CIVIL PROCEDURE OUTLINE TABLE OF CONTENTS Due Process.......................................................... 4 Sources of Due Process Requirements.................................4 Preliminary Remedies................................................5 Permanent Remedies..................................................6 The Pleading Process.................................................7 The Pleading....................................................... 7 Answers to Pleadings..............................................9 Amendments.........................................................10 Joinder of Claims and Parties.......................................11 Joinder of Claims..................................................11 Joinder of Parties.................................................13 Impleader by Defendant.............................................13 Impleader by Plaintiff.............................................14 Indispensible Parties............................................15 Consolidation and Separate Trials..................................16 Discovery........................................................... 17 Purpose of Discovery.............................................17 Scope..............................................................17 Attorney Work Product............................................19 Asserting Privilege..............................................19 | Spring 2011 | Civil Procedure 1
Transcript
C I V I L P R O C E D U R E O U T L I N E
TABLE OF CONTENTS
Due Process............................................................................................................................................................ 4
Sources of Due Process Requirements.........................................................................................................................4
The Pleading Process........................................................................................................................................ 7
The Pleading........................................................................................................................................................................... 7
Answers to Pleadings......................................................................................................................................................9
Joinder of Claims and Parties........................................................................................................................ 11
Joinder of Claims................................................................................................................................................................. 11
Joinder of Parties.................................................................................................................................................................13
Impleader by Defendant.................................................................................................................................................. 13
Impleader by Plaintiff........................................................................................................................................................14
Consolidation and Separate Trials...............................................................................................................................16
Purpose of Discovery....................................................................................................................................................17
Attorney Work Product...............................................................................................................................................19
Judgment As a Matter of Law.........................................................................................................................................21
Judgment Notwithstanding the Verdict....................................................................................................................22
Personal Jurisdiction........................................................................................................................................ 23
Long arm Statutes.......................................................................................................................................................... 26
General and Specific Jurisdiction.............................................................................................................................28
Tag Jurisdiction............................................................................................................................................................... 31
Interstate Stream of Commerce...............................................................................................................................33
Forum Non Conveniens...............................................................................................................................................36
Federal Question Jurisdiction........................................................................................................................................37
Well Pleaded Complaint Rule....................................................................................................................................37
Exemptions to Res Judicata.......................................................................................................................................49
Claim Preclusion by Nonparties..............................................................................................................................50
Fifth Amendment – “No person shall be deprived of life, liberty, or property without due process of law.”
Fourteenth Amendment – “No State shall deprive any person of life, liberty, or property without due process of law.”
Federal Rules of Civil Procedure – Notice of rights and opportunity to be heard is required in all civil actions.
FRCP #1: “These rules shall be construed and administered to assure the just, speedy, and inexpensive determination of every action.”
POLICY UNDERPINNINGS
Fair notice Justice Rights Minimized expense Equality Expediency Accuracy Legitimacy of Process
DUE PROCESS APPLICATIONS
Hamdi v. Rumsfeld 542 US 507 (2004)F: Mr. Hamdi was born in Louisiana, then moved to Saudi Arabia and spent much of his childhood there. While living in Afghanistan he was captured and interrogated by US Coalition forces. They have held him since 2001 in Guantanamo Bay without trial.R/H: Mr. Hamdi is a US Citizen who has a right to claim a writ of habeus corpus. The US military cannot deprive him of his rights of liberty without a trial. US citizens detained as enemy combatants have a right to challenge their detention at an evidentiary hearin after being removed from a combat zone. However, the US military is allowed to use hearsay evidence at trial given their public interest in maintaining the peace.
Goldberg v. Kelly 394 US 254 (1970)F: The director of social services in New York City revoked welfare benefits from some recipients from time to time. The benefits would first be removed, then recipients could challenge the revocation through a letter of appeal and eventually an evidentiary hearing (although these options were never communicated to the recipients).R/H: Welfare recipients deserve to have an evidentiary hearing prior to the suspension of benefits – this right should be communicated to the recipients with enough time to prepare
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a defense. For considering what forms of due process are owed to citizens, a calculation should be performed and considered. The interests of the private citizens should be weighed against the interests of the governmental organizations. Additionally, the consequential gravity of an erroneous judgment and the existing procedure should be considered in these decisions. How much process is due? That depends on how direly the citizens need something, how awful a false judgment is, and how much the government loses by granting due process
Fuentes v. Shevin 407 US 67 (1972)F: leased a stove and phonograph from the defendant, then had some dispute about the Πservice plan. The defendant filed a writ of replevin to repossess the goods, which the sheriff did immediately. The writ does not require any evidence or claim that the goods are the property of the movant – it is done automatically as precursor to trial.R/H: A person’s property shall be deprived without due process of law, including a chance to refute the claim in court and fair notice of the challenge to the property. It is inconsequential whether the property was only being rented or leased or if the property is a necessity for life. Property is property; the Fifth Amendment demands fair notice and a chance to refute the claim.
Matthews v. Eldridge 424 US 319 (1976)F: receives disability benefits, but they were revoked after the Social Security Πadministration determined that his disability had come to an end. He challenged the constitutionality of the suspension of benefits under Goldberg v. Kelly.R/H: Plaintiff does not deserve a pre-suspension evidentiary hearing because his situation is not as desperate as that of welfare recipients and his disabled status can quickly be evaluated with medical documents rather than a protracted welfare review. This ruling amends the standard established by the Goldberg ruling and contextualizes it for each given situation. It affirms the argument that due process is a right that is dependent on specific circumstances.
GOLDBERG DUE PROCESS TEST
1. The gravity of interest in the citizen’s right to property
2. The interest of the government organization in quick and speedy action.
3. The consequences of an erroneous ruling and the existing procedure.
PRELIMINARY REMEDIES
IN GENERAL
Preliminary remedies are obtained before any judgment is reached on the merits of the claim.
These remedies are requested via per-trial motion
Requires that movant show immediate and irreparable injury, loss, or damage will result through a complete showing of facts in affidavit or complaint.
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The movant certifies to the court in writing the efforts which have been made to give notice and reasons supporting the claim that notice should not be required.
TYPES OF PRELIMIARY REMEDIES
A. Preliminary Injunction – so that more harm is not accumulated during course of litigation.a. Requires hearing before the judge, during which court will consider:
i. Risk of irreparable harmii. Probable harm to injunctee
iii. Likelihood of success of caseiv. Public interest in granting the injunction.
b. Lasts until the final judgment of the case.c. Preliminary injunction is meant to freeze the conditions existing at beginning of trial
so that conditions do not get worse as litigation proceeds.
B. Restraining order – so that parties do not interact with one another before trial begins.
C. Gag order – so that more damaging information is not released by one party against another.
D. Sequestration – seizure of property compels a party to appear in court and defend on the merits.
a. Due Process requirements of notification and hearing before sequestrationb. Cannot be used to indirectly assert personal jurisdiction over defendant.
E. Attachment – holds property in escrow so that defendant cannot dispose or move the property; this is similar to collateral in that the property should be held in case judgment is entered against the property owner there will be something to confiscare as remedy.
F. Garnishment – court can hold funds/wages of the defendant in order to pay the .Π
G. Declaratory Relief – Court will issue an official statement of the rights and characterization of the acts of the parties. This does little to help one’s desperate condition, but carries force when combined with an injunction, restraining order, or attachment of property.
PERMANENT REMEDIES
A. Damages
Damages request must be accompanied by a showing of how the has been injured.Π
a. Nominal injury – rights were violated, so compensation is appropriatei. Loss of economic stimulus is not recoverable.
b. Compensatory damages – property or person was damaged, so damages replace loss of property or health.
c. Punitive damages – instituted to compensate for pain and suffering (intangible harm). Punitive damages are also used to deter future deviance and punish wrongdoing.
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B. Permanent Injunction
When monetary damages are inadequate to recover from harm, the court can issue a permanent injunction ordering the defendant to do something or refrain from doing something. This is only appropriate when essential and no other remedy is available.
C. Declaratory Judgment
Same as preliminary judgment above. The court’s open declaration characterizes an act, a person, or a piece of property as just/unjust, legal/illegal, belonging to one party, etc. A declaratory judgment carries little force individually, but it sends a message to society.
THE PLEADING PROCESS
THE PLEADING
REQUIREMENTS
A. Pleading must comply with FRCP 8.
B. A pleading must set forth a brief statement of the facts so as to give the court and the defendant notice as to what the lawsuit is about.
C. The pleading must demand judgment for the plaintiff.
D. The pleading must cite a law and state the grounds for relief.
E. The pleading must show it is plausible the plaintiff will win the action. It must show why the plaintiff is entitled to relief.
F. Great specificity is required when a request for damages is made.
G. Pleading must be served upon defendant within one hundred and twenty days after the complaint is filed, as required by FRCP 4(m).
H. Each cause of action must be stated and the elements briefly described.
I. The pleading must be signed by the attorney filing it, and the names, phone numbers, and addresses of all parties and attorneys included in it.
PURPOSE OF THE PLEADING REQUIREMENTS
Remember that the purpose of the Federal rules of Civil Procedure is to ensure just, expedient, and inexpensive determination of each civil action.
The purpose of Rule 8 is to give the defendant notice of the claim and enough information about what the suit is about. The pleading helps the defendant to prepare to defend the case on the merits and to help the court prepare and organize the litigation efficiently.
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Conley v. Gibson 355 U.S. 41, (1957)F: Brotherhood of Railway and Steampship Clerks Local Union no. 28 abolished 45 jobs held by the s in May 1954. In truth the 45 jobs were not abolished but were filled by Πwhites as the negroes were ousted. s filed suit against railroad union, charging Πdefendants with failure to represent clients in good faith and violating s rights under the ΠRailway Labor Act. Defendants filed a 12(b)(6) motion, asserting the complaint did not have enough detail to establish a claim against them.R/H: Supreme Court unanimously reversed the holding, finding that the purpose of the complaint is to provide a brief statement of the facts and put the court and the defendants on notice of what the lawsuit is about. A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Rule 8(a) has a different set of requirements that the common law requirements of complaints.
Diguordi v. Durning 193 F.2d 774 (2nd Cir. 1944)F: issued a home-made complaint without the assistance of an attorney, which does not Πstate legal causes of action. Interpreted he might be suing for fraud, breach of contract, and negligence. Defendants filed a 12(b)(6) motion which was granted by the District Court.R/H: Although the is decidedly inarticulate and wrote out a home-made complaint rife Πwith spelling and grammatical errors and shows no deference to legal forms and procedure, he has provided a brief statement of the case. The pleading requirements of Rule 8(a) are quite lenient and he has provided a brief statement of the facts so he should be allowed to stay in court. Admittedly, he should hire an attorney and prepare to seriously argue this case.
HEIGHTENED PLEADING REQUIREMENTS
Some actions require a higher degree of specificity because of the nature of the offense.
a. Fraud, anticompetition claims, misrepresentation, and condition of the mind claims require an advanced level of particularity. These elements must be described in great detail.
b. The complaint must focus on the time, place, and content of the alleged violations.
c. However, the heightened pleading requirements do not apply to civil rights violations.
Leatherman v. Tarrant 507 U.S. 163 (1992)F: County police department tore apart ’s home without warrant, shot and killed the dog, Πspraying blood and brains all over the walls, then hung out in the yard and drank beer until they decided to leave. They also entered another ’s home without identifying themselves, Πbeat him and other residents savagely, searched the home, found nothing, and left. Defendants filed a 12(b)(6) motion to dismiss, which was granted by the District Court and affirmed by the Fifth Circuit.R/H: It was not reasonable to hold a heightened pleading requirement in civil rights cases involving a municipality because of the lenient requirements set forth in FRCP
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rule 8(a)(2) which supersede. The s need only submit a plain and short statement of the Πclaim, and they have done so. The heightened pleading requirements from Eliot v. Perez does not apply to civil rights violation cases because the interest of the private citizen for once outweighs the desire of the public to reduce costs of litigation.
Bell Atlantic v. Twombly 550 U.S. 544 (2007)F: s filed suit against the Bell Atlantic Corporation, alleging monopolistic and Πanticompetitive behavior in direct violation of the Sherman antitrust act. Defendants filed a 12(b)(6) motion which was granted. The Circuit court affirmed.R/H:The Supreme Court rejects the old pleading standards from Conley v. Gibson and relies on a new “plausibility” standard. Sherman Antitrust Act and following litigation says that conscious parallel behavior is not enough to demonstrate conspiracy or monopolistic behavior. There must be an expressed agreement not to compete in order to establish a case for monopolistic behavior. Even if everything in the complaint is true, there is still no showing on the part of the to prove that there was anticompetitive behavior. Π
PLEADINGS SUMMATION
Most pleadings are subject to a lenient pleading standard from FRCP 8(a). Some claims require a higher pleading standard, such as fraud, anticompetition, misrepresentation, and state of mind. In general, the pleading must put the defendant and court on notice and help them prepare to litigate the case on the merits.
Sanctions – FRCP 10. No improper purpose such as harming or harassing the defendant.
ANSWERS TO PLEADINGS
All answers to complaints must comply with FRCP 12. The answer must be sent out within twenty days of being served with the complaint as required by rule 4(m).
The answer should include:i. Admissions and denials of the plaintiffs averments.
ii. Affirmative defensesiii. 12(b) defensesiv. Counterclaims and cross-claimsv. Motions to implead a third-party defendant
vi. 12(e) Motion for a more definite statementvii. 9(b) motion for failure to state a fraud claim with particularity
viii. Motions to reduce the number of partiesix. Motions to claim a jury trial
8(B) ADMISSIONS
Defendant can admit, deny, or claim no knowledge of the claims in the complaint.
Admitted facts are taken as legal truth – not debatable at trial.
Denials must be specific and made in “good faith”.
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Claim of ignorance must be made in “good faith”. A defendant must make an effort to investigate the material and find out the truth of the matter asserted.
8(C) AFFIRMATIVE DEFENSES
This rule lists a substantial number of affirmative defenses a defendant can rely on to justify his or her actions.
Accord and satisfaction Arbitration and award Assumption of risk Contributory negligence Discharge in bankruptcy Duress Estoppel Failure of consideration Fraud Illegality
Injury by fellow servant Laches License Payment Release Res judicata Statute of frauds Statute of limitations Waiver.
12(A) ANSWERS
Defendant has twenty days to respond. If defendant files a preliminary motion, defendant has until ten days after the motion has been ruled on.
12(B) DEFENSES
Some 12(b) motions relate to the merits of the case12(b)(1) Lack of subject matter jurisdiction12(b)(2) Lack of personal jurisdiction12(b)(3) Improper venue12(b)(4) Insufficient process12(b)(5) Insufficient service of process
Some 12(b) motions do not relate to the merits of the case.
12(b)(6) Failure to state a claim for which relief can be granted. This is a common defense. When evaluating this defense the court must consider the facts asserted in the
complaint in the light most favorable to .Π If has failed to state enough detail (“no set of facts”) the action will be dismissed. Π Likewise, if there is no law in existence that grants remedy, the claim will be
dismissed (political question doctrine). If the facts the plaintiff states and the cause of action claim do not match one
another (wrong cause of action), the action should be dismissed.
12(b)(7) Failure to join an indispensible party as required by Rule 19. See section of joinder of claims/parties for more information.
AMENDMENTS
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A. Federal Rule of Civil Procedure 15 governs amendments.
B. is entitled to amend the complaint once before the answer has been served, Π or within twenty days after serving the defendant.
C. Otherwise, amendment is only allowed when given leave by the opposing party or by the court. Rule 15(a)(2) provides: “The court shall freely give leave when justice requires”.
NEW EVIDENCE
If a attempts to introduce evidence in trial that is not described in the pleadings the otherΠ party may object. The court may allow the pleadings to be amended so as to include mention of the evidence in question if doing so will aid in presenting the case on the merits but not if doing so would prejudice the court in deciding the case on the merits. Bringing in new causes of action, defenses, evidence, or claims are all subject to FRCP #15.
SUPPLEMENT PLEADINGS
Additionally, if events have transpired since the date of the pleadings the pleading may be amended to include those events, even if doing so would correct a lacuna in the original pleading. These events also may be beyond the statute of limitations, even though the original events mentioned in the pleading are not. Adding new events to an original pleading via amendment after discovering the events is done so at the discretion of the court's just judgment. Relating back to previous events in pleading amendments is detailed by FRCP Rules 15(c)(1) and 15(c)(2).
RELATING BACK TO THE ORIGINAL CAUSE OF ACTION
A. The amendment relates back to the date of the original pleading when:(1) The claim arose out of the conduct set forth in the original pleading, (2) The named party has notice of the institution of the action, and knew or should have
known about the lawsuit but for the mistake in identification.(3) There is an absence of prejudice in maintaining a defense on the merits.
Singletary v. PADOC, 266 F.3d 186 (3rd Cir. 2001)F: filed negligence action on October 6, 1998, two years after the negligent transaction orΠ occurrence. She just barely made the statute of limitations by one day. moved to amend Πthe complaint on July 28, 2000, nearly two years after filing the complaint to include the names of psychologists who negligently treated the decedent.R/H: The lack of identification was a result of lack of knowledge, not mistake of fact. Regan’s behavior is certainly the issue stated in the original 1998 complaint, although he is described as “Unknown Corrections Officer”. Notice is the main concern of the court, and because Regan did not receive notice of the litigation within 120 days of the filing of the complaint he would be prejudiced in mounting a legitimate defense at this late date. Although the amendment relates back, it will not be allowed when the mistake was due to a lack of knowledge and the statute of limitations has lapsed.
JOINDER OF CLAIMS AND PARTIES
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JOINDER OF CLAIMS
A. Rule 13 allows a party to file cross-claims and counter-claims against other parties in a civil action. The rationale behind this rule is expediency and efficiency; claims that parties have against one another should all be compiled into the same action in order to expediently argue similarly-related material in the same suit.
B. Rule 13(g) Cross-claims: claims by a defendant against a codefendant. Indemnity claims are one type of cross-claims. A cross-claim requires a codefendant that was joined by the plaintiff.
C. Cross-claims are not to be confused with Rule 14 contribution/indemnity claims against a nonparty. Cross-claims are towards codefendants, while Rule 14 impleader claims are against third party defendants.
D. Counter-claims: claims by a defendant against a plaintiff
E. Rule 13(a) Compulsory claims: Any claim that arises out of the transaction or occurrence that is the subject matter of the original complaint is a compulsory claim that must be filed at the time of the pleading; failure to do so waives right to bring claim in the future.
F. Rule 13(b) permissive claims: any claim against an opposing party that is not compulsory is permissive and may be raised at a later date.
G. Rule 18: Once a claim has been filed, the complainant may join as many claims as he has against the defendant, regardless of relevance or chronology. All of the claims may be joined; the only common element required is that the plaintiff and defendant be the same.
a. However, must consider jurisdiction and venue issues. 12(b)(1), 12(b)(2), and 12(b)(3) motions may dismiss the joined claims.
JOINDER OF CLAIMS ISSUES
Does the court has subject-matter jurisdiction to hear this claim? Are the issues of fact and law raised in the claim and counter-claim roughly the same? Would Res Judicata bar bringing a similar suit? Is the same evidence used to support or refute each claim? Is there a relation between the original claim and the joined claim?
Kedra v. City of Philadelphia, 454 F. Supp 652, (Eastern District of Pennsylvania, 1978)F: filed suit against defendant police officers for separately and in concert engaging in Πdiscriminate and unlawful use of force in the detention, battery, and search of the s . ΠTheir complaints stem from different dates and incidents involving different police officers in each case. Defendants filed a 12(b)(7) defense.R/H: All of the claims stated by s arose out of the same series of transactions, and Πtherefore satisfy FRCP 20(a) for proper joinder of parties. Because not all of the defendants took part in events on Dec. 22 and on Dec. 29th, it may not be fair to make those defendants sit through a trial summarizing all of the claims. When there is a question of fact common to all of the defendants in the action it will be just to join all of the claims and defendants in the same lawsuit.
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Podhorn v. Paragon Group, 795 F.2d 658, (8th Cir. 1986)F: s brought action against defendants for constructive eviction, breach of implied Πwarranty of habitability, false swearing, false credit report, negligence, abuse of process, conversion, and initiation of malicious prosecution. The defendant had earlier brought an action against for failure to pay rent and the s did not raise this cause of action then, so Π Πthey should not be allowed to raise it now.R/H: The action s would like to file should have been filed as compulsory counterclaim in Πthe previous action because it arose out of the same occurrence that gave rise to the defendant’s earlier claim in state court – the s’ tenancy at defendant’s apartment. Thus Πthe motion to amend is denied and by extension the motion to dismiss the complaint is granted.
JOINDER OF PARTIES
A. Rule 20 provides for permissive joinder of parties.
B. Plaintiffs may join in an action when a. They assert a right to relief jointly or severally with the other plaintiffs arising out of
the same transaction or occurrence andb. There is a question of law or fact common to all plaintiffs that will arise in the action.
C. Defendants may be joined in one action whena. A right to relief is asserted jointly or severally against them arising out of the same
transaction or occurrence that gave rise to the original action andb. There is a question of law or fact common to all defendants.
D. In general, joinder of parties allows for quicker and more efficient adjudication of the claims. It combines actions for efficiency and time’s sake.
a. Res Judicata incentivizes parties to use the joinder mechanisms broadly.
IMPLEADER BY DEFENDANT
Federal Rule of Civil Procedure 14 permits a defendant to implead a nonparty who is liable to that defendant for all or part of the claim against him or her. The defendant may not want to take complete responsibility for a claim by a and by impleading others makes them share the liability Πwith im.
The defendant, acting as a third-party plaintiff, must obtain the leave of court to do so if this motion is made more than ten days after filing its Rule 12 answer.
Exception: a defendant can bring in a third party any time after commencement of the action for derivative liability.
Standards: The impleader does not require that the joined party is related to the same transaction or occurrence giving rise to the original claim. The basic requirement in Rule 14(a) is a derivative liability requirement.
Indemnification is a relationship that may exist between parties by contract or as a matter of state law. i.e. a general contractor is indemnified from liability for the actions of his subcontractors.
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In order to successfully pass a motion to join third-party defendants, the defendants have to prove that the third-party defendant is liable for all or part of the claim against them.
Gross v. Hanover Insurance Company, 128 F.R.D. 53, (S.D.N.Y. 1991)F: The owned a jewelry store managed by Joseph and Anthony Rizzo. The store was Πrobbed of $268,500 worth of diamonds while Anthony was watching the store. Defendant filed a Rule 14 motion to implead the Rizzo brothers who may be liable to the defendant for the loss of the diamonds.R/H: The defendant’s third party claims arise from the same occurrence that came rise to the original pleading. The prejudice suffered by the is outweighed by the benefits of Πmore efficient litigation created by granted the motion for impleader. The standard for a Rule 14 joinder is quite low; the possibility for liability to the third-party is enough toΠ join the third party defendant(s).
IMPLEADER REQUIREMENT
The motion for impleader must join a nonparty. The third-party plaintiff must have a claim against the nonparty. The third-party defendant must be liable to the third-party plaintiff for all or part of the
original claim against it (indemnity standard).
SOURCES OF LIABILITY
Contribution: join tortfeasors. Indemnification: employers are liable for the torts of their employees. Subrogation: an insurance company may be liable to an insured defendant.
RIGHTS OF THE IMPLEADED
The third-party defendant must then assert any Rule 12 defenses to the impleader motion, as well as Rule 13 counter-claims and cross-claims against any other parties in the action. The third-party defendant can also file Rule 14 motions to implead a nonparty liable to it for any or part of the claim against it by the third-party plaintiff.
Joinder Example from Practice Exercise 12
Rule 18, 20 Joinder Randall Dee
Carpenter Ultimate Auto
City of Lowell
McGill's Garage
{13(g), 13(h) Crossclaim
Rule 8(a)complaint Rule 14
Impleader
IMPLEADER BY PLAINTIFF
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If the defendant asserts a counter-claim against the plaintiff, the plaintiff can implead a third-party defendant if that nonparty is liable to the plaintiff for any or all of the claim against it. This joinder may be compulsory or permissive. Consult Rules 18, 19, 20, and 21.
Rule 18(a) allows a plaintiff to join as many claims as it has against the same defendant, even if the claims are unrelated.
INDISPENSIBLE PARTIES
Rule 12(b)(7) can dismiss a case for failure to join an indispensible party.
Temple v. Synthes, 492 U.S. 1048 (1991)F: underwent surgery on his back during which some screws were inserted into his back. Π The screws broke off after surgery and caused him great injury. He brought products liability action against the manufacturer of the screws, but not the doctor or the hospital. The defendant filed a 12(b)(7) motion.R/H: Joint tortfeasors are permissive parties, not compulsory. Therefore, Rule 19 does not always require the joinder of all tortfeasors.
Rule 19 defines indispensible parties. A party is indispensible if The court cannot afford complete relief among existing parties in the absence of that party. That nonparty claims an interest relating to the subject of the action and may be impaired
from protecting that interest if s/he is not joined as a party.o Ex. A poisoned mine worker wants compensation for illness caused when the union
brings action against the mine owner for poisoning the union. Leaving that nonparty out of the action will expose an existing party to multiple liability.
o Ex. An insurance action wherein multiple people named Robert Paulson attempt to claim payment from the insurance company for an insurance policy taken out in that name.
If the joinder of the indispensible party is not feasible, the court may simply dismiss the action completely. The court has to evaluate the soundness of such an action and the interests served by doing so.
Rule 20 defines permissive joinder of parties. Nonparties may join the lawsuit if they share a claim related to the same transaction or
occurrence that is the subject matter of the original complaint. When a right to relief is asserted jointly or severally by or against a nonparty, the joinder of
that party may be permissive. This permissive joinder requires that there be a common question of law or fact between
the existing parties and the nonparties. Joint tortfeasors are not indispensible parties! They are permissive parties. While co-obligees are always indispensible parties, co-obligors may or may not be.
Daynard v. Ness, 184 F. Supp 2d. 55 (D. Mass. 2001)F: The was a law professor working with numerous law firms on their litigation against Πbig tobacco in the 90s. He was promised compensation but never received any. He brought suit against Mississippi and South Carolina law firms to enforce their contract and pay him for his services. Both defendants moved to dismiss under 12(b)(7).
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R/H: (1) Joint tortfeasors are not necessary parties. (2) Co-obligors may be necessary, but generally are not indispensable. (3) An action to set aside a contract requires joinder of all parties to the contract. For purposes of Rule 19, “indispensible parties” is a subset of “necessary parties”, not a mutually exclusive category.
MISJOINDER
A. Rule 21 governs misjoinder and nonjoinder. B. A misjoinder is essentially where a has erroneously joined multiple defendants in a Π
lawsuit under Rule 18 or 20 where the defendants do not have in common the transaction or occurrence giving rise to the original complaint. Therefore, the defendants should not be codefendants because they have little in common with one another.
C. Misjoinder is not grounds for dismissal. The court may add or drop a party on its own terms in the interest of justice.
D. The court may also order the severance of the action and thereby split it into multiple actions.
INTERPLEADER
A. Persons with claims that may expose a plaintiff to double or multiple liability may be joined as defendants and required to interplead.
B. Rather than waiting for all the separate parties to sue a defendant, the defendant can become a plaintiff and sue all of the potential plaintiffs under an interpleader cause of action. The court is then asked to resolve which of the interpleader defendants have a claim against the interpleader defendant.
CONSOLIDATION AND SEPARATE TRIALS
a. The judge may order the action split into different trials if there has been misjoinder.
b. Where a party has been impleaded on a different transaction or occurrence that the one giving rise to the original lawsuit, that action should be argued separately.
c. Fairness – Not fair to some litigants to make them sit through the trial between other litigants on a completely different chain of events.
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DISCOVERY
PURPOSE OF DISCOVERY
A. Encourage full education of the factsB. Allow parties to more concretely frame the issues for trialC. Avoid trial by surpriseD. Encourage the parties to settle now that they know the full factsE. Increase efficiencyF. Avoid exploitation by those with more information.
SCOPE
Federal Rule of Civil Procedure 26(b) defines the scope of Discovery, expanding it to any non- privileged matter relevant to the claim or defense of any party.
This includes the fact of the existence and the character or nature of documents, people, property, and other pieces of data.
The Scope of discovery is intentionally broad – it includes all information that may lead to a claim or defense. Because of this, discovery is a long and complicated process that is very costly and can often result in “document burying” where one party buries another with thousands of documents.
DISCOVERY TOOLS
A. Mandatory Disclosure - Parties are required to automatically and without request disclose to the other party the names, phone #s, and email addresses of all parties involved in the pending action or parties that may be joined to the pending action. These disclosures have to take place after a conference.
B. Interrogatories - Are written questions served on another party and are to be answered under oath. Interrogatories should be specific and on point so that a fair and honest answer generates useful relevant information.
a. Useful for obtaining detailed and/or non-controversial information from an adversary.
b. Interrogatories are inexpensive to prepare and serve on the opposing party. Likewise, they are inexpensive and easy to answer.
c. The answer is usually prepared by the lawyer so that the question is answered but in a way that harms the interrogated party the least.
C. Depositions – Depositions are extremely useful because they reveal sworn testimony that are often relevant to the claim or defense at hand. Depositions can thus inform a party as to how they want to answer an interrogatory or additional depositions put to the learned party.
a. Governed by FRCP 27 – 32.
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b. A party is allows to make up to 10 depositions. Any more requires leave of court.c. Depositions are like a dry run at questioning a witness on the stand.d. The responses have a degree of spontaneity and the attorneys are given a chance to
submit follow-up questions and questions to material discovered at the deposition.e. Depositions are quite expensive and take a while.f. The record of the depositions is available at court. g. Nonparties may be deposed.h. Depositions are usually taken in a law office with a court officer present and lawyers
from both sides of the lawsuit. i. In a deposition lawyers can make objections and motions to strike, but the
objections are not ruled on – the witness must answer all questions posed as a deposition.
D. Discovery from a nonparty - You can use a subpeona to request documents from a nonparty, just like one can request documents from the opposing party. The procedure is largely the same.
E. Medical Examinations - In cases where a party is injured physically or mentally, discovery may require a physical examination of the body and mind of the individual asserting physical or mental harm. Attorneys can often require their own physicians to examine the relevant persons and have these interviews occur at a neutral location. This is similar to a deposition in that such an interview is mandatory and difficulty to fight.
F. Signature disclosures - Every discovery request, response, or objection must be signed by at least one attorney representing that attorney and accompanied by the attorney's address, phone number, and email address.
a. This signature signifies that the document is complete and correct at the time it is sent as well as being consistent with existing law and rules and that it is not done for an improper purpose such as harassment or delay nor is it unduly burdensome.
b. This is related to FRCP #11 requirement for signatures, although FRCP #11 explicitly does not apply to discovery requests.
Moss v. Blue Cross, 241 F.R.D. 683, (D. Kan. 2007).F: filed document requests and interrogatories requesting all correspondence to or from Πthe and all documents bearing the ’s name that are in the possession of the defendant, Π Πas well as all documents on the disciplining and termination of employees in the last few years. Defendant objects to these interrogatories on grounds that they are overly broad and burdensome on its face.R/H: A request may be burdensome on its face if it uses vague terms such as “relating to” or “pertaining to”, and thus requires the answering party to “engage in mental gymnastics” to determine what information is requested. The defendant has the burden of proof in proving that the discovery request is overly broad or burdensome. While omnibus terms “relating to” and “pertaining to” would require the defendant to engage in mental gymnastics, the requesting party can provide adequate guidance and specific requests to narrow the scope of the request and make it less vague or irrelenvat.
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ATTORNEY WORK PRODUCT
A. Attorneys often make notes and conclusions in preparation for trial.
B. This material is often privileged to the attorney and belongs exclusively to that party.
C. Courts do not want the attorney testifying –his role is to facilitate litigation, not to testify as a witness through his work product and opinions.
D. In general, the statements and personal opinions made by the attorneys in preparation for trial is not discoverable. Attorneys must be free to prepare for trial and taking personal notes without fear that another party may discover his or her preparatory materials.
E. The court does not want to turn a lawyer into a witness.
F. EXCEPTION: Where the attorney work product contains material that the opposing party has a significant need of and is unable to acquire otherwise, that material should be disclosed to the opposing party out of necessity. The claiming party must present a strong case that s/he has a strong need for the information and has exhausted all other channels at acquiring that information.
Hickman v. Taylor, 329 U.S. 495, (1947).F: The J.M Taylor, a tugboat, sank while taking with it five unfortunate sailors. The United States Steamboat Inspectors conducted a public hearing where the survivors were examined. Counsel for the tug owners took statements from survivors and witnesses. Counsel representing the families of the deceased were not present at this hearing and later filed to gain access to opposing counsel’s notes on the hearing.R/H: The has the power and ability to interview the survivors themselves and get access Πto the public testimony from the United States Steamboat Inspectors. The public interest in served by granting lawyers a degree of privacy and allowing their personal notes and thoughts to remain private. There is no showing of necessity here by the , only a general Πnaked demand for all materials possessed by the defendant’s attorney. Personal materials prepared by an attorney for upcoming litigation is not open material subject to discovery, absent a valid showing of necessity and exhaustion.
ASSERTING PRIVILEGE
A. Privilege claims are governed by Federal Rule of Civil Procedure 26(b)(5).B. The party claiming privilege has to make clear what documents they claim to be
privileged without revealing the privileged information itself. C. This document must state with certain specificity what documents are being kept
private. D. This party must also keep a privilege log of all materials they hold to be privileged and
under what grounds they are protected.
COSTS SHIFTING
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A. Discovery is incredibly expensive. The general rule is that each party pays for its own discovery. A litigant must pay to produce all documents and information requested of it by another party.
B. Because of this, the courts will occassionaly have to engage in cost-shifting between the parties. One who requests an overly broad and burdensome amount of information may create an exorbitantly expensive discovery request that the opposing party is required to bear.
C. Spoliation of Evidence – Litigants have a duty to maintain in good condition all evidence and documents which may reasonably be needed in upcoming litigation. A party that destroys evidence or documents when that party has reason to believe that litigation is pending and will need that information.
Quincy v. WestLB AG , 245 F.R.D. 94, (S.D.N.Y. 2006)F: brought a wrongful termination and sexual harassment action against her former Πemployer. Defendant has a policy of deleting all old emails and correspondence when an employee leaves employment with defendant. These old files are stored on inaccessible tapes in a special format that makes them hard to recover. After investigating, finding, formatting, searching, and producing the emails that requested, defendant has a bill for Π$226,266,60 from Kroll Archives technology firm. The court has to decide who should pay for such expensive discovery process.R/H: The defendant has a duty to produce electronic records for the plaintiff, to preserve these records, and to pay for the production. However, this duty is not absolute – it is limited to documents relevant to pending litigation. The defendants willfully used a storage medium that is incredibly expensive to operate or convert, and because of this, they are responsible for the extreme costs they had to undergo in developing the information. However, in the case of information that was not foreseeably relevant to a pending litigation, the defendants have no duty to preserve this information and can shift the costs of developing antiquated information to the because of their good Πfaith effort.
JUDGMENT MECHANISMS
SUMMARY JUDGMENT
A. Governed by FRCP 56.
B. Summary Judgment must be granted when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.
a. Movant must prove:i. No genuine issue of fact. Any reasonable finder of fact could only find for the
movant.ii. The issue must concern a material fact.
iii. The facts are cast in a light most favorable to the non-moving party.
C. Timing
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a. A defendant can move for summary judgment at any time on all or part of the claim.
b. A plaintiff may move for summary judgment on all or part of the claim after twenty days have passed since commencing the action as defined by FRCP #3.
c. The motion must be served at least ten days before the day of the hearing for summary judgment.
D. Purpose - Summary judgment is a tool used to weed out unmeritorious claims and prevent them from using up the public and private resources of society. Summary judgment is usually sought after discovery but before trial begins. If a piece of a case or an entire case has no genuine issue of material fact then that piece or case can be entered for one of the parties.
E. Due Process – Summary Judgment ends a lawsuit before trial begins. a. This can deprive a party of one’s due process rights to a trial. It may also deprive
the party of his or her Seventh Amendment right to a jury trial. i. However, these rights are not absolute. SJ predicts what will happen at trial.
If there is only one reasonably foreseeable result, then SJ is merely a shortcut and should not change the outcome of the trial.
ii. It is an efficient mechanism and saves the time of the movant and the court.iii. SJ does encroach on Due Process rights, but Due Process does guarantee an
absoulute right to a full trial. SJ is merely a short and expedient trial.
F. Summary judgment is almost always moved for by the defendant, rather than the plaintiff. Plaintiff may move for partial summary judgment on certain issues when the plaintiff has a strong case on certain issues that do not need to be litigated at trial.
G. In summary judgment, the non-moving party will have to prove that there is some dispute of fact in order to proceed to trial. There must be an affidavit, interrogatory, piece of evidence , or other question of fact that a fact-finder (the jury) must decide on.
Celotex Corp. v. Catrett ,477 U.S. 317, (1986)F: Plaintiff brought wrongful death action against defendant for asbestos poisoning. The plaintiff introduced three documents indicating that the decedent had been exposed to asbestos poisoning. The defendant argued all documents were inadmissible hearsay and as such did not establish evidentiary foundation of the plaintiff’s claim against the defendant.R/H: A party moving for summary judgment needs only to show that the opposing party lacks a legally sufficient evidentiary basis to support his or her case. Because the plaintiff lacked admissible evidence to prove his or her case by a preponderance of the evidence, summary judgment should be granted for the defendant.
JUDGMENT AS A MATTER OF LAW
A. Governed by Federal Rule of Civil Procedure 50(a).B. Judgment as a Matter of Law must be granted when there is no legally sufficient evidentiary
basis for a reasonably jury to find for the non-moving party on a specific issue.
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C. Timing – May move for judgment as a matter of law at any time at trial before the issue is submitted to the jury.
D. Obligation of the moving party - Movant has to suggest there is no genuine issue as to any material fact and that no reasonable jury would find for the plaintiff on provided facts.
a. Demonstrate the Insufficiency in the Evidence - Essentially the movant points to insufficiency of evidence in the non-moving party’s case.
b. When examining the pleading, affidavits, and disclosure materials on file in a light most favorable to the non-moving party, does the evidence allow a reasonable jury to rule for the non-moving party? If not, must grant movant judgment as a matter of law.
c. There is no express requirement on the moving party to supply affidavits negating the plaintiff's complaint. The movant merely has to point to insufficiency of evidence .
E. Obligation of the non-moving partya. In the fact of a motion for summary judgment, the non-moving party should bring
forward evidence to satisfy the burden of proof. b. Remember that the plaintiff has a burden of production to provide evidence that the
plaintiff's assertions in the pleading are true and accurate. c. Alternatively, the non-moving party can merely assert the movant's failure to satisfy
56(e) (the proof of insufficient evidence), and hope the movant has failed to prove the plaintiff's case suffers from insufficiency of evidence. The movant will refer to the pleadings, affidavits, and disclosure materials on file.
F. Problems with Judgment as a Matter of Lawa. It is the job of the jury to weigh the evidence and decide the verdict. b. The judge is meant to decide issues of law, not matters of fact. c. By entering summary judgment, the judge is usurping the job of the jury and
becoming a fact-finder where it is not his or her place.d. The court is not supposed to weigh evidence -- summary judgment asks them to do
just that.
G. Counterargumenta. The judge often rules on legal questions, not on factual questions during motions for
summary judgment. The judge may rule on a matter of law in order to dismiss the case, regardless of the merit of the evidence itself.
JUDGMENT NOTWITHSTANDING THE VERDICT
A. Governed by Federal Rule of Civil Procedure 50(b).
B. Timing – JNOV is used at trial after the jury has entered judgment. A party may only move for judgment notwithstanding the verdict if that party has previously moved for judgment as a matter of law pursuant to FRCP 50(a). JNOV is technically a renewed motion for judgment as a matter of law.
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C. Appellant Convenience – Denying a 50(a) motion but granting a 50(b) motion may give the appellate court more to work with. This emphasizes efficiency by preventing the expense of a new trial.
a. A judge may deny as a 50(a) motion for judgment as a matter of law but grant a 50(b) motion for judgment NOV - a judge may do this so that appellate courts have more to review than the decision of the judge.
b. The appellate court may vacate the judgment notwithstanding the verdict and reinstate the jury verdict.
c. If the trial judge granted a judgment as a matter of law and did not let the case go to the jury and then the appellate court vacates the judgment as a matter of law there will have to be a new trial because there is no jury verdict to fall back on.
D. Seventh Amendment complicationsa. Where has not presented sufficient evidence that necessitates a jury trial he or Π
she does not deserve a jury trial. Only cases that are sufficiently argued should go to the jury and are protected by the Seventh amendment.
b. If a jury returns a judgment that clearly contradicts the presented evidence to the court the judge may want to override the jury and enter judgment notwithstanding the verdict.
PERSONAL JURISDICTION
A. Courts have limited jurisdiction. Any party may challenge the assertion of personal jurisdiction by a court over him or her with a 12(b)(2) motion.
B. Generally, there are three kinds of personal jurisdiction.1. In Personam – the power of the court to enter a judgment against a person. The
judgment is binding on the person itself.2. In rem – the power of the court to enter a judgment binding on property located
within the jurisdiction of the court owned by a person not within the jurisdiction of the court.
3. Quasi in rem – the power of the court to enter a judgment on an individual based on his or her property within the jurisdiction of the court, but where the action is unrelated to that property. The court can enter a judgment against the party up to the value of the property.
Pennoyer v. Neff, 95 U.S. 714, (1877).F: Attorney Mitchell, an Oregon resident, sued Neff, a California resident, in Oregon state court for $300 in legal fees owed to Mitchell. Neff never received service of process. The Oregon state court entered a default judgment for Mitchell and seized his property and sold it to Mr. Pennoyer. Mr. Neff sued Mr. Pennoyer to return his property to him, arguing that the original action seizing his property did not have personal jurisdiction over him\.R/H: Because non-residents can own property with Oregon, the state is given power over the property in the absence of the citizens themselves. It is within the virtue of the state’s jurisdiction over the property of non-residents to hold and appropriate this property to satisfy the claims of its citizens. However, the state court failed to attach the property to the previous action and thus is must be returned to Mr. Neff. A judgment may be entered in
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rem against a non-resident without service of process if the other party is a resident of the state in which the suit is brought and notice of the property seizure is publicized and the non-resident is made aware of said seizure.
C. Full Faith and Credit Clause - Full faith and credit ought to be given in each state to the public acts, records, and judicial proceedings, of every other state.
a. Any judgment entered against a party or piece of property in one jurisdiction must be honored by each other jurisdiction in the United States. An individual can take a judgment entered by one court and bring it to a court in another jurisdiction where the court must enforce it on the party the judgment is entered against.
D. Due Process – Any exercise of personal jurisdiction must comply with Due Process rights. Any assertion of personal jurisdiction that offends notions of fair play and substantial justice is erroneous and must be reversed.
a. One Way Street - Substantial justice and fair play considerations can only be used to invalidate a claim of personal jurisdiction - it cannot be used to establish a just assertion of personal jurisdiction in the absence of purposeful contact with the forum state.
b. For example, if the defendant lived across the street from the courthouse but in another jurisdiction and had never crossed the street into the forum state, there could be no assertion of personal jurisdiction over that defendant, even though it is incredibly convenient for him to litigate in the foreign state.
E. Residency – A court can assert personal jurisdiction over any party that is a resident of the state in which the court lies. Every citizen is a resident of exactly one state. Corporations are residents or two states.
a. Citizens: normally a resident of the state where one is domiciled. However, domicile is not demonstrative. Where is the intent to reside indefinitely?
i. Intent derived from: place of work, place of residency, place of voter registration, place where one pays taxes.
b. Corporations are citizens of both:i. State where corporation is incorporated. (Often Delaware).
ii. And…iii. Principal place of business. This is either where most of the corporation’s
goods are sold, or it is the nerve center, where the executives and decision making entities are located.
F. P.J. Analysis – Follow the following list of checkpoints when analyzing a personal jurisdiction problem:
1. If federal court, does rule 4(k) grants federal court jurisdiction?2. If state court, does long-arm statute grants state court jurisdiction?3. If Specific jurisdiction, is there purposeful contact with the forum state?
i. Does the claim arise out of said transaction or occurrence?4. If General Jurisdiction, is there continuous, systematic, and substantial contact
with the forum state?5. Is there such minimum contact with the forum state that can reasonably Δ
expect to be hailed into court in the forum state?
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1. Does the party inject goods into an interstate stream of commerce that creates targeted contact with the forum state?
2. Goods marketed in the state?3. Physical presence in state can substitute for minimum contacts.
6. Notions of fair play and substantial justice are validated by assertion of personal jurisdiction?
7. Is there unfair inconvenience to a foreign party?1. Compare private interest and public interest.2. What is the extent of the inconvenience?3. Purposeful contact invalidates inconvenience?4. Is it foreseeable to be hailed into court in the forum state?
International Shoe v. Washington, 326 U.S. 310 (1945).F: Defendant is a Delaware corporation based in Missouri. Defendant has no office in Washington but does employ eleven to thirteen salesmen who meet with clients and exhibit products and solicit sales from buyers after which they transmit the orders to St. Louis from where the orders are filled and shipped to Washington. State of Washington filed suit against Delaware corporate defendant to pay unemployment insurance in Washington. R/H: Defendant’s salesmen live in the state, rent property in the state, and solicit sales within the state. The level of contact with the state over time indicates a “presence” within the state is substantial enough to justify an assertion of personal jurisdiction. A corporation that employs workers and conducts business over a sustained period of time in a state has “presence” in that state and thus the state courts have in personam jurisdiction over that corporation. Precedent: A minimum contacts analysis must be used to determine whether a nonresident has presence enough in a state to justify personal jurisdiction.
PERSONAL JURISDICTION ANALYSIS PROCEDURE
Rule 4(k)
Long-arm Statute
Minimum Contacts
Specific JurisdictionPurposeful Availment
General JurisdictionContinuous, Systematic,Substantial contact
Reasonable ExpectationsFair Play + Substantial JusticeInconvenience Test
Private/Public InterestPurposeful contact?
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RULE 4(K)
A. A District Court in a given state has personal jurisdiction over any party that is subject to the jurisdiction of a state court in that state.
B. A District Court has personal jurisdiction over anyone who is served within 100 miles of the court issuing the summons.
C. Federal Statutes can justify personal jurisdiction over the party.
D. District Court has personal jurisdiction over any party who is not subject to any state court and is sued under federal law.
E. Any assertion of Personal Jurisdiction must comply with Constitutional rights.
LONG ARM STATUTES
A. Every state has a statute that dictates when the courts of that state can assert personal jurisdiction over a non-resident.
B. The statute gives the state courts jurisdiction when the nonresident conducts business in the forum state, commits a tortious act, derives substantial revenue from goods or services in the state, or owns, uses, or possess real property within the state
C. The rigidness of Pennoyer encouraged the creation of long-arm statutes in order to work jurisdiction in a more fluid society.
D. Two kinds of Long Arm Statutes1. Focus on specific kinds of acts. The acts of the parties have to fit under the statutory
definitions in order to assert jurisdiction over the party.2. Courts can exercise jurisdiction as far as the 14th amendment will allow. "Court can
exercise jurisdiction rulings not inconsistent with the Due Process clause of the 14th amendment".
SPECIAL APPEARANCE
A. Appearing at a courthouse effectively waives the right to challenge personal jurisdiction. A party who appears in that court has consented to the personal jurisdiction of the court.
B. A party may enter a “special appearance” where one enters the courthouse only to challenge the assertion of personal jurisdiction.
PURPOSEFUL AVAILMENT
A. There must be purposeful availment by the defendant of the forum state in order for the forum state to assert in personam jurisdiction over that party.
B. Unilateral Contact – If the only contact with the forum state was created by the unilateral activity of the plaintiff, the defendant should not be subject to the jurisdiction of that state.
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a. Has had the purposeful availment of the privileges and benefits of the forum state Δor has the contact been created unilaterally by the plaintiff or someone else?
Hanson v. Denkla, 357 U.S. 235, (1958).F: When she lived in Pennsylvania, Dora Donner established a trust with a Delaware corporation. She then moved to Florida and amended her will to direct a large portion of the trust towards one of her daughters. The daughters filed suit against the Delaware corporation in Florida court to invalidate the trust on technical grounds.R/H: The Florida court does not have in personam or in rem jurisdiction over the Delaware corporation because it did not purposefully contact the state of Florida. The only reason the defendant has contact with Florida is because of the unilateral activity of a third party in choosing to move from Pennsylvania to Florida. Where the only link between the defendant and the forum state is the unilateral activity of another person, the forum state does not have personal jurisdiction over the defendant.
C. Reciprocity - If intentionally contacted the forum state and benefited from the Δrelationship, is subject to the jurisdiction of the courts of the forum state. With the Δbenefits and gains come the responsibility to be subject to the forum state’s courts.
D. Target – The conduct must be targeted at the forum state, not just incident to it. Did the D choose the forum state to do business with? If the defendant did not voluntarily act to engage in affairs with the forum state or a party in the forum state, the conduct is not targeted at the state and there is no reasonable expectation of being haled into court.
a. Interstate business – Businesses sell goods across state lines. If the goods are marketed, produced, and sold in the forum state that corporation has targeted the forum state.
b. Travel – A party usually chooses where to travel and voluntarily does so. Even passing through the forum state in transit to another state counts as voluntarily engagement in the forum state. Driving through or flying over another state is a form of targeted purposeful availment of the state.
Calder v. JonesF: , a Florida resident, writes for a tabloid and wrote a derogatory article about a CaliforniaΔ actress. The California brought defamation of character action against the FloridaΠ defendant.R/H: has purposefully written an article about a California resident that is marketed andΔ circulated in California and has an impact on California markets. This is targeted purposeful contact with the forum state. A court can assert jurisdiction over a party that has never set foot in the forum state if that party has targeted that state with intentional contact.
Burger King v. RudziewiczF: applied for a franchise agreement with Florida plaintiff’s office in Michigan. TheΔ defendant travelled to Florida for training and engaged in negotiations with the Florida plaintiff while there. The owned and operated a Burger Restaurant for some time inΔ
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Michigan, sending payments to Florida but eventually shut down operation. Florida plaintiff sued Michigan for breach of contract.ΔR/H: intentionally and willfully initiated contact with the Florida plaintiffs when heΔ contacted them to set up a franchise in Michigan. Therefore, there is purposeful availment and substantial revenue deriving from contact with the state of Florida. When a hasΔ purposefully directed continuous conduct at the forum state, jurisdiction is reasonable as long as contact with forum state was continuous, substantial, and intentional. Personal presence is not required to assert in personam jurisdiction over a person. Contractual obligation may create enough contact with the forum state. There are no black letter rules to personal jurisdiction. The analysis is always nuanced and contextual.
INDIRECT JURISDICTION
A. Some state courts use the situs of property in the forum state as a method of gaining personal jurisdiction over the defendant. This method of quasi-in rem jurisdiction is largely invalidated by the Supreme Court in Schaffer v. Heitner.
B. A state may not seize the property of a nonresident in order to compel the resident to submit to the jurisdiction of the state. That violates notions of fair play and substantial justice.
Schaffer v. Heitner, 433 U.S. 186, (1977).F: filed shareholders derivative suit against , a corporation incorporated in Delaware. Π ΔThe order of sequestration seized 82,000 shares of stock in the Greyhound corporation, none of which had certificates within the state of Delaware. Delaware statute makes the state the situs of all stock issued by Delaware corporations. The sequestration would not end until s submitted to the personal jurisdiction of the Delaware courts.ΔR/H: It is unfair to to allow the state to indirectly assert jurisdiction over them in the Δabsence of minimum contacts and purposeful availment. They do not reside or hold real property in the state and thus have no reasonable expectations of being drawn into court in the forum state. If the state is precluded from asserting in personam jurisdiction over these nonresident s directly, it be should be prevented from doing so indirectly through holding Δtheir property ransom. All assertions of personal jurisdiction must be validated by the minimum contacts analysis set forth in International Shoe.
GENERAL AND SPECIFIC JURISDICTION
A. General Jurisdiction – the defendant's contact with the forum state is so continuous and substantial that the assertion of jurisdiction is justified even over matters that do not give rise to the lawsuit.
a. Example: residency. The court can assert personal jurisdiction over a resident in a claim resulting from conduct in another state having nothing to do with residency.
b. State courts also have general jurisdiction over a corporation that is incorporated in that state with regards to any claim.
c. Citizenship and incorporation are the traditional grounds for general jurisdiction.
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d. Continuous, substantial, and systematic conduct in the forum state also creates grounds for general jurisdiction.
e. There is at least one court where a person can be sued for any and all claims against him or her.
B. Specific Jurisdiction – Personal jurisdiction over a party can arise out of party’s intentional activities in the forum state that give rise to the lawsuit. Isolated incidents that give rise to a lawsuit allow the courts of the forum state in which the isolated incidents took place to assert personal jurisdiction over the involved parties.
a. Example: Tortious actions. A court has personal jurisdiction over a tortfeasor on all claims arising from that tortious act.
b. Contractual obligations also give rise to specific jurisdiction. If a party purposely contacts the forum state and derives substantial benefit from a relationship with the forum state and its residents, that party is subject to the forum state’s jurisdiction for all claims arising out of the transaction or occurrence that took place in the forum state.
Helicopteros v. Hall, 466 U.S. 408 (1984).F: s brought wrongful death action in Texas court against Colombian defendant-Πcorporation arising out their helicopter crash in Peru. During 1970 – 1977, hadΔ purchased helicopters, spare parts, and accessories from Bell Helicopter company in Fort worth. sent employees and pilots to Fort Worth and Houston for training, management,Δ and maintenance personnel and to ferry aircraft to South America. The South American Δ engaged in contract negotiations in Houston. R/H: s’ claims do not arise out of the ‘s activities in the state of Texas. The fewΠ Δ interactions with the state and its residents are not enough substantial contact to grant he state general jurisdiction over and it offends notions of substantial justice and fair play toΔ assert general jurisdiction over them in Texas. However, dissent observes that the helicopter pilot involved in the crash was trained in Texas and the helicopter was purchased in Texas from a Texas company. Therefore, it may be justifiable for the Texas court to assert specific jurisdiction over . Δ Personal jurisdiction may be asserted over a nonresident defendant only if s/he has continuous, substantial, and systematic contacts with the forum state. Specific jurisdiction is justly asserted when those activities that took place in the forum state give rise to the lawsuit.
FORUM SELECTION CLAUSES
A. A forum selection clause in a contract is applicable as long as it is done in good faith.
B. Forum selection clause cannot be used to unduly harass a party or create extra expense.
C. Forum selection clauses often promote efficiency, making the forum for adjudication the state of incorporation of one of the parties. This is entirely in line with notions of fair play and substantial justice.
a. It makes perfect sense to confine the adjudication of contractual disputes in a forum that has jurisdiction to one of the parties.
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Carnival v. Shute, 499 U.S. 585 (1991).F: went on a cruise with the defendant’s pleasure cruise line and was injured while on Πboard. brought premises liability action against defendant in Washington court. s filed Π Δa 12(b)(2) motion, citing the forum selection clause in the ‘s ticket with the .Π ΔR/H: The clause restricting choice of forum is applicable even though it is not bargained for. There is no bad-faith motive in choosing Florida as the forum, but rather logic and common sense lies behind it. As long as the forum selection clause is invoked in good faith and creates efficiency and consistency, it shall be upheld.
EXTEME INCONVENIENCE
A. If it is extremely inconvenient for the defendant to litigate in the forum state, the defendant may be able to resist the assertion of personal jurisdiction.
B. This is more likely only for foreigners with no purposeful contact with the forum state.C. Inconvenience Analysis
a. The private necessity is staying free from costly litigation.b. The public interest in entering a judgment against the defendant.c. The extent of the inconvenience.d. Purposeful Contact – Any purposeful contact with the forum state invalidates a
presupposition of inconvience. If the defendant has travelled to the forum state before, s/he can do it again to litigate its claim.
e. Foreseeability – Can the defendant reasonably anticipate being drawn into court in the forum state?
D. Back Door – the inconvenience test functions as a back door to personal jurisdiction analysis. If the defendant is incredibly inconvenienced by the assertion of personal jurisdiction and has so little contact with the forum state that it would not reasonably anticipate litigation in the state, it can challenge the personal jurisdiction even if the other elements are satisfied.
Asahi v. Superior Court, 480 U.S. 102, (1987).F: Asahi is a Japanese company that sells automotive parts to a number of companies, including Cheng Shin, a Taiwanese company. Cheng Shin sells 20% of its products in California. Cheng Shin filed an indemnification claim against Asahi in California court after being sued by a California products liability plaintiff.R/H: There is no purposeful availment here. The Japanese tire valve manufacturers sold tire valves that could have be sold in any state across the world. The link between Asahi and California is too tenuous to satisfy the purposeful availment test from Hanson v. Denckla. Additionally, the inconvenience on Asahi on travelling from Japan to defend a case in the California is immense. Even if had minimum contact and purposeful availment in Δthe forum state, it would still offend concerns of substantial justice and fair play to assert jurisdiction over it. It is more foreseeable and fair to have this action adjudicated in court in Taiwan or Japan.
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INTERNET JURISDICTION
A. "Sliding Scale Zippo Factors"a. A website that passively posts information that any party can access and read does
not purposefully contact other states where citizens can access the material.b. However, where a website intentionally tries to serve the market of the forum state,
such as a website with a regional focus or a professional specialization, that kind of contact is targeted at an audience and gives grounds for personal jurisdiction.
c. An interactive website that enables exchange of information over the internet may be subject to personal jurisdiction of the forum state, but this depends on the level and quality of interaction with citizens in the forum state.
B. Posting some material online does not satisfy purposeful contact if the material is not specifically targeted at the forum state. Material that is passively posted so anyone can see it online does not usually establish reasonable foreseeability of civil liability in the forum state.
C. Personal jurisdiction is justified if: a. Material is posted on a website with a regional focus.b. Material specifically mentions the forum state or the region.c. Web site is associated with a certain association or region that is situated in the
forum state.
D. Interactive websites – These sits exchanges information with the nonresident, creating a commercial relationship. If the company knows that a website is used to advertise and transact business with nonresidents, that website owner is purposefully contacting the states of the nonresidents.
a. In the absence of interaction, there is no purposeful availment.b. Interactive business that conduct business over the internet effectively
purposefully contact the citizens in other states.
E. General Jurisdiction - When a company conducts continuous, systematic, and substantial activity with the forum state over the internet, that company may be subject to general jurisdiction in the forum state.
a. This is determined by whether or not the website targets a specific region or state.
TAG JURISDICTION
A. Traditionally states have unchallenged jurisdiction over all individuals that are located within the borders of that state, even if the presence is temporary. A state can “tag” a defendant who temporarily enters the state and thus assert personal jurisdiction over them.
B. The power of domain takes into account purposeful contact. An individual usually chooses to travel to a state. In the rare case someone is brought against his or her will to the forum state, that state does not have personal jurisdiction over the party for lack of purposeful contact with the state.
C. This power of domain is independent of minimum contacts analysis.
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D. Domain is consistent with notions of fair play and substantial justice. One who travels to another state has a reasonable expectation that one will be subject to the courts of that state. It is fair and reasonable to expose even temporary residents of the state to the jurisdiction of the state.
Burnham v. Superior Court, 495 US 604, (1990).F: , a New Jersey resident, went to California to visit his ex-wife and children for a few Δdays. While he was visiting California, his wife served him with a court summons and a divorce petition.R/H: Courts always has jurisdiction over a party who is physically present in the state, regardless of minimum contacts. This principle is a longstanding tent of state autonomy and the foundations of American law. The state’s ability to assert jurisdiction within its own borders shall not be infringed by concerns of minimum contacts or inconvenience of travel. Tag jurisdiction is legitimate. State has authority over everything in its borders.
100 MILE BULGE RULE
A. A District Court has personal jurisdiction over anyone who is served within 100 miles of the court issuing the summons.
B. The 100-mile bulge rule applies to unusual cases where a party is joined to a suit as a third-party defendant under Rules 14 or 19.
a. Jurisdiction is rightfully asserted over that party if they reside or have incorporation in the forum state or
b. They are served within 100 miles of the courthouse that issues the summons. c. This rule allows jurisdiction over parties in any state as long as they are served
within a specific radius (100 miles).
C. This rule allows a court to exercise jurisdiction over parties joined by impleader under Rules 14 and 19.
a. It would be pointless to make an impleader against a party across state lines if the court was unable to assert personal jurisdiction over that party.
MINIMUM CONTACTS
A. The level and amount of activity conducted in the forum state determines the ability of the forum state to exert personal jurisdiction over an out-of-state party.
B. To make the assertion of personal jurisdiction just, the defendant must have such contact within the forum state that s/he can reasonably expect to be drawn into court in the forum state.
C. Minimum contact is not: random fortuitous, attenuated, or isolated activities.
D. Minimum contact is: premeditated, intentional, planned, consistent, continuous, and substantial.
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Level of Activity: Out-of-state conduct has impact in forum state
Single Act within Forum
Mid-Range of Activities within forum
Continuous, systematic, and substantial activities
Relation of Claim to Activity:
Only related claims (Specific Jurisdiction)
Only related claims (Specific Jurisdiction)
Only related claims (Specific Jurisdiction)
All claims, related or not (General Jurisdiction)
INTERSTATE STREAM OF COMMERCE
A. Selling goods across state lines may or may not be purposeful contact with those states. This depends on the marketing of the good, the reach of the company, and the extent of targeting at a specific market.
B. No majority rule on the proper analytic procedure.C. How the product ends up in the forum state is important. Is the good marketed in or
targeted at the forum state? Is the good of a specific nature that it naturally travels from state to state?
D. Three perspectives on stream of commerce theorya. O’Connor Rule: There must be an active effort to serve the forum state market. To
justly assert jurisdiction over a nonresident, one has to show that the defendant's product was purposefully directed to the forum state, not merely that the product was swept into the stream of interstate commerce.
i. The satisfaction of minimum contacts must arise out of intentional conduct that was purposefully directed towards the forum state.
ii. Additional conduct of the defendant may serve to indicate a purpose to serve the market in the forum state.
1. Have they designed the product for the market in the forum state? 2. Have they advertised in the forum state? 3. Have they marketing the product through a sales agent in the forum
state?b. Brennan Rule: Four justices that think that injection of goods into the international
stream of commerce creates purposeful availment of the forum state. Selling goods across state lines gives the company the reasonable expectation that it will be hailed into court in that state.
i. Taking part in the interstate stream of commerce is purposeful contact. ii. When those goods are sent out to distributors and retailers, they could end
up in any state. The defendant should be able to foresee the goods travelling to different states and causing problems and thus lawsuits.
Worldwide Volkswagen v. Hanson, 444 U.S. 286, (1980).F: s purchased an automobile from the defendants at Seaway Volkswagen Inc. in Massena,Π New York in 1976. While moving to Arizona, their car broke down in Oklahoma. They brought products liability action against defendant corporations, who are based in New York and maintain retail dealers in New Jersey and Connecticut. They have no business in
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Oklahoma, ship no products there, have no agents there, and purchase no advertisements in Oklahoma.R/H: Although it is foreseeable that Seaway’s product would travel to another state and get in an accident, this is not a sufficient basis for personal jurisdiction under the Due Process clause. If foreseeability were sufficient basis, any product purchased in one state and brought to another would give that state jurisdiction over the nonresident seller in any state the incident occurred. The foreseeability of the travel of products to the forum state alone is not sufficient to demonstrate minimum contacts; there must be purposeful contact in the forum state to satisfy the minimum contacts requirement.
VENUE
A. There may be more than one forum that can assert jurisdiction over the defendant. Given the set of possible forum courts, which court should be used? That is an issue of venue.
B. Convenience - Considerations of venue evaluate which court will be the most convenient to the involved parties.
a. In most cases, the plaintiff's choice of forum is given substantial deference.
C. State venue statutes consider which county to adjudicate the case. These statutes try to get the case litigated in the proper county court.
D. Federal venue statutes consider which district should be used to adjudicate the case.a. 28 USC §1391(a) concerns where suit may be brought in an action in federal court
concerning a state law - federal court's only claim to the action is diversity of citizenship.
b. 28 USC §1391(b) concerns where suit may be brought in an action in federal court concerning a federal law - federal court's claim to the action is a federal question.
E. Law shopping – A plaintiff cannot move venue in order to take advantage of more favorable law. The applied law will not change in the event that a case is transferred to another forum according to 28 U.S.C. § 1404.
a. This is an interjudicial housekeeping statute. The parties should not be allowed to forumshop for the most advantageous law.
b. The Third Circuit said that if this law-freezing principle applies to §1404 it should apply to dismissals under §1406.
STATUTORY BASIS
A. 28 U.S.C. § 1391(a) is for cases of diversity jurisdiction. It authorizes a choice of forum:a. If all defendants reside in the same state, a judicial district where any defendant
resides.b. A judicial district in which a substantial part of the events or property that is the
subject of the action is situated.
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c. A judicial district in which any defendant is subject to personal jurisdiction at the time the action was commenced, if there is no district in which the action may otherwise be brought.
B. 28 U.S.C. § 1391(b) is for cases not based on diversity jurisdiction. It authorizes a forum:a. If all defendants reside in the same state, a judicial district where any defendant
resides.b. A judicial district in which a substantial part of the events or property that is the
subject of the action is situated.c. A judicial district in which any defendant may be found, if there is no district in
which the action may otherwise be brought.
C. 28 U.S.C. §1406 – Dismissal for defective venuea. A party can dismiss an action for choosing the wrong venue by raising a 12(b)(3)
motion.b. A court may choose to transfer the action rather than dismiss it in the interest of
justice.
D. 28 U.S.C. § 1404 – Transfer of Venuea. Applies only to federal courts.b. In the interest of justice and convenience the court may transfer an action on its to
another venue where it could have been brought.c. A party may also file a 28 U.S.C. § 1404 to request a new venue in the interests of
convenience and justice.d. In most cases, the plaintiff's choice of forum is given substantial deference. The
movant must raise a serious reason to transfer venue.
Piper Aircraft Co. v. Reyno, 454 U.S. 235, (1981).F: Plane crashed in Scotland. Family of the decedents hired an American firm to bring suit against American aircraft manufacturer and component manufacturers. brought suit in ΠState Court in California because the products liability laws are easier in California. s ΔPiper and Hartzell used 28 U.S.C. § 1441 to remove the case to federal court in Central District of California. Piper invokes 28 U.S.C. §1404 to move to transfer the case to the Middle District of Pennsylvania. After transfer to M.D. Pa., the s move to dismiss the case Δunder forum non conveniens on grounds that it should have been litigated in Scotland. The Pennsylvania district court dismissed the case after getting a concession from the defendants that they will agree to be subject to personal jurisdiction in Scotland and waive statute of limitations claims.R/H: Allowing a party to move a case to a justification with more favorable laws would completely violate the rule of forum non conveniens. The point of forum non conveniens is to ensure that the trial is convenient, so the choice of a foreign party deserves less deference.Usually the plaintiff’s choice of forum will be given deference. However, where the deference to the plaintiff’s choice of forum is not necessary, the court should utilize a flexible balancing test.
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VENUE BALANCING TEST FROM PIPER
I. The factors pertaining to the private interests of the litigants include the (1) "relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, (2) and the cost of obtaining attendance of willing, witnesses; (3) possibility of view of premises, if view would be appropriate to the action; and (4) all other practical problems that make trial of a case easy, expeditious and inexpensive." Gilbert, 330 U.S., at 508.
II. The public factors bearing on the question included (5) the administrative difficulties flowing from court congestion(6)The local interest in having localized controversies decided at home(7)The interest in having the trial of a diversity case in a forum that is at home with the law that must govern the action(8)The avoidance of unnecessary problems in conflict of laws in the application of foreign law(9) The unfairness of burdening citizens in an unrelated forum with jury duty .
FORUM NON CONVENIENS
A. Forum non conveniens is a common law doctrine that allows courts to avoid litigation in a venue obviously inconvenient to the defendant.
B. Forum non conveniens is a matter of choice of which state to bring suit in.
C. Plaintiff is allowed to refile the action if it is dismissed under forum non conveniens.
D. The law of the newer convenient court will be used if moved under forum non conveniens.
SUBJECT MATTER JURISDICTION
A. ARTICLE III §2 of Constitution: Federal Question / Diversity of Citizenship Jurisdiction
B. FEDERAL QUESTION JURISDICTION : Plaintiff’s cause of action must arise under the constitution, treatise, or laws of the United States. Federal courts are courts of limited jurisdiction.
Ex. Plaintiff files in federal court and alleges: I own US Copyright of motion picture issued by Title XVII of U.S.C. Widget Theatre can show movie for 2 weeks if they pay me, etc. They have not paid me. They claim the copyright is invalid
i. Not Subject Matter Jurisdiction. Cause of action is contract breach. Not complaint infringing on copyright action. The federal question is not the cause of action.
ii. There may be a federal defense, but it is the plaintiff’s cause of action that is important, not an anticipated federal defense. No $ amount limit.
C. Defense: 12(b)(1): if you feel there is no federal jurisdiction you raise this defense.
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D. State courts are courts of general jurisdiction.
E. The United States court system has two concurrent networks of courts – the federal courts and the state courts exist around and with each other.
F. A litigant has the choice of type of court to bring an action in – federal or state court.
G. Two roads to federal court:
Original Jurisdiction - A party may bring an action in federal court because the claim involves a federal statute, the Constitution of the United States, or where the United States of a federal officer is a party to the suit.
Diversity Jurisdiction - A party may bring action in federal court because there is complete diversity of citizenship between the parties.
H. Parties can plead or remove a case to a federal court on either: federal question jurisdiction or diversity jurisdiction.
FEDERAL QUESTION JURISDICTION
A. 28 U.S.C. § 1331 empowers the federal court to hear all civil actions arising under the Constitution and the laws and treaties of the United States.
B. Where a claim or defense arises under a federal statute, the Constitution, or a treaty of the United States, the action may be brought in federal court regardless of the citizenship of the parties.
C. “Arising under that law” - The phrase "arises under" in 28 U.S.C. § 1331 is vague and unclear. Any cleverly-written complaint can assert a federal question. So what does "arises under" really mean in relation to federal law?
a. Justice Holmes said: "a suit arises under the law that creates the cause of action".b. Any claim or defense that could not exist but for the federal statute or provision is
created by the federal law and thus arises under federal law.
WELL PLEADED COMPLAINT RULE
A. The federal issue under 28 U.S.C. § 1331 must be explicitly stated in the plaintiff's claim.B. No preemptive removal - It is not enough that the plaintiff anticipates a defense or that a
federal issue may arise and includes that issue in the complaint - it must be part of the original claim against the defendant.
a. The fact that a defendant may and actually does raise a Constitutional issue as a defense does not create a federal issue in the complaint. It may later cause the action to be removed to federal court, but does not give the plaintiff the right to bring the action in federal court.
C. The vast majority of § 1331 cases are covered by Holmes's statement "a suit arises under the law that creates it".
a. Essentially, there must be a federal statute or Constitution under which a claim arises.
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b. State negligence claims, while relevant to federal concerns, do not belong in federal court outright.
c. There is generally no such thing as federal tort law, federal contracts law, or federal criminal law (with some exceptions).
Louisville Railroad v. Mottley, 211 U.S. 149, (1908).F: In consideration of the ’s waiving rights to sue the defendants in a negligence action, Π Δagreed to issue free passes to the plaintiffs for unlimited travel on all of the defendant’s railroad lines present and future for life. The agreement was signed in 1871 and honored, but in 1907 the refused to renew ‘s free pass for the railroad, arguing that Δ ΠCongressional Act of June 26, 1906 forbids the giving of free transportation passes. s Πbrought action for breach of contract and won at the trial level, after which s petitioned forΔ certiorari.R/H: An action can be dismissed at any point by any party or by the court for lack of subject matter jurisdiction. It is the duty of the court to actively dismiss an action for lack of subject matter jurisdiction regardless of the merits, appellate status, or entered judgment.
EXCLUSIVE JURISDICTION
The federal courts have exclusive jurisdiction over claims arising out of admiralty law, copyright law, bankruptcy law, and where the United States of America is a party to the suit.
DIVERSITY JURISDICITON
A. 28 U.S.C. § 1332 allows a party to bring an action in federal court if there is diversity of citizenship in the parties and the amount in controversy exceeds $75,000.
B. Courts have interpreted 28 U.S.C. § 1332 to require complete diversity of citizenship.
a. Complete diversity: no two parties from opposing sides of the “v.” are from the same state.
b. Although the plaintiffs may be from the same state and defendants are from the state, if even a single plaintiff and a single defendant are from the same state that destroys complete diversity.
C. Amount in Controversy requirement
a. In addition to diversity, there must be more than $75,000 in dispute.
b. Aggregation: plaintiffs can add claims against the same defendant in order to satisfy the amount in controversy in the aggregate. Thus, two $40,000 claims against the same defendant can be filed concurrently under FRCP # 18 and thereby satisfy the amount of controversy requirement.
Ochoa v. PV Holding Co., 211 2007 WL 496612, (E.D. La. 2007).F: brought negligence action under state law against three s: the rental car agency Π Δincorporated in Delaware, the title holder incorporated in Delaware, and the car operator,
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who may be a resident of Texas or Louisiana. s removed the suit to federal court on Δ11/30/06 on grounds of diversity jurisdiction. Paul Gulley was a citizen of Louisiana, but Δon 8/29/05 moved to Texas because Hurricane Katrina destroyed his New Orleans home. Mr. Gulley was domiciled in Texas and had a job in Texas at the time of the deposition. He still holds a Louisiana driver’s license, pays taxes in Louisiana, and votes in Louisiana.R/H: The citizenship of a litigant for purposes of diversity jurisdiction is determined by one’s intent to reside indefinitely at the time the action was filed. Facts that indicate residency include where the party pays taxes, owns property, belongs to clubs, maintains a bank account, holds a drivers license, maintains a domestic home, and has attained gainful employment. The court must look to the party’s status when the action was commenced, not at the time of trial or deposition. Paul Gulley was a citizen of Louisiana at the time the Δaction was commenced and thus there is no complete diversity of citizenship.
Preston v. Tenet Health Systems Memorial Ctr., 485 F.3d 804, (5th Cir. 2007).F: When Hurricane Katrina landed in Louisiana, hospital lost electricity, the service was Δsuspended, and other problems. Because of the failure of the hospital to provide continuous life support to its patients many of them died during the hurricane. Hundreds of plaintiffs brought suit against Tenet Health Systems Memorial Center.R/H: The claims in this class action all stem from Louisiana negligence law – there is no federal question here. Additionally, there is no complete diversity because the overwhelming majority of s permanently resided in New Orleans, but may have been Πtemporarily displaced by Hurricane Katrina. This is a perfect example of a truly localized occurrence giving rise to a class action lawsuit that should remain in state court. The local controversy exception prohibits a federal court from exercising jurisdiction if more than two thirds of the class members and at least one significant defendant are residents of the state and the case essentially involves state law.
DEFINING RESIDENCY
A. Natural Persons: the citizenship of a natural person turns on two things: domicile and intent to reside indefinitely.
B. A person is a citizen of the state in which he is domiciled. C. Residence is also dependent on one's intent to reside indefinitely in a state. Intent can be
demonstrated by:a. The state in which a person's driver's license is issued.b. The state in which a person votes.c. The state in which a person pays taxes.d. The state in which a person works.e. The state in which a person holds property.
D. *Residency is determined by the status of the party at the time the action was filed.
E. Residency of a Corporationa. The residency of a corporation is defined by the state statute itself. A corporation
can notably be a resident of more than one state. i. It is usually a citizen of the state in which it is incorporated and the state in
which it has its principal place of business.
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ii. There is one principal place of business and one state of incorporation. These two places may be the same state.
b. There are two tests to determine a corporation's principal place of business: i. the nerve center test determines where the principal management occurs.
ii. The other test considers where most of the business operations take place in.
iii. The court has discretion to choose which is more determinative of a principal place of business: the nerve center or business operations.
MULTI PARTY MULTI FORUM TRIAL JURISDICTION ACT
A. 28 U.S.C. § 1369 allows federal courts to hear certain kinds of diversity cases when the case is big enough to merit federal attention even though complete diversity is absent.
B. Minimal diversity: there is some diversity in the lawsuit where some plaintiffs are residents of different states of the defendants, but not all. Although there are parties from the same state on opposite sides of the "v." there are also parties from different states on opposite sides of the "v." and thus minimal diversity justifies federal jurisdiction over some suits.
C. MMTJA requires a class action with minimal diversity (defined by any member of a class of plaintiffs being from a different state as one of the defendants).
D. It is difficult to establish complete diversity in a class action with so many parties because it is inevitable that two out of the five hundred parties involved may be of the same state.
E. The courts have an interest in creating an efficient and adept forum to adjudicate a large class action lawsuit. Therefore, there must be an efficient federal forum to hear a large class action on issues of national interest. The MMTJA establishes this forum.
F. Discretionary Controversy Exception: The District Court may decline to exercise jurisdiction over a class action in the interests of justice if more than one third but less than two-thirds of the proposed class members are residents of the state in which the suit was filed.
a. The court may choose whether or not justice requires a federal forum for a certain action.
Passa v. Derderian, 308 F.Supp. 2d 43, (D.R.I. 2004).F: A flood of litigation followed a disastrously fatal nightclub fire. Numerous products liability, negligence, and contribution actions were filed throughout New England in both state and federal courts, including class actions by fire victims, their estates, and their family members. The in these class actions are the band, the nightclub, the managers, corporate Δsponsors, and the title holding corporation.R/H: A class action of substantial size and of national interest may be argued in federal court even though complete diversity does not exist. The Multiparty Multiforum Trial Jurisdiction Act (MMTJA) allows a class action of sufficient size to be argued in federal court although complete diversity of citizenship may be lacking. Subsection (a) of MMTJA is satisfied because less than one half of the s reside in Rhode Island or any other state. The Πaction shall remain in federal court.
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REMOVAL
A. 28 U.S.C. 1441(a) allows a defendant to remove a case to federal court if it could have been brought there in the first place.
B. Only applies to diversity jurisdiction cases.C. Timing – A party can only move for removal within 30 days of receipt of the complaint. D. One way street – Only a defendant can move for removal, not a plaintiff.E. Removal is only allowed where there could have been federal jurisdiction in the first place.F. Only one court can host a removal: the federal district and division embracing the place
where such action is pending in state court.G. 28 U.S.C. § 1446 provides the procedure for removal. A defendant may file a short and plain
statement of the grounds for removal within 30 days of receiving the complaint. After 30 days expire, so does the opportunity for removal.
H. If there is a federal question in the plaintiff's complaint, the action is removable regardless of the citizenship or diversity of the parties.
a. Strategy – To avoid removal to federal court, the plaintiff can:i. Refrain from raising a claim under federal law.
ii. Can avoid removal by suing only nondiverse defendants.iii. File suit in the state where one of the defendants resides.
FORUM DEFENDANT RULE
A. 28 U.S.C. 1441(b) - A case may be removed to federal court only if it is brought in a state in which not a single one of the defendants resides. The state court must not be state of residency of any of the defendants.
a. If the plaintiffs give at least one of the defendants the home field advantage of a state court in the state in which the defendant resides, the action may not be removed.
b. The defendant already has a convenient forum in the form of a local state court. Therefore, none of the defendants may remove to federal court.
REMAND
A. 28 U.S.C. 1441(c) – A plaintiff may reverse the removal to federal court if state law dominates the removed claim. The court decides in its discretion whether the entire action should be argued in federal court or state court. Where state law claims dominate the action, there is a strong presumption to let the state court decide the case.
Burnett v. Birmingham Board of Education, 861 F. Supp. 1036, (1994).F: s brought a breach of contract action in state court. s removed to federal court under Π Δ28 U.S.C. §1331(a) and 28 U.S.C. §1343(a)(3). s moved to remand the case to state court Πpursuant to 28 U.S.C. §1441(c)
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R/H: The remand clause of §1441(c) allows remand of the entire case, including federal claims, where state law predominates. Remand under §1441(c) requires only that the prior removal to federal court be based on §1331 and not solely on §1331.
SUPPLEMENTAL JURISDICTION
A. When claims arising out of state and federal law are so intertwined the federal court may exercise supplemental jurisdiction over the both to argue them together as one constitutional case.
B. This is a discretionary doctrine - the court may or may not exercise jurisdiction over a state claim that is tied to the federal claim with a common nucleus of operative fact.
C. "Common nucleus of operative fact" - Gibbs requirement for tying together claims in supplemental jurisdiction.
D. Requirements from 28 U.S.C. §§1331(a), 1332(a) for federal question and for complete diversity of citizenship still apply.
E. Analysis Procedure for Supplementary Jurisdiction – Steps to follow
1. Does the exercise of SMJ violate 28 USC §1332? 2. Does efficiency require supplemental jurisdiction? 3. Do the claims and/or parties arise from a common nucleus of operative fact? 4. Has the plaintiff brought in the nondiverse party, or has the defendant impleaded
him or her?
Owen v. Kroger, 437 U.S. 365, (1978).F: filed a wrongful death action against diverse OPPD in federal court under diversityΠ Δ jurisdiction. then amended her complaint to add Owen Equipment as a nondiverse .Π Δ OPPD was granted summary judgment. Owen Equipment filed a 12(b)(1) motion toΔ dismiss.R/H: The 12(b)(1) motion is granted. Complete diversity was destroyed when amendedΠ her complaint to include Owen Equipment as a . If Δ Gibbs were the only test, couldΠ evaded diversity of citizenship requirements of 28 U.S.C. §1332(a)(1) by waiting for toΔ implead a nondiverse third-party . Δ The Gibbs test for “common nucleus of operative fact” is not the only requirement for federal jurisdiction; the statutory requirements of 28 U.S.C. § 1332(a)(1) are also mandatory.
F. Ancillary Jurisdiction – the federal court has jurisdiction to hear claims against parties impleaded by an original defendant. Codified in 28 U.S.C. §1367(a).
a. No jurisdiction to hear claims joined by the plaintiff b/c plaintiff cannot sue nondiverse defendants in federal court under diversity jurisdiction.
UMW v. Gibbs, 383 U.S. 715, (1966).
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F: brought a conspiracy action under state law against concurrently with a claim of Π Δviolations of § 303 of the Labor Management Relations Act (61 Stat. 158) of 1947. The §303 claim was dismissed by a JNOV. The court entered a verdict in favor of on the state Πconspiracy claim, which now appeals. ΔR/H: The federal court justly chose to retain jurisdiction over the remaining state law claim as part of pendent jurisdiction. When pleads state and federal claims arising under a Πcommon nucleus of operative fact, there is pendent jurisdiction and the federal court may assert jurisdiction over the claims as a whole in the interests of efficiency and fairness. In the event that the federal claim is dismissed on a trial motion a federal court has discretion whether or not to dismiss the remaining state law claims for lack of subject matter jurisdiction.
Finley v. United States, 490 U.S. 545, (1989).F: filed negligence action against G & E and City of San Diego in state court, then filed Πnegligence claim under Federal Tort Claims Act (FTCA) against the Federal Aviation Administration (FAA) in federal court. then moved to amend her federal complaint to Πinclude claims against the state defendants and tie the cases together. The motion was granted. Defendants filed an interlocutory appeal to challenge the pendent-party jurisdiction.R/H: is required to argue her case in federal court because the FTCA require it. This Πlimited choice of forum does not justify arguing state law claims against intrastate parties in federal court. The diversity requirements and the Consitution outweigh the interests for convenience and efficiency. A plaintiff may not argue state law claims against an added nondiverse defendant in federal court. will have to argue her claims in two different Πtrials – one in state court against state defendants and one in federal court against the United States.
STATUTORY BASIS
28 U.S.C. §1367 – Federal courts have discretion to hear state law claims that arise out a common nucleus of operative fact giving rise to the federal law claims.
1367(a) - Supplemental jurisdiction includes claims that involve the joinder of additional parties.
1367(b) - It shall not grant jurisdiction by plaintiffs against a nondiverse defendant.
1367(c) - Supplemental jurisdiction is discretionary.
1367(d) - The statute of limitations is frozen when state law claims are dismissed for lack of subject matter jurisdiction.
ERIE DOCTRINE
A. The Erie Doctrine is a vertical choice of law issue. a. Should the federal court apply federal law or state law when deciding a case? b. To which issues does federal law apply, and to which issues does state law apply?
B. State law provides the rule of decision in a case of diversity jurisdiction.a. If the case does not arise under federal law, state law provides the decision.
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Erie Railroad v. Tomkins, 304 U.S. 64, (1938).F: brought negligence action against Railroad Company in District Court of New York Π Δfor injuries resulting from when he was hit by a passing train while walking along the train tracks. According to Pennsylvania law was a trespasser when walking along railroad Πtracks and would be barred from recovery. R/H: The court should avoid inequitable administration of justice by keeping the choice of law between federal and state courts constant. However, the court does not want to allow unfair forum shopping by plaintiffs who go looking for the most sympathetic state. In cases argued in federal court on diversity jurisdiction, the federal courts should use the state law of the state in which the action is brought.
ERIE DOCTRINE CHECKLIST
A. Directly Conflicting Rules Test (From Hanna v. Plumer)
a. Look to see if there is a direct collision between the state rule and the federal rule. Does the federal rule cover the same area that the state rule embodies? If there is no direct collision the court does not have to choose one over the other and can simply follow the federal rule.
B. Substantive/Procedural Rule Test. Decide whether the conflicting rules are procedural or substantive.
a. In a collision between substantive laws, the state law will prevail.i. But, constitutional provisions always trump state law.
ii. But, the state law will only be upheld if it does not violate the twin aims of Erie. Look to Modified Outcome Determinative Test.
iii. Would upholding the state law to the exclusion of federal law lead to improper forum shopping or inequitable administration of justice?
b. In a collision between procedural laws, a valid federal law will usually prevail.
c. The federal law must be valid under 28 U.S.C. § 2072 in that it does not abridge, modify, or enlarge any substantive right. It must also be valid under the Constitution. If the rule is invalid, it will not be used.
d. If the rule is valid under 28 U.S.C. § 2072 and the Constitution, the federal rule prevails and in fact displaces state law under the supremacy clause.
C. Modified Outcome Determinative Test
a. If applying the federal rule to the exclusion of the state rule would change the outcome of the civil action, the federal rule should not be used. If the upholding of the federal rule would not change the outcome, merely the procedural process, the federal rule should be used.
b. Modified Outcome Determinative Test: Also apply the twin aims of Erie: i. Promote equitable administration of justice
1. Would applying the federal rule create divergent outcomes in different courts? If so, the court must follow the state law to create consistent outcomes.
ii. Prevent forum shopping.
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1. Would the plaintiff deliberately choose federal court over state court to gain some advantage?
2. If there is a substantive advantage to be gained, there is a possibility of forum shopping and the state law should be applied.
CONFLICTING RULES TEST
A. Is there a direct collision with state law or rules?
B. A federal constitutional provision will always trump state law regardless of substantive/procedural characteristics. By nature of the Supremacy Clause the Constitution is the highest law of the land.
a. i.e. Fifth, Sixth, and Seventh Amendments trump state law.
C. If the conflicting rule is substantive use the state law.
D. If the conflicting rule is procedural use the federal law if…
a. Federal law must be valid under Constitution and the Rules Enabling Act. The federal rule cannot abridge, enlarge, or modify any substantive right.
E. Classifying procedural rules: Does the rules only regulate the judicial process for enforcing rights and duties recognized by substantive law and for justly administering remedy and redress for disregard or infraction of them? Is it rationally only a procedural issue?
a. Examples: In what order to submit forms, when the time period for a motion ends, when the action is considered to have commenced, and what evidentiary standards are to be used.
F. If there is no collision, use the federal rules as long as…a. Federal rule does not violate twin aims of Erie Doctrine.
i. Promote equitable administration of justice 1. Would applying the federal rule create divergent outcomes in
different courts? If so, the court must follow the state law to create consistent outcomes.
ii. Prevent forum shopping.1. Would the plaintiff deliberately choose federal court over state court
to gain some advantage? 2. If there is a substantive advantage to be gained, there is a possibility
of forum shopping and the state law should be applied.
b. Check: is there an overriding federal interest for applying this rule? Does it injure the independence of the federal judiciary to require the state law? If so, federal interest compels use of the federal rule.
Hanna v. Plumer, 380 U.S. 460, (1968).F: brought negligence action against the estate of tortfeasor Louise Plumer Osgood in the ΠDistrict Court for the District of Massachusetts under diversity jurisdiction. filed Πcomplaint compliant with FRCP 4(d)(1). moved for summary judgment on grounds that Δ
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defendant had failed to properly serve the complaint pursuant to Mass. Gen. Laws Ann. c. 197 § 9.R/H: There is a conflict between state and federal rules here on the proper procedural to submit a civil complaint. The outcome determinative test is not absolute. Instead of outcome determinative test, the rule should be whether or not the dispute rule really regulates procedure. Purely procedural matters should be controlled by federal rules of procedure.
OUTCOME DETERMINATIVE TEST
A. If applying a federal rule to the exclusion of the state rule would change the outcome of the action, it should not be used.
B. As long as the outcome does not change, merely the process the action goes through, the federal rule can be applied.
Guaranty Trust v. York, 326 U.S. 9, (1945).F: brought breach of fiduciary duty claim against bank. moved to dismiss the action Π Δ Δon grounds that the statute of limitations had expired.R/H: Regardless of whether the case was argued in state or federal court, the outcome should be substantially the same. If the outcome is substantively the same federal courts can apply the federal rule instead of the state one. Federal courts have to apply state statutes of limitation and not the federal statute of limitations.
SUBSTANTIVE/PROCEDURAL RULES TEST
A. The federal courts have a vested interest in upholding the procedural rules that the judiciary has created.
B. However, citizens have a claim to have their substantive rules protected. If a rule changes one’s substantive rights it should be determined by the state rule of decision.
a. To allow the federal rule to define substantive rights would lead to divergent outcomes between the state and federal courts.
C. If the rule is procedural, use a valid federal rule of decision.
D. If the rule is substantive, perform the modified outcome/determinative test. Does following the state rule accomplish the twin aims of Erie?
a. In most cases state law will win out. The federal court will be obligated to emulate the result that would occur in state court, unless doing so encourages improper forum shopping and inequitable administration of justice.
E. Contrarily, a state rule does not have to be followed if it is not bound up with the state's rights and obligations or a Constitutional right of the citizen.
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Byrd v. Blue Ridge, 356 U.S. 525, (1958).F: brought negligence action. argued that was barred from suing because the Π Δ Π ΔSouth Carolina Workmen’s Compensation Act restricted workplace injury compensation to a statutorily-defined compensation level.R/H: The outcome-determinative test, while suggestive, is not demonstrative. The interests of the federal court’s efficient and organized operations should be respected, especially where the outcome-determinative test does not return a strong result for either state or federal law. The Seventh Amendment's guarantee to a jury trial should win out over a state law requiring a judge to decide such an issue. The federal standard for a jury wins over the state one for a judge.
Walker v. Armco, 446 U.S. 740, (1980).F: brought products liability action against defendant in the United States District Court Πof the Western District of Oklahoma. filed a motion to dismiss the action on grounds that Δthe action was barred by Oklahoma statute of limitations. Oklahoma statute of limitations requires an action be commenced within two years of the events giving rise to the lawsuit. Oklahoma statute says the action is commenced when service is made to , while FRCP #3 Δsays the action is commenced when the action is filed.R/H: There is no conflict here because the FRCP does not define a statute of limitations as the Oklahoma statute does. Because there is no conflict, the court considers whether FRCP#3 abridges a substantive right – an action should not be given longer life in federal court than it is in state court. Giving an action in federal court longer time to be filed than an action in state court would encourage unfair forum shopping. § 97 is a substantive rule of decision, it controls service of process in Oklahoma federal court, and is binding on the federal court as a state rule of substantive rights.
STATUTORY BASIS
Rules Enabling Act, 28 U.S.C. § 2072.
(a) The Supreme Court shall have the power to prescribe general rules of practice and procedure and rules of evidence for cases in the United States district courts (including proceedings before magistrate judges thereof) and courts of appeals.
(b) Such rules shall not abridge, enlarge or modify any substantive right. All laws in conflict with such rules shall be of no further force or effect after such rules have taken effect.
(c) Such rules may define when a ruling of a district court is final for the purposes of appeal under section 1291 of this title.
FINALITY
A. When a court issues a final judgment on a claim or issue, it is ultimately decided completely. A party cannot re-litigate issues that have already been decided in a court of law.
a. This rule gives force to the courts. Courts cannot provide conflicting decisions because to do so would eradicate the concept of justice.
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b. We cannot have different courts returning different verdicts on the exact same issue or claim.
c. It gives peace of mind to the litigant who won the action, and conserves time and resources by incentivizing parties to bring all related claims and parties in the first and same action.
B. Each litigant has an opportunity to argue his or her case before a neutral fact finder. Everyone deserves his or her day in court – this is a Due Process and fairness issue.
a. However, this is not an absolute right.b. A party that has his or her claim dismissed with prejudice by a judge has had his or
her day in court. One cannot re-file that action and hope for a jury verdict if the judge has entered a final judgment.
C. If a litigant has had a full and fair opportunity to litigate a claim or issue, it may not be reopened in a new issue.
a. It may be appealed, but that is a different matter. A verdict under appeal is not a final judgment.
CLAIM PRECLUSION
A. Also known as Res Judicata.B. Res Judicata – A party can preclude an opponent from bringing a claim against him or her
on grounds that it should have been included in a prior action.a. The action will be dismissed for efficiency reasons. If the second claim is really the
same as the first claim, it should have been brought in the previous action and cannot be brought in the second.
i. Ex: Pam cannot sue Bob once for property damage stemming from a car accident and a second time for personal injury from the same car accident.
C. Requirements for Res Judicata:a. There has been a final judgment on the merits of this claim.b. Both parties were parties in the previous lawsuit (mutuality of obligation).c. Claim arises out of the same transaction or occurrence as the original lawsuit.
D. If the second action arises out of the same transaction or occurrence giving rise to the first action and the parties are the same, then the second claim is precluded by Res Judicata.
E. The modern trend focuses on the transaction view of the claim, rather the older analysis of differential rights and damages. If the facts or evidence in the second action involve a common nucleus of operative fact as the first action, these two actions are actually part of the same claim. The second claim will thusly be precluded.
Car Carriers v. Ford, 789 F.2d 589, (7th Cir. 1989).F: In 1982 and six other plaintiffs brought an antitrust action against along with five Π Δother pendent state law claims. The antitrust claim was dismissed with prejudice. The pendent state law claims were dismissed without prejudice. In 1983, brought suit Πagainst for violations of the RICO act, the Interstate Commerce Act, and other violations ofΔ Illinois state business law.
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R/H: It is clear that the parties are the same now as they were in 1982 and a final judgment had been handed down back in 1982 that applies here. The causes of action detailed in the 1983 complaint are the same that were included pendent to the federal claims in 1982. Because these cause of action were dismissed a year ago, they are precluded from being brought again here.
FINAL JUDGMENT ON THE MERITS
A. A claim that is dismissed under FRCP 12(b)(1) - 12(b)(3), or 12(b)(7), is not later subject to claim preclusion. These kinds of dismissal are generally done without prejudice.
a. This is not a final judgment on the merits, it only points out a procedural fault in the pleadings or choice of court/venue.
B. However, if the court decided an issue in the process of deciding jurisdiction or indispensible parties, that holding can be binding on subsequent actions and create issue preclusion.
a. Court may decide pleading does not raise a federal issue and does not satisfy federal question jurisdiction. The action can be re-filed, but not under federal question jurisdiction – that issue has been given final judgment.
C. A FRCP 12(b)(6) dismissal will usually preclude the claim from being brought in a subsequent action. However, the court may dismiss under 12(b)(6) without prejudice, in which case the claim is not precluded from re-filing.
POLICY - EFFICIENCY
F. The federal rules behind Res Judicata, compulsory joinder of claims, joinder of parties, and supplementary jurisdiction all use the same language to determine if two claims are actually the same one. The policy behind all of these rules if efficiency.
G. These rules are intended to establish a just, efficient, and fair administration of justice.
H. Modern FRCP allow for broad joinder of claims and parties. Once again, this is in order to ensure swift and efficient use of justice.
I. Res Judicata incentivizes parties to use the joinder mechanisms because if they do not they are prevented from doing so after the conclusion of the first action.
J. Rule 13(g) on compulsory counterclaim and Rule 12(b)(7) on indispensible parties require a party to bring related claims and parties into court in the first action or lose one’s rights to judgment against those parties and on those claims.
PROCEDURAL TOOLS FOR RES JUDICATA
FRCP 8(c)(1) allows Res Judicata as an affirmative defense.
FRCP 56(c) allows a party to move for summary judgment on Res Judicata by claiming there is no genuine issue of material fact because the issue of fact has already been ruled on this issue in one's favor.
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EXEMPTIONS TO RES JUDICATA
A. Exemptions under Discovery of Factsa. If new facts have occurred since the first action was commenced, the plaintiff may
be allowed to bring the new action because it involves a new transaction or occurrence.
b. In this respect, the action is not the same as the first one because although it does have some similar facts, it has entirely new transactions or occurrence that have occurred since the original action.
c. However, this exemption is not allowed if the transactions occurred before the first action was commenced but the plaintiff did not know about the facts.
i. The plaintiff has a duty to learn about the facts and do its homework, so to speak.
ii. If the plaintiff did not know about those facts at the time of filing the first action, s/he has no right to bring that action at a later day.
B. Exemption under Jurisdictional Limitsa. The subsequent claim is barred if it could have been part of the first action.b. Conversely, if you could not have brought the claim in the first action because of
jurisdictional issues, you may bring that claim in a subsequent action in a different court.
i. Ex: family court, probate court, traffic court, and other courts of limited jurisdiction do not have the power to hear various claims against the same party arising out of the same transaction or occurrence.
c. For example, a tort claim may be brought in a subsequent action after a divorce action has already received a final judgment on the merits in family court because the family court has no jurisdiction to hear the tort claim.
CLAIM PRECLUSION BY NONPARTIES
A. Traditionally, claim preclusion is only available if the previous final judgment on the merits was binding on both parties – the one asserting res judicata and the one who is subject to res judicata.
B. However, the courts have allowed a nonparty to the previous action to raise Res Judicata under special circumstances.
C. A nonparty can be precluded from bringing subsequent action in one of these preexisting categories: If the nonparty can be fit into one of the early included exceptions
1. A nonparty who agreed to be bound by the results of the first action is precluded from bringing subsequent action.
2. There was a preexisting substantive legal relationship between the party of the first action and the nonparty.
a. i.e. assignor and assignee, bailor and bailee.3. Nonparty was adequately represented by a party with the same
interests.4. Nonparty assumed control over the litigation in which judgment was
entered.
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5. Nonparty paid the bills, made decisions, etc.6. A precluded party may not re-litigate through a proxy.7. A special statutory scheme prevents re-litigation.
a. Includes bankruptcy and probate hearings, and other actions brought on behalf of the public.
Taylor v. Sturgell, 646 U.S. 140, (2006).F: Herrick brought suit against the FAA to enjoin them to release the technical documents. The District Court for the District of Wyoming ruled for the FAA. He failed to raise of the issue of whether the sought-after information could be made a trade secret after such status was suspended. Mr. Taylor tried to bring suit against FAA on this issue, but the FAA asserted claim preclusion against him on grounds that Mr. Taylor was virtually represented by Mr. Herrick.R/H: The court outrights rejects virtual representation is a flexible doctrine that involves lots of time-consuming consideration and room to maneuver. Claim preclusion is not an area of the law that should be vague and flexible. There must be crisp and clear definitions for when a party has been given his or her day in court. Claim preclusion only works against a nonparty in one of the six specified exceptions.
ISSUE PRECLUSION
A. Also known as collateral estoppel.
B. A party can raise issue preclusion as either a defensive or offensive strategy.
C. Requirements:a. That issue has been actually litigated.b. There has been a final judgment in that action.
i. As long as there have been adversary proceedings that lead to a judgment, the due process requirement has been satisfied.
c. The decided issue was an essential component of the final judgment.
C. Standards of Proofa. An issue is not precluded from further litigation if it has been decided in a previous
action with a lower standard of proof.i. i.e. If an issue is decided in a civil case based on a preponderance of the
evidence, it is not precluded from further litigation in a criminal case because a criminal case requires proof beyond a reasonable doubt.
b. On the other side of this comparison, an issue decided in a previous action with a higher standard of proof is binding on a subsequent action with a lower standard of proof.
i. Ex: The verdict of a criminal case is binding on a subsequent civil action.
ACTUAL LITIGATION OF AN ISSUE
A. Every person deserves their day in court when exposed to liability. As long as a party is given a full and fair opportunity to litigate an issue on one's behalf, that party has been given a day in court and his or her due process rights are vindicated.
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a. On each issue and or claim, one must be given a chance to litigate the issue.
b. This does not mean every issue deserves an entire evidentiary trial before a jury.
B. Procedural devices such as Summary Judgment, Judgment Notwithstanding the Verdict, and Judgment as a Matter of Law do not violate one's due process or Seventh Amendment Rights.
C. Before there is a finding of issue preclusion, the decided issue must be an essential element of the previous final judgment.
a. An ancillary ruling is like dicta - it is not binding on subsequent actions.
D. A special verdict tends to answer the question of issue preclusion very quickly. If the jury answered specific questions about individual issues, then the final judgment on those issues is made explicitly clear.
Jarosz v. Palmer, 436 Mass. 526, (SJC Mass. 2002).F: brought suit against for breach of contract, breach of fiduciary duty, legal Π Δmalpractice, and violation of G.L. c. 93A. moved to dismiss on grounds of issue Δpreclusion, arguing that the issue of attorney-client relationship had already been decided in an earlier action.R/H: The issue of Palmer’s attorney-client relationship with Jarosz was not essential to the determination of Jarosz’s breach of fiduciary duty claims in the prior action. The choice of attorney was not a logical and necessary component of the general verdict and thus is not ripe for issue preclusion. Such an ancillary holding is not an essential component of the general verdict and as such is not appropriate grounds for issue preclusion.
ESSENTIALITY REQUIREMENT
A. An issue may be technically decided for purposes of collateral estoppel if it is a logical and necessary component of an earlier final judgment, even if that finding was not made explicit.
B. The burden of proof is on the party claiming issue preclusion to prove that the issue in question was decided in an earlier action.
a. To do so, it must look to the record and consider how essential that issue was to the general verdict.
b. Was it a practical or essential component of the verdict?
C. The court can infer what issues constructed the jury's general verdict. a. To do so, it can look at the substance of arguments given in the earlier action and
reconstruct what the jury had decided.
D. A special verdict tends to answer the question of issue preclusion very quickly. a. If the jury answered specific questions about individual issues, then the final
judgment on those issues is made explicitly clear.
Hoult v. Hoult, 157 F.3d 29, (1st Cir. 1998).
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F: In 1988 Jennifer Hoult won an action against her father, David, for assault and battery, IIED, and breach of fiduciary duty, during which the allegations or rape played a central role in her case. The jury returned a general verdict for Jennifer, awarded her damages, and found that Jennifer had repressed memories of abuse which were rediscovered during the statute of limitations period. David brought defamation of character action against Jennifer Hoult for sending letters to professional associations stating that he had raped his own daughter. She raised defense of issue preclusion – court had already decided he raped her.R/H: The rape charges were the centerpiece of the appellee’s case. To find a $500,000 verdict for Jennifer the jury must have decided that the repressed memories of rape were true and accurate. Whether or not the rape occurred has been entered a final judgment on and may not be re-litigated in a defamation action. An issue may be technically decided for purposes of collateral estoppel if it is a logical and necessary component of an earlier final judgment, even if that finding was not made explicit.
NON-MUTUAL ISSUE PRECLUSION
A. Issue Preclusion can be used both offensively and defensively.
B. Issue Preclusion requires only that the party being precluded was a party to the previous action.
a. Different from claim preclusion, which requires both parties were party to the previous action.
C. Defensive Preclusiona. In the interests of consistency and judicial economy, defensive use of collateral
estoppel should be allowed. Plaintiffs should not be allowed to re-litigate aspects of their claim against various defendants on the chance they might win one of these attempts.
b. When a party wins an issue on the merits that judgment should be binding on any party that brings suit against it on that same issue.
c. If final judgment is entered against a plaintiff in a prior action, the new defendant in a new action can assert issue preclusion against that same plaintiff.
D. Offensive Preclusiona. A judge may deny use of offensive issue preclusion if it has the potential to create
one of the problems with issue preclusion: inefficiency, unfairness, and contradictory justice.
b. Offensive preclusion is more difficult because it may lead to inefficient outcomes. It has the potential to create three problems: “wait and see” plaintiffs, divergent incentives, and contradictory verdicts.
c. “Wait and See Plaintiffs”: offensive collateral estoppel allows a plaintiff to “wait and see” how an issue plays out and use the first action as a tool in the arsenal of a subsequent action.
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i. Plaintiffs may hold out and watch how a first action plays out, then later sue the same defendant on the same action if the defendant loses. This creates inefficiency.
ii. Plaintiffs who could have joined the first action may wait and create a multitude of subsequent actions against the defendant, taking up the time and resources of the court and the defendant.
d. Divergent incentives: A defendant may not work very hard at litigating an issue when the consequences are small, but will be precluded from litigating zealously on a major claim involving the same issue.
i. The costs and consequences of an action will determine how zealously a defendant litigates an issue.
ii. The opportunity to litigate in small claims court is not as substantial as the opportunity in a large class action.
iii. Offensive collateral estoppel can expose a defendant to more liability than if the issue was re-litigated for each action.
e. Contradictory Verdicts: If a defendant is facing a series of lawsuits against different plaintiffs and wins a number of them but loses a later trial, the plaintiffs may use that issue against the defendant in subsequent actions.
i. Defendant wins the first three trials on an issue of negligence.ii. Defendant loses fourth trial on issue of negligence
iii. During trials five through ten plaintiffs can use issue preclusion that preclude the defendant from arguing the issue of negligence.
1. Trials four through ten have a different holding than trials one through three. This is contradictory judgment of the issues.
iv. The earlier and later actions will have contradictory verdicts because the plaintiffs have used offensive issue preclusion.
Parklane v. Shore, 439 U.S. 322, (1979).F: Defendant lost an earlier lawsuit against the SEC, during which the judge ruled that the defendant’s earnings statement was false and misleading. Plaintiff brought a class action shareholders derivative suit against the defendant. Plaintiff moved for partial summary judgment on grounds that an earlier action had already ruled that the defendants issued a false and misleading earnings statement.R/H: Each application of offensive issue preclusion should be decided by an individual judge on an ad hoc basis. In cases where the plaintiff could have joined the earlier action or where use of collateral estoppel would be unfair to the defendant, a trial judge should not allow offensive collateral estoppel. It is in the interests of consistency and efficiency to allow the previous finding to preclude relitigation on the false and misleading nature of the aforementioned proxy statement.
INTER-JURISDICTIONAL PRECLUSION
State --> State. The full faith and credit clause of the Constitution mandates that a court in state B accord a judgment rendered in State A the same preclusive effect as it would have in State A.
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State --> Federal. 28 U.S.C. § 1738 imposes a "Full Faith and Credit Statute" which obligates federal courts to honor the judgments of all of the state courts.
Federal --> State. A judgment entered in a federal question case is binding on the state court.
A judgment entered in a diversity action is applied as long as the state preclusion rules are applied. This is to prevent unfair forum shopping and inequitable administration of justice.
