Civil Procedure Outline

Themes 4
Remedies 4
Law – Damages 4
Punitive damages 4
Exxon Shipping Co. et al v. Baker et al 4
Purposes 5
Due Process 5
BMW factors (guideposts) 5
State Farm 5
Phillip Morris 5
The Repeat Punitive Damages Problem 6
Nominal damages 6
Statutory damages 6
Sony v. Tenenbam 6
Equity – Injunctive Relief 7
Scope of injunctions 7
Nationwide injunctions 7
Test for Injunctions (eBay) 7
eBay v. MercExchange 7
The Timeline of Litigation 8
Pleadings 8
Complaint 8
Dioguardi 8
Conley 8
Twombly: 8
Ashcroft v. Iqbal 8
Applying Twiqbal 9
Answers, Motions, and Affirmative Defenses 9
Discovery 10
Tools: 10
Privileges: 10
Sanctions 10
Goodyear v. Haeger 11
Summary Judgment 11
Fact-Law Distinction 12
The Trilogy 12
Scott v. Harris 12
Judge vs. Jury – 7th Amendment 13
Right to a Jury 13
Jury trial if: 13
Facts about juries: 13

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Ways to control juries 13
Feltner v. Columbia Pictures 14
Markman v. Westview Instruments 14
Dismissals, Directed Verdicts, JNOV, New Trial Motions, Motions to Vacate Judgment 14
Judges vs. Juries 15
Timeline of Dismissing the Case 16
Appeals 16
Cooper v. Leatherman 16
Standards of review (generally) 17
Standard of review for damages: 17
Trial judges vs. appeals judges 17
Settlement 18
Alternative dispute resolution (ADR) 18
Personal Jurisdiction 19
Personal Jurisdiction checklist 20
Sources of Law 20
Traditional Bases 21
The Modern View: “Minimum Contacts” 21
International Shoe v. State of Washington 22
Purposeful Availment and Stream of Commerce 22
World Wide Volkswagon v. Woodson 22
Intentional effect/aim/target 22
Calder v. Jones 22
Walden v. Fiore 22
Bristol-Myers Squibb 23
Stream of Commerce 23
Asahi v. Superior Court 23
J. McIntyre Machinery, Ltd. v. Nicastro 23
Fairness factors 23
Panavision Framework 24
Venue and Forum non conveniens 24
Atlantic Marine 24
Subject Matter Jurisdiction 25
Subject Matter Jurisdiction Checklist 25
Federal Court vs. State Court 25
Sources of Law 26
Federal question “arising under” 26
Mottley 27
Grable & Sons v. Darue Engineering 27
Gunn v. Minton 27
Diversity Jurisdiction 28
Sources of Law 28
Citizenship 28
Removal 29

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Joinder 29
Joinder Checklist 29
Joinder of Parties 33
Joinder of Claims 34
Third-Party Joinder (RUle 14) 34
Supplemental Jurisdiction 35
Checklist 35
Source of Law 35
Owen v. Kroger 36
Amount in Controversy Aggregation 36
AlLapattah Glitches 36
PRECLUSION 36
Claim Preclusion 37
Taylor v. Sturgell 38
Issue Preclusion 38
Parklane Hoisery v. Shore 38
CLASS ACTIONS 39
Certifying the Class 39
Wal-Mart V. Dukes 40
personal jurisdictin in Class Actions 40
Comcast 41
Rule 23 (c)(4) and (c)(5) 41
Whirlpool cases (Moldy Washing Mashines) 41
Recent Developments 41
Smith v. Bayer 41
Class Action Fairness Act 42
Supplemental Jurisdiction under CAFA 42
Class ACtion Arbitration Clauses 42
AT&T v. Concepcion (2005) 42
Am-Ex v. Italian Colors 43
Epic Systems 43
CFPB Rule 43
Multi-District LItigation Panels (MDLs) 43
Settlement 43
Settlement classes 44
Examples of settlement approval and rejection 44
NFL Concussions Settlement Approval 44
Subway Settlement Rejection 44
Alternatives to class actions 44
The BP Oil Spill Litigation 44
The BP litigation and compensation funds 45
BP Settlement 45
BP at the 5th Circuit 45
BP at the Supreme Court 46

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THEMES

(1) Competing aims of civil procedure

(2) Judge vs. jury
(3) Institutional competence
(4) Rules vs. Standards
(5) Due process…for whom?
(6) Who Decides
(7) Goals of Procedure
(8) Tailoring vs. one-size fits all
(9) “Hurdles” in Litigation

REMEDIES

LAW – DAMAGES

❖ trials at law can have juries

o jury determines damages

PUNITIVE DAMAGES

EXXON SHIPPING CO. ET AL V. BAKER ET AL

● SUMMARY: Hazlewood, supertanker’s captain, had a history of drinking (Exxon knew), ended up
causing the oil tanker to run up on an underwater reef in Prince William Sound. Millions of gallons
of oil into the sound due to reef grounding. NO precedent as a matter of Federal CL re: maritime
damages (issue of first impression).
● HOLDING: The punitive damages awarded in this case were excessive as a matter of maritime
common law. In the circumstances in this case, the court should be limited to an amount equal to
compensatory damages.
● KEY TAKEAWAYS:
o Three approaches considered:
1. Verbal – rejected b/c difficult to produce consistency as shown in analogous
business and criminal sentencing
2. Punitive Cap – rejected b/c there does not exist a standard tort or contract injury,
which makes settling on $$ as appropriate across the board difficult; court cannot
predict when common law opportunity to change if needed would next arise
3. Ratio/Maximum Multiple in comparison to compensatory damages ✓
o What ratio is most appropriate? 1:1 is fair upper limit for maritime cases
▪ Looked at median ratio less than 1:1, found from thousands of judge and jury cases
o Historical Purposes of Punitive Damages (then called “exemplary,” w/in comp)
▪ Extraordinary wrongdoing (Wilkes)
▪ To make an example (if damages themselves were the extraordinary element)
▪ To compensate for more intangible injuries (that would have otherwise been
unaddressed in compensatory damages)
o Procedural considerations for constraint: unpredictability, consistency, arbitrariness,
fairness

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 o Souter looks for inspiration in: criminal law, other countries (UK, Canada, Australia), States’
statutes (hard dollar, ratios, verbal), real awards (studies, judges v. juries), history
(Hammurabi)
o What does Exxon want at this point?
▪ Clarity above all for what to expect to see/need to do in the future
▪ Clear up the company’s image (PR)
▪ Whatever it takes to lower punitive damages (responsibility to shareholders)
o Criticisms of Exxon:
▪ Does not tailor to every circumstance (what if compensatory is strangely low for a
terrible harm?)
▪ Shouldn’t this be left to statutory law? Competence question. (counter: the whole
reason PD exists is because of common law, courts should clean it up)

PURPOSES

❖ Deter
o Optimal deterrence: pay for what you broke, otherwise fine behavior [wrongdoer can still
come out ahead]
o Absolute/complete deterrence: net loss; regardless of whether you cover harms, you will not
come out ahead
❖ Punish

DUE PROCESS

Due Process Requires:

❖ Opportunity to defend
❖ Not arbitrary or unpredictable
❖ Notice
❖ Fairness

BMW FACTORS (GUIDEPOSTS)

(1) degree of reprehensibility of defendants conduct

(2) reasonableness of ratio of punitive to compensatory damages
(3) comparableness civil and criminal sanctions

STATE FARM

(1) Few awards that go beyond a single-digit ratio will satisfy due process

PHILLIP MORRIS

(1) Didn’t touch whether award was excessive

(2) Suggested more jury instructions (Breyer)

Exxon BMW State Farm Philip Morris

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Fed. Common Law Constitutional Law (Due Process)

1. Reprehensibility Jury Instructions

9:1?
1:1 2. Reasonable Ratio +
(Single Digit Ratio)
3. Compare w/ Other Penalties More Jury Instructions

Rule Standard Rules-ish

THE REPEAT PUNITIVE DAMAGES PROBLEM

❖ What if every case punishes for the same harm/conduct?
❖ If we solve it, why should only one plaintiff get punitive damages?
❖ Ways in which unexpectedly excessive damages may arise: redundancy, hyper-enforcement
o Both have variable component (varies PROPERLY w/# victims, nominal counts), fixed
component (should be awarded only once for the given act)
o Issue is when fixed portion is repeatedly awarded along with the variable portion
o Neutralize the issue: allow courts to run concurrently the fixed portion
▪ **PD are DEF-focused rather than PL-focused (award here often doesn’t go to PL
anyways)
❖ Concurrent Damages: they don’t add up, they just run at the same time. Company pays the bigger
one. Has its issues/drawbacks:
o Timeline for administrability (how do you know when all lawsuits done)
▪ But this is DEF-focused anyways?
o What if the award is too low and doesn’t successfully deter?
o How do courts consider different jurisdictions? Each case would need to be super clear
about exactly what is covered [reprehensibility for people of the Nation versus
reprehensibility for the people of Oregon]

NOMINAL DAMAGES
❖ For symbolic purposes

STATUTORY DAMAGES
❖ Context: patent law

SONY V. TENENBAM

❖ need to follow cases like Williams for statutory damages; BMW and State Farm don’t apply to
statutory damages

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EQUITY – INJUNCTIVE RELIEF

❖ court decides

SCOPE OF INJUNCTIONS
❖ May command outside territory
❖ No more burdensome than necessary for complete relief
❖ Equity has much more discretion that damages
❖ Damages and equity can go together
o Damages for the past, injunction for the future

NATIONWIDE INJUNCTIONS
❖ Would limit judge-shopping
❖ Practically, don’t want to litigate in every circuit – inefficient
❖ If it’s unconstitutional in one state, it’s unconstitutional everywhere
❖ Confusion for travelers

TEST FOR INJUNCTIONS (EBAY)

(1) Irreparable injury - is $$ good enough for injury that has occurred?
a. no legal remedy would sufficiently protect the plaintiff’s interests (1) and (2) are
b. award of damages would be inadequate to make up for the harm functionally the
c. “irreparable harm” (frequent): loss of life, loss of property with same
sentimental value
(2) Inadequate remedy at law
a. prove it will not be pointless (nominal injunction not a thing)
b. infeasible if court lacks the jurisdiction
(3) Balance of hardships
a. balancing of the equities, taking into account relative burdens
b. inconvenienced plaintiff doesn’t cut it if the defendant is heavily hamstrung
(4) Public interest
a. Public interest would be disserved by a permanent injunction

EBAY V. MERCEXCHANGE
❖ SUMMARY: eBay said to have infringed upon patent for facilitating sake of goods between
individuals through a central authority. No agreement reached in initial attempts for licensing.
❖ HOLDING: Award of a permanent injunction should not be the presumed course of action under
the Patent Act, as suggested by the “general rule” that the Court of Appeals originally applied.
❖ KEY TAKEAWAYS: Dist. Ct. recited the four-factor test but did not properly apply it in denial;
Court of Appeals’ reversal with “general rule” that “courts will issue permanent injunctions against
patent infringement absent exceptional circumstances” is too broad.
❖ MAJORITY OPINION [Standard] – 2 justices
o Four-factor test applies

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 o Right ≠ Remedy (right to exclusion doesn’t mean that the remedy is always exclusion)
o Should be determined case-by-case
❖ ROBERTS CONCURRENCE [Rule-ish] – 3 justices
o Right = Remedy
o As determined by “history”/tradition – practice should inform how these cases continue to
be handled
❖ KENNEDY CONCURRENCE [Standard] – 4 justices
o Right ≠ Remedy?
o Times are different (case-by-case); equitable discretion over injunctions by Patent act allow
court to adapt to tech and legal developments in the patent system (threat of injunction
easily becomes unfair bargaining tool)

THE TIMELINE OF LITIGATION

PLEADINGS

Governed by Rules: 1, 2, 3, 7, 8, 9, 12(b)

COMPLAINT
❖ Rule 8(a): “[A] short and plain statement of the claim showing that the pleader is entitled to relief”

DIOGUARDI

❖ Opened the door for pro se litigants by making pleading requirements minimal

CONLEY

❖ Upheld view from Dioguardi – “short plain statement” rule

TWOMBLY:

❖ Begins revolution:
a. imposed plausibility requirement at pleading stage of federal antitrust action
b. not just conceivable, but plausible (antitrust concept)

ASHCROFT V. IQBAL

❖ Legal conclusions do not have to be taken as true

o Only have to assume facts to be true, not law
❖ Plausibility

Lessons from Iqbal

Theoretical Real-World Broader Lessons?

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 ● Judicial discretion
increases (more potential
for variation in
outcomes)
● F/L is back
● Accelerates merits
● Information asymmetry
more important
● Overpleading
● “underpleading” (less
notice by already throwing
in the ring the legal
argument to be brought)
● “Bad cases make bad
law” (atypical cases
should not be used to
set precedent for other
cases)
● Context: who else can
do something about it?

Conley Twombly Iqbal

Aim Aim is notice Notice + cost of discovery Notice

Law/Fact Law/fact Facts (need some) Facts (not law) 2-step

distinction?

Standard “taken as true” “taken as true”

“consistent with...” + plausibility (not merely “consistent

+ plausibility (not merely “consistent
with…” with…”

APPLYING TWIQBAL
❖ 12(b)(6) motion:
o Disregard conclusory allegations
o Do the remaining facts, taken as true, present a “plausible” claim (where plausibility exceeds
mere consistency)?
❖ Winning Twiqbal Scenarios
o What is alleged is not even illegal
o There were not enough facts to support a plausible claim

ANSWERS, MOTIONS, AND AFFIRMATIVE DEFENSES

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 ❖ 12(b) – 7 permitted motions to dismiss
o favored defenses (can be raised at any point)
▪ failure to state a claim
▪ failure to join an indispensable party
▪ lack of subject matter jurisdiction
o all others are waived if not raised before answer or in answer
❖ 8(b): Affirmations or Denials
❖ 8(c): Affirmative defenses
❖ Answers can contain:
o Admissions and denials
▪ Need to admit or deny each averment
o 12(b) defenses
o affirmative defenses
o counterclaims and cross-claims (joinder)
o defendant can add parties
o jury trial request

DISCOVERY

❖ Scope: 26(b)(1)

TOOLS:
❖ Interrogatories
❖ Depositions
❖ Requests for documents and admissions
❖ Stipulations
❖ Automatic disclosures at outset of case

PRIVILEGES:

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 ❖ Attorney/client
❖ Doctor/patient
❖ Souses
❖ Priest/rabbi
❖ Work product (Hickman)

SANCTIONS
❖ Discovery-specific:
o Rule 37: Failure to Make Disclosures or to Cooperate in Discovery; Sanctions
❖ General litigation sanctions:
o “inherent power” of the judge
o Rule 11 (catch-all)
▪ Generally, a rule about making proper representations to the court
▪ If violated, party can motion for sanctions or a court can grant them sua sponte
o § 1927
▪ Any attorney or other person admitted to conduct cases in any court of the United
States or any Territory thereof who so multiplies the proceedings in any case
unreasonably and vexatiously may be required by the court to satisfy personally the
excess costs, expenses, and attorneys’ fees reasonably incurred because of such
conduct.

GOODYEAR V. HAEGER
❖ federal court can only sanction a litigant for bad-faith conduct by ordering it to the opposing side’s
legal fees that were incurred as a direct result of the misconduct
o requires “but-for” test

SUMMARY JUDGMENT

❖ 2 Questions:
(1) Is there a genuine dispute as to a material (i.e. outcome-relevant) fact?
(2) Is the movant entitled to judgment as a matter of law? (in the light most favorable to the non-moving
party, could a reasonable jury find either way?)
❖ How do you show that there’s nothing?
o Celotex – moving party can prove a negative – if plaintiff didn’t show any evidence to the
contrary, then that is enough

Motion to Dismiss Rule 56 Summary Judgment

Who decides? Judge Judge

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What exact question? Did plaintiff state a claim?
1. Is it even illegal?
2. Did you allege
enough?
“Is there a genuine dispute about a material
fact?
1. Is it even illegal?
2. Did nonmoving party show enough
evidence in the record?

Based on what? Complaint “taken as true” The record “in light most favorable to the
nonmovant”

Why? Kick out case before Should case even go to trial?

discovery
● Trial is about finding of fact
“Should we allow discovery?” ● Is there anything that is disputed?

FACT-LAW DISTINCTION
❖ question of fact for jury, question of law for judge
❖ mixed question of law and fact: some answered by judge, some answered by juries
o allocation here is crucial
o sound administration depends on idea that one judicial actor is better positioned than
another to decide the issue in question
❖ very notion of summary judgment presupposes that judges are permitted to enter the domain of factual issues
❖ judiciary has created a threshold legal issue in order to decide the factual issue: it is deemed a
legal question whether there is sufficient evidence to make a rational factual determination
o this results from the idea that: in order to ensure juries do not act irrationally, judges must be
certain that before the jury can decide a factual issue on behalf of the party with the burden
of production, there is sufficient evidence to permit reasonable people to make such a
finding

THE TRILOGY
❖ Celotex
o Burden of proof can be satisfied by demonstrating the absence of evidence to support the
non-moving party
❖ Anderson v. Liberty Lobby
o Judge should incorporate standard of proof for trial in summary judgment
❖ Matsushita v. Zenith
o If evidence as a whole is implausible or not credible, can dismiss
o Foreshadows Twombly

SCOTT V. HARRIS
❖ In the light most favorable to non-moving party, could a reasonable jury find either way?

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 ❖ Reasonableness test:
o Weighing nature and quality of intrusion on 4th amendment rights against importance of
government interests justifying intrusion
o Number of lives at risk and relative culpability of people involved
❖ Stevens Dissent:
o Speculation as to what would happen if chase abandoned is unconvincing as a matter of law
o Disagreement within SCOTUS specifically with respect to the facts means that there is
something for the jury to decide
❖ Class discussion: What can we do now to fight SJ in light of video evidence?
o Point to Stevens’ opinion
o Point to study showing how different people see
o Appeal to context (there’s always more)
o Video doesn’t tell us anything about how a jury will decide reasonableness for Scott’s seizure
▪ No matter how clear facts seem to be, at the end of the day we’re talking about
mixed law/fact
o Challenge the truth of the images

JUDGE VS. JURY – 7TH AMENDMENT

RIGHT TO A JURY

JURY TRIAL IF:

(1) Statutory basis
OR

(2) 7th Amendment (Feltner, Markman)

AND

(3) you ask for it

OTHERWISE

(4) Beg judge – 39(b)

OR

(5) All consent – 39(c)

❖ Right to jury trial is lost if parties don’t ask for it

FACTS ABOUT JURIES:

❖ Can waive right to jury trial through Rule 38
❖ Can motion judge for jury even if right doesn’t exist
❖ Some statutes also provide right to jury
❖ SCOTUS has ruled that in mixed questions of law and equity, a court cannot resolve the legal issues
or equitable issues in such a way that precludes a jury from determining the legal issues in such a way
that is inconsistent with the jury’s resolution of the legal issues

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 ❖ SCOTUS has found a constitutional guarantee to have all legal matters tried to a jury first
o then judge may resolve remaining equitable matters in a manner “not inconsistent” with the
jury’s verdict

WAYS TO CONTROL JURIES

❖ Rules of Evidence
o Controls what is admitted (can exclude evidence)
❖ Special verdict
o the jury no longer finds for the PL or DF but instead makes findings on particular issues
❖ Instructions – law lives in jury instructions
o Define relevant law
❖ Bifurcation/trifurcation
o Separate elements of case into separate trials
o Divide trial into phases
o Saves time, keeps spillover effects to a minimum

FELTNER V. COLUMBIA PICTURES

❖ Issues:
o Does case get jury trial?
o Does jury get to decide amount of damages?
❖ Holding:
o Right to jury includes right to jury determination of statutory damages
❖ Analysis
o Looks at history of statutory damages to determine whether more similar to law or equity

MARKMAN V. WESTVIEW INSTRUMENTS

❖ Issue: is there a jury trial right to interpretation of the patent claim?
❖ Holding: No
❖ Analysis
o No direct antecedent of modern claim construction
o Functional considerations
▪ Relative interpretive skills of judges and juries
▪ Statutory policy considerations
o Judges more likely to interpret properly
o More likely to be uniform

DISMISSALS, DIRECTED VERDICTS, JNOV, NEW TRIAL MOTIONS, MOTIONS TO

VACATE JUDGMENT

❖ Voluntary Dismissal

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 o Rule 41(a)
▪ (1) – when plaintiff has right to dismiss case voluntarily
▪ (2) – court’s power to permit plaintiff to dismiss voluntarily
❖ Involuntary Dismissal
o Rule 12(b) dismissals
o Ultimate sanction for failing to comply with orders
❖ Directed Verdict
o Rule 50(a)
o If plaintiff doesn’t show enough evidence to prove burden, can go to directed verdict
▪ Judge must consider evidence in light most favorable to plaintiff with all reasonable
inferences
▪ Can move for directed verdict at any point after plaintiff rests on that particular
issue
▪ Can move for directed verdict without a jury
❖ JNOV/Renewed Judgement as a Matter of Law
o Rule 50(b)
o Need to have asked for directed verdict before trial
▪ Allows jury to try even if judge is almost sure
o Constitutional concern:
▪ Jury verdicts not supposed to be reexamined
▪ Technically not reexamining (legal fiction)
▪ “court is deemed to have submitted the action to the jury subject to a later
determination of legal questions raised by motion”
o prevents need for new trial if JNOV is overturned on appeal
❖ Motions for a New Trial
o Rule 59(d): judge can grant new trial on own initiative
▪ If there has been a mistake by the judge
▪ Jury verdict inadequate or excessive
▪ Remittitur, additur
▪ Jury misconduct
▪ Attorney can also move for new trial
❖ JNOV vs. new trial
o new jury might find differently
o JNOV disposes of the case

JUDGES VS. JURIES

Judges Juries Other

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 ● Complexity ● Sympathetic ● King/dictator
Pros
● Uniformity ● Community morals ● AI
● More objective ● Cross-section (?) ● Arbitrator/mediator
● Secret ● Experts
● Good at assessing witness ● Agencies
credibility ● Coin/lottery
● Deliberative ● Mob
● Democratic legitimacy ● Trial by fire/ordeal
● Inquisitorial system: non-
adversarial (judge
● Habit/jaded ● Sympathies investigates)
Cons
● Biases ● Mob
● Political ● Unfair pool
● Secret
● Bias

TIMELINE OF DISMISSING THE CASE

12(b)(6) 56 (SJ) 50(a) at 50(a) (after 50(a) (after 50(b) after

beginning PL rests) DF rests) verdict
of trial

Whom can DF DF, PL DF DF DF, PL DF, PL

motion?

Based on? Complaint Record Trial evidence verdict

Concern? “discovery- “trial- “Still trial-worthy?” “Jury worthy?”

worthy?” worthy?”

APPEALS

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 ❖ Rule 60
o Relief from judgment or order
❖ Rule 61
o Harmless error
❖ Require finality of decision
o Exceptions:
▪ Collateral order doctrine (e.g., qualified immunity)
▪ Interlocutory appeals
▪ Writs of mandamus and prohibitions

COOPER V. LEATHERMAN
❖ Court held that district court was wrong to apply “abuse of discretion” standard in review for
constitutionality of punitive damages
o Here, issue was one of law
o Doesn’t implicate the 7th amendment

STANDARDS OF REVIEW (GENERALLY)

Type of ruling Standard of review

Conclusion of law De novo

Finding of Fact “Clearly erroneous”

(defer to lower court
unless substantial
evidence if jury)

Discretionary ruling “Abuse of discretion”

STANDARD OF REVIEW FOR DAMAGES:

❖ Remittitur
o Appeals court  abuse of discretion
o Trial judge  grossly excessive/shocks the conscience

TRIAL JUDGES VS. APPEALS JUDGES

Trial judges Appeals judges

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 ● Familiar/closer (even ● Bigger picture (precedent)
Pros if mixed f/l) ● Closer to law (mixed l/f)
● Closer to facts ● More people
● Accountability ● Uniformity
● Local knowledge ● More time
● See things in court ● Accountability
● Only 1 person ● Takes longer
Cons (maybe also pro?) ● Potential for dissent (maybe also a
● Busier pro?)
● Politics
● “Cold” record

SETTLEMENT

❖ Settling in the shadow of the law

❖ “zone” of settlement
❖ Settlement
o Can happen at any time.
o plaintiff agrees to abandon his legal claim(s) in exchange for payment or other relief by
defendant
o contract, subject to the laws governing contracts
❖ Economic Analysis
o Simple Model
▪ formed beliefs, settlement possibilities in two quantities
▪ Assuming plaintiff risk neutral, minimum acceptable amount = [expected gain from
trial] - [cost of going to trial]
▪ If the plaintiff’s minimum acceptable amount is less than the defendant’s
maximum acceptable amount, a mutually beneficial settlement is possible.
▪ If the plaintiff and the defendant have the same beliefs about the trial outcome, then
there should always exist mutually beneficial settlements, because they can each
escape trial costs by settling.
▪ A mutually beneficial settlement exists as long as the plaintiff’s estimate of the
expected judgment does not exceed the defendant’s estimate by more than the sum
of their costs of trial.
o Interpretation of the Model
▪ Does existence of a mutually beneficial settlement amount imply that a settlement
will occur? while cannot exist without mutually beneficial amount, this does not
guarantee a settlement.
▪ Parties’ beliefs - what leads to a trial is not that t plaintiff is confident of winning,
but rather that he is more confident than the defendant thinks he has a right to be
● to the degree that parties come to similar beliefs about trial outcome,
settlement becomes more likely
● BUT beliefs will not always converge (though we generally expect them to
be close by the time of trial)
▪ Judgment amount - if size of judgment rises, likelihood of trial rises because greater
divergence in the assessments of likelihood of winning
▪ Legal expenses - larger legal expenses for EITHER party means greater chances of
settlement

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 ▪ Risk aversion - leads to greater likelihood of settlement

ALTERNATIVE DISPUTE RESOLUTION (ADR)

❖ ADR must be present in each court (but with local flexibility)

❖ mediation:
o neutral actor facilitates negotiated agreement
o doesn’t make decision
o evaluative vs. facilitative mediators
❖ arbitrator is neutral skilled decision-maker
o makes binding, final decision
o can be informal or mirror court
o roots in labor management disputes
o no right to a jury
❖ benefits:
o building trust
o results are superior
o promotes party control
❖ critics:
o doesn’t guard against power imbalances
o veils public implications of settlements
o generates private compromises - dangers to rights
o doesn’t save cost or time
❖ Four issues:
1. what degree of participation mandated by gov’t is consistent with ADR and
procedural justice?
2. when should courts decline to enforce contractual clauses mandating ADR because
of public policy?
i. courts have not been sympathetic to claims of duress or unequal bargaining
power
3. is ADR appropriate for public resources?
i. commonly used to resolve public sector disputes
4. should parties be able to privately negotiate access to judicial review?
i. judicial review available if award procured by corruption, fraud, or undue
means

PERSONAL JURISDICTION

❖ Can waive PJ but not filing 12(b) defense

Reasons (as PL/DF) Reasons (as policymaker) Choices of

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 location

Better law in one place Consistency/precedent (if this happens a lot, you want to Personal jurisdiction
consolidate it into a series of precedents) is about the choice
Cost/convenience between
Notice/expectations (don’t want a company to be sued NY/NJ/CA
Most sympathetic jury where they’re not expecting)
Subject-matter
Witnesses Prevent forum-shopping, gaming the system jurisdiction is about
(convenience)
the choice between
Resources (don’t want everyone to sue in the same place,
Public opinion/media state and fed courts
like EDTX for patent cases)

PERSONAL JURISDICTION CHECKLIST

□ Statutory authorization
o If state, long-arm statute
o If federal, Rule 4(k)(1)(A) (pretend to be state)
□ General (doesn’t matter where the claim arose)
o Individual
▪ domicile
o Corporation
▪ “at home” (BMS) (generally PPB or HQ)
o Such a substantial connection to state that corporation is generally there even if lawsuit isn’t
about that
□ Other Traditional bases for PJ (doesn’t matter where the claim arose)
o Service/Tag
o Consent (don’t object to PJ/sign forum selection clause)
o Property
o Domicile?
□ Specific Jurisdiction (arising out of the claim)
o Minimum Contacts
o Purposeful Availment
o Stream of Commerce
o Intentional Targeting
o Contact as a Result of Act by Defendant? “arising out of contacts”
□ Fair play and substantial justice (arising out of the claim)
o Fairness factors (Asahi) – not outcome determinative unless it is an Asahi situation

SOURCES OF LAW

20
TRADITIONAL BASES

❖ Presence in tangible sense

o Property (in rem, quasi in rem)
o Tag jurisdiction
o Consent:
▪ Carnival Cruise Lines v. Shute
▪ can consent to PJ

THE MODERN VIEW: “MINIMUM CONTACTS”

❖ Is there a long-arm statute (enumerated or co-extensive?

❖ Take every defendant case-by-case
❖ Plaintiff chooses where to sue, so their due process rights not implicated
o Even if there is a counterclaim

21
INTERNATIONAL SHOE V. STATE OF WASHINGTON
❖ Holding: A state may assert personal jurisdiction over any person with “sufficient minimum
contacts” with the forum state from which the complaint arises, so long as it does not offend
“traditional notions of fair play and substantial justice.”
❖ As long as they have “continuous, systematic, and substantial contact to a state that give rise to
activities sued on,” they can be sued there.

PURPOSEFUL AVAILMENT AND STREAM OF COMMERCE

WORLD WIDE VOLKSWAGON V. WOODSON

❖ Specific jurisdiction and “purposeful availment”
❖ Question:
o May an Oklahoma court exercise personal jurisdiction over a nonresident automobile retailer
and its wholesale distributor consistent with the 14th Amendment’s Due Process Clause
where the defendants’ only connection with Oklahoma is the fact that an automobile sold in
New York to NY residents became involved in an accident in OK?
❖ Result: No, Reversed.
o WWVW doesn’t have enough contacts there. There’s no evidence that any car of theirs had
ever been in OK before.
o WWVW has no activity whatsoever in Okla., they close no sales and perform no services,
solicit no business through persons or even advertisements, and in no way seek to serve the
Okla. market. “They avail themselves of none of the privileges of OK law.”no
personal jurisdiction.
▪ No “purposeful availment”
o DP argument.
❖ Weighs minimum contacts and purposeful availment against reasonableness of exercising personal
jurisdiction

INTENTIONAL EFFECT/AIM/TARGET
❖ Requires effects (Calder) and targeting (Walden)

CALDER V. JONES

❖ Found that jurisdiction is proper in CA based on “effects” of Florida conduct in California

o Intentional actions expressly aimed at California
o Knew that brunt of injury would be felt in California
❖ “effects” of behavior driving analysis
o in some tension with VW

WALDEN V. FIORE

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 ❖ held that there was no personal jurisdiction in Nevada because even though the effects were felt
there, it could have been any other state
o nothing specific to Nevada
❖ foreseeability not quite good enough

BRISTOL-MYERS SQUIBB

❖ California does not have PJ over BMS in this particular case because out of state harms don’t come
from any of BMS’s contacts in California
o The research center, distributor etc. were not about the drug at issue that had caused
❖ Strong reminder that it has to be a case arising out of the state contacts

STREAM OF COMMERCE

ASAHI V. SUPERIOR COURT

❖ (no majority opinion – coexisting doctrines)

o agreed on FPSJ and reasonableness
❖ Stream + (O’Connor)
o Design
o Advertising/marketing
o Servicing
o Set up distribution system
❖ Stream (Brennan)
o Foreseeability because regular and anticipated flow of products

J. MCINTYRE MACHINERY, LTD. V. NICASTRO

❖ (no majority opinion)

❖ plurality opinion:
o Not about fairness, about authority
o Cares about “there” not “fair”
❖ Concurrence (Breyer) potentially controlling
o Fairness analysis
o Seems like stream
❖ Asahi still dominant way to think about things
o But can think about use of distributor (if distributor is the one targeting, probably too
attenuated)
o NJ didn’t have PJ because not enough machines ended up there
o Regular and anticipated flow of products (stream)

FAIRNESS FACTORS
Originally from WWVW, also unanimous in Asahi.

23
 (1) burden on defendant and witnesses
(2) plaintiff’s interest in obtaining relief
(3) forum state’s interest in adjudicating dispute
(4) judicial interest in efficient resolution
(5) state’s interest in furthering fundamental procedural and substantive policies

PANAVISION FRAMEWORK
(1) nonresident must conduct some action or consummate transaction with forum or purposefully avail
himself
o purposeful availment: deliberate action purposely direct towards forum residents
(2) claim must arise out of results from defendant’s forum-related activities
o jurisdiction can attach if defendant’s conduct is aimed at or has effect in forum state
(3) exercise of jurisdiction must be reasonable
o extent of defendant’s purposeful interjection
o burden on defendant in defending the form
o extent of conflict with sovereignty of defender’s state
o forum state’s interest in adjudicating dispute
o most efficient judicial resolution of controversy
o importance of the forum to plaintiff’s interest in convenient and effective relief
o existence of alternative forum

VENUE AND FORUM NON CONVENIENS

❖ within the state, where do you go?

o Generally, pretty straightforward
❖ Proper venue is not a constitutional requirement
o can transfer without issues
❖ 28 U.S.C. § 1391(b): general venue statute
o District where any defendant resides if all defendants are residents of the same state
(1391(b)(1))
o Where a substantial part of the events giving rise to the claim occurred (1391(b)(2))
o If neither apply, a district in which any defendant is subject to personal jurisdiction
(1391(b)(3))
❖ 28 U.S.C. § 1404(a): FNC (permissive)
o FNC: transfer/dismissal device
o When is a forum so inconvenient that it might be unjust?
o Even if venue is proper, case should be heard elsewhere (generally outside the US)
o Factors: adequate alternative forum, private interest factors, public interest factors
❖ 28 U.S.C. § 1406(a): venue transfer (if forum is improper)

ATLANTIC MARINE

24
 ❖ Facts: Atlantic Marine moved to dismiss the suit, arguing that forum-selection clause rendered venue
in W.D. Texas wrong
o wanted to transfer case to E.D. of VA in alternative
❖ forum selection clause given controlling weight
o instead of dismissing the case, just transfer venue

SUBJECT MATTER JURISDICTION

❖ can’t be waived by parties’ consent (most favored defense)

SUBJECT MATTER JURISDICTION CHECKLIST

Federal question:

□ Is the issue “arising out of” a federal issue? (cite to § 1331)

□ Is it included in the plaintiff’s statement of the case, or just the anticipated defense? (Mottley)
□ Is it one of the things that is always a federal issue?
o Patent law
o Securities fraud
o Crime
o Bankruptcy
o Maritime law
□ Does it pass the Grable test – is the federal question:
o Necessarily raised
o Actually disputed
o Substantial to federal system as a whole
o Capable of resolution in federal court without disrupting federal-state balance
Diversity:

□ Is there complete diversity of parties?

o Look at “Citizenship” section to see where a party is from
□ Is the amount in controversy over $75,000?
Supplemental:

□ Is the claim so related to the one within the original jurisdiction that it forms part of the same case or
controversy?
□ No supplemental jurisdiction for claims by plaintiffs against persons made parties under Rule 14, 19,
20, (also 23 from Allappatah) or 24 if it busts diversity
□ Judge can also use discretion to decide not to exercise supplemental jurisdiction
Admiralty, etc.:

□ Does it relate to ambassadors, admiralty, US cases, interstate lands (as enumerated in ?

FEDERAL COURT VS. STATE COURT

25
 State Courts Federal Courts

● Expertise? ● Expertise?
Pros
● Local interest? ● Uniformity?
● More judges? ● Media coverage?
● Elected? ● Media coverage?
Cons
● Bias?

SOURCES OF LAW

FEDERAL QUESTION “ARISING UNDER”

❖ U.S. Constitution, Article III Section 2

o The judicial Power shall extend to all Cases, in Law and Equity, arising under this
Constitution, the Laws of the United States, and Treaties made, or which shall be made,
under their Authority
o Article III does not confer SMJ on lower federal courts
o because Congress has authority to create these courts, it also has the authority to define their
jurisdiction
❖ 28 U.S.C. § 1331
o The district courts shall have original jurisdiction of all civil actions arising under the
Constitution, laws, or treaties of the United States

26
 o Narrower than constitutional grant
o HOLMES TEST for determining when Mottley’s well-pleaded complaint rule is met: a suit
arises under the law that creates the cause of action
❖ 28 U.S.C. § 1338
o patent law, trademark, etc.

MOTTLEY
❖ Narrowed interpretation of statute “arising under” language beyond constitutional grant
o Only “arising under” when plaintiff’s statement of own cause of action shows that it is based
on those laws or Constitution
❖ “well-pleaded complaint” rule

GRABLE & SONS V. DARUE ENGINEERING

❖ Is the question disputed and substantial?
❖ Doesn’t dispute Mottley – just a wrinkle
o Only about determining whether federal issue is substantial enough

GUNN V. MINTON
❖ Under the statute, case can arise under federal law in two ways:
o When federal law creates cause of action
o “Special and small category” of claims where state law claim necessarily raises a stated federal
issue
▪ issue must be debated and substantial
❖ Court says §1338 “arising under” means the same thing as §1331 “arising under.”
❖ Expands four-part test from Grable:
o Necessarily raised
o Actually disputed
o Substantial to federal system as a whole
o Capable of resolution in federal court without disrupting federal-state balance
❖ Gunn’s issue not substantial
o Won’t create any patent law precedent

DIVERSITY JURISDICTION

27
SOURCES OF LAW
❖ Constitutional authorization (outer bounds):
o minimal diversity
o no amount in controversy requirement
❖ 28 U.S.C. § 1332
o Complete diversity
o Amount in controversy over $75,000
o Comes from Strawbridge

CITIZENSHIP
❖ Individuals
o US citizen
o AND Domicile (changes)
▪ Physically there
▪ Intention to stay indefinitely
❖ Noncitizens
o citizens of state vs. subject of foreign state (diverse UNLESS subject is a permanent resident
domiciled in same state)
❖ Stateless citizen
o gap in statute – no citizenship
❖ Corporation
o Incorporation
o PPB
o Hertz – PPB is “nerve center”
❖ Non-corporations
o Members (individuals)
o Americold – citizenship of unincorporated entities determined by citizenship of members
* Based on time when claim was filed

REMOVAL
❖ 28 U.S.C. 1441(a)
o defendants can remove suit to federal court if plaintiff brings claim in state court

JOINDER

❖ remember: SMJ and joinder are on a collision course

Parties (PJ) Claims (SMJ)

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(1) Rule 20 – Parties (1) Rule 18 – Claims

(2) Rule 14 – “Third-Party” / Impleader (2) Rule 13 – Counterclaims / Crossclaims

(3) Rule 19 – “Necessary” Parties (3) Rule 14 – “Third-Party” / Impleader

(4) Rule 24 – “Intervenors

JOINDER CHECKLIST

A. Permissibility of the claim. Is the joinder of the claim permitted under the Rules? (only determines
whether the claim CAN be pleaded – need additional SMJ jurisdiction)
1. Defending Party’s Claim Against Opposing Party – is the claim in question being
asserted against a party who has asserted a claim against the claimant?
a. No. If not, proceed to Part A.2
b. Yes. If so, the claim may be asserted as a counterclaim. Next ask whether claim
arises out of same transaction or occurrence
i Yes. If same t+o, counterclaim is compulsory. Must be raised or else it is
waived.
ii No. If no t+o, counterclaim is permissive.
c. *Note – this question also applies to a third-party plaintiff or defendant who has
already asserted a claim against the claimant
2. Claim Against a Non-Aggressor – if the claim to be joined is not being made against an
opposing party asserting a claim against the claimant, against whom is the additional claim
being asserted?
a. Against an Existing Adversary – if claim to be joined is being asserted by party
against someone whom that party has already asserted a claim against, claim may be
joined with his or her original or existing claims under Rule 18(a)
b. Against a Coparty – if the additional claims being asserted a non-adversarial
coparty (on the same side of the “v.”) does the claim concern the same t, o, or
property that is subject matter or original claim or counterclaim or assert that party
against whom it is asserted is or may be liable to the claimant for all or part of the
claim against the claimant.
i Yes. If so, claim may be asserted as a crossclaim under Rule 13(g)
ii No. If not, claim may not be asserted as a crossclaim unless claimant has
already successfully asserted a crossclaim against the coparty, in which case
additional claim at issue could be joined to that existing claim under Rule
18(a).
c. Against a Rule 14 Party – if claim is against an existing third-party defendant, what
is the party status of the claimant?
i Third-Party Plaintiff – if claimant is third-party plaintiff, additional claim
at issue can be joined to the existing third-party claim under Rule 18(a).

29
 ii Plaintiff – if claimant is the plaintiff, does their claim against third-party
defendant arise out of same t+o as plaintiff’s claim against third party
plaintiff (aka original defendant)?
● Yes. If so, claim may be asserted against third-party defendant
under Rule 14(a)(3)
● No. If not, claim is not permitted under Rule 14(a)(3). However, if
plaintiff has already successfully asserted claim against third-party
defendant, additional claim at issue can be joined to that existing
claim under Rule 18(a).
iii Coparty – if the claimant is a coparty of the third-party defendant, conduct
the analysis supra at part A.2.b.
d. Against the Plaintiff by a Third-Party Defendant – if additional claim is by a
third-party defendant against the plaintiff, does claim arise out of same transaction
and occurrence as plaintiff’s claim against third-party plaintiff?
i Yes. If so, the claim may be asserted against plaintiff under Rule
14(1)(2)(D).
ii No. If not claim is not permitted under Rule 14(a). If third-party has
already successfully asserted a claim against plaintiff, additional claim can be
joined under Rule 18(a).
e. Against a Rule 19 or 24 Party – the permissibility of claims against such parties
depends on their status in the lawsuit once joined. Determine which of the above-
mentioned party classifications properly describes the position of the party in the
action and apply that analysis. (Does the person become a third-party defendant?
Do they become a coparty?)
B. Permissive Party Joinder. Is the joinder of a party permissible?
1. Joinder of Defendants – is the plaintiff asserting against the defendants a right of relief
arising out of same t+o and involving common question of law or fact?
a. Yes. If so, the plaintiff may join the defendants in a single action under Rule 20(a).
b. No. If not, the plaintiff may not join the defendants together in a single action.
2. Joinder of Plaintiffs – are the plaintiffs asserting a right to relief arising out of same t+o
and involving a common question of law or fact?
a. Yes. If so, the plaintiffs may join together in a single action under Rule 20(a).
b. No. If not, the plaintiffs may not join together in a single action.
3. Joinder of Nonparties – is the party seeking to join the nonparty a defending party?
a. No. If not, the party may not implead a nonparty into the action as a third-party
defendant under Rule 14(a). Proceed to Part C to determine whether the party can
seek compulsory joinder of the party through Rule 19.
b. Yes. If so, is the party seeking to assert against the nonparty a claim that the
nonparty is liable to the impleading party for all or part of the plaintiff’s claim
against the defending party?
i Yes. If so, the claim is proper and can be asserted against nonparty under
Rule 14(a). Nonparty becomes a third-party defendant. May be done
without court’s permission within 14 days of service of the defendant’s
answer

30
 ii No. If not, the party will not be able to implead the nonparty into the
action as a third-party defendant.
4. Joinder by Nonparties – if the party seeking joinder is a nonparty, does it have a right to
intervene under Rule 24(a)(2)? ALSO LOOK AT SMJ – can’t bust SMJ
a. Interest in Action – does the nonparty have an interest in subject of the action?
i No. If not, the nonparty has no right to intervene under Rule 24(a)(2).
Proceed to Part B.4.d. to determine whether intervention is permissible
ii Yes. If so, proceed to next question.
b. a
i No. If not, the nonparty has no right to intervene under Rule 24(a)(2).
Proceed to Part B.4.d to determine whether the intervention is permissible.
ii Yes. If so, proceed to the next question
c. Adequate representation of Interests – is the nonparty’s interest adequately
represented by existing parties?
i Yes. If so, the nonparty has no right to intervene under Rule 24(a)(2).
Proceed to Part B.4.d to determine whether intervention is permissible.
ii No. If not, and the previous questions have been answered affirmatively,
the nonparty has a right to intervene under Rule 24(a)(2), provided the
court finds that intervention timely
d. Permissive Intervention – does the nonparty’s claim or defense have a question of
law or fact in common with the main action?
i Yes. If so nonparty may be permitted to intervene at the discretion of the
court under Rule 24(b), provided the court finds that intervention is timely.
ii No. If not, the nonparty is not permitted to intervene.
C. Compulsory Party Joinder – must a nonparty be joined in an action? (doesn’t decide SMJ)
1. Necessary Party Status – is the absentee a necessary party under Rule 19(a)?
a. Availability of Complete Relief – in the nonparty’s absence, is the court able to
afford complete relief among those who are already parties to the action?
i No. If not, the nonparty is a necessary party. Proceed to the feasibility
analysis.
ii Yes. If so, proceed to the next question.
b. Impairment to Absentee’s Claimed Interest – would disposition of the action in
the nonparty’s absence impair or impede the nonparty’s ability to protect its claimed
interest relating to the subject of the action?
i Yes. If so, the nonparty is a necessary party. Proceed to feasibility analysis.
ii No. If not, then proceed to the next question.
c. Threat to Existing Parties – would disposition of the action in the nonparty’s
absence leave existing parties subject to a substantial risk of incurring multiple of
inconsistent obligations by reason of the nonparty’s claimed interest relating to the
subject of the action?
i Yes. If so, the nonparty is a necessary party. Proceed to feasibility analysis.
ii No. If not, and the previous questions have received negative responses,
the nonparty is not a necessary party whose joinder may be compelled
under Rule 19.

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2. Feasibility of Joinder – if a nonparty is deemed to be a necessary party, is its joinder in the
action feasible?
a. Personal Jurisdiction – can the court obtain personal jurisdiction over the
necessary party?
i No. If not, then the joinder of the necessary party is not feasible. Proceed
to Part C.3 to determine whether the party is indispensable.
ii Yes. If so, proceed to the next question
b. Subject Matter Jurisdiction – will the joinder of the party deprive the court of
SMJ over action or involve a claim over which the court will lack SMJ? Refer to SMJ
checklist to see whether court would have had SMJ over claim to be asserted by or
against the joined party. Also, if the nonparty would destroy diversity – that would
be a circumstance were court would be deprived of subject matter jurisdiction by
joining the nonparty.
i Yes. If the court would be deprived of SMJ, the joinder of the necessary
party is not feasible. Proceed to Part C.3 to determine whether the party is
indispensable
ii No. If not, proceed to the next question.
c. Venue – has the necessary party objected to venue?
i Yes. If so, does joinder of the party render venue improper? Refer to venue
checklist.
● Yes. If so, the necessary party must be dismissed from the action.
Proceed to Part C.3 to determine whether the party is indispensable
● No. If not, and personal jurisdiction and SMJ exists, joinder of
necessary party is feasible and the party must be joined in the
action.
ii No. If the necessary party has not objected to venue, and personal
jurisdiction and subject matter jurisdiction exist, the joinder of the party is
feasible and the party must be joined in the action.
3. Indispensability of the Party – if joinder of the necessary party is not feasible, should the
court dismiss the action in the party’s absence? This is discretionary. Question is whether “in
equity and good conscience,” the action should proceed among existing parties or be
dismissed (Rule 19(b)).
a. Resulting Prejudice – what is the extent of the prejudice that would result were
the action to proceed in absence of nonparty, either to nonparty or existing parties?
i Significant. This is a subjective assessment, but to the extent that the
degree of prejudice is significant, proceed to next question.
ii Insignificant. A finding of little or no prejudice if nonparty is left out of
action suggest that party is not indispensable. Proceed to next question and
base consideration on all factors.
b. Lessening of Prejudice – can the prejudice to existing parties or the necessary
party that would result from the necessary party’s absence be lessened or avoided
through protective provisions in the judgment, the shaping of relief, or other
measures?
i Yes. If so, that suggest that the necessary part may not be considered
indispensable; the court could retain jurisdiction over the case and shape

32
 relief to protect the relevant party’s interest. However, must be evaluated
with reference to next question.
ii No. If not, that would suggest the court should consider the necessary
party to be indispensable. However, need to think about next question.
c. Adequacy of Remedy – will the judgment rendered in absence of necessary party
be adequate from plaintiff’s perspective?
i No. If not, that favors determination that necessary party is indispensable.
Proceed to next question
ii Yes. If so, that suggests that necessary party might not be considered
indispensable, f there is no prejudice or prejudice can be avoided or
lessened. If prejudice cannot be avoided, proceed to next question.
d. Adequacy of Remedy Elsewhere. If action is dismissed, will plaintiff have an
adequate remedy?
i Yes. If the plaintiff can obtain adequate relief if action is dismissed, that
would favor a determination that party is indispensable and action should
be dismissed.
ii No. If not, that suggests that party should not be deemed to be
indispensable and the action should not be dismissed.

JOINDER OF PARTIES

❖ Permissive Joinder of Parties (Rule 20)

o PLs and DFs may join if claim arises out of the same transaction or occurrence and there
is a common question of law or fact
❖ Compulsory Joinder of Parties (Rule 19)
o (a)(1)(a) Necessary for relief
▪ Insurer, authority that could provide additional necessary info, co-owner
o (a)(1)(B)(i) Party is practically impaired
▪ If there are limited funds, absentee is missing out
o (a)(1)(B)(ii) Inconsistent obligations (for defendant)
o (b) Discretion and protective measures
❖ Intervention of Parties (Rule 24)
o 24(a) – intervention as of right
o 24(b) – permissive (common question/discretion)

JOINDER OF CLAIMS

❖ Cross-Claims and Counter-Claims (Rule 13)

o Compulsory counterclaim: same transaction or occurrence
o Permissive counterclaim: anything
o Permissive crossclaims – same side of “v.” but has to arise out of same transaction or
occurrence
❖ Additional Claims (Rule 18)
o Once part of a suit, a party can join as many claims (even unrelated) as it has against the
other party to the suit

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THIRD-PARTY JOINDER (RULE 14)

❖ Reasons
o Insurance
o Right of Contribution
o Employment/Contractor Relationship (or other arrangement)
❖ Defendant may implead third party DF where third-party DF is liable for claim against third-party
PL
o 14(a)(1)
❖ Third party DF may/must assert counterclaims and crossclaims against third-party PL (same rules as
Rule 13)
o 14(a)(2)(B)
❖ Third-party DF can ALSO bring in a nonparty who may be liable to them for claims against them by
third-party PL
o 14(a)(5)
❖ Third-party DF can file claims against original PL if same transaction or occurrence
o 14(a)(2)(d)
❖ Notes
o You cannot use Rule 14 to bring in third-party DFs who may be liable for separate claims to
third-party PLs
o If you properly implead a third-party DF, Rule 18 can be used to add any other claims
❖ You cannot use Rule 14 to get out of court or remove liability from yourself.
o You will still be held liable, but can bring in third-party DFs who could be liable to YOU for
the claim
❖ Rule 42 gives courts discretion to create a separate trial if there are too many parties and/or claims

SUPPLEMENTAL JURISDICTION

CHECKLIST
□ Is the original claim based on federal question jurisdiction arising out of § 1331?
o If yes, proceed to 1367(c) and analyze discretion
□ If the suit based on diversity jurisdiction:
o Is it the defendant trying to include a claim?
▪ If yes, proceed to 1367(c) factors
o Is it the plaintiff trying to include a claim?
▪ If yes, is the claim against a Rule 14, 19, 20, or 24 party? (third party, necessary
party, permissible party, or an intervenor)
▪ BUT if the claim satisfies diversity and AIC, then there is independent jurisdiction
to hear it
□ Remember to look at whether a claim has independent SMJ first – supplemental jurisdiction is a fill
in when other forms of jurisdiction are lacking

34
 □ Remember that any crossclaim or counterclaim needs to have independent SMJ – if someone is
trying to implead a third-party they still need SMJ
o BUT supplemental jurisdiction generally covers this as long as it’s the same case or
controversy and not the plaintiff
□ Remember: need original ok claim to base the supplemental claim on

SOURCE OF LAW
❖ 28 U.S.C. § 1367
o (a) district court has jurisdiction ac claims so related to claims within original jurisdiction that
they form part of same case or controversy (Gibbs – constitutional standard as well)
▪ includes joinder or intervention of additional parties
o (b) if district courts have jurisdiction based solely on diversity, they shall NOT have
supplemental jurisdiction under (a) over claims by plaintiffs against persons made parties
under Rule 14, 19, 20, or 24 if exercising jurisdiction over such claims would be inconsistent
with diversity jurisdiction
▪ (don’t want intervenor to game the system)
▪ only applies to plaintiffs
o (c) district court may decline to exercise supplemental jurisdiction if
▪ claim raises novel or complex issue of state law
▪ claims substantially predominates over claim which district court had original
jurisdiction
▪ district court has dismissed all claims over which it has original jurisdiction
▪ in exceptional circumstances, if other compelling reasons arise
remember 1367(c) factors!!!!!! Discretion!

OWEN V. KROGER
❖ pre-§ 1367
❖ court held that plaintiff could not assert a claim against third-party defendant when there is no
independent basis for federal jurisdiction over the claim
o concerned about plaintiffs gaming the system
o not impleading someone originally because they want to be in federal court, and then waiting
for the defendant to implead the correct party

AMOUNT IN CONTROVERSY AGGREGATION

❖ can only add up claims between same plaintiff and defendant

ALLAPATTAH GLITCHES
❖ § 1367 includes Rule 20 in exception
o but if diversity is satisfied in rule 20, but AIC isn’t, still fine

35
 ❖ claims by plaintiff joined under Rule 23 or Rule 20 may enjoy supplemental jurisdiction, provided the
complete diversity rule isn’t violated
o ok if they don’t meet AIC
❖ Rule 24 – can’t bust up complete diversity or AIC
❖ 1. Counterclaim glitch
o plaintiff might not be able to counterclaim against 3rd party claim even if it is compulsory
❖ 2. Joined parties glitch (for AIC, not Diversity)
o a plaintiff that otherwise doesn’t satisfy AiC but does satisfy diversity, OK
o like a secondary plaintiff joining and suing a defendant
o even if the second plaintiff joins later, can’t bust diversity by saying the first claim had
original jurisdiction
❖ 3. Joined plaintiffs and joined defendants
o if two defendants (from rule 20) and no AIC not ok even though suing only one defendant
would have been fine
o if AIC is satisfied but not diversity, not allowed

PRECLUSION

A. Claim Preclusion
1. Same Claim?
a. Identical claims?
i Yes – same claim requirement satisfied
ii No – proceed to next question
b. Related claims – do the claims arise out of same transaction or occurrence?
i Yes – subsequent claim satisfies requirement
ii No – if not, claims not identical or sufficiently related to grant preclusive
effect
2. Same parties?
a. Identical parties?
i Yes – same parties requirement satisfied
ii No – proceed to next question
b. Parties in privity
i Substantial Legal Relationship
ii Representation in Prior action (adequate representation)
3. Final judgment (needs to be based on validity of clams and not on procedural grounds)
i if yes, resolution considered final
B. Issue Preclusion
1. Same Party to be Bound?
a. if yes, proceed to next question
b. if no, not issue precluded
2. Same Party Invoking Issue Preclusion? Is party invoking issue preclusion someone who
was a party in the previous action?
a. Yes. If so, proceed to next question
b. No. If not, issue preclusion appropriate only if party invoking issue preclusion
satisfies Parklane factors (not a wait and see plaintiff, etc.)

36
 3. Same issue?
a. Yes. Proceed to next question
b. No. Issue preclusion not appropriate
4. Actually Litigated and Decided?
a. Yes. Proceed to next question
b. No. Issue preclusion not appropriate
5. Necessary to Judgment? (Would a different decision regarding the issue have affected the
outcome of the case?)
a. Yes. If so, determination of the issue was necessary to judgment and should be
given preclusive effect
b. No. If not, not necessary and should not be given preclusive effect
c. Unclear. If unclear on which of multiple grounds for relief a judgment relies, no
preclusive effect may be given to the prior determination.

CLAIM PRECLUSION

Claim Preclusion Issue Preclusion

Who is barred? Same parties Same parties

What is barred? Same claim Same issue

What needs to have happened Final decision on the merits Actually litigated
in case #1?
Actually decided

Necessary to decision

❖ Claim Preclusion (Res Judicata) requires:

o Final judgment
o On the merits
o Same claim
o Same parties

TAYLOR V. STURGELL
❖ Held that there was no virtual representation exception to general rule against precluding nonparties
❖ Due process requires full opportunity to litigate/day in court/to be heard
❖ Except if:
o Consent
o Privity/property
o Adequately represented (Rule 23)
▪ Aligned

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 ▪ Act as representative/court protects
▪ (notice)
o #2 controlled #1
o #1 controlled #2
o statutes

ISSUE PRECLUSION

❖ Issue Preclusion (Collateral Estoppel) requires:

o Same issue
o Actually litigated
o Actually decided
o “Necessary” to court’s judgment
❖ concern about due process rights

PARKLANE HOISERY V. SHORE

❖ Parklane factors (for offensive nonmutual collateral estoppel)
o “Wait and See” / Could they have joined?
o Incentive to litigate in the first suit?
o Inconsistent prior rulings?
o Different procedures?
❖ Offensive nonmutual collateral estoppel – PL stops DF from re-litigating a claim
o Parklane
o disfavored
❖ Defensive nonmutual collateral estoppel – DF stops PL from re-litigating a claim

CLASS ACTIONS

❖ Pros of class actions

o Ability to sue/incentives
o Press – impressive
o Resources/efficiency
o Consistency
o Speed
o Deterrence
o Alternative to regulation
o “global peace”
o aggregation and representation

CERTIFYING THE CLASS

❖ why is certification a big deal?

o Signal about the merits (like MTD or MSJ)

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 o Corporations don’t generally want classes because more plaintiffs can sue
▪ Except Exxon – global peace
o Certification decision is leverage (major moment for settlement)
o Pro-business always trying to push for narrowing commonality

23(a) – must meet 23(b) – choose a category 23(e) – settlement approval

(a)(1) – numerosity (b)(1)(A) – inconsistency (e)(1) – notice

(a)(2) – commonality (b)(1)(B) – limited fund (e)(2) – hearing

(a)(3) – typicality (b)(2) – injunctive (e)(3) – no side deals

(a)(4) – adequate representation
(b)(3) – questions of law or fact (e)(4) – opt out again
common to class members
predominate over any questions (e)(5) - objectors
affecting only individual
members, and that a class action
is superior to other available
methods (damages)*

*requires notice and opt-out

(23(c)(2)(B) – needed for due
process concerns. Version of
consent – if you don’t opt out,
you consent (Taylor factor)

mandatory – naturally comport

with due process

WAL-MART V. DUKES
❖ Facts: 1.5 million plaintiffs employed in 3,400 stores
o Different managers
o Different states
o Different years
o Some salaried, some hourly
❖ Question: should this be a (b)(2) class or a (b)(3)?
❖ Analysis: commonality element crucial (word salad)
o Need to demonstrate same injury
o Need a common question that is capable of class-wide resolution
o in one stroke
o resolve issue central to validity to each of the claims in one stroke
o Can the class proceeding generate common answers?

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 o Requires glue holding the class together
❖ Falcon: two ways conceptual gap between individuals’ claim and existence of class of people suffering
same harm can be bridged
o if employer used a biased testing procedure
▪ not the case in Wal-Mart
o significant proof that an employer operated under general policy of discrimination
▪ Wal-Mart used:
● Statistical proof (not specific enough)
● Anecdotal evidence (not enough)
● Expert on corporate culture (not specific enough)
❖ Ginsburg dissent:
o Reading (a)(2) as if it’s (b)(3)
o Problematic because commonality needs to be there for all other kinds of class actions as
well

PERSONAL JURISDICTIN IN CLASS ACTIONS

❖ If you’re a plaintiff and part of a class, may not have chosen to file somewhere
o But, if you didn’t have do anything (not burdensome)
o Not that unfair – not being haled into court
o If it’s a (b)(3) class, can opt out
❖ BMS
o Need to go to place where corporation has general jurisdiction
o Unless you limit it to those harmed in that state

COMCAST
❖ Damages can’t be incompatible with theory of liability
o Not relevant when predominance is based on common issues of liability, not damages

RULE 23 (C)(4) AND (C)(5)

❖ Allows classes to be divided on basis of particular issues (c)(4)
❖ Or divided into subclasses (c)(5)

WHIRLPOOL CASES (MOLDY WASHING MASHINES)

❖ Why NOT certify?
o Could lead to extortion
o Could lead to reputational damage
o Hard/impossible for defendants to defend all these disparate claims
o Problem with padding numbers?
❖ Why certify?

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 o Quick exoneration
o Divide into subclasses or by particular issues

RECENT DEVELOPMENTS

SMITH V. BAYER
❖ Facts:
o McCollins sued Bayer and was denied class certification in federal court
o Smith sued a month later on same issues in WV
❖ Analysis:
o In this case, court #1 is trying to preclude #2 as opposed to vice versa
o “same issue” in this case is whether or not this is a class
o two questions
▪ did McCollins’ suit preclude Smith’s?
● no, issues not the same
▪ was Smith a party?
● No, also not in the nonparty exceptions
o West Virginia uses a different standard for Rule 23
o Judgment binds only parties to a suit
▪ Non-named class member is not a party before the class is certified
▪ Judgment for Bayer would contravene Taylor
▪ Due process concern
o Policy concerns strongest argument against
▪ But would not work with rule against nonparty preclusion
▪ Stare decisis and comity among courts protects from relitigation
▪ [MDL also protects against relitigation concerns]

CLASS ACTION FAIRNESS ACT

❖ class action can be removed to federal court if:
o total amount in controversy for entire class is at least $5 million
o AND meets minimum diversity requirement
o Has to be more than 100 people
❖ History of CAFA: defendants complained about economic pressure and judge shopping
❖ 2 exceptions
o local controversy
o home state

SUPPLEMENTAL JURISDICTION UNDER CAFA

❖ Only looks at citizenship fo named plaintiff in class actions

❖ Need to have SMJ over claims even if parties are ok

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 ❖ Needs to be same case or controversy (§ 1367/Constitution
o Don’t want plaintiffs gaming the system
❖ Another Allapattah glitch: Rule 23 plaintiffs are also covered
o Still don’t worry about amount in controversy
o But can’t bust complete diversity

CLASS ACTION ARBITRATION CLAUSES

❖ Timeline:
o 2005 – AT&T v. Concepcion (contracts)
o 2011 – Wal-Mart (torts)
o 2013 – Italian Colors (fine to fall through cracks)
o 2015 – Direct TV (even when companies put in escape clause, still have to arbitrate)
o 2017 – Epic Systems (pending)

AT&T V. CONCEPCION (2005)

❖ CA struck down an arbitration clause

❖ Supreme Court holds that Federal Arbitration Act preempts state law

AM-EX V. ITALIAN COLORS

❖ Federal Arbitration Act does not permit courts to invalidate a contractual waiver of class arbitration
on the grounds that the plaintiff’s cost of individually arbitrating a federal statutory claim exceeds the
potential recovery
o Doesn’t matter if the right to litigate is prohibitive

EPIC SYSTEMS

❖ Case pending now

❖ Question: Does the National Labor Relations Act prohibit enforcement of an agreement requiring
employees to resolve disputes with the employer through individual arbitration under the Federal
Arbitration Act?
o Conflict between the NLRB Act and the FAA
o Federal law vs. federal law

CFPB RULE

❖ Senate voted to kill rule that would allow consumers to file class-actions over disputes with banks,
credit card companies and other financial service firms
o Now will be resolved through arbitration
o Nearly half credit card loans subject to arbitration clauses
o 78 of 341 cases resolved by arbitrators during two-year period ended with judgments in
favor of consumers

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MULTI-DISTRICT LITIGATION PANELS (MDLS)
❖ Existing cases (as opposed to claims) brought together for discovery
o If separate cases are all in federal courts, can be consolidated into MDL
❖ MDL doesn’t issue judgment
o Only does pretrial/discovery management
o In practice, few cases remanded for trial to original forum
❖ MDL creates nationwide jurisdiction (overrides 4(k)(1)(A)
❖ Can use MDLS on class actions
❖ Can use MDL to create a class action

SETTLEMENT

❖ Class actions are one of the few places where judges need to approve settlements
o Courts concerned about sweetheart deals

Rule 23(e) – settlement approval

(e)(1) – notice

(e)(2) – hearing

(e)(3) – no side deals

(e)(4) – opt out again

(e)(5) - objectors

SETTLEMENT CLASSES
❖ Attorneys will sometimes come with the petition for class certification and the settlement agreement
at the same time

EXAMPLES OF SETTLEMENT APPROVAL AND REJECTION

NFL CONCUSSIONS SETTLEMENT APPROVAL

❖ Judge rejected settlement twice

o Used to be a cap, but judge removed cap
o No need to prove concussions
❖ In trial, players would have had to prove causation
o Also work around collective bargaining agreements

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 o “contracting around the law”

SUBWAY SETTLEMENT REJECTION

❖ district court approved settlement

❖ settlement rejected by appeals court because claims were frivolous and had no benefit for class
members
o only for lawyers

ALTERNATIVES TO CLASS ACTIONS

???

THE BP OIL SPILL LITIGATION

THE BP LITIGATION AND COMPENSATION FUNDS

❖ April 20, 2010 – BP Oil Spill
o 5 million barrels (10x Exxon)
❖ June 16, 2010 BP announced and established the Gulf Coast Claims Facility (GCCF)
❖ MDL under Judge Barbier (E.D.L.A.)
o (b)(3) class

BP SETTLEMENT
❖ Settlement included
o Full compensation
o No proof of causation
o No cap on $
o Relied on zones/formulas as substitute for causation
❖ Pros:
o Global peace
o Should enforce contract that was agreed upon
o Expedited relief
❖ Cons:
o Perjury not realistic
o Hurts legitimacy

BP AT THE 5TH CIRCUIT

March Do claimants need to show causation?
2014

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BP: Use formula only if you can show causation

CA5: No.

BP: Class definition requires causation

CA5: Class members sign under penalty of perjury

January What if some aren’t even injured? Different damages?

2014

23(a)(2) Commonality is a merits question Defendant’s conduct is enough to satisfy

commonality requirement

23(a)(4) “adequate representation” –uncapped

compensation

23(b)(3) Predominance question – settlement isn’t “Issue classes and Subclasses” –Bifurcate
relevant to certification trial using 23(c)(4) issue classes

23(e) Not about defendant

BP AT THE SUPREME COURT

❖ Petition denied

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