To: Civil Procedure Professors

From: Jack H. Friedenthal, Arthur R. Miller, John E. Sexton, & Helen Hershkoff1

Date: July 2021

Re: Friedenthal, Miller, Sexton & Hershkoff, CIVIL PROCEDURE: CASES AND
MATERIALS (Twelfth Edition and Compact Twelfth Edition)

2021 Update Memo

Thank you for using our casebook in your first-year course in Civil Procedure.

We are thrilled to announce that Adam Steinman (Alabama) and Troy

McKenzie (NYU) have joined our author team and we acknowledge their
contributions to this Update Memo. Together we are preparing a Thirteenth
Edition of the casebook and its compact version, and those new volumes will
be ready for the 2022–2023 academic year.

Our accompanying 2021–2022 Rules Supplement contains the Federal Rules of

Civil Procedure (including the abrogated Forms), comparative state rules, a set of local
rules, portions of the Federal Rules of Appellate Procedure, a rich selection of federal
statutes and constitutional provisions pertinent to the first-year course, an illustrative
litigation problem with sample court papers, and a litigation flow chart, all of which we
hope will be helpful to your course preparation. The Rules Supplement reflects the latest
changes to these materials, and includes excerpts or summaries of recent decisions of the
Supreme Court and other courts. For ease, we list those cases, by chapter, that are new to
the Rules Supplement:

Chapter 2—Jurisdiction over the Parties or Their Property

Ford Motor Co. v. Montana Eighth Judicial District, 592 U.S. ___, 141 S.Ct.
1017, 209 L.Ed.2d 225 (2021). Some of you may prefer to distribute a shorter
excerpt than the one included in the Rules Supplement, and we attach one as a
Handout to this Memo.

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The authors thank Claire Bartholomew, Elizabeth Crimmins, Michael Ellis, Lily Fagin, Zoe
Farkas, Pooja Goel, Eliza Hopkins, Madeline Leibin, Freddy Levenson, Zachary Sanders, Nathan
Small, Tina Szpicek, Andrew Vaccaro, and Brooks Weinberger, second-year law students at New
York University School of Law, for research assistance; Dana Rubin for library support; and Ian
Brydon and Kristin Silberman for administrative assistance.

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 Chapter 4—Jurisdiction over the Subject Matter of the Action—The Court’s
Competency

BP P.L.C. v. Mayor & City Council of Baltimore, 593 U.S. ___, 141 S.Ct. 1532,
___ L.Ed.2d ___ (2021) (summary). Some of you may prefer to teach this case in
connection with Chapter 16—Appellate Review.

Chapter 6—Ascertaining the Applicable Law

Mckesson v. Doe, 592 U.S. ___, 141 S.Ct. 48, 208 L.Ed.2d 158 (2020)
(summary).

Chapter 10—Class Actions

TransUnion LLC v. Ramirez, 594 U.S. ___, 141 S.Ct. 2190, ___ L.Ed.2d ___
(2021) (summary).

Chapter 16—Appellate Review

Google LLC v. Oracle America, Inc., 593 U.S. ___, 141 S.Ct. 1183, 209 L.Ed.2d
311 (2021) (summary).

This Memo offers additional materials that we hope will enhance your teaching
experience. Above all, our goal is to give you materials that can be used as a basis for
practice problems, as starting points for examination questions, and as insight into
judicial practice. In almost all instances, we do not recommend assigning these cases for
students to read. We have chosen these cases because the facts illustrate important rules
or principles, the decision leaves open an important legal question, the dispute holds
inherent interest, or the decision provides an exceptionally clear statement of the
governing rules or circuit divisions. Our aim in this Memo is not to be comprehensive,
but rather to highlight important issues and in some instances to suggest trends.

You also might find helpful the assessment tools included with the CasebookPlus
platform of our casebook. These tools consist of a bank of multiple-choice questions
with feedback, and are available at:
http://home.westacademic.com/casebookPlus/faculty/. In addition, please keep in mind
that the Teacher’s Manual for the comprehensive and for the compact versions of the
Twelfth Edition can be downloaded from the casebook website:
http://www.fmshcivilprocedure.com/.

Attached to this Memo are Errata Charts for the Comprehensive and Compact
editions that can be distributed to students or attached to a Syllabus. We apologize for
these errors; please keep us informed of any that we did not yet catch. We also hope that
you will suggest improvements and alert us to decisions or to your own scholarly articles
that we might include in future editions of the casebook.

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 Recent Court Decisions of Interest to the 1L Procedure Course

Chapter 1. A Survey of the Civil Action

The Concern and Character of Civil Procedure

Incorporating Race, Class, and Gender Inequality into the 1L Course

We remind you that our Teacher’s Manual discusses how one might bring to the
surface questions of race, gender, and class that often are overlooked in the 1L procedure
curriculum. The Manual also provides a bibliography of selected articles that we have
found helpful in framing questions and eliciting classroom discussion. Our bibliography
is not comprehensive, and we welcome additional recommendations.

Consider also an issue raised in Rivera v. U.S. Attorney General, ___ Fed.
Appx. ___, 2021 WL 2836460 (11th Cir. July 8, 2021). Judge Martin wrote a
concurring opinion to note her objection to the panel opinion’s use of the term “alien,”
explaining that it “is increasingly recognized as an ‘archaic and dehumanizing’ term.”
(quoting Maria Sacchetti, ICE, CBP to Stop Using ‘Illegal Alien’ and ‘Assimilation’
Under New Biden Administration Order, Wash. Post (Apr. 19, 2021),
https://www.washingtonpost.com/immigration/illegal-
alienassimilation/2021/04/19/9a2f878e-9ebc-11eb-b7a8-014b14aeb9e4_story.html). She
argued that “noncitizen” was preferable, noting the Supreme Court’s endorsement of that
term in Nasrallah v. Barr, 590 U.S. ___, 140 S.Ct. 1683, 1689 n.2 (2020). We will
consider revisions, as appropriate, in the use of the term in the 13th edition.

COVID and Its Impact on Adjudication

The pandemic has exposed fissures in United States society, as well as in the
United States system of justice. It seems appropriate and even imperative to consider
how COVID-19 has affected the operation of the court system and the rules governing
civil litigation. Topics in the 1L curriculum might include: how the profession’s
transition to remote activity potentially affects some of the key doctrinal issues of the 1L
course, including the role of territoriality in personal jurisdiction; the notion of the “day
in court” ideal; and the use of technology to increase and to impede access to justice.
Two of the casebook authors have published an article addressing some of these
questions: Helen Hershkoff & Arthur Miller, Courts and Civil Justice in the Time of
COVID: Emerging Trends and Questions to Ask, 23 N.Y.U. J. Legis. & Pub. Pol’y 320
(forthcoming 2021), available at https://nyujlpp.org/wp-
content/uploads/2021/06/Hershkoff-Miller-Final-WEBSITE.pdf.

Background Information about the Federal Courts

We find it helpful to provide students with a judicial map of the United States so
they have a visual sense of the states that are embraced within the federal circuits and

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districts. The United States Courts provides a color-coded map, which is available at
https://www.uscourts.gov/about-federal-courts/federal-courts-public/court-website-links,
and we include a print copy as a Handout. You might also want to invite the students’
attention to 28 U.S.C. § 41 (Number and composition of circuits) and §133 (Appointment
and number of district judges), and we include the text of these statutes as a Handout.
We welcome your views on whether to include these two statutes in future editions of the
Rules Supplement.

Chapter 2. Jurisdiction over the Parties or Their Property

D. Specific Jurisdiction and State Long-Arm Laws

Ford Motor Co. v. Montana Eighth Judicial District, 592 U.S. ___, 141 S.Ct.
1017, 209 L.Ed.2d 225 (2021).

In March 2021, the Supreme Court decided Ford Motor Co. v. Montana Eighth
Judicial District Court, consolidated with Ford Motor Co. v. Bandemer. We include an
excerpted version of the decision in the 2021–2022 Supplement. We also summarize the
decision and attach as a Handout a bare-bones excerpt that you may choose to distribute
to your students.

Ford involved two cases—one from Montana and one from Minnesota. In each
case, a Ford vehicle was involved in an accident occurring in the forum state that injured
or killed a forum state resident. Although Ford did substantial, systematic business in
Montana and Minnesota, it would not be subject to general jurisdiction in those states
under the Supreme Court’s decisions in Daimler and BNSF. Ford argued that specific
jurisdiction was also improper in these two cases because the initial sales of the particular
vehicles involved in the accidents occurred in other states. The vehicle involved in the
Montana accident was initially sold by a Ford dealer in Washington. And the vehicle
involved in the Minnesota accident was initially sold by a Ford dealer in North Dakota.
Therefore, according to Ford, there was no causal relationship between its contacts with
the forum states and the accidents at issue; specific jurisdiction would be proper only “in
the State where Ford sold the car in question, or else the States where Ford designed and
manufactured the vehicle.”

The Supreme Court unanimously rejected Ford’s argument and found that due
process allowed personal jurisdiction over Ford in the states where the accidents
occurred. Justice Kagan wrote the majority opinion, joined by Chief Justice Roberts and
Justices Breyer, Sotomayor, and Kavanaugh. Justice Alito wrote a separate opinion
concurring in the judgment, and Justice Gorsuch wrote a separate opinion, also
concurring in the judgment, that was joined by Justice Thomas. Justice Barrett had not
been confirmed at the time of the oral argument, so she did not participate in the case.

Justice Kagan’s majority opinion restated the basic threshold for specific
jurisdiction: the plaintiff’s claims “must arise out of or relate to the defendant’s contacts

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with the forum,” or “put just a bit differently, there must be an affiliation between the
forum and the underlying controversy, principally, an activity or an occurrence that takes
place in the forum State and is therefore subject to the State’s regulation.” (internal
quotation marks and brackets omitted). Under this standard, a plaintiff’s claims can
“relate to” the defendant’s contacts with the forum without there being “proof of
causation—i.e., proof that the plaintiff’s claim came about because of the defendant’s in-
state conduct.” Here, “Ford had systematically served a market in Montana and
Minnesota for the very vehicles that the plaintiffs allege malfunctioned and injured them
in those States.” Accordingly, “there is a strong relationship among the defendant, the
forum, and the litigation—the essential foundation of specific jurisdiction.” (internal
quotation marks omitted).

The concurring opinions by Justices Alito and Gorsuch agreed with the ultimate
conclusion that jurisdiction complied with due process, but they criticized the majority’s
notion that specific jurisdiction can exist as to claims that merely “relate to” a defendant’s
contacts with the forum state. Justice Gorsuch’s opinion also raised some more
foundational concerns, questioning what he called the “increasingly doubtful dichotomy”
between specific and general jurisdiction and critiquing the fact that the current
framework effectively gives corporate defendants “special jurisdictional protections” that
individuals do not enjoy.

We see a number of ways teachers may incorporate Ford into their coverage of
personal jurisdiction given different time constraints, doctrinal priorities, and pedagogic
goals. Because the principal issue in the case is specific jurisdiction, students likely
would be comfortable studying it at the end of Section D, following the excerpts from
Walden and Bristol-Myers (Casebook, p. 159; Compact, p. 112). Another option would
be to cover Ford at the end of the personal jurisdiction chapter, as a review of many of
the leading decisions. The exchanges between the majority and concurring opinions in
Ford also raise important questions regarding general jurisdiction (Section E), consent
(Section F), internet contacts (Section G), and transient jurisdiction (Section I).
Accordingly, Ford can be a useful vehicle for reviewing and reflecting on those topics
and on personal jurisdiction as a whole (we recognize that this approach ignores entirely
in rem and quasi in rem jurisdiction).

Of course, including Ford as a principal case raises the question whether old
chestnuts can be deleted from the syllabus. In our view, World-Wide Volkswagen
(Casebook, p. 112) deserves separate and earlier classroom discussion. Below we
suggest some questions that may provide guideposts for covering Ford. Notes 1–5
emphasize the parts of Ford that are directly relevant to Section D. Notes 6–10 will be
more suitable after the rest of the personal jurisdiction chapter has been covered.

Questions

1. According to Justice Kagan’s majority opinion, what is the test for deciding
whether specific jurisdiction satisfies due process? In what ways do the concurring
opinions disagree with the majority about the test?

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 2. Both Bristol-Myers and Ford involved large companies doing substantial
business in the forum state. Why was specific jurisdiction proper in Ford but not proper
in Bristol-Myers?

3. Justice Kagan’s majority opinion discusses “two sets of values—treating

defendants fairly and protecting ‘interstate federalism.’” How do these values factor into
the requirements for specific jurisdiction? Do they play a different role under Ford’s test
for specific jurisdiction than they did in earlier decisions such as World-Wide
Volkswagen, Burger King, and Asahi?

4. According to Justice Gorsuch, the majority “seems to suggest” that personal

jurisdiction would not have been proper in the states where the vehicles at issue in Ford
were initially sold (North Dakota and Washington). In what way does the majority
suggest that? Do you agree with his statement?

5. Consider the hypothetical “retiree in Maine who starts a one-man business,

carving and selling wooden duck decoys” (discussed in Justice Gorsuch’s concurring
opinion and footnote 4 of the majority opinion). If that individual sells a decoy to a
Montana customer and it causes injury there, how would a court analyze whether the
decoy-maker would be subject to personal jurisdiction in Montana? What additional
information would be relevant?

6. In footnote 3 of the majority opinion, Justice Kagan alludes to Justice

Gorsuch’s “apparent (if oblique) view that a state court should have jurisdiction over a
nationwide corporation like Ford on any claim, no matter how unrelated to the State or
Ford’s activities there.” In what way does Justice Gorsuch’s opinion reflect that view?
Would Justice Gorsuch conclude that the California court could exercise jurisdiction in
Daimler or in Bristol-Myers? If not, why not?

7. Justice Gorsuch’s concurring opinion observes: “Nearly 80 years removed

from International Shoe, it seems corporations continue to receive special jurisdictional
protections in the name of the Constitution.” Which cases would you cite as support for
his view that corporate defendants enjoy greater protections from personal jurisdiction
than individual defendants? Which of the following solutions—if any—would you
support to address that disparity?

(a) Expand general jurisdiction over corporations. For example, permit general
jurisdiction in any state in which a corporation “engages in a substantial,
continuous, and systematic course of business” (a standard that the Daimler
majority found to be “unacceptably grasping”).

(b) Permit “tag” or “transient” jurisdiction (see Burnham) over a corporation by

serving process on certain agents or officers of the corporation when those
individuals are voluntarily present in the forum state. (If so, which corporate
officers or agents?)

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 (c) Eliminate “tag” or “transient” jurisdiction over individuals.

Are there statutes Congress could enact to address the disparity?

8. Justice Gorsuch states in footnote 3 of his concurring opinion: “It is unclear

what remains of the old ‘consent’ theory after International Shoe’s criticism.” What does
remain of that theory? Do the cases reflect a different approach to express consent (for
example, provided in a contractual forum selection clause) and implied consent (for
example, inferred from a practice of doing business in a particular state) for jurisdictional
purposes? Do you agree with Justice Gorsuch’s assertion that the Supreme Court’s case
law since International Shoe has “cast doubt on the idea, once pursued by many state
courts, that a company ‘consents’ to suit when it is forced to incorporate or designate an
agent for receipt of process in a jurisdiction other than its home State”?

9. Justice Kagan’s majority opinion states in footnote 4 that “we do not here
consider internet transactions, which may raise doctrinal questions of their own.” The
concurring justices also flag the challenge of assessing contacts that occur via the internet
and other modern technologies. Do you think internet contacts require a distinct doctrinal
approach?

10. Consider footnote 2 of Justice Kagan’s majority opinion and footnotes 2 and
5 of Justice Gorsuch’s concurring opinion. How do Justice Kagan and Justice Gorsuch
differ in their approaches to constitutional interpretation and in the weight each accords
to the “original meaning” of the Fourteenth Amendment? Is their disagreement the same
as that between Justice Scalia and Justice Brennan in Burnham?

Students may wonder whether Ford is affecting litigation practice and lower court
decisions. A quick West search reports that as of June 30, 2021, the decision has been
cited 138 times, in 70 cases, 47 secondary sources, three practical law sources, 11
appellate court documents, and 7 trial court documents; 134 of the 138 sources that have
referenced Ford have examined it, discussed it, cited it, or mentioned it, either neutrally
or positively. Of the 70 cases cited, only four cited Ford negatively. We invite attention
to three decisions applying Ford:

In Simmons v. Cardinal Health, Inc., 2021 WL 1577843 (E.D. La. 2021),

decided in April 2021, the district found that Ford was immaterial to the result, having
found no minimum contacts between defendant and the forum state. Plaintiff underwent
surgery in Texas, where the doctors used a bone cement. He then moved to Louisiana,
and had revision surgery there, allegedly because of a defect in the bone cement. He sued
in federal court in Louisiana, invoking diversity jurisdiction and alleging violation of the
Louisiana Products Liability Act due to a design, construction, or composition defect in
the bone cement, and breach of express warranty. Osartis, one of the defendants,
contracted with Cardinal Health, also named as a defendant, to distribute the product in
the United States without any geographic limitation. Osartis is a German company; it has
no offices or employees in Louisiana, makes no direct sales to customers in Louisiana,

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pays no taxes in Louisiana, has no agent in Louisiana to accept service, and has no
address, telephone number, or bank accounts in Louisiana, but it does file product
incident reports with the Food and Drug Administration. The district court applied the
Fifth Circuit’s stream-of-commerce approach, under which due process is satisfied if the
court “finds that the defendant delivered the product into the stream of commerce with
the expectation that it would be purchased by or used by consumers in the forum state,”
and requires plaintiff to show that defendant “had actual knowledge or an expectation
that the allegedly defective bone cement would be used in Louisiana.” The court found
that Osartis’ activities targeted the United States generally, but not Louisiana specifically.
Plaintiff’s unilateral decision to leave Texas and have revision surgery in Louisiana
“established the only connection between the allegedly defective product and Louisiana.”
The court rejected plaintiff’s argument that Ford buttressed its position that exercising
jurisdiction over the defendant was constitutional because plaintiff failed to show any
contacts with the state. Rather, Ford dealt with a defendant who had minimum contacts
and simply rejected the argument that those contacts “must have a direct causal
relationship to the damages sought by the plaintiffs.”

Thiam v. T-Mobile USA, Inc., 2021 WL 1550814 (E.D. Tex. 2021), arose from
an increasingly familiar fact pattern: plaintiff’s cell phone exploded leaving his hand
severely injured and permanently disfigured. Plaintiff bought the cell phone in Texas and
sued in Texas state court. Defendants removed. LGC, the manufacturer of the battery
contained in the cell phone, is a Korean company with its principal place of business in
Seoul, and moved to dismiss for lack of personal jurisdiction. It was conceded that
general jurisdiction did not exist. The record again showed a lack of conventional
contacts with the forum state (not licensed in the state, not registered in the state, no
employees in the state, never shipped goods to the state, never directed distributors to sell
its component part in the state), and LGC argued that it did not place its component part
in the stream of commerce with the expectation that it would be purchased or used by
Texas consumers. Plaintiff countered that LGC was no mere “passive bystander”; it sold
over 6 million batteries for the particular type of cell phone that exploded, and those
batteries were sold by a company that had more than 800 stores in Texas. The court
agreed that under a stream-of-commerce theory, due process was satisfied, arguing that
because LGC “should have known” that its product would be sold in Texas, it “should
have reasonably anticipated being haled into court” and “[i]f nothing else, LGC should
have been aware that its batteries were making it to Texas through the stream of
commerce”:

LGC is a large and sophisticated company that does business in the

consumer electronic industry. As such, LGC would recognize that the
United States is one of the larger consumer electronics markets in the
world. And LGC would also be aware that the companies that it sells the
battery packs to would do business in the United States. LGC
manufactured over 6 million of the battery packs. LGC states that it did
not know where the batteries were ultimately shipped to, but LGC should
have known that the batteries—contained within the final product

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 manufactured by the companies it sold the batteries to—would end up in
the hands of consumers in Texas.

Turning to the reasonableness factors, the court held that a defendant could not defeat
jurisdiction merely by reciting that it is a foreign corporation. Further, defendant
conceded that a different type of battery was purchased by a Texas customer. In a
footnote, the district court stated that Ford did not change the analysis. Is the court’s
approach consistent with case law prior to Ford?

Ex parte TitleMax of Georgia, Inc., 2021 WL 2024678 (Ala. 2021), decided by

the Alabama Supreme Court on May 21, 2021, concluded with a long footnote about the
possible effect of Ford on the question whether to attribute contacts to a holding
company under an agency theory. The action involved repossession of a car; the car
owner at the time of repossession had entered into a “pawn ticket” agreement with
TitleMax of Georgia under which the owner borrowed money from the company and the
company acquired a security interest in the car. An Alabama resident bought the car
from a dealer in Georgia, with financing from a credit company, and received a certificate
of good title. TitleMax later authorized repossession of the car because of the original
owner’s alleged default on the pawn ticket agreement. In deciding against attributing
contacts on an agency theory, the Alabama court stated that Ford was irrelevant to that
question.

E. General Jurisdiction

In Erwin-Simpson v. AirAsia Berhad, 985 F.3d 883 (D.C. Cir. 2021), the D.C.
Circuit, overruling circuit precedent, held that a Malaysian airline’s operation of a
website that was accessible to consumers in the forum state to purchase airline tickets
was not by itself sufficient to support the exercise of general jurisdiction. The decision
carefully reviewed the impact of the “at home” standard of Daimler and Goodyear, and
concluded defendant’s contacts did not meet that standard:

The airline operates no flights to the District and has no physical presence
in the forum. The only presence that it identifies in the District is a
website that is insufficient on its own to render the airline “comparable to
a domestic enterprise” in the forum. * * * The plaintiffs focus on the fact
that D.C. residents can find and purchase tickets on AirAsia’s website,
arguing that such activity could support general jurisdiction if it were
sufficiently voluminous. They accordingly contend the district court
should have granted jurisdictional discovery into the extent and nature of
such transactions before dismissing for lack of personal jurisdiction. But
they do not identify any reason to think that use of AirAsia’s website in
the District would itself amount to forum contact so substantial and of
such a nature as to effectively make AirAsia at home in the District of
Columbia.

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As a threshold issue, the appeal court focused on whether any statutory authorization
existed in the District of Columbia for the exercise of general jurisdiction. The only
possible statutory basis was the “doing business” prong, which had previously been
interpreted as co-extensive with the reach of due process. The court also noted that
defendant had forfeited an objection to service of process. The “doing business”
provision required service in the District of Columbia; plaintiff had mailed copies of the
summons and complaint to defendant in Malaysia.

In Gamboa v. Great Lakes Dredge & Dock Co., LLC of Louisiana, 2020 WL
4373111 (M.D. La. 2020), the district court applied the “at home” test to a foreign
limited liability company, looking to the state of formation and the state of the principal
place of business, neither of which was in the forum state. The court then considered
whether exceptional circumstances were present to support the exercise of general
jurisdiction. Plaintiff pointed to defendant’s licensing, registration, agent for service of
process in the state, in-state employees, and an upcoming in-state project. The court
rejected these activities as sufficient, noting, for example, that in-state projects comprised
less than eight percent of the company’s projects in the last five years. The court also
rejected any analogy to Perkins (Casebook, p. 162), reviewing post-Daimler decisions in
which contacts were not considered sufficiently continuous and systematic to support a
finding that the foreign company was at home in the forum.

F. Consent as Another Basis of Jurisdiction

WhatsApp Inc. v. NSO Grp. Techs. Ltd., 472 F. Supp. 3d 649 (N.D. Cal.
2020), addressed whether defendants—Israeli manufacturers of surveillance
technology—consented to personal jurisdiction in California by accepting WhatsApp’s
terms of service. WhatsApp’s suit alleged that defendants violated the Computer Fraud
and Abuse Act, the state Comprehensive Computer Data Access and Fraud Act, and state
common law by sending malware to approximately 1,400 mobile phone and devices
using plaintiff’s encrypted communication system. The forum selection clause in its
terms of service provided:

If you are not subject to the “Special Arbitration Provision for United
States or Canada Users” section below, you agree that you will resolve
any Claim you have with us relating to, arising out of, or in any way in
connection with our Terms, us, or our Services (each, a “Dispute,” and
together, “Disputes”) exclusively in the United States District Court for
the Northern District of California or a state court located in San Mateo
County in California, and you agree to submit to the personal jurisdiction
of such courts for the purpose of litigating all such Disputes.

The court accorded the forum clause a presumption of validity, but, applying ordinary-
meaning rules of interpretation, held that the term “dispute” embraced only claims by a
user against WhatsApp and was not a two-way street—it did not include a claim by
WhatsApp against a user. The decision has an excellent discussion of the Calder test,

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finding that the manufacturers purposefully directed their activities in California by
seeking out and accessing servers owned by plaintiffs.

G. Internet and Other Technological Contacts

With little guidance from the Supreme Court, the lower courts continue to grapple
with the jurisdictional significance of Internet contacts and especially with the problem of
whether to treat postings on social media as contacts that are “expressly aimed” at the
forum state sufficient to meet the Court’s effects test in Calder (Casebook, p. 123). The
following cases offer helpful teaching hypotheticals for how courts are categorizing
social media as “contact with a state” or “action directed as a state.” Each of the
decisions applies the Calder test to require something more than effects in the forum
state.

Blessing v. Chandrasekhar, 988 F.3d 889 (6th Cir. 2021), arose from
widespread media coverage of confrontations at the Lincoln Memorial following the
2019 March for Life rally. The events themselves are likely to provoke strong reactions
from students. On one side were high school students from a Kentucky Catholic school;
on the other side was a Tribal elder. Invoking diversity jurisdiction, the students sued
two Twitter users separately—a doctor from New Jersey and a celebrity comedian from
California—who posted critical comments about the students. The district court
dismissed for lack of personal jurisdiction, and the Sixth Circuit consolidated the cases on
appeal and affirmed. Along the way, the decision raises some important but sometimes
overlooked aspects of litigation practice relevant to resolving a Rule 12(b)(2) motion.

First, has the defense of personal jurisdiction been waived? The appeals court
clarified that a defendant does not automatically waive the defense by counsel’s filing a
notice of appearance before moving to dismiss. Rather, the inquiry calls for a fact-
specific analysis of the defendant’s litigation conduct, and does not require the defendant
to file a special appearance, to file a general appearance preserving a jurisdictional
defense, or first filing a responsive pleading. Rather, defendant simply must include the
defense in the first responsive pleading.

Second, what law applies to the statutory jurisdictional question? Because the
court sat in diversity, it looked the law of the state in which it sat—in this case,
Kentucky—to determine whether jurisdiction was authorized under the longarm statute.
The Kentucky statute authorized jurisdiction in nine enumerated categories, but plaintiffs
invoked only one: jurisdiction over a defendant who causes “tortious injury by an act or
omission in this Commonwealth.” KRS 454.210(2)(a)(3). The court found that the
relevant conduct did not meet these conditions; under Kentucky law, causing a
consequence in the state is not an act within the state; defendants “did not direct their
tweets into the state.” Moreover, the appeals court rejected the argument that the tweets
constituted criminal activity within the state, bringing a civil action within the longarm
statute; to the contrary, no state law supported the view that the longarm statute extended
jurisdiction over “crimes made actionable by a private right of action.”

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 Finally, although statutory authorization was lacking, the court nevertheless
conducted a due process analysis and held that neither Calder nor Walden supported the
constitutionality of exercising jurisdiction on these facts. The court emphasized that
defendants did not send tortious communications directly to the students in Kentucky, did
not have a pre-existing relationship with the students, and did not extensively
communicate with the plaintiffs. The tweets were found to have created no contacts with
the forum state, and the fact that the tweets might have motivated third parties to “dox”
plaintiffs in Kentucky did not fill the constitutional gap. Nor was Kentucky the “focal
point” of the story, distinguishing the case from Calder.

Janus v. Freeman, 840 Fed. Appx. 928 (9th Cir. 2020), involved an effort at
personal revenge via the Internet and raised sensitive questions of marital instability. To
stylize the facts, husband and wife lived in Texas; the wife relocated to California to
work for a California-based employer; the wife and employer began to date. Husband
posted critical comments about the employer via Facebook Messenger that he directed to
employees of employer’s company in California; he also posted two copyrighted
photographs on Instagram. Employer sued husband in a California federal court for
defamation and copyright violation, alleging a campaign of Internet harassment. The
district court dismissed for lack of personal jurisdiction, and a divided appeals court
affirmed. As to the defamatory comments, the court held that under Walden (Casebook,
p. 156), “the mere making of defamatory comments to persons known to be Californians
is not sufficient, without more, to establish purposeful direction”; moreover, the
complaint did not allege sufficient facts to show reputation-based effects in California.”
As to the posting of copyrighted material, the Ninth Circuit rejected pre-Walden caselaw
that “the willful infringement of copyrights known by the infringer to be owned by a
resident of a forum” was sufficient to establish personal jurisdiction; “individualized
targeting” in copyright cases as a basis for personal jurisdiction no longer survives.

The decision is excellent for class discussion because of the dissent: The dissent
did not disagree with the majority’s statement of the applicable legal rules, but found that
the allegations made out a prima facie case of personal jurisdiction. The logic was
simple: Defendant made defamatory comments to persons in California, about California
events, causing harm in California and with the intent of harming plaintiff’s business in
California. The dissent went on to apply the five-factor reasonableness test, and found
that although some factors weighed in defendant’s favor, on balance, litigating in
California did not impose an undue burden on defendant. The dissent gave a more
detailed account of the facts that went to reputational effects and targeting (for example,
explaining that the Instagram accounts were “colorfully” named with sexually
disparaging words that one would refrain from using in a classroom; that the husband
conversed with plaintiff’s employees via Facebook Messenger; and that husband sent
flowers to one of the employees). The dissent also emphasized facts that suggested a
prior relationship between the husband and employer, at least prior to this lawsuit
(earlier, plaintiff had sought a restraining order from the state court against defendant,
and had issued subpoenas to Instagram and Apple to determine the identity of the
accounts; in that suit the court granted defendant’s unopposed motion to quash service for
lack of personal jurisdiction; and during subsequent divorce proceedings husband

12
admitted to having created the online accounts and to conversing through Facebook
Messenger with the employees).

Twin Flames Universe.com, Inc. v. Cole, 2021 WL 1105247 (E.D. Mich.

2021), involved efforts by a company—described as a cult by some participants and their
parents—to block publication of investigative articles about its practices. Plaintiffs were
founders of a Michigan company dedicated to teaching “self-love through a connection
with your ‘Twin Flame,’ or your true love.” Some company members, or their parents,
posted negative comments on social media about the company’s practices—calling them
“abusive,” “emotionally manipulative,” and a “toxic cult.” Defendant, a member’s
mother who lived in Arizona, also was interviewed by a Vancouver-based reporter for
Vice Media, an online news organization, and was alleged to have made false statements
that were reported in an article entitled, “This YouTube School Promised True Love.
Students Say They Got Exploited Instead.” After the article was published, plaintiffs sent
a cease-and-desist letter, which resulted in Vice publishing a follow-up article, “Accused
Cult Leader Threatened Ex Members after Vice Investigation.” Plaintiff sued in
Michigan federal court. The Michigan long-arm statute runs the full length of the
Constitution. Relying on Blessing, discussed earlier in this Memo, the district court
dismissed, finding that defendant’s comments were not directed at Michigan and did not
connect her to Michigan. Boiled down, plaintiffs failed to meet their burden to show
with “reasonable particularity” contacts between this defendant and the forum.

Think Rubix, LLC v. BEWOKE.VOTE, 2021 WL 1148722 (E.D. Ark. 2021),

is a trademark infringement action by the owner of the registered trademark “Woke
Vote” against a consultant firm that advises groups to “transform culture” and uses the
phrase “Be Woke.Vote” in its activities. The court dismissed for lack of personal
jurisdiction. The Arkansas long-arm statute runs the full length of the Constitution. The
court looked first to the Zippo test (Casebook, p. 174), and found that defendant’s internet
activities fell in the middle of the sliding scale: “more than passive, but do not rise to the
level of facilitating business transactions”; they did not enter into contracts or exchange
e-files with Arkansas residents. Moreover, although the website listed “#Arkansas” in its
list of states, Arkansas was one of a number of states listed, and plaintiff did not identify
any post expressly directed to Arkansas voters. Although the site was interactive—it
facilitated voter registration—the court called it “at most, a conduit through which the
user can access the state’s voter registrar.” Turning to the Calder effects test, the district
court followed Eighth Circuit precedent, which takes a narrower approach than other
circuits, requiring that defendant’s acts be “performed for the very purpose of having
their consequences felt in the forum state, and that “mere effects in the forum state are
insufficient to confer personal jurisdiction.” Although under Eighth Circuit precedent,
the injury in a trademark infringement case takes place in the state in which the
trademark owner has its principal place of business (in this case, Arkansas), that injury
alone was not sufficient to confer jurisdiction, and there was no showing that defendants
knew of the trademark before contacting plaintiffs.

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 H. Jurisdiction Based upon Power over Property

United States v. Obaid, 971 F.3d 1095 (9th Cir. 2020), petition for cert.
docketed (U.S. April 2, 2021), raises important constitutional questions about civil
forfeiture proceedings in the digital age and the scope of Shaffer v. Heitner (Casebook, p.
182) as a limitation on property-based exercises of jurisdiction. Obaid, a citizen of Saudi
Arabia, allegedly facilitated the illegal laundering of billions of dollars, and personally
received $153 million from the scheme. Relevant to this appeal, Obaid wired $2 million
from a Swiss bank account to a bank in California to purchase 2,500,000 shares of
preferred stock in Palantir Technologies, Inc. The United States filed an in rem civil
forfeiture action against the Palantir shares in the Central District of California. Obaid
moved to dismiss the forfeiture action, on the ground that the court lacked jurisdiction
and venue over him as the property owner. Boiled down, he argued that “Shaffer
squarely stands for the proposition that all assertions of jurisdiction—in rem, quasi in
rem, and in personam—must be evaluated according to a minimum contacts standard.”
The district court rejected Obaid’s argument that personal jurisdiction over him was
required to adjudicate rights to the property. On appeal, the Ninth Circuit held that
Shaffer did not govern. Rather, the governing precedent was Tennessee Student
Assistance Corp. v. Hood, 541 U.S. 440, 124 S.Ct. 1905, 158 L.Ed.2d 764 (2004), which
upheld the exercise of in rem jurisdiction by a Bankruptcy Court to discharge a state-held
student loan without in personam jurisdiction over the state:

[I]f we adopt the broad reasoning of Shaffer advocated by Obaid and the
dissent, we would be discarding a longstanding body of Supreme Court
authority. We hasten to add that we do not read Hood as overruling or
purporting to overrule Shaffer. Rather, we conclude that each survives in
its respective sphere: Shaffer in the realm of quasi in rem jurisdiction and
Hood in the realm of in rem jurisdiction.

Circuit Judge Ikuta, dissenting, argued that Shaffer controlled and that the majority
misread Hood and ignored “the difference between a creditor in a bankruptcy case and a
property owner in a forfeiture action,” emphasizing the fact that the Fourth, Fifth, Sixth,
and Seventh Circuits have extended the reasoning of Shaffer to in rem jurisdiction.
Students might be asked to consider these arguments in the light of the disagreement
between Justice Scalia and Justice Brennan in Burnham (Casebook, p. 195).

J. Jurisdictional Reach of the Federal District Courts

Lyngaas v. Ag, 992 F.3d 412 (6th Cir. 2021), provides a clear and succinct
discussion of the constitutional standard for exercises of personal jurisdiction under
Federal Rule 4(k)(2). The suit was a class action against a Swiss company and its United
States subsidiary for sending unsolicited faxes promoting their toothbrushes, in violation
of the federal Telephone Consumer Protection Act (TCPA). The named plaintiff was
from Michigan, received unsolicited faxes in Michigan, and sued in a Michigan federal
district court. The district court held that the subsidiary violated the TCPA, and
established a claims process for class members to verify their receipt of unsolicited

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advertisements. The parties cross-appealed. On the jurisdictional question, the Sixth
Circuit held that although the subsidiary was not the alter-ego of the parent, the district
court properly exercised power over the Swiss parent company under Federal Rule
4(k)(2) and affirmed the district court’s exercise of personal jurisdiction. The Sixth
Circuit underscored that the constitutional standard derived from the Fifth, not the
Fourteenth, Amendment, and that the requirements included “relatedness, purposeful
availment, and reasonableness,” but “in reference to the United States as a whole, rather
than a particular state.” The Swiss company’s contacts comfortably met this standard. It
purposefully availed itself of the United States market by launching its product here; the
alleged injuries relate to these contacts because the unwanted advertisements related to
the creation of the United States subsidiary and its direction to that subsidiary to market
the product throughout the United States; and the exercise of jurisdiction would be
reasonable, because the federal interest in enforcing its laws outweighed any burden on
the Swiss company notwithstanding its lack of prior contact with the federal court
system. The Sixth Circuit’s analysis may be paired with that of the Fifth Circuit in
Douglass v. Nippon Yusen Kabushiki Kaisha, 996 F.3d 289 (5th Cir. 2021), rehearing en
banc granted (5th Cir. July 2, 2001), holding that a Japanese corporation lacked contacts
sufficiently continuous and systematic as to render it “at home” in the United States for
purposes of the exercise of general jurisdiction under Rule 4(k)(2).

Chapter 3. Providing Notice and an Opportunity to Be Heard

A. The Requirement of Reasonable Notice

Wright v. Beck, 981 F.3d 719 (9th Cir. 2020), presents the constitutional
requirement of reasonable notice in the context of a police seizure and destruction of
hundreds of firearms that may or may not have been collected legally. In 2004, the Los
Angeles Police Department, as part of a sting operation, executed a search warrant and
seized 400 firearms from plaintiff’s residence. Two years later, Wright pled guilty to
possession of an unregistered assault weapon, and under his plea agreement was barred
from possessing firearms for 36 months. The agreement further provided that the LAPD
could destroy or sell the seized weapons unless Wright could provide proof of ownership.
After completing the terms of probation, around 2010, Wright provided proof of
ownership of some of the weapons. In 2012, after delay on the LAPD’s part, LAPD
officers determined that Wright owned 80 of the weapons. The officers did not inform
Wright that they had completed their process and determined he did not legally own the
remaining firearms, and in 2013 they sought an ex parte order permitting their
destruction. Wright learned of these events in 2014 and brought a civil rights action the
following year. The district court rejected the due process claim, granting summary
judgment to the police officers, and the Ninth Circuit reversed. The opinion offers a
succinct summary of the leading procedural due process case requiring notice (Casebook,
pp. 211–225) and of the relation between notice and the right to be heard. The appeals
court found that the LAPD had failed to provide any notice, rejecting the argument that
the notice requirement was met when the LAPD initially seized the firearms in 2004.
The court also rejected the argument that Wright had received statutory notice because

15
state law required the destruction of the firearms. Further, the fact that Wright had some
opportunity to seek return of the weapons did not cure the defect.

B. The Mechanics of Giving Notice

Federal Trade Commission v. Cottelli, 2021 WL 1202463 (9th Cir. 2021),

discusses substituted electronic service in the context of an unsuccessful motion to set
aside a two-million-dollar default judgment for lack of personal jurisdiction. Cottelli ran
a company called MyEx.com, described in the synopsis (although not in this decision) as
a revenge porn website. As part of a pre-litigation civil investigative demand, the FTC
used “traditional means” to try to reach Cottelli. Failing that, the district court, relying on
Rio Properties (Casebook, p. 239), authorized service by email; after all, as the court
explained, Cottelli used “the modern e-business model and profited immensely from it,”
and listed an email address as the contact for his online business. The FTC effected
service through four associated email addresses, and one did not trigger a “bounce back”
email. Use of e-service did not violate any international agreement or foreign law; the
Ninth Circuit further noted that Cottelli’s “globetrotting and evasive behavior” made it
difficult for the FTC to identify his physical whereabouts. Under this circumstance, use
of e-service met the constitutional test of being “reasonably calculated” to inform
defendant of the pendency of the action and to present objections, and did not provide a
basis to set aside the default judgment for lack of personal jurisdiction (and, further, the
Ninth Circuit found that defendant had waived his minimum contacts argument).
Discussion might focus on the fact that the appellate decision was not selected for
publication but it can be cited for limited purposes. How strong a precedent should it
provide for substituted service? Did the court set a relatively low bar for notice in this
case given the nature of defendant’s business and evasive behavior?

Niz-Chavez v. Garland, 593U.S. ___, 141 S.Ct. 1474, ___ L.Ed.2d ___, (2021),
is a statutory case about notice in the immigration context. We mention it because the
analysis raises many of the same issues pertinent to notice in the due process context:
fairness to the litigant, efficiency, public trust, government accountability. Niz-Chavez
applied for withholding of removal, a form of discretionary relief available to
nonpermanent resident aliens ordered removed from the United States. One of the
criteria for this form of relief is establishing a “continuous presence” in the United States
of at least 10 years. Under the “stop-time rule” introduced by the Illegal Immigration
Reform and Immigrant Responsibility Act of 1996 (IIRIRA), the continuous presence
period ends when an immigrant receives a “notice to appear” for a removal proceeding.
IIRIRA § 1229(a)(1) defines a “notice to appear” as written notice that specifies “certain
information, such as the charges against the immigrant and the time and place at which
the removal proceedings will be held.” The Supreme Court previously held in Pereira v.
Sessions, 138 S. Ct. 2105 (2018), that a notice that failed to include all of the statutorily
required information did not trigger the stop-time rule. When the government ordered
Niz-Chavez deported, it first sent a document that contained only the charges against
him. Then, two months later, it sent him a second document with the time and place of
his hearing. The government contended that the two notices, combined, met the statutory

16
requirements and that the immigrant’s continuous presence in the United States stopped
when he was served with the second of the two documents.

The Court, in an opinion by Justice Gorsuch, reversed the Sixth Circuit’s

decision, rejecting the government’s “notice-by-installment theory” and holding that the
documents Niz-Chavez received did not constitute “a notice to appear” within the
meaning of the IIRIRA and therefore did not trigger the “stop-time rule.” The decision
used straightforward textualist tools and rested on the ordinary meaning of the term “a
notice to appear”:

At one level, today’s dispute may seem semantic, focused on a single

word, a small one at that. But words are how the law constrains power. In
this case, the law’s terms ensure that, when the federal government seeks a
procedural advantage against an individual, it will at least supply him with
a single and reasonably comprehensive statement of the nature of the
proceedings against him. If men must turn square corners when they deal
with the government, it cannot be too much to expect the government to
turn square corners when it deals with them.

Justice Kavanaugh dissented, joined by Chief Justice Roberts and Justice Alito.
Students might consider whether this rule of full compliance also should apply to service
of process under Rule 4.

Castillo v. Attorney General of the United States, 837 Fed. Appx. 96 (3d Cir.
2020), was an appeal from a decision of the Board of Immigration Appeals affirming the
decision of an immigration judge denying an application to reopen an in absentia removal
order. The decision turned on whether the immigrant received proper notice. Generally,
a presumption attaches to receipt when notice is sent by certified mail to a last known
address. However, in this case, the notice was sent by non-certified mail, and so the
presumption was weaker. The notice was not returned as undeliverable, and the
immigrant waited three years after learning of the order to file a motion to reopen.

C. Opportunity to be Heard

For a timely and important decision on procedural due process involving the
reenfranchisement of persons convicted of felonies, consider Jones v. Governor of
Florida, 975 F.3d 1016 (11th Cir. 2020). In 2018, Florida voters voted to amend the
state constitution to permit persons who had been convicted of felonies and completed
their sentences to vote—overall, about 1.4 million people. The legislature then enacted a
statute that limited reenfranchisement to those who had paid all fees and costs incurred in
connection with the convictions. The law created a practical barrier to
reenfranchisement, because of difficulties in locating criminal judgments, determining
whether fees were imposed because of felony or other offenses, or how much of a debt
remained. The law also imposed a penalty on persons who registered to vote without
having met the specified financial conditions. After many procedural steps, including
one of the longest e-trials during the pandemic, the district court permanently enjoined

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what it called the state’s “pay-to-vote” system and, among other things, declared the
amendment and statute unconstitutional:

[A]s applied to felons who cannot determine the amount of their

outstanding financial obligations with diligence, and [the court] created a
process under which felons could request an opinion from the Division of
Elections stating their total amount of outstanding fines and restitution.
The injunction allowed any felon who did not receive an answer within 21
days to register and vote, and it prohibited the defendants from causing or
assisting in the prosecution of any persons who registered or voted under
this process.

The Eleventh Circuit reversed on multiple grounds and vacated the injunction. The
appeals court, although it grudgingly accepted that “the right to vote is a liberty interest
protected by the Due Process Clause,” held that no unconstitutional deprivation took
place because the challenged action was “through the legislative process and the process
for adopting a constitutional amendment, which provide more than adequate procedures
for the adoption of generally applicable rules regarding voter qualifications.” The
appeals court emphasized the distinction between legislative and adjudicative action;
legislative action includes general laws that apply to “more than a few people” and are
“prospective in nature”; adjudicative action applies to a “relatively small number of
persons” who are “exceptionally affected, in each case upon individual grounds” by the
action [internal quotation marks omitted]. As such, the Mathews balancing test
(Casebook, p. 256) did not come into play. Instead, the governing rule was that of Bi-
Metallic Investment Co. v. State Board of Equalization: “[w]hen the state deprives a
group of people rather than an individual of a liberty or property interest, it is engaged in
legislation rather than adjudication, and ‘the affected persons are not entitled to any
process beyond that provided by the legislative process.’” Bi-Metallic, 239 U.S. 441,
445, 36 S.Ct. 141, 60 L.Ed. 372 (1915). Moreover, the state has no obligation “to
provide individual process to help citizens learn the facts necessary to comply with laws
of general application.” Moreover, in the appeals court’s view, the state provided
adequate process before removing voters from the rolls. For class discussion, consider
raising the question asked in one of the two dissenting opinions:

[I]magine a state that requires, as a condition of renewing drivers’ licenses

and vehicle registrations, that drivers pay all outstanding citations for
parking/traffic infractions. A driver goes to his county agency and is told
that he may have some unpaid citations. He asks for information about the
citations and their respective amounts so that he can verify their accuracy
and pay whatever is outstanding. But the clerk tells him that the state
can’t give him the information because the debt for the citations has been
sold to third-party collection agencies; those agencies charge certain fees
(which vary by agency and year) on top of the citation amounts; and the
county has no way of knowing what those fees are or what amounts have
been paid or credited. The clerk tries to call other state agencies (and
some of the collection agencies) to get answers, but to no avail, and tells

18
 the driver he will have to figure everything out on his own. So the driver
has to leave without his license and car registration, and will need to risk
driving in violation of the law—and face arrest—in order to get to work,
take his children to school, and carry out the other tasks of daily life.
Would this state of affairs be constitutionally permissible? Of course not.

In Johnson v. City of Saginaw, Michigan, 980 F.3d 497 (6th Cir. 2020), the
Sixth Circuit, over a dissent by Circuit Judge Sutton, held that the City violated the
procedural and substantive due process rights of the owner of Rita’s Southern Soul Café
by shutting off its water without notice and a hearing following a gunfight, believed to be
gang-related, in front of the restaurant, which had been rented out for an adult party
alleged to have been attended by 400 guests although the venue had capacity for only
315. In ordering the shut-off, the City invoked emergency powers under a local
ordinance; it posted notice on the restaurant’s door announcing the business suspension
but did not mention the water shutoff; it gave plaintiff an opportunity to challenge the
suspension within five days, as required by the ordinance.

The majority and the dissent applied the Mathews balancing test and reached
contrary results, emphasizing different factors and giving them different weight. For
example, the majority found that the private interest in continued water service was high,
as plaintiff was forced to “turn down business opportunities and lost over $80,000 in
revenue,” had to pay for damaged toilets, and had to hire a plumber and pest-control
service to inspect the building because of the water shut-off. By contrast, the dissenting
opinion emphasized that although water is an “essential resource” in the residential
context, the commercial nature of the shut-off changed the calculus: the city “could
always restore her water and pay damages down the road, an approach much different
from property invasions that deny the owner a right to object at all.” On the
government’s interest, the majority found that the City’s interest in preventing further
violence was high, but placed weight on the City’s failure to “explain why they could not
use other means of furthering that interest without violating Johnson’s constitutional
rights.” Even if a pre-deprivation hearing might have been burdensome for the city, “it
would not have been burdensome to address the water suspension at the show-cause
hearing and notify Johnson of her opportunity to be heard on the subject.” By contrast,
the dissent emphasized the need for the City to take quick, emergency action against a
business “responsible for serial out-of-control parties that had already defined prior
orders of the city and had led to gang fights.” Neither the majority nor the dissent discuss
the race of the restaurant owner or of the guests at the party. Some students may have a
hunch that race figured into the decision to shut off the water. Does due process play a
role in screening out racial bias in low-level decisionmaking? On the other hand, the
dissent’s emphasis on community safety will resonate with other students. The decision
certainly illustrates the discretionary nature of the Mathews balancing approach.

Walsh v. Hodge, 975 F.3d 475 (5th Cir. 2020), focuses on the nature of the
hearing that the Due Process Clause requires, drawing a contrast between the hearing
procedures of a university tribunal with those of a state or federal court. A former
medical school professor challenged his termination, following a grievance proceeding,

19
on grounds that he sexually harassed a student. On appeal, he raised defects in the
grievance process: (1) that the tribunal hearing the grievance was not impartial because
one of the members served as the claimant’s preceptor and met with her weekly; and (2)
the proceeding was defective because the professor was given no opportunity to confront
and cross-examine his accuser. The Fifth Circuit rejected the first argument, finding that
although due process requires a fair tribunal, the evidence presented did not show actual
bias. As a matter of first impression, the Fifth Circuit, applying the Mathews test, found a
due process violation, putting weight on the second of the three factors—the risk of an
erroneous deprivation, given the importance of credibility to the determination.
However, given the university context, the appeals court held that the questioning could
have been done by a neutral party, and not by the complainant. The decision offers a
thoughtful analysis of university grievance procedures, the nature of the teacher-student
relationship, and the private and public interests at stake. (In the end, the court held that
defendants were entitled to qualified immunity.)

Kirk v. Commissioner of Social Security Administration, 987 F.3d 314 (4th

Cir. 2021), involves the fall-out from a $500 million fraud upon the Social Security
Administration orchestrated by a lawyer in league with four doctors and a bribed
Administrative Law Judge. Disability law is notoriously complex; the fraud was
perpetrated through fake Residual Functional Capacity forms. In 2017 the lawyer—who
had fled to Honduras—was sentenced in absentia to 12 years in prison and remained
subject to an 18-count indictment. After the agency discovered the fraud, it redetermined
the benefits of 1,787 claimants represented by the lawyer, including plaintiff, on
suspicion that the original disability rulings were tainted by fake medical evidence.
During those redetermination hearings, the agency excluded all evidence from the four
doctors; claimants were not permitted to challenge the categorical exclusion of evidence,
although the agency did consider new additional evidence produced for the relevant
period. Not surprisingly, the claimants found their benefits terminated and prior benefits
treated as overpayments. They challenged the agency’s procedures under the
Administrative Procedure Act and due process.

Significantly, the appeals court first held that procedures violated the APA as
arbitrary and capricious. However, it proceeded to the constitutional question to
determine whether the agency had a duty to provide the claimants with an opportunity to
rebut the agency’s fraud allegations at hearings on remand. Applying the Mathews
balancing test, the Fourth Circuit agreed that the procedures violated due process. The
private interest was significant, not only in ongoing benefits, but in the risk of
overpayment claims by the government and the dignitary harms from the allegation that
recipients had been “leeching government resources to which they had no right.”
Moreover, the risk of an erroneous determination was high. The agency excluded all
medical evidence signed by one of the four doctors, even though it had reason to believe
that only the Residual Functional Capacity forms was fraudulent. Considering new
evidence did not provide an adequate safeguard to ensure accuracy. In particular, it was
unrealistic to expect these claimants to acquire new evidence about disability from many
years past; in many cases, they had given all of their medical records to one of the four
doctors and no longer had access to those materials. As to the government’s interest,

20
certainly fraud prevention was important; but the plaintiffs sought only an opportunity to
contest the underlying fraud determination, which could be achieved through a simple
procedure “akin to that used by federal courts to resolve a motion in limine”; nor would
affording relief undermine law-enforcement efforts or cause unwarranted delay—after
all, the government waited ten years after learning about the fraud to initiate
redetermination hearings.

Circuit Judge Quattlebaum dissented. He agreed that Mathews provided the

correct doctrinal framework, but equated the requirement with only “minimum
procedural safeguards” and rejected the majority’s “subjective view of the underlying
interests at stake.” In particular, the dissent saw the private interest as limited to receipt
of ongoing benefits, assuming the claimant is eligible, and not in any particular step in
the determination proceeding. Likewise, the risk of error, according to the dissent,
applied only to the decision about benefits, and not to the decision to exclude evidence.
And the government had a strong interest in the “systematic deterrence of applicants who
are not legitimately disabled.”

Chapter 4. Jurisdiction over the Subject Matter of the Action—The Court’s

Competency

B. The Subject-Matter Jurisdiction of the Federal Courts—Diversity of

Citizenship

1. Determining Citizenship

Page v. Democratic National Committee, ___ F.4th ___, 2021 WL 2525577

(7th Cir. 2021), involved a defamation suit by a former advisor to President Trump
against the Perkins Coie law firm, two partners of the firm, the Democratic National
Committee, and others. Plaintiff was a citizen of Oklahoma and invoked diversity
jurisdiction. The law firm was a partnership and three of its partners were citizens but
stateless because they were domiciled in China. The Seventh Circuit held as a matter of
first impression that a partnership made up of at least one stateless partner is itself
stateless and cannot be sued in diversity. The facts—involving the “Fusion” portfolio
that purported to report meetings between plaintiff and Russian officials during the 2020
campaign—are topical and interesting. But they also provide an excellent teaching
hypothetical to review the rules for determining the citizenship of forms of business
association other than corporations; the rules of citizenship of United States citizens who
are domiciled abroad; and a frequently overlooked aspect of the rule of complete
diversity—not only “whether any parties on both sides of a lawsuit share citizenship,” but
also the requirement that “all parties must fall within the jurisdiction created by the
diversity statute.” In this case, the presence of stateless citizens destroyed complete
diversity “just as much as a defendant who shares citizenship with a plaintiff.”

2. Amount-in-Controversy

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 For a discussion of the “good faith” and “legal certainty” tests that apply to
actions filed originally in the district court, consider Maxwell v. Kaylor, ___ Fed. Appx.
___, 2021 WL 2623416 (9th Cir. 2021), the district court dismissed the state law claims
arising out of a property dispute in California for not meeting the amount-in-controversy
requirement. The complaint alleged that plaintiff had purchased and owned an
“exclusive life estate” in a 153-acre property; that plaintiff signed a contract of sale and
recorded the conveyance; and that the contract also gave plaintiff the right to remove and
harvest certain trees. As supporting documentation, plaintiff provided a copy of the
contract, a forester’s declaration about the value of the tree rights, and a lawyer’s
declaration that the property had been listed for sale for $ 6.5 million. The district court
held that the declarations were inadmissible hearsay and did not establish the value of
plaintiff’s property interest, and that “[w]here a plaintiff claims a right that is so
intangible that its value is speculative, subject matter jurisdiction is not satisfied.” 2019
WL 11274866 (N.D. Calif. 2019). Plaintiff appealed pro se. The Ninth Circuit reversed
and remanded:

The district court * * * applied an incorrect standard to evaluate the

amount in controversy. See 28 U.S.C. § 1332(a); Naffe, 789 F.3d at 1039-
40 (setting forth elements of diversity jurisdiction and explaining that the
“legal certainty” test requires a “district court [to] accept the amount in
controversy claimed by the plaintiff unless it can declare to a legal
certainty that the case is worth less”); Geographic Expeditions, Inc. v.
Estate of Lhotka ex rel. Lhotka, 599 F.3d 1102, 1106 (9th Cir. 2010)
(under the legal certainty test, “a federal court has subject matter
jurisdiction unless upon the face of the complaint, it is obvious that the
suit cannot involve the necessary amount” * * *).

How to value an insurance policy in a declaratory judgment action was at issue in

Shelter Mutual Insurance Company v. Spurlin, 2021 WL 2142602 (E.D. Ky. 2021).
An insurance company filed a federal declaratory judgment action to determine the scope
of an insurance agreement with defendants. Related to the federal action were two
pending state actions, each seeking damages, alleging that defendants placed electronic
devices at a funeral home that captured and transmitted video images of individuals using
the men’s restroom. The question was how to value the insurance policies for purposes
of diversity jurisdiction. The Sixth Circuit has not yet decided whether the amount in
controversy in a declaratory judgment action is measured by the policy limits or the value
of the underlying claim, and the circuits are divided on this question. The district court
looked to the value of the underlying claim, on the view that the amount in controversy
should be measured “by the value of the object of the litigation.” The insurance company
alleged that the amount in controversy exceeded $75,000 based on the policy limits, the
underlying state claims, and the cost of providing legal defense. The court found that the
amount in controversy was met:

Here, under the relevant policies, Shelter Mutual must pay the defense
costs of its insured if the provisions are upheld, and Shelter Mutual has
indicated that it is currently covering the costs of counsel in the underlying

22
 state court action. Thus, between legal fees and potential damages, it
cannot be said with legal certainty that plaintiff cannot recover an amount
exceeding $75,000, as alleged in the Complaint [DE 1 at 2]. Nor is there a
plausible indication of bad faith articulated here.

Tigrett v. De Vos, 2021 WL1156626 (W.D. Tenn. 2021), provides a detailed

discussion of calculating the amount in controversy in the context of a trust dispute
removed to federal court. The case involved two trusts and the two plaintiffs are the sole
beneficiaries of each. Plaintiffs sued in Chancery Court of Tennessee to compel the
trustee to provide accountings and financial information. The trustee removed. Plaintiffs
argued that the only monetary damages sought were reimbursement of their fees, costs,
and expenses relating to their action, which, at the time of removal, were $37,129.05.
Defendant argued that the amount in controversy was met “considering the probable
value of the various forms of relief requested in the Complaint.” The district court
initially considered whether the claims should be aggregated because they were
indivisible for purposes of calculating the amount in controversy. But it determined that
they could not be aggregated because they were separate and distinct:

Beyond having the same grantor and trustee, both plaintiffs are not
identically postured, with different language governing their separate
trusts, and with dissimilar interests in the respective trusts. Therefore,
Plaintiffs’ separate claims will not be aggregated for purposes of
calculating the amount in controversy.

Next, the court rejected defendant’s argument that the total value of the trust assets could
be considered in meeting the amount in controversy. Rather, because this was a
declaratory judgment action, what mattered is “the value of the object in the litigation,”
and, in this case, neither the corpus nor any beneficiary ownership was in dispute.
Rather, plaintiffs sought injunctive relief in the form of an accounting and a declaration
of the situs of the trusts. The court then considered how to value an injunction, and
acknowledged that in the Sixth Circuit the doctrine is a “jurisdiction morass,” with courts
divided on whether to determine the value from the perspective of the plaintiff or of the
defendant, and the circuit has expressed a preference for the plaintiff’s perspective, “with
a focus on the economic value of the rights he seeks to protect.” Although the trusts were
valued at $2.8 million, their value was not in controversy; what mattered was the “actual
accounting costs,” and the value of the accounting for each trust could not be aggregated.
The court also considered whether to credit statutorily authorized attorney fees for
purposes of establishing jurisdiction. The court emphasized that defendant had not
provided evidence about future fees; moreover, in the removal context, in which
defendant had the burden to prove the amount in controversy by a preponderance of the
evidence, the court regarded it as “particularly problematic in this case for Defendant to
use the attorney’s fees likely accrued by Plaintiffs by responding to Defendant’s own
removal to federal court as the primary vehicle to get over the jurisdictional goal-line.”
The court also considered and rejected including the defendant’s trustee fees in meeting
the jurisdictional amount and, in the absence of specific Sixth Circuit caselaw, held that
they do not. Finally, although the court held that the amount in controversy was not met,

23
it declined to impose attorney fees under § 1447(c), finding that defendant did not lack an
objectively reasonable basis for seeking removal.

Hale v. Morgan Stanley Smith Barney LLC, 982 F.3d 996 (6th Cir. 2020),
raises the important question of how to calculate the amount in controversy in a diversity
action that seeks to vacate an arbitration award. Plaintiff filed an arbitration action
against his employer to challenge several disciplinary actions and sought damages. The
arbitrator denied the claims and awarded zero damages. Plaintiff then filed suit in federal
court seeking to vacate the award under § 10(a)(3) and § 10(a)(4) of the Federal
Arbitration Act, and invoked jurisdiction under 28 U.S.C. § 1331 and § 1332. The
district court granted defendant’s motion to dismiss for lack of jurisdiction, accepting
defendant’s argument that the amount in controversy was not met because the arbitrator
awarded no damages, and so the amount in controversy was zero. The Ninth Circuit
reversed. In determining the amount in controversy, the district court is to look to the
amount alleged in the complaint. When the action is to vacate an arbitration award, the
amount includes the amount sought in the underlying arbitration. In this case, plaintiff
requested damages of $14.75 million in his complaint filed as a motion to vacate—
“certainly more than the amount necessary to satisfy § 1332(a).”

Note on Judicially Created Exceptions to Diversity Jurisdiction

Tigrett v. De Vos, 2021 WL 1156626 (W.D. Tenn. 2021), previously discussed

in this Memo, also raises an interesting abstention question that straddles personal
jurisdiction doctrine: when is a state proceeding a quasi in rem action for purposes of
abstention as a matter of subject matter jurisdiction? Abstention doctrine is largely
beyond the purview of the 1L course, but the casebook discusses two abstention doctrines
pertinent to diversity jurisdiction—abstention in divorce actions and in probate
proceedings (Casebook, p. 295). Another doctrine that affects diversity actions is known
as the Princess Lida doctrine: “In actions that are in rem or quasi in rem, if a state court
first asserts jurisdiction over the property at issue in a claim subsequently filed in federal
court, the state court may maintain and exercise its jurisdiction over that property to the
exclusion of the federal court.” Princess Lida of Thurn & Taxis v. Thompson, 305 U.S.
456, 466, 59 S.Ct. 275, 83 L.Ed. 285 (1939). Various factors added up to treating the
action as quasi in rem: (1) the suit was directed against defendant in his capacity as
trustee, not his personal capacity; (2) the state action sought damages against the trusts;
and (3) the federal accounting required that the court take control over the trust assets.
Because the Tennessee Chancery Court first exercised jurisdiction over the trusts in quasi
in rem actions, the district court held that it lacked subject matter jurisdiction.

C. The Subject-Matter Jurisdiction of the Federal Courts—Federal

Questions

A number of cases have considered whether state law claims of negligence and
wrongful death, filed against nursing homes for failure to protect against COVID-19,
raise federal law claims under the federal Public Readiness and Emergency Preparedness
(PREP) Act, enacted in 2005 in response to the SARS epidemic of 2003. Most often, the

24
defendant raised the issue in seeking to remove the action to federal court—typically, but
not always, asserting complete preemption. Although the complete preemption issue
may be more appropriate for an advanced course on federal jurisdiction, the general
problem provides a good vehicle for discussing substantiality as a requirement of § 1331
jurisdiction when the claim is created by state law. For an excellent discussion of the
issue and an application of the Grable factors (Casebook, p. 312), see Shapnick v.
Hebrew Home for the Aged at Riverdale, 2021 WL 1614818 (S.D.N.Y. 2021).

D. The Subject-Matter Jurisdiction of the Federal Courts—Supplemental

Claims and Parties

Students sometimes mistakenly equate Allapattah (Casebook, p. 334) with a rule

that permits a named party in a Rule 23 class action to meet the amount-in-controversy
requirement of § 1332(a) through aggregation of the claims of unnamed class members.
For a simple fact pattern reinforming the requirement (and distinguishing it from the
aggregation rule of § 1332(d) under the Class Action Fairness Act), consider Moran v.
Office Depot, Inc., 2021 WL 2456521 (C.D. Cal. 2021). Plaintiff filed a putative class
action asserting state consumer protection claims. Plaintiff did not invoke jurisdiction
under CAFA. The complaint did not seek any specific money sum. The allegations
concerned a chair that plaintiff purchased for $232.13. On these facts, the parties were
ordered to show cause as to why the court should not dismiss for lack of subject matter
jurisdiction.

Floyd v. American Honda Motor Co., Inc., 966 F.3d 1027 (9th Cir. 2020),
brings home the strategic importance of multiple bases of original jurisdiction over the
same claims. In this case, original jurisdiction over state law claims potentially was
available under the minimal diversity requirements of the Class Action Fairness Act, as
well as a matter of supplemental jurisdiction. The suit was brought by owners and lessors
of vehicles against the manufacturer for violation of the federal Magnuson-Moss
Warranty Act and state law, alleging crashes or injuries from defective brakes. Plaintiffs
moved for class certification of the federal and state claims, sought a nationwide
injunction, and alleged diversity jurisdiction under CAFA. The district court dismissed
the federal claim, but then failed to consider whether CAFA provided an independent
basis of jurisdiction for the remaining state law claims. As the Ninth Circuit explained,
“to exercise jurisdiction over a state-law claim pursuant to CAFA, a court does not need
underlying federal-question jurisdiction”; moreover, a separate allegation of CAFA
jurisdiction over the state law claims was not needed, because plaintiffs “had already
generally alleged original jurisdiction over the entire action.” The appeals court thus
vacated the dismissal of the state law claims and remanded. Students might consider
what plaintiffs will have to show to establish jurisdiction over the state law claims on
remand.

Should the fact that a state claim is subject to special procedural requirements if
filed in state court—which might not apply in federal court after Shady Grove—affect a
district court’s discretion to accept or to decline to exercise jurisdiction under § 1367(c)?
This question is a recurring one in suits involving the California Unruh Civil Rights Act.

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As an example, in Gomez v. Fox Rent a Car, Inc., 2021 WL 2634677 (C.D. Cal. 2021),
plaintiff sought injunctive relief under the federal Americans with Disabilities Act and
damages under the Unruh Act. In 2012, California adopted heightened pleading
requirements for Unruh Act claims with the stated goal of deterring baseless suits. These
requirements include imposition of a “high-frequency litigant fee” on “certain plaintiffs
and law firms filing an outsized number of Unruh Act lawsuits. In response, district
courts in California, on the basis of “fairness and comity,” have declined to exercise
supplemental jurisdiction over these claims. In Gomez, the district court ordered plaintiff
to show cause why the court should exercise supplemental jurisdiction, and further (1) to
identify the amount of statutory damages plaintiff seeks to recover, and (2) to support
their responses with “declarations, signed under penalty of perjury, providing all facts
necessary for the court to determine if they satisfy the definition of a ‘high-frequency
litigant’ as provided by Cal. Code Civ. Proc. § 425.55(b)(1) & (2).” Is this approach
consistent with Executive Software (Casebook, p. 342)?

E. The Subject-Matter Jurisdiction of the Federal Courts—Removal

We have included a summary of BP P.L.C. v. Mayor & City Council of

Baltimore, 593 U.S. ___, 141 S.Ct. 1532, ___ L.Ed.2d ___ (2021), in the Rules
Supplement. The Court, seven-to-one, in an opinion by Justice Gorsuch, held that
removal under 28 U.S.C. §1447(d)—even if only in part on the basis of the federal officer
removal statute—affords the appellate court jurisdiction to consider all grounds for
removal rejected by the district court. We recognize that many 1L courses do not have
the time to teach federal officer or civil rights removal, and discuss removal based only
upon § 1331 or § 1332. However, the circumstances of the BP case—a major challenge
by the city of Baltimore against oil companies alleged to have caused climate change—
would likely make it of interest to the student and provides an important context for
considering removal and related questions, which can include: Why do the oil companies
prefer to litigate the case in federal court? What law will apply to the state law claims?
How should federalism affect the scope of Article III jurisdiction?

The effects of Home Depot USA, Inc. v. Jackson (Rules Supplement, Part X) are
beginning to be felt in the lower courts. As an example, consider Bowling v. U.S. Bank
National Association, as Trustee for C-Bass Mortgage Loan Asset-Backed
Certificates Series 2007-SP2, 963 F.3d 1030 (11th Cir. 2020), in which the Eleventh
Circuit reversed the district court’s refusal to remand. Defendants were owners of a
house in Birmingham, Alabama. To pay for the house, defendants obtained a 30-year
mortgage, and over the life of the loan, the note and mortgage were transferred many
times. After many years, defendants became unable to make their loan payments; the
loan servicer accelerated the loan, and the house was sold at a foreclosure sale.
Defendants refused to vacate the property. The company that purchased the house filed a
state court action for ejectment. In response, defendants filed an “answer and
counterclaim,” adding three new parties to the action—the bank to which the loan was
now assigned and two loan servicers. Defendant asserted a mix of state and federal
claims against the new parties. The third-party counterclaim defendants then removed
the entire case to federal court. The district court denied the motion to remand, severed

26
the ejectment action and remanded that claim alone to state court, and then granted
summary judgment on the federal claims in favor of the third-party counterclaim
defendants. After the district court’s decision, the Supreme Court decided Home Depot,
holding that third-party counterclaim defendants are not defendants who can remove
under 28 U.S.C. § 1441(a). On appeal, the Eleventh Circuit easily extended this
reasoning to § 1441(c)—“only a defendant to the original action may seek to remove a
case under §1441(c)”—and reversed the denial of the motion to remand.

Woods v. Ross Dress for Less, Inc., 833 Fed. Appx. 754 (10th Cir. 2021),
offers a simple fact pattern filled with procedural issues—diversity jurisdiction, timing of
removal, and necessary parties. Plaintiff tripped and fell outside a store in Oklahoma,
and sued the store and its manager in Oklahoma state court. The store removed to federal
court invoking diversity jurisdiction before plaintiff could serve the store manager. The
store was a non-Oklahoma corporation with a principal place of business in California;
the store manager, like plaintiff, was a citizen of Oklahoma. The district court refused to
remand and granted summary judgment for the store. The Court of Appeals held it was
error to deny the remand motion because diversity jurisdiction was lacking. Accordingly,
removal was not proper even if the forum defendant rule of § 1441(b)(2), barring removal
“if any of the parties in interest properly joined and served as defendants is a citizen of
the State in which such action is brought,” did not itself prevent removal because the
store manager had not been served when the case was removed. The Court of Appeals
also found that the district court, unlike the court in Caterpillar (Casebook, p. 355), had
not cured the lack of diversity jurisdiction by dismissing the store manager before it
entered summary judgment. The appeals court, while acknowledging its own discretion
to dismiss a dispensable nondiverse defendant, declined to do so because the district court
had considered neither the Rule 21 nor the Rule 19(b) issues. A dissent argued that an
appeals court must sua sponte dismiss such a party to cure jurisdictional defect.

Chapter 5. Venue, Transfer, and Forum Non Conveniens

A. Venue

For a fact pattern dealing with §1391(b)(2) and determining the location of events
or omissions giving rise to the claim, consider Post Acute Medical, LLC v. LeBlanc,
826 Fed. Appx. 163 (3d Cir. 2020). The Third Circuit affirmed the dismissal of the
action for lack of venue in an action brought by a hospital owner and operator against a
company providing database software services alleging breach of contract and violation
of the federal Defend Trade Secrets Act and Computer Fraud and Abuse Act. Locating
where the transaction or omissions took place is not the same, the appeals court
explained, as locating defendant’s contacts with the district. The appeals court rejected
plaintiff’s argument that because it was headquartered in Enola, Pennsylvania, it was
reasonable to infer that the trade secrets at issue were created in Enola. Rather, the court
emphasized that plaintiff is a Delaware corporation with operations throughout the
United States, undercutting the argument that trade secrets “must necessarily have been
created in the Middle District of Pennsylvania.” Moreover, the events that gave rise to

27
the claim focused on the conduct of a Texas company and did not show a connection to
the Middle District of Pennsylvania.

B. Transfer of Venue in Federal Courts

Twin Flames Universe.com, Inc. v. Cole, 2021 WL 1105247 (E.D. Mich.

2021), discussed earlier in this Memo, also involved a motion to transfer under either 28
U.S.C. § 1406(a) or § 1631. The court denied the motion, finding the interest of justice
did not warrant transfer “in light of Plaintiffs’ apparent bad faith bringing this action in
an improper forum in order to increase the litigation costs for Defendant.” Nor could the
court find any prejudice in refusing to keep the case alive at this stage; the case was still
in its “infancy,” and there was no pressure from the limitations period to file a new suit.
What kind of proof should be required to raise a suggestion of bad faith?

Franco v. Mabe Trucking Company, 991 F.3d 616 (5th Cir. 2021), reads like
an exam question. On November 24, 2015, Franco was in a car accident with a truck
owned by defendant and operated by defendant’s employee. The accident took place in
Louisiana, three miles from the Texas border. On November 22, 2016, Franco sued the
company and served the company on January 20, 2017. The district court found that it
lacked personal jurisdiction and transferred the case to the Western District of Louisiana,
the district in which the accident occurred. Defendant then moved for summary
judgment, arguing that the case was out of time under Louisiana law, which has a one-
year prescriptive period for tort claims and provides for tolling only when a party files
suit “in a court of competent jurisdiction and venue”; if a party files suit in a court of
incompetent jurisdiction or improper venue, however, prescription is interrupted “only as
to a defendant served by process within the prescriptive period. Defendant argued that
plaintiff’s claims were prescribed because he filed suit in the Texas federal district court,
which was an incompetent court, and failed to serve Mabe within the one-year
prescriptive period. The Western District of Louisiana initially denied the motion,
relying on 28 U.S.C. § 1631, but then on a motion for reconsideration a different judge
reversed the ruling and dismissed the claims with prejudice. On appeal, as a matter of
first impression, the Fifth Circuit held that § 1631 permits a district court to transfer a
case for lack of personal, as well as subject matter, jurisdiction, joining all circuits that
have considered the question. The district court cited only § 1406 in its transfer order,
but did recite that the court lacked personal jurisdiction, that venue was improper, and
that transfer was warranted in the interests of justice. However, because the language of
§ 1631 is mandatory (the court “shall transfer”), and because it applied in this situation,
the Fifth Circuit, again joining other circuits, held that § 1631 applied notwithstanding its
omission from the district court’s order. The appeals court then considered whether the
Louisiana prescriptive law made the action untimely. The decision provides a clear and
succinct analysis of the Erie issues; Erie was not implicated, the appeals court explained,
because a valid federal statute governed the matter at hand: the statute “was specifically
designed to protect federal litigants from the forfeiture that could result from a statute of
limitations running after a plaintiff's mistakenly filing an action in a court that lacks
jurisdiction if the interests of justice so demand.” Under this analysis, plaintiff was
deemed to have filed his suit on November 22, when he filed suit in Texas federal court,

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and thus interrupted the one-year prescriptive period under state law, rendering the claim
timely.

In Vargo v. D & M Tours, Inc., 841 Fed. Appx. 794 (6th Cir. 2020), a pro se
plaintiff sued three defendants for damages arising from a multi-vehicle accident, filing
in the district where he lived. The defendants objected to venue, but the plaintiff never
appealed the district court’s dismissal order. Instead, he filed a “Motion to Vacate
Dismissal and Reopen Case for Purposes of Transfer,” requesting a transfer of venue
under § 1406(a). The district court did not consider transfer under § 1631. The Sixth
Circuit held that the plaintiff’s filing of the action in an improper forum was not a
“mistake” under Rule 60(b) and thus was not sufficient to support a motion for relief
from judgment.

C. Forum Non Conveniens

What deference should the court give to a domestic plaintiff’s forum choice when
the suit involves multiple plaintiffs, most of whom are not United States citizens? That
question was at the core of Otto Candies, LLC v. Citigroup, Inc., 963 F.3d 1331 (11th
Cir. 2020). The decision also highlights how the assessment of forum non conveniens
can change as a litigation proceeds and discovery brings new information to light. The
district court dismissed a suit by two United States plaintiffs and 37 foreign plaintiffs
against a United States defendant alleged to have engaged in a fraudulent scheme that
took place in the United States and in Mexico. The Eleventh Circuit reversed: “The
deference owed to the forum choice of domestic plaintiffs cannot be reduced solely
because they chose to invest in a foreign entity and may have expected to litigate abroad
on certain matters.” Whether the United States plaintiffs were merely nominal could not
be assessed at this early stage in the action and defendant had taken no discovery on the
issue. Emphasizing that the fraudulent scheme was alleged to have largely taken place in
the United States, the appeals court applied a presumption that, “at least initially,” “a trial
here would be more convenient (or would at least not be inconvenient).” That plaintiffs
had chosen to sue only one defendant—and that the defendant was a United States
company—also figured strongly in the analysis on appeal. Moreover, defendant had
presented no positive evidence on the location of documents and witnesses, key factors in
assessing the private interest under Piper. The appeals court discussed whether, on
remand, the district court could undertake a “split” or “bifurcated” analysis, separating
the domestic from the foreign plaintiffs, and expressed concern about such an approach:

If the domestic plaintiffs are permitted to move forward in the district

court, then dismissing the foreign plaintiffs would force Citigroup to
defend against two actions (assuming the foreign plaintiffs refile in
Mexico). That could defeat the purpose of forum non conveniens,
particularly if the parties intend to rely on the same documents and
witnesses in both countries.

Finally, the decision offers a long and thoughtful discussion of the kinds of conditions
that a district court may impose as part of a finding that an alternative forum is adequate.

29
 For a straightforward application of the Piper factors (Casebook, p. 386), consider
Bintu v. Delta Airlines, Inc., 2020 WL 3404925 (N.D. Ga. 2020). Plaintiff, a resident
of Germany with “no apparent connection to the United States other than family and
occasional travel,” sued Delta for injuries suffered in flight when a flight attendant
pushed a beverage cart into his knee, leading to medical treatment in Germany. As a
threshold matter, the fact that the claims arose under the Montreal Convention did not bar
the application of forum non conveniens. As a foreign national, plaintiff’s forum choice
was entitled to minimal deference. The court also found that Germany was an adequate,
alternative forum despite plaintiff’s arguments that Germany, as a civil law system, has
more restrictive discovery than the United States and that a German court might be
expected to misapply Georgia law.

Nandjou v. Marriott International, Inc., 985 F.3d 135 (1st Cir. 2021),
involved a wrongful death action by the estate of a father and child who died in a hotel
swimming pool in Montreal, Canada. The First Circuit reversed the district court’s
dismissal of the action on grounds of forum non conveniens, and affirmed its ruling
finding personal jurisdiction. Judge Barron’s opinion is clear and provides an excellent
discussion of when in-forum marketing activity can satisfy the relatedness prong of
personal jurisdiction, as well as of the private and public factors for forum non
conveniens. The facts also could provide the basis for a problem dealing with removal
and diversity jurisdiction.

Discovery may produce new facts that are relevant to determining the
convenience of a forum, but a party’s ability to conduct discovery in the forum may
confirm that the forum is indeed convenient. The circuits take somewhat different
approaches to the question of the timeliness of a forum non conveniens motion. The
Third Circuit analyzes timeliness as both a private- and a public-interest factor. Lony v.
E.I. Du Pont de Nemours & Co., 935 F.2d 604, 613 (3d Cir. 1991). The Fifth Circuit
analyzes timeliness as an aspect of the private-interest factors. Trivelloni-Lorenzi v. Pan
Am. World Airways (In re Air Crash Disaster Near New Orleans, La. on July 9, 1982),
821 F.2d 1147, 1165 (5th Cir. 1987), vacated on other grounds, 490 U.S. 1032, 109 S.Ct.
1928, 104 L.Ed.2d 400 (1989). The Sixth Circuit analyzes timeliness separately from the
private- and public-interest factors. Rustal Trading US, Inc. v. Makki, 17 Fed. Appx. 331
(6th Cir. 2001). The Eighth Circuit took a pragmatic approach in Estate of I.E.H. v.
CKE Restaurants, Holdings, Inc., 995 F.3d 659 (8th Cir. 2021), and held that a delay
of 18 months in filing the motion was sufficiently untimely as to warrant reversal of the
district court’s dismissal of the action. The suit was a wrongful death action brought by
parents after their six-year-old child was electrocuted while playing in a restaurant’s
indoor playground in Amman, Jordan. The appeals court focused on three
considerations. First, the purpose of forum non conveniens, to ensure that a forum is
convenient, was best served by encouraging early motions to promote judicial economy.
Second, litigation conduct in the original forum “belies the claim that the forum is truly
inconvenient.” Third, considering the timing may help to prevent gamesmanship.
Defendant in this case knew all of the factors that formed the basis of their motion when
plaintiffs filed their complaint and so postponing the motion until discovery was not

30
justified. Students might be asked to reconsider how timeliness affected the Court’s
decision in Piper (Casebook, p. 386).

We note a new chapter in the decades-long litigation involving indigenous

peoples of the Amazon rain forest and Texaco, now owned by Chevron. Chevron v.
Donziger, 990 F.3d 191 (2d Cir. 2021). In 1993, a group of indigenous Amazonian
plaintiffs represented by Steven Donziger sued Texaco in the Southern District of New
York for alleged environmental harm and personal injury stemming from the company’s
oil exploration and drilling in Ecuador. Years later, the district court dismissed the case
on grounds of forum non conveniens, holding that Ecuador was an appropriate alternative
forum with sufficient legal recourse, and that public and private factors leaned in favor of
dismissal. Aguinda v. Texaco, Inc., 142 F. Supp. 2d 534 (S.D.N.Y. 2001). In an unusual
move, the plaintiffs re-filed in Ecuador in 2003 (now against, Chevron, which had
acquired Texaco). The Ecuadoran court awarded compensatory and punitive damages.
In 2011, Chevron sued plaintiffs’ lawyer and his clients in the Southern District of New
York, alleging corruption in the Ecuadorian case and RICO violations. Chevron Corp. v.
Donziger, 768 F. Supp. 2d 581 (S.D.N.Y. 2011). The district court ruled in Chevron’s
favor, blocking enforcement of the judgment. Both sides separately filed appeals in
Ecuador, and the appellate judgment affirmed plaintiffs’ success in the initial Ecuadorian
judgment but eliminated the original punitive damages. After a few intervening cases,
the Second Circuit affirmed the RICO corruption charge in Chevron Corp. v. Donziger,
833 F.3d 74 (2d Cir. 2016). In 2021, the district court found plaintiffs’ counsel to be in
civil contempt and ordered payment of substantial court costs and attorneys’ fees to
Chevron. The Second Circuit held that the award of costs under Federal Rule 54(d) was
not error, affirmed the district court’s finding that plaintiffs’ counsel violated various
terms of its injunction, but erred in finding counsel in contempt of a bar on raising funds
by selling interests in the Ecuadorian judgment. As part of the civil contempt finding, as
of March 2021, counsel had spent about 21 months in home confinement. The Second
Circuit, in a separate unpublished opinion, raised questions whether “continued home
confinement will exceed the bounds of reasonableness.” United States v. Donziger, ___
Fed. Appx. ___, 2021 WL 1165888, n.4 (2d Cir. 2021).

D. Venue-Selection Agreements

Peak v. TigerGraph, Inc., 2021 WL 1340855 (D. Mass. Apr. 9, 2021), offers a
compact problem that combines venue-selection agreements, transfer, and Erie. During
the pandemic, defendant fired plaintiff and did not pay him any commissions for work
previously done. Plaintiff threatened litigation, and defendant instead filed a declaratory
judgment in California to determine that commissions were not owed. Plaintiff removed
the case to federal court and moved to dismiss for lack of personal jurisdiction or
improper venue or, in the alternative, to transfer to the District of Massachusetts. The
district judge denied the motion. The next month, plaintiff sued in federal court in
Massachusetts, claiming, among other violations, breach of the Massachusetts Wage Act.
Defendant moved to transfer venue under 28 U.S.C. § 1404(a) to the Northern District of
California based on a forum-selection clause. Relying upon Atlantic Marine, the district
court presumed that the clause should be given controlling weight when applying the

31
statute except in exceptional circumstances. Plaintiff argued that the clause did not apply
because his claims arose under the Compensation Plan, which contained no such clause
and which, by its terms, superseded all other agreements between the parties. In the
alternative, he argued that the clause contravened Massachusetts public policy. As a
threshold matter, the court determined that the clause, like any contract, should be
interpreted based on language, purpose, precedent, and policy. It noted that although the
First Circuit has not yet resolved whether forum-selection clauses are procedural or
substantive, as a practical matter the distinction made no difference in this case because
no material differences existed between federal common law and state law governing the
issue. Interpreting the Compensation Plan, the court determined it did not apply to
plaintiff’s claims and, instead, the employment agreement applied. The court easily
found that the clause was prima facie valid under precedent finding that California would
faithfully apply Massachusetts law and defendant’s concession that Massachusetts law
would apply.

Moore v. Katin-Borland, 2020 WL 5531501 (E.D. Mich. 2020), is a legal

malpractice suit related to the NFL concussion settlement agreement (Casebook, p. 818).
The fact pattern likely will interest many students and also provoke discussion about
professional norms. In 2009, the widow of a former NFL player, located in Michigan,
contacted law firms in New York and in Massachusetts in response to information posed
on the Massachusetts firm’s website about ongoing litigation for former NFL players. At
the time of her husband’s death, the county medical examiner preserved brain tissue for
later investigation to determine whether his death was related to football related brain-
injuries. Plaintiff executed a retainer agreement with counsel from both firms in which
defendants promised to “prosecute claims on behalf of [her] late husband’s estate for
wrongful death, and traumatic brain injuries he sustained while playing in the NFL.” The
retainer agreement included a forum selection clause, which read: “It is agreed that any
disputes arising under this agreement or the services rendered here under [sic] shall be
venued [sic] in New York and governed by New York law” [bracketed material in
original]. In 2012, New York counsel filed suit as part of multidistrict litigation in the
Eastern District of Pennsylvania that eventually became part of a class that was certified
and settled in 2014 and then amended in 2015. Under the agreement, persons asserting
claims based on a post-mortem diagnosis of traumatic brain injury were required to
obtain the diagnosis before the settlement’s final approval on April 22, 2015. Defendants
missed the deadline, resulting in plaintiff’s legal malpractice suit, filed in federal court in
Michigan. Defendants moved to dismiss for lack of personal jurisdiction or,
alternatively, to transfer based on the forum-selection clause. The Sixth Circuit treats
forum-selection clauses as procedural, and so as an initial matter the district court
determined that federal law governed the enforceability of the clause. The court rejected
plaintiff’s argument that the clause was unconscionable and so unenforceable. While
acknowledging the extreme imbalance of power between plaintiff and the defendant law
firms, the court concluded that the firms lacked monopolistic power and that the clause
was not substantively unconscionable under a shock-the-conscience standard. Nor did
plaintiff show that litigating in New York, rather than in Michigan, would be so
inconvenient as to be unreasonable, and public interest factors—the relative congestion of
New York federal courts—did not change the balance. Relying upon Carnival Cruise

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(Casebook, p. 172), the court explained:

[Plaintiff] suggests that nearly every relevant witness in her case is

Michigan-based. She argues that she is a widowed pensioner of modest
financial means and cannot come to New York to pursue her case, while
the defendants are sophisticated attorneys and firms capable of litigating in
Michigan. But those observations, although undoubtedly true, do not
demonstrate that Moore was exploited or treated unfairly. She signed the
agreement without consultation, without understanding what “venue”
meant; but she was not tricked or forced into consenting to the forum
selection clause. She could have followed up with the law offices to
review the terms of the retention agreement that she voluntarily signed
after receiving it in the mail, but she did not. Courts have long recognized
forum selection clauses as a legitimate means of allocating in advance the
relative inconvenience of one party or another having to travel to
prosecute or defend a claim.

The court denied the motion to dismiss and granted the motion to transfer venue.

Note on the Panel on Multidistrict Litigation

In re National Prescription Opiate Litigation, 976 F.3d 664 (6th Cir. 2020),
discussed in the section of this Memo on Class Actions, forms the background for In re
McKinsey & Co., National Prescription Opiate Consultant Litigation, ___ F. Supp.
3d ___, 2021 WL 2351628 (JPML 2021). The discussion of whether to centralize
litigation against McKinsey, and, if so, whether to create a new and separate MDL for
actions against McKinsey—rather than having the actions transferred to the ongoing and
“procedurally mature” national litigation—is at the heart of the decision. However, the
court also noted an important issue of personal jurisdiction. In In re Delta Dental
Antitrust Litigation, ___ F. Supp. 3d ___, 2020 WL 7382602 (JPML 2020), the
Judicial Panel rejected the argument that Bristol-Myers Squibb (Casebook, p. 157)
unsettled MDL practice and reaffirmed that the transferee court’s alleged lack of personal
jurisdiction did not bar transfer. Rather, the parties could challenge jurisdiction in the
transferor court after transfer. In McKinsey, the Judicial Panel declined to revisit that
decision.

In re COVID-19 Bus. Interruption Protection Insurance Litigation, 482 F.

Supp. 3d 1360 (JPML 2020), addressed COVID-19 business interruption insurance
coverage for various industries that were affected by government closures due to the
pandemic. Specifically, these cases ask whether the general presence of COVID-19
caused “loss” or “damage” to property and whether the various insurers’ policy
exclusions are sufficient to preclude the plaintiffs’ claims. The court noted that § 1407
requires that consolidation not merely address common factual questions but also
promote efficiency and justice. In light of this, the Panel rejected the motion to
consolidate because, since the actions were against more than 100 insurers and did not
involve a common defendant, centralization would not have led to increased convenience

33
or efficiency. The plaintiffs subsequently divided the litigation up by insurer, and the
Panel heard arguments to consolidate five smaller dockets. (Not all COVID-19
consolidations were approved. Factors that tilted in favor of consolidation included
whether the insurers were regional companies operating in only a few states, making the
litigation more manageable, see, e.g., In re Society Ins. Co. COVID-19 Business
Interruption Protections Insurance Litigation, 492 F. Supp. 3d 1359 (JPML 2020).
Consolidation was rejected when defendant was not a single insurer but rather a
collection of over 90 “syndicates” with no standardized policies or forms, see, e.g., In re
Certain Underwriters at Lloyd’s, London, COVID-19 Business Interruption Protection
Insurance, 492 F. Supp. 3d 1355 (JPML 2020)).

Chapter 6. Ascertaining Applicable Law

A. State Law in the Federal Courts

Orlando v. Government Employees Insurance Co., 2021 WL 1342521 (D.

Nev. 2021), presented what the district court called “a classic Erie doctrine question”:
whether the federal court was required to apply a state law that allowed an elderly party
to expedite a trial date. Plaintiff characterized the state law as giving rise to a substantive
right; the insurer not surprisingly characterized it as procedural, and there was no case
law on either side. The district court read the provision to permit a motion for an earlier
trial date, did not see the rule as outcome determinative, and stated that the rule “has no
effect on the rights or remedies available in the underlying suit.” Looking to Ninth
Circuit precedent, the district court emphasized that the jury trial right is a procedural
right addressing a particular “mode of enforcing certain substantive rights”; likewise,
federal courts have treated state expedition laws as procedural. Further, the district court
declined to exercise inherent authority to expedite the trial date, emphasizing that the
parties had stipulated to a discovery plan and scheduling order that was entered by the
court.

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 Schmitz v. Colo. State Patrol, 841 Fed. Appx. 45 (10th Cir. 2020), provides an
excellent fact pattern for discussing whether a state law is substantive or procedural for
Erie purposes. A state patrol officer arrested plaintiff after a car crash, found him to be
impaired and disoriented, and arrested him. While in detention, medical tests came up
negative for drugs but showed blood in the urine, and the arrestee manifested an elevated
pulse, confusion, and lack of control over bodily functions. No one at the jail provided
medical support. The next day, plaintiff was released, went to an emergency room, and
was diagnosed with acute kidney injury and acute hepatic encephalopathy, which caused
his confusion. Plaintiff sued the state patrol officer and others under 42 U.S.C. § 1983
and Colorado tort law. Colorado’s Immunity Act provides public employees with a
limited sovereign immunity turning on whether the acts or omissions causing injury were
willful and wanton. Colorado statutes and judicial decisions also set out special
procedures for assessing claims that implicate sovereign immunity. These procedures
include heightened pleading requirements and determination by the trial court, not the
jury, of whether immunity attaches. On appeal, both parties assumed that these
procedures applied in the federal court, without briefing the Erie issue. The Tenth
Circuit, acknowledging that without briefing it was “ill-equipped to conduct the kind of
intensive analysis that Erie and Shady Grove generally require,” nevertheless concluded
after an “abbreviated review” that the Colorado procedures did not apply. What if the
state had included the procedures in its substantive law defining immunity? Would that
have changed the result?

For another example, consider Vansill v. Dollar Tree Stores, Inc., 2021 WL
860457 (E.D. Tex. 2021), a slip-and-fall case removed to federal court on the basis of
diversity jurisdiction. Under Texas law, plaintiff has the burden of providing the actual
amount, necessity, and reasonableness of past medical expenses. In addition, Texas Civil
Practice and Code § 18.001 allows plaintiff to submit affidavits to prove the necessity
and reasonableness of medical expenses. This provision also sets out timing and notice
requirements, as well as requirements for counter-affidavits. Both Texas and federal
courts have attributed cost saving goals to these procedures, for they save the plaintiff the
expense of having to hire an expert. Plaintiff moved the court to determine whether the
Texas affidavit and notice rules applied. Defendant failed to respond and only after court
order did so. The court’s analysis trained on Federal Rule of Evidence 802, which bars
hearsay statements, and found no direct conflict because of the flexibility afforded by the
residual hearsay exception. Finding no conflict, the court then undertook an Erie
analysis, closely following Fifth Circuit precedent looking to four “touchstones”:

• whether the state law is outcome determinative;

• whether the state law is “bound up” with the state's substantive rights and
obligations;
• whether the state law affects forum shopping behavior; and
• whether applying state law will avoid inequitable administration of the laws.

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In applying the outcome-determinative test, the court was guided by the goal of
“discouraging forum shopping and avoiding inequitable administration of the laws,” as
set out in Gasperini (Casebook, p. 453). Under these standards, the court concluded the
affidavit rule was substantive. In particular, the court followed Fifth Circuit precedent
finding that if “Section 18.001 did not apply in federal court, some personal injury
plaintiffs could be ‘priced out’ of the federal judiciary and ‘may settle on less
advantageous terms compared to their state counterparts.’” The court continued: “Thus,
the applicability of Section 18.001 ‘significantly affect[s] the results” of litigation:
Indeed, the costs of retaining, deposing, and litigating the qualifications of experts would
render it impracticable for many injured parties to litigate in federal court.” [quotation
marks omitted]. The court also concluded that it was not bound by the Section’s timing
and notice requirements, which it called “clearly procedural,” and did not displace the
Federal Rules and local rules on scheduling.

Briseño v. Henderson, 998 F.3d 1014 (9th Cir. 2021), also discussed in the
section on Class Actions, considered and rejected the argument that the Erie doctrine
barred “the application of Rule 23(e) to a class settlement where state substantive law
governs attorney’s fees in fee-shifting cases,” but only because the challenge was to the
fairness of the settlement, and not to the fairness of the fees: “Thus, Erie’s effect on fee-
shifting law, if it even has one, is simply not implicated in this appeal. Instead, this case
concerns Congress’s simple command that all federal district courts must withhold
approval of any class settlement, absent a finding that it is ‘fair, reasonable, and
adequate.’” The court included some noteworthy observations:

Every year, tens of thousands of first year law students learn about Erie R.
Co. v. Tompkins, and, soon after that, they become second-and-third-year
law students with poor understanding of the doctrine. Some of these
students take the bar exam, fail, and try again or do other things. Others
pass and become attorneys who still do not understand Erie. Granted, the
difference between substantive and procedural law is sometimes fuzzy. *
* * That said, a “Federal Rule of Procedure is not valid in some
jurisdictions and invalid in others—and valid in some cases and invalid in
others—depending [solely] upon whether its effect is to frustrate [state
law].” Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559
U.S. 393, 409 (2010).

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 In In re Pork Antitrust Litig., 495 F. Supp. 3d 753 (D. Minn. 2020), three
putative classes alleging that pork producers and integrators conspired to limit the supply
of pork and fix prices in violation of federal and various state laws, defendants moved to
dismiss some of the state antitrust claims for state-specific reasons, arguing, with respect
to the Illinois claims, that state law barred plaintiffs from bringing a class action. The
district court treated the rule of Shady Grove (Casebook, p. 462) as “unclear”; moreover,
the Eighth Circuit has not yet held whether, in applying the Marks rule (Casebook, p.
139), the court is to look at the reasoning or the results of the various opinions, but
seemed to prefer the former. Treating Justice Stevens’s concurrence as the narrowest
result, the court reasoned that some procedural rules might survive even when in conflict
with a federal rule if sufficiently intertwined with substantive law. In the end, the court
decided that the Illinois ban on certain class actions was solely procedural and denied the
motion to dismiss. Whether class-wide relief was available under state law in a diversity
action likewise was raised in Opheim v. Volkswagen Aktiengesellschaft, 2021 WL
2621689 (D.N.J. 2021), but the court deferred consideration of the issue until the class
certification stage, reasoning that even if class treatment was not available because
various state pre-suit requirements were not met, plaintiffs nevertheless would maintain
the actions individually.

The lower courts continue to be divided on whether state “SLAPP” rules—rules

intended to strike a complaint as a strategic lawsuit against public participation—bind the
federal courts, and the question is ripe for class discussion or an examination problem.
Some federal courts have found that these state rules directly conflict with Federal Rule
12 and 56, at least as those rules have been interpreted by the Supreme Court. E.g.,
Nunes v. Lizza, 476 F. Supp. 3d 824 (N.D. Iowa 2020) (California SLAPP rules
preempted by Federal Rules in suit by a California Congressmember against a journalist
and media company based on claims of defamation stemming from an article about
illegal employment of undocumented workers by member’s relatives).

In CoreCivic Inc. v. Candide Grp. LLC, 2021 WL 1267259 (N.D. Cal. 2021),
also a SLAPP suit, the conflict was between a state statute that gave an automatic right to
attorney’s fees and Federal Rules 11 and 12. The district court held that the state statute
created a substantive right to recover attorney’s fees under specified conditions—“[t]he
recovery is automatic for an alleged defamer who prevails where the speech touches upon
a public issue”—and on that basis held there was no procedural conflict with Rule 11 and
the state rule applied. Students might be asked to identify the best arguments on appeal
to characterize the fee provision as procedural.

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 JBI Electrical Systems, Inc. v. KW AQE, LLC, 2021 WL 1061995 (D.N.M.
2021), includes a very long, treatise-like discussion of forum selection clauses, rules for
ascertaining state law when there is no state supreme court decision on point, the
standards for motions under Rule 12(b)(6) and motions for judgment on the pleadings
under Rule 12(c), and the rules for converting a motion to dismiss into a motion for
summary judgment. The case itself involved a dispute for unpaid work under a license
that had lapsed; plaintiff alleged unjust enrichment. New Mexico law governed the
dispute; the merits turned on whether plaintiff substantially complied with its licensing
requirements. State law seemed to be internally inconsistent: on the one hand, an
unlicensed contractor is not entitled to retain funds charged for the work; on the other
hand, a substantially compliant contractor may foreclose on a mechanic’s lien for the
unpaid work. To resolve the conflict, the district court turned to the New Mexico rule of
avoiding unreasonable interpretations that would lead to the absurd result of requiring
disgorgement of funds and, further, that unjust enrichment claims are disfavored when
the parties are not in contractual privity and relief may be available from the general
contractor. The district court also held that the contract’s forum selection clause did not
require transfer of the action because the clause was void under state law; as a
construction contract for an improvement to land in New Mexico, state law barred
litigation or arbitration in a state other than New Mexico. The only precedent on this
issue was a prior decision by the sitting district judge in another case.

Sonner v. Premier Nutrition Corp., 971 F.3d 834 (9th Cir. 2020), brings
together questions of remedy, Guaranty Trust v. York (p. 415), the current scope of
federal common law, and strategic choices between a bench or jury trial. Plaintiff filed a
putative class action in federal court in California claiming defendant falsely advertised
“Joint Juice,” a nutritional product. The complaint, as amended, sought damages,
restitution, and injunctive relief under the California Unfair Competition Law and
injunctive relief under the Consumers Legal Remedies Act, and included a jury demand.
Four years into the case, and two months before a scheduled trial, plaintiff sought to
amend the complaint a second time to drop the damages claim. The district court granted
the request and vacated the jury request. Defendant then moved to dismiss the restitution
claim arguing that under California law, restitution was available only if plaintiff lacked
an adequate legal remedy. The district court granted the motion, and also denied
plaintiff’s request to amend the complaint to reallege the damages claim. On appeal of
the granting of the Rule 12(b)(6) motion, the Ninth Circuit discussed a threshold issue:
whether the circuit court was bound to follow state law governing the availability of an
equitable remedy or whether federal equitable principles independently applied. The
opinion provides an excellent summary of the Erie/York line of cases, joining those
circuits that have held that “state law cannot circumscribe a federal court’s equitable
powers even when state law affords the rule of decision.” On this view, the governing
rule was the traditional federal principle that equity is a last resort, requiring a showing of
inadequacy of legal remedies, which plaintiff could not show—the amount of money
requested for restitution was the same as the damages requested. Thus, relying on federal
law produced the same result as under state law—equitable restitution would not be
ordered when plaintiff had an adequate remedy at law. Nor did the district court abuse its
discretion in denying the motion to amend, having cautioned plaintiff prior to the second

38
amendment about the risks of voluntarily dismissing the damages claim.

Franco v. Mabe Trucking Company, 991 F.3d 616 (5th Cir. 2021), discussed
earlier in this Memo, held that 28 U.S.C. § 1631, which mandates inter-district transfers
when an action is filed in a court that lacks jurisdiction, determines when and where an
action has been originally filed, and that the Erie doctrine did not require the application
of state law to that question.

B. The Problem of Ascertaining State Law

For an application of the Klaxon rule (Casebook, p. 476), consider Mt. Hawley
Insurance Company v. Easter Perimeter Apartments, 2021 WL 2170426 (11th Cir.
2021). A commercial general liability insurer sued the owner and manager of an
apartment complex located in Georgia, seeking a declaration that the insureds were not
owed coverage because of a two-year delay in notifying the insurer of an incident
triggering liability (an assault and murder at an apartment complex owned by the
insured). Whether the delay would bar coverage turned on whether Georgia or California
law applied to the suit. The district court, located in Georgia, looked to Georgia’s choice
of law rules to determine the rule of decision. Under Georgia’s lex loci contractus choice
of law rule governing contracts, “an insurance policy is governed by the law of the state
where the policy was issued and delivered to the named insured unless that other state’s
law is contrary to Georgia public policy.” As the district court noted, it was “a close call
as to which state’s law would apply”: the parties disputed to which state the policies were
delivered. However, Georgia conflicts law recognized an exception when the law of the
foreign state is common law; when no statute is in play, Georgia courts “apply the
common law as developed in Georgia.” This rule, referred to as the “presumption of
identity” rule, builds on the pre-Erie notion “that there is one common law that can be
properly discerned by wise judges, not multiple common laws by which judges make law
for their various jurisdictions.” Moreover, when faced with a contract dispute, even an
insurance dispute, Georgia courts do not look to the common law as developed by sister
states, other than in those cases in which the law derives from the foreign state’s statutes.
Finding no California statute on point, the Eleventh Circuit agreed with the district
court’s decision to apply Georgia law—which relieves an insurer of a duty to provide
coverage if the insured failed to comply with a notice requirement. By contrast (as
students may remember from the McGee decision (Casebook, p. 99)), California law is
more protective of the insured.

Doe v. University of St. Thomas, 972 F.3d 1014 (8th Cir. 2020), is an excellent
example of the interaction of Erie and Rule 56. After Doe was suspended from a private
university for sexual misconduct, Doe filed a Title IX suit alleging that the university’s
disciplinary procedures were arbitrary, and that the university breached the state duty of
care owed to Doe. The district court granted summary judgment to the university. On
appeal, the Eighth Circuit reviewed the district court’s interpretation of state law de
novo—the parties disputed whether the state duty of care required the defendant to act
reasonably or only to refrain from acting arbitrarily when investigating non-academic
misconduct. Minnesota law applied, but the Minnesota Supreme Court had not yet

39
decided what duty of care private universities owe to their students. An intermediate
court, however, had imposed an “arbitrary” standard to a private university’s non-
academic expulsion. The district court adopted plaintiff’s proposed reasonable care
standard, and the Eighth Circuit reversed:

Although federal courts applying Minnesota law must predict how the
Minnesota Supreme Court would rule, * * * we respectfully think the
district court predicted the wrong standard here. The district court had no
reason to disregard * * * the only Minnesota court decision to apply the
common law duty to a private university’s non-academic expulsion. * * *
The district court erred by * * * formulating a reasonable care standard
that no Minnesota court has adopted.

We include a summary of Mckesson v. Doe, 592 U.S. ___, 141 S.Ct. 48, 208
L.Ed.2d 158 (2020), in the Rules Supplement. The case itself arose out of a
demonstration organized in Baton Rouge, Louisiana to protest a shooting by a local
police officer. During the protest, another police officer was injured, and he sued the
organizer of the demonstration for negligence, seeking monetary damages. The Supreme
Court, in a per curiam opinion, vacated the Fifth Circuit’s decision and held that it should
have certified two state-law questions to the Louisiana Supreme Court. The Court did
not say that certification was mandatory, but emphasized that in certain circumstances it
is “advisable”—when the issues are novel, “peculiarly calling for the exercise of
judgment by the state courts,” and to ensure that constitutional issues are not prematurely
resolved.

The Supreme Court in Mckesson seemed to assume that certification would be an

option to the federal court—which may not, however, always be the case, as illustrated
by Thai Meditation Association of Alabama, Inc. v. City of Mobile, Alabama, 980
F.3d 821 (11th Cir. 2020). A Buddhist religious organization and landowners sued the
city after denial of their zoning application to construct a Buddhist meditation center in a
residential neighborhood. Claims were brought under the federal Religious Land Use
and Institutionalized Persons Act, 42 U.S.C. §1983, and the Alabama Religious Freedom
Amendment. The district court read the state statute in lockstep with the federal, despite
differences in text and history—in particular, it applied the federal standard of
“substantial burden,” although that phrase apparently had been intentionally omitted from
the state law. The Eleventh Circuit reversed: “Under Alabama law, our job (giving it our
best Erie guess) is to ‘interpret [ARFA’s] language to mean exactly what it says.’ IMED
Corp., 602 So. 2d at 346. And what ARFA says is that any burden—even an incidental
or insubstantial one—suffices to trigger strict scrutiny.” (Alterations in original.) Why
didn’t the Eleventh Circuit certify the substantial-burden question to the Alabama
Supreme Court? At oral argument, the panel directed the parties to file supplemental
briefs on the possibility of certification under Alabama Rule of Appellate Procedure 18,
which provides “that a federal court may certify a question when three conditions are
met: (1) the question is one concerning the ‘law of this State’ (i.e., Alabama); (2) the
question is ‘determinative of said cause’; and (3) ‘there are no clear controlling
precedents’ from the Alabama Supreme Court.” The appeals court found that the

40
substantial-burden question did not seem to fit these requirements because it would not
be determinative of the entire case or even of the ARFA claim. But the Eleventh Circuit
underscored that the certification rule was not itself clear; ought the federal court have
given the state court an opportunity to decline to answer? Or was the decision to avoid
delay and expense more valuable?

For an excellent synthesis and application of Shady Grove (Casebook, p. 462) in

the bankruptcy context, consider Jones v. Lexington Health Servs. Dist., Inc. (In re
Jones), 618 B.R. 757 (Bankr. D.S.C. 2020). Debtors in three separate Chapter 7 cases
filed a class action against a South Carolina health services district to challenge the
seizure of their tax refunds to pay medical debts despite notice of their bankruptcy filings.
The South Carolina Revenue Procedures Act barred class actions against certain state
entities and defined their capacity for being sued in class actions. The bankruptcy court
held that the state class-action ban did not apply. First, the fact that the court was
exercising bankruptcy, and not diversity, jurisdiction did not alter the applicability of
Shady Grove. Second, the state ban was a broad prohibition on class actions that applied
to all litigants, just like the New York ban in Shady Grove. Third, whatever limits South
Carolina could place on class suits in state court on state causes of action, that limit did
not displace Rule 23 and did not preempt federal bankruptcy law.

Chapter 8. Modern Pleading

A. The Complaint

The fact pattern in Mandala v. NTT Data, Inc., 975 F.3d 202 (2d Cir. 2020),
rehearing en banc denied, 988 F.3d 664 (2d Cir. 2021) (with multiple concurrences
and dissents) could provide an excellent classroom pleading problem, especially in
courses that cover Swierkiewicz (Casebook, p. 570) and/or Swanson (Casebook, p. 627).
Black applicants brought a class action against a technology services provider for
rescinding their offers of employment because of past criminal convictions, alleging a
violation of Title VII. The theory of the case was disparate impact: relying on prior
felony convictions as a ground for non-hiring constituted impermissible discrimination on
the basis of race. Plaintiffs supported their claims with statistics showing national racial
disparities in arrests and convictions. The district court dismissed, and the Second
Circuit, two-to-one, affirmed, finding it was error for the “Plaintiffs to simply presume
that population-level statistics will accurately describe subgroups of the population,” in
particular, the subgroup of educated persons qualified to work in the technology services
industry. The Second Circuit later denied rehearing en banc.

For a high-profile Rule 12(b)(6) and Rule 15 case, consider Donald J. Trump for
President, Inc. v. Secretary of Pennsylvania. 830 Fed. Appx. 377 (3d Cir. 2020).
Voters and former President Trump’s reelection campaign sued to invalidate millions of
votes cast by Pennsylvanians in the 2020 Presidential election, alleging that the
Secretary’s authorization during the COVID-19 pandemic of a notice-and-cure procedure
for procedurally defective mail-in ballots violated the Equal Protection Clause and that

41
poll watchers were impermissibly excluded from the canvass. The complaint is available
at 2020 WL 6562045 (M.D. Pa.). The district court granted the motion to dismiss and
denied permission to amend the complaint a second time on grounds of undue delay and
futility. Donald J. Trump for President, Inc. v. Boockvar, 502 F. Supp. 3d 899 (M.D.
Pa. 2020). The decisions illustrate well the three-step process for assessing the
sufficiency of a complaint: looking at the elements of the claim; identifying the
allegations that, because they are mere conclusions, are not entitled to the assumption of
truth; and determining whether the well-pleaded allegations plausibly give rise to an
entitlement to relief.

As a follow-on to Twombly (Casebook, p. 573), consider Federal Trade

Commission v. Facebook, ___ F. Supp. 3d ___, 2021 WL 2643627 (D.D.C. 2021).
The complaint is available here:
https://1.next.westlaw.com/Link/Document/Blob/I2b8572e03e9411eb8f01bfdc2a03347e.
pdf?targetType=dct-docket-
pdf&originationContext=document&transitionType=DocumentImage&uniqueId=42e079
3d-0c38-4e38-a1f1-8be8f00c0b28&contextData=(sc.RelatedInfo). The FTC sued
alleging that Facebook maintained a monopoly in the market for personal social
networking services by acquiring firms such as WhatsApp and Instagram that it believed
would undermine its monopoly status and by blocking the operation of its service and
certain “apps” that it regarded as a market threat. The district court dismissed the
complaint without prejudice to allow the filing of an amended complaint. In the court’s
view, the complaint lacked allegations about Facebook’s monopoly power:

save the naked allegation that the company has had and still has a
“dominant share of th[at] market (in excess of 60%).” Redacted Compl., ¶
64. Such an unsupported assertion might (barely) suffice in a Section 2
case involving a more traditional goods market, in which the Court could
reasonably infer that market share was measured by revenue, units sold, or
some other typical metric. But this case involves no ordinary or intuitive
market. Rather, PSN services are free to use, and the exact metes and
bounds of what even constitutes a PSN service—i.e., which features of a
company’s mobile app or website are included in that definition and which
are excluded—are hardly crystal clear. In this unusual context, the FTC’s
inability to offer any indication of the metric(s) or method(s) it used to
calculate Facebook’s market share renders its vague “60%-plus” assertion
too speculative and conclusory to go forward. [Underscoring in original.]

Keep in mind that the decision is technical and detailed, and assumes a complex
understanding of economics and antitrust law. A less complicated antitrust case that
might be a better entry point for students to assess Twombly is Northbay Healthcare
Grp., Inc. v. Kaiser Found. Health Plan, Inc., 838 Fed. Appx. 231 (9th Cir. 2020). A
hospital system sued a competitor, alleging illegal conspiracy to monopolize through
such practices as patient steering and manipulating reimbursements. The complaint is
available at 2017 WL 3725507 (N.D. Cal.). The district court dismissed the claims

42
(indeed, with amendments, dismissed the claims three times), and the Ninth Circuit
reversed, with a dissent by Circuit Judge Bea.

The 1L curriculum in many law schools includes torts, and it might be useful to
include a pleading exercise that involves negligence. For a fact pattern that will engage
at least some students—those interested in football—consider Dent v. National Football
League, 968 F.3d 1126 (9th Cir. 2020). Retired professional football players sued the
National Football League alleging that the league negligently facilitated the distribution
of controlled substances to “dull players’ pain and return them to the game after injury in
order to maximize revenues by keeping marquee players on the field.” The district court
dismissed the complaint, and the Ninth Circuit reversed and remanded; on remand the
district court again dismissed and the Ninth Circuit this time affirmed in part (finding that
the failure to regulate distribution did not amount to negligence per se) and reversed in
part (finding that the players plausibly alleged a voluntary undertaking negligence claim).
The decision goes through the elements of the different theories of negligence claims the
complaint, and carefully explains why some of the claims are plausibly alleged but others
are not.

Fairfax v. CBS Corp., ___ F.4th ___, 2021 WL 2557891 (4th Cir. 2021),
involves the tort of defamation, which is covered in many 1L courses. Some students
may be disturbed by the facts; Virginia Lieutenant Governor Justin Fairfax sued CBS for
defamation after CBS broadcast interviews with two women alleging that Fairfax had
sexually assaulted or raped them. The district court granted CBS’s motion to dismiss
under Rule 12(b)(6), finding that the allegations did not support an inference of bad faith
reporting and the complaint failed to allege actual malice. The decision is clearly written,
sets out the elements of the claims, walks through the allegations of the complaint, and
explains why the court regards the allegations of the complaint as falling short “of
plausibly alleging that CBS broadcast its April 1 and 2 CBS This Morning programs
despite entertaining ‘serious doubts as to the truth’ of those broadcasts.”

For a pleading case involving federal disability rights, consider Whitaker v.

Tesla Motors, Inc., 985 F.3d 1173 (9th Cir. 2021). Plaintiff alleged “that he is a
quadriplegic who uses a wheelchair for mobility” and that he was denied full and equal
access to defendant’s service counters, in violation of the Americans with Disabilities Act
(ADA). The district court dismissed the complaint, and the Ninth Circuit affirmed,
explaining that the allegations were conclusory. The decision might be helpful to
students because it sets out the kinds of factual detail that a complaint alleging a violation
of the ADA would need to include to meet the plausibility standard. As an example:

The complaint alleges that Tesla “failed to provide accessible service

counters,” that Whitaker “personally encountered” the inaccessible service
counters, and that he was denied “full and equal access.” These
allegations do little more than recite the elements of an ADA claim, and
fall short of putting Tesla on notice of how the counters prevented
Whitaker from full and equal access to the Tesla facility. The complaint
failed to answer basic questions: Were the service counters too low? Or

43
 too high? Were they positioned in an area that was inaccessible for
another reason? Without this sort of factual detail, the district court and
Tesla were left in the dark about how the service counters denied Whitaker
from full and equal enjoyment of the premises.

Do the students agree with the appeals court’s statement that defendant was “left in the
dark” about the non-compliant nature of its service counters?

For a pleading case involving breach of contract, some students might be engaged
by the fact pattern in Shane Campbell Gallery, Inc. v. Frieze Events, Inc. 838 Fed.
Appx. 608 (2d Cir. 2020). An art gallery sued the company that hosted an outdoor art
fair—the 2018 Frieze Art Fair held on Randall’s Island, in New York—for breach of
contract, alleging that defendant failed to use commercially reasonable efforts to air
condition the common areas of the exhibition tents during a heat wave. The district court
granted the company’s motion to dismiss, and the Second Circuit affirmed, finding the
complaint to be deficient because it lacked a plausible allegation of an objective standard
of commercial reasonability. Because New York’s case law on commercial reasonability
was “scant,” the district court relied on a federal decision to discern the standards, and the
parties did not contest the standard that the lower court applied. Applying that standard,
the appeals court agreed that plaintiff failed in the complaint to identify “an industry-
specific objective standard,” and also failed to allege how defendant failed in its actions
to meet those standards. Instead, the complaint set out a number of theories of
contractual breach, “without providing any indication as to which of these theories
accounts” for the challenged conduct.

5. Pleading Special Matters

In re Pork Antitrust Litig., 495 F. Supp. 3d 753 (D. Minn. 2020), raised the
question whether Rule 9(b)’s pleading requirements applied to state consumer-protection
claims. The case comprised three putative classes alleging that pork producers and
integrators conspired to limit the supply of pork and fix prices. The court analyzed the
Rule 9(b) issue in terms of a “spectrum of how central fraud is to a claim. At one end are
claims “that do not specifically mention fraudulent behavior or specify that they are not
based on fraud”; they are not subject to Rule 9(b). At the other end are claims “that
center on fraud”; they are subject to Rule 9(b). The state law claims in this case “fell
somewhere in the middle.” The complaint alleged anticompetitive behavior, not fraud.
On the other hand, defendants argued that the complaint used the terms “deceptive,”
“fraudulent,” and “misrepresentations,” in describing the challenged price-fixing conduct.
The court further looked at whether the complaint alleged reliance based on defendant’s
inducement, and concluded that the state claims are not “intertwined” with allegations of
fraud and instead allege anti-competitive behavior subject to the plausibility, and not the
particularity, pleading requirement.

B. Responding to the Complaint

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 Lower courts continue to be divided on whether the plausibility standard applies
to affirmative defenses (Casebook, p. 638, Note 3), but the trend is in favor of
plausibility. For a pair of cases that reach contrary results, compare Nippon Sigmax Co.,
LTD v. Kranos Corp., 2021 WL 2634823 (C.D. Cal. 2021) (relying on functional and
textual considerations to require affirmative defenses to be plausible), with Edwards v.
CSXT Transp., Inc., ___ F.R.D. ___, 2021 WL 2523567 (E.D.N.C. 2021) (relying on
the text of Rule 8 to hold that an affirmative defense can be stated “in short and plain
terms” and factual allegations making the defense plausible are not required).

E. Amendments

In Robertson v. Intratek Computer, Inc., 976 F.3d 575 (5th Cir. 2020),
petition for cert. docketed (U.S. Mar. 8, 2021), a former employee sued the
corporation, its CEO, and a federal official, alleging violation of the federal
whistleblower statute for firing him for reporting misconduct. The district court denied
leave under Rule 15 for plaintiff to amend the complaint to add his company as a co-
plaintiff. There was no abuse of discretion because the facts underlying the amendment
were known to plaintiff at the time of the original filing. Plaintiff instead waited until
after the magistrate judge ordered arbitration of his claim, seeking to add a party that
would not be subject to the arbitration condition. The district court saw the request to
amend as a “tactical maneuver” and the appeals court agreed. Moreover, Federal Rule 19
did not require amendment. The company was the plaintiff’s “alter ego,” and so “wasn’t
absent from or necessary to the suit.”

Owens v. Perdue Farms, Inc., 2021 WL 1701922 (M.D. Ga. 2021), brings
together statutes of limitations, Rule 15 relation back, Krupski (Casebook, p. 650), and
COVID-related emergency court rules. To boil down the facts: On November 1, 2018,
plaintiff “mangled” his hand at a chicken-processing facility operated by Perdue Farms
and Perdue Foods. He sued Perdue Farms on August 5, 2020. On March 3, 2021, he
amended his complaint to add Perdue Foods as a party. Georgia has a two-year statute of
limitations. During the pandemic, the Georgia Supreme Court entered several orders
about limitations periods; the fourth extension order stated that “[t]he 122 days between
March 14 and July 14, 2020, or any portion of that period in which a statute of limitation
would have run, shall be excluded from the calculation of that statute of limitation”
[emphasis added by the court]. The court agreed with Perdue Foods that the emergency
order did not give plaintiff an additional 122 days to file his lawsuit because his statute of
limitations did not run between March 14 and July 14, 2020. Whether Perdue Foods
could be added as a party outside the statute of limitations thus turned on whether claims
against that party related back to the original complaint. Eleventh Circuit caselaw allows
a federal court sitting in diversity to apply relation back when state law provides the
limitations period and “affords a more forgiving principle of relation back” than under
federal law. The problem, however, was that both the Georgia Supreme Court and the
Eleventh Circuit have “blurr[ed] the line between the state and federal standards,”
“do[ing] away with the notion that one standard may be more forgiving than the other.”
Applying Krupski, the court recognized that Perdue Foods clearly knew that it was the

45
proper corporate entity. However, the problem was that plaintiff wanted to add a party,
not substitute party, and so the Georgia relation back statute did not apply, and he was out
of time. Is it significant that the Georgia Court of Appeals, a month before the district
court entered its order dismissing the complaint, held that an amendment should be
allowed to add a party when the new party is “intertwined” with the original and received
notice prior to the statute of limitations? Leary v. Perdue Farms, Inc., ___ Ga. App. ___,
___ S.E.2d ___, 2021 WL 1084417 (Ga. Ct. App. 2021). The district court read this
decision to speak only to prejudice.

G. Provisions to Deter Frivolous Pleadings

In re Ames, 993 F.3d 27 (1st Cir. 2021), involved the imposition of sanctions on
a lawyer who filed a second amended civil rights complaint after the court dismissed the
first amendment complaint without prejudice (over the magistrate judge’s
recommendation that all claims be dismissed with prejudice). The question was whether
any reasonable lawyer would have thought the “minimal” changes made to the second
amended complaint cured the pleading defects when the changes, according to the
appeals court, added “nothing of consequence” to the prior dismissed complaint. In
particular, the Magistrate Judge’s Report and Recommendation had warned counsel that
the claims “would not be solved by clearer pleading” because the “innocuous actions
simply have not violated any of [plaintiff’s] rights.” The First Circuit rejected the
argument that the sanction would chill the development of civil rights law, or that the
district court’s allowing a second amendment tacitly endorsed the non-frivolous nature of
the claims. As the court explained:

Even though a district court deems a pleaded claim frivolous, it may

nonetheless give the pleader a chance to re-plead and add facts to an
amended complaint in order to breathe life into the claim. But leave to
amend does not immunize an attorney who elects to amend despite the
absence of any nonfrivolous support for the amended pleading. When—as
in this case—the pleader avails himself of the opportunity to amend and
files a new pleading, he does so at his peril and under the watchful eye of
Rule 11. In this respect, civil rights cases are no different than other cases,
and requiring an attorney to abide by the strictures of Rule 11 does not
impermissibly chill his client’s rights.

Nor could counsel reasonably argue that the claims involved a “nonfrivolous argument
for extending, modifying, or reversing existing law” under Rule 11(b), for counsel made
no such arguments. Rather, the First Circuit concluded counsel’s “zealous advocacy
[was] based on nothing more than a wing and a prayer,” and so was sanctionable.

We raise here the issue of appellate sanctions because of the circumstances of the
case. Conboy v. U.S. Small Business Administration, 992 F.3d 153 (3d Cir. 2021),
involved a loan default. The borrowers sued in state court, alleging breach of contract
and other claims, and defendants removed to federal court. In federal court, defendants
moved for summary judgment and one of the defendants also moved for sanctions under

46
Rule 11 for frivolous claims and Rule 37 for discovery abuse. The district court granted
the motion for summary judgment but denied the motion for sanctions. Plaintiffs
appealed. On appeal, appellant’s lawyer copied and pasted the summary judgment
portion of his district court brief into his appellate brief, making only minor changes.
Appellee moved for damages under Federal Appellate Rule 38. In response to that
motion, appellant’s lawyer filed a copy-and-paste of the brief filed in opposition to the
Rule 11 and Rule 37 motion for sanctions. The appeals court awarded frivolous-appeal
damages, but imposed them only on counsel and not the client. The closing paragraph
should be a strong warning to students at the beginning of their careers as lawyers:

It’s not easy to become a lawyer. The practice of law is challenging, and
even the best lawyers make mistakes from time to time. So we err on the
side of leniency toward the bar in close cases. But the copy-and-paste jobs
before us reflect a dereliction of duty, not an honest mistake. We will
therefore affirm the District Court’s summary judgment and grant
[defendant’s] motion for Rule 38 sanctions after counsel for [defendant]
files an appropriate fee petition and counsel for Appellants has a chance to
respond.

Finally, we note that, as of this writing, motions for Rule 11 sanctions remain
pending against the lawyers (including Sidney Powell and Rudy Giuliani) who
represented voters challenging the counting of votes in Michigan during the 2020
Presidential election. See King v. Whitmer, 505 F. Supp. 3d 720 (E.D. Mich. 2020),
appeal dismissed, 2021 WL 688804 (6th Cir. 2021). The City of Detroit’s motion to
dismiss and for an award of sanctions is available at 2020 WL 7774354 (E.D. Mich. Dec.
22, 2020); Plaintiffs’ Opposition to the City of Detroit’s Motion for Sanctions, for
Disciplinary Action, for Disbarment Referral and for Referral to State Bar Disciplinary
Bodies and to the Defendants Whitmer and Benson’s Concurrence in City of Detroit’s
Motion for Sanctions is available at 2021 WL 268621 (E.D. Mich. Jan. 19, 2021).

Chapter 9. Joinder of Claims and Parties: Expanding the Scope of the Civil Action

A. Identifying Parties Who May Sue and Be Sued

The 1L course generally focuses on Rule 17(a), addressing the real party in
interest. Consider also taking time to discuss Rule 17(c), addressing minor and
incompetent persons, and especially the duty that (c)(2) places on the court to appoint a
guardian, or take other appropriate action, “to protect a minor or incompetent person who
is unrepresented in an action.” Mondelli v. Berekley Heights Nursing and
Rehabilitation Center, ___ F.3d ___, 2021 WL 2426206 (3d Cir. 2021), concerned
what it means for a party to be unrepresented to trigger the court’s duty. The son of a
nursing home resident sued the nursing home alleging a violation of federal disability law
and intentional infliction of emotional distress. Plaintiff was represented by counsel but
failed to cooperate with the discovery process, and the district court dismissed for failure
to prosecute. The Third Circuit vacated and remanded for the district court to examine

47
plaintiff’s competency and to reevaluate the dismissal. On appeal, the Third Circuit
appointed amicus counsel. The appeals court broke no new ground in holding that the
district court must invoke Rule 17(c) sua sponte when there is “verifiable evidence of
incompetence,” that the obligation to appoint a guardian is mandatory, and that the
obligation is not limited to a pro se party. Moreover, the court’s duty is not affected by
the merits: “[W]hen a person is deemed incompetent, the case pauses until steps are taken
to protect his interests[.]” In this case, verifiable evidence of incompetence was present;
plaintiff himself had presented letters from doctors of his diagnosis of paranoid
schizophrenia and that he manifested psychotic symptoms.

C. Counterclaim

The question of the filing of a compulsory counterclaim after the statute of

limitations has run is discussed in the Casebook, p. 686, Note 2. In Connecticut Gen.
Life Ins. Co. v. BioHealth Laboratories, Inc., 988 F.3d 127 (2d Cir. 2021), the
question was whether the limitations period applicable to plaintiff’s state law claims was
tolled during the pendency of a prior federal action between the parties on the ground that
the current claims were all compulsory counterclaims in the prior case. Federal Rule
13(a) does not explicitly address the issue, and several circuits have adopted a federal
tolling rule that the “institution of a suit tolls or suspends the running of the statute of
limitations governing a compulsory counterclaim.” However, even those circuits that
have adopted the federal tolling rule leave the question of tolling to state law when state
law claims are involved. Plaintiff argued that a federal tolling rule applied because the
state law claims were being heard as a matter of supplemental jurisdiction; the appeals
court rejected this argument out of hand, explaining that “it is beyond cavil that federal
courts apply state limitations rules to state-law claims regardless of the jurisdictional
circumstances.” Moreover, under the applicable state rule, the timeliness of the
counterclaims was measured not from the date the complaint was filed, but from the date
on which they were asserted. Because plaintiff never interposed counterclaims in the
prior action, the limitations period was not tolled during that suit’s pendency, and the
claims were time barred. As a matter of strategy, what should a defendant with a soon-
to-expire state law claim do if it desires to move to dismiss the complaint? The court saw
a few options: (1) seek a tolling agreement from plaintiff; (2) serve an answer and
counterclaim alongside the motion to dismiss. Students might look closely at the
language of Rule 12(h)(2)(A) which contemplates this possibility.

The relation of a compulsory counterclaim to an amended pleading was at issue in

Z View Enterprises, LLC v. Giant Eagle, Inc., 834 Fed. Appx. 709 (3d Cir. 2020).
Subtenants sued the tenant, and the tenant filed counterclaims seeking to terminate all
agreements with the subtenant. The district court entered judgment in defendant’s favor
on the counterclaims. On appeal, plaintiff argued that defendant had waived the
counterclaims because they were interposed before the subtenant filed a second
supplemental complaint and were not repleaded. The appeals court drew a clear
distinction between an amended complaint and a supplemental complaint. The decision
offers a compact exercise in rule interpretation. As the appeals court explained:

48
 The compulsory counterclaim requirement of Rule 13(a) applies to
counterclaims that arise out of a “transaction or occurrence that is the
subject matter of the opposing party’s claim.” Fed. R. Civ. P. 13(a)(1)(A).
Under that rule, in answering [the] … supplemental complaint,
[defendant] had to file any counterclaims that newly arose from the
supplemental allegations. But Rule 13 does not compel [defendant] … to
replead—in response to a supplemental complaint—counterclaims that
arose from claims in an earlier pleading. Thus, [defendant] … did not
waive or abandon its prior-pleaded counterclaims by not realleging them
in its answer to Mon Valley Foods’s supplemental complaint.

D. Claims Involving Multiple Parties

Joinder of Required Parties Under Rule 19

The interplay between Rule 19 required parties and sovereign immunity—raised

in the international human rights context by Pimentel (Casebook p. 715 and p. 737)— can
be explored in the domestic context through discussion of Gensetix, Inc. v. Board of
Regents of University of Texas System, 966 F.3d 1316 (Fed. Cir. 2020), a patent
infringement case. The case also offers an excellent discussion of the balancing of
factors under Rule 19(b). Gensetix, Inc., as the exclusive licensee of patents, sued Baylor
College of Medicine. The University of Texas (UT) was the owner/licensor of the patent,
and was named in the suit as an involuntary plaintiff. UT, as a state university, invoked
sovereign immunity under the Eleventh Amendment and moved to dismiss for lack of
subject matter jurisdiction. The district court granted the motion to dismiss and held that
the suit against Baylor could not go forward because UT, which retained substantial
rights in the patents, was a necessary party.

On appeal, the Federal Circuit agreed that Eleventh Amendment sovereign

immunity barred UT’s involuntary joinder, but found it was an abuse of discretion for the
district court not to permit the infringement suit to go forward in UT’s absence. In effect,
the district court erroneously “collapse[ed] the multi-factorial Rule 19(b) inquiry into one
dispositive fact: UT’s status as a sovereign.” The court found three ways to distinguish
Pimentel: (1) Pimentel dealt with foreign sovereign immunity, and so raised comity and
dignity interests not present in the Eleventh Amendment context; (2) Pimentel involved
an interpleader action that would have left the sovereign’s interests unprotected; by
contrast, the patent licensee could protect the licensor’s interests; (3) unlike Pimentel, the
licensee would be left without an alternative forum. Judge Taranto dissented from the
majority’s reversal of the district court’s dismissal of the action, stating that under
Pimentel, “when a sovereign entity is a required party under Rule 19(a), is protected
against joinder by sovereign immunity, and makes a non-frivolous assertion that it will be
prejudiced by a suit proceeding in its absence, a district court is generally obligated to
dismiss the suit under Rule 19(b).”

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 E. Impleader

Afunday Charters, Inc. v. ABC Insurance Co., 997 F.3d 390 (1st Cir. 2021), is
a somewhat complicated admiralty action involving a conventional civil impleader claim
under Rule 14(a)(1) as well as a special admiralty impleader claim under Rule 14(c)(1).
Plaintiff purchased a yacht. While the yacht was being transferred, it was totally
destroyed. Plaintiff sued the seller and captain to recover for the yacht’s loss. The seller
filed civil and admiralty impleader complaints against plaintiff’s agents. On appeal, the
question was whether the district court erred in dismissing the third-party complaints,
having found no “meaningful benefit” from impleading the parties and no showing of
prejudice. The First Circuit affirmed. What makes the decision interesting for a 1L
course is the First Circuit’s discussion of the relation between Rule 14 and the district
court’s managerial authority under Rule 16 to facilitate the speedy disposition of the
action and to simplify the issues, finding no practical difference between delaying the
adjudication of the third-party complaints and dismissing them. Circuit Judge Barron
dissented; assuming the district court proceeded on remand and exercised its Rule 16
authority, eventually there would be another appeal but without the benefit of the district
court’s assessment of the advantages of keeping the Rule 14 claims in the case in terms of
discovery and enforcement of insurance policy terms.

General Star Indemnity Company v. Triumph Housing Management, LLC,

2021 WL 1921851 (11th Cir. 2021), provides a helpful discussion of the often-repeated
rule that “under Rule 14, a defendant’s third-party claims must be derivative of the claims
made against that defendant by the first-party plaintiff.” Plaintiff sought a declaratory
judgment from defendant that the insurance policy it had issued to defendant was void
and should be rescinded, or that it provided coverage only up to the listed value for each
structure and not blanket coverage. Plaintiff also filed a third-party complaint against the
insurance agency that helped secure the policy, alleging that the third-party defendant’s
negligence in procuring the policy resulted in uncovered loses. The insurance agency
argued that plaintiff’s third-party claims were not derivative of the claims made against
the defendant. The court rejected that argument. Boiled down, plaintiff’s declaratory
relief would enable it to avoid liability to defendant under the insurance policy, and the
third-party claims would allow it to pass any liability onto the insurance agent. The third-
party claims thus were “secondary to, or derivative of” plaintiff’s declaratory judgment
claims, “in that they were contingent” upon plaintiff’s “success in its effort to avoid
paying [defendant’s] insurance claims.” As the court explained, “Under our precedent,
impleader is permissible in a declaratory judgment action like this one, where the issues
raised by the defendant in its third-party complaint are ‘closely intertwined’ with the
claims of the declaratory judgment plaintiff.”

F. Interpleader

The relationship between Rule 22 interpleader and counterclaims was at issue in

Primerica Life Insurance Co. v. Woodall, 975 F.3d 697 (8th Cir. 2020). An insurance
company filed an interpleader action under Rule 22 to resolve competing claims to
decedent’s life insurance proceeds. The claimants were the decedent’s first spouse and

50
second spouse. The spouses each filed counterclaims against the insurance company
alleging, among other things, breach of contract which would trigger statutory damages.
The district court granted summary judgment for the insurance company against the
counterclaim, finding that the insurance company could not be held liable for properly
initiating an interpleader action—the whole point of the interpleader action was to satisfy
the property holder’s obligation in a single proceeding.

The Eighth Circuit disagreed. As the appeals court explained, interpleader is an

equitable action, and so the party initiating the action must have the proverbial “clean
hands.” Whether the insurance company had clean hands turned on whether it had failed
to process a change-of-beneficiary form after the decedent had remarried, or whether—as
the insurance company argued—the decedent had failed to provide the insurance
company with requested information to effect the change. As the court explained,

[W]e hold that if the party asserting the right to interpleader, here [the
insurance company], has acted unfairly to create the underlying conflict
necessitating interpleader relief, then that party may not use the
interpleader procedure as a shield against counterclaims asserting that the
interpleader stakeholder is at fault in creating the subject of the dispute.

***

Because there is a legitimate dispute over the question of fault in creating

the competing claims to [the decedent’s] life insurance proceeds, and
because our circuit precedent has not previously required a fault
determination in the interpleader context, we remand for a fault
determination by the district court and further proceedings consistent
therewith.

AmGuard Ins. Co. v. SG Patel & Sons II LLC, 2021 WL 2303045 (4th Cir.
2021), addressed, as a matter of first impression, whether the interpleader plaintiff’s
citizenship could be considered to meet the minimal diversity requirement for statutory
interpleader when the action was in the “nature” of interpleader (meaning, “the plaintiff is
not merely a stakeholder but also has an interest in the money or property, and it may
initially deny whether some or all of the property is owed to any or all claimants”). The
Fourth Circuit answered in the affirmative, and held it was an abuse of the district court’s
discretion to fail to consider whether diversity jurisdiction and rule interpleader applied.
The suit was brought by a liability insurer to determine whether and to whom insurance
policy proceeds should be paid (in connection with a car accident involving underage
drinking in which one passenger was killed). The decision offers an excellent summary
of the purposes of the interpleader action, the governing jurisdictional rules, and Supreme
Court precedent.

G. Intervention

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 North Carolina State Conference of NAACP v. Berger, 2021 WL 2307483
(4th Cir. 2021), was a suit against the North Carolina Governor and other state parties
challenging the state’s voter-identification law, which was enacted over the Governor’s
veto. On appeal, the question was whether the district court abused its discretion when
refusing to permit the President Pro Tempore of the state Senate and the Speaker of the
state House of Representatives to intervene, either as of right or as a matter of
permission. The state Attorney General was representing the state’s interest in the
validity of the law. On rehearing en banc, the appeals court affirmed. First, as a matter
of jurisdiction, the district court’s denial without prejudice of the motion to intervene was
a final appealable order. Second, it rejected the putative intervenors’ reliance on a state
law, passed in 2013 and modified in 2017, that “request[s]” that federal courts allow both
the legislative and the executive branch to participate as a party in any action challenging
a state law. Nevertheless, the appeals court held that federal law governed the
intervention motion. Third, there was no abuse of discretion under Rule 24(a)(2) because
there was no showing of inadequate representation. The putative intervenors could assert
only one interest, namely, the state’s interest in defending the constitutionality of its voter
law. The appeals court agreed that the district court abused no discretion in declining to
make the “extraordinary” finding that the Attorney General was “inadequately
representing that same interest, in dereliction of his statutory duties.” Fourth, there was
no abuse of discretion in denying permissive intervention, under Rule 24(b), while
permitting amicus participation, deferring to the district court’s finding “that the addition
of the Leaders as parties would result in unnecessary complications and delay” and cause
prejudice to plaintiffs. The decision, which triggered three separate dissents, offers an
excellent summary of the rules governing intervention. And although the issues may be
too far afield for many 1L Procedure courses, the facts and importance of the issue make
the decision a compelling one to discuss.

United States v. City of Albuquerque, 2020 WL 3129825 (D.N.M. 2020),

addressed whether a police union could intervene in a consent decree agreed to by the
United States and the City of Albuquerque that included a document called Use of Force
Standing Operating Procedure. The decision is long, detailed, and provides a treatise-like
approach to the question (as well as to related issues, such as the rule of Kokkonen
(Casebook, p. 348) that when the parties settle a lawsuit, ancillary jurisdiction to enforce
the agreement does not exist unless the order dismissing the case specifically refers to the
agreement (unless the court otherwise has an independent basis for jurisdiction over the
agreement)). The topic of the consent decree is important, and although the procedural
history is too complicated for the 1L course, a stylized version could provide a good
teaching hypothetical, especially on the question of when the government is considered to
be an adequate representative of interests in a lawsuit (Casebook, p. 745, Note 1).

Chapter 10. Class Actions

C. Operation of the Class Action Device

2. Rule 23(b): Prerequisites of Certification

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 Berni v. Barilla S.p.A., 964 F.3d 141 (2d Cir. 2020), involved the important
question whether past purchasers of a product can obtain certification under Rule
23(b)(2) and seek injunctive relief. The Second Circuit held that past purchasers are not
eligible for such certification. The suit involved claims by past purchasers of Barilla
pasta for deceptive packaging that made it seem consumers were getting more pasta than
the box actually contained. Barilla moved to dismiss, and before the motion was
resolved, the parties agreed to a settlement: $450,000 in fees to class counsel and the four
named plaintiffs; all class members would release Barilla from future claims; and Barilla
would include a “fill-line” on its boxes to make clear how much pasta the box contains.
A lone objector—referred by to the appeals court as a “serial” objector—argued that the
group of past purchasers should not be certified because they were not eligible for
injunctive relief. The district court rejected the objector’s arguments and granted
approval of the settlement. The Second Circuit vacated the district court’s settlement
approval and remanded. Supporting the decision, the appeals court reasoned that the
injunctive relief did not provide relief to each member of the class as required by Rule
23(b)(2). Specifically, the court found that granting injunctive relief requires a showing
of an actual and imminent threat that the plaintiff will be harmed in the future. Past
purchasers of Barilla pasta are unlikely to be harmed in the future because they are not
bound to purchase the product again, and even if they do, they will not be deceived by
boxes of underfilled pasta. Although the Second Circuit described several district courts
as having “created an exception to the Federal Rules of Civil Procedure to let a Rule
23(b)(2) class action move forward even when injunctive relief is not proper for every
class member,” it emphasized that “such an equitable exception to Rule 23(b)(2) simply
does not exist.” What kind of claimants would continue to be eligible for Rule 23(b)(2)
certification under the Second Circuit’s approach?

Prantil v. Arkema Inc., 986 F.3d 570 (5th Cir. 2021), was filed in the wake of
Hurricane Harvey in southeastern Texas, as floods caused volatile chemicals at a facility
in Crosby, Texas to combust and release toxic ash and smoke into the surrounding areas.
Affected property owners in Crosby, Texas sued Arkema, Inc., the chemical producer, for
negligence in implementing a hurricane preparedness plan. The district court certified
both a (b)(2) injunctive class and a (b)(3) damages class. The Fifth Circuit vacated and
remanded. At the outset, the appeals court, joining the Third, Seventh, and Eleventh
circuits, held that the same standard of admissibility of scientific evidence at the trial
stage governs at the certification stage—“the Daubert hurdle must be cleared when
scientific evidence is relevant to the decision to certify.” Defendant did not dispute that
the proposed class met the threshold requirements of Rule 23(a) and that use of the class
action was superior to other procedural devices. However, the requirement of
predominance, the appeals court explained, is “far more demanding” than the
commonality requirement. The district court properly assessed predominance on a claim-
by-claim basis, but according to the appeals court, it failed to account for the impact of
claims and defenses, assuming that down the road damages and liability could be
addressed separately. In particular, the district court failed to discuss trial administration
and how to deal with highly individualized issues of causation, injury, and damages.
Turning to the injunctive class, the appeals court focused on cohesiveness and found that

53
the district court’s discussion of injunctive relief failed to provide “reasonable detail” and
was not “reasonably specific” in its order.

For a solid example of the difficulties in putting together a Rule 23(b)(3) civil rights
class action, especially one raising claims of sexual harassment in the workplace,
consider Howard v. Cook County Sheriff’s Office, 989 F.3d 587 (7th Cir. 2021). The
case also illustrates the role of interlocutory appeals in the class certification context, and
the use of an indicative ruling by the district court during the pendency of an appeal
under Federal Rule 62.1. Ten women who work at the Cook County Jail or in the
adjoining courthouse sued, alleging that their employers failed to prevent male inmates
from sexually harassing them. The district court initially certified a class of all non-
supervisory female employees who work with male inmates, numbering around 2,000
members. On interlocutory appeal, the Seventh Circuit remanded, and the district court
modified the class definition. On the second interlocutory appeal, the Seventh Circuit
reversed.

In support of class certification, the district court relied upon evidence submitted
by both parties, “including the defendants’ policies, procedures, and records; expert
reports from statistical, psychological, and correctional professionals; class member
declarations; and deposition testimony from class members and defense witnesses.” The
district court relied on a theory of direct harassment, as well as of “ambient harassment,”
which the lower court defined as “the experience of working in an environment highly
permeated with sexually offensive and degrading behavior, that is, a highly sexualized
atmosphere in which crude and offensive sexual behavior is common and employees see
that it is normative, whether specifically directed at them or not,” and which drew from
the “social-framework analysis” of plaintiff’s expert. Defendants petitioned for
interlocutory appeal under Rule 23(f). Shortly after, plaintiffs submitted newly produced
staffing spreadsheets and asked the court to eliminate certain groups of job categories
from the class definition. Because of the pending appeal, plaintiffs sought an indicative
ruling from the district court that it would modify the class definition. The district court
agreed, and the court of appeals remanded. The amended class definition excluded
employees who lacked direct contact with inmates, but did not reassess commonality.

On a second interlocutory appeal, the Seventh Circuit reversed. The lower court’s
finding of commonality, according to the appeals court, continued to rest upon a theory of
ambient harassment, which no longer was a central issue to the class and, in any event,
could not support a finding of commonality because it “overlooks meaningful distinctions
among the class members’ individual experiences.” Moreover, even if the district court
did not rely upon this theory, the members’ exposure to sexual harassment could not
suffice, because the class failed to “share a common question as to whether the severity
or pervasiveness of sexual harassment by male inmates has created an objectively hostile
work environment.” As to typicality, the district court’s original order found that the
claims of the named representatives were typical of the class because they “relied on the
same legal theory—even if some of the class members would have to resort to ambient
harassment to prove their claims.” The Seventh Circuit rejected this reasoning, finding
that the representative plaintiffs whose claims depended upon direct harassment were

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“poor proxies” for those members whose claims depended upon ambient harassment. As
to predominance, the district court found that the prison, as a centralized workplace,
relied upon common employment policies, and so differed from those cases in which “the
delegation of discretionary authority to local managers precluded commonality.” The
Seventh Circuit rejected this reasoning, and so did not consider whether the liability
question sufficed to show predominance. A teacher might approach this case from the
perspective of litigation strategy. Would any smaller class or subclass meet the appeals
court’s concerns? The Seventh Circuit suggested that a “coherent class” could be defined
of employees “who have had comparable experiences,” such as “a class of employees
who work in Divisions, 8, 9, and 10.” What problems do the students see with that
approach?

As another example of the difficulties of Rule 23(b)(3) certification, this time

focusing on the predominance requirement, consider Olean Wholesale Grocery Coop.,
Inc. v. Bumble Bee Foods LLC, 993 F.3d 774 (9th Cir. 2021), a multidistrict antitrust
case against producers of packaged tuna alleging a price-fixing conspiracy. The district
court certified three classes, and defendants brought an interlocutory appeal challenging
the determination that the predominance of common questions was met by expert
statistical evidence that used averaging assumptions and pooled transaction data to show
classwide impact. In particular, defendants argued that a finding of predominance must
be made before certifying the class. The Ninth Circuit decided as a threshold matter that
the district court must establish predominance by a preponderance of the evidence,
explaining that this standard best accorded with the district court’s “gatekeeper” role;
comported with the Supreme Court’s insistence that certification is appropriate only
“after a rigorous analysis”; fits with Rule 23’s language that certification may be ordered
“only if … the court finds” that the questions predominate; and flowed from the Court’s
“emphasis that the evidence used to satisfy predominance be ‘sufficient to sustain a jury
finding as to [liability] if it were introduced in each [plaintiff’s] individual action.’”
[brackets in original]. As to the use of representative evidence, the Ninth Circuit held
that it could appropriately be used to prove classwide impact, but held that the district
court abused its discretion by failing to resolve factual disputes before certifying the
classes. In particular, the appeals court vacated and remanded for the district court, based
on the “dueling statistical evidence,” to determine the number of uninjured parties in the
proposed class, which was a critical first step in assessing predominance. Along the way,
the appeals court expressed concern that use of representative evidence as part of the
certification process would raise problems under the Rules Enabling Act.

Class certification is conditional, and a district court may decertify a class if it finds
it no longer meets the requirements of Rule 23. As an example, consider Jin v.
Shanghai Original, Inc., 990 F.3d 251 (2d Cir. 2021). A restaurant employee filed the
class action alleging violations of New York Labor Law. The district court certified a
class of non-managerial employees who work at Joe’s Shanghai, a restaurant in Flushing,
New York. Five days before trial, the court sua sponte decertified the class finding a
“significant intervening event”—the decision of class counsel to present testimony of
only two witnesses to prove wage claims. The Second Circuit held decertification did not
require a “significant intervening event”; however, decertification was proper because of

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counsel’s inadequate representation under Rule 23(g), evidenced by such litigation
conduct as:

(1) attempted numerous times to delay trial without any meritorious basis;
(2) had the court reopen discovery to conduct twenty-eight depositions
related to the Owners’ alleged misconduct but conducted only three and
failed to inform the court until over a month after they abandoned
depositions; (3) repeatedly failed to submit a witness list that complied
with Judge Ross’s instructions; and (4) in its final revised list, indicated
they would only call two class members as witnesses despite indications in
the [joint pretrial order] of the significance of class-member testimony.

4. Rule 23(f): Interlocutory Appeals from Certification Orders

In In re National Prescription Opiate Litigation, 976 F.3d 664 (6th Cir. 2020),
the Sixth Circuit permitted an appeal under Federal Rule 23(f) from an order certifying a
“negotiation class” in the multi-district litigation brought by cities against opioid
manufacturers, distributors, and pharmacies (the suit is discussed in the section of this
Memo on Class Actions). The appeals court found that the appeal was not premature;
rather the decision to certify this novel form of class action was final. “As the district
court itself noted, the putative class members were asked to decide whether to ‘bind
themselves to a negotiation process,’ with no guarantee of a second opportunity to opt-
out after a settlement figure was reached.”

6. Rule 23(e): Settlement or Compromise of a Class Suit

If you assigned Briseño (Casebook, p. 786), consider mentioning later

developments in the case in which challenges were mounted to attorney fees awarded as
part of a settlement. Briseño v. Henderson, 2021 WL 2197968 (9th Cir. 2021). The
settlement included three main parts. First, the damages part of the settlement awarded
consumers $0.15 for every unit of Wesson Oil purchased by a household. Proof of
purchase was not required for the first thirty claims submitted by a household.
Additionally, a $575,000 fund was created to be allocated to New York and Oregon class
members that submit valid claim forms as compensation for statutory damages. For
damages, the settlement did not require ConAgra to identify or provide direct notice to
class members. Second, the injunctive relief part of the settlement stipulated that
ConAgra could not label Wesson Oil as “natural” should they decide to reacquire Wesson
Oil. Finally, the attorney’s fees part of the settlement stipulated that Plaintiffs would
request $6.85 million in attorneys’ fees and expenses. The attorney’s fees part of the
settlement also contained a clear-sailing provision, which prohibited ConAgra from
challenging the agreed-upon attorney’s fees, and a kicker clause, which required any
reduction in the fees to revert to ConAgra instead of the class members. One class
member—Professor M. Todd Henderson of the University of Chicago Law School—
opted out and objected to the fairness of the settlement. The district court approved the
settlement, and the Ninth Circuit reversed. The opening paragraphs give the flavor of the
decision:

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 We can perhaps sum up this case as “How to Lose a Class Action
Settlement in 10 Ways.” The parties crammed into their settlement
agreement a bevy of questionable provisions that reeks of collusion at the
expense of the class members: Class counsel will receive seven times
more money than the class members; an injunction touted by an expert as
worth tens of millions of dollars appears worthless; the defendant agrees
not to challenge the plaintiffs’ attorneys’ fees amount; any reduction in
those fees by the court reverts to the defendant; and on and on.

While courts should not casually second-guess class settlements brokered

by the parties, they should not greenlight them, either, just because the
parties profess that their dubious deal is “all right, all right, all right.” We
reverse the district court’s approval of the class settlement because the
agreement raises a squadron of red flags billowing in the wind and
begging for further review. We hold that under the newly revised Rule
23(e)(2) standard, courts must scrutinize settlement agreements—
including post-class certification settlements—for potentially unfair
collusion in the distribution of funds between the class and their counsel.

Factors bearing upon collusion and requiring scrutiny included: (1) the proportion of
settlement funds going to counsel as fees; (2) an agreement by counsel not to challenge
fees; and (3) a clause diverting remaining funds to defendant and not the class if counsel
fees are reduced.

Can a named plaintiff be singled out for an incentive payment? That was one of
the issues the Eleventh Circuit considered in Johnson v. NPAS Sols., LLC, 975 F.3d
1244 (11th Cir. 2020). A consumer filed a class suit alleging violation of the Telephone
Consumer Protection Act by defendant’s use of an automatic telephone dialing system to
place calls to consumers without their consent. The district court certified a class and
approved a settlement, and the Eleventh Circuit reversed, vacated, and remanded. The
opening paragraph sets the tone:

The class-action settlement that underlies this appeal is just like so many
others that have come before it. And in a way, that’s exactly the problem.
We find that, in approving the settlement here, the district court repeated
several errors that, while clear to us, have become commonplace in
everyday class-action practice.

The appeals court focused on three errors. First, the district court violated the terms of
Federal Rule 23(h) by setting a schedule that required objectors to the settlement,
including objections to fees, more than two weeks before class counsel filed its fee
petition. Second, the district court awarded the named plaintiff a $6000 incentive
payment, which the appeals court analogized to salary and bounty awards, both of which
older Supreme Court decisions bar. Third, in approving fees and the settlement, the
district court failed to make findings or conclusions needed for appellate review.

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Compare Somogyi v. Freedom Mortgage Corp., 2020 WL 6146875 (D.N.J. 2020)
(stating that “until and unless the Supreme Court or Third Circuit bars incentive awards
or payments to class plaintiffs, they will be approved by this Court if appropriate under
the circumstances”).

D. Settlement Classes

The Sixth Circuit’s rejection of the “negotiation class” in the on-going and
significant opiate litigation may be too far afield for the 1L course to discuss in depth, but
certainly raises issues that go to the core values of civil procedure: access to courts,
procedural design, judicial role in the resolution of national problems, privatization of
procedure, the nature of cooperation within an adversary system, textualism as an
approach to Rules interpretation, the limits of current Rule 23, and the role of the MDL
court. The decision also provides an opportunity to walk through Rule 23 to see how its
certification requirements align with the district court’s approach. In re National
Prescription Opiate Litig., 976 F.3d 664 (6th Cir. 2020). Students may be familiar
with the case from reading newspaper articles. Cities and counties sued opioid
manufacturers, distributors, and retailers alleging they were compelled to divert resources
to address a health crisis created by defendants’ concerted action to mislead medical
professionals into prescribing opioids. The district court certified a “negotiation” class
and the Sixth Circuit reversed.

Students should be clear on how a negotiation class differs from a settlement class
(Casebook, p. 805). In a negotiation class, the certification decision and the opportunity
to opt-out take place before, and not after, the settlement is reached—meaning, class
members agree to be bound by the process without knowing the size of the actual
settlement. In the district court’s view, absentee interests were protected in two ways.
First, a county-level formula would allocate any eventual settlement, such that
prospective class members could see what percentage of a settlement their county could
receive (while cities would have to negotiate with their corresponding counties for a
portion of that county’s allocation). Ostensibly, this gave prospective class members
enough information to “determine if they stand to gain access to a large enough
percentage of any possible settlement to justify remaining in the negotiation class.”
Second, “a proposed agreement could only be accepted by the class if a supermajority
(i.e., 75%) of six categories of voting class members assent to it.” After that, the district
court would review the settlement for fairness, reasonableness, and adequacy under Rule
23(e). The appeals court noted that this supermajority voting also served defendants’
interests by preventing holdouts within the negotiation class to leave them still exposed to
litigation, thereby undermining the value of the settlement from their perspective.

Students might consider why a defendant would think it advantageous to know at

the outset of litigation that a negotiated settlement approved by a supermajority of class
members will be binding across-the-board. Class discussion also could focus on the three
issues that divided the majority and the dissent: First, whether the text of Rule 23
supports certification of a negotiation class; second, whether Amchem (Casebook, p. 812)

58
created a presumption against “judicial inventiveness” in applying Rule 23; and third,
whether the negotiation class is at odds with the structure of Rule 23.

Alternatively, or in addition, class discussion could focus on the requirement of

predominance. The district court framed the class as an issue class. The district court
certified the negotiation class based upon federal claims (RICO and the Controlled
Substances Act), but the class was permitted to negotiate any of the claims or issues
arising out of a common factual predicate—including the many state law claims asserted
by class members. In the majority’s view, this approach allowed the district court to
“paper[] over the predominance inquiry.” Are the students persuaded by the dissent’s
response to this concern?

Or, consider using the case as a vehicle for discussing statutory interpretation as
applied to the Federal Rules. The Court’s analysis of Rule 23 can be simplified (perhaps
oversimplified) as an expressio unius reading of Rule 23. It notes that Rule 23(e)
provides for the existence of a “class proposed to be certified for the purposes of
settlement,” but does not mention certification for purposes of negotiation. It pointed, for
instance, to Rule 23(e)(2)’s use of past tense and past perfect language to identify the
importance of having the certification happening after the negotiation for a proposed
settlement. In a similar vein, the majority contrasted the structure of negotiation classes
with that of settlement classes, with the former reversing the latter’s timeline. (The
dissent was not troubled by this, pointing out that due process only requires that class
members have one opportunity to opt out and noting that the negotiation class did provide
such an opportunity: right after certification.) Although finding that Rule 23 did not
allow such a negotiation class, the Sixth Circuit panel wrote that the Rules Advisory
Committee might recommend revising Rule 23 to allow for it in the future. Discussion
also might focus on Judge Moore’s dissent. She argued that the panel majority read Rule
23 unnecessarily tightly, while also reading into it conditions not present in the Rule’s
text. (“The world of class actions is neither constituted in entirety nor cleft in two by the
rigid categories of litigation classes and settlement classes. I find not one textual
reference to the phrases ‘litigation class’ or ‘settlement class’ in the Rules.”). Finally,
questions might focus on concerns about adequacy of representation. Defendants raised
two objections, namely financial conflicts and the need for subclasses. Are students
persuaded by these arguments?

E. Jurisdiction and Venue: Subject-Matter Jurisdiction

If you teach Mussat (Rules Supplement, Part X), also consider Lyngaas v. Ag,
992 F.3d 412 (6th Cir. 2021), reaching a similar result. Plaintiffs sued a Swiss company
and its United States subsidiary for sending unsolicited faxes promoting their
toothbrushes, in violation of the federal Telephone Consumer Protection Act (TCPA).
The named plaintiff was from Michigan, received unsolicited faxes in Michigan, and
sued in Michigan district court. The district court held that the subsidiary violated the
TCPA, and established a claims process for class members to verify their receipt of
unsolicited advertisements. The parties cross-appealed. The U.S. subsidiary argued that
the district court lacked jurisdiction over non-Michigan class members because their

59
claims failed to satisfy Bristol-Myers Squibb’s requirement that the injuries of those class
members need to arise out of or relate to Michigan. The district court rejected this
argument and found the exercise of jurisdiction to be proper. The Sixth Circuit affirmed,
relying on “[l]ong-standing precedent” that jurisdiction in a class action—as
distinguished from a mass action—is assessed “only with respect to the named
plaintiffs.” The dissent relied, instead, on Phillips Petroleum Co. v. Shutts, (Casebook, p.
824), arguing that unnamed class members are parties for some purposes and that a court
must have personal jurisdiction over absent class members to bind a defendant with
respect to class claims. According to the dissent, that jurisdiction was lacking because
the claims of absent class members did not arise out of or relate to Michigan, and the
defendant could not be bound by the claims of absent class members that arise from
wholly out-of-state activity. (The appeals court also held, as a matter of first impression,
that nonexpert evidence need not be admissible to support class certification.)

Smith v. Marcus & Millichap, Inc., 991 F.3d 1145 (11th Cir. 2021), involved
many of the jurisdictional requirements of the Class Action Fairness Act. The suit was
filed in state court by Florida nursing home residents against a nursing home facility and
its president for using fraud and deception to obtain an operating license, causing Florida
nursing home residents to suffer substandard levels of care. Defendants removed and
plaintiffs moved to remand under CAFA’s local controversy exception. The district court
granted the motion to remand. On appeal, defendants challenged the district court’s
determination that two-thirds of the class were citizens of Florida as required by CAFA’s
local controversy requirement. The Eleventh Circuit reversed, finding that plaintiffs’
evidence of citizenship was too general to meet their burden.

Floyd v. Am. Honda Motor Co., 966 F.3d 1027 (9th Cir. 2020) (also discussed
in connection with Chapter 4 and the relation between supplemental jurisdiction and the
Class Action Fairness Act) addresses as a matter of first impression the issue of the
relation between CAFA and the federal Magnuson-Moss Warranty Act. The MMWA
provides a cause of action for express and implied warranty claims under state law. It
authorizes federal jurisdiction, but on specific conditions. One condition is if the action
is brought as a class action, no jurisdiction attaches if “the number of named plaintiffs is
less than one hundred.” Plaintiffs, owners and lessors of vehicles, alleged a violation of
the MMWA and asserted jurisdiction under CAFA, but the complaint did not name one
hundred plaintiffs. The district court dismissed the MMWA claims, and the Ninth Circuit
affirmed, holding that CAFA did not impliedly repeal MMWA’s numerosity
requirements and that MMWA is “clear that a requirement for an MMWA class action in
federal court is at least one hundred named plaintiffs.” As the Ninth Circuit explained,
CAFA and MMWA “would have to present an irreconcilable conflict to overcome the
strong presumption against implied repeals.” In this case, there was no irreconcilable
conflict; rather MMWA “simply prevents” MMWA claims from proceeding under CAFA
“absent the satisfaction of certain jurisdictional prerequisites.” The Sixth Circuit, the
only other circuit to have considered the question, reached a different result, allowing
“CAFA to supersede the MMWA’s more stringent jurisdictional requirements.” A
number of district courts have taken the Sixth Circuit’s position, which rests on the view
that CAFA, as the most recent of the two statutes, “can render a district court a court of

60
competent jurisdiction and permit it to retain jurisdiction where the CAFA requisites are
met but the MMWA requisites are not.” Students might be asked to explain how the
conflict in this case differs from the conflict presented in Shady Grove, discussed in
Chapter 6 as part of the Erie/Hanna doctrine.

Chapter 11. Pretrial Devices for Obtaining Information: Depositions and Discovery

C. The Scope of Discovery: Relevance and Proportionality

Akridge v. Alfa Mutual Insurance Co., ___ F.4th ___, 2021 WL 2520631
(11th Cir. 2021), offers a compact fact pattern about relevance, limitations on
depositions, and summary judgment. Plaintiff sued, claiming discrimination in violation
of the Americans with Disabilities Act; the complaint alleged defendant fired plaintiff,
despite excellent job reviews, to avoid paying the costs of treating plaintiff’s multiple
sclerosis. Defendant defended by arguing that her position was no longer necessary
because of automation and a corporate reorganization. Plaintiff sought to depose ten
employees, including the then-Executive Vice President of Human Resources. Efforts to
depose the VP were unsuccessful, and plaintiff moved to compel testimony at various
times during the discovery period; the magistrate judge denied the motion each time,
finding that any information to be discovered was “minimally relevant” and “would be
disproportional to the needs of the case.” Eventually, the district court granted the
defendant’s motion for summary judgment on the ground that plaintiff failed to show that
her disability was a factor in the employer’s decision to eliminate the position. On
appeal, the Eleventh Circuit held that the district court abused its discretion in curtailing
plaintiff’s discovery, and so reversed and remanded. The VP was the “Decision Maker”
for the company’s disability plan, he was the “Decision” contact for the company’s
insurance plan, and he was a member of the senior management team, making it
“difficult” for the appeals court “to believe that [the VP] had no information touching on
Akridge’s medical expenses and termination.” Moreover, although defendant claimed
that compelling the deposition would be burdensome given the VP’s “busy work
schedule,” the benefit of his testimony outweighed any inconvenience to him. Finally,
the appeals court found no evidence of a “fishing expedition”—plaintiff had attempted to
depose the VP from the outset of discovery and had abided by all of the court’s
limitations.

G. Judicial Supervision of Discovery and Sanctions

Circuitronix, LLC v. Kinwong Electronic (Hong Kong) Co. Ltd., 993 F.3d
1299 (11th Cir. 2021), held that the district court did not abuse its discretion by
excluding lost-profit damages when the party had failed to disclose computation of those
damages and the failure was neither substantially justified nor harmless. The action was
brought by a distributor against a manufacturer for alleged breach of contract. The
district court rejected the argument that the omission was harmless because defendant
“could have done the computations itself,” since plaintiff “had disclosed how it planned
to do the computation,” and defendant had access to the underlying numbers. The

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appeals court affirmed, although it did not resolve what harmlessness means under Rule
37 or its relationship to prejudice, but, at the least, failing to disclose made it more
difficult for the opposing party’s expert to prepare an analysis before trial. Moreover, the
circuits are divided on whether exclusion is a mandatory sanction or whether the district
court has discretion to impose lesser sanctions, but plaintiff forfeited an objection to the
severity of the penalty by failing to challenge it in the district court.

Helena Agri-Enterprises, LLC v. Great Lakes Garin, LLC, 988 F.3d 260 (6th
Cir. 2021), concerned amendment of the discovery period and the impact of the explicit
“proportional” discovery limitation on the district court’s generally broad discretion over
the discovery process. The case pitted a creditor against third-generation farmers (“not a
modest Amish farm,” but rather an operation farming “about 100,000 acres”) for unpaid
debts. The district court granted summary judgment for the famers, who had been sued
for fraudulently creating new corporations to avoid paying their debt. On appeal,
plaintiff separately argued that the district court abused its discretion in denying three
discovery-related motions, all of which the appeals court affirmed. First, the district
court did not abuse its discretion in denying plaintiff’s third extension of the discovery
calendar with the stated goal of uncovering asset transfers. The district court heard oral
argument on the motion but concluded the pleadings did not provide a basis for additional
discovery. The district court’s failure to cite to Rule 16(b)(4) was not reversible error; it
met the rule by showing “a victory would beget no practical benefit.” Second, the denial
of a motion for additional discovery under Rule 56(d) was not an abuse of discretion.
The appeals court emphasized that the movant had four months of discovery after
learning about the establishment of new corporations, but was unable to devise a “viable
theory that could support its claims.” As the appeals court explained, “After sizing up the
situation and the history of discovery in the case, the district court determined that
additional discovery would not outweigh the ‘proportionality’ concerns implicated by the
delay and cost generated by continued discovery.” Finally, the district court’s denial of a
motion to compel execution of document authorization requests pertinent to crop
insurance was not an abuse of discretion, given the time plaintiff already had expended
on discovery and the conclusion that the material would not have supported plaintiff’s
theory of liability.

Strike 3 Holdings, LLC (Casebook, p. 863) has continued to be involved in

cutting-edge discovery disputes that affect the internet. The company is a distributor of
pornographic films and the action alleged copyright infringement by an unknown
subscriber of an internet protocol address who illegally downloaded and distributed the
films. The district court denied plaintiff’s motion to subpoena the internet service
provider to discover the subscriber’s identity, and dismissed the complaint. In Strike 3
Holdings LLC v. Doe, 964 F.3d 1203 (D.C. Cir. 2020), the D.C. Circuit reversed and
remanded. The district court, although it had broad discretion in overseeing the
discovery process, made three reversible errors. First, it assigned improper weight to
what it saw as the “aberrantly salacious nature” of Strike 3’s films and the privacy
interest of the Doe defendant; the appeals court questioned whether “privacy interests
have continuing relevance to the Rule 26(d)(1) analysis,” and that “the content of a
copyrighted work is per se irrelevant to a Rule 26(d)(1) motion seeking discovery to

62
identify an anonymous infringer.” Second, the district court committed legal error in
concluding the complaint could not state a plausible claim even if discovery was granted.
The rationale for immediate, court-ordered discovery is to identify an anonymous
defendant, and although the quality of the complaint will affect the Rule 26 inquiry, in
this case the district court misconstrued plaintiff’s pleading burden:

Strike 3 asserts that it has used a combination of forensic and geolocation

technology to tie a single IP address, registered to a user in the District of
Columbia, to twenty-two acts of infringement on specified dates over the
course of a year. Based on these allegations, a court could reasonably
infer that someone with prolonged, continuous access to this IP address
was responsible for the alleged infringement. Viewing the allegations in
the light most favorable to Strike 3, we think it at least plausible that the
registered IP address subscriber “actually did the infringing.”

Third, the district court impermissibly went outside the record to draw
impermissible inferences about plaintiff’s motivation for seeking discovery or filing the
lawsuit. Although courts can take judicial notice of filings in other courts, litigation
volume alone is not a marker of improper litigation purpose. (Strike 3 filed 2,000
copyright lawsuits in the 13 months prior to the district court’s decision, but those
amounted to only one out of 1,000 possible suits against United States-based infringers.)

Zampierollo-Rheinfeldt v. Ingersoll-Rand de Puerto Rico, Inc., 999 F.3d 37

(1st Cir. 2021), brings together discovery sanctions and the summary judgment record.
The suit was an age discrimination action under federal law and Puerto Rico’s
antidiscrimination statute and Unjust Discharge Act. The district court granted the
employer’s motion to strike two documents from the summary judgment record, and
separately granted the employer’s Rule 56 motion. On appeal, plaintiff argued that he
was not required to disclose the documents because they fell within the exception for
materials presented solely for impeachment; however, plaintiff failed to raise this
argument below and so it was forfeited. Rather, the district court had found that the
belated disclosure was neither substantially justified nor harmless under the “narrow
escape hatch” of Rule 37(c)(1), and the First Circuit agreed with the district court’s
assessment of the first factor but not the second—the late disclosure could not have
prejudiced defendant because the document was “substantially the same” as a document
defendant submitted with its motion for summary judgment and so had already been
considered in its case strategy. In the absence of harm, the district court erred in ordering
preclusion of the evidence, and the court reversed and remanded.

Chapter 12. Case Management

The Operation of Rule 16

2. The Final Pretrial Order

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 United States ex rel. Concilio De Salud Integral De Loíza, Inc. v. J.C.
Remodeling, Inc., 962 F.3d 34 (1st Cir. 2020), illustrates the high standard to amend a
pretrial order—“to prevent manifest injustice.” Even were the bar lower, it is hard to
imagine an appeals court reversing, as an abuse of discretion, the district court’s decision
denying a request to amend a pretrial order “three years into litigation, after the close of
discovery, and on the eve of trial.” The case itself was a relator’s qui tam action under
the False Claims Act by Concilio De Salud Integral De Loíza, Inc. (“CSILO”), a non-
profit in Puerto Rico that provides primary healthcare services in Puerto Rico using
federal funds against a contractor alleged to have misappropriated federal funds by doing
defective waterproofing in a construction project. The facts, if slimmed down and
presented in a simple chronology, could be the basis for a compact teaching hypothetical:

• The relator’s action was filed November 2014 (and the government declined
to intervene in 2015).
• The relator’s Initial Disclosures, exchanged in June 2016, stated that the
computation of damages was not yet available.
• The relator amended the complaint in January 2017 and requested damages
equal to three times the amount of the government’s damage plus a civil
penalty.
• During this period the parties exchanged documents and formulated the Joint
Pretrial Conference Report on 2017. That report “contained no mention of
anything specific as to requested damages, such as a description, computation,
or relevant evidence.”
• In December 2017, one month before trial, the district court held its Pretrial
Conference. At that conference, the district court judge asked whether CSILO
planned to present any evidence on damages at trial, and at that point CSILO
moved for leave to amend the Pretrial Order to include “Fraud Damages,”
“damages based on the original Written Agreement” and the contract price of
$135,000, as opposed to “Consequential Damages.” Defendant objected,
claiming delay and prejudice. After further briefing, the court denied the
motion to amend, finding CSILO had provided no “compelling reason to
justify the omissions” of damages from the Initial Disclosures or Pretrial
Report.
• At a seven-day trial in January 2018, CSILO was barred from introducing
evidence on damages. The jury found that defendant had violated the False
Claims Act, and the district court entered the statutory penalty.

On appeal, CSILO argued that amending the Pretrial Order would not have prejudiced
defendant because the original complaint requested damages equal to three times the
contract price, and the contract and contract price were discussed numerous times during
trial. CSILO requested either than the appeals court find defendant liable for $405,000
(three times the contract price), or “remand the case back to the Jury for a bifurcated trial
based solely on” damages. The First Circuit rejected this argument and affirmed. It
recognized that in the damages context, changes to a pretrial order have been permitted
“where such an amendment would result in no surprise and it was supported by the
evidence already in the record.” The problem in this case is that the False Claims Act

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does not say how damages are to be calculated, and CSILO would not necessarily have
been entitled to the full contract price, and so its request to amend the Pretrial Order was
“not necessarily as simple as it made it out to be” given the absence of evidence in the
record prior to trial. The appeals court offered a thorough analysis of the standards of
review and of the case law governing damages in False Claims Act cases. But in the end,
students should consider whether the affirmance can be explained by plaintiff’s delay and
the timing of the motion to amend on the eve of trial. Five times in about nine pages, the
court mentioned that three years had elapsed between the filing of the complaint and the
request to amend, and this litigation conduct was at odds with the purposes of Rule 16(e)
of “ensur[ing] everyone involved has sufficient incentive to fulfill the order’s dual
purposes of encouraging self-editing and providing reasonably fair disclosure to the court
and opposing parties alike of their real trial intentions.”

For another example of the high bar for amending a pretrial order, consider
Jordan v. Maxfield & Oberton Holdings, L.L.C., 977 F.3d 412 (5th Cir. 2020). The
action was brought by parents against a magnet manufacturer alleging defective design
and failure to warn resulting in injuries to their toddler who ingested the magnets. At
trial, plaintiffs argued only defective design. On the fifth day of trial, plaintiffs sought a
jury instruction that federal law partially preempted state law, a new legal theory not
presented at the pretrial conference. The judge denied their request, and the jury returned
a verdict in the defendant’s favor. Plaintiffs requested a new trial under Rule 59, and
relief from the judgment under Rule 60. The trial judge denied both motions, and they
appealed. The Fifth Circuit treated the request for a jury instruction as a motion to amend
the pretrial order. The appeals court found that granting the motion would have resulted
in injury to the defendant, because its trial strategy focused on rebutting state law claims,
and it did not conduct any discovery on preemption. On the other hand, the appeals court
found that plaintiffs did not suffer manifest injustice because their request was based on
evidence available to them at the pretrial conference. Finally, the Court noted that
amending the pretrial order could have caused great inconvenience to the district court.
(“Amending the pretrial order at that stage would have been grounds for a continuance or
even a mistrial and could have caused both the district court and the parties great
inconvenience.”)

Caradigm USA LLC v. PruittHealth, Inc., 964 F.3d 1259 (11th Cir. 2020),
illustrates how the pretrial order can affect appealability. A computer software company
sued a healthcare provider for breach of contract, and the provider filed a counterclaim
for breach of warranty, an implied duty of good faith, and fair dealing. The district court
entered summary judgment for plaintiff on the breach of contract claim, and left the issue
of damages for the jury, which awarded $11 million, which included contract damages,
compound interest on the damages, and attorney fees and expenses. On appeal,
defendant challenged errors leading up to the jury’s verdict, resulting in overstated
damages. One of the threshold issues was whether defendant had waived an objection to
compound interest; under Georgia law, which governed the dispute, interest is to be
calculated in simple terms unless the contract specifically provides for compound
interest. To answer that question, the appeals court looked to the Pretrial Order, which
stated “normal damages principles would apply.” According to the district court, this

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language was insufficient to preserve an objection to compound interest. However, the
Eleventh Circuit held that the issue was not waived, and that both the plaintiff and the
trial court had prior notice that defendant believed it was entitled to a simple-interest
calculation. Although the Pretrial Order could have been more detailed, the compound
interest issue in the case was “a routine matter with respect to which the underlying law is
very clear.” Moreover, defendant argued the matter in its brief, admittedly in a footnote;
and it raised the issue when cross-examining plaintiff’s damages expert, and in a motion
for judgment as a matter of law. The court then on the merits held it was error to award
compound interest and remanded.

C. Non-Article III Judicial Personnel

For examples of cases in which courts appointed special masters or a dispute

arose about the master’s activities, consider:

• Chevron Corp. v. Donziger, 990 F.3d 191 (2d Cir. 2021), involving the
award of fees paid for a special master.

• AMA Multimedia, LLC v. Wanat, 970 F.3d 1201 (9th Cir. 2020),
involving appointment of a special master familiar with both United States
and Polish law to resolve discovery disputes in an internet copyright
infringement case involving complex international/multi-national data privacy
law.

• Shakman v. Clerk of Cook County, 994 F.3d 832 (7th Cir. 2021), holding
that an interlocutory order appointing a special master to oversee a consent
decree regulating political patronage was not appealable; the appointment did
not constitute a modification of the consent and the special master was “acting
only as an arm of the court to help address ‘posttrial matters that cannot be
effectively and timely addressed’ by the assigned judge.”

• Quantum Sail Design Grp., LLC v. Jannie Reuvers Sails, Ltd., 827 Fed.
Appx. 485 (6th Cir. 2020), holding that the appointment of a special master
to perform an accounting and to prepare a report regarding findings of facts as
to royalties owed to the licensor of trade secrets did not violate Rule
53(a)(1)(A)’s limit that special masters only “perform duties consented to by
the parties” because the appointment was warranted by the need “to perform
an accounting or resolve a difficult computation of damages,” as authorized
by Fed Rule 53(a)(1)(B). The Sixth Circuit also found that the district court
did not violate Rule 53(f)(4)’s requirement that courts “must decide de novo
all objections to conclusions of law made or recommended by a master” when
it submitted certain questions to the Special Master and sought clarification.

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Chapter 13. Adjudication without Trial or by Special Proceeding

A. Summary Judgment

Students sometimes have difficulty with the technical requirements of Rule 56(c)
and, in particular, the materials that a party must put forth to assert that a “fact cannot be
or is genuinely disputed.” In Lewis v. Stewart, 2021 WL 2169021 (W.D. Wash. 2021),
a pro se prisoner suit, defendants moved for partial summary judgment on the First
Amendment claim that they lacked a legitimate penological interest in denying plaintiff’s
request to participate in the Ramadan meal program. Plaintiff failed to respond to the
motion. However, because the complaint was signed under penalty of perjury, the court
treated the allegations as evidence to the extent they were based on personal information
and set forth facts that would be admissible in evidence. (The Magistrate Judge
recommended that summary judgment be granted.)

Castillo v. Progressive Insurance, 2021 WL 963478 (M.D. Pa. 2021), offers a

compact set of facts that could become a classroom exercise focusing on the evidence
that must be put forward to defeat summary judgment. Plaintiff was in an accident while
pregnant and sued the insurer, alleging breach of the insurance policy and that it settled
the claim in bad faith in violation of Pennsylvania law. To win on a bad-faith claim, the
insured must show by clear and convincing evidence that the insurer lacked a reasonable
basis for denying benefits and that the insurer “knew of or recklessly disregarded its lack
of reasonable basis in denying the claim.” Defendant moved for summary judgment,
showing that its agent, prior to making the settlement offer, reviewed medical records and
independently considered plaintiff’s explanation for her delay in seeking treatment.
Plaintiff opposed the motion with statements that the insurer performed “no objective
evaluation” and “simply placed telephone calls” to other insurers. The court treated these
statements as conclusory and lacking evidentiary support, finding that defendant’s
uncontroverted evidence showed that the insurer independently reviewed and took notes
on plaintiff’s medical records, and plaintiff did not identify for the court any evidence
available to the insurer that was ignored or arbitrarily discounted. On these facts, the
court found that “the record establishes nothing more than a legitimate disagreement over
causation of [plaintiff’s] injuries and valuation of her claim”—concluding, “there is
simply no evidence from which a reasonable juror could find that [the insurer] knowingly
or recklessly made its initial settlement offer in bad faith.” As a matter of strategy,
students can consider the types of evidence the insured might feasibly have submitted—
or sought during discovery—in order to support the claim and to defeat the Rule 56
motion.

As the basis for a writing exercise on the burden-shifting framework of Rule 56

and McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668
(1973), consider Demuth v. U.S. Small Business Association, 819 Fed. Appx. 23 (2d
Cir. 2020), cert. denied 141 S.Ct. 1741 (2021). A former employee alleged that her
employer “progressively squeezed” her out, as the only female informational technology
programmer, in favor of preferred male programmers with less experience, and then after
she sought counseling from the Equal Employment Office retaliated by dismissing her.

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The circuit decision affirming summary judgment for the defendant is thin on facts; for
those, look at the report and recommendation, 2019 WL 806898 (W.D.N.Y. 2019).

Doe v. Dejoy, 2021 WL 777582 (E.D. Pa. 2021), a discrimination suit under
Title VII and Section 504 of the Rehabilitation Act, raised similar issues about the kind of
evidence needed to support or defeat a Rule 56 motion, but in a somewhat complicated
fact pattern. Plaintiff alleged sexual harassment by coworkers and eventual termination
on account of sexual orientation and HIV-positive status. Plaintiff’s right to relief turned
on whether he had actual or constructive notice of the relevant 45-day limitations period
for initiating the administrative pre-complaint process set out in the federal regulation.
Finding that the record was not clear on this point, the district court directed the parties to
engage in fact discovery followed by summary judgment on this single issue. Defendant
put forward evidence showing that it displayed posters announcing the limitations period,
that it provided trainings about the limitation period, and that plaintiff had access to the
employee manual providing information about the limitations period. The court found
that plaintiff pointed to no record evidence that raised a genuine dispute:

Doe’s failure in this regard can be illustrated in reviewing several of his

responses to USPS’s statement of undisputed material facts. For example,
Doe’s attempts to dispute—or, perhaps more accurately, his attempts to
avoid conceding—USPS’s assertion regarding the placement and language
of Poster 72, are limited to his averments that “[he] has no way of
knowing whether a certain version [of Poster 72] was posted at a certain
time,” and that “[he] has no recollection of the specific documents, the
particularized language within each of the documents, and [he] stated the
same in response to discovery.” Doe Answer ¶¶ 14-16. Similarly, Doe’s
response to USPS’s assertion that Poster 72 “prominently and explicitly
provides” plain language regarding the 45-day limitations period, USPS
SOMF ¶ 13, is as follows: “This characterization is advocacy-constructed
and is being denied,” Doe Answer ¶ 13.

Zampierollo-Rheinfeldt v. Ingersoll-Rand de Puerto Rico, Inc., 999 F.3d 37

(1st Cir. 2021), could provide the basis for a classroom problem on applying the Rule 56
standard in an age discrimination suit involving direct evidence of discriminatory animus.
The First Circuit reversed the district court’s granting of summary judgment for the
employer. Statements that are “inherently ambiguous” do not qualify as direct evidence,
and in this case the court carefully reviewed deposition testimony to conclude that a
reasonable jury could conclude that use of the word “rejuvenation” unambiguously
suggests age-based animus.

The effects of Merck Sharp & Dohme Corp. (Rules Supplement, Part X), that
preemption presents issues of law to be decided by the judge and not the jury, are
beginning to be registered in Federal Rule 56 practice. In In re Zofran (Ondansetron)
Products Liability Litigation, 2021 WL 2209871 (D. Mass. 2021), defendant renewed
its motion for summary judgment, on the theory that state-law claims of failure to provide
an adequate warning are preempted by federal law, and the district court agreed—

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dismissing more than 400 individual product liability cases alleging that the use of the
anti-emetic Zofran by pregnant women caused their children to be born with birth
defects. The order came on the eve of what was planned as the first bellwether trial in
these cases, which had been consolidated by the Judicial Panel on Multidistrict Litigation.

Broussard v. Blount, ___ So. 3d ___, 2021 WL 1782907 (La. App. Ct. 2021), a
state case, provides a simple fact pattern for a classroom problem about Rule 56 burdens.
A car driver and passenger sued a truck driver and truck owner for negligence and
injuries allegedly resulting from a collision that was said to have occurred when the truck
driver merged into the driver’s lane while driving on a highway. Defendants moved for
summary judgment, and after some intermediate procedural steps, the court granted the
motion. On appeal, the court held that the truck driver and owner did not meet the initial
burden of production by merely pointing out that the car driver and passenger lacked
factual support for their claims. Although defendants attached various documents to their
motion papers, none of them “affirmatively negate[d] an essential element” of the
negligence claim. On this basis, the court held that the burden of proof never shifted to
plaintiffs. Would the result be the same in federal court under Celotex?

B. Dismissal of Actions

1. Voluntary Dismissal

Mitchell v. Roberts, 2021 WL 1624100 (D. Utah 2021), appeal filed (10th Cir.
2021), puts squarely the conflict between McCants (Casebook, p. 984) and Wojtas
(Casebook, p. 985). It is an unusual case that brings together state-law certification and
Rule 41. The context is current and important: reviving previously time-barred claims of
sexual abuse. In 2016, plaintiff sued alleging that defendant had sexually assaulted her in
1981 when he was a prosecutor, and she was a sixteen-year-old witness in a murder case.
Defendant moved to dismiss with prejudice, arguing, among other things, that the claims
were time-barred. That year, Utah amended its statute of limitations to revive time-
barred sexual abuse claims on certain conditions. Before the court ruled on the motion to
dismiss, plaintiff voluntarily dismissed the case. Plaintiff then refiled her complaint,
alleging many of the same claims as in the original complaint. Defendant again moved to
dismiss arguing that the claims were time-barred and challenging the constitutionality of
the revival statute. In 2017, after briefing, the district court certified questions to the
Utah Supreme Court regarding legislative power to revive claims, and in 2019
administratively closed the suit pending a decision from the state court. In 2020, the
Utah Supreme Court answered the certified questions, holding that the state constitution
barred the legislature from revising stale claims “in a manner depriving a defendant of a
vested statute of limitations defense,” and that the state constitution could be amended to
authorize legislative action of this sort. Defendant then moved to reopen the motion to
dismiss, and plaintiff moved to voluntarily dismiss the case without prejudice. The
parties agreed that the action was time-barred and should be dismissed; the question was
whether voluntary dismissal should be with or without prejudice. To answer that
question, the court turned to Rule 41(a)(2) to assess whether “legal prejudice” was
present. On the one hand, merely facing a second lawsuit was not legal prejudice, but

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loss of a vested statute of limitations defense was. On the other hand, dismissal with
prejudice would bar plaintiff from seeking relief in the event of a constitutional
amendment, putting her at a disadvantage relative to other victims of sexual predation. In
the end, the district court dismissed with prejudice, explaining that it could not devise
limiting conditions on a non-prejudicial dismissal that would avoid legal prejudice to
defendant.

C. Default Judgment

Price Simms Holdings, LLC v. Candle3, LLC, 2021 WL 1264919 (E.D. Cal.
2021), illustrates clearly the inquiry a court should undertake before entering a default
judgment for failure to prosecute. After terminating an agreement with defendant,
plaintiff sued defendant in state court for breach of contract. Defendant removed and,
after plaintiffs amended the complaint three times, asserted counterclaims. Defendant’s
counsel withdrew from the case, and at that point defendant stopped participating in the
lawsuit. The Clerk entered a default, and plaintiffs then moved for a default judgment
and dismissal of the counterclaims. Students can be asked to walk through the two-step
process of Federal Rule 55, and to consider the factors that a court should consider before
granting or denying the application for default. In particular, can claims that are legally
insufficient be established by default? Does an entry of default automatically establish
damages? In the Ninth Circuit, district courts are advised to consider:

1. the possibility of prejudice to the plaintiff;

2. the merits of plaintiffs’ substantive claim and the sufficiency of the complaint;
3. the sum of money at stake in the action;
4. the possibility of a dispute concerning material facts;
5. whether the default was due to excusable neglect; and
6. the strong policy underlying the Federal Rules of Civil Procedure favoring
decisions on the merits.

The decision carefully reviewed each factor and held that default was warranted. Turning
to the counterclaims, the court first underscored that under Eastern District Local Rule
183(a), unrepresented parties are bound by the Federal Rules and failure to comply with
the rules is subject to sanction, including dismissal under Federal Rule 41(b). Ninth
Circuit precedent directed the court to look to five factors:

1) the public’s interest in expeditious resolution of litigation; (2) the court’s need
to manage its docket; (3) the risk of prejudice to the defendants; (4) the public
policy favoring disposition of cases on their merits; and (5) the availability of less
drastic alternatives.

Again, the court carefully considered each factor and ordered dismissal of the
counterclaims.

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Chapter 14. Trial

A. Trial by Jury

We include a summary of Google LLC v. Oracle America, Inc., 593 U.S. ___,
141 S.Ct. 1183, 209 L.Ed.2d 311 (2021), in the Rules Supplement (Part X). Paley v.
KLS Professional Advisors Group, LLC, 2021 WL 2413373 (S.D.N.Y. 2021),
provides a familiar fact pattern for illustrating the concept of mixed question of law and
fact and when it properly is assigned to the trial court and not to the jury. Plaintiff
alleged he was fired in retaliation for whistleblowing and as discrimination based on
disability. Defendant moved to dismiss, and the court denied the motion. The court
made clear that issues of intent and motivation, central to the question of termination,
were “classic matters calling for determination by a jury.” Whether a party’s belief was
“objectively reasonable” is a mixed question of fact and law, “meaning that it should be
decided by the Court only if there is no genuine issue of material fact as to the belief’s
reasonableness.”

Gerics v. Trevino, 974 F.3d 798 (6th Cir. 2020), was a civil rights suit for
wrongful arrest. Plaintiff moved for summary judgment on the issue of probable cause,
and the district court denied the motion. The case proceeded to a jury trial, the judge
instructed the jury to decide the question of probable cause, and the jury found in favor of
defendant. Plaintiff appealed, not to challenge the jury verdict, but rather the denial of
his summary judgment motion. The Sixth Circuit held that it could not review a denial of
summary judgment unless the denial raised a pure question of law. After reviewing the
confusing and inconsistent caselaw on the subject, the Sixth Circuit clarified “that the
ultimate question of probable cause (separate from the determination of historical facts)
in a civil case when the historical facts are undisputed is a question of law for the court
and not a jury.” (Emphasis in original.) In this case, the district court found that the
historical facts were not in dispute, but it reserved the ultimate probable cause question
for the jury. The Sixth Circuit agreed with the plaintiff that the district court should not
have given the probable cause question to the jury. However, that conclusion did not
provide a basis for reviewing the district court’s denial of summary judgment. As the
appeals court explained, the probable-cause question involves a legal determination, but
“not the kind of pure legal question” that allows for review, even if the factual record is
undisputed at summary judgment.

Federal Trade Commission v. Quincy Bioscience Holding Co., 2021 WL

1608953 (S.D.N.Y. 2021), offers a compact problem that brings together the caselaw on
hybrid relief, newly established rights to relief, and choice of federal or state law to
characterize the claim and remedy for purposes of the Seventh Amendment civil jury
right. The suit was an enforcement action brought by the Federal Trade Commission
under Section 13(b) of the Federal Trade Commission Act and New York law. After the
suit was filed, the U.S. Supreme Court held that the FTC Act does not authorize equitable
monetary relief, such as restitution or disgorgement, leaving only the prospect of
injunctive relief. See AMG Cap. Mgmt., LLC v. Fed. Trade Comm’n, 593 U.S. ___, 141
S.Ct. 1341, 209 L.Ed.2d 361 (2021). Because injunctive relief is purely equitable, the

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jury right was not available. The district court then separately considered whether the
state law claims entitled defendant to a jury trial. First, the court made clear that federal
law, not state law, determines whether the jury right attaches. (This point may not be
obvious to students, especially if they have not yet been introduced to the civil jury right
through the Erie doctrine and, in particular, the Byrd case (Casebook, p. 424).) Next, the
court applied a two-step process, first looking to state law to determine “the nature of the
action and the remedies provided under that law,” and then looking to federal law “to
characterize the action and remedies as either legal or equitable” (internal citations and
quotation marks omitted). Enforcement was sought under two state laws, New York
Executive Law § 63(12) and New York General Business Law §§ 349, 350-d. Together
they authorized the Attorney General to bring an action for injunctive relief, restitution,
damages and costs to redress “repeated or persistent fraudulent or illegal conduct.” State
law also authorized the Attorney General to enjoin deceptive acts, to seek restitution, and
to impose civil penalties. Looking to federal law to characterize these claims as legal or
equitable, the court applied what it called the “standard test,” “first whether the action
would have been deemed legal or equitable in 18th century England, and second whether
the remedy sought is legal or equitable,” emphasizing that the “second factor is more
important than the first,” and relying for that principle upon Granfinanciera (Casebook,
p. 1017). The court found that the state cause of action, which went “beyond common-
law fraud,” had “no precise analogue common-law-cause of action,” but nevertheless
concluded that the nature of the remedy supported the jury trial right. On this question,
the court applied the test set out in Tull (Casebook, p. 1015), explaining “that civil
penalties are a legal remedy that could not be enforced by courts in equity.” Although
the Attorney General was “primarily seeking equitable relief,” the civil penalties
potentially amounted to millions of dollars and could not be considered incidental or
intertwined with the equitable relief sought. But, under Dairy Queen (Casebook, p.
1006) and Curtis v. Loether (Casebook, p. 1012), even if the penalties were incidental or
intertwined, the jury right would still attach to the claim for civil penalties—the right to a
jury trial on a legal claim “is not lost by joinder with an equitable claim except in
extraordinary circumstances.” Having found that the right to a jury trial attached to the
state law claim for civil penalties, the court then considered whether defendants had
waived their right. On this question, the court turned to Federal Rule 38 and found that
written communications between the parties, later memorialized in a case management
statements, sufficed to make a timely demand; it was not necessary to include the request
in a pleading.

5. Demand and Waiver of Trial by Jury

Walton v. First Merchant’s Bank, 820 Fed. Appx. 450 (7th Cir. 2020), offers a
variant on the jury-waiver issue—the dispute focused on an implied waiver through
litigation conduct of a contractual right to a bench trial, which led to denial of plaintiff’s
jury demand. The decision may also be of interest because the appeals panel included
then-Judge Amy C. Barrett. Plaintiff had several accounts at a bank that merged with
another bank. After the merger, the bank sent all customers, including plaintiff, a
Consumer Disclosure Booklet that provided for mandatory arbitration of any disputes
about its services, with the proviso that any claim that was not arbitrated would be

72
“decided in the courts of Delaware County, Indiana, without a jury.” Plaintiff sued the
bank under two federal laws, alleging she had received, without her consent, hundreds of
robocalls and overdraft fees. Plaintiff demanded a jury trial and asserted that the
arbitration clause did not apply. Defendant answered, and did not challenge the jury
demand or invoke the arbitration clause. Rather, it filed a case management plan stating
it anticipated a three-to-four-day jury trial. Following discovery, the parties cross-moved
for summary judgment, which the court granted and denied in part. After an unsuccessful
settlement conference, the court scheduled a jury trial and plaintiff obtained counsel. At
that point, defendant moved under Federal Rule 12(f) to strike the jury demand. The
court held it had discretion to consider an untimely motion, found that defendant’s
conduct did not show intentional relinquishment of the right to a bench trial, and
concluded that a bench trial would not prejudice plaintiff because it required less
preparation. After trial, the court held for defendant and assessed attorney fees against
plaintiff.

On appeal, plaintiff, once again pro se, argued that the district court erred in
striking her jury demand. The appeals court found that defendant implicitly waived its
contractual right to a bench trial through its delay and lack of diligence in asserting its
rights under the contract. However, the appeals court also considered whether denying
the jury trial was harmless, i.e., whether defendant would have been entitled to a directed
verdict. The appeals court found that the denial was not harmless as to the claim under
the Telephone Consumer Protection Act, but harmless as to the other federal claim, under
the Electronic Funds Transfer Act. (The court affirmed the fee award.)

C. Taking the Case from the Jury

2. The Motion for Judgment as a Matter of Law after the Verdict

Circuitronix, LLC v. Kinwong Electronic (Hong Kong) Co. Ltd., 993 F.3d
1299 (11th Cir. 2021), addressed the timeliness of a Rule 50(b) motion, needed to
preserve the issue for appeal, after a party has made an unsuccessful Rule 50(a) motion
during trial. The 28-day window may not be extended by the district court, although the
filing deadline is extended by Rule 6 in some specified circumstances. The Eleventh
Circuit held that decision of the Chief Judge of the Southern District of Florida
designating July 5 as a holiday, and that “the Court will be closed” on that day, made the
clerk’s office inaccessible under Rule 6(a)(3)(A) even though the litigant could have filed
the motion electronically. The appeals court also explained that an amendment to Rule 5,
making electronic filing mandatory for represented parties, did not impliedly amend the
scope of inaccessibility under Rule 6. (Having found the Rule 50(b) motion timely, the
court then rejected it on the merits.)

Chapter 15. Securing and Enforcing Judgments

B. Methods of Securing the Judgment—Provisional Remedies

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 Ordinarily a party must seek an injunction pending appeal first in the district
court. However, exigent circumstances may make it impracticable to do so, and the
appeals court may entertain the motion. As an example, consider Boston Parent
Coalition for Academic Excellence Corp. v. School Committee of City of Boston, 996
F.3d 37 (1st Cir. 2021). The suit involved a challenge to the city’s plan to use zip codes
ranked in reverse order by family income for school admission, on the ground that it
discriminated against white and Asian students. The appeals court agreed that the
imminence of implementation made “recourse to the district court sufficiently
impracticable, albeit just barely so, to allow plaintiff to proceed with its motion,” and
then denied the motion, looking to the probability of success on the merits and the
balance of potential harms. The court placed a great deal of weight on plaintiffs’ having
delayed four months before filing the lawsuit—essentially creating the emergency that it
now wanted the appeals court to remedy. Drawing an analogy to election law cases, the
court found that the plaintiffs had not shown reasonable diligence and that granting relief
would “unsettle important expectations” of “thousands of families awaiting” the
admission decisions.

Ryan v. U.S. Immigration and Customs Enforcement, 974 F.3d 9 (1st Cir.
2020), involved a challenge to the policy of the U.S. Immigration and Customs
Enforcement to conduct civil arrests of non-citizens in state courthouses. The district
court granted plaintiffs’ motion for a preliminary injunction, and the circuit court
reversed. The First Circuit found no precedent to support the claim that ICE’s authority
was subject to a common law privilege against courthouse arrests, and rejected plaintiff’s
argument that, given sovereignty concerns, Congress needed to make ICE’s authority
explicit before allowing civil arrests in state courthouses. Finding no likelihood of
success on the merits, the appeals court did not undertake a balancing of hardships or the
proper scope of the injunction, and vacated and remanded.

Roman v. Wolf, 977 F.3d 935 (9th Cir. 2020), presents an important and timely
fact pattern for discussion of the standing for granting a preliminary injunction and the
role of changed circumstances in modifying the relief. Noncitizens who were detained
during the pandemic at the Adelanto Immigration and Customs Enforcement Processing
Center filed a class action arguing that conditions violated their due process right to
reasonable safety. The district court imposed a moratorium on Adelanto’s receipt of new
detainees, required specific sanitation measures, and mandated CDC compliance. The
Ninth Circuit affirmed in part, recognizing that “the district court had broad equitable
authority to grant provisional relief to remedy a likely constitutional violation.”
However, it vacated and remanded in part for the district court to assess the effect of
changed conditions. As the appeals court explained, “At the time the injunction issued,
Adelanto was so crowded that social distancing to combat the spread of the novel
coronavirus was impossible, detainees had inadequate access to masks, guards were not
required to wear masks, there was not enough soap or hand sanitizer to go around,
detainees were responsible for cleaning the facility with only dirty towels and dirty water,
detainees were compelled to sleep with less than six feet of distance between them, and
not all new arrivals were being properly quarantined or tested.” At the time of the appeal
the population had been reduced from 1,370 to 748, but the facility was experiencing a

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COVID outbreak, which had not been present at the outset of the lawsuit. The appeals
court accompanied the remand order with “observations” for the district court to
consider. For example, the appeals court indicated that relief must be based upon
“medical evidence properly before the court,” and not “declarations filed in other
litigation”; should “reflect the scientific evidence about COVID-19 presented to the
district court”: and should not attempt to enforce CDC guidelines which in the appeals
court’s view did not provide a “workable standard.” Classroom discussion also could
focus on the role of the district court’s provisional certification of a class action.

For another case involving a request for emergency relief because of COVID,
with a different result, see, e.g., Hope v. Warden York County Prison, 972 F.3d 310
(3d Cir. 2020) (vacating and remanding order granting habeas corpus relief for 22
immigrant-detainees with higher medical risk profiles seeking immediate release due to
COVID). Compare Zepeda Rivas v. Jennings, 845 Fed. Appx. 530, 532 (9th Cir.
2021) (upholding bail orders for immigration detainees as part of class petition for habeas
and injunctive and declaratory relief alleging conditions of confinement violated Due
Process rights); see also Roman v. Wolf, 829 Fed. Appx. 165, 167 (9th Cir. 2020)
(affirming in part, vacating in part, and remanding preliminary injunction; see above,
different order same case).

Although the topic is an advanced one for 1L Procedure, some mention might be
made of stays of injunctive relief pending appeal, a litigation development that carries
strategic importance both for the public and the parties. For an illustrative application in
an election case that students might find interesting, consider Common Cause Indiana
v. Lawson, 978 F.3d 1036 (7th Cir. 2020). A voting rights advocacy group challenged
amendments to the Indiana election code’s standards for extending poll hours, claiming
among other grounds that it burdened the right to vote. The case was one of four in
which the Seventh Circuit considered whether it ought to enjoin election rules on the eve
of an election, and relied upon the presumption “against upholding last-minute
injunctions.”

In Alabama Association of Realtors v. Department of Health & Human

Services, 2021 WL 2667610 (U.S., June 29, 2021), the Supreme Court denied an
emergency application filed by a coalition of landlords and realtor groups to vacate a stay
of a district court order lifting the federal government’s nationwide eviction moratorium.
The moratorium was issued in March 2020 as part of the first coronavirus relief bill, and
was extended through CDC orders.

The distinction between a preliminary injunction and a writ for attachment—

critical as a basis for an interlocutory appeal—was addressed as a matter of first
impression in Ditucci v. Bowser, 985 F.3d 804 (10th Cir. 2021). Investors in a real
estate deal sued alleging fraud, breach of contract, breach of fiduciary duty, and unjust
enrichment. A month after the suit was filed, the defendant company filed for
bankruptcy. Sometime after filing suit plaintiffs learned that one of the individual
defendants was selling a $2.4 million residence. Their litigation moves highlight why
and when an attachment may be important to protect plaintiff’s interest. They filed an

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emergency motion, seeking an ex parte prejudgment writ attaching the proceeds of the
pending sale. The court denied the request but held an expedited hearing on the motion,
followed by additional briefing and an evidentiary hearing. In between, the parties
consented to issuance of a temporary restraining order that allowed the defendant to sell a
different property and to use some of the proceeds for specified purposes. After the
hearing, the court granted plaintiff’s motion, stating it was issuing “a prejudgment writ of
attachment on the net proceeds of the sale.” The individual defendant filed an appeal.
Writs of attachment are not appealable as interlocutory orders under 28 U.S.C. § 1291.
Moreover, the Supreme Court has held that an appeal as of right is available under §
1292(a)(1) only when the order “might have a serious, perhaps irreparable, consequence.”
Whether or not the order was an order of attachment under state law, it failed the test of
irreparable consequences because, as a general matter, “a temporary restraint on the use
of passive assets does not threaten irreparable injury.” Notably, the appeals court
mentioned one constraint on use of the assets that could present serious irreparable
injury—namely, the contention that the order would bar defendant from obtaining legal
representation. However, because the district court had not yet ruled on that question, the
appeals court held that it should be considered on remand and not as a basis for appeal.

The question of who is bound by a provisional remedy is presented by

Uniformed Fire Officers Association v. de Blasio, 973 F.3d 41(2d Cir. 2020). The
fact pattern is timely and important. The police officers’ labor union sued in state court
to bar the public disclosure of reports and records contained in non-final civilian
complaints and misconduct allegations against officers. After the state court issued a
temporary restraining order, defendants removed to federal court. The district court
extended the TRO and applied it to the New York Civil Liberties Union, a non-party civil
rights organization, which had obtained access to the records in response to a request it
had made under the state Freedom of Information Law. The district court later modified
the order to exempt the NYCLU. Plaintiffs appealed and their request for a stay pending
appeal was denied by the district court. On appeal, the issue pertinent to the stay was
whether the NYCLU was an entity “in active concert or participation with” those bound
by the TRO under Federal Rule 65(d)(2)(C). The Second Circuit agreed with the district
court: because the NYCLU had lawfully gained access to the records before the district
court barred disclosure, it was not “in active concert” and “obviously could not have
known of a prohibition that did not then exist.”

Chapter 16. Appellate Review

A. The Principle of Finality

1. Application of the Basic Concept

WM Capital Partners 53, LLC v. Barreras, Inc., 975 F.3d 77 (1st Cir. 2020),
offers a clear discussion of the requirement of a final judgment as a basis for appellate
jurisdiction under 28 U.S.C. § 1291. The decision also explains very well why a final
judgment —one that “ends the litigation on the merits and leaves nothing for the court to
do but execute the judgment”—is functionally important both to protect the parties’

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interests and to ensure meaningful review. A leaseholder brought a diversity action
against the lessor, seeking a declaratory judgment to specify rights in property. The
district court exercised jurisdiction, granted plaintiff’s motion for summary judgment,
denied defendant’s cross-motion for summary judgment, and instructed the Clerk of the
Court to “enter judgment as to all defendants.” The Clerk of the Court issued an order
captioned “JUDGMENT” on the day that the Opinion issued, stating, “pursuant to the
Court’s Opinion and Order, ... [j]udgment is HEREBY ENTERED as to all defendants in
favor of plaintiff.” That day, defendant filed a notice of appeal. Afterwards, the plaintiff
submitted its proposed declaration, and defendant filed objections. The district court
stayed the proceedings pending the appeal and took no further action. The First Circuit
dismissed the appeal; as in Liberty Mutual Insurance Co. v. Wetzel (Casebook, p. 1158),
the appeals court considered the threshold jurisdictional issue sua sponte (see p. 1161,
Note 1). Appellate jurisdiction was not present under § 1291 because the district court
had never issued a final decision; the fact that it could have issued one—and believed that
the filing of the notice of appeal divested it of power—did not create appellate
jurisdiction. Moreover, the appeals court made clear that the absence of a final judgment
was not simply a formal defect, but rather a functional barrier to review. As the appeals
court explained:

The parties’ appellate briefs and the flurry of motions filed in the district
court after the notice of appeal demonstrate why the precise specification
of the parties’ rights is essential, both for appellate review and for the
understanding of the parties about the status of their competing claims. *
* * [I]t is apparent that the parties do not understand their rights in the
Towers and the leasehold even after the district court’s grant of summary
judgment.

United States v. Clark, 977 F.3d 1283 (D.C. Cir. 2020), a habeas case, dives
deeper into the concept of finality and explores the continuing vitality—if any—of the
Gillespie doctrine and the concept of the “practically” final order as a basis for appellate
jurisdiction (Casebook, p. 1205). Petitioner was convicted on the basis of testimony that
was later recanted. He filed a pro se habeas petition that made three claims: (1) a
recantation claim, (2) ineffective assistance of trial counsel, and (3) ineffective assistance
of appellate counsel. After the court assigned counsel, petitioner supplemented the
habeas petition with a fourth claim, that 18 U.S.C. § 924(c)(1)(A), which added a
mandatory five years to his sentence, was unconstitutionally vague under the Supreme
Court’s decision in Johnson v. United States, 576 U.S. 591 (2015). The district denied
relief on the original three claims, reserved decision on the § 924(c) claim while United
States v. Davis, 139 S. Ct. 2319 (2019), was pending, and later issued a certificate of
appealability on the recantation claim. The D.C. Circuit, sua sponte, held that the district
court’s order was “nonfinal on its face” and appellate jurisdiction was not present,
rejecting petitioner’s argument that under Gillespie, the three dismissed claims could be
treated as “totally separate” from the § 924(c) claim because the latter supplemented the
petition. As the court explained, petitioner’s distinction did not differentiate the appeal
“from any other nonfinal order in which a district court has dismissed one potentially

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dispositive claim or granted summary judgment.” Moreover, the fact that the finality
question arose in the habeas context did not change the result:

Finality does not depend on when one’s claims are filed—it depends on
whether the entire case has been decided. Indeed, in the general civil
context, the final-judgment rule is not satisfied if “the plaintiff is free to
amend his pleading and continue the litigation”—even where his
complaint has already been dismissed by the district court. * * * So too
in habeas proceedings. If a decision is not final so long as a plaintiff may
file additional claims (or amend existing ones), then, a fortiori, the district
court’s failure to decide supplemental claims already filed cannot make
final an otherwise interlocutory order. It should also be recognized that
endorsing [petitioner’s] argument would defeat the policy against
piecemeal appeals. On his theory, whenever a habeas petitioner files his
claims in succession, he may subsequently appeal the denial of those
claims bit by bit rather than at the end of the litigation. But that would
encourage manipulative filings and “vitiate the final judgment rule
altogether.” * * *

Finally, the appeals court rejected the argument that the district court’s certificate of
appealability established finality under 28 U.S.C. § 2253; the statute “requires both a
final order and a certificate of appealability.” To be sure, Federal Rule 54(b) permits the
district court to “enter a final judgment as to one or more (but fewer than all) claims
when there ‘is no just reason for delay.’” However, unless the district court makes “the
express determination and direction required by Rule 54(b), the [district court’s]
judgment cannot be considered final ‘as to any of the claims.’” * * *

3. Departures from the Final Judgment Rule in the Federal Courts

a. Defining Finality

i. Cases Involving Multiple Claims

Attias v. CareFirst, Inc., 969 F.3d 412 (D.C. Cir. 2020). In the wake of a data
breach of health insurance information, seven customers sued, asserting multiple
contract, tort, and statutory claims. The district court dismissed all of the claims of five
plaintiffs and most of the claims of two. The district court directed the parties “to advise
the court “whether it should certify questions for interlocutory appeal under 28 U.S.C. §
1292(b)” or issue an order under Federal Rule 54(b). The parties agreed to Rule 54(b)
certification, and the district court issued a brief order that tracked the language of the
rule and provided no explanation as to why “no just reason for delay” existed. The
District of Columbia Circuit sua sponte found that it lacked appellate jurisdiction. As the
appeals court explained the proper standard to determine whether claims are separate
under Rule 54(b) is whether the claims “are so closely related that they would fall afoul
of the rule against splitting claims if brought separately.” The claims in this case failed

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this test. They arose out of the same event and were “intertwined” with claims still
pending in the district court.

ii. Decisions Involving “Collateral Orders”

We include a number of decisions considering whether discovery and other

procedural orders meet the collateral order requirement for an immediate, interlocutory
appeal.

Doe v. College of N.J. (TCNJ), 997 F.3d 489 (3d Cir. 2021): The Third Circuit
held, as a matter of first impression, that an order denying a motion to proceed
anonymously is immediately appealable under the collateral order doctrine (and, on the
merits, held that the district court did not abuse its discretion in denying the motion). The
case involved an employment discrimination claim brought by a female former professor
against a public college. Applying the Cohen test (Casebook, p. 1167), the appeals court
explained that (1) an order denying a motion to proceed anonymously “does conclusively
decide whether the litigant has to disclose” their identity,” (2) an order denying a motion
to proceed anonymously “resolves an important issue separate from the underlying merits
of the dispute,” and (3) denying the motion “is effectively unreviewable on appeal of a
final judgment.”

In re Chiquita Brands Int’l, Inc., 965 F.3d 1238 (11th Cir. 2020): The
Eleventh Circuit, as a matter of first impression, held that the district court’s order
modifying a protective order to revoke privacy protections was appealable under the
collateral order doctrine (and, on the merits, held that the district court did not abuse its
discretion, in modifying the protective order). The case involved claims by the estates,
survivors, and heirs of United States citizens who were kidnapped, held hostage, and
murdered by terrorists in Colombia. Plaintiffs, fearing paramilitary retaliation, filed their
suit under pseudonyms and obtained a protective order barring disclosure of private facts
that would reveal their identities. Throughout this period, defendants knew the identity
of plaintiffs and received private fact discovery. Nevertheless, after a number of years,
the defendants argued that the protective order was “difficult and unnecessary,” and
moved to revoke the protection. The district court granted the motion, and the Eleventh
Circuit affirmed, finding no abuse of discretion. As an initial matter, the appeals court
emphasized that the original protective order had been stipulated by the parties. To
continue the protection, plaintiffs had the burden to establish good cause as required
under Rule 26(c). The district court had not in fact conducted a Rule 26(c) analysis, but
the appeals court found that the analysis nevertheless “satisfied” the rule’s most critical
factor, “balancing the potential harm” to plaintiffs, given their expressed fear of
retaliation by paramilitary forces, and defendant’s interests in “administrative feasibility.”
In particular, the district court found that plaintiffs presented only “a vague fear” and did
not show a nexus between their role as litigants and risk of physical injury.” The appeals
court further emphasized that the district court’s order “was drawn with precision,
effectively reviewed less onerous alternatives, and precisely delimited the duration of the
order.”

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 United States v. Academy Mortgage Corp., 968 F.3d 996 (9th Cir. 2020): The
Ninth Circuit held, as a matter of first impression, that an order denying the government’s
motion to dismiss under the False Claims Act was not sufficiently important to justify an
immediate appeal under the collateral order doctrine—at least when the government had
not exercised its right to intervene in the relator’s qui tam action. Among other things,
the government’s interest in avoiding discovery expense did not warrant expansion of the
doctrine.

b. Avoidance or Evasion of the Basic Concept—Mandamus

In In re Clinton, 973 F.3d 106 (D.C. Cir. 2020), the D.C. Circuit applied the
three-part test from Cheney (Casebook, p. 1179, Note 3) in deciding whether to issue a
writ of mandamus to stop a deposition of former Secretary of State Hillary Rodham
Clinton and her former chief of staff, Cheryl Mills, in a FOIA action brought by Judicial
Watch against the State Department. The D.C. Circuit held that Clinton, a party to the
FOIA suit, met the standard for mandamus relief, but Mills, a nonparty, did not.
Although disobeying a discovery order was a viable form of relief for Mills, it was not
for Clinton, who had intervened in the action and “simply cannot know ex ante whether
refusal to comply will result in a non-appealable civil contempt order or an appealable
criminal contempt order.”

d. An Historical Footnote to the Basic Concept—Injunctions

The distinction between the denial of a preliminary injunction and a stay order
was at the core of Defense Distributed v. Attorney General of New Jersey, 972 F.3d
193 (3d Cir. 2020). The suit was brought by firearm-interest organizations against the
Attorney General of New Jersey challenging a proposal to prevent unregistered and
unlicensed persons from publishing computer files and programs to make 3D-print
firearms. An identical action was filed in Texas, and the New Jersey district court
entered a stay pending resolution of the Texas action. The district court also dismissed
plaintiffs’ motion for a preliminary injunction. The order read:

IT APPEARING that on March 7, 2019, the Court ordered that all

proceedings in this action are stayed until the related action in the Western
District of Texas ... is resolved and no other motions for relief and/or
appeals are viable ..., ORDERED that Plaintiffs’ Amended Motion for
Preliminary Injunction ... is DISMISSED without prejudice. Plaintiffs
may refile this Motion once the stay has been lifted in this action.

Plaintiffs appealed under 28 U.S.C. § 1292(a)(2). The Third Circuit held that it lacked
appellate jurisdiction because “the orders here do not have the ‘practical effect of
refusing an injunction,” but instead non-appealable stay orders because the district court
merely “postpone[d] . . . resolution of an action seeking injunctive relief.”

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 A. The Notice and Time to Appeal

Alemarah v. General Motors, LLC, 980 F.3d 1083 (6th Cir. 2020), was a civil
rights suit against General Motors. The district court granted summary judgment in favor
of the defendant based on res judicata and taxed costs against the employee. On appeal,
the question was whether appellate jurisdiction existed to hear the challenge to the order
taxing costs; the notice of appeal did not designate that order as part of the appeal. The
Sixth Circuit held that it had jurisdiction. The order was filed on April 6, 2020. On May
1, plaintiff filed a “Civil Appeal Statement” that said the order was a part of the appeal.
That document, the appeals court explained, was the “functional equivalent” of what
Federal Appellate Rule 4(a)(1)(A) requires, citing Smith v. Barry (Casebook, p. 1184,
Note 1), and provided “the notice required by” Appellate Rule 3. By contrast, in United
States v. Bonk, 967 F.3d 643 (7th Cir. 2020), the Seventh Circuit held that a criminal
defendant was required to have filed a separate notice of appeal of the district court’s
order denying a post-judgment request to access sealed documents. The appeals court
refused to infer an intent to appeal from that order because it was issued after the order
mentioned in the original notice of appeal and also was not directly related to the
substance of his claims.

For an application of the principles set out in Torres (Casebook, p. 1184, Note 2),
consider Newcomb v. Wyndham Vacation Ownership, Inc., ___ F.3d ___, 2021 WL
2324114 (8th Cir. 2021). The Eighth Circuit’s dismissal of the appeal made waves on
Legal Twitter. See Raffi Melkonian (@RMFifthCircuit), TWITTER (June 9, 2021, 02:37
PM), https://twitter.com/RMFifthCircuit/status/1402696466200776704. The Notices of
Appeal referenced an order on an incorrect date, a district court that does not exist (the
United States District Court for the Southern District of Missouri), and a court of appeals
that does not exist (the United States Court of Appeals for the Southern District of
Missouri). The Eighth Circuit found that these deficiencies were not “imperfect but
substantial compliance with . . . technical requirement[s]” that the court could excuse—
rather, they were “absolute bar[s] to appeal.”

For a relatively straightforward application of Firstier’s reading of Federal

Appellate Rule 4(a)(2) (Casebook, p. 1184, Note 3), consider Floyd v. American Honda
Motor Co., Inc., 966 F.3d 1027 (9th Cir. 2020), discussed earlier in this Memo. After
the district court granted defendant’s motion to dismiss, plaintiffs appealed; two weeks
later (and six weeks after issuance of the order to dismiss), the district court filed its final
order. Under these circumstances, the Ninth Circuit held that the “subsequent final
disposition of the case by a final order cured any prematurity of Plaintiffs’ appeal.”

The effect of a post-judgment motion on the time to appeal (Casebook p. 1185,

Note 4), was at the core of Nutrition Distribution LLC v. IronMag Labs, LLC, 978
F.3d 1068 (9th Cir. 2020). Plaintiff sued a competitor under the Lanham Act for false
advertising. The district court granted defendant’s motion to dismiss, the Court of
Appeals reversed and remanded, and the district court partially granted the parties’
motions for summary judgment. The prevailing party in a Lanham Act suit may seek
attorney’s fees, and the plaintiff then filed a post-judgment motion for fees. The district

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court denied that motion, and the plaintiff appealed, not only the denial of fees, but also
the underlying judgment. However, by that point, 78 days had run since entry of the
underlying judgment, and plaintiff had not moved under Federal Rule 58(e) to extend the
time to appeal. The appeals court rejected his effort to recast the fee motion as a Rule 59
motion to alter or amend the judgment. The decision is exceptionally clear and provides
a good opportunity for the students to review a lawyer’s options once a judgment is
entered and fees are sought. As the appeal court aptly stated, “Perhaps due to a healthy
lawyerly paranoia for missing deadlines,” lawyers typically will appeal the judgment,
later appeal the fee award, and then petition for consolidation in the court of appeals;
alternatively, the party may move under Federal Rule 58 to enlarge the time to appeal the
underlying judgment until the fee judgment is entered.

The effect of a post-judgment motion for fees on the timing of an appeal was at
issue in Frew v. Young, 992 F.3d 391 (5th Cir. 2021). The lawsuit—called by the
appeals court “an epic that has spanned nearly three decades”—involved a challenge by
children eligible for Medicaid Early and Periodic Screening, Diagnosis, and Training to
the adequacy of medical and dental care provided by the state of Texas. After entry of a
consent decree and corrective action orders, plaintiffs moved for interim attorney fees as
prevailing parties under 42 U.S.C. § 1988, and the district court denied the motion. The
procedural history is complicated, but for purposes of this appeal this chronology is
salient: The district court entered an order denying fees on April 7, 2020. On May 7,
2020, the plaintiffs filed a motion to stay the running of the time to file a notice of appeal
and a motion to reconsider. That same day, the district court granted both motions. On
July 23, the court denied plaintiffs’ motion for reconsideration. Plaintiffs filed a notice of
appeal on August 13. The appeals court held it lacked appellate jurisdiction to review the
order because the notice of appeal was filed outside the 30-day window.

Students can be asked: Why didn’t the motion for reconsideration, falling within
the deadline to appeal, toll the appellate deadline to review the fee-denial order?

• If treated as a Rule 54 motion for attorney fees, the district court can
extend the time to appeal under Rule 58. But the Rule 54(d)(2) motion
must be filed no later than 14 days after entry of judgment.
• If treated as a Rule 59 motion to alter or amend the judgment, then the
time period is tolled. But the Rule 59 motion must be filed no later than
28 days after entry of judgment.
• If treated as a Rule 60 motion for relief, then the time period is tolled. But
a Rule 60 motion must be filed no later than 28 days after judgment is
entered.

The motion to reconsider, filed 30 days after the district court entered judgment, was not
filed within the time allowed under any of the rules that might have invoked Rule 4’s
tolling provision.

Students then can be asked why the appeals court nevertheless held that it had
power to review the denial of the motion to reconsider? The Fifth Circuit took the

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position that a district court has authority to treat an out-of-time Rule 59(e) motion to
alter or amend the judgment as a Rule 60(b) motion if the grounds supporting the former
would also support the latter. The district court erred in declining to do so, mistakenly
believing that as an interlocutory order, the order denying fees could be appealed only as
a collateral order. The Fifth Circuit treated the error as harmless, held that it had
jurisdiction to review the denial of the motion to reconsider, and affirmed the denial of
fees. In a footnote, the appeals court asked whether the deadlines are better described as
claim-processing rules and not jurisdictional requirements, an issue surely deserving of
discussion but not in most 1L courses that are pressed for time.

In Ruiz v. Wing, 991 F.3d 1130 (11th Cir. 2021), the Eleventh Circuit held that
a pro se litigant’s motion for a new trial tolled the 30-day deadline for filing a notice of
appeal under Fed. R. App. P. 4(a)(4)(A). Ruiz brought a § 1983 claim against officers
who, he alleged, used excessive force in arresting him for a robbery to which he pleaded
guilty. Ruiz was represented by pro bono counsel throughout the trial. After the jury
returned a verdict against Ruiz, he moved pro se for a new trial under Fed. R. Civ. P. 59.
The district court struck the motion as an unauthorized pro se filing by a represented
party, Ruiz moved for reconsideration (this time through counsel), the court denied the
motion, and Ruiz appealed. On appeal, the officers contended that the court of appeals
did not have jurisdiction to hear Ruiz’s appeal because the pro se filing was a nullity that
did not toll the 30-day deadline to file a notice of appeal. The court disagreed. Judge
Lagoa undertook a textual analysis of Rule 4(a)(4)(A) to determine that “[b]y entering an
order denying Ruiz’s pro se motion for a new trial pursuant to Rule 59, the district court
denied the relief sought and decided the motion on procedural grounds. The district
court’s order striking the motion thus constitutes ‘disposing of’ the motion as
contemplated by the plain meaning of Rule 4(a)(4)(A), and the Officers concede that
Ruiz filed his notice of appeal within thirty days of that order.” The court proceeded,
however, to affirm the district court on the merits.

Strange ex rel. Strange v. Islamic Republic of Iran, Interest Section, 964 F.3d
1190 (D.C. Cir. 2020), involved the timing requirements of discretionary appeals under §
1292(b). As a matter of first impression, the D.C. Circuit held that a district court may
not recertify an issue to extend the ten-day deadline to petition for interlocutory appeal
under 28 U.S.C. § 1292(b). This case stems from a suit by the families of two soldiers
killed in Afghanistan. The parents were not able to serve the former President of
Afghanistan Hamid Karzai through conventional means and sought leave to serve him via
Twitter. The district court denied leave, citing Mullane (Casebook, p. 211), on the view
that service through social media was not “reasonably calculated, under all
circumstances, to apprise” defendant of the action. However, at the parents’ request, the
district court amended its order to certify the question for appeal under § 1292(b). The
parents then missed the ten-day deadline to petition the court of appeals for permission to
appeal. The district court recertified its original order, and the parents filed their petition.
The D.C. Circuit reaffirmed that “timely filing . . . is a jurisdictional requirement.” (citing
Bowles, Casebook, p. 1185, Note 5).

C. The Ambit of Appellate Review

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 1. Issues Subject to Review

For an application of Electrical Fittings (Casebook, p. 1187), consider United

States v. Carter, 995 F.3d 1222 (10th Cir. 2021), in which the Tenth Circuit held that
statements and contempt findings against United States Attorneys in a criminal trial are
not “part of or necessary to” a challenged judgment. After the United States Attorney
obtained privileged attorney-client recordings in a 100+ defendant trial, the district court
assigned a Special Master to investigate possible Sixth Amendment violations. The
government challenged this investigation, arguing that the outcome of the investigation—
and the district court’s associated order—might affect the outcome of future, pending
litigation. The Tenth Circuit distinguished Electrical Fittings and dismissed the appeal,
noting that Electrical Fittings “observed that a prevailing party cannot appeal to obtain
review of ‘findings he deems erroneous which are not necessary’ for the judgment.”

We previously discussed BP in the section of this Memo on removal. For those of

you who teach appeals by immersion, consider discussing the Supreme Court’s reliance
in that decision on Yamaha Motor Corp. (Casebook, p. 1181), which addressed whether
review under § 1292(b) is limited to the question identified by the district court in its
certified order.

2. Review of Fact Finding

We include a summary of Google LLC v. Oracle America, Inc., 593 U.S. ___,
141 S.Ct. 1183, 209 L.Ed.2d 311 (2021), in the Rules Supplement (Part X) on the
standard of review of mixed questions of law and fact.

For a relatively compact fact pattern applying Pullman-Standard v. Swint

(Casebook, p. 1193), consider Schmidt v. FCI Enterprises, LLC, ___ F.3d ___, 2021
WL 2583393 (4th Cir. 2021). FCI Enterprises, a government contractor, shut down
suddenly in 2018 and laid off its employees without warning. The district court held that
the employer had violated the WARN Act, a federal statute that requires employers to
give advance notice to workers before a mass layoff. On appeal, the Fourth Circuit
reviewed documentary evidence to determine that, at the time of the shutdown, fewer
than 100 employees were on payroll on the operative date, and so defendant was not an
employer under the act. Quoting Pullman-Standard, the appeals court explained that “in
the rare case in which the district court’s factual ‘findings are infirm because of an
erroneous view of the law’ and ‘the record permits only one resolution of the factual
issue,’ we may resolve the question ourselves.”

For an application of Bose Corp. (Casebook, p. 1197), consider Center for

Investigative Reporting v. Southeastern Pennsylvania Transportation Authority,
975 F.3d 300 (3d Cir. 2020), petition for certiorari docketed (U.S. April. 1, 2021). A
non-profit organization sought a permanent injunction to require the defendant-
transportation authority to run an advertisement on public buses concerning racial
disparities in mortgage lending practices. The district court denied relief, and the Third

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Circuit reversed and instructed the lower court to grant declaratory relief and to issue an
injunction. In undertaking its review, the appeals court recited the Bose standard for
cases that implicate the First Amendment, but stated that it would give deference to fact
finding concerning witness credibility.

Chapter 17. The Binding Effect of Prior Decisions: Res Judicata and Collateral
Estoppel

B. Claim and Defense Preclusion

Lucky Brand (Rules Supplement, Part X) confirmed that that the federal common
law of preclusion, applicable when the prior decision was rendered by a federal court, has
three conditions: (1) identity of parties; (2) identity of claims; (3) prior final judgment on
the merits. For an exercise in how to determine identity of claim, consider Daza v. State,
2021 WL 2562308 (7th Cir. 2021). Daza was fired by defendant in 2015 and sued,
alleging discrimination and retaliation, in 2017. The district court granted summary
judgment for defendant and dismissed the action. In 2018, Daza filed a second action,
again alleging discrimination and retaliation, and adding the claim that the employer’s
failure to rehire him after a vacancy opened up at the office was an independent act of
discrimination, because he was passed over in favor of a young and inexperienced white
man, and was evidence of a “cover up.” The district court dismissed the new case as
claim precluded, and the Seventh Circuit affirmed.

To determine whether claims are identical, the appeals court applied the federal
common law test that looks to whether the two claims “arise from the same transaction”
or “involve a common nucleus of operative facts.” In making that determination, the
inquiry is not “limited to the words of the complaint”; rather, the goal is “to discern the
basis of the litigation”: “Anything falling within that common nucleus, whether or not
actually raised, falls within the scope of the claim and is thus subject to claim preclusion
in a later case.” In this case, Daza did not raise the failure-to-hire claim in the first suit.
However, he did raise the defendant’s failure to hire him as evidence of discrimination
and retaliation in response to defendant’s motion for summary judgment, and by analogy
to the principles of trial-by-consent, his reliance on these events was sufficient to show
that the claim was a part of the original litigation. Moreover, the appeals court rejected
the argument that an earlier lawsuit cannot preclude litigation of claims arising from later
events. The failure-to-hire claim depended on events that occurred at the time of the
original complaint; the fact that he was waiting for an EEOC right-to-sue letter did not
change the result, because failure to exhaust administrative remedies is not an excuse for
claim splitting.

C. Issue Preclusion

Aetna Life Insurance Company v. Rosen, 2020 WL 3972025 (S.D.N.Y. 2020),

provides an excellent classroom problem on the question of identity-of-issue; the case
also implicates intersystem preclusion and interpleader. An insurance company filed an

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interpleader action to determine whether the decedent’s mother or long-time partner was
entitled to the proceeds of the life insurance policy. Mother disputed the mental capacity
of the decedent at the time he switched the beneficiary of the policy to his partner.
Partner moved to dismiss alleging that the question of capacity had been decided by the
state probate court. Boiled down, the estate had been admitted to probate, and by
admitting the estate to probate, partner argued, the probate court determined that the
decedent was of sound mind. The federal court, sitting in diversity, looked to New York
law to determine when issue preclusion applies. The rule is the conventional one: For
issue preclusion to apply, the “identical issue necessarily must have been decided in the
prior action.” [Emphasis in original.] Under this standard, the probate court did not
resolve the identical issue. The issue in the probate court was decedent’s competence on
the day he executed his will; the issue in the interpleader action was decedent’s
competence on the day he changed the beneficiary of his life insurance. As a result, the
motion to dismiss was denied.

E. Intersystem Preclusion

For a challenging fact pattern involving Erie, takings doctrine, and intersystem
preclusion, consider Harrison v. Montgomery County, Ohio, 997 F.3d 643 (6th Cir.
2021). In 2008, Ohio changed its law on foreclosure of tax-delinquent property. Rather
than having the municipality sell the property at auction and collect the taxes owed, the
municipality could instead surrender the tax claim and transfer the land, with free title, to
land banks, which were then permitted to sell the property to a new owner. The original
owner no longer owed the back taxes; however, it also did not receive the surplus equity
that would have been paid from the auction. In the case of plaintiff, Harrison owed
$20,000 in back taxes; at the time of transfer, the fair market value was $22,600.
Harrison did not receive the surplus and sued, challenging the land transfer without
payment of that surplus as a taking. The district court granted a motion to dismiss on
claim preclusion grounds, on the view that plaintiff could have raised the taking claim in
the state court.

The district court applied Ohio preclusion law which requires: “(1) a prior
decision and (2) a second action between the same parties (3) that involves claims that
were or could have been litigated, and (4) that arise out of the same ‘transaction or
occurrence’ as the first lawsuit.” As to the third requirement, Ohio law recognizes that it
is not fair to preclude a second lawsuit if the litigant faced “impediments” to raising the
claim in the first suit or “the opportunity to raise the federal claim had not yet arisen in
the prior state court action.” Under Supreme Court precedent at the time of the state
foreclosure action, a federal taking claim could not be filed until the state had foreclosed
on the property and the owner sought compensation through state processes. Thus, under
this standard, plaintiff’s decision “not to seek relief in the state courts would have
doomed her federal claim.” However, in Knick v. Township of Scott, Pennsylvania, 139
S.Ct. 2162, 204 L.Ed.2d 558 (2019), the Supreme Court changed course and held that a
taking claim may be brought in federal court “as soon as their property has been taken,”
without exhausting state processes. Thus, the Sixth Circuit concluded, “Knick permits
this action, and Ohio claim preclusion law does not bar it.”

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Chapter 18. Alternative Dispute Resolution

B. Forms of Alternative Dispute Process

2. Mediation

In Physician and Tactical Healthcare Services, LLC v. Inova Health Care

Services, 2021 WL 1997384 (D.N.J. 2021), the district court held that a Dispute
Escalation Clause in a Health Services Agreement required plaintiff, who was a party to
the agreement, to mediate claims before initiating litigation in federal court. The clause
read:

16. DISPUTE ESCALATION. In the event of any dispute, claim,

question, or disagreement arising from or relating to this Agreement or the
breach thereof, the parties hereto shall use their best efforts to settle the
dispute, claim, question, or disagreement. To this affect they shall consult
and negotiate with each other in good faith and, recognizing their mutual
interests, attempt to reach a just and equitable solution satisfactory to both
parties. If they do not reach such solution within a period of 60 days, then,
upon notice by either party to the other, all disputes, claims, questions, or
disagreements shall be subject to mediation conducted in accordance with
the Local Rule of Procedure adopted by the U.S. District Court of Virginia
for the Early Neutral Evaluation Mediation Program. If the dispute, claim,
question, or disagreement is not resolved pursuant to such mediation
procedures, each party will be entitled to seek whatever legal or equitable
remedies that may be available to such party under this Agreement.

The agreement specified that Virginia law would govern interpretation of the contract,
and state and federal courts have interpreted Virginia law as “consistent in enforcing
contractual provisions requiring that parties mediate their claims before filing lawsuits.”
The court dismissed the complaint without prejudice, but read the agreement as requiring
no specific forum.

The American Bar Association and some state ethical rules have endorsed the
practice of “limited-scope representation.” However, many local rules for the federal
districts continue to have as the default rule the traditional practice that once an attorney
appears in an action on behalf of a client, the attorney has a duty to represent the client
until relieved by court order. The Southern District of New York’s local rules continue to
adhere to the traditional practice (Rule Supplement, Part VII). In Villar v. City of New
York, ___ F. Supp. 3d ___, 2021 WL 2024434 (S.D.N.Y. 2021), the district court
interpreted the scope of a notice of appearance that was entitled “Notice of Limited Scope
Appearance of Pro Bono Counsel,” stating counsel was appearing “for the limited
purpose of providing advice and representation in settlement negotiations, a settlement
conference and/or a mediation through the Southern District’s Alternative Dispute
Resolution Program.” The court found that the notice left “room for interpretation” about

87
its scope and urged “greater specificity and clarity.” The court issued a Memorandum
Order construing the notice of appearance limiting it to settlement conferences and/or
mediations that a specified Magistrate Judge might schedule until the judge terminates
the reference, trial commences, or the case is terminated.

1. Arbitration

We briefly mention a number of federal appellate decisions interpreting issues of

first impression in several of the circuits under the Federal Arbitration Act:

Beckley Oncology Associates, Inc. v. Abumasmah, 993 F.3d 261 (4th Cir.
2021), holding that a waiver in an arbitration agreement of appellate review of a district
court’s decision confirming or vacating an arbitration award is valid and enforceable.
The employment agreement provided that the parties would arbitrate all disputes
connected with employment, and that the arbitrator’s decision would “be final and
conclusive and enforceable in any court of competent jurisdiction without any right of
judicial review or appeal.” In line with the Tenth Circuit, the Fourth Circuit held that a
provision prohibiting appellate, but not district court, review is “a compromise whereby
the litigants trade the risk of protracted appellate review for a one-shot opportunity before
the district court.”

Maine Community Health Options v. Albertsons Companies, Inc., 993 F.3d

720 (9th Cir. 2020), holding that in an action seeking enforcement under the Federal
Arbitration Act of a third-party subpoena issued by arbitrators, for the purpose of
determining whether diversity jurisdiction exists, the amount in controversy can be
measured by either the benefit to the plaintiff or by the detriment to the defendant that
would result from enforcement of the subpoena.

Langere v. Verizon Wireless Services, LLC, 983 F.3d 1115 (9th Cir. 2020),
holding that voluntary dismissal of an action with prejudice following a court order
compelling arbitration does not create appellate jurisdiction.

Stover v. Experian Holdings, Inc., 978 F.3d 1082 (9th Cir. 2020), holding that
a single visit to a website after subscribing to a company’s service and agreeing to a
contract that mandated arbitration was not sufficient to bind the consumer to changes in
the terms of the agreement as they affected arbitration. For changes in terms to be
binding pursuant to a change-of-terms provision in the original contract, both parties to
the contract—not just the drafting party—must have notice of the change in contract
terms. (The changed provision barred judicial resolution of claims for public injunctive
relief.)

Robertson v. Intratek Computer, Inc., 976 F.3d 575 (5th Cir. 2020), petition
for cert. docketed (U.S. March 8, 2021), holding that the federal whistleblower statute,
41 U.S.C. § 4712, did not displace the Federal Arbitration Act

88
 Servotronics, Inc. v. Rolls-Royce PLC, 975 F.3d 689 (7th Cir. 2020), cert.
granted (U.S. March 22, 2021), holding that a private, foreign arbitration is not “a
proceeding in a foreign or international tribunal” within the meaning of 28 U.S.C. §
1782(a), and so the district court is not authorized to provide discovery assistance.

Shivkov v. Artex Risk Solutions, Inc., 974 F.3d 1051 (9th Cir. 2020), holding
that the question whether class arbitration was available was for the court, and not the
arbitrator, to decide. Further, following five other circuits, the Ninth Circuit held that a
presumption in favor of the post-expiration effect of an agreement to arbitrate applies
unless expressly negated. Quoting the Sixth Circuit, the court wrote, “the need for an
arbitration provision to have post-expiration effect is intuitive, because if ‘the duty to
arbitrate automatically terminated upon expiration of the contract, a party could avoid his
contractual duty to arbitrate by simply waiting until the day after the contract expired to
bring an action regarding a dispute that arose while the contract was in effect.’” The
court found that a survival clause, which in this case did not include arbitration, was not
sufficient to expressly negate the presumption.

MZM Construction Co. v. New Jersey Building Laborers Statewide Benefit

Funds, 974 F.3d 386 (3d Cir. 2020), holding that the court has primary power to decide
whether an agreement to arbitrate exists, unless the parties have clearly and unmistakably
referred those issues to arbitration in a written contract if the formation of that contract is
not in issue.

Jin v. Parsons Corp., 966 F.3d 821 (D.C. Cir. 2020), holding that when the
district court finds that a genuine dispute of material fact exists about whether the parties
have agreed to arbitrate, the proper procedure is to hold the motion to compel arbitration
in abeyance—and not to dismiss—pending a trial on the issue of arbitrability. In a
similar vein, the Ninth Circuit held in Hansen v. LMB Mortgage Services, Inc., 2021
WL 2386391 (9th Cir. 2021), that the district court’s denial of a motion to compel
arbitration was immediately appealable even if the district court “intended to reconsider
the question of arbitrability following further fact-finding and possibly a trial.”

Teamsters Local 177 v. United Parcel Service, 966 F.3d 245 (3d Cir. 2020),
holding that a party who seeks to confirm an arbitration award has Article III standing to
seek such confirmation, on the view, already endorsed by the Second Circuit, that “the
confirmation of an arbitration award is a summary proceeding that merely makes what is
already a final arbitration award a judgment of the court.”

Williams v. Medley Opportunity Fund II, LP, 965 F.3d 229 (3d Cir. 2020),
holding that arbitration agreements that limit a party’s substantive claims to those under
tribal law, and so bar federal claims from being brought, are unenforceable.

89
Appendix A: Errata

Comprehensive Twelfth Edition

Page Error Revision

140 Justice Kennedy Justice Kennedy announced the judgment of the
delivered the opinion of Court and delivered an opinion, in which The
the Court … Chief Justice, Justice Scalia, and Justice
Thomas join.
141, 7th In addition to these facts In addition to these facts emphasized by
paragraph emphasized by petitioner, respondent,
158, 7th line to the forum when to the claim when defendant otherwise had
from top defendant otherwise had extensive contacts with the state
extensive contacts with
the state.
168, note 4, five-favor reasonableness five-factor reasonableness test
line 5 test
171, 5th line The Fifth Circuit The Fourth Circuit explained:
explained:
171 Bors v. Johnson & Bors v. Johnson & Johnson … (… manifests
Johnson … (…manifests consent to general jurisdiction,; court did not
consent to jurisdiction) address whether “non-consensual jurisdiction”
could be based on “principles of general or
specific jurisdiction”)
175, Note 2, although had the ability although it had the ability
7th line
404, 2d line in North Norton
indented
paragraph
584, first The District Court The District Court denied the motions to
bracketed dismissed the complaint. dismiss and the Second Circuit Court of
paragraph Appeals affirmed in large part.
890, Note 3, (5th Cir. 1997) (5th Cir. 2007)
1st line

90
Compact Twelfth Edition

95 Justice Kennedy Justice Kennedy announced the judgment of the

delivered he opinion of Court and delivered an opinion, in which The
the Court … Chief Justice, Justice Scalia, and Justice Thomas
join.

96, last In addition to these In addition to these facts emphasized by

paragraph facts emphasized by respondent,
petitioner,
119, Note 4, five-favor five-factor reasonableness test
line 5 reasonableness test
122, first full The Fifth Circuit The Fourth Circuit explained:
paragraph, line explained:
10
122. second Bors v. Johnson & Bors v. Johnson & Johnson … (… manifests
full paragraph, Johnson … consent to general jurisdiction,; court did not
line 7 (…manifests consent to address whether “non-consensual jurisdiction”
jurisdiction) could be based on “principles of general or
specific jurisdiction”)

127, line 1 although had the although it had the ability

ability
167, 8th line ad-dress address
from bottom
194, 2d line the money the paid the money they paid
from top
538, last full An in important An important
paragraph, last
sentence
601, Note 3, (5th Cir. 1997) (5th Cir. 2007)
1st line

91
 HANDOUT: Statutory Supplement for Chapter 1-A Survey of the Civil Action
B. An Outline of the Procedure in a Civil Action (Casebook, p. 6)
1. Selecting a Proper Court (Casebook, p. 8)
28 U.S.C. § 41. Number and composition of circuits

The thirteen judicial circuits of the United States are constituted as follows:

Circuits Composition
District of Columbia District of Columbia.
First Maine, Massachusetts, New
Hampshire, Puerto Rico, Rhode
Island.
Second Connecticut, New York, Vermont.
Third Delaware, New Jersey,
Pennsylvania, Virgin Islands.
Fourth Maryland, North Carolina, South
Carolina, Virginia, West
Virginia.
Fifth District of the Canal Zone,
Louisiana, Mississippi, Texas.
Sixth Kentucky, Michigan, Ohio,
Tennessee.
Seventh Illinois, Indiana, Wisconsin.
Eighth Arkansas, Iowa, Minnesota,
Missouri, Nebraska, North
Dakota, South Dakota.
Ninth Alaska, Arizona, California, Idaho,
Montana, Nevada, Oregon,
Washington, Guam, Hawaii.
Tenth Colorado, Kansas, New Mexico,
Oklahoma, Utah, Wyoming.
Eleventh Alabama, Florida, Georgia.
Federal All Federal judicial districts.

28 U.S.C. § 133. Appointment and number of district judges

(a) The President shall appoint, by and with the advice and consent of the
Senate, district judges for the several judicial districts, as follows:

92
 Districts Judges
Alabama:
Northern 7
Middle 3
Southern 3
Alaska 3
Arizona 12
Arkansas:
Eastern 5
Western 3
California:
Northern 14
Eastern 6
Central 27
Southern 13
Colorado 7
Connecticut 8
Delaware 4
District of Columbia 15
Florida:
Northern 4
Middle 15
Southern 17
Georgia:
Northern 11
Middle 4
Southern 3
Hawaii 3
Idaho 2
Illinois:
Northern 22
Central 4
Southern 4
Indiana:
Northern 5
Southern 5
Iowa:
Northern 2
Southern 3
Kansas 5
Kentucky:
Eastern 5
Western 4
Eastern and Western 1
Louisiana:
Eastern 12

93
 Middle 3
Western 7
Maine 3
Maryland 10
Massachusetts 13
Michigan:
Eastern 15
Western 4
Minnesota 7
Mississippi:
Northern 3
Southern 6
Missouri:
Eastern 6
Western 5
Eastern and Western 2
Montana 3
Nebraska 3
Nevada 7
New Hampshire 3
New Jersey 17
New Mexico 6
New York:
Northern 5
Southern 28
Eastern 15
Western 4
North Carolina:
Eastern 4
Middle 4
Western 4
North Dakota 2
Ohio:
Northern 11
Southern 8
Oklahoma:
Northern 3
Eastern 1
Western 6
Northern, Eastern, and Western 1
Oregon 6
Pennsylvania:
Eastern 22
Middle 6
Western 10
Puerto Rico 7

94
Rhode Island 3
South Carolina 10
South Dakota 3
Tennessee:
Eastern 5
Middle 4
Western 5
Texas:
Northern 12
Southern 19
Eastern 7
Western 13
Utah 5
Vermont 2
Virginia:
Eastern 11
Western 4
Washington:
Eastern 4
Western 7
West Virginia:
Northern 3
Southern 5
Wisconsin:
Eastern 5
Western 2
Wyoming 3.
(b)(1) In any case in which a judge of the United States (other than a senior
judge) assumes the duties of a full-time office of Federal judicial
administration, the President shall appoint, by and with the advice and consent
of the Senate, an additional judge for the court on which such judge serves. If
the judge who assumes the duties of such full-time office leaves that office and
resumes the duties as an active judge of the court, then the President shall not
appoint a judge to fill the first vacancy which occurs thereafter in that court.
(2) For purposes of paragraph (1), the term “office of Federal judicial
administration” means a position as Director of the Federal Judicial Center,
Director of the Administrative Office of the United States Courts, or Counselor
to the Chief Justice.

95
HANDOUT: JUDICIAL MAP OF THE UNITED STATES

Source: United States Courts, Court Website Links, https://www.uscourts.gov/about-

federal-courts/federal-courts-public/court-website-links

96
HANDOUT

FORD MOTOR CO. V. MONTANA EIGHTH JUDICIAL DISTRICT COURT

FORD MOTOR CO. V. BANDEMER

Supreme Court of the United States, 2021.

592 U.S. ___, 141 S.Ct. 1017, 209 L.Ed.2d 225.

JUSTICE KAGAN delivered the opinion of the Court, in which THE CHIEF
JUSTICE, JUSTICE BREYER, JUSTICE SOTOMAYOR, and JUSTICE KAVANAUGH joined.

In each of these two cases, a state court held that it had jurisdiction over Ford
Motor Company in a products-liability suit stemming from a car accident. The
accident happened in the State where suit was brought. The victim was one of the
State’s residents. And Ford did substantial business in the State—among other
things, advertising, selling, and servicing the model of vehicle the suit claims is
defective. Still, Ford contends that jurisdiction is improper because the particular car
involved in the crash was not first sold in the forum State, nor was it designed or
manufactured there. We reject that argument. When a company like Ford serves a
market for a product in a State and that product causes injury in the State to one of
its residents, the State’s courts may entertain the resulting suit.

Ford is a global auto company. It is incorporated in Delaware and

headquartered in Michigan. But its business is everywhere. Ford markets, sells, and
services its products across the United States and overseas. In this country alone, the
company annually distributes over 2.5 million new cars, trucks, and SUVs to over
3,200 licensed dealerships. See App. 70, 100. Ford also encourages a resale market
for its products: Almost all its dealerships buy and sell used Fords, as well as selling
new ones. To enhance its brand and increase its sales, Ford engages in wide-ranging
promotional activities, including television, print, online, and direct-mail
advertisements. No matter where you live, you’ve seen them: “Have you driven a Ford
lately?” or “Built Ford Tough.” Ford also ensures that consumers can keep their
vehicles running long past the date of sale. The company provides original parts to
auto supply stores and repair shops across the country. (Goes another slogan: “Keep
your Ford a Ford.”) And Ford’s own network of dealers offers an array of maintenance
and repair services, thus fostering an ongoing relationship between Ford and its
customers.

Accidents involving two of Ford’s vehicles—a 1996 Explorer and a 1994 Crown
Victoria—are at the heart of the suits before us. One case comes from Montana.
Markkaya Gullett was driving her Explorer near her home in the State when the tread
separated from a rear tire. The vehicle spun out, rolled into a ditch, and came to rest

97
upside down. Gullett died at the scene of the crash. The representative of her estate
sued Ford in Montana state court, bringing claims for a design defect, failure to warn,
and negligence. The second case comes from Minnesota. Adam Bandemer was a
passenger in his friend’s Crown Victoria, traveling on a rural road in the State to a
favorite ice-fishing spot. When his friend rear-ended a snowplow, this car too landed
in a ditch. Bandemer’s air bag failed to deploy, and he suffered serious brain damage.
He sued Ford in Minnesota state court, asserting products-liability, negligence, and
breach-of-warranty claims. * * *

II

The Fourteenth Amendment’s Due Process Clause limits a state court’s power
to exercise jurisdiction over a defendant. The canonical decision in this area remains
International Shoe Co. v. Washington * * *. There, the Court held that a tribunal’s
authority depends on the defendant’s having such “contacts” with the forum State that
“the maintenance of the suit” is “reasonable, in the context of our federal system of
government,” and “does not offend traditional notions of fair play and substantial
justice.” * * * In giving content to that formulation, the Court has long focused on the
nature and extent of “the defendant’s relationship to the forum State.” * * * That
focus led to our recognizing two kinds of personal jurisdiction: general (sometimes
called all-purpose) jurisdiction and specific (sometimes called case-linked)
jurisdiction. * * *

A state court may exercise general jurisdiction only when a defendant is

“essentially at home” in the State. * * * General jurisdiction, as its name implies,
extends to “any and all claims” brought against a defendant. * * *

Specific jurisdiction is different: It covers defendants less intimately connected

with a State, but only as to a narrower class of claims. The contacts needed for this
kind of jurisdiction often go by the name “purposeful availment.” * * * The defendant,
we have said, must take “some act by which [it] purposefully avails itself of the
privilege of conducting activities within the forum State.” * * * The contacts must be
the defendant’s own choice and not “random, isolated, or fortuitous.” * * * They must
show that the defendant deliberately “reached out beyond” its home—by, for example,
“exploi[ting] a market” in the forum State or entering a contractual relationship
centered there. * * * Yet even then—because the defendant is not “at home”—the
forum State may exercise jurisdiction in only certain cases. The plaintiff’s claims, we
have often stated, “must arise out of or relate to the defendant’s contacts” with the
forum. * * * Or put just a bit differently, “there must be ‘an affiliation between the
forum and the underlying controversy, principally, [an] activity or an occurrence that
takes place in the forum State and is therefore subject to the State’s regulation.’” * *
*

These rules derive from and reflect two sets of values—treating defendants
fairly and protecting “interstate federalism.” * * * Our decision in International Shoe
founded specific jurisdiction on an idea of reciprocity between a defendant and a State:

98
When (but only when) a company “exercises the privilege of conducting activities
within a state”—thus “enjoy[ing] the benefits and protection of [its] laws”—the State
may hold the company to account for related misconduct. * * * Later decisions have
added that our doctrine similarly provides defendants with “fair warning”—
knowledge that “a particular activity may subject [it] to the jurisdiction of a foreign
sovereign.” * * * A defendant can thus “structure [its] primary conduct” to lessen or
avoid exposure to a given State’s courts. * * * And this Court has considered alongside
defendants’ interests those of the States in relation to each other. One State’s
“sovereign power to try” a suit, we have recognized, may prevent “sister States” from
exercising their like authority. * * * The law of specific jurisdiction thus seeks to
ensure that States with “little legitimate interest” in a suit do not encroach on States
more affected by the controversy. * * *

Ford contends that our jurisdictional rules prevent Montana’s and Minnesota’s
courts from deciding these two suits. In making that argument, Ford does not contest
that it does substantial business in Montana and Minnesota—that it actively seeks to
serve the market for automobiles and related products in those States. * * * Or to
put that concession in more doctrinal terms, Ford agrees that it has “purposefully
avail[ed] itself of the privilege of conducting activities” in both places. * * * Ford’s
claim is instead that those activities do not sufficiently connect to the suits, even
though the resident-plaintiffs allege that Ford cars malfunctioned in the forum States.
In Ford’s view, the needed link must be causal in nature: Jurisdiction attaches “only
if the defendant’s forum conduct gave rise to the plaintiff’s claims.” * * * And that
rule reduces, Ford thinks, to locating specific jurisdiction in the State where Ford sold
the car in question, or else the States where Ford designed and manufactured the
vehicle. * * * On that view, the place of accident and injury is immaterial. * * *

But Ford’s causation-only approach finds no support in this Court’s

requirement of a “connection” between a plaintiff’s suit and a defendant’s activities. *
* * That rule indeed serves to narrow the class of claims over which a state court may
exercise specific jurisdiction. But not quite so far as Ford wants. None of our
precedents has suggested that only a strict causal relationship between the
defendant’s in-state activity and the litigation will do. As just noted, our most common
formulation of the rule demands that the suit “arise out of or relate to the defendant’s
contacts with the forum.” * * * The first half of that standard asks about causation;
but the back half, after the “or,” contemplates that some relationships will support
jurisdiction without a causal showing. That does not mean anything goes. In the
sphere of specific jurisdiction, the phrase “relate to” incorporates real limits, as it must
to adequately protect defendants foreign to a forum. But again, we have never framed
the specific jurisdiction inquiry as always requiring proof of causation—i.e., proof that
the plaintiff’s claim came about because of the defendant’s in-state conduct. * * * So
the case is not over even if, as Ford argues, a causal test would put jurisdiction in only
the States of first sale, manufacture, and design. A different State’s courts may yet
have jurisdiction, because of another “activity [or] occurrence” involving the defendant
that takes place in the State. * * *

99
 To see why Ford is subject to jurisdiction in these cases * * *, consider first the
business that the company regularly conducts in Montana and Minnesota. * * *
Small wonder that Ford has here conceded “purposeful availment” of the two States’
markets. * * * By every means imaginable—among them, billboards, TV and radio
spots, print ads, and direct mail—Ford urges Montanans and Minnesotans to buy its
vehicles, including (at all relevant times) Explorers and Crown Victorias. Ford cars—
again including those two models—are available for sale, whether new or used,
throughout the States, at 36 dealerships in Montana and 84 in Minnesota. And apart
from sales, Ford works hard to foster ongoing connections to its cars’ owners. The
company’s dealers in Montana and Minnesota (as elsewhere) regularly maintain and
repair Ford cars, including those whose warranties have long since expired. And the
company distributes replacement parts both to its own dealers and to independent
auto shops in the two States. Those activities, too, make Ford money. And by making
it easier to own a Ford, they encourage Montanans and Minnesotans to become
lifelong Ford drivers.

Now turn to how all this Montana- and Minnesota-based conduct relates to the
claims in these cases, brought by state residents in Montana’s and Minnesota’s courts.
Each plaintiff’s suit, of course, arises from a car accident in one of those States. In
each complaint, the resident-plaintiff alleges that a defective Ford vehicle—an
Explorer in one, a Crown Victoria in the other—caused the crash and resulting harm.
And as just described, Ford had advertised, sold, and serviced those two car models in
both States for many years. (Contrast a case, which we do not address, in which Ford
marketed the models in only a different State or region.) In other words, Ford had
systematically served a market in Montana and Minnesota for the very vehicles that
the plaintiffs allege malfunctioned and injured them in those States. So there is a
strong “relationship among the defendant, the forum, and the litigation”—the
“essential foundation” of specific jurisdiction * * *.2

The only complication here, pressed by Ford, is that the company sold the
specific cars involved in these crashes outside the forum States, with consumers later
selling them to the States’ residents. Because that is so, Ford argues, the plaintiffs’
claims “would be precisely the same if Ford had never done anything in Montana and
Minnesota.” * * * Of course, that argument merely restates Ford’s demand for an
exclusively causal test of connection—which we have already shown is inconsistent
with our caselaw. * * *

2 None of this is to say that any person using any means to sell any good in a State is

subject to jurisdiction there if the product malfunctions after arrival. We have long treated isolated
or sporadic transactions differently from continuous ones. * * * And we do not here consider
internet transactions, which may raise doctrinal questions of their own. * * * So consider, for
example, a hypothetical offered at oral argument. “[A] retired guy in a small town” in Maine “carves
decoys” and uses “a site on the Internet” to sell them. * * * “Can he be sued in any state if some
harm arises from the decoy?” * * * The differences between that case and the ones before us
virtually list themselves. (Just consider all our descriptions of Ford’s activities outside its home
bases.) So we agree with the plaintiffs’ counsel that resolving these cases does not also resolve the
hypothetical. * * *

100
 But in any event, that assumption is far from clear. For the owners of these
cars might never have bought them, and so these suits might never have arisen,
except for Ford’s contacts with their home States. Those contacts might turn any
resident of Montana or Minnesota into a Ford owner—even when he buys his car from
out of state. He may make that purchase because he saw ads for the car in local media.
And he may take into account a raft of Ford’s in-state activities designed to make
driving a Ford convenient there: that Ford dealers stand ready to service the car; that
other auto shops have ample supplies of Ford parts; and that Ford fosters an active
resale market for its old models. The plaintiffs here did not in fact establish, or even
allege, such causal links. * * * Nor should jurisdiction in cases like these ride on the
exact reasons for an individual plaintiff’s purchase, or on his ability to present
persuasive evidence about them.3 But the possibilities listed above—created by the
reach of Ford’s Montana and Minnesota contacts—underscore the aptness of finding
jurisdiction here, even though the cars at issue were first sold out of state.

For related reasons, allowing jurisdiction in these cases treats Ford fairly, as
this Court’s precedents explain. In conducting so much business in Montana and
Minnesota, Ford “enjoys the benefits and protection of [their] laws”—the enforcement
of contracts, the defense of property, the resulting formation of effective markets. * *
* All that assistance to Ford’s in-state business creates reciprocal obligations—most
relevant here, that the car models Ford so extensively markets in Montana and
Minnesota be safe for their citizens to use there. Thus our repeated conclusion: A
state court’s enforcement of that commitment, enmeshed as it is with Ford’s
government-protected in-state business, can “hardly be said to be undue.” * * * An
automaker regularly marketing a vehicle in a State * * * has “clear notice” that it will
be subject to jurisdiction in the State’s courts when the product malfunctions there
(regardless where it was first sold). * * * Precisely because that exercise of
jurisdiction is so reasonable, it is also predictable—and thus allows Ford to “structure
[its] primary conduct” to lessen or even avoid the costs of state-court litigation. * * *

Finally, principles of “interstate federalism” support jurisdiction over these

suits in Montana and Minnesota. * * * Those States have significant interests at
stake—“providing [their] residents with a convenient forum for redressing injuries
inflicted by out-of-state actors,” as well as enforcing their own safety regulations. * *
* Consider, next to those, the interests of the States of first sale (Washington and
North Dakota)—which Ford’s proposed rule would make the most likely forums. For
each of those States, the suit involves all out-of-state parties, an out-of-state accident,
and out-of-state injuries; the suit’s only connection with the State is that a former
owner once (many years earlier) bought the car there. In other words, there is a less
significant “relationship among the defendant, the forum, and the litigation.” * * *
So by channeling these suits to Washington and North Dakota, Ford’s regime would
undermine, rather than promote, what the company calls the Due Process Clause’s
“jurisdiction-allocating function.” * * *

3 It should, for example, make no difference if a plaintiff had recently moved to the forum

State with his car, and had not made his purchasing decision with that move in mind—so had not
considered any of Ford’s activities in his new home State.

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Here, resident-plaintiffs allege that they suffered in-state injury because of

defective products that Ford extensively promoted, sold, and serviced in Montana and
Minnesota. For all the reasons we have given, the connection between the plaintiffs’
claims and Ford’s activities in those States—or otherwise said, the “relationship
among the defendant, the forum[s], and the litigation”—is close enough to support
specific jurisdiction. * * *

JUSTICE BARRETT took no part in the consideration or decision of these cases.

[The concurring opinions by JUSTICE ALITO and JUSTICE GORSUCH agreed that
jurisdiction complied with due process in the two Ford cases, but they criticized the
majority’s notion that specific jurisdiction can exist as to claims that merely “relate
to” a defendant’s contacts with the forum state. Justice Gorsuch’s opinion also
raised some more foundational concerns, questioning what he called the
“increasingly doubtful dichotomy” between specific and general jurisdiction and
critiquing the fact that the current framework effectively gives corporate defendants
“special jurisdictional protections” that individuals do not enjoy.]

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