You are on page 1of 22

Hendricks CivPro (Fall 2009)

Concise Outline from Review Session:


CivPro Review Notes – Exam is all essay

 Claim Preclusion
o Same claim
 Could have raised issue in #1
 Should have raised issue in #1
 If Same transaction (majority rule)
 If same evidence (minority rule)
o Same parties
 Due process! (Can’t bind people to results if not given chance to litigate)
 Exceptions:
 see Taylor (in supplement)
 if in contract
 traditional representation
o ie guardians, trustees
 if people controlled trust…eg
 special statute passed by legislation
o Final judgment “on the merits”
 But barred if your claim sucks
 FRCP 41(b) – tells what is preclusive (if in federal ct)
 Special failure to prosecute
 12(b)(6) motions – Failure to state a claim on which relief can be granted

 Issue Preclusion
o Same issue (in legal and factual sense)
 Includes burden of proof
o Actually litigated and decided
 No alternative path (evidence supports outcome)
o Essential for the judgment
 Don’t preclude alternative holdings (may change if affirmed on appeal)
 For example if judge says I feel this way for 2 reasons…each issue may not be
enough on own to preclude, so judge may not weigh issue as carefully
o Same parties—mutuality, same as claim preclusion
o Same party (only 1 person carried over from 1 claim to another)
 Make sure the “victim” of preclusion in case #2 was a party in case #1
 Check fairness factors (did newcomer “wait and see” result
 Prior inconsistent judgments (if party won once, hard to preclude if second outcome
went other way)
 Differences in procedures, remedies, incentives

 Erie
o REA (Rules Enabling Act)
 Courts can write procedural rules, just don’t enact substantive law (ie tort law, this
should be left to common law or statutes)
 Create FRCP
 “arguably procedural” test
 If it is procedural then it is a valid rule
o RDA (Rules Decision Act)
 Unless federal law that says otherwise
 If controlling federal law then follow it
 If not then do unguided Erie
 Bound up w/ substantive rights
 Outcome determinative
o Guaranty Trust sense (crude test)
o Hannah sense (More refined test)
 Twin aims of Erie
 Federal interests at stake
 Subject Matter Jurisdiction
o Not waivable
o Court has to dismiss if not in the proper court
o Fed court has jurisdiction if:
 In constitution
 Congress has given permission in a statute
 Fed jurisdiction is always concurrent with state jurisdiction, unless congress passes a
law saying claim is only in federal court
o 3 pieces of federal jurisdiction
 Foot in the door
 1331- federal questions
o Must satisfy the well-pleaded complaint rule (Mottley) and
 Either
 Holmes
o Satisfies the well-pleaded complaint rule
 Grable
o Must satisfy the well-pleaded complaint rule +
grable
o Article III
 1331 – Yes
 Fed Ingredient – Other statutes
 1332- diversity
o Nametags
 Individuals
 Where you are physically present with an intent to
remain, old domicile stays domicile until change it
 Corporations
 Place of incorporation and place of business (muscle-
nerve)
 Partnerships
 Citizenship of all its partners
 *Time of filing rule-everyone keeps nametags at time of filing, ie
residency is based off where they originally were at time of
filing
o Diversity
 Complete
 No overlap between ∏ and ∆ (1332a)
 Minimal
 At least 1 person different from 1 side to other (Art III
and certain restrictions)
 Alienage
 Read 1332(a) carefully
 Aliens are not diverse from each other
 Last sentence of 1332(a) how to treat permanent
residents
 Collusive or Fraudulent Joinder
 Can’t add someone just to take advantage or avoid
diversity if not legitimate claim
 Family Law and Probate exceptions
 Excluded from diversity jurisdiction
 Ie divorce, probate, wills etc…
o Amount in Controversy
 Greater than 75k
 Rules for aggregation (find page in book w/ rules)
 Supplemental Jurisdiction 1367
o Common Nucleus of Operative facts – Broad test (1367a)
o Exception – purpose is to prevent manipulation by ∏’s (1367b)
 Read carefully
o Discretion to decline (1367c)
 If state claims dominate
 Narrow
 Have to keep claims under 1331 or 1332
 Removal
o 1441- what claims are eligible for removal
 (a) ∆ has options to remove
 (b) except a ∆ at home in diversity
o 1446 + 1447
 w/I 30 days for notice of removal, then 30 days to remand
 Personal Jurisdiction
o Waivable
o Subject to collateral attack (under Pennoyer)
o Service of Process
 Rule 4
 Mullane/ due process
o Venue
 1391
 (a) where ∆ lives
 (b) substantial part of acts + omissions
 (c) last resort
 Specific (On exam make sure you talk about (LA Statute, PA, Claim and
Contacts related, reasonableness) (Make sure you say O’Connor would say…x
but under Brennan…this would be outcome, give answers based on different
principles)
o Long-arm statute (Rule 4k)
 What would a state court do? (what does st LA statute say?)
 Bulge rule
 Joined under rule 14 or 19 (think bulge rule and 1367b
 Served w/I 100 miles of court house
 Close by (even if across state lines)
 Last Resort
o Purposeful Availment
 Under McGee even very little contact if arises out of that
business is enough
 WWVW- mere foreseeability is not enough
 Asahi-
 Brennan: awareness is enough
 O’Connor: intentionally directing or aiming
 BK – as long as you get a little PA you get the chance to argue
reasonableness (AKA BK Co-varying test), reasonableness can
make up for low PA
 Effects Test
 Developed for defamation cases (intentional torts)
 Sliding Scale Test
 Meant for internet cases
o Claim and contacts must be related
o Exercise of jurisdiction must be reasonable
 General
o Long-arm statute
o Purposeful Availment
o Reasonableness
o General jurisdiction over you where you reside
o Tag Jurisdiction – Burnham
o In Rem (state has gen jx over claims arising from property in state)
Bigger Outline:
CIVIL PROCEDURE
HENDRICKS LIKES CONCLUSIONS. DON’T GIVE WISHY WASHY ANSWERS.

PERSONAL JURISDICTION – minimum contacts, traditional notions of fair play and substantial
justice. (Shoe)
0. Long arm statute
a. Federal court - rule 4k
a. State court - whatever state statute
1. Purposeful availment – contrast O’Connor and Brennan approaches
minimum contacts as modified in Hanson, and WWVW, and Asahi
To require more than just contacts
1. Purposeful availment (minimum contacts)
a. O'Connor
1. rejects awareness is sufficient
2. Aiming
3. Purposeful Directing
b. Asahi
c. BK co-varying test - example of level of business contacts that might be considered
(Brennan)
d. Sliding scale test – for electronic contacts with forum
e. Effects test – usually defamation cases
f. Brennen - Awareness

Mere forseeability - nixed in WWVW

2. Relatedness
In order for it to be related, the contacts with the state have to be related to the cause of action.
Shaffer – LAS did not match with best argument.

a. Broad and narrow


i. Narrow - claim arises directly out of context - Coastal video
ii. Have something to do with the case, contacts were related even though they were
not that direct – McGee
iii. Broad view - like showing that the company has lots of contacts and any claim
could be brought. Don't have to cite a case because we haven't seen one.

3. Reasonableness
a. Asahi - not reasonable
b. Consider all factors
i. Burden on def
ii. State's interests
iii. Plaintiff's interest
iv. System's interest in efficiency
 
4. Claim jurisdiction over the person
a. Serve process according to the statute
b. Sufficient under Mullane - notice reasonably calculated

When Parties Cannot be Served Within the Forum State


OLD version -
Pennoyer v. Neff (1877)
The Supreme Court held that due process prevented suit against nonresident defendants who could only
be found and served elsewhere. The Court held that if a state court attempts to exercise personal
jurisdiction over a defendant, the defendant “must be brought within its jurisdiction by service of process
within the State, or his voluntary appearance.”

4 ideas from Pennoyer


1. Always check the state law - every state has a statute that says under what cirucmstances they
apply personal jurisdiction
2. Due process contrains state exercise of personal jurisdiction - 14th amendment (just dicta in
Pennoyer)
3. Presence is necessary and sufficient for personal jurisdiction
4. Collateral attack - when challenge a court's judgement by filing another suit

Minimum Contacts with Forum State


NEW

International Shoe Co. v. Washington (1945)


The Supreme Court articulated a new test of determining whether personal jurisdiction exists
over a nonresident defendant who cannot be found and served within the forum state: whether
the defendant has certain minimum contacts with the forum state, such that the maintenance of
the suit does not offend ‘traditional notions of fair play and substantial justice.’ ”
FAIRNESS
The Supreme Court affirmed Washington’s exercise of personal jurisdiction over International
Shoe, finding sufficient contacts with the state to do so.

In Shoe the court makes it sound like a sliding scale


What kinds of facts would be relevant when looking for factors to help decide if personal jurisdiction is
reasonable:
Permanent employees
How much $$
% of total business
Absolute value
How often do business
Systematic and continuous
Vs. isolated contact
Physical presence (office or display)
Mail, phone, email, web
Benefits from the states (using taxpayer facilities) - roads, courts
Relatedness
Convenience of going forward with the suit - where are the witnesses, lawyers, evidence
State interest in providing recovery for their citizens
Primary conduct - state has interest to deter people from doing bad things
Forum for their residents

In int'l show - you don't need to know where people are


You need to know what the facts are giving rise to the lawsuit so you can decide context, contacts
Once you establish jurisdiction, you can serve people in MO for a WA suit

Show spilits into 2 part test


Minimal contact
How many
How related they are to the claim
Fair play and substantial justice
Reasonableness
Convenience and burden on defendant
forseeablility
State interests
Regulation defendant's conduct
Providing a forum to its own citizens
Efficiency
Plaintiff's interest
Benefits received from the state, relatedness of the contacts

Personal jurisdiction has been separated from service of process


Justice Black is worried about state interests.

McGee v International Life (1957)


The court finds that the life insurance policy in question had substantial connection with the state of
California - the contract was delivered in CA, the premiums were mailed from CA, and the insured was a
resident of that state when he died. Furthermore, the court holds that the state has an interest in protecting
its citizens without making them travel to other states.

Hanson v. Denkla (1958)


Established trust in DE but moved to FL. Held: FL did not have jurisdiction
There was no purposeful availment of the trust company in FL.
Did not meet Shoe’s “minimum contacts”

PARTIAL DEATH OF QUASI IN REM JURISDICTION


Shaffer v. Heitner (1977)
Plaintiff is trying to get quasi in rem – shares of stocks.
Holding: standard of fairness and substantial justice set forth in International Shoe governs in rem
jurisdiction, not only in personam. Plaintiff loses, no minimum contacts.
In quasi in rem cases like this one, where the property is completely unrelated to the plaintiff's cause of
action, the presence of the defendant's property alone would not support the State's jurisdiction. Because
the only role the property played was to provide a basis to bring the defendant into the court room, would
violate the constitution. An indirect assertion (or quasi in rem) should be equally impermissible.

SPECIFIC JURISDICTION

World Wide Volkswagon v Woodson (1980) Justice White


Held: An Oklahoma court CANNOT exercise in personam jurisdiction over a nonresident auto retailer
where the only connection is that an accident occurred in Oklahoma.
The Court further refined the minimum contacts test, stating that “critical to due process analysis . . . is
that the defendant’s conduct and connection with the forum State as such that he should reasonably
anticipate being haled into court there.” However, There would be jurisdiction over Audi or
Volkswagen because they intentionally bring their product into the stream of commerce in Oklahoma.
Brennan dissent: BRENNEN THINKS IT SHOULD BE REASONABLE BUT DOESN'T LIKE
LIMITING WHERE PLAINTIFFS CAN BRING SUIT. HE WANTED TO SAY FORSEEABILITY IS
ENOUGH. Someone who makes the decision in the national economy and can forsee their product used
in the country, should have to defend such suits.

Asahi Metal Industry v Superior Court (1987) O’Connor

Reasonableness standard – everyone agrees this case is not reasonable


Jurisidction over Asahi would be unreasonalbe, even apart from the placement of goods in the steam of
commerce. Burden of the defendant is severe. The transation on which the indemnification claim is
based took place in Tawian, Asahi's components shipped from Japan. Cheng Shin has not demonstrated it
is more convenient to litigate in CA rather than tawian or Japan.
Issue: Whether a foreign defendant who had mere awareness that his components might be sold in the
U.S. can form "minimum contacts" with the state sufficient for in personam jurisdiction?
NO HOLDING. SPLIT DECISION, TALK ABOUT O’CONNOR AND BRENNAN TESTS WHEN
DISCUSSING P.A.
o'connor - rejects awareness is sufficient
Purposeful availment levels -
Mere forseeability - nixed in WWVW
Awareness - Brennan
Purposefully directing - O'Connor
Aiming
O'connor thought there was no evidence that the company aimed the products directly at California

Burger King v Rudzewicz (1985) Brennen


Brennen - IMPORTANT BECAUSE HE DISSENTED IN WWVW - HE'S TRYING TO EXPAND
PERSONAL JURISDICTION and make P.A. easier.
Holding: Fl court did have jurisdiction over Michigan franchisee.
Burger King Co-Varying Test = reasonableness can outweigh the minimal
If you have PA and reasonableness, if you have a lot of one and only need a little of the other
If you have a very weak case for PA, and have a strong case for reasonable ness, there can still be
p.j.
No categorical rule, have to look at facts of the case.

Pavlovich v. Superior Ct. (Cal. 2002)


Holding: Cal. Could not exert jurisdiction over plaintiff who lived in TX and posted data on the internet
on how to break encryption on DVDs, even though it affected the movie industry in Cal.

Brennan's awareness opinion in Asahi is related here.


Purposeful directing - O'Connor's claim. It was a web site, his web-site wasn't directed at CA, but the
motion picture industry was in CA.
"effects" test - arguing that the harm is in CA. WWVW limits this. Mere forseeability is not enough
Knowledge alone isn't enough for the effects test.
Only going to apply to cases where defendat's conduct was intentional.
Pavlovich wasn't involved in any commerical activities, like most of the other cases of the "effects"
test
S.C. endorsed it for defemation cases
"sliding scale" - whether maintaining a web site is sufficient
Passive web site - one end
Repeated transmission, knowing - other end

GENERAL JURISDICTION
How diff then specific? Take out relatedness.
Coastal Video Communications Corp. v. Staywell Corp (E.D. Va. 1999)
There was no specific jurisdiction because of l.a.s., but general was found possible, need more discovery.
Court says - show us there is enough business to hold them to general jurisdiction
Personal jurisdiction is 4 step analysis for conduct related to the forum
General jurisdiction is when there are enough contacts with the state to be able to be involved with suit for
anything.

THE RETURN OF PRESENCE

Burnham v. Superior Court (1990) Scalia, with Rehnquist, Kennedy, and White
There is no opinion that is law in this case.
Divorce case – NJ and CA. Husband served with petition for divorce while he was in CA on business and
to visit his kids.
The 14th amendment does not prohibit California courts jurisdiction over a nonresident who was
personally served with process while temporarily in that State, in a suit unrelated to his activities in the
State.
Scalia – narrow reading of Shoe, left Pennoyer undisturbed when person in state, tradition, tradition,
tradition; physical presence is enough for jurisdiction.
Brennan, Marshall, Blackmun, O'connor concur
Brennan - presence in the state is reasonable because Shoe
Dealing with transient jurisdiction
Tag jurisdiction
Scalia tells you - Shoe minim contacts test applying to personal jurisdiction is foolish
Saying Shoe was only a few deviations from Pennoyer
Hendricks SAYS TAKE THIS WITH A GRAIN OF SALT

NOTICE

Mullane v. Central Hanover Bank & Trust (1950)


An elementary and fundamental requirement of due prcess in any proceeding which is to be
accorded finality is notice reasonably calculated, under all the circumstances, to appraise
interested parties of the pendency of the action and afford them an opportunity to present their
objections.

Service of Process
Rule 4

Long Arm Statute & Jurisdiction of Federal Courts


Gibbons v. Brown (Fla. Dist. Ct. App. 1998)
Gibbons (TX resident) sued Mr. Brown in FL. Two years later, Mrs Brown sued Gibbons in FL.
FL did not have jurisdiction over Gibbons based on their strict long arm statute.
Decision: Mrs. Brown has not shown Ms. Gibbons "is engaged" in any activity in this state whatsoever
other than defending the present suit. A current defendant's prior decision to bring a suit in FL should not
act indefinitely as a sword over her head.

Rule 4(k)
Rule 4k applies when in federal court (federal long arm statute)
Rule 4(k)(1)(A) – says look at the state requirements; go to a federal court where state ct would have jur

[d] 100-mile Bulge Rule Rule 3 (k)(1)(B)

 4 k 1 b - who is party to rule 14, 19 and is served within 100 miles from the court house
Form of tag jurisdiction - this is called the "bulge rule"

When supplemental jurisdiction is asserted over third-party defendants and indispensable parties, service
may be effectuated by the 100-mile bulge rule, if such parties cannot be served within the state in which
the federal court sits. The rule allows service on such added parties anywhere within 100 miles of the
federal courthouse in which the action is pending.

4k2 - federal claim outside state court jurisdiction


If the plaintiff is suing under federal law, even if there is no jurisdiction by state standards, the
federal court can enforce claim if there are enough contacts with the US as a whole (for foreign def).
If there is federal law at stake, you can use 4k2 to get hold of an international defendant you can't
get in any state.

Venue
Venue is another way of trying to get a case into a convenient location
Not a constitutional issue, it's a statute issue

28 U.S.C. § 1391
a) founded only on diversity
b) where jurisdiction is not founded solely on diversity

SUBJECT MATTER JURISDICTION

FEDERAL QUESTION JURISDICTION

U.S. CONSTITUTION ARTICLE III SEC 2


“Judicial power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of
the U.S.….”

28 U.S.C. § 1331 FEDERAL QUESTION


The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws,
or treaties of the United States.
Well-pleaded complaint rule

Holmes test - he thought that if federal law creates cause Action then it should be in fed ct

Friendly test
Case should be in fed court if it called for the construction of federal Law.

L&N RAILROAD V. MOTTLEY (1908)


It is not enough that the plaintiff alleges some anticipated defense to his cause of action and asserts that
the defense is invalidated by some provision of the Constitution of the United States.
Federal question must be in well-pleaded complaint, cannot be an anticipation of defense.

GRABLE V. DARUE ENGINEERING


IRS did not notify him that they were taking away his land via specific way fed statute said.
Test:
Still have to have a federal issue in well pleaded complaint
State claim has to raise federal issue
The issue has to be in dispute and substantial
Balance Congress' wishes.

Steps you use to decide whether there is federal jur:


1. Well pleaded complaint rule - federal issue has to be part of the claim, not anticipating what def is
going to say
2. What would Homes do? Is the cause of action a creation of federal law?
a. Federal jur under 1331 with *
3. State cause of action with an important federal issue
a. Apply Grable and make a policy decision if this case should be in federal court (scaled
down version of Friendly test)
 
4. Declaratory Judg -
a. Plaintiff movie star suing national enquirer
i. State tort defemation with 1st amendment defense
 
b. Plaintiff national enquirer suing movie star for a declaratory judgment
i. Complaint will say 1st amendment and decl. judg act
1. Satisfies well pleaded complained
2. But the book on p 187 says that DJA was not meant to expand jurisdiction
a. Not meant to change universe of cases in federal court
3. When faced with DJ you have an extra step to complete:
a. We apply analysis to imaginary lawsuit filed by movie star (coercive action
not a dj action)
b. The imaginary claim would be a state tort defamation
Therefore since no federal issue, no federal court for the dja
 
 
* is problem 13
Federal created cause of action but embedded state law issues
Federal law is piggybacking on state law
Federal law gave you the right to sue, but the rule of decision is state law
Another conflict between Holmes and Friendly

DIVERSITY JURISDICTION 

28 U.S.C. § 1332
a) more than $75,000
an alien admitted to the US for perm. Residence shall be deemed a citizen of the State in which such alien
is domiciled.
c) corporation is a citizen of any State by which it has been incorporated and of the State where it has its
principal place of business…

More than $5 million at stake per Class Action Fairness 1332d

REDNER V. SANDERS (S.D. N.Y. 2000)


Whether the plaintiff who is a US citizen living in France is a citizen or subject of a foreign state? No
If he is domiciled in California, there is diversity under 1332 a 1
If he is domiciled in France, argued that diversity under 1332 a 2 REJECTED BY COURT
Citizens v subjects of France? Subjects likely to be like Burma residents
Its referring to two kinds of governments not two kinds of people.
What can Redner do now?
He can re-file complaint citing 1332 a 1 saying he is domiciled in Calif.
Or file in state court

SAADEH V. FAROUKI (D.C. CIR. 1997)


Farouki is a Jordanian citizen residing in Maryland. He was a permenant resident when the suit was filed,
but during litigation became a US citizen. He defaulted on a loan that was made by Saadeh. Saadeh was
a Greek citizen.
Whether section 1332 (a) allows for this suit between an alien and a permanent resident? NO
Despite the plain language of 1332 a the amendment "clearly appears to have been intended only to
eliminate subject matter jurisdiction of cases between a citizen and an alien living in the same state."

Domicile
Individuals – only can have one domicile - present domicile and intent to remain indefinitely.
Corporations
Two tests:
1. Nerve - where execs are
2. Muscle - where everyday activities are
 
There is only one principle place of business. (diff than personal jurisdiction that says can be subject
in multiple places).

Partnerships - include indiviudals and their domiciles

Time of filing rule


Residency as of when suit is files
 
Diversity
Complete diversity - rule of Strawbridge
No one on either side of the case can be from the same state
Minimal diversity - i.e. having P: NY, CA, OH and Def: NY, ID, OR

Alienage jurisdiction - Under 1332 e we pretend that DC is a state

Collusive & fraudulent joinder


Adding someone to case just because they are in the state you need to keep it in state court (or
manipulating diversity jurisdiction). Completely frivilous.
The federal court can dismiss these parties and keep the case in federal court.
Collusive means that the party added was in on it.
Fraudulent joinder - party was joined
The only way to get the party out is to show there is no substantially valid claim.

Family & probate exceptions


Cannot get a domestic relations case into federal court based on diversity jurisdiction

 
Policy concerns
Bias
Caseload
Federal interests
 
Amount in controversy
Aggregation rules

SUPPLEMENTAL JURISDICTION

Look for federal question


Diversity
Amount in controvery
Then supplemental jurisdiction - before you can talk about supp. You need to have primary jurisidiction

What if paula (pa) and joe smith PA


Def wants to add someone who is same domicile as plaintiff
1367 b - limits plaintiff's claims that would defeat diversity, but defendant can.
Paula cannot cross claim Joe smith, because that would violate 1367 b

28 U.S.C. § 1367
shares a common nucleus of operative facts

REMOVAL
28 U.S.C. § 1441, 1446, 1447
REMOVAL TO FEDERAL COURT
1441 a - if the Pl could have filed it in fed court to begin with, then def. has that choice too
1441 b - A def who is at home (like home state) being sued in diversity cannot remove
Paula can file in her home state and still invoke diversity jurisdiction
all defendant's have to join in notice of removal and all have to be able to remove
One def who is at home destroys removal for everyone
 
1446 - procedure for removal
1446 a - as soon as def files notice of removal with federal court, the case is in federal court
The federal court then decides whether the removal was proper.
State court finds out later from federal court.
1446 b - deadlines - 30 days after def is served with complaint
Caveat - provision for cases that become removable later on
The def. has another 30 days to decide.
One year removal if the diversity change (like if they settle with a party, or raise damages)
 
1447 - tells district court what to do after removal
Plaintiff has 30 days to complaint about it after def files for removal.
1447 c - subj matter jur is critical
Required by article 3, 1331, and 1332

CATERPILLAR INC V. LEWIS (1996) Ginsburg


Whether the absence of complete diversity at the time of removal is fatal to federal-court adjudication?
No
Once a diversity case has been tried in federal court, considerations of finality, efficiency, and economy
become overwhelming.

VERTICAL CHOICE OF LAW


ALL OF THESE COME INTO PLAY IF THERE IS NO SPECIFIC FEDERAL RULE TELLING YOU
WHAT TO DO.
Byrd: bound up with substantive rights
Outcome determinative test (York) - mixed as to whether you should apply state or fed law
Twin aims of Erie (Hanna)
Forum shopping - would support having state rules in federal court
Fairness - we hope there are not huge discrepancies, okay to use either one
Federal interests (Byrd Balancing test) - would following the state rule invade a federal interest

One kind of federal statute you can discuss if they are valid on exam -rules enabling act - possibility that
substantive things could be snuck into the rules of civil procedure; section 2072 says can't be substantive
TEST: IS IT PROCEDURAL OR SUBSTANTIVE?
"arguably procedural" = it is okay
The SC has never found a rule to be substantive in the FRCP
Rules enabling act - constitution gives congress power to create judicial system; therefore make rules

THE RULES OF DECISION ACT


28 U.S.C. § 1652

ERIE RR V. TOMPKINS (1938)


The purpose of the Rules decision act was in all matters where federal law is not controlling, the federal
courts exercising jurisdiction in diversity of citizenshipp cases would apply as their rules of decision the
law of the State, unwritten as well as written.

What are the grounds for the Erie decision?


1. Ordinary statutory argument
2. Not fair that the outcome is diff depending on what court
3. A lot of manipulation to try to get into a specific court.

Murkey part of Erie - dissent - line between sub and proc law, and no one doubts federal power to
make procedure. Even under Erie, the federal courts get to make their own procedures.
 
Un-guided Erie choice - making a choice whether to follow a specific state process without having
guidance from federal law.

After Hanna, see if there is valid controlling law.


 

 
How to interpret a statute:
1. Direct evidence of congressional intent
2. Policy
a. Twin aims of Erie (hana):
i. Forum shopping
ii. Inconsistencies/unfair outcomes
1. Outcome determinative test of York.
 
 
b. Bound up with substantive rights - meaning state law should apply if…..
i. Part of the right you have

Should we adopt a state practice?


1. Is there federal law telling me not to?
i. Federal law needs to be on point (is there a conflict?) and valid (is it constitutional?)
1. If it's a rule of C.P. it must comply with the Rules Enabling Act (which means it
has to be about procedure and can't modify substantive rights)
a. Judge Harlan thinks this rule is too easy
ii. If ans to q. 1 is yes, then OBEY FEDERAL LAW. FEDERAL LAW PRE-EMPTS
STATE LAW.
iii. IF NO, then go thru our unguided Erie analysis and decide if the state practice is
substantive or procedural, and follow state law if its substantive (by Rules of Decision
act).

Erie - tort liability for negligence


York - SOL
Byrd - choice between judge and jury
Hanna - service of process.
GUARANTY TRUST CO V. YORK (1945)
Statute of limitations issue.
Outcome determinative test
It does not matter if the SOL is substantive or procedural, it's whether if the federal court disregards it,
will it significantly affect the result of litigation.
The outcome of litigation in federal court should be substantially the same, so far as legal rules determine
the outcome of a litigation, as it would be tried in a state court.

BYRD V. BLUE RIDHE RURAL ELEC. COOP (1958)


Dispute over how to decide if worker could sue in tort or workers comp. Issue of Judge vs. Jury. Rule for
employee – jury trial.
York test - in what sense if this an outcome determinative test? Weak sense. It's not systematically
determinative, but it is something the lawyers think affect and can change the $$ settlement of the case.
 
Brennan brings in new issue- that there is a federal interest - 7th amendment right to trial by jury;
importance of juries in federal system.
Byrd - not intuitively outcome determinative
Brennan struggled with the fact that it could be

 THE RULES ENABLING ACT AND FEDERAL RULES OF CIVIL PROCEDURE


28 U.S.C. §2072
Rules should be procedural and not abridge, enlarge, or modify any substantive right.

RULE 82

HANNA V. PLUMER (1965)


This case arises out of a car accident. Defendant is the estate of one of the driver's. He wants MA law to
apply (req. personal service on executor of estate) because plaintiff served him according to FRCP Rule
4(d)(1) (he gave to his wife).

Hanna says that when there is a valid federal law, we need to follow it
It is difficult to say this is "outcome determinative" permitting the wife to receive service rather than the
husband. This is not sufficiently substantial to raise the kind of equal protection problems Erie raised.
Underlying disagreement with justice Harlan's concurrence
2 aspects that are imp
1. He proposes an alternative test for distinguishing substantive from procedural - whether the rule
regulates primary conduct (inside courtroom vs outside)
Erie would be primary condct because it is telling def's how to avoid liability
Things that tell the court how to operate - like service of process rule should be considered just
procedural

3 phases of Erie
1. York - state staute of limitations prevailed
2. Byrd and Hanna - upheld federal practices
3. May have started in 1996 with Gasperini
1. Instead of following state prcatice or federal, compromise to accommodate interests of
both.
2. State practice conflicted with the 7th amendment. They cut down jury verduct. Federal
courts cannot do that.
3. The compromise said that the trial judge could adjust the damages if excessive. There was
history in common law, so it wouldn't violate the 7th amendment.
 

PRECLUSION (respect for judgment)

Claim preclusion - (res judicata - "the thing has already been decided") prevents you from re-trying a
case that has already been tried; blocks whole claims - new claims from same incident you already
litigated. Plaintiff sues one of the drivers under the tort theory of negligence. Claim perclusion prevents
another negligence suit being filed. Also prevents a new legal theory - like I.I. E.D.
Elements: 1. same claim, 2. same parties, 3. final judgment 4. on the merits
 
 
Issue preclusion - (collateral estoppel) - exists for the sake of efficiency; prevents one party from
disputing particular issues, doesn't get to argue the same point again (like if employee was an employee
or a contractor)
 
Same issue
Actually litigated and decided in prveious case (have actual judgment)
Has to have been essential to the judgment
Same party (at least one of them has to be the same - the one stuck with the judg)
 

CLAIM PRECLUSION
ARTICLE IV §1
Full faith and credit clause

28 U.S.C. §1738
Full faith and credit.

SAME CLAIM

FRIER V. CITY OF VANDALIA (7TH CIR. 1985)


Parked on street and cars towed. Frier lost in state court. Then he filed a federal complaint saying that
the city had not offered him a hearing before they took the cars and invoked the 14th amendment and 42
USC 1983.
Whether Frier is barred from bringing a federal due process claim by preclusion? Yes
Causes of action are identical where they are based on a "common core of operative facts."
Claim preclusion is designed for parties to consolidate all related matters into one suit. Prevents
oppression to defendants.  If Frier had filed the current complaint in state court, he would have lost under
claim preclusion, therefore he loses under federal court as well.

SAME PARTIES
SEARLE BROS. V. SEARLE (UTAH 1978)
Parents divorced, sons brining action against Mom to get property back which they claim is theirs.
Whether the sons are precluded from bringing this suit that arose from ther parents divorce proceedings?
No
4 tests:
1. Was the issue decided in the prior adjudication identical with the ones presented in the action in
question?
2. Was there a final judgment on the merits?
3. Was the party against whom the plea is asserted a part or in privity with a party to the prior
adjudication?
4. Was the issue in the first case competently, fully, and fairly litigated?
 
Issue 2 - the divorce was a final judg on the merits
Issue 3- not parties in the first action
 
In privity - person in interest with another that he represents the same legal right.
 
In the divorce, father was action individually as father, not as a rep of the partnership.
The right to intervene as party in the prior suit does not bind the party in the subsequent suit where
he failed to so intervene.

Claim preclusion
Due process clause is the limiting factor of the preclusion doctrine

1. Same claim – common core of operative facts


Two rules -
Same transaction test (or series of transactions) - broader test - These two claims arise from
same incident, dispute
Same evidence test (narrower, less preclusive)

2. Same parties
1. in privity; - classic example is landowner, land issues get passed down to new owner
2. Control - like a group with many members

3. Final judgment
Some states say that while the appeal is pending, the judgment is not final
Some states say the opposite and then deal with the problems that arise if it gets reversed.
4. On the merits

PRECLUSION MEETS CHOICE OF LAW

SEMTEK V. LOCKHEED MARTIN (2001)


Originally filed in CA where the SOL was 2 years. Wants to bring in MD under 3 year SOL.
Dismissal not on the merits - lack of jursdiction, out of SOL
Whether dismissal for failure to mmeet SOL should be preclusive or not? Whether CA judgment has
precluded whole claim?
Full faith and credit.
Kind of a mystery how MD courts will figure out how CA will rule on this issue.
Semtek- the intiial judg is in federal court -
Diversity case, applies CA substantive law; under York SOL are substantive and should follow
state law, CA is 2 years, and plaintiff has missed it, so dismiss with prejudice
First question, was there a federal rule that applied? Was it rule 41? No.
Adj on the merits under 41b means don't come back to the same court according to this opinion.
(interpret to apply only to rendering court)

do unguided Erie test. Why consider this substantive?


Worried about vertical forum shopping (state v federal court)
Not worried about vert for shopping by plaintiff, courts think Def will remove the case so
they can get a dismissal on SOL and have it be preclusive.
Inequitable outcomes are a possibility
Federal interests - the court is concerned that the federal courts have a strong interest in controlling the
effects of their own judgments. Having control over what it is they decided. Example - some states might
not recognize a dismissal as a sanction as preclusive. If the fed court dimsiised as a disc sanction, we
can't have state law overriding it.
 
In gasperini - 7th amendment vs. state interests, the court made up a new law that in diversity cases
governed by NY sub. Law, federal district courts will review the size of the verdicts. -- federal law
because federal court made it up.
 
Choices originally - CA or Federal
The federal rule the SC comes up with is - we'll follow the state rule most of the time, not because we
have to, but because we choose to because we are worried about Erie concerns. We also want to have
control over our judgments.
Compromise rule - Draft a federal rule - follow state rules unless there is a good reason not to.

Semtek
Claim 1
Cal. Fed ct
Diversity
CA subst. law
Fed procedure
 
Claim 2
Md. State court
Md. Substantive law
Md. Procedure
This court's first job is to interpret the dismissal from CA. The "footnote" on the dismissal needs to be
examined to see if it contained CA law or federal law.
It doesn't matter if the second suit was filed in state or federal court
They are still going to use MD law
The issue the court is stuck on is the details regarding the dismissal.

SC didn't decide what CA law said - they are making MD do that.


 
Holding : the preclusive effect of the judg of a federal ct sitting in diversity is governed by federal
common law; and the fed common law rule of preclusion for diversity cases is to adopt the preclusion law
of the state in which the fed court is sitting unless there is a good reason (some imp. Federal issue) not to.
 

ISSUE PRECLUSION

Same issue
Actually litigated and decided
Essential to the jmt
Same party

COLLATERAL ESTOPPEL
OFFENSIVE – when Plaintiff seeks to foreclose the def. from litigating an issue the def. has
previously litigated unsuccessfully in an action with another party.
DEFENSIVE – when Def seeks to prevent a plaintiff from asserting a claim the plaintiff has
previously litigated and lost against another defendant.

SAME ISSUE
ACTUALLY LITIGATED AND DETERMINED

ILLINOIS CENTRAL V. PARKS (IND. APP. 1979)


Bertha - sues for injuries
Jessie - sues for loss of consortium (derivative claim)
RR says it was contributory negligence which caused the accident so his claim for loss should be denied
Jessie loses - but we don't know because it could have been contrib or there could have been no damages
 
Case 2 - jessie is suiing RR for his injuries
Separate claim because this jurisdiction follows the same evidence test
If this stte had followed the same transaction test, it would be precluded.

Offensive non-mutual issue preclusion (her fave phrase in law)


 
Inadequate incentive to defend 1st case
"wait and see" problem

ESSENTIAL TO THE JUDGMENT


In order to be essential to the judg it had to be the only path to get there.

BETWEEN WHICH PARTIES?

PARKLAND HOSIERY V. SHORE (1979)


Shareholder action and SEC action.
Whether a party who has had issues of fact adjucated adversely to it in an equitable action may be
collaterally estopped from relitigating the same issues before a jury in a subsequent legal action brought
against it by a new party.
Holding: Yes - they can be stopped from litigating it again.
Def's are c.e. from relitigating the ? Of whether the proxy stmt was materially false and misleading.
 Offensive use of collateral estoppel - pl seeks to foreclose def from litigating an issue the def has
previously litigated unsuccessfully in an action with another party.
Defensive - def seeks to prevent pl from asserting a claim the pl has previously litigated and lost against
another def.
Until recently, the scope of coll est was limited by doctrine of mutuality of the parties.
Mutuality doctrine - neither party could use a prior judg as an estoppel against the other unless both
parties were bound by the judg.
Court abandoned Mutuality in Blonder-tounge case.
Blonder-tounge was defensive use of coll est
This case is offensive use
Offensive does not promote judicial economy like defensive does because the wait and see approach will
increase litigation; unfair to def to defend mult suits.
 
RULING:allow offensive coll est but allow trial courts broader discretion.
In this case, c.e. is okay; pl could not have joined the SEC action, no unfairness, def had every reason to
defend SEC suit to best of its ability; SEC decision is not inconsistent with any other prior decisions.
 
Factors the court has:
Wait and see problem
Inadequate incentive to defend 1st case
No prior inconsistent decisions
Different procedural opputunities
(last 3 - fairness to the def)

Court started allowing non-mutual preclusion, both offensively and defensibely


 
Non mutual defensive use of issue preclusion is less controversial
IP or defamation cases,
Movie star loses case with enquirer because stmts were true.
She sues housekeeper, under modern approach where mutuality is not required, and this issue would be
precluded. Less controversial - when someone is using preclusion as a shield

Parklane is where thr SC said offensive estoppel is okay, but you have to use the factors set forth.
 
Preclusion of re-litigating questions of fact - like negligence
Not pure matters of law - like interpreting law
Narrower
Easier to re-litigate a question of law than it is a question of fact

You might also like