personal jurisdiction - law school · even for causes of action arising outside the jurisdiction...

Civil Procedure – Levin Jessica Sherman Outline

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For a judgment to be valid, the parties must have adequate notice, the court must have had territorial jurisdiction and subject-matter jurisdiction, and venue must be proper. I. PERSONAL JURISDICTION: in what states can pl. sue def.? A. Basics

1. The Court must have power over something to give it personal jurisdiction, to render a binding, enforceable judgment defining or declaring rights and duties of the parties (substantive due process):

a) The defendant himself b)Power of defendant’s property 2. Three types of personal jurisdiction a) In personam: the court’s power is over the defendant himself b) In rem: power over def. property c) Quasi in rem: power over an out-of-state def. property

3. Statute must also give power to hear the case a) Just because it falls within the Due Process clause, does not mean state has jurisdiction – state must have a statute [First thing to ask is whether a statute allows for personal jurisdiction (ex. long arm statute); then ask whether it falls within the Due Process Clause] b) such a statute allows the courts of a state to obtain jurisdiction over persons not physically present within the state at the time of service.

4. Once jurisdiction over the parties is gained, it continues during the entire litigation. At each new step of the litigation process, notice and opportunity to appear must be given

B. In Personam jurisdiction 1. General v. Specific

a) General in personam jurisdiction: def. can be sued in the forum on a claim that arises anywhere in the world

i) continuous systematic or substantial ties with the forum general jurisdiction ii) ex. domicile; place where incorporated iii) makes Burnham seem unfitting

b) Specific in personam jurisdiction: def. can only be sued in the forum for a claim that has some connection with the forum c) Perkins v. Benguet Consolidated Mining: where there are systematic and continuous minimum contacts, a state may assert jurisdiction over a defendant even for causes of action arising outside the jurisdiction (stockholder sued Philippine mining co. in Ohio based on the company president’s presence and activities there) d) Helicoptros Nacionales de Colombia v. Hall: general in personam jurisdiction requires sufficiently substantial and continuous minimum contacts with the forum state (Decedents’ representatives sued owner of helicopter that crashed in Peru. Court said not enough contacts)

i) def. purchases in the forum state, even if they occurred regularly, will not be sufficient to establish the requisite minimum contacts

2. Constitutional Limits a) Pennoyer v. Neff: boundary theory: state has power over people and property within its physical boundaries; Traditional bases of jurisdiction:

i) def is served with process in the forum (presence) General Jurisdiction

ii) def. agent is served with process in the forum iii) def. is domiciled in the forum (General Jurisdiction)


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o State courts have in personam jurisdiction over all domiciliaries of the state, wherever they are residing and wherever they are served with process. Milliken v. Meyer (pl., sued def, a Wyo. domiciliary, in Wyo. court, but served him in Co. where he was vacationing)

o Rationale: a state which accords privileges and affords protection to a person and his property by virtue of domicile may exact reciprocal duties

iv) consent by def. o Adam v. Saenger: if you bring suit in a state court in which

you are not a resident, you consent to counter-suit in that state.

o Carnival Cruise Lines v. Schutte: forum selection clause validly establishes jurisdiction by consent and will be enforced so long as they are fundamentally fair (pl. injured by fall that occurs on the cruise ship and sues in Wash, when contract selected Florida for suits)

o M/S Bremen v. Zapata Off-Shore Co.: reasonable forum-selection clauses in contracts establishes jurisdiction by consent, even if leads to foreign court (pl. sued def. in Fla. fed. court for damage to its rig, def. moved to dismiss b/c forum selection clause mandated jurisdiction in London)

v) Nationality: US citizenship is probably sufficient contact with the US to subject citizens abroad to in personam jurisdiction of Am. courts without violating due process. Blackmer v. United States (US citizen in France refused to comply with a subpoena and was convicted in absentia for contempt) vi) DIFFICULT to get in personam jurisdiction over non-residents…. so S.C. expands

b) IMPLIED CONSENT: Expanding personal jurisdiction: Hess v. Palowski: Pa. citizen in Mass. and gets into car accident in Mass. Mass. statute appoints secretary of state as agent for service of process for anyone using hwys in Mass. and gets into car accident. Def. not served while in Mass. Long-arm statute = consent; expands notion of consent from actual to implied c) International Shoe v. Washington: doctrinal shift

i) “There is jurisdiction if the def. has such minimum contacts with the forum so that the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice” ii) more flexible standard than Pennoyer and has led to an expansion of jurisdiction iii) you can get in personam jurisdiction over a non-resident WITHOUT serving process in the forum, as long as def. has minimum contacts with the forum (here, solicitation of orders w/in the forum state is sufficient) iv) Does not overrule Pennoyer; it is the test if def. is not present in the forum v) Two part test (1) contact; (2) fairness – balance of interests (burden of defending in a foreign state v. extent of corporate contact)

d) McGee v. Int’l Life Insurance (1957): TX corp. sells one contract in CA; it gets sued in CA. CA had a statute granting jurisdiction over companies writing insurance policies on California residents, even though the statute was enacted


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after the policy in question was written. Court says one contract is enough for jurisdiction

i) def. solicited the contract from CA (mailing premiums) ii) RELATEDNESS: pl. claim arose from the def. contact w/ CA. iii) STATE’S INTEREST: Ca. had an interest in the case

iv) this case represents the least contact with the forum state that has been approved by the Supreme Court

e) Hanson v. Denkla: Pa. woman sets up trust in DE, then moves to Fla. She continues to do business in Fla. and Del. Woman dies in Fla. Court says Fla. has no jurisdiction over Del. Bank b/c bank did not avail itself of Fla. jurisdiction

i) to be a relevant contact under test, it must result from def. purposeful availment of the forum ii) Del. Bank had no ties w/ Fla. except that woman moved there

f) World Wide Volkswagen: family buys car in NY, move to Az. and drive though OK and get into car accident there. Family wants to sue WWV, who only did business in NY, CT, NJ and Seeway, who only does business in NY. Court says no purposeful availment and thus, no jurisdiction.

i) foreseeability is relevant; but not foreseeability that the car will get there. IT MUST BE FORESEEABLE THAT DEF. WOULD BE HAILED INTO COURT IN OKLAHOMA ii) def. did not make any effort to serve directly or indirectly market for its products in Oklahoma iii) unilateral activity of pl, here, an isolated occurrence

g) Kulko v. Superior Court: A state cannot exercise jurisdiction over a def. who did not personally avail himself to the benefits of the state, even if the state has a strong interest in the litigation (NY Father sends kids to live with mom in CA, and mom sues him in CA; jurisdiction struck down; plane ticket purchase insufficient) h) Burger King: franchisees in Mich., corp. in Fla. Corp. sues franchisees in Fla. Court says that there was jurisdiction. i) emphasizes that there are two parts of Int’l Shoe ii) must have relevant contact with the forum b/f fairness looked at iii) if there is a lot of fairness, lesser showing of contact okay

iv) Court said there was contact: franchisees purposefully reached out to Fla. Court said that it was fair too – the burden is on the defendant to show that the forum is unconstitutional (grossly unfair); wealth of the parties is irrelevant v) def. had fair warning that a particular activity could subject thtem to jurisdiction of a foreign sovereign

j) Asahi Metal: stream of commerce case (Seller 1 in state A sells his parts to manufacturer in State B, who incorporates them into his product and sells them to state C and D) i) NO LAW that comes out of the case 4-4 split

ii) Brennan approach: it is a contact if def. puts the product into the stream of commerce and reasonably anticipate that it will reach the other states -- FORESEEABILITY iii) O’Connor: you need Brennan’s requirement, and also and INTENT to serve the other states iv) In stream of commerce question, talk about both theories


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k) Burnham v. Superior Court: NJ def. sued in Ca. by his wife (for divorce) and served with process in Ca. while on vacation (but stopped to visit his children), but claim did not arise in Ca. Did Ca. have general jurisdiction? i) NO LAW that comes out of the case, 4-4 split

ii) Scalia: jurisdiction b/c of history; service of process in the forum is sufficient; in-state service of process sufficient iii) Brennan: jurisdiction; but “minimum contacts” must be applied; simply by being in Ca. for three days, def. had availed himself to be subject to general jurisdiction (but never says how much time is enough) iv) Grace v. MacArthur (1959): service on an airplane flying over the forum state is valid, since the plane was present in the state.

l) When applying minimum contacts analysis of a foreign company, its not whether the company has minimum contacts with the country, but with the forum state (DeJames v. Magnificence Carriers: def, Japanese Co., negligent in manufacturing boat in Japan. No office in NJ where sued. Court says no jurisdiction)

3. Statutory Basis (ask this question first) a) every state has statutes covering the traditional basis

b) every state has a non-resident motorist statute (Hess v. Palowski), which gives SPECIFIC jurisdiction c) every state has a long-arm statute; two models

i) CA approach: we have jurisdiction to the extent of the constitution ii) Laundry list statute: lists certain things that will subject a non-resident to jurisdiction. Almost always SPECIFIC jurisdiction.

d) vary from state-to-state e) the same language can mean different things in different ways

i) ex. “we have jurisdiction if the def. commits a tortuous act in the forum”

o If, def. sells products to one in state A, product blows up in state B

o Gray v. American Radiator: injury in state B constitutes a tort in state B

f) Keeton v. Hustler: Pl. sued in NH b/c most lenient long-arm statute. SC upheld jurisdiction b/c sale of thousands of magazines in a state are not random, isolated, fortuitous. Pl. lack of contacts with the forum state will not block jurisdiction.

4. Recap of Constitutional analysis a) Does one of the traditional basis apply (Pennoyer); they still may be alive, may need minimum contacts (Burnham) b) International Shoe test: i) Must relevant contact with the def. and the forum

o PURPOSEFUL AVAILMENT of the forum; def. must reach out to the forum in some way

o FORESEEABILITY: must be foreseeable that def. would be hailed into the forum

ii) Fairness o relatedness of claim and forum(McGee); OR o continuous and substantial ties with the forum o inconvenience for the def. – but burden is on def. to show that its

unconstitutionally and grossly unfair (Burger King – tough to show)

o state’s interest in case


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o not much done with these pl. interest legal system’s interest in efficiency shared substantive policies of the states

C. In Rem and Quasi in rem: property 1. Difference b/w in rem and quasi in rem a) in rem: dispute itself about who owns the property

b) quasi in rem: the lawsuit has nothing to do with who owns the property; it is one that would be in personam if it could be

i) Pennoyer v. Neff – quasi in rem was okay if court had attached (seized) the property at the outset of the case

2. Must have an attachment statute a) every state has an attachment statute b) “We can attach property that a non-resident owns” c) Before 1963, quasi in rem action had to be commenced in a state court

d) Rule 4(n)(2): federal quasi-in-rem jurisdiction may only be used if the law on the state in which the federal court sits permits such jurisdiction

3. Constitutional (?) a) Tyler v. Judges of the Court of Registration: personal notice to all adverse claimants is not required in a motion in rem to quiet title to property (pl. claimed an interest adverse to property at issue and sought a writ prohibiting judges from adjudicating an application to quiet title); in rem jurisdiction only requires power over property b) Pennington v. Fourth Nat’l Bank: in rem jurisdiction requires seizure of property within the borders of the forum state (Pl. objected to exercise of in rem jurisdiction over his personal intangible property); tangible and intangible property the same c) Harris v. Balk: its okay to attach even intangible property (ex. debts); the situs of a debt travels with the debtor d) Schafer v. Heitner: EVERY CASE HAS TO MEET MINIMUM CONTACTS. Minimum contacts must exist for in rem jurisdiction. (H brought shareholders derivative suit against officers and directors of Greyhound by attaching their stock; reversed)

i) in most cases, property’s presence in the forum will meet minimum contacts for in rem jurisdiction ii) quasi in rem, have to show that def. meets the minimum contacts test of International Shoe

II. NOTICE AND OPPORTUNITY TO BE HEARD A. Service of Process [Rule 4]

1. Process consists of a summons and a copy of complaint a) summons is from the court as an official notification of the suit; 4(a) and (b) b) service on the def. must be made within 120 days after filing the complaint [Rule 4(m)]

2. The defendant must have adequate notice of the action against him and an opportunity to be heard as required by procedural due process

3. Process can be made by any non-party at least 18 years old; Rule 4(c)(2) 4. Rule 4(e)(2); Can serve individual by:

a) personal service: hand it to defendant anywhere in the state through a procedure reasonably probable to reach the defendant


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b) substituted service: must be done at defendant’s usual place of abode, and must serve someone of suitable age and discretion who resides there

i) Rovinski v. Rowe: Service was left with the def. mother at an address he had given in an affidavit in a prior state action against him based on the same incident; court held “usual place of abode” should be constructed liberally – service upheld

c) serve the defendant’s agent i) Insurance Co. of North America v. Hellenic Challenger: service upon a corporation is effective when delivered to anyone so integrated with the organization that he knows what to do w/ the papers, even if not expressly authorized to receive process

d) State law: Rule 4(e)(1) allows pl. any method for serving process that is allowed by state law, either the state where the federal court sits OR where the service is effected (ex. mailing) e) if the defendant cannot be sued in any state (i.e. a foreigner), Rule 4(k)(2) allows a federal question suit to be brought if the exercise of jurisdiction is consistent with the Constitution and laws of the United States. f) Pennoyer v. Neff: cannot give notice by publication upon a non-resident; defendant must be served w/ process w/in the state in which the court is sitting.

5. Waiver of service [Rule 4(d)]: send summons, complaint, waiver form, and SASE, and if def. sends it back, then def. waives service a) DO NOT CALL waiver by mail

b) MD State Firemen’s Assoc. v. Chaves [MD]: a plaintiff must strictly comply with service provisions, even if the def. has actual notice of the lawsuit (default judgment entered against def.; service sent by first class mail to the address on the def. letterhead) c) incentives:

i) if the def. grants waiver, he gets 60 days following the date on which request for waiver was sent which to answer (compared with 20 days from service of process) ii) if the def. does not waive service, the court shall impose the costs subsequently incurred in effectuating service [4(d)(2)] iii) a def. who grants waiver will not be deemed to have waived any objection to venue or personal jurisdiction over him.

6. Geographic limits [Rule 4(k)(1)(A)]: you can serve process throughout the state in which the federal court sits, and can serve process out-of-state ONLY if the state court in which the federal court sits could (where long-arm statute of the state in which the district court sits permits)

a) two exceptions i) by federal statute: there may be a federal statutory exception [ex. statutory interpleader 4(k)(1)(c) and (d)] ii) Bulge rule: you can serve process out of state without a state statute as long as it is within 100 miles of the federal courthouse [Rule 4(k)(1)(b)]; DOES NOT APPLY to an original defendant – ONLY applies to PARTIES JOINED LATER [Rule 14 (third-party defendants), Rule 19 (indispensable parties)]

7. Nationwide service of process: 28 U.S.C. § 1391(e): permits service by registered mail anywhere in the country in a suit against federal officers and agencies 8. Other requirements

a) person making service must make proof of service by promptly filing an affidavit with the court setting forth the manner in which service was made.


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b) service of process must be made w/in 120 days of filing the complaint or the action can be dismissed

B. Constitutional Standard for Notice a) Mullane v. Central Hanover Bank: notice must be reasonably calculated under all of the circumstances to apprise the party of the proceeding (Bank petitioned for a judicial settlement and provided notice by publication)

i) watch out for notice by publication (constructive notice); almost never good under Mullane, but not automatically invalid ii) Mullane upheld notice by publication for some people who couldn’t be found and were unidentifiable; invalid where the names and addresses of the parties is known iii) test under due process is whether reasonable effort has been made, not whether it succeeds.

b) If you meet Rule 4, generally no constitutional problem c) Dusenbery v. United States: (FBI sent certified mail to Dusenbery where he was incarcerated, Def. never received it; default judgment upheld); courts have never required actual notice as long as attempt complied w/ Rules d) Service of process is improper when service is rendered through trickery or fraud. Wyman v. Newhouse (pl. fraudulently induced def. to come to Fla. by telling him she was leaving the country for good and wanted to see him, and then served him with process)

C. Opportunity to be heard a) Prejudgment seizure of property

i) OLD WAY: classic ex: buys item on installment payments; fails to pay; sheriff seizes the property ii) MODERN: there are safeguards that due process will require (but we don’t know how many and to what extend they must be present)

• pl. must give an affidavit of his claim (sworn statement) before property seized

• must get the writ from the judge, not the sheriff • pl. must post a bond for the value of the repo item, that way p. can

repossess but if later found wrong at hearing, def. can get money back • ** defendant gets a hearing on the merits at some point

b) Fuentes v. Shevin: In order to comply with procedural due process, notice and opportunity to be heard must be provided prior to seizure of property; statutes that fail to provide for an initial hearing before a creditor can replevy goods are unconstitutional

i) can seize goods before a final judgment in order to protect the security interests of creditors, as long as those creditors have tested their cliam to the goods through the process of a fair, prior hearing.

c) Mitchell v. W.T. Grant: statutes allowing for attachment without a hearing do not violate due process if safeguards exist (verified petition, had to make showing to judge, etc.) d) North Georgia Finishing v. Di-Chem: in order to comply with procedural due process, attachment by garnishment requires a prior adversarial hearing or certain procedural safeguards

III. SUBJECT MATTER JURISDICTION (SMJ) – which court to go to (state/federal) A. Basics

1. Federal Courts are of limited subject-matter jurisdiction 2. State Courts have general subject-matter jurisdiction


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3. Most courts hold that subject matter jurisdiction may NOT be conferred by consent of the parties 4. Rule 12(h)(3) states that the parties or the court on its own initiative may ALWAYS object to the court’s lack of subject matter jurisdiction.

B. Diversity of Citizenship 1. governed by 28 U.S.C. § 1332 (a)(1) and Art. III, §2 of Constitution

2. must be a case b/w citizens of different states and amount in controversy must exceed $75,000

a) there is no diversity if ANY pl. is a citizen of the same state as ANY def. Strawbridge v. Curtis (1806) b) citizenship determined by: i) if a US citizen, citizenship is of the state where domiciled

o Domicile established by Physical presence in the state ** Intent to make it your permanent home

o can only be domiciled in one state at a time ii) HYPO: person born in OK; goes to college for 4 years in Mass.; goes to law school in NY, goes to CA for PhD. OK is still his domicile b/c he has never intended to make other states his permanent home iii) Mas v. Perry: a party changes domicile only by taking up residence in another state with the intention to remain there; a wife’s domicile is not necessarily the same as her husband’s

c) citizenship of a corporation defined in §1332(c)(1): corporation is a citizen of: i) all states it is incorporated (most only incorporated in one state)

ii) AND of the ONE state where it has its principle place of business (ppb). PPB is determined dif. by courts:

o the nerve center: where decisions are made (corporate headquarters/home office)

o the muscle center: the place of activities (where corporation does the bulk of its activity)

o total activities test: use the nerve center unless all of the corporate activity is ALL in one state

iii) can be a citizen of more than one state iv) unincorporated associations, such as partnerships and labor unions do not fall under the §1332(c) definition of corporation v) White v. Halstead Industries, 750 F. Supp 395 (E.D. Ark. 1990) corporations are citizens (1) of the state in which they are incorporated and (2) the state in which it has its principal place of business

d) Exception: Ankenbrandt v. Richards: some areas of the law that even if jurisdiction exists, federal courts will not hear because these are areas of the law in which the states have an especially strong interest and a well-developed competence for dealing with them (divorce, alimony, child custody, etc.)

3. Amount in controversy must EXCEED $75,000 a) does not count interest and costs

b) in determining whether pl. met the amount, court defers to pl. good faith claim unless it appears to a legal certainty that pl. cannot recover that amount. c) Aggregation:

i) def: where you must add two or more claims to get over $75,000 ii) aggregate claims if one pl. v. one def.

o cannot aggregate if multiple parties


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d) with joint claims, use the total value of the claim (pl. v. multiple defendants for same wrong)

i) claims in class-action suit cannot be added up to meet jurisdictional amount. Snyder v. Harris

e) Dismiss as soon as it is evident that pl. does not meet jurisdictional amount (Tonghook America v. Shipton Sportswear)

C. Federal Question 1. 28 U.S.C. § 1331, “cases arising under the Const., laws, or treaties of the US” 2. Citizenship and amount are irrelevant 3. Must arise under a federal law

a) Look ONLY at the PL.’S COMPLAINT and to the CLAIM ITSELF – NOT to EXTRANEOUS stuff (Well-pleaded Complaint Rule); from Mottley

b) Is the plaintiff enforcing a federal right? c) Louisville and Nat’l Railroad v. Mottley: pl. had lifetime pass on the RR; in 1906, Congress passed a statute that said RR cannot give away free passes. Motleys sue the RR and in their complaint they mention the new law and states that it does not apply and is unconstitutional. There was no federal question jurisdiction b/c Motleys not suing under the federal statute, but rather, breach of contract.

i) Federal question jurisdiction cannot be obtained by anticipating a defense def. will raise ii) Appellate court can dismiss a suit already tried for lack of subject matter jurisdiction.

d) Merrell Dow Pharmaceuticals v. Thompson: If a federal law does not give the right (Congress did not intend) to bring a cause of action, it is not sufficient to get the case into federal court. (Series of state actions but also one alleging violation of FDA labeling laws; Court ruled that the violation of the FDA law did not provide for a private cause of action and thus, the case should not be allowed in federal court.)

D. Supplemental Jurisdiction (ancillary jurisdiction) 1. Pl. must have asserted diversity or federal question to get case into federal court; once pl. is in the federal court, the court can take jurisdiction over other claims pl. has against def, even if they wouldn’t normally get into federal court. This promotes efficiency. 2. United Mine Workers v. Gibbs: pl. citizen of Tn., def. citizen of Tn. Pl asserts two claims: (1) federal question (federal labor laws) (2) state law question. Case in federal court; but claim (2) does not meet federal jurisdiction requirement, BUT it meets supplemental jurisdiction, and thus, can be in federal court. Must:

a) Share a common nucleus of operative fact with the original claim (that got into federal court); b) nucleus of operative facts: same transaction or occurrence

3. Owen v. Kroger: Court say couldn’t assert jurisdiction over non-diverse third-party joined under Rule 14

4. 28 U.S.C. § 1367 a) § 1367(a) grants supplemental jurisdiction over all other claims that are so related to the claim in the original action as they form the same case or controversy

i) codifies Gibbs b) § 1367 (b) cuts back on supplemental jurisdiction

i) ONLY applies to DIVERSITY cases ii) kills supplemental jurisdiction in diversity cases of claims asserted by plaintiffs:


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o against persons joined under Rule 14, 19, 20 and 24 o claims by Rule 19 plaintiffs (persons joined if feasible) o claims by Rule 24 intervener plaintiffs

4. TEST: (1) Same common nucleus of operative fact? (2) Does § 1367 kill supplemental jurisdiction. But ONLY ask if it does not get in based on diversity or federal question 5. HYPO: Suppose 2nd claim (state law) is against a second defendant. GETS SUPPLEMENTAL jurisdiction. a) § 1367(a) applies EVEN if adding other parties

E. Removal 1. The defendant removes the case state trial court to federal trial court a) one way street: can only remove from state to federal court b) simply a transfer

c) [§1441(a)] remove only to the federal district embracing the state court was it filed and only if federal court would have original jurisdiction d) MUST remove within 30 days of service of the document that makes the case removable e) can remove if the case has federal subject matter jurisdiction, but two EXCEPTIONS which apply ONLY IN DIVERSITY cases

i) there is no removal if any defendant is a citizen of the forum [§1441(b)] ii) there is no removal of a diversity case more than one year after the case was filed

f) Hypothetical: Pl. (Ala.) sues D1 (NY) and D2 (Ga.) and amount in controversy is $200,000. Claim is filed in a Ga. state court. Can the defendants remove? i) NO: There is no removal if any def. is a citizen of the forum

ii) If the pl. dismisses the claim against the GA defendant, the case is now removable; remaining def. must remove w/in 30 days, and it must be less than a year before claim was made.

g) Rose v. Giamatti: removal is proper even though the Reds and MLB are citizens of Ohio, as is the pl (Rose), because neither of those 2 def. are important to the case – they are both formal or nominal parties with no actual interest or control over the subject matter of the litigation. Since they are fraudulently joined, their joinder will not prevent removal.

2. Bright v. Bechtel Petroleum: when case is removed, federal court can hear both state and federal claims, even if federal claims are dismissed when claims arose under a common nucleus of operative fact

3. Statutes a) §1441: (a) when a cases is removed, it passes to the district court of the that embraces the place where the state action is pending; ONLY if the state action could have been brought in federal court; (b) the action is removable only if NO defendant is a citizen of the state in which the action was brought; (c) where a separate, removable federal question claim is joined with one or more otherwise non-removable claims, the entire claim may be removed and the district court can determine all issues therein

b) §1446: procedure for removal c) §1447: if the federal judge concludes that the removal did not satisfy the statutory requirements, he must remand the case to the state court from which it came.; the judge’s decision to remand is not appealable

F. Attacks on Subject Matter Jurisdiction 1. Direct Attack

a) parties may not create the jurisdiction of a federal court by agreement


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b) lack of subject-matter jurisdiction may be asserted at any time by any interested party, either in the answer, or as a motion. c) Ruhrgras Ag. V. Marathon Oil, Held: since both subject-matter and personal jurisdiction are required by the constitution and affect a federal court’s power to hear a case, there is no reason to require a district court to decide subject-matter jurisdiction first. d) DiFrischia v. NY Central R. Co., def. waited to question jurisdiction until statute of limitations ran out in state court; Circuit Court held that def. cannot play fast and loose with the judicial machinery and deceive the courts

2. Collateral Attack a) If the court in the original action determined that it had subject-matter jurisdiction, the permissibility of collateral attack depended on the weighing of a non-exclusive list of factors:

i) The lack of jurisdiction was clear ii) The determination as to jurisdiction depended upon a question of law rather than of fact iii) The court was one of limited and not general jurisdiction iv) The question of jurisdiction was not actually litigated v) The policy against the court’s acting beyond its jurisdiction

b) Supreme Court in Chicot County Drainage Dist. v. Baxter State Bank, (1940) did not allow for collateral attack on jurisdiction but did allow it in Kalb v. Feuerstein, (1940), but the decision was based on policy and congressional intent with bankruptcy legislation.

IV. VENUE – which federal district is proper? A. Basic Provisions for Venue (when pl. files in federal court) 1. 28 U.S.C. §1391 (a) for diversity; (b) for federal question 2. Two choices for venue: a) any district in which all defendants reside, OR

i) IF they all reside in different districts of the same state, venue is proper in any of those districts ii) Residence:

o for a human, domicile o for a corporation, residence is [§ 1391(c)] in ALL districts where

it subject to personal jurisdiction b) any district where a substantial part of the claim arose c) § 1391(a)(3) (any jurisdiction which the def. is subject to personal jurisdiction at the time the action is brought) or (b)(3) (a judicial district in which any def. may be found) ONLY applies if there is no district in the country where claim can be brought; usually only applies to foreign def.

3. Bates v. C & S Adjusters, Inc: venue is proper in the district in which a debtor resides and to which a collection notice was forwarded (applies § 1391) 4. may be waived

a) def. waives his objection to venue by failing to raise it on response to pl. complaint (Rule 12)

B. Transfer of venue 1. Original court is the transferor; new court is the transferee 2. Two statutes: §1404, § 1406

a) under both statutes, the transferee court must be a proper venue AND have personal jurisdiction over the defendants without wavier. Hoffman v. Blaski: a


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federal court in which suit was properly commenced was not entitled under §1404(a) to transfer a case to a district in which the pl. could not have properly commenced a suit. b) § 1404: the transferor is a proper venue

i) from proper venue to proper venue) ii) can transfer for convenience and interests of justice

iii) either party can initiate the transfer c) § 1406: the transferor is an improper venue i) Can transfer OR dismiss

C. Forum non conveniens 1. Court dismisses because litigation would be more appropriate elsewhere

a) NOT a transfer; a dismissal because the other court is in a different judicial system b) usually comes up where the better is a foreign country c) Piper Aircraft v. Reyno: Plane crash in Scotland; all decedents Scottish; Scottish law to apply; plane manufactured in Pa. Supreme Court dismisses. i) based on public and private factors

ii) private interests: a large portion of the relevant evidence is located in UK, evidentiary problems if held in the US iii) public interests: Scotland w/ high interest in the litigation

2. Takes a very strong showing that other forum is better 3. Factors in decision: a) is the pl. a resident and taxpayer? b) in which forum are the witnesses and sources of proof most available?

c) which forum will be familiar with the state law that must govern the case? 4. If the court dismisses, the court usually imposes conditions on the defendants

a) defendant must waive certain defenses (ex. statute of limitations, American style-discovery)

5. Islamic Republic of Iran v. Pahalvi (1984 NY): courts are not required to entertain suits that they have no connection with and would be a tremendous burden.

a) Rather than forum non conveniens., def may institute a suit in another court to enjoin pl. from proceeding in the objectionable forum. b) alternative: a court may grant motion by def. to stay the proceedings on the condition that he make himself available in the alternative forum

V. CHALLENGING PERSONAL JURISDICTION A. In some states, challenge personal jurisdiction through a special appearance 1. Allows def. to go into court and object, without waiving bar on jurisdiction

2. Usually ONLY allows def. to object to personal jurisdiction; if def. brings up ANY other issue, waives personal jurisdiction

B. Federal System 1. No special appearance in federal court by Rule 12 (Orange Theater Corp v. Rayherztz Amusement Corp)

2. Want to force def. various defenses and early 3. Governed by Rule 12: def can respond in 2 ways: a) answer b) bring a motion

c) Rule 12(b) lists defenses, which can be in answer or motion i) subject matter jurisdiction ii) personal jurisdiction iii) venue


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iv) insufficient process (problem with the papers) v) insufficient service of process (right documents, served wrong) vi) failure to state a claim upon which relief can be granted vii) failure to join an indispensable party d) Rule 12(g) and 12(h) impose strict rules

i) defenses 12(b)(2),(3),(4), and (5) MUST be put in first Rule 12 response, whether a motion or an answer, or they cannot be brought at all ii) 12(b)(6) or (7) can be raised for the first time any time through trial iii) 12(b)(1) can be raised AT ANY TIME

4. HYPO: pl. sues def. def. moves to dismiss for insufficient service of process, which is denied. He now has waived personal jurisdiction 5. Trial courts with broad leeway in determining the procedures they will follow in resolving jurisdictional issues (Data Disc, Inc. v. Systems Technology Associates) 6. Baldwin v. Iowa State Traveling Men’s Assoc.: If a defendant makes a special appearance contesting the jurisdiction of the first forum and he loses, he may not later contest the same issue in a later suit (collateral attack). Def. must directly attack jurisdiction in the first action by appeal (def. made a special appearance in a MO District Court, loses on his jurisdictional objection, then declines to answer. A default judgment is entered. Pl. sues in Iowa district court to enforce the judgment. Def. is bared from raising the jurisdictional objection a second time)

ATTACK ON JURISDICTION DEF. RESPONSE TO ORIGINAL SUIT

ACTION IN RENDERING COURT

ACTION IN ENFORCING COURT

Scenario One Def. appears, defends on the merits, and loses

Judgment entered for pl. Court must enforce the rendering court’s judgment, even if def. challenges personal jurisdiction b/c he has waived his objection

Scenario Two Def. makes special appearance or 12(b) motion; Court agrees no jurisdiction

In most cases, dismissed for lack of jurisdiction; Some courts may order service to cure jurisdictional defect

If the original suit was dismissed, there will be no judgment to enforce, However, pl. can file a new suit in a court that has jurisdiction over the def.

Scenario Three: Def. makes special appearance or 12(b) motion; court upholds jurisdiction and def. defaults

Enters judgment for pl. Must enforce the judgment because the def. has already litigated the jurisdiction issue and lost

Scenario Four: Def. loses on objection to jurisdiction, defends action on the merits, loses and appeals

App. court may review the jurisdiction question, although some still view a defense on the merits as a waiver of personal jurisdiction

If jurisdiction was upheld, on appeal, or waived, the court must enforce the rendering court’s decision

Scenario Five: Def. defaults, contests jurisdiction in enforcing court

Enters default judgment for pl. unless lack of jurisdiction is clear from complaint

THIS IS A COLLATERAL ATTACK – enforcing court may decide whether rendering court had jurisdiction. If it holds that it did not, it refuses enforcement. If it holds that it did, it enforces.


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VI. ERIE DOCTRINE A. Problem usually comes up in diversity cases – occurs when the federal judge should apply state law on an issue or federal law

1. Swift v. Tyson: federal courts must follow only state statutory laws, not state judge-made common-law, in cases which state law applies (pl. sued def to collect on a note, and the decision hinged on whether NY common law governed the action; narrow view of “laws of the several states in RDA) – OVERTURNED

B. BLACK LETTER PRINCIPLE (Erie R Co. v. Thompkins: pl, PA citizen, was struck by train, incorporated in NY. PA common law favored the railroad, Court held for pl.): Federal judge must apply state law (even state common law) if it is a matter of substantive law. If not (procedural instead), federal court can do either. Based on:

1. Rules of Decision Act: § 1652 (RDA): where there is no federal substantive law on point, must use state law 2. Constitution (10th Amendment): if it is an area where there is no federal law on point, it is reserved for the states

C. What is substantive 1. Easy: elements of what constitutes a claim or defense or cause of action 2. Hard: must have an analytical approach

3. Hannah v. Plummer: is there FRCP that governs this issue? If there is, apply it – federal rule ALWAYS takes precedence

a) Facts: MA case in which service to the executor of a state was served according the FRCP 3, but in violation of MA law. Which law should apply b) Rules Enabling Act – allows the federal courts to apply the Federal Rules; § 2072 c) Supremacy Clause – if there is a federal directive on point, it governs

i) federal constitution provision that mandates a court procedure trumps all state laws, whether substantive or procedural. ii) A federal statute that governs federal practice trumps conflicting state law so long as it is arguable procedural; a federal law governing a substantive matter in federal practice would fail b/c Congress would not have the authority to enact it iii) FRCP provision conflicting w/ state law is valid unless it abridges, modifies, or enlarges a substantive right – FRCP almost always valid

d) If it meets this prong, then end of issue (no Erie) 4. If there is no federal directive on point, then Erie problem a) substantive matter state law b) outcome determinative

i) Guaranty Trust v. York: (state statute of limitations ran out so pl. brought suit in federal court) SC said that statute of limitations is substantive b/c it is outcome determinative; thus, have to apply state statute of limitations. ii) if ignoring the state law affects the outcome of the case iii) want the same basic outcome in state and federal court iv) never further defined by SC and most things outcome-determinative

c) balance of the interests i) Byrd v. Blue Ridge Rural Electric Cooperative: (issue was whether pl. was an employee of the state.) state law said issue to be decided by judge, not jury. Federal law favored jury to decide. May or may not be outcome determinative. Held: if it is not clearly substantive, then state law is applied UNLESS the federal system has some interest in doing it differently (balance federal and state interests). Here, state had no


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compelling interest in judge decision and federal importance of 7th Amendment.

i) Federal Courts may apply federal rules, even if state rules are outcome determinative, if federal policy in enacting the rules outweighs the state policy ii) state laws that are basically procedural, even if outcome determinative, are not necessarily controlling

d) Twin Aims of Erie (Hanna v. Plumer): Federal Rules of Civil Procedure triumph over state outcome-determinative rules

ii) Pl. sued in Mass. district court for negligence following an auto accident, using a substituted service of process rather than in-hand service as required by Mass law. ii) At the outset of the case, ask if the federal judge ignores state law, will it cause litigants to flock to federal court. If so, apply state law because forum shopping is bad and discriminatory (favors out-of-staters). Erie is not controlling when a valid Federal Rule is in conflict with a state common-law policy

e) federal and state law that are not in direct conflict i) Some issues must be only for federal common law to decide. Hinderlider v. La Plata River & Cherry Creek Ditch: whether the water of an interstate stream must be apportioned b/w two States is a question of federal common law upon which neither the statutes not the decisions of either State can be conclusive. ii) Walker v. Armco Steel Corp. Federal Rules may not be read broadly so as to bring them in imminent conflict with state rules (carpenter injured by faulty nail brought suit in federal court within 2 years of the injury, but failed to serve process w/in the time period required by OK statute); fed. rule narrowly construed so not in conflict w/ state law iii) Burlington R. Co. v. Woods: Test is whether, when fairly construed, the Federal rule is sufficiently broad to cause a direct collision with the state law, or to control the issue b/f the court, thereby leaving no room for the operation of that law. Rule 38’s discretionary provision in assessing unmistakably conflicts with the mandatory provision of Alabama’s statute that imposes a fine always and always at 10% iv) Stewart v. Ricoh: a federal rule, established within the limits of the constitution, prevails over conflicting state law provided the federal rule is sufficiently broad to cover the issue (motion for a change of venue; federal rules should apply) v) Gasperini: NY law set a standard for how to order a new trial (dif. than federal); Appellate courts in NY could apply the standard de novo. United States Supreme Court stated:

o standard for setting standard was substantive and federal judge must apply it

o de novo review was not substantive (allocation of power b/w trial and appellate courts); federal judge does not have to apply

D. Ascertaining State law 1. Apply law of state in which court sits

a) In order to promote the desired uniform application of substantive law within a state, federal courts must apply the conflicts-of-laws rules of the states in which they sit (Klaxon v. Stentor Electric Mfg. Co.).


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2. In transfer, apply the law of the court in which the action was filed, not where the action was transferred.

a) Van Dusen v. Barrack: Defendants sought to transfer the action from federal court in PA to federal court in MA, where the state law was more favorable to their case. The Supreme Court that the “critical identity” is b/w the federal court that decides the case and the courts of the state in which the action was filed. A change in venue under § 1404 (a) generally should be, with respect to state law, but a change of courtrooms b) Ferens v. John Deere Co: Court held that in a diversity suit, the transferee forum is required to apply the law of the transferor court, regardless of who initiates the transfer

3. Mason v. American Emery Wheel Works: A federal court may apply recent trends in state law over outdated common law (pl njured by def. product and sued def., although he was not in privity of contract w/ manuf., which was required by OK precedent; Court applied dif. law under trend taken by most states)

E. HYPOS 1. Federal Rule 23 would allow diversity case to go forward as a class action. State law would not. What happens?

a) Hannah: federal law on point (Rule 23) which clashes with state law; federal rule applies if valid b) Class action allowed to go forward

2. States cutting back on recovery in medical malpractice cases, so passes a statute that says when you file malpractice case, it goes to arbitration panel (drs. and lawyers) before it goes into the court system. If you don’t like the outcome of the arbitration panel, you can proceed and go to trial. Out-of-state person injured by dr. and claims medical malpractice and sues dr. in federal court under diversity. Does the federal judge follow state law (arbitration) or federal law? a) Hannah: no federal directive on point b) Erie: is it substantive?

i) outcome determinative: unknown. Can be assumed that pl. will get less in arbitration, but don’t know ii) balance the interests: federal interest in jury trial, but state law does not do away with jury trial right altogether; and state has a huge interest in reducing cost of medical care and insurance in the state – tilts toward applying state law iii) twin aims of Erie: ignoring the state law would surely cause pl. to go to federal court; pl. don’t want to go to arbitration – want a jury who will give a lot of $$$.

c) balancing interest in favor of state; don’t want to encourage forum shopping State law applies

VII. PLEADINGS A. Complaint 1. Rule 8(a), complaint must contain a) grounds of subject matter jurisdiction b) a short and plain statement of the claim

i) Federal Court based on notice pleading: a general summary of the party’s position, sufficient to advise the party for which incident he is being sued, to show what was decided for purposes of res judicata , and


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to indicate whether the case should be tired to the court or to a jury – doesn’t require a lot of detail ii) must touch on elements of each claim iii) Diogardi v. Durning: A complaint must state just enough facts to sufficiently notify the opposing party of the claims against him to begin preparing a defense; does not need to include his legal theory

o Rule 12(e): if a pleading to which a responsive pleading is permitted is so ague or ambiguous that a party cannot reasonably be required too frame a responsive pleading, he may move for more definitive statement b/f interposing his responsive pleading. The motion shall point out the defects complained of and details desired

iv) EXCEPTIONS [Rule 9(b) and (g)] o fraud or mistake must be stated w/ particularity o elements of special damage (those that do not normally flow

from the case) must be pleaded w/ specificity c) a demand for judgment (what relief sought)

d) the elements required by Rule 8(a) apply to a defendant’s counterclaim, any third-party claim, any party’s cross-claim, as well as the pl. complaint. e) Rule 10(b): each individual claim must be set forth in a separate count f) American Nurses Assoc. v. IL: a complaint need not be dismissed if it does not set forth a complete and convincing picture of the alleged wrongdoing; a multiple-charge complaint is neither dismissible nor invalid merely because along with stated facts, which state a claim, there are a number of stated facts that do not state a claim. (Nurses suing for comparable worth and discrimination) g) Rule 84: Forms in Appendix of Forms are sufficient under the Rules

B. Defendant’s Response 1. Within 20 days of being served with process, must answer OR bring a motion 2. Answer a) Under Rule 8(b), must be respond to the allegations of the complaint i) admit, deny, or state insufficient information

o general: referring to every claim in the complaint o specific: referring to particular claims o A def. that generally admits or denies must be careful to

understand everything being claimed ii) failure to deny can constitute an admission, except as to damages

b) Zielinski v. Philadelphia Piers: When the def. makes a general denial when a specific denial (only denying one aspect of the complain) was called for and the result is that the pl. learns he has sued the wrong person, the pl. may be granted a declaratory judgment that the def. is the proper def. Def. had the information – needed to disclose it c) Under Rule 8(c) must state affirmative defenses

i) statute of limitations, statute of frauds, etc. ii) must state them or they are waived. iii) Ingraham v. United States: an affirmative defense cannot be raised for the first time on appeal [5th Cir.] iv) Taylor v. United States: a def. does not waive the right to an appeal of a statutory limit on damages if he did not raise it in the pleadings (here, jury warded greater damages than pl. requested and thus, US did not include limit in answer, so perhaps and exception here) [9th Cir.] rare


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d) a reply to the def. answer is allowable by pl: i) where the answer contains a counterclaim ii) by order of the court C. Amending Pleadings 1. Rule 15 sets forth very liberal policy on amended pleadings

2. Rule 15(a) a) pl. has a right to amend once, before def. serves answer i) can be amended after motion made b) def. has a right to amend once within 20 days of serving answer

c) if there is no right to amend, party can seek leave to amend, which “shall be freely given in the interests of justice”

3. Rule 15 (b): variance a) variance: where the evidence at trial does not match what pleaded (ex. raising an affirmative defense not raised in the pleadings)

b) other side will or will not object i) if other side does not object, evidence comes in as if it were pleaded ii) if the other side objects, the evidence is inadmissible. However, party can seek leave to amend to include the info introduced at trial into the pleadings

4. Rule 15(c): amend after statute of limitations has run b/w filing of complaint and amendment

a) add a new claim i) must get relationship back: treat the amended pleading as though it was filed when the original pleading was filed. ii) Test for relation back: If the amended complaint involves the same transaction, occurrence, or conduct as the original complaint

b) join a new party i) must get relation back as well; Rule 15(c)(3)

ii)Worthington v. Wilson: can amend a complaint, as long as there is relation back, regardless if state law prohibits, since federal law triumphs in procedure over state law (Def.’s hand injured by police; named “three unknown police officers” in complaint. Statute of limitations ran out b/f pl. had def. names.)

5. Amendments during and after trial a) Moore v. Moore: even after trial, pleadings can be amended to include issues not raised in the pretrial pleadings as long as these issues were tried with the implied consent of the adverse party (Court grants mother custody of daughter, child support, maintenance, and attorney’s fees, even though these were only requested in post-trial motion.)

i) determining implied consent: whether the adverse party received actual notice of the injection of the unpleaded materials as well as adequate opportunity to litigate them. ii) Here, custody asserted in answer; evidence of financial need child support and its inherent part of such an action; discretion of court to award attorney’s fees. Maintenance not implied.

b) Hayes v. Richfield Oil Co.: a variance b/w the allegations of a pleading and the proof will not be deemed material unless it has actually misled the adverse party to his prejudice. Def. continued insistence that the issue was not presented by the pleadings indicates that he was fully aware.


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c) Beeck v. Aquaslide: A court does not abuse its discretion by allowing an amendment to an answer, which initially admitted responsibility for the manufacture of the product, but now seeks to deny manufacturing it.

i) Rule 15(a) “Leave to amend should be freely given when justice so requires” ii) leave to amend will generally be denied only where granting it would result in actual prejudice to the other party, and the burden is on that other party to show such prejudice iii) the def. did not wait in bad faith, so amendment should be granted

D. Sanctions 1. Rule 11 requires the pl. lawyer to sign off on the complaint to certify that the complaint is a good-faith, truthful complaint. Establishes strict guidelines for sanctioning parties and attorneys for submitting misrepresentations to court or for bringing frivolous lawsuits 2. Hadges v. Yonkers Racing Corp.: Rule 11 sanctions require compliance with the 21-day safe-harbor, and an attorney may rely on the objectively reasonable representations of his client in avoiding Rule 11 sanctions for submitting false statements to a court

a) safe harbor: if a party filed a motion for sanctions, the other party has 21 days to fix complaint w/o sanctions imposed; after 21 days, sanctions can be imposed.

VIII. JOINDER A. Basics

1. Determine scope of the litigation 2. REMEMBER SUBJECT MATTER JURISDICTION in this section – every single claim in federal court must be assessed for smj

B. Proper Parties [Rule 20(a): who may be joined] 1. TEST: co-pl./co-def. may sue together if each pl. claims a) arise from same transaction or occurrence AND b) raise at least one common question 2. then make sure there is subject matter jurisdiction C. Claim joinder by pl.

1. Rule 18(a): pl. may join any claims against the def, regardless to whether they are related, but it is not required to 2. But still must meet subject matter jurisdiction 3. Harris v. Avery: causes of action arising from the same transaction may be joined in one suit (Avery sued Harris for slander and false imprisonment) a) now Rule 18(a) allows for joinder of all claims, even if unrelated

b) Sporn v. Hudson Transit Lines: if all of the joined claims involve different rules of law, testimony, evidence, and would confuse a jury, in the interests of justice, they should be severed [NY], [Rule 42(b)]

4. Applies to any “pleader,” any party seeking relief from another party by counterclaim, cross-claim, or third-party claim. However, a cross-claimant must have a valid claim arising out of the same transaction or occurrence first, then may join unrelated claims

D. Claim joinder by def. 1. Counterclaim a) claim against an opposing party b) Compulsory counterclaim i) Rule 13(a)

ii) arises from same transaction or occurrence as pl. claim iii) must assert or it is waived


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iv) always filed with answer v) Mitchell v. Federal Intermediate Credit Bank: a party cannot use part of a contract as a defense in one suit and the remainder as an offense in a subsequent suit. (Mitchell used the proceeds from the sale of his potato crop as security for two loans, and then claimed the bank kept the proceeds for itself and never gave him the $). vi) If a counterclaim is logically related to the opposing claim, it cannot be dismissed. Great Lakes Rubber Corp. v. Herbert Cooper Co. (Pl. claims against def. were originally dismissed for lack of smj, but the federal court maintained def. counterclaim, and then pl. counterclaimed to counterclaimed.)

o logically related: separate trials on each of their respective claims would involve a substantial duplication of effort and time by the parties and the courts

o Moore v. New York Cotton Exchange: Pl. sought to compel def. to install a price quotation ticker in pl. place of business. Def. counterclaimed for damages. Court held def. counterclaim compulsory, stating that “transaction” was a flexible term; need not have an immediateness of connection. Facts that were essential to counterclaim alleged in claim; doesn’t matter if they are not identical

vii) res judicata bars def. from bringing second suit if not brought under compulsory counterclaim viii) exceptions: claims by the def. which for just adjudication require presence of add’l parties of whom the court cannot get personal jurisdiction, in rem or quasi in rem claims

c) Permissive counterclaim [Rule 13(b)] i) does not arise from same transaction or occurrence as pl. claim ii) can sue on it separately if desires, but not required to

e) HYPO: Pl. (NY) and def (Fla.) in car accident, pl. sues for $100,000. Def. asserts a compulsory counterclaim against pl. for $90,000

i) claim gets in on diversity ii) counterclaim gets in on diversity CHANGE: same facts except compulsory counterclaim is for $45,000

i) counterclaim does not exceed $75,000 and is not a federal question. Can only get in on supplemental jurisdiction.

o § 1367(a) grants supp. jur. b/c arises out of same transaction or occurrence as pl. claim

o § 1367 (b) does not take it away – only kills claims by pl. CHANGE: Suppose it was a permissive counterclaim No supp. jur. b/c § 1367(a) does not grant if not out of same occurrence

2. Cross-claim [Rule 13(g)] a) claim against a co-party

b) MUST arise from the same transaction of occurrence as the underlying dispute (that got into federal court). LASA Per L’Industria Del Marmo Societa Per Azioni v. Alexander (several claims arose out of contracts to construct Memphis City Hall)

i) The words “transaction or occurrence” should be liberally interpreted – if it arises out of a related transaction, still allowed ii) Here, all of the claims deal with the marble and who is responsible for the defects. Many of the same factual and legal issues will be presented.


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iii) The mere fact that the two occurrences were nearly contemporaneous in time does not mean that they arise out of the same transaction. Liebhauser v. Milwaukee Elec. Ry. & Light Co. iv) Rule 13(g) does not authorize a pl. to state a cross-claim against a co-pl. a claim arising out of the transaction or occurrence which is also the subject matter of their common complaint against the defendant. Danner v. Anskis.

c) NEVER compulsory d) Once cross-claim made, the parties are opposing parties and the other party must assert any compulsory counterclaims that would arise

3. HYPO: Three-way car-crash; pl (NY) sues def1 (Pa.) and def2 (Pa.). Each claims $80,000 in damages against each. a) in federal court b/c every pl. diverse from every def. b) D1 must file a counterclaim over pl. i) Gets into federal court under diversity c) D1 may file a cross-claim against D2. i) No federal question ii) No diversity – Pa. v. Pa. iii) Can only get in on supplemental jurisdiction

o § 1367(a) grants supplemental jurisdiction (same transaction or occurrence)

o § 1367 (b) applies only in diversity cases, but only kills jurisdiction by PLAINTIFF.

o Therefore, supplemental jurisdiction E. Necessary and indispensable parties [Rule 19: who must be joined] 1. If an absentee (non-party) is necessary, the court may force him in

a) Bank of California v. Superior Court: mandatory joinder only arises where parties are necessary and indispensable to an action (Pl. claimed entitlement to decedent’s estate and sued the executor and the residuary legatee. The defs. motioned to join other beneficiaries, denied)

i) necessary: a party so interested in the controversy that they should be made parties to enable the court to do complete justice ii) indispensable: non-party’s rights or duties would be adversely affected by a judgment.

2. First, ask if absentee is a necessary party. Necessary party (three tests) is: a) 19(a)(1): without absentee, the court cannot accord complete relief; efficiency policy; avoid multiple litigation b) 19(a)(2)(1): absentee’s interest may be harmed if she is not joined. (avoiding harm to absentee) c) 19(a)(2)(2): absentee’s interest may subject def. to multiple or inconsistent obligations (avoiding harm to def.) d) Temple v. Synthis: joint tortfeasors are not necessary parties e) HYPO: A has 1,000 shares of stock. B claims says he owns the stock jointly and paid half of it. B sues the corporation, C and ask the corporation to cancel A’s stock. A is a necessary party.

3. Then ask if joinder of the absentee is feasible a) joinder is feasible if absentee is subject to personal jurisdiction and does not destroy complete diversity b) [Rule 19(b)] If joinder is not feasible, must determine if (1) proceed w/o absentee, or (2) dismiss the case i) decide by weighing Rule 19(b) factors


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o to what extent judgment in person’s absence would be prejudicial to the person or the other parties

o the extent which protective provisions would lessen or avoid the prejudice

o whether a judgment rendered in the person’s absence would be adequate

o whether pl. will have an adequate remedy if the action is dismissed

ii) If case is dismissed, absentee is indispensable c) Haas v. Jefferson Nat’l Bank: pl. and Glueck bought shares of stock together from bank and each owned half; pl. wanted to put his name on half of the stock so sues the bank. Held: case dismissed b/c Glueck a necessary and indispensable party and cannot be joined.

F. Impleader 1. The defendant is joining someone new who owes her indemnity or contribution on the underlying claim (ex. Insurance Co., joint tortfeasor)

2. Governed by Rule 14 a) Under Rule 14(a), a party may implead a third-party defendant for indemnity even where the state law does not recognize accelerated indemnity proceedings (as long as rights under law still protected). Jeub v. B/G Foods (pl. sued def. for contaminated ham, and obtained an order impleading producer for indemnity) [also Erie question]

i) right to implead is procedural, and therefore governed by federal law in diversity cases

b) can ONLY implead another party liable to him (ex. a policeman cannot implead another policeman in a battersuit b/c pl. mistook one for the other b/c the second policeman is not liable to the first; def. has to ride out mistaken identity) c) allows the impleaded party to try to escape liability by asserting defenses against both the pl. and def. trying to implead him d) Under Rule 14, must implead w/in 10 days on answering the complaint or up to the court’s discretion i) uphold: efficiency, avoidance of multiple suits

ii) deny: undue delay, complication of issues, potential prejudice to pl. from impleading a sympathetic third party

3. Claims can be asserted by third-party defendant against the original pl. w/o an independent jurisdictional basis if supplemental jurisdiction is appropriate. Revere Copper & Brass v. Aetna Cas. & Sur. (Def. was sued in connection w/ a construction contract, impleaded Fuller, the builder, who brought a counterclaim against pl.) a) Rule 4(k)(1)(B): 100 mile bulge rule 4. § 1367 prohibits pl. from impleading a third-party def. on a cross-claim if no basis for federal jurisdiction exists.

5. HYPO: Pl sues Def. in federal court. Def. impleads TPD (third party def.). Pl. then claims against TPD (Rule 14(a) says that’s permissible if it arises from same transaction or occurrence). TPD can assert a claim against pl. (Rule 14(a) if arises from same transaction or occurrence). a) subject matter jurisdiction must be determine for each and every one

G. Intervention [Rule 24] 1. Absentee brings himself in on own initiative, and chooses which side to come in on. 2. Two types:

a) intervention of right [Rule 24(a)(2)]: A has a right to intervene if statute confers an unconditional right to intervene OR his claim is related to the property


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or transaction which is the subject of the action, his interests may be harmed if not joined, AND his interest is not adequately represented.

i) Smuck v. Hobson: third parties may intervene after a judgment on the merits, provided that the conditions in Rule 24(a) are satisfied. (Board of Education sued for discriminatory practices; rights of minority children not adequately represented) ii) “motive” (ex. economic v. governmental) different than interest.” National Resources Defense Council Inc v. New York State Department of Environmental Conservation (not allowing API to intervene) iii) can also intervene under Rule 24(a) if a statute gives him that right (ex. statutes that allow the US to intervene)

b) permissive intervention [Rule 24(b)(2)]: A must show that his claim or defense has at least one common question with the pending case (discretionary with the court) or a statute confers a conditional right to intervene

c) must assess subject matter jurisdiction over these claims d) If the case may set an adverse precedent whose stare decisis effect will hamper him, pl. permitted intervention of right. Atlantis Dev. Corp. v. U.S. (If Acme does not prevail on its basic contentions, which are part and parcel of Pl. claim, the only way by which pl. can win is to secure a rehearing en banc, with a successful overruling of the prior decision, or failing in either or both of these efforts a reversal of the earlier decision by the Supreme Court –formidable)

3. Decision whether to allow a party to intervene is based on a balancing of needs of the interests of the intervenor against the burdens on existing parties if intervention is allowed; the intervenor must only show that their interest may be impaired. Timeliness of the motion is also important in deciding whether it would be allowed.

IX. CLASS ACTION [Rule 23] A. Initial requirements [Rule 23(a)] 1. numerosity: too numerous for practicable joinder (~60+) 2. commonality: there must be some questions in common to the class 3. the representatives’ claim must be typical of those of the class members

a) General Telephone Co. v. Falcon: a specific link must exist b/w a class representative’s claims and the claims of the entire class (pl. brought suit on behalf of Mexican-American employees and applicants who were denied positions or promotions; Court says he does not adequately represent everyone)

4. the representative (and his lawyer) must adequately represent the class a) Hansberry v. Lee: Where a class member was not adequately represented, giving res judicata effect to the judgment violates due process (Def. the black purchaser of land subject to racially restrictive sales covenant, avoided prior class action holding the covenant was valid)

B. Types of Class Action [Rule 23(b)]; 3 types of class actions, must fit into one of them 1. 23(b)(1) classes are those in which the prosecution of separate actions by or against individual members of the class would create a risk of:

a) inconsistent or varying adjudications w/ respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the claim, OR b) adjudications w/ respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impeded their ability to protect their interest


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2. 23 (b)(2) a) 23(b)(2) “party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief w/ respect to the class as a whole.” b) Marisol v. Giuliani: 23(b)(2) class certified of all children who are the child welfare system and those not who are at risk of neglect or abuse. i) district court with discretion ii) need to split up into subclasses [Rule 23(c)(4)]

3. 23(b)(3) Questions of law or fact common to the members of the class predominate over any questions affecting only individual members, that a class action is superior to other available methods for fair and efficient adjudication of the controversy. Must show:

a) common questions predominate b) the class action is the superior method for resolving the suit C. Mass-torts 1. difficult to certify 2. can certify sub-issues

3. Causey v. Pan American World Airlines: Mass-accident tort litigation not appropriate as a class action, usually

a) plane crash w/ people from dif. states and countries too hard to apply all of the different laws b) strong interest for each person (personally affected) to litigate own claims b/c nature of issue

D. If 23(a) and (b) are met, then the court certifies the action. If the class is certified: 1. the court must define the class (12/1/2003 amendment) 2. the court must appoint class council

3. If the class is certified under (b)(2), and the court determines that it had to have been a (b)(3) certification, notice to all class members is not required. Wetzel v. Liberty Mutual Insurance Co.

E. Due Process 1. For (b)(1) and (2) class actions, adequate notice is required (must conform to due process standards); but class members may not opt out all class members are bound by the decision 2. In 23(b)(3) class action, the court must give individual notice to all members reasonably identifiable [as stated in 23(c)(2)(B)]

a) must give them right to opt out of the class b) Eisen v. Carlisle & Jacquelin: individual notice must be given to all members who can be identified with a reasonable effort – best notice practicable under the circumstances. (Pl . alleged that def. conspired to fix the commissions charged on trades of odd lots of shares on the New York Stock Exchange in violation of antitrust and securities laws.)

i) mail notice to all class members whose names can be obtained w/ reasonable certainty ii) the named pl. bears the initial cost of notification; if they won’t or can’t, the class action will be dismissed.

3. All members bound except those who opt out of a 23(b)(3) motion a) Under Due Process, class members must be notified by “Best notice practicable under the circumstances” – Rule 23 (c)(2)

4. Cannot be bound if were not joined. Martin v. Wilks (black firefighters entered into consent judgment to city; then tried to bind white firefighters by the decision)

F. Settlement or dismissal must be approved by the court [Rule 23(e)]


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1. In EVERY class action, there must be adequate notice to every class member, before the case is settled or dismissed (12/1/2003 amendment) 2. In the notice, under 23(b)(3) class action, must give ANOTHER chance to OPT OUT. 3. Amchem Products, Inc.: class action settlement offers must meet the Rule 23 requirements of predominance, superiority, adequate representation, and notice before they may be certified (classes of asbestos victims cannot combine ill plaintiffs with pl. who were exposed, but are not yet ill)

G. Subject Matter Jurisdiction 1. federal question 2. Under diversity jurisdiction

a) for citizenship of the class, look ONLY at the representative (He must be diverse from the defendant). Supreme Tribe of Ben-Hur v Caulble.

b) Amount in controversy (law unclear) i) Zahn: every member must claim more than $75,000, so does Leonhardt v. Western Sugar Co, holding § 1367 provision for supplemental jurisdiction did not allow for pl. who did not meet jurisdictional amounts to be pl. in class action suits ii) Snyder v. Harris, 394 U.S. 332 (1969): separate and distinct claims cannot be aggregated, and thus the class members’ claims cannot be aggregated to satisfy jurisdictional amount requirements. Aggregation has only been permitted (1) in cases in which a single pl. seeks to aggregate two or more of his claims against a single defendant; and (2) in cases where two or more pl. unite to enforce a single title or right in which they have a common or undivided interest. iii) There is an argument that supplemental jurisdiction statute (§1367) has overruled Zahn

o 5 Circuits say its okay as long as the representative meets the amnt. in controversy (4th, 5th, 7th, 9th 11th)

In re Abbott Laboratories, 51 F.3d 524 (5th Cir. 1995): Lousianna statute vested the right to attorney’s fees in the named pl. directly, rather than as a class as a whole. Thus, the Fifth Cir. held that it had diversity jurisdiction over the named pl., even though their individual claims were well-under the amount in controversy requirement. The addition of attorney’s fees brought each named pl. over the jurisdictional amount, so the holding was consistent with Zahn.

o 3 Circuits say that EVERY member must meet the amount in jurisdiction (3d, 8th, 10th)

o 2d Cir. has not taken a stance iv) Came to SC in 1999, but 4-4 split with NO opinion

d) Phillips Petroleum v. Shutts: minimum contacts are not required for personal jurisdiction in class actions, but the forum state must have sufficient interests in the claims to assert its state law to all claims (pl. brought class action to recover royalty payments) and there are some safeguards necessary to protect the members

i) notice must be the best practicable (Mullane v. Central Hanover Bank) ii) opt out provision iii) adequate representation (Hansberry v. Lee)


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X. DISCOVERY A. Rules very liberal about discovery B. Required Disclosures [Rule 26(a)] (even if no one asks for it): 3 types

1. 26(a)(1) Initial disclosure: id relevant people and documents (only need to describe documents) and basis for damages sought

2. 26(a)(2): Experts 3. 26(a)(3): Pre-trial disclosures

4. Comas v. United Telephone Co. of Kansas: the court will enforce an unequivocal agreement b/w two parties to produce documents, but will not enforce disputed or unclear terms of such agreements

C. Discovery tools 1. Deposition (Rules 30 and 31) a) deponent gives oral testimony under oath b) can depose a party or non-party c) should subpoena a non-party, otherwise not required to show up

d) Cannot use the excuse that deponent is in bad health or too old to avoid deposition. Haviland v. Montgomery Ward e) each side is limited to 10 depositions unless the adversary agrees to more or the court issues an order allowing more and limited to 7 hours and one day

2. Interrogatories (Rule 33) a) written questions answered in writing under oath and signed b) limited to 25 questions

c) can only be sent to parties; cannot use w/ non-parties d) Interrogatories that require statements of opinion in non-complex lawsuits or interrogatories that are burdensome may not be compelled. Leumi Financial v. Hartford Indemnity Corp. e) in interrogatories, statements can be changed within 30 days, if the person requests to make handwritten changes.

3. Requests to produce (Rule 34) a) documents, products, evidence, etc.

b) available against a party or non-party, but MUST subpoena the non-party or he doesn’t have to produce the evidence c) A prima facie showing that someone has control over documents, even if they are not in his actual possession, is sufficient to force the party to comply with a request to produce those documents (pl. sued def, but failed to comply with an order to produce documents which someone else possessed, but pl. could exercise influence to obtain). Hart v. Wolff.

4. Medical exam (Rule 35) a) must be court-ordered b) can take medical exam of party or someone under the party’s control

c) a physical or mental examination may be ordered when good cause exists and when a party’s physical or mental condition is in controversy. Schlagenhauf v. Holder (bus driver caused accident and objected to request to submit to a number of physical and mental examinations)

5. Request for admission (Rule 36) a) can only be sent to parties b) “admit or deny” certain facts c) if not denied, it can be considered admitted.

d) once an admission is made, it cannot be retracted in court. McSparran v. Hanigan (pl. admitted ownership, which was the only issue in question; retracted


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it during trial. Def. moved for summary judgment. Went to jury. Court said it should not have gone to jury).

D. Scope of Discovery 1. Rule 26(b)(1): you can discover anything relevant to a claim or defense of any party a) relevant = reasonably calculated to lead to admissible evidence b) can discover things that are not admissible at trial, except:

c) Blank v. Sullivan & Cromwell: Court allowed discovery of employer’s past hiring and promotion procedures for Title VII suit, even though they were not directly related to the instant case, because it was relevant

2. Privileged matter is not discoverable a) attorney-client, doctor-patient, spousal b) protects confidential communications c) Marrese v. American Academy of Orthopedic Surgeons: b/f allowing discovery of confidential material, court can view in camera, only allow redacted version, do other discovery first, etc. (Drs. wanted to see member’s applications in suit when denied membership) Judges have broad discretionary authority to shape the scope and sequence of discovery

3. Work product immunity (trial preparation materials [Rule 26(b)(3)]) a) material prepared in anticipation of litigation immune from discovery

b) Does not have to be generated by an attorney. i) Ex. Boat operator hired by A for trip, and boat sinks, injuring A. Knowing that lawsuit is coming, detective goes and does work. This work is protected from discovery ii) Avoids parasite product – other lawyers should do own work

c) Can override work product protection if (qualified immunity): i) substantial need ii) not otherwise available

iii) still, some work product is absolutely protected: mental impressions, conclusions, opinions, and legal theories

d) Hickman v. Taylor: absent a showing of need, a party is not entitled to obtain copies of an opposing attorney’s notes and memoranda acquired through interviews with witnesses (Boat sank, and pl. sought to obtain copies of written statements and interviews acquired by opposing counsel) e) absolute immunity: the court shall protect against the disclosure of mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation

E. Orders and Sanctions 1. A party who exhibits gross negligence in responding to discovery requests is subject to the most severe discover sanctions. Cine Forty-Second Street Theater Corp v. Allied Artists Pictures Corp. (Pl continuously failed to adequately respond to interrogatories, case dismissed) 2. Under Rule 26(b)(1), an objection may be made to a discovery order 3. Protective order [Rule 26(c)] 4. Compelling discovery [Rule 37(a)]; sanctions under Rule 37(b)

XI. PRETRIAL ADJUDICATION (ADJUDICATION W/O TRIAL) A. Rule 12(b)(6): Motion to dismiss for failure to state a claim (demurrer) 1. Court does not look at evidence – looks only at the complaint

2. If all the facts in the compliant were true, would she be entitled to judgment as a matter of law?


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a) if not, dismiss the case (usually w/o prejudice so pl. can fix) b) if so, then motion to dismiss is denied

B. Summary Judgment [Rule 56] 1. The Court can look at evidence (affidavits and the “fruits of discovery”) 2. Standard for summary judgment [Rule 56(c)]: moving party must show that a) no dispute as to material fact b) entitled to judgment as a matter of law c) weed out cases in which trial is not necessary

3. If the evidence shows that there is no dispute as to the facts, the court can enter judgment as a matter of law

a) moving party bears the heavy burden of proving that there is no genuine issue as to any material facts. Adickes v. S.H. Kress Co (pl., a white teacher at a freedom school, was denied service in def. restaurant, and then arrested; pl. claimed conspiracy; def. motion for summary judgment reversed) b) non-moving party then bears the burden of showing that a factual dispute exists. Lundeen v. Corner (def., wife of decedent, sought summary judgment against a claim for payment of life insurance proceeds by former beneficiaries to decedent’s policy; pl. denied cross-examination). Where one party’s affidavits and exhibits are conclusive, summary judgment is appropriate. c) It is improper to grant summary judgment based on pl. explanation of his intent, which is disputed by def, but not contradicted by def. evidence. Where facts reside in the mind of a party, cross-examination should be allowed. Cross v. United States (pl. challenged educational deductions taken by Cross on his tax return, alleging that some of the expenses were vaction-related)

4. Parties give the evidence to the court (usually by affidavits, depositions, interrogatories, admissions) 5. Not entered into lightly, but SC in 1980s sent message to lower courts to grant summary judgment more easily

a) Celotex Corp. v. Catrett: a moving party may meet the burden of persuasion by demonstrating that the nonmoving party failed to supply sufficient evidence of a genuine dispute of material fact or an essential element of their claim. (pl. filed wrongful death motion against def. but pl. failed to produce any evidence to support allegation that decedent had been exposed to def. asbestos). b) def. can motion for summary judgment by arguing that the pl. lacks evidence supporting an element of her claim c) If the judge sees an inference on the facts as more plausible, the judge can grant summary judgment on that basis d) Still, discretionary i) rarely granted for the party with the burden at trial ii) its usually tougher in tort than contract

iii) NEVER resolve dispute of facts on summary judgment – don’t weigh the value of the evidence or credibility

C. Default Judgment 1. A default judgment may not be entered against a defendant who has answered a complaint and yet fails to appear at trial. Coulas v. Smith 2. Governed by Rule 55

XII. TRIAL A. The right to a jury trial 1. Jury resolves dispute of fact and damages; judge decides the law 2. In federal court, the 7th Amendment preserves right to jury trial in civil cases


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a) applies only to Federal Courts b) preserves the right to jury at law, but not equity i) locks into historical test – as of 1791

ii) Determination of right to jury trial today is determined by the English Common Law in 1791 iii) difference b/w law and equity mostly based on remedies

o at law, principle remedy is damages o at equity, remedies available in situations where damages would

not be sufficient injunction specific performance rescission reformation

iv) If one case has claim for equitable and legal remedies: o B/f 1959: no jury on any issue if the equitable remedy was more

important and central to the relief sought o Beacon Theaters (1959): a prior determination of equitable

claims may not be used to deprive a right to jury trial on legal issues; most legal issues should be tried b/f equitable ones (def. sought jury determination of antitrust claims raised in response to equitable claims for declaratory judgment brought by pl)

o Dairy Queen (1960): an action seeking money damages, even phrased in equitable terms, cannot be considered purely equitable and thus, a jury should decide legal, factual issues (def sought an injunction and damages for breach of contract when a licensee and franchise owner failed to comply with the payment scheme. Pl. was denied a jury trial on the grounds that the relief sought was purely equitable)

Overruled the clean-up doctrine o Rules:

Jury right determined issue-by-issue If an issue of fact underlies both questions of law and

equity, right to a jury exists Jury issues usually tried first

c) Rule 38(b): jury must be demanded in writing, otherwise waived; if either party requests jury trial, and it meets the test, then there will be a jury trial d) Ross v. Bernhard: to determine if legal or equitable, first look at the pre-merger custom, second to the remedy sought, and third to the practicable abilities and limitations of juries.

i) Some lower federal courts have read the third consideration as a basis for denying jury trials in cases which the number of parties, complexity of the issues, or conceptual sophistication of the evidence and applicable substantive law support a finding that a jury would not be a rational and capable fact-finder ii) Markman v. Westview Instruments: the construction of a patent is a legal question to be decided by a judge rather than by a jury; decision rests partially on complicatedness of patents (pl. sued for violation of patent for dry-cleaning inventory tracking system)

e) Court very liberal in applying 7th Amendment right to jury i) An action for breach of fair representation, although analogous to equitable claims at common law, carries a right to jury trial. Chauffeurs,


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Teamsters, and Helpers Local 391 v. Terry (employees sued union for violations of fair representation.). Court places a lot of emphasis on remedy

B. Jury Selection [Rule 48] 1. Voir Dire a) each side has unlimited strikes for cause: potential jurors is bias

i) Flowers v. Flowers: a prospective juror who demonstrates bias or prejudice toward the litigants or subject matter of the action should be excluded from the jury pool (divorce case, mother drank; prospective juror said she was completely opposed to alcohol; court says she should have been dismissed)

b) each side w/ 3 peremptory strikes: no reason necessary i) Supreme Court said that peremptory strikes must be used in a race and gender-neutral way. Edmonson v. Leesville Concrete, JEB v. Alabama. ii) Once the party raising the race/gender challenge establishes a prima facie case of discrimination, the proponent of the preemptory strike must submit a racially-neutral explanation. The party raising the challenge must then be given the opportunity to show pretext. The trial court must decide whether the party raising the challenge has proven purposeful discrimination. The party brining the challenge bears the ultimate burden of persuasion. Hidalgo v. Fagen.

2. Number of People a) Juries of less than 12 permitted. Juries of six are permissible for civil cases. Williams v. Florida, Colgrove v. Battin

C. Motions 1. Motion for judgment as a matter of law (directed verdict) [Rule 50(a)] a) takes case away from the jury

b) standard: reasonable minds could not disagree on the result; motion for at the close of pl. evidence c) Denman v. Spain: a directed verdict is proper when the party bearing the burden of proof fails to meet that burden (pl. sued the executrix of an estate of Ross, who allegedly caused an accident on a foggy day) d) Kircher v. Atchison, Topeka, & Santa Fe. Co: pl sued for the loss of a hand which had been run over by def. train when pl. tripped over hole 13 ft. from tracks. A judgment for the pl. was affirmed. The courts will not permit judgment n.o.v. if there is a possibility that the evidence supports the jury verdict

2. Renewed motion for judgment as a matter of law (j.n.o.v.) [Rule 50(b)] a) let the case go to the jury and let them decide, but they reach a decision that reasonable people could not reach b) judge enters judgment for other party c) *At the close of ALL evidence, party must move for judgment as a matter of law, otherwise waives right for renewed motion for judgment as a matter of law (Must make 50(a) motion at close of all evidence or waive 50(b) motion)

3. Motion for new trial [Rule 59(a)] a) judgment entered, but the court is convinced that there was error and there should be a new trial b) almost limitless grounds for a new trial and judge has wide discretion i) judge made a serious error at trial ii) prejudicial misconduct (ex. jury misconduct)

iii) trial judges may grant or deny new trials under circumstances which would prevent j.n.o.v. or directed verdict. Aetna Cas. & Sur. v. Yeatts (pl.


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sought declaratory judgment that def. was engaged in illegal abortion at time liability arose.)

o Dyer v. MacDougall, (2d Cir. 1952): The important difference b/w a trial judge’s power on motion for a new trial and motion for directed verdict is that on the new trial motion, he may base his action on his belief or disbelief of the witnesses, but on a directed-verdict motion he may not

c) can grant entire new trial or just partial (damages or liability) d) can also be conditional i) liability assessment is correct (no doubt) ii) damages are way off

o Remittitur: jury assesses damages too high court can tell pl. that new trial will be granted unless pl. will remit and accept lower damages

Permissible in the federal courts and in most state courts Powers v. Allstate Ins. Co. the trial court or appellate

court can set the reasonable amount for remittitur [Wisc.]

o Additur: jury assesses damages too low court can tell def. that def. must add to damages or a new trial will be granted

Unconstitutional in the federal courts (violates 7th Amendment)

States can permit additur • Fisch v. Manger: a court may practice additur

w/o violating constitutional right to a jury trial [NJ]

e) Jury Misconduct i) a judge may mold an incoherent jury verdict to coincide with the substance of the jury’s declaration only if the verdict clearly expresses the intent of the jury. Robb v. Hickey (jury held that pl. was contributorily negligent, but still assessed damages, in conflict with the law; new trial granted b/c too ambiguous to mold) ii) a juror’s affidavit cannot be used to attack the verdict Sopp v. Smith iii) damages assessed by an average of what each juror assesses damages at (quotient verdicts) is misconduct by the jury and grounds for a new trial. Huckle v. Kimble

f) Relief from Judgment i) Rule 60 (a): relief from clerical mistakes may be corrected at any time by the court or by motion of any party ii) mistake, excusable neglect [Rule 60(b)(1)]

o Hulson v. Atchison, Topeka & Santa Fe Ry :Under Rule 6(b), the trial court cannot extend the time for taking any action under rules 50(b), 59(b) and others. If the motion for a new trial is untimely, the trial court must deny the motion. Ignorance of the rules resulting in an agreement for an unauthorized extension of time cannot serve to furnish grounds for relief under 60(b).

o Briones v. Riviera Hotel & Casino: SC test articulated that, “although inadvertence, ignorance of the rules, or mistakes construing the rules do not usually constitute excusable neglect, it is clear the “excusable neglect” concept is somewhat elastic and not limited strictly to omissions caused by circumstances


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beyond the control of the movant. Four factors should be considered in determining if the neglect was excusable:

• the danger of prejudice to the opposing party • the length of the delay and its potential

impact on judicial proceedings • the reason for the delay • whether the moving party acted in good

faith iii) newly discovered evidence [Rule 60(b)(2)]

o Patrick v. Sedwick: pl. injured in accident caused by def. negligence. During the years of trial and appeal, new medical technique developed that would lessen pl. injury. Court say damages could not be mitigated b/c newly discovered evidence must be in existence at the time trial took place

o Swift Agricultural Chemical Corp. v. Usamex Fertilizers: patent infringement suit based on reaction time; court held for pl. Subsequently, def. brought forth evidence to new device to more accurately measure rxn time – his was shorter than pl. Court reversed b/c rxn time was in existence at time of trial; only the way to measure it was not

iv) Fraud [Rule 60(b)(3)] o Smith v. Great Lakes Airlines, Inc: Action can only be set

aside for extrinsic (ex. fraudulently inducing an opposing party not to file suit until after the statute of limitations bars suit), not intrinsic fraud (ex. lying witness) which trial is designed to discover

XIII. RES JUDICATA AND COLLATERAL ESTOPPEL A. Res judicata (Claim Preclusion) 1. Only get one suit per claim

a) Rush v. City of Maple Heights: a pl. may only maintain one action to enforce rights for damage to property and self (Rush in accident and sued in two courts: one for property, one for personal injuries) b) no principle of law or equity allows a federal court to reject res judicata principles. Federated Dept. Stores v. Moitie (9th Cir. did not apply res judicata to actions that were dismissed on the basis of an opinion that had later been effectively overruled. Reversed.) c) A single cause of action stemming from a breach of single, indivisible contract cannot be split into separate, distinct causes of action. Jones v. Morris Plan Bank of Portsmouth (Bank won a judgment against Jones for 2 missed car payments and tried to sue Jones again after the sold the automobile w/o consent)

2. Must show that both cases were brought by the same claimant against same def. 3. Must show that case ended in a valid final judgment on the merits a) does not matter if anything was litigated

i) default judgment is on the merits ii) jurisdiction, venue, and indispensable parties NOT on the merits [Rule 41 (b)]


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iii) Anguiano v. Transcontinental Bus System: [Az.] first suit dismissed for failure to comply w/ a court order (did not give costs); barred subsequent suit for same issue by pl. iv) Rinehart v. Locke: [7th Cir.] dismissal for failure to state a claim is res judicata to subsequent suits – Rule 41(b) taken literally

v) Semtek: Court in the 2nd case applies law re: preclusion used by ct. in the first case. Here, 1st suit in fed. ct, 2nd suit in state court. Under general rule, state court should use the federal ct’s rule of preclusion. However, ct. adopts preclusion rule of state in which it sits.

state court (Md.) had to apply the law of Cal. where the first suit was held.

In Cal., dismissal for statute of limitations not on the merits. Therefore, case should be reheard.

b) agency decisions – United States v. Utah Construction and Mining Co i) courts apply res judicata if agency was acting in judicial capacity

ii) To determine if agency is acting in a judicial capacity, look at o Whether adequate notice was given to parties o Right of parties to present evidence o A formulation of issues of law and fact o A rule of finality o Other procedural elements

iii) University of Tennessee v. Elliott: specific Congressional intent to prohibit state agency decisions from precluding Title VII claims agency decision does not effect Title VII lawsuit

4. Must show that both cases involve the same claim a) different definitions of “claim”

b) majority view (federal law adopts): the claim is all rights arising from the transaction or occurrence c) minority view (“Primary Rights”): separate claims for each right that’s been invaded

i) Smith v. Kirkpatrick [NY]: pl. brought suit for breach of contract but didn’t comply w/ Statute of Frauds, so dismissed. Pl. than brought suit in quantum meriut to recover. Def. claimed res judicata. Court reversed dismissal. Test of “same claim” is whether the same right invaded and same evidence to be used. Here, no. ii) Heaney v. Board of Trustees: a previous mandamus suit for reinstatement, which was denied, does not bar a subsequent suit for damages for wrongful dismissal. iii) Bogard v. Cook: member of a class action is not barred from bringing suit for personal injuries because (a) did not know he could claim injuries in first suit (2) if he could, may have not been maintainable as class action; (3) some injuries occurred after the close of evidence.

5. HYPO: L and E get into car accident, both injured. a) L sues E for personal injuries from wreck. A valid final judgment on the merits is entered. L then sues E for property damage for the same wreck. Do we dismiss case #2? i) Both cases brought by L against E ii) First suit ended in a final judgment on the merits iii) Same claim?


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o majority view: yes, because only one accident, and L sued twice. Second suit is res judicata.

o Minority view: no, because suing on a different right (personal injury and property damage)

b) Same accident. Case #1: L sues E and there is judgment on the merits. Case #2: E sues L. Res Judicata? i) both cases NOT brought by the same parties – fails ii) Second case is barred by compulsory counterclaim [Rule 13(a)]

6. merger: res judicata where the claimant won case #1 7. Bar: res judicata where the claimant lost case #1

B. Collateral Estoppel (Issue Preclusion) 1. Narrower than res judicata – focuses on issue litigated in case one that comes up in case one 2. Must show (1) that case 1 ended in a valid final judgment on the merits 3. Must show (2) that the same issue was actually litigated & determined in case 1

a) Cromwell v. County of Sac: must show that the issue in question was actually litigated. Here, evidence that one bond was not paid value for is not conclusive that pl. did not pay value for another bond. b) Russell v. Place: collateral estoppel only applies if the precise issue in question has been litigated and determined in the former suit (pl. sued def. for patent infringement. Jury did not say which part of patent was infringed. Pl. brought second suit for patent infringement. Court says that b/c don’t know what part was infringed, there is no issue preclusion in second suit.

4. Must show (3) that the issue was essential to the judgment in case 1 a) Rios v. Davis: A finding of fact which was not material or essential to the judgment of a suit b/w two parties is not binding on the parties in a later suit. (pl. employer brought action against def. for damages in auto accident; ct. determined all negligent. Pl then sued def. Court said that pl. negligence in the prior suit was not necessary and thus, did not bind pl. in the subsequent suit)

5. Ask (4) against who collateral estoppel used a) ONLY AGAINST someone that was a PARTY IN CASE ONE (or someone in privity with a party) b) required by Due Process (so only one approach)

6. Must ask (5) by whom collateral estoppel is used a) not required by due process, so different approaches allowed b) mutuality: can only be used by someone that was a party in case one

i) Ralph Wolff v. New Zealand Ins. Co: must have mutuality b/w parties in order to assert collateral estoppel

c) new trend allows non-mutual collateral estoppel: by someone that was not a party in case one (ex. Barnhard v. Bank of American Nat. Trust & Saving Co [Ca.]: pl. sued def for unauthorized w/drawal; prior court said withdrawal was authorized)

i) non-mutual defensive: the person using it is the def. in case two, and not a party in case one ii) non-mutual offensive: the person using it is the pl. in case two, and not a party in case one iii) Parklane Hosiery Co. v. Shore: trial courts have broad discretion to apply the doctrine of offensive collateral estoppel, even when def. may be denied jury trial

7. HYPOS: B driving C’s car and collides w/ A (who is in own car). C is vicariously liable for B’s accident.


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a) Case 1: A sues B. B wins b/c A was negligent. b) Case 2: A sues C. C wants to claim collateral estoppel on the finding that A was negligent in case 1. i) case 1 ended in valid final judgment on the merits ii) the same issue was actually litigated (A’s negligence) iii) the issue is essential to the judgment (reason why B won) iv) being used against a party in case 1, so due process not violated

v) being used a non-party non-mutual defensive o under traditional approach, C cannot use collateral estoppel o today, most courts, including federal, will allow non-mutual

defensive collateral estoppel if the party against whom it is being used had a full, fair opportunity to litigate.

c) Same facts. Case 1: A sues B. B wins b/c A negligent and judgment entered. Case 2: C sues A for property damage to her car. C wants collateral estoppel on issue of A’s negligence i) first 4 elements met as in prior hypothetical ii) By whom is it being used: non-mutual offensive

o most courts reject non-mutual offensive collateral estoppel o federal courts leading a trend that offensive collateral estoppel is

okay as long as it is fair o What is “fair”?

A had a full opportunity to litigate C could not have joined easily in case 1 (if she could,

then should not allow) A could foresee multiple litigation There are no inconsistent judgments Like Parklane “Heads you win, tails I lose” – multiple pl. anomoly

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