Stack - Fall 09 - CIVIL PROCEDURE OUTLINE by liwenting


									                             CIVIL PROCEDURE OUTLINE
                                    Professor Stack
                                       Fall 2009
                                       Section B

I.     INTRODUCTION- The Stages and Structure of Litigation
            It is pervasive to all cases of laws
            Its internal in that it governs how lawyers act
            It’s a distinct part of lawyers craft
            People who love civil procedure
                   o Strategist- person who love strategy
                   o Due Process Person- someone interested in what is fair- CP deals with
                       making things fair
    a. Fairness to the Defendant: Personal Jurisdiction and Notice
        i. Personal Jurisdiction
        Set of doctrines that determine whether a D can be sued in a particular forum,
           based on geography
        Strategy
              o So that you can sue someone in your jurisdiction those people and
                   companies you interact with
              o Structural check- involves horizontal federalism, deals with states
                   relationship with each other, and each state’s courts territorial reach of law
                   and their power
               a. The Pennoyer Framework
                Mitchell sued Neff for unpaid legal feed in Oregon, Mitchell won
                    judgement. To execute judgment he sold property to himself then
                    transferred it to Pennoyer. This was a collateral challenge to the validity
                    of the first case. Neff claims that first trial had lack of jurisdiction
                    personal over him
                Pennoyer loses: Neff was never personally served, publication in
                    magazine was not sufficient bc he was out of state. Also, the prop was not
                    attached at the outset of the lawsuit so there was no way for Neff to learn
                    about the default judgment initially obtained against him.
                Rules: A court may enter a judgment against a non-resident only if the
                    party 1) is personally served with process while within the state, or 2) has
                    property within the state, and that property is attached before litigation
                    begins (i.e. quasi in rem jurisdiction).
                        o The law assumes that property is always in the possession of
                            the owner, and the owner therefore knows what happens to
                            his property; therefore, attachment of the property before
                            judicial proceedings makes constructive notice sufficient.
                    i. Consent- need consent to be sued within forum state
                       1. Ex: Hess v Pawloski- Implied Consent

                Hess (D), a resident of Pennsylvania, negligently struck and
                 injured Pawloski (P) while driving in Massachusetts. Pawloski
                 brought this action against Hess in Massachusetts. Court
                 ruled did have jurisdiction over Hess.
              Hess shows the formality that comes out of Pennoyer, and
                 how awkward it can be
    ii. Pennoyer Take-Aways
         1. Pennoyer takes a very strict view on personal jurisdiction, not
             giving much if any leave way for out of state players who may
             comitt a tort or violation in the state
         2. 3 Types of Judicial Action:
         a. In Personam- jurisdiction over the person, all assets can be
             seized to satisfy judgment
         b. In Rem: way of suing a property and declaring leagal rights in
             relation to a property (about the title)- court has jurisdiction over
         c. Quasi in Rem: Affect the interests of a particular person in a
             thing (at stake here- person’s interest in their land/title) Sue
             property about rights not related to property (have to attach at
             outset of lawsuit)
         3. Full Faith and Credit Clause (basis for Pennoyer): compels the
             enforcement of one state’s judicial proceedings in every other
         4. Due Process Clause of 14th Ammendment (basis for subsequent
             cases): no state can deprive a person of life, liberty, or property
             without due process of law. Questions of scope of each state’s
             authority. Is the assertion of jurisdiction over this person fair?
b. Minimum Contacts Standard: The International Shoe Framework
    (Death of Pennoyer)
  -Does the D have such minimum contacts with the forum such that
  exercising jurisdiction does not offend traditional notions of fair play and
  substantial jurisdiction?
  - a standard, not a rule, because it’s a balancing test
     i. International Shoe v. Washington
     I Shoe had primary place of business in Missouri but kept small team
         of salesmen in Washington, but had no permanent stores in WA. WA
         a business tax and I’Shoe refused to pay it. WA sued and gave
         Notice of Service to WA salesperson and mailed a copy of service to
         Missiouri. I’Shoe says salesman not an “agent” and that they were
         not properly served. Said they have not office in WA so aren’t
         “present” there. Salesmen’s paid on commission and have no
         authority to make contracts or collect money
     Court here rules for in personam judgment, D only need to have
         certain minimum contacts such that the maintenance of the suit
         does not offend traditional notions of fair play and substantial

        justice. Continuous activity in a state by a corporation satisfied the
        minimum contacts standard.
    ii. Questions of Due Process:
        1. Did the corp carry out enough activities in the state to render it
            subject to the state’s jurisdiction?
        2. Was the quality and nature of the activity in relation to the fair
            and orderly administration of laws?
        3. Did crop receive protection of laws while doing business in st?
   iii. New Test: now predicate for jurisdiction under in personam is no
        longer presence in state, but has changed to a new predicate that says
        “if he’s not present, then minimum contacts is sufficient.”
c. General v. Specific Jurisdiction
 General Jurisdiction- states have it over corp when it carries out
    extensive activities in the state- est “presence”
 Specific Jurisdiction- corp doesn’t’ have a lot of activity in state but
    claim arises from this activity- implied consent
        1. General
        a. If you have systematic and continuous contacts with a state, you
            can always be held liable there for any claim
        b. You can always sue International Shoe In St. Louis bc that’s
            where it runs its business
        c. Ex: Helicopteros v Hall
            Helicol- Colombian corporation, chopper crashed in Peru with
               Texans employeed by Helico on board. Surviving family
               members want monetary compensation, blame Helicol for
               crash. General Jurisdiction case. Conference in Houston, but
               agreement signed in Peru, sontract said that controversies
               would be submitted in Peru.
                   o Helicol wants this dismissed for lack of personal
                       jurisdiction. TX SC says its long arm staute reaches as
                       far as the 14th Amendment allows.
                   o Court says claims against Helicol’s not related to
                       activities in Texas and the contacts are not systematic
                       and continuous, that Helicol was not authorized to do
                       business in the TX and never was. One trip to Houston
                       was not systematic and continous contact. No general
                       jurisdiction. Helicol Wins
        2. Specific
        a. Ex: McGee v International Life Insurance Co.
             One contact may be enough
             Specific jurisdiction bc limited to a particular claim (suit on
                insurance co) arising from a particular but limited activity in
                the state (offering an insurance contract).
             Mom of deceased suicide victim attempts to sue insurance
                company, in Texas, but company claims lack of jurisdiction.
                Court rules that bc of contract with Cali resident, and

             premiums paid that Cali courts have interest in providing
             redress to its residents from insurance fraud and thus
         Because of national economic expansion there is a trend
             towards expanding scope of state jurisdiction- and due
             process clause does not preclude Cali from rendering
             judgment on non-resident corporation
    b. Long Arm Statutes: statute that permits the court of a state to
        obtain jurisdiction over persons not physically present within the
        state at the time of service (most states have them)
           -only reach as far as US Constitution will allow
           -usually allow for s substitute means of service (besides
        Federal Claims for Jurisdiction found in Rule 4(k)1
            o Fed courts use the long arm of the state in which the district
                court is located
            o Why?
                 1. if fed court had a more expansive long arm, litigants
                    would pursue fed courts because they could get
                    jurisdiction there if they couldn’t in state court
                 Uniformity- want the same results at state courts as fed
                    courts- do not want conflicting doctrines
    c. Personal Availment “It is essential some act by which the D
        purposefully avails itself to the privilege of conducting activities
        within forum state, thus invoking the benefits and protections of
        the law.”
         i. Ex: Hanson v Denkla: The Greedy Sisters. Delaware and FL
             assert personal jurisdiction over validity of appointments
             made under a DE trust- each state claimed their opposing
             decisions were entitled to full faith and credit. DE won bc
             that’s where the trust was formed
        ii. Differences between Hanson and McGee
            o In McGee there was a heightened state interest indicated by
                statute about insurance
            o Unilateral act (Hanson) v contemplated connect to the
                forum (McGee)
ii. Stream of Commerce
    1. Ex: Gray v American Radiator
        Rule: D must reach into forum in some way
        π was injured by an exploding water heater in Illinois.. The
            water heater was sold in IL, but Titan (ohio) had no contacts in
            IL except that its valves were used on water heaters sold to
            customers there.
        Court ruled that the tort happened in IL (not place of
            manufacture)- negligence in manufacturing valve cannot be
            separated from injury

              o IL has interest in providing relief for its citizens- and
                 persons having substantial contacts in the stat-
                 Reasonable and fair
      Minimum Contacts: a given volume of business is not the only
         way a nonresident can form the required minimum contacts
         with a state- it is a reasonable inference that the companies
         commercial transactions result in substantial use and
         consumption in the state
      Ordinary use of their products in the course of commerce is
         sufficient contact with the state to justify requirement that the
         defend there.
2.    Ex: World-Wide Volkswagen Corp v. Woodson
     Can OK exercise personal jurisdiction over a non-resident auto
      dealer and its wholesale distributor in a products liability action?
     Robinsons purchased a new Audi from Seaway in New York. A
      year later they are driving to AZ to move, and wreck in OK, and
      the kids and Ms. Robinson are burned. WW and Seaway are
      incorporated in NY and do most business in the tri-state area.
      Court Ruled OK does not have personal jurisdiction because
      minimum contact standard not met.
     Two ways to look at minimum contacts: (1) protect D against
      the burden of litigating in a distant or inconvenient forum; (2) acts
      to ensure that states do not reach past their limits as coequal
      sovereigns in a federal system
     Portable torts- can’t just go dragging a product all over the place
      and sue anywhere you want
     New Reasonableness Factors:
          o Burden on Defendant
          o Forum States Interest
          o Convenience for Plaintiff
          o Efficiency for system
     Also need certain kind of Foreseeablity: Not that product will
      find its way to forum state but that the Ds conduct and connection
      with forum Stat are such that he could reasonably anticipate being
      haled into court there.
     WWV narrows the scope of what counts as contact and
      specified it as purposeful availment (a necessary component)
3.    Ex: Asahi Metal Industry v. Superior Court
     Non California resident in a tragic accident due to a faulty
      motorcycle valve manufactured by Japanese Co, Asahi. Asahi
      claims cannot be sued in California court and USC agrees.
     Placement of a product into the stream of commerce is not an act
      of the D purposefully directed towards the forum state.
     New test of Minimum Contacts and Reasonableness established

            o Asahi can be distinguished from WWV bc Asahi had a
                 continual stream of products into Cali, where WWV was a
                 one time entry into OK
            o O’Connor now asserts that personal availment requires a
                 stronger degree of purposefulness than WWV requires- so
                 makes test harder
      Doctrine Status: we now know that both reasonableness and
        minimum are necessary to establish personal jurisdiction
iii. Defamation and Targeted Wrongdoing
     1. Ex: Calder v Jones: Actress brings suit in CA against FL based
        National Enquirer- libel, invasion of privacy, and intentional
        infliction of emotional harm. NE’s largest distributorship is in
        CA- writer and editor are both FL and no contact with CA
      Court says CA has jurisdiction bc the injury was caused in and
        directed at CA residents. Also NE can reasonably foresee that the
        article would be seen and read in CA.
      An individual injured in CA need not go to FL to seek redress
        from person who, though remaining in FL, knowingly caused the
        injury in CA. Intentional Tort.
      Effects Test: (1) Turns on fact that injury is intentionally direct at
        specific place, (2) Knew that the victim would suffer the harm in
        the forum, (3) There needs to be intentionality
     2. Ex: Indianapolis Colts v Baltimore Football Club: Old Colts
        team still uses Indy Colts name and Indy sues for trademark
      Baltimore liable because they assumed risk of injuring valuable
        property in IN (Calder support)
      Falls under Calder test, and hinges upon the fact that the injury
        (consumer confusion on trademark of NFL Colts) would occur in
      Court rules that due process isn’t violated- state in which injury
        occurred is the state in which the tort occurs, and someone who
        commits an injury in IN is amenable to suit there
iv. Commercial Contract
     1. Ex: Burger King Corp v Rudzewicz
      D’s contracted to franchise a BK(Miami) in MI, and the contracts
        show that franchise relationship is established in Miami and
        governed by FL law, contract negotiated in Birmingham and FL,
        and ultimately D committed to a 20 yr partnership for over $1
        million. Ds fall behind in payments, BK voids contract, D refused
        and continued to operate the facility as a BK.
            o FL has jurisdiction over D, bc D voluntarily accepted a
                 long term agreement with FL based BK.
      Quality and Nature test- not random, fortuitous, or attenuated

              D purposefully availed himself of the benefits and protections of
              protections of FL laws by entering into contracts expressly
              providing that those laws would govern franchise disputes.
           If you have a high showing of reasonableness, you may be able to
              get by with a lesser degree of minimum contacts
           Fairness notion of jurisdiction- fair play and substantial justice
           Stream of Commerce Theory-doesn’t work here, because this is
              about contracts not product liability
d.    Jurisdiction Over Property
     Jurisdiction over property, is really just jurisdiction of persons via their
      interests in that property
     Recall Pennoyer! If Due Process is about individual fairness, and
      jurisdictional in rem sill concerned with intent of individuals, Then… the
      framework of in personam (min contacts and reasonableness) should
      bleed down into issues of in rem and quasi in rem
       i. Ex: Harris v Balk- Where does the prop exist if the prop is a debt?
      Harris owes Balk >> Balk owes Epstein
      Debt is property of creditor- so jurisdictional question is where is the
             o Traditionally, the debt travels with the debtor, so wherever the
                  debtor is there the debt is, but this offends the idea of due
             o Each individual claim should have due process, and to hold a
                  debtor liable in a forum in which they never assumed they
                  would be liable, is not fair
      So shouldn’t attach that debt to them so anyone other than the person
         they owe can collect from them
      ii. Ex: Shaffer v Heitner: Heitner (stock holder) sues Greyhound and
          directors in DE for violating duties and getting co. into other legal
          troubles. Ds claim that never set foot in DE and do not have
          minimum contacts there so court ruled NO JURISDICTION.
           Fairness Standard for personal jurisdiction- should it be applied
              to in rem actions? Yes! Recognition that “jurisdiction over a
              thing” is a way of referring to jurisdiction over the interest of a
              person in a thing
                   o Gets rid of In Rem bc property rights are fiction and are
                       simply an extension of the rights of the person who owns
                       the property so thus we should now look to in personam
                       (fundamental new principle of due process)
                   o For In Rem or Quasi In Rem, need to use minimum
                       contact standard from I’Shoe.
e.    Jurisdiction Based on Physical Presence
       i. Ex: Burnham v Superior Court: Does the Dues Process Clause allow
          Cali jurisdiction over a non resident who is personally served with
          process while temp in state, in a suit unrelated to his activities in the

                    1. Mr. and Mr B married in VA, lived in NJ, and decided to divorce
                        so Mrs. B took kids to CA. Mrs. B served Mr. B with divorce
                        papers while he was on trip in CA, and court held there is
                        jurisdiction in CA
                    2. Jurisdiction based on physical presence alone constitutes Due
                        Process. A state doesn’t lack jurisdiction over someone if the
                        litigation doesn’t come from his activities in the state.
                    3. Due Process requires that he if be not present, he have certain
                        minimum contacts. B was present, so doesn’t need minimum
           f. Jurisdictional Reach of Federal District Courts and Raising
               Jurisdictional Objections
                i. FRCP 4: service and process rules, waiver rules, ect.
               ii. FRCP 12(b): How to present defense
              iii. FRCP 12(g): Joining Motions
              iv. FRCP 12(h): Waiving and Preserving Certain Defenses
               v. Raising Jurisdictional Objections: If the court determines at any time
                    that it lacks SMJ, the court must dismiss the action
   ii. Notice and Service of Process
        1. Rule: Notice “reasonably calculated”- all known beneficiaries must receive
            individualized notice, and publication is a sufficient means for notifying any
            non-identified beneficiaries
        2. Ex: Mullane v Central: Common trust fund, P didn’t want to pay to notify
            everyone. In a class action, everyone known has to be notified, not just
            some of them. Notice by mail is fine, but you have to notify everyone you
            reasonably know of.
                     Lawsuit is dismissed not bc forum doesn’t have jurisdiction over
                        the D, but rather bc the Ds weren’t given adequate notice
                     Must have service reasonably calculated
                     Constitutional Achievement of Mullane
                             o Went from rules of service to a broad standard of
                                 reasonability of service
                             o Disassociate method of service to classification of
                                 jurisdiction as in personam, in rem, quasi in rem
        3. Mechanics of Service
             Leaving a copy at Ds home with a person of suitable age and dicretion
             In a method in accordance with law of state
             Service may be waived
             Ds who refuse to waive service must pay for costs of service
             30 days given to respond to request of waiver and no answer to complain
                 is necessary until 60 days after request in sent
        4. FRCP 4 D- mailing waiver of service- if waived you do not have to bother
            with 4 E
        5. FRCP 12- you can get cases dismissed by invalid service of process or
            invalid process (papers themselves)
b. Forum Non Conveniens and Transfer

i. Forum Non Conveniens: The Basic Framework and Int’l Applications
     Attempts to direct the litigation to a convenient, if not the most convenient,
        forum; where both the initial and alternative forums are federal courts, this
        concern with convenience is served by the mechanism of transfer 28 USC §
     Allow courts the discretion to dismiss an action that would be more
        appropriately litigated in another forum even though the proper jurisdiction
        and venue requirements were met in the first forum
     FNC operates btw difference systems of courts (fed and state).
     Must have Alternative forum!
    1. Ex: Gulf Oil Corp v Gilbert: VA resident (whose warehouse burned down
        because of Gulf carelessness) brings diversity action in NY (Gulf has
        business there, as well as VA) against other VA residents, hoping for a big
        reward from jury. Court throws it back to VA, better forum for adjudicating
        decision- more convenient for everyone involved. Local interest in dispute.
        Federal courts can dismiss based on FNC.
       a. Factors of FNC
               1. Private Interest Factors
               a. Ease of access of proof
               b. Availability of compulsory process/Cost
               c. Viewing Premises
               d. Other efficiency factors
               2. Public Interest Factors
               a. burden on jury
               b. local interest in trial
               c. local interest in dispute
               d. avoiding jury confusion/complex choice of law
    2. Ex: Piper Air Co. v Reyno: Scottish plane crash, Scottish citizens killed,
        Action brought in PA against manufacturers of plane. Started in CA,
        transfered to PA. No CA connection at all. 1404 transfer.
           Private Interest: crashed in Scotland, easier source of proof, wreckage
              and decedents all there.
           Public Interest: burden on jury. Complex litigation (using Scottish law
              for one group, and American law for Piper)
           Possibility of inconsistent verdicts, Scottish survivors already had
              lawsuit going in Scotland.
           Unfavorable change in choice of law should not be a sufficient factor
              to deny FNC: essential purpose of FNC is to assure litigation in most
              convenient forum. Since most litigation could be brought in two or
              more forums, P could deny more convenient court based on more
              favorable law, thus negating the purpose of FNC- leading to trials in
              plainly inconvenient forums
    3. Ex: Wiwa v Royal Dutch Petrol: Nigerian human rights violations, where
        decedents victims sue in US courts against Nigerian Shell Corp. helping
        with torture and murder of decedents.

             Dismissed originally on FNC, arguing that Eng is a better forum. But
              US has interest in human rights disputes. Ps choice (US) should be
              given some deference; plus it would hinder them to have to refuel and
              find representation in Eng. D is a multi-national corp, less burden on
              them to litigate in US. So DC erred in allowing Eng to take on case, and
              it now must be tried in US.
          D wants to go to End bc tort laws are favorable to them there- Ps are US
          Gilbert factors important: Is there an adequate alternative forum? No
              Balance of public and private interests- residence is an important factor
     4. Why do we need a doctrine of FNC?
        a. Personal jurisdiction may be easy to prove, but their still may be a lack of
            judicial economy
        b. Allows balancing of which forum has more interest in litigating
        c. Other litigation? Risk of inconsistent litigation
        d. Simplifies complexities possible for choice of law issues- move to forum
            where choice of law is applicable
ii. Transfer Within the Federal System
     1. 28 USC § 1404
             i. “For the convenience of parties and witnesses, in the interest of
                  justice, a district court may transfer any civil action to any other
                  district or division where it might have been brought”
                     -Uses many of the same considerations of private and public
                     factors that enter into FNC determination
                     -The transferee court (receiving court) must have Personal Juris.
                     -burden on the D to show that action would be better litigated in
                     different district
     2. Ex: Hoffman v Blaski: suit brought in TC, patent infringement. Tx D, IL P,
         1391 says that you go where the D resides, which is also where a lot of the
         action happened. No personal jurisdiction over D in IL
        a. 1401-bringing suit “where it might have been brought”- means you can
            only transfer case to where Ds are under personal jurisdiction
        b. If D waives his rights to PJ and venue, you cannot transfer the action bc
            you can only transfer under 1404 where there would have been PJ and
            venue at onset of law suit
        c. Can’t let D waive their rights and have suits transferred to anyplace they
     3. Ex: Ferens v John Deer Co.: Federal District courts have to apply the law
         of the transferor court, regardless of which party initiated the transfer.
          Farmer who loses his land in John Deere, waits to long to file in PA bc
              of statute of limitations. So brings suit in Miss, and then transfers to PA
          Vertical Uniformity: the outcome in federal court sitting in diversity
              should corresponding to the outcomes that would occur in state court.
              Erie doctrine- state choice of law rules apply.
                   o Here Miss S of L and PA substantive law

                      o 1401- is about protecting P and not putting undo restrictions on
                          them. Housekeeping convenience measure. Shouldn’t punish Ps
                          and given them incentive to not transfer.
                      o 1406 applies when venue in the original forum was improper.
                          Transfer under 1406 use the new court’s choice of law.
                      o 1407- actions pending in different districts can be transferred to a
                          single district for coordinated or consolidated pretrial purposes
                      o Filed in state court- FNC- apply law of receiving court…. Filed
                          in federal Court- transfer0 law of transferring court applies
c. Subject Matter Jurisdiction: choice btw state and federal court
     i. Overview
        The power to adjudicate the kind of controversy in case
        Macro: scope of federal judicial power- how far can they reach their power
         within the confines of the Constitution
        Practical: what you need to do to get into federal court
        State Courts have general subject matter jurisdiction- can hear any time of claim
        Federal Courts have limited SMJ
    ii. USC, Art III
         1. Section 1
            a. Does not require the creation of lower federal courts
            b. Must establish Supreme Court
         2. Section 2: types of cases available to fed courts: (1)All cases arising under
             this const, the laws of the US, and treaties made or which shall be made, (2)
             ambassadors, (3) admiralty, (4) US as party, (5) Two states, (6) State v
             citizen of State, (7) Between citizens of different states, (7) Land grants, (8)
             Alienage state or citizen v foreign state or subject
            a. No political questions
            b. No advisory opinions (no advising other federal agencies)
         3. 28 USC §1331- Federal Question Authorization
         4. 28 USC §1332(a)- Diversity Jurisdiction authorization
         5. Why are Federal SMJ questions not waivable?
            a. The const giving federal court certain powers and thus individual litigant
                can not waive those powers
            b. That’s why you can always raise questions of SMJ at any time during the
                trial bc its so important
   iii. Diversity Jurisdiction
         1. 28 USC § 1332 “Federal courts may hear cases where no D is a citizen
             of the same state as any P and the suit is for more than $75, 000.”
         2. Ex: Strawbridge v Curtiss: Incomplete diversity- to get into federal court, al
             of the Ds must be diverse from all of the Ps
                P, a resident of Massachusetts, brought action against D, a resident of
                    Vermont, and other Ds, residents of Massachusetts. Action brought in
                    Federal Court based on diversity of citizenship but no SMJ
                1332- Complete diversity requirement. Put in place to keep citizens
                    from being unjustly biased towards its citizens

               Broad balance idea- parties on both sides of the suit neutralize the bias.
                Joint interest neutralizes bias
     3. Ex: Mas v Perry: Mr. Mas (from France) and Mrs. Mas (from MS) were
         grad students at LSU before they were married in MS. They then went back
         to LSU for 2 yrs to finish grad work and then moved to IL. They rented an
         apartment from Perry (LA), and sued Perry because she had installed 2 way
         mirrors in their bedroom and bathroom and watched them throughout their
         first four months of marriage.
        a. Court found diversity because Mae never became resident or changed
            domicile to LA, just bc went to school there temporarily does not mean a
            change in residency
     4. Amount in Controversy: Need $75,000 or more
          Where P has two related claims against D, you can aggregate claims (ie.
              A=70,000 and B=6,000 then total 76,000)
          Where P has two unrelated claims against D, you can still aggregate
              claims (ie. A=70,000 and B=6,000 then total 76,000)
          Where P1 and P2 have two related claims that are not joint and
              indivisible against D, you cannot aggregate claims
          Where P1 and P2 have two unrelated claims against D, you can’t
              aggregate claims
iv. Federal Question Jurisdiction 28 USC § 1331
     1. Concurrent Jurisdiction of State Courts
        a. Mottley and the Well Pled Complaint Rule
                 1. What does it mean for a claim to “arise under” federal law?
                 a. Rule: Federal law has to be part of Ps well pleased complaint.
                     Get fed juris when P’s statement of his own cause of action shows
                     that it is based upon fed law or the Constitution.
                 2. Ex: Louisville & Nashville RR v Mottley: KY residents hurt in
                     train crash- agreed to frop suit in exchange for free lifetime travel.
                     Acts of Congress forbids given free transportation, Mottley’s sue
                     for specific performance when they can no longer travel for free.
                  No federal jurisdiction here, should have sued in state court under
                     state laws- Cause of action is based on contract- not fed law
                  Federal law has to be part of the complaint, not just a possible
                     defense in the case (Ie this statute is just a possible justification
                     for why Ds stopped paying, but it is not the reason for which P
                  Only when Ps statement of his/her own cause of action showed it
                     to be based on federal law does fed jurisdiction apply
                 3. Critique of Well Pled Complaint Rule:
                 a. Pro: Limits fed court docket, uniformity, administrability- deals
                     with the issue of fed juris upfront and doesn’t make it depend on
                     counter-claims during trial
                 b. Con: Many issues of fed law resolved primarily in state of >>
                     problem on uniformity

      b. Smith Test: A claim can arise under federal law even if there is state
          cause of action so long as the resolution of a federal law issue is
          necessary to the resolution of the Ps claim as pled
               1. Ex: Smith v Kansas City Tile: Shareholder files suit against tile
                   co. asking to enjoin company from investing the funds in farm
                   loan bond issued by Federal Land Banks- Co about to invest its
                   funds, $10,000, into these bonds that are not federally issued
                   bonds, and thus are illegitimate. The issue is a constitutionally
                   valid one so, yes, jurisdiction.
               a. Issue: it seems their claim is based on issue of state law but they
                   are trying to bring it under federal law
               b. Ps right to relief depends upon the construction or application of
                   federal law. Their complaint is that bank officers have a duty of
                   care >> to invest in lawful interest >> and these bonds are
                   unconstitutional…So thus there is a question of fed law
      c. Ex: Merrell Dow Pharmaceuticals v Thompson: Suit against
          manufacturers of Bendectin alleging that they didn’t put sufficient info on
          their bottle warning of danger. P’s claim deformities to new borns was
          the direct result of taking the Benedectin. No jurisdiction bc about
          application of federal standard (which had not private cause of action in
          it), not about federal question
                If congress in passing a federal statute decides that there should
                   not be a private right of action for violation, a state-created cause
                   of action for violation of the statute will never be construed as
                   arising under federal law
                Weak federal interest means no federal question jurisdiction
                If allowed, would open the floodgates
      d. Ex: Grabel v Darue: IRS seized real Property from Grable bc of
          deliquent taxes, and sent notice via mail, and then sold property to Darue.
          Grable did not exercise 180 day statutory limit to redeed property, so IRS
          gave quitclaim deed to Darue. Grable brought claim in state court,
          claiming Darue’s record title invalid bc no personal notice. Darue
          removed case to fed court bc claim under fed tax law, and court
                Fed Gov has interest here- involved tax provisions
                Narrow reading of Merrell Dow- Fed Courts needed to resolve
                Will not interrupt balance btw federal and state courts
      e. No real satisfactory test now, but look to: “In order for a fed question to
          exist, it must be the case either that (1) fed law creates the cause of
          action, (2) or that the Ps right to relief necessarily depends on resolution
          of a substantial question of federal law.”
v. Supplemental Jurisdiction
           i. Joinder Claims: When a fed cause of action exists that is closely
               related to a state claim, then state claim can be joined to the federal

           case. You cannot join a state case where the cause of action is not
           related to the same subject matter as the federal case
       ii. Ex: United Mine Workers v Gibbs- Constitutional Basis
           Gibbs was super of a new mine and was targeted by UMW workers,
             for hiring miners from another union to work for him. Deals with
             Federal labor laws and state law claims against a union. Gibbs
             sought recovery from greater UMW in TN DC and jurisdiction
             under allegations of secondary boycotts. Can fed corts have juris
             over state law claims? Yes, fed judicial power extends to the entire
                 o Common Nucleus of Fact Requirement: State and Fed claim
                     must arise from common nucleus of operative fact (1367)
      iii. Ex: Owen Equipment v Kroger- Diversity Case
           Lady sues Co. for powerline mishap with a crane that killed
             husband, and then Co sued operating co of crane, and lady joined
             operating co in suit. Filed in fed court for diversity, but then it
             comes out that diversity is destroyed. So no federal jurisdiction.
                 o If claim arose under 1332 (diversity juris) then no fed
                 o Neither judicial economy or convenience of litigants can
                     defeat complete diversity requirement.
      iv. Ex: Finley v United States- Federal Question Case
           Ps family dies in airplane crash and she brings FAA (fed claims) as
             well as other state based tort claims against non-federal Ds
           No jurisdiction over state tort claims bc the P has substantial federal
             claims against a first defendant, and state claims against a second
             defendant, for joinder needed same D.
       v. Rule: If fed law claims are dismissed before trial, fed courts cannot
           hear the case; if fed claims are dismissed during or after trial, DC
           should retain jurisdiction.
2. Congress’s Response: Supplemental Jurisdiction
   a. 28 USC § 1367
           1. (A) “If there is a claim under § 1331 then all related (“common
               nucleus of fact”) claims are subject to supplemental jurisdiction in
               fed court (fed question as anchor claim)” (Inclusive gesture)
           2. (B) does not prohibit joinder of Ps filing claims under FRCP 20 or
               23 (Exclusive gesture)
           3. How to determine:
           a. 1st Q: Is there from the same nucleus of operative of fact? If yes,
           b. 2nd Q: Is jurisdiction solely under diversity? If so are claims
               brought by P or D? If brought by P, no supp juris. If brought by
               D, then supp juris is authorized so long as they are part of the
               same opp nucleus of fact
   b. Ex: Exxon Mobil v Allapattah: Two cases consolidated before the USC:
       Case 1- 10,000 Exxon dealers sue under diversity in federal court Exxon

                      Corp bc of overcharges for gas. Some dealers met A in C but not all.
                      Case 2- Ortega, P was girl who cut hand on tuna can, and family brought
                      diversity fed case- girl met A in C but family did not
                          1. Rule: If one person in diversity party has Amount in Controversy
                              met, then it supplements for all other parties coming out of the
                              same operative nucleus of fact, if not all others meet it
                          a. Tries to divide up citizenship and A in C into two separate things,
                              and says that in supp juris claims dismissed if diversity broken,
                              but not dismissed if some parties don’t meet A in C
                3. Removal Jurisdiction
                   a. 28 USC 1441- any civil action brought in a state court where the DC
                      has original jurisdiction can be removed to the DC
                          1. In-state D with diversity cannot remove-already protected from
                              out of state bias (P from another state)- cannot remove even with
                              a counterclaim, ONLY non-citizen Ds can remove to another
                          2. Removability of fed question case depends on Ps complaint. D
                              can remove if fed law preempts state law cause of action.
                          3. Supplemental Jurisdiction- state claim is supplemental part when
                              you have a federal question anchor claim. If original jurisdiction
                              means all of the claims including the anchor claims plus supp
                              claims could have been filed in federal court
                4. Challenging SMJ- not waivable (you can waive PJ)
                            Court has responsibility on its own to ensure that it has
                               jurisdiction over the subject matter of the action

III.       The Process of Adjudication
                               Goals: (1) Fairness to Parties, (2) Parties being heard, (3)
                                 Efficiency, (4) Accuracy, (5) Remedies for Injury, (6) Filter from
                                 judicial abuse, (7) Accessible to all
       a. Pleadings
            i. History of Pleadings: use to have courts and writs for each action, then Judge
               Field pushed for transsubstantive system
           ii. Aims: (1) Notice of litigation, (2) focuses litigation, (3) formalizes the process,
               (4) deters frivolous costs, (5) narrows discovery
          iii. Rule 11: Investigations Required Before Filing Suit
                 1. FRCP 11: Signing Pleadings, Motions and Other Papers… Sanctions
                    a. How much do you need to know to file suit? (Pleading Constraint #1)
                    b. Establishes a standard that lawyer conduct must achieve
                    c. A lawyer has a non-delegable duty to make a reasonable injury into the
                        facts of a case
                 2. Ex: Garr v US Healthcare: Article in newspaper said US Healthcare had
                     insider trading. Attorney sees a case from article but has no client, goes
                     client shopping and finds someone who will let him file a class action suit
                     on his behalf. Gets other attorneys to file identical complaint. Healthcare
                     company files rule 11 sanctions.

         a. Rule 11 requires that an attorney signing a pleading make a reasonable,
             person inquiry and copying someone else’s complaint is not reasonable
             or persona. Non delegable duty.
         b. Purpose of rule is to deter misconduct
         c. Safe Harbor Provision: Must first file motion with other attorney and
             give them 21 days to amend or withdraw complaint from court (if court
             files it not safe harbor)
iv. Plaintiff’s Complaint- How Much detail is needed to/should be pled? (Pleading
    Constraint #2)
      1. Burden of Pleading- Dictates which party is obligated to introduce a
          particular matter into the litigation by raising the matter in the pleadings.
         a. If P fails to raise a matter that it has the burden to pleading, complaint
             will be vulnerable to a motion of dismiss for failure to state a claim.
         b. If D fails to raise a matter that is has the burden of pleading, it will not be
             able to assert that defense at trial.
      2. Burden of Proof- Allocates the duty of proving contested facts and contains
          two elements: (1) burden of production- both parties, and (2) burden of
          persuasion- Ps duty
      3. Rule 7: “Pleadings Allowed; Form of Motions”- complaint and answer
      4. Rule 8: “General Rules of Pleading”- requires a short and plain statement
          that says why the pleader is entitled to relief and what type of relief is
      5. Rule 9: “Pleading Special Matters”- A) Some things have to be pleaded
          with a heightened specificity, B) Greater burden if you plead fraud or
          mistake or condition of the mind- question the character, you need to show
          specifically what they said or did that was wrong that you relied on.
 v. Defendant’s Responses
      1. Motion of Dismiss
         a. FRCP 12- (a)- unless otherwise specified a D shall serve an answer: (1A)
             within 20 days after service of summons and complaint, (1B) if service of
             summons waived under Rule 4(d) within 60 days or 90 if D outside US,
             (2) same 20 day requirement applies to cross claims and counter claims
         b. FRCP B: All defenses must be made in D answer except motions for: (1)
             lack of SMJ, (2) lack of PJ, (3) improper venue, (4) insufficiency of
             process, (5) insufficiency of service of process, (6) failure to state a claim
             upon which relief can be granted, (7) failure to join a party under rule 19
         c. FRCP 12 (b)(6)- failure to state a claim upon which relief can be granted
                    What do you need to show in order to advance further in
                       litigation (discovery here)?
                    Process: (1) except all facts in the complaint as true, (2) you have
                       to view facts in the light most favorable to P
                    Courts are lenient in favor of P- complaint must be very weak for
                       this to work
                    Claim is dismissed without prejudice, can’t come back into court

           Elephant in the Room: The enormous cost of discovery,
            especially on D- So court may be trying to solve this problem
            through pleading standards
d. Ex: Bell Atlantic Corp v Twombly: Alleging that local telephone
   companies entered into non-compete agreements, so as to monopolize
   their perspective regions. ILECS were controlling competition through
   pricing and staying in their own regions, shutting out poor CLECTS.
   Needed to show an agreement, tacit or implicit, in regards to Sherman
   Anti Trust Act.
        USC says that conscious parrellelism is not unlawful.
           Circumstantial evidence. Asking jury to make an inference that
           the ILECS were in cahoots together. As a matter of law, judge
           should have dismissed for summary judgment.
        Can’t have a lawsuit based on observed parallelism. Needs to be
           plausible, not just observable. Rule 11(b)(4)- need factual
        New Standard of Plausibility- needs to be a trifle more probable
           that you are right than you are not
        When Ps couldn’t state of action without explicit knowledge of
           the Ds, they have a harder time initiating the lawsuit
        Question after Twombly: Is it just anti-trust cases?
e. Ex: Ashcroft v Iqbal : Against US Gov officials saying that they
   discriminated against arab men following September 11, by detaining
   them and holding them in bad conditions bc of their race. P’s complaint
   was insufficient because based on facts P put forward their isn’t any
   proof that D’s actions were discriminatory. Just as likely that they did
   not have discriminatory motives than it is that the D’s statements are true.
      Iqbal said that
             o Rule 1: Twombly applied to all cases- not just anti-trust
             o Rule 2: Higher standard of pleading- Factual statements are
                 assumed as true but any conclusory statements are not
                 assumed as true
             o Ex: Iqbal said Ashcroft was discriminatory against him, and
                 court ruled this was conclusory statement so court didn’t
                 have to view it as true in the context of a motion to dismiss
f. Overall effect of Iqbal and Twombly:
      Higher barrier for Plaintiff: (1) Makes for higher costs because now
         have to know more to make compliant, (2) Deters p’s who might
         not be able to pay costs
      Possible inconsistency? Opened up how judges are determining
         motion to dismiss- Now have to worry about indiscriminate motion
         to dismiss
      If you make it easier to dismiss and keep preclusion (can’t re-assert
         claims), then there is a big problem

                   If real problem is cost of discovery? Maybe we can fix this
                    through discovery management
                 Use to be notice pleading- not can be argued that you have to plead
                    all cases with particularity
         2. Defendant’s Answer (Denials and Affirmative Defenses)
            a. Answer:
                  1. You must admit or deny all claims Rule 8b
                  2. Enforcement mechanism: Rule 8 D- if you fail to deny, then it is
                      automatically seen as an admittance
                  3. In order to state a denial- attorney must have done a reasonable
            b. Affirmative Defenses
                  1. D has to raise them on their own, and if they are not alleged by D
                      they are waived
                  2. Avoids rather than denies the truth of P’s allegations
                  3. Ex: contributory negligence
            c. Rule 15: Amended and Supplemental Pleadings
                  1. When can you make an amendment? Makes it easy for a party to
                      amend their pleading without court’s permission (anytime before
                      an answer has been filed). Can amend pleadings during trial if it
                      will aid in presenting the merits.
                  2. Tricky problem: adding a defendant to a claim and having them
                      relate back to original filing
                  3. Supplemental Pleadings: 15(d) A part may be allowed to
                      supplement pleading to set forth new mattes that have happened
                      since date of the original pleading

b. Discovery
   i. Unilateral Disclosure, Scope of Discovery, and Discovery Devices
        1. What are the scope of a party’s unilateral obligations?
                  Rule 26- there are very extensive obligations to disclose a lot of
                     information at the out set
                  Fundamental rule: there shall be no surprises
                  Must provide name and info for anyone who might have
                     discoverable information
                  Require you to provide a copy of all material you are going to use
                     in your claims or defenses
                  Also, a computation of each category of damages claimed by the
                     disclosing party
        2. What is the scope of discoverable material? Rule 26B
              in order for it to be discoverable, it does not have to be admissible in
                 court. Rather, it has to be reasonably calculated to lead to the discovery
                 of evidence that would be admissible
        3. What are the tools for obtaining discovery? (Interrogatories, Production of
            Documents, Physical and mental Exams, requests for admission)
           a. Interrogatories: written questions governed by Rule 33

                  You can respond by providing documents instead of giving long
                   winded answers
               Can be used to probe contentions not just facts
               Basic problems: answers can be evasive and unhelpful
        b. Request for Production of Documents: Rule 34
             Permit a party to inspect and copy documents, can also get from 3rd
             Usually come with complex instructions with lots of definitions
             Precision is important bc if you overshoot then you can get too many
                documents and takes too long to go through documents, but if you
                undershoot you may not get enough information
        c. Request for Admissions: Rule 36
             End up looking a lot like pleadings, but are very specific questions
             “Do you admit that…?”
             any matter that is not denied, is deemed admitted
             helps to narrow in and focus in on what they want to contend and the
                basis for their contentions
        d. Depositions: Rule 30
             Oral examination of an opposing party under oath
             Get to ask follow-up questions
             Even if there are objections to questions, parties still normally have to
                answer, except to enforce privilege
     4. How to sequence this discovery strategically?
           Normally interrogatories
           Request for admissions often come late, so you can narrow your claims
              at the end right before trial once you have gathered a lot of evidence
ii. Limitations on Discovery
     1. Burden/Benefit- Rule 26 (b)
           motion for protective order on grounds that the party seeking discovery
              could get the information on their own or its duplicative, and/or had
              time to get it/ have already asked for similar material
           arguing DC to curtail discovery bc burden or expense of discovery
              outweighs the benefits of getting discovery
     2. Rule 26 f 3 Discovery Plan: Possibility of managerial judging
     3. Attorney-Client Privilege: Discussions between Attorney and client for the
         purpose of seeking legal advice are privileged. Waived by: (1) disclosure to
         3rd parties, (2) inadvertent disclosure (sometimes), (3) someone else not
         represented by attorney present- this is a very fragile privilege
        a. Having the privilege encourages discovery as the lawyer is really able to
            get all of the facts, and proceed from there instead of operating out of half
            truths from clients who are scared to tell the whole truth
        b. Ex: Upjohn v US: Company find out foreign subsidiary is bribing
            government officials and decides to conduct an internal investigation.
            IRS gets wind and they want in-try to collect attorney’s materials during
            discovery to shortcut around doing their own investigation. USC

            reversed an earlier decision and said that the info fell under attorney-
            client privilege.
                a. Rule: Communications between lawyer and client are privileged
                    (surveys and emails), but content is not. Underlying facts are still
                    discoverable, but have to depose managers and ask them
                b. Extends beyond the “control group”- lower level employees need
                    to be able to speak with and be protected by attorney too
      4. Attorney Work Product
         a. FRCP 26(b)(3)- a party cannot discover documents that attorney’s
            prepare in preparation for trial (work product). Protection against
               Exceptions: Need (1) substantial need, and (2) undue hardship
         b. Ex: Hickman v Taylor: Tug boat accident, owners anticipated litigation
            so had attorney out interviewing survivors the next day. Was called upon
            to disclose the exact details of his writings. Did all of this work for
            himself and was expected to turn it over.
               Implication of this- would demoralize profession of attorneys
                  couldn’t keep their own work product to themselves.
               A lot of the info wasn’t written down- asking the attorney to write
                  down his recollection could lead to skewed evidence.
               Opposing party should go out and conduct their own interviews
                  that’s what the discovery process allows for. Tired to save time, but
                  had equal access to same witnesses.
      5. How can we compel discovery when it is not being produced?
            Rule 37 (a) 3 - Motion to Compel Documents that have not been
                a. Questions validity of objection by motion to compel- whoever
                    loses when this comes up has to pay attorney’s fees relevant to
            Rule 26 (c) - Motion for protective order- stops discovery or limits it.
              Has to be for a good cause. Only effective relief for info that is
              embarrassing or confidential. Courts have great flexibility in
              protecting parties.
            Rule 26 (e) – Requires a party to supplement or update their
              information if they learn that a material fact that they have disclosed is
              incomplete or incorrect
iii. Judge and Jury Control over the Merits
      1. Summary Judgment (FRCP 56)
         a. Dispose of a claim on the merits (like a motion to dismiss). Assuming all
            factual allegations true, does complaint state a claim for relief? Look at
            evidence produced by non-moving party – genuine issue of material fact.

b. Moving party must also demonstrate an absence of genuine issue of
   material fact, while Non-Moving party must demonstrate that there is a
   genuine issue of material fact, such that a jury would need to weigh it and
   claims should advance to trial.
c. Why move for SJ?
        Think opposing party lacks evidence for at least 1 claim
        Want to force opposing party to lay out their evidence
        Want to go before judge to force judge to articulate a theory- get a
           clear sense of what judge thinks is necessary to get a verdict
        Can move for partial SJ to pare down the case
        Resolve before trial (costs, ect.)
d. Which cases do you want to let a case go to trial? Only cases with
   factual disputes
e. Difference between Motion to Dismiss and SJ: If you deny a motion to
   dismiss, and the facts line up exactly as P plead them then a motion for
   summary judgment should be denied as well- However, very rarely so the
   pleadings and facts line up exactly
f. In order to prove Summary Judgment:
    i. D moves
       1. D has initial burden to prove that there is a lack of support for a
           material element of Ps case
       2. Next, P has burden to prove that there is a genuine issue of
           material fact, P has to show that a reasonable jury could decide
           the issue for the P given the evidence presented- would this
           evidence, if believed, prove a matter of law
   ii. P moves
       1. P has to show that their evidence is enough that no reasonable
           jury could act for D
       2. Then Ds burden has to show that there is an issue of material
           facts, and reasonably jury could rule in Ds favor
g. 56 (e): If you are opposing a summary judgment you must do so with an
   affidavit (Documents attaching evidence, statements, ect.)- can’t just rely
   on what is in your pleading
h. Ex: Celotex Corp. v Catrett: Ps husband died from asbestos exposure;
   manufacturer denied causation. P bears burden of persuasion, has to show
   preponderance of evidence that the asbestos exposure from this company
   killed her husband. D has to show that there was no exposure or that P
   failed to produce enough evidence.
       Celotex moves for SJ based on second part (P failed to produce
         enough evidence). Shifts burden of production to P – has to present
         evidence that the moving party is wrong and that they do have
         evidence that Celotex was responsible.
       Celotex has options – affirmatively disprove Catrett’s evidence, or
         show occasions where they did not come up with evidence.
       If you want to prove something at trial, you had better prove it at a
         motion for summary judgment. Substantive evidentiary burden.

          Motion turns judge into jury before a trial – making burden of proof
           into showing one sided evidence that clearly points to a verdict.
           Requires district court to weigh evidence (exactly what they aren’t
           supposed to do) – questioning merits of the facts which is really the
           jury’s job.
         Court basically finds that Celotex doesn’t have to produce evidence
           negating the plaintiff’s claim under Rule 56. Just have to show
           absence of evidence.
   i. The Standard and Shifting Burdens
         Difference between when Moving party holds burden of production
           at trial and when moving party does not hold burden:
                o If burden (plaintiff): if no reasonable jury could find in the
                    favor of the Def
                o If no burden (def): no reasonable jury could find in favor of
                    the plaintiff
   j. Ex: Anderson v Liberty Lobby:
         Rule: Threshold inquiry on a SJ motion revolves around whether
           there are any genuine issues of material fact.
         Issue: Whether the clear and convincing evidence requirement must
           be considered by a court ruling on a motion for summary judgment
           under Rule 56?
         Majority: The evidentiary standard that the P must meet at trial
           should also apply to summary judgment - Allows judge to be more
           gatekeeper as to whether case should get all the way to trial
         Dissent: Shouldn’t impose heightened standard of proof in
           summary judgment because should just be looking for a
           “possibility” and the jury should be the one to determine if it meets
           the “clear and convincing” standard- If judge uses heightened
           standard at sum judgment- she is weighing the evidence, which is
           the job of the jury
2. Judgment as a Matter of Law
   a. FRCP 50(a)&(b): JMOL should be granted if a party has been fully
      heard on an issue and there is no legally sufficient evidentiary basis for a
      reasonably jury to find for that party
       Last chance for judge to take case away from jury
       After P has put on their evidence, D can move for JMOL
       Rule 50 motions ONLY available in jury trials
       Rule 50 (b)- judgment after jury verdict- have to get make JMOL
         motion before jury verdict in order to be eligible to make it after
       If you don’t make this motion you waive your right to make a
         Judgment not withstand the Verdict after the verdict
       They are routinely denied: In order to get jury’s verdict and then
         JNTV is entered so that in case of appeal the court has a judgment to
         rely upon

                  b. Ex: Dixon v Wal-Mart Stores: Dixon sues Wal-Mart bc she fell and was
                      injured at store. Says she fell on piece of plastic and that Wal-Mart had
                      constructive knowledge that it was there.
                       i. Court said that Dixon did not prove that tie was on the floor for 8
                          hours, 13,000 ppl in store everyday, only 50 accidents per year- in
                          view of safety record it makes it less probable that it sat on floor for 8
                          hrs without being noticed- assumes that safety standards are followed
                      ii. Issue: was their enough evidence that reasonable jury could conclude
                          that Wal-Mart has constructive knowledge of the plastic binder’s
                          presence on the floor
                     iii. JMOL in favor of Wal-Mart. Granted if a party has been fully heard
                          on an issues and there is no legally sufficient evidentiary basis for a
                          reasonable jury to find for that party on that issue. Also works if
                          facts point overwhelmingly to moving party that court believes that a
                          jury would not arrive at a contrary verdict.
               3. Recent trend in Motion to Dismiss, SJ, and JMOL:
                  a. Judicial authority going up, and deference to the jury is going down
                  b. Higher burdens on the P: Earlier on P needs more evidence, actual
                      evidence- Does P have plausible inferences?
                  c. Saving costs by deciding trial earlier without jury?
               4. Motion for a New Trial (Rule 59)
                  a. Gives court power to grant relief from a flawed jury verdict on a lesser
                      showing than is required for a JMOL
                  b. TC can grant this motion whenever it deems that justices requires so
                       i. When verdict was: (1) against the weight of evidence, (2) size of
                          damages was inappropriate, (3) or where otherwise necessary to
                          prevent injustice
                      ii. Can enter this even if there is evidence supporting nonmoving party
                          (unlike SJ or JMOL)
                  c. Remittitur- court denies motion for a new trial with the condition that P
                      will accept a smaller award
               5. Interlude: Adversarial Justice Considered: Germany v US
IV.      Claim and Issue Preclusion: The Binding Effect of Prior Judgments
         -- Two kinds: Claim (Res Judicata) and Issue (Collateral Estoppel)
         -- Stare Decisis: “to stand by things decided” precedential legal rule to be followed
in a different case with different parties but same issues
    a. Claim Preclusion (Res Judicata)
           -- Restatement (Majority Rule): If you are arguing about things that arise out of the
         same facts, you must bring all your claims at once
           -- To get it has to be same claim, with a valid, final judgment with same parties
           -- When Preclusion applies it is absolute
           -- Questions that must be fulfilled: same claim? Same parties? On the merits?
           -- Scope of claim
               1. Since CP is conclusive for entire claim, its essential to determine exactly
                   what the dimensions of the claim are

     2. Prevents the splitting of a single cause of action- a claim can include much
         more than P chose to state in complaint, but is he sues on any part of claim
         there rest is merged and he cannot sue on it later
  --Why is claim preclusion a good thing:
         o We are worried about possibility of impairment of judgment, it might
              undermine the first judgment
         o Repose: legal value in finality, shouldn’t be continually subject to
         o Efficiency- get everything litigated at one time
i. Same Claim
       1. Ex: Rush v City of Maple Heights: Motorcycle accident on a bumpy
           street, P Sued for personal property and won and then separately sued for
           personal injuries. City invokes res judicata. Court’s final judgment
           entered for defendant- res judicata upheld
        a. Same facts and legal theory (negligence) in play- thus preclusion
        b. Rule: when a person suffers both personal injuries and property damage
            as a result of one wrongful act, only a single act of action arises, the
            different injuries occasioned thereby being separate items of damage
            from such an act
     3. What does same claim mean?
        a. Transactional/Evidentiary: Same evidence needed to prove claims
        b. Wrongful Act: Same legal action (need to look at law)
        c. Ex: Herendeen v Champion: Herendeen a former employee of
            Nationwide paper company claims that he voluntarily resigned from his
            position because he believed he had an oral agreement with management
            that he would be rehired. And they never rehired him. He maintains they
            did this to deprive him of his employment benefits
             i. Two Actions-same facts, same transaction: breach of oral agreement
                  (state court), and breach of original contract (federal diversity court)-
                  seeking damages of lost future commission and lost pension benefits
                  in both.
            ii. Holding: claims are different and can be tried separately
           iii. Overlapping facts, but difference in legal wrongs
                   under legal wrongs approach, you only need facts
                   under legal theory approach, need facts and theory
     4. Transactional Approach Facts (claim preclusion) v. Common Nucleus of
         Operative Facts (Supplemental Jurisdiction) (see note 6 pg 787):
        a. Same way of discovering facts needed, But very different legal
             i. In supp juris- you may bring it
            ii. In CP- if you do not bring it you are barred from bringing it forever
        b. Transactional occurrence is broader than the operative nucleus of fact
        c. Which has least effect of P’s choice of fed forum?
             i. If ONF defined more narrowly than < ST : Forced to litigate in state

            ii. ONF= ST: If in federal, must bring all claims, Almost makes
                supplemental jurisdiction mandatory
           iii. ONF> ST: Gives them most discretion as to whether or they have to
                file in state or federal court
ii. Changed Circumstances and the Absolute Character of Preclusion
     1. Ex: Federated Depart Stores v Moitie
        d. Rule: res judicata is upheld even if it is discovered that final decision was
            legally wrong
        e. 7 anti-trust actions were brought and dismissed on failure to bring a
            claim- 5 appealed and got judgment reversed. After 2 others who didn’t
            appeal tried to start new cases in order to recover- USC upheld res
            judicata despite legal wrong in first case
        ** Res Judicata IS in line with simple justice as it is fair to apply it
        evenhandedly and public policy calls for end to litigation and RJ fulfills this

      2. Ex: Harrington v Vadallia: Sex discrimination case, and when civil rights
          statute passed tries to bring claim up under that later
         f. Issue: Does someone who filed under one statute, have the right to bring
             new claim when another law changes and is now applicable for her first
              i. Court says res judicata and cant bring old claim under updated law
             ii. Conflict: requires that P bring “kitchen sink” pleadings and bring up
                  every claim that is conceivable- creates efficiency concerns
      3. Subsequent Aggravation of Damages (note 3 pg 793)
             If you have damages that do not fully ripen you need to wait as long as
                 you can so that the case can encompass as many of your injuries as
                 possible, But have to do so in light of statue of limitations
iii. “On the Merits”
          ** Rule: If first judgment is dismissed for reasons other that “on the merits”,
          like jurisdictional reasons, then res judicata doesn’t apply and second claims
          can be brought
      1. Ex: Costello v US: INS wants to revoke Costello’s citizenship because he
          entered his occupation as “real estate” when he was, in fact, a bootlegger.
          IN earlier denaturalization claim against Costello, INS never submitted an
          affidavit of “good cause”, so first claim dismissed but court did not specify
          with or without prejudice.
           a. Court hold that failure to submit an affidavit of good cause is
                equivalent to “lack of jurisdiction” and under Rule 41(b) that doesn’t
                qualify as a judgment “on the merits”
           b. Normally, if judgment is not specified as without prejudice it is a
                judgment on the merits
      2. FRCP 41 (b): Exception to claim preclusion (not “on the merits”)- Lack of
          jurisdiction, improper venue, failure to join an indispensable party
      3. Curable Defect Requirement

             a. Ex: Dozier v Ford: Dozier files breach of warranty claim in one district
                  for an insufficient amount of damages, but then tries to file in another
                  district for higher amounts of damages
                Although dismissed without prejudice for lack of jurisdiction (doesn’t
                   operate as adjudication on the merits- should be able to refile), it was
                   dismissed as res judicata when refilled.
                Dozier was permitted to refile in state court but not authorized to refile
                   whether or not there was federal jurisdiction.
                This was not a “curable defect,” because it made him change the
                   facts of his case- as opposed to in a curable defect you don’t
                   change original story, just change what or where you file.
b. Issue Preclusion (Collateral Estoppel)
    i. The Basics
        1. Bars successive litigation of an issue of fact or law actually litigated and
            resolved in a valid court determination essential to the prior judgment even
            if the issue recurs in the context of a different claim. Prevents a party from
            relitigating an issue that arose in prior litigation.
           a. Parties against whom you are asserting preclusion MUST have been a
                party in the first proceeding
           b. Issues must be the same
           c. Rationale: Impaired judgment of jury, already been decided, efficiency,
                strong assumption for correctness of judicial judgments
        2. Ex: Little v Blue Goose Motor Coach Co.: Dr. Little crashed into bus while
            driving. In first trial, bus wins and collects damages as Dr. Little is found to
            be negligent. Mr. Little then tries to bring claims against bus, but can’t
            because of issue preclusion.
           a. For Little to win in second lawsuit, he would have to prove that he was
                not negligent and that the bus company was. Unfortunately, in order to
                get the first verdict the court found Mr. Little negligent and the bus
                company not.
           b. Could impair judgment of the first verdict. If you disagree with the
                outcome of a suit, you repeal it (reoccurring theme)
   ii. Parties Bound
        1. 6 Categories of non-party preclusion exceptions
           a. Consent
           b. Actual control of litigation
           c. Substantive legal representation
           d. Relitigation of a prior judgment through a proxy
           e. Adequate representation in a properly structured litigation
           f. Statutory schemes that expressly provide for the binding of non parties
        2. Adequate Representation Test:
           a. Alignment of interests between the party and the nonparty
           b. Party undertook to act in a representative capacity or court took steps to
                protect interest of non party
           c. 3rd party had some notice

      3. Ex: Taylor v. Sturgell: Taylor filed suit against FAA seeking info about an
          old plane. Greg Herrick, Taylor’s friend, had previously requested info but
          lost suit. The two men had no legal relationship and there is no evidence
          that either controlled the other
       Issue: Is virtual representation exception to the general rule against
          precluding nonparties?
       Holding: disapprove of the doctrine of preclusion by virtual representation
          and hold that judgment against Herrick does not bar Taylor from
          maintaining suit
       Huge due process question when you bind non-party to a holding of a case
          in which they were not present or represented
iii. Mutuality (Defensive and Offensive)
       Mutuality (old doctrine) use to be that only parties involved would be able
          to be bound by or use a decision
       Non-mutuality- now used where a decision against one party can be brought
          in and used in another trial
      1. Non-mutual Defensive Issue Preclusion
         a. D uses previous decision to stop case brought by P as its already been
         b. Incentive for P’s to bring all of their Ds in the 1st case
         c. Ex: Bernhard v. Bank of America: Mrs. Sather is old woman, who has a
             joint account with Mr. Cook- transferred her money from San Simas bank
             to First National as a gift. And then she dies. Heirs unhappy and go after
             Mr. Cook, original executor of the will, to get transferred $$, but court
             rules it’s a gift. One of the heirs becomes new executor of the will and
             tries to sue Cook again for same money
              i. Bank asserts non-mutual defensive issue preclusion and wins. “Where
                  a party though appearing in two diff suits in diff capacities is in fact
                  litigating the same right, the judgment in one estops him in the other”
      2. Non-mutual Offensive Issue Preclusion
         a. New P seeks to take advantage of another party’s victory against a D to
             preclude D from contesting the issue of liability- “Since you’ve already
             been found liable by someone else, you cannot now dispute your liability
             to me.”
         b. Don’t want to allow P to bring claim when they could have easily joined
             first law suit
         c. Its not barred but its in the discretion of the court based on certain factors:
              i. Could P easily joined in initial action? if they could have joined
                  easily and they didn’t, then they could abuse system and only file if
                  the initial case goes in their favor
             ii. Would it be unfair because of high stakes in forum 1? (sandbagging)
            iii. Danger of inconsistent verdicts
            iv. Great procedural opportunities in Forum 2 (needs to be significant
                  procedural difference that goes to D’s ability to prepare a defense)
         d. Ex: Parklane Hosiery Co. v. Shore : Complaint alleged D issued false
             proxy statement in connection with merger- 1st Case SEC sued D and

                    injunctive relief was approved on ground that proxy was false and
                    misleading and Appeals confirmed, 2nd Case Class Action against D-
                    moved for partial sum judge based on holding in 1st case
                     i. Offensive- Issue Preclusion allowed here- court saw no reason to ban
                        it here
V.     Joinder and Class Actions The Boundaries of the Lawsuit
   a. Joinder of Claims, Counterclaims, and Cross-Claims
        i. 3 Basic Questions: (1) What is the party pair? (2) What claims CAN be brought?
           (3) What claims MUST be brought?
       ii. Joinder of Claims by Plaintiffs
             1. FRCP 18(a): a party asserting a claim to relief as an original claim, cross-
                 claim or 3rd party claim, may join, either as independent or as alternate
                 claims as to the party ha against opposing party.
                a. In a nutshell, once a party has made a claim against another party, he may
                    make any other claim he wishes against that party, he may make any
                    other claim he wishes against that party
                b. Does not require any transactional relationship between the claims in
                    order for them to be joined
                c. Joinder is never required by 18(a), but parties should keep in mind res
                d. 18(a) does not affect SMJ requirements- still need to meet those to bring
      iii. Joinder of Claims by Defendants and Co-Parties
             1. FRCP 13 (a): Compulsory Counterclaim: Have to state counterclaims that
                 arise out of same transaction or occurrence that is the subject matter of the
                 opposing party’s claim and does not require a 3rd party for adjudication.
                a. Concerned with the danger of inconsistent adjudication and with judicial
                    economy- embodies rule of preclusion
             2. Ex: Grumman Systems v Data General: DG asserts a claim against
                 Grumman in MA. Grumman has an anti-trust counter claims against DG
                 but they bring it as a separate suit in CA instead of joining to the same suit.
                 They add on more D’s too
                a. Court hold that Grumman has to assert this as a counterclaim in the MA
                    action. 9th circuit takes expansive view of Rule 13 and says that although
                    the facts are not identical and the counterclaim embraces additional
                    allegations, it doesn’t matter. Have to join. Court grants motion to
                    dismiss so action can be brought at counter-claim in MA.
                b. Test to determine if joining claims are compulsory: (1) Same
                    transactions, and/or (2) Logical relationship
                c. Judicial Economy and Feasibility not a test because if it was D would
                    wait long enough so that it couldn’t be joined bc 1st case too far along- it
                    is not a factor but is an underlying motivation
                d. Preclusive effect of rule 13 not explicit but underlying
             3. Rule 13 (b): Permissive Counterclaims “A pleading may state as a
                 counterclaim against an opposing party any claim that is not compulsory.
      iv. Joinder of Parties:

        1. Permissive: Rule 20 allows P to a) join other Ps with himself, b) make
            several parties co-d’s to his claim. If P join in an action, the claims for
            relief must 1) arise from a dingle transaction, occurrence, or series of
            transactions or occurrences and 2) there must be a question of law or fact
            common to all Ps which will arise in the action. If co-D, claims must 1)
            same as for 1P, and 2) contain a common question of law or fact
        2. Compulsory: Rule 19
           a. Sets out the circumstances in which parties must be joined. A party must
                be joined if failure to join would result in a) incomplete relief (without
                the party relief can not be given), or b) impaired interest (if the party is
                absent, the other parties will have double, multiple, or otherwise
                inconsistent obligations)
           b. Can make some ppl immune from being involved in a case, but will not
                stand in their way to entering a case if they want to
           c. Ex: Republic of Philippines v Pimentel: Impleader action to determine
                ownership of prop allegedly stolen by former Pres of Phillippines. Two
                entities invoked sovereign immunity, but Ps want to continue case
                without them
                 i. Issue: interpretation of Rule 19 in context to foreign sovereign
                ii. DC and Appeals say case can continue without Republic and
                    Commission. Appeals gave insufficient weight to foreign sovereign
                    status of the Republic and court further erred in reaching discounting
                    the merits of their claim- So case cannot continue without Republic
                    and Commission
        3. 3 Party Joinder: Rule 14
           a. D can add on other parties who can assert counter-claims against P, and
                supplemental jurisdiction applies to D and 3rd party D
           b. P may make claims against 3rd party Ds as well, but then must meet
                original SMJ (diversity and amount in controversy) in order to bring
                 i. Under §1367 (B) claim is excluded bc P joined party under rule 14- if
                    we allowed for claims by P under supp jurisdiction here it could serve
                    as a run around diversity jurisdiction (P who couldn’t originally bring
                    claim against person would wait and let other D implead them and
                    then state claims)
                ii. Ex: Owen v Kroger (revisited): Kroger (Iowa) is electrocuted and
                    dies. Estate sues Nebraska based employer, who issues 3rd party
                    complaint against crane manufacturers, Owen.
                         Employer gets out of suit on SJ. Three days into trial, they
                            find out that Owen’s principle place of business is Iowa, so no
                            more diversity jurisdiction- so P can no longer sustain claims
                            for 3rd party S (Owen).
b. Class Actions

  i. General: Governed by Rule 23. The idea behind class action is that a sample of
     named parties can adequately represent the other members of the class. Parties
     who do not opt out of the class are bound by any decision in a class action.
 ii. Reason: Class action allows people with small claims that are not worth the cost
     of adjudicating to join together and recover small amounts in a single action.
     Provides a way to aggregate low level but mass distribution issues that are
     problems in mass societies
iii. When determining if a class action is appropriate ask: (based on rule 23)
       1. Is joinder of the entire class impracticable? (usually due to a large number
           of people)
       2. Do all the members of the class have common questions of law or fact?
       3. Are the representative’s claims typical of the entire class?
       4. Will the representative adequately represent the interests of the class?
iv. IF all four are true then a class action may be based on one of the following:
       1. Separate actions might (i) require inconsistent conduct by the D or (ii)
           substantially impair the interests of other members of the class
       2. The same kind of relief would be appropriate for the entire class
       3. Questions of law or fact common to the entire class predominate questions
           unique to any individual in the class, and class action is a superior remedy to
           any other.
 v. Rule 23 Requirements
       1. Rule 23 (a): Must have (1) Numerosity, (2) Commonality- facts and law, (3)
           Typicality- type of claim or defense, and (4) Adequate Representation- no
           conflict between named Ds and Attorneys are competent
       2. 23 (b): Types of Class Actions
          a. 1. Limited Funds Class: When (a) separate actions would create a risk of
              inconsistent or varying adjudications with respect to individual members
              of the class, which would est. incompatible standards of conduct for the
              party opposing the class: and (b) when individual
          b. 2. Seeking injunctive and declaratory relief- no damages
          c. 3. Relationship between the parties is greatly attenuated, but class
              members are similarly situated bc of conduct by D
       3. The 23(b)(3) class: (most dominant and complex class)
          a. Two Requirements: (1) Predominance- same issues and law, and (2)
              Superiority- class action is better than any other type of claim
       4. Ex: Eisen v Carlisle v Jacquelin: Ppl who traded in odd lots during certain
           period sue brokerage firms who they claim have a monopoly on the market
           for overcharging them. They seek only an award of $70, so no way these
           people would litigate as individuals. Initiate (b)(3) class action.
          a. Would rather be a (b)(1) or (b)(2) class bc of notice provisions- at
              discretion of the court instead of costly individual mailing
          b. Notice requirement for (b)(3) says that you have to individually notify all
              Ps who can be identified with a reasonable effort. That means if you
              have the names and addresses of 6 million ppl involved, you have to tell
              everyone of them. No publications, no informing a percentage of them,

              they all deserve to know. Not a waivable discretionary power. And
              petitioner has to bear the costs. Also must include opt out provision.
               i. Can be very expensive and a deterrence to litigation
 vi. Attorneys’ Fees: sometimes attorneys will settle for less than what the class
     deserves because they want to get paid; the courts are the only thing that protects
     the class at this point.
vii. Class Actions and Mass Tort Litigation
       1. Ex: In re Bridgestone/Firestone Tires: Recall of many tires because of
           defects. Certified as a 23(b)(3) action and then DC separates claims into
           two separate classes- owners of ’99-’01 Exploreres, and owners from ’90 to
           present of Firestone tires
          a. Indiana choice of law would govern this class action- and their law says
              that you have to apply the state tort law or where the harm came from.
              Means 50 sets of jury instructions. So ultimately this case can not be
              certified nation-wide.
          b. Rule: Class actions can only be across several states because need one
              law- eliminates nationwide class actions that use state laws- does not
              eliminate nationwide class actions that use federal laws
          c. DC asserts central planner model of efficiency-“one case, one court, one
              set of rules, one settlement price for all involved”- may be rough justice,
              but will all be done at one time, efficiency for court system
          d. Easterbrook promotes market model of efficiency: Want to get enough
              information about facts and validity of claims before you certify class.
              Do this first by allowing some individual litigation first and then once
              there have been enough cases decided you can use those cases to help
              decided whether or not to certify the class
       2. Ex: In re Rhone: Hemophiliac population infected with HIV due to
           contaminated blood solids produced by D’s. DC certifies class for certain
           issues only- Going to establish if there was negligence or not, and then let
           each individual P go and try own case using the DC verdict to preclude
          a. Judicial blackmail: Pressure on D to settle even though there is a low %
              chance that they are actually liable but bc stakes are so high bc the class
              is so large, then they are forced to settle bc they can’t risk the small %
               i. If there is a high % chance they that are liable and then they are
                   forced to settle then it isn’t blackmail
              ii. Need assessment of merits in order to determine this
             iii. Rule: Can now appeal a class certification decision under Rule 23f-
                   allows for interlocutory review for class action certifications
       3. The Settlement Class- some class actions are certified solely for settling
          a. Many Class Actions settle because of enormous costs, but some actions
              settle at onset of suit and were designed that way, asking the judge to
              certify the class for purposes of settling
          b. Ex: Amchem Prods v Windsor: Scheme of stipulations for different
              categories of asbestos disease. Class was certified for settlement only.

                       i. Divided into sub categories – people who haven’t manifested injuries
                          will want to draw on a fund if they are hurt in the future. Same
                          representation for those who are hurt now and those who suffer a
                          latent harm.
                      ii. Problem of notice here – how can you notify someone who hasn’t
                          been hurt? Is it fair to bar them from future litigation?
                    iii. Even if this is a “settlement” class they still have to meet the
                          requirements of a class under rule 23. Protects rights of absentee
                          class members.
                     iv. Do not meet Rule 23 requirements so no class
      viii. Class Action Fairness Act (CAFA)
              1. States were being too permissive with certifying classes so act expanded
                  federal jurisdiction over class actions that are based on state law while also
                  placing stricter controls on the approval of settlements by federal courts.
              2. Set minimum diversity requirement (at least one D and one P from different
              3. Each of the class members themselves do not have to satisfy the amount in
                  controversy so long as the aggregate amount at issue is over $5 million
VI.     The Law Applied in Federal Court- Erie and Progeny
    a. What Law Applies? Federal or State?
         i. State Law in Federal Courts
              1. Rules of Decision Act, 28 U.S.C. § 1652 “The laws of the states, except
                  where the Constitution or treaties of the US or Acts of Congress otherwise
                  require or provide, shall be regarded as rules of decision in civil actions in
                  the courts of the US, in cases where they apply.”
              2. How does a federal court sitting in diversity determine whether it should
                  apply state law or federal law? Rules of Decision Act- state law applies
                  unless there is a superceding federal law.
              3. Ex: Swift v Tyson: Common law question at hand, whether a person who
                  purchases a note in satisfaction of a pre existing debt is a bona fide
                  purchaser. In NY, no; in federal court, yes. Tyson wants to apply NY law,
                  Swift wants to apply federal law
                         Fed court must apply state statutes, state court construction of state
                           statute, rights and titles of real estate, local custom
                         Fed court does not have to consider st. common law and visa versa-
                           because decisions by judges are just immutable principles floating
                           around in the ether, and are just evidence of what laws are.
                         Thus if no state statute on subject judges can makes up federal
                           common law based on natural law
                         So right now we have two versions of common law (fed and state)
                           both deciding things on their own, with the hopes to make the same
                           decisions but no power or plan to help them do so
              4. Ex: Erie R. Co. v. Tompkins: Tompkins injured at night walking along
                  common right away when Erie train passed by with a projecting door. Sues
                  RR in New York Federal Court for negligence. Erie wants to apply PA

         common law which would treat Tompkins like a trespasser and then
         wouldn’t be liable for negligence
        a. Lower courts side with Tompkins, but Brandeis reverses, saying Rules of
            Decision Act is erroneous.
        b. Issue: Is Swift good law?
        c. Ruling: No, There is no federal general common law. Federal courts
            have to apply state common law.
             i. There may still be small federal common law that deals with federal
            ii. Swift allowed an out of state D a lot of options in manipulating
                choice of forum that is denied to in-state Ds (don’t have diversity
           iii. Practical Problems: Discrimination
                1. Instate P v. Instate D: P can only sue in state court
                2. Outstate P v Instate D: P can sue in state or fed
                3. Instate P v Outstate D: P can sue in state/fed
                4. What is troubling is out of state parties have opportunity to veto
                     state forum while instate parties do not
        d. Erie’s Constitutional Core
             i. Equal Protection- Federalism Protection: Congress has no power to
                enact rules of common law, so thus shouldn’t create that
                1. Swift allowed Fed to encroach on state courts.
            ii. Separation of Powers- Congress may be able to enact law, and thus
                federal courts should not be making up the federal laws, Congress
                should be
        e. Decision promotes greater horizontal forum shopping
ii. The Scope of Erie: Procedural or Substantive laws applicable?
     1. OUTCOME DETERMINATION TEST: Ex: Guaranty Trust Co. v. York:
         Diversity suit for breach of fiduciary duties would have been dismissed in
         state court because of statute of limitations, so Ps wanted to use fed statute
         of limitations which would allow suit, saying that statute of limitations is
         procedural so federal should apply.
         Judge held that state statute of limitations was binding on federal
            proceedings. A federal court adjudicating a state created right based on
            diversity is basically a court of that state and cannot afford recovery if the
            right to recover is made unavailable by that state.
         Outcome Determination Test: Would the application of the federal law
            change the outcome of the case? If yes, then use state law
         Ruling that the command of Erie is to have outcomes of decisions be the
            same whether they are litigated in federal or state court.
         Problem with Outcome Determination:
             i. Now depends on at what time you look at the case
            ii. Its over inclusive because so many determinations go into a case and
                could change it
         DETERMINATION: Ex: Byrd v. Blue Ridge Rural Elec. Cooperative,

    Inc.: P sued for negligence in a federal court in SC. D argued that P was
    “statutory employee: of the D, rather than an independent contractor and
    thus could only recover under limited workmen’s compensation benefits
   a. Under a SC decision, the question would have been determined by a
       judge not a jury.
   b. USC held that the federal policy of having factual matters decided by a
       jury, not the state approach of having the judge decide the issue, must be
   c. When the issue is deeply rooted in federal interest then we are going to
       weigh outcome determination and federal interest & see which one wins
        i. Showed that state decisions that are basically procedural (though
           maybe ambiguous) aren’t necessarily controlling even if they are out-
           come determinative. Must use state v federal interest balancing test.
       ii. Here, fed interest wins out and fed rules for judge/jury be applied
   d. Considerations for this test: (1) Outcome ambiguity, (2) Claims bound up
       in state created rights, and (3) Countervailing interest in a independent
       federal judiciary (here: judge/jury allocations, federal interest- 7th
3. Rules Enabling Act: 28 USC § 2072
   a. Congress makes a statute that allows Supreme Court to make rules of
       practice, procedure and evidence for US DCs and appeal courts. Rules
       cannot abridge or modify substantive rights.
   b. FRCP came from that and now all rules in the book are valid
4. Ex: Hanna v. Plumer: P filed a diversity suit in MA, serving process to
    wife of Executor, according to Rule 4(d)(1). D claimed that service
    conflicted w/ MA statute special provisions for serving executor or estate
   a. USC holds that Rule 4 is applicable bc of the Rules Enabling Act
   b. How do we know it FRCP applies?
        i. Is FRPC valid under REA (arguable procedural)?
       ii. If answer yes apply FRPC bc we assume congress had power to enact
           them and thus they are valid federal law and they trump state law
   c. Hanna’s Two Tracks
        i. Track One: Is there a federal law/statute/constitutional provision that
           conflicts with/governs the state issue? Federal law trumps state law
       ii. Track Two- the “unguided Erie” analysis- Apply Outcome
           Determination with a clear eye on twin aims of Erie:
           1. Discourage forum shopping
           2. Equittable administration of laws
           --Now ask outcome determination ex-ante in order to look for the
           type of questions that would encourage forum shopping
5. FEDERAL RULE BROAD ENOUGH? Ex: Stewart Organization, Inc. v.
    Ricoh Corp: Forum selection clause in contract btw companies is in
    dispute. Can a fed court in diversity apply a state or fed law in adjudicating
    a motion to transfer a case to a venue provided in a contractual forum
    selection clause?
   a. When is the federal rule sufficiently broad to cover the issue?

        i. Question of interpretation of the rule and of statutes
   b. Hanna track 1- Does 1404 preempt/cover/conflict with Alabama law?
        i. On its face, says nothing about forum selection clauses. State law
           issue: enforceability of forum selection clauses. How does this factor
           into a 1404 analysis?
       ii. 1404 says we make decisions to transfer based on convenience of
           parties and interest of justice. Federal provision which provides
           trigger for motion under federal law, any state law that would impugn
           on this trigger is preempted. Statute is sufficiently broad to cover the
      iii. Not a case where federal and state laws can exist side by side.
   c. Scalia’s dissent: thinks the application of the federal law is overly broad.
       Thinks there is no conflict with 1404 which addressed present and future
       convenience; forum selection clauses are retrospective. They don’t
        i. Says this is inconsistent with Erie’s twin aims test. Issue doesn’t fall
           under scope of 1404.
       ii. If Alabama voids the forum selection clause it should be given no
           weight because there is no problem with having the applicability of a
           federal statute depend on the content of state law.
6. LATEST WORD: Ex: Gasperini v. Center for Humanities: Gasperini,
    journalist, took over 5000 valuable pictures of Central America and before
    publishing them allowed Center for Humanities to borrow them. Center lost
    them and Gasperini was allowed to recover $450,000 in compensatory
    damages. Center claims this is excessive Case in Federal Court for diversity
   a. Holding: NY law controlling compensation awards for excessiveness or
       inadequacy can be given effect, but also use parts of Federal law-
       accommodate the two laws for the case
   b. Issue: the standard of review fed court uses to measure excessiveness of a
       jury’s verdict in an action for damages based on state law
   c. Reasoning: Prior to 1986 NY followed US in shock conscience standard
       for over turning jury award>> but in 1986 changed standard to “deviates
       materially”- Did so to allow for more appellate scrutiny of jury verdicts
       to ensure stability and fairness throughout NY St. Courts, NY standard
       tightens reigns on what is a reasonable award
   d. Majority sees this as a Track 2 case- State says the FRCP Rule 59
       speaks to grounds, not standard of review, while Dissent sees it as a
       Track 1 case
   e. Doctrine of Gasperini:
   --Last and Final Word of Erie Analysis- begin your analysis here!
   --Adopts the basic 2 track inquiry of Hannah
        i. Is Federal Law broad enough to cover the inquiry?
           1. Court here construes law very narrowly-Fed law must speak to
               issue and then must explicitly address the standard of how to
               review issue

    2. (is counter to Stewart, which says that even if fed law doesn’t
         speak to issue, if the app of state law would influence or bear on
         federal courts analysis even if not the result that fed court would
         reach, the state law is preempted)
    3. Use Gasperini narrow rule unless issue is a Stewart 1404 issue
    4. How do we explain the political flipflop from Stewart to
         Gasperini? If you construe Federal law narrowly, you get to track
         2 more often which involves a more express evaluations of the
         values at stake here
ii. If not, is Erie implicated? (is it going to be outcome determinative in
    view of the twin aims of Erie?)
    1. If Erie is not implicated, then apply federal law (look to dicta of
    2. If yes, go to unguided analysis of Erie
          i. Forum Shopping
         ii. Inequitable Administration of Law
        iii. Is there a counter-vailing and articulated state interest?
    a. If no, apply federal law
    b. If yes, then can you accommodate- blend the two laws
    c. If you can’t blend the two (its either for the judge or for the jury)
         then at the end there is a preference to Federal Standard

New York Times v. Sullivan
Procedural Posture:
1. Plaintiff Sullivan v. NYTIMES and 4 clergy men in Circuit Court of Montgomery County, AL
         Sullivan wanted to keep it out of federal court, so he added the 4 clergy men on the
                  o Federal Jurisdiction: federal questions and state diversity
                  o For law suit to be filed in federal court, there must be complete diversity of
2. Lawsuit Begins- plaintiff files the complaint and serves the complaint a summons
         Notice Pleading System- you make your claims, but do not have to give proof
                  o Why is this effective?
                          Lower burden
                          settlement vehicle
                          slower?
                          Harder to weed out frivolous suits (R11)
         Question of Jurisdiction
                                            Federal Court                  State Court
             Federal Law                    Yes                            Yes
             State Law                      Diversity +                    Yes
         Service:
                  o Personal Service through agent Don McKee (stringer for NYT)
                  o Sec of State- if they are doing business in that state sec of state becomes
                    representative for process of service, then sec of state mailed it to NYT
3. The Defendant’s First Response
         Demurrer (Answer) of Ralph D. Abernathy
         Motion to Quash Service of Process (NYTIMES)
                  o Challenging both service of process and personal jurisdiction
                  o Also, deny subject matter jurisdiction
                  o Judge’s Ruling: by adding subject matter jurisdiction, it was making a general
                    appearance and thus waived its ability to make a special appearance for
                    motion to quash so it is dismissed
4. Discovery Process (proving jurisdiction is accurate)
         Motion to Produce by Sullivan
         Depositions
                  o Ex: Dep of Claude Sitton
5. Appear Before Judge and each side presents evidence and legal arguments regarding motion
6. Two weeks later Court Issues Opinion
7. Motion to Dismiss (Demurrer) by NYTIMES (Rule 12b6 motion)
         if you assume the factual allegations in the claim are true, does it state a claim,
             challenge the legal sufficiency of the claim
8. The Answer
         judge refuses to dismiss and sends it on to trial
9. Pretrial Discovery on the Merits
         What is the scope of discovery?
                  o Anything that makes the claim more or less probable
         What rules apply to discovery?

               o Interrogatories to Defendant NYT
               o Answers of the NYT Company to the Plaintiff’s Interrogatories
10. Summary Judgment Motion: assuming all the facts revealed in discovery in the light most
favorable to the non moving party- it is steal legally insufficient
         Should this go to the jury?
11. Settlement?
12. Trial
         Sullivan had to prove that-
               o Ad was liberlous per se- no need to show punitary damages
               o Ad was about him (of or concerning)
               o Had to ask for a retraction
13. Judgment for Sullivan for $500,000
14. Rule 50 Motion- Everything revealed in trial, still not legally sufficient
15. Alabama Supreme Court- Affirmed all trial court rulings
16. US Supreme Court- reversed and remanded
         not sufficient to have truth
         st ct
         was not of or concerning plaintiff bc it never mentioned their name
         have to prove malice
17. Preclusion: not allowed to letigate again about virtually


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