appellate Review of Arbitral Decisions – very limited review; usually only if there has been corruption or the arbitrator has exceeded her authority. 4) Collecting the award – parties take the award to a court and under the FAA it is “entered” and then treated as a traditional judgment upon which can be collected in any sister court. (a) Analogous process for foreign arbitral awards under the analogous Act. B) Alternative methods of ADR – Mediation. 1) Mediation is based on consensus and compromise – mediator tries to facilitate between the parties. (a) Mediator is neutral 3rd party who can provide a reality check on position strength. (b) Mediation is non-binding and informal. (c) Can be used in conjunction with law suit. 2) Form: (a) Mediation is by consent, usually part of a contract clause. (b) Results in a settlement agreement. C) Supplemental forms of ADR – combined with adjudication and other forms of ADR. 1) Goals: (a) Give parties an impression of the type of award they could receive. (b) Save money and reduce court case loads. 2) Types – the CJRA of 1990 and the Alternative Dispute Resolution Act of 1998 (28 U.S.C. §651) have increased the use of ADR in the federal courts. (a) Mandatory arbitration with Trial De Novo – requires parties to arbitrate prior to full trial. civil procedure outline – Vaughns 62 (b) Mandatory Mediation – prior to trial, especially for certain types of claims such as family law disputes. (c) Mini Trial and Summary Jury Trials – i Mini trial – privately organized trial to simulate what the merits and arguments are. ii Summary Jury Trial – a Court can order a summary jury trial on the eve of trial – a abbreviated version of the trial with the jury, and the jury returns a non-binding verdict. Aims to encourage settlement. (d) Rent-A-Judge – allowed in some states – courts at parties’ request will refer case to a 3rd party chosen by the parties for resolution. Narrow grounds for appeal. 3) Types – the CJRA of 1990 and the Alternative Dispute Resolution Act of 1998 (28 U.S.C. §651) have increased the use of ADR in the federal courts. D) Evaluating ADR: 1) Disadvantages: (a) Too private – loses the advantages of a public forum and dispute resolution.