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CP OUTLINE: Michalski

12/15/2014
Personal JRX:
Courts power to hear a case based on parties relationship to the forum state. No personal jrx over
a party, any order or judgment court renders does not bind that party.
Constitutional requirement for state & fed. court.
Establishing the Power to Exercise PJRX: (Domicile, in-state service, consent, general jrx, minimum
contacts [specific jrx])
International Shoe: Minimum Contacts Test
o Courts of a state may exercise personal jrx over a D if she has such minimum contacts with the state
that it would be fair to require her to return & defend lawsuit in the state. (Purposefully avail yourself)

Some cases single contact will do, but not casual or isolated

D voluntarily benefits from & is protected by laws, then duty to answer for in-state activities.

Power of court limited to cases arising out of Ds relationship to the state.


Do not have to be in state for minimum contacts to apply if you know acts will cause harm in state. (Ex:
Write defamatory article in Florida, but it is to be circulated in California. Subject to Personal jrx in CA for
damage caused as result of article.)
Contacts focused on time D acted, not time of lawsuit
Specific jrx: In-state activity limited, D only subject to jrx for claims arising out of those specific contacts
Minimum contacts focuses on time of act, not time of lawsuit.
Do not have to be in state for minimum contacts to apply if you know acts will cause harm in state. (Ex:
Write defamatory article in Florida, but it is to be circulated in California. Subject to Personal jrx in CA for
damage caused as result of article.)
Min. contacts is that standard from in rem jrx (cases involving property). (What contacts? Jrx
reasonable?)
Purposeful Availment:
o Purposeful availment: make deliberate choice to relate to state in some meaningful/beneficial way you
have purposefully availed yourself. This is a minimum contact
Stream of Commerce:
o Stream of commerce: 1) A, out-of-state, sells components to B, out-of-state. B puts component into
finished product & distributes into forum state. 2) A sells finished products to B, out-of-state. B resells
in forum state to retailer. Retailer to consumer
o Broad view: minimum contacts because original seller benefits. Narrow: require clearer evidence D
seeks to serve market in particular state (designing for market, advertising)
o Effects test holds that a foreign act w/foreseeable effects in the forum state gives rise to specific jrx.
General jrx: In-state contacts very substantial, D subject to general in personam jrx (any claim)
o So substantial & continuous she would expect to be subject to suit there on any claim & suffer no
inconvenience from defending there.
o Individual: domiciled there.
o Corporations: state of corporation, hqrtrd, continuous presence/doing substantial business in the
forum.
Consent:
o Consent to pjrx can be established by prelitigation agreement, or by waiver (No challenge to pjrx)
Forum Selection Clauses:
*Prorogation Clause: In addition to state w/minimum contacts there is consent to an additional state
unrelated to contacts.
Doesnt take pjrx away from anyone. Much less suspect
*Derogation Clause: (Same as Carnival Cruise)
Makes it very clear to consumer (Benefit)
Suspect to shadiness. Takes min. contacts pjrx away.
*Typically want to bargain forum clauses.
*Other types of clauses: choice of law & arbitration clause.
*Transaction lawyer have to consider forum clause. If you dont, malpractice. If you consider, but dont
include, have to document why.
Service of Process: Service of the initial notice to the D of a filing of a lawsuit against him. Service of initial
summons notifies the D that hes been sued & & the court intends to adjudicate his rights.
o Rule 4: provisions of service of process on various Ds within the US. Apply whether D is served in
district where suit is pending, or in other federal districts.
o (a) Contents of the summons
o (e) Service on individuals: 5 methods (Service can be made by any person over 18 not a party to
complaint)
3 traditional: 1) Personal delivery summons & complaint to the D, 2) leave copies of summons &
complaint at home w/person of suitable age & discretion residing therein, 3) delivering papers to
agent appointed by D to receive papers on his behalf.
4: Serve D under provisions governing service on individuals in courts of the state where fed court
sits. (Ex: bring suit in MA fed district court, P can serve D located in NY via any method of MA state
court service provisions.)
5: Can serve D located out of state where suit is brought via any method of service where D is
located. (Ex: bring suit in MA fed district court, P can serve D located in NY via any method of NY
state court service provisions, even though suit is in MA.)
o (h) Service on corporations: Can serve officer, managing or general agent of the D, or to an
agent authorized to receive service of process. Can serve these people in the same manner as
individuals.
o As it pertains to serving these people via some service method of the state in which the suit is
brought or state in which the D is located, the method needs to be prescribed by the states law for
service on a corporation; not method applicable to individuals.)
o Waiver of Service: P solicit waiver of process by sending D the complaint, two copies of notice of the
action & a request that D waive formal service of summons & complaint upon him.

Ds incentive: 1: 4(d)(1) creates duty to avoid unnecessary expenses of serving the summons. 2:
Cost of service of summons will be imposed on D who refuses to waive service w/out good cause. 3:
D who waives gets 60 days to respond to the complaint as opposed to the usual 20.
o Quick note: Challenge to service of process attacks adequacy of the method used to give notice to
D, not challenge courts power to exercise PJRX. Both must be met in order for a suit to proceed.
o Rule 4(k) Long-Arm Statute (Territorial Limits of Effective Service)
o For the majority of cases, the reach of PJRX in a Fed. Court is the same as the reach of PJRX in the
courts of the state in which it sits. Same 2 ?s must be answered. Has state LA statute authorized
pjrx for this case? Would it be constitutional to exercise pjrx under 14th amendment given the
circumstances of the case.
o There are some other cases authorizing pjrx for fed court where state wouldnt have it, but theyre
limited.
o Other Mechanical Aspects: 1) Server must make proof of service 2) Service made w.in 120 days of
filing the complaint, or action may be dismissed. This is separate & in addition to requirements of any
applicable statute of limitations. 3) All other papers: motions, pleadings other than complaint,
discovery requests, & all other papers filed w/the court must be served on each party to the action.
However, virtually all these papers are subject to more flexible provisions of FRCP 5, w/authorize
service of these papers by mailing them to the partys attorney.
Notice: Separate from pjrx. In order for pjrx to be exercised, the D must be properly notified.
o The fundamental requisite of due process of law is the opportunity to be heard.
Opportunity to be heard is meaningless unless the party has been notified about the court proceeding.
NOTICE IS VITAL
o All cases require form of notice that was sensible under the circumstances & reasonably likely to
actually inform the D of the lawsuit.
*Notice means have to use tools that are such that theres a good chance they will reach the people
you are trying to reach. Compare this with what somebody would do who would reallyyyyy want to
provide notice. If close together considering circumstances, then good enough. If too large a gap, no
go.
*Does not mean the person must be notified. Rather, the attempt to notify him must be
reasonable.
Easier for me to think of notice as another dimension of pjrx, but Michalski looks at it as
a separate requirement. Doesnt effect meaning, but phrase it as separate to pjrx on a
test. (If it comes up)
o

Statutory Limits on PJrx


Every PJRX issue 2 step analysis: 1st) Court must ask if state statute authorizes pjrx under the
circumstances of the case 2nd) Determine whether its constitutional under due process to do so.
(Sometimes PJRX statute may be deemed unconstitutional under certain circumstances)
State legislatures free to grant courts pjrx to limits of due process. One advantage of this provision
is its self adjusting: when due process clause expands, state jrx expands width it.
Enumerated Act Long Arm-Statutes (EALAS): Not all states give courts blanket authority. They pass
long-arm statutes, which authorize their courts to exercise pjrx based on certain contacts w/state. (Longarm signifies how they reach out & submit noncitizens to pjrx).
Some contacts can be within due process, but if not covered by statute, then state no pjrx.
Why not give blanket authority? 1) Many states reluctant to tinker w/statutes that have worked fine
for years & have been construed repeatedly by their courts. 2) list of sufficient acts in enumerated act
long-arm statutes provides some guidance to nonresident about pjrx consequences pertaining to certain
actions. 3) EALAS give courts leeway to reject some cases having little connection to the state w/out
making constitutional pronouncements.
Statutes that may fall outside the scope of due process in some instances may still be applied to others
when it is constitutional
All LA statutes that base pjrx on specific enumerated acts require claim arise out of act itself.
Various EALAS authorize pjrx when there is no physical contact w/state itself but cause effects w/in it.
Ex: Business transactions, supplying things in the state, tortious act out of state causes tortious injury
w/in, etc. (Publish defamatory article in FL, distribute in CA. pjrx in CA.)
Frequently hear EALAS intended to reach limits of due process. Meaning, the specific categories of jrx
conveyed by the LA statute are to be interpreted as liberally as due process allows. Reaching limits of
due process language does not fill in any interstices the provisions fail to cover.
Challenging PJRX:
Special Appearance: Do not believe court has pjrx over you, can file special appearance. :
o Appear before court at beginning of original action & make argument over pjrx. Only submits to pjrx if
mentions merits of the case.
o Many courts have abandoned this view for a more liberal special appearance as that of Federal Law.
May argue pjrx at outset & then merits after, if court does not buy pjrx argument.
o Most states allow D to challenge pjrx, then challenge merits, & still object to pjrx ruling if lose on
merits. (Some state even allow an appeal to pjrx ruling immediately w/out arguing merits. If win
appeal, save time & money. If lose, lose time & money. Only some states allow pjrx interlocutory
appeal because of this risk)
Collateral Attack: Dont make special appearance. Stay in home state. Default judgment entered
against you, & P comes to your state trying to enforce judgment. Then D argues lack of pjrx.
o May be beneficial to argue pjrx in home state for bias reasons.
o If certain jrx is lacking, save a lot of time & money.
o However, if lose pjrx battle in enforcing state, no opportunity to argue merits. Deemed to have
waived them by not showing at original action. Automatic judgment. RISKY.

Venue: *Venue localizes litigation w/in state boundaries. Puts case in specific county (State courts) or
judicial district (Fed. Courts).
State court- state venue law
Fed court- fed venue law (focus of this class)
State court & removed to fed- venue lies in judicial district encompassing the state court from
which the case was removed.
Venue can be waived FRCP 12(h)(1)
Why venue? Convenience. Counties can be on opposite sides of the state, making it costly to travel.
Venue tries to limit these costs by localizing litigation.
Venue must be proper. When not challenged, its waived. When it is challenged, look through the
rules & find out if proper.
Forum Non Conveniens: Forum Non Conveniens:
Common law doctrine that gives a court the discretion to dismiss actions that are more
appropriately/conveniently litigated in a different forum. (Even though court has jrx.) *Apply list of private
& public interest factors:

Private factors: location of parties, relative ease of access to sources of proof (evidence),
availability of compulsory process for the attendance of unwilling witnesses, cost of attendance of
witnesses, possibility of viewing the scene if appropriate to the action, & other practical matters
related to making the trial easy, expeditious, & inexpensive.
Public factors: administrative difficulties of the courts, interest in having local controversies
adjudicated at home, interest in having trial in a forum familiar with the law governing the action,
avoidance of unnecessary problems in conflict of laws or application of foreign law, & unfairness of
burdening citizens in an unrelated forum with jury duty.
More convenient forum is in same judicial system, transfer is the appropriate response.
Harder cases: filed in state court but shouldve been filed in a different state, or case filed in US that
shouldve been filed in another country.

Subject Matter JRX


Federal ?s & Federal Cases: Jrx Arising Under Federal Law
Article III 2 of the Consitution lists the categories of cases Feds can hear:
o Cases between states
o Cases between citizens of different states
o Cases involving foreign ministers & consuls
o Admiralty & maritime cases
o Cases arising under Federal Constitution & Federal Law
o Few other narrow categories of suit.
o Exclusive Federal jrx through specific statutory grants (Bankruptcy, Patent & Copyright, Antitrust,
Postal Matters, IRS cases, Security Exchange Act. Admiralty, Ambassadors, public ministers,
consuls, Case where U.S. is a party, etc.)
Arising Under Fed Law: USCtional Scope
o For jrx of a case arising under fed law, 1 of the parties would have to rely on fed law to establish
either a claim or a defense in the lawsuit, or at least raise a federal issue in proving her case. (Broad
reach)
The Need for both Constitutional Power & Statutory Authority
o Congress establishes lower fed courts & gives them their authority, not AIII 2. (Could give them
blanket authority as AIII 2 gives Supreme Court, or give them authority in some categories but not in
others.)
o If filing suit in fed court, 2 question to ask: 1) is this a case which constitutionally may be
granted to fed courts because granted in AIII 2? 2) If case does fall into 1 of categories of
AIII 2, has congress conveyed jrx over this type of case in a fed statute?
28 USC 1331: Authorizes jrx to federal district courts for cases arising under the Constitution, laws, or
treaties of the US.
o Sounds broad like AIII 2, but construed much more narrowly. The statute does not confer jrx on fed
district courts over cases that involve fed law unless the fed issue is necessary to the proof of the Ps
claim.
o

Mottley Rule: In Louisville & Nashville R.R. v. Mottley (1908) Mottley was given free passes for life to
settle for a prior injury. Thirty-some years later, R.R. refused to renew the passes because of a federal
statute barring railroads from giving free transportation. Mottley sued breach of contract; R.R. used
the federal statute as a defense. Mottley countered raising federal issues that should entitle them to
relief. After going from fed trial court to supreme court, supreme court stopped the case by pointing
out, at their own finding, the case arose from state contract law: breach of contract. Despite R.R.s
federal defense & Mottleys counter, the case was dismissed due to the P only requiring state law to
establish her claim.
Mottley Rule remains the law today primarily because furthers sensible judicial administration.
Courts need to determine jrx from outset; rule allows court to do so based solely of Ps case
before D answers.
If decided that all cases simply involving issue of fed law were the rule, Ps might establish fed
jrx by simply asserting potential defenses based on federal law. P could speculate that a
defense based on federal law will be made, but it might not actually be asserted during the
actual case. Case could go through Fed. Court without ever getting to anything related to
federal law.

Courts could waste time & money going through the litigation process then realize smjrx was
never satisfied & case cannot be heard.
For the most part:
o If the source of the Ps legal right against the D is federal, than lower fed courts have
jrx.
o Sometimes the need to resolve an issue of federal law to prove a state cause of action
will support federal jrx, but only when issues of federal law are substantially embedded
in the Ps claim. (In order for the P to prove her state claim, she must resort to federal
law.)
o Fed SMJRX cannot be waived by a party. The court can raise it on its own motion, even
on appeal.
o Typically, SMJRX objection cannot be made after case is decided. Not clear when default
though.
o Challenge fed & personal jrx, court will decide what is most obvious. Even if that bars P
from bringing claim to a state court w/in the forum (lack of pjrx)
SMJRX: Diversity JRX (DJRX): AIII 2 USC (SCOPE): Federal courts have jrx over cases where the P & D
are domiciled in different states.
o Complete diversity between all Ps & all Ds used to be required, but now diversity jrx is satisfied as
long as some parties to the action are diverse.
o No amount-in-controversy required.
o SMJRX based on diversity in lower Fed. Courts requires (normally) complete diversity when the
case is filed.
o Rationale? - Avoid states prejudice against outsiders.
o Proper parties in diversity cases: 28 USC 1332(a) Read it
1. Citizens of different states
2. Citizen of a state & a foreigner
3. Citizens of different states & a foreigner
4. Foreign state v. citizen of a domestic state * No diversity between citizens of foreign states
How to Determine Citizenship? Answer: Domicile
Individuals: State where person has taken up residence with the intent to reside indefinitely.
o Indefinitely-persons presence in the state is open-ended; no definite intent to leave to make
home elsewhere. This can be met even if person expects to move at some point, but has no
definite plans to do so at any particular time or upon occurrence of a particular event.
o EX: A quits job, moves to FL. Hopes to find new job. Hes established new domicile, even though
he may leave at some point if job-market proves unpromising. Conversely, if he moves to FL for
an undercover job w/intent to return home to CA once job is completed, then no domicile. Even if
he is unsure of exact return date.
Corporations: Domiciled in state where principal place of business & state of incorporation.
o When significant business in multiple states, most courts choose state that contains definable
center of the productive activities if there is one- (manufacturing or other profit-making activity).
o Sometimes called place of operations or bulk of corporate activity test.
o Looks where corporation would be most local; employs the most people, conducts most activities,
most public interaction etc. Support DJRX rationale
o Business so dispersed, principal place of business unascertainable, look to hqrtrs (nerve center).
Unincorporated association: (Partnerships, labor unions, etc.) For purposes of DJRX, are considered
to be citizens of every state in which any member is a citizen.
o

28 USC 1332: Only allows SMJRX based on diversity in lower Fed. Courts when there is complete
diversity. Potential damages must meet amount-in-controversy, 75k * has to be at least 1 cent
over 75k, exclusive of interest & cost. (Only when it is so clear that it is a legal certainty the $75k
wont be met can a judge dismiss for failure to meet the amount-in-controversy.)

Because it is so hard to ascertain the exact amount of damages in a large number of cases, it does not
need to be fact that 75k will be recovered, just needs to be controversy that 75K.01 is possible. (Intangible
damages: hard to quantify: pain & suffering, emotional distress, punitive damages, etc.)
Amount-in-controversy: Aggregation of claims
1. Single P asserts 2 or more claims against single D, amounts can be added together to satisfy
amount-in-controversy.
2. Single P cant aggregate amounts sought from different Ds. Must meet requirement against both.
(Even if 75k is met against 1 D, but not the other)
3. Ps may not add claims together to meet amount requirement. If one P does, but another does not,
then the claim can be heard as long as there is only one D.
Supplemental JRX:
28 USC 1367:
(a) Except as provided in subsections (b) & (c) or as expressly provided otherwise by Federal statute, in
any civil action of which the district courts have original JRX (**anchoring claim), the district courts shall
have supplemental JRX over all other claims that are so related to claims in the action within such original
JRX that they form part of the same case or controversy under Article III of the United States Constitution.
Such supplemental JRX shall include claims that involve the joinder or intervention of additional parties.
(b) In any civil action of which the district courts have original JRX founded solely on section 1332
(Diversity) of this title, the district courts shall not have supplemental JRX under subsection (a) over

claims by Ps against persons made parties under Rule 14, 19, 20, or 24 of the Federal Rules of Civil
Procedure, or over claims by persons proposed to be joined as Ps under Rule 19 of such rules, or seeking to
intervene as Ps under Rule 24 of such rules, when exercising supplemental JRX over such claims would be
inconsistent with the JRXal requirements of section 1332. *This section does not apply to FQJRX
cases
(c) The district courts may decline to exercise supplemental JRX over a claim under subsection (a) if
1. The claim raises a novel or complex issue of State law,
2. The claim substantially predominates over the claim or claims over which the district court has
original JRX,
3. The district court has dismissed all claims over which it has original JRX, or
4. in exceptional circumstances, there are other compelling reasons for declining JRX.
SMJRX requires 3 step process:
1. Must be determined whether Consitutional power under AIII, 2, to hear supplemental claim.
2. Determine if statutory grant of jrx under 28 USC 1367:
a. Grants statutory authority to hear state law claims that are part of the same case.
b. Certain claims in diversity cases, which would contradict the limits on jrx in 1332,
are exceptions.
3. 28 USC 1367 (c) Once court determines Consitutional & statutory authority, must decide, based
on discretionary factors, whether to do so.
ANY CLAIM WIH INDEPENDANT FSMJRX & WITHIN JOINDER & INTERVENTION RULES CAN BE
HEARD, REGARDLESS OF PARTY.
SUPJRX in DJRX cases:
- P add non-independent FSMJRX claims against original D as long as from same events, but no NI-FSMJRX
claims against any other party.
- D can add NI-FSMJRX as long as from original events.
- Ds can assert NI-FSMJRX cross-claims that are from original events.
-Impleaded 3rd party Ps & Ds may assert NI-FSMJRX claims if from same events
-Joined co-Ps can assert NI-FSMJRX claim against diverse D only when one D in the action.
-2 Ps cannot add claims to meet AIC. If one does and other doesnt, other claim can be heard as long as
there is only one D in the action.
SUPJRX in F?JRX cases:
-Allows any additional claim related to events that led to original claim.
*Unless court declines under part (c).

Removal: U.S.C. 1441, 1446, 1447 (Not word for word, outlined)
U.S.C 1441:
(a) Removal JRX only available to D if P couldve commenced case in Fed court. (F?JRX/DJRX).
Case removed from state court, can only go to fed court in the district where the state court lies.
(b) (2) When DJRX, D cant move from state court if hes domiciled in the state where case was
brought.
No reason to seek benefits of neutral site. No local prejudice from courts in home state.
(c) (1) if civil action includes
(A) State court case asserting a FSMJRX claim, and
(B) State claim not under diversity or supplemental jrx, case is removable, but
(2) Fed court has to sever state claim and remand that claim back to state court.
(d) Non-citizen of U.S. in state court for civil action may remove to Fed. Court in that district. Tried by
judge w/out jury.
(f) Federal court not precluded from hearing case that lacks JRX in state court. Doesnt change fact
Fed. Court must have PJRX & FSMJRX over the claim.
U.S.C. 1446:
a) All Ds desiring removal need to file notice in fed. district court pursuant to rule 11 FRCP. Should
contain a short & plain statement of the grounds for removal, together w/copy of all process,
pleadings, & orders served upon such D or Ds in such action.
b) (1) Notice must be filed w/in 30 days of receiving Ps pleading.
(2) (A) Civil action removed solely under 1441(a), all Ds properly joined & served must join in or
consent to removal.
(B) Upon being served w/initital pleading, each D has 30 days to file notice of removal.
(C) Last served D has 30 days. Doesnt matter if 30 days for other people has ran out.. Has to
get everybody to remove with him though
(3) If case state in initial pleading doesnt have fed jrx, but P amends it so there would be FSMJRX,
D has 30 days from that point forward to file notice of removal.
c) (1) Case cant be removed after a year, unless court finds P acted in bad faith to prevent D from
removing w/in that year period.
(2) Ps dollar demand in initial complaint is the AIC. Exceptions for D to assert AIC in notice of
removal:
(A) (i)P sues for nonmonetary relief (such as an injunction)
(ii)P sues for monetary relief of $75k or less in a state in which claim does not cap what
she can recover.
(B) D removes after asserting AIC exceeds 75k, fed court will hold hearing and may keep case
only if it finds by preponderance of the evidence that AIC exceeds 75k. (Burden is on the D
at this point, because she is party attempting to invoke FSMJRX)
(3) (A) If case initially not removable because P asserted 75k or less in pleading, but it becomes
apparent at some point later on, through information constituting paper, that P could recover
more than 75k, case will be removable. Any information that is in the record of the State
proceeding, or in responses to discovery, constitutes paper. (E.g., Something in discovery
phase would work)
(B) Notice of removal filed more than 1 yr after commencement of action and fed district court
finds P deliberately failed to disclose actual AIC to prevent removal, finding shall be deemed
bad faith.
d) Requires D promptly give written notice of removal to all adverse parties & file copy of the notice
in state court. State court precedes no further unless & until case is remanded.
U.S.C. 1447
(a) Any case removed from State court, fed district court may issue all necessary orders & process to
bring before it all proper parties whether served by process issued by State court or otherwise.
(b) May require removing party to file, with fed. district court clerk, copies of all records & proceedings
in State court or may cause the same to be brought before it by writ of certiorari issued to such
State court.
(c) Removal back to state is not irrevocable. If motion for remand is based on procedural issue,
remand motion must be made w/in 30 days of removal or the objection is waived. Removal for
remand based on lack of SMJRX, may be made at any time prior final judgment.
(d) An order remanding a case to the State court from which it was removed is not reviewable on
appeal or otherwise, except that an order remanding a case to the State court from which it was
removed pursuant to section 1442 or 1443 of this title shall be reviewable by appeal or otherwise.
(e) If after removal P seeks to join additional Ds whose joinder would destroy subject matter JRX, court
may deny joinder, or permit joinder & remand the action to State court.
Class hypos:
o Ex 1) Two foreigners, no domicile jrx, but claim is federal. Court has F?JRX
o Ex 2) Domicile proper, AIC is alleged. But D only owes 20k. Not going to meet 75k AIC.
Court wont allow her to receive more than she is owed.

Erie: When does a Fed. Court apply state law?


Vertical choice of law v. Horizontal Choice of Law (HCOL):
A. Horizontal choice of law: The question of which states law governs outcome of case
Choice of applicable law is between equal political entities (states)
Courts make determination based upon doctrines of choice of law
Each state free to adopt its own rules for determining choice of law questions
o E.g., Contracts cases, common HCOL approach is to apply law of state in which parties entered
contract.
o E.g., Tort cases, common (not universal) approach is court should apply law of the place of
injury. P, Ohio, and D, New Mexico. Dont know each other. Both on vacation in HI. D, driving
rental car, negligently hits P. P sues D in NM to recover. Court in NM, applying NMs choice of
law rules, will probly conclude HI tort law governs, because injury was suffered in HI. Thus, NM
court will look to HI law to determine elements of Ps claim and of Ds defenses
o State choice of law rules are treated for Erie purposes as substantive, not
procedural.
B. Vertical Choice of law (VCOL):
VCOL: Issue is whether the Fed. Court should apply state law at all.
If Fed. Court decides state law, then they consider horizontal choice of law inquiry
Erie address VCOL issue
Erie:
1. Federal Court has to apply State Common Law in diversity cases.
Theyre cases based on state law matters. Constitution grants no power to the Fed. Courts to
change this.
Congress has no power to declare substantive rules of common law applicable in a
state
Aright, this doesnt mean that congress cant create law that displaces state law.
What this does mean is Congress can only pass legislation where it has been prescribed
legislative authority by the constitution. This is called Federal Law.
A. Could they have done that in Erie? Interstate commerce, they dam well could have. They
hadnt done it at that point though. Which means they needed to apply state law.
What the Constitution does not grant the fed government power to do is create common law
where the states have their own sovereign power to regulate. Separation of Powers.
Whether common law is prescribed in state statute or handed down by the court is not a matter of
federal concern. 10th amendment
Litigant Equality- The Erie decision destroys the power of litigants to choose between Fed. Court
or state court to seek an advantage based on what law will be applied.
2. Post Erie
o Klaxon-Byrd
After Erie, state common law must be applied to rules of decisions (Substantive law)
Led to issues of whether or not some procedural issues were rules of decision and whether not
they should follow state law or federal law.
Courts went on to interpret Erie as a rule of outcome equality as opposed to litigant equality
(Federal courts are clones of the state for diversity cases, apply state procedural and
substantive)
Byrd changed that to rules that are bound up in substance and not procedural issues.
State procedural rules only need be applied in cases in which failure to apply them will be
outcome determinative.
Mindset was Fed. Court has its own systematic interests as a separate judicial system. Where
the federal interest outweighs the state, & its not an outcome determinative issuefed court
can apply its procedural rules.
3. Hanna: Twin Aims of Erie
Court said if we look at the outcome determinative test from Guaranty Trust well find that at some
point, every procedural variation will be outcome determinative.
Modified-outcome-determination test:
Guaranty was too wooden. Erie had 2 goals (Twin aims of Erie):
1. Discouragement of forum shopping
2. Avoidance of inequitable administration of laws
The question should be whether the different between applying state law and ignoring state law
would lead to the P to prefer the federal forum. If so, the Fed. Court should lean toward applying
state law.
So the facts in Hanna were outcome determinative, but not in MOD test sense:
No litigantin assessing where to sue at outset of litigationwould sue in Fed. Court just to avoid
the personal service of process requirement of state law.
However, this is all dicta. It applies to the Rules of Decision Actsubstantive issues.
Hanna was a question of procedure, so rather than the RDA, it was the Rules Enabling Act
(REA)
The REA allowed the promulgation of the FRCPwhich are drafted, approved by the supreme
court, and then approved by Congress.
Supreme Court and Congress makes sure the rules pass both parts of the REA 1) Only procedural
matters 2) Do not stray into matters of substance.
When the rules are approved at both levels, they become FRCP and trump state law.
o Why? Supremacy ClauseFederal law is the supreme law of the land.
The Two Prong Analysis
What it finally comes down to is this; When deciding the VCOL question:
Court asks federal directive on point (Constitution, federal statute, FRCP); if yesthen,

1. (Hanna Prong) Check validityPasses constitutional test arguably procedural, and statutory
test (REA)really regulates procedure
Federal directive not on point then,
2. (Erie Prong) If no federal directive on point, Erie or (RDA) analysis must be made:
* Modified-outcome-determination test (Twin aims of Erie):
Discouragement of forum shopping
Avoidance of inequitable administration of laws (Give those invoking diversity
access to federal rules that those within the state can not invoke in the same
circumstances)
The question should be whether the different between applying state law and ignoring
state law would lead to the P to prefer the federal forum. If so, the Fed. Court should lean
toward applying state law.
Harlan Concurrence in Hanna: The focal point of any test to determine the applicability of
state or federal law should be an inquiry into whether the choice of rule would substantially
affect those primary decisions respecting human conductSubstantive or procedural?
Weigh federal and state interests
If federal interest high- outweighs state rulefederal rule applies
State law--If yes to the MOD test, Harlan concurrence & federal interest not high.

i.

Federal directive on point:


Federal directive is only on point when it clearly covers the point in dispute (Direct conflict):
Courts read federal directives very narrowly (any doubtsgo to Erie)
If only one interpretation of the rule & it directly answers the question in dispute (on point)
If two interpretations are possible, take the narrower one and assess it with state interests
under Erie prong
Reason being, Hanna means federal directive (if valid), and federal law trumps state law in all
circumstances: No assessment of outcome-determination.
Reading narrowly allows fed court to sneak peak at state law and its interests in Erie prong, and
then then make a choice.
Federal directive must apply to facts of the case
Determining Validity
Constitutional provision: if on point, always valid
Statute: Valid (beyond scope of class)
FRCP: pass both levels of REA, always valid (never been held invalid)
Unwritten doctrine, common law rule, etc: State law

Pleadings: The documents in which claimants set forth their claims and defending parties respond to the
claims and raise defenses.
I.

II.

Overview:
Today their principle role is to inform other parties of each party's contentions.
Relatively brief stage and gives way to the discovery phase.
Pleadings set the basic boundaries and tenor of the litigation, in discovery the parties learn the
details and find whether the real-world evidence supports the contentions they made in their
pleadings
P must allege a cognizable claim in her pleading (usually called the complaint) to get the case in
the system.
Cant do this, the case can be dismissed at the pleading stage, w/out wasting litigant and judicial
time in discovery and other aspects of litigation.
Modern procedure has made it easier for P to get past pleading stage & get to discovery.
o Critics: given expense of discovery phase of litigation, commentators and judges believe that the
pleading barrier should be raised to make it more difficult to state a claim & get case into
litigation stream
D must respond in timely & proper fashion after being suedMake motion or file & serve pleading
(answer)
o Failure to make appropriate response puts D at risk of losing by default
o Issues properly asserted by P and denied by D are joined and case can go into discovery on
such issues
Modern pleading generally liberal about allowing parties to amend pleadings as they adapt to facts
of case.
Pleadings still important; lawyer can get her & client into trouble neglecting requirements of
pleading rules.
Pleadings in Modern Practice
FRCP 7(a): 3 basic pleadings
(a) (1): The complaint
(a) (2)(3)(4) & (6): The answer
(a) (7): The reply
FRCP 10: Gives guidance for the form of all pleadings
(a): Concerns form of all pleadings and requires each must have caption w/courts name, a title,
file number, and rule 7(a) designation.
(b) : requires party to set forth allegations in numbered paragraphs; limited as far as
practicable to single set of circumstances
(b) & (c): allow incorporation by reference of paragraphs
Instead of reiterating allegations of paragraph as needed, party incorporates previous
allegations by reference
(c): party may attach a written instrument as exhibit to pleading and it is considered part of
pleading

E.g., Dispute over contract; append copy of contract to the complaint.


Details of Pleading: Caption w/ numbers, court initials, parties, body of complaintsee pg. 311 &
312
FRCP 11 (a): Parties are not required to plead under oath. Pleadings can be executed on basis of
best information and belief of the parties; lawyer signs them. (Verified pleading is under oath, very
few)
III. The Complaint
FRCP 3: Case is commenced when P files the complaint
FRCP 8 (a): Sets forth three requirements of any complaint.
1. Statement of the ground for subject matter jrx.
2. Statement of the claim
3. Demand for the relief sought
Complaint lacking any is subject to dismissal, but court usually permit P to correct problem &
file again
A. FRCP 8 (a) (1): Statement grounds for SMJRX
Complaint must contain a short and plain statement of the grounds for the courts jrx. (Not PJRX)
(a) (1): Should not make it too shortlook to the forms in the appendix of rules booklet
o Form 7(a): Federal question jrx
o Form 7(b): Diversity jrxAsserts citizenship of both parties in different state and meets AIC. No
explaining.
o Always use citizenship in diversity cases, not resides
B. FRCP 8 (a) (3): Demand for Relief Sought
Requires P to make demand for relief sought, often called Prayer for relief. Put at the end of the
complaint
Sometimes called ad damnum clause when seeking monetary relief.
Damages usually pleaded as a lump sum. Dollar figure or damages in an amount to be shown at
trial
Diversity cases have to allege exceeds $7k, but can also include judgment amount determined at
trial.
Rule 54(c): P can receive whatever shown appropriate at trial, not limited to amount demanded in
complaint
Except default judgments; cant exceed amount sought.
C. FRCP 8 (a) (2): Statement of the Claim
P must set forth short & plain statement for the claim showing that the pleader is entitled to
relief.
Complaint can be attacked for two kinds of insufficiency: Legally insufficient or factually insufficient
Challenging the sufficiency you make a motion to dismiss for failure to state a claim under FRCP
12(b)(6)either granted or denied.
Legal Sufficiency
Complaint doesnt state a claim, court may dismiss sua sponte on its own, w/out motion by party
Complaint sets forth several purported claims, but one defective, court may dismiss defective
claim.
Usually made w/leave to amend, allows P another chance to state a legally sufficient claim.
At some point court dismisses w/out leave to amend if its clear P cant state sufficient claim.
(Waste $)
Ruling on legal sufficiency, court looks to face of claim. Does not look at evidence.
If P proved everything alleged her, would she win?Other words, does law recognize a right to
recover on facts alleged? If no, then no point in having litigation continue. If yes, litigation
continues. (Exs 318)
If complaint dismissed because law doesnt grant right to recovery from claim stated, P can appeal
and attempt to have law changed by appellate court. (Trial court cant do this; they are bound by
appellate and supreme court.) If appellate court changes law, case remanded and trial court
applies new law. If not, judgment affirmed against P.
Counsel must address all elements of the claim in the complaint for it to be legally sufficient
Factual Sufficiency
How much factual detail in the complaint to support the claim?
Goal of the drafters was to lower the barrier erected by pleading rules to entering litigation system.
The idea is that the P is not in a position to plead much detail at the outset of litigation, and
pleading rules should not impose an unrealistic barrier to her getting to the discovery phase of
litigation.
FRCP 8 requires P give D fair notice of what the Ps claim is and the grounds upon which it rests
shorthand notice pleading
Very little is required (Forms 11-15), but lawyers usually include more. Why?
Standard is a floor, not a ceiling. Adding more is good just to be safe your complaint is not
sufficient
Pleading launches us into litigation. When writing for P, we have first opportunity to frame the
dispute. If phrase our story well, we paint a clear picture to the court for the rest of litigation.
Makes our lives easier.
Most cases dont go to trial. Much that litigators think about is how to get a good settlement. To
do this, we show in the complaint that our factual story is well developed enough to make the
defense miserable at trial. Could help us get to good settlement sooner.
IV. Iqbal (Usage of FRCP 8)
Majority opinion clarified methodology set forth in Twombly
1) Court ruling on motion to dismiss under 12(b)(6) ignores legal conclusions alleged in the
complaint.
2) Court looks to factual allegations to see if claim is plausible.
Court is to draw on its judicial experience and common sense.
Critics say it makes the standard subjective depending on the judges background.

Ds in case could be liable only if rights they allegedly violated were clearly established at time
they acted.
Legal allegations: The court said failure to state a claimnothing more than formulaic recitation of
elements of the claimignored legal conclusion
Factual allegations: Complaint made statements consistent with Ds acting on the basis of race,
religion etc. However, the claim was not plausible given the likely explanation of the 911 attacks.
Should not have come to any surprise that law enforcement was directed to those who might be
suspected link to attacks.
V. Ds Response: Answer & Motions
o Overview
FRCP 12(a)(1) : D respond w/in 21 days of being served w/process.
Starts day after process is served, and if last day is weekend or holiday, then D may respond next
business day. E.g., June 2 served, 21 days starts June 3rd. 21st day is June 23rd. Sat., Sun.,
Holiday, next business day is good.
(a)(1)(A): D serves and files a pleading called an answer, or (a)(4) which is a motion.
Motion is not a pleading, its a request that the court do something.
Can be made in writing, lack of PJRX or transfer venue. Can be made orally, motion to strike
witnesss answer at trial.
Answer or motion must be filed w/in 21 day period. If motion is filed and dismissed, upon notice of
dismissal the D has another 14 days to file answer, even if exceeds 21 days after complaint was
filed.
Notice of dismissed motion on July 10, file answer no later than July 24.
Defensive Motions: 12(b) 12(e) 12(f)brought in lieu of answer
Responding by answer or motion is strategic; Motion may dismiss case altogether.
On the other hand drafting answer may be appropriate when D needs more time to develop the
facts supporting particular motion to dismiss.
Often defense responds w/ both: Move to dismiss for lack of PJRX; court grants motion case is over.
But if court denies, D must serve and file an answer. Important not to fuck w/waiver provisions
12(g) & (h) though.
Court free to order different timetable, and 6(b) allows motion for extension of time
Parties often stipulate to extensions, but they must be approved by the court to be effective.
Parties agree to extension of 45 days from service, draw up written stipulation for judge to sign.
Important to note stipulations may relate specifically to answers not a response. Might not have 45
days to file a motion.
Responding by Motion under Rule 12(b)
7 defenses: raise them in answeraffirmative defenses; or by motion
1. Lack of SMJRX, 2. Lack of PJRX, 3. Improper venue, 4. Insufficient process, 5. Insufficient service
of process, 6. And 7. Failure to join absentee under Rule 19.
Most important thing to learn about 12(b) defenses:
12(g) and 12(h): in a nutshell, require D to assert 12(b)(2), 12(b)(3), 12(b)(4), 12(b)(5) in FIRST
RESPONSE.
Thus, if 1st response is a Rule 12 motion, the defenses must be included or theyre waived.
The other defenses can be raised at anytime through the end of trial.
Motion for Judgment on the Pleadings under Rule 12(c)
Exact same as 12(b)(6) motion for failure to state a claim. Judgment on pleading is just
brought after the D has served her answer.
Court does same thing; takes all allegations as true & determines whether they state legally
cognizable claim.
We know everything we need to decide the question. No issue of fact, just of law. (Discovery
and rest of litigation isnt necessary)
Motion for Definite Statement under 12(e)
D brings motion for more definite statement when its so vague or ambiguous that D cannot
reasonably prepare a response.
*If theres not enough there move for 12(b)(6) motion to dismiss.
Must be made before filing answerintuitive; shes saying so vague she cant respond.
Doesnt address legal or factual sufficiency like Rule 12(b)(6) motion.
Aimed at a complaint that just cant be understood.
Court grants motion P has 14 days to make it more clear.
D must respond within 14 days after being served w/clarified complaint.
Can only be used to challenge responsive pleading (P cant 12(e) motion an answer to the
complaint)
Motion to Strike under Rule 12(f)
Permits any party to strike pleadings or portions thereof.
Court may strike insufficient defense or any redundant, immaterial, impertinent or scandalous
matter.
May be legally/factually insufficient
May grant motion to strike w/leave to amend so D can assert defense appropriately.
Strict timing of this motion
D required to make motion before responding to complaint, and P must move to strike w/in
21 days after being served w/Ds response.
Court can strike on its own; Even after an untimely motion to strike, court can consider it and
strike on their own accord if they think its necessary.
Motion to strike disfavored; often used to delay proceedings. Thus, rarely granted.
Courts only grant when moving party shows the matter to be stricken will cause her some
harm if left in pleading.
Rarely successful in cases tried to the court because judge wont allow inappropriate
allegations in a pleading.

Sometime motion to strike might be used to determine important issue early in the
proceedings. E.g., parties disagree over trial by court or jurymotion to strike jury demand
will determine issue before trial.
Rule allows striking scandalous matter: Scandalous allegations might hold them up to
ridicule to the jury or public.
Unduly derogatory allegations will be stricken
Party not entitled to have all scandalous allegations stricken though. If relevant to case (case
is of scandalous matter) it may be critical to partys argument and damages.
Responding by Answer
Answer is a pleading (remember motion is a request for the court to do something prior to the
answer)
D must accomplish 2 primary goals: FRCP 8(b) respond to allegations in complaint and 8(c)
raise affirmative defenses
FRCP 8(b): Go through each allegation word by word to ensure careful response.
8(b)(1)(A) & 8(b)(5): 3 possible responses to Ps allegations: 1) Admit allegations 2) deny 3)
lack sufficient information on which to admit or deny8(b)(5); has the effect of a denial if
done properly.
FRCP 8(b)(6): If you dont deny an allegation, it is considered an admission. Be careful!
(Doesnt constitute an admission of damages though.) (Ex. Pg 338)
Admitting allegations: Usually some allegations have to be admitted to. Cant deny in bad
faith (R11).
Ex: DJRX is established, admit to it.
Once admitted to certain facts, no need to adjudicate them.
Lack Knowledge or Insufficient Info to form belief about truth of allegation
Rule 11 requires states D cannot use this approach if shes in possession of relevant info or
if matter allege is something of public record.
Ex: If D has no precise recollection of something, but has the info in her files, she has to
attempt to look for it. If she does in good faith & still cant find the answer, she may say so
works as denial.
Denying Allegations
Fairly respond to allegation. Keep it simple. Dont get argumentative. No new facts. Just
deny.
If D denies allegation, the issue is joined, meaning it requires adjudication.
D denies the allegations of Paragraph 6thats it. If you dont do this sufficiently, it
will be an admission.
Drafting an answer: List the paragraphs you want to admit & those you want to denyD
admits allegations of paragraph 1 and 6 of the complaint, D denies the allegations of each
other paragraph of the complaint.
Usually more complicated; Deny and admit some things in same allegation.
Rule 8(b)(3): deny only part of allegation, specifically deny designated allegations or
generally deny all except those specifically admitted.
8(b)(4): Party that wishes to deny part of allegation must admit the part that is true and
deny the rest.
General denial. First sentence 8(b)(3)D denies each and every allegation in complaint
Have to be careful w/general denial though. Usually not warranted. If general denial is filed
and unwarranted, face Rule 11 sanctions.
If there is anything that should be admitted, D should admit it.
Raising Affirmative Defenses: FRCP 8(c)(1)
Unlike responses just discussed, affirmative defenses inject new facts
An affirmative defense is additional material to an allegation that, if proven true, entitles D
to judgment on the allegation.
19 of them listed, but not exhaustive (self defense is not listed)
Failure to assert can waive the defense
If it is not pleaded and at trial you try to assert evidence, P can object evidence is at
variance with pleading and the court should refuse to allow it.
Think of AD in terms of elements. P has burden to prove all of the elements. She may prove
them all with the evidence she has, but you can assert affirmative defense that would
negate her proof. E.g., Battery claim you assert affirmative defense of self defense.
(element is established in absence of it, but when asserted, the element is destroyed.)
P wins if A+B+C+D are proved unless D establishes affirmative defense
Sometimes D must assert affirmative defense of truth
E.g., Defamation case P must assert a negative. She cant prove a negative. I am not a
prostitute for x, y, and z. How do we know that means shes not a prostitute? D is in
best position to offer proof on the issue. Law accommodates for burdens of pleading and
proof pragmatically.
VI. The Reply
Reply is a pleading made in response to the Ds answer.
FRCP 7(a)(7)reply only required if court orders one. Why? Reply isnt necessary. Other
provisions protect P from anything raised in Ds answer
FRCP 8(b)(6) if responsive pleading is not required, allegation is considered denied or avoided.
Laymansany allegation in Ds answer is automatically deemed denied by P.
VII. Heightened Pleading Requirements: FRCP 9(b)
Certain topics require more detailed factual allegations
FRCP 9(b): Fraudintended to protect the other party from the reputational harm caused by the
imputation of fraudulent behavior.
Assertions of fraud are often made for nuisance value or increase chances of favorable
settlement.
*Fraud claim should be given in detail to enable accused to respond and defend.

Obvious purpose of heightened pleadings is to make it more difficult for allegations to get past
the pleading stage and into the litigation stream.
Fraud is often asserted as a claim, but 9(b) applies to all parties who assert fraud or mistake.
Difficulty is determining how much detail is to be applied. Drawing line between staying simple in
conjunction with 8(b)(2) and being detailed enough to support the rules intent has proven
difficult.
Appropriate approach enforcing rule 9(b) is grant a motion to dismiss for failure to state a claim
under Rule 12(b)(6) or motion to strike under 12(f).
Logistics of Rule 9(B):
o Opposing party must raise the heightened pleading requirement of rule 9(b). Failure to do so
waives the requirement of particularity.
o Conclusory fraud allegations arent sufficient
o The allegation should include identity of persons making it, when and where the fraud
happened, how it was communicated, and the resulting injury.
VIII. Hypothetical and Inconsistent Pleading
FRCP 8(d)(2): Party may set out 2 or more statements of a claim or defense alternatively or
hypothetically, wither in a single count or defense or in separate ones. if a party makes
alternative statements, the pleading is sufficient if any of them is sufficient.
FRCP 8(d)(3): Allows a party to state as many separate claims of defenses as it has, regardless of
consistency.
Policy: Recognizes party may not be in a position at the outset of the case to know what actually
happened or what facts may be established at trial. Permits parties to plead alternative and even
more inconsistent theories and facts, and recognizes that the parties will learn about the facts
through discovery.
Frees the parties of the burden to guess which set of facts will be established at trial.
E.g., McCormick v. Kopmann Pg. 351
Rule 11 requires the claims are still made in good faith.
Not limited to Ps either. D can adopt alternative theories in defenses and counterclaims.
IX. Rule 11 and Other Sanctions: Professional Responsibility
Aim: To ensure veracity in pleading and other elements of litigation practice.
11(a): Signature from attorney on every pleading, written motion, and other paper.
1. Court must strike any document that is unsigned unless omission is promptly corrected
11(b): Signature is a certification to the courtsays by signing the person certifies that to the
bets of the persons knowledge, information, and belief, formed after an inquiry reasonable
under the circumstances, the 4 items are true.
o *Main Point11(b) presumes lawyer made reasonable inquiry under circumstances before
signing document to be filed in court.
o Reasonableness depends on facts of the case and timing
o Attorney re-certifies all things in complaint are true in subsequent signing, filing, or later
advocating something asserted in the signed document.
1. Under 11(b)(1) signer certifies the document is not presented for an improper purpose such
as delay or harassment.
2. Legal contentions in the document are warranted by law and not frivolous
o Protects creative lawyering and the assertion of novel theories of law; only limitation is
they arent frivolous.
3. Signer certifies the factual contentions have evidentiary support, or if specifically identified,
will likely have evidentiary support after reasonable opportunity for further investigation
and discovery.
o Protects lawyer who believes evidence will be found to support a factual assertion
4. Same thing as b(3) but aimed at Ds asserting denials w/factual contentions that have
evidentiary support.
11(c): Raising violation of Rule 11
(1)(B) Courts raise violation of rule 11 by entering an order to show cause (O.S.C.)
requiring a party, attorney, or law firm to show cause why specified behavior did not violate
rule.
(2) Party files motion for sanctions specifying what conduct allegedly violated rule 11(b)
and must be brought separately form any other motions.
However, Safe Harbor Provisionparty moving for sanctions has to give the D 21 days to fix
the issue before filing w/court.
*Intended to save court from being saturated w/11(b) motions.
(4)- The actual sanctions (imposed in the discretion of the court; purpose of sanctions not to
punish, but deter)
Nonmonetary sanctions are appropriate; reprimands, warning, directives that offender
take some act
Occasionally court will order lawyer to circulate the judicial opinion concerning
misconduct to her client and law partners.
Permits court have lawyer pay pentaly to court
May require offender to pay all or part of litigation expensesexpressly including
attorney fees.
Party represented by attorney does not bear any costs incurred by attorneys rule 11
violation
11(d): Discovery documents do not have to be signed under Rule 11
X. Amended and Supplemental Pleadings
FRCP allow parties to amend their pleadings because they will learn facts that make it necessary
or desirable to change what they asserted earlier.
Amendments of Right and Leave to amend (Leave to amend just means court allows the party
to amend)

Rule 15(a)(1): Amendment as a matter of courseCourts approval isnt necessary,


just file and serve amended pleading.
(a)(1)(A): D has right to amend once w/in 21 days after serving her answer (can save the
waived 12(b) motions if amend within this period)
(a)(1)(B): P has a right to amend w/in 21 days after being served w/Ds answer or preanswer motion.
Rule 15(a)(2): Permissive pleadingsapply in all cases in which there is no right to amend.
Only allowed if opposing party consents in writing or the court grants leave to amend.
To obtain court permission have to file a motion for leave to amendcourt has liberal
discretion.
Court must state its reason for denying a motion to amend.
Applies when the right to amend under 15(a)(1) expires.
Rule 15(a)(3): When P amends, D (unless court says otherwise) must respond to amended
pleading within the 21 day window allowed for the P to amend or w/in 14 days (whichever is
longer).
Amendments During and After Trial: Variance
Rule 15(b)Called Variance: Party seeks to introduce evidence at trial of a claim or defense
that she didnt plead.
When party seeks to introduce evidence at trial that goes beyond the scope of pleadings,
other party may object & ask court to exclude the evidence, so it will not be part of the trial
record the fact-finder considers in reaching a conclusion
Two possible variance scenarios: 15(b)(1) 15(b)(2)
15(b)(2): When party proffers new evidence not in pleadings, opposing party can 1)
Allow/forget to objectevidence is included and treated as if raised in initial pleading; or 2)
Object to proffered evidence.
If party objects and court agrees it is out of scope of pleadings, court can uphold objection
and bar the evidence
However, when party objects on the grounds of variance, the party proffering evidence can
move to amend the pleadings and the court may permit them to do so.
o Standard for allowing to amend is in 15(b)(1): Court should freely permit amendment when
doing so will aid in presenting the merits & the objecting party fails to satisfy to the court
that the evidence would prejudice the partys action or defense on the merits.burden is
on the other party to show rejudice
o Amendment like this is rare; Discovery has already taken place and probably for a long
period of time, theres probably a jury that the court doesnt want to burden by allowing
time to amend, its moving partys fault.the amendment has to truly advance the
decision on the merits w/little if any prejudice to adversary.
Relation Back (Rule 15 (c))
15(c)(1)(B): P/D may seek leave to add new claim/raise new defense after the statute has
run.
15(c)(1)(C): P seeks leave to join a new D after the SOL has run.
Policy ClashOne hand we favor resolution of disputes on merits so we favor liberal
amendment policy; other hand SOL protects D from assertion of old claims so this unfairly
lengthens the time for which she is subject to suit
Relation Back: Treats amended claim to relate back to pleading that was filed during the
SOL
Circumstances:
15(c)(1)(A): Statute providing period of limitations expressly allows for relation back then
there will be relation back.
15(c)(1)(B)relation back is permitted if the amended pleading arose out of conduct,
transaction, or occurrence set out in the initial pleading.
Rationale: If arises from same events as original pleading, D was put on notice of her
potential liability before the statute expired.
Courts routinely permit amendment when claim only adds a new theory of liability arising
from same real-world events alleged in original complaint.
Only when amendment raises new matter which D was not fairly put on notice of by original
complaint would relation back be inappropriate
Rule 15(c)(1)(C): Adding a new D; must satisfy three requirements
1) claim arises from same conduct, occurrence, etc. as original complaint
2) W/in 120 days of filing the original complaint the new D has received such notice of the
suit that she wont be prejudiced in defending--(c)(1)(C)(i)
3) W/in same 120 day period, new D knew or should have known that but for a mistake by
P, new D would have been original D. (E.g., P gets the name of the D wrong; usually a
corporation mix-upCarnival cruiselines international instead of Carnival Cruiselines Fl.
Inc.)
Only thing that must occur is that the original complaint is served within SOL. New D
doesnt have to be put on notice during the SOL, just during the 120 days after complaint
is filed.
Supplemental Pleadings (Rule 15(d))
Any transaction, occurrence or event that happened after date of the pleading to be
supplemented.
There is no right to supplemental pleadings like there is to amend pleadings.
Must be raised on motion by party seeking leave to supplement, district court has great
discretion in decision
Most courts allow unless cause unduly delay or prejudice, or if party seeking supplement is
guilty of bad faith
Supplemental pleadings permitted even if original pleading was defectiveP fails to state a
claim, but permitted to supplement her complaint, seems likely court will allow D to respond.

Summary Judgment
2 Phases of Summary Judgment:
W/S-Jment, the P has stated a claim. The case is in the litigation stream & beyond the pleading
stage.
Phase 1: somebody moves for S-jment, theyre saying there is no genuine dispute as to any material
fact
Phase 2: If there is no genuine dispute as to any material fact, all that remains is a question of law,
which the judge may decide w/out trial.
Different from judgment on the pleadings. Judgment on the pleadings are based solely on the
allegations in the complaint.
Assessing Whether Appropriate:
Court may go beyond the pleadings & consider evidencesworn statement that might be proffered if
trial were held.
Summary judgment is made on paper, there is no live testimony or jury hearing the motion.
Everything is written and attached to paper.
Court can pierce pleadings and look at what actually happened in the real world beyond mere
allegations in pleadings of what parties thought happened.
Whenever materials proffered show there is a dispute of fact, S-jment should be denied.
Pleadings dont suffice as evidence because they typically are not made under oath. If a party
offers there pleadings to dispute fact, they are offering their opinion/belief that there is dispute,
but this is not sufficient evidence to prove that there actually is a dispute.
Pleadings can be useful when a party has failed to deny something and it works as an admission.
Court can rule S-jment on that issue since the admission serves as recognition there is no dispute
of fact.
Moving for S-jment
Any party can move for S-jment; claimant may seek S-jment on her claim or D can seek S-jment on
an affirmative defense.
Motion for S-jment does not have to be on entire case. Can be on one issue, usually called partial

S-jment. (Elements A,B,C,DD has no evidence to dispute element A, P can move for summary
judgment and it should be awarded.)
When motion for S-jment is granted, the issue is settled and does not need to be adjudicated at trial.
Judge will tell jury that specific issue has been established.
Material Used:
56(c)(1): Party can rely upon certain parts of the record depositions, documents, ESI, affidavits
or declarations, stipulations (those made for the purposes of the motion only), admissions,
interrogatory answers, or other materials.
Rule does not require affidavits (FRCP 56(c)(4)), but generally very useful to a party moving for
S-jment
1. Affidavits must be made on personal knowledge
2. Set out facts that would be admissible in evidence
Conclusory statements arent viable facts. I know D signed it.
3. Show that the affiant or declarant is competent to testify on the matters stated
o Aimed at ensuring they contain the sort of informationunder oath, based upon personal
knowledge (not hearsay)that might be admitted at trial. (Affidavits themselves might not be
admitted at trial because they would constitute hearsay if they would be used to establish the
truth of what they assert.)
o Drafted by lawyers and can be tailored specific to S-jment.
o Must be signed by affiant, so lawyer must be careful to ensure it reflects persons true
recollection
Documents proffered as evidence for S-jment must be authenticatedmust provide admissible
evidence from a person w/firsthand knowledge sufficient to allow her to have the document
admitted into evidence.
Depositions, answers to interrogatories, various other discovery documents may be look
at by court because they are also made under oath.
The information that is usable w/in these materials must be meet the same requirements as an
affidavit.
Like admissions in pleadings, court may use other admissions made in open court, in
stipulations of the parties, or in correspondence w/the court.
Court may take these matters as admitted and thus not subject to genuine disputepermits
court to enter summary judgment as a matter of law.
FRCP 43(c) allows courts to hear live testimony if the motion is not based on facts in the record,
but its rarely permitted because the purpose of S-jment is to avoid trial. Live witness testimony is
like a mini trial.
For a P to win summary judgment, must establish proof of every element of claim to show
that there is no reasonable way the D could win at trial.
Parties can move for cross-motions while the other party has moved for summary judgment asserting
their evidence is so more persuasive than yours and a jury could not find for the other party based on
that evidence.
Burden Shifting
When party moves for S-jment supported by evidence, burden shifts to adversary to proffer evidence
showing there is a genuine dispute of material fact. Cannot defeat motion by merely relying on
pleadings.

If pleadings were allowed, then there would never be an instance where there wasnt a genuine issue
and S-jment would not serve any point.
If party moving for S-jment fails to demonstrate there is no genuine dispute of material fact, she
should lose. (True even if other side offer nothing in response)
If this occurs, its because the evidence proffered is insufficient or inadequate. (might only submit
pleadings/might submit evidence that isnt necessarily on point with the issue in question/might
assert no issue to a fact that is not material)
Party who does not have the burden of proof at trial may move for summary judgment w/out producing
evidence.
Party points out that the record is devoid of evidence supporting the other partys position.
(Claim/element of claim)
Material Fact
Materiality is determined by the substantive law creating the claim or defense.
A material fact is one that might affect the outcome of the case under governing law.

Celotex:
After Celotex, a party who does not have the burden of proof at trial may move for summary judgment
w/out producing evidence. (Permitted by 56(c)(1) when a fact cannot be . . . supported)
Party points out that the record is devoid of evidence supporting the other partys position.
(Claim/element of claim).
Especially helpful to Ds, and allows them to move for S-jment on basis of an absence of record
evidence supporting an element of the Ps claimforce P to put all cards on the table & produce
evidence support that aspect of her claim.
Evidence must be viewed in the light most favorable to the nonmoving party.
You have to produce your evidence early otherwise opposition can move for summary judgment before
youve put it together and its too late for you to proffer.
No Genuine Dispute
Genuine dispute means nonmoving party has to come up with admissible facts to dispute the issue
raised in S-jment
Claims not based on fact dont raise genuine dispute.
There only has to be 1 piece of evidence to dispute the facts, even if the other side has 100 pieces of
admissible evidence against your 1.
Has to be genuine though When a party moves for summary judgment, the nonmovant must either
produce evidence to establish that they can meet the burden of proof on a necessary element of the
claim, or directly contradict the evidence proffered by the moving party. To directly contradict the
moving partys evidence, the nonmovant must produce testimony from persons familiar w/the
particular events to which the movants witnesses testified or must otherwise cast more than
metaphysical doubt on the credibility of that testimony. General evidence that does not contradict the
more specific evidence asserted in a motion for summary judgment isnt usually enough to defeat the
motion.
CRED ISSUES & COURTS DISCRETION
Court is never required to grant motion for summary jment
It has discretion to conclude that it would be more appropriate to go to trial rather than to grant the
motion
It is completely legitimate to resolve reasonable doubts against entering summary jment.
One source of doubt may be credibility
Answers to interrogatories and affidavits can be crafted with care, with assistance of counsel, and
are given w/out cross examination
Deposition testimony on the other hand is given livethis makes courts less nervous about
accepting deposition testimony at face value.
This doesnt mean that affidavits and answers to interrogatories cant be taken at face value;
simply raises possibility that doubts about credibility may make summary judgment inappropriate.
One instance court denied summary judgment noting that the affiants credibility could be
questioned because any contrary statement in the affidavit would have harmed her position in her
pending criminal case.
Court has no discretionand must deny summary judgmentif the admissible evidence shows a
genuine dispute of material fact
Ex: Suppose one party produced admissible evidence showing that the traffic life was green at the
time of the accident and the other party produced admissible evidence that the traffic light was red
Court must deny motion for summary judgment for the simple reason that, here, admissible
evidence creates a genuine dispute as to a material issue of fact: color of the light at the time of
the accidentprecisely the situation in which we need a trial to resolve a dispute of fact.
Court should not decide credibilitythat is, who is lying and who is telling truthon a motion for
summary jment.
Put another waycredibility of the affiant is a genuine question of fact.
Question of which affiant is telling the truththe one who said light was red or one who said it was
greencant be judged w/out fact finders seeing the two testify at trial.
Similarly, court generally should not grant summary jment simply because the moving party
produces more affidavits than the opposing party.
So if the party claiming the light was green had five affidavits to that effect and the party
claiming it was red had one, summary jment would still be denied.
Timing of the Motion

Rare cases a court may enter summary jment on its own motion; ordinarily a party will make a motion
for summary judgment.
Rule 56(b) provides that a motion for summary jment may be made at any time until 30 days after
close of all discovery
As a practical matter, summary jment generally becomes an option after the parties have engaged in
some discovery and the lack of a genuine dispute on a material fact has become obvious (at least to
the moving party)
Court has great discretion in setting the timing for hearings and responses to motions for summary
jment and will usually be quite generous w/time limits
Ex: when appropriate, it may allow the responding party time to conduct discovery on issues
subject to the motion
The motion itself will include a brief, arguing to the court why a summary judgment is appropriate,
supported by affidavits or declarations and other documents used to support motion.
Opposing party will also file a brief & should also append affidavits or declarations and other
documents in opposition to the motion.
It is incumbent on the parties to put the specific relevant evidence in the judges hands w/the motion
papers.
Discovery
I. Generally:
FRCP 26(b)(1): Unless the court orders otherwise, parties may discover any nonprivileged matter
that is relevant to any partys claim or defense.
The parties find out what the other sides claims or defenses are really all about & what facts
theyre based upon
Typically supervised by the parties
Court generally only gets involved when there is a disagreement
FRCP 29(b) permits parties to stipulate to many issues concerning scheduling and scope of
discovery
Benefits:
Virtually anything is available that is relevant to trial.
Each side should be able to know virtually every relevant thing the other side knows
May promote settling because one side may realize her argument is well supported or the other
sides is.
Allows parties to see where they both agree so trial can be solely focused on areas of
disagreement.
Avoids trial by ambushparties know whats coming so lawyers cant surprise anybody by using
unknown evidence.
Costs:
Can seem too intrusive because of how widely available information to the opposing side is
Can be very expensiveeach party bears the expense of complying w/other parties discovery
requests
Very time consuming
II. Six Tools for Conducting Discovery:
1. Required DisclosuresFRCP 26(a)
Disclosures each party must make even though nobody asks for them
Controversial because they take away partys autonomy, but any good lawyer would ask for them
anyways
Required Initial Disclosures 26(a)(1)(A): (Jump starts discovery process & assists in
determining how to proceed)
1. Name, address, & telephone number of each person likely to have discoverable informationalong w/subject of that information-that the disclosing party may use to support its claims or
defenses;
2. A copy (or description by category & location) of all documents, ESI, & tangible things in the
possession or control of the disclosing party that she may use to support her claims or defenses.
3. P must provide a computation of damages claimed, and evidentiary material on which the
computation is based;
4. D must identify (and make available for copying) any insurance agreement under which an insurer
may be liable to satisfy all or part of the judgment.
26(a)(1)(A): permits court order or stipulation of the parties to vary the timing & scope of the
initial disclosures.
Required Disclosures: Expert Witnesses 26(a)(2)
26(a)(2)(A): Each party disclose the identity of anyone who may be used at trial to present
expert testimony
(a)(2)(B): Experts who must provide a written report
(a)(2)(C): Experts who dont have provide a written report
Usually becomes relevant after discovery through the traditional discovery devices & parties are
focusing on whether they will have expert testimony at trial.
Court usually directs the parties when to exchange the information concerning expert witnesses.
No court order or stipulation by parties ,26(a)(2)(C)(i) requires this info be produced at least 90
days before trial.
Lay witnesses not permitted to offer opinions. Only give facts related to events they observed.
Required Pretrial Disclosures:
26(a)(3)(A): each party must serve on other party detailed info. about evidence she anticipates
presenting at trial

At this stage parties have honed the issues remaining to be adjudicated (May be years down the
line)
The parties not only serve the information on each other, but file it w/court as wellPretrial
requires disclosures are the only ones that must be filed. Court does not get copies of
other required disclosures.
2. Depositions: Rules 30
Person being deposed (deponent) orally answer questions asked by opposing counsel.
She can review her answers, which are made under oath, before signing it under penalty of
perjury
Lawyers for each party are present, along w/deponent, and a court reporter who types out
everything said.
30(b)(1): A party wishing to depose someone must notice the depositionserved on all parties
under Rule 5 via mail or by delivery to a partys attorney.
Notice must name the person to deposed and indicate date, time, and place of deposition.
Anyone who has discoverable information can be deposedparties and nonparties.
A Subpoena should be issued to a nonparty who is to be deposed; otherwise nonparty has no
obligation to attend.
Subpoena FRCP 45, emanates from the court commanding the nonparty appear and give
testimony.
Subpoenas are required for nonparties because they, unlike parties, have not been brought before
the JRX of the court
Deponent is required to testify based upon present knowledge and recollection.
Deponent is under no obligation to review all relevant files before being deposed.
Strategy: Person is only allowed to be deposed once, so opposing counsel must be fully prepared
to ask all relevant ?s
Follows that epositions are rarely before interrogatories (gain helpful background info & proper
line of questioning)
# & Timing: Unless court order or stipulated by parties, no more than 10 depositions and limited
to 7 hours each.
3. InterrogatoriesRule 33
Each party is allowed to serve one set of maximum of 25 interrogatories (including subparts),
which are to be w/in 30 days of being served.
Lawyers assist parties drafting the answers, and then they are signed by party under oath,
under penalty of perjury.
May object to interrogatory if information in answer is privileged; must respond invoking that
privilege.
Info in interrogatories invaluable to discovering background factsany objective data relevant
to claims or defense of any party.
Questions sent by D ask P to detail the alleged complaint, forcing other party to take a position.
Usually interrogatories are used to collect information to prepare for depositions, and unlike
depositions where deponent only has to answer based on recollection, party answering
interrogatories must give info reasonably available to her. (If information is in her files, she must
go get it.)
Rule 33(d) provides another option business records optionobtaining the information for
answer to interrogatory requires the same burden for both parties, Party B can just give part A
permission to access the records to find the answer.
Can only be sent other parties, no nonparties.
4. Requests For ProductionFRCP 34
Permits party to request that another party produce documents, electronically stored
information (ESI), or tangible things, or allow entry upon land to permit various acts, such as
testing. The materials must be in possession, custody, or control of the party to whom the
request is made.
Useful because allows opposing party to inspect and copy documents but also inspect the
tangible product or property damage in dispute.
34(b)(1)(C) permits party to sending a request for ESI to specify the form they want the
information to be produced.
34(b)(2)(D) allows opposing party to object to requested form of production (may prefer to
produce information in a form that can be searched electronically.
FRCP 34(b)(1) refers to the rule for drafting the request. (served on all parties by FRCP 5(b),
usually by mail)
Can specify documents individually or by categories
Responding party must respond w/in 30 days of request indicating that inspection will be
allowed or object.
Requires documents to be produced documents in an organized fashion so opposing party cant
bury info.
Rule 45(a)(1)(A) allows a subpoena to be served a nonparty to produce information. W/out
subpoena no obligation
5. Medical ExamsFRCP 35(a)
(a)(1) party must shows the opposing partys mental or physical condition (including blood
group) is in controversy
(a)(2)(A) must demonstrate good cause in motion for medical exam
Only court can order someone take medical exam.
The motion and court order (if granted) must state time, place, manner, & scope of the
exam & give the name of the person who will perform it. *W/out court order, this tool could
easily be used to harass or oppress other parties.
Conclusory allegations not sufficient to justify order of an exam; party must make affirmative
showingthat each condition for which exam is sought is really & genuinely in controversy &
good cause exists for ordering each exam

Ability to obtain the information in some less intrusive fashion is relevant to whether party
establishes good cause.
FRCP 35(a)(1) permits order for medical exam only of a party but also somebody under partys
control (their child).
Have to show good cause and employees are not included in this category.
Examination done by any suitable healthcare professional (No M.D. required) & the party
seeking the examination compensates the examiner. (Becomes cost of litigation, so if party
requesting exam wins, loser compensates her)
After examination, the examiner send a report to the party who sought the exam and if the
examined party wants to a copy of the report, the seeking party must deliver it to the person
However, FRCP 35(b)(3) provides that if the examined requests and obtains the report, she
waives any privilege to information kept by her personal doctors about the condition that
prompted request of examinationmust produce reports of her own doctors concerning the
condition
6. Requests for AdmissionFRCP 36(a)(1)(A)
Device to force a party to take a position on specific issues but can only be served on parties.
May narrow the scope of issues to be tried
Generally no limit as to number of requests that can be made, but FRCP 26(b)(1) empowers
court to limit # by order
Party responding to request may not say she lacks knowledge on the matter unless she states
she made a reasonably inquiry & that the information obtainable is insufficient to permit her to
admit or deny. (Or may object if request asks for any improper, irrelevant, or privileged matter.
Message is simple: If you can honestly deny, the simply state party denies this request for
admissiondont try to argue because may run risk of failing to deny, which constitutes an
admission.

III. Duty to Supplement ResponsesFRCP 26(e)(1)


Supplement or correct any required disclosures & responses to interrogatories, requests for production,
& requests for admission
Applies only if party learns disclosure or response is incomplete or incorrect & only if corrective info has
not been made known to other parties during the discovery process or in writing.
Applies to any information that may have become misleading or inaccurate over time, even if no party
asks for it
IV. Scope of Discovery26(b)(1)
The key to what information is discoverable is determining what constitutes as relevant.
Something is relevant if it has the tendency to make any fact more probable or less probable than
w/out it.
Doesnt have to be admissible at trial as long as the info requested may lead to the discovery of
admissible evidence.
Judge has discretion to broaden the scope of discovery from only info relevant to claims or defenses
to info relevant to the subject matter in the action
A. Privileged Matter
26(b)(1) limits discovery to only nonprivileged matter
Privileged matter is confidential communication between particular peoplelawyer-client, doctorpatient, spouses, etc.
The relation has to be of the variety specifically recognized by the rule for information to be
privileged.
Privileges only attach to confidential information and the information told must have been made in
furtherance of providing professional services (telling your lawyer something in a crowded elevator
is not privileged, nor is telling something to your lawyer on the golf course if it isnt related to his
professional capacity)
Rationale for privileged information: relationships would be harmed if parties to confidential
communications were forced to divulge the content of those communications. We want people to
speak freely to their lawyers, spouses, clergymen, etc. w/out fear that the confidential
communication will later be divulged.
Privileges must be expressly claimed when withholding information FRCP 26(b)(5)(A) and they
usually are filed with the court in a privilege log. They can be waived if not properly asserted
according to FRCP 26(b)(5)(A).
Inadvertent disclosure 26(b)(5)(b): Party must promptly return, sequester, or destroy
information that was inadvertently disclosed. (Simply put, party cant use this material)
For thus rule to apply, the party that made the disclosure must have taken reasonable steps to
prevent disclosure and tried to promptly remedy the problem once she found out about it.
Even if a party has waived her privilege, the waiver only applies to that document alone.
B. Proportionality26(b)(2)(C)
Requires court to limit the frequency or extent of discovery when
1. The discovery sought is unreasonably cumulative or duplicative, & can be obtained from some
other source that is more convenient, less burdensome, or less expensive
Not enough that there is some overlap, court must determine whether the requests are
unreasonably redundant.
2. The party seeking discovery has had ample opportunity to obtain the information by discovery in
the action;
If you have a chance to discover something, do it promptly.
3. The burden or expense of the proposed discovery outweighs its likely benefit
Court has huge discretion here, but typically flexible w/discovery and enforces production of
material requested.
Zubulake the court used its discretion to shift some of the costs of producing $273k worth of ESI
to the requesting party.

Courts have used this discretion in one specific area though: ESI
ESI proportionality
Party receiving request to produce ESI may object if too burdensome
This party has burden of demonstrating that complying w/request would be unduly burdensome
or expensive.
The court then specifies the condition for the discovery including possibility the parties share
the cost of production
Metadata: information stored by a computer about a documents history
a) When document is produced in e-form, the receiving party may be able to mine it for such
metadata. Doing so may giver her access to privileged material or work product.
b) Other hand, party producing the material may want to scrub the document so adversary
cant access metadata
c) If no litigation is pending, party may want to scrub metadata. Once litigation is filed (or even
anticipated), there is a litigation hold, meaning the parties must not destroy or alter
relevant materialsthis can constitute spoliation or misconduct.
C. Work ProductFRCP 26(b)(3)(A)
Documents and tangible things that are prepared in anticipation of litigation or for trial
Work product is the materials compiled by lawyers during the course of litigation in preparing for
trial
Work done before the case has been filed can constitute work product if the party prepared the
material in anticipation that there would be litigation.
Once something is considered work product, it is protected from discovery
Allowing the other side to discover work product would reward freeloadingif the other party wants
the information, they should do their own investigation.
The party asserting work product protection has the burden of expressly claiming and describing
the material in a way that enables others to assess the claim.
Expressing work product is done in a privilege log and can be waived just like a privilege can, but is
also subject to liberal provisions that allow a party to claim inadvertent disclosure just like privilege.
Parties are not allowed to exploit work product by requesting the information through
interrogatories FRCP 26(b)(3)
FRCP 26(b)(3)(A)(ii) Opposition can overcome work product protection if they satisfy two
conditions:
i.
They show they really need to prepare their case
ii.
They show they cannot get it elsewhere.
This rule makes sense because if a party satisfies this condition, they are obviously not freeloading
Even if the exception has been invoked, opposition does not have access another partys opinion
work productmental impression, conclusions, opinions, or legal theories.
When a document contains both discoverable work product and opinion work product, the opinion
work product should be redacted from the documentopinion work product is blocked out in the
copy given to opposition.
Work product is not limited to attorneys. The party being represented, insurer, hired investigator,
etc. can have their work product protected as long as it was done in anticipation of litigation.
D. Consulting Experts & Expert WitnessesFRCP 26(b)(4)
Gives the party the right to depose any expert witness identified through Rule 26(a)(2)
Party seeking discovery of expert witness must pay reasonable fee to the expert for time spent
responding to the discovery request
No discovery of facts known or opinions held can be obtained from experts who arent going to
testify at trial.
Only exception is when there is no other way for a party to gain access to such information
E. Protective OrdersFRCP 26(c)(1)
Permits judge to enter protective order to shield from annoyance, embarrassment, oppression, or
undue burden or expense.
26(c)(1)(d): Court must weigh the need to protect w/the duty to permit discovery as envisioned by
the discovery provisions.
Protective orders may be aimed at the dissemination of info gleaned in discovery (trade secrets,
Cokes recipe).
26(c)(1)(g) might allow this information but ensure it is only limited to use during litigation to
uphold competitive advantage

V.

Rule 37- Discovery Sanctions


A. Partial Failures: Two Step Approach to Discovery Abuse
Step 1: Motion to CompelFRCP 37(a)(1): party seeking discovery will make a motion to
compel & be required to certify to the court that she has tried in good faith to get the information
w/out court involvement.
Court considers then either grants or denies motion
Step 2: Violation of the Order Compelling Response
FRCP 37(b)(2)(A): allows court to impose sanctions party when they do no produce information
after court order to do so.
B. Total Failures and Sanction
C. Specialized Sanctions
1. Required Disclosures
2. Medical Examinations
3. Request For Admission
4. Duty to Supplement

VI.

Certification FRCP 26(g), Retention Policies, Litigation holds


Rule 11 does not apply to discovery, Rule 26(g) applies to certification that information in
discovery documents is justified in law and fact.

Each document needs to be certified by counsels signature or the party herself for answers to
interrogatories and depositions.

(1)
(2)
(3)
Required Disclosures
Traditional Discovery Devices
Litigation Holds: When litigation becomes obvious, parties should go into litigation hold mode
parties have a duty to preserve relevant information.
Courts may consider destruction of relevant information after litigation hold mode should have
begun as Spoliation
Spoliation: the intentional destruction, mutilation, alteration, or concealment of evidence.
Setting sanction for spoliation, courts consider 1) the need to deter future destruction, 2)
protection of the other partys interest, and 3) remedying the prejudice caused.
Trial
Pretrial ConferenceRule 16(a)
Permitted at courts discretion for variety of purposesexpediting deposition of the action and
establishing early and continuing control of the case.
16(c)(2) lists various topics that can be considered at any such conference.
Final Pretrial Conference16(e)
Lists the issues to be decided at trial & held as close to the start of trial as reasonable.
Formulates a plan for trialparties discuss matter in considerable detail, as the plan for trial will
include a plan to facilitate the admission of evidence at trial. Their preparation for the
conference is guided by the final set of required disclosure, under 26(a)(3)
After final pretrial conference, court will enter an orderfinal pretrial conference order 16(d)
roadmap for the trial itself. Document supersedes the pleadings.
Party who raised an issue in pleadings must ensure its preserved & presented in final pretrial
conference order, or risk losing the right to present evidence on that point at trial.
Same w/a party who forgets to list a witnessmay encounter serious problem when she attempts
to call that witness at trial.
16(f)Court may modify final pretrial order issued after final pretrial conference only to prevent
manifest injustice.
Party seeking amendment bears the BOP, and, generally, a court will allow amendment only fi
refusing to do so would result in injustice to the party seeking amendment, the party opposing
amendment will not be substantially harmed by the amendment, and the court will not be
inconvenience thereby. (Ex: Court dismisses motion to amend when P has chosen her
litigation strategy and tries to amend too far into trial. P chose her strategy and his
to live w/the consequences.)
Theres a possibility that a party might try and introduce evidence that is not in the final pretrial
conference order. If the opposing party does not object, the court may admit the evidenceUnder
R15(b)(2)(because of the no objection) & might form the basis for amending the pretrial
conference order to conform to the evidence.
Adjudication
Adjudication: Means there will be a judicial resolution on the merits of the dispute
Merits: involve the underlying dispute: breach of contract, D commit a tort, Contributorily negligent, etc.
Purpose/Conduct of Trial & Roles of Judge and Jury
P has alleged things in her complaint, which D either admitted or denied.
If she admitted them, they are deemed established and need not be tried, the issues she denied,
however, are joined, or disputed.
Perhaps during discovery the parties were able to hone the number of disputed facts
The final pretrial conference order lists the issues to be decided at trial.
Stating the relevant law is always a function of the judge
When witnesses have given opposing testimony on a fact, outcome hinges in part on which witness
the jury believes.
In all trials, bench (judge trial) or jury, judge is responsible for discerning the applicable law. In jury
cases, judge instructs jury on that law to guide its determination of the facts.
Judge must resolve disagreements about what evidence is admissible.
Note

on Settling
Litigators must be skilled at contract negotiation and drafting.
Settling the case involves having the parties enter a contractw/terms well spelled out.
Generally, P agrees to accept money from D, in return for which P signs a release of all claims and
of any right to sue the D concerning the same matter
When money is paid, usually the P will then take a voluntary dismissal.

Outset of Trial
P gives her opening statement first, followed by Ds lawyer.
After opening statement P presents her case-in-chiefcalling witnesses who are sworn in and
testify under oath before the judge and jury.
Witnesses testify in response to questions by the lawyersPs lawyer examines each of her
witnesses, then Ds lawyer is allowed to cross-examine the witnesses.
Cross-examination: Lawyer attempts to create doubt about the witnesss recollection or to
expose inconsistencies between her testimony and that of other witnesses.
This process is repeated for each of Ps witnesses.

P may present documentary and other evidence in addition to the oral testimony of the witnesses.
General a witness will have to establish the authenticity of documentary evidence, and each piece
of evidence is marked as an exhibit.
When she has presented her case, P rests, which closes the presentation of Ps case-in-chief.
At this point, D may make a motion for JMOL, which, if granted, would obviate the rest of the trial
and result in judgment for D.
If D doesnt move for JMOL, or motion for JMOL is denied, D puts on case-in-chief
Same process as Pwitness by witness, asking questions to elicit testimony under oath.
Ps lawyer may cross-examine each defense witness.
D may introduce documentary and other evidence
When she has presented her case, D rests, which closes presentation of her case.
At that point, P may move for JMOL, which, if granted, would obviate the rest of trial and result in
judgment for P.
If motion is not made, or is denied, P may then present rebuttal evidence.
This is done in the same way as the case-in-chief, but consists of testimony and other evidence
designed t rebut evidence the D presented.
At some point, the parties will have presented all of their cases-in-chief and rebuttal evidence, and
the court will close all the evidence.
Then, parties might move for JMOL; if granted, court will decide case, dismiss jury & enter
judgment.
If not granted, or if its denied, judge will then instruct jury (if there is one) on the law, and the jury
will retire to deliberate and determine the facts.
Jury is to do so based upon the record evidencethat is, the evidence that the judge admitted
into evidence in the trial.
Jurors are to disregard any evidence to which they might have been expose in trial but which the
court found inadmissible.
Jury will announce itrs result in a verdict, which the court will embody in its judgment
Arbitration & Settlement

Arbitration: Type of litigation agreed to by parties, typically within their contracts, that disputes to be
litigated in front of a private arbitrator (not a judge, typically an expert in the field) who makes a ruling on
the case.
There can be one arbitrator present, but sometimes there is a panel of 3
They are not affiliated with the court by day job, they are not paid for with tax payer dollars.
Benefits of Arbitration:
Most notably it limits time & expense of an actual trial.
1.
Informaltakes place at the arbitrators office usually
2.
Parties write their own procedurally rulesUsually not extensive discovery so it usually
much cheaper here
3.
Much more convenient access to resoling a disputedont have to be another one of the
hundreds of cases on the docket
4.
Arbitrator is usually an expert in the field so they have a very good feel for the material
being disputed compared to judge (generalist).
5.
Rules governing admissibility of evidence dont apply
6.
Far less time consuming than a trial
7.
Judgments are typically set in stone. Very hard to appeal a judgment. So once its over the
winner can feel security that it wont be overturned & loser can move on with his life
8.
Also very private. There is no public access to any court opinions or media participation in
the courtroom.
9.
Victorious party may ask court to confirm & enforce the award.
10. Gives parties the autonomy to draft the rules and regulations of any disputes that ariseavoids
hostility.
Costs of Arbitration:
Arbitrators are usually experts, but everybody makes mistakes from time to timeif case come out
the wrong way it is incredibly difficult to get it overturned if even an opportunity to appeal it.
No trial by jury
Not always easy to come to arbitration terms pertaining to procedures and boundaries of potential
arbitration.
Lack of public access may be negative as it pertains to transparency. No incentive to make public
conscious decisions/lack of objectivity.
If consent to arbitration with big company or employer, face a take-it-or-leave-it scenario. Court
cannot mitigate the companys power to a level playing field with the P who has shallower pockets
and less power when arbitration is the only form of dispute resolution possible.
Claim Preclusion
I.

Defining the Issue


Claim preclusion stands for the proposition that a claimant gets only one opportunity to assert a
claim.
If you have one claim, you get one suit to vindicate it.
If you sue a second time on the same claim, the case will be dismissedthe claimant must be careful
to seek all rights to relief encompassed in a single claim in Case 1; if she does not, she cannot seek
the rights to relief in Case 2.
Issue Preclusion is narrower than claim preclusionit precludes litigation in Case 2 of a particular
issue that was litigated and determined in Case 1.

Focus not on a claim, but on an issueif issue preclusion applies, that issue is deemed establish in
Case 2. It will not be relitigated; the fact finder in Case 2 will be instructed that that issue is
established.
IP, then, does not necessarily result in dismissal of case 2, rather it may simply narrow the scope of
what must be litigated in Case 2.
Both claim and issue preclusion are affirmative defenses under Rule 8(c)(1)thus incumbent on D to
raise them or risk waiving them.
Once D raises a defense of claim or issue preclusion, she bears burden of proof on the issue.
Rare circumstances court raises issue preclusion on their own motion (crowded dockets)
The rules of CP & IP can be treated rather mechanically, but not just technicalities: (Policies below)
1. Legitimate interest in finality
At some point, litigation must be declared finishedit isnt productive for the parties or for society to
allow serial relitigation of a claim already asserted or an issue already decided by a competent court.
2. At some point D has a right to reposeto know that she cannot be sued repeatedly on the same
claim.
3. There is an interest in consistencyif the same issue were to be relitigated several times, there is a
chance that it would be resolved differently in different casesone jury might find that D was driving
her car recklessly while another jury, determining the same issue, might find to the contrary.
Such inconsistency may erode the publics confidence in the judicial system by making that system
seem more like a lottery than an orderly mechanism for resolving disputes.
4. The community has a legitimate interest in efficiencylitigation is publicly funded dispute
resolution, and the public has a right to expect that the resources of the judicial system not be
wasted.
The use of preclusion reflects confidence in the judicial system: one opportunity to litigate a
claim or an issue suffices to ensure each party of her day in court.
OTOH, preclusion doctrines must be flexible; there are occasionsrare, but they do existin which the
use of preclusion would not be fair, or when the policies underlying preclusion should give way to some
other policy
Additionally, there is the sometimes vexing question of what preclusion law to apply when Case 1
and Case 2 are litigated in courts of different JRXs
Each state is free to determine its own preclusion rules, so long as they do not violate due
process, and states have adopted different approaches to various issues.
Contrast to preclusion, law of the case establishes that issues decided in a suit will not be relitigated
later in the same case.
Different from issue preclusion because the issues are raised in a single casewith issue preclusion, a
judgment has been entered in Case 1, and the question of whether that judgment affects ones ability
to relitigate issues in case 2
II. Claim Preclusion (Res Judicata)
A single claim might include more than one right to recover.
Ex: a single claim arising from an automobile accident may include the right to recover both for
personal injuries and for property damage. Because the claimant gets to sue on the claim only once,
she must be careful to seek recovery for all right to relief in that one case. If she doesnt, her case will
be dismissed under claim preclusion Same cause of action=same claim
Three requirements for the operation of claim preclusion:
1. Both case 1 and case 2 must be brought by the same claimant against the same D
2. Case 1 must have ended in a valid, final judgment on the merits
3. Both case 1 and case 2mus be based upon the same claim.
A. Case 1 & Case 2Same Claimant Against Same D
Resist temptation to say that the requirement is simply that case 1 and case 2 involve the same
partiesnot sufficiently precise
Compulsory counterclaim ruleRule 13(a)(1): If a D has a claim against P, and the claim arises
from the same transaction or occurrence as Ps claim, she must assert it in the pending case. Failure
to do so waives the claim. From example on page 575.
Also resist the temptation to say that claim preclusion requires that Case 1 & Case 2 be brought by
the same P against the same D.
D can assert claims against P in a pending caseif she does so, she could be subject to claim
preclusion in a second case.
Claim preclusion applies to parties who assert the same claim twice; thus, it applies to
claimants & not just Ps
If file a permissive counterclaim as a D, and then in subsequent case against the same party you
are the P, precluded from filing the counterclaim from the first case
Due process provides that one may be bound by a judgment only if she was a party to the case in
which that judgment was entered.
This requirement is satisfies by our definition of claim preclusion, since it may be asserted only
against one who was a claimant in Case 1.
Finally, claim preclusion does not necessarily require that the claimant and Ds be exactly the same
persons in case 1 and case 2.
However, nonparty preclusion does apply when the nonparty is in privity with one who was a
party to case 1.
Accordingly claim preclusion will apply if case 1 and case 2 are brought by the same claimant (or
someone in privity w/claimant) against the same D (or someone in privity w/D)
Bringing a case on behalf of somebody as his or her guardian establishes privity. Representative is
privy to the represented (vise-versa).
Abe inc. crashes with B. Abe inc. sues for damages, court finds B not negligent. New owner buys
Abe inc. one month later and sues again. He is precluded by privity.
B. Case 1 Ended in a Valid Final Judgment on the Merits
Only a particular kind of judicial order is entitles to preclusive effectone that has three
characteristics:

1.

2.

3.

1.
It must be valid
2.
It must be a final judgment, and
3.
It must be on the merits
Validity
Addresses competence of the court in Case 1inquiry typically focuses on whether the court in Case
1 had SMJRX over the case & PJRX over the parties
If it did, the judgment is considered valid.
Judgment may be valid even though it is incorrectif the judgment was wrong on the merits, the
losing party should have appealed the judgment in Case 1 to the appropriate appellate court.
Claim preclusion consequences of a final, unappealed judgment on the merits [are not] altered
by the fact that the judgment may have been wrong or rested on a legal principle subsequently
overruled in another case.
Final Judgment
Final judgment is one that ends the litigation on the merits and leaves nothing for the trial court to
do but execute the judgment.
Every other order in a case is interlocutory, which just means that it is not final.
An interlocutory order may be amended during the course of the litigationit would be wasteful
to allow an appeal from such an order or to give it preclusive effect, because the order might not
stand the test of time; it might be changed or abandoned as the litigation develops.
What happens if the final judgment in case 1 is appealed?
Obviously, if the appellate court reverses or vacates the final judgment of the trial court, that
judgment is no longer entitled to preclusive effectit simply no longer exists in the same form in
which it was entered.
Just as obvious, if the appellate court affirms the trial courts final judgment, it is entitled to
continued preclusive effect.
What is the status of things during the pendency of appeal?
Final judgment entitled to preclusive effect or is it held in abeyance until the resolution of the
appeal?
Answer: federal law on the subject says that the judgment is entitled to preclusive effect, and
most states agree.
Majority rule accords with the reality that most appeals result in affirming the trial courts
judgment.
On the Merits
Merits refers to the underlying disputewhether the claimant has shown that she is entitled to
judgment because, for example, D breached a contract or committed a tort, and if so, what damage
befell the claimant.
So for a valid final judgment to be entitled to preclusive effect, it must have been based on the
underlying dispute, on the question of who did what.
Contrast, a judgment based upon something unrelated to the underlying disputesay for
example, some procedural or JRXal basisshould not carry a preclusive effect.
However, many judgments are accorded preclusive effect even though there has been no true
assessment of the merits of the case.
For starters, its helpful to recognize that preclusion does not require that the judgment in Case 1
be determined literally on the meritsit is more accurate to think of the requirement as one that
the court had the opportunity to get to the merits of the case, even if it did not actually do so.
Ex: if Case 1 went to trial, the resultant valid final judgment is undoubtedly on the merits.
But on the merits does not require that there be a trial
Ex: suppose a valid final judgment is entered on summary judgment; recall that summary
judgment allows a court to rule as a matter of law w/out trial, because there is no dispute on
a material issue of factsuch a judgment is entitled to preclusive effect. It is on the merits
for these purposes. It is an adjudication that a party is entitled to as a matter of law.
How far can we push this concept?
Can a default judgment be on the merits for preclusion purposes?
General answer is yes, because default does establish (by Ds failure to respond) that Ps claim
is substantively valid.
But what about dismissals that have nothing to do w/the underlying claim? i.e., w/a
voluntary dismissal, P simply pulls the plug on the case. Is that dismissal on the merits for
preclusion purposes?
41(a) provides that such dismissal is w/out prejudicewhich means not deemed on the
merits.
What about involuntary dismissals? Starting point is Rule 41(B) and envisions three
scenarios:
1. If the voluntary dismissal is based on upon lack of JRX (meaning either personal or subject
matter), improper venue, or failure to join a party under Rule 19 (indispensible party issue),
the rule provides that the dismissal does not operate as adjudication on the merits.
That means, of course, that such a dismissal is not entitled to preclusive effectthis
rule makes sense: A judgment based upon any of these three defenses truly does not
involve investigation of the underlying merits of the case.
2. For failure of P to prosecute or comply w/these rules or any order of court, a dismissal is
adjudicated on the merits.
Broaddismissal for failure to comply with these rules means dismissals for failure to
comply w/any of the FRs.
Ex: court might dismiss Ps case as a penalty for abusing the discovery provision.
Unless court indicates otherwise in its order of dismissal, such a dismissal operates
as adjudication on the merits (remember this means bars second action on the
same claim.)
This rule also makes sense, because a P who is guilty of failing to prosecute the action or
of failing to comply w/the federal rules has had an opportunity to present her case for

consideration of the merits, but has failed to do so properlylegal system has given her
a chance, and has an interest in enforcing its own rules for how cases are to proceed.
Thus, unless court provides otherwise in its order of dismissal, Rule 41(b) treats such a
judgment as on the merits for purposes of claim and issue preclusion
3. Under Rule 41(b), every voluntary dismissal other than those based upon JRX, venue, or
Rule 19, is to be treated as on the merits.
Remember Semtek? Why could P proceed w/suit in Maryland? First, the court concluded,
Rule 41(b) is not aimed at claim preclusion at allits provision that a dismissal operates
as an adjudication on the merits means only that P cannot refile the same claim in the
same Fed. Court that entered the judgment of dismissal.
Semtek makes it clear that the language of Rule 41(b)that an involuntary dismissal
other than under that rule (and other than one based upon JRX, venue, or Rule 19)
operates as adjudication on the meritsdoes not state a universal truth for purposes of
preclusion.
True, the rule stops P from refilling in the same Fed. Court that dismissed the action, but
whether the first courts dismissal is on the merits for claim preclusion and issue preclusion
in other courts requires an analysis of federal common law, which, in turn, in a diversity
case usually will look to the law of the state in which the Fed. Court deciding case 1 sat.
C. Case 1 and Case 2 Were Based on the Same Claim
Even if case 1 and case 2 are brought by the same claimant against the same D and case 1 ended in
a valid final judgment on the merits, claim preclusion applies only if the two cases are based upon the
same claim.
The generally broader definition of claim today reflect the more liberal rules of pleading and joinder
Because those rules permit P to package a great deal into Case 1, there is less need for the legal
system to provide P with an opportunity to bring Case 2.
1. Two Major Themes: Focus on Transaction or Same Evidence test
(a) Transactional test: Majority rule for defining ones claim
Generally, focus is whether the two cases involve the same operative facts transaction or
occurrence basic factual situation etc.
RS2 of judgments (most influential definition): a claim encompasses all right to relief with
respect to all or any part of the transaction, or series of connected transactions, out of which the
action arose.
Ex: P is involved in an auto collision with D. P suffers personal injuries and property damage to
her car. In Case 1, she seeks only damages for the personal injuries. After judgment is entered in
that case, she brings Case 2, seeking to recover for property damage from the same collision.
If the law defines the claim transactionallyas all rights to relief arising from a
transactionCase 2 will be dismissed under claim preclusion. Why? Because P is suing twice
about the same transaction; thus, she is suing twice on the same claim.
Policy: Coerces P to join her personal injury and property damage rights in a single caseif she
fails to do so, her second case will be dismissed under claim preclusion.
Thus, the judicial system deals with only one suit for what it isone event. Moreover, the
transactional test comports broadly w/tests for joinder and for supplemental JRX.
Final notebecause federal rules are liberal (regarding claim joinder) and permit a claimant to
assert all claimseven those not transactionally relatedin a single suit, it is fair to impose a
claim preclusion rule requiring her to assert all transactionally related claims in case 1.
Final Ex: P and D, each driving her own automobile, collide, and each suffers personal injuries
and property damage. Immediately after the collision, D jumps from her car, runs to Ps car,
reaches through the window and punches P in the face. D then screams obscenities at P,
threatens to kill P, and defames P by shouting to the crowd of onlookers various libelous
falsehoods about P.
How many claims under a transactional test?
RS2 Judgments tells us to adopt a pragmatic approach, with focus on whether facts are
connected closely in time, space, origin, or motivation [and] whether, taken together, they
form a convenient unit for trial purposes, as well as whether treating them as a single claim
will be consistent w/the expectations of parties and businesses.
Thus, the inquiry becomes a practical one, guided by experience w/particular kinds of cases,
sensitive to relevant policies.
Arguably, the hypo seems to present a single claim. Participants might consider all the
events a single event. Everything occurred in a relatively small area and w/in relatively short
time. Witnesses to one aspect were probably witnesses to the punch and oral argument as
well. Having more than one case could burden the witnesses to testify more than once, and
having redundant testimony in multiple cases would waste judicial resources.
Last notetrial court has discretion to order separate trials of various issues to
avoid confusion or embarrassment.
***The law student who is aware of the various tests covered in her course materials
will be able to demonstrate their application on the exam.
(b) Same Evidence test
Under the same evidence test, claims are the same if the evidence needed to
sustain the second action would have sustained the first.
What does that mean? All the evidence in the entire action be the same as case 1? If that is
the case, usually the second claim will be allowed because the claim will be different than that
of the first, which will probably introduce new evidence.
Or does it mean the evidence to establish liability in Case 2 must be the same as Case 1? This
is what courts usually go to.
Ex: D is negligent in & causes physical injuries and car damage, the second claim (assume
physical injuries first, and car damage second) would be precluded because the showing
required to establish D was liable for the wreck is the same in both cases.

Final notean offer to produce different evidence should not defeat claim preclusion; the
point of claim preclusion is that the claimant gets one shot at a claim, and thus cant blame
anyone but herself for leaving out some element of recovery for failing to cover the facts in an
effective way.
2. Claim as Personal to holder
Ex: L and P are on bus. Bus wrecks. Both suffer physical injury and property damage (luggage).
JRX adopts transactional test. Test will coerce L to sue bus company for personal injuries and
property damage in a single caseboth are elements of a single claim, because both were caused
in a single transaction. Similarly, transactional test will coerce P to sue for her personal and
property damage in a single case. However, the definition of claim does not coerce L & P to
join together as co-Ps in a single case. Louises claim is hers & Pattis is hers. Claim
preclusion does not force every person injured in a single case to join together in one suit. It simply
forces each claimant to join the various elements of damage and legal theories arising from a
claim into a single case.
3. Contract Cases
i.
First, a claim, at least w/regard to a single contract, is usually deemed to consist of all breaches
that have occurred to the time of filing Case 1.
ii.
If there are separate contracts, they generally are treated as separate claims.
Ex: If D breached contract 1 and contract 2 in similar ways, P would probably have two claims
one for each contract.
This rule is usually applied even if Contract 2 is identical in every way to Contract 1.
Class Notes:
Claim Preclusion
Test:
Generally successive courts attach the same preclusive effect to a judgment as the rendering court
wouldfull faith and credit
1st question to askwhat JRX was Case 1 in and what preclusion law/test do they apply?
Ex: Case 1 in NJ and Case 2 in NY, NY applies NJ preclusion law.
What about Fed. Court?Same as state to state preclusive effect (except Semtek)
Ex: Federal courtCase 1, NY Case 2NY uses federal law.
Semtek exceptionCase in Fed. Court on diversity JRX, subsequent courts use the state law in
which the Fed. Court (where Case 1 took place) sitswhy? Forum shopping (Same as with the
default rule)
Class Notes:
Issue Preclusion
Firstthe test
1. An issue of fact or law (Very same issueboth substantive and procedural requirement)
2. Actually litigated and determined
3. Valid & final judgment
4. Determintation was essential to the judgment

III.

Issue Preclusion (Collateral Estoppel)


In contrast to claim preclusion, issue preclusion applies only to preclude relitigation of an issue that the
parties actually did litigate and the court determined in Case 1: it generally doesnt itself cause
dismissal of case 2it streamlines the number of issues to be litigated in Case 2.
Issue is broader than claim preclusion because its operation is not tied to transactional relatednessin
an issue determined in Case 1 may be deemed established in Case 2 even though the cases involve
radically different real-world events.
Ex: A determination in Case 1 that a drug causes particular side effects may be used to establish that
issue in other cases involving different persons, hurt at different times in different places.
Standard definition, IP has 5 prereqs:
1) Case must have ended in a valid final judgment on the merits.
2) Same issue presented in Case 2 must have been litigated and determined in Case 1.
3) That issue must have been essential to the judgment in Case 1
4) As a matter of due process, issue preclusion can only be asserted against one who was a party to
Case 1 (or in privity with a party to case 1small category).
5) Court in case 2 must assess mutuality, which concerns the question of who may assert issue
preclusion.
Modern trend is to reject traditional view that only parties to Case 1 may assert issue preclusion in
Case 2
A. The Same Issue was Litigated and Determined in Case 1
Issue preclusion allows a judicial system to avoid the burdenand the concomitant risk of
inconsistent resultscause by relitigating an issue that has already been decided.
For IP to apply, the same issue must have been litigated and determined in Case 1contains three 3
requisites:
1) The issue must have been litigated in Case 1.
2) Even though litigated, the issue must also have been determined in Case 1
3) We must be speaking of the same issue in both cases.
i.
Determining Whether the Issue was Litigated in Case 1
The situation is easy if Case 1 went to trial and evidence was presented on the particular issuethen,
clearly, the issue was litigated for purposes of issue preclusion.
Even if the evidence presented was not sufficient to meet a partys burden at trial, the issue was
litigated in Case 1 (failure to satisfy BOP establishes the nonexistence of a fact for issue preclusion)
But what if case one was decided w/out trial, or without a hearing on the particular issue?

Exs: Voluntary dismissal w/prejudice will have a claim preclusive effect; because no issue
was litigated in such a dismissal however, it will not have an issue preclusive effect.

ii.

iii.

B.

Similarly, though a default judgment can have a claim preclusive effect, it will probably not
carry issue preclusion consequences because no issue was actually litigated in the default.

So, too, facts that are admitted in pleadings or and admission for failure to respond to a
request under Rule 36 are not litigated and should not support issue preclusion in a subsequent
case.
OTOH, a judgment based upon summary judgment can carry issue preclusive effectsummary
judgment entails a judicial determination that there is no dispute on a material issue of fact and that
the moving party is entitled to judgment as a matter of law.

The determination that there is no material factual dispute is adjudication on what facts
exist and constitutes litigation.
Determining Whether the Issue was Determined in Case 1
Not every issue litigated will be determined; Ex: Claimant may present alternative theories of
recovery at trial.
The fact finder may base its decision on one of the alternatives and ignore the other.
Similarly, D may present alternative defense.
Once fact-finder determines that one such theory is established, it may ignore the others; or the
parties may present evidence on an issue and then withdraw the issue before submission to the factfinder.
Because issue preclusion applies only to issues that are litigated and determined in case 1, it will not
apply to such issues.
In non-jury trials, judge will enter findings of fact and conclusions of law, which ought to make clear
what issues were actually determined.
In jury trials, the jury can be pinned down on specific determinations through the use of special
verdicts or interrogatories to the jury.
In some cases however, the issues actually litigated and determined will not be clear.

Bench trials occasionally result in less-than-full findings and conclusions.

More frequently, the problem will arise in a jury trial in which neither the special verdicts nor
jury interrogatories were used.

If its not clear what issues were litigated and determined in Case 1, how should the court in
Case 2 proceed?
Party asserting issue preclusion bears the burden of proof of establishing that the requirements
are met; this burden includes presenting to the court in Case 2 an adequate record from case1 to
support the assertion.
The court in Case 2 may have to review the trial record (including the transcripts from Case 1, to
determine what issues were actually litigated, and whether any of those issues are presented in
Case 2.
For examples of this look to pg. 597 & 598.
Determining Whether the Cases Involve the Same Issue
Obviously, issue preclusion is only appropriate when same issue is presented in both casesthe
entire thrust of issue preclusion is to ensure that we not relitigate something that has already been
determined by a competent court.
Sometimes a party will try to justify relitigating an issue in Case 2 by asserting that she has new
evidence supporting an assertion that was rejected in Case 1.

While discovery of new evidence may justify setting aside a judgment under Rule 60(b)(2)
(but only in limited circumstances, Ch 9.), it does not avoid the operation of issue preclusionthe
party had her chance to litigate that issue, she doesnt get another.
Serious problems can arise concerning the characterization in Case 2 of just what issue was
litigated and determined in Case 1:

Ex: if claimant in Case pursued a particular theory of negligence, is she precluded from
raising a different theory in case 2? If D in case raised a defense that was rejected, is she precluded
from raising a different defense in Case 2?

The assessment of the scope of the issue determined in Case 1 may differ depending upon
the party against whom preclusion is asserted

The court can assess the scope (thinking transaction test remember) of the transaction
either broadly to preclude the issue, or narrowly, to allow itproblems arise because either way,
somebody is left out to dry. So what does the court do?

RS2 of Judgments, urges pragmatismspecifically, it instructs the court to look at such


things as the degree of overlap between the evidence or arguments made in Case 1 and Case 2;
whether new evidence or argument in Case 2 involves the same rule of law as that in Case 1;
whether the pretrial preparation (including discovery) in Case 1 could reasonable have embraced
the new evidence or argument in Case 2; & whether there is a close relationship between the
claims asserted in Case 1 and Case 2

Hypo analyzing this issue in terms of defense preclusion is on page 600.

The application of the factors will not always lead to a clear answerpg. 601 for an
explanation.
Almost always a party will seek to invoke issue preclusion as to a question of fact that was litigated
an determined in Case 1; but does issue preclusion apply to rulings of law from Case 1?the
general answer (assuming the other requirements for issue preclusion are satisfied) is yes.
Ex: A courts determination that a claim for wrongful discharge of employment was preempted by
federal lawclearly a question of law as applied to a given set of factswas entitled to issue
preclusive effect.
SCOTUS has indicated that issue preclusion might not be available, however, for unmixed or
pure questions of law that arise in successive cases involving unrelated subject matter.Scope
and purpose of this sections arent terribly clear.
That Issue was Essential to Judgment in Case 1
The issue under subject to possible preclusive effect must also have been essential to the outcome of
Case 1

To determine essentiality, we ask: if the finding on this had come out the other way, would the
judgment be the same? If so the finding is not essential to the judgment, because the judgment does
not rest on the finding on that issue. Exs page 602-603
There are two main policy supports for refusing to accord the issue preclusive effect to the finding
in Case 1 that R was negligent:
1) Because R won the judgment in that case, he would not have been able to appeal the finding that
he was negligent.
The right to appeal is from the judgment, not from an individual finding.
The party losing the judgment has a right to appealbecause R would have had no opportunity
to have the finding of his negligence reviewed on appeal, that finding was not subject to full
judicial scrutiny and thus is not worthy of issue preclusion.
2) Because the finding on Rs negligence was irrelevant to the outcome (R had to win once D was
found contributorily negligent), there is a sense that the jury may not have devoted sufficient
attention on the issue.
For these two reasons, courts conclude that tey should accord issue preclusive effect only to those
findings that mattered in the ultimate judgment. More hypos on pg 603 & 604
The problem of Alternative Determinations
Alternative determinations are findings on issues, any one of which would be sufficient to
compel the judgment that was entered.
Courts have not agreed on whether to consider alternative findings essential for issue preclusion
purposes.
Traditional approach to the problem, reflected in the 1st restatement of Judgments, holds that both
of the alternative findings are essentialthus, both the finding that Z was not negligent and that A
was negligent would be entitled to issue preclusion in Case 2. (Ex and note 105, pg. 604)
Under the RS2 of judgments, alternative determinations are deemed not to be essential to the
judgment in Case 1 and thus neither one is entitled to issue preclusion in case 2. (See example)
Why did the RS2 take this approach? There were two main reasons:
1) Because the alternative determination is not necessary to the decision, it might not have been
considered as fully by the fact-finderIOW, once the fact-finder determined that A was
negligent, it might not have paid all that much attention to the determination of whether Z
was negligent, because the ruling on that issue would not affect the outcome.
2) Losing litigant, faced w.two negative finding, might be dissuaded from seeking appellate
reviewon appeal she would still lose even if the appellate court affirmed on just one of the
two issues.
Forcing her to appeal to avoid the effect of issue preclusion would increase the burden on
courts and litigants.
To avoid that burden, the drafters decided to free the losing litigant from the effects of issue
preclusion altogether (unless there is an appeal that results in affirming either or both of the
issues.
It is important to be able to recognize alternative determinations in a fact patternit is
also important to remember that courts disagree on how to treat them. 1
Moreover, be careful not to confuse alternative determinationsin which either of two findings
would dictate the same judgmentwith the situation in which both findings are necessary to a
result. For example, let's return to a hypothetical we saw
o A sues Z for negligence. The case is tried to a jury. The jury returns a special verdict finding
(1) that Z was negligent and 2) that A was not negligent. The court enters judgment,
accordingly, in favor of A.
These two findings are not alternative determination. With alternative, remember, either finding would
dictate the judgment. That is not the case here. If all the court in Case 1 deter mined was that Z was
negligent, 'that finding alone would not justify the judgment in favor of A. Why not?
Because in a contributory negligence state, the claimant can win only if two things are
established: that the D was negligent and that the claimant was free from negligence. In this
fact pattern, both of the findings are necessary to \ get a judgment for A. Stated another way,
if you took away either of the findings, the judgment in favor of A could not stand. So here,
both 1issues are essential to the judgment and both are entitled to issue preclusive effect in
Case 2.
C. Due Process: Against Whom is Preclusion Asserted?
Concerns the questions of against whom preclusion may be asserted.
Due process ensures that one can be bound by a judgment from Case 1 only if she had a full and fair
opportunity to litigate in Case 1so preclusion can only be asserted against someone who had a full
and fair opportunity to litigate in Case 1.
Because this precept is commanded by constitutional principles, it must apply in all cases in
whatever court systemfederal or state.
Also applies in claim preclusion.
1. Starting Point: Parties to Case 1 Can Be Bound
Although a full and fair opportunity to be heard is flexible, it includes someone who was properly
joined as a party in Case 1.
Conversely a nonparty to Case generally will not be bound by the judgment in Case 1.
o In Case 1, P1 sues Airline, alleging injuries in a crash operated by Airline, and Airlines
negligence caused the crash. Case goes to trial and Airline wins because the jury makes an
express determination that Airline wasnt negligent. In Case 2, P2 (who wasnt a party to Case
1) sues Airline to recover for her injuries suffered in the same crash. Clearly, airline cant invoke

1 Advice for exam: Whenever class has covered an area on which courts disagree, be
prepared to discuss the approaches taken by the courts. Professors put topic like this on
exam so we can demonstrate we know the different approaches.

claim preclusion against P2. (Why??2) But can Airline assert issue preclusion on the finding
that it wasnt negligent? (Its the same issue, it was litigated and determined in Case 1, and
Case 1 ended in a valid final judgment on the merits.
o Based upon what weve seen so far, the answer is clear: Airline cant use issue preclusionP2,
the party in Case 2 against whom preclusion is sough, was not a party in Case 1 and thus,
cannot be said to have had a full and fair opportunity to litigate in Case 1. Many courts
would say P2 has never had her day in court and cannot be bound by preclusion.
o Note, by the way, how difficult due process makes things for Airline. Suppose 100 persons were
injured in the crash, and that they bring 100 separate suits against Airline. Even if Airline wins
50 cases in row, with each case resulting in an express finding that Airline was not negligent,
Airline cannot assert issue preclusion against P because no P was a party to a preceding case.
2. Nonparty Preclusion: Expanding Privity
Its clear judgment from case 1 binds parties to case 1, but can it bind litigants in Case 2 who
werent technically joined as party in Case 1?Answer is yes, judgment in Case 1 binds not only
parties, but persons deemed in privity with parties to case 1.
Privity refers to a relationship between a nonparty to Case 1 and a party to case 1The idea is
that the nonparty may be so closely aligned with a party to Case 1 that the nonparty has, in effect,
had her "day in court."
In the important case of Tayfor v. Sturgell, the Supreme Court catalogued the circumstances in
which nonparty preclusion may be appropriate:
1. Nonparty agrees to be bound. Sometimes, someone who is not a party to a case will agree
to be bound by the outcome of a case. The best example is the test case:
Six sets of cases are pending, brought by six groups of Ps against the same D, seeking tort
damages for an allegedly defective product. All of the parties to the six cases agree that
one of the six case will proceed to trial first, and that the result of that trial will bind all
otherswin or loseon the issue of D's liability.
2. Nonparty is bound by pre-existing substantive legal relationship w/a party.
Exsuccessive holders of an interest in property: Non party to Case 1 may be bound
by the judgment in that case if she succeeds to property interest held by someone who
was a party in Case 1. Relationship of successor-in-interest closely approximates the
common law definition of privity. The succession might be affected in any wayincluding
sale or inheritanceand the property may be real or personal. Recognizing that the
successor-in-interest is bound by the judgment involving her predecessor protects the
other party from repetitive litigation and thus also avoids potential inconsistent results.
o In Case 1, P sues D1, who owns a lot and house next door to Ps concerning a boundary
dispute. Court enters a valid final judgment on the merits, based upon its finding that
the boundary runs over a particular course. D1 sells his property to D2, who now claims
that that boundary is incorrect. In Case 2, P sues D2 to enforce the boundary as
determined in Case 1. Though D2 was not a party to Case 1, she is bound by the
judgment. She is a successor-in-interest to the property and is thus bound
o In Case 1, P1 sues D, asserting that she (and not D) owns certain securities. The court
enters a valid final judgment on the merits in favor of D. P1 dies and P2 inherits
everything that P1 owned. In Case 2, P2 sues D for declaratory judgment that she own
the same securities. P2 is bound by the judgment in Case 1.
o Husband and wife arent always privylook at definition above.
3. Nonparty bound because she was adequately represented by one who was a party
in Case 1.
o Clearest example is the C-Action: members to a C-Action who are represented by
someone in court are bound by the judgment of that case even though they are not
there.
o Final noteParties represented in court by their agents are bound by the judgment, and
parties who lose case 1 cannot escape binding effect of that judgment by having
someone else sue in a separate case on her behalf.
The rules of nonparty mutuality are strict and narrow
Virtual representation was abolished in Taylor v. Sturgell for the same policy reasons that limit
nonparty mutuality: The policy behind keeping the exceptions narrow is that due process
due process is deeply rooted in our sense of justice. It is unfair to bind someone w/out opportunity
to litigate either in person or through appropriate representative.
The question is what constitutes an appropriate representative? The fact that the Court will not
permit virtual representationIn view of the tremendous cost of relitigationdemonstrates just
how important the concept is. If we are willing to allow similarly situated litigants to raise the
same issues in the same pleadings, using the same lawyers over and over, we must be
protecting something very important.
D. Mutuality: By Whom is Preclusion Asserted?
Distinguishing again between due process and mutuality: By (not against) whom can preclusion
be asserted? This question involves the concept of mutuality. Because mutuality is not rooted in due
process (or any other constitutional principle), courts are not compelled to apply it. Thus, JRXs may
take different approaches to mutuality: They may embrace it, modify it, or reject it.
i.
Mutuality of Estoppel & Exceptions to It
Its a very simple idea: Only people who can use preclusion in Case 2 are people who would be
bound by the judgment is Case 1
The rule is based upon some basic sense of fairnessone should not be able to take advantage
of the judgment from Case 1 if she would not be burdened by that judgment.

2 Because claim preclusion applies only if Case 1 and Case 2 were brought by the same
claimant against the same D. Here, Case 1 is brought by P1 and Case 2 was brought by
P2.

Thus, under the traditional mutuality approach, the only people who can assert preclusion in
Case 2 are those who were parties (or in privity with a party) to Case 1.
But fairness can cut the other waywhy should one who has already litigated and lost in Case
1 get to relitigate the same issue against a different party in Case 2?
True, the new litigant in Case 2 has not yet been burdened w/litigation, so there is no harm to
the interest of repose, but systematic interests are relevantrelitigation burden the courts at
least to some degree by forcing them to repeat a task.
Moreover, relitigation creates the possibility of inconsistent outcomes.
Most important development in preclusion law over the past two generations has been the
move to permit nonmutual assertion of issue preclusion.
Nonmutual means that issue preclusion is being used by someone who was not a party to Case
1.
Two exceptions, and they only apply in indemnity cases page. 618-619
Rejection of Mutuality for Ds: (Nonmutual Defensive Issue Preclusion)
Look up Blonder-Tongue Labs (Patent in 1st case not validjudgment for D, P1 sues different D
in Case 2 on same patentD2 issue preclusion because patent ruled invalid in Case 1)
But is issue preclusion always available to someone in Case 2, regardless of whether she was a
party (or in privity w/a party) in Case 1?No. For starters, remember that every state is free to
determine its own preclusion rules, so long as those rules do not violate constitutional guarantees.
Beyond this caveat, courts have emphasized that preclusion of any sort, including nonmutual
preclusion, requires that the person against whom it is asserted had a full and fair opportunity to
litigate in Case 1.
(For context, examples for this bullet and the next are on 622-623) The court recognizes
that relitigation imposes a burden on the judicial system and raised the possibility that avoiding
that burden might justify jettisoning of the mutuality rule. (more than crowded dockets is involved
though)
The court has concluded that the system of justice affords a litigant one full and fair opportunity to
litigate an issueOnce that protection has been afforded, the litigant may be bound by the finding
on that issue in subsequent litigation, even by persons who were not parties (or in privity w/a
party) to Case 1.
Nonmutual means that issue preclusion is being used by one who was not a party to Case 1.
Defensive means that the person using issue preclusion in Case 2 is the D (Shield).
New D uses issue preclusions as a shield to estop P from asserting an issue P litigated on in Case 1
and lost against another D.
Federal law and the law of most states allows nonmutual defensive issue preclusion, as long as
the party against whom it is used in Case 2 was afforded a full and fair opportunity to litigate in
Case 1.
Encourages judicial economy (efficiency).
Rejection of Mutuality for Claimants (nonmutual offensive issue preclusionsword)
Nonmutual is defined above, and it means the same thing here except that its not the same
claimant in claim 2 as claim 1. (typical in mass tort cases)
New claimant tries to import (his terminology)- finding from first case to his benefit.
o Ex: Commercial plane operated by Airline crashes, injuring 100. In Case 1, one of the passengers
(P-1) sued Airline. Case was litigated, & a valid final judgment on the merits was entered in favor of
Airline; the fact-finder expressly found that Airline was not negligent. In Case 2, another passenger
(P-2 ) sued Airline regarding her injuries from the crash. Can Airline use issue preclusion on the
finding that it wasnt negligent? No. Why? Due process! Airline is attempting to use issue
preclusion aainst P-2, who wasnt a party to Case 1 (& wasnt in privity w/P-1 by any of the
definitions applicable) No problem of mutuality; issue preclusion is being asserted by Airline, which
was a party to Case l.
o This hypo points out, that due process imposes a huge burden on D. To escape liability, Airline
would have to win all 100 cases involving the 100 passengers. Because of due process, it can
never use issue preclusion against a successive P.
o Ex: Same facts about the plane crash & that in Case 1, P-1 sues Airline. The case is litigated and a
valid final judgment on the merits was entered in favor of P-1; the fact-finder expressly found that
Airline was negligent and that its negligence was the proximate cause of P-l's negligence. In Case
2, P-2 sues Airline. Can P-2 use issue preclusion on the finding that Airline was negligent? All the
basic requirements are satisfied, and issue preclusion is being asserted against Airline, which was
a party to Case 1, so due process is satisfied. The problem here is mutualityIssue preclusion is
being asserted by someone who was not a party to Case 1.
o Notice the policy choices raised; if court follows the mutuality rule, all 100 Ps will be required to
prove Airlines negligencesame issue will be litigated, in theory, 100 separate times.
o Inconsistent results are likelysome Ps will lose and some will winfostering the sense that
judicial system is little more than a gaming table. Thus, permitting P2 to use issue
preclusion will foster efficiency and consistency. But at what cost?
o Allowing nonmutual issue preclusion in this case could lead to Airline being liable to 100 people
(if claimant 1 proves negligence), and even if P1 loses, they cant use that judgment to preclude
the other 99 from litigating and trying to prove negligence.
o Should judicial system for entities such as airline to face potential mass liability on the strength
of 1 adverse finding?
o Ex: Suppose the first ten passengers bring individual suits against airline. Airline wins all ten,
with the fact-finder in each case expressly finding that Airline was not negligent. Now P-11 sues
Airline. Because of due prsoces, as we have seen, Airline cannot use issue preclusion against
P11, so all issues are litigated. Assume P11 wins a valid final judgment on the merits, with an
express finding that Airline was negligent. Now can P-12 through P-100 use issue preclusion
against Airline in their cases? After all, P-11 won by establishing an issue that P-12 through P100
must establish

ii.

iii.

(All the rest of these bullets are topics derived from Parklane)The defensive use of
issue preclusion gives the claimant an incentive to join all potential D in Case 1. After all, if
claimant fails to do so, and loses Case 1, D in Case 2 can use the adverse finding against the
claimant in Case 2. Thus, recognizing nonmutual defensive issue preclusion probably promotes
efficient joinder of Case 1the claimant will probably join all potential Ds in that case.
o But the offensive version creates the opposite effectit counsels potential claimants not to join
I as a party to Case 1. Why? By staying out of case 1, a potential claimant risks nothing and
may gain something. If P1 loses in Case 1, P2 is not bound by the judgment in that case
(because of due process). But if P1 wins in Case 1 and the court recognizes nonmutual
offensive issue preclusion, P2 can use P1s victory to her own advantage in case 2. Thus, this
type of preclusion will likely increase rather than decrease the total amount of litigation, since
potential [claimants] will have everything to gain and nothing to lose by not joining case 1.
o The answer is not to prohibit, but to apply it only in cases In which it will not reward a private P
who could have joined in Case 1 (discourage wait-and-see attitude).
o Moreover, court expressed concern that NMOIP might be unfair to D in various circumstances:
1. D who is sued in case 1 for a small amount of money might have little incentive to defend
w/vigor, especially if she foresees no other litigation concerning the event.If she lost
Case 1, it would be unfair to allow issue preclusion in Case 2 where claimant seeks a large
recovery.
2. If there had been multiple judgments concerning the underlying events it would be unfair
to allow a claimant to get issue preclusion from one in which D was found liable and to
ignore another in which D won.
3. Preclusion would be unfair if D in Case 1 did not have a full and fair opportunity to litigate
in Case 1. This latter point is consistent w/ a safeguard we saw in NMDIP. (no preclusion of
any sort ought to be accorded if the person against whom it is sought did not have such an
opportunity in Case 1.
Procedural opportunities: ONMIP might be unfair where D faced procedural hurdles in
first suit; inconvenient forum that withheld D from defending suit to its best capability
(too costly to put up good defense because the inconvenience cost had to be accounted
forflying, hotels, travel, accessibility to things etc.)
Parklane final analysis, court embraced NMOIP, but only in cases in which these concerns are
met (Parklane being one of them:
1. It was not a case in which allowing preclusion would promote inefficient litigationPs in
Case 2 could not have joined in Case 1 because Case 1 was brought by SEC and private
Ps would not have been permitted.
2. None of the three examples of unfairness was presentone, given the seriousness of the
allegations in Case 1, and the clear foreseeability that private Ps would sue if the SEC won
Case 1; two, there were no inconsistent judgment on the booksthe only judgment was
unfavorable to D; three, there were no procedural opportunities available in Case 2 that
were not available in Case 1. Thus, the court concluded none of the considerations that
would justify a refusal to allow the use of offensive collateral estoppel was present.
Interestingly, the Court saw no unfairness in the fact that the use of issue preclusion in
Parklane robbed D of a right to jury trial on the issue of whether its proxy statement was
misleading. That issue was decided in an administrative proceeding before the SEC, in which
there is no right to jury trial. In the ensuing civil case in Fed. Court, D wouldve had a 7th
amendment right to jury trial on that question.
Employing issue preclusion to establish the issue meant that the D was never entitled to have
a jury determine the factscourt did not consider this to be a procedural unfairness that would
render issue preclusion unavailable.
Parklane stands for the proposition that NMOIP is appropriate, but only If the court in Case 2 is
convinced (1) that the party using issue preclusion could not easily have joined in the earlier
action, and (2) that the use of issue preclusion is not unfair to D.
This analysis has been adopted by the Fed. Courts and several states, but still not the majority
viewessentially the majority has not embraced NMOIP.
Ex: (Finish w/ a hypothetical and an insane answer to it): Commercial airplane
operated by Airline crashes injuring 100 passengers. Case 1, one passenger (P-1) sues
Airline. The case is litigated and a valid final judgment on the merits is entered in favor of
P-1; the fact-finder expressly found that Airline was negligent, and that its negligence was
the proximate cause of P-l's injuries. In Case 2, a second Passenger (P-2) sues Airline. Can
P-2 use issue preclusion on the finding that Airline was negligent?
Basic requirements for IP: Case 1 ended in valid final judgment on merits, issue of Airlines
negligence was litigated and determined, and finding on that issue was essential to judgment in
Case 1All satisfied.
Next, there is no problem of due process, because preclusion is being asserted against Airline,
which was a party in Case 1. But the assertion of preclusion her is nonmutualit is being made by
someone (P2) who was not a party to case 1. And it is offensiveit is being asserted by a claimant
in Case 2. Should NMOIP be permitted?
Answer depends on the applicable law. If we are applying the law of a state that adopts only the
exceptions to mutuality, this assertion will not be permitted. Why? Because the exceptions apply
on in vicarious liability situations (not so here), and, even then, only to assertions of issue
preclusion by a D. If we are applying the law of a state that adopts only NMDIP, answer is also no.
So only if we are in a JRX that adopts the Parklane approach is there any chance to have preclusion
here.
Now, if we are in a Parklane JRX, we must assess the factors given in that case. First, if P-2 could
have joined in Case 1, the Court indicated, she should not be permitted to use preclusion. To let
her do so would reward a "wait and see" attitude that fosters inefficient litigation. On the other
hand, as noted, the Court did not say that failure to join always led to forfeiture of issue preclusion.
Moreover, it did not say whether this factor alone would obviate preclusion even if the other
o

IV.

factors counseled in favor of preclusion. And here the other factors seem to do just that. One, Case
1 was for a serious claim, and Airline knew that the crash injured 100 people, so it is clear that it
had every incentive to litigate vigorously and could foresee future litigation by the other
passengers. Two, there are no inconsistent judgments on the books here, so P-2 is not simply
picking a finding she likes and ignoring those that hurt her cause. And three, there is no indication
that airline did not have a full and fair opportunity to litigate in Case 1. So where does that leave
us? Again, it depends upon how one weighs the factors.
Ex: Suppose the first ten passengers bring individual suits against Airline. Airline wins all ten, with
the fact-finder in each case expressly finding that Airline was not negligent. Now P-11 sues Airline.
Because of due process, as we have seen, Airline cannot use issue preclusion against P-11, so all
issues are litigated. Assume P-11 wins a valid final judgment on the merits, with an express finding
that Airline was negligent. Now, can P-12 through P-100 get issue preclusion against Airline in their
cases?
Here, the preliminary analyses are the same as above regarding the basic requirements of issue
preclusion, due process, and whether nonmutual offensive issue preclusion would be permitted.
Only in a Parklane JRX is it even arguable. Under Parklane, would such preclusion be allowed?
Again, we have the problem of not knowing exactly what the Court meant when it assessed
whether a later claimant could have joined in an earlier case. Beyond that, however, here we have
inconsistent judgments. Airline has won ten times. It has lost only once. It seems grossly unfair to
allow P-12 through P-100 to take advantage of this one holding. The second of the three "fairness"
factors seems clearly to counsel against use of preclusion here. This case is fairly easy because it
seems that the judgment in the eleventh case was an aberration. We should not repose much
confidence in it.
That fact leaves unanswered the big question, however. Assume P-1 wins in Case 1. Because it is
first, there are no inconsistent judgments on the books, and the argument in favor of applying
preclusion is stronger under Parklane. But how do we know that this judgment is not the fluke?
Maybe, if all 100 cases were litigated separately, Airline would win the other 99. Parklane does not
tell us why we should repose such great confidence in a single judgment. Perhaps nervousness
over this point explains why some JRXs have never embraced nonmutual offensive issue
preclusion. One way around the problem would be to have a test case (or group of test cases) go
through trial to see which way the wind is blowing, as a means of ultimately settling the overall
disputes. (We discussed the test case as part of the consideration of Taylor v. Sturgell
FRCP 60(b)motion to set aside judgment (reopen judgment)incredibly difficult to reopen
judgment. If want to challenge use an appeal because 60(b) is virtually always denied.
Making it to easy to reopen judgment would undermine the validity of a final judgment.
Want to incentivize parties to make their arguments as complete as possible the first time around in
court:
Promotes judicial economy
Importance of finality
Other policy reasons
Independent action under 60(b): Has to be a grave miscarriage of justice for this to be an available
option.
Court looks at what could have been done, and what was done.
The strictness of the motion is designed to force people to do research to the best of their ability.
United States can never be subject to NMOIP.
Full Faith & Credit and Related Topics
A. In General
Here we are concerned with a different issue: In determining whether the judgment from Case 1 is
entitled to claim or issue preclusive effect in Case 2, what preclusion law does the court in Case 2
use?
There are 4 scenarios where this can happen:
1. Case 1 and Case 2 are decided in state courts of different states; we call this situation
"state-to-state preclusion."
2. Case 1 is decided in a state court and Case 2 is filed in Fed. Court; we call this situation
"state-to-federal preclusion."
3. Case 1 is decided in a Fed. Court and Case 2 is filed in a state court; we call this "federalto-state preclusion."
4. Cases 1 and 2 are in Fed. Courts in different states; not surprisingly, we call this "federalto-federal preclusion."
Answer: A state or Fed. Court in Case 2 must give "the same full faith and credit" as would be given
by the state court that entered judgment in Case 1.
When the rendering court in case 1 was Fed. Court, the rule is generally the same because Fed.
Court will apply preclusion law of the state in which it sits.
Exercises: (In Federal Court)
Hypo #1: Car accident. A sued B for negligence. Court rules for B. A sues again for negligence one month
later. Answer: STEP 1: Test whether we have the same claim from the same transaction and occurrences:
Second claim is from the same nucleus of facts, and is in fact the same claim. Step 2: On the merits? Yes,
jury told us. Answer: claim preclusion bars the second claim.
Hypo #2: Same as first but B wins and the second time around just sues for more money. Answer: suing
for more money does not effect claim preclusion from being enforced. Difference in damages asked for
does not mean it is a different claim.
Issue Preclusion Hypo:
A gets bad drug from batch #1119 and sues MFR. in Fed. Court on diversity JRX. Court finds drug was
defective and awards for A. B sues same MFR. in Florida state court. Can B invoke issue preclusion?

1) JRXFlorida looks to where Case 1 was held: Federal Court, but based on diversity. Federal court thus
applies Kansas state law, so Florida has to apply Kansas preclusion law. Kansas law requires mutuality, so
there is no issue preclusion here.
Client, Z, walks into office saying D punched him. Questions we ask relevant to preclusion: Have you sued
this person before, and has anybody else sued this person before? What else happened during the
altercation; any other claims to bring from the same transaction and occurrence?
Joinder
FRCP 18
Joinder Rules and JRX rules are separatejust because joinder allows it doesnt mean JRX rules will (and
vise-versa).
Step 1: Find the joinder rule. If we have it and it passes then:
Step 2: Check the JRX rules
Joinder
I.

Defining the Issue


Federal Rules focus largely on the "transaction or occurrence" giving rise to alleged liabilitymany
(though not all) joinder rules permit joinder of parties and claims along transactional lines.
Policy: The drafters' goal was to allow resolution of transactionally related disputes in a single case,
rather than foster piecemeal litigation arising from a single real-world event.
o This trend toward "packaging" transactionally related parties and claims into a single case is
driven at least in part by a desire to promote efficiency and consistencyone case burdens the
justice system less than multiple cases; it also avoids the possibility of inconsistent outcomes,
which can erode public confidence in the justice system.
o Of course, the emphasis on packaging, and avoiding duplicative litigation, is heightened in an
era of crowded dockets and litigation delay.
o Most of the joinder provisions are permissive, however, which means that litigants may take
advantage of their packaging potential, but are not required to do so.
o The Rules thus embody a policy of litigant autonomy- that is, they tend to defer to the P's
structuring of the case.
o Appreciate the tension between the urge to package the litigation efficiently and this sense that
P ought to be entitled to structure the case as she sees fit.

Mastering the joinder rules is not enoughjoinder rules provide the procedural tools for joining
parties and asserting claims in a single case, but hey do not (in fact, under Federal Rule 82, they
cannot) affect the requirements for PJRX, SMJRX, or venue.
Thus, every time a joinder provision is used in fed. court, it raises the need to assess JRX
and venue.
o When a party is joined in a defensive capacity, the court must have PJRX over her. (If a new
party is joined in an offensive capacity (to assert a claim), she has submitted herself to the
PJRX of the court and waives any objection on this score.)
o Likewise, we will see that venue is relevant only in a few joinder situations.
o SMJRX is criticalremember; every claim joined in fed. court must be supported by
federal SMJRX.
Thus, for every claim asserted, we must assess whether the claim invokes an
"independent basis" of SMJRXmeaning it invokes DJRX, alienage, or FQJRX.
What happens if claim does not invoke independent basis for SMJRX?
o It might still be asserted in fed. court through SUPJRXSUPJRX permits a fed. court to hear a
claim over which it does not have one of the three major independent bases of SMJRX (see
above).
o It is available, however, only if the claim meets the requirements of the SUPJRX statute, 28
U.S.C. 1367.
o Remember, however, that SUPJRX is only relevant for claims over which there is no DJRX,
alienage, or FQJRX.
Be mechanical in approaching joinder issues and SMJRXwhether a claim can be asserted (or a
party joined) in fed. court requires us addressing three steps:
1) Is there a joinder provision in the Federal Rules that allows assertion of this claim (or joinder of
this party)?
2) If so, does this claim invoke DJRX, alienage, or FQJRX? If so, it may be asserted in the pending
case. If not,
3) Third issue is whether the claim can still be asserted in fed. court because it invokes SUPJRX.
(28 U.S.C. 1367(a) &(b))

II. Claim joinder by a Claimant (Rule 18(a))


A. Procedural and Policy Issues
Federal Rule 18(a) governs the question of what claims Pcan assert in a single case. The rule
essentially has no requirements.
The word claims, as used in Rule 18(a), is not necessarily synonymous with the definition of
claims for claim preclusion purposesIn Rule 18(a), the word refers to assertions or bases of
liability, but multiple assertions of liability might comprise a single claim for claim preclusion
purposes. (**Quick note "May" is to be contrasted with "must," which, of course, states a
command.)
Rule 18(a) allows the assertion of all claims P may have against D& the claims do not have to be
related in any way:

o
o
o

They can be completely unrelated transactionally, legally, and in terms of the remedy sought.
They can be independent or alternate claims; they can be legal or equitable.
There are simply no procedural restrictions. While the provision is simple, it raises several
points.
1) Why should the Federal Rules countenance joinder of unrelated claims?
o Rule 18(a) can result in the assertion of disparate and unrelated claims, which runs the
risk of confusing the jury.
o However, this issue is addressed by permitting the trial judge to order separate trials,
among other reasons, to avoid such confusion.
o As a matter of policy, then, the Federal Rules choose to permit Pto put the entire dispute
between the parties into a single case. It may be that such open claim joinder allows the
parties to settle all their overall disputes by allowing packaging of all claims in a single
proceeding.
o If the matter goes to trial, the trial judge is armed with tools to keep things manageable
for the trier of fact.
2) The rule provides that P "may" join as many claims as she has against D.
o The word "may" makes this rule "permissive," which means it does not require Pto assert
all claims in a single case.
o P thus may choose how many assertions to include in a single case. (Don't forget claim
preclusion might affect the P's choices.

P and D, each driving her own car, collide; each is injured and each car is damaged. P
sues D and asserts only a claim for personal injuries from the collision; she does not
seek recovery for property damage. There is nothing wrong with this course of action
under Rule 18(a), because it is permissive and does not require her to pack all claims
into a single case. Suppose, however, that this case results in a valid final judgment
on the merits and that P files a second case against D, to recover for property damage
from the crash. In a JRX adopting a transactonal defi nition of claim this second case
will be dismissed under claim preclu sion. See 11.2.'3. As a consequence, although
Rule 18(a) is permissive, the majority view on claim preclusion operates to force Pto
join all transactionally related assertions in a single case.

3) Though we say "claim joinder by the P," Rule 18(a) permits any party asserting a claim
for relief to join "as many claims as it has against an opposing party."
o This language recognizes Ds can become Ps by asserting counterclaims, crossclaims, or
third-party claims.
o Note, however, that Rule 18(a) does not apply to them until they become claimants by
asserting one of the listed claims.

A is asserted against a coparty, and must arise from the same transaction or occurrence as
the underlying dispute.
o Suppose P sues two Ds, D-1 and D 2, concerning a contract dispute. Suppose further that
D-1 has a claim against D-2 that is completely unrelated to that contract dispute. D-1
cannot use Rule 18(a) to assert that unrelated claim until she has asserted a crossclaim
against D-2. Why? Look again at the Rule: The "you-can-assert-anyclaim-you-want" part of
the Rule applies only to a party who 1s asserting a claim" (such as a crossclaim).
o So if D-1 has a claim against D-2 that arises from the underlying contract dispute, she
may assert it as a crossclaim and then use Rule 18(a) to join the unrelated claim. Without
the crossclaim, however, D-1 cannot assert the unrelated claim in the pending case.

B. SMJRX
Rule 18(a), like other joinder provisions of the Federal Rules, simply creates a procedure for
asserting a claim. The claims can be asserted in fed. court only if they invoke FSM
Junsd1ct10n.
o P, a citizen of California, sues D, a citizen of Nevada, and uses Rule 18(a) to join two
claims: (1) that D had violated federal employment law in firing P and ( 2) that D had
breached an unrelated contract between the two, causing damage to P of $100K.
Joinder of the claims is procedurally proper under Rule 18(a). Is there subject mater JRX
over the claims? Yes. Claim (1) invokes FQJRX because it arises under federal
employment law. Claim (2) invokes DJRX because 1t 1s asserted by a citizen of
California against a citizen of Nevada and the AIC exceeds $75K.
o P, a citizen of Massachusetts, sues D, a citizen of Arizona, and uses Rule 18(a) to
join two state law claims: ( 1) that D breached a contract between the two, causing
damage of $45K to P; and (2) that D com mitted an unrelated tort, causing damage of
$50K to P. (Throughout this chapter, the reference to claims arising under state law
is meant to indicate that they will not invoke FQJRX. Some state law claims do invoke
federal question, as we saw in 4.6.4, but we won't go there in this chapter.) Joinder of
the claims is procedurally proper under Rule 18(a}. Is there SMJRX over the claims? Yes.
The case invokes DJRX. It is brought by a citizen of Massachusetts against a citizen of
Arizona, and the AIC exceeds $75K. Why? The concept of aggregation permits a single P
to add the value of all claims that she asserts against a single D. So here the AIC is
$95K.
o P, a citizen of Tennessee, sues D, a citizen of Tennessee, and uses Rule18 (a) to join two
claims: (1) that D violated federal labor laws in a labor dispute and (2) that D violated
state law in the same labor dispute. Joinder of the claims is procedurally proper under
Rule 18(a). Is there SMJRX over the claims? Yes. Claim (1) invokes FQJRX, because it
arises under federal labor laws. Claim (2) does not invoke FQJRX (because it arises

under state, not federal, law). Claim (2) also does not invoke DJRX, because Pand D are
co citizens. But Claim (2) does invoke SUPJRX. Why?
Section 1367(a) grants SUPJRX over claims that are part of the same "case or
controversy" as a claim that properly invoked FSMJRX. As explicated by the Supreme
Court, this requirement is satisfied if the claims share a "common nucleus of operative
fact." As we discussed in 4.7, this test is broader than transaction or occurrence. Here,
the two claims asserted by P do arise from the same factual nexus. Section 1367(b),
which removes SUPJRX over certain claims, applies only in cases that invoked DJRX. This
case invoked FQJRX, so 1367(b) does not apply.

III. Permissive Party Joinder (Rule 20(a))


A. Procedural and Policy Issues
Many cases involve 1 P suing 1 D; however, many cases involve multiple partieseither coPs or
coDs (or both).
Here, we address the question of "proper parties" to a civil case, meaning those who may be
joined in a single case.
The issue is governed in fed. court by Federal Rule 20(a).
o This Rule is available to P when she is structuring the case.she decides whether to have
multiple parties either on Por Ds side and, if so, who those parties will be.
o Various considerations, including litigation strategy and JRXal limitations, may affect her
choice.
Rule 20(a)(1) defines who may be joined as coPs & Rule 20(a)(2) defines who may be joined
as coDs.
o Each Rule prescribes the same two-part test Rule 20(a)(1): two or more may join
together as coPs if their claims
1) Arise "out of the same transaction, occurrence, or series of transactions or occurrences"
and
2) Raise at least one common question (of law or fact).
o Rule 20(a)(2): two or more may be joined as coDs if the claims against them
1) Arise from the same transaction or occurrence and
2) Raise at least one common question (of law or fact).
Few cases raise problems with the second requirementthe Rule requires the existence of
only one common question, and it can be a question of law or fact.
That common question need not be of predominant importance in the case; it simply must
exist, which will be obvious in most instances.
Most of the difficulties encountered with Rule 20(a) involve the requirement that the claims
by or against multiple parties must be transactionally related.
Before exploring that issue, it is important to note that Rule 20(a) continues a theme we
see throughout modern procedure: the packaging in a single case of claims arising from,
and parties involved in, a "transaction or occurrence."
This focus on the transactionon the real-world grouping of factsunderlies the
modern definition of claim for claim preclusion purposes.
It also underlies several claim joinder devices, and, as we will continue to see, the
concept of transactional relatedness defines the general availability of SUPJRX.
o At the margin, some courts have been remarkably inventive in stretching the concept of the
transaction to allow joinder of parties.
o Perhaps these courts have been especially liberal because Rule 20(a), unlike other
transaction-based joinder rules, speaks not only of claims arising from the same transaction
or occurrence, but of a "series of transactions or occurrences."
o On its face, this language seems broader than rules that speak only of a transaction or
occurrence. Few opinions, however, justify a broad reading of the Rule on the basis of this
additional language. (For an examples see page 666 & 667)
B. Strategic Issues
As we know, joinder of parties under Rule 20(a) is permissiveso because the Rule gives P the
option to take or leave the joinder opportunity it provides, it allows P to engage in strategic
choices.
o

P-1 and P-2 take a ride in a taxi cab. The driver is negligent and causes a crash that injures
both P-1 and P-2. Those two may join together in a suit against the cab driver under Rule
20(a)(l). Why? Because their claims against the cab driver (1) arise from the same
transaction or occurrence ( the crash) and (2) raise at least one common question (whether
the cab driver was negligent). They do not have to do so. Each may file a separate action
against the cab driver if she prefers.
Could P-1 (or P-2 or both together) sue two Ds- the cab driver and the company for which
the cab driver works- in the same case? Yes, joinder would be proper under Rule 20(a)(2)
because the claims against those two ( 1) arise from the same transaction or occurrence
(the crash) and ( 2) raise at least one common question (again, whether the cab driver was
negligent). Again, the Rule is permissive, so Pcan choose to sue both Ds in a single case or
to sue them in separate actions.

Given these scenarios ? is: Why would a P ever fail to join all possible Ps and Ds under Rule
20(a)?
Depending on the facts, there may be JRXal limitations on doing so.
For example, perhaps court cant get PJRX over one of the potential Ds or perhaps
joining all the parties will make it impossible to invoke DJRX.
Our focus here, however, is on the sorts of litigation strategies that might animate the P's
selective use of Rule 20(a).

Speaking very generally, Ps prefer to have all potential Dseveryone who might potentially
be liable for her harmjoined in a single case. Reasons:
1) It is less expensive and less burdensome to sue once than to file a separate case
against each potential D. T
2) The advent of nonmutual defensive issue preclusion gives Pan incentive to sue several
Ds at once if she sued separately and lost against one D, Di another suit may be able
to use issue preclusion against Pon any negative findings.
3) P can often benefit from each coD's effort in the litigation to shift the blame from itself
to other coDs.
4) Quite important as a practical matter, suing individual Ds allows them to whipsaw the P
D in one case might convince the jury that the harm to Pis not her fault, but the fault
of someone who is not a party in this case. D in the other case can do the same,
leaving a P who may have convinced two juries that she is entitled to relief, but who
recovers nothing because each jury thinks the fault lies with an absentee.
Similarly, as a general matter, Ps prefer not to have coPs suing with them. Reasons:
1) Suing alone may allow Pto recover from a D first, before other Ps can get at the D's
assets.
2) She may conclude that her case is more compelling than those of the other potential
Ps, and that adding a coP would tarnish her luster and divert the jury's attention from
her.
3) Even if the case settles without going to trial, there is a widely held view that a single P
fares better simply because she does not have to share a recovery with others.
Thus, as a general strategic matter, we expect to see Ps use Rule 20(a)(2) to join all
potential Ds into a single case, but to keep center stage to themselves on the P's side.
C.

What Are Misjoinder, Severance, Separate Trials, and Consolidation?


What happens if Pstructures the case in violation of Rule 20(a)? Rule 21 provides that such
"misjoinder of parties" is not a basis for dismissal of the suitinstead, court may "sever
any claim against a party."
Severance results in two or more separate suitseach will have its own docket number and
will result in its own judgment.
This concept of severance is different from a court's ordering a separate trial under
Rule 20(b) or 42(b)a separate trial is just that, a separate adjudication of a claim (or
claims) that are part of one case.

P-1 and P-2, properly joined as coPs under Rule 20(a)(l), sue D on a claim that D
breached a contract between the three. In addition, P-1 asserts an unrelated claim
against D, concerning an entirely separate event. P-1 has the right to assert this
unrelated claim under Rule 18(a) (1), as we saw in 12.3. Although those claims are part
of one case, the court may order a separate trial on the unrelated claim asserted by P1 against D. After all, it involves different facts from the main claim, and might distract
or confuse the jury hearing that main claim. So the two claims will be tried separately.
But ultimately, they will be determined in a single judgment, because they are part of a
single case. (In 14.5.1, we see that the court might ultimately treat the separate
claims as sep arate "cases" for purposes of appeal under Rule 54(c). But that's for
later. The point here is that these claims, although tried separately, are properly joined
in a single case.)
Contrast that situation with this: P sues two Ds, D-1 and D-2, alleging that they caused
him tortious harm. The court concludes, how ever, that joinder of the two Ds violates
Rule 20(a)(2), because they caused harm to P, if at all, in separate transactions. Here,
under Rule 21 the court will order severance. The result of that order is to cre ate
two'cases: ( 1) by P against D-1 and (2) by P against D-2. (Actually, the court will
simply drop D-2 as a D, and P will have to file the second case (against D-2 ) and pay
the filing fee for that case.) But there are now two separate cases, which will result in
two separate judgments. This result is dictated by the fact that D-1 and D-2 were not
properly joined in a single case because the claims against them did not satisfy Rule
20(a)(2). (36The same thing would happen if two Ps were misjoined under Rule 20(a)
(l).)

In this latter scenario, there is another procedural device that might come into play:
consolidation under Rule 42(a).
Consolidation permits a court in which two (or more) separate cases are pending to
consolidate the cases for any or all purposes.
The only requirement is that the separate cases involve at least one common
question of law or fact.
Consolidation means that those separate cases will be treated together for whatever
purposes the court deems appropriate.
o For example, the court might order consolidation for purposes of discovery, or for
motions, or for trial, or even for all purposes. Consolidation does not merge the
separate cases; they are still separate cases and will result in separate judgments,
even if consolidated for all purposes.38
As we noted above, Ps often attempt to join multiple Ds in a single case to ensure that
they will be tried before the same jurythat way P avoids the risk of having the jury
conclude that the real "bad guy" is someone who is not in the court. If such a P loses the
battle of joinder under Rule 20(a)probably because the court concludes that the claims
against the two do not arise from the same transaction or occurrence-she might still win
the war at trial if the court orders consolidation for trial.

Ex: P owned property in TN and claimed that it was damaged by chemicals poured into
the air by two chemical plants. The plants were operated by different companies. P
joined both companies as coDs. The court rejected the joinder, however, because it
concluded that what each company did was a separate transaction or occurrence. It
ordered severance, after which Phad two separate cases, one against each chemical
company. In the same opinion, however, the court ordered that the now separate
cases be consolidated for trial. Thus, Pwould get the advantage of having the two Ds
before the same jury at the same time.
** The separate cases to be consolidated must be pending in same federal district (or
division w/in a district). Thus, a case pending in the SDNY cannot be consolidated
w/a case pending in the EDPA. Remember, however, that cases can, in appropriate
circumstances, be transferred from one federal district to anotherIf the case in the
SDNY were transferred to the EDP, the two cases could be consolidated. But transfer
and consolidation are separate steps.
D.

Subject Matter JRX


P uses Rule 20(a) to determine how many Ps and how many Ds will be joined in a single case.
Once she does so, she must ensure that the case as structured can be brought in the court she
chooses.
Thus, she must assess whether the court has PJRX over the Ds, whether venue is proper, and, of
course, that the case will invoke SMJRX. Let's assume P wants to sue in fed. court.
o P sues two Ds, D-1 and D-2, properly joining them under Rule 20(a)(2). All three litigants are
citizens of California. P's claim against D-1 alleges that D-1 violated P's rights under a
federal statute. P's claim against D-2 alleges that D-2 breached a state law duty to P. The
claims against the two obviously (given one of the requirements of Rule 20(a)) arise from
the same transaction or occurrence. Is there federal SMJRX as the case is structured?
o The claim against D-1 invokes FQJRX, because it is for violation of a right created by a
federal statute.
o The claim against D-2 does not invoke FQJRX, because it arises under state, not federal,
law. Further, the claim does not invoke DJRX, because P and D-2 are cocitizens.
o The claim against D-2 does, however, invoke SUPJRX. First, 1367(a) grants SUPJRX
because the claim against D-2 involves the same "case or controversy" as the claim that
invoked FSMJRX (the claim asserted by P v. D-1 ). Why? Because it meets the "common
nucleus of operative fact" test which is actually broader than "transaction or occurrence"
test. So any claim, such as the claim here, that arises from the same transaction or
occurrence as a claim that invokes an independent basis of federal SMJRX will always
meet common nucleus of operative facts and, therefore, invoke JRX under 1367(a).
Second, 1367(b) does not remove the grant of SUPJRX, because that subsection
applies only in cases that invoked DVJRX. This case invoked FQJRX, so 1367(b) does not
apply.
Now let's push farther with three important hypotheticals:
1) Two Ps, P-1 and P-2, properly joined under Rule 20(a)(l), assert state law claims against a
single D (D). P-1 is a citizen of California. P-2 is a citizen of Arizona. D is a citizen of
Nevada. P-l's claim is for $100K but P-2's claim is for $60K. As structured, is there federal
SMJRX? Because the claims arise under state law, there is no FQJRX. What about DJRX?
Certainly there is no problem with citizenship, because the two Ps are citizens of different
states from the D. But there is trouble with the AIC. P-l's claim meets that requirement,
because it exceeds $75K and thus invokes DJRX. But P-2's claim does not satisfy the
amount in controversy requirement, since it does not exceed $75K. And when there are
multiple parties such as this, they may not aggregate their claims to meet the AIC
requirement, as we discussed in 4.5.3. So it seems that the court should drop the claim
asserted by P-2 from the case. But might the SUPJRX statute change this result?
The claim asserted by P-1 against D invokes DJRX. The claim asserted by P-2 against D
does not. But because the two claims arise from the same transaction or occurrence,
1367(a) grants SUPJRX over the claim by P-2. Obviously, 1367(b) should remove
SUPJRX over this claim, or else the AIC requirement will be eviscerated. But does it?
Again, look carefully at its terms. Section 1367(b) applies only in cases that invoke
DJRX (which P-1 v. D does). And it removes JRX over claims brought "by Ps against
persons made parties under Rule . . . 20." That is not the situation in this hypothetical.
Here, the claim is asserted by persons made parties under Rule 20 against a D.
Nowhere does 1367(b) remove the grant of SUPJRX.

In Exxon Mobil Corp. u. Allapattah Services, the Supreme Court embraced this
interpretation, and upheld supplemental JRX over JRXally insufficient claims by Ps, so long
as they arose from a common nucleus of operative fact with the claim of a plain tiff that did
satisfy the AIC requirement.
2)

P, a citizen of California, sues two Ds, D-1 and D-2, properly joining them under Rule
20( a)( 2). D-1 and D-2 are citizens of Kansas. P's claims against D-1 and D-2 arise under
state law. The claim against D-1 is for $100K and the claim against D-2 is for $60K. Here,
the claim by P against D-1 obviously invokes DJRX. The claim by P against D-2 does not,
however, because even though it is by a citizen of California against a citizen of Kansas, it
does not exceed $75K.
Based upon the preceding hypothetical, however, we would expect the claim by P
against D-2 to invoke SUPJRX. Indeed, the claim does satisfy 1367(a), as in
hypothetical One. But look carefully at1367(b). It applies in diversity cases, such as
this case. And it removes SUPJRX over claims by Ps against persons joined under Rule

20. That is exactly what we have here! D-1 and D-2 were joined under Rule 20, so
1367(b), on its face, removes SUPJRX over this claim.
This result makes no sense. Why should SUPJRX be proper to overcome an AIC problem
in a diversity case when there are multiple Ps but not when there are multiple Ds? The
hypothetical simply manifests one of many problems caused by a very poorly drafted
statute.
3) Two Ps, P-1 and P-2, properly joined under Rule 20(a)(l), assert state law claims against a
single D (D). P-1 is a citizen of California. P-2 is a citizen of Arizona. D is a citizen of
Arizona. P-l's claim is for $100K, and P-2's claim is for $200K. As structured, is there federal
SMJRX? Because the claims arise under state law, there is no FQJRX. What about DJRX? On
the face of it, no. P-1 is diverse from D, but P-2 is not diverse from D. The structure of the
case violates the complete diversity rule. But could 1367 affect this outcome?
Applying the statute literally, it seems the answer should be the same as in
hypothetical One above. Here, as there, it appears that the claim asserted by P- 1
against D invokes DJRX. The claim asserted by P-2 against D does not. But because the
two claims arise from thP same transaction or occurrence, 1367(a) grants supple
mental JRX over the claim by P-2. Obviously, 1367(b) should remove SUPJRX over this
claim, or else the complete diversity rule is rendered meaningless. But does it? Again,
look carefully at its terms. Section 1367(b) applies only in cases that invoke DJRX
(which P-1 v. D arguably does). And it removes JRX over claims brought "by Ps against
persons made parties under Rule . . . 20." That is not the situation in this hypothetical.
Here, the claim is asserted by persons made parties under Rule 20 against a D.
Nowhere does 1367(b) remove the grant of SUPJRX.
Arguably, there is no reason that the outcome here, in hypothetical three, should be
any different from that in hypothetical One. There, SUPJRX made up for a lack of AIC in
a diversity case. Here, it would make up for a lack of complete diversity in a diversity
case. Both the complete diversity rule and the AIC requirement are merely statutory
(not constitutional) provisions of the grant of DJRX under 1332. As such, each should
be equally amenable to change by 1367. OTOH, concluding that the parties may use
SUPJRX to overcome the complete diversity rule would possibly open the floodgates for
more cases than the courts could handle.
Allapattah, court avoided this by clarifying how JRX attaches in diversity cases. If there
is complete diversity, the presence of a single claim in excess of $75k invokes DJRX.
IOW, as in hypothetical 1 above, the claim by P-1 against D constituted a DJRX case in
fed. courts, to which the claim by P-2 could be supplemental. In contrast, the Court
said in dictum, if there is not DJRX between all Ps and all Ds, there is no diversity case
at all, and nothing to which SUPJRX can attach. In hypothetical Three, then, the claim
by P-1 against D failed to invoke DJRX, so there was no case in which to exercise
SUPJRX. Stated another way, the Court concluded, the AIC is "claim-specific" while the
complete diversity requirement is "action specific." (An action is the whole, which
includes claims.)
IV. Claim Joinder by D
Here, the interest is in suing somebodyasserting a claim against another party. The counterclaim
is asserted against an "opposing party'' (by Dagainst the P, for example), and the crossclaim is
asserted against a "coparty" (by one D against another D, for example).
Remember it is never enough simply to satisfy one of the Federal Rules allowing joinderin addition
(assuming the case is in fed. court), the claim must invoke federal SMJRX.
So for each claim asserted, the parties and court must address whether it invokes diversity,
alienage, or FQJRX; failing those, they must determine whether the claim invokes SUPJRX.
OTOH, PJRX and venue will not be a problemif the court lacked PJRX over the D, she should be
attempting to get the case dismissed on that basis rather than asserting a claim.
And by filing suit, P generally has waived any PJRX objection to being sued on a counterclaim.
Moreover, the venue statutes, speak of where an action may be "brought," meaning that they
dictate the place where Pcan sue the D; they do not require separate assessment of venue for
counterclaims and crossclaims.
Rule 13(h) provides that a D asserting a counterclaim or crossclaim can join new parties to the
claim so long as these newcomers are joined in accordance with the provisions of Rules 19 or 20.
Rules 19 & 20 are concerned with joinder of parties. Rule 13(h) thus puts a D asserting a
counterclaim or crossclaim on the same footing for party joinder as Pin originally structuring the
suit. We see an example of the use of Rule 13(h) later.
Because the counterclaim & crossclaim are claims for relief, the party against whom they are
asserted must respond just as Dhad to respond to the original complaint. (**Remember, defending
party may respond under Rule 12 either by motion or by answer)
1) Counterclaims (Rule 13(a) and Rule 13(b))
i.
In General
Rule 13 contains several subsections governing counterclaims in fed. court.
We see that there are two types of counterclaims: "compulsory" (under Rule 13( a)) and
"permissive" (under Rule 13(b)).
General characteristics common to both:
For starters, a counterclaim is asserted against an "opposing party"somebody who has
asserted a claim against the party. So if Dhas a claim against P(who has obviously sued the
D), it is a counterclaim.
Most counterclaims are asserted by Dagainst the P, but realize that any party against whom
a claim is made may have a counterclaim back against that party. For example, suppose
a D (D-1) asserts a crossclaim (addressed below) against a coD, CD-2). If D-2 has a claim

ii.

back against D-1, it will be a counterclaim. Once D-1 asserted the crossclaim against D-2,
the two became "opposing parties," making D-2's claim against D-1 a counterclaim.
It also bears repeating that a counterclaim is a claim, not a defense; thus, it does not
attempt to "diminish or defeat the recovery sought by the opposing party"that function is
handled by responsive pleadings & motions.
Instead, with a counterclaim, Dis suing the P. Rule 13(c) provides expressly that the coun
terclaim may exceed the Ps claim. In addition, the counter claim can be for a different type
of relief than the P's original claim. For instance, if Psues for damages, Dmay counterclaim
for an injunction. Similarly, if Psues for $80K, Dcan counterclaim for $8 million.
Under Rule 13(a) and (b), a counterclaim is to be asserted in "[a] pleading."
Because Dasserting the counterclaim has already been sued, the pleading will be an
answerso the counterclaim is asserted in the D's answer.
If the party fails to assert the counterclaim in her answer, she may be able to amend the
answer to assert the claim.
The matter is treated as an amendment question.
What happens, however, if the D's counterclaim does not maturethe claim does not
accrueuntil after D has already answered?
That situation is addressed by Rule 13(e), which allows D to assert the claim by
"supplemental pleading."
This provision is consistent with our discussion of supplemental pleadingsa
supplemental pleading involves events occurring after a pleading has been filed.

The Compulsory Counterclaim


A. Procedural and Policy Issues
The compulsory counterclaim is created and governed in federal practice by Federal
Rule 13(a)(l)(A).
As we know counterclaim is always asserted against an "opposing party.", and when it is
compulsory, it arises from the "same transaction or occurrence" as the opposing party's
claim.
In the usual context, it is a claim asserted by Dagainst the P, and it arises from the
same transaction or occurrence as the P's claim against the D.
The compulsory counterclaim is so named because the Rule 13 says the party "must" assert
the claim in the pending case.
"Must" is mandatory; it commands that the act be doneinterestingly, the Rule does not
expressly state the consequence of violating the command. Nonetheless, that
consequence is clear: The party failing to assert a compulsory counterclaim loses
the claim and cannot assert it in another proceeding.
o Hypo: A and Z , each driving her own car, collide. Each suffers personal injuries. In Case
1, in fed. court, A sues Z to recover for her personal injuries. Z answers and defends that
suit, which is litigated to conclusion. In Case 2, Z sues A to recover for her personal
injuries from the collision. Case 2 should be dismissed. Z's claim was a compulsory
counterclaim in the original case, because it was against an opposing party and arose
from the same transaction or occurrence as A's claim in that case. Z failed to assert the
claim in the then-pending case, so cannot file it anywhere.
When we say "anywhere," we mean not only that Z cannot assert her claim in a
separate action in a fed. courtthe compulsory counterclaim rule should operate to
bar a subsequent case in state court as well (even if that state does not have a
compulsory counterclaim rule).
The compulsory counterclaim rule, properly understood, should be seen as
establishing an estoppel against D from asserting her claim in a second case. There is
no reason the estoppel should not follow Dand preclude the later litigation in any
court.
The converse should also be true: Failure to assert a compulsory counterclaim in Case
1 in state court (in a state that has such a rule) should bar Dfrom instituting Case 2 on
that claim in fed. court.
Remember that claim preclusion applies only when two actions are brought by the same
claimant against the same D.
Here, Case 1 was brought by A against Z. Case 2 was brought by Z against A. Z had never
been a claimant before and is not suing twice on the same claim. Other courts use the
language of waiver, which is more accurate. Case 2 is dismissed because Z, by failing to
assert the claim in Case 1, has waived the claim. Some speak of the compulsory
counterclaim rule as working "rule preclusion."
Estoppel rule: Failure to assert the claim in Case 1 estops D from asserting the claim
elsewhere.
Because estoppel is an equitable principle, it can be applied with a heart.
o For example, return to the hypothetical we just sawsuppose that in Case 1, Z's
insurance company took over the defense (as would normally be the case'") and failed to
inform Z of the compulsory counterclaim rule. If, through no fault or lack of diligence of
her own, Z was not informed of her right (let alone obligation) to assert the claim, perhaps
she should not be estopped from bringing the separate action.
Though the operation of the compulsory counterclaim rule is not the same as claim
preclusion, it serves the same function as the modern approach to that doctrine.
Both serve to force the joinder of transactionally related rights to relief into a single
case. (Recall that the modern approach to claim preclusion defines one's "claim" as all
rights to relief arising from a transaction or occurrence.)
Doing so is efficient and relatively convenient for the fact-finder, which may wrap up
all claims arising from what the parties will generally consider a single real-world
event.

B.

iii.

Moreover, the focus on the transaction is generally consistent with the exercise of
SUPJRX. To be sure, the definition of "transaction or occurrence" can be troublesome
at the margin, but in most cases the lines will be fairly easy to draw.
At this point, we need to refine our definition of compulsory counterclaim to reflect two
situations in which Dwill not be estopped from bringing a separate action.
1) If an otherwise compulsory counterclaim would "require adding another party over
whom the court cannot acquire JRX," Rule 13(a)(l)(B) provides that the claim is not
considered compulsory.
IOW, if the counterclaim implicates nonparties who should be joined but cannot be
joined (because, for example, there is no PJRX over them), it is not a compulsory
counterclaim.
2) Under Rule 13(a)(2)(A), D need not assert an otherwise compulsory counterclaim if
she has already asserted the claim in another case.
So in the hypothetical we saw above, suppose Z has already filed suit against A before
A sued Z. Then, Z need not assert the counterclaim against A when A sues her. (Of
course, when Z sued A,A's claim against Z would be a compulsory counterclaim in that
case (assuming the JRX has a compulsory counterclaim rule like Rule 13(a)). This
exception makes sense; it tells someone who has already asserted her claim that she
does not have to do so again.
Remember that a counterclaim is to be asserted in a "pleading," which means with the D's
answer.
Recall also, as discussed immediately before this subsection on the compulsory
counterclaim, that if D's claim matures after P sues D, it is not a counterclaim. See Rule
13(e).
If the case is resolved without the D's having to answer, the compulsory counterclaim rule
will not apply.
o Hypo: In Case 1, A sues Z for injuries sustained in an auto collision between the wo. Z
does not answer, but files a motion to dismiss for improper service of process. The
motion is granted and the case is dismissed. InCase 2, Z sues A to recover for her
personal injuries from the collision. Case 2 will not be dismissed, because the
compulsory counterclaim rule never attached in Case 1. Z never answered in Case 1, so
she could not have asserted a counterclaim."
SMJRX
Rule 13(a)(1) merely provides a procedural mechanism for asserting a claim.
The claim must invoke federal SMJRX, however, or else it cannot be asserted in fed.
court.
As always, this JRXal inquiry is a separate step, undertaken after determining that the
claim is properly asserted under Rule 13(a)(1).
o Hypo: A, a citizen of Maryland, sues Z, a citizen of Delaware, asserting a state law
claim of $500K. Z has a claim against A that arises from the same transaction or
occurrence as A's claim. It is based upon state law and Z claims damages of $100K. Is
there SMJRX over Z's compulsory counterclaim? Yes. Because the facts state that all
claims in this case arise under state law, there is no FQJRX. Obviously, though, A's
original claim invokes DJRX-it is asserted by a citizen of Maryland against a citizen of
Delaware, and it exceeds $75K. Z's claim against A is a compulsory counterclaim,
because it arises from the same transaction or occurrence as A's claim. It also invokes
DJRX, because the litigants are of diverse citizenship and the claim exceeds $75K.
o Same facts as the previous hypothetical, except that the compulsory counterclaim by
Z is for $45K. As above, the original claim asserted by A against Z invokes DJRX.
Again, the compulsory counterclaim arises under state law, and thus cannot invoke
FQJRX. Here, the compulsory counterclaim does not invoke DJRX, because it does
not meet the AIC requirement; it is a claim for $45K and thus does not exceed
$75K.
Nonetheless, fed. court can entertain Z's counterclaim under SUPJRX.
Why? Section 1367(a) grants SUPJRX over claims that are part of the same
''case or controversy" as the claim that invoked FSMJRX (the claim asserted by A
against Z). As interpreted, that requirement is met if the claims share a common
nucleus of operative fact. Seen earlier, this test is always met by claims that
arise from the same transaction or occurrence as the claim that got the case into
fed. court initially.
Thus, the compulsory counterclaim always meets this test. By definition, it arises
from the same transaction or occurrence as the underlying case by A against Z.
Section 1367(b) applies in cases that invoke DJRX (such as the claim asserted by
A against Z), but removes SUPJRX only over claims asserted by Ps. This is a claim
asserted by a D, so 1367(b) does not remove the SUPJRX.

The Permissive Counterclaim


A. Procedural and Policy IssuesFederal Rule 13(b)
Any counterclaim, as we know, is asserted against an "opposing party."
The permissive counterclaim is one that is not compulsoryIOW, it does not arise from
the same "transaction or occurrence" as the opposing party's claim.
In the usual context, then, it is a claim asserted by Dagainst the P, and is transactionally
unrelated to P's claim against the D.
The Rule 13(b) claim is called permissive precisely because Dis not required to assert it in the
pending case.
How do we know? The Rule provides that the claim "may" be asserted (not "must" be
asserted) in the pending case.

Thus, Dmay file it in that case if she desires, but she may just as readily sue on the claim in
a separate case.
Rule 13(b) allows D to join in the pending case any and all claims she may have against the P,
regardless of the fact that they are unrelated to the Ps claim against her.
This provision mirrors the P's unlimited right to join claims under Rule 18(a).
The same policy applies here as there: Allow the parties to put their entire dispute(s) before
the court in one case.
We noted in discussing Rule 18(a) that this unlimited joinder might result in a confusing mix
of claims in a single case. The permissive counterclaim rule can multiply the confusion. The
solution, as it was with Rule 18(a), is to equip the court with the discretionary authority to
order separate trials of the various claims.
We noted that Rule 18(a)which allows the assertion in a single case of any and all claims,
regardless of transactional or legal relatednessapplies not only to Ps, but to any claimant,
including one who asserts a counterclaim, but Rule 18(a) is meaningless in the counterclaim
situation:
If D has claims against P that do arise from the same transaction or occurrence as the P's
claim, she will assert them under Rule 13(a)(1); if she also has unrelated claims, she can
assert them under Rule 13(b).
Rule 18(a) gives such a D nothing that Rule 13(b) does not already give her.
B. SMJRX
Of course, Rule 13(b) simply provides a procedural mechanism for asserting a claimthe claim
must invoke FSMJRX, however, or else it cannot be asserted in fed. court.
o Hypo: A, a citizen of Wyoming, sues Z, a citizen of Colorado, in fed. court, asserting a
state law claim for $200K; the ease clearly invokes diver sity of citizenship JRX. Z has a
permissive counterclaim against A, arising under state law, for $400.000. ls there subject
matter jurisdic tion? Yes, Because the counterclain1 arises under state law, it does not
invoke FQJRX. But Z's claim invokes DJRX. It is by a citizen of Colorado against a citizen of
Wyoming and exceeds $75K.
Regarding hypo above, what happens when a permissive counterclaim does not invoke FQJRX or
DJRX? Suppose, for instance, that the permissive counterclaim in this hypothetical were for
$50K, so it could not invoke DJRX. We would then inquire whether it could invoke SUPJRX. And
here we may well encounter a problem.
Why? The fact that a permissive counterclaim does not arise from the same transaction or
occurrence as the underlying dispute means that it generally will not invoke SUPJRX.
Under1367(a), SUPJRX attaches only to those claims that are part of the same "case or
controversy" as an underlying claim that did invoke federal SMJRX.
As interpreted, that requirement means that the claim must share a "common nucleus of
operative fact" with the underlying claim.
This mechanical approach is wrong. The test for SUPJRX under 1367(a) is broader than
"transaction or occurrence,". Accordingly, it is possible that a permissive counterclaim can
satisfy 1367(a).
Hypo: P borrowed money from D to finance the purchase of an automobile. P asserted
that D engaged in racial discrimination in making the loan, thereby violating federal
law. P sued for violation of the federal law, invoking FQJRX. D asserted a counterclaim
for the unpaid balance on the car loan. The Second Circuit concluded that the
counterclaim was permissive, and not compulsory, because it did not arise from the
same transaction or occurrence as P's claim of racial discrimination. Nonetheless, the
court concluded, 1367(a) requires only that there be a "loose factual connection"
between the supplemental claim and the underlying suit. Though the permissive
counterclaim did not arise from the same transaction or occurrence as P's claim, it did
share sufficient factual overlap to invoke SUPJRX under 1367(a)
* 1367(b) did not take away SUPJRX. Because Ps claim invoked FQJRX. 1367(b) did not
apply at all. Remember that 1367(b) does not apply in cases that got into fed. court
initially through FQJRX. Even if the underlying claim by P invoked only DJRX. On these
facts 1367(b) would not remove SUPJRX. Why? Although that subsection applies in
diversity cases, it removes SUPJRX only over claims by Ps. Because the counterclaim
was not asserted by P, 1367(b) did not remove SUPJRX.
Obviously, manyprobably mostpermissive counterclaims will be so factually unrelated from
the underlying claim that they will not invoke SUPJRX. But Jones and similar cases teach two
important lessons-(1) that 1367(a) is broader than "transaction or occurrence and (2) that
SUPJRX should be assessed on the facts of each case.

2) CrossclaimsRule 13(g)
A. Procedural and Policy Issues
The crossclaim is created and governed in federal practice by Federal Rule 13(g).
Two important requirements.
1. The crossclaim is a claim against a "coparty."the existence of coparties depends upon Ps
original structuring of the suit using Rule 20(a).
P, when instituting suit, may determine that there should be multiple Ps or multiple Ds
If there are multiple parties on either side of the case, they are coparties with each
other.
Thus, suppose two Ps, P-1 and P-2, are joined in a case against three Ds, D-1, D-2, and
D-3. The two Ps are coparties. The three Ds are coparties. Although a P may assert a
crossclaim against a coP (assuming the other requirement of Rule 13(g) is satisfied and
that there is SMJRX over the claim l) more typically, crossclaims are asserted on the D
side.

2.

To be a crossclaim, the claim against the coparty must arise from the same "transaction
or occurrence" as the "original action or of a counterclaim therein."
Thus, to be a crossclaim, the claim must be transactionally related to the underlying
dispute between P and D.
The "transaction or occurrence" test serves the same function as in the compulsory
counterclaimto facilitate the joinder of all transactionally related claims in a single
proceeding.
Such joinder is also consistent with the modern view on claim preclusion, and with the
general transactional packaging facilitated by SUPJRX.
Rule 13(g) is permissivebecause it says that the claim "may" be asserted, the party is not
required to file the crossclaim in the pending case.
She may if she wishes to, or she may choose to assert it in a separate case.
IOW, there is no such thing as a compulsory crossclaim.
Why should there be an option to assert transactionally related claims against a coparty but a
command to assert such claims against an opposing party?
There has been no move to change the federal rule probably because few litigants fail to
assert crossclaims, so the permissive nature of the Rule does not create much duplicative
litigation.
OTOH, surely some parties burden the judicial system by filing separate cases after
eschewing the right to assert a crossclaim. And the burden created might not be remedied
by issue preclusionremember that issue preclusion (like claim preclusion) flows from
entry of a valid final judgment on the merits.
Suppose a D in Case 1refuses to file a crossclaim, but files Case 2 instead. Case 1might
not go to final judgment for years. Thus, issue preclusion cannot streamline the
litigation in Case 2 in the meantime, meaning that both cases may proceed in litigation.
We end up with two cases where one would do.
The last sentence of Rule 13(g) provides that a crossclaim may include an assertion that the
coparty is or may be liable for all or part of the claim against the party asserting the
crossclaim.
This sentence means that a crossclaim can include a claim against a coparty that the
coparty is liable for indemnity or contribution on the P's claim. This sentence does no
harm, but is surplusage; a claim for indemnity or contribution would seem to satisfy the
"transaction or occurrence" test of Rule 13(g) anyway.
Remember that Rule l8(a), allows a litigant who asserts a crossclaim (among others) to assert
any claim she may also have against that coparty; regardless of transactional or legal
relatedness. Such claims, like any others in fed. court, must be sup ported by federal SMJRX.

The following hypothetical is useful for reviewing crossclaims and compulsory counterclaims:
o

P, driving her own car, is involved with a collision with D-1, who is driv ing a car owned by D-2. Under
applicable law, D-2 (as owner of the sec ond car) is vicariously liable for the acts of the person to
whom she lent the car W- 11."' P brings a single case against both D-1 and D-2. (So D-1 and D-2 are
coparties; why is this proper? (Because Rule 20(a) permits joinder of coDs if the claim against them
arises from the same transaction or occurrence and raises as least one common question.) Assume
that you represent D-2. You don't know who was at fault in the crash. It could have been P or it could
have been D-1. What claims must/may you file in the pending case?
First, you will have D-2 answer and file a compulsory counterclaim against P. The latter is a
claim (for damage to D-2's car) against an opposing party and it arises from the same
transaction or occurrence as P's claim against D-2. Indeed D-2 must assert this claim in the
pending case or else she is estopped from asserting it.
Second, you may file a crossclaim against D-1. This is a claim against a coparty and it arises
from the same transaction or occurrence as the underlying case. Note that there will be two
aspects to the cross claim. First, you will claim that D-1 owes D-2 indemnity on P's claim. Thus, if
P wins against D-2, this indemnity claim will shift that liability from D-2 to D-1. That protects D-2
from liability on P's claim. But, if the wreck was D- J's fault, D-2 will want to recover from D-1 for
damage to her car. So the second aspect of the crossclaim is to recover for the property
damage. Both are part of the crossclaim, because both arise from the same transaction or
occurrence as the underlying suit.
In sum, by filing these claims, D-2 has protected herself either way-whether the wreck was P's
fault or D- l's fault. If it was P's fault, D-2 will recover on the compulsory counterclaim. If it was
D-l's fault, D-2 has done two things: (1) ensured that D-1 (not D-2 ) is ultimately liable to pay for
the judgment to P ( through indemnity) and (2) asserted a claim against D 1 to recover for the
damage to D-2's car. Again, both of these functions are performed by the cross claim.
By the way, if D-2 asserted a crossclaim against D-1 only for indem nity on the claim asserted
by PIand not for property damage to D-2's car), what problem might D-2 run into down the
road? Claim pre clusion! If D-2 did this, and the JRX adopted a transactional definition of claim,
D-2 would he splitting her claim. (If this point is fuzzy, review *11.2.)
Now let's take another step. Suppose D-2 files both the compulsory coun terclaim against P and
the crossclaim for indemnity and for property damage against D-1. In addition, suppose D-2 has
a totally unrelated claim against D-1 (say, for past-due rent I. Can she assert that claim in the
pending case too? Yes. Rule 181al provides that, once D-2 asserted the crossclaim, she may join
to it any claim she has against that party.81
Again, suppose D-2 files both the compulsory counterclaim against P and the crossclaim for
indemnity and for property damage against D-1. Suppose also that D-1 has a claim against D-2
arising from the same accident (say, that D-2's car had defective brakes, which caused the
wreck). Can D-1 assert that claim in the pending case? Yes. In fact, arguably she must or else
lose the claim. Why'' Once D-2 asserts a cross claim against D-1, the two have become

''opposing parties." Thus, the claim back against D-2 is a counterclaim. Because it arises from
the same transaction or occurrence as D-2's clai m against D-1, it is a com pulsory counterclaim
B.

V.

SMJRX
Rule 13(g) is a procedural mechanism for asserting a claim, but the claim must invoke FSMJRX
to be asserted in fed. court.
o Hypo: A, B, and C, each driving her own car, collide, and each is injured. Each suffered
damages in excess of $75K. A is a citizen of New York B and C are both citizens of New
Jersey. A sues B and C, as coDs, in fed. court. There is no basis for fed'ral question
JRX, but A's case does invoke DJRX. (Why?82) B asserts a compulsory counterclaim
against A to recover for her injuries from the wreck. (Why is it a compulsory
counterclaim'/"') B also asserts a crossclaim against C for those injuries. It i.s a
crossclaim because it is against a coparty and arises from the same transaction or
occurrence as the underlying suit. Now, is there SMJRX over the counterclaim and the
crossclaim? Assume that there is no basis for FQJRX.
B's compulsory counterclaim againstA invokes diversity ofcitizenship JRX. It is by a
citizen of New Jersey against a citizen of New York and the facts indicate that it
exceeds $75K. (Because it invokes diversity JRX, SUPJRX is irrelevant.)
But the crossclaim does not invoke DJRX jurisdic tion. Even though it would satisfy
the AIC for diversity ( because it exceeds $75K), there is no diversity between B
and C. The crossclaim is by a citizen of New Jersey against a citizen of New Jersey.
So the only way the crossclaim can get into fed. court is through SUPJRX. Does that
work here?
1367(a) grants SUPJRX over claims that arepart of the same "case or controversy"
as the underlying claim that did invoke SMJRX (P's original claim), Claims meet that
test if they satisfy the Gibbs standard of sharing a "com mon nucleus of operative
fact" with the underlying claim. This stan dard is always met if the claim arises from
the same transaction or occurrence as the underlying claim (1367(a) requires only
that the supplemental claim have some "loose factual connection" with the JRX
invoking claim.). By definition, a crossclaim does, because Rule 13ig) requires that
they arise from the same transac tion or occurrence as the underlying dispute.
1367( b) applies in cases that invoked DJRX ( as the claim asserted by A against B
and C did). It then operates to remove SUPJRX over certain claims; but that
section only removes SUPJRX over claims asserted by plainti ffs. The claim in this
case is asserted by a defen dant, so *1367(b) does not remove the grant of
supplemental jurisdic tion.
o One last hypothetical in this area, and this one may surprise you. Let's use the same
facts as in the previous hypothetical, with the three-way car crash between A, B, and
C. All claims are based upon state law, and all claims exceed $75K. But here, B and C,
as coPs, sue A. A is a citizen of New York. B and C are citizens of New Jersey. As
structured -with the two New Jersey Ps against the one New York D and with the claims
exceeding $75K-this case invokes DJRX. Obviously, A will have a compulsory
counterclaim against the two Ps. But here's the focus: Suppose B asserts a crossclaim
for her injuries against C. It is a crossclaim because it's against a coparty (a coP here),
and it arises from the same transaction or occurrence as the underlying diversity of
citizen ship claim. Is there SMJRX over this crossclaim?
The crossclaim arises under state law, so it cannot invoke FQJRX. It also cannot
invoke DJRX, because the crossclaim is asserted by a New Jersey citi zen against a
New Jersey citizen. Now, can the claim invoke supple mental JRX? The answer should
certainly be yes. But apply the SUPJRX statute. Clearly, 1367(a) grants sup
plemental JRX, for the same reason as in the previous hypo thetical. But look
carefully at 1367(b). It applies in cases that invoke DJRX Ias the claims by B and C
against A did). And it removes JRX over claims ..by Ps against persons made parties
under Rule . . 20." The claim by B against C is a claim asserted by a P against
someone joined under Rule20 (the only way B and C could havt' sued together as
coPs was to have joined as coparties under Rule 20(a)(1)). Thus, under a literal
interpretation of the statute, there cannot be SUPJRX over this claim.
This result is absurd. It means that all other claims (by B and C against A; by A against
B and Cl will be heard in fed. court but this crossclaim by B against C must be asserted
in state court. Thus, the parties and the judicial system are robbed of the efficiency
promoted by the joinder rules and SUPJRX. The result of a literal interpretation of the
statute in this context is also contrary to the underlying premise of DJRX. After all, in
our hypothetical here, each P remains diverse from each D, so there is no danger that
permitting supplemental juris diction over P-l's crossclaim will eviscerate the complete
diversity rule. There is no clear case authority on this issue, but in view of the literal
interpretations accorded 1367 in other contexts, the unfortu nate result suggested
above may be difficult to avoid.

Overriding Ps Joinder Choices


Rule 20(a) is permissive, so P does not have to employ it to the fullest.
For a variety of reasons, including JRXal limitations and litigation strategy, a P may eschew full use of
the provision and leave out persons who might have been joined under Rule 20(a)we refer to such
nonparties as "absentees."
The question for us is whether anyone can override the P's structuring of the case by
forcing the joinder of absentees.
The answer is yes, at least in certain circumstances, 3 joinder devicescompulsory party
joinder, under Rule 19 impleader under Rule 14, and intervention under Rule 24can be
used to restructure the party joinder of the case.

Throughout our discussion of these devices, it is important to appreciate the effort to accommodate
competing policies.
OT1H, our justice system accords great deference to the P's choices on party structuring; we value
litigant autonomy.
OTOH, the P's party joinder choices may lead to inefficiency and inconsistent outcomes by
promoting multiple litigation; it may also subject the interest of the absentee or of D to possible
harm.
Federal Rules: Three policy interests that will justify overriding the P's autonomy in party
structuring: (1) efficiency, (2) avoiding harm to the absentee, and (3) avoiding harm to the D.
As we will see, compulsory party joinder, under Rule 19 embraces all three of these
policies. Impleader is based mostly on the first and third policies, and intervention
embodies the first two policies.
As we also will see, these devices might be invoked by different persons:
Rule 19 is usually raised by a D, although the judge has the power to raise it on her own.
Impleader is invoked by a defending party.
Intervention is invoked by the absentee herself.
Thus, these three devices empower different persons to assert that one of three policies
justifies overriding the P's autonomy in structuring the suit.

A. Compulsory Party Joinder (Rule 19)


1) "Proper", "Required" (or "Necessary"), and "Indispensable" Absentees
The issue here is whether an absentee (someone P did not join in the pending case) should be
forced into the suit.
Federal Rule 19 is the most comprehensive provision providing for overriding the Ps joinder
choices.
Parties and potential parties to a civil case fall into one of three traditional categories, which can
be viewed as concentric circles.
1. The outer (largest) circle reflects "proper" parties to the case. These are persons who may be
joined, at the option of the P, because they have sufficient connection to the dispute. Today,
such persons are defined in Rule 20(a).
2. Inside that circle, as a subset of proper parties, are "required" (or "necessary") parties. These
are persons whom P did not join in the case, but whose presence is so desirable that the court
will override the P's choice by requiring them to be joined if joinder is possible. Such persons
are defined in Rule 19(a).
3. Inside this circle, as a subset both of necessary and of proper parties, are what have for
generations been called "indispensable" parties. These are persons whom P did not join, and
who (because "necessary") should be joined, but who cannot be joined (e.g., because the court
cannot get PJRX over them). And in their absence, the court has decided that it will dismiss the
pending case rather than proceed without such absentees.
We turn now to the Rule, and emphasize at the outset that the Rule 19 inquiry is always casespecificavoid the temptation to reach an answer by knee-jerk reaction; apply Rule 19 in a
pragmatic waysensitive to the underlying policies of why the court might override the Ps
party structure.
2) Applying Rule 19
Rule 19, somewhat tough to decipher, prescribes a three-step process, "although this fact is
obscured by its language."
1) First, the court must assess whether the absentee is a "required party" under Rule 19(a).
Lawyers and judges have always called such an absentee "necessary." As restyled in 2007,
Rule 19 avoids that word, but lawyers and judges commonly use "necessary.
2) Second, if the absentee is required, the court then asks whether she can be joined in the
pending case. In the language of Rule 19(b), the court assesses whether joinder is "feasible."
This requires the court to determine whether (1) the absentee is subject to PJRX; (2)
whether the absentee can be joined without affecting DJRX JRX; and (3) whether the absentee,
once joined, would have a valid objection to venue (thus Rule 19 is one of the few joinder
provisions in which venue may be an issue. If joinder is feasible in light of these three
inquiries, the absentee is ordPTed joined to the case.97
3) If joinder of the absentee is not feasible, the court must determine whether, in "equity and
good conscience," the court should (1) allow the case to proceed without the absentee or, on
the other hand, (2) dismiss the case. This assessment is made based upon factors in Rule
19(b). If the court decides to dismiss the pending case rather than to proceed without the
absentee, the absentee has always been labeled "indispensable."
Recall that Rule 12(b)(7) permits a court to dismiss a case for failure to join a party under Rule
19.
That motion will be granted only if the court goes through all of these steps and
concludes that the case should be dismissed. Now we look in detail at each of the steps
involved in the application of Rule 19.

Inquiry Number One: Is the Absentee Required (or Necessary)?


The absentee will be required if the present party structure of the case satisfies any of the
three situations prescribed in Rule 19(a).
It is important to understand the policies underlying them; each gives a reason for overriding
the P's structuring of the case.
Of the three bases for forcing joinder of the absentee, one is found in Rule 19(a)(l)(A),
and the other two are found in Rule 19(a)(1)(B).
The difference between the two subdivisions of the Rule is significant, as a careful reading of
the Rule will demonstrate.
Rule 19(a)(1)(B) requires:

1. That the absentee claim "an interest relating to the subject of the suit."
o To qualify, the interest must be "legally protected, and not merely a financial
interest or interest of convenience."the absentee "must have a direct stake in the
pending litigation; an interest in related subject matter is not sufficient to be
defined as a necessary party."(See examples below).
2. Beyond this interest, Rule 19(a)(1)(B) requires that the failure to join the absentee (in
view of the absentee's interest) will harm someoneeither the absentee (in Rule 19(a)
(l)(B)(i)) or D (in Rule 19(a)(l)(B) (ii)).
o Thus, Rule 19(a)(1)(BJ can be called the prejudice prong of the compulsory
joinder rule, because joinder is effected expressly to avoid prejudice to the
absentee or to the D.
Rule 19(a)(1) (A), in contrast, does not require that the absentee have any interest in
the pending case.
o It mandates joinder not to avoid harm to anyone, but to achieve efficiency. It can be
called the complete relief prong of the compulsory joinder rule.
In theory, if the absentee satisfies any of the three situations defined by Rule 19(a)(1)(A)
and 19(a)(1)(B), the court should order her joinder if joinder is feasible. Now we address
these three definitions of a necessary absentee in more detail.
o

Rule 19(a)(1)(A): Necessary Absentee


Under Rule 19(a)(l)(A), the absentee should be joined if, without her, "the court cannot
accord complete relief among existing parties."
This clause reflects the traditional aim of equity to decide disputes by the whole, rather
than bit by bit.
Joinder under this provision is said to ensure that a court will not enter a "hollow" or
"partial" judgment, one that fails effectively to resolve the overall disputejoining the
absentee obviates the need for other suits and binds the absentee to the judgment in the
pending case; this, in turn, avoids the inconsistent results that could arise from multiple
litigation.
Though these goals are laudable, Rule 19(a)(l)(A), as a practical matter, is pretty
worthless.
Why? It is capable of being interpreted in two ways, one of which is always satisfied and
the other of which is never satisfied. (A rule that is either always or never met is not much
of a rule.)
1 : The Rule may mean that the absentee must be joined whenever leaving the
absentee out will fail to resolve the overall disputewill fail to "do justice" in some
grand sense among all potentially affected persons.
The problem is that this interpretation is satisfied every time there is an absentee
who will sue (or will be sued) after resolution of the pending case.
The interpretation amounts to holding that the absentee must be joined to avoid
multiple litigation. The archetypal case is said to involve a case by P against an
"excess insurer," which is an insurance company that agrees to cover losses over a
particular amount.
Hypo: P's warehouse burns down. P had insurance on the warehouse and its
contents with two companies: Primary Ins. Co. (Primary) contracted to cover losses
through $200K, and Excess Insurance Co. (Excess) insured losses over $200K. P sues
only Excess, asserting that the damage from loss of the warehouse was $350K (and
thus that Excess owes P $150k Some courts and commentators argue that
Primary is required under Rule 19(a)( l)(A), because if the court in this case (by P
against Excess) finds that the damage to P was only $195K, its judgment will be
"hollow." Why? Two reasons: (1) it could not be enforced against Excess (because
Excess is not liable for amounts of $200K and less), and (2) it could not be asserted
against Primary (because Primary was not a party to the case and thus, under due
process, cannot be bound by the judgment.
While there is no doubt that such a judgment would be hollow in the ways
described, that does not mean that Rule 19(a)(1)(A) should apply to compel
joinder of Primary.
Such an interpretation of the Rule is contrary to its languagethe Rule does not
require joinder whenever failure to join the absentee will result in the court's not
resolving all disputes among everybody in the worldinstead, it says that joinder
is required only when nonjoinder of the absentee means that the court cannot
accord complete relief "among existing parties."
The judgment in the above hypothetical does resolve the entire dispute between
those who are already parties, because it tells Excess that it owes P nothing.
More basically, such a broad reading of Rule 19(a)(l)(A) would swamp all other
joinder devices.
Remember that Rule 19(a)(l)(A), unlike Rule 19(a J(l)(B), does not require that
the absentee have an interest in the pending caseso if this provision is
interpreted to require the joinder of any absentee whose nonjoinder threatens
to create multiple litigation down the road, there is no need for impleader or
for intervention.
2 : Focusing on the specific language of Rule 19(a)(1)(A) thus leads to the second
possible interpretation: Rule 19(a)(1)(A) is invoked only when nonjoinder of the
absentee means that the court in the pending case cannot wrap things up
completely among those who are presently parties
As we just saw, it is hard to conceive of a case in which this test will be met. Either
Dwill owe something to Por she won't. No matter what the judgment, it will wrap up
o

the dispute among existing parties once and for all. So read, then, the Rule never
applies.
Because of the problems with determining the proper scope of Rule 19(a)(l)(A),
courts seem never to rely on the rule exclusively to order the joinder of an absentee.
Instead, to the extent that courts pay attention to the subdivision at all, they use it
in conjunction with one of the bases for joinder laid out in Rule 19(a)(1)(B).
Thus, Rule 19(a)(l)(A) has had little impact on compulsory joinder doctrine.
Does that mean that its policy of efficient joinder is meaningless? No. The
policy is important, but is limited in impact to cases satisfying one of the
prejudice bases for joinder under Rule 19(a)(1)(B).
Every time joinder is affected under Rule 19(a)(1)(B), it fosters the efficiency and
consistency we desire.
It does so, however, in a way that does not simply run roughshod over P
autonomy and render meaningless the other joinder provisions of the Federal
Rules.

Rule 19(a)(1)(B): Necessary Absentee


As we saw above, both bases for compelling joinder of the absentee under Rule 19(a)(1)(B)
19(a)(l)(B)(i) and 19(a)(l)(B)(ii)require that the absentee have some interest in the
underlying dispute and that somebody (either the absentee or the D) stand to be harmed if
the litigation proceeds without the absentee.
Rule 19(a)(1)(B)(i): focuses on the potential harm to the absentee's interest if she is not
joined in the pending case.
Specifically, the court assesses whether the absentee is so situated that litigating
without her "may as a practical matter impair or impede [her] ability to protect the
interest."
Policy basis for joinder here is clear: We should not allow P's leaving the absentee
out of the case to harm the absentee.
Notice that this provision focuses on practical harm to the absentee's ability to protect
her interest.
This language reflects the fact that the absentee generally could not suffer "legal"
harm if the case proceeded as originally structuredabsentees (unless in privity with a
party, which is rare) cannot be bound legally by the judgment in a case.
In many circumstances, however, an absentee not bound legally might be adversely
affected in a practical way by the judgment.
For example, that P sues a Trustee, seeking to recover trust funds held by the Trustee.
Absentee (A) claims to be the proper beneficiary of the trust. If P wins the pending
case, A is not bound by the judgment. But, as a practical matter, A's ability to protect
her interest may be impaired, because the money will be in P's pocket, and may be
squandered or removed from the country before A can sue P.
One interesting question is whether the absentee's ability to protect her interest might
be harmed by the stare decisis effect of the judgment in the pending case.
Stare decisis is the doctrine of precedentstands for the proposition that an appellate
decree on a question of law binds all lower courts w/in that JRX. As commonly
understood, stare decisis cannot emanate from a trial court determination of issues of
fact. Occasionally, but rarely, stare decisis can constitute a relevant harm under Rule
19(a)(1)(B)(i).
A good example of the proper use of stare decisis as relevant harm involved disputed
ownership of reefs near FL. Two private parties claimed ownership. If the reefs were
part of the outer continental shelf, however, they would be owned by the US. The case
was brought by the US against one of the private claimants to the reefs. The other
private claimant to the reefs was the absentee. The court recognized that the issue
was important enough to the parties to ensure that it would be appealed to the court of
appeals for a determination of the legal question of government ownership. That ruling
would result in precedent that would be very difficult for the absentee to undo in
subsequent litigation. In such circumstances, the court properly concluded, the
precedential effect of the case could constitute a harm justifying joinder of the
absentee.
Rule 19(a)(1)(B)(ii): The absentee has an interest in the pending case, but here the
absentee must be joined to prevent potential harm to an existing party in that case.
1. Specifically, as in Rule 19(a)(l)(B)(i), the absentee must have "an interest relating to the
subject of the action" and must be so situated that not joining her might subject a party
"to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations."
2. Policy basis for forcing joinder here is also clear: Itis not to avoid harm to the
absentee, but to a present party. The litigation is structured in such a way that going
forward without the absentee involved puts a party at risk of being hit with double or
inconsistent obligations.
We must note two points here:
Although the Rule focuses on harm to anyone who is already a party in the pending
case, in fact it is concerned about harm to a defending party; in most cases, of course,
this means the D.
If P has so structured the case as to subject herself to harm, it is not clear why the
judicial system should try to help her, but if she has so structured the case as to
cause harm to a party haled into court in a defensive position, the system should try
to ameliorate the situation.
Note that the Rule is aimed at a specific kind of harm to the D: the risk of being put to
"double, multiple, or otherwise inconsistent obligations" because of the absentee's
interest.

The Rule does not say the joinder is required to avoid subjecting D to multiple
litigationthus, if the party structure merely threatens D w/potential multiple suits,
that is not enough. This fact is another factor that counsels a narrow reading of Rule
19(a)(1)(A), as we saw above.
1. Hypo: Busline provides bus transportation. One of its buses is involved in a wreck,
injuring six passengers. Passenger #1 sues Busline for personal injury damages.
Are Passengers #2 through #6 necessary under Rule 19(a)(1)(BJ(ii)? No. Although
the litigation as structured certainly threatens Busline with multiple litigation, it
does not subject Busline to potential multiple or inconsistent obligations.
As envisioned by Rule 19(a)(1)(B)(i), inconsistent obligations are created when two (or
more) orders put D in a position in which she cannot satisfy one order without violating
the othersuch problems usually arise in claims for equitable relief (like an injunction or
declaratory judgment) and not in claims for damages.
For example, the Rule would be invoked if one judgment ordered a corporation to issue
stock in one person's name while another judgment ordered the corporation to issue
stock in a different person's name. There, the corporation cannot honor one judgment
without violating the other. This problem is not faced with monetary damages. If
Passenger #1 wins, the court will order Busline to pay money to her. Then, if Passenger
#2 loses, the court will order that Busline does not have to pay money to her. ln this
case, perhaps Passenger #2 could have won if she could have used nonmutual offensive
issue preclusion against Busline, on the issue of Busline's negligence (assuming that
issue was litigated and determined in the first case). But many JRXs do not recognize
nonmutual offensive issue preclusion.) These are not inconsistent obligations. There is
nothing incon sistent in Busline's having to write a check to one passenger and not to
another.

Applying Rule 19(a). Let's try some hypotheticals, based upon cases that may be in your
casebook.
o Hypo: P has surgery in which a metal "plate and screw device" is implanted in her spine.
The device was manufactured by Corporation. The sur gery was performed by Doctor at
Hospital. The device broke in P's spine, causing serious personal injuries. P sues only
Corporation, and does not join Doctor or Hospital. (Quick review question: Could P have
joined Doctor and Hospital with Corporation as three coDs? (Yes. This question is covered
by Rule 20(a). Joinder of coDs is proper when the claims against them arise from the
same transaction or occurrence and raise at least one common question of law or
fact. Here, the claims against all three arise from implanting the device in P's spine,
and all present the common question of who, if anyone, was negligent.) Are Doctor or
Hospital necessary under Rule 19(a)?
These are the facts of Temple u. Synthes Corp. in which a unanimous Supreme Court
answered emphatically: No. According to the Court, joint tortfeasors are not
necessary parties. Period. The Court simply says, "It has long been the rule that it
is not necessary for all joint tortfeasors to be named as Ds in a single lawsuit.
Nothin in the 1966 revision to Rule 19 changed that principle."
Thus, if a party wants to force the joinder of additional joint tortfeasors, she must find
some joinder device other than Rule 19 (we see below that the appropriate action is for
D to implead the absentees.)
o Hypo: D operates a shopping mall. It leases a space to P, who will operate a jewelry store.
[) now plans to lease another store in the same mall to A, who wi II also operate a jewelry
store. P claims that this deal with A violates a clause in her lease that says that D would
not allow another jewelry store to operate in the mall. P sues D, seeking an injunction to
stop D from signing the lease with A. Is A necessary?
Rather than reacting to the question intuitively, apply Rule 19(a)
pragmaticallybecause Rule 19(a)(1)(A) has had little independent impact, let's start
with Rule 19(a)(1)(B). (Remember that anytime the court orders joinder of an absentee
under Rule 19(a)(l)(B), the efficiency and consistency goals of Rule 19(a)(1)(A) are
realized.)
1) : A does have an interest in the pending suit, because A has negotiated a lease in the
same mall. (Remember, under both parts of Rule 19(a)(1)(B), the absentee must have
such an interest.)
2) : The present joinder scheme threatens to harm A's interest, because if P wins the
pending suit, the court will issue an injunction stopping D from leasing the store to A.
Thus, A satisfies Rule 19(a)(1)(B)(i) because failure to join A may as a practical matter
impair or impede A's ability to protect her interest (the judgment in the case by P
against D will not bind A as a legal matter. She is not a party, nor in privity with a party
to that case, and thus, as a matter of due process, cannot be bound. Rather, the harm
to A's interest is practical- D won't sign the lease to her).
3) : This case also satisfies Rule 19(a)(1)(B)(ii) because the present party structure
threatens D with inconsistent obligations. If P wins the present case, the court will
order D not to sign the lease with A. Then A will sue D in a separate case, seeking an
injunction to force D to sign the lease. If A wins that case, D is put in an untenable
situation: One decree tells it not to sign the lease with A, and another tells it to sign the
lease with A. Rule 19(a)(l)(B)(ii) is aimed at avoiding exactly that sort of inconsistent
obligation by forcing the joinder of A in the present case.
o Hypo: A owns 1K shares of stock in Corporation, in her own name. P claims that she andA
had bought the stock together and that the stock was sup posed to have issued in both
names as joint owners. P sues Corporation, seeking to have A's stock canceled and the
shares reissued in the joint names of P and A. Is A necessary?

1) A obviously has an interest in the pending suit, since the fight is about stock she
presently owns outright.
2) The present joinder scheme threatens harm to A's interest, because if P wins, A's stock
is canceled and reissued to her and P jointly. A goes from being sole owner of the stock
to joint owner of the stock. Although A would not be bound legally by the judgment
(because she was not a party to the case), as a practical matter, her interest would be
worth demonstrably less than it is now.
3) The present party structure also satisfies Rule 19(a)(l)(B)(ii) because it threatens
Corporation with inconsistent obligations. If P wins this case, the court will order
Corporation to cancel A's stock and reissue the shares in the joint names of P and A.
Then A will sue Corporation. If A wins that case, the court will order Corporation to
issue the same shares in the name of A only. Corporation cannot satisfy one decree
without violating the other.
o Hypo:P represents the estate of a decedent who was killed in the crash of a chartered
airplane. P sues the manufacturer of the airplane. Are any of these absentees necessary:
the company that owned and operated the plane, the company that serviced the plane,
the estate of the pilot?
The quick answer to this case is no, based upon the Supreme Court decision in Temple
v. Synthes Corp., which we saw above. That case held that joint tortfeasors are not
necessary parties. The case on which this hypothetical is based -Whyham v. Piper
Aircraft Corp.121 -was decided before Temple, and is a good example of sloppy Rule 19
analysis.
The court in Whyham held that all three bases of Rule 19(a) were satisfied.
It concluded that Rule 19(a)(1)(A) was met because the failure to join the absentees
would result in multiple litigation. We discussed above why this conclusion is an
erroneous interpretation of the Rule.
It concluded that Rule 19(a)(1)(B)(i) was met because the absentees somehow
would be harmed by the judgment in the pending case. It is impossible to see how
that can be the case, however. If the court orders the manufacturer to write a check
to P, how does that harm the absentees? True, the manufacturer may now sue the
absentees for contribution or indemnification, but the judgment in this case does
nothing to the absentees.
The court concluded that Rule 19(a)(1)(B)(ii) was met because the manufacturer
would be subjected to multiple or inconsistent obligations. The argument is this: If
the manufacturer loses this case and then sues the absentees for contribution or
indemnity and loses, the manufacturer will have to pay the entire loss. Here, finally,
the court is on solid ground. Such a scenario does seem to subject D to multiple
obligations as envisioned by Rule 19(a)(l)(B)(ii). In most cases, however, the D will
be able to protect itself by impleading the absentee under Rule 14(a)(1)(In
Whyham, D manufacturer could not use impleader, because the persons it would
implead were not subject to PJRX. Thus, Rule 19 was the only vehicle for raising the
potential harm to D in that case.) To this point, we have determined that the
absentees are necessary.
Inquiry Number Two: Is Joinder of the Absentee Feasible?
Assuming the absentee is required, the next focus is whether the absentee can feasibly be
joined to the pending case. If the answer is yes, the court will force joinder of the absentee
under Rule 19(a)(2).
Three factors are relevant to the feasibility inquiry.
First, for joinder to be feasible, the absentee must be "subject to service of process," which
means she must be subject to PJRX in the pending case. Fed. court in which the case is
pending may use any long-arm statute available to state courts in the state in which it sits.
In addition, the "bulge rule" allows for service outside the forum state, regardless of state
law, within 100 miles of fed. court house. In addition, the absentee may waive any PJRX
objection by agreeing to be joined in the pending case.
Second, Rule 19(a)(3) also provides that if the absentee "objects to venue and the joinder
[of the absentee] would make venue improper," the court must dismiss the absentee from
the case. Such an absentee is treated as one whose joinder is not feasible Again, however,
the absentee may simply waive a venue objection and be joined if she prefers.
Third, and most important, Rule 19(a) provides that joinder will be feasible if "joinder [of
the absentee] will not deprive the court of SMJRX." As we have seen repeatedly, every claim
asserted in fed. court must be supported by FSMJRX. The FSMJRX limitations are not
waivable and the parties cannot avoid them by stipulation. The Federal Rules cannot
affect the JRX of the federal courts."' It is also important to remember that subject
matter JRX attaches to claims, not to parties. Thus, the claim asserted by or against the
necessary party must be assessed for subject matter JRX. Obviously, if the claim asserted
by or against the absentee arises under federal law, it will invoke federal question JRX.
Joinder is feasible and the court will order it. Most problems in this area concern state law
claims asserted by or against the absentee, and the effect of joinder on DJRX.
In such cases, a crucial step in assessing SMJRX is the alignment of the necessary partyonce
the court determines that the absentee should be joined, it must then align the absentee in
the pending litigation, which means it must determine whether the absentee should be joined
as a P or as a D.
The parties (and perhaps even the absentee) will brief this issue for the court, but the
decision is made by the court itself.

The court must determine, on the basis of the facts of the individual case, whether the
absentee's interest is more closely aligned with P or the D. The decision can have important
ramifications for SMJRX.
o P, a citizen of Oregon, sues D, a citizen of CO on a state law claim (so there is no FQJRX)
for $200k. The claim invokes DJRX and is properly filed in fed. court. A, the absentee, is a
necessary party and is a citizen of Colorado. If A is joined as a D, against whom P will
then assert a state law claim of more than $75K, joinder is feasible. Why? Because there
is DJRX over the claim asserted by P against A. In other words, joining A does not harm S
JRX. Because joinder is feasible, the court would order that A be joined.
o But suppose instead that the court aligns A as a P to assert a state law claim of more
than $75K against D. Because A and D are cocitizens, the claim asserted by A against D
cannot invoke DJRX. Unless SUPJRX can be used l which we address momentarily),
joinder is not feasible, and the court would then go to Inquiry Number Three (below) to
determine whether to proceed in the litigation without A or dismiss the case.
The problem encountered in this last hypothetical is not limited to cases in which the
absentee is brought in as a Pthe same problem would be encountered if A in our
hypothetical were a citizen of Oregon aligned as a D. I
In that case, the claim asserted by P against A would lack DJRX (because it would be by an
Oregon citizen against an Oregon citizen).
As another example, even if there were DJRX between the absentee and the party on the
opposite side of the litigation, if the state law claim did satisfy the AIC requirement for
diversity cases, the claim could not invoke DJRX and joinder would not be feasible.
Can SUPJRX support the claim asserted by or against a necessary party?
SUPJRX, as we have seen repeatedly, allows fed. courts to entertain claims that by
themselves do not invoke an "independent" basis of federal SMJRXin other words, claims
that do not invoke DJRX, alienage or FQJRX.
If SUPJRX will support claims by or against necessary parties, it will render joinder feasible
because it will allow the claim to be joined in the pending case.
Why? 1367(a) grants SUPJRX over claims that comprise part of the same "case or
controversy" as a claim that invokes an independent basis of federal SMJRX. This means
SUPJRX attaches to claims that share from a "common nucleus of operative fact" with the
claim that invoked federal question or DJRX JRX. There has never been serious doubt that
claims by and against necessary parties satisfy this test." By definition, such an absentee
has an interest in the case and is so closely related to it that either her interest may be
impaired or her nonjoinder threatens the D with multiple or inconsistent obligations. Thus,
1367(a) clearly grants SUPJRX over claims by or against a necessary party.
The problems arise with the application of 1367(b), which cuts back on the grant of SUPJRX.
1367(b) applies only in cases that invoked DJRX and then removes SUPJRX over specific
listed claims.
Those claims fall into three categories, two of which are relevant here. Specifically, there is
no SUPJRX in a diversity case "over claims by Ps against persons made parties under Rule . .
19 . . of the Federal Rules" or "over claims by persons proposed to be joined as Ps under
Rule 19 of such rules."
Thus, SUPJRX is not available in a DJRX case for claims (1) asserted by Pagainst a neces
sary party joined as a D or (2) asserted by the necessary party if she is joined as a P.
o Hypo: Assume that all claims are based upon state law and that they exceed $75K. P, a
citizen of Texas, sues D, a citizen of Missouri. The claim invokes DJRX and is properly filed
in fed. court. A is a necessary party and is a citizen of Missouri. IfA is joined as a plaintifl
her claim against D does not invoke DJRX, because A and D are cocitizens. SUPJRX is not
available (even though the claim asserted by A against D satisfies1367(a)) because this
is a claim asserted by a person proposed to be joined as a P under Rule 19; 1367(b)
prohibits SUPJRX over that claim.
o Hypo: Same facts except here A is a citizen of Texas and will be joined as a D. Here,
there is no DJRX over the claim asserted by P against A, because each is a citizen of
Texas. Does SUPJRX help? Again, the claim by P against A will satisfy 1367(a). But
1367(b) precludes SUPJRX over the claim by P against A because it is a claim asserted by
a P against a person joined under Rule 19; section 1367(b) prohibits SUPJRX over that
claim
So, ultimately the SUPJRX statute may help facilitate joinder of absentees under Rule 19, at
least if they are brought in as additional parties to a counterclaim or crossclaim. It does not
seem to help, however, when the absentee is brought in directly under Rule 19. (And don't
forget that 1367(b) only applies in DJRX cases.)
o

Hypo: P, a citizen of Tennessee, sues D, a citizen of Tennessee, for violating her rights
under a federal statute. The claim invokes federal question juris diction and is properly
filed in fed. court. A, the absentee, is a neces sary party and is also a citizen of
Tennessee. She is joined as a P and asserts a state law claim against D. This claim is not
supported by FQJRX (because it's based on state law) or by diver sity of citizenship JRX
(because A and D are cocitizens). Does it invoke SUPJRX? Yes. First, 1367(a) grants
supple mental JRX because the claim derives from a common nucleus of operative fact
from the underlying case. Second. 1367(b) does not apply, so it cannot remove this
SUPJRX. Remember, 1367(b) applies only in cases that invoke DJRX. The original claim
here invoked FQJRX.

Answer: To this point, then, the court has determined that the absentee is necessary, and has
assessed whether her joinder is feasible.
If joinder is feasible, the court ordinarily gives the P an opportunity to amend her
complaint to add the absentee.

Should P fail to do so, Rule 19(a)(2) provides that the court "must order that [the absentee]
be made a party."the court may order joinder as D or as P.
If she is joined as a D, ordinarily P will then amend her complaint to state a claim against
the absentee; if she is joined as a P, she will file an appropriate pleading setting forth her
claim. (lf a necessary absentee should be aligned as a P but refuses to participate, the court
may order her joinder as a D and then realign her as a P.)
What happens, though, if the court finds that the absentee cannot feasibly be joined? Then,
the court must move to the third step of the analysis. (Below)

Inquiry Number Three: If Joinder Is Not Feasible, Should the Court Proceed Without
the Absentee or Dismiss the Pending Case?
To this point, the court has concluded that the absentee ought to be joined but that her joinder
is not feasible.
Now, the court must either:
(1)
proceed with the present litigation, without joining the absentee, or
(2)
dismiss the present case.
Each choice is troublesome. If the court proceeds, it risks subjecting either the absentee or D
to the kind of harm Rule 19 is intended to avoid. OTOH, if the court dismisses the case, it
denies P the forum she selected. If it chooses this latter course, the absentee has long been
called "indispensable," and the case is dismissed under Rule 12(b)(7).
How does the court decide which way to go?
The choice is governed by Rule 19(b)starts by saying that the court should consider whether
dismissal is appropriate "in equity and good conscience."
Beyond this open-ended phrase, Rule 19(b) lists four nonexclusive factors for guiding the
decision.
The factors are not listed in hierarchical order, and at first, they echo the sorts of
concerns addressed under Rule 19(a) in determining whether the absentee was required
in the first place.
Importantly, however, the thrust of the Rule 19(b) assessment is differentwhile Rule
19(a) asks the court to determine whether the sorts of harm envisioned by that Rule
might occur (Rule 19(a)(1)(B) requires only that one of the relevant harms "may" occur; it
does not require that such harm must or necessarily will occur.)
If the absentee is not joined, here the assessment is whether such harm really will occur
there is a difference in degreesthe decision of whether to proceed or dismiss the case
requires a closer look at the real probability and severity of prejudice caused by
nonjoinder versus prejudice caused by dismissal.
1. 19(b)(1): Reflecting this emphasis on probability rather than possibility, the rule instructs
the court to consider "'the extent to which a judgment rendered in the person's absence
might prejudice that person or the existing parties."
Here, the court may sneak a peek at the merits and determine whether the P's claim is
likely to result in harm of either type.
In addition, the court should consider whether either the absentee or D might be able to
avoid harm by taking some action.
For instance, the absentee might be able to intervene; her refusing to do so may
indicate that the absentee does not consider the potential harm to be great.
Likewise, D may be able to avoid multiple or inconsistent obligations by impleading
the absentee or, if the dispute concerns ownership of property, by instituting
interpleader.
2. Rule 19(b)(2) calls for the court to be creative and to consider "protective provisions in
the judgment," "shaping the relief," and other measures to avoid or lessen potential harm
to the absentee or the D.
3. Rule 19(b)(3) instructs the court to address whether the judgment can be adequate if the
case proceeds without joinder of the absentee.
This factor implicates both the goal of avoiding harm to the absentee and D and also "the interest
of courts and the public in complete, consistent, and efficient settlement of controversies."
Again, the court looks to whether the harm that is the center of compulsory joinder doctrine will
actually result if the case proceeds and not just that it is a theoretical possibility,
4. Finally, Rule 19(b)(4) counsels the court to address the flip side of the coinwhether P
would have an adequate remedy if the action were dismissed for nonjoinder."
In other words, if the court dismisses the pending case, will P be able to get
justice?
In assessing this issue, most courts look to whether P would have an adequate
alternative forum in the event of dismissal.
If there is a forum in which all interested persons, including the absentee, can be joined
in a single proceeding, dismissal of the pending case may make great sense: It can
result in a single case in another court that binds all interested persons, thus avoiding
duplicative litigation and any potential harm either to the absentee or the D.
As we saw in the second step in applying Rule 19, often the reason the absentee cannot
be joined is that her presence in the case would destroy DJRX.
When that is the case, there may well be a state court in which all parties are subject
to PJRX and can be joined in a single proceeding.
The result of invoking Rule 19, then, may be that P is induced to give up her federal
forum for a state court.
o

Hypo: P, a citizen of Louisiana, sues D, a citizen of Texas, in a fed. court in Texas, properly
invoking DJRX. Absentee (A) is a necessary party, and is a citizen of TX. The court
concludes that A should be joined in the pending case as a P. Her claim against D,
however, cant invoke DJRX (because A and D are cocitizens), so joinder is not feasible. In

deter mining whether to proceed without A or to dismiss the case, the court might well
note whether all three parties can be joined in a single case in a state court in Texas (or
elsewhere). This inquiry will include an assessment of whether Texas would have
PJRX. If so, dismissing fed. court case can result in tbe most efficient litigation package
possible. If the court dismisses, essentially it will be telling P that she must give up her
federal forum in the interest of an efficient litigation package that will avoid harm to D and
to A.
3) Raising Rule 19 Issues:
Almost always, D raises Rule 19 concerns, either in a motion to join a necessary party or a motion
to dismiss the case under Rule 12(b)(7).
P will rarely do so, because the structuring of the case was the P's ideait would be unusual for P
to change her mind and call to the court's attention that she failed to join someone who satisfies
Rule 19.
Why would D do so?
Obviously, in cases satisfying Rule 19(a)(1)(B)(ii), D's self-interest dictates that she raise the
issue.
In those cases, the present structure threatens D with multiple or inconsistent obligations; she
will want to avoid those by forcing joinder of the absentee, or, if joinder is infeasible, she will
want to argue that the case should be dismissed under Rule 12(bJ(7).
What about cases that satisfy only Rule 19(a)(1)(B)(i)?
Here, the threatened harm from the present structure is to the absenteein theory, there are
two protections for the absentee in such a case.
1.
Rule 19(c): which requires a party asserting a claim to "state the name, if known, of any
person who is required to be joined if feasible but is not joined" as well as the "reasons for not
joining that person."
The idea is to put the court in a position to raise necessary parties issuesin practice,
this Rule provides little protection, because it seems to be ignored more than it is
honored.
The requirement of Rule 19(c) should be expanded to require all parties (not just
claimants) to inform the court of Rule 19 absentees and should be given teeth by being
included in the certification made under Rule 11.
2.
The other protection theoretically available to the absentee is intervention
(Discussed Below) intervention of right is available essentially to those absentees who
would be found necessary under Rule 19(a)(1)(B)(ii).
Such an absentee can join the case of her own volition, but the right to intervene is
worthless if the absentee is not aware of the pending case. The advisory committee that
drafted the 1966 amendments to Rule 19 relied here upon Rule 19(c). Again, however,
this protection suffers from the lack of respect accorded Rule 19(c).
B. Impleader (Rule 14)
1) Procedural and Policy Issues
Impleader, is an important tool in the panoply of joinder devices.
It is governed in federal practice by Rule 14(a), and results in overriding Ps party structure.
Importantly, only a "defending party" can join an absentee through impleader
Rule 14(a)
Obviously, a defending party is one against whom a claim has been assertedusually, of
course, that party will be the D, but a P can be a defending party if, for example, another
party has asserted a counterclaim or crossclaim against her.
Even someone who is impleaded is a defending party, & may, if she has a proper
impleader claim, implead someone else.
The defending party asserting impleader is known as the "thirdparty P," and the absentee joined
by impleader is the "third party D" (TPD).
So, in the usual case, in which D uses impleader, D will be called D and third-party P.
The pleading seeking relief from the TPD is the "third-party complaint."
Rule 14(a)(1) establishes that a defending party has a right to implead within 14 days
after she serves her original answer to the P's complaint.
Beyond 14 days, she must make a motion seeking court permission to impleadsuch
motions are routinely granted unless doing so will unduly delay resolution of the case on
the merits.
Is a defending party required to implead? No. Rule 14(a)(1) is clearly permissive
the first sentence provides that the defending party "may'' (not "must") implead.
The fact that only a "defending party" can assert an impleader claim becomes obvious when we
see what kind of claim is asserted in impleaderthe claim must be against an absentee "who is
or may be liable to the [defending party] for all or part of the claim against it."
This limitation is extremely importantthe defending party is not permitted to join an
absentee just because she has a claim against that absentee or because P may have a
claim against the absenteerather, the claim against the absentee reflects that the
absentee owes the defending party for all or part of the claim that has been asserted
against that defending party.
Such claims are almost always for indemnity or contribution. In the usual case, then, D
impleads an absentee (TPD) who owes indemnity or contribution to D for all or part of the P's
claim against the D.
Quick Note on Indemnification: We discussed indemnification concerning issue preclusion.
The duty to indemnify is a duty to hold someone harmlessto "pick up the tab" for that
person's liability in full.
For example, if you lend a classmate (D) your car, and D runs your car into P, you are
vicariously liable for D's act. P can sue you. If she does, and recovers a judgment against

you, however, you can sue your classmate, D, because she (as the primarily liable actor)
owes indemnification to you (the vicariously liable party).
Another example is insurance coverage. If you drive your car negligently and injure
someone who then sues you and recovers, the insurance company will have to pay that
judgment on your behalf. (Assuming, of course, that the event was within the coverage of
your insurance policy and was within the policy limits. If your policy limit is $100K and P
recovers a judgment against you of $130K, the insurance company is only on the hook
for $100K. You pay the rest.)
Contribution is similar, but usually involves a pro rata payment by another person. A
good example is contribution among joint tortfeasors.
o Hypo: X, Y, and Z are joint tortfeasors who injure the P. As a matter of joinder, P can
sue all three in a single case. (Why? Because under Rule 20(a)(2), the claims against
all three arise from the same transaction or occurrence and raise at least one
common question) But P does not have to do so. (Why? Because Rule 20(a) is
permissive.) Assume P sues only X. Accordingly, Y and Z are absentees. They cannot
be forced to join the pending case as necessary parties under Rule 19. (Why? Because
the Supreme Court held that joint tortfeasors are not necessary parties in Temple u.
Synthes Corp) But X can implead Y and Z because they, as joint tortfeasors, owe her a
duty of contribution, which means that they each owe their pro rata share of the
liability. If P won a judgment against X for $150K, Y would owe contribution for $50K
(one-third of the liability) and Z would also owe contribution of $50K (one-third of the
liability).
Without impleader, X would have to litigate the pending case and, if she lost, would
have to pay the entire judgment, say $150K, to P.
Then, in a separate action, she would sue Y and Z and hope to win her claims for
contribution from them.
She might lose that case, because, after all Y and Z would not be bound by the
judgment in the case by P against X. (Why? Because Y and Z were not parties to
the case by P against X, and thus, as a matter of due process, cannot be bound
by the judgment in that case. Thus, for example, Y and Z could argue that they
were not joint tortfeasors with X, and thus that they do not owe contribution to
her).
If she lost that case, she would absorb the entire $150K loss. Even if she wins the
case against Y and Z, however, she would have had to pay the entire judgment
in the interim and would have to pay for a second litigation to perfect her right to
contribution.
Impleader, then, overrides the P's party structure of the case to avoid potential harm to
the Dwithout impleader, D (X in our hypothetical above) runs the risk of losing to P and
then losing in a separate case against her alleged joint tortfeasors.
Avoiding such a loss is akin to the goal of Rule 19(a)(l)(B)(ii), which compels joinder of an
absentee to avoid the D's being saddled with multiple or inconsistent obligations. Thus,
impleader fosters efficiency, consistency, and fairness to the D.
These benefits outweigh the interest in P autonomy, and justify allowing D to restructure
the case.
Dont confuse impleader with the crossclaim under Rule 13(g)the crossclaim is
asserted by a party against a coparty; the impleader claim is asserted by a party against an
absentee.
Moreover, the crossclaim arises from the same transaction or occurrence as the underlying
case; the impleader claim, as we have seen, is narrowerit is for indemnity or contribution
on that underlying claim.
We can review these and other points about Rule 14(a)(l) with a hypotheticalthis is a great
fact pattern, and it will review a good bit of ground. Before working on it, read Rule
14(a) with great care.
o T has permission from D to drive D's truck. While doing so, he strikes P, a pedestrian. D is
vicariously liable for Ts acts. By the same token, D will have a right of indemnity from T. P sues
only D. D may implead T in the pending case, because T is or may be liable to D for all or part
of the underlying claim by P. Why? Because, as we said, T owes a duty of indemnification to D.
This is not a crossclaim. A crossclaim is asserted against a coparty. D and T are not coparties,
because P did not sue the two of them as coDs under Rule 20(a)( P could have joined them
as coDs under Rule 20(a), but in this hypothetical did not do so). Indeed, T is an absentee, a
non party, until D joins him through impleader. Let's assume that D properly impleads T.
o When we think about it, T now is hoping that D wins the underlying claim. If lJ wins
against P, T cannot be held liable; there would be no judgment for which he would have
to indemnify D. Suppose T notices that lJ failed to raise an important defense to the
underlying claim by P against D. Say, for example, D forgot to raise the statute of
limitations as an affirmative defense. Can T raise this defense, even though it is a
defense that D should have raised? The answer is yes. Exactly what part of Rule 14(a)
makes this clear? (The answer here is governed by Rule 14(a)(2)(C), which allows T to
raise against P any defenses that D could have raised.)
o What if T thinks he has a defense against D's impleader claim? What part of Rule 14(a)
allows him to raise that defense in the pending case? (It is Rule 14(a)(2)(A). Once D
impleads T, T is a defending party, and, like any defending party, must respond within 21
days of service under Rule 12.)
o After D impleads T, suppose T has a claim against D that arises from the same
transaction or occurrence as the impleader claim. Suppose, for instance, that T feels
the accident was caused by faulty brakes in the truck. T was injured in the same wreck
and wants to recover against D. Not only may T assert this claim in the pending case, he
probably must do so. Why? (The claim by T against D is a compulsory counterclaim

under Rule 13(a)(1). Why? A counterclaim is a claim against an "opposing party." Once D
impleaded T, he became an opposing party. This claim by T arises from the same
transaction or occurrence as the impleader claim, so it is compulsory under Rule 13(a)
(1). lf T does not assert it here, he will be estopped from suing on the claim anywhere)
Do not call this claim a crossclaim. Why is it not a crossclaim? (A crossclaim is asserted
against a coparty. D and T are not coparties; P did not sue the two of them as coDs under
Rule 20(a)(2).)
Go back to the stage in which D impleads T. Suppose (as is likely that D wants to recover
from T for two things. First, he wants indemnification, so if P wins against D, T has to pick
up the tab on that judgment. Second, if the wreck was really Ts fault, D wants to recover
from T for the damage to his truck. We know that he can seek the first of these things
through impleader, because this is exactly the kind of claim for which impleader is
designed. Why can D not seek the recovery for property damage through impleader?
(Because Rule 14(a)( l) impleader only allows recovery against the TPD for all or part of
the P's claim again!:>t the defending party who institutes impleader. It does not a1low
recovery for all things that arise from the same transaction or occurrence as the
underlying dispute, so it is narrower than the crossclaim under Rule13(g).
So if D impleads T, and asserts the indemnification claim there, can he also assert the
claim for damage to his truck in the pending case? Yes. How does he do that? (By using
Rule 18(a)( 1), which we discussed in 12.3. Remember, it allows a claimant who has
asserted one of the listed claims to join any other claim-regardless of relatedness-against
that person. One of the listed claims is an impleader claim under Rule 14(a)(1).)
Indeed, not only may D assert the property damage claim against T in the pending case,
but arguably he should do so. Why? What risk does he run if he impleads T without also
joining the property dam age claim? (He runs the risk of claim preclusion. Because the
indemnity claim and the property damage claim arise from the same transaction or
occurrence, they are part of the same "claim" for claim preclusion purposes in most JRXs.
So if the pending case goes to a valid final judgment on the merits. and D does not seek
property damage, he may be precluded from asserting the property damage claim in a
separate case.)

The foregoing concerned the basic impleader claim under Rule 14(a)(1) as well as some other
joinder provisions and a review of some preclusion materials from Chapter 11. Now we take one
more step, pursuing other claims for which Rule 14(a) provides.
o

Assume the same basic facts as in the preceding hypothetical: T borrows D's truck with D's
permission, and runs into P, a pedestrian. D is vicariously liable for Ts acts and D has a right of
indemnity from T. P sues only D. D then impleads T for indemnification and joins a Rule 18(a)(l)
(claim for damage to his truck. T files a compulsory counter claim against D, asserting that D
lent him a truck with defective brakes, which caused the wreck and personal injuries to T."1
Now that T has been joined in the case, P wants to assert a claim against T, arguing that T is
also liable for P's injuries. May P assert such a claim in the pending case? Yes. Why? (Rule 14(a)
(3) permits P to assert a claim against the TPD if it arises from the same transaction or
occurrence as the P's underlying claim. This claim by P against the TPD does arise from the
same wreck that forms the basis of the case, so it meets this test and may be asserted.)
Does anything require P to assert this claim against Tin the pending case? No. Why? (Rule 14(a)
(3) says P "may" assert the claim, not that she "must" assert it. Thus, the claim is permissive.
Also, there is nothing to fear from claim preclusion, because P has never asserted another claim
against T, so cannot be guilty of splitting a claim.
Assume that P does assert the claim against T. Oddly, this claim under Rule 14(a)(3) does not
have a commonly accepted name. It is not a counterclaim, since P and T are not yet opposing
parties; it is not a crossclaim, because P and T are certainly not coparties. Based upon the
diagram of the case, one good suggestion for a name is an "upsloping 14{a) claim.
Diagram here on page 721

After P asserts the upsloping 14(a) claim against T, suppose T has a claim against P-say, that P
somehow caused the wreck by acting negligently, and that T was injured. T wants to recover
from P for these injuries. T may assert that claim in the pending case. In this scenario, however,
Rule 14(a)(l) is irrelevant to her doing so. Why? (The claim by T against P here is a compulsory
counterclaim. Once P sued T, she became an "opposing party" to T. T's claim arises from the
same transaction or occur rence as P's upsloping 14(a)(1) claim, and thus must be asserted in
the pending case under Rule 13(a)(1).
Now go back to the stage where P has sued D, D has impleaded T and T has asserted a
compulsory counterclaim against D.
o Now suppose T wants to assert a claim against P in the pending case. He asserts that the wreck
was all P's fault, and that he (Tl was injured because of it. May T assert such a claim in the
pending case? Yes. Why? (Rule 14(a)(2)(D) permits the TPD to assert a claim against P if it arises
from the same transaction or occurrence as the underlying dispute) Must he assert the claim in
the pending case? No. Why? (Rule J4(a)('.l )( D) says the TPD "may" (not "must") assert the
claim. It is permis sive. And there is no risk of claim preclusion against T here, because T has not
been a claimant again.st P in another proceeding.)
o This claim by T against P also does not have a commonly accepted name. Based again on the
diagram of the case, a good suggestion is that we call this a "downsloping 14(a) claim."
o After T asserts this downsloping 14ta) claim against P, assume that P wants to assert a claim
against T in the pending case. What is the claim? (t is a compulsory counterclaim. Once T
asserted the claim against P, he became an "opposing party" to P. So any claim by P against Tis
a counterclaim, because it arises from the same transaction or occurrence as 'I's downsloping
o

14(a) claim, it is a compulsory counterclaim under Rule 13(a)( 1) and must be asserted in the
pending case.)
Thus, Rule 14(a) creates three claims:
1. The impleader claim under Rule 14(a)(1) asserted by a defending party against an absentee
(the TPD) who may owe her indemnity or contribution on the underlying claim against her;
2. The upsloping 14(a) claim asserted by P against the TPD, under Rule 14(a)(3); and
3. The downsloping 14(a) claim asserted by the TPD against the P, under Rule 14(a)(2J(D). The
latter two claims must arise from the same transaction or occurrence as the underlying
dispute. Having mastered the procedural propriety of these claims, now the fun begins, as
we assess JRXal and related issues.
2) JRXal and Related Issues
Impleader joins a new party (the TPD to the case)the TPD is brought in, moreover, in a defensive
capacity, meaning that she faces possible liability.
Accordingly, the TPD must be subject to PJRX in the forumIndeed, the first sentence of Rule
14(a)(1) assumes as much, since it requires that the TPD be served with summons and the thirdparty complaint.
In most cases, fed. court obtains PJRX over the TPD just the way it does over an original Drecall
that the PJRX inquiry in fed. court usually is the same as it is in the state courts in the state in
which fed. court sits.
The first step is to consult JRXal statutes of that state, such as long-arm statutes, to see
whether JRX is possible.
The second step, of course, is to assess whether the exercise of PJRX under that statute on
the facts of the cast> comports with due process.)
There is, however, an additional method of exercising PJRX in the impleader situationunder the
"bulge rule" of Federal Rule 4(k)(1)(B), the TPD can be served outside the forum stateeven in
the absence of a state long-arm statute--so long as she is served within 100 miles of fed.
Courthouse in which the case is pending.
Thus, assume the case is pending in the E.D.PA, in Philadelphia, and that the TPD is in NJ.
Ordinarily, fed. court would look first to PA law for a statutory provision allowing the exercise
of JRX out of state. If there is no such provision, but the TPD can be served in NJ w/in 100
miles of the Philadelphia fed. courthouse, the bulge rule allows exercise of PJRX over the
TPD. (Remember that the bulge rule applies only to join TPDs in impleader and necessary
parties under Rule 19. It is not available to join original Ds to the case.)
Venue provisions do not create issues of joining the TPD.
For starters, most courts agree that the general venue statutes-1404(a) and 1406(a)-apply
only to the initial claims against the D, and not to subsequent claims.
Beyond this, the impleader claim is so closely related to the underlying case (after all, it is for
indemnity or contribution on the underlying claim) that courts routinely recognize "ancillary
venue.IOW, as long as venue is proper in the underlying case, the TPD has no right to object
that venue is not proper as to her.
This practice makes great sense: As we are about to see, the impleader claim is so closely
related to the underlying case that it will invoke SUPJRX, so there is no need for an independent
basis of SMJRX. That being so with regard to SMJRXwhich is not waivableIt must also be
available for the concept of venue, which is waivable.
For the remainder of this discussion, we assume that the court has PJRX over the TPD
and that venue is proper.
The big question usually will be SMJRXremember, there are three potential claims: the
impleader claim, the upsloping 14(a) claim under Rule 14(a)(3), and the downsloping 14(a) claim
under rule 14(a)(2)(D).
Of course, there must be SMJRX over each that is asserted in fed. court.
As always, any of these might invoke an "independent" basis of SMJRX diction (DJRX,
alienage, or federal question JRX) or it may invoke SUPJRX.
Failing all of these, the claim must be asserted, if at all, in state court.
We will use the same fact pattern discussed above, in which T drives D's truck, with D's
permission, and hits P, a pedestrian. D is vicariously liable for T's acts, and T owes a duty to
indemnify D.
We worked through the various procedural aspects to this scenario earlier in this subsection.
Now we look at SMJRXthe discussion gets pretty involved, as we deal with several different
claims and address more problems raised by the SUPJRX statute.
We deal with several factual scenarios:
1) P is a citizen of California and D is a citizen of Arizona. All claims in this hypothetical are
based upon state (not federal) law and all claims exceed $75,OOO. P sues D, properly
invoking DJRX. D impleads T. T is a citizen of Utah. Is there SMJRX over the impleader claim?
Yes. That claim invokes DJRX, because it is asserted by a citizen of Arizona against a citizen of
Utah, and it exceeds $75K. So it invokes DJRX and can be asserted in the pending case.
2) Same facts as in One except here T is a citizen of Arizona. The impleader claim thus cannot
invoke DJRX because it is asserted by an Arizona citizen against an Arizona citizen
(Remember we could raise the same issue by having T be a citizen of a state other than
Arizona and the claim fail to exceed $75.000. Such a claim would fail to invoke DJRX because
it fails to meet the AIC requirement.) And there is no FQJRX because the claim is based upon
state Jaw. Does the claim invoke SUPJRX? Yes. There has never been any question that the
impleader claim satisfies the Gibbs test for SUPJRX."" As discussed in 4.7, Gibbs always
allows SUPJRX over claims arising from the same transaction or occurrence as the underlying
case. The impleader claim is even narrower than that: It is for indemnity or contribution
on that underlying claim.

Section 1367(a) grants SUPJRX precisely because that section adopts the Gibbs test. (See
4.7 .J Section 1367(b) applies in cases that invoked DJRX (as P v. D does), but removes
SUPJRX only over claims asserted by Ps. Here, the impleader claim was asserted by the D,
so 1367(b) does not remove the grant of SUPJRX. The impleader claim can be joined in
the pending case.174
3) Same facts as in Two except that here D impleads T and joins a claim under Rule 18( a)( 1) for
the property damage to his truck. (If this point is fuzzy, see note 158 above.) As in Two, T is a
citizen of Arizona, so again there is no DJRX or federal question JRX. We saw in Two that the
impleader claim will invoke SUPJRX. What about the Rule 18(a) claim for property damage?
The answer is yes.
Again, 1367(a) grants SUPJRX over this claim because it meets Gibbs-it shares a
common nucleus of operative fact with the underlying claim 1 the collision with P) that
did invoke federal SMJRX (the claim by P against DJ. Just because Rule 18(a) does not
require that a claim be transactionally related to the underlying case does not mean that
a claim asserted under that Rule cannot satisfy the Gibbs test. Section 1367(b) applies in
cases that invoked DJRX (as P v. D does), but removes SUPJRX only over claims asserted
by Ps This claim is asserted by a D, so 1367(b) does not remove the grant of SUPJRX. The
claim can be asserted in the pending action.
4) Same facts as in Three, except here T is a citizen of California. So D, a citizen of Arizona, is
impleading a citizen of California. And, remember. P is a citizen of California. Is there subject
mat ter JRX over D's impleader claim (and property damage claim) against T? Yes-DJRX! This
is a claim by a citizen of Arizona against a citizen of California, and it exceeds $75K. The fact
that T is a cocitizen of P is absolutely irrelevant to this point. P's citizenship is irrelevant in
assessing this claim; P is not a party to this claim.
Now it gets tough. P now asserts an upsloping 14(a) claim against T, to recover for
the personal injuries she suffered when T drove D's truck into her. We know that this
claim is procedurally proper under Rule 14(a)(3) because it arises from the same
transaction or occurrence as the underlying case. But is there subject matter JRX
over this claim? There is no DJRX, because this claim is asserted by a California citizen
(P) against a California citizen (TJ. There is no FQJRX because the claim is based upon
state law. So what about SUPJRX?
Section 1367(a) clearly grants supplemental JRX to all Rule 14(a) claims. As we have seen
several times, that section codified Gibbs, which permits SUPJRX over all claims that
constitute part of the same "case or controversy" as the claim that invoked federal SMJRX.
As interpreted, this means the claim must share a nucleus of operative fact as the
underlying claim. Upsloping (and downsloping 14(a) claims always meet this test,
because Rule 14(a) permits them to be asserted only if they arise from the same
transaction or occurrence as the underlying claim (*The common nucleus of operative fact
test of Gibbs is broader than "same transaction or occurrence." Therefore, claims that
arise from the same transaction or occurrence as a JRX-invoking claim will always
invoke SUPJRX under 1367(a)).
Section 1367(b) applies only in cases that invoked DJRX JRX (such as Kroger and
Scenario Four). It removes SUPJRX over several claims, including those by "Ps against
persons made parties under Rule 14."The claim asserted by Pin Kroger ( and in Scenario
Four) was precisely that- a claim against a TPD, brought into the case under Rule 14(a)(l).
Clearly, then, the result in this hypothetical is the same under 1367 as it was under
Kroger. (Which means no. P cannot assert claim against impleaded TPD)
5) P, a citizen of Missouri sues D, a citizen of Kansas. All claims are based on state law and all
exceed $75K. So this original claim invokes DJRX and is properly filed in fed. court. D files a
counterclaim against?, which also invokes diversity of citizen ship JRX. Now P impleads T,
who, P asserts, owes her indemnity or contribution for the counterclaim by D against P. T is
a citizen of Missouri. Thus, the impleader claim is asserted by a citizen of Missouri against a
citizen of Missouri. Obviously, then, this claim cannot invoke DJRX. And because it arises
under state law, the claim also cannot invoke FQJRX. Is there SUPJRX over this impleader
claim by P?
The impleader claim, as we discussed in Scenario Two above, certainly meets the Gibbs
test. Moreover, because the claim is asserted by one acting in a defensive capacity,
Kroger did not counsel rejection of SUPJRX. Thus, before adoption of the supplemental
JRX statute in 1990, the answer was quite clear: Supplemental (then called ancillary) JRX
applied to impleader claims asserted by the P. "0
But what does the SUPJRX statute do? Section 1367(a l clearly grants SUPJRX over the
impleader claim because, as we just said and as we saw in Scenario Two, it satisfies
common nucleus test. Section 1367(b) applies in cases that invoked DJRX (as P v. D
does) and removes JRX over certain claims, including claims asserted by "Ps against
persons made parties under Rule 14." The claim in this hypothetical is exactly such a
claim-it is asserted by a P against some one impleaded under Rule 14. Thus, on its face,
the statute prohibits SUPJRX over this claim.
This result is unfortunate. It changes JRXal law that was well established before passage of
the statute. Moreover, it means that the underlying claim by P against D and the
counterclaim by D against P will proceed in fed. court, while the impleader claim by P against
TPD must go to state court. This subjects P to precisely the kinds of harm irn pleader is
intended to avoid. It burdens P with the risk of unfair loss and burdens the judicial systems
with two cases over what is clearly one transactionally related dispute.
No doubt there should be SUPJRX over these claims. But courts are stuck with the language
of the statute, and that language makes no express exception for claims asserted by Ps in a
defensive capacity Predictably, courts have interpreted the statute to prohibit SUPJRX in this

fact pattern. 1" Is it possible that other courts will hold the other way? Yes, which simply
creates another area in which this statute has created uncertainty.
6) P, a citizen of South Carolina, sues D, a citizen of Kentucky. All claims are based upon state
law and exceed $75K. The case thus invokes DJRX and is properly filed in Fed. Court. D
impleads T, a citizen of South Carolina. As in Scenarios One and Four above, this claim
invokes DJRX. Now, T asserts a downsloping 141a) claim against P. That claim does not
invoke DJRX, because T and P are cocitizens. It does not invoke FQJRX, because the claim
arises under state law. Does it invoke SUPJRX?
Yes. Section 1367(a) grants SUPJRX because 14(a) claims, by definition, must arise from
the same transaction or occurrence as the underlying case; thus, they satisfy Gibbs.
Section 1367(b) applies in cases that invoked diversity of citizenship JRX (such as this) but
only removes SUPJRX over claims by Ps. This is a claim asserted by the TPD, so 1367(b)
does not remove the grant of SUPJRX. The claim can be joined in fed. court. (This result is
consistent with the law before enactment of 1367.)
Now one more step. Suppose P now asserts a compulsory counter claim against T. Once T
asserted the downsloping 14(a) claim against P, T became an "opposing party," so P's
claim back is a counterclaim. This one arises from the same transaction or occurrence as
Ts claim, so it is a compulsory counterclaim under Rule 13(a). Is there SMJRX over this
claim? Obviously, there is no DJRX or FQJRX; the two are cocitizens and the claim arises
under state law.
Is there SUPJRX? Before Congress enacted 1367 there was."'' But the statute creates the
same problem we saw in Scenario Five. The compulsory counterclaim would clearly invoke
SUPJRX under 1367(a) because it arises from the same transaction or occurrence as the
underlying claim that invoked SMJRX. The problem, again, comes from 1367(b), which
applies in cases that invoked DJRX juris diction (such as this), and removes SUPJRX over
claims by "Ps against persons made parties under Rule 14." This daim is exactly that.
Obviously, there should be SUPJRX, because P is acting in a defensive capacity and, in fact,
is filing a compulsory counterclaim. But, just as obviously, this stat ute fails to address this
situation, and creates uncertainty as to the viability of SUPJRX in this scenario.
7) P, a citizen of Wisconsin, asserts a federal question claim against D, a citizen of Delaware,
properly invoking federal question juris diction. All other claims are based upon state law
and exceed $75K. D impleads T, a corporation that is incorporated in Delaware with its
principal place of business in Wisconsin. (So, as we saw in 4.5.3, the corporation is a
citizen of both of those states.) P asserts an upslop ing 14(a) claim under Rule 14(a)(3)
against T. Neither the impleader claim nor the upsloping 14(a) claim invokes DJRX or FQJRX.
Does either claim invoke SUPJRX?
Yes-they both do. Why? First, 1367(a) grants supplemental juris diction over both,
because both satisfy Gibbs. Second, 1367(b) does not apply, and thus cannot remove
the grant of supplemental juris diction over those claims. Remember, 1367(b) applies
only in cases that invoked DJRX. This case did not, so 1367( b Idoes not apply and does
not remove the grant of supplemental JRX.
C. Intervention (Rule 24)
o Procedural and Policy Issues
Intervention is exactly what it sounds likean absentee brings herself into a pending case.
By doing so, obviously, the absentee overrides the P's party structure of the case.
Intervention is governed in federal practice by Federal Rule 24, which recognizes both
intervention of right (under Rule 24( a )I and permissive intervention (under Rule 24Cb)). 19';
The difference between these two is clear from the names. With the former, the court (at least
theoretically) must allow the absentee to join; with the latter, the court has the discretion to
permit the absentee to join.
1) Intervention of Right
An absentee may qualify for intervention of right in one of two ways:
i.
Rule 24(a)(1) notes that a federal statute might confer such a right.
A good example is 28 U.S.C. 2403, which requires that the Attorney General of the
United States be notified whenever a case calls into question "the constitutionality of
any Act of Congress affecting the public interest." After notification to the Attorney
General, the United States has a right to intervene.
ii.
Rule 24(a)(2) is more importantit provides for intervention of right in the absence of a
statute, if the absentee can establish (1) that she "claims an interest relating to the
property or transaction that is the subject of the action", (2) that she is "so situated that
disposing of the action may as a practical matter impair or impede the [intervenor's] ability
to protect its interest", and (3) That the existing parties do not adequately represents her
interest.
On its face, Rule 24 seems to suggest that the party opposing intervention would have
the burden of showing that an existing party adequately represented the would be
intervenor's interest, but the courts have made it clear that the intervenor has the
burden on all three requirements, including, then, that the extent parties do not
adequately represent her interests.
That said, the Supreme Court has made clear that the burden of showing that no party
adequately represents the intervenor's interest is "minimal" and is satisfied by showing
that the existing parties have some interest that differs from that of the absentee.
*Side Note: This test for intervention of right should ring a bellthe two basic
requirements are the same as the two requirements for finding an absentee
necessary under Rule 19(a)(1)(B)(i).
Thus, an absentee who would be found necessary under Rule 19(a)(1)(B)(i) will
have a right to intervene under Rule 24(a)(2) provided she can also show that

existing parties do not adequately represent her interestthis latter point has no
counterpart in Rule 19.
Hypo: A owns 1K shares of stock in Corporation, in her own name. P claims that she and A had
bought the stock together and that the stock was supposed to have been issued in both names
as joint owners. P sues Corporation, seeking to have A's stock canceled and the shares reissued
in the joint names of P and A. Does A have a right to intervene?
We saw the same fact pattern in above, in which the question was whether A was a required
party under Rule 19.
The answer to that question and to the question asked here is yes: A has a right to
intervene under Rule 24(a)(2) for essentially the same reasons that she was necessary
under Rule 19(a)(1)(B)(i).
1 : she has an interest in the pending litigation; P is currently the sole owner of the stock at
issue in the litigation.
2 : she is so situated that litigation without her joinder might impair or impede her ability
to protect that interest; if P wins the pending case, A's stock is canceled and reissued to
make her merely a joint owner, instead of outright owner.
These two facts meant that A was necessary under Rule 19(a)(l)(B)(i). With Rule 24(a)
(2) we must also assess the third factorthat A's interest is not adequately
represented by any of the present parties. This certainly seems to be the case; P
wants to take away A's present sole ownership of the stock. D is probably ambivalent
on the issue; at least, it is not clear why the corporation cares who owns the 1K
shares. Accordingly, A has a right to intervene under Rule 24(a)(2).
We are left, then, with two Rules19(a)(l)(B)(i) and 24(a)(2)that overlap significantlyboth
Rules are aimed at overriding the P's party structure for one reason: to protect an interested
absentee from harm to her ability to protect her interest.
Why would two Rules do the same thing?
The answer is that the two Rules empower different persons to force the joinder of the
absentee.
Rule 19 is invoked principally by the D, although the court may also raise Rule 19 issues
on its own (assuming that it knows about interested absentees).
In contrast, the absentee herself invokes Rule 24thus, she is given a mechanism by
which to override the P's structuring of the case expressly to protect herself.
Of course, an absentee can intervene only if she is aware of the pending case. Rule
19(c) is a feeble attempt to put the court in a position to know of absentees who might
have a right to intervene under Rule 24(a)(2). The drafters of that Rule foresaw the
possibility that the court might then inform absentees of their right to intervene.)
Also, an absentee who qualifies to intervene of right is not required to do soRule 24(a)(2)
makes it clear that the absentee "may" intervene, but does not require that she do so.
Remember why parties satisfy the basic test for intervention of right under Rule
24(a)(2): because they had an interest in that case, and were so situated that their ability to
protect that interest may be impaired or impeded, and their interest was not adequately
represented by an existing party. If Ps won the first case, the absentees' relative places on the
promotion ladder would have been lowered; the Ps would have been put above them.
As noted, under Rule 24, any application to intervene must be ''timely." Contrast this
requirement with the timing requirement for Rule 19. Under Rule l 2{h)(2), a motion to
dismiss for failure to join an indispensible party may be made anytime before entry of
judgment at trial; IOW, indispensability under Rule 19 could be raised at the trial on the
merits,
o

2) Permissive Intervention
The second type of interventionpermissive interventionis not available of rightinstead,
whether to permit the absentee to intervene is addressed to the discretion of the district court.
A permissive intervenor generally is not as closely related to the pending case as an intervenor
of rightshe does not have a statutory right to come into the case and her nonjoinder does not
threaten her interest with harm.
Accordingly, there is less need for allowing her to join the case, and the trial judge may look at
a wide range of factors relating to fairness and convenience in deciding whether to allow
permissive intervention.
Permissive intervention should be granted only if the court determines that its benefits
outweigh the burdens it creates.
Like intervention of right, there are two provisions concerning permissive intervention.
i.
Under Rule 24(b)(1)(A), the absentee may seek to intervene if a federal statute confers "a
conditional right to intervene."
There is such a statutory provision in the Bankruptcy Code, for example, which allows a
party in interest to seek to intervene." Such statutes do not confer a right to intervene,
and even those who fall within them must submit their intervention fate to the
discretion of the trial judge.
ii.
Rule 24(b)(2) is more significant and allows permissive intervention when the absentee "has
a claim or defense that shares with the main action a common question of law or fact."
The reference to "claim or defense" recognizes that an intervenor might come in on
either side of the caseas a P or as a D.
The requirement of a common question is not very demanding.recall that it would take
more than that for persons to be joined together as coparties; Under Rule 20(a)(1),
persons can join as coPs, for instance, only if their claims (1) arise from the same
transaction or occurrence and (2) raise at least one common question. Here, the
showing required for permissive intervention is merely the second of those two tests.

The common-question standard is the same as we saw for consolidation under Rule
42(b)
Note that it does not require the absentee to have any interest in the pending case.
Further, it does not require that the common question predominate in the litigation;
there simply has to be at least one common question presented both by the pending
case and the absentee's claim or defense.
However, demonstrating that there is such a common question is no guaranty that
permissive intervention will be granted.
Again, permissive intervention (like consolidation) is a discretionary call for the
trial judge.
The court usually looks to such things as (1) whether the absentee has delayed
unduly in seeking to intervene; (2) whether intervention might prejudice any existing
parties; and (3) the status of the pending proceedings.
For instance, if the pending case is nearing completion, and intervention would
introduce collateral issues that would delay resolution, the court should probably
deny the application to intervene.
Allowing permissive intervention overrides the P's structuring of the suit and can be disruptive
to the existing parties.
Accordingly, many courts will permit it only if they are convinced that the absentee will
make some useful contribution to the development of the case or issues in the case.
Moreover, intervention can be sought for limited purposes, for example, to litigate only on
specific issues.
For example, when the court in a civil rights case ordered that the settlement terms be
kept confidential, it should have granted the motion of newspapers to intervene to
challenge the order of confidentiality.

3) Procedure & Timing


Under Rule 24(c), the absentee seeking to intervene must serve on all parties:
i.
A motion to intervene and
ii.
Her pleading in intervention.
Even when the case involves intervention of right, she must make the motion to intervene and
does not become a party until the motion is granted.
Thus, the absentee must choose to participate on one side of the dispute.
The P-intervenor will offer a complaint in intervention, which states her claim against the
D.
The D-intervenor will offer an answer in intervention, which responds to the P's
anticipated claim against her once intervention is granted.
She makes this decision by determining which side is more consistent with her position
often, there will not be a perfect match of interests, so she must decide which side offers
less conflict with her position.
The court has the discretion to look beyond the absentee's characterization and realign her
according to what the court sees as the interests of the partiesthis realignment may
have serious consequences for SMJRX, as we will see shortly.
Both Rule 24(a) and (b) begin with the words "on timely application," meaning that any motion
to intervenewhether of right or permissivemust be timely.
Rule 24 does not define what that meansthere is no magic time frame.
In one case, intervention was untimely when made four months after a case was filed.
In another, intervention was timely although made four years after a case was filed.
The question is addressed to the discretion of the district judge, who must assess not
simply the passage of time since the case was filed, but all relevant circumstances."
While there is no single exhaustive list of such factors, many courts look to these: (1)
how long the absentee knew of her interest (or. with reasonable diligence, should have
known of her interest) befoe seeking to intervene; (2) the extent of prejudice caused to
existing parties by the absentee's delay; (3) the extent to which denial of intervention
might prejudice the absentee; and (4) unusual facts that augur for or against a finding
of timeliness.
Although it is unusual, there are cases in which courts have granted intervention after
entry of judgment.
For instance, an absentee whose interests are affected by the judgment might wish to
intervene to prosecute an appeal when the original parties have refused to appeal.
As a general rule, courts are more likely to find the effort to intervene "timely" with
intervention of right under Rule 24(a)(2) than with permissive intervention.
The reason is clear: With intervention of right under that Rule, the absentee's ability to
protect her interest will be impaired by the pending litigation. Joinder is required to avoid
such potential harm to the absentee.
4) JRXal & Related Issues
Because an intervenor voluntarily enters a pending case, she has no basis on which to object to
a lack of PJRXshe has waived any personal JRX objection she might have had.
Similarly, an intervenor has no basis on which to complain about venueshe has waived any
venue objection she might have had as well.
But, as we know, parties cannot waive or stipulate around limits on FSMJRX.
Every claim in federal court must be supported by a basis of subject matter JRX.
Thus, the court must assess whether intervention can be accomplished consistent with
the restnctions on FSMJRX.
Remember, that the intervenor comes into the case either to assert a claim (as a P) or to
have a claim asserted against her (as a D)SMJRX is exercised over claims, not over

partiesSo the appropriate focus is whether the claim asserted by or against the
intervenor invokes federal SMJRX.
o Hypo: P, a citizen of Delaware, asserts a state law claim of $100K against D, a citizen
of Illinois. The claim invokes DJRX and is properly filed in fed. court. A, an intervenor of
right who is a c1t1zen of CA, intervenes as a P to assert a $100K state law claim
against D. A's claim invokes DJRX and thus is properly asserted in this case.
o Hypo: Same facts as in the preceding hypothetical, but here the intervenor is a
citizen of Illinois. Obviously, A's claim against D does not invoke DJRX, because A and D
are cocitizens. Also, there is no FQJRX, because A's claim arises under state law. Can A
s claim invoke SUPJRX?
This is an important question. As with the discussions of SUPJRX for each of the
joinder devices addressed in, you must be familiar with the operation of 1367.

Remember that under Rule 19 an "indispensable" absentee is one (1) who is


necessary, but (2) cannot feasibly be joined in the pending case, and (3) as to
whom the court has decided to dismiss rather than proceed.
That third step was determined based upon an assessment of flexible factors under
Rule 19(b).
One relevant factor was whether the absentee can protect her interest in the
absence of dismissal
Because the absentee satisfying Rule19(a)(1)(B)(i) can intervene under Rule
24(a)(2), she can protect herself and thus the court should not dismiss.
IOW, the court should not find the absentee (to use a term no longer found in
Rule 19, but widely used) "indispensable."
The basic tests for the two Rules are the same, with one addition in Rule 24(a)(2)
that the absentee show that her interest is not adequately represented by extant
litigantsas we discussed above, however, this latter requirement imposes a
minimal burden on the absentee
Back to the Hypo: Under 1367(a), A's claim against D would invoke SUPJRX,
because it does satisfy the common nucleus test, as we saw above.
But 1367(b) applies in cases that invoked DJRX (such as our hypothetical) and
removes SUPJRX over certain claims.
Among them are claims by persons "seeking to intervene as Ps under Rule 24A is
such a person, so 1367(b) removes SUPJRX over that claim.
This means, of course, that P's claim against D, and any counterclaim by D against
P, will be litigated in fed. court, while A's claim against D must be litigated in state
courtthe SUPJRX statute robs fed. court of the ability to resolve the overall
dispute.
As noted earlier, because 1367(b) only applies in DJRX cases, and because it
increased the situations in which courts would not have SUPJRX, the statute
reflects an antidiversity JRX bias.
The language of 1367(b) is problematic in another waybecause the subsection
applies to those "seeking to intervene as Ps," does it include someone who seeks
to intervene as a D, but who is realigned as a P?
The uncertainty on this point simply creates more confusionsome courts have
been willing to realign an intervening P as a D, expressly to save JRX; Others
have not done so, feeling bound by the absentee's choice to intervene on the P's
side.
Some litigants have even tried to exploit this language by intervening as Ds when
their interests are more closely aligned with the P.
Hypo: A holds a stock certificate for 1K shares of Corporation, issued in A's name. P
claims that she and A had agreed to buy the stock together, each paying half, and that
the stock should have been issued in their joint nan1P:->. P, a citizen of Alabama, sues
Corporation, a citizen of Delaware, seeking to have A's stock canceled and then
reissued in the joint names of P and A. The stock is worth $500K. P's claim against
Corporation invokes DJRX and is properly filed in Fed. Court. A is required under Rule
19(a)(l)(B)(i) and has a right to intervene under Rule 24(a)(2). (Remember whv: A has
an interest in the pending case; her ability to protect that interest may be impaired or
impeded by the pending case, and (for Rule 24(a)(2)) her interest is not adequately
protected by those who are presently parties.) Will there be SMJRX if she intervenes?
o In all likelihood, A will choose to intervene as a D. Her interest is antithetical to that
of P. After all, P wants to dilute A's interest in the stock. Corporation is probably
ambivalent about who owns the stock and may be satisfied with the status quo. A
wants to keep the status quo. So let's say A would intervene as a D. She is a citizen
of Alabama, so P's claim against A does not invoke DJRX (because they are
cocitizens). The claim likewise does not invoke FQJRX because it arises under state
law. So is there SUPJRX?
o As we saw above. 1367(a) will grant SUPJRX over the claim. because of its close
relationship with the pending case. But does 1367(b) remove that grant? It applies
only in cases that invoked DJRX, such as this, and removes jurisdiction over
particular claims.
Some commentators argue that joinder is proper in this case because nothing in
1367(b) precludes itafter all, there is no claim here asserted by a person "seeking to
intervene as a P under Rule 24." So that prohibition does not apply.
The problem with the argument, as we also saw with regard to Rule 19(a)(1)(B)(i), is that it
assumes that SMJRX is granted over parties.
o

Why did A intervene as a D? Presumably so she could defend against P's claim to her
stock. So she intervened as a defendant to defend a claim by P against her. Notice,
however, that 1367(b) expressly removes SUPJRX over claims asserted by a P against
"persons made parties under Rule . . . 24." This provision applies to A in this
hypothetical. So the claim by P against Awhich was the very reason for A's
interveningcannot be asserted in the pending case.
Finally, claims asserted by or against a permissive intervenor will rarely invoke SUPJRX.
Permissive intervention under Rule 24(b)(2) requires only that the intervenor's claim or
defense have at least one question in common with the pending casethere is thus no
requirement that the claim or defense be so closely related to the pending case as to arise
from a common nucleus of operative fact.
Thus, satisfying the requirement of Rule 24(b)(2) does not necessarily satisfy the degree of
relatedness required for SUPJRX under 1367(a).
There may be cases, however, in which the claims asserted by or against a permissive
intervenor will share enough factual overlap with the underlying dispute to invoke SUPJRX,
but they are unusualin most cases, claims involving permissive intervenors have to
invoke DJRX, alienage, or FQJRX to be heard in fed. court.
Easy to understand joinder when diagrammed out.
Joinder is very rule based.
Rules:
Rule 8-P can bring claim against D
Rule 12-Defense and objections
Rule 13couterclaim and cross claim
Rule 20(a)permissive joinder of claim against new party
Rule 14-impleader (Yes multiple impleaders allowed), and impleaders can bring crossclaims against each
other
14(b) P can implead third party P when a claim asserted against him.
Third party D can assert can assert claims P
P can asser claims against 3rd party D.
B and Mcar accident. B sues M for negligence about brakes. M impleads car shop alleging contributory
negligence fixing her brakes. Carshop wants to assert a claim against B to recover an outstanding
balance. No JRXal issues, what is the likely result.
interpleader & C-ACTION
I. INTERPLEADER

Interpleader allows resolution of competing claims to property in a single caseIt is thus limited to
the question of who owns specific property.

A. WhatIinterpleader Is and How It Works: Policy and Terminology


interpleader is a procedural device that allows someone in possession of property or money to force
all adverse claimants to that property to litigate the ownership of that property in a single
proceeding.
It is the model of efficient litigationThe question of ownership is litigated once, with all claimants
and the present possessor of the property bound by the judgment.
o

Insurance Co. issued a $250K life insurance policy. The insured died, and Insurance Co. must now
pay out the benefit. Three peopleA, B, and Ceach claim to be the beneficiary of the entire
policy amount. Consider how difficult things would be for Insurance Co. if it could not force A. B,
and C to assert their claims to the policy in a single interpleader cast.
o Suppose A sued Insurance Co. and won. The court would enter a judgment requiring the
company to pay the policy amount to A. Then suppose B sued Insurance Co. The judgment in
the case by A against Insurance Co. would not be binding on B, so B is free to assert her claim
that she should get the money. (By the way, why is the judgment in the case by A v.
Insurance Co. not binding on B?3) Suppose B wins. The court would enter a judgment
requiring the company to pay the policy amount to B. Insurance Co. would now be subject to
inconsistent obligations: It could not satisfy the judgment from the first case without violating
the judgment from the second case. If it has to pay both, it will pay out twice as much in
insurance proceeds as it contracted to do. And things might get even more complicated when
C sues to claim that she should get the insurance money.
interpleader avoids these problems by allowing Insurance Co. (or anyone in a similar situation)
to join in a single case all the persons who claim to own the property.
Thus, it is supported by the same policy interest we saw undergirding joinder of necessary
parties under Rule 19(a)(l)(B)(ii)4 and impleader under Rule 14(a)(1)5

3 Because due process provides that a judgment cannot be binding against one who was
not a party in an earlier case. B was not a party in A v. Insurance Co., nor was any party
representing B's interest. So B is not bound.
4 That rule permits overriding the P's structuring of a suit expressly to avoid subjecting a party to double, multiple, or inconsistent
obligations such as those seen here.

5 Impleader permits a defending party to join in an absentee who owes her indemnity or
contribution. Doing so protects the D from the possibility of losing in the pending case

And because interpleader resolves the conflicting claims in a single proceeding, it saves judicial
resources and avoids the inconsistent results that can erode confidence in the system of
justice.
In summary, a many-sided dispute can be resolved economically and expeditiously in a
proceeding, and the stakeholder can be relieved from the obligation of determining who has
the rightful claim to the money or property. In addition, the stakeholder avoids possible
multiple liability resulting from inconsistent judgments for different claimants in different suits.
Even if multiple liability is unlikely, both the stakeholder and the judicial system avoid the
expense and delay of multiple litigation. Conflicting claimants to the stake also may benefit
from interpleader, since all conflicting claims arc resolved in a single action and a limited fund
can be distributed equitably. Furthermore, interpleader frequently eliminated the need to find
and execute on the debtor's assets. The con tested stake generally will be on deposit with the
court.''

interpleader involves specialized terminology:


o The property to which the litigants have conflicting claims of ownership is the stake or res.
o The person in possession of the property is the stakeholder.
o The persons who are joined in the interpleader proceeding, whose conflicting claims of ownership
will be adjudicated, are the claimants.
This Hypo is referenced later:
S finds an expensive wristwatch in the basement of the house she buys. The previous owner of the
house (O) claims to own it, and argues that she left it in the basement by mistake. A contractor (O)
also claims to own it, and argues that she left it in the basement while doing renovation work. S is
the stakeholder. O and C are the claimants. If S does not claim to own the wristwatch, she is a
disinterested stakeholder, and the proceeding will be a true (or strict) interpleader.
o If, however, S claims that she should be able to keep the wristwatch (because, for example, of a
finders statute) she will be an interested stakeholder, and the proceeding will be in the nature of
the interpleader.
o

B. Two Types of interpleader in Federal Court


interpleader practice in the Fed. Courts is complicated because there are two types of interpleader.
Rule 22, also known as Rule interpleader, provides only a procedural mechanism because no
Federal Rule can affect FSMJRX or venue.
It can only be used if some basis for FSMJRX (discussed in Chapter 4) and some basis for
federal venue (discussed in Chapter 5) apply. Typically, Rule interpleader cases invoke DJRX JRX
under 28 U.S.C 1332(a)(1)
In addition, however, there is the Federal interpleader Act, which consists of three statutes 28
U.S.C. 1335, 1397, and 2361.
This Act creates a different right to interplead and a separate basis of FSMJRX, as well as
provisions for venue and service of processthese three statutes together create what is known
as S-interpleader.
The JRXal and venue differences between Rule and S-interpleader are important, and are
addressed in detail below.
Other differences are discussed in the remainder of this subsection. Throughout your consideration
of this topic, keep in mind that there are two completely separate vehiclesRule interpleader and
S-interpleader-for invoking interpleader in Fed. Court.
C. Claims That Exceed the Stake and Prospective Claims

In the examples we have seen so far, each adverse claimant claimed to own the entire stake
either the wristwatch in the previous hypothetical or the $250K life insurance fund in the first
example. But interpleader is also appropriate when the total claimed by the claim ants exceeds the
value of the stake. Such cases usually involve competing claims to a liability insurance fund.
o D has automobile insurance that covers her against liability to a total of $300K per occurrence.
She is involved in an automobile crash that severely injures five people. Each of the five (P- l
through P-5) files a case against D for personal injuries from the crash. The total demand in the
five separate cases is $1,500K. Thus, the claims exceed fivefold the amount of insurance
coverage. D's insurance company may wish to interplead the $300K fund and join the five
claimants. There are three important points to note here.
1) interpleader litigation deals only with who is entitled to recover the stake; it involves only
adverse claims to the stake6. In this hypothetical, we do not know yet whether the claims by
each of the five individual tort Ps will result in judgments that exceed the $300.000 insurance
coverage.
The five tort claims are "unliquidated" because we do not know whether they will actually
become claims against the insurance fund and, if so, for how much. The individual tort cases
by P-1 through P-5 against D are not part of the interpleader case.
Those claims are asserted against D to impose upon D personal liability; they are not claims
against the stake.7 As those cases are litigated (or settled), the claim of each P will become
"liquidated," which means that a dollar figure will be attached to it. Then, each P will have a

and then failing in a separate case to collect indemnity of contributions. Thus, impleader,
like joinder of necessary parties under Rule 19(a)(l)(BJ(ii) and interpleader, avoids
imposition of multiple liability.
6 In all likelihood, D's insurance company will have the duty to defend D in each of those cases, regardless of what the ultimate
recoveries by each P may be. It usually is part of a liability insurer's contractual obligation not only to provide the policy coverage
from which claimants can recover but also to defend the insured in litigation against her.

claim against the stake, because each will want to recover her judgment from the insurance
money. (If the stake is exhausted without compensating the claimants fully, the claimants
will attempt to recover the shortfall from D personally.)
2) If the claims of the various tort Ps in this case are not yet liquidated (and might not be
liquidated for years because they are in litigation in separate cases), how can the insurance
company interplead now?
Under Rule interpleader by Rule 22, the stakeholder may proceed if separate claims "may
expose [the stakeholder] to double or multiple liability. . . , " Under S-interpleader, the
stakeholder may join any who "are claiming or may claim to be entitled to the stake." Thus,
even if the applicable substantive law does not permit a direct action in the absence of a
judgment against the insured, interpleader is proper at the outset."
3) What happens if the claims of the five Ps, as finally liquidated, exceed the value of the stake?
Suppose, for example, that P-1 wins a judgment of $50K; P-2 wins a judgment of $100K; P-3
wins a judgment of $150K; P-4 wins a judgment of $200K; and P-5 wins a judgment of $400K.
That is a total of $900K in judgments against D. The available insurance fund is $300K. If
interpleader were not available, we would have a race to recover from the insurance fund. The
race might leave the tardy claimants with nothing.
Thus, in addition to the policy advantages discussed above, allowing interpleader in this
situation also serves the same principle addressed by Rule 19(a)(1)(B)(i)avoiding harm to
an absentee.
o

In this situation, interpleader serves to "slice the pie" equitably among the five claimants. As
noted, their liquidated claims total $900K which is three times as large as the insurance fund.
Accordingly, the interpleader court will allow each claimant to recover one-third of her claim.
Thus, P-1 will recover $16K.66 from the fund; P-2 will get $33,333.33; P-3 will get $50K; P-4 will
get $66,666.67; and P-5 will get $133,333.33. None recovers her amount in full, but, more
important, none is left outt altogether. (Each one is now free to try to enforce her judgnment
against D personally for the two-thirds not covered by insurance.)

D. Injunctions Against Other Proceedings; Limitations of interpleader

The efficacy of interpleader would be threatened if the claimants were free to assert their rights to
the stake in separate litigation.
For instance, assume S institutes interpleader and joins O and C as claimants. If C can sue S in a
separate suit in another court to recover the stake from S, the advantages of interpleader will
be lost. To avoid such duplicative litigation, it would behoove the interpleader court to issue an
injunction against the claimants, prohibiting them from suing for the stake in another case. In
the federal system, interpleader courts certainly have the authority to enter such injunctions.
2361, which is part of S-interpleader, expressly provides that the federal court overseeing an
interpleader case may "enter its order restraining [the claimants] from instituting or prosecuting
any proceeding in any State or United States court affecting the [stake]."
Note that the language permits the Fed. Court to issue an injunction against claimants from
proceeding either in another Fed. Court or in any state court.8 But 2361 does not apply to Rule
interpleader cases. As to such cases, then, there is no express grant of injunctive power.
What if the overlapping litigation is in a state court? Here, things get more complicated because of
the Anti-Injunction Act, 28 U.S.C. 2283, which provides that a Fed. Court may not issue an
injunction against litigants proceeding in a state court, unless one of three exceptions applies.
Thus, a federal Rule interpleader court can issue an injunction against a pending state action only
if one of the exceptions to the Anti-Injunction Act applies. The exceptions are: (1) when Congress
provides that the Fed. Court may enjoin litigants from proceeding in state court; (2) when an
injunction is "necessary in aid" of the JRX of the court; and (3) when an injunction is necessary to
enable the court to effectuate a judgment it has entered. 17 Courts have concluded that the
second exception applies in R-interpleader cases.
In other words, the Fed. Court in Rule interpleader can issue an injunction "in aid of its JRX,"
because simultaneous litigation in state court would interfere with the interpleader court's efforts
to distribute the stake.
Any injunction prohibiting a claimant from litigating outside the interpleader proceeding must be
properly limited. Specifically, it can only prohibit other claims to the stake itself.
This fact drives home the limitation of interpleader: It is a device for placing in one proceeding
claims to specific property; it is not a device that allows a court to force all potential tort claimants
into a single case.
The interpleader case must involve only claims to the stake.
In cases like Tashire, however, there are more assertions of liability than the mere claims to the fund
of insurance money.
In that case, there were tort claims against Greyhound, Nauta, Glasgow, and Clark. None of these
tort claims constituted property brought within the interpleader proceeding. The interpleader
could determine only who gets the $20K of State Farm insurance money for claims against Clark.
Thus, anyone who had already recovered a judgment against Clark could seek to recover it from
the State Farm fund. Those claims were properly asserted only in the interpleader case. But the
underlying tort claims against Clark (and against the others) are not part of the interpleader
case; quite simply, they are not claims against the stake until one tries to enforce a judgment
against the insurance fund.

E. Invocation of interpleader
interpleader is odd because it reverses the normal role of plain tiff and Dusually, when P sues D,

8 Instead, the injunction is against the claimants personally, forbidding them from litigating in another court. If a claimant violates
the injunction, the Fed. Court issuing it can hold the claimant in contempt, which means that the court can fine that party or even
order her jailed until she agrees to abide by the injunction.

it is to impose liability on D.
In interpleader, however, the stakeholder, as P, sues the claimants not to impose liability on
them, but to force them to assert their claims to the property in the interpleader proceeding. In
essence, she sues them to force them to sue her! She does so, however, because interpleader
allows her to avoid being sued multiple times by the various claimants.
What happens, though, if one of the claimants sues the stakeholder before she institutes
interpleader? Can there be defensive invocation of interpleader? Yes. Let's return to the fact pattern
we saw above, about ownership of the wristwatch found in a house. Here, though, assume that 0 has
sued S, seeking to recover the wristwatch. S is the D, but is also the stakeholder, and wants to
invoke interpleader by bringing C into the case as well, so all the claimants can litigate the
ownership question in a single proceeding. What does she do? She files a compulsory counterclaim
against 0,invoking interpleader and naming 0 as one of the claimants.9 Rule 13(h) permits S to join
as additional parties to the counterclaim any absentee (such as C) who satisfies Rule 19 or Rule 20.10
By definition, absentee claimants in interpleader (here, C) satisfy Rule 19 and thus can be joined
under Rule 13(h).11

F. Stages of Interpleader Litigation and Deposit of Stake or Bond


Assuming the court has PJRX over the parties and SMJRX over the interpleader claim, interpleader
litigation proceeds in two stages.
First, the court determines whether the litigation concerns claims to property that meet the
various requirements for interpleader. If so, the case proceeds to the second stage, in which the
claimants litigate the question of who owns the stake. In true interpleader (where the
stakeholder has no claim to the stake), the stakeholder does not participate in the second stage;
she is discharged from the case at the close of the first stage.
OTOH, if the proceeding is in the nature of interpleader (where the stakeholder claims to own
the property ), the stakeholder will participate in the second stage; she is one of the claimants.
The result of the second stage of the litigation is a judgment as to who the rightful owner is. The
judgment will bind all claimants who were joined in the case.
What happens to the stake during the litigation? Under the statute, the stakeholder must deposit
the stake with the court or post a bond with the clerk of the court.
Indeed, this deposit is a jurisdictional prerequisite, so failure to abide by the requirement
deprives the court of JRX to proceed with S-interpleader.
Rule 22, in contrast, does not require deposit of the stake or of a bond, so such a deposit is not a
JRXal requirement for Rule interpleader. Nonetheless, the court in a Rule interpleader case can
and usually does order the stakeholder to deposit the stake or a bond.
Deposit of the stake with the court is a salutary eventthe property cannot be lost, transferred,
stolen, or squandered while the litigation is ongoing.
It also ensures that the property is present for distribution at the end of the case. Later we will see
that the court's determination of what is to be deposited affects the AIC of the case for JRXal
purposes.
II. INTERPLEADER: JRX and Related Issues
A.The Development of Two Types of interpleader

We have said that there are two types of interpleader in the Fed. Court system: Rule interpleader
under Federal Rule 22 and S-interpleader under 28 U.S.C. 1335, 1397, and 2361.
As we know the federal rules cannot affect the JRX of the federal courtsthus, Rule 22
interpleader can be invoked only if the case brought under it invokes a basis of FSMJRX
usually DJRX and FQJRX.
Very few Rule interpleader cases invoke FQJRXnearly all such cases invoke DJRX (reviewed
below)
Similarly, whether venue is proper is determined for R-interpleader, just as it is for any basic
civil case, under 1391(b).
And, finally, personal JRX over the claimants must be asserted as it would in any DJRX case.
o In sum, then, R-interpleader isfor purposes of JRX, venue, and service of processjust a DJRX
case.
But S-interpleader is a completely different propositionthe three statutes, 1335, 1397, and
2361, respectively
1. Create the claim for interpleader and grant subject matter JRX therefor,
2. Create a special venue provision for S-interpleader claims, and
3. Permit nationwide service of process for S-interpleader cases.
Rule 22 is completely irrelevant to S-interpleader, and S-interpleader is completely irrelevant to
Rule 22.
If a stakeholder proceeds under S-interpleader, she is invoking SMJRX under 1335, and not
under the general DJRX statute, 1332(a)(1).
Now we compare Rule interpleader and S-interpleader in terms of personal JRX, subject matter JRX,

9 The claim against O a compulsory counterclaim because it is against an opposing party and arises from the same transaction or
occurrence as that partys claim. Here, O's claim against S is for ownership of the wristwatch. S's counterclaim is for interpleader as
to the same property; thus, it obviously arises from the same transaction or occurrence as Os claim. We discussed the compulsory
counterclaim earlier. See Fed. R. Civ. P. 22(a)(2): A D exposed to similar liability may seek interpleader through a crossclaim or
counterclaim."

10 Rule 20 concerns permissive joinder of parties. Rule 19 concerns joinder of necessary


parties.
11 An absentee stakeholder satisfied Rule 19(a)(1)(B)(ii) because her nonjoinder subjects a party (the stakeholder) to the possibility
of multiple or inconsistent obligations. As we noted above, if the claimants sue individually, in separate litigation, the stakeholder
may be subjected to inconsistent obligations, such as one judgment that C is the owner and another that 0 is the owner. Avoiding
such potential harm underlies Rule 19(a)(1)(B) and is the basic underlying reason for interpleader.

and venue. Keep in mind that Rule interpleader is simply a DJRX case, while S-interpleader has its
own special provisions for personal JRX, subject matter JRX, and venue.
The aspect of S-interpleader allowing nationwide service of process on claimants is now found in
2361.
In contrast, Rule interpleader does not have its own separate statutory basis for service of
process and personal JRX.
A Rule interpleader case is treated just as any other case in the Fed. Courtthus, PJRX and
service of process outside the state in which the Fed. Court sits are possible only if they would
be proper in a state court there.
o

Trustee holds a fund of $100K, to which there are three claimants, C-1, C-2, and C-3. Trustee
institutes interpleader in Fed. Court in CA. Assume that SMJRX and venue are proper. C-1 is a
citizen of CA and can be served with process there. C-2 is a citizen of AZ but clearly has
sufficient minimum contacts with CA to be subject to PJRX there. C-3 is a citizen of FL and has
absolutely no contact with California.
o If the case is brought under Rule interpleader, the Fed. Court in California will have in
personam JRX (and can serve process outside state lines) To the same extent as a California
state court. Thus, C-1 and C-2 can be brought before the JRX of the court, because they clearly
have sufficient contacts with California. But C-3 cannot be brought before the JRX of the Fed.
Court in California, because she lacks minimum contacts with California. Because a California
state court could not exercise PJRX over C-3, neither can a Fed. Court under Rule interpleader.
o If the same case were brought under S-interpleader, however, C-3 could be brought before the
JRX of the Fed. Court in California. Under 2361, C-3 is subject to nationwide service of process.
Anyone found anywhere in the United States can be served with process for a S-interpleader
proceeding in a Fed. Court anywhere in the country.

B.Subject Matter JRX


Rule 22, like all Federal Rules on joinder, provides a procedural deviceit does not and cannot affect
subject matter JRX requirementsso Rule interpleader is proper only if the case invokes one of the
independent bases of FSMJRX: DJRX, alienage, or federal question.
On the other hand, statutory interpleader has its own legislative basis of SMJRX, separate from the
general grants of DJRX, alienage, and federal question JRX.
C. Federal Question JRX
Whether interpleader arises under federal law can be difficult to assess.
For one thing, as we have seen, interpleader is an odd kind of "claimit is really a device by which
the stakeholder demands that others assert their claims against herso it is tough as a conceptual
matter to characterize whether interpleader involves a federal right.
Moreover, interpleader can present the same problem we encountered with deciding whether
declaratory judgment cases arise under federal law. In those cases, (Chapter 4.6.3), courts look to
whether coercive action by the stakeholder would invoke federal question JRX.
D.SMJRX Based upon Citizenship and AIC
Rule interpleader cases are treated simply as DJRX cases under 1332(a)(1)so all principles about
invoking DJRX, which we discussed earlier, apply in Rule interpleader. Statutory interpleader is a
completely different proposition.
Though as a constitutional matter, the subject matter basis for S-interpleader is DJRX, as a
statutory matter, it does not rely on the general diversity statute, 1332(a)(1).
Instead, 1335 appliesthe requirements for subject matter JRX for Rule and S-interpleader differ
markedly.
E. To Determine Diversity
Rule and S-interpleader differ in two fundamental ways:
A. Whose citizenships are relevant, and
B. What kind of diversity (complete or minimal) is required.
Rule interpleader is just a regular diversity case under 1332(a)(1).
Accordingly, the courts look to the citizenship of the stakeholder, on the one hand, and the
citizenships of the claimants, on the other.
In addition, in keeping with the complete diversity, the stakeholder must be diverse from everv
claimant.
With statutory interpleader, however, 1335 requires only that one claimant be of diverse
citizenship from any other claimant.
In, general, then, the stakeholder's citizenship is irrelevant in statutory interpleaderwe look
only to the citizenship of the claimants.
Moreover, the statute requires only "minimal" diversitythe statute is satisfied if any one
claimant is of diverse citizenship from any other claimant.
o Stakeholder is a corporation, incorporated in DE with its principal place of business in
Illinois. There are four claimants: C-1 is a citizen of Illinois; C-2 is a citizen of Ohio; C-3 is a
citizen of Ohio; and C-4 is a citizen of MN
o This case can not invoke Rule interpleader, because the stakeholder is not of diverse
citizenship from every claimant. Stakeholder is a citizen of Illinois, and so is C-1. Thus,
the case does not satisfy the complete diversity rule applicable in Rule interpleader.
o This case can invoke S-interpleader. The stakeholder's citizenship is irrilevant. So the
fact that Stakeholder and one of the claimants, C-1, are cocitizens (Illinois) does not
matter. In looking at citizenships of the claimants, all that is required is that one be
diverse from at least one other. Here, the stakeholders are citizens of Illinois, Ohio, and
Minnesota, so the requirement is satisfied. The fact that that there are two claimants
who are citizens of Ohio is irrelevant. Statutory interpleader is based upon minimal
diversity; complete diversity is not required.

Statutory interpleader offers considerable advantages (such as JRX based upon minimal diversity,
lower AIC, and nationwide service of process). So why does Rule interpleader ever get used? There is
one fact pattern in which Rule interpleader is possible but S-interpleader does not appear to be.
o Stakeholder is a citizen of Texas. All claimants are citizens of Louisiana. Obviously, this
arrangement would satisfy the citizenship requirements for Rule interpleader, because
Stakeholder is of diverse citizenship from all claimants. But it does not meet the citizenship
requirements for S-interpleader. Why? Because the statute requires at least one claimant to be
diverse from at least one other claimant. Here, they are all cocitizens. So the statute appears
unavailable.
o Suppose, however, on this fact pattern that the AIC requirement for Rule interpleader (in excess
of $75K) is not satisfied, but that the amount requirement for S-interpleader ($500 or more) is
satisfied.
o Stakeholder cannot invoke Rule interpleader here because the jurisdictional amount in
controversy requirement is not met.
o On the face of things, it appears that Stakeholder cannot invoke S-interpleader either,
because there is no minimal diversity among the claimants; all claimants are cocitizens.
o But what if the case involves an interested stakeholder? That is, as discussed above, what if
Stakeholder in this case claims she is entitled to the stake?
F. To Determine the AIC
To invoke diversity of citizenship JRX in Rule interpleader, the AIC must exceed $75K. In Sinterpleader, 1335 requires only $500 or more. The AIC is the value of the stake to be distributed.
G.Venue
1. Rule Interpleader
Again, a Rule interpleader case is treated simply as a "regular" caseeither federal question or
diversity of citizenshipthus, venue is governed by 1391(b).
Those statutes provide for venue, basically, in either of two places: (1) any district where all
the Ds reside or (2) any district in which a substantial part of the claim arose.
As to the second of these choices, there is little meaningful case law guidance on where an
interpleader claim (or a substantial part thereof) arises.
In practice, then, that statutory choice offers no help.
Thus, the stakeholder/P must lay venue in a district where all Ds (claimants) reside.
If they reside in different districts of the forum state, remember, she may lay venue in any of
the districts in which one resides.
Thus, for Rule interpleader, venue can be a significant (and frustrating) restriction. (*Statutory
interpleader cases are brought under 1335.)
o

2.

Stakeholder, a citizen of Iowa, wants to interplead two claimants, C-1, who is a citizen of Illinois
and resides in the Northern District of Illinois, and C-2, who is a citi zt>n of Michigan and resides
in the Eastern District of Michigan. There is no district in which venue is proper based upon the
rcsidc>nce of the Ds. Thev do not reside in the same district, nor do they resid<' in different
districts of the same state. So 1391(b)(1) is not met. And because no one seems to know where
an interpleader claim arises, 1391(b)(2) gives no help.
But let's take a closer look at 1391(b)(2). It also permits venue in a district where "a
substantial part of property that is the subject of the action is situated."
This seems perfectly suited to interpleaderUnder it, in the preceding hypothetical,
Stakeholder could lay venue in the district in which the property is found. If it is movable
property, she can take it to whatever district she prefers for venue. She might, for instance,
lay venue in the district in Iowa in which she resides; certainly that would be most convenient
for her.
This means the stakeholder may manipulate venue. The manipulation does not seem unfair to
the D, however, because the chosen venue must have personal JRX over the claimants.
What if the interpleader is asserted defensively? We discussed this possibility in 13.2. 1.
The scenario is usually this: A claimant sues the stakeholder to recover the stake, and the
stakeholder files a counterclaim against the claimant, to which she joins additional claimants
under Rule 13(h).
How is the venue handled in such a case? Most courts adopt the idea of "ancillary venue" in
such circumstancesas long as venue was proper in the original case by the claimant against
the stakeholder, venue is proper even as to additional claims involving joinder of additional
parties.
Some courts reach this conclusion by noting that the venue statute, 1391, speaks only of the
district in which an action is "brought." Thus, the statute only addresses venue as to the
original claim by the P against the D, and does not apply to subsequent claims involving
additional joinder of parties.
Statutory Interpleader
Statutory interpleader includes its own section for venue1397 provides that venue may be laid
in any district where any claimant resides.
The courts have determined that this provision is exclusive in S-interpleader cases; IOW, 1397
replaces, and does not augment, 1391.
They reason that 1391 provides for venue only in cases in which there is no statutory provision
to the contrary;
1397 provides the contrary legislation. In most cases, the exclusivity of 1397 will not create a
problem, because it is easier to satisfy than 1391(b)(1).
Stakeholder interpleads three claimants, C-1, C-2, and C3. Assume that personal JRX and
subject matter JRX are proper. C-1 resides in the Eastern District of Pennsylvania. C-2 resides in
the Western District of Pennsylvania. C-3 resides in the Northern District of Illinois.
o
If the case invokes Rule interpleader, no district is a proper venue under 139l(b)(l), because

there is no district in which all claimants reside. (The provision in 1391(b)(2) permitting venue
in a district where the property subject to litigation is founddiscussed abovewould provide
venue in this case.
o If the case invokes S-interpleader, venue may be laid against all three claimants in any of three
districts: The Eastern District of Pennsylvania, the Western District of Pennsylvania, or the
Northern District of Illinois. Why? Because 1397 (applicable only in S-interpleader) permits
venue in any district where any claimant resides.
3. Summary
This chart should be helpful in summarizing the major differences between Rule interpleader
(invoking diversity of citizenship JRX) and statutory interpleader.
TYPE
Statutory

PJRX
Nationwide service
of process

VENUE
District where
any claimant
resides

DIVERSITY
Minimal diversity
between any two
claimants

Rule

Same as state
court in state in
which situ- ated;
service per Rule 4

Per
1391(b)
(where D's
residence or
property located)

I In excess of
Complete diversity
between stakeholder, $75K
on one hand, and all
claim- ants, on the
othe-r-

AIC
$500 or more

I. The Class Action

The C-Action permits a representative or multiple representatives to assert or defend against claims
on behalf of a group whose members are similarly situated. Properly executed, class litigation by the
representative(s) will bind all class members.

A. Overview of the C-Action and of Underlying Policy Issues


A C-Action is brought by or against a representative (or multiple representatives) on behalf of a
group.
If it's done correctly, the group is bound by the result of the litigation.
This procedure obviously promotes efficiency because it means that the individual members of the
group do not litigate.
In addition, the C-Action can promote the same policies of avoiding harm that underlie Rule 19.
C-Actions raise significant due process issues, precisely because they do bind persons who are not
technically parties.
In addition, the C-Action is subjet to abuse, and raises significant ethical issues, as we will see.
B. Development of Federal Rule 23
Federal Rule 23 governs C-Action practice in Fed. Courtthe focus is on practicalityon fact
patterns rather than on legal relationships.
The 1966 version of Rule 23 jettisoned the barnacle-encrusted language relating to legal
relationships and provided instead a practical, step-by-step method for analyzing when class
litigation is appropriate. (Restyled in 2007, but not supposed to affect the way the rule operates)
Quick note: it is rare, but possible for defendant class actions, and even plaintiff classes against
defendant classes.
For the rest of the outline however, assume the class in on the plaintiff side unless D c-actions
are specifically mentioned.
C. Class Representatives and Class Member
The person (or persons) suing on behalf of a P class is named as a formal party in the casethus,
she is referred to as the "named representative" or just the "representative."
Because she is a party, all Federal Rules relating to parties apply to herfor instance, only parties
can be required to respond to interrogatories (see 8.2.2). The representative is a party, and thus
must respond to interrogatories.
What about the other class membersare they parties to the case?
The quick answer is noemphasizing this fact, some courts refer to them as "absentee" class
members.
Though they are technically not parties, these class members can be bound by the judgment.
How can that happen? Through representation. Recall from preclusion that a valid final judgment
on the merits binds only those who were parties to the case or who were in "privity" with a party
though "privity" is sometimes difficult to define, it clearly includes the notion of representation.
So a valid final judgment on the merits binds parties to the case and those who were
represented by parties to the casethus, one important focus of the procedural rule concerning
C-Actions is that the members' interests be adequately represented, precisely so they can be
bound by the outcome of the case.
Because class members are not parties, they are not subject to various Federal Rules directed at
partiesfor example, the adverse party has no right to serve interrogatories to class members.
OTOH, the party opposing the class may have a legitimate interest in obtaining information
from class members.
Courts have balanced this need against the fact that a class member is not a party, and have,
on occasion, allowed limited discovery from class members.

Though class members are not parties, they have no license to ignore court orders. In the usual
case, however, class members will not be subjected to discovery requests. They are, in almost
every case, "along for the ride." They are passive.'"'
D. Potential for Abuse
In many cases, class members may feel that their interests have taken a back seat to those of the
lawyers for the classthis fact underscores significant policy issues related to aggregate litigation.
o Suppose a chain of retail stores has been overcharging on some product in violation of some
law. Each customer is overcharged an average of $5. Obviously, if there were no C-Action
device, there would be no civil litigation about this overcharge. Why? Because no individual
customer would sue to recover $5. Even if a particular consumer were overcharged 20 times,
she will not sue for $100; the effort is greater than the return to be gotten. And, obviously, no
lawyer will take the case of a potential P who has been harmed to the tune of $5, or even $100.
o This lack of civil litigation does not necessarily mean that the retail store is "getting away" with
its bad behavior. If the overcharge violates the criminal law or some regulation, there may be a
criminal prosecution or administrative fine. But it is unlikely that there will be any
compensatory damages to the injured consumers.
What happens, though, if we do have a C-Action device, and let's assume that there are 500K
consumers in the same boat. Now as a C-Action, there are 500K class members, each harmed by
an average of $8. In the aggregate, that is a "claim" of $4 million, which is certainly enough to
attract a lawyer to take the case (usually on a contingent fee basis).
This fact leads us to an interesting irony of the C-Action. The device is praised for its efficiency
because it permits one (large) case to take the place of thousands of (smaller) cases. But in
this sort of caseinvolving small claims that no one would bring individuallythe C-Action
creates litigation that otherwise would not exist at all!
Is that a good thing? It depends on one's point of viewif we emphasize the fact that the CAction empowers a group to sue when individually they would not, we might hail the C-Action as
"one of the most socially useful remedies in history."
The Supreme Court has explained: "Where it is not economically feasible to obtain relief within
the traditional framework of a multiplicity of small individual suits for damages, aggrieved
persons may be without any effective redress unless they may employ the class-action device
Pointedly, Judge Posner has said:
The realistic alternative to a class action is not 17 million individual suits, but zero
individual suits, as only a lunatic or a fanatic sues for $30. But a C-Action has to be
unwieldy indeed before it can be pronounced an inferior alternative-no matter how
massive the fraud or other wrongdoing that will go unpunished if class treatment is
denied-to no litigation at all.
OTOH, the C-Action is enormously coercive, even if the claim on the underlying merits is weak.
Precisely because the C-Action permits the assertion of huge potential liability in a sin gle
case, it creates overwhelming pressure on the D to settle.
Rather than proceed to trial and take a chance on losing $4 million in our hypothetical
above, the D might see the wisdom of writing a check to settle the case.
Even a D convinced that it has done nothing wrong will be reluctant to roll the dice and go to
trial with its entire financial future at stake.
In fact, some empirical studies suggest that class claims (at least in certain substantive
areas) are settled regardless of the strength of the class claim on the merits.
Even weak claims may coerce a sizeable settlement out of a D who wants to avoid the
potential devastation of a C-Action judgment. Emphasizing these facts, some decry the
C-Action as "legalized blackmail."
Obviously, neither side has a monopoly on virtuefor us, it is well to keep in mind that the C-Action
is both an important device for achieving justice and a powerful weapon subject to abuse.
But what drives the C-Action?
One possibility is the representative. What is her interest? Though some courts allow the
representative to recover some sort of bonus for vindicating the group's claim, in general there
is no financial reason for the representative to take on the responsibility of the position.
As we see below, she may be required to advance a significant amount of money to give notice
to class members, and in the usual case she does not recover anything other than her personal
damages.
Thus, in our hypothetical, the representative will recover $8 (or whatever her damages were).
Why would anyone take on the responsibilities of class representation to recover that amount?
Usually, the representative is motivated by principleby a desire to 'get justice" for the class.
It is possible, though, that the real moving force behind the C-Action is not the representative at all,
but her lawyer.
Most P C-Actions are taken on a contingent fee basis, which means the lawyer is paid a
percentage of what the class recovers.
This arrangement is praised precisely because it permits prosecution of actions that otherwise
could not be brought if the P had to pay an attorney hy the hour.
But the fee structure may create incentives for the lawyer that can conflict with her professional
duties to her clients.
o For example, suppose D offers to settle the case on terms that include a substantial payment
of attorneys' fees to the class lawyer. Going to trial, however, might lead to a better result for
the class. The lawyer has a conflict of interest and must resist the temptation to put her own
interest ahead of that of the class.
One common contemporary criticism of the C-Action concerns "sweetheart" deals or "coupon"
settlements.
Here, the D offers to settle the C-Action by paying large fees to the class lawyer and to
compensate class members by providing them with coupons for discounts on future purchases of
products from the D.

Class counsel may be tempted by such an offer, because it provides her with a substantial
payment without the risk of going to trial.
The D finds such a deal advantageous, because it avoids both the expense of litigation and the
risk of devastating liability at trial.
The persons whose interests may be lost in the shuffle are the class members, for whom coupons
for discounted products from a D who has wronged them may provide little compensation.
Indeed, it is quite possible that many of the coupons will go unused, which further reduces the
D's ultimate outlay to settle the case. Concern with such settlements underlay passage of the CAction Fairness Act (Discussed below)
E. The Role of the Court
In view of the potential for abuse, who looks out for the interest of the class members?
We are tempted to say that the representative herself is charged with this responsibility.
In reality, though, most class representatives are ill-equipped for the task; they are lay people,
unfamiliar with the law and with civil procedure.
The only person who can protect the class from overreaching by lawyers is the court
the judge who oversees the C-Action.
Rule 23(e) provides that no certified C-Action may be settled or voluntarily dismissed without
court approval.
For present purposes, it is sufficient to note that the court is responsible for protecting the class
members from an unscrupulous deal.
II. Due Process: How Can Class Members Be Bound by a Class Judgment?
Due process permits a class judgment to bind class members only if they are members of the same
class as the representativestated another way, if the representative and the class members disagree
on the key issue in the litigation, they are not members of the same class; the representative cannot
represent people who disagree with her on that key issue.
In Hansberry, the disagreement was clearthe representative in Burke u. Kleiman wanted to
enforce the covenant and thus could not be allowed to bind those homeowners who opposed the
covenant.
Importantly, Hansberry does not stand for the proposition that there can be no disagreement
between the representative and class membersthere may be disagreements on matters of
strategy and remedy.
However, so long as the class members and the representative are united on the core issues in
litigation, there will be no constitutional problem with the judgment's binding all class members.
Thus, class members can be bound if they are adequately represented. They do not need to be
joined as parties.
But do they need to be given notice of the proceeding? Hansberry says nothing about it.
The later case of Mullane v. Central Hanover Bank 86 (see 3.2) held that nonparties can be
bound if given appropriate notice of the proceeding. Mullane did not involve a C-Action, but
concerned numerous beneficiaries to a pooled trust. The Court concluded that "notice reasonably
certain to reach most of those interested in objecting is likely to safeguard the interest of all,
since any objection sustained would inure to the benefit of all.
Do Hansberry and Mullane together require that class members in a C-Action be adequately
represented and be given notice of the proceedings?
Apparently not. As we see below, Rule 23 requires notice of the pendency of the C-Action in only
one of three types of C-Action.
In all class cases, however, the representation must be adequateso the drafters of the Rule
seem to have concluded that, at least in some types of C-Action, adequate representation
(without notice) satisfies due process.
III. Prerequisites of Any C-Action Under Rule 23(a)
Rule 23 prescribes specific factors for determining at the outset whether a case should proceed as a
C-Action. (Satisfaction of the requirements of Rule 23 will avoid constitutional problems)
A class action is commenced like any other caseby filing a complaintthe class representative's
complaint contains all the elements of any complaint under Rule 8(a).
In addition, she alleges that the case is brought as a C-Action, and usually states that she is suing
"on behalf of a class of persons (or entities) similarly situated."
In the complaint, the representative will define the classas we see below, it is important that
the definition strike the court as a manageable group.
There is no need to list the individual members of the class. (Indeed, in many cases t hat would
be impossible.)
At this point, the case is merely a "putative C-Action" and the group is merely a "putative class."
The case does not become a class action until the court enters an order "certifying" it as such.
Thus, at some point after filing the case (and after the D has responded to the complaint), the
class representative will make a motion to certify the case as a C-Action. We discuss this
process and the court's role in detail below.
The focus in the motion to certify will be whether the class (1) satisfies the prerequisites of a
class in Rule 23(a), and (2) falls within one of three types of classes recognized in Rule 23(b).
We discuss the prerequisites in this section and the types of classes later.

A. Implicit Requirement of a "Class"


Before listing four express prerequisites, Rule 23(a) refers to the existence of a "class."
The wise lawyer will be aware of the need to convince the courtas a practical matterthat a
''class" does indeed exist.
In her complaint and in the motion to certify the class 12, then, counsel will avoid defining the
group in open-ended terms, such as people "interested in peaceful political discussion" or by
subjective intent, such as "those people who were eligible to apply for aid but who were
dissuaded because of the relevant agency's treatment of others.
If the class prevails, or if the C-Action is settled, the court will have to determine who will
receive what remedy.
The prudent lawyer will continually assure the judge that this will be a manageable task.
The first opportunity to do this is in the complaint, and counsel will do well to impose reasonable
temporal and geographic limitations on the class.
There is no need to name each class memberdefining the group by salient characteristics is
sufficient.
For example, in a securities fraud case, the class might consist of "all persons who (or entities
which) purchased common stock of the XYZ Corporation after June 15, 2013, and before
September 30, 2013.
Depending on the size of that group, the lawyer might consider circumscribing the class to
purchasers of the stock who reside in a particular state or region.
The idea is to reassure the judge that if the court eventually has to distribute a remedy, it can
find the people who should get it.
We see below that there are different types of C-Actionsone typeunder Rule 23(b)(3)requires
that the identifiable members of the class be given individual notice of the pendency of the case.
That type of C-Action usually involves claims for monetary reliefin such cases, because the
court will need to give individual notice and (if the class wins) to award money to the various
class members, the court will expect especial specificity in the class definition.
In contrast, another type of C-Actionunder Rule 23(b)(2)involves claims for injunctive or
declaratory reliefbecause there is no requirement of notice to individual members of such a
class, or to find and distribute damages to individuals, courts require relatively less specificity in
defining a class in such cases.
Can a class include future members? That is, can a C-Action seek recovery on behalf of those
who, while not yet injured, will be injured in the future?
The answer is yes, but in limited circumstances. Inclusion of future members is possible but
somewhat rare; it is proper only when the group is well defined, relatively small, and discrete.
B. The Four Express Prerequisites
Assuming the existence of a "class," Rule 23(a) sets forth four prerequisites, usually referred to,
respectively, as "numerosity," commonality, typicality, and adequacy of representation.
Though all four should be addressed in any case, they are not hermetically sealed from one
another.
Indeed, there is a good argument that the four can be collapsed into two: numerosity and
adequacy of representation.
The party seeking certification has the burden of persuading the court that all requirements are
satisfied.
1) Rule 23(a)(1): Numerosity
This word (if it is one) does not appear in Rule 23; courts made it up to cover the requirement in
Rule 23(a)(l) that the class be "so numerous that joinder of all members is impracticable."
This requirement ensures that the C-Action is necessaryif the number of class members
involved is low enough that joinder would be practicable, a C-Action simply is not needed; the
affected persons can join as co-Ps under Rule 20(a)(1).
Whether a proposed class satisfies Rule 23(a)(1) involves a case-by-case analysis.
One factor, of course, is the sheer number of putative class members.
Some classes are so large that numerosity is obviousfor example, some classes have
many hundreds or thousands (or even millions) of memberssuch large groups generally
pose no numerosity problems.
When is numerosity not obvious'? Most courts agree that there are no automatic rules and
there is no magic number.
Some, however, have espoused this rule of thumb: Generally, fewer than 50 members is
insufficient, more than 100 members is sufficient, and the range in between varies depending
upon other factors.
Again, however, this is at best a general rule, and there are cases in which courts have
certified classes with fewer than 21 members and cases in which courts have denied
certification of classes with scores of putative members.
Such cases often demonstrate the importance of factors other than the raw numbers.
For instance, geographic dispersion of class members is relevantin one case, the court
rejected class status for 350 political subdivisions of a state because the members were not
geographically dispersed and could join in a single case in which a state officer could
represent them all.
OTOH a relatively small group might be seen as numerous if the members are geographically
wide spread, since joinder would be relatively more difficult.
We see below that, for DJRX purposes, the court looks only to the citizenship of the class
representative, not all the class members.
If joinder of the individual members would make it impossible to satisfy the complete
12 P must define the class in the complaint, and will do :m again in the motion for certification. Often, these definitions will differ.
because in the interim ( perhaps because of discovery) the class lawyer may have learned something that makes the class definition
more definite. From the outset. thuugh -starting with the complaint-it behooves the class lawye:r tu define the class in a way that
convince the judge that the case will be manageable.

diversity rule, joinder is arguably impracticable.


Another relevant factor is the ability of members to pursue individual litigation.
If individual claims are so small that members would not be expected to pursue them, joinder
may be seen as impracticable.
The Supreme Court recogrnized this possibility in Phillips Petroleum Co. v. Shutts, a case
involving a class of claimants whose claim averaged $100; the Court explained "most of the
Ps would have no realistic day in court if a C-Action were not available
The court may consider other issues that affect an individual's incentive or ability to pursue
individual litigation.
In one case, for instance, the court concluded that a class of 19 was proper, in part because
the individuals would be too intimidated to bring individual discrimination claims.
Similarly, factors such as limited financial resources, mental disability, or inability to speak
English may render joinder impracticable."'''
2) Rule 23(a)(2): Commonality
Rule 23(aX2) requires that there be "questions of law or fact . . . common to the class."
Though the rule uses the plural word "questions," courts have long agreed that a single common
question is sufficient.
In Wal Mart Stores v. Dukes the Court reversed the Ninth Circuit, which had upheld a class
of potentially 1.5 million members. The class consisted of female employees of Wal-Mart, and
alleged gen der discrimination in violation of Title VII. Wal-Mart gives managers great
discretion in setting pay (within ranges) and awarding promotion. Ps asserted that this
discretion is exercised disproportionately in favor of men, which causes an unlawful disparate
impact on women employees. They sought injunctive and declaratory relief, punitive
damages, and back pay. The Court held, five-to-four, that the class failed to satisfy the
commonality requirement of Rule 23(a)(2). (The Court also held (unanimously) that the class
could not be certified under Rule 23(bl(2), which we discuss in 13.3.4.)
The majority in Dukes recognized that Rule 23(a)(2) requires only a single question of law or
fact in common to the class, but held that there was nonesaying that all Ps suffered a
violation of federal employment law was insufficient, because that law can be violated in
different ways. Rather, the members must have suffered the same injury, so "their claims can
productively be litigated at once."
The substantive law required a showing of a general policy of discrimination.
Though the Ps alleged such a policy, the Court concluded that they had no proof to justify
certification.
Ps presented the "social framework" analysis of a sociologist, who concluded that Wal-Mart's
structure and corporate culture made it "vulnerable" to "gender bias."
The expert conceded, however, that he could not calculate what percentage of employment
decisions might be affected by "stereotyped thinking."
Accordingly, the majority concluded, a court "can safely disregard what he has to say.
Note, then, that the Court required evidence supporting the Ps' contention that they satisfied
the prerequisites of Rule 23(a).
Indeed, the Court held, a party seeking class certification must proffer "convincing proof" that
the requirements are met.
Ps likewise failed in their attack on the Wal-Mart policy of allowing local managers to exercise
discretion over pay and promotionhere, they failed to identify a "common mode of exercising
discretion that pervades the entire company."
Because they could not show an employment practice that "ties all their 1.5 million claims
together," Ps failed to demonstrate the existence of a common question under Rule 23(a)(2).
"Without some glue holding the alleged reasons for all those decisions together, it will be
impossible to say that examination of all the class members' claims will produce a common
answer to the crucial question why was I disfavored."
Anecdotal evidence did not suffice; Ps provided only one affidavit for every 12,500 class
members, relating to only 235 of the 3,400 Wal-Mart stores. "[A] few anecdotes selected from
literally millions of employment decisions proves nothing at all.""'
Dukes is an important casewhile its holding that a Rule 23(b)(2) class was inappropriate
(discussed in 13.3.4) was unanimous and seems unexceptional, its five-to-four holding that
the class failed to meet Rule 23(a)(2) is a blockbuster.
Again, very few cases ever discussed this requirement in any detail. Dukes is destined to lead
to increased litigation over the issue of simple commonality.
3) Rule 23(a)(3): Typicality
Rule 23(a)(3) mandates that the representative's claims be typical of those of the class.
This factor is closely related to the next, which is that the representative fairly and
adequately represent the class.
Both requirements focus on the relationship between the class members and their
representative.
The function and goal of the C-Action is to bind the entire class to the judgment obtained by the
representative.
As discussed in 13.3.2, this cannot be accomplished, as a matter of due process, unless the
representative adequately represents the interests of the class members.
The requirement that the representative's claim be typical of the claims of class members
helps to ensure adequate representation.
If the representative has suffered a similar harmif she can "feel the pain" of the class
membersit is more likely that her representation will be adequate. Stated another way,
without a typical claim, it is difficult to see what incentive the representative would have to
assert the class claims vigorously.
Rule 23(a)(3) does not require that the representative's claims be exactly the same in all
particulars as those of class members.

Instead, courts focus on the "essential characteristics" of the claims and recognize that minor
factual differences, even as to damages, will not make class treatment improper.
Obviously, though, if the class members' claims will require a high degree of individualized
proof, class treatment is not appropriate, and the representative's claim will not be typical of
those of the group.
o Retail Store engages door-to-door salespeople to sell refrigerators. Fifty salespeople go to
various neighborhoods and enter into discussions with residents, during which they offer to
sell the refrigerator on discount if the person agrees on the spot. About 200 people agree to
buy and make the require payment, and Retail Store never delivers the refrigerators. In a CAction for common law fraud, one serious problem will be the substantive requirement of
showing a misrepresentation of fact by the defendant. If each representation by a salesperson
to a prospective purchaser was unique, a C-Action would seem impossible, because nobody's
claim would be typical of anyone else's claim. But if Retail Store provided its sail's force with a
standard sales pitch to be memorized and delivered to each person, a C-Action might be
possible. In such a situation, the misrepresentations would have been identical, even though
each conversation was slightly different.""
Beyond this, it is important that the representative suffer the same general kind of harm suffered
by the class.
o The class consists of Mexican American persons who applied for employment with D. They claim
that D refused to hire them on the basis of their national origin. Representative is a Mexican
American who is employed by D, but who claims that D refused to promote him because of his
national origin. Representative cannot represent the class, because be did not suffer the same
harm. While both he and the class assert that they were hurt by D's discriminatory behavior,
they were hurt in different ways. The class members were never hired. Representative was hired
(but not promoted), and thus his claim could not be typical of those of the class members.
Moreover, the fact that a representative is subject to a defense that class members generally are
not may preclude a finding of typicality (or adequacy of representation).
1) The existence of such a defense will require litigation unrelated to class interest, and may
distract the representative from prosecuting the class claim.
2) For example, in one case, the fact that the representative bought certificates of deposit from
the D after the alleged fraud was uncovered subjected it to a unique defense and defeated
typicality. Similarly, the fact that the representative of a class of prostitutes was subject to
deportation (and other class members were not) defeated typicality.''"
3) It is also important that the representative suffered a typical harm at the hands of the same Ds
as the class members.
o Hypo: The class consists of persons in a city who did business with pawn shops that allegedly
violated federal truth-in-lending laws. There are five defendant pawn shops, joined under Rule 20(a).
The representative, however, dealt only with one of the Ds. The fact that she was not harmed by the
other four pawn shop Ds means that her claim is not typical of the class members, who dealt with the
other four. She did not suffer at the hands of those other four and cannot represent persons who did.
There are three ways around this problem:
i.
The case may be structured with multiple representatives, one having dealt with each of the
Ds. Then the representative who dealt with D 1 has a claim typical of all class members who
dealt with D 1, the representative who dealt with D 2 has a claim typical of all class members
who dealt with D 2, and so forth. This solution will not work, however, if there are too many Ds
for practicable joinder. In such a situation, however, the case might be structured with a D
class; if certified, the representative D will represent all Ds, who will then be bound by the
judgment Gust as P class members are bound by the judgment).
ii.
If the Ds had engaged in a conspiracy to violate the truth-in-lending laws, the representative
need not have had deal ings with each D. The idea here is that each class member, including
the representative, was harmed by the concerted efforts of the Ds; thus, one person so
harmed can speak for others so harmed."'
iii.
It is possible that members of a class have a juridical relationship that enables the court to
conclude that one may speak for and bind the others. The term is not well defined, and seems
limited to persons who occupy coordinate governmental positions. For example, in one case,
Ps sued a class of D jailers, who allegedly segregated prisoners unconstitutionally. Though the
Ps had not dealt with each jailer, all the D class members were officers of a single state. Their
juridical relationship meant, in essence, that a P who had deal t with one could assert a claim
against all.
4) Rule 23(a)(4) (and Rule 23(g)); Protecting the Class Interests
Rule 23(a)(4) requires that the representative "fairly and adequately protect the interests of the
class.
This is the linchpin for assuring that the class members can be bound consistent with due
process.
This factor overlaps greatly with the Rule 23(a)(3) requirement of typicalityindeed, some courts
treat the two as virtually interchangeable.
While recognizing overlap between the two, it is important to see, however, that certain factors
must be addressed under Rule 23(a)(4). Though that Rule refers only to adequacy of the
representative, we will see in 13.3.5 that the court must appoint class counsel (under Rule
23(g)), who is also charged with providing fair and adequate representation for class members'
interests.
In contrast to class counselwho, under Rule 23(g)(2), must be the applicant "best able to represent
the interests of the class"there is no requirement that the class representative be ''the best"
available.
Rule 23(a)(4J requires "adequate" protection of the class intereststhe representative owes a
fiduciary duty of loyalty to the class.

At a minimum, her interests cannot be antagonistic to those of the class.


Mere differences of opinion concerning litigation strategy will not defeat class certification
rather, a disqualifying conflict is one that relates to the core subject of the case and is
immediate, not speculative.
As we noted above in discussing typicality, a representative may not be adequate if she is subject to
a unique defense, one not avail able against class members generally.
Similarly, if the representative's credibility is subject to legitimate attack, the court may find her
inadequate.
In addition, some courts have found a representative inadequate if she has a close personal,
business, or familial relationship with the class lawyer
In such a case, the representative might be tempted to approve settlement on terms favorable
to the lawyer and relatively less favorable to the class members.
The class representative must litigate with vigor.
Courts generally recognize, however, that the representative is rarely a lawyer, and cannot be
expected to have detailed knowledge of the law.
At some level, however, the representative must have at least some rudimentary understanding
of the nature of the disputeotherwise, she cannot serve as a brake on the actions of the class
counsel.
If the representative is wholly clueless on such things, the class is essentially "headless."this
robs members of a measure of representation and essentially permits suit by the lawyer, who
lacks standing to bring the claim.
Ds also often challenge a class representative by pointing to her lack of financial ability to prosecute
the litigation. Many lawyers take P C-Actions on a contingent fee basis, so the representative need
not pay attorneys fees as the litigation proceeds.
But the representative must pay various costs of the litigation as they are incurred. For example,
there are filing fees, witness fees, and costs of discovery.
In a C-Action under Rule 23(b)(3), as we see in 13.3.4, the representative must pay to give the
required notice to class members. If the litigation is successful, the losing side generally will have
to pay the prevailing party's costs. In the interim, however, the representative must bear the
expenses as they are incurred. The court must be convinced that the representative can finance
this aspect of the litigation.
Can the class counsel advance money to the representative to pay these expenses? Historically, the
answer was yes, so long as the rep resentative agreed to reimburse the lawyer if the class lost the
litigation. More recently, led by Rule l.8(e) of the American Bar Association Model Rule of Professional
Responsibility, some states permit the lawyer to advance expenses on a contingent basis.
That means that the client repays the lawyer for these costs only if the class recovers some
remedy. C-Action Ps' lawyers like this provision because it makes it easier for them to enlist
representatives. On the other hand, there is a concern that absence of a requirement that the
client reimburse the lawyer for these costs allows the lawyer to "buy" a class claim.
Of course, Ds cannot get lawyrs to work on a contingent fee. They pay their lawyers by the hour.

C. Types of C-Actions Recognized Under Rule 23(b)


Assuming the party seeking certification convinces the court that the prerequisites of Rule 23(a) are
satisfied, that party then must demonstrate that the case fits within one of the types of classes
recognized by Rule 23(b).
Thus, under Rule 23(b), there is a choice; the party seeking certification need satisfy only one of
the types of classes recognized.
On the other hand, nothing in Rule 23 precludes the representative from seeking certification
under more than one type of C-Action, and some parties do seek certification under more than
one type.
1) Rule 23(b)(1): The "Prejudice" C-Action
Reading Rule 23(b)(1) will remind you of Rule 19(a)(1)(B)the Rules Advisory Committee amended
the two (along with Rule 24(a)(2)) together in 1966 expressly to emphasize their similarities.
We saw that Rule 19(a)(1)(B) mandates the joinder of an absentee in either of two situations: (1)
when nonjoinder of an absentee might subject the absentee's interest to practical impairment or
(2) when nonjoinder of the absentee might subject the D to the risk of incurring multiple or
inconsistent obligations. (In both instances, the absentee must claim an interest in the
litigation.)
Rule 23(b)(1) addresses the same potential harms, but in the class context, where there are so
many absentees that their joinder is not feasible.
Just as Rule 19(a)(1)(B) consists of two subparts, so does Rule 23(b)(1). Because the Rule is
concerned with avoiding potential prejudice (either to the absentees or to a party), we can
refer to the Rule 23(b)(1) classes as "prejudice" C-Actions.
These are "mandatory" classes, because members have no right to request exclusion.
Rule 23(b)(1)(A) permits a C-Action if individual suits "would create a risk of inconsistent or
varying adjudications with respect to individual class members that would establish
incompatible standards of conduct for the party opposing the class."this is the class
analog to Rule 19(a)(1)(B)(ii); the focus is on the impact of nonclass litigation on the party
opposing the class.
Assuming a P class, the focus thus is on the D.
The court asks this question: If the putative class members sue individually (not in a
class), might it subject the D to incompatible standards of conduct?
o Stockholders of a corporation claim that the corporation must convert their stock from one class to
another. If the stockholders sue individually, some may win and some may lose, which would leave
the corporation uncertain as to how to treat this class of stockholders. To avoid that potential
uncertainty, a stockholder may sue on behalf of the other stockholde'rs under Rule 23(b)(1)(A)
As we saw with Rule 19, inconsistent outcomes in damages claims will not satisfy Rule 23(h)(1)
(A), because such inconsistent claims do not constitute "incompatible standards of conduct."

A train operated hy TrainCo crashes and injures 120 people. If the 120 people sue individually,
some may win and some may lose. This possibility does not satisfy Rule 23(b)(1)(A), however,
because the individual cases against TrainCo will not subject it to incompatible standards of
conduct. There is nothing incompatible in this sense between writing a check to one passenger
and not to another.
The focus here as in Rule 19(a)(l)(B)(ii)-is on the effect of individual litigation on the ways in
which the D must do something in the real world.
In the first hypothetical above, for example, individual litigation might leave the corporation
subject to orders (1) that this class of stock be converted into another class of stock and (2)
that this class of stock not be converted into another class of stock.
The corporation could not satisfy one without violating the other.
In the TrainCo hypothetical, in contrast, there is no comparable inconsistency in having to pay
a judgment to one passenger but not to another.
Rule 23(b)(1)(B) provides for a C-Action if individual suits "would create a risk of adjudications with
respect to individual class members that, as a practical matter, would be dispositive of the interests
of the other members not parties to the individual adjudications or would substantially impair or
impede their ability to protect their interests."
This is the class analog to Rule 19(a)(1)(B)(i); the focus is on the would-be class members.
The court asks this question: If the putative class members sue individually, might some be
harmed as a practical matter?
Such harm might be caused by the fact that there is a limited fund from which all class members
can recover.
Individual actions might deplete the fund, leaving some essentially without a remedy.
Everyone seems to accept the theory behind these "limited fund" classes. Courts take different
approaches, however, about the degree of proof required to invoke Rule 23(b)(1)(B).
o

Hypo: A fire raged through a crowded dinner theater and killed over 100 people. Based upon
litigated claims for wrongful death in the area. the judge estimated that the total liability, though
not precisely subject to calculation before trial, could exceed $16 million. In addition. Ds' lawyers
estimated that the Ds had a net worth of approximately $3 million. Based upon these estimates,
the court certified a Rule 23(b)(l)(B) class, because it found "good reason to believe" from these
estimates "that total judgments might substantially exceed the ability of defendants to respond."
Notice the reason for invoking Rule 23(b)(1)(B)if the claimants sued separately, according to
the court, they would likely recover judgments totaling $16 million, but the pool of assets from
which those judgments could be satisfied totaled only $3 million.
If the litigations proceeded individually, the first few successful Ps would exhaust the $3
million13.
That scenario would prejudice those plaintiffs who were not first in the litigation linethose
whose cases went to trial later might win, but the victory would be hollow, because the Ds at
that point would have no assets from which the judgment could be satisfied.
To avoid that harmto avoid the possibility that "individual actions would as a practical matter
be dispositive of the interests of the other[s] not parties . . . or substantially impair their ability
to protect their interests"the group may proceed as a C-Action.
In that way, each member will receive a proportional part of what money there is. Instead of
some Ps recovering their full damages and many recovering nothing, this theory would allow all
Ps to recover a percentage of their damages.
*Remember the class is here is mandatorymeaning they can not opt out or request to be
excluded w/an opportunity to litigate an individual claim.

2) Rule 23(b)(2): Injunctive or Declaratory Relief


The Rule 23(b)(2) C-Action is appropriate when the party opposing the class (usuallv the D) "has
acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or
corresponding declaratory relief is appropriate respecting the class as a whole."
Thus, there are two requirements: one relating to the action or inaction of the party opposing the
class and one relating to the relief sought by the class.
It is a "mandatory" class, meaning that members have no right to request exclusion.
Typical C-Actions under Rule 23( b)(2) deal with employment discrimination or with claims to
restructure public institutions.
Each of the following examples would be appropriate under Rule 23(b)( 2).
o A group of workers claims that Employer has denied them promotion because of their national
origin, in violation of federal law. They seek an injunction compelling Employer to promote them
(or a declaratory judgment that they are entitled to such relief).
o A group of pretrial detainees ( persons charged with a crime and in cus tody while awaiting trial)
claims that Sheriff is denying them "contact" visits from family members, in violation of the
Constitution. They seek an injunction ordering Sheriff to permit such visits (or a similar declaratory
judgmentjudicial decree of the rights of the parties).
At this point, we might ask: Why go to the trouble of a C-Action in such cases? Why not just
have one person from the affected group sue? If she proves that Employer is discriminating
against a group of workers on the basis of national origin and wins an injunction against such
discrimination, won't all the affected workers "win"?

13 Not only that, but the net worth of the Ds would be eroded further by the attorneys
fees and other litigation expenses from over 100 separate case. By the way, notice how
this fact pattern could raise issue preclusion concerns. If the first plaintiff won, and
established at trial that the defendants negligence caused the fire, could successive
plaintiffs take advantage of that finding? The answer might be yes, if the applicable law
adopted nonmutual offensive issue preclusion.

The answer may be no. Suppose one P brings the suit and wins. The result is an injunction
ordering Employer to promote P, including, let's say, some broad language about not
discriminating against the group on the basis of national origin.
Now Employer promotes P but continues to discriminate against the other members of that
group. Can they sue to enforce the injunction against the Employer?
Probably not, because they were not parties to that case, nor were they represented by P
(because it was not a C-Action).
Accordingly, those people cannot enforce the judgment.
A class judgment, in contrast, will permit any member of the class to enforce the injunction
against Employer.
So if the class sues and wins, and Employer later continues to discriminate against a member
of the class, the member can ask the court to hold Employer in contempt for violating an
injunction entered in favor of all class members.
Rule 23(b)(2J speaks only of injunctive and declaratory relief, but through the years, some courts
permitted Rule 23(b)(2) classes to recover money, at least in limited circumstances.
Specifically, these courts permitted recovery of damages if they (1) "flowed automatically" from the
grant of injunctive or declaratory relief and (2) were readily calculable.
The most common example was an award of back pay:
o Suppose the class being discriminated against on the basis of national origin, noted above,
wins an injunction requiring Employer to promote them. That order avoids future harm to the
class members by ordering Employer to do what the law requires.
But what about the past discrimination? After all, the class members were denied their
rightful promotions for some time and thus were underpaid over that period. Recovery of
damages for the past discrimination will remedy that harm. Some courts permitted such
recovery in the Rule 23(b)(2) class.
1. The damages for past harm flow automatically from the injunction; the injunction puts
the class members at the proper pay level, but they were denied that pay level before
the injunction.
2. The damages are easily calculated; the court can simply apply a formula based upon
the difference between the two pay grades and the length of time each was
discrminated against.
This result is obviously efficient, allowing equitable and legal relief in a single case.
But the result is also worrisome. Why?
Rule 23(b)(3), which we see below, has always been seen as the primary vehicle for
classes seeking recovery of money, and Rule 23(b)(3) provides safeguards not provided in
Rule 23(b)(2)specifically, members of a Rule 23(b)(3) class are entitled to notice that
they are in the class and have a right to opt out (and sue on their own).
Folding damages into a Rule 23(b)(2) class robs the class members of that protection,
because 23(b)(2) is a mandatory classthere is no right to opt out.
So most courts limited monetary recovery in 23(b)(2) classes to claims for back pay
courts routinely spoke of back pay as an "equitable" remedy, to justify its recovery in a
Rule 23(b)(2) class.
Some courts went beyond this, and permitted recovery of individual damages in a Rule 23(b)(2) class
they attempted to justify the result by pointing out that the case was "predominately" about
equitable relief.
The Supreme Court unanimously rejected this practice in WalMart u. Dukes. (Above)
In rejecting the Rule 23(b)(2) class, the Court emphasized two points.
1. The injunctive or declaratory relief sought must be the same for each class memberthe
Rule "does not authorize class certification when each individual class member would be
entitled to a different injunction or declaratory judgment against the D.
In other words, a class action cannot be used to vindicate unique individual equitable
claims.
2. Rule 23(b)(2) does not authorize a C-Action when "each class member would be entitled to
an individualized award of monetary damages. This is true even if the award is of back pay,
notwithstanding that back pay may be considered "equitable" relief. Rule
23(b)(2) does not speak of equitable relief, but of injunctive and declaratory relief.
Beyond this, the Court hinted that due process requires that class members be given notice and
the right to opt out of any class action seeking monetary relief.
After Dukes, then, it is difficult to imagine that a Rule 23(b)(2) class will be permitted to seek
monetary relief
The Rule 23(b)(2) class must seek a single, class-wide injunctive or declaratory remedy.
Finally, most courts conclude that 23(b)(2) generally cannot be used for a D class. (based on the
language of the rule)

3) Rule 23(b)(3): Common Questions Predominate


A C-Action under Rule 23(b)(3) is appropriate when (1) common questions pre dominate over
individual questions, and (2) the C-Action is superior to other means of adjudicating the dispute.
Though the Rule does not require that the class seek any particular form of relief, Rule 23(b)(3) CActions usually (but not always) involve claims for damages.
The Rule 23(b)(3) C-Action is more controversial than the others.
Classes certified under Rule 23(b)(1) and (b)(2) tend to involve fairly cohesive groups, simply
because of the nature of the actions.
Under Rule 23(b)(1), the class members are so closely related that adjudication of their claims
individually will subject someoneeither the D or the other class membersto some sort of
harm.
Classes under Rule 23(b)(2), by definition, involve members who have been subjected to the
same treatment by the D.

In contrast, the Rule 23(b)(3) class is held together only by common factsfrequently, the
class members just happened to be in the same place at the same timeperhaps travelers on
an ill-fated flight or investors in an ill-fated venture.
If they sued individually, the fact that some would win and others would lose would create none
of the problems that underlie the need for the class action under Rule 23(b)(1) or (b)(2).
Because the Rule 23(b)(3) class tends to be a disparate group, the drafters imposed special
procedural protections, which we address in 13.3.6
1. The court must give notice to all class members of the pendency of the C-Action, including
individual notice to those who can be identified with reasonable effort.
2. Class members have the right to "opt out"to leave the C-Action and proceed on their own (or,
perhaps, decide not to sue).
These protections are required only in the Rule 23(b)(3) C-Actionin Wal-Mart v. Duke
(discussed above regarding the 23(b)(2) C-Action), the Court hinted that notice and the right to
opt out are constitutionally required in classes seeking monetary relief.
In this subsection, we focus on the two requirements for certifying a Rule 23(b)(3) class.
A. The Need for Predominant Common Questions
We know from Rule 23(a)(2) that all C-Actions have common questions; the existence of
common questions among all class members is part of the definition of the class itself.
In the Rule 23(b)(3) class, it is not enough simply to have common questions; instead, the
"questions of law or fact common to class members" must "predominate over any questions
affecting only individual members."
This requirement does not mean that the class members must share every issue in the case
indeed, it is hard to imagine a case in which every issueof causation, harm, and
damages, for instancewill be identical to all class members.
In the 1980s, as courts became increasingly crowded with mass tort litigation, many judges
demonstrated creativity in adapting the Rule 23(b)(3) C-Action to mass tort situationsdoing so
was relatively easier in cases involving a single cataclysmic event.
o An explosion of a gas main in an office building injures scores of people. All were hurt at the
same time in the same general locale by the same thing. Thus, litigation en masse of many
issues-including causation and other questions related to liability-would be economical. The
individual damages suflcrcd by each class memberwhich might vary radicallycan be left
to individual proceedings.
The requirement of predominant common questions seems more difficult to satisfy in toxic
torts and other cases involving harm suffered at different places and at different times. For
instance, (full example on pg. 799)
B. Superiority of the C-Action
The second requirement for certification of a Rule 23(b)(3) class is that the C-Action be
"superior to other available methods for fairly and effectively adjudicating the controversy."
The Rule lists four nonexclusive factors to aid in the assessment. As a review of the factors
reveals, the drafters clearly intended to force the judge to consider whether any other tools
joinder, multidistrict litigation under 1407, consolidation, etc.might be more readily
managed than the C-Action.
Obviously, the C-Action will not always be easy to manage and administerit just has to be
better than the other options. ,
Just as obviously, the two requirements for a Rule 23(b)(3) class are closely related.
If common questions do not predominate, manageability suffers; if the class can be defined
with sufficient narrowness so that the common questions predominate, it might be relatively
easy to manage.

D. Filing and Certification of a C-Action (and Possible Appellate Review of the


Certification Decision)
1. Putative and Certified Classes
Solid ReviewWe noted earlier that a C-Action is started by filing a complaint in which the
representative purports to sue on behalf of a class. At this point, though, it is merely a "putative"
class. The case generally is not considered a C-Action until the court "certifies" it. Under Rule 23(c)
(1)(A), the court must make the certification determination "(a]t an early practicable time." The
parties may have to undertake discovery to determine whether the requirements for class
certification have been met. The representative may determine during this interval that the class
definition set forth in the complaint can be honed or refined in ways to increase the likelihood that
the court will grant certification: it is common for the class definition in the motion to certify to
differ from that set forth in the complaint.
When the representative moves for class certification, she and the D will brief the certification
issues for the court, and the court undoubtedly will entertain oral argument on the motion.
The question for the court is whether the P has demonstrated that the case satisfies the
prerequisites of Rule 23(a) and fits one of the types of classes recognized in Rule 23(b).
The certification decision is usually the watershed event in the litigationif the court certifies the
class, the D's incentive to settle the case will raise exponentially because the D now faces
potentially enormous liability.
On the other hand, if the court denies certification, all that remains is the representative's individual
claim.
If that claim is sizeable, that individual litigation will proceed.
If,however, the class was to have consisted of numerous persons who suffered relatively small
harm (such as in a typical consumer C-Action), the case will probably be dismissed voluntarily;
nobody will litigate over a few dollars.
Accordingly, the motion for certification usually is the real battleground in the litigationthe
parties throw significant resources into litigating the certification motion.

2. Possible Appellate Review of the Certification Decision


The court's determination of whether to certify the class is not a "final judgment," however,
because it does not conclude the trial court's assessments of the merits of the caseaccordingly,
there is no right to appeal that decision
Because the order is of such practical importance, however, courts of appeals long struggled to
find some exception to the "final judgment rule" to permit appellate review of the order.
Situation was remedied by Federal Rule 23(f), which grants courts of appeals the discretion to
review orders either granting or denying class certification.
When Rule 23(f) went into effect, observers assumed that federal appellate courts might be more
willing to grant review under Rule 23(f) to reverse orders certifying classes than to reverse denials
of class certification.
Thus, in Fed. Court, the grant of a motion to certify may be a short-lived victory for the P.
Rule 23(f) allows the court of appeals to step in (if the D requests and the appellate court
agrees to do so) and reverse.
Because most states have not adopted Rule 23(f), class Ps may prefer to litigate in state court.
(We will see in 13.3.9, however, that Ds have been given a powerful new tool to remove state
court C-Actions to Fed. Court.)
3. Definition of the Class and Appointment of Class Counsel
If the district court grants certification, it enters an order that, under Rule 23(c)(1)(B), must "define
the class and the class claims, issues, or defenses, and must appoint class counsel under Rule
23(g)."
The order certifying a class is not necessarily permanentRule 23(c)(1)(C) expressly recognizes
that an order regarding certification "may be altered or amended before final judgment."
Thus, the court is able to react as the litigation unfolds, perhaps to alter the definition of the
class or perhaps to "decertify" and forgo the C-Action altogether.
This fact emphasizes that the court constantly monitors the C-Action, both to ensure that the
interests of class members are adequately represented and to consider the continuing viability
of C-Action status.
For instance, maybe discovery will reveal that there are so few members in the class that a CAction is not needed, and that each individual should sue on their own.
Unless a statute provides otherwise, the court certifying a C-Action must appoint class counsel.
One prerequisite of any C-Action (see above) is that the representative be able to provide fair
and adequate representation of the class interests.
For years, courts routinely also required that the lawyer for the class be an adequate
representativethis requirement is now "codified" in Rule 23(g)(4), which provides that "class
counsel must fairly and adequately represent the interests of the class."
Rule 23(g)(1)(A) lists various factors the court must consider in making the finding, including
work undertaken by the lawyer in identifying and investigating the class claims, her experience
in handling complex litigation, her knowledge of the applicable law, and the resources she will
commit to representing the class.
Rule 23(b)(1)(B) counsels the court to look to any other facts pertinent to the lawyer's ability
to represent the class interests fairly and adequately.
Rule 23(g)(2) provides detailed procedures for the appointment of class counsel. 14
Obviously, lawyers will covet this appointment, because class counsel (1) gets to call the
shots in the litigation on behalf of the class and (2) will be paidoften a significant amount.
If more than one lawyer applies for the appointment as class counsel, Rule 23(g)(2)(B)
provides that "the court must appoint the applicant best able to represent the interests of
the class.
Even if there is only one applicant, the court must ensure that she satisfies the Rue 23(g)(1)
and 23(g)(4) standard of fairly and adequately representing the interests of the classthe
order of appointment may include any relevant "provisions about the award of attorney's
fees or nontaxable costs under Rule 23(h).15
4. Certification on Fewer Than All Issues; Subclasses
Not every issue in a class case must be litigated on a class basissignificant economy of scale
can be realized if some issues are determined en masse.
For instance, it might be possible to have a class determination of the D's liabilityIf
successful, the court might permit individual proof of damages.
Similarly, the court might employ subclasses. Suppose a class asserts a claim on which the
standard of liability varies slightly from state to state.
o A class seeks recovery of punitive damages. Each state is free to determine the kinds of
behavior that will give rise to a claim for punitive damages. In some, the P may have to show
"willful misconduct." In others, perhaps the standard is "reckless disregard of the consequences
of her actions." How can there be a class action if different Ps must satisfy different substantive
standards?
o For starters, the court might have an overall determination of the facts applicable to everyone
for example, whether the D in fact did certain things. If the court finds that the D did
nothing of the sort alleged, the entire class claim would fail on the merits.
o On the other hand, if the court finds that the D did X, Y, and Z , the court might then divide
the group into subclasses.

14 Rule 23(g)(3) permits the court to appoint interim class counsel before determining
whether to certify the class.
15 Fed. R. Civ. P. 23(g)(l)(D). Rule 23(h) provides procedures for moving for an award of
attorneys' fees and nontaxable costs. Importantly, it does not create any substantive
rights to recover these things. Thus, for example, attorneys fees are recoverable only if
there is some exception to the general rule that each side bears her own attorneys fees

For one, the litigation would focus on whether the D's actions constituted "willful
misconduct.
For the other, the question would be whether the acts showed reckless disregard, and so
forth.
5. Can the Court Look at the Merits?
In ruling on the motion to certify, can the judge consider the underlying merits of the case?
For example, how can the court know if the representative's claims are "typical" of those of the
class without looking at the merits of those claims?
How can the court determine whether common questions predominate over individual questions
without assessing the underlying facts of the dispute?
On the other hand, doing so is troublesome, because assessment of the merits should await the
adjudication phase of the litigation.16
It is now clear that the court may consider the merits of the underlying dispute in ruling on class
certificationbut only as required to make that ruling.
In other words, it should not make preliminary merits determinations unrelated to the Rule 23
inquiry.
In Wal-Mart v. Dukes, the Court made two important points in this regardFirst, it held that a
party seeking class certification must proffer "convincing proof" that the requirements are met.
Second, it hinted strongly that when considering expert witness testimony in the context of a
certification motion, the trial judge must apply the full federal standard for admissibility.'"
E.

Notice to Class Members and "Opting Out"


Rule 23 has three provisions about notice:
1) Found in Rule 23(c)(2)(B), is notice of the pendency of a C-Action, which applies only to Rule
23(b)(3) classes.
2) Found in Rule 23(c)(2)(A), permits the court to give notice of the pendency of C-Actions under
Rule 23(b)(1) and (b)(2).
We discuss both of these (the first of which is far more important ) in this subsection. The third,
found in Rule 23(e)(1), concerns notice of a settlement or dismissal of a C-Action. It applies to
all classes (not just Rule 23(b)(3) classes) and is discussed below.
We saw in the preceding subsection that the Rule 23(b)(3) class is more controversial than the other
types because the group usually is bound only by common questions and not by any legal
relationshipthe claims of these members generally are independent of one another.
As a result, the Rule 23(b)(3) class presents great stress between the desire for efficient resolution of
numerous claims and the requirements of due process.
To address this stress, the drafters imposed a notice requirement in Rule 23(b)(3) classes that
simply does not exist in the other C-Actions.
Under Rule 23(c)(2)(B), the court is required to direct notice to class members, "including
individual notice to all members who can be identified through reasonable effort." In Wal Mart v.
Dukes, the Court hinted that notice and the right to opt out are constitutionally required in classes
seeking monetary relief.
The purpose of this notice is to protect the members' individual interests.
Rule 23(c)(2)(B) requires the notice to inform class members of these things: (1) the nature of the
action; (2) the definition of the class certified; (3) the class claims, issues, or defenses; (4) that a
class member may enter an appearance through her own counsel if she desires; (5) that a class
member may request exclusion (and when and how members may elect to be excluded); and (6)
that the class judgment will bind class members who do not properly request exclusion.
Requesting exclusion has traditionally been called "opting out" of the C-Action, though the Rule
does not use that phrase.
This notice affirms to each class member that she does not have to depend on the class
representative and class counsel to protect her interestshe can either request exclusion from
the class and pursue her own remedy in a separate action (either alone or with others) or she can
stay in the class, but have her own lawyer act to represent her interests.
If she fails to request exclusion, she will be bound by the class judgment.
Rule 23(c)(2)(B) requires that this notice be "the best notice that is practicable under the
circumstances," including, as we said above, individual notice to those members who are identifiable
with reasonable effort.
This provision is more stringent than the Constitution would require.
We saw earlier that due process, interpreted in Mullane v. Central Hanover Bank, requires notice
"reasonably calculated, under all the circumstances, to apprise the parties of the pendency of
the action. . . . .
In addition, the Court spoke of giving "the best notice practicable."in an appropriate
abundance of caution, the drafters of Rule 23 require individual notice to those who can be
identified reasonably.
Such notice is usually given by mail, though nothing in the Rule specifies the manner in which it
is to be given.
It is not unusual to have some members who are reasonably identified and some who are not; in
such a case, individual notice is given to those in the former group and publication notice
perhaps in newspapers or on televisionis sufficient for the latter.
*In an effort to combat the sort of "legalese" that typifies notice sent to class members, Rule 23(c)(2)
(B) requires that the notice "clearly and concisely state (the required contents) in plain, easily
understood language."
It is important to remember that the notice we are discussing hereof the pendency of the C-Action
and of one's membership in the classis required only in the Rule 23(b)(3) C-Action.

16 Moreover if there is a right to jury trial, a pretrial determination of the merits by the judge (in the certification motion) could raise a
Seventh Amendment problem. Courts may avoid the problem by making clear that their findings made for purposes of the
certification decision will not bind the jury if the case goes to trial.

For Rule 23(b)(1) and 23(b)(2) classes, no notice is required.


But Rule 23(c)(2)(A) does permit the court, in its discretion, to give notice in such cases.
In addition, Rule 23(d)(1) gives the court great discretion in handling class litigation, and though
an opportunity to opt out of class membership is only required in the 23(b)(3) class, courts have
the discretion to permit opt outs in 23(b)(1) and (2) cases.
Can the lack of required notice in 23(b)(1) and (b)(2) classes be constitutional?
Earlier, we noted that due process might be satisfied by providing notice or by ensuring
adequate representation for the interests of class members.
Rule 23 envisions a combination of these protections in the Rule 23(b)(3) class.
OTOH, the drafters apparently concludedgiven the close relationship of most class members
in Rule 23(b)(1) and (b)(2) classesthat adequacy of representation (without notice) satisfies
due processno serious argument to the contrary has been mounted.
As a practical matter, it is unthinkable that the Court would find the present provisions for binding
members in mandatory classes unconstitutional.
The Court showed its hand in this regard in WalMart v. Dukesin rejecting the recovery of monetary
relief in a Rule 23(b)(2) class (discussed above), the Court said:
[Rule] 23(b)(2) does not require that class members be given notice and opt-out rights,
presumahly because it is thought (rightly or wrongly) that notice has no purpose when the
class is mandatory, and that depriving people of their right to sue in this manner complies
with the Due Process Clause. In the context of a C-Action predominately for money damages,
we have held that absence of notice and opt-out violates due process. While we have never
held that to be so where the monetarv claims do not predominate, the serious possibility that
it may be so provides n additional reason not to read rule 23(b)(2) to include monetarv claims
here.

F. Judgment, Settlement, and Dismissal of a C-Action


A judgment inn a class action binds all class members, except those who properly requested
exclusion from a Rule 23(b)(3J class.
Of course, it is this binding effect that makes the C-Action so efficientthe claims of numerous
would-be Ps are determined, and the determination is binding.
This binding effect has always been understood and is now expressly stated in Rule 23(c)(3).
Many C-Actions, however, do not go to judgment on the merits, either because they are settled or
voluntarily dismissed.
In most civil litigation, the parties are free to settle the dispute on whatever terms they consider
appropriate, and any P is free to dismiss her case voluntarily if she meets the requirements of Rule
41(a).
In neither situationsettlement or voluntary dismissaldoes the court play any role in the usual
case.
In the C-Action, however, things are differentbecause C-Actions are fraught with the potential
for conflicts of interest, as we discussed above, Rule 23 does not permit the parties to settle or
to enter voluntary dismissal of a certified C-Action.
Instead, Rule 23(e) requires court approvalimportantly, Rule 23(e) applies only if the court
has actually certified the class, and only if the settlement, dismissal, or compromise affects
class issues. 17
Most cases settle. Most C-Actions settle. Usually, counsel for the representative and for the Ds agree
on terms of the settlement and present them to the court.
The court then undertakes its first review of the terms, to determine whether they appear fair to the
class members.
Courts should be especially wary of settlements that give class members little of value while
lining the pockets of the plaintiff's lawyer.
If the court feels that the settlement is not fair, it will send the lawyers back to the bargaining
table, without giving notice to class members.
If, OTOH, the settlement appears fair to the court, it will direct notice under Rule 23(e)(1),
which requires that the court "must direct notice in a reasonable manner to all class members
who would be bound by the [proposed settlement, voluntary dismissal, or compromise]." 18
Under Rule 23(e)(5), class members have the right to object to the proposed settlement, voluntary
dismissal, or compromise of the C-Action.
Rule 23(e)(2) says that "[t]he court may approve a settlement, voluntary dismissal, or
compromise that would bind class members only after a hearing and on finding that [it] is fair,
reasonable, and adequate."
The court holds a "fairness hearing" to determine whether to approve the settlement.
Though the judge will consider the reaction of the class members to the proposal, the court
retains the ultimate authority whether to approve.
Under Rule 23(e)(4), the court may refuse to approve settlement of a certified Rule 23(b)(3) C-Action
unless the settlement "affords a new opportunity to request exclusion to individual class members
who had an earlier opportunity to request exclusion but did not do so."
In 13.3.4, we saw that members of a Rule 23(b)(3) class have a right to request exclusion from
the class (and thus to avoid being bound by class judgment)The right is afforded by Rule 23(c)
(2)(B), which gives notice of pendency of the C-Action only in Rule 23(b)(3) classes.

17 For years, it was not clear whether Rule 23(e) applied to cases filed as C-Actions but
which had not yet been certified as C-Actions. Rule 23(e) was amended in 2003 to bring
welcome clarity. It provides, in Rule 23(e)(1), that "[t]he claims, issues, or defenses in a
certified C-Action may be settled, voluntarily dismissed, or compromised only with the
court's approval."

18 Remember, the notice under Rule 23(e) applies in all C-Actions. The notice in Rule 23(c)(2), which is notice not of settlement but of
the pendency of the C-Action) is required only in Rule 23(b)(3) classes .

Rule 23(e)(4) permits such members a second right to opt out, one that comes u p when the case
is being settled.
Thus, members of a Rule 23(b)(3) class who do not like the terms of the settlement are not bound
by it and may request exclusion and sue on their own.
In addition, Rule 23(e)(3) requires the parties seeking approval to identify "any agreement made in
connection with the [proposed settlement, voluntary dismissal, or compromise.]"
This provision is intended to help the court determine whether the representative is being
"bought off" in a "side agreement," leaving the class members with less than appropriate relief.
As noted, the certification decision is the principal event in the litigationif the class is certified,
usually the case will settle. If the case is certified under Rule 23(b)(3), as we saw in the preceding
subsection, class members are entitled to notice and the right to request exclusion.
Sometimes the lawyers will agree to settlement terms before that notice is sent outin such a case,
the class may receive unified notice under Rule 23(c)(2)(B) and Rule 23(e), that is, they will be told
that they are members of a Rule 23(b)(3) class and have the right to request exclusion, and that the
case is provisionally settled on terms listed in the notice.
Thus, each member can decide whether to request exclusion, to object to the terms of the
settlement, or to accept the terms of the settlement.
If a C-Action is destined to be settled, must the court go through the entire certification inquiry
under Rule 23(a) and 23(b)?
After all, if the parties are going to agree to settlement terms, cannot the court simply proceed
to assessment of the fairness of the settlement terms?
The Supreme Court addressed these issues in Amchem Products, Inc. v. Windsor in which it held
that the court must certify the class before approving the settlementthe fact that the case will
settle and thus not require a trial is relevant to the manageability of the class, but does not
justify wholesale ignorance of the requirements of Rule 23(a) and 23(b).
The holding in Amchem Products is salutarywithout certification, the parties and the court are
free to allow settlement of massive disputes that do not fit within any recognized form of
litigation.
By requiring certification, Amchem at least attempts to limit the court to acting within a properly
constructed litigative unit.

G. JRX & Related Issues


Generally Ps dont have to be subject to personal JRXthey agree to JRX of the court by bringing
suit in the given location.
What about class actions though? Are members of the plaintiff class who are not there and would
not be subject to suit bound by the judgments?
Are they precluded from brining their own suits? We know under 23(b)(1) and (b)(2) jrx is mandatory
there is no opt out.
Members of a rule 23(b)(3) plaintiff class need not have minimum contacts with the
forum statetheir choice, after receiving notice, not to opt out constitutes their
submission to the in personam JRX of the court.
Raises an interesting questiona class member will be bound by a class judgment unless she
takes affirmative steps to opt out, but how does a court have the power to command such an
affirmative act unless the person being commanded has minimum contacts with the forum?
Never been addressed.
Other unanswered questions:
1) Does the holding apply to Rule 23(b)(1) and (2) class actions? The court has limited its holding
to a 23(b)(3) class, and, as noted, it relied heavily upon the fact that the class members did
not opt out of the class in concluding that they had consented to in personam JRX.
No such opportunity to use consent as a pasis for PJRX under 23(b)(1) or (2)these class
actions are mandatory (no opt out).
Perhaps this means that members of mandatory classes should not be bound unless they
have minimum contacts with the forum, but such a conclusion is contrary to the Courts
emphasis on the differences between P class members and Ds.
Would also make class actions under these rules much more difficult to bring.
Moreover it is likely that due process is satisfied in (b)(1) and (2) cases by adequate
representation w/out notice or the right to opt out.
2) Must there be minimum contacts over members of a D class?
The D class members are not parties and may be along for the ride just as P class
members are, they may be held liable for a judgment in favor of the P.
Thus, it seems likely that only those D class members over whom the forum has in
personam JRX may be bound.
Some courts have permitted judgments involving defendant classes so long as there is in
personam JRX over the representative, even if the other class member were not subject to
JRX.
These cases were decided long ago however, and seem of doubtful validity today.
What about the possibility that P class members might have to pay defense attorneys
fees?no court has addressed the issue.
1) Choice of Law
The law of a state may apply only to parties who have some significant connection with that
state.
Accordingly, even though a state might have JRX over all the members of the class, that states
law might not be appied to claims of the non-state members.Raises the possibility of
subclasses
2) SMJRX
A. FQJRX
Same rules regarding FQJRX cases with single P and D apply to class actions.
No AIC needed as long as the case arises under Federal Law.

B. DJRX
In determining citizenship and the AIC, to whom does the court lookto the representative or
the class members?
o The classs citizenship: In one case SCOTUS established that only the representatives
citizenship must be diverse from that of the opposing party.
After judgment in that case, the in-state class members asserted that they were not under
JRX of the forum state since they were not diverse from the D.
Court rejected that argumentso long as the representative was of diverse citizzenship
from the D, diversity was established and the judgment bound all class members, including
those who were in state citizens.
This holding is enormously helpful from a practical standpoint because it makes the class
action more readily available in federal court.
A requirement that each class member must be of diverse citizenship from the opposing
party would make it quite difficult to invoke DJRX in a class.
Thought the court in the above discussion did not discuss the holding in these terms, the
case may well be seen as a an example of SUPJRX
1. The representatives claim against the diverse opposing party invokes DJRX
2. The claims of the class members seem sufficiently related to the representatives claim
to invoke SUPJRX under common nucleus of operative facts test
The court never explained the decision in this way so perhaps its better to look at this case
in terms of SMJRXas the representative being the sole party on the one side that has to
be diverse from D.
o The AIC: How should the court asses whether the AIC is satisfied in a DJRX class action?
Again here we discuss only regular DJRX case under 1332(a)(1), and not quite different
standards under the CAFA (below)
Aggregation rules applicable in DJRX cases generally also apply in class action context
multiple Ps generally may not aggregate their claims to meet AIC.
o Hypo: The class consists of 100 member. Each class member has a claim of $760. The
aggregate value of the claims is $75,000. This cannot satisfy AIC, however, because
class claims cannot the aggregated. This is still the rule under 1332(a)(1)
o What about when class rep alone meets AIC but class members told does not?
one court held that the entire classs damages aggregated needed to meet AIC
1367 undermines this result and the drafters later added commentary that
it was not their intent to affect the result.
Remember 1367(a) grants SUPJRX to the full extent permitted by Constitution,
which SCOTUS determined to include claims sharing a common nucleus of operative
fact with a claim that invokes FSMJRXSo if class reps claim meets AIC,
1367(a) grants SUPJRX to all appropriately related claims by class
members even if those claims dont exceed 75k.
1367(b) cuts back by removing it over certain listed claims, but on in DJRX cases
nowhere in the catalogue of 1367(b), however, did congress mention claims
asserted pursuant to Rule 23.
Thus, by its terms, 1367 does what the court would not even address: grant SUPJRX
over claims by class members that do not satisfy AIC (just as long as class reps
does.)
In the end, some courts allow DJRX based on class rep meeting AIC and some dont based
on the seemingly erroneous holding by the court in the former case (and the added
commentary in 1367).
Those that do allow do so based on fundamental tenets of statutory construction:
1. Court consults the language of the statute
2. Only if the language is ambiguous or would lead to an absurd result does the court look
to legislative historyhere 1367 unambiguously grants SUPJRX and the result of that
language is not absurd.
The holding that DJRX cannot be invoke unless all class members meet AIC is still good law
in class action cases, but it has been noted that the class reps claim can get the process in
federal court moving, and then the class members can join via SUPJRX.
o Representative sues on behalf of a class of purchasers of a product, alleging violation of state
antitrust laws. By statute, each class members claim is limited to $20K. Representative
however, is entitled to seek recovery of attorneys feed, so her claim exceeds $75k.
Representatives citizenship is diverse from that of D. Can this class action proceed in Fed.
Court?
Reading 1367 as it is read for any other case aside from class action, reps claim invokes
DJRXshe meets AIC and is diverse.
Claims by class memebrs do not satisfy requirement of DJRX because they dont exceed 75K
Claims by the class members invoke SUPJRX under 1367(a) because they arise from a
common nucleus of operative fact w/reps claim
Though 1367(b) applies in cases that invoke DJRX, like this one, it does not remove SUPJRX
over claims asserted under rule 23. It was not addressed in Abbott Labs (facts this
hypois based on)
Another issue lurks, 1367 only permits SUPJRX in cases involving a single D and removes
SUPJRX when parties are added via rule 20so when a class action is asserted against
multiple Ds (joined obviously under rule 20), this provision would seem to deprive the court
of SUPJRX over claims by class members.No definitive interpretation of the rule, so no
resolution.
3) Venue
No special venue provision for C-actions; thus, unless the case involves a special venue provision,
the general venue statute, 28 U.S.C. 1391, applies.
Remember: general choices for venue are any district where all Ds reside or in which a

substantial part of the claim arose.


H. Class Action Fairness Act (CAFA)
1) Background
CAFA allows the channeling of large interstate class action from state to federal court by relaxing
FSMJRX and by providing Ds w/liberal rights to remove class action from state to federal court.
Various factors of rule 23 may impel a plaintiff class lawyer to file in state court:
1) In Amchem the supreme court imposed the rule 23 requirements w/particular strictness
state courts arent bound to interpret their class rule in the same way
2) In federal court, Rule 23(f) permits immediate appellate review of class certification decisions
this rule has been used primarily to reverse class certifications; it is thus seen as the
antiplaintifffew states have adopted 23(f)
3) Federal court pleading under Twiqbal may be more rigorous than state court pleading
4) There is a sense that summary judgment is more readily available in fed. court than in state
court, based in large measure o cases decided by the Supreme Court in 1986.
5) Fifth, as a matter of proof at trial, in cases involving expert evidence (which includes many
class actions), federal courts appear less hospitable to Ps than some state courts.
After Wal-Mart v. Dukes the federal requirements for admission of expert witness testimony
at trial apparently apply at the class certification stage in fed. court.
Proponents: of the rule praise it as a vehicle to have fed. court take over large interstate
disputes and assure fairer outcomes for class members & defendants.
Critics: Expresses lack of faith in state courts and allows ate court Ds to get class actions
funneled into federal court, where it is often more difficult to for Ps to prevail.
Thus, critics assert CAFA is seen not as providing a mere change of forum for class suits, but as
a means of effectively denying access to the class device.
Regardless of what anybody says, CAFA works a profound reallocation of judicial authority in large
interstate cases and ensures that state courts will play a less important role in such disputes than
they have historically.
2) Statutory Provisions
Provisions of CAFA are in 28 U.S.C 1711 (definitions for the act), 1712, 1713, 1714, 1715,
1332(d)
1712defines coupon settlements, and requires that when a proposed settlement of a C-action
in fed court provides coupons for class members, the attorneys fee attributable to the award of
coupons must be based upon the actual value of the coupons to the class members.
This provision, 1712(a), is intended to avoid the award of large counsel fees to lawyers who
procure for the class coupons that are essentially worthless.the remainder of the section
deals with other matters of attorneys fees and judicial scrutiny of coupon settlements.
1713addresses settlements in which a class member is required to pay class counsel, resulting
in a net loss to the class member.
1714 prohibits approval of a settlement that discriminates in favor of class members
geographically situated closer to the court than others.
1715 aimed at requiring notification of a federal officer (usually the attorney general) and a
state officer of a proposed settlement of a casespurpose to allow governmental input on the
desirability of the settlement.
1332(d) is most important(d)(1): defines various terms (class action); (d)(2): grant of SMJRX
AIC is $5 million exclusive of interests and costs, and citizenship is determined by any of (d)(2)
(A), (B), or (C); (d)(6): $5mill is determined by aggregating all members claims
(d)(2)(A): single member of the class be of diverse citizenship from any D (very broad), and it
does not have to be the rep (rep and D do not have to be diverse)
For issues relating to SMJRX and how broad it is, look in the book at 829-831
Federal Question
Basic Diversity: Only citizenship of named parties counts and at least one class representative must
meet the AIC.
C-Action Fairness Act (CAFA)- Minimal diversity and over $5 million aggregate AIC (All Ps
combined).
Court Monitors class counsel and shape class counsels fees.
Remedies
Test:
Short answer: # of them. Narrow area of law, get far through analysis
Issue Spotter:
Policy: New rule1) Tell me how different, 2) Argue for it, 3) argue against it