Civil Procedure Note SummaryFall 2011: Peterson

Chapter 2: Personal JurisdictionA. Introduction & Integration a. Before you sue, you must determine which court has the authority to decide a caseb. Personal jurisdiction- dictates the circumstances under which a court has authority to make

decisions binding on the two partiesc. Injunctive relief- plaintiff gets a judgment in which the defendants are ordered by the court to do

or refrain from doing somethingd. Can attach real estate or other property to make a judgment binding and enforceable

B. Constitutional Limits on Personal Jurisdiction

1. The Fountainhead

a. Types of Personal Jurisdictioni. In personam- based on person in the state, against a person

1. Jurisdiction based on the power of the court over the individual2. Defendant must be domiciled in forum state or receive personal service of

process when he’s in forum state. 3. Territorial service- came from England from the courts wanting to have the

power to enforce their judgments ii. In rem- based on presence of property in forum state against the whole world

1. Jurisdiction based on the court’s power over property in a case in which the claim arises out of that property (trespass, damage to real property)

iii. Quasi in rem- based on existence of property in state seized in order to effect personal jurisdiction, but property has nothing to do with the case

1. Jurisdiction based on the court’s power over the property based on the case where the property is not involved, but

2. Property is the mechanism by which the court gains the power to render a judgment against an individual

3. Why isn’t it a rule that they can seize the property at some point during the litigation? Why at the beginning?

a. Need to make sure at the beginning of the case that the jurisdiction is guaranteed and that the judgment will be enforceable

b. Court can’t adjudicate it if there’s no PJ at beginning c. Presence of property gives them jurisdiction- problem is that D can sell

the property during the trial, and then would lose the jurisdiction, would be a waste of time and money if there was a loophole that allows them to lose jurisdiction mid-trial: courts need to be efficient

b. Just because a court has jurisdiction over a case doesn’t mean that it can apply their law to the case and vice versa

c. Federal Personal Jurisdiction- Rule 4(k)a. The District Court will use the same laws as the state statute in which the District Court

sitsd. Statutory limits on Personal Jurisdiction

a. New York Rule : A tort is deemed to have been committed within the state only if the tortious act or omission itself, and not merely the injury resulting therefrom, occurred in the state (Feathers)

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b. Illinois Rule : A tort resulting in damage or injury within the state is deemed to have occurred inside the state regardless of where the tortious act or omission took place (Gray vs. Am. Radiator)

c.e. Full Faith and Credit

i. Federal common law- essential for judgment to be valid, the court has to have proper power over the individual (English & American tradition), and is required by the due process clause of the constitution

ii. Reasons: To be able to satisfy 14th amendment, constitution says so, to maintain personal liberty, “full faith and credit” clause of constitution

4. Other states enforce judgments only if they’re valid (adequate personal jurisdiction) If no PJ, then the federal court is required to not give affect to the earlier judgment

5. States will give full faith and credit to other states’ laws (marriage licenses) 6. In order to enforce Mitchell v Neff in Neff v. Pennoyer, there must have been

personal jurisdiction in Mitchell v. Neff. f. Notes on Pennoyer v. Neff

i. Res judicata- already been settlediii. So need to file a collateral attack in another lawsuit iv. Can only argue PJ in collateral attack if there was a default in the first case- if it was

litigated, you already had the chance to argue personal jurisdiction g. How to link territorial service to Due Process

i. Harm doesn’t have to be done in the forum state, just served in forum state1. Procedural due process- someone needs to be able to defend themselves in the

forum in personii. Justice Field’s rule- if you’re served in California, have to appear, even if north to south

California 1. It’s very over inclusive and under-inclusive 2. Rough proxy for convenience and ability to defend 3. Substantive due process standard: theory of social contract4. State gives you benefits- social contract is that while you’re in the forum state,

you get protection, but have to appear in court in return5. So if you don’t have social contract, you don’t owe any responsibilities 6. Lockean- consent of the governed (quid pro quo with forum state) 7. Deals with limits of substantive due process- limits of absolute power of courts

PENNOYER v. NEFF (guy took his land without his knowing, sued new resident) Issue: Can a state court exercise personal jurisdiction over a non-resident who has not been personally served while within the state and whose property within the state was not attached before the onset of litigation?Rule: No. A court may enter a judgment against a non-resident only if the party 1) is personally served with process while within the state, or 2) has property within the state, and that property is attached before litigation begins.

Court doesn’t have jurisdiction unless the D appears, is found within the state, is a resident, or has property there, and in that case, only has jurisdiction when that property is attached to the case in some way.

o In the case, property wasn’t attached to the case, wasn’t under the jurisdiction of the court, only involved by the enforcement of a personal judgment

In order for there to be quasi-in-rem jurisdiction, plaintiff has to attach the property at the time that the case arises (guarantees that the court has PJ)

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Traditional Bases of Due Process

a. Must have one of four traditional bases to get personal jurisdictionb. 1) Territorial Service- service on defendant while D was in forum state, good for service

regardless of where issue arosec. 2) Property Within Forum State (rule changes after Shaffer v. Heitner)

a. Pennoyer rule: property must be seized at beginning of legislation in order to confirm court’s jurisdiction, but can also do in personam jurisdiction if D is there

b. Normally jurisdiction limited by value of property in forum state and the value that you’re being sued for

d. 3) Domicilea. Dependent on the type of entity that you’re suingb. A natural person (residence, plus an intent to stay indefinitely- objective manifestations

of what that subjective intent is {banks, churches, clubs}) c. A corporation (where they are registered- state that provides the law of their corporation-

DE is popular)d. Can only have one domicile- change when leave parents’ home

e. 4) Consent a. 14th amendment is an individual right not to be deprived of property without due process

of law (right belongs to defendant, and D can waive this individual right)b. Can waive before proceeding begins (via contract specifying where case would be heard)

or wave it in a case just by showing up at courtc. Can waive inadvertently by not asserting it properly (Rule 12(b, h, g))

2. Interim Developments

a. Increasing role of corporations in society tested boundaries of in personam jurisdictioni. Could only be sued in personam while within boundaries of state

ii. OR a state could require a person to designate an agent for service if they want to do business in that state (Privileges and Immunities Clause)

iii. State power was limited by the Commerce Clause b. Increase in travel and mobility made service more difficult, and forced victims to travel to the

defendant’s state for any recourse i. Could attach some “res” like a debt (property) to the case, and then defendant was subject

to a quasi in rem type 2 suit (court has jurisdiction wherever his debtors were located) OR person is subject to in personam jurisdiction at their domicile, whether or not they are physically served there (like in Harris v Balk)

HESS v. PAWLOSKI (PA resident hit plaintiff in MA, then drove home)Issue: Did the Massachusetts enactment appointing an agent for service for everyone who drives on Mass. highways violate the due process clause of the 14th amendment? (Issue of implied consent)Rule: No. The state has the power to exclude a nonresident until the formal appointment is made, and the use of the highway can therefore be seen as the appointment of the registrar as an agent of process.

This decision came twenty years before Int’l Shoe and used implied consent rather than minimum contacts to establish jurisdiction over D. Should have been specific jurisdiction

By choosing to drive in a state, a non-resident demonstrates that the state is not so inaccessible or remote that it would be unfair to subject him to suit in that state.

The Massachusetts statute sought to put out-of-state drivers on the same level as resident drivers and did not discriminate against them.

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c. Why couldn’t Hess sue in Pennsylvania?i. Procedural Due Process Perspective

a. Witnesses and plaintiff and accident all happened in Mass. b. State has an interest in regulating roads, and protecting its citizensc. But it might be inconvenient for the defendant

ii. Substantive Due Process Perspective a. Does Hess have a connection with the state? He’s driven there; claim arises out of

that connection- defendant got a benefit from being in Mass.b. What is relationship with forum state? Defendant is voluntarily creating a social

harm in the forum state by actions they know will impact forum state d. “Interlocutory Appeal”

i. Final judgment says that you can’t appeal any part of a case until a final judgment is rendered by the court

3. The Modern Era

a. Jurisdiction and Corporationsi. Dealing with jurisdiction over corporations, courts moved away from terms from Pennoyer

like “presence” and “consent,” focused on whether or not they were doing business in the state

a. Courts had juris. if the company was doing business, none if they weren’t ii. Corporations are fictional entities- can you supply territorial service?

a. Corp’s are present wherever they “do business,” how to decide that?b. Learned Hand- needs some connection with forum state- principle is that you have

“minimal connections” so that the state can exercise its power over you- get rid of formal rule

INT’L SHOE v. WASHINGTON (company HQ’d in DE sued in Wash.)Issue: Can a Delaware company be responsible for paying state unemployment taxes to the State of Washington based on their “doing business” there? Rule: Yes. In order to subject a person to in personam judgment, if he’s not present within the territory of the forum, he needs to have “minimum contacts” with it such that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice”

Their activities were continuous and systematic, resulted in a large volume of interstate commerce, appellant received benefits and protection of the laws of the state to enforce the contracts made and therefore have an obligation to the sate

Notice to the contacts in the forum state gives “reasonable assurance” that the notice will be actual, and mailing of notice to Missouri was reasonable

Appellant has no office in Washington, no contracts for sales/purchases there, and they had 11-13 salesmen there earning $31k in commissions

Concurring: Blackwell: State statutes were not intended to prevent a company from following its obligations just because it is headquartered elsewhere

b. Need to Establish Jurisdictional Statute AND Due Processi. Satisfies WA jurisdictional statute because served in state on an employee of the company

and notice sent to HQ in Missouri ii. Satisfies Due Process because has “minimum contacts” with a state and have systematic

and continuous activities with that state & doesn’t offend FP&SJiii. State has interest, person got benefit from presence, ok to expect a quid pro quo

c. How to Decide if General or Specific:

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Claim Arises out of Contact Claim Doesn’t Arise out of Contact

Continuous & Systematic Jurisdiction OK (Int’l Shoe) General JurisdictionIsolated & Sporadic Specific Jurisdiction No Jurisdiction

d. Test:i. Do the defendant’s activities constitute “minimum contacts” and is the jurisdiction

consistent with “traditional notions of fair play and substantial justice”?e. Reasoning

i. Legal Formalism: relies on classifications and proper labeling, deduces conclusions from broad principles

ii. Legal Realism: thinks that laws must be understood in functional terms as a means to accomplish social ends

f. Note on McGee, Hanson, and Gray i. McGee: Judgment was binding because it was based on a contract which had substantial

connection with the state in which the judgment was given a. State had an interest in providing effective means of redress for its residents b. Practicality of plaintiffs affording to bring suit in another forum c. Quality and nature of a single act- possibility of being taken to court is directly

proportional to what ii. Hanson: when trust was created, no connection with state that later became her residence

a. There must be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, invoking the benefits and protections of its laws

iii. Gray: the company had benefited from the protection which the Illinois law had given the marketing of hot water heaters, so the Ohio company was bound in Illinois

a. The use of his product in the ordinary course of commerce, and (even though indirect) protection of his product by the state gives Illinois personal jurisdiction

b. Ease in transportation and communication has reduced the inconvenience formerly encountered in defending lawsuits brought in other states

Issues in Personal and Specific Jurisdiction

a. Jurisdictional Statutesi. Long arm statutes that benefits citizens of those states for the state to have broad

jurisdictionii. RI and CA- biggest long arm, but most states interpret jurisdiction broadly

iii. Disadvantages by the fact that every PJ issue becomes constitutional, because easily meet the jurisdictional statute limitation

b. Int’l Shoei. Marked new era because expanded Pennoyer (said must fit within one of 4 traditional

categories for jurisdiction consistent with DP, now 3 big categories)c. What is purpose behind general jurisdiction?

i. Supreme court doesn’t give firm standard, and lower courts are divided ii. Useful to have a “home base” for corporations

iii. Sufficient if the corporation is relegated to that state’s political process? a. Subject to jurisdiction if its interests are taken seriously by the political process of

the state iv. Contacts are usually measured at the time the suit was filed, not when claim arosev. What is “minimum contact”?

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a. Sometimes small offices and few employees enough, but wal mart’s 250 stores not enough

d. Specific Jurisdictioni. Contact is related to the controversy if it is the geographical qualification of a fact relevant

to the merits (would it be alleged in the complaint as the forum occurrence?)

WWV v. WOODSON (NY residents took car to OK, crashed)Issue: May an Oklahoma court exercise in personam jurisdiction over a non-resident company and its distributor when their only connection with Oklahoma is the fact that a car sold in NY to NY residents became involved in an accident in OK?Rule: No. There is no grounding for jurisdiction- no minimum contacts or relations- no financial benefit derived from it, no foreseeable relation with the forum state

They don’t have any sales there, don’t advertise, don’t seek out OK customers Without any contacts, ties or relations with the state of Oklahoma, there can be no in

personam jurisdiction exercised by the State courts over the petitioners. Needs to be some foreseeability in the connection with the state- if they actively advertise

there, etc. (but here they unilaterally took the product out of the state) Minimum contacts don’t necessarily need to arise out of the claim, but claim needs to

arise out of their contact with the forum state (Contacts don’t need to be related to the claim, but more than likely they will)

Dissent (Brennan): Court is looking too closely on contacts with state and not enough on state’s interest in hearing the case/any inconvenience to defendant to appear

o Contacts aren’t that important if the jurisdiction could still be fair & reasonable- state still has a duty to provide means of redress for its citizens

a. Stream of Commercea. Difference between Brennan and majority- there has to be some purposeful connection

between D and forum state (direct intent- shooting gun across state line, or receiving a benefit from forum state because you sell your product there)

b. What about foreseeability?a. If defendant’s conduct is such that he should “reasonably anticipate” being taken to court

there, then that connection and conduct are justified b. Orderly administration of the laws allows some predictability so that defendants can

change their conduct to anticipate potential suitsc. Test 1) Specific Jurisdiction limits on DP: Minimum Contacts: substantive due process

a. Minimum contacts- matter of interstate federalism i. It’s a restriction on the power of one state because it interferes with the power of

another stateb. But we can let individuals waive it, so is it about federalism? (That part overruled in

International Ireland case)c. Since we allowed waiver, it’s about an individual right, not about interstate federalism

d. Test 2) Specific Jurisdiction limits on DP: Procedural Fairness: procedural due processa. The burden on defendantb. The plaintiff’s interests in the forum c. State’s interest in adjudicating the disputed. Interstate judicial system interest in obtaining efficient resolution of issuee. Shared interest of states in furthering fundamental substantive social policies

Personal Jurisdiction in Federal Court

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a. In most cases, federal court would only have jurisdiction if the state in which the federal court sits would also have jurisdiction (Rule 4(k)(1)(A))

b. Fed. courts have nationwide serv. of process: antitrust, securities, bankruptcy, interpleaderc. Also: When (1) claim is based on a federal law (2) jurisdiction is constitutional (3) there is no

state which would have personal jurisdiction (ties to US but no state in particular)i. If you have “ties with US” then satisfy Rule 4(k)(2)

d. BUT basic contacts require that the forum not be unreasonably burdensome e. What about issue of “purposeful availment” where foreign entities don’t intentionally align

themselves with US markets?

Note on Keeton and Calder

a. Keeton sued Hustler magazine in NH because statue of limitations hadn’t expiredb. SC upheld jurisdiction because magazine copies sold there, injury occurred there c. And NH had a “substantial interest in cooperating with other states”d. Even though Keeton might not have had minimum contacts with the forum, ok because the

defendant dide. But can only sue on issues arising out of their activities there (magazine sales) f. Calder sued a writer of National Enquirer (article written and edited in FL) in CA

i. No research in CA, no travels from FL CAg. Many copies sold in CA, injury to reputation occurred in CAh. “Effects” test- where is the focal point of the story and where is the harm suffered? i. Sued on the effects of their Florida conduct on California j. If the (1) harmful affects arise within the forum and (2) the forum is the focal point/target k. So (1) claim arises out of forum, and (2) there are minimum contacts

Why Litigants Care about Where Litigation Occurs

a. Avoid inconvenient forum (difficult to move evidence, subpoena people) b. Just because dismissed for lack of PJ doesn’t mean that it can’t be heard somewhere else- so just

saving additional costs of inconvenient forum i. Bias of judges and juries

c. What law will be applied (different statute of limitations, different requirements)d. In some cases, states have PJ, but have to apply the law of a different jurisdiction

i. Speeding laws in x state where accident occurred e. Forum decides which law can be applied if there is a dispute f. Because only so many forums have PJ over a defendant, limited choice of plaintiff on where to

file the claim with a court that has the most advantageous laws

BURGER KING v. RUDZEWICZ (Mich. resident negotiating with FL company)Issue: Must a plaintiff show that an out of state defendant has both minimum contacts with the forum state and that it is fair and equitable to require a defendant to defend a suit in the state?Rule: Yes. Parties who reach out and create continuing relationships and obligations in another state are subject to regulation and sanctions in that state for the consequences of their activities. The defendant’s conduct and connection with the forum are such that he would reasonably anticipate being taken to court there.

Rudzewicz had continuing and direct contacts with Burger King. The fact that Rudzewicz’s contacts were purposeful allowed the state to exercise personal jurisdiction despite the fact that those contacts were minimal.

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The franchise agreement with Burger King allowed Rudzewicz to benefit from an association with a Florida corporation for twenty years.

Contract test: (1) prior negotiations (2) contemplated future consequences (3) terms of contract (4) actual course of dealing- what kinds of contacts did the contract actually create with the forum state

o Choice of law might be persuasive, but isn’t enough by itself o Where payments shipped, etc. (no fraud in contract, overweening influence)

The court held that there must be fair warning that a particular activity may subject a party to suit in another jurisdiction.

The fair warning requirement is satisfied when a party has purposefully directed his activities at the forum (knew because of contract FL laws would apply)

Dissent (Brennan)o It is unfair to require a franchisee to defend a case of this kind in a forum chosen

by the franchisor. Rudzewicz did no business in the state of Florida. The principal contacts were in Michigan with the local office of Burger King. Rudzewicz had a local operation with far less resources than Burger King. It would be fundamentally unfair for Rudzewicz to be required to defend in Florida.

a. Why does Brennan always dissent?i. Doesn’t like limitations on personal jurisdiction

ii. Uses Amazon example- but Amazon would have greater bargaining poweriii. If interstate transaction is random or attenuated, not fair for people to expect to be hauled

into court there

b. Deets for this case:i. Zurcher injured crash in motorcycle, so he sues Honda (dealer) and Cheng Shin

(manufacturer of tire), Cheng Shin then brings in Asahi (valve maker), so left with Cheng Shing v. Asahi on contract

ASAHI METAL v. CA SUP CT. (Jap/Taiwanese company- stream of commerce)Issue: Does mere awareness that your product might enter the forum state through the stream of commerce constitute minimum contacts, and offend traditional notions of fair play and substantial justice? Rule: No. Exertion of personal jurisdiction over Asahi by Superior Court of California exceeds the limits of due process. Would need to prove intent to serve market in forum state- designing product differently, advertising, marketing through that state’s distributor

Doesn’t pass reasonableness test (burden on defendant- [including subjecting Asahi to its dispute with Cheng Shin to a foreign judicial system], interests of forum state, plaintiff’s interest in relief, interstate’s judicial system efficiency and furthering fundamental substantive social policies)

Interests of plaintiff and California court isn’t enough to supersede the burden on defendant- issue before court is the indemnification asserted by Cheng Shin against Asahi (and plaintiff isn’t a CA resident, already settled its claim)

Concurring: Brennan As long as the litigant is aware that the final product is being marketed in the forum state,

the possibility of a lawsuit there shouldn’t be a surprise- OK PJ Benefits from product being sold there accrue regardless of the participant directly

conducts business there or not (so thinks stream of commerce is ok without purposeful availment) as long as you have fair play and substantial justice

Concurring: Stevens

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The court doesn’t need to articulate the “purposeful direction” bit about the stream of commerce- there isn’t a distinction between knowing it will end up there, and intentionally directing it there

c. Resultsi. No majority on the minimum contacts (4 saying it’s enough 4 saying it’s not enough 1-

saying it depends), But do have majority on fairness (not fair to defend.)d. Minimum Contacts: (O’Connor & 3 others)

i. Need to have some directed, purposeful availment of their actions to that stateii. So stream of commerce by itself doesn’t work, need something else like…

i. Marketing through distributor, designing a product for the forum state, advertising, customer service in forum, (office, employees, etc. but those might be general jurisdiction)

iii. Doesn’t address the “claim arises out of the contact with the forum state” iv. Related but not causally connected connections should count- O’Connor’s in Asahi

e. Minimum Contacts: (Brennan & 3 others) i. From depositions, we know that Asahi knew that they had valves in California

i. But said they didn’t know they were going to be sued thereii. Stream of commerce ok if they knew of the receipt of benefit from sale in forum state

iii. Knew they were putting their product into product sold in California, knew of the sales in California, benefited from the sales of California

iv. Why is it unusual that White joined Brennan? Because White was on the opposite side of Brennan in Burger King

v. Don’t need intentional action- forum state protects the sale, and they don’t prevent the sale there- benefit creates the obligation

f. Minimum Contacts (Stevens) i. There are minimum contacts (but don’t need “purposeful direction”)

ii. Need value, volume and hazardous character iii. But court is overstepping its ruleiv. Benefit is directly proportional to the risk of litigation

McINTYRE v. NICASTRO (metal shear from England company to NJ)Issue: Does J. McIntyre Machinery have enough of a connection with New Jersey so that the state can exercise personal jurisdiction? Rule: No. A court may not exercise jurisdiction over a defendant that has not purposefully availed itself of doing business in the jurisdiction or placed goods in the stream of commerce in the expectation they would be purchased in the jurisdiction.

Stream of commerce is only allowed if you’re “seeking to serve” that market Must have targeted the forum- not enough to predict that they might get there So need purposeful availment to have “fair play and substantial justice”

a. Difference between Asahi and McIntyre (same outcome- no PJ)i. Asahi - upstream manufacturer, sells component part to another manufacturer who then

sells it to a dealer but who doesn’t control where the product is solda. Need stream of commerce to satisfy minimum contacts, because received

benefit from the forum state, and knew they were getting the benefitb. Knowing receipt is enough to establish the contacts

ii. True for McIntyre? No- they had control over where the product was sent a. If they didn’t want their product sold in NJ, then could have specified that to

McIntyre US (but wanted to sell where and however much they could)

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b. Lack of control is the reason you have to rely on the knowing receipt of benefit (extreme theory) but that’s not applicable in that case- in this case McIntyre had direct control

c. Stream of Commerce Theoryi. Gray v. American Radiator- manufacturer receives enough benefit of Illinois law (contract

settings) that it’s enough to subject the Ohio manufacturer to its jurisd.ii. But Supreme Court split in Asahi

a. 4 people think you need something more than receipt of benefit, need some intentional action connecting the manufacturer to the place of ultimate sale (advertising, customer relations, distributor, product design)- need some intentional action directing conduct related to the product

b. 4 people think that the knowing receipt of benefit (even if only passive receipt of benefit) is enough- don’t need purposeful availment

c. Stephens- should be enough if they receive a benefit from forum state, as long as value, volume is high enough, and the hazardous character is such that they should reasonably expect to be haled to court there

d. How to Argue- how much product was sold to forum state, what was their value to the amount of product?

i. Have expert witness talk about the hazards of water heaters (Gray) and how often it malfunctions, what happens when it does, benefit they’re getting from Ohio, shipped directly there? Know they sell there? Targeting that market?

ii. So if prove those, then satisfy 5 members of Asahi court e. McIntyre v. Nicastro

i. 4 members- same theory as O’Connor’s in Asahi, so contacts aren’t enough because no intentional direction of the product, because distributor not manufacturer sold the product- need more of a contact

ii. Bryer- harder case because only one product, so that’s too small a basis to exercise jurisdiction (but it’s a $32,000 machine?)

a. But potential to being sued is directly proportional to the number of what is sold- some benefit that creates a relationship between defendant and forum state that requires them to submit to the jurisdiction, benefit is proportionate to the obligation

f. What questions would you ask if you were plaintiff in McIntyre? i. How much directed action was going on? What were the expectations? Discover showed

that they want to sell everywhere ii. Would want to know how the machine got to NJ (did customer take it there or did they ship

it from UK to NJ?) iii. If ship it right to NJ, then know their contact, is intentional purposeful availment, direct

action between defendant and forum state g. Why no federal court? Doesn’t matter- result is the same

i. Need a federal long arm statute- would be subject to same personal jurisdiction as the state in which they’re sitting so would have been the same issue: 4(k)(1)(A)

h. How to argue plurality opinioni. In Asahi, 5 said minimum contacts were adequate

ii. In McIntyre, 6 said that the contacts were inadequate iii. Go by narrowest member of whatever majority you can construct

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4. General Jurisdiction

GOODYEAR TIRES v. BROWN (defective tires from Turkey, boys from NC)Issue: Were Goodyear’s foreign subsidiaries in-state contacts sufficiently “continuous and systematic” to justify the exercise of general jurisdiction over claims unrelated to those contacts?Rule: No. No general jurisdiction because no continuous and systematic activity and no activity in forum state that gave rise to the episode in the suit

A court must have either specific or general adjudicatory authority for it to have jurisdiction over the defendant.

Specific when suit arises out of/ relates to the defendant’s contacts with the forum General when the continuous corporate operations within a state are so substantial as to

justify suit against it on causes of action arising from dealings entirely distinct from those activities.

NC long arm statue doesn’t apply, because the act that caused the injury and its impact both occurred outside the forum

Can’t allow that expansive a rule for jurisdiction just because their purchases and distributions made in that state through intermediaries- bad precedent because then any major manufacturer would be liable to be sued in any forum

a. Important Jurisprudence changes a. Prior to Goodyear- isolated contacts are not enough, extensive contacts are enoughb. After Goodyear- stream of commerce doesn’t work for general jurisdiction

b. Why couldn’t they sue Goodyear USA? i. Court is required to recognize that those 3 companies are different entities

ii. Just like in Gray (below), there is a connection between Goodyear Turkey Goodyear USA NC through stream of commerce (holding for general jurisdiction)

c. What about specific jurisdiction ?i. Court said might count for specific if the claim arises out of something in NC, but too

attenuated to hold for general jurisdiction of Goodyear turkey in NC (not systematic and continuous relationship in forum state to make them responsible for claim no matter where the accident arises

ii. Defendant wants a sprawling general jurisdiction rule- any major distributer could be liable for anything anywhere- not enough

d. Stream of Commerce i. Originated in Gray v American Radiator

ii. AR buys valves for its radiators from Titan Valvesiii. Titan in Ohio, AR in PA, Gray in Illinois sues AR and Titan in Illinoisiv. Gray is trying to prove specific jurisdiction- sold product in Illinois, received benefits of

Illinois business laws, product exploded in Illinois, v. AR doesn’t get benefit from Titan unless AR can sell their products wherever- so they

voluntarily allow their products to go into stream of commerce e. Specific Jurisdiction

i. Adjudicatory authority is “specific” when the suit arises out of or relates to the defendant’s contracts with the forum (rule from International Shoe)

ii. Commission of single or occasional acts in a state may be sufficient to render a corporation answerable in that state with respect to those acts, though not with respect to matter unrelated to the forum connections

iii. Definitely has authority when activity is continuous and systematic and that activity gave rise to the episode in suit (Get General & Specific)

iv. Did the defendants avail themselves to the privilege of conducting activities within that forum state, thereby invoking the benefit of the protections of their laws?

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f. General Jurisdiction i. Adjudicatory authority is “general” when the continuous corporate operations within a

state are 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

ii. Individual- their domicile, company- their headquartersiii. Continuous and specific activity, not attenuated, sporadic and unintentional iv. Hard for individual to get general jurisdiction or to have continuous and systematic contact

with a state where they don’t live/work

Supreme Court Cases on Jurisdictiong. General Jurisdiction:

a. Perkinsa) Headquartered in Ohio- where they are incorporated- really “home”b) Philippine company temporarily HQ’d in Ohio- could be sued there

b. Property and business operationsc. Sales to Forum State

a) Not through stream of commerce but directly to the state by defendant d. Helicopteros

a) Meetings of CEO in Texas wasn’t enough to have min. contacts thereb) Some meetings there, cashing checks isn’t enough, training people isn’t

e. Goodyear Tires a) Too attenuated- stream of commerce not subject to the defendant’s control

h. Personal Jurisdiction: a. McGee v. Int’l Life Insurance

a) Life policy with Texas insurance companyb) Policy assets sold to Int’l Life- no ties with California as a company c) He sues Int’l Life in California d) Accept his payments from California, and by accepting that, kept a relationship

with a citizen of California e) What CA is asking from you is related to your contact with that state

b. Hanson v. Decnklaa) Turning point of personal jurisdiction in 20th centuryb) Person who had a trust moved from Del. to Fl. then sued bank over

management of the trust c) Shouldn’t matter whether D has contact with forum state, as long as forum

state had interest in the matterd) What is permitted when they want to apply their own state’s law to that suit? e) Not enough contact in this case- have to have purposeful availment of rights

and benefits of contacts in forum state f) Claim must arise out of purposeful contact with forum state or substantive due

process aspect of due process is not met1. Not this case- only have a connection because P moved there

5. Consent and Forum Selection Provisions

a. Personal jurisdiction is a waivable, personal rightb. Can waive in advance of jurisdiction (appointing an agent for service of process, consent)c. Failure to object to jurisdiction constitutes a waiver of that objection d. SC stated that by submitting to the jurisdiction of the court for the purpose of challenging

jurisdiction, D agrees to abide by that court’s determination on jurisdiction

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e. Courts are split on enforcing contracts that specify where a potential dispute will be hearda. Want to protect local citizens’ rights of access to justiceb. Private parties shouldn’t be able to “oust” a court of jurisdiction

f. For international companies, usually follow forum clause unless there is a strong case not to- parties usually select a neutral location (not home forum of either)

a. Successfully prevents a waste of time in pre-trial motions to decide forum

6. In Rem and Quasi In Rem Jurisdiction

a. Quasi-in-rem jurisdiction allows plaintiff to acquire jurisdiction over D wherever the D has property in the forum simply by attaching that property to the case

i. Can attach a person if they owe money- debt is “property” (Harris v Balk)

SHAFFER v. HEITNER (Goodyear DE case from CEO to stockowner)Issue: Can a state obtain personal jurisdiction over a party based on that party’s ownership of property in the state? Is quasi in rem jurisdiction subject to the constitutional requirements of minimum contacts?Rule: No/Yes. A state cannot obtain personal jurisdiction over a party based solely on that party’s ownership of property in the state.

If jurisdiction over property involves jurisdiction over a person’s interests, the proper standard is the minimum contacts standard of International Shoe.

This makes the assertion of jurisdiction over the property an assertion of jurisdiction over the person, and makes it consistent with due process clause

Heitner never pleaded minimum contacts, so court couldn’t decide on it

Concurring (Powell) Wants to use International Shoe test for QIR jurisdiction for property because decreases

ambiguity of the rule He reserves judgment as to whether ownership of real property in a jurisdiction may

provide the contacts necessary for jurisdiction. Quasi in rem jurisdiction should remain valid when real property is involved.

Concurring (Stevens) This holding should not be read to invalidate in rem jurisdiction. Has issues with the decision, because thinks it will be too far-reaching, thinks there might

not be enough notice or foreseeability is sufficient to give jurisdiction Concurring in Part and Dissenting in Part (Brennan) Should use minimum contacts to decide court’s jurisdiction for quasi-in-rem jurisdiction BUT court is wrong on its interpretation of minimum contacts

o Need both notice and a long arm statute (no statute in this case) Delaware should still be able to hear the case and to have jurisdiction because the state

has interest in actions centering on the conduct and policies of directors of a corporation incorporated in their state

o BUT Heitner never pleaded that the defendant’s had minimum contacts Greyhound’s choice of incorporation in Delaware is a prima facie showing of submission

to its jurisdiction. There was a voluntary association with the State of Delaware invoking the benefits and protections of its laws. The majority opinion is purely advisory once it finds that the state statute is invalid.

b. Why this standard is sufficienti. Most cases are clear, and whatever is sacrificed in clarity is ok, because it would otherwise

be unfair- fairness standard can be applied to most cases

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a) But when it is unclear, cost of simplifying might be the sacrifice of substantial justice, which is too high

b) Don’t sacrifice the fairness of jurisdiction, just to get a simpler rule c. In this case- claim didn’t arise out of their ownership of stock- arise out of their role as officer

(don’t need to own stock to be an officer) d. So pretty much eliminates QIR jurisdiction because you can’t say they have property there, and

can’t get specific jurisdiction because claim doesn’t arise out of that property

7. Transient Presence

a. Shaffer held that just because you have property in the forum state, it’s not sufficient to establish jurisdiction there- In state service is no longer necessary

b. But what about out of state people served in forum state? Is that enough for PJ?

BURNHAM v. CA (Divorced husband served when visiting kids in CA)Issue: Can a state gain personal jurisdiction over a nonresident who was personally served with process while temporarily in the state, if his purpose for being in the state is unrelated to the matter before the court?Rule: Yes. A state can gain personal jurisdiction over a nonresident who was personally served with process while temporarily in the state, even if his purpose for being in the state is unrelated to the matter before the court.

States have jurisdiction over persons physically present in the State. Service of process on a party physically present in a state is not a violation of due process.

The purpose for the party’s presence within the state is of no concern as long as his presence was voluntary

Concurring (White) Service in state over an out of state resident is allowed, as long as the presence in the

forum state is intentionalConcurrence (Brennan/Marshall/Blackbun/O’Connor) Doesn’t agree with a rule that relies on tradition for supporting forms of jurisdiction-

agree with it because it’s fair not because it’s been there for so long Wants to look at the fairness of the state service rule All rules of jurisdiction must satisfy contemporary notions of due process under

minimum contacts analysis Because of clear holdings in cases across the country, a defendant who is voluntarily

present in a particular state has clear notice that they are subject to suit in that forum state

a. Distinguishes from Shaffer because Schaffer deals with QIR jurisdiction, but this deals with territorial service on an out-of-state resident

Jurisdiction over Corporations & Partnershipsa. Corporations used to only be able to sue in the state in which they were incorporatedb. But now can be sued in any state where they have purposeful contactsc. Can serve someone appointed to be an agent for process, but can’t serve someone (executive

officer) in a forum where they have no place of business, even if they are there on business of the company

d. Most jurisdictions hold that states have to appoint an in-state agent for service of process, but most places think its ok to have in state service on a registered agent without regard to the corporation’s other contacts

e. Others say that appointing an agent of service is only sufficient for specific jurisdiction if the case arises out of the corporation’s in-state activities

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f. Can look at whether it was a parent or subsidiary company that did the activity, but can’t shield parent company if subsidiary only did its action because parent told it to

g. Corporation is legal entity separate from the people who operate it h. Most courts hold that partnerships are separate legal entities that can be sued, personal service on

a partner who is in the forum on partnership business is sufficient to confer jurisdiction over the partnership as a whole

8. Personal Jurisdiction and the Internet

REVELL v. LIDOV (Libel suit felt in Texas, sued Revell and Columbia University)Issue: Can a forum state exercise personal jurisdiction over a party who writes/hosts an article injuring a party in the forum state if the article is not directed at the forum state or any activities occurring there?Rule: No. A state may only exercise personal jurisdiction over a party who writes/hosts an article injuring a party in the forum state if the article is directed at the forum state or activities occurring there.

General jurisdiction can’t be obtained over Columbia U. Both the effects test of Calder and the low-level interactivity of the bulletin board show that there are insufficient contacts with Texas to establish the jurisdiction of its courts

Due process requires that the defendant’s conduct and connection with the forum state be such that he could reasonably anticipate being sued there.

Not sufficient because website didn’t interact enough with the Zippo test- passive or active test (very interactive, can have contact with that state, but if

only passive, no room for interaction- then not active)

Final Personal Jurisdiction Outline

I. PERSONAL JURISDICTIONa. (1) Satisfies Jurisdictional Statuteb. (2) Satisfies Due Process

i. Traditional Sources 1. Territorial service2. Domicile

a. Natural Persons – Citizenship 1. Residence (physical element)2. Intent to stay (Domicile retained until both elements change)

b. Corporations : State(s) of incorporation3. Consent

a. Allowed by a contract of equal bargaining powerb. Consent by inaction- not filing motions to dismissc. Consent by action- Int’l Ireland- allowed court to decide whether they had PJ, so

submitted to their authority (appoint service/implied- Hess)ii. General Jurisdiction (need to satisfy both requirements)

1. Contact with forum state (substantive due process)a. Continuous and systematic (domicile)b. Ongoing and uninterrupted flow of connectionc. Contacts with the forum are so pervasive that the corporation is subject to

jurisdiction in the State’s courts no matter where in the world the claim arises (Compare Helicopteros with Perkins)

2. Fairness- Reasonable to expect D to be subject to PJ no matter where the claim arises (procedural due process) (same 5 as below)

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iii. Specific Jurisdiction (need to satisfy all 3) 1. Claim arises out of contact with forum state

a. If sold to NY person who later took to PA, then didn’t arise out of contacts from which the claim arises, contacts are related- but intend to serve that market?

b. SC doesn’t say whether related contacts count even if they don’t relate with the claim that arises out of contact with the forum state

2. Minimum Contacts (substantive due process)a. Need to have purposeful availment of defendant to make contact with forum state-

not that consumer takes it somewhere else (difference between Gray and VW) b. Stream of Commerce theory (Three competing theories in Asahi)

i. O’Connor: Stream of commerce PLUS some action purposefully directed at the forum state. Awareness that the stream of commerce will sweep the product into the forum state isn’t purposeful availment.

ii. Brennan: Any manufacturer in the stream of commerce is liable to suit in the state of the ultimate buyer because manufacturer receives a benefit from that sale. Contacts can be established through mere knowledge that the product will end up in the forum state without any other directed activities (ie. any contact through a chain of distribution is sufficient for minimum contacts). (Gray v. Am. Radiator)

iii. Stevens: Whether or not manufacturer’s conduct rises to purposeful availment affected by volume, value, and hazardous character of the components.

1. Volume increases exposure to suit2. Value increases benefits derived3. Hazardous character increases potential liability and forum

state’s interest in protecting its citizensc. Justice white in WWV seek to serve market, advertise, facilities there, sale to

people you knew from forum stated. Contracts- (1) prior negotiations (2) contemplated future consequences (3)

language of the contract (4) actual course of dealing- what kinds of contacts did the contract actually create with the forum state

i. Choice of law isn’t enough by itself, but may be relevant in determining whether or not D should expect to be haled into courts in that forum

3. Fair Play & Substantial Justice (balance all) (procedural due process)a. Burden on the defendantb. Plaintiff’s interest in forum/need to file in that particular statec. Forum’s state interest in hearing the cased. Judicial efficiency (interest of interstate system of justice, where evidence and

witnesses are located)e. Impact on substantive law (doesn’t adversely impact underlying substantive law-

child custody NY to CA)

i. Internet Jurisdictiona) Zippo Test (Zippo)

1. Interactivity test, sliding scale from “passive” to “interactive”a.Measures the activity of the site ownerb.Passive – site owner may only post information to websitec. Interactive – site owners engage in repeated contacts with forum

residents over the internet

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b) Tortious Effects Test (Calder)1. First apply Zippo, if “passive” no jurisdiction, if “interactive” then apply

Calder test2. Whether defendant “expressly aimed” their conduct at the forum state3. Tests whether the forum is both the (1) focal point of the story and (2) the

harm suffereda.Factors include:

i. drawing sources from forumii. activities of the target within the forum state

iii. directed conduct at residents of forum stateiv. knowing forum state will bear the brunt of the harmv. targeting a reputation within the forum

c) Must still examine fairness

C. A Different PerspectivePurposes of Personal Jurisdiction

a. Why are there limits on personal jurisdiction?b. Even the most convenient forum may not have jurisdictionc. The sovereign has a legitimate right to exercise authority over a particular individual d. Legitimate authority only stems from the consent of the governed

i. So need to consent or be in contact with the governed e. Need an economic check on state’s ability to exclude and their desire to have people bring in

business to improve their economyi. Want the benefits a state receives to be higher than the burden of having an outsider do

damage to their state f. Personal jurisdiction is less of a protection of individual liberty and more as a device for

regulating interstate federalism (some believe)

Personal Jurisdiction in Other Countriesa. In other states, don’t require there to be a related claim to the propertyb. Don’t limit amount of award to the property attachedc. French citizens can only be sued in France

Chapter 3: Notice and Opportunity to be Heard

A. Introduction & Integration

B. Notice1. The Constitutional Requirement

a. 14th amendment requires there to be “notice” and an “opportunity to be heard” before an individual can be deprived of their rights/property

MULLANE v. CENTRAL HANOVER BANK (NY trust with many beneficiaries) Issue: Is notice given to out of state parties by publication in a newspaper, when the parties’ addresses were known, constitutional in light of the Due Process Clause of the Fourteenth Amendment?Rule: No. Notice must be reasonably calculated to inform known parties affected by the proceedings

Balancing test- “reasonably calculated under all the circumstances to apprise interested parties of pendency of the action”

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o What is impact to the state? Company shouldn’t be burdened with notification requirements? What impact to stakeholders and protection of individual rights? What is reasonable with time and technology?

Property cannot be subjected to a court’s judgment unless reasonable and appropriate efforts have been made to give the property’s owners actual notice of the action

2. Statutory Requirementsa. Due process clause sets minimum standards for notice

i. Fundamental requirement of due process : any proceeding which is to be accorded finality is notice reasonably calculated to appraise interested parties of the pendency of the action and afford them an opportunity to present their objection

ii. Constitutional validity : when there is reasonable certainty to inform those affected, or conditions do not permit reasonable certainty, the form of notice is defensible when the form of notice is not substantially less likely to give notice than other feasible and customary substitutes

iii. Notice for known persons : Notice must be reasonably certain to reach most of those interested.

b. Some courts have more demanding requirements than constitution- they must have had more than notice to defendant and constitutionally sufficient relationship between D and forum before they get jurisdiction of the case

NATIONAL DEV. CO. v. TRIAD HOLDING CORP. (arms dealer in NYC)Issue: Was process served at Mr. Khashoggi’s NYC apartment proper under Rule 4(e)(2)(B)? Rule: Yes. A person’s dwelling is an adequate place to serve them if they have sufficient indicia of permanence and if the defendant was actually living there at the time.

Rule 4(1)(d): permits service to a person by delivering summons and complaint to the individual personally, or leaving copies at the individual’s dwelling house or usual place of abode with a person of suitable age and discretion residing therein

3. Immunity, Evasion and “Sewer Service”a. Immune from service when you’re a witnesses coming to testify, lawyers coming for

trial, induced into state through fraudb. Sewer service- where process servers certify that the process was served when it actually

wasn’t

4. Rule 4: Summonsa. In General- governed by Rule 4(a)(1) must contain:

i. Name, information, when & where must appear ii. Summons protects individual rights- no longer arrested for civil cases, but still is

the ceremonial action of court’s power over an individual1. After this in-person summons, then all other motions can just be sent to

attorneys iii. After giving service, person required to file with the court proof that did so

b. Service of Summons i. If a civilian serves, then has to sign affidavit that they did so

1. Rule 4(c)(2): personal service may be made by any person who is over 18 years of age and not a party to the action (US marshal ok)

ii. Failure to prove service doesn’t affect the validity of servicec. Waiver of Service of Process: Rule 4(d)

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i. Plaintiff can solicit a waiver by sending D the complaint, two copies of a notice and request that the D waive formal service of the summons

ii. D’s incentive- avoid unnecessary expenses of serving summons 4(d)(1), court can impose costs on D if he refuses to waive service w/o good cause, and D gets 60 days instead of 20 to respond to complaint

iii. Rule 4(d)(2): if you don’t have a good reason, then you personally pay for service of process and pay attorneys fees for their motions

d. Methods of Service on Individuals: Rule 4(e)i. Rule 4(e)(2): ways to serve:

1. Service personally on the defendant (hand it to them)2. Leave a copy at the dwelling house with someone of suitable age and

discretion who resides there3. Service on a designated agent appointed by statute or by the defendant to

receive process4. Serving individuals defendants under the provision governing service on

individuals in the courts of the state where the federal court sitsii. Rule 4(e)(1): option to serve under state statutes of the state where the court is

located (forum state) e. Methods of Service on Corporations and Other Entities: Rule 4(h)

i. Can also use waiver, state rules, and service on an agent of the corporationii. In the manner prescribed by Rule 4(e)(1) for serving an individual

f. Federal Court Jurisdiction: Rule 4(k)i. “Territorial Limits of Effective Service” specifies when a federal court may

assert personal jurisdiction over a defendant served under Rule 4ii. Rule 4(k)(1)(a)- would the courts in the state in which the federal court sits have

jurisdiction over the case? If so, can hear case1. Reach of personal jurisdiction in a federal court is the same as the reach

of PJ in the courts of the state in which it sits 2. Federal courts have jurisdiction on impleaded parties served within 100

miles of courthouse (Rule 4(k)(1)(b)).iii. Parities subject to interpleader jurisdiction Rule 4(k)(1)(C) OR if some other

federal statute provides that service suffices to support jurisdiction for a particular type of case

iv. And federal question cases (where parties have sufficient contacts with US as a whole- Rule 4(k)(2)

g. Just because Rule 4(k) authorizes the jurisdiction doesn’t mean that it’s constitutionali. Federal court’s personal jurisdiction limitations are found in 5th amendment

(NOT 14th amendment)ii. 5th amend requires that D have a minimum contacts with all of US, not with any

one state, most fed cases look to 14th amend because they follow Rule 4 of FRCP- tell judge to look at what rule applies in the state court

iii. Constitution would allow broader reach of personal jurisdictionh. Length of Time

i. Rule 4(m)- service of process must be made within 120 days of filing the complaint or action may be dismissed

1. Plaintiff can show “good cause” for not submitting within 120 days2. This is separate from and in addition to the requirements of any

applicable statute of limitations i. Challenges to Personal Jurisdiction

i. Challenges to service of process (motion to dismiss under 12(b)(5)) attacks adequacy of giving of notice.

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ii. Rule 12(b)(2) questions the power of the court to exercise personal jurisdiction over him

iii. Both must be met for the case to proceed

C. Opportunity to Be Heard

Chapter 4: Subject Matter Jurisdiction

A. State Courts & General Subject Matter Jurisdictiona. Diversity Jurisdiction- jurisdiction based on the citizenship of the various parties, but jurisdiction

over the case, not the people b. Powers given under Article 3 of Constitutionc. Section 1: Tenure and protections of tenure for federal judges

i. Protected federal judges, but under “good behavior,” service until impeached and convicted

d. Section 2: What is allowed for federal courts to hear (by congress) i. 28 USC 1331 (federal question) 1332 (diversity) §1333 (admiralty) §1334 (bankruptcy)

§1335 (interpleader)

B. Federal Courts and Limited Subject Matter Jurisdiction a. Federal Jurisdiction

i. Limited jurisdiction (expressly listed in constitution or it doesn’t exist)ii. Presumption against federal jurisdiction

iii. Burden of pleading jurisdiction adequately is on the party asserting federal jurisdiction (P if filing in fed court, or on D if moving case from state to federal court)

1. Federal jurisdiction isn’t waivable at any time during the initial proceeding- Can be waived at any time if no SMJ

b. Types of Jurisdictioni. Big Three: federal question, diversity, alienage

ii. State courts are required to hear federal claims (concurrent jurisdiction over federal question and diversity cases)

iii. Ways to show intent to stay:i. Drivers license, registration to vote, in-state college tuition, job

STRAWBRIDGE v. CURTIS ()Issue: Does every defendant and plaintiff have to be from different states for diversity? Rule: Yes. 28 USC 1332 mandates that no plaintiff be from the same state as any defendant.

Required complete diversity, money in excess of $75,000 But under interpleader, as long as there is minimal diversity, ok for federal SMJ

MAS v. PERRY (two way mirrors)Issue: Did Mrs. Mas ever change her domicile to Louisiana, eliminating complete diversity? Rule: No. Domicile requires two things: taking up residence in a different domicile with the intention to remain there. A person remains a domicile of one place until that person has adopted a new domicile through physical presence and intent to remain.

Mrs. Mas was domiciled in Mississippi, Mr. Mas domicile in France The state of a person’s residence is not necessarily the state of domicile for

purposes of establishing diversity jurisdiction

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Citizenship of Entities- Businesses are either corporate or non-corporate

o Corporate: defined citizenship of corporations for diversity purposes Like private companies If a company is registered as a corporation by the laws of its state in which it

was formed, then its citizenship is defined by §1332(c)(1)o Non-Corporate: congress hasn’t defined

Like: partnerships (law firms), LLC’s, labor unions, insurance Partnerships and non-incorporated businesses are not seen as separate entities

separate from the persons who own and run them So 1332(c)(1) doesn’t apply to non-incorporated businesses Each partner is jointly & severally liable for liability business incurs Businesses are citizens of all states in which its members are citizens HQ in NYC with office in NY, NJ and CT- citizens of all three states

Complete Diversity- Must be complete diversity across the v. (plaintiffs can be from same state and defendants

can be from same state, but can’t cross over)- For individual citizens, citizenship is your common law domicile

o Where you live and intend to stay indefinitely (physical and mental) o Indicia of permanence (license, membership in organizations, banks) for subjective

test of intent to stay- Until they both change, no change in domicile

Federal v. State Court- Prevent hometown bias - Difference in how judges are selected- election or appointed? How qualified?- Law that is applied might be different - Juries (selection process and composition) - Time to a jury trial - Federal courts don’t hear domestic relations cases

Assignments of Claims- P who isn’t diverse might try and “manufacture” diversity to get it into federal court- Or assign her claim to someone who could invoke a diversity claim- §1339 doesn’t allow the improper or collusive joinder to invoke jurisdiction of a court - If the assignor isn’t just a collection agent for assignee, then can have jurisdiction, but if they

give x% back to original assignor, violates 1339

Amount in Question- Amount pleaded in the complaint controls unless the party seeking a dismissal can show to a

legal certainty that the plaintiff cannot recover that amounto Even if you recover less than $75k, doesn’t mean that case should be dismissed

- No amount in question requirement for federal question cases - Punitive damages aren’t recoverable for breach of contract- Can aggregate claims against the same defendant for total amount in question to exceed $75k

(Can’t aggregate multiple claims against multiple parties)o Like if jointly own land worth $100k, can sue and each get $50k, ok for fed ct

- Punitive damages are allowed to be put in amount of controversy

RANDAZZO v. EAGLE-PICHER (asbestos case, didn’t say where PPB was, poor pleading)

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Issue: Is the plaintiff’s listing of the domicile of a corporation in the complaint sufficient? Rule: No. Both the state of incorporation and PPB must be diverse under 1332(c)

Plaintiff must put both PPB and state of incorporation in pleading They must list their PPB and state of incorporation- corporations are dual citizens and

both elements must be diverse for federal SMJ through diversity Need to amend complaint to reflect the judge’s wishes- can’t be “cheeky”

BELLEVILLE v. CHAMPAIGN (P and D thought they were diverse, court found they weren’t)Issue: Are LLC’s considered corporations? Rule: No.

D and the lower agreed that they were diverse, court researches their citizenship and finds that Belleville is incorporated in Illinois not Missouri

Violated Rule 11- Veracity in pleadings- should have done more research first LLC’s are treated for citizenship purposes as if they are partnerships- citizens of

every state where their individuals are citizens D wanted to ignore SMJ, reinstate verdict, Easterbrook says no- can’t ignore SMJ

HERTZ v. FRIEND (P said Hertz was in California, Hertz said PPB was in New Jersey)Issue: ? Rule: Yes. .

Even though they are incorporated in New Jersey, their PPB is anywhere where they have a lot of stores-

Looked at legislative purpose of 1332- avoid out of state prejudice

Federal Question Jurisdiction- Why let federal courts hear cases?- Expertise in the law, uniformity in decisions, independence of federal law- Section 1331 only allows federal courts to hear any claim arising out of a federal law

LOUISVILLE RR v. MOTTLEY (lifetime RR pass, federal law changed, breach of contract)Issue: Is a breach of contract suit filed in federal court able to have federal question jurisdiction where the only contested legal issues were issues of federal law? Rule: No. Need a well-pleaded complaint that doesn’t anticipate defenses- only a straightforward claim that pleads everything you think was violated, shows court’s SMJ

For purposes of determining federal question jurisdiction, the court will consider only those aspects of the complaint that are essential to the claim.

Even though counterclaim arises under federal law, doesn’t give court SMJ Counterclaim can’t serve as a basis for “arising under” jurisdiction

Federal Question Jurisdiction- If the plaintiff’s claim for relief is based upon federal law, then satisfies the well-pleaded

complaint rule- Declaratory Judgments

o Declaratory judgments are only okay if they are supported by an independent basis of jurisdiction, like diversity of citizenship or federal question jurisdiction

o After Mottley- “Declaratory Judgment Act” which allows either a potential plaintiff, or a defendant to raise an issue which could be litigated in the context of a coercive suit (like tort negligence suit or breach of contract)

o Skelly Oil: when congress passed declaratory judgment, intended to give defendant’s a chance to file first, but didn’t mean to expand the scope of federal question jurisdiction

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o Legislative history of federal declaratory judgment act- can’t get in federal court, unless underlying coercive suit is one in which there was a federal question (since breach of contract is state issue, can’t

- Article III s. 2 §1331 “arising under” claim- SC in Osborne looked at “Ingredient” test- even a potential ingredient, then congress is

within its constitutional authority to hear the case o Congress has the power to overrule the Mottley decision by passing a statute that

could hear the type of case

Hypos- A sues B for breach of contract, B sues A under a federal law- can the counter-claim be

moved to federal court?- Logically shouldn’t make a difference who files first, but removal statute says that

federal law counterclaim can’t be removed to federal court- Tactical question- if you have a claim and you want it in state court, and other person

might sue you with a federal law claim, then need to beat them to court to ensure that the claim is initiated in state court

o Removal only works in one direction- if a federal question issue is raised in federal court, defendant can’t remand it back to state court, but if federal issue raised in state court, can remove up to federal court

Federal Question Jurisdiction Test:- To invoke federal question jurisdiction the federal issue must be part of a well-pleaded

complaint and must also be a sufficiently central part of the dispute to justify jurisdiction- American Well Works- Holmes- suit arises under the law that creates cause of action- Smith v. KS: When it seems like P has the right to relief depending upon construction or

application of the constitution or laws of the US, and that such federal claim rests upon a reasonable foundation, the federal courts have jurisdiction

- Merrell: A state- created claim could invoke federal question jurisdiction if the federal interest were sufficiently “substantial”

- Exception 1- Shoshone Mining- Federal law creates the claim, but only substantive law applied in the case is state law and local custom- heard in sate court (looks to policy of why we have federal jurisdiction)

o No reason to put in federal court if there is no interpretation of federal law in the substance of deciding the case

- Exception 2- Gravel- balancing test: (1) claim must raise a federal issue (2) issue has to be disputed (3) disputed issue must be substantial (4) removing it to federal court wouldn’t disturb balance of federal-state responsibility

GRABLE v. DARUE ENGINEERING (IRS seized Grable’s property, sold to Darue)Issue: Can a case be heard in federal court that doesn’t arise out of a federal cause of action, but which raises a disputed issue of federal law? Rule: Yes. In order for a federal court to have jurisdiction over a case that doesn’t arise out of federal law, it must raise a substantial question of federal law, and be balanced against the state-federal judicial division of power.

Court allowed federal jurisdiction because P would have to prove improper interpretation of IRS law, so state couldn’t establish the quite title

Can’t prevail under state law cause of action without proving as a matter of federal law, that the service was improper- federal law element is a necessary element of the plaintiff’s cause of action- satisfied Mottley pleading rule

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Federal Law Issue Inclusion Test (Grable Test)- (1) Does it raise federal law issue? (interpretation of tax law)- (2) Is the question in dispute? (D’s think certified mail is ok, plaintiffs say no)- (3) Is federal law a substantial issue? (A significant part of the claim- makes sense for the federal

court to hear it)- (4) Will it disturb fed-state authority balance? (No, because very few cases in this area)

C. Supplemental Jurisdictiona. Pendent/Ancillary Jurisdiction : Federal courts will hear claims that are so closely related with

the underlying dispute (which evokes federal SMJ) that it considered is part of the “same case or controversy” under Article III

b. Even if these claims defeat diversity jurisdiction, codified under §1367

D. Removal Jurisdictiona. Dictates when a defendant can remove from state-fed.b. (1) Case is removable only if it could have been brought in federal court in first placec. (2) Case must be removed within 30 days of service of process on defendantd. (3) Case must go up from state court to federal court for the district in which the state court is

located e. (4) Only defendants may remove (plaintiffs should bring there in first place)

i. If plaintiff files a state claim, and defendant files a federal counter-claim, plaintiff can’t remove to federal court based on defendant’s counter claim

f. (5) All defendants must agree to remove a caseg. (6) Removability is determined at the time that the complaint is filed and at the time that the

removal petition is filed h. Defendant bears the burden of proving federal SMJ, give D & P’s equal chance to avoid bias

and get in federal court i. Exceptions: If D is sued in his home state, he can’t remove to federal court for diversity

jurisdiction (no need to protect from bias in home state) j. Can only remove if properly within state court in the first place (D can’t remove a patent case

in state court- court has to remove it to federal court)

NOBLE v. BRADFORD MARINE (marina fire, Noble added one party, then later Bradford)Issue: Do new defendants added to an amended complaint get 30 days from when they were brought into the suit to remove to federal court? Rule: Yes. Unless the amendment sets forth a new basis of federal jurisdiction, subsequent events do not make a removable case “more removable” so the failure of the initial defendants in the 30 day time period to remove is deemed a waiver of the right of removal which is binding on all subsequently added defendants.

The 30-day time period begins with the service of the complaint to the initial defendant. Any added defendants do not get a new 30 days- the time starts

USC §1446(b) requires that the notice of removal be filed within 30 days of the defendant’s receipt of the initial pleading, or 30 days of amended pleading

Rule 6: failure to comply with these time limitations are grounds for removal

Changes in Law- BUT: Creates perverse incentive to sue first defendant, then wait 30 days, and add a second

defendant (or file suit, serve process on D1, then wait 30 days, serve process on D2), soooo… - Majority Rule : later-joined defendant has 30 days from being served with process in which to

get the original defendant to join her notice of removal

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- Intermediate : 4th circuit allows second defendant to remove case within 30 days of service of process on her only if original defendant also removes within 30 days

- Single defendant can remove entire case if there is a “separate and independent” federal question case against her and not against the other defendants

Chapter 5: Venue A. Introduction & Integration a. Generally

i. Venue determines where within a court system a case can be brought.ii. Meant to ensure that suits are tried in a place that has a sensible relationship to the

claims asserted. Purpose: Convenience of parties, efficiency of the system.iii. When different claims are combined in one lawsuit, the general rule is that venue

must be established in as to each separate claim.iv. If objection not raised in complaint, this privilege can be waived.

b. Basic Venue i. Common-law Rules: Local & Transitory Actions

1. Local- affect real property (ownership, damage, title)2. Transitory- (breach of contract, tort, negligence)

ii. Statutory rules for Federal Court: (governed by §1391)1. Treat both 1391 a and b as same (found or subject to personal jurisdiction

should be treated the same)2. Treat “resides” as “domicile”/ 1332 citizenship 3. Can only use a/b (3) when (1 or 2) doesn’t work 4. Like in airplane crash abroad and citizens of 2 different states, have to use a

or b (3)c. Change of Venue

i. Plaintiff and Defendant can both move for a change of venueii. Only want them moving for convenience- not for change of law rules

iii. Transferor law governs if location is properiv. Intra-system [§1404(a) and §1406(a)]

1. Change from NY court NY court2. Of federal- not moving it out of the system, just around

v. Intersystem: Forum non- Conveniens 1. Move from fed to international 2. Have to get the case dismissed (Forum Non-Conveniens) then have the plaintiff

brought someplace else (CA can’t transfer to VT)d. Proper Venue Under §1391

i. §1391 (a) [diversity] and (b) [no diversity] provide options for individual venue (c) provides venue options for corporations

ii. (a)(1) / (b)(1) You may sue within any district where D resides (domicile test) if all Ds reside within the state same; OR

1. Example: If the D’s live in San Diego (S. Dist of CA) and San Francisco (S. Dist. of CA) you must file in the district court of EITHER their domiciles (but can’t be in C. Dist. Of CA).

2. TX v. CT (served in TX) and MA Corp with continuous and systematic jurisdiction in TX- claim arises in RI

a. So venue is proper in RI (can’t use TX because that’s only a fall back provision (a(3) and b(3) can’t apply)

iii. (a)(2) / (b)(2) A district in which a substantial part of the (significant) events or omissions giving rise to the claim occurred; OR

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iv. If there is no other district in the entire country to bring it in, use where have PJ, or where “found,” but this is [rare]

1. Example: D in CA and D in CT and the claim happened in a foreign state.v. (a)(3) – diversity of citizenship case solely

1. Where D is subject to PJ at the time the action commencedvi. (b)(3) – federal question case (hybrid diversity + fed q = fed q)

1. A judicial district where any defendant may be ‘found’ 2. Exception to (a) and (b) – “except as otherwise provided by law”3. There are some particular venue provisions for specialized actions (National

banks, federal taxes, interpleader)vii. (c) Corporations

1. Where they have PJ at the time the action was commencedsMay be subject to PJ in certain districts of a state, but not others

2. Can be based on a single act by an employee viii. (d) Aliens may be sued in any district.

B. Local and Transitory Actionsa. Local : (1) In Rem, QIR- real property, (2) plaintiff seeks remedy in or to realty like quiet title,

foreclosure, lien, ejectment, (3) claims for damages to injury to land like trespass i. Venue must be laid where the land is located

ii. Had to be filed where land was located (want people familiar with the land to decide the case) still a common law rule

b. Transitory : anything not a local action is a transitory actioni. Could be brought in places other than where the claim arose

C. State Venue Provisionsa. Venue ID’s in what county/parish/division cases can be adjudicated b. Ex: Maryland statute

i. Says case should be brought where defendant lives, has business, employed, or where a corporation has its principal offices in-state.

c. Different types of cases make plaintiff cater to defendant, some don’t

D. Venue in Federal Court a. Absent a federal statute or rule extending service of process, a federal court has personal

jurisdiction over an out-of-state defendant only if the state in which that federal court sits would have jurisdiction (more limitations for venue)

b. §1391 is primary venue governing federal civil practicec. Normally suit brought where defendant is inhabitant/where he can be found

i. Broader venue choices for diversity cases d. Originally no provision allowing plaintiff to sue multiple defendants in the district in which

any defendant lived (reside = domicile)- now can sue where claim arosei. Often disagree over where that is (now where a part of claim arose)

BATES v. C&S ADJUSTERS (Lived in NY, moved to PA, sued under fair debt collections)Issue: Does venue exist where the debtor resides and where a bill collector’s demand for payment was forwarded? Rule: Yes. §1391 normally allows venue where claim arose, but §1331(b)(2) also allows where “a substantial part of events or omissions giving rise to the claim occurred”

Because the debt collection agency mailed notice that was forwarded from PA to the NY address, venue in NY is proper the receipt of collection was a substantial part of the event leading to the claim under the federal act.

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Significant events (or omissions) material to the plaintiff’s claim must have occurred in the district in question- even if material events occurred elsewhere

§1331(b) focuses on “events” not contacts- so not where action is directed, but where action actually occurs

E. Change in Venue1. Transfer of Civil Cases in State Courts

a) Most states allow transfer to another county if they aren’t going to get a fair trial where the case was filed (some by motion only, some sua sponte)

b) State choice of law governed by state conflict of law rules of the forum state- tells what substantive law to be used

c) What about when you transfer a case from one forum to another (TX-IL)i. If PJ and venue are proper in original forum, then if you start in TX and move to

IL, still use TX choice of law rules to determine what substantive law will govern the case

a. So law stays the same unless the original forum is improper, (no PJ or no venue) then under 1406(a) court where venue or PJ is improper may transfer to a court where venue & PJ are proper, and new court’s choice of law governs (Goldlawr v. Heiman)

ii. Plaintiff can file in correct court, then plaintiff can seek a transfer to a new court that’s a more convenient forum (gets benefit of choice of law)

d) Choice of Forum clause in Contract-i. If you file in a place that’s not proper with a choice of law clause (Setwart

Organization v. Ricoh) may be enforced, but doesn’t have to be, only one of several factors to be considered under 1404(a)

2. Transfer of Civil Actions in Federal Court a) Both intra-system of transfers (within federal system) and inter-system transfers (from

federal system to some other national system) i. District court may transfer civil action to any other division where it might have

been brought. ii. (1) Discretionary part- for interest of justice, witness/evidence convenience-

1404(a)- “where the action might have been brought” b) Can the defendant change venue by waiving their PJ & venue rights?

i. Hoffman- no because would be too differential to defendant, not plaintiffa. PJ has to be mandatorily proper, so even if defendant objected, there

would be adequate PJ and venue to transfer ii. Looking at the place where D wants to transfer the case, would there have been

personal jurisdiction over D there, and would there have been proper venue? EXAM QUESTION

c) Federal law allows transfer between districts, not restricted by state lines (BK)d) 1404 transfer- transferor court is a proper venue

i. Permits transfer to any district where the suit “might have been brought”e) 1406 transfer- permits transfer of cases filed in an improper venue

i. Can be transferred only to a district in which venue + PJ would be properii. Can’t waive your PJ or venue rights- would allow too much voluntary movement

to convenient courts that don’t have the right PJf) Goldlawr Rule- Can transfer from a court without proper venue or PJ just to facilitate

orderly and expedient adjudication 3. Choice of Law

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a) Choice of law doctrines vary among states, different courts apply different laws in same situations (one court might apply several states’ laws in one transaction)

i. When litigation occurs in state court- apply that court’s lawii. When federal court- and there is no federal statute on point, usually apply the

state law of the state in which the court sits iii. To be fair to the defendants, apply the state law of the court in which the case

was transferred from (apply original court’s law) [1404(a)]4. Standards for Transfer

a) 1404(a) provides that in deciding whether to transfer, court should consider:i. (1) Convenience of the parties, (2) convenience of the witnesses, and (3) “the

interest of justice” (transfer preferred over dismissal of the case) 5. Multidistrict Litigation

a) Can consolidate cases when common issue raised in several districts- consolidation of pretrial proceedings under §1407

b) After the pretrial motions, cases shall be remanded back to the districts where they were originally brought

i. Some courts try to transfer them to their district to keep them for rest of the case, but not usually allowed (unless parties consent to trial there)

F. Forum Non Conveniens6. Don’t take the case because there is a more appropriate venue available7. Assuming SMJ and PJ and venue are ok, allow inter-system change in venue if you think it

would be more convenient/advantageous to have case heard in different place8. Requires a dismissal, can’t just move the case (have to dismiss and re-file)9. State forum non conveniens law is more favorable to plaintiffs than federal forum 10. No statute for FNC that says courts can dismiss it all together

PIPER v. REYNO (Scotland plane crash, Piper moves from State to federal, from federal CA federal PA then tries to motion for FNC)Issue: Can a defendant move to dismiss a case for forum non-conveniens when the substantive law to be applied in the new forum is less favorable to the plaintiffs? Rule: Yes. Because the central purpose of forum non-conveniens is to ensure that the trial is convenient, a foreign plaintiff’s choice deserves less deference

Trial court should be given deference in balancing elements of FNC Courts aren’t as differential to P choice of law when it is specifically to take

advantage of the more generous tort verdicts for plaintiffs in the US Public and private interests pointed toward a favored forum in Scotland

Gilbert Balancing Test of Forum Non Convenienso (1) An adequate alternative forum is available

Do have tort law in Scotland o (2) Public Interest Factors

Court Backlogs, what law would apply, state interest in case Administrative difficulties, local interest in having localized controversies

decided at home, home with law that governs actiono (3) Private Interest Factors

Witnesses, evidence, practical problems Applying foreign law usually points toward dismissal

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- How to deal with statute of limitations/PJ issues in transferee location, would dismiss and transfer with a request that they waive PJ and statute of limitations

Chapter 6: Raising Jurisdictional and Related Challenges

A. Introductiona. How and when a defendant can object to the plaintiff’s selection of forumb. PJ and Venue can be waived- dealt with at beginning of casec. Can’t waive SMJ, defense can be brought at any time by anyone or by court

B. Traditional and Modern Approaches to Challenging Jurisdictiona. Ways to challenge PJ in State Court

i. (1) Challenge case where originally filed1. Can still challenge merits in subsequent case- res judicata

ii. (2) Default in first case- don’t appear at all 1. Wait for second case to enforce the judgment in your jurisdiction, and then

challenge validity of first judgment collaterally on grounds that it lacks PJ2. If you lose, can’t attack the case on the merits- only PJ

b. Ways to Challenge SMJ in Federal Court i. Federal court- SMJ is flipped from PJ

1. Presumed that Court in case 1 must decide that it has SMJ in order to issue any judgment (either contested or default)

2. If you default in case 1 and want to litigate SMJ of court 1 in case 2, can’t collaterally attack- have to challenge SMJ in case 1 in federal court

ii. Exception: if case 1 is filed in state court, and it’s an exclusive federal jurisdiction claim (ex: patent), then try to enforce it in federal court, then can retry in federal court because of state court’s lack of SMJ – §1338: patent law heard in federal court

iii. Don’t trust state courts to represent and determine exclusive jurisdiction of federal courts in the same way- so CAN collaterally attack those cases

c. Rule 12(g) and (h)i. (g)- If you file any rule 12 motion, must join any other rule 12 motion to that motion with

the exception of 12(b)(6) or 12(b)(1)1. Rule of consolidation- have to consolidate all motions into one, except lack of

SMJ, failure to join an indispensible party, failure to state a claimii. (h)- Waives motions by omitting it from the first motion, or by failing to include it in a

responsive pleading or amendment allowed by rule 15(a)(1)1. So if you file a motion, must join all rule 12 motions with it, and if you don’t file

a motion then put it in your answer, and if you don’t do that, you waive any of your 12(b)(2-5) motions

C. Collateral and Direct Attacks on Personal Jurisdictiona. Client could question personal jurisdiction by a special appearance- direct attackb. OR could allow a default judgment, then object to the enforcement of the judgment because

of a lack of personal jurisdiction- collateral attack i. Allows client to litigate at home, but could be risky if you lose, because can only

question PJ, not the merits of the case- res judicatac. Some jurisdictions allow appeal of PJ before trial on the merits, others make you wait until

there is a final judgment before appealing PJi. Rejection of PJ might mean have to stay in foreign jurisdiction for whole trial

BALDWIN v. IOWA STATE

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Background: Iowa State appeared specially in Missouri, moved for dismissal for improper service, court overruled, motioned for dismissal for lack of PJ, overruled, heard case, Iowa State didn’t appear, default, Baldwin went to enforce in Iowa, Iowa State tried to commit a collateral attack, saying MI never had PJIssue: Did the defendant’s unsuccessful motion to dismiss for personal jurisdiction prevent its raising of the issue in Iowa court? Rule: Yes. Collateral attacks aren’t valid if defendant has submitted to the court in the initial hearing.

The defendant must raise any personal jurisdiction questions in the court in which the case was heard- can only raise issue once.

Once D's motion was denied in Missouri, he was bound by that ruling. D cannot raise the same issue in another court D could have fought the case in Missouri and then raised the issue during appeals

process in Missouri. But didn’t so Missouri court's is binding.

D. Challenging Federal Subject Matter Jurisdiction a. Defendant can challenge SMJ by moving to dismiss under 12(b)(1) b. Plaintiff can challenge SMJ of a removed case by moving to remand back to state court under

28 USC §1447(c)c. Concealment of lack of SMJ can evoke Rule 11 fine

i. Should maybe not be able to raise SMJ issue for bad faithd. Whoever litigates SMJ and loses can’t raise issue again in a separate action

i. Can’t do direct attack then a collateral attack for SMJe. Validity should have been raised in original proceeding, not after the first one

Chapter 7: Pleadings

A & B. Background1. Complaint (plaintiff) then answer (response/rebuttal by defendant) then reply (plaintiff but only

in some cases- not required)2. Functions of a Pleading

a. Notify the partiesb. Stating facts each party can provec. Narrow the number and scope of cases needing a triald. Provide a quick method for resolving meritless claims

3. Common Law Pleading a. Plaintiff stated claim by issuing a writ (order) and the courts determined what writ to

order for their type of caseb. No right to discovery, many rounds of pleadings to narrow the scope of casec. Writs were very narrow and parties had no way of determining the underlying facts until

the actual triald. Had to file separate claims for separate issues, even if arose out of same incident

4. Code Pleading a. Abolished distinctions between procedure at law and equity b. Created simpler rules focusing on giving parties notice c. Encouraged deciding cases based on merits

i. Emphasized pleading facts (“ultimate facts”) but can’t plead conclusionii. Don’t plead too specifically- “plead the evidence”

iii. Don’t plead too generally- “pleading conclusions of the law” iv. Too many cases not heard because of poor pleadings

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5. Federal Rules Pleading a. Also designed to give notice and to test legal validity of P’s claimb. Avoided the use of the term “facts” but show why law entitled you to reliefc. Changed rules for summary judgment, allowed a liberal discovery process

6. Responsibilities of Pleadings : Rule 11a. Ethical duties in filing pleadings:

i. Has to be legally non-frivolousii. Have (or will likely have) evidentiary support after a period of discovery

iii. Representations to the court have to be certified to be reasonable to the best of the person’s ability after an inquiry reasonable under the circumstances

C. The Complaint

Elements of Complaint: Rule 8(a)(1-3)- A rule lacking any of these three will be dismissed1. A short and plain statement of the ground for the court’s decision

a. Why is this case properly within the court’s jurisdiction? b. States differ in what proof they require- Rule 8 doesn’t require any allegation of personal

jurisdiction or venue2. A short and plain statement of the claim showing the pleader is entitled to relief

a. What part of the law says that the plaintiff has a valid claim?3. A demand for the relief sought which may include relief in the alternate or different types of relief

a. What they want to recover: demand (prayer) or ad damnum (measure of damage) b. But under Rule 54(c) this doesn’t limit the plaintiff’s potential recoveryc. Parties must plead special damages with particularity d. Rule 54(c) plaintiff not limited to the damages pleaded, can get more

Form of Pleadings: Rule 101. Must include name of court, title of case, court ID #, court file numbers: Rule 10(a)2. Must set forth claims in numbered paragraphs: Rule 10(b)3. Parties may adopt by reference allegations listed elsewhere in pleading: Rule 10(c)

a. If alleging a personal injury and property damage both resulting from a car crash, don’t need to repeat facts twice, or can reference things in attached contract, etc.

Legal Sufficiency1. Plaintiff’s complaint must be legally sufficient, 2. Defendant may test legal sufficiency by filing a general demurrer or Rule 12(b)(6)3. Question for legal sufficiency: “If the plaintiff proved everything she alleged in her complaint,

would the law provide a remedy for her?”a. If not, then the court grants the Rule 12(b)(6) motion and dismisses the case

Factual Sufficiency1. Code system requires that plaintiff plead with greater specificity than the Federal Rules

** Code Pleadinga. Courts in Code States require that you state the “ultimate facts”

i. Don’t plead too specifically- “plead the evidence”ii. Don’t plead too generally- “pleading conclusions of the law”

iii. Too many cases not heard because of poor pleadings

** Federal Rules Pleading: Rule 8(a)(2)a. Main purpose is to put other litigants “on notice” of what is being claimedb. Factual elements of the case must cover all elements of the substantive claim

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DIOGUARDI v. DURNING (Italian collector sued US customs for improper sale) Issue: Does the plaintiff need to prove sufficient facts to survive dismissal? Rule: No. In order to withstand summary judgment, the complaint need only put the court and defendant on notice of the cause of action.

Pro se litigant- got away with more because they want them to use court for relief The complaint need only present a short and plain statement of the claim demonstrating

that the pleader is entitled to relief based on Rule 8(a) With the exception for claims addressed in Rule 9 (fraud, mistake, or special damages),

the federal courts require that complaints include merely a statement of the court’s jurisdiction, a short and plain statement of the claim, and a demand for judgment.

BELL ATLANTIC v. TWOMBLY (Local carriers violated Sherman Anti-Trust Act)Issue: Can the plaintiff survive a 12(b)(6) motion without stating the factual context suggesting the agreement that has been violated? Rule: No. Doesn’t introduce a heightened fact pleading of specifics, but requires that plaintiffs include enough facts in their complaint to make it plausible — not just possible— that a claim to relief can be stated that is plausible on its face.

Need to include enough facts to raise a reasonable expectation that discovery will reveal evidence of illegal agreement

Importance: Originally the complaint should have enough detail that a reasonable defendant could respond to the claim, after Twombly- no reason that defendants need a time and place where the injury took place to respond to the allegations.- Why would the SC want more information in the complaint before its accepted?

o Worried about the abuse of the discovery phase- mandatory disclosure of documents, depositions, want to discourage frivolous lawsuits

iii. Common Countsa. Code states permit plaintiffs to state certain claims in shorthand formb. Allegations in Form 10 of FRCP are basically “common” counts c. Violate the code requirement for a statement of facts underlying a cause of action

ASHCROFT v. IQBAL (Muslim detained by US sued FBI head) Issue: Does the Twombly ruling of a plausible factual allegation apply strictly to the Sherman act violations? Rule: No. The Twombly ruling applies to all Civil Procedure rulings because it deals with Rule 8 which applies to all civil cases.

Just because allegations seem hard to believe, it’s not enough to dismiss them, but if they’re so conclusory without alleging specific facts, that’s enough for a motion to dismiss- can’t just say they violated the code verbatim

If the claims are conclusory, they have to be plausible

Heightened Specificity Requirements1. Rule 9: exceptions to the liberal pleading provisions of Rule 8(a)(2)

a. Impose a heightened pleading standard (P must allege in more detail)i. Ex: conspiracy, fraud, civil rights, special damages

b. Otherwise, only need to satisfy Rule 8(a)(2)

LEATHERMAN v. TARRANT COUNTY (warrants by local cops for entry into house)

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Issue: Can a federal court apply a heightened pleading standard for civil rights cases to a case regarding the training of a police officer?Rule: No. It is inappropriate to require a claimant to allege their claim in greater detail than is required by Rule 8(a)(2). No heightened pleading standard.

A complaint must include a short and plain statement of the claim that will give the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests. (this wasn’t a case of fraud, civil rights, etc.)

Fifth circuit can’t create its own pleading standard- needs to be Absent statute or rule, inappropriate for federal court to require greater pleading standard

than 8(a)(2) Negligent training of police officers (objective standard as opposed to Twombly/Bell

Atlantic where “plausible” is subjective)

2. Pleading with Particularitya. Trial by jury:

i. Within 10 days after the last pleading directed to the issue is served, either the plaintiff or defendant should demand the right to trial by jury (if they want one)

b. Malice intent and mistake can be alleged/pleaded generally c. Rule 9(b)- Fraud: Need to “state with particularity the circumstances”

i. Want to protect companies from reputation damages, strike suits, but protect small investors from fraudulent activities of big companies

ii. Have to ID when some exist, allege that more like this exist, but need discovery phase to find specific facts

iii. Must state demand for relief sought- what amount of damages? iv. Or mistake (conditions of mind)

d. General Damages - damages that are the natural result of what was expected in the alleged actions (don’t need to state in complaint, but do need to prove in trial)

i. Ex: pain and suffering, loss of earning capacity (need to plead first 9(g)) e. Special Damages - proximate result of the alleged actions, something special about the

plaintiff that makes these damages significanti. If you leave out pleading for special damages in the complaint, you can’t prove it

at trial and therefore ask for it later (implied wavier) ii. Make the defendant aware that you’re claiming those types of damages

iii. Ex: hospital/medical bills (future phys. therapy, etc.), business lost profits

DENNY v. CAREY (security fraud because of First Penn’s fraudulent bank statements) Issue: Does the complaint for a fraud allegation need to include detailed evidentiary matter to satisfy particularity?Rule: No. Rule 9(b) requires only slightly more notice than required under Rule 8.

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.

Any stricter application of Rule 9(b) is inappropriate where the matters alleged are specifically within the knowledge of defendants. Only enough information to allow the defendant to answer the complaint adequately.

Pleading Inconsistent Facts and Theories

McCORMICK v. KOPMANN (wife of dead husband sues bar, driver)Issue: Can a complaint be dismissed if the factual allegations in two counts are contradictory?

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Rule: No. If the victim is deceased, and the true fact patterns are unknown, the plaintiff can, regardless of consistency, state them in the alternative or hypothetically in the same or different counts or defenses, whether legal or equitable.

Not grounds for dismissal that one count’s allegations contradict another’s Rule 8(d)(2-3): Plaintiff is allowed to submit multiple and contradictory counts if the true

facts are unknown. The plaintiff then supports both sets of facts as best as she can, and the jury decides which set is right. (may warrant the granting of a new trial).

Rationale: could lose both if plead separately, facts could be used against the other case of separate, more cost-effective

Can file anything contradictory as long as its in good faith

Voluntary Dismissal: Rule 41(a) 1. Rule 41(a)(1): Plaintiff can dismiss the complaint

i. (i) Without a court order if it’s before the opposing party serves an answer or a motion for summary judgment, or

ii. (ii) If it’s signed by all parties who have appearedb. 41(a)(2): by a court order after D has served counterclaim

i. If D objects, counterclaim remains pending for adjudication c. If dismissed without prejudice, plaintiff can bring the complaint again d. If dismissed with prejudice, can’t bring again. (res judicata- matter already judged

i. Protects the defendant from multiple repeated unfounded suits

Involuntary Dismissal: Rule 41(b) 1. If plaintiff fails to prosecute or comply with the rules or a court order 2. Court says “defendant may move for dismissal” but really court has the option to order

involuntary dismissal through sua sponte

D. Defendant’s Options in Response

Motions1. Defendant can (1) bring a motion to the court or can (2) answer the complaint2. Motions to Dismiss:

a. Rule 12: Dismiss for failure to state certain elementsi. If defendant doesn’t raise issues under 12(b) then can’t allege them later- no

longer has those rights ii. Burden of proof of Rule 12(b) on the defendant- don’t waste court’s time if they

don’t’ have the authority to hear the case 1. 12(b)(1): Lack of subject matter jurisdiction2. 12(b)(2): Lack of personal jurisdiction (waivable)3. 12(b)(3): Improper venue (waivable)4. 12(b)(4): Insufficient process (waivable)5. 12(b)(5): Insufficient service of process (waivable)6. 12(b)(6): Failure to state a claim upon which relief can be granted7. 12(b)(7): Failure to join a party under Rule 19

b. Rule 56: Motion for summary Judgment (if no disputes on facts)c. Judgment as a Matter of Lawd. Judgment not Withstanding

The AnswerResponses to Plaintiffs Allegations

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1. Defendant can respond to the allegations of the complaint and raise new matter (affirmative defense)- Can admit, deny, or claim that she lacks info to admit or deny

2. Admissions a. Pleadings serve to remove the parts of the case from which there is no dispute over facts

(yes there was a contract, etc.) 3. Denials Rule 8(b)

a. Rule 8(b) requires the defendant to respond to each allegation- must respond clearly and be forthright, must be clear about which parts she believes to be true and those she believes to be false

b. Rule 8(e)(3) the defense may plead inconsistently c. Types of Denials : Rule 8(b)(3)

i. General Denial- defendant denies “each and every allegation of the complaint”- deny everything, including subject matter jurisdiction

ii. Specific Denial- respond to each allegation/ paragraph individually iii. Qualified General Denial- admits all allegations except what is found in “x”

d. Denials for Lack of Information: Rule 8(b)(5)i. Must say that you don’t know, but can’t use this defense if you have the ability to

find out (matter of public record, general knowledge)4. Errors in Denials

a. Argumentative Denial : i. Don’t plead contrary facts- if it is not denied, it is considered admitted “You hit

me on Main Street” response- “I was in LA”b. Negative Pregnant : A denial that implies an affirmation of a substantial fact and hence is

beneficial to opponent. When only a qualification or modification is denied while the fact itself remains un-denied, the denial is pregnant with the affirmation.

i. Literal denial. If the complaint alleges that the defendant was driving his car at 75 miles an hour and the defendant denies that he was driving his car at 75 miles an hour, this would be an admission that he may have been driving it at any other speed, i.e., 74 or 76 miles per hour.

ii. Conjunctive denial. If the complaint alleges that the defendant was careless and negligent and reckless and the defendant denies that he was careless and negligent and reckless this would constitute an admission that he was guilty of any combination less than all three. To avoid this the defendant should have denied the facts in the disjunctive, i.e., denied that he was careless or negligent or reckless.”

Affirmative Defenses Rule 8(c)1. Agree with the plaintiff, but add a new matter to the case

a. Yes I killed him but it was in self-defense 2. Must plead in order to be argued in court (can’t claim self-defense at trial)3. The plaintiff has to prove all the “if’s” of a crime, and affirmative defenses are the “unless’s” 4. Why? Makes it more fair for one party to bear a certain burden of proof at trial, but draw the line

at affirmative defenses- that burden is on defensea. Exception- burden of proof on repayment is on both parties because can’t prove that he

didn’t pay me, can prove that I did5. Types of Affirmative Defenses:

a. Legal- is the defense intrinsic or extrinsic to the claim?i. Ex: plaintiff alleges that defendant was negligent. Defendant wants to deny

negligence, and plaintiff was contributorily negligent. ii. Have to deny what he claimed you did, and then allege what he did wrong-

“separate and apart from the plaintiff’s claim” then you have to allege.

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b. Practical- even though intrinsically part of plaintiff’s claim, defendant has to prove wrong. “He owes me $1k”, “I deny I owe him money, because I paid him” so practically easier for defendant to prove than plaintiff- prove that he didn’t do something? Easier to prove that you did.

c. Policy- statutory limitations on certain policies, (malpractice) have to assert that limitation, otherwise you could be hit with a fine greater than allowed under policy

Claims by Defendant1. Claims by the defending party include counterclaim (against an opposing party) and cross-claim

(filed by defendant against a co-defendant)

Failure to Respond Rule 551. Defendant has 21 days to answer complaint or give a motion to the court

a. Otherwise has defaulted b. Process: Rule 55(a)- entry of default made by clerk of court in records

i. No further pleading or action will be allowed unless judge ok’s it2. Default Judgment

a. Even though we want the plaintiff to have a timely case, want the case to be heard on merits, not technicalities

b. Prosecution must apply for default judgment give affidavit with the amount due and get court or clerk of court to sign

c. Rule 55(b)- allows money judgment to be entered against the defendant in the case (plaintiff has to motion for this)

i. Liquidated amount- Clerk of court can enter judgment for damages whose amount the parties designate during the formation of a contract for the injured party to collect as compensation upon a specific breach

ii. Un-liquidated amount- Only a judge can enter a default judgment (for damages- most tort cases)

3. Defendant on Default Judgmenta. Should ask court for “enlargement” of time if going to be late on responseb. If default judgment has already happened, can ask for court to set aside judgment for

“excusable neglect” but is at discretion of judge i. Must have good excuse, responding wouldn’t prejudice plaintiff

E. Amended Pleadings

Basic Principles under Rule 15(a)1. Whether or not you can amend a pleading

a. Judge shall grant amendment liberally as justice requiresb. Courts apply balancing test that balances the need of the moving party to amend (taking into

account delay of that party) and the prejudice to the other side c. Limitations for bad faith, taking too much time, etc.

2. 1) “A Matter of Course”: without having to make a motion and have it approved by the judgea. Can do it once at any time before being served with the response, or within 21 days of serving

itb. Defendant must respond to claim within 21 days of being served c. Same goes for defendant, can amend their answer within 21 days of serving it to the plaintiff

3. 2) “Leave of Court”: by the grace of the courta. After the “matter of course” time period has gone by, the party must get the court’s

permission or consent of the opposing party under Rule 15(a)(2)b. Differ from code pleadings where no “variance” was allowed

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4. How to Judge:a. “If justice so requires:” need to consider (1) plaintiff’s need to amend and the reason for the

delay, vs. (2) the prejudice to the defendant and their chances to mitigate (discovery) b. Consider: Need of plaintiff to amend and weigh that against the prejudice to the other side

and take into account ways to mitigate prejudice 5. Variance- introduction of evidence on a point not covered in the pleading

Problem of Variance Under Rule 15(b)1. Amendment via express or implied consent

a. If during a trial the opposing side asks questions to something not within the scope of the pleading, are objectionable as not relevant,

b. If you fail to object, might be deemed admitted by implied consent, and effectively allow them to amend the pleading at the trial stage

c. Can’t object if questions are within the scope of the pleadings d. What might you waive if you don’t assert them/object to them?

2. A defendant can overcome the general rule that affirmative defenses not pleaded are waived

Amendment and Statute of Limitations Under Rule 15(c)1. Discusses the issue of when an amended pleading relates back to the original pleading

a. Policy Purpose: make statute of limitations be relevant by having defendant be aware of the claim, and preserve witnesses and documents within the statute of limitations time period & protect defendant from frivolous lawsuits that are only taken to get to a case that’s already passed statute of limitations

i. Marsh v. Coleman- very formalistic, says “transaction or occurrence” as strict- even though fraud claim was consistent with the people you’d be interviewing and documents you’d be getting

ii. Not consistent with the policy underlying the rule to interpret it so narrowly and strictly

b. What happens when changing the identity of the case?i. Zeliniski Complaint- if the rule had been in its current form, they could have

amended the complaint2. Will relate back when: (page 27)

a. 15(c)(1)(a): The law that provides the statute of limitations allows relation backb. 15(c)(1)(b): The amendments asserts a claim that arose out of the conduct, transaction or

occurrence set out in the original pleadingc. 15(c)(1)(c): Changing party name:

i. Must satisfy Rule 15(1)(b) and if, within the period provided by Rule 4(m) (120 days) for serving the summons and complaint, the party to be brought in by amendment:

1. (i) Received such notice of the action that it will not be prejudiced in defending on the merits; and

2. (ii) Knew or should have known that the action would have been brought against it, but for a mistake concerning the proper party's identity. (Zielinski v. Philadelphia Piers Inc)

Amendments to Claims or Defenses

MARSH v. COLEMAN (P he was fired because of his age, D’s company led him on)Issue: Can a complaint be amended to include a new claim of fraud if the claim has passed the statute of limitations, and if new facts and circumstances need to be added to complaint?

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Rule: No. The relation back rule only applies to amendments to the complaint that require no addition of factual or circumstantial information.

If the new allegations aren’t within the scope of allegations originally pleaded, and if the defense would be prejudiced b/c they need time to search for additional information to present its defense, then party should not be allowed to amend

But stupid because would have same information for both claims, and same defendant was already on notice

False interrogatory and conjunctive denial and statute of limitations and insurance company (Test for amendment back)

Conjunctive denial and S of Lim’s has passed- might still be able to amend

Amendments to Changing a Partyo 15(c)(1)(C): Amendment that adds a new party

Amendment to relate back and add a party will be granted IF The new claim arises out of the same circumstances, transactions and

occurrence as original claim New person had notice that the action had been filed against the original

defense The new person knew or should have known that he was the right person

to be sued If the proper defendant received notice (named Potterville bank not Potterville

Corporation as defendant, but headed by same person), then amendment is allowed

F. Supplemental Pleadings1. Regards what happens after a pleading is filed regarding facts discovered after filing the

complaint. Then amendment is allowed, even if it changes the relief sought or adds additional parties

2. Only allowed with court’s permission (allow unless undue delay, bad faith or prejudice)

G. Veracity in Pleading

Rule 111. Motive and Purpose of Arguments

a. Need to follow laws, but be best advocate for your client- how far can you go with legal theories?

2. Rule 11 applies to every pleading motion and paper filed to the court and any argument based on those papers (NOT to discovery)

a. Rule 11(a): Papers to the court must be signed by lawyer or clientb. Have to believe client, and have a good faith argument in evidence

3. Rule 11(b):a. Can’t file for any improper purpose (to harass or delay)b. Legal contentions have to be warranted by existing lawc. Factual allegations have evidentiary support or will after reasonable discoveryd. 11(b)(2): can’t prevent suits that might reverse existing law if it’s a non-frivolous suit

(reversing Plessy v. Ferguson with Brown v. Board of Ed.)e. Factual contentions have evidentiary supper or will likely have evidentiary support after

further investigation (11(b)(3))f. Denials of factual contentions are warranted on the evidence or reasonably made on

belief or lack of information (11(b)(4))4. If you don’t meet these requirements, susceptible to sanctions

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a. Even after complaint has been withdrawn

Model Rules of Professional Conducto Rule 3.1 : Meritorious Claims and Contentions

Don’t be frivolous in bringing lawsuitso Rule 3.2 : Expediting Litigation

A lawyer shall make reasonable efforts to expedite litigation consistent with the interests of the client.

o Rule 3.3 : Candor toward the Tribunal Don’t lie about facts, actively correct known wrong facts Disclose any adverse but controlling court rulings Lawyer must stop client from adjudicating criminal conduct about proceeding In an ex parte proceeding, lawyer must tell all facts, even if against client

o Rule 3.4 : Fairness to Opposing Party and Counsel Can’t obstruct access to evidence, falsify evidence or disobey obligations of

court, make frivolous discovery request, allude to irrelevant facts, or state personal opinions on justness of cause or credibility of witnesses or the guilt or innocence of an accused

RECTOR v. APPROVED FEDERAL SAVINGS BANK (went from $60 b to infinite $) Issue: Is the 21-day “safe harbor” provision of FRCP Rule 11 waivable? Rule: No. The 21-day safe harbor provision of Rule 11 is not jurisdictional, and may be waived.

Motion for sanctions shall be served but not filed/presented to the court unless within 21 days the opposing party withdraws their complaint or appropriately corrects it. If the plaintiff doesn’t use the safe harbor as a defense against the sanctions, it is considered waived.

Originally, Plaintiffs did not argue that the motion failed to comply with the 21 day “safe harbor” provision,

Other Sanctions1. Court can always dismiss motion for sanctions, but don’t want to be deprived of the ability to impose

sanctions based on “inherent power of the court”2. Section 1927- any lawyer who multiplies the proceeding in any case unreasonably may be required to

personally satisfy the excess costs incurred because of such conduct” a. Rule 38 of FRCP- can sanction if there is a frivolous appeal

3. Sanctions for Rule 11 violations can be (1) initiated by motion or (2) initiated sua sponte by the courta. If issued sua sponte, court must grant the parties the opportunity to make arguments

4. 21-day Safe Harbor Provision:a. If the sanction is requested by motion, the moving party must give the violating party 21-days

notice before filing the motion with the courti. The violating party may withdraw or amend the defective pleading before the filing

ii. The 21-day safe harbor is mandatory and waivable1. Mandatory – the court cannot dismiss the provision if it is raised in defense2. Waivable – if the provision is not raised then it is deemed to be waived

Chapter 12: Scope of Litigation: Joinder & Supplemental Jurisdiction

A. Introductiona. Scope of litigation- what parties can be joined and what claims they can assert

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b. Common law- restrictive, multiple suits for a single disputec. Federal rules- permits joinder of parties and claim along transactional linesd. When new defendants are added- the court must have PJ over them, when plaintiffs are

added, they waive PJ restrictionsi. Every time you add a claim or a party to the lawsuit need to

ii. (1) Satisfy joinder rules in FRCP- can do “Party Joinder” by amendment or in original complaint

iii. (2) Make sure court has SMJ over the new claim e. Claim Joinder:

i. By Plaintiff: Governed by Rule 18(a) 1. NO limits under claim joinder under Rule (not even same T&O)2. Rule 18(a) doesn’t allow other parties to assert all claims against anyone- only

the litigants who assert one of the claims listed in the ruleii. By Defendant: Rule 18(b)

iii. Ex: A sues B over a federal claim, then A adds state claim against Biv. Rules:

1. (1) NO limits under claim joinder under Rule 18- can add as many claims as you want under rule 18- totally permissive

2. (2) Applies to the addition of the claim to any other claim (including counterclaim cross claim or third party claim)

3. (3) Claim joinder is not compulsory, but res judicata makes joinder of transactionally related claims compulsory

4. (4) Rule 42(b) allows for severance of a case that involves multiple cases if a judge decides it’s too confusing for a jury to hear them all at once

f. Counterclaim:i. Rule 13 dictates what claims against others the defendants can assert

ii. Asserted against an opposing party- across the v. to someone who has sued you Rule 13(a) FRCP (Compulsory- same T&O)

1. This has “ancillary jurisdiction”2. Arises out of the same T&) as the plaintiff’s claim 3. Must assert the claim in this case, or waive right to try the claim

iii. Rule 13(b) FRCP (Permissive- different T&0)1. Allows non-related claim to be filed with independent basis of SMJ2. Doesn’t arise out of same transaction or occurrence as the main claim3. Don’t need to assert here, but can- or can bring independent suit later

iv. Need independent source of SMJ, otherwise dismissed, because no supplemental jurisdiction because not related to main claim

g. Cross-Claim: i. Rule 13(g): Claim against a co-party- same side of the v.

1. Must arise out of the same T&O of underlying case 2. Cross claims not compulsory, then can add any claim under Rule 18

ii. A sues B and also sues C (bus company and bus driver, etc.)iii. Rules permit B to sue C (defendant of same tier to sue the other defendant as long as

the claim arises out of the transaction or occurrence as main claim- h. Party Joinder

i. Rule 19: Compulsory party joinder 1. Can add indispensible parties 2. Court can force absentee party into the case if he’s necessary to join 3. Rule 19(a)(1): Is the absentee necessary or required? Yes if any of …4. (a)(1)(A)- Without absentee, court can’t accord complete relief among

parties

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5. (a)(1)(B)(1)- Absentee’s interest may be harmed if she isn’t joined 6. (a)(1)(B)(2)- Absentee’s interest may subject the defendant to a risk of

multiple or inconsistent obligations 7. Joint tortfeasors are never necessary8. Rule 19(b): Is joinder of absentee feasible? Do we have PJ and SMJ?

a. If no PJ or SMJ over absentee, can either proceed without her, or dismiss the whole case

b. Shouldn’t dismiss the case unless plaintiff has an alternative forumc. Failure to join indispensible party- 12(b)(7) motion to dismiss

ii. Rule 20(a): Permissive party joinder1. Rule 20 identifies “proper parties” 2. Rule 20(a)(1): Proper plaintiffs identified 3. Rule 20(a)(2): Proper defendants identified 4. Claims arise out of same T&O and involve a common question of law or

facti. Impleader/Third Party Claim

i. When a defendant (either to a main claim or counter claim) joins a new party ii. Governed by Rule 14(a)

1. Now plaintiff can assert a claim against the TPD as long as same T&O (just like Kroger case)

iii. TPD can also assert a 14(a) claim against the plaintiff if same T&O 1. Original defendant becomes third party plaintiff2. Must be part of original claim3. Passing on liability through indemnity or because of a statute that allows joint

contribution through joint and several tortfeasors (impleader)4. So if I’m liable, then someone else is liable to me (Rule 14 FRCP) through

indemnity or contribution iv. Impleaded party escapes liability by defeating plaintiff’s original claim, or defendant’s

derivative claim against her 1. Can assert defenses to both- 14(a)(2)(A)- defense to third party claim, and Rule

14(a)(2)(B)- defense to P’s original claim against original D v. Third party impleaded party is subject to same pleading requirements, can respond

under Rule 12, can assert claims back under Rule 141. Court can refuse to hear the impleader claim (because of undue delay in seeking

it, complication of issues in main action, potential prejudice to P2. Impleading a third-party defendant doesn’t affect the court’s jurisdiction over

the original claima. If diversity originally, adding a non-diverse D doesn’t change the

original claim’s jurisdiction (if it changed it, would allow D’s to defeat federal court by impleading non-diverse party)

j. Intervention: Rule 24k. Interpleader: Rule 22 and §1335

i. Interpleader- someone is holding a stake that multiple people hold)- insurance claim that multiple people claim right to

ii. They file an interpleader suit and bring every other claimant into the case so they only pay it out once

l. Class Action: Rule 23i. Allows for an efficient and workable solution where a lot of people have a small claim

normally not worth litigating, but when they are all joined, is efficient

B. Real Party in Interest: Capacity & Standing

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a. Rule 17(a)(1) requires that an action must be prosecuted in the name of the real party in interest (RPI)- not necessarily the person who receives the benefit of judgment

b. Can assign the rights to sue from person A to person Zi. Common law makes person A sue, equity allowed person Z to sue as RPI

c. Subrogation is an assignment by operation of law (usually insurance)d. Capacity is the person or entity’s ability to sue and be sued

i. Some can’t represent their own interests (minors or insane people) so the case is brought against their representative

ii. Some entities (unions, partnerships) can’t sue as a group, sue or be sued by individual person from that group

e. Standing is the ability of a party to demonstrate sufficient connection to/ harm from the law or action challenged to support that party's participation in the case

i. Usually when you’re suing/enjoining the government (environmental stuff)

C. Claim Joinder by Plaintiffs

UMWU v. GIBBS (sued for violation of 303’s labor management relations act)Issue: Was the claim based on Tennessee state law properly heard in District Court based on pendent jurisdiction? Rule: Yes. A federal court can hear a state-law based claim if it shares a single cause of action with a properly heard federal claim- has a “common nucleus of operative fact”.

Court could have dismissed the state claim, but they weren’t wrong to keep it All “arising under” so same transaction and occurrence- or same common nucleus of

operative fact- so state claim arises under the same federal law case Need to ask- what joinder rule allows it, what’s the basis for SMJ

D. Permissive Party Joinder by Plaintiffs

SCHWARTZ v. SWAIN (two girls hit by car twice in 2 weeks, when to join claims?)Issue: Did the court properly sever the cases of Dorothy Schwartz and properly join the case of Adelia Schwartz? Rule: No. If the separate claims arise out of the same transaction or occurrence, or if there is a question of fact as to liability from two separate instances, then claims may be joined.

Justice requires that Dorothy be permitted to prosecute her claim against defendants in a single trial because claims arose out of a series of transactions and occurrences and a common question of common law or fact

a. Supplemental Jurisdiction Statute §1367b. Congress codified supplemental jurisdiction after Finley and ___ cases

i. A- what comes within supplemental jurisdictionii. B- what is mandatorily excluded from supplemental jurisdiction

iii. C- discretionary factors that will allow dismissal of state claims even though they are within A and not excluded by B

c. A: First step: (1) Decide if there is an independent basis for jurisdiction apart from the main claim?

i. Need an anchor claim with adequate basis of SMJ- either federal question or diversity to attach other claims to

d. A: Second Step: (2) Claim must be part of same case or controversy as the main claimi. Incorporates Gibbs with “common nucleus of operative fact” or same “T & O”

ii. Test: Does it make sense based on judicial economy to try the cases together? Is there enough overlap of factual issues that it’s more efficient to try the cases together?

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e. If yes, to both of these, then has power under A unless excluded by Bf. B: Third Step: (3) Even if it satisfies A, excluded under B if meets all three:

i. (1) Original jurisdiction over main claim is based solely on 1332ii. (2) Claim made by plaintiffs by persons made parties by Rule 13, 19 20, or 24

1. OR by persons proposed to be plaintiffs under Rule 19 or 24iii. (3) Supplemental Jurisdiction would be inconsistent with jurisdictional requirements of

133321. No claim made by defendant is ever going to be excluded-1367 applies only to

plaintiffs because 1367(b)(2) is claim made by plaintiffs2. No proposed supplemental claim that is linked to a fed question claim will be

excluded (because claim at issue isn’t founded solely on 1332)g. Note: Severing of claims isn’t the same as an order for separate trials under 42(b)

i. Severance- two separate suits, each with own docket number ii. Rule 42 allows for separate trials on various issues within a single case

h. Joinder of multiple defendants prevents “whipsaw” or blaming other defendant in other suit that the absentee is really to blame

i. Note: No joining of cases if it’s congressional intent to keep one at state leveli. Supplemental jurisdiction must be supported by a statutory grant

ii. Presumed that statutes allow it as long as they don’t preclude supplemental jurisdictioniii. Supplemental jurisdiction would be upheld so long as constitutional requirements of Gibbs

were metj. Supplemental jurisdiction overrules the rule that each plaintiff’s claim independently must

satisfy the amount in controversy requirementi. If joining a federal claim for $100k with a $25k claim, still can be in federal court

because of supplemental jurisdiction k. BUT complete diversity rule differs from amount in controversy issue

i. Can’t get diversity of citizenship if you add a plaintiff to a federal diversity claim that’s the same citizenship as a defendant

l. Factors the court must consider in deciding whether or not to hear state claim?i. Power, discretion of federal court

ii. Judicial efficiency to hear it as one caseiii. Wouldn’t hear it as one case when there is a jury complication, iv. Discretion factors:

1. (1) The earlier the federal law claims dismissed, stronger the discretion to dismiss the state claim

2. (2) State issues predominate 3. (3) Jury confusion- adding to complexity of the case4. (4) Novel issue of state law- should remand

E. Claim Joinder by Defendants

DINDO v. WHITNEY (Dindo driving, Whitney grabbed wheel, insurance rep’d both)Issue: Does the failure to assert a Rule 13 counterclaim bar defendants from asserting these claims in the future? Rule: Yes. If the defendant knows of the existence of a counterclaim, and fails to raise it, then his subsequent action is barred by the action of collateral estoppel, regardless of whether the claim was settled, or a full trial on the merits was held. UNLESS defendant didn’t know about it- or there was a conflict of interest (same insurance company), and minimal burden to the court (first case was settled).

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The purpose of Rule 13(a) is to prevent a multiplicity of actions, all arising out of the same transaction. However, if the case is settled, the court has been less burdened and the parties can protect themselves by demanding cross-releases.

If defendant knew of the potential for a counterclaim and didn’t raise it, can’t bring the claim again, unless there is an inequitable situation

CARTRET SAVINGS v. JACKSON (fraud- bought boat in FL, enforced loan in MA)Issue: Are counterclaims not originally asserted under 13(a) barred from consideration by the court after the completion of the initial case? Rule: Yes. When a defendant is defaulted for failure to file a pleading, the default/argument waive applies to whatever the party should have pleaded.

All D’s present claims that would have been compulsory counterclaims are barred Jackson’s were required to make a pleading in Florida, and their failure to do so

waived all potential counterclaims

Exam Notes- Carteret Savings v. Jackson is a lower court case-

o The better view is that Rule 13(a) doesn’t arise in a default case - More judicially efficient to litigate plaintiff’s claim and defendant’s counterclaim at the same

time- but no discussion about defendant’s rights to claim autonomy- A motion isn’t a pleading, so don’t have to file counterclaims with motion to dismiss - Depends on the court- some find exceptions if preclusion would be too harsh, others see Rule

13(a) counterclaims as mandatory- no exceptions

F. Overriding Plaintiff’s Party Structurea) Third party claim

i. Hypo: A sues Bloomingdales for flammable pajamas, Bloomingdales sues Ralph Lauren who sues fabric manufacturer who sues fabric maker who sues chemical company for fire-retardant, who sues chemical supplier

ii. Product liability law, seller is liable for any product defect, but manufacturer is strictly liable for selling a defective product

iii. Third party claim- indemnity if I’m liable for this injury, then this other person is liable to me for all or part

iv. Indemnity- enables one tortfeasor to shift whole burden of judgment to another party

v. Contribution- based on common liability of two or more actors- equalizes burden by requiring each to pay proportionate share

a. Allows the person who has been ordered to pay to another person based on a special relationship to the person who might have been the actual culprit

b) Rule 20(a) allows plaintiff to make the choice of who parties in a lawsuit will bec) Rule 13(h) allows defendant to join additional parties (as long as it meets the

requirements of Rule 19- Compulsory or Rule 20- permissive)i. Defendant can select parties to be involved just like plaintiff

d) §1367(a) should cover jurisdiction for all compulsory counterclaims if transactionally related

i. As long as defendant is stating counterclaim, 1367 doesn’t prevent supplemental jurisdiction for diversity claims

ii. Doesn’t preclude 13(h) e) Rule 20 doesn’t require plaintiff to join all parties they could- legal strategy

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i. But might lead to inconsistent results- less faith in legal system 1. Impleader (Third Party Practice)

a) Procedural Aspectsi. Impleader is governed by Rule 14

ii. Allows a defending party against whom a claim has been asserted to join an absentee in limited situations

iii. Defending party who invokes impleader is “third-party plaintiff” while absentee brought in becomes the “third-party defendant”

iv. Can only join a party who is liable to defendant all or part of the claim against it- usually through indemnity or contribution (efficiency)

Markvicka v. Brodhead-Garrett (Kid was injured by woodworking machine manufactured by Broadhead-Garrett- they sued the school for bad supervision)Issue: Is impleading for indemnity and contribution proper? Rule: Yes. Rule 14(a) allows the joinder of a party who is or may be liable to defending party for all or part of the plaintiff’s claim.

If Brodhead-Garrett amends its complaint within 10 days, the third-party defendant (school district)’s motion to dismiss will be denied

Since the school district may be liable for contribution because of their negligence in causing the accident, Broadhead may implead School, to join as third-party defendant to decide their accountability

Brodhead is allowed to implead through contribution anyone who is jointly liable for all or part of the damages- and the school district’s negligence is a concurrent cause of the plaintiff’s injury

Review- EACH CLAIM MUST BE:

o Joinder permitted under FRCPo SMJ under 28 USC either through-

(1) Independent basis of SMJ (federal question, diversity in that claim) (2) Supplemental Jurisdiction through 1367

- Don’t have to worry about venue for added claims- only original claim venue matters o Get ancillary venue rule

- Third party complaint (impleader) must be derivative under Rule 14- if I’m liable, then this third party must be liable to me for all or some of the judgment

o Can’t just bring in someone who you wanted to sue for another reason (school never paid for the machine) under Rule 14

o But rule 14 impleader has supplemental jurisdiction o Then could add that claim under Rule 18- but need independent SMJ

- Even though state law wouldn’t allow recovery from third party defendant until original defendant had paid all the judgment, Rule 14(a) governs fed. court

o Don’t look at the third party claim if the plaintiff loses case- Rule 14 only deals with procedure governing claims allowed by substantive law

o Can do it without court’s leave if within 14 days of serving its answer, but otherwise, need court’s permission

- Jurisdiction must be assessed for each claim- If third party defendant and original plaintiff have same citizenship, doesn’t ruin diversity,

because no claim between them

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- If don’t have independent basis for jurisdiction, look at 1367 for supplemental jurisdiction

Owen Equipment v. Kroger (Kroger was electrocuted when boom of steel crane was too close to a power line)Issue: When the federal jurisdiction for the original claim is based on diversity, can the plaintiff assert a claim against a third party defendant, when there is no independent basis for federal jurisdiction in that claim? Rule: No. For a supplemental claim to be heard properly in federal court, it must both pass the Gibbs test, and also be permitted by statutory grant.

Convenience of litigants or considerations of judicial economy do not allow the extension of ancillary jurisdiction to a plaintiff’s cause of action against a citizen of the same state in a diversity case

In diversity suits federal courts don’t have the jurisdictional power to hear a claim asserted by a plaintiff against a third-party defendant w/o independent basis for jurisdiction

Kroger suing Owen directly is allowed under Rule 14o (1) Third party defendant can make any defenses to third party complaint as provided

in rule 12 and any counter and cross claims in rule 13 Treat Owen like a regular defendant in OPPD v. Owen No SMJ? Improper service 12(b) Must file any defenses against OPPD 13(a)

o (2) Third party defendant may assert any defenses against the original plaintiff that the third party plaintiff has against the original plaintiff (downsloping)

Owen can sue Kroger on the same things that OPPD sued Kroger about Like statute of limitations Derivative liability- they’re only liable if original defendant is liable, so want

to assert same defenses that original defendant hado (3) Third party defendant may assert against original plaintiff, any claim that is

transactionally related to the original claim Not compulsory

o (4) Kroger can make a claim against Owen - 1367 codifies Kroger

o- If OPPD sues Kroger, then Kroger can implead some other person under Rule 14

o If I’m liable to you, then you’re liable to me - Joinder is permitted under Rule 14, thought independent basis of SMJ through diversity

jurisdiction, but not, so does it have ancillary jurisdiction?o No- no jurisdiction because inconsistent with diversity statute o Way to understand 1367(b)(3)- inconsistent with diversity statute

Sneaky adding of non-diverse defendants

Before 1367- Court would allow ancillary jurisdiction over third party claim- before §1367

o Brought by defendant- impleadingo Even though Strawbridge says you need complete diversity, will allow incomplete

diversity over 14(a) additions, because defendant didn’t have a choice over the forum, so want to allow defendant to bring in an indispensable party

- Court wouldn’t allow ancillary jurisdiction when P sues third party D- before §1367o Could have sued that person directly in the first place

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o Strawbridge v. Curtis: need complete diversity o Inconsistent with diversity statute- not only is there incomplete diversity, but also

don’t want to allow sneaky plaintiff not to sue a necessary party, then hope the defendant will add them

o Plaintiff has control over litigation, defendant doesn’t, so plaintiff shouldn’t be allowed to use 14(a) to sue a third party defendant

o “inconsistent with diversity statute” means it’s too much like the original plaintiff suing a non-diverse defendant in the first place- complete diversity plus worried about collusion/sneaky plaintiff

After 1367- Does it work under A?

o Same T&O, operative nucleus of operative facto If Neb 1 is liable to Iowa, Nebraska 3 is liable to me (Neb 1 sues Neb 3) o Judicial efficiency to hear it all together

Would have the same witnesses, evidence for Iowa v. Neb 1 and Neb 1 v Neb 3

- Is it denied under B? o Main claim from Iowa to Neb 1 is solely on diversityo And it’s a claim made by a plaintiff joined under rule 19, 14, 20, 24o YES- join Neb 3 under Rule 14(a)

- Is it inconsistent with diversity under C?o Inconsistent with §1332?o Not an original claim, but is a new party (an indemnification claim)o After Kroger, wasn’t inconsistent with 1332, Neb 1 is acting as defendant o Not an affirmative claim, it’s a derivative claim trying to pass on liability

- All indemnity claims should be allowed under supplemental jurisdiction - Defendant or third party defendant can always bring in another party

o 1367 B only excludes claims brought by plaintiffs

2. Compulsory Joindera) Procedural Aspects

i. When a party is left out of a case, and he must be added to the case to provide complete relief to plaintiff, avoid prejudice to someone in the case, or avoid prejudice to someone outside of the case

ii. Process:a. (1) Do you want the party in? Are they “necessary”?b. Absence of party will prevent complete relief to parties involved, impair

subject matter of action, or make current parties subject to a risk of inconsistent obligations? (If yes- then party is necessary)

c. (2) Can you get the party?d. Do you have PJ over the party? Will adding the party destroy SMJ? Will

adding the party destroy venue (based on citizenship of all defendants)? e. (3) If you can’t get them, do you dismiss the case?f. Rule 19(b) assess prejudice to parties (both in and out of the case) [4 ] of

leaving the party out- extent to which the court can eliminate prejudice by shaping the relief (court can delay payment of damages until all relevant litigation has been completed), will judgment be adequate without outside party. Can sequester property until directors issue dividend- create relief

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that gets around problem of inadequate relief. THEN will the plaintiff have an alternative forum available if the case is dismissed?

Haas v. Jefferson National Bank (Two men bought stock, Haas wants bank to spilit it, but Glueck still owns the other half- used them as collateral so bank doesn’t want to dkvide)Issue: Does Rule 19 require Glueck (other shareholder) to be joined? Rule: Yes. If a party is indispensible, but its adding destroys diversity, a court must dismiss the case, unless the party is deemed dispensable, in which case the case can continue to be heard in federal court without the absentee party.

Rule 19(b) allowed the district court to find that Glueck was an indispensable party, and was correct in dismissing the action for incomplete diversity

o Could: Shape relief to have a partial settlemento Since you can’t get the other half of the estate- only rule against the people

who have PJ under the court o Then she can go to another place where she has PJ over the other legatees in

another place where they have PJ

Rule 19:- Rule 19(a): governs whether you want the party

o Want the party if its absence won’t grant complete relief to the partieso (1) Do we want the parties?

Complete relief? o (2) If we want them, can we bring the parties in?

Lack of PJ, SMJo (3) If joinder is impossible, can the case proceed anyway, or should we dismiss it?

- Rule 19(b): Other people who share the undivided interest will be affected by the lawsuito Will absence make parties subject to inconsistent results or obligations?

Temple v. Synthes (Bad surgery in LA, sued Louisiana hospital and manufacturer of back disc implant)Issue: Is it required to join joint tortfeasors as indispensible parties under Rule 19(a)? Rule: No. Potential joint tortfeasors are permissive parties, and are not required to be joined under Rule 19(a).

It’s not necessary for all joint tortfeasors to be named as defendants in a single lawsuit. Joint tortfeasors are permissive parties to be joined

If they sue Synthes and defense wins, no prejudice to plaintiff because can go sue hospital and no prejudice to defendant because Synthes can always file a contribution claim against hospital and doc

o Doesn’t adversely affect parties that aren’t boundo Doesn’t adversely affect current defendant- can always bring a contribution

action if allowed against absent party Louisiana- code law (France), rest of states- common law (England)

Rule 19 Analysis- (1) Is the absentee a required party under 19(a)(1)(A)/(B)?

o Court can’t give complete relief among the partieso Person’s interest in the action is such that ruling without their presence might impair

their ability to protect their interests or make an existing party subject to duplicative and inconsistent obligations

- (2) Is joinder of absentee feasible?

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o Is there personal jurisdiction, proper venue, diversity/federal question?- (3) If joinder isn’t feasible, is it in equity and good conscience to proceed with the litigation

without the absentee party?o 1- To what extent a judgment in their absence would prejudice the absentee party? o 2- To what extent would the prejudice be lessened/avoided by: protective provisions

in the judgment, shaping the relief or other measureso 3- Will a judgment rendered in the person’s absence be adequate? o 4- Does the plaintiff have an alternative forum for relief if court dismisses for non-

joinder? - If court rules to dismiss, the absentee is “indispensible”

Jurisdictional Aspectsa) Alignment- party seeking to join an absentee party can decide which side of the case they

want to be on (D or P) which might change diversityb) §1367 might not influence Rule 19- added by plaintiffs or defendants? c) Is it a violation of Rule 11 to not follow Rule 19(c)?

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