CIVIL PROCEDURE I OUTLINE

4 Elements to Get into Federal Court:

1. Subject matter jurisdiction – power over the topic
2. Personal jurisdiction – power over the persons involved
3. Proper notice – notifying the parties of the action
4. Venue – locale

SUBJECT MATTER JURISDICTION

- Federal Courts are courts of limited jurisdiction
- Source of Power: Subject Matter Jurisdiction derives its power from the US
Constitution (Article III, Section 2) and, therefore:
o Congress cannot grant more power than is allowed by Article III, Section 2,
although it can limit it.
o Subject matter jurisdiction cannot be waived by the parties.
o The courts can raise the issue, as to whether subject matter jurisdiction exists, on
their own.
- US Constitution: Article III, Sec. 2 (Subjects of Jurisdiction). Judicial Power is
granted to
o All cases, in law and equity, arising under:
 The Constitution
 The laws of the United States
 Treaties made under their authority
o All controversies between:
 Two or more states
 A state and citizens of another state
 Citizens of different states
 A state, or the citizens thereof, and foreign states, citizens, or subjects
- Federal Question Jurisdiction:
o 28 U.S.C. 1331. Federal Question: The district courts shall have original
jurisdiction of all civil actions arising under the Constitution, laws, or treaties of
the United States
o Concurrent Jurisdiction:
 Federal question jurisdiction is not exclusively within the power of the
federal courts; state courts may also hear federal question cases.
 Exceptions: Federal jurisdiction is exclusive in cases involving admiralty
(§1333), bankruptcy (§1334), and antitrust (§1335)
o Well Pleaded Complaint Rule:
 A suit arises under the Constitution and laws of the United States only
when the plaintiff’s statement of his own cause of action shows that it is
based upon those laws or that Constitution.
 It is not enough that the plaintiff alleges some anticipated defense to his
cause of action and asserts that the defense is invalidated by some
provision of the Constitution of the US.
 Exception: The courts may grant federal question jurisdiction and look
beyond the complaint if there are very strong federal interests involved.
 o Louisville & Nashville Railroad v. Mottley
 Synopsis: The Mottleys (P) were injured in a railway accident. An initial
lawsuit was filed, and in a settlement the R.R. (D) gave them lifetime
passes to ride the train. Congress, then, outlawed free passes and D
refused to honor them. P’s complaint alleged that the act Congress referred
to did not apply to his circumstances, but that if it did, it was in conflict of
the Constitution.
 Holding: Although it was likely that a question under the Constitution
may arise, P’s original cause of action is that the statutory law does not
apply to him. Therefore, there could not be subject matter jurisdiction.
 Note: The case illustrates the “well pleaded complaint rule” and is an
example of where the court raised the issue of SMJ itself.
- Diversity of Citizenship Jurisdiction:
o 28 U.S.C. 1332. Diversity of Citizenship: The district courts shall have original
jurisdiction of all actions where the matter in controversy exceeds the sum or
value of $75,000 (exclusive of interest and costs) and is between:
 Citizens of different states
 A citizen of a state and subjects of a foreign state
 Citizens of different states in which foreign states or citizens are additional
parties:
 Citizen & foreigner v. citizen
 Citizen v. citizen & foreigner
 Citizen & foreigner v. citizen & foreigner
 Note: Can never have foreigner v. foreigner
o Citizenship: To be a citizen of a state, a person must
 Be a citizen of the United States, AND
 Be domiciled in the state of which he claims to be a citizen
 Note: A legal representative of a decedent or legal representative of an
infant/incompetent, shall be citizen only of that of the represented person
o Domicile: To be domiciliary to a state, a person must
 Have a residence in the state, AND
 Have an intent to stay indefinitely
o Factors in Determining whether a Person is Domiciliary to a State:
 Look at the outward manifestations of his intent, e.g. a person’s conduct
 Look at the ties a person has to that area
 Where you pay taxes
 Where you are registered to vote
 Where you work
o Corporations: Dual Citizenship. A corporation is a citizen in both
 The state in which it was incorporated, AND
 The state where it has its principal place of business
o Other Entities (partnerships and labor unions): They are citizens of each state
in which any member is a citizen; if you sue a partnership, you are suing the
partners.
o Complete Diversity Requirement: Complete diversity of the parties is required
in order for a federal court to exercise diversity jurisdiction – that is, no parties on
one side of the suit may be a citizen of the same State as any party on the other
side.
 Diversity of citizens must be present at the time the complaint if filed
 Jurisdiction is unaffected by subsequent changes in citizenship of parties
 Burden of pleading diverse citizenship is upon party invoking federal
jurisdiction – and if challenged that party has burden of proof
 You can still have SMJ over a cases even if all parties aren’t diverse as
long as it arises under federal law
o Redner v. Sanders
 Synopsis: P resided in France but remained a citizen of the US with
certain ties to California. The Ds, on the other hand, were citizens of NY.
P’s complaint averred that diversity existed b/c P was a resident of a
foreign state. Then, when D moved to dismiss for lack of jurisdiction, P
filed an affidavit arguing for a California domicile.
 Holding: For jurisdiction to exist under his original complaint P needed
to be a citizen of France, not merely a resident, and in regard to his
response to the motion for dismissal, his factual submission was not
sufficient to demonstrate a California domicile. Therefore, the case was
dismissed for lack of SMJ.
o Saadeh v. Farouki
 Synopsis: D, a Jordinian citizen residing in Maryland, borrowed money
from P, a Greek citizen, and defaulted on the loan. When the complaint
was filed, D had achieved “permanent resident” immigration status (Green
Card) in the US, and then while litigation was under way, D became a
citizen of the US.
 28 U.S.C. §1332(a): An alien admitted to the United States for permanent
residence shall be deemed a citizen of the State in which such alien is
domiciled
 Holding: The legislative act was intended only to eliminate SMJ of cases
between a citizen and an alien living in the same state as that citizen. A
literal reading of the statute would produce an unconstitutional result –
federal diversity jurisdiction over a lawsuit brought by one alien against
another. Therefore, the case was dismissed for lack of SMJ.
o Amount in Controversy Requirement:
 The plaintiff’s claim for damages must be greater than $75,000
 Grounds for Dismissal:
 It must appear to a legal certainty that the plaintiff cannot recover
the amount claimed, OR
 It must appear to a legal certainty that the claim was made in bad
faith – the plaintiff was never entitled to recover the amount
claimed and that his claim was therefore colorable for the purpose
of conferring jurisdiction.
 Injunctions: Four Approaches
 Determine the value of the injunction to the P
  Determine the cost to the D of complying
 Determine the cost or value to the party invoking federal
jurisdiction
 Allow jurisdiction if any one of the tests above yields the statutory
amount
 Aggregation of Claims
 Single P, Single D: Adding together the monetary value of two or
more claims to satisfy the minimum amount in controversy is
permissible.
 Single P, Multiple Ds: Adding together the monetary value of a
P’s individual claims against multiple D’s to reach required sum is
not permissible.
 Multiple Ps, Single D:
o Adding together the monetary value of two or more of the
Ps’ claims to reach the required sum is not permissible if
the Ps’ claims are separate and distinct – they must be
related for aggregation to be permissible.
o If one P’s claim is for less than the statutory amount and
one P’s claim is in excess of the statutory amount against
the same D, the P in excess can sue in federal court and 2nd
P can also but only if the claims are really related.
o Note: Based on the theory of Supplemental Jurisdiction
(both claims must derive from the same nucleus of
operative fact)
 Multiple Ps, Multiple Ds: If all of the parties have a common
undivided interest, the value of the total will determine the amount
in controversy.
 Class Action Suits: At least some members must have claims
individually that satisfy jurisdictional amount
 Counterclaims
 If P’s claim exceeds the limit, the counterclaim will be allowed
regardless of amount.
 However, it is unsettled if P’s claim is less than the limit but the
counterclaim exceeds limit.
- Supplemental Jurisdiction
o 28 U.S.C. 1367(a). Supplemental Jurisdiction: In any civil action of which the
district courts have original jurisdiction, the district courts shall have
supplemental jurisdiction over all other claims that are so related to claims in the
action within such original jurisdiction that they form part of the same case or
controversy.
 Pendent Jurisdiction (adding a claim): When a plaintiff has 2 claims,
one being a federal claim (based on either diversity or federal question
jurisdiction) and the other arising under state law, both can be brought in
federal court provided
 They both arise from a common nucleus of operative facts, AND
  The federal claim has substance sufficient to confer subject matter
jurisdiction on the court
 Ancillary Jurisdiction (adding a party): Additional parties may be
brought in after the initial complaint, even if their claims are w/o federal
jurisdiction, so long as their claims and the initial complaint are derived
from a common nucleus of fact.
o 28 U.S.C. 1367(b). Exception: When district courts have original jurisdiction
founded solely on diversity of citizenship, the district court shall not have
supplemental jurisdiction over claims by an original plaintiff against a 3rd party
joined under Rule 14, 19, 20, or 24 when exercising supplemental jurisdiction
would be inconsistent with the jurisdictional requirements of diversity.
o 28 U.S.C. 1367(c). Exception: The district court may decline to exercise
supplemental jurisdiction over a claim if
 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
 In exceptional circumstances, there are other compelling reasons for
declining jurisdiction.
o Jin v. Ministry of State Security
 Synopsis: The Ps were practitioners of Falun Gong when China launched
a campaign within China and the US against the practice. The Ps brought a
multi-count civil rights and RICO action and one count of defamation
against the Ds. The Ds then brought forward a motion to dismiss for lack
of subject matter jurisdiction b/c the defamation claim arose under state
law.
 Rule: Although states may differ in their application of a law and
determining the correct one may be time-consuming, it does not mean the
local law is so important and so unsettled that the court must deny
jurisdiction. Complexity exists when there is significant uncertainty as to
the law itself.
 Holding: The defamation claim and the federal claims were derived from
a common nucleus of operative fact – the same facts that led to the
defamation claim led to the federal claims and they were such that they
would ordinarily be expected to be tried in one judicial proceeding.
Therefore, SMJ was valid.
 Note: The defamation claim had to be dismissed anyways b/c the claim
was filed outside the one year statute of limitations.
- Removal (From State to Federal Court)
o 28 U.S.C. 1441. Actions Removable Generally:
 Any civil action brought in a State court of which the district courts of the
United States have original jurisdiction may be removed by the defendant
to the district court that encompasses the geographical locale where the
action is pending.
  Federal Question Jurisdiction: If original jurisdiction is based on a
claim arising under the Constitution, US law, or treaty it may be removed
regardless of citizenship
 Diversity Jurisdiction: If original jurisdiction is based on diversity of
citizenship it may only be removed so long as none of the defendants are
citizens of the state in which the claim is brought (a.k.a. The Home State
Rule).
o 28 U.S.C. 1446. Procedure for Removal: The defendant must file notice of
removal 30 days from the day he receives the complaint or the summons,
whichever is shorter.
 If the case is not removable when the defendant receives the
complaint/summons but later becomes removable, D has 30 days from the
date the case becomes removable.
 Exception: The case cannot be removed when the original jurisdiction is
based on diversity of citizenship and it has been more than one year from
the date on which the original complaint is filed.
o Caterpillar, Inc. v. Lewis
 Synopsis: P1, a resident of KY, sued D1, a DE corp. w/ its principal place
of business in IL, and D2, a KY corp. w/ its principal place of business in
KY. A few months later, P2, a Mass. corp. w/ its principal place of
business in Mass., joined as a plaintiff. P1 then settled with D2 and D1
filed a notice of removal. P1 objected and moved to remand the case to
state court b/c P2 had not yet settled so there was still no diversity. The
motion to remand was denied. P2 and D2 then settled but not until after
the one year statutory limit for removal of claims based on diversity. P1
and D1 went forward in federal court, where the jury entered a unanimous
verdict in favor of D1.
 Rule: Despite a federal court’s threshold denial of a motion to remand, if,
at the end of the day and case, a jurisdictional defect remains unsecured
the judgment must be vacated.
 Holding: Although removal was improper, no jurisdictional defect
remained unsecured upon judgment of the District Court. To wipe out the
adjudication post-judgment, and return to state court a case satisfying all
federal jurisdictional requirements, would have imposed an exorbitant cost
on the courts. The judgment of the District Court was, therefore, affirmed.

PERSONAL JURISDICITON
- US Constitution: 14th Amendment (The Due Process Clause). No state shall deprive
any person of life, liberty, or property w/o due process of law (unless it is fair).
- US Constitution: Article IV, Sec. 1 (Full Faith and Credit Clause). Full faith and
credit shall be given in each state to the public Acts, Records, and judicial proceedings of
every other state.
- Source of Power:
o Personal Jurisdiction is not a constitutionally granted right, and is therefore
waivable.
o Personal Jurisdiction is part of US constitutional law b/c of Pennoyer v. Neff.
- The Origins:
o Types of Personal Jurisdiction
 In Personam: Lat. Against a person.
 A lawsuit in personam involves personal rights and obligations.
 A court may only obtain personal jurisdiction when the person
present in the state where the suit is brought and service is made
personally.
 Constructive notice of service is not permitted.
 In Rem: Lat. Against a thing.
 A lawsuit in rem involves settlement of a property claim w/o
reference to the individual claims, e.g., partition of land.
 A court may obtain personal jurisdiction through constructive
notice of service.
 Quasi In Rem:
 A lawsuit which is quasi in rem involves personal obligations but
uses a person’s property to obtain personal jurisdiction over him.
 A court may obtain personal jurisdiction through constructive
notice of service only if (1) the property is in the state where the
suit is brought and (2) it is attached at the outset of the suit.
o Pennoyer v. Neff
 Synopsis: A lawyer living and practicing in Oregon sued P for legal fees
owed to him. P was a non-resident of the state, was not personally served
with process, and did not appear in court. Judgment was entered against
him upon a constructive service of publication. After the judgment, P
acquired 300 acres of land in Oregon. To satisfy the judgment the lawyer
had the sheriff seize and sell the land. D bought it and P sued D in federal
court to recover the possession of the land.
 Holding: The personal judgment recovered against P was a money
judgment. Publication of process or of notice was not sufficient, as P was
not a resident of the State at the time of the suit nor was his land attached
at its outset. Therefore, the judgment was without any validity and could
not have authorized a sale of the property in controversy.
 Notes:
 Pennoyer links the Full Faith and Credit Clause to personal
jurisdiction – the courts of State Y need not heed the a judgment
by the courts of State X if X lacked personal jurisdiction over the
D (a.k.a. Collateral Attack)
 Pennoyer also links the Due Process Clause to personal
jurisdiction – for purposes of fairness there must be sufficient
notice of the trial/hearing given to the defendant.
o Three Ways to Challenge Personal Jurisdiction:
 Decline to appear, suffer a default judgment and attack the judgment only
when the D seeks to enforce it in a subsequent proceeding (collateral
attack).
 Risk: If second court rejects the jurisdictional challenge, D can
raise no defenses on the merits.
  Only jurisdiction is open to collateral attack.
Raise the defense in a pre-answer motion or in D’s answer to the charges.
 In either case, challenging personal jurisdiction MUST be the first
thing you do (Note: It may be combined with other motions).
 Risk: Making an appearance or litigating other issues but failing
to challenge personal jurisdiction first results in waiver of the
jurisdictional defense.
 File for a special appearance
 Permits the D to appear in court for the sole purpose of filing a
motion to dismiss on the grounds of lack of personal jurisdiction
yet avoid being charged with personal service.
 Benefit: If D loses, he can appeal later.
- The Modern Constitutional Formulation of Power
o Redefining the Constitutional Power
 International Shoe Co. v. Washington
 Synopsis: D failed to contribute to the unemployment fund as
required by a Wash. state statute. D was a DE corp. with its
principle place of business in MO and no offices or manufacturing
plants but several sales persons in the Wash. (P). Notice of
assessment was personally served upon a sales solicitor employed
by D in the State, and a copy of the notice was mailed by
registered mail to D at its address in STL. D appeared specially
before the office of unemployment and moved to set aside the
order and notice of assessment. The motion was denied.
 Rule: To subject a D not present within the territory of the forum,
to a judgment in personam, due process only requires that D have
certain minimum contacts such that maintenance of the suit does
not offend traditional notions of fair play and substantial justice.
 Reasoning: Whether due process is satisfied has always depended
on the quality and nature of the activity in relation to the fair and
orderly administration of the laws which it was the purpose of the
due process clause to ensure
 Holding: D’s activities were systematic and continuous
throughout the years in question and the obligation here sued upon
arose directly out of those activities. Furthermore, D was receiving
the benefits and protections of the laws in the State of Wash.,
including the right to resort to the courts for the enforcement of its
right  sufficient minimum contacts
 Note: Substituted service is adequate as far as the Due Process
Clause is concerned so long as it is reasonably calculated to give
the defendant actual notice.
 Options available under a Pennoyer analysis:
o P could have attached the shoes as property at the
beginning of the lawsuit.
 o P could have shown that the action of the salesmen and
their relation to International Shoes created presence within
the state.
 Jurisdictional Analysis Under International Shoe
 Presence exists when there are continuous and systematic activities
related to the cause of action  Always jurisdiction
 Conversely, presence does not exist when there are merely casual
or isolated activities unrelated to the cause of action  No
jurisdiction.
 Continuous and systematic activity unrelated to the cause of action
 Maybe jurisdiction
 Isolated activity but related to the cause of action  Maybe
jurisdiction
 The International Shoe Test: Due process only requires that D have
“certain minimum contacts with the forum such that maintenance of the
suit does not offend ‘traditional notions of fair play and substantial
justice’”
 Specific Jurisdiction: Specific jurisdiction refers to cases where the
defendant’s activities in the forum state relate directly to the cause of
action.
 General Jurisdiction: General jurisdiction refers to cases where the
cause of action is not related to the activities, but because the defendant
has such substantial contacts in the forum state, it is always going to be
fair to sue there.
 Substantial Contacts:
 Corporations: principle place of business and the location of
incorporation
 Individuals: place of domicile
o Absorbing In Rem Jurisdiction
 McGee v. International Life Insurance Co.
 Synopsis: A resident of CA, purchased a life insurance policy
from D, whose place of business was in TX. He paid all his
premiums by mail from this residence. Although, D has never had
any office or agent in CA, it did solicit his business by mail. When
the CA resident died, D refused to pay P, the beneficiary of the
policy.
 Rule: It is sufficient for purposes of due process in exercising
personal jurisdiction over a defendant that the defendant is party to
a contract which has substantial connection with the forum state.
 Holding: The contract was delivered in CA, it was solicited in CA,
the premiums were mailed from CA, and the insured was a resident
of the CA when he died  sufficient minimum contacts.
 Note: The case interject the legitimate state interest of providing
effective means of redress for its residents into its reasoning.
 Hanson v. Denckla
  Synopsis: There was a family fight over the assets of Mrs.
Donner, a deceased mother who had established a trust in DE and
some years later moved to FL, where she died. The trustee remitted
the trust income to Donner while in FL and Donner carried on
several bits of trust administration there.
 Rule: The unilateral activity of those who claim some relationship
with a nonresident defendant cannot satisfy the requirement of
contact with the forum state – there must be some act by which the
defendant purposefully avails itself of the privilege of conducting
activities within the forum state.
 Holding: The relationship with Donner was formed in DE, years
before she moved to FL. The trust company has no office in FL
and transacts no business in there. Furthermore, they have never
even tried to solicit business in the state  insufficient contacts.
 Distinguishing McGee and Hanson: In McGee the defendant
intentionally solicited business from the forum state.
 Shaffer v. Heitner
 Synopsis: P, a nonresident of DE, is the owner of stock in the
Greyhound Corp., a business incorporated under the laws of DE
with its principal place of business in AZ. P filed a shareholder’s
derivative suit in DE against the Board, the individual members of
which were nonresidents. P then filed a motion for the
sequestration of the common stock, which was DE property. The
Ds specially appeared arguing that that they did not have sufficient
contacts with DE to sustain jurisdiction. The DE Courts rejected
the argument b/c they were asserting jurisdiction in rem, rather
than in personam, and therefore the minimum contacts test did not
apply.
 Rule: The presence of property in a state, without more, will only
serve as a valid basis for the exercise of personal jurisdiction,
where property is (1) the subject matter of the litigation or (2) the
underlying cause of action related to the property.
 Rule: However, the presence of property in a state may still bear
on the existence of jurisdiction by providing contacts among the
forum state, the defendant, and the litigation (Note: It is just no
longer conclusive).
 Holding: The Delaware courts based their assertion of jurisdiction
solely on the statutory presence of Ds’ property in DE. That
property was not the subject matter of the litigation, nor was it the
underlying cause of action related to the property  insufficient
minimum contacts
 Note: This case effectively destroys quasi in rem jurisdiction; in
rem jurisdiction is still allowed.
 Derivative Actions:
 o A representative of a corporation, independent of its
directors, sues the directors/trustees charging them with
misguiding of the corporation’s affairs
o The proceeds of a successful suit go to the corporation.
o Specific Jurisdiction: The Modern Cases
 World-Wide Volkswagon Corp. v. Woodson
 Synopsis: Robinsons purchased a new Audi from Seaway
Volkswagon in NY. The family, who resided in NY, left the state
for a new home in AZ. As they passed through OK, another car
rear ended them, causing a fire. Robinsons brought a products
liability action in OK against Seaway and its regional distributor,
World-Wide. Seaway and World-Wide were both incorporated in
NY and have their principal places of business there. They do not
distribute vehicles, parts, and accessories to retail dealers in OK.
 Rule: In order to exercise personal jurisdiction over a nonresident
defendant, the defendant must not only have minimum contacts
with the forum state, but the relationship between them must also
be such that it is reasonable to require defendant to defend the
particular suit there.
 Rule: Minimum contacts will be weighed against the “reasonable
or fairness” of a possible suit; the reasonableness factors are: (1)
the burden on the defendant; (2) the forum state’s interest; (3) the
plaintiff’s interest in obtaining convenient and effective relief; (4)
the shared interests of the several states; and (5) social policy.
 Holding: Seaway’s sales were made solely in NY and World-
Wide’s market was limited to NY, NJ, and Conn. Whatever
marginal revenues these companies may receive by virtue of the
fact that their products are capable of use in Okla. is far too
attenuated a contact to justify the exercise of personal jurisdiction
 Asahi Metal Industry Co. v. Superior Court
 Synopsis: On an interstate in CA, a man lost control of his Honda
motorcycle and collided with a tractor. The accident was caused by
a sudden loss of air and an explosion in the rear tire. The man sued
Cheng Shin Rubber, the Taiwanese manufacturer of the tire’s
tubing. Cheng Shin filed a cross-complaint seeking
indemnification from Asahi Metal Industry Co., the Japanese
manufacturer of the tube’s valve assembly. Zurcher’s claims
against Cheng Shin were settled and dismissed, and Asahi moved
to quash Cheng Shin’s service of summons.
 Rule: The substantial connection between the defendant and the
forum state necessary for a finding of minimum contacts must
come about by an action of the defendant purposefully directed
toward the forum state.
 Rule: The placement of a product into the stream of commerce,
without more, is not an act of the defendant purposefully directed
toward the forum state.
  Rule: Minimum contacts will be weighed against the “reasonable
or fairness” of a possible suit; the reasonableness factors are: (1)
the burden on the defendant; (2) the forum state’s interest; (3) the
plaintiff’s interest in obtaining convenient and effective relief; (4)
the shared interests of the several states; and (5) social policy.
 Holding: Asahi did not purposefully availed itself to the CA
market and considering the heavy burden on the defendant and
slight interests of the plaintiff and forum state, the exercise of
personal jurisdiction would be unreasonable and unfair.
 Manufacturers and The Stream of Commerce, Two Theories:
 The manufacturer need only be aware that its product will find its
way into the stream of commerce to be sufficient for the purpose of
exercising personal jurisdiction over it.
 There must be more than an awareness that it will arrive in the
stream of commerce, e.g., it must purposefully avail itself:
o Designing the product for market in the forum state
o Advertising in the forum state
o Establishing channels for providing regular advice to
customers in the forum state
o Marketing through a distributor who has agreed to act as
the sales agent in the forum state
 Burger King Corp. v. Rudzewicz
 Synopsis: Rudzewicz applied for a franchise to Burger King’s
Birmingham, MI district office. The application was forwarded to
Burger King’s FL headquarters, which entered into a preliminary
agreement w/ Rudzewicz. After some negotiations with the FL
headquarters a final agreement was signed. Rudzewicz’s rent
payments fell behind. Burger King brought suit in FL. Rudzewicz
challenged personal jurisdiction.
 Rule: To assert specific jurisdiction over an out-of-state defendant
who has not consented to suit in the forum state, the defendant
must have fair warning that his activities may subject him to the
jurisdiction of a foreign sovereign.
 Rule: The fair warning requirement will be satisfied if (1) the
defendant purposefully directed his activities at residents of the
forum and (2) the litigation resulted from alleged injuries that arise
out of or relate to those activities.
 Rule: The foreseeability of causing injury in another State is not a
sufficient benchmark for exercising personal jurisdiction. The
foreseeability that is critical to due process analysis is that the
defendant’s conduct and connection with the forum state are such
that he should reasonably anticipate being haled into court there.
 Holding: The franchise grew out of a contract which had
substantial connection FL; the agreement even stated that it shall
be governed and construed FL law. Furthermore, Rudzewicz’s
conduct was purposeful, directed, and voluntary. He reached out
 beyond Mich. and negotiated a long term contract with a Fla.
corporation. The assertion of personal jurisdiction over Rudzewicz
does not offend the due process.
 Pavlovich v. Superior Court
 Synopsis: CSS is a system used to encrypt and protect
copyrighted motion pictures on DVDs and is owned by a DE trade
assoc. with its principle place of business in CA. Pavlovich
founded a web site, which posted the source code of a program that
allowed users to circumvent the CSS technology. Pavlovich had no
connection to CA other than that his website could be viewed from
there.
 Rule: Creating a website, like placing a product in the stream of
commerce, may be felt nationwide but, without more, it is not an
act purposefully directed toward the forum state.
 Rule: A passive website, one which does little more than make
information available to those who are interested in it, is not
grounds for exercise of personal jurisdiction.
 Rule: An interactive website, where a user can exchange
information with a host computer, may be grounds for exercising
personal jurisdiction – the minimum contacts in such cases are
determined by examining the level of interactivity and commercial
nature of the exchange of information that occurs on the web site.
 Holding: Pavlovich’s web site is merely a passive web site and
therefore cannot be grounds for assertion of personal jurisdiction.
o General Jurisdiction
 Coastal Video Communications v. The Staywell Corp.
 Synopsis: Coastal, a VA publishing corp., brought a copyright
infringement suit in VA against Krames, a DE publishing corp.
with its principle place of business in CA. Krames has mailed
product catalogs and order forms to residents at their homes and
businesses in VA and distributed and sold their products to at least
3 hospitals there. Krames also has set up a website advertising over
850 of their products and allowing customers to order products
directly over the web. However, there is no direct evidence that
Krames ever sold the book at issue in VA. Krames entered a
motion to dismiss for lack of personal jurisdiction and Coastal
entered a motion seeking discovery on the issue.
 Rule: A court may exercise personal jurisdiction over a defendant
if it has general jurisdiction in which the requisite minimum
contacts between the defendant and the forum state are fairly
extensive.
 Rule: Only when the continuous corporate operation within a state
is thought 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 may a court assert general jurisdiction over a
corporate defendant.
  Holding: There was no specific jurisdiction b/c the cause of
action did not arise from the defendant’s contacts with the State.
As to the existence of general jurisdiction there was clearly a need
for further discovery given the significant gaps in the record as the
nature and extent of both the defendant’s traditional business
contacts w/ VA and also their internet based contacts w/ VA.
 Burnham v. Superior Court
 Synopsis: During a trip to CA to conduct business and visit his
children, Burnham, a NJ resident, was served with a CA court
summons and his estranged wife's divorce petition. The CA courts
rejected his contention that the Due Process Clause prohibited
them from asserting jurisdiction over him because he lacked
“minimum contacts” with the State.
 Scalia Opinion: Physical presence is the touchstone of personal
jurisdiction and it is the one of the continuing traditions of the
American legal system. The minimum contacts test was merely
created to substitute presence when a defendant is not present in
the forum state. The court had general jurisdiction over Burnham
b/c he was present in the forum state when he was served.
 Brennan Opinion: Presence is important but some focus should
be put on fairness. There must be a balance between tradition and
fairness; the minimum contacts test should be used. The court had
general jurisdiction over Burnham b/c he was served with process
while voluntarily and knowingly in the state.
 Note: Need to know both of the opinions; there was no majority
opinion; all the justices just agreed with the outcome.
o Consent as a Substitute for Power
 Carnival Cruise Lines, Inc. v. Shute
 Synopsis: Shute bought tickets for a cruise, and the tickets had a
forum selection clause limiting the forum to FL only. D was
injured on the ship and filed an action in WA.
 Rule: If you have a valid forum selection clause, there can be no
jurisdictional challenge, unless the clause was obtained through
fraud or unconscionable practices.
 Holding: Although the forum selection clause was not freely
bargained for, it was reasonable and enforceable. There was no
indication that P set FL as the forum as a means of discouraging
cruise-passengers from pursuing legitimate claims, nor is there any
evidence of fraud or overreaching. Furthermore, Shute had notice
of the forum provision and therefore, could have rejected the
contract with impunity.
 Dissent: The prevailing rule is still that forum-selection clauses
are not enforceable if they were not freely bargained for, create
additional expense for one party, or deny one party a remedy
o Long Arm Statutes
 In General
 A court may exercise jurisdiction over a defendant only when the
state or federal government authorizes it to do so (the authorization
must be constitutional)
 Long arm statutes authorize courts to reach beyond their own
borders and pull in nonresident defendants – even though the
defendant has left forum state or has never been in the state, he
may be required to defend a suit there
 All states have invoked long arm statutes.
o Some states have allowed them to reach as far as the
Constitution allows (so long as it meets the requirements of
Due Process)
o Other states have allowed them to restrict jurisdiction to
specified occurrences.
 Gibbons v. Brown
 Synopsis: Mr. and Mrs. Brown and Ms. Gibbons were driving in
Montreal, Canada when they were in an accident. Gibbons, a TX
resident, sued Mr. Brown in FL for her injuries. Two years later
Mrs. Brown brought this action trying to sue Gibbons in FL
alleging that Gibbons negligently caused the collision. The FL long
arm statute provided that “a defendant who is engaged in
substantial and not isolated activity w/in the state is subject to the
jurisdiction of the courts of the state, whether or not the claim
arises for that activity.”
 Rule: Obtaining in personam jurisdiction over a non-resident
defendant in a civil action requires a two-pronged showing: (1)
plaintiff must allege sufficient jurisdictional facts to bring
defendant within coverage of state's long-arm statute, and (2) court
must inquire whether sufficient minimum contacts are shown to
comply with the requirements of due process.
 Holding: The state’s long arm statute requires that a defendant be
“engaged in substantial activity.” The fact that Gibbons had
previously sued Mr. Brown in the forum state for injuries related to
the collision does not constitute engagement in substantial activity.
The actions were filed two years apart, and prior suit did not even
name plaintiff as a party.
 Note: The court does not even look at whether her activity was
substantial and not isolated b/c she is not presently engaged in any
activities other than defending the current suit.
o Determining Personal Jurisdiction:
 First, look to the state’s long arm statute; is it satisfied?
 If not, then the analysis stops – there cannot be jurisdiction.
 If yes, then proceed
 Second, determine whether it is a case of specific or general jurisdiction
and whether there are sufficient minimum contacts:
 Specific Jurisdiction: Does the cause of action arise out of the
contacts?
 o If yes, need only minimum contacts such that it would not
offend fairness to make D defend in the forum
 Voluntary / Directed / Purposeful acts by the
defendant toward the forum
 Foreseeable that the defendant would anticipate
being haled into court upon the contacts
o If no, then you must look to see if there is a basis for
general jurisdiction.
 General Jurisdiction:
o If the defendant is a corporation with its place of
incorporation or principle place of business in the forum
state, then there will always be general jurisdiction
(jurisdiction is presumed to be fair)
o If the defendant is an individual with his/her place of
domicile in the forum state there will always be jurisdiction
(jurisdiction is presumed to be fair)
o If neither of the above applies, the defendant’s contacts
must be continuous, substantial, and systematic so as to
justify bringing suit against the defendant on any cause of
action.
 Third, balance the contacts with the five fairness factors:
 The burden on defendant: benefits and burdens
 The forum state’s interest
 The plaintiff’s interest in having case heard in the forum and the
existing alternative forums
 The interstate judicial system’s interest in efficient resolution
 The shared interest of the states in furthering substantive social
policies

NOTICE
- Mullane v. Central Hanover Bank & Trust Co.
o Synopsis: The Central Hanover Bank and Trust Company petitioned the
Surrogate’s Court for judicial settlement of its accounts as trustee of a common
trust fund established under the New York Banking Law. The only notice given
was by publication in a local newspaper, as required by NY law. Mullane was
appointed special guardian and attorney for certain persons known or unknown
not otherwise appearing and appeared specially, objecting that notice was
inadequate under the Due Process Clause.
o Rule: Notice must be reasonably calculated (reasonably certain) under all the
circumstances to apprize interested parties of the pendency of the action and
afford them an opportunity to present their objections in order to meet the
requirements of due process.
o Rule: Where conditions do not reasonably permit such notice, the form of notice
chosen may not be substantially less likely to bring home notice than any other of
the feasible and customary substitutes
 o Rule: Notice by publication may be valid as a customary substitute where (1) it
is not reasonably possible or practicable to give more adequate warning; (2) it is
supplemental to another form of notice; or (2) the interests involved are
hypothetical.
o Holding: The statutory notice by newspaper publication was sufficient as to the
beneficiaries whose interests or whereabouts could not, with due diligence, be
ascertained. Notice was also sufficient as to those whose interests were
conjectural or future or did not in the due course of business come to the
knowledge of the trustee. However, the notice was insufficient with respect to
known present beneficiaries of a known place of residence.
- Federal Rule 4. Summons:
o Form: The summons shall
 Be signed by the clerk
 Bear the seal of the Court
 Identify the court and the parties
 Be directed to the defendant
 State the name and address of plaintiff’s attorney
 State the time which the defendant is to appear
 Notify the defendant that failure to appear = default judgment
o Service with Complaint
 The summons shall be served w/ a copy of the complaint
 Must be served by a non-affiliated person at least 18 years-old. If court
directs, service can be by U.S. Marshall
o Waiver of Service
 A plaintiff can solicit a waiver by sending a defendant the complaint, 2
copies of the notice of the action and request that defendant waive formal
service of summons and complaint upon him.
 Waiver of service is expected if the defendant is:
 An individual w/in a judicial district of the US
 An individual in a foreign country
 A corporation or association
 However, it is impermissible to obtain a waiver from a defendant who is:
 An infant or an incompetent
 The US or any of its agencies, corp. and officers
 A foreign, State, or local government
 A defendant who waives service does not waive any objection to the
venue or jurisdiction
o Duty to Save Costs
 A defendant who receives notice has a duty to avoid unnecessary costs of
serving the summons.
 The defendant will be required to pay the costs of subsequent service if he
has w/o good cause refused to waive service of process.
 On the other hand, a defendant will be given additional time to answer the
complaint if they do waive service – extending the time from 20 to 60
days for domestic defendants and from 20 to 90 for foreign defendants
 o Service upon Individuals: Service upon an individual from whom a waiver has
not been obtained and filed may be effected in any judicial district of the US
 Pursuant to the law of the state in which the court sits or in which the
service is effected (Ex. A lives in ME and sues B, who lives in NY, in ME.
A can serve B according to NY rules since it’s the state where service is
effected), or
 By personally delivering the summons to the individual, or
 By leaving copies of summons and the complaint at his dwelling house or
usual place of abode with a person of suitable age and discretion residing
therein, or
 By delivering papers to an agent appointed by the defendant to receive
service of process on his behalf
o Service upon Corporations and Associations: Service upon a corporation or
association from whom a waiver has not been obtained and filed may be effected
in any judicial district of the US
 In any of the ways permissible for service upon individuals, or
 By delivering the summons and complaint to an officer, managing, or
general agent of defendant, or agent authorized to receive service of
process; or
 By any method prescribed by state law as to a corporation
o Territorial Limits of Effective Service
 Service of summons or filing a waiver of service is effective to establish
jurisdiction over a defendant who could be subjected to the jurisdiction of
a court of general jurisdiction in the state in which the district court is
located – Must look at the state statutes in which the court sits
 In federal question cases only, the federal courts may exercise jurisdiction
over a defendant who may not have sufficient contacts in any one state,
but may have sufficient aggregate contacts throughout the country.

VENUE
- In General:
o Subject Matter Jurisdiction: Tells you whether a federal court can exercise
jurisdiction over the case.
o Personal Jurisdiction: Tells you whether a certain state can exercise jurisdiction
over the defendant.
o Venue: Tells you which district court in the state may hear the case.
o If the court that has power over the subject matter and the state has personal
jurisdiction, the question then becomes which district may the action be brought
in?
- 28 U.S.C. 1391: Venue Generally
o 28 U.S.C. 1391(a): Jurisdiction Founded Solely on Diversity.
 Venue will lie in any district where any defendant resides, so long as all
defendants reside in the same state
 Venue will lie in any district in which a substantial part of the events or
omissions giving rise to the claim occurred or where a substantial part of
the property that is the subject of the action is situated.
  Venue will, also, lie in any district in which any defendant is subject to
personal jurisdiction, but only if neither of the above apply.
o 28 U.S.C. 1391(b): Jurisdiction Not Founded Solely on Diversity.
 Venue will lie in any district where any defendant resides, so long as all
defendants reside in the same state
 Venue will lie in any district in which a substantial part of the events or
omissions giving rise to the claim occurred or where a substantial part of
the property that is the subject of the action is situated.
 Venue will, also, lie in any district in which any defendant may be found,
but only if neither of the above apply.
o 28 U.S.C. 1391(c): Corporate Defendants.
 For the purposes of determining venue, and venue only, a corporate
defendant is said to reside in any judicial district in which it is subject to
personal jurisdiction
 If there is more than one judicial district, the corporation will be deemed
to reside in any district in which its contacts would be sufficient to subject
it to personal jurisdiction if that district were a separate state.
 If there is no such district, the corporation will be said to reside in the
district within which it has the most significant contacts.
o 28 U.S.C. 1391(d): Aliens.
 An alien may be sued in any district.
- Dee-K Enterprises, Inc. v. Heveafil Sdn. Bhd.
o Synopsis: Two American buyers of extruded rubber thread imported from
Thailand, Malaysia, and Indonesia filed an antitrust conspiracy action against the
foreign producers and American distributors
o Rule: Title 28, Section 1391(d) of the United States Code, which provides that
aliens may be sued in any district, overrides any special venue statute (Va. Statute
laid venue in any district where defendant is found or where it transacts business).
o Rule: As to American defendants, Title 28, Section 1391(b) makes venue proper
in a judicial district in which any defendant may be found, so long as there is no
other district in which the action may otherwise be brought.
o Holding: Venue was appropriate for the foreign defendants b/c Title 28, Section
1391(d) of the United States Code overrode the Va. special venue statute. Venue
for the American defendants, however, could not be determined b/c several of
them contended that their Va. contacts were in the Western District. Plaintiffs
must show venue in the E.D. Va. is proper, or the action may be transferred to the
W.D. Va.

FEDERAL TRANSFER AND FORUM NON CONVENIENS

- 28 U.S.C. 1404: Change of Venue.
o For the convenience of parties and witnesses, in the interest in justice, a district
court may transfer any civil action to any other district or division where it might
have been brought.
o May be requested by either the plaintiff or the defendant
- 28 U.S.C. 1406: Cure or Waiver of Defects.
 o The district court of a district in which is filed a case laying venue in the wrong
division or district shall dismiss the case.
o However, if it be in the interest of justice, the court may transfer the case to any
district or division in which it could have been brought.
- 28 U.S.C. 1631: Transfer to Cure Want of Jurisdiction.
o Where the court finds an action or appeal to be in want of jurisdiction, it shall, if
in the interest of justice, transfer such action or appeal to another court in which it
could have been brought
- Forum Non Conveniens
o The Forum Non Conveniens Doctrine is a common law doctrine which allows a
court, that has jurisdiction over a case, to decline to hear the case out of fairness to
the parties if there is another court available which would be more convenient
o It does not result in a transfer; it results in a dismissal of the case.
o The doctrine is only available to defendant; however, the plaintiff may still re-file
- Piper Aircraft v. Reyno
o Synopsis: A wrongful death action, stemming from airplane crash in Scotland,
was brought in California state court against a Pennsylvania plane manufacturer
and Ohio propeller manufacturer. The action was removed to federal district court
which, in turn, transferred the suit to Pennsylvania. The Penn. District Court
dismissed the action on ground of forum non conveniens, and plaintiff appealed.
o Rule: Forum non conveniens determination is committed to sound discretion of
trial court, and it may be reversed only when there has been clear abuse of
discretion; where district court has considered all relevant public and private
interest factors and where its balancing of those factors is reasonable, its decision
deserves substantial deference.
o Private “Interest factors”
 Ease of access to sources of proof
 Availability of forcing unwilling witnesses
 Cost of obtaining willing witnesses
 Possibility of view of premises, if appropriate
 Any other practical problems
o Public “Interest factors”
 Administrative difficulties flowing from court congestion
 Local interest in settling local disputes
 Trial of a diversity case that is at home with the law that must govern the
action
 Avoiding unnecessary problems with a conflicting laws or the application
of foreign laws
 Unfairness of burdening citizens in an unrelated forum with jury duty
o Rule: Plaintiffs may not defeat a motion to dismiss on ground of forum non
conveniens merely by showing that substantive law that would be applied in an
alternative forum is less favorable to plaintiff than that of the present forum.
o Holding: There is no danger that, in the Scottish Courts, the defendants will be
deprived of any remedy or treated unfairly. It cannot be said that Scottish law
would be so clearly inadequate or unsatisfactory that the plaintiffs would have no
remedy at all. Furthermore, there would be fewer evidentiary problems if the case
 was tried in Scotland and Scotland has a very strong interest in the litigation. The
Dist. Ct. decision is affirmed.

END OF PART I
Civil Procedure I
Professor Susan L. Brody
Spring 2007
Review # 1
WHERE CAN SUIT BE BROUGHT?
I. Subject matter jurisdiction (May the suit be brought in a federal court?)
a. Constitution: Article III, sec. 2 (the basis for federal subject matter jurisdiction)
b. Statutes: 28 U.S.C., secs 1331, 1332 (legislative implementation of federal
jurisdiction
c. 1331: Arising Under (what does it mean for a case to ‘arise under’ federal
law…)
d. 1332: Citizenship and amount in controversy
i. citizenship: individuals (what does citizenship mean?)
ii. citizenship: corporations (1332 (c)) (what does citizenship mean?)
iii. amount in controversy ( review p.204-05 in case book and recent USSC
case Exxon Mobil Corp v. Allapattah) in supplement.
e. Supplemental Jurisdiction: 28 U.S. C. sec. 1367 (can a case with a non federal
claim be heard with a federal one if they are part of the same ‘case?’ can a claim
that joins a party that is not within federal subject matter jurisdiction be heard
with a federal claim?)
f. Removal: 28 U.S. C., sec. 1441, 1446 (may the suit be moved from a state court
to a federal one?)
II. Personal Jurisdiction (whether a federal or a state court can hear the case, which states
can exercise power over the defendant(s) so that a judgment against him/her/them will be
fair under the Constitution)
a. Constitution: (1) 14th amendment; (2) full faith and credit clause (art IV)
b. Traditional Bases
i. individuals:
1. presence/service with process in the forum (and renewal in
Burnham) (note this gives general jurisdiction)
2. domiciliary of forum (note this gives general jurisdiction)
3. consent
ii. corporations:
1. place of incorporation (note this gives general jurisdiction)
2. place of principal business (note this gives general jurisdiction)
3. consent
iii. Long Arm Statutes
1. due process type – full limits/outer boundaries of due process
2. laundry list type or other restrictions – less than outer boundaries
of due process
a. is one of the acts satisfied?
b. Or is the quality and nature restriction satisfied?
c. Irrespective of what basis, is exercise constitutional under the due process
clause ?(International Shoe and progeny)
i. Contacts in forum: does the cause of action arise out of the contacts? If
yes, need only minimum contacts such that it would not offend fairness to
make D defend in the forum. If cause of action does not arise out of the
contacts, look to see if you have a basis for general jurisdiction. (see a. and
b. below)
 1. Are acts in the forum of quality and nature to justify GENERAL
JURISDICTION? ( Recall some of the traditional bases always
give rise to general jurisdiction: for corporation, place of
incorporation or principal place of business; for individuals, place
of domicile; but, if none of these exist, are the contacts
‘continuous, substantial, and systematic’ so as to justify bringing
suit against the defendant on any cause of action? Then balance the
contacts using fairness factors in analyzing jurisdiction.
2. Or does cause of action arise out of contacts (SPECIFIC
JURISDICTION)
a. Are acts voluntary, purposeful and directed toward the
forum?
b. Would defendant anticipate being haled into court based
upon the contacts?
ii. Fairness factors: if jurisdiction is general based on principal place of
business or place of incorporation or domicile for an individual, presume
fairness. But if general jurisdiction is based on continuous, substantial, and
systematic contacts, or if jurisdiction is specific based on minimum
contacts, then balance contacts with fairness factors:
1. burden on defendant: benefits and burdens
2. Forum’s interest
3. plaintiff’s interest in having case heard in forum and alternative for
a
4. interstate judicial system’s interest in efficient resolution
5. will jurisdiction further shared interest of the states furthering
substantive social policies
III. Notice
a. Constitutional requirement (Mullane): notice reasonably calculated to apprise
interested parties and if not possible the form chosen is not substantially less
likely to bring home notice than any of the other feasible substitutes
b. FRCP 4 (preference for waiver for individuals inside and outside U.S. and for
corporations and associations. Highlights of FRCP 4: how a waiver must be
requested; what the sanction is if an individual, corporation or association does
not waive; how defendants are served if no waiver is obtained; and the limits on
territorial service)
IV. Venue: 28 U.S. C. 1391 (a) (b) (c) (d) (remember, which venue section depends first,
upon the type of subject matter jurisdiction, diversity or federal question; then for each
of those, if your basis for venue is ‘residence’ ( either (a) (1) or (b) (1)) AND you have a
corporate defendant, you must look to (c) to determine where a corporation is a ‘resident’
for purposes of the venue statute. )
V. Forum non conveniens and Federal Transfer (28 U.S.C., sec 1404, 1406, 1631)
a. fnc: judicial doctrine to decline J; available only to defendant; State and
Federal; results in dismissal; plaintiff must refile
b. 1404 transfer: statute; federal courts only; no dismissal; transfer to another
district only; available to plaintiffs as well;
 c. 1406 transfer: from a district in which venue is improper; here dismissal is
allowed.
d. 1631 transfer: from a district in which jurisdiction is lacking but which had
proper venue

BEGINNING OF PART II

THE ERIE PROBLEM

- State Courts as Lawmakers in a Federal System
o 28 U.S.C. 1652: The Rules of Decision Act.
 The laws of the several states, except where the Constitution or treaties of
the US or Act of Congress otherwise require or provide, shall be regarded
as rules of decision in civil actions in the courts of the US, in cases where
they apply.
o Swift v. Tyson
 Synopsis: There was an agreement b/n two parties, and the issue was
whether this agreement should be treated like a contract or more like a
check. If it was more like a check, the defendant would be subject to a
very limited number of defenses. However, NY courts had spoken on the
issue, ruling that bills were more like contracts and therefore subject to a
number of defenses.
 Rule: The meaning of “laws of the several states” in The Rules of
Decision Act does not apply to laws created by judicial decision; they only
apply to state statutory law. Therefore, federal courts are free to ignore
state common law.
 Holding: The federal court, reaching a different conclusion than that held
by the NY courts, ruled that the agreement should be treated more like a
check.
 Note: For many federal courts Swift became a charter for judicial
independence, a declaration that they could ignore state law even when
sitting in cases that were not explicitly governed by federal law.
o Erie Railroad v. Tompkins
 Synopsis: Tompkins was walking along the tracks of the Erie Railroad in
Penn. A train passed, and an open door on a refrigerator car struck him
and knocked him partially under the train. Tompkins brought a negligence
suit in the SDNY Court based on diversity of citizenship. The Erie RR
argued that the court should adopt Penn. Law, which would require
wanton negligence to establish liability. Instead, the judge, relying on the
freedom given by Tyson v. Swift, instructed the jury that based on general
law the RR would be liable even if it was guilty of ordinary negligence.
Rule: There is no federal general common law and Congress has no power
to declare substantive rules of common law applicable in a state, whether
they be local or general in nature, be they commercial law or apart of the
law of torts.
 Rule: The phrase "laws of the several states," as used in statute requiring
federal courts to apply laws of the several states except in matters
 governed by federal Constitution or statutes, includes not only state
statutory law, but also state decisions on questions of general law.
 Holding: The doctrine of Swift v. Tyson, allowed Federal courts to
exercise jurisdiction on ground of diversity of citizenship in matters of
general jurisprudence without applying the unwritten law of the state as
declared by its highest court. They were free to exercise an independent
judgment as to what the common law of a state is or should be. This
introduced grave discrimination by noncitizens against citizens and
prevented uniformity in the administration of the law of a state. Therefore,
abandonment of the doctrine was required and Penn. common law must be
applied.
 Notes:
 Penn. law was applied, rather than NY law, b/c NY’s conflict laws
(statute) provided that “in a tort action, the law of the state in
which the tort occurred shall be applied.”
 Erie established that federal courts sitting in a diversity action were
bound to replicate state practice in some circumstances.
 What are those circumstances? Erie suggested that at the very
least federal courts sitting in diversity should observe state
substantive law.
- The Limits of State Power in Federal Court
o Guaranty Trust Co. v. York
 Synopsis: P sued a bond trustee in a federal diversity action alleging
misrepresentation and breach of trust. NY substantive law governed and D
invoked the NY statute of limitations. P argued that the statute of
limitations did not bar the suit b/c it was on the “equity side” of federal
court.
 Rule: Where there is a conflict of federal and state law in a federal
diversity action and the application of the federal law would affect the
outcome of the litigation, state law must be applied regardless of what it is
labeled (procedural or substantive).
 Holding: In all cases where a federal court is exercising jurisdiction
solely based on diversity of citizenship, the outcome of the litigation in the
federal court should be substantially the same. It is immaterial whether
statutes of limitation are characterized either as substantive or procedural.
If they are outcome determinative, state law must apply.
 Note: B/c just about everything could be considered outcome
determinative, state laws (procedural or substantive) were almost always
upheld following Guaranty, regardless of whether they conflicted with
federal practices or federal rules of civil procedure.
o Byrd v. Blue Ridge Rural Electric Cooperative
 Synopsis: P, employed by an independent contractor, was injured while
on a construction job for D and sued in tort. D contended P was doing the
same work as D’s regular employees and therefore was a “statutory”
employee whose exclusive remedy was under the S.C. Workmen’s Comp.
Under S.C. law, issues of immunity are to be decided by the judge not by
 the jury. This conflicted with the federal practice of assigning disputed
questions of fact to the jury.
 Rule: If the source of conflict is between a state law and a federal practice
(one not grounded in federal rule of civil procedure), then the courts must
apply a three prong test:
 If the state law is bound up with the definition of the rights or
obligations of the parties, e.g., if the particular law so inextricable
from the right created by the state that it is part of that right, then
state law must apply.
 If the state law is not bound up, then the court must look to the
outcome determinative test: If applying the federal law would
affect the outcome of the litigation, then state law may apply.
 However, even if the outcome determinative test is satisfied,
federal law may still be applied if there are affirmative
countervailing considerations of federal judicial administration
present.
 Holding: The rule that the judge decides workers comp cases is not bound
up in the workers comp statute; it is merely the form and mode of carrying
out the statute. Although there may be possibility that applying the federal
practice would affect the outcome, the likelihood is not substantial enough
to warrant allowing the state rule to disrupt the strong federal policy in
favor of allowing questions of fact to go to the jury.
- De-Constitutionalizing Erie
o 28 U.S.C. 2072: The Rules Enabling Act.
 The Supreme Court shall have the power to prescribe general rules of
practice and procedure and rules of evidence for cases in the US district
courts and courts of appeals.
 Such rules shall not abridge, enlarge, or modify any substantive right.
o Hanna v. Plumer
 Synopsis: The case arose out of a diversity action for personal injuries
received in a car accident. The defendant was the estate of one of the
drivers involved. The issue arose b/c Mass. law provided that suits
required personal service of process on the executor of the estate. Process
was instead served under Rule 4(d)(1), which allowed for the summons
and complaint to be left with a competent adult at the residence of the
defendant.
 Rule: If the source of conflict is between state law and a federal rule of
civil procedure, the courts must apply a two prong test:
 Whether the initial delegation in the Rules Enabling Act was
constitutional: This will always be yes.
 Whether the particular rule being considered was properly enacted
because it was within the scope of the Rules Enabling Act: If it is
a rule of practice and procedure and does not abridge or modify a
substantive right, then it is valid under the REA.
If these tests are satisfied, the federal rule must be applied even if it differs
from the state practice in a significant way.
  Rule: If the source of conflict is between state law and a federal practice,
circumstances may warrant a test different than that set out in Byrd:
 If the difference between the state and federal rule will lead a party
to pick one or the other forum (it must be substantially certain at
the beginning of the lawsuit), then state law must apply.
 If applying one or the other leads to inequitable administration of
the laws (patterns of federal practice that over time would regularly
result in different applications of what is nominally the same
substantive law), then state law must apply.
 Holding: The adoption of Rule 4(d)(1), designed to control service of
process in diversity actions, neither exceeded the congressional mandate
embodied n the Rules Enabling Act nor transgressed constitutional
bounds. The Rule is therefore the standard which the district court should
have measured the adequacy of service.
 Note: Hanna did not overrule the Byrd test; it merely suggested a
different approach to addressing conflicts b/n state law and federal
practice – courts often look to both.
- Avoiding and Accomodating Erie
o Burlington Northern RR v. Woods
 Synopsis: FRCP 38 provides that federal courts will penalize parties for
frivolous appeals. The state court in Alabama said a D would have to pay
a 10% penalty on an unsuccessful appeal.
 Holding: Using the Hanna analysis, the court determined that the federal
rule prevailed b/c it was constitutional and conformed with the Rules
Enabling Act the federal law applied
o Stewart Organization v. Ricoh
 Synopsis: The case involved a contract containing a forum selection
clause designating NY as the forum. P brought action in AL, where such
clauses are not enforceable. D attempted to invoke 28 U.S.C. Section 1404
(Federal Transfer statute) and have the case transferred to NY.
 Holding: In an attempt to accommodate Erie, the court suggested that the
state’s policy against enforcing forum selection clauses should be
considered. However, the court ultimately rejected the state law b/c it
conflicted with a valid federal procedure, even though that procedure was
not found in a Rule but rather in a federal statute.
o Note: These two cases suggest that the Supreme Court will reach rather far to
find an applicable federal law covering a situation in an attempt to avoid the
burden of performing an Erie Analysis.
o Gasperini v. Center for Humanities
 Synopsis: NY law provided that the courts could take a decision away
from the jury if it decided that a damages award was excessive, so long as
the verdict materially deviated from that which a reasonable person would
award. However, the 7th Amendment Re-Examination Clause provides that
no fact tried by jury shall be re-tried in the courts.
 Holding: In an attempt to accommodate both interests, the court allowed
the trial judge to look at the award and see if it materially deviated and
 change it if it did. The court then ordered that on appeal, the appellate
court only be allowed to review it for lack of discretion.
o Note: This case illustrates an example of where the court stretched the rules of
federal procedure in an attempt to avoid the burden of performing an Erie
Analysis.
- Determining the Scope of State Law
o If there is no precedent on point or if the only available precedent is some years
old, and the area of law has recently shown signs of change, the court may look to
other state courts to see what they have done in similar circumstances.
o The court may also ask the State Supreme Court for certification – an answer to a
question about state law. There are several defects to this process:
 The state must have certification procedure in place, and
 Even when the procedure is available and is used, the results are not
always satisfactory.

END OF PART II
Civil Procedure I
Professor Susan L. Brody
Spring 2007
Review # 2

THE ERIE PROBLEM: AN APPROACH

I. Can you avoid Erie analysis or accommodate both Erie/federal interest and State interest?
(i.e, is there any way to construe the differences between State and Federal law or the
breadth of the applicable Federal law so as to avoid or accommodate Erie?) (Recall
Burlington Northern, Stewart, Gasperini, Semtek, Houben)
a. If you can avoid or accommodate Erie, decide whether Federal law controls or
whether it is possible to accommodate both federal and state law.
b. If you cannot avoid Erie or accommodate both interests, decide what type of
conflict there is, based on the source of the federal law, and apply the rules below
II. Is the conflict between a federal statute and state law?
a. If so, ask whether the statute is constitutional;
b. If yes, apply it
III. Is the conflict between a federal rule of civil procedure (or federal rule of appellate
procedure or federal rule of evidence) and state law?
a. If so, ask whether the initial delegation in the Rules Enabling Act was
constitutional (this will always be yes under Sibbach); and then ask
b. Whether the particular rule being considered was properly enacted because it was
within the scope of the Rules Enabling Act (28 USC, § 2072)(no case has ever
held that a rule is beyond the scope of the Rules Enabling Act); but consider:
i. whether the rule promulgated under the authority of the REA in fact fits its
description as a rule of practice and procedure; (2072 (a)) and
ii. whether the rule abridges or modifies a substantive right (2072 (b))
iii. Notes:
1. If it is a rule of practice and procedure and doesn’t abridge or
modify a substantive right, then it is valid under the REA.
 2. If these tests are satisfied, the federal rule must be applied even if it
differs from the state practice in a significant way.
IV. If the conflict is between a federal practice (i.e. a rule not grounded in a federal rule of
civil procedure) and state law, then there are two analyses possible:
a. Under Byrd analysis:
i. Is the state law bound up with the definition of the rights or obligations of
the parties? (is the particular law so inextricable from the right created by
the state that it is part of that right? To help, recall examples with
wrongful death damages and medical malpractice cases) If yes, the state
law should prevail; If no, then ask
ii. Even if the state law is not bound up with the substantive rights and
obligations, would its application nevertheless determine the outcome of
the case? If no, apply federal law; but if yes, apply state law but then ask
iii. Are there affirmative countervailing considerations of federal judicial
administration present? If yes, apply the federal practice.
b. Under Hanna analysis:
i. Would the difference between the state or federal rule lead a party to pick
one or the other forum, i.e., forum shopping? (seeking a court that will be
most hospitable to clients claims or defenses; since you can say yes to
almost anything, it may be easier to ask whether the differences are
significant enough to cause forum shopping at the beginning of the
lawsuit)
ii. Would applying one or the other lead to inequitable administration of the
laws (patterns of federal practice that over time would regularly result in
different applications of what is nominally the same substantive law)
iii. Notes: If either 1. or 2. is yes, state law prevails.
c. Notes: Hanna did not overrule Byrd. Both cases suggest an approach to a federal
practice not controlled by a federal statute or Rule. Courts often use both.
V. Other Considerations:
a. What if federal court cannot determine what state law is? If it is uncertain what
the state law is, Federal courts must do their best to decide what the state courts
would do.
b. Certification – process in state whereby federal court asks state court for an
answer to a question about state law. But the state must have a certification
procedure in place.

BEGINNING OF PART III

JOINDER
- Joinder of Claims by Plaintiff
o Historical Background
 Two actions based on the same writ could be brought together, even if
they were factually unrelated
 However, two actions based on different writs could not be brought
together, even if they arose from the same incident.
o Federal Rules
 Federal Rules changed all of this: They eliminated all barriers to joinder
of claims by a plaintiff.
 Federal Rule 18:
 Joinder of Claims. A party asserting a claim to relief as an
original claim, counterclaim, cross-claim, or 3rd party claim may
join any and all claims against a single defendant.
 Joinder of Remedies. Whenever a claim is one which cannot be
determined until another claim has been prosecuted to a
conclusion, the two claims may be joined in a single action.
 Rule 18 permits joinder; it does not compel it.
o Joinder and Jurisdiction
 In order to join a claim a court must have subject matter jurisdiction over
it.
 28 U.S.C. 1331: The claim arises under federal law.
 28 U.S.C. 1332: There is diversity and the amount in controversy.
 28 U.S.C. 1367: Supplemental jurisdiction, which depends on
three variables:
o The basis of original jurisdiction over the case
o The identity of the party – plaintiff or defendant – seeking
to invoke supplemental jurisdiction
o The rule authorizing the joinder of the party or claim over
whom supplemental jurisdiction is sought
 Notes and Problems (pp. 733-34):
 A, a citizen of IL, sues B a citizen of IL, alleging that B violated
federal civil rights statutes in firing her. A seeks to add a state law
claim. Is there supplemental jurisdiction?
o Rule 18: Plaintiff can join as many claims as she wishes
o No diversity  must look at nucleus of facts, do they give
rise. §1367(a)
o Yes, they arise under the same facts
 A, a citizen of IL, sues B a citizen of IL alleging that B violated
federal civil rights statutes in firing her. A seeks to join a claim that
B caused injuries by backing into A in the company parking lot
o Rule 18: Plaintiff can join as many claims as she wishes
o No diversity  must look at nucleus of facts, do they give
rise. §1367(a)
o No, they don’t arise under the same facts
 A, a citizen of IL, sues B a citizen of IL, alleging that B violated
federal civil rights statutes by permitting sexual harassment. A
seek to join C, the co-worker who engaged in the harassing
behavior.
o Assuming Rule 20 is satisfied
o Question arises under federal law  §1367(a) allows for
additional parties
  A, a citizen of IL, sues B a citizen of WI for a breach of
employment contract seeking an excess of $75,000. A seeks to join
C a citizen of IL alleging conspiracy (assume same nucleus of
facts)
o §1367(a) is satisfied; same nucleus of fact
o Claim is not a federal question; it is based solely on
diversity  look at §1367(b)
o Plaintiff cannot bring a party in under 14, 19, 20, or 24 (the
plaintiff is invoking Rule 20). Furthermore, adding the
party will destroy diversity.
- Joinder of Claims by Defendant: Counterclaims
o Common Law: There were no rules governing claims which a defendant might
have against a plaintiff.
 A defendant who had such a claim could bring a separate suit; or
 In a limited number of cases the defendant could set off his claim against
the plaintiff’s, e.g., reduce the plaintiff’s recovery, but could not himself
recover in the original action.
o Federal Rule 13: Counterclaim and Cross-Claim
 Compulsory Counterclaims: A defendant must bring a counterclaim if it
arises out of the same transaction or occurrence that is the subject of the
plaintiff’s claim; he cannot bring it in another lawsuit.
 Limitations:
 The counterclaim must exist at the time the plaintiff sues
 The counterclaim cannot be the subject of a pending action in
another court.
 Permissive Counterclaims A defendant may be allowed to bring any
counterclaim against a plaintiff, even if it does not arise out of the same
transaction in occurrence.
 Cross-Claim Against a Co-Party: A pleading may state as a cross claim
any claim by one party against a co-party arising out of the transaction or
occurrence that is the subject matter either of the original claim or of a
counterclaim therein or relating to any property that is the subject matter
of the original transaction.
 Joinder of Additional Parties: Persons other than those made parties to
the original action may be made parties to a counterclaim or cross-claim in
accordance with the provisions of Rules 19 and 20.
o Plant v. Blazer Financial Services
 Synopsis: Plant, a debtor, brought action under the federal Truth in
Lending Act and Blazer Financial, the creditor, filed counterclaim to
recover the underlying debt. The District Court entered judgment in favor
of the debtor on the truth in lending claim and in favor of creditor on the
counterclaim. Plant appealed arguing that supplemental jurisdiction should
not apply to Blazer Financials’ counterclaim.
 Rule: A permissive counterclaim must have an independent jurisdictional
basis (supplemental jurisdiction will never apply) while a compulsory
counterclaim will necessarily fall within the supplemental jurisdiction of
 the federal courts, even if it would ordinarily be a matter for state court
consideration.
 Rule: A counterclaim is compulsory if it arises out of the transaction or
occurrence that is the subject matter of the plaintiff’s claim.
 Rule: Four tests for determining whether a claim and counterclaim arise
from the same transaction:
 Whether there is a logical relation between the claim and the
counterclaim
 Whether the issues of fact and law raised by the claim and
counterclaim are largely the same
 Whether res judicata bar a subsequent suit on defendant’s claim
absent the compulsory counterclaim rule
 Whether substantially the same evidence supports or refutes the
plaintiff’s claim as well as defendant’s counterclaim
 Holding: In a Truth in Lending Act action, a counterclaim for the
underlying debt in default is a compulsory counterclaim. Truth in Lending
claims can be brought in either state or federal court. To the extent this
dual jurisdiction was intended to permit litigation of Truth in Lending
claims in actions on the debt, it reflects a purpose that the debt claim and
the Truth in Lending claim be handled together. Had Congress intended to
insulate recovery in Truth in Lending actions in federal court from the
counterclaims of creditors it could have easily done so.
o Arguments against allowing a counterclaim to a Truth in Lending action to
be compulsory:
 Allowing it may open the flood gates: every time someone brings a Truth
in Lending action there will be a counterclaim on the debt.
 The counterclaims may exceed the damages sought under the Truth in
Lending Act: parties will be reluctant to bring Truth in Lending actions,
hence, defeating the purpose of the statute
 The claims do not actually arise from the same transaction or occurrence:
Logical relationships exist when the same aggregate of operative facts
serve as the basis of both claims
 The borrower’s claim deals w/ facts relating to the creditor being
dishonest
 The creditor’s debt claim, however, deals with facts relating to
borrower’s default
- Joinder of Parties
o By Plaintiffs
 Federal Rule 20:
 Permissive Joinder of Parties: All persons may join in one
action as plaintiffs/defendants if
o They arise from the same transaction or occurrence or the
same series of transactions or occurrences; and
o The claims involve a common question of law or fact.
  Separate Trials: The court has the discretion to order separate
trials or make such other orders as will prevent delay or prejudice.
See also Federal Rule 42(b).
 Federal Rule 21: Misjoinder and Nonjoinder of Parties
 Misjoinder/Nonjoinder are not grounds for dismissal of an action
 Parties may be added or dropped on motion of any party or by the
court’s own initiative at any stage of the action and on such terms
as are just.
 Federal Rule 42:
 Consolidation: When actions involving a common question of
law or fact are pending before the court, it may order a joint
hearing or trial of any or all matters in issue in the actions.
 Separate Trials: The court in furtherance of convenience or to
avoid prejudice, or when separate trials will be conducive to
expedition and economy, may order a separate trial on any claim
 Mosley v. General Motors Corp.
 Synopsis: Ten plaintiffs brought action individually and as class
representatives alleging that their guaranteed rights (§1981) were
denied by GM (and Fisher Body, Chevrolet Division, and the
Union ) by reason of racial discrimination in employment
practices. The District Court ordered the joint actions to be severed
and each plaintiff was directed to bring a separate action based
upon his complaint, duly and separately filed.
 Rule: The purpose of Federal Rule 20 is to promote trial
convenience and expedite final determination of disputes thereby
preventing multiple lawsuits. The impulse is toward entertaining
the broadest possible scope of action consistent with fairness to the
parties.
 Rule: All logically related events entitling a person to institute
legal action against another generally are regarded as comprising a
single transaction or occurrence; absolute identity of all events is
unnecessary.
 Rule: Although the actual effects of a discriminatory policy may
vary throughout a class, if its existence threatens the entire class it
will be considered a question of fact common to all the members of
the class.
 Holding: Each of the 10 plaintiffs alleged that he had been injured
by the same general policy of discrimination on the part of GM and
the Union  sufficiently related to constitute arising out of the
same transaction or occurrence. Each of the plaintiffs was wronged
by that policy and the conduct is basic to each plaintiff’s recovery
 common question of law or fact, therefore, all Plaintiff’s are
joined in the same suit.. The fact that each plaintiff may have
suffered different effects is immaterial.
 Note: The district court held that all the plaintiffs really had in this
case was a common defendant; typically this is a “no go” on
 joinder. However, cases brought under Title VII of the Civil Rights
Act do tend to see a more lenient interpretation of the joinder
requirement (not w/o controversy).
o By Defendants: 3rd Party Claims
 Federal Rule 14:
 When Defendant May Bring In 3rd Party
o A defendant may bring in a 3rd party to share in its liability
 Defendant becomes the 3rd party plaintiff
 The 3rd party becomes the 3rd party defendant
o There must be legally cognizant relationship between the
original defendant and the 3rd party defendant
o The 3rd party defendant’s liability to the original defendant
must be the same as the defendant’s liability to the plaintiff.
o The 3rd party defendant may assert any claim against the
plaintiff arising out of the same transaction or occurrence
that is the same subject matter of the plaintiff’s claim
against the original defendant
o The plaintiff may assert any claim against the 3rd party
defendant arising out of the same transaction or occurrence
that is the same subject matter of the plaintiff’s claim
against the original defendant
o The 3rd party can bring any causes of action (counter
claims, affirmative defenses, motion to dismiss) within 10
days of being served, otherwise must ask of a leave of
court.
 When Plaintiff May Bring In 3rd Party
o After there is a counterclaim against the original plaintiff,
then the plaintiff may bring in another party
o Same rules apply as above.
 Federal Rule 4(k): Territorial Limits on Service of Process.
 Rule 4k(1)(b) gives an extra 100 mile boost to the court’s
jurisdiction in cases of impleader.
 Service of a summons or filing a waiver of service is effective to
establish jurisdiction over a person if he is joined under Rule 14 or
19 and is served w/in any judicial district of the US and not more
than 100 miles from the place where the summons issues
 If the state law doesn’t quite allow the exercise of personal
jurisdiction over the 3rd party defendant, the rule allows a little bit
of leeway.
 Price v. CTB, Inc.
 Synopsis: Price, a chicken farmer, hired Latco, a contractor, to
build a chicken house. Price sued CTB, which equipped the poultry
houses, and Latco. Latco moved to file a 3rd party complaint
against ITW, Latco’s nail gun and nail manufacturer,
approximately 6 months after the case had been removed to Ala.
 ITW argued that it was improperly impleaded b/c it could not be
liable to Price, as required by Rule 14 (Ala. does not recognize
contribution among joint tortfeasors and ITW was not
contractually indemnified.).
 Rule: Under Rule 14(a), a defendant may assert a claim against
anyone not a party to the original action if that 3rd party’s liability
is in some way dependant upon the outcome of the original action.
 Rule: Even though it may arise out of the same general set of facts
as the main claim, a 3rd party claim will not be permitted when it is
based on a separate and independent claim.
 Holding: Although Ala. courts do not recognize a right to
contribution among joint tortfeasors, they do recognize the concept
of implied contractual indemnity. Under Latco’s theory, should it
be found liable for its construction of the chicken houses, it can
demonstrate that the true fault lies w/ the nail guns and nails
manufactured by ITW. Rule 14 permits Latco to implead any party
who “may be liable.” Latco has properly impleaded ITW.
 Notes:
o It is impermissible, under Rule 14, to implead a 3rd party
claimed to be solely liable to the plaintiff
o A 3rd party claim is not appropriate where the defendant
and putative 3rd party plaintiff say “It was him, not me.”
o Why? These are considered separate and independent
claims.
o More Complex Litigation
 Federal Rule 18:
 A party asserting a claim as an original claim, counterclaim, cross
claim, or 3rd party claim, may join as many claims (independent or
alternate) as he has against an opposing party
 Limitation: There must be at least one existing valid claim first
(this is the distinction b/n Rule 18 and Rules 13 and 14).
 Kroger v. Omaha Public Power AND Owen Equipment Co. v. Kroger
 Synopsis: Kroger brought suit based on diversity jurisdiction
against OPPD for damages resulting from her husband’s wrongful
death. OPPD impleaded Owen Equip. as a 3rd party defendant as a
form of litigation insurance. It then successfully sought summary
judgment upon other grounds. Although Kroger did not originally
sue Owen Equipment, she decided to take advantage of it now
being in the case and under Rule 14(a) filed a complaint against
Owen. Owen Equip. challenged the jurisdiction of the court on the
ground of lack of diversity.
 Rule: Where original jurisdiction is founded solely on diversity,
the federal courts shall not have supplemental jurisdiction over a
claim by an original plaintiff against a non-diverse 3rd party
defendant, when all claims against the original defendant have
been dismissed.
 
Holding: There is no federal question, no diversity, and
supplemental jurisdiction cannot be applied. The claim is far from
being ancillary; it is actually a new and independent claim.
Furthermore, Kroger chose the forum; the efficiency she seeks
would have been available in the state courts. To allow the
requirement of complete diversity to be circumvented in this case
would simply flout the congressional command.
 Note: The ultimate principle in Kroger was codified in 28 U.S.C.
1367(b) (Supplemental Jurisdiction)
 When joining parties, you must ask 3 questions:
 Do I have permission to join under the joinder rules?
 Do I have subject matter jurisdiction over who I am joining?
 If not, does supplemental jurisdiction apply?
o Is the claim based solely on diversity?
o Is claim by the plaintiff?
o Is it being brought against a party under rule 14, 19, 20, or
24?
o Is the claim inconsistent w/ section 1332 (Diversity)?
o Compulsory Joinder
 Federal Rule 19:
 Persons to be Joined if Feasible: A person who is subject to
service of process and whose joinder will not deprive the court of
jurisdiction over the subject matter shall be joined in the action if
o in the person’s absence complete relief cannot be accorded
among those already parties, or
o the person claims an interest relating to the subject of the
action and is so situated that the disposition of the action in
the person’s absence may
 as a practical matter impair or impede the person’s
ability to protect that interest or
 leave any of the persons already parties subject to
substantial risk of incurring double, multiple, or
inconsistent obligations by reason of the claimed
interest.
 Determination by Court whenever Joinder is not Feasible:
o If joinder of such persons as those described above is not
feasible, the court has a choice to make:
 Dismiss the case (if the party is indispensable); or
 Move forward w/o the party.
o Factors to be Considered:
 To what extent a judgment rendered in the person’s
absence might be prejudicial to the person or those
already parties
 To what extent the prejudice can be lessened or
avoided
  Whether judgment rendered in the person’s absence
will be adequate
 Whether the plaintiff will have an adequate remedy
if the motion is dismissed for nonjoinder.
 Notes:
o Rule 19 is somewhat coy about who is to raise the question
of joining additional parties.
o Unlike rules that empower one of the parties to make a
motion, Rule 19 states, “a person shall be joined as a
party,” suggesting the courts have the independent power to
make inquiry.
 Temple v. Synthes Corp.
 Synopsis: Temple, a MS resident, brought a products liability
action in federal court against the manufacturer, a PA corp., of a
"plate and screw device" implanted in his lower spine, after the
device's screws broke off inside his back. Temple then filed suit
against the doctor and the hospital in LA state court. The
manufacturer filed motion to dismiss for failure to join as
necessary parties doctor who performed implant surgery and
hospital where surgery was performed.
 Rule: It is not necessary for all joint tortfeasors to be named as
defendants in single lawsuit – a tortfeasor with the usual joint and
several liability is merely a permissive party to an action against
another with like liability.
 Holding: No inquiry under Rule 19(b) is necessary b/c the
threshold requirements of Rule 19(a) have not been satisfied. The
doctor and hospital were merely permissive parties.
 Helzberg’s Diamonds v. Valley West Des Moines Shopping Center
 Synopsis: Helzberg, a MO corp., and Valley West, an IA corp.,
executed a lease agreement whereby Valley West agreed to only
lease to two other jewelry stores w/in the shopping center. Valley
West then entered into leases w/ two jewelry stores, followed by a
3rd, Lord’s Jewelers. Helzberg brought action seeking injunctive
relief restraining Valley West’s breach of the contract. Valley West
moved to dismiss pursuant to Rule 19 b/c Helzberg had failed to
join Lord’s as a defendant. The district court concluded that Lord’s
was a party to be joined if feasible under Rule 19(a)(2), but b/c it
could not be for want of personal jurisdiction, the court had to
consider whether it was an indispensable party.
 Rule: A person does not become an indispensable party to an
action to determine rights under a contract simply b/c that person’s
rights or obligations under an entirely separate contract will be
affected by the result of the action.
 Holding: Neither Lord’s nor Valley West will be prejudiced by its
absence from the current suit. None of Lord’s rights or obligations
are going to be determined in a suit to which it is not a party and
 b/c Helzberg only seeks to restrain Valley West’s breach to a lease
to which they are the sole parties, there can be no difficulty in
adjudicating their rights and obligations. Furthermore, the district
court afforded Lord’s the opportunity to intervene in order to
protect any interest it might have in the outcome of the litigation
and it chose not to.
 Note: The court could have definitely gone the other b/c of the
possibility of inconsistent judgments – Rule 19(b) is discretionary.
- Intervention
o Federal Rule 24: Intervention
 Intervention as a Right: Upon timely application anyone shall be
permitted to intervene in an action (intervention must be allowed)
 If there is statute that grants an unconditional right to intervene; or
 If the applicant claims an interest relating to the property or
transaction which is the subject of the action and the claimants are
so situated that the disposition of the action may as a practical
matter impair or impede their ability to protect that interest, unless
their interests are adequately represented by existing parties.
o Almost verbatim to Rule 19(a)(2) except for one thing
o If the party can be adequately protected by someone else in
the lawsuit then they will not allow them into the suit.
 Permissive Intervention:
 Upon timely application anyone may be permitted to intervene in
an action
o If there is statute that grants an conditional right to
intervene; or
o If an applicant’s claim or defense and the main action have
a common question of law or fact.
 In exercising its discretion, the court shall consider whether the
intervention will unduly delay or prejudice the adjudication of the
rights of the original parties.
o Natural Resources Defense Council v. US Nuclear Regulatory Commission
 Synopsis: The NRDC brought action against the USNRC and the New
Mexico Environmental Improvement Agency seeking declaratory and
injunctive relief prohibiting them from issuing licenses for the operation of
uranium mills in New Mexico w/o first preparing environmental
statements. United Nuclear had been granted the license already but it had
not yet been issued; Kerr-McGee was also a potential recipient of a
license; and American Mining Congress represented a number of
companies with a wide variety of interests in the adjudication. United
Nuclear, Kerr-McGee, and the American Mining Congress filed motions
to intervene and only United Nuclear’s was granted.
 Rule: The movant in intervention is not strictly required to have a direct
interest in outcome of the lawsuit – they just need to have some interest
which is significantly protectable
 How are they going to be affected in the future?
  Will they be harmed in some way?
 Is it something worth protecting?
 Rule: In determining whether intervention should be allowed under Rule
24(a), the court is not limited to consequences of strictly legal nature – the
rule refers to impairment as a practical matter. Therefore, the court may
consider any significant legal effect on the applicant's interest and is not
restricted to rigid res judicata test.
 Rule: If an applicants interest is similar to, but not identical with, that of
one of the parties, a discriminating judgment is required on the
circumstances of the particular case, but he ordinarily should be allowed to
intervene, unless it is clear that the other party will provide adequate
representation for the absentee – the possibility of divergence of interest
need not be great.
 Holding: The interest asserted on behalf of Kerr-McGee and the
American Mining Congress is one which is a genuine threat and clearly
relates to the subject of the action. There is little question that if the
plaintiffs are granted the relief which they seek, the interests of the
American Mining Congress and of Kerr-McGee would be affected. As to
whether their interests are adequately represented by United Nuclear, the
court held that they were not. First, United Nuclear is situated differently
from that of Kerr-McGee as they have already been granted their license.
Second, the American Mining Congress represents a wide variety of
interests and would provide a useful supplement to the defense of the case.
 Notes: Serious public interest litigation  there is much greater tendency
to allow intervention than in private litigation; the requirements are
construed much more liberally.
o Martin v. Wilks
 Synopsis: Black individuals and the NAACP brought actions against the
city of Birmingham, Ala., and the Jefferson County Personnel Board
(Board), alleging that the defendants had engaged in racially
discriminatory hiring and promotion practices. Consent decrees were
eventually entered that included goals for hiring blacks as firefighters and
for promoting them. In determining whether to grant the decrees, the court
held fairness hearings, for which notice was given in the local newspapers.
The plaintiffs, several white firefighters, then brought suit against the city
and the Board, alleging that, because of their race, they were being denied
promotions in favor of less qualified blacks in violation of federal law.
The Board argued that this was an impermissible collateral attack on a
previous judgment and that if the plaintiffs wished to have their interest
protected they should have intervened.
 Rule: One is not bound by a judgment in personam in litigation in which
he is not designated as party or to which he has not been made a party by
service of process – A party seeking a judgment on another cannot
obligate that person to intervene; he must be joined.
 Holding: Parties to a lawsuit presumably know better than anyone else
the nature and scope of relief sought in the action, and at whose expense
 such relief might be granted. It makes sense, therefore, to place on them
the burden of bringing in additional parties where such a step is indicated,
rather than placing on potential additional parties a duty to intervene when
they acquire knowledge of the lawsuit.
 Note: Congress, after this case, adopted an amendment to the Civil Rights
Act: A person who, prior, to the entry of a consent decree had actual
notice of the proposed judgment, and a reasonable opportunity to present
objections, or a person whose interests were adequately represented in the
first suit cannot bring a collateral challenge against the entry of that
decree.
- Interpleader:
o Federal Rule 22: Interpleader
 Requires everything else that we have studied so far (SMJ, PJ, Notice,
Venue, etc.)
 Persons having claims against the plaintiff, a.k.a. the would be defendant
or the stakeholder, may be joined as defendants and required to interplead
when the plaintiff is or may be exposed to double or multiple liability and
could be subjected to inconsistent judgments.
 Rule 22 Interpleader is generally only used when all of the claimants are
from the same state.
o Statutory Interpleader:
 Diversity is satisfied so long as there is diversity b/n two of the claimants,
as opposed to complete diversity (This is constitutional b/c complete
diversity is not a constitutional requirement)).
 Amount in controversy is only $500 (Again, amount in controversy is not
a constitutional requirement)
 Personal jurisdiction can be satisfied by nationwide service of process
 Venue will lie in any district where any claimant resides.
o Cohen v. The Republic of the Philippines
 Synopsis: Cohen was the “would be” defendant. He brought the
interpleader action b/c he could have been subject to suit by more than one
party, Kraemer and The Philippines, for the ownership of several
paintings. Imelda Marcos attempted to intervene five months after the
initial complaint was filed.
 Rule: Factors to be considered in determining if motion to intervene is
timely include how long the applicant knew of his interest before making
the motion, prejudice to the existing parties from the delay, prejudice to
the applicant if the motion is denied, and other unusual circumstances.
 Holding: Marcos delay was not unreasonable given the complex and
politically sensitive int’l. implications of this action. The existing parties
will not be prejudiced by the delay b/c the addition of Marcos does not
require altering the scheduled trial date. Marcos interest was very likely to
be prejudiced if her intervention is denied.
 Notes:
 What form of interpleader is being used here? Statutory
Interpleader.
  Why? Cohen and Braemer are both NY residents  complete
diversity is not satisfied.

END OF PART III

JOINDER/JURISDICTION
Review #3
Civil Procedure I
Professor Brody

For EACH CLAIM you must ask the following:

1. Whether the rules give permission to join all parties and claims that have been brought
together? AND
2. Whether there is jurisdiction/power to hear the case?
a. Is there a basis for jurisdiction under sec. 1331 (federal question)? Or
b. Is there a basis for jurisdiction under sec 1332 (diversity, i.e., don’t forget amount
in controversy)? Or
c. Is there a basis for supplemental jurisdiction under 1367(a)?
i. If there is original jurisdiction over one claim, there shall be supplemental
jurisdiction over all other claims;
ii. If the claims are so related that they form part of the same case or
controversy under article III of the Constitution (same nucleus of operative
fact), there shall be supplemental jurisidiction;
iii. These include claims that involve the joinder or intervention of additional
parties and including those who do not meet the amount in controversy
iv. EXCEPTIONS: Under 1367(b), there SHALL BE NO JURISDICTION
if:
1. The main claim is founded solely on diversity; AND
2. The claim at issue is brought by a plaintiff; AND
3. The claim at issue is against a party joined under rules 14, 19, 20
or 24 OR claims by persons joined as plaintiffs under rule 19 OR
claims by persons seeking to intervene as plaintiffs under rule 24
AND
4. The claim at issue would be inconsistent with diversity.
iii. DISCRETIONARY EXCEPTIONS: Even if 1367(a) is satisfied and
even if none of the exceptions apply under 1367(b), a court may decline to
exercise jurisdiction under 1367(c) if one of the factors applies:
1. The claim raises a novel or complex issue of state law
2. The claim substantially predominates over the claim or claims over
which the district court has original jurisdiction
3. The district court has dismissed all claims over which it has
original jurisdiction
4. In exceptional circumstances, there are other compelling reasons
for declining jurisdiction.

END OF THE CLASS