Civ Pro II Outline

CIV PRO OUTLINE 2 SEMESTER Personal Jurisdiction Personal jurisdiction is about a ct‘s. ability to issue a decision that binds a particular individual and is a th th matter of due process under the 14 Amendment (5 Amendment in federal ct.) Jurisdictional Terms:  In personam: Jurisdiction over the individual; judgment ―travels with‖ the person  In rem: jurisdiction over the property; to adjudicate status of the property as against the world— property is used to trigger personal jurisdiction  Quasi in rem: jurisdiction created because of the presence of the property; recovery limited to the value of the property o adjudication of the rights of particular individuals in the property o or property simply used as the anchor and to satisfy judgment  Pennoyer v. Neff (Illustration of a question of state power)  State Ct. orders sale of property of a non-resident to satisfy a judgment.  Neff (P) brings a collateral attack on the original judgment. This is allowed b/c the original judgment was void for lack of jurisdiction.  This case is a quasi in rem case; however, the State must take action against property first to anchor jurisdictional claims against a non-resident who owns property in the state. Otherwise nothing triggers the jurisdiction. Principles of Public Law looked to in Pennoyer and other jurisdictional cases:  State Power o States possess exclusive jurisdiction and sovereignty over persons and property within their territory o No state can exercise direct jurisdiction and authority over persons or property without its territory (would be the same as a court in England claiming jurisdiction over a person in the U.S.) PJ under Pennoyer  Courts‘ jurisdiction initially a matter of statutory authorization o Why in federal court?  States‘ ability to authorize jurisdiction constitutionally limited (by the Constitution) o Under Pennoyer, a court can constitutionally exercise jurisdiction over a defendant when:  D physically present w/in state is personally served (in personam)  Court seizes property located w/in state (in rem or quasi in rem)  Must seize the property at the outset to confer jurisdiction; cannot adjudicate and then seize the land  Substituted service OK if property seized at the outset PJ vs. Service of Process: PJ refers to a tribunal‘s authority to adjudicate as to an individual or entity‘s rights or obligations, while service of process relates solely to the effectiveness of the way in which the individual or entity being subjected to the exercise of jurisdiction has been notified of the fact. *Traditionally, service of process on a D who is physically within the borders of a state is generally sufficient to confer personal jurisdiction over that defendant. *BUT, not if the D was only present in that state because she was lured there fraudulently Pennoyer Exceptions: Jurisdiction to determine (marital) status of residents towards non-residents nd Consent – can require individuals or companies to consent to jurisdiction as a condition of doing certain acts within the state. Based on the state‘s right to exclude/prevent the activities Post Pennoyer Exceptions:  Implied Consent (Hess v. Pawloski) – w/ respect to operation of motor vehicle in case relating to driving on the hwy.  Residence/Citizenship  Presence (sufficient business to confer jurisdiction w/o regard to claim)  Doing Business (for claims relating to the business contracts)  Regulated Industries (starting to look more like an analysis of state interests in the subject rather than power) Analysis under Pennoyer  Personal service on D physically within state?  Property located in the state?  Marital status?  Consent? o Present? Change in Direction with International Shoe v Washington PJ under Int’l Shoe***  ―If the D is not present in the forum, he must have ―certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice‖  Contacts must be such as make it reasonable … to require the corporation to defend the particular suit which is brought [in that state]. o Contacts were ―continuous and systematic‖ OR o Because of their nature and quality and the circumstances of their commission may be deemed to render the D liable to suit. The Result of Int’l Shoe  Jurisdiction depends on the relationship of the claim to the D‘s contacts with the state  The more closely related the claim is to the contacts, the fewer contacts are necessary for jurisdiction to comport with ―traditional notions of fair play and substantial justice‖  Jurisdiction over a D is highly contextual. o A state may have jurisdiction over a particular defendant for some claims and not others The Analysis Has Shifted:  Pennoyer was more focused on the power of the state vis-à-vis other states o Is he/it there?  In Int‘l Shoe, the Ct treats PJ as a question of Due Process (fairness to the defendant) not State Power o Is it fair? Challenges to Personal Jurisdiction  Collateral attack – challenge to the validity of a judgment rendered in another proceeding in a different court (Pennoyer) o Full Faith and Credit exception (Article IV) – invalid judgments for lack of jurisdiction  Applicable in federal court? – yes, consider fed cts. like another sovereign entity, like a state, so full faith and credit applies o Can be strategic; but risky  Direct attack – challenge to the jurisdiction of the court in the disputed proceeding o Waiver and limited appearances – before, you waived jurisdiction by just showing up  Now (state cts) you can usually make limited appearance just to challenge jurisdiction o Rule 12 for federal courts gets rid of this problem – motion to dismiss for lack of pj Analysis of PJ after Int’l Shoe  1. Is jurisdiction conferred by state (or federal) law (long-arm statute)? o state long-arm statutes also generally applied by federal courts sitting in those states (Rule 4(k); 4(n)) o Federal ct will act for jurisdictional purposes just like the state does unless there is a specific federal statute which states otherwise  2. Is the exercise of jurisdiction under the law conferring jurisdiction consistent with due process? Long-Arm Statutes  Jurisdiction conferring statutes passed by states (defining scope of personal jurisdiction) o Also applied by federal courts sitting in those states (See Rules 4(k) and 4(n))  Laundry list approach vs. limits of due process (Missouri vs. California) General vs Specific Jurisdiction  General – Jurisdiction in connection with a claim unrelated to the D‘s in-forum conduct o Continuous and systematic contacts = general jurisdiction (for any claim)  Specific – jurisdiction in connection with a claim that arose out of D‘s relationship (contacts) with the forum state o Isolated or limited contacts, but the claim arises out of or closely relates to that contact = specific jurisdiction (McGee) Does an OR ct. have jurisdiction over… - an OR resident on vacation in CO? - A CA resident who hits a pedestrian while traveling in Oregon but then leaves the state before being served? - A WY corporation making sales in Oregon? o Does D have certain minimum contacts? o Does D have continuous and systematic contact or an isolated or minimum contact? (the answer determines the limits of the states jurisdiction over the person) Hanson v. Denckla - mother set up a trust in Delaware and named a Delaware Bank as trustee - Mother moved to Florida, where she received trust income and correspoended with the trustee about trust business - Exercised power of appointment in Florida - Battle btwn beneficiaries under the trust and beneficiaries under the will over validity of the trust - Actions in FL and DE reach conflicting results and neither gave full faith and credit to the other (state doesn‘t have to give full faith and credit to a ct that does not have personal jurisdiction over a person) - Trustee did not have the right kind of contacts with FL – did not purposefully avail itself of the privilege of conducting activities with in the forum state, invoking the benefits and protections of its laws. - In Mcgee the TX insurance co. renewed its policy while P was in CA. The ct. was able to view this as the company‘s purposefully availing itself to the privileges of conducting business in the state. - Territoriality: ―Restrictions on PJ are more than a guarantee of immunity from inconvenient or distant litigation, they are a consequence of territorial limitations on the power of the respective state. - Which of the purposes of PJ is furthered by the ―purposeful availment‖ test? (sovereignty of the states) – both? World-Wide Volkswagon v. Woodson (Classic Stream of Commerce Case – where D doesn‘t have direct contact with a state) Audi (Man.) VW of America  WW Volkswagon Corp.  Seaway  Robinson - The Argument made is that just b/c it is foreseeable that a product may be taken somewhere does not necessarily satisfy the minimum contacts Territoriality: ―We have never accepted the proposition are irrelevant for jurisdictional purposes …pg 70 Foreseeability: The foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum state. Rather it is that the defendant‘s conduct and connection with the forum state are such that he should reasonable anticipate being haled into ct. there o The forum state does no exceed its powers…if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum state Purposeful Availment (from Hansen)  A defendant‘s contact with a forum state must not be random or attenuated but rather the result of having purposefully availed herself of the privilege of conducting activities within the forum state, invoking the benefits and protection of its laws.  Relationship to general and specific jurisdiction?  Purposeful availment refers to quality of contact (cannot be random or attenuated activities) vs. quantity of contact in specific or general jurisdiction (no-brainer for general, b/c continuous and systematic contacts are not accidental). Foreseeability and Stream of Commerce:  Should the car dealer have foreseen than the car it sold to the Robinsons might end up in a distant state? o The foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum state. Rather, it is that the D‘s conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there. o The forum state does not exceed its powers…if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum state. Fair Play and Substantial Justice  ―Implicit in this emphasis on reasonableness is the understanding that the burden on the defendant, while always a primary concern, will in an appropriate case be considered in light of other relevant factors, including… 1. Forum state‘s interest in adjudicating the dispute 2. P‘s interest in obtaining convenient and effective relief (at least when not adequately protected by power to choose the forum 3. The interstate judicial system‘s interest in obtaining the most efficient resolution of controversies 4. The shared interest of the several states in furthering fundamental social policies What is an appropriate case? – any case in federal court Minimum contacts is a sliding scale based on which way the fair play factors cut Burger King v. Rudzewicz  What is the Court‘s view of the federalism dimension of PJ? o Doesn‘t really exist; PJ about due process and D‘s rights  Foreseeability requires purposeful availment o A D has purposefully availed himself of the benefits and protections of the forum if he ―deliberately engaged in significant activities within a state‖ or created ―continuing obligations between himself and residents of the forum‖ o No purposeful availment where contacts are ―random,‖ ―fortuitous,‖ or ―attenuated,‖ or the result of ―unilateral activity‖ of another  ―Once it has been decided that the defendant purposefully established minimum contact with in the forum state, these contacts may be considered in light of other factors to determine whether the assertion of personal jurisdiction would comport with ‗fair play and substantial justice.‘‖ o ―These considerations sometimes serve to establish the reasonableness of jurisdiction upon a lesser showing of minimum contacts than would otherwise be required.‖ o A D who has purposefully directed activities at the forum state must make a compelling case that jurisdiction is unreasonable Territoriality Here to Stay…or Not? o We have never accepted the proposition that state lines are irrelevant for jurisdictional purposes, nor could we, and remain faithful to the principles of interstate federalism embodied in the Constitution  The reasonableness of asserting jurisdiction over the … o Even if the D would suffer minimal or no inconvenience, the due process clause, as an instrument of federalism, may sometimes act to divest a court of jurisdiction.  But in Burger King Portable Torts  What if Seaway had delivered the car to Mrs. Robinson in OK and the same accident occurred?  It would be a different case b/c Seaway could have chosen not to deliver it to the State. Not quite a stream of commerce slam dunk (if the car was actually sold in OK), but it is a bit stronger.  What if Mrs. Robinson was a resident of Connecticut and comes to NY to buy the car. The NY dealer has sold other cars to Conn. residents. Is there jurisdiction in CN if the accident occurs there?  Depends on if Seaway knows they have Conn. residents buying their cars. Is Seaway marketing in Conn.? Local customer service # in that state? Agreement with dealer in Conn.? Stream of commerce – contacts between D and forum are all indirect; they run through another entity, like manufacturer sells to distributor, who then sells to state Asahi v. Metal Industry v. Superior Ct. of California (Stream of Commerce case: There is no direct contact to the forum state; therefore, there must be other parties to connect the party to the forum state). Opinions:  8 justices agree that CA cts cannot exercise jurisdiction b/c it would not comport with ―fair play and substantial justice‖ o What about Scalia? – too vague a standard, doesn‘t thing it enters into PJ  Ct is divided on the question of purposeful availment  The O’Connor 4 think it requires more than stream of commerce and knowledge  The placement of a product into the stream of commerce, without more, is not an act of the defendant purposefully directed toward the forum state. Additional conduct of the defendant may indicate an intent or purpose to serve the [particular] market…‖  Additional factors:  Designing the product for the market in the forum state  Advertising in the forum state  Establishing channels for providing regular advice to customers in the forum state  Marketing the product through a distributor who has agreed to serve as the sales agent in the forum state, or for that particular forum or its subset (like only the west coast)  The Brennan 4 think that stream of commerce + knowledge is sufficient.  ―As long as the participant in this process is aware that the final product is being marketed in the forum state, the possibility of a lawsuit there cannot come as a surprise. Nor will the litigation present a burden for which there is not corresponding benefit. (not concerned with a particular shipment of goods, just the knowledge that it‘s being marketed/sold there)  This is more consistent with the view of stream of commerce expressed in WWVW:  ―the forum state does not exceed its powers… if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum state.‖  Stevens on his own – says here purposeful availment doesn‘t come into play, so why analyze it.  Goes on to say basically if he had to decide here, he‘d side with Brennan **On an exam question be sure to deal with both O’Connor’s view and Brennan’s view *shouldn‘t matter if it‘s a component or a finished product, the analyses don‘t really care about this distinction Fair Play Factors in Asahi  the unique burdens of defending in a foreign legal system  Interests of plaintiff are minimal as are interests of CA since P is not a resident  All that remains is a claim for indemnification asserted by a Taiwanese corp. against a Japanese corp. – CA court using Taiwanese law  Location of the witnesses and evidence? Japan or Taiwan – about indemnification rather than accident and product liability Go through questions w/ answers on page 68 CB Review Question (see slide) Retailer—appears to be similar to WWVW local dealers, so probably no pj National Distributor—more info would help. Do they have outlets in OK? Service in OK? If yes, then its contact could be described as ―systematic and continuous‖ and therefore it would be subject to general jurisdiction and it wouldn‘t matter if the claim arose out of the specific instance Manufacturer—looks like Asahi: go through both the Brennan and O‘Connor analysis Calder v. Jones (McKenna thinks bad decision) – no minimum contacts, no purposeful availment The Effects Test:  Defendants intended to and did cause tortuous injury to the plaintiff in the forum state. The fact that the actions causing the effect took place outside of the forum state did not negate jurisdiction over a cause of action arising out of those effects  CA was the focal point of the story and the harm suffered; that was the state where Enquirer had largest circulation  Intentional, and allegedly tortious, actions were expressly aimed at California  Is Keeton a similar case? No b/c the P sues the publisher and this is a pretty easy case of general jurisdiction.  The effects test really only fits with a few limited cases—it doesn‘t quite fit in the general PJ narrative. ***This Court assumes intentionally tortious conduct before there is ever a case. ***Puts the cart before the horse. Personal Jurisdiction in Relationship to Property Schaffer v. Heitner – displaces Pennoyer in regard to property  H (P) sues Greyhound directors under a shareholder‘s derivative suit for alleged mismanagement through an anti-trust actions and liability. Suit was brought in Del. b/c Greyhound was incorporated in Del., but HQ in AZ. Most of the 28 officers live in AZ.  Delaware‘s long-arm statute did not specifically provide for personal jurisdiction over the officers or directors merely by virtue of their position.  P used Del. statute to sequester stock held by Ds. Delaware law stated that the situs (location) of the stock was in Delaware, regardless of location of stock certificate.  D challenged the sequestration because no ability to make a general appearance. (general appearance vs. special appearance—D only shows up to fight the jurisdiction not the merits of the case) Rule: Mere fact that property is located in a state is no longer itself sufficient to make the exercise of jurisdiction constitutional. In rem cases governed by the same minimum contacts/fairness test as in personam cases (The International Shoe test). Reasoning: If the reasoning behind International Shoe is that people should be able to structure their behavior to foresee where they may be haled into court, litigating status of property necessarily involves litigating parties’ interests in property (not indirect—rejecting Pennoyer).  In rem cases are governed by the same minimum contacts / fairness test as in personam cases  Location of property is not irrelevant. o Property located in a state is important contact, and generally sufficient where claim related to the property (assumes person put/knows property is there)  Particularly real property. o Claims unrelated to property require analysis of nature and amount of contacts (the defendant, the state, and the litigation)  The nature of the property must be considered. o If the property is mobile – a plane, car, etc. – then if the car winds up in another state (stolen, borrowed) then there is a good argument that the owner hasn‘t purposely availed himself of the state.  The decision is tricky, b/c Greyhound doesn‘t require directors to own stock, and Delaware doesn‘t have statute that says if director of Delaware corporation, then subject to jurisdiction. NOTES: - Are the labels still relevant? Not really. It will really only matter if there is no other alternative forum, because the judgment is limited by the value of the property. - If mere presence of property not necessarily sufficient… Problem: Jobs v. Gates  Q1: assuming plane is ―substantial property‖ it passes the long arm statute, but doesn‘t pass the Constitutional test. o Can‘t exercise jurisdiction solely b/c of property there (Schaffer) o Still need minimum contacts (property can count) o Very valuable piece of property sitting in the state – but it‘s the only contact  Looks like purposeful availment o But, claim is copyright infringement, so doesn‘t arise out of the contact o So, no PJx  Q2: if claim was he failed to pay Jobs for the plane? o PJ is valid, b/c property in state and claim about property in state  Q3: if plane were stolen from Gates and taken to Va.? o No, b/c didn‘t purposefully avail. The Power of Tradition - Jurisdiction over non-residents physically present in the state is among most firmly established traditions. - Not one case held or even suggested that in-state personal service was insufficient - Such a practice is continuing, as it is the practice of every state to allow for jurisdiction by personal service - Traditional notions of fair play and substantial justice standard was adopted by analogy to physical presence. Burnahm v. Superior Court of CA – upholds service w/in state as always establishing PJ Facts: NJ man visited his children in CA and his separated wife served him with divorce papers while he was there requiring him to litigate the divorce in CA  Rule: Personal service on a defendant physically located within the forum state is sufficient for exercise of jurisdiction to be considered constitutional o Still must be authorized by state long-arm statute). o Claim need not relate to presence in the state o Application to corporations or other legal entities? Reasoning: ―To determine whether the assertion of personal jurisdiction is consistent with due process, we have long relied on the principles traditionally followed by American courts in marking out the territorial limits of each state‘s authority.‖ (Scalia) – about tradition only Concurrences:  Other justices reject the notion that tradition necessarily makes a rule consistent with due process, but they believe this rule sis still okay. Why? o They think law has to analyze dynamically, in connection with contemporary notions of due process o Long standing tradition gives defendants notice, and traveling in a state means availing oneself of benefits of the state o Fact that D had traveled there suggested burden might not be significant. This reasoning is CIRCULAR; no real substantive claim other than the fact that D should expect to be sued because the tradition is enough to give notice b/c it has been going on for such a long time. NOTES: Distinguishing Shaffer:  Ct. says that Shaffer does not compel a different holding because Shaffer used fairness for out of state defendants. The case was merely about treating Ds the same regardless of the Latin lave attached to the case  Scalia thinks that evaluating the continuing propriety of tradition-based methods would allow measurement of jurisdiction against ―each Justice‘s subjective assessment of what is fair and just.‖ Not enough of a bright-line rule for Scalia. Burnham – A return to Territoriality?  To determine whether the assertion of personal jurisdiction is consistent with due process, we have long relied on the principles traditionally followed by American courts in marking out the territorial limits of each state‘s authority. o ―the line of reasoning that will never go away‖ Burnham in Application: - What about an airplane passenger whose plane is forced down at O‘Hare and is served while waiting for a new flight. o You could try to make an argument that the passenger did not purposely and by choice choose to enter the state. o However, it is not clear because the language in Burnham doesn‘t seem to be sensitive on the issue of purposeful entry into the state. o This is a trade off btwn rules and standards. Rules are bright-line; standards require more questions. o Service of officer of corporation in state not necessarily enough to get jurisdiction, b/c the corporation is not the person (need minimum contacts) Active vs. Passive Websites under Zippo  Zippo created a sliding scale framework for consideration of jurisdiction relating to the Internet  Passive web sites, those where information simply is posted as if on a billboard, do not support jurisdiction  Fully interactive web sites—selling merchandise—is sufficient to create jurisdiction everywhere (from which there was interaction) Toys R Us v. Step Two Rule: mere operation of commercially interactive web site is not enough (rejects a bare ―passive vs. interactive‖ test)  Must be evidence that D ―purposely availed‖ itself of conducting activity in the forum state by directly targeting its web site to the state, knowingly interacting with residents of the forum state via its web site, or through sufficient other related contacts. o Although not stream of commerce problem, sounds more like O‘Connor than Brennan in regard to Asahi – not just general knowledge/possibility, but specific interaction on a knowing basis with the forum Notes: What does this say about the effects test? ESAB Group, Inc. v. Centricut, Inc.  6 state law claims and 1 RICO claim  RICO authorizes service of process ―in any judicial district in which such person resides, is found, has an agent, or transacts his affairs o Allows for nationwide service of process th  RICO is Fed Law, so implicates due process under 5 Amendment o Doesn‘t requires contacts w/ particular state, just the U.S. as a whole o The only exception is if extremely unfair, substantial injustice  So, court uses doctrine of pendent jurisdiction for personal jurisdiction o From a common nucleus of operative fact  Therefore, all 6 state law claims can be adjudicated as well, even though if they were alone without the RICO claim, they would not satisfy personal jurisdiction SPECIAL BASES OF JURISDICTION 1. Consent – Hess v. Pawloski; (response to Shaffer – law passed saying Directors of corporations give consent to jurisdiction in DE) 2. Waiver – general appearance Rule 12(h)(1) 3. Forum Selection Clauses a. Generally enforceable even if non-negotiated as long as they are consistent with ―fundamental fairness‖ (no fraud/overreaching) b. No analysis of relative bargaining power c. This is federal rule – state courts might analyze contractual provision differently 4. Necessity – possibly where no other forum exists (Helicopteros?) 5. Nationwide contacts – only where provided specifically by federal statute (see 28 U.S.C. 2361) 6. Rule 4(k) Rule 4(k) – personal jurisdiction  Rule 4(k)(2) provides that, so long as it is consistent with the Constitution, federal courts have personal jurisdiction with respect to claims based on federal law over defendants who are not subject to the jurisdiction of the courts of general jurisdiction of any state  If the claim is in federal court AND based on federal law AND defendant not subject to jurisdiction in any state…no need to apply state long-arm statute th o Simply analyze whether jurisdiction is consistent with Due Process (note, however, that 5 Amendment due process clause applies here)  PJ Sample Essay Question Facts: Computer manufacturer in KS sells its computers to Infinity a national computer distributor, who sells to retailers around the country. One of the KS computers winds up in VA and crashes. P Sues Infinity and KS (D) Process Analysis: 1. Long Arms Statute Analysis: Look at VA long-arm statute to see if to see what personal jurisdiction is allowed. ―First see if jurisdiction is conferred by the state‘s long-arm statute. In this case, the statute confers jurisdiction…‖ 2. Constitutional Analysis: (always ask yourself what is the easiest way to achieve constitutionality) Personal service on a D in state (Burnham); the effects test when D intentionally directs the tortious conduct at the state knowing the effect is going to be felt in that state (Calder) neither of the above apply. Start with International Shoe and minimum contacts test: ―See above‖; a. look to the number of contact and their relation to the claim [general jurisdiction (systematic and continuous) vs. specific (few contacts)]. In order to find systematic and continuous is not very relevant because the claim is relevant to the specific contact. b. Next analyze whether the contact was the result of purposeful availment. Look to Asahi. Infinity doesn‘t challenge jurisdiction because they have direct contact to VA. (Use the language of the cases ―availment of the benefits of the state, etc.‖ i. O‘Connor‘s Test: Placement of the product in the stream of commerce even w/ knowledge that it might wind up in the forum state is not enough. You must have knowledge plus some other actions 1. Under this analysis we see that there is no evidence that Pineapple has done nothing to market to VA ii. Brennan‘s Test: As long as you know that the product will be sold or marketed in the state then that is good enough to satisfy purposeful availment‖ 1. Here, we probably have enough b/c of the knowledge of the c. Fairness Analysis (For Brennan‘s Test): Burger King; consider fair play factors (these factors only come into play in a close case or where minimum contacts is established) i. Burden on Defendant ii. Forum States Interests in adjudicating the dispute: Protect their citizens from people selling bad products in the state iii. Shared interests in several states: w/o PJ then there won‘t be a remedy iv. Burden on the plaintiff to litigate somewhere else. v. Location of Witnesses and Evidence Note: Watch out for Consent and Directed Agent: Pineapple would have to have said ―you must sell in VA‖. DUE PROCESS  Sufficiency of service issue, like jurisdiction, is two-fold: 1. Is the method of service authorized/required by state law or Fedral Rules? 2. Is that method ―reasonably calculated to lead to effective notice?‖ (Mullane) Service for federal cases governed by FRCP 4. o Federal Rules incorporate service rules of forum state and state where service takes place – (like if service by mail ok by state law, then ok) o An action is commenced in Federal ct. once you file your complaint. o Service of Process requires a summons and a copy of the complaint.  Summons contains what is required by Rule 4(a) o Service must be completed w/in 120 days or case is dismissed – 4(m) o Rule 4(c) dictates who may serve the defendant (non-party, 18 or older). o Personal Service for Individuals w/in the US – 4(e) – governs  personal service  delivery to dwelling house or usual place of abode (a person of suitable age who lives there)  o delivery to agent authorized to receive service (must be expressly authorized, can‘t just assume lawyer or someone else is authorized) Those served are governed by Rule 4(f):  Internationally agreed means (Hague Convention)  if there is no internationally agreed means or the applicable international agreement allows other means of service (Hague allows):  Law prescribed by foreign country  As directed in response to letter rogatory or letter of request o Somebody appointed by country to respond to give instructions on appropriate service  Personal service/mail with signed receipt, provided such service not contrary to local law  Other means not prohibited by international agreement as may be directed by the ct. (all the other methods you just go out and do, but this one the ct can direct → like email)  Service for Corporations is governed by rule 4(h): Corp. must authorize an agent to receive service.  In a judicial district of the US  Pursuant to law of state (see (e)(1))  Delivering a copy to officer, managing or general agent or any other agent authorized by appointment or by law to receive service [interpreted very broadly, like giving to receptionist at headquarters] (may also require mailing if agent authorized by law and statute so requires)  If in a place not w/in a judicial district of the US, in any way allowed by 4(f) except personal delivery o o - A sued B in Indianapolis. B not there so leaves with housekeeper. IN state law requires personal service of process. Is service sufficient?  Since IN state law requires personal service, need to look to Rule 4 to see.  Must ask if housekeeper is of suitable age and discretion (18 for most states) and if she lives there?  If yes to both, then service valid. If not, then invalid. o P sued D in Fed Ct in StL. Serves D by delivering a copy of the summons and complaint to one of D‘s retail stores in StL. Assuming the Missouri statute exists, is this service sufficient? (looked to Missouri statute on overhead).  Is this a franchise owned and operated independently or is it run by the corporation?  If run by the corporation, probably a business office and sufficient under state law.  If no good under state law, then need to use Rule 4.  Officer, managing or general agent or any other agent authorized by appointment or by law to receive service  Would have to say that this is a managing or general agent under the rule  If not part of the corporate structure, then prob. not sufficient service Fed. Rule is the minimum guarantee; State laws can go further but cannot restrict the federal rules. Waiver – Rule 4(d): o Allows the D to waive the formal service process o Federal Rules don‘t allow mail as effective service o D has 30 days from which the waiver is sent to respond to the waiver response. - Mullane v. Central Hanover Bank & Trust Co.  Central runs a collective trust and dispersing the funds back to individual trusts  Dispersed and gave notice by publication in local paper according to state law  Notice must be ―reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections‖ (doesn‘t say it actually has to reach them) o Must reasonably convey the required information o Must afford a reasonable time for those interested to make an appearance o Means employed must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it. o Either reasonably certain to inform those affected, or …not substantially less likely to bring home notice than other of the feasible and customary substitutes. Notice Issues  Notice reasonably certain to reach most of the interested in objecting is likely safeguard the interests of all, since any objection sustained would inure to the benefit of all  Notice insufficient in this case, not b/c in fact it fails to reach everyone, but b/c under the circumstances it is not reasonably calculated to reach those who could easily be informed by other means Notice by publication  Publication – compare Pennoyer o Where supplemental to other action which in itself may reasonably be expected to convey a warning o Where not reasonably possible or practicable to give more adequate warning o Where beneficiaries interests are conjectural or future or, although they could be discovered upon investigation, do not in due course of business come to knowledge of the common trustee (like when named beneficiaries are ―all of my children now and in the future‖) o ―Publication may theoretically be available for all the world to see, but it is too much in our day to suppose that each or any individual beneficiary does or could examine all that is published to see if something may be tucked away in it that affects his property interests‖ SUBJECT MATTER JURISDICTION  Personal jurisdiction is about a ct‘s ability to issue a decision that binds a particular individual and is a th th matter of due process under the 5 and 14 Amendments to the Constitution. (largely but not entirely a geographic concept) o About adjudication vis-à-vis this particular defendant o Relevant to both federal and state courts Subject Matter jurisdiction relates to limited power of Fed Cts. Fed Cts are empowered to decide only certain kinds of disputes o About whether this particular type of dispute belongs in Fed Ct as opposed to state court, or at least can be heard in Fed Ct rather than state court Differences b/t Fed and state court o Jury pool o General feeling among most lawyers that Fed Cts are better b/c judges more sophisticated Art. III, §2 of U.S. Constitution enumerates limited jurisdiction of Fed Cts (we‘ll focus on 2) o ―arising under‖ jurisdiction  III, §2  28 U.S.C. 1331 – ―The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States‖ o Diversity jurisdiction – ―between Citizens of different States‖ Article III vs. 1331 o Constitutional provision consistently interpreted more broadly than statutory provision o Important to find out if Ct is looking to Constitution or statute as source of ―arising under‖ o If looking to statute, Congress can change statute, but can‘t change the Constitution     Mottley  ―Well-Pleaded Complaint‖ Rule o A suit arises under the Constitution and laws of the US only when the P’s statement of his own cause of action shows that it is based upon those laws or that constitution. It is not enough that the P alleges some anticipated defense to his cause of action and asserts that the defense is invalidated by some provision of the Constitution of the US.  Bracken v. Matgouranis  Ps claim defamation by D Matgouranis‘s attorney during deposition o Second cause of action seeking accounting and imposition of constructive trust on assets of the D  Ps, in Complaint, anticipated D of absolute privilege under PA law, and so Ps asserted that the exercise of such privilege would violate their first amendment rights under U.S. Const.  Based on this argument, Ds had cases removed to Fed Ct  Ps asserted lack of Fed jurisdiction, and moved to remand cases to state court  DCt denied motion; D then moved to dismiss; DCt granted motion to dismiss  ACt ruled → DCt erred in assuming jurisdiction, and reversed  ―Well-pleaded complaint‖ rule cited here. o Sure, it was on the face of the complaint, but only in anticipation of the defense Franchise Tax Board  ―Congress has given the lower federal courts jurisdiction to hear … only those cases in which a well-pleaded complaint establishes either that 1. federal law creates the cause of action or 2. that the P’s right to relief necessarily depends on resolution of a substantial question of federal law.‖  This says that arising under is a product of §1331 rather than III, §2  Created by federal law – expressly or impliedly (Cort v. Ash) o Whether the P is a member of the protected class o Whether there is evidence of congressional intention to create a remedy either explicitly or impliedly o Whether implying a remedy would be in accord with the underlying objectives of he statutory scheme o Whether the cause of action is traditionally relegated to state law so that implication of federal remedy would infringe on an area that is ordinarily left to State regulation o (Don‘t need to know all the particular things the Ct has held as implied cause of action) Substantial Federal Question  Jurisdiction exists in cases where P’s right to relief necessarily depends on resolution of a substantial question of federal law o Not any case where P‘s claim might implicate a federal question  Compare City of Chicago v. Int’l College of Surgeons and Merrell Dow o City of Chgo claim seeking review of state admin. agency determination  But the substance of the claim was Constitutional – equal protection & due process? Case necessarily depends on it o Merrell – OH negligence claim, D removed to Fed Ct  In most instances, a case arises under federal law if federal law creates the claim. Thus, the significance of the nonexistence of a private cause of action under the Food, Drug and Cosmetic Act ―could not be overstated‖  A complaint alleging a violation of a federal statute as an element of a state cause of action when Congress has determined that there should be no private federal cause of action for the violation does not state a claim ―arising under…‖  So here, the P can show negligence w/o the Fed statute at all → could use it, but case doesn’t necessarily depend on it.  Gable & Sons v. Darue Engineering o o o o What additional limits are there on jurisdiction if the case depends on resolution of a ―substantial and contested federal question?‖ What is the source of any such additional limit – the statute or the Constitution? What is the significance of Congress‘ decision not to create a cause of action to quiet title? – not dispositive, but very persuasive Here, as opposed to Merrell Dow, this won‘t greatly upset the number of Federal cases, so even though no cause of action created by Congress, still have subject matter jurisdiction More importantly, P‘s right to relief necessarily depends on resolution of a substantial question of Fed Law Artful Pleading:  Where a P pleads only a state law claim, but federal law preempts corresponding state law in the area covered by that claim, the state law will be viewed as an ―essentially federal law claim  Prevents disingenuous pleading where the articulated claims is really one of federal law but simply not called by its proper name. New Orleans v. Joe  The City of NO sues a local landowner claiming that the landowner refused to abide by an agreement to sell his property to the city for 5K and that this sale price was not so unconscionably law as to th constitute a taking w/o just compensation in violation of the 14 amendment. o The cause of action is a breach of contract, a state common law claim. th o The federal issue would only come up if the D brings up 14 Amendment violation o This resolution of this case does not depend on the interpretation of a federal issue. (if you can find another way to resolve P‘s case by not dealing w/ a federal question then it does not necessarily arise under federal law)  The landowner brings an action against the city of NO under the federal Declaratory Judgment Act seeking a declaration that the city had violated the terms of the agreement by starting to bulldoze the land prior to receiving a deed of sale from the land owner. o For a declaratory judgment, look at it in the way it would normally come into court if the declaratory judgment had not been sought  Look at it in regard to what the case will actually be about o Apply Skelly Oil rule and disregard the declaratory judgment claim and then see if the action deal with a federal issue. Here, the only remaining claim would be a breach of contract under state common law. Therefore, no jurisdiction. Declaratory Judgments and ―Arising Under‖ Jurisdiction o Skelly Oil rule = if, but for the availability of the declaratory judgment procedure, the federal claim would arise only as a defense to a state created action, jurisdiction is lacking o Same when a state declaratory judgment claim filed → look to the substance of the case and what the now D (who would have been the P) would have claimed DIVERSITY JURSIDCTION Sources of Diversity Jurisdiction  Article III, Sec. 2—claims ―between a State and Citizens of another state; between citizens of different states…. And between a state or the citizens thereof, and foreign state, Citizens or Subjects.  28 U.S.C 1332 (in back of rule book) o Amount in controversy exceeds 75k o Citizens of different states o Citizens of a state and citizens or subjects of a foreign state.  Why diversity jurisdiction? o Hard to answer → not really home field advantage b/c can be brought in D‘s state o Fed Gov only one with power over both parties o … Citizenship and Diversity    A person cannot be a citizen of a state unless also a citizen of the United States o Place of citizenship for natural persons is place where she ―resides,‖ but ―resides‖ means place of domicile  Mere residence in the State is not sufficient o Domicile is place of true, fixed, and permanent home and principal establishment, and to which he has the intention of returning whenever he is absent from there. o Maintain domicile until taking up a new domicile, which only happens when (1) take up physical residence in new place with (2) intention to remain there (in college, your hometown is usually your domicile) Examples: o U.S. citizen with domicile outside a State (or territory), then NO Diversity. o U.S. citizen domiciled in a State (or territory) → Diversity OK o Non-U.S. citizen not domiciled in a State → alienage provision → Diversity OK o Non-U.S. citizen w/ domicile in a State → treated as a citizen → Diversity OK Measure diversity at the time of filing, or if removed also at time of removal. Coury v. Prot Rules: - a person cannot be a citizen of a state unless also a citizen of the US. o Citizenship for natural persons means domicile; mere residence in the state is not sufficient o Domicile is place of true, fixed and permanent home and principal establishment and to which he has the intention of returning whenever he is absent from there. o Maintain domicile until taking up a new domicile, which only happens when 1) take up physical residence in a new place 2) with intention to remain there. o Measure diversity at the time the action is filed (and, in cases removed from state court, at the time of removal). Corporate Citizenship  Under 1332, a corporation is a citizen of any state by which it has been incorporated and of the State where it has its principal place of business. o ―Bulk-of-the-activity‖ approach (a.k.a. ―Principal place of business‖ test) – looks at where most of the operations/production activity lies (manufacturing facilities, etc.) o ―Nerve Center‖ approach – looks at place from which corporate decisions are made (e.g. headquarters) – used when bulk of activity is spread over several states o Modern/Mixed approach – looks at totality of corporate activity and tends to rely identify place of most activities unless one such place cannot be identified  Unincorporated entities are not considered separate legal entities like corporations under 1332 – they are citizens of any state in which their members are citizens o Unions, partnerships, associations, etc. Pg 170 question 3(a): 1332 treats foreign citizens who reside and plan to permanently reside in a state in the US will be deemed to be domiciled in that state. Diversity Between Citizens of Different States  Complete Diversity: no party can be a citizen of the same state as any adverse party.  ―That is, where the interest is joint each of the persons concerned in that interest must be competent to sue, or liable to be sued, in those courts‖ (Strawbridge Test is a statutory restriction) Diversity Hypos  Ann (IN), sues Bob (IL), Carrie (KY), and David (IN). → so, no diversity jurisdiction over the case (but P could re-file and leave the IN defendant out)  Joe (CA) sues Matt (NV) and Sam (NV) → Diversity Jurisdiction is good  Joe (CA) sues Matt (NV) and Acme, Inc. (DE corp., HQ in NV, production WA and TX) o → two production facilities, so bulk of activity tough to figure, may pick NV o → unless 80% of production is in WA, then WA probably. Note: Subject matter jurisdiction is always analyzed claim by claim. Look at each claim individually. Parties Improperly or Collusively Made  Cannot maintain jurisdiction where diversity created because ―parties improperly or collusively made or joined to invoke the jurisdiction of the court.‖ 28 U.S.C. 1359  Parties must have a real interest in the litigation and not be assigned claims or added as parties simply to create diversity.  The assignor cannot retain rights in the claim if the assignee is to sue in Fed Ct under Diversity Jurisdiction → can‘t work the system and create jurisdiction where it shouldn‘t exist  Cts also use it and say you can‘t destroy Diversity Jurisdiction this way either Amount in Controversy  Amount in controversy is determined by the amount claimed by P in good faith.  Jurisdiction only defeated if it is shown ―to a legal certainty‖ that the P was no able to recover the threshold amount  When money is not claimed, look at the ―value of the object‖ o Sometimes cts will look to the burden on D if P prevails (where P‘s right has small value, but value/impact to D would be significant, like at times when P seeks injunction) Aggregation of Claims:  each plaintiff must meet the amount in controversy requirement o but see Class Action Fairness Act  Individual plaintiff may aggregate value of legitimate, discrete claims, but may not duplicate claims → a bunch of different legal claims based on the same transaction or occurrence  See problems on pp. 181 SUPPLEMENTAL JURISDICTION - 1367 Pendent/Ancillary Jurisdiction United Mine Workers of America v. Gibbs  Pendant jurisdiction, in the sense of judicial power, exists whenever there is a claim arising under…and the relationship between that claim and the state claim permits the conclusion that the entire action before the court comprises but one constitutional ―case‖  The federal claim must have substance sufficient to confer subject matter jurisdiction…the state and federal claims must derive from a common nucleus of operative fact  There must be some base claim which already has independent subject matter jurisdiction to which the state claim can cling.  Declining Jurisdiction: o Needless decision of state law should be avoided both as a matter of comity and to promote justice between the parties, by procuring for them a surer-footed reading of applicable law o If federal claims are dismissed before trial, state claims should be dismissed as well o If state issues substantially predominate, whether in terms of proof, of the scope of the issues raise, or of the comprehensiveness of the remedy sought, the state claims may be dismissed without prejudice and left for resolution to state courts. Statutory Supplemental Jurisdiction - 28 U.S.C. 1367 permits the court to exercise jurisdiction over all claims part of the same case or controversy o Intended to go to the maximum extent of Article III - Limitations on use of supplemental jurisdiction by diversity of plaintiff o 1367(b) prohibits diversity plaintiffs from adding claims against parties brought into the case if the added claim would have destroyed diversity had it been brought by plaintiff originally - Court may decline jurisdiction in some circumstances (see 1367 (c)) compare to Gibbs - 1367(b) plaintiff doesn‘t get to use supplemental jurisdiction against 3 parties brought in under Rules 14, 19, 20, 24 when it would be inconsistent with diversity. Imagine that P would have sued such parties originally and then see if they meet the diversity requirements. Only limits the use of supplemental jurisdiction by the plaintiff. rd o The 3 party may assert a claim against the Plaintiff and if there is a compulsory rd counterclaim, P can‘t assert it because he is barred by 1367(b) to bring a claim against a 3 party where he doesn‘t meet 1332 requirements. rd Multi-Party Problems Prior to 1367 - In Aldinger, P brought a federal question (arising under) claim against several defendants and a state law claim against non-diverse defendant. o 1367 states that as long as the anchor claim against is not diversity, 1367(b) doesn‘t limit the use of supplemental jurisdiction - In Finley, P tried to append a non-diverse state law claim against one defendant to a federal claim against the US o Under 1367, the result is the same as above. rd - In Owen, P brought a diversity claim against a D. The D filed a claim against a 3 party and the rd P then attempted to append a claim against the 3 party o The Ct. says that you can‘t do this; this idea is codified in 1367(b)  Adding Plaintiff – 19 (necessary party), 24 (intervening party)  Adding Defendant – 14, 19, 20, 24  Rules 20 and 23 are not mentioned - 1367 and Class Plaintiffs o P1 (1K) P2( 1k) etc…sue D. Supplemental Jurisdiction? NO b/c there is no anchor claim to supplement. o P1(75001K) P2($100) etc…sue D. Supplemental Jurisdiction? NO see Zahn o Zahn held that each P in a diversity class action had to meet the jurisdictional amount in controversy requirement and the P could not avoid that rule by using pendant jurisdiction o Might 1367 allow for supplemental jurisdiction over the claims of the additional plaintiffs who could not meet requirements of 1332? Russ v. State Farm o Textual response is that 1367(a) seems to broadly permit court to exercise supplemental jurisdiction over claims that are closely related, except the case articulated in 1367(b). Diversity class actions are not expressly excluded (doesn‘t mention Rule 23) o Legislative history suggests that Congress did not intend to overrule Zahn and allow for jurisdiction in diversity class actions Exxon Mobil Corp. v. Allapattah Services, Inc.  Gas dealers sue Exxon in class action diversity suit; 9 y/o girl sues Star-Kist Tuna  One case Rule 23 class action, and other case joining Ps under Rule 20  At least one satisfies $75K+ in both cases, but other Ps don‘t  Ct holds → If Ps flunk just b/c of amount in controversy, then no big deal anymore o Ok under both Rule 23 and Rule 20  Ct holds → But under Rule 20 if they flunk b/c there is not complete diversity, that fails  How does Exxon Mobil affect the holding in Zahn?  How does 1367 affect the holding in Zahn? o How does it differ in its view of the ―cause of action‖? o Is there a difference between a failure of complete diversity and a failure of some claims to meet the amount in controversy requirement?  What does 1367 say with respect to additional Ps added under Rule 20?  Next two bullets more rhetorical now, because of the Exxon decision o Prior to the decision in Allapatah, Congress enacted The Class Action Fairness Act. How did 1332(d) change the rule in Zahn? For what cases? o Class Actions under FRCP 23 where total amount in controversy exceeds $5 million and there is simple diversity  Simple diversity → ok as long as 1 P and 1 D are from different state  Ok for Congress to do, b/c 1332 us statutory, so C has the power to decide What does the addition of 1332(d) suggest about Congress‘s view of whether 1367 overruled Zahn?  What does CAFA imply about Congress‘ view about how to treat situations where a P asserts a diversity claim against a D and then seeks to add a non-diverse P under Rule 20 (permissive joinder)?   Russ v. State Farm - Textual response is the 1367(a) seems to broadly permit court to exercise supplemental jurisdiction over claims that are closely related, except the case articulated in 1367(b). Diversity class actions are not expressly excluded (doesn‘t mention Rule 23) - Legislative history suggests that congress 28 U.S.C. 1332 - How does 1332(d) change the rule in Zahn? For what cases? - Class Actions under FRCP 23 where total amount in controversy exceeds 5 million and there is simple diversity (at least 1 P has to be diverse from at least 1 D) This changes the Zahn rule completely for this specific type of class action. THIS IS A SIMILAR SPLIT AS BRINGING CLAIMS AGAINST AN ADDED DEFENDANT. - In light of this development, how should we treat situation s where a plaintiff asserts a diversity claim against a defendant and then seeks to add a non-divers plaintiff under Rule 20 (permissive joinder)? Supplemental HYPO see slides 1. there is a fed law claim and a state law claim. There is no diversity in this case (both are from CA), so can we use supplemental jurisdiction to bring the state law claim to federal court? Yes, b/c both of the claim are basically about the same set of circumstances it may fall under 1367. a. You must have anchor claim that has its own independent federal jurisdiction 2. There is a state law claim from a citizen of MO against a Citizen of IL. P seeks damages of 100K. D files a counterclaim (permissive counterclaim) over a prior contract for damages of 50K. Does the court have jurisdiction over the counterclaim? B/c it is a permissive counterclaim it does not arise out of the same transaction or occurrence and thus it will need to independently meet the jurisdictional requirements. It does not (needs to be 75K). A compulsory counterclaim does arise out of the same transaction or occurrence and therefore supplemental jurisdiction can be used 3. Anne (NY) asserts a federal civil rights claim and a state law tort claim against a ―because the state claim seems to arise out of the same occurrence as the federal claim, the federal ct. could exercise supplemental jurisdiction, but it may wish to decline because this type of case deals with a novel legal issue the State court may want to rule on.‖ 4. Bell (CT) sues Hartford (CT) … ―Here the parties are non-diverse, and it sees as if the federal claim is not significantly related to the state-law breach of contract claim. So it appears that supplemental jurisdiction would not work. Supp Jr. Question (TWEN) Answer: S (CT) is suing B (IL, DE) on a state-law claim. So in order to get jurisdiction S would have to get in under diversity and under diversity she would need damages for over 75K. B brings in a claim against (D). B‘s claim against D would fit under diversity if the amount in question is enough, but also definitely under supplemental jurisdiction. S could not establish jurisdiction because of 1367(b). Prohibits diversity plaintiffs from adding claims against parties brought into the case REMOVAL 28 U.S.C. § 1441  The basic rule is that D can remove a case from state court to fed court if the case originally could have been filed in federal court o Case must have been part of district court‘s original jurisdiction if it had been filed in federal court o Remove to district court for the district and division embracing the place where the state action is pending  In state D in a diversity case cannot remove under § 1441(b) (the theory is that D will not be prejudiced in his own state) – if there is any D from the foreign state, Ds can‘t remove Removal Hypos: see slide and handout in CB Procedure for Removal – §1446  D. files a notice of removal in fed dist ct. within 30 days of receipt (through service or otherwise) of a copy of the initial pleading or summons.  In cases not originally removable, D may file notice of removal within 30 days after receiving pleading, motion or other paper from which it can be ascertained that the case has become removable  Case may not be removed based on diversity more than 1 year after commencement— absolute bar. Caterpillar v. Lewis Precedural Facts: L(ky) LMG (ma) Cat(de,il) & W(ky) Timing of Notice of Removal  D files a notice of removal in fed dist ct. within 30 days of receipt (through service or otherwise) of a copy of the initial pleading or summons.  This is to allow for various state requirements on when a case begins → not meant to substitute  Receipt of the complaint prior to formal service won’t start the clock  Plaintiff files complaint and faxes a courtesy copy to the defendant but does not serve as settlement negotiations proceed for 14 days, after which the defendant is formally served. If the D removes 30 days after formal service (44 days after receiving the faxed courtesy copy of the complaint), is that timely under 1446(b)?  No good, doesn’t count as service so the clock doesn’t start Removal Timing Issues  An OH P brings a 250K tort claim against his next-door neighbor. The day after the defendant is served, he moves to Michigan and then seeks to remove the case. o Prevailing case law holds that, for removal purposes, diversity must exist BOTH at the time the complaint is filed and that the time the removal notice is filed.  NJ P files an 80K tort claim against a NY D in NJ state court. After the D removes the case the P amends her complaint to seek only 70K in damages and then moves to remand o All that matters here is that there was diversity at the time of filing and at the time of removal. Removablility is gauged by the pleadings and at the time of filing of both complaint and notice of removal, and not thereafter. o But, if there was real mistake in the pleading, Ct may allow  NC P files a state law claim for 300K in MD state court against a SC def. and a NC D two months later, the P voluntarily dismisses the claim against the NC defendant. Can the D remove? o Here the pleadings have changed, so you would treat the amended as a new filing, so at the time of filing there is complete diversity. (This is an example of when a case is not removable becomes removable)  NM P files 60K breach of K claim in NM state court against an AZ corp. The D files a counterclaim alleging defamation and seeking 1 mil in damage, and the plaintiff seeks to remove the case. o Defendant only gets to remove; a Plaintiff responding to a counter claim is not a defendant. So he cannot remove. Removal HYPOS - A compliant filed by a Nevada citizen alleging the the D also a Nevada citizen, was part of a price fixing scheme in violation of Nevada Fair Trade Laws and that the application of this state statute to the D‘s pricing policies does not deprive the D of it s property without due process of law in th violation of the 14 Amendment o There is a constitutional issue but it only arises out of an anticipated defense, and therefore the district court would not find removal improper. - Same as above except that the D bases removal not on the presence of a federal constitutional question, but on the assertion thtaqt since price-fixing is prohibited byt the federal antitrust laws, the P ‗s failure to assert this claim cannto operate to deprive the federal cour arising under jurisdiction o This is similar to the artful pleading problem A MA tenant files an action for a wrongful eviction against her PA landlord in MA state court the P seeks reinstatement of the lease plus $15K in damages. o To establish jurisdiction the ct must determine the value the reinstatement of the lease and add 15K to see if it adds up to more than 75K. - A breach of Contract claim for 100K filed in a NJ state court by a NY plaintifrf against a NJ defendant o And in state D cannot remove when the claim is filed in his home state o This rule only applies to cases which try to remove based on diversity - A breach of K claim for 100K which is base on a fed statute filed in NJ state court by a NY plaintiff against a NJ defendant o Here b/c federal jurisdiction is ―arising under‖ the above rule of non-removal doesn‘t apply. Removal and Multiple Defendants  A TN citizen is injured in a car accident in StL when a truck driven by a Mo citizen and owned by another MO citizen rams his car. The P files suit in a TN state court seeking 400K in damages against each D. The driver, but not the car owner preferred to have the case heard in federal court and so he alone filed a timely notice of removal. Plaintiff wants the case heard in state court. What can he dot to accomplish this result? o Language of 1446(a) and the language of 1441(a) providing that any civil action within the federal district courts original jurisdiction may be removed by the defendant or defendants has been interpreted to mean that all defendants must join in a notice of removal of an action removed pursuant to 1441(a) o Failure to join all defendants is deemed a procedural defect and renders the case subject to remand (must be filed w/in 30 days). 1447 Remand  P wishing to contest removal may file in the federal district court a motion to remand the case to state court form which it was removed  Motion to remand the case ―on the basis of any defect other than a lack of subject matter jurisdiction‖ must be made within 30 days of notice of removal o Procedural defects, like failure to  Case shall be remanded at any time it appears the court lacks subject matter jurisdiction  Order remanding a case to the State court from which it was removed is not generally reviewable – but denying remand is reviewable, but not a final order, so must wait until end of case Removal Under 1441(c)  Whenever a separate and independent claim or cause of action within the jurisdiction conferred by section 1331 (arising under) of this title is joined with one or more otherwise non-removable claims or causes of action the entire case may be removed and the district court may determine all issues therein, or in its discretion, may remand all matters in which the state law predominates. Fullin v. Martin  1441(c) contradicts Article III, must have common nucleus of operative fact, so exceeds constitutional limits.  The federal claims and the state law claims do not arise out of the common nucleus of facts. ERISA claim was based on mismanagement of the funds. The state law claims were based on the misuse of company credit cards.  History of 1441(c) o The right to remove ―separable controversies‖ under predecessors to 1441(c) was wholly limited between citizens of different states.  1441(c) adopts the exact opposite of the ―common nucleus of operative facts‖: A federal claim cannot be both separate and independent for purposes of 1441(c) and arise from a common nucleus of operative fact for purposes of supplemental jurisdiction.  Interpreting 1441(c): Separate cause of action is narrower than separable cause of action. A suit covering multiple parties or issues…  Purpose of 1441(c): Because supplemental state law claims arising out of the same nucleus of operative facts, such that they form part of the same constitutional case or controversy are already removable under 1441(a) pursuant to the district courts supplemental jurisdiction under 1367(a), 1441(c) serves no other purpose than to allow removal of wholly separate and distinct state law claims, which but for the pleading of a separate and independent federal claim would not be ones over which a federal district court could assert jurisdiction. o Here the statute is trumping a constitutional limitation → the separate claim by definition arises out of a different case or controversy o goes against Gibbs’ common nucleus of operative fact as well o Ct holds 1441(c) unconstitutional insofar as it allows removal of state law claims which, under Gibbs, fall outside the federal question jurisdiction of the Fed Cts Constitutional viability of 1441(c)?  The Fullin ct believed that there might be some narrow constitutional application of the statute: o Separate and independent claim is a federal one and state claim is a diversity claim but one defendant is in state such that no removal is allowed by the statute (in-state defendant) o Where there is only minimal diversity vis-à-vis the separate state law claim because only minimal diversity is required by the Constitution o Unrelated non-removable claim is within original jurisdiction but falls within statutory bars on removal (1445) – like one claim arising under, and a separate diversity claim that doesn‘t meet amount in controversy  These all have in common that a statute impedes removal, rather than the constitution.  1441(c) can trump statute. For 1441(c) questions, ask: Could the case have been filed in Fed Ct originally?  If no, then ask why not? o If the problem would have been statutory (e.g. complete diversity, amt. in controversy, 1441(b)) then can trump it o If the problem would have been Constitutional (not deriving from common nucleus), then 1441(c) is invalid GrupoDataflux vs. Caterpillar  What is different factually? In Cat. a party altogether went out of the case; in Grupo the parties stayed the same only one changed its citizenship.  After Grupo Dataflux and Caterpillar, how stable is the time of filing/time of removal rule? o District courts must evaluate diversity at the time of filing and (if applicable) the time of removal o o Where there is no change of party, later developments that create or destroy diversity are irrelevant, even if there is diversity at the time of judgment (Grupo Dataflux) Where there was a change of parties and there was diversity at the time of the judgment, the interests of finality may counsel against overturning a judgment even though jurisdiction was improper at the time of filing/removal (Caterpillar) VENUE  Venue deals with allocation of cases among districts and among division of federal system  Governed by Fed statute (28 U.S.C. 1391, 1392, 1404, 1406); NOT constitutional provisions o Some definitional provisions of 1391 carry over  Venue objections can be waived  Venue objections 12(h) o When challenged, the burden of showing that venue is proper is on the one who seeks to avail itself of that venue o Venue must be proper with respect to all parties and all claims  Generally (absent relevance of special venue provisions) can look at case as a whole General Venue Provisions  1391(a) governs actions in which ―jurisdiction is founded only on diversity‖ o 1391(a)(3) only provides venue where there is no other place where venue is proper (counts for people who have contacts but are not in the state)  1391(b) governs action in which jurisdiction is not founded solely on diversity o 1391(b)(3) provides that venue is proper in a place where a person may be found. (must be actually found present in the district).  1391(c) defines residence for corporations o Residence for purposes of venue is not the same as citizenship for purposes of diversity. o This can be found nearly anywhere, b/c corporations are subject to personal jurisdiction anywhere.  1391 applies unless one of the special venue provisions (1397, 1400, 1401, and 1402) is applicable  PKWare v. Meade o Multiple diversity claims + arising under claims, some falling under §1400 o Ends up with odd result, w/ 90% of the claims litigated in WI with one claim with all the same evidence litigated in OH → wouldn‘t pendent jurisdiction make sense? o The burdens/inconveniences are split between both forums, so the P having filed in WI does the most work in determining venue  Paul v. Sam and Jack from power point o P (MA) v. S (NJ), J (OH); diversity case → accident happened in Vermont o Massachussetts?  are both Ds subj to PJx there?  Jack → analyze pj  Sam → analyze pj  Let‘s assume yes for both here  Then look at venue → 1391(a) b/c diversity jurisdiction  (a)(1) → district where any D resides if all reside in the same state o No; All do not reside in the same state  (a)(2) → substantial part of events/omissions giving rise to the claim occurred in MA? o If bike wasn‘t sent to MA, and just P living there, probably not  (a)(3) → Is venue proper anywhere else? o New Jersey?  No, long arm statute doesn‘t reach Jack o Vermont?  No, long arm statute doesn‘t reach Jack o Ohio?  (a)(1) – they are individuals, and don‘t all reside in OH (a)(2) – substantial part of events giving rise to claim?  Better chance here → bike sent there by S, supplied and purchased there → yes, probably substantial  If not, then look to (a)(3) o (a)(3) would then allow anywhere a D is subj. to PJx, but would need to have PJx over the other, or would have to sue them separately. Problems on p. 238 a. Joe Houston, Jane E.D. La., Paul M.D. La. i. 1391(a)(1), can sue in E.D. La. b. Can also sue in M.D.La. b/c both Ds reside in same state c. No, b/c not proper in TX under (a)(1) and (a)(2), and they provide a venue in La., so can‘t use (a)(3) d. Roy (NY), D1(CA), D2(Mich.), action took place in Cancun; diversity claim i. Can‘t file under (a)(1) or (a)(2) in NY, CA, or Mich. 1. (a)(1) → Ds don‘t reside in same state 2. (a)(2) → no other place than Cancun that events took place ii. (a)(3) → PJx in CA for one D, and Mich. for other D 1. if can get PJx for both Ds in one of these 2 states, then great, otherwise need to sue separately e. Q here is Carnival Cruise lines subj. to PJx in Michigan? If so, can sue under (a)(3). f. Jane (MA) Fed claim against Bill (SC) and Carnival Cruise Lines (MA) i. Jane trying to sue in MA ii. 1391(b) 1. don‘t reside in same state – Bill not residing in MA 2. took place in Cancun 3. venue proper somewhere else? Not SC, b/c Carnival not subject to jurisdiction there a. check if Bill subject to PJx in MA, since Carnival is 4. otherwise, need to sue Bill in SC and Carnival in MA g. doesn‘t change anything from f → not all diversity → 1 fed and 1 diversity j. If the case starts out in state court and gets removed to Fed Ct, does the State venue provision or the Fed venue provision apply? a. USE THE FEDERAL VENUE PROVISION   Transfer of Venue  When you seek to transfer venue, you‘re not saying that venue is not proper, but that there is a better venue  28 USC 1404 allows a court to transfer an action to any other district or division where it might have been brought. o A district where the claim could have originally been brought by the P o Defendant‘s later willingness to submit to adjudication elsewhere is not sufficient (b/c at time of filing it couldn‘t have been brought there)  Decision based on convenience of the parties and witnesses and interests of justice o Plaintiff‘s choice of forum o Situs of operative events o Location of evidence/ ability to bear costs o Availability of compulsory process, etc. (100 mi subpoena rule)  No effect on choice of law (to avoid gaming → transferring venue to get a different set of choice of law rules) 1404 vs. 1406  1404 allows the transfer for the convenience of the parties. It is for cases where venue is technically proper, but inconvenient  General venue rules are blunt instrument to achieve convenience or allocate cases where there is some connection to the claims. 1406 allows for dismissal where venue is improper – Rule 12(b)(3). o p. 242 – 3(c)  Venue would not have been proper in ID at time of filing, but after MA D dropped out, can you reassess for venue? Yes, b/c pleading is amended and that becomes time of filing o So could have been brought in ID, and could transfer there o But, probably WOULD NOT be able to transfer to ID b/c of the private/public interest factors I wanted to follow up with everyone on a couple of questions I received after class: 1. Venue and Removal First, with respect to problem 1(j) on pp 238-39. As I said in class, the fact that the state venue statute provides for venue on the basis of plaintiff's residence is irrelevant. While that statute would be relevant to a state court, venue is a procedural issue that is governed by federal law. Thus, federal venue law always governs venue in federal courts. This much was clear in class. But, as I should have pointed out more clearly, that does not mean that §1391 is the governing provision. This case was removed to federal court and was not initially filed there. The removal statute, §1441, contains its own special venue provision. It provides that removed cases can be removed only to the district court for the district in which the state court is located. Thus, the fact that none of the three subsections of §1391(a) would be satisfied in this case does not deprive the federal court in Denver from having venue over the action. 2. Corporate Residence Second, with respect to some of the hypotheticals (like 1(c) and (e)), there is one detail that I should have emphasized more in class. I don't think it changes the conclusions we came to in any of them, but wanted to point them out. 1391(c) defines residence in terms of where a corporation is subject to personal jurisdiction. But it does so, for purpose of figuring out what district to file in, on the basis of DISTRICTS. Sometimes they're the same thing - Massachusetts , for example, is one district. But sometimes they are not - Texas has several districts. If you're trying to figure out in which DISTRICT a corporate defendant resides (possibly because you've determined that all defendants reside in the same state and have to figure out what district to file in - knowing it has to be one of the districts where a defendant resides), subsection (c) requires you to imagine each district as a separate state. So say individual defendant A resides in Los Angeles and corporate defendant B is subject to jurisdiction in California and therefore resides there. You don't want to file in LA, but somewhere else in California . You have to figure out what district(s) the corporate defendant resides in to know what your options are. It resides in any district where (if the district were its own state) it would be subject to jurisdiction. If there is no such district, but there is jurisdiction because of contacts with the state as a whole, pick the district with the most contacts. 3. The Fallback Provisions Finally, the difference between 1391(a)(3) and (b)(3). As we've seen, the provisions of §1391(a)(1) and (2) are identical to the provisions of §1391(b)(1) and (2). Therefore, unless there is some difference between (a)(3) and (b)(3) there would seem to be no reason to have separate venue provisions for diversity and federal question cases. Section 1391(a)(3) refers to districts in which any defendant is "subject to personal jurisdiction," whereas (b)(3) refers to districts in which any defendant "may be found." There has been a lot of commentary on this language, and there‘s no consensus on difference. One view, ably demonstrated in the Wright and Miller treatise section attached, is that there is no substantive difference. ―Where a defendant may be found‖ means the same thing as ―where a defendant is subject to personal jurisdiction.‖ Another view is that it doesn‘t make sense to have 2 differently worded provisions that mean the same thing. Those people conclude that the "may be found" terminology refers to districts in which the defendant can be personally served, i.e., be subject to "tag" jurisdiction rather than being subject to jurisdiction pursuant to a long arm statute. So, for example, under this reading in problem (f) on 238, Bill would be subject to jurisdiction in Massachusetts under the long-arm statute only if his work there during the summers constituted "minimum contacts." If it did, he'd be a defendant subject to jurisdiction under (a)(3). But he still might not be "found" there, if he isn't in Massachusetts at the time and able to be served there. This is what I meant when I said that, in this example, under (a)(3) personal jurisdiction and venue are conflated, but they are not under (b)(3). This distinction sort of falls apart once we get to corporations though. Since corporations aren‘t corporeal and therefore are not subject to tag jurisdiction, the only way this provision could make sense for them is if a state has some enactment governing out-of-state corporations doing business there that requires those corporations to appoint a local agent for service of process. Forum Non-conveniens – ―inconvenient forum‖  Common law doctrine allows a court discretion to dismiss an action even when personal jurisdiction exists and venue is proper, so that the action can be brought in amore appropriate forum.  Court weighs factors including the availability of proof, compulsory process (ability to compel participation) jury view of the premises, practical problems of expeditious trial, public interest consideration and plaintiff‘s choice of forum  At the federal level, operates predominantly when the other available forum is in another country  The fact that law in other available district would be less favorable is not dispositive (presupposes the availability of another forum) o If the remedy provided by the alternative forum is so clearly inadequate or unsatisfactory that is no remedy at all the unfavorable change in law may be given substantial weight. o Contrast effect on substantive law for dismissal under forum non-conveniens and transfer of venue under 1406.  PiperAircraft Company v. Reyno o Forum Non-conveniens is relevant here b/c personal jurisdiction and venue would probably be proper. JOINDER Claim Joinder By plaintiff – governed by rule 18  P may join any and all claims she has against the D; must be real party in interest  Joinder is only one restriction – fed. ct. still needs SMJ over each of those claims By the Defendant – governed by Rule 13 – counterclaims and crossclaims  Counterclaim – Any claim the pleader has against any opposing party  Compulsory vs. Permissive counterclaims o Compulsory: if it arises out of the transaction or occurrence that is the subject of the opposing party‘s claim and does not require the presence of parties of whom the court cannot acquired jurisdiction.  A claim is barred if it was compulsory and was not brought as such  Can be brought under supplemental jurisdiction (mirrors supplemental jurisdiction) o Permissive: for any other claim against an opposing party that does not arise out of the same transaction or occurrence  Must have its own jurisdictional basis  Logical relation test      Common nucleus of operative facts. They more overlap in relevant facts and evidence there is likely to be, the more likely it will be a compulsory counterclaim Significant similarity b/t test for compulsory counterclaim and that for supplemental jurisdiction Iglesias v. Mutual Live Ins. Co. o Goes through compulsory counterclaim test  Are the issues of fact and law raised by the claim and counterclaim largely the same?  Would res judicata bar a subsequent suit on defendant‘s claim absent the compulsory counterclaim rule?  Will substantially the same evidence support or refute plaintiff‘s claim as well as defendant‘s counterclaim?  Is there any logical relation between the claim and the counterclaim?  Test for logical relation? vague o Since permissive, ends up being no supplemental Jx Cross Claims – 13(g) o Claim by one party against another co-party (only against parties already in the case) o Allowed if the cross-claim arises out of the transaction or occurrence that is the subject of either the original action or a counterclaim, or relating to any property that is subject of original action  What does that suggest about SMJ? o Cross-claims are permissive, not compulsory  Except when a cross-claim is also a counterclaim against a party on the same side who has asserted a cross-claim against it (then it is compulsory) Real Party in Interest?  Rule 17  Ct in Naghiu holds he was an employee and not a bailee, and dismissed his claim  P gets a chance to add the real party as a plaintiff or to agree that he is asserting the claim on real party‘s behalf and then be bound by it? Permissive (Party) Joinder – Rule 20  All persons may join as plaintiffs in one action if they assert any right to relief jointly, severally or arising out of the same transaction, occurrence or series of transactions or occurrences AND if any question of law or fact is common to all plaintiffs (Rule 20(a)) o Same concept for joinder of defendants o Post-filing joinder permissible (as a matter of joinder rules) even if it will destroy diversity as long as party doesn‘t seek joinder solely to destroy diversity  But still need to pass SMJx calculation  P or D need not be interested in obtaining or defending against all the relief demanded (some Ps can just want the injunction and not the $$ at stake)  Bringing a claim jointly and severally means multiple plaintiffs assert a claim essentially together, and seek one payment of damages, which they will allocate among themselves Misjoinder – Rule 21  Parties are misjoined when the preconditions of permissive joinder under Rule 20(a) are not met. – this only happens in the initial pleading, when the ct hasn‘t reviewed it yet.  Court can drop or add parties to cure misjoinder problems or can sever a claim (Rule 21) o Severance is technically the separation of different claims into different suits (into different causes of action); contrast to separate trials under Rule 42(b) o Contrast separate trials under Rule 42(b)  For a single claim, either separating liability and damages phases or separating trials of single claim against multiple defendants)  Or could have on P and multiple claims, and try the claims separately  Or could have Ps properly joined, but try the claims separately  Court also can consolidate under Rule 42(a) o When actions involving common questions of law or fact are pending before the ct, it may order a joint hearing or trial [contrast separate trials] or may order the actions consolidated [contrast severance] o Need not be identical claims or parties Puricelli v. CNA Insurance Company  Ps Puricelli and Hughes sue CNA on ADEA, NY State Human Rights Law, and state tort intentional infliction of emotional distress claims  D moved Ct to sever the claims under Rule 20(a) and 21 – claims misjoined b/c they neither rise out of same transaction/occurrence nor present common Qs of law or fact. o In alternative, moves for separate trials under Rule 42(b)  Puricelli chose demotion over possible firing – 3 rating – meets expectations – then left for another ins. Co.  Hughes ―demoted‖ as well, but received 4 rating – unsatisfactory – then retired and went to another ins. Co.  Different facts, but identical claims, and Ps argue same campaign of age discrimination, etc.  Misjoined? → apply the Permissive Joinder test from 20(a) o Same transaction/occurrence? – yes, b/c ―logically related‖ → age discrimination, similar reasons for reviews and leaving CAN → same series of transactions or occurrences o + A Common Q of Law or Fact? (not all q’s of law/fact in common, any q of law/fact common to all parties) – yes, b/c same claims, allege similar discriminatory actions, and both implicate Romer  Separate Trials under 42(b)? – Will a joint trial cause prejudice to D and lead to jury confusion? o Exact same claims; shouldn‘t confuse jury; clear jury instruction can alleviate any confusion → motion for separate trials denied  Motion under 20(a) and 21, and alternatively under 42(b), is denied. Ps can proceed jointly. Impleader (Third Party Practice) – Rule 14  Defending party may implead a person not a party to the action who is or may be liable to the thirdparty plaintiff for all or part of the original plaintiff‘s claim against the defendant—DERIVATIVE LIABILITY RULE o Meaning, if the original claim goes away, the third party claim goes away o Not a claim that stands on its own - Can assert any defenses D would have against P‘s original claim - Third party D may assert claims against original P or D that arise out of same T/O as original claim o Claims by existing Ps (or those added as Ps in some cases) against party added under Rule 14 is subject to 1367(b) scrutiny if original claim is diversity Allstate Insurance Co. v. Hugh Cole Builder, Inc.  Allstate, subrogee of Russell Davis (insured – house fire), sues HCB rd  HCB asserts 3 party claims against Jenkins (brick layers who built fire box for fireplace) and Coston (plumbers who did the gas work for the fireplace)  HCB did not assert a right to contribution or indemnification in their pleading → expressly said not an indemnity suit → said same transaction/occurrence → this is not enough o Contribution would be saying → you guys are each 1/3 responsible for the exact claim against me, so you need to be impleaded o But here, the third party claims are b/t HCB and the two subcontractors, but not involving Allstate → about HCB‘s K o Really just a bad job of pleading  This is not really a joint and several liability claim, so Rule 14 doesn‘t work  Same transaction/occurrence not enough for impleader → must be derivative of the original P‘s claim, where if the D lost, could sue 3d party D for his loss  Therefore, HCB‘s third party claims are separate and independent and are dismissed Kroger v. Owen  Wrongful death suit → negligence diversity claim against OPPD, who impleaded Owen  OPPD granted SJ, and Kroger v Owen went to trial, but found out on day 3 of trial Owen was not diverse  Ct went ahead and heard it despite lack of diversity → Ct of Apps held ancillary Jx  SCt held no jurisdiction b/c no complete diversity → violates 1332(a)  Codified in 1367(b) not, P can‘t bring claim against D impleaded under Rule 14 Compulsory Joinder — Rule 19  Paradigm Example: if there are joint owners with undivided interests to property and I sue one of them that the other‘s interest in relief is impaired if the other is not allowed to participate  Person subject to service and whose joinder will not destroy subject matter jurisdiction shall be joined if: 1. (People in the case) – In the person‘s absence, complete relief cannot be accorded among those already parties to the case; OR 2. (People outside the case) – The person claims an interest relating to the subject matter of the case and is so situated that disposition without the person may  as a practical matter, impair that person‘s ability to protect that interest or  leave existing parties subject to substantial risk of multiple or inconsistent obligations by reason of the claimed interest  If they are necessary parties under 19(a) and it is feasible to join them (smjx, pjx, and venue), Ct will order P to join them or dismiss the case  What if a necessary party under 19(a) cannot be joined? → look to 19(b) o If person cannot be joined the court must determine if in equity and good conscience case can proceed or should be dismissed, the absent person being thus regarded as indispensable.  Prejudice to the person not joined or to existing parties if judgment rendered in absence of the indispensable party  Extent to which court can lessen prejudice by shaping relief (structuring injunction differently or allowing them to join voluntarily)  Adequacy of judgment in party‘s absence  Whether plaintiff will have adequate remedy if action dismissed for nonjoinder Temple v. Synthes Corp. – Rule 19  P had back surgery and screws came loose in his back → sued manufacturer of the plate, but not the surgeon o Synthes filed motion to dismiss for failure to join necessary parties → Rule 19 o Surgeon not even a necessary party under Rule 19(a), so don‘t need 19(b) o Rule 19 is about inconsistent obligations rather than potentially inconsistent results  Like two different judgments telling someone to do conflicting things o Not necessary for all joint tortfeasors to be name d as Ds in a single lawsuit Helzberg’s Diamond Shops, Inc. v. Valley West Des Moines Shopping Center, Inc.  Helzberg entered into a lease with Valley which limited the number of jewelry stores to which Valley would lease.  Helzberg sues Valley, but not Lords. Ct. is persuaded that Lords has an interest in the litigation and therefore should be involved in the suit and that their interests would not be adequately protected by Valley‘s interest in the action. Also, if the court enjoins Valley to keep Lord‘s out, but Valley has a contract to allow Lord‘s in so Valley would be exposed to multiple and inconsistent obligations. (Rule 19(a) ok)  However, Lord‘s was not subject to personal jurisdiction in Missouri. So the court must either determine that the case can proceed or that the case should be dismissed (Rule 19(b))   H. can get complete relief w/o the 3 party being joined; Prejudice to Lord‘s is real, but the court gives it notice that the case will continue and Lord‘s has the ability to waive personal jurisdiction and enter the case; Ct. was not persuaded by the multiple obligations argument because Valley created their own potential inconsistent obligations and they may avoid it by having to pay damages for breach of contract to Lord‘s → the inconsistent obligation would not be created by Lords participating in the lawsuit → even if they were in, it would be the same rd Intervention – Rule 24  Intervention of Right – Person has a right to intervene if statute confers unconditional right to intervene OR if he claims a legally protectable interest in the case that may be impaired and is not adequately represented by any existing party o Application must be ―timely‖ (reasonably) o Interest must be ―direct, substantial, and legally protectable‖  Permissive Intervention: Party may intervene (discretionary with the court) if a statute confers conditional right to intervene OR if the claim or defense presented by that person has a question of law or fact in common with existing claim o Whether intervention will delay or prejudice existing parties o Whether intervener‘s interests are adequately represented o Whether they will contribute to full development of facts  Just because someone will be affected by a decision does not meant that they have a legally protectable interest. The case must be about the interest. Coalition of Arizona/New Mexico Counties for Stable Economic Growth v. Department of the Interior  Silver seeks to intervene in the case o Why is his interest legally protectable? The statute allows for it (citizen standing) o Gets to intervene as a matter of right, but ct thinks would have been a good case for discretionary intervention anyway  But discretionary intervention is reviewed for abuse of discretion (high standard) as opposed to as of right reviewed de novo (no deference).  Silver‘s role will not be one that he has a claim nor is anyone asserting a claim against him, his role would be to help the government try the case so as to protect his interest. See Note 8 on pg 579 - Supplemental Jurisdiction has a role to play in all joinder Rules. And the Dr. would not be allowed to intervene because he would destroy Intervention Problem:  Herr would try to intervene pursuant to Rule 24; she may join him by rule 20 which require the ―same series of transactions or occurrence‖ which is tenuous at best. She would join him under Rule 20 if she wanted him in.  As a matter of right? o Herr and Washington have similar interests but he does not have a real interest in outcome with respect to Washington‘s property. He really only has an interest in the outcome of the suit (not enough to give him a ―right to intervene‖). o Even if legally protectable interest, he is probably already adequately represented  Discretionary? o He could ask the court for permissive intervention. He could argue that he has a similar claim that presents questions of law and fact that are very similar and that the intervention will not delay or prejudice the parties. Interpleader – Rule 22 and U.S.C. § 1335  With unique piece of property it‘s easy; with money must be a fixed sum → insurance policy with a cap, a boxing purse, or a lottery pot… Rule 22  Persons having claims against the (interpleader) plaintiff may be joined as defendants when plaintiff is or may be subject to double or multiple liability.  Does not supersede statutory interpleader 35 U.S.C. § 1335  Filed by person having in his custody or possession money or property worth $500 or more, or providing for payment of such amount  Two or more adverse claimants of divers citizenship are claiming or may claim  Plaintiff deposited the money/property with the court Differences between Rule 22 and Statutory Interpleader  §1335 requires only $500 in controversy; minimal diversity between two of the claimants; provides for nationwide service of process; venue proper in any district in which one or more of the claimants resides (when appropriate, very easy)  Rule 22 requires ordinary (complete) diversity o Complete diversity b/t plaintiff and defendants (claimants) o More than 75K in controversy Interpleader hypo:  Jan and Fred, both MO residents, were injured when their car was rear-ended by David. David was insured by AllStar Insurance, an IL company whose clients are IL. Jan sued AllStar to claim compensation under David‘s insurance policy, which had a policy limit of 100K. AllStar wants to resolve any obligations in one action. Can It o Analysis under Statute: No → the claim meets the amount in controversy, but the case doesn‘t have minimal diversity among the claimants (both from MO) o Analysis under the Rule: Yes → the claim meets the amount in controversy, and satisfies the complete diversity requirement between the plaintiff and the defendants. New Jersey Sports Productions, Inc v. Don King Productions, Inc. Facts:  Boxing promoter sings an agreement with a boxer that stipulates that the fight be fair. The fight wasn‘t and Main Events (promoter) filed an interpleader complaint.  Who wants some money: Time Warner; McCall; Don King Productions; Adams (McCall‘s manager); Nevada Athletic Commission  The money amount is fixed and every one thinks they are entitled to it.  McCall and Time Warner are really the only ones that have adverse claims to the money (Main Event also has a claim to the money because McCall breached his contract). o Very unusual that the interpleader Plaintiff is also a claimant  Ok for M.E. to make a claim after there are 2 other adverse claimants Issues: Venue: - DKP argues that venue is improper because none of the named defendant-claimants in to the interpleader action reside in the district. - Under Rule interpleader, venue is proper in the district where the stakeholder resides (ME is a claimant to a portion of the funds). The requirements for venue are derived from §1391. (where a substantial part of property that is the subject of the action is situated; ME has the property). - Under §1335 statutory interpleader, venue is proper where one or more of the claimants resides (again, ME is a claimant). §1397 defines when venue is proper. Adverse Claims to the Funds: - Interpleader action requires that there be two or more adverse claims to the fund at issue. - In this action ME, McCall, and TW all assert a claim to the same fund. - Even if the action only involved ME and McCall, it could be considered an interpleader action because both ME and McCall assert a claim to a fixed sum of money (fund) Diversity: - Under Rule interpleader: Complete diversity is needed - Under Statutory interpleader: only simple diversity between adverse parties is needed. Personal Jurisdiction: EXAM HYPO Facts: - T(IL) sues David (AR) for 100K. Here diversity jurisdiction in this action is good. - David seeks to interplead 2 other AK residents. Can he do this? - Not an interpleader case, b/c the parties are not adverse to each other o Each has a claim against David, not against one another - Rule Interpleader: Under 22, David could not file interpleader because complete diversity would be lacking. - Statutory Interpleader: o Do we have adverse claims to the same fund? In theory there is no fixed sum that the claims are competing for. So Interpleader would not work (each claim is independent from one another and David could pay all of them in theory) o NO INTERPLEADER CLAIMS WORK FOR THESE FACTS o If this was a claim against D‘s insurance company and the company has a 250K cap on payment, then there is a fixed sum to which each claimant is staking a claim. So statutory interpleader could work in this case. CLASS ACTIONS Rule 23—Class Actions Prerequisites: - Numerosity – (a)(1): the number where joinder of all potential plaintiffs becomes impractical - Commonality – (a)(2): Are the injuries or facts common to the potential plaintiffs (don‘t have to be identical, but need to be similar → need to have a lot in common with their cases - Typicality – (a)(3): Is the representative typical of the class? → is the Rep asserting the same kinds of claims as everyone else, or does that Rep have a conflict of interest in some way - Adequate Representation – (a)(4): Will the Class as a whole be adequately represented by the class representative? Will Counsel adequately represent them? Class Actions Maintainable: - (b)(1) – Risk of incompatible standards or judgments that would impair other class members o Like interpleader in that it‘s usually about a fixed or limited fund - (b)(2) Uniform declarative or injunctive relief - (b)(3) Common Q‘s predominate and class action is superior means of managing the case o Most commonly used in civil litigation Notice Under Rule 23: - 23(b)(1) and (b)(2): the court may direct appropriate notice to the class - 23(b)(3): court must notify class members who can be identified through reasonable effort - Notice must: o Notify that class members may appear through counsel o Give opportunity to opt out of class o Notify that judgment will bind all class members who did not opt out Class Action Fairness Act (28 U.S.C. § 1332(d))  Recall general rule in Zahn that all Ps in diversity case must meet amt in controversy requirement o Modified by 1367, as recognized in Allapatah (but can‘t fix complete diversity problem)  CAFA modified jurisdictional requirements for a subset of class actions under Rule 23 o Total amt in controversy exceeds $5 million (no longer each P meeting $75K) o Any member of class of Ps is diverse from any D (simply diversity rule) o Other provisions allowing and directing ct to decline jurisdiction Choice of Law What substantive law will be applied by the court deciding the case?   Vertical – distribution of judicial power between Fed and State governments (Erie doctrine) Horizontal – determination of which state‘s law applies (Conflict of Laws) o Not necessarily the case that the forum state’s law applies Swift v. Tyson and the Rules of Decision Act  Laws of the several states, except where the Constitution, treaties or statutes of the US otherwise require or provide, shall provide the rules of decision… o What are the laws of the several states?  Swift says under Rules of Decision Act only use State statutes, not State common law  Law is a ―brooding omnipresence in the sky‖ and judges just ―find the law‖ using decisions of state courts as evidence of what the law is THE ERIE DOCTRINE Erie Railroad Co. v. Tompkins  PA citizen is injured in a rail accident in PA; he brings suit in federal district court in NY (where Erie is a citizen)  Erie wants PA law to apply (it would treat Tompkins as a trespasser); Tompkins wants federal law to apply (it doesn‘t treat Tompkins as a trespasser)  Erie’s view of Swift: o Swift misinterpreted the Rules of Decision Act, leading to lack of uniformity:  Irrational discrimination in differing results b/t litigants with, and those w/o, diversity.  This results in dysfunctional encouragement of forum shopping  And in turn creates conflicts between Fed and State law o Misinterpretation of Swift was constitutionally defective  There is no federal general common law  Congress has no power to declare substantive rules of common law applicable in a state whether they are local in their nature or ―general.‖  Holding: Federal courts in diversity cases apply state substantive law (not bound to follow state procedural laws)  Substance vs. Procedure o Textual basis in Rules of Decision Act? o What rules are substantive and what rules are procedural?  Substantive tells you what to decide  Procedural tells you how to decide Guaranty Trust Co. of NY v. York – ―outcome-determinative‖ test The main question is whether a statute of limitations is substantive or procedural? If it is substantive, then state law governs and the Fed. Ct. cannot hear the case; if it is procedural, then the Fed. Ct. can apply its own (federal common law) rule and hear the case.  Outcome Determinative Test o Would the outcome be substantially different if it were to go to Fed Ct rather than State Ct?  If yes → scale tips to a substantive matter → use the State rule  If no → more procedural → use Fed rule o A statute (of lims here) that would completely bar recovery in a suit if brought in a state court bears on a State-created right vitally and not merely formally or negligibly o Congress never gave, nor did Fed Cts ever claim, the power to deny substantive rights created by State law or to create substantive rights denied by state law  Plus, stat of lims is tied to a particular type of claim, unlike most procedural rules Substantive → stat of lims, burden of proof, conflict of laws, and contributory negligence Byrd v. Blue Ridge Rural Electric Cooperative, Inc.        Factual question as to whether an employee who is suing an employer is a statutory employee (would have to get compensation through administrative proceeding) o If yes → employer has an affirmative defense and no civil action o If no → civil action is appropriate, don‘t have to go through admin. proceeding. The main legal question is whether the state law (which gives the decision to the judge) or the federal law (which gives the decision to the jury) will govern this question. Policy of uniform enforcement of state-created rights and obligations cannot in every case exact compliance with a state rule – not bound up with rights and obligations – which disrupts the federal system of allocating functions between judge and jury o At least not where the state rule is not ―an integral part‖ of the substantive policy, or ―bound up‖ with it. Balance: o Strong Fed policy of jury trials (7th Amendment) o State interest in the rule (here, not bound up with rights and obligations) Holding: Fed rule, not State rule → so jury determines whether statutory employee or not Strong Fed interest gets heavy weight, at least where the state law is not bound up with rights and obligations like here o If it were bound up, would be a much tougher questions Also, here, it is not at all clear that it is outcome determinative, which cuts against using the State rule as well. Hanna v. Plumer Question of whether state law governing service of process or federal law (Rule 4) controls in the case → Rule 4 controls  Refining Erie o The ―outcome-determination‖ test therefore cannot be read without reference to the twin aims of the Erie rule: (1) discouragement of forum-shopping and (2) avoidance of inequitable administration of the laws.  All procedural rules are ―outcome determinative‖ if not followed, like time limit for filing, form of pleadings, etc.  Discouragement of Forum Shopping – not an issue here  When P chose her forum, she was not presented with a situation where application of the state rule would wholly bar recovery; rather, adherence to the state rule would have resulted only in altering the way in which process was served  If the difference btwn the rules would drive a P to forum shop then Erie would apply, but if it is a rule that would not motivate a P to seek a forum at time of filing, then Erie doesn’t apply.  Inequitable Administration – not an issue here  If the difference in the administration of the law is significant and would motivate a plaintiff to shop for forum then it‘s probably inequitable. o Erie did not hold that a Federal Rule must be displaced with a state rule.  The question becomes whether the Federal Rule is within the boundaries of the Rules Enabling Act and the Constitution.  Was the Rule validly enacted?  Is it constitutional? o ―The Constitutional provision for a federal court system (augmented by the Necessary and Proper Clause) carries with it a Congressional power to make rules governing the practice and pleading in those courts which in turn includes a power to regulate matters which – though falling within the uncertain area between substance and procedure – are rationally capable of classification as either. Impact of the Federal Rules   These Q‘s concern the scope of the Enabling Act and the constitutionality of specific Federal rules in light of the distinction set forth in Sibbach o Sibbach inquired whether the rule ―really regulates procedure‖ Sets up 2 different tracks for dealing with conflict o Rules Enabling Act cases – involving FRCP o Rules of Decision Act cases – true Erie cases Erie Analysis: I. Is there a Fed. R. that clearly controls the situation and directly conflicts with the state rule at issue? (if it controls, usually use the FRCP) A. If yes, apply the Fed. R. as long as it was validly enacted and is constitutional 1. Validly Enacted → adopted under normal procedures and authority of Rules Enabling Act 2. Constitutional → does not enlarge or abridge any substantive right a. True of rules that are clearly procedural AND b. those rationally capable of being characterized as procedural B. If no, then have to analyze under part II. II. Would application of the federal rule be ―outcome determinative‖ in a way that implicates the twin aims of Erie? (here, usually comes out on the state side) A. Would application of the federal rule encourage forum shopping? B. Would application of the federal rule lead to inequitable administration of the laws? Other Erie Cases Ragan – Kansas law regarding commencement of action in stat of lims tolling context, and not FRCP 3, applied since definition of commencement was an integral part of Kansas statute; reaffirmed in Walker v. Armco Steel. Woods – Mississippi statute that barred a foreign corporation that had not been qualified to do business in the state from bringing suit in state courts was substantive and foreign corp. could not bring case in Mississippi federal court either. Cohen – NJ statute requiring plaintiff to post bond as security for costs must be applied in a federal action in NJ even thought federal rule did not require bond. Gasperini – excessive jury award question → NY standard is ―deviates materially‖ and is to be used by the appellate court in deciding → the Fed standard is ―shocks the conscience‖ and is decided by the District Judge, not the Circuit Court (7th Amendment → review for abuse of discretion). So, Ct came up with dual answer → apply NY state law standard, but Dist. Judge applies it and Cir. Ct. reviews for abuse of discretion. If it’s a lingering question of judge vs. jury, look to Gasperini and Byrd and balancing test More Erie Issues  Which state‘s law applies (horizontal choice of law)?  What about federal causes of action litigated in state court (reverse-Erie problem)  Federal common law vs. general federal common law.  Determining the content of state law in the face of uncertainty  Appellate review of district court determination of the content of state law Horizontal Choice of Law  Once a fed. ct. determines that it should apply state law, how does it go about determining which state’s law to apply? o According to Klaxon, a federal court should apply the choice of law doctrines of the state in which the court sits o See Hypo facts on slides: How should the fed. dist. ct. in StL go about determining the statute of limitations?  The ct. would apply the ―choice of law rules‖ for Missouri. The MO choice of law rules govern which law will apply in the action, which is TX law.  On an exam the facts will need to be given to answer these questions Reverse-Erie Problems State court actions that are base on federal law: Supremacy Clause requires States to hear Fed law claims  What aspects of federal law must the state courts apply? o Substantive rules that are outcome determinative o Purely procedural rules (FRCP) will not be applied; the state procedure rules apply  What about state rules in the grey area btwn substance and procedure? Dice, Felder, Johnson o State ct. may apply a procedural rule where it neither burdens nor frustrates the attainment of the fed statute‘s policies and objectives, and is not outcome determinative Federal Common Law After Erie  Erie declared that there is no general federal common law. What other kind of federal common law is there? o Statutory/constitutional gap-filling (terms missing or ambiguous that need filling in) o Federal common law is a rule of decision that amounts, not simply to an interpretation of a federal statute or a properly promulgated administrative rule, but rather, to the judicial creation of a special federal rule of decision (for the statute to operate)  Compare implied causes of action – Bivens – different, b/c an interpretation of a Constitutional provision rather than gap-filling/creation of a rule  Conflicts btwn sovereign states or ―significant‖ conflicts btwn state and federal law where ―uniquely federal interests‖ are at stake  Where do courts look to create this federal common law? o Sometimes create their own doctrines o Sometimes ―borrow‖ from state doctrines (often where federal law has ―voids‖)  Statutes of limitation (before there was a federal default)  Undefined terms – ―children‖ under Copyright act Unsettled State Law  Federal court follows decisions of state’s highest court as to state substantive law  If not state supreme court decision, lower state court decisions are persuasive, not binding, authority  In the absence of any state court decisions, federal court makes an ―Erie guess,‖ trying to determine what the state supreme court would decide o Alternatives to an ―Erie guess‖  Certification – Dist. Ct certifies the question to the state‘s highest court  Pro: avoids speculation; Cons: drags litigation on, can be costly  Abstention – hotly contested state law issue that Ct for policy/federalism reasons refrains from hearing Erie Guess: Federal court follows decisions of state‘s highest court as to state substantive law.  How is the process different from Swift? Now, under Erie, can guess if no state high ct answer, but if state high ct decides the issue later, this overrules the Erie guess  Decisions of lower state courts are persuasive, but not binding, authority o Decisions of intermediate app. cts are not to be disregarded unless the fed ct is convinced by other persuasive dat that the highest ct would decide otherwise o Presumption in favor of state app. ct.  How much weight does one Fed App Ct give to decisions of other Fed App courts? o See note 2, p. 301: App Ct for circuit of that state has made the decision. In this type of case, some decisions have given the App Ct for that Circuit more weight/deference  But not bound by this; only bound by state highest court‘s decision    Should it matter which other appellate court?  Again, app. ct for the circuit that holds that state may hold more weight, but is still ultimately persuasive What should a district court do if a state court decides the issue after the federal appellate court has guessed the opposite way? Go with the state court‘s decision What should the appellate court do when a state court has decided contrary to appellate court‘s Erie guess? What if there are multiple lower court decisions? What deference should an appellate court give to a district court‘s determination of the content of state law via an Erie guess? – None. o Salve Regina College v. Russell  State law breach of K claim; P kicked out of nursing school for not abiding K stipulation of losing weight; she claims substantial performance  Rhode Island supreme ct had limited the doctrine to construction Ks  Dist. Ct made Erie guess and held SCt RI would apply substantial performance doctrine here as well (cited good ―feel‖ for RI law → former RI SCt judge)  How much deference should the Fed. Circuit Ct. give to the Fed. Dist. Ct‘s Erie guess? o None → de novo o Why? This is a question of law, not a q of fact. App. Ct has far more time and expertise in dealing with legal issues, while Dist. Ct. is pressed for time in deciding motions on trial, controlling jury, making decisions on evidence, etc.  At least this becomes a circuit-wide guess creating uniformity w/in Circuit  But what about forum-shopping? Camacho v. Texas Workforce Commission – state law discretionary atty fees procedural  Fed Ct has jurisdiction arising under: Decl. Judgment action brought in state, but look past this to the underlying substantive issue → Federal law  Issue: Texas Declaratory Judgment Act grants atty fees to a party as the court finds ―equitable and just‖ (not based on who wins)  Does it conflict with a Federal Rule? No; move to bottom half of Erie analysis  Ct held DJA procedural, so American Rule (Federal policy) applies → ―parties are ordinarily required to bear their own atty‘s fees‖  DJA procedural b/c doesn‘t encourage forum-shopping or inequitable admin. of justice  ―Where an award of attorney‘s fees is discretionary and does not depend on the outcome of the case, it is difficult for a party to predict whether the law will result in an additional benefit or an additional liability. We do not believe that parties would select their forum based upon the availability of such a law. Nor does refusing to enforce such a law in federal court result in the inequitable administration of the laws.  McKenna thinks would encourage forum-shopping though, b/c in state ct you have a chance to get atty fees, where in fed ct you have no chance at all APPEALS Post-Verdict Procedural Motions Grounds for New Trial Rule 59(a) – New trials allowed ―for any of the reasons for which new trials have heretofore been branted in actions at law.‖ - Errors of law - Procedural error/errors in discretionary - Party misconduct - Verdict against the great weight of the evidence New Trial for Newly Discovered Evidence - Newly discovered evidence o Discovered since trial (w/in 10 days) Final Order Rule - Generally, only ―final judgments‖ are immediately appealable o Exceptions under §1292 o Collateral Order Doctrine o Rule 54(b) - A judgment is ―final‖ if it disposes of all of the claims against all of the parties and leaves nothing for the court to do except enter the judgment. o This rule streamlines the appeals process so that there is only one appeal for an action. o Appeal must be filed within 10 days and with the court that entered judgment Appealable Interlocutory Orders - Injunctions and receiverships - § 1292(a) o Interlocutory orders granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions may be immediately appealed. - Discretionary Appeals - § 1292(b) o Controlling questions of law as to which there is substantial ground for difference of opinion (unsettled: split circuts or decisions of first impression). o Immediate appeal from the order may materially adcance the ultimate termination o Double Discretion  Dist. Ct. must approve and App. Ct. must accept the appeal.  No automatic stay - Mandamus and Other Writs o No other adequate means to attain relief, and right to issuance of the writ is clear and indisputable Other Appealable ―non-final‖ Orders Rule 54(b) – Where ruling made on ―one or more but less than all‖ of the multiple claims and there is no just reason for delay; judge may expressly direct entry of judgment. - The trial judge may sever entire claims that he deems resolved so they can be appealed. o One P w/ 8 claims and SJ is granted for three o Three Ps have claims against one party and SJ is granted for one P Collateral Order Doctrine: - Order that is independent of the cause itself unrelated to the merits, and too important to be denied review because it finally determines a claim of right. o Ex: When P must post a bond to sue and the Ct. somehow waives this bond; if this could not be appealed until the final judgment, the actual bond is then worthless. The bond is not related to whether the P is right or not. Liberty Mutual v. Wetzel If there are multiple parties is a hint that we have a Rule 54(b) issue. - The District Ct. granted sj finding D liable, but did not make any judgment as to relief or the request for injunctive relief. - Rule 54(b) doesn‘t apply because the ct. only ruled on liability but there still remains damages to decide. So the claim itself isn‘t even fully resolved. Lauro Lines v. Chasser Collateral Order Doctrine - Forum Selection clause on the back of the ticket states where a lawsuit must be filed. - The Ct. dismissed denied the motion to dismiss based on the forum-selection clause. - D tries to appeal based on the collateral order doctrine because review is denied if the trial goes forward and that the order is unrelated to the merits. - However, the Ct. states that the claim is not completely destroyed even if the trial goes forward, because the D can always appeal after the case has been litigated. Standards of Review - Review of questions of law vs. questions of fact o Questions of fact reviewed under clearly erroneous standard (gives much deference to trial level factfinder); questions of law are reviewed de novo - Discretionary rulings o Reviewed for abuse of discretion (even more deference). Note 1, 748 o Standard used by district judge in factfinding?  Preponderance of the evidence o Standard used by the court of appeals reviewing factfinding is ―clearly erroneous‖—although there is evidence to support it the reviewing court oht the entire evidence is left with the definite and firm conviction that mistake has been committed o Standard Supreme Court to review the court of appeals?  Asks whether the court of appeals applied the clearly erroneous standard correctly to the district judge‘s decision-making, as a matter of law. Post-Verdict Procedural Routes - Renewed motion for judgment as a matter of law - Motion for a new trial—59(a) - Appeal - Motion for relief from final judgment—60(b) Relief from Final Judgment—Rule 60(b) - Compare timing to time for motion for a new trial and appeal process o 60(b)(1),(2)) and (3) vs. (4),(5), and (6).  1-3 must be filed within 1 year o Newly discovered evidence (2): not merely duplicative, probably will produce a different result - (6) ―any other reason justifying relief from the operation of the judgment o Properly invoked where there are extraordinary circumstances or where the judgment may work and extreme and undue hardship - Allows for a party to bring an independent action DeWeerth v. Baldinger - The D wins original case. In that decision a the ct. makes an Erie guess as to the interpretation of NY SOL - In another case the NY courts rule opposite to the Erie guess. - P files motion to 60(b)(6) and (5)—but it‘s really a (b)(2) o The court rejects P‘s (b)(6) argument (especially in the Erie context), because if we set aside judgments every time there is a change in law then judicial economy will suffer. o Court rejects P‘s (b)(5) argument that the judgment on which the judgment is based is reversed. (specifically refers to the judgment underlying the relief) o Prospective application—ongoing monitoring of parties by the court and the circumstances change so that it fundamentally changes monitoring. Collateral Attack / Independent Action  A separate case in a separate court asking them to set aside the other courts ruling. This is only granted when there is something wrong with the original court (lack of personal or subject matter jurisdiction, corruption, etc.) Faunterloy v. Lum – full faith and credit given, even upon potential mistake of law  Judgment in Missouri b/c D served in MO, but based on illegal K in Mississippi    Miss. law is that cts can‘t give relief for these illegal Ks → error in interpretation in Mo. ct. Miss. ct would not give effect to judgment, and Miss. S.Ct affirmed SCt US (Holmes) held full faith and credit demands giving effect to the Mo. judgment, even if upon mistake of law Baldwin v. Iowa-St Travel’g Men’s Ass’n – special appearance → cannot later re-litigate PJx  ISTMA contested PJx on special appearance in Mo. District Ct. → lost the motion  Then didn‘t file answer, default judgment entered  Then D went to Dist Ct for Southern IA and they dismissed for lack of PJx  8th Cir. affirmed  SCt held since appeared and litigated the issue of PJx, precluded from re-litigating it  ISTMA had option to not appear and contest in IA, or to appeal the Mo. judgment Effect of Prior Judgment – 4 doctrines regulate preclusive impact of prior judgments  Stare decisis – precedent of settled issues of law. Not focused on decisions involving particular parties but on issues of law previously settled. o When a point or principle of law has been once officially decided or settled by the ruling of a competent court in a case in which it is directly and necessarily involved, it will no longer be considered as open to examination or to a new ruling by the same tribunal or by those which are bound to follow its adjudications, unless it be for urgent reasons and in exceptional cases. Presumption against changing the law. o Holding v. dicta (dicta = all the stuff not necessary to resolving the issue the ct is called upon to decide) o Appellate panel issues: only S.Ct. and en banc decisions can overrule panel decisions; where two previous panel holdings or lines of precedent conflict, the earlier opinion controls and is binding precedent in the circuit  Law of the case – Once an appellate court has rendered a legal decision in a proceeding, that decision is not subject to review, with certain limited exceptions, in a subsequent proceeding within that same case, such as proceedings on remand and any appeal from a remanded proceeding; applicable only during the pendency of a single proceeding, and operates to foreclose re-examination of decided issues either on remand or on a subsequent appeal.  Claim preclusion (res judicata) – Precludes relitigation of an entire cause of action when any part of that cause of action has already been the subject of a final and valid adjudication on the merits between the same parties by a court of a competent jurisdiction. o A judgment rendered in a previous case will have preclusive effect if:  It was a final judgment  On the merits  Between the same parties  Concerning the same claim o Same Claim Transactional Approach (majority rule – federal courts)  Precludes all claims arising out of the same transaction or series of transactions as the first claim, even if based on different theories or seeking different remedies  Bars all claim s that were brought or that could have been brought. o Same Evidence Approach o Primary Right Approach  Issue preclusion (collateral estoppel) – Precludes the re-litigation of a specific issue that was definitively adjudicated as part of a different cause of action arising between the same parties or, at least, where the party that is sought to be estopped was a party to the original proceeding. o Majority of cts hold alternate holdings do not have issue preclusive effect, b/c neither necessary to the outcome. Society of Separationists v. Herman 2 cases 1. There is no constitutional right to serve on the jury and an oath is not a religious statement and doesn‘t constitute a violation of the clause 2. Ps sued that the practice of barring jurors as a violation of Free Exercise clause. nd nd  In the 2 claim the Ps avoid stare decisis because the 2 case deals with another issue of law  Different claim → one based on Establishment Clause, other on Free Exercise clause o Ct takes primary right approach to claim preclusion, holds not precluded Claim Preclusion Sopha v. Owens-Corning Fiberglas Corp.  Was the first judgment o A final judgment—yes o On the merits?—yes, considered on the merits even though they didn‘t get into the facts o Between the same parties?—yes o Concerning the same claim?—yes. A claim is defined as a single cause of action—all injuries caused by a single or series of transactions.  this case would normally be barred under claim preclusion; however the court carves out a special exception for asbestos exposure o This is because in asbestos cases and under WI law P may know that he has been injured early (which would start the clock on sol) but may not discover an actual harm until much later (after the sol has run). Valid and Final Judgment on the Merits? (1) final judgment (2) on the merits (3) ct of competent Jx Kremer v. Chemical Construction Corp.  P brought unsuccessful claim in St Ct for antidiscrimination, then tried to bring in Fed Ct under Civil Rights Act  Ct held St Ct decision entitled to full faith and credit, and precluded parallel Fed claim  Claim preclusion requires P have a ―full and fair opportunity‖ to litigate its claim o If original judgment met minimum due process req’ts, then later claim precluded. Case about s.o.l. CA Dist Ct claim preclusion in MD State Ct? US SCt holds no, treat Fed Ct like the state ct in which it sits → claim in MD wouldn’t have been precluded by CA State Ct judgment, so not precluded by CA Fed Dist Ct judgment (for s.o.l. at least, maybe not for dismissal for discovery violations, b/c strong Federal interest in something like this) Same parties? Perry  P had sued for same thing before, but now suing for another (paid to have rights assigned)  Applicable rule: assignee stands in shoes of assignor and assumes same rights, title and interest possessed by assignor  P, even though had sued for same thing before, was now different party, so no preclusion Same Cause of Action?  Majority of Cts use Transactional Approach; see above HYPOS – Claim Preclusion Problems – handout 1. David v. Jennifer  Preliminary injunction decision is not a final judgment, so no claim preclusion; Jennifer can appeal because a preliminary injunction has a statutory exemption to allow an appeal. 2. D v. J 2  final judgment, on the merits, the same parties, more or less the same claim (declaratory judgment would require them to litigate the same issue)  What if the app. ct. ultimately reverses the district ct‘s judgment for David? The earlier decision does have claim preclusive effect even though there is an appeal pending, but if it gets reversed on appeal, can then file motion for relief from final judgment under Rule 60.  So, her claim would not be precluded anymore. 3. Igloo v. Penguin  the dismissal is a final judgment, not on the merits of the action, but it is on the merits of whether venue was proper (preclusive effect only for same venue), the same parties o like PJx in many cases (preclusive effect only for the particular state) 4. Rob and Debbie at Cards game  Cards foul ball (failure to join a party) Debbie doesn‘t have to join b/c the rule doesn‘t actually state that parties have to be joined. 5. l v. GM  As long as Ct uses a transactional approach, this would be barred: arises out of the same transaction of facts o Cts don‘t force you to come to court, but if you do come to court you must bring all the claims arising out of the facts or you waive them. 6. Nebraska ―same evidence‖ rule, brought in Iowa, which uses ―transactional approach‖  Iowa Ct should use ―same evidence‖ rule, b/c that is what the rendering ct would use  Rendering ct in Nebraska would preclude the case, so Iowa ct should too  Semtek 7. What if she attempted to bring the second one not in State ct in Iowa, but in Fed Ct?  Full faith and credit doesn‘t apply to Fed Cts, but as a matter of practice, Fed Ct gives same preclusive effect the rendering ct would give it.  So, same outcome → use same evidence approach → claim would be precluded  Semtek Pg 781  Similar to Ann‘s case, however, P in this case wins. Claim preclusion still applies even if you win the first case. You Must Bring All Claims.  (3) D is trying to collaterally attack NY judgment in CA stating that the NY judgment is unenforceable b/c it was barred by NY statute of limitations. SOL claim is barred b/c it is an affirmative defense and if it is not raise, it is waived. Claim preclusion works against affirmative defenses. Same for personal jurisdiction (unless it is raised. Then, if P tried to enforce in CA, D could raise PJx objection and the CA court can revisit this question). Semtek v. Lockheed  Does a CA fed dist. Ct‘s dismissal with prejudice using CA state law (stat of lims) have a preclusive effect on the claim brought later in MD?  If prior decision was by CA state law, MD Ct would use CA preclusion rules  Issue is why if refiled in CA would be precluded, but not in MD where stat of lims is 3 yrs o Stat of lims bars remedy in CA, but not substantive right in MD o This is an exception to the general rule that if precluded in rendering state, would be precluded if filed later in another forum  The preclusion rules are whatever the preclusive effect would be for the judgment-rendering court. Must look to the preclusion rules of the rendering court that made the decision.  The MD must apply the same rules of preclusion for rendering ct. (Fed Dist Ct in CA)  The Fed Dist Ct. applies federal common law, and it is supplied by S.Ct.  → Supreme Ct. precedent shows that fed cts borrow state law for dismissal on sol and whether should preclude claim in another state.  According to the analysis the previous decision (stat of lims) had no preclusive effect on the MD claim (stat of lims), b/c that is what CA ct would have decided. o  Fed Common Law will not borrow from state law if there is a conflict with Federal interests. 1. Second ct has to give the claim the same preclusive effect as the rendering ct 2. Fed cts use transactional approach on Fed Question cases; When using state substantive law for diversity or supp. Jx, use Fed Common law, and give same rendering effect the state ct would give (unless it will conflict with a superior federal interest) Claim Confusion Hypos In Claim preclusion the App court should use the same approach that the rendering court would give it. What if she attempted to bring the strict liability action in fed. dist. court in Iowa. What approach to claim preclusion should that court use to determine whether the claim is barred? The Fed. Ct. is obligated per Semtek use the same rules as the state in which it sits, which requires the court to look at which law the state court would apply, which is Nebraska law Issue Preclusion  When an issue of law or fact was actually litigated and determined by a valid and final judgment and the determination was essential to the judgment that issue is binding on the party against whom it was decided in a different cause of action, as long as he/she had a full and fair opportunity to litigate the issue in the first action. o Unlike claim preclusion, does not apply to things that could have been litigated o Doesn‘t require mutuality (both parties don‘t have to be the same, only the party against whom the issue was previously decided). o Same question can come up in various and unrelated legal claims.  Identicality → is it the same issue? o Gail M.: Issue: whether parental rights should be terminated st o 1 case was to determine whether P was the child‘s father. This is not the same issue → certainly a related issue, but this issue was not previously litigated  Actually Litigated and Essential to the Judgment (unambiguously/necessarily decided) st o Herrera v. Reicher – 1 case jury awarded P damages and liability against on D (son) but not nd other D (father) per a list of issues that the jury must find on → general verdict. The 2 Case injured is trying to enforce judgment on the father and Insurance Co based on the father‘s negligence. To what extent has the issue been actually litigated and binding?  Was the issue actually litigated? Yes.  Was the issue actually decided? We don‘t know if the jury came to their verdict by making a determination on the issue, b/c don‘t know which argument the jury bought → wouldn‘t be a problem if there had been a special verdict. We don‘t know if the determination was essential to the judgment.  Necessarily Decided st o Rudow v. Fogel: land in trust for son at issue → 1 case dealt w/ ejectment and decision that nd dad and uncle were cotenants (and ct found trust not made out on the facts); 2 case the issue is whether the trust is valid → not essential to the trust in the 1st case, b/c even if ct said nothing about the trust in the first case, the outcome would have been the same  Cts may not think as hard about things that don‘t actually matter to the outcome  No incentive to appeal the decision if it doesn‘t impact the outcome  dictum → not essential to reaching the judgment  Full/Fair Opportunity to Litigate o Ability to appeal o Procedural characteristics of the earlier proceeding o Opportunity to present case/testify o What was really at stake? Did the party have incentive to take it seriously? Issue preclusion problems on handout 1. Robert and Debbie hit by foul ball at Cards game → Rob sues for negligence in 1st case. a. Actually litigated? i. General failure to take reasonable precautions to protect fans litigated in 1st case, or failure to take reasonable precautions to protect fans in Robert‘s particular position? Here it‘s not as big a deal, b/c they were sitting right next to each other. b. determination essential to the judgment? i. Could they have found for Robert without this ruling? No, so essential to the judgment c. Party against whom issue was decided? Yes, Cardinals d. Full and fair opportunity to litigate (for Cardinals?)? → Yes 2. What if court had found Cards exercised reasonable care? Is Debbie later precluded? a. converse not true → you don‘t get to hold issues that you win against non-parties later → Cards can‘t hold it against Debbie → it was decided against Robert b. only binding on the party against whom it was decided 3. What if Deb had been working with Rob‘s lawyers behind scenes in 1st case and paying his legal bills? a. Deb looks to be Rob‘s privy, but is not. Privy = trustee/beneficiary, guardian/minor b. So, Deb is not the party against whom issue was decided, so not precluded 4. Custom Cleaners short answer hypo a. Issues decided against Custom Cleaners it cannot relitigate b. Issues Custom Cleaners won can be relitigated c. 2 potential grounds on which D wins in 1st case: either State sovereign immunity or K invalid (ct holds both true) d. In 2nd case, D trying to claim K was already decided to be invalid i. Actually litigated? → pretty likely that it was ii. Determination essential to judgment? → alternative holdings, so NO → outcome in the 1st case would have been the same even if ct had not ruled on K‘s validity (majority rule) (unless rendering ct is in the extreme minority) iii. Party against whom issue was decided? → yes, but doesn‘t matter, b/c determination was not essential to the judgment st  York Ford Case: 1 case was a question to permit Ford to extend its current use it was denied on 2 nd grounds: that York‘s use as illegal and it was not a valid preexisting nonconforming use; 2 case whether Fords previous use was legal or not. o When we have two alternative holdings it is usually hard to tell if the issue is essential to the decision o Here when an administrative body makes a determination, as long as the parties have an opportunity to participate in a hearing then you have received a full and fair opportunity to litigate. o Both determinations made do not have preclusive effect because it is unclear upon which determination the holding relies. o Whenever there are alternative grounds for judgment it is usually a red flag that neither are essential to the judgment. HYPO Cards Hypo 1: - was the issue actually litigated - was the determination essential to the judgment - is it being held against the party on whom it was decided? - Did the Cards have a full and fair opportunity to litigate? Cards hypo 2: - What if in the previous case the Cards were reasonable - Was it litigated? - Was the determination essential - Is it being held against the party on whom it was decided? NO Claim Preclusion or Issue Preclusion? Look at the David v. Jennifer Hypo—should reach the same answer. Problems on pg 805 # 2. Was the issue litigated? Yes—judges findings Was the determination essential? No—this situation has 2 different defenses raised and the judge rules in favor of both of them, neither have preclusive effect (majority rule). Stick to maj. Rule unless directed otherwise Is it being held against the party on whom it was decided? # 4. What if two courts interpret the same statute differently? Does the first judgment have preclusive effect on the second court. In the first case he has a defense in the second the ct. interprets the defense differently - Was the issue litigated? Yes, can the D use the affirmative defense under the ADA - Was this decided? Yes - Differences of opinion about statutory interpretation is not a basis for avoiding issue preclusion. - Must give the same preclusive effect as would the rendering court. (b) Was the issue litigated? Probably not, because the Cts are not deciding on the same statute and they could be different. - If this were a Claim preclusion case, the fact that they are two different laws doesn‘t matter if the claim was litigated and it would be precluded - In the issue preclusion, you must first discover whether the actual issue is decided. Sample Essay Question Claim Preclusion or Issue Preclusion—Issue b/c the parties are different.  Sonja‘s motion → Sonja is using offensive non-mutual collateral estoppel. o Actually decided, essential to judgment b/c the jury found against Alex on the other claim, party against whom decided, full fair opportunity to litigate o Can she use offensive estoppel here?  Ct has discretion  Sonja did have chance to easily join in previous litigation – red flag  But, would not be unfair to the GD o 1st claim was severe, so incentive to litigate vigorously o No inconsistent prior judgments o No procedural differences in this case  TC has a lot of discretion here → could decide either way  General Dynamics‘ motion → GD trying to hold against Sonja something that was not decided against her, and cannot do this. Sonja is not Alex‘s proxy, so it can‘t be held against her. GD‘s motion should be denied. Parklane Hosiery  In a prior action in equity w/ SEC, ct found Parklane issued misleading proxy statement.  In this case another P is trying to use this prior determination in damages action o Collateral estoppel ok under law of collateral estoppel?  Could P have easily joined 1st case? No this was an administrative action.  Unfair to D? No  Prior action minor and no incentive to vigorously litigate? No  Judgment relied upon for estoppel inconsistent with previous judgments against D? No  Would D in present suit have procedural advantages didn‘t have before (like further discovery)? No o Use of offensive collateral estoppel in this case violation of 7th Am right to jury trial?  No → strong precedent that coll. estop. applies between cts of equity and law  Even though no coll. estop. in 1791, doesn‘t infringe on 7th Amendment Parklane Hosiery and Non-Mutuality Offensive vs Defensive uses of collateral estoppel.  How are the risks of offensive collateral estoppel to be guarded against? o Broad discretion to trial courts to determine when offensive collateral estoppel should be applied. o General rule should be that in cases where a P could have easily joined in the earlier action, or where…the application of offensive collateral estoppel would be unfair to a D, a trial judge should not allow the use of offensive collateral estoppel.  If could have joined easily → red flag  What circumstances are unfair? Was the prior litigation sufficiently serious (high stakes) to motivate the D to litigate the issue aggressively  What if the application of offensive collateral estoppel deprives a party of a jury decision on that issue? o Stewart‘s view prevails on basic reasoning that you would get a lot of inconsistent judgments if don‘t allow estoppel here → the whole point of collateral estoppel is to prevent inconsistent judgments  Offensive non-mutual collateral estoppel against the federal government? Non-mutual collateral estoppel doesn‘t apply to the fed. gov., but mutual does. Mendoza. o Government‘s interests can significantly change over time with change of administrations, etc. Gov‘t needs flexibility to change policies and litigate under those policies.   HYPO - What if D had been working behind the scenes with R‘s lawyers? - If R wins, judicial discretion will not allow her to use offensive preclusion; - If R lost, her involvement probably wouldn‘t be enough for the Cards to use collateral estoppel on her. PROVISIONAL REMEDIES - Pre-judgment seizure o As a P you want a guarantee that the money or whatever will be there if you win at the end of the case. o Concerns it raises  Due Process  Cost of Error o How should the court analyze the due process question?  The private interest that will be affected by the official action  The risk of an erroneous deprivation of such interest through the procedures used and the probable value, if any of additional or substitute safeguards.  Principal attention to the interest of the party seeking the prejudgment remedy, with , nonetheless due regard for any ancillary interest the government may have in providing he procedure of forgoing the added burden of providing greater protection. o P must take significant steps to show that she is entitled to it. - Interim Injunctive Relief o Why would interim injunctive relief be necessary?  Risk of irreparable harm o What are the risks of allowing for such a mechanism  Risk of irreparable harm to the other party - TRO vs. Preliminary Injunction o PI required to prevent irreparable harm prior to final disposition of the litigation. o TRO under Rule 65—risk of irreparable harm before adverse party can be heard in opposition, but it is not required—can take place ―ex parte‖.  Limit to 10 days  Bond requirement  Adverse party may move to dissolve on 2 days notice or less. Preliminary Injunction: - A party must demonstrate o Case has some likelihood of success on the merits; o No adequate remedy at law exists o It will suffer irreparable harm if the injunction is not granted. - If satisfied that these conditions are met, then the Ct. must consider o The harm to the nonmoving party if preliminary relief is granted; balanced against o Harm to the moving party if relief is denied o Public Interest Note: If you can make the P whole with money at the end, then you don‘t enter preliminary injunction. Ty, Inc v. the Jones Group