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FederalCivil Procedure

Outline

Federal Civil Procedure MBE Outline of 109 BestMultis.com by One-Timers ©

FEDERAL CIVIL PROCEDURE

Approximately two-thirds of the 27 Civil Procedure questions on the MBE will be based on categories I, III, and V, and approximately one-third will be based on the remaining categories II, IV, VI, and VII.

Federal Civil Procedure Overview

Examinees are to assume the application of 1) the amendments to the Federal Rules of Civil Procedure through 2012; and 2) the sections of Title 28 to the U.S. Code pertaining to jurisdiction, venue,and transfer.

MBE TIP: Expect many of the questions on your bar exam to reflect the examples set out in this outline! Case names and statutes are cited only for reference. Thus, you do not need to memorize or know them for the bar exam.

I. JURISDICTION AND VENUE

A. Federal Subject Matter Jurisdiction (Federal Question, Diversity, Supplemental, and Removal)

Subject Matter Jurisdiction

Subject matter jurisdiction refers to the court’s power to hear a particular type of case. Federal courts are courts of limited jurisdiction. This means they are “limited” in the type of cases they are allowed to hear. A federal court may properly exercise jurisdiction in diversity actions and cases involving federal questions.

Subject matter jurisdiction cannot be waived and it may be raised at any time, even on appeal. Indeed, a federal court can raise subject matter jurisdiction on its own. * This concept is frequently tested.

MBE TIP: It’s helpful to understand why personal jurisdiction and venue can be waived, but subject matter jurisdiction cannot. The purpose of venue is for the convenience of the parties and witnesses. Because the rule benefits the parties, it is freely waivable. Similarly, personal jurisdiction is designed to protect a defendant from defending in a foreign court, so obviously a defendant can waive personal jurisdiction. Subject matter jurisdiction, however, is a Constitutional limit on the power of federal courts. Hence, it cannot be waived by consent of the parties.

Subject Matter Jurisdiction Must be Determined Before the Court Rules on the Merits of the Case

The question of whether the court has subject matter jurisdiction must be resolved before the court may rule on the merits of the case. However, a personal jurisdiction challenge may be resolved before a subject matter jurisdiction challenge. Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574 (1999).

Exclusive Jurisdiction

By and large, federal courts have “concurrent” jurisdiction with state courts. This means most cases can be filed in either federal or state court. However, there are certain kinds of cases over which Congress has given federal courts “exclusive” jurisdiction so that the case may be filed only in federal court. Such examples include admiralty, maritime, patent, trademark, and copyright cases.


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SUBJECT MATTER JURISDICTION FLOWCHART

Federal Question claims “arising under” federal law and “embedded” federal issues

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person - place of domicile complete diversity

corporation - state of incorporation andDiversity Jurisdiction principal place of business / nerve center

and ___________________

value of the injunction amount in controversy must exceed $75,000 – aggregation of claims

the “legal certainty” testno retroactive application

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Federal Question Jurisdiction

A federal court has subject matter jurisdiction to hear cases arising under federal law or the U.S. Constitution. The rationale is federal judges are considered to be in the best position to understand federal law, resolve disputes as to its meaning, and make certain that federal law is given a uniform application. 28 U.S. Code § 1331

Where federal question jurisdiction exists, the citizenship of the parties and the amount in controversy is irrelevant. Thus, a plaintiff from California can sue a defendant from California in federal court for $15,000 for a violation of federal law.

The Well-Pleaded Complaint

The federal claim must appear on the face of the plaintiff’s well-pleaded complaint. Given the limited nature of federal subject matter jurisdiction, it is essential that the existence of jurisdiction be determined at the outset, rather than being contingent upon what may occur at later stages in the litigation.By demanding that a federal issue be raised in the complaint, the rule accomplishes this goal.

Issues that the defendant raises in the answer, including a counterclaim, or issues relating to a federal defense that the plaintiff anticipates in the complaint, are irrelevant for jurisdictional purposes.

For example, a passenger sued a railroad for breach of contract. In the complaint, the passenger alleged that the railroad would rely on federal law as a defense to the action. – In this case, there is no subject matter jurisdiction because a federal question must appear as part of the passenger’s cause of action as set out in the well-pleaded complaint. It does not suffice for federal question jurisdiction that thepassenger anticipates a defense based on federal law or even if the railroad’s answer raises a federal question. Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149 (1908). * This is a landmark case.

For example, an inventor filed suit against a manufacturer for breach of contract. In its answer, the manufacturer asserted a compulsory counterclaim for patent infringement. – In this case, there is no


federal question jurisdiction because a counterclaim, even one that is compulsory, that asserts federal lawcannot serve as the basis for federal question jurisdiction. Holmes Group, Inc. v. Vornado Air Circulation Systems, Inc., 535 U.S. 826 (2002). * Expect to see this concept tested on your bar.

Preemption and the “Artful Pleading” Doctrine

Under the “artful pleading” doctrine, when Congress has entirely preempted state law on a matter, the plaintiff may not elude federal jurisdiction by electing not to plead the federal claim. Thus, if federal law “completely preempts” state law on the issue, the case may be removed by the defendant on federal question grounds because the only possible claim is federal.

For example, a plaintiff filed suit against a defendant in state court for violation of the state’s patent infringement law. A federal patent law encompasses the type of claim pleaded by the plaintiff and “expressly preempts” all state laws on the subject. – In this example, the plaintiff cannot “artfully plead” the state law claim in order to avoid federal subject matter jurisdiction. The defendant may remove the action to federal court even though the plaintiff’s complaint only alleges a violation of state law because Congress has entirely preempted state law on the matter. Thus, the only possible claim is federal. Beneficial National Bank v. Anderson, 539 U.S. 1 (2003).

MBE TIP: Unless the state law claim is “entirely preempted” by federal law, only focus on the plaintiff’s complaint when attempting to determine whether a federal question exists. A defendant may not remove a case to federal court by alleging a federal defense.

Significance of the Federal Question

The federal question must be substantial in the sense that it is not frivolous. It must implicate a sufficiently significant federal interest to warrant a federal forum. Two tests are used for deciding the significance of a federal question: (1) the creation test; and (2) the “embedded” federal question test, i.e., when a state law claim turns on the interpretation of a substantial federal issue.

The Creation Test

The creation test simply asks whether federal law created the cause of action on which the plaintiff is suing. American Well Works Co. v. Layne & Bowler Co., 241 U.S. 257 (1916).

For example, a patent holder brought a “patent infringement” action in federal court against a licensee of the patent. – In this example, the patent holder’s claim clearly presents a federal question because a federal statute is the source of the patent holder’s claim.

The creation test works well for the majority of federal question cases. But even if a claim fails topass the creation test – because it is a “state law” claim – it still might qualify for federal question jurisdiction if it contains a pivotal federal question.

State Law Claims that Implicate Significant Federal Issues

In certain cases, federal question jurisdiction will extend over state law claims that implicate “significant” federal issues. This generally occurs when the court’s decision depends upon the validity of a federal statute. The doctrine captures the notion that a federal court ought to be able to hear state law claims that turn on substantial questions of federal law. The substantiality inquiry looks to the importance of the issue to the federal system.


For example, the IRS seized a man’s real property and sold it to a woman. The IRS acted under a federal statute that required it to give notice of the seizure. The man brought a state law quiet title action in state court, claiming that the woman’s title was invalid because the IRS had failed to notify him of the seizure as required by the federal statute. – In this case, a federal court does have jurisdiction over the claim because the case hinges on the meaning and interpretation of the federal statute. In fact, the only contested issue in the case is premised on federal law and the issue is of substantial importance to the federal government. The federal government has a strong interest in having the courts supply a uniform answer to what type of notice is required under the federal statute, and resolution of the issue is important to the federal system as a whole. Grable & Sons v. Darue Engineering, 545 U.S. 308 (2005).

For example, a plaintiff sued under a state law claim, but his right to relief depended upon the application of federal law, i.e., whether the federal statute was unconstitutional. – In this case, federal subject matter jurisdiction was proper. Smith v. Kansas City Title & Trust Co., 255 U.S. 180 (1921).

MBE TIP: Focus on the nature of the federal interest at stake, the importance of the issue to the federal system, and whether the “state law” claim turns on an interpretation of federal law. Because this is a somewhat confusing area of federal question jurisdiction, and given that the test must be objective, the examiners will literally push you in the right direction. Just pay close attention to the facts.

Motion to Dismiss for Lack of Subject Matter Jurisdiction vs. Motion to Dismiss for Failure to State a Claim

A federal court is required to determine whether it has subject matter jurisdiction before it considers the merits of the case. If the plaintiff’s claim is clearly based upon federal law, it qualifies for federal question jurisdiction even if it is invalid on the merits. If the claim is invalid, the federal court willdismiss for failure to state a claim upon which relief can be granted, not for lack of subject matter jurisdiction.

There are differences between the effect of a dismissal for lack of subject matters jurisdiction and dismissal for failure to state a claim. If the court dismisses for failure to state a claim, the decision is on the merits and cannot be later refiled. Such a decision has res judicata effect. But a dismissal for “lack of subject matter jurisdiction” has no res judicata effect and allows the plaintiff to refile her case in state court.

For example, an employee brought a civil rights action against her former employer. The federal statute under which the employee sued requires an employer to have at least 15 employees. – If the employer does not have 15 employees, the motion would be for failure to state a claim upon which relief can be granted, not for lack of subject matter jurisdiction. The employee’s claim clearly arises under federal law, but since she will not be able to prove an “essential element” of her claim, the court will dismiss for failure to state claim and the dismissal will be on the merits. Arbaugh v. Y & H Corp., 546 U.S. 500 (2006).

KEY POINTS: Federal courts have subject matter jurisdiction to hear cases arising under federallaw or the U.S. Constitution. Where federal question jurisdiction exists, the citizenship of the parties and the amount in controversy is irrelevant. – The federal claim must appear on the face of the plaintiff’s well-pleaded complaint. Issues that the defendant raises in the answer, including a counterclaim, or issues relating to a federal defense that the plaintiff anticipates in the complaint, are irrelevant. – If federal law completely preempts state law, the case may be removed by the defendant. – A federal court has federal question jurisdiction where federal law created the cause of action on which the plaintiff is suing or where a state law claim implicates “significant” federal issues, i.e., the state law claim turns on substantial questions of federal law. – If the plaintiff’s claim is clearly based upon federal law, it


qualifies for federal question jurisdiction even if it is invalid on the merits. If the claim is invalid on the merits, the court will dismiss for failure to state a claim upon which relief can be granted.

Diversity Jurisdiction SCALDING HOT TOPIC

Diversity jurisdiction requires that: (i) every plaintiff be completely diverse from every defendant; and (ii) the amount in controversy must exceed $75,000, exclusive of interests and costs. The rationale for creating diversity jurisdiction is to afford an alternative forum to out-of-state litigants who might be victims of local prejudice. 28 U.S. Code § 1332(a)

Complete Diversity

Complete diversity means that no plaintiff is a citizen of the same state as any defendant. If “any” defendant is a citizen of the same state as “any” plaintiff, complete diversity does not exist.

For example, two partners sued three tortfeasors in federal court. One partner is a citizen of State A and the other partner is a citizen of State B. One tortfeasor is from State A, and the other two tortfeasors are from State C. – In this case, complete diversity is lacking because one of the partners has the same citizenship as one of the tortfeasors. Strawbridge v. Curtiss, 7 U.S. 267 (1806).

Compare: Two partners sued three tortfeasors in federal court. One partner is a citizen of State A and the other partner is a citizen of State B. The three tortfeasors are from State C. – In this case, there is complete diversity between the parties because no plaintiff is a citizen of the same state as any defendant. The fact that all three tortfeasors have the same citizenship is irrelevant. The rule only requires that no plaintiff be a co-citizen with any defendant.

MBE TIP: The rule of “complete diversity” is the most important aspect of diversity jurisdiction.

Domicile of an Individual – Physical Presence with Intent to Remain

The citizenship of a person is based on domicile – the place where the person lives with the “intent” to remain. A person can only have one domicile at a time. Once established, domicile continues until it is changed. In order to change domicile, the person must be: (i) physically present in the new state; and (ii) have the intent to permanently remain. Both of these elements must be established at the same time in order to change domicile.

For example, a woman, a resident of State A, took a temporary position in State B. The woman lived in State B for a few months. She had no desire to stay in State B, nor did she intend to return to State A. The woman had plans to move to State C when her position terminated. – On these facts, the woman is “domiciled” in State A. She is not a citizen of State B because she does not intend to remain there. She is not a citizen of State C because intent without physical presence does not change domicile. Therefore, the woman is still a citizen of State A, because domicile once established continues until a newone is acquired. * Expect to see this concept tested on your bar exam.

For example, a woman took an “indefinite” leave of absence from her job, sublet her apartment inCalifornia, and went to care for her elderly mother in Arizona. A few months later, the woman was seriously injured by a negligent driver who is a citizen of Arizona. The woman sued the driver for $80,000 in federal court. – In this case, the woman will be deemed a citizen of California. She only took aleave of absence from her job, she did not quit. Furthermore, she “sublet” her apartment showing her intent to return. Therefore, the woman and the driver are completely diverse.


It is important to remember that presence in a new state without the intent to remain does not change domicile. Similarly, the intent to make a new state your home without being physically present in that state does not change domicile.

VOCABULARY LESSON: The words “citizenship” and “domicile” are synonymous. Thus, the terms are used interchangeably. Residence, on the other hand, refers to where a person lives for a period of time(out-of-state college student) or has a temporary home (vacation home). For purposes of diversity: domicile = residence (physical presence) plus intent. I have to admit when I was in law school these threewords drove me crazy.

Diversity is Determined at the Time the Case is Filed

Diversity must exist at the time the case is filed. It is irrelevant that the parties had the same citizenship when the cause of action arose. Similarly, it makes no difference if the parties have the same citizenship when the case goes to trial. Thus, diversity need only exist at the commencement of the action. Grupo Dataflux v. Atlas Global Group, 541 U.S. 567 (2004).

For example, a woman from State A got into a car accident with a man from State A. After the accident, the woman moved to State B. She then filed a federal diversity action against the man, seeking $100,000 in damages. – In this case, jurisdiction is proper.

For example, a citizen of State A filed a federal diversity action against a contractor from State A,seeking $100,000 in damages for breach. After the case was filed, the contractor moved to State B. – In this example, jurisdiction is not proper because the parties had the same citizenship at the time the suit commenced.

Motive is Irrelevant

It has long been the rule that motive for the change in residence is irrelevant in determining domicile. A change of domicile will be recognized even if it was made for the purpose of creating diversity jurisdiction.

Moreover, there is no minimum period of residency required. A citizen of the United States can instantly transfer his citizenship from one state to another.

The word “state” includes the District of Columbia and Puerto Rico. 28 U.S. Code § 1332(e)

Corporations – State of Incorporation and Principal Place of Business

For diversity purposes, a corporation is deemed to be a citizen of every state, and foreign country,in which it has been incorporated and the “one” place where it has its principal place of business. Thus, corporations often have dual citizenship. 28 U.S.C. § 1332(c)

A corporation may be incorporated in more than one state, but it can only have one principal place of business.

Principal place of business refers to the place where the corporation’s high level officers direct, control, and coordinate the corporation’s activities, i.e., its “nerve center,” which will typically be found at its corporate headquarters. Hertz Corp. v. Friend, 559 U.S. 77 (2010). * This concept is frequently tested.


For example, a citizen of State A sued a corporation for breach of contract in federal court. The corporation is incorporated in State B, and has its corporate headquarters in State C. – In this case, the court has jurisdiction over the claim because the parties are completely diversity.

As a final matter, if a corporation is incorporated abroad, diversity jurisdiction is destroyed in a lawsuit against a foreign citizen, even if the corporation’s principal place of business is in the United States.

For example, a corporation sued a Taiwanese businessman, alleging $1 million in damages. The corporation is incorporated in the Cayman Islands and has its principal place of business in Texas. – In this example, a federal court lacks jurisdiction over the case because there are aliens on both sides of the litigation. This is true even though the corporation has its principal place of business in the U.S.

Amount in Controversy

In addition to complete diversity, the amount in controversy must exceed $75,000, exclusive of interest and costs. The sum claimed by the plaintiff controls if the claim is made in good faith.

MBE TIP: Issues concerning the “amount in controversy” are heavily tested.

The “Legal Certainty” Test

The amount in controversy is determined by what is claimed in the plaintiff’s complaint. The plaintiff’s good faith allegations will suffice unless it appears to a “legal certainty” that the jurisdictional amount cannot be recovered. This is known as the legal certainty test. Thus, there need only be some legal possibility the plaintiff will recover in excess of $75,000. * This concept was just tested.

No Retroactive Application

Subject matter jurisdiction is not retroactively defeated if judgment is ultimately entered for less than the jurisdictional amount. Thus, the fact that the plaintiff’s actual recovery is less than $75,000 does not retroactively affect the jurisdiction of the court. The rationale is if the existence of subject matter jurisdiction were to depend on the amount the plaintiff ultimately recovers, a number of cases would be thrown out after a lengthy trial.

For example, a plaintiff from Oregon filed a lawsuit against a defendant from Texas in federal district court demanding damages for personal injury in the amount of $70,000 and for property damage in the amount of $10,000. After trial, the court entered judgment for the plaintiff in the amount of $60,000. – In this example, the amount in controversy was originally satisfied because a plaintiff may aggregate all the claims she has against the same defendant. More importantly, the fact that the plaintiff’s actual recovery was less than $75,000 does not retroactively defeat subject matter jurisdiction. Thus, jurisdiction was proper.

Value of an Injunction

When the plaintiff seeks an injunction, the plaintiff may add the value of the injunction to her claim to satisfy the amount in controversy. Most courts calculate the amount of the injunction by determining the value to the plaintiff. Other courts look at the cost to the defendant.

For example, a plaintiff was walking to her car in the parking lot of the defendant’s store in Nevada when she was struck by a car. The plaintiff claims her view was obstructed by a large concrete column in the defendant’s parking lot. The plaintiff is a resident of Arizona and the defendant is


incorporated and has its principal place of business in Nevada. The plaintiff sued the defendant in federal court in Nevada. Her complaint sought $60,000 in damages and also asked the court for an injunction ordering the defendant to tear down the concrete column. – In this case, in order to meet the amount in controversy, the court will either value the injunction by the cost to the defendant, which is likely to be substantial, or the value to the plaintiff, which will probably be nominal, to determine whether the amount in controversy meets the jurisdictional amount.

Aggregation of Claims

In certain situations, a plaintiff may aggregate (add together) multiple claims to satisfy the amount in controversy. Thus, for purposes of meeting the jurisdictional amount

(i) a plaintiff may aggregate all the claims she has against the same defendant;(ii) a plaintiff may aggregate claims against multiple defendants if they are jointly liable; and(iii) multiple plaintiffs may aggregate their claims against one defendant when they are

seeking to enforce a right in which they have a common undivided interest. The best example of this is a class action lawsuit.

For example, a plaintiff filed a negligence claim in federal court seeking $50,000 from Dan and $30,000 from Doris. The plaintiff is from California, Dan is from Nevada, and Doris is from Arizona. – Inthis example, the federal court does not have jurisdiction to hear the case because the plaintiff may not aggregate her claims against multiple defendants unless they are jointly liable.

The Defendant’s Counterclaim May Not be Added

A defendant’s counterclaim cannot be combined with the plaintiff’s cause of action to reach the jurisdictional amount.

For example, a plaintiff filed a complaint against a defendant in federal court on the basis of diversity jurisdiction alleging $70,000 in property damage. The defendant filed a compulsory counterclaim to recover $20,000 in property damage. – In this case, the amount in controversy does not exceed $75,000 because the defendant’s counterclaim cannot be combined with the plaintiff’s cause of action to reach the jurisdictional amount.

Supplemental Jurisdiction HOT TOPIC

When a federal court possesses subject matter jurisdiction over a claim, it may exercise supplemental jurisdiction over a “related” claim that would not independently satisfy subject matter jurisdiction if it arises from a common nucleus of operative fact as the claim that invoked subject matter jurisdiction. Essentially, the supplemental claim must be part of the same transaction or occurrence as the plaintiff’s claim. The rationale for supplemental jurisdiction is to promote judicial economy and the efficient administration of justice by having all related claims decided in one proceeding.

The terms “common nucleus of operative fact” and “same transaction or occurrence” can be used interchangeably.

Federal Question Cases

When a plaintiff asserts both a federal claim and a state law claim, a federal court has discretion to exercise supplemental jurisdiction over the state law claim if the two claims derive from a “common


nucleus of operative fact” and are such that a plaintiff would ordinarily be expected to try them in one proceeding.

For example, a plaintiff sued a defendant in federal court for violation of federal law and also added a related state law claim. The claims are part of the same transaction or occurrence. The plaintiff and the defendant are both citizens of California. – In this case, the court may exercise supplemental jurisdiction over the state law claim even though it has no independent basis for subject matter jurisdiction because the state law claim arises from the same transaction or occurrence as the federal claim. In essence, the two claims are so related that they form part of the same case or controversy and it is reasonable to expect them to be resolved in one action.

Diversity Cases

In diversity cases, a claim that does not meet the amount in controversy requirement may invoke supplemental jurisdiction if it arises from a common nucleus of operative fact. But keep in mind the court cannot exercise supplemental jurisdiction over a claim that would defeat the complete diversity requirement.

For example, a driver sued a defendant for negligence claiming $100,000 worth of damages from a car accident. The driver is from California and the defendant is a resident of Nevada. After the case is filed, the passenger of the driver’s car wishes to assert a claim against the defendant for $20,000 for injuries suffered in the accident. The passenger is a resident of Pennsylvania. – In this case, the passenger’s claim does not satisfy subject matter jurisdiction because it is not a federal question and does not independently meet the amount in controversy. However, the passenger’s claim invokes “supplemental jurisdiction” because it is part of the same transaction or occurrence.

Compare: If the passenger was a resident of Nevada (the same citizenship of the defendant), the claim cannot be heard. The reason is because the court cannot exercise supplemental jurisdiction over a claim that would defeat the complete diversity requirement.

Compulsory Counterclaims

A compulsory counterclaim is a claim by the defendant against the plaintiff that arises out of the same transaction or occurrence as the plaintiff’s claim. It is compulsory because the defendant must bring it or it will be barred. A “compulsory” counterclaim does not need an independent basis for subject matter jurisdiction because the court will have supplemental jurisdiction over it.

For example, a plaintiff sued a defendant in federal court on the basis of diversity jurisdiction alleging $90,000 in damages from an automobile accident. The plaintiff is a resident of New York and thedefendant is a resident of Texas. After being served with the complaint, the defendant filed a counterclaim against the plaintiff to recover $20,000 in property damage from the same incident. – In this case, the defendant’s counterclaim is compulsory because it arises from the same transaction or occurrence as the plaintiff’s claim. Even though the defendant’s claim does not have an independent basisfor subject matter jurisdiction (it does not raise a federal question and does not satisfy the amount in controversy) the court will hear it under supplemental jurisdiction.

To clarify, supplemental jurisdiction deals with whether a claim that cannot satisfy subject matter jurisdiction may be joined with another claim that has already satisfied federal subject matter jurisdiction.

Federal Question A federal court will have supplemental jurisdiction over statelaw claims that arise from a common nucleus of operative fact.


Diversity Jurisdiction A federal court will have supplemental jurisdiction over claimsthat don’t meet the amount in controversy if they are part of the same transaction or occurrence and so long as complete diversitystill exists.

Permissive Counterclaims

A permissive counterclaim, one that arises out of an “unrelated” transaction, must have an independent basis for subject matter jurisdiction. Thus, supplemental jurisdiction does not apply to permissive counterclaims.

Removal (From State to Federal Court) A defendant may remove a case from state court to federal court if the plaintiff could have

originally filed the case in federal court. Only defendants may remove. If there is more than one defendant, all defendants must join in the removal. The rationale for removal is that defendants, as well as plaintiffs, should have the option to choose federal court for cases that fall within the court’s jurisdiction. 28 U.S. Code § 1441 * This concept was just tested.

After filing a notice of removal, the state court must not proceed any further in the action.

MBE TIP: Whenever you get a question on removal, make sure to consider subject matter jurisdiction. The reason is because anytime a case is removed to federal court, subject matter jurisdiction must be satisfied.

If the plaintiff amends the complaint to add a federal claim or to dismiss a non-diverse defendant,the defendant can then remove the case to federal court. But if the defendant asserts a defense based on federal law, the case is not removable unless federal law has completely preempted state law in the area.

For example, a case is not removable if the defendant files a counterclaim based on federal law. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941).

Compare: A plaintiff cannot defeat removal by failing to plead a federal claim that preempts statelaw. – If the only remedy available to the plaintiff is based on federal law because the state law claim hasbeen preempted, the case is removable regardless of what is in the plaintiff’s complaint.

Removal Based on Diversity

An action brought in state court may not be removed under diversity jurisdiction if any defendantis a citizen of the state in which the action is brought. The rationale is since diversity jurisdiction was created to provide an alternative forum to out-of-state litigants who might be the victims of local prejudice, if one of the defendants is a citizen of the state where the case is filed, there is no prejudice to protect against. * This concept is frequently tested.

Generally, the sum demanded in the plaintiff’s good faith complaint controls. However, a defendant may file a notice of removal claiming that the amount in controversy is actually met if: (i) the complaint seeks non-monetary relief; (ii) state law does not permit the plaintiff to state an amount; or (iii)state law permits recovery of damages in excess of the amount demanded. In such cases, removal will be permitted if the court finds the amount in controversy exceeds $75,000 by a preponderance of the evidence.


Once a case is properly removed, the plaintiff may not divest the federal court of jurisdiction by reducing the claim to less than the jurisdictional amount. Additionally, a defendant cannot change domicile after the case is filed in state court in order to seek removal.

Removal Based on Federal Question

When subject matter jurisdiction is based on a federal question, the defendants can remove without regard to citizenship. The reason is because federal courts are particularly qualified to decide cases arising under federal law.

For example, a plaintiff brought a negligence claim against a defendant for $100,000. The plaintiff is a resident of California and the defendant is a resident of Arizona. The plaintiff filed the actionin an Arizona state court. – Even though the parties are completely diverse and the amount in controversy is satisfied, the defendant may not remove the case to federal court because the defendant is a resident of the state in which the action is pending.

Compare: A plaintiff brought a “federal cause of action” against a defendant for $100,000 in an Arizona state court. The plaintiff is a resident of California and the defendant is a resident of Arizona. – In this example, the defendant may remove the case to federal court because subject matter jurisdiction is based on a federal question, not diversity, so citizenship is irrelevant.

Venue Automatically Satisfied After Removal

Once a case is properly removed to federal court, venue is automatically satisfied. The usual venue rules do not apply in removed action.

Removal is Proper Even if the State Court Did Not Have Jurisdiction Over the Claim

Removal is allowed even if the state court did not have jurisdiction over the claim. This will occur when Congress has given federal courts exclusive jurisdiction over a claim, but the plaintiff erroneously filed in state court.

For example, a plaintiff brought a patent infringement action in state court. Federal courts have exclusive jurisdiction over patent cases. The defendant filed a notice of removal. – In this example, the federal court may hear the case even though the state court did not have jurisdiction over the claim.

Joinder of Federal and “Unrelated” State Law Claim – Sever and Remand

If the plaintiff asserts a claim under federal law and joins an unrelated state law claim in which there is no diversity, the entire action may be removed. However, the federal court must sever and remand the state law claim. The end result is the parties will face litigation in both state and federal court.

For example, a plaintiff from State A sued a defendant from State A, in state court, for violation of the plaintiff’s federal civil rights. The plaintiff also asserted a state law battery claim against the defendant from the same incident. The defendant removed the case to federal court. – In this example, the federal court will hear the case because it falls within the court’s supplemental jurisdiction.

Compare: A plaintiff from State A sued a defendant from State A, in state court, for violation of the plaintiff’s federal civil rights. The plaintiff also asserted an unrelated contracts claim against the defendant. The defendant removed the case to federal court. – In this example, removal is allowed but thefederal court must sever and remand the “unrelated” contracts claim because the court has no jurisdiction


(supplemental or subject matter) over it. However, the federal court will hear the federal claim. This means the parties end up litigating in both state and federal court.

Time Requirements for Removal

A defendant must file a notice of removal within 30 days from the time the case becomes removable. 28 U.S. Code § 1446. If the case is removable from the start, the defendant has 30 days from the time he is formally served.

Removal Based on Diversity – One Year Rule

A case may not be removed on the basis of “diversity” if more than 1 year has passed since commencement of the action. The one year rule does not apply if the court finds that the plaintiff acted in bad faith in order to prevent removal, e.g., deceptively joining a non-diverse defendant when there is no basis for the claim but dismissing that defendant after a year, delay in serving a defendant who regularly files for removal until after one year has passed, fraudulently concealing a legitimate ground of removal, or failing to disclose the real amount in controversy.

For example, a plaintiff deliberately failed to disclose the actual amount in controversy to preventremoval. During discovery, the defendant learned the plaintiff’s claim is worth much more than the sum demanded in the complaint. Because such conduct is considered bad faith, the case is removable even if more than one year has passed.

For example, a plaintiff from State A files a state law claim against a defendant from State A andanother defendant from State B. Assume the amount in controversy is met. – The case is not removable because complete diversity is lacking. However, if the defendant from State A is dismissed from the action, the defendant from State B may now remove the case if it has been less than one year since commencement of the action and the plaintiff has not acted in bad faith. After being given notice of the dismissal, the defendant has 30 days to remove.

Remember the one-year rule only applies to diversity actions. Thus, if more than one year has passed and the plaintiff amends her complaint to add a federal claim, the defendant may remove within 30days. Thus, there is no time limit for removal based on a federal question.

Defendants Served at Different Times

If multiple defendants are served at different times, and a later-served defendant files a notice of removal, any earlier-served defendant may consent to the removal even though that earlier-served defendant did not previously initiate or consent to removal.

For example, a plaintiff filed a federal claim, in state court, against a man. The man did not seek removal. Sixty days later, the plaintiff amended her complaint and added a woman as a defendant. The woman was served with process and filed a notice of removal. – Because each defendant has 30 days after being served to file a notice of removal, the man may consent to the removal even though his 30-dayperiod has passed. Of course, the case is not removable if the man objects.

Removal is Measured at the Time the Defendant Files a Notice of Removal

Removal is measured at the time the defendant files a notice of removal. Thus, subject matter jurisdiction must exist at that time. A case that is initially non-removable may become removable if a non-diverse defendant is voluntarily dismissed or if the plaintiff amends her complaint to add a federal claim or increase the amount in controversy.


Furthermore, the Supreme Court has held when complete diversity is lacking at the time the notice of removal is filed, but is later cured by dismissal of the non-diverse party before final judgment, the judgment could stand. The court reasoned once a case has been tried considerations of finality, efficiency, and economy become overwhelming. Caterpillar, Inc. v. Lewis, 519 U.S. 61 (1996).

Compare: If complete diversity is lacking when the case is filed, and one of the parties changes citizenship before the case begins, subject matter jurisdiction is not satisfied. Grupo Dataflux v. Atlas Global Group, L. P., 541 U.S. 567 (2004). This rule prevents a defendant from changing domicile after the case is filed in order to seek removal._____________________________________________________________________________________

REMOVAL FLOWCHART

If jurisdiction is basedA notice of on diversity, no defendant

A defendant If there is removal must can be a citizen of the statemay seek removal more than one be filed where the action was brought.if the federal court defendant, all within 30 dayshas subject matter defendants must from the timejurisdiction. join in removal. the case If jurisdiction is based on a

becomes federal question, the defendantsremovable. * can remove without regard

to citizenship.

* Removal based on diversity is subject to the one-year rule absent bad faith by the plaintiff._____________________________________________________________________________________

MBE TIP: Removal is the one section where the examiners can really turn you inside-out. There are so many intricate areas for them to test on. Here’s the tip – make sure to read slowly and carefully when analyzing a venue question. Read the venue section 2 or 3 times and make sure to do every MBE questionincluding reading both the right and wrong explanations.

Remand (Back Down to State Court)

Remand occurs when a federal court sends the case back to state court. A motion to remand mustbe made within 30 days after removal. 28 U.S. Code § 1447

If, at any time, the federal court lacks subject matter jurisdiction, the case must be remanded and sent back to state court. But recall, if the court erroneously fails to remand, and the defect in subject matter jurisdiction is cured, the judgment will stand.

Adding Non-Diverse Parties After Removal – Deny or Remand

If after removal, the plaintiff seeks to join additional defendants whose joinder would destroy diversity, the court may deny joinder or permit joinder and remand the action to state court.

For example, a plaintiff, a resident of California, brought suit in a California “state” court against a corporation with its principal place of business in Nevada. The suit was for damages of $90,000 allegingthat the corporation breached a contract. The corporation removed the case to federal court. A few days before trial, the plaintiff learned for the first time the corporation was incorporated in California. She


moved to have the case remanded to state court. – In this example, the court must “remand” the case backto state court because the federal court lacks subject matter jurisdiction.

Any defendant who is served after removal, has the right to remand the case.

ESSAY TIP: Removal and remand go together.

Removal When the defendant takes the case from state court to federal court.

Remand When the federal court sends the case back to state court because ofsome defect or because it lacks subject matter jurisdiction.

KEY POINTS: Any “defendant” may remove a case to federal court if subject matter jurisdiction is satisfied. – All defendants must join in the removal. – Defenses or counterclaims based on federal law do not permit removal but removal is allowed if the plaintiff’s claim is preempted by federal law. – When removal is based on diversity removal is not allowed if “any” defendant is a citizen of the state in which the action is brought. This rule does not apply to federal questions. – The sum in the plaintiff’s complaint controls except when state law makes the actual amount unclear. – A defendant cannot change domicile in order to seek removal. Upon removal, venue is automatically satisfied. – Removal is allowed even if the state court did not have jurisdiction over the claim. – An “unrelated” state law claim will be severed and remanded on removal; the federal claim will stay in federal court.

A notice of removal must be filed within 30 days from the time the defendant is “formally served” or when the case becomes removable. A case may not be removed on the basis of “diversity” if more than 1year has passed unless the plaintiff acted in bad faith. – A later-served defendant can remove with the consent of an earlier-served defendant. – A motion to remand must be made within 30 days except when based on lack of subject matter jurisdiction. – The addition of a non-diverse party after removal allows the court to deny joinder or permit and remand.

B. Personal Jurisdiction

Personal Jurisdiction SCALDING HOT TOPIC

Personal jurisdiction refers to the court’s power over a particular defendant. Personal jurisdictionmust be satisfied in both federal and state court. Of course, jurisdiction over the plaintiff will never be in issue since the plaintiff consents to jurisdiction by selecting the court in which to file.

Traditional Bases

Traditionally there were three ways a court could exercise personal jurisdiction over a defendant. They include: (i) when the defendant is personally “served” while being physically present in the forum state; (ii) where the defendant consents to jurisdiction; and (iii) when the defendant is domiciled in the forum state.

Present in the State when Served (Transient Jurisdiction)

A defendant is subject to personal jurisdiction when he is personally served while being present in the forum state. This is known as “transient” or “tag” jurisdiction. But if the plaintiff gets the defendantto enter the forum state by fraud, service of process is invalid and the court cannot exercise in personam jurisdiction over the defendant.


Consent

Personal jurisdiction is also proper when the defendant expressly or impliedly consents to jurisdiction. Consent is usually found: (i) when the defendant makes a general appearance and fails to contest personal jurisdiction at the earliest moment possible; (ii) by contract; (iii) by appointing an agent to accept service of process within the state; and (iv) where the state has a non-resident motorist statute which subjects the defendant to jurisdiction if she has an accident in the state.

Nonresident motorist long-arm statutes – implied consentImplied consent when a motorist uses the state’s roads

♦ Domicile

Defendants who are domiciled in the state are subject to personal jurisdiction. Domicile refers to the place where the defendant lives with the intent to remain.

Long Arm Statutes

A long arm statute gives a state the power to “reach out” and grab a non-resident defendant. Certain long arm statutes reach non-residents who perform certain acts within the state while others exercise jurisdiction to the fullest extent allowed by the Constitution.

Constitutional Basis (Minimum Contacts)

Under the Due Process Clause, a state may exercise personal jurisdiction over an out-of-state defendant so long as the defendant has sufficient minimum contacts with the forum state so that the exercise of jurisdiction does not offend “traditional notions of fair play and substantial justice.” International Shoe Co. v. Washington, 326 U.S. 310 (1945).

The Supreme Court has listed several factors to determine whether jurisdiction over the defendantis constitutional. They are: (i) contacts; (ii) relatedness; and (iii) fairness.

Contacts (Purposeful Availment and Foreseeability)

The defendant must have sufficient “contacts” with the forum state so that the exercise of jurisdiction would be fair and reasonable. The court must find the defendant purposefully availed himself of the privilege of conducting activities within the forum state, thereby invoking the benefits and protections of its laws. The “purposeful availment” inquiry focuses solely on the defendant’s activities.

Additionally, the defendant must reasonably anticipate that his activities with the forum state make it foreseeable he might be “haled into court” there.

For example, personal jurisdiction is found where the defendant “intentionally targets” the forum state and places an item into the stream of commerce.

Relatedness (General and Specific Jurisdiction)

Another factor to consider is whether the plaintiff’s claim is “related” to the defendant’s contacts with the forum state. When the cause of action is unrelated to the defendant’s contacts with the state, a greater showing of minimum contacts must exist.

Specific Jurisdiction (Related to the Defendant’s Contacts)


Specific jurisdiction exists when the plaintiff’s claim arises out of the defendant’s contacts with that state. Specific jurisdiction is confined to issues deriving from the very controversy that establishes jurisdiction. * This concept was just tested.

For example, a defendant was driving through Washington when he struck the plaintiff with his car. The plaintiff filed suit in federal court. – This is an example of “specific jurisdiction” because the plaintiff’s cause of action is directly related to the defendant’s contacts with the forum state.

General Jurisdiction (“Essentially at Home” in the State)

General jurisdiction requires the defendant engage in “systematic and continuous” activities suchthat the defendant is “essentially at home” in the forum state. A defendant with such extensive contacts with the state is not placed at a disadvantage in defending there. Unlike specific jurisdiction, general jurisdiction does not require the plaintiff’s cause of action to relate to the defendant’s contacts with the forum state. Thus, if general jurisdiction is satisfied, the defendant is subject to suit on any claim.

For example, an isolated sale of goods in one state might not be sufficient to justify jurisdiction, but a large volume of sales over an extended period of time should suffice.

Fairness (The Burger King Factors)

In addition to having minimum contacts with the forum state, the exercise of jurisdiction must be fair and just. The Supreme Court has listed several factors that are relevant in assessing whether jurisdiction over the defendant would be fair. These factors (known as the Burger King factors) include: (i) the burden on the defendant; (ii) the forum state’s interest in providing redress for its residents; and (iii) the plaintiff’s interest in obtaining convenient and effective relief.

Internet Activities

Currently, there is not much case law regarding Internet activities. Nevertheless, the same “minimum contacts” analysis applies. As a general rule, if a website is “passive,” which means it merely provides information, jurisdiction will usually not be found. But if a website “specifically targets” the forum state and does significant business there, that should be enough to subject it to personal jurisdiction.

_________________________________________________________________________________

PERSONAL JURISDICTION SNAPSHOT

Traditional Bases (i) present in the state when served; (ii) consent; (iii) domicile

Long Arm Statute / Constitutional Basis “Minimum Contacts” contacts

(i) purposeful availment; (ii) foreseeability stream of commerce anticipate being haled into court there

relatedness


(i) specific jurisdiction; (ii) general jurisdiction relates to contacts systematic and continuous activities

fairness (i) convenience; (ii) the forum state’s interest; (iii) plaintiff’s interest

_________________________________________________________________________________

Procedures for Raising Jurisdictional Defects

There are certain ways for a defendant to contest the court’s exercise of jurisdiction over her. The most important thing to remember about raising an objection to personal jurisdiction is the defendant must do so in a timely fashion.

General Appearance

A defendant consents to personal jurisdiction by making a general appearance. This happens when the defendant contests the merits of the case (such as by filing an answer) without challenging personal jurisdiction.

For example, if the defendant files only an answer to the complaint, he has made a general appearance and has waived the right to challenge personal jurisdiction.

Remember, a federal court must have both personal and subject matter jurisdiction to hear a case.

C. Service of Process and Notice

Service of Process

Any person who is at least 18 years old and not a party may serve a summons and complaint. Service of process may be made on an “individual” by:

(i) personally serving the defendant with a copy of the summons and complaint;(ii) following state law in the state where the court is located or where service is made;(iii) leaving a copy of the summons and complaint at the individual’s dwelling or usual place

of abode with someone of suitable age and discretion who resides there (the person receiving process does not need to be an adult); or

(iv) delivering a copy of the summons and complaint to an authorized agent. FRCP 4(e)

For example, service on the defendant’s “sixteen-year-old” daughter has been upheld; a “hotel” can be considered the defendant’s dwelling place when the defendant is staying there for a long and continuous period of time; if the defendant refuses to accept service, the process server may leave the papers in the defendant’s “immediate proximity” such as dropping the papers at the defendant’s feet.

Compare: Service is not proper if it is made at the defendant’s “vacation” home; if it is “taped” on the defendant’s door; if it is left with the defendant’s “three-year-old” son; if delivery is made to an “illiterate” maid; or if process is left with an employee at the “individual’s” place of work.

Remember, service is proper if the plaintiff complies with either state or federal law in both diversity and federal question cases. Moreover, an attorney is not a party. Thus, a lawyer may validly serve process. * This concept was just tested.


MBE TIP: The third option – leaving a copy at the individual’s usual place of abode with someone of suitable age who lives there – is the most likely way the examiners will test service of process.

Service on a Corporation

A corporation may be served according to state law or by delivering a copy of the summons and complaint to an officer or managing agent. The rationale for allowing service on an “officer” or “managing agent” is such high ranking employees are likely to realize the importance of the matter and inform the appropriate person in the corporation of the suit.

Timing

A defendant must be served within 120 days after the complaint is filed or the court will dismiss the action without prejudice.

Service of Process and the Related Concept of Personal Jurisdiction

Even if service is proper, the defendant can still challenge personal jurisdiction (unless the defendant was personally served while in the state). The core function of “service” is to provide notice of the action. Thus, service of process and personal jurisdiction should be analyzed separately.

Waiving Service of Process

A defendant has a duty to avoid unnecessary expenses of serving the summons. Thus, the plaintiffmay request the defendant waive service of process by mailing the defendant a copy of the complaint along with a request to waive service and informing the defendant of the consequences of not waiving service. The defendant has 30 days to return the waiver. Waiving service does not waive the defendant’s right to object to personal jurisdiction or venue.

The defendant may refuse to grant the waiver. If the defendant fails to return the waiver without good cause, the defendant is liable for any expenses incurred in making service, including attorney’s fees.

A defendant who timely returns a waiver has 60 days to answer to the complaint instead of the usual 21 days.

Immunity from Service of Process

Federal courts grant immunity from service for parties, witnesses, and attorneys who enter the state for the specific purpose of appearing in “another” case. The rationale is that immunity is designed to protect against the risk that people would be unwilling to attend trial for fear of being served while in the state.

Courts refuse to grant immunity when a party is served while attending a hearing “related to” the proceeding for which the party is being sued.

For example, an attorney appeared at a disciplinary hearing before the State Bar. The attorney was served while testifying by the party who initially brought the complaint. – In this example, service was proper because it was made at a proceeding related to the one for which the attorney was appearing.

Impermissible Uses of Service of Process – Force or Fraud


If a party was induced by force or fraud “to enter” the state, service is invalid. For example, the plaintiff cannot “trick” the defendant into entering the state so service can be made; nor can the plaintiff serve the defendant when the defendant is invited into the state to negotiate a settlement.

Compare: A defendant who is hiding “in the state” may be flushed out by trickery. The rule only applies when the defendant is fraudulently induced “to enter” the forum state.

The important thing to remember is there must be deceitful conduct by the plaintiff that causes the defendant “to enter” the forum state for service to be rendered invalid.

MBE TIP: There will definitely be one question dealing with notice or service of process.

Insufficient Process vs. Insufficient Service of Process

The difference between insufficient “process” and insufficient “service of process” is worth mentioning. Insufficient process is raised when the summons is defective. Insufficient service challengesthe way the defendant received the summons and complaint, i.e., the way the defendant was served.

Notice and Due Process Concerns

Due process entitles individuals whose interests are at stake to notice and an opportunity to be heard. “Notice” must be reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action. The degree of notice will vary with the circumstances.

MBE TIP: In order to determine whether “notice” was proper in a given case, use common sense. Just ask yourself, “Was the method used to notify the defendant reasonable under the circumstances?”

For example, the court had to decide the interests of many trust beneficiaries. The beneficiaries fell into two categories: (1) those whose names and addresses were known; and (2) those who were unknowable. – In this case, the court refused to permit notice by publication to the first category because “under the circumstances” publication was not reasonably calculated to reach those who could easily be informed by first-class mail. However, the court allowed notice by publication to the beneficiaries in the second category because individualized notice was impractical under the circumstances. Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950).

For example, state law allowed eviction notices to be posted on the front door of a tenant’s apartment, but such notices were often torn off doors. – Here, the court held that service was invalid. Even though service complied with state law, the “process” used was not reasonably calculated to give the defendant notice of the action. Thus, it violated due process. Greene v. Lindsey, 456 U.S. 444 (1982).

For example, the FBI began an administrative process to forfeit the property of a prisoner that was seized when officers executed a search warrant for the residence where the prisoner was arrested. TheFBI sent notice by certified mail addressed to the prisoner’s care at the correctional facility where he was incarcerated; to the address of the residence where he was arrested; and to an address in the town where his mother lived. The FBI received no response. The prison had detailed procedures in place to ensure that mail was properly delivered to the inmates. – On these facts, the sending of notice by certified mail tothe prisoner’s place of incarceration satisfied due process because it was reasonably certain to inform theprisoner of the pending action. Dusenbery v. United States, 534 U.S. 161 (2002).

For example, a homeowner failed to pay his property taxes. The state mailed the homeowner a certified letter at the property’s address, stating unless he redeemed the property, it would be subject to public sale. The letter was returned “unclaimed.” The state then published a notice of public sale in a


local newspaper. After that the house was sold. – In this case, the court held when the letter was returned undelivered, due process required the state to take other practical steps to attempt to notify the homeowner before selling his property since it was practicable to do so. The state could have resent the letter by regular mail, posted a notice on the front door, or even resent the notice by addressing it to occupant. Each of these possibilities would have increased the likelihood that any occupants would alert the owner of the pending sale. Jones v. Flowers, 547 U.S. 220 (2006).

MBE TIP: As a general rule, notice by publication should only be used when there is no other reasonableway to find the defendant. In other words, notice by publication should only be used as a last resort.

Actual Notice Not Required

If a reasonable method is used to notify the defendant of the action, the judgment is binding even if the defendant does not actually receive notice. Due process only requires “reasonable efforts” to provide notice, it does not require actual notice.

Prejudgment Seizures

Prejudgment attachments prevent the defendant from disposing of property that might be used to satisfy the judgment. Such seizures are subject to due process concerns. Courts use a “balancing test” to weigh the interests involved. Essentially, the court looks at the interests involved, the risk of erroneous deprivation, the procedures involved for deciding a prejudgment attachment (what must the plaintiff show), and whether there is a swift system in place that allows the defendant to recapture his property.

For example, a “bare assertion” by the plaintiff that she is entitled to a writ of attachment is insufficient; but a “sworn and factually detailed” showing made to the judge coupled with an immediate post-deprivation hearing is likely to suffice. Mitchell v. W. T. Grant Co., 416 U.S. 600 (1974).

For example, a defendant’s due process rights were violated by a state law allowing prejudgment garnishment of wages without notice and a prior hearing because they are “essential” to everyday life.

Compare: If “exigent” circumstances exist such as where the defendant is about to fraudulently transfer or remove the property in question, notice and a prior hearing may not be required.

KEY POINTS: Service may be made by personal delivery (left anywhere near the defendant), following state law, leaving the “summons and complaint” at the defendant’s usual place of abode with aperson of suitable age (the person does not have to be an adult), or authorized agent. – A “corporation” may be served thru an officer or managing agent. – A defendant can “waive” service and get 60 days to answer instead of 21 or be liable for expenses. – Federal courts grant immunity from service for parties, witnesses, and attorneys. – The plaintiff may not fraudulently induce the defendant to enter the forum state. – Due process is satisfied if the method used to notify the defendant is “reasonable” under the circumstances.

D. Venue, Forum Non Conveniens, and Transfer

Venue (The Place of Trial)

Venue deals with where the action may be brought. Venue is proper in:

(1) a judicial district in which any defendant resides, if all defendants “reside” in the same state; or

(2) a judicial district in which a substantial part of the events occurred.


(3) If neither of the above provisions apply, then venue is proper in any district in which anydefendant is subject to personal jurisdiction. This fallback provision will only apply when there is no other district in which the action may be brought. 28 U.S. Code § 1391

For venue purposes, a corporation is deemed to “reside” in any judicial district in which it is subject to personal jurisdiction at the time the suit is filed. A person’s residence is her domicile – the place where the person lives with the intent to remain. This is probably the most important aspect of determining whether venue is proper in a given case.

MBE TIP: Venue’s fallback provision is unlikely to apply since it can only come into play when there are multiple defendants who live in different states and when a substantial part of the events took place outside of the United States.

Unlike subject matter jurisdiction, venue may be waived by the parties. In fact, parties can stipulate to an otherwise improper venue. Generally, parties select venue by including a forum selection clause in their contract. Such clauses are usually enforced.

For example, a forum selection clause in a cruise line ticket is enforceable because it is an efficient tool for determining the location of litigation in the event of an accident and it avoids litigation in multiple forums. Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991).

An objection to venue must be asserted by pre-answer motion or in the answer itself or otherwise it will be waived.

Transfer – Where Original Venue is Proper

Even when venue is proper, a court may transfer a case to any other district where it might have been brought or to any district to which all parties have consented. The rationale for instituting a changeof venue is for the convenience of the parties and witnesses. 28 U.S. Code § 1404

The phrase “where it might have been brought” means venue must be proper in the transferee court and the court must have personal jurisdiction over all defendants.

But if all parties consent to a transfer, venue does not have to be proper in the transferee court. Thus, a case may be transferred to a district where venue would not have been proper originally or to a district that does not have personal jurisdiction over the defendant, if all parties consent.

A change of venue, however, is only possible if the court determines it to be for the convenience of the parties and witnesses, and it is in the interest of justice to do so.

Convenience Factors

Ordinarily, the plaintiff’s choice of forum should be respected and will be given considerable weight. Thus, the convenience factors must weigh strongly towards another forum. Before transferring a case, the court will consider: (i) the location of the witnesses; (ii) where the events occurred; (iii) access to evidence; (iv) convenience of the parties; (v) the jury’s ability to view the premises; and (vi) the local interest in the dispute.

MBE TIP: When a question asks about change of venue, consider whether venue is proper in both the original court and the proposed court, and don’t forget, all defendants must be subject to “personal jurisdiction” in the new forum. Those issues are likely to surface in your analysis of venue. But keep in mind, those rules do not apply if all parties have consented to a transfer.


Interestingly, both parties may seek a change of venue.

Forum Non Conveniens

Federal courts do not have the power to transfer cases to the courts of foreign countries. Federal courts can transfer cases only to other federal courts. Therefore, the doctrine of forum non conveniens permits a federal court to dismiss a case in favor of a more convenient forum in a foreign jurisdiction.

“Dismissal” on the basis of forum non conveniens requires proper venue originally and an alternative forum in a foreign country in which the suit can be brought, i.e., subject matter jurisdiction must be satisfied, jurisdiction over all parties can be secured, and complete relief can be obtained in the more “convenient” court.

For example, in a wrongful-death case arising out of a plane crash in Scotland, a Scottish plaintiff sued the manufacturer of the plane, a Pennsylvania corporation. The suit was properly brought instate court and removed and transferred to federal court in Pennsylvania. – In this case, the action was dismissed on forum non conveniens grounds because Scotland was the more appropriate forum. The witnesses were there, the crash occurred there, and even though the law of Scotland is not as favorable to the plaintiff as the law where the action was filed, there is no danger the plaintiff will be deprived of any remedy. Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981). * This concept was just tested.

Where Venue is Improper

When a case is filed in the wrong venue, the district court may dismiss it or, in the interest of justice, transfer the case to any district in which it could have been brought. 28 U.S. Code § 1406. Thus, a case can be transferred to a federal district court that has personal jurisdiction over the defendant and to a place where venue would have been proper initially._____________________________________________________________________________________

Forum Non Conveniens even though venue is proper, a court may dismiss the(Dismissal) action if there is a more convenient foreign jurisdiction

Original Venue Proper even though venue is proper, a court may transfer to any(Transfer) other district where it might have been brought or to

any district to which all parties consent

Original Venue Improper when venue is improper, a court may dismiss or transfer

(Dismiss or Transfer) in the interest of justice___________________________________________________________________________________

Applicable Law on Transfer

If venue was originally proper, the transferee court (the new court) must apply the law of the transferor court (the original court) including any choice of law provisions. The rationale is a “change of venue” should be a change of courtrooms, not a change in law.

But if venue was improper to begin with, the transferee court (the new court) will apply its own laws.


KEY POINTS: Venue is proper where a “substantial part” of the events occurred or where any defendant “resides” if they all reside in the same state. A corporation “resides” where it is subject to personal jurisdiction; a person resides where she lives with the intent to remain. – When venue is proper,it may be transferred to a court where it might have been brought. This means venue and personal jurisdiction must be satisfied. The transferee court must apply the law of the transferor court (original court) and the transfer must be done for the convenience of the parties and witnesses. – Under the doctrine of forum non conveniens, a court may dismiss the case if there is a more convenient foreign jurisdiction. – When venue is originally improper, the court may dismiss or transfer in the interest of justice. If it is transferred, the transferee court will apply its own laws.____________________________________________________________________________________

DIFFERENCES BETWEEN PERSONAL JURISDICTION,SUBJECT MATTER JURISDICTION, AND VENUE

Personal jurisdiction denotes the court’s power over the defendant.

Subject matter jurisdiction relates to the court’s ability to hear the case.

Venue refers to the proper geographic location to bring suit.

Remember all three are needed in order to have a case heard in “federal” court._____________________________________________________________________________________


II. LAW APPLIED BY FEDERAL COURTS

A. State Law in Federal Court

Erie Doctrine (What Law Applies)

In “diversity” actions, federal courts are required to apply federal procedure law and the substantive law of the state in which it sits. Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938). The rationale behind Erie is the outcome of the litigation in federal court should be substantially the same as if the case were tried in state court.

If there is a federal “procedural” rule on point, a federal court must follow it even if it conflicts with state law. A rule is procedural if it regulates the process for enforcing rights.

For example, a plaintiff suffered personal injuries in an automobile accident and sued the defendant in federal court under diversity jurisdiction. The plaintiff served the defendant by leaving a copy of the complaint at his home in compliance with Rule 4 of the Federal Rules of Civil Procedure. However, state law requires service to be made personally on the defendant. – In this case, the court held service of process was proper because there is a valid federal procedural rule on point. Hanna v. Plumer,380 U.S. 460 (1965).

If there is no federal rule on point, determine whether the law is substantive or procedural. If the law is “arguably procedural” apply federal law. If the law affects substantive rights, the court must follow state law.

Courts use a variety of tests to determine whether a law is substantive or procedural: (i) an issue is substantive if it “significantly affects” the outcome of the case – this is known as the outcome determinative test; (ii) the balancing of interests test in which the court weighs both the federal and state interests in having its rule applied; and (iii) whether application of state law would deter forum shopping.

MBE TIP: The tests above are very subjective and can lead to contradictory results by reasonable people.Therefore, because the MBE’s are objective, expect to see a question that deals with issues that are firmly established. The examples directly below will be your guide.

The Supreme Court has found that the following rules regulate procedure: methods for service ofprocess, requiring litigants whose mental or physical condition is in dispute to submit to examinations, theright to a jury trial, change of venue, a rule requiring the trial court to consider whether to grant a new trial, and class action certification.

In each of these examples, the rules regulate only the process for enforcing rights. They do not alter the parties’ substantive rights.

The statute of limitations, rules for tolling the statute of limitations, choice of law rules, and theelements of a cause of action are substantive. This means in a “diversity” action in federal court, the federal court must apply the state’s statute of limitations, the state’s choice of law rules, and the elements of the cause of action as provided by state law. Furthermore, in diversity cases, state law determines whether a privilege exists and the “standard” for granting a new trial.

MBE TIP: Remember, the Erie analysis will only apply in “diversity” actions.


State Law Substantive Statute of Limitations, Rules for Tolling the Statute ofLimitations, Choice of Law Rules, Elements of a Cause ofAction, the Burden of Persuasion, Whether a Privilege Exists,the Standard for Granting a New Trial

Federal Procedural Service of Process, Right to a Jury Trial, Change of Venue,Class Action Certification, the Authority to Order a Party to Submit to a Physical or Mental Exam, a Rule that Gives the TrialCourt (not the Appellate Court) the Power to Order a New Trial, a Rule that Gives the Appellate Court “Discretion” to Award Damages for a Frivolous Appeal

Ascertaining the Meaning of State Law

Under Erie, federal courts are required to apply state law in the same fashion as it would be adjudicated by the state’s highest court. However, when the state law is uncertain, the court should attempt to determine what the state’s highest court would do. Federal judges are given great freedom in making this determination.

For example, federal courts have refused to follow state supreme court precedent when they are convinced the state’s supreme court would overrule it, e.g., thirty-year-old precedent had been discreditedby other jurisdictions; new laws enacted by the state legislature overturned prior supreme court precedent.

When the highest court of the state has not spoken on an issue, federal courts may consider a wide range of legal sources. For example, a judge may consider appellate court decisions, dicta by the state’s highest court, decisions of lower state courts, scholarly treatises, law review articles, or even trendsin the law when trying to glean how the highest court of the state would rule.

Intervening State Court Ruling

When a case is on appeal, the federal appellate court must apply any new decision handed down by the state’s supreme court during that time. This rule makes sense because it places federal courts in thesame position as state appellate courts.

For example, a plaintiff brought a diversity action against a glass company alleging that, as an employee of the company, she had contracted various diseases through the company’s negligence. The glass company filed a motion to dismiss on the ground that the plaintiff failed to state a cause of action because under state law, no recovery was permitted. The trial court properly dismissed the case. Before the time for appeal had expired, the state’s supreme court reversed its former decisions and declared claims such as those alleged by the plaintiff are compensable under state law. – On appeal, the federal appellate court must conform its ruling to the new decision of the state supreme court. Vandenbark v. Owens-Illinois Glass Co., 311 U.S. 538 (1941).

MBE TIP: Federal judges have significant freedom in trying to determine the meaning of state law.


B. Federal Common Law

Federal Common Law (Judge Made Law)

At times, a federal judge might be called upon to decide an issue that cannot be answered from a federal statute. When a federal judge fills in gaps of a federal law, he is making federal common law. Federal common law has generally been applied to interstate water disputes, maritime and admiralty questions, and whether a plaintiff has an implied cause of action under a federal statute.

Federal common law is judge made law and is valid until Congress overrides it by legislation.

KEY POINTS: In “diversity” actions, federal courts are required to apply federal procedure law and the substantive law of the state in which it sits. If there is a federal “procedural” rule on point, a federal court must follow it even if it conflicts with state law. A rule is “procedural” if it regulates the process for enforcing rights, e.g., service of process, submitting to mental or physical exams, the right to ajury trial, changes of venue, and class action certification. – State “substantive” laws include: the statute of limitations, rules for tolling the statute of limitations, choice of law rules, the elements of a cause of action or defense, whether a privilege exists, and the “standard” for granting a new trial. – Federal judges are given great freedom in ascertaining the meaning of state law and may resort to a wide-range of legal sources when trying to decide how the state’s highest court would rule. – Federal common law is when a federal judge fills in the gaps of a “federal statute” in order to decide a case.


III. PRETRIAL PROCEDURES

A. Preliminary Injunctions and Temporary Restraining Orders

Temporary Restraining Orders (Issued Without Notice)

When there is an “immediate” need for relief, a court may issue a temporary restraining order without notice only if: (a) specific facts in an affidavit or a verified complaint clearly show that immediate and irreparable injury will result before the defendant can be heard; and (b) the plaintiff’s attorney certifies any efforts made to give notice and the reasons why it should not be required. FRCP 65(b)

In view of the possibly drastic consequence of a temporary restraining order, the defendant should be heard, if feasible, before the order is granted. Informal notice, which may be communicated to the defendant’s attorney, is preferred to no notice at all. Thus, a temporary restraining order may be issued without any notice only when the circumstances warrant.

Preliminary Injunctions (Notice Required)

A preliminary injunction is sought prior to trial for the purpose of protecting the plaintiff from irreparable harm during the action. It is intended to preserve the status quo. A court may issue a preliminary injunction only on notice to the adverse party. FRCP 65(a)

The decision to grant a motion for a temporary restraining order or preliminary injunction lies in the discretion of the court.

Security

The court may issue a preliminary injunction or a temporary restraining order only if the party requesting the order gives security in an amount the court considers proper to pay the costs and damages sustained by a person who has been wrongfully enjoined or restrained.

Persons Bound

Temporary restraining orders and preliminary injunctions not only bind the defendant, but the defendant’s agents and those who are in active concert with the defendant. However, a person can only be bound if that person receives notice of the order. A person who violates the order will be found in contempt.

Temporary Restraining Order Can be issued without notice

Preliminary Injunction Notice required

The main difference between a preliminary injunction and a temporary restraining order is a preliminary injunction remains in effect until the conclusion of a full trial on the merits and can only be issued after an adversarial hearing is held where both parties are present. – A TRO, on the other hand, is an emergency order that only lasts for 14 days or until some type of adversarial hearing can be held and may be issued without notice. (See One-Timers Remedies Outline for a full discussion of both issues).

KEY POINTS: A temporary restraining order may be issued without notice if: (a) an affidavit or verified (sworn) complaint states facts that clearly show immediate and irreparable injury will result


before the defendant can be heard; and (b) the party’s attorney certifies any efforts made to give notice and the reasons why it should not be required. A temporary restraining order lasts for 14 days. – In contrast, a preliminary injunction requires notice and lasts until the case is decided on the merits. – With either order, the plaintiff must post a bond and both orders are discretionary by the court. – A person can only be bound if that person receives notice of the order after it is issued.

B. Pleadings and Amended and Supplemental Pleadings

Overview of the Pleadings Process in Federal Court

It can be a bit confusing trying to figure out the timeline of events in a lawsuit. Here is a step-by-step guide through the pleadings process.

(1) To initiate a lawsuit, the plaintiff files a complaint with the district court.(2) Next, the plaintiff serves the defendant with a summons and a copy of the complaint.(3) Before filing an answer, the defendant may file a pre-answer motion attacking the

complaint.(4) Thereafter, the defendant files an answer to the complaint.(5) Additionally, the defendant may assert a counterclaim against the plaintiff.(6) If the defendant does file a counterclaim, the plaintiff must file a reply.(7) After this back and forth process is complete, the parties begin discovery.

In federal court, pleadings are designed to give the other party notice of the claims being asserted.For the most part, the pleadings include: the complaint, the answer to the complaint, and the reply. All pleadings must be construed so as to do justice.

The Complaint

The complaint is the document that initiates a lawsuit. It sets forth the plaintiff’s claim. The complaint must contain: (1) a short and plain statement of the grounds for the court’s jurisdiction, e.g., diversity or federal question jurisdiction; (2) a short and plain statement of the claim showing the pleader is entitled to relief, e.g., the facts must “plausibly” infer that the defendant is liable; and (3) the relief sought, e.g., money damages, specific performance, attorney’s fees. FRCP 8(a)

The New “Plausibility” Standard

In order to survive a motion to dismiss for failure to state a claim upon which relief can be granted, the complaint must contain enough facts to show a claim for relief is plausible. A claim has “plausibility” when the factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.

Legal conclusions must be supported by factual allegations. The court will not accept conclusory statements. In short, the court must be able to plausibly infer, from the facts stated in the complaint, that the defendant is liable for the plaintiff’s harm.

For example, a class of plaintiffs sued several phone companies claiming violations of anti-trust laws. The complaint alleged the defendants agreed not to compete with each other and sought to exclude potential competitors by allowing each company to monopolize its own market. The basis of the allegations was the defendants did not pursue attractive business opportunities in other markets. – In this case, the court held the complaint did not contain enough factual matter to suggest that an agreement was made. The court found the companies’ conduct is just as much in line with a conspiracy as it is with awide range of competitive business strategies unilaterally prompted by common perceptions of the


market. Thus, without factual allegations underlying an inference that the defendants’ behavior was collusive, the plaintiffs fell short of offering allegations that made their theory a plausible one. Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).

The importance of this case is the court made it clear that a complaint must contain facts that “plausibly suggest” unlawful conduct with sufficient detail. Because the plaintiffs’ complaint did not state any direct evidence of collusion, and because there is another “equally plausible” explanation for theapparent lack of competition that was entirely innocent, the complaint must be dismissed.

Keep in mind, the plaintiff will almost always have the opportunity to amend the complaint. Amending the complaint is discussed a little further below.

For example, following the September 11th terrorist attacks, Iqbal, a Pakistani Muslim, was arrested on fraud charges and housed in a maximum security prison under allegedly harsh conditions. Iqbal filed a complaint against the Attorney General and the Director of the FBI. The complaint alleged the defendants adopted policies subjecting Muslims to harsh conditions solely for the purpose of discriminating against them on the basis of religion, race and national origin. The defendants filed a motion to dismiss for failure to state a claim upon which relief can be granted. – In this case, the court held that Iqbal’s complaint failed to plead sufficient facts to state a claim for “purposeful” discrimination. The court regarded the allegations in the complaint as conclusory since there was no direct evidence of discriminatory intent. Given that the September 11 attacks were perpetrated by Arab Muslims, a more likely explanation for the detentions was because of their suspected link to the attacks aspart of a terrorism investigation, rather than because of discriminatory hatred. The factual allegations in the complaint do not plausibly suggest the defendants purposefully discriminated on prohibited grounds. Therefore, the claim must be dismissed because Iqbal failed to plead sufficient factual matter to show the defendants adopted the detention policies for the purpose of discriminating on account of race, religion, ornational origin. Ashcroft v. Iqbal, 556 U.S. 662 (2009).

Interesting note for all you football fans – the Director of the FBI in the fact pattern above, Robert Mueller, is the “independent” investigator assigned to examine the NFL’s handling of the Ray Rice case.

MBE TIP: The “plausibility” standard is most likely to apply in complex cases where the defendant has control over most of the facts underlying the case or when the case turns on the knowledge of the defendant since it will be difficult for the plaintiff to allege unlawful intent or purpose without being able to proceed to discovery.

The Relief Sought

If the case is litigated, the court will grant the plaintiff the appropriate type of relief even if the plaintiff did not demand that type of relief in the complaint. FRCP 54(c)

For example, after trial, the court can issue an injunction against the defendant even if the plaintiff only requested damages.

Compare: If the defendant defaults, the plaintiff cannot obtain a different type of relief than whatis demanded in the complaint, nor can a default judgment exceed the amount demanded in the complaint.

Pre-Answer Motion

A defendant may raise certain preliminary objections to suit. Pre-answer motions challenge the “legal” sufficiency of the complaint. They are designed to flush out preliminary problems and resolve


them before getting into the substantive merits of the suit. They are an alternative to answering the complaint. Pre-answer motions are entirely optional and each may be raised in the answer instead.

Before filing an answer, the defendant may file a motion raising the following legal defenses: lack of personal jurisdiction; improper venue; and insufficient service of process. These defenses must be raised in either a pre-answer motion or in the answer, whichever is first. The rationale is the defendantshould be aware of these defenses when the complaint is served and a pre-answer motion can shortcut the litigation process in cases where the defendant has a valid defense.

Additionally, the defendant may assert the complaint fails to state a claim upon which relief can be granted or fails to join a necessary party. These defenses may be raised at any time up to and during trial. The rationale is because these objections are too important to be subject to the rigid early waiver requirements. Furthermore, it may be difficult to determine whether a complaint fails to state a claim or fails to join a necessary party at the outset, e.g., in a complex products liability action or toxic tort case. FRCP 12(b)

For example, in 2015, a plaintiff filed a breach of contract action in federal court under diversity jurisdiction. The relevant state law statute of limitations for breach is four years. The complaint alleged the defendant breached a written service contract in 2010. – In this example, the defendant should file a motion to dismiss for failure to state a valid claim. Taking every allegation in the plaintiff’s complaint astrue, the plaintiff is not entitled to relief because the claim is time-barred.

Finally, the defendant may contest subject matter jurisdiction at any time, even on appeal.

MBE TIP: The important thing to remember is the defendant’s failure to raise personal jurisdiction, improper venue, or insufficient service of process, at the earliest possible time, waives these defenses.

For example, if the defendant raises insufficient service of process by motion, he will not be allowed to assert lack of personal jurisdiction in another pre-answer motion or in the answer since these defenses must be raised at the same time. This rule prevents the defendant from wasting time and money with piecemeal motions.

Motion for a More Definite Statement

If the complaint is so vague or ambiguous that the defendant cannot reasonably prepare a response, the defendant may move for a more definite statement. The motion must be made before filing an answer and the motion must point out the defects in the complaint. FRCP 12(e)

Motion to Strike

Any party may move to strike an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter. The basic purpose of a motion to strike is to eliminate from the public record unfairattacks against a party. Thus, these motions are most likely to be granted when the pleading is available tothe public and is likely to prejudice a party. FRCP 12(f)

For example, describing a car as a “death trap” or calling the defendant a “strong-arm racketeer” or stating the trial court was a “kangaroo court” are examples of prejudice.

Furthermore, a motion to strike can be used to attack part of the complaint or an insufficient defense, e.g., a motion to strike is proper when the plaintiff requests punitive damages for breach of contract; or when the defendant asserts the statute of frauds as a defense but the contract is in writing.


MBE TIP: A motion to strike is the proper motion when attacking the legal sufficiency of a defense.

Result of Presenting Matters Outside the Pleadings

When evidentiary materials are presented on a motion to dismiss, the motion must be treated as one for summary judgment and both parties must be given a reasonable opportunity to present materials in response to the motion. The reason is a motion to dismiss is limited to the “face” of the pleading.

For example, a defendant filed a motion to dismiss and included an affidavit and other evidentiary materials in support of his motion. – In this case, the court must treat the motion as a motion for summary judgment. FRCP 12(d) * This concept was just tested.

The Answer

The defendant must file an answer to the complaint within 21 days after being served or within 60days if the defendant has “waived” service of process. This rule assumes no pre-answer motion was made.

Affirmative Defenses

The answer must state any affirmative defenses the defendant may have such as: assumption of risk, contributory negligence, duress, fraud, laches, res judicata, the statute of frauds, the statute of limitations, and several others. FRCP 8(b)

MBE TIP: The best way to understand whether an issue is an affirmative defense is to ask, “Is the issue part of the plaintiff’s prima facie case?” If the issue is an element of the claim, it must be pleaded by the plaintiff. If the issue is not an element of the plaintiff’s claim, then the defendant has the burden of pleading it as an affirmative defense.

For example, a prisoner brought a civil rights claim against several prison officials. The prisoner is required to exhaust all administrative remedies before the claim can be brought in federal court. However, the elements of the claim do not require exhaustion at all. Therefore, it is an affirmative defense that must be specifically pleaded by the defendant. Jones v. Bock, 549 U.S. 199 (2007).

Admissions and Denials

The answer must admit or deny the allegations asserted in the complaint so the court can determine what matters are in controversy. This can be done in a few ways.

A general denial is a “good faith” denial of all the allegations in the complaint. A defendant should only deny those matters he plans to contest or face the possibility of sanctions. A specific denial admits certain allegations and denies the rest.

For example, the defendant should admit the plaintiff was an employee, but deny she was discriminated against because of her sex.

The defendant may also state that he lacks sufficient knowledge to form a belief about the truth of an allegation – this has the effect of a denial. Of course, the defendant may not state he lacks sufficient knowledge of events he witnessed or matters of public record.

Failure to deny an allegation (other than the amount of damages) is deemed admitted.


MBE TIP: All pleadings must be filed in good faith. If you see a fact pattern where it is obvious a party is acting in bad faith or trying to mislead the other party, it would be wise to find against that party.

Compulsory Counterclaims

The answer must state any compulsory counterclaim the defendant has against the plaintiff or it will be barred. A compulsory counterclaim is a claim that arises out of the same transaction or occurrence that is the subject of the plaintiff’s claim. FRCP 13(a)

The Reply

The plaintiff must file a reply within 21 days if the defendant’s answer contains a counterclaim. The reason is the plaintiff is now in the position of a defendant. Thus, a reply is the plaintiff’s answer to the defendant’s counterclaim. FRCP 12(a)(1)(B)

Pleading Special Matters

When pleading fraud or mistake, special damages, or denying that a condition precedent has occurred, the plaintiff must state with “particularity” the circumstances surrounding the claim. The failureto plead a special matter means it cannot be raised at trial. Keep in mind this defect may be cured by an amendment at trial if no prejudice is involved. FRCP 9

For example, in a claim for damages arising from a car accident, the plaintiff fails to plead loss offuture earnings. Because “special damages” must be specifically set out in detail in the complaint, the plaintiff cannot recover these damages at trial.

The rationale for special pleadings is to discourage certain types of disfavored litigation. Fraud suits are disfavored because of the injury they may do to reputations. Claims of mistake are also disfavored because they upset the normal business expectations underlying contract law. Similarly, items of special damages (medical expenses and loss of income) must be specifically stated because they are not a normal consequence of a claim. Thus, it is important the defendant be made aware of what is being claimed.

Pleading in the Alternative

Either party may assert alternative or inconsistent claims or defenses so long as they are filed in good faith. FRCP 8(d)

For example, in a breach of contract case, the defendant may assert there was no contract, but if there was a contract, it was not breached.

Amended Pleadings

During the early parts of an action, the parties’ understanding of the case will be incomplete. After getting into the details of the case, the parties might discover additional facts that may change their original position. This section addresses changes or amendments to a pleading.

Amendments can occur at any stage of the litigation. Since most disputed issues become clearer as the lawsuit progresses, amendments to pleadings are encouraged and permission is “liberally granted” but should not be allowed if it will cause undue prejudice to the other party.

Amendment as a Matter of Right (Without Permission of the Court)


The plaintiff may amend her complaint once, as a matter of right (without permission of the court), within 21 days after the defendant serves an answer or pre-answer motion, whichever is earlier.

For example, a plaintiff filed a complaint and properly served it on the defendant. On March 1, the defendant filed and served a pre-answer motion contesting personal jurisdiction and improper venue. The court denied the motion. On March 10, the defendant served his answer. – In this case, the plaintiff may amend her complaint, as a matter of right, within 21 days of March 1, not March 10.

Furthermore, the defendant may amend his answer once, as a matter of right, within 21 days after serving it on the plaintiff. The same holds true for a reply. FRCP 15(a)

Amendment by Consent or Leave of the Court (When Justice So Requires)

In all other cases, an amendment may be made only with the opposing party’s written consent or by leave of the court. The court should freely give leave to amend when justice so requires. This is a very liberal standard. A party should not be barred from proving a claim or defense simply because she had not pleaded it on the first day of the lawsuit. Cases should be tried on their merits, rather than procedural technicalities.

MBE TIP: There is a strong policy in favor of allowing amendments unless the opposing party can show that “undue prejudice” will result. Absent a showing of prejudice, grant the party the right to amend.

For example, the court should allow the plaintiff to amend her complaint even after granting the defendant’s motion to dismiss provided the plaintiff can “plausibly” state a valid claim.

The categories of injustice include undue delay, bad faith, repeated failure to cure defects, undue prejudice to the opposing party, or futility of the amendment (amendment cannot cure the problem).

Compare: The following are examples of when the court will deny an amendment: where the plaintiff sought to add claims “a month before” trial that would have required joinder of additional parties, complicated the action even further, and delayed trial by having to reopen discovery; where the amendment failed to state a claim upon which relief can be granted by adding a cause of action against a government official who was immune to suit; where a party has acted in “bad faith” by waiting to add a known claim until evidence was lost or destroyed.

Amendments During and After Trial

If a party objects at trial that evidence is not within the issues raised in the pleadings, the court may permit the pleadings to be amended. The court should freely permit an amendment when doing so will aid in presenting the merits and the objecting party fails to show that any prejudice would result.

When an issue not raised by the pleadings is tried by the parties’ express or implied consent, it must be treated as if raised in the pleadings. Consent generally is found when evidence is introduced without objection or when the party opposing the motion to amend took action to contest the unpleaded issue.

A party may move—at any time, even after judgment—to amend the pleadings to conform them to the evidence and to raise an unpleaded issue. The reason is when the parties actually litigate an issue, they act as if the issue had been included in the pleadings.


MBE TIP: The important part of this rule is “implied” consent is found where the unpleaded issue is actually litigated. But implied consent may not be found when the evidence is relevant to both a pleaded and unpleaded issue.

For example, a plaintiff sued a defendant in federal court for injuries sustained in a car accident. The defendant’s answer denied he was negligent but failed to plead contributory negligence as an affirmative defense. During discovery, the defendant ordered a copy of the plaintiff’s toxicology report and presented it to her. Additionally, the defendant questioned the plaintiff about whether she was intoxicated at the time of the accident. At trial, the defendant vigorously cross-examined the plaintiff about what she had to drink immediately before the accident. – In this example, the court should allow thedefendant to amend his answer to include contributory negligence as an affirmative defense because the plaintiff was put on notice the issue was being asserted as a defense and it was tried with the parties’ implied consent. In short, the issue was put forth and disputed.

The judge may allow either party to amend a pleading, even after judgment, to conform it to the evidence at trial so long as the adverse party has not been misled and is not prejudiced by the amendment.

For example, an amendment will be denied if the opposing party had no opportunity to prepare for the issue being added and undue prejudice will result or when the unpleaded issue is also applicable to a pleaded issue thereby negating implied consent.

Generally, the earlier the amendment, the less likely it will be prejudicial to the opposing party, but as the case gets closer to trial, the argument for denial becomes much stronger.

MBE TIP: The focus of the rules for amending pleadings is on the possible prejudice to the opposing party. Thus, an amendment should be allowed unless “undue prejudice” is shown.

Relation Back of Amendments – Adding a New Claim

When the complaint is timely filed but an amendment adding a new cause of action is made after the statute of limitations has passed, the amendment “relates back” to the date the complaint was originally filed if the new claim arises out of the same transaction or occurrence. This means the new cause of action must involve the same incident and be based on the same general facts as those in the original complaint.

The purpose of the statute of limitations is to give the defendant notice, within a certain period oftime, the plaintiff has brought an action against him arising out of a specific incident. If the defendant has notice of the action within the limitations period, it is not unfair to allow the plaintiff to add a cause of action based on the same underlying facts.

For example, a woman learned that a chemical plant may have been illegally releasing toxic chemicals into the air near her home. The woman timely filed a cause of action for negligence against the plant seeking damages for a persistent cough. A few months later, the woman learned from a scientific report in a newspaper the chemicals the plant released cause lung cancer. After the statute of limitations had run, the woman sought leave to amend her complaint to add a cause of action for strict liability and sought to require the chemical plant to pay for preventive medical monitoring of her lungs. – In this example, the court should allow the woman to amend her complaint because the new cause of action is based on the same facts as her original claim. The chemical plant will not be prejudiced by adding the new cause of action or the additional request for relief because it had notice, within the limitations period,that the woman was asserting some claim based on the same event. Therefore, the amendment adding the new cause of action relates back to the date the complaint was originally filed.


Compare: A claim that is completely new and unrelated to those in the original complaint is timebarred if the amendment is sought after the statute of limitations has run.

“Relation back” of amendments is intimately connected with the statute of limitations. Therefore,when the examiners test relation back of amendments, they will have to mention the relevant limitations period, which is governed by state law in diversity actions.

In a diversity case, an amendment adding a new claim or changing the defendant “relates back” ifpermitted by the state’s statute of limitations. In other words, if state law permits an amendment to relate back in its statute of limitations, even if it is more favorable, it is valid in federal court.

Relation Back of Amendments – Adding a New Defendant

An amendment changing the defendant relates back to the date the complaint was originally filed if: (1) the claim arises out of the same transaction or occurrence; (2) the new defendant received notice of the action and will not be prejudiced in defending on the merits; and (3) the new defendant knew or should have known that, but for a “mistake” concerning identity, the action would have been brought against him. FRCP 15(c) * This concept was just tested.

The rationale behind this rule is to prevent defendants from taking unfair advantage of trivial pleading errors to sustain a limitations defense.

The new defendant (the one brought in by the amendment) must have had notice of the action within 120 days after the complaint was filed. Notice may come from any source. It need not be formal.

An amendment adding a new defendant after the statute of limitations has run is frequently granted to correct a misnomer – a reasonable mistake in the name of the defendant intended to be sued.

For example, amendment to change name from “Pennsylvania Greyhound Lines, Inc.” to “The Greyhound Corporation” and “Southern Railway Systems” to “Southern Railway Company”.

MBE TIP: An amendment changing the defendant or the name of the defendant is most likely to occur when the new defendant is a related entity of the original defendant such as where the plaintiff uses the defendant’s trade name instead of its corporate name or when the plaintiff names the subsidiary corporation instead of the parent. These are classic examples of mistakes in identity.

The important things to remember here are notice, prejudice, and mistake in identity.

For example, a citizen was unlawfully assaulted by a police officer during a routine traffic stop. A second officer arrived at the scene but did not take part in the beating. The citizen timely filed a civil rights action in federal court mistakenly naming the second officer in the complaint. A month later, the second officer informed the officer, who had committed the assault, about the lawsuit. During discovery and after the statute of limitations had passed, the citizen learned he had named the wrong officer in the complaint. – In this example, the court should allow the citizen to amend his complaint to change the name of the defendant. The officer who committed the assault received notice of the action from the second officer within 120 days after the complaint was filed. No prejudice will result and the officer should have known the citizen “mistakenly” named the second officer in the complaint.

Keep in mind, an amendment cannot avoid the statute of limitations with respect to a “totally new” party. The fact the plaintiff filed an action against one defendant does not toll the statute of limitations with respect to other defendants. The relation back provision was directed at situations in which the plaintiff simply uses the wrong name for the defendant. * This concept was just tested.


Compare: A patient filed a negligence claim against a doctor for using a certain type of metal rod during surgery. Shortly after the statute of limitations had run, the patient learned the manufacturer of the rod had been sued by several patients who suffered severe back pain after the rod was inserted into their spines during surgery. The patient sought leave to amend to join a claim against the manufacturer, alleging it had negligently designed the rod. The manufacturer filed a motion to dismiss the new claim on the ground that the statute of limitations had run. – In this case, the patient did not make a mistake as to the name or identity of the defendant. The patient is attempting to add a totally new party to the suit. Therefore, the “relation back” doctrine will not apply. Amending a complaint to add a new defendant after the statute has run is only allowed in very limited circumstances. The manufacturer’s motion to dismiss should be granted.

Compare: If the statute of limitations has not run, the patient could certainly file a separate action against the manufacturer or even ask the court for permission to add the manufacturer to the current case if the doctor is not “prejudiced” by the addition.

MBE TIP: The purpose of the statute of limitations is to give a party notice of the action within a certain period of time. The important things to remember about adding a new defendant after the statute of limitations has run is the new defendant must have somehow received “notice” of the pending suit within 120 days after the complaint is filed and the new defendant should have known there was a “mistake” as to name or identity.

Supplemental Pleadings

Supplemental pleadings are used to add new claims or defenses that have occurred after the filing of the complaint. FRCP 15(d)

For example, a tenant filed suit against her landlord for breach of the implied warranty of habitability. Several weeks after filing the complaint, the landlord evicted the tenant. – In this example, the tenant would file a motion to “supplement” her complaint to add a cause of action for retaliation.

Amendments deal with events that occurred before the plaintiff filed the complaint; whereas supplemental pleadings deal with events that happened after the filing of the complaint.

Statute of Limitations

A plaintiff must file her complaint within the statute of limitations period or risk losing the claim.In most cases, the statute of limitations begins to run in a tort action at the time of the injury and in a contracts case at the time of the breach.

For some torts, however, the cause of action accrues at a time when the plaintiff should have discovered her injury. This mainly occurs in medical malpractice cases.

For example, a doctor left a sponge inside a patient during surgery. The patient frequently suffered stomach pains over the next couple of years until another doctor properly diagnosed her pain. – In this case, the statute of limitations for the patient’s malpractice claim began to run when she was properly diagnosed.

Keep in mind state statutes of limitations are regarded as substantive for Erie purposes, and therefore state law controls in federal diversity actions.


As a final matter, trial courts have the discretion to dismiss a case on limitations grounds on theirown, even where the defendant failed to raise it as an affirmative defense. Day v. McDonough, 547 U.S. 198 (2006).

KEY POINTS: A complaint must contain enough facts to “plausibly” infer the defendant is liable.– Failure to raise personal jurisdiction, improper venue, or insufficient service of process, at the earliest possible time, waives these defenses. – If the complaint is vague, the defendant may move for a more definite statement before filing an answer. – A motion to strike is used to eliminate any prejudicial matter that may end up in the public record or to strike an insufficient defense.

The defendant must file an answer within 21 days after being served. The answer must contain any affirmative defenses, must admit or deny the allegations in the complaint, and may state that the defendant lacks sufficient knowledge about an allegation. Furthermore, the answer must state any compulsory counterclaims or they will be barred. If the answer contains a counterclaim, the plaintiff must file a reply within 21 days.

Special matters such as fraud, mistake, special damages, or the denial of a condition precedent must be specifically set out in detail in the complaint. – Either party may assert alternative claims or defenses.

Amendments can occur at any stage of the litigation and should be freely granted unless the other party can show undue prejudice. The plaintiff may amend her complaint once, as a matter of right, within 21 days after the defendant serves an answer or pre-answer motion, whichever is earlier. Similarly, the defendant may amend his answer once, as a matter of right, within 21 days after serving it on the plaintiff.In every other case, amendments may be made with the opposing party’s consent or by leave of the court.

An issue not raised by the pleadings may be tried by the parties’ consent. Consent generally is found when the party opposing the motion took action to contest the unpleaded issue. A party may move—at any time, even after judgment—to amend a pleading to conform it to the evidence.

An amendment adding a new cause of action “relates back” to the date the complaint was originally filed if the new claim arises out of the same transaction or occurrence. – An amendment changing the name ofthe defendant relates back if the new defendant received notice of the action within 120 days after the complaint was filed. Such amendments are frequently granted to correct a misnomer but not to add a “totally new” party to the case after the statute of limitations has run. – Supplemental pleadings add new claims or defenses that have occurred after the filing of the complaint.

C. Rule 11

Rule 11

Every paper filed with the court must be signed by the attorney (or the party if unrepresented) to ensure truthful pleadings and deter frivolous litigation.

By presenting a pleading to the court, the attorney certifies to the best of her knowledge and after a reasonable inquiry the paper is not being presented for any improper purpose, such as to harass or cause unnecessary delay; the claims are not frivolous; the factual contentions will likely have evidentiary support; and any denials are warranted. FRCP 11(b). This is an objective standard.

Continuing Duty


Even after signing a pleading, the attorney may not advocate a position that is not supported by the facts or the law. This part of the rule imposes a “continuing duty” on the attorney only to bring forth any claims or defenses in good faith.

21 Day “Safe Harbor” Provision

A motion for sanctions must be made separately from any other motion. Before filing a motion for sanctions with the court, a party must first serve the offending party, and give that party 21 days to correct or withdraw the alleged violation. If corrective action is not taken in that time, only then may the motion be filed with the court.

The Court May Impose Sanctions on Its Own

The court has the power to impose sanctions on its own, but only after issuing an order directing aparty to show why sanctions should not be imposed.

Sanctions are Discretionary

Courts have substantial discretion as to the nature of sanctions imposed, such as striking the offending paper; issuing a reprimand; requiring participation in legal educational programs; or ordering a fine payable to the court. Additionally, the court may award the prevailing party attorney’s fees and the reasonable expenses incurred for the motion. Sanctions must be limited to what suffices to deter repetition of the conduct and may only be imposed after notice and a reasonable opportunity to respond.

Furthermore, law firms are held jointly responsible for a violation committed by one of its employees. Monetary sanctions cannot be imposed on a “represented” party for bringing forth a frivolousclaim since the arguments presented to the court are the responsibility of the attorney.

* This concept was just tested.

KEY POINTS: Rule 11 is designed to deter frivolous litigation. The rule imposes a continuing duty on an attorney to act in good faith. Sanctions are discretionary and may be monetary as well as nonmonetary but must be limited to deter repetition of the conduct. – Before filing a motion for sanctionswith the court, the offending party must be given 21 days to correct or withdraw the violation. – Law firms are jointly liable for employees.

D. Joinder of Parties and Claims (including Class Actions) HOT TOPIC

The concepts in this section are heavily intertwined with the rules for supplemental jurisdiction. The ability to join parties or to join claims is often decided on the basis of supplemental jurisdiction.

The rules stated herein reflect the most basic types of cases and are written to avoid confusion and emulate what the examiners are likely to test on the bar exam.

Real Party in Interest

An action must be brought by the real party in interest. This means the “named plaintiff” must have the legal right to enforce the claim. The rule is designed to protect the defendant against a subsequent action by the party actually entitled to recover. FRCP 17(a)


For example, for good and valuable consideration a retailer assigned to a collection agency its right to collect on a debt. – The collection agency is the real party in interest. The retailer no longer has the right to demand payment of the debt from the debtor. Krispin v. May Dept., 218 F.3d 919 (2000).

The real party in interest need not be the person who ultimately will benefit from the action. Executors, administrators, and trustees have the right to sue as representatives.

For example, a trustee has the right to sue for any harm to the trust estate; an executor may bring claims on behalf of the decedent’s estate; a principal is the real party in interest if the obligations under a contract are owed to the principal alone.

* Capacity and Real Party in Interest appear to be minor issues at best.

Capacity

Capacity to sue or be sued refers to an individual’s ability to represent her interests without the assistance of another. FRCP 17(c). For example, the court will appoint a guardian to represent a minor or an incompetent person.

Incapacity may also be found in dissolved corporations. For example, twenty days after filing its claim, the corporation was suspended under state law for failing to pay its taxes. – The court dismissed the action because the suspension rendered the corporation incompetent. Capacity is not only the power to bring an action, but also the power to maintain it. Mather v. U.S., 475 F.2d 1152 (Ct. Cl. 1973).

Capacity for an individual is determined by the law of the individual’s domicile; capacity for a corporation is determined by the law of the state under which it was incorporated.

Joinder of Claims

It is easier to join claims than it is to join parties. The reason is because the litigants are already before the court and joining claims saves the parties the hassle of multiple lawsuits. The court will try andsettle as many legal issues between the parties at one time as possible. Thus, the rules on joining claims are very liberal.

The Rule Against Claim Splitting

The rule against claim splitting states a plaintiff must join all related claims arising from the sameincident against the defendant in a single action or they will be barred.

For example, a plaintiff cannot bring a claim for personal injuries in one suit and then a claim forproperty damages in another when both claims arise out of the same event and are against the same defendant. In other words, the plaintiff cannot “split” her causes of action.

Subject Matter Jurisdiction is the Main Obstacle

MBE TIP: The major issue with joinder of claims is subject matter jurisdiction. Each claim must have anindependent basis for jurisdiction. Follow this lead, claims that are “related” to the main action will likelyfall under the court’s supplemental jurisdiction. “Unrelated” claims must have an independent basis for jurisdiction. In most fact patterns, unrelated claims will fail to satisfy subject matter jurisdiction.

Compulsory Counterclaims ( vs. )


A counterclaim is a claim by the defendant against the plaintiff. It is compulsory if it arises out of the same transaction or occurrence as the plaintiff’s claim. This means the defendant’s counterclaim must be “logically related” to the plaintiff’s claim. FRCP 13(a)

If the defendant fails to assert a compulsory counterclaim, he will be barred from bringing that claim in any future lawsuit. This is why it is appropriately titled a “compulsory” counterclaim.

For example, a medical clinic sued a patient for unpaid medical bills. The patient did not pay because the doctor negligently performed the operation. – In this case, the patient’s medical malpractice claim is compulsory because it arises out of the events which gave rise to the plaintiff’s claim. If the patient fails to assert the malpractice claim in this case, it can’t be brought in a later suit. The rationale is based on the desire to adjudicate all “related” disputes between the parties in one action.

Compulsory Counterclaims Fall Within the Court’s Supplemental Jurisdiction

Federal courts have supplemental jurisdiction over compulsory counterclaims. This represents another reason why compulsory counterclaims will be barred if they are not brought in the same suit – thedefendant has no jurisdictional hurdles to overcome.

Statute of Limitations for Compulsory Counterclaims

The filing of a lawsuit by the plaintiff suspends the statute of limitations on any compulsory counterclaims. The rationale is the filing of the complaint puts the plaintiff on “notice” of any related claims by the defendant. Furthermore, there is no prejudice to the plaintiff since she has obviously preserved evidence of the transaction in support of her claim.

For example, a plaintiff filed a negligence action in federal court against a defendant for personal-injury damages suffered in a car accident. The defendant has a related claim for property damage arising from the same accident. However, the statute of limitations on claims for property damage expired right after the plaintiff filed suit. – In this case, the court will allow the defendant to assert his claim for property damage even though the statute of limitations has run.

This rule is similar to the “relation back” doctrine for plaintiffs who amend their complaint to adda related cause of action after the statute of limitations has run.

Compare: The rule does not apply to permissive counterclaims. Since they are “not related” to the plaintiff’s claim, the rationale of notice and the preservation of evidence disappear. Additionally, if the statute of limitations has run on the defendant’s counterclaim before the plaintiff filed suit, it is barred.

Permissive Counterclaims (“Unrelated” Claims)

A permissive counterclaim is an unrelated claim asserted by the defendant against the plaintiff. As the word “permissive” indicates, these types of claims are optional by the defendant and may be asserted in a separate action. The reason for making “unrelated” claims permissive is it would force the defendant to litigate all of his claims in a forum dictated by his opponent. FRCP 13(b)

Permissive Counterclaims Are Not Within the Court’s Supplemental Jurisdiction

The main issue regarding permissive counterclaims is they are not within the court’s supplemental jurisdiction. Thus, an unrelated claim by the defendant against the plaintiff must


independently satisfy subject matter jurisdiction. This is another reason why permissive counterclaims are optional.

For example, a plaintiff from State A filed a negligence action in federal court against a defendant from State B for $100,000 in damages suffered in a car accident. Two months earlier, the plaintiff breached a land-sales contract with the defendant. – In this case, the defendant may file a permissive counterclaim against the plaintiff for damages for breach provided subject matter jurisdiction is satisfied, i.e., the damages for breach must exceed $75,000.

MBE TIP: On the bar exam, “permissive” counterclaims are most likely to encounter jurisdictional obstacles. Be on the lookout for lack of subject matter jurisdiction when it comes to unrelated claims since that is the way the examiners will test it!

Permissive counterclaims: (i) are not related to the plaintiff’s claim; (ii) do not fall under supplemental jurisdiction; and (iii) the defendant is not compelled to bring a permissive counterclaim. In comparison, compulsory counterclaims: (i) are “related to” the plaintiff’s claim; (ii) “fall under” the court’s supplemental jurisdiction; and (iii) the defendant is “compelled” to bring a compulsory counterclaim or forever lose it.

Cross-claim ( vs. )

A cross-claim is a claim by one co-party against another co-party. The most common type of cross-claim (and the one you will see on the bar exam) is where one co-defendant sues another co-defendant, e.g., 1 sues 2.

A cross-claim must be “related” to the plaintiff’s claim. The reason is to help ensure that the plaintiff’s case will not be complicated by a totally unrelated series of claims among co-defendants.

* This concept was just tested.All Cross-Claims are Permissive

Even though a cross-claim must arise out of the same transaction or occurrence as the plaintiff’s claim, it is still optional. Thus, a co-defendant is not obligated to assert a related claim against another co-defendant. FRCP 13(g)

For example, a plaintiff filed suit against an employer and an employee for damages suffered in acar accident. – In this case, the employer may assert a crossclaim against the employee for damages to theemployer’s van allegedly caused by the employee’s negligent driving in the accident with the plaintiff.

It is worth pointing out a crossclaim makes co-parties opposing parties. Thus, if the first co-defendant asserts a crossclaim against the second co-defendant, the second co-defendant must assert any compulsory counterclaims he has against the first co-defendant or they will be waived.

For example, A sues B and C. // B files a cross-claim against C. // If C has a “related” claim against B, C must raise it or it will be barred. C’s claim is considered a compulsory counterclaim.

MBE TIP: Counter-claims ( vs. ) arising from the same event as the plaintiff’s claim are mandatory; while cross-claims ( vs. ) arising out of the same event as the plaintiff’s claim are always permissive. A great way to remember this, as well as other rules, is “a defendant cannot be forced to sue anyone but the person directly suing him.”

Compare with Impleader


A claim for indemnification or contribution against a co-party is a cross-claim. Compare: A claim for indemnification or contribution against a non-party is called a third-party claim (impleader).

Since a cross-claim must be “related” to the plaintiff’s claim, it is within the court’s supplementaljurisdiction. The same holds true for third-party claims (impleader).

“C” NOTES

Complaint Plaintiff sues the defendant vs.

Counterclaim Defendant sues plaintiff / Claim against an “opposing” party vs.

Crossclaim Co-defendant sues another co-defendant / Claim against a “coparty” vs.

Impleader (Claims for Contribution or Indemnity)

Impleader enables a defendant to bring into the lawsuit a third-party who may be liable to him for all or part of the plaintiff’s damages. FRCP 14

For example, a car dealership leased a new car to a driver. Due to a manufacturing defect, the driver got into an accident and suffered serious injuries. The driver sued the dealership. – In this example,the dealership may assert a third-party complaint and implead the manufacturer of the car since the manufacturer will likely have to indemnify the dealership for the plaintiff’s harm.

The rationale for impleader is it saves the time and cost of duplicating evidence in two proceedings. Impleader is entirely optional. There is no obligation to implead a non-party.

MBE TIP: Impleader is most likely to be tested in a products liability suit where the retailer is seeking indemnity against the manufacturer or where an employer is sued under vicarious liability and seeks to implead the negligent employee.

The added party is known as the third-party defendant, and the defendant who brings the third-party claim is called the third-party plaintiff. This is illustrated below.

Plaintiff Defendant (Third-Party Plaintiff)

Impleaded party (Third-Party Defendant)

Derivative Liability is Key

The impleaded party must be derivatively liable to the defendant. This means the defendant mustseek reimbursement or contribution. The rule does not permit the defendant to implead a non-party on the theory that the non-party is liable to the plaintiff “instead of” the defendant.

For example, a man filed suit against Officer Adams for excessive force. Officer Adams knows itwas actually Officer Burns who unnecessarily assaulted the man. – In this case, Adams cannot “implead” Burns based on the mistake in identity because Burns would not be liable to Adams. Derivative liability isat the heart of an impleader claim. Impleader is not suitable when the defendant believes that someone else is solely responsible for the plaintiff’s harm.


Assertion of Other Claims by the Impleaded Party (The Third-Party Defendant)

The impleaded party (third-party defendant) proceeds much like a normal defendant. The impleaded party may assert any defenses it has against the plaintiff as well as any defenses the defendant could have raised against the plaintiff. This provision prevents any prejudice that might result from the defendant’s failure to assert a particular defense to the plaintiff’s claim.

Additionally, the defendant (third-party plaintiff) and the impleaded party may assert any claims they have against each other.

Keep in mind the defendant may only serve a third-party complaint on a non-party. If the party was already part of the action, the appropriate procedural device would be a cross-claim.

Impleaded Claims Have No Effect on Subject Matter Jurisdiction or Venue

Impleaded claims (third-party claims) fall within the court’s supplemental jurisdiction given that they will be based on the same transaction or occurrence. Thus, a third-party defendant’s citizenship is irrelevant. Furthermore, impleaded claims do not impact venue.

In contrast, a claim by the plaintiff against the third party-defendant (the impleaded party) must independently satisfy subject matter jurisdiction. Thus, in diversity cases, there is no supplemental jurisdiction over a claim “by the plaintiff” against the impleaded party. Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365 (1978).

For example, a plaintiff from State A filed a negligence action in federal court against a defendant from State B seeking $100,000 in damages. The defendant asserted a third-party complaint against a State A corporation. The plaintiff then asserted a state law cause of action against the corporation. – In this example, the court will not hear the plaintiff’s claim against the corporation since both parties are from the same state.

Compare: A plaintiff from State A filed a negligence action in federal court against a defendant from State B seeking $100,000 in damages. The defendant asserted a third-party complaint against a StateA corporation. The corporation asserted a related claim against the plaintiff. – In this example, the court will hear the corporation’s claim because it falls under the court’s supplemental jurisdiction.

MBE TIP: Supplemental jurisdiction extends to all “related” claims in impleader actions except those made “by the plaintiff” against the impleaded party. Expect to see this concept tested on your bar exam.

Personal Jurisdiction is Needed

The court must obtain personal jurisdiction over the impleaded party. This requirement is somewhat relaxed by the so-called “100-mile bulge” which adds a reach of 100 miles from where the courthouse is located.

MBE TIP: The 100-mile bulge issue is relatively easy to spot given that the examiners must tell you the distance between where the impleaded party was served in relation to the federal courthouse. Generally that will be in a city close to the court where the case was filed.

Severing the Third-Party Claim or Denying Impleader


The court has discretion to deny impleader if it would “prejudice” the plaintiff or if the case becomes overly complicated. The court may also sever the impleaded claim and order a separate trial.

As a final matter, in a diversity case, the legal theory supporting derivative liability (whether contribution or indemnity) must be recognized by state law. If state law does not recognize the theory sued upon, the federal court must deny impleader.

Interpleader (The Stakeholder)

Interpleader enables a person holding property for the benefit of another to join all parties who claim an interest in that property in a single action. Interpleader is designed to protect the “stakeholder” from guessing which party is entitled to the property and lets the claimants fight it out among themselves.

For example, a man had a $100,000 life insurance policy that named his son as the primary beneficiary and his sister as the contingent beneficiary. The man and his son died when they were crushedto death by a sea of teenage girls at a Justin Bieber concert. Because there was a dispute as to the time of death, the son’s wife claimed she is entitled to the proceeds as the son’s sole heir. The sister contends thatshe takes the proceeds of the policy asserting that the son died before the man. – In this case, the insurance company knows it must pay either the son or the sister, but it is not sure which party is rightfully entitled to the proceeds. Therefore, the insurance company may file an interpleader action, deposit the $100,000 with the court, and let the sister and the son’s wife fight it out.

The rationale for interpleader is to protect the stakeholder from having to defend against multiplelawsuits by forcing all claimants to proceed in one action with respect to the property in question.

MBE TIP: Interpleader is most likely to be tested when two or more parties claim title to a piece of real property or an interest in the proceeds of an insurance policy.

Stages of the Interpleader Action

There are two stages of any interpleader proceeding. First, the court determines whether interpleader is appropriate. If the stakeholder is disinterested in the property, it will be excused from the lawsuit, leaving the stake with the court to be fought over by the competing claimants.

However, if the stakeholder claims it is not liable to anyone, it is an interested party and remains in the case to compete with the other claimants for the fund. Thus, in stage two, the court determines which party is entitled to the funds.

For example, several parties claim they are entitled to the proceeds of a $50,000 insurance policy.The insurance company files an interpleader action and deposits $50,000 with the court. The court finds that interpleader is appropriate. Thereafter, the insurance company contends it is not liable under the policy because the owner failed to pay the premiums as they became due and the policy consequently lapsed. – In this example, the insurance company remains in the action and participates in the second stage of the lawsuit as the court determines the “merits of its claim” and the other claimants.

Depositing the Property with the Court and Enjoining Other Actions

Statutory interpleader requires the stakeholder to deposit the property with the court or to post a bond. Thereafter, the court may enjoin all claimants from further prosecuting any suit in any other court with respect to the property involved. The purpose of this injunctive power is to prevent multiple lawsuitsand to reduce the possible depletion of the fund by the first person to reach judgment.


An action for interpleader will be denied when it is clear the stakeholder is not threatened by multiple liability such as when “one of the two” claimants has dropped her claim or if the claims are not asserted against the same fund. State Farm Fire & Casualty Co. v. Tashire, 386 U.S. 523 (1967).

Statutory Interpleader vs. Rule Interpleader

There are two types of interpleader: statutory interpleader under 28 U.S. Code § 1335 and rule interpleader under FRCP 22

Statutory interpleader is much broader and easier to satisfy because it is unlikely to pose any problems of jurisdiction and venue. In fact, that’s the whole reason why Congress created it. Statutory interpleader only requires diversity between any two claimants and $500 in controversy. This is known as“minimal diversity”. Furthermore, it authorizes nationwide service of process so there are no personal jurisdiction problems and venue is proper where any claimant resides.

For rule interpleader, the normal requirements of personal jurisdiction, subject matter jurisdiction,and venue must be satisfied. This rule requires “complete diversity” between the stakeholder and all claimants. Rule interpleader does have one advantage, it does not require the stakeholder to post a bond or deposit the property with the court.

MBE TIP: Statutory interpleader is a much stronger option than rule interpleader. The only time a stakeholder would elect rule interpleader is when all the claimants reside in the same state.

Intervention of Right (Outsiders Coming In)

Intervention permits an “outsider” to enter the lawsuit. The court must permit a person to intervene if: (i) she claims a significant interest in the action; (ii) disposing of the action in her absence may impair that interest; and (iii) that interest is not adequately represented. FRCP 24(a)

For example, the United States brought suit against a corporation seeking to enjoin it from erecting a structure on land “purportedly” owned by the government. The corporation asserted it had rights to the land and that the United States had no jurisdiction over the property. A development company sought to intervene claiming ownership in the land. – In this case, the court allowed the development company to intervene because it had a significant interest in the property, which will be impaired in its absence because the decree will adjudicate one of the existing parties as the owner of the property, and the court in a subsequent lawsuit will likely follow that decision under the doctrine of stare decisis. Given that no party is representing the development company’s ownership interest, intervention of right was granted. Atlantis Development Corp. v. United States, 379 F.2d 818 (5th Cir. 1967).

The unconditional right to intervene may also be given by a federal statute, e.g., authorizing the Attorney General to intervene when the “constitutionality” of a statute is challenged. 28 U.S. Code § 2403

Compare: When a litigant argues that a statute should be “construed” a certain way, the issue is one of permissive intervention.

The first element requires the intervenor to have a “significant interest” that is specific to her. Courts have struggled to find a way to define interest so they focus on the goal of intervention, which is to achieve judicial economy by resolving related issues in a single lawsuit. The second prerequisite measures the “impact” or the degree to which the intervenor will be harmed by a judgment in the pending action.


Much of the litigation has centered on the third requirement. As a general rule, a person’s interests are “adequately represented” when the intervenor and an existing party are likely to make the same arguments, are representing the exact same interests, and are pursuing the same ultimate objective.

In other words, when the intervenor’s stake in the outcome is no greater than that of an existing party, the existing party is competent, and there is no collusion between the original parties, intervention often will be denied because the intervenor’s interests are adequately represented.

On the other hand, a potential intervenor is “not” adequately represented if the existing party does not have the same incentive to litigate vigorously, the intervenor has a special interest the existing party does not represent, or where the intervenor has far more to lose than an existing party. In these situations, intervention is proper.

Generally, the intervenor must show she brings something different to the litigation.

MBE TIP: A determination of whether a potential intervenor has a “significant interest” in the litigation or whether her interests are “adequately represented” is a bit subjective. Therefore, let the facts push you in the right direction. The examiners have to give you strong facts favoring one side or the other in order for you to make an objective determination.

Appealability of an Order “Denying” Intervention of Right

An order denying intervention of right is “immediately” appealable because it is a final decision on the intervenor’s request. The intervenor’s rights may be substantially impaired if she is forced to await the outcome of the trial.

Permissive Intervention

The court may permit anyone to intervene who has a claim or defense that shares with the main action a common question of law or fact. FRCP 24(b)

Although the rule for permissive intervention sets forth a broad standard, the court has the discretion not to allow it. In exercising its discretion, the court must consider whether the intervention will unduly delay or prejudice the parties.

For example, intervention should be “denied” when the intervenor’s presence would serve no useful purpose; when the intervenor seeks to interject a claim that is not related to the main action, and would delay the trial and prejudice the rights of the existing parties; or where the intervenor raises no new issues, complicates the action, or adversely affects the parties in some manner.

Compare: The court should “allow” the outsider to enter the case when she would be helpful to have as a party or if the intervenor brings a special expertise or a different perspective to the action.

MBE TIP: Permissive intervention is very broad. Because this concept is so subjective, the examiners must give you strong facts for either granting or denying the motion for permissive intervention.

An Application for Intervention Must be “Timely”

An application for intervention must be timely, whether the intervention sought is permissive or as of right. Timeliness varies depending on the circumstances. Although the rule sets no deadline, the later in the case, the harder it is for the court to justify intervention. The focus is on the prejudice the parties will suffer and the reasons why the intervenor took so long.


For example, an applicant’s interests were adequately represented by an existing party until the existing party decided not to appeal. – In this suit, the motion for intervention “on appeal” was timely due to the unusual circumstances of the case. Smuck v. Hobson, 408 F.2d 175 (D.C. Cir. 1969).

Keep in mind the court has discretion to deny intervention if the motion is untimely. It will consider such factors as the length of the delay, the reasons for the delay, the prejudice to the existing parties, and the degree to which the intervenor’s rights will be affected. Basically this is just a common sense approach when evaluating the facts of each case.

Auxiliary Issues that Apply to Both Intervention of Right and Permissive Intervention

Intervention is not allowed if the intervenor’s presence would destroy diversity. Therefore, in diversity cases, make sure the intervenor’s citizenship is completely diverse from all adversaries.

Furthermore, the court may allow the intervenor to participate in a limited way, e.g., only to arguea certain claim, not permitted to take discovery, or not able to present witnesses.

MBE TIP: It gets confusing trying to remember which rules affect subject matter jurisdiction and which do not. Well, let’s make it simple then. Any “related” claims by the defendant have no effect on subject matter jurisdiction. For instance, when a defendant impleads a third-party, the third-party’s citizenship is irrelevant in diversity actions. Additionally, crossclaims between defendants fall within supplemental jurisdiction.

On the other hand, claims by the plaintiff must satisfy subject matter jurisdiction. For instance, when the“plaintiff asserts a claim” against an impleaded party or a person seeking to intervene, an independent basis for subject matter jurisdiction must exist. Similarly, a party seeking to intervene as a plaintiff cannotdestroy diversity. – This “plaintiff/defendant” dichotomy is the best way to remember a lot of these rules.

LET THE I’S HAVE IT

Impleader The defendant brings in a non-party for indemnification or contribution.

Interpleader Stakeholder deposits property with the court to let others fight over it.

Intervention An outsider wants to get into the litigation to protect her interests.

FORWARD THINKING: Intervention and joinder of parties have a lot in common. Both intervention and joinder require complete diversity when no federal question is present and a claim by the plaintiff against the intervenor or the party to be joined must independently satisfy subject matter jurisdiction. Supplemental jurisdiction does not apply to “claims by plaintiffs” against intervenors or persons joined asparties in actions founded solely on diversity. The only real difference is for intervention, an outsider wants in. For joinder of parties, the plaintiff wants to join with other plaintiffs or sue multiple defendants.

Permissive Joinder of Parties

Multiple plaintiffs may join together or a plaintiff may sue multiple defendants in one action if: (i) the claim arises out of the same transaction or occurrence; and (ii) there is a question of law or fact common to all joined parties. The underlying policy of party joinder is to enhance judicial efficiency by rendering complete justice in one action, thereby preventing multiple lawsuits. FRCP 20


This rule does not allow defendants to bring new parties into the action whom the plaintiff did notchoose to sue. Impleader is the only way for a defendant to bring an outsider into the case provided that the defendant is seeking contribution or indemnity from the impleaded party. Nevertheless, Rule 20 only applies to the joinder of parties by the plaintiff.

Same Transaction or Occurrence

To determine whether a claim arises out of the same transaction or occurrence as the main claim, there must be enough factual overlap so that it would be “efficient” to have the parties litigate together.

For example, joinder is proper in cases in which a plaintiff is injured by one defendant’s negligence, and those injuries later are aggravated by the negligence of a second defendant.

Compare: Three smokers joined together as plaintiffs in a suit against two tobacco companies. According to the facts, each plaintiff began smoking at a different age, each smoked a different brand of cigarettes, and each one quit for a different reason. – In this case, the court denied joinder because the plaintiffs’ claims were factually distinct and the jury would be subjected to evidence relevant to some parties but not others. Insolia v. Philip Morris, Inc., 186 F.R.D. 547 (E.D. Wis. 1999).

Common Question of Law or Fact

This element requires the parties share at least one common question of law or fact.

For example, four passengers were injured when a small plane crashed. Some injuries were more severe than others. – In this case, the passengers may join as plaintiffs even though the extent of their damages will be different because their injuries arose out of the “same event” and the “issue of liability” is common to them all.

MBE TIP: The examples in this section, as well as in the rest of this outline, are very likely to emulate

the questions you will see on the bar exam. Count on it!

When Multiple Plaintiffs Join Together

In diversity actions, if one plaintiff satisfies the amount in controversy, other plaintiffs may join related claims that do not independently satisfy the amount in controversy requirement. The rationale is the requirement of “amount in controversy” is meant to ensure a dispute is sufficiently important to warrant federal-court attention. Therefore, when one plaintiff’s claim grabs the court’s attention, there is no harm in hearing related, but monetarily insufficient, claims by other plaintiffs. Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546 (2005).

For example, a young girl filed a products liability action against a manufacturer seeking $500,000 in damages for injuries she received when she sliced her finger on a tuna can. The girl’s parents joined as plaintiffs seeking $10,000 in damages for emotional distress. The parties are completely diverse.– In this case, the girl’s claim satisfies the amount in controversy requirement and the court has supplemental jurisdiction over the parents’ claims even though they are for less than the jurisdictional amount.

Keep in mind complete diversity must still exist between all plaintiffs and all defendants. The rule promulgated by the Supreme Court in Exxon only deals with the amount in controversy.

When Multiple Defendants are Sued


When a plaintiff joins multiple defendants, subject matter jurisdiction must exist as to each claim against each defendant.

For example, a citizen sued two police officers for violating his federal civil rights. – The court has federal question jurisdiction over each claim against each defendant.

For example, a citizen sued two police officers. The claim against the first officer asserts a violation of the citizen’s federal civil rights. The claim against the second officer asserts a state law violation. Both claims concern the same event. – In this case, the court has federal question jurisdiction over the claim against the first officer and “supplemental” jurisdiction over the related state law claim against the second officer.

In actions founded solely on diversity, the plaintiff must assert a claim against each defendant formore than the jurisdictional amount. Supplemental jurisdiction does not extend to claims by plaintiffs against persons joined as defendants in diversity actions. 28 U.S. Code § 1367

Compare: A plaintiff filed a diversity action against two defendants. The claim against the first defendant is for $100,000. The claim against the second defendant is for $25,000. Both claims concern the same event and there is complete diversity between the parties. – In this example, the court does not have supplemental jurisdiction over the claim against the second defendant.

In diversity cases, watch out for a claim made by the plaintiff against anyone who has entered the action. Supplemental jurisdiction does not extend to “claims by plaintiffs” against persons made parties through impleader, intervention, or party joinder.

Alternative Joinder and Joint Liability

A plaintiff may join two or more defendants when the claim asserted against them is in the alternative or when the defendants are jointly liable for the harm.

The need for alternative joinder of defendants typically arises when the plaintiff is entitled to recover from one of the defendants, but the plaintiff does not know which of the two defendants is liable.

For example, a man was shot when two hunters negligently fired at the same time in the man’s direction. Both hunters carried the same type of gun loaded with the same sized shells. – In this example, if the man is unsure which hunter caused his harm, he may join them as defendants and sue them in the alternative. Alternative joinder avoids multiple suits with the ever-present danger of inconsistent verdicts.

Jurisdiction

Each defendant joined must be subject to personal jurisdiction. This is true with respect to any defendant in any situation. Furthermore, the party to be joined must not destroy diversity. Thus, in diversity cases – for both joinder and intervention – complete diversity must exist at all times.

If you think about this for a second, it really makes sense. The rules were specifically written to avoid any shenanigans by the plaintiff. If supplemental jurisdiction covered claims by plaintiffs against intervenors, impleaded parties, or persons joined as a defendant, the plaintiff could initiate suit in federal court against a diverse defendant and then wait until the defendant impleaded a non-diverse third-party, oruntil a non-diverse outsider intervened, or the plaintiff could merely join a non-diverse defendant. Obviously this tactic would circumvent the requirements of complete diversity.


Additionally, a token plaintiff could initiate suit in federal court against a diverse defendant and then the real plaintiff, who shares the same citizenship as the defendant, could intervene or join in as a plaintiff and start firing claims. Again, this strategic move would sidestep the rule. Therefore, any claims made by a plaintiff against an intervenor, an impleaded party, or a party joined as a defendant must have an independent basis for subject matter jurisdiction. – Did we all just have an “aha” moment?

Permissive Party Joinder is Comparable to Permissive Intervention

Permissive joinder is similar to permissive intervention. Both rules require that the claims share a common question of law or fact and both rules deal with cost-efficient litigation.

Compulsory Joinder of Parties (Required Joinder of Parties)

Joinder is required for any person who has a material interest in the case and whose absence would result in substantial prejudice.

ESSAY TIP: In order to properly attack a joinder question, follow this approach:

(1) Determine whether the person to be joined is a necessary party.(2) If the person to be joined is a “necessary” party, determine whether it is feasible to join

that person. It is “feasible” if that person does not destroy diversity and is subject to personal jurisdiction. In such case, the person must be joined.

(3) But if it is not feasible to join that person, determine whether the action can proceed in that party’s absence or whether the case should be dismissed. In other words, determine whether the person is indispensable. If the person is “indispensable,” the case must be dismissed and refiled in state court.

♦ Necessary Party

A person is a “necessary” party and should be joined if: (i) the court cannot accord complete relief among the existing parties in that person’s absence; (ii) that person claims an interest in the subject matter where a decision by the court will impair that person’s ability to protect her interests; or (iii) the party’s absence would leave an existing party subject to a risk of incurring multiple or inconsistent obligations. Furthermore, a joint tortfeasor is not a person needed for just adjudication.

♦ Feasible

If the person to be joined is a necessary party, the person must be joined if she does not destroy diversity and is subject to personal jurisdiction.

♦ Indispensable

When joinder is not feasible (because the person would destroy diversity), the court must determine whether, in equity and good conscience, the action should proceed or be dismissed.

The factors for the court to consider include: (1) the extent of prejudice of all involved; (2) the manner in which the court can fashion a remedy to reduce or avoid any prejudice; (3) the adequacy of a remedy that can be granted in the party’s absence; and (4) whether the plaintiff will have another forum available if the action is dismissed.

If the court decides the party is “indispensable,” it must dismiss the case.


E. Discovery (including e-Discovery), Disclosure, and Sanctions HOT TOPIC

Introduction to Discovery

Perhaps the most fundamental aspect about discovery is it is conducted by the parties. Most discovery goes on without court intervention. The judge is only there to assist in resolving disputes that arise during the process. FRCP 26(a)

The philosophy behind the rules on discovery is every case should be disposed of “on its merits” and litigation should be based on open access to information.

The Scope of Discovery

Parties may obtain discovery regarding any “non-privileged” matter that is relevant to any party’s claim or defense. The purpose of the “relevant to any party’s claim or defense” standard is to confine discovery to the issues raised in the pleadings. Thus, this rule focuses on the actual claims and defenses involved in the action.

Furthermore, relevant information need not be admissible at trial so long as it appears reasonablycalculated to lead to the discovery of admissible evidence. FRCP 26(b)(1)

For example, in a suit for wrongful death, the plaintiff may obtain discovery of a conversation a man overheard by two gangsters who witnessed Suge Knight’s fatal hit-and-run accident. Even though the conversation is hearsay, it is discoverable because it is “relevant to the plaintiff’s claim” and “reasonably likely” to lead to admissible evidence, i.e., the identity of the witnesses who saw the accident.

Similarly, evidence a person was insured is generally not admissible at trial since it would induce juries to decide cases on improper grounds, but such information is discoverable because it encourages settlement.

The Broader “Subject Matter” Standard

The court is authorized to expand discovery to any information relevant to the “subject matter” ofthe action if good cause is shown. This part of the rule is designed to involve the court in regulating sweeping discovery requests.

Relevant to the “Parties’ Claims or Defenses” Party-controlled

Relevant to the “Subject Matter of the Action” Court ordered upon a showing of good cause

Privilege

Even though certain material is relevant, information that is privileged is not discoverable. The most common privileges raised during discovery are the attorney-client privilege, the privilege against self-incrimination, and the marital communications privilege.

A party may refuse a discovery request by “notifying” the requesting party he is withholding information under a claim of privilege. The party must provide enough information so the requesting party can decide whether to contest the claim. Thus, the claim must be specific. FRCP 26(b)(5)

If the claim is challenged, the court ultimately decides whether the privilege applies.


Inadvertent Disclosure of Privileged Information

If a party inadvertently discloses privileged information, that party must promptly notify the receiving party that the information is privileged. After being notified, the receiving party must return, hold, or destroy any copies it has. Furthermore, the receiving party may not use or disclose the information and must take reasonable steps to retrieve the information if it has been sent to anyone else.

For example, the plaintiff’s lawyer inadvertently sent a privileged document to an opposing party.– In this example, the lawyer must promptly notify the opposing party that the document is privileged. The opposing party must then return, sequester, or destroy the document as well as any copies it has. The opposing party must not use or disclose the information until the claim is resolved and must take reasonable steps to retrieve the information if it was sent to anyone else.

MBE TIP: The inadvertent disclosure of privileged information does not constitute a waiver.

Work Product Immunity (Material Prepared for Litigation) WARM TOPIC

A party may not discover documents that are prepared in anticipation of litigation. The rationale is in preparing a case it is essential a lawyer work with a certain degree of privacy.

Notes taken during an interview of a witness, correspondence between co-counsel, trial strategy, and a lawyer’s personal beliefs are the work product of the lawyer. If such materials were open to opposing counsel, much of what is put down in writing would remain unwritten. FRCP 26(b)(3)

Facts Not Protected

While materials prepared in anticipation of litigation are not discoverable, the underlying facts ofthe case are not protected, e.g., the identity of witnesses.

Prepared in Anticipation of Litigation

Work product immunity is limited to materials prepared in anticipation of litigation. Essentially, the lawyer must have a reasonable belief that litigation is a real possibility and the primary purpose of preparing the documents is for litigation.

Documents prepared for “ordinary business purposes” such as routine accident reports and statutorily required reports of automobile accidents involving injuries are not protected.

For example, a memo prepared to assess the effects of possible litigation of a hostile takeover would qualify as work product; but a claims adjuster’s report investigating the cause of a fire is not protected because such reports are not prepared for litigation but rather for the purpose of deciding whether or not to pay a claim under a fire insurance policy.

Representatives are Covered

Preparation of materials routinely requires the assistance of non-attorneys. Therefore, the rule covers materials prepared by a party, insurer, agent, non-testifying expert, or similar consultant. The policy for this extended protection is to allow investigative work to be done with the help of others.

Overcoming the Qualified Immunity


Despite the restriction on work product immunity, a party may discover the materials if: (1) the party shows he has substantial need for the materials; and (2) cannot, without undue hardship, obtain their substantial equivalent by other means.

♦ Substantial Need

Substantial need refers to the importance of the materials sought. It requires the party to show that production is essential to the preparation of his case.

♦ Undue Hardship

Undue hardship refers to the “difficulty” a party will have in obtaining the information. It exists when the party has no reasonable access to the information. This generally occurs when a key witness is no longer available, has a lapse of memory, is reluctant or hostile, or can be reached only with difficulty. Similarly, the disappearance of evidence may establish undue hardship.

For example, an attorney sought discovery of statements made by witnesses that had been taken by opposing counsel even though the witnesses were available. – In this landmark case, the court denied discovery because the attorney had the same access to the information as opposing counsel. If the attorney wanted to learn what the witnesses knew, the attorney could have subpoenaed the witnesses to testify at a deposition. Hickman v. Taylor, 329 U.S. 495 (1947).

Special Protection of Mental Impressions, Opinions, and Legal Theories

If the court orders discovery of a party’s work product, it must protect against disclosure of the mental impressions, opinions, and legal theories of the party’s attorney or other representatives.

For example, a lawyer’s trial strategy, evaluation of a claim, opinion on the credibility of a witness, or confidential documents prepared for “internal” use are all immune from discovery.

A Party’s Right to His Own Statement

A party or witness may request a copy of his own statement. The reason for this rule is in most cases a person who gives a statement often does so without the benefit of counsel and does not understandthe legal consequences of his actions. Thus, the rule gives the person the opportunity to examine the statement prior to trial to avoid being embarrassed by an inconsistent statement.

Testifying Experts (Experts Who Will be Called at Trial)

A party must disclose the identity of any expert it plans to call at trial along with a detailed reportof the testimony that will be offered. The report must contain the basis for the expert’s opinion and any facts considered by the witness in forming that opinion. FRCP 26(a)(2)

The report is intended to set forth the substance of the expert’s testimony. The reason for requiring the report is effective cross-examination requires advance preparation.

A Party May Take the Expert’s Deposition After the Report is Provided

Any party may depose a testifying expert, but only after the report is provided. The rationale is in many cases the report may eliminate the need for a deposition or at least reduce the length of it.


The party taking the deposition must compensate the expert for the time spent on the deposition.

Protection for Communications Between Attorney and Expert

Communications between the attorney and the expert are shielded from discovery. However, communications relating to the expert’s compensation; and facts or assumptions provided by the attorney the expert “considered” or “relied” on in forming his opinion are not protected.

This new rule is aimed at encouraging open communications between the attorney and the expert and it focuses on what matters most – the actual opinion rendered by the expert.

To better understand, anything used by the expert in forming his opinion is open to discovery because parties are concerned with how the expert arrived at his conclusion. Additionally, discussions about “any type” of compensation are discoverable. The purpose is to permit inquiry into potential sources of bias. FRCP 26(b)(4)(C)

The Duty to Supplement

A party is required to inform opposing counsel of any changes in the expert’s opinion. Thus, a party has a duty to supplement the expert’s deposition testimony as well as the written report.

Non-Testifying Experts (Experts Who Have Been Retained but Will “Not” be Called at Trial)

Often times lawyers need the help of an expert to prepare for trial. In order to afford lawyers proper protection, a party may not obtain discovery of an expert who has been “retained” or “specially employed” but who will not be called at trial. The rationale is there is less of a need for a party to obtain the opinion of an expert who is not expected to testify. FRCP 26(b)(4)(D)

Exception for “Exceptional Circumstances”

Even though a party is not required to disclose the identity of a “non-testifying” expert, the other party may obtain discovery by showing exceptional circumstances under which it is impracticable to acquire the information by other means.

A party can make this showing where the opposing party’s expert had the “only opportunity” to view the scene, the other party has “cornered the market” on experts, or if the expert is truly unique.

For example, an engineer investigated the cause of a mudslide by inspecting the site “immediately” after the incident. No other expert had been able to view the site before the weather had altered the conditions. – In this case, the court found exceptional circumstances warranting disclosure of the engineer’s report because he was the only expert to form an opinion about the cause of the mudslide immediately after the incident. Delcastor v. Vail Associates, 108 F.R.D. 409 (D.Colo. 1985).

It is very easy to obtain discovery from an expert who will testify at trial; it is much more difficultto get any information about an expert who will not be called at trial.

No Free Rides – You Gotta Pay

Not only must the party taking the deposition compensate the expert for his time, that party is also required to reimburse the other party a portion of the expenses it incurred in retaining the expert. Therationale for this cost-sharing rule is without it, it would give the requesting party a “free ride” on the other party’s dime.


MBE TIP: If you want information from an expert, you gotta pay for it!

Unretained Experts (Experts Who Were “Informally” Consulted but Not Retained)

A party may not obtain discovery of an expert who was consulted, but not retained. In fact, a party may not even get the names of those who were “informally” consulted. The reason is you are not entitled to know everything the other party is doing.

Expert as an Actual Witness

When an expert is an “eyewitness” to the event in question, the expert is treated like an ordinary witness. This means the expert may be deposed and subpoenaed to testify at trial without compensation.

For example, a doctor who provides emergency roadside treatment to an accident victim should be treated as an ordinary witness. In other words, when an expert has personal knowledge of the event, the expert receives no special treatment.

Limitations on Discovery

The court must limit discovery if a request is unreasonably cumulative or if the discovery soughtcan be obtained from a more convenient, less expensive source.

For example, the court might determine discovery is “unreasonably cumulative” when a party deposes the same witness multiple times without eliciting any new information.

Additionally, the court must limit discovery if the party seeking it has had ample opportunity to obtain the information or if the burden or expense outweighs its likely benefit, considering the needs of the case, the amount in controversy, and the parties’ resources. FRCP 26(b)(2)(C)

For example, in a case with very little at stake, the court may limit the number of depositions a party make take; it may even order a deposition not last more than a few hours but may extend it over multiple days for a witness with medical issues.

The rule attempts to address problems of excessive discovery. Discovery is not to be used to bullya financially weak litigant or to coerce a party into settling. Thus, discovery cannot be “disproportionate” to the lawsuit.

E-Discovery (Electronically Stored Information) HOT TOPIC

A party need not provide discovery of electronically stored information if the information is not reasonably accessible because of undue burden or cost. This rule is designed to address issues raised by difficulties in “retrieving” electronically stored information. FRCP 26(b)(2)(B)

Cost-Shifting / Cost-Sharing Analysis

If the court finds producing electronically stored information would impose an undue burden or cost on the responding party, the court may consider cost-shifting or cost-sharing options. This means the court may require the requesting party pay all or a portion of the costs associated with obtaining the information.


Cost-shifting is only appropriate for inaccessible electronically stored information. When data is maintained in an accessible format, cost-shifting is not appropriate.

For example, if e-mails are stored on an easily searchable system, the responding party must bear the expense of complying with the discovery request; but if the information is stored on “backup tapes” that are not readily accessible, the court will consider cost-sharing options. Zubulake v. UBS Warburg, 217 F.R.D. 309 (S.D.N.Y. 2003).

MBE TIP: The concepts that came out of the Zubulake case are very likely to be tested!

The Duty to Preserve

A party has a duty to preserve evidence – including electronically stored information – when litigation is reasonably anticipated. Thus, the duty often attaches well before the filing of a complaint.

For example, in a gender discrimination case, the duty to preserve was triggered four months before the complaint was filed when the corporation’s managers recognized the possibility that the woman might sue. Zubulake v. UBS Warburg, 220 F.R.D. 212 (S.D.N.Y. 2003).

Sanctions

A court may not impose sanctions on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system.

“Good faith” may require the party to suspend its routine operations to prevent the loss of any relevant information. This is often referred to as a “litigation hold.”

For example, a corporation should prevent the routine destruction of e-mails of those persons who were directly involved in the litigation-provoking events.

Stipulations About Discovery

The parties may stipulate to modifications regarding discovery. This rule gives the parties a greater opportunity to agree upon modifications and eliminates the need for court intervention. FRCP 29

For example, parties may agree to more depositions; more interrogatories; more time to complete a deposition; or that a deposition be taken before any person, on any notice, or in any way.

However, court approval must be obtained if a stipulation to extend time would interfere with dates set by the court.

Signing Discovery Requests – The Certification Requirement

As a means of discouraging discovery abuse, every discovery request or response must be signedby the attorney of record. The signature certifies the request is not interposed for any improper purpose such as to harass or delay and is not unreasonably burdensome or expensive. FRCP 26(g)

The rule is designed to remind attorneys there is an affirmative duty to engage in discovery in a responsible manner. Therefore, the rule forces each attorney to stop and think about the legitimacy of a request. A person who signs a discovery request in “bad faith” is subject to sanctions.


For example, a party may abuse the discovery process by asking hundreds of questions detailing every aspect of the case from the most trivial to the most complex. Such a request crosses the line from legitimate inquiry into the area of unnecessary harassment.

Mandatory Planning Conference

Discovery begins with a mandatory planning conference that requires the parties to confer as soon as practicable in order to discuss the case, consider the possibility of settlement, arrange for requireddisclosures, discuss preserving discoverable information, and to develop a discovery plan. FRCP 26(f)

A party may not seek discovery prior to this conference (except in a few situations, e.g., taking the deposition of a person about to leave the country). After the conference, the parties submit their plan to the court.

The mandatory planning conference or “meet and confer” is intended to encourage cooperative discovery and thereby reduce the need for judicial intervention. Therefore, the parties are expected to attempt in “good faith” to agree on a proposed discovery plan.

Sanctions for Failing to Participate in a Discovery Plan

The court may impose sanctions on a party who fails to participate in good faith in developing a discovery plan. FRCP 37(f)

Automatic Initial Disclosures

Parties are obligated to disclose certain basic information at the outset of the case. Thus, the rules require they exchange information regarding: (i) potential witnesses; (ii) documentary evidence; (iii) damages; and (iv) insurance. The reason for “automatic” disclosures is such information will inevitably be requested, so the rules mandate disclosure without a request. FRCP 26(a)(1)(A)

Witnesses and Documents – Unless Used “Solely” for Impeachment

A party must identify any witnesses and documents the party may use to “support” its case. The rule does not force a party to disclose damaging information.

For example, a driver who rear-ended another vehicle does not need to disclose the identity of a witness who would testify that the driver was looking at her phone right before the accident.

MBE TIP: A party has no obligation to disclose “unfavorable” information in its initial disclosures.

Furthermore, a party is not required to provide the name of a witness or identify a document the party intends to use solely for impeachment.

Computation of Damages and Insurance Policies

Parties are also required to disclose a computation of damages as well as any insurance policy that may be used to satisfy the judgment, including the “monetary limits” of that policy. The rationale is the existence and extent of insurance is important for settlement.

Sanctions


A party who willfully fails to disclose the identity of a witness or describe a document is prevented from using that material as evidence during any phase of the proceeding. FRCP 37(c)(1)

For example, the plaintiff failed to disclose the name of a key witness, but the defendant was already aware of the witness’s identity. – In this case, the court will not exclude the witness’s testimony because the omission was harmless. United States v. Rapanos, 376 F.3d 629 (6th Cir. 2004).

As a final matter, each party is under a duty to supplement an initial disclosure the party learns is incomplete or incorrect, e.g., a witness not previously disclosed is identified later in the case.

Oral Depositions

A deposition is the taking of testimony from a person under oath. A party may take the deposition of any person including a witness, a party, or a non-party. Each party has the right to pose questions and to cross-examine the deponent. Oral depositions operate much like a trial except there is no judge or jury present. FRCP 30

One other small difference is at trial, the court must order witnesses excluded at a party’s requestso they cannot hear other witnesses’ testimony. FRE 615. However, potential deponents are not automatically excluded by the request of a party but may be excluded by the court when appropriate.

Depositions are required to be recorded by audio, video, or stenograph (machine for typing shorthand). The method of recording must be stated in the notice or in the subpoena (non-parties). Any party may designate another method for recording in addition to that specified in the notice.

However, a court order or agreement is required to take a deposition by telephone or other remote electronic means, such as Skype or satellite television.

Limitations Imposed

Each “side” may take up to 10 depositions, whether taken orally or by written questions. This limit is not per party, but rather is allocated between all the plaintiffs and all the defendants.

For example, if there are multiple plaintiffs in a case, they must figure out how to apportion the 10 depositions between them.

Another limitation imposed by the rule is a person may be deposed only once. Thus, there is a one deposition per person limit. The final restraint is a deposition may not exceed seven hours and it must be completed in one day.

For example, a lawyer may not depose a witness for three hours on Monday and three hours on Tuesday since each deposition is confined to a “single day” for a maximum of seven hours.

Despite these limitations, the court must allow additional time if needed to “fairly examine” the deponent or if any other circumstance delays the examination.

For example, the court must authorize extra time where the examination is delayed by a power outage or a health emergency. – In these situations, the court has no discretion. It must order more time.

To recap: (i) there is a limit of 10 depositions per side; (ii) no person may be deposed more than once; (iii) a deposition cannot last longer than 7 hours: and (iv) it must take place on the same day. – These limitations may be altered by agreement of the parties or by court order.


Notice Required for a Party / Subpoena Required for a Non-Party

In order to take the deposition of a party, notice must be given to every other party. In comparison, a subpoena is required to compel the attendance of a non-party. But the subpoena is only valid within 100 miles of where the person lives or works.

If a party is being deposed, the notice may include a request to produce documents at the deposition. If the deponent is a non-party, service of a subpoena duces tecum is required for production.

* This concept was just tested.

Taking the deposition of a party Notice / Request to Produce Documents

Taking the deposition of a non-party Subpoena / Subpoena Duces Tecum

Corporations and Other Entities

If a corporation is to be deposed, it must designate someone to testify on its behalf. The corporation is required to identify which person has the information that is needed. The deposing party need not guess which employee is in possession of the required information.

If the corporation is not a party to the action, the subpoena must advise it of its duty to produce a “knowledgeable” person for the deposition. The rationale is to insure that a non-party organization that isnot represented by counsel has knowledge of its duty to designate.

Timing

Generally, a party may not take a deposition before the parties have developed a proposed discovery plan. However, an early deposition may be taken if the party “certifies” in the notice that the deponent is expected to leave the country.

A deposition taken in this accelerated fashion cannot be used against a party at trial who could not, despite diligent efforts, obtain an attorney to represent her at the deposition.

Objections

Counsel may “object” to questions on a number of grounds, such as relevance, the introduction ofevidence, or other issues arising during a deposition. However, unlike trial, the examination still proceedsand the testimony is taken subject to any objection.

An objection must be stated concisely in a nonsuggestive manner. This prevents a lawyer from “coaching” the witness by making a long-winded objection suggesting how the question should be answered.

Any person may instruct the deponent not to answer when necessary to preserve a privilege or to present a motion to terminate the deposition on the ground it is being conducted in bad faith or in an oppressive manner. The whole point of a “privilege” is to protect the information from being disclosed at all. Obviously, the privilege would be eviscerated if the testimony had to be revealed.

For example, a husband (or any other person) may instruct his wife not to answer a question in order to preserve the marital communications privilege.


As a final point, an attorney should not engage in any conduct that improperly frustrates the deposition, such as making improper objections.

For example, an attorney may not instruct the deponent not to answer on relevancy grounds. Thisis a clear violation of the rule and sanctions may be imposed. – Compare: The attorney may “object” on relevancy grounds but the examination continues and the deponent must answer.

Reviewing the Transcript and Making Changes to It

If a request is made before the deposition ends, the deponent is entitled to review his testimony and make any changes to it. The deponent must list the changes and the reasons for making them.

If the deposition is offered into evidence at trial, the court will generally accept corrections based on newly discovered evidence or where the deponent was truly confused during the questioning.

Failure to Attend or Serve a Subpoena on a Non-Party

If the party who noticed the deposition does not attend, or fails to subpoena a nonparty who doesnot appear, the absent party must be ordered to pay the attending party’s expenses and attorney’s fees for wasting their time, unless the failure was “substantially justified” or other circumstances make it unjust.

If the nonparty fails to respond to a subpoena, she may be cited for contempt.

Admitting Depositions into Evidence at Trial

A deposition may be used against a party so long as that party had notice of the deposition. The Federal Rules of Evidence control admissibility at trial. Deposition testimony may be admitted as: (1) an admission; (2) a prior inconsistent statement; or (3) former testimony. FRCP 32

Admission by a Party Opponent (An Opposing Party’s Statement)

The deposition testimony of a party or a party’s agent may be offered against that party as an admission. This rule applies to persons “designated” by a corporate party to testify on its behalf.

Prior Inconsistent Statement

If a witness’s testimony at trial contradicts her deposition testimony, the deposition may be used substantively as well as to impeach. The reason why a prior inconsistent statement made at a deposition can be used “substantively” is because depositions are given under oath.

Former Testimony

The deposition testimony of a witness who is unavailable for trial may be admitted as former testimony. Unavailable means the witness is dead, ill, in prison, or beyond the reach of the court’s subpoena power (more than 100 miles from the trial). The rationale behind former testimony is evidence given “under oath” at a deposition is better than no evidence at all.

For example, the plaintiff may introduce into evidence a video deposition of her sole expert witness if the expert is out of state at the time of trial.


Of course, the party offering the deposition into evidence cannot be responsible for the deponent’s absence. In other words, if the party has caused the witness to be unavailable in order to prevent the witness from testifying, that party cannot use the unavailable witness’s deposition at trial.

It is worthy to note a party may utilize her own deposition at trial if she is unavailable. For example, if a party is too ill to attend the trial, her attorney may introduce her deposition into evidence.

Deposition Taken in an Earlier Action

If the deposition was taken by the parties to the current proceeding, there will be no problems of admissibility. However, if the deposition was taken in a previous case, it can only be admitted against a party who had an opportunity and similar motive to cross-examine the witness. Essentially, a party cannot be deprived of its opportunity to cross-examine the witness in order to test her credibility.

MBE TIP: Deposition testimony can be used substantively as: (i) an admission if the deponent is a party;(ii) former testimony if the deponent is unavailable; or (iii) a prior inconsistent statement if the deponent testifies at trial.

Using “Part” of a Deposition at Trial – The Rule of Completeness

If a party offers into evidence only “part” of a deposition, the other party may require the introduction, at that time, of any other parts that in fairness ought to be considered at the same time. The rationale is based on the misleading impression created by taking matters “out of context” and the inadequacy of repair work when delayed to a point later in the trial.

Objections to the Taking of a Deposition

Errors that could have been avoided are “waived” if a prompt objection is not made, i.e., errors inthe notice of deposition, a party’s conduct at the deposition, the form of a question.

For example, a question that asks, “When did you stop drinking?” is objectionable as to form because it assumes facts not in evidence. But a prompt objection could correct the problem by having counsel ask two separate questions. [1] “Did you drink on the night in question?” “Yes” [2] “When did you stop?” “Around midnight.”

A party cannot defer an objection to this question until trial because it could deprive the examinerof an opportunity to reform the question. Consequently, if no objection is made to the form of the question, the objection is waived.

In comparison, objections to the competency of a witness or to the relevance of testimony are “preserved” until trial.

Form of Presentation

A party must provide the court with a transcript of any deposition testimony the party intends to offer as evidence.

In a jury trial, deposition testimony offered for any purpose (other than impeachment) must be presented in audio or video form, if available. A party expecting to use an audio or video recording of deposition testimony is required to provide the other parties with a transcript in advance of trial.


To sum it up, a “transcript” must be provided: (i) to the court; (ii) to the other parties when an audio or video recording of a deposition is being offered as substantive evidence; and (iii) when a deposition is being used for impeachment.

Depositions by Written Questions

Similar to oral depositions, a party may take the deposition of any person by written questions. The questions are sent to opposing counsel who in turn submits questions for cross-examination. The entire list of questions is then sent to the officer who will take the deposition. The officer reads the questions to the deponent, but the answers are given orally. FRCP 31

The main reason for using this method is to depose a non-party who cannot be compelled to attend because she lives or works more than 100 miles from where the deposition is to take place.

Keep in mind the ten-per-side limit applies to both oral and written depositions. Similarly, no person can be deposed more than once, whether orally or by written questions._____________________________________________________________________________________

Quick Comparison of Three Similar Methods of Discovery

Oral Depositions Oral Questions Oral Answers Both Parties and Non-Parties

Written Depositions Written Questions Oral Answers Both Parties and Non-Parties

Written Interrogatories Written Questions Written Answers Only Parties_____________________________________________________________________________________

Written Interrogatories to “Parties”

Interrogatories are a series of written questions asking a party for certain information. Each partyis allowed to serve up to 25 interrogatories upon any other party without court intervention. Leave of court is required to serve a larger number. FRCP 33 * This concept was just tested.

Parties cannot evade this numerical limitation by joining “subpart” questions that seek information about a different subject. However, a question containing subparts about the same matter should be treated as a single interrogatory.

For example, an interrogatory that asks the time, place, and persons present at a certain event should be treated as a single interrogatory; whereas a subpart question that asks about an “unrelated” matter is counted as a separate question.

The reason why a party would choose to serve written interrogatories on another party is it is an “inexpensive” way of obtaining important information.

Duty to Investigate

Every party has a duty to provide full and complete answers to each interrogatory. A party must not only answer on the basis of personal knowledge but must consult with any individuals such as employees or agents who might have information that would be important in making a response.


For example, a parent corporation must respond to written interrogatories on behalf of subsidiaries or affiliate companies because such information is under its control. Brunswick Corp. v. Suzuki Motor Co., 96 F.R.D. 684 (E.D. Wis. 1983).

An Interrogatory May Ask for an Opinion

An interrogatory may ask for an opinion that calls for the application of law to fact. For example, the plaintiff may ask the defendant, “Were you negligent in driving your car at the time of the accident?” Of course, the defendant would be free to answer, “No.”

Option to Produce Business Records Instead of Answering the Question

When the answer to an interrogatory can be found in the answering party’s business records, the answering party may offer their records for inspection in lieu of providing an answer if the burden of finding the answer will be the same for either party. This provision places the burden upon the party that will benefit from the information.

The answering party has a duty to clearly specify where the answer can be found and may be required to provide technical support if necessary. This prevents the interrogating party from having to search for a needle in a haystack. * This is the way the examiners are most likely to test this concept.

For example, the answering party may not send the other party a “mass of records” as to which research is feasible only for one familiar with the records.

Requests for the Production of Documents and Other Things

A party may request another party produce for examination any relevant documents, electronically stored information, or tangible items in that party’s custody or control. A party may also request permission to inspect another party’s land. Such requests must describe with “reasonable particularity” each item to be inspected. FRCP 34

For example, the car that was involved in the accident is subject to examination; so is the assembly line where the plaintiff’s injuries occurred; a request to produce all documents, recordings, and e-mails that relate to the meeting on Thursday January 29, 2015 is discoverable; even Lance Armstrong’s urine sample alleged to have tested positive for drugs may be “tested” by opposing counsel.

The rule mandates “very broad” production requests and provides a relatively easy means by which a party may copy documents and inspect property of another party. No court order is required. The rationale is court intervention is unnecessary until a party objects to the production request.

The Custody or Control Requirement

A party cannot avoid production by giving documents or other property to a third person even if that person is the party’s attorney. Control means the party has a “legal right” to the property.

For example, in a contracts dispute, a merchant turned over to his attorney all documents relating to the deliveries made to his shop. – Even though the merchant does not have “possession” over the documents, he has control over them because he has the right to demand the documents back.

Documents Produced as Requested or as They are Kept in the Usual Course of Business


A party cannot deliberately bury useful documents among a mass of irrelevant information. The rule aims at preventing a “document dump” in an attempt to work over the requesting party. Thus, documents must be produced as requested or as they are kept in the usual course of business.

For example, the responding party cannot offer to allow the requesting party to comb through four oversized cabinets in which the documents are scattered throughout.

Producing Documents and Electronically Stored Information

Additionally, the responding party must produce the information in a form in which it is ordinarily maintained “or” in a reasonably usable form. The rule places emphasis on the fact that a party need not produce the same electronically stored information in more than one form.

For example, a plaintiff served a request to produce certain electronically stored information, but did not specify the form in which it was to be produced. The defendant “converted” word documents into “reasonably usable” PDF files. Realizing this format deprived it of the metadata, the plaintiff moved to compel production of the data in its “native” (originally maintained) form. – In this case, the defendant was not required to produce the same electronically stored information in “more than one form” given that it had already produced it in a reasonably usable form.

Compare: If the defendant had converted the electronically stored information from its native form to a different one that makes it more difficult or burdensome to use, the court would have granted the plaintiff’s motion to compel. White v. Graceland College, 586 F. Supp. 2d 1250 (D. Kan. 2008).

MBE TIP: Remember these examples, because you will definitely see them again. There recently has been extensive litigation concerning the use of “metadata” and the form in which electronically stored information is supplied. – If the requesting party does not specify the form for producing electronically stored information, the responding party must produce the information: (1) as it is kept in the usual course of business; and (2) in a form in which it is “ordinarily maintained” or in a “reasonably usable” form. But this does not mean the responding party is free to convert it from the form in which it is ordinarily maintained to a different form that makes it “more difficult or burdensome” for the requesting party to use. The key is both parties must play nice! * This concept was just tested.

Subpoena (Non-Parties)

A subpoena (also referred to as a subpoena duces tecum) is a court order requiring a non-party toattend trial or to produce documents, electronically stored information, or permit an inspection of land under its control.

For example, in a suit by a business owner against an employee for embezzlement, the business owner may ask the court to issue a “subpoena” ordering the employee’s bank to produce his bank records.

A subpoena to compel the production of documents by a non-party is the equivalent of a request for the production of documents by a party. * This concept was just tested.

To obtain documents from a party Request for the production of documents & other things

To obtain documents from a non-party Subpoena duces tecum

Non-parties are entitled to the same protections as parties with regard to demands for discovery, e.g., a non-party need not produce electronically stored information if “significant expense” would result.


Notice to Other Parties “Before” Serving a Subpoena for Documents

Before a subpoena (for documents) is served, a copy must be given to each party. The purpose ofthis requirement is to enable the other parties to object or to serve a subpoena for additional materials.

Geographical Limits of a Subpoena to Command Attendance at a Trial or Deposition

A subpoena may only command a person to attend a trial or deposition within 100 miles of wherethat person lives or works. FRCP 45(c)

Limitations within the Same State

A non-party may be required to travel more than 100 miles for “trial” within the state where she lives or works if she would not incur substantial expense. But when travel over 100 miles imposes “substantial expense” on the non-party, the court can compel attendance upon payment of expenses.

In other words, a non-party may be required to travel “more than 100 miles” for trial in the state where she lives or works if: (i) she does not incur substantial expense; or (ii) her expenses are paid.

In comparison, a party may be compelled to attend a trial or deposition anywhere in the state where the “party” lives or works. The rule is premised on the fact the court has acquired personal jurisdiction over the party and its reach extends throughout the state.

The 100-mile limit is only extended when a non-party is compelled to attend a trial in the state; whereas the 100-mile limit is extended for parties compelled to attend a trial or a deposition in the state.

For example, a non-party, who lives and works in San Diego, can only be required to attend a trial in Sacramento if she does not incur substantial expense or if her expenses are paid.

For example, a party, who lives and works in San Diego, can be required to attend a trial or deposition in Sacramento regardless of expense.

Compare: A person (whether a party or a non-party), who lives and works in San Diego, cannot be compelled to attend a deposition or trial in New Orleans under any conditions.

Protecting a Person Subject to a Subpoena – Avoiding Burdens and Costs

A subpoena cannot impose an undue burden or expense on a person. The court must quash or modify a subpoena that requires disclosure of privileged information, compliance beyond the geographical limits (more than 100 miles from where the person lives or works), or subjects a person to an undue burden.

For example, it would be unduly burdensome to compel a witness to attend trial if the witness is known to have no personal knowledge of matters in dispute and would incur substantial travel expense.

Furthermore, if a subpoena requires disclosing a trade secret or other confidential information, or if it compels an unretained expert to give an opinion, the court may condition compliance of the subpoena on a showing of “substantial need” and ensuring that the person is reasonably compensated. This provision provides protection for an expert’s intellectual property.

For example, a subpoena cannot be used to compel an expert, who is not assisting any party in the case, to testify about matters within his area of expertise since that may deny him the opportunity to


bargain for the value of his services. Arguably the compulsion to testify can be regarded as a “taking” of intellectual property. Therefore, the rule establishes the right of such persons to withhold their expertise unless they are reasonably compensated.

Compare: An expert in automobile accidents just happened to witness a collision. – The expert can be compelled to testify about what he saw, without compensation, just like any other witness.

Physical and Mental Examinations

The court may order a “party” whose mental or physical condition is in controversy to submit to a physical or mental examination. The rule is most commonly invoked to allow the defendant to obtain anindependent medical examination of the plaintiff in cases involving claims for personal injury. FRCP 35

For example, a physical examination may be ordered when a plaintiff sues for personal injuries; amental exam may be ordered where a close relative sues for negligent infliction of emotional distress; anda blood test may be ordered in a suit to determine paternity.

Compare: A woman severely injured her hand in a copy machine. Her complaint alleges physical injury. The defendant filed a motion to compel the woman to appear for an examination by both a physician and a psychologist of the defendant’s choosing. – The court will not order the woman to submitto a “mental” exam because the defendant has not shown her mental condition is in controversy.

* This concept was just tested.Court Order and Good Cause Required

Due to the intrusive nature of such examinations, a physical or mental exam is available only by court order upon a showing of good cause. The reason for judicial intervention is based on the need to protect a party’s privacy interests.

Custody or Control

The court may also order a party to use good faith efforts to produce a person who is in her custody or control. For example, a parent or guardian suing to recover for injuries to a minor may be ordered to produce the minor for examination.

Any Certified or Licensed Professional May Conduct the Exam

The exam may be conducted by any person who is suitably licensed or certified including doctors, dentists, or occupational therapists. The rule is not limited to physicians or clinical psychologists.

Waiver of Privilege – The Rule of Reciprocity

The party who is examined is entitled to receive a complete and detailed copy of the examiner’s report. But once the examined party requests a copy of that report, she must turn over all prior reports she has from her own examining physician. FRCP 35(b)

In other words, by making the request, the party who has submitted to the exam waives any privilege regarding the testimony of anyone who has examined her concerning that same condition.

No Contempt Power by the Court


Out of respect to the personal rights of parties, the court’s contempt power may not be used to force a party to submit to an examination. Thus, a party who refuses to appear for an examination may notbe held in contempt, but facts that could have been proved by the exam can be deemed established.

MBE TIP: Unlike most other methods of discovery, physical and mental examinations and discovery that exceeds the numerical limits on depositions or interrogatories require a court order and a showing ofgood cause.

Requests for Admission

A party may be served with a request to admit certain facts or the application of law to fact, as well as the genuineness of a document. Admissions are sought to narrow the issues at trial. FRCP 36

For example, a request may ask a party to admit an employee acted in the scope of his employment; or the premises on which the accident occurred was under the control of the defendant; or the posted speed limit was 65 mph.

A party may also be asked to state an opinion or to admit matters that are in dispute.

Answers

An answer may admit, deny, or state in detail why an answer cannot be made. The answering party may assert a “lack of knowledge” but only after making a reasonable inquiry of any information that is readily obtainable. The key is the party must answer in good faith.

If a party fails to respond within 30 days, the matters set out in the request are deemed admitted.

Effect of an Admission – Binding Only in This Proceeding

An admission in response to a request for admissions is conclusive proof of the facts admitted. No evidence may be introduced to refute them. But an admission under this rule cannot be used against a party in any other proceeding. Thus, it is an admission for purposes of the pending action only.

Withdrawing or Amending an Admission

The court may permit an admission to be withdrawn or amended if it would help resolve the action on the merits and would not prejudice the opposing party. This is most likely to occur when an admission is no longer true because of changed circumstances or through honest error.

For example, if a party learns he had grounds to contest facts previously admitted, that party may move to withdraw the admissions. Judges prefer to see cases resolved on their merits rather than on mistaken concessions.

Sanctions for the Failure to Admit

The court will not award sanctions for denying a matter that is genuinely in issue. Sanctions will generally be awarded only when there is no good reason for a failure to admit, i.e., bad faith refusal.

Protective Orders (Preventing Harassment by Limiting Discovery)

Discovery is sometimes used to harass or oppress an opposing party. Therefore, federal courts have the discretion to “protect” any person from oppression or undue burden or expense by issuing a


protective order. In deciding a motion for a protective order, the court will “balance” the value of the information sought against the hardship it would impose. FRCP 26(c)

For example, a court may allow the disclosure of athletes’ drug tests if their names are not revealed; but may issue a protective order to safeguard trade secrets or membership information.

Parties commonly seek protective orders against unduly burdensome or invasive discovery. Discovery can be unduly burdensome because of location, e.g., a deposition is scheduled at a “distant” location. It can be invasive when it probes into “confidential” matters, e.g., customer lists.

When a party’s purpose is to embarrass or harass an opposing party, the court may limit or, in the most egregious cases, deny discovery such as when a party seeks a competitor’s trade secrets. In those cases, the court will generally conduct an “in-camera” inspection (in the privacy of a judge’s chambers) of the sensitive material and determine to what extent discovery is proper.

Additionally, a court may limit discovery only to certain types of issues. For example, if the issueis whether the court has jurisdiction over the defendant, discovery may be limited to that issue.

Good Faith Attempt to Confer

Before moving for a protective order, a party must make a good faith attempt to resolve the matter with the other party.

Public’s Right to Access – “Discovery” is Not Public Information

When claims of confidentiality involve information developed during discovery, courts can issue confidentiality orders when there is a special need to do so.

For example, if a company sues a competitor for appropriating its trade secrets, the court could order that any information obtained “during discovery” not be revealed to the public. Even though this is a prior restraint, it is “constitutional” and will satisfy strict scrutiny.

Compare: In suits involving “dangerously” defective products, manufacturers are unlikely to obtain a court ordered confidentiality agreement in order to avoid potential plaintiffs from bringing suit. The rationale is simple – members of the public might be at risk.

The notion of a public trial does not automatically prevail at the discovery stage. The U.S. Supreme Court has ruled there is no First Amendment right to publicize information gained through discovery so a protective order preventing dissemination of discovery information is constitutional. Seattle Times Co. v. Rhinehart, 467 U.S. 20 (1984). * This concept is highly likely to be tested.

MBE TIP: The rule prohibiting the public’s right to access only applies to information obtained during discovery.

A motion to compel is the opposite of a protective order.

When a party objects to a discovery request the party may seek a protective order.

When a party seeks a response to discovery the party may file a motion to compel.

Motion to Compel


When the discovery process breaks down, a party may file a motion to compel discovery. This normally occurs when a corporation fails to designate an agent, an opposing party objects to a discovery request, responds evasively or incompletely, or refuses to answer a specific question. FRCP 37(a)

Immediate Sanctions for a “Complete” Refusal to Respond

When a party completely fails to answer a set of written interrogatories, or completely fails to respond to a request for the production of documents or an inspection of land, or fails to attend his own deposition, the other party may request sanctions without seeking a motion to compel. FRCP 37(d)

In other words, when a party simply refuses to respond at all, the requesting party may move directly for sanctions. This rule deals with the “complete failure” to respond to a discovery request.

For example, in an action against a corporation, the plaintiff properly noticed a deposition but theagent designated by the corporation failed to appear. – In this case, the plaintiff may seek sanctions without moving for an order compelling discovery.

Good Faith Attempt to Confer

Before moving for an order compelling discovery or for sanctions, the party must make a good faith attempt to resolve the matter with the other party. A party will not be awarded any expenses that could have been avoided by conferring with opposing counsel.

Payment of Expenses for the Motion to Compel

The court is required to award the prevailing party any expenses incurred in making or defending a motion to compel or any expenses caused by the complete failure to respond unless the losing party’s position was substantially justified or there are “other circumstances” that make an award of expenses unjust. A party’s position is “substantially justified” if reasonable people could differ on the outcome.

For example, a plaintiff served a defendant with a request to produce documents. The defendant objected “in good faith” on the grounds of privilege. After attempting to resolve the matter, the plaintiff filed a motion to compel. The court found the documents were not privileged and ordered their production. – In this case, the court is unlikely to award the plaintiff expenses in making the motion because it appears the defendant’s position was substantially justified.

For example, in an action against a corporation, the plaintiff properly noticed a deposition but theagent designated by the corporation failed to appear because he was involved in a car accident on the wayto the deposition. – In this case, the court should not impose sanctions on the corporation.

In sum, expenses will only be assessed if a party behaved unreasonably in the discovery process.

Note: The rule regarding the payment of expenses also covers situations where the requested information is produced after the motion to compel is filed but before the hearing.

Overview of the Process

If a party actually responds to a discovery request but does so incompletely: (1) the parties must make a good faith attempt to resolve the matter; (2) if there is no resolution, the party seeking discovery may file a motion to compel; (3) the court will order the losing party to pay the winning party’s expenses incurred in making the motion unless the losing party’s position was substantially justified.


If a party fails to respond at all: (1) the parties must make a good faith attempt to resolve the matter; (2) if there is no resolution, the party seeking discovery may move for immediate sanctions; (3) the court will order the party failing to act to pay any expenses caused by the failure unless the failure was “substantially justified” or an award of expenses is unjust.

Appropriate Court to File a Motion to Compel

A motion for an order compelling discovery directed to a party must be made in the court where the action is pending. However, a motion for an order to a nonparty must be made in the court where the discovery will be taken. FRCP 37(a)(2)

The rationale is the court where the action is pending has jurisdiction over the “parties” to the case, but only a court having personal jurisdiction over a non-party can issue orders directing the non-party to make further responses to discovery. Makes sense doesn’t it?

Motions Directed to a “Party” Made in the court where the action is pending.

Motions Directed to a “Non-Party” Made in the court where discovery will be taken.

Sanctions

Courts have wide discretion to impose a variety of sanctions including: (i) directing that certain facts be taken as established; (ii) excluding evidence; (iii) striking parts of the pleadings; or (iv) dismissing the case or rendering a default judgment.

Obviously, dismissal and default are the most severe sanctions and are generally ordered only when there has been a serious abuse of discovery and the party acted willfully or in bad faith.

For example, the “constant” hindering of discovery efforts; “unexcused” failures to appear for a deposition; and the “willful” failure to provide discovery pursuant to court order justify dismissal.

Still, a court will not dismiss a case or enter a default judgment if other less severe sanctions are available. Sanctions must be proportionate to the offense. Overly harsh sanctions are subject to attack on due process grounds.

For example, the routine destruction of some personnel files in an employment discrimination case does not justify an entry of default if other, less severe sanctions are available.

MBE TIP: The type of sanction applied by the court depends upon the seriousness of the violation.

Finally, a party who fails to comply with a court order may be required to pay the other party’s costs of seeking sanctions unless the defiant party was “justified” in refusing to obey the order.

Contempt of Court

A person can only be held in contempt for the failure to obey a court order. However, a person may not be held in contempt for refusing to submit to a court ordered physical or mental examination. The reasoning is based on a person’s right to privacy.

MBE TIP: The key to solving the sanctions riddle is to ask whether the party acted “reasonably” and in good faith. The more egregious the conduct, the more likely a court is to award sanctions. But if a party


had a good faith reason for not responding to a discovery request, then the court is unlikely to award sanctions. It’s just that simple!

Electronically Stored Information

The ordinary operation of computer systems creates a risk that a party may lose potentially discoverable information without culpable conduct on its part. For that reason, sanctions cannot be imposed for loss of electronically stored information resulting from the routine, good-faith operation of an electronic information system. FRCP 37(e)

The good faith requirement means a party must prevent its systems from continuing to destroy data that it is required to preserve.

MBE TIP: Because of the recent wave of technological advancement in our society and the hints in the legislative history, pay close attention to any matter that deals with electronically stored information.

The Duty to Supplement Responses

A party must supplement a previous discovery response in a timely manner if the party or his attorney learns the response is incomplete or incorrect. FRCP 26(e)

There is, however, no obligation to provide information that has been made known to the other party, such as when a witness not previously disclosed is identified during the taking of a deposition.

Sanctions for Failing to Supplement an Earlier Response

A common sanction for the failure to supplement an earlier response is the exclusion of the withheld information at trial. The court may also inform the jury of this failure.

For example, if the identity of a witness should have been disclosed in a supplemental response, the court will prevent the guilty party from calling the witness to the stand if the failure was willful.

Mandatory Pretrial Disclosures

Thirty days before trial, the parties must exchange: (i) the name of each witness the party expects to call; (ii) the name of each witness the party may call if the need arises; (iii) any evidence the party expects to offer; and (iv) any evidence the party may offer if the need arises. The rule requires a separate listing of each. The reason for this rule is to simplify and streamline the trial. FRCP 26(a)(3)

Additionally, a party must indicate which witnesses’ testimony will be presented by deposition and must provide the court with a transcript of the relevant portions.

After the required exchange, a party must promptly file any evidentiary objections or they are waived. The rule does not require disclosure of evidence to be used solely for impeachment.

F. Adjudication Without a Trial

Offers of Judgment

Before trial, a defendant may make an offer of judgment. If the plaintiff rejects the offer and obtains a less favorable judgment, the plaintiff must pay the “costs” incurred after the offer was made.


The purpose of this rule is to encourage settlement. FRCP 68 * This concept was recently tested.

For example, after a plaintiff filed a civil rights action against a defendant, the defendant served the plaintiff with an offer of judgment for $40,000. The offer was not accepted. At trial, the plaintiff obtained a judgment of $20,000. – In this case, the plaintiff must pay the costs incurred after the offer wasmade.

When liability has been determined but damages remain to be decided, the defendant may make an offer of judgment before the hearing to determine damages. In other words, the rule applies to offers made by the defendant in a bifurcated trial, after liability has been determined.

The rule does not apply if the defendant ultimately prevails at trial. For the rule’s cost-shifting provision to apply, the plaintiff must prevail at trial. Delta Air Lines v. August, 450 U.S. 346 (1981).

For example, a plaintiff sued a defendant in federal court for $60,000. The defendant made an offer of judgment in the amount of $450. The offer was refused. The case was tried and the plaintiff lost. – In this case, the defendant cannot obtain costs because the plaintiff did not prevail at trial. The rule’s cost-shifting provision does not apply when judgment is entered in favor of the defendant.

Costs Include Attorney’s Fees Only When the Statute So Provides

Where the underlying statute defines costs to include attorney’s fees, attorney’s fees are to be included as “costs” for purposes of the rule. Marek v. Chesney, 473 U.S. 1 (1985).

For example, a plaintiff sued under a statute that provides, “a prevailing party may be awarded attorney’s fees as part of costs.” Prior to trial, the defendant made an offer of judgment for $100,000, expressly including costs in the offer. The offer was not accepted. At trial, the plaintiff recovered $50,000. – In this case, the plaintiff is not entitled to attorney’s fees because the underlying statute included attorney’s fees “as a part of costs.”

Alternative Dispute Resolution

Parties can resolve their disputes by means other than trial. The most common “alternative” dispute resolution devices used are mediation, arbitration, and summary jury trials.

Mediation

Mediation is an informal procedure where a neutral person helps the parties come to a solution. The mediator does not have decision-making power. She is more of a peacemaker. The goal of mediation is to assist the parties in reaching an agreement. If the parties do reach an agreement, the agreement, like any other contract, is legally binding.

Arbitration

Arbitration is a faster and less costly version of trial. Unlike mediation, the arbitrator actually decides the case and designates a winner. Generally, parties agree to arbitration. If the parties have contracted that the arbitrator’s decision is binding, the doctrines of res judicata and collateral estoppel apply.

Under the Federal Arbitration Act, contractual agreements to submit to arbitration are valid and enforceable. In fact, the Act preempts state law. 9 U.S.C. § 2 (2015).


For example, a contract that requires a consumer to submit any disputes to arbitration rather than filing a class action lawsuit is valid despite conflicting state law. AT&T Mobility v. Concepcion, 563 U.S. 321 (2011).

Summary Jury Trial

In a summary jury trial, the lawyers “summarize” the case to a small test jury. The jury reaches a non-binding verdict. Based on that verdict, both parties get a sense of how a “real” jury will decide the case. This helps facilitate settlement.

For summary jury trials, the two points of emphasis are the verdict is advisory rather than binding, and because a summary jury trial is a settlement procedure, it is not open to the public.

KEY POINTS: If the plaintiff rejects an offer of judgment and obtains a less favorable award, the plaintiff must pay the “costs” incurred after the offer was made. – The rule does not apply if the defendant ultimately prevails. – Where the underlying statute defines costs to include attorney’s fees, attorney’s fees are to be included as costs. – Offers of judgment can only be made by a party defending against a claim. – Arbitration agreements are valid and enforceable.

G. Pretrial Conference and Order

Not a testable area.


IV. JURY TRIALS

A. Right to Jury Trial

The Seventh Amendment preserves the right to a jury trial in federal courts in suits at law where the amount in controversy exceeds $20. Thus, a “federal” court must permit a jury trial in diversity cases even if state law would deny such a right. The Seventh Amendment’s right to a jury trial has not been incorporated to the states.

For example, in a diversity action in federal court, a plaintiff sued a defendant for damages for breach of contract and requested a jury trial. State law provides that such disputes must be tried to a judge. – In this example, the court must grant the plaintiff’s request for a jury trial because the Seventh Amendment preserves the right to a jury trial in actions at law in federal courts. Even under an Erie analysis, rules that derive from the U.S. Constitution always take precedence over state law in federal court.

Law vs. Equity

The right to a jury trial is only available in suits at law. Thus, if there are only equitable issues, there is no right to a jury trial. In order to determine whether a claim is legal or equitable, courts look at whether the issue resembles a suit at law or equity in 1791 – the time the amendment was adopted. However, greater emphasis is to be given to the remedy sought.

For example, a claim for damages is legal; an injunction is equitable.

When a case presents both legal and equitable claims, the court must first try the legal claim so as to preserve the right to a jury trial on such issues. * This concept and the case directly below were just tested.

For example, a plaintiff sued for equitable relief. The defendant counterclaimed for damages and demanded a jury trial. – Because the case presents both legal and equitable claims, the court must allow the jury to decide the legal claims first. Beacon Theatres, Inc. v. Westover, 359 U.S. 500 (1959).

Moreover, where the plaintiff joins legal and equitable claims, and the equitable claims dominate,the court must grant a party the right to a jury trial.

For example, a plaintiff sued a defendant for failure to make payments due under a trademark licensing contract. The plaintiff sought an injunction against the defendant’s continued use of the trademark and an accounting for the sum owed. – Even though the equitable claim dominated and the legal issue was incidental to the case, the right to a jury trial exists because the claim requests a money judgment and is unquestionably legal. Dairy Queen, Inc. v. Wood, 369 U.S. 469 (1962).

Right to a Jury Trial damages, payment of fines, statutory damages, civil(Legal Claims) penalties, back wages, where there are both legal and

equitable claims even if the equitable claims dominate, interpleader, class action, shareholder derivative suits

No Right to a Jury Trial injunctions, specific performance, foreclosure of a(Equitable Issues) mortgage, reformation of a contract


MBE TIP: The Supreme Court has been adamant about preserving the right to a jury trial in federal court. Therefore, in cases of doubt, err on the side of granting a party the right to a trial by jury.Demand for a Jury Trial

Any party may demand a jury trial by serving the other parties with a written demand – which may be included in a pleading — no later than 14 days after the pleadings have closed. FRCP 38

For example, the timely filing and serving of a complaint that includes a jury trial demand is proper. In short, a jury demand must be served on the parties and filed with the court.

Failure to file a timely demand constitutes a waiver of that party’s right to a jury trial. However, the court still has discretion to order a jury trial.

If a party amends its pleading to inject a legal issue (presumably in good faith) where none had been raised before, the 14 day clock starts anew.

A proper demand for a jury trial may be withdrawn only if all parties consent.

KEY POINTS: In federal court, a jury trial is required for any legal claim, i.e., one seeking damages. If there is any claim or defense in a case that would be characterized as legal, it must first be tried to a jury. – A demand for a jury trial must be filed and served within 14 days after the pleadings have closed and may be withdrawn only if all parties consent.

B. Selection and Composition of Juries

Selecting Jurors – Peremptory Challenges and Challenges “for Cause”

All jurors must be selected at random from a fair cross section of the community. Voir dire is the questioning of potential jurors. It is intended to expose biases or interests that would disqualify them for cause. Usually parties are given unlimited challenges for cause.

For example, during voir dire, a potential juror stated he had been an employee of the defendant’scompany and still owned several hundred shares of its stock. – In this case, the juror may be struck “for cause” because he is presumed to be biased because of his financial interest and relationship to the company.

A challenge for cause requires the court’s objective determination of bias or interest such that the potential juror cannot be expected to render a fair verdict. If the court finds that the potential juror is objectively biased, it must exclude the juror.

Examples of bias: the potential juror’s relationship to one of the parties, prejudice against one of the parties, stock ownership or other financial interest in the matter, or having worked for or having a spouse who worked for a party.

Peremptory challenges, on the other hand, permit a party to keep a person off the jury without a reason. Generally, a party will exercise a peremptory challenge to disqualify a potential juror because the juror has displayed a characteristic that is unfavorable to the party’s case, whether rational or not.

In federal court, each party is allowed three peremptory challenges. Of course, no party may use aperemptory challenge to exclude a person on account of race or gender.


Composition of Juries

In federal civil cases, a jury must consist of no more than 12 and no less than 6 members. Alternate jurors are not used. Furthermore, the verdict must be unanimous. FRCP 48

KEY POINTS: A potential juror may be removed “for cause” if she is biased against a party. Federal juries must have between 6 and 12 jurors and the verdict must be unanimous.

C. Requests for and Objections to Jury Instructions

The jury’s role is to decide issues of fact which usually relate to past events, whereas the judge must decide questions of law such as the meaning of a statute or what evidence to admit.

Requests for Jury Instructions

At the close of the evidence (or earlier) a party may provide, to every other party, the jury instructions it wants the court to give. Thus, each party has the right to propose appropriate jury instructions. – The judge may give the instructions to the jury before or after closing arguments, or both.

The court must inform the parties of its proposed instructions before instructing the jury and before closing arguments. The rationale is the attorneys need to know what the judge will say in the instructions so they can structure their closing arguments accordingly. FRCP 51

Objections to Jury Instructions

The court must give the parties an opportunity to object out of the jury’s presence before the instructions are delivered to the jury. This prevents sandbagging and permits the court to cure flawed instructions before the jury begins deliberations.

A party who objects to an instruction (or the failure to give an instruction) must do so on the record, stating distinctly the matter objected to and the grounds for the objection.

Remember, an objection is timely if it is made before the instructions are given to the jury.

Preserving a Claim of Error

A party may challenge the instructions on appeal only if the party timely objected. Failure to object on the record and before the instructions are given to the jury puts an end to the matter.

However, even if a party has not properly objected to the instructions, the appellate court may correct plain errors in the instructions. Plain errors affect “substantial rights” and are so egregious the trial court should have known them when she saw them, e.g., errors in the applicable burden of persuasion. FRCP 51(d)(2)

Because it is a pure issue of law, the appellate court decides the correctness of the instructions denovo (anew). Actual reversals on the basis of plain error are rare.

KEY POINTS: The court must inform the parties of its proposed instructions before instructing the jury and before closing arguments. Furthermore, a party must object to the instructions before they


are given to the jury. Even without a proper objection, the appellate court can correct plain errors, i.e., errors that affect substantial rights.

V. MOTIONS

A. Pretrial Motions, including Motions Addressed to Face of Pleadings, Motions to Dismiss, and Summary Judgment Motions

Pretrial Motions

A party can make several “pretrial” motions. Taking each one in chronological order, a defendantcan file a motion to dismiss in the answer or in a pre-answer motion. A motion for judgment on the pleadings is made after the pleadings have closed. Essentially, it is a delayed motion to dismiss. Finally, a party may file a motion for summary judgment which is generally made after discovery.

Motion to Dismiss In the answer or by pre-answer motion

Motion for Judgment on the Pleadings After the pleadings have closed

Motion for Summary Judgment After discovery

Motions to Dismiss (Motions Addressed to the “Face” of the Pleadings)

A motion to dismiss for failure to state a claim asks whether the party has stated a valid claim under the law. The motion is confined to the face of the complaint. A court will grant a motion to dismiss only if the complaint fails to set forth a cognizable claim or if the facts are insufficient to support the claim. FRCP 12(b)(6)

For example, a plaintiff filed a negligence action alleging only economic loss. – In this example, the court will grant a motion to dismiss because, under the law, the type of damages recoverable in a negligence action is limited to personal injury and property damage. Pure economic loss is not recoverable.

If extraneous matter is introduced on a motion to dismiss, the motion must be treated as one for summary judgment. The reason is to give the other party the chance to respond with evidentiary materialof its own. FRCP 12(d) * This concept was just tested.

For example, after being served with a copy of the complaint, the defendant filed a motion to dismiss. Attached to the motion were two affidavits and various exhibits. – Because the defendant submitted evidentiary materials in support of the motion to dismiss, the court must convert the motion into one for summary judgment.

Motion for Judgment on the Pleadings

After the pleadings are closed, a party may move for judgment on the pleadings. The standard forthis rule is the same as a motion to dismiss. The only difference is a motion for judgment on the pleadingsis made after the pleadings have closed; whereas a motion to dismiss is generally sought before the defendant files an answer to the complaint. FRCP 12(c)

Similar to a motion to dismiss, submission of materials outside the pleadings converts a motion for judgment on the pleadings into a motion for summary judgment.


For example, a party included affidavits and other materials in support of a motion for judgment on the pleadings. In this example, the judge must treat the challenge as a motion for summary judgment.

Summary Judgment HOT TOPIC

Summary judgment must be granted if the moving party is able to show there is no genuine dispute as to any material fact thereby entitling it to judgment as a matter of law. Essentially, the court determines whether there are any factual questions for the jury to decide. The purpose of summary judgment is to avoid unnecessary trials. FRCP 56(a)

MBE TIP: If the case can only be decided one way, summary judgment is proper.

The Moving Party has the Initial Burden

The moving party bears the initial burden of showing there is no factual dispute. The evidence will be construed in favor of the party opposing the motion. If the moving party fails to meet its burden, summary judgment cannot be granted even if the other party completely fails to respond.

For example, if there is any evidence in the record from which a reasonable inference could be drawn in favor of the opposing party, summary judgment is improper even if the opposing party never presents any evidence in support of his case.

If the Moving Party Meets Its Burden

If the moving party meets its burden, the burden then shifts to the opposing party to come forward with “some evidence” to show that a genuine dispute does exist. The opposing party cannot rely on the allegations in the pleadings since the essence of summary judgment is to go beyond the pleadings to determine whether a factual dispute exists.

In other words, when a motion for summary judgment is properly supported, the party opposing the motion must respond with evidence of specific facts showing there is a genuine dispute. If the opposing party fails to meet this burden, summary judgment must be granted for the moving party.

For example, a defendant filed a properly supported summary judgment motion. In response, the plaintiff cited to her pleadings. – In this example, the court should grant summary judgment because the defendant has met its burden and the plaintiff has not come forward with any evidence to show that a genuine dispute exists.

The Plaintiff’s Burden (The Party Who Would Have the Burden at Trial)

To prevail on a motion for summary judgment, the plaintiff must establish all elements of the claim and produce evidence that is so strong no reasonable jury could find for the defendant.

“Heightened” Burden Must be Applied in Ruling on Motions for Summary Judgment

In ruling on motions for summary judgment, the court must use the standard of proof that would apply at trial.

For example, in defamation actions, public figures and public officials are required to prove actual malice by “clear and convincing” evidence. Therefore, in ruling on motions for summary


judgment, the trial court must use the clear and convincing standard in determining whether actual malice exists. Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986).

The Defendant’s Burden (The Party Who Would Not Have the Burden at Trial)

A defendant can obtain summary judgment by showing the plaintiff is unable to prove an essential element of the claim. The defendant cannot state a blind assertion that no such evidence exists. The defendant must point to those portions of the record that show a lack of evidentiary support.

For example, in a wrongful death action, the defendant pointed out the plaintiff had failed in answers to interrogatories to identify any witnesses who could testify that the decedent had been exposed to its products. The defendant did not produce any evidence or submit any affidavits in support of its position. – In this example, the court may grant summary judgment for the defendant because the defendant has satisfied its burden by pointing to those portions of the record that show a lack of evidentiary support. Celotex Corp. v. Catrett, 477 U.S. 317 (1986).

For example, a plaintiff alleged a defendant made defamatory comments about him in front of two co-workers. In moving for summary judgment, the defendant submitted affidavits by both co-workerswho denied the comments were made. – In this case, the court should grant the defendant’s motion because the defendant has supported his motion with evidence completely negating the existence of a “publication” – an essential element of a defamation claim and the plaintiff has no evidence from which areasonable jury could find in his favor. Dyer v. MacDougall, 201 F.2d 265 (2d Cir. 1952).

In cases where the defendant bears the burden at trial (affirmative defenses), in making a motion for summary judgment the plaintiff is required to cite to evidence negating an element of the defense.

Supporting Factual Position with Admissible Evidence

A party may use affidavits, depositions, answers to interrogatories, or other materials to support its position. A party may even rely on its own self-serving affidavit. Because summary judgment is in effect a preview of the evidence the parties intend to introduce at trial, a party can only support its position with admissible evidence.

Remember, a party may not rely on the allegations in the pleadings to defeat a summary judgment motion.

Affidavits

Even though affidavits cannot be introduced into evidence because they are hearsay, affidavits may be considered in summary judgment motions if the affiant would be able to testify at trial.

An affidavit must be based on the affiant’s personal knowledge and set out facts that would be admissible in evidence. When an affidavit contains inadmissible hearsay, the court will disregard that part. The entire affidavit need not be stricken.

For example, an affidavit by an eyewitness is based upon personal knowledge, and if the case went to trial, the eyewitness would be able to testify.

Compare: The plaintiff in a negligence action moved for summary judgment, submitting an affidavit by a third party who averred she had heard some people talking hours after the accident, who all


claimed the defendant was driving recklessly. – In this case, the court will deny the motion because the affidavit contains “inadmissible” hearsay from a witness without personal knowledge.

Credibility

Credibility assessments, choices between conflicting versions of the events, and the weighing of evidence are matters for the jury, not the court. If there is any evidence in the record from which a reasonable inference could be drawn in favor of the opposing party, summary judgment is improper.

Before a party can challenge an affiant’s credibility, the party must put the affiant’s credibility “inissue” by showing the affiant is biased, a related family member, has an interest in the litigation, or by pointing to anything else that might impeach the affiant at trial.

For example, a plaintiff offered two affidavits by “neutral” witnesses in support of her motion forsummary judgment. The defendant responded by arguing the witnesses’ credibility is so vital the case should proceed to trial where their demeanor could be observed. – In this case, the court granted the plaintiff’s motion because the defendant did nothing to cast doubt on the witnesses’ credibility. A bare allegation that the witnesses are not to be believed is not enough. Lundeen v. Cordner, 354 F.2d 401 (8th Cir. 1966).

State of Mind

Summary judgment is inappropriate in cases where motive and intent play leading roles because these issues cannot be resolved without observing the demeanor of the witness in order to evaluate credibility. Thus, the best way to assess a person’s intent or state of mind is to have that person appear at trial and be cross-examined.

For example, a taxpayer attempted to prove that an overseas trip was intended primarily for business purposes. In support of his motion for summary judgment, the taxpayer presented his own affidavit attesting to his “state of mind” when embarking on the trip. The government had no evidence to refute the affidavit. – In this case, summary judgment should be denied because it is unfair to expect the government to obtain countering information. The government should be given the right to cross-examinethe taxpayer at trial. Cross v. United States, 336 F.2d 431 (2d Cir. 1964).

The Court May Grant Summary Judgment “On Its Own”

The court may grant summary judgment on its own even if it’s for the non-moving party. But before the court grants summary judgment on its own, the court must give the losing party notice and a reasonable time to respond.

When Facts Are Unavailable to the Nonmovant

Generally, a party will move for summary judgment after discovery, but may do so sooner. If the responding party is currently unable to obtain the information necessary to show that a dispute exists, the court may defer the motion and allow the responding party additional time to take discovery. The party must “specifically state” the reasons why more time is needed, e.g., witness is out of the country.

Partial Summary Judgment


The court may grant “partial” summary judgment by disposing of less than the entire claim, e.g.,the court may grant summary judgment on the issue of liability, but deny it on the issue of damages.

Both Parties May Move for Summary Judgment

If both parties move for summary judgment, the court may deny both motions.The Right to Appeal an Order Granting or Denying Summary Judgment

The denial of a motion for summary judgment is not “immediately” appealable since the case continues. Thus, it is not a final judgment from which an appeal can be taken. Similarly, if summary judgment is granted on less than the entire claim, the order is not immediately appealable because the “entire case” has not yet been resolved.

However, if the court grants summary judgment as to the entire case, the case is over and is therefore immediately appealable.

Because the trial court’s ruling is made as a matter of law, the appellate court will review its decision de novo.

Compare to Judgment as a Matter of Law

The standard for summary judgment mirrors the standard for judgment as a matter of law becausein both situations the moving party must show that no reasonable jury could find against him. The two motions really only differ in timing, i.e., a “summary judgment” motion is generally made after discoverybut before trial; a “judgment as a matter of law” is made after the opposing party has been fully heard at trial.

B. Motions for Judgments as a Matter of Law (Directed Verdicts and Judgments Notwithstanding the Verdict)

Judgment as a Matter of Law (Directed Verdict)

Either party may move for a judgment as a matter of law after the opposing party has been “fully heard” on an issue. The motion must be made before the case is submitted to the jury and will be grantedonly if the court finds that no reasonable jury could find for the opposing party on that issue. Essentially, the judge takes the case away from the jury and decides the outcome as a matter of law. FRCP 50(a)

For example, the defendant can only make the motion after the plaintiff has been fully heard, i.e.,after the plaintiff completes her case-in-chief. Similarly, the plaintiff can only make the motion at the close of the defendant’s case.

Compare: The plaintiff cannot make the motion after the plaintiff has presented her case since the defendant has not yet been afforded an opportunity to present any evidence. The plaintiff must wait until the defendant has been “fully heard” on the issue.

The term “judgment as a matter of law” was historically known as a “directed verdict” and some courts still use that term today. Thus, the terms are interchangeable.

Standard (The Reasonable Juror Test)


The judge should grant a judgment as a matter of law if the evidence is so one-sided there can be but one reasonable conclusion. If reasonable minds could differ, the motion should be denied. In ruling on the motion, the court must consider the entire record. Reeves v. Sanderson, 530 U.S. 133 (2000).

The Moving Party Must Articulate the Basis for Judgment

The moving party must articulate the reason on which the motion should be granted. The purpose of this requirement is to give the opposing party an opportunity to correct any deficiencies in her case and to present any additional evidence before the case is submitted to the jury.

Compare to Summary Judgment

The primary difference between motions for summary judgment and motions for judgment as a matter of law are procedural. Summary judgment is made before trial and decided on documentary evidence; while motions for judgment as a matter of law are made at trial and decided on the evidence that has been admitted.

Renewed Motions for Judgment as a Matter of Law (Judgment Notwithstanding the Verdict)

After the jury renders a verdict, the losing party may make a “renewed” motion for judgment as a matter of law so long as that party previously moved for a judgment as a matter of law at some point during the trial. This is why it’s called a “renewed” motion. FRCP 50(b)

The renewed motion asks the judge to overturn the jury’s verdict because the verdict is irrational and unsupported by the evidence.

For example, after the plaintiff’s case-in-chief, the defendant moved for judgment as a matter of law. The judge denied the motion. After the trial, the jury returned a verdict in favor of the plaintiff. If thedefendant believes the verdict is based upon insufficient evidence, the defendant may ask the judge to overturn the verdict by making a “renewed” motion for judgment as a matter of law. The renewed motionmust be made on the same grounds as those previously advanced in the pre-verdict motion.

Motions for summary judgment, judgment as a matter of law, and renewed motions for judgment as a matter of law all apply the same legal standard, i.e., the court must grant the motion if the evidence isso one-sided that there can only be one “reasonable” conclusion.

Renewed Motions Must be Made on the “Same Grounds” as the Earlier Motion

Because a post-verdict motion is only a “renewal” of the earlier pre-verdict motion, it can be granted only on the same grounds advanced in the pre-verdict motion.

For example, in a breach of contract case, the defendant moved for judgment as a matter of law atthe close of the evidence on the grounds the contract never came into existence. The court denied the motion. After the jury returned a verdict for the plaintiff, the defendant filed a renewed motion arguing the plaintiff failed to introduce sufficient evidence of damages. – In this case, the court cannot grant the defendant’s motion because a post-trial motion for judgment can be granted only on grounds advanced in the pre-verdict motion. The grounds on which the defendant moved after trial (damages) are different than the grounds on which it moved for at trial (the existence of a contract).

The Losing Party Must Have Made a Motion for Judgment as a Matter of Law at Trial


The most important aspect of this rule is that in order to make a “renewed” motion for judgment as a matter of law after the verdict, the losing party must have previously made a motion for judgment as a matter of law at trial. * This concept was just tested.

MBE TIP: The two most important things to remember about “renewed” motions for judgment as a matter of law are: (1) the losing party must have previously moved for judgment as a matter of law at trial; and (2) the renewed motion must be based on the same grounds as those in the pre-verdict motion.

Nomenclature – The Old Names are Still the Same

A motion for “judgment as a matter of law” may be referred to as a directed verdict and a “renewed motion for judgment as a matter of law” may be called a judgment notwithstanding the verdict.

Failure to Move for a Renewed Judgment or for a New Trial

If a party fails to move for a renewed judgment as a matter of law or a new trial on the grounds advanced in the pre-verdict motion, that party is prevented from raising that issue on appeal. Unitherm Food Systems v. Swift-Eckrich, 546 U.S. 394 (2006).

For example, at trial, the defendant moved for judgment as a matter of law on the basis of insufficient evidence. The court denied the motion, and the jury returned a verdict for the plaintiff. The defendant did not renew its motion for judgment as a matter of law nor did it move for a new trial. – In this case, the defendant is prevented from raising “insufficient evidence” on appeal since the defendant failed to renew its pre-verdict motion and did not move for a new trial.

Combining a Renewed Motion for Judgment as a Matter of Law with a Motion for a New Trial

A renewed motion for judgment as a matter of law may be joined with a motion for a new trial. The examples below deal with situations where the verdict loser makes a renewed motion and requests a new trial in the alternative.

The Court Must “Conditionally” Rule on the Motion for a New Trial

If the court grants a renewed motion for judgment as a matter of law (overturns the verdict), it must also conditionally rule on any motion for a new trial in case the judgment is later reversed. This way the court of appeals can address both issues at once. FRCP 50(c)(1)

For example, the jury returned a verdict for the plaintiff. The defendant properly moved for renewed judgment as a matter of law and, in the alternative, a new trial. – In this case, the trial court is required to rule on both motions. The judge must make a “conditional” ruling on the new-trial motion. The conditional ruling assumes the trial court’s ruling, granting the renewed motion, will be reversed on appeal.

Granting a Renewed Motion for Judgment Makes the Case “Immediately” Appealable

If the court grants a renewed motion for judgment as a matter of law (overturns the verdict), and also conditionally grants the motion for a new trial, the case is immediately appealable. The reason is if the verdict winner does not appeal, the case is at an end. FRCP 50(c)(2)

For example, the jury returns a verdict for the plaintiff. The defendant properly moves for a renewed motion for judgment as a matter of law or, in the alternative, a new trial. The court grants the defendant’s renewed motion and enters judgment for the defendant. The court also “conditionally” grants


the defendant’s motion for a new trial. – In this case, the plaintiff may immediately appeal the trial court’s ruling because if the plaintiff does not appeal, the case is over.

Compare: If the trial court denies a renewed motion (keeps the verdict in tact) but grants a new trial, the case is not immediately appealable because the litigation continues. Similarly, if the losing partyfiles only a motion for a new trial, and that motion is granted, the case is not immediately appealable because the case is not at an end.

The Verdict Winner May Ask for a New Trial After a Renewed Motion has been Granted

If the court grants a renewed motion (overturns the verdict), the verdict winner may ask the trial court for a new trial after judgment has been entered against him. FRCP 50(d)

For example, the jury returned a verdict for the plaintiff. The defendant properly moved for a renewed judgment as a matter of law. The trial court granted the defendant’s motion. – In this case, the plaintiff may now ask the trial judge for a new trial.

Verdict Winner May Move for a New Trial “On Appeal” Just in Case the Verdict is Set Aside

If the trial court denies a renewed motion for judgment as a matter of law (keeps the verdict in tact), and enters judgment for the verdict winner, the verdict winner may assert grounds entitling it to a new trial should the appellate court conclude the trial court erred in denying the motion. This rule is concerned with protecting the rights of the party whose jury verdict has been set aside “on appeal” and who may have valid grounds for a new trial. FRCP 50(e)

For example, the jury returned a verdict for the plaintiff. The defendant properly moved for a renewed judgment as a matter of law. The trial court denied the defendant’s motion and the defendant appealed. – In this case, the plaintiff may assert grounds for a new trial on appeal “just in case” the appellate court finds the trial court denied the defendant’s motion in error.

The Appellate Court May Enter Judgment for the Verdict Loser

The appellate court has the power to enter judgment in favor of the verdict loser.

For example, the jury returned a verdict for the plaintiff. The defendant moved for a renewed judgment as a matter of law. The trial court denied the defendant’s motion and the defendant appealed. On appeal, the appellate court found that evidence was erroneously admitted at trial, and the remaining evidence is insufficient to support a verdict for the plaintiff. – In this example, the appellate court may direct the entry of judgment for the defendant. The appellate court does not need to order a new trial or remand for further consideration. Weisgram v. Marley Co., 528 U.S. 440 (2000).

The Appellate Court’s Options

The appellate court has a wide variety of options. It may reinstate the verdict; reverse the trial court’s ruling; affirm the trial court’s ruling; remand the case to the trial court to consider whether to order a new trial; order a new trial on its own; or it can even direct the entry of judgment for the losing party.

MBE TIP: Side with allowing the appellate court to rule as it desires. The appellate court can do pretty much what it wants. It can order a new trial on its own and can even direct the entry of judgment for the party who lost at trial. The only thing the appellate court cannot do is grant a renewed motion for judgment as a matter of law when the losing party failed to make a renewed motion at trial.


Presumptions

The effect of a presumption is to invoke a rule of law compelling the trier of fact to reach a conclusion “in the absence” of evidence to the contrary. If the opponent does offer evidence to the contrary, the presumption disappears and the case is in the factfinder’s hands, free from any rule.

For example, the plaintiff claims to have properly mailed a letter to the defendant. Evidence that aletter has been properly stamped and addressed creates a presumption of delivery. – If the defendant fails to introduce any contradicting evidence, the court must find for the plaintiff on that issue. However, if thedefendant does offer evidence to the contrary the presumption disappears and the case is in the jury’s hands, free from any rule.

Burden of Production

In every civil case, the plaintiff must produce some evidence on every element of her claim. This is known as the burden of production or the burden of going forward. If the plaintiff fails to produce enough evidence to reach the jury, the court should grant judgment against her.

For example, a plaintiff sued a defendant for negligence. If the plaintiff fails to produce any evidence of causation, she has failed to meet her “burden of production” and the judge should grant judgment for the defendant.

Compare: A plaintiff sued a defendant for negligence. If the plaintiff fails to convince the jury that the defendant acted carelessly, she has failed to meet the “burden of persuasion” and the jury should find for the defendant. The burden of persuasion refers to the convincing force of the evidence.

Burden of Persuasion

In the usual civil case, the plaintiff must convince the trier of fact by a preponderance of the evidence, i.e., the plaintiff’s version of events is more likely than not. In some extraordinary cases, the plaintiff will need to show proof by “clear and convincing” evidence, e.g., fraud, actual malice.

The clear and convincing standard is triggered in cases where interests more significant than money are at stake.

Preponderance of the Evidence – 51%Clear and Convincing Evidence – 75%

Beyond a Reasonable Doubt – 90%

The burden of persuasion is fixed and remains with the plaintiff at all times, but the burden of production may shift back and forth as the evidence unfolds.

Burden of Production The plaintiff must produce enough evidenceon every element of the claim.

Burden of Persuasion The plaintiff must convince the trier of factby a preponderance of the evidence.

C. Post-trial Motions, including Motions for Relief from Judgment and for New Trial


Motions for a New Trial

A new trial may be ordered when: (i) there is misconduct by the jury, a party, or an attorney; (ii) new evidence is discovered; (iii) the award of damages is excessive; (iv) the verdict is against the clear weight of the evidence; or (v) the judge erroneously admits or excludes material evidence. FRCP 59

The judge has a good deal of “discretion” in deciding whether to grant or deny a new trial.

Prejudicial Misconduct

Prejudicial misconduct has been found and a new trial ordered where a juror failed to disclose “material” information during voir dire, an attorney exceeded the bounds of decency by making an argument that “unfairly” aroused prejudice on the part of the jury, and where a juror reported to the other members of the jury the results of his home experiment which contradicted earlier expert testimony.

Newly Discovered Evidence

The judge may order a new trial when new evidence is discovered that could not have been reasonably identified before trial. Since such evidence is rarely discovered within the customarily short time period for seeking a new trial (28 days), it is more commonly advanced in support of a motion for relief from judgment (1 year).

Excessive Verdicts

If the jury returns a verdict that is so excessive as to “shock the conscience,” the judge may order a new trial or deny it on the “condition” that the plaintiff accepts a lesser sum.

The key is the court must give the plaintiff the option of either agreeing to a new trial or accepting a reduction in the verdict. If the plaintiff accepts the reduction, she waives the right to appeal it.

In federal question cases, federal courts use the “shocks the conscience” standard in order to determine whether the verdict is excessive. However, in diversity cases, the state standard controls.

MBE TIP: When the jury returns an excessive verdict in a diversity case, the facts must give you the state standard for measuring excessiveness. Make sure to use it!

Verdict Against the Clear Weight of the Evidence

A new trial may be ordered if the verdict is against the clear weight of the evidence. Essentially, the judge must have a definite and firm conviction that a mistake has been made and a “miscarriage of justice” would result.

The judge cannot order a new trial simply because he does not agree with the jury. The judge must find the verdict is against the overwhelming weight of the evidence.

Whether the verdict goes against the weight of the evidence is a decision that requires “balancing” the evidence introduced at trial, which only the trial judge has had the opportunity to observe.Therefore, the standard of review is abuse of discretion.

Judicial Errors


A new trial may also be ordered when the judge “erroneously” rules on the admissibility of evidence or gives an improper jury instruction.

The Error Must be “Substantial”

A new trial may be ordered only when the error affected the outcome. In other words, the error must be so prejudicial that a “gross injustice” would result. Thus, it cannot be harmless. FRCP 61

Partial Grant of a New Trial

The court may order a new trial on only some of the issues. Partial new trials are used most commonly when the tainted issues relate solely to damages.

The most important aspect of this part of the rule is the partial grant of a new trial may be limited to one particular issue so long as that issue is separate and distinct from any others.

For example, the jury returned a verdict for the plaintiff in a case where the defendant’s liability was clear. However, the award of damages greatly exceeded the losses reflected in the evidence. – In this case, the judge may order a new trial as to damages only.

Compare: In a case where the issue of liability was evenly divided, the jury found in favor of the plaintiff but returned an extremely small verdict despite the fact the amount of damages was not in dispute. – In this example, the court should not order a partial new trial on the issue of damages. The low verdict clearly indicates that it was a “compromise” where the jurors who favored the defendant went along with the low award. A new trial limited to the issue of damages would be fundamentally unfair to the defendant. In sum, a partial new trial may be ordered only when the issues are truly separate and distinct. Gasoline Prod. Co. v. Champlin Refining Co., 283 U.S. 494, 500 (1931).

Time to File a Motion for a New Trial

A motion for a new trial must be filed within 28 days after the entry of judgment. Failure to movewithin that period is fatal.

Appeal from an Order Granting a New Trial

An order granting a new trial is not immediately appealable since a party is only entitled to appeal when the case is “finally” over, i.e., at the end of the second trial. Therefore, when the judge grantsa new trial, there is no final decision from which to take an appeal.

Standard of Review – Abuse of Discretion

The decision to grant or deny a motion for a new trial is in the “discretion” of the trial judge, whois in the best position to assess the prejudicial effect of any errors at trial. Therefore, the trial court’s ruling on a motion for a new trial is reviewable only for abuse of discretion.

Correction of Clerical Errors

The court may correct a clerical mistake, at any time, whenever one appears in the judgment. If the judgment entered by the clerk differs from that ordered by the court, the mistake can be corrected. Thus, the focus of the rule is on mistakes that require no additional proof. FRCP 60(a)


For example, the jury rendered a verdict for the plaintiff awarding damages and interest. The court entered judgment in accordance with the verdict, but inadvertently omitted the award of interest. – In this example, the plaintiff may move, at any time, to have the court correct the omission because the mistake causes the judgment to reflect something other than what was actually decided.

Compare: The rule is not applicable to questions involving issues that were not covered in the judgment. In the preceding example, if the plaintiff moved for attorney’s fees, the motion would properly be regarded as a motion to alter or amend the judgment, which must be filed within 28 days, because it requires the court to reopen the judgment to make “additional” findings.

Motions for Relief from Judgment

The court may relieve a party from a judgment when the circumstances suggest that it would be unfair to enforce it. Such grounds include excusable neglect, newly discovered evidence, and fraud. This remedy is limited to extraordinary cases. FRCP 60(b)

A party has one year to file a motion for relief. The rationale is the desire for truth and justice outweighs the value of “immediate” finality; while the “one year” time limit operates to protect the finality of judgments.

The availability of this remedy is particularly important because many errors will not be discovered in time to move for a new trial or to appeal. Consequently, a motion for relief from judgment often presents the only possible means of escaping an erroneous judgment.

Excusable Neglect

The court may relieve a party from a judgment on the basis of excusable neglect. Such neglect must be “reasonable” under the circumstances. The rule is most frequently invoked successfully in the default setting where a party fails to respond because of a debilitating illness.

For example, a default judgment was set aside where an attorney failed to file an answer because of an accident to his son. – In this case, the court held that this was “excusable” neglect on the part of the attorney and sufficient to justify setting aside the default.

Compare: In a diversity action, the plaintiff’s attorney negligently failed to plead the jurisdictional amount of more than $75,000. When the defendant moved to dismiss the complaint, the plaintiff’s attorney made the unavailing argument that subject matter jurisdiction had been waived. – In this case, the “inexcusable” neglect of counsel was not a sufficient ground for relief.

Newly Discovered Evidence

Another reason for granting relief is when new evidence is found. A party seeking relief under this provision must show the evidence was “in existence” at the time of trial and, even with reasonable diligence, the party was not able to discover the evidence in time to move for a new trial.

The requirement that the evidence have been in existence recognizes to allow relief for evidence that was not in existence until after trial would result in the perpetual continuation of lawsuits.

For example, the revelation of new scientific evidence that comes to light “after trial” is not a reason to grant a motion for relief.

Fraud or Misconduct by an Opposing Party


A judgment may be reopened for fraud or other misconduct by an opposing party. This part of therule is aimed at judgments which were unfairly obtained.

For example, a judgment obtained by the use of perjured testimony; or misconduct in withholdingmaterial information called for by discovery. Rozier v. Ford Motor Co., 573 F.2d 1332 (5th Cir. 1978).

Void Judgments and Changes in Circumstances

The court may relieve a party from a judgment that is void or when applying it prospectively is nolonger equitable. A judgment is “void” only if there was lack of jurisdiction or deprivation of due processby the failure to give notice.

If an injunction is involved, the court may modify it if there is a “change in circumstances” that makes it no longer equitable to enforce.

There is no time limit when a motion is brought on the grounds that the judgment is void or whenenforcing it is no longer equitable. The reason is a void judgment is never valid, and with injunctions, thetime for seeking relief will depend on the circumstances of each case.

Post-Trial Motions Have Strict Time Limits

Renewed motions for judgment as a matter of law (Rule 50), motions to amend the findings (Rule 52), and motions for a new trial (Rule 59) all adopt a 28-day period for their respective post-judgment motions. The rules prohibit any expansion of those periods. The “strict time limit” reflects a strong policy in favor of finality of judgments. Parties must know at some point the judgment will not be revised.

MBE TIP: A motion to alter or amend the judgment, a motion for a new trial, and a renewed motion for judgment as a matter of law all have the same time requirement of 28 days.


VI. VERDICTS AND JUDGMENTS

A. Defaults and Involuntary Dismissals

Entry of Default

A defendant is in default when he fails to respond to the complaint. The “clerk” must then enter the party’s default on the record. After entry of default, the plaintiff may seek a default judgment. Simply put, an “entry of default” is the first step towards obtaining a default judgment. FRCP 55

If a party has “appeared” in some fashion, usually by contesting the case, that party will not be placed in default. For example, a defendant who answers the complaint but then fails to appear at trial is not in default. * This concept was just tested.

Default Judgment

The clerk may enter a default judgment against a defendant who has not appeared in the action ifthe plaintiff’s claim is for a certain amount.

The court may conduct a hearing to determine the amount of damages or to investigate any other matter. In fact, at a hearing to establish damages, a plaintiff may be awarded less than the amount demanded.

The court (not the clerk) must enter the default judgment if a party has appeared. Of course, the party must be served with notice before the hearing.

MBE TIP: If a party has not appeared at all, the clerk enters the default. But if the party has made an appearance at any time, then out of respect, the default must be handled by the court.

Relief to Be Granted

The plaintiff’s prayer for relief sets the ceiling on the amount the plaintiff may recover in the event of default. Thus, a default judgment cannot exceed the amount demanded in the complaint or order a different type of relief. The rationale is the defendant may strategically decide not to defend the action if he knows the maximum cost of not defending. It’s a cost-benefit analysis. FRCP 54(c)

Setting Aside a Default or a Default Judgment

The court may set aside an entry of default or a default judgment for good cause, e.g., inadvertence, excusable neglect. This rule gives the defaulting party a chance to challenge an entry of default.

Voluntary Dismissal (Dismissal “Without” Prejudice)

The plaintiff may voluntarily dismiss her case by filing a notice of dismissal before the defendantserves either an answer or a motion for summary judgment. Such a dismissal is without prejudice – meaning the plaintiff can refile again later. FRCP 41

If the defendant has filed an answer or a motion for summary judgment, the plaintiff can request a dismissal only by court order. Again, such a dismissal is without prejudice.


If the defendant has filed a counterclaim before being served with the plaintiff’s motion to dismiss, the plaintiff’s action may be dismissed if the defendant’s counterclaim remains.

If the plaintiff refiles a dismissed action, the court may order the plaintiff to pay the defendant’s costs.

The Two Dismissal Rule (With Prejudice)

If the plaintiff dismisses the same claim twice, it operates as an adjudication “on the merits” and the plaintiff will be barred from refiling the case again.

Involuntary Dismissal (Dismissal “With” Prejudice)

If the plaintiff fails to pursue her claim or to comply with a court order, the defendant may move to dismiss the action. Such a dismissal is with prejudice and operates as an adjudication on the merits. Aninvoluntary dismissal against a plaintiff is like a default judgment against a defendant.

KEY POINTS: An entry of default is entered when the defendant fails to respond to a complaint. The clerk may enter a default judgment only if the defendant has not appeared and damages are certain. A defendant is entitled to notice of the court’s entry of a default judgment only if he has previously appeared in the action. – A voluntary dismissal is without prejudice. An involuntary dismissal occurs when the plaintiff fails to prosecute her claim (akin to a default judgment against the defendant) and is with prejudice.

B. Jury Verdicts—Types and Challenges

Types of Jury Verdicts

A jury’s verdict may take several forms, depending on the judge’s instructions. In federal courts, the jury may deliver a general verdict – a verdict that states which party should prevail; a special verdict – a verdict that answers specific questions without designating a winner; or a combination verdict – a general verdict with answers to specific questions. FRCP 49

For example, a verdict where the jury finds for the plaintiff is a general verdict. An example of a special verdict is when the jury instructions state: “1. Do you find that the defendant was negligent in the operation of her vehicle? Yes. 2. Do you find that the plaintiff was negligent in the operation of the car? No. 3. Do you find that the owner negligently failed to ensure that the brake lights on her car were in proper working order? Yes.” Thus, a special verdict contains answers to a series of short questions.

Combo Verdict – General Verdict with Answers to Specific Questions

When the court gives the jury a general verdict form together with specific questions the jury must decide, sometimes the answers will be inconsistent with the verdict. In the usual case, the judge will(i) direct the jury to further consider its answers and verdict; or (ii) order a new trial.

If the answers are consistent with each other but inconsistent with the general verdict, the judge may ignore the general verdict and approve the judgment according to the answers. But if the answers are inconsistent with each other and inconsistent with the general verdict, judgment must not be entered.

Challenges to Jury Verdicts


A party may challenge a jury’s verdict on the grounds that the verdict is excessive or against the weight of the evidence. The remedy is an order granting a new trial.

For example, a verdict may be challenged because it exceeds statutory limits as this is an error oflaw; whereas a verdict may not be set aside when the key issue in the case was credibility since this is a matter within the province of the jury.

Remittitur (Reducing the Verdict - Constitutional)

Remittitur gives a plaintiff the choice of whether to endure a new trial or accept a reduction of the verdict. Thus, a court can conditionally grant a motion for a new trial unless the plaintiff is willing to accept a lesser sum.

Under federal law, the court may order a remittitur if the verdict is so excessive that it shocks the conscience. The court must give the plaintiff the option of agreeing to the reduction or granting a motion for a new trial. When the plaintiff consents to a remittitur, the plaintiff “waives” the right to appeal i.

For example, a plaintiff sued a defendant for damages in federal court for a civil rights violation. The jury returned a general verdict for the plaintiff and ordered the defendant to pay $1 million dollars in damages. The defendant filed a motion for a new trial. – In this case, if the court finds that the verdict is “so excessive” that it shocks the conscience, the court may give the plaintiff the option of taking a reduction in the verdict or having a new trial.

Additur (Increasing the Verdict –Unconstitutional in Federal Court)

An additur is the opposite of a remittitur in that it allows an increase of the verdict. While additurs are allowed in state court, they are not allowed in federal court as the Supreme Court found additurs to be in violation of the Seventh Amendment (which does not apply to the states).

MBE TIP: In federal court, the judge is only allowed to “go down” on the jury’s verdict.

Remittitur / Additur in Diversity Cases – Use the State Standard

In diversity cases, federal courts must use the state standard for determining whether an award ofdamages is excessive. Gasperini v. Center for Humanities, Inc., 518 U.S. 415 (1996).

Juror Misconduct

A new trial is appropriate if a party can show a juror failed to answer honestly a material question on voir dire and a correct response would have provided a valid reason for excluding the juror for cause. This means a new trial will not be ordered if the misconduct was harmless. In other words, the response must be “so prejudicial” that it affected the essential fairness of the trial. McDonough v. Greenwood, 464 U.S. 548 (1984).

Furthermore, a juror may not testify about any statements made or incidents that occurred duringdeliberations or any juror’s mental processes.

For example, a juror may not testify about how the jury conducted its deliberations or that other jurors ignored the judge’s instructions.

However, a juror may testify about whether extraneous prejudicial information or an outside influence was improperly brought to the jury’s attention. FRE 606


For example, it was proper for the court to order a new trial when a juror reported to the other members of the jury the results of his home experiment which contradicted earlier expert testimony.

Compare: Evidence of extensive juror drug and alcohol intoxication during deliberations went to the “mental processes” of the jury and was therefore inadmissible to impeach the verdict. Tanner v. United States, 483 U.S. 107 (1987).

MBE TIP: A juror may not testify to anything that originated inside the jury room, i.e., the mental processes or the “thoughts” of the jurors as they deliberated. However, any outside information that has improperly influenced the jury is subject to inquiry, e.g., engaging in their own experiments, visiting the scene of the accident without court approval, communicating with the bailiff about the trial. Use this inside/outside dichotomy to get to the right answer.

Polling the Jury

Upon request by a party, the court must allow that party to “poll” the jurors to make sure each juror concurred in the verdict. If the poll reveals a lack of assent, the court may direct the jury to deliberate further or may order a new trial.

KEY POINTS: A general verdict decides the winner of the case. A special verdict answers a series of short questions without designating a winner. If the jury’s answers are inconsistent, the judge may ask the jury to reconsider the verdict or order a new trial. – If an award of damages is excessive, the court could give the plaintiff the “option” of agreeing to a reduction of the award or having a new trial. In federal courts, remittiturs (reductions of the verdict) are permitted but additurs (increases) are unconstitutional. In diversity cases, the state standard is used for determining whether an award of damages is excessive. – Finally, a new trial is appropriate only if a juror falsely answered a question on voir dire that affected the fairness of the trial. A juror may not testify about anything that happened inside the jury room (mental processes) but may testify about any outside influences (experiments).

C. Judicial Findings and Conclusions

Findings and Conclusions by the Court

In a bench trial, the court is required to make findings of fact and conclusions of law when entering judgment. The judge must state the factual findings “separately” from the conclusions of law. This requirement is important because it informs the appellate court about the basis for the trial court’s decision. FRCP 52

When the trial judge does not sufficiently explain the basis for a ruling, the appellate court may remand for further findings.

The judge may invite counsel to submit proposed findings and conclusions. However, the court cannot adopt the winning party’s findings verbatim. The trial court must craft its own findings. Andersonv. Bessemer City, 470 U.S. 564 (1985).

The “Clearly Erroneous” Standard Applies to Findings of Fact in Bench Trials

Findings of fact made by the judge in a bench trial are reviewed under the clearly erroneous standard. The appellate court must give due regard to the trial court’s opportunity to judge the credibility of the witnesses. This concept was recently tested.


Judgment on Partial Findings

After a party has been fully heard on an issue, the court may enter judgment against that party. A judgment on partial findings is comparable to a judgment as a matter of law in a jury trial. FRCP 52(c)

Because the trial judge sits as the trier of fact in a bench trial (trial without a jury), the judge will consider the sufficiency and weight of the evidence. This means the court may determine the facts, judge the credibility of witnesses, and enter judgment accordingly. A judgment on partial findings simply saves time by permitting the judge to cut a bench trial short when an outcome has become clear after the losingparty has been fully heard.

For example, the judge in a bench trial can enter judgment for the defendant at the close of the plaintiff’s case if the judge believes the plaintiff has failed to meet her burden of proof.

Motion to Amend Findings

After the entry of judgment, the losing party may file a motion asking the court to amend its findings. This rule is akin to a “renewed” motion for judgment as a matter of law in a jury trial.

Compare Summary Judgment

Because the judge is the “trier of fact” in a bench trial, a judgment on partial findings is reversible only if the appellate court finds it to be clearly erroneous. In comparison, summary judgment is based on the judge’s determination as a “matter of law” and is reviewed de novo.

D. Effect; Claim and Issue Preclusion

Claim Preclusion (Res Judicata) HOT TOPIC

Res judicata prevents a party from re-litigating (i) the same claim (ii) against the same party (iii) after there has been a final and valid judgment on the merits. The rationale is to avoid the time and expense of multiple suits and to prevent inconsistent outcomes. Res judicata in civil cases is similar to double jeopardy in criminal prosecutions.

♦ Same Claim

In federal court, a claim is the “same” if it is based on the same transaction or occurrence. California, on the other hand, follows the “primary rights” doctrine which gives the plaintiff a cause of action for each right that is invaded.

♦ Same Parties

The ensuing case must be brought by the exact same plaintiff against the exact same defendant.

♦ Final

In federal court, a judgment is deemed final when it is rendered. The fact the case is under appealis immaterial.

♦ Valid


A judgment is valid so long as the court had jurisdiction over the parties and the claim.

♦ On the Merits

A judgment is “on the merits” when the claim has been litigated. A dismissal by the court for lack of personal jurisdiction, lack of subject matter jurisdiction, improper venue, or failure to join an indispensable party is not considered on the merits because the dismissal is not related to the merits of the claim.

For example, a plaintiff brought a products liability action against a corporation in state court. The corporation filed a motion to quash service of summons contesting “personal jurisdiction” over it. The court determined it lacked personal jurisdiction over the corporation and dismissed the case. Thereafter, the plaintiff brought his products liability action against the same corporation in a different state court. The corporation moved for dismissal on the ground of res judicata. – In this case, the plaintiff’s claim is not barred because the dismissal for lack of personal jurisdiction was not considered on the merits.

Issue Preclusion (Collateral Estoppel)

Issues of fact that were actually litigated and essential to the judgment are conclusive in a subsequent action between the plaintiff and the defendant. In essence, collateral estoppel compels the court to make the same findings of fact the first court made on an identical issue.

♦ Actually Litigated

Collateral estoppel only applies to issues that were actually litigated in the prior action.

♦ Essential to the Judgment

An issue is “essential” to the action only if the judgment could not have been reached without determining that particular issue. Thus, if there were two grounds for the decision, the issue was not essential to the judgment.

Exceptions to Collateral Estoppel Based on Fairness

Issue preclusion is not as strictly applied as claim preclusion and will not apply if it would be unfair to do so. Thus, in certain situations, a losing party may be allowed to re-litigate an issue in a subsequent action. Common examples include: (i) when the stakes involved are much larger than the first case where there was little incentive to litigate; (ii) when the burden of proof is different; or (iii) where it would be unfair or unjust under the circumstances.

Parties Bound by Judgment

Generally, non-parties are not bound by a prior judgment since they had no control over the outcome and had no interest in the result.

Parties and Persons in Privity

Persons whose interests are represented are bound by the judgment. For example, members of a class action are bound by a judgment; so is a minor whose interests are represented by a guardian.

Mutuality of Estoppel


Under traditional mutuality rules, a judgment could not be used against a person who was not a party to the prior suit, nor could a stranger take advantage of a prior judgment. However, most jurisdictions (including California) have eliminated the mutuality requirement and, in certain situations, may allow a non-party to take advantage of the doctrine of collateral estoppel.

Use of Collateral Estoppel by a Non-Party – Sword vs. Shield

A non-party may use a prior judgment to avoid liability in a subsequent action if there are compelling reasons to do so. This “defensive” use of collateral estoppel is often referred to as using the judgment as a shield. Moreover, courts will allow a non-party to use a prior judgment to assist in obtaining relief. This “offensive” use of collateral estoppel is often referred to as using the judgment as a sword.

The critical factor is whether the losing party had a full and fair opportunity to litigate the issue in the first case.

For example, a pedestrian sued a pizza delivery company claiming that its employee failed to stop at a stop sign causing the pedestrian serious injuries. The jury rendered a verdict in favor of the pizzadelivery company finding the employee had exercised due care by coming to a complete stop. – In a subsequent action by the pedestrian against the employee, the employee may benefit from the prior judgment because the issue of negligence had been fully litigated and was essential to the judgment. Therefore, the employee may use the judgment as a shield.

For example, the Securities and Exchange Commission (SEC) charged the defendant with issuinga false proxy statement in violation of federal securities laws. The trial court determined the proxy statement did in fact contain false statements and rendered judgment in favor of the SEC. – In a subsequent action brought by stockholders of the company, the court held the defendant was collaterally estopped from re-litigating the issue regarding the false proxy statement. The court reasoned that under the circumstances it was “fair” to do so. Thus, the stockholders were able to use the prior judgment as a

sword.

The main gist of collateral estoppel is the “issue” is deemed established in the second case.


VII. APPEALABILITY AND REVIEW

Appeals

The party who loses at trial generally has the right to appeal. In order to preserve an issue for appeal, the party must object to the trial court’s ruling and state the action she wants the court to take along with the grounds for the objection. Failure to make a timely objection constitutes a waiver. FRCP 46

Time for Filing an Appeal

An appeal must be filed within 30 days after entry of the judgment or within 30 days after the trial court decides a motion for a new trial or a renewed motion for judgment as a matter of law. Fed. R. App. P. 4(a)(4). An appeal filed after the court announces its decision but before entry of judgment is treated as filed on the date the court enters judgment. Thus, a pre-mature appeal is timely filed.

A. Final Judgment Rule

The Final Judgment Rule

Generally, only final judgments are reviewable on appeal. The reason is to avoid the costs and delay of multiple appeals. A final judgment is one that ends the litigation on the merits. Thus, an appeal is allowed only after all the issues have been determined and cannot be taken until the entire case is finished. 28 U.S. Code § 1291

For example, a trial judge grants summary judgment for the plaintiff on the issue of liability. The issue of damages has not yet been decided. – In this example, the defendant cannot file an “immediate” appeal because the entire case has not yet been resolved. Thus, the appellate court does not have jurisdiction to hear an appeal until the trial court rules on the damages issue.

An order of final judgment must be set out in a separate document. This rule is intended to avoid confusion and ensures that a party knows when the clock starts to run for filing an appeal. FRCP 58

Exceptions to the Final Judgment Rule

However, in certain situations, the appellate court can review an interlocutory order of the trial court before final judgment is entered. Thus, there are several exceptions to the final judgment rule. Theyinclude: (1) the collateral order doctrine; (2) statutory exceptions; (3) when multiple claims or multiple parties are involved; (4) class action certification orders; (5) certification by the trial court; and (6) seeking a writ of mandamus or prohibition in extraordinary circumstances. Each one will be discussed in turn.

KEY POINTS: In order to preserve an issue on appeal, a party must object to any errors on the record. An appeal must be filed within 30 days. – Generally, only “final judgments” are appealable. Thus,a party must wait until the entire case is finished to file an appeal.


B. Availability of Interlocutory Review

Interlocutory Appeals and Exceptions to the Final Judgment Rule

An “interlocutory” appeal is an appeal that is taken during the course of the action. It asks the appellate court to immediately review a ruling by the trial court and can be made if extraordinary circumstances exist that would prevent the case from being properly decided. Interlocutory appeals are used to prevent irreparable harm from occurring during the pendency of a trial.

The following are examples of interlocutory appeals, which make them exceptions to the final judgment rule.

Collateral Order Doctrine

The main exception to the final judgment rule is the collateral order doctrine. It states, even when the case remains unresolved, an “immediate” appeal may be taken of important issues under certain circumstances. This is a very narrow exception that deals with a small class of cases.

Under the collateral order doctrine, an immediate appeal may be taken from an interlocutory order that: (1) conclusively determines an “important” issue in the case; (2) that issue is collateral to the merits of the action; and (3) a delay in appellate review would effectively preclude the losing party from an opportunity to vindicate its rights on appeal. Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541 (1949).

These three cryptic requirements can be best explained with examples.

For example, a shareholder filed a derivative action against a corporation. The corporation filed a motion to compel the shareholder to post a bond as required by statute. The court denied the motion. – In this case, immediate appellate review was allowed under the collateral order doctrine. The court found thepurpose of the bond was to discourage frivolous suits and to assure reimbursement to the corporation of expenses of a successful defense. (1) Thus, it was an important issue that was conclusively determined and (2) the posting of a bond is collateral to the merits of the action. (3) But, without immediate review, the corporation, in all likelihood, would not be able to collect its expenses after trial. Therefore, the trial court’s decision not to have the plaintiff post a bond would be effectively unreviewable on appeal after the trial has concluded. Cohen, 337 U.S. 541 (1949).

For example, a government official was sued in federal court. He moved to dismiss the case based upon a claim of immunity. The trial court denied the motion. – In this case, the collateral issue exception applies and the claim is “immediately” appealable. The trial court “conclusively determined” the government official was not entitled to immunity. The ruling did not touch on the “merits” of the action. More importantly, final appellate review cannot cure the harm because the official will be required to defend the action. Immunity guarantees that a trial will not occur. Therefore, an order forcing the official to stand trial cannot be effectively reviewed on appeal. Nixon v. Fitzgerald, 457 U.S. 731 (1982).


Compare: The collateral order doctrine does not apply to disclosure orders that might intrude upon the attorney-client privilege. The main reason is because there are adequate remedies available upon an appeal. Appellate courts can remedy an improper disclosure of privileged materials by vacating the judgment and remanding the case back to the district court for a new trial. Additionally, the party can disobey the order, be found in contempt, and then appeal the contempt judgment. For those reasons, an “immediate” appeal is not warranted. Mohawk Industries, Inc. v. Carpenter, 558 U.S. 100 (2009).

MBE TIP: The collateral order doctrine will most likely be implicated when a party asserts a defense (like immunity) that is intended to spare that party from the rigors of trial, a protection that would obviously be lost unless an immediate appeal is allowed.

Case Law Examples of Where the Collateral Order Doctrine Did Not Apply

An order imposing sanctions on an attorney is not immediately appealable even where the attorney no longer represents a party in the case because the proceedings were ongoing and appellate review of a sanctions order would inquire into the merits. Cunningham v. HamiltonCounty, 527 U.S. 198 (1999).

An order refusing to disqualify counsel for an alleged conflict of interest can be effectively reviewed “after” trial is complete. Thus, immediate appellate review is unnecessary. Firestone v. Risjord, 449 U.S. 368 (1981).

Denial of a motion to dismiss based on a forum-selection clause or on the ground of forum non conveniens is not immediately appealable because the defendant objected only to defending in a particular place, not to having defend at all. – The same rationale applies to venue transfer decisions which are unsuitable for interlocutory review.

In all of the situations listed above, the issues can be appealed but the parties must wait until the entire case is finished. Only “immediate” appellate review is prohibited.

Interlocutory Appeals as of Right (Statutory Exceptions to the Final Judgment Rule)

There are statutory exceptions to the final judgment rule which include immediate appeals of orders relating to injunctions, receiverships, and admiralty. 28 U.S.C. § 1292(a)

An order granting, modifying, refusing, or dissolving an injunction is reviewable as a matter of right. The rationale is based on the harm it could cause if the injunction was wrongly decided.

For example, the owner of a large hotel chain terminated one of its managers. The manager had two years remaining on his employment contract. The manager sued the owner in federal court. He sought damages as well as reinstatement to his job. Before trial, the manager filed a motion for an injunction requiring the owner to reinstate him. The district court granted the manager’s motion and issued the injunction. – In this case, the owner may immediately appeal the court’s order granting the injunction. Essentially, the court is forcing the owner to continue to employ the manager and allow him to remain on the premises despite the hostilities between the parties. Not only is an order like that not feasible to enforce but it significantly interferes with owner’s business. * Injunctions are heavily tested.


Multiple Claims or Multiple Parties

Where there are multiple claims (counterclaims, claims for damages, injunction, specific performance) or multiple parties in a case, a final disposition of one of those claims will be immediately appealable when the trial court orders an entry of final judgment on that claim and expressly certifies thatthere is no just reason for delay. FRCP 54(b)

For example, a distributor of office equipment sued a manufacturer of copiers in federal court alleging the manufacturer had breached a long-term contract to supply copiers to the distributor. The manufacturer filed a counterclaim seeking damages for breach of a covenant not to compete. The distributor filed a motion for judgment on the pleadings, arguing that the covenant not to compete was unenforceable as a matter of law. The court granted the distributor’s motion stating that, “A covenant not to compete is void as a matter of public policy. Given that this is strictly a legal issue and entirely severable from the breach of contract claim, there is no just reason for delay. I direct that judgment shouldbe entered in favor of the distributor on the manufacturer’s counterclaim.” – In this example, the manufacturer can appeal immediately from the district court’s decision. Multiple claims were presented by the parties (breach of contract and breach of covenant not to compete), and when the district court granted judgment on the pleadings, the court also directed entry of judgment and expressly determined that there was no reason for delay. Thus, under Rule 54(b), the district court’s decision constituted a “final judgment” on the counterclaim and is immediately appealable.

MBE TIP: When the examiners test this concept, they have to mention the key language! There is no other way around it. Therefore, if there are multiple claims or multiple parties and the court issues a final judgment stating, “there is no just reason for delay,” the case is now appealable as to that party or that claim.

Keep in mind the rule does not apply when a party asserts a single claim with multiple theories ofrelief. It is expressly limited to multiple claim or multiple party actions.

For example, a woman sued her employer alleging employment discrimination. She sought damages, injunctive relief, and attorney’s fees. The court granted the woman’s motion for partial summary judgment on the issue of liability. – Even though the trial judge entered final judgment and expressly declared that there is no just reason for delay, the order was not immediately appealable. The reason is because it did not dispose of the woman’s requests for relief. Furthermore, FRCP 54(b), governing multiple claims and multiple parties, does not apply since the woman asserted a single cause of action (employment discrimination). She advanced a “single legal theory” that was applied to only oneset of facts. Because the woman did not assert multiple claims, the case is not immediately reviewable. Liberty Mutual Insurance Co. v. Wetzel, 424 U.S. 737 (1976).

It should be noted the appellate court will review the trial court’s order to determine whether the entry of judgment and express certification was appropriate. This is precisely what happened in the case above, i.e., the judge erroneously expressed “there was no just reason for delay” when the case was not immediately appealable because the woman did not assert multiple claims.

Class Action Certification Orders

Immediate appeal from an order granting or denying class certification is permitted in the sole “discretion” of the Court of Appeals. FRCP 23(f)


Appeal by Certification of the Trial Court

In exceptional situations, the district court may certify a question for interlocutory appeal.

An appeal may be taken before a final decision is reached when the trial judge is of the opinion that an order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation. The district judge must state this in writing to the Court of Appeals who has the discretion to hear it. 28 U.S.C. §1292(b) * This concept was just tested.

This concept will be easy to spot because the judge must state the above requirements and submitthem to the Court of Appeals, who must then agree to hear the appeal.

Writ of Mandamus or Prohibition

As a last resort, a party may seek an “extraordinary” writ of mandamus or writ of prohibition from the appellate court. A writ of mandamus commands the trial judge to issue an order or fulfill a mandatory duty. A writ of prohibition prevents the trial judge from acting outside of her jurisdiction. 28 U.S.C. § 1651

Writs of mandamus and prohibition are to be used only in exceptional circumstances. Thus, a party may petition the appellate court for a writ of mandamus when the trial judge exceeds her authority or when there is a clear breach of a legal duty.

For example, a writ of mandamus was approved when the trial court denied a party of its constitutional right to a jury trial. Beacon Theatres, Inc. v. Westover, 359 U.S. 500 (1959).

For example, a trial judge appointed a special master to try two antitrust cases the judge had been presiding over for years. The judge justified his action on the ground he had an extremely congested trial calendar. – A writ of mandamus was issued ordering the trial judge to vacate the appointment. The appointment was an abuse of the trial court’s power as it deprived the parties of a trial before a judge. A congested calendar is not such an “exceptional circumstance” as to warrant reference to a special master. La Buy v. Howes Leather Co., Inc., 352 U.S. 249 (1957).

It’s worthy to note most interlocutory appeals are within the discretion of the appellate court. Class action certification orders, writs of mandamus, and questions “certified” by the trial court may only be heard if the appellate court exercises its discretion to hear the petition. – In contrast, appeals under the multiple claims or multiple parties rule and orders granting or dissolving an injunction are appealable as a “matter of right” because the statute says so.

KEY POINTS: An interlocutory appeal is taken during the course of the action and asks the appellate court to “immediately” review a ruling by the trial court. An immediate appeal must fall within one of the narrow exceptions to the final judgment rule: (1) collateral order doctrine – where a ruling cannot be effectively reviewed on appeal, e.g., recoupment of costs, claims of immunity; (2) statutory exceptions or appeals as of right – orders granting or dissolving an injunction; (3) multiple claims or multiple parties – the court must order an entry of final judgment on that claim and expressly certify that there is no just reason for delay; (4) class action certification; (5) certification of a controlling question of law by the trial court – trial court must put requirements in writing and appellate court must agree to hear the appeal; (6) writ of mandamus – serious abuse of power by the trial court, e.g., denying a party the constitutional right to a jury trial.


C. Scope of Review for Judge and Jury

Standards of Review

There are several standards of review the appellate court will use to assess errors by the trial court. Each depends on the nature and circumstance of the ruling. The relevant standards are laid out below. A simple chart follows.

De Novo (Questions of Law)

An appellate court applies the de novo standard to trial court rulings on pure issues of law. This means the appellate court will review the issue as if it was being decided for the first time. Thus, it will give no deference to the trial court’s ruling. The reason is because the appellate court is in as good a position as the trial court to decide legal questions. De novo means “anew” or “from the beginning.”

For example, questions of statutory interpretation, erroneous jury instructions, and choice of law issues are questions of law that are reviewed de novo. Additionally, grants of motions to dismiss for failure to state a claim, summary judgment, judgment as a matter of law are reviewed de novo since these motions are granted as a matter of law.

Compare: The determination of how an accident happened or whether a witness is telling the truth is a question of fact.

In an interesting case, the Supreme Court held that a determination of the “constitutionality” of a punitive damage award is reviewed de novo on appeal. The court found this was a question of law as the Fourteenth Amendment’s Due Process Clause imposes substantive limits on punitive damage awards. Therefore, the standard of review is de novo because a constitutional or legal issue was raised. Cooper Industries v. Leatherman Tool Group, 532 U.S. 424 (2001). * This concept was just tested.

In a similar ruling, the Supreme Court found the de novo standard is to be applied in reviewing a trial court’s determination of whether a defamatory statement was published with actual malice since it raises First Amendment freedom of speech concerns. Bose Corp. v. Consumers Union, 466 U.S. 485 (1984).

MBE TIP: When the trial court has to determine a constitutional issue, the de novo standard applies on appeal. But when no constitutional issue is raised, the appellate court will review a trial court’s “decision”under an abuse-of-discretion standard.

Clearly Erroneous (Findings of Fact in a Bench Trial)

An appellate court applies the clearly erroneous standard when reviewing findings of fact made by the judge in a bench trial (trial without a jury). The appellate court must give due regard to the trial court’s opportunity to judge the witnesses’ credibility and demeanor. FRCP 52(a)(6)

A finding is “clearly erroneous” when the appellate court is left with the definite and firm conviction that a mistake has been committed. In other words, the trial court’s ruling must be without evidentiary support. When there are two permissible views of the evidence, the trial court’s choice between them cannot be clearly erroneous. * This concept was just tested.


Sufficiency of the Evidence / Reasonableness (Jury Verdicts)

Findings of fact made by the jury are rarely reversed on appeal. The command of the Seventh Amendment requires great deference to jury verdicts. A verdict may be overturned only if it is clearly against the weight of the evidence. This might happen if the jury is biased against a party or when the jury is paid off by the defendant and rules in his favor despite overwhelming evidence of guilt.

In other words, a court will disregard any jury determination for which there is no evidentiary basis enabling a “reasonable” jury to reach it.

Harmless Error (Made No Difference in the Outcome)

An appellate court will apply the harmless-error standard when it determines that an erroneous ruling by the trial court did not affect any party’s substantial rights. It is a conclusion the appellate court reaches after reviewing and determining the impact of an error. In other words, a mistake will be reversedonly if it made a difference in the outcome. 28 U.S. Code § 2111

For example, in an action for damages from a car accident, the plaintiff properly offered into evidence one crystal clear cell phone video recording of the accident, the undisputed testimony of an expert witness, and a copy of the police report. Additionally, she had three eyewitnesses testify in her favor. However, the judge erroneously admitted into evidence an affidavit from an unnamed source claiming he believed the defendant was at fault. The defendant objected but the trial court overruled the objection. The jury found for the plaintiff. – In this example, the court’s erroneous admission of the affidavit was harmless given that there was overwhelming evidence against the defendant. In all likelihood, the affidavit made no difference in the jury’s verdict. Even without the introduction of the affidavit, the defendant was extremely unlikely to win.

Plain Error

The opposite of harmless error is plain error. An appellate court may overturn a judgment where an error is so clear and fundamental that it would be unjust to permit the judgment to stand. Plain errors have such a prejudicial effect and are so egregious that the appellate court may review such errors even though there was no objection at trial. The purpose of this rule is to avoid a miscarriage of justice.

For example, a bus driver and a truck driver were involved in a collision. The bus driver properly filed a negligence action in federal court. At the close of the evidence, the judge instructed the jury, “If you find that the bus driver failed to prove, by clear and convincing evidence, the truck driver failed to exercise reasonable care, then you should render a verdict in favor of the truck driver.” No objections were made to the instructions and the jury returned a verdict for the truck driver. – On appeal, the appellate court should vacate the judgment and remand the case for a new trial. The district court instructed the jury on the wrong standard of proof. Because the error in the instructions was so clear and fundamental, it would be unjust to permit the judgment to stand. Therefore, the appellate court must reverse, even though no objection was made, since there was plain error.


Abuse of Discretion (Discretionary Orders by the Trial Judge)

Any ruling that is within the discretion of the trial judge will be reviewed under an “abuse of discretion” standard. This standard reflects the view that the trial court, due to its proximity to the suit, has a better sense of the case’s factual nuances upon which a “discretionary” ruling often turns. The appellate court will reverse a discretionary decision only if it is convinced that the judge was undoubtedlywrong. * This concept was just tested.

For example, the Federal Rules of Civil Procedure give the trial court the “discretion” to transfer a case to another judicial district when the court determines it would be more convenient for the parties and witnesses and in the interest of justice to do so. – The trial court’s decision to grant or deny a motion for a change of venue will be reviewed under the abuse of discretion standard.

For example, the trial court’s decision to award attorney’s fees will be upheld unless there was anabuse of discretion. – Similarly, the judge’s decision to admit or exclude certain evidence as “unfairly prejudicial” is also subject to the abuse of discretion standard.

MBE TIP: The abuse of discretion standard is used when the judge must balance the pros and cons of a certain issue, e.g., whether to grant a new trial, transfer a case, or impose sanctions.

In simplest terms, if a rule of law gives the trial court the “discretion” to decide an issue, it will be reviewed under the “abuse of discretion” standard.

STANDARDS OF REVIEW DIAGRAM

De Novo Errors of law and “constitutional” issues are reviewed anew.

Clearly Erroneous Findings of fact made by the judge in a bench trial.

Reasonableness Findings of fact made by the jury when reaching the verdict.

Abuse of Discretion Rulings that are within the discretion of the trial judge.

Harmless Error An error that did not affect the outcome.

KEY POINTS: The appellate court reviews questions of law and constitutional issues under the “de novo” standard. Findings of fact made by the judge in a bench trial fall under the “clearly erroneous” standard of review. Jury verdicts are upheld if they are reasonable, i.e., there is a “sufficient evidentiary basis” to support the verdict. Any ruling that is within the discretion of the trial judge will be reviewed under an “abuse of discretion” standard. Finally, an error is “harmless” if it did not affect any party’s substantial rights, i.e., it did not make a difference in the outcome.


MBE TIP: When all else fails, try harder!

TIME IS MONEY

Type of Request Timely Motion

Default Judgment 7 days – A defendant must be served with notice of ahearing for a default judgment at least 7 days before the hearing if the defendant has previously appeared in the case.

Depositions 10 – Neither “side” (the plaintiffs or the defendants) maytake more than 10 oral or written depositions without leave of court.

Denial of a Pre-Answer Motion or 14 days – If the court denies a pre-answer motion orGranting a Motion for a requires the plaintiff to make a more definite statement,More Definite Statement the pleading must be served within 14 days.

Temporary Restraining Order 14 days – A temporary restraining order expires after 14days or until a hearing for a preliminary injunction canbe held

Demand for a Jury Trial 14 days – A demand for a jury trial must be filed andserved within 14 days after the pleadings have closed.

Third-Party Practice – 14 days – A defendant is required to obtain leave to file“Impleader” Claim a third-party complaint if he seeks to add the third-party

claim more than 14 days after serving the answer.

Answering Complaint 21 days – Absent a waiver, a defendant must serve ananswer to a complaint within 21 days after being served.

The Plaintiff’s Reply 21 days – The plaintiff must serve a reply to acounterclaim within 21 days after being served.

Amendment as a Matter of Right 21 days – The plaintiff may amend her complaint once,as a matter of right, within 21 days after the defendant files an answer or a pre-answer motion, whichever is earlier. Similarly, the defendant may amend his answer once, as a matter of right, within 21 days after serving it on the plaintiff.

Rule 11’s “Safe Harbor” Provision 21 days – A party has 21 days after being served tocorrect an alleged violation of Rule 11 before the motionmay be filed with the court.

Written Interrogatories 25 - Each party may serve up to 25 interrogatoriesupon any other party without leave of court.

Motion for a New Trial 28 days – A motion for a new trial must be “filed” no


later than 28 days after the entry of judgment.

Renewed Motion for Judgment 28 days – A renewed motion for judgment as a matter ofas a Matter of Law law must be “filed” no later than 28 days after the entry

of judgment.

Motion to Amend Findings 28 days – A motion to amend the court’s findings mustbe “filed” no later than 28 days after the entry of judgment.

Mandatory Pretrial Disclosures 30 days – A party must provide a list of witnesses andevidence the party expects to present or may present in court 30 days before trial.

Waiver of Service of Process 30 days – A defendant has 30 days to return a waiver ofservice of process.

Requests for Admission 30 days – A matter is deemed admitted if a party fails to respond to a request for admissions within 30 days.

Notice of Removal 30 days – A defendant must file a notice of removalwithin 30 days from the time he is formally served or when the case becomes removable.

Motion to Remand 30 days – A motion to remand must be made within 30days except when based on lack of subject matter jurisdiction.

Time for Filing an Appeal 30 days – A notice of appeal must be filed within 30days after entry of judgment.

Answering a Complaint 60 days – A defendant must serve an answer to aafter Waiving Service complaint within 60 days if the defendant has “waived”

service of process.

Service of Process on a Defendant 120 days – A defendant must be served within 120 daysafter the complaint is filed or the court will dismiss the action without prejudice.

Relation Back of Amendments – 120 days – If the statute of limitations has passed, aAdding a New Defendant new defendant may be added to the case if he had notice of

the action within 120 days after the complaint is filed, there is no prejudice, and the new defendant should have known the action would have been brought against him but for a mistake in identity.

Removal Based on Diversity – One year – A case may not be removed on the basis ofThe “One Year” Rule “diversity” if more than 1 year has passed unless the

plaintiff acted in bad faith in order to prevent removal.


MBE TIP: It is recommend that you not go crazy trying to memorize all of the time listed above. The examiners have tended not to test on many of these intricate areas. They are mainly in here for reference.
