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1Civil Procedure Outline Modules 1 - 30

Civil Procedure

Module 1 Survey of the Civil Matter

I. A Survey of the Civil Action

A. The Concern and Character of Civil Procedure

Topic Casebook & Notes

In resolving the legal disputes they are presented, courts apply two types of law - substantive and procedural.

substantive - regulate the everyday relationships among individuals and between individuals and institutions. Also defines the standard of liability in a particular case.

Civil suits generally are initiated and litigated by private parties attempting to vindicate their legal rights vis-a-vis other private parties.Criminal suits are instituted and prosecuted by the government in an effort to punish those individuals whose conduct has violated the community's moral judgments as expressed in its penal law.

adversary system - almost total responsibility is placed on the parties to the controversy for beginning suit, for shaping the issues, and for producing evidence.inquisitorial system - the court conducts an active and independent inquiry into the merits of each case, which may include having the judge question and examine witnesses, as well as specifically ordering certain fact-finding.

Participation Principle - requires that the arrangements for the resolution of civil disputes be structured to provide each interested party with a right to adequate participation.Accuracy Principle - requires that the arrangements for the resolution of civil disputes be structured to maximize the chances of achieving the legally correct outcome in each proceeding.

Conflict Resolution Model - sees civil process primarily as a method of achieving peaceful settlement of private disputes.Behavior Modification Model - sees the courts and civil process as a way of altering behavior by imposing costs on a person.

B. An Outline of the Procedure in a Civil Action

1. Selecting A Proper Court



jurisdiction over the subject matter - the constitution and statutes under which the court operates must have conferred upon it power to decide this type of casejurisdiction over the person - must be subject or amenable to suit in the state in which the court is located so that a judgment may be entered against him

original jurisdiction - cases are brought and tried

general jurisdiction - organized into districts, hear cases of many kinds, claims for which the relief

requested exceeds a statutorily fixed dollar amount

inferior jurisdiction - municipal courts, claims of smaller financial significance; justice-of-the-

peace courts (very minor matters), specialized tribunals (e.g. traffic)

appellate jurisdiction - reviews the decisions of lower courts

Principal federal courts:1. US District Courts - courts of original jurisdiction, at least one in every state.

(a) Cases involving federal law.(b) Diversity of Citizenship - the parties are citizens of different states or one of them is a citizen of a foreign country. Not exclusive; state courts are also competent to hear these cases.

(c) amount in controversy (more than $75K) is at stake2. 13 US Courts of Appeals - review the decisions of federal district courts in the several states within its circuit.3. Supreme Court of the US - reviews the decisions of federal courts and decisions of state courts that turn on an issue of federal law.

venue - a courts whose district includes the county in which either party lives.

Jurisdiction over the subject matter cannot be waived by the parties.

Topic Lectures

Cluster 1 - Jurisdiction

Checklist for jurisdiction issues:3 Constitutional questions -1. Does the particular court chosen for this case have subject matter jurisdiction - power to hear this dispute?2. Does the court have jurisdiction over the person of the defendant?3. Has that defendant been given notice of the case and an opportunity to present his/her side of the case?


Non-Constitutional questions -4. Has the defendant been served with process properly?5. Does the chosen court have venue (rational location)?6. Can the state case be removed to a federal court? 7. Have any of the six preceding issues been waived?

1. Subject Matter Jurisdiction

Balance of judicial power - decided by Article 3 of the Constitution which lists types of cases for federal court.Federal courts only have power to hear certain types of disputes - limited power.

(a) Federal courts have power to hear actions that arise under federal law/statute, Constitution or treaty.

Issue must be of federal jurisdiction, and not simply a case using a federal defense.There is no amount in controversy requirement for federal claims.Exclusive federal jurisdiction - can only be heard in federal court, e.g. copyrights, patents.Concurrent subject matter jurisdiction - can be heard in federal or state.

(b) Federal courts have power to hear diversity of citizenship cases - parties are of different states.

Arbitrary Rules:(1) There must be complete diversity of citizenship - everyone who is a plaintiff party

must come from a state that is different from every one of the defendants. (2) Citizenship of the parties is determined on the day that the action is instituted.(3) Determination of citizenship:

(i) Natural persons - citizenship of individual peopleDoesn't change unless:

- we move to another state, and- we intend to stay there

(ii) Corporations - citizen of two states - where it was incorporated and the state that represents its principle place of business - where does it make its decisions and where does it have its main operations

(iii) Unincorporated associations - look to the citizenship of every member of the association

(iv) Representative actions - children, estates, incompetents, class actions Tested by the citizenship of the representative, not the representedSince 1988, do not use citizenship of representatives of minors, incompetents and estates - use the represented themselves. Not changed for class actions or shareholder suits.

(v) Alienage - alien is treated as a citizen of the state where he holds domicile


2. Commencing the Action


service of process - notice of the commencement of the actionsummons - directs defendant to appear and defend under penalty of default -

unless defendant answers the summons, a judgment will be entered against him.personal service - summons is physically delivered to defendant or is left at his

homesubstituted service - sending the papers by registered mail or delivering the

summons to his agent within that statepublication - in a newspaper for a certain length of time

3. Pleading and Parties


pleadings (complaint) - written statement that will contain the plaintiff's claim against defendant

Three Objectives to Pleadings:1. to furnish a basis for indentifying and separating the legal and factual contentions

involved so that the legal issues may be disposed of at an early stage2. to establish in advance what a party proposed to prove at trial so that his opponent

will know what contentions he must prepare to meet3. to give each party only a general notice of his opponent's contentions, in which

event the system would rely upon subsequent stages of the lawsuit to identify the legal and factual contentions of the parties and to enable each to prepare to meet the opponent's case.

4. The Response


Response - Follows the service of the complaint

motion to dismiss - challenges the court's jurisdiction over the subject matter or person, the service of process, or venue.motion to dismiss for failure to state a claim or cause of action (demurrer) - the facts alleged in the complaint are accepted as true, and the court considers whether, on the assumption, plaintiff has shown that the pleader is entitled to legal relief.

Three general situations in which such a motion might be granted:1. the complaint may clearly show that the injury is one for which the law


furnishes no redress2. plaintiff may have failed to include an allegation on a necessary part of the case3. the complaint may be so general or so confused that the court finds that it does not give adequate notice of what plaintiff's claim is

answer - required if motion to dismiss is denied or none is made. Must admit or deny the factual allegations made in the complaint. Must list all affirmative defenses.counterclaim - a claim that arises out of the same occurrence being sued upon by plaintiff.

5. Obtaining Information Prior to Trial


pretrial discovery - designed to allow the parties to exchange information about their claims and defenses and to prepare for trial.

1. depositions2. written interrogatories - usually may be addressed only to a party to the suit,

answered by the party with counsel's aid3. production of documents4. requests for admissions - remove uncontested issues from the case5. physical examination

6. Summary Judgment


motion for summary judgment - supplements the pleadings with additional documents to show that an apparent issue that is decisive of the case is spurious. Supported by demonstrating that the crucial issue will have to be resolved in the mover's favor at trial, because the opposing party will be unable to produce any admissible evidence in support of her position on the issue.

7. Setting the Case for Trial


After discovery is completed, and if the case has not been terminated by dismissal, summary judgment, or settlement.

note of issue - filed by either party. The case will be given a number and placed on a trial calendar.


8. The Jury and Its Selection


The parties have a right to have the facts tried by a jury. This right is assured in the federal courts by the 7th Amendment.

equitable remedy - an order directing or prohibiting specified action by defendant rather than a judgment for damages.

challenge for cause - if one of the persons called has prior knowledge of the case or is a personal friend of one of the parties.peremptory challenge - no reason need be given, limited number allowed.

9. The Trial


opening statement - made by plaintiff's lawyer, describes for the jury what the case is about, what contentions she will make, and how she will prove them.

direct examination - each witness is first questioned by the lawyer who has called that witnesscross-examine - questioning by the lawyer for the other sidere-direct / re-cross

hearsay evidence - repeats what someone else has said for the purpose of proving the truth of what was said

rest

directed verdict - judgment as a matter of law in federal practice. Called on the ground that plaintiff has not established a prima facie case. Plaintiff has not introduced enough evidence to permit the jury to find in her favor.

10. Submitting the Case to the Jury


charges/instructions - each lawyer may submit proposed instructions, which the trial judge will grant or deny. Summarizes the facts and issues, tells the jury about the substantive law to be applied on each issue, gives general information on determining the credibility of witnesses, and states who has the burden of persuasion on each issue of fact.


burden of persuasion - requires that one party prove her contention on a given issue by a preponderance of the evidence.

verdict - jury's decision, of a type chosen by the judge.

Three types of vedicts:1. general verdict - permits the jurors to determine the facts and apply the law on

which they have been charged to those facts2. general verdict with interrogatories - combines the form of the general verdict with several key questions that are designed to test the jury's understanding of the issues.3. special verdict - all of the factual issues in the case are submitted to the jury as questions without instructions as to their legal effect; the judge applies the law to the jury's answers and determines which party prevails.

hung jury - if the minimum number of jurors required for a verdict are unable to reach agreement.

11. Post-Trial Motions


motion for a judgment notwithstanding the verdict (motion for a judgment n.o.v.) - a renewed motion for judgment as a matter of law, raises the same question as a motion for a directed verdict.

motion for a new trial - may include assertions tha tthe judge erred in admitting certain evidence, that the charge was defective, that attorneys, parites, or jurors have been guilty of misconduct, that the damages awarded are excessive, or that the jury's verdict is against the clear weight of the evidence.

12. The Judgment and Its Enforcement


judgment - final determination of the lawsuit, absent an appeal. May be in the form of an award of money to plaintiff, a declaration of rights between the parties, specific recovery of property, or an order requiring or prohibiting some future activity.

execution - the common method of forcing the losing party to satisfy a monetary judgment.writ of execution - issued when the loser does not do so voluntarily. Issued by the court commanding an officer - usually the sheriff - to seize property of the losing party and, if necessary, to sell it at public sale and use the proceeds to satisfy plaintiff's judgment.


injunction (decree) - requires defendant to do something or to stop doing something. Operates against the defendant's person.contempt of court - when defendant fails to object, punished by fine or imprisonment.costs - provided by statute and certain out-of-pocket disbursements.

13. Appeal


petition for a writ of certiorari - for review in the US Supreme Court.

record - contains the pleadings, a portion of the transcript of the trial (court reporter's verbatim record of the trial), and the orders and rulings relevant to the appeal.briefs - written contentions presented by the parties to the appellate court.oral arguments

Appellate court has the power to affirm, reverse, or modify the judgment of the trial court. May also remand to trial. Accompanied by a written opinion signed by one of the judges hearing the appeal.

reviewability - when the judgment is appealed, that ruling may be assigned as error and the appellate court will consider whether it was correct.

14. The Conclusiveness of Judgments


res judicata - a thing decided.

C. A Note on Motion Practice


motion - the procedural device by which a litigant asks a court for an order.

A litigant generally must make a motion in writing.

Two exceptions to writing a motion:1. when the court is recording a hearing verbatim2. when a trial is taking place

Motion must generally state with particularity the reasons or grounds supporting the motin and the relief sought.


Motion must also appear in a proper form, which usually is determined by local court rules.The litigant must also serve the motion on her adversary.All motions in federal court require the signature of the litigant's attorney or the litigant.A party served with a motion may answer and usually must do so within a time period specified by the rules.A party may move for an extension of time.

D. A Note on Remedies


The most important types of relief that a court may award in a civil action fall into three categories:

1. declarative - consists simply in a court's defining the rights and duties of the parties in a particular legal context.

2. specific - consists generally of an order directing conduct.3. compensatory - calls for a judgment that defendant pay plaintiff a certain sum

of money.

E. Illustrative Cases

1. Authority of Court to Proceed with the Action

Capron v. Van Noorden , 6 U.S. (2 Cranch) 126, Supreme Court of the United States, 1804

Case Brief

FACTS:

The proceedings stated Van Noorden to be late of Pitt County, NC, but did not allege Capron, the plaintiff, to be an alien, nor a citizen of any state, nor the place of his residence.

ISSUE:

Whether the plaintiff had a right to assign for error the want of jurisdiction in that court to which he had chosen to resort.

RULE:

APPLICATION:


Here it was the duty of the Court to see that they had jurisdiction, for the consent of the parties could not give it.

CONCLUSION:

The defendant in error did not appear, but the citation having been duly served, the judgment was reversed.

Tickle v. Barton , 95 S.E.2d 427, West Virginia, Supreme Court of Appeals of West Virginia, Haymond, Judge, 1956

Case Brief

FACTS:

One of the attorneys for the plaintiff caused an alias process to be issued against the defendants and delivered it to a deputy sheriff for service upon the defendant Barton in McDowell County.The defendant Barton challenged the validity of the service of the alias process upon him on the ground that he had been induced to come to that place in McDowell County by trickery, artifice and deceit practiced upon him by the attorney for the plaintiff.The circuit court overruled the demurrer of the plaintiff.

ISSUE:

Whether the allegations of the amended plea in abatement, which insofar as they are material and are well pleaded must be considered as true upon demurrer, are sufficient to render invalid the personal service of process upon the defendant Barton.

RULE:

If a person resident outside the jurisdiction of the court and the reach of its process is inveigled, enticed, or induced, by any false representation, deceitful contrivance, or wrongful device for which the plaintiff is responsible, to come within the jurisdiction of the court for the purpose of obtaining service of process on him in an action brought against him in such court, process served upon him through such improper means is invalid, and upon proof of such fact the court will, on motion, set it aside.

APPLICATION:

The defendant Barton was induced or enticed to come into McDowell County by the unauthroized invitation extended to him by the attorney for the plaintiff whose purpose at the time was to obtain personal service upon the defendant Barton.

CONCLUSION:


The amended plea in abatement is sufficient upon demurrer and the action of the circuit court in overruling the demurrer was correct.

2. Defining and Determining the Case Before Trial

Case v. State Farm Mutual Automobile Insurance Co. , 294 F.2d 676, 5th Circuit, United States Court of Appeals, Fifth Circuit, Cameron, Circuit Judge, 1961

Case Brief

FACTS:

Case for damages growing out of the termination of plaintiff's representation of the three companies as local agent.He was appointed agent by a written contract which constituted him an independent contractor for all purposes and provided that he was not required to devote all of his working time to any one of the companies.Appellees began to and did meddle and interfere with the plaintiff's work as agent of the three companies in disregard of the agreement between the defendants and the plaintiff.Charged malicious and wrongful cancellation of the written contract between him and appellees.

ISSUE:

Whether the court below erred in interpreting the meaning of language which was, viewed as a whole, clear and unambiguous.

RULE:

A complaint should not be dismissed if it charges facts upon which a court could possibly grant relief.

APPLICATION:

The contract gave the appellees the right to cancellation with our without cause, and in terminating it the appellees acted entirely within their rights.The complaint does not set forth an independent claim for damages based upon meddling and interference by appellees with appellant's performance of the contract.

CONCLUSION:

We do not think that the court erred in interpreting the meaning of the language.We think the court below correctly granted the motion to dismiss.


Temple v. Synthes Corp. , 498 U.S. 5, Supreme Court of the United States, Per Curiam, 1990

Case Brief

FACTS:

Temple underwent surgery in which a plate and screw device was implanted in his lower spine. The device was manufacturer by Synthes. Dr. LaRocca performed the surgery.Following surgery, the device's screws broke off inside Temple's back.Temple filed suit against Synthes in the US District Court.Sythes filed a motion to dismiss Temple's federal suit for failure to join necessary parties pursuant to Federal Rule 19.The District Court ordered Temple to join the doctor and the hospital as defendants.When Temple failed to join the doctor and the hospital, the court dismissed the suit with prejudice.

ISSUE:

RULE:

It is not necessary for all joint tortfeasors to be named as defendants in a single lawsuit.A tortfeasor with the usual 'joint-and-several' liability is merely a permissive party to an action against another with like liability.

APPLICATION:

No inquiry under Rule 19(b) is necessary, because the threshold requirements of Rule 19(a) have not been satisfied. As potential joint tortfeasors with Synthes, Dr. LaRocca and the hospital were merely permissive parties.

CONCLUSION:

It was error to label joint tortfeasors as indispensable parties under Rule 19(b) and to dismiss the lawsuit with prejudice for failure to join those parties.We grant the petition for certiorari, reverse the judgment of the Court of Appeals for the 5th Circuit, and remand for further proceedings consistent with this opinion.

Dimichel v. South Buffalo Ry. Co. , 604 N.E.2d 63, New York, Court of Appeals of New York, Wachtler, Chief Judge, 1992

Case Brief


FACTS:

While employed by South Buffalo, plaintiff sustained injuries in a fall.Plaintiff asked for disclosure of all videotapes or surveillance films that defendant may have taken of plaintiff.South Buffalo contended that any such material was not discoverable. Plaintiff then moved to compel disclosure. The motion to compel disclosure was granted and defendant was ordered to turn over to plaintiff for inspection and copying any and all videotapes and/or surveillance films of the plaintiff.The defendant was obligated to turn over those surveillance materials it intended to use at trial, and the defendant would be precluded from using any surveillance material it did not supply to plaintiff within 60 days of its order.

ISSUE:

Whether surveillance films prepared by a defendant in a personal injury action are discoverable by the plaintiffs before trial.Whether plaintiffs confronted with surveillance films for the first time at trial would have an adequate opportunity to ascertain the films' accuracy and authenticity.

RULE:

APPLICATION:

A plaintiff confronted with a surveillance film at trial, would certainly be entitled to a continuance to examine the video evidence.If defendants were allowed to withhold surveillance evidence until trial, personal injury trials could be routinely disrupted and delayed.A plaintiff confronted with altered video evidence for the first time at trial would likely be prejudiced by the apparent weight and authority of such evidence. Even if after careful examination plaintiff was able to demonstrate that the evidence had indeed been distorted, it would be difficult to undo its initial impact and to erase the impression left in the minds of the jury members.

CONCLUSION:

The defendants would be obligated to disclose only those tapes which they planned to use at trial.Surveillance films should be treated as material prepared in anticipation of litigation, and as such, are subject to a qualified privilege that can be overcome only by a factual showing of substantial need and undue hardship.

Alderman v. Baltimore & Ohio R. Co. , 113 F.Supp. 881, United States District Court, Southern District of, Moore, Chief Judge, 1953


Case Brief

FACTS:

Action to recover for personal injuries sustained by plaintiff as a result of the derailment of one of defendant's trains.Plaintiff was not a fare-paying passenger. She was traveling on a trip pass.The following conditions were printed on the pass: "In consideration of the issuance of this free pass, I hereby assume all risk of personal injury and loss of or damage to property from whatever causes arising..."

ISSUE:

The effect which a release of liability contained in a pass has upon the carrier's duty to the holder of such a pass.

RULE:

A carrier may contract against liability for negligent injury to one who accepts a free pass; but that for reasons of public policy it cannot relieve itself of liability for willful or wanton acts.In order that one may be held guilty of willful or wanton conduct, it must be shown that he was conscious of his conduct, and conscious, from his knowledge of existing conditions, that injury would likely or probably result from his conduct, and that with reckless indifference to consequences he consciously and intentionally did some wrongful act or omitted some known duty which produced the injurious result.

APPLICATION:

The sole duty imposed upon defendant under the facts of this case was to refrain from willfully or wantonly injuring plaintiff.

CONCLUSION:

The complaint fails to state sufficient facts to substantiate a charge of willfulness.

3. Judge and Jury


Four ways in which the judge acts to insure that the jury performs its proper function:1. the instruction of the jury as to the law it shall apply2. the form that the verdict takes3. judicial control over the matters the jury may consider4. the taking from the jury of its power to decide a case when the evidence is


inadequate.

A. Instructing the Jury


burden of production - the burden of initially putting in evidence on an issue, without which the issue is not in the case at all.

Alexander v. Kramer Bros. Freight Lines, Inc. , 273 F.2d 373, 2nd Circuit, United States Court of Appeals, Second Circuit, Swan, Circuit Judge, 1959

Case Brief

FACTS:

Case about a collision between two tractor-trailer trucks.The corporate plaintiff owned on eof the trucks. It was badly damaged and its operator sustained serious injuries.Jury found for a verdict for the plaintiffs.

ISSUE:

Whether the judgment should be reversed because of the court's erroneous charge as to the burden of proof of contributory negligence.Whether the exception was sufficiently explicit.

RULE:

The plaintiffs in an action where death has not resulted carry the burden of proving freedom from contributory negligence.

APPLICATION:

The cases now relied upon by appellant to prove the charge wrong were never brought to the trial court's attention either in the colloquy or at the time when counsel submitted numerous requests to charge on other matters. Had they been, it seems probable that Judge Inch would have changed the view he expressed in colloquy.

CONCLUSION:

Judgment affirmed.


B. The Form of the Verdict

Diniero v. United State Lines Co. , 288 F.2d 595, 2nd Circuit, United States Court of Appeals, Second Circuit, Medina, Circuit Judge, 1961

Case Brief

FACTS:

Diniero claimed to have suffered such repeated strains in his back in the performance of his duties as to cause a ruptured disc with resultant pain and suffering, culminating some years later in a fusion operation and the removal of the disc.Trial judge submitted 8 questions to be signed and returned as the verdict of the jury.Trial judge withdrew all the questions.

ISSUE:

RULE:

Rule 49(b) authorizes the submission of written interrogatories but does not authorize the withdrawal of such interrogatories, after they have once been submitted and the jury has commenced its deliberations thereon.

APPLICATION:

There was an inherent ambiguity in question one. The explanation failed to remove the ambiguity. Under these circumstances we think it was not an abuse of discretion to withdraw the questions and give the jury an opportunity to agree upon a general verdict.

CONCLUSION:

Under the circumstances it was good judgment to withdraw all the questions.

C. The Jury's Deliberation

Texas Employers' Ins. Ass'n v. Price , 336 S.W.2d 304, Texas, Court of Civil Appeals of Texas, Eastland, Collings, Justice, 1960

Case Brief

FACTS:


Plaintiff received an accidental injury while working. Such injury was the producing cause of total disability.One of the jurors related his personal experiences to persuade the jury that appellee was totally and permanently incapacitated.

ISSUE:

Was there jury misconduct?Whether the incapacity of appellee was total and permanent or only permanent partial.

RULE:

APPLICATION:

CONCLUSION:

The existence of one of the alleged acts of jury misconduct is shown conclusively and in our opinion constitutes reversible error.The evidence supports the finding of total permanent incapacity and that such finding is not against the great weight and preponderance of the evidence.It was misconduct for the juror to relate to the other jurors his own personal experience as original evidence of material facts to be considered in their deliberation.The misconduct shown was material and that it reasonably appears that injury probably resulted to appellant.

D. Taking the Case From the Jury

Lavender v. Kurn , 66 S.Ct. 740, Supreme Court of the United States, Murphy, Justice, 1946

Case Brief

FACTS:

Haney, while employed as a switch-tender by the respondents in the switchyard of the Grand Central Station was killed as a result of respondent's negligence.Jury returned a verdict in favor of petitioner.Supreme Court of Missouri reversed the judgment, holding that there was no substantial evidence of negligence to support the submission of the case to the jury.

ISSUE:

RULE:


Whenever facts are in dispute or the evidence is such that fair-minded men may draw different inferences, a measure of speculation and conjecture is required on the part of those whose duty it is to settle the dispute by choosing what seems to them to be the most reasonable inference.

APPLICATION:

CONCLUSION:

We are unable, therefore, to sanction a reversal of the jury's verdict against Frisco's trustees. Nor can we approve any disturbance in the verdict as to Illinois Central.

4. Appeal

Hicks v. United States , 368 F.2d 626, 4th Circuit, United States Court of Appeals, Fourth Circuit, Sobeloff, Circuit Judge, 1966

Case Brief

FACTS:

Damages for the death of Mrs. Greitens.Alleged death was due to the negligence of the doctor on duty at the dispensary in diagnosing and treating her illness.The evidence was insufficient to establish that the doctor was negligent, or that his concededly erroneous diagnosis and treatment was the proximate cause of her death.Husband brought her to the dispensary suffering from intense abdominal pain and continual vomiting which had begun suddenly an hour before.Doctor on duty was summoned who recorded her diagnosis as gastroenteritis.Patient returned to her home and later was pronounced dead.She had a high obstruction.

ISSUE:

Whether the undisputed facts manifest negligence.

RULE:

The standard of care from a general practitioner is such that if he uses ordinary care in reaching his diagnosis, and thereafter acts upon it, he incurs no liability, even if the diagnosis proves to be a mistake in judgment.

APPLICATION:


It would seem that where the symptoms are consistent with either of two possible conditions, one lethal if not attended to promptly, due care demands that a doctor do more than make a cursory examination and then release the patient.Only if a patient is adequately examined, is there no liability for an erroneous diagnosis.By releasing the patient, the dispensary physician made his diagnosis final, allowing no further opportunity for revision.

CONCLUSION:

The physician was negligent in his diagnosis and treatment of the pateint.The examiner did not conform to the required standard of care.The doctor was negligent as a matter of law.

5. Conclusiveness of Judgments

Des Moines Navigation & R. Co. v. Iowa Homestead Co. , 8 S.Ct. 217, Supreme Court of the United States, Mr. Chief Justice Waite, 1887

Case Brief

FACTS:

Action to recover taxes.The decree or judgment referred to is null and void, for the reason that the courts of the US had no jurisdiction of said suit, and no legal power or authority to render said decree or judgment.

ISSUE:

Whether the adjudication by this court, under such circumstances, of the matters then and now at issue was absolutely void for want of jurisdiction.

RULE:

The courts of the US are courts of limited, but not of inferior, jurisdiction. If the jurisdiction be not alleged in the proceedings, their judgments and decrees may be reversed for that cause on a writ of error or appeal; but until reversed they are conclusive between the parties and their privies. But they are not nullities.

APPLICATION:

It must be conceded that they were both Iowa corporations, but the defendants who caused the removal to be made were citizens of NY.To determine whether the suit was removable in whole or in part or not, was certainly within the power of the Circuit Court.


Whether its decision was right, in this or any other respect, was to be finally determined by this court on appeal.

CONCLUSION:

In refusing so to decide, the court failed to give full faith and credit to the decree of this court and this was error.

Module 2Subject Matter Jurisdiction: Federal Question

IV. Subject Matter Jurisdiction

Topic Hornbook

§ 2.1 Overview

subject-matter jurisdiction - Whether the chosen court has the power or competence to decide the kind of controversy that is involved.personal jurisdiction - Focuses on the court's authority to enter a judgment that is binding on the particular defendants involved.

Questions of subject-matter jurisdiction typically are determined by reference to state or federal constitutional provisions or statutes that authorize particular courts to entertain certain categories of controversies.

The most common method of limiting judicial power is by providing that certain courts can adjudicate only controversies involving more than a stated monetary amount or less than a maximum amount.

In either situation, the court in which suit is filed will be deemed to have "original" jurisdiction over the action. Other specifically designated courts will be given "appellate" jurisdiction and to sit to review the decisions of those trial tribunals.

Special rules exist that further allocate cases among the same type of courts within a given judicial system.

The most common purpose of venue rules is to limit the plaintiff's forum choice in order to ensure that the locality of the lawsuit has some logical relationship either to the litigants or to the subject matter of the dispute.

A. State Courts

B. Federal Courts - Diversity of Citizenship


Topic Hornbook

A. FEDERAL SUBJECT-MATTER JURISDICTION

§ 2.2 The Nature of the Federal Courts

Article III. Section 1 - The judicial Power of the United States, shall be vested in one Supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish.

Section 2 - defines the permissible scope of federal judicial power, listing all those areas in which federal subject-matter jurisdiction may be asserted.

supplemental jurisdiction - permitted federal courts to assert jurisdiction over certain state-created claims that could not be entertained in a federal court if sued on separately in order to dispose more fully and effectively of related matters clearly within the federal courts' Article III power.

Article III of the Constitution delineates the possible range of federal subject-matter jurisdiction at any given time.

Federal courts - federal-question cases, diversity-of-citizenship cases, suits in which the U.S. is a party, in admiralty and maritime cases, and in actions between two or more states.

C. Federal Courts - Federal Questions


Article III, Section 2 of the U.S. Constitution extends the judicial powers of the U.S. "to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made under their Authority."

"Federal question jurisdiction is premised on the principle that the federal judiciary should have authority to interpret and apply federal law."

Congress also has enacted special jurisdictional statutes authorizing the federal courts to hear particular kinds of federal claims.

Federal law counterclaims cannot form the sole basis for federal question jurisdiction.

artful pleading - An attempt by the plaintiff to create federal question jurisdiction through the anticipation and inclusion of a federal defense on the face of its complaint in an action brought under the Declaratory Judgment Act.

The general rule is that where it appears from the bill or statement of the plaintiff that the right to relief depends upon the construction or application of the Constitution or laws of


the U.S., and that such federal claim is not merely colorable, and rests upon a reasonable foundation, the District Court has jurisdiction.

A suit brought under the state statute which defines liability to employees who are injured while engaged in intrastate commerce, and brings within the purview of the statute a breach of the duty imposed by the federal statute, should not be regarded a suit arising under the laws of the U.S. and cognizable in the federal court in the absence of diversity of citizenship.

Where a patentee complainant makes his suit one for recovery of royalties under a contract of license or assignment, or for damages for a breach of its covenants, or for a specific performance thereof, or asks the aid of the Court in declaring a forfeiture of the license or in restoring an unclouded title to the patent, he does not give the federal district court jurisdiction of the cause as one arising under the patent laws.

Merrell Dow generated a split in the circuits as to whether Section 1331 requires a federal cause of action for the exercise of federal question jurisdiction or whether the presence of a substantial federal issue suffices.The Supreme Court resolved this split and held that the absence of a federal cause of action is not inevitably fatal to federal jurisdiction.

Notes on Private Rights of Action

Private rights of action refer to "suits brought by private litigants against private persons allegedly action in violation of a statute."Legislation creating an enforceable private right of action may do so either expressly or by implication.

A four-part test for determining whether a private right of action should be implied from a federal statute that does not expressly provide for a private remedy:1. Is the plaintiff "one of the class for whose especial benefit the statute was enacted?"

Does the statute create a federal right in favor of the plaintiff?2. Is there any indication of legislative intent, explicit or implicit, to either create such a

remedy or to deny one?3. Is it consistent with the underlying purposes of the legislative scheme to imply a

remedy for the plaintiff?4. Is the cause of action one traditionally relegated to state law, in an area basically the

concern of the States, so that it would be inappropriate to infer a cause of action based solely on federal law?

Implied private rights of action may also arise under the Constitution itself.

Topic Hornbook

§ 2.3 Federal-Question Jurisdiction


Federal-question jurisdiction stems from the Constitution's provision that the judicial power of the United States "shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority.

Federal-question jurisdiction is premised on the principle that the federal judiciary should have authority to interpret and apply federal law.

The present general federal-question statute is Section 1331 of the Judicial Code.

Osborn v. Bank of the United States - Ingredient TheoryThe first decision interpreting "arising under" addressed soley the constitutional aspect of the problems.It considered the constitutionality of a statute that gave the federal courts jurisdiction over actions involving the Bank of the United States, a federally chartered corporation.The Supreme Court upheld the statute.

Justice Holmes - Creation TheoryWhether federal law created the claim on which the plaintiff is suing.

A federal statute also may permit an action to be brought without necessarily creating any federal substantive law or cause of action.

Claims directly raising constitutional issues or depending for their resolution on constitutional construction clearly fall within the statute.

Section 1331 clearly grants the district courts jurisdiction over civil actions founded upon a claim or right arising under treaties of the United States.

§ 2.4 Federal-Question Jurisdiction - The Well-Pleaded Complaint Rule

The plaintiff's statement of his own cause of action must bge based upon some federal law or the Constitution.

substantiality doctrine - The federal issue raised by the complaint must be a substantial one.Requires a federal court to dismiss for lack of subject-matter jurisdiction whenever the federal claim that is asserted as the basis for jurisdiction is utterly frivolous or without merit.

A plaintiff may not defeat removal by omitting to plead necessary federal questions.

Osborn v. Bank of the United States , 22 U.S. (9 Wheat.) 738, 6 L. Ed. 204, 1824

Case Brief


FACTS:

The Bank of the U.S. brought suit in federal court to enjoin the state auditor of Ohio from collecting from it a tax alleged to be unconstitutional.

ISSUE:

Whether Congress had the constitutional power to confer jurisdiction over these cases pursuant to the "arising under" language of Article III, § 2.Has this legal entity a right to sue?Has this being a right to make this particular contract?

RULE:

The congressional act chartering the bank authorized it "to sue and be sued in any Circuit Court of the United States."

APPLICATION:

That power clearly existed in the actual case, since the bank was alleging that Ohio's attempt to tax it violated the federal Constitution.The right of the plaintiff to sue, cannot depend on the defence which the defendant may choose to set up. His right to sue is anterior to that defence, and must depend on the state of things when the action is brought.

CONCLUSION:

The act of Congress is its foundation. The contract could never have been made, but under the authority of that act.The action still originates in, and is sustained by, that charter.

Louisville & Nashville Railroad v. Mottley , 211 U.S. 149, Supreme Court of the United States, Mr. Justice Moody, 1908

Case Brief

FACTS:

Plaintiffs, while passengers upon the defendant railroad, were injured by the defendant's negligence, and released their respective claims for damages in consideration of the agreement for transportation during their lives, expressed in the contract.

ISSUE:

Whether the act of Congress of June 29, 1906 makes it unlawful to perform a contract for transportation of persons who, in good faith, before the passage of the act, had accepted


such contract in satisfaction of a valid cause of action against the railroad.Whether the statute, if it should be construed to render such a contract unlawful, is in violation of the 5th Amendment of the Constitution of the United States.

RULE:

A suit arises under the Constitution and laws of the United States only when the plaintiff's statement of his own cause of action shows that it is based upon those laws of that Constitution.

APPLICATION:

The court below was without jurisdiction of the cause.There was no diversity of citizenship, and it is not and cannot be suggested that there was any ground of jurisdiction, except the case was a suit arising under the Constitution or laws of the United States.

CONCLUSION:

The application of this rule to the case at bar is decisive against the jurisdiction of the circuit court.

T.B. Harms Co. v. Eliscu , 229 F.2d 823, 2nd Circuit, United States Court of Appeals, Second Circuit, Friendly, Circuit Judge, 1964

Case Brief

FACTS:

The litigation concerns four copyrighted songs. The music was composed by Youmans. He agreed to assign to RKO the recordation and certain other rights during the existence of the copyrights and any renewals. RKO was to employ a writer of the lyrics and to procure the publishing rights in these for Youmans.Youmans could assign the publication and small performing rights to the music and lyrics as he saw fit. RKO employed two lyric writers, Kahn and Eliscu, who agreed to assign to RKO certain rights in a contract. Dreyfus acquired Youmans' reserved rights to the music and was his designee for the assignment with respect to the lyrics. Eliscu then entered into an agreement assigning his rights to the existing and renewal copyrights to Dreyfus in return for certain royalties.When the copyrights were about to expire, proper renewal applications were made by Youmans, Kahn, and by Eliscu. Eliscu assigned his rights in the renewal copyrights to defendant.The district court dismissed the complaint for want of federal jurisdiction.

ISSUE:


Whether or not Eliscu executed the assignment to Dreyfus.

RULE:

Infringement, as used in copyright law, does not include everything that may impair the value of the copyright; it is doing one or more of those things which the Act reserves exclusively to the copyright owner.The Holmes "creation" test - "A suit arises under the law that creates the cause of action."

APPLICATION:

Harms' claim is not within Holmes' definition. The relevant statutes create no explicit right of action to enforce or rescind assignments of copyrights.

CONCLUSION:

An action "arises under" the Copyright Act if and only if the complaint is for a remedy expressly granted by the Act, e.g. a suit for infringement or for the statutory royalties for record reproduction, or asserts a claim requiring construction of the Act, or, at the very lease and perhaps more doubtfully, presents a case where a distinctive policy of the Act requires that federal principles control the disposition of the claim.

Merrell Dow Pharmaceuticals Inc. v. Thompson , 478 U.S. 804, Supreme Court of the United States, Justice Stevens, 1986

Case Brief

FACTS:

Respondents are residents of Canada. Petitioner manufactures and distributes the drug Bendectin. Complaint alleged that a child was born with multiple deformities as a result of the mother's ingestion of Bendectin during pregnancy.Petitioner filed a timely petition for removal from the state court to the Federal District Court. Respondents filed a motion to remand to the state forum on the ground that the federal court lacked subject matter jurisdiction.The District Court denied the motion to remand. It then granted petitioner's motion to dismiss.The Court of Appeals reversed.

ISSUE:

Whether the incorporation of a federal standard in a state-law private action, when Congress has intended that there not be a federal private action for violations of that federal standard, makes the action one "arising under the Constitution, laws, or treaties of the United States."Whether the case falls within the original "federal question" jurisdiction of the federal courts.


RULE:

Federal question jurisdiction would, thus, exist only if plaintiffs' rights to relief depended necessarily on a substantial question of federal law. Plaintiffs' causes of action referred to the FDCA merely as one available criterion for determining whether Merrell Dow was negligent. Because the jury could find negligence on the part of Merrell Dow without finding a violation of the FDCA, the plaintiffs' causes of action did not depend necessarily upon a question of federal law. Consequently, the causes of action did not arise under federal law and, therefore, were improperly removed to federal court.Suit arises under the law that creates the cause of action.A case may arise under federal law where the vindication of a right under state law necessarily turned on some construction of federal law.The settled framework for evaluating whether a federal cause of action lies, some combination of the following factors is present:(1) the plaintiffs are not part of the class for whose special benefit the statute was passed;(2) the indicia of legislative intent reveal no congressional purpose to provide a private cause of action;(3) a federal cause of action would not further the underlying purposes of the legislative scheme;(4) the respondents' cause of action is a subject traditionally relegated to state law.The mere presence of a federal issue in a state cause of action does not automatically confer federal-question jurisdiction.

APPLICATION:

The case does not pose a federal question of the first kind.

CONCLUSION:

The congressional determination that there should be no federal remedy for the violation of this federal statute is tantamount to a congressional conclusion that the presence of a claimed violation of the statute as an element of a state cause of action is insufficiently "substantial" to confer federal-question jurisdiction.The novelty of an FDCA issue is not sufficient to give it status as a federal cause of action; nor should it be sufficient to give a state-based FDCA claim status as a jurisdiction-triggering federal question.A complaint alleging a violation of a federal statute as an element of a state cause of action, when Congress has determined that there should be no private, federal cause of action for the violation, does not state a claim "arising under the Constitution, laws, or treaties of the United States."dissenting:Respondents' right to relief depneded upon the construction or application of the Constitution or laws of the United States.The statutory question is one which discloses a need for determining the meaning or application of the FDCA.


D. Federal Courts - Supplemental Claims and Parties

E. Federal Courts - Removal

F. Challenging Subject Matter Jurisdiction of the Court


1. Direct Attack on a Court's Lack of Subject-Matter Jurisdiction

A lack of subject-matter jurisdiction may be asserted at any time by any interested party, either in the answer, or in the form of a suggestion to the court prior to final judgment, or an appeal, and may also be raised by the court sua sponte. Moreover, the parties may not create the jurisdiction of a federal court by agreement or by consent.

Generally, a court should decide subject-matter jurisdiction issues before anything else, because if is lacking the court must dismiss and other matters need not be determined.

Because both subject-matter and personal jurisdiction are required by the Constitution and affect a federal court's power to adjudicate a case, there is no reason to require a district court to decide subject-matter jurisdiction first.

Obedience to a temporary restraining order is reqwuired, even though the issuing court may lack subject-matter jurisdiction or otherwise may have based its decision on an incorrect view of the law, unless there is no opportunity for effective appellate review of the decree.

2. Collateral Attack on a Judgment for Lack of Subject-Matter Jurisdiction

If the court in the original action determined that it had subject-matter jurisdiction, the permissibility of collateral attack depended on weighing a non-exclusive list of factors:(a) the lack of jurisdiction over the subject matter was clear;(b) the determination as to jurisdiction depended upon a question of law rather than of fact;(c) the court was one of limited and not of general jurisdiction;(d) the question of jurisdiction was not actually litigated;(e) the policy against the court's acting beyond its jurisdiction is strong.

The Restatement (Second) Judgments - The judgment in a contested action, whether or not the question of subject-matter jurisdiction actually was litigated, is beyond collateral attack unless there are no justifiable interests of reliance that must be protected, and:(1) The subject matter of the action was so plainly beyond the court's jurisdiction that its

entertaining the action was a manifest abuse of authority; or(2) Allowing the judgment to stand would substantially infringe the authority of another

tribunal or agency of government; or


(3) The judgment was rendered by a court lacking capability to make an adequately informed determination of a question concerning its own jurisdiction and as a matter of procedural fairness the party seeking to avoid the judgment should have opportunity belatedly to attack the court's subject matter jurisdiction.

The Restatement (Second) of Judgments generally permits collateral attack on the original court's subject-matter jurisdiction, as well as on personal jurisdiction and inadequate notice, to default judgment situations.

It is generally true that a judgment by a court of competent jurisdiction bears a presumption of regularity and is not thereafter subject to collateral attack. But Congress, because its power over the subject of bankruptcy is plenary, may be specific bankruptcy legislation create an exception to that principle and render judicial acts taken with respect to the person or property of a debtor whom the bankruptcy law protects nullities and vulnerable collaterally.

general rule of finality of jurisdictional determinations - A judgment is entitled to full faith and credit - even as to questions of jurisdiction - when the second court's inquiry discloses that those questions have been fully and fairly litigated and finally decided in the court which rendered the original judgment.

Civil Procedure – Module 3Subject Matter Jurisdiction: Diversity and Removal

IV. Subject Matter Jurisdiction


subject-matter jurisdiction - The court's power to hear case because of the nature of the dispute.

Subject-matter jurisdiction in the state courts is determined by the state constitution, state statutes, and judicial decisions.In the federal system, by Article III of the federal Constitution, federal statutes, and judicial decisions.

removal jurisdiction - Allows the defendant a limited right to transfer a case from state to federal court.

28 USC § 1332 - Cases in the federal courts based solely on diversity of citizenship must involve more than $75,000.

Topic Lectures

Subject Matter Jurisdiction


Art 3 created courts and jurisdiction of courts. Jurisdiction cannot be extended, but can be limited.

Hypo:We have a contract between us. We live in the same state. Contract value is $25K. We disagree on the terms and want the judge to interpret it for us. We don't like the state judges and want to go to federal court. We agree to do so, and agree that we have jurisdiction and won't challenge it.Can we do this?No. Must be over $75K and cannot be given to court simply by agreement.If no one challenges it, who will raise subject matter jurisdiction?The Court will decide it on its own (sua sponte). Subject matter jurisdiction can be raised at any time during the litigation.

Federal question jurisdiction comes from 28 USC 1331.

What is the standard to establish federal question jurisdiction?The case must be one that "arises under" the federal law from the plaintiff's complaint.

Holmes Creation Test - Claim has to have a cause of action and a remedy under federal law in order for it to "arise under" federal law for the purpose of federal question jurisdiction.

Well-Pleaded Complaint Rule - The plaintiff must demonstrate this in their complaint.

Hypo:PB&J eaters plan to march on Capital to protest high pb costs. Can't get a permit to march, but say they will regardless. Attorney General files in federal court seeking an injunction to stop the rally because of no permit. Defense files claiming 1st Amendment right and that federal court does not have subject matter jurisdiction.Is there subject matter jurisdiction?No. The complaint is not based on a federal law, but merely anticipates a defense using federal law, which is insufficient.

Topic Hornbook

A. State Courts


Unless Congress allocates jurisdiction to hear a claim exclusively to the federal courts, a state court is presumed to have concurrent jurisdiction and may entertain the action even though it is based entirely on federal law.

Lacks v. Lacks , 390 N.Y.S.2d 875, New York, New York Court of Appeals, Breitel, Chief Judge, 1976


Case Brief

FACTS:

The parties were married. After an apparently turbulent marriage, the husband began this action for a separation on the ground of cruelty.After nonjury trial, Supreme Court dismissed the complaint, but the Appellate Division reversed and ordered a new trial. At the second trial, the husband added a prayer for a judgment of absolute divorce. The husband was granted a judgment of divorce. The judgment was affirmed by the Appellate Division.Defendant moved to vacate the judgment, contending that the court had been without subject matter jurisdiction to entertain the divorce action.

ISSUE:

RULE:

CPLR 5015 - designed to preserve objections so fundamental to the power of adjudication of a court that they survive even a final judgment or order.Absence of competence to entertain an action deprives the court of "subject matter jurisdiction"; absence of power to reach the merits does not.§ 230 of the Domestic Relations Law - An action for divorce on separation may be maintained only when the residence requirements are met.

APPLICATION:

CPLR 5015 is inapplicable, and Special Term erroneously vacated the final judgment.The litigation having gone to final judgment, the right to review by appeal having been exhausted, that is and should be the end of the matter.

CONCLUSION:

The order of the Appellate Division should be affirmed.

B. Federal Courts - Diversity of Citizenship


Article III, § 2 of the US Constitution extends the judicial power of the US to controversies "between Citizens of different States and between a State, or the Citizens thereof, and Foreign States, Citizens or Subjects."

28 USC § 1332 - "Diversity" jurisdiction allows the federal courts to hear cases in which the claims arise solely under state law, so long as constitutional and statutory requirements are satisfied.


the rule of "complete diversity" - There is no diversity jurisdiction if any plaintiff is a citizen of the same state as any defendant, no matter how many parties are involved in the litigation.

The origin and purposes of diversity-of-citizenship jurisdiction was the desire to avoid discrimination against out-of-state residents in state courts.

1. Determining Citizenship

Under § 1332, a corporation, unlike a natural person, can be a citizen of more than one state.A corporation is a citizen of:(1) the state(s) in which it is incorporated and(2) the state in which it has its principle place of business.

Three different tests are used to locate a corporation's principle place of business:(1) the "nerve center" test - The locus of corporate decision-making authority and overall control constitutes a corporation's principle place of business for diversity purposes.(2) the "corporate activities" or "operating assets" test - The location of a corporation's production or services activities.(3) the "total activity" test - A hybrid of the "nerve center" and "corporate activities" tests. Considers all the circumstances surrounding a corporation's business.

An unincorporated association is not treated as a citizen for purposes of federal diversity jurisdiction, but instead courts consider the citizenship of each of its members.Unincorporated associations include such entities as partnerships, labor unions, and charitable organizations.

For purposes of diversity jurisdiction, a limited partnership is not a citizen of the state under whose laws it is created. Instead, its citizenship is determined by the citizenship of each of its partners.

§ 1332(a) - For purposes of diversity jurisdiction "an alien admitted to the United States for permanent residence shall be deemed a citizen of the State in which such alien is domiciled."

§ 1332(c) - The legal representative of the estate of a decedent shall be deemed to be a citizen only of the same State as the decedent, and the legal representative of an infant or incompetent shall be deemed to be a citizen only of the same State as the infant or incompetent.

A federal court in its determination of whether there is a diversity of citizenship between the parties, must disregard nominal or formal parties to the action, and determine jurisdiction based solely upon the citizenship of the real parties to the controversy. A real party in interest defendant is one who, by the substantive law, has the duty sought


to be enforced or enjoined.A formal or nominal party is one who, in a genuine legal sense, has no interest in the result of the suit, or no actual interest or control over the subject matter of the litigation.

2. Amount in Controversy

The test for determining whether the plaintiff has met the amount-in-controversy requirement:The sum claimed by the plaintiff controls if the claim is apparently made in good faith.It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal.When applying this test, a court must look at the circumstances at the time the complaint is filed.

Single plaintiffs can aggregate claims against single defendants.Two plaintiffs may not aggregate if they have separate and distinct claims.If there is a single indivisible harm, plaintiffs may aggregate.

Determining the amount in controversy in diversity cases seeking injunctive relief:1. the "plaintiff viewpoint" rule - Only the value to the plaintiff may be used to determine the jurisdictional amount.Jurisdiction is present if the value to the plaintiff exceeds the required amount regardless of the value to the defendant.2. View the amount in controversy from the point of view of the party seeking to invoke federal jurisdiction.3. the "either viewpoint" rule - We may look to the object sought to be accomplished by the plaintiff's complaint; the test for determining the amount in controversy is the pecuniary result to either party which the judgment would directly produce.

judicially created exceptions - Even if the requirements of diversity jurisdiction are met, a federal court generally will decline to hear probate matters and domestic-relations cases and instead dismiss for lack of subject-matter jurisdiction.

Topic Lectures

Diversity JurisdictionA means of establishing federal subject matter jurisdiction.Based on 28 USC 1332.

Three main requirements:1. Opposing parties must be from different states.2. Good faith claim of over $75K.3. Parties must have U.S. and state citizenship.

Residence of individuals is determined by their domicile and the intent to remain at that location. Can be determined by voting or car registration, other personal property,


employment, etc. Determined on the day the lawsuit is filed.

Diversity for CorporationsDepends on state where incorporated, principle place of business. Principle place of business is determined by "nerve center" (where decisions are made), "muscle" (where most production is done) and "activities" tests.In essays, apply all three unless told that one applies.

Amount in ControversyIncreased over time, currently in excess of $75K - Good faith test.A court will not dismiss a claim for not meeting this requirement unless it can be proven to a legal certainty.

Aggregation/Stacking of claims - only allowed against the same defendant.

Hypo:I'm driving in Mass, and truck in front of me dumps paint on car causing $10K damage. Later, in gas station in Mass, car runs over my foot ending my dancing career, a claim worth $66K.I sue in court in NH. The truck and car are both owned in Mass.Do I have subject matter jurisdiction?No, since the two claims are unrelated and against different defendants.

Removal28 USC 1441.Standards for removal under statute are:1. Action must originally have been able to be brought in federal court;2. Can be removed from a state to a federal court (not vice-versa);3. Limited to civil actions;4. Right of removal is limited to defendants.

Hypo:Plaintiff sues a bagel shop for injuries due to hot coffee served by bagel shop. Not a corporation, sole proprietorship. Bagel shop owner (defendant) lives in NH. Plaintiff lives in FLA. Sues in state court for amount over $75K. Sues based on diversity of citizenship. Bagel shop wants to remove to federal court.Can it be removed?No, since filed originally in state court and was based on diversity of citizenship claim, not based on a bias by state court judges. Removal is usually based on defendant being from out of state and fearing bias against him. Basis for removal must appear in the complaint.

Artfully Plead Doctrine - Concerns removal. Plaintiff seeks to avoid federal court by pleading claims to avoid federal subject matter jurisdiction.

Ruhgas v. Amerithon Oil - Whether a federal court needs to decide subject matter


jurisdiction first when there is a question of personal jurisdiction. Court held that it does not.

Topic Hornbook

A. FEDERAL SUBJECT-MATTER JURISDICTION

Mas v. Perry , 489 F.2d 1396, 5th Circuit, Ainsworth, J., 1974

Case Brief

FACTS:

This appeal arises from a final judgment entered on a jury verdict awarding $5,000 to Mr. Mas and $15,000 to Mrs. Mas for damages incurred by them as a result of the discovery that their bedroom and bathroom contained "two-way" mirrors and that they had been watched through them by the appellant during three of the first four months of their marriage.Appellant made an oral motion to dismiss for lack of jurisdiction.

ISSUE:

RULE:

Complete diversity of parties is required in order that diversity jurisdiction obtain; that is, no party on one side may be a citizen of the same State as any party on the other side.The diverse citizenship among diverse parties must be present at the time the complaint is filed.Jurisdiction is unaffected by subsequent changes in the citizenship of the parties.The burden of pleading the diverse citizenship is upon the party invoking federal jurisdiction and if the diversity jurisdiction is properly challenged, that party also bears the burden of proof.To be a citzen of a State within the meaning of § 1332, a natural person must be both a citizen of the United States and a domiciliary of that State. For diversity purposes, citizenship means domicile; mere residence in the State is not sufficient.A person's domicile is the place of "his true, fixed, and permanent home and principle establishment, and to which he has the intention of returning whenever he is absent therefrom." A change of domicile effected only by a combination of the two elements: (a) taking up residence in a different domicile with (b) the intention to remain there.An American woman is not deemed to have lost her United States citizenship solely by reason of her marriage to an alien (8 USC 1489).

APPLICATION:

Under § 1332(a)(2), the federal judicial power extends to the claim of Mr. Mas, a citizen of France, against the appellant, a citizen of Louisiana.


Since we conclude that Mrs. Mas is a citizen of Mississippi for diversity purposes, the district court also properly had jurisdiction under § 1332(a)(1) of her claim.It is clear that at the time of her marriage, Mrs. Mas was a domiciliary of the State of Mississippi.Mrs. Mas's Mississippi domicile was disturbed neither by her year in Louisiana prior to her marriage nor as a result of the time she and her husband spent at LSU after their marriage, since for both periods she was a graduate assistant at LSU.Until she acquires a new domicile, she remains a domiciliary, and thus a citizen of Mississippi.

CONCLUSION:

For diversity purposes a woman does not have her domicile or State citizenship changed solely by reason of her marriage to an alien.Thus the power of the federal district court to entertain the claims of appellees in this case stands on two separate legs of diversity jurisdiction; a claim by an alien against a State citizen; and an action between citizens of different States.Since the district court had jurisdiction of Mr. Mas's action, sound judicial administration militates strongly in favor of federal jurisdiction of Mrs. Mas's claim.

A.F.A Tours, Inc. v. Whitchurch , 937 F.2d 82, 2nd Circuit, United States Court of Appeals, Second Circuit, Kearse, Circuit Judge, 1991

Case Brief

FACTS:

AFA appeals from a final judgment dismissing for lack of subject matter jurisdiction this diversity action against defendant Whitchurch for misappropriation of trade secrets. The district court summarily dismissed the complaint on the ground that it would not be possible for AFA to prove damages amounting to more than $50,000.AFA operates a travel and tour business. It expended large sums of money and invested significant time and labor to develop a client and customer list, marketing information, and tour information. It regarded this information as confidential trade secrets.Whitchurch was employed by AFA as its exclusive tour escort for the above areas. In that position, Whitchurch was privy to certain of the above confidential information.Whitchurch resigned from AFA, misappropriated the confidential information known to him, and organized his own tour business.The court granted summary judgment in favor of Whitchurch.

ISSUE:

Whether it even had to reach the question of trade secrets, raising sua sponte the question of whether the value of AFA's claims exceeded $50,000, a jurisdictional prerequisite for a diversity action.


RULE:

The district courts have jurisdiction over civil diversity suits where the matter in controversy exceeds the sum or value of $50,000, exclusive of interest and costs. (1988)The rule governing dismissal for want of jurisdiction in cases brought in the federal court is that, unless the law gives a different rule, the sum claimed by the plaintiff controls if the claim is apparently made in good faith. It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify a dismissal.NY law apparently allows the recovery of punitive damages in a trade secrets case if the defendant's conduct has been sufficiently "gross and wanton."The owner of trade secrets may obtain an injunction against their use or disclosure by another in breach of his confidential relationship with the owner.Where the plaintiff seeks injunctive relief, the value of his claim is generally assessed with reference to the right he seeks to protect and measured by the extent of the impairment to be prevented by the injunction. In calculating that impairment, the court may look not only at past losses but also at potential harm.The court must afford the plaintiff an "appropriate and reasonable opportunity to show good faith in believing that a recovery in excess of the jurisdictional amount is reasonably possible."

APPLICATION:

The amount of damages recoverable in an action for misappropriation of trade secrets may be measured either by the plaintiff's losses, or by the profits unjustly received by the defendant.Though AFA did not make an evidentiary showing in support of its contention that the value of its claim exceeded $50,000, it was not afforded a proper opportunity to do so.On the present record, the court could not conclude to a legal certainty that the value of AFA's claims did not exceed the jurisdictional minimum.

CONCLUSION:

We vacate and remand for further proceedings.We conclude that the dismissal on the jurisdictional ground was improper.The record as it existed in the district court did not permit the court to find with legal certainty that the value of AFA's claims did not exceed $50,000.

C. Federal Courts - Federal Questions

Topic Hornbook

§ 2.5 Diversity-of-Citizenship Jurisdiction - In General

The Constitution provides: "The Judicial Power [of the United States] shall extend to Controversies between Citizens of different States, Citizens, or Subjects."


the classical rationale for diversity - The avoidance of actual prejudice to out-of-state litigants in state courts, as well as the elimination of apprehensions and fears of prejudice by out-of-state-litigants, whether justified or not.

Two areas of substantive law in which the federal courts traditionally have refused to exercise jurisdiction, despite the existence of all the necessary ingredients for diversity:1. domestic relations - Federal courts will not adjudicate cases involving marital status.2. probate cases

The burden of pleading the citizenship of each party to an action is on the party seeking to invoke diversity jurisdiction.The citizenship of each part must be alleged affirmatively in the complaint.If and when diversity jurisdiction is challenged, the burden of proof remains on the party invoking federal jurisdiction, and citizenship must be established by a preponderance of the evidence.

In determining whether diversity of citizenship exists, the critical moment is the time at which the suit is commenced. This refers to when the complaint is filed in the district court.Once diversity jurisdiction attaches, it is not impaired by a party's later change of domicile.

§ 2.6 Diversity-of-Citizenship Jurisdiction - Application of Diversity Requirements

The diversity statute confers jurisdiction in general terms on the federal courts in all civil actions between citizens of different states in which the required jurisdictional amount is present.

the rule of complete diversity - There is no diversity jurisdiction when any party on one side of the dispute is a citizen of the same state as any party on the other side.In multiparty suits, the presence of a single plaintiff who is a citizen of the same state as any defendant will defeat diversity.

The scope of diversity jurisdiction is affected further by a procedure known as realignment.The court is obliged to scrutinize the nature of the controversy and, if necessary, to realign the parties to reflect the actual clash of interests in the case. The citizenship of the parties as realigned will determine whether the requisite complete diversity exists.

In deciding whether the litigant should be realigned, an "ultimate interests" test is applied - the goal is to look beyond the pleadings and arrange the parties according to their sides in the dispute.

Two basic requirements that must be satisfied before a person can sue or be sued in the federal courts under diversity jurisdiction:(1) the party must be domiciled within a state. The state citizenship of a natural person is


treated synonymous with an individual's domicile.(2) the party must be a citizen of the United States.

Domicile is defined as residence in fact, combined with the intention of making the place of residence one's home for an indefinite period of time.A person may have only one domicile at any time.A domicile once established continues unless and until a new one is acquired.

Evidentiary factors affecting domicile:1. current residence2. voting or automobile registration3. location of personal or real property or other economic interests, such as businesses4. location of brokerage and bank accounts5. place of employment6. membership in unions, churches, clubs, and other associations7. participation in civic affairs8. a personal declaration of domicile

A married woman, because of the historic legal identity of husband and wife, has been deemed to possess her husband's domicile, even if in fact they live apart.Minors are considered to share the domicile of the parent who is supporting them.Military personnel and prisoners traditionally have been considered to possess the domicile they occupied before enlistment or incarceration.Someone has been adjudged incompetent is presumed to have the domicile that he possessed when last competent, regardless of subsequent moves.

Citizenship of purely nominal or formal parties with no interest in the action is ignored for diversity purposes.

The legal representative of the estate of a decedent shall be deemed to be a citizen only of the same state as the decedent.A legal representative of an infant or incompetent should be deemed a citizen of the same state as the infant or incompetent.

alienage jurisdiction - Persons who do not have American citizenship may invoke federal court jurisdiction by virtue of s§1332(a)(2), providing for jurisdiction over actions between aliens and citizens of a state.A person is deemed an alien - and therefore able to sue or be sued in the federal courts under alienage jurisdiction - only if he or she is a citizen or subject of a foreign nation according to the laws of that country.

§ 1332(a) amendment - An alien admitted to the United States for permanent residence shall be deemed a citizen of the State in which such alien is domiciled.

1844 - A corporation chartered by a state was a citizen of that state for purposes of suing and being sued.


§ 1332(c) (1958) - A corporation is to be deemed a citizen of any state in which it is incorporated and of the state in which it has its principle place of business. A corporation may have dual citizenship.

Three tests for a corporation's principal place of business:1. "corporate nerve center" test - looks to the place where corporate policy is made, the locus of the executive and administrative functions of the corporation.2. "corporate muscle" test - identifies the corporation's principal place of business with the site of its major production or service activities, which generally is equivalent to the location of its major corporate assets.3. "corporate activities" test - A hybrid of the other two and considers all the circumstances surrounding a corporation's business to decide what is its principal place of business.

"forum doctrine" - This doctrine dictates that if a corporation is a litigant in a federal court in one of the states of its incorporation, it is to be considered a citizen of only that state in determining the existence of diversity.

An alien corporation has been considered a citizen solely of the foreign nation in which it was incorporated.For diversity purposes, only the country of a foreign corporation's incorporation is relevant.

§ 2.7 Diversity-of-Citizenship Jurisdiction - Devices to Create and Destroy Diversity

An action must be brought by the real party in interest.There is no jurisdiction if the party of record is merely formal or nominal and the real party in interest is a citizen of the same state as the adversary.

anti-collusion statute (§ 1359) - A district court shall not have jurisdiction of a civil action in which any party, by assignment or otherwise, has been improperly or collusively made or joined to invoke the jurisdiction of such court.

If the assignee is only a nominal party, with the assignor retaining an actual, substantial interest in the suit, a court likely will find the assignment is collusive.A purported assignment probably will be held collusive, and therefore invalid for diversity purposes, when the assignee merely functions as a collection agent for the assignor.

fraudulent joinder - to join as a defendant a party of the same citizenship as the plaintiff. A joined, nondiverse defendant has no real connection with the litigation.

§ 2.8 Amount-in-Controversy Requirements

The Judiciary Act of 1789 imposed a $500 amount-in-controversy requirement.In 1958 it was raised to more than $10,000.


In 1988, Congress raised the jurisdictional amount to more than $50,000.In 1996, the amount-in-controversy requirement was increased again to its present level of more than $75,000.

The amount-in-controversy requirement applied to both general federal-question jurisdiction and diversity jurisdiction until 1980 when it was eliminated for almost all federal-question cases.

Under the diversity statute, jurisdiction can be invoked only if the matter in controversy exceeds the sum or value of $75,00, exclusive of interest and costs.Attorney fees, if they are provided for either by statute or by a contract upon which the suit is being brought, can make up part of the jurisdictional amount.Interest that is a part of the principal claim at the time it arose also is outside the exclusion.

Test for amount-in-controversy:The sum claimed by the plaintiff controls if the claim is apparently made in good faith.It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal.The inability of plaintiff to recover an amount adequate to give the court jurisdiction does not show his bad faith or oust the jurisdiction.Events occurring subsequent to the institution of suit which reduce the amount recoverable below the statutory limit do not oust jurisdiction.

The plaintiff has the burden of pleading an amount in controversy greater than the statutory minimum, but may discharge the burden by a simple formal allegation to that effect. Legal certainty is equated with the plaintiff's good-faith allegations of injury.

equitable relief issue - The general rule governing suits for injunctions is that jurisdiction is to be tested by the value of the right sought to be protected against the defendant's interference.

plaintiff's viewpoint doctrine - The jurisdictional amount is to be tested by the value to the plaintiff of the object that is sought to be gained.

A court will not consider injuries that are merely remote, speculative, or collateral in computing the amount in controversy.

D. Federal Courts - Supplemental Claims and Parties

Topic Hornbook

§ 2.9 Amount-in-Controversy Requirements - The Effect of Additional Claims and Additional Parties

When a single plaintiff sues a single defendant, the plaintiff may aggregate several claims for the purpose of satisfying the jurisdictional-amount requirement, whether or not the


claims bear any relation to one another.when two plaintiffs each have a jurisdictionally insufficient claim against a single defendant, on the other hand, aggregation is not permitted if the claims are "separate and distinct."Similarly, when a single plaintiff sues multiple defendants on separate and distinct claims, the claim against each defendant must be jurisdictionally sufficient: aggregation is not permitted unless the defendants are jointly liable to the plaintiff.

The resolution of jurisdictional questions involving claims presented by defending parties turns on whether the claims fall within the supplemental jurisdiction of the federal court hearing the original claim. If they do, they do not need to satisfy jurisdictional-amount requirements. Otherwise, the normal standards for satisfying the amount-in-controversy requirement apply.

§ 2.10 Actions in Which the United States Is a Party and Admiralty and Maritime Cases

The two other major areas of federal judicial power are cases involving the United States and admiralty and maritime cases.

§ 1345 - The district courts shall have jurisdiction, except as otherwise provided, in all civil actions, suits or proceedings commenced by the United States, or by an agency or officer thereof expressly authorized to sue by Act of Congress. There is no statutory amount-in-controversy requirement.It cannot lend its name to a lawsuit that is brought solely for the benefit of a private individual.Unless a statute expressly and unequivocally waives sovereign immunity in its text, Congress has not granted consent to the bringing of an action against the federal government.

§ 1333 - Provides for original jurisdiction over any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled.If federal admiralty jurisdiction is invoked, there are no requirements of diversity of citizenship or a minimum amount in controversy.

The two fundamental sources of admiralty jurisdiction:(1) events occurring on certain types of waters encompassed by the constitutional grant;(2) particular classes of disputes historically governed by maritime law and adjudicated in admmiralty courts.

For a case to fall within admiralty jurisdiction, there generally must be some nexus between the alleged wrong and maritime activity.

E. Federal Courts - Removal



Removal jurisdiction gives a defendant who has been sued in a state court the right to veto plaintiff's forum choice by transferring the action to federal court, but generally "only if the federal court would have had jurisdiction to entertain the case if the plaintiff had chosen to go there originally."

In a case involving parties of diverse citizenship, removal protects a nonresident defendant against any local bias that might be encountered in the state court because of the defendant being a "foreigner."

Current removal statutes is 28 USC § 1441.

Third-party defendants may not remove an action to federal court.

A plaintiff may not defeat diversity jurisdiction by fraudulently joining a defendant against whom the plaintiff has no cause of action.

The doctrine of artful pleading prevents a plaintiff from disguising a federal cause of action that would make the case removable.

A version of artful pleading mandates that certain causes of action are so exclusively federal in character that even if the plaintiff does not plead them, they will completely preempt any state cause of action and make any cause of action the plaintiff attempts to plead federal, and therefore, removable.

§ 1441(b) permits a defendant to remove a federal question action when plaintiff has commenced it in a state court of competent jurisdiction and presumably is content to have it adjudicated in a local forum.

The same provision also prevents a defendant from removing an action that could be filed as an original matter in federal court under the diversity statute if that party is a "citizen of the State in which such action is brought."

Generally, all defendants, other than nominal parties, must join in the petition for removal.The exception is when removal is on the basis of a separate and independent claim.

If a case is removed erroneously, a federal court must remand it to the state court.

§ 1447(d) states that an "order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise," except in civil rights cases removed pursuant to § 1443.

§ 1441(e) provides special removal rules for multi-party "single accident" actions. The new removal provision is designed to encourage consolidation of all related claims arising from an accident in which at least 75 individuals die.


the "derivative jurisdiction" principle - Removal was not permitted because there was, legally speaking, no action pending in the state court and hence no action which could be removed to the federal court.

§ 1441(e) - Rejects this limitation and makes clear "that a federal court's removal jurisdiction over a claim is not predicated upon the state court having subject matter jurisdiction over that claim."

§ 1453 (Class Aciton Fairness Act of 2005) - provides for the removal of interstate class actions to federal court.

Topic Hornbook

§ 2.11 Removal Jurisdiction

Removal jurisdiction permits a defendant to force the plaintiff to litigate certain actions in federal court, rather than in the state forum originally selected. In a case involving parties of diverse citizenship, removal protects a nonresident defendant against any local bias that might be encountered in the state court because of the defendant being a "foreigner."

The Constitution contains no mention of removal jurisdiction.

§ 1441 - An action is removable only if it originally could have been brought in a federal court.Cases may be removed only from a state to a federal court.The general removal statute is limited to civil actions.The right of removal is limited to defendants.

Once a case is properly removed, the plaintiff may not defeat federal jurisdiction by reducing the claim to less than the jurisdictional amount or by joining a nondiverse party.

artful pleading doctrine - which bars a plaintiff from defeating removal by omitting to plead necessary federal questions. If a court concludes that a plaintiff has artfully pleaded her claims, it may permit removal despite the well-pleaded complaint rule.

The artful pleading doctrine is confined to two situations:(1) when Congress has made it clear that federal law in a certain area completely preempts corresponding state law and has replaced it with a federal claim, and(2) when a state cause of action actually turns on a substantial federal question.

Historically, removal also required that the state court in which the action was commenced have had original jurisdiction over the action.§ 1441(e) - The federal court is not precluded from hearing and determining any claim in such civil action because the state court did not have jurisdiction over that claim.


A state may not restrict or limit a litigant's right of removal in any way.

§ 1441(b) - A case can be removed on the basis of diversity only if none of the defendants is a citizen of the forum state.

Removability is determined from the record as of the time the notice of removal is filed. When diversity is the basis of removal jurisdiction, it must exist both at the time the original action is filed in the state court and the time removal is sought.

An action that is initially nonremovable may become removable as a result of the plaintiff's subsequent action.

§ 1441(c) - The current statute allows removal of the entire action whenever a separate and independent [nondiversity] claim or cause of action is joined with one or more otherwise non-removable claims or causes of action. The court is given discretion to take the entire case or to remand all matters in which State law predominate.

Where there is a single wrong to plaintiff, for which relief is sought, arising from an interlocked series of transactions, there is no separate and independent claim or cause of action under § 1441(c).

The procedure followed by a defendant who wishes to remove a state action is dictated by § 1446 of the removal statute:1. The removing defendant files a notice of removal (usually within 30 days after receiving the complaint) with the federal district court for the district or division in which the action is pending setting out the facts that justify removal.2. Defendants also must give written notice of removal to the palintiff and file a copy of the notice with the state court.3. A plaintiff who wishes to challenge the defendant's removal of an action does so by filing a motion to remand in the federal court to which the action has been removed.

The defendant may waive the right to remove by taking some substantial defensive action in the state court before petitioning for removal, such as by filing a counterclaim or engaging in discovery.

Borough of West Mifflin v. Lancaster , 45 F. 3d 780, Pratt, Circuit Judge, 1995

Case Brief

FACTS:

Lindsey and Coughanour alleged that security guards at a mall "harassed, threatened, and assaulted" them. When they requested help from the police, Office Evan responded to the call. However, he refused to admonish the guards, and told Lindsey and Coughanour that if they ever returned to the mall, he would arrest them.


Lindsey and Coughanour returned to the mall and were accosted by security guards and arrested by Officer Evan. They subsequently were convicted on charges stemming from the incidents on the mall. Superior Court of PA vacated the convictions and discharged them.Lindsey and Coughanour then filed a complaint alleging that they had been maliciously abused and prosecuted.The municipal defendants claimed to remove the case to the US District Court. Lindsey and Coughanour moved to remand.District Judge granted the motion to remand the entire case.

ISSUE:

Whether the state claims can be said to "substantially predominate in terms of the scope of the issues raised."

RULE:

§ 1441(c) (prior to 1990) - Whenever a separate and independent claim or cause of action, which would have been removable if sued upon alone, is joined with one or more otherwise non-removable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, remand all matters not otherwise within its original jurisdiction.§ 1441(c)(Judicial Improvements Act of 1990) - Whenever a separate and independent claim or cause of action within the jurisdiction of s§1331 of this title is joined with one or more otherwise non-removable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters in which State law predominates.§ 1441(c) provides for removal or remand only where the federal question claims are "separate and independent" from the state law claims with which they are joined in the complaint. However, where there is a single injury to plaintiff for which relief is sought, arising form an interrelated series of events or transaction, there is no separate or independent claim or cause of action under § 1441(c).

APPLICATION:

Lindsey and Coughanour rely on the same series of events for all counts of their complaint, including the federal § 1983 count; therefore, the federal claim is not separate and independent under § 1441(c), and the district court had no authority to remand the case under that section.The discretion bestowed by § 1367(c) exists with respect to removed claims as well as claims filed initially in the district court, it is apparent that the district court has not exercised that discretion in this case.In a case that has been removed from a state court, a remand to that court is a viable alternative to a dismissal without prejudice.It seems unlikely that the plaintiffs' negligence claims against the municipal defendants and the DeBartolo defendants will cause the state issues to "substantially predominate."


We believe it will be the rare case, at least, where the addition of straightforward negligence claims based on the same facts as the constitutional claims will cause the state issues to substantially predominate.

CONCLUSION:

We think it unlikely that either will be able to point to a countervailing interest that would justify bifurcating this case into a federal and a state suit that will essentially duplicate each other.

Civil Procedure – Module 4Personal Jurisdiction: Physical Presence

II. Jurisdiction Over the Parties or their Property


doctrine of personal jurisdiction - The power of a court to enter a judgment against a specific defendant.A court can assert personal jurisdiction only if its power is authorized by statute and does not exceed the limitations of the Due Process Clause of the United States Constitution.

A. Traditional Bases for Jurisdiction


Three types of jurisdiction:1. in personam - the court exercises its power to render a judgment for or against a

person by virtue of his presence within the state's territory or his citizenship there.2. in rem - the court exercises its power to determine the status of property located within

its territory, and the determination of the court is binding with respect to all possible interest holders in that property.

3. quasi-in-rem - the court renders a judgment for or against a person but recovery is limited to the value of property that is within the jurisdiction and thus subject to the court's authority. The dispute that gives rise to an action quasi-in-rem may be related to the property or unrelated to it. In an action quasi-in-rem, the property may be used to satisfy any judgment assessed in the action.

Milliken v. Meyer (1940) - Domicile in the state is alone sufficient to bring an absent defendant within the reach of the state's jurisdiction for purposes of a person judgment by means of appropriate substituted service. The authority of a state over one of its citizens is not terminated by the mere fact of his absence from the state. The state which accords him privileges and affords protection to him and his property by virtue of his domicile may also exact reciprocal duties.

Pennoyer established the important principle that a state's assertion of personal


jurisdiction is limited by the Due Process Clause of the 14th Amendment.

Topic Hornbook

CHAPTER 3 - PERSONAL JURISDICTION

§ 3.1 Overview

Before a court can hear and decide a particular case, it not only must have jurisdiction over the subject matter of the dispute, it also must have jurisdiction over the persons or property involved in the action.

A state cannot exercise adjudicatory authority over a party or a piece of property unless it has both the statutory authority and the constitutionally recognized power to do so.Historically, personal jurisdiction was asserted on the basis of the presence of the person or thing involved in the litigation within the forum's territorial boundaries or the consent of the party. More modern law allows the assertion of personal jurisdiction based upon a review of the relationship that exists among the place where the underlying transaction took place, the parties, and the territory of the state where suit is brought.

A. HISTORICAL DEVELOPMENT OF JURISDICTIONAL DOCTRINE

1. Traditional Bases of Jurisdiction

§ 3.2 The Jurisdictional Categories

When a judgment was entered on the basis of territorial control over the defendant himself, the court was said to be asserting in-personam jurisdiction.

Those cases in which the court exercised jurisdiction over the property itself were deemed jurisdiction in rem.

In-rem jurisdiction was said to operate directly on the property itself, and only indirectly on the claimants. Thus, a judgment rendered by a court proceeding in rem, unlike a judgment in personam, was said not to bind the defendant personally.

attachment jurisdiction - A court would issue a writ of attachment directing the sheriff to seize and hold a defendant's goods in order to secure that defendant's presence at a trial in which personal claims against him were to be adjudicated.

2. The Rule of Physical Presence

§ 3.3 Pennoyer v. Neff

The Supreme Court gave the territoriality concept constitutional approval.


"field theory" of state-court jurisdiction - Every State possesses exclusive jurisdiction and sovereignty over persons and property within its territory. No state can exercise direct jurisdiction and authority over persons or property without its territory.

A state court could enter a binding personal judgment against an unwilling nonresident defendant if, and only if, he was personally served with process within the state or voluntarily appeared before the court.

The Pennoyer Court did not require that the property seized be in any way related to the plaintiff's claim. It did, however, limit a plaintiff's recovery against a defaulting nonresident defendant to the value of the property that could be found and attached within state boundaries.

3. Jurisdiction Over Persons: Exceptions to the Rule of Physical Presence

§ 3.4 The Presence Test: Some Problems and Limitations

The Pennoyer rule of presence allowed the physical presence of a defendant in the forum to be a sufficient basis for acquiring personal jurisdiction over that individual, no matter how brief his stay might be.

In order to assert in-personam jurisdiction over a corporation, the courts had to determine when a corporation was "physically present" in a particular forum.Because the chartering state was deemed to have power over the corporations it had created and subjected to its control, domestic corporations could be sued in the states of their incorporation in connection with any cause of action.

§ 3.5 Jurisdiction Based on Consent

A defendant not physically present in the state may consent to the jurisdiction of its courts. Consent may be given before or after a suit has been instituted, or by virtue of filing a court action.

A defendant may stipulate to the jurisdiction of the court in advance of litigation; in this way express consent is given.

Parties also may contract specifically that any dispute arising out of their contract will be adjudicated in the courts of a particular place.

A state in effect could require a corporation to appoint an agent for service of process as a condition of conducting certain activities within the forum.

implied consent theory - By virtue of conducting business within the forum, the corporation was deemed to have impliedly appointed an agent designated by the state -such as the Secretary of State - to receive service of process on its behalf for any dispute arising out of its activities within the state.


Hess v. Pawloski (1927) - A state could legislate that a nonresident motorist using its highways be deemed to have appointed a local official his agent to receive service of process in any action growing out of the use of the vehicle within the state, provided the statute required that the defendant be notified of the service on the official.

Implied consent did not extend to the "mere transaction of business" according to the Court in Hess v. Pawloski.

Motions of waiver will act as implied consent.

§ 3.6 Jurisdiction Based on Domicile and Residence

An individual defendant's domicile was the first exception to the Pennoyer rule of physical presence.

Domicile was determined by two factors:(1) the intent of an individual to make a particular location a permanent home, and(2) facts indicating that the party had physically been located there.

§ 3.7 Jurisdiction Based on Corporate Presence and "Doing Business"

the "doing business" notion of jurisdiction - Initially, a corporation was held to be subject to a court's jurisdiction only in the state of its incorporation, beyond which it could have no legal existence.

A foreign corporation should be amenable to process absent consent only if it was doing enough business within the state to justify the inference that it was present there.Corporate presence had to be evidenced by continuous dealings in the state.Personal jurisdiction over a corporation was not necessarily supported by the temporary presence of corporate personnel conducting business in the state.If the corporation was found to be present, jurisdiction would be sustained on claims unrelated to its local business dealings.Once a corporation ceased to do continuous business in a state, it no longer was present for purposes of acquiring jurisdiction over it.

Regular purchases within a state were held not to constitute doing business, but solicitation of business combined with some other business activity did.

4. Jurisdiction Over Property

§ 3.8 In-Rem and Quasi-in-Rem Jurisdiction: Traditional Doctrine

In Pennoyer v. Neff, the Supreme Court declared that the courts of each state had the power to determine the title of property within state borders.In-rem jurisdiction enables the court to determine the status of interests in, or title to


property itself.In-rem judgments are effective "against all the world."

A state can assert jurisdiction to dissolve a marriage if either spouse is domiciled there.In these cases, due process requires that the absent spouse be served with proper notice of the proceedings.

Quasi-in-rem actions are brought against known person, rather than against property. By asserting quasi-in-rem jurisdiction, plaintiffs seek to subject certain property of those persons to the discharge of the claims asserted.A quasi-in-rem judgment affects only the interests in designated property of known persons who are parties to the proceedings.

A court may invoke quasi-in-rem jurisdiction:(1) over specific property when a plaintiff seeks to secure a preexisting claim in the property and (2) to extinguish or establish the nonexistence of other similar claims to the same property.

attachment jurisdiction - The plaintiff seeks to acquire jurisdiction over the defendant's property within the forum as a substitute for in-personam jurisdiction over the defendant's person, typically because the nonresident defendant is not present in the forum.The plaintiff seeks to use local property belonging to the defendant as a jurisdictional vehicle for litigating a personal claim unrelated to the property.

A quasi-in-rem judgment is strictly limited to the value of the property upon which the court's jurisdiction is based.The court's power in quasi-in-rem actions also is limited by the fact that its judgment will not be given binding or res-judicata effect in a subsequent action on the same personal claim.

§ 3.9 Problems With Traditional Doctrine: Quasi-in-Rem Jurisdiction Under Stress

Pennoyer v. Neff - If the defendant was physically present within the state and personally served, in-personam jurisdiction could be asserted over him.If the defendant's property was physically present in the state, it could be attached at the commencement of the proceedings and quasi-in-rem jurisdiction acquired over the defendant, making him liable for a judgment no greater than the value of the property once he received proper notice of the action.

International Shoe Co. v. Washington shifted the focus of in-personam jurisdiction form a state's physical power over the defendant to the defendant's minimum contacts with the state.In Hanson v. Denckla, the Supreme Court placed a limit on the expansion of a purposeful affiliation between the defendant and the forum.


At common law, the situs of stock was considered to be the domicile of the corporation.

§ 13 of the Uniform Stock Transfer Act - The situs of the stock, for attachment purpose, is where the certificate is found.

Harris v. Balk - The situs of a debt is wherever the debtor is located.

An intangible obligation to repay a debt "clings to and accompanies the debtor wherever he goes."

Pennoyer v. Neff , 95 U.S. 714, Supreme Court of the United States, Mr. Justice Feld, 1877

Case Brief

FACTS:

An action to recover the possession of a tract of land situated in Oregon.At the time the action was commenced and the judgment rendered, the defendant therein, the plaintiff here, was a non-resident of the State.

ISSUE:

RULE:

The Code of Oregon provides for service when an action is brought against a non-resident and absent defendant, who has property within the State. It also provides, where the action is for the recovery of money or damages, for the attachment of the property of the non-resident. And it also declares that no natural person is subject to the jurisdiction of a court of the State, "unless he appear in the court, or be found within the State, or be a resident thereof, or have property therein; and in the last case, only to the extent of such property at the time the jurisdiction attached."The authority of every tribunal is necessarily restricted by the territorial limits of the State in which it is established.For an order of publication, that certain facts shall appear by affidavit to the satisfaction of the court or judge, defects in such affidavit can only be taken advantage of on appeal, or by some other direct proceeding, and cannot be urged to impeach the judgment collaterally.The provision of the statute requiring proof of the publication in a newspaper to be made by the "affidavit of the printer, or his foreman, or his principal clerk," is satisfied when the affidavit is made by the editor of the paper.proceeding in rem - A direct proceeding against the property for that purpose.Every State possesses exclusive jurisdiction and sovereignty over persons and property within its territory.


APPLICATION:

If, without personal service, judgments obtained against non-residents and absent parties, upon mere publication of process, which, in the great majority of cases, would never be seen by the parties interested, could be upheld and enforced, they would be the constant instruments of fraud and oppression.Substituted service by publication, or in any other authorized form, may be sufficient to inform parties of the object of proceedings taken where property is once brought under the control of the court by seizure or some equivalent act.Such service may answer in all actions which are substantially proceedings in rem.Where the suit is merely in personam, constructive service in this form upon a non-resident is ineffectual for any purpose.

CONCLUSION:

Except in cases affecting the personal status of the plaintiff, and cases in which that mode of service may be considered to have been assented to in advance as hereinafter mentioned, the substituted service of process by publication allowed by the law of Oregon and by similar laws in other States, where actions are brought against non-residents, is effectual only where, in connection with process against the person for commencing the action, property in the State is brought under the control of the court, and subjected to its disposition by process adapted to that purpose, or where the judgment is sought as a means of reaching such property or affecting some interest therein; in other words, where the action is in the nature of a proceeding in rem.The personal judgment recovered in the State Court of Oregon against the plaintiff herein; then a non-resident of the State, was without any validity, and did not authorize a sale of the property in controversy.

B. Expanding the Bases of Personal Jurisdiction


In order to ensure that transient drivers not be beyond jurisdiction when they drove into another state, some states came to condition the use of their roads by out-of-state drivers on consent to the jurisdiction of the state's courts over matters arising from a party's activity within the state.

Topic Lectures

Session 2 Recording

Original basis (Pennoyer v. Neff) was based on being within territorial boundaries.

Three questions:1. Is there a traditional base of jurisdiction? a. Tagging - Physical presence in the state is a traditional base


b. Domicile c. Agents d. Consent to jurisdiction - express or implied (Hess v. Pawloski), waiver of jurisdiction.2. If we can't, can we get him under a "long arm" statute?

International Shoe Co. v. Washington (1945) - wanted to eliminate traditional bases of jurisdiction. Developed new theory of "minimum contact." You can establish jurisdiction when the defendant has minimum contact with the forum, which will result in fair play and substantial justice. Established first "long arm" statute.

3. Is that assertion of "long arm" jurisdiction constitutional under due process?

Three most important cases for "long arm" jurisdiction:1. International Shoe v. Washington - establishes new rule of "minimum contact."2. Hansen v. Denckla - details minimum contact to be "volitional" and "beneficial."3. World-Wide Volkswagen Corp v. Woodson - car accident took place in OK, but

wanted to sue dealer in NY. Supreme Court ruled foreseeability is not enough. Ruled that defendant must "reasonably apprehend" that it would be "hailed before the courts of OK."

Hypo:Vacationers in CA rent a car and drive North. See billboard for local shop and go visit it. They buy 2 jars of guava jelly, go back to SF, then fly back to NY. Following Sunday in NY, they eat bagels using CA-bought guava jelly. They both get very sick from jelly and decide to sue shop owner in NY jurisdiction.No traditional base for jurisdiction. Jurisdiction applies when someone commits a tortious act in the state. Assume that jelly was defective when bought. Where did tort occur? In CA where sold or where the effect is eventually felt? NY statute defines that it is where the injury occurs, which was NY. Was this statute constitutional? No, according to facts and based on three precedent cases above. Shop owner would not reasonably apprehend that they could be sued in NY.Benchmark of modern jurisdiction questions is fact analysis and application.Vacationers were using an interstate highway in CA. Vacationers were interstate travelers. Shop owners were catering to interstate traffic. Shop owner may have known they were NYers. May increase foreseeability but may not yet able to be reasonably apprehended.Now, if shop was "tourist trap" open to tour buses, then even more likely.If they had a mail order business catering to NY clients, then even closer.If shop ran a periodic ad in NY newspapers, then there would be clear jurisdiction.

Special Aspects of Jurisdiction

general jurisdiction - over person with domicile and a consistent relationship with the state.specific jurisdiction (long arm) - jurisdiction based on a specific event falling within the statute. Can only bring an action based on that specific event.


Potentially a third type of jurisdiction where one party has a contractual arrangement with party in another state. That amount of activity, however, is not the basis for the claim, but "substantially relates" to the actual event even though no specific activity in one state caused the harm in the other.

Asahi Metal Industry Co. v. Superior Court (1987) - Exploding tire based on parts supplied by multiple parties coming together to put a product in the "stream of commerce." Courts were split on decision as to whether or not stream of commerce is enough or if more is needed, e.g. advertising. No decision has yet been made by Supreme Court.

Hess v. Pawloski , 47 S.Ct. 632, Supreme Court of the United States, Mr. Justice Butler, 1927

Case Brief

FACTS:

Action to recover damages for personal injuries. Plaintiff in error negligently and wantonly drove a motor vehicle on a public highway in Massachusetts, and that by reason thereof the vehicle struck and injured defendant in error. Plaintiff in error is a resident of Pennsylvania. No personal service was made on him, and no property belonging to him was attached.The Supreme Judicial Court held the statute to be a valid exercise of the police power.

ISSUE:

Whether the Massachusetts enactment contravenes the due process clause of the 14th Amendment.

RULE:

The acceptance by a nonresident of the rights and privileges conferred as evidenced by his operating a motor vehicle thereunder, or the operation by a nonresident of a motor vehicle on a public way in the commonwealth shall be deemed equivalent to an appointment by such nonresident of the registrar to be his true and lawful attorney upon whom may be served all lawful processes in any action or proceeding against him, growing out of any accident or collision in which said nonresident may be involved while operating a motor vehicle on such a way, and said acceptance or operation shall be a signification of his agreement that any such process against him which is so served shall be of the same legal force and validity as if served on him personally.The process of a court of one state cannot run into another and summon a party there domiciled to respond to proceedings against him. Notice sent outside the state to a nonresident is unavailing to give jurisdiction in an action against him personally for money recovery.There must be actual service within the state of notice upon him or upon some one


authorized to accept service for him.A personal judgment rendered against a nonresident, who has neither been served with process nor appeared in the suit, is without validity.The mere transaction of business in a state by nonresident natural persons does not imply consent to be bound by the process of its courts.

APPLICATION:

In the public interest the state may make and enforce regulations reasonably calculated to promote care on the part of all, residents and nonresidents alike, who use its highways.The state's power to regulate the use of its highways extends to their use by nonresidents as well as by residents.

CONCLUSION:

The difference between the formal and implied appointment is not substantial, so far as concerns the application of the due process clause of the 14th Amendment.

F. New Bases of Jurisdiction - Technological Contacts


the "sliding scale" test - The likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet.

Bellino v. Simon , 1999 WL 1059753, Lousiana, United States District Court, Eastern District of, Vance, J., 1999

Case Brief

FACTS:

Plaintiffs filed an action alleging defamation, fraud and deceptive trade practices by defendants. None of the parties is a resident of Louisiana. FDS is a sole proprietorship with its principal place of business in California. Mr. Bellino also resides in California.Mr. Simon is a NY resident. Mr. Spence is a Pennsylvania resident.Both defendants are engaged in the business of buying, selling, and authenticating sports memorabilia and autographs.Plaintiffs assert that defamatory statements made by Mr. Simon caused the suspension of plaintiffs' business from eBay.Plaintiffs allegedly suffered lost eBay sales and a loss of business reputation in Louisiana and throughout the country.

ISSUE:

Motion by defendants to dismiss this action for lack of personal jurisdiction.


Whether the exercise of jurisdiction satisfies the due process clause.Whether specific jurisdiction exists over Mr. Simon.

RULE:

To determine whether specific jurisdiction exists over a nonresident defendant, the Court must examine whether the defendant purposefully availed himself of the privilege of conducting activities therein and whether the cause of action arises out of or relates to those activities.Minimum contacts may exist not only when a nonresident defendant defames a plaintiff within the state, but also when the defendant acts outside of the state and the "effects" of the defamation are felt within the state.When a cause of action does not arise out of a nonresident defendant's purposeful contacts with the forum state, due process requires continuous and systematic contacts between the defendant and the forum before jurisdiction over the defendant can be exercised.The Court must determine whether the exercise of personal jurisdiction over a nonresident defendant comports with "traditional notions of fair play and substantial justice."In the context of a libel action, plaintiff's residence in the forum State is not a separate requirement, and lack of residence will not defeat jurisdiction established on the basis of defendant's contacts. There is no justification for restricting libel actions to the plaintiff's home forum.

APPLICATION:

Even assuming that Mr. Aubert, a third party, initiated the two telephone calls, Mr. Simon affirmatively directed the allegedly tortious e-mails to Louisiana. That allegedly defamatory comments are made over the Internet does not alter the jurisdictional analysis. At this initial stage in the litigation, the Court must resolve any factual conflicts in plaintiffs' favor.Two sales to Louisiana residents in 1995 and a personal visit to Louisiana for one night in 1991 do not constitute "continuous and systematic" contacts with the forum.Mr. Spence has never owned, leased, rented or controlled any real or personal property in Louisiana; maintained a bank account or paid taxes in Louisiana; maintained a business or an office in Louisiana; or had a mailing address, employees or an agent for service of process in Louisiana.The effect of the tortious activity was felt here, and Louisiana law apples.Although other witnesses may be located outside the forum state, the principal witness in this litigation is Mr. Aubert, a Louisiana resident. Mr. Simon has not shown that he would suffer a breat burden by litigating this case in Louisiana.

CONCLUSION:

Defendants' motion is granted as to Mr. Spence and denied as to Mr. Simon.


With regard to Mr. Spence, the Court finds that plaintiff has not established specific contacts sufficient to support personal jurisdiction over this Pennsylvania resident in Louisiana.This court will not exercise personal jurisdiction based on one unsolicited telephone call from the forum state to a nonresident defendant.Plaintiffs have met their prima facie burden of showing that Mr. Simon purposefully established minimum contacts with Louisiana such that he could reasonably anticipate being haled into court here.Although Mr. Aubert arguably initiated the first telephone call, Mr. Simon sent allegedly defamatory e-mails to Mr. Aubert thereafter. Accordingly, the Court rejects Mr. Simon's "jurisdictional entrapment" defense and contends that sufficient contacts exist to exercise personal jurisdiction over Mr. Simon.The Court has found that sufficient minimum contacts exist to exercise personal jurisdiction over Mr. Simon in Louisiana.Weighing all of these factors, the Court is not persuaded that exercising jurisdiction over Mr. Simon would violate due process.The Court grants defendants' motion to dismiss Mr. Spence from this action but denies the motion to dismiss with regard to Mr. Simon.

G. Jurisction Based Upon Power Over Property


cybersquatting - consists of registering, trafficking in, or using Internet addresses that are identical or confusingly similar to protected trademarks.

Topic Lectures

Session 2 Recording

in rem jurisdiction - applies when property is involved. State has right to decide on ownership.

quasi in rem jurisdiction - event happens in one state, but plaintiff knows defendant owns property in another state, so plaintiff goes to that state, attaches the property for an unrelated claim.

Property includes land, machines, autos, stocks & bonds, bank accounts, data banks, etc.Power that court acquires in these cases is limited to the value of the property.

Shaffer v. Heitner (1977) - Single-share stock owner brought class action suit against Greyhound to Delaware, where Greyhound had no contact. Also sued officers of company in Delaware. Got jurisdiction based on fact that officers owned stock in Delaware where the corporation was incorporated. Plaintiff went to Delaware and attached their stock in Delaware in order to litigate his anti-trust suit. Marshall ruled that all jurisdiction cases are to be tested according to the three original precedents. The mere


presence of property in another state is not enough. Relationship needs to be based on more, such as occasional physical presence.

Burnham v. Superior Court (1990) - Addressed transitory presence issues. "Shoe and progeny" apply to defendants not in that state. Court preserved pure territoriality.

Shaffer v. Heitner , 433 U.S. 186, Supreme Court of the United States, Mr. Justice Marshall, 1977

Case Brief

FACTS:

Appellee, a nonresident of Delaware, is the owner of one share of stock in Greyhound, a business incorporated under the laws of Delaware with its principal place of business in Phoenix, AZ.Heitner alleged that the individual defendants had violated their duties to Greyhound by causing it and its subsidiary to engage in actions that resulted in the corporations being held liable for substantial damages in a private antitrust suit and a large fine in a criminal contempt action. The activities which led to these penalties took place in Oregon.Heitner filed a motion for an order of sequestration of the Delaware property of the individual defendants. The individual defendants were nonresidents of Delaware.None of the certificates representing the seized property was physically present in Delaware. The stock was considered to be in Delaware, and so subject to seizure.All 28 defendants were notified of the initiation of the suit by certified mail and by publication.

ISSUE:

The law of state-court jurisdiction no longer stands securely on the foundation established in Pennoyer. We think that the time is ripe to consider whether the standard of fairness and substantial justice set forth in International Shoe should be held to govern actions in rem as well as in personam.

RULE:

Quasi-in-rem jurisdiction is traditionally based on attachment or seizure of property present in the jurisdiction, not on contacts between the defendant and the State.Under Pennoyer state authority to adjudicate was based on the jurisdiction's power over either persons or property.If a court's jurisdiction is based on its authority over the defendant's person, the action and judgment are denominated "in personam" and can impose a personal obligation on the defendant in favor of the plaintiff.If jurisdiction is based on the court's power over property within its territory, the action is called "in rem" or "quasi in rem." The effect of a judgment in such a case is limited to the property that supports jurisdiction and does not impose a personal liability on the property owner, since he is not before the court.


Property cannot be subjected to a court's judgment unless reasonable and appropriate efforts have been made to give the property owners actual notice of the action.14th Amendment rights cannot depend on the classification of an action as in rem or in personam.The standard for determining whether an exercise of jurisdiction over the interests of persons is consistent with the Due Process Clause in the minimum-contacts standard elucidated in International Shoe.The Full Faith and Credit Clause makes the valid in personam judgment of one State enforceable in all other States.

APPLICATION:

The only role played by the property is to provide the basis for bringing the defendant into court.In such cases, if a direct assertion of personal jurisdiction over the defendant would violate the Constitution, it would seem that an indirect assertion of that jurisdiction should be equally impermissible.The Delaware courts based their assertion of jurisdiction in this case solely on the statutory presence of appellants' property in Delaware.Yet that property is not the subject matter of this litigation, nor is the underlying cause of action related to the property.Appellants' holdings in Greyhound do not, therefore, provide contacts with Delaware sufficient to support the jurisdiction of that State's courts over appellants.Moreover, even if Heitner's assessment of the importance of Delaware's interest is accepted, his argument fails to demonstrate that Delaware is a fair forum for this litigation.Appellants have simply had nothing to do with the State of Delaware. Appellants had no reason to expect to be haled before a Delaware court.

CONCLUSION:

All assertions of state-court jurisdiction must be evaluated according to the standards set forth in International Shoe and its progeny.Delaware's assertion of jurisdiction over appellants in this case is inconsistent with that constitutional limitation on state power.

H. Jurisdiction Based Upon Physical Presence

Topic Lectures

Burnham v. Superior Court , 495 U.S. 604, Supreme Court of the United States, Justice Scalia, 1990

Case Brief

FACTS:


Petitioner and respondent were married in West Virginia and later moved to New Jersey.Mrs. Burnham intended to move to California. She and petitioner agreed that she would file for divorce on grounds of "irreconcilable differences.Petitioner filed for divorce in New Jersey state court on grounds of "desertion."Mrs. Burnham, after unsuccessfully demanding that petitioner adhere to their prior agreement to submit to an "irreconcilable differences" divorce, brought suit for divorce in California state court.Petitioner visited California on business, after which he went to visit his children where his wife resided. Upon returning the child to Mrs. Burham's home, petitioner was served with a California court summons. He then returned to New Jersey.The court held it to be a valid jurisdictional predicate for in personam jurisdiction that the defendant was present in the forum state and personally served with process.

ISSUE:

Whether the Due Process Clause of the 14th Amendment denies California courts jurisdiction over a nonresident, who was personally served with process while temporarily in that State, in a suit unrelated to his activities in the State.Whether due process requires a similar connection between the litigation and the defendant's contacts with the State in cases where the defendant is physically present in the State at the time process is served upon him.

RULE:

The judgment of a court lacking personal jurisdiction violated the Due Process Clause of the 14th Amendment.Due process means a course of legal proceedings according to those rules and principles which have been established in our systems of jurisprudence for the protection and enforcement of private rights including the well-established principles of public law respecting the jurisdiction of an independent State over persons and property.A state court's assertion of personal jurisdiction satisfies the Due Process Clause if it does not violate "traditional notions of fair play and substantial justice."The courts of a State have jurisdiction over nonresidents who are physically present in the State.When proceedings involve merely a determination of the personal liability of the defendant, he must be brought within the court's jurisdiction by service of process within the State, or his voluntary appearance.The validity of assertion of jurisdiction over a nonconsenting defendant who is not present in the forum depends upon whether the quality and nature of his activity in relation to the forum renders such jurisdiction consistent with traditional notions of fair play and substantial justice.A State may dispense with in-forum personal service on nonresident defendants in suits arising out of their activities in the State.

APPLICATION:


That continuing tradition, which anyone entering California should have known about, renders it "fair" for Mr. Burnham, who voluntarily entered California, to be sued there for divorce - at least "fair" in the limited sense that he has no one but himself to blame.

CONCLUSION:

Because the Due Process Clause does not prohibit the California courts from exercising jurisdiction over petitioner based on the fact of in-state service of process, the judgment is affirmed.

I. Consent


A defendant consent to personal jurisdiction either by expressly agreeing to submit to the court or by performing certain acts that constitute a waiver of objections to personal jurisdiction or by failing to assert a defense of lack of jurisdiction.

The possibility of jurisdiction by consent is not limited to situations in which a defendant, in one form or another, consents to jurisdiction in an ongoing action. Frequently, in forming a contract, the parties will draft an express agreement to submit to personal jurisdiction.

Forum-selection clauses will be honored "unless enforcement is shown by the resisting parties to be 'unreasonable' under the circumstances."

Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee , 456 U.S. 694, Supreme Court of the United States, Justice White, 1982

J. Jurisdictional Reach of the Federal District Courts


A federal court, like any court in the United States, can exercise personal jurisdiction over a defendant only if that power is authorized by statute and comports with due process.

doctrine of "pendent personal jurisdiction" - Once a district court has personal jurisdiction over a defendant for one claim, it may 'piggyback' onto that claim other claims over which it lacks independent personal jurisdiction, provided that all the claims arise from the same facts as the claim over which it has proper personal jurisdiction.

A district court may not reach beyond the forum state's long-arm statute merely because doing so would promote efficiency. The court first must find that the additional claim is within the same common nucleus of operative fact as a claim that already falls within the ambit of the forum state's long-arm statute.

Civil Procedure – Module 5


Personal Jurisdiction: Minimum Contacts (General Jurisdiction)



A. Traditional Bases for Jurisdiction

Topic Hornbook

CHAPTER 3 - PERSONAL JURISDICTION

C. New Theory of Jurisdiction


the "consent" theory - A foreign corporation can transact business in a state only with that state's consent.

the "presence" theory - A foreign corporation is amenable to process if it is doing business within the State in such a manner and to such an extent as to warrant the inference that it is present there.

general jurisdiction - A defendant may have sufficient contact with the forum to warrant asserting jurisdiction over it for all matters.specific jurisdiction - A defendant may have sufficient contact with the forum to warrant asserting jurisdiction over it for matters related to its activity with the forum without having sufficient contact with the forum to warrant general jurisdiction.

Topic Hornbook

B. CONTEMPORARY JURISDICTION NOTIONS: IN-PERSONAM JURISDICTION

1. Constitutional Requirements

§ 3.10 The Basic Rule of International Shoe: The Minimum Contacts and Fair Play and Substantial Justice Requirements

Due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice."

The Court's conclusion that the assertion of personal jurisdiction meets due-process requirements when the defendant has minimum contacts with the state is based upon the premise that a nonresident's enjoyment of the privilege of conducting business in the


forum carries with it an obligation to respond to suit there.

Four principles in applying the "minimum contacts" requirement:(1) A defendant is subject to the jurisdiction of the courts in a forum in which its activities have been continuous and systematic; and have given rise to the cause of action sued upon;(2) The sporadic or casual activities of a defendant in the forum, or a single isolated act there, are not enough to subject defendant to suit in the forum on causes of action unrelated to those forum activities;(3) The continuous activity of a defendant within the forum may be of such nature as to subject the defendant to jurisdiction even upon causes of action unrelated to the forum activity; and(4) A defendant's sporadic forum activity, even a single act, may suffice under certain circumstances to render him subject to jurisdiction upon claims arising out of that activity.

Hanson v. Denckla - Held jurisdiction impermissible when the defendants' contact with the forum was negligible, and, more importantly, not purposeful on their part.

general jurisdiction - requires extensive contacts with the forumspecific jurisdiction - only requires the claim against the defendant to be connected to the forum

Three factors that have become recurrent considerations:(1) The interest of the state in regulating the type of activity in which the defendant is engaged in the forum;(2) The interest of the state in providing a convenient forum for its residents; and(3) The relative convenience to the parties of suit in an alternative forum.

International Shoe Co. v. Washington , 326 U.S. 310, Supreme Court of the United States, Mr. Chief Justice Stone, 1945

Case Brief

FACTS:

Notice of assessment for the years in question was personally served upon a sales solicitor employed by appellant and a copy of the notice was mailed by registered mail to appellant.Appellant appeared specially before the office of unemployment and moved to set aside the order and notice of assessment.The motion was heard by the appeal tribunal which denied the motion.Both the Superior Court and the Supreme Court affirmed.

ISSUE:

(1) Whether, within the limitations of the due process clause of the 14th Amendment,


appellant, a Delaware corporation, has by its activities in the State of Washington rendered itself amenable to proceedings in the courts of that state to recover unpaid contributions to the state unemployment compensation fund exacted by state statutes, and(2) Whether the state can exact those contributions consistently with the due process clause of the 14th Amendment.

RULE:

The Act authorizes respondent Commissioner to issue an order and notice of assessment of delinquent contributions upon prescribed personal service of the notice upon the employer by registered mail at his last known address. That section also authorizes the Commissioner to collect the assessment by distraint if it is not paid within 10 days after service of the notice.The defendant's presence within the territorial jurisdiction of a court was prerequisite to its rendition of a judgment personally binding him.Due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not affend "traditional notions of fair play and substantial justice."The demands of due process may be met by such contacts of the corporation with the state of the forum as make it reasonable, in the context of our federal system of government to require the corporation to defend the particular suit which is brought there.

APPLICATION:

Appellant is a Delaware corporation, having its principal place of business in Missouri. It maintains places of business in several states, other than Washington, at which its manufacturing is carried on and from which its merchandise is distributed.Appellant has no office in Washington and makes no contracts either for sale or purchase of merchandise there. It maintains no stock or merchandise in that state and makes there no deliveries of goods in intrastate commerce.There have been instances in which the continuous corporate operations within a state were thought so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.Other such acts, because of their nature and quality and the circumstances of their commission, may be deemed sufficient to render the corporation liable to suit.Whether due process is satisfied must depend rather upon the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure.The activities carried on in behalf of appellant in the State of Washington were neither irregular nor casual. They were systematic and continuous throughout the years in question. They resulted in a large volume of interstate business, in the course of which appellant received the benefits and protection of the laws of the state, including the right to resort to the courts for the enforcement of its rights.

CONCLUSION:


It is enough that appellant has established such contacts with the state that the particular form of substituted service adopted there gives reasonable assurance that the notice will be actual.The state has constitutional power to lay the tax and to subject appellant to a suit to recover it. The activities which establish its "presence" subject it alike to taxation by the state and to suit to recover the tax.

E. General Jurisdiction and State Long-Arm Laws


General jurisdiction encompasses all assertions of jurisdiction that do not quality as assertions of specific jurisdiction.Specific jurisdiction is implicated whenever the defendant's contacts with the forum "relate to" the cause of action.

Topic Hornbook

2. Statutory Requirements

§ 3.12 The Growth and Use of Long-Arm Statutes

Long-arm or single-act statutes predicate jurisdiction over nonresidents upon a variety of contacts with the forum, including the transaction of business in the state, the commission of any one of a series of enumerated acts within the state, such as the commission of a tort, ownership of property, or entry into a contract, or, in some cases, the commission of a particular act outside the forum that has consequences within it.

The statutory language must apply to the cause of action alleged.Even if the statutory language encompasses the particular cause of action at issue, the judicially developed standards that have emerged under the statute must be satisfied.Jurisdiction must be exercised in a manner that is consistent with the federal, as well as any applicable state, constitutional standards.

§ 3.13 Particular Applications of Long-Arm Statutes

A two-step "minimum contacts analysis:(1) A preliminary inquiry into whether the defendant had purposefully established

'minimum contacts' in the forum State. The factors that must be evaluated in a contract case include parties' prior negotiations, the contemplated future consequences of the relationship, the terms of the contract, and the parties' actual course of dealing. If sufficient contacts are present, then the assertion of jurisdiction based on those contacts is presumptively reasonable.

(2) This presumption may be overcome by a showing that the assertion of personal jurisdiction would not comport with notions of "fair play and substantial justice." The


considerations that must be addressed in this fairness determination include the burden on the defendant, the forum state's interest in adjudicating the disupte, the plaintiff's interest in obtaining convenient and effective relief, the interstate judicial system's interest in obtaining the most efficient resolution of controversies, and the shared interest of the several states in furthering fundamental substantive social policies.

Another type of provision that is found in many long-arm statutes authorizes in-personam jurisdiction in actions arising out of an interest in, use, or possession of property in the forum.

Perkins v. Benguet Consolidated Mining Co. , 342 U.S. 437, Supreme Court of the United States, 1952

Case Brief

FACTS:

The defendant, a Phillippine corporation, was sued by a nonresident of Ohio in an Ohio state court on two causes of action arising from activities conducted by defendant outside of Ohio.The Ohio state courts granted defendant's motion to quash the service of summons.

ISSUE:

Whether or not the Due Process Clause of the 14th Amendment prohibited Ohio from exercising jurisdiction.Whether, as a matter of federal due process, the business done in Ohio by the respondent mining company was sufficiently substantial and of such a nature to permit Ohio to entertain a cause of action against a foreign corporation, where the cause of action arose from activities entirely distinct from its activities in Ohio.

RULE:

APPLICATION:

If the same corporation carries on, in that state, other continuous and systematic corporate activities as it did here, those activites are enough to make it fair and reasonable to subject that corporation to proceedings in personam in that state.He carried on in Ohio a continuous and systematic supervision of the necessarily limited wartime activities of the company.

CONCLUSION:

We find no requirement of federal due process that either prohibits Ohio from opening its courts to the cause of action here presented or compels Ohio to do so.


Under the circumstances above recited, it would not violate federal due process for Ohio either to take or decline jurisdiction of the corporation in this proceeding.

Helicopteros Nacionales de Colombia, S.A. v. Hall , 466 U.S. 408, Supreme Court of the United States, Justice Blackmun, 1984

Case Brief

FACTS:

Helicol is a Columbian corporation with its principal place of business in that country. It is engaged in the business of providing helicopter transportation for oil and construction companies in South America.A helicopter owned by Helicol crashed in Peru. Four United States citizens were among those who lost their lives in the accident.At the time of the crash, respondents' decedents were employed by Consorcio and were working on a pipeline in Peru.The venture had its headquarters in Houston, Texas.Respondents instituted wrongful-death actions in Texas. Helicol filed special appearances and moved to dismiss the actions for lack of in personam jurisdiction over it. The motion was denied. The Texas Court of Civil Appeals reversed the judgment of the District Court, holding that in personam jurisdiction over Helicol was lacking.Thew Supreme Court of Texas reversed the judgment of the intermediate court.

ISSUE:

Whether the Supreme Court of Texas correctly ruled that the contacts of a foreign corporation with the State of Texas were sufficient to allow a Texas state court to assert jurisdiction over the corporation in a cause of action not arising out of or related to the corporation's activities within the State.Whether it was consistent with the Due Process Clause for Texas courts to assert in personam jurisdiction over Helicol.Whether the nature of Helicol's contacts constitute the kind of continuous and systematic general business contacts the court found to exist in Perkins.

RULE:

Even when the cause of action does not arise out of or relate to the foreign corporation's activities in the forum State, due process is not offended by a State's subjecting the corporation to its in personam jurisdiction when there are sufficient contacts between the State and the foreign corporation.

APPLICATION:

Aside from the negotiation session in Houston, Helicol had other contacts with Texas - purchasing parts from Bell Helicopter (Texas) and sending pilots to Texas for training.Beyond the foregoing, there have been no other business contacts between Helicol and


the State of Texas. Helicol never has been authorized to do business in Texas and never has had an agent for the service of process within the State.All parties to the present case concede that respondents' claims against Helicol did not "arise out of," and are not related to, Helicol's activities within Texas.The one trip to Houston by Helicol's CEO for the purpose of negotiating the transportation-services contract with Consorcio cannot be described or regarded as a contact of a "continuous and systematic" nature.Helicol's acceptance from Consorcio of checks drawn on a Texas bank is of negligible significance for the purpose of determining whether Helicol had sufficient contacts in Texas.

CONCLUSION:

Mere purchases, even if occurring at regular intervals, are not enough to warrant a State's assertion of in personam jurisdiction over a nonresident corporation in a cause of action not related to those purchase transactions.Helicol's contacts with the State of Texas were insufficient to satisfy the requirements of the Due Process Clause of the 14th Amendment.

G. Jurisction Based Upon Power Over Property

Topic Hornbook

C. CONTEMPORARY JURISDICTION NOTIONS: IN-REM AND QUASI-IN-REM JURISDICTION

§ 3.14 International Shoe Triumphant: A Uniform Standard for Jurisdiction

Shaffner v. Heitner - Held that the International Shoe standard should be applied to the assertion of all forms of jurisdiction.The assertion of jurisdiction violated due process because it was based solely on the seizure of the stock under the sequestration statutes and did not include consideration whether there were other contacts between the defendants and the forum.An exercise of jurisdiction over a thing should be evaluated by the same standard that governs an exercise of jurisdiction over those persons with interests in the thing.All assertions of state-court jurisdiction must be evaluated according to the standards set forth in International Shoe and its progeny.

§ 3.15 International Shoe Applied to In-Rem and Quasi-In_Rem Jurisdiction

When the property within the state is itself the subject matter of the dispute, and encompasses both classic in-rem proceedings and quasi-in-rem proceedings among specific claimants to a piece of property, it would not be unfair the state court to adjudicate this type of dispute in view of the close relationship that necessarily exists among the defendant, the forum, and the litigation.This makes adjudication of these disputes where the property is located in the forum both


convenient and reasonable.Adjudications of status, by their very nature, are fairly made by the state that created the status.

The mere presence of property in the forum constitutes sufficient contact to confer quasi-in-rem jurisdiction occurs when the plaintiff's claim relates to rights and obligations arising out of the nonresident defendant's ownership of local property.

Exercise of jurisdiction in these types of actions necessarily satisfy the Shoe standard because the nonresident defendant's ownership of local property constitutes a purposeful, volitional, and continuous contact with the forum that directly gives rise to the plaintiff's cause of action.

§ 3.16 The Seizure of Property: Requirements and Definition

With quasi-in-rem jurisdiction, the seizure of the property served three purposes:(1) It formally announced that the court had taken custody of the property and thus, any condemnation and sale following adjudication would be backed by authority of law;(2) Seizure reinforced the then customary notice by publication;(3) Seizure assured that the court could control the property and provide a resource against which the plaintiff could enforce the judgment.

I. Consent

Topic Hornbook

D. THE IMPACT OF SHAFFER V. HEITNER ON PENNOYER'S SATELLITES

§ 3.17 The Current Viability of Consent, Domicile, and Transitory Presence Theories

A state may exercise jurisdiction over defendants who have consented to its jurisdiction, who are domiciled within the state, or who have personally been served while transitorily present within the forum state's borders.

Strict application of the doctrine of territorial power would allow full in-personam jurisdiction to be exercised by a state court over an individual personally served in the state even if the defendant was served while only passing through, and even if there was no logical relationship among the defendant, the forum, and the litigation.

J. Jurisdictional Reach of the Federal District Courts

Topic Hornbook

E. AMENABILITY TO SUIT

§ 3.18 Source of Governing Law


Congress has the power to provide that the process of each of the United States district courts should extend into every state of the Union.

Rule 4(k) Paragraph (1) explicitly authorizes the exercise of personal jurisdiction when authorized by a federal statute or when consistent with the long-arm statute of the state in which the district court is located.Paragraph (2) authorizes personal jurisdiction over any defendant who has minimum contacts with the United States as a whole but is not subject to personal jurisdiction on the basis of contacts with any individual state.

The Arrowsmith principle - Amenability of a foreign corporation to suit in a federal court in a diversity action is determined according to the law of the state in which the district court sits.State law also governs amenability questions in removed cases since removal jurisdiction is derivative and thus dependent on the personal jurisdiction of the state court in which the action was commenced.

Civil Procedure – Module 6Personal Jurisdiction: Minimum Contacts (Specific Jurisdiction)


D. Specific Jurisdiction and State Long-Arm Laws


1. The Development of Long-Arm Laws

"long-arm" or "single-act" statutes - Seek to provide personal jurisdiction over nonresidents who cannot be found and served in the forum.

Long-arm statutes apply only to suits brought in the courts of the state in which the jurisdictional act occurs or in the federal courts sitting in that state.

the "effects" test - may be satisfied if the defendant is alleged to have:(1) committed an intentional act;(2) expressly aimed at the forum state;(3) causing harm, the brunt of which is suffered - and which the defendant knows is likely to be suffered - in the forum state.

Topic Hornbook

§ 3.11 Refinements of the Basic Standard: The Requirement of a Purposeful Act and Foreseeability


McGee v. International Life Insurance Co. - It is sufficient for purposes of due process that the suit was based on a contract which had substantial connection with the state's courts.

Hanson v. Denckla - A defendant may not be called upon to do so unless he has had the minimal contacts with that State that are a prerequisite to its exercise of power over him.

World-Wide Volkswagen Corporation v. Woodson - The minimum-contacts standard was designed to perform two functions: to protect the defendant and to ensure that states did not encroach on each other's sovereign interests.The court should look first to a defendant's contacts with the forum. If no contacts are found, it is irrelevant that the defendant would suffer no actual burden by litigating away from home or that the forum chosen is a convenient one because witnesses and evidence are located there.Foreseeability alone, without "affiliating circumstances" by which a defendant avails himself of the privileges and benefits of the forum state's law cannot support jurisdiction.

Gray v. American Radiator & Standard Sanitary Corporation - If a corporation elects to sell its products for ultimate use in another State, it is not unjust to hold it answerable there for any damage caused by defects in those products.Courts may exercise jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State.

Asahi Metal Industry Company v. Superior Court of California - A manufacturer's contacts must be more purposefully directed at the forum State than the mere act of placing a product in the stream of commerce.

Three-step test to determine the constitutionality of asserting specific-personal jurisdiction:(1) Did the defendant purposefully avail itself of the forum state?(2) Did the cause of action arise from the defendant's contacts with the forum state?(3) Would the exercise of personal jurisdiction be reasonable?

Gray v. American Radiator & Standard Santary Corp. , 176 N.E.2d 761, Illinois, Supreme Court of Illinois, Klinbiel, Justice, 1963

Case Brief

FACTS:

The suit was brought on the ground that a certain water heater had exploded and injured the plaintiff.

ISSUE:


Whether a tortious act was committed here, within the meaning of the statute, despite the fact that the Titan corporation had no agent in Illinois.Whether the statute, if so construed, violates due process of law.

RULE:

§ 16 of the Civil Procedure Act provides that summons may be personally served upon any party outside the State; and that as to nonresidents who have submitted to the jurisdiction of our courts, such service has the force and effect of personal service within Illinois.Under § 17(1)(b) a nonresident who, either in person or through an agent, commits a tortious act within this State submits to jurisdiction.In law the place of a wrong is where the last event takes place which is necessary to render the actor liable.Under modern doctrine the power of a State court to enter a binding judgment against one not served with process within the State depends upon (1) whether he has certain minimum contacts with the State, and (2) whether there has been a reasonable method of notification.Where the business done by a foreign corporation in the State of the forum is of a sufficiently substantial nature, it has been held permissible for the State to entertain a suit against it even though the cause of action arose from activities entirely distinct from its conduct within the State.In the application of this flexible test the relevant inquiry is whether defendant engaged in some act or conduct by which he may be said to have invoked the benefits and protections of the law of the forum.

APPLICATION:

The wrong in the case at bar did not originate in the conduct of a servant physically present here, but arose instead from acts performed at the place of manufacture. Only the consequences occurred in Illinois.We think it is clear that the alleged negligence in manufacturing the valve cannot be separted from the resulting injury; and that for present purposes, like those of liability and limitations, the tort was committed in Illinois.§ 16 provides for inadequate notice or that its provisions were not followed.The defendant's only contact with this State is found in the fact that a product manufactured in Ohio was incorporated in Pennsylvania, into a hot water heater, which in the course of commerce was sold to an Illinois customer.It is a reasonable inference that its commercial transactions, like those of other manufacturers, result in substantial use and consumption in this State.If a corporation elects to sell its products for ultimate use in another State, it is not unjust to hold it answerable there for any dammage caused by defects in those products.The principles of due process relevant to the issue in this case support jurisdiction in the court where both parties can most conveniently settle their dispute. The facts show that the plaintiff, an Illinois resident, was injured in Illinois. The law of Illinois will govern the substantive questions, and witnesses on the issues of injury, damages and other


elements relating to the occurrence are most likely to be found here. Under such circumstances the courts of the place of injury usually provide the most convenient forum for trial.

CONCLUSION:

We conclude accoridingly that defendant's association with this State is sufficient to support the exercise of jurisdiction.

McGee v. International Life Insurance Co. , 355 U.S. 220, Supreme Court of the United States, Mr. Justice Black, 1957

Case Brief

FACTS:

Plaintiff McGee was the beneficiary of a life insurance policy issued by Empire Mutual, an Arizona corporation, to Franklin, a resident of California.The defendant assumed Empire Mutual's insurance obligations. Franklin and International Life transacted business by mail. Neither ever had any office or agent in California.International Life had never solicited or done any insurance business in California other than the policy with Franklin.When International Life refused to pay McGee upon Franklin's death, she sued in a California state court.After recovering a judgment in California, McGee sought to enforce the judgment in Texas. The Texas court refused to enforce the judgment.The Supreme Court held that the exercise of jurisdiction by California was proper.

ISSUE:

RULE:

APPLICATION:

The Due Process Clause did not preclude the California court from entering a judgment binding on respondent. It is sufficient that the suit was based on a contract which had substantial connection with that State. The contract was delivered in California, the premiums were mailed from there and the insured was a resident of that State when he died.

CONCLUSION:

Hanson v. Denckla , 357 U.S. 235, Supreme Court of the United


States, Mr. Chief Justice Warren, 1958

Case Brief

FACTS:

Donner, a resident of PA, established a trust in Delaware. During her lifetime the income from the trust would go to her and, upon her death, the remainder would pass to whomever she had appointed as beneficiaries. Donner retained the power to change the appointed beneficiaries at any time.Donner moved to Florida. She executed her last will and testament, leaving most of her estate to two of her daughters.She designated two of her grandchildren beneficiaries of a significant portion of the trust's assets, with the remainder going to her estate.The Florida court found that it had jurisdiction over the trustee for the purpose of the action, concluded that the trust was invalid and that the exercise of the power of appointment was ineffective to pass title, and held that the trust property therefore passed under the will.The Delaware court ultimately held the trust and the exercise of the power of appointment valid under Delaware law.Supreme Court found that because the trustee's contacts with Florida had been less than minimal, that state could not assert personal jurisdiction over it. Since Florida had not obtained personal jurisdiction over an indispensable party to the action, the trustee, Delaware was justified in refusing full faith and credit to the Florida decree.

ISSUE:

RULE:

APPLICATION:

CONCLUSION:

World-Wide Volkswagen Corp. v. Woodson , 444 U.S. 286, Supreme Court of the United States, Mr. Justice White, 1980

Case Brief

FACTS:

Respondents purchased a new Audi automobile from petitioner in NY. The following year, the Robinson family, who resided in NY, left that State for a new home in Arizona. As they passed through the State of Oklahoma, another car struck their Audi in the rear,


causing a fire which severely burned Mrs. Robinson and her two children.

ISSUE:

Whether, consistently with the Due Process Clause of the 14th Amendment, an Oklahoma court may exercise in personam jurisdiction over a nonresident autombile retailer and its wholesale distributor in a products liability action, when the defendants' only connection with Oklahoma is the fact that an automobile sold in NY to NY residents became involved in an accident in Oklahoma.

RULE:

A state court may exercise personal jurisdiction over a nonresident defendant only so long as there exist "minimum contacts" between the defendant and the forum State.The defendant's contacts with the forum State must be such that maintenance of the suit "does not offend 'traditional notions of fair play and substantial justice.'"

APPLICATION:

Seaway and World-Wide are fully independent corporations whose relations with each other and with Volkswagen and Audi are contractual only. Respondents adduced no evidence that either World-Wide or Seaway does any business in Oklahoma, ships or sells any products to or in that State, has an agent to receive process there, or purchases advertisements in any media calculated to reach Oklahoma.The product being sold and distributed by the petitioners is by its very design and purpose so mobile that petitioners can foresee its possible use in Oklahoma.We find a total absence of those affiliating circumstances that are a necessary predicate to any exercise of state-court jurisdiction. Petitioners carry on no activity whatsoever in Oklahoma.It is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.

CONCLUSION:

Because we find that petitioners have no "contacts, ties, or relations" with the State of Oklahoma, the judgment of the Supreme Court of Oklahoma is reversed.

Burger King Corp. v. Rudzewicz , 471 U.S. 462, Supreme Court of the United States, Justice Brennan, 1985

Case Brief

FACTS:

Burger King is a Florida corporation whose principal officers are in Miami. Franchisees are licensed to use its trademarks and service marks in leased standardized restaurant


facilities for a period of twenty years. The governing contracts provide that the franchise relationship is established in Miami and governed by Florida law.Rudzewicz is a Michigan resident who entered into a 20 year franchise contract with Burger King to operate a restaurant in Michigan. When the restaurant's patronage declined, the franchisees fell behind in their monthly payments. Burger King then brought a diversity action in Federal District Court in Florida, alleging that the franchisees had breached their franchise obligations and requesting damages and injunctive relief.

ISSUE:

Whether the defendant purposefully established "minimum contacts" in the forum State.

RULE:

There are several reasons why a forum legitimately may exercise personal jurisdiction over a nonresident who purposefully directs his activities toward forum residents. A State generally has a manifest interest in providing its residents with a convenient forum for redressing injuries inflicted by out-of-state actors. Where individuals purposefully derive benefit from their interstate activities, it may well be unfair to allow them to escape having to account in other States for consequences that arise proximately from such activities.Because modern transportation and communications have made it much less burdensome for a party sued to defend himself in a State where he engages in economic activity, it usually will not be unfair to subject him to the burdens of litigating in another forum for disputes relating to such activity.The foreseeability that is critical to due process analysis is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.

APPLICATION:

No physical ties to Florida can be attributed to Rudzewicz. Rudzewicz dod not maintain offices in Florida and, for all that appears from the record, has never even visted there.In light of Rudzewicz's voluntary acceptance of the long-term and exacting regulation of his business from Burger King's Miami headquarters, the quality and nature of his relationship to the company in Florida can in no sense be viewed as random, fortuitous or attenuated.

CONCLUSION:

We believe there is substantial record evidence supporting the District Court's conclusion that the assertion of personal jurisdiction over Rudzewicz in Florida for the alleged breach of his franchise agreement did not offend due process.Because Rudzewicz established a substantial and continuing relationship with Burger King's Miami headquarters, received fair notice from the contract documents and the


course of dealing that he might be subject to suit in Florida, and has failed to demonstrate how jurisdiction in that forum would otherwise be fundamentally unfair, we conclude that the District Court's exercise of jurisdiction did not offend due process.

Asahi Metal Industry Co. v. Superior Court , 480 U.S. 102, Supreme Court of the United States, Justice O'Connor, 1987

Case Brief

FACTS:

Zurcher lost control of his Honda motorcycle and collided with a tractor, Zurcher was severely injured, and his passenger and wife was killed.Zurcher filed a product liability action in California.Asahi was the manufacturer of the tube's valve assembly.Asahi is a Japanese corporation. It manufactures tire valve assemblies in Japan and sells the assemblies to tire manufacturers.Asahi's sales took place in Taiwan.Approximately 20% of its sales are in California.The Supreme Court of the State of California found the exercise of jurisdiction over Asahi to be consistent with the Due Process Clause.

ISSUE:

Whether the mere awareness on the part of a foreign defendant that the component it manufactured, sold, and delivered outside the United States would reach the forum state in the stream of commerce constitutes "minimum contacts" between the defendant and the forum state such that the exercise of jurisdiction "does not offend 'traditional notions of fair play and substantial justice.'"

RULE:

California's long-arm statute authorizes the exercise of jurisdiction "on any basis not inconsistent with the Constitution of this state of the United States."Minimum contacts must have a basis in "some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws."Jurisdiction is proper where the contacts proximately result form actions by the defendant himself that create a 'substantial connection' with the forum State.The determination of the reasonableness of the exercise of jurisdiction in each case will depend on an evaluation of several factors. A court must consider the burden on the defendant, the interests of the forum state, and the plaintiff's interest in obtaining relief. It must also weigh in its determination the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and the shared interest of the several States in furthering fundamental substantive social policies.

APPLICATION:


The "substantial connection" between the defendant and the forum State necessary for finding of minimum contacts must come about by an action of the defendant purposefully directed toward the forum State. The placement of the product into the stream of commerce, without more, is not an act of the defendant purposefully directed toward the forum State.A defendant's awareness that the stream of commerce may or will sweep the product into the forum State does not convert the mere act of placing the product into the stream into an act purposefully directed toward the forum State.A consideration of these factors in the present case clearly reveals the unreasonableness of the assertion of jurisdiction over Asahi, even apart from the question of the placement of goods in the stream of commerce.The interests of the plaintiff and the forum in California's assertion of jurisdiction over Asahi are slight.

CONCLUSION:

The exertion of personal jurisdiction over Asahi by the Superior Court of California exceeds the limits of due process.Considering the international context, the heavy burden on the alien defendant, and the slight interests of the plaintiff and the forum State, the exercise of personal jurisdiction by a California court over Asahi in this instance would be unreasonable and unfair.Because the facts of this case do not establish minimum contacts such that the exercise of personal jurisdiction is consistent with fair play and substantial justice, the judgment of Supreme Court of California is reversed, and the case is remanded for further proceedings not inconsistent with this opinion.

Civil Procedure – Module 7Personal Jurisdiction: Notice

III. Providing Notice and an Opportunity to be Heard

Topic Lectures

Typical way of giving notice is through a summons.

Mullane v. Central Hanover Bank & Trust - re: notice by publication. The form of notice used must be reasonably calculated under the circumstances to give actual notice.

Opportunity To Be Heard

Required by due process. Major issue in actions for replevin.

Requirements for a writ of replevin (repossession):1. You need a writ issued by a judge2. Must be faced on a factual statement


3. You must post a bond4. Debtor must be given an immediate right to a hearing

Service of Process

In-hand, by mail, publication.

You cannot trick someone into the jurisdiction in order to be served.

Immunities:You cannot serve someone on their sabbath.You cannot serve someone in the jurisdiction to be a witness or other legal proceeding.

A. The Requirement of Reasonable Notice


Another condition imposed by the Due Process Clause is that the parties must have an adequate opportunity to present their side of the case to the court.

Merely posting notice on an apartment door does not satisfy minimum standards of due process.The reasonableness of the notice provided must be tested with reference to the existence of feasible alternatives and supplements to the form of notice chosen.

Topic Hornbook

§ 3.19 The Requirement of Reasonable Notice

The constitutional obligation to provide the defendant with proper notice and an opportunity to be heard is an additional aspect of the due-process limitation on a court's ability to exercise jurisdiction.

In general, the defendant has been provided notice when he has received the set of papers known as "process." Process consists of a summons, which directs the defendant to appear before the court under penalty of default, and, if the applicable procedural rules require, a copy of the complaint.

Service by publication ordinarily is deemed constitutionally insufficient for actions in personam. Publication has been upheld as proper service in actions in personam only when a state domicilary could be served in no other way or when a state resident deliberately concealed herself to avoid service. Notice by email is not permitted except if ordered by a court against a foreign corporation.


Seizure of property owned by the defendant, coupled with publication of a notice of the action, provided constitutionally adequate notice in a proceeding based on in-rem or quasi-in-rem jurisdiction.

Mullane v. Central Hanover Bank & Trust Co - The statutory notice by publication was deemed sufficient only for beneficiaries who were unknown and absent, or whose rights were conjectural when the proceedings were instituted. For present beneficiaries whose names and addresses were known to the trustee, or could be ascertained with reasonable diligence, the Court concluded that no less than notice by mail would be adequate.

The test for notice is "reasonableness under the circumstances of the case."

Mullane v. Central Hanover Bank & Trust Co. , 339 U.S. 306, Supreme Court of the United States, Mr. Justice Jackson, 1950

Case Brief

FACTS:

Under this Act a trust company may, with approval of the State Banking Board, establish a common fund and, within prescribed limits, invest therein the assets of an unlimited number of estates, trusts or other funds of which it is trustee.Central Hanover Bank and Trust Company established a common trust fund in accordance with these provisions.The only notice given beneficiaries of this specific application for judicial settlement of the account was by publication in a local newspaper.The trust company had notified by mail each person of full age and sound mind whose name and address was then known to it.Appellant appeared specially, objecting that notice and the statutory provisions for notice to beneficiaries were inadequate to afford due process under the 14th Amendment, and therefore that the court was without jurisdiction to render a final and binding decree.

ISSUE:

The constitutional sufficiency of notice to beneficiaries on judicial settlement of accounts by the trustee of a common trust fund established under the NY Banking Law.

RULE:

The doctrine of Pennoyer v. Neff states that the Surrogate is without jurisdiction as to nonresidents upon whom personal service of process was not made.The Due Process Clause requires that deprivation of life, liberty or property by adjudication be preceded by notice and opportunity for hearing appropriate to the nature of the case.The fundamental requisite of due process of law is the opportunity to be heard.The requirement of due process is notice reasonably calculated, under all the


circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.The notice must be of such nature as reasonably to convey the required information and it must afford a reasonable time for those interested to make their appearance.

APPLICATION:

It is contended that the proceeding is one in personam in that the decree affects neither title to nor possession of any res, but adjudges only personal rights of the beneficiaries to surcharge their trustee for negligence or breach of trust.Judicial proceedings to settle fiduciary accounts have sometimes been termed in rem, or more indefinitely quasi in rem.Process which is a mere gesture is not due process. The means employed must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it.It would be idle to pretend that publication alone is a reliable means of acquainting interested parties of the fact that their rights are before the courts.Nor is publication here reinforced by steps likely to attract the parties' attention to the proceeding.In the case before us there is, of course, no abandonment.Those beneficiaries represented by appellant whose interests or whereabouts could not with due diligence be ascertained come clearly within this category. As to them the statutory notice is sufficient.Whatever searches might be required in another situation under ordinary standards of diligence, in view of the character of the proceedings and the nature of the interests here involved we think them unnecessary.Where the names and post office addresses of those affected by a proceeding are at hand, the reasons disappear for resort to means less likely than the mails to apprise them of its pendency.The trustee periodically remits their income to them, and we think that they might reasonably expect that with or apart from their remittances word might come to them personally that steps were being taken affecting their interests.We think that under such circumstances reasonable risks that notice might not actually reach every beneficiary are justifiable.The fact that the trust company has been able to give mailed notice to known beneficiaries at the time the common trust fund was established is persuasive that postal notification at the time of accounting would not seriously burden the plan.

CONCLUSION:

We overrule appellant's constitutional objections to published notice insofar as they are urged on behalf of any beneficiaries whose interests or addresses are unknown to the trustee.The statutory notice to known beneficiaries is inadequate.The notice of judicial settlement of accounts is incompatible with the requirements of the 14th Amendment as a basis for adjudication depriving known persons whose whereabouts are also known of substantial property rights.


B. The Mechanics of Giving Notice


1. Introduction

Notice of a suit is given by the service of process upon the defendant. Process consists of a copy of the plaintiff's complaint together with a summons directing the defendant to answer. Service of process is made by personal delivery of the summons and complaint to the defendant.

1982:The summons and complaint could be sent by ordinary first class mail, together with a form for acknowledging receipt of service. If the acknowledgement form was not returned, plaintiff had to effect service through some other means.

1983:An action commences when the plaintiff sends a form entitled "Notice of Lawsuit and Request for Waiver of Service for Summons." Domestic defendants have 30 days from the date on which the waiver was sent to return the waiver; otherwise they will be charged with the costs associated with providing formal service.

2. Specific Applications of the Service Provisions

a. Federal Rule 4(d): "Waiver of Service"

Rule 4(d) replaces the old Rule 4(c)(2)(C)(ii). A plaintiff is authorized to send a defendant notice of the action and a request for waiver of service.

b. Federal Rule 4(e): Personal Delivery on Natural Persons

"Place and leave with" is the legal phrase for what a process-server must do with a summons when he goes out to serve papers on a defendant.

c. Rule 4(e)(2): Service on a Person Residing in Defendant's Dwelling House or Usual Place of Abode

As an alternative to personal delivery, Rule 4(e)(2) permits service of process to be made upon an individual by leaving a copy of the summons and complaint at his dwelling house or usual place of abode with some person of suitable age and discretion then residing therein.

d. Rule 4(e)(2): Delivery to an Agent Authorized by Appointment

A third method of effecting personal service on an individual under 4(e)(2) is by


delivering a copy of the summons and complaint to an agent of the defendant who is authorized by appointment or by law to receive process.

Like personal jurisdiction, notice and service of process requirements may be waived by a party at trial or even in advance of litigation.

e. Federal Rule 4(h): Service on Artificial Entities: Corporations, Partnerships, and Unincorporated Associations

Rule 4(h) authorizes service upon corporations, partnerships, and unincorporated associations that are subject to suit under a common name. The most frequently invoked portion of the rule is the part permitting service by delivery of process to an officer, a managing agent, or a general agent.

f. Rule 4(f): Service on Individuals in a Foreign Country

Federal Rule 4(f) makes provision for service of process in a foreign country.Any internationally agreed means reasonably calculated to give notice may be used to effect service on persons outside the United States.The Convention applies only if service actually is made abroad, rather than on the domestic subsidiary of a foreign corporation deemed to be the corporation's involuntary agent for service of process.Rule 4(f)(3) authorizes forms of service by other means not prohibited by international agreement as may be directed by the court.

3. Return of Service

After the process-server has delivered the papers, she must file a return, which should disclose enough facts to demonstrate that defendant actually has been served and given notice that he is required to appear in court.

"sewer" service - The process-server simply disposes of the papers and makes a false affidavit of service.

4. Service of Process and Statutes of Limitations

All states have statutes of limitations that fix specific time limits within which various categories of actions must be brought.In some states, an action is not deemed "commenced" until process is served on the defendant.Rule 3 governs when the action is commenced. Thus, the suit is commenced when a copy of the complaint is filed with the district court.Rule 4(m) requires a federal court to dismiss without prejudice an action when the defendant has not been served within 120 days of the filing of the complaint, if the plaintiff fails to show "good cause" for not completing service within that time.


Topic Hornbook

§ 3.20 Service of Process as a Means of Notice

"personal service" - In-hand delivery of the summons to the defendant by a sheriff, marshal, or someone similarly authorized by law.

Due process does not require that the defendant be served personally.

Rule 4(e)(2) authorizes leaving process at the defendant's usual place of abode.Rule 4(e)(1) authorizes service upon an individual pursuant to the law of either the state in which the district court is located or the state in which service is effected.

The most common form of substituted service calls for a copy of the summons to be left at the defendant's "usual place of abode" with someone of "suitable age and discretion."It is the serving officer who determines who is of suitable age and discretion.

Personal delivery to an officer or agent of a corporation who is likely to inform an appropriate corporate official of the receipt and content of the process suffices as service on the corporation.

Rule 4(d) authorizes use of first-class mail as a substitute for personal service and is encouraged to save the cost of formal service.

Maryland State Firemen's Association v. Chaves , 166 F.R.D. 353, United States District Court, District of Maryland, Messitte, District Judge, 1996

Case Brief

FACTS:

MSFA has sued Chaves alleging that Chaves illegally solicited charitable contributions that MSFA has the right to recover.Based on MSFA's attorney's affidavit of service, the Clerk entered default against Chaves for failure to plead.The Court sent a letter to MSFA's counsel questioning the validity of the service and requesting a more detailed affidavit describing the type of service employed and a brief legal memorandum indicating why counsel believed service was effective.MSFA served Chaves with the summons and complaint by first class mail. These were sent to the address on Chaves' letterhead, which MSFA's attorney was in possession of by reason of prior correspondence with Chaves. MSFA's attorney received three phone calls from one Mitchell Gold, purportedly speaking on behalf of FFA. MSFA's attorney has not heard from anyone on behalf of Chaves or FFA since.

ISSUE:


RULE:

Service of process must be effective under the Federal Rules of Civil Procedure before a default or a default judgment may be entered against a defendant.Prior to the 1993 Amendments, Rule 4(c)(2)(C)(ii) allowed service of process by mailing a copy of the summons and of the complaint to the person to be served, together with two copies of a notice and acknowledgement and a return envelope, postage prepaid, addressed to the sender.Rule 4(d) replaces the old Rule 4(c)(2)(C)(ii). A plaintiff is authorized to send a defendant notice of the action and a request for waiver of service.Under the federal rules, a plaintiff may serve process pursuant to the law of the state in which the district court is located, or in which service is effected.

APPLICATION:

MSFA sent the complaint and summons to Chaves by first class, not certified, mail.

CONCLUSION:

Because the Court judges service of process invalid in this case, the Court will set aside the Clerk's Entry of Default and deny MSFA's Motion for Default Judgment.Since service of process was invalid, the Clerk's Entry of Default was improper and the Court will set it aside.

National Equipment Rental, Ltd. V. Szukhent , 375 U.S. 311, Supreme Court of the United States, Mr. Justice Stewart, 1964

Case Brief

FACTS:

The petitioner is a corporation with its principal place of business in NY. It sued the respondents, residents of Michigan, in a NY federal court, claiming that respondents had defaulted under a farm equipment lease.A paragraph of the contract provided that "the Lessee hereby designates Florence Weinberg as agent for the purpose of accepting service of any process within the State of NY."The respondents were not acquainted with Florence Weinberg.That same day she mailed the summons and complaint to the respondents, together with a letter stating that the documents had been served upon her as the respondents' agent for the purpose of accepting service of process in NY, in accordance with the agreement contained in the lease. The petitioner itself also notified the respondents by certified mail of the service of process upon Florence Weinberg.The District Court quashed service of the summons and complaint.The Court of Appeals affirmed.


ISSUE:

Whether the person upon whom the summons and complaint were served was an agent authorized by appointment to receive the same, so as to subject the respondents to the jurisdiction of the federal court in NY.Whether a party to a private contract may appoint an agent to receive service of process within the meaning of Federal Rule 4(e)(2), where the agent is not personally known to the party, and where the agent is not personally known to the party, and where the agent has not expressly undertaken to transmit notice to the party.

RULE:

APPLICATION:

Florence Weinberg's prompt acceptance and transmittal to the respondents of the summons and complaint pursuant to the authorization was itself sufficient to validate the agency, even though there was no explicit previous promise on her part to do so.There is no relevant concept of state law which would invalidate the agency here at issue.

CONCLUSION:

Prompt notice to the respondents having been given, Florence Weinberg was their agent authorized by appointment to receive process within the meaning of Federal Rule 4(e)(2).

C. Immunity From Process and Etiquette of Service


1. Immunity From Process

A court sometimes will immunize a party from service of process, despite the fact that the constitutional and statutory conditions governing personal jurisdiction and service of process have been met.

2. Etiquette of Service

Topic Hornbook

§ 3.22 The Etiquette and Sufficiency of Service of Process

The custom in most states is that process must include both a copy of the summons and the complaint.In the federal courts, the Federal Rules dictate that the summons and complaint must be served together; service of the summons without the complaint is not effective service.


A federal court may dismiss a plaintiff's action against each defendant that is not served within 120 days. Completion of service typically is shown by the server's timely return of the completed and endorsed proof of service form.

Insufficient process, which usually involves a summons with defective content or that is improperly completed, results in the invalidation of the process and dismissal without prejudice.But if the process is insufficient because it is not served properly on the defendant, the court lacks jurisdiction over the process and, if the statute of limitations has run, the action or any subsequent action will be dismissed with prejudice.

§ 3.23 Impermissible Uses of Service of Process

Jurisdiction cannot rest on service procured by force or fraud.

The plaintiff cannot serve the defendant with process when the latter isinvited into the forum to negotiate a settlement to the dispute underlying the lawsuit.

A defendant who is in hiding within the forum can be "flushed out" by trickery.

§ 3.24 Immunity From Service of Process

The doctrine of immunity from process shields a nonresident from service while entering, staying in, or leaving a jurisdiction to attend judicial or quasi-judicial proceedings.

State Ex Rel. Sivnksty v. Duffield , 71 S.E.2d 113, West Virginia, Supreme Court of Appeals of West Virginia, Riley, President, 1952

Case Brief

FACTS:

Petitioner Sivnksty's automobile struck and injured two children who were walking along the highway. He was arrested on charges of reckless driving, and, being unable to post bond, was incarcerated in the county jail until his trial. While he was in jail awaiting trial, Sivnksty was served with process in a tort action brought by one of the children in the Circuit Court. Sivnksty was found guilty of the criminal charge and his appeals from that conviction failed.Sivknksty filed a plea in abatement, alleging that the court was without jurisdiction because at the time of service, he was a nonresident of the county and a prisoner in the county jail. The court sustained a demurrer to the plea in abatement.

ISSUE:

Was the petitioner immune from civil process at the time he was served with process in


the civil action?

RULE:

A person confined in jail on a criminal charge or imprisoned on conviction for such charge is subject to service of civil process, irrespective of the question of residence, at least if he was voluntarily in the jurisdiction at the time of the arrest and confinement.

APPLICATION:

The original and prime purpose for which the privilege of immunity from civil process on nonresidents of a county or state charged with crime therein was the protection of the court itself from interference with its judicial processes.Later the rule was enlarged for the protection of suitors, witnesses, jurors, and court officials from process, both in civil and criminal cases.The petitioner went to Gilmer County of his own volition.

CONCLUSION:

As the petitioner did not come and was not brought into Giler County under criminal process, the reason for application of the immunity rule is not present, and he is not entitled to the writ of prohibition prayed for.

Wyman v. Newhouse , 93 F.2d 313, 2nd Circuit, United States Court of Appeal, Second Circuit, Manton, Circuit Judge, 1937

Case Brief

FACTS:

Appellant and appellee wwere both married, but before this suit appellant's husband died. They had known each other for some years and had engaged in meretricious relations.He was a resident of NY and never lived in Florida. He received a telegram from the appellant. Appellee promised to go to Florida. Appellee arrived at the Miami Airport . He was met by a deputy sheriff who, upon identifying appellee, served him with process in a suit. He returned to NY and consulted his NY counsel, who advised him to ignore the summons served in Florida. He did so, and judgment was entered by default.

ISSUE:

RULE:

A judgment procured fraudulently lacks jurisdiction and is null and void.A fraud affecting the jurisdiction is equivalent to a lack of jurisdiction.A judgment recovered in a sister state, through the fraud of the party procuring the appearance of another, is not binding on the latter when an attempt is made to enforce


such judgment in another state.

APPLICATION:

The appellee was induced to enter the jurisdiction of the state of Florida by a fraud perpetrated upon him by the appellant when her sole purpose and apparent thought was to induce him to come within the Florida jurisdiction so as to serve him in an action for damages.

CONCLUSION:

The appellee was not required to proceed against the judgment in Florida.

D. Opportunity To Be Heard


The Due Process Clause also requires that parties have a "right to be heard" before the government effects deprivation of their liberty or property.The defendant must be informed of the action (that is, must receive notice) long enough in advance of the time when she is required to respond so as to allow her to obtain counsel and prepare a defense.

Topic Hornbook

§ 3.21 The Timing of Notice and the Opportunity to Be Heard

Mullane v. Central Hanover Bank & Trust Co. - The right to be heard has little reality or worth unless one is informed that the matter is pending and can choose for himself whether to appear or default, acquiesce or contest.

American Surety Company v. Baldwin - Due process requires that there be an opportunity to present every available defense; but it need not be before the entry of judgment.

Sniadach v. Family Finance Corporation - Prejudgment garnishment procedures violate fundamental principles of due process.

Fuentes v. Shevin - Statutes permitting replevin without prior hearing were unconstitutional.

Mitchell v. W.T. Grant Company - Upheld a Louisiana procedure for sequestration to avoid waste or alienation. The Louisiana writ required judicial approval.

Connecticut v. Doehr - Prejudgment-attachment statute against the defendant's real estate to secure a potential judgment in an assault and battery case. The statute posed too great a risk of erroneous deprivation of the defendant's property right since it permitted an


attachment on little more than the plaintiff's belief that the defendant was liable and the ability to prepare a facially valid complaint.

Shaffner v. Heitner - The assertion of jurisdiction was unconstitutional because the defendant did not have the requisite minimum contacts with the forum state.

The defendant may waive the right to notice and a hearing prior to attachment.

Fuentes v. Shevin , 407 U.S. 62, Supreme Court of the United States, Mr. Justice Stewart, 1972

Case Brief

FACTS:

Fuentes purchased a gas stove and service policy from Firestone under a conditional sales contract calling for monthly payments over a period of time. She purchased a stereophonic phonograph from the same company under the same sort of contract.A dispute developed between her and Firestone over the servicing of the stove. Firestone instituted an action in a small claims court for repossession of both the stove and the stereo.Before Mrs. Fuentes had even received a summons to answer its complaint, Firestone obtained a writ of replevin ordering a sheriff to seize the disputed goods at once.

ISSUE:

The constitutionality of the Florida prejudgment replevin procedures under the Due Process Clause of the 14th Amendment.Whether these state statutes are constitutionally defective in failing to provide for hearings at a meaningful time.

RULE:

Florida statute: Any person whose goods or chattels are wrongfully detained by any other person may have a writ of replevin to recover them.Parties whose rights are to be affected are entitled to be heard; and in order that they may enjoy that right they must be notified.The right to notice and an opportunity to be heard must be granted at a meaningful time and in a meaningful manner.A temporary, nonfinal deprivation of property is nonetheless a "deprivation" in the terms of the 14th Amendment.The 14th Amendment's protection of "property" has been read broadly to extend protection to any significant property interest.There are "extraordinary circumstances" that justify postponing notice and opportunity for a hearing:1. The seizure is directly necessary to secure an important government or general public interest,


2. There has been a special need for very prompt action, and3. The State has kept strict control over its monopoly of legitimate force.A waiver of constitutional rights in any context must, at the very least, be clear.

APPLICATION:

There is no requirement that the goods are, in fact, "wrongfully detained." At the same moment that the defendant receives the complaint seeking repossession of property through court action, the property is seized from him. He is provided no prior notice and allowed no opportunity whatever to challenge the issuance of the writ.Neither statute provides for notice or an opportunity to be heard before the seizure.When the State must listen to what he has to say, substantively unfair and simply mistaken deprivations of property interested can be prevented.If the right to notice and a hearing is to serve its full purpose, then, it is clear that it must be granted at a time when the deprivation can still be prevented.The appellants were deprived of possessory interests in those chattels that were within the protection of the 14th Amendment.The appellants were deprived of such an interest in the replevied goods - the interest in continued possession and use of the goods.The prejudgment replevin statutes serve no such important government or public interest. They allow summary seizure of a person's possession when no more than private gain is directly at stake.Nor do the broadly drawn statutes limit the summary seizure of goods to special situations demanding prompt action.The contracts included nothing about the waiver of a prior hearing. They did not indicate how or through what process the seller could take back the goods.

CONCLUSION:

The prejudgment replevin provisions work at a deprivation of property without due process of law insofar as they deny the right to a prior opportunity to be heard before chattels are taken from their possessor.

North Georgia Finishing, Inc. v. Di-Chem, Inc. , 419 U.S. 601, 601-08, 95 S.Ct. 719, 720-23, 42 L.E, White, J., 1975

Case Brief

FACTS:

Before petitioner received service of the complaint, respondent filed an affidavit and bond for garnishing petitioner's bank account.The Georgia Supreme Court upheld the constitutionality of the statute.

ISSUE:


Whether these provisions satisfy the Due Process Clause of the 14th Amendment.

RULE:

Georgia statute: Plaintiffs in pending suits are entitled to the process of garnishment.

APPLICATION:

A bank account, surely a form of property, was impounded and, absent a bond, put totally beyond use during the pendency of the litigation on the alleged debt, all by a writ of garnishment issued by a court clerk without notice or opportunity for an early hearing and without participation by a judicial officer.The write of garnishment is issuable on the affidavit of the creditor or his attorney, and the latter need not have personal knowledge of the facts.The affidavit need contain only conclusory allegations.

CONCLUSION:

We are no more inclined now than we have been in the past to distinguish among different kinds of property in applying the Due Process Clause.We think, to require the reversal of the judgment of the Georgia Supreme Court.

Mitchell v. W.T. Grant Co. , 415 U..S. 600, 601, 604-07, 611, 614-15, 617-20, 9, White, J., 1974

Case Brief

FACTS:

A state trial judge ordered the sequestration of personal property on the application of a creditor who had made an installment sale of the goods to petitioner and whose affidavit asserted delinquency and prayed for sequestration to enforce a vendor's lien under state law.

ISSUE:

Whether the sequestration violated the Due Process Clause of the 14th Amendment because it was ordered ex parte, without prior notice of opportunity for a hearing.

RULE:

Louisiana statutes provide for sequestration where one claims the ownership or right to possession of property, or a mortgage, lien, or privilege thereon if it is within the power of the defendant to conceal, dispose of, or waste the property or the revenues therefrom, or remove the property from the parish, during the pendency of the action.The writ of sequestration shall issue only when the nature of the claim and the amount


thereof, if any, and the grounds relied upon for the issuance of the writ clearly appear from specific facts.

APPLICATION:

Both seller and buyer had current, real interests in the property, and the definition of property rights is a matter of state law.The facts relevant to obtaining a writ of sequestration are narrowly confined. Documentary proof is particularly suited for questions of the existence of a vendor's lien and the issue or default. There is thus far less danger here that the seizure will be mistaken and a corresponding decrease in the utility of an adversary hearing which will be immediately available in any event.

CONCLUSION:

The Louisiana standards regulating the use of the writ of sequestration are constitutional.

Connecticut v. Doehr , 111 S.Ct. 2105, Supreme Court of the United States, Justice White, 1991

Case Brief

FACTS:

Petitioner DiGiovanni submitted an application for an attachment on respondent Doehr's home. DiGiovanni took this step in conjunction with a civil action for assault and battery that he was seeking to institute against Doehr in the same court. The suit did not involve Doehr's real estate nor did DiGiovanni have any preexisting interest either in Doehr's home or any of his other property.Doehr filed suit against DiGiovanni in Federal District Court, claiming that the statute was unconstitutional under the Due Process Clause of the 14th Amendment. The District Court upheld the satute and granted MSJ in favor of DiGiovanni. The United States Court of Appeals reversed.

ISSUE:

Whether a state statute that authorizes prejudgment attachment of real estate without prior notice or hearing, without a showing of extraordinary circumstances, and without a requirement that the person seeking the attachment post a bond, satisfied the Due Process Clause of the 14th Amendment.

RULE:

Connecticut law authorizes prejudgment attachment of real estate without affording prior notice or the opportunity for a prior hearing to the individual whose property is subject to the attachment.


The statute does not require the plaintiff to post a bond to insure the payment of damages that the defendant mya suffer should the ttachment prove wrongfully issued or the claim prove unsuccessful.

APPLICATION:

Even the temporary or partial impairments to property rights that attachments, liens, and similar encumbrances entail are sufficient to merit due process protection.The risk of erroneous deprivation that the State permits here is substantial.The potential for unwarranted attachment in these situations is self-evident and too great to satisfy the requirements of due process absent any countervailing consideration.It is true that a later hearing might negate the presence of probable cause, but this would not cure the temporary deprivation that an earlier hearing might have prevented.The plaintiff's interest in attaching the property does not justify the burdening of Doehr's ownership rights without a hearing to determine the likelihood of recovery.Without a bond, at the time of attachment, the danger that these property rights may be wrongfully deprived remains unacceptably high even with such safeguards as a hearing or exigency requirement.

CONCLUSION:

A state statute that authorizes prejudgment attachment of real estate without prior notice or hearing, without a showing of extraordinary circumstances, and without a requirement that the person seeking the attachment post a bond, does not satisfy the Due Process Clause of the 14th Amendment.The interests in favor of an ex parte attachment, particularly the interests of the plaintiff, are too minimal to supply such a consideration here.Because Connecticut's prejudgment remedy provision violates the requirements of due process by authorizing the prejudgment attachment without prior notice or a hearing, the judgment of the Court of Appeals is affirmed.

V. Venue, Transfer, and Forum Non Conveniens

A. Venue

Topic Lectures

A series of rules describing where you can locate a case in the court system.It assumes that there is personal and subject matter jurisdiction.

Designed to promote convenience to the parties, witnesses, and the courts.

Rules for Federal Courts:§ 1391 of the judicial code - Rules are slightly different depending on the type of case involved.


Federal question case:1. Venue is proper at the residence of the defendant (within that district). If there are

multiple defendants, any residence will suffice if they are all within the same state.2. Where a substantial portion of the events occurred.3. Default choice is any district where the defendant can be found. Used when defendant

is a foreign resident or the events took place in a foreign location.

Diversity of citizenship cases:1. Venue is proper at the residence of the defendant (within that district). If there are

multiple defendants, any residence will suffice if they are all within the same state.2. Where a substantial portion of the events occurred.3. Default choice is where ever you can acquire jurisdiction over the defendant.

Local cases (involving land):Reasor-Hill - Venue is proper only where the land is actually located.Cases involving crops are only local if the crops are still attached to the land.

B. Transfer of Venue in Federal Courts

Topic Lectures

Transfer of VenueEvery system allows a case to moved to a different venue.Hoffman v. Blaski - Federal statute states that the transferee court must a court in which the action might have been brought originally (proper venue and proper personal jurisdiction).

C. Forum Non Conveniens

Topic Lectures

"This ain't a good place!"

Sometimes a case cannot be transferred when it was brought incorrectly to that jurisdiction.Federal court cannot transfer to a state court.

In forum non conveniens, the case is dismissed if it cannot be transferred on condition that the defendant makes himself available in the preferred jurisdiction and that the statute of limitations is waived.

Removal

§ 1441 - sets conditions on removal from a state to a federal court.1. Case can only be removed if that case could have been brought originally in a federal


court (federal subject matter or diversity of citizenship with the proper dollar amount).

2. Only a defendant can remove. If it is a federal question case, any defendant can remove. If it is a diversity case, the only defendant that can remove is any defendant that is not a citizen of the state.

Once a case is removed, it can then be transferred.

Waiver

Subject matter jurisdiction can never be waived.Personal jurisdiction - notice, process, and venue can be waived. Issues should be raised

very early.If it is not addressed in the response to the complaint or pre-answer motions, it is waived.If raised, they must all be raised in a single motion.Once a jurisdictional motion is made, it is preserved.

Civil Procedure – Module 8Personal Jurisdiction: Challenges to Personal Jurisdiction

K. Challenging a Court's Exercise of Jurisdiction


1. Raising the Jurisdictional Issue Directly

The term "special appearance" refers to the procedure at common law by which a defendant presented a challenge to the court's exercise of personal jurisdiction without submitting to the court's jurisdiction for any other purpose.

A defendant generally had to designate the appearance "special" and limit himself to raising the jurisdictional defense. If he did anything else, such as argue the merits in any way, the defendant would be deemed to have made a "general appearance," constituting a voluntary submission to the court's jurisdiction and a waiver of any defects in the court's jurisdiction.

2. Collateral Attack on Personal Jurisdiction

A defendant who makes no appearance whatsoever remains free to challenge a default judgment for want of personal jurisdiction.

3. The Limited-Appearance Problem

A "limited appearance" allows a defendant in an action commenced on a quasi-in-rem basis to appear for the limited purpose of defending his interest in the attached property without submitting to the full in personam jurisdiction of the court.


Topic Lectures

Class Chat:

Challenge to Personal Jurisdiction in Federal Court:Defendant may raise an objection either in a pretrial motion to dismiss or in the answer to the complaint (FRCP 12b2).Distinctions for special and general appearance (in State Court) have basically been abolished in Federal Court.Court applies a prima facie standard - facts taken as true and in light most favorable to the plaintiff.

Topic Hornbook

§ 3.25 Challenging Jurisdiction - An Introduction

The defendant can waive any objections to the court's power over him.

There are two basic approaches:1. the utilization of a special appearance to challenge jurisdiction, and2. the use of a pretrial motion to dismiss for lack of jurisdiction.

Once the defendant raises a jurisdictional objection, the plaintiff has the burden to prove that jurisdiction is proper.

§ 3.26 Methods of Challenging Jurisdiction

A common method in state courts of challenging the court's personal jurisdiction is by making a "special appearance." A defendant who wishes to object to personal jurisdiction must enter a special appearance and typically is not permitted to introduce any other defenses prior to or simultaneously with raising the objection.If he does so, he will be deemed to have made a "general appearance" and have waived all jurisdiction objections.

When the defendant answers the plaintiff's complaint, or requests a more definite statement of the plaintiff's claim, or a continuance, or challenges the plaintiff's standing to sue, without challenging jurisdiction, the defendant will be held to have made a general appearance.

The defendant may object to the court's subject matter jurisdiction without submitting to the tribunal's in-personam jurisdiction.

A special appearance to contest personal jurisdiction combined with a petition to remove the case from state to federal court does not constitute a general appearance.


A state need not permit a defendant to make a special appearance.A state rule making any appearance a consent to jurisdiction does not violate due process.

Jurisdiction may be attacked collaterally in any action brought to enforce the defective judgment.

The right to make some form of an appearance to contest the court's in-personam jurisdiction exists in all states.

The defendant may defend on the merits following an unsuccessful challenge to the court's jurisdiction without waiving any jurisdiction objection.

The distinction between general and special appearances has been abolished in the federal courts and in those states that have adopted the federal rules.Instead of requiring the defendant to make a special appearance to challenge jurisdiction, the defendant may raise the objection either in a pretrial motion to dismiss or in the answer.

Only the defendant's failure to include the jurisdiction objection in a pretrial motion when other defenses are raised by motions to dismiss or to include it in the answer when no pretrial motions have been made will result in the total waiver of the objection.

§ 3.27 Limited Appearances in Quasi-in-Rem Proceedings

The defendant may try to appear to contest the validity of an attachment or garnishment in a quasi-in-rem action without submitting to the full in-personam jurisdiction of the court.

States that allow the defendant to try the case on the merits yet restrict liability to the value of the property recognize what is called a "limited appearance."

Federal Rule 4(n) - Authorizes quasi-in-rem actions in federal court pursuant to the law of the state in which the district court is located, although only as a last resort.

Shaffer v. Heitner - All assertions of quasi-in-rem jurisdiction meet the same due-process standards as in-personam jurisdiction.

§ 3.28 Protecting the Defendant Against Vexatious Litigation

When the plaintiff has initiated the proceedings in two forums, each court has discretion to stay the proceedings before it if it considers the other tribunal more appropriate to adjudicate the controversy.

In the event that quasi-in-rem proceedings are brought, the court's stay will preserve the attachment.


In instances in which the plaintiff only brings one suit but the plaintiff's choice of a forum is greatly inconvenient for the defendant, the court may protect the defendant by dismissing the action on the basis of forum non conveniens or by transferring the action to a more convenient forum.

Civil Procedure – Module 9Venue, Transfer and Forum Non Coveniens

V. Venue, Transfer, and Forum Non Conveniens


Venue is a doctrine that serves to "allocate cases among the same type of courts within a given judicial system."

The venue of a civil action is a statutory, and not a constitutional, question, relating primarily to the convenience of the parties and to concerns of judicial economy.

A. Venue


1. General Principles

Venue means the place of trial in an action within a state.

Different fact situations upon which venue statutes are predicated:

A. Where the subject of action or part thereof is situated.B. Where the cause of action, or part thereof, arose or accrued.C. Where some fact is present or happened.D. Where the defendant resides.E. Where the defendant is doing business.F. Where defendant has an office or place of business, or an agent, or representative, or where an agent or officer of defendant resides.G. Where the plaintiff resides.H. Where the plaintiff is doing business.I. Where the defendant may be found.J. Where the deendant may be summoned or served.K. In the county designated in the plaintiff's complaint.L. In any county.M. Where the seat of government is located.

2. Local and Transitory Actions

3. Venue in the Federal Courts


Under Section 1391, the default provision in diversity jurisdiction cases is a district in which any defendant is subejct to personal jurisdiction at the time the action is commenced; in federal-question cases, a district in which any defendant may be found.

Topic Lectures

Venue

A series of rules describing where you can locate a case in the court system.It assumes that there is personal and subject matter jurisdiction.

Designed to promote convenience to the parties, witnesses, and the courts.

Rules for Federal Courts:§ 1391 of the judicial code - Rules are slightly different depending on the type of case involved.

Federal question case:1. Venue is proper at the residence of the defendant (within that district). If there are

multiple defendants, any residence will suffice if they are all within the same state.2. Where a substantial portion of the events occurred.3. Default choice is any district where the defendant can be found. Used when defendant

is a foreign resident or the events took place in a foreign location.

Diversity of citizenship cases:1. Venue is proper at the residence of the defendant (within that district). If there are

multiple defendants, any residence will suffice if they are all within the same state.2. Where a substantial portion of the events occurred.3. Default choice is where ever you can acquire jurisdiction over the defendant.

Local cases (involving land):Reasor-Hill - Venue is proper only where the land is actually located.Cases involving crops are only local if the crops are still attached to the land.

Topic Hornbook

§ 2.15 Venue Requirements

Venue requirements are purely statutory and vary from jurisdiction to jurisdiction, although all are designed to identify a convenient forum for the resolution of particular types of disputes.

Factors that serve functional goals:1. where the subject matter of the action is located,2. where the cause of action arose,3. where the defendant resides, does business, or retains an agent,


4. where the plaintiff resides, or5. in suits involving governmental bodies, where the seat of government is located.

Factors that serve nonfunctional goals:1. where some fact connected with the case occurred,2. where the defendant may be found,3. where the defendant may be served with process,4. in the county designated in the plaintiff's complaint, or5. in any county at all.

The present statute governing venue generally in the federal-court system is Section 1391 of Title 28 of the United States Code:

In diversity actions, venue is proper:1. in a district where one of the defendants resides, if all of the defendants reside in the same state, or2. in a district in which a substantial part of the events or omissions giving rise to the

claim occurred or a substantial part of property that is the subject matter of the action is situated, or

3. in a district in which the defendants are subject to personal jurisdiction.

In federal-question cases, the action may be brought:1. in a district where one of the defendants resides, if all of the defendants reside in the same state, or2. in a district in which a substantial part of the acts or omissions giving rise to the claim

occurred or a substantial part of property that is the subject matter of the action is situated, or

3. a district in which any defendant may be found.

Section 1391(a)(2) for diversity cases, Section 1391(b)(2) for federal-question cases, and Section 1391(e)(2) for suits against federal officers and agencies all permit venue to be laid in a district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated.

The federal venue statute also includes special standards for establishing venue in actions against corporations.A corporation is deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced, thereby equating the tests for personal jurisdiction and venue.In determining their residence for venue purposes, unincorporated associations such as labor unions are treated as if they were corporations and thus may be sued in any district in which they do business.

Objections to the venue of a particular court are waived if not asserted promptly.The federal venue requirements need not be met in actions that are removed to the federal


courts.

Waiver occurs when a defendant voluntarily removes an action to federal court.The normal venue requirements also are dispensed with for claims that fall within the supplemental jurisdiction of the federal courts.

§ 2.16 Local and Transitory Actions

The concept of a local action includes actions concerning real property.Because these types of actions involve a particular piece of land that necessarily is located within a given region, they have been deemed to be peculiarly "local."Those actions that theoretically might have arisen anywhere have been deemed to be "transitory."

In most jurisdictions a local action must be brought in the court where the res at issue is located; a transitory action can be brought wherever personal jurisdiction over the defendant can be obtained, subject to the general venue requirements.

Reasor-Hill Corp. v. Harrison , 249 S.W.2d 994, Arkansas, Supreme Court of Arkansas, George Rose Smith, Justice, 1952

Case Brief

FACTS:

The suit was brought to collect an account for having sprayed insecticide upon Barton's cotton crop in Missouri.The petitioner is an Arkansas corporation and is not authorized to do business in Missouri.,

ISSUE:

May the Arkansas courts entertain a suit for injuries to real property situated in another State?

RULE:

Our statutes in Arkansas require that actions for injury to real estate be brought where the land lies. But we permit the defendant to be served anywhere in the State.

APPLICATION:

The petitioner cannot be served with summons in Missouri; so unless it is subject to suit in Arkansas, it can escape liability entirely by staying out of Missouri until the statute of limitations has run.We agree that the weight of authority is almost unanimously against the respondent.


The ground most frequently relied upon is that the courts are not in a position to pass upon the title to land outside the jurisdiction.The same difficulties (as with foreign countries) do not exist with respect to land in another State.The American courts do not hesitate to pass upon an out-of-state title when the issue arises in a transitory action.It has been argued that since the tort must take place where the land is situated the plaintiff hsould pursue his remedy before the defendant leaves the jurisdiction.But the citizens of the various States have a constitutional right to pass freely from one jurisdiction to another.There is an understandable reluctance to subject one's own citizens to suits by aliens, especially if the other jurisdiction would provide no redress if the situation were reversed.We do not feel compelled to provide a sanctuary in Arkansas for those who have willfully and wrongfully destroyed property, torn down houses, uprooted crops, polluted streams, and inflicted other injuries upon innocent landowners in our sister States.The majority rule has no basis in logic or equity and rests solely upon English cases that were decided before America was discovered and in circumstances that are not even comparable to those existing in our Union.

CONCLUSION:

We prefer to afford this litigant his day in court. Writ denied.

Bates v. C & S Adjusters, Inc. , 980 F.2d 865, 2nd Circuit, United States Court of Appeals, Second Circuit, Newman, Circuit Judge, 1992

Case Brief

FACTS:

Bates commenced this action in NY. Bates incurred the debt in question while he was a resident of PA. The creditor, a corporation with its principal place of business in that District, referred the account to C&S, a local collection agency which transacts no regular business in NY.Bates had meanwhile moved to NY. When C&S mailed a collection notice to Bates at his PA address, the Postal Service forwarded the notice to Bates' new address in NY.

ISSUE:

Whether venue exists in a district in which the debtor resides and to which a bill collector's demand for payment was forwarded.

RULE:

28 U.S.C. § 1391(b)(2) - allows an action to be brought in a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred.


APPLICATION:

The statutory standard for venue focuses not on whether a defendant has made a deliberate contact - a factor relevant in the analysis of personal jurisdiction - but on the location where events occurred.In adopting this statute, Congress was concerned about the harmful effect of abusive debt practices on consumers.This harm does not occur until receipt of the collection notice.If the bill collector prefers not to be challenged for its collection practices outside the district of a debtor's original residence, the envelope can be marked "do not forward."The most relevant evidence - the collection notice - is located in NY.

CONCLUSION:

We conclude that venue was proper and therefore reverse and remand.We conclude that receipt of a collection notice is a substantial part of the events giving rise to a claim under the Fair Debt Collection Practices Act.Because the collection agency appears not to have marked the notice with instructions not to forward, and has not objected to the assertion of personal jurisdiction, trial in NY would not be unfair.

B. Transfer of Venue in Federal Courts


Section 1404(a) authorizes transfer of venue in the federal courts for the convenience of the parties and witnesses and in the interest of justice.

Ferens v. John Deere Co. (1990) - The Ferens Doctrine - In a diversity suit, the transferee forum is required to apply the law of the transferor court, regardless of who initiates the transfer.

Goldlawr, Inc. v. Heiman (1962) - Section 1406 authorizes the transfer of an action even if the transferor court lacks personal jurisdiction.

28 U.S.C. § 1407 - provides for the temporary transfer to one district of related complex cases such as multi-district antitrust actions.Transfer is appropriate when the cases involve common questions of fact and law and when it would be for the convenience of the parties and witnesses and in the interests of justice.

Topic Lectures

Transfer of VenueEvery system allows a case to moved to a different venue.


Hoffman v. Blaski - Federal statute states that the transferee court must be a court in which the action might have been brought originally (proper venue and proper personal jurisdiction).

Topic Hornbook

§ 2.17 Transfer and Forum Non Conveniens

Although the court has a choice between dismissing and transferring an action that has been commenced in an improper venue, the courts usually have concluded that the interests of justice are served better by transfer to a proper forum than by dismissal.

Transfers can be made only between courts of the same judicial system, however; federal courts can transfer only to other federal courts, and state courts can transfer only to state courts in the same state.

Goldlaw, Inc. v. Heiman - It is even permissible for a federal court lacking personal jurisdiction over the defendant to transfer under Section 1406(a). As long as service of process can be made in the transferee district and venue is proper there, transfer is appropriate.

The federal courts and most state systems will enforce contractual forum-selection clauses.

"permissive" forum-selection clause - permits suit in a specified forum that may or may not otherwise have had personal jurisdiction or venue, but does not foreclose suits elsewhere."mandatory" forum-selection clause - precludes any lawsuit that falls under the terms of the clause from being brought outside the designated forum.

Hoffman v. Blaski , 363 U.S. 335, Supreme Court of the United States, Mr. Justice Whittaker, 1960

Case Brief

FACTS:

Respondents, residents of IL, brought this patent infringement action in TX against one Howell and a TX corporation controlled by him, alleging that the defendants are residents of, and maintain their only place of business in TX, where they are infringing respondents' patents.The defendants moved to transfer the action to IL.The District Court found that the motion should be granted for the convenience of the parties and witnesses in the interest of justice, and ordered the case transferred to IL.Respondents filed a petition for a writ of mandamum. That court denied the motion.The IL District Court assigned the action to Judge Hoffman.


Respondents then filed for a writ of mandamus. The 7th Circuit granted the writ.

ISSUE:

Whether a District Court, in which a civil action has been properly brought, is empowered to transfer the action, on the motion of the defendant, to a district in which the plaintiff did not have a right to bring it.

RULE:

A defendant, properly served with process by a court having subject matter jurisdiction, waives venue by failing seasonably to assert it, or even simply by making default.The power of a District Court to transfer an action to another district is made to depend upon whether the transferee district was one in which the action might have been brought by the plaintiff.

APPLICATION:

The transferee courts could have acquired jurisdiction over these actions only if properly brought in those courts, or if validly transferred thereto.

CONCLUSION:

Inasmuch as the respondents (plaintiffs) did not have a right to bring these actions in the respective transferee districts, it follows that the judgments of the Court of Appeals were correct and must be affirmed.

C. Forum Non Conveniens


The principle of forum non conveniens is simply that a court may resist imposition upon its jurisdiction even when jurisdiction is authorized by the letter of a general venue statute.

An interest to be considered is the private interest of the litigant.

Important consideration are:1. the relative ease of access to sources of proof;2. availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing witnesses;3. possibility of view of premises, if view would be appropriate to the action; and4. all other practical problems that make trial of a case easy, expeditious and inexpensive.

The United States system provides an attractive institutional iption to foreign plaintiffs.


The globalization of international commercial markets has produced a concomitant internationalization of the scope of product-related injury claims against U.S. companies that do business abroad.An increased concern for human rights, and the incorporation of international law into U.S. domestic law, is said to have created a "niche" for plaintiffs living abroad to file suit in U.S. courts alleging human rights violations committed in their home countries by persons or corporations resident outside the United States.

One important requirement to the application of the doctrine of forum non conveniens is that there must exist another more convenient forum where the plaintiff can obtain adequate relief.

A forum non conveniens motion is not the only option available to a defendant who objects to a foreign plaintiff's choice of the United States as her forum.One approach is to include a forum-selection clause in a contract.Another approach is to commence a parallel proceeding in a foreign forum and to seek injunctive or declaratory relief. Once the parallel suit commences, defendant also can seek to stay the United States action.

Topic Lectures

"This ain't a good place!"

Sometimes a case cannot be transferred when it was brought incorrectly to that jurisdiction.Federal court cannot transfer to a state court.

In forum non conveniens, the case is dismissed if it cannot be transferred on condition that the defendant makes himself available in the preferred jurisdiction and that the statute of limitations is waived.

Removal

§ 1441 - sets conditions on removal from a state to a federal court.1. Case can only be removed if that case could have been brought originally in a federal

court (federal subject matter or diversity of citizenship with the proper dollar amount).

2. Only a defendant can remove. If it is a federal question case, any defendant can remove. If it is a diversity case, the only defendant that can remove is any defendant that is not a citizen of the state.

Once a case is removed, it can then be transferred.

Waiver

Subject matter jurisdiction can never be waived.Personal jurisdiction - notice, process, and venue can be waived. Issues should be raised


very early.If it is not addressed in the response to the complaint or pre-answer motions, it is waived.If raised, they must all be raised in a single motion.Once a jurisdictional motion is made, it is preserved.

Topic Hornbook

forum non conveniens doctrine - permits a court having jurisdiction over an action to refuse to exercise its jurisdiction when the litigation could be brought more appropriately in another forum.

Forum non conveniens comes into play only when venue is proper in the first instance.

Dismissal on the basis of forum non conveniens also requires that there be an alternative forum in which the suit can be prosecuted.

Section 1404(a) - authorizes transfer for the convenience of parties and witnesses, and in the interest of justice.

The court may transfer the action to any other district or division where it might have been brought.

A court in one state cannot transfer a case to a court in another state.

Hoffman v. Blaski - A federal court in which an action properly had been brought was not empowered under Section 1404(a) to transfer a case to a district in which the plaintiff could not have instituted the action originally.

Plaintiffs, as well as defendants, are entitled to seek a change of venue under Section 1404(a).

A case cannot be transferred on the plaintiff's motion to a district in which the defendant is not subject to process and where, therefore, in personam jurisdiction could not be obtained.

Section 1407 - authorizes the temporary transfer of two or more civil actions involving one or more common questions of fact that are pending in different districts, to a single district for coordinated or consolidated pretrial proceedings.It also establishes a special Judicial Panel on Multidistrict Litigation to determine whether transfer is appropriate in a particular case, what district should be denominated the transferee forum, and who should serve as the transferee judge.

The Panel may order transfer only if they determine that the three statutory prerequisites are satisfied:1. there are common questions of fact;2. transfer will serve the convenience of parties and witnesses; and3. transfer will promote the just and efficient conduct of the actions to be consolidated.


Actions may be transferred under Section 1407 without regard to the usual venue requirements.

The Panel must order a remand to the courts in which the consolidated cases were initiated even if all the parties involved are willing to consent to the case proceeding to trial in the transferee forum.

Piper Aircraft v. Reyno , 454 U.S. 235, Supreme Court of the United States, Justice Marshall, 1981

Case Brief

FACTS:

A small commercial aircraft crashed in the Scottish highlands. The pilot and 5 passengers were killed instantly. The decedents were all Scottish subjects and residents, so are their heirs and next of kin. There were no eyewitnesses to the accident. At the time of the crash the plane was subject to Scottish air traffic control.The aircraft was manufactured in PA by Piper. The propellers were manufactured in OH by Hartzell. At the time of the crash the aircraft was registered in Great Britain and was owned and maintained by Air Navigation. It was operated by McDonald, a Scottish air taxi service. Both Air Navigation and McDonald were organized in the UK. The wreckage of the plane is now in a hangar in the UK.A preliminary report found that the plane crashed after developing a spin, and suggested that mechanical failure in the plane or the propeller was responsible.A Review Board found no evidence of defective equipment and indicated that pilot error may have contributed to the accident.A CA probate court appointed respondent Reyno administratix of the estates of the 5 passengers.Reyno commenced separate wrongful death actions against Piper and Hartzell in CA.Air Navigation, McDonald, and the estate of the pilot are not parties to this litigation.The survivors of the 5 passengers filed a separate action in the UK against Air Navigation, McDonald, and the pilot's estate.On petitioners' motion, the suit was removed to CA.Piper then moved for transfer to PA.Hartzell moved to dismiss for lack of personal jurisdiction, or in the alternative, to transfer.The District Court quashed service on Hartzell and transferred the case to PA. Respondent then properly served process on Hartzell.Both Hartzell and Piper moved to dismiss the action on the ground of forum non conveniens. The District Court granted these motions.It relied on the balancing test set forth by Gilbert.The District Court reasoned that because crucial witnesses and evidence were beyond the reach of compulsory process, and because the defendants would not be able to implead potential Scottish third-party defendants, it would be unfair to make Piper and Hartzell


proceed to trial in this forum.The District Court concluded that the relevant public interests also pointed strongly towards dismissal.On appeal, the 3rd Circuit reversed and remanded for trial.The Court held that the District Court abused its discretion in conducting the Gilbert analysis.The Court held that dismissal is never appropriate where the law of the alternative forum is less favorable to the plaintiff.

ISSUE:

RULE:

The forum non conveniens determination is committed to the sound discretion of the trial court. It may be reversed only when there has been a clear abuse of discretion.

APPLICATION:

The Court of Appeals erred in holding that plaintiffs may defeat a motion to dismiss on the ground of forum non conveniens merely by showing that the substantive law that would be applied in the alternative forum is less favorable to the plaintiffs than that of the present forum. The possibility of a change in substantive law should ordinarily not be given conclusive or even substantial weight in the forum non conveniens inquiry.The Court of Appeals also erred in rejecting the District Court's Gilbert analysis.Furthermore, we do not believe that the District Court abused its discretion in weighing the private and public interests.The District Court did not act unreasonably in concluding that fewer evidentiary problems would be posed if the trial were held in Scotland.The District Court correctly concoluded that the problems posed by the inability to implead potential third party defendants clearly supported holding the trial in Scotland.Finding that trial in the plaintiff's chosen forum would be burdensome is sufficient to support dismissal on grounds of forum non conveniens.

CONCLUSION:

The American interest in this accident is simply not sufficient to justify the enormous commitment of judicial time and resources that would inevitably be required if the case were to be tried here.Reversed.

Civil Procedure – Module 10Ascertaining the Applicable Law: State Law

VI. Ascertaining the Applicable Law

A. State Law in the Federal Courts



1. The Rule of Swift v. Tyson

Rules of Decision Act - The laws of the several states, except where the Constitution or treaties of the United States or Acts of Congress otherwise require or provide, shall be regarded as rules of decision in civil actions in the court of the United States, in cases where they apply.

Swift v. Tyson (1842):

The Act commanded federal courts to follow simply the statutory law of the states.This section, upon its true intendment and construction, is strictly limited to local statutes and local usages and does not extend to contracts and other instruments of a commercial nature.

2. The Erie Doctrine: The Rules of Decision Act and The Rules Enabling Act

Topic Lectures

Class Chat:

Swift v. Tyson - Federal court should apply federal "substantive" law in matters of full diversity and state "procedural" law.Federal court was not bound to follow state judicial decisions.

Hypo:In State, service of process is not commenced until actually served on plaintiff. Federal law says suit is commenced when filed in federal court.Two-year statute of limitations in federal court. Suit filed in time, but service done after the statute runs out.Defendant moves to dismiss.What should federal court do?Federal rules would apply (per Hanna v. Plumer) so this is procedural and would not change the outcome.

Ragan - State law determines whether statute is tolled (stopped), not federal law.

Recorded Lecture:

Until 1938, per Swift v. Tyson, for a diversity of citizenship case, the "federal common law" applied. This approach promoted 'forum shopping.'

Erie Railroad v. Tompkins (1938) - "Erie Doctrine" - Ruled that Swift decision was based on 'bad history.' Court has no constitutional right to create federal common law. Power is reserved to the States. Ruled that a federal court sitting in diversity of citizenship must


apply the substantive law of the forum state.

substantive law - A series of rules that govern conduct (behavior) between people and entities. Does not include procedure.

Guarantee Trust Co. v. York - Federal court sitting in diversity. NY statute of limitations barred fraud suit whereas federal equity rule of laches would have permitted suit. Issue was whether SOL was substantive or procedural. Court ruled that substantive or procedural should be governed by obtaining the same goal ("outcome determinative") in order to avoid forum shopping and inequitable aims ("twin goals" of Erie).

Byrd v. Blue Ridge Rural Electric Co. - Worker was killed at a construction site. Issue involved whether Worker's Comp applied. State statute required determination by the court judge, whereas federal practice would be to determine by a jury. "Balancing decision" between importance of the right to jury trial and the impact to the state to have a judge decide. Court ruled that the 'outcome differential' is not guaranteed simply by having either a judge or jury decide.

Hanna v. Plummer - Death resulted from auto crash. Plaintiff sued estate in MA where MA statute requires in-hand service on the estate administrator. Issue involved service procedure and statute of limitations since federal rules of procedure did not require in-hand service and different SOL. Court ruled that rules of procedure of the court in which the suit is filed takes priority (therefore, FRCP applied in this case).

Ragan - Wrongful death case involving statute of limitations issue where state starts time line at time of service as opposed to when suit is filed. Court ruled that this was 'outcome determinative' so state rule applies.

Walker v. Armed Pro Steel - Involved FRCP and state procedure rules. Ruled FRCP 3 established administrative time frame only and not actual SOL for a lawsuit. Determined that FRCP was not applicable.

Gasperini v. Center for Humanity - Supreme Court held that a federal court in a diversity action must comply with a NY statute that defines how a NY appellate court should review a tort judgment.

Topic Hornbook

§ 4.1 The Rules of Decision Act and Swift v. Tyson

Judiciary Act of 1789 (The Rules of Decision Act) - The laws of the several states, except where the constitution, treaties or statutes of the United States shall otherwise require or provide, shall be regarded as rules of decision in trials at common law in the courts of the United States in cases where they apply.

Swift v. Tyson - Federal judges sitting in diversity jurisdiction were not necessarily bound


by the previous decisions of the courts of the state whose law was otherwise being applied.The laws of the states that would be regarded as rules of decision in the federal courts were limited to state constitutions, statutes, and state judicial opinions interpreting them.General" matters, in the absence of a valid state statute, were to be determined by the federal courts according to what they conceived to be widely held jurisprudential doctrines.

§ 4.2 Erie Railroad Company v. Tompkins

Federal courts in diversity actions must apply judicially announced state-created substantive law, as well as state statutes and constitutions.

Hanna v. Plumer - Neither Congress nor the federal courts can, under the guise of formulating rules of decision for federal courts, fashion rules which are not supported by a grant of federal authority contained in Article I or some other section of the Constitution; in which areas state law must govern because there can be no other law.

§ 4.3 Evolution of the Erie Doctrine

Guaranty Trust Company v. York - Federal courts sitting in diversity-of-citizenship cases must rely upon state law in determining substantive rights even in equity matters. Created the "outcome-determinative" test.

Byrd v. Blue Ridge Rural Electric Cooperative, Inc. - The mere possibility that a federal practice may alter the outcome of a diversity case is not conclusive in deciding whether to apply federal or state law. It devised an analysis calling for a comparison of the significance of the competing federal and state policies at issue in a particular case.Created a balancing test that requires weighing the policies underlying the respective federal and state rules. Advocates a "balancing approach."

§ 4.4 The Erie Doctrine and the Federal Rules

The Rules Enabling Act - Authorized the Supreme Court to draft and promulgate an independent set of procedural rules for the federal courts.

Hanna v. Plumer - Analysis for determining the applicability of a particular federal practice:Whether a Federal Rule actually governs the practice under consideration in the particular case.If yes, then the federal court must determine whether a conflict between the Federal Rule and state law exists, or whether the Federal Rule is narrower in its coverage than the state statute, permitting the superimposition of the state requirements without interfering with the application of the Rule.If there is a direct conflict between state practice and a Federal Rule, then the court must determine whether the latter is a valid exercise of the poewr granted to the Supreme


Court under the Rules Enabling Act.

§ 4.5 Determining Which State's Law Controls

Sampson v. Channell - Erie required the district court to follow the choice-of-law rules of the forum state.

Klaxon Company v. Stentor Electric Manufacturing Company - Federal courts sitting in diversity must follow the choice-of-law rules that the forum state would follow.

Van Dusen v. Barrack - When transfer of a diversity action is ordered pursuant to a motion by the defendant, the transferee court must apply the law that would have been applied in the transferor court.

§ 4.6 Determining the Content of State Law

Fidelity Union Trust Company v. Field - An intermediate state court's decisions are binding on the federal courts, even though the state's highest court may not have ruled on the particular matter.

Mason v. American Emery Wheel Works - A federal judge in a diversity case should ask "what would be the decision of reasonable intelligent lawyers, sitting as judges of the highest New York court, and fully conversant with New York jurisprudence?"

Commissioner of Internal Revenue v. Estate of Bosch - Whenever the highest court of the state has not spoken on a particular legal issue, decision by intermediate courts will be highly persuasive data, but they are not binding, on the issue of what the law of the state is.

Meredith v. City of Winter Haven - A federal court cannot refuse jurisdiction because there is no ascertainable state law on the topic.

Salve Regina College v. Russell - A court of appeals should review de novo a district court's determination of state law.

Erie Railroad v. Tompkins , 304 U.S. 64, Supreme Court of the United States, Mr. Justice Brandeis, 1938

Case Brief

FACTS:

Tompkins was walking home along a well-trodden footpath running parallel to the Erie Railroad tracks when he was struck by "a black object that looked like a door" protruding from a passing train. Tompkins right arm was severed.Under PA law, a traveler like Tompkins on a parallel path was regarded as a trespasser to


whom the railroad merely owes a duty to avoid wanton negligence. The majority rule in most states, however, was that a railroad owes a duty of ordinary care to a traveler on a parallel footpath.They tried to avoid the harsh PA rule by suing the NY-based railroad in federal court. The District Court applied "general law," the majority rule, and the jury awarded Tompkins damages.The Court of Appeals affirmed.

ISSUE:

Whether its duty toward plaintiff should have been determined in accordance with the law as found by the highest court of PA.Whether the evidence conclusively showed plaintiff guilty of contributory negligence.

RULE:

Swift v. Tyson held that federal courts exercising jurisdiction on the ground of diversity or citizenship need not, in matters of general jurisprudence, apply the unwritten law of the state as declared by its highest court; that they are free to exercise an independent judgment as to what the common law of the state is - or should be.In all matters except those in which some federal law is controlling, the federal courts exercising jurisdiction in diversity of citizenship cases would apply as their rules of decision the law of the state, unwritten as well as written.

APPLICATION:

Experience in applying the doctrine of Swift v. Tyson, had revealed its defects, political and social; and the benefits expected to flow from the rule did not accrue.Except in matters governed by the Federal Constitution or by acts of Congress, the law to be applied in any case is the law of the state.In applying the doctrine this Court and the lower courts have invaded rights which in our opinion are reserved by the Constitution to the several states.

CONCLUSION:

The judgment is reversed and the case remanded to it for further proceedings in conformity with our opinion.

Guaranty Trust Co. v. York , 326 U.S. 99, Supreme Court of the United States, Mr. Justice Frankfurter, 1945

Case Brief

FACTS:

The Guaranty Trust Company served as trustee for some of the noteholders of Van


Swerignen. Guaranty loaned money to corporations affiliated with and controlled by Van Sweringen.The corporation was having trouble meeting its financial obligations. Guaranty and several other banks worked out a plan by which Guaranty would offer to purchase the notes.Respondent York received notes from a donor who had not accepted Guaranty's offer.

ISSUE:

Whether federal courts should apply state statutes of limitation in such cases.Whether, when no recovery could be had in State court because the action is barred by the statute of limitations, a federal court in equity can take cognizance of the suit because there is diversity of citizenship between the parties.

RULE:

The Judiciary Act of 1789 - the "laws of the several states shall be regarded as rules of decision in trials of common law."The forms and modes of proceeding in suits of equity would conform to the settled uses of courts of equity.Erie R. Co. v. Tompkins - In all cases where a federal court is exercising jurisdiction solely because of the diversity of citizenship of the parties, the outcome of the litigation in the federal court should be substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if tried in a State court.

APPLICATION:

Here we are dealing with a right to recover derived not from the United States but from one of the States.

CONCLUSION:

The fortuitous circumstances of residence out of a State of one of the parties to a litigation ought not to give rise to a discrimination against others equally concerned by locally resident. The source of substantive rights enforced by a federal court under diversity jurisdiction, it cannot be said too often, is the law of the States.

Byrd v. Blue Ridge Rural Electric Cooperative , 356 U.S. 525, Supreme Court of the United States, Mr. Justice Brennan, 1958

Case Brief

FACTS:

Jurisdiction was based on diversity of citizenship. The petitioner, a resident of NC, sued respondent, an SC corporation, for damages for injuries allegedly caused by the


respondent's negligence.The respondent is in the business of selling electric power to subscribers in rural section of SC. The petitioner was employed as a lineman in the construction crew of a construction contractor. The contractor held a contract with the respondent.The petitioner was injured while connecting power lines to one of the new substations.

ISSUE:

Whether the Court of Appeals erred in directing judgment for respondent without a remand to give petitioner an opportunity to introduce further evidence.Whether petitioner, state practice notwithstanding, is entitled to a jury determination of the factual issues raised by this defense.Whether on remand the factual issue is to be decided by the judge or by the jury.

I. Whether the claim of an injured workman is within the Commission's jurisdiction.II. Whether the federal policy favoring jury decisions of disputed fact questions should yield to the state rule in the interest of furthering the objective that the litigation should not come out one way in the federal court and another way in the state court.III. Whether the issue of immunity is decided by a judge or a jury.

RULE:

I. Erie R. Co. v. Tompkins - The federal courts in diversity cases must respect the definition of state-created rights and obligations by the state courts.

APPLICATION:

I. The SC Supreme Court states no reasons in why, although the jury decides all other factual issues raised by the cause of action and defenses, the jury is displaced as to the factual issue raised by the affirmative defense.II. State statutes and constitutional provisions could not disrupt or alter the essential character or function of a federal court.

CONCLUSION:

I. The requirement appears to be merely a form and mode of enforcing the immunity and not a rule intended to be bound up with the definition of the rights and obligations of the parties.II. In the circumstances of this case the federal court should not follow the state rule.III. We do not think the likelihood of a different result is so strong as to require the federal practice of jury determination of disputed factual issues to yield to the state rule in the interest of uniformity of outcome.

Hanna v. Plumer , 380 U.S. 460, Supreme Court of the United States, Mr. Chief Justice Warren, 1965


Case Brief

FACTS:

Petitioner, a citizen of OH, filed her complaint in MA, claiming damages for personal injuries resulting from an automobile accident in SC, allegedly caused by the negligence of Osgood, an MA citizen deceased at the time of filing of the complaint.Respondent, Mrs. Osgood's executor and also an MA citizen, was named as defendant.Service was made by leaving copies of the summons and the complaint with respondent's wife at the residence.Respondent filed his answer alleging that the action could not be maintained because it had been brought contrary to and in violation of the provision of MA General Laws.The District Court granted respondent's MSJ.The Court of Appeals concluded that the conflict of state and federal rules was over a substantive rather than a procedural matter, and unanimously affirmed.

ISSUE:

Whether, in a civil action where the jurisdiction of the United States District Court is based upon diversity of citizenship between the parties, service of process shall be made in the manner prescribed by state laws or that set forth in Rule 4(d)(1) of the Federal Rules of Civil Procedure.

RULE:

Erie R. Co. v. Tompkins - Federal courts sitting in diversity cases, when deciding questions of "substantive" law, are bound by state court decisions as well as state statutes.

APPLICATION:

It is doubtful that, even if there were no Federal Rule making it clear that in hand service is not required in diversity actions, the Erie rule would have obligated the District Court to follow the MA procedure.Petitioner, in choosing her forum, was not presented with a situation where application of the state rule would wholly bar recovery; rather, adherence to the state rule would have resulted only in altering the way in which process was served.

CONCLUSION:

The adoption of Rule 4(d)(1), designed to control service of process in diversity actions, neither exceeded the congressional mandate embodied in the Rules Enabling Act nor transgressed constitutional bounds, and that the Rule is therefore the standard against which the District Court should have measured the adequacy of the service.Accordingly, we reverse the decision of the Court of Appeals.To hold that a Federal Rule of Civil Procedure must cease to function whenever it alters the mode of enforcing state-created rights would be to disembowel either the Constitution's grant of power over federal procedure or Congress' attempt to exercise that


power in the Enabling Act. Rule 4(d)(1) is valid and controls the instant case.

Walker v. Armco Steel Corp. , 446 U.S. 740, Supreme Court of the United States, Justice Marshall, 1980

Case Brief

FACTS:

Petitioner, a carpenter, was injured while pounding a nail into a cement wall. Respondent was the manufacturer of the nail.Petitioner is a resident of OK, and respondent is a foreign corporation having its principal place of business in a State other than OK.The complaint was filed on Aug. 19th. Although summons was issued that same day, service of process was not made on respondent's authorized service agent until Dec. 1st.Respondent filed a motion to dismiss the complaint on the ground that the action was barred by the applicable OK statute of limitations.Although the complaint had been filed within the 2-year statute of limitations, state law does not deem the action "commenced" for purposes of the statute of limitations until service of the summons on the defendant.The District Court dismissed the complaint as barred by the OK statute of limitations.The Court of Appeals affirmed.

ISSUE:

Whether in a diversity action the federal court should follow state law or, alternatively, Rule 3 of the of the FRCP in determining when an action is commenced for the purpose of tolling the state statute of limitations.Whether the scope of the Federal Rule in fact is sufficiently broad to control the issue before the Court.

RULE:

Where the Federal Rule was clearly applicable, the test was whether the Rule was within the scope of the Rules Enabling Act, and if so, within a a constitutional grant of power such as the Necessary and Proper Clause of Art. I.

APPLICATION:

The complaint was filed in federal court under diversity jurisdiction within the 2-year statute of limitations, but service of process did not occur until after the 2-year period and the 60-day service period had run.The instant action is barred by the statute of limitations unless Ragan is no longer good law.Since there is no direct conflict between the Federal Rule and the state law, the Hanna analysis does not apply. Instead, the policies behind Erie and Ragan control the issue.


CONCLUSION:

In diversity actions Rule 3 governs the date from which various timing requirements of the Federal Rules begin to run, but does not affect state statutes of limitations.There is simply no reason why, in the absence of a controlling federal rule, an action based on state law which concededly would be barred in the state courts by the state statute of limitations should proceed thorough litigation to judgment in federal court solely because of the fortuity that there is diversity of citizenship between the litigants.

Stewart Organization, Inc. v. Ricoh , 487 U.S. 22, Supreme Court of the United States, 1988

Case Brief

FACTS:

Dispute concerns a dealership agreement that obligated petitioner company, an AL corporation, to market copier products of respondent, a nationwide manufacturer with its principal place of business in NJ. The agreement contained a forum-selection clause providing that any dispute arising out of the contract could be brought only in a court located in Manhattan.Petitioner brought a complain in AL.Relying on the contractual forum-selection clause, respondent moved either to transfer the case to NY or to dismiss the case for improper venue.The District Court denied the motion.On appeal, the 11th Circuit reversed.

ISSUE:

Whether a federal court sitting in diversity should apply state or federal law in adjudicating a motion to transfer a case to a venue provided in a contractual forum-selection clause.

RULE:

§ 1404(a) is intended to place discretion in the district court to adjudicate motions for transfer according to an individualized, case-by-case consideration of convenience and fairness.

APPLICATION:

When the federal law sought to be applied is a congressional statute, the first and chief question for the district court's determination is whether the statute is sufficiently broad to control the issue before the Court.If the district court determines that a federal statute covers the point in dispute, it


proceeds to inquire whether the statute represents a valid exercise of Congress' authority under the Constitution.We believe that the statute, fairly construed, does cover the point in dispute.AL law may refuse to enforce forum-selection clauses providing for out-of-state venues as a matter of state public policy. If that is so, the District Court will have either to integrate the factor of the forum-selection clause into its weighing of considerations as prescribed by Congress, or else to apply, as it did in this case, AL's categorical policy disfavoring forum-selection clauses.Our cases make clear that, as between these two choices in a single field of operation, the instructions of Congress are supreme.Because § 1404(a) controls the issue before the District Court, it must be applied if it represents a valid exercise of Congress' authority under the Constitution.

CONCLUSION:

A transfer pursuant to § 1404(a) does not carry with it a change in the applicable law. It therefore falls comfortably within Congress' powers under Article III as augmented by the Necessary and Proper Clause.Federal law governs the District Court's decision whether to give effect to the parties' forum-selection clause and transfer this case to a court in Manhattan.

Gasperini v. Center for Humanities, Inc. , 116 S.Ct. 2211, Supreme Court of the United States, Justice Ginsburg, 1996

Case Brief

FACTS:

Gasperini agreed to supply his original color transparencies to the Center for use in an educational videotape.The Center agreed to return the original transparencies, but upon the completion of the project, it could not find them.Gasperini commenced suit in NY, invoking the court's diversity jurisdiction.The Center conceded liability for the lost transparencies and the issue of damages was tried before a jury.The jury awarded Gasperini $450,000 in compensatory damages.The Court of Appeals vacated the judgment.The 2nd Circuit concluded that testimony on industry standard alone was insufficient to justify a verdict.The 2nd Circuit set aside the $450,000 verdict and ordered a new trial, unless Gasperini agreed to an award of $100,000.

ISSUE:

The compatibility provisions, in an action based on NY law but tried in federal court by reason of the parties' diverse citizenship.


Whether federal courts can give effect to the substantive thrust of § 5501(c) without untoward alteration of the federal scheme for the trial and decision of civil cases.

RULE:

Under the law of NY, appellate courts are empowered to review the size of jury verdicts and to order new trials when the jury's award deviates materially from what would be reasonable compensation.Under the 7th Amendment, which governs proceedings in federal court, but not in state court, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.Where a federal court is exercising jurisdiction solely because of the diversity of citizenship of the parties, the outcome of the litigation in a federal court should be substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if tried in a State court.

APPLICATION:

CPLR § 5501(c) is both "substantive" and "procedural"; "substantive" in that § 5501(c)'s "deviates materially" standard controls how much a plaintiff can be awarded; "procedural" in that § 5501(c) assigns decision making authority to NY's Appellate Division.Nothing in the 7th Amendment precludes appellate review of the trial judge's denial of a motion to set aside a jury verdict as excessive.

CONCLUSION:

NY's law controlling compensation awards for excessiveness or inadequacy can be given effect, without detriment to the 7th Amendment, if the review standard is applied by the federal trial court judge, with appellate control of the trial court's ruling limited to review for "abuse of discretion."We vacate the judgment of the Court of Appeals and instruct that court to remand the case to the District Court so that the trial judge, revisiting his ruling on the new trial motion, may test the jury's verdict against CPLR § 5501(c)'s "deviates materially" standard.

B. The Problem of Ascertaining State Law


1. Determining Which State's Law Governs

Klaxon Co. v. Stentor Electric Mfg. Co. (1941) - In order to promote the desired uniform application of substantive law within a state, federal courts must apply the conflicts-of-law rules of the states in which they sit.


2. Ascertaining the State Law

Certification provides an alternative method of ascertaining state law.Certification is a procedure that allows the court of one system to petition the court of another system for the answer to an unresolved legal question.Unlike federal courts, state courts are allowed to give advisory opinions.

Topic Lectures

Recorded Lecture:

Inverse Erie Doctrine

Federal Employee's Liability Act - allows a federal worker claim to be brought in state court.

When a federal right is tried in a state court, the state court must conduct itself like a federal court, including providing a jury where applicable.

Brown v. Western Railway - Brought in Georgia state court. Statute required that a pleading be viewed in the light least favorable to the pleader, whereas federal rule would review in favor of the pleader ("liberality of construction').

Mason v. American Emery Wheel Works , 241 F.2d 906, 1st Circuit, United States Court of Appeals, First Circuit, Magruder, Chief Judge, 1957

Case Brief

FACTS:

Mason, a citizen of MS, filed his complaint in RI against American Emery Wheel Works, an RI corporation.The case was one in tort for personal injuries alleged to have been suffered by the plaintiff in MS as a result of negligent misfeasance by the defendant in putting out in commerce without adequate care and inspection, a dangerously defective emery wheel.Motion to dismiss was granted by the district court.

ISSUE:

RULE:

MS law - A manufacturer was not liable for negligence in the manufacture of appliances which could and would become highly dangerous when put to the uses for which they are


intended, where there is no privity of contract between the user and the manufacturer.

APPLICATION:

We think it is fair to infer from this latest expression by the Supreme Court of MS that it is prepared to reconsider and revise the rule whenever it may have before it a case that squarely presents the issue. We have no doubt that when this occasion does come to pass, the Supreme Court of MS will declare itself in agreement with the more enlightened and generally accepted modern doctrine.

CONCLUSION:

A judgment will be entered vacating the order of the District Court, dismissing the complaint and remanding the case to the District Court for further proceedings not inconsistent with this opinion.

C. Federal "Common Law"

D. Federal Law in the State Courts

Topic Lectures

Class Chat:

Inverse Erie Doctrine - When a state court is deciding a federal issue, the state court must apply federal law.

Dice v. Akron - State court must follow federal law because it is the federal law which created the rights and remedies. Jury trial was too important to be blocked by state law.

Civil Procedure – Module 11Ascertaining the Applicable Law: Federal Law

VI. Ascertaining the Applicable Law

C. Federal "Common Law"


The Court broadly interpreted Clearfield as permitting federal courts to develop federal law for questions involving the rights of the United States arising under nationwide federal programs.

Topic Hornbook

The decision in Erie Railroad Company v. Tompkins clearly stated that except in matters governed by the Federal Constitution or by acts of Congress, the law to be applied in any


case in the law of the state, and there is no federal general common law.

Federal common law displaces state statutory as well as state decisional law.Whenever federal common law governs a particular issue, it must be applied whether the case is in a state or in a federal court.Federal courts are not free to develop federal common law on all matters of "general" as distinguished from "local" law as was true under Swift, but are restricted to matters of substantial national concern that fall within the powers given the federal government by the Constitution.

The areas in which federal courts have applied federal common law most frequently include:1. admiralty and maritime cases;2. interstate disputes;3. proceedings raising matters of international relations;4. actions involving gaps in federal statutory provisions; and5. cases concerning the legal relations and proprietary interests of the United States.

The constitutional grant of admiralty jurisdiction in Article III gave the federal courts and Congress the power to develop a uniform body of substantive federal maritime law, which would constitute part of "national law."

Another substantive area in which federal common law has been applied involved disputes arising between two or more states.A third area in which common law is authorized involves the international relations of the United States.

The federal courts also have fashioned common law in situations in which Congress expressly or impliedly has delegated the authority to do so by statute or statutory scheme. There are two such types of judicial lawmaking.The first is a byproduct of the fact that statutes cannot be written with sufficient detail to cover every possible question of construction and application that might arise.The second type of statutory authorization occurs when Congress provides a skeletal legislative scheme and permits the federal courts to formulate a detailed body of substantive law under it.The authority to apply federal common law has been recognized in matters involving the determination and definition of the government's legal relations and proprietary interests.

Clearfield Trust Company v. United States - The rights and duties of the Government on its commercial paper are controlled by federal common law.

The fact that an area of law has been recognized as requiring the application of federal common law does not necessarily mean that state law will be ignored.Federal courts in their discretion may decide that on a given matter state law is the most appropriate choice, and adopt it as the federal rule of decision.


Clearfield Trust Co. v. United States , 318 U.S. 363, Supreme Court of the United States, Mr. Justice Douglas, 1943

Case Brief

FACTS:

A check issued by the United States had been mailed, but was not received by its intended recipient. An unknown person, who presumably had stolen the check, cashed the check. Clearfield then endorsed the check with a guarantee of all prior endorsements. Federal officials did not inform any the interested parties of the forgery until eight months after they had learned that the intended recipient had not received the check.The United States sued Clearfield on Clearfield's express guarantee of prior endorsements. The District Court held that the rights of the parties were to be determined by the law of PA. Since the United States had unreasonably delayed giving notice of the forgery, it was barred from recovery under PA law and the District Court dismissed the complaint.

ISSUE:

RULE:

APPLICATION:

The rule of Erie R. Co. v. Tompkins does not apply to this action. The rights and duties of the United States on commercial paper which it issues are governed by federal rather than local law.If it is shown that the drawee on learning of the forgery did not give prompt notice of it and that dmaage resulted, recovery by the drawee is barred.The damage occasioned by the delay must be established and not left to conjecture.No such damage has been shown by Clearfield.

CONCLUSION:

Affirmed.

Miree v. DeKalb County , 453 U.S. 25, Supreme Court of the United States, Mr. Justice Rehnquist, 1977

Case Brief

FACTS:

Suit involves the crash of a Lear Jet shortly after takeoff.


Petitioners seek to impose liability on respondent as third-party beneficiaries of contracts between it and the FAA. Under the terms of the contracts respondent agreed to take action to restrict the use of land adjacent to or in the immediate vicinity of the Airport to activities and purposes compatible with normal airport operations including landing and takeoff of aircraft.Respondent breached the FAA contracts by owning and maintaining a garbage dump adjacent to the airport.The cause of the crash was the ingestion of birds swarming from the dump into the jet engines of the aircraft.

ISSUE:

Whether federal or state law should have been applied to the claim.Whether petitioners as third-party beneficiaries of the contracts have standing to sue respondent.

RULE:

APPLICATION:

Since the only basis of federal jurisdiction alleged for petitioners' claim against respondent is diversity of citizenship, the case would unquestionably be governed by GA law.The application of federal common law to resolve the issue presented here would promote no federal interests even approaching the magnitude of those found in Clearfield.

CONCLUSION:

Any federal interest in the outcome of the question before us is far too speculative, far too remote a possibility to justify the application of federal law to transactions essentially of local concern.

Boyle v. United Technologies Corp. , 487 U.S. 500, 108 S.Ct. 2510, 101 L.Ed.2d 442, Supreme Court of the United States, Justice Scalia, 1988

Case Brief

FACTS:

Boyle was killed when the helicopter in which he was flying crash.

ISSUE:

When a contractor providing military equipment to the Federal Government can be held


liable under state tort law for injury caused by a design defect.

RULE:

A few areas, involving uniquely federal interests, are so committed by the Constitution and laws of the United States to federal control that state law is pre-empted and replaced, where necessary, by federal law of a content prescribed (absent explicit statutory directive) by the courts - so-called "federal common law."Obligations to and rights of the United States under its contracts are governed exclusively by federal law.The civil liability of federal officials for actions taken in the course of their duty is controlled by federal law.The displacement of state law will occur only where a significant conflict exists between an identifiable federal policy or interest and the operation of state law, or the application of state law would frustrate specific objectives of federal legislation.

APPLICATION:

The present case does not involve an obligation to the United States under its contract, but rather liability to third persons.The state-imposed duty of care that is the asserted basis of the contractor's liability is precisely contrary to the duty imposed by the Government contract.

CONCLUSION:

State law which holds Government contractors liable for design defects in military equipment does in some circumstances rpesent a significant conflict with federal policy and must be displaced.

D. Federal Law in the State Courts


When a state attempts to adjudicate a right for a cause of action that can be asserted by plaintiff in either a state or federal court but which defendant cannot remove from a state court, the Supremacy Clause requires the application of federal law.

Topic Lectures

Class Chat:

Inverse Erie Doctrine - When a state court is deciding a federal issue, the state court must apply federal law.

Dice v. Akron - State court must follow federal law because it is the federal law which created the rights and remedies. Jury trial was too important to be blocked by state law.


Topic Hornbook

B. State Courts

§ 4.8 Federal Law in State Courts

Article III of the Constitution gives Congress the power to create exclusive jurisdiction in the federal courts over all matters within the judicial authority of the federal government.In all disputes involving federal law matters as to which Congress has not made federal court jurisdiction exclusive, the state courts have concurrent jurisdiction with the federal courts.

Because of concurrent jurisdiction, a state court often is required to construe and apply federal law.

The enforcement of federal law by state courts has been called the "inverse-Erie" doctrine.

Dice v. Akron, Canton & Youngstown R. Co. , 342 U.S. 359, Supreme Court of the United States, Mr. Justice Black, 1952

Case Brief

FACTS:

Petitioner, a railroad fireman, was seriously injured when an engine in which he was riding jumped the track.

ISSUE:

RULE:

APPLICATION:

Validity of released under the Federal Employees' Liability Act raises a federal question to be determined by federal rather than state law.

CONCLUSION:

The correct federal rule is that a release of rights under the Act is void when the employee is induced to sign it by the deliberately false and material statements of the railroad's authorized representatives made to deceive the employee as to the contents of the release.The right to a trial by jury is too substantial a part of the rights accorded by the Act to permit it to be classified as a mere local rule of procedure for denial in the manner that


Ohio has here used.

Civil Procedure – Module 12Pleadings: The Complaint

VIII. Modern Pleading


Traditionally, pleading rules served four functions:1. providing notice of the nature of a claim or defense;2. identifying baseless claims;3. setting each party's view of the facts; and4. narrowing the issues.

Topic Hornbook

§ 5.1 Introduction

Modern pleadings were to set forth the parties' contentions of fact so as to guide the court as well as the parties throughout the pendency of the case.

§ 5.2 The Function and Effectiveness of Modern Pleading

Pleadings have two functions:1. they permit the elimination from consideration of contentions that have no legal significance; and2. they guide the parties and the court in the conduct of cases.

§ 5.3 Types of Pleadings

The initial pleading is the complaint or petition in which plaintiff sets forth allegations and prayer for relief. The complaint is followed by the answer in which defendant may deny allegations made in the complaint and, in addition, may set forth affirmative allegations regarding defenses and counteractions.

In addition to defending against a plaintiff's claims, the defendant may utilize the answer to file affirmative claims.A response to such an affirmative claim must be made by the party against whom it is asserted. This response may be referred to as an "answer," or it may be called a "reply."

If the new claim has an appropriate relationship to the existing claims as required by the system's rules, an additional pleading should be considered appropriate.

Federal Rule 7(a) - There shall be a reply to a counterclaim denominated as such. No pleading other than those specifically enumerated shall be allowed.


A challenge to the legal sufficiency of a complaint or answer is called a "demurrer" and is denominated a "pleading."

A. The Complaint

Topic Lectures

Originally, pleadings asserted the parties' positions, give notice, state the relevant facts, and identify the issues.

Modern pleading is limited to notice.

The original common law system was replaced in 1848 by the "code system."Pleader had to plead facts, not the law, but not too much detail.

Federal Rule 8(a) - Describes the amount of specificity that modern pleading requires. Needs to set forth a short and plain statement indicating that the pleader is entitled to relief.

Special Pleading Rules (Federal Rule 9)

Federal Rule 9(b) - When pleading fraud, the circumstances of the fraud must be pleaded with particularity.Claims involving fraud involve moral turpitude, so requirements for pleading are more strict.

Federal Rule 9(c) - Plaintiff must claim all conditions precedent satisfied for a breach of contract claim. Defendant must prove that any particular condition precedent was not satisfied and plead it in his answer.

complaint - Plaintiff states his grievanceanswer - Defendant responds one by one to each assertion in the complaint.

Federal Rule 15 - Amending the pleading. Different types of amendments are allowed at different time frames. Plaintiff can amend the pleading once at the beginning without issue, as long as the answer has not been filed yet. Any time you want to amend beyond the initial time frame, you need to make a motion. That motion "shall be freely granted" since court wants to get to the truth (as long as it's prior to trial).

Federal Rule 15(b) - Available once trial starts, intended to handle the introduction of deviating evidence. Usually invoked by the plaintiff. Deviation should be allowed to promote justice unless defendant will be prejudiced by doing so.

Federal Rule 15(c) - "relation back" - Amendment is given date of original pleading. Allowed when the amendment is related to the original cause of action.


You can only relate back to add a party if it's the same cause of action and within the SOL, that party must have known of the litigation and known that but for a mistake he should have been joined as a party to that litigation. Also, failure to join did not cause that person to be prejudiced.

When lawyer signs a pleading, he is certifying that the pleading is proper, position taken is warranted by existing law, there is an evidentiary basis for the statements made, and that matters without personal knowledge are made on information that you believe to be true.

Federal Rule 11 - Provides sanctions against attorneys for improper pleading. Don't need to prove that it was malevolent, only improper. Now requires that you make a motion, allowing defendant 21 days to "rethink the paper". If withdrawn within that time period, no sanctions result. Emphasis on monetary sanctions have been sharply reduced. Certification applies to all papers filed throughout the course of litigation, including an obligation to withdraw previously filed papers if new knowledge leads you to believe differently.

1. Detail Required Under the Codes

Topic Hornbook

1. Code Pleading

§ 5.4 Pleading a Cause of Action: A Definition

A litigant under a traditional code formulation is required to allege a plain and concise statement of the facts constituting each cause of action (defense or counterclaim) without unnecessary repetition.

Two definitions of "cause of action":1. "Primary Right" Theory - A cause of action is related to the nature of the injury alleged to have been suffered.2. "Aggregate of Operative Facts" Theory - A cause of action is defined not by the

substantive law to be applied, or the nature of relief sought, or the type of harm suffered, but solely by the events that give rise to a claim or claims for relief.

"Theory of the Pleadings" Doctrine - Requires the pleader to tailor the pleadings to a specific legal theory. Penalized parties with valid claims who misconceived the proper legal basis for recovery.

A defendant who wishes to explore the legal bases for the plaintiff's case may do so by challenging the legal sufficiency of the complaint.

§ 5.5 The Uncertain Meaning of "Facts" in the Code-Pleading System

The pleader is expected to set forth only the ultimate facts, free from evidentiary facts


and conclusions of law.

Unless there is a clear-cut decision regarding the matter in the relevant jurisdiction, the pleader will be wise to plead not only the "conclusion" but more detailed facts as well.

Courts today will not uphold a challenge to the sufficiency of a pleading when the defect is the pleading of evidentiary facts from which the ultimate facts necessarily follow.

§ 5.6 Challenges Based on Indefiniteness, Ambiguity, or Uncertainty

Almost all code states have some provision for attacking the form of a pleading on the ground that it is uncertain or ambiguous. This may be by means of a special type of demurrer or by a request for a court order for a fuller and more particular statement.

general demurrer - motion to dismiss for failure to state a claim or defense. Can be raised at any time up to and during trial, even on appeal.

An attack on form is waived unless brought up at the earliest opportunity.

Gillispie v. Goodyear Service Stores , 128 S.E.2d 762, North Carolina, Supreme Court of North Carolina, Bobbitt, Justice, 1963

Case Brief

FACTS:

ISSUE:

RULE:

Plaintiff was required to make a plain and concise statement of the facts constituting a cause of action.The complaint must disclose the issueable facts and allege the material, essential and ultimate facts upon which plaintiff's right of action is based.

APPLICATION:

CONCLUSION:

The allegations were insufficient.The pleading was necessary not only to enable the opposing party to respond but also to enable the court to declare the law upon the facts stated.

2. Detail Required Under the Federal Rules


Topic Hornbook

2. Notice Pleading

§ 5.7 The Basic Requirements of Notice Pleading

Federal Rule 8(a)(2) - Requires a party to set forth a short and plain statement of the claim showing that the pleader is entitled to relief.

The issue becomes whether the opposing party has been sufficiently notified concerning the claim (or defense) so as to be able to prepare to meet it.Thus a pleader must still set forth factual allegations, although they can be inferential rather than direct, regarding each element to sustain recovery under some legal theory.As long as the opposing party and the court can obtain a basic understanding of the claim being made, the requirements are satisfied.

Federal Rule 8(f) - All pleadings shall be so construed as to do substantial justice.

§ 5.8 Adjustment of Federal and State Courts to Notice Pleading

Federal Rule 84 - States that the forms contained in the Appendix to the Rules are sufficient.

§ 5.9 Special Rules for Specific Cases and Facts

Special pleading rules requiring greater specifics and detail should apply to certain cases.

Federal Rule 9(b) - In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.

Federal Rule 9(g) - When items of special damages are claimed, they shall be specifically stated.

§ 5.10 The Role of Motions to Clarify Pleadings

Federal Rule 12(e) - Provides only for clarification of a pleading that is so uncertain that a proper response cannot be made; it is not to be used as a substitute for discovery. It is unavailable to a party who does not have to respond to an opponent's pleading, even though that pleading may be unclear.

3. Truthfulness in Pleading

§ 5.11 Devices to Assure Candor in Pleading

The two most common methods employed by jurisdictions to promote candor in pleading: the attorney-signature requirement and verification.


In many jurisdictions pleading rules require that every pleading be signed, usually by the attorney, or, if a party is unrepresented, by the party who files it.

Federal Rule 11 (1983) - Required signatures on all pleadings and motions, and was extended to cover discovery requests and responses.The signature attested that the person:1. had read the document,2. had concluded, after reasonable inquiry into both the facts and the law, that to the best

of the person's knowledge, information, and belief the pleading or motion was well grounded, and

3. had acted in good faith, without any improper motivation.

Federal Rule 11 (1993):1. Extends the obligation to every pleading, written motion, or other paper presented to the court whether by signing, filing, submitting, or later advocating a position.2. Requires a person, who may have signed a pleading or motion in good faith, to cease advocating a position that the person has learned is untenable on the facts or the law.3. No longer applies to matters of discovery since they are governed by their own specific provisions.4. Requires a party who seeks sanctions to do so by separate motion that must be served on the alleged offender.5. Makes clear that the purpose of sanctions is to deter improper conduct and not to compensate the opposing party.6. Specifies that in the ordinary course a law firm may be held jointly responsible for violations committed by its partners, associates, and employees.7. Provides a number of limitations on what sanctions can be imposed.

The second device that various jurisdictions use to ensure candor in pleading is a verification requirement.Under standard code provisions, verification has to be made by one of the parties (or an officer or managing agent of a party), except in certain specified situations. A person who verifies a pleading must aver that he has personal information as to the facts alleged or concerning the facts and on that basis believes them to be true.

Federal courts have inherent power to sanction attorneys and clients for misconduct in the course of a case whether or not Rule 11-type provisions are applicable.

§ 5.14 Format Requirements: The Basic Elements of the Complaint

In some instances, the state judicial council or other comparable body has drafted some official forms that may be used.

All jurisdictions require that the complaint contain a caption giving the name of the court, the title of the action, and the names of the parties. Errors in the caption are treated as matters of form, not substance, and typically can be corrected by amendment.


The next element in the complaint is the jurisdiction allegation.In federal courts, jurisdictional allegations are required.

The third and major element of the complaint is the body of allegations comprising the cause of action or claim for relief.

The final portion of a complaint, the prayer, contains the demand for the relief to which the pleader believes he or she is entitled.If the case is litigated, the plaintiff will be awarded all the relief to which she is entitled, whether or not that relief was part of the demand.

Dioguardi v. Durning , 139 F.2d 774, 2nd Circuit, United States Circuit Court of Appeals, Second Cir, Clark, Circuit Judge, 1944

Case Brief

FACTS:

Plaintiff attempts to assert a series of grievances against the Collector of Customs at the Port of NY growing out of his endeavors to import merchandise from Italy of great value consisting of bottles of 'tonics'.

ISSUE:

RULE:

Under the new rules of civil procedure, there is no pleading requirement of stating facts sufficient to constitute a cause of action, but only that there be a short and plain statement of the claim showing that the pleader is entitled to relief (Rule 8(a)).

APPLICATION:

We think that the plaintiff has disclosed his claims that the collector has converted or otherwise done away with two of his cases of medicinal tonics and has sold the rest in a manner incompatible with the public auction he had announced.We do not see how the plaintiff may properly be deprived of his day in court to show what he obviously so firmly believes and what for present purposes defendant must be taken as admitting.

CONCLUSION:

Judgment is reversed and the action is remanded for further proceedings not inconsistent with this opinion.

3. Pleading the Right to Relief



The Burden of Pleading and the Burden of Production

The burden of pleading an issue usually is assigned to the party who has the burden of producing evidence on that issue at trial, although the burden of pleading need not coincide with the burden of producing evidence.

Topic Hornbook

§ 5.15 Pleading a Right to Relief

The plaintiff must set forth sufficient information to allege a right to relief.The pleader first must know the essential elements upon which the claim or claims will be based.

The plaintiff is not required to allege the existence or nonexistence of each and every factor that might affect the outcome of the litigation.

A party bears the responsibility for pleading those matters upon which that party must produce proof at trial.

The party who seeks redress must establish those factors at the heart of the claim that are considered vital if redcovery is to be allowed. The defending party has the duty to prove those special matters that would limit or avert recovery.

The party seeking redress must assume the burden of establishing any additional matter that would avoid defenses established by the defending party.

Garcia v. Hilton Hotels International, Inc. , 97 F.Supp. 5, United States District Court, Districdt of Puerto, Roberts, District Judge, 1951

Case Brief

FACTS:

The action here is for damages for defamation brought by plaintiff against defendant.

ISSUE:

Whether the allegations of Paragraph 4 of the complaint state a claim upon which relief can be granted.

RULE:


The complaint is to be construed in the light most favorable to the plaintiff with all doubts resolved in his favor and the allegations accepted as true. If, when a complaint is so considered, it reasonably may be anticipated that plaintiff, on the basis of what has been alleged, could make out a case at trial entitling him to some relief, the complaint should not be dismissed.When it appears from a complaint that absolute privilege exists, the defense of failure to state a claim properly may be asserted to accomplish a dismissal on motion under rule 12(b).When allegations are sufficient to sustain the defense of conditional privilege they will be, generally, sufficient to permit the introduction of evidence tending to prove abuse of the privilege or actual malice.A publication of communication shall not be held or deemed malicious when made in any legislative or judicial proceeding or in any other proceeding authorized by law.

APPLICATION:

Paragraph 4 of the complaint fails to state, in so many words, that there was a publication of the alleged slanderous utterance and, to that extent, the cause of action is defectively stated.Under such allegations it reasonably may be conceived that plaintiff, upon trial, could adduce evidence tending to prove a publication.Defendant is entitled to raise the defense of conditional privilege.The hearing on plaintiff's claim by the Labor Department is a proceeding authorized by law.Communications made by witnesses in the course of such hearings, should be absolutely privileged in the same manner and to like extent as those made in the course of a judicial proceeding.

CONCLUSION:

Defendant's motion to dismiss the complaint for failure to state a claim upon which relief can be granted is denied.

4. Pleading Special Matters


Four policies are typically invoked to justify the requirement of pleading these allegations with particularity:1. protection of reputation:2. deterrence of frivolous or strike suits3. defense of completed transactions4. providing adequate notice

Private Securities Litigation Reform Act (PSLRA) - The statute requires that the complaint specify each statement alleged to have been misleading and give the reason or


reasons why each is misleading. In addition, if an allegation is made on information and belief, all facts on which that belief is formed must be stated with particularity. Finally, facts giving rise to a strong inference that the defendant acted with scienter must be stated with particularity.The Act also stays discovery until after the motion to dismiss has been decided.

Federal Rule 9(b) is limited to cases involving fraud or mistake.

Leatherman (1993) - A federal court may not apply a more stringent pleading standard in civil rights cases.

Topic Hornbook

§ 5.16 Special Problems of Pleading in Specific Cases

The pleading of conditions precedent - In order to establish a right to relief based upon a contract or other duty a plaintiff must show that all conditions precedent to the defendant's duty have occurred or been performed.

A general allegation of performance is specifically permitted.

when a plaintiff intends to rely on an excuse or waiver of a condition as opposed to performance, the general rule is that the plaintiff must plead the excuse or waiver.

The Official Forms attached to the Federal Rules clearly approve the use of the common counts.

Courts typically have been lenient in permitting generalized allegations of negligence, so long as the complaint gives fair notice of the nature of the incident and its time and place.

At common law and under fact-pleading systems, a plaintiff was required to set forth with specificity the details of a fraud. This requirement now generally is extended to include mistake as well. A special provision requires that the circumstances of the fraud and mistake be set forth with particularity.

The attitude toward defamation suits has remained unfavorable as reflected by a generally imposed requirement that the defamatory words be set forth with precision.

special damages - specific harm to one's personal or business reputation. Must be pleaded and proved.

The failure to allege special damages will result in a dismissal of the complaint for failure to state a claim or cause of action.

Although facts regarding general damages need not be pleaded, special damages must be set out in detail.


A plaintiff who fails to plead special damages with the requisite specificity will be barred from introducing evidence on, and, as a result, recovering for those damages.

Some states, by statute, prohibit allegations of punitive damages in an initial pleading.

Denny v. Carey , 72 F.R.D. 574, United States District Court, Eastern District of, Joseph S. Lord, III, Chief Judge, 1976

Case Brief

FACTS:

Plaintiff brings this proposed class action on behalf of himself and other purchasers of First Penn securities alleging violation of federal and state securities laws.

ISSUE:

RULE:

Rule 9(b) does not insulate professionals from claims of fraud where a complaint alleges the fraudulent acts with particularity.FRCP 8 requires a short plain statement of the claim which is simple, concise and direct.The requirement of Rule 9(b) is met when there is sufficient identification of the circumstances constituting fraud so that the defendant can prepare an adequate answer to the allegations.

APPLICATION:

Defendants are incorrect when they argue that Rule 9(b) places a rigorous burden of pleading on plaintiff.

CONCLUSION:

The complaint satisfies the requirement of Rule 9(b).

Swierkiewicz v. Sorema N.A. , 534 U.S. 506, 122 S.Ct. 992, 152 L.Ed.2d 1, Supreme Court of the United States, Justice Thomas, 2002

Case Brief

FACTS:

Petitioner is a native of Hungary. Petitioner began working for respondent Sorema. Petitioner was initially employed in the position of senior VP and CUO. Nearly six years


later, Chavel, respondent's CEO, demoted petitioner to a marketing and services position and transferred the bulk of his underwriting responsibilities to Papadopoulo, who, like Mr. Chavel, is a French national. About a year later, Mr. Chavel appointed Mr. Papadopoulo as CUO. Petitioner unsuccessfully attempted to meet with Mr. Chavel to discuss his discontent. Petitioner sent a memo to Mr. Chavel outlining his grievances and requesting a severance package. Two weeks later, respondent's general counsel presented petitioner with two options: He could either resign without a severance package or be dismissed. Mr. Chavel fired petitioner after he refused to sign.

ISSUE:

Whether a complaint in an employment discrimination lawsuit must contain specific facts establishing a prima facie case of discrimination.

RULE:

FRCP 8(a)(2) provides that a complaint must include only a short and plain statement of the claim showing that the pleader is entitled to relief.If a pleading fails to specify the allegations in a manner that provides sufficient notice, a defendant can move for a more definite statement under Rule 12(e) before responding.

APPLICATION:

The prima facie case relates to the employee's burden of presenting evidence that raises an inference of discrimination.This Court has never indicated that the requirements for establishing a prima facie case also apply to the pleading standard that plaintiffs must satisfy in order to survive a motion to dismiss.Under a notice pleading system, it is not appropriate to require a plaintiff to plead facts establishing a prima facie case because this framework does not apply in every employment discrimination case.Given that the prima facie case operates as a flexible evidentiary standard, it should not be transposed into a rigid pleading standard for discrimination cases.Petitioner's complaint easily satisfies the requirements of Rule 8(a) because it gives respondent fair notice of the basis for petitioner's claims.Rule 8(a) establishes a pleading standard without regard to whether a claim will succeed on the merits.

CONCLUSION:

An employment discrimination complaint need not include such facts and instead must contain only a short and plain statement of the claim showing that the pleader is entitled to relief. FRCP 8(a)(2).An employment discrimination plaintiff need not plead a prima facie case of discrimination and that petitioner's complaint is sufficient to survive respondent's motion


to dismiss.

5. Alternative and Inconsistent Allegations


Virtually all courts today permit inconsistent allegations, whether separately pleaded or not, if htey are made in good faith.

The Separate-Statement Requirement

Rules permitting parties to plead in the alternative usually are coupled with provisions requiring each separate cause of action or defense to be separately stted.Federal Rule 10(b) does not contain a formal separate-statement requirement, although the Rule does express the hope that as far as practicable each paragraph will be limited to a statement of a single set of circumstances.The Rule also requires separation of claims founded on different transactions whenever separation facilitates the clear presentation of the matters set forth.

When a party violates the separate-statement requirement, the appropriate corrective procedure may be a motion to compel separate statements, or a motion to strike, or a special preliminary objection. The party will be allowed to amend his pleading to conform to the rules.

Topic Hornbook

§ 5.12 Ability to Assert Alternative and Inconsistent Allegations

Federal Rule 8(e)(2) - specifically permits claims and defenses that are stated hypothetically or in the alternative or are inconsistent with one another, so long as they are filed in good faith.

The modern trend has not required the plaintiff to make a binding choice in the complaint, and to require the defendant to raise the matter as an affirmative defense. Even if the plaintiff initially demands one form of relief, unless and until some real prejudice to the defendant is shown, the plaintiff can amend the complaint to shift position and demand an inconsistent remedy.

§ 5.13 Method of Asserting Alternative and Inconsistent Allegations: Incorporation of Allegations by Reference

separate-statement requirement - Rules allowing alternative pleadings typically include provisions requiring each cause of action or defense to be separately pleaded, designated and numbered.

Federal Rule 10(b) - calls for a separate paragraph for each single set of circumstances insofar as that is practical.


Federal Rule 10(c) - A party may incorporate facts, once alleged, into other portions of the same pleading. Allegations from another section of a pleading will be incorporated only if there is a direct and explicit reference to the material to be included. Allows incorporation by reference. A copy of any written instrument which is an exhibit to a pleading is a part thereof for all purposes.

If the allegations of a pleading are inconsistent with an exhibit, the exhibit is controlling.

A pleader may not incorporate information in a document that is not attached as an exhibit even if the reference is clear and the document is available3 to the court and the parties.

6. Pleading Damages


Federal Rule 9(g) maintains the traditional distinction between general damages, which can be alleged without particularity, and special damages, which require the pleading of considerable detail.

Special damages are those that normally would not be foreseen as the consequence of defendant's breach and must be plead with particularity.

Ziervogel v. Royal Packing Co. , 2256 S.W.2d 798, Missouri, St. Louis Court of Appeals, Missouri, McCullen, Judge, 1949

Case Brief

FACTS:

This action was brought to recover damages for injuries plaintiff alleged she sustained as a result of a collision between an automobile driven by her and a truck operated by defendant's employee.

ISSUE:

RULE:

Before a plaintiff can recover for a physical condition claimed to have resulted from the negligence of another, such condition must be pleaded or the evidence must establish the condition as being the inevitable or necessary result of injuries which are particularly set out in the petition.When items of special damage are claimed, they shall be specifically stated.A specific personal injury which is not the necessary or inevitable result of an injury alleged in the petition constitutes an element of "special damages" which must be specifically pleaded before evidence thereof is admissible.


APPLICATION:

It is true the evidence in this case does show that defendant had actual notice before trial of plaintiff's increased blood pressure.Although it cannot be said that defendant was surprised when plaintiff presented evidence at the trial relating to the condition of her blood pressure, defendant nevertheless had the right to object to such evidence on the ground that it related to "special damages" which were not pleaded in plaintiff's petition.No only is there no mention of increased blood pressure but no injuries are alleged from which it can reasonably be said that an increase in blood pressure was an inevitable or necessary result.What we have said herein with respect to the evidence of plaintiff's increase of blood pressure applies with equal force to the evidence of the injury to plaintiff's shoulder.

CONCLUSION:

In the absence of any allegation in plaintiff's petition relating to that injury, it was error for the court to admit such evidence.

7. The Prayer For Relief

Bail v. Cunningham Brothers, Inc. , 452 F.2d 182, 7th Circuit, United States Court of Appeals, Seventh Circuit, Pell, Circuit Judge, 1971

Case Brief

FACTS:

Plaintiff's original complaint sought damages in the amount of $100K. On the morning the trial was to begin, plaintiff presented a motion to amend the complaint requesting that the ad damnum clause in the complaint against defendant be increased from $100K to $250K. The district judge denied this motion.The jury notwithstanding the complaint-contained limitation of $100K returned a verdict for the higher figure of $150K. In a post-trial motion Bail sought and was granted leave to amend the complaint by increasing the ad damnum clause to $150K.

ISSUE:

Whether the judgment against defendant should be remitted from $135K to $85K.Whether the normal rule prevailing under 54(c) should be varied.

RULE:

The office of the ad damnum in a pleading is to fix the amount beyond which a party may not recover on the trial of his action.


Amendment may be made to a pleading which does not change the issue or affect the quantum of proof as to a material fact and no good reason is apparent for not applying this privilege of amendment to the ad damnum clause.Pursuant to Rule 54(c) a claimant may be awarded damages in excess of those demanded in his pleadings.Under NY law the granting of the motion to increase the amount sued for, after a jury has rendered its verdict, is an abuse of discretion.

APPLICATION:

Even though it is a diversity case, a matter of procedure is involved and governed, therefore, entirely by the federal rules.We cannot see that the quantum of proof as to any material fact varied or that any change of issues resulted, or would have resulted, from an amendment of the ad damnum clause.Defense counsel were never confronted with an insignificant amount.

CONCLUSION:

The normal rule prevailing under 54(c) should not be varied.Inasmuch as the damages cannot be shown to be excessive, nor to have been dictated by passion and prejudice, the verdict will stand.The jury was in no way aware of the amount of the ad damnum in the complaint and, therefore, clearly their verdict did not reflect a conscious arrival at a figure in excess of the ad damnum.

B. Responding to the Complaint


1. The Time Permitted For a Response

Rule 12(a) gives most defendants twenty days from the service of the complaint to respond either by a motion pursuant to Rule 12 or by answering the complaint.Most judges will order an extension based upon a written stipulation of the attorneys.

2. Motions to Dismiss

a. Historical Antecedents

The origins of the motion to dismiss can be traced to the common-law demurrer.Rules were modified to allow a party to proceed to the merits if the demurrer was overruled and to allow the plaintiff to amend her complaint if the demurrer was sustained.

b. The Motion to Dismiss for Failure to State a Claim

When a defendant challenges the plaintiff's legal entitlement to the relief demanded, even if all well-pleaded facts are taken in the light most favorable to the plaintiff, Rule 12(b)


(6) permits a judgment as a matter of law in favor of the defendant.

Note on the "Speaking Demurrer"

At common law and under the codes, the "speaking demurrer," a demurrer that attempted to introduce material outside the pleadings, was not permitted.A motion for summary judgment is available to challenge the factual basis of a pleading that on its face is sufficient to state a claim or defense.

Note on Rule 12(b) and the Common-Law Plea of Abatement

In addition to a Rule 12(b)(6) motion to dismiss for failure to state a claim, Rule 12(b) provides the pleader with the option of raising six other defense by motion prior to service of a responsive pleading.

3. Other Motions Attacking Pleadings

When a party has included "scandalous," "impertinent," or "irrelevant" matter in a pleading, traditionally, the remedy afforded is a motion to strike.To strike material as scandalous it must be obviously false and unrelated to the subject matter of the action.

4. Answering the Complaint

a. Denials

Rule 8 requires a defendant to make one of three responses to the contents of plaintiff's complaint. Defendant may admit, deny, or plead insufficient information in response to each allegation.Rule 8(d) provides that all averments to which defendant does not specifically respond are deemed admitted.

A motion to strike pursuant to Rule 12(f), is the mechanism for challenging the substantive sufficiency of defenses raised in an adversary's answer or other responsive pleading. A motion for judgment on the pleadings, pursuant to Rule 12(c), is a method of attacking the substantive sufficiency of an opposing party's pleading after all the pleadings have been completed.

Improper Forms of Denial

1. Denials for Lack of Information - Under Federal Rule 8(b) a party may deny an allegation on the ground that it is without knowledge and information sufficient to form a belief as to the truth of the allegation.

2. "Negative Pregnant" Denials - Results in an admission that defendant owes plaintiff


one cent less than the specified amount. Even when a negative pregnant in an answer renders it so ambiguous that a court-ordered reply cannot be framed, the proper corrective procedure is an order under Rule 12(e) for a more definite statement rather than dismissal.

3. Conjunctive Denials - Deny the allegation specifically, using the identical words of the complaint.

b. Affirmative Defenses

American Nurses' Association v. Illinois , 783 F.2d 716, 7th Circuit, United States Court of Appeals, Seventh Circuit, Posner, Circuit Judge, 1986

Case Brief

FACTS:

The class action charges the State of Illinois with sex discrimination in employment.The district judge dismissed the complaint under FRCP 12(b)(6) on the ground that the complaint pleaded a comparable worth case and that a failure to pay employees in accordance with comparable worth does not violate federal anti-discrimination law.

ISSUE:

Whether a failure to achieve comparable worth might permit an inference of deliberate and therefore unlawful discrimination, as distinct from passive acceptance of a market-determined disparity in wages.

RULE:

A complaint should not be dismissed for failure to state a claim unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.A complaint is not required to allege all, if any, of the facts logically entailed by the claim.A plaintiff does not have to plead evidence.A complaint does not fail to state a claim merely because it does not set forth a complete and convincing picture of the alleged wrongdoing.

APPLICATION:

Knowledge of a disparity is not the same thing as an intent to cause or maintain it; the state's intention was to pay market wages, its knowledge that the consequence would be that men got higher wages on average than women and that the difference might exceed any premium attributable to a difference in relative worth would not make it guilty of


intentionally discriminating against women. Similarly, even if the failure to act on the comparable worth study could be regarded as "reaffirming" the state's commitment to pay market wages, this would not be enough to demonstrate discriminatory purpose. To demonstrate such a purpose the failure to act would have to be motivated at least in part by a desire to benefit men at the expense of women.A complaint cannot be dismissed merely because it includes invalid claims along with a valid one.A complaint that alleges intentional sex discrimination cannot be dismissed just because one of the practices, indeed the principal practice, instanced as intentional sex discrimination - the employer's failure to implement comparable worth - is lawful.

CONCLUSION:

The plaintiffs are entitled to make additional efforts to prove a case of intentional discrimination within the boundaries sketched in this opinion.

Zielinski v. Philadelphia Piers, Inc. , 139 F.Supp. 408, E.D. pa., Van Dusen, J., 1956

Case Brief

FACTS:

Plaintiff filed his complaint for personal injuries while working as a result of a collision of two motor-driven fork lifts.

ISSUE:

RULE:

The doctrine of equitable estoppel will be applied to prevent a party from taking advantage of the statute of limitations where the plaintiff has been misled by conduct of such party.

APPLICATION:

Compliance with FRCP 8(b) required that defendant file a more specific answer than a general denial. A specific denial of parts of this paragraph and specific admission of other parts would have warned plaintiff that he had sued the wrong defendant.Under circumstances where an improper and ineffective answer has been filed, the PA courts have consistently held that an allegation of agency in the complaint requires a statement to the jury that agency is admitted where an attempt to amend the answer is made after the expiration of the period of limitation.Principles of equity require that defendant be estopped from denying agency because, otherwise, its inaccurate statements and statements in the record, which it knew (or had the means of knowing within its control) were inaccurate, will have deprived plaintiff of


his right of action.

CONCLUSION:

Since this is a pre-trial order, it may be modified at the trial if the trial judge determines from the facts which then appear that justice so requires.

Ingraham v. United States , 808 F.2d 1075, 5th Circuit, United States Court of Appeals, Fifth Circuit, Politz, Circuit Judge, 1987

Case Brief

FACTS:

The appellees in these consolidated cases sued the United States, under the Federal Torts Claims Act, for severe injuries caused by the negligence of government physicians.Texas adopted certain limitations on damages to be awarded in actions against health care providers, for injuries caused by negligence in the rendering of medical care and treatment.Ingraham was operated on by an Air Force surgeon. During the back surgery a drill was negligently used and Ingraham's spinal cord was damaged, causing severe and permanent injuries.Bonds and his daughter were victims of the negligent performance by an Air Force physician. Because of the mismanagement of the 43rd week of Bonds's first pregnancy, and the negligent failure to perform a timely caesarian section delivery, Stephanie suffered asphyxiation in utero.

ISSUE:

RULE:

avoidance in pleadings - the allegation or statement of a new matter, in opposition to a former pleading, which, admitting the facts alleged in such former pleading, shows cause why they should not have their ordinary legal effect.

APPLICATION:

Rule 8(c) first lists 19 specific affirmative defenses, and concludes with the residuary clause.The residuary clause has provided the authority for a substantial number of additional defenses which must be timely and affirmatively pleaded.Pertinent to the analysis is the logical relationship between the defense and the cause of action asserted by the plaintiff. This inquiry requires a determination:1. whether the matter at issue fairly may be said to constitute a necessary or extrinsic element in the plaintiff's cause of action;2. which party, if either, has better access to relevant evidence; and


3. policy considerations: should the matter be indulged or disfavored?

CONCLUSION:

We view the limitation on damages as an "avoidance" within the intendment of the residuary clause of 8(c).The Texas statute limit on medical malpractice damages is an affirmative defense which must be pleaded timely and in the cases at bar the defense has been waived.

Civil Procedure – Module 13Pleadings: Answer, Challenges and Amendments

VIII. Modern Pleading

B. Responding to the Complaint

Topic Hornbook

§ 5.17 General Rules

Under modern pleading doctrine, the answer serves both to determine which allegations in the complaint a defendant intends to contest at trial and to permit the defendant to raise additional matters as defenses or claims.

A party who fils to file an answer on time will be subject to the entry of default and, ultimately, to a default judgment.

§ 5.18 Admissions

A defendant will admit allegations in the complaint either by stating in the answer that they are true or by failing properly to deny them.

§ 5.19 Denials

Those matters that the defendant wishes to place into contention should be denied.

There are two basic forms of denials, general and specific.A general denial consists of one sentence, simply stating that "defendant denies each and every allegation of plaintiff's complaint."A specific denial involves a sentence-by-sentence or paragraph-by-paragraph analysis of the complaint, denying only those allegations that the defendant intends to contest.

Very often, the defendant can deny entire paragraphs and is permitted to do so by merely listing the paragraph number.

Denials on information and belief or for lack thereof must be made in good faith.


A defendant who files a general denial in bad faith or who files a general denial when the verification laws prohibit it, may have the denial stricken and the allegations deemed admitted.

Denials also may be deemed improper if the answer contains inconsistent responses or is evasive.

A legitimate exercise of the privilege against self-incrimination will be considered a denial, and accordingly, the refusal cannot result in an admission or other sanction.

Three types of denials: argumentative denials, negative pregnants, and conjunctive denials.

argumentative denial - one that does not directly deny a fact alleged by an opposing party, but instead alleges the existence of inconsistent facts.negative pregnant - occurs when a responding party denies an allegation with such particularity that only immaterial allegations are at issue.conjunctive denial - occurs when the plaintiff alleges a series of events and the defendant denies the entire series.

§ 5.20 Affirmative Defenses

Even if all the plaintiff's allegations are true, the defendant may be able to present additional facts establishing a defense. In such a case, the defense is called an affirmative defense and the defendant must plead it in the answer so that the plaintiff is aware of the allegations and has an opportunity to prepare to meet them. Unless an affirmative defense is pleaded, it cannot be proved at trial.

The burden of pleading is on the party who has the burden of proof on the issue.

plea in abatement - a challenge having nothing to do with the merits of the claim, but going solely to the jurisdiction or venue of the court or to some other procedural matter.

A counterclaim against the plaintiff or a cross-claim against a codefendant generally is included with the answer.Cross-claims and counterclaims must be answered by a reply pleading.

A defendant who wishes to set forth affirmative defenses in the answer is required to do so with the same degree of specificity and detail as the plaintiff is required to use in the complaint.

Zielinski v. Philadelphia Piers, Inc. , 139 F.Supp. 408, E.D. pa., Van Dusen, J., 1956

Case Brief


FACTS:

Plaintiff filed his complaint for personal injuries while working as a result of a collision of two motor-driven fork lifts.

ISSUE:

RULE:

The doctrine of equitable estoppel will be applied to prevent a party from taking advantage of the statute of limitations where the plaintiff has been misled by conduct of such party.

APPLICATION:

Compliance with FRCP 8(b) required that defendant file a more specific answer than a general denial. A specific denial of parts of this paragraph and specific admission of other parts would have warned plaintiff that he had sued the wrong defendant.Under circumstances where an improper and ineffective answer has been filed, the PA courts have consistently held that an allegation of agency in the complaint requires a statement to the jury that agency is admitted where an attempt to amend the answer is made after the expiration of the period of limitation.Principles of equity require that defendant be estopped from denying agency because, otherwise, its inaccurate statements and statements in the record, which it knew (or had the means of knowing within its control) were inaccurate, will have deprived plaintiff of his right of action.

CONCLUSION:

Since this is a pre-trial order, it may be modified at the trial if the trial judge determines from the facts which then appear that justice so requires.

Ingraham v. United States , 808 F.2d 1075, 5th Circuit, United States Court of Appeals, Fifth Circuit, Politz, Circuit Judge, 1987

Case Brief

FACTS:

The appellees in these consolidated cases sued the United States, under the Federal Torts Claims Act, for severe injuries caused by the negligence of government physicians.Texas adopted certain limitations on damages to be awarded in actions against health care providers, for injuries caused by negligence in the rendering of medical care and treatment.Ingraham was operated on by an Air Force surgeon. During the back surgery a drill was


negligently used and Ingraham's spinal cord was damaged, causing severe and permanent injuries.Bonds and his daughter were victims of the negligent performance by an Air Force physician. Because of the mismanagement of the 43rd week of Bonds's first pregnancy, and the negligent failure to perform a timely caesarian section delivery, Stephanie suffered asphyxiation in utero.

ISSUE:

RULE:

avoidance in pleadings - the allegation or statement of a new matter, in opposition to a former pleading, which, admitting the facts alleged in such former pleading, shows cause why they should not have their ordinary legal effect.

APPLICATION:

Rule 8(c) first lists 19 specific affirmative defenses, and concludes with the residuary clause.The residuary clause has provided the authority for a substantial number of additional defenses which must be timely and affirmatively pleaded.Pertinent to the analysis is the logical relationship between the defense and the cause of action asserted by the plaintiff. This inquiry requires a determination:1. whether the matter at issue fairly may be said to constitute a necessary or extrinsic element in the plaintiff's cause of action;2. which party, if either, has better access to relevant evidence; and3. policy considerations: should the matter be indulged or disfavored?

CONCLUSION:

We view the limitation on damages as an "avoidance" within the intendment of the residuary clause of 8(c).The Texas statute limit on medical malpractice damages is an affirmative defense which must be pleaded timely and in the cases at bar the defense has been waived.

Oliver v. Swiss Club Tell , 22 Cal.App.2d 528, California, California District Court of Appeal, First Distric, Molinari, Justice, 1963

C. The Reply

Topic Hornbook

§ 5.21 The Propriety of Pleadings Beyond the Complaint and Answer

Today, in almost all jurisdictions, the number of pleadings has been strictly limited.


The plaintiff normally is not permitted to reply to an affirmative defense set forth in the defendant's answer.

E. Challenges to Pleadings

§ 5.22 Devices for Attacking the Substantive Sufficiency of the Pleadings

At common law and in the codes, a challenge to the substantive sufficiency of a complaint or an answer is termed a "general demurrer." Under the FRCP and the state provisions that follow them, demurrers have been abolished.

motion for judgment on the pleadings - An alternative method of attacking the sufficiency of an opposing party's pleading.The motion for judgment on the pleadings is reserved until all of the pleadings have been completed.

motion for summary judgment - available to challenge the factual basis of a pleading that on its face is sufficient to state a claim or defense.

A challenge to the substantive sufficiency of a pleading is never waived.

§ 5.23 Devices for Challenging Uncertainty or Ambiguity

The traditional method of attacking uncertain or ambiguous pleadings was by use of a "special demurrer."Modern courts have substituted motions to make more definite and certain.

Unlike a substantive challenge, a demurrer or motion based on uncertainty or ambiguity must be raised at the earliest opportunity.Otherwise the defect is considered to have been waived.

§ 5.24 Devices for Challenging Form and Other Procedural Irregularities

Pleadings may be challenged on the ground that they reveal some procedural defect such as improper jurisdiction or venue.

§ 5.25 Consequences of a Ruling on a Challenge to the Pleadings

A party whose challenge to a pleading is rejected may continue with the case or allow a final judgment to be entered against her and appeal. A party who decides to continue may, by that act alone, give up the right to make the challenge at a later date on appeal.

D. Amendments



Rule 15 reflects two of the most important policies of the federal rules. First, the rule's purpose is to provide maximum opportunity for each claim to be decided on its merits rather than on procedural technicalities. Second, Rule 15 reflects the fact that the federal rules assign the pleadings the limited role of providing the parties with notice of the nature of the pleader's claim or defense and the transaction, event, or occurrence that has been called into question.

Parties may amend their complaints before trial and during trial. Rule 15(a) allows for the automatic amendment of a pleading before a response has been served, or within 20 days of the service of the original pleading if no response is required. After that, an amending party must obtain the leave of the court or the consent of the opposing party.

Rule 15(b) - During the trial, parties may amend their pleadings, with leave of the court, to conform to issues raised by unexpected evidence.Rule 15(d) - They also may add supplemental pleadings to their original pleadings to cover events that occur after the original pleading.

Topic Lectures

Class Lecture:

Joinder of Parties:Permissive - Rule 20Compulsory - Rule 19

necessary party - must be joined if feasible (non-joinder will not result in dismissal)indispensable party - must be joined since non-joinder would be prejudicial to the absentee's rights (action cannot proceed without joinder).

Joinder of Claims:Compulsory claim - when it arises out of the same transaction or occurrence and failure to raise it would prejudice a party or be barred by res judicata later.

Topic Hornbook

§ 5.26 Amendments: In General

The Federal Rules, and the rules in most jurisdictions, permit a pleader to amend a pleading once as a matter of right, so long as no responsive pleading has been filed or, if the original pleading did not call for a response, within the normal time that responsive pleadings are required.

At some point, when it appears that the pleader cannot in good faith, file a satisfactory


pleading, the court is entitled to cut off the availability of amendment.

Leave to amend can and should be denied if the proposed amendment is frivolous or fails to advance the case in some way.

The traditional rule at common law was that the attempt to prove causes of action or defenses not pleaded would result in a "fatal variance" and these new issues could not be considered in the determination of the case.

A party is given the right to amend the pleadings to conform to the proof at trial. The amendment can be made at any time, even after judgment.

Consent generally is found when evidence is introduced without objection.

§ 5.27 Amendments and the Statute of Limitations

An amended pleading is treated as having been filed at the same time as the original pleading, provided that the claim or defense asserted in the amended pleading arose out of the same transaction or occurrence as that set forth in the original pleading. The amended pleading is said to "relate back" to the original file date.

Federal Rule 15(c) (1966) - An amendment changing the party against whom a claim is asserted would be permitted to relate back if the new defendant, "within the period provided by law for commencing the action," (1) received notice of the institution of the action so that she would not be prejudiced in maintaining a defense, and (2) knew or should have known that but for a mistake concerning the identity of the proper party, the action would have been brought against her.

Federal Rule 15(c)(3) (1986) - In the siutation of a misnamed defendant, notice must be received within the statute of limitaitons and it was not sufficient to find that notice was given within the time for service.

Federal Rule 15(c)(3) (1991) - This amendment permits a change in the name or identity of a party if the action was timely filed and the new party learned of the action against him within the period provided by Rule 4(m) for service of process.

Rule 15(c)(1) - authorizes an amendment to relate back to the date of the original pleading if relation back is permitted by the law that provides the statute of limitations applicable to the action.

Beeck v. Aquaslide 'N' Dive Corp. , 562 F.2d 537, 8th Circuit, Benson, J., 1977

Case Brief

FACTS:


Beeck was severely injured while using a water slide.Soon after the accident investigations were undertaken. Aquaslide's insurance adjuster made an on-site investigation of the slide and also interviewed persons connected with the ordering and assembly of the slide. An inter-office letter indicates that Aquaslide's insurer was of the opinion the "Aquaslide in question was definitely manufactured by our insured." investigators had concluded that the slide had been manufactured by Aquaslide, and the defendant, with no information to the contrary, answered the complaint and admitted that it designed, manufactured, assembled and sold the slide in question.The statute of limitations on plaintiff's personal injury claim expired. About six and one-half months later, Aquaslide moved the court for leave to amend its answer to deny manufacture of the slide.

ISSUE:

Where the manufacturer of the product, a water slide, admitted in its Answer and later in its Answer to Interrogatories both filed prior to the running of the statute of limitations that it designed, manufactured and sold the water slide in question, was it an abuse of the trial court's discretion to grant leave to amend to the manufacturer in order to deny these admissions after the running of the statute of limitations?

RULE:

Rule 15(a) declares that leave to amend shall be freely given when justice so requires, this mandate is to be headed.The burden is on the party opposing the amendment to show prejudice. In ruling on a motion for leave to amend, the trial court must inquire into the issue of prejudice to the opposing party, in light of the particular facts of the case.Allowance or denial of leave to amend lies within the sound discretion of the trial court and is reviewable only for an abuse of discretion. The appellate court must view the case in the posture in which the trial court acted in ruling on the motion to amend.

APPLICATION:

Plaintiffs had not at any time conceded that the slide in question had not been manufactured by the defendant, and at the time the motion for leave to amend was at issue, the court had to decide whether the defendant should be permitted to litigate a material factual issue on its merits.In inquiring into the issue of bad faith, the court noted the fact that the defendant, in initially concluding that it had manufactured the slide, relied upon the conclusions of three different insurance companies, each of which had conducted an investigation into the circumstances surrounding the accident.The trial court held that the facts presented to it did no support plaintiffs' assertion that, because of the running of the two year Iowa statute of limitations on personal injury claims, the allowance of the amendment would sound the "death knell" of the litigation.


CONCLUSION:

The trial court did not abuse its discretion in allowing the defendant to amend its answer.

Worthington v. Wilson , 790 F.Supp. 829, United States District Court, Central District of, Mihm, Chief Judge, 1992

Case Brief

FACTS:

Worthington was arrested by two police officers. At the time of his arrest, Worthington was nursing an injured left hand and so advised the arresting officer. The officer responded by grabbing and twisting Worthington's injured hand and wrist, which prompted Worthington to shove the officer away and tell him to "take it easy." A second officer arrived on the scene and the two officers wrestled Worthington to the ground and handcuffed him. The officers then hoisted Worthington from the ground by the handcuffs, which caused him to suffer broken bones in his left hand.Worthington filed an amended complaint which named defendants, the two officers. These defendants moved to dismiss the amended complaint on the grounds that the statute of limitations had run and that the complaint failed to state a proper claim.

ISSUE:

RULE:

Rule 15(c): Relation-back is now governed by a modified standard. An amended complaint which changes the name of the defendant will relate back to the filing of the original complaint if it arises out of the same conduct contained in the original complaint and the new party was aware of the action within 120 days of the filing of the original complaint.Rule 15(c) does not permit a plaintiff to replace "unknown" parties with actual parties.Federal courts absorb state law only when federal law neglects the topic.When there is a clash between state and federal rules, federal law wins these contests every time.

APPLICATION:

The only way the amended complaint can be found to be timely filed is if it relates back to the filing of the original complaint.Under the amended version of Rule 15(c), Worthington's amended complaint, which arises out of the very same conduct in its original complaint, would relate back if the defendants were aware that they were the officers referred to as the unknown named police officers in the original complaint.


Counsel for the defendants conceded that they were aware of the pendency of the action within this period; thus, under the new version of Rule 15(c), the amended complaint would be timely because the defendants received notice of the action within 120 days of the original filing.In this case, there is a federal rule which addresses the issue of relation-back of unknown named defendants. To the extent that the state statute would dictate a contrary result, it is at odds with federal law. CONCLUSION:

Worthington's amended complaint is not entitled to relation back.

E. Supplemental Pleadings


Federal Rule 15(d) provides that the court may allow the filing of a supplemental pleadings setting forth transactions or occurrences or events which have happened since the date of the pleading sought to be supplemented. A supplemental pleading can be used to cure defects in the original pleading, to add new claims, or to provide additional facts that update the complaint.

Rule 13(e) permits defendants to use a supplemental pleading to assert counterclaims that arise after filing an answer.

Topic Hornbook

§ 5.28 Supplemental Pleadings

A supplemental pleading is distinguished from an amended pleading in that the latter covers only those matters that had occurred at the time the original pleading was filed, whereas the supplemental pleading covers matters that occur subsequently.

Federal Rule 15(d) was amended to permit use of a supplemental pleading to cure an original pleading that was defective.

F. Provisions to Ensure Truthful Allegations


In those state courts in which fact pleadings generally do not have to be verified, there are certain exceptions. Some of the typical ones found in state practice are: petitions for divorce; petitions brought by the state to enjoin a nuisance; and complaints to obtain support of an illegitimate child.

The current Rule 11 is simpler, allows more court discretion in the imposition of


monetary sanctions, and has added a 21 day "safe harbor" during which the filing party may withdraw the challenged paper without censure.

Hadges v. Yonkers Racing Corp. , 58 F.3d 1320, 2nd Circuit, United States Court of Appeals, Second Circuit, 1995

Case Brief

FACTS:

Hadges, a harness racehorse driver, trainer, and owner had been licensed in NY. The license was suspended and revoked, reissued, and suspended for a six-month period.Hadges was denied the ability to work at a number of racetracks following the reinstatement of his license.With the Rule 60(b) motion, Hadges and his attorney, Kunstler, signed statements saying that Hadges had not worked in over four years; neither mentioned the state appeal.In reply to the Rule 60(b) motion, YRC presented evidence that showed Hadges had raced during that time. YRC moved for dismissal and requested that the court impose sanctions for misrepresentation and for failing to disclose the state court action to the district court.The judge imposed a Rule 11 sanction on Hadges for his misrepresentations. The judge also censured Kunstler under Rule 11 for failing to make adequate inquiry as to the truth of Hadges's affidavits and for failing to inform the court of the pending state court litigation.

ISSUE:

RULE:

Rule 11 also provides that a court may impose sanctions on its own initiative. If a court wishes to exercise its discretion to impose sanctions sua sponte, it must enter an order describing the specific conduct that appears to violate subdivision (b) and directing an attorney, law firm, or party to show cause why it has not violated subdivision (b) with respect thereto.Such sanctions will ordinarily be imposed only in situations that are akin to a contempt of court.An attorney is entitled to rely on his or her client's statements as to factual claims when those statements are objectively reasonable.In considering sanctions regarding a factual claim, the initial focus of the district court should be on whether an objectively reasonable evidentiary basis for the claim was demonstrated in pretrial proceedings or at trial. Where such a basis was shown, no inquiry into the adequacy of the attorney's pre-filing investigation is necessary.An attorney is entitled to rely on the objectively reasonable representations of the client.The current version of the Rule requires only that an attorney conduct an inquiry reasonable under the circumstances into whether factual contentions have evidentiary


support.

APPLICATION:

In imposing sanctions, the district court apparently did not take into account YRC's failure to comply with the revised procedural requirements of Rule 11.In this case, YRC did not submit the sanction request separately from all other requests, and there is no evidence in the record indicating that YRC served Hadges with the request for sanctions 21 days before presenting it to the court. Thus, YRC denied Hadges the "safe harbor" period that the current version of the Rule specifically mandates.If Hadges had received the benefit of the safe-harbor period, the record indicates that he would have withdrawn or appropriately corrected his misstatements, thus avoiding sanctions altogether. Hadges did in fact correct one of his misstatements by admitting in an affidavit just 12 days after YRC asked for sanctions, that he had raced during those four years. Thus, this misstatement is not sanctionable.Hadges also explained and corrected his misstatement about the date of the first scratching incident and described another scratching incident involving another horse.Hadges's conduct did not rise to the level of contempt of court.Like Hadges, Kunstler did not receive the benefit of the safe harbor period.The record contained evidentiary support for the cliam that Hadges had not worked for four years.In light of his familiarity with the Meadowlands litigation and the sworn statements of his client and another attorney, Kunstler had sufficient evidence to support a belief that Hadges had not participated in harness horseracing in NY since the YRC ban.

CONCLUSION:

Under all the circumstances, particularly in the failure to afford Hadges the 21 day safe harbor period provided by revised Rule 11, we believe that the sanction of Hadges should be reversed.We reverse the imposition of the sanction of censure on Kunstler.

Civil Procedure – Module 14Joinder of Claims

IX. Joinder of Claims and Parties

A. Joinder of Claims


1. Historical Limitations on the Permissive Joinder of Claims

The typical code provision authorized joinder of claims when they fell within one of several statutory classes, which generally included the following:


1. Contracts, express or implied;2. Injuries to the person;3. Injuries to the character;4. Injuries to the property;5. Actions to recover real property with or without damages;6. Actions to recover chattels, with or without damages; and7. Actions arising out of the same transaction or transactions connected with the same subject of the action.

2. Permissive Joinder Under Federal Rule of Civil Procedure 18

Federal Rule 18 removes all obstacles to joinder of claims and permits the joinder of both legal and equitable actions; the only restriction on the claims that may be joined is imposed by subject-matter jurisdiction requirements.

Topic Lectures

Recorded lecture:

Theory of joinder intended to maximize efficiency and economy.

Cluster #4:

Trilogy #1:Joinder of claimsPermissive joinder of partiesCompulsory joinder of parties

Trilogy #2:Counter-claimCross-claimThird-party claim

Trilogy #3:Class actionsInterpleaderIntervention

Joinder of Claims

Under common law, could join any claims that arose out of the same "transaction or occurrence."

Under Federal Rules (and some states), a plaintiff is permitted to join any claim he or she has against the defendant, without the "transaction or occurrence" requirement.


Permissive Joinder of Parties

Any party can be joined when the claim arises out of the same transaction or occurrence and presents at least one common issue of law or fact.

Compulsory Joinder of Parties

Who should be joined without whom the action cannot proceed.Federal Rule 19(a) - Should join anyone needed to get full relief, as well as an outsider who would be prejudiced by being left on the outside.

Hypo:3 or 4 people enter into a contract to manufacture widgets. Each of them are to manufacture different subsystems of the widget. Defendant wants specific performance of the contract. Defendant cannot get full relief unless all 3 or 4 of the contracting parties are joined.

Hypo:Multiple owners of damaged property must all be joined in order to get full relief for damage to property.Multiple beneficiaries to an insurance policy must all be joined in order to distribute proceeds appropriately.

Requires 3 levels of analysis:1. which parties to join2. can we join those parties - jurisdiction (personal or subject-matter)3. if we cannot get an indispensable party, we proceed forward and distribute remedies as best we can

Counter-Claims

A claim backed by the defendant.

Two parts (under Federal Rule 13(a) and 13(b)):1. compulsory counter-claims - must be asserted. If claim arises from the same transaction or occurrence as the plaintiff's claim.2. permissive counter-claims - may be asserted. If claim does not arise from the transaction or occurrence.

If a compulsory counter-claim is not raised, it may be considered waived.

A compulsory counter-claim always gets supplemental jurisdiction, which allows it to be claimed even if it did not meet the jurisdictional requirements on its own.

Cross-Claims


A claim between co-parties.

Cross-claims are always permissive, always arising out of the same transaction or occurrence.

Cross-claims also get supplemental jurisdiction.

Third-Party Claims

A claim that brings in an outside party from the original claim for the purpose of contribution.

Supported by Federal Rule 14.

Third-party claims also get supplemental jurisdiction.

Topic Hornbook

A. IN GENERAL

§ 6.1 History and Policy Behind Party and Claim Joinder

The court operates within the following constraints regarding the joinder of parties:1. the action must be brought by the "real party in interest";2. the parties must have the "capacity" to sue or be sued;3. persons joined must be "proper" parties if their joinder is to be permitted;4. persons so related to the dispute that their joinder is "necessary if feasible" must be joined if that can be reasoanbly accomplished; and5. actions may not proceed if persons "indispensable" to the litigation cannot be joined.

Claims from divergent areas of substantive law - for example, tort, contracts, and property - generally may be processed in the same action if they are sufficiently related so that their joint adjudication would promote judicial efficiency without sacrificing standards of justice.

§ 6.2 Consolidation, Separation, and Severance

Three devices - consolidation of actions, separation of claims, and severance of claims - are the means by which courts sort out the undesirable side-effects of liberal party and claim joinder under contemporary procedural regimes.

Consolidation permits the amalgamation of action or issues involving at least one common question of law or fact.The term consolidation has been used to describe three different situations:1. when the court stays all but one of several actions and the judgment in the trial of that one action proves conclusive as to the others;


2. when the court combines several actions into one and renders a single judgment for what has become a single action; and3. when the court orders several actions to be tried together but each action retains a distinct character and requires a separate judgment.

The typical application of separation (often-times also referred to as bifurcation) is the division of an action into two or more claims or groups of claims. These groups are tried separately, but a single judgment encompassing the entire original action is rendered. Severance consists of dividing the claims in a single action into separate actions, with independent judgments entered on each of the severed claims.

A typical use of separation is to divide the issue of liability from that of damages.

Any party may move for separation, or the court may order separation on its own motion.

Severance of claims is permitted whenever it appears that the continued joint litigation of actions would be inefficient or prejudicial.

C. CLAIMS

§ 6.6 The Standard for Claim Joinder - In General

Court involvement in claim joinder is minimal at the pleading stage; the parties may add as many claims as they wish. Later, of course, the court may separate issues for trial.

Typically claim-joinder rules are permissive; there is no compulsory-claim joinder correspoding to compulsory-party joinder.

Because there are no threshold requirements to claim joinder in most jurisdictions, there can be no penalty for misjoinder. Pleaders having multiple claims, however, must present them clearly.The failure to present a clearly drafted complaint will result in an order to redraft it to conform to reasonable standards of good pleading.

In the federal courts, each claim generally must have an independent basis for subject-matter jurisdiction.

§ 6.7 Counterclaims

A counterclaim is any affirmative claim for relief asserted by a pleader - typically the defendant - in the defensive pleadings against an opposing party - typically the plaintiff.

Modern procedure encourages the use of the counterclaim as part of a policy of promoting the settlement of all disputes between two parties as expeditiously and economically as possible.


Under modern procedural rules, the ability to interpose a counterclaim is not limited in any way as to nature, subject matter, or relationship to the original claim.

Any claim that a defendant has against a plaintiff, or that a third-party defendant has against a third-party plaintiff, may be asserted as a counterclaim.

Many contemporary procedural rules distinguish between those counterclaims that arise out of the same transaction and occurrence as the opposing party's claim, and those that do not. The former type of counterclaim is designated "compulsory," the latter is "permissive."Parties are required to assert any compulsory counterclaims they may have against opposing parties; if they fail to do so, they may not bring those claims subsequently as a separate action. Permissive counterclaims may be postponed at the pleader's option without diminishing their future viability.

Four additional tests have emerged for deciding whether a counterclaim is compulsory:1. Would res judicata bar a subsequent suit on defendant's claim absent the compulsory-counterclaim rule?2. Are the issues off fact and law raised by the claim and counterclaim largely the same?3. Will substantially the same evidence support or refute plaintiff's claim as well as defendant's counterclaim?4. Is there any logical relationship between the claim and counterclaim?

A party need not assert a claim that has not fully matured at the time the responsive pleading is served.A party also need not assert a counterclaim for a cause of action that is the subject of another pending action.A party need not raise a counterclaim if its adjudication would require a third party over whom personal jurisdiction cannot be obtained.

The institution of an action by the plaintiff is held by most courts to suspend the running of the statute of limitations on any compulsory counterclaim. Permissive counterclaims are barred in this situation.

A counterclaim can be asserted only against a party in the capacity in which that party appears in the action.

§ 6.8 Cross-Claims

A cross-claim is any claim asserted by one party against a co-party.Under Federal Rule 13(g), a cross-claim must arise out of the transaction or occurrence that is the subject matter either of the original action or of a counterclaim therein, or it must relate to property that is the subject matter of the original action.

The assertion of a legal cross-claim in an equitable action does not waive the right to a jury trial on the legal claim.


Two limitations exist on the court's ability to allow claims to be brought in by way of cross-claim:1. the cross-claim may be asserted only against a co-party and2. it must present a claim transactionally related to the original claim or to a counterclaim, or related to property that is the subject matter of the original action.

The co-party requirement distinguishes cross-claims from counterclaims, which may be asserted only against opposing parties.

The right of action asserted in the cross-claim must arise out of the transaction or occurrence underlying the original claim or counterclaim or it must involve property that is the subject matter of the original action.

Most courts have made the determination on the basis of the logical-relationship standard, which examines whether the cross-claim involves many of the same factual and legal issues present in the main action.

Unlike counterclaim practice, cross-claim provisions do not extend to a transactionally unrelated claim.

Harris v. Avery , 5 Kan. 146, Kansas, Supreme Court of Kansas, Valentine, J., 1869

Case Brief

FACTS:

Harris met Avery and, in the presence of several other persons, called Avery a thief; said he had a stolen horse; took the horse from Avery, and kept the horse for four or five days; arrested Avery, and confined him in the county jail with felons four or five days.

ISSUE:

Whether several causes of action are improperly joined.

RULE:

Section 89 of the Code provides that the plaintiff may unite several causes of action in the same petition, whether they be such as have heretofore been denominated legal or equitable, or both, when they are included in either one of the following classes: First, the same transaction or transactions connected with the same subject of action, and different forms of action may be united where the same plea may be pleaded and the same judgment given on all the counts of the declaration, or whenever the counts are of the same nature, and the same judgment is to be given on them, although the pleas be different.


APPLICATION:

CONCLUSION:

It is probably true that the two causes of action for false imprisonment and slander cannot, under our Code, be united, unless both arise out of the same transaction, one being an injury to the person and the other being an injury to the character; but we do not know of any reason why they should not be united when both do arise out of the same transaction.

M.K. v. Tenet , 216 F.R.D. 133, United States Distrit Court, District of Columbia, Urbina, District Judge, 2002

Case Brief

FACTS:

The action was filed by six former employees against the CIA, its Director, and others alleging that defendants violated the Privacy Act of 1974 and various constitutional rights by obstructing plaintiffs' access to counsel. In a proposed second amended complaint, plaintiffs added nine named plaintiffs and provided information about existing claims to cure deficiencies in the original complaint. Defendant moved to sever the claims of the initial six plaintiffs.

ISSUE:

RULE:

APPLICATION:

CONCLUSION:

The court is convinced that under the unrestricted joinder provision of FRCP 18, such joinder of new claims is possible.

B. Addition of Claims


1. Counterclaims


The counterclaim in its present form did not exist at common law.

Four tests have been suggested for determining whether claims comprise the same transaction for purposes of Federal Rule 13:1. Are the issues of fact and law raised by the claim and counterclaim largely the same?2. Would res judicata bar a subsequent suit on defendant's claim absent the compulsory counterclaim rule?3. Will substantially the same evidence support or refute plaintiff's claim as well as defendant's counterclaim?4. Is there any logical relation between the claim and the counterclaim?

Note on Consequences of Failing to Plead a Counterclaim

Rule 13(a) is silent as to the consequences of a failure to raise a compulsory counterclaim.

Rule 13(h) is used to add parties not already in the suit. In order to invoke Rule 13(h), a party must be asserting a Rule 13(a), 13(b), or 13(g) claim against someone who already is a party.

Federal courts are allowed to assert supplemental jurisdiction over Rule 13(g) cross-claims.

United States v. Heyward-Robinson Co. , 430 F.2d 1077, 2nd Circuit, United States Court of Appeals, Second Circuit, Frederick van Pelt Bryan, District Judge, 1970

Case Brief

FACTS:

The action involves two subcontracts for excavation work between D'Agostino and Heyward. D'Agostino brought this actio against Heyward to recover payments alleged to be due. Heyward answered, denying liability and counterclaiming for alleged overpayments and extra costs. In reply, D'Agostino denied liability on the counterclaims and interposed a reply counterclaim to recover from Heyward monies alleged to be due.At the trial, the two subcontracts in suit were treated together.The jury found that Heyward had breached the subcontracts prior to when Heyward claimed to have terminated them.

ISSUE:

Whether Heyward had breached the subcontracts prior to when Heyward claimed to have terminated them.Whether the counterclaims are compulsory or are permissive.


RULE:

Lack of federal jurisdiction may be raised for the first time on appeal, even by a party who originally asserted that jurisdiction existed or by the court sua sponte.If the counterclaims are permissive there is no Federal jurisdiction over them unless they rest on independent jurisdictional grounds.If the counterclaims are compulsory, they are ancillary to the claim asserted in the complaint and no independent basis of Federal jurisdiction is required.Rule 13(a) states that a counterclaim is compulsory if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim.

APPLICATION:

There is no independent basis of federal jurisdiction over the counterclaims. Both D'Agostino and Heyward are NY corporations with offices in NY. There is thus no diversity jurisdiction.The counterclaims were compulsory within the meaning of Rule 13(a). Both subcontracts were entered into by the same parties for the same type of work and carried on during substantially the same period. A single insurance policy covered both jobs.

CONCLUSION:

The counterclaims bear a logical and immediate relationship to the original claims. They arose out of the transaction or occurrence which is the subject matter of the suit and are compulsory counterclaims under Rule 13(a).

Lasa Per L'Industria del Marmo Societa per Azioni v. Alexander , 414 F.2d 143, 6th Circuit, United States Court of Appeals, Sixth Circuit, Phillips, Circuit Judge, 1969

Case Brief

FACTS:

This controversy arose out of the construction of the Memphis City Hall. Southern Builders was retained by the City as the principal contractor. Southern Builders subcontracted with Alexander to supply and install some marble in the new City Hall. Alexander then contracted with LASA to supply it with marble.LASA alleged that it had fully performed its contract with Alexander and that Alexander owed it money.Alexander filed an answer and counterclaim in which it alleged that LASA had breached the contract by not shipping the marble on time, by shipping marble of the wrong type, by shipping damaged marble, and by failing to ship all the marble it was obligated to ship.Southern Builders filed an answer and counterclaim. In its counterclaim, Southern Builders alleged that LASA failed to ship marble as agreed to Alexander, and claimed damages resulting from that breach by LASA.


Alexander filed a cross-claim against Southern Builders, Continental Casualty, and the City for money alleged to be due on its contract with Southern Builders. Souther Builders and Continental Casualty filed answers and Southern Builders filed a cross-claim against Alexander for breach of contract.Alexander filed third-party complaints against the architects on the project.Alexander also sued Southern Builders for actual and punitive damages resulting from the wrongful termination of its contract and for injury to the business reputation of Alexander.The District Court dismissed the two cross-claims and the third-party complaint, holding that they do not arise out of the same transaction or occurrernce that is the subject matter of the original action or of a counterclaim therein.

ISSUE:

RULE:

The rights of all parties generally should be adjudicated in one action.If the court has jurisdiction to entertain the original action, no independent basis of jurisdiction for the cross-claim or third-party claim need be alleged or proved.

APPLICATION:

There is a "logical relationship" between the cross-claims (including the third-party compaint against the architect) and the "transaction or occurrence" that is the subject matter of the complaint and the two pending counterclaims.

CONCLUSION:

The District Judge is authorized by Rule 42(b) to order separate trials on any cross-claim, counterclaim, other claim or issues. If on the trial of this case the District Court concludes that separate trials on one or more of the counterclaims, cross-claims or issues would be conducive to expedition and economy, Rule 42(b) provides a practical solution to this problem.

C. Identifying Parties Who May Sue and Be Sued


Note on Capacity, Standing, and Real Party in Interest

Capacity refers to the ability of an individual or corporation to enforce rights or to be sued by others.Capacity rules are designed to protect a party by ensuring that she is represented adequately.


Standing is a concept, most relevant in the federal courts, used to ensure that the parties before the court will vigorously argue the legal claims at issue.Present doctrine requires that the litigant suffer an injury, that the injury arise out of or relate to the litigation, and that the litigant have a personal stake in the outcome of the suit.

Ellis Canning Co. v. International Harvester Co. , 255 P.2d 658, Kansas, Supreme Court of Kansas, Parker, Justice, 1953

Case Brief

FACTS:

Plaintiff alleged that in furnishing service on its tractor defendant negligently started a fire in that vehicle resulting in damage.Defendant's amended answer denied all acts of negligence.

ISSUE:

Whether the insured (appellant), after having been paid the full amount of its loss, is a real party in interest and legally entitled to maintain this action, for the use and benefit of the insurer, to recover such loss from the party (appellee), whose negligence is alleged to be responsible therefor.

RULE:

Every action must be prosecuted in the name of the real party in interest.

APPLICATION:

CONCLUSION:

An insured who has been fully paid for his loss is not the real party in interest and hence cannot maintain an action to recover the amount of such loss in his own name for the use and benefit of the insurer. Under the confronting conditions and circumstances the right of action against the alleged wrongdoer vests wholly in the insurer who may, and indeed must, bring the action as the real and only party in interest if one is to be maintained.

D. Claims Involving Multiple Parties

E. Impleader

Topic Hornbook

§ 6.9 Third-Party Practice (Impleader)


Impleader, or third-party practice, is the procedural device enabling the defendant in a lawsuit to bring into the action an additional party who may be liable to the defendant for all or part of any damages the defendant ultimately may owe the original plaintiff. This additional party is known as a third-party defendant, and the original defendant who brings an impleader claim is called the third-party plaintiff.Impleader is entirely optional; the defendant may assert the claim against the third party in a completely separate action.

Rule 14 permits a defendant to serve a third-party complaint upon a person not a party to the action who is or may be liable to the third-party plaintiff for all or part of the plaintiff's claim against the third-party plaintiff.

It is not enough that the impleader claim arises out of the same transaction or occurrence as the plaintiff's claim against the original defendant; it must involve a transfer of liability based on plaintiff's original claim.

Impleader should be permitted unless it clearly will prejudice the plaintiff or third-party defendant either by complicating unduly the original suit or by delaying its resolution.

Unlike counterclaims or cross-claims, impeader seeks to assert a claim against someone who is not already a party to the action.

A court must obtain personal jurisdiction over a third-party defendant before it can proceed to adjudicate a third-party claim.

Third-party claims typically are considered ancillary for purposes of statutory venue requirements.

Jeub v. B/G Foods, Inc. , 2 F.R.D. 238, United States District Court, District of Minnesot, Nordbye, District Judge, 1942

F. Interpleader

Topic Lectures

Recorded lecture:

Interpleader

A procedure that has existed since common law. Deals with one phenomenon.Provides protection for defendant against multiple plaintiffs for the same cause of action.Subject property is deposited to the court by the stakeholder for the purpose of settling multiple claims.

Two kinds:


1. Rule interpleader - Federal Rule 22 - Requires complete diversity between stakeholder and claimants and a certain amount in controversy..2. Statutory interpleader - The stake need only be $500. Uses a national service processor. Only need minimal diversity.

G. Intervention

Topic Lectures

Recorded lecture:

Intervention

Describes phenomenon of the outsider who wants to join an existing litigation, usually to protect his own interests.

Two kinds:1. Intervention as a right - Outsider has a guaranteed right to enter litigation, e.g. when supported by statute, or situation when outsider claims interest in property in litigation.2. Permissive intervention - Discretionary by the court, e.g. when created by statute, or by discretion of the judge when there is a question of law or fact.

Civil Procedure – Module 15Joinder of Parties


A. Joinder of Claims

Topic Hornbook

A. IN GENERAL

§ 6.4 Permissive-Party Joinder

Overlapping interests are required before a party may be joined under permissive-joinder rules, but the extent of the overlap required can be less than total.

The first requirement for permissive-party joinder is that the persons to be joined must assert or have asserted against them some right to relief arising out the transaction or occurrence or series of transactions or occurrences that comprise the subject matter of the action. The second requirement is that there must be a question of law or fact common to the parties who are to be joined and those already in the action.

A court applies the transaction-or-occurrence requirement in a particular case by asking


whether there is a logical relationship between the claim involving the party to be joined and the rest of the case.

Under the logical relationship test, party joinder may be permitted when there is enough factual overlap so that it would be efficient to have the parties litigate together."Logical relation" is defined in terms of judicial economy and convenience.

Joinder should not be permitted when it would prejudice the parties to be joined or those already involved in the litigation.

alternative joinder - The joinder of plaintiffs or defendants when the claims asserted by or against them are joint, several, or in the alternative.

No action will be dismissed merely for the misjoinder of a party. If a party is improperly joined, the appropriate remedy is to move to drop the party or for severance of the claim by or against that party.The party to be dropped or severed cannot be an indispensible party.

§ 6.5 Compulsory-Party Joinder

"necessary" parties - must be joined if feasible but whose nonjoinder will not result in dismissal."indispensable" parties - joinder is compelled even at the cost of dismissing the action. One who must be joined because nonjoinder is so prejudicial to the absentee's rights or to those already parties to the action, that the action cannot proceed without joinder.

Federal Rule 19 - Requires a judicial evaluation of the party's right to a remedy despite the inability to join an absentee.

To determine whether an absentee's joinder should be compelled - whether the party is "necessary" - courts must evaluate the strength of the nonparty's interest in the pending litigaiton.1. In the absence of joinder, can complete relief be accorded those already parties to the action?2. Will a judgment in the absence of the nonparty as a practical matter impair that individual's interest in the subject matter of the action?3. Will those already parties be subject to a substantial risk of incurring inconsistent obligations in separate suits?

Federal Rule states that the trial court must prevent practical - not merely legal - impairment of a nonparty's interests.

The party seeking joinder usually is given a reasonable opportunity to serve the nonparty and bring him into the action.

If the nonparty's interest is the subject matter of the litigation is such that the nonparty


should be included as a plaintiff but refuses to do so, the court, if it has jurisdiction over the nonparty, may order the nonparty joined as a defendant.

The court will not be able to order the joinder of a nonparty, such as when joinder will defeat the subject-matter jurisdiction of the court, when the court cannot obtain personal jurisdiction over the person sought to be joined, or when the person sought to be joined has a valid objection to the venue of the court.

Federal Rule 19(b) recommends a four-part test to determine whether a party is indispensable:1. Whether a judgment rendered in the person's absence might be prejudicial to the person or those already parties.2. Whether the court can reduce or eliminate prejudice or other ill-effects of nonjoinder by the shaping of relief, or other measures.3. Whether a judgment rendered without the outsider will be "adequate."4. The court must take into account the costs to the plaintiff of a dismissal for nonjoinder.

In order to qualify for joinder as a proper party, the person must have some interest in common with those already parties to the action.Compulsory joinder requires a closer relation between the persons to be joined and the action so that their absence would imperil some aspect of the litigation or their own rights.

§ 2.12 Supplemental Jurisdiction - History

Two forms of federal jurisdiction: ancillary and pendent jurisdiction.

A controversy was not ancillary unless it had a direct relation to property or assets actually or constructively drawn into the court's possession or control by the principal suit.

A claim was ancillary when it possessed a logical relationship to the aggregate core of operative facts which constitutes the main claim over which the court has an independent basis of federal jurisdiction.

Federal Rules - A claim that arises out of the same transaction or occurrence that is the subject matter of a claim already before the court.

Ancillary jurisdiction was appropriate for compulsory counterclaims, cross-claims, additional parties to a compulsory counterclaim or cross-claim, and impleader claims against third-party defendants.Ancillary jurisdiction was invoked in interpleader actions, and for intervention as of right.

When a federal court had ancillary jurisdiction over a claim or party, the normal venue requirements did not have to be satisfied.


pendent jurisdiction - When a question to which the judicial power of the Union is extended by the constitution, forms an ingredient of the original cause, it is in the power of Congress to give the Circuit Courts jurisdiction of that cause, although other questions of law or fact may be involved in it.

A federal court of original jurisdiction cannot function effectively unless it has the power to decide all the questions that a case presents to the court.

Hurn v. Oursler - If a plaintiff presented "two distinct grounds," one state and one federal, "in support of a single cause of action," the federal court had jurisdiction over the entire claim; but if the plaintiff's assertions comprised "two separate and distinct causes of action," there was jurisdiction only over the federal "cause of action."

United Mine Workers of America v. Gibbs - Created a two-step test: 1) does the court have jurisdictional power to entertain the pendent claim? 2) if the court has the power, does the exercise of sound discretion indicate that the federal court ought to assert that jurisdiction?

The state and federal claims must derive from a common nucleus of operative fact.Judicial power to hear the state claims existed if the federal issues were substantial and if plaintiff's claims are such that he would ordinarily be expected to try them all in one judicial proceeding.

§ 2.13 Supplemental Jurisdiction - Joinder of Claims

Section 1367 of Title 28 of the US Code codified the doctrines of ancillary and pendent jurisdiction and gave them the collective name "supplemental jurisdiction."Section 1367(a) provides federal courts with the power to exercise supplemental jurisdiction over all claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the US Constitution.

Section 1367(a), subdivision (b) - Claims asserted by an original plaintiff against a third-party defendnat must have independent grounds of jurisdiction, even if those claims are transactionally related, as required by the Federal Rule.

Supplemental jurisdiction is not permitted over claims by plaintiffs against any individual made a party to the action through the use of any of the joinder devices of Federal Rule 14 (impleader), Federal Rule 19 (compulsory joinder), Federal Rule 20 (permissive joinder), or Federal Rule 24 (intervention) if doing so would be incompatible with the requirement of complete diversity of citizenship.

A federal court had discretion to accept or reject an assertion of ancillary or pendent jurisdiction.


Section 1367(c) specifies that the court may decline to exercise supplemental jurisdiction over a claim if it raises a novel or complex issue of state law; the claim substantially predominates over the claim or claims over which the district court has original jurisdiction; the district court has dismissed all claims over which it has original jurisdiction; or if in exceptional circumstances, there are other compelling reasons for declining jurisdiction.

§ 2.14 Supplemental Jurisdiction - Joinder of Parties

If diversity of citizenship existed and one claim exceeded the requisite amount in controversy, the court also could hear another claim for or against another party that was for less than the required amount.

Pendent-party jurisdiction also was invoked to allow a plaintiff with a federal question claim against one defendant to bring a closely related state claim against another defendant without regard to the citizenship of the added parties or the amount involved in the pendent claim.

A federal court must find explicit congressional authority to assert jurisdiction over claims involving parties over whom there was no subject matter jurisdiction.

Section 1367(a) specifically states that supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties.Supplemental jurisdiction over pendent parties is available only in cases in which jurisdiction over the original action is premised, at least in part, on a federal question.Supplemental jurisdiction does exist over otherwise jurisdictionally insufficient parties whether federal question jurisdiction is concurrent or exclusive.

C. Identifying Parties Who May Sue and Be Sued


Note on Capacity, Standing, and Real Party in Interest

Capacity refers to the ability of an individual or corporation to enforce rights or to be sued by others.Capacity rules are designed to protect a party by ensuring that she is represented adequately.

Standing is a concept, most relevant in the federal courts, used to ensure that the parties before the court will vigorously argue the legal claims at issue.Present doctrine requires that the litigant suffer an injury, that the injury arise out of or relate to the litigation, and that the litigant have a personal stake in the outcome of the suit.

Topic Hornbook


§ 6.3 Who Is a Proper Party - Real Parties in Interest, Capacity to Sue, and Standing

It is necessary to determine:1. whether the party is a "real party in interest";2. whether the parties have the legal "capacity" to sue or be sued; and3. whether the plaintiff has "standing."

Any party asserting a claim must be shown to be the real party in interest with regard to that particular claim.The rule insists that the named plaintiff possess, under the governing substantive law, the right sought to be enforced.

The real party in interest need not be the person who ultimately will benefit from the successful prosecution of the action.That a party stands to gain from the litigation is not necessarily controlling.

In order to determine who is a real party in interest when there is an assignment of choses in action, the court first must ascertain what has been assigned to decide whether the assignee has a legally cognizable claim.Then, the court must determine if the purported assignment is valid.

Federal Rule 17(a) - Every action shall be prosecuted in the name of the real party in interest. Executors, administrators, guardians, bailees, trustees, and parties to contracts made for the benefit of others may sue in their own names without joining the party for whose benefit the action is maintained.

If a state provision concerning in whose name an action may be brought to enforce the right of a subrogee conflicts with the federal rules, Rule 17(a) is controlling.A party who could not bring the action in his own name in state court may be able to do so in federal court.

Since a challenge that the action has not been brought by the real party in interest presents a threshold defense, it should be raised in the answer or by a preliminary motion.

Capacity to sue or be sued refers to an individual's ability to represent her interests in a lawsuit without the assistance to another.

Two functional lines of "incapacity":1. incapacity based on physio-psychological condition, and2. incapacity due to organizational status or legal relationship.

Typically, those who lack capacity because of their physical or psychological condition are regarded as wards of the court and the court will appoint a party to represent them.Those deprived of capacity because of their status as organizations or representatives do not receive this special treatment.


When a litigant who formerly lacked capacity sheds the disability, the authority of the guardian, whether appointed by the court or not, terminates.When a party loses capacity during litigation, the suit should be dismissed.

The issue of capacity is governed primarily by state law.Federal Rule 17(b) provides that the capacity of an individual, other than one acting in a representative capacity, is determined by the law of the individual's domicile.

Two exceptions to the applicability of state law:1. partnerships and unincorporated associations that lack capacity under state law can sue under a common name in federal question cases, and2. federal receivers have special capacity under the US Code, even if they lack capacity under state laws.

Hanna v. Plumer - Unless it clearly violates the Rules Enabling Act, a federal prcedural rule should be applied in diversity cases.

A party must have "standing" to sue.All standing issues are rooted in the constitutional restriction that courts may adjudicate only "cases or controversies."

To have standing, a plaintiff must show:1. that the challenged conduct has caused injury in fact, and2. that the interest sought to be protected is within the zone of interests to be protected or regulated by the statutory or constitutional guarantee in question.

Ellis Canning Co. v. International Harvester Co. , 255 P.2d 658, Kansas, Supreme Court of Kansas, Parker, Justice, 1953

Case Brief

FACTS:

Plaintiff alleged that in furnishing service on its tractor defendant negligently started a fire in that vehicle resulting in damage.Defendant's amended answer denied all acts of negligence.

ISSUE:

Whether the insured (appellant), after having been paid the full amount of its loss, is a real party in interest and legally entitled to maintain this action, for the use and benefit of the insurer, to recover such loss from the party (appellee), whose negligence is alleged to be responsible therefor.

RULE:


Every action must be prosecuted in the name of the real party in interest.

APPLICATION:

CONCLUSION:

An insured who has been fully paid for his loss is not the real party in interest and hence cannot maintain an action to recover the amount of such loss in his own name for the use and benefit of the insurer. Under the confronting conditions and circumstances the right of action against the alleged wrongdoer vests wholly in the insurer who may, and indeed must, bring the action as the real and only party in interest if one is to be maintained.

D. Claims Involving Multiple Parties

1. Permissive Joinder of Parties


Federal Rule 20 describes the parties that may be joined in a litigation; it does not require their joinder.

Rule 18 does not demand that the joined claims have anything in common with each other, factually or legally, except that the joined claims be asserted by the same single claiming party against the single defending party.

As with multiple claims, more than one claiming or defending party can be joined in federal litigation, but that requires resort to Rule 20(a).

Rule 20 permits multiple parties to join together as plaintiffs in one action, but only if each plaintiff is asserting at least one claim that arises out of the same transaction or occurrence as a claim asserted by all of the other plaintiffs, and if any question of law or fact common to all these persons will arise in the action.

Rule 20 also permits multiple parties to be jointly named as defendants in one action, subject to the parallel constraint that at least one claim against each of the joined defendants be transactionally related and give rise to a common question of law or fact.

Rule 20 further provides: "A plaintiff or defendant need not be interested in obtaining or defending against all the relief demanded.

As long as there is at least one claim asserted by all joined plaintiffs or against all joined defendants, which satisfies Rule 20's minimal relatedness requirement, any individual plaintiff is free to invoke Rule 18 to join any other claims, no matter how unrelated to the rest of the action, against any individual defendant.


Ryder v. Jefferson Hotel Co. , 113 S.E. 474, South Carolina, Supreme Court of South Carolina, Marion, J., 1922

Case Brief

FACTS:

Plaintiffs became guests of the defendant. The defendant roused the plaintiffs by rapping upon their room door, and in a rude and angry manner insulted one of the plaintiffs. As a result of the insults, the plaintiffs were compelled to give up the accommodations due them and leave the said hotel, and were forced at midnight and at great inconvenience and uncertainty to seek another lodging place.Defendants separately demurred to the complaint upon the ground that it appeared upon the face thereof that several causes of action had been improperly united therein.

ISSUE:

Does the complaint contain two causes of action which may be joined in the same complaint?

RULE:

Code of Procedure (1912) - The cause of action, so united, must all belong to one of these classes, and, except in actions for the foreclosure of mortgages, must affect all the parties to the action, and not require different places of trial, and must be separately stated.When a tort of a personal nature is committed upon two or more, the right of action must, except in a very few special cases, be several. In order that a joint action may be possible, there must be some prior bond of legal union between the persons injured - such as partnership relation - of such a nature that the tort interferes with it, and by virtue that very interference produces a wrong and consequent damage common to all. It is not every prior existing relation between the parties that will impress a joint character upon the injury and damage.

APPLICATION:

It is apparent that the complaint alleges a cause of action by one defendant for a personal tort. It is also apparent that both of these alleged causes of action arose out of the same transaction, in the sense that the injury to each of the plaintiffs was caused by the same delict.That the rights infringed and the injuries suffered by the two plaintiffs in the case at bar are several, and not joint, would not seem open to question.The complaint here does not state a cause of action for injuries to the wife alone. Neither is the husband's alleged cause of action based upon loss of consortium and expenses incurred on behalf of the wife. The wife's cause of action does not "affect" the husband,


and the husband's cause of action does not "affect" the wife.

CONCLUSION:

Not only are the parties plaintiff different, and the potential elements of damage recoverable by the parties different, but neither party has the right to sue for the benefit of the other.

M.K. v Tenet , 216 F.R.D. 133, District of Columbia, United States District Court, District of Columbia, Urbina, District Judge, 2002

Case Brief

FACTS:

ISSUE:

Whether the defendants have engaged in a common scheme or pattern of behavior that effectively denies the plaintiffs' legal right to discuss their claims with their counsel.

RULE:

The policy underlying Rule 20 is to promote trial convenience, expedite the final determination of disputes, and prevent multiple lawsuits.

APPLICATION:

"Logically related" events may consist of an alleged consistent pattern of obstruction of security cleared counsel by the defendants.Each plaintiff alleges that the defendants' policy and practice of obstruction of counsel has damaged the plaintiffs. Further, each plaintiff requests declaratory and injunctive relief.Each plaintiff alleges common claims under the Privacy Act. Through their alleged Privacy Act violations, the plaintiffs are united by yet another question of law or fact that is common to each of them.

CONCLUSION:

The alleged repeated pattern of obstruction of counsel by the defendants against the plaintiffs is "logically related" as a series of transactions or occurrence that establishes an overall pattern of polices and practices aimed at denying effective assistance of counsel to the plaintiffs.The court determines that each plaintiff in this case has satisfied the first prong of Rule 20(a).The court concludes that the plaintiffs meet the second prong of Rule 20(a).The court denies the defendants' motion to sever.


The court believes that the joinder or non-severance of the six existing plaintiffs and their new claims under Rule 20(a) will promote trial convenience, expedite the final resolution of disputes, and act to prevent multiple lawsuits, extra expense to the parties, and loss of time to the court and the litigants in this case.

Tanbro Fabrics Corp. v. Beaunit Mills, Inc. , 4 A.d.2d 519, New York, Supreme Court of New York, Appellate Division, Fir, Breitel, Justice, 1957

Case Brief

FACTS:

The seller, Beaunit, sought to recover the purchase price of goods sold and delivered to Tanbro. The buyer, Tanbro, counterclaimed for breach of warranty for improper manufacture, as a result of which the goods were subject to "yarn slippage." The seller replied to the counterclaim by denying that the slippage was due to improper manufacture.Tanbro initiated another action in replevin, to recover the remaining goods. The processor, Amity, counterclaimed for its charges and asserted its claim to the goods under the artisan's lien.Tanbro brought a lawsuit against Beaunit and Amity, charging the goods were defective.Tanbro moved to consolidate the three actions. Beaunit and Amity separately cross-moved to dismiss the complaint in the buyer's main action on the ground that there were prior actions pending between the parties with respect to the same cause of action. The motion to consolidate was denied and Beaunit's cross-motion to dismiss the complaint as against it was granted.

ISSUE:

RULE:

All persons may be joined in one action as defendants if there is asserted against them jointly, severally, or in the alternative, any right to relief in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all of them would arise in the action.

APPLICATION:

212 of the Civil Practice Act is no longer a bar to joinder, and, by parallel reasoning, to consolidation, that there is not an identity of duty or contract upon which to assert alternative liability.The danger of separate trials, leading, perhaps to an unjust and illogical result, is a possibility well worth avoiding.


CONCLUSION:

The order of Special Term insofar as it granted the cross-motion to dismiss the complaint in the first described action as against the defendant Beaunit and denied the buyer Tanbro's motion to consolidate the three actions should be modified to deny the cross-motion and to grant the motion to consolidate, and otherwise should be affirmed.

2. Mandatory Joinder of Persons


A compulsory joinder rule enables courts to identify nonparties who eitehr have some interest that may be jeopardized by the resolution of pending litigation or whose absence may harm a party to the litigation. Once identified, such absentees are ordered joined, thereby overriding the plaintiff's decision as to the scope of the lawsuit.

Because there is no precise formula for determining whether a particular nonparty must be joined under Rule 19(a), the decision has to be made in light of the general policies of the Rule.

Bank of California Nat. Ass'n v. Superior Court , 106 P.2d 879, California, Supreme Court of California, Gibson, Chief Justice, 1940

Case Brief

FACTS:

Boyd died testate leaving an estate. Her will was admitted to probate, and petitioner, BofA, was appointed executor. The will left individual legacies and bequests to a large number of legatees, some residing in other states and in foreign countries. Petitioner, St. Luke's, was named residuary legatee and deviseee, and thereby received the bulk of the estate.

ISSUE:

Whether the absent defendants are not only proper parties but "indispensable parties" in the sense that service upon them or their appearance is essential to the jurisdiction of the court to proceed in the action.

RULE:

The court may determine any controversy between parties before it, when it can be done without prejudice to the rights of others, or by saving their rights; but when a complete determination of the controversy cannot be had without the presence of other parties, the


court must then order them to be brought in.While necessary parties are so interested in the controversy that they should normally be made parties in order to enable the court to do complete justice, yet if their interests are separable from the rest and particularly where their presence in the suit cannot be obtained, they are not indispensable parties. The latter are those without whom the court cannot proceed.A judgment in favor of one claimant for part of the property or fund would necessarily determine the amount or extent which remains available to the others.In an action by a lessor against a sublessee to forfeit a parent lease because of acts of the sublessee, the sublessors (original lessees) were indispensible parties, since a decree of forfeiture would deprive them of their lease.The other classification includes persons who are interested in the sense that they might possibly be affected by the decision, or whose interests in the subject matter or transaction are such that it cannot be finally and completely settled without them; but nevertheless their interests are so separable that a decree may be rendered between the parties before the court without affecting those others.It is impossible to find these other persons or impracticable to bring them in, the action may proceed as to those parties who are present.Plaintiff may litigate her claim against the appearing defendants alone and obtain a decree which binds them alone. The absent defendants, not being before the court, will not be bound by the judgment, whether favorable or unfavorable, and their property interests will not be affected.

APPLICATION:

The modern rule under the codes carries out the established equity doctrine. The action in these cases is against the distributee personally, and not against the estate; and it is independent of the will and the probate proceeding. Each distributee is individually held as a constructive trustee solely of the property which came to him, and none is interested in the granting or denial of similar relief as to any other. Where there are a number of legatees and devisees, they would all appear to be "necessary" parties in the sense that the main issue cannot be finally settled without a binding adjudication for or against every legatee or devisee.

CONCLUSION:

The alternative write, heretofore issued, is discharged, and the peremptory writ is denied.

Provident Tradesmens Bank & Trust Co. v. Patterson , 390 U.S. 102, Supreme Court of the United States, Mr. Justice Harlan, 1968

Case Brief

FACTS:

An automobile owned by Dutcher, who was not present when the accident occurred, was


being driven by Cionci, to whom Dutcher had given the keys. Lynch and Harris were passengers. The automobile crossed the median strip of the highway and collided with a truck being driven by Smith. Cionci, Lynch, and Smith were killed and Harris was severely injured.Three tort actions were brought. Provident Tradesman Bank, the adminstrator of the estate of passenger Lynch and petitioner here, sued the estate of the driver, Cionci, in a diversity action, Smith's administratrix, and Dutcher, the owner, and the estate of Lynch. These Smith and Harris actions are still pending. The Lynch action against Cionci's estate was settled.Dutcher, the owner of the automobile and a defendant in the as yet untried tort actions, had an automobile liability insurance policy with Lumbermens Mutual Casualty Company, a respondent here.The insurance company had declined, after notice, to defend to defend believing that Cionci had not had permission and hence was not covered by the policy.The estate of Lynch brought the present diversity action for a declaration that Cionci's use of the car had been "with permission" of Dutcher. The only named defendants were the company and the estate of Cionci. The other two tort plaintiffs were joined as plaintiffs. Dutcher was not joined either as plaintiff or defendant.The court held that the "adverse interests" that had rendered Dutcher incompetent to testify under the PA Dead Man Rule also required him to be made a party.Since Dutcher could not be joined as a defendant without destroying diversity jurisdiction the action had to be dismissed.

ISSUE:

What was the effect, if any, of the failure of the defendants to raise the matter in the District Court?What was the importance, if any, of the fact that a judgment, binding on the parties although not binding on Dutcher, had already been reached after extensive litigation?Whether Dutcher is likely to have any need, and if so will have any opportunity, to relitigate.Whether, given the substantive involvement of the outsider, it was proper to proceed to to adjudicate as between the parties.

RULE:

Rule 19(b) suggests four "interests":1. the plaintiff has an interest in having a forum,2. the defendant may properly wish to avoid multiple litigations, or inconsistent relief, or sole responsibility for a liability he shares with another,3. the interest of the outsider whom it would have been desirable to join. A judgment is not legally enforceable against a nonparty,4. the interest of the courts and the public in complete, consistent, and efficient settlement of controversies.Rule 19(b) also directs a district court to consider the possibility of shaping relief to accomodate these four interests.


APPLICATION:

We may assume that Dutcher falls within the category of persons who, under Rule 19(a) should be "joined if feasible." The action was for an adjudication of the validity of certain claims against a fund. Dutcher, faced with the possibility of judgments against him, had an interest in having the fund preserved to cover that potential liability. Hence there existed, when this case went to trial, at least the possibility that a judgment might impede Dutcher's ability to protect his interest, or lead to later relitigation by him.Had the Court of Appeals applied Rule 19's criteria to the facts of the present case, it could hardly have reached the conclusion it did.Opposing considerations in this case are hard to find. The defendants had no stake, either asserted or real, in the joinder of Dutcher.Dutcher had an "adverse" interest because he would have been benefited by a ruling in favor of the insurance company; the question before the Court of Appeals, however, was whether Dutcher was harmed by the judgment against the insurance company.If Dutcher is not foreclosed by his failure to intervene below, then he is not "bound" by the judgment in favor of the insurance company and, in theory, he has not been harmed.The only possible threat to Dutcher is that if the fund is used to pay judgments against Cionci the money may in fact have disappeared before Dutcher has an opportunity to assert his interest. Upon examination, we find this supposed threat neither large nor unavoidable.The state-court actions against Dutcher had lain dormant for years at the pleading stage.Even iin the event of tort judgments against Dutcher, it is unlikely that he will be prejudiced by the outcome here.Counsel for petitioners represented orally that they, the tort plaintiffs, would accept a limitation of all claims to the amount of the insurance policy. Obviously such a compromise could have been reached below had the Court of Appeals been willing to abandon its rigid approach and seek ways to preserve what was, as to the parties, subject to the appellants' other contentions, a perfectly valid judgment.Application of Rule 19(b)'s "equity and good conscience" test for determining whether to proceed or dismiss would doubtless have led to a contrary result below.Whether a person is "indispensible," that is, whether a particular lawsuit must be dismissed in the absence of that person, can only be determined in the context of particular litigation.

CONCLUSION:

We conclude, upon consideration of the record and applying the "equity and good conscience" test of Rule 19(b), that the Court of Appeals erred in not allowing the judgment to stand.Rule 19(b), which the Court of Appeals dismissed as an ineffective attempt to change substantive rights is a valid statement of the criteria for determining whether to proceed or dismiss in the forced absence of an interested person.


Civil Procedure – Module 16Interpleader and Intervention


F. Interpleader


Interpleader is a device designed to enable a party who might be exposed to multiple claims to money or property under her control to settle the controversy in a single proceeding.The primary motivation for the existence of this action is the interests of the stakeholder.

1. Historical Limitations on the Use of Interpleader

The typical interpleader suit has two stages. The first determines whether interpleader is proper; in it, the controversy is between the stakeholder on one side and all the claimants on the other. Before retiring, the stakeholder is required to deposit the money or property involved in the dispute with the court. In the second stage, the contest is among the claimants to determine their respective rights to the property or fund deposited in court.

The third requirement is that the party seeking interpleader must neither have nor claim any interest in the subject matter.The fourth requirement is that the stakeholder must not have incurred any independent liability with regard to the stake of either of the claimants.

2. Jurisdictional Limitations and Passage of the Federal Interpleader Act

Courts often characterized interpleader as an in rem or quasi-in-rem proceeding and predicated jurisdiction on the presence of the stake within the territorial reach of the court.

The Dunlevey decision had the effect of rendering interpleader unavailable in the federal courts in most cases in which the claimants were of diverse citizenship.

28 USC § 1397 permits venue to be laid in any judicial district in which one or more of the claimants reside.§ 2361 permits nationwide service of process in order to reach all of the claimants.§ 1335 permits the federal courts to assert jurisdiction when the stake is worth a minimum amount.

Interpleader under the Federal Interpleader Act is referred to as "statutory interpleader." Interpleader under Federal Rule 22 is known as "rule interpleader."

3. Interpleader in the Federal Courts


Treinies v. Sunshine Mining Co. (1939) - Supreme Court held that a federal court could constitutionally assert jurisdiction under the Federal Interpleader Act despite the co-citizenship of the stakeholder and one of the claimants.

Applicable Law in Federal Interpleader Cases

Griffin v. McCoach - Supreme Court held that in a statutory interpleader suit based on diversity jurisdiction a federal court is bound by the Erie doctrine to aply the conflict-of-law rules of the state in which it sits.

Topic Lectures

Recorded lecture:

Interpleader

A procedure that has existed since common law. Deals with one phenomenon.Provides protection for defendant against multiple plaintiffs for the same cause of action.Subject property is deposited to the court by the stakeholder for the purpose of settling multiple claims.

Two kinds:1. Rule interpleader - Federal Rule 22 - Requires complete diversity between stakeholder and claimants and a certain amount in controversy..2. Statutory interpleader - The stake need only be $500. Uses a national service processor. Only need minimal diversity.

Class lecture:

Interpleader is an equitable procedure that allows a "stakeholder" to protect himself from multiple litigations by joining them into one action.Governed by FRCP Rules 22 and 28, as well as 28 USC 1335, 1397, 2361.

State Farm v. Tashire - State Farm filed interpleader to combine defendants suing for insurance benefits from a bus accident. Issues and resolutions:1. standard for the jurisdiction based on the interpleader statute - only minimal diversity was required. 2. whether State Farm has to wait until there is a judgment against its ensured - State Farm does not have to wait, and this would be contrary to the purpose of interpleader.3. scope of the interpleader statute and its limiting claims by parties - cannot bring in unnecessary parties who have an interest in the action, but not the stake. Interpleader is not designed to be a "bill of peace" to all claims involved in the litigation. Does not entitle State Farm to enjoin all parties in the action as a way to settle their claims.

Topic Hornbook


§ 16.10 Purpose and History

Interpleader is an equitable procedure by which a person holding property (commonly called a stakeholder) who is or who may be subject to inconsistent claims on that property (the stake) can bring together all the claimants in a single action. Interpleader is thus a form of joinder designed to protect the stakeholder.

Interpleader conserves judicial resources by condensing several disputes into one.

Under common law, there were four equity requirements for a "strict" bill of interpleader:1. the same thing, debt, or duty had to be claimed by all the parties against whom interpleader was demanded;2. all of the claimants' adverse titles or rights had to be dependent upon or be derived from a common source;3. the plaintiff-stakeholder could not claim any interest in the subject matter of the interpleader (the stake); and4. the person seeking the remedy must have incurred no independent liability to any of the claimants - the stakeholder had to stand perfectly indifferent among them.

All but the last of the restrictions at equity have been eliminated in modern federal practices and in most states.

The Federal Interpleader Act of 1936 and in FRCP Rule 22, statutory and rule itnerpleader co-exist and are complementary.

The third requirement, that the stakeholder be disinterested, was expressly abolished by the rule.

Because the independent liability restriction has only its antiquity to support it, it should not be retained as a bar to interpleader.

§ 16.11 Modern Interpleader: Practice and Procedure

There are two stages of any interpleader proceeding:1. the stakeholder's application for an order to interplead is reviewed by the court;2. a consideration of the merits - if the stakeholder has no interest in the final outcome of the dispute, it withdraws at the end of the first stage, having committed the stake to the custody of the court. If the stakeholder does have an interest, it remains in the action and participates in the second stage as another claimant.

Although it may not be necessary for some or all of the claims to have been asserted at the time interpleader is requested, the stakeholder must be able to show that the claimants are "adverse" to each other. Adversity is expressly required by the interpleader statute.

When the claims are not technically adverse but in the aggregate they exceed the limited fund held by the stakeholder, interpleader becomes available.


Traditionally, the stakeholder either has been required to place the money or property under the control of the court or to post a bond sufficient to ensure compliance with any future order disposing of the stake.Federal Rule 22 does not include a deposit requirement.Complying with the deposit requirement does not constitute a waiver of that interest.

The remedy of interpleader is not limited to an original action by a plaintiff stakeholder. It also is available to any defendant exposed to a threat of multiple liability.A defendant-stakeholder may obtain interpleader by way of cross-claim or counterclaim.

Only a defendant who would be exposed to multiple liability upon the same obligation that underlies the original action may employ interpleader; the defendant may not counterclaim or cross-claim for interpleader in the absence of a nexus with a party already in the case.

A federal court will be governed by federal law.The federal court can allow interpleader, either under the rule or the statute.State law will govern the determination of substantive legal issues, except in those rare instances in which the claims themselves rest on some federal right.

§ 16.12 Jurisdiction and Venue

When all the claimants reside in a single state, state-court interpleader is readily available.

It is necessary to obtain in personam jurisdiction over each of the nonresident claimants in order to enter a binding judgment involving their rights.

It is necessary to satisfy the due-process requirements of minimum contacts and fair play and substantial justice before the assertion of jurisdiction will be upheld.Unless the nonresident claimants willingly consent to state-court interpleader jurisdiction, state courts typically are not viable form.

Service of process for rule-interpleader cases is governed completely by Federal Rule 4. That provision authorizes the federal district court to serve process, and thereby obtain personal jurisdiction, within the borders of the state where the court is sitting or pursuant to state laws.

Congress has provided for nationwide service of process on all claimants in actions under the federal interpleader statute.

In statutory-interpleader actions, only those claimants who cannot be found or who reside outside of the United States are beyond the reach of the statute.The assertion of jurisdiction under the statute need not be tested against the minimum-contacts standard, for it represents an assertion of federal, not state, court jurisdiction,


mandated by Congress and thus controlled only by 5th Amendment Due Process restraints.In statutory interpleader, subject-matter jurisdiction is determined on the basis of diversity of citizenship between or among the claimants.Minimal diversity is satisfied in cases in which all the claimants are citizens of the same state but there is an interested stakeholder who is a citizen of a different state.The minimum amount necessary to maintain an action under the statute is $500.

The subject-matter jurisdiction requirements for rule interpleader are the same as those governing any other civil action in the federal courts. There must be either a federal question or there must be complete diversity between the stakeholder and all the other claimants. If jurisdiction is premised on diversity, the amount in controversy also must exceed $75,000.

The provision governing venue for statutory interpleader cases allows the action to be brought in a judicial district where one or more of the claimants reside.Venue in cases brought under Federal Rule 22 is governed by the general venu statute applicable to other federal civil actions.

§ 16.13 Federal Injunctions Against Other Judicial Proceedings

Congress has authorized the federal courts to issue injunctions restraining other proceedings relating to the subject matter of the interpleader. The purpose of this federal injunctive power is to preserve the effectiveness of the interpleader remedy.

This statutory grant of injunctive power does not apply to interpleader actions under Rule 22.

A court may utilize this authority only when a deposit has been made or a bond provided by the stakeholder as required by the statute.

Section 2283 of Title 28 provides that a federal court may issue an order to stay proceedings in a state court where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.

A federal court may bar the parties in an interpleader action before it from pursuing another federal-court action or prevent the parties in the interpleader suit from instituting a state court action.

Even if the court has authority to issue an injunction it may refuse to do so.

Hancock Oil Co. v. Independent Distributing Co. , 150 P.2d 463, California, Supreme Court of California, Edmonds, Justice, 1944

Case Brief


FACTS:

Hopkins leased certain real property to Hancock Oil Company and Bush Oil Company. Landowner's royalties have accrued.Independent Distributing Co. brought an action asserting that Hopkins and two persons sued by fictitious names, hold the real property described in the lease in trust for them. The relief sought was an accounting of the rents of the land.By reason of these conflicting claims the lessees cannot safely determine to whom the rent should be paid.

ISSUE:

RULE:

A tenant may not question the title of his landlord at the date of the lease.The common law bill of interpleader had four essential elements:1. The same thing, debt, or duty must be claimed by both or all the parties against whom the relief is demanded;2. All of the adverse titles or claims must be dependent, or be derived from a common source;3. The one seeking the relief must not have nor claim any interest in the subject matter; and4. He must have incurred no independent liability to either of the claimants.Whenever conflicting claims are or may be made upon a person for or relating to personal property, or the performance of an obligation, or any portion thereof, such person may bring an action against the conflicting claimants to compel them to interplead and litigate their several claims among themselves.Privity between the conflicting claimants need not be shown to invoke the remedy under the code.One who sought to maintain such a suit must show outstanding claims, identical in every respect and without the slightest degree of variation, to the same thing, debt or duty.Interpleader will not lie if the stakeholder has incurred some personal obligation to either of the claimants, independent of the title or the right to possession, because such claimant would in that event have a claim against him which could not be settled in a litigation with the other claimant.The mere fact that a contractual relation exists between plaintiff and one of the defendants, under which the fund is required to be paid to such claimant, does not of itself defeat the right of interpleader.If the tenant may not interplead his landlord and another under the common law rule, the third party must establish his right to rent in a separate action.The tenant may not maintain such a suit upon the mere pretext or suspicion of double vexation; he must allege facts showing a reasonable probability of double vexation.

APPLICATION:


A suit by a tenant to interplead his landlord and one who claims the rent agreed to be paid in accordance with the terms of the lease by which he holds possession of the real property is in violation of this fundamental principle.The very rationale of interpleader compels the conclusion that the amendment does not allow the remedy where each of the claimants asserts the right to a different debt, claim or duty. If the conflicting claims are mutually exclusive, interpleader cannot be maintained, but the fact that an identical right is not asserted by each of the claimants does not preclude the use of the remedy.

CONCLUSION:

The relations inter se of the respondents and the copartners are such that the decision will determine the liability of the lessees to each of them, there is no independent liability which will bar the remedy of interpleader; accordingly the appellants' complaint is sufficient with respect to those of the four common law requirements for interpleader.The complaint states a cause of action against a general demurrer and denial of leave to amend was an abuse of discretion even if the special demurrer was well taken.

New York Life Ins. Co. v. Dunlevy , 241 U.S. 518, Supreme Court of the United States, Mr. Justice McReynolds, 1916

Case Brief

FACTS:

Respondent instituted this suit against petitioner and her father to recover the surrender value of a policy on his life which she claimed had been assigned to her and both were duly served with process while in that state. It was removed to the US District Court. Judgment for amount claimed was affirmed.The life policy having expired, the insurance company became liable and the sum was claimed both by Gould and his daughter. Boggs & Buhl caused issue of an execution attachment on their judgment, and both the insurance company and Gould were summoned as garnishees. He appeared, denied assignment of the policy, and claimed the full amount due thereon. The company filed a petition asking for a rule upon the claimants to show cause why they should not interplead. An order granted the requested rule, and directed that notice be given to Mrs. Dunlevy. This was done, but she made no answer and did not appear. The jury found there was no valid assignment, and the fund was paid over to Gould.

ISSUE:

Whether Mrs. Dunlevy held a valid claim against the insurance company.

RULE:

It is within the power of a state to make the whole administration of the estate a single


proceeding, to provide that one who has undertaken it within the jurisdiction shall be subject to the order of the court in the matter until the administration is closed by distribution, and, on the same principle, that he shall be required to account for and distribute all that he receives, by the order of the probate court.Any personal judgment which a state court may render against one who did not voluntarily submit to its jurisdiction, and who is not a citizen of the state, nor served with process within its borders, no matter what the mode of service, is void, because the court had no jurisdiction over the person.

APPLICATION:

Although herself outside the limits of the state, such disposition of the property would have been binding on her.This was an attempt to bring about a final and conclusive adjudication of her personal rights, not merely to discover property and apply it to debts. And unless in contemplation of law she was before the court, and required to respond to that issue, its orders and judgments in respect thereto were not binding on her.The interpleader proceedings were not essential concomitants of the original action but plainly collateral; and, when summoned to respond in that action, she was not required to anticipate them.

CONCLUSION:

The proceedings in the PA court constituted no bar to the action in CA, and the judgment below is accordingly affirmed.

Pan American Fire & Cas. Co. v. Revere , 188 F.Supp. 474, United States District Court, Easern District of L, Wright, District Judge, 1960

Case Brief

FACTS:

A large tractor and trailer collided head-on with a bus carrying school children. The bus driver and three of the children were killed and others were injured.A few moments later, compounding the disaster, another collision occurred between two cars following the bus.The tractor's liability insurer has instituted this interpleader action, citing all potential claimants.

ISSUE:

Whether, under the circumstances outlined, the remedy of interpleader is available to the insurer.Whether the allegation of disinterestedness already noted changes the character of the action to one of strict interpleader.


RULE:

In strict interpleader the plaintiff is a disinterest stakeholder while in the action in the nature of interpleader he is himself a claimant, whether directly or by denying the validity of some or all of the other claims.Under early common law, the resort to equity must have been justified by the absence of an adequate remedy at law. A bill in the nature of interpleader would not lie unless supported by some special equity besides double vexation.The present law is that the only equitable ground necessary for interpleader, whether the plaintiff is a disinterested stakeholder or not, is exposure to double or multiple vexation.The function of interpleader is to rescue a debtor from undue harassment when there are several claims made against the same fund.Rule 22 permits interpleader only if the claims are such that the plaintiff is or may be exposed to double or multiple liability.The only proper venue for the suit when the defendants do not all reside in the same state is the residence of the plaintiff.Process cannot run beyond the boundaries of the state in which the court sits. These restrictions are waivable, but if the objection is raised by the affected defendant, they usually form an absolute bar to the action.The action may be commenced in any district where one defendant resides and that process will run throughout the United States.

APPLICATION:

Every indication is that, regardless of the Interpleader Act, the power of a federal court to enjoin pending state court proceedings in a case like this one will be sustained. Certainly that result is desirable, if not indispensable.

CONCLUSION:

The prayer for interpleader will be granted, without, however, discharging the plaintiff who is contractually bound to resist the demands. Injunctions will issue restraining all parties from further prosecuting any pending suits against plaintiff or its assured on account of the accident described, or from instituting like proceedings before this or any other court.

State Farm Fire & Cas. Co. v. Tashire , 386 U.S. 523, Supreme Court of the United States, Mr. Justice Fortas, 1967

Case Brief

FACTS:

The case arose out of a collision between a bus and a pickup truck. Two of the bus passengers were killed and others were injured. One of the dead and 10 of the injured


passengers were Canadians; the rest of the individuals were citizens of five American states.Four of the injured passengers filed suit in CA state courts. Each of the individual defendants was a citizen of Oregon; Greyhound was a CA corporation.Petitioner brought this action in the nature of interpleader in the US District Court.State Farm paid into court the required deposit. Personal service was effected on each of the defendants.When a temporary injunction issued, the respondents moved to dismiss and, in the alternative, sought a change of venue to the district in which the collision had occurred. After a hearing, the District Court declined to dissolve the temporary injunction but continued the motion for a change of venue. Later, the temporary injunction was broadened so that all suits had to be prosecuted in the interpleader proceeding.

ISSUE:

Whether such a statutory construction is consistent with Article III of our Constitution.

RULE:

The interpleader statute has been uniformly construed to require only "minimal diversity," that is, diversity of citizenship between two or more claimants, without regard to the circumstance that other rival claimants may be citizens.Article III poses no obstacle to the legislative extension of federal jurisdiction.

APPLICATION:

We do not agree with the Court of Appeals that, in the absence of a state law or contractual provision for "direct action" suits against the insurance company, the company must wait until persons asserting claims against its insured have reduced those claims to judgment before seeking to invoke the benefits of federal interpleader.The fact that State Farm had properly invoked the interpleader jurisdiction under § 1335 did not entitle it to an order both enjoining prosecution of suits against it outside the confines of the interpleader proceeding and also extending such protection to its insured, the alleged tortfeasor.The scope of the litigation, in terms of parties and claims, was vastly more extensive than the confines of the "fund," the deposited proceeds of the insurance policy. In these circumstances, the mere existence of such a fund cannot, by use of interpleader, be employed to accomplish purposes that exceed the needs of orderly contest with respect to the fund.An insurance company should not be allowed to determine that dozens of tort plaintiffs must be compelled to press their claims - even those claims which are not against the insured and which in no event could be satisfied out of the meager insurance fund - in a single forum of the insurance company's choosing.State Farm's interest in this case receives full vindication when the court restrains claimants from seeking to enforce against the insurance company any judgment obtained against its insured, except in the interpleader proceeding itself. To the extent that the


District Court sought to control claimants' lawsuits against the insured and other alleged tortfeasors, it exceeded the powers granted to it by the statutory scheme.

CONCLUSION:

The present case is properly in the federal courts.In light of the evidence that federal intepleader was not intended to serve the function of a "bill of peace" in the context of multiparty litigation arising out of a mass tort, of hte anomalous power which such a construction of the statute would give the stakeholder, and of the thrust of the statute and the purpose it was intended to serve, we hold that the interpleader statute did not authorize the injunciton entered in the present case.

G. Intervention


Typical grounds for the assertion of inadequacy of representation for purposes of intervening as of right under Rule 24(a)(2) are: 1. the applicant's interests are not represented at all;2. the applicant and the attorney who supposedly represents his interest are antagonistic;3. and there is collusion between the representative and the adverse parties.

Intervention to take an appeal is permissible only if the original parties' decision to discontinue the battle reflects 'gross negligence or bad faith.'

The Civil Rights Act of 1964 gives the United States an unconditional right to intervene in actions seeking relief against a denial of equal protection of the laws under the 14th Amendment on account of race, color, religion, sex, or national origin.

Both Rule 24(a) and Rule 24(b) require that an application to intervene be "timely."

Topic Lectures

Recorded lecture:

Intervention

Describes phenomenon of the outsider who wants to join an existing litigation, usually to protect his own interests.

Two kinds:1. Intervention as a right - Outsider has a guaranteed right to enter litigation, e.g. when supported by statute, or situation when outsider claims interest in property in litigation.2. Permissive intervention - Discretionary by the court, e.g. when created by statute, or by discretion of the judge when there is a question of law or fact.

Class lecture:


Both kinds are governed by FRCP Rule 24.

Intervention as a rightTest or legal standard requires an interest in subject matter, impaired interest (will not be able to protect her interest), and inadequate representation. Also when a statute allows it as a right.

Hypo:Jane, a correctional officer, applies for a promotion and has to take a test, which she does, but is denied promotion. She sues employer for gender discrimination and asks for the personnel files of the male officers who got the promotion in order to show lower scores. Employer objects and she files a motion to order employer to produce documents. Male officers then move to intervene.Should the male officers be allowed to intervene as a right?Yes, since their personnel files involve protected rights.

Permissive interventionTest or legal standard requires a statute or a claim or defenses which involve a common question of law or fact with the pending action. Courts have discretion.

Hypo:John sues a private company in federal court for false advertising on bumper stickers that say "Trix are for kids". Sues under diversity of citizenship. John is from NH. Company is from MA. John files in NH. Sam, who lives in MA, used to eat Trix as a kid, so decides to join suit claiming that he doesn't eat it any more because of the bumper stickers.Should Sam's claim be allowed as permissive intervention?No, since this would destroy complete diversity.

Topic Hornbook

§ 6.10 Intervention

Intervention is the procedure that permits someone who is not a party to an action to join the litigation to protect her interests.

Federal Rule 24 and many comparable state provisions that establish intervention requirements, distinguish between intervention as of right and permissive intervention.When intervention is of right, there is an implicit judgment that the nonparty's right to participate should predominate.When intervention is declared to be permissive only, the court first must ascertain whether the interests of the original parties will be prejudiced by allowing the outsider access to the litigation.

Modern intervention provisions typically contain a tripartite standard for intervention of right:


1. the potential intervenor must have an interest relating to the property or transaction that is the subject of the action;2. disposition of the action in the intervenor's absence, as a practical matter, must be likely to impair the intervenor's ability to protect that interest;3. it must be shown that the existing parties the the action do not adequately represent the intervenor's interests.

Intervention of right is allowed when a statute provides an unconditional right to intervene.

The trial judge has discretion to impose conditions and restrictions on intervention of right so as to redress whatever imbalances occur between the interests of the intervenor and those of the original parties.

The focus of the first requirement is directed at achieving judicial economy and satisfying due process, and that approach is sufficiently flexible to accommodate a wide variety of asserted interests under Rule 24(a).

In appropriate instances the adverse impact of stare decisis is sufficient to support the right of intervention.It is only when stare decisis might afford a substantial obstacle to the intervenor in a subsequent action is combined with a claim to the very property or transaction that is the subject of the main action that intervention should be granted.

Courts must weigh certain factors and be on the lookout for extenuating circumstances. Evidence of fraud or collusion clearly is indicative of inadequate representation.A showing that a case was mishandled, or that the representative and petitioner have adverse interests may provide sufficient grounds for intervention.

When a party to an action is obliged to represent two separate interests that, although not adverse, may require different judgments regarding tactical consideration, intervention as of right is appropriate in order to guarantee that the interests of the absentee are given full and vigorous attention.

When an absentee does not qualify for intervention as of right, the court may grant permissive intervention under certain conditions.

Federal Rule 24(b) and its many state counterparts provide that anyone may be permitted to intervene in an action:1. when a statute of the United States confers a condition right to intervene; or2. when an applicant's claim or defense and the main action have a question of law or fact in common.

Intervention should not be permitted when the applicant's presence would serve no useful purpose.If intervention is allowed, any attempt by the intervenor to raise issues that are remote


from the mainstream of the original action will be resisted, even though the intervenor might have been able to raise those issues had he been a party to the action initially.

There is no requirement that the intervenor's claim be transactionally related to claims in the main action, as is true of permissive joinder.

When a litigant argues that a certain construction or application be given to a federal statute, the issue is one of permissive intervention.A request for permissive intervention, even by the government, is addressed to the discretion of the trial judge.

Whether the intervention sought is permissive or as of right, an application for leave to intervene must be timely.A petition interposed before the beginning of trial will be held timely, but a petition submitted after judgment will be rejected as untimely absent very unusual circumstances.

Intervention must be denied even if those requirements are met if the intervenor's presence in a federal-court action would destroy the court's subject-matter jurisdiction.

An order granting intervention is not final and is not appealable as such; the party opposing intervention must await the entry of judgment before contesting the intervention decision.An order denying permissive intervention is appealable only if the court has abused its discretion.

Smuck v. Hobson , 408 F.2d 175, United States Court of Appeals, District of Columb, Bazelon, Chief Judge, 1969

Case Brief

FACTS:

In a class action brought on behalf of Black and poor children, the court found that the plaintiffs were being denied their constitutional rights to equal educational opportunities because the District of Columbia schools were being operated on a basis that was racially and economically discriminatory. The Board of Education voted not to appeal and ordered Hansen not to appeal. Nonetheless, Hansen and Smuck filed notices of appeal. In addition, motions to intervene were made in the District Court of Appeals by Hansen and parents who said they "dissent from " the court's decision. The District Court granted the motions to intervene.

ISSUE:

Whether intervention of right is warranted.Whether the parents were adequately represented by the school board's decision not to appeal. The presumed good faith of the board in reaching this decision is not conclusive.


RULE:

The requirement for intervention is that the applicant not be adequately represented by others.The burden is on those opposing intervention to show the adequacy of the existing representation.

APPLICATION:

Whatever standing he might have possessed to appeal as a named defendant in the original suit disappeared when Hansen left his official position.Hansen has no interest relating to the property or transaction which is the subject of the action sufficient for Rule 24(a), and intervention is therefore unwarranted.Smuch as no appealable interest as a member of the Board of Education. While he was in that capacity a named defendant, the Board of Education was undeniably the principal figure and could have been sued alone as a collective entity. Appellant Smuck had a fair opportunity to participate in its defense, and in the decision not to appeal. Having done so, he has no separate interest as an individual in the litigation.There is no apparent reason why an economic interest should always be necessary to justify intervention.The interests asserted by the intervenors are sufficient to justify an examination of whether the two remaining requirements for intervention are met.The Board of Education adequately represented the intervenors at the trial.The interests of the parents who wish to intervene in order to appeal do not coincide with those of the Board of Education.The parents interest is not to protect the board, or Hansen, from an unfair finding. Their asserted interest is rather the freedom of the school board - and particularly the new school board recently elected - to exercise the broadest discretion constitutionally permissible in deciding upon educational policies.

CONCLUSION:

The appellants would be practically disadvantaged by a decision without appeal in thise case, and they are not otherwise adequately represented.

Civil Procedure – Module 17Class Actions

X. Class Actions


1. Subject-Matter Jurisdiction

Determination of diversity of citizenship in class actions should be based on the citizenship of the named parties only.


When unincorporated associations are sued in federal court, the court usually looks to the citizenship of each member of the association to determine whether there is diversity of citizenship.

Zahn v. International Paper Co. (1973) - The Supreme Court held that each plaintiff in a Rule 23(b)(3) class action must satisfy the jurisdictional-amount requirement.

When the well-pleaded complaint contains at least one claim that satisfies the amount-in-controversy requirement, and there are no other relevant jurisdictional defects, the district court has original jurisdiction over that claim. Once the court determines it has original jurisdiction over the civil action, it can turn to the question whether it has a constitutional and statutory basis for exercising supplemental jurisdiction over the other claims in the action.

Note on Minimal Diversity in Interstate Class Actions

In 2005, Congress adopted a new minimal-diversity jurisdiction statute that extends a federal forum to any class action in which a single defendant is a citizen of a state different from that of a single plaintiff and the amount in controversy exceeds $5 million.

2. Personal Jurisdiction

Due process is satisfied and the judgment is binding on all class members when the interests of the class are represented adequately during the suit.

Rule 23 imposes notice and opt-out requirements only in subdivision (b)(3) class actions.

3. Venue

Courts look to the residence of every member of the class, including absent class members, thus making class-action venue rules resemble class-action personal-jurisdiction rules. Only the residences of the class representatives are important for purposes of venue; the residences of absent class members and intervenors are irrelevant.

SECTION G. The Preclusive Effect of a Class-Action Judgment

Topic Lectures

Class lecture:

Governed by FRCP Rule 23.Generally brought by a large number of plaintiffs against a common defendant, often with small individual claims.

Philips Petroleum Co. v. Shutts - Class action over royalty payments.Issue must the plaintiffs opt out or opt in?May a state exercise jurisdiction over a class action plaintiff if the individual members of


the class's contacts with the state would not confer jurisdiction over a defendant?Is there personal jurisdiction even if class members do not have minimum contacts?What substantive law should apply?1. Minimum contacts with forum state - not required if it is a money judgment and the class is adequately represented, the members are given notice, and the members are allowed to opt out.Protection needed by plaintiffs was different and less than that applicable to a defendant.2. Need to opt in or opt out - court rejected need for opting in, notice and opt out would be adequate protection and satisfies due process.3. Choice of law issue - the forum law cannot be utilized if it materially conflicts with other laws that would apply. If a forum state doesn't have significant contacts and interest in every claim asserted by each member of the class, the state may not apply its law to each and every claim.

Recorded Lecture:

Class Actions

FRCP Rule 23 - Class Action Rule, a procedural rule for aggregated actions.

Until almost recently, nearly all class actions were brought in the federal courts. Now available in the state courts since federal court has become more conservative.

Subject Matter Jurisdiction:1. Federal subject matter. Related state actions may be attached under supplemental

jurisdiction with no amount in controversy requirement.2. Diversity of citizenship - When you have a representative action, diversity is based on

the citizenship of the representative(s), not the represented. Amount in controversy requirement - Must be greater than $75K. That must apply to EACH member of the class (Zahn). Supplemental jurisdiction statute - § 1367(a), claims that do not satisfy AIC may be attached to a claim that does. Subject to court interpretation, no precedent set.

Personal Jurisdiction:Class action causes are based on property rights to which the class member subjects his property at risk of loss.Phillips Petroleum - Class action court does NOT have to have personal jurisdiction over each member of the class. Class members do not bear the same burden in a class action suit when absent.

Three procedural protections for absent class members:1. If there is a representative of the class, the representative must be adequate.2. If it is a money/property class action, then members must get notice of the class action.3. In a money/property class action, the member must have the right to "opt out."


Central issue in a class action is whether or not it is certifiable.

Requirements for class action:1. There must be a definable class. 2. The class representative must be a member of the class.

Four prerequisites to class certification:1. Rule 23(a)(1) - "numerosity" - Class must be so numerous that joinder is

impracticable. 2. Rule 23(a)(2) - question of law or fact - There must a question of law or fact common

to the class. 3. Rule 23(a)(3) - "typicality" - The claims of the representative must be typical of the

claims of the other members of the class.4. Rule 23(a)(4) - adequate representation - The representative party must be fairly and

adequately represented.

Case must fit at least one of three different categories of class actions:1. Rule 23(b)(1) - (anti-prejudice device) - two parts:

one "harmonious" action - Eliminates similar individual claims from having different rulings and setting no precedent for the plaintiff entity. inadequacy of a limited fund - Eliminates depletion of funds with "first come, first served." Provides for equitable distribution of the fund to all claimants (class members).

2. Rule 23(b)(2) - (injunctive remedy) - The disputed behavior of the plaintiff is common to all the class members. Members request injunction to the benefit of all class members. Applies to social action class actions, e.g. segregation, voter rights, discrimination, environmental, safety, etc.

3. Rule 23(b)(3) - (money damage actions) - All class members have been damaged by the same action. Acts as a joinder device, typically for consumer actions, securities, personal injury, product defects, mass disasters, etc. Justified by efficiency and economy. Four "hedges" on the availability of a (b)(3) action:1. special commonality requirement - The common question of law or fact MUST predominate. 2. superiority - The judge must decide if class action adjudication is superior to other

forms of adjudication. Otherwise, judge may decide to adjudicate each member separately.

3. notification - Each and every member of this class must be individually notified when the class member can be identified by a reasonable effort.

4. "opt out" - Each and every member of the class must have the opportunity to "opt out."

Rule 23(f) - interlocutory appeal - from a class certification decision. Allows for appellate review of class certification prior to a judgment on the merits of the case.

Class Action Settlement


Before a class action can be settled, there must be notice, opportunity to be heard, and testimony to support the amount of the settlement so that a judge can determine whether or not the settlement is fair and adequate.A class action cannot be settled until the class has been found to be certifiable.There must be structural due process and adequacy of representation.

Topic Hornbook

CHAPTER 16. SPECIALIZED PROCEEDINGS: CLASS ACTIONS, DERIVATIVE SUITS, AND INTERPLEADER

A. Class Actions

1. In General

§ 16.1 Purpose and History

The class action permits a lawsuit to be brought by or against large numbers of individuals or organizations whose interests are sufficiently related so that it is more efficient to adjudicate their rights or liabilities in a single action than in a series of individual proceedings.

Rule 23 divided class actions into three categories that were described in terms of the jural relationships among the class members."true" class actions - were available when the rights were "joint" or "common," or "secondary" in the sense that the owner of the primary right of action refused to enforce it."hybrid" class actions - permitted when the rights among class members were "several" and the object of the action was the adjudication of claims affecting specific property involved in the action."spurious" class action - required that the jural relationships among the class members be "several."

When litigants possessed individual rights to damages, it was sufficient if the same kind of relief was sought by or against the class members.

2. Prerequisites

§ 16.2 Federal Class-Action Prerequisites

Determining the propriety of giving federal class-action treatment to a case typically is a two stage process.1. It must be determined whether several procedural prerequisites have been satisified.2. It must be ascertained whether the particular class action falls within the definition of one of the permissible types of class suits set out in the rule.

Before a class aciton of any type may proceed in the federal courts, all of the following


questions must be answered in the affirmative:1. Is there an identifiable class?2. Are those purporting to represent that class members of it?3. Is the class so large that joinder is impracticable?4. Are there questions of law or fact common to all the class members?5. Are the claims or defenses of the representatives of the class typical of those of other class members?6. Will the representatives adequately represent and protect the interests of the absent class members?

Before a class action should be permitted to proceed as such, an identifiable class must exist.The general contours of the class should be delineated sufficiently so that it would be feasible for the court to ascertain whether particular individuals are or are not members of it.

The representatives are members of the class if they have a personal stake in the outcome of the litigation.Not every representative need be a member of the class; it may be sufficient if one of them is a class member.

"numerosity" - The class must be so large that joinder of all its members would be impracticable. A showing of impossibility is not necessary.

Factors for feasibility of joinder:1. the nature and complexity of the action,2. the size of individual claims, and 3. the geographic distribution of the members of the class.

The maintenance of a class action is that common questions of law or fact must exist. All questions of law or fact need not be common or classwide.If an isolated incident is alleged that does not implicate any common policy or practice, the requirement is not satisfied.

"typicality" - The claims or defenses of the representative must be typical of the claims or defenses of all the class members.

The named representatives must fairly and adequately protect the interests of the absent class members.The representative need not have explicit authority from the class members to act on their behalf.The quality of representation depends on both the named representatives and the competence of the selected counsel.Rule 23 subdivision (g) requires that class counsel be formally appointed and includes standards to govern that appointment, building on the expertise of the courts under the prior rule.


Only a conflict or antagonism that goes to the heart of the controversy will be fatal.

Categories of cases permitted under Rule 23(b):1. (a) when the prosecution of separate actions might result in inconsistent or varying

adjudications that would establish incompatible standards of conduct for the party opposing the class, or(b) when individual litigation might result in judgments that would be dispositive of the interests of other members of the class who are not parties to those individual actions.Prejudice is not found when the risk merely is that the opposing party will have to pay damages to some claimants and not others.The absent class members need not show that they would be bound legally by the separate adjudications under notions of claim or issue preclusion in order to demonstrate prejudice.Rule 23(b)(1) may be invoked when individual class members are seeking to recover out of a limited common fund.

2. (1) the party opposing the class has acted or refused to act on grounds generally applicable to the class as a whole, and(2) the class representatives are seeking final injunctive relief or corresponding declaratory relief.The requirements for Rule 23(b)(2) will be met if the class opponent either has acted in a consistent manner towards the class members so that it amounts to a pattern of activity, or the party has imposed a regulatory scheme that affects all members of the class.It is not necessary that every class member be affected directly by the actions of the opposing party or feel aggrieved by them.The relief sought must be final in character.The mere fact that the complaint requests an award of damages in addition to injunctive relief or declaratory relief does not defeat certification under Rule 23(b)(2), as long as the damages sought are viewed as incidental.

3. "common question" or "damage" class action. Three elements are necessary for its maintenance:(1) common questions of law or fact must predominate over questions that only

affect individual class members,(2) the class-action procedure must be superior to other means of adjudicating the

controversy, and(3) the best notice practicable must be given to the class members of the

institution and nature of the action and of their right to exclude themselves from the class.

Courts frequently approach the predominance question by inquiring whether there is a significant common nucleus of factual and legal issues, but it is not necessary that this common nucleus include all issues that would be dispositive of the case.The court in a Rule 23(b)(3) action must consider whether there are any other methods for resolving the controversy that would be more advantageous than a class action.The third factor that the court may consider is the desirability of having the


controversy resolved in one action.It also requires some assessment of whether the forum selected for the class action represents an appropriate place to resolve the controversy.The fourth factor requires the court to appraise the management difficulties likely to arise if the action is maintained as a class suit.The final prerequisite for a common-question class action is that best notice practicable of the action and the right to opt out be given to identifiable class members. In the federal courts, notice is required to be given to each class member whose identity is ascertainable with reasonable effort.

§ 16.3 State Class-Action Prerequisites

The types of statutes that exist can be grouped roughly into four categories. The two most common forms are modeled after federal practice, classifying class actions as "true," "hybrid," and "spurious" depending on the type of interests presented by the class.

The third type of state class-action statute (the California Code of Civil Procedure) provides that when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court, one or more may sue or defend for the benefit of all.California courts are not required to determine whether the particular suit falls within a prescribed class-action category.

There is a community of interest sufficient to merit class-action treatment if there is an ascertainable class and a common definable interest in the questions of law or fact affecting the class members.

The last type of class-action statute generally attempts to take a pragmatic approach. It includes not only prerequisites, but also provisions concerning notice, fees, types of remedies, and other management concerns.

§ 16.4 Personal and Subject-Matter Jurisdiction Requirements

Phillips Petroleum Co. v Shutts - It was not necessary to satisfy the minimum contacts standard normally applied to out-of-state defendants in order to obtain a judgment binding out-of-state, absent plaintiff class members.

Only the citizenship of the named representative is considered in determining whether federal diversity jurisdiction may be invoked.Each class member must have a claim that satisfies the amount-in-controversy requirement, except when the class members are seeking to enforce a single title or a right in which they assert a common and undivided interest.

3. Special Procedures and Problems

§ 16.5 Procedures in Class Actions


Special rules concerning notice to absent members and settlements have been developed.

As soon as practicable after a suit has been commenced as a class action, the court will determine whether the litigation should proceed in that format.The judge is obligated to determine whether the suit can be maintained as a class action even if neither party initiates the inquiry.Certification should occur at very early stages in the litigation so that class members can be given a meaningful opportunity to opt out, to make an appearance in the action, or to object to the representation.

In the federal courts, the certification decision may not depend upon a preliminary inquiry into the merits.

The court may determine that the action should be maintained as a class suit only with regard to particular issues or as to certain parties or it may divide the class into subclasses each with its own representative and counsel.

Federal Rule 23(d) contains a nonexhaustive list of the types of orders that a court may issue during a class action:1. In order to promote the logical and efficient processing of the case, the trial judge may

issue orders to determine the course of proceedings and prescribe measures to prevent undue repetition or confusion in the presentation of evidence or argument.

2. In order to protect the interests of the class members and to promote the fair conduct of the litigation, the judge may order that notice be given to class members of any step in the action, or of the representation, or to intervene for any purpose or to come into the action in some other fashion.

3. The trial judge is empowered to impose conditions upon the class representative or intervenors.

4. The court may order that all allegations as to the representative character of the suit be stricken from the pleadings and that the suit proceed as an individual action.

"fluid recovery" or "cy pres recovery" - The court may assess a lump-sum damage award against the defendants based on their own records of illegal profits or overcharges.

Federal Rule 23 only mandates notice to be given in damage actions brought under subdivision (b)(3). As a matter of rule or statutory law, class actions involving joint interests or for injunctive or declaratory relief maintained under Rule 23(b)(1) and Rule 23(b)(2), respectively, fall within the discretionary notice provisions of Rule 23(d)(2).

A judgment in a Rule 23(b)(3) action binds only those class members who do not expressly request exclusion from the action.

§ 16.7 Dismissal and Compromise

Most class-action provisions specifically require court approval of any compromise or


dismissal of the class claims arranged by the parties.In scrutinizing the settlement, the judge is limited to either approving or disapproving the entire proposal.

Parties now are required when seeking approval to file a statement identifying any agreement made in connection with the settlement; the court is given authority to refuse approval unless class members are provided a second opportunity to opt out in Rule 23(b)(3) actions in which class certification occurred before the settlement terms are known; and the rule confirms the right of class members to object to a settlement, but requires court review if an objector later wants to withdraw the objection.

If notice has been given, a class member who neglects to protect his rights during the settlement process by voicing objections or by other means will be barred from attacking the agreement on appeal or collaterally.

§ 16.8 Binding Effect of a Class-Action Judgment

If all the requirements and prerequisites for a class action have been satisfied, the resulting decree will be binding on all class members whether they actually participated in the case or not.

Four conditions must be met in a Rule 23(b)(3) damage class action for absent plaintiff class members who are outside the jurisdiction of the court to be bound by the judgment:1. the absentee must receive notice plus an opportunity to be heard.2. the notice must meet the standards of Mullane v. Central Hanover Bank & Trust Co.3. the absent class member must be provided an opportunity to opt out of the action.4. the named plaintiff must adequately represent the class.

Phillips Petroleum v. Shutts , 472 U.S. 797, Supreme Court of the United States, Rehnquist, J., 1985

Case Brief

FACTS:

Phillips Petroleum produced or purchased natural gas from leased land located in 11 states. Shutts and several other royalty owners possessing rights to leases from which Phillips Petroleum produced the gas brought a class action against the company in a Kansas state court, seeking to recover interest on royalty payments that had been delayed. The TC certified a class consisting of 33,000 royalty owners.The final class consisted of members who resided in all 50 states, DC, and several foreign countries.The TC applied KS contract and equity law to every claim and found Phillips Petroleum liable for interest on the suspended royalties to all class members.

ISSUE:


How stringent the requirement for a showing of consent will be.Whether KS law conflicts in any material way with any other law which could apply.

RULE:

A judgment issued without proper personal jurisdiction over an absent party is not entitled to full faith and credit elsewhere and thus has no res judicata effect as to that party.If the defendant possessed certain minimum contacts with the State, so that it was reasonable and just, according to our traditional concept of fair play and substantial justice for a State to exercise personal jurisdiction, the State could force the defendant to defend himself in the forum, upon pain of default, and could bind him to a judgment.The defendant's contacts should be such that he should reasonably anticipate being haled into the forum.A chose in action is a constitutionally recognized property interest possessed by each of the plaintiffs.The absent parties would be bound by the decree so long as the named parties adequately represented the absent class and the prosecution of the litigation was within the common interest.Most jurisdictions require that a class action, once certified, may not be dismissed or compromised without the approval of the court.The court may amend the pleadings to ensure that all sections of the class are represented adequately.Absent plaintiff class members are not subject to other burdens imposed upon defendants.A particular set of facts giving rise to litigation could justify, constiutionally, the application of more than one jurisdiction's laws.For a State's substantive law to be selected in a constitutionally permissible manner, that State must have a significant contact or significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair.

APPLICATION:

Petitioner claims that he would be injured if this class-action judgment against it became final without binding the plaintiff class. Such an injury is sufficient to give petitioner standing on its own right to raise the jurisdiction in this Court.KS courts may exercise jurisdiction over these plaintiffs only if the plaintiffs possess the sufficient "minimum contacts" with KS as that term is used in cases involving personal jurisdiction over out-of-state defendants.The burdens placed by a State upon an absent class-action plaintiff are not of the same order or magnitude as those it places upon an absent defendant.The minimum contacts requirement of the Due Process Clause prevents the forum State from unfairly imposing burdens upon the defendant.The procedure followed by KS, where a fully descriptive notice is sent first-class mail to each class member, with an explanation of the right to "opt out," satisfies due process.Petitioner's "opt in" requirement would require the invalidation of scores of state statutes


and of the class-action provision of the FRCP, and for the reasons stated we do not think that the Constitution requires the State to sacrifice the obvious advantages in judicial efficiency resulting from the "opt out" approach.There can be no injury in applying KS law if it is not in conflict with that of any other jurisdiction connected to this suit.The Supreme Court of KS erred in deciding on the basis that it did that the application of its laws to all claims would be constitutional.KS must have significant contact or aggregation of contacts to the claims asserted by each member of the plaintiff class, contacts creating state interests in order to ensure that the choice of KS law is not arbitrary or unfair.There is no indication that when the leases involving land and royalty owners outside of KS were executed, the parties had any ideas that KS law would control.

CONCLUSION:

A 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 which would support personal jurisdiction over a defendant. if the forum State wishes to bind an absent plaintiff concerning a claim for money damages or similar relief at law, it must provide minimal procedural due process protection. The plaintiff must receive notice plus an opportunity to be heard and participate in the litigation, whether in person or through counsel. The notice must be the best practicable, reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. The notice should describe the action and the plaintiffs' rights in it.Due process requires at a minimum that an absent plaintiff be provided with an opportunity to remove himself from the class by executing and returning an "opt out" or "request for exclusion" form to the court.The protection afforded the plaintiff class members by the KS statute satisfies the Due Process Clause. The interests of the absent plaintiffs are sufficiently protected by the forum State when those plaintiffs are provided with a request for exclusion that can be returned within a reasonable time to the court.The KS court properly asserted personal jurisdiction over the absent plaintiffs and their claims against petitioner.Application of KS law to every claim in this case is sufficiently arbitrary and unfair as to exceed constitutional limits.

Cooper v. Federal Reserve Bank of Richmond , 467 U.S. 867, Supreme Court of the United States, Justice Stevens, 1984

Case Brief

FACTS:

The EEOC commenced a civil action against respondent. The complaint alleged that the Bank was violating the Civil Rights Act by engaging in "policies and practices" that including failing and refusing to promote blacks because of race.


Six months after the EEOC filed its complaint, four individual employees were allowed to intervene as plaintiffs. The District Court entered an order conditionally certifying the class. After certifying the class, the District Court ordered that notice be published and mailed to each individual member of the class.The District Court found that the Bank had engaged in a pattern and practice of discrimination by failing to afford black employees opportunities for advancement and assignment equal to opportunities afforded white employees.The petitioners moved to intervene, alleging that each had been denied a promotion for discriminatory reasons. The District Court found no proof of any classwide discrimination.The petitioners filed a separate action against the Bank alleging that each of them had been denied a promotion because of thier race. The Bank moved to dismiss the complaint on the ground that each of them was a member of the class that had been certified, and that they were bound by the determination that there was no proof of any classwide discrimination. The District Court denied the motion to dismiss.The US Court of Appeals reversed the District Court's judgment.

ISSUE:

Whether a judgment in a class action determining that an employer did not engage in a general pattern or practice of racial discrimination against the certified class of employees precludes a class member from maintaining a subsequent civil action alleging an individual claim of racial discrimination against the employer.

RULE:

A judgment in a property entertained class action is binding on class members in any subsequent litigation.A judgment in favor of the plaintiff class extinguishes their claim, which merges into the judgment granting relief. A judgment in favor of the defendant extinguishes the claim, barring a subsequent action on that claim. A judgment in favor of either side is conclusive in a subsequent action between them on any issue actually litigated and determined, if its determination was essential to that judgment.The existence of a valid individual claim does not necessarily warrant the conclusion that the individual plaintiff may successfully maintain a class action.

APPLICATION:

The Court of Appeals was correct in generally concluding that the petitioners, as members of the class represented by the intervening plaintiffs are bound by the adverse judgment in that case. The court erred, however, in the preclusive effect it attached to that prior adjudication.

CONCLUSION:


Civil Procedure – Module 18Discovery: General Scope and Mechanics

XI. Pretrial Devices for Obtaining Information


discovery - Procedures that allow the parties to discover and also require them to disclose information about a dispute prior to trial.

A. The General Scope of Discovery


1. The Purposes of Discovery

The purposes of discovery are:1. the preservation of relevant information that might not be available at trial,2. to ascertain and isolate those issues that actually are in controversy between the parties,3. to find out what testimony and other evidence is available on each of the disputed factual issues.

One major reason for permitting widespread discovery of the facts before trial is the elimination of surprise.

2. Discovery Prior to Commencing a Lawsuit

3. The Scope of Discovery: Relevance

Rule 26(b)(2) was amended to permit discovery, without a court order, or any information, not privileged, relevant to the subject matter of the lawsuit, whether or not admissible at trial, provided the information is reasonably calculated to lead to the discovery of admissible evidence.

Rule 26(b) was amended to limit discovery requests to material relevant to the claim or defense of any party.For good cause, the court may order further discovery of any matter relevant to the subject matter involved in the action.A plaintiff is not required to set out in detail her factual and legal contentions.


4. The Concept of Proportionality and Discretionary Limits on Discovery

Relevance under the Federal Rules is limited by the concept of proportionality.The goal of proportionality is to promote judicial limitation of the amount of discovery on a case-by-case basis to avoid abuse or overuse of discovery.

"Good cause" for a protective order under Rule 26(c) requires the moving party to demonstrate that disclosure will work a clearly defined and very serious injury.The movant must make a showing by specific examples or articulated reasoning as distinguished from stereotyped and conclusory statements.

Topic Lectures

Recorded Lecture:

Discovery is designed to give each litigant equal access to all data.

Scope of Discovery

Federal Rule 26(b)(1) - A party can discover anything relevant to the subject matter of the action, as long as it is not privileged.It is not an objection to discovery that the material sought is inadmissible as long as it is reasonably calculated to lead to something that is admissible.

protective orders - Issued by the court to protect privacy interests in requested discovery.

Topic Hornbook

§ 7.1 History, Purposes, and Techniques of Modern Discovery

The term "discovery" encompasses the methods by which a party or a potential party to a lawsuit obtains and preserves information regarding the action.

Modern discovery has three major purposes:1. the preservation of relevant information that must not be available at trial;2. to ascertain the issues that actually are in controversy between the parties; and3. to obtain information that will lead to admissible evidence on the issues that are in dispute.

Kelly v. Nationwide Mut. Ins. Co. , 188 N.E.2d 445, Ohio, Ohio Court of Common Pleas, Ashtabula County, Pontius, Judge, 1963

Case Brief

FACTS:

Plaintiff sued to recover damages to a motor vehicle under the terms of a comprehensive


insurance policy. The defendant denies that such an insurance policy was in effect. To defendant's answer was attached a list of forty-two interrogatories directed to plaintiff. Plaintiff answered the interrogatories but defendant moved to require more complete answers by plaintiff.

ISSUE:

The proper use by a defendant of interrogatories.May a defendant who has pleaded only a general denial attach to his answer and have answered by the plaintiff interrogatories which only pry into the evidence by which the plaintiff may sustain his own case, as distinguished from inquiring for ultimate facts within plaintiff's own knowledge which may be pertinent to the issue?Does the plaintiff have to reveal to the defendant in advance of trial evidence which plaintiff hopes to establish in support of his own case?Did the plaintiff hold a comprehensive insurance policy issued by the defendant which was in force?Did the policy cover a tractor owned by plaintiff?Was sugar placed in the mechanism of this tractor?Was the tractor damaged thereby and if so, to what extent?

RULE:

A party may annex to his pleading, other than a demurrer, interrogatories pertinent to the issue made in the pleadings, which interrogatories, if not demurred to, shall be plainly and fully answered under oath by the party to whom they are propounded, or if such party is a corporation, by the president, secretary, or other officer thereof, as the party propounding requires.Interrogatories are not proper where the information sought is not within the personal knowledge of the other party and is not pertinent to an issue raised by the pleading of the inquirer. Interrogatories are not proper where the answer calls for mere opinion of the party, nor where the information sought is not within the personal knowledge of the party interrogated.Interrogatories are proper if they are designed to seek information pertinent to the action as distinguished from being merely pertinent to an issue raised by the pleading of the inquirer.Interrogatories may seek information relevant to any issue of the action and to all sides of the case.Interrogatories are proper when:1. Relevant to an issue in the action as distinguished from merely being relevant to an issue in the pleading of the inquirer.2. They do not seek privileged information.3. The information sought would also be admissible as evidence in the action.Interrogatories may not seek discovery of the manner whereby the opponent's case is to be established nor evidence which relates exclusively to his case, nor to what his witnesses will testify.


APPLICATION:

Defendant's answer sets up no affirmative defense. The defendant therefore has assumed no burden of proof.Defendant's interrogatory number 2 calls upon plaintiff to state whether she was the sole proprietor of a trucking business or whether same was a partnership or corporation at the time of plaintiff's claim. This interrogatory has a direct bearing on the question of truck ownership and policy coverage.Interrogatory number 6 calls for plaintiff to state where the truck was at the time the sugar allegedly got into the mechanism of the truck. The answer given is "Don't personally know." Bearing in mind that previous interrogatories and answers thereto reveal the fact that the truck in question was under the care and custody of someone else other than plaintiff, it would seem as though plaintiff's answer to this interrogatory is full and complete.Interrogatories numbers 10, 12, and 15 through 33 all deal with matters arising at the time of or after plaintiff's alleged claim arose. None deal with information or records maintained in the normal operation of plaintiff's business. They call for hearsay or mere opinion.The same objection is true with interrogatories 36 and 37 and the answers given thereto; and likewise interrogatories 39 through 42 and Plaintiff's answers thereto.

CONCLUSION:

The plaintiff will be directed to answer the interrogatory fully and completely, stating whether she owned the business as a sole proprietor or as a member of a partnership and if so, the other members thereof, or whether the business was incorporated.The motion with respect to interrogatory and answer number 6 is therefore overruled.Defendant's motion therefore will be overruled in all respects except with reference to the answer given by plaintiff to interrogatory number 2, and plaintiff is directed to file a complete answer as above indicated.

Marrese v. American Academy of Orthopaedic Surgeons , 726 F.2d 1150, 7th Circuit, United States Co0urt of Appeals, Seventh Circuit, Posner, Circuit Judge, 1984

Case Brief

FACTS:

Two orthopedic surgeons initially sued in state court alleging that they were refused membership in the Academy without a hearing. Finding membership in the Academy was not an "economic necessity," the state court dismissed the complaint on the ground that no valid state law claim was stated. Plaintiffs then sued in federal court, alleging violations of the antitrust laws. In the course of discovery, plaintiffs demanded production by the Academy of correspondence and other


documents relating to denials of membership applications. The court ordered the Academy to produce the documents pursuant to an order protecting their confidentiality. The Academy refused to comply with the order and was held in criminal contempt.

ISSUE:

RULE:

A motion under Rule 26(c) to limit discovery requires the district judge to compare the hardship to the party against whom discovery is sought, if discovery is allowed, with the hardship to the party seeking discovery if discovery is denied. He must consider the nature of the hradship as well as its magnitude and thus give more weight to interests that have a distinctively social value than to purely private interests; and he must consider the possibility of reconciling the competing interests through a carefully crafted protective order.If there is other discovery that a plaintiff must complete in order to be able to resist a motion by the defendant for summary judgment, the district judge has the power under Rule 26(d) to require the plaintiff to complete the other, nonsensitive discovery first.

APPLICATION:

Since an association would not be genuinely voluntary if the members were not allowed to consider applications for new members in confidence, the involuntary disclosure of deliberations on membership applications cannot but undermine the voluntary character of an association and therefore harm interests, whether or not those interests derive any additional dignity from the 1st Amendment.But there were various devices that the district judge could have used to reconcile the parties' competing needs.He could have examined the membership files himself.The protective order that the judge did enter was not well designed to protect the privacy of the Academy's members.

CONCLUSION:

The discover order he issued, when issued, was erroneous.

Seattle Times Co. v. Rhinehart , 467 U.S. 20, Supreme Court of the United States, Justice Powell, 1984

Case Brief

FACTS:

Rhinehart, a religious leader, brought an action for defamation and invasion of privacy against the publishers and authors of several critical articles. TC issued an order compelling plaintiffs to identify donors and the amounts each


contributed, and to produce a list of the foundation's members.The court also issued a protective order prohibiting defendants from publishing the information or otherwise using it except as necessary to prepare for and try the case.The state Supreme Court held that the protective order served the interest of the judiciary in protecting the integrity of its discovery porcesses, an interest sufficient to sustain it against the claim that it infringed on 1st Amendment rights.

ISSUE:

RULE:

The Washington Civil Rules enable parties to litigation to obtain information relevant to the subject matter involved that they believe will be helpful in the preparation and trial of the case.Liberal discovery is provided for the sole purpose of assisting in the preparation and trial, or the settlement, of litigated disputes.Rule 26(c) confers broad discretion on the trial court to decide when a protective order is appropriate and what degree of protection is required.

APPLICATION:

The Rules do not distinguish between public and private information. Nor do they apply only to parties to the litigation, as relevant information in the hands of third parties may be subject to discovery.The provision for protective orders in the Washington Rules requires, in itself, no heightened 1st Amendment scrutiny.TC's order allowing discovery was extremely broad.It is sufficient for purposes of our decision that the highest court in the State found no abuse of discretion in the TC's decision to issue a protective order pursuant to a constitutional state law.

CONCLUSION:

The prevention of the abuse that can attend the coerced production of information under a State's discovery rule is sufficient justification for the authorization of portective orders.A protective order is entered on showing of good cause as required by Rule 26(c), is limited to the context of pretrial discvoery, and does not restrict the dissemination of the information if gained from other sources, it does not offend the 1st Amendment.

In Re Petition of Sheila Roberts Ford , 170 F.R.D. 504, Alabama, United States District Court, M.D. Alabama, Thompson, Cheif Judge, 1997

Case Brief

FACTS:


Ford filed her petition pursuant to Rule 27. In the petition, Ford asks for leave to proceed with the deposition of Sheriff Franklin, alleging that she expects to be a party to an action, but is presently unable to bring said action. The anticipated action surrounds the shooting death of Roberts by law-enforcement officers. She is the Administratix of the estate of Roberts and intends to establish who the appropriate party defendants to the anticipated action are through the testimony of Franklin. She is unable to determine the appropriate party defendants and the basic facts surrounding the death of Roberts without the testimony of Franklin and needs to establish an accurate account of the events that took place before the memories of those involved fade or become distorted by publicity. Ford also gave the names, addresses, and descriptions of the persons she expected to be adverse parties.A hearing was held on the petition. Franklin appeared and opposed the petition because it was not authorized by Rule 27.

ISSUE:

Whether Rule 27 authorizes Ford relief.Whether Rule 27 authorized pre-complaint discovery.

RULE:

If the language of the rule is unambiguous and dispositive and is reasonable within its context, then the court should go no further and simply should enforce the language.A person who desires to perpetuate testimony regarding any matter that may be cognizable in any court of the United States may file a verified petition.Subsection (a)(3) provides that an order allowing examination may be entered only if the court is satisfied that the perpetuation of the testimony may prevent a failure or delay of justice.Rule 11 provides that by presenting to the court a pleading an attorney or unrepresented partyis certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery. The defense of qualified immunity protects law enforcement officials from federal suit in the absence of detailed facxtual allegations of a violation of a clearly established federal right.

APPLICATION:

Ford asserts a desire to preserve testimony. This reason is not credible, however. Ford can do this by simply filing suit today. She presented no evidence that Sheriff Franklin's testimony is in imminent danger of being lost because he is gravely ill or about to leave the country.Rule 27 meets the straightforward test of not being ambiguous.


Rule 27's coverage extends only to the "perpetuation" of testimony. Ford seeks to discover or uncover testimony, not to perpetuate it. She seeks pre-complaint discovery of evidence, not pre-complaint perpetuation of it. There is nothing before the court to indicate that Sheriff Franklin's testimony is in imminent danger of being lost.Rule 27 is not a vehicle for compliance with Rule 11.Under Rule 11, she cannot file suit against any one without first having uncovered some "evidentiary support" for holding the person liable or having obtained some preliminary evidence that there is likely to be some evidentiary support after a reasonable opportunity for further investigation or discovery.

CONCLUSION:

Rule 27 does not offer an avenue of relief.

B. Mandatory Disclosure and the Discovery Plan


1. Mandatory Disclosure

Rule 26(a)(1) - Initial disclosures may be made by describing or categorizing potentially relevant materials so that the opposing party may make an informed decision regarding which documents might need to be examined.The rule does not require that either party produce documents at this initial stage.Rule 26(a)(1) allows initial disclosures to be made by producing copies of the relevant documents.Rule 26(a)(1)(E), excludes eight types of cases in which there is little need for discovery or in which a party is likely to be conducting his or her own case.

Rule 26 permits discovery of insurance agreements.

2. The Discovery Plan

Rule 26(f) was adopted to provide for a discovery conference among the parties and the court.Rule 26(f) was amended to require the parties to meet by themselves to arrange for mandatory disclosures under Rule 26(a)(1) and to develop a comprehensive proposed discovery plan that they then present to the court prior to the time the court's scheduling order is due under Rule 16(b). Rule 26(f) was amended to eliminate the need of the parties to "meet," and to eliminate standing exemption orders, but left intact the power of the court to exempt or alter the requirements for any particular case before it.

Some states now authorize or require the parties to meet and plan discovery as part of pretrial preparation.

Rule 26(f) not only requires the parties to prepare a discovery plan, it also expects them


to confer to consider the possibilities for a prompt settlement or resolution of the case.

Topic Lectures

Recorded Lecture:

Mandatory Disclosure

Provided for under Federal Rule 26(a).

Hickman v. Taylor - Supreme Court ruled that lawyers' communications to third-persons are not discoverable ("work products").Provides for qualified immunity when the information is no longer accessible to the opposing counsel due to lack of access to the source.

Federal Rule 26(b)(3) and 26(b)(4) - codified the Hickman decision.

Topic Hornbook

§ 7.2 Scope - In General

There are three fundamental matters regarding the proper scope of discovery requirements:1. the nature of the issues that can be explored;2. the types of information that can be obtained; and3. the nature of information that must automatically be provided as opposed to that which is available only upon the request by another party.

The federal rules provide that information can, at least upon a proper showing of need, be obtained regarding any matter, not privileged, that is relevant to the subject matter involved in the action.

To take advantage of the full scope, a party must receive authorization.The judge must evaluate the case in light of all the circumstances in the action to determine whether a request for broader discovery is appropriate.Under the federal rules and their state counterparts it has consistently been held proper to discover facts not necessarily admissible themselves, so long as they may lead to admissible evidence.

A party can request information regarding hearsay statements and the like as long as it may assist the inquiring party in obtaining additional information with respect to the case. It is proper to discover facts concerning what the opponent intends to prove as well as to obtain information supporting one's own case.

Information may be sought for the purpose of impeaching a witness likely to be called by the opposing side.Evidence on the issues to be proved in the case, even though it contradicts evidence


presented by the opposing party, is not impeachment.

Some jurisdictions, including the federal courts, introduced mandatory initial disclosure by which attorneys must automatically exchange basic information about the identity of witnesses and relevant documents or other tangible evidence.

Rule 26(a) was amended to eliminate the ability of individual federal courts to provide an opt-out rule for all cases in their districts. Judges do retain the power to modify or eliminate the duty of mandatory disclosure on a case-by-case basis.

The scope of mandatory disclosure differs significantly from that of ordinary discovery and involves two aspects:1. the duty at an early stage of the proceedings to provide the names, addresses, and

phone numbers of the witnesses, as well as to identify documents and tangible items that a party may use to support its claims, plus any damage computations and relevant insurance policies.

2. to supply, as the trial time approaches, information as to evidence that the party will or may use at trial, including the names of the other witnesses who will be called at trial, and a separate list of those who may be called, plus separate lists of documents and other evidence according to whether they will be used or may be used during the proceedings.

In the federal courts disclosure of relevant insurance policies is mandatory, and in a large majority of the states today, a party may discover not only the fact that the potential liability of the defendant is covered by insurance, but the monetary limits of the policy as well.

General discovery of a defendant's assets involves an ivasion of privacy of such a magnitude that courts typically have not allowed it.

Cummings v. General Motors Corp. , 365 F.3d 944, United States Court of Appeals, Tenth Circuit, Kelly, Jr., Circuit Judge, 2004

Case Brief

FACTS:

Cummings brought this suit against GM to recover for injuries sustained in an automobile accident. A jury returned a verdict in favor of GM.Mr. Cummings ran a "partially obscured" stop sign and drover off the road, through a ditch, and into a field.The Cummings brought this suit against GM, asserting that Mrs. Cummings sustained such severe injuries as a result of the design of the seat belt and the seat, as well as GM's failure to warn.Disputes resulted in three motions to compel by the Cummings and several motions for protective orders by GM.The judge denied Plaintiffs' motions, granted Defendants' motions for protective orders,


and granted Defendant's their attorney's fees and costs.The jury returned a verdict for GM, finding GM not liable for any design defect or failure to warn.One month after the verdict, the Cummings discovered videos of child safety seat acceleration tests conducted by GM.The Cummings did not immediately move for relief upon discovery of hte videos. Instead, they waited seven months to file a motion for relief under Federal Rule 60(b). The district court, finding both the motion untimely and lacking in support, denied the motion, and the Cummings appeal.

ISSUE:

RULE:

A party is not obligated to disclo9se witnesses or documents, whether favorable or unfavorable, that it does not intend to use.Failure to disclose information requested during discovery may constitute "misconduct" under Rule 60(b)(3).Rule 26(a)(1) requires that parties make initial disclosures of all documents, data compilations, and tangible things that are in the possession, custody, or control of the party and that the disclosing party may use to support its claim or defenses, unless soley for impeachment.

APPLICATION:

The Cummings' reliance on Rule 26 is misplaced.We find lacking the Cummings' argument that GM was required to disclose the video tapes under FRCP 26.

CONCLUSION:

Under the applicable version of the rule, GM was not required to automatically disclose documents that it did not intend to use.

C. Mechanics of Discovery Devices


1. Depositions

An oral deposition allows a party to question any person (the "deponent"), whether a party or not, under oath. The Federal Rules spell out in detail when, how, before whom, and on what notice as to time and place a deposition may be taken.

Under Federal Rule 30(d)(2), a deposition is limited to one day of seven hours, but the


court may authorize additional time if needed for a fair examination or if the deponent or another person, or other circumstance, impedes or delays the examination.

Federal Rule 30(a)(2)(A) sets a presumptive limit of ten depositions for each party.

Under Federal Rule 30(b)(6) an attorney may notice the deposition of a corporation or association, requiring the latter to produce the person or persons having knowledge of the subject matter upon which the deposition is to be taken.

There is no requirement that a non-party be subpoenaed to a deposition. A nonparty is not subject to any sanction if he is not subpoenaed and does not appear, or if he appears but fails to bring requested documents or other items.A person who fails to respond in a subpoena will be subject to a citation for contempt of court. If a party notices a deposition, but does not subpoena the witness, and, if the witness fails to appear, that party may be ordered to pay the reasonable expenses, including attorneys' fees of any other party for wasting time appearing at the place where the deposition was to be taken.

Under Rule 30(d)(1), a deponent may be instructed not to answer only when necessary to preserve a privilege, to enforce a limitation directed by the court, or to present amotion under Rule 30(d)(4) to terminate or limit an examination that is oppressive or conducted in bad faith.

Rule 30(d)(3) authorizes the imposition of costs and attorney's fees to sanction any culpable individual if the court finds that any impediment, delay, or other conduct has frustrated the fair examination of the deponent.

The most important of the discovery devices is the oral deposition. It is the only significant discovery device that may be directed against any person, and is not confined to parties to the action.

2. Deposition Upon Written Questions

Rule 31 authorizes the taking of depositions upon written questions from parties and nonparties. The answers are given orally after the "officer" puts the questions to the deponent.

3. Interrogatories to Parties

Written interrogatories allow one party to send to another a series of questions to be answered under oath within a specific time. No court order is required and no officers need be appointed; the entire exchange is accomplished by mail. If a question is thought to be improper, the responding party may so so rather than answering. The interrogating party then has the option of seeking a court order requiring an answer. A party has the duty to respond to interrogatories not only on the basis of her own knowledge but also


with regard to the knowledge of other persons that reasonably can be obtained through investigation.The party also has the option to produce business records when the answer may be derived from them.

Rule 33(d) was amended to require a party exercising the option to produce its business records to specify the records from which the answer can be found in sufficient detail to permit the interrogating party to locate and to identify them as readily as can the party served.

Rule 33(a) was amended to impose a presumptive limit of 25 interrogatories, including all discrete parts, that a party may serve.

4. Discovery and Production of Property

Rule 34 and its state counterparts give a party the right to compel an opponent to produce documents and other tangible things for inspection and copying, and to allow the party entry to land or property in the possession or control of the opponent in order to inspect, measure, survey, photograph, test or sample the property, or to observe an operation taking place on the property. A party wanting to inspect documents and things or to enter property first must confer with other parties in accordance with Rule 26(d).

A request must describe the items to be discovered with reasonable particularity.A request must specify a reasonable time, place, and manner for the inspection.The party that receives a request serves a written response on the requesting party, as well as any other parties to the lawsuit, within the time specified by the Rule.The response states the responding party's objections, if any, to part or all of the requested production or inspection.Absent objection, the responding party must produce the documents as requested, or admit counsel to its premises for the scheduled inspection.

Although Rule 34 is limited to parties, amendments to Rule 45 allow a virtually identical procedure to obtain material from nonparties.If the request for production of documents or inspection of premises is addressed to a nonparty, the litigant must serve a subpoena pursuant to Rule 45.The amended rule now provides that an attorney may issue a subpoena commanding any person to give testimony, to produce and permit inspection and copying of designated records or other tangible objects, or to permit inspection of premises.

Rule 34 allows discovery of documents and things in the possession, custody, or control of a party, and courts treat this limitation in a highly fact-specific manner.Rule 34 was amended to include data compilations from which information can be obtained.

5. Physical and Mental Examinations


In many lawsuits, a party will need to have its own medical professionals physically examine an adverse party whose condition is in controversy.

Rule 35 requires a court order for an examination and imposes strict standards.The determination must show "good cause" to compel the examination. The determination of good cause involves weighing the pain, danger, or intrusiveness of the examination against the need for, or usefulness of, the information to be gained.

6. Requests to Admit

Rule 36 authorizes a party to serve on another party written requests to admit the truth of certain matters of fact or of the application of law to fact, or the genuineness of a document or other evidence that may be used at trial.

A request for admission may be served without the necessity of a court order at any time after the parties have conferred in accordance with Rule 26(d).Rule 36 provides that each matter of admission be set forth separately, but says nothing else about the format for requests.The party who receives a request to admit must respond under oath and in timely fashion, admitting or denying each matter for which an admission is requested, or providing a detailed explanation why it cannot admit or deny the matter. The responding party may also object to a request because improperly phrased, or because it seeks privileged or protected information. The responding party may request a court to extend its time to respond. Rule 29 provides that counsel may stipulate to extend its time to limits set forth in Rule 36 unless the stipulation would interfere with any time set for completion of discovery, for hearing of a motion, or for trial.If the party who receives a request to admit does nothing, the matter in the request is deemed admitted.

Rule 36 formerly limited requests for admissions to matters of "fact."The Rule now permits requests for admissions to inquire into matters relating to statements or opinions of fact or of the application of law to fact, including the genuineness of any document described in the request.Under Rule 33, a party has a duty to investigate to ascertain and to disclose information that is not within its personal knowledge but reasonable within its power to obtain.

If a party serves a denial of the matters in the request to admit and at trial the matter is proved by the party requesting the admission, then Rule 37(c) provides that the latter may collect from the other party the reasonable expenses incurred in making the proof.

7. The Duty to Supplement Responses

The amendments to Rule 26(e) broadened the obligation to supplement discovery responses, requiring that disclosures and responses to interrogatories, requests for production, and requests for admissions be supplemented if the party learns that in some


material respect the information disclosed is incomplete or incorrect and if the updated information has not otherwise been made known to the other parties.

8. Use of Discovery at Trial

The use of discovery responses at trial is governed by two sets of rules: the rules of procedure and the rules of evidence.

Rule 36(b) was amended to make clear that admissions under that Rule are conclusive for purposes of the pending action unless the court, on motion, permits the admission to be withdrawn or amended.

Topic Lectures

Recorded Lecture:

Discovery Devices

Oral DepositionRules of admissibility do not apply. Attorney protects privilege and attempts to keep questioning relevant.Operates without judicial supervision. Arrangements are made between parties unless disputed.

Deposition on Written QuestionsQuestions are put on paper, sent to court officer, and then asked of the deponent and recorded.Only requires a neutral witness to provide baseline factual information.

Interrogatories to PartiesOnly can be given to the parties in the lawsuit. Delivered in written form.

Discovery of Documents and Tangible ThingsFederal Rule 34 provides for the discovery of documents and things.

Physical and Mental ExaminationsMay be used when relevant. Requires a court order and a showing of "good cause" if involuntary.The physical and/or mental condition of the opponent must be "in controversy."Only applicable to a party, someone in privity to a party, or someone in the legal control or custody of a party.Does not apply to witnesses.

Requests to AdmitLack of response is considered an admission.

Topic Hornbook


§ 7.7 Mandatory Planning Conference

The federal courts adopted a new set of rules requiring parties to meet early in the case to discuss their respective positions, consider the possibility of settlement, arrange for automatic mandatory disclosure of information as required by the rules, and develop a proposed discovery plan. The court is given the power to modify these requirements if the situation so warrants. Eight categories of cases that are exempted from automatic disclosure are also exempted from the requirement to meet and to develop a discovery plan. The discovery plan must note when mandatory disclosure has or will be made, the subjects and timing of further discovery, the need for court orders limiting disclosure or modifying limitations imposed by the rules, and any other court orders required for the conduct of the pretrial or trial phases of the case.

§ 7.8 Oral Depositions and Depositions on Written Questions

An oral deposition allows the attorneys for the various parties in the case to confront and question any person, including a party, regarding information relevant to any claim or defense. That person (the "deponent") is placed under oath by an officer who is in charge of the deposition. This can be anyone who is authorized to administer oaths or anyone upon whom the parties agree. Although the deponent will normally be present, the parties, by written agreement or through a court order, can take a deposition over the telephone or by other remote electronic means.

In most jurisdictions, when the deposition has been concluded, the reporter prepares a transcript, which the deponent then is called upon to sign.

Federal Rule 30(e) provides only that a deponent will be offered a chance to review the transcript or the recording of the deposition if the deponent or a party so requests prior to the completion of the deposition. In such a case, the deponent may, within 30 days after notice that the transcript or recording is available, sign a statement reciting any changes in form or substance and the reasons for making them.

Typically, each party must pay for the time that party's attorney spends in connection with the deposition. In addition, a party will have to pay for any transcriptions of the deposition received and, perhaps, some witness fees and expenses.

In the federal courts, a party must receive permission to take more than ten depositions, whether orally or by written questions, and each deposition is confined to a single day for a maximum of seven hours. Court approval also must be sought if the proposed deponent already has been deposed in the case.

A party may take the deposition of any person, whether or not a party, who has information relevant to the subject matter of a case.Many rules provide that a party may notice the deposition of a corporation or association, requiring the latter to produce the person or persons having knowledge of the subject


matter upon which the deposition is to be taken. The party seeking the information must detail the issues that are to be explored in order that the organization can ascertain which of its personnel has the relevant knowledge.

Once a deposition begins, the parties are not merely confined to the matters that were the subject of the notification; the deponent may be asked relevant questions on any aspect of the case.

Under modern discovery rules, an attorney may schedule a deposition merely by notifying the opposing attorney of the time and the place where the deposition is to be taken; no court order is required except when plaintiff seeks to take a deposition prior to the time when the defendant must file an answer to the plaintiff's complaint.

In federal courts, a deposition normally cannot be noticed, except by a stipulation of the parties or by leave of court, until the parties have conferred and developed a proposed discovery plan.

If the parties agree on the time, place, or details of the examination, then one may obtain a court order with respect to the disputed matters.

Whenever the person whose testimony is sought is one of the parties, or an officer, director, or managing agent of a party, there is no need for a subpoena. A party can be required to attend and to bring to the deposition documents and other items of evidence in the party's possession merely by including a demand therefore in the notice of a deposition. A party who fails to appear at a properly set deposition may face serious sanctions that can result in the loss of the case.

There is no requirement that a nonparty be subpoenaed to a deposition. However, a nonparty who is not subpoenaed and does not appear, or who appears but fails to bring requested documents or other items, faces no sanctions. A person who fails to respond to a subpoena will be subject to a citation for contempt of court. If a party notices a deposition, but does not subpoena the witness thereto, and if the witness fails to appear, that party may be ordered to pay the reasonable expenses, including attorney fees, of any other party for wasting time appearing at the place where the deposition was to be taken.

If a party or attorney for the party who called a deposition does not appear, then an opposing party who did appear may be able to collect expenses, including attorney fees.

If an action is filed in one state but the deponent lives in another, the court where the action is filed normally will not have the power to subpoena the witness to a deposition in the forum state.

A deposition on written questions,sometimes referred to as a written deposition, operates much as does an oral deposition with one major exception - the attorneys usually are not present. Instead, they send their questions in advance to the officer who then proceeds to read them aloud to the witness who answers orally and whose responses are duly


recorded.

The time and place of a written deposition, as well as the need for a subpoena, the times when leave of court must be obtained, any signature requirements, and similar matters are virtually the same as for an oral deposition.

§ 7.9 Written Interrogatories

Written interrogatories allow one party to send to another a series of questions, to be answered under oath within a specific time.No court order is required and no officers need be appointed; the entire exchange is accomplished by mail.If a question, or any portion of it, is thought to be improper, the responding party may say so, and state the grounds for the objection, rather than answering.

Unlike a deposition, a set of interrogatories may not be sent to any person who has information regarding the subject matter of the case, but only to parties.

A party has the duty to respond to interrogatories not only on the basis of personal knowledge but also with regard to the knowledge of other individuals that reasonably can be obtained through investigation.

In addition to the duty to investigate, some jurisdictions, including the federal courts, require the responding party to state any opinions or contentions as to the facts that are relevant to the subject matter of the action.

When the answer may be derived from the answering party's business records, and when it would be just as easy for the requesting party to search those records as it would be for the responding party, then instead of answering, the responding party may specify the records from which the answers may be obtained and give the inquiring party a reasonable opportunity to look at them.

The responding party must designate with some specificity just what documents contain the information so that the inquring party can find it.

If there would be a far greater burden on the inquiring party to ascertain the information than there would be on the responding party, then the latter must ascertain the answer itself.

Federal courts and many states have adopted provisions limiting the number of interrogatatories that can be served without leave of court.

§ 7.10 Requests for Admission

One party may serve upon any other party a written request to admit the truth of certain matters of fact that are in dispute or to admit the genuineness of any relevant document,


thereby avoiding the necessity of formally authenticating the document at trial. A request for admission may be served without the necessity of a court order.

The party who receives a request to admit must respond under oath, either denying the matter sought to be admitted or setting forth in detail the reasons why the party cannot truthfully admit or deny the matter. The responding party also may object to a request as improper or claim a privilege that excuses a response. If the responding party fails to respond within the prescribed time, then the party may be held to have admitted the matters set out in the request for admission.

A party who did respond with an admission may subsequently be permitted to withdraw or amend the admission if the court finds no prejudice to the requesting party.

A party cannot deny a request for admission on the basis of insufficient information if the necessary information is readily available.

The federal rule and some of its state counterparts specifically permit requests involving the application of law to fact.

In most jurisdictions a request to admit may encompass any issue in the case, no matter how important and no matter whether an admission would result in the termination of the action.

A responding party who is not certain that a fact is true, may deny it or state why it is not possible to deny it.

An admission generally is binding on the party who made it, and supersedes the pleadings pro tanto. No evidence is necessary to establish an admitted fact, and no evidence is permitted to refute it.A party may successfully move to amend an admission, in the same way and under the same circumstances as an amendment to the pleadings, at least if the admission was made in good faith and later found to be untrue.

Admissions are binding only in the present case and cannot be used in any way in other litigation.

§ 7.11 Discovery and Production of Property

Whenever disclosure could lead to admissible evidence, a party is entitled to inspect and copy and document or inspect any real or personal property under the custody or control of another party. Under the Federal Rule and many of its state counterparts, inspection of property in the control of a party is permitted on notice without a court order.

The party seeking discovery must designate the particular items sought to be inspected, copied, or otherwise tested.


Once a case has begun, a party has an obligation to preserve records, electronic or otherwise, containing relevant information, even in the absence of a court order to do so.

The Federal Rules require the responding party to turn over documents as they are kept in the usual course of business or to organize and label them to correspond with the categories in the request.

Under Federal Rules 34(c) and 45, nonparties may be subpoenaed to produce documents and things and to submit to inspections of premises.

Nonparties must submit a specific written objetion to the party or attorney designated in the subpoena when withholding information on a claim of privilege. When objecting on other grounds, a timely motion must be made to the court by which the subpoena was issued.

In cases in which it is necessary to inspect real property in the hands of a nonparty that may not fall within the terms of the discovery rules, a separate action seeking discovery can be brought against the nonparty.

§ 7.12 Physical and Mental Examinations

Traditionally, only parties were subject to physical or mental examinations requested by opposing parties. However, a number of jurisdictions have extended the rule to encompass persons under the legal custody or control of a party.

The rules and statutes permitting examination of persons other than parties do not provide for an order directing them to submit to physical or mental examinations.

Because a party can be required only to make a good-faith effort to produce another person for examination, if the proposed examinee absolutely refused to cooperate, the request for an examination will be thwarted and no sanctions can be imposed.

An examination will be permitted only when a person's physical or mental condition is a key issue in the case.

Physical or mental condition is not "in controversy" simply because evidence of the condition might be used at trial.

No party has a right to an examination without first obtaining a court order on the basis of a showing of good cause. Good cause is established by showing that the defendant has not had an opportunity for independent analysis of the plaintiff's condition.If the requesting party can obtain the necessary information from other sources, good cause will not be found.

A party who is examined pursuant to the discovery rules, even when the examination is


agreed to by stipulation without court order, is entitled, upon request, to receive a copy of the examiner's report, including all findings, results of tests, diagnoses, and other conclusions. The normal limits imposed on discovery of another party's expert do not apply to physical or mental examinations.

Polycast Technology Corp. v. Uniroyal, Inc. , 1990 WL 138968, New York, United States District Court, Southern District of, Francis, United States Magistrate, 1990

Case Brief

FACTS:

Uniroyal sold its wholly-owned subsidiary Plastics to Polycast. Polycase alleges that it entered into this transaction on the basis of misleading financial information that Uniroyal provided about Plastics.The parties to this action have taken substantial discovery from a non-party, Deloitte. Deloitte had performed auditing services for both Uniroyal and Polycast prior to the sale of Plastics. After the transaction was completed, Deloitte continued as Polycast's independent auditors, reviewing Plastics operations.Deloitte now seeks a protective order barring Durant's deposition on the grounds that the information botained would not be relevant and that it would, in any event, be duplicative of the testimony of Bowman, Deloitte's engagement partner on the audit.

ISSUE:

The proposed deposition of Durant, a Deloitte employee who was the on-site manager of an audit of Plastics that commenced immediately after the acquisition of that entity by Uniroyal.

RULE:

APPLICATION:

Even if some heightened consideration should be paid to Deloitte as a non-party witness, it would still be inappropriate to foreclose the deposition of Durant.The fact that Bowman had provided substantial deposition testimony about the audit does not relieve Deloitte of the obligation of producing Durant for examination.Durant was present at the location where the audit was conducted and is in a better position to describe the workings of the audit team and its interactions with Plastics' employees.

CONCLUSION:

His deposition will therefore go forward.


The parties' examination of him shall be limited to one full day of deposition.Deloitte's request for a protective order barring the deposition of Durant is denied, but that deposition shall be limited to one day.

Wilson v. Olathe Bank , 184 F.R.D. 395, Kansas, United States District Court, District of Kansas, Rushfelt, United States Magistrate Judge, 1999

Case Brief

FACTS:

Defendants seek an order to prohibit plaintiffs from videotaping their depositions and defendant seeks to prohibit plaintiffs from videotaping the deposition of its President.

ISSUE:

RULE:

FRCP 30(b)(2) specifically permits depositions to be recorded by nonstenographic means, unless the court orders otherwise.FRCP 26(c) provides a proper procedure to present objections to the court. That Rule authorizes a protective order against annoyance, embarrassment, oppression, and undue burden or expense.FRCP 30(b)(2) provides that the party taking the deposition shall bear the cost of the recording.FRCP 30(b)(2) thus gives plaintiffs a right to choose the method of recording and the duty to bear the cost.

APPLICATION:

No movant has agreed to a videotaped deposition.No party suggests that the court has disallowed videotaped depositions. A review of the record, furthermore, reveals no such prohibition.Nothing requires movants to purchase a copy of the video.The speculative possibility that a party may incur increased taxable costs constitutes no good cause to prohibit videotaping.Plaintiffs have no burden to justify the procedure. Movants have the burden to justify a protective order against videotaping. They have not carried that burden.

CONCLUSION:

FRCP 30(b)(2) contains no requirement regarding the availability of the witness for trial. The objection shows no annoyance, embarrassment, oppression, or undue burden or expense.


The court overrules the objection.The court overrules the Motions for Protective Order.

In Re Auction Houses Antitrust Litigation , 196 F.R.D. 444, New York, United States District Court, Southern District of, Kaplan, District Judge, 2000

Case Brief

FACTS:

The lawsuit involved a class-action challenge to an alleged price-fixing conspiracy by companies in the business of providing auction services of fine and applied arts, furniture, antiques, automobiles, collectibles and other items.Christie's has produced handwritten notes from the files of its former chief executive officer, Davidge. Defendant Taubman, former chairman of Sotheby's, served interrogatories on Christie's by which it sought a great many details concerning the Davidge Documents. Christie's objected to substantially all of these interrogatories on the ground that they seek information that is not in its possession, custody or control.Taubman disputes this assertion and seeks an order compelling Christie's to respond fully, including in its response information it contends is available to it from Davidge.Christie's entered into an agreement with Davidge concerning the termination of his employment. Christie's obligation to pay it is conditioned upon Davidge's performance of his contractual obligations to provide informaiton to Christie's from time to time in relation to the business during his employment and to provide details.Christie's and Davidge entered into the Defence Agreement whereby Christie's agreed to indemnify Davidge.

ISSUE:

RULE:

A party served with interrogatories is obliged to respond by furnishing such information as is available to the party. The mere existence of foreign blocking statutes does not prevent a U.S. court from ordering discovery.

APPLICATION:

Christie's is obliged to respond to the interrogatories not only by providing the information it has, but also the information within its control or otherwise obtainable by it.Davidge agreed to provide Christie's with information in his possession. By entering into those agreements, he knowingly and voluntarily subjected himself to the risk that a failure to provide information requested by Christie's might be a material breach of the


agreements and excuse Christie's from any further obligation to perform, i.e., any obligation to pay or indemnify him.There is no countervailing UK governmental interest to be taken into account. Nor would Christie's be faced with serious adverse consequences in the UK if it were to take a firm position opposite Davidge.

CONCLUSION:

THe economic incentive for Davidge is sufficiently substantial to offer a real possibility that the information would be forthcoming in response to a determined Christie's effort.

In Re Convergent Technologies Securities Litigation , 108 F.R.D. 328, California, United States District Court, Northern District of, Brazil, Magistrate Judge, 1985

Case Brief

FACTS:

ISSUE:

When (at which juncture in the pretrial period) should plaintiffs answer "contention" interrogatories served by defendants.

RULE:

No party has an absolute right to have answers to contention interrogatories, or to any kind of interrogatory.A court can determine whether any given interrogatory is otherwise proper only after considering among other things, whether it is interposed for any improper purpose, and wheter it is unreasonable or unduly burdensome or expensive, given the needs of the case, the discovery already had in the case, the amount in controversy, and the importance of the issues at stake in the litigation.

APPLICATION:

Because the benefits that can flow from clarifying and narrowing the issues in litigation early in the pretrial period are potentially significant, it would be unwise to create a rigid rule, even if applicable to only certain categories of vases, that would always protect parties from having to answer contention interrogatories until some predetermined juncture in the pretrial period.The court fails to see how substantial interests of Burroughs will be harmed if it is forced to wait until no more than 60 days after completion of that document production for answers to its interrogatories.Defendants have failed to show, by carefully developing the applicable law, and by


applying that law to the facts as alleged by plaintiffs or as supported in competent declarations or documentary evidence from defendants, that there is a real likelihood that early answers from plaintiffs to questions in these areas will result in a significant re-shaping of the litigation or a significant savings to one or more of the defendants.

CONCLUSION:

The following procedure is appropriate with respect to contention interrogatories filed before most other discovery has been completed.The propounding party must craft specific, limited (in number) questions.The responding party must examine such questions in good faith and, where it appears that answering them would materially contribute to any of the goals discussed in this opinion, must answer the interrogatories.If answering some, but not all, of the questions would materially contribute to any of the goals described above, the responding party must answer those questions.Where the responding party feels, in good faith, that providing early answers would not contribute enough to justify the effort involved, that party should telephone or write opposing counsel to explain the basis for his position.If opposing counsel continues to press for early answers, the responding party should enter objections or seek permission from the Court to file an objection to the interrogatories as a group.Thereafter, the burden would fall on the propounding party to seek an order compelling answers.In seeking such an order, the propounding party would bear the burden of justification described above.The court denies defendants' motions to compel except to the limited extents set forth above.

Zubulake v. UBS Warburg LLC , 217 F.R.D. 309, New York, United States District Court, Southern District of, Scheindlin, District Judge, 2003

Case Brief

FACTS:

Zubulake is suing UBS for gender discrimination and illegal retaliation. She contends that key evidence is located in various e-mails exchanged among UBS employees that now exist only on backup tapes and perhaps other archived media. Zubulake now moves for an order compelling UBS to produce those e-mails at its expense.UBS agreed unconditionally to produce responsive e-mails from the accounts of five individuals named by Zubulake.UBS, however, produced no additional e-mails and insisted that its initial production was complete. UBS never searched for responsive e-mails on any of its backup tapes. To the contrary, UBS informed Zubulake that the cost of producing e-mails on backup tapes would be prohibitive.The judge ordered UBS to produce for deposition a person with knowledge of UBS's e-


mail retention policies in an effort to determine whether the backup tapes contained the deleted e-mails and the burden of producing them.Mr. Behny testified to UBS's e-mail backup protocol, and also to the cost of restoring the relevant data.

ISSUE:

Whether a request for all documents concerning any communication by or between UBS employees concerning plaintiff should be granted.

RULE:

The presumption is that the responding party must bear the expense of complying with discovery requests, but it may invoke the district court's discretion under Rule 26(c) to grant orders protecting it from undue burden or expense in doing so, including orders conditioning discovery on the requesting party's payment of the costs of discovery.Eight-factor test to determine whether discovery costs should be shifted:1. the specificity of the discovery requests;2. the likelihood of discovering critical information;3. the availability of such information from other sources;4. the purposes for which the responding party maintains the requested data;5. the relative benefits to the parties of obtaining the information;6. the total cost associated with production;7. the relative ability of each party to control costs and its incentive to do so; and8. the resources available to each party.Under Rule 34, a party may request discovery of any document, including writings, drawings, graphs, charts, photographs, phonorecords and other data compilations.

APPLICATION:

Electronic documents are no less subject to disclosure than paper records.Zubulake is entitled to discovery of the requested e-mails as long as they are relevant to her claims.Because of the way that UBS backs up its e-mail files, it clearly could not have searched all of its e-mails without restoring the 94 backup tapes (which UBS admits that it has not done). UBS therefore cannot represent that it has produced all responsive e-mails. Zubulake herself has produced over 450 pages of relevant e-mails, including e-mails that would have been responsive to her discovery requests but were never produced by UBS.These two facts strongly suggest that there are e-mails that Zubulake has not received that reside on UBS's backup media.Whether production of documents is unduly burdensome or expensive turns primarily on whether it is kept in an accessible or inaccessible format.Five categories of data, listed in order from most accessible to least accessible, are described in the literature on electronic data storage:1. Active, online data;2. Near-line data;


3. Offline storage/archives;4. Backup tapes; and5. Erased, fragmented or damaged data.For active mail files and e-mails stored on optical disks, it would be wholly inappropriate to even consider cost-shifting.In order to search the tapes for responsive emials, UBS would have to engage in a costly and time-consuming process. It is therefore inappropriate to consider cost shifting.

CONCLUSION:

Deciding disputes regarding the scope and cost of discovery of electronic data requires a three-step analysis:1. For data that is kep in an accessible format, the usual rules of discovery apply; the responding party should pay the costs of producing responsive data.2. It is necessary to determine what data may be found on the inaccessible media.3. In conducting the cost-shifting analysis, the seven factors should be considered, weighted more-or-less in the listed order:1. The extent to which the request is specifically tailored to discovery relevant information;2. The availability of such information from other sources;3. The total cost of production, compared to the amount in controversy;4. The total cost of production, compared to the resources available to each party;5. The relative ability of each party to control costs and its incentive to do so;6. The importance of the issues at stake in the litigation; and7. The relative benefits to the parties of obtaining the information.UBS is ordered to produce all responsive e-mails that exist on its optical disks or on its active servers at its own expense.UBS is also ordered to produce, at its expense, responsive e-mails from any five backup tapes selected by Zubulake.

Schlagenhauf v. Holder , 379 U.S. 104, Supreme Court of the United States, Mr. Justice Goldberg, 1964

Case Brief

FACTS:

An action seeking damages arising from personal injuries suffered by passengers of a bus which collided with the rear of a tractor-trailer.Contract Carriers and National Lead petitioned the District Court for an order directing petitioner to submit to both mental and physical examinations. The petition alleged that the mental and physical condition of Schlagenhauf was in controversy.The District Court ordered Schlagenhauf to submit to nine examinations despite the fact that the petition clearly requested a total of only four examinations.Petitioner applied for a writ of mandamus. The Court of Appeals denied mandamus.


ISSUE:

The validity and construction of Rule 35(a) of the FRCP as applied to the examination of a defendant in a negligence action.

RULE:

The person to be examined must be a party to the case.

APPLICATION:

Rule 35 on its face applies to all "parties," which under any normal reading would include a defendant.We can see no basis for a distinction. Issues cannot be resolved by a doctrine favoring one class of litigants over another.Rule 35 only requires that the person to be examined by a party to the "action," not that he be an opposing party vis-a-vis the movant.Schlagenhauf was a "party" to this "action" by virtue of the original complaint.Petitioner was clearly a party at this juncture under any test.Rule 35 requires discriminating application by the trial judge who must decide whether the party requesting a mental or physical examination or examinations has adequately demonstrated the existence of the Rule's requirements of "in controversy" and "good cause."Schlagenhauf did not assert his mental or physical condition either in support of or in defense of a claim. His condition was sought to be palced in issue by other parties.Rule 35 required that these parties make an affirmative showing that petitioner's mental or physical condition was in controversy and that there was good cause for the examinations requested. This, the record plainly shows, they failed to do.

CONCLUSION:

The judgment of the Court of Appeals is vacated and the case is remanded to the District Court to reconsider the examination order in light of the guidelines herein formulated and for further proceedings in conformity with this opinion.

Battle v. Memorial Hospital at Gulfport , 228 F.3d 544, United States Court of Appeals, Fifth Circuit, Parker, Circuit Judge, 2000

Case Brief

FACTS:

Battle brought suit alleging that negligent medical treatment by Reeves resulted in injuries. Defendants prevailed on all claims and plaintiffs appeal.Daniel was healthy and normal until he developed a fever and sores on his tongue. Mrs. Battle took Daniel to Reeves, who diagnosed an ear-infection and tonsillitis and


prescribed a course of antibiotics. Daniel's condition did not imporve. Mrs. Battle called and left a message with Reeve's answering service because Daniel's jaws were snapping shut. Mrs. Battle then called 911 because Daniel's face began to twitch and his eyes rolled back. When Dr. Reeves called back, the paramedics had arrived and they informed him that Daniel had seizures, fever, and that one hand and his face were twitching.Daniel was seen in the ER by Graves and Sheffield. Sheffield performed a lumbar puncture which Graves interpreted as normal. He was discharged and went home with a new set of antibiotics.Daniel was continuing to have seizures. Reeves instructed her to take Daniel back to the ER where Aust diagnosed Daniel with seizure disorder and pneumonia. Aust instructed her to not bring that child right back in here. Daniel's seizures returned and continued on and off. Reeves instructed her to have Daniel admitted, which she did. They also ordered an EEG, which was read seven days later and grossly abnormal.All the tests revealed abnormal results consistent with HSE.Daniel was discharged in a near vegetative state. He will require 24-hour care for the rest of his life.Prior to trial, the district court granted MSJ for the hospital on plaintiffs' state law claims, finding that the claims had not been filed within the controlling MI 1-year SOL.Plaintiffs moved for ao continuance based on the unavailability for trial of another expert. Plaintiffs noticed the deposition. The district court granted plaintiffs' motion for continuance and reset the trial.Young's video deposition was admitted, but plaintiffs were not allowed to call him live. Plaintiffs challenge each of these rulings on appeal.

ISSUE:

RULE:

Nothing prohibits the use of a discovery deposition at trial, particularly against the party who conducted it.Rule 26(b)(4) states that a party may depose any perosn who has been identified as an expert whose opinion may be presented at trial.A party has no right to introduce former testimony under RUle 804 without showing similar motive.

APPLICATION:

Defendants in this case were clearly on the same side of the same issues at the deposition and at the trial and had the same interest in asserting and prevailing on those issues.Defendants posit no argument that Lakeman's deposition testimony lacked reliability.There is nothing in the record to establish his availability.

CONCLUSION:

Defendants' motive in questioning Lakeman at his deposition was similar to their motive


at trial and consequently, Lakeman's deposition was admissible pursuant to Rule 804.Lakeman's testimony was not merely cumulative of Whitley's deposition. In fact, it added information that, if the jurors found it credible, might have been determinative of the question of whether Daniel had HSE. Therefore, the exclusion of Lakeman's deposition testimony was not harmless error.The district court did not abuse its discretion in requiring plaitniffs to use the video deposition rather than live testimony in this case.The substantial rights of plaintiffs were affected. Judgment for defendants must be vacated and this case remanded for further proceedings.

Civil Procedure – Module 19Discovery: Limits and Sanctions

XI. Pretrial Devices for Obtaining Information

D. Special Problem Regard Scope of Discovery


1. Materials Prepared in Anticipation of Trial

Federal Rule 26(b)(3) was added specifically to deal with the discovery work product.

Impeachment is solely for the purpose of casting doubt on the veracity of a witness. But films of a party's physical condition may also be direct evidence of the condition itself. Certainly evidence that bears directly on the facts at issue in the case cannot be kept hidden until trial and then held to be admissible. The vast majority of courts thus permit discovery of such evidence if it is to be used at trial, regardless of its intended purpose.

Rule 26(b)(3) provides protection against disclosure of the mental impressions, conclusions, and opinions of an attorney or other representative of a party.

Rule 26(b)(3) excludes from protection a party's own prior statement concerning the action.The Rule also permits a nonparty witness to obtain a copy of his statement upon request.

2. Privileges and Work Product - The Extent of Protection

Rule 26(b)(1) limits discovery to matter that is "not privileged."A privileged rule gives a person a right to refuse to disclose information that he otherwise would be required to provide. It also may give a person the right to prevent someone else from disclosing information, or it may give its possessor a right to refuse to become a witness.

For the attorney-client privilege to attach to a communication, four elements must be


present:1. The asserted holder of the privilege is or sought to be a client;2. The person to whom the communication was made

(a) is a member of the bar of a court, or his subordinate and (b) in connection with this communication is acting as a lawyer;

3. The communication relates to fact of which the attorney was informed(a) by his client(b) without the presence of strangers(c) for the purpose of securing primarily either

(i) an opinion on law or(ii) legal services or(iii) assistance in some legal proceeding, and not

(d) for the purpose of committing a crime or tort; and4. The privilege has been

(a) claimed and(b) not waived by the client.

Federal Rule of Evidence 501 directs a federal district court sitting in a diversity case to apply the privilege law that would be applied by the courts of the state in which the federal court sits. When federal and state law claims are joined, federal law may govern the attorney-client privilege unless the allegedly privileged communication relates solely to the state law claims.

1. The communication must be one that would not have been made but for the contemplation of legal services.2. The content of the communication must relate to the legal services being rendered.3. The information-giver must be an employee, agent, or independent contractor with a significant relationship to the corporation or the corporation's involvement in the transaction that is the subject of legal services.4. The communication must be made in confidence.5. The privilege may be asserted either by the corporation or by the information-giver.

The attorney-client privilege is waived if a protected communication is disclosed voluntarily to third persons, and once waived, a party can be forced to disclose not only the specific communication but all communications involving the same subject matter.A party must assert the privilege when information is sought and cannot selectively reveal portions of a communication and maintain the privilege for the remainder.

If the privilege attaches to a communication, a court cannot compel its disclosure no matter how compelling the adversary's need for the information.

Rule 26(b)(5) requires that a claim of privilege or work product be made expressly and the nature of the items withheld must be described in a manner that enables other parties to assess the applicability of the privilege.

3. Expert Information


FRCP 26(a)(2)(A) - "disclosure of identity of any person who may be used at trial."FRCP 26(a)(2)(B) - requires disclosure of written expert report by a witness who is retained or specially employed to provide expert testimony.FRCP 26(a)(2)(C) - "timing of expert disclosures."FRCP 26(e)(2) imposes a duty to supplement the mandatory disclosures if the party learns that additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing.FRCP 26(b)(4)(B) permits discovery of facts and opinions from an expert employed in anticipation of trial who will not be called to testify, but only upon a showing of special circumstances.

Topic Lectures

Class Lecture:

Discovery

The exchange of information in litigation whose purpose is to preserve evidence that may not be available later in trial, and to determine what issues are and are not in dispute.

Scope of Discovery

Any matter that is not privileged that is relevant (Rule 26).Anything that is reasonably calculated to lead to admissible evidence.Hypo:Sally and John are in contract to sell house. Sally changes her mind and breaches contract. John files suit in federal court under diversity action.John asks for:1. listing of any litigation that Sally has been involved in2. bank statements and credit info3. medical history for mental health.What are Sally's procedural options?Options are to comply with response, request clarification or object.Sally may request a protective order.Objection puts burden on other side to seek justification or drop request.Rule 26 requires obligation to "work things out."Determine if there is any information to voluntarily disclose that would help lead to a settlement.Arguments for not disclosing this information are:1. not relevant to the current breach of contract action2. perhaps an invasion of privacy issue (privilege - doctor/patient)3. not reasonably calculated to lead to something that is admissible

If plaintiff seeks damages for injury, privilege for medical records is basically waived.Here, since Sally is not seeking damages for injuries, privilege may be invoked.


Hickman v. Taylor - Issue was the extent to which the adverse party can request information gained in anticipation of possible litigation.Court ruled that In the absence of a showing of need, an opposing party can NOT discover information obtained by an attorney while preparing for litigation (the "Work Product Rule").Work product is not discoverable unless there is a showing of substantial need.

"work product" - Written statements, private memoranda and personal recollections prepared or formed by a party's counsel in the course of his legal duties (extended to include not only work of attorneys, but by investigators, etc.).

"anticipation of litigation" - Based on the attorney's "good faith and objectively reasonable belief" that litigation is a real possibility.

Privileges for work product may be overcome by court order, subject to limitations in Rule 26(b)(3).

Hypo:Jeff was burned in a fire at his friend Sue's house, caused by a faulty portable heater. Insurance company investigates day after fire and takes pictures of portable heater, speak to witnesses as well as Jeff, and write memos for their own file.Jeff sues Sue and seeks discovery asking for pictures, interviews, and written memos. Sue claims work-product privilege.The issues are:ProceduralRelationship of the insurance company to the claim?Are requested materials discoverable?Is evidence still available for separate inquiry?Is the information requested relevant to the case?Rule 26(b)(3) - insurance companies and agents can be covered under the work-product rule, in general.Was information gathered by insurance company done so in anticipation of litigation?SubstantivePictures likely to be discoverable, witness statements may require adverse party to conduct their own interviews, attorney memos are most likely not discoverable.Depends upon whether or not there is an undue hardship.Jeff will be entitled to get a copy of his own statement.

Expert Witnesses

Under the Federal Rules, an expert is one who is employed to assist in preparing a case for trial; their theories, opinions would be based on the nature of their training / assumptions are part of their expertise.Information gathered by the attorney from an expert is discoverable.


Discovery tools available:1. Depositions (oral and written)2. Interrogatories3. Admissions4. Subpoenas5. Physical and mental exams6. Request for documents

Holder case - Applicability of Rule 35 (medical and mental exams). Court ruled that there is no distinction between plaintiffs and defendants.To compel such an exam, the plaintiff must show that the condition was "in controversy" and that there is "good cause."The rule applies to all parties in the action, whether or not they are adverse.

Rule 26(f) - "pre-trial conference." Purpose is to Discuss relative positions; consider settlement; arrange for mandatory disclosure of info.; develop a discovery plan.

Topic Hornbook

§ 7.13 The Duty to Supplement Responses

Specific provisions require a party, to a limited extent, to update and supplement responses to previous discovery requests and orders, and, in jurisdictions in which automatic disclosures are required, to update and correct those disclosures. In almost all courts a party has an affirmative obligation to amend a prior disclosure of witnesses to reveal the names of any new witnesses who have been uncovered. There is also an obligation to amend other prior responses, but only to correct any answer or disclosure that the party learns was incorrect when made, or which was correct when made but is no longer true, and when the failure to amend would amount to a knowing concealment. In addition, the rules provide that the court may order further corrections and amendments.

Although there are specific sanctions provided for derelictions in a party's obligation to cooperate with discovery under the rules, often there is no specific provision dealing with sanctions for a failure to update responses.

A specific provision in the federal rules provides sanctions for a party who fails to update its disclosures, including automatic disclosures, responses to interrogatories, requests for production of documents or other items, and requests for admissions. Unless the failure is harmless, the court must exclude the undisclosed information or witnesses on any motion or at any hearing at trial, and may require payment of reasonable expenses to any aggrieved party, including attorney fees caused by the failure, and impose additional protective orders and sanctions as appropriate.

§ 7.14 Discovery Directed to Nominal Parties

Nonparties generally are immune from discovery except upon deposition or requests for production of documents and things, or inspection of premises.


Nonparties do not have to comply with those requests unless they are formally subpoenaed.

§ 7.15 Controlling Harassment or Oppression: Protective Orders

Federal Rule 26(c) provides the courts with broad discretion to protect a party or other person from annoyance, embarrassment, oppression, or undue burden or expense.The party seeking to limit disclosure, even of information of marginal relevance, carries a heavy burden of establishing reasons for the limitation. When the purpose of the discovery is harassment or to obtain information for reasons other than the prosecution or defense of the lawsuit, the court may eliminate discovery altogether.

The Federal Rules were amended to include a signature requirement. Each federal discovery request, response, and objection made by a party now must be signed by the attorney, or by a party who is unrepresented.

A person who signs a discovery request, response, or objection in bad faith is subject to sanctions under the rule.

The court also has power to control the time, place, and atmosphere of the discovery situation.

Hickman v. Taylor , 329 U.S. 495, Supreme Court of the United States, Mr. Justice Murphy, 1947

Case Brief

FACTS:

A tug sank while engaged in helping to tow a car float across the Delaware River. Five of the nine crew members were drowned. Three days later the tug owners and the underwriters employed a law firm, of which respondent Fortenbaugh is a member, to defend them against potential suits by representatives of the deceased crew members and to sue the railroad for damages to the tug.A public hearing was held. The four survivors were examined. This testimony was recorded and made available to all interested parties. Shortly thereafter, Fortenbaugh privately interviewed the survivors and took statements from them with an eye toward the anticipated litigation; the survivors signed these statements. Fortenbaugh also interviewed other persons believed to have some information relating to the accident and in some cases he made memoranda of what they told him.Four of he claims were settled without litigation. The fifth claimant brought suit in a federal court under the Jones Act naming as defendants the two tug owners, individually and as partners, and the railroad.Supplemental interrogatories asked whether any oral or written statements, records, reports or other memoranda had been made concerning any matter relative to the towing operation, the sinking of the tug, the salvaging and repair of the tug, and the death of the


deceased. If the answer was in the first affirmative, the tug owners were then requested to set forth the nature of all such records, reports, statements or other memoranda.The tug owners, through Fortenbaugh, answered all of the interrogatories except the ones described. While admitting that statements of the survivors had been taken, they declined to summarize or set forth the contents. They did so on the ground that such requests called for privileged matter obtained in preparation for litigation and constituted an attempt to obtain indirectly counsel's private files.The District Court held that the requested matters were not privileged. The court then decreed that the tug owners and Fortenbaugh answer plaintiff's supplemental interrogatories.The Third Circuit Court of Appeals reversed the judgment of the District Court. It held that the information here sought was part of the work product of the lawyer and hence privileged from discovery under the FRCP.

ISSUE:

The extent to which a party may inquire into oral and written statements of witnesses or other information, secured by an adverse party's counsel in the course of preparation for possible litigation after a claim has arisen.Whether any of those devices may be used to inquire into materials collected by an adverse party's counsel in the course of preparation for possible litigation.

RULE:

A party clearly cannot refuse to answer interrogatories on the ground that the information sought is solely within the knowledge of his attorney.As indicated by Rules 30(b) and (d) and 31(d), limitations inevitably arise when it can be shown that the examination is being conducted in bad faith or in such a manner as to annoy, embarrass or oppress the person subject to the inquiry. Rule 26(b) provides further limitations when the inquiry touches upon the irrelevant or encroaches upon the recognized domains of privilege.Rule 30(b) gives the trial judge the requisite discretion to make a judgment as to whether discovery should be allowed as to written statements secured from witnesses.

APPLICATION:

It does not appear from the record that petitioner filed a motion under Rule 34 for a court order directing the production of the documents in question. Indeed, such an order could not have been entered as to Fortenbaugh since Rule 34, like Rule 33, is limited to parties to the proceeding thereby excluding their counsel or agents.Rule 33 did not permit him to obtain such memoranda and statements as adjuncts to the interrogatories addressed by the individual tug owners. Production was sought of documents prepared by a party's attorney after the claim has arisen. Rule 33 does not make provision for such production, even when sought in connection with permissible interrogatories.The memoranda, statements and mental impressions in issue in this case fall outside the


scope of the attorney-client privilege and hence are not protected from discovery on that basis.We are dealing with an attempt to secure the production of written statements and mental impressions contained in the files and the mind of the attorney Fortenbaugh without any showing of necessity or any indication or claim that denial of such production would unduly prejudice the preparation of petitioner's case or cause him any hardship or injustice.Neither Rule 26 nor any other rule dealing with discovery contemplates production under such circumstances.It falls outside the arena of discovery and contravenes the public policy underlying the orderly prosecution and defense of legal claims.Where relevant and non-privileged facts remain hidden in an attorney's file and where production of those facts is essential to the preparation of one's case, discovery may properly be had.Production might be justified where the witnesses are no longer available or can be reached only with difficulty.No attempt was made to establish any reason why Fortenbaugh should be forced to produce the written statements.But as to oral statements made by witnesses to Fortenbaugh, whether presently in the form of his mental impressions or memoranda, we do not believe that any showing of necessity can be made under the circumstances of this case so as to justify production.

CONCLUSION:

Until some rule or statute definitely prescribes otherwise, we are not justified in permitting discovery in a situation of this nature as a matter of unqualified right. When Rule 26 and the other discovery rules were adopted, this Court and the members of the bar in general certainly did not believe or contemplate that all the files and mental processes of lawyers were thereby opened to the free scrutiny of their adversaries. And we refuse to interpret the rules at this time so as to reach so harsh and unwarranted a result.

Upjohn Co. v. United States , 449 U.S. 383, Supreme Court of the United States, Justice Rehnquist, 1981

Case Brief

FACTS:

Petitioner Upjohn manufactures and sells pharmaceuticals. Independent accountants conducting an audit of one of Upjohn's foreign subsidiaries discovered that the subsidiary made payments to or for the benefit of foreign government officials in order to secure government business. The accountants informed Thomas, Upjohn's VP, and General Counsel. He consulted with outside counsel. It was decided that the company would conduct an internal investigation. The attorneys prepared a letter containing a questionnaire. The questionnaire sought detailed information concerning such payments.


Responses were to be sent directly to Thomas.The company voluntarily submitted a preliminary report to the SEC disclosing certain questionable payments. A copy of the report was simultaneously submitted to the IRS.The IRS issued a summons demanding production of all files relative to the investigation.The company declined to produce the documents specified on the grounds that they were protected from disclosure by the attorney-client privilege and constituted the work product of attorneys prepared in anticipation of litigation.The court concluded that the summons should be enforced. Petitioners appealed to the Court of Appeals which rejected the finding of a waiver of the attorney-client privilege.

ISSUE:

The scope of the attorney-client privilege in the corporate context and the applicability of the work-product doctrine in proceedings to enforce tax summons.

RULE:

Federal Rule of Evidence 501 provides that the privilege of a witness shall be governed by the principles of the common law as they may be interpreted by the courts of the United States in light of reason and experience.Rule 26 accords special protection to work product revealing the attorney's mental processes. The Rule permits disclosure of documents and tangible things constituting attorney work product upon a showing of substantial need and inability to obtain the equivalent without undue hardship.In ordering discovery of such materials when the required showing has been made, the court shall protect against disclosure of the mental impressions, conclusions, opinions or legal theories of an attorney or other representative of a party concerning the litigation.Such work product cannot be disclosed simply on a showing of substantial need and inability to obtain the equivalent without undue hardship.

APPLICATION:

The control group test adopted by the court frustrates the very purpose of the privilege by discouraging the communication of relevant information by employees of the client to attorneys seeking to render legal advice to the client corporation.The terms of the test adopted by the court restricts the availability of the privilege to those officers who play a "substantial role" in deciding and direction a corporation's legal response.The privilege only protects disclosure of communications; it does not protect disclosure of the underlying facts by those who communicated with the attorney.The Government was free to question the employees who communicated with Thomas and outside counsel. Upjohn has provided the IRS with a list of such employees, and the IRS has already interviewed some of them. While it would probably be more convenient for the Government to secure the results of petitioner's internal investigation by simply subpoenaing the questionnaires and notes taken by petitioner's attorneys, such considerations of convenience do not overcome the policies served by the attorney-client


privilege.The Court of Appeals erred and the work-product doctrine does apply to IRS summons.Nothing in the language of the IRS summons provisions or their legislative history suggests intent on the part of Congress to preclude application of the work-product doctrine.Forcing an attorney to disclose notes and memoranda of witnesses' oral statements is particularly disfavored because it tends to reveal the attorney's mental processes.

CONCLUSION:

The attorney-client privilege protects the communications involved in this case from compelled disclosure, and the work-product doctrine does apply in tax summons enforcement proceedings.A far stronger showing of necessity and unavailability by other means than was made by the Government or applied by the Magistrate in this case would be necessary to compel disclosure.

Krisa v. Equitable Life Assurance Society , 196 F.R.D. 254, Pennsylvania, United States District Court, Middle District of P, 2000

Case Brief

FACTS:

Krisa seeks production of preliminary reports and other documents created by Equitable's experts in connection with this litigation. Equitable responds that it need not produce the draft reports and written analyses generated by its experts because such documents are protected by the work product doctrine codified in Rule 26(b)(3).

ISSUE:

Equitable's decision to deny Krisa's application for disability benefits under insurance policies issued to Krisa by Equitable.

RULE:

Rule 26(b)(4) generally authorizes discovery of testifying expert witnesses.Core work product generated by an attorney was shielded from discovery even if disclosed to an expert.Rule 26(a)(2) requires a party to disclose automatically the expert's opinions, the basis and reasons therefore, and the data or other information considered by the witness in forming the opinions.

APPLICATION:

Equitable's representations indicate that counsel's mental processes and opinions are not


contained in the expert's draft reports.

CONCLUSION:

The conclusion that draft reports and other documents prepared by Equitable's witnesses in this case are not covered by the work product privilege is consistent with the policy considerations underlying the privilege.Only one document sent by Equitable's counsel to an expert contains attorney work product, and only one document prepared by an expert witness embodies core work product. Equitable will not be compelled to produce these documents.

E. Sanctions and Judicial Supervision of Discovery


Rule 26(g) imposes on each attorney the duty, before proceeding with respect to any discovery matter, to make a reasonable inquiry and to certify that certain standards have been met, and it mandates sanctions against attorneys, their clients, or both, who violate this duty.

Rule 37 was revised to reflect the addition of the mandatory disclosure provision in Rule 26(a), by providing a means to compel that disclosure.The revised Rule 37 also provides that a party who fails to disclose information in accordance with Rule 26(a) is precluded from introducing the information as evidence at trial. This measure does not require a motion by the opposing party.

The most severe sanction that a court can impose is dismissal of plaintiff's complaint or ordering the entry of judgment against defendant.

In addition to dismissal or default, other possible discovery sanctions include:1. preclusion of a defense;2. dismissal of counterclaims;3. inability to use evidence in motion practice;4. inability to use exhibits at trial;5. establishment of a party's prima facie case;6. forfeiture; or7. a jury instruction that a party's failure to disclose can lead to the assumption that evidence would be unfavorable to that party.

Sanctions also may take the form of less drastic measures such as continuances and stays, contempt citations and monetary fines, awards of attorney's fees, or court expense reimbursement.

American Rule - Unsuccessful litigants do not pay their opponent's attorney's fees, even those made necessary by their failure to drop or settle a losing cause.


Topic Hornbook

§ 7.16 Sanctions and Motions to Compel Response

Modern discovery rules contain specific provisions setting forth sanctions available for abuse of the discovery process. When a party violates the discovery rules by failing to comply with mandatory disclosure provisions or to appear at a requested deposition or to answer interrogatories, the opposing party may request sanctions despite the fact that no court order has been issued.

In the event that a party fails to make the automatic mandatory disclosures, a standard penalty would appear to be the exclusion of the undisclosed information during any phase of the trial process, unless the error is harmless. Courts will not enforce this sanction, however, if the party had "substantial justification" for failing the make the disclosure, or if the court otherwise believes the sanction is unwarranted.

In addition to or in lieu of direct sanctions, the court can order a party to pay an opponent the reasonable expenses of obtaining sanctions, including attorney fees.

When the discovery process breaks down, an aggrieved party most often will seek a court order. A party who moves for an order requiring discovery or for sanctions must include a certification that he or she in good faith conferred or attempted to confer with the person or party who had failed to respond without court intervention.

Only a court having personal jurisdiction over a witness can issue orders directing that witness to make further responses to discovery.

The court may assess a party who has been unreasonable in refusing discovery the opposing party's expenses of the motion, including reasonable attorney fees.if the party seeking sanctions was demanding improper discovery, such as irrelevant or privileged information, the court has the power to order that the responding party be paid the cost of contesting the motion, including reasonable attorney fees.

Once an order has been issued, if it is not obeyed, the disobedient party or witness can be held in contempt of court.No person shall be jailed for failure to submit to a physical or mental examination.

A party or potential party has a duty not to destroy evidence, but if the individual acted in good faith at all times, and the prejudice to another party is not severe, then the extreme sanction of dismissal of a plaintiff's case or a default judgment against the defendant is unwarranted.

A party who fails to respond to any request admits the facts contained therein.

At present, neither federal nor state rules specifically provide that the requesting party can move for an order to have the facts involved deemed admitted.


If a party knowingly makes a false denial in response to a request to admit, and the matter subsequently is proved at trial, the discovery rules provide that the party who sought the admission is entitled to be paid the reasonable costs incurred in proving the matter.

The courts have the power to issue protective orders curtailing discovery to avoid injustice or abuse.

§ 7.17 Use of Discovery at Trial

Typically, evidence rules provide that one party is entitled to introduce at trial any relevant statement of an opposing party, whether or not the latter takes the witness stand. Any answer to an interrogatory or statement on deposition qualifies under these provisions.

Under the normal evidence rules, certain statements made by agents or employees of a party may be used as evidence by an opposing party.

Typically, these are restricted to statements of:1. managing agents;2. persons specifically authorized to speak for a party on a matter; or3. an employee regarding his or her particular duties.

The employer has the opportunity to consult with an employee prior to discovery.

Discovery rules also expand a party's ability to use answers on a deposition to contradict a witness's testimony at trial. A basic rule of evidence permits any witness to be impeached by establishing that the witness made a prior statement inconsistent with the current testimony. This rule extends to prior statements made under oath in response to discovery orders. Under the federal evidence rules, such a prior inconsistent statement, if, but only if, made under oath in a deposition or at a hearing is not only usable to impeach the witness but is also admissible into evidence as proof of the facts stated.

Evidence rules typically provide that out-of-court statements are hearsay and cannot be introduced at trial.

The discovery rules specifically provide that a party who has procured a deponent's absence cannot use his deposition at trial. A party whose witness has given a favorable deposition will not be allowed to avoid in-court scrutiny of the witness by inducing the witness to be out of the state or out of the country at the time that the trial takes place.

If the party normally lives outside the scope of the court's subpoena power, the party's attorney may introduce the client's deposition into evidence. If the party lives within the reach of the court's subpoena power and elects not to attend trial for reasons of tactics or convenience, then the party is considered to have procured her own absence and the deposition cannot be used.


A party is not entitled to introduce her answers to interrogatories.

When a deposition can be introduced under the rules, it is important to note that the substance of the information it contains is admissible but only to the extent that it would be admissible if the deponent were present and testifying in person.

Cine Forty-Second Street Theatre Corp. v. Allied Artists Pictures Corp. , 602 F.2d 1062, 2nd Circuit, United States Court of Appeals, Second Circuit, Irving R. Kaufman, Chief Judge, 1979

Case Brief

FACTS:

Appellee Cine has operated a movie theater in NYC. It alleges that those owning neighboring theaters entered into a conspiracy with certain motion picture distributors to cut off its access to first-run, quality films. Cine claimed treble damages under the antitrust laws, and sought an injunction against the defendants' alleged anticompetitive practices.The 11 defendants served plaintiff with a set of consolidated interrogatories. Cine thereupon secures its adversaries' consent to defer discovery on the crucial issue of damages until it could retain an expert to review the rival exhibitors' box office receipts. Not until four months after deadline did Cine file its first set of answers. Even casual scrutiny reveals the patent inadequacy of these responses.Cine never moved to strike the interrogatories as irrelevant or as harassing. It failed to obey two subsequent orders compelling discovery. The magistrate found Cine's disobedience to have been willful, and assessed costs against it.Cine had still not retained the expert it claimed was necessary.The magistrate concluded that Cine's present non-compliance was willful.She thereupon recommended to the district court that Cine be precluded from introducing evidence with respect to damages.

ISSUE:

Whether a grossly negligent failure to obey an order compelling discovery may justify the severest, disciplinary measures.

RULE:

Preclusionary orders ensure that a party will not be able to profit from its own failure to comply.Courts are free to consider the general deterrent effect their orders may have on the instant case and on other litigation, provided that the party on whom they are imposed is, in some sense, at fault.Where the party makes good faith efforts to comply, and is thwarted by circumstances beyond his control, an order dismissing the complaint would deprive the party of a


property interest without due process.Dismissal is an abuse of discretion where failure to comply was not the result of the fault of any party.

APPLICATION:

If "fault" has any meaning not subsumed by "willfulness" and "bad faith," it must at least cover gross negligence of the type present in this case.Where gross professional negligence has been found, that is, where counsel clearly should have understood his duty to the court - the full range of sanctions may be marshaled.

CONCLUSION:

In light of the fact that plaintiff, through its undeniable fault, has frozen this litigation in the discovery phase for nearly four years, we see no reason to burden the court below with extensive proceedings on remand.The judge's order declining to adopt the magistrate's recommendation that proof of damages be precluded is reversed.

Civil Procedure – Module 20Case Management and the Pretrial

XII. Pretrial Management and the Pretrial Conference

Topic Lectures

Recorded Lecture:

Rule 16 - provides for conferencing.Pretrial conference ends in the judge issuing a Pretrial Order.

Topic Hornbook

§ 8.1 Nature and Purposes of a Pretrial Conference

pretrial conference - a meeting of the attorneys (and sometimes the parties) with a trial judge or with a magistrate possessing certain judicial powers.

The pretrial conference was unknown at common law.In 1938 the pretrial conference was embodied in Federal Rule 16.

Pretrial conferences and plans may be used as a management tool, controlling motion and discovery practice, preparing for and guiding the trial, informing the parties what issues and facts are in controversy, and facilitating the decision of the case on its merits. They also may be utilized to encourage settlement of cases, directly or through alternative-dispute-resolution procedures.


§ 8.2 Procedural Aspects of the Pretrial Conference

Normally, the court is given discretion to order a pretrial conference either on its own motion or at the request of a party.

FRCP 26(f) was amended to require parties, subject to a local rule of exemption, to meet early on in the case to develop a written discovery plan to be presented to the TC.

Once the court has called a pretrial conference, the attendance of the attorneys is compulsory; and pre-conference preparation, usually including the submission of a special pretrial-conference memorandum, may be required.

Some courts also require the presence of someone at pretrial who has settlement authority. Sanctions may be imposed for failure to meet the court's requirements.

The court is not limited to one pretrial conference, but may call several as the nature of the case indicates.

The conference may not serve as a substitute for trial. The judge has no pwoer to determine issues of fact.

A. Case Management


Case management is a catchall phrase encompassing the idea that a judge serves not only as a detached decision maker, but also as an engaged supervisor, responsible for encouraging, facilitating, and even pressuring the parties to resolve their disputes.

SECTION A. Rule 16 And The Development of Case Management Techniques

Rule 16 was designed to substitute for formal pleadings the less formal processes of discussion and exchange as ways of narrowing issues for trial and of expediting proof.

Velez v. Awning Windows, Inc. , 375 F.3d 35, United States Court of Appeals, First Circuit, Selya, Circuit Judge, 2004

Case Brief

FACTS:

Velez began work for a company owned by Nieves. Velez and Nieves became romantically entangled. Velez claims that after she broke off their adulterous affair, she was sexually harassed. This harassment culminated in her dismissal.The district court, after patiently granting several extensions and issuing pointed warnings, finally decided that enough was enough. It held the defendants to the deadlines


previously announced, denied certain of their motions for noncompliance with the court's scheduling order, disregarded the defendants' tardy opposition to a motion for partial summary judgment, took the proffer of plaintiff as true, and resolved the issue of liability in Velez's favor.

ISSUE:

RULE:

A party who legitimately requires more time to oppose a motion for summary judgment has a corollary responsibility to make the court aware of its plight.To benefit from the protections of Rule 56(f), a litigant ordinarily must furnish the court with a timely statement - if not by affidavit, then in some other authoritative manner - that:(i) explains his or her current inability to adduce the facts essential to filing an opposition, (ii) provides a plausible basis for believing that the sought-after facts can be assembled within a reasonable time, and(iii) indicates how those facts would influence the outcome of the pending summary judgment motion.Such a litigant also must have exercised due diligence both in pursuing discovery before the summary judgment initiative surfaces and in pursuing an extension of time thereafter.A party who seeks to be relieved form a court-appointed deadline has an obligation, at a bare minimum, to present his arguments for relief to the ordering court. An unexcused failure to do so constitutes a waiver.

APPLICATION:

Trial courts should refrain from entertaining summary judgment motions until after the parties have had a sufficient opportunity to conduct necessary discovery.The defendants neither invoked nor substantially complied with Rule 56(f). The defendants' motions to extend time do not satisfy these criteria. Neither motion identifies a single sought-after fact. Neither motion indicates whether the desired information can be gathered within a reasonable interval. And neither motion relates how that information, if unearthed, would influence the outcome of the pending summary judgment motion.Given the circumstances at hand, the district court plainly did not abuse its discretion in proceeding, when it did, to decide the motion for partial summary judgment.Because the defendants failed to file an opposition to the motion for partial summary judgment by the court-appointed deadline, the district judge was entitled to consider the motion as unopposed and to disregard a subsequently filed opposition.

CONCLUSION:

We cannot say that the court below abused its discretion when it precluded certain hearsay testimony as a sanction for the defendants' protracted delay in submitting the


memorandum in question.For the reasons alluded to above, we uphold the entry of judgment for the plaintiff.

B. The Operation of Rule 16


SECTION B. The Operation of Rule 16

The failure of a party fairly to meet a deadline without a sound excuse will result in a denial of relief, even though that will preclude consideration of a matter of substantive significance.

Francois v. McDonald (2000) - The court listed four factors to be considered in making its determination: 1. the party's reason for missing the deadline,2. the important of the evidence sought to be permitted,3. potential prejudice to the opposing party, and4. the availability of a continuance or other method to overcome any prejudice.

The court may order a litigant to be present at a pretrial conference or to be available by phone to consider the possibility of settlement.

C. Extrajudicial Personnel


SECTION C. Extrajudicial Personnel: Masters and Magistrates

1. Magistrate Judges

Federal Magistrates Act (1968) - The Act gave magistrates the authority to exercise the duties formerly performed by US Commissioners. The Act authorized magistrates to conduct trials of "minor" criminal cases; to assist district judges in civil and criminal pretrial and discovery proceedings; and to carry out such additional duties as are not inconsistent with the Constitution and laws of the United States.

Congress amended the Act in 1976 to give magistrates the authority to act as special masters in civil cases and further granted magistrate judges the authority to hear and determine any pretrial matter except for eight dispositive matters.

Congress passed the Federal Magistrate Act of 1979, which authorized magistrates, upon written consent of the parties, to conduct civil trials and to enter final judgments.

Magistrate judges are judicial officers appointed by the judges of the district in which they sit, with the assistance of a citizen merit selection panel. Although they perform


many of the same functions as district judges, unlike Article III judges, they do not serve for life. Instead, their term of office is eight years. The duties of magistrate judges are established by the rules of the district court in which they serve. They can be removed by the district judge of that court only for incompetency, misconduct, neglect of duty, or physical or mental disability.

Constitutional considerations require that final decision making authority be exercised by Article III judges.

A party can consent to have the district court specially designate a magistrate judge to conduct any or all proceedings in a jury or nonjury civil matter and order the entry of judgement in the case.

Written consent is not required and instead it is permissible for the court to accept implied consent where the litigant or counsel was made aware of the need for consent and the right to refuse it, and still voluntarily appeared to try the case before the Magistrate Judge.

2. Masters

Under Federal Rule 53, the master's role was limited to hearing testimony and issuing findings of fact in jury trials and further limited in non-jury trials to situations showing that some exceptional condition requires it. Exempt from the exceptional condition requirement were matters of account and of difficult computation of damages.

Rule 53 now permits appointments to address pretrial and post-trial matters that cannot be addressed effectively and timely by a district court judge or magistrate judge.

A master may only be appointed to address matters to be decided by the court and not by a jury; although appointment in a jury case is allowed with the parties' consent.

Masters may not be granted judicial responsibility for an entire dispute. The special master's role is to assist the judge by assuming specific duties to facilitate the adjudication of the case.

D. The Final Pretrial Order


Courts generally treat the final pretrial order, including the stipulations, agreements, and statements of counsel made at the final pretrial conference, as binding for purposes of trial.

Topic Hornbook

§ 8.3 The Pretrial Order


Although some state pretrial regulations do not mandate it, the federal rule and most of its state counterparts require the court to issue a pretrial order embodying the rulings made and matters agreed upon at the pretrial-conference. The pretrial order should incorporate all admissions and stipulations of the parties, list the issues remaining for trial, and note any requirements for filing statements or lists of evidence and witnesses.

The order controls the subsequent course of the action.

Payne v. S.S. Nabob , 302 F.2d 803, 3rd Circuit, United States Court of Appeals, Third Circuit, McLaughlin, Circuit Judge, 1962

Case Brief

FACTS:

In this personal injury admiralty action libellant filed a pretrial memorandum stating that he was relying upon the condition of a winch to prove his cause of action.Libellant's attorney included in his opening at trial the fact that the loading had been handled improperly as an important element of his proof of unseaworthiness. The impleaded stevedore employer objected as it was outside the scope of the pretrial memorandum and report. The TC sustained the objection.

ISSUE:

RULE:

Rule 16 gives as the first purpose of pretrial the simplification of issues.Disputed issues of fact actually raised at the pretrial stage could not be resolved by the TC on MSJ.

APPLICATION:

Appellant was not clubbed into admissions he did not willingly make. It was his own voluntary statement of the basis of his claim that was included in the pretrial report of the judge. The report was never objected to as incorrectly outlining appellant's pretrial statement.Appellant's pretrial memorandum was filed. It contained a brief summary statement of both the facts of this case and counsel's contention as to the liability of defendant.The pretrial conference was held in due course and attended by the attorneys for the parties.

CONCLUSION:

Beyond all doubt the judge acted entirely within his discretion.The decree of the district court will be affirmed.


E. Case Management and Sanctions

Nick v. Morgan's Foods, Inc. , 270 F.3d 590, United States Courts of Appeals, Eighth Circuit, McMillian, Circuit Judge, 2001

Case Brief

FACTS:

Morgan's Foods, Inc. appeals from a final order denying appellant's motion to reconsider sanctions imposed against it and its outside counsel for failure to participate in good faith in court-ordered ADR and imposing additional sanctions for vexatiously increasing the costs of litigation.Nick filed suit against appellant alleging sexual harassment and retaliation. A pretrial scheduling conference was held. The parties consented to ADR with a court-appointed mediator, and agreed to report back to the district court with the results of the ADR.The district court issued a Referral Order, mandating that the ADR process be conducted in compliance with the local rules and listing other specific requirements.Appellant did not file the memorandum that was required to be filed. Appellant chose not to attend the ADR conference on the advice of outside counsel.The district court issued an order directing appellant to show cause why it should not be sanctioned for its failure to participate in good faith in the court-ordered ADR process.

ISSUE:

RULE:

Part of the purpose of the sanctioning power is to control litigation and to preserve the integrity of the judicial process.District courts have explicit authority to require pretrial conferences to improve the quality of the trial through more preparation or to facilitate the settlement of the case.Sanctions under Rule 16(f) may be imposed in lieu of, or in addition to, any other sanctions the judge deems appropriate.Rule 16(f) expressly permits a judge to impose any other sanction the judge deems appropriate in addtion to, or in lieu of, reasonable expenses.A party may be held responsible for the actions of its counsel.

APPLICATION:

The district court judge acted well within his discretion by imposing a monetary fine payable to the Clerk of the District Court as a sanction for failing to prepare the required memorandum, deciding to send a corporate representative with limited authority to the ADR conference, and for vexatiously increasing the costs of litigation by filing a frivolous motion for reconsideration.


CONCLUSION:

The district court acted within its discretion and we therefore affirm the district court's order denying the motion for reconsideration and imposing additional sanctions.Upon review of the record as a whole, we hold that the district court did not abuse its discretion.The district court did not abuse its discretion in sanctioning appellant.The district court did not abuse its discretion in imposing monetary sanctions against appellant for its lack of good faith participation in the ADR process, for its failure to comply with the district court's Referral Order, and for vexatiously increasing the costs of litigation by filing a frivolous motion for reconsideration.

Civil Procedure – Module 21Summary Judgment, Dismissals and default Judgments

XIII. Adjudication Without Trial or by Special Proceeding


summary procedures - Devices used by courts to dispose of cases without a full-blown trial.

A Rule 56 motion determines whether a material issue of fact exists for which a trial is needed.A material fact is one which will affect the outcome of the case, and a material fact raises a genuine issue if a reasonable jury could reach different conclusions concerning that fact.

A. Summary Judgment


The burden of establishing the nonexistence of a "genuine issue" is on the party moving for summary judgment. This burden has two distinct components: an initial burden of production, which shifts to the nonmoving party if satisfied by the moving party: and an ultimate burden of persuasion, which always remains on the moving party. The court need not decide whether the moving party has satisfied its ultimate burden of persuasion unless and until the court finds that the moving party has discharged its initial burden of production.

If the moving party will bear the burden of persuasion at trial that party must support its motion with credible evidence. Such an affirmative showing shifts the burden of production to the party opposing the motion and requires that party either to produce evidentiary materials that demonstrate the existence of a "genuine issue" for trial or to submit an affidavit requesting additional time for discovery.


If the burden of persuasion at trial would be on the non-moving party, the moving party may submit affirmative evidence that negates an essential element of the nonmoving party's claim. The moving party may demonstrate to the Court that the nonmoving party's evidence is insufficient to establish an essential element of the nonmoving party's claim.

Inadmissible documents may be considered by the court if not challenged at trial.

A party may satisfy the standard for summary judgment by one or both of two methods.1. The movant may, by submitting affirmative evidence, negate an element essential to the opposing party's claim or defense.2. The movant may show that the opposing party lacks sufficient evidence to establish an essential element of its claim or defense.

Federal Rule 56(d) - Rules and statutes permitting summary judgment normally provide that in circumstances in which judgment cannot be granted on the entire action, the court at least may withdraw from trial those aspects of the case that are established in the summary judgment proceeding.

Federal Rule 54(b) - The trial court may enter judgment with regard to any single claim that has been fully determined.

Topic Lectures

Recorded Lecture:

Covered by Federal Rule 56 - Motion for Summary Judgment

Usually follows motion to dismiss under Rule 12(b)(6) (failure to state a claim).

MSJ asks whether plaintiff really has a case, assuming he already has stated a claim.

Summary judgment is granted as a matter of law if that party shows there is no genuine issue of material fact.Judges typically view each question of material fact's credibility in favor of the non-moving party.

When likely to be granted:1. After a review of the record, there is no legal basis for a claim.2. If everything in the record is consistent with no contrary opinion, there is nothing to try.3. If the pretrial discovery shows that there is an iron-clad legal defense to the action.

Addressed at the discretion of the trial judge.

Class Chat:


Summary Judgment

summary judgment - No general dispute as to a material fact and are entitled to judgment as a matter of law.

material fact - an important, significant fact central to a claim or defense.

The connection between an MSJ and a directed verdict is that a directed verdict happens AFTER the opening remarks (once trial is commenced).

Topic Hornbook

§ 9.1 History and Purpose

Most jurisdictions today have adopted a formal procedure, called an MSJ, to determine whether an issue set forth in the pleading is in fact in dispute and, if not, to eliminate any portion of the case for which trial is not required. Summary judgment can be sought and granted not only on an entire claim, but as to any portion thereof.

Under modern rules a motion to dismiss for failure to state a claim or an motion for judgment on the pleadings can be treated as an MSJ when the moving party introduces outside matter and clearly intends to test not only whether the allegations are sufficient on their face to state a claim, but also whether there is any factual basis for those allegations.

The trial judge has discretion to treat the challenges as an MSJ.

§ 9.2 Procedure for Obtaining a Summary Judgment

Summary judgment typically is granted upon a motion by one of the parties.

If the moving party also is the one seeking relief in the case, some jurisdictions require the movant to wait a period of time, usually the time given the defending party to file an answer, before permitting the motion to be made.

Other jurisdictions allow the motion to be filed at any time, relying upon the discretion of the trial judge to ensure that the responding party has time to prepare.Typically, summary judgment motions are not made until each side has had a chance to engage in formal discovery to gather what evidence there is in support of his or her position.

Most summary judgment provisions require the movant to serve the motion on the opponent a number of days before the court hearing on the matter.

As long as the opposing party is not taken by surprise, and has a chance to show why summary judgment should not be entered, the absence of a formal motion should not preclude the entry of summary judgment.


Any information that would be admissible at trial is appropriate, even the oral testimony of potential witnesses.

The most common means of supporting or challenging summary judgment is by affidavits - written statements of parties - and potential witnesses signed under oath. Equally acceptable are formal responses to discovery such as depositions, answers to interrogatories and admissions.

Only information that would be admissible under the rules of evidence at trial will be considered.

Any affidavits that are offered must state that the matters contained therein are based on the affiant's personal knowledge and that affiant is competent to testify as to those matters at trial.

Any defect in the material submitted must be raised or it will be waived.

§ 9.3 The Standard for Determining Whether to Grant a Summary Judgment

Summary judgment may be rendered when the court finds that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Immaterial or minor facts and feigned issues will not prevent summary judgment.

A district court has discretion to deny summary judgment even in the absence of a factual dispute when there is reason to believe that a trial is necessary to ensure a proper judgment.

The court's role is limited to deciding whether any genuine factual issues exist, rather than in determining the issues themselves.

The moving party has the initial burden of presenting information that clearly establishes that there is no factual dispute regarding the matter upon which summary judgment is sought.

ANy doubts as to the existence of a genuine issue of material fact will be resolved against the movant and the evidence will be construed in the light most favorable to the party opposing the motion.

To meet this burden, the moving party normally submits outside evidence such as affidavits of witnesses setting forth facts to which they could testify at trial.

If, but only if, the moving party produces information that appears to establish that no factual dispute exists, then the responding party normally must come forward with materials to show that there indeed is a genuine issue of fact. If the responding party fails to meet this burden, summary judgment should be granted.


If a nonmovant does not oppose the motion with evidence to contradict that of the moving party, the court may accept the movant's undisputed version of the facts.

When the responding party does produce information contradicting that of the moving party or otherwise showing that a factual dispute exists, summary judgment must be denied.

In most cases, it is the nonmoving party who has the burden of persuasion at trial.

Courts typically have granted summary judgment when the opposing party's sole arguments for allowing the case to go to trial rest on a desire to test the credibility of the movant's witness.

Summary judgment should be denied only if the nonmoving party provides affidavits supporting his case on the merits or casting doubt the veracity of those persons who made affidavits for the movant.

Summary judgment provisions typically provide that a motion may be denied, or the hearing on it delayed, if the responding party shows that more time is needed to obtain facts.

Lundeen v. Cordner , 354 F.2d 401, 8th Circuit, United States Court of Appeals, Eighth Circuit, Gibson, Circuit Judge, 1966

Case Brief

FACTS:

Plaintiff is a former wife of Cordner, deceased. During their marriage two children were born. Cordner's employer (Socony) carried a group life insurance contract with Metropolitan under which Cordner designated his children as equal beneficiaries. Cordner, having been divorced by plaintiff, married intervener. A child was born of this second marriage. The contest for the proceeds arises between adverse claimants; the original designated beneficiaries and the second wife.

ISSUE:

If the summary judgement was properly granted.

RULE:

The insured's attempt to change his beneficiary will be given effect if all that remains to be done is a ministerial duty on the part of the insurer.If the information presented entitles one to a directed verdict, a summary judgment is in order.


APPLICATION:

It is clear that the first two children of decedent are the named beneficiaries. Intervener presented affidavits and exhibits in support of position and moved for summary judgment. The motion was granted. If deceased completed all the necessary steps required of him to change the beneficiary to his policy, intervener would be entitled to judgment. If intervener can demonstrate this fact so clearly that there is no longer a genuine issue of fact, summary judgment may be properly granted under provisions of Rule 56(c).He amended his group hospitalization and employee savings plan to include intervener. Certain correspondence conclusively indicates that a change in the life insurance was actually made.Plaintiff presents no counter evidence nor in any way indicates that intervener's evidence is not worthy of belief. Therefore, we believe there is no genuine issue of fact on this point. It is clear that Cordner actually made a change in the beneficiaries of his life insurance policy.There is absolutely no showing that a trial would produce any different or additional evidence.

CONCLUSION:

The affidavits and exhibits introduced by intervener clearly and undeniably indicate that deceased made a change in his policy's beneficiaries.

Celotex Corp. v. Catrett , 477 U.S. 317, Supreme Court of the United States, Rehnquist, J., 1986

Case Brief

FACTS:

Respondent commenced this lawsuit alleging that the death of her husband resulted from his exposure to products containing asbestos manufactured or distributed by 15 named corporations.Petitioner's summary judgment motion argued that summary judgment was proper because respondent had failed to produce evidence that any Celotex product was the proximate cause of the injuries. In response, respondent then produced documents which she claimed demonstrated that there is a genuine material factual dispute.Petitioner argued that the three documents were inadmissible hearsay.The District Court granted the motion.

ISSUE:

RULE:


The party opposing the MSJ bears the burden of responding only after the moving party has met its burden of coming forward with proof of the absence of any genuine issues of material fact.The plain language of Rule 56(c) mandates the entry against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.A party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.Claimants and defendants, respectively, may move for summary judgment with or without supporting affidavits.Rule 56(f) allows a summary judgment motion to be denied, or the hearing on the motion to be continued, if the nonmoving party has not had an opportunity to make full discovery.

APPLICATION:

The position taken by the majority of the Court of Appeals is inconsistent with the standard for summary judgment.We find no express or implied requirement in Rule 56 that the moving party supports its motion with affidavits or other similar materials negating the opponent's claim.

CONCLUSION:

Rule 56 must be construed with due regard not only for the rights of persons asserting claims and defenses that are adequately based in fact to have those claims and defenses tried to a jury, but also for the rights of persons opposing such claims and defenses to demonstrate in the manner provided by the Rule, prior to trial, that the claims and defenses have no factual basis.

Anderson v. Liberty Lobby, Inc. , 477 U.S.; 242, Supreme Court of the United States, Justice White, 1986

Case Brief

FACTS:

Plaintiff filed a libel suit against a magazine for articles that portrayed plaintiff as neo-Nazi, anti-Semetic, racist, and fascist. Following discovery, defendants moved for summary judgment on the ground that plaintiffs could not prove by clear and convincing evidence that defendants acted with malice.

ISSUE:


RULE:

APPLICATION:

Defendants submitted an affidavit from the employee who had written the allegedly libelous articles. His affidavit also detailed the sources for each of the statements in the article, and affirmed that he believed the facts he reported to be true.Plaintiffs showed that one of the sources was a 12-year-old article that had been the subject of an earlier libel suit by plaintiff, etc.

CONCLUSION:

The District Court granted the motion for summary judgment.It was irrelevant on an MSJ that the standard for proving actual malice was clear and convincing evidence, rather than a preponderance of the evidence.The determination of whether a given factual dispute requires submissions to a jury must be guided by the substantive evidentiary standards that apply to the case.

B. Default Judgment


Federal Rule 54(c) provides that plaintiff may recover all the relief to which he is entitled except that plaintiff is limited to the amount prayed for in the case of a default judgment.

penalty default - A special type of default judgment that is imposed on a party who has appeared and contested the matters at issue but has willfully violated the rules of procedure or disobeyed an order of the court.

Federal Rules 37(b)(2)(C) and 37(d) specifically permit default judgments in these situations.

Topic Hornbook

§ 9.4 The Entry of Default and Default Judgment

An entry of default does not constitute a judgment; it is merely a notation by the court clerk precluding the defaulting party from making any new defenses regarding liability.

Default judgments may be entered in three types of situations:1. the defendant never appears or answers in response to the plaintiff's complaint.2. defendant makes an appearance, but fails to file a formal answer.3. the defendant fails to comply with some procedural requirement, time frame or court order during the pretrial proceedings and the court enters a default judgment as a penalty.


Default judgments are based on a prior entry of default by the court or court clerk as provided by rule or statute.

If default has been entered and it is clear from the complaint that a certain sum and only that sum is due to the complainant, most rules provide that the clerk then may enter a default judgment for that amount.

Most rules give the court discretion to decide whether or not to enter a default judgment.

When deciding whether to enter a judgment, the court may hold a hearing.Federal Rule 55(b)(2) empowers the district judge to hold hearings or order such references as it deems necessary and proper.

The default does not preclude a defendant from claiming that those factual allegations fail to state a claim for relief.

Once there has been a default the claimant cannot recover more than the amount demanded or the type of relief requested in the complaint.

The entry of default usually is without notice, as is a default judgment entered by the clerk.

Federal Rule 55(b)(2) provides for three days' notice of a motion for default judgment if, but only if, the defendant has appeared in the case.

Coulas v. Smith , 295 P.2d 527, Arizona, Supreme Court of Arizona, Udall, Chief Justice, 1964

Case Brief

FACTS:

The plaintiff filed a complaint against the defendant and cross-claimant on two counts. The cross-claimant answered individually and denied any liability and filed a cross-claim. The defendant appeared individually and answered the complaint, answered the cross-claim, and counterclaimed against plaintiff. Plaintiff replied to the defendant's counterclaim.The lower court made an order setting the case for trial on October 10. All counsel were notified by the clerk of the court. Counsel for the plaintiff and counsel for the cross-claimant stipulated that the trial be set for December 10. The lower court ordered that the prior trial date be vacated and the case be reset for trial on December 10. All counsel were regularly notified by the clerk of the new trial setting. The defendant's counsel was not present and did not participate in the stipulation vacating the original trial setting.The defendant and defendant's counsel deny ever receiving any notice from the clerk concerning the new trial date.On December 10, the defendant did not appear.


The plaintiff obtained judgment against the defendant on both counts and against the cross-claimant. Th ecross-claimant obtained judgment against the defendant.Nearly two years later, the defendant filed a motion to set aside and vacate the judgment. TC denied this motion.

ISSUE:

Whether the TC could properly enter a judgment by default.

RULE:

A default judgment obtains when a defendant fails to plead or otherwise defend, Rule 55. if he has made an appearance in the case, he must be given 3 days' notice of application for judgment by default.Rule 55(a) authorizes the clerk to enter a default when a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules.Absence of a defendant when a case is called for trial after it is at issue does not warrant a judgment against him by default.In the absence of a showing to the contrary a public officer, such as the clerk of the court, is presumed to have performed the duty imposed upon him by law.Rule 60(c) prevents the defendant from attacking the judgment more than six months after it was entered.

APPLICATION:

The judgment was not a default judgment. The defendant did plead to the merits. He answered the complaint and filed a counterclaim. He then failed to appear at the trial.Rule 55(b) with its 3-day notice requirement is not applicable.The contention of the defendant that he did not receive notice of the new trial date is not substantiated by the minutes.

CONCLUSION:

The defendant attempted to attack the judgment nearly two years after it was entered. The lower court properly denied defendant's motion to set aside and vacate the judgment.

C. Dismissal of Actions


1. Voluntary Dismissal

The voluntary dismissal allows the moving party to extricate himself from the lawsuit without affecting his legal rights before significant judicial and litigant resources are expended.


A voluntary dismissal places the parties in the positions they occupied before the lawsuit began; it does not, in general, have the effect of an adjudication on the merits.If a party attempts to dismiss after previously doing so with respect to the same cause of action, the dismissal is granted, but is viewed as being an adjudication on the merits.

The right to dismiss voluntarily generally is governed by a rule or statute that typically permits a dismissal before "trial" or "commencement" of trial."Before trial" means at any time prior to submission of the case to the jury or court for decision.

2. Dismissal for Failure to Prosecute

Courts long have been regarded as possessing inherent discretionary power to dismiss an action if plaintiff does not proceed to trial with "due diligence."

Rule 41(b) allows dismissal for the plaintiff's failure to prosecute, and is intended as a safeguard against delay in litigation and harassment of a defendant.

When circumstances make such action appropriate, a District Court may dismiss a complaint for failure to prosecute even without affording notice of its intention to do so or providing an adversary hearing before acting.

Fines may be imposed upon offending attorneys under Rule 41(b) even though that rule, by its terms, specifically provides only for the sanction of dismissal of the action.

Lengthy delays do not necessarily lead to a dismissal for failure to prosecute.

Topic Hornbook

§ 9.5 Voluntary and Involuntary Dismissals

Plaintiff's right to dismiss is governed by rule or statute.

Plaintiff's unilateral right to dismiss a case voluntarily generally exists as long as defendant has not been unduly burdened by plaintiff's suit. This has been codified as anytime before "trial" or before "commencement of trial."

The Federal Rules limit plaintiff's absolute right to dismiss to the point in the proceedings before defendant has answered or moved for summary judgment. A motion to dismiss for failure to state a claim does not cut off plaintiff's right.After the filing of an answer or MSJ, dismissal is only be leave of court or upon a stipulation of the parties.

Although the first voluntary dismissal as of right is almost always without prejudice, a second dismissal may act as an adjudication upon the merits of any of the claims included in both dismissals.


Most jurisdictions also provide for dismissal without prejudice by leave of court after plaintiff's power to dismiss as of right has terminated.

Judges have long been regarded as possessing inherent discretion to dismiss an action with prejudice if the plaintiff does not proceed to trial with "due diligence."

Generally, dismissal will not be ordered when the delay has not otherwise prejudiced the defendant, when the defendant is at least partially responsible for the delay, or when the delay is due to the derelictions of counsel rather than of the client, who ought not to lose an otherwise meritorious case. Dismissals for failure to prosecute are granted only when the plaintiff has been particularly dilatory.

CHAPTER 10 - TRIAL

A. Trial by Jury

Topic Lectures

Class Chat:

Jury Trial

Right is protected by the 7th Amendment (right to a jury trial).

Rule 38(a) - gives rights to a jury trial under the FRCP.

declaratory judgment - ask the judge to declare what the law is, to interpret something for you. An equitable procedure.

injunction - to prevent from continuing to do something, order something to happen. Also an equitable procedure.

Beacon Theatres, Inc. case - Traditionally, equitable claims are decided first by the court, and then a jury determines the damages claims. Court ruled that the jury trial would be done first unless there is a compelling reason to do otherwise, since the equitable rulings could impact on the jury trial.

accounting - a determination/calculation of monetary damages.

Dairy Queen, Inc. case - DQ sought an accounting and a judgment for that amount owed. TC denied request for a jury trial since would be purely equitable or disputable facts are purely incidental. SC ruled that a case involving any legal issues must be submitted to a jury (even if the legal claim appears less significant than the equitable elements of the case).

Legal issues MUST be submitted to a jury upon request.


Curtis v. Loether - A black woman claimed that the landlord racially discriminated against her by refusing to rent her an apartment. Plaintiff did not want a jury trial for fear that "jury prejudice" could deprive her a favorable verdict and a fair trial. Issue was whether the right extended to a defendant. Court ruled that the 7th Amendment entitles either party to demand a jury trial in an action for damages.Risk of prejudice is offset by judge's power to grant JNOV.

JNOV - Judgment notwithstanding the verdict. Judge rules for verdict-opposing party and overrule the jury when there are insufficient facts to support the jury verdict.

Topic Hornbook

§ 10.1 A General Description

The right to a trial by jury in civil litigation depends upon the constitutional and statutory provisions in each jurisdiction. The right must be properly invoked or it will be waived and the case tried by the judge as if no right existed.

The first order of business in a jury trial is selecting the jurors.If it becomes clear that a potential juror is not likely to be fair or objective, an attorney can request that the court dismiss the person for cause.Each party is provided with a limited number of peremptory challenges to eliminate individuals whom an attorney believes are or may be biased, even though there is no specific evidence for such a belief.

In jury cases, the order of trial will be:1. Plaintiff's opening statement2. Defendant's opening statement3. Plaintiff's presentation of direct evidence4. Defendant's presentation of direct evidence5. Plaintiff's presentation of rebuttal evidence6. Defendant's presentation of rebuttal evidence7. Opening final argument by plaintiff8. Defendant's final argument9. Plaintiff's closing final argument10. Instructions to the jury

When a witness is called to testify, she is first sworn to tell the truth. Then the attorney who called the witness proceeds to ask questions on direct examination.On direct examination the attorney is not permitted to ask leading questions.This general rule is not applied when the witness is an opposing party or otherwise is shown to be hostile to the party who called her.The trial judge has discretion to permit the use of leading questions to expedite the introduction of background information.

When the direct examination has been completed, the opposing party is entitled to cross-examine the witness. The proscription against leading questions does not apply to cross-


examination. Normally cross-examination is confined to those matters that were explored on direct. An attorney who wants to go beyond, into new areas, must obtain court permission or wait to call the witness himself. In either case the cross-examination at that point will be treated as direct examination. When cross-examination has been completed, the attorney who called the witness may conduct redirect examination to clarify the testimony. If the attorney does that, the opposing party will be permitted to cross-examine.

Final argument provides the opportunity for each side to bring it all together, without interruption, and to set forth the logical implications of the evidence that has been presented.

Final argument usually is in three parts. The plaintiff is given the right to speak both first and last unless defendant had the burden of proof on the major issues tried, in which case the roles will be reversed.

Whenever a case is tried before a jury, it must be instructed with respect to the to be applied and the technical aspects of its deliberations.

The trial judge controls the time when the parties must submit proposed instructions. The court, after consultation with and sometimes argument by the parties, determines which of these to give and which of its own to add or substitute. The lawyers are informed and given an opportunity to object. In most jurisdictions the failure to object to an instruction or to request that an instruction be given precludes appeal on the ground that the instructions were improper, unless the error is grievous and resulted in a miscarriage of justice.

"pattern instructions" - Those that have been formally approved as "correct" in a particular jurisdiction.

After all arguments are completed and the instructions given, the jury retires to deliberate.

During the course of the deliberations it is not unusual for the jury to ask for clarification of the instructions or for the reading of certain portions of the testimony. In general, the court will inform all counsel of the request, hear any arguments for or against granting it, and then exercise its discretion in deciding what steps, if any, should be taken. The jury request may be denied if it could be misleading.A failure to notify the attorneys and give them an opportunity to be heard before ruling on the jury's request may lead to reversal of the judgment.

In some instances, the jury may report that it is deadlocked and cannot reach a verdict.

After the jury has rendered its verdict, the court or one of the parties may wish to have the jury "polled," in order to make certain that in fact the verdict was agreed upon by the requisite number of jurors required in the particular jurisdiction to constitute a verdict. In


many jurisdictions a party has a right to a poll; in others it is a matter of discretion.

§ 10.2 The Law of Evidence

The law of evidence is a special branch of the law of procedure.

Three basic reasons for limiting the scope of information that parties otherwise might present:

1. Courts should not waste time receiving worthless information.

rule of relevancy - Evidence, to be admissible, must be of possible aid to the trier of fact in making its decision. To be relevant, evidence need only have the capacity to help in the decision. Evidence may be relevant even though it is not conclusive of the matter to be decided.

2. When that information, though relevant, may engender such harm that it should not be admitted into evidence.

Evidence is prejudicial when it will induce the trier of fact to rely on irrelevant aspects of an otherwise relevant item.

Two different methods by which the value of a specific item of evidence is determined to be outweighed by its likely prejudicial effects:

1. The trial judge, exercising discretion, may so decide on a case-by-case basis, taking into consideration all the factors that pertain to the particular suit involved. That decision is subject to appellate review, but only on the ground that the trial judge has abused her discretion.

2. The law, through elaborate sets of evidence rules, established by common law, rule, or legislation, in effect declares certain types of evidence to be so prejudicial that they are inadmissible per se, taking the matter out of the hands of the trial judge.

hearsay - A statement made out of court that is offered to prove the truth of the matter stated. Hearsay is considered inherently prejudicial because the party against whom it would be used would not have an opportunity to cross-examine the person who made the statement at the time it was made.

The evidence rules define a large number of specific exceptions to the general prohibition against hearsay evidence.Two basic categories:

1. circumstances help to assure that the evidence is reliable.2. the nature of the issue is such that it is not likely that other evidence exists to prove the matter in question.

The trial judge retains discretion to exclude the item.Evidence of a person's character is not admitted to show that the person acted in


conformity with his character on any particular occasion.

character - any general propensity to act in a certain way.Evidence of past activity can be introduced if it is offered for some purpose, other than to establish character, that is directly relevant to the case before the court.As an exception to the general rule, certain evidence of a witness' past propensity to tell the truth is permissible to cast doubt upon or revitalize that witness' credibility.

If an offer to compromise is rejected, under modern rules neither it nor statements made in connection with it are admissible.A number of jurisdictions have extended the rule prohibiting the admission of offers to compromise to include humanitarian gestures, such as a guarantee by one party to an accident to pay the hospital bills of another.Evidence of subsequent repairs or insurance also is generally inadmissible because of its potential for prejudice.

3. Social policies.

"evidentiary privilege" - Some evidence, although valuable and nonprejudicial, will be inadmissible even though its exclusion might result in an incorrect factual determination at trial.

Several different kinds of privilege:1. "communication" privileges - protect conversations between individuals who

are in a special relationship. To be privileged, a conversation must be in confidence and, except for conversations between spouses, must be in the course of seeking professional advice.

2. "testimonial" privilege - allows eyewitnesses to refuse to testify at all.

Provisions governing documents and other real evidence

The attorney must lay a proper foundation for admissibility by showing, through testimony, exactly how the item relates to the suit.

Two special rules:1. rule of authentication - requires a showing that a document is what its proponent

claims it to be before it will be admitted into evidence.2. "best evidence" rule - requires a party to introduce the original of a document or to

establish that the original has been lost or destroyed before other evidence of the document's contents will be admitted.

Witnesses

Every witness must have first-hand knowledge of the matters about which he testifies.Ordinarily, a witness is not allowed to speculate or give an opinion about matters involved in the case.


The witness can be asked about the details in order to test the validity of the opinion. An important exception to the general rule prohibiting opinion in evidence allows an expert witness to give an opinion regarding matters within his expertise.The witness must be qualified as an expert by testimony as to the witness's credentials.Such evidence was admissible only if the scientific foundation upon which it rested was generally accepted by those in the field to which it belonged.


A. Right to Trial by Jury in Federal Courts


1. The Institution of Trial By Jury

2. The Right to a Jury Trial

a. The Nature of the Right under the United States Constitution

The 7th Amendment was assumed to incorporate the jury-trial practice under common law.

b. The Effect of Civil Procedure Rule 2 (The Single Form of Action) and Other Modern-Day Procedural Developments on the Right to Trial by Jury in Federal Courts

The formal elimination under Federal Rule 2 of separate actions in law and equity and other procedural innovations have raised a number of challenging issues regarding the historic right to a trial by jury.

c. The Implementation of the Right to Jury Trial in Federal Courts

(i) Maintenance of the Law-Equity Distinction

Relief at law is limited in general to compensatory damages along with the ejectment of a defendant who wrongfully is in occupation of plaintiff's land. Equity provides remedies when the law does not - e.g. restitution, rescission, injunctions, reformation of contracts.

(ii) Cases Involving Both Equitable and Legal Relief

the "clean-up" doctrine - Once an equity court obtained jurisdiction of a suit primarily of an equitable character, the court could decide any incidental legal issues that arose in the course of the litigation.

Equitable jurisdiction existing at the filing of a bill is not destroyed because an adequate legal remedy may have become available thereafter.The District Court in its discretion may order the trial of a suit in equity in advance of an


action at law between the same parties, even if there is a factual issue common to both.

Federal Rule 57 - pemits the TC to advance all declaratory-judgment actions on the calendar for speedy determination.

Dairy Queen, Inc. v. Wood (1962) - The holding in Beacon Theatres applies whether the trial judge chooses to characterize the legal issues presented as "incidental" to equitable issues or not. Beacon Theatres requires that any legal issues for which a trial by jury is timely and properly demanded be submitted to a jury.

Federal Rule 53(b) - appoints masters to assist the jury in those exceptional cases where the legal issues are too complicated for the jury adequately to handle alone.

the "complexity exception" - A basis for denying a jury trial in cases in which the number of parties, complexity of the issues, or conceptual sophistication of the evidence and applicable substantive law support a finding that a jury would not be a rational and capable fact-finder.

A plaintiff who requests a jury trial cannot liberally join parties and claims if these actions contribute to the overly complex nature of the case.A defendant who demands a jury trial must seek to prevent a plaintiff from joining many separate claims and creating a complex lawsuit.

Courts in a few states have declared that there is a constitutional right to a nonjury trial.

(iii) Newly Established Court-Based Rights to Relief

(iv) Decisions by Special Tribunals

Atlas Roofing Co. v. Occupational Safety & Health Review Commission (1977) - In cases in which "public rights" are being litigated, the 7th Amendment does not prohibit Congress from assigning the factfinding function and initial adjudication to an administrative forum with whihc the jury would be incompatible.

Ross v. Bernhard - A jury trial is required in stockholder derivative suits where a jury trial would have been available to the corporation.

The 7th Amendment was never intended to establish the jury as the exclusive mechanism for factfinding in civil cases.

The right to a jury trial turns not solely on the nature of the issue to be resolved but also on the forum in which it is to be resolved.

Granfinanciera, S.A. v. Nordberg (1989) - The recovery of a fraudulent conveyance is an action in which a jury trial is available.

Topic Lectures


Class Chat:

Jury Trial







Dairy Queen, Inc. case - DQ sought an accounting and a judgment for that amount owed. TC denied request for a jury trial since would be purely equitable or disputable facts are purely incidental. SC ruled that a case involving any legal issues must be submitted to a jury (even if the legal claim appears less significant than the equitable elements of the case).




Recorded Lecture:

Jury Trial

7th Amendment - guarantees the preservation of civil action jury trial.6th Amendment - preserves the jury in criminal cases.


Availability of Jury Trial

Historically, only available in courts of law, not courts of equity.1938 - Unification of the two courts, introduction of the Federal Rules.

Actions that historically were heard in the law courts (damages, etc.) are entitled to a jury trial.Actions that historically were heard in the equity courts (injunctions, specific performance, etc) are not entitled to a jury trial.Issues arise when there is a mixed-law case.

"clean-up" doctrine - The equity court would award money damages as an incidental form of relief.

Beacon Theatres, Inc. v. Westover (1959) - Plaintiff requested injunction to prevent an anti-trust violation. Defendant interposes a legal counterclaim. Court abolished the clean-up doctrine and enforced the 7th Amendment constitutional guarantee to a jury trial. Court ruled that the trial judge should apply the right to jury trial to particular issues within the case, on an issue by issue basis. Issues should be separated into "purely" legal, "purely" equitable, and third category of mixed-issues should be put before a jury to decide.

Dairy Queen v. Wood - Involved trademarks, injunctions, and accounting. Issues that were traditionally equitable only. Court ruled that accounting, since it was related to money, was more like damages in a legal court and should be entitled to a jury.

Ross v. Bernard - Shareholder derivative suit, traditionally an equity issue. Judge will decide on procedural issue of classifying the suit, and then will evaluate whether or not the claim is legal or equitable.

Kaption v. Landing - Bankruptcy case, traditionally an administrative procedure handled by equity courts.

7th Amendment has never been incorporated by the 14th Amendment as applicable to the States. Beacon Theatre doctrine is only binding on federal courts. Some states have adopted and some states have rejected the new doctrine.

Complexity exception - There may be some cases where giving the material to a jury may be so complex as to be incapable of being decided by a jury. Court has mostly rejected this doctrine.

7th Amendment "preserves the right to jury trial as at common law." Interpreted to apply to those issues that were available to a jury trial as of 1791. Most actions since then have been statutory in nature with provisions explicitly providing for a jury trial.Civil Rights statutes in 1960's did not provide for explicit jury trial for fear of nullifying the statutes by prejudiced juries.


Curtis v. Loehner - Race discrimination case for housing. Court upheld the right to jury trial under the Constitution if (1) the remedy provided by the statute is one traditionally provided by a jury, (2) Congress must have given the enforcement of the right to an Article III court, and (3) the statutory right must be analogous to something that existed in 1791.

Congress can avoid jury trial rights by passing statutes adjudicating certain cases to designated administrative agencies.

Not every money action is jury triable. If award is for damages or punitive, then a jury trial is available. Monies for back pay, restitution, or discretionary awards can be decided by a judge without a jury.

Jury Trial Procedure

A jury trial must be demanded, otherwise it is waived. Noncompliance also may cause the right to be lost.

Historically, jury consisted of 12 people. Modernly, the size of a civil jury may be reduced from 12 to 6 people. In certain states, a lesser verdict than unanimous can be binding.

Procedures include voir dire, challenges for cause, and preemptory challenges (not to be used for nefarious purposes).

Markman v. Westview Instruments, Inc. (1996) - Patent case. Critical issue was the scope of the patent. Answered by looking at patent claims and applications. Issue was the nature of the claims for the patent and how they should be interpreted, and whether this was analogous to a contract or a statute. Court had no 1791 analogy to follow. Court ruled based on the relative capabilities of a jury and a judge and found that a judge had the better relative capabilities to rule on patent law.

Three types of verdicts:1. general verdict - historical verdict based on traditional common law. Gives the

result and the remedy.2. special verdict - judge gives the jury a list of questions covering all of the issues

in the case and the jury decides on each issue. Judge reviews the individual answers to each issue and determines the result and damages based on the results.

3. general verdict accompanied by interrogatories - judge sends questions to the jury and may only cover selected issues with a rendering of a general verdict. General verdict must be consistent with the interrogatories.

Topic Hornbook

§ 10.1 A General Description


The right to a trial by jury in civil litigation depends upon the constitutional and statutory provisions in each jurisdiction. The right must be properly invoked or it will be waived and the case tried by the judge as if no right existed.

The first order of business in a jury trial is selecting the jurors.If it becomes clear that a potential juror is not likely to be fair or objective, an attorney can request that the court dismiss the person for cause.Each party is provided with a limited number of peremptory challenges to eliminate individuals whom an attorney believes are or may be biased, even though there is no specific evidence for such a belief.

In jury cases, the order of trial will be:1. Plaintiff's opening statement2. Defendant's opening statement3. Plaintiff's presentation of direct evidence4. Defendant's presentation of direct evidence5. Plaintiff's presentation of rebuttal evidence6. Defendant's presentation of rebuttal evidence7. Opening final argument by plaintiff8. Defendant's final argument9. Plaintiff's closing final argument10. Instructions to the jury

When a witness is called to testify, she is first sworn to tell the truth. Then the attorney who called the witness proceeds to ask questions on direct examination.On direct examination the attorney is not permitted to ask leading questions.This general rule is not applied when the witness is an opposing party or otherwise is shown to be hostile to the party who called her.The trial judge has discretion to permit the use of leading questions to expedite the introduction of background information.

When the direct examination has been completed, the opposing party is entitled to cross-examine the witness. The proscription against leading questions does not apply to cross-examination. Normally cross-examination is confined to those matters that were explored on direct. An attorney who wants to go beyond, into new areas, must obtain court permission or wait to call the witness himself. In either case the cross-examination at that point will be treated as direct examination. When cross-examination has been completed, the attorney who called the witness may conduct redirect examination to clarify the testimony. If the attorney does that, the opposing party will be permitted to cross-examine.

Final argument provides the opportunity for each side to bring it all together, without interruption, and to set forth the logical implications of the evidence that has been presented.

Final argument usually is in three parts. The plaintiff is given the right to speak both first


and last unless defendant had the burden of proof on the major issues tried, in which case the roles will be reversed.

Whenever a case is tried before a jury, it must be instructed with respect to the to be applied and the technical aspects of its deliberations.

The trial judge controls the time when the parties must submit proposed instructions. The court, after consultation with and sometimes argument by the parties, determines which of these to give and which of its own to add or substitute. The lawyers are informed and given an opportunity to object. In most jurisdictions the failure to object to an instruction or to request that an instruction be given precludes appeal on the ground that the instructions were improper, unless the error is grievous and resulted in a miscarriage of justice.

"pattern instructions" - Those that have been formally approved as "correct" in a particular jurisdiction.

After all arguments are completed and the instructions given, the jury retires to deliberate.

During the course of the deliberations it is not unusual for the jury to ask for clarification of the instructions or for the reading of certain portions of the testimony. In general, the court will inform all counsel of the request, hear any arguments for or against granting it, and then exercise its discretion in deciding what steps, if any, should be taken. The jury request may be denied if it could be misleading.A failure to notify the attorneys and give them an opportunity to be heard before ruling on the jury's request may lead to reversal of the judgment.

In some instances, the jury may report that it is deadlocked and cannot reach a verdict.

After the jury has rendered its verdict, the court or one of the parties may wish to have the jury "polled," in order to make certain that in fact the verdict was agreed upon by the requisite number of jurors required in the particular jurisdiction to constitute a verdict. In many jurisdictions a party has a right to a poll; in others it is a matter of discretion.

§ 10.2 The Law of Evidence

The law of evidence is a special branch of the law of procedure.

Three basic reasons for limiting the scope of information that parties otherwise might present:

1. Courts should not waste time receiving worthless information.

rule of relevancy - Evidence, to be admissible, must be of possible aid to the trier of fact in making its decision. To be relevant, evidence need only have the capacity to


help in the decision. Evidence may be relevant even though it is not conclusive of the matter to be decided.

2. When that information, though relevant, may engender such harm that it should not be admitted into evidence.

Evidence is prejudicial when it will induce the trier of fact to rely on irrelevant aspects of an otherwise relevant item.

Two different methods by which the value of a specific item of evidence is determined to be outweighed by its likely prejudicial effects:

1. The trial judge, exercising discretion, may so decide on a case-by-case basis, taking into consideration all the factors that pertain to the particular suit involved. That decision is subject to appellate review, but only on the ground that the trial judge has abused her discretion.

2. The law, through elaborate sets of evidence rules, established by common law, rule, or legislation, in effect declares certain types of evidence to be so prejudicial that they are inadmissible per se, taking the matter out of the hands of the trial judge.

hearsay - A statement made out of court that is offered to prove the truth of the matter stated. Hearsay is considered inherently prejudicial because the party against whom it would be used would not have an opportunity to cross-examine the person who made the statement at the time it was made.

The evidence rules define a large number of specific exceptions to the general prohibition against hearsay evidence.Two basic categories:

1. circumstances help to assure that the evidence is reliable.2. the nature of the issue is such that it is not likely that other evidence exists to prove the matter in question.

The trial judge retains discretion to exclude the item.Evidence of a person's character is not admitted to show that the person acted in conformity with his character on any particular occasion.

character - any general propensity to act in a certain way.Evidence of past activity can be introduced if it is offered for some purpose, other than to establish character, that is directly relevant to the case before the court.As an exception to the general rule, certain evidence of a witness' past propensity to tell the truth is permissible to cast doubt upon or revitalize that witness' credibility.

If an offer to compromise is rejected, under modern rules neither it nor statements made in connection with it are admissible.A number of jurisdictions have extended the rule prohibiting the admission of offers to compromise to include humanitarian gestures, such as a guarantee by one party to an accident to pay the hospital bills of another.


Evidence of subsequent repairs or insurance also is generally inadmissible because of its potential for prejudice.

3. Social policies.

"evidentiary privilege" - Some evidence, although valuable and nonprejudicial, will be inadmissible even though its exclusion might result in an incorrect factual determination at trial.

Several different kinds of privilege:1. "communication" privileges - protect conversations between individuals who

are in a special relationship. To be privileged, a conversation must be in confidence and, except for conversations between spouses, must be in the course of seeking professional advice.

2. "testimonial" privilege - allows eyewitnesses to refuse to testify at all.

Provisions governing documents and other real evidence

The attorney must lay a proper foundation for admissibility by showing, through testimony, exactly how the item relates to the suit.

Two special rules:1. rule of authentication - requires a showing that a document is what its proponent

claims it to be before it will be admitted into evidence.2. "best evidence" rule - requires a party to introduce the original of a document or to

establish that the original has been lost or destroyed before other evidence of the document's contents will be admitted.

Witnesses

Every witness must have first-hand knowledge of the matters about which he testifies.Ordinarily, a witness is not allowed to speculate or give an opinion about matters involved in the case.The witness can be asked about the details in order to test the validity of the opinion. An important exception to the general rule prohibiting opinion in evidence allows an expert witness to give an opinion regarding matters within his expertise.The witness must be qualified as an expert by testimony as to the witness's credentials.Such evidence was admissible only if the scientific foundation upon which it rested was generally accepted by those in the field to which it belonged.

CHAPTER 11 - JURY TRIAL

A. Introduction

§ 11.1 The Origins and Role of Jury Trial in Modern Society


The 7th Amendment - In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any court of the United States, than according to the rules of the common law. A similar guarantee can be found in nearly every state constitution.

The 7th Amendment has not been made binding on the states through the due-process clause of the 14th Amendment.

Federal Rule 38(b) requires a litigant to make a timely demand for a jury trial, and Rule 38(d) provides that this right is waived if there is a failure to do so.

Beacon Theatres, Inc. v. Westover - reaffirmed the right to civil jury trial.

§ 11.2 The Judge-Jury Relationship

The jury performs three main functions:1. determining what the facts are,2. evaluating the facts in terms of the legal consequences as formulated by the trial judge in the jury instructions, and3. presenting the result of its deliberations in the form of a verdict.

The jury's province does not extend to determining factual issues raised by questions of the admissibility and exclusion of evidence, claims of privilege, and threshold defenses, such as jurisdiction, pleading, and joinder questions.

The trial judge screens the evidence and determines what is relevant and how much is sufficient to permit the jury to make a finding on a given proposition. The judge also decides when judicial notice is taken of certain issues so that they need not be proven at trial, as well as what rules of substantive law should be applied, how best to instruct the jury regarding those rules, and what type of verdict should be rendered.

The judge has the power to choose the type of verdict to be rendered by the jury.

B. The Right to Jury Trial

§ 11.3 The Right to Jury Trial - In General

Three general sources for the right to jury trial:1. state and federal constitution provisions that preserve the common-law right in various forms;2. statutorily created causes of action that expressly or impliedly provide for jury trial; and3. the historic discretion of a court to empanel an advisory jury in equity proceedings.

The 7th Amendment to the United States Constitution does not "create" a right to jury


trial; rather, it preserves that right in the federal courts as it existed in common law.

Federal Rule 38(a) preserves the right of trial by jury as declared by the 7th Amendment to the parties inviolate.

Although the 7th Amendment guarantee is not binding upon the states, most state constitutions contain a comparable provision.

The trial judge's prerogative to empanel an advisory jury is preserved in Federal Rule 39(c) and comparable state provisions.The role of the contemporary advisory jury is to assist the court in determining any issue that the trial judge must decide. The court may utilize an advisory jury in deciding equitable issues to which no jury right attaches, or in trying a case in which the right to a jury has been waived by the parties.

§ 11.4 Jury Trial in the Federal Courts - The Seventh Amendment and the Historical Test

The 7th Amendment to the Constitution preserves the right to jury trial in the federal courts as it existed at common law.

Courts utilized tests attempting to determine whether the action was "basically" legal or equitable. If the action was basically legal, all issues as to which the jury right applied were sent to the jury; after its verdict, the judge determined any undecided issues and ruled on the equitable claims. If the action was basically equitable, the court not only decided the equitable issues, but it also could invoke the "clean-up doctrine" and rule on any "incidental" legal issues in the case, thereby obviating the need for a jury.

Federal Rule 57, which governs the procedure for obtaining a declaratory judgment in the federal courts, expressly preserves the right as set out in Federal Rules 38 and 39.Declaratory Judgments Act - The normal inquiry required by the 7th Amendment for determining the availability of jury trial is applicable in the declaratory judgment context.

Beacon Theatres, Inc. v. Westover - It is the issue to be adjudicated, not the underlying nature of the case, that is determinative of the right to jury trial.

§ 11.5 Problems of Law and Equity in the Federal Courts - Modern Developments

"dynamic concept" of the jury-trial right - The inquiry is directed not to the actual arrangement of legal and equitable issues in 1791, but to the distinctive common law process of adjudication and lawmaking that then and now, in England and in the United States, was recognized as flexible and changing.

The Beacon Theatres holding requires that a right to jury trial be measured in light of


modern procedural developments, especially reforms that make available a remedy at law that previously did not exist.

Beacon Theatres, Inc. v. Westover - Equity jurisdiction properly acquired is unaffected by the subsequent availability of a legal remedy.Prior to the trial of any equitable issues by the court, all factual issues raised by the legal aspects of the case must be tried to a jury.No test utilizing traditional equity procedure could interfere with the right to have a jury determine all the factual issues associated with a legal claim.

When a remedy at law has been made available, there is a constitutional right to a jury trial regardless of whether historically the action would have been tried in equity. The proper inquiry is not to be directed at the relationship between law and equity as of 1791, but rather at the process of accomodation between the two jurisdictions that has been developing over the past two centuries.

All order-of-trial problems must be resolved in favor of jury trial unless there are special and compelling reasons for granting a nonjury trial.The right to a jury trial attaches to issues, not causes of action, so that the fact that a traditionally equitable claim is filed first does not determine whether a jury trial first must occur on designated legal issues.

Two principles:1. the scope of equitable jurisdiction must be measured in light of the legal remedies and procedures currently available, and2. when an issue is common to both legal and equitable claims in the same proceeding, it must be tried first to a jury.

Beacon Theatres does not require a jury trial in a proceeding seeking purely equitable relief.

Dairy Queen, Inc. v. Wood - Virtually no application of the clean-up doctrine was constitutionally acceptable. Where both legal and equitable issues are presented in a single case, only under the most imperative circumstances, circumstances which in view of the flexible procedures of the Federal Rules we cannot now anticipate, can the right to a jury trial of legal issues be lost through prior determination of equitable claims.Any legal issues for which a trial by jury is timely and properly demanded must be submitted to a jury.The constitutional right to trial by jury cannot be made to depend upon the choice of words used in the pleadings.

The power of the court to appoint masters under Federal Rule 53(b) in order to assist the jury in computing money awards had obviated the historical necessity of a court trial.The right to jury trial exists as to any issue that is an element of a claim cognizable at law, even if the claim appears to be less significant than the equitable elements of the case.


A determination of the "legal" nature of an issue must turn on an examination of the range of remedies that have been made available by procedural reforms since the ratification of the 7th Amendment.

Ross v. Berhard - In the 19th century, the derivative suit had been treated as a purely equitable procedure. The right to jury trial attaches to those issues in derivative actions as to which the corporation, if it had been suing in its own right, would have been entitled to a jury.

"Dual nature" of the derivative suit requires that two things be determined:1. the plaintiffs' right to assert the claims of the corporation, and2. the merits of the claims asserted.

It is the individual issue, rather than the basic nature of the case or the form of the action, that is determinative of the right to jury trial.The "legal" nature of an issue is determined by considering, first, the pre-merger custom with reference to such questions; second, the remedy sought; and third, the practical abilities and limitations of juries.

the complexity exception - Whether a federal court can deny a jury trial on the ground that the litigation is so complex that it is beyond the competence of the jury.

§ 11.6 Jury Trial in the Federal Courts - Statutory Causes of Action

In addition to constitutional jury-trial rights, when Congress creates a statutory cause of action it may state that jury trial must be provided, thereby conferring a statutory jury trial right. Further, when Congress has failed to provide expressly for trial by jury of a statutory cause of action, the federal courts often have found that Congress implicitly provided for the right or relied on the presence of the constitutional guarantee to supply it.

The right to trial by jury guaranteed by the 7th Amendment is not restricted to those common-law actions that actually existed in 1791. Congress may create new causes of action by statute, or legislatively replace or modify actions that existed in 1791, without changing the applicability of the 7th Amendment guarantee.

NLRB v. Jones & Laughlin Steel Corporation - When Congress determines that administrative, rather than judicial remedies are appropriate, it may so provide and the 7th Amendment will not compel a jury trial in those proceedings.

In addition to its power to create administrative agencies for the enforcement of statutory rights, Congress may act under its Article I, Section 8 authority to establish specialized courts for the trial of certain actions historically cognizable in equity.

Atlas Roofing Company v. Occupational Safety & Health Review Commission (1977) - The 7th Amendment does not prohibit Congress from committing factfinding and initial


adjudication to an administrative tribunal that is incompatible with a jury. The right to a jury trial turns not solely on the nature of the issue to be resolved, by also on the forum in which it is to be resolved.

A preference for administrative factfinding is justifiable only in situations involving "public rights," e.g. where the Government is creating enforceable public rights. Cases involving wholly private matters between private individuals are not implicated.

Granfinanciera, S.A. v. Nordberg - The trustee's right to recover a fraudulent conveyance from a party who had not filed a claim against the estate was a private, rather than a public, right. Congress could not eliminate a party's 7th Amendment jury-trial right merely by relabeling a cause of action and giving exclusive jurisdiction to a non-Article III tribunal.A jury trial was required constitutionally. Congress in Title VIII had created a statutory right in the nature of a suit at common law and thus within the jury-trial guarantee.

Pernell v. Southall Realty - The 7th Amendment required a jury trial regardless of Congress' desires because an action for the recovery of real property is clearly analogous to a suit at common law.

A congressional indication that nonjury trial is preferable, unaccompanied by the creation of a specific statutory, nonjudicial proceeding, cannot insulate a particular action from the 7th Amendment.

There is a constitutional presumption for jury trial and a very heavy burden of proof is placed on those desiring to overcome it.

1976 Foreign Sovereign Immunities Act - Provides for subject-matter jurisdiction in the federal courts for actions against foreign governments or their instrumentalities and contains explicit language that jurisdiction is limited to nonjury proceedings.

Beacon Theatres, Inc. v. Westover , 359 U.S. 500, Supreme Court of the United States, Mr. Justice Black, 1959

Case Brief

FACTS:

Petitioner sought by mandamus to require a district judge to vacate certain orders alleged to deprive it of a jury trial of issues arising in a suit brought against it by Fox. The Court of Appeals refused the writ. Fox had asked for declaratory relief against Beacon alleging a controversy arising under the Sherman Antitrust Act and under the Clayton Act.Fox operates a movie theatre and has long been exhibiting films under contracts with movie distributors. These contracts grant it the exclusive right to show "first run" pictures.Beacon notified Fox that it considered contracts barring simultaneous exhibitions of first-


run films in the two theatres to be overt acts in violation of the antitrust laws.Unless Beacon was restrained, irreparable harm would result. Fox prayed for both a declaration that a grant of clearance is reasonable and for an injunction to prevent Beacon from instituting any action. Beacon filed an answer, a counterclaim, and a cross-claim. Treble damages were asked.Beacon demanded a jury trial of the factual issues in the case as provided by Federal Rule 38(b). The District Court viewed the issues as essentially equitable. It directed that these issues be tried to the court before jury determination of the validity of the charges of antitrust violations made in the counterclaim and cross-claim.

ISSUE:

RULE:

FRCP 57 (Declaratory Judgment Act) - specifically preserves the right to jury trial for both parties.A party who is entitled to maintain a suit in equity for an injunction may have all the issues in his suit determined by the judge without a jury regardless of whether legal rights are involved.A court sitting in equity could retain jurisdiction even though later a legal remedy became available. In such instances the equity court had discretion to enjoin the later lawsuit in order to allow the whole dispute to be determined in one case in one court.The basis of injunctive relief in the federal courts has always been irreparable harm and inadequacy of legal remedies.

APPLICATION:

The District Court's finding that the Complaint for Declaratory Relief presented basically equitable issues draws no support from the Declaratory Judgment Act.If Beacon would have been entitled to a jury trial in a treble damage suit against Fox it cannot be deprived of that right merely because Fox took advantage of the availability of declaratory relief to suee Beacon first.Under the Declaratory Judgment Act and the Federal Rules, neither claim can justify denying Beacon a trial by jury of all the issues in the antitrust controversy.The use of discretion by the TC under Rule 42(b) to deprive Beacon of a full jury trial on its counterclaim and cross-claim, as well as on Fox's plea for declaratory relief, cannot be justified.The justification for equity's deciding legal issues once it obtains jurisdiction, and refusing to dismiss a case, merely because subsequently a legal remedy befcomes available, must be re-evaluated in the light of the liberal joinder provisions of the Federal Rules which allow legal and equitable causes to be brought and resolved in one civil action.

CONCLUSION:


Only under the most imperative circumstances can the right to a jury trial of legal issues be lost through prior determination of equitable claims.

Curtis v. Loether , 415 U.S. 189, Supreme Court of the United States, Mr. Justice Marshall, 1974

Case Brief

FACTS:

Petitioner, a Negro woman, brought this action claiming that respondents, who are white, had refused to rent an apartment to her because of her race. In her complaint she sought only injunctive relief and punitive damages. The District Court granted preliminary injunctive relief. This injunction was dissolved later and the case went to trial on the issues of actual and punitive damages.Respondents made a timely demand for jury trial in their answer. The District Court denied the jury request. The District Court found that respondents had in fact discriminated against petitioner on account of her race and awarded punitive damages. The Court of Appeals reversed. ISSUE:

Whether the Civil Rights Act or the 7th Amendment requires a jury trial upon demand by one of the parties in an action for damages and injunctive relief under this section.

RULE:

The 7th Amendment does not apply to actions enforcing statutory rights, and requires a jury trial upon demand, if the statute creates legal rights and remedies, enforceable in an action for damages in the ordinary courts of law.When Congress provides for enforcement of statutory rights in an ordinary civil action in the district courts, where there is obviously no functional justification for denying the jury trial right, a jury trial must be available if the action involves rights and remedies of the sort typically enforced in an action at law.If a plaintiff proves unlawful discrimination and actual damages, he is entitled to judgment for that amount.

APPLICATION:

We think it is clear that the 7th Amendment entitles either party to demand a jury trial in an action for damages in the federal courts.The relief sought here - actual and punitive damages - is the traditional form of relief offered in the courts of law.There is surely no basis for characterizing the award of compensatory and punitive damages here as equitable relief.


CONCLUSION:

These considerations are insufficient to overcome the clear command of the 7th Amendment.

Chauffeurs, Teamsters & Helpers, Local No. 391 v. Terry , 494 U.S. 558, Supreme Court of the United States, Justice Marshall, 1990

Case Brief

FACTS:

McLean and Local 391 were parties to a collective-bargaining agreement that governed the terms and conditions of employment at McLean's terminals.Respondents filed a grievance with the Union, but the Union declined to refer the charges to a grievance committee on the ground that the relevant issues had been detemrined in prior proceedings.Respondents filed an action in District Court, alleging that the Union had violated its duty of fair representation and sought compensatory damages for lost wages and health benefits.Respondents had requested a jury trial in their pleadings. The Union moved to strike the jury demand on the ground that no right to a jury trial exists in a duty of fair representation suit. The District Court denied the motion to strike.

ISSUE:

Whether an employee who seeks relief in the form of backpay for a union's alleged breach of its duty of fair representation has a right to trial by jury.

RULE:

The duty of fair representation is inferred from unions' exclusive authority under the National Labor Relations Act. The duty requires a union to serve the interests of all members without hostility or discrimination toward any, to exercise its discretion with complete good faith and honesty, and to avoid arbitrary conduct.To determine whether a particular action will resolve legal rights, we examine both the nature of the issues involved and the remedy sought.The 7th Amendment question depends on the nature of the issue to be tried rather than the character of the overall action. We have characterized damages as equitable where they are restitutionary, such as in actions for disgorgement of improper profits.A monetary award incidental to or intertwined with injunctive relief may be equitable.

APPLICATION:

An action for breach of a union's duty of fair representation was unknown under common


law. Under common law, an action to set aside an arbitration award was considered equitable.Respondents' claim against the Union cannot be characterized as an action to vacate an arbitration award.Just as a trustee must act in the best interests of the beneficiaries, a union, as the exclusive representative of the workers, must exercise its power to act on behalf of the employees in good faith. Just as a beneficiary does not directly control the actions of a trustee, an individual employee lacks direct control over a union's actions taken on his behalf.The trust analogy does not persuade us to characterize respondents' claim as wholly equitable.To recover from the union here, respondents must prove both that McLean violated § 301 by breaching the collective-bargaining agreement and that the Union breached its duty of fair representation.Respondents' action against the Union encompasses both equitable and legal issues.The only remedy sought is a request for compensatory damages representing backpay and benefits.We find that the remedy sought by respondents is legal.The backpay sought by respondents is not money wrongfully held by the Union, but wages and benefits they would have received from McLean had the Union processed the employees' grievances properly. Such relief is not restitutionary.Congress specifically charaterized backpay under Title VII as a form of "equitable relief."Backpay sought from an employer under Title VII would generally be restitutionary in nature.The remedy sought in this duty of fair representation case is clearly different from backpay sought for violations of Title VII.

CONCLUSION:

The 7th Amendment entitles the plaintiff to a jury trial.The remedy of backpay sought in this duty of fair representation action is legal in nature. Respondents are entitled to a jury trial on all issues presented in their suit.The money damages respondents seek are the type of relief traditionally awarded by courts of law. Thus, the 7th Amendment entitles respondents to a jury trial, and we therefore affirm the judgment of the Court of Appeals.


A. Trial by Jury

d. The Right to Jury Trial in the State Courts

3. The Province of Judge and Jury

4. Tactical Considerations in Deciding Between Trial by Judge or by Jury

The right to trial by jury may be waived. Unless the right is invoked properly by one of


the parties, the case can be decided by the trial judge sitting alone, as are cases in which the right does not exist. In many jurisdictions the judge has the power in a nonjury case or when a jury trial right is waived to impanel an advisory jury whose verdict the court has discretion either to embrace or ignore (Federal Rule 39(c)).

a. Institutional Factors

In many jurisdictions there is a substantial backlog of cases on the jury-trial calendar and a long wait is inevitable, whereas the judge-trial calendar is practically current and the case may be heard within a few months.

On the average, a jury trial takes considerably more time than does a court trial.

b. Psychological Factors

The statistics indicate that plaintiffs win more often in trial before judges than they do in trials before juries.On the other hand, juries tend to award greater damages than do judges.Moreover, juries are significantly more likely to award punitive damages than are judges and award higher levels of punitive damages.

5. Demand and Waiver of Trial by Jury

The "discretion" given the district court by Federal Rule 39(b) to permit a jury trial despite the absence of a demand is exercised sparingly.

6. Selection and Composition of the Jury

a. Size

Patton v. United States (1930) - The jury should consist of twelve men, neither more nor less.

Williams v. Florida (1970) - A state might constitutionally use a jury with six (or perhaps fewer) members in a criminal case.

Colgrove v. Battin (1973) - By referring to the "common law," the Framers of the 7th Amendment were concerned with preserving the right of trial by jury in civil cases where it existed at common law, rather than the various incidents of trial by jury.Constitutional history reveals no intention on the part of the Framers to equate the constitutional and common-law characteristics of the jury.There was no discernable difference between the results reached by the two different-sized juries.While we express no view as to whether any number less than six would suffice, we conclude that a jury of six satisfies the 7th Amendment's guarantee of trial by jury in civil cases.


Local rules providing for six-member juries in federal civil actions are now common.

Federal Rule 48 was amended in 1991 to permit a court to decide the size of the jury so long as it consists of no fewer than six and no more than twelve members.

In some states, juries of less than six members are permitted in civil trials.

b. Empaneling the Jury

Jury selection is a two-stage process:1. a list of potential jurors, the venire, is compiled and they are assembled. A number of them, equal to the number who will serve, usually twelve or six, are then selected at random to sit as a tentative jury.2. These tentative jurors are questioned by the judge and/or by the attorneys to determine whether each of them can fairly and appropriately decide the case. This questioning is called voir dire. If one of them is dismissed, his or her place is taken by another member of the venire, selected at random, who is in turn subject to questioning. This process continues until the final panel is in place.

Thiel v. Souther Pacific Co. (1946) - Although the judge can excuse individuals for whom jury service would be a financial hardship, that cannot justify the exclusion of all daily wage earners regardless of whether an actual hardship is involved.

Qualifications for jury service vary from state to state and include such factors as citizenship, local residence, ownership of property, health, and payment of taxes.

The most common method for creating jury lists is by relying on voter registration records. 28 U.S.C. § 1863(b)(2) requires federal jury lists to be based on these records, with the use supplemental of sources when that is necessary to promote the interests of fair representation.

The special or "blue ribbon" jury, which is composed of people specially selected because of their above-average intelligence, is an attempt to meet the contention that the ordinary juror is incompetent to deal with the complex problems of modern litigation.

Fay v. New York (1947) - The Supreme Court upheld the constitutionality of a NY statute that gave the trial court discretion to empanel a "blue ribbon" jury upon application of either party.

c. Challenging Individual Jurors

Challenges to individual jurors:1. challenges for cause permit a prospective juror to be rejected when partiality can be shown. Peremptory challenges permit rejection of jurors without any statement of reason and usually are based on an assumed partiality that may not be susceptible of proof.


An unlimited number of challenges for cause are permitted each party. These challenges are determined by the trial judge.

The number of peremptory challenges allowed each side varies among the states. The general range is from 2 to 6. In the federal courts each side is permitted 3.

As a general rule a lawyer will seek jurors who will identify and sympathize with his client.

Johnson v. California (2005) - A party who objects to peremptory challenges as discriminatory need only establish an inference of discrimination to require the opposing party to justify its peremtory challenges.

The 7th Amendment does not apply to civil cases in state courts.

d. Conducting the Voir Dire

Federal Rule 47(a) leaves voir dire entirely in the district judge's discretion.

Topic Lectures

Class Chat:

Jury Trial







Dairy Queen, Inc. case - DQ sought an accounting and a judgment for that amount owed. TC denied request for a jury trial since would be purely equitable or disputable facts are purely incidental.


SC ruled that a case involving any legal issues must be submitted to a jury (even if the legal claim appears less significant than the equitable elements of the case).




Topic Hornbook

CHAPTER 11 - JURY TRIAL

B. The Right to Jury Trial

§ 11.7 Jury Trial in State Courts - The New York Approach

Although under current constitutional construction the 7th Amendment is not applicable to the states, almost all states have comparable constitutional guarantees. The interpretation generally given these provisions has been that the right to jury trial is to be applied as it existed at the time the state's constitution was adopted.

The various states' procedural rules or statutes that implement their respective constitutional jury-trial guarantee adopt three different approaches:1. a simple declaration that the right as declared by constitution or by statute shall be preserved;2. a general provision that all cases not triable in equity are accorded the right to jury trial; or3. an enumeration of the specific types of cases in which the right exists.

Section 4101(1) of the CPLR guarantees the right to a jury trial in an action in which a party demands and sets forth facts which would permit a judgment for a sum of money only.Section 4101(2) of the CPLR lists an action of ejectment; for dower; for waste; for abatement of and damages for a nuisance; to recover a chattel; or for determination of a claim to real property under article 15 of the real property actions and proceedings law as acitons in which a right to jury trial exists.

action orientation - Under this approach, the court will characterize an action as either "egal" or "equitable" in its entirety, and decide on this basis whether the action is jury triable.


CPLR 4101 provides that equitable defenses and equitable counterclaims shall be tried by the court.

When legal and equitable claims arose out of the same transaction, post-merger cases in NY have held that there is no jury-trial right in this situation.

CPLR 4102(c) provides that plaintiff does not waive the jury right by joinder.

The defendant could not be deprived of a jury trial when plaintiff joined legal and equitable claims arising out of two separate transactions. When plaintiff joinds demands for both legal and equitable relief regarding one cause of action, an the main issue to be determined is legal, defendant maintains a right to jury trial.

§ 11.8 Problems of Federalism

Dice v. Akron, Canton & Youngstown Railroad Company - The state courts must grant a jury trial in proceedings involving federally-created causes of action whenever there is a strong federal policy in favor of jury trial in the particular case.

Even though the underlying substantive claim derives from state law, its characterization as legal or equitable - and there the question whether it is jury triable or not - is determined by federal law.

A federal court sitting in a diversity action does not have to apply state law in determining the scope of the jury-trial right.

Simler v. Conner - The 7th Amendment requires a federal court sitting in a diversity action to apply federal law in determining whether an action is "legal" or "equitable" for purposes of the right to jury trial.

Federal practice controls the scope and incidence of jury trial, even when federal practice is not constitutionally required.

§ 11.9 Procedure for Obtaining Jury Trial

Under state-code procedure, an express waiver by the litigants has been required to forestall jury trial on the issues as to which the right exists.

Federal Rule 38 requires a party who wishes to have the case tried to a jury to make an affirmative demand for one.Failure to make the required demand will result in a waiver of the jury-trial right.

The right to a jury trial, once demanded, is determined by examining all the pleadings.Neither the nature of the action, nor the label give it, is determinative.


In the federal courts the individual issue is the appropriate unit to be considered, and the existence of the right with regard to each issue must be judged in light of modern procedural developments

Federal Rule 38(b) requires that the demand be in writing and filed in timely fashion; an untimely or oral demand is insufficient to secure a jury trial.

A litigant may limit the extent of the demand by requesting jury trial only on certain specified issues. A general demand for a jury trial that does not specify issues for submission to the jury will result in a jury trial of all issues as to which the right applies.

Once a proper demand has been made, Federal Rule 38(b) establishes that it may not be withdrawn without the consent of all the parties.

Plaintiff's jury-trial demand does not extend to issues raised between the defendant and any third-party defendants.

Federal Rule 38(b) requires that a demand be made within 10 days after the last pleading directed to the issue on which jury trial is sought.

If the counterclaim raises the same issues as the answer, then a demand made within 10 days after the reply is effective as to those issues. If the counterclaim and the reply raise new issues that were not contained in the complaint and answer, however, a demand served more than 10 days after the answer, but within 10 days after the reply, preserves the right to jury trial only for those issues raised by the counterclaim and reply and not those in the complaint and answer.

A timely demand may be made within 10 days after the service of any amended and supplemental pleadings raising a new issue. If a general demand already has been made, however, a new demand after the amendment is not required.If the amended or supplemental pleading does not raise a new issue, but merely changes the theory of the case or the relief requested, then a jury-trial right waived by a failure to demand it in connection with the original pleading is not revived.

Merely recasting an action as either "legal" or "equitable" terms does not constitute a "new issue" for purposes of Federal Rule 38(b), since Federal Rule 54(c) makes any amendment seeking to change the relief requested unnecessary.A party may not reserve an election of the form of trial beyond the time when it becomes reasonably apparent that under some aspects or legal theories of the case there may be a jury issue.

1963 Amendment to Federal Rule 819c) - A timely express demand in state court is sufficient to secure the jury right upon removal. A demand need not be made if the procedure of the state court from which the case is removed does not require an express demand to claim trial by jury.


The opportunity to demand a jury trial, once waived, is not automatically revived by a reversal on appeal or the grant of a new trial.

A party may request the court to exercise its discretion under Federal Rule 39(b) to order a trial by jury on all or some of the issues.

In determining whether a late motion for jury trial should be allowed, the courts have considered several factors: whether the motion was made within a reasonable time after expiration of the period allowed by statute, whether the failure to make a demand was the result of such inadvertence, mistake, or excusable neglect as should justify allowing the motion, and whether permitting a jury trial would prejudice the rights of the adverse party, as well as the effect it would have on the court's docket.

C. Trial By Jury

§ 11.10 Selection and Composition of the Jury

The Judiciary Act of 1789 provided that jurors in federal courts were to have the same qualifications as jurors of the state in which the district court was located.

The "key man" system - Persons or organizations thought to have extensive contacts in the community were requested to suggest juror candidates who met the qualifications.

Rabinowitz v. United states (1966) - The statutory qualifications were exhaustive and officials had no discretion to impose additional requirements.

The present qualifications for federal jurors requires that the candidate be:1. a United States citizen,2. a resident of the judicial district for one year,3. 18 years of age or older,4. sufficiently literate to fill out a juror-qualification form,5. fluent in the English language,6. mentally and physically capable of service, and7. free from any pending charges or past convictions of crimes punishable by

imprisonment for more than one year.

The 1968 statutory scheme delineates four categories of person who either are not permitted to serve or can be excused from service:

1. groups of persons or occupational classes whose members shall be barred from jury service on the ground that they are exempt - including public officials and active members of the Armed Forces and local fire and police departments.

2. "excuse groups" - members can serve if they wish, but must be excused upon request; defined in terms of "undue hardship in traveling" to the courthouse because of distance or travel time.

3. Individuals who can demonstrate "undue hardship or extreme inconvenience" may be excused for a time that is discretionary with the court, at the expiration of


which the person can be recalled for service.4. Those whom the court has the power to exclude for partiality or because they are

likely to be disruptive, to threaten jury secrecy, or to affect adversely the integrity of the proceedings.

"blue ribbon" jury selection system - Courts selected for special jury service a group of individuals who were able to qualify under strict intelligence examinations.

A series of questions are posed to each prospective juror in a process called the voir dire examination.

Federal Rule 47 leaves the matter of who questions prospective jurors to the court's discretion but permits supplemental questions from the parties.

Challenge to the array - A procedure available by which the method used in selecting prospective jurors can be attacked on the ground that constitutional or statutory standards have not bee satisfied.

Thiel v. Southen Pacific Compnay - Federal court litigants are entitled to have prospective jurors selected from a cross-section of the entire community.

The federal selection process itself may not systematically exclude a legally cognizable group or class of people from eligibility for jury service.

Challenges to individual jurors are of two types: for cause and peremptory.

Failure to meet the stautory qualifications for jury duty, evidence of bias, and relationship to one of the litigants are all grounds for challenging a potential juror for cause. Challenges for cause are unlimited in number and may be exercised by the parties through a timely object during the selection process, or by the court on its own motion.

A peremptory challenge is when a party have a prospective juror removed without stating any reason.

In the federal courts, the number of peremptory challenges accorded a party is prescribed by statute. In a civil action, each litigant is entitled to three peremptory challenges.

Peremptory challenges are used to disqualify jurors with occupational and attitudinal characteristics that an attorney feels are unfavorable to the client.

Batson v. Kentucky (1986) - A state denies a defendant equal protection when it puts him on trial before a jury from which members of his own race have been excluded.

Race-based peremptory challenges violate the equal-protection rights of the potential jurors as well.


Edmonson v. Leesville Concrete Company - A private litigant in a civil case may not use peremptory challenges to exclude jurors on the basis of their race because doing so violates the equal-protection rights of the excluded jurors.

In 1995, the Supreme Court extended its prohibition to forbid gender-based peremptory challenges.

§ 11.11 Size of the Jury and the Requirement of Unanimity

The common-law trial by jury has referred to a unanimous verdict of a panel of 12 members.

Williams v. Florida (1970) - A 6 person jury in a state criminal proceeding satisfied the 6th Amendment requirement of trial by jury, which has been made binding on the states through the 14th Amendment.

Colgrove v. Battin (1973) - Upheld a federal district-court local rule providing for a 6 person jury in civil proceedings.

Many state statutes or court rules also provide for a nonunanimous verdict in civil actions.

Apodaca v. Oregon - A statutory provision allowing the state to convict an individual with less than a unanimous verdict was constitutionally sufficient.

Federal Rule 48 provides that the parties in a civil action may stipulate to a trial by a jury of fewer than 12, or may agree to abide by the verdict reached by a stated number of jurors.

Markman v. Westview Instruments, Inc. , 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577, Supreme Court of the United States, Justice Souter, 1996

Case Brief

FACTS:

Plaintiff Markman's patent describes a system that can monitor and report the status, location, and movement of clothing in a dry cleaning establishment.Respondent Westview's product also includes a keyboard and processor, and it lists charges for the dry-cleaning services on bar-coded tickets that can be read by portable optical detectors.The case was tried before a jury, which heard, among others, a witness produced by Markman who testified about the meaning of the claim language.After the jury compared the patent to Westview's device, it found an infringement of Markman's claim. The District Court nevertheless granted Westview's deferred motion for judgment as a matter of law.l


The United States Court of Appeals for the Federal Circuit affirmed, holding the interpretation of claim terms to be the exclusive province of the court and the 7th Amendment to be consistent with that conclusion..

ISSUE:

Whether the interpretation of a so-called patent claim, the portion of the patent document that defines the scope of the patentee's rights, is a matter of law reserved entirely for the court, or subject to a 7th Amendment guarantee that a jury will determine the meaning of any disputed term of art about which expert testimony is offered.Whether a particular issue occurring within a jury trial (here the construction of a patent claim) is itself necessarily a jury issue, the guarantee being essential to preserve the right to a jury's resolution of the ultimate dispute.

RULE:

When an issue falls somewhere between a pristine legal standard and a simple historical fact, the fact/law distinction at times has turned on a determination that, as a matter of sound administration of justice, one judicial actor is better positioned than another to decide the issue in question.

APPLICATION:

It turns out here, for judges, not juries, are the better suited to find the acquired meaning of patent terms.Patent construction in particular is a special occupation, requiring, like all others, special training and practice. The judge, from his training and discipline, is more likely to give a proper interpretation to such instruments than a jury, and he is, therefore, more likely to be right, in performing such a duty, than a jury can be expected to be.Any credibility determinations will be subsumed within the necessarily sophisticated analysis of the whole document, required by the standard construction rule that a term can be defined only in a way that comports with the instrument as a whole.There is sufficient reason to treat construction of terms of art like many other responsibilities that we cede to a judge in the normal course of trial, notwithstanding its evidentiary underpinnings.We see the importance of uniformity in the treatment of a given patent as an independent reason to allocate all issues of construction to the court.Uniformity would be ill served by submitting issues of document construction to juries.Treating interpretive issues as purely legal will promote (though it will not guarantee) intrajurisdictional certainty through the application of stare decisis on those questions not yet subject to interjurisdictional uniformity under the authority of the single appeals court.

CONCLUSION:

The construction of a patent, terms of art within its claim, is exclusively within the


province of the court.We hold that the interpretation of the word "inventory" in this case is an issue for the judge, not the jury, and affirm the decision of the Court of Appeals for the Federal Circuit.

Flowers v. Flowers , 397 S.W.2d 121, Texas, Court of Civil Appeals of Texas, Chapman, Justice, 1965

Case Brief

FACTS:

This case was tried in a town and country of very small population where the record shows many members of the jury panel had heard what they referred to as gossip or rumors concerning the case.The jurors were told on voir dire examination that the evidence would show that plaintiff drank some socially and on one or two occasions had consumed alcoholic beverages to excess.The record preserved upon examination of Mrs. Schmidt as a prospective juror shows that she first testified she was well acquainted with the Flowers family, and that she had no opinion formed in the case at all. Then when counsel said to her the evidence would shall that the wife drinks, she answers that she is against drinking in any manner, any kind.The court then overruled the challenge of the juror for cause.The record also shows by affidavit of a lady juror panelist who sat next to Mrs. Schmidt during voir dire examination that Mrs. Schmidt stated she felt sorry for Mr. Flowers. Mrs. Philpot's affidavit also affirmed that Mrs. Schmidt made a statement to one of the other prospectie jurors sitting next to her before the jury was selected that Mrs. Flowers had run off and left Mr. Flowers, once before and that both of such statements were made before she was selected and sworn to serve as a juror.At both the motion for mistrial and motion for new trial based partly upon the proceedings just related, the court declined to hear Mrs. Philpot's tendered testimony as a witness in support of her affidavit.

ISSUE:

A question of the disqualifications of a juror in a child custody contest tried to a jury.

RULE:

Article 2134, Vernon's Ann.Tex.Civ.St., provides as one of the disqualifications: "Any person who has a bias or prejudice in favor of or against either of the parties."This disqualification for bias or prejudice extends not only to the parties personally, but also to the subject matter of the litigation.Bias is an inclination toward one side of an issue rather than to the other. Prejudice means pre-judgment, and consequently embraces bias; the converse is not true.


APPLICATION:

Mrs. Schmidt's statements indicate to us both bias and prejudice facually and such a prejudgment of the case as to indicate she could not have acted with impartiality. Her disqaualification is not a matter of discrtion with the TC but a matter of law.

CONCLUSION:

We believe the court abused its discretion in refusing to hold the juror disqualified.The judgment of the TC is reversed and remanded for a new trial.

Edmonson v. Leesville Concrete Co. , 500 U.S. 614, Supreme Court of the United States, Justice Kennedy, 1991

Case Brief

FACTS:

During voir dire, Leesville used two of its three peremtory challenges authorized by statute to remove black persons from the perspective jury.Edmonson, who is himself black, requested that the District Court require Leesville to articulate a race-neutral explanation for striking the two jurors. The District Court denied the request.Edmonson appealed, and a divided en banc panel affirmed.

ISSUE:

Whether a private litigant in a civil case may use peremptory challenges to exclude on account of their race.

RULE:

A criminal defendant, regardless of his or her race, may object to a prosecutor's race-based exclusion of persons from the petit jury.A prosecutor's race-based peremptory challenge violates the equal protection rights of those excluded from jury service.A defendant may raise the excluded jurors' equal protection rights.The Constitution's only protections of individual liberty and equal protection apply in general only to action by the government.When a lawyer exercises a peremptory challenge, the judge advises the juror he or she has been excused.Though the motive of a peremptory challenge may be to protect a private interest, the objective of jury selection proceedings is to determine representation on a governmental body.Determining whether a prima facie case has been established requires consideration of all


relevant circumstances, including whether there has been a pattern of strikes against members of a particular race.

APPLICATION:

CONCLUSION:

The judgment is reversed, and the case is remanded for further proceedings consistent with our opinion.


XIV. Trial

B. Scope and Order of Trial


SECTION B. THE SCOPE AND ORDER OF TRIAL

1. Setting the Case for Trial

In theory, a case should be tried once the pleadings are filed, discovery completed, settlement explored and rejected, and all pretrial motions decided.

2. Order of Trial

The trial courts have the ability to split cases into discrete portions, trying claims or issues separately whenever that is convenient, economical, or avoids prejudice to a party or parties.

a. Jury Cases

Standard practice:1. Plaintiff's opening statement2. Defendant's opening statement3. Plaintiff's presentation of direct evidence4. Defendant's presentation of direct evidence5. Plaintiff's presentation of rebuttal evidence6. Defendant's presentation of rebuttal evidence7. Opening final argument by plaintiff8. Defendant's final argument9. Closing final argument by plaintiff10. Giving instructions to the jury

b. Nonjury Cases


The court often will dispense with the opening statement and the closing argument. There is never a need to give instructions.

3. The Burden of Proof

a. Burden of Production

"burden of proof" - the burden of production and the burden of persuasion.

The burden of going forward, usually placed on the plaintiff in civil actions.The plaintiff is responsible for "producing" a certain threshold amount of evidence to raise a claim.Defendant must normally meet the burden of production with respect to affirmative defenses.The threshold is defined as the minimum amount of evidence needed to satisfy the standard or proof and, thus, win the case.One has met the burden of production if he has produced enough evidence for a reasonable jury to decide in his favor.One can meet the burden of production even if all the evidence produced is refuted by the opposing party.If the party charged with the burden of production has failed to adduce enough evidence, a summary judgment motion (prior to trial) or a motion for judgment as a matter of law (at trial) will be granted.

b. Burden of Persuasion

If the burden of production is met, the case can move forward to the stage of persuasion.If the plaintiff has the burden of persuasion, and does not convince the jury (or judge, in a bench trial) by the standard of proof required, the jury must rule for the defendant. Even if the plaintiff has satisfied the burden of production and the defendant brings forth no evidence of his own, if the jury is not persuaded that the plaintiff's evidence is sufficiently reliable or credible, the defendant must prevail.

c. Standards for Meeting the Burden of Persuasion

The standard for meeting the burden of persuasion represents the quantity and quality of evidence a party must produce at trial to prevail.

The three most common standards are:1. preponderance of the evidence,2. clear and convincing evidence, and3. beyond a reasonable doubt.

"Preponderance" is considered to be more than 50%."clear and convincing" standard lies somewhere between a preponderance and "beyond a reasonable doubt."


In most civil cases, the party bearing the burden of persuasion must prove by a preponderance of the evidence that she is entitled to the relief requested.

d. Shifting Burdens

The term "burden of proof" usually refers to both production and persuasion."shifting burdens" - When the burden of production is placed on one party and the burden of persuasion is on the other.

4. Tactical Considerations Regarding the Opening Statement

Normally, a case begins with plaintiff's opening statement.Defendant has the option of making an opening statement immediately after plaintiff has done so.The court is not required to try a case once it becomes clear that one of the parties must prevail.

5. The Presentation of Evidence

a. The Problems of Admissibility

b. The Technique of Presentation

Usually most evidence is presented at trial through the examination and cross-examination of witnesses.

There are two ways to minimize the effects of cross-examination:1. To make certain that the witness is clear as to the story and is telling the truth,2. For the attorney on direct examination to raise and dispense with any matter that

might cast doubt on a witness' veracity if it were raised for the first time on cross-examination.

c. The Role of the Trial Judge in the Presentation of Evidence

Judges do have some power to call and interrogate witnesses.

d. The Power of Jurors to Question Witnesses

6. The Closing Argument

a. The Nature of the Argument

The arguments should be brief, concise, sincere, and easily understood, and they should emphasize the vital points of the case.


b. Proper Versus Improper Argument

A proper argument is one that follows from the facts of the case as supported by the evidence or inferences that properly can be drawn from the evidence. An argument is improper when it is based upon matters not in evidence, appeals to passion or racial or religious prejudice, contains references to the financial ability of the parties or includes remarks as to whether defendant is insured against the claimed liability, requests that the jurors treat the attorney's client as they would wish to be treated were they in the party's position, or distorts the evidence in order to arrive at unjustified inferences.

C. Taking the Case From the Jury


SECTION C. TAKING THE CASE FROM THE JURY - MOTIONS FOR JUDGMENT AS A MATTER OF LAW, [DIRECTED VERDICTS AND JUDGMENTS NOTWITHSTANDING THE VERDICT]

Rule 50 was amended to change the terms 'directed verdict" and "judgment notwithstanding the verdict" to read "judgment as a matter of law."

1. The Constitutional Issues

2. Standards for Motions for Judgment as a Matter of Law (Directed Verdict and Judgment Notwithstanding the Verdict)

3. The Motion for Judgment as a Matter of Law After the Verdict (J.N.O.V.)

Slocum v. New York Life Insurance Co. (1913) - Once the trial court has denied a defendant's directed verdict motion and allowed the case to go to the jury, the court could not order a judgment contrary to the jury verdict, but could only order a new trial.

Under Rule 50(b), even if a preverdict motion for judgment as a matter of law is denied, there is an automatic reservation of decision by the court.

Rule 50(b) permits a motion for judgment as a matter of law after the verdict only if a directed verdict was requested at the close of all the evidence.

Taylor Publishing Co. v. Jostens (2000) - Technical compliance with the terms of the Rule is excused when its purposes are satisfied.

Topic Lectures

Recorded Lecture:

Post-Trial Motions


1. New Trial Motion2. Directed-Verdict Motion3. Motion for Judgment Notwithstanding the Verdict

In an essay, analyze each of the three motions separately and completely.Directed-Verdict Motion and JNOV were modernly renamed to Motion for Judgment as a Matter of Law and the Renewed Motion for Judgment as a Matter of Law

New Trial Motion

Asked for by the loser of a verdict.The mission of the new trial motion is to see if something went wrong. If it did, and it is material, the judge exercises the discretion of the court to grant a new trial.

Grounds for new trial motion is when someone made an error during trial:1. when the judge admits or excludes evidence improperly, 2. the judge makes a material mistake in charging the jury,3. the attorneys make a mistake by saying something not allowed during trial,4. the attorney has ex parte communication with a juror,5. the jury makes a mistake by doing its own research,6. one of the jurors becomes an expert in a material subject area,7. the jury makes a quotient verdict (adds up everyone's suggestion and divides by 12),8. the jury renders an inconsistent verdict

The judge may also move for a new trial sua sponte if the verdict is grossly unjust.

Partial New Trial - Salvages the verdict on some issues by having a new trial only on distinct separable parts of the issues.

Conditional New Trial (Additur and Remittitur)

additur - add toremittitur - reduce down

The judge will deny a motion for a new trial if the non-moving party agrees to an adjustment in damages.Dinnick - Supreme Court has ruled that additur is unconstitutional in federal court.

Directed-Verdict Motion (Motion for Judgment as a Matter of Law)

Motion can come up at any point during the trial.A statement that upon review of the evidence, there is nothing that is jury-worthy.

Formulation is whether a reasonable person could find for the moving party.The judge rules based on the light most favorable to the non-moving party.


Directed-verdicts are a final judgment on a case.

Motion for Judgment Notwithstanding the Verdict (JNOV) (Renewed Motion for Judgment as a Matter of Law)

Made after the jury has rendered its verdict by the verdict loser.Based on a finding that no reasonable jury would have come up with that verdict.

Topic Hornbook

CHAPTER 12 - VERDICTS AND JUDGMENTS

A. Decisionmaking

§ 12.1 The Verdict: Its Entry and Form

The traditional and still most common form of verdict in jury trials is the general verdict, by which the jury finds for either plaintiff or defendant but does not disclose the grounds for the decision.

The Federal Rules allow two other verdict forms:1. Rule 49(a) authorizes a special verdict by which the court submits only a list of

factual issues to the jury and requests it to make findings. The judge then applies the law to these findings to enter the appropriate judgment.

2. Rule 49(b) authorizes a general verdict accompanied by written interrogatories by which the court instructs the jury to reach a general verdict, but also requests answers to one or more questions so that the basis for the verdict is disclosed.

The jury's findings on the questions or issues presented must be definite and unambiguous or the court may refuse to enter judgment on them.The individual findings should be consistent with each other.

Interrogatories are submitted to the jury at the same time as the genera-verdict form.

Federal Rule 49(b) - Three possible situations:1. If the answers and the verdict are harmonious, then judgment may be entered on

the verdict.2. If the answers are consistent among themselves, but one or more is inconsistent

with the general verdict, then the court may order a new trial, it may return both to the jury for further deliberation, or it may disregard the general verdict and enter judgment in accordance with the specific answers. Only when the answers and the general verdict conflict on a material issue and there is no chance for reconciliation may the specific answers prevail over the general verdict.

3. When the answers are inconsistent with each other and one or more also is inconsistent with the verdict, the court may not enter judgment, it either must request further deliberation by the jury or order a new trial.


The trial judge has discretion to withdraw certain interrogatories, even after the jury has retired, if they are unclear or ambiguous and only serve to confuse the jury.

§ 12.2 Findings and Conclusions in Nonjury Cases

Whenever an action is tried without a jury, FRCP 52(a) and similar state rules require the trial judge to make findings of fact and conclusions of law when entering judgment. This requirement applies:

1. when the court sits with an advisory jury,2. when the judge grants or refuses a request for interlocutory injunction,3. dismisses plaintiff's case on the merits at the close of plaintiff's presentation of

evidence, or4. grants a partial judgment on some of the claims in an action.

The requirement that the judge make special findings of fact and separate conclusions of law is mandatory, and may not be waived.The findings may be made orally.

Federal Rule 52(a) was amended to make clear that the judge may make findings of fact and conclusions of law orally in open court.

The trial judge should state the factual findings separately from the conclusions of law.Findings of fact should be clear, complete, and specific.The findings of fact must be sufficiently clear to provide an adequate basis for the trial court's decision.Findings of fact will not be reversed unless they are clearly erroneous.

B. Attacks on Verdicts and Judgments

§ 12.3 Directed Verdicts and Judgments Notwithstanding the Verdict (Judgments as a Matter of Law)

Directed-verdict motions may be made by either party at the close of their opponent's evidence. For the motion to be granted the court must find that there is insufficient evidence to go to the jury or that the evidence is so compelling that only one result could follow.

A JNOV motion may be viewed as a delayed directed-verdict motion because it is made after the verdict is rendered and seeks a judgment contrary to the verdict on the ground that there was insufficient evidence for the jury to find as it did.A 1991 amendment to the federal rule renamed the motion for a directed verdict and the motion for a judgment notwithstanding the verdict as motions for judgment as a matter of law and renewed motions for judgment as a matter of law respectively.

The primary use of these motions is when there is some overriding issue of law that would indicate the jury verdict is erroneous.


The United States Supreme Court has ruled that the use of a directed-verdict motion in the federal courts comports with the 7th Amendment.

A directed-verdict motion does not concede the opponent's right to a judgment if the standard for granting the motion is not met.

A JNOV motion can be granted only if a directed-verdict motion was made prior to submission of the case to the jury, so that the JNOV results from a renewed motion requesting the court to evaluate the sufficiency of the evidence.If the party fails to make a directed-verdict motion, a JNOV is not available.A post-trial motion for judgment can be granted only on grounds advanced in the earlier motion.Even if a directed-verdict motion was made, a JNOV motion typically cannot be entered sua sponte.

Two different formulations of the directed-verdict standard:1. scintilla test - the judge will deny the motion and refer the case to the jury if there

is any "a scintilla of" evidence on which the jury might possibly render a verdict for the nonmovant.

2. substantial-evidence test - the court will grant the motion unless there is sufficient or substantial evidence suggesting that the jury might decide for the nonmovant.

The general trend in the courts has been toward the use of the substantial-evidence test and increased court control.

When evaluating whether a particular movant has met the directed-verdict standard, the court may be influenced by whether the opposing party has the burden of proof as well as whether the opponent is in a position to present more evidence.

The judge must view the evidence in the light most favorable to the nonmoving party in order to determine whether there is sufficient evidence to raise a jury issue.

An assertion that credibility is at issue, resting alone, will not suffice to prevent the court from directing a verdict if all of the objective or indisputable evidence indicates that a particular piece of testimony is incredible.Uncontradicted, disinterested testimony may support the entry of a directed verdict because the jury should not be allowed to disbelieve the testimony.

The court may order a new trial, even if the party seeking a JNOV has not requested a new trial in the alternative.If the judge grants a JNOV, the party against whom it is rendered then may move for a new trial instead.

In a final-judgment-rule jurisdiction, such as the federal courts, the grant of either motion results in the entry of a judgment and may be appealed immediately.


When a directed verdict is denied, however, that decision is interlocutory and appeal must wait until a judgment on the merits is reached.

If a new-trial motion is granted, but only as an alternative to the grant of a JNOV motion, then both rulings may be appealed immediately. If a new trial is granted and the JNOV motion is denied, then the case must proceed to a new trial, and the denial of the JNOV cannot be reviewed until after the new trial has concluded.

§ 12.4 Motions for New Trial

The discretion granted to the court is exceedingly broad.Most procedural rules have rigid timing restrictions in which new-trial motions must be made - typically 10 days after judgment has been entered.Failure to move within the period is fatal.Most procedural rules also authorize the court to order a new trial sua sponte, at least within that same time period.

A new trial may be granted even though the insufficiency of the evidence falls short of that required to support a directed verdict or JNOV motion.The grant of a new trial because of the insufficiency of the evidence does not violate jury-trial rights.

The court may determine whether the errors that occurred may be cured by ordering only a partial new trial.Partial new trials are used most commonly when the tainted issues relate solely to damages, so that a new trial limited to damages is appropriate.

Condition new trial - The court states that it will grant the new-trial motion unless the opposing party agrees to accept a specified reduction or increase in the verdict.

Remittitur - the power to reduce damagesAdditur - the power to increase damages

The use of remittitur must be coupled with the option of a new trial in order to comply with the 7th Amendment.

Dimick v. Schiedt - ruled that the use of additur in the federal courts violates the 7th Amendment.

The standard to be applied in determining what amount should be remitted or added has three general formulations.The judge may set the amount at:

1. the legally sufficient minimum the jury could have awarded;2. the maximum that would have been permitted; or3. a figure somewhere between these two extremes reflecting what the judge

believes the evidence justifies.


Appellate courts will reverse a new-trial ruling only for an abuse of discretion.The appellate court also uses an abuse-of-discretion standard to review the denial of a new-trial motion.

Gasperini v. Center for Humanities, Inc. - The Court ruled that the trial court could apply state-law standards to determine what was excessive, but that the appellate court when reviewing its denial of a new trial was confined to an abuse-of-discretion standard.Appellate review, limited to abuse of discretion, was consistent with the 7th Amendment's re-examination clause as a control necessary and proper to the fair administration of justice.

§ 12.5 Juror Misconduct and Impeachment of the Verdict

Juror misconduct:1. when a juror fails to answer truthfully one of the questions asked during voir dire,2. when jury members engage in unauthorized conversations about the case with

others,3. when they consider evidence obtained outside the courtroom.

A new trial may be warranted if the court determines that the information or conversations were prejudicial.

Mansfield Rule - No juror may testify as to what occurred during the jury deliberations.Juror affidavits as to what occurred during the deliberations may not be used to attack their verdict.

If a third party observed some conduct that was in violation of their charge, then that evidence may be used.

Most jurisdictions now allow information from jurors to be introduced, but with significant restrictions.Juror affidavits may be used to testify as to "overt acts" or independent facts involving jury members that may have been prejudicial.

Federal Evidence Rule 606(b) governs what juror testimony may be introduced to impeach a jury verdict.No testimony may be used that relates to any matter or statement made during the deliberations, to the effect of anything on any juror's mind or emotions, or concerning the juror's mental processes.A juror may testify on the question whether extraneous prejudicial information was improperly brought to the jury's attention or whether any outside influence was improperly brought to bear upon any juror.

Galloway v. United States , 319 U.S. 372, Supreme Court of the United


States, Mr. Justice Rutledge, 1943

Case Brief

FACTS:

ISSUE:

Whether taking a case away from a jury on the ground that a plaintiff had not met its burden of production at trial was a violation of the 7th Amendment right to a trial by jury.

RULE:

APPLICATION:

The Amendment was designed to preserve the basic institution of jury trial in only its most fundamental elements, not the great mass of procedural forms and details, varying even then so widely among common-law jurisdictions.

CONCLUSION:

Mere speculation be not allowed to do duty for probative facts, after making due allowance for all reasonably possible inferences favoring the party whose case is attacked.

Denman v. Spain , 135 So.2d 195, Mississippi, Supreme Court of Mississippi, Lee, Presiding Justice, 1961

Case Brief

FACTS:

Betty Denman, a minor, sued the executrix of the estate of Ross, deceased, to recover damages for personal injuries sustained by her, allegedly resulting from the negligence of the decedent in the operation of an automobile. The issue was submitted to a jury on the evidence for the plaintiff- no evidence being offered for the defendant - and there was a verdict and judgment for the plaintiff. On motion of the defendant, a judgment non obstante veredicto was sustained and entered.

ISSUE:

Whether the evidence offered by her was sufficient to make an issue for the jury as to whether the alleged negligence of the deceased driver proximately caused or contributed to the collision and the consequent damage.

RULE:


Verdicts cannot be based on possibilities.

APPLICATION:

No proof was offered as to skid marks, or other evidence to show the point of contact between these two vehicles. Photographs depict no reasonable or plausible explanation as to why this collision occurred, or who was responsible for it.

CONCLUSION:

The burden was on the plaintiff to prove by a preponderance of the evidence, not only that the operator of the Plymouth was guilty of negligence but also that such negligence proximately caused or contributed to the collision and consequent damage.There is no sound or reasonable basis upon which a jury or this Court can say that the plaintiff met that burden.

Rogers v. Missouri Pacific R. Co. , 352 U.S. 500, Supreme Court of the United States, Mr. Justice Brennan, 1957

Case Brief

FACTS:

A jury awarded damages to the petitioner in this action under FELA. The Supreme Court of Missouri reversed upon the ground that the petitioner's evidence did not support the finding of respondent's liability.Petitioner was a laborer in a section gang along a portion of respondent's double-track line.Petitioner's foreman assigned him to burn off the weeds and vegetation - the first time he was given that task.Petitioner testified, without contradiction, that the foreman instructed him and other members of the section gang to stop what they were doing when a train passed.Petitioner heard the whistle of a train which was approaching. He promptly "quit firing". The passing train had fanned the flames of the burning vegetation and weeds, carrying the fire to the vegetation around his position. He slipped and fell from the top of the culvert, suffering the serious injuries for which he sought damages in this suit.

ISSUE:

RULE:

The statute expressly imposes liability upon the employer to pay damages for injury or death due "in whole or in part" to its negligence.


APPLICATION:

We think that the evidence was sufficient to support the jury finding for the petitioner.These were probative facts from which the jury could find that respondent was or should have been aware of conditions which created a likelihood that petitioner, in performing the duties required of him, would suffer just such an injury as he did.When the petitioner agreed that his primary duty was to watch the fire he did not also say that he was relieved of the duty to stop to watch a passing train for hotboxes. No witness testified that the instruction was countermanded.The test of a jury case is simply whether the proofs justify with reason the conclusion that employer negligence played any part, even the slightest, in producing the injury or death for which damages are sought.

CONCLUSION:

The issues whether there was employer fault and whether that fault played any part in the injury or death of the employee should be decided by the jury whenever fair-minded men could reach these conclusions on the evidence.

Daniel J. Hartwig Asssociates, Inc. v. Kanner , 913 F.2d 1213, 7th Circuit, Untied States Court of Appeals, Seventh Circuit, Kanne, Circuit Judge, 1990

Case Brief

FACTS:

Hartwig is an environmental consulting firm that rendered consulting and expert witness services to Kanner, an attorney whose practice is limited to environmental and toxic injury litigation. After Kanner failed to pay Hartwig for its services, Hartwig filed a breach of contract suit in federal district court. The district court directed a verdict in favor of Hartwig.Hartwig agreed to perform consulting and expert witness services for Kanner at an hourly rate plus reimbursement for expenses.Hartwig informed Kanner of the fee schedule and the billing rates in writing. As services were rendered, Hartwig prepared and submitted invoices to Kanner. After Kanner failed to pay several invoices, Hartwig and a number of his employees contacted members of Kanner's staff to inquire about past due payments. Kanner's staff explained that Kanner simply did not have the money to pay the bills but that they would be paid as soon as possible.Kanner executed three promissory notes, one for each lawsuit in which Hartwig had provided services.Kanner never paid Hartwig for his services.Kanner chose not to appear in the district court. His counsel appeared but in his case in chief, he presented no witnesses and offered only a single document into evidence.

ISSUE:


RULE:

A motion for a directed verdict raises only a question of law.In determining whether a directed verdict should be granted, the evidence is viewed in the light most favorable to the party against whom the motion is made. A court should direct a verdict only if there is no credible evidence to sustain a verdict in favor of the party against whom the motion was made.Misrepresentation alone does not amount to a defense.A defendant who seeks to render a contract voidable due to fraudulent misrepresentation must prove the following elements:1. a material misrepresentation;2. reliance on the misrepresentation; and3. injury or damage due to reliance on the misrepresentation.The party alleging fraud has the burden of proving the elements by clear and convincing evidence.

APPLICATION:

Kanner's only defense to Hartwig's contract action is based on a claim that Hartwig misrepresented his educational background in his resume and that Hartwig did not inform Kanner of the conflict of interest between Hartwig's two companies. At trial, Hartwig testified that he told Kanner about inaccuracies in his resume; in addition, Hartwig testified that he told Kanner about the relationship between his two companies and truthfully represented to Kanner that his ownership of both companies did not create a conflict of interest. Kanner presented no evidence at trial to rebut Hartwig's testimony.Kanner failed to submit the necessary evidence to support a verdict contrary to that sought by Hartwig.Kanner failed to present any evidence demonstrating that he relied on Hartwig's misrepresentations.Kanner failed to present any evidence that demonstrated how he was damaged by the misrepresentation.

CONCLUSION:

The amount sought to be recovered was not in dispute. Kanner's indebtedness was plainly evidenced by promissory notes executed by Kanner. Kanner never complained about the quality of Hartwig's work or raised anny issue of being misled or damaged by Hartwig's credentials. The only reason Kanner ever gave for failing to pay Hartwig was a lack of funds.Kanner simply failed to present any evidence of reliance on Hartwig's misrepresentations of a causal link between the misrepresentations and a loss he suffered.The district court did not err in directing a verdict in favor of Hartwig.



E. Challenging Errors - New Trial

1. The Nature and the Scope of the Power to Grant a New Trial

Note on The Range of the Trial Court's Discretion

Case Brief

Errors committed during the course of a trial:1. those that would result in reversal if the case were to be appealed;2. those that may have had an impact on the verdict, but do not justify reversal of the

case on appeal; and3. those that did not significantly affect the outcome.

In many jurisdictions, the grant of a new trial, not being a final judgment, cannot be appealed.

In some jurisdictions the trial judge may grant a new trial without specifying or without actually relying on any precise grounds.

2. Incoherent Jury Verdicts


Very few jurisdictions today require jurors to remain together constantly once the case has been submitted to them.Before allowing the jurors to separate, however, the court normally will warn them not to discuss the case with anyone outside the jury room and not to inspect sites referred to in the testimony or otherwise to obtain evidence.

Magnani v. Tragi

Case Brief

FACTS:

Plaintiff seeks recovery as Administratix, for the wrongful death of her decedent, pursuant to the Wrongful Death Act. She seeks reimbursement, in her individual capacity, for medical and funeral expenses necessarily incurred by her as the result of the injury and death to her husband, pursuant to the Family Expense Statute.The trial judge concluded that the verdict must be set aside and a new trial ordered as to both the liability and damage aspects of the case.

ISSUE:

Whether the trial judge, when faced with this situation, abused his discretion by granting a new trial.


RULE:

The Wrongful Death Act provides that any recovery thereunder shall be distributed by the court in which the cause was heard to the widow and next of kin of the decedent, in proportion, as determined by the TC, that the percentage of dependency of each such person upon the deceased person bears to the sum of the percentages of dependency of all such persons upon the deceased person.The purpose of vesting the trial judge with power to grant a new trial is to permit him, before losing jurisdiction of the case, to correct errors that he or the jury might have made during the course of the trial.

APPLICATION:

Neither party to this suit tendered separate forms of verdict for each of these counts. Rather, a single form of verdict was submitted by the court to the jury without objection from plaintiff or defendant.Because of the single form of verdict, the jury's determination of liability and damages on each of the two causes of action was not made known.Language of the verdict returned gives no indication of the jury's determination as to what portion of the total verdict it attributed to damages for wrongful death, and what portion, if any, to damages for medical and funeral expenses.It was impossible for the court to re-assemble the jury and instruct them to correct the error in the form of verdict.In the situation presented here it was not an abuse of discretion for the trial judge to grant a new trial.

CONCLUSION:

The order of granting defendant's motion for new trial, vacating and setting aside the verdict and judgment, and denying defendant's motion for judgment notwithstanding the verdict, is affirmed.

Robb v. John C.Hickey, Inc.

Case Brief

FACTS:

The issues presented by the pleadings were the negligence of the defendants and the contributory negligence of the plaintiff's decedent. The jury was instructed concerning the applicable principles of law, in the course of which it was pointed out that if contributory negligence upon the part of the plaintiff's decedent had been established, the comparative degrees of the negligence of the parties was immaterial.The jury returned a verdict in the absence of the judge which stated that "the evidence shown is that the defendant was more negligent than the plaintiff."


Both parties are dissatisfied with the verdict.

ISSUE:

RULE:

APPLICATION:

The verdict finds both parties guilty of negligence, erroneously compares the degrees of their negligence and recommends an award in favor of the plaintiff and against both defendants.The recommendation of an award to the plaintiff is pertinent to the issues, for basically the liability of defendants to plaintiff in damages was in question. It cannot be treated as surplusage and disregarded. Reading the verdict as a whole, it is self-contradictory, inconsistent and ambiguous. One is left to conjecture and surmise as to the real purpose of the jury. It is defective in substance, not merely in form.

CONCLUSION:

This leads to the denial of defendants' motion to mould and is also dispositive of the plaintiff's rule. The latter will be made absolute and a new trial granted.

3. Jury Misconduct and the Integrity of the Verdict


Jurors' affidavits cannot be utilized to attach the verdict.

Rule 606(b) of the Federal Rules of Evidence provides:

Inquiry into validity of verdict or indictment. Upon an inquiry into the validity of a verdict or indictment, a juror may not testify as to any matter of statement occurring during the course of the jury's deliberations or to the effect of anything upon his or any other juror's mind or emotions as influencing him to assent to or dissent from the verdict or indictment or concerning his mental processes in connection therewith, except that a juror may testify on the question whether extraneous prejudicial information was improperly brought to the jury's attention or whether any outside influence was improperly brought to bear upon any juror. Nor may his affidavit or evidence of any statement by him concerning a matter about which he would be precluded from testifying be received for these purposes.

McDonough Power Equipment, Inc. v. Greenwood (1984) - To obtain a new trial, a party must first demonstrate that a juror failed to answer honestly a material question on voir dire, and then further show that a correct response would have provided a valid basis for challenge for cause.For a court to determine properly whether bias exists, it must consider at least two


questions:1. are there any facts in the case suggesting that bias should be conclusively

presumed; and2. if not, is it more probable than not that the juror was actually biased against the

litigant.

Hukle v. Kimble

Case Brief

FACTS:

This was an action for damages alleged to have been sustained when plaintiff was caught between a truck driven by one of defendants and a pillar in the driveway of an elevator where plaintiff was employed.

ISSUE:

Whether the TC erred in overruling defendants' motion for a new trial.

RULE:

APPLICATION:

Plaintiff claims that on cross-examination these jurors testified that they were asked after the quotient had been reached whether they believed the amount to be fair and all the jury members said it was. The evidence is uncontradicted.The jury members all agreed that the quotient would be the verdict and it was.

CONCLUSION:

The result is the TC erred in overruling the defendant's motion for a new trial.

4. New Trial Because the Verdict Is Against the Weight of the Evidence


In passing on a motion for a directed verdict, the trial judge always must utterly disregard his own views of witnesses' credibility, and therefore of their demeanor; that he believes or disbelieves some of the testimony is irrelevant.

Aetna Casualty & Surety Co. v. Yeatts


Case Brief

FACTS:

The indemnity insurance company denied liability on the ground that the defendant Yeatts was engaged in the performance of a criminal abortion at the time he incurred the liability for which the recovery was had against him, and that such liability was expressly excluded from the coverage of the policy.The jury brought verdict and judgment in his favor.

ISSUE:

RULE:

Rule 59 states that on such a motion it is the duty of the judge to set aside the verdict and grant a new trial, if he is of opinion that the verdict is against the clear weight of the evidence, or is based upon evidence which is false, or will result in a miscarriage of justice, even though there may be substantial evidence which would prevent the direction of a verdict.Where there is substantial evidence in support of plaintiff's case, the judge may not direct a verdict against him, even though he may not believe his evidence or may think that the weight of the evidence is on the other side; for, under the constitutional guarantee of trial by jury, it is for the jury to weigh the evidence and pass upon its credibility. He may, however, set aside a verdict supported by substantial evidence where in his opinion it is contrary to the clear weight of the evidence, or is based upon evidence which is false; for, even though the evidence be sufficient to preclude the direction of a verdict, it is still his duty to exercise his power over the proceedings before him to prevent a miscarriage of justice.The granting or refusing of a new trial is a matter resting in the sound discretion of the trial judge. His action thereon is not reviewable upon appeal, save in the most exceptional circumstances.

APPLICATION:

The defendant himself was examined as a witness and, if his testimony is believed, he was guilty of no criminal act. No motion for directed verdict was made by the plaintiff, nor was the sufficiency of the evidence to sustain a finding in favor of the defendant challenged in any other way before verdict.Even if a motion for directed verdict had been made by plaintiff, it is clear that same should have been denied as should also, any motion for JNOV.

CONCLUSION:

While an examination of the record has led us to the conclusion that the trial judge might very properly have granted the motion for new trial, we cannot say that his denial of the motion amounted to an abuse of discretion on his part or that there are present any of the special circumstances which would subject his action to review by this court. The


judgment appealed from will accordingly be affirmed.

5. The Power to Grant Conditional and Partial New Trials

Fisch v. Manger

Case Brief

FACTS:

The plaintiff suffered serious injuries in an automobile accident and, after trial, received a jury verdict in the sum of $3,000. He applied for a new trial because of the inadequacy of the verdict but his application was denied when the defendants consented that the damages awarded to the plaintiff be increased in the sum of $7,500.The plaintiff's actual expenditures to doctors and nurses and for drugs and hospitalization exceeded $2,200. And although he received most of his normal earnings despite his temporary incapacity, there was a loss of wages approximating $620. While the jury's verdict of $3,000 just about took care of the plaintiff's actual monetary losses, it awarded substantially nothing for his suffering and permanent injuries.

ISSUE:

Whether the highly desirable practices of remittitur and additur may be adhered to in our State.

RULE:

The term remittitur is used to describe an order denying the defendant's application for new trial on condition that the plaintiff consent to a specified reduction in the jury's award, whereas the term additur is used to describe an order denying the plaintiff's application for a new trial on condition that the defendant consent to a specified increase in the jury's award.Dimick v. Schiedt - although remittitur is permissible in the federal courts, additur is prohibited by the 7th Amendment.

APPLICATION:

Much has appeared in the law reviews in support of the practices of remittitur and additur as enlightened aids in securing substantial justice between the parties without the burdensome costs, delays and harassment of new trials.In the instant matter, we believe that the trial judge had a mistaken notion of the evidence which led to his prescribing the scanty sum of $7,500.

CONCLUSION:

We are satisfied that the practices of remittitur and additur violate none of our


constitutional interdictions and, if fairly invoked, serve the laudable purpose of avoiding a further trial where substantial justice may be attained on the basis of the original trial.We believe that the TC's action should not be permitted to stand and that the interests of justice will best be served by permitting a second jury to pass on the issue of damages. The separable issue of liability was clearly and properly decided against the defendants; under the evidence it could hardly have been determined otherwise and need not be submitted for redetermination.

Doutre v. Niec

Case Brief

FACTS:

Defendants operate a beauty shop in Flint. Plaintiff was given a bleach and color treatment by defendants without a pretreatment patch test. Plaintiff received head and facial injuries as a result of the treatment and sued for damages.During the trial defendants were not allowed to testify as to the standard of care observed by beauty shops in the Flint area when administering such treatment. The jury awarded plaintiff $10,000. Defendants filed a motion for a new trial. Such motion was granted and a new trial orderd but limited to the question of liability.

ISSUE:

RULE:

APPLICATION:

The record shows that defendants had bene in the business for years. They had attended conventions of beauticians and observed their practices and aid they abreast of the practices of other beauticians.We agree with the TC's last ruling that these witnesses should have been allowed to testify and that to exclude their testimony was error requiring a new trial. Such testimony is admissible because no one is held to a higher standard of care than the average in the industry.Despite the court rule authorizing it, limited new trials are not favored.No compelling reason moves us to extend the rule.In the case before us the damages are not liquidated and the liability was determined pursuant to a trial in which an admitted error touching on liability was committed.

CONCLUSION:

Under these circumstances it seems to us that justice requires that the jury which determines the liability or lack of it should have the responsibility for measuring any


damages.The TC's order for a new trial shall be extended to all of the issues.

6. Timeliness of Requests for New Trial


Under Rule 6(b) the TC may not extend the time for taking any action under rules 50(b), 59(b) and others. If the motion for a new trial is untimely, the TC has no choice but to deny the motion.

Under Federal Rule 7(b) a motion in the federal courts normally must be in writing and state the grounds on which it is based.

Rule 59(d) provides that a court may order a new trial on its own initiative, but again, there is a ten-day limit.

7. The Power to Set Aside a Judgment on Grounds Discovered After it Was Render


Topic Hornbook

§ 12.6 Motions to Alter the Judgment or for Relief From the Judgment

The entry of the judgment marks the final act in the trial-court adjudication of a dispute. Errors in the judgment that are the result of clerical mistakes or some omission or oversight when the judgment was entered may be corrected by a motion to correct or alter the judgment. This can be done by any of the parties or by the court sua sponte.

The alteration of a judgment because of the omission of some element is limited to 10 days.

Attempts to reopen the judgment or to alter it for some nontechnical reason or outside the time period provided must be made by a motion for a new trial or by appeal.

Four different methods that may be available for seeking relief from a judgment in the trial court:1. special statutes may authorize specific procedures for seeking relief from certain types of judgments.2. contemporary rules usually provide that a party may make a motion in the original trial court for relief based on certain listed grounds.3. a party may be allowed to bring an independent action challenging a judgment on


grounds recognized historically in equity.4. a party may file an application to set a judgment aside for fraud, appealing to the inherent equity powers of the court.

An independent action may be brought in a court other than the judgment-rendering court, but a motion for relief from the judgment cannot.

An application to set aside the judgment for fraud generally can be used only when there has been a "fraud upon the court," not merely fraud between the parties.

Simply perjury generally does not constitute fraud upon the court, although attempts to bribe the judge do.

Federal Rule 60(b) - governs relief from judgments in the federal courts.

Six grounds for relief (three categories):

1. Grounds that cannot be raised more than one year after judgment has been entered.

Within one year a party can seek relief on the ground that judgment was entered on the basis of some mistake, inadvertence or excusable neglect, or that there is newly discovered evidence, or on the basis of fraud.Relief is allowed on the basis of mistake, inadvertence, or neglect only when it appears to be reasonable under the circumstances and is not the result of gross negligence on the part of the moving party or the party's lawyer.Federal Rule 60(b)(2) - authorizes relief on grounds of newly discovered evidence. A party seeking to rely on this provision must show that the evidence and the fact to which it relates were in existence at the time of the trial, and that the party was unable to discover them at that time despite the exercise of due diligence in preparing the case. Further, the evidence must be of such a nature that it is likely to produce a different result if the judgment is reopened and a new trial ordered.To make a successful motion for relief because of fraud, the movant must establish the existence of the fraud by clear and convincing evidence; a mere suspicion or allegation of fraud is not sufficient.Historically, relief was granted solely for extrinsic, as opposed to intrinsic, fraud. The federal rule abandons this restriction and authorizes relief for both.Intrinsic fraud is that which occurs in court during trial.Extrinsic fraud involves some act of the opposing party that prevented the movant from discovering some evidence or otherwise form making some claim or defense.

2. Grounds that must be raised within a "reasonable time."

Bases for relief are that the judgment is void, or that it has been satisfied, or that the law on which the court relied has been reversed, or, if an injunction is involved, that a change in circumstances makes it no longer equitable to enforce it.A judgment can be challenged as void only on grounds of lack of jurisdiction or for some


failure of due process in the original proceeding. Erroneous judgments are not void, even when based on constitutional statutes. Relief will be allowed because of a change in the law only when the trial court clearly and specifically relief on some precedent that was overturned.

3. Grounds where there is a need to seek relief within a reasonable time.

These grounds cover any other reason justifying relief from the operation of the judgment.Relief from a default judgment will be denied only when it is clear the defendant has no defense to the action or when the defendant has delayed so long that the plaintiff would be prejudiced by being required to go to trial.

The standard of extraordinary circumstances begins with a presumption that the judgment is not to be opened easily, but only when undue hardship would occur and the demands of equity and justice require it.

If a party succeeds in obtaining relief, the judgment is opened and a new trial ordered. Hence, there can be no immediate appeal in jurisdictions following the final-judgment rule, as the ruling is interlocutory.

The general rule is that once appeal is taken, the trial court loses jurisdiction.

A. Mistake and Excusable Neglect


A motion under Rule 60(b) could not be utilized to cure a failure to comply with court rules.

B. Newly Discovered Evidence; Fraud


A motion for new trial on the grounds of newly discovered evidence must meet the following requirements before it can be granted:1. must be such as would probably change the result on a new trial;2. must have been discovered since the trial;3. must be of such a nature that it could not have been discovered before trial by due diligence;4. must be material;5. must not be merely cumulative or impeaching.

For any evidence to come within the category of "newly discovered" such evidence must relate to facts which were in existence at the time of the trial.


extrinsic fraud - that which prevents a litigant from making a claim or defense.intrinsic fraud - that which the trial itself is designed to discover.

Peacock Records, Inc. v. Checker Records, Inc. (1966) - Where it appears that perjured testimony may have played some part in influencing the court to render a judgment, the perjury will not be weighed, on a motion to set aside the judgment.

C. The Independent Action to Obtain Relief from a Prior Judgment


Federal Rule 60(b) expressly preserves the right of the TC to entertain an independent action to relieve a party from a prior judgment.

XVI. Chapter 16. Appellate Review

A. The Principle of Finality


Class Chat:

Final Judgment Rule

Appeals are allowed only after all the issues involved in a particular lawsuit have been finally determined by the trial court on the merits.

Three exceptions:

1. collateral order doctrine2. immediate harm is postponed3. statutory exceptions

Topic Hornbook

CHAPTER 13 - APPEALS

A. Appealability

§ 13.1 The Timing of Appeals - The Final-Judgment Rule

final judgment rule - Appeals are allowed only after all the issues involved in a particular lawsuit have been finally determined by the TC.

final judgment - an order that ends the litigation on the merits and leaves nothing for the


court to do but execute the judgment.

Interlocutory orders ultimately are reviewable, but not immediately appealable.

Federal Rule 54(b) - A trial judge in an action with multiple claims or parties may identify as appealable a particular order issued with respect to a claim or party by making an express direction for the entry of a judgment as to the claim or party involved and by certifying that there is no just reason to delay an appeal. In the absence of this trial-court certification, no appeal will lie.

"death-knell" doctrine - The individual claims of class members were too small to justify continued litigation and the suit would go forward only if a class action could be maintained.

inverse-death-knell doctrine - To deny immediate review and cause them to litigate the action as a class suit would be extremely burdensome and costly, particularly since, if certification were erroneous, plaintiffs would not as a practical matter be able to sue at all.

§ 13.2 Judicial Exceptions to the Final-Judgment Rule

collateral-order doctrine - The trial court's decision must determine a matter collateral to the rights underlying the action and one that is too important to be denied review.

Class-certification orders cannot be appealed under the collateral-order doctrine.

The court must be able to find that there could be no effective review of the order after a final judgment is entered.

The second judicially-developed exception to the final-judgment rule involves cases is which there is some immediate harm that might occur to the appellant if review is postponed. This will occur only when the trial court's determination is such that it necessarily requires some immediate act or conduct by the parties that will be irremediable should later review suggest that it was improperly ordered.

§ 13.3 Statutory Exceptions to the Final-Judgment Rule

1. Very precise statutes specifying particular orders for interlocutory appeal.

2. Section 1292(b) of the United States Code.

The party seeking review must obtain certification from both the district judge and the appellate court. Both courts must agree that:a. the order involves a controlling question of law,b. there is substantial ground for difference of opinion with regard to the issue presented,


andc. an immediate appeal from the order may materially advance the ultimate termination of the litigation.

Appeals under Section 1292(b) are subject to the discretion of the courts.

3. Applications to the appellate court for writs of mandamus or prohibition to reverse some intermediate trial-court ruling.

extraordinary writ power - exists to aid appellate-court jurisdiction by allowing the court to confine trial judges to the lawful exercise of their jurisdiction or to compel them to act if they have abdicated their jurisdictional obligations. The writs issue only to enforce a clear legal duty.The writ is available only when the issue on which mandamus is sought is one that goes to the jurisdiction of the court.

B. Claim and Defense Preclusion


Live Chat:

Res Judicata

Claim preclusion. A person is not going to be subjected to the same claim twice. Prevents a party from suing on a claim that has already been decided, and prevents a defendant from raising new defenses.

Criteria:1. must be a valid final judgment2. must be on the merits3. the claims have to be the same in the first and second lawsuit

merger - If the plaintiff is successful, the judgment merges into any future claim on the same cause of action from that plaintiff.

bar - If a plaintiff is unsuccessful, they are barred from re-litigating.

Matthews case - Defined a "claim" as a group of facts limited to a single occurrence or transaction without particular reference to the resulting legal rights.

privity - Connection / relationship between two parties, each having a legally recognized interest is the same subject matter.

transaction or occurrence test - Claims extinguished by a first judgement shall include "all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction -- or series of connected transactions -- out of which the action arose."


Application to Defenses

Defendant is precluded from raising any defenses that could have been litigated at the previous trial. May often arise when the judgment is enforced.

C. Issue Preclusion


Live Chat:

Collateral Estoppel

Parties are precluded from contesting matters that have had a full and fair opportunity to be litigated

Criteria:1. the claims have to be the same in the first and second lawsuit2. the issue must have been fully and fairly litigated on the merits3. actually decided4. necessary for judgment

The issue must be based on the same facts and same law to be the same issue.The matter must be identical in all respects.

Generally, default judgments are not a basis for collateral estoppel.

mutuality - Only parties or persons in privity can take advantage of collateral estoppel.


XVI. Chapter 16. Appellate Review

B. Reviewability

§ 13.4 The Nature and Scope of Review

Any error that is raised on appeal must appear clearly in the trial-court record and the aggrieved party must have objected promptly to the allegedly erroneous ruling in the TC.

Errors that are not objected to or arguments that are not raised at trial generally cannot be raised for the first time on appeal.

Winning parties may not obtain review of findings deemed erroneous if those findings are not necessary to the decree. Only parties aggrieved or harmed by the judgment can


appeal from it.

If the losing party appeals, the winning party may respond by raising any issue that would sustain the judgment, even if it is not one that was clearly decided in the record.

The appellate court cannot act as a trial court and receive new evidence concerning the facts. However, it can address new theories or legal arguments regarding the law applicable to the facts. But new theories may be addressed only if they can be determined on the facts established at trial.

The winning party at trial, as appellee, is limited to raising issues that support the judgment, unless the party files a cross-appeal.

Only those issues that are presented in the parties' briefs and the relevant portion of the TC record that is brought to the appellate court's attention will be reviewed.

The appellate court will decide questions of law de novo.

On an appeal from a summary judgment the appellate court will decide de novo whether the summary-judgment standard was met.

Federal Rule 52(a) - the judge must make findings of fact and further, that those findings are to be overturned only if they are "clearly erroneous."

A finding is "clearly erroneous" when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.

Mixed fact-law questions are subject to the same full review as are pure questions of law.

The clearly-erroneous review standard applies to all questions of fact, not solely to questions of ultimate fact, and thus it is not necessary to inquire into fine pleading distinctions to determine the proper review standard.

Any rulings that are within the discretion of the trial judge will be reviewed under an abuse-of-discretion standard.Only if an appellate court is convinced that the court was clearly wrong will it reverse a discretionary decision.

1. Issues Subject to Review


Limits on the scope of appellate review:1. the alleged errors must appear in the TC record2. an aggrieved party must have promptly objected to the TC regarding rulings or

events that the judge could have corrected or ameliorated.


3. it must not constitute "harmless error" - it must have affected substantial rights.4. an alleged error must be presented to the appellate court in appellant's brief and

the relevant portions of the TC record must be brought to the appellate court's attention.

Under Rule 609b), a party may ask a district court to reopen a judgment on the basis of newly discovered facts.

California's exception to the general standard of review - if a party has presented undisputed facts or facts necessarily determined at trial for that party which facts sustain a claim or defense on a theory not argued at trial, the appellate court can make its determination on the basis of the newly raised theory.

It is only when a finding of law or fact is not necessary for a decree that the prevailing party may not appeal and the finding does not form the basis for collateral estoppel.

Outside of the cross-appeal situation, the failure of a coparty to be named as a coappellant ahs been considered a matter of jurisdiction and the unnamed party cannot take advantage if the appeal is successful.

Rule 3(c) requires among other things, that the notice name each appellant or otherwise make clear just who is appealing. The Rule does not require that the appellees be designated.

Any document providing the notice required by Rule 3, even though not formally a Notice of Appeal, will be considered an effective notice of appeal.

J.F. White Contracting Co. v. New England Tank Industries of New Hampshire, Inc.

Case Brief

FACTS:

This appeal concerns a contract to build oil tanker dock facilities. Appellant agreed to build the dock. Appellee, owner of the premises, sues for defective workmanship.

ISSUE:

RULE:

APPLICATION:

Appellant contends that recovery is barred by a contract provision which stipulated that approval of invoices by Tank's engineer was final, conclusive, and binding on both parties. Without saying what effect we would give to such a provision under the factual


circumstances of this case, we merely observe that we cannot consider this issue on appeal since appellant neither pleaded it as an affirmative defense nor had it raised, considered, nor passed upon in the district court.While the court's action in submitting the "out-of-roundness" issue to the jury was error, we are not persuaded that there was even a remote possibility that this error affected the verdict or the substantial rights of the parties.

CONCLUSION:

The court's instructions in damages were proper and emphasized that only evidence of value, which included evidence of cost of repairs, could be considered. There is no reason to suspect that the jury did not follow these instructions.

Electrical Fittings Corp. v. Thomas & Betts Co.

Case Brief

FACTS:

This was a suit in equity by the respondents for alleged infringement of a patent. The District Court held claim 1 valid but no infringed and claim 2 invalid. Instead of dismissing the bill without more, it entered a decree adjudging claim 1 valid but dismissing the bill for failure to prove infringement.The respondents did not appeal, but filed in the Patent Office a disclaimer of claim 2.

ISSUE:

RULE:

A party may not appeal from a judgment or decree in his favor, for the purpose of obtaining a review of findings he deems erroneous which are not necessary to support the decree.

APPLICATION:

The decree itself purports to the disposition of the cause, it stands as an adjudication of one of the issues litigated.

CONCLUSION:

We think the petitioners were entitled to have this portion of the decree eliminated, and that the Circuit Court of Appeals had jurisdiction to entertain the appeal, not for the purpose of passing on the merits, but to direct the reformation of the decree.

International Ore & Fertilizer Corp. v. SGS Control services, Inc.


Case Brief

FACTS:

Defendant agreed to transport a cargo of fertilizer for plaintiff to a buyer in new Zealand. Defendant's ship had not been sufficiently cleaned with the result that the cargo was contaminated and the purchaser refused delivery, resulting in damages to plaintiff. Plaintiff sued defendant both for breach of contract and for negligent misrepresentation of the condition of its ship. After evidence was presented, the trial judge rejected the contract claim, but upheld the claim of negligent misrepresentation and awarded damages. Defendant appealed. The appellate court held that the negligent misrepresentation claim should have been dismissed and determined that the contract claim, which would have justified a larger damage award to plaintiff, should have been upheld.

ISSUE:

RULE:

The general rule in a case in which a party fails to cross-appeal from a final decree of the TC is that that party cannot be heard in opposition thereto when the case is brought here by the appeal of the adverse party. The appellee may not attack the decree with a view either to enlarging his own rights thereunder or of lessening the rights of his adversary, whether what he seeks is to correct an error or to supplement the decree with respect to a matter not dealt with below. The appellee may, without taking a cross-appeal, urge in support of a decree any matter appearing in the record.The appellee may seek to sustain a judgment on any grounds with support in the record.Although an appellee who has not cross-appealed may urge alternative grounds for affirmance, it may not seek to enlarge its rights under the judgment by enlarging the amount of damages or scope of equitable relief.

APPLICATION:

We do not believe that given the present procedural circumstances, plaintiff is entitled to its full damages.

CONCLUSION:

We may therefore uphold the present judgment but we may not enlarge it to award plaintiff its full contract damages.

2. Scope of Review of Facts

A. The Power to Order a New Trial in a Case Decided by a Jury



The power to reverse denials of new trials on the ground that the verdict is excessive or to condition affirmance upon a remittitur is now asserted by most of the courts of appeals.

Corcoran v. City of Chicago

Case Brief

FACTS:

Corcoran began a suit against the city of Chicago to recover damages for personal injuries alleged to have been caused by the negligent acts of the defendant. The cause was tried with a jury and resulted in a verdict for the plaintiff for $5,000. A motion for new trial was overruled and judgment entered on the verdict. On appeal, the Appellate Court reversed the judgment and remanded the cause for another trial. The plaintiff filed a motion in the Appellate Court asking that the remanding part of the order be stricken. The motion was granted.

ISSUE:

RULE:

The Civil Practice Act provides that Appellate Courts may review error of fact, in that the judgment, decree or order appealed from is not sustained by the evidence or is against the weight of the evidence.Exceptions taken to opinions or decisions of circuit court overruling motions in arrest of judgment, motions for new trials and for continuance of causes shall hereafter be allowed and the party excepting may assign for error any opinion so excepted to, any usage to the contrary notwithstanding.

APPLICATION:

The power which the Appellate Court assumed to exercise in reviewing the evidence and setting aside the verdict is found in the Civil Practice Act.The judges of an appellate court have as much power over the facts as the jury had in the first instance, for it is undeniable this court may set aside a verdict if the facts fail to satisfy it of its propriety.

CONCLUSION:

There was a practice at common law which authorized courts exercising appellate jurisdiction to set aside verdicts on the grounds the findings of fact were not supported by the evidence.Judgment affirmed.

B. The Power to Set Aside a Trial Judge's Findings in a Nonjury Case Rule 52(a



Federal Rule 529a) was amended to apply the "clearly erroneous" standard to a TC's finding of fact, even if they are based on documentary evidence.

Inwood Laboratories, Inc. v. Inves Laboratories, Inc. (1982) - Because of the deference due to the trial judge, unless an appellate court is left with the definite and firm conviciton that a mistake has been committed, it must accept the TC's findings.

Bose Corp v. Consumers Union of United States, Inc. (1984) - Rule 52(a) does not inhibit an appellate court's power to correct errors of law, including those that may infect a so-called mixed finding of law and fact, or a finding of fact that is predicated on a misunderstanding of the governing rule of law. Nor does Rule 52(a) furnish particular guidance with respect to distinguishing law from fact.The clearly erroneous standard of Rule 52(a) does not prescribe the standard of review to be applied in reviewing a determination of actual malice in a case governed by New York Times v. Sullivan. Appellate judges in such a case must exercise independent judgment and determine whether the record establishes actual malice with convincing clarity.

In the declaratory-judgment context, an appellate court may make two inquiries:1. It may determine whether the TC abused its discretion by making an arbitrary choice to hear a claim for declaratory judgment.2. It may determine that, even if the action is properly a declaratory-judgment action, the lower court's opinion was nevertheless erroneous.

The appellate court may engage in de novo review.

Pullman--Standard v. Swint

Case Brief

FACTS:

Respondents were black employees at the plant of petitioner, a manufacturer of railway freight cars and parts. They brought suit against the company and the union petitioner alleging violations of Title VII of the Civil Rights Act. The District Court found that the differences in terms, conditions, or privileges of employment resulting from the seniority system are not the result of an intention to discriminate because of race or color, and held that the system satisfied the requirements of the Act. The Court of Appeals reversed.

ISSUE:

The validity, under Title VII, of a seniority system maintained by the Company and USW. Whether a Court of Appeals is bound by the "clearly erroneous rule FRCP 52(a) in


reviewing a District Court's findings of fact, arrived at after a lengthy trial, as to the motivation of the parties who negotiated a seniority system.Whether the court below applied wrong legal criteria in determining the bona fides of the seniority system.

RULE:

If findings are made under an erroneous view of controlling legal principles, the clearly erroneous rule does not apply, and the findings may not stand.There must be a finding of actual intent to discriminate on racial grounds on the part of those who negotiated or maintained the system.Under the Act discriminatory intent is a finding of fact to be made by the TC>A court of appeals may only reverse a district court's finding on discriminatory intent if it concludes that the finding is clearly erroneous under Rule 52(a).When a appellate court discerns that a district court has failed to make a finding because of an erroneous view of the law, the usual rule is that there should be a remand for further proceedings to permit the TC to make the missing findings. Where findings are infirm because of an erroneous view of law, a remand is proper course unless the record permits only one resolution of the factual issue.

APPLICATION:

If the Court of Appeals followed what seems to be the accepted rule in that circuit, its judgment must be reversed.Rule 52 broadly requires that findings of fact not be set aside unless clearly erroneous. It does not make exceptions or purport to exclude certain categories of actual findings from the obligation of a Court of Appeals to accept a district court's findings unless clearly erroneous. It does not divide facts into categories; in particular, it does not divide findings of fact into those that deal with "ultimate" and those that deal with "subsidiary" facts.The rule does not apply to conclusions of law. The Court of Appeals was quite right in saying that if a District Court's findings rests on an erroneous view of the law, they may be set aside on that basis.We have little doubt about the factual nature of the Act's requirement that a seniority system be free of an intent to discriminate.The Court of Appeals, after holding that the District Court had failed to consider relevant evidence and indicating that the District Court might have come to a different conclusion had it considered that evidence, failed to remand for further proceedings. Instead, the Court of Appeals made its own determination land findings and apparently concluded that the foregoing was sufficient to remove the system from the protection of the Act.

CONCLUSION:

The Court of Appeals erred in the course of its review and accordingly reverse its judgment and remand for further proceedings.Whether an ultimate fact or not, discriminatory intent under the Act is a factual matter


subject to the clearly erroneous standard of Rule 52.When a district court's finding on such an ultimate fact is set aside for an error of law, the court of appeals is not relieved of the usual requirement of remanding for further proceedings to the tribunal charged with teh task of fact-finding in the first instance.

D. The View at the Top---Courts Above Appellate Courts

1. Review as of Right


The Supreme Court can effect a direct appeal in any case in which certiorari would lie by taking up the case as soon as it is docketed in the court of appeals and before that court considers it, but this power has been rarely exercised.

The most important restriction on Supreme Court review of state-court decisions regarding federal claims is that the judgment necessarily must turn on a federal question that it not rest upon an independent state ground. Even if the decision is based on alternative grounds, one federal and one state, review will be denied.

2. Discretionary Review

3. The Final Judgment Requirement Under Section 1257


Section 1257 limits Supreme Court review to final judgments of the highest state court in which a decision could be had.


XVII. Chapter 17. The Binding Effect of Prior Decisions - Res Judicata and Colla

A. Terminology


A party ordinarily gets only one chance to litigate a "claim." If a party litigates only a portion of a claim the first time around, she risks losing the chance to litigate the rest.A party ordinarily gets only one chance to litigate a factual or a legal "issue". Once litigated, she cannot ask a second court to decide it differently later.a party is entitled to at least one "full and fair" chance to litigate before being precluded.Preclusion may be waived unless it is claimed at an early stage of litigation.

res judicata - a general term referring to all of the ways in which one judgment will have a binding effect on another.


Two quite different effects of judgment:1. the effect of foreclosing any litigation of matters that never have bene litigated, because of the determination that they should have been advanced in an earlier suit.2. the effect of foreclosing relitigation of matters that have once been litigated and decided.

claim preclusion - a valid final adjudication of a claim precludes a second action on that claim or any part of it..issue preclusion - "collateral estoppel" - an issue of fact or law, actually litigated and resolved by a valid final judgment, binds the parties in a subsequent action, whether on the same or a different claim.

Topic Lectures

Recorded Lecture:

Former Adjudication

1. Res judicata - claim preclusion2. Collateral estoppel - issue preclusion

stare decisis - the effect of one judicial opinion on a later caselaw of the case - inside a case, if an issue is decided, that is the law of that case in later proceedings.

Three issues:1. whether the doctrine of res judicata applies;2. if not, does the doctrine of collateral estoppel apply;3. if former adjudication applies, who is bound by the first judgment.

Res Judicata

Once you have adjudicated any portion of a cause of action on the merits, you are precluded from litigating any portion of that cause of action again.

Two issues:1. a cause of action2. adjudicated on the merits

Arises in the second action only in order to determine the first action's preclusive effect.

Cause of Action

Under common law, a cause of action was coincident with a writ or form of action.

Under code pleading, a cause of action was a right. E.g., personal injury and property damage were two rights, therefore two causes of action.


Cause of action is modernly defined in terms of the evidence. If it involves the same evidence, it is the same cause of action.

The true measure of a cause of action for res judicata purposes is transaction or occurrence.

On the Merits

Most dismissal motions are not on the merits; however, Rule 12(b)(6) - dismissal for failure to state a claim, may or may not be on the merits.

Res judicata is judged by the movants point of view.

Collateral Estoppel

Issues that have previously been litigated are precluded.

Requirements:1. the issue must be exactly the same;2. the issue must be actually litigated;3. it was necessarily decided.

Who is Precluded

A third party who was not a part of the first action is not precluded from future litigation.

mutuality of estoppel - A non-party cannot be bound by a prior judgment, but mutuality also says that you cannot benefit from that prior decision.

Bernhart v. Bank of America - overruled the mutuality of estoppel theory. Collateral estoppel can be used as a "shield" against litigation from a third party.

Park Lane case - ruled that prior adjudication can also be used as a "sword" by a third party in future litigation.

Full Faith and Credit Clause

Every state court must give full faith and credit to the judgments of any other court in any other State in the Union.

§ 1730 if the Judicial Code applies to federal courts and requires that res judicata and collateral estoppel by given to decisions in state courts.

Topic Hornbook

§ 14.1 Overview and Terminology


doctrine of former adjudication - The binding effect of a judgment entered on one action on a subsequent proceeding.

Res judicata prevents a plaintiff from suing on a claim that already has been decided; it also prevents a defendant from raising any new defense to defeat the enforcement of an earlier judgment.

Estoppel by judgment precludes relitigation of any issue, regardless of whether the second action is on the same claim as the first one, if that particular issue actually was contested and decided in the first action.

Res judicata traditionally is divided into two closely related doctrines, "merger" and "bar."Merger aplies when a claimant has prevailed in the earlier action.Bar applies when a claimant has lost.

When a claimant wins a judgment, all possible grounds for the cause of action asserted by the claimant are said to be merged into that judgment and are not available for further litigation. A party who loses the first suit is said to be barred by the adverse judgment from ever raising the same cause of action again, even if that losing party can present new grounds for recovery.

When an issue is estopped from being relitigated by an earlier judgment on a different claim, the estoppel is collateral. An issue is precluded by direct estoppel when the prior judgment invoked as an estoppel and the present suit are both on the same cause of action.

"Claim preclusion" - corresponnds to traditional res judicata."Issue preclusion" - the analog of estoppel by judgment.

Stare decisis describes the effects of previous judicial decisions on present litigation. Stare decisis principles, also referred to as the doctrine of precedent, dictate that like cases should be decided alike by courts in a single jurisdiction.

Former adjudication precludes only later litigation between parties to a previous lawsuit and, in some cases, others who are in privity with the parties. Stare decisis, on the other hand, applied equally to all litigants, even those having no connection with the precedent-setting lawsuit.

Stare decisis applies only to questions of law; former adjudication precludes litigation on questions both of law and fact.

Stare decisis is unconcerned with the facts of a given case except insofar as they illustrate the legal doctrine that the case enunciates.


Res judicata effect is given to any valid judgment, civil or criminal, that is final and on the merits.

Jeopardy attaches to a criminal proceeding when the accused is in imminent danger of conviction. Once this has occurred, double jeopardy forbids the prosecution from renewing the same charges in a second proceeding no matter how the case was dealt with in the original court.

Law of the case refers to the principle that issues once decided in a case that recur in later stages of the same case are not to be redetermined.

§ 14.2 Distinguishing Between Res Judicata and Collateral Estoppel - Claim and Issue Preclusion

Res judicata prevents relitigation of claims; collateral estoppel ends controversy over issues. Res judicata applies regardless of whether there has been an adversary contest on a particular matter; collateral estoppel operates only when an issue has been litigated fully. Res judicata precludes only subsequent suits on the same cause of action; collateral estoppel may preclude relitigation of the same issues in later suits on any cause of action.

B. Claim and Defense Preclusion


A judgment, if rendered upon the merits, constitutes an absolute bar to a subsequent action. It is a finality as to the claim or demand in controversy, concluding parties and those in privity with them, not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose.

For claim preclusion to operate, the three elements must be present:1. only judgments that are final, valid, and on the merits have preclusive effect.2. the parties in the subsequent action must identical to those in the first.3. the claim in the second suit must involve matters properly considered included in the first action.

Topic Lectures

Live Chat:

Res Judicata

Claim preclusion. A person is not going to be subjected to the same claim twice. Prevents a party from suing on a claim that has already been decided, and prevents a defendant from raising new defenses.


Criteria:1. must be a valid final judgment2. must be on the merits3. the claims have to be the same in the first and second lawsuit

merger - If the plaintiff is successful, the judgment merges into any future claim on the same cause of action from that plaintiff.

bar - If a plaintiff is unsuccessful, they are barred from re-litigating.

Matthews case - Defined a "claim" as a group of facts limited to a single occurrence or transaction without particular reference to the resulting legal rights.

privity - Connection / relationship between two parties, each having a legally recognized interest is the same subject matter.

transaction or occurrence test - Claims extinguished by a first judgement shall include "all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction -- or series of connected transactions -- out of which the action arose."

Application to Defenses

Defendant is precluded from raising any defenses that could have been litigated at the previous trial. May often arise when the judgment is enforced.

1. Claim Preclusion


A holding consists of those propositions along the chosen decisional path or paths of reasoning that:1. are actually decided;2. are based upon the facts of the case, and3. lead to the judgment.If not a holding, a proposition stated in a case counts as dicta.

the transactional test - the preclusive effect of a prior judgment extends to all rights the original plaintiff had with respect to all or any part of the transactions, or series of connected transactions, out of which the original action arose.

The transaction is the basis of the litigative unit or entity which may not be split.

A party may waive the benefits of preclusion by failing to raise it as an affirmative defense in the second suit.

One of the primary purposes of the claim-preclusion doctrine is to prevent the splitting of


a single claim into two separate suits.

When the prior judgment was obtained by the use of fraud, courts generally will not consider it binding.When there was a clear and fundamental jurisdictional defect that should have prevented the first court from hearing the suit, courts often will hold that the judgment has no preclusive effect.

Claim preclusion does not create an exception to the rule that a defendant cannot remove on the mere basis of a federal defense.

Topic Hornbook

A. Res Judicata - Claim Preclusion

§ 14.3 General Principles Underlying Res Judicata

general policies:1. no person should be twice vexed by the same claim2. it is in the interest of the state that there be an end to litigation

A prior judgment ends litigation, not only as to every ground of recovery that was actually presented in the action, but also as to every ground which might have been presented.

Res judicata can preclude a plaintiff from pursuing an otherwise meritorious claim that never was litigated because of a seemingly minor procedural error or because a lawyer failed to anticipate at the time of the first action the effect that the judgment would have on future litigation.

Res judicata is an affirmative defense that the court ordinarily will not raise on its own initiative.

Res judicata may be waived explicitly or implicitlyBy preventing consolidation, the defendant implicitly waives the defense of res judicata.If res judicata is not raised, it is presumed to be waived and the issue will be ignored. Waiver also may occur if the defendant fails to raise the defense soon enough.

The benefit of res judicata may be lost if, by fraud or other misrepresentation, the defendant actually is responsible for the claim-splitting.

§ 14.4 The Scope of Res Judicata - What Is a Claim or Cause of Action

The basic unit of litigation to which res judicata applies is a cause of action or claim. A valid and final judgment on the merits of a cause of action is treated as conclusive as the parties' rights and accorded binding effect in all subsequent lawsuits involving the same cause of action. Merger and bar apply not only to what was litigated, but also to all


aspects of the cause, as well as to all defenses, that might have been raised with respect to the cause of action adjudicated in the original lawsuit.

transactional approach / decisive test / destruction-of-prior-judgment test

Some courts recognize separate causes of action when they conclude that no decision in the second action would contradict the judgment in the first action.Whether the substance of the rights or interests established in the first action will be destroyed or impaired by the prosecution of the second.

different-statute approach

Statutory codes often provide a convenient way of organizing legal rights into discrete units, and thus each statute may be thought of as creating a single cause of action.

same-evidence test

To determine if the first action is res judicata to the second, the test to be applied is whether there is identity of facts essential to the maintenance of both cases or whether the same evidence would sustain both.

Restatement Second of Judgments

The claims extinguished by a first judgment shall include all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose.

The term transaction is intended to mean a natural grouping or common nucleus of operative facts. What factual grouping constitutes a transaction is to be determiend programmatically by considering such factors as:1. whether the facts are closely connected in time, space, origin, or motivation;2. whether they form a convenient litigation unit; and3. whether treating them as a single transaction conforms with the parties' expectations and business practice.

§ 14.5 The Scope of Res Judicata - Some Applications

In contract actions, whether two suits concern the same contract or different ones typically dtermines whether res judicata properly may be invoked.

A contract is entire if it consists of a single, indivisible promise to do some act; a contract is several if it comprises discrete promises to do different acts.The breach of a contract judged to be entire will support only one cause of action because a promise to do one thing can be broken only once.A contract that is several, on the other hand, is a compound of different promises that may be broken or performed individually and thus it may support more than one cause of


action.

the Rule of Accumulated Breaches - Under this rule a suit for breach of a continuing contract merges all claims that arose prior to the time suit is brought.Separate negotiable instruments always may be sued upon separately.

The problem with whether personal injuries and property damages resulting from a single tortious act give rise to a single cause of action or two seprate causes of action is a recurring one. The majority find only one cause of action.

subrogation-exception to the general rule - When a property damage claim has been subrogated to an insurer, litigation or settlement of that claim does not prevent the victim from pursuing his own claim for personal injuries.

In general, when a single act results in several distinct injuries, a single cause of action arises.Conversely, when a single injury can be traced to several different wrongful acts, there is still only one cause of action.

A suit for damages caused by an ongoing nuisance is treated as conclusive of all claims up to the time suit is brought. An earlier judgment does not preclude a subsequent action for damages that accrue later, however.

Actions for damages do not preclude a later suit for injunctive relief, since injunctions look only to the future.

A judgment awarding permanent damages precludes later suits based on the same nuisance.

equity clean-up doctrine - An equity court could decide any incidental legal issues that arose in the course of litigation.

It is now possible to seek both legal and equitable remedies in one action, and res judicata demands that all the potential remedies for a single cause of action be sought in one proceeding or be lost.

A recovery of accrued damages for a continuing wrong still may not preclude a later request for an injunction.

Rush v. City of Maple Heights

Case Brief

FACTS:

Plaintiff was injured in a fall from a motorcycle. She brought an action in the Municipal Court for damage to her personal property; that court found that defendant city was


negligent in maintaining its street and that this negligence was the proximate cause of plaintiff's damage.Plaintiff also brought this action in the Court of Common Pleas for personal injuries she incurred in the same accident; her motion to set trial on the issue of damages alone was granted on the ground that the issue of negligence was res judicata because of the Municipal Court action; judgment was entered on a verdict.

ISSUE:

RULE:

4. Injuries to both person and property suffered by the same person as a result of the same wrongful act are infringements of different rights and give rise to distinct causes of action, with the result that the recovery or denial of recovery of compensation for damages to the property is no bar to an action subsequently prosecuted for the personal injury, unless by an adverse judgment in the first action issues are determined against the plaintiff which operate as an estoppel against him in the second action.6. Where an injury to person and to property through a single wrongful act causes a prior contract of indemnity and subrogation as to the injury, the indemnitor may prosecute a separate action against the party causing such injury for reimbursement for indemnity monies paid under such contract.7. Parties in privy, in the sense that they are bound by a judgment, are those who acquired an interest in the subject matter after the beginning of the action or the rendition of the judgment; and if their title or interest attached before that fact, they are not bound unless made parties.8. A grantor or assignor is not bound, as to third persons, by any judgment which such third persons may obtain against his grantee or assignee adjudicating the title to or claim for the interest transferred unless he participated in the action in such manner as to become, in effect, a party.

APPLICATION:

There appears to be no valid reason in these days of code pleading to adhere to the old English rule as to distinctions between injuries to the person and damages to the person's property resulting from a single tort.

CONCLUSION:

Whether or not injuries to both person and property resulting from the same wrongful act are to be treated as injuries to separate rights or as separate items of damage, a plaintiff may maintain only one action to enforce his rights existing at the time such action is commenced.The so-called majority rule conforms much more properly to modern practice. The rule declared in teh fourth paragraph in the Vasu case ona point not actually at issue therein, should not be followed.


Mathews v. New York Racing Association, Inc.

Case Brief

FACTS:

Defendants move for summary judgment on the ground that a judgment in a prior action in this court is res judicata as to teh claim alleged in the compalint.NY Racing Association operates a race track and employs defendant for security purposes.Plaintiff brings this action alleging that he was "assaulted," "kidnapped," "falsely arrested," and "falsely imprisoned" by employees of the race track. He further alleges that the defendants charged him with disorderly conduct and maliciously caused him to be prosecuted and convicted.The prior judgment on which defendants rely named three individuals as defendants. The only two properly served were employees of the defendants named in the present suit.

ISSUE:

Whether the claim alleged in this complaint is the same as that in the suit concluded earlier.

RULE:

The term "claim" refers to a group of facts limited to a single occurrence or transaction without particular reference to the resulting legal rights.

APPLICATION:

The facts relevant to plaintiff's current lawsuit were tried to a conclusion in the earlier suit. Any liability of the defendants for the acts or statements of their agents must be predicated upon the familiar principle of respondeat superior. Thus, if the agents committed no actionable wrong against the plaintiff, neither did their principals.The plaintiff cannot be permitted to splinter his claim into a multiplicity of suits and try them piecemeal at his convenience.The problem of his rights against the defendant based upon the alleged wrongful acts is fully before the court whether all the reasons for recovery were stated to the court or not.

CONCLUSION:

The court is cognizant of the fact that plaintiff appears pro se, but as the law provides a beginning for litigation, it must also privde an end.

Jones v. Morris Plan Bank of Portsmouth


Case Brief

FACTS:

Jones instituted an action for damages against the Morris Plan Bank for the conversion of his automobile.After the plaintiff had introduced all of his evidence and before the defendant had introduced any evidence on its behalf, the latter's counsel moved to strike the evidence of the plaintiff and the court sustained the motion. A verdict for the defendant resulted.Plaintiff purchased from Parker, a dealer in automobiles, a Plymouth sedan. He paid a part of the purchase price by the delivery of a used car to Parker, and after crediting that amount on the purchase price and adding a finance charge, there remained an unpaid balance due the dealer payable in 12 monthly installments and evidenced by a note.The contract was assigned to the defendant and the note was indorsed by Parker and delivered to the defendant at the same time.Installment payments due on the note were not made when payable and for them an action was instituted. No appearance was made by the defendant in that action and judgment was obtained against him for the two payments. Execution issued upon the judgment and it was satisfied by Jones.Later the defendant instituted another action against Jones in the same court for the next installment which had become due and was unpaid, and to that action Jones filed a plea of res judicata, whereupon the Bank took a nonsuit.The defendant took possession of the automobile without the consent of the plaintiff and later sold it and applied the proceeds upon the note.

ISSUE:

RULE:

If a transaction is represented by one single and indivisible contract and the breach gives rise to one single cause of action, it cannot be split into distinct parts and separate actions maintained for each.If the contract is divisible giving rise to more than one cause of action, each may be proceeded upon separately.

APPLICATION:

The note and conditional sales contract constituted one single contract. The sole purpose of the conditional sales contract was to retain the title to the seller until the note was paid. When that condition was performed, the contract ended.All of the installments were due. The evidence essential to support the action on the two installments for which the action was brought would be the identical evidence necessary to maintain an action upon all of the installments. All installments having matured at the time the action was begun, under well-settled principles, those not embraced in that action are now barred.


At the time the defendant lost its right to institute any action for the remaining installments, the title to the automobile passed to the plaintiff. He was the owner at the time the agent of the defendant took possession of it and exposed it to sale.

CONCLUSION:

Under the unconditional acceleration provision in the note involved here and in the basence of the usual optional provision reserved to the holder, the entire amount due upon the note became due and payable when default was made in paying an installment.It follows that the judgment of the court below will be reversed, and the case will be remanded for the sole purpose of determining the quantum of damages.Reversed and remanded.

2. Defense Preclusion


Compulsory-counterclaim rules, such as Federal Rule 13(a), effectively supersede the rules of preclusion in many contexts.

At common law the term "recoupment" described a claim that defendant could assert against plaintiff only if it arose from the same transaction as plaintiff's claim.

"Setoff" referred to a claim by defendant that was unrelated to plaintiff's claim. Unlike recoupment, setoff permitted defendant to assert an affirmative claim for relief.

It is true that a party, when sued, must interpose all defenses which he has; and as to them, whether pleaded or not, the judgment is conclusive.

Generally a defendant's failure to raise a counterclaim that is not compulsory does not preclude a later action.

Both precedent and policy require that res judicata bar a counterclaim when its prosecution would nullify rights established by the prior action.

Section 20(1) of the Restatement (Second) of Judgments sets forth certain valid and final judgments that are not preclusive:a. dismissal for lack of jurisdiction, dismissal for improper venue, dismissal for nonjoinder or misjoinder of parties; andb. election or direction of a nonsuit.

Topic Hornbook

§ 14.6 The Scope of Res Judicata - The Effect of Res Judicata on Defendant's Assertions

Three general principles:


1. Every available defense must be asserted in the first suit.2. Defendant need not assert any counterclaim, cross-claim, or third-party claim unless required to do so by specific statutory provision.3. Once asserted by the defendant, the determination of a counter-claim, cross-claim, or third-party claim will be accorded the same res judicata effect that it would have had as an original complaint.

If the jurisdiction in which the first action is brought has expressed a policy in its statutes requiring joinder of defendant's claims, then subsequent suits by the defendant on those claims will be precluded.

If a party wins a valid judgment in one jurisdiction that remains unsatisfied because the defendant has removed itself and its assets to another state, the plaintiff can follow the defendant and bring an action to enforce the judgment in the latter state. Defendant at the second proceeding is precluded from raising any defenses that could have been litigated at the previous trial.

If a landlord sues to evict a tenant because of failure to pay rent, and the tenant fails to appear at the eviction hearing, all defenses to a later action for back rent due may be barred by res judicata.

The claim may fall within a statutory compulsory-counterclaim rule, such as Federal Rule 13(a), and the failure to comply with that rule will prevent a subsequent action based on that claim.

A permissive counterclaim - one not covered by either a statutory common-law compulsory counterclaim rule - is not barred for failure to assert it during the plaintiff's action. The defendant may choose whether to assert that claim in the first action or bring an independent action on it.

Because cross-claims and third-party claims are not compulsory under most procedural rules, they are not precluded from a later lawsuit if not asserted in the first action. The interposition of a cross-claim or third-party claim in the original suit may preclude the later litigation of additional claims between those parties, however, depending on the scope of the claims litigated.

The Restatement Second of Judgments - A defensive assertion of facts should no prevent a later use of the same facts by the defendant in a suit for affirmative recovery. Merely defending an action does not produce any res judicata effect as to the defendant because only the plaintiff has asserted a claim for relief.

§ 14.7 Requirements for the Application of Res Judicata

In order for a judgment to be given binding effect, the court must find that it meets three requirements:1. the judgment must be valid,


2. final,3. and on the merits.

Even though the earlier judgment may have been based upon an unconstitutional statute or judicial rule, it will be given full binding effect.Full res judicata effect will be given to judgments based on invalid judicial rules or invalid judicial procedures, so long as there was a fair opportunity to raise the issue of their validity in the frist proceeding or on appeal.

In general, a prior judgment will be given full res-judicata effect even though it later appears that the judgment-rendering court acted beyond its subject-matter jurisdiction if that court made a determination that it had jurisdiction.Once a court makes a determination that it has jurisdiction, that decision is binding unless reversed on appeal.

A judgment is entitled to full faith and credit as to questions of jurisdiction when they have been fully and fairly litigated and finally decided in the court whihc rendered the original judgment.

Res judicata should not apply when both claims cannot be presented in the first court because of limitations on that court's subject-matter jurisdiction. In order to avoid duplication and promote judicial economy, the Restatement Second suggests instead that collateral estoppel may be applied to the identical issues in the state-court action.

The identification of a transactional test for defining the scope of res judicata with the supplemental jurisdiction standard of common nucleus of operative facts suggests that res judicata should be applied to preclude the assertion of any claim that would fall within the federal court's supplemental jurisdiction.

If plaintiff sues on a state claim in a state court which is barred from entertaining a federal claim based on identical facts, res judicata nevertheless applies to prevent the later assertion of the federal claim in federal court. As long as the plaintiff could have pursued all the claims in federal court, then the plaintiff cannot be allowed to split those claims, burdening both the federal and state courts with their determination.

A plaintiff who has a forum in which to assert all his claims must sue there or risk losing those claims omitted from the first proceeding in a court of limited jurisdiction.

A defendant who litigates the merits on the case and does not object to personal jurisdiction generally is treated as having waived the right to raise a personal-jurisdiction objection later.

An interlocutory order generally never is accorded res-judicata effect because by its nature it either leaves some issues for determination in subsequent litigation or requires the completion of certain acts or conditions before the entry of judgment. A judgment determining liability will not be sufficiently final for res-judicata purposes as long as


damage issues are deferred for separate trial or otherwise remain unadjudicated. The grant or denial of a preliminary injunction or a temporary restraining order will not merge or bar an action for permanent injunctive releif.

Most courts treat a judgment as final for res judicata purposes if it conclusively disposes of the lawsuit in the rendering court, notwithstanding that an appeal has been taken or the time to appeal has not expired.

In general terms, a judgment is considered to be on the merits if it is a disposition based on the validity of the plaintiff's claims rather than on a procedural ground.

Judgments entered after full trial plainly are on the merits, as are summary judgments and judgments entered on a motion for a directed verdict or for a judgment as a matter of law.

Dismissal without prejudice means that the plaintiff can reassert the same cause of action by curing the defects that led to the dismissal. Dismissals with prejudice are intended to bar relitigation of the same claim.

As to cases in which the plaintiff simply fails to prosecute the case after filing the complaint, in actions brought in the federal courts, Federal Rule 41(b) provides that these dismissals are treated as involuntary dismissals on the merits unless the TC specifies otherwise.

Involuntary dismissals also may result because of a lack of jurisdiction or venue or of the failure to join an indispensable party. A dismissal on any of those grounds does not operate as an adjudication on the merits. Furthermore, TCs do not have discretion to dismiss on those grounds with prejudice.

Under Federal Rule 41(b), any dismissal not provided for in this rule operates as an adjudication upon the merits unless the court specifies otherwise.

Dismissals of a premature suit or of an action in which plaintiff has failed to satisfy a precondition to suit typically do not bar a second action after the claim has matured or the precondition has been satisfied.

A dismissal entered for defendant on a demurrer generally is not considered to bar plaintiff's cause of action because plaintiff is free to correct the defects in the pleading and sue again.

In the federal courts, a Federal Rule 12(b)(6) dismissal for failure to state a claim upon which relief may be granted generally will be treated as a judgment on the merits unless the court specifies that it is without prejudice.The courts can avoid any unfairness by granting the motion with leave to amend, and that is the prevailing practice.

A default judgment is treated as an adjudication on the merits, commanding res judicata


effect. Full merger and bar effect are given to default judgments to prevent the defendant from stalling the plaintiff's action by defaulting and later challenging the judgment by a subsequent suit of his own.

A voluntary dismissal after a settlement has been reached has no preclusive effect if the parties to the action agree that the dismissal will be without prejudice.

Judgments voluntarily dismissing actions as a result of settlement agreements commonly provide that the judgment is on the merits.

A consent judgment normally is given full res judicata effect in the absence of a stipulation indicating that it is not on the entire claim.

§ 14.8 Exceptions to the Application of Res Judicata

There are situations in which the normal consequences of res judicata might undermine specific objectives of legislative or constitutional provisions; when that is so, successive suits on the same claim may be permitted.

Mitchell v. Federal Intermediate Credit Bank

Case Brief

FACTS:

An action for an accounting against defendant bank for proceeds of a crop of potatoes. In order to obtain loans from defendant he had sold his potatoes through a growers' association and assigned the proceeds as security for two notes totaling $9K, which had been discounted with defendant; that the potatoes had netted $18K, but that he had never received any of this, and that the proceeds had been received by defendant or an agent of defendant. In a previous action by defendant on the notes, plaintiff had pleaded in the answer the same facts now the basis of an affirmative claim, but had not counterclaimed or asked relief.Kirven had bought fertilizers and had given his note for the amount. The company, upon maturity of the note, brought action against him on his obligation. He at first filed an answer setting up three defenses.The jury rendered a verdict for the company. Thereafter, Kirven brought an action against the company alleging that the defendant caused damage to his crop.A verdict was given Kirven in the amount prayed for.

ISSUE:

Was the circuit judge in error in sustaining the plea in bar to plaintiff's case?

RULE:

A party against whom an action is brought on a contract has two modes of defending


himself. He may allege specific breaches of the contract declared upon, and rely on them in defense. But if he intends to claim, by way of damages for nonperformance of the contract, more than the amount for which he is sued, he must not rely on the contract in defense, but must bring a cross action, and apply to the court to have the cases continued so that the executions may be set off.

APPLICATION:

The indebtedness of the bank to Mitchell arising from the embezzlement of the proceeds of the crop was used pro tanto as an offset to the claim of the bank in the Federal Court.Varney was not entitled to recover in the first suit because his dereliction amounted to more than he sued for.

CONCLUSION:

The facts there pleaded by him as a defense to the bank's recovery on its notes are the same as those set out by him in his complaint as the basis of his action in the case at bar.He attempted to split his cause of action and to use one portion of it for defense in that suit and to reserve the remainder for offense in a subsequent suit, which, under applicable principles, could not be done.

C. Issue Preclusion


The general principle announced in numerous cases is that a right, question, or fact distinctly put in issue and directly determined by a court of competent jurisdiction, as a ground of recovery, cannot be disputed in a subsequent suit between the same parties or their privies; and, even if the second suit is for a different cause of action, the right, question, or fact once so determined must, as between the same parties or their privies, be taken as conclusively established, so long as the judgment in the first suit remains unmodified.

Under the doctrine of claim preclusion, a claim may be "merged" or "barred" by a party's failure to raise the claim in a prior action. Issue preclusion, however, applies only to matters argued and decided in an earlier lawsuit.

For issue preclusion to exist, a proceeding must involve the same issue as a previous suit.

To trigger the doctrine of issue preclusion, however, mroe than a mere duplication of issues is required.The judgment in the first action must have been of a certain "quality" - that is, it must have been valid, final, and on the merits.

Moreover, the issue raised in a second suit actually must have been litigated in the first action, and must have been decided by the first court. And, determination of that issue


must have been necessary to the court's judgment

Issue preclusion can be invoked offensively, when the plaintiff in the second action seeks to preclude litigation of an issue that was decided favorably to him in a prior action. Or, it can be used defensively, when the defendant in the second suit seeks to preclude relitigation of an issue that was decided in his favor in a prior suit.

When the two suits involve the same cause of action, issue preclusion sometimes is referred to as direct estoppel. When the second suit involves a new claim or cause of action, issue preclusion sometimes is referred to as collateral estoppel.

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Module 29Collateral Estoppel

Collateral Estoppel

Parties are precluded from contesting matters that have had a full and fair opportunity to be litigated

Criteria:1. the claims have to be the same in the first and second lawsuit2. the issue must have been fully and fairly litigated on the merits3. actually decided4. necessary for judgment

The issue must be based on the same facts and same law to be the same issue.The matter must be identical in all respects.

Generally, default judgments are not a basis for collateral estoppel.

mutuality - Only parties or persons in privity can take advantage of collateral estoppel.

Topic Hornbook

§ 14.9 General Principles Underlying Collateral Estoppel

Issue preclusion operates to simplify dispute resolution by treating the original court's determination on specific issues as binding; any subsequent litigation between the parties, even on different claims, will be limited to only those issues being presented for the first time.


Collateral estoppel operates without regard to whether the first determination of a particular issue was correct. The court does not concern itself with the rightness of the findings. Its only inquiry is whether a particular issue is one that clearly was decided in a prior proceeding and whether the issue was necessary to the determination of that proceeding.

Interlocutory orders that include findings on specific issues may be given collateral estoppel effect, even when their lack of finality prohibits their use for res judicata purposes.

A preliminary injunction may have collateral estoppel effect if it is based on a determination that constitutes an insuperable obstacle to success on the merits.

Whether on order is final for purposes of collateral estoppel, then, will depend on factors such as the nature of the decision, the adequacy of the hearing, and the opportunity for review. As long as the determination was definitive, it may be treated as final for purposes of issue preclusion.

Collateral-estoppel effect also may be given to judgments entered by courts of limited jurisdiction, when those jurisdictional limits ordinarily would prevent the use of res judicata.

Collateral estoppel effect also may be accorded to judgments entered in actions brought in a court of limited subject matter jurisdiction, even though the issues involved would be beyond the court's jurisdiction in most circumstances.

The procedure for raising the defense of collateral estoppel is the same as for res judicata. Collateral estoppel is an affirmative defense that must be pleaded or it will be waived.

Courts generally do not raise the matter sua sponte.

§ 14.10 The Scope of Collateral Estoppel - Defining an Issue

Just as res judicata requires that the cause of action to be precluded be identical to the one already litigated, collateral estoppel demands identity of issues.

Whether issues in two actions are the same typically depends upon straightforward considerations such as factual identity, legal standards, and the burden of proof imposed on the parties in each lawsuit.

Commissioner of Internal Revenue v. Sunnen - The doctrine must be confined to situations where the matter raised in the second suit is identical in all respects with that decided in teh first proceeding and where the controlling facts and applicable legal rules remain unchanged.


If the relevant facts in the two cases are separable, even though they be similar or identical, collateral estoppel does not govern the legal issues which recur in the second case.

The court will balance the significance of the change in circumstnaces against the burden of repeated litigation. The difference shown must be significant ones; the passage of time alone will not always be significant.

A judgment that determined the existence of an enduring condition raises a presumption that the condition will continue to exist, and collateral estoppel may be applied.

Differences in the burden of proof in the first and second actions may result in the denial of collateral estoppel with respect to an issue that on its face appears identical in both suits.

The Evergreens v. Nunan - Held that only matters constituting ultimate facts in the second action are subject to being precluded by collateral estoppel.

Identical issues will not be given preclusive effect if it was not sufficiently foreseeable at the time of the initial action that the issue would arise in the context of a subsequent action. Sometimes it is stated broadly that collateral estoppel applies only to issues of fact, not to issues of law.

United States v. Moser - Collateral estoppel does not apply to pure issues of law. A fact, question, or right distinctly adjudged in the original action cannot be disputed in a subsequent action, even though the determination was reached upon an erroneous view or by an erroneous application of the law.

The Restatement Second of Judgments has provided that the preclusive effect may be given to issues of law unless the two actions present claims that are substantially unrelated or a new determination of the issue is warranted in order to take account of an intervening change in the applicable legal context or otherwise to avoid inequitable adminstration of the laws.

§ 14.11 Requirements for the Application of Collateral Estoppel

The court first must find that the issues on which collateral estoppel is being asserted are identical in both actions. The person asserting estoppel must show that the issue to be precluded actually was litigated and decided in the prior action and that it was necessary to the court's judgment.

Default judgments, admissions made during discovery, or stipulations made prior to trial should not be a basis for collateral estoppel treatment because in none of these situations were the issues actually tried.


Consent judgments or judgments entered as a result of a settlement typically cannot be used as the basis for issue preclusions.Summary jdugments or judgments entered on a directed-verdict motion may be given collateral estoppel effect.

The party asserting collateral estoppel bears the burden of showing what issues actually were decided.

If inferences cannot be drawn because the presence of multiple claims or alternative defenses prevents any inference about which claims or issues support the judgment, evidence extrinsic to the formal record may be used.

If the party asserting collateral estoppel fails to introduce sufficient extrinsic evidence, and an ambiguity remains, issue preclusion will be denied.

§ 14.12 Exceptions to the Application of Collateral Estoppel

Exceptions to the normal application of collateral estoppel will be made when other substantive policies are deemed to outweigh the policies of judicial economy and avoidance of inconsistent results that are fostered by issue preclusion.

Issue preclusion has been allowed with respect to state-court decisions on the underlying facts in patent, securities, and bankruptcy actions.

Estoppel effect typically is not given to judgments of small-claims courts or justice courts that are designed to provide an expedited and inexpensive process.

The availability of a jury trial in the second action is not the type of difference that will prevent collateral estoppel from being utilized.

Nonparties cannot use collateral estoppel offensively to preclude the relitigation of issues decided against the government in other cases.

1. Actually Litigated


rule of judicial estoppel - If a matter is distinctly put in issue and formally admitted, the party making the admission should be bound by it in subsequent litigation.

"incentive to litigate" formula - allows a party who did litigate an issue to relitigate it if the party can show that the original litigation was a side show rather than a struggle to the finish.

Cromwell v. County of Sac


Case Brief

FACTS:

This was an action on four bonds and four coupons for interest, attached to them.To defeat this action, the defendant relied upon the estoppel of a judgment rendered in favor of the county in a prior action brought by one Smith upon certain earlier maturing coupons on the same bonds, accompanied with proof that the plaintiff Cromwell was at the time the owner of the coupons in that action, and that the action was prosecuted for his sole use and benefit.

ISSUE:

RULE:

APPLICATION:

There is a difference between the effect of a judgment as a bar or estoppel against the prosecution of a second action upon the same claim or demand, and its effect as an estoppel in another action between the same parties upon a different claim or cause of action. In the former case, the judgment, if rendered upon the merits, constitutes an absolute bar to a subsequent action.Where the second action between the same parties is upon a different claim or demand, the judgment in the prior action operates as an estoppel only as to those matters in issue or points controverted, upon the determination of which the finding or verdict was rendered.Where it is sought to apply the estoppel of a judgment rendered upon one cause of action to matters arising in a suit upon a different cause of action, the inquiry must always be as to the point or question actually litigated and determined in the original action, not what might have been thus litigated and determined.It appears from the findings in the original action of Smith, that the county authorized the issue of bonds for the erection of a court-house. The court-house was never constructed by the contractor, or by any other person pursuant to the contract. The plaintiff had become, before their maturity, the holder of 25 coupons, which had been attached to the bonds, but there was no finding that he had ever given any value for them. This court held that the facts disclosed by the findings were sufficient evidence of fraud or illegality in the inception of the bonds to call upon the holder to show that he had given value for the coupons; and, not having done so, the judgment was affirmed.The bonds were void as against the county in the hands of parties who did not acquire them before maturity and gave value for them, and that the plaintiff not having proved that he gave such value, was not entitled to recover upon the coupons. The finding and judgment upon the invalidity of hte bonds, as against the county, must be held to estop the plaintiff here from averring to the contrary. But as the bonds were negotiable instruments they would be held as valid obligations against the county in the hands of a bona fide holder taking them for value before maturity.


CONCLUSION:

There was nothing adjudged in the former action in the finding that the plaintiff had not made such proof in that case which can preclude the present plaintiff from making such proof here. The fact that a party may not have shown that he gave value for one bond or coupon is not even presumptive, much less conclusive, evidence that he may not have given value for another and different bond or coupon. The exclusion of the evidence offered by the plaintiff was erroneous.

2. Necessarily Decided


Generally, a judgment does not act as collateral estoppel between coparties unless they are adversaries, and they are considered adversaries only if there is a claim for relief by one coparty against the other. The fact that their interests clash and that they are on opposite sides of every issue does not make them adversaries for this purpose in the absence of such a claim.

Home Owners Federal Savings & Loan Association v. Northwestern Fire & Marine Insurance Co. (1968) - Certain findings not strictly essential to the final judgment in the prior action may be relied upon if it is clear that the issues underlying them were treated as essential to the prior case by the court and the party to be bound.

Russell v. Place

Case Brief

FACTS:

This is a suit for an infringement of a patent to the complainant for an alleged new and useful improvement in the preparation of leather.The bill of complaint sets forth the invention claimed, the issue of a patent for the same, its surrender for alleged defective and insufficient description of the invention, its reissue with an amended specification, and the recovery of judgment against the defendants for damages in an action at law for a violation of the exclusive privileges secured by the patent.The answer admits the issue of the patent, its surrender and reissue, and, as a defense to this suit, sets up in substance the want of novelty in the invention, its use by the public for more than two years prior to the application for the patent, and that the reissue, so far as it differs from the original patent, is not for the same invention.The plaintiff obtained a verdict for damages, upon which the judgment mentioned was entered.

ISSUE:


RULE:

A judgment of a court of competent jurisdiction, upon a question directly involved in one suit, is conclusive as to that question in another suit between the same parties.It must appear, either upon the face of the record or be shown by extrinsic evidence, that the precise question was raised and determined in the former suit. If there be any uncertainty on this head in the record, the whole subject-matter of the action will be at large, and open to a new contention, unless this uncertainty be removed by extrinsic evidence showing the precise point involved and determined.

APPLICATION:

The record of that action does not disclose the nature of the infringement for which damages were recovered.A recovery for an infringement of one claim of the patent is not of itself conclusive of an infringement of the other claim, and there was no extrinsic evidence offered to remove the uncertainty upon the record.

CONCLUSION:

A patent may be valid as to a single claim and not valid as to the others. The record wants, therefore, that certainty which is essential to its operation as an estoppel, and does not conclude the defendants from contesting the infringement or the validity of the patent in this suit.

Rios v. Davis

Case Brief

FACTS:

Rios brought this suit against Davis to recover damages alleged to have been sustained as a result of personal injuries received in an automobile collision. Plaintiff alleged that his injuries were proximately caused by negligence on the part of the defendant. The defendant answered alleging that Rios was guilty of contributory negligence. Also, among other defenses, the defendant urged a plea of res judicata and collateral estoppel based upon the findings and the judgment entered in a suit between the same parties in the county court. The plea of res judicata was sustained and judgment was entered in favor of defendant.

ISSUE:

RULE:


It is the judgment and not the verdict or the conclusions of fact, filed by a TC which constitute the estoppel, and a finding of fact by a jury or a court which does not become the basis or one of the grounds of the judgment rendered is not conclusive against either party to the suit.

APPLICATION:

It is shown by the record that Popular brought suit against appellee Davis seeking to recover for damages to its truck, alleged to have been sustained in the same collision here involved. Davis answered alleging contributory negligence on the part of Popular and joined appellant Rios as a third party defendant and sought to recover from Rios the alleged amount of damages to his automobile. The jury found that Popular and Rios were guilty of negligence proximately causing the collision. However, the jury also found that Davis was guilty of negligence proximately causing the collision, and judgment was entered denying Popular any recovery against Davis and denying Davis any recovery against Rios.The findings on the issues regarding appellant's negligence and liability were immaterial because the judgment entered in that case was in favor of appellant. The sole basis for the judgment as between Rios and Davis was the findings concerning the negligence of Davis. The finding that Rios was negligent was not essential or material to the judgment and the judgment was not based thereon.Since the judgment was in favor of Rios he had no right or opportunity to complain of or to appeal from the finding that he was guilty of such negligence even if such a finding had been without any support whatever in the evidence. The right of appeal is from a judgment and not from a finding.

CONCLUSION:

The judgment is, therefore, reversed, and the cause remanded.

3. Defining and Characterizing the Issue


When the claims in two separate actions between the same parties are the same or are closely related, it is not ordinarily necessary to characterize an issue as one of fact or of law for purposes of issue preclusion.

When new historic facts are the basis of the second suit and there has been a change in legal regime since the prior suit was adjudicated, the first judgment will not preclude the second litigation.

The EVERGREENS Doctrine - The Evergreens v. Nunan (1944) - Courts sometime have distinguished between "ultimate" and "mediate" facts when determining whether issues decided in one suit will be viewed as preclusive in a later one. Only mattes constituting


ultimate facts in the second action are subject to being precluded by collateral estoppel.

Synanon Church v. United States (1987) - Preclusive effect may be accorded to a decision on an issue if that issue was actually recognized by the parties as important and by the trier of fact as necessary to the first judgment.

Commissioner of Internal Revenue v. Sunnen

Case Brief

FACTS:

Under a series of agreements, a taxpayer had licensed a corporation, which he controlled, to use his patents in exchange for payment of a 10% royalty. At various times, the taxpayer assigned his interest in these agreements to his wife without consideration. Income from these agreements was reported on her income tax returns, and these taxes were paid. The Commissioner contended that the income was taxable to the taxpayer himself and a deficiency was assessed against him.The Tax Court held that, with one exception, all the royalties paid to the wife were part of the taxable income of the taxpayer.The one exception concerned the royalties paid under the 1928 agreement. In an earlier proceeding, the Board of Tax Appeals dealt with the taxpayer's income tax liability. It concluded that he was not taxable on the royalties paid to his wife during those years under the 1928 license agreement. This prior determination by the Board caused the Tax Court to apply the principle of res judicata to bar a different result as to the royalties paid pursuant to the same agreement during 1937.

ISSUE:

RULE:

Where a question of fact essential to the judgment is actually litigated and detemrined in the first tax proceeding, the parties are bound by that determination in a subsequent proceeding even though the cause of action is different.

APPLICATION:

The concepts of res judicata and collateral estoppel are applicable in the federal income tax field. Income taxes are levied on an annual basis. Each year is the origin of a new liability and of a separate cause of action. If a claim of liability or non-liability relating to a particular tax year is litigated, a judgment on the merits is res judicata as to any subsequent proceeding involving the same claim and the same tax year. But if the later proceeding is concerned with a similar or unlike claim relating to a different tax year, the prior judgment acts as a collateral estoppel only as to those matters in the second proceeding which were actually presented and determined in the first suit.


The royalty payments growing out of the license contracts which were not involved in the earlier action before the Board of Tax Appeals and which concerned different tax years are free from the effects of the collateral estoppel doctrine.

CONCLUSION:

Collateral estoppel should not ahve been used by the Tax Court in the instant proceeding to perpetuate the 1935 viewpoint of the assignment.

D. The Required Quality of Judgment


Only judgments of a certain quality will give rise to preclusion.

The traditional words used to describe a judgment of sufficient quality to create preclusion is that the judgment must be valid, final, and on the merits.

1. Judgments of Judicial Tribunals


Settlements ordinarily occasion no issue preclusion unless it is clear that the parties intend their agreement to have such an effect.

An appellate court shall not permit a stipulated reversal unless the court finds both of the following:a. there is no reasonable possibility that the interests of nonparties or the public will be adversely affected by the reversal; andb. that the reasons of the parties for requesting reversal outweigh the erosion of public trust that may result from the nullification of a judgment and the risk that the availability of stipulated reversal will reduce the incentive for pretrial settlement.

Default judgments are always res judicata on the ultimate claim or demand presented in the complaint.

Hanover Logansport, Inc. v. Robert C. Anderson, Inc.

Case Brief

FACTS:

Hanover and Anderson entered into a lease agreement pursuant to which Hanover agreed to lease certain property to Anderson for use as a liquor store. Hanover failed to deliver the premises on the agreed upon date, and Anderson filed suit for breach of the lease. Before trial, Hanover offered to deliver the real estate to Anderson, and Anderson


accepted with a written reservation.Anderson took possession of the premises, and, after several months, Hanover filed a motion to dismiss the earlier breach action. The TC denied the motion.

ISSUE:

Whether, by law, a plaintiff, who accepts an offer of judgment which conforms to one of the alternative prayers for relief contained in his complaint, may then seek additional damages arising from the same cause of action.

RULE:

A consent judgment represents an agreement between the parties settling the underlying dispute and providing for the entry of judgment in a pending or contemplated action.It also represents the entry of such a judgment by a court - with all that this means in the way of committing the force of society to implement the judgment of its courts.

APPLICATION:

We adopt the consent-judgment-as-contract theory and hold that the preclusive effect of a consent judgment must be measured by the intent of the parties. It must be clear that both parties have agreed to reserve an issue or claim. And, it must be precisely stated what issues or claims are being reserved.Because Anderson did not include a claim for damagesd for delay in tendering the real estate in the complaint, it is precluded from reserving such a claim in the consent judgment.

CONCLUSION:

In order to insure that both parties have agreed to reserve a claim or issue and that the reserved claim or issue is clearly apparent to both parties, we hold that:1. the reservation must be incorporated into the offer of judgment itself and2. it must be an inherent part of the original complaint.Therefore, we reverse and remand to the TC, with instructions to enter a judgment on the offer of judgment and to grant Hanover's motion to dismiss.

2. Judgments of Nonjudicial Tribunals


The term privity represents a legal conclusion that the relationship between the one who is a party on the record and the non-part is sufficiently close to afford application of the principle of preclusion.

Holmberg v. State, Division of Risk Management

Case Brief


FACTS:

Holmberg began working for the State of Alaska. She has a history of back injuries.AWCB awarded Holmberg temporary total disability benefits, but denied her claim for permanent total disability benefits.Holmbert also sought disability benefits from PERB. PERB awarded her non-occupational disability benefits. However, the Disability Review Board denied her claim for occupational disability benefits. Holmberg appealed this initial decision to PERB after AWCB had denied her claim for permanent total disability benefits. PERB found that Holmberg was permanently and totally disabled as a result of accidents at work, and accordingly, awarded her occupational disability benefits.Holmberg supplemented the record in her appeal from the prior AWCB decision with the new PERB decision.

ISSUE:

PERB's factual determination that she was physically unable to perform her duties at Risk Management should be given binding effect in this appeal of the AWCB decision against her.Whether the necessary elements of collateral estoppel exist in this case.

RULE:

Litigation conducted before one agency or official is generally binding on another agency or official of the same government because officers of the same government are in privity with each other.Preclusion may be defeated by finding such an important difference in the functions of different agencies that one does not have authority to represent the interests of the other.There are three necessary conditions to the application of collateral estoppel:1. The plea of collateral estoppel must be asserted against a party or one in privity with a party to the first action;2. The issue to be precluded from litigation by operation of the doctrine must be identical to that decided in the first action;3. The issue in the first action must have been resolved by a final judgment on the merits.Privity exists between different agencies of the same government unless there are important differences in the authority of the respective agencies.A final judgment retains all of its res judicata effects pending resolution of an appeal of the judgment.

APPLICATION:

The disability standards for PERB and AWCB provide no substantial reason why AWCB should be allowed to relitigate the narrow factual question whether Holmberg is physically able to continue performing her job with Risk Management.While Retirement and Benefits contested Holmberg's claim before PERB, the state is correct in saying that the party against which PERB entered judgment is the system itself.


PERB is not a state agency but an independent retirement plan in which public employees are members and in which their employers participate. The PERB constituency is not represented at all in a workers' compensation proceeding.The PERB decision was not the first final judgment addressing those issues.

CONCLUSION:

The state as a participant in PERS is not in privity with PERS.Our holding that the state is not in privity with PERS is sufficient to deny affording any preclusive effect to the PERB decision as against the state.The later PERB determination that Holmberg was not physically able to perform her duties at Risk Management cannot preclude AWCB's earlier contrary determination.

E. Persons Benefitted and Persons Bound by Preclusion

Topic Hornbook

§ 14.13 General Principles Governing Who Is Bound

Only persons who were parties or who are in privity with persons who were parties in the first action may be bound.

Issue preclusion may be asserted only against someone who was an adverse party in the prior action. Coparties in the first suit are not prevented from litigating the same issues between themselves in a second lawsuit if they remained in a nonadversarial position toward one another throughout the first action.

In class actions, any judgment that is entered will be given full res judicata and collateral estoppel effect, binding all absent class members. Due process concerns are satisfied by finding that the members were represented adequately and properly notified in the first suit.

The ability to bind a nonparty to a judgment typically is tied to a determinatino that the nonparty is in privity with a party.

A showing of similar interests is not enough to bind a nonparty. Privity is merely a conclusory label applied by the courts when they determine that there is a sufficient identity of interest between a party and nonparty to allow a judgment to bind both.

Successors in interest, whether they obtain their interests by virtue of an assignment, by inheritance, or by law are bound along with their predecessors by res judicata and collateral estoppel.

Legally appointed representative parties, such as trustees and executors, are deemed in privity with those whom they represent.


Privity also has been universally recognized when it is determined that the newly named party in the second suit actually controlled or participated in litigating the first action.Under this principle, liability insurers who actually control litigation on behalf of their insureds are bound even though they were not named parties.

§ 14.14 The Doctrine of Mutuality

Only parties and their privies may be bound or may take advantage of a judgment.

When new parties are involved, the courts generally have ruled that the two actions do not constitute a single cause of action or claim and thus are not barred by res judicata.

doctrine of mutuality - Mutuality is premised on the notion that all litigants should be treated equally, that a person should not benefit from a judgment if that person stood to lose nothing by it.

Mutuality should control, at least when the party against whom estoppel is being asserted was a defendant in the prior litigation.

fluid test - In each case in which a nonparty attempts to benefit by asserting collateral estoppel, the court must determine whether a full and fair opportunity was present in the first action to explore the issues on which an estoppel is asserted so that it would be unlikely that a different determination would be reached in a second trial. The presumption is to allow issue preclusion because the burden is on the party opposing its use to demonstrate why the first opportunity was unfair and what will be different in a second adjudication.

The general rule should be that in cases where a plaintiff could easily have joined in the earlier action or where the application of offensive estoppel would be unfair to defendant, a trial judge should not allow the use of offensive estoppel.

Under Parklane the court must evaluate on a case-by-case basis whether it is necessary to allow what appears to be duplicative litigation to ensure the reliability and fairness of a judgment; no precise rules can or should be formulated.

1. The Traditional Model


rule of mutuality - The traditional rule of issue preclusion was that persons benefited from a prior judgment only if they also were bound by it. A judgment was binding only on parties or persons in privity with them, and a judgment could be invoked only by parties and their privies.

2. The Decline of the Mutuality Doctrine



nonmutual defensive collateral estoppel - Whether a defendant can prevent a plaintiff from relitigating an issue that was previously decided against the plaintiff.

nonmutal offensive collateral estoppel - a case in which a plaintiff seeks to preclude a defendant from relitigating an issue which the defendant previously litigated and lost against a different plaintiff.

Bernhard v. Bank of America Nat. Trust & Sav. Ass'n

Case Brief

FACTS:

Sather, an elderly woman, made her home with the Cooks. Because of her failing health, she authorized Mr. Cook and Dr. Zeiler to make drafts jointly against her commercial account. Mr. Cook opened a commercial account. Thereafter, a number of checks drawn by Cook and Zeiler on Mrs. Sather's commercial account were deposited into the new account. Mrs. Sather singed an authorization directing the bank to transfer the balance of her savings account to the 1st National Bank. Cook withdrew the entire balance from that account and opened a new account in the same bank in the name of himself and his wife.Mrs. Sather died. Cook qualified as executor of the estate and proceeded with its administration. After a lapse of several years he filed an account at the instance of the probate court accompanied by his resignation. The account made no mention of the money transferred. Bernhard filed objections to the account for htis reason. After a hearing on the objections the court settled the account, and as part of its order declared that the decedent during her lifetime had made a gift to Cook of the amount of the deposit in question.After Cook's discharge, Bernhard was appointed administratix with the will annexed.TC gave judgment for defendant in the ground that Cook's ownership of the money was conclusively established by the finding of the probate court.

ISSUE:

RULE:

The plea of res judicata is available only when there is privity and mutuality of estoppel. Under the requirement of privity, only parties to the former judgment or their privies may take advantage of or be bound by it. A party in this connection is one who is directly interested in the subject matter, and had a right to make defense, or to control the proceeding, and to appeal from the judgment. A privy is one who, after rendition of the judgment, has acquired an interest in the subject matter affected by the judgment through or under one of the parties, as by inheritance, succession, or purchase. The estoppel is


mutual if the one taking advantage of the earlier adjudication would have been found by it, had it gone against him.The requirement of due process of law forbid the assertion of a plea of res judicata against a party unless he was bound by the earlier litigation in which the matter was decided. He is bound by that litigation only if he has been a party thereto or in privity with a party thereto.

APPLICATION:

No satisfactory rationalization has been advanced for the requirement of mutuality.Since the issue as to the ownership of the money is identical with the issue raised in the probate proceeding, and since the order of the probate court settling the executor's account was a final adjudication of this issue on the merits, it remains only to determine whether the plaintiff in the present action was a party or in privity with a party to the earlier proceeding.

CONCLUSION:

The plaintiff has brought the present action in the capacity of adminsitratix of the estate. In this capacity she represents the very same persons and interests that were represented in the earlier hearing on the executor's account. In that proceeding plaintiff and other legatees who objected to the executor's account represented the estate of the decedent. They were seeking not a personal recovery but, like the plaintiff in the present action, as administratix, a recovery for the benefit of the legatees and creditors of the estate, all of whom were bound by the order settling the account.The judgment is affirmed.

Parklane Hosiery Co. v. Shore

Case Brief

FACTS:

The respondent brought this stockholder's class action against the petitioners in a federal district court. The complaint alleged that the petitioners had issued a materially false and misleading proxy statement in connection with a merger. The complaint sought damages, rescission of the merger, and recovery of costs.Before this action came to trial, the SEC filed suit against the same defendants in a federal district court.Injunctive relief was requested. The District Court found that the proxy statement was materially false and misleading in the respects alleged, and entered a declaratory judgment to that effect.The Court of Appeals affirmed.The respondent in the present case then moved for partial summary judgement against the petitioners, asserting that the petitioners were collaterally estopped from relitigating the issues that had been resolved against them in the action brought by the SEC. The District


Court denied the motion.

ISSUE:

Whether, quite apart from the right to a juyry trial under the 7th Amendment, the petitioners can be precluded from relitigating facts resolved adversely to them in a prior equitable proceedings with another party under the general law of collateral estoppel. Whether a litigant who was not a party to a prior judgment may nevertheless use that judgment "offensively" to prevent a defendant from relitigating issues resolved in the earlier proceeding.Whether, notwithstanding the law of collateral estoppel, the use of offensive collateral estoppel in this case would violate the petitioners' 7th Amendment right to a jury trial.

RULE:

In both the offensive and defensive use situations, the party against whom estoppel is asserted has litigated and lost in an earlier action.

APPLICATION:

The present case involves offensive use of collateral estoppel - a plaintiff is seeking to estop a defendant from relitigating the issues which the defendant previously litigated and lost against another plaintiff. The preferable approach in the federal courts is not to preclude the use of offensive collateral estoppel, but to grant TCs broad discretion to determine when it should be applied.In the present case none of the circumstances that might justify reluctance to allow the offensive use of collateral estoppel is present.There is no unfairness to the petitioners in applying offensive collateral estoppel in this case.The petitioners had every incentive to litigate the SEC lawsuit fully and vigorously.The petitioners have advanced no persuasive reason why the meaning of the 7th Amendment should depend on whether or not mutuality of parties is present.The party against whome estoppel is asserted has litigated questions of fact, and has had the facts determined against him in an earlier proceeding.There is no further factfinding function for the jury to perform, since the common factual issues have been resolved in the previous action.

CONCLUSION:

None of the considerations that would justify a refusal to allow the use of offensive collateral estoppel is present in this case. Since the petitioners received a "full and fair" opportunity to litigate their claims in the SEC action, the contemporary law of collateral estoppel leads inescapably to the conclusion that the petitioners are collaterally estopped from relitigating the question of whether the proxy statements were materially false and misleading.


The law of collateral estoppel forecloses the petitioners from relitigating the factual issued determined against them in the SEC action, nothing in the 7th Amendment dictates a different result.

3. Binding Nonparties


The general principle of issue preclusion is that a judgment will bind only parties to the prior action.

When a guardian litigates a suit on behalf of a minor, the minor normally will be bound by the suit's outcome.

Montana v. United States (1979) - When nonparties assume control over litigation in which they have a direct financial or pecuniary interest, they may be precluded from subsequently relitigating issues that the earlier suit resolved.

When sufficient evidence of an agreement exists, nonparties are precluded form relitigating the claims.Courts can decline to apply nonparty preclusion for various reasons even if the facts of the two cases seem remarkably similar.

The Civil Rights Act of 1991 prohibits challenges to employment consent decrees by individuals who had actual notice and a reasonable opportunity to intervene, or whose interests were inadequately represented.

Martin v. Wilks

Case Brief

FACTS:

City and Board entered into consent judgments with black firefighters setting goals for hiring blacks as firefighters and for promoting them. White firefighters subsequently brought suit against the City and the Board alleging that the Whites were being denied promotions illegally in favor of less qualified Blacks.The District Court held that the earlier consent decrees provided a defense to the reverse discrimination suits, and that the only issue was whether the promotions of Blacks were consistent with the terms of the decrees. The Court of Appeals reversed, holding that because the white firefighters or their privies were not parties to the earlier litigation, their independent discrimination claims could not be precluded.

ISSUE:

RULE:


One is not bound by a judgment in personam in a litigation in which he is not designated as a party or to which he has not been made a party by service of process.A judgment or decree among parties to a lawsuit resolves issues as among them, but it does not conclude the rights of strangers to those proceedings.The law does not impose upon any person absolutely entitled to a hearing the burden of voluntary intervention in a suit to which he is a stranger. Unless duly summoned to appear in a legal proceeding, a person not a privy may rest assured that a judgment recovered therein will not affect his legal rights.A party seeking a judgment binding on another cannot obligate that person to intervene; he must be joined.Rule 19(a) provides for mandatory joinder in circumstances where a judgment rendered in the absence of a person may leave persons already parties subject to a substantial risk of incurring inconsistent obligations.Parties who choose to resolve litigation through settlement may not dispose of the claims of a third party wihtout that party's agreement. A court's approval of a consent decree between some of the parties therefore cannot dispose of the valid claims of nonconsenting intervenors.

APPLICATION:

CONCLUSION:

A voluntary settlement in the form of a consent decree between one group of employees and their employer cannot possible "settle," voluntarily or otherwise, the conflicting claims of another group of employees who do not join in the agreement.