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Fall 2010 Civil Procedure Outline (Greiner)

**Subject Matter Jurisdiction**Any matter of SMJ can be raised at any time.

“ARISING UNDER” JURISDICTIONFor a federal court to have the power and jurisdiction over a case it must:

1) Have a grant of power under the US Constitution (Article III)2) Have a statute to realize given power over subject matter jurisdiction (§ 1331)

§ 1331 is much narrower than Constitutional power (Article III)

For SCOTUS to hear case through the federal court system1) District Court must have had proper SMJ2) Proper appellate jurisdiction in Appellate Court

SCOTUS can hear any case on federal issues that make it up through state courts; but only through federal courts by way of 2 requirements mentioned above

Any party can present a question of SMJ at any time (Mottley).

Concurrent JurisdictionState courts can hear any type of SMJ as long as the Federal courts do not have “exclusive” jurisdiction (rare). State courts have concurrent jurisdiction over federal cause of action suits.

Well-Pleaded Complaint Rule: For SMJ, you must look at the plaintiff’s cause of action to determine whether it falls

under a particular courts jurisdiction Plaintiff’s cause of action determines SMJ…if cause of action is federal then federal

courts have “arising under” jurisdiction Cannot define SMJ based on the proposed or actual defense of the defendant, but

rather must completely rely on the plaintiff’s cause of action to determine SMJ

Exceptions to Well-Pleaded Complaint Rule1) Congress provides federal cause of action, but rule of law to decide dispute is

state law (ShoShone) (very rare)2) Cause of action is state law, but is held to be “arising under” the constitution

(Smith)a. State law claim raises a significant federal issue (requires

interpretation/application of Constitution or federal law), ANDb. Clarifications (Grable and Empire Healthcare)

i. Must not upset fed/state court balanceii. Issue of law, not fact

iii. Uniformityiv. Fair number of cases-but not too many

c. *Note: not an all inclusive list

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Policy Reasons for Smith/Grable Exception Experience of federal courts dealing with these issues Uniformity in federal system Interests of federal government may override Too important to trust states

Declaratory Judgment: Typically a preemptive move by a defendant to have the court declare its rights

which is usually to say plaintiff does not have claim against defendant Declaratory judgment does not expand subject matter jurisdiction. It does not, on its

own, make a case eligible to be heard by district court To bring declaratory judgment in a certain jurisdiction, the real plaintiff (party

bringing declaratory judgment action; imaginary defendant) must prove the real defendant (imaginary plaintiff) has “minimum contacts” with that jurisdiction

Imaginary Lawsuit Rule or Coercive Action: Used to seize the power to determine the forum of the case The party bringing the declarative judgment must hypothesize what the plaintiff

would sue upon to determine SMJ **Court will ponder, if there had not been a declaratory judgment, would the

underlying case fall under federal SMJ **A declarative judgment on its own does not put a suit under federal SMJ

DIVERSITY JURISDICTION Constitution (any diversity) is broader than § 1332 (only complete diversity) Under § 1332, must have COMPLETE diversity (Strawbridge)

o Every plaintiff must be completely diverse from every defendant Determined at time of filing Can be raised @ any time

§ 1332 Requirements:1) Complete Diversity of Parties2) Amount in Controversy

What is citizenship? (In federal terms) Taking up residence in a domicile, AND Intention to remain there

o i.e. no definite leaving dateo Look to permanency (i.e. drivers license, voting registration, purchase of a

home, etc.)

Corporations: Corporation is a citizen of

o 1) The state(s) in which it is incorporatedo 2) The state in which it has its principle place of business

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SCOTUS has ruled this is the “nerve center” (where corporate decision-making occurs)(Hertz).

Unincorporated Association: Is a citizen of every state in which a member is a citizen

Aliens: Permanent Alien is a citizen of the state in which he is domiciled Alien can join citizens suing other diverse parties Alien cannot sue another alien

Alienage jurisdiction: controversies between state citizens and citizens of foreign states Created to deal with the tendency of the state courts to disrupt international

relations and discourage foreign investment

Burden of proof for diversity of citizenship rests on the party invoking federal jurisdiction and when diversity is challenged it is again upon the original party invoking to prove diversity

Amount in Controversy (§1332) Currently the amount in controversy to be under federal SMJ is $75,000

o Diversity ONLY, not “arising under” Aggregating claims

o Generally, a plaintiff can aggregate all of his claims against ONE defendant to meet the amount in controversy

Even if those claims do not share anything in common other than being against the same party

o Multiple plaintiffs who join together in one lawsuit can not aggregate their claims to meet the AIC requirement if their claims are separate and distinct

Multiple plaintiffs can aggregate if they seek to enforce a single title or right in which they have a common and undivided interest

o Exception to AIC: see Class Actions

For a AIC to be jurisdictionally dismissed it must appear to a legal certainty that the claim is really for less than the $75,000

**See FS Outlines for Diversity policy pros/cons

SUPPLEMENTAL JURISDICTIONCan a court hear ancillary cases (state cause of actions) related to the case which has original jurisdiction under district courts?

Supplemental Jurisdiction Analysis § 1367: 1) Find anchoring claim

o claim w/ grant of federal SMJ (arising under/diversity)

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2) Go to limits of Article III o Supplemental claim is part of same “case or controversy”, “common nucleus

of operative fact” 3) Check to see if claim is ousted by Subsection B

o If “arising under” ignore B, check Co If diversity, check B carefully, then check C

4) Check Subsection C and use discretion

Subsection B: If district court has original jurisdiction founded solely on diversity jurisdiction,

the district court shall not have supplemental jurisdiction over claims by plaintiffs against persons made parties (under 14, 19, 20, or 24) if those parties defeat complete jurisdiction.

o Example: When defendant exerts counter-claim against original plaintiff, the original plaintiff cannot implied a third party who will destroy complete diversity (however, defendant CAN add party)(Guaranteed Systems)

Subsection C: District Court may decline to exercise supplemental jurisdiction IF…

o Claim raises a novel or complex issue of state lawo Supplemental (state law) claim substantially predominates over the

anchoring claimo District Court has dismissed all anchoring claimso In exceptional circumstances, there are other compelling reasons for

declining jurisdiction

Supplemental Jurisdiction Historical Path, prior to § 1367 in 1990 Gibbs, 1966

o Can add a state claim to the same defendant, and if federal cause of action is dismissed after case, court can still decide state cause of action

o “Common nucleus of fact” test o Supplemental jurisdiction is at discretion of the courts (Power + Discretion)

Owen v Kroger, 1978o Regardless of when parties are added, there still must be complete diversity

of all complaintso Supplemental jurisdiction does not supersede diversity statuteo Worried about gamesmanship

Aldinger, 1976o Cannot add parties to supplemental jurisdiction, simply claims against the

same party-supplemental jurisdiction exists unless Congress disallows it (case by case determination if additional parties can be heard under supp. Jurisd)

Finley, 1989o Cannot add parties to supplemental jurisdiction, simply claims against the

same party-supplemental jurisdiction does not exist unless Congress

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explicitly gives it (hard and fast rule that additional parties can not be added under supplemental jurisdiction)

o Supplemental-PARTY justification is not allowed, simply supplemental issues

Gibbs survives in part in Section C of § 1367, while Owen v. Kroger survives in part in Section B of § 1367. Finley was overruled by § 1367

REMOVAL Should be called remand jurisdiction because the petition for removal is automatically sent to district court where it is determined whether the case stays or is to remanded back to state court (§ 1441)

Case cannot be remanded unless it starts in state courto If originally filed in district court it must be dismissed

General Rule:o State case can be removed to federal court IF it could have been originally

filed there “arising under”, diversity w/ AIC, Smith/Grable exceptions, etc.

o In “arising under” cases, district court must take the case and cannot remand it back to state

Exceptions to General Rule:o In diversity cases, if any defendant is from a state in which suit is removed

from, then it can be remanded back to state court No home field advantage argument In essence, removal is denied Does not apply to “arising under” cases

Additional Rules:o The defendant has 30 days to remove, and if he does not do so in the 30 days,

if it is later removed, the plaintiff can remand on those grounds alone Objective is to get the cases in the proper jurisdiction and moving

forwardo Plaintiff has 30 days to remand after the defendant removeso All defendants must agree to removal o Case can become removable at any time while the case is in litigation

Adding “arising under” claim during suit Non-diverse parties are dismissed from claim during suit

More Rules:o Generally can’t appeal District Court’s decision to remand

Can’t appeal on grounds of lack of SMJ Can’t appeal on procedural defect Can appeal based on abstention utilized by courts

o Colorado River type cases can be appealed Three types of abstentions:

1) Cases presenting a federal constitutional issue which might be presented in a different posture by a state court determination of pertinent state law

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2) Cases where there have been presented difficult questions of state law bearing on public policy problems of substantial public import whose importance transcends the results of the case then at bar

3) Cases, where absent bad faith, harassment, or patently invalid state statute, federal jurisdiction has been invoked for the purpose of restraining state criminal proceedings

**See FS 2009 Outline for Colorado River & Clark v Lacy analysis

Plaintiff cannot remove a state court action to federal court because a defendant interposes a counterclaim that would have federal SMJ. (Plaintiff already had his shot to put into federal court, do not get a second chance).

All supplemental jurisdiction rules apply to removal.

Don’t worry about proper venue when case is removed Once case is officially removed, venue transfer and forum non conveniens rules

apply

Reasons for SMJ rules: Judicial efficiency Federalism Federal Forum Protection of Prejudices

**Horizontal Choice of Law**State-to-State substantive law choice (which state’s law applies)

Procedural Rules in Horizontal Choice of Law:Under both restatements, the forum will apply ITS own local procedural laws (includes SOL)

2 Approaches to Horizontal Choice of Law:1) 1st Restatements2) 2nd Restatements

1st Restatements Lex loci delecti Vested rights theory Where the last event leading to injury happens

o “First Blood”

Vested Rights Theory

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Rights to sue only vest when actual harm occurs, thus right vests where harm occurs and that law governs

Advantages of lex loci delicti (where the incident happens is the law used) Clear cut standard; predictable Puts trust in judicial system by making it less arbitrary

Criticism of lex loci delicti Circular reasoning Guest statute Contributory negligence Somewhat arbitrary rulings (unsatisfying)

2nd Restatements Most significant issue Interest analysis

Under 2nd restatement, the state that has the most significant interest or “most significant relationship with the occurrence and with the parties involved” should have its law applied. (Babcock)

Benefits of 2nd Restatement “Best practical result” Forum which “cares” most about the outcome gets to control legal issues raised by

having its laws applied

Criticism of 2nd Restatement A lot of analysis that ends up looking a lot like 1st Restatement Difficult to administer; must determine state’s interests

Neumeier restarted cycle by advancing both lex loci delecti and “most significant issue” standards.

The law to be applied is that of the jurisdiction where the incident happens UNLESS it appears that displacing the normal applicable rule will advance the relevant substantive law purposes of the jurisdictions involved.

Neumeier recreated lex loci delecti with a little more wiggled room (place of location has default law unless it can be shown that using another state’s law better suits the situation)

Under new rule there can be different state’s laws applied to each substantial or substantive issue. Each issue is determined by whose law is best suited.

**See FS 2009 Outline for “guest statute” rules under Neumeier

**Personal Jurisdiction**

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3 Types of Lawsuits in personal jurisdiction: 1) In rem: lawsuits against a piece of property to determine who owns its “against

the world” 2) Quasi in rem: lawsuit against person in which the court “arrests” property to use

to settle judgment (this occurs before proof of claim is even shown) 3) In personam jurisdiction: typical lawsuit…P sued D; if P wins and D refuses to

pay, then P must go and find property and sell it.

Only concerned with defendant.Personal Jurisdiction can be consented to.

IN PERSONAM JURISDICTIONTypical In Personam lawsuit:

Lawsuit #1 (merits) P sues D Lawsuit #2 (“collection) P sues D to enforce lawsuit #1

Court of lawsuit #2 must follow ruling of 1st lawsuit (full faith and credit) IF it is issued by a competent jurisdiction (must have SMJ and personal jurisdiction over defendant)

Defendant’s Reaction to Lack of IPJ:If defendant thinks that original court (lawsuit#1) does not have personal jurisdiction over him he has 2 options:

1) Not show up and have a default judgment ruled against him, then when second lawsuit is filed to “collect”, defendant can appeal the first court’s jurisdiction over him

a. BUT if he loses his objection to jurisdiction of 1st court then he cannot argue the merits of lawsuit #1 (because the merits have already been determined in lawsuit #1 by him choosing to not show up)

2) Make a special appearance to lawsuit #1 to litigate court’s jurisdiction a. If he wins on jurisdictional objection, then case is dismissed, b. If he loses on jurisdictional objection, he can then argue on the merits of the

lawsuit

Historical Path of In Personam Jurisdiction:Pennoyer

Intense territorial considerations (“territorial power”, state sovereignty)o Must serve process in state (“tag”)o Why “tag” doctrine?

Metaphysical reasons Functional: notice, fairness (ability to return) Structural: state projection of power outside borders, state

sovereignty

Post-Pennoyer

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Corporations, Contracts, and Cars helped shape new ideas of personal jurisdiction because the economy began to expand and the old “territorial” theory began to become burdensome

“Minimum Contacts” o Related/unrelated contactso International Shoe

To subject defendant to IPJ, he does not have to be present within territory of forum, he simply must have certain minimum contacts with a state such that it does not offend “traditional notions of fair play and substantial justice”

Abandonment of Traditional Viewo International Shoe

General PJ Specific PJ (“minimum contacts”)

Defendant’s contacts with forum state “Purposeful availment” (if you get benefits of state, then you

are likely to be liable to be sued in that state) State’s interests Plaintiff’s interests Interjudicial efficiency

General Jurisdiction An amount of business considered so much in a certain state that it can be sued for

“anything” in that state and that state has proper personal jurisdiction Always general jurisdiction in state where you are a resident

Specific Jurisdiction A limited amount of business that is not continuous/systematic and thus can only be

sued and have personal jurisdiction enforced against it which is related to the activities that company does in that state

Lawsuit must arise from “these” activities

Long-Arm Statutes In PJ you need a statute (“long-arm” statute) that declares/interpreted as any

exercise of jurisdiction allowed under the constitution States should want a long arm statute that is detailed to define which interests it

wants to protect to have a better chance at having the court be able to put the case under personal jurisdiction; if state has a broad long arm statute then courts tend not to interpret it as specifically protecting a certain right and thus the “interest” of the state is diminished

McGee (insurance in CA contract) Minimum contacts can arise from a single contract

Hanson v Derckla (old lady w/ trust)

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Unilateral action by the plaintiff with the defendant is not enough to have IPJ over defendant

Solicitation must be considered to “purposefully avail” yourself to state’s laws Long-arm statute consideration: in McGee California had a long-arm statute which

stated their interest in protecting their citizens from the insurance ordeal, but in Hanson, Florida did not have a long-arm statute specifically protecting the interest at hand in this issue

World-Wide VW (car crash in Ok.) “Purposeful availment” includes standard of foreseeability

o Defendant must reasonably anticipate being haled into court in forum state Foreseeability of harm within the forum state must be accompanied by conduct

directed at the forum state so defendant can reasonably anticipate being haled into court in the forum state

Kulko v Superior Court “Effects” test: A does action that will cause an effect in state B, to be held under

personal jurisdiction, the action must be wrongful or involve a commercial activity, a simple “effect” of any kind is not enough

Burger King Choice of law and forum selection provisions are not necessarily determining

factors, but should be considered in choice of jurisdiction

IPJ Test… 1) Determine if there are “minimum contacts” with state 2) Traditional Notions of Fair Play: These “contacts” are to be considered in light of

the five interests stated in World-Wideo 1) Burden of Defendanto 2) Forum state’s interest in ruling on disputeo 3) Plaintiff’s interest in convenient/effective reliefo 4) Interstate judicial system’s interest in efficient resolutiono 5) Shared interest of the states involved in furthering substantive social

policies

Stream of Commerce: In Asahi a plurality ruled that inserting a product into the stream of commerce was

not enough to be held under IPJ, instead the corporation must “purposely direct toward the forum state”

“Effects” Test (Calder) Defendant committed an intentional tort Plaintiff felt the brunt of the harm caused by the tort in the forum such that the

forum state was the “focal point” of the plaintiff’s injury Defendant expressly aimed the tort at the forum

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Federal Jurisdiction: Under Rule 4(k)(1)(a)

o Federal jurisdiction is based upon the long arm jurisdiction established by the state in which the district court is located (ex. Texas federal District Court has personal jurisdiction to the extent of Texas’ long arm statute, “piggy backing”)

Under Rule 4(k)(1)(c)o Federal jurisdiction is based upon…if a federal statute give power, then go to

the farthest limits of constitutional jurisdiction Under Rule 4(k)(2)

o Must be an “arising under” caseo Minimum contacts to satisfy constitution (“national contacts analysis”)o No specific state can have jurisdiction over defendanto **Fills the gap when a defendant does not have enough minimum contact

with any one state, and thus the district courts cant use a long arm statute to get jurisdiction, so the contacts with the US as a whole are considered

When a statute authorizes nationwide service of process, national contacts analysis is appropriate.

When nationwide service of process is given in a statute, then IPJ is given to ANY district court in the US.

QUASI-IN-REM JURISDICTIONHarris v Balk

Used property to require a defendant to show up for court

Shaffer Quasi-in-rem jurisdiction is truly an in personam suit, therefore MUST FOLLOW

International Shoe “minimum contacts” approach o Complete minimum contacts analysis for person who owns propery

Holds that “all assertions” of state court jurisdiction must be evaluated according to International Shoe “minimum contacts”

Do all assertions of jurisdiction have to go through International Shoe analysis? Burnam (tag jurisdiction)

o Scalia Tradition alone prevents International Shoe analysis Tag is enough Shaffer only applies to “absent” defendants

o Brennam Must use International Shoe test (“minimum contacts”) All and every assertion must comport with contemporary notions of

due process

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Grace v MacArthuro Tagged in airplane above Arkansa

**Now IPJ and Quasi-in-rem are the same type of personal jurisdiction in terms of contacts required.

**Venue**What is it?

2nd “Where” doctrine [personal jurisdiction =1] “Lay” venue Doctrine which compels where a plaintiff can file suit, defendant can object Entirely statutory (highly state specific) Typically more restrictive than personal jurisdiction

Venue: Basics of § 1391 = designed for convenience of parties

Black Letter venue rules in 28 USC § 1391: For diversity suits, a suit may be brought – 1391(a):

o Judicial district where any defendant resides, if all defendants reside in the same state

o Judicial district in which a substantial part of the events or omissions giving rise to the claim occurred or substantial part of the property that is subject of the action is situated

o Judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought

For a suit NOT solely on diversity – 1391(b):o First 2 same as for diversity suits above, ANDo Judicial district in which any defendant may be found, if there is no district in

which the action may otherwise be brought Defendant is as CORPORATION – 1391(c):

o Corporation deemed to reside in any judicial district in which it is subject to personal jurisdiction

o In a state with more than one judicial district, corporation shall be deemed to reside in any district in that state in which its contacts would be sufficient to subject it to personal jurisdiction if that district were a separate state.

Alien:o Can be sued in any district

TRANSFERSTransfer statues: § 1404(a); § 1406(a); § 1631

§ 1404: plaintiff laid proper venue (happy place)§ 1406: plaintiff either (unhappy place)

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1) Laid improper venue OR, 2) Has no personal jurisdiction over defendant**§1406 has choice of law implications

Where can a case be transferred?Huffman

**You can only transfer to place plaintiff could have brought it Defendant can’t send the transfer to any forum it wants to avail itself to. Grant transfer to defendant when balance to transfer is strongly in favor of

defendant

When a case is filed in a “happy place”… §1404 Transfer is merely a transfer of “courtrooms” and it as though the case were tried in

the transferor state…o Transferor’s procedural rules applyo Transferor’s choice of law rules apply (substantive law)

What substantive law applies to transfer?Van Dusen

**In diversity cases, the “laws” of the transferor forum follows the transfer (when originally filed in a “happy” place)

“Laws” includes HCL and SOLFerens

In diversity suits, the transferee forum is required to apply the “laws” of the transferor regardless of who initiations the transfer

When a case is filed in an “unhappy place”… §1406

Goldlawr 1406 authorizes the transfer of an action even if the transferor court lacks personal

jurisdiction **However, “laws” do not follow to transferee forum

Courts say they have the power to transfer if case lacks: Venue alone Personal jurisdiction alone Both

General Transfer Review: If filled in HAPPY court…follow transferor “laws” If filled in UNHAPPY court…follow transferee “laws”

FORUM NON CONVENIENS

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Forum non conveniens: move between different systems (state to state; state to federal); if completely inconvenient, then must dismiss whole case and force plaintiff to file in a more convenient location

Matter of common law; could bring up Erie question Only granted when balance in strongly in favor of defendant

Factors to be considered for forum non conveniens (Gulf Oil): Relative ease of access to sources of proof Availability of compulsory process for attendance of unwilling witnesses Cost of obtaining attendance of willing witnesses Possibility of view of premises (if appropriate) All other practical problems that make trial of a case easy, expeditious and

inexpensive. **Note: change in substantive law is a consideration (Piper)

Overview of Case Doctrine: Subject Matter Jurisdiction = vertical Horizontal Choice of Law = which state’s law Personal Jurisdiction = where Venue = where

**Vertical Choice of Law**Whether to apply state law or federal law

Old Rule: Swift “laws” is interpreted as ONLY statutory laws of state; general federal common law

applies

Criticisms of Swift Theoretical…”the law” (judges “find” law) General law was interpreted very broad, state common law had very little room to

adjudicate diversity suits

ERIE & PROGENYErie

When sitting in diversity , federal courts should:o State law applies to substantive issueso Federal law/rules apply to procedural rules

No general federal common law

Possible Rationale’s for Erie Statutory: new interpretation of §1652:

o “Laws” now mean both statutory and common law of stateso Congress wants state law to apply

Constitutional:

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o Federalism Congress does not give federal courts the power to establish a general

federal common law Limited federal government interaction/overhang

o Separation of Powers: Courts should not be making federal common law, but Congress has

power to confer that abilityo Equal Protection Clause:

Different laws shouldn’t apply based on being a resident v nonresident

Unfair to residents sued in their home state. Prudence (tied to equal protection)

o Federal courts shouldn’t be making common law State courts can but why shouldn’t federal courts?

What is the “true” nature of law?o Found or Made?

When/How to Determine whether Federal or State Law should apply: History:

o Rules of Decision Act: § 1652 provides that federal courts must apply the "law of the several states," except when federal provisions apply.

So, in the absence of a federal provision, state provision will take precedent.

HOWEVER, if there is a federal provision, it should take precedent over a state provision. (Fed > State)

Federal Common Law: for a long time, RDA considered only to apply to statutes and not interpretation of common law. When there was neither state nor federal provision governing, federal courts were free to "find" general federal common law. (Swift)

Forum-Shopping: this rule led to forum-shopping, whereby a company might reincorporate in a state that had no applicable law, so that it could take advantage of federal common law (Taxicab case).

Rationale: philosophical underpinning that court does not make law but searches and finds a transcendental body of law.

Erie Doctrine: Overrules Swift, generally finding that, in diversity cases, federal courts should apply

state substantive law in such areas as contracts, torts, property, etc. o Practical Considerations:

Swift creates a multiplicity of rules on recurrent issues and lack of uniformity. Further, led to manipulation and forum-shopping that created discrimination.

o Source of Law:

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There is no general federal common law, rather law derives from state authority, so Rules of Decision Act should extend to state common law as well as state statutes.

o Unconstitutional: Notion of federal common law is unconstitutional, since it gives

federal courts the ability to make law in areas that were never granted by constitution. States are the authority behind the law and ignoring state common law invades division of power.

Federal courts may apply federal procedural law, but must apply state substantive law of state in which it sits (including state's choice of law rules [HOC]).

HOWEVER, if there is no relevant federal procedural law, must apply state's procedural law.

Different ways to determine if a law is procedural or substantive:1) York

a. Outcome Determinative Test2) Hanna

a. Modified Outcome Determinative Testi. Twin Aims of Erie

b. FRCPc. Statute/Constitution

3) Harlan Concurrence in Hannaa. Primary Conduct analysis

4) Shady Grove***

York - Outcome-Determinative Test : Federal courts must apply state procedural law if it will substantively affect the

outcome of a caseo Policy: to prevent parties from gaining unfair advantage by litigating in

federal court. o Critique: York represents one extreme interpretation of Erie

Constitutional Authority: Congress has constitutional authority to make federal

procedural rules, so York's test was motivated by policy not constitutional limitations.

Dead on Arrival: Almost all procedures affect the substance of a case. So, there

would be little use for FRCP despite congress' constitutional power.

Hanna - Modified Outcome Determinative: Modified Outcome-Determinativeness Test: conflict concerning a federal

provision that is not FRCP or statute, must be read in light of Erie's twin aims: o 1) Discouragement of forum-shopping

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o 2) Avoidance of inequitable administration of laws (not applying state law would lead to disparate litigation outcomes)

Examples:o Federal judicial practice, court decisions, [ex. Bell-Atlantic and Iqbal] o No direct conflict with FRCP or federal statute

Hanna - Valid FRCP: If there is a valid and applicable federal rule, it should apply

o Valid: 1) Comports with Rules Enabling Act, so that it does not "abridge,

enlarge or modify substantive rights." 2) Congress had constitutional power to pass such a law and did so

validly. Reasoning:

Congress has constitutional authority under Necessary and Proper Clause and Art. III to promulgate arguably procedural rules

o Applicable: Federal Rule must directly conflict with the state rule/policy

Direct Collision : the two rules may not be able to be simultaneously satisfied.

Broadness Test : if Federal Rule is sufficiently broad to control the issue before the court, then it should apply as long as it is valid (Walker).

o **If cannot reconcile (conflict), then federal rule applies (Hanna).

o **If can reconcile (no conflict) then twin aims of Erie analysis (Walker).

Hanna - Federal Statutory Provision : If the conflict is between a federal statute and state policy or statute, then it should

apply provided it is "sufficiently broad" and was a valid exercise of congressional authority (Stewart) (Conduct a direct conflict analysis).

Harlan Concurrence in Hanna : Whether choice of rule would substantially affect primary decisions respecting

human conduct If difference in rules affects primary conduct…apply state law/rule

SUMMARY OF VERTICAL CHOICE OF LAW RULESWhich law applies depends on type of conflicts.

Conflict with FRCP: Is the FRCP a valid Rule?

o Rules Enabling Act (REA):

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Does not “abridge, enlarge or modify” a substantive righto Did Constitution give Congress power to pass this rule?

Is there a Direct conflict between the Federal rule and State rule/policy?o Can both rules be simultaneously satisfied?

Read FRCP narrowly to avoid conflict.o Is Federal rule broad enough to control the issue?

Read FRCP liberally as it was written. If YES to both Valid & Directly Conflicts:

o FRCP Applies If NO to either Valid or Direct Conflict:

o Apply Twin Aims of Erie Discouragement of Forum Shopping Avoidance of inequitable administration of laws

Conflict with Federal Statute: If conflict is with a statute that is Arguably Procedural and Valid, then follow statute.

(Stewart) Arguably Procedural:

o Usually an easy test to meet Valid:

o Congress had authority to enact it

Conflict with Federal Constitutional Provision and State Law: If the Constitution mandates a practice different from state law, constitutional

requirement always prevails.

Conflict with non-FRCP Federal Practice: If a federal judicial practice conflicts (i.e. not a statute or FRCP) with state policy,

then whether state rule/policy is procedural or substantive (Erie) according to modified outcome-determinativeness test.

o Substantive: if state policy or rule is substantive, then follow state policy. o Procedural: if state policy or rule is procedural, apply Modified Outcome

Determinative Test: Discourage forum-shopping Avoid inequitable administration of laws (i.e. different litigation

opportunity) Common situations in this category:

o Statute of limitations (state)o Conflict of laws provision (state)o Allocation of burden of proof (state), o Allocating issues between judge and jury (not state, since not heavily

outcome determinative)

**Erie principle applies to supplemental jurisdiction as well

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Statute of Limitations is substantive for vertical choice of law purposes (York).Statute of Limitations is procedural for horizontal choice of law purposes.

Shady Grove: Steven’s Concurrence:

o A state procedural rule, though undeniably procedural in terminology, may exist to influence substantive outcomes and may in some instances become so bound up with the state-created right or remedy that it defines the scope of that substantive right or remedy

Consult purposes of statutes and see if you can get them to live together Court should be careful to construe the FRCP narrowly to try and not conflict with

state laws

**LITIGATION PROCESS**Complaint Discovery Summary Judgment Pre-Trial Order Trial Post Trial

**The Complaint**

When to get rid of case: Complaint filed (Motion to Dismiss) Summary Judgment (post-discovery) Trial Post-trial (judge)

PLEADING/MOTION TO DISMISSWhat level of specificity must the plaintiff show to create a valid complaint that survives a motion to dismiss.

FRCP 8(a)(2): “Short and plain statement of the claim showing that he pleader is entitled to relief” May no longer be valid following Bell Atlantic and Iqbal

FRCP 12(b)(6) “Failure to state a claim upon which relief can be granted”

Code Pleading: Give defendant a specific level of facts that if plaintiff proves will lead a trier of facts

to make inferences that indeed plaintiff has a claim Legal conclusions are not counted as true; only factual allegations Most likely adopted in Bell Atlantic and Iqbal

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Notice Pleading: Enough notice to tell defendant what basic claims are, so defendant can look up info 1938: Federal Rules adopted notice pleading

History of Pleading Rules:American Nurses

Take facts in complaint as true Make inferences from these facts (liberally) =Can plaintiff prove claim?

Swierkiewicz A pleading merely requires a “short and plain statement of the claims showing that

the pleader is entitled to relief” Do you have to put prima facia case in complain? –NO! (you can state the ultimate

fact and be OK) Complaint is not be judged on the merits, regardless of how remote proof appears

Bell Atlantic (Now Blackletter Law) Test:

o A court must accept as true all allegations contained in a complaint (factual allegations, not legal conclusions)

Legal Conclusions are… Recitations of elements of the cause of action Conclusory statements Statements of “ultimate fact” (i.e. defendant was negligent)

o Determine whether the accepted allegations plausibly give rise to an entitlement to relief

Controls on the discovery process do not affect what level of specificity/plausibility is required in complaint

Determining whether a complaint states a plausible claim for relief will be a context specific-task that requires the reviewing court to draw on its judicial experience and common sense.

Seems to have changed the US complaint system from notice pleading to code pleading

Summary of Bell Atlantic: to survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.

Ways to Limit Bell Atlantic1) Narrow reading of the complaint to be insufficient for this particular case (parallel

conduct = agreement)2) Only high cost of discovery cases (however, see Slip/Fall case)3) Only Sherman § 1 cases (however, Iqbal states ALL civil actions)

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Policy Issues: Pre-Bell Atlantic: notice to defendant Post-Bell Atlantic: weed out unmeritorious claims

New Motion to Dismiss Standard 1) Separate conclusory assertions and formulaic recitations of the cause of action

from factual assertions 2) Crediting only factual assertions, are the pled facts sufficient to nudge the claim

across the line from “merely possible” to “plausible”.o Not a probability requiremento But an equally possible or more possible explanation cannot exist

Policy Reasons: Code Pleading:

o Don’t want fishingo Don’t want to waste everyone’s timeo Efficiency (get rid of unmeritorious claims early)o Think the world is OK, so need to prove something is wrong before case gets

through Notice Pleading:

o We don’t have the facts to make a clause plausible until we do discoveryo Think the world is not OK; let people in the door without requiring a large

amount of facts, just enough to start discovery

DEFENDANT’S ANSWERS The Answer – Rule 8(b)

o In general – In responding to a pleading, a party must: State in short and plain terms its defenses to each claim asserted

against it; and Admit or deny the allegations asserted against it by an opposing party

o Denials General and specific denials If a responsive pleading is required, anything not expressly denied is

admitted. Affirmative Defenses – Rule 8(c)

o In responding to a pleading, a party must affirmatively state any affirmative defense or it will be lost.

Rule 12 Motions and Defenseso If the defendant’s initial response to the complaint (whether answer or 12(b)

(6) motion) does not dispute proper jurisdiction/venue/form of process/method of service, those claims are lost

Objections to personal jurisdiction, venue, form of process, method of service are waived unless raised before answering or in the initial answer to the complaint

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o 12(c) motion for judgment on the pleadings is filed after or at the same time as an answer, and involves essentially the same analysis (used in Jones v. Clinton)

**Preliminary Injunctions**

4 Things to Consider to Determine whether to Grant Preliminary Injunction1) Likelihood of success on the merits

a. Includes jurisdictional issues (personal/SMJ)2) Irreparable harm

a. No adequate remedy at law, not something that can be paid for later b. Possibly lost profits if difficult to calculate later

3) Balance of the equitiesa. Focus on which party will be worse off between now and trial if you DO or

DO NOT give injunction4) Public interests

Some jurisdictions have these as 4 factors, others require they all be met for a Preliminary Injunction

Preliminary Injunction is immediately appealable.

**Procedural Due Process**

Due Process:1) Notice2) Opportunity to be heard

NOTICEMust be “reasonable”

Means employed must be such as one desirous of actually informing the other partyo Go through means as if you actually wanted them to find out

Must be “reasonably calculated” to succeed; not necessarily most likely to succeed (Mullane)

Actual notice is NOT required in all cases Heavily fact specific

o (i.e. cannot post notice on tenants door)

Jones v Flowers Government must take additional reasonable steps to ensure notice is given when

certified mail is returned unclaimed Follow-up might be required

OPPORTUNITY TO BE HEARD

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How to decide whether defendant should have an opportunity to be heard before something happens to them (property taken, parental rights extinguished, etc.)

Must give defendant notice in a reasonable amount of time before hearing commences. Time to obtain counsel and prepare defense (Holly)

Consider whether case involves property rights or liberty rights.

Factors to Consider: Old Property

o Does initiator of suit have a preexisting interest in property?o Is there a bond requirement?o Is there a counter-bond requirement?o Type of Evidence/Proof?o Clerk v Judge?o Whose burden to initiate legal proceeding?

New Propertyo Is this an issue of subsidence (necessity)?

What is the purpose of the program?o Type of Evidence/Proof?o Clerk v Judge?o Whose burden to initiate legal proceeding?

Matthew’s 3 Factors: Used to determine whether a hearing is necessary before something is taken from

defendant Applies to both Old and New property:

1) Private interests affected by official action2) Risk of erroneous deprivation of such interest through procedures used

compared to additional proposed procedures3) Government’s (public) interest,

a. Includes financial and administrative burdens additional burdens would entail

Goldberg Welfare recipients must be allowed a pre-termination hearing

LAWYERSWhy do we need lawyers?

Producing Outcomes Preserve Dignity Trust in system

Lassiter Assumption to right of counsel is only if person’s liberty is at stake.

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Vitek v Jones State created liberty interest protected by Due Process State prisoner must be given hearing before transferred to mental institution

**Discovery**Broad rules of Discovery are under Rule 26

Why do we have Discovery? Minimize surprise Find out what is actually in dispute Minimize court involvement Protect values

Discovery Considerations: Party Interest:

o Privacyo First Amendment Rights

3rd Party Interests:o Privacy

Information Exchange:o Preparation:

More information; better decision-makingo Facilitate Settlementso Eliminate Issues, Narrow matters in dispute

Minimize Judicial Costs/Involvement

Discovery Timeline: Magistrate judge will oversee discovery

o No deference given to Magistrate judge’s opinions. Parties consult to create plan for lawsuit

o No judicial officer present at this meeting Parties produce report to judge Judge issues scheduling order

o Date discovery closeso Date summary judgment motions are dueo Trial date

Discovery Commences

TOOLS OF DISCOVERY Interrogatories

o Used to understand what the opposing party is claiming, or to get them to list facts on a particular issue

Request for Production (documents, evidence, etc).

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Depositions Request for Admissions

o Try to get opposing side to admit as many facts as possible so you don’t have to prove them at trial

Scope of Discovery Rule 26(b)(1): Parties may obtain discovery regarding any non-privileged matter

that is relevant to any party’s claim or defense.o “Relevant information need not be admissible at trial if the discovery appears

reasonably calculated to lead to the discovery of admissible evidence.” Very open standard. Can simply argue that discovery will reasonably lead to

admissible evidence.

Rule 26(a)(1): must disclose any information (witnesses, documents, etc) that the disclosing party may use to support its claims or defenses. (i.e. must tell the other side what you are going to do at trial)

Rule 26(c): motion to limit discovery; judge must compare the hardship of the party against who discovery is sought if it is granted to the hardship to the party seeking discovery if discovery is not allowed (parties must meet together and try to resolve before coming to judge)

Motion to Compel: force the other side to comply with discovery Motion for Protective Order: used to protect from discovery Losing party has to pay attorney fees of the other party

PRETRIAL ORDER @ End of Discovery

o Pre-trial order replaces pleadings, theories from SJ and all happens after discovery

o Lawyers put forth – “these are the issues, these are the witnesses, etc” (road map of trial)

o Judge signso Is binding on parties – if you don’t raise legal theories or mention witnesses

in the pre-trial order, then you can’t use them at trial (Payne)

**Summary Judgment**Challenge merits of plaintiffs claim before trialRule 56

BURDEN-SHIFTINGCelotex

The burden of establishing that there is “ no genuine issue of material fact” is on the partying moving for summary judgment.

o Make all reasonable inferences in light most favorable to non-moving party

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Two components to burden:o 1) An initial burden of production, which shifts to the non-moving party if

satisfied by the moving party, ANDo 2) An ultimate burden of persuasion, which always remains with the moving

party Manner of burden of production depends on which party will bear the burden of

persuasion on the challenged claim at trial.o If moving party will bear the burden of persuasion at trial:

Moving party must support its motion with credible evidence that would entitle it to a directed verdict if not controverted at trial.

o If non-moving party will bear the burden of persuasion at trial: Moving party may submit affirmative evidence negating an essential

element of the non-moving party’s claim Moving party may demonstrate to the court that the non-moving

party’s evidence is insufficient to establish an essential element of the non-moving party’s claim.

Moving party who requests for summary judgment on the ground that the non-moving party has no evidence, must affirmatively show the absence of evidence in the record.

o Make best argument for the other side, then show it is insufficient

** The point of summary judgment is to make the parties show that they have evidence to support their allegations in the complaint or answer. Can’t simply argue your complaint or answer, must show that you now have evidence to back up you claims

Employment Example of Burden Shifting:(Purely analytical framework)

1) Plaintiff had burden of proving a prima facia case2) Defendant must articulate legitimate reason for action

a. Burden of Production onlyi. Enough plausible evidence to raise a jury issue, a rational trier of fact

could believe the given legitimate reason3) Plaintiff must prove by preponderance of evidence that reason in #2 is not true

reason but merely a pre-text for discrimination

Defendant’s Burden in Employment Suit: The defendant need not persuade the court that it was actually motivated by the

proffered reasons. It is sufficient if the defendant’s evidence raises a genuine issue of material fact as to whether it discriminated against the plaintiff.

o Must set forth evidence showing reasons for employment action.

**This same burden-shifting analysis occurs at trail as well as summary judgment

**No credibility determinations at summary judgment stage.

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**Jury Trial**

Why Juries? Many minds Sense of community Credibility comparisons

Judge v. Jury Power Distribution Judge:

o Motion to Dismiss (especially w/ plausibility pleading standard)o Summary Judgmento Question of lawo Courts of Equityo JAMOL during trialo JAMOL post-trialo Jury instructionso New Trial

Jury:o Question of facto Credibility determinationso Courts of Law

RIGHT TO A JURY TRIALMust demand a jury trial in complaint or answer; if not then right to jury is waived

7th Amendment “froze” the right to a jury trial @ time it was adopted Preserves the right to a jury trial Must compare to what was law/equity at time of adoption of 7th Amendment

o Law = juryo Equity = no jury

Tough to Determine historical test of 7th Amendment in:1) New causes of actions2) Newly created adjudicators3) Complex litigation involving both equitable and legal claims

Test to determine whether to grant civil jury trial: 1) Compare the statutory action to 18th century actions brought in the courts of

England prior to the merger of the courts of law and equity 2) Examine the remedy sought and determine whether it was legal or equitable in

natureo The second inquiry is the more important analysis

Remedies:

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Law (Jury):o Compensatory Damageso Punitive Damageso Ejectment*

Equity (No Jury):o Injunctiono Arbitration awardo Rescission/modification of contracto Relief from judgment on grounds of fraudo Restitution*o Replevino Disagreement of ill-gotten gains

Chauffeurs, Teamsters, and Helpers v Terry 7th Amendment question depends on the nature of the issue to be tried rather than

the character of the overall action *Newly created cause of action

Atlas Roofing v OSHRC “Public rights” exemption to jury trial (No jury) *Newly created adjudicators

Granfinanceria v Nordberg “Private rights” dispute (Yes jury) Special tribunal (non-Art III court) *Newly created adjudicators

OSHRC v Granfinanceria Differences Government suing compared to private parties suing Causes of action

o Government acting as regulator of public rightso Rights of private parties in bankruptcy

7th Amendment clause concerning right to a civil jury trial is not incorporated into the states.

Beacon Theatres Jury trial must be tried ahead of an equity trial if both issues arise in the same suit

o Preserve the right to jury trialo If equity was first, equity trial could have preclusive effects on subsequent

law/jury trial(s) Modifies old “clean-up” rule

FACT v. LAW

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Juries typically determine questions of fact; judges determine issues of law

Markman In cases of patent interpretation, a judge is better positioned to determine the

proper outcomeo Because of special training, practiceo Uniformity in decisions

Judges Good at: Interpreting written standards Uniformity

o They must articulate findings of fact/conclusions of law

JURY INSTRUCTIONS When a district court is presented with an applicable instruction that raises an

important issue of law, it is not relieved from the responsibility of giving a proper instruction simply because the party making the request has proposed an instruction that does not completely comply with the relevant law.

If no objection or request of jury instruction, typically not appealable if it goes against you.

**Harmless Error: very powerful tool to have jury instruction not thrown out and a new trial started

o Would fixing error have changed outcome of case?

RULE 52 Requires Judge to find facts specifically and state his conclusions of law Why?

o Appellate Court Reviewo Preclusion effectso Make sure trial court understands facts/reasoning

**See FS 2009 Outline for Pro/Cons of Juries

**Post-Trial Motions**

JUDGEMENT AS A MATTER OF LAW (JAMOL) Rule 50

o 50(a): Pre-verdicto 50(b): Post-verdict

“Reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue”

Must ask for 50(b) within 28 days of entry of judgment Same standard as summary judgment Process (Must do BOTH or cannot appeal):

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o 1) Must ask for it during trial, after other party has been fully heard Could ask after plaintiff rests, and/or after defendant rests

o 2) Must renew after verdict (within 28 days)

Why require two motions? Functional:

o Point out a defect in the other side; judge may want to reopen evidence to allow party to fill in the gap

o If judge grants before jury verdict and appellate court determines there was enough uncertainty it should have gone to the jury, then must retry the entire case (wastes resources)

Metaphysical:o Allows the judge to have the fiction of saying that he is not overruling the

jury, but that he made a mistake by sending it to the jury in the first placeo Post verdict motion is asking judge to reconsider the first motion

MOTION FOR NEW TRIAL Rule 59 (must file within 28 days after verdict) It is the duty of the judge to set aside the verdict and grant a new trial, IF

o Verdict is against the clear weight of the evidence or is based on evidence which is false, or will result in a miscarriage of justice,

EVEN THOUGH there is substantial evidence, which would prevent the direction of a verdict.

When?o Judge makes a mistake (obvious)o Verdict is against the great weight of the evidence

Grant of New Trial is not appealable (not a final order) Appellate courts will not grant new trial if it was not asked for below

ADDITUR/REMITTITUR Remittitur: order denying the defendant’s application for new trial on condition that

the plaintiff consent to a specified reduction in the jury’s award Additur: order denying the plaintiff’s application for a new trial on condition that

the defendant consents to a specified increase in the jury’s award. o Additur not allowed in Federal courts (against 7th Amendment)

RELIEF FROM A JUDGMENT OR ORDER Rule 60 (1 year, cannot be extended) Limited to exceptional things:

o Fraud on the courto Perjuryo Default judgments o Excusable negligence o Newly discovered evidence

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Will not work when a judicial view of an applicable law subsequently changes (Title).

Rule 6(b)(2) Trial court cannot extend time limits of JAMOL, Motion for New Trial, or Relief From

a Judgment or Order even if parties and judge agree to it.

**Appellate Litigation**

Appellate Standard of Review1) De novo: no deference to lower court

a. Applied to issues of law/findings of legal conclusions (Rule 50, 56)b. Statutory interpretation; summary judgment; JAMOL pre/post

2) Clear Error: substantial deference to lower courta. Judges findings of facts

3) Abuse of Discretion: substantial deference to lower courta. Application of FRCPb. Discovery rulingsc. New Trial Grants – Rule 59

4) Plain Error: highly deferentiala. Failure to request/object to jury instructionsb. Failure to object to evidencec. Typically when lawyer makes a mistake

FINAL ORDER RULE**When is an issue appealable?**

GENERALLY, only after a final order has been given.

**See HLC CP Outline for Detailed analysis of reasons for final order doctrine

Justification of Finality: Efficiency Tend to think district Courts are right Harmless Error

Cost of Finalityo Erroneous rulings could waste an entire trialo Could have to repeat entire trial process

APPELLATE JURISDICTION**Appellate jurisdiction can be raised at any time by any party (just like SMJ)

Does an appellate court have jurisdiction:1) Did the District Court have SMJ?2) Did Circuit Court have Appellate jurisdiction?

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Basis for Appellate Jurisdiction 1291(a)

o Final Ordero Injunctions [1291(a)(1)]o Rule 54(b)o Collateral Order/Cohen

1292(b)o Double Discretion

Writ of Mandamus

Final Order: Appeal as of Right At end of the trial process.

o Could be Summary Judgment: If for the plaintiff…not a final order if remedies remain to be

determined. If for the defendant…must be complete, then is a final order.

Injunctions - § 1291(a)(1): Grant or denial of injunction is immediately appealable Must actual have granted or denied injunction and not just still deciding

Rule 54(b): Appeal as of Right ** ONLY involves lawsuits with multiple claims Court can rule as a final judgment on more than one but not all of the claims so they

can be appealable during trial rather than waiting until the end.o Must be separable claims (claims here = legal theory based on set of facts)o Must be expressly determined that there is no just reason for delay

Want parties to know the clock is ticking on time to appeal Judge has discretion to grant this but the decision to grant can be reviewed based on

the abuse of discretion

Rule 54 Process:1) Decide/rule on a claim2) Determine the issue is separable3) Expressly determine there is not just reason for delay= Entry of Final Judgment on that claim

Collateral Doctrine (Cohen Exception) Test: Issue must be…

o 1) Effectively unreviewable at the end of the trialo 2) Independent issue from merits (not deciding anything on the merits)o 3) Too important to be denied review

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o 4) Final resolution of this issue (must be yes/no, bond/no bond type answer) Colorado River Stay, and all abstentions may fit into this. Cohen involved posting of a bond at beginning of trial

Double Discretion – 1292(b) Discretionary Appeal on non-final orders

o 1) District Court has discretion on whether issue should be appealable Three Things Required:

1) “Important issue”, “controlling question of law” 2) “grounds for disagreement” 3) “materially advance ultimate termination” of suit (speed up

conclusion of trial) Must be in writing

o 2) Circuit Court has discretion on whether to hear the appeal 10 Days to initiate appeal

Writ of Mandamus Order to trial court to do something Mandamus can essentially nullify all the appellate jurisdiction standards because

appellate court can just interject any time during trial Test:

o Highly Discretionaryo No adequate remedy (Irreparable Harm)o Right to Relief is clear and undisputedo Appropriateness under the circumstances

Reoccurring issue (La Buy) Important problem

**Rule 23(f): permits plaintiff or defendants to petition the Court of Appeals to review a grant or denial of class certification; immediately appealable

**Expanding the Lawsuit**

Things to consider when expanding a lawsuit (party/claims):1) Permission under FRCP2) Subject Matter Jurisdiction (**Watch)

**See Greiner PPT on Joinder for visual examples

COUNTERCLAIMS (Rule 13)

Compulsory Counterclaim – Rule 13(a) Counterclaim DOES arise from the same transaction or occurrence as original suit MUST be brought

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If not brought, then you have waived right to bring it Every time a party is sued, countersued, cross-sued, third-party sued, MUST

bring compulsory counterclaims against that party

Permissive Counterclaim – Rule 13(b) Counterclaim DOES NOT arise from same transaction or occurrence as original suit Not required to be brought No right waived it not brought up

JOINDER (Rule 18, 19, 20)

Permissive Joinder of Parties (Plaintiffs/Defendants) – Rule 20(a)(1), Rule 20(a)(2) Suit must arise from:

o 1) Same transaction or occurrence, AND o 2) Common issue of law or fact

Always permissive

Permissive Joinder of Claims – Rule 18(a) A party asserting any type of claim (original, counter, cross, third-party) may

join, as independent or alternative claims, as many claims as it has against an opposing party

Claim(s) DOES NOT arise from same transaction or occurrence as original suit. Always Permissive Remember to check for proper SMJ over these claims

CROSS-CLAIMS (Rule 13(g))

Inter-Defendant Cross-Claims: Claims DOES arise from same transaction or occurrence, OR if same property Does not destroy diversity even if cross claim is between non-diverse parties Always permissive

Inter-Plaintiff Cross-Claims: Claims DOES arise from same transaction or occurrence, OR if same property If not diverse parties CANNOT sue

o § 1367(b): “made parties by plaintiff”o Diversity claims under SMJ

Always permissive

THIRD-PARTY ACTIONS (Rule14) Defendant v. Third-Party Defendant – Rule 14(a)

o Impleading a Third-Party onlyo Not technically same transaction or occurrenceo Allowed if it shifts liability (i.e. insurance companies)

Third-Party Defendant v. Plaintiff – Rule 14(a)(2)(D)

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o Claim DOES arise from same transaction or occurrenceo Always permissive

Plaintiff’s Counterclaim v. Third-Party Defendanto Compulsory counterclaim rule kicks in

HOWEVER, Must be aware of diversity rules § 1367(b):“made parties by plaintiff” Diversity claims under SMJ

Additional Rules: Third-Party Defendant may bring in another party who would be liable for all or

part of any claim against it; Rule 14(a)(5) Original plaintiff, if sued (by counterclaim, cross-claim, third-party claim) may bring

in another party under same rules apply to defendant and a third party (Rule 14(a))o Careful with diversity (Guaranty Systems)

INTERVENTION (Rule 24)

Intervention as of Right: Three Factors:

o 1) “Interest” in the transaction (prerequisite)o 2) Applicant may be impeded in protecting his interest by the actiono 3) Applicant’s interest is not adequately represented by others currently in

lawsuit

Grounds for Inadequacy of Representation: Interests do not necessarily coincide Interests not represented at all Attorney who is supposed to be representing interests is antagonistic Collusion between the representative and the adverse parties

Permissive Intervention Claim or defense that shares with the main action a common question of fact or

law

Intervention Info: Government may intervene if any party’s claim or defense is based upon a statute,

executive order, federal regulation, order, etc. In allowing intervention court must consider whether the intervention will unduly

delay or prejudice the adjudication of the original parties’ rights

**Preclusion**

CLAIM PRECLUSION Prevents re-litigation of the same cause of action between the same parties.

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4 Essential Elements: 1) Final Judgment 2) Judgment on the merits 3) Same claim 4) Same Parties

Final Judgment A trial court judgment (including summary judgment) is sufficient to be “final”, even

if on appeal. SOL varies from state to state on whether it is considered final for preclusion

Judgment on the Merits Dismissal for lack of Subject Matter Jurisdiction, Personal Jurisdiction, or Venue is

NOT considered a final ruling for preclusion (not “on the merits”) Dismissal for failure to state a claim is on the merits

Same Claim: Sufficient identicality between the causes of action asserted in the earlier and later

suits Arises out of the same “transaction or occurrence” or “common nucleus of fact” Does not have to be actually litigated, but needs to have been available in the first

suit. o Think about compulsory counterclaims

Same Parties: Can apply to parties not part of the earlier lawsuit Must either be the:

o The same party from the 1st lawsuit ORo Be in privity with the 1st lawsuit party

Can be shown by: 2nd party had substantial control over 1st party

**Bonds/Coupons are each individual claims

Policy reasons for Claim Preclusion: Efficient use of judicial resources Prevent harassment of defendants Prevent plaintiff from “spinning litigation roulette wheel” until there is a

sympathetic jury Reduce risk of inconsistent results Liberal rules of procedure already give the parties a fair opportunity to litigate.

ISSUE PRECLUSION

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Parties are barred from re-litigating the same issue in subsequent actions.

4 Essential Elements 1) Same issue 2) Issue was actually litigated 3) Issue was necessary to decision 4) Same parties (not always)

Issue was actually litigated: Must be fought over by the parties Default judgments and admissions are insufficient; rulings with later dismissals

(think 3rd assignment) are probably insufficient Implies that issue was actually decided May have consequences with other lawsuits that were unintended if not required to

be litigated Do not want parties to be forced to raise every single issue that could potentially

come up on a later suit

Issue was necessary to decision: Assures the issue was sufficiently important to the prior action and the party gave it

full consideration Don’t want to give dictum too much weight because judges might not fully through

think through the implications of their dictum

Same parties: Used to require “mutuality” (both parties same) to apply issue preclusion Not all courts require mutuality anymore:

o Defensive (acceptable)o Offensive (generally not allowed)

Defensive Non-Mutual Collateral Estoppel (Blonder Tongue) Defendant seeks to prevent a plaintiff from asserting a claim that plaintiff has

previously litigated and lost against another defendant Looks like:

o P* D1

o P* D2

Don’t want plaintiff to keep trying issue with different defendants. Policy: forces plaintiff to sue everyone in the first lawsuit because if he loses in the

first lawsuit he automatically loses the second lawsuit (judicial efficiency) Trial court has some discretion on whether to allow this:

o Plaintiff must be permitted to demonstrate, that he did not have a fair opportunity procedurally, substantively, and evidentially to pursue his claim the first time

Offensive Non-Mutual Collateral Estoppel (Parklane)

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Plaintiff (new) seeks to foreclose the defendant from litigating an issue the defendant has previously litigated unsuccessfully in an action with another party

Looks like:o P1 D*o P2 D*

Can’t use against the federal government (US v Mendoza) Parklane is federal courts rule ONLY Trial Court has some discretion on whether to allow this:

o NO ONMCE when: Plaintiff could have easily joined in the earlier action

Want to avoid the “wait and see” approach Use of ONMCE would be unfair to defendant:

One or more prior inconsistent judgments on the verdict Party may not have litigated prior issue aggressively if the

stakes were small or the forum inconvenient If procedural rules of the court that decided the prior action

were more restrictive than those of the current court

**Remember: to have offensive or defensive issue preclusion must meet 4 requirements of issue preclusion first

PRECLUSION AMONG JUDICIAL SYSTEMS General Rule:

o Subsequent court must give at least as much preclusive effect as the rendering court would

Rendering court can limit the preclusive effects of its own judgments Two Questions to Ask:

o What is the source of the law giving preclusive effects?o What is the content of the law granting preclusion?

Source of the Law: State to State: § 1738, full faith and credit clause, Art IV § 1 State to Federal: § 1738, Art III Federal to State: Federal Common Law Federal to Federal: Federal Common Law

State to State: The subsequent state court must give at least the same preclusive effects the

rendering state court would give.

State to Federal: The subsequent federal court must give at least the same preclusive effects the

rendering state court would give.

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Subsequent federal courts hearing an issue that is exclusive to federal courts (i.e. state antitrust tried in state court, federal antitrust unavailable in state court) will typically not give claim preclusion but may likely give issue preclusion. (Marrese)

Federal to State: In diversity cases, The subsequent state court must give at least the same

preclusive effects the state court system of the state in which the federal court sits would give (Semtek)

o i.e. Oklahoma state court precluding a claim rendered from Texas federal court will give the preclusive effects that Texas state courts would give.

Does not use the preclusion rules of the state substantive law that he court chooses through its horizontal choice of law approach if it is different than the sitting court.

o i.e. Oklahoma state court will use the preclusion rules of Texas state courts even if the prior suit was tried using Kentucky substantive law.

Semtek: court punts by saying that preclusion is procedural, then substantive. Diversity v. “Arising Under”??

Federal to Federal: No specific statute, but preclusion among the same federal system is essential to

properly running courts. Parklane probably sets out the federal preclusion rules.

Can courts give MORE preclusive effect than the rendering court? Not a settled issue. No SCOTUS ruling. Hart v American Airlines: NY state court gave more preclusion, by not requiring

mutuality, than the rendering Texas court would have.

Administrative Agency Decisions: Key requirements:

o Agency court must be acting as an adjudicator.o Must provide due process (see Restatement Handout)

Preclusion Effects:o Unreviewed agency decisions are not given full faith and credit in subsequent

federal litigations.o Factual findings (issue determinations??) by agency courts are given

preclusion in subsequent federal courts to the extent they would be given preclusion in the rendering state

i.e. federal trial will give at least the same preclusive effects that Tennessee would give a Tennessee agency decision. (University of Tennessee v Elliott)

o Exception: federal courts are allowed to reject preclusive effects of agency decisions if there is a federal right at issue.

**Class Actions**

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Courts typically do not like class actions

PREREQUISITES – Rule 23(a) There must be a class Class representative must be a member of the class Joinder of all members is “impracticable”

o Numerosity Requiremento Class is so numerous

Over 40 is OK Under 25 is NOT OK Between 25-40 requires more analysis (geographic dispersion, size of

claims) Questions of law or fact common to the class

o Commonality Requirement Representatives claims or defenses are “typical” of the class

o Typicality Requirement Class representative will fairly and adequately protect the interest of the class

Typicality: “class representative must be part of the class and possess the same interests and suffer the same injury as the class members” (General Telephone v Falcon)

TYPES OF CLASS ACTIONS – Rule 23(b) Three categories of Class actions 1) Prejudice Class Actions – 23(b)(1)

o Mandatory; no opt-out availableo No notice necessaryo Two Subdivisions

Subdivision A: FRCP 23(b)(1)(A) Inquiries into the prejudice to the non-class party Applies when different results of individual actions would

place the non-class party in a position of total uncertainty, not knowing how to treat the class as a whole

i.e. registering to vote Subdivision B: FRCP 23(b)(1)(B)

Inquires into the prejudice to the members of the classo “Limited Fund” Class Action

Applies when no class action would substantially impair or impede the ability of the non-parties to protect their interest

i.e. first to sue would get most of money, impair later suits 2) Injunctive and Declaratory Relief – 23(b)(2)

o Most common class action categoryo No opt-out necessaryo No notice necessaryo Defendant’s conduct need only be generally applicable to class (i.e. civil

rights)

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3) Damages Class Action – 23(b)(3)o Used for mass torts; allows certification when the tie among the members is

that they have been injured in the same way by the defendanto Must give absent class members

Mandatory notice Higher notice than Constitution requires (must be made with a

reasonable effort) Right to opt-out of class

o Must prove: Questions of law or fact common to the class members must

“predominate” over any questions affecting only individual class members (predominance overwhelms commonality)

Predominance Requirement Court must find that a class action is superior to other available

methods for fairly and efficiently adjudicating the controversy Superiority Requirement

SETTLEMENTS – Rule 23(e) Any settlement of a class action must be approved by the judge

o Court will approve settlement only if it is convinced that interests of the absent class members are adequately protected

Absent class members must get:o Notice of the settlemento An opportunity to opt out of the settlement (only 23(b)(3) class actions)

For a “settlement” class, do not have to worry about management problems at the trial state, BUT must still meet the requirements of Rule 23.

o Amchem: class had internal conflicts and representatives were not typical of the class

**See FS 2009 Outline for Pros/Cons of Class Actions

GENERAL RULES OF CLASS ACTION LITIGATION

Class Actions and Personal Jurisdiction: The forum state may exercise jurisdiction over the claim of an absent class-action

plaintiff, even though that plaintiff may not possess the minimum contacts with the forum that would be required if he were a defendant (Shutts)

o HOWEVER, due process requires some protection for absent class members Absentee must be able to opt-out of class Absentee must receive notice of the lawsuit Absentee must have an opportunity to be heard in the lawsuit Named representative must always represent the interest of the

absent class member

Class Actions and Horizontal Choice of Law:

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Forum must have a significant contact or aggregation of contacts to the claim assert by each member of the plaintiff class to create a state interest and to properly apply forum law so that forum substantive law is not arbitrary or unfair

Otherwise, must apply the appropriate state laws to the appropriate plaintiff’s rather than forum state apply a “one-size fits all” approach.

Class Actions and Preclusions Rules: Claim preclusion does not apply to class actions Issue preclusion arguably does not apply here either; although it may

Class Actions and Diversity: Diversity of citizenship for the class is determined solely from the named plaintiff(s)

(Ben-Hur) Only 1 named plaintiff must meet AIC requirement in class action

o When at least one named plaintiff satisfies the AIC requirement, § 1367 authorizes supplemental jurisdiction over the claims of the other plaintiffs in the same case or controversy, even if those claims are for less than the AIC (Exxon)

Diversity Situations:

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SCENARIO #1:

80KTX OK NO! (Destroys Complete Diversity)

OK 80K

SCENARIO #2

80KTX OK YES! (Does not meet AIC; still Complete Diversity)

TX 40K

SCENARIO #3

80KOK OK NO! (Destroys Complete Diversity)

TX 40K

SCENARIO #4

80KTX OK UNCERTAIN!!

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