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 Personal Jurisdiction
 Requires power of the legislature with a statute and to not violate due process through the
constitution
 Specific Jurisdiction
 Pennoyer v. Neff
 Establishes 3 situations for jurisdiction
 Present in the state/forum when served/agent in the state
 Resident of state with notice/domiciled
 Property within the state and it was attached at the time the lawsuit was
initiated
 * if they appear in the court considered to be consenting. Sometimes consent
is voluntary and sometimes it is the result of failing to object appropriately to
an attempted exercise of jurisdiction
 Mitchell tried to recover legal fees from Neff and couldn’t get Neff to pay
because he was out of state so took his land.
 Oregon had no right to assert power cause Neff was not in Oregon and Mitchell
failed to attach the property at the beginning of the lawsuit. Neff got his property
back
 Exception would be if they consented to give jurisdiction in the state
 Tried to use QIR-2 because it required courts to have power over some property
that belonged to the defendant although the dispute was not about the ownership
of the property
 Hess v. Palowski
 Pennoyer is not overturned. Doesn’t fit nicely but there is implied consent
because it is assumed Hess knows the laws of MA by driving on the roads.
Palowski wins.
 Was able to exclude people from entering the state with a motor vehicle
 There was acceptance by operating a motor vehicle in the state and through
the acceptance they appointed an agent that could be served
 Used by Kane v. New Jersey which held that New Jersey could require an
out of state resident to file a formal instrument appointing a New Jersey
agent to receive process
 Public interest – connection between the driving and the collision.
 On the same footing, Hess can use MA courts against Palowski so Palowski
should be able to use MA courts against Hess.
 Make and enforce regulations to promote the care on the part of all residents
and nonresidents
 International Shoe v. Washington
 In order to assert personal jurisdiction over a non-resident defendant, the
defendant must have sufficient minimum contacts within the state
 Contacts must be related to the suit in question
 Measurement of the quality and volume of contacts
 Do not offend traditional notions of fair play and substantial justice
(Fairness/Reasonableness)
 Contact part and fairness part test
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 International Shoe’s activities were systematic continuous


 Link back to Hess v. Pawloski – Hess had minimum contacts by driving in the
sate and getting into an accident, which was directly related to the suit
 Moved to set aside the order because of:
 Improper service
 Not a corporation in WA and not doing business in WA
 Deleware corporation with PPoB in St. Louis Missouri
 No agent in the state for service to be made
 Not an employer and not furnish employment
 Supreme Court of Washington said there were regular and systematic solicitation
of orders resulting in a continuous flow of products into the state, was sufficient
to constitute doing business in the state to make them amenable in courts
 Believed there were sufficient additional activities where the solicitation within a
state by the agents of a foreign corporation plus some additional activities there
are sufficient to render the corporation amenable to suit brought in the courts of
the state to enforce an obligation arising out of its activities there
 Tried to claim it was mere solicitation of orders and did not render them
amenable to suit
 Requires that is subject to in personam jurisdiction if not present in the forum that
they have certain minimum contacts with it such that the maintenance of the suit
does not offend the traditional notions of fair play and substantial justice
 The contacts in the state not only have to be continuous and systematic, but single
or isolated items of activities are not enough to subject it to suit on causes of
action unconnected with the activities there.
 In this case were systematic and continuous where resulted in a large volume
of interstate business where they received the benefits and protection of the
laws of the state
 Now look to relatedness and quantum/quality of contacts
 Works for Hess because low contacts but highly related
 Look to the contacts in the state, not the event itself

 McGee v. International Life Insurance Co.


 McGee is the beneficiary of an insurance policy for Franklin who look it out from
Empire. Empire was purchased by ILI
 Franklin a resident of CA transacted with ILI by mail until death and the
company had never solicited or done business in CA other than Franklin
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 McGee recovered judgment in CA and sought to enforce it in TX but TX


refused to enforce the judgment
 Minimum contacts were established when they solicited business with a
resident of California
 Has substantial connection with the state and correspondence with
California resident
 Solicited business in California and California had an interest in providing
a forum for their citizens that were being ripped off y out of state
companies.
 The TX corporation had only one contact in CA but the suit involved an alleged
breach of the contract
 Supreme Court held that the suit was based on a single contract which had
substantial connection with the State
 Contract was delivered in CA, premiums were mailed from there and insured
was a resident there when he died
 CA has interest because wants to protect residents because would be
disadvantaged if had to go to another state to hold them accountable
 Believed it may be considered to be an inconvenience to the insurer if it is
held amenable to suit in CA but certainly nothing which amounts to denial of
due process
 Hanson v. Denckla
 Donner, resident of PA established a trust naming a Deleware bank as trustee.
Donner moved to FL
 Used last will and testament leaving most of her estate to her daughters. Also
executed power of attorney to change appointed beneficiaries under the
Deleware trust to her grandchildren and the remainder went to her estate
 Trying to claim that they did not have jurisdiction over the Deleware trustee in
FL court
 Supreme court said that because of the DE trustee’s contacts with FL had been
less than minimal , the state could not assert personal jurisdiction over it therefore
DE was justified in refusing to give full faith and credit to the FL decree
 Need to have minimal contacts with that state that are a prerequisite to its
exercise of power over him
 Fail to find such contacts in the circumstances of this case
 Company has no offices in FL and transacts no business there. None of
the trust assets has ever been held or administered in FL and the record
discloses no solicitation of business in that State either in person or by
mail
 No such acts where the trustee performed in FL and it does not bear
the same relationship to the agreement as the solicitation in McGee
 The unilateral activity of those who claim a relationship with a nonresident
defendant cannot satisfy the requirement of contact with the forum state
 Need to have some act in which the defendant purposely availed themselves
of the privilege of conducting activities within the forum state thus invoking
the benefits and protections of its laws.
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 The only tie between the Delaware bank and FL was caused by Mrs. Donner’s
unilateral activity of moving there thereby not creating a contact
 Decided to ignore the state’s interest
 World-Wide Volkswagon v. Woodson
 Only connection in Oklahoma was that an automobile sold in NY to NY residents
involved an accident in OK on their way to AZ due to the defective gas tank and
fuel system
 WW is incorporated and has it PPoB in NY and is under contract with retail
dealers in NY, NJ and CT.
 Cars by their very purpose and design are so mobile that the petitioners can
foresee it is possible for use in OK. The goods are sold and distributed by the
petitioners were used in the State and the petitioners derive a substantial revenue
from goods used or consumed in the State
 Concept of minimum contact:
 protects the defendant against litigation in an inconvenient photo.
 Ensures that the states do not reach out beyond the limits imposed on them
 Test has two parts
 Contacts
 And fairness (“fair play and substantial justice”)
 Fairness factors (Only relevant if found a contact)
 Burden on the defendant (primary concern)
 Forum state’s interest in adjudicating the suit (McGee)
 Plaintiff’s interest in obtaining convenient and effective relief
 Interstate judicial system’s interest in obtaining the most efficient
resolution of controversies and
 The shared interest of the several States in furthering fundamental
substantive social policies
 Protection in the form of reasonableness or fairness
 Needs to be reasonable that it requires the corporation to defend a particular
suit which is brought there.
 There was single one isolated occurrence to try and establish jurisdiction but
foreseeability alone has never been a sufficient benchmark because they could not
have seen being brought there for trial and it was the unilateral activity of those
who claim some relationship with a nonresident cannot satisfy the requirement of
contact with the forum state (Hanson)
 Defendants had no relevant contact with OK because they did not purposefully
avail themselves of any benefit in OK.
 Unilateral act of plaintiff to drive car to OK
 Foreseeability product would get there not enough. Need to foresee being sued
 What it provides
 First, contact and fairness
 Second a relevant contact
 Contact must be purposeful availment (benefits of the forum in some way)
and foreseeability (Foreseeability of forum)
 Five fairness factors
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 Keeton v. Hustler Magazine


 Filed in NH because where statute of limitations wasn’t up yet. Argued for
jurisdiction because Hustler sold ten to fifteen thousand magazines a month in
that state
 Regular monthly sales of thousands of magazines cannot by any stretch of the
imagination be characterized as random isolated or fortuitous.
 Injury suffered in any state where the magazine was published
 We only care about the defendants contacts, not the plaintiff’s (P had no contacts
in NH but D did)
 Kulko v. Superior Court
 Father permitted the daughter to live with the mother in California and purchased
her plane ticket. Soon son went to join on ticket mother mailed to him
 Determined that the effects test should be limited to disputes involving
commercial activity or wrongful activity done outside the state and affecting a
state resident
 Sending a child to a state did not constitute a sufficient contact to support
jurisdiction because the father did not purposefully avail himself to the benefits
and protections of CA.
 Holding someone accountable because of the effects that their actions have on the
forum state
 Calder v. Jones
 First amendment concerns do not enter into jurisdictional analysis.
 Intentionally wrote an article for disseminating in California and the court then
had no trouble in finding they could foresee being haled into court there
 California was the focal point both of the story and the harm suffered therefore
the conduct in FL had effects in CA. Targeted CA.
 The relevant contact between the defendant and the forum can be established
not only by the defendant’s going to the forum and doing something there but
by her intentionally causing an effect there
 Burger King Corp. v. Rudzewicz
 The franchise relationship was established in Miami and governed by Florida Law
and called for payments of monthly fees and forwarding relevant notices to Miami
headquarters
 An individual contract with an out of state party alone cannot automatically
establish sufficient minimum contacts in the other party’s home forum.
 To determine whether purposefully established minimum contacts within the
forum need to look into:
 Prior negotiations and contemplated future consequences
 Terms of the contract
 The parties actual course of dealing
 Specified that the authority was vested in the Miami headquarters
 The franchise dispute grew out of a contract which had a substantial connection
with that state (McGee)
 McGee Comparison
 Defendant reached out
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 Long period of time


 Level of interaction (BK would be more)
 Course of dealing – mailing back and forth
 Rudzewicz deliberately reached out beyond Michigan and negotiated with
Florida corporation for the benefits that would derive from the affiliation
 The relationship in FL cannot be viewed as random, fortuitous or attenuated
 The contract made it foreseeable that would have possible litigation there
 Fairness
 Cannot conclude that FL had no legitimate interest in holding Rudzewicz
answerable on a claim related to the contacts he had established in that State.
Although courts suggested that inconvenience may at some point become so
substantial as to achieve constitutional magnitude this isn’t the case
 Mere inconvenience is not enough. Must show gravely difficult and
inconvenient that a party is unfairly at a severe disadvantage
 Asahi Metal Industry Co. v. Superior Court
 Foreseeability of a product getting into a forum through stream of commerce is
not sufficient, rather the defendant’s contact with the forum must render it
foreseeable that the defendant would get sued there by purposefully availing
themselves (World Wide Volkswagon)
 Purposeful availment requires “additional conduct” that indicates an intent or
purpose to serve the market in the forum state (Hanson)
 Brennan believed that when the defendant places a product in the stream of
commerce and is aware that the final product is being marketed in the forum
State, the possibility of a lawsuit there cannot come as a surprise
 Court’s concern about reasonableness/fairness
 Some factors of the test outweigh others
 Burden of litigating in a foreign country
 Dispute between two companies, forum state has no interest
 O’Connor (Brennan plus) - action must have been directed at the forum state
 Designing for the forum state, advertisements, etc.
 Targeting of the forum state
 Makes sense in that unless there is a targeting, your product only reached the
untargeted forum because of unilateral action
 Brennan – regular and reasonably anticipated
 Stream of commerce with reasonable expectation that the product will reach
the forum state
 You make money by having it in the stream
 Predictable flow
 Stevens – the establishment of minimum contacts is not necessary when it is not
reasonable/fair
 Personal jurisdiction would not be fair under the circumstances of this case. CA
lacks personal jurisdiction over Asahi based on fairness (not contact) grounds
 Litigation in CA would impose to severe of a hardship on Asahi. The issue had
nothing to do with road safety in CA so there was little state interest
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 It would be unreasonable to require Asahi to respond in CA solely on the basis of


ultimately realized foreseeability that the product into which its component was
embodied would be sold all over all over the world including CA and they would
have to submit their dispute to a foreign nations justice system
 Marks v. United States
 When a fragmented Court decides a case and no single rationale explaining
the result enjoys the assent of five justices, ‘the holding of the Court may be
viewed as the position taken by those Members who concurred in the
judgment on the narrowest grounds
 J. McIntyre Machinery Ltd. v. Nicastro
 Kennedy Opinion (O’Connor Test)
 Must have been a submission to the sovereign state (similar to O’Connor in
Asahi; design of product, advertisements to the forum)
 Not enough that you could predict that your product could reach the
forum, must purposely target the forum
 Worried about a slippery and effect on small businesses
 Breyer Opinion
 No anticipated flow
 One machine and not really stream of commerce
 Worried about effect on technology and internet sellers
 Ginsburg Dissent
 Brennan approach and a selling into the stream
 There was not a great volume of sales and at least one was sold to a scrap metal
company in NJ
 Kennedy’s opinion was consistent with O’Connor in Asahi where he said placing
goods into the stream of commerce is not sufficient. Jurisdiction is only possible
where the defendant can be said to have purposefully availed themselves to the
targeted forum and it is not enough that the defendant might have predicted that
its goods will reach the forum state
 NJ did not get targeted so lacked jurisdiction under International Shoe
 Was worried about small businesses where they would have to be subjected to
every state where their product would end up without purposely availing
themselves by targeting it
 Kennedy says that improper exercise of jurisdiction would upset the federal
balance, which posits that each state has a sovereignty that is not subject ti
unlawful intrusion by other State’s
 Breyer concluded that there was no relevant contact between the company and the
state of NJ and rejects plurality effort because would not even satisfy Brennan’s
Stream of commerce test from Asahi because there was no regular flow of
products. Believes need to have an awareness that they may be called to the forum
 Exercise of judicial power is not lawful unless the defendant purposefully avails
itself of the privilege of conducting activities within the forum State, thus
invoking the benefits and protections of its laws (Hanson) as well as purposely
targeting the forum
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 Have to discuss whether the defendant’s activities manifest an intention to submit


to the power of a sovereign in other words, the defendant must purposefully avail
itself of the privilege of conducting activities within the forum State, thus
invoking the benefits and protection of its laws. (Hanson)
 Transmission of jurisdiction where the defendant can be said to have targeted
the forum
 Placement of a product into the stream of commerce without more is not an
act of the defendant purposefully directed towards the forum state
 Walden v. Fiore
 Reject the required minimum contacts with the forum state. Focus on the
relationship among the defendant, the forum and the litigation.
 To exercise jurisdiction consistent with due process, that relationship must arise
out of contacts that the defendant himself creates with the forum
 Plaintiff cannot be the only link between the defendant and the forum
 Petitioner lacks the minimum contacts with Nevada prerequisite to the
exercise of jurisdiction over him.
 Calder made it clear that mere injury to a forum resident is not a sufficient
connection to the forum. The question is whether the defendant’s conduct
connects him to the forum in a meaningful way
 Even if caused the harm to respondents in Nevada while knowing they lived
in Nevada, no jurisdiction
 A nonresident must have certain minimum contacts such that the maintenance of
the suit does not offend traditional notions of fair play and substantial justice.
Need to be based on the intentional conduct by the defendant
 Activity of another party or a third person is not an appropriate consideration
when determining whether a defendant has sufficient contacts with the forum
state to justify an assertion of jurisdiction
 Based on defendant’s contacts not the plaintiff’s especially with unilateral
conduct
 Looks to the defendant’s contacts with the forum state itself not the
defendant’s contacts with persons who reside there
 Plaintiff cannot be the only link between the defendant and the forum
 General jurisdiction (High contacts unrelated to the cause of
action)
 General Notes
 At Home - there is always general jurisdiction over a corporation where they are
incorporated or their principle place of business
 To assert jurisdiction over a defendant when contacts are not related, defendant’s
contacts must be continuous and systematic
 Still must assess reasonableness/fairness
 Helicopteros Nacionales De Colombia S.A. v. Hall
 Rejected general jurisdiction because the claim did not arise from one of the
defendant’s activities in the State of TX
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 The contacts that the company had with TX did not constitute continuous and
systematic contacts. The claims did not arise out of and are not related to
Helicol’s activities within TX.
 Was not authorized to business in TX and never had an agent of service of
process within the state. Never signed any contract in the state, no employee
based or recruited there. No office there or property. There was only one trip
to Houston.
 There was a contract stating that the controversies arising out of the contract
would be submitted to the jurisdiction of Peruvian courts
 Purchases and related trips standing alone are not a sufficient basis for a State’s
assertion of jurisdiction
 Mere purchases made in the forum state even if occurring at regular intervals
are not enough to warrant a State’s assertion of general jurisdiction over a
nonresident corporation in a cause of action not related to those purchase
transactions
 Wanting to have helicopters is not the same as wanting to be in TX. It was not
purposeful conduct because when you are selling you purposefully decide where
you want to sell.
 Contacts with the forum not with the people in the forum
 Not considered to be like Perkins. (HQ made it at home)
 Company was conducting any business and immediately after the Japanese
occupation of the Philippines and was doing so in OH. Corporation’s
president maintained his office the necessarily limited wartime activities of
the company
 Maintained an office, drew and distributed salary checks, used two active
bank accounts and held directors’ meetings in OH
 Goodyear Dunlop Tires Operations v. Brown
 Wreck was allegedly caused by defective tires manufacturer by subsidiaries in
Turkey, France and Luxembourg and trying to bring suit in North Carolina
 Manufacture tires for sale mostly in European markets
 Do not solicit business in NC but a small percentage of tires (tens of
thousands out of tens of millions were distributed in NC but the tire in the
accident was never distributed in Turkey
 Supreme Court reversed saying general jurisdiction cannot be based on a stream
of commerce theory
 Shipping products through the stream of commerce into the forum cannot
constitute such substantial and continuous contact as to justify general
personal jurisdiction
 General jurisdiction requires that defendant have substantial and continuous
contact with the forum to the point where the defendant is essentially at home in
the forum
 “instances in which the continuous corporate operations within a state are so
substantial and of such a nature as to justify suit against it on causes of action
arising from dealings entirely distinct from those activities”
 Human = domicile
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 Corporation = incorporated and PPoB


 Rosenberg based it on extensive purchases from the forum and Goodyear extends
it to sales into a forum
 More like Helicopteros than Perkins
 Is it continuous and systematic enough? Is it at home enough? No, No
 No connections with the forum and cause of action
 No relatedness
 Daimler v. Bauman
 If there is enough for general jurisdiction don’t need to worry aout
reasonableness/fairness
 Ninth circuit held that MBUSA was Damiler’s agent. No agency.
 Whether the subsidiary performs services that are sufficiently important to the
foreign corporation that if it did not have a representative to perform them, the
corporation’s own officials would undertake to perform substantially similar
services
 Jurisdiction can only be imputed when the former is so dominated by the latter
to be its alter ego
 If importance were sufficient foreign corporations would be amenable to suit
on any or all claims wherever they have an in state subsidiary or affiliate
 Failed to show that MBUSA acted as Daimler’s agent
 Personal jurisdiction over Damiler was predicated on California contacts of
MBUSA (Incorporated in DE and PPoB NJ)
 Held: Daimler is not amenable to suit in CA for injuries allegedly caused by
conduct of MB Argentina that took place entirely outside the US and Daimler is
not considered at home in California
 Specific jurisdiction – arises out of or relates to the defendant’s contacts with
the forum
 General jurisdiction – exercisable when a foreign corporation’s “continuous
corporate operations within a state are so substantial and of such nature as to
justify suit against it on causes of action arising from dealings entirely distinct
from those activities
 Would be approved in every state in which a corporation engages in a
substantial, continuous, and systematic course of business
 Would need continuous operations so substantial to justify suit on action
arising from dealing distinct from those activities. Whether so continuous
and systematic to render it essentially at home in the foreign state.
 A corporation that operates in many places can scarcely be deemed at
home in all of them
 Concurrence
 Two part analysis
 Sufficient contacts with the forum state to support personal jurisdiction
 It must not only possess continuous and systematic contacts with a
forum state but those contacts must also surpass some unspecified
level when viewed in comparison to the company’s nationwide and
worldwide activities
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 Will now have to identify the extent of a company’s contacts in every


other forum where it does business in order to compare them against
the company’s in-state contacts
 Multinational conglomerate can enjoy extensive benefits in
multiple forums and that is essentially at home in each one
 Will be disadvantageous to smaller businesses because larger
companies will be immunized
 Large corporations will not be subject because they do business
elsewhere
 Reasonableness, whether exercising it would be unreasonable under the
circumstances
 Believes it should be decided based on reasonableness. Would be
unreasonable and unfair for California to exercise jurisdiction over a
claim between a Taiwanese plaintiff and a Japanese defendant that
arose out of a transaction in Taiwan (Asahi) Here it involves Argentine
plaintiffs suing a German defendant for conduct that took place in
Argentina.
 Burden on the defendant
 Interesrs of the forum state
 Plaintiff’s interest in obtaining relief
 Interests of other sovereigns in resolving the dispute
 Internet Jurisdiction: Community Trust Bancorp Inc. v. Community Trust Financial Corp.
 Whether online banking services to KY subject them to personal jurisdiction in KY
 It does
 Plaintiff (KY corporation) used the “Community Trust” mark to promote its banking
and financial services
 Defendants Community Trust Bank of TX (TX corporation)
 Defendants Community Trust Financial Corporation and Community Trust Bank
(Both Louisiana corporations)
 Had a website using the words “Community Trust”
 To determine specific personal jurisdiction
 Cause of action must arise from defendant’s activities there
 Acts or consequences must have substantial enough connection to be reasonable
 Defendant must purposefully avail himself to the privilege or consequence of the
forum state
 Whether they took actions in KY that create a substantial connection with the
state so that they should reasonably anticipate being haled into court there
 Defendants have no presence in KY. Offices only in TX, Louisiana and
Mississippi
 They have accounts with a KY address that originally were established
by customers physically located in one of the three states
 All but one of the KY addresses moved to KY after opening the
account
 Unilateral activity cannot be a basis for personal jurisdiction
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 4 people signed up through the defendant’s website for online


banking
 A defendant purposefully avails itself of the privilege of acting
in a state trhoguh its website if the website is interactive to a
degree that reveals specifically intended interation with
residents of the state
 Application for online banking required an address and then
they committed an intentional act by sending passwords to KY
residents. Not isolated and did it knowing they would maintain
the accounts and continuously and systematically access those
accounts (reached out beyond expected states and created
continuing relationships and obligations – Burger King)
 Is it reasonable? Where purposeful availment and cause of action arose,
reasonableness is met.
 State has interest
 Zippo Case
 Sliding scale (it is based on level of interactivity and commercial nature of the
exchange of information)
 One end a website through which the defendant enters into contract with
residents of the forum state that involve the knowing and repeated
transmission of computer files over the internet
 Other end is passive where defendant simply posted information on the
internet website which is accessible to users in foreign jurisdictions
 Is it more than random, fortuitous or attenuated contacts with the state?
 Focuses on the quality not quantity
 Jurisdiction based on power over property
 Pennington v. Fourth National Bank
 Petitioner did not reside in the forum state, attachment of his in-state bank account
satisfied due process
 Jurisdiction extends alike to tangible and intangible property
 Harris v. Balk
 H owed B 180. B owed E 344. E sued H attaching B’s debt
 Maryland had no jurisdiction over Harris to attach the debt because he was only
temporarily in the state but Supreme court reversed. Can’t get Balk via Harris
 He is as much bound to pay his debt in a foreign state when therein sued upon
his obligation by his creditor as he was in the state where the debt was
contracted
 Shaffer v. Heitner
 QIR-2 jurisdiction was constitutional if the property that served as the
jurisdictional predicate was attached at the outset of the case and proper notice
was given
 In rem – me against the world (saying that this land is mine)
 QIR-1 related to the property against subset of people (related to the suit
against a person)
 QIR-2 property used as a jurisdictional hook
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 Presence of property may also favor jurisdiction in cases where


defendant’s ownership of the property is conceded but the cause of action
is otherwise related to rights and duties growing out of ownership
 When property seized is completely unrelated to the cause of action. Can
be substituted for jurisdiction over the person but needs to satisfy the
International Shoe test meaning defendant’s contacts with forum need to
satisfy the standard.
 State court jurisdiction must be evaluated according to the standard in
International Shoe
 Contacts are related to cause of action
 Minimum contacts
 Reasonableness/Fairness
 Jurisdiction cannot rest on property when the property is unrelated to the cause of
action
 Can only get property when you have enough contacts for in personam
 Would only do this if the long arm statute limited plaintiff
 Plaintiff sued in state court in DE and attempted to exercise QIR-2 jurisdiction
over the defendant director by asking the court to attach the shares of stock that
defendants held in Greyhound Corp.
 QIR-2 jurisdiction was rejected by the supreme court
 Defendant’s contacts with DE are not relevant according to International
Shoe. Not QIR-1 because the property is not considered to be the subject
matter of this litigation.
 Determined it is the relationship among the defendant , the forum and the
litigation, rather than the mutually exclusive sovereignty of the States on which
the rules of Pennoyer rest became the central concern of the inquiry into personal
jurisdiction
 Concluded that all assertions of state-court jurisdiction must be evaluated
according to the standards set forth in International Show and it progeny
 Consent Jurisdiction
 Insurance Corp. of Ireland v. Compagnie Des Bauxites De Guinee
 Defendant incorporated in DE but only does business in Guinea
 Foreign insurance companies contested the jurisdiction
 For submitting to the jurisdiction of the court for the limited purpose of
challenging jurisdiction, the defendant agrees to abide by that court’s
determination on the issue of jurisdiction.
 The manner in which the court determines whether it has personal jurisdiction
may include a variety of legal rules and presumptions as well as straight
forward fact finding
 Individuals can subject themselves to powers from which he may otherwise be
protected
 Can waive objections to the exercise of personal jurisdiction, may forfeit
an opportunity to raise objections, or may be estopped from raising the
issue
 In Ratliff v. Cooper Laboratories
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 Sending salesmen to a state regularly does not make them amenable to suit there
even with an application and with authority to do business in the state and had
appointed an in-state agent for service of process
 Has not yet resolved whether registration alone is a sufficient basis for the
exercise of general jurisdiction
 Carnival Cruise Lines v. Shute
 Agreed all disputes and matters whatsoever arising under in connection with or
incident to this contract shall be litigated before the court in the state of Florida
 Supreme court didn’t considered the minimum contacts and addressed the
enforceability of the forum selection clause
 Will be enforced unless really unfair
 Federal Rule 4
 Can exercise personal jurisdiction over a defendant only if that power is authorized
by statute and its exercise comports with due process
 (k)(1)(A) – general service rule. Court “piggy-backs” on the long-arm statute of the
state in which it sits
 (k)(1)(B) – special service rule applies to parties joined under Rule 14 or 19
 (k)(1)(C) – Federal Court Administration Act allows service in any district where the
defendant resides, is found, or has an agent
 When authorized by federal statute, give jurisdiction over defendants when served
with process for certain causes of action
 (k)(2) – establishes personal jurisdiction for a claim that arises under federal law if
the defendant is not subject to jurisdiction in any state’s courts of general jurisdiction
 Two steps
 Whether defendant is subject to personal jurisdiction in any one of the 50
states (not subject to jurisdiction in any state court of general jurisdiction)
 Inquiry whether defendant’s contacts with the nation satisfy due process
(consistent with Constitution and Laws)
 Can have plaintiff show there is not other state for sufficient contacts and show
why not enough or ask defendant to show has sufficient contacts with another
state
 Federal Rule 12?
 Baldwin v. Iowa State Traveling Men’s Ass’n
 Those who have contested an issue shall be bound by the result of the contest and that
matters once tried shall be considered forever settled as between parties. Should apply
in every case where one voluntarily appears, presents his case and is fully heard and
why he should not in the absence of fraud be thereafter concluded by the judgment of
the tribunal to which he has submitted th case
 Confirms that a defendant who makes no appearance remains free to challenge a
default judgment for want of personal jurisdiction
15

 Subject Matter Jurisdiction


 Diversity Jurisdiction
 1332 – Diversity of Citizenship; amount in controversy; costs
 District court has original jurisdiction where the matter in controversy exceeds the
sum or value of $75,000 and is between
 Citizens of different states
 Citizens of different states or subjects of foreign states
 Citizens of different states and in which citizens or subjects of a foreign state
are additional parties
 And a foreign state as plaintiff and citizens of a state or of different states
 Except when there is an express provision in a statute saying it is acceptable to
take the case for less than $75,000
 Corporation deemed a citizen of every state which it has been incorporated and of
the State or foreign state where it has its principal place of business
 1359 – parties collusively joined or made
 1369 - Multiparty, multiforum jurisdiction
 Allows the federal courts to hear cases which the claims arise solely under state law,
so long as constitutional and statutory requirements are satisfied
 Complete diversity rule
 Strawbridge v. Curtiss
 No diversity jurisdiction if any plaintiff is a citizen of the same state as
any defendant, no matter how many parties are involved in the litigation
 Important for out of state investors to think they will receive fair treatment in state
courts
 Retention of diversity jurisdiction is urged as a way to encourage competition
between the state and federal court systems and so to motivate judicial reform
across the country
 Alienage
 Concerned with protecting a discrete class of litigants from prejudice in state
courts
 Mas v. Perry
 Under section 1332(a)(2), federal judicial power extends to the claim of Mr. Mas
(France) against the appellant (Louisiana). Concluded that Mrs. Mas was a
citizen of Mississippi for diversity purposes therefore had proper jurisdiction
under 1332(a)(1).
 Complete diversity of the parties is required in order that diversity jurisdiction
obtain no party on one side may be a citizen of the same State as any party on the
other side (Strawbridge)
 To be a citizen of the State, must be both a citizen of the United States and a
domiciliary of that State.
 Means domicile; mere residence in the State is not sufficient
 Domicile means the place of “his true, fixed, and permanent home and
principal establishment and to which he has the intention of returning
whenever he is absent therefrom”
 Change of domicile may be effected by
16

 Taking up residence in a different domicile with


 The intention to remain there
 Hertz Corp. v. Friend (2010) - Corporation
 Principle place of business (usually headquarters)
 § 1332 (c)(1) – corporations nerve center
 where the decision making and overall control takes place
 Wachovia Bank v. Schmidt (2006) - § 1348 National Banks
 National banks deemed citizens in the state where its main office is found
 Sadat v. Mertes (1980)
 Cannot invoke diversity if a dual national but domiciled in another state
 Could not invoke alienage, because US citizenship was dominant but was not a
citizen of a particular state

 Amount in Controversy
 3 rules:
 The amount alleged must exceed 75K – exactly 75K, it is no good (Freeland).
Cannot include interests and costs and overall recovery is irrelevant
 Court must give plaintiff an appropriate and reasonable opportunity to show
good faith in believing that a recovery in excess of the jurisdictional amount is
reasonably possible (Whitchurch)
 Aggregation – is where we must add multiple claims to get over 75K. Rule: we
aggregate the P’s claims if there is one P vs. one D. There is no limit on the
number of claims. The claims do not have to be related in any way. You can
aggregate all the claims you want this way. You cannot aggregate if you multiple
parties on either sides. Ex: One P vs. two Ds, you can’t aggregate those claims.
 Where we must add multiple claims to get over $75k
 The rule:
 We aggregate π’s claims if it’s one π against one ∆ (Don’t need to be
related)
 No aggregation if multiple parties on either side
 Joint claim – you use the total value of the claim. Here the number of parties is
irrelevant. Joint interest based on substantive law in State. Only can add when
law says we can, otherwise can’t
 A.F.A. Tours v. Whitchurch (Examples 287)
 Dismissal for lack of jurisdiction was improper because the court (1) failed to
give AFA an appropriate opportunity to show that it satisfied the jurisdictional
amount and (2) failed to apply the proper standard to AFA’s request for damages
and injunctive relief
 Must appear to a legal certainty that the claim is less than the jurisdictional
amount
 Plaintiff has the burden to prove the amount
 Amount must be pleaded in good faith
Burden of proving AIC is on the person asking for diversity jurisdiction.
 Freeland v. Liberty Mut. Fire Ins. Co.
 Must be more than $75,000. Cannot be exact
17

 Federal Question Jurisdiction


 Usually granted on three grounds
 Promote the uniformity of federal law
 To encourage judicial expertise in interpreting federal law
 And to protect against possible state-court hostility to claims arising under federal
law
 1331
 District courts have original jurisdiction of all civil actions arising under the
Constitution, law or treaties of the United States
 Need both Constitution and Statute
 Federal Ingredient isn’t enough
 Osborn v. Bank of United States
 Might “form an ingredient” in the overall case. Even if federal issue is tiny
in a dispute dominated by State Law issues, would permit a federal court
to hear the case as it “arises under”
 It is not enough for the case just to raise a federal issue. The claim itself must
arise under federal law.
 How do we know it does:
 We apply the well-pleaded complaint rule –
 we look only at the complaint, we do not look at anything the
defendant says. In the complaint we ignore everything the P says
except the claim itself. This is what you ask: Is the P enforcing a
Federal right? If yes – then federal question if no, then no SJ
 Ask: Is the plaintiff attempting to vindicate some right given by
federal law? Do they NEED Federal Law
 Louisville & Nashville v. Mottley
 Case failed to invoke federal question because of the well pleaded
complaint rule. Federal issue needs to be in well pleaded
complaint. Was simply a breach of contract claim which was under
state law.
 Only federal law was the railroad’s defense that the federal
statute forbade it from honoring the pass
 An anticipated defense is not a part of a well pleaded complaint
 Federal ingredient – have one. Arises under Article III Section 2
but not in 1331.
 Well pleaded complaint
 Do they need Federal law?
 No. Was not attempting to vindicate some right given by
federal law. The federal law precluded rights but did not give
any rights
 Requirement law be central to the claim.
 American Well Works v. Layne & Bowler
 Brought claim under state trade liable law because threatened to
sue anyone who bought the pump and drive customers away
18

 Holmes/Creation Test: A suit arises under the law that creates the
cause of action.
 If created by Federal law, arises under (usually)
 If created by State law, does not arise under federal law, unless
requires application of Federal law.
 EXCEPTION: Shoshone Mining Co. v. Rutter
 Federal law creates cause of action but it is governed by state
law
 Met federal ingredient test so could have had jurisdiction
 Did not arise under the federal law
 T.B. Harms v. Eliscu
 dispute about who owns copyright but state law would resolve the
dispute (really is a contract claim).
 Claim under state law: contract -> no federal issue in well pleaded
complaint
 Holmes/Creation Test – remedy for complaint is not expressly
granted
 Had federal ingredient to take it but didn’t have a statute
 Smith v. Kansas City Title & Trust Co.
 Sued to stop the corporation from investing in bonds issued under
federal statute. Argued statute was unconstitutional
 Arose under state law, but litigation focused on federal law so
upheld federal question jurisdiction
 Federal issue was a part of the well pleaded complaint
 Moore v. Chesapeake & Ohio Railway
 Plaintiff claimed that his employer had violated the state statute
 State law created cause of action in a case to be decided by the
construction of federal law
 No federal question jurisdiction did not arise under federal law
 Federal issue comes up as anticipated defense
 Nature of the federal interest in Smith was more important
(uconstitutional)
 Merrell Dow Pharmecuticals v. Thompson
 Alleged that it violated the Federal Food, Drug and Cosmetic Act
by misbranding a drug.
 Court faced a case where state law created the claim of negligence
per se but in which the litigation would focus on interpretation of
federal law.
 No federal question jurisdiction
 More like Moore because the federal statute was not
unconstitutional
 Concerned about flood gates
 Grable & Sons Metal Products v. Darue
 Quiet title action – in rem in state court because federal statute
required personal service
19

 Wants to remove federal court and can if arising under


jurisdiction but the federal issue has to be substantial
 Set forth three factors for whether state law claim arise under
federal law
 First look at Holmes/Creation test: Does federal law create the
cause of action asserted? If no, continue below.
 Mottley - Case necessarily raises a federal issue in the well
pleaded complaint
 Federal issue (1) actually disputed (legal disputes over fact
disputes) (Empire) and (2) substantial (to the federal system as
a whole looking (1) forward and (2) backwards) (Merrell Dow,
Moore, Smith)
 Flood gates: And federal jurisdiction will not disturb any
congressionally approved balance of federal and state judicial
responsibilities (Merrell Dow)
 Federal issue was actually disputed because of the IRS notice
requirement. It was substantial. Federal jurisdiction would not
affect the balance and swamp the courts
 Merrell Dow would have swamped the courts
 Empire Healthcare Assurance v. McVeigh
 Rejected federal question jurisdiction because it did not present
significant question of federal law.
 Necessary?
 Contract is at issue-so federal common law
 Dispute?
 Contract is in dispute. Fact dispute. Care more about legal
disputes
 Substantial? Congress did not create a federal cause of action.
Silence means jurisdiction is not important.
 Looking forward: No—it’s fact based.
 Backward-No, would just affect this one party.
 Fed state balance
 Congress did not speak on issue, so they interpret the silence
 Gunn v. Minton
 Discussion of whether legal malpractice in handing of a patent case
must be federal for failing to raise the experimental use exception
 Creation test: does not arise under federal law. Arises under state
malpractice claim
 Necessary: malpractice must establish duty, breach, causation and
damages
 Must show would have prevailed in claim if made the
experimental use argument and this necessarily requires
application of patent law
 Disputed?
20

 Yes, Gunn says experimental use was not properly applied.


Minton says it was.
 Is a dispute over federal law
 Substantial?
 No. Not substantially important to the federal system as a
whole.
 Backwards: won’t change the patent is invalid
 Forwards: wont make the patent valid
 Flood gates/Balance?
 Won’t undermine federal law if state courts decide
 Did not want fed courts to take power of malpractice from state
courts
Mottley: (RR free passes case)
 1) Federal issue raised in complaint? Is federal law a necessary element?
o No!
o This is essential, if this first prong is not met, the rest wont matter, but for
argument’s sake and for test’s sake, explore all
o Ironically this case would probably meet the other three prongs
Smith: (Jurisdiction)
 1) Federal issue necessary?
o Yes. Under MO law, this is a federal issue (ultra vires)
 2) Actually in dispute?
o Yes.
 3) Substantial?
o Yes.
 a) Its a matter of law not fact
 b) *Constitutionality of a federal statute
 4) Federalism concerns?
o Not really, there aren’t too many states out there with these kinds of laws, so
probably wouldn’t be usurping their power
Moore: (No Jurisdiction)
 1) Federal issue raised?
o No, it’s only raised as a potential defense which isn’t good enough
 BUT, the court actually looks past this so move on…
 2) Actually in dispute?
o Yes
 3) Is it substantial?
o Not really, it really wont change much about federal law
 4) Federalism concerns?
o It actually would be encroaching upon states
The Court is Sensitive about taking power away from states

 Declaratory Judgments
 Allow the federal court to issue a declaration of rights and other legal relations to
an interested party in controversy
21

 Court tells you what the law is and whether what you are doing it right or
wrong
 Ask ourselves: Usually defendant trying to beat the plaintiff; what would it look
like if traditional action where plaintiff’s asking court to get defendant to do
something
 Within its jurisdiction that matters and doesn’t expand jurisdiction
 Joinder
 Cannot affect the requirements for personal jurisdiction, subject matter jurisdiction or
venue. Therefore they need to be addressed.
 When party is joined in defensive capacity, must have personal jurisdiction over
them. (Offensively inserting, submitted to personal jurisdiction)
 Every claim joined in federal court must be supported by federal subject matter
jurisdiction
 Must address three steps for whether a claim can be asserted (or a party joined) in federal
court requires:
 (1) is there a joinder provision in the Federal Rules that allows assertion of this claim
(or joinder of party)?
 (2) if so, does this claim invoke diversity or citizenship, alienage or federal question
jurisdiction?
 If so, may be assert in the pending case
 (3) if not, whether the claim can nonetheless be asserted in federal court through
supplemental jurisdiction
 Harris v. Avery (OLD RULE)
 Two causes of action of false imprisonment and slander
 Question: did they arise out of the same transaction or occurrence?
 Allowed to unite several causes of action in the same petition, whether they be
legal or equitable, or both when they are included in either:
 The same transaction, or
 Transactions connected with the same subject of action
 Determined all the causes of actions may be untied in an action on the case
 Although different injuries, arose out of the same transaction
 Two categories
 Permissive rules – gave litigant a litigant the option of aggregating parties and claims
in single lawsuit, but not required
 Mandatory – require the litigant to do so
 Rule 18: Joinder of claims
 (a) Governs what the plaintiff can assert in a single case. No requirements.
 Claims DO NOT have to be related. They do not have to rise out of the same
transaction or occurrence because will be split for trial if there is jury confusion
(Rule 42: allows severing)
 Rule 42(a): Consolidation
 If actions beore the court involve a common question of law or fact, the
court may:
 Join for hearing or trial any or all matters at issue in the actions
 Consolidate the actions; or
 Issue any other orders to avoid unnecessary costs or delay
22

 The plaintiff MAY join as many claims as they have. NOT required
 Claim joinder is not only by the plaintiff because defendants can become
plaintiffs by asserting counterclaims, crossclaims or third-party claims.
 Claims can only be asserted in federal courts if they invoke federal subject matter
jurisdiction
 M.K. v. Tenet
 Joinder was possible because Rule 18 allows unrestrictive joining
 Rule 13: Counterclaim and Crossclaim (Claim not a defense and asserted in the
answer)(page 39)
 13(a) Compulsory Counterclaim
 (1) pleading MUST state any claim that at the time of service the pleader has
against the opposing party if the claim: (Claim must invoke federal subject matter
jurisdiction
 (A) arises from the same transaction or occurrence as the opposing party’s
claim
 (B) Does not require adding another party over whom the court cannot acquire
jurisdiction
 NOTE* - if the court needs to add another party and can’t be joined
because can’t get jurisdiction not forced to bring the claim
 If CC meets diversity you’re good you have SMJ over it
 If CC doesn't meet diversity (under AinC), it doesn't meet Fed Q, it must
meet 1367! It usually will because its CNOF and it's a claim by the
DEFENDANT, so it will meet (a) and (b) don't worry.
 (2) Exceptions
 (A) defendant need not assert an otherwise compulsory counterclaim if she
has already asserted the claim in another case
 (b) Permissive Counterclaim: (Not required to assert it. MAY be asserted). Does not
arise from the same “transaction or occurrence”
 Never will meet supplemental
 (c) Relief Sought in a Counterclaim: Counterclaim may exceed the plaintiff’s claim of
relief
 (d) Counterclaim against the United States: does not expand the right
 (e) Can assert the claim by supplemental pleading:
 United States v. Heyward-Robinson Co.
 D’A and H were contractors on two jobs in Ct. The Navy Job was federal and the
Stelma Job was state. D’A sued H and Maryland under the Miller Act for
payment for the Navy job. H denied this filed a counter claim for over payment on
both jobs. D’A denied and counterclaimed for money from the Stelma Job.
 The contracts were treated together at trial, had joint payment, insurance, and
facts were connected. Jurisdiction over Stelma claim was disputed
 Both the original claim and the Stelma counterclaim arose out of the same
transaction or occurrence and thus joinder was proper (no independent jurisdiction
basis needed)
 Joining is about efficiency
 The Stelma counterclaim was compulsory so it came under sup. Jurisdiction
though it was a state claim.
23

 (g) Crossclaim against a Coparty (Permissive: don’t want to force into a venue they
didn’t choose)
 Pleading MAY state a crossclaim
 Must be against a coparty
 Must arise out of the same transaction or occurrence as the original action or
of a counterclaim therein
 May include an assertion that the coparty is or may be liable for all or part of the
claim against the party asserting the crossclaim
 Meaning would be responsible for the plaintiff’s claims
 ALWAYS meets supplemental jurisdiction
 Crossclaims by plaintiffs needs to be based on the counterclaims made by
codefendant parties
 LASA v. Alexander (668)
 Facts: Several claims arose out of contracts to construct the Memphis City
Hall, including cross-claims between the contractor, Southern Builders (D)
and one of the subcontractors, Alexander (D) Primary case is about the
contract between Lasa and Alexander-- Alexander’s counterclaim against
Lasa for breach and restitution are both compulsory – Rule 13(a)
 Alexander’s cross-claims against SB for nonpayment and firing – Rule 13(g)
OR Rule 18
 Satisfies requirements for cross claims because it is against a co party and has
arisen from the original cause of action (but for the original contract, the
subcontract wouldn’t have been breached
 Policy considerations behind rule 13 was that the rights of all parties be
adjudicated in one trial; even if based on two contracts
 Intended to dispose of entire subject matter arising from one set of
facts in one action
 Broad reading of “transaction or occurrence”
 If too complicated; judges discretion under rule 42(b) to separate
certain claims into separate trials if conducive for judicial economy
 What do we take from this case?
 A) Every time a claim is asserted against me, I have compulsory
counterclaim obligations and permissive counterclaim opportunities
 Party having suit brought against it has a counterclaim obligation if LR
(as is the rule)
 B) Rule 18 says all claims can be joined, related or not
 Danner v. Anskis (679)
 13(g) can be filed by defendant against co-defendant, or plaintiff against co-
plaintiff only if the plaintiffs are subject to a counterclaim by defendant
 Can’t file cross claim against co-plaintiff if not being sued for something
 Liebhauser **the subject matter of action important, and the language of the
statute is important
 Earle MSimilar to LASA, just b/c you bring in party under Rule 14 doesn’t
mean they’re not a co-party…we can still treat them as a co-party depending on
24

circumstance (In LASA Alex brought in totally new party when they brought in
Aydellote but can still treat him as a co-party)
 Same Transaction or Occurrence Test
 (1) Same issue of fact or law
 (2) Res Judicata
 (3) Same evidence to refute P’s claim and support D’s counterclaim
 (4) Logical relationship (Heyward)
 Are they connected? Always YES as lond as there is subject matter
jurisdiction
 Rule 20: Permissive Joinder of Parties
 CoPlaintiffs (a)(1) may join in one action if their claims:
 (A) Arise “out of the same transaction, occurrence or series of transactions or
occurrences”
 (B) And, raise one common questions of law or fact
 CoDefendants (a)(2) may be joined if the claims against them”
 Arise “out of the same transaction, occurrence or series of transactions or
occurrences”
 And, raise one common questions of law or fact
 Ryder v. Jefferson Hotel Co.
 Two separate torts to a husband and a wife must be brought separately
 M.K. v. Tenet
 6 P sued the CIA, director and others for violation of the privacy act
 Joinder was possible because Rule 18 allows unrestrictive joining
 Plaintiff’s use Rule 20(a)(1)(A) known as the transactional test and argue that the
claims are logically related and can be said to arise out of the same transaction,
occurrence or series of transactions or occurrences.
 They have satisfied the first prong
 Second prong 20(a)(1)(B): are the claims related by a common question of law or
fact?
 Yes. Satisfied second prong.
 Tanbro Fabrics Corp. v. Beaunit Mills Inc.
 Involved in separate or independent contracts and not in the same transaction or
occurrence
 Bad they didn’t join because the seller and the processor both want to blame each
other
 George v. Smith
 Prisoner could not join parties because the claims were unrelated and did not arise
out of the same transaction.
 Rule 21: Misjoinder and Nonjoider of Parties
 Misjoinder of parties is not a ground for dismissing an action. On motion or on its
own, court may add or drop a party. Court may also sever any claim against a
party.
 Way to override the P’s structuring by forcing joinder of absentees
 `a: Required Joinder of Parties (Trying to determine if an absentee should be
forced into a suit)
25

 (a) Persons Required to be joined if feasible


 (1) Required party: A person who is subject to service of process and whose
joinder will not deprive the court of subject-matter jurisdiction must be joined
as a party if:
 (A) Complete relief prong: in that person’s absence, the court cannot
accord complete relief among the existing parties, or (for efficiency where
would fail to resolve the dispute without them)
 Could mean leaving the absentee out will fail to resolve the dispute
which is possible every time if after the resolution the absentee will
sue
 (B) Prejudice Prong: person claims an interest and disposing of the action
in the person’s absence may: (want to avoid prejudice to someone either
absentee or defendant)
 (i) absentee: impair or impede the person’s ability to protect the
interest, or (requires absentee claim an interest relating to the subject
of the suit)
 Interest must be legally protected
 Direct stake in the pending litigation where could have their
interest harmed if they are not joined in the pending case
 Should not allow the plaintiff leaving the absentee out to harm
the absentee
 (ii) defendant: leave an existing party to a substantial risk
 Plaintiff structuring the case causes harm to the party being haled
into court, the party should be protected
 (b) When joinder is not feasible, Must determine whether in equity and good
conscience if the court should proceed or dismiss. (need to view in way of how it
will harm the person who can’t be joined)
 (1) Extent to which judgment might prejudice the person or the existing
parties
 (2) extent to which prejudice could be lessened or avoided by
 (A) protective provisions in judgment
 (B) shaping the relief;
 (C) Or, other measures
 (3) whether judgment rendered in person’s absence would be adequate
 (4) whether the plaintiff would have an adequate remedy if the action were
dismissed (Is there another forum where they could get relief?)
 Three categories
 Proper (largest circle) – reflects people who may be joined at the option of the
plaintiff because they have sufficient connection to the suit (20(a))
 Required/Necessary (middle circle) – persons who the plaintiff did not join
but whose presence is so desirable that the court will override the plaintiff’s
choice by requiring them to join if possible
 Indispensable (inner circle) – persons whom plaintiff did nto join and who
because they are necessary should be joined but cannot be joined (no personal
jurisdiction) leading to dismissal
26

 Three step process


 Assess whether the absentee is a required party under Rule 19(a)
 If the absentee is required, the court then asks whether she can be joined in the
pending cases,
 whether it is feasible determination (19(b))
 (1) whether the absentee is subject to personal jurisdiction (Subject to
service of process)
 (2) whether the absentee can be joined without affecting diversity of
citizenship jurisdiction (and deprive the court of subject matter
jurisdiction)
 (3) And whether the absence, once joined would have a valid objection
to the venue (would object to venue or would make the venue
improper)
 If not feasible, Must determine whether in equity and good conscience if
the court should
 (1) allow the case to proceed without the absentee or on the other hand
 (2) dismiss the case under 12(b)(7)
 Bank of California Nat. Ass’n v. Superior Court
 Contract was made where decedent agreed to leave her entire estate to the
plaintiff and there was a motion that the other defendants which were not
included in the original suit were necessary and indispensable parties
 Claimed that it would adversely affect the rights of such parties, would
result in a multiplicity of suits and would subject the petitioning executor
to inconvenience, expense and the burden of future litigation
 Determined that taking money from the Hospital would not upset the other’s
interests in the state and they were therefore not indispensable parties
 Provident Tradesmens Bank & Trust Co. v. Patterson
 Automobile owned by Dutcher was driven by Cionci. Lynch and Harris were
passengers and they collided with Smith.
 Dutcher if joined would destroy diversity jurisdiction. Classified as should be
joined if feasible.
 Dutcher had an interest and the judgment might impede his interest
 Equity and Good Conscience test from Rule 19
 Plaintiff’s interest in having a forum
 Defendant may properly wish to avoid multiple litigation, or inconsistent
relief, or sole responsibility for liability that is shared with another
 Interest of the outsider whom it would have been desirable to join
 Whether the judgment issued in the absence of the nonjoined party will be
adequate
 Rule 14 Impleader/Third party practice
 (a) When a Defending party may bring in a third party
 (1) Timing of the summons and complaint within 14 days of serving an
answer
 (2) Third Party Defendant’s claims and defenses
 (A) must assert any defense against TPP under rule 12
27

 (B) must assert any counterclaim against the third party plaintiff under
Rule 13(a), and may assert any counterclaim against the TPP under Rule
13(b) or any crossclaim against another TPD under rule 13(g)
 (C) may assert against plaintiff any defense that the TPP has to the
plaintiff’s claim
 And (D) may assert against the plaintiff any claim arising out of the
transaction or occurrence that is the subject matter of the plaintiff’s claim
against the third party plaintiff
 (3) Plaintiff’s claims against a TPD - may assert against the TPD any claim
arising out of the transaction or occurrence that is the subject matter of the
plaintiff’s claim against the TPP. TPD must then assert any defense under
Rule 12 and any counterclaim under Rule 13(a), and may assert any
counterclaim under rule 13(b) or any crossclaim under Rule 13(g)
 (5) TPD claim against a nonparty
 (b) when a plaintiff may bring in a third party – when a claim is assert against a
plaintiff may bring a third party if this rule would allow a defendant to do so
 Only a defending party can join an absentee through impleader
 Defending party using the impleader is the Third party plaintiff and the
absentee joined by the impleader is a third party defendant
 Usually used when they may be responsible
 for the harm caused (contribution claim)
 or agreed to take on liability (indemnify)
 Rule 14(a)(1) establishes that a defending party has a right to implead
within 14 days after she serves her original answer to the plaintiff’s
complaint (permissive rule. Not required to implead.)
 Rule 14(a) creates three claims:
 (1) impleader claim under 14(a)(1) asserted by a defending party against an
absentee who may owe her indemnity or contribution on the underlying claim
against her
 (2) the unsloping 14(a) claim asserted by the plaintiff against the TPD under
Rule 14(a)(3)
 (3) And the downsloping 14(a) claim asserted by the TPD against the plaintiff
under Rule 14(a)(2)(D)
 Jeub v. B/G Foods Inc.
 Can implead a third party prior to a final judgment; Rule 14 in not restricted to
the rights of indemnity of contribution which are presently enforceable
 May implead a party who is or may be liable
 Too, Inc. v. Kohl’s Department Stores Inc.
 Impleader appropriate when the third party defendant’s liability to the third
party plaintiff is dependent on the outcome of the main claim or third party
defendant is potentially secondarily liable as a contributor to the defendant
 Things to consider when impleading a third party defendant
 Whether the movant deliberately delayed or was derelict in filing the
motion
 Whether impleading would unduly delay or complicate the trial
 Whether impleading would prejudice the third party defendant
28

 And whether the third party complaint sttes a claim upon which relief can
be granted
 Rule 24: Intervention
 Absentee brings themselves into the pending case
 (a) intervention of right (must allow them to join: burden on intervenor)
 (1) federal statute may confer the right
 (2) Can intervene in absence of a statute if:
 (1) claims an interest relating to the property or transaction that is the
subject of the action
 And (2) situated that disposing of the action may as a practical matter
impair or impede the intervenor’s ability to protect its interest
 (3) will not have the right to intervene if an existing party adequately
represents her interest
 (b) Permissive intervention (Court has discretion to permit the absentee to join)
 Should be granted if the court determines that its benefits outweigh the
burdens it creates
 (1) in general – may permit
 (A) given conditional right to intervene by federal statute (judges
discretion)
 (B) has claim or defense that shares with the mainaction a common
question of law or fact
 (2) By Government officer or agency (similar to A and B above)
 (3) With discretion generally look at
 (1) whether the absentee has delayed unduly in seeking to intervene
 (2) whether intervention might prejudice any existing parties;
 And (3) the status of the pending proceedings
 (c) Notice and pleading required
 Generally look at
 (1) how long the absentee knew of her interest before seeking to intervene
 (2) the extent of prejudice caused to the existing parties by the absentee’s
delay
 (3) the extent to which denial of intervention might prejudice the absentee;
 And (4) unusual facts that augur for or against a finding of timeliness
 Smuck v. Hobson
 Determined that both Hansen and Smuck had no right of intervention under
Rule 24(a)(2)
 Because Hansen’s interest did not relate to the property or transaction
which is the subject of the action and Smuck has no appealable interest
because he had a fair opportunity to participate in its defense and in the
decision not to appeal and has no interest as an individual
 Policy behind interest test; accommodation of two possibly conflicting goals
 To achieve judicial economies of scale and
 To prevent a single lawsuit from becoming fruitlessly complex
 Parties interest in the case is less important than if the case would
impede his protection of his interests, or that his interest is not
adequately represented
29

 Supplemental Jurisdiction
 Every claim asserted in a case in federal court (not just the plaintiff’s original claim) must
satisfy a basis of federal subject matter jurisdiction
 Meant to foster
 Efficiency
 Convenience
 And consistency of outcome
 If it does not have an independent basis, it still can be heard in federal court through
supplemental jurisdiction. You must have one claim that can get it into court on an
independent basis and supplemental is used for the additional claims that don’t meet
it on an independent basis
 may take jurisdiction over claims that do not by themselves satisfy an independent
basis if and only if the claims are so closely related to the claim that invoked the
federal court’s jurisdiction as to be considered part of the same case or controversy
claim
 United Mine Works v. Gibbs
 Plaintiff and defendant were citizens of Tennessee so there was no diversity
 Two claims
 Defendant violated his rights under the federal labor laws
 And that the same behavior by the defendant also violated the plaintiff’s rights
under state law
 Believed had supplemental jurisdiction over the claim because the claim
“derived from a common nucleus of operative fact” with the claim that
invoked the federal subject matter jurisdiction
 Satisfied if the claims arise from the same transaction or occurrence
 Aldinger v. Howard – dismissed because she was living with her boyfriend (civil rights
claim)
 Pendant claim cannot be brought
 Problem with adding an additional defendant
 Congress excluded civil rights actions against counties and municipalities
 Owen Equipment v. Kroger
 Kroger sues OPPD who then adds Owen. Kroger then amends and adds Owen. OPPD
assumed Owen was from Nebraska but was from Iowa
 No federal issue and no complete diversity
 No independent basis for supplemental jurisdiction
 Diversity over OPPD. Adding Owen would cause contamination
 1367(a) kicks us out
 Owen came in under Rule 14
 Finley v. United States
 1346 allows jurisdiction over civil actions against United States
 statute doesn't say that you can bring this claim so they interpreted as you cannot bring
claim
 Walkthrough 1367
 Civil Action which district courts have jurisdiction
 Additional claim related
 Pendant claim or pendant party
30

 1337(b) exceptions
 1332? No, jurisdiction on 1331
 after this you stop reading (b)
 1367 (c) – discretionary measures
 Same as Aldinger
 Exec. Software v. United States – 1367 (c)
 Codifies Gibbs
 Have the power, but declining to use it
 Court must articulate why

 Section 1367(a) – does the broad grant of supplemental jurisdiction apply?


 Freestanding Claim – is there a claim over which the court has original jurisdiction?
 Common Nucleus of Operative Fact – If the same facts give rise to a state or a
federal claim then they comprise a case and it is up to the court’s discretion whether
to hear the case and the various state and federal issues simultaneously. United Mine
Workers of America v. Gibbs (U.S. 1966). Gibbs is always met when the claim
comes out of the same transaction or occurrence. This defines § 1367(a).
 Section 1367
 (a) Complete diversity and at least one AIC met? Yes? Continue
 (b) – Does § 1367(b) nonetheless bar jurisdiction?
 Claim by Plaintiff against someone made a party under Rule 14, 19, 20 or 24? No?
Continue.
 Does the supplemental claim consist of a claim by the Plaintiff or by Plaintiffs joined
under Rule 19 or Rule 24? No?. then jurisdiction
 Discretionary Basis?
 the claim raises a novel or complex issue of State law,
 the claim substantially predominates over the claim or claims over which the district
court has original jurisdiction,
 the district court has dismissed all claims over which it has original jurisdiction, or
 in exceptional circumstances, there are other compelling reasons for declining jurisdiction.
GRABLE.
 Claims still allowed in diversity-only situations:
 Compulsory counterclaims: Rule 13(a)
 Additional parties to compulsory counterclaims: Rule 13(h)
 Multiple plaintiffs joined permissively under Rule 20—supplemental jurisdiction
applies for amount in controversy purposes but does not apply to remove the
requirement of complete diversity
 joinder of plaintiffs for Rule 23 class actions based on diversity (if one or more
named plaintiffs meet diversity and amount in controversy requirements, the
unnamed plaintiffs do not need to meet these requirements because they fall within
the court’s supplemental jurisdiction)
31

 Rule 13(g) cross claims (claims by one defendant against another)


 Rule 14 impleader of third party defendants
 Exxon Mobile Corp. v. Allapattah Services, Inc.
 
When other elements of jurisdiction are present, if at least one P satisfies amount
in controversy requirement, federal court can exercise supplemental jurisdiction
over the claims of other P’s that don’t meet the requirement as long as the claim are
part of the same controversy.
 §1367 makes it clear that supplemental jurisdiction extends to claims of joinder or
additional parties
 Rule 20 for plaintiffs was left out of the exceptions in §1367 (b)
 Supplemental Jurisdiction in Short: The Test
o Must share common nucleus of operative fact (same T/O)
 Limitations:
 In diversity case, P cannot use supplemental jurisdiction to overcome lack of
diversity
 But P can use it to overcome lack of diversity in FQ case
 P can also use it to overcome lack of amount in controversy for a claim in a

diversity case
 And any party but P can use it to overcome either a lack of complete diversity or

amount in controversy in any case (diversity/FQJ)
 So a non-FQ, non-diversity claim can be heard in fed court if it meets the same t/o
test
 UNLESS it is Asserted by P in a diversity case and would violate complete diversity
 Removal §1441
 Gives defendant sued in state court the right to remove the case to the federal court. If it
is removed improperly, federal court can remand it back to the state court.
 Do not need the courts permission to remove the case but if you file a permissive
counterclaim in state court probably waives the right to remove
 By removing the case to federal court, the defendant does not waive the defense of
lack of personal jurisdiction
 Protects an out-of-state defendant from the threat of local bias
 §1441
 (a) grants the right to remove
 If there are multiple defendants and any object to remove, the case cannot be
removed.
 Can only remove a case if it is one of which the district courts of the United States
have original jurisdiction
 Means they have to satisfy the basis of federal subject matter jurisdiction and
they have the burden to establish the federal subject matter jurisdiction
 Exceptions
 1441(b)(2), there can be no removal of a diversity case if any defendant is a
citizen of the forum
 1446(c)(1), provides that a case invoking §1332 cannot be removed more than
one year after commencement of the action
32

 Unless the plaintiff has acted in bad faith to prevent a defendant from
removing the action
 1446
 (c)(2) provides as a starting point that the plaintiff’s dollar demand in her complaint is
deemed to be the amount in controversy
 If the plaintiff
 (a) sues for nonmonetary relief
 (b) sues for monetary relief without stating an amount
 Or (c) sues for monetary relief of $75,000 or less in which the claim does not
cap what she can recover
 Defendant may allege the amount in controversy in her notice of removal
 Shamrock Oil & Gas Corp. v. Sheets
 Whether a plaintiff can remove on a federal counterclaim
 Cannot because the plaintiff originally picked the forum and would have picked
the federal courts originally
 Defendant can remove if they are a citizen of another state if the matter in dispute
exceeds the jurisdictional amount
 §1441 – general removal: grants removal from state to fed courts “embracing the place”
where the claim was filed, this is only if it could have been filed in fed court originally
 §1441(a)- grants right of removal to the D or Ds (all must agree to remove)
 §1441(c)- provides that if the P joins a separate and independent federal question
claim with one or more removable claims, the D may remove the entire case
 Problematic with the courts to determine “separate” [don't worry about this]
 §1441(e)- provides special removal rules for multiparty single accident actions that
can be heard in fed court under minimal diversity of §1369
 §1441(f)- allows for removal even if state court did not have jurisdiction (was an
exclusively fed court issue)
 §1446 –
 §1446(a)- sets forth the filing process of a notice for removal
 §1446(b)- requires that the notice of removal be filed in federal court within 30 days
after “receipt by the defendant, through service or otherwise” of the complaint in the
case she wishes to remove.
 §1446(b)(2)(A)- Congress codified the “rule of unanimity,” which requires that
removal be joined by all defendants “who have been properly joined and served.”
 §1446(c)- if removal is improper the P must move to remand within 30 days, unless
its improper due to lack of subject matter jurisdiction, then there is no limit and the
court must remand
 §1446(d)- requires the D give written notice to all adverse parties and file a copy with
state court
 §1447 –
 §1447(c)- If removal was improper the court must remand it to state court
 §1447(d)- the order to remand under 1447(c) is not reviewable on appeal or
otherwise, except in civil rights cases removed according to 1443
 §1447(e) – court
33

 Pleading
 Rule 8(a)
 Three requirements to avoid dismissal
 (1) a statement of the grounds of subject matter jurisdiction
 Not including personal jurisdiction
 (2) a statement of the claim to show pleader is entitled to relief (most important)*
 Can be attacked for two kinds of insufficiency with 12(b)(6)
 Legally insufficient – allows the case to go forward
 Looks at the face of the complaint
 If the plaintiff proved everything alleged here, would she win?
 Does the law recognize a right to recover on the facts she has alleged?
 Or Factually insufficient
 Want to plead facts over conclusions of law
 Should be allegation of facts constituting a cause of action instead
of conclusory statements
 Defendant will usually challenge this with a motion to dismiss for failure to
state a claim under 12(b)(6)
 (3) And a demand for relief sought.
 Do not need to complain damages unless diversity to prove diversity for
8(a)(1)
 Dioguardi v. Durning (559)
 Held the tonics for a year and sold them at auction. Plaintiff bid $110 for them but
someone else bid $120 and the sale was made to the other person
 District court granted a motion to dismiss for failure to state facts sufficient to
constitute a cause of action. Court reversed saying they did not see how plaintiff
could be properly deprived of his day in court
 Goal was try to remove formalism
 Defendant would say no notice cause had no idea what the complaint was about
 A complaint must state just enough facts to sufficiently notify the opposing party
of the claims against him so as to allow them to begin preparing a defense
 Conley v. Gibson (562)
 Said that Rule 8 only requires that the plaintiff give the defendant fair notice of what
the plaintiff’s claim is and the grounds upon which it rests
 Notice pleading – all plaintiff needs to do is put the defendant on notice
 For fairness
 A complaint should not be dismissed for failure to state a claim unless it appears
beyond a doubt that the plaintiff can prove no set of facts in support of their claim
which would entitle them to relief
 Form 11
 Date, place and uses negligence. Doesn’t have to establish negligence or says
anything how they were negligent
 If too specific and wrong would be in trouble. Want it vague
 Swierkowitz v. Sorema N.A. (565)
 Was isolated by Mr. Chavel and excluded from business decisions and meetings and
denied the opportunity to reach his true potential
34

 Court said they need to show a prima facie case that raises an inference of
discrimination
 He was terminated, there was discrimination and other people weren’t
 Leatherman v. Tarrant County Narcotics Intelligence & Coordination Unit
 ***When we read a complaint, we take everything (facts) to be true…All inferences
are to be drawn in favor of the plaintiff
 Still true now, but now it’s harder to decide what it means to allege facts/inferences
 Bell Atlantic Corp. v. Twombly (569)
 Congress tried to pass a law to increase competition in telephone markets by
permitting ILEC’s to provide long distance service
 They chose not to compete in local markets and the prices didn’t go down
 Plaintiff’s in Twombly brought a class action on behalf of telephone customers
seeking to allege violation of the Sherman Act on the grounds of restraint of trade
 The plaintiff’s needed to survive a 12(b)(6) motion to dismiss for failure to state a
claim
 Plaintiffs would need to prove at trial that any conscious parallel behavior was
a result of this agreement
 Would need to show some conscious parallel behavior and some plus
factor to demonstrate that the behavior was the result of agreement
 Question: what must the plaintiff plead to satisfy Rule 8(a)(2)
 Conley said the complaint was sufficient unless it appears beyond a bout that the
plaintiff can prove no set of facts in support of his claim which would entitle him
to relief
 Claiming in Twombly that they did not set forth enough factual matter to suggest
that an agreement was made
 Plaintiffs must go beyond possibility and allege plausibility
 Require enough facts to state a claim to relief that is plausible on its face
 Want to avoid the threat of discovery expense because it will push cost-
conscious defendants to settle even anemic cases before reaching trial
 Court says we need more than Swierkowitz
 Important from Twombly:
 Saying that a company had an actual agreement is an element of the civil action
so we cannot take that as true
 Step 1: which allegations are factual and which are conclusory?
 Take the facts only not the legal conclusions
 Step 2: taking facts as true, can we infer a plausible claim
 Only complaints with plausible claims for relief will survive a motion to
dismiss
 Ashcroft v. Iqbal
 For a motion to dismiss, they ignore legal conclusions alleged in the complaint
 Rather they look at the factual allegations to see if the claim is plausible (More
than possible) Is there a reasonable inference of the alleged misconduct?
 To determine this plausibility, the court draws on its judicial experience and
common sense
 Need to be more than formulaic recitation of the elements of a claim (Legal
conclusions)
35

 Some believe with Twombly and Iqbal that they improperly raised the bar for entry to
federal litigation
 IMPORTANT FOR PLEADING:
 Step 1: allegations: which are fact which are conclusory?
 Are they formulaic recitations of the elements of a claim?
 Step 2: Looking at only factual allegations in plaintiff’s favor taken as true, does it
move towards plausibility?
 More than possible less than probable? Reasonable inference of the alleged
misconduct?
 Step 3: consider alternative explanations.
 What would the court draw from judicial experience and common sense?
 Responding to the complaint: Answer
 Plaintiff must arrange to have the process served to the defendant under rule 4
 Defendant can respond by both a motion and an answer
 Can dispute the facts in the answer
 Could raise an affirmative defense
 Could assert a counterclaim
 Could dispute the law and say even if it is true would still lose 12(b)(6)
 Rule 12
 (a)
 (1) defendant must respond within 21 days after being served with process
 (4) serving a motion under this rule changes the time in which to serve an
answer
 (A) if the court denies the motion, responsive pleading must be served
within 14 days after notice of the court’s action
 12(b) Motions
 (1) lack of subject matter jurisdiction
 (2) lack of personal jurisdiction
 (3) improper venue
 (4) insufficient process (not common)
 (5) insufficient service of process (problem with how defendant was served)
 (6) failure to state a claim upon which relief can be granted
 (7) failure to join an absentee under Rule 19
 American Nurses’ Association v. Illinois (611) (before Twombly and Iqbal)
 Plaintiffs sue for wage disparity based on sex discrimination. Claim the state pays
workers in predominately male job classifications a higher wage not justified by
any difference in the relative worth of the predominately male and predominately
female jobs in the state’s roster
 Was dismissed because the complaint pleaded a comparable worth case and
that a failure to pay employees in accordance with comparable worth does not
violate federal antidiscrimination law
 To demonstrate a discriminatory purpose, the failure to act would have to
be motivated by a desire to benefit men at the expense of women
 When males and females are in same position, males are still paid
more
36

 Can’t hold state liable for noticing it and not acting on it. Needed
to be intended
 The general discrimination claim is kept, but this is pre Iqbal (Post Iqbal court
may have found that comparable worth was alternative explanation)
 This would not be enough after Twombly and Iqbal
 Rule 8(b) – Denial
 May admit, deny or plead insufficient information
 (1)-state defense to each claim and admit or deny the allegations
 Note: Do not want to deny everything, because you may not want the jury to hear certain
things. Also, if you deny something you know is true judge will rule you admit
everything.
Affirmative defenses
 Rule 8(c) – admits the allegations of the complaint, but challenges plaintiff’s legal
right to bring the action by suggesting a reason why relief is not available
 Ingraham v. United States (620)
 Failure to raise a timely affirmative defense constitutes a waiver
 How to determine whether a defense is affirmative
 Amendments
 Rule 15 – governs amendments in federal practice
 (a) Amendments of Right and Leave to Amend – get them without asking
 Two kinds of amendments
 (1) As a matter of course (15(a)(1)) – when there is a right to amend
 (A) when the defendant has a right to amend – 21 days after serving it
 (B) when the plaintiff has the right to amend – where a responsive
pleading is required. 21 days after service of a responsive pleading or
21 days after service of a motion under rule 12(b), (e) or (f).
 Motion to present defenses, more definite statement or to strike
 (2) Permissive amendments (15(a)(2)) – when there is no right to amend
 When the right to amend expires must get the court’s permission or
written consent from the adverse party
 The court should give leave to amend when justice so requires
 Gives judge discretion and shows preference for permitting
amendment
 Forman v. Davis
 Courts must state reasons for denying a motion for leave to amend
 Relevant factors to consider
 (1) need to balance the harm to the moving party if she is not permitted
to amend against prejudice caused to the other party if leave to amend
is granted
 (2) whether the moving party has delayed unduly in seeking leave to
amend
 (3) bad faith or dilatory purpose of the moving party
 (4) whether the moving party has failed to fix deficiencies in previous
amendments
 And (5) whether amendment would be futile
 Wouldn’t survive motion to dismiss
37

 15(c) – Amendments and the statute of limitations: “Relation back”


 How to amend pleadings once the statute of limitations has run
 (1)(A) – the law that provides the applicable statute of limitations allows
relation back
 (1)(B) - May seek lave to amend her complaint to add a new claim (or the
defendant to raise a new defense) after the statute has run because the
amendment asserts a claim or defense that arose out of the conduct,
transaction or occurrence set out or attempted to be set out in the original
pleading
 (1)(C) - May seek leave to amend to join a new defendant after the statute
has run
 Provides that an amended pleading asserted after the statute of limitations has
run relates back to a pleading that was filed before the statute of limitations
ran
 Amended pleading is treated as though it was filed when an earlier, timely
pleading was filed
 In limited circumstances where the defendant will not be prejudiced
 Rule 15(c)(1)(A) – if the statute providing the period of limitations
also expressly allows relation back of amendments, there will be
relation back
 Rule 15(c)(1)(B) – if the amended pleading arose out of the
conduct, transaction, or occurrence in the original pleading (even if
attempted)
 If it comes from the same real world events as the original
pleading, the defendant was put on notice of the potential
liability before the statute expired. Notice satisfies the statute
of limitations.
 May allow relation back when the claim added:
 Espouses a new theory of liability arising from the same real-
world events alleged in the original complaint
 If the amendment merely fixed defective jurisdictional
allegation, but concerns the same real world events as the
original
 Would not allow relation back because it would not be appropriate:
 If the amendment raises a new matter for which the defendant
was not fairly put on notice by the original complaint
 Rule 15(c)(1)(C) permits relation back to add a new defendant only
if:
 (1) the claim arise from the same conduct, transaction, or
occurrence as stated in the original complaint
 (2) within 120 days after filing of the original complaint, the
new defendant has received such notice of the suit that she will
not be prejudiced in defending (15(c)(1)(C)(i))
 And (3) within the same period, the new defendant knew or
should have known that the action would have been brought
38

against it, but for a mistake concerning the proper party’s


identity (15(c)(1)(C)(ii))
 Beeck v. Aquaslide ‘N’ Dive Corp. (627)
 Question to ask is does it prejudice the other party
 D originally thought that the slide that injured the plaintiff was theirs because
insurance agent said it was and after the statute of limitations ran out, they
realized it wasn’t theirs so they made a motion to amend
 Reasons why the motion to amend would not be allowed:
 Undue delay (when strategically)
 Bad faith (strategically)
 Undue prejudice to the non-moving party (in this case the plaintiff)
 Court allows the motion because do not want to hold D liable for something they
did not do. Also, the possible prejudice to the plaintiff is insufficient to deny the
motion to amend
 The amount of prejudice depends on the reasons behind the motion for the
moving party
 No bad faith – just discovered it was not their slide. Not strategic
 No undue delay – just discovered it
 Undue prejudice – insufficient
 Moore v. Moore (Rule 15(b))
 Mother (D) makes post trial motion. Father (P) argues it was an abuse of
discretion for lack of notice
 Did the parties impliedly consent to the matter? Was it litigated in the record?
 Custody: Yes. Failure to object to evidence which was related to the post trial
motion.
 Had notice that was not just whether he was entitled to custody but who
was entitled to custody
 Child Support: Yes. Best interests of the child concern and the financial needs
of the child. It was not contested putting P on notice.
 Separate Maintenance: No. Abuse of discretion. Not litigated.
 Krupski v. Costa Crociere S.P.A.
 Plaintiff wants to amend the complaint to include the correct defendant, SOL has
run out
 Rule 15(c) – could only switch if it related back
 (1)(A) – law does not allow it
 (1)(B) – logically related?
 (1)(C) – adding new parties
 (i) – received notice of the action?
 (ii) – knew or should have known action would have been brought against
them but for the mistake concerning the proper party’s identity?
 D knew the actions would have been against them, but for a mistake. Even if P
made a conscious decision not to include D, that still does not make it any less of
a mistake on P’s part.
 Knew Crociere existed but sued Cruise cause thought that they were liable
 Was the mistake reasonable?
39

 Could have been negligent but we allow it. Doesn’t matter if it wasn’t
reasonable
 Is the defendant prejudiced? No. Just sued wrong person.
 Provisions to deter frivolous pleadings
 Rule 11
 Applies to every pleading, written motion and other paper. Court must strike any
document not signed
 (a) signature requirement
 (b) Certification to the court
 Certifies to the best of the person’s knowledge, information, and belief,
formed after an inquiry reasonable under the circumstances
 If it happens right before the statute of limitations not expected to do as
thorough of an investigation
 (1) certifies it is not presented for an improper purpose
 (2) certifies that the legal contentions are warranted by law or by a
nonfrivolous argument extending, modifying, or reversing existing law or for
establishing new law
 Meant to protect creative lawyering just need to make sure it is not
frivolous
 (3) certifies that the factual contentions have evidentiary support, or, if
specifically so identified, will likely have evidentiary support after a
reasonable opportunity for further investigation or discovery
 (4) for denials of factual allegations are reasonably based on belief or a lack of
information
 (c) Sanctions – purpose not to punish but to deter behavior in the future
 (2) sanctions against another party or their own attorney
 (3) show cause requires a party to explain why specified behavior did not
violate Rule 11(b)
 (4) nonmonetary sanctions can be appropriate
 (5) a party represented by counsel cannot be held liable for monetary
sanctions for violating Rule 11(b)(2)
 Cannot be presumed to know the law sufficiently to satisfy that
certification item
 Summary Judgment
 Only reason to have a trial is to resolve genuine disputes of material fact. So if there is no
dispute over material fact, may enter judgment as a matter of law without a trial.
Governed by Rule 56.
 Can go beyond pleadings and consider evidence because it comes after discovery
 When there is a genuine dispute of fact, summary judgment must be denied and the
matter must go to trial. They cannot pick which set of facts they find most likely
 Courts have the discretion to conclude that it would be more appropriate to go to trila
even if the standard for summary judgment is met
 One source of doubt may be the credibility of a person giving evidence
 Courts do not have discretion if the admissible evidence shows a genuine dispute of
material fact
40

 Credibility of the affiants is a genuine question of fact


 Rule 56 –Summary Judgment
 (a) there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law
 Can be made on a claim or a defense or on part of each claim or defense. Doesn’t
have to be the whole thing
 Rule 56(g) allows the court to treat any fact as established
 (b) timing of the motion
 Motion may be made at any time until 30 days after close of all discovery
 (c) Procedures
 (1) permits a party to rely upon particular parts of the record because they cannot
be or are genuinely disputed
 (4) requires that affidavits and declarations be (1) made on personal knowledge,
(2) set out fact that would be admissible in evidence and (3) show that the affiant
or declarant is competent to testify on the matter stated
 Genuine Dispute as to a material fact
 Materiality is determined by substantive law creating a claim or defense. A
material fact is one that might affect the outcome of the case under the governing
law
 Cross v. United States (951)
 Whether the taxpayer, a professor of romance languages was entitled to
various deductions for summer travel
 Expenditures made by a taxpayer for his education are deductible if they are
for education undertaken primarily for the purpose of maintaining or
improving skills required by the taxpayer in his employment or trade or
business
 Claims the purpose of his trip was to maintain contacts with foreign languages
as a teacher. Government disputes this fact and says all or at least part was
vacation and thus personal living expense.
 This was the material issue of fact
 What’s left for the jury to decide?
 The truth of P’s contention!
 Judge CANNOT WEIGH THE EVIDENCE, so
 ****The reason SJ is inappropriate here is b/c we need to decide if P is
telling the truth…what his motive/intent isall of these require a
jury!****
 So SJ particularly inappropriate when inferences to be drawn have questions
of motive, intent and subjective feelings or states of mind
 Anderson v. Liberty Lobby
 Sent message to loosen up and grant summary judgment more readily
 Anderson sued for defamation over articles that characterized them as racist,
anti-Semetic and neo-Nazi.
 D moves for summary judgment saying P must establish malice by clear and
convincing evidence
41

 Said that the nonmoving party must produce more than a scintilla, she must
produce sufficient evidence from which a reasonable jury could find in favor
of the nonmoving party.
 The clear and convincing requirement is relevant in determining whether
the plaintiff could avoid summary judgment
 Celotex Corp v. Catrett (helpful to defendants)
 Wrongful death claim against several manufacturers of asbestos
 Did D expose P to asbestos?
 D’s argumentNo admissible evidence to support the claim
 P’s argumentHere’s some: 3 documents/affidavits
 D responds: those are not admissible, moved for Summary Judgment
 PROVE IT: One defendant moved for summary judgment not by producing
evidence but by pointing out that the plaintiff lacked evidence showing that
the decedent had been exposed to asbestos that it had manufactured
 Adickes v. SH Kress (954)
 Reversed by Celotex. Originally required a party making a motion for
summary judgment to support its motion with evidence
 A party who does not have the burden of proof at trial may move for summary
judgment without producing evidence. Such party may point out that the
record is devoid of evidence supporting the other party’s position
 Motion – opposing party lacks sufficient evidence
 Pro (Rehnquist): P should bear the burden of proving no evidence by for
example, taking a deposition because they do not need to prove at trial;
 Con (Brennan): D should bear the burden because D is moving party
 Reflected in Rule 56(c)(1) that summary judgment is permitted because a fact
cannot be supported
 Helpful to defendants. Allows them to move for summary judgment on the
basis of an absence of record evidence supporting an element of the
plaintiff’s claim
 Matsushita Electric Industrial Co. v. Zenith Radio Corp.
 Nail in coffin for Adickes’
 US TV manufacturers sued several Japanese manufacturers and alleged that
the Japanese companies had conspired to keep prices of their products sold in
the US artificially low which could violate antitrust laws
 Supreme court upheld the defendant’s motion for summary judgment
 Plaintiffs were required to come forward with more convincing evidence to
defeat the summary judgment because their evidence was implausible because
the companies would have had to endure many years of losses to make the US
companies go out of business.
 The party opposing the motion for summary judgment is to receive the
benefit of all reasonable doubts as to whether there is a genuine dispute of
fact, but the doubts must be reasonable and courts should not slip into
sheer speculation when assessing the nonmoving party’s position
 Take aways:
 Summary judgment can be appropriate in large complex litigation
42

 and a court may properly assess plausibility of a theory in determining


how much evidence a nonmoving party must produce to defeat a motion
for summary judgment
 Scott v. Harris
 Officers were chasing a speeding motorist and tried to get the vehicle to spin
and instead caused the car to run off the road and the plaintiff was severely
injured
 If the motorist had been driving in a way that endangered human life, the
officers action would have been warranted.
 Court with the help of a video granted summary judgment. When opposing
parties tell two different stories and one of which is blatantly contradicted by
the record, so that no reasonable jury could believe it, the court should not
adopt that version of the facts for purposes of ruling on a motion for summary
judgment
 Said that no reasonable juror could look at the video tape and rule that the
actions of force were unreasonable
 NOTES: Even though not supposed to weigh evidence, court says video
blatantly contradicts non movant. Video is good evidence.
Summary Judgment Summary
1) When the moving party does not bear the burden at trial (D)
 D has two options for satisfying the initial burden of production:
o 1) Traditional – evidence from record no reasonable jury could find x or a
reasonable jury would find y. D can come up with affirmative evidence to negate
an element of Ps claim. P needs to establish every element of the claim where
every reasonable juror would find it
o 2) D can claim that the P has no evidence; the P then has to come forward with
evidence. Saying no evidence in record where jury could rule x. Only the person
who doesn’t have the burden of proof at trial can bring this
 if the D satisfies one or the other, the burden shifts to the P
 D does not have to do anything at trial unless the P has presented some viable evidence;
this is why the D does not have to do anything before claiming SJ
2) When the moving party does bear the burden at trial (P)
 the P must show affirmative evidence; if nothing is contradicted by the D, the P will win
 P does not have the option of saying that the D does not have enough evidence because it
doesn't matter until the P has shown the evidence

Dismissal of Actions (Rule 41)


 Voluntary Dismissal. A plaintiff has the option of dismissing his action voluntarily,
without prejudice to himself, at any time early in the pretrial procedure.
o However, because there is a chance of harassment and misuse of the tactic of
voluntary dismissal, many jurisdictions provide that a party may voluntarily
dismiss his action without prejudice only once
 subsequent voluntary dismissals act as adjudications in favor of defendant.
[With prejudice = you can’t bring action somewhere else]
o The issue is the risk of prejudicing the D. You always get one of these under Rule
41(a)(2) so you can dismiss and re-file.
43

 Dismissal for Failure to Prosecute. Plaintiff must proceed with “due diligence,”
meaning within a “reasonable time.” If plaintiff does nothing to move case forward, case
is dismissed. These are always with prejudice, on the merits (adjudication for defendant).

Default Judgment (Rule 55)


 When a defendant in an action at law omits to plead to the complaint within the time
permitted by statute, and otherwise fails to contest the adjudication of the suit, and fails to
appear at trial, she defaults, and a judgment by default may be entered against her without
the formality of the trial upon the merits.

 Trial
 Have to dispute a material fact
 7th Amendment
 In suits at common law where the value in controversy shall exceed twenty dollars,
the right of a trial by jury shall be preserved
 Suits at common law
 Distinguished from cases at equity
 Right is preserved
 Amendment does not create or grant a right to a jury trial
 Rule 38
 (a)(1) echoes the importance of this constitutional guarantee by providing that the
right to jury trial under the Seventh amendment is preserved to the parties
inviolate
 (b)(1) Demand (14 Days after last pleading is served) in writing
 (d) If you don’t request it, you WAIVE it. If you do request it, you can’t rescind it
unless the other party consents
 D counted on your jury request so they didn’t make one
 First step: Historical Test: Whether the case asserted would have been heard by a jury at
English Common law in 1791.
 Must assess whether the matter would have been tried in the law (as opposed to
equity courts in 1791 in England. Must also take account of modern procedural
reforms including the FRCP.
 If not, must assess whether the case is analogous to a right that would have been
litigated at law in 1791 in England
 Second, Assess the availability of a jury on an issue-by-issue basis
 Curtis v. Loether (legal or equity?) what kind of relief when wasn’t tried in 1791
 Ask what the relief that was sought is – damages (actual and punitive) which is
offered in courts of equity
 If an issue of fact underlies a claim for legal relief, it must be tried to a jury,
without regard to whether the overall thrust of the case is equitable
 If an issue of fact underlies both a claim for legal relief and equitable relief, it
must be tried to a jury.
 Only if an issue of fact underlies a purely equitable matter is it tried to a judge
without a jury.
44

 Unless there are imperative circumstances, circumstances which in view of the


flexible procedures of the Federal Rules we cannot now anticipate to the contrary
the jury issues shall be tried before the equity issues. This order of trial ensures
that the judge will be bound by the jury’s determination of the facts, rather than
vice versa.
 Beacon Theaters v. Westover (Fox v. Beacon)
 Fox was concerned over Beacon planning to sue. Fox wants to control the distribution
of the movies and Beacon believes it violates antitrust laws.
 Fox is looking for declaratory judgment and to prevent Beacon from filing suit.
Beacon counterclaims with antitrust conspiracy and wants treble damages under
Sherman Act.
 Has right to trial by jury because claim in law but issue also had equity claim.
Seeking an injunction to prevent irreparable harm.
 Dairy Queen, Inc. v. Wood
 Sought an injuction to stop defendant from using its trade name and also sought an
accounting for past improper use of the name (damages). Tried to use accounting an
old equity word to escape a jury trial.
 Drove home what it said in Beacon Theathers
 Does not matter whether a claim to legal relief is seen as incidental
 The right to a jury trial cannot be deprived by the fact that it is asserted in a
case that also contains a claim for equitable. Whether the equitable claim is
more important is irrelevant
 Jury issue are to be tried first
 Accounting was usually equitable because it was too complicated for a jury.
Rule 53(b) permits a district court to appoint a special master to aid the jury in
calculating damages.
 Held a jury trial because accounting was determined to be legal
 Ross v. Bernhard
 Shareholders’ derivative suit which permits a stockholder of a corporation to sue on
behalf of the corporation against officers and directos whose mismanagement harmed
the company
 Originally developed in equity but held a jury trial by looking at the underlying
claim sought remedy of damages
 Tull v. United States – sought civil penalties under the Clean Water Act, alleging that the
defendant had violated the Act by dumping material on wetlands. Focused more on
remedy and because the penalties were intended to deter and punish which traditionally
was available at law.
 Curtis v. Laether – the damages are mixed and the statute provides for the right to jury.
Plaintiff brought a private action under the Fair Housing Act for injunction and
compensatory damages. This cause didn't exist in historical times.
 What we do in newly created rights
 Easy if congress provides right to jury
 Look at the statute and find what remedies it provides
 If the nature of the relief looks like legal remedies then no justification for
denying jury trial.
 Less discretion = more right to jury trial
45

 Court held that jury trial is required because of mandatory nature of the damages.

Rules
 1) Look at what it was like in the 18th century (1791) [Tull]
 Must assess whether the matter would have been tried in the law (as opposed to
equity courts in 1791 in England. Must also take account of modern procedural
reforms including the FRCP.
 If not, must assess whether the case is analogous to a right that would have been
litigated at law in 1791 in England
 2) Is there a statute? [Curtis] What is the remedy/relief sought? (go to 3)
 If it’s a new claim- Yes jury trial if the statute is creates legal rights and
remedies; where damages are placed in statute, is there discretion to award
damages (discretion is associated with equity); where is the right enforces (admin
agencys, no jury right) [Curtis]
 3) Court’s assess the availability of a jury on an issue-by-issue basis. The mere presence
of equitable issues cannot rob a party of the right to a jury trial on legal issues. [Beacon]
 It does not matter whether a claim to legal relief is “incidental”, the right to a jury
trial cannot be deprived [Dairy Queen]
 Unless there are “imperative circumstances which the current court cannot
anticipate”, the jury issues shall be tried before the equity issues. [Dairy Queen]
 The characterization by the party's is disregarded [no artful pleading] [Dairy Queen]
 Legal relief- must be tried to a jury, without regard is the overall case is of equity
 If mixed- right to jury trial so if there have overlapping factual issue the issues will
be determined by a jury; but see exception when equitable claims would be tried first
[Fox] but can't imagine a circumstance when it would apply.
 All equity claims- No jury trial
 Except in Ross situation where the claim requires the establishment of a legal
claim.
 Jury confusion may be a reason to find that a legal remedy is inadequate. [Dairy Queen]
 You can appoint a special master to assist the jury under Rule 53(b).
 Even this limited inroad should only be made in exceptional circumstances.
46

 Trial Motions
 Rule 50(a) - Judgment as a Matter of Law (or Directed Verdict) (JMOL)
 Similar to summary judgment but they are made at or even after trial
 Judge would be concluding that the jury should not go to the jury because there is
insufficient evidence to justify having the jury consider it
 Concludes there is no dispute on a material issue of fact, reasonable people
could only conclude one way so there is no need for a jury deliberate and the
court can enter judgment as a matter of law (Rule 50(a)(1)), called a directed
verdict.
 Any party can move for it after the other party has been fully heard on an issue in a
jury trial
 Defendant can move twice, once when P finishes and once when they finish
 One produces sufficient evidence to overcome a motion for JMOL if she
shows enough that a reasonable jury could find for her
 Rule 50(b) - Judgment Nonwithstanding the Verdict also known as renewed judgement as
a matter of law (RJMOL)
 Judge let the case go to the jury, the jury goes for deliberation and the jury reached
the conclusion that reasonable people simply could not have reached. Court can take
away the victory and enter judgment for the other party
 Motion RJMOL must be brought no more than 28 days after entry of the judgment
 Would be determining that there was no legally sufficient evidentiary basis to find
for the party who won the jury’s verdict
 Part of the Seventh Amendment provides that federal courts may not reexamine facts
determined by juries “otherwise…than according to the rules of common law”
 Common law recognized RJMOL but permitted it only if the party seeking it had
moved for JMOL at the close of all the evidence
 Changes now to where it is required that a party move for JMOL
appropriately at trial after plaintiff presents evidence
 Jury trial verdict could be set aside only when there is a complete absence of
probative facts to support the conclusion reached
 ******For JMOL or RJMOL do not concern the credibility of witnesses and weight of
the evidence. That is for the jury
 Galloway v. United States (1055)
 Court says JMOL is OK because in 1791 they had demurrer and motion for new trial
in 1791
 It is not that “the rules of the common law” in 1791 deprived trial courts of power
to withdraw cases from the jury.
 The jury was not absolute master of fact in 1791.
 The amendment was designed to preserve the basic institution of jury trial in only its
most fundamental elements, not the great mass of procedural forms and details
 Neely v. Martin K. Eby Construction Co.
 Whether the court of appeals after reversing the denial of a defendant’s Rule 50
motion may itself order dismissal or direct entry of judgment for defendant
 Court is allowed to make final disposition of the issues presented, except those which
in its informed discretion should be reserved for the trial court
47

 Rule 50(e) makes express and adequate provision for the opportunity for plaintiff to
present grounds for a new trial in the event plaintiff’s verdict is set aside by the COA
 If he does so in his brief – or in a petition for rehearing if the COA has directed
entry of judgment for appellant – the COA may make final disposition of the
issues presented.
 If appellee presents no new trial issues in his brief or in a petition for rehearing,
the COA may, in any event, order a new trial on its own motion or refer the
question to the DC, based on factors encountered in its own review of the case
 It was, of course, incumbent on the COA to consider the new trial question in the
light of its own experience with the case
 But we will not assume that the court ignored its duty in this respect, although it would have been
better had its opinion expressly dealt with the new trial question.
 Denman v. Spain (1061)(No reasonable jury)
 Denman was injured in a head on collision by defendant and defendant passengers
died. Two witnesses saw defendant speeding but not crossing lanes, which was
needed to prove the accident was his fault. Jury ruled for Plaintiff. Defendant
motioned for JMOL and won (everything was circumstantial/possibilities).
 Defendant motioned for RJMOL and it was sustained and entered. The plaintiff
appeals. Don’t know anything about how the accident occurred just details
beforehand.
 Burden was on the plaintiff to prove by a preponderance that the operator was guilty
of negligence but also that such negligence caused or contributed to the collision and
consequent damages
 The conclusions that could have been made could have only been made on
possibilities and verdicts cannot be based on possibilities
 There is no sound or reasonable basis upon which the jury or this court can
say that the plaintiff met the burden. Was merely speculative. Issue with
causation.
 Kircher v. Atchison (1064)(Reasonable jury could find)
 plaintiff said he went under train and hand was severed.
 Believe it was not too unreasonable for jury to accept even if lacked certainty RJMOL
 In light of all the circumstances, it cannot be held as a matter of law, that
plaintiff’s version was such as to contravene the laws of nature, or as to render
the jury’s acceptance of it unreasonable
 Jury was not compelled to find against him because he could not with certainty
relate the exact manner in which his left hand came to be on the east rail
 It could reasonably have been inferred that his failure to explain this
circumstance was due to the fact that in the critical few minutes he was under
the train he was unconscious, or substantially so, from the blow on his head
as the outcome of stepping into the hole.
 Reeves v. Sanderson Plumbing Products, Inc. (1065)(did not consider evidence in favor
of nonmovant)
 Kind and amount of evidence necessary to sustain a jury’s verdict that an employer
unlawfully discriminated on the basis of age
 Is defendant entitled to judgment as a matter of law when the plaintiff’s case
consists exclusively of a prima facie case of discrimination and sufficient
48

evidence for the trier of fact to disbelieve the defendant’s legitimate,


nondiscriminatory explanation for its action
 Burden starts with the plaintiff to prove a prima facie case, defendant then
needs to show a nondiscriminatory reason for firing then shifts back to the
plaintiff to prove that it was intentional discrimination
 Factors whether JNOV is appropriate
 Strength of the P prima facie case
 Member of protected class
 Qualified for position
 Adverse employment action
 Probative value of the proof that the employer’s explanation is false
 And any other evidence that supports the employer’s case and that properly may
be considered on a motion for judgment as a matter of law
 Court must review the record taken as a whole – Matsushita
 Standard for granting summary judgment as a matter of law such that the inquiry
under each is the same – Anderson v. Liberty Lobby
 May not make credibility determinations or weigh the evidence
 Give credence to the evidence favoring the nonmovant as well as that evidence
supporting the moving party that is uncontradicted and unimpeached at least to
the extent that the evidence comes from disinterested witnesses
 Respondent was not entitled to judgment as a matter of law because the court
disregarded critical evidence favorable to petitioner and draw the reasonable
inferences in favor of the petitioner.
 Baltimore & Carolina Line Inc. v. Redman (1070)
 (1) The Supreme Court in Slocum v. NY Life Insurance Co., held that once the trial
court had denied a defendant’s directed verdict motion and allowed the case to go to
the jury, the court could not order a judgment contrary to the jury verdict, but could
only order a new trial
 Initially, Rule 50(b) appeared to authorize a court to grant a motion for judgment
as a matter of law after a jury verdict only if a motion for a directed verdict had
been made “at the close of all of the evidence.”
 In 2006 Rule 50(b) was amended to permit renewal of any Rule 50(a) motion
without any requirement that the motion have been made at the close of evidence
 Issues were tried before a court and a jury. Defendant moved for a dismissal of the
complaint because the evidence was insufficient to support a verdict for the plaintiff
and wanted a directed verdict
 Got a verdict for the plaintiff. D appealed and CoA held the evidence was
insufficient and reversed the judgment and ordered a new trial because of Slocum
 Whatever may have been its origin or theoretical basis, it undoubtedly was well
established when the 7th Amendment was adopted, and therefore must be regarded as
a part of the common-law rules to which resort must be had in testing and measuring
the right of trial by jury as preserved and protected by that amendment
49

 Motion for a new trial (Rule 59 and 60)


 Made at the same time as RJMOL. Effect is to try and (1) take judgment away from the
party whom the jury declared the winner and (2) to start over with a new trial.
 Must state grounds for a new trial but the courts are allowed to grant a new trial under
any grounds even one not stated in the motion. Court can also grant it without a motion
from a party
 Ginsberg v. Williams (1096)
 plaintiff sued for damages from a car accident. Jury ruled for defendant and plaintiff
moved for new trial.
 Gave reasons for in the interests of justice and that was not in the Minnesota list that
was very specific and the reason was too general
 Would invite an arbitrary exercise of power over which the appellate review is not
now available
 Trial court cannot grant new trial when the great weight of the evidence is against it
 Give deference to the trial court
 Coppo v. Van Wieringen (1096)
 One of the reasons assigned by the trial judge in the instant cases for granting new
trials is that “substantial justice has not been done.”
 The statutes make no mention of such a ground for a new trial;
 But we have always upheld the right of the trial judge to grant a new trial when
he is convinced that substantial justice has not been done
 The reason we have barred any review of an order granting a new trial based on this
conclusion was expressed by the Supreme Court of Wisconsin in the case of
McLimans v. City of Lancaster:
 “The judge before whom the cause was tried heard the testimony, observed the
appearances and bearing of the witnesses and their manner of testifying, and was
much better qualified to pass upon the credibility and weight of their testimony
than this court can be.”
 “There are many comparatively trifling appearances and incidents, lights and
shadows, which are not preserved in the record, which may well have affected the
mind of the judge as well as the jury in forming opinions of the weight of the
evidence, the character and credibility of the witnesses, and of the very right and
justice of the case.”
 They trust the lower court judge and give deference but they may ask for more
information than they ask for here
 Magnani v. Trogi (1097)
 Plaintiff was awarded damages but it did not specify which damages were for which
course of action
 Determined that the verdict must be set aside and a new trial ordered as to both
the liability and damage aspects of the case. Did not abuse discretion.
 Purpose is to permit the trial judge to correct errors that he or the jury might
have made during the course of the trial before losing jurisdiction of the case
 Judges are able to consider the conduct of the trial as a whole and
therefore consider the effects of errors which occurred, the fairness of the
trial to all parties, and whether substantial justice was accomplished
50

 Robb v. John C. Hickey, Inc. (1099)


 Verdict was ambiguous
 Found that the plaintiff was not as negligent as defendant but found negligence on
both parties but instructed that if contributory negligence present, plaintiff gets
nothing
 Plaintiff says inconsistency and wants a new trial
 Jury may disagree with the law of contributory negligence, but cannot
nullify the law . New trial granted.
 Kramer v. Kister (1101)
 Juror may have been coerced into verdict
 Determined it to be a mistrial and discharged the jury
 Duk v. MGM Grand Hotel Inc. (1102)(abused discretion)
 Jury said plaintiff 65% negligent but still awarded money sent it back to the jury
saying inconsistency
 Jury returned saying MGM was 51% negligent and same damages
 Ordered a new trial
 At second trial found for defendant, now plaintiff appeals saying shouldn’t have
granted a new trial and should have stuck with second verdict and therefore abused
discretion
 Found that the first court was within discretion in resubmitting the first verdict but
erred in ordering a new trial upon receipt of the second verdict. Give instructions
to enter judgment for Duk with the first jury’s second verdict
 Resubmitting comports with the fair and efficient administration of justice
 A court may not disregard a jury’s verdict and order a new trial until it
attempts to reconcile the jury’s findings by exegesis if necessary
 Rule 59
 (a) In general
 (1) Grounds for a new trial – may grant a new trial on all or some of the issues
and to any party as follows
 (A) after a jury trial for which a new trial has been granted in an action at law
in federal court
 Or (B) after a non jury trial for which a rehearing has been granted in a suit in
equity
 (2) Further action after a nonjury trial – court may open the judgment if one has
been entered, take additional testimony, amend findings of fact and conclusions of
law or make new ones and direct the entry of a new judgment
 (d) New trial on the court’s initiative or for reasons not in the motion
 Court on its own may order a new trial for any reason that would justify granting
one on a party’s motion. Court may also grant a new trial for any reason not stated
in the motion
 Rule 59(a)(1)(A) provides that a new trial can be ordered in a jury case for any reason
for which a new trial has heretofore been granted in an action at law in federal court
 Based on some error that may have tainted the result in trial
 The court can also consider the credibility of the witnesses and the weight of the
evidence
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 The court is not required to view the evidence in the light most favorable to the
party who won at trial
 Judge could have made a mistake, like putting the burden of persuasion on the wrong
party, giving an erroneous instruction, or wrongly allowing the instruction of
improper evidence leading one to believe that justice would be served by having the
parties retry the case before a new jury
 Will not justify an order for a new trial unless it was prejudicial
 If the error or misconduct was harmless and did not affect the outcome of the
case, the new trial is inappropriate
 Against the great weight of the evidence
 Invites the judge to “substitute their fact finding for that of the jury”
 If having given full respect to the jury’s findings the judge on the entire
evidence is left with the definite and firm conviction that a mistake has been
committed, it is to be expected that he or she will grant a new trial
 Aenta Casualty & Surety Co. v. Yeatts (1112)
 Question whether Yeatts was engaged in criminal conduct and the verdict and
judgment were in his favor and the plaintiff brings an appeal
 Plaintiff never made a motion for a directed verdict and even if they did, it
would have been denied and any JNOV would have been as well
 Garrison v. United States (1113)
 Where there is substantial evidence in support of the plaintiff’s case the
judge may not direct a verdict against him, even though he may not
believe his evidence or may think that the weight of the evidence is on the
other side; for, under the constitutional guaranty of trial by jury, it is for
the jury to weigh the evidence and pass upon its credibility.
 He may however set aside a verdict supported by substantial evidence
where in his opinion it is contrary to the clear weight of the evidence, or is
based upon evidence which is false; for, even though the evidence be
sufficient to preclude the direction of a verdict, it is still his duty to
exercise his power over the proceedings before him to prevent a
miscarriage of justice
 Granting or refusing or a new trial is a matter resting in the sound
discretion of the trial judge, and that his action thereon is not reviewable
upon appeal, except in exceptional circumstances
 Do not believe the denial of the motion amounted to an abuse of discretion or
that there are any of the special circumstances which would subject his action
to review by this court.
 In Re Green’s Estate (1114)
 Contended court erred in granting a motion for a new trial on the ground that
the evidence as a whole was insufficient as a matter of law to support a verdict
for respondents
 When the motion is granted as here for insufficiency of the evidence, it is only
in rare cases showing abuse of discretion that an appellate court will interfere
because the trial judge must weigh all the evidence and determine the just
conclusion to be drawn therefrom
52

 It cannot be held that a trial court abused its discretion where there is a
conflict in the evidence or where there is any evidence which would support a
judgment in favor of the moving party
 If A v. B and A wins. B moves for new trial. Cannot be an abuse of
discretion if there is a conflict in evidence or where there is any evidence
which would show the jury could have found for B on the evidence.
 There is substantial evidence in the case supporting the trial court’s action and
we should not interfere with its order granting said motion.
 Marsh v. Illinois Cent. R. Co. (1115)
 District judge granted judgment nonwithstanding the verdict, but denied an
alternative motion for new trial
 Believed the evidence was insufficient to go to the jury
 Court of appeals reversed
 Believed the weight of the evidence is overwhelmingly against the
plaintiff but we do not agree that the grant of a judgment nonwithstanding
the verdict was therefore justified
 Could not grant a JNOV but was allowed to grant a new trial although
there were no errors of law
 Dyer v. MacDougall (1115)
 When passing on a motion for a directed verdict must disregard his own views
of witnesses’ credibility and therefore of their demeanor that he believes or
disbelieves some of the testimony is irrelevant
 Judge must not deprive plaintiff of any advantage they may derive from
having the jury pass upon the oral testimony
 He can base his actions on his belief or disbelief of witnesses on a motion
for a new trial but not JNOV
 Another troublesome basis for an order of a new trial is that the damages awarded in
the verdict were excessive or inadequate
 Question to ask: whether the damages reflect appropriately: Federal courts may
apply a “Shock the Conscience” test
 Allowed to order a new trial when the jury’s verdict deviates materially from
verdicts returned in similar cases.
 Permits a judge to intervene more permissively than the ordinary federal
shocks the conscience standard
 May grant a partial trial as to damages only
 Or might consider a conditional order of new trial (Remittitur and additur)
 Would grant a new trial on damages only if the party rejects the condition the
court puts on the order
 Remittitur
 Court may try to pressure the plaintiff to remit what the court believes is
excessive damages
 It is permitted in most state courts.
 It is permitted in federal court only if the court allows the plaintiff the
option of accepting either:
 (1) the figure set by the court
 Or (2) the order of new trial
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 The Seventh Amendment prohibits a federal court from entering an


order for the lesser amount. All they can do is give the plaintiff an
option
 Additur
 Tries to get the defendant to increase damages. Not permitted in federal
court.
 Rule 61 – Harmless error
 Any parties substantial right or unless justice requires otherwise
 Don’t grant if errors are harmless
 Rule 60 – Motion to set aside a judgment or order
 (a) allows a court to correct a clerical mistake or a mistake arising from oversight or
omission that is found in a judgment order or other part of the record (blunders in
execution)
 Clerical mistake is one that misrepresents what the court actually intended to
order
 Meant to ensure that the court’s original intent is implemented, it is aimed at
errors resulting from inadvertence not from mistaken judgment
 (b) permits the trial court to correct substantive errors that cannot be addressed under
Rule 60(a) where the court changes its mind either because of a legal or factual
mistake in making its original determination, or because second thought it has
decided to exercise its discretion in a manner different from the way it was exercised
in the original determination
 Lists 6 bases on which the court may grant relief from a final judgment order or
proceeding
 (1) mistake, inadvertence, surprise or excusable neglect
 Defendant who defaults, made a mistake and wants to be forgiven
 Briones v. Riviera Hotel & Casino (1125)
 P sued for unlawful discharge. D filed a motion to dismiss rule
12(b)(6) and P failed to respond.
 Court granted the motion
 P did not speak English and appeared pro se. Moved for Rule 60(b)(1)
motion
 Denied because established that a motion under Rule 60(b) could
not be utilized for failure to comply with court rules.
 Excusable neglect is understood to encompass situations in which the
failure to comply with a filing deadline is attributable to negligence
 Four factors in deciding if neglect was excusable
 (1) Danger of prejudice to the opposing party
 (2) the length of the delay and its potential impact on the
judicial proceedings
 (3) reason for the delay
 And (4) whether the moving party acted in good faith
 (2) newly discovered evidence
 Evidence which with reasonable diligence could not have been discovered
in time to move for a new trial under Rule 59(b) which needs to be within
54

28 days of entry of the judgment and this evidence is likely to change the
outcome of the case
 Patrick v. Sedwick (1127)
 P action for medical malpractice alleging permanent injuries
 P won on liability
 D moved for a new trial because doctors devised a new treatment that
would ameliorate P’s injuries and therefore should reduce his damages
 Trial court denied the motion
 No assurance that the improvement would be permanent
 Motion for new trial on the grounds of newly discovered evidence
must meet the following:
 (1) must be such as would probably change the result on a new
trial
 (2) must have been discovered since the trial
 (3) must be of such a nature that it could not have been discovered
before trial by due diligence
 (4) must be material
 (5) must not be merely cumulative or impraching
 Must relate to the facts which were in existence at the time of the
trial
 American Civil Liberties Union v. Department of Defense (1128)
 P sought documents under Freedom of Information Act pertaining to
the treatment of detainees and to interrogation methods used against
top Al Qaeda members
 P moved under 60(b)(2) and 60(b)(6) based on the new evidence in
media showing evidence agents participated in interrogation of
detainees
 Needed to show for 60(b)(2):
 (1) Newly discovered evidence is of facts existing at the time of
the prior discussion
 (2) the moving party is excusably ignorant of the facts despite
using due diligence to learn about them
 (3) the newly discovered evidence is admissible and probably
effective to change the result of the former ruling
 And (4) the newly discovered evidence is not merely cumulative of
evidence already offered
 Needed to show for 60(b)(6):
 (1) Asserted grounds for relief are other than those recognized in
clauses 1 through 5
 And (2) extraordinary circumstances justify relief
 Court found media reports would not have changed the earlier ruling
and were merely cumulative of evidence already submitted
 Believe it fell under newly discovered evidence so 60(b)(6) not
available
55

 (3) fraud, misrepresentation or other misconduct or other misconduct of an


adverse party
 Failure to respond which hinders the moving party’s ability to prepare for
trial
 Hazel-Atlas Glass Co. Hartford-Empire Co.(1129)
 Plaintiff brought an action in CoA to set aside a judgment rendered 9
years earlier
 CoA refused to set aside the judgment
 Supreme court reversed
 Find a deliberately planned and carefully executed scheme to defraud
not only the Patent Office but the circuit court of appeals
 Cannot understand how Hazel should have been expected to do
more than it did to uncover the fraud
 The public welfare demands that the agencies of public justice be not
so important that they must always be mute and helpless victims of
deception and fraud.
 In Peacock Records, Inc. v. Checker Records, Inc., (1130) the COA
reversed as an abuse of discretion a denial of a Rule 60(b) motion:
 We hold that where it appears that perjure testimony may have played
some part in influencing the court to render a judgment, the perjury
will not be weighed, on a motion to set aside the judgment
 (4) the judgment is void
 Court has no discretion unlike the others. A void judgment is a nullity
meaning they lacked personal or subject matter jurisdiction
 Title v. United States (1128)
 (5) the judgment has been satisfied, or a prior judgment upon which it is
based has been reversed or vacated
 One judgment so closely related that it has a preclusive effect on it
 And (6) any other reason that justifies relief
 See above in American Civil Liberties Union
 Two things must be established
 Case must not satisfy any of the other bases for relief under Rule 60(b)
 Must establish extraordinary circumstances for relief
 60(d) – Marcelli Walker (1130-31)
 (1) Rule 60(d) is a “savings clause”
 As the 6th Circuit has explained:
 Independent actions for relief under this section “must, if Rule 60(b) is to
be interpreted as a coherent whole, be reserved for those cases of
‘injustice which, in certain instances, are deemed sufficiently gross to
demand a departure’ from a rigid adherence to the doctrine of res
judicata.”
 We have set forth the elements of such an independent cause of action as:
 1. A judgment which ought not, in equity and good conscience, to be
enforced;
 2. A good defense to the alleged cause of action on which the judgment
is founded;
56

 3. Fraud, Accident, or mistake which prevented the defendant in the


judgment from obtaining the benefit of his defense
 4. The absence of fault or negligence on the part of the defendant; and
 5. The absence of any adequate remedy at law.

 Finality/Res Judicata
 Case 1 has ended and a judgment has been entered. Question we ask is whether that
judgment from case 1 precludes anyone from litigating anything in Case 2, which is
pending. Mat do so through claim preclusion or issue preclusion
 Both are affirmative defenses under Rule 8(c)(1)
 Once the defense is raised, they bear the burden of proof
 Important policies
 Finality – litigation must be finished at some point
 Repose – to know that she cannot be sued repeatedly on the same claim
 Consistency – if relitigated, there is a chance it would be resolved differently in
different cases
 Efficiency – litigation is publically funded and want to make sure resources are not
wasted
 Claim Preclusion/Res Judicata (the thing has been decided)
 Gets only one opportunity to assert a claim
 Three requirements for claim preclusion
 (1) Case 1 and Case 2 must have been brought by the same claimant against the
same defendant
 Works for all claims. Do not need to just be by the plaintiff. Are for any
claimant (Meaning counterclaims)
 Can only be asserted against someone who was a claimant in Case 1
 Nonparty preclusion
 Can only occur when the nonparty is in privity
 (2) Case 1 must have ended in a (a)valid, (b)final judgment (c)on the merits
 (a) Valid
 Competence of the court in Case 1
 Did the court have subject matter over the case and personal
jurisdiction over the parties?
 If yes, then valid.
 (b) Final Judgment
 One that ends the litigation on the merits and leaves nothing for the trial
court to do but execute the judgment
 Does not apply to interlocutory orders because they may be amended
during the litigation
 (c) On the Merits
 For a valid final judgment to have a preclusive effect, it must have been
based on the facts underlying in the dispute, on the question of who did
what
 MERITS:
57

 SJ, Final Judgment, Default Judgment, anything with Prejudice,


Involuntary dismissal not on procedure or jurisdiction are also on the
merits (rule 41(b))
 12(b)(6) dismissal for failure to state a claim upon which relief can be
granted
 NOT ON MERITS:
 dismissal for lack of personal jurisdiction, statute of limitations, bad
process, failure to join a party under Rule 19
 (3)Case 1 and Case 2 must be based upon the same claim (Use cases to define
claim)
 Focus on allowing more people to bring in claims with Case 1 through joinder
than giving them a Case 2
 Arise from the same transaction or occurrence or series of transactions or
occurrences, look if the “facts are close in time, space, origin, or motivation,
and form a convent trial unit”
 if D doesn’t raise a claim against P arising out of same transaction or
occurrence, not precluded from raising claim in a second action b/c of claim
preclusion (because D would then be P in second action, and would not be the
same party)
 But D must bring claim against P arising out of same transaction or
occurrence as a compulsory counterclaim (Rule 13(a))
 Matthews –defines claim as “a group of facts limited to a single occurrence or
transaction without particular reference to the resulting legal rights. The facts
surrounding the occurrence”
 Rush v. City of Maple Heights (1213)
 Facts: Action for negligently maintained roads
 C1: (Rush v City 1) Sues city for failure to maintain street, damage of $100
for property damage awarded
 C2: (Rush v City 2) : Sue city for personal injury (not injury to property)
 P argument: Rush wants to use issue preclusion. We already decided city was
neg
 D argument: Want to use claim preclusion. Should have brought personal
injury action in C1. It was same transaction/occurrence.
 “A P may maintain only one action to enforce his rights existing at the time
such action is commenced” The second action is precluded. Should have
raised it in the first case because of transaction test
 Preclusive effect ectends to all rights the original plaintiff had with respect
to all or any part of the transaction, or series of connected transactions, out
of which the original arose
 Rule- If you have claim against different parties arising from the same transaction.
You can sue them separately, no preclusion. If you have multiple claims against one
party from the same transaction, you can't split the claims, unless you couldn't bring
C2 in forum due to jurisdiction
 Matthews v. New York Racing Association, Inc. (1221)
 Just tells us that sometimes the substantive law will tell us that there is privity
(respondeat superior) and that they are the same parties
58

 Federated Department Stores, Inc. v. Moitie


 C1: anti trust claim with 7 plaintiffs. Dismissed 12(b)(6) on the merits
 5 appeal and 2 don’t (Moitie and Brown)
 C2: the 2 file in state court – barred claim preclusion
 Simple justice/public policy because t dictates there be an end of lititgation
and those who contested the issue should be bound
 Jones v. morris Plan Bank of Portsmouth
 C1: dealer suing defaulting on payments
 C2: defaults on payments again and tries to get car back
 Dealer had full rights to full contract in C1 yet only went for 2 months so waived
ability to go for the rest in C2
 Defense Preclusion (When Rule 13 doesn’t apply)
 Former defendant seeks to advance a claim against the original plaintiff
 No claim preclusion when you flip the v.
 Three scenarios
 Matters not advanced in the first action
 Matters that were advanced in the first action but are not foreclosed by issue
preclusion
 Second action by original plaintiff which the defendant seeks to raise defenses
that were equally available in the first action but were not advanced there
 Mitchell v. Federal Intermediate Credit Bank (1230)
 Case 1: Bank v. Mitchell for Debt on a loan
 Mitchell gave bank the crops worth $18,000 when only owed $9000
 Mitchell wins and owes the bank nothing
 Case 2: Mitchell v. Bank for the $9000 back
 Bank wants to argue claim preclusion but cant because not same claimant or
defending party
 Mitchell is precluded not because Bank is right, but because can’t use a
defense from C1 as a sword in C2. Should have litigated in C1
 Linderman Machine Co. v. Hillenbrand Co. (1233)
 Case 1: L v. H wanted purchase price
 H wins
 Case 2: H v. L sues for transferring/ install and can proceed
 H wins. The facts to install and remove were not litigated
 In rule 13 jurisdiction, this would be barred because would be compulsory

 Issue Preclusion/Collateral Estoppel
 Precludes relitigation in Case 2 of a particular issue that was actually litigated and
determined in Case 1
 Not tied to transactional relatedness
 Three requirements for Issue Preclusion
 (1) Must have ended in a valid final judgment on the merits
 Same as above with claim preclusion
 (2) same issue presented in Case 2 must have been actually litigated and
necessarily decided in Case 1.
59

 Three requirements
 (1) Issue must have been actually litigated
 Did Case 1 go to trial and evidence get presented on the particular issue?
 Does not need to be sufficient evidence to meet the burden at trial
 Look at the decisions/transcripts/pleadings
 Merely raising an issue in pleading doesn’t count
 Summary judgment/dismissal with prejudice can carry issue preclusive
effect
 Determining there is no material factual dispute is an adjudication on
what facts exist and constitutes litigation
 Cromwell v. County of Sac (1237)
 Sued to recover bonds issued by the county because the bond issuance
was fraudulent
 Case 1: Cromwell sued the county to recover on certain claims for
interest on particular bonds
 County proved the bond issuance was fraudulent
 Case 2: sued the county to recover on different claims for interest on
the bonds because he was a Holder in due course (HDC) and then they
must pay even if it is fraudulent
 County was entitled to issue preclusion on the fact that the bond
issuance was fraudulent, but Cromwell wanted to say he was an
HDC and he was entitled to do so.
 Reason why could say it was fraudulent because it was litigated
and decided in Case 1 but the HDC issue was not litigated or
decided in Case 1
 (2) Issue must have been necessarily decided
 May present alternative theories of recovery at trial
 Once one such theory is established it may ignore the others
 General verdict in favor of the claimant is never ambiguous. Found that A
was not negligent and Z was negligent
 General verdict in favor of the defendant is ambiguous. Could have found
that A was negligent, Z was not negligent or both of the above. No issue
preclusion.
 Russel v. Place (1243)
 Case 1: for more than two years it was used by the public so the patent
is no good so it can’t be enforced
 First court determined infringement but sued on fat liquor and leather treatment.
Not clear if the court ruled on 1 or both of those. P sued again for infringement.
 Case 2: two parts of the patent so couldn’t tell which one was used
 No issue preclusion- we don’t know if they decided on both or not.
It was a general verdict, so we need to relitigate.
 It was not necessarily decided because didn’t know if it was the
fat liquor or the leather treatment or both. Special verdict form
would have resolved it
60

 (3) must be speaking of the same issue in both cases


 Need to look at:
 Degree of overlap between the evidence or arguments
 Whether new evidence or argument in Case 2 involves the same rule
of law as that in Case 1
 Whether pretrial preparation in Case 1 could have reasonably have
embraced the new evidence or argument in Case 2
 Whether there is a close relationship between the claims asserted in
Case 1 and Case 2
 (3) that issue must have been essential to the judgment in Case 1
 Difference between the issue decided and the judgment entered in the case
 Need to ask if the finding on the issue had come out the other way, would the
judgment be the same?
 If so, the finding is not essential to the judgment and then can’t use
preclusion
 Rios v. Davis
 Car accident
 Case 1: Davis v. Rios to recover damage to the vehicle
 Judge finds both were negligent in causing the collision and Davis
is not able to collect
 Davis – neg
 Rios - neg
 Case 2: Rios v. Davis to recover for injuries for the same collision
 No claim preclusion because not the same claimant against the
against the same defendant
 If Davis was not negligent, would it change the judgment? Yes
 Rios can use preclusion to say Davis was negligent because
essential
 If Rios was not negligent, would it change the judgment? No
 Davis cannot use preclusion because not essential
 Additionally as a matter of due process, issue preclusion can only be asserted against
one who was a party to Case 1 (applied to claim preclusion too)
 Concerns the question against whom preclusion may be asserted
 One can be bound by a judgment from Case 1 only if they had a full and fair
opportunity to litigate in Case 1
 Someone who was properly joined as a party to Case 1
 A nonparty generally will not be bound by the judgment in Case 1
 Can bind people in privity and preclusion is appropriate
 Relationship between a party and nonparty in Case 1
 Nonparty agrees to be bound
 Nonparty is bound by a preexisting substantive legal relationship
with a party (property shareholders)
 Nonparty is bound because she was adequately represented by one
who was a party in Case 1 (Class action)
 Nonparty controlled the litigation in Case 1
61

 Nonparty litigates through a proxy


 Nonparty may be bound by litigation under special statutory
schemes
 Also, Court in Case 2 must assess “mutuality” which concerns the question of who
may assert issue preclusion
 Concerns the question of by whom preclusion may be asserted
 Mutuality of Estoppel: The only people who can use preclusion in Case 2 are
people who would be bound by judgment in Case 1
 Fairness – one should not be able to take advantage of the judgment from
Case 1 if they were not burdened by the judgment
 Nonmutual assertion of issue preclusion – assertion by someone who was not
a party in Case 1
 Narrow exception: applies only in vicarious liability situations where the
primarily liable party is found not negligent
 Rejection of mutuality for Defendants (Nonmutual Defensive Issue Preclusion
used by defendants)
 Bernhard v. Bank of America National Trust & Savings Association (1272)
 Gave Cook authority to write checks for her. Wrote a large check to
himself and put it in his personal account. Cook became the executor of
the estate
 Case 1: woman’s relatives (Bernhard) sued to challenbge his acconting of
the estate, insisting he return the money taken from the account
 After litigation found out Cook had the woman’s permission to take
the money as a gift. Judgment in his favor
 Case 2: Cook resigned as executor and one of the woman’s daughters was
appointed and she sued the bank that handled the woman’s checking
account
 Question was whether the bank could assert issue preclusion
 Under the mutuality doctrine, No because they were not a party to
Case 1.
 Court allowed the bank to use issue preclusion
 Traynor said no satisfactory reationalization has been advanced
for the requirement of mutuality
 Blonder-Tongue Laboratories Inc. v. University of Illinois Foundation (1276)
 Supreme Court embraced Bernhard
 Case 1: P sued D1 alleging D1 infringed the plaintiff’s patent
 Entered judgment for D1 because P patent was invalid
 Case 2: P sued D2 alleging they infringed on the same patent
 Allowed D2 to use issue preclusion although they were not a party
 Rejection of Mutuality for Claimants (Nonmutual Offensive Issue Preclusion)
 When claimants that were not a party in Claim 1 try to use preclusion
 To allow someone who was not a party to offensively use issue preclusion
offensively is consistent with due process because it is against a person who
was a party in Claim 1, but the problem is with mutuality
62

 Concerned about wait and see where it would be unfair to defendant because
give plaintiff a windfall
 Parklane Hosiery Co. v. Shore
 Violation of federal securities laws by a corporation and some of its
managers
 Case 1: SEC filed an administrative enforcement proceeding against the
various defendants alleging they had issued a materially false and
misleading proxy statement in connection with the merger. Sought only
equitable relief
 Found the proxy statement was materially false and misleading
 Case 2: private palintiffs sued the same defendants on the same claim
concerning the same proxy statement
 Defensive use of issue preclusion incentivizes the claimant to join all
potential plaintiffs in Case 1 where offensively it has the opposite effect
 Offensive will only apply where it will not reward a private plaintiff
who could have joined in Case 1
 Could be unfair to defendants where:
 Sued for a small amount of money and might have little
interest to defend with vigor then Case 2 someone uses
offensive preclusion for a large amount
 Multiple claims would be unfair to penalize for one when won
the others
 Unfair if did not have full and fair opportunity to litigate in
Case 1
 Allowing preclusion would not promote inefficient litigation.
 The plaintiffs could not have joined because C1 was brought by the SEC
 No unfairness was present
 Defendant’s had every reason to litigate vigorously
 No inconsistent judgments on the books. The only judgment was
unfavorable to the defendants
 No procedural opportunities that would justify a refusal to allow the use of
offensive collateral estoppel
 Erie Doctrine
 Erie problems arise only in federal court and concern the choice between federal and state
law
 Generally arises in diversity of citizenship cases because in a federal question case it
arises under fed law
 The constitution requires the application of state law to some aspects of the case
 Vertical Choices of Law vs. Horizonal choice of law
 First need to determine if you are apply federal or state law (Vertical)
 Start with the Rules of Decisions Act
 Federal courts must apply state law as the rules of decision in civil cases,
except where federal law applies
 Then determine which state’s law governs (horizontal)
 Swift v. Tyson
63

 Swift was a diversity of citizenship case brought in federal court in NY. Typical rule
was that discharge of debt was not consideration in NY. The court embraced the
modern principle that discharge of debt was consideration
 Interpreted the phrase “laws of several states” in the Rules and Decisions Act to
include only state statutes and state common law of local concern
 With matters of general concern Courts concluded that federal courts in diversity
cases were free to apply their own conception of General common law
 Determined that decisions of the court did not constitute laws (Odd)
 Swift was based on the notion that there was only one true common law
 Determined that the federal law was assigned the job of determining the content
 The general common law to be applied depended on which court state or federal was
hearing the case. Led to vertical disuniformity
 Black and White Taxicab Co. v. Brown and Yellow Taxicab Co.
 People could only use taxicabs provided Brown and Yellow at the railroad and other
companies including Black and White opposed the contract cause it froze them out of
customers
 Kentucky courts held exclusive dealing contracts were void
 BY wanted to sue BW in federal court to argue federal general common law would
enforce the exclusive contract
 Issue was that they were both citizens of KY so BY dissolved the corporation and
reincorporated in TN making the corporation a citizen of TN and then they went
to Fed court and got an injunction. Supreme court upheld this injunction
 Erie v. Tompkins
 Tompkins (PA) was walking on a path next to the train track in PA when the Eire
Railroad passed from behind and something hit Tompkins on the head and he
suffered injuries. He sued in NY Fed Court.
 Tompkins argued that the path was commonly used and that he was an invitee having
a duty owed to him. Railroad contended that he was a trespasser and they were not
liable because it was not willful or wanton harm
 State law on this was clear: he was a trespasser and that he would lose. Sued in Fed
Court for the general common law where he would be an invitee
 Four parts of the opinion
 Determined there was a mistake where the courts were meant to apply statutory
and common law from the rules of decisions act
 Determined the one true common law had failed in practice
 Created discrimination by noncitizens against citizens because noncitizens
could select the court
 Cant remove if sued in own state court
 Noncitizen advantage because they could pick federal court or state court
and could have different laws in each
 Court took a turn saying “If only a question of statutory construction were
involved, we should not be prepared to abandon a doctrine so widely applied
throughout nearly a century.”
 Determined that it overruled Swift because it was unconstitutional
 Can’t have more power than the sovereign that created you (Congress)
 Constitutional basis
64

 Never identified which part but dealt with federalism


 Power not expressly given to the federal government is reserved to the
states or to the people
 Remanded the case
 Concurrence
 Believed Swift should be overruled and would have based the holding on the
Rules of Decision Act alone and would have held that the laws of the several
states as used in the statute should include all decisions of the state courts
 Federal court must apply state substantive law but may apply federal procedural
law
 Congress passed the Rules Enabling Act delegating to the Supreme Court power
to prescribe general uniform rules of practice and procedure for the federal courts
 Guaranty Trust Co. v. York
 P claim asserted in federal court under diversity of citizenship
 Fed district court trcognized that the state statute of limitations barred the claim
 Supreme Court determeind that Erie required the court to apply the state statute of
limitations
 Created an Outcome Determinative Test: Required that the outcome of
litigation in federal court be the same as it would have been in state court
 Statute of limitations was considered to be substantive – apply state law
 Could change the way you plan your actions in the future
 Does not necessarily fall neatly into either
 outcome determinative test. Who’s statute of limitations would be controlling.
 The state law should apply because of the outcome determinative test because
state law and federal law provide different outcomes. No cause of action in state
court and thus state law applies.
 How do we distinguish between substantive and procedural
 If the state law would significantly affect the outcome, we use state
 Outcome Determinative Test – What would be the outcome under state and
federal law? If there is a significant difference, then State law wins.
 If it affects the outcome of the litigation, it is substantive
 Ragan v. Merchants Transfer & Warehouse
 when does the statute of limitation stop running? Outcome determinative.
 When an is action commenced for purposes of tolling the statute of limitation?
 Statute of limitations expired after the plaintiff filed the case but before the
defendant was served with process
 State Law provided that the statute was tolled from the date on which the
defendant was served with process, not the date on which the complaint was
filed
 Thus under state law the plaintiff was barred by the statute of limitations
 Plaintiff argued that under Rule 3, the statute of limitations was tolled from the date
on which the complaint was filed
 Supreme court rejected the argument because of outcome determination
65

 Cohen v. Beneficial Industrial Loan Co.


 Shareholders derivative suit
 States (NY) require plaintiff post a bond as a prerequisite to the derivative suit
 Held the federal court must apply the state law bond requirement even though
Rule 23.1 does not include such a requirement
 Byrd v. Blue Ridge
 Byrd was injured working for a construction company and could not sue his
immediate employers because of workers compensation laws
 Brought a diversity of citizenship case against the Co-op and there was a question
of whether or not he was a statutory employee
 Under South Carolina Law determined that a judge would make the decision
without a jury, but Byrd argued that the law was not binding because they
were sitting in diversity and the issue should be determined by a jury
 Court upheld the federal law and not the state law on the issue
 The policy counsels but does not compel the federal courts to apply
state law in cases in which failure to apply state law will be outcome
determinative
 If ignoring state law on this point will be outcome determinative, the federal court
will apply state law, but it will not do this if it would violate some interest of the
federal courts as a separate judicial system
 Byrd says outcome determinative is too easy/simple and not what Erie was meant to
get at
 Says to balance the interests of Federal vs. State interests
 Federal interest – 7th amendment
 State interest –not really sure
 Substantive - rule bound to rights and relation of the parties (affects what we do
outside of court)
 Procedural – enforcement of those rights
 Hanna v. Plumer
 P brought the case in federal court. Federal rules (Rule 4) allowed service of process
by leaving it at the dwelling while the state laws required personal service of process
 Said the message of Guaranty Trust was to reference the policies underlying the Erie
rule and that Guaranty Trust is not meant to be applied woodenly
 Was outcome determinative because if state law applied the case would be dismissed
and if it was ignored, the case would proceed
 ODILTAE - Twin Aims of Erie traced to the litigant equality theme
 Discouragement of forum shopping
 And avoidance of the inequitable administration of the laws
 Needed to look at whether the difference between applying state law and ignoring
state law would lead the plaintiff to prefer the federal forum. If so, the federal
court should lean toward applying state law
 Determined that Hanna involved the Rules of Enabling Act
 Decides that when a FRCP applied Erie is irrelevant because it is an instruction by
congress to apply the provision
 Shall not abridge, enlarge, or modify any substantive right and limits its rule
making right to that of procedure
66

 Determined it must be assessed for validity on two levels:


 Constitutional
 And Statutory
 Sibbach v. Wilson
 Is there a federal directive?
 Is it sufficiently broad to cover the issue in dispute?
 If yes, Is it arguably procedural? – it is not rigorous
 If no, unguided Erie analysis.
 Walker v. Armco
 Facts indistinguishable from Ragan and the court upheld Ragan
 Determined there was no federal directive on point
 Court held that since there is no direct conflict between the Federal Rule and state
law, the Hanna analysis does not apply.
 Rule – First question of the Hanna test must be if the federal rule is sufficiently
broad to control the issue before the court?
 Only apply Hanna test if the federal rule of civil procedure is sufficiently
broad to control the issue
 How to determine if the Federal Rule of Civil Procedure is sufficiently
broad to control the issue/ direct conflict with the state law?
 Look at the purpose of the Federal Rule of Civil Procedure and ask if it
is trying to deal with the same issue as the state rule.
 Court read Rule 3 narrowly to only apply to federal statute of limitations, not state
statute of limitations
 FRCP not broad enough to control the issue and there is no direct conflict
 Do not apply Hanna test. Apply STATE rule.
 Federal rules may not be read broadly so as to bring them in imminent conflict
with state rules.
 Rule 3 doesn't control the outcome
 Purpose is not to control commencement for purposes of statute of limitations
 Do not narrowly control rules in order to avoid direct collision
 Semtek International Inc. v. Lockeheed Martin Corp.
 Concern that the broader interpretation of Rule 41(b) would interfere with the
Rules of enabling act by modifying a substantive right
 Gasperini v. Center for Humanities Inc.
 NY Statute said court would order a new trial if the verdict deviates materially
from those in similar cases which differed from rule 59 shock the conscience
standard
 Sided with the NY statute
 Conflict
 NY state law to order new trial for when damages deviate materially from
similar cases
 Defendant wants NY State law
 Saying that state law is substantive and Rule 59 doesn’t control (Erie
Analysis)
 Federal law allows review when damages shock the conscience
67

 Review of award based on discretion


 Plaintiff claiming that Rule 59 controls and shock the conscience standard
should apply
 District court said that state law was substantive
 Defendant wants NY State law
 Saying that state law is substantive and Rule 59 doesn’t control (Erie
Analysis)
 Arguably procedural – on the border and within Congressional power
 Court held that Rule 59 doesn’t control and both NY State law and Rule 59 can be
applied side by side
 Rule 59 sourced from common law
 Erie Analysis (Substantive vs. Procedural)
 Both
 Part of state law is substantive and procedural
 Supply state law for substantive part and use Erie ODILTAE for procedural part
 Court says that federal court shock the conscience standard allows greater
recovery.
 Byrd Balance
 Can accommodate both federal and state law
 End up really applying neither when using the deviate materially standard
 Doesn’t violate 7th amendment because you’re not reexamining jury
verdict
 If we came accommodate federal and state interest by splitting rule into
component parts, we should
 What parts carry large state interest
 What is left is good for federal to use, then we apply federal law to that part
 Here federal interest is in protecting state law
 Burlington Northern R.R. v. Woods
 May: Application of Rule 38 of the Federal Rules which allows a court to impose
double costs if it finds that an appeal was frivolous
 Must: State law said that an appellant be fined 10% of the judgment if the
appellant had obtained a stay of the trial court judgment and lost on appeal
 Believe Rule 38 could ave coexisted with state law
 Conflict/collision of may vs. Must – direct collision apply federal rule
 Stewart Organization Inc. v. Ricoh Corp.
 Involved a federal statute and not a federal rule.
 Contained a forum selection clause saying litigation would take place in NY
 Alabama law prohibited the enforcement of forum selection clauses while NY
permitted it
 Conflict of may vs. may not
 Court held that federal law applies
 Rule – if the federal court determines that a federal statute covers the point in
dispute, then it proceeds to inquire whether the statute represents a valid exercise
of Congress authority under the constitution. If yes fed law applies
68

 Scalia Dissent- He thinks the rule fails the scope test [plain meaning test], its not
broad enough because it leaves no room for the operation of state law because it
doesn't mention forum selection clauses. The language of fairness and justice is
forward looking not backward [clause]. He thinks it comes from judge made law
and then goes to outcome determinative.
 Shady Grove Orthopedic Association, P.A. v. Allstate Ins. Co.
 Assertion of a statutory claim under NY law for allegedly unpaid interest
concerning insurance benefits
 Under NY law it couldn’t be a class action but under Rule 23 it was allowed
to be a class action
 Rule 23 answers the question in dispute and therefore if valid would apply
under Hanna
 Conflict
 NY State law cant bring this as class action
 Federal law you could bring class action
 Scalia plurality
 Plain meaning of Rule 23 conflicts with state law
 When you find that conflict, we just ask if the federal law is arguably
procedural
 Some action Rule 23 controls and some don’t
 Stevens
 Agrees there is a conflict
 In order to determine federal rule you must ask if state rule is bound up with
state rights so much that it is substantive
 Dissent
 Agrees with Steven in looking at State law
 Think State law is bound up and Steven analyzed state law wrong
 Only good for guidance in future cases
Semtek v. Lockheed
1. Case 1 – Federal District Court
2. Case 2 – Semtek sues again in MD
a. Longer statute of limitation
3. Lockheed moves to dismiss for claim preclusion (same parties)
4. Court concludes that the dismissal was “on the merits” and had a
preclusionary effect
a. Rule 41(b)
i. Dismissal on the merits is adjudication on the merits
unless the court states otherwise
ii. Not about preclusion, its about when you can file in
the same court
iii. Broad Rule 41(b) reading may violate Rules
Enabling Act
5. Federal judge made law decides what preclusive effect it will have
on a federal judgment
69

a. Not going to allow states to do this with deciding federal


law
b. Federal court sitting in diversity would have the same
preclusive effect as in the state in which it sits
c. Different sates have different law, so its okay that states
applying state law will have different results
6. Federal common law tells us what the preclusive impact will be for
federal judgments.
7. State court, you apply preclusion law of that sate
8. 1331, you’re using federal common law regardless of Case 2

Case 1 Case 2 Which Decision Applie


State X State Y State X
State X Fed Y (1331) State X (Allen v. McCu
State X Fed Y (1332) State X
Fed X (1332) State Y Fed X (Semtek v. Lock
Fed X(1331) State Y Fed X
Fed X (1331) Fed Y (1331) Fed
Fed X (1331) Fed Y (1332) Fed
Fed X (1332) Fed Y (1332) State X
Fed X (1332) Fed Y (1331) State X