Personal 1. Statutory Question 1. Statutory Question (Cocker & 4(k)(1)(a))
Jurisdiction 2 Constitutional Question 2. Constitutional Question
Subject 1. state statutes 1. Statute
Matter 2. state constitutional question a. Federal question
Jurisdiction b. Diversity
Venue Statutory Question Only Statutory Question
Only in GA is there a Constitutional Question
I. State Court
A. PJ: authority of court to summon individual to court
1. Constitutional Question
- due process of law fundamental fairness of summoning individual
a. Authority Constitution
1.) Relationship (Used to be Power 4 methods of Pennoyer)
(a) specific jurisdiction
(i) minimum contacts
nature and quality of act, (have to be purposeful)
enjoying benefits and protections of the law
(ii) fair play and substantial justice
(b) general jurisdiction
substantial contacts (ie domicile)
2.) Consent ( can always agree have PJ imposed upon him)
b. Notice the way the individual is summoned
1.) by hand
2.) by mail (registered)
2. Statutory Question
- whether state itself would summon individual (long-arm statute or just acceptance of
Intro to PJ:
The Supreme Court through the 14th Amendment places the outer limits on Personal Jurisdiction. It
does not mandate that the state extend PJ over s who do not live in that state. It merely allows it in
instances where the state chooses to extend jurisdiction. It is up to the state legislature to grant to its courts
the power to extend PJ. Thus, determining PJ is a 2-step process:
1. Is there a statute that authorizes the exercise of PJ in X state under the circumstances of case at bar?
2. Would it be constitutional under the Due Process Clause to do so?
1. Constututional Question:
Pennoyer v. Neff, 95 US 714 (1877) – previous system of establishing PJ
- the power prong defined. There were 4 methods of exerting power over the individual
1. In personam if individual actually in state, he could be summoned
2. In rem if individual owned property in state, could be summoned
3. Quasi in rem if dispute over a piece of property in state, could be summoned
4. Domicile if individual lived in state, could be summoned
Problems with Pennoyer System:
- awkward for corporations
- loophole for individuals who traveling in state who cause accidents. They can only be summoned in
the state in which they live.
International Shoe Co. v. Washington 326 U.S. 310 (1945) p.91
- ISC = Delaware corporation
- ISC‘s principle place of business = Missouri, but its interstate business included the placing of orders
in Washington state by 11-13 salespersons who lived there; however, there wereNo deliveries of goods
or inventory in Washington.
- The salespeople were under the direction of a manager who lived in St. Louis, Missouri, who was
served process for this lawsuit via registed mail
- LQ: could ISC be summoned in the state of Washington for failing to contribute funds for the state‘s
unemployment compensation fund?
- State argued that the first method recognized by Pennoyer, in personam jurisdiction, applied to ISC, for
the company had a ―virtual presence‖ in the state.
- Court held that if a corporation benefits from the laws of the state, then it must be prepared to be
considered ―present‖ in that state for the purposes of personal jurisdiction.
- This is in keeping with the notions of ―fair play‖ and ―justice.‖
- ―minimum contacts‖ standard established in situations where the does not reside in or was not
incorporated in said state.
- after ISC (and Shaffer), there is no longer a bright line rule as in Pennoyer. More discretion given to
Shaffer v. Heitner 433 US 186 (1977) p.102
- = a non-resident sharholder of Greyhound Corp. (incorporated in Del., Main HQ in Az.), filed a
shareholder‘s derivative action in Del. against 28 officers of the corp for an anti-trust action.
- secondly, filed for motion to sequester 82,000 shares of preferred stock in Del. Granted based on
Delaware sequestration statute.
- Notice given by certified mail to last known adresses of the shareholders and by newpaper
Argument by Del. Courts:
- the shareholders were enjoying the benefits of Del. by keeping the shares there, moreover, ISC did not
apply because issue here not in personam, but in rem jurisdiction.
- The sequestration of property in order to obtain PJ is allowed, but only if the piece of property is
significant to the suit (not here, since the CA was re: antitrust and shares were unrelated)
- It would be against Due Process to sequester property merely to induce to come to state.
- This case was a quasi in rem effort on the part of
- Problem, the actions that complained of took place in Az. and Oregon.
- This case is a second and final blow to the bright line rule of Pennoyer.
- Now, the only thing that matters in PJ is the ‘s relationship with the state
- Here, many of the directors had never even been to Delaware.
Note: the line b/w GJ and SJ is not clearly defined by the Supreme Court
- ‘s contact within a state is sufficiently substantial to support jurisdiction over claims unrelated to
those contacts (can be summoned for anything)
- ―substantial or pervasive‖ contact
- jurisdiction exists over only specific claims which relate to the ‘s connection with the state. (ISC)
- minimum contacts must be deliberately made by the
- ―casual or isolated‖ contacts do not = minimun contacts
- is supported by continuous but limited activity in the forum state. ex. an ongoing business relationship
- notion of an exchange between the and the state: state grants some protection or privilege, and the
agrees to be subjected to personal jurisdiction.
Hanson v. Denckla 357 US 235(1958): made explicit the requirement of ―nature and quality of the act‖as
articulated by ISC court: minimum contacts have to be ―purposeful‖ (ie, the contacts must have been
made by a deliberate on the part of the )
World-Wide Volkswagon Corp. v. Woodson 444 US 286 (1980) p.115
- = judge that tried to impose PJ over in a products liability action in Ok.
- Issue before judge had been car owners who had bought a car from the in NY, but had taken it to
- LQ: can an Ok. court exercise PJ over a non-resident auto dealer who sold a car to NY residents who
later got into an accident in Ok? No
- WWV has no purposeful minimum contacts in Ok (the purposefulness requirement was an addition
from Hanson v. Denckla, ie, merely traveling through Ok. Is insufficient)
- T/4 violation of DP to impose PJ over it is Ok.
Burger King Corp. v. Rudzewicz 471 US 462 (1985) p.136
- sued in Florida Dist. Ct. to recover for late payments and other contractual matters
- challenged PJ
- = resident in Michigan who invested in a BK franchise there
- ‘s head office is in Florida
- Extent of ‘s contact with Florida = his partner took BK management classes in Miami
- Court found that by extention of the franchise agreement between the parties, did have minimum
contacts with FL, for the business relationship was to last for 20 years.
- franchise agreement said that the agreement was made in FL, and was governed by FL state laws
- would receive major benefits from being a part of BK, a nationwide franchise, therefore, contacts =
- [ b/s the contacts and the lawsuit were based on the same relationship (the contract), FL actually had
special jurisdiction over the ]
- key difference b/w BK and WWV is the amount of paperwork and the business relationship b/w parties
- notions of fair play and substantial justice is not threatened by imposing PJ on
Kenerson v. Lindblade 604 F. Supp. 792 (D. Maine 1985)
- decedent was a Maine resident who was injured in NH. He was taken to a NH hospital, which then
decided to transfer him to a Maine hospital. Decedent died en route.
- sued NH hospital in Maine court, and the hospital objected to being ―haled before the Maine court‖
- Court found that the NH hospital dealt with so many patients that were Maine residents, that it could
reasonably expect to be sued in a Maine court. (general jurisdiction, not based on minimum contacts)
- Moreover, the hospital was very purposeful in its solicitation of Maine residents: ―continuous and
systematic business practice of treating Maine residents‖
- The relationship between NH hospital and Maine create a situation of general jurisdiction [casebook
editor thinks only GJ possible, Walker thinks SJ possible, depending on how the contact is defined. ie,
if we look at NH as ―treating citizens of the state of Maine‖]
b. Notice (and PJ in Federal Courts)
―Summons‖ (Rule 4)
- FRCP 4(k) lists the sorts of cases that can be litigated in Fed. Dist. Courts: ―Territorial Limits of
- (k)(1)(a) = fed. ct. may assert PJ in any cases in which a state court in which the fed. ct. sits would
be able to extend PJ [Rationale: to prevent forum shopping]
- (k)(1)(b) = interpleaded parties served within 100 miles of the courthouse
- (k)(1)(c) = parties subject to interpleader jurisdiction
- (k)(1)(d) = any other situations in which fed. statute allows for services of process
- 4(m) service of process must be made within 120 days of filing the complaint, or else action is
- 4(d) waiver of service (preferential by gov‘t), incentives given to waive service
- (d)(2): duty imparted to avoid ―unnecessary costs of serving the summons‖ (cost to who does
not waive when has good cause )
- (d)(3): reward for waiving process: 60 vs. 20 days to repond to complaint
- 4(e) Service upon individuals Within a Judicial District of the US 5 ways
1. Pursuant to the law of the state in which the district court is located
2. Can serve by any sanction that his home state can sanction
3. Personal delivery of notice
4. Leave notice at ‘s home
5. Leave notice with an authorized agent
Mullane v. Central Hanover Bank & Trust Co. 339 U.S. 306 (1950)
- bank had combined small trusts with large ones for investment purposes
- every few years the bank held a hearing so that the benificiaries could come and voice their concerns
- the beneficiaries were to be informed of the hearing via a notice placed in the newspaper.
- This method of notice is insufficient (violates DP), especially with respect to people who do not live in
the newpaper‘s distibution area
- Court set 2 rules of notification
1. if knows the beneficiary‘s residents, notice by publication is not enough
2. if do not know addresses, do not need to hunt them down and find them; however, must use a
method that one might reasonably adopt to accomplish the goal of actual notification
Note: court sets a very pragmatic rule: goal of a notice ought to be to give actual notice to other party.
2. Statutory Question:
Long-Arm Statutes (i.e. states extending their jurisdictional arms)
- Usually, state legislatures give their courts blanket authority to exercise PJ to the outer limits of DP
- Some state, however, have long-arm statutes: PJ based on specific types of contact with forum state
(tortious, contractual, etc)
- These limits are distinct from constitutional limits placed on PJ (although they are still limited by
constitution as they can exceed the DP limits, possibly)
- Federal Long-Arm Statute in 4(k)(1)(a) [copies that of court in which it sits—see below under Notice]
Crocker v. Hilton International Barbados, Ltd., 976 F.2d 797 (1st Cir. 1992)
- sued in federal court under the 4(k)(1)(a), which is a federal long-arm statute which states that a
federal court has PJ over in cases in which the state in which the federal court sits would have PJ
- Thus, b/s Mass. may have PJ over based on the Mass. long-arm statute, then the fed. court does also.
- The Mass. statute grants PJ over a person ―who acts directly or by an agent, as to a C.A. in law or
equity arising from person‘s transacting any business in this commonwealth‖
- In Mass., sued for damages resulting from her rape at the hotel, claiming negligence and loss of
consortium (post-traumatic stress syndrome)
- Hotel challenged PJ in Mass.
- Hilton is incorporated in Barbados, and has its sole place of business there (no offices, agents, or
employees in Mass. Moreovoer, does not pay taxes in Mass.)
- Extend of contact: s booked hotel room thru a travel agency in Mass., who had received an
advertisement brochure from Hilton in Barbadoes
- Because ‘s CA did not arise out of ‘s business conducted in Mass., Mass does not have PJ over
- the Mass. Long-Arm statute is denied
- The Mass. L.A. statute did not call for anythin beyond minimum contacts like in cases previous to this
- Note, constitutional issues were not even discussed in this case b/s the statutory question was sufficient
to quash the jurisdictional issue.
- use common law based on these cases just discussed
- if in Federal court, 12(b)(2): Dismiss for failure to prove PJ
SUBJECT MATTER JURISDICTION
- Which cases belong in which courts? (state vs. fed courts)
- Article III §2 limits jurisdiction of fed cts.
- Rule 8(a)(1) ―[A pleading shall contain]... a short and plain statement of the grounds upon which the
court‘s jurisdiction depends, unless the court already has jurisdiction and the claim needs no new
grounds of jurisdiction to support it.‖
- Three bodies of law determine which case goes in which ct:
Constitution, statutes conferring jurisdiction, case law construing both.
- General Federal Question statute: 28 U.S.C. §1331: ―The district courts shall have original
jurisdiciton of all civil actions arising under the Constitution, laws, or treaties of the United States.‖
- Problem: what constitutes ―arising under‖?
- Two possibilities with SMJ: exclusive jurisdiction, concurrent jurisdiction. State courts often have
concurrent jurisdiction over most issues with the Federal courts, with very few exceptions (admiralty
etc.) by contrast, the fed courts share very little jurisdiction with the state courts.
- Why should it matter where case tried? Tactical and/or political reasons. Ex.
- waiting periods differ in each ct.
- strategy based on likelihood of sympathy or damages.
- note, if a federal court has SMJ over a case, that does not mean that it will have PJ over the .
- What cases fall under Federal Subject matter juris? Holmes responds
- case arises under the law that creates the cause of action: Statutory question: is it a state or a
fed law question?
- Is the case one of Diversity of Citizenship?
SMJ in a State Court
- there is an assumption that all cases may be tried in a state court (unless obvious: admiralty, suit
against federal government)
SMJ in a Federal Court
Louisville v. Nashville Railroad v. Mottley 211 U.S. 149 (1908)
- Mott‘s injured in railway accident. Settlement: lifetime pass good for free transportation.
- U.S. Congressional act made such passes illegal b/s thought they were being used to bribe public
- When RR refused to honor Mottley‘s passes, he sued for specific performance on contract.
- Mott‘s sued in Federal Court, but the contract statute was a KY one.
- Mottley claimed that the Congress‘ act did not apply here, and if it did, it would conflict with 5 th DP
- Sup Court held that it was not necessary to look into Mott‘s claims, b/s the ct below did not have SMJ
- no diversity of citizenship in this case
- Mott‘s ground for jurisdicition= ―suit arising under the Constitution and law of U.S.‖
- Just because Constitutional guarantees may be important in a case, that does not mean that ‘s cause
of action arises under the Constitution. a mere Constitutional claim is not enough to warrant
jurisdiction in a federal court.
- This case was a contracts dispute. Thus, it had to be tried in a state court b/s state law applied
- Mottley‘s essentially anticipated the RR‘s defense (which would have involved a federal statute), and
then he anticipated his rejoinder (DP argument). Based on the anticipated answer and rejoinder, the
Mottley‘s raised the suit in federal court. However, a cannot anticipate defenses and rejoinders.
Challenging (federal) SMJ
- To challenge PJ, must do so at outset, otherwise, considered conceded. (PJ is a personal right, t/4
you can give it up. SMJ is for the gov‘t to determine.)
- Challenge of SMJ may be done at any level (by the court). SJM is not waivable like PJ b/s it does not
have anything to do with your person.
- However, if a party to suit is challenging either, (not the court) he must do so at the outset. Exception:
- Direct attack = attack on the action iteself
- Collateral attack = used when something has gone arry in case. Pary would not mention an objection
to SMJ at all, until it appears to be the only shot left to save suit. If the party raises the objected at
outset, cannot attack collaterally later. If party waits until the judgment is made by default, in a
subsequent action, the party may collaterally attack.
Rule 12(b)(1), defense as a pre-answer motion: ―lack of jurisdiction over Subject Matter.‖
a. Is there a federal issue in the first place?
b. If fed issue, does it ―give rise‖ to ‘s claim?
c. If the fed issue is not at the core of the case, it must be pleaded in a ―well-pleaded complaint‖ that
it an important issue requiring federal jurisdiction.
- Granting the well-pleaded complaint rule is more the exception than the rule.
Article III, §2 (which defines substantive procedure which have federal SMJ includes diversity juris.):
- for disputes between members of different states, and b/w State and citizen of other state
- Rationale: bias of state cts against those from other state, (or perhaps fed courts were deemed better)
- Diversity of Citizenship generally under attack .....
a. too much of a burden in fed cts.
b. It does not serve a vital function, for there is so much other prejudice in this country that ―state
citizenship prejudice‖ is almost obsolete
- Diversity Jurisdiction in a federal court is an option, not a mandate.
28 USC §1332 (first limit on Article III):
- codifies Diversity Juristiction with respect to individuals and corporations
- limits Article III § 2 diversity based on amount in controversty requirement $75,000
- amount in controversy requirement can be aggregated with resepect to what the can recover
- must ―intend to stay indefinitely.‖ie, open-ended
- coroporations are considered domiciled in the state in which they are incorporated and where they have
their principle place to business (this can only be one state)
- Unincorporated organizations: Domicile of all of the members req‘t
- If parties to suit move, for purposes of DJ, their domicile must be proved with respect to date suit filed.
Strawbridge v. Curtiss 7 US 267 (1806) J. Marshall (second limit on Article III)
- Judge-made (Marshall) interpretation of perfect diversity
- Complete diversity required with respect to parties on either side (ie, none of the s can be from the
same state as any of the s)
Domestic Relations Exception to Diversity of Citizenship Rule (third limit)
Ankenbrandt v. Richards 504 US 689 (1992) p.225
- mother sought monetary damages for physical and sexual abuse of her children by their father and his
- Dist ct granted father‘s motion to dismiss, b/s he claimed that the―domestic relations‖exception to
diversity of citizenship rule applied. Appellate Court agreed.
- If a case is one ―involving the issuance of a divorce, alimony, or child custody decree‖, it will be
subject the domestic relations exception to the diversity of citizenship rule (must be heard in state ct).
- However, this is not a domestic relations case but is one of torts. T/4 it may be tried in a federal court.
Supplemental Jurisdiction p. 233
- Broadens fed jurisdiction
- Resolves the problem of when it is efficient to allow joinder of litigation (as the FRCP allows broadly),
but the joinder may be barred based on jurisdictional issues.
- Problem in these cases is that there is no independent basis for SMJ
- Originated in case law (Gibbs), recently made into statute 28 USC §1367
- Other names: pendent jurisdiction, ancillary jurisdiction
- Note, while court has the power to expand a claim because of supplemental jurisdiction, it is not
required to do so in cases with related claims.
United Mine Workers v. Gibbs 383 US 715 (1966) Brennan
- labor dispute b/w union and supervisor regarding opening of a mine
- Gibbs claimed that the union workers violated both federal and a state law.
- He sued in Federal court on the basis of SMJ on the federal Labor Management Relations Act
- Problem, the federal court had no independant basis for jurisdiction for the state law claim.
- Court‘s test: Did both claims arise out of one set of facts? Here, yes.
- Court held that the federal court had ―pendant‖ (supplemental jurisdiction) over the state law claim
because the claim was properly joined with the federal law claim
- But, court also set a second step. While the court has the power to extend jurisdiction in claims which
arise out of the same set of facts, it must make sense to do so. [discretionary power given to judges]
28 USC §1367 (1990)
first time statutuory basis for ―supplemental jurisdiction‖
(a) claims that are so related to the cases and controversies listed in Article III of C may be tried in fed ct,
including claims involving the joinder or intervention of additional parties. (essentially same as Gibbs)
- this provision is very broad, grants a great deal of power to court in expanding jurisdiction
(b) exception to (a): jurisdiction shall not be extended to certain claims in diversity cases,
- motivation: to preserve the perfect diversity rule.
(c) court has discretionary authority to decline supp‘l jurisdiction (same as second Gibbs holding)
- This is a recourse for who objects to the ‘s choice of forum, when the has chosen a state court
and the believes it to be the sort of case which ought to be tried in a federal court.
- Once removed, the case b/cs a federal case
- Rationale: both parties ought to have a choice in choosing to have case tried in fed court if they want.
- A case can be removed only if it could have been heard originally in fed court had brought suit there
- Possible to remove from state ct to fed ct,
- not possible to go from fed ct to state court, or from one state to another state.
- if a case that is removed has related claims as well (ie, a state claim) removal applies to the entire case,
not just the federal claims.
28 USC §1441
(a) any case brought up in state court over which fed ct had originial juris may be removed to fed ct
by defendant to district near where action is pending
(b) diversity case is only removable if ―none of the parties in interest properly joined and served as s is a
citizen of the State in which such action is brought.‖
- ie, if a is served in his home state, he may not move on the basis of diversity (does not need
―protection‖ in his home state)
§1446(a): once removal has occurred, the entire case is moved to fed court, including the complaints and
answers. Note, Removal can be done w/o hearing. has 30 days to file a motion to remand.
§1447(b): fed. court may order the parties to file discovery and other such materials with the state court.
Williams v. Huron Valley School District 858 F. Supp. 97 (E.D. Mich. 1994)
- = teacher. Wanted a vacation for religious holiday
- Had both state complaints and fed complaints
- wanted to remove to fed ct. State court granted removal to federal distict court.
- tried to remand case back to state court, claiming that her state claims predominate.
- Ct. held that the case was not remandable b/s it was propery removed.
- no predominance of state issues is immaterial
Powell v. Zoning Board of Appeals of the City of Chicago 1994 U.S. Dist. LEXIS 4772 (ND Il. 1994)
- removed to federal court based on §1441, claiming that ‘s CA brought forward federal issues (DP)
- sought to remand case back to state court
- the case was improperly removed because it was not clear that there were substantive federal issues in
the original complaint. (lack of SMJ)
- Purpose of venue is to provide a third limit on where can bring suit against
- venue often mirrors PJ statutes. Why have both? Technical answer: venue often narrows location of
trial not just to state but also to fed. district w/in a state.
- States have own statutes regarding venue
- Federal Venue Statute: 28 U.S. §1391 (since 1990) note venue is with respect to judicial districts,
not states (thus, it is necessary for determination of forum within state)
§1391 (a) Venue in Diversity case is where resides, where a substantial part of events took
place, where the property in question is located, or where is subject to PJ (if no other district in
which action may be brought)
§1391 (b) All other federal question cases: same provisions except with respect to italicized
provision: where may be found. [note, both of these provisions are considered fallbacks for
when there is no district anywhere in the US that would be a proper venue with respect to the first
§1391 (c) ―Residence‖ of corporations = to that which it would have for PJ purposes
Exceptions to the General Venue Rule:
- Venue is waivable like PJ (note, many contracts cases have ―forum selection clauses‖)
- Local Action Rule: cases where title of land in question must be brought where the property exists.
- It is possible to decline jurisdiction as a discretionary matter. Possible reasons: justice and efficiency,
§1404 Change of Venue:
(a), ―for the convenience of parties and witnesses, in the interest of justice a district court may
transfer any civil action to any other district....‖
ie, if local prejudice is evident, or a isabled witness would have to travel too great a distance.
General notes on topics discussed so far pose a proper stage for the old argument:
Argument for Strong national government:
1. national gov‘t derives power from people, not states.
2. Amendments to Const (13th, 14th, etc) reiterated the fact that states do no precede the Constitution
3. Letting states play an important role in legal regime can lead to the development of factions.
4. States not very able to redistribute wealth
5. States are less able to protect civil rights of US citizens.
Argument for Weak national government:
1. structure of Constitution itself reveals a strong role for states Republic form of gov‘t
2. federalism is desirable b/s
a. competition b/w states lead to better nat‘l gov‘t
b. laboratories for experimentation in gov‘t and public services with 50 states
3. Decentralized gov‘t is better for understanding local needs.
With respect to
- Pennoyer v Neff: states rights upheld
- International Shoe: commitment to stronger nati‘l gov‘t.
- WWVolkswagon: in quoting Hanson p.19, court took a turn for federalism
- Limitation of Rule 4(k), restricts reach of federal courts
Subject Matter Jurisdiction (even more illustrative of the conflict)
- federal jurisisdiction is limited in nature. Must justify existance in fed court at outset. This is a
recognition of state soveriegnty
- Mottely, Strawbridge: courts took care in preserving federalism
- Not concerned with these issues
- Main concern is convenience
- Supreme court has not really paid it much attention
Note, redistribution is a value of civil procedure that is dealt with more easily at the national level.
Erie Problem is very illustrative of this dichotomy
Verticle Verticle The Erie Problem
- we won‘t discuss this here 1. Statutory
- asks whether state or federal law a. Scope (Erie)
applies b Application
(Screening test for a clear fed. procedure) Hanna
1. bound up test Byrd
2. outcome-determinitive test Guarantee
3. balancing tests Byrd
- civil lawsuits concerning several In fed court but must figure out which state‘s laws come into
state laws (conflict of laws ) not play. Klaxon Co. v. Stentor (the state in which the facts from
our concern here either which the claim arose occured).
THE ERIE PROBLEM
When a federal court adjudicates a diversity case, where does it look to for sources of law?
- 28 USC §1652 ―State Laws as Rules of Decision‖: when a state case is tried in district court, the law
of that state will be upheld
Swift v. Tyson, 41 US 1 (1841) [overruled by Erie] J. Story
- F: Diversity case regarding a bill of exchange (contract/check) filed in a NY federal district court.
- LQ: Was federal court bound by NY common law?
- H: No, court must look to general legal principles (although statutory laws of state do apply)
Historical background following Swift:
- Swift‘s General Legal Principles Rule was used in subsequent years to promote business (pre-Lochner
era,), which the states did not like (―corporate interests over agrarian or workingman‘s interests‖)
Erie Railroad v. Tompkins 304 US 64 (1938) p. 247 Brandeis
- Tompkins‘ arm severed under Erie RR train in Pennsylvania.
- Brought suit in a federal district court in NY
- RR lawyer argued that Penn. law should govern since that is where accident happened.
- Instead, judge ruled based on ―general law,‖ and Tompkins was awarded damages.
- RR appealed. 2nd Circuit upheld verdict.
- Issue before the court is Federal Judiciary Act of 1789 §34 [today 28 USC §1652]
- This law has misapplied since its conception, especially in Swift
- The true purpose of the statute is to ensure that written and unwritten laws of the states are upheld in
federal district courts in their jurisdiction.
- The Swift doctrine has resulted in a lack of conformity/confusion, and has allowed disrimination
against citizens of the state by having their laws superceded by the ―general law‖
- There is no such thing as federal common law
- Holding = reinterpretation of §34, overruled Swift
- Most imp. Issue in Erie = statutory construction: Scope of §1652
The Aftermath of Erie:
- Application problem: how do federal courts go about incorporating state common law in its decisions
when the state common law itself is unclear?
- What about cases which do not deal with substantive law, but procedural law? (Problem in Erie = tort)
- In most cases, of course, substantive law is at issue, not procedural law.
- Erie gives hints on scope, but not application
- Two opposing principles/tensions in these cases:
1. deference to state courts as lawmaking bodies
2. autonomy of an independent judicial system
Which States‘ law?
Klaxon v. Stentor Elec. Mfg. Co. 313 US 487 (1941) p.258
- While Erie did state that state laws ought to control in diversity cases, it did not specify which state‘s
laws ought to apply.
- This court applied Erie‘s principles to conflict rules in a tort action the laws of the state in which the
accident took place ought to apply.
Interpreting the Constitutional Command of Erie....
- Guaranty Trust Co. v. York 326 US 99 (1945) Frankfurter Outcome-determinative test
- diversity case in fed court regarding NY substantive law.
- argued that there was a NY statute of limitations barring ‘s action
- district and appellate courts did not uphold the statute of limitations.
- NY statute of limitations is valid in federal court
- ―substantive‖ and ―procedural‖ laws of a state are not two separate entities
- The essence of Erie is that in all diversity cases, the outcome should be the same as if it had been tried
in state ct.
- Outcome-determinative test established
- In the decade after Guaranty Trust, Sup Ct was very much in favor of the upholding of state‘s
procedural and substantive laws in the face of opposing fed. laws.
- outcome determinitive test answered the substance/procedural question
- Further problem created though: Defining the scope of ―outcome determinitive.‖ (what isn‘t ―outcome
determinitive‖ on some level?)
- Outcome test is function oriented, but it can undermine the entire point of having diversity cases tried
in federal court
Byrd v. Blue Ridge Rural Electric Cooperative 356 US 525 (1958) Brennan p.267
- diversity case: , who had been hired by an independent contractor, was injured while on ‘s site.
- [Substantive Issue = whether or not SC‘s workman‘s compensation policies ought to apply to ]
- LQ re: Procedural Issue before the court = who is the fact finder? In federal court, it is done by jury as
mandated by the 7th Am. However, in SC, when the issue is workman‘s comp, the judge is the fact
finder (as decided in Adams v. Davison-Paxon Co.)
- If the case‘s outcome would be drastically effected by whether or not a judge or jury decided on the
immunity issue, then federal court ought to decide based on state law; t/4 outcome determinitive test.
- However, because there is not a strong certainty that outcome would be different in this case, the court
held that the state law need not necessarily govern.
- The court added to the outcome test 2 other considerations.
1. Balancing test: compare the policies of state and federal law. That which is more compelling controls
In this case, the federal rule was compelling b/s of 7 th Am (Constitutional rule more compelling)
2. Bound Up test:. if the procedural rule is so bound up with that state‘s laws so that for all intents and
purposes, it is substantive, then it should be followed.
In this case, not.
Hanna v. Plumer 380 US 460 (1965) CJ Warren
- diversity case re: automobile accident in SC
- Procedural issue in question = service of process
- process was served to ‘s wife, in accordance with Rule 4, but Mass. rules required that the actually
- the outcome determinitive test also does not apply here
- he fed rules of civil procedure were not invalidated by Erie
Harlan‘s concurring opinion in Hanna:
- Erie has been misused/misinterpreted it does not discuss forum shopping
- Harlan sees the screening test as a psuedo-bright-line test: some state rules can be ignored in diversity
merely b/s there is a definitive federal procedural rule in its place.
- 1st contribution of Hanna: a clarification of the outcome determinitive test: ―it was never supposed to
serve as a talisman.‖ Byrd. Outcome determinitive test was to deter a.) forum shopping and b.)
inequitable administration of justice
- 2nd contribution of Hanna: screening test if there is a clear fed procedure enacted by the Rules
Enabling Act (ie FRCP) no need to inquire about state procedural law. Only if there is not a clear
federal procedure, go forward with test as set by Guaranty and Byrd
After Hanna, it b/c very easy to find a fed rule to override a state one: simply had to find one.
A. cases where courts expansively applied Hanna doctrine: Courts applied very broadly a very narrow
federal rule, thus displacing a contrary state law.
1. Burlington Northern Railroad v. Woods, 480 U.S. 1 (1987)
- Alabama state law penalized a party who lost case in appellate court 10%, but a federal law would
only impose such a felony on ―frivolous‖ appeals (App Pro. Rule 38)
- H: even though the fed law was silent on nonfrivolous cases, the court took its silence to mean
that the state law which was explicit in its treatment of nonfrivolous statements should not have
2. Stewart Organization, Inc. v. Ricoh, 487 U.S. 22, (1988)
- Suit arose in Alabama district court
- 28 U.S.C. §1404 (a) in question, allowing for transfer of district court to any other district in the
interest of justice and/or convenience.
- Contract b/w parties had a forum selection clause which limited litigation to Manhattan.
- H: §1404 (a) controlled, although, the district court was allowed to consider the forum-selection
clause (state-controlled) as a factor in making its decision regarding venue.
- Note: Ricoh may be construed to lead back to Swift, because it upholds not a strictly constructed
fed statute over state law, but it uphold a broad interpretation of a fed law over a state law. (A
―broad interpretation‖ is not a far stretch from ―general legal principles‖)
On the other hand....
B. Cases where SC did not broadly interpret a fed rule to control over state law
1. Ragan v. Merchant‘s Transfer Co and Walker v. Armco Steel Corp.
- For the purposes of statute of limitations, state law held that a suit was commenced when process was
served and Fed Rule 3 said that it was commenced by filing complaint with court (although the Rule
said nothing about the statute of limitations).
- outcome-determinitive? ―yes‖ b/s issue = statue of limitations.
- Walker said that the ct should respect the rule‘s ―plain meaning‖: ie, we can derive that the court did
not think that the plain meaning of Rule 3 was that the statute of lim had been satisfied. It does seem
to be a stretch to say so, since there is no language regarding statutes of limitations in Rule 3.
- SC did not reverse Ragan and upheld the state‘s control in determining when statute of lim runs out.
Problems with Erie still remaining: Determining the Scope of State Law
1. What if state law itself is unclear?
2. What if conflicting precedent within the state?
3. What if federal judges not familiar with particularities of state laws?
4. What if horizontal choice of law?
Note: What a federal court does does not even matter since state courts are not obligated to follow a
federal court‘s precedent..
quip! p.289: J. Friendly of 2nd Cir, ―Our principal task... is to determine what the NY courts would think
the Cali courts would think on an issue about which neither has thought‖
1. Certification: federal court asks state supreme court a Question re: state law. On the other hand, this
method is not fulproof, as illustrated in Clay v. Sun Ins Office where court stated that it could not
decide on state law matters without the benefit of litigation before them (ie, it is very difficult to
answer questions out of context)
2. Abstention from deciding cases under ―special circumstances‖: federal court can refuse to have to
decide a matter based on state law if it deems to be so uncertain that a misinterpretation of it would be
drastic. see England v. Louisiana State Board of Medical Examiners
Concluding note (surprise #2):
§34 of Judicairy act not the same thing as §1652
- change made in codification in 1938
- codifiers took out ―trial at common law‖ and replaced with ―civil action‖
- ―trial at common law‖ meant to refer to a criminal, not civil law, according to Willard Fitz
Substitutionary Specific Declararatory
Post-Judgement Damages Injunctions Declaratory Judgment
Pre-Judgement Attachment Preliminary Injunction None
(―interlocutory‖) Garnishment Temp. Restraining Order
Remedies: what courts can do for litigants. Remedies aim to cure a legal harm
Why Litigate? To enlist gov‘t to intervene on your side
- Less than 5% of civil actions end up in trial due to bargaining and settlement.
- Determining the value on the case (first step of bargaining process):
- Case Value = average verdict times probability of getting that verdict plus/minus cost
CV = AV x P +/- C
seek to restore reasonable substitute. Most common method b/s it often seeks money damages.
Measurement difficult, t/4 often a market-oriented model of damages is used
General damages: measurement based on market
Specific damages: measurement is subjective (personal injury, items of sentimental value)
perfect remedy: (which assesses value of lost property with respect to individual ) is often not
applied b/s it is very difficult to determine it.
US v. Hatahley (10th Cir. 1958)
- Navajo tribe sued fed. gov‘t for destroying its horses, which were grazing on federal land
- Dist. Ct judge calculated damages at $186,017.50
- Appeal on question of damages only
1. Loss of horses: Trial court considered these horses to fall under ―specific damages‖ category and set
their price at $395 each. Error Appellate court held that market value is sufficient here. T/4
―Replacement value‖ is equivalent to ―market value‖
2. diminished number of cattle and livestock due to lack of horses: Trial judge gave half the value of the
cattle in compensation for the loss of the cattle. Error = failure of prove lost profits. would have
had to prove with certainty that the gov‘t was the proximate cause of the loss of the cattle (did not) and
that they tried to mitigate damages (ie tried to replace the horses/cattle).
3. Emotional Stress to the loss of the horses: Trial court granted $3500 per plaintiff. Error = did not
prove the emotional stress for any of the tribe members individually
- Rule from this case: must be able to accurately prove remedy in order to recover
- predetermined in a contract in case of breach
- UCC §2-728(1) states that damages must be reasonable
- money added on to compensatory damages to discourage from ever doing that act again.
- Must be an intentional tort/breach
- Often, the ‘s net worth is brought up
- often used against foreigners. ex BMW v. Gore (US 1996). $3000+ awarded in compensatory
damages, and $4,000,000 in punitives. Sup Ct. overturned to put a stop to this arbitrary practice.
However, Sup Ct did not set a method for setting limits.
seek to restore exact thing taken from . Often impossible to provide.
derived from equity tradition
Enforced by contempt proceedings
- injunction: Req‘t on other side to take certain acts or to refrain from doing certain acts.
- Replevin - recover personal personal property
- constructive trust - regain funds wrongfully diverted
- rescission or cancellation of a contract
- contract reformed to meet the true expectations of the parties
- accounting - ordered to determine what is owed
- quiet title, remove clouds from the title: re: ownership of land
- ejectment – recover land wrongfully in possession of another
- writ of mandamus – court orders lower court or public official to perform an act
- habeas corpus- same
Sigma Chemical Co. v. Harris 605 F. Supp. 1253 (1985) Two test to determine if remedy = proper
- had a contract with his employer, , that had a clause stating that he could not work for any of the
‘s competitors for two years after working at Sigma, and could never divulge confidential
information acquired at Sigma
- broke the provision of the contract and began to work for a competing company
- Sigma sued for a specific remedy: an injunction to stop from working for the competitor
- sufficiently demonstrates by virtue of both prerequisite tests that an injunctively remedy is the
proper remedy in this case.
1. Adequacy test: must prove that no adequate legal ($$) remedy will suffice.
a.k.a. Remedial Heirarchy between subsitutionary and specific remedies
- Here, damages for lost confidential information are very speculative, t/4 difficult to prove. satisfies
the adequacy test.
2. Balancing test: in deciding whether to grant a specific remedy, the court must balance the harship on
the if relief is denied against that hardship on the if relief is granted.
- would be barred from working at the competitors for only a short time. Moreover, other Sigma ex-
employees do not seem to have had trouble procuring other employment
- court declares the rights of the parties
- Federal Declaratory Judgment Act, 28 USC Ch. 151
- §2201: Creation of Remedy: relief may be granted in the form of declared rights and or legal relations
of any interested party whether or not any further relief is sought
- §2202: Further Relief (can be granted based on declaratory relief)
- Rule 57 (same as §2201)
- most often sought in insurance or patent litigation
- controvertial b/s harm has not happened yet. Often based on hypothetical situation. Article III limits
federal cases to ―actual‖ cases
- “relief pending final adjudication of the dispute‖
- Sometimes court takes too long to provide a sufficient remedy (av.in fed ct = 1.5 yers, longer in state)
- Ex. interest in monetary issues, battered wives, small business threatened with bankrupcy
- Problems w/ PR‘s: often based on incomplete info, too quickly decided, t/4 possible violation of DP
- Effect of PR‘s: Often, after ―preliminary injunction‖ has been issued, then the procedings are finished.
No need necessarily to go to trial
- Historical Note: Note, Preliminary Injunctions were used very often during the Civil Rights
Movement in the South. It was abused by those against the movement since they could take their
preliminary injunction requests before a lower level judge and have it adjudicated very quickly.
Moreover, injunctions are enforced by contempt power, t/4 court can put noncompliant party in jail (or
Substitutionary Provisional Remedies (Rule 64):
1. attachment: seizure of property
2. garnishment: asking 3rd party to pay on ‘s behalf to (ex. ‘s bank or employer)
Specific Provisional Remedies (Rule 65):
1. prelim injunction:
2. Temporary Restraining Order: usually no participation by other side
3. Replevin: getting back Personal Property that party has a right to
4. Sequestration: basically same as replevin
Rule 64: Seizure of Person or Property
- lists remedies available at the commencement of an during the course of an action: arrest, attachment,
garnishment, replevin, sequestration, etc.
Rule 65: Injunctions (see Mitchell case basically sets up procedure for issuing of PI‘s)
- Injunctions follow the federal tradition which has its roots in equity.
- Preliminary injunctions are ―interlocutory‖, meaning b/4 final adjudication of the first trial
- one latent purpose of this is to change the bargaining relationship of the parties b/4 the hearing
- (a) Preliminary Injunctions
(1) Notice required to be given to adverse party
(2) Hearing for PI application can be consolidated with a hearing on the merits of the case
- Note: in granting Pi‘s, the judge must still consider Adequacy test, Balancing of Hardship test (both
explained in Sigma) and whether the case would have a fair chance of winning (Inglis)
- (b) Temporary Restraining Order
- Notice does not necessarily need to be given (see 1966 Amendments) But, counsel for must
explain why the other side is not there (must at least have tried to get in touch with other side).
- TRO is an emergency injunction. Much more substantial. Rule Drafters feared that this was
almost a violation of DP (but a necessary evil).
- TRO without notice is good for 10 days of relief. Until you can get other side there. [at which
point it b/cs a mere PI]
Requirements for Provisional Remedies:
- Affidavids, sworn statements, brief or memo of law arguing irreparable harm and the merits of the case
- posting of security bond
Broad granting of provisional relief....
William Inglis & Sons Baking Co. v. ITT Continental Baking Co. 526 F.2d 86 (9th Cir. 1976)
- filed antitrust action against s for discriminatory and below-cost pricing and moved for a
- District Court reviewed briefs and cost studies on the matter and denied the preliminary injunction b/s
it did not feel that would win the future case.
- court found for because it determined that lower court has used too strict a test in determining
whether injunctive relief was appropriate
- The appellate court held that reasonable certainty of the merits of the case are not mandatory, just that
there is a ―fair chance‖ of success on its merits.
- The test adopted by court could very possibly result in an injunction every time.
Provisional Remedies are subject to Due Process:
Fuentes v. Shevin 407 U.S. 67 (1972) Stewart
- dispute involved a stereo and a stove that was in possession of , but for which she had not completed
- writ of replevin used in FL and PA to seize goods and chattle.
- the application process: pre-written form filled in by claimant. Granted by clerk.
- Problems: no notice given to current owner of the property, and no challenge opportunity (hearing)
- the repossessor can forcibly reclaim chattel from the current possessor
- Only recourse for possessor at this point is to order w/in 3 days his own replevin with a bond at double
the value of the good
- LQ: Do the FL and PA replevin statutes violate DP? Yes.
- Fundamental values at stake here: freedom from arbitrary encroachment, unfair deprivation of
property, freedom from governmental interference, two-sided system of determining fact
- It is unimportant that appellants did not actually have full title of the goods , a temporary, non-final
deprivation is still a deprivation
- Exceptions to notice and hearing requirement:
1. Directly necessary to secure an important gov‘t or general public interest
2. Special need for a prompt action
3. Gov‘t official initiated such an action
- ex: wartime, pending economic failure, public health
- this prejudgment replevin violates DP b/s of lack of notice and denial of an opportunity for hearing
(only a TRO may do that and only for 10 days)
Similar case as Fuentes, decided differently
Mitchell v. W.T. Grant Co. 416 U.S. 600 (1974)
- Louisiana law in question upheld because SC found it distinct from Fuentes
Differences (more judicial supervision of sequestration process):
1. judge issued the order, not clerk
2. more details req‘d in affidavit
3. immediate post-seizure hearing
4. damages for wrongful sequestration
- This case set the precedent for the proper procedure required in preliminary injunction remedies
- This is essentially the same as the procedure in Rule 65
- court fees, nonlawyers who perform service, lawyers
- The American Rule: each party pays for own legal fees why lawsuits are so expensive and the
reason why both parties can save money by settling
- The English Rule: losing party pays for both parties
- No constitutional provision for mandatory counsel in America
- ―retainer letter‖- client pays lawyer a deposit fee and continues to pay for expenses at an hourly rate
- ―flat rates‖ – used in common procedures, like wills, that lawyer knows the amount of work involved
- ―contingency fee‖ – lawyer gets paid thru proceeds of settlement or recovery. Risk-free lawsuit! P.I.
Fees for winning are extremely high in order to offset the amount the lawyers lose in losing cases. Can
look at this system as insurance, credit system, or a partnership b/w client and attorney. One problem:
negative incentives Incentive to settle and a tendancy to overwork a case
- Indemnity insurance means that insurance company will furnish counsel but the attorney will chose the
lawyer who litigates
- liability policy will pay for defense costs but not plaintiff costs
The Psychology of the process
1. Psychology of the process
2. Efficiency of the process
3. Political aspects of the process
These factors are to be considered in assessing our legal system
increasing 3rd party control
bargaining mediation arbitration parental model
& court system
result of FRCP
Background behind the Fed. rules of CP
- Pre-Revolution: The Chancelor of Equity was always appointed by King; no jury sat on trials.
- After Revolution: no equity courts as a reaction to the King‘s methods
- Prior to 1938, each federal district court followed the civil procedure of state in which it sat
- 1935: Congress delegated authority to the SC to appoint an Advisory Committee of experts to put
together a series of uniform rules.
- 1938. Rules Enabling Act. New rules came into practice.
- The rules were a result of the New Deal and are consistent with its ideology:
1. Expertise: small body of experts to determine rules. Worked in secrecy, no publicity
2. Centralization: like the centralization of the welfare system.
3. Social Reform: The Rule writers wanted social reform in court system, intending to change the
social position of citizens, ex. class action rule, pleading case, enjoinders
- 1956, the SC abolished the Advisory Committee
- 1958, Congress appointed its own Rules Committee to work on amendments for the rules. The
committee consisted of CJ of SC and some other judges. Rules Committee still exists today
1. INVOCATION LAW
2. RELATION FACT
- This is the process in which a citizen brings forward his concerns regarding some violation of
substantive law (invocation of authority) which relates to the facts of his circumstances (relation of
- Problem at this stage: what is the minimum that the claimant must present to court in order to initiate
Three stages of Pleading:
1. Common law pleading approach: Single issue identified: writs, etc.
2. Fact pleading/code pleading: lots of facts written down, judge can infer the relevant law (this is
still California‘s solution)
3. Notice pleading/federal solution: Rules Drafters adopted this in 1938 the rationale behind it
was to give ―notice‖ to the other side of the moving party‘s intentions. This is the current standard.
[Note, it is a nod towards s who cannot afford lawyers who can draft articulate pleadings.
Remember goals of FPCP. This change by the Rules was one of the most controvertial things
about the FRCP]
Federal solution: Rule 8(A) leading case construing the rule: Conley v. Gibson 355 US 41 (1957):
1. Rule 8(a)(1): ―short and plain statement‖ on grounds upon which court‘s jurisdiction
2. Rule 8(a)(2): ―short and plain statement of the claim showing that the pleader is entitled
to relief.‖ (the Rules Drafters invented this idea of ―stating a claim‖ because they
wanted to avoid the common law problems of having ―facts‖ as the focus). ―notice
pleading‖ is ok.
Guidelines for a ―statement of claim‖
- can use the forms provided by the Rules Drafters
- Does not have to be all encompassing: A ―claim‖ cannot be dismissed ―unless it
appears beyond doubt that the can prove no set of facts in support of his claim that
would entitle him to relief.‖ Conley v. Gibson
- The bar defining ―pleading‖ is set very low does not have to be too clear at this
stage (Exception Rule 9 and 42 USC §1983 see disfavored claims)
3. Rule 8(a)(3) Demand of judgment for the relief the pleader seeks
What the actual pleading ought to contain:
Rule 10: Form of Pleadings
(a) Caption; names of parties
(b) Paragraphs; separate statements
(c) Adoption by Referenece; Exhibits
In actuality, attorney‘s borrow from Code pleading, then sum up by relating to a body of law.
Normally, a lot more is included in pleading than is required by law, b/s pleadin has 2 imp. audiences.
1. Judge: complaint lets you tell court why you should prevail. Merely using the forms provided
may get case before bench, but it will not impress the judge. (there is a risk that you might run
into a judge like the one in Duncan)
2. other side: let them know that you know that you are a force to be taken seriously
Case which set the lower pleading standard which was later clarified by Conley
DiGuardi v. Durning (2nd Cir 1944) Judge Clark
- the pleading of the before the court was practically nonsensical and was not written in proper form
- district court dismissed the claim
- Appellate court reversed, b/s however inartistically worded, it was possible to tell that had a
- Rationale/value: It is unfair to deny his day in court.
- Holding: pleadings requirements = a general statement of the facts
2 cases in which court reverted back to fact pleading standard (note: these are the exceptions):
1. California Appellate Court
People ex rel. Dept. of Transportation v. Superior Court (5 Cal. App. 1992) p. 395
- ‗check-a-box‘ complaint: Pleading on a pre-written form on which checks which ―counts‖apply
- complaint re: traffic accident
- problem with check a box form = too little space in which to describe the ―premises and circumstances
of injury‖. Thus, the pleading was found to contain too little information
- demurrer of trial court upheld because had failed to plead facts which would lead to elements of
cause of action
2. Federal Court also reverted back to standard of fact/code pleading:
Duncan v. AT&T Communications, Inc. 668 F. Supp. 232 (S.D.N.Y. 1987)
- Duncan: worked for AT&T. injured on job. Disabled
- Filed suit in federal court, alleging action based on 28 USC 1981 (racial discrimination, etc)
- Lower court dismissed the complaint, and the appellate court (here) upheld the decision
- Why did the complaint fail?
- The complaint so poorly composed that it was functionally illegible (grammatically and functionally)
- Moreover, with respect to elements of 1981, had not pleaded how 3 of the elements related to the
facts of her case
1. failed to plead that she was a memeber of a minority group
2. qualified and applied for job.
3. ATT kept the job offer open to others after her.
- Conley v. Gibson court would probably not have dismissed the case at the pleading stage because it
was still possible to determine what the complaint is about
Challenging Pleading :
Rule 12(b)(6): a motion made by to dismiss ‘s claim for failure to state a complaint
- courts rarely grant this b/s pleading standard is set so low
Sanctions for failure to plead correctly
Rule 11 Signing of Pleadings, Motions, and Other Paper; Representations to Court, Sanctions
- 11(b) Representations to Court: in essense: ―You are signing these things which you are representing‖
- 11(c)(1): if a party wants to invoke a Rule 11 motion, must give other side notice, and then other side
has 21 days to think about it b/4 giving it back to court
- Controversy surrounding Rule 11 is reflective of all controversies b/w Haves and Have Nots
- 3 Historical stages of Rule 11:
New Deal era:
- Rule 11 a joke b/s it was never enforced and was unenforceable
- If judges found that the party had a pure heart and good conscience, that was sufficient.
- Very beneficial to class (door opened to anyone who had a claim, basically)
- Rule 11 got more strength, even main thrust of the change was to affect Rule 8(A)(2)
- the subjective standard changed to an objective standard.
- Good Heart rule exchanged for the Reasonable Person rule
- Unreasonable mistakes in pleadings were to be sanctioned mandatorily
- more than 1000 Rule 11 cases from1983-89. Tons of controversy
- Huge benefits to class. ‘s now have to do more work in the pleading stage
- Some adjustments made on behalf of the class
- controvertial, went to Congress
- Compromise in these amendments: An amendment to Rule 26 (Discovery) was meant to placate
class. [Rule 26(a): as soon a files complaint, must lay down defenses on the table]
Business Guides v. Chromatic Communications Enterprises 498 U.S. 533 (1991)
- BG = publisher of business directories
- ―seed‖ method of discovering copyright infringement by competitors (mistakes purposefully planted)
- the found 10 seeds found in ‘s book
- made a motion for a TRO for competitor‘s book
- When court went to test the seeds found that 9/10 were in fact correct.
- had not properly checked the facts that they were alleging
- Holding: failure to properly investigate the facts. Rule 11(B)(3) violated (that the allegations in the
pleading have evidentiary support)
Gerbode v. Religous Technology Center Calif 1994
- alleged that was guilty of mail fraud and wire fraud
- claimed RICO violation
- said there was no valid authority for invoking RICO Statute (has to do with organized crime) in this
case, which had to do with a non-profit organization.
- Holding: failure to properly investigate the law. Rule 11(B)(2) violated (the claims herein are
warranted by existing law)
- Rule 9(b) claims of fraud, and mistake, the circumstances shall be stated with particularity. Malice,
intent, knowledge, and other condition of mind of a person may be averred generally.
- part of 1983 compromise with Rule 11 to close slightly Rule 8(a)(2)‘s ―open door policy‖
- Rule 9(b) is internally inconsistent, to prove fraud or mistake must give concrete examples, but can
plead malice intent, scienter generally (how to do this w/o specific examples usually one needs to
get to discovery stage before getting concreted examples of fraud)
DiLeo v. Ernst & Young 7th Cir (1990)
- brought class action case against , alleging Securities and Exchange violation
- Court found that the few examples that provided did not amount to a single concrete example
- Rule 9(b) violated
2. Civil Rights
42 USC §1983
Gomez v. Toledo 446 US 635 (1980) J. T. Marshall
- if there is going to be a good faith defense against a §1983 claim, then the must prove in his
affirmative defense that he is immune
- Balance tipped in the favor of
- J. Marshall would definitely not have changed pleading req‘s in order to make it tougher for someone
with a civil rights complaint to plead a case
Elliot v. Perez 751 F.2d 1472 (5th Cir 1985)
- §1983 claims against individual officials require a more specific pleading (like allegations of fraud)
- Gomez (US 1980), SC decided that at the pleading stage of §1983 claim, must use good faith to
show that he is immune (this would be an immunity defense)
- Nevertheless, in Elliot, SC said that had to anticipate what would say and respond, ie, he must in
advance explain why a good faith defense is not justified.
- Tremendous burden placed on
- Elliot case can be seen as an avoidance of Gomez
Leatherman v. Tarrant County Narcotics Unit 113 S.Ct. 1160 (1993)
- Recalled Rule 8(a)(2) requirements
- Held that a more specific pleading requirement in civil rights cases was unjustified
- Reinvoked Conley: the rules require is a mere short statement, not an anticipation of the ‘s pleading.
- Leatherman can be seen as a refutation of Elliot
Schultea v. Wood 47 F.3d 1427 (5th Cir 1995)
- raised a 12(b)(6) motion in a §1983 case
- issue: had Leatherman changed Elliot?
- Somewhat, because no longer has to anticipate an immunity defense (this is not in keeping with
Elliot) , but he still must make more than a short and plain statement (refutation of Leatherman).
- When a public official pleads the affirmative defense of qualified immunity, the district court may,
require the to reply to that defense
- No longer will the be required to fully anticipate the defense in his complaint at the risk of a
12(b)(6) dismissal, will only have to reply to one.
- Procedural result: In a §1983 suit, makes a more than short and plain statement of claims, to which
can respond with an immunity affirmative defense. If he does, must them file a tailored answer to
- Shultea as an avoidance of Leatherman
Note, this section illustrates that Substantive law must be integrated with procedural law
The at Pleading Stage
Must register concerns at pleading stage or else they will be considered admissions. Rule 8(d)
1. Motion. Rule 12(b): 3 parts to it:
a. Motion: Seven Defenses:
1. lack of SMJ
2. lack of PJ*
3. improper venue*
4. insufficency of process*
5. insufficiency of service of process*
6. failure to state a claim
7. failure to join a party under Rule 19
* these 4 defenses have to be made at the first opportunity Rule 12(h)(1)
b. Affidavit: if facts state them
c. Brief: memorandum of your analysis
2. Answer (Rule 8 or 12). 5 possible choices persuant to Rule 8(b) [can be done in conjunction with other
motions that can be made]
1. Admit (non-retractable Case is over, unless amended)
3. Admit specifically, deny generally (very common)
4. Deny specifically, admit generally (very uncommon, never used)
5. Nonpositive denial: don‘t know enough to respond. Taken as a denial
Must make the right kind of answer:
Zielinski v. Philadelphia Piers, Inc.139 F. Supp. 408 (E.D. Pa. 1956)
- brought suit for accident involving ‘s alleged involvement with his forklift
- The forklift did not in fact belong to [ sued wrong party]
- However, denied generally. [He ought to have denied specifically.]
- Court struck the denial because responded incorrectly. Considered its incorrect response
as an admission Strict construction of Rule 8(b)
- The general denial is very attractive, but it is possible to go too far
3. Affirmative Defense (Rule 8(c)): even if ‘s claims are valid, ought to win
- must be made at pleading stage, cannot be brought up later:
Layman v Southwestern Bell Telephone Co. 554 S.W. 2d 477 (Mo. Ct. App. 1977)
- brought trespass suit against for putting underground telephone wire on his land w/o
- at trial, asserted an affirmative defense, saying hat said that they had easement (permission)
to be on the land
- Trial court found for b/s there was ―insufficient evidence to establish trespass‖
- On appeal, said that the easement claimed was in error, b/s it had not been in ‘s answer
originally (i.e., had not plead the affirmative defense at the proper time)
- H: App court agreed: trial court should not have allowed the evidence of easement at trial
4. Counterclaims (Rule 13): required at this point to bring forward any claims he may have against
which have risen out of the same transaction or occurances of the ‘s claims. A counterclaim could be
ensconced in an affirmative defense
- correcting mistakes, or bringing matters up to date
- It automatically superscedes original complaint
- Rule 15
(a) can amend pleading in any way at all up to 20 days merely by filing it
(c) After the 20 day period, if amendment does relate back, then, the amendment has to be
approved by judge, who will probably do a balancing test. If amendment does not relate back,
then it is subject to any applicable statute of limitations (i.e. by state)
―relate back‖ refers to ―the conduct, transaction, or occurrence set forth or attempted to be set
forth in the original pleading‖ Rule 15(c)(2)
amendment can not only change legal theory, but even party sued Rule 15(c)(3)
―leave [to amend] shall be freely given when justice so requires‖ meaning....
1. would-be amender had good reason for getting pleading wrong the first time
2. no ―prejudice‖: allowing the change would not hurt the other side too much
Illustration of prejudice issue (not found)
Beeck v. Aquaslide ‗N‘ Dive Corp. 562F.2d 537 (8th Cir. 1977) p.466
- was hurt on slide at company picnic. Sued slide manufacturer.
- At discovery, the admitted that the slide was one of theirs, and 3 witnesses (Insurance cos.) agreed
- Later, the president discovered that the slide was forged (2 years into the trial)
- moved leave to amend answer, asking that the judge to ―freely give‖ the amendment b/s it was an
honest mistake; court granted motion
- Court also granted ‘s motion for a new trial to determine proper manufacture of the slide
- At that trial, it was evident that the slide was not the ‘s,
- B/s this ―substantial issue of material fact‖ exonerated the , trial court dismissed the case
- Trial Court stated that to oppose amendment, burden on opposing party to show prejudice (rule)
- argued for prejudice, stating that the facts did not support ‘s case and statute of limitations had run
- Holding: ‘s arg with regards to prejudice were unfounded.
Illustration of statutes of limitation & relation back (did not relate back in this case)
Moore v. Baker 989 F.2d 1129 (11th Cir. 1993)
- signed consent form for a surgery to correct a blocked artery.
- The surgery went badly, and she was permanently disabled
- sued b/s did not advise her of alternate therapy, a violation of informed consent law
- move to amend complaint by adding allegations of medical malpractice
- claimed that the amendment did not relate back to original complaint. Trial Court agreed (ie,
allegations of medical malpractice did not relate back to allegations of failure to get informed consent
- since it did not relate back, it was subject to the statute of limitations of the state (here, the Ga. statute
of limitations turned out to be 20 days)
- the Ga. statute of limitations had run
Holding: would not be allowed at this point in time to amend the claim
Amendment did relate back here:
Bonerb v. Richard J. Caron Foundation 159 F.R.D. 16 (W.D.N.Y. 1994)
- = patient at rehabilitation facility, brought suit against he facility
- Original complaint: negligence in providing an unsuitable basketball court (where was injured)
- Amended complaint : ―counseling malpractice‖
- Should be allowed to amend his complaint?
- The amendment relates back b/s both allegations are derived from the ―same nucleus of operative fact‖
- Leave to amend ought to be granted, unless three exceptions are met
1. Undue prejudice to party opposing amendment
2. Undue delay on part of party seeking the amendment (Rule 15c)
3. Bad Faith
- Holding: none of the exceptions were met, t/4 ‘s leave to amend was granted
10/15 See chart for today
d. Walker‘s experiment regarding how people care as much about process as they do about outcome.
e. 3 pleading responsibilities; the pleading model is controlled by the parties and their attornies.
f. policy implications of an argument can help argument
Summe of control???
(process and outcome)
g. Instrumental School: people are outcome maximizers, adn believe that one will do better is one
controls information base that goes into decision-making. Process control makes people happy.
―I lost, but I had a chance‖
h. Identity-based explanation: People construct a sense of their own self-worth based on how others view
them (social identity theorists). If they are pemitted to participate, if someone in authority listens to
them and seems to care and pays attention, then the real information that matters is not whether they
win or lose, but whether or not they are accepted by the institution. They will feel good b/s the are part
of the community even if they lose. Walker likes this explanation for the results of the experiment.
―I lost, but I was listened to‖ (this is more positive than ―I lost but I had a chance‖)
―cool out the mark‖: gamblers do this to make the people they swindle feel good about losing
Point: Civil Procedure involves values. The perceptions of the parties going through the process. In a
democratic society, if people are not satisfied with the system, they will find another way to resolve
- Rule 26(b)(1) -- scope of discovery : you may discover any matter not privileged and relevant.
- Information discovered will eventually be used to mee the production burden in the courtroom
Privilege Rule 26(b)(1)
- guided by Evidence rules called ―privilege rules‖, whose aims are to protect certain communications
not discoverable and inadmissable
- protects information with respect to source, not with respect to actual information
- ex. Att/client privilege, dr-patient, psych-patient
- privileges can be waived
Relevance Rule 26(b)(1): to be admissable, evidence must be relevant to subject matter of the case
Blank v Sullivan & Cromwell (1976)
- prospective female associates sued , alleging sexual discrimination in hiring
- Issue = relevance of questions in ‘s interrogatories asking re: advancement practices to
partnership with respect to the numbers of female and male partners, and their names, etc.)
- Trial court: questions irrelevant
- App court: reversed.
- Rationale: the answers to those questions may explain how female employees may be treated at
Steffan v. Cheney 920 F.2d. 74 (D.C. Cir. 1990)
- homosexual in navy constructively discharged based on his statement that he was a homosexual.
- ‘s suit questioned the constitutionality of being discharged because of his statment
- In the course of discovery, was asked if he actually engaged in homosexual activity
- Court held that questions regarding his homosexual activity were not relevant to the lawsuit
because the lawsuit was about the statement, not activity in which may have engaged.
- Secondary issue = privelege: answering question may have been self-incriminatory.
Procedures and Methods
- Rule 26(a)(1): other half of Rule 11 controversy
- Rule 26 is optional, unless local rule or parties have agreed to contrary, no national practice
- 26(a)(1) mandatory disclosure: w/in 10 days of initial conference, each must offer (w/o being asked)
the other side names of persons with relevant information, description/copies of relevant documents
and tangible evidence, calculation of damages, and copies of insurance policies
- 26(b) further discovery: interrogatories, depositions, requests for inspection of documents and physical
objects, requests for physical and mental exams, and admissions
- Possible Timeline:
1. ―appears‖ in the lawsuit, OR he is served via Rule 4(d)
2. parties to meet on own as soon as practicable and least 14 days b/4 ―scheduling conference‖, Rule
3. b/w 90-120 days from ‘s appearance, judge shall hold ―scheduling conference‖, Rule 16(b),
where discovery and pretrial matters are discussed
4. Either at this meeting or 10 days afterwards, parties must exchange disclosure lists, Rule 26(a)(1)
- Rule 26(g) general provision
- Rule 37 specific provision: from punitives to a default judgment for other side
Interrogatories, Rule 33:
- questions sent through mail. Series of written questions. Required to be answered/objected to
- Only parties are subject to these questions, Rule 36
- Not too costly, not too beneficial
- Lawyers do all the work: ask questions and answer them.
- Must seek permission of the court to ask more than 25 questions.
Depositions, Rule 30
- Subpeona, Rule 45(a)
- Must seek permission of court to request more than 10 total depositions, or deposing one witness more
- Beneficial b/s of possibility for spontaneous responses by witnesses, Cross-examination opportunity,
and b/s the questions are more specific.
- Problem Expensive (court reporter, transcribing, copies, etc. = $250-300 per hour).
- Depositions created by the Rules
- Rules of evidence still apply
Examining Things and People, Rules 34 & 35
- Rule 34: permits inspection of land and objects and documents of party to suit
- If want a document not from a party in suit, must issue subpeona, Rule 45(a)(1)(C)
- Rule 35: Physical and mental Exams of personsrequires ―good cause‖ and that the physical
condition is ―in controversy‖
- Rule 35(b): Report of Examiner: essential impartial information. Parties share it
Requests for Admissions, Rule 36
- like a pleading as well as a discovery rule
- sanctioned by Rule 37
- makes evidence irrelevant by taking the issue out of the controversy
- if time limit lapses before question is responded to, it counts as an admission
- Good only for the most obvious questions. ex, ―is the co. incorparated in Delaware?‖ ―Yes‖
- Scope of discovery goes beyond the scope of the rules of evidence, ex. hearsay allowed in discovery
- Solution: Protective orders ensuring nondisclosure of discovery, Rule 26(c) good cause required.
Seattle Times Co. v. Rhinehart 467 U.S. 20 (1984)
- Rhinehart brought suit against newspaper, for defamatory and untrue accounts of the Aquarian
religious group, for which he was a leader
- Rhinehart wanted to keep list of donors and financial papers of members from discovery for fear
of its publishing them in the newspaper
- Trial court granted the motion to compell discovery, but it also granted a protective order to keep
newspaper from disclosing said information. (good cause req‘t of 26(c) met)
- Seattle Times claimed violation of 1st Amendment
- SC Court held: 1st Am rights not violated by the protective order, for they would not even have
had the information without discovery
- Thus, since the newpaper received the information through discovery, then the same discovery
process can restrain it.
- Rule 35 (physical and mental examinations with respect to . implicitely waived his rights to be
tested since he is the initiator of the suit)
- The leading case Protecting Rule 35, but Enforcing its Limits:
Schlagenhauf v. Holder 379 U.S (1964) p.510
- LQ: is Rule 35 constitutional with respect to ‘s rights?
- examinations re: physical and mental condition of bus driver
- District court order 9 exams (5 more than actually asked for)
- Two internal checks in Rule 35: good cause, and physical condition must be in controversy
- Court held that there was good cause and controversy with respect to one of the the exams (eye
Privilege over Trial Preparation Material
- work product of attorney (physical work and mental impressions) made into an exception to Rule
26(b)(1) (judge made rule)
- 20 years after this case, this rule was incorporated into the Rules in 26(b)(3)
- an attorney‘s work product is discoverable only upon showing of.....
1. ―party seeking discovery has substantial need of the materials‖
2. ―party unable without undue hardship to obtaint he substantial equivalent of the materials‖
Hickman v. Taylor 329 U.S. 495 (1947)
- ‘s tug sank, and 5 of 9 crew members drowned
- ‘s attorney quickly interviewed the prospective plaintiffs and witnesses.
- During interrogatories, asked for these interviews. refused
- District Court ordered the interviews handed over. still refused.
- Court ordered ‘s attorney in jail for contempt
Work Product Issue:
- Two exceptions to mandatory sharing of work products 1. Substantial need 2. Harship or injustice
- Identity of the witnesses were well-known, and did not desprately need the interviews.
- T/4 the court held that the ‘s attorney‘s work product was privileged
- Secondary consideration: Opinions and mental impressions of the attorney and professional views
about the case are not discoverable
Concurring Opinion: Pragmatism
- can‘t ask lawyer to take the stand. The lawyer is not the same as a witness. Against his nature to act
Expert Information Rule 26(b)(4)
- expert = anyone who is distinguished by experience or education to give an Opinion to a jury
- other witnesses are only allowed to give Facts
- Four different types of experts
1. Retained and testifying expert [automatically discoverable. 26(a)(2)]
2. Retained expert (not testifying) [must show need through exceptional circumstances. 26(b)(4)(B)
note, will have to help pay for then, 26(b)(4)(C)]
3. Unretained expert (hypothetical situation presented to him for his opinion, ex. on phone)
[notgoverned by Rules]
4. Actor/observer expert: (was there) [not in rule specifically, but treated as a regular witness]
Retained but not testifying expert...
Thompson v. The Haskell Co. (M.D. Fl. 1994)
- sued employer for severe emotional depression due to sexual harassment
- Issue b/4 court = ‘s motion for a protective order for psychologist‘s records 10 days after dismissal
- Psychologist = Retained but not testfying expert, t/4 discovery controlled by Rule 26(b)(4)(B) Party
has to show either exceptional circumstances or that expert is under 35(b)
- Court denied protective order by granting ‘s argument that the psychologist‘s report was made at a
unique and ephemeral time (‘s emotional state right after the alleged sexual harassment, t/4 it was an
testimony not discoverable
Chiquita International Ltd. v. M/V Bolero Reefer (S.D.N.Y. 1994)
- Chiquita‘s bananas not delivered by carrier the rightful destination
- sent marine surveyor, retained but not testifying expert, to carrier to investigate problem
- wanted to obtain the information procured by ‘s surveyor.
- B/s the could have sent their own surveyor, Ct held that there was not an exceptional circumstance
Sanctions for Discovery violations
- Discovery tools can be used abusively: Overdiscovery, underdiscovery, mismatched discovery
- Generally, ―bad faith‖ has to be shown.
- Rule 37(a)(2) Motion for Order Compelling Disclosure or Discovery
- Rule 37(a)(4) sanction against non-complying party to pay for other party‘s attorney‘s fees and/or
- Rule37(a)(4)(C) protective order may be granted to bar unwarranted or harassing discovery
- General sanctions: Rule 37(b) Failure to Comply with Order
- Specific sanction provisions in Rules:
26(g)(3) Signing of Diclosures, etc: sanction if such certification is made unjustly
30(d) Schedule and Duration, Motion to Terminate or Limit Examination:
(2) impede/delay deposition
(3) deposition in bad faith/done to annoy, embarrass, or oppress deponent or party
37(c) Failure to Disclose; False or Misleading Disclosure, Refusal to Admit
37(d) Failure of Party to Attend own Depos or Serve answer to Interog or resond to req. for info
37(g) Failure to participate in framing of Discovery Plan
- statutory authority 28 U.S.C. §1927
- Common law: inherent power of district judge in sanctioning misbehavior
Courts seem to be reluctant in levying sanctions.....
Phillips v. Manufacturers Hanover Trust Co. (S.D.N.Y. 1994) p.553
- Title VII, ADEA case long deposition reprinted in book
- During Deposition, over 40 interjections by counsel, among other abuses
- moved for Sanctions under Rule 37, under 28 USC §1927, and persuant to court‘s inherent power
- Court denied 1st motion, saying that Rule 37 did not apply, since 1) no prior motion to compel, 2) no
violation of a previously issued court order, and 3) the other party appeared for deposition.
- Court rejected ‘s argument for 28 USC §1927 no bad faith shown
- Court rejected ‘s argument for Court‘s Inherent power, also b/s of no bad faith shown
- On the other hand, court held that violated Rule 30(d)(1) b/s objections during a deposition are to be
stated ―concisely and in a non-argumentative and non-suggestive manner‖, and 30(d)(2) b/s ‘s
conduct ―frustrated the fair examination of the deponent.‖
- However, since Rule 30 had recently been amended, the court merely warned ‘s counsel.
―bad faith‖ not shown (again, a high standard)...
Kotes v. Super Fresh Food Markets, Inc. (E.D. Pa. 1994)
- Slip and fall case (on a grape)
- Each party sought to preclude tesimony or witnesses on each others‘ pretrial memo prior to lists but
not identified prior to scheduled date for completion of discovery both violated Rule 26(a)(1)
- Court denied both motions however, b/s although neither side behaved properly, it was unclear that
either was behaving in bad faith
DEFAULT AND DISMISSAL
Several Opportunities to end a case:
- 20 days after service of process (or 60 days), if has not responded
2nd opp: Pleadings Stage.
- summary judgment based on pleadings alone
- has pled a perfect defense, or had anticipated and pled a response to all possible defenses of
- Rule 12(b): 7 different pre-answer motions provided for to conclude a lawsuit
- A who invokes one of these does not need to answer the complaint until the motion to dismiss
has been decided.
3rd opp: Discovery stage
- If the case comes to sanctioning stage of discovery. Case could end here is one party if delinquent
4th opp: loses interest in case.
- Rule 41(a) Voluntary Dismissal, after ‘s answer or court‘s summary judgment
- Rule 41(b) Involuntary Dismissal: Motion made by for ‘s failure to prosecute
- Settlements are contracts. Subject to rules of Ks. Often have a provision prohibiting from refiling
Default Judgment Rule 55
- when fails to respond to his litigative cues (does not ―appear‖)
- a ‘s ―appearance‖ can be almost anything (even very minimal)
- Steps for making a motion for default judgment
- go to clerk if has failed to plead or otherwise defend. Rule 55(a)
- if has failed to ―appear‖ DJ by clerk, Rule 55(b)(1), DJ by Court, Rule 55(b)(2)
- if you want damages, must ―prove them up‖, Rule 55 (b)(2)
Peralta v. Heights Medical Center 485 US 80 (1988)
- medical center sued Appellant to recover payment due
- Under TX law, 90 days to serve process
- Appellee served process after 90 days
- Appellant filed motion for default judgment
- Appellee commenced collateral attack on the default judgment
- According to TX law, appellant would then be req‘d to make a showing of a meritorious defense.
- SC held that the requirement of a meritorious defense was a violation of 14 th Am b/s the late service of
process is sufficient to move for default judgment
- Walker’s Spectrum of Third Party Conrol (control value)
- bargainingmediationarbitrationcivil court modelautocratic
- [w/in courts, there is another spectrum of increasing 3rd party control]
- Which is the most efficient point on this dimension? 2 proposals (economic value)
1. bargaining, providing 3 assumptions: 1) no transaction cost, 2) no externalities, and 3) traditions of
equity existed (bargainers of equal ability). Under these assumptions, 2 parties, following own self-
interest, will reach optimum point of solution. But, none of the assumptions could possibly be true in a
real world [see Nicole‘s chart for this day].
as transaction costs go down, imposition costs go up (and vice versa)
as degree of 3rd party control goes up, imposition costs go up
as degree of 3rd party control goes up, transaction costs go down
always exist, ex. Pollution
rule of parsimony: easy to work with externality and equity problem by bringing in a 3 rd party, i.e.
mediation. Mediator would easily perceive problems in equity and would thus give hints to party less
advantaged. But, transaction problem not resolved. May need to move further up dimension
2. most efficient system: starts at bargaining, and goes possibly up to arbitration, but allows parties to
- contractual. Governed by the law of contracts
- no third party control
- exception: in class action suits, judge must approve of settlement on behalf of parties not actually
represented Rule 23(e)
Contracting for Confidentiality:
- Interest in confidentiality not as sacrosanct as the intererst in public policy and justice
Kalinauskas v. Wong 151F.R.D. 363 (D. Nev. 1993)
- sued Caesar‘s Palace for sexual harassament
- wanted to depose as a witness Donna Thomas (DT), a previous employee, who had been a party in
a previous sexual harassment
- In the settlement of previous case, there had been a Rule 26(c) Protective order which protects her
testimony from subsequent discovery
- LQ: whether to honor the terms of the agreement of DT and
- 2 competing interests at stake: 1) public policy (do we want to discourage such settlements by
dishonoring them?) and 2) courts being a public forum for general concern (do we want to
encourage the buying of silence? What about possible evidence that may be unearthed?)
- Court held that it is in the interest of public policy to bring all pertinant information before the
court, that Supression of ―evidence violate[s] the greater public policy
- Court‘s disclaimer: while the facts of DT‘s testimony are discoverable, the terms of the agree‘t
- This case tests the degree of our commitment to bargaining/efficiency as a value.
DAMASCA’s models of judicial authority:
Policy Implementing Conflict-Solving
Hierarchtical Authority [decision makes = professional] (former USSR) France, Germany
- decisions made at any level. No trial, instead meetings
Coordinate Authority [decision makers = amateur] USA England
- decisions made at one level. Trial = result/goal
Contracting for a judgment:
- values at stake: interest in respecting the parties‘ wishes
- setting precedent, and maintaining court authority
Neary v. University of California (Cali. 1992)
- = a cattle rancher who sued a UC journal for a libel action
- While case on appeal, parties reached settlement
- Both Moved to Vacate the judgment of trial court
- Court of appeals rejected request (to maintain court authority)
- Sup Ct. of Cali reversed, concluding that b/s both parties agreed to the motion, the efficiency and
integrity of judicial system was maintained
- Cali.Ct of Appeals takes a policy implementing view of judicial authority by wanting to discourage
parties from vacating the court‘s binding decisions
- Cali. Sup. Court takes a conflict resolving view of judicial authority
- note, governed by the law of contracts, even if it seems unfair.
Ferguson v. Writer‘s Guild of America, West (Cali. 1991)
- = screenwriter for Beverly Hills Cop II
- he was not given sole credit for writing the film as he would have liked.
- in ‘s contract w/ writer‘s guild, there was an arbitration provision.
- Arbitration procedure: 3 nonamous arbiters picked randomly after both parties made eliminations. No
discussion with parties or each other. No obligation to explain their decision.
- did not like the result of the arbitration. Sought review in California courts
- Ct. upheld arbitration result, b/s the had agreed to the arbitration, and the process was not in
violation of the agreement.
- Arbitration = Conflict-Resolving, Amateur.
- This is not a ―process‖ question, but a ―contracts‖ one
- Mediation: you may or may not sign a K. no enforcement, no reason to appeals. There is a popular
demand for this method b/s it is private, run by amateurs, conflict resolving.
The popularity of alternative models indicates that the public is disatisfied with the justice system
- novel innovation in 1938 Rules, judges disliked it at first, but as criminal dockets grew, judges were
naturally drawn to it to expedite civil matters (which can get backed up b/s of 6 th Am.)
- SJ awarded on basis of material produced in discovery
- motion for SJ must be served at least 10 days before trial, Rule 56(c), and it must include affidavits
[written document in which the affiant swears under penalty of perjury that the statements made are
true basically a deposition], briefs, copies of pleadings, interrogatories, depositions, admissions
- for party seeking recovery, motion for SJ can be made as early as 20 days after the commencement of
the action, Rule56(a), and for party not seeking recovery, it can be made whenever, Rule 56(b).
- 56(c) mandates that the materials presented show that there is ―no genuine issue as to any material
fact‖ and that ―the moving party is entitled to a judgment as a matter of law.‖
- Rule 56(c) states in part that an SJ may be granted with respect to liability alone, even though the
amount of damages has not yet been determined
- 56(e) mandates that all evidence presented be ―admissible‖ and that the ―affiant is competent to testify
as to the matters within.‖
How is a Rule 56 motion different from a 12(b)(6) motion (failure to state a claim)?
- in latter, facts are not at issue, it is a purely legal question. It is very drastic and will preclude party
from litigating that issue ever again. Consequenlty, the courts do not grant 12(b)(6) motions lightly,
usually giving the party the benefit of the doubt: ―unless it appears beyond doubt that the can prove
no set of facts in support of his claim which would entitle him to relief.‖ Conley v. Gibson 355 US 41
- the former decided based on the undisputed facts before the court. Also a high standard placed in
making SJ: ―Caution is required in granting summary judgment‖—Posner in Visser
I. Initial Burden (on Moving Party*)
M.P. will not have trial burdens M.P. will have trial burdens
1. Affirmative Proof (Adickes Test) 1. Affirmative Proof (Adickes Test)
other party can‘t win based on evidence it has this is always preferable.
Negative Proof (Celotex Test) (only option, really, since this party has burden a trial)
other party no evidence at all
* M.P. can be either or
- this is common law based on Adickes, not in the Rules
A. Affirmative Proof
- Adickes v. S.H. Kress & Co. 398 U.S. 144 (1970)
- = white, female school-teacher in a ―freedom school‖ (Black students)
- = owner of ―5 and dime stores‖
- claimed that conspired with local police to deny her of her civil rights by 1) refusing to serve her
at the ‘s lunch counter, and 2) arresting her for vagrancy
- moved for SJ and presented 1) a deposition of the store manager confirming he denials, and 2)
affidavits of the arresting officers claiming that they did not consult with the store owner.
- presented merely an unsworn statement of a check out girl who said cops were in the store
- Court granted SJ, stating that the facts were not in dispute
- SC reversed the SJ, holding:
1. Initial burden is on the moving party
2. moving party has an “obligation to foreclose possibility that the could recover factually”
3. Nothing in the affidavits of the policemen said that they did not go into the store (ie to consult )
4. T/4 the affidavits were insufficient. Moving party had not met the initial burden.
5. did not have to respond!
thus, the 2-step process was established.
- 1st test only focuses on the moving party‘s showing ―that there is an absence of evidence to support the
nonmoving party‘s case,‖ not that there is an absence of genuine issue of material fact.‖
- This case virtualy shut down Summary judgement practice.
- 1st test: must foreclose possibility that there would not be a dispute on facts
B. Negative Proof
Celotex Corp. v. Cartrett 477 U.S. 317 (1986) Rehnquist p. 616
- Cartrett alleged that he had been exposed to asbestos when he worked for Celotex
- Celotex moved for SJ, claiming that Cartrett did not have enough evidence to meet the initial burden
- Trial court granted SJ
- SC said that Ct of appeals was wrong in saying that this case was controlled by Adickes.
- Celotex did not foreclose possibility that Cartrett could recover factually, only presented a memo.
- Moving Party needs more than a memo saying other side can‘t prove case a product of discovery is
- Difference between these 2 cases:
1. in Adickes, moving party presented affirmative evidence (affidavit of police chief and deputy)
2. here the moving party points out the absense of ‘s evidence
II. Subsequent Burden (on Both Parties)
- Intial burden has been met by mover, so the court turns to the evidence
- Three Outcome Possibilities based on Affirmative evidence (determined based on reasonable standard)
1. Fail burden
2. Meet burden
- if you are not the party with the burden of proof, must do this in order to get a summary judgment
- If you are the party with with burden of proof, the case would go to trial
3. Exceed burden (based on evidence, there is only one rational outcome)
- if you are party with the burden of proof, must do this in order to get summary judgment
Visser v. Packer Engineering Associates J. Posner (7th Cir. 1991) p.622
- wrongful discharge suit brought under ADEA
- wrote an anonymous memo attacking ‘s leadership; argued that he fired b/s he was disloyal
- moved for Summary Judgment
- Initial burden on : he had negative proof (claimed that had no evidence proving a wrongful
discharge due to his age).
- Subsequent burden on : he failed his burden b/s all he had were affidavits that were were not made
from actual personal knowledge but were opinions. Thus, the affiants were incompetant, Rule 56(e).
- T/4 trial court correctly granted summary judgment
MANAGEMENT OF LITIGATION
- Rule 26(f) ―Meeting of Parties, Planning for Discovery‖
- 14 days before scheduling conference persuant to Rule 16(b), the parties must meet to discuss the
nature and basis of claims/defenses and the possibility of prompt settlement
- Rule 16(a): Detailed scheduling packet produced by judge, gives the judge an active role
- Rule 16(b) ―Scheduling and Planning‖ conference held after report of Rule 26(f) meeting is received
- Rule 16(c) ―Subjects for Consideration at Pretrial Conferences‖ discussed at Rule 16(b) meeting (see
- Rule 16(d): ―Final Pretrial Conference‖: ―parties shall formulate plan for trial‖ as close to trial date as
- Rule 16(e): parties draft ―Pretrial Order‖ at the final pretrial conference, ―reciting the action taken.
This superceeds the pleadings... states elements of trial, pleadings, list of witnesses, etc. Any
uncertainties in pleading are resolved
- Rule 16(f): Sanctions for a party‘s non-compliance with pretrial conferences
Managing a Settlement....
Lockhart v. Patel 115 F.R.D. 44 (E.D. Ky. 1987) p.635
- Medical malpractice suit in which teenager lost eye sight due to Dr.‘s alleged malpractice
- Summary jury trial – awarded $200,000 (not binding??)
- In settlement conferences held by judge, there was still a dispute among the parties with regards to
damages wanted $175,000, insurance co. wanted $125,000
- Judge scheduled a final conference in which both sides were to reach a final settlement
- ‘s attorney came, but the insurance co. sent an adjustor who had the authority to settle for only
$125,000. Thus, no settlement reached.
- Judge got angry and ordered trial for next day to determine damages and a hearing to determine
whether or not court ought to find in criminal contempt
- while the court cannot mandate that a party settle, it can mandate that the party take reasonable efforts
The strength of the Pretrial Order.....
McKey v. Faribairn 345 F.2d (DC Cir 1965) p.641
- rented a house, and during a rainstorm, she noticed a Spot on the wall.
- LL inspected it and found no leak, but he promised to fix it.
- The next time it rained, the floor became wet, and slipped and fell on it
- Pretrial order set forth the allegations of negligence: that breached duty owed under the lease to
make repairs and to eliminate dangerous conditions
- At trial, plaintiff b/c aware of a violation of a housing regulation requiring LL to fix roof leaks a
very different standard of care which would eliminate the necessity to fully prove the PF case of
- Trial judge would not allow the admittance of the statute, because it was not a part of the pretrial order.
- Appellate court affirmed
At trial, production and persuasion tests must be met
Judge decides if production burden has been met (question of law)
Jury decides if persuasion burden has been met (question of fact): by ―prepond. of the evidence‖
Legal Tradition v. Equity Tradition
legal tradition: questions of law and fact went to jury
equity tradition: only questions of fact go to the jury
History of struggle b/w common law and equity model:
- patriots very committed to common law model due in part to the fact that English had an equity system
of courts in the Colonies: Judges appointed by the Crown. One of the main thrusts of the Revolution
was to eliminate those judges
- after Revolution, many states got rid of equity tradition altogether this led to 7th Amendment
- Thus, states developed common law procedures as a reaction.
- t/4 it was very easy for federal courts to follow the common law procedures of the states
- However, FRCP were written at the time of the New Deal with respect to its commitments (more in
keeping with the equity tradition):
2. Centralization (efficiency)
3. social welfare
- Now that New Deal period is over, there is evidence that centralization is ending, that local procedural
rules are emerging, and that the welfare system has returned to states
Directed Verdict, Rule 50(a) awarded when the production burden has not been met
Rule 50(a) Judgment as a Matter of Law in Jury Trials
- Motion for a DV can be made anytime b/4 the submission of the case to the jury. Rule 50(a)(2)
- current standard re: to production burden, Boeing Co. v. Shipman (5th Cir 1969) p.726: ―the Court
should consider all of the evidence—not just that evidence which supports the non-mover‘s case—but
in the light and with all reasonable inferences most favorable to the party opposed to the motion‖
Rule 52. Finding by the Court; Judgment on Partial Findings must be made reasonably
- Rule 52(a) Effect, judge asked to find separately the issues of fact and the issues of law
- Rule 52(c) Judgment on Partial Findings, judge might upon hearing of one party‘s evidence, find for
Limits on Rational Inference....
Reid v. San Pedro, LA & SL RR 39 Utah 617 (Utah 1911) DV granted
- one of ‘s heffers was killed on train tracks alongside a pasture that was separated by a fence that had
an opening and a break
- cow was found 30 yards from the open gate and one mile from the break in the fence.
- Substantive Utah statute: if a RR builds a fence for the benefit of the landowner, then it is up to the
landowner to control its openings, but, if the fence is broken, then it is up to RR to maintain it.
- Question at trial: how did cow got to the tracks?
- has the production burden has to provide enough evidence from which a jury could reasonably
conclude that the heffer went through the break, and not the gate.
- Trial court held on direct verdict that did not meet the production burden b/s there was no proof of
causation (t/4 case did not go to jury)
- Appellate court affirmed
Tittle v. Aldacosta p.708 544 F.2d 752 (5th Cir. 1977) DV not granted
- Negligence case, but b/s admiralty, no jury
- Mrs. Aldacosta was disembarking from boat. She missed the dock and was injured.
- Lower court found no negligence on the part of boat owner due to lack of causation
- facts: procedure by boat crew to wipe the transom to keep it dry and to help disembarking guests. The
transom was apparently wet/damp and no towel placed on transom
- Appellate court reversed judgment
- Legal error was that Rule 52 requires that there was one reasonable solution based on the evidence, and
such was not the case here. It was not evident that Mrs. Aldacosta slipped on her own accord and that
it was not a result of Tittle‘s negligence
- This is a very heirarchtical, not amateur decision. Judges viewed the same issue differently, and the
judge in the higher position got final judgment
Controlling Juries before the Verdict
Pennsylvania Railroad v. Chamberlain 288 US 333 (1933), p.720 DV granted
- = brakeman for RR who fell off top of train in hump in the RR yard negligence case
- scenario: 7 car string followed by a 2 car string on which was, followed by 9 car string
- Allegedly, there was a crash of the cars, which caused the to fall and be killed
- 3 of ‘s witness said that the fell off on his own accord, and that there was no collision
- ‘s witness‘ evidence = heard a loud crash, saw brakeman fall at a great distance and at an acute angle.
- moved for directed verdict, claiming that eyewitness account of ‘s witness was not competent
- SC held that because the evidence could not rationally lead to the conclusion sought by the , that
motion for DV was properly granted by the lower court
Judgment Notwithstanding the Verdict (j.n.o.v.) Rule 50(b)
Rule 50 (b) Renewing Motion for Judgment After Trial; Alternative Motion for New Trial (persuant to
- permits the renewal of the motion for judgement as a matter of law after the actual verdict
- for a JNOV to be permitted, motion for a DV must be made at the end of evidence. (needs to be on the
- The analysis of a JNOV is exactly the same as for a DV (there is only one rational result based on the
- Must be made within 10 days after entry of judgment
- Why would a judge, having heard the motion for DV let it go to the jury in the first place? Just in case
jury gets it right. That way pressure on jury, not judge.
- Note, great deal of pressure to not reverse a jury‘s decision
New Trials; Amendment of Judgments Rule 59
- recognizes a common law principle: duty of judge to set aside verdict and grant a new trial
- 2 rationales for granting this:
1) error in procedure. Thus, judge can catch own mistakes
2) verdict against the weight of the evidence (does not state what that vedict ought to be)
not j.n.o.v., which says that there is only one rational result
persuasion responsibility misapplied by jury
- must be made w/in 10 days after entry of judgment
- a judge can grant not only jnov but also judgment for new trial (simultaneously)
Note: possiblity to grant conditional new trial on damages alone
- remittitur: trial judge will grant new trial to with condition that will accept less
- additur: grants condition on the being willing to pay more
Very high standard set for granting JNOV
Lind v. Schenley Industries 278 F.2d 79 (3d Cir. 1960)
- sued for allegedly not fulfilling an oral promise for a raise. denied making any such promises
- jury found for , finding that the evidence based on the testimony of and a secretary were credible
- trial judge granted jnov with alternative for a new trial b/s it found verdict contrary to evidence & law
- appelate court reversed trial judge and reinstated the jury verdict: if the jury found the witnesses to be
credible, then so be it.
- This is a very rare case b/s appellate courts do not often deny a motion to grant a new trial in the
interest of justice
Differences b/w jnov and DV:
Key difference: if a DV is reversed by an appellate court, the entire case must be retried. However, if
a jnov is reversed by an appellate court, then the finding of the jury is reinstated, and the case does not
need to be retried.
Both are drastic measures, but the judge may gamble by not granting a DV just in case the jury comes
up with the ―correct‖ result.
- Not a constitutional right
- Common law: 1873 it began formally. Previously, an appeal was merely another jury trial case
was tried de novo (pre1873, the system was much like the Equity system with respect to appeals)
- Equity: case being tried de novo appeal is very much a part of this system Typical of hierarchical
Four Basics of Appeal:
1. Concept of adversity
- Party cannot appeal if judgment in its favor, but not on its theory
2. Requirement of having made known in court the action that the party desires from the court
- Rule 46: issues which are raised on appeal must have been objected to if there was a chance to do so at
trial, but a ―formal exception‖ to the ruling is not necessary
3. Final judgment rule (baseline requirement)
- 28 USC §1291: Courts of Appeal have SMJ jurisdiction over final decisions of district court
- 28 USC §1292(b): interlocutory decisions are not non-appealable, unless there is ―substantial ground
for difference of opinion, and immediate appeal may materially advance the ultimate termination of
4. Timing: becomes a jurisdictional issue (not waivable)
- Rule 4 of Fed Rules of Appellate Procedure
- must make filing ―within 30 days after the date of entry‖
- Document filed is a standard form (Form 1)
- Rule 79: date of entry is crucial
- court clerk enters chronological procedural events in the file‘s folio in the civil docket
- the date entered is that which used to trigger the 30 day period
- Rule 58 illustrates what is to be entered: ―every judgment shall be set forth on a separate
Final Judgments Rule Illustrated:
Libery Mutual Insurance Co. v. Wetzel 424 U.S. 737 (1976)
- , Wetzel, claimed that employee insurance benefit discriminated against women (Title VII and Civil
Rights Act of 1964).
- moved for partial summary judgment as to the issue of liability and it was granted by the court
- Petitioner Appealed to 3rd Cir, who claimed jurisdiction under 28 USC §1291, and affirmed
- Appealed again to SC, but SC granted cert. in order to determine validity of Appellate Court‘s
- jurisdiction = invalid
- App court did not have SMJ b/s District court never issued a final judgment (28 USC §1291)
- Petitioner tried to gain appeal based on Rule 54(b), but it could not since the rule applies to a multi-
party/claim issue, and not a single issue (liability) case here. [Rule 54(b): In a judgment involving
multiple parties or multiple claims, it is possible for judge to grant a final judgement as to some, but
not all of the claims, if there is no good reason to delay making those decisions.]
- The district court‘s judgment was interlocutory b/s it had not yet determined damages issue (different
issue but part of same liability claim)
Exceptions to Final Judgment Rule:
1. Judge-made exception:
Lauro Lines s.r.l. v. Chasser 490 U.S. 495 (1989)
- ‘s ship was hijacked, and passengers were injured.
- They wanted to sue for injuries, but on the back of their tickets, there was a paragraph saying that suits
can only be brought in a Naples, Italy court [contractual forum-selection clause]
- LQ: whether a district court‘s interlocutory order to denying ‘s motion to dismiss on the basis of a
contractual forum-selection clause is appealable.
- Case was definitely inappropriate for appeal under 28 USC §1291
- SC further stated that the case does not fall under the Cohen exception to 28 USC §1291, which has 3
1. Order must conclusively determine the disputed question
2. Order must resolve an important issue completely separate from merits of action
3. effectively unreviewable on appeal from a final judgment [key condition]
- Exception meant to be for cases in which one of the parties has official immunity
- This case is different from immunity cases because here, there is an opportunity to litigate
2. Statutory Exception (borrowed from equity tradition):
a.) 28 USC §1292(a)
- Interlocutory appeal only allowed for certain categories
(1) Injunctions [Note: Good way to get to a court of appeals. Crucial in civil rights era in
desegregation in the south for African Americans getting out of their small districts, ex. they
could make a motion of preliminary injunction. If not granted, appeal to Circuit Ct of
(2) appointment of receivers
(3) certain admiralty cases
b.) 28 USC §1292(b): if there are ―substantial questions of law ...
c.) Writ of Mandamus (found within Rule 81 and was replaced by 28 USC §1651)
- Only to be used in extraordinary circumstances
- Ex. to force a district judge to perform an act required by law
Scope of Review
- Questions of law de novo at appellate level (jury instructions, summary judgments, venue, SMJ, PJ)
- Questions of Fact ―Findings of fact shall not be set aside unless clearly erroneous‖. Rule 52(a)
- Court management issues reviewable on abuse of discretion standards
Exception to Scope: Harmless Error: mistakes subject to review must be substantial. 28 USC §2111
Illustration of high standard of review for finding facts clearly erroneous......
Anderson v. Bessemer City 470 U.S. 564
- sued under Title VII. Trial court found for
- Appellate court determined that the decision was clearly erroneous
- SC reversed, stating that Appellate Court incorrectly decided the entire case de novo; however the
questions of fact were not Clearly Erroneous
- case significant b/s clarifies that a very high standard of review is required to find the facts of the case
to have been determined were clearly erroneous
- Rationales: Trial court is a better assessor of the credibility of witnesses based on oral testimony (tone
of voice, gestures, etc.)
- Court adopts Equity view, not CL (as does the authority on this subject)
Law of the Case
Former Adjudication, or ―res judicata‖
1. Claim Preclusion, or ―res judicata‖
a. ―bar‖ (lost in prior suit)
b. ―merger‖ (won in prior suit)
2. Issue Preclusion
a. ―direct estoppel‖ (in a case not decided on the merits)
b. ―collateral estoppel‖ (action with respect to a different claim)
Full Faith and Credit Clause ensures that an issue or claim that ought to be precluded is treated as such
across all jurisdictions.
- Applicability Final judgment on the merits precludes the same parties from relitigating the same
claims . Restatement (Second) of Judgments §24.
- Rationales Efficiency and Consistency
- Rule all claims arising out of the same set of facts must be claimed at the outset or be forever
precluded from further actions. Key: same facts, possibly different legal theories (don‘t matter)
- Claim preclusion grows from pleading
- Claim preclusion is the most powerful of the doctines on Judgments b/s it not only precludes what has
been litigated, it also precludes what might have been included.
1. Precluding the “Same” Claim
a. Efficiency Value
Frier v. City of Vandalia 770 F.2d 699 (7th Cir. 1985)
- ‘s 4 cars were in road hazardously. Police towed the cars, but left a note regarding their location.
- filed 4 replevin suits (one for each car) 2 consolidated, t/4 a total of 3 suits in state court
- brought a fourth suit before the federal court, claiming that the police had violated his DP rights, ie
28 USC §1983 claim
- Key: different legal theories (DP and replevin)/Same set of facts (cars ―wrongly‖ towed)
- Due Process claim was precluded b/s it arose out of the same set of facts as the replevin cases
b. Consistency Value
Martino v. McDonald‘s System, Inc. 598 F.2d 1079 (7th Cir)
- 1973, brought breach of contract suit against
- Consent Agreement in question: cannot acquire interest in another business that serves fast food
- Martino breached by financing his son‘s Burger Chef venture
- This case was settled out of court before the (now-) filed his answer
- In 1982, brought suit against , arguing that the same contract in question the first time was a
violation of Sherman Anti-Trust Act [essentially a belated counter claim]
- ‘s moved for claim preclusion.
- Rule 13(a): must bring forward or lose any objection to a ‘s claim in answer. Compulsory
- had had a chance to answer the ‘s claims in the first case, his anti-trust claim would have been
precluded. Thus, the claim was not precluded b/s the counterclaim never had a chance to be presented
(had the parties settled after the answer had been filed, then the claim would have been precluded b/s
of Rule 13(a))
- Thus the claim was not precluded only because the first case was settled (Very unusual outcome). Had
the answer have been filed, the ‘s claim would have been precluded
2. Between the “Same” Parties
notion of privity......(although not found here)
Searle Brothers v. Searle 588 P.2d 689 (Utah 1978)
- divorce proceeding between husband and wife.
- wife was awarded property known as the ―Slaugh House‖
- Brothers Searle believe that the ―Slaugh House‖ was half theirs and half their father‘s
- s brought suit against Mrs. Searle
- claimed that the claim was precluded b/s their ownership claim should have arisen during the divorce
proceeding, b/s the father was an agent of his sons, t/4 ―same party‖ that they are in ―privity‖
- the sons were not precluded because even if father was an agent, he was not an agent for this purpose
(no privity found)
- Thus, b/s the brothers were not party to original suit, their claim is not precluded.
3. After a judgment “On the Merits”
- there must be a genuine prior opportunity for CP to take effect
- Leave to amend commonly granted as a compromise (to give time to respond)Notes and Problems on:
- exceptions to claim preclusion Rule 41(b) involuntary dismissal that court designates it as ―without
prejudice‖, or a dismissal due to lack of jurisdiction, improper venue, failure to join a party under Rule
19 are not considered to be adjudicated on the merits.
these cases are considered decided ―without prejudice‖. Ex. Costello v. US 365 US 265 (1961)
turned on a construction of ―lack of jurisdiction‖
- Claims dismissed ―with prejudice‖ are precluded in later actions
Saylor v. Lindsley 391 F.2d 965 (2d Cir. 1968)
- Hawkins (a shareholder) v. Board of Directors: stockholders derivative action in 1959.
- Trial Judge: dismissed ‘s claim ―with prejudice‖ when the failed to post a security bond (NY
- = another shareholder, same CA
- = same Board of Directors
- If in 1st suit was terminated at the very earliest stage, then it is regarded as a dismissal for lack of
jurisdiction. In other words, this dismissal of failing to post a bond is very initial, like lack of PJ.
- For a representative (class action) lawsuit, Hawkins did not do a very good job in his case (by not
having enough money to post bond). If his claim were to be preclusive, it would bar all other
shareholders from filing suit.
- Holding: claim not precluded
- This suit Equity Tradition, where there is considerable judicial concern for non-represented parties.
- Unusual outcome, Usually 41(b) is very crystal. [Judge-made exception]
Restatement (Second) of Judgments §27
1. Issue of fact or law
2. actualy litigated and determined by [vs. Claim Preclusion]
3. a valid and final judgment [no requirement on judgment on the merits]
4. determination of which is essential for the judgment
- The determination is conclusive in a subsequent action b/w the parties [ought to add ―and some non-
parties‖] whether on the same or a different claim.
- at stake is the efficiency 2nd or 3rd lawsuit
An issue ―Actually Litigated and Determined‖....
Illinois Central Gulf RR v. Parks 181 Ind. App. 141, (1979)
- Jessie Parks was driving and Bertha Parks was passenger when they collided with a train
- Bertha sued for compensation for her injuries
- Jessie sued for loss of Bertha‘s services and consortium
- Bertha recovered $30,000
- Jessie sued for his own injuries
- moved for summary judgment to preclude Jessie‘s claim, due to the fact that the issue of Jessie‘s
contributory negligence had been an issue and had been decided in the first case
- Since this was a jury verdict, there was no way to know whether jury determined if he was CN
- T/4, first suit did not preclude second suit, since it is not clear whether Jessie‘s contributory negligence
was actually litigated and determined
An issue ―Essential to the Judgment‖
Halpern v. Schwartz 426 F.2d 102 (2nd Cir 1970) p.824 Direct Estoppel?
- s, ‘s creditors, brought suit against in order to declare her a bankrupt on several acts.
- One of the three acts proven against her was that the ―transfer was done with the intent to hinder and
delay the creditors.‖ lost the case.
- claimed bankrupcy and her creditors aimed to deny her discharge based on bankrupcy due to her
intent to hinder, delay, and defraud the creditors. Trial court granted ‘s motion 4 summary judgment.
- when a prior judgment rests on several grounds, is that judgment conclusive as to the facts which were
found in order to establish one of the grounds? No.
- Creditors wanted to preclude the hinderance/delay charge because it had already been concluded. T/4,
they claimed that they would not have to litigate it again (can just accept the holding)
- Rule on issue preclusion: if an issue was part of a prior judgment to the trial at bar, that issue is not
precluded from reconsideration if it was not essential to the judgment
- This claim was not essential in prior action b/s it was one of 3 and did not receive careful deliberation
- Moreover, it was not considered further when it was on appeal b/s the focused instead on the issue
- Thus, the court finds that the issue of her intentions was not considered with enough attention to
preclude it from serious consideration in this trial.
- Holding: issue not precluded
- this is the Restatement (Second)‘s position
Winters v. Lavine 574 F.2d 46 (2d. Cir. 1978) p.827
First Suit NY state court
- sued NY state for failure to provide Medicaid compensation to a Christian Science practitioner
- the claim was rejected on 2 grounds
1. she had no statutory nor First Amendment right to be compensated
2. She failed to adequately show proof of illness
Second Suit federal court
- claimed violation of civil rights
- District court held that issues was precluded. Affirmed.
- The court distinguishes between this case and Halpern by pointing to the fact that Halpern was decided
with very a very narrow scope in mind to apply only to Bankruptcy proceedings
- Here, court found that the 2 issues prosecuted in the first lawsuit were sufficiently analyzed by the jury
- Default rule = to err on the side of trusting that the first court sufficiently considered the issue
- Winters stood for a return to the Restatement (First)‘s position
- Unclear why did not ask for claim preclusion
- note, the 2nd Cir seemed to indicate that the Halpern decision was limited to bankrupcy cases
- Issue preclusion between which parties?
- Mutuality rule = only when the same parties are involved in a suit can the issue be precluded
- abandoned since the landmark Bernhard decision
Defensive Use of Collateral Estoppel
1 v. 1 won
1 v. 2
Bernhard v. Bank of America National Trust & Savings Assn. 122 P.2d 892 (Cal. 1942) J. Traynor
- Mrs. Saturn had disposed of some $ just prior to her death, by making a gift to her caretaker. The gift
was given to 1 via bank teller
- 1 (Mrs. Bernhard, heir to Mrs. S) v. 1 (Cook, Mrs. S‘ caretaker) 1 won b/s Gift
Second Case: 1 v. 2 (bank).
- Bank pleaded collateral estoppel, arguing that had already adjudicated the right to the funds (the
gift) in the prior proceeeding
- Non-mutual collateral estoppel b/s different s
- J. Traynor concluded that it was not improper to allow a new party to take advantage of findings in an
earlier suit to estop that party from relitigating the same issue
- The focus of his opinion is that the had a fair opportunity to litigate the issue in the first case.
this is Defensive use of nonmutual collateral estoppel: , having lost once, switched s and sued again.
asserted this to protect himself against such an act.
Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation 402 US 313 (1971)
- Univ of Ill, 1, sued a patent holder, 1, for patent infringement
- Lost b/s the patent was found to be invalid
- 1 sued another patent holder, 2
- Sup adopted the viewpoint of J. Traynor: defensive use of CE is proper b/s it protects against
unfairness and waste of judicial resources.
Offensive Use of Collateral Estoppel
1 v. 1 won
2 v. 1
new seeks to borrow a finding from a prior action to impose liability on a party who was a in a
new invokes CE to establish the ‘s liability with respect to the issue in the first suit (so that will not
have to litigate it)
Parklane Hosiery Co. v. Shore 439 US 322 (1979) p.832
- SEC, 1, won suit against Parklane, 1, for issueing a materially false and misleading statement with
regards to a merger
- Affirmed by 2nd Circuit
- stockholder‘s, 2, class action suit against Parklane, 1, for same CA as in first suit by SEC
- 2 claimed that was collaterally estopped from relitigating the same issue
- District court denied motion, saying that it was a 7th Am. Violation of petitioner‘s rights
- 2nd Cir reversed, allowing issue preclusion claim
- LQ: whether a party who has had issues of fact adjudicated adversely to it may be collaterally
estopped from relitigating the same issues in a subsequent action brought against it by a new party?
- Court held that the 2 modes of CE ought to be treated differently b/s
1. offensive use of CE does not promote judicial economy as defensive CE does
2. offensive use of CE may be unfair to
- General Rule in the application of offensive CE: If a had the opportunity to join the original to
the earlier action OR if the application of offensive estoppel would be unfair to the , the Collateral
Estopple ought not be allowed.
Holding: the court allowed offensive CE
- had a fair chance to litigate issue against the SEC
- could not have joined SEC in first suit
- it would not be unfair to to not be allowed to relitigate the issue of whether the proxy statement was
in fact materially false and misleading
- Court‘s concerns regarding Offensive CE
1. Judicial Economy: whereas in defensive CE will tend to reduce the amount of lawsuits, offensive
CE will increase lawsuits (b/s 2 will adopt a ―wait and see‖ attitude). If won first lawsuit, 2
would never be stuck with it. If 1 wins, then 2 will jump in to claim benefit. benefit but no
2. Fairness to the
a. 1 may not take 1st suit seriously. However, if 2nd suit is for a more substantial amount of
money, CE might be unfair
b. if procedures in 1st suit were unsatisfactory, it may be unfair to make stand by the holding
c. if there are inconsistant prior judgments, it may be unfair to conclude that one of them is
more persuasive than the others (this problem is addressed by State Farm)
State Farm Fire & Casualty Co. v. Century Home Components 275 Or. 550 P.2d 1185 (1976)
- appeals from lower court decision below which claimed that it was collaterally estopped from
relitigating each of the 48 actions in the consolidated cases in a damages from fire case.
- Fire resulted most probably from the vacinity of the ‘s property (warehouse) and was led to ‘s
property (shed) via a wooden loading dock connecting them
- 1st case verdict for , originally for but was reversed on appeal
- 2nd case verdict for (no appeal).
- 3rd case verdict for (affirmed on appeal)
- 4th case remaining s filed for [offensive]CE to prevent from relitigating issue of liability
- objected by saying that CE would be unfair as evidenced by the fact that won the 2nd case
- if there is obvious disagreement between the various juries in the cases below, as in this case, it would
be unfair to grant CE. That would be ―fundamentally offensive.‖
- No major discrepancy in the evidence and arguments presented before the court in prior cases. T/4, the
aberrant case may not be so aberrant
- Prof. B. Curry‘s hypo: RR accident. 50 passenger s injured. Curry had 2 views. Court in State
Farm addresses both?
1. no issue preclusion. Rationale: s possess initiative/have a strategic advantage. Control time place
and manner of lawsuit. Lots of opportunity for collaboration by s. What if prevailed in first 25
suits, wons 26th, due to ‘s strategic advantage. We ought to ignore 26th. Applied to State Farm:
the victories of 1st and 3rd s may be attributable to the fact that they are s inherently. B/s we would
ignore the 26th in RR hypo due to ‘s stategic advantage, then we ought to ignore the 1st one by the
same rationale. He would not agree with Parklane
2. Changed his mind b/s it was a Generalization. Teitlebaum case: convicted of stealing from his own
store. in criminal suit. then b/c in suing the insurance co. for recovery of the theft. Argument
that Teitlebaum did not have initiative in 1st case, but did in the 2nd case. Trial court denied insurance
co‘s CE defense b/s it would be unfair to Mr. Teitlebaum. Traynor granted CE b/s said that had a
full and fair opportunity in the first case (more at stake even in that case, so must have had a good
The Reopened Judgment as an Alternative to Collateral Attack:
Rule 60. Relief from Judgment or Order
- directly attack the judgment if party to the lawsuit
- 60(b) allows for a special attack on judgment
- 60(b)(1) is the most common: ―mistake, inadvertance, surprise, or excusable neglect‖
- 60(b)(3) ―fraud, misrepresentation, or other misconduct of an adverse party‖
- one year time limit on this motion from the time of trial exception: ―fraud upon the court‖
Rozier v. Ford Motor Co. 573 F.2d 1332 (5th Cir 1978)
- ‘s husband died in a rear-end collision when his Ford‘s fuel tank exploded Ford won 1 week trial
- moved for new trial, alleging that Ford had failed to disclose a document that had requested
- Time limit for a Rule 60 motion has not run out (1 year)
- 8-25-75: delivered a set of interrogatories, asking if had done a cost/benefit analysis for possible
modifacations on the fuel tank in the Ford Galaxy 500. #19 asked for such information that was not
limited to a strict cost-benefit analysis.
- 1-22-76: responded that there were none
- March ‗76, Trial won
- Jan ‘77, discovered that there was a document in Ford‘s files which could be construed as being a
C/B analysis as defined by Interrrogatory 19. It compared costs of parts and labor associated with 2
different fuel tank designs
- had become aware of the document 2-25-76, one month after its negative response to the
interrogatories and 1 month prior to trial.
- convinced the court that Ford engaged in misrepresentation and other misconduct. 60(b)(3)
- upon finding the document, Ford ought to have amended the interrogatory
- Rule 26(e) requires that interrogatories be amended if new information b/cs available
- Issue: did the nondisclosure prevent from conducting a full and fair presentation of her case? Yes