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CIVIL PROCEDURE OUTLINE

FORDHAM LAW: PROFESSOR ERICHSON SPRING 2011 NOTE: Outline follows chapter format of Erichsons review book, not the class schedule. While it is out of sequence with his schedule, his lecture notes are included in the outline.
12(b)(6) 12(c) Inst./Charge 50(b) ReJML/59 56 50(a) JML

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SUBJECT MATTER JURISDICTION


A. Introduction to State and Federal Courts
1. 2. 3. One Nation, Multiple Court Systems Trial and Appellate Courts Federal Subject Matter Jurisdiction Whenever a court realizes that it lacks subject matter jurisdiction the court must dismiss the case even if no party has objected. 28 U.S.C. 1331 gives the US district courts original jurisdiction over all civil actions arising under the Constitution, laws or treaties of the US. o When plaintiffs sue under federal statutes governing civil rights, securities, antitrust, or other federal laws, they may file their cases in federal court. 1. The Well-Pleaded Complaint Rule In Louisville & Nashville Railroad Co. v. Mottley the Court held that federal question jurisdiction cannot depend on an anticipated federal defense. 1

B.

Federal Question Jurisdiction

For federal question jurisdiction, the claim itself must arise under federal law. o Many authorities refer to this notion as the well-pleaded complaint rule. It does not actually have anything to do with whether a complaint is well pleaded, but rather you must show that the plaintiffs claim itself arises under federal law.

2.

State Law Claim with Federal Issue Occasionally, state law claims involve federal law so centrally that the federal courts will exercise federal question jurisdiction. Federal courts have federal question jurisdiction over state law claims if (1) federal law constitutes an essential element of the pleaded claim, (2) the case implicates a substantial federal interest, (3) the federal issue is contested, and (4) federal jurisdiction would not interfere significantly with the division of labor between state an federal courts. In Merrell Dow Pharmaceuticals v. Thompson, the plaintiffs sued a drug manufacturer for a state law tort claim, but the plaintiffs assertion of negligence was that Merrell Dow breached its duty under a federal statute. o The Court held that it did not create a federal cause of action, because for a state law claim to give rise to federal question jurisdiction, not only must federal law establish a necessary element of the plaintiffs claim, but there must also be a substantial federal interest in the resolution of the matter. In Grable & Sons Metal Products v. Darue Engineering, by contrast, the Court upheld this elusive type of federal question jurisdiction, when Grable sued under state law to quiet title to property, alleging that the notice of seizure given by the IRS was defective, and therefore the sale of property to Darue was invalid. o The complaint was well pleaded in the Mottley sense because it required federal law (IRS notice provisions) to assert an element of the claim, moreover, the federal government had a substantial interest in assuring that IRS provisions were interpreted consistently. o The Court noted that adjudication of the case would not interfere with the state/federal division of labor. o Also the Court might have avoided approving federal jurisdiction 2

over the case if would have forced federal courts to hear hundreds more cases like it. o Still note, most federal question cases involve claims created by federal law; Grable is a pretty uncommon exception.

C.

Diversity Jurisdiction
1. Types of Diversity 28 U.S.C. 1332(a) lists four types of diversity: (1) cases between citizens of different states, (2) cases between citizens of a state and citizens of a foreign state, (3) cases between citizens of different states in which foreign citizens are additional parties, (4) cases between a foreign state as plaintiff and citizens of a state or different states. Determining Citizenship Individuals: For purposes of diversity jurisdiction, courts determine citizenship based on domicile. o Domicile is physical presence plus an intent to remain indefinitely. o No one is without domicile, and no one has multiple domiciles. Corporations: For purposes of diversity jurisdiction, the state defines citizenship two ways. o (1) A corporation is considered a citizen of its state of incorporation. o (2) A corporation is considered a citizen of the state of its principal place of business. To establish principal place of business, courts have used different tests such as the muscle test, focusing on where the bulk of the companys day-to-day operations are locacted. In Hertz, the Court used the nerve center test, focusing on where the corporate headquarters are located.

2.

Unincorporated Associations: Partnerships, labor unions, and other unincorporated associations are different from corporations. Such entities are considered citizens of every state in which any member is a citizen. 3. Complete Diversity In Strawbridge v. Curtiss, the Court held that complete diversity of 3

citizenship is required. No plaintiff may have the same citizenship as any defendant. A long-standing rule, recently affirmed by the Court, holds that the moment for determining citizenship is when the case was filed. 4. Amount in Controversy The amount in controversy must be greater than $75,000. Aggregation of Claims: Whether amounts can be added up to meet the amount-in-controversy requirement depends on whether youre aggregating claims of a particular plaintiff against a particular defendant or whether youre aggregating claims involving multiple parties. o A plaintiff may aggregate as many claims as he or she has against a single defendant in order to satisfy the amount. o Claims by or against multiple parties may not be aggregated for purposes of the amount-in-controversy requirement. If Plaintiff 1 and Plaintiff 2 each have $40,000 breach of contract claims against a defendant, their claims do not satisfy the amount-in-controversy requirement, even if they are joined in a single lawsuit.

o Plaintiffs claims against multiple defendants cannot be aggregated. 5. Diversity Jurisdiction over Class Actions Under the Class Action Fairness Act of 2005 (CAFA), a class action is generally subject to federal jurisdiction as long as it meets minimal diversity and the aggregate amount in controversy exceeds $5 million. o Minimal diversity means that at least one member of the class is a citizen of a different state from any defendant.

D.

Other Bases for Federal Subject Matter Jurisdiction


Federal jurisdiction extends to cases in which the US government is a party, as well as cases involving ambassadors and other public ministers. Federal courts also have subject matter jurisdiction over admiralty and maritime cases. Congress has enacted dozens of jurisdiction-granting statutes, 4

including bankruptcy, antitrust, intellectual property, and civil rights.

E.

Supplemental Jurisdiction
If a federal court has subject matter jurisdiction over a claim, the question arises whether the federal court may also adjudicate related claims that do not have an independent basis for federal jurisdiction under supplemental jurisdiction. 1367: Supplemental Jurisdiction. 1367(a): If it arises from the same common nucleus of operative fact, the district courts shall have supp. Jurisdiction over all other claims that form part of the same case or controversy under Article III of the Constitution. o Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties. Direct response to Finley. 1367(b): If it is founded on diversity jurisdiction though, the district courts shall not have supplemental jurisdiction over claims by plaintiffs against persons made under Rule 14, 19, 20 or 24. 1. Grant of Supplemental Jurisdiction 28 U.S.C. 1367(a) says that if a federal court has jurisdiction over an action, then the court shall have supplemental jurisdiction over all other claims that are so related to claims. In United Mine Workers v. Gibbs, the plaintiff sued the union in federal court asserting one claim based on a federal statute, and the other claim asserted a state common law claim for tortious interference with contract. The Court decided that it was okay for the state tort law claim to tag along with the federal labor law claim. o The Common Nucleus of Operative Fact: If a related claim forms part of the same case or controversy as the claim supporting federal jurisdiction, then jurisdiction may extend to the related claim. Whether it is a scenario in which a court has federal question jurisdiction over one claim and supplemental jurisdiction over a related state, or a federal claim and a related state counterclaim, cross-claim, or a third-party claim, or the court has diversity jurisdiction over an original claim and a party asserts a related counterclaim, cross-claim, or third-party claim that does not satisfy complete diversity or the amount-in-controversy requirement, as long as the claim arises out of the same claim as which the 5

court has original jurisdiction, the grant of supplement jurisdiction applies. 2. Constraint on Supplemental Jurisdiction in Diversity Cases In diversity cases, supplemental jurisdiction presents the risk that a party may try to get into federal court without meeting the requirements, so 1367(b) rejects jurisdiction over certain claims in diversity jurisdiction cases. To understand the 1367(b) carve-outs, look to Owen Equipment & Erection Co. v. Kroger. Kroger was electrified and his widow sued the power company in federal court. o The power company asserted a third-party claim against the equipment company that operated the crane and then Kroger asserted a negligence claim directly against the equipment company. o The question was whether the federal court had jurisdiction over Krogers claim against the equipment company, since the court didnt have diversity jurisdiction over Kroger and the equipment company. o Despite the claim arising out of the same facts as her original claim, the Court decided there was no jurisdiction over the claim. Since Kroger wouldnt have been permitted to file a federal lawsuit against both companies, she shouldnt be allowed to accomplish the same thing by waiting to asserting the second claim after the equipment company was joined as a third-party defendant. The Court did not want parties to use supplemental jurisdiction as an end run around the statutory constraints on diversity jurisdiction.

Under 1367(b), which codifies and extends Kroger, if the case is in federal court solely because of diversity jurisdiction, then supplemental jurisdiction may not be used for claims by plaintiffs against additional defendants or third-party defendants. o Such claims must independently meet the requirements for diversity jurisdiction, or have some other independent basis such as federal question jurisdiction. Three Warnings About 1367(b): (1) it does not grant jurisdiction; it 6

merely takes it away; (2) it applies ONLY in diversity cases if a case is in federal question jurisdiction, you dont have to worry about 1367(b); (3) pay attention to its exact words. o It only applies to claims by plaintiffs, not claims by defendants against third-parties. o It only applies to claims against persons made parties under Rule 14, 19, 20, or 24 (types of joinder). 3. Discretionary Decline of Jurisdiction In Gibbs, and as enacted in 1367(c), supplemental jurisdiction is at the discretion of the courts, not a plaintiffs right. Under 1367(c) a court may decline to exercise supplemental jurisdiction (1) if the claim raises a novel or complex issue of State law; (2) if the claim substantially predominates over the claim over which the district court has federal jurisdiction; (3) if the district court has dismissed all claims over which it has original jurisdiction.

F.

Removal
1. Removal from State Court to Federal Court 28 U.S.C. 1441 gives a defendant the right to switch a case that could have been brought in federal court, but the plaintiff chose to file in state court, to federal court. When a case is removed from state court, it goes to the federal district court for the district and division embracing the place where such action is pending. In cases with multiple defendants, removal ordinarily requires agreement among all the defendants who have been served. In-State Defendant Exception: An in-state defendant may not remove a case based on diversity jurisdiction, since that defendant should not be worried about unfavorable local bias in the defendants home court. 2. Removal Procedure (28 U.S.C. 1446) Its not up to the state court to give permission. You dont ask for permission you simply remove. The defendant files a notice of removal in federal court, notifies the other party, and gives a copy to the state court. Move to Remand: the plaintiff moves to remand in federal court, after the case has been removed, giving the federal court, not the state court, the power to decide the question of federal subject matter jurisdiction.

There is a 30-day time limit for defendants to remove. 3. Separate and Independent Federal Claims When a removed case includes both a federal question claim and an unrelated state claim, the removal statute purports to give the federal judge discretion about whether to retain the entire case or to remand part of it back to the state court.

G.

Analyzing Subject Matter Jurisdiction


Federal Subject Matter Jurisdiction Analysis Federal Question Jurisdiction: Does the claim arise under federal law? o If federal law comes up as an anticipated defense, rather than in the well-pleaded complaint no federal question jurisdiction. o Was the cause of action created by federal law? If yes federal question jurisdiction. If no slim chance of federal question jurisdiction, but only if: Federal law forms an essential element of the claim; There is a substantial federal interest; The federal issue is disputed; and Will not interfere with the state/federal division of labor.

Diversity Jurisdiction o First, determine whether complete diversity exists. For individual citizenship, determine domicile. For corporate citizenship, determine both the state of incorporation and the principal place of business (nerve center test). If any plaintiffs citizenship is the same as any defendants citizenship no diversity jurisdiction.

o Determine the amount in controversy. If $75,000 or less no diversity jurisdiction.

o If complete diversity and amount in controversy over $75,000 diversity jurisdiction. o But in a removal situation, if any defendant is a citizen of the forum state no diversity removal jurisdiction. o If a class action apply either standard diversity jurisdiction analysis or use special analysis under CAFA If minimal diversity and aggregate amount in controversy is more than $5 million CAFA jurisdiction, unless exception applies.

Other Bases of Federal Jurisdiction o Is the US a party? o Is it an admiralty or maritime case? o Is there some other applicable federal jurisdictional statute? If yes to any of the above federal jurisdiction.

o Is it a controversy between states? If yes original jurisdiction in the Supreme Court.

If any basis succeeds, then the federal courts jurisdiction is proper. Otherwise, the court must dismiss for lack of subject matter jurisdiction. If the court has subject matter jurisdiction over part of an action, but an additional claim does not meet the usual requirements for federal jurisdiction analyze supplemental jurisdiction: o Does the additional claim arise out of the same facts as the original? If no no supplemental jurisdiction. If yes 1367(a)s grant applies; proceed with analysis.

o Is supplemental jurisdiction over the claim prohibited by 1367(b)? Is federal jurisdiction over the case based solely on diversity? If no 1367(b) does not apply. If yes Is the additional claim asserted by a plaintiff against a

third-party defendant, a joined defendant, or an intervenor-defendant? o If no 1367(b) does not apply. o If yes the court lacks subject matter jurisdiction over the additional claim. o Will the court decline jurisdiction over the additional claim? Does the claim raise a difficult issue of state law? Does the claim substantially predominate? Has the court dismissed the claim over which it had original jurisdiction? Is there some other compelling reason to decline jurisdiction? If yes to any the court may decline to exercise supplemental jurisdiction.

PERSONAL JURISDICTION
H.
1.

Development of Territorial Jurisdiction Doctrine


Pennoyer v. Neff Central to this case, which is what makes it so important to the doctrine despite being overturned, is the idea that a courts power is limited by territorial boundaries, and that parties must be properly notified about the lawsuit. In Rem Jurisdiction: Power over property. In Personam Jurisdiction: Power over the person. Quais-in-rem Jurisdiction: Power over person, via power over their property. Under Pennoyer, a state court has power over property within that state, but lacks power over property outside the state boundaries. Power over the person depends on whether the person was served within the state borders. The Court framed the judgment as a case about constitutional rights: judgment without personal jurisdiction violates due process.

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2.

Post-Pennoyer Expansion Following Pennoyer, which assumed that each state was pretty much separate and that interstate activity was the exception, technological advancement made Pennoyer unworkable. Milliken v. Meyer (1940) A citizen of Wyoming was served with process in Colorado. The Court says the court has power over its own citizen, regardless of the state of process. Kane v. NJ (1919) Out of state drivers need to sign a form that says a state-appointed person will accept service on their behalf. Hess v. Pawlowski (1927) No need to fill out a form simply by using our state roads, you have accepted this state-appointed officer as the recipient of service on behalf of defendant.

3.

International Shoe v. Washington Instead of following Pennoyers analysis, whether the defendant was present in Washington or whether it had consented to jurisdiction by doing business in Washington, the Court asked whether the companys contacts with Washington were enough to justify jurisdiction. o The court asked, Does the defendant have certain minimum contacts with the state that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. The defendant employed a number of salespeople in Washington, and the dispute arose out of that employment. That sufficed to meet the requirement of minimum contacts.

The logic of International Shoe is reciprocity, if a company or individual gets the benefits of a state, then it should expect to be subject to the power of that states courts. o International Shoe got the benefit of having salespeople working in Washington, so it was only fair that it had the burden of being subject to suit in that states courts for money it owed based on those employees.

I.

General Jurisdiction
If a defendants contact with a forum state is so strong that the states courts would have jurisdiction over the defendant for any and all claims, regardless of whether the claims arose out of anything that happened in the state, the court has General Jurisdiction over the defendant. Individual: General jurisdiction is based on domicile.

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o In Milliken v. Meyer, the Court held that if an individual is domiciled in a state, then the courts of that state have in personam jurisdiction over the person for any claim, regardless of where it may have arisen. Corporation: General jurisdiction is based on (1) Where a corporation is incorporated, and (2) where a company is headquartered. o In Perkins v. Benguet Consolidated Mining Co., the Court held a company was subject to general jurisdiction of the Ohio courts because for a period of time the company was operating out of an Ohio office where the companys president was located. o In Helicopteros Nacionales v. Hall, by contrast, the Court held that the defendants purchase of millions of dollars of equipment in Texas, along with other business contacts with the state, were insufficient for general jurisdiction. If a company merely buys and sells a lot in a state or sends its employees there regularly to conduct business, that does not give the state general jurisdiction over the company. The takeaway is that for general jurisdiction the company must have a serous physical presence in the state. A factory or office building with permanent company employees in the state might suffice as courts often say, systematic and continuous.

J.

Specific Jurisdiction
The court may have specific jurisdiction over a defendant if the claim arises out of the defendants contact with the forum state.

1.

Long-Arm Statutes Before getting to the minimum contacts test, which addresses whether specific jurisdiction over a particular defendant would be constitutional under the Due Process Clause, a court must ascertain whether it has a statutory basis for asserting jurisdiction over the defendant. Some states long-arm statutes list specific bases for personal jurisdiction over out-of-state defendants. If the defendant doesnt fit within the meaning, the court lacks jurisdiction. If not, then go to the constitutional issue. Some states statutes simply state the courts may assert personal jurisdiction to the full extent permitted by the constitution. Here, the statutory step merges with the constitutional analysis.

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2.

Minimum Contacts and Purposeful Availment Minimum contacts are not merely about quantity - a single contact can be enough, if its a substantial contact and if the claim arises directly from it. o In McGee v. International Life Insurance Co., the Court held the insurance companys sale of a policy to a holder in California sufficed to give a California court jurisdiction over the company for a dispute over the policy. The contact must be purposeful think International Shoe Companys purposefully employing persons in Washington, The International Life Insurance Company purposefully mailing an insurance policy to California. o In Hanson v. Deckla, the Court held that a Delaware trustee responsible for a trust created by a woman, who subsequently moved to Florida, was not subject to jurisdiction in Florida, because personal jurisdiction requires some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State. The womans move to Florida was a unilateral activity by her, not a purposeful act by the trustee.

More than any other single concept, purposeful availment is the key to understanding personal jurisdiction the contacts that matter for the minimum contacts test are those in which the defendant knowingly and purposefully does something toward the forum state. o In World-Wide Volkswagen Corp. v. Woodson, the Court held that an Oklahoma court lacked personal jurisdiction over Seaway (cardealer) and WWV, because they had not purposefully availed themselves of Oklahoma. They had sold a car to customers in New York. They had not made any intentional contact with Oklahoma. The Robinsonss driving to Oklahoma was unilateral activity just like Dora Donners move to Florida in Hanson.

3.

The Effects Test In some cases, specific jurisdiction is based on a defendants out-ofstate conduct that causes effects in the forum state. In Calder v. Jones, the Court held that a reporter and editor of a newspaper located in Florida, were subject to specific jurisdiction in California, based on the effects of the defendants conduct.

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o The Court emphasized that the story about Jones concerned the California activities of a California resident, and that the article was drawn from California sources and the brunt of the harm, was suffered in California. Unlike in World-Wide Volkswagen, in Calder, defendants not only knew that their paper had a significant circulation in California, but also knew that Jones lived in California and suffer reputational harm there.

4.

Business Relationships In Burger King v. Rudzewicz, the Court held that despite Rudzewiczs lack of physical presence in Florida, he had purposefully directed his efforts toward a Florida resident by entering into a substantial, longterm business relationship with a company headquartered in Florida. Stream of Commerce In Asahi Metal Industry Co. v. Superior Court, the Court failed to answer the question of whether stream of commerce constitutes purposeful availment for specific jurisdiction. o Asahi of Japan, manufactured valves for Cheng Shin of Taiwan, who used them in their tires, that were on a motorcycle in California. o Four justices said the minimum contacts test is met when a defendant puts a product into the stream of commerce and can foresee that the product may go to the forum state. o Four justices said the minimum contacts test requires a more direct link to the forum state than merely placing a product into the stream of commerce elsewhere. The whole Court agreed that the minimum contacts test may be met if the defendant, in addition to placing the product in the stream of commerce, did some purposeful act toward the forum state, such as designing its product for the forum state, advertising in the forum state, or establishing service centers there.

5.

6.

Personal Jurisdiction in Cyberspace Courts have focused on whether the defendants contacts with the forum state are sufficiently substantial and purposefully to justify the states assertion of judicial power over that defendant. Ordinarily, a passive website that merely makes information available does not establish personal jurisdiction in all states that information is seen. 14

Websites on which business is conducted have acted more purposefully toward the forum state than in the passive-website scenario, so courts are much more inclined to find personal jurisdiction. In middle-ground cases with websites that permit an exchange of information, personal jurisdiction depends on the level of interactivity and the commercial nature of the site. 7. The Reasonableness Inquiry The Court has described personal jurisdiction analysis in two parts: (1) Minimum Contacts (Purposeful Availment): Are there sufficient purposeful contacts between the defendant and the forum to permit jurisdiction; and (2) Reasonableness (Fair Play and Substantial Justice): Under the circumstances, would it be reasonable to permit personal jurisdiction in the particular case? The Court has suggested a multifactor analysis for determining whether personal jurisdiction would be unreasonable. The three dominant factors are: (1) the burden on the defendant, (2) the plaintiffs interest, and (3) the forum states interest. When analyzing the reasonableness of exercising personal jurisdiction, ask yourself whether the case is more like Asahi (unreasonable because of international dimension combined with procedural posture in which forum state no longer had any interest) or Burger King (reasonable because, despite some burden on the defendant, the plaintiff and forum state had a legitimate interest).

K.

Jurisdiction Based on Consent


If a defendant consents to the courts power, then the court has personal jurisdiction over that defendant. Personal jurisdiction is a waivable defense if the defendant consents, then the defendant gives up the right to object that the court lacks personal jurisdiction.

1. General Appearance The most basic way for a defendant to consent is simply by appearing to litigate the case. General Appearance: If a defendant, without objecting to the courts personal jurisdiction, files an answer or makes a motion, then the defendant has consent to the courts personal jurisdiction by going forward with the litigation.

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o If the defendant doesnt wish to consent to the courts personal jurisdiction, the defendant has two options: (1) Default and collateral attack. After a default is entered from not appearing, the defendant objects that the first court lacked personal jurisdiction upon enforcement of the judgment. (2) Show up and immediately object to the courts personal jurisdiction, known as a special appearance. 2. Advance Consent A party can consent in advance to the personal jurisdiction of a court. Sometimes, especially in the business context, parties do this by appointing an agent for service of process in a particular state. Forum Selection Clauses: specify where litigation must be brought if at all. o In Carnival Cruise Lines v. Shute, the Court enforced a forum selection clause printed on the passengers ticket stating any dispute arising out of the cruise must be litigated in Florida, where Carnival is headquartered.

L.

Transient Jurisdiction
In Burnham v. Superior Court, the Court announced that transient jurisdiction was not dead at all. While in California for a business trip, his wife served him with process in a divorce case. o The Court held that if an individual defendant is served with process within the state, the court has in personam jurisdiction over the defendant.

M.

Personal Jurisdiction in Federal Court


Rule 4(k)(1)(A): If the state court would have personal jurisdiction over the defendant, then so does the federal court. Rule 4(K) contains additional provisions which extend personal jurisdiction a bit further in federal court than in state court. Rule 4(k)(1)(B): A federal court has personal jurisdiction over a defendant joined under Rule 14 or Rule 19, and who can be served with process within 100 miles of the court. o This is a small, yet useful tool, for joining certain defendants (third-party defendants and compulsory joinder) who are nearby but might otherwise escape the courts power.

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Rule 4(k)(1)(C): Provides a statutory catchall, stating that service of process gives a federal court personal jurisdiction over a defendant when authorized by a federal statute (used in interpleader). Rule 4(k)(2): Ensures that whenever a foreign defendant has sufficient contacts with the United States to meet the minimum contacts test but they are so dispersed that contacts with each individual state would not be enough to get personal jurisdiction over the defendant in any state court, some federal court will be able to assert power over that defendant for purposes of federal law claims. To challenge personal jurisdiction in federal court, a defendant may assert an objection in the answer or may make a pre-answer motion to dismiss under Rule 12(b)(2). o Often defendants pair the Rule 12(b)(2) motion with Rule 12(b)(5) motion to dismiss for insufficient service of process, arguing that service of process failed because it exceeded the courts territorial reach.

N.

Notice

1. The Due Process Requirement of Notice If due process means anything, it means that if a proceeding is going to affect a partys interests, that party should have an opportunity to be heard. In Mullane v. Central Hanover Bank & Trust Co., the Court held that notice must be reasonably calculated to reach the person you have to do what someone would do who actually wants to inform the person about the proceeding. o This does not always require actual notice for a party to be bound by a judgment, but notice reasonably calculated to reach the party. 2. Service of Process Rule 4(e)(2): Individuals in the US are served by personally delivering a copy of the summons and complaint, or by leaving the summons and complaint at the persons home with someone of suitable age and discretion who also lives there. Rule 4(e)(1): Also allows service in whatever manner allowed under state law. Rule 4(d): If defendant agrees to waive a formal service of process, the defendant gets extra time to answer the complaint. If a US defendant does not agree, the defendant must pay whatever the costs the plaintiff 17

incurs serving the defendant.

O.

Analyzing Personal Jurisdiction

Personal Jurisdiction Analysis Three part analysis: Authorization for assertion of jurisdiction, Constitutionality (due process), and Notice (both statutorily and constitutionally sufficient). 1. Authorization: Does the courts territorial authority for service of process reach this defendant? a. State Court Can the defendant be served within the state? If the defendant is out of state, does the states long arm-statute extend to this defendant? o If the states long-arm statute extends to the full extent of due process, then this analysis merges with the constitutional analysis in Part II below. b. Federal Court Would the state court have personal jurisdiction over the defendant? Rule 4(k)(1)(A) Even if the state court would lack jurisdiction, does the federal court have jurisdiction under the bulge provision or other exceptions of Rule 4(k)(1)(B)-(C)? 2. Constitutionality: Does this defendant have sufficient connection with the forum state so that jurisdiction comports with due process? (Heart of the analysis.) In Personam General and Specific Jurisdiction. o General Jurisdiction: Is the defendants relationship with that state is such that the state has power over that defendant regardless of whether that claim arose in that state? Individual: domicile, presence (Pennoyer/Burnham), consent (agent consent, clause, waiver). Defendant can make a 12(b)(2) motion/preserve objection by using lack of PJ as a defense in Answer. Corporation: headquarters (Perkins), incorporation, consent (appointing an agent for service of process, contractual clause), doing business (Perkins/Helicopteros) a company can be present (Starbucks hypo., Coffee burn in Idaho, but theres a Starbucks on every corner in NY). o Specific Jurisdiction: Does the claim arise out of the defendants contact with the forum state? Yes International Shoe Test Two Part test i. Minimum Contacts (Purposeful availment) Did the defendant act purposefully; not unilateral act 18

ii.

by another (WWVW/Hanson) Common scenarios: tortious conduct, contract, stream of commerce (Asahi/J. McIntyre v. NiCastro), effects (Hypo. Firing a gun from NJ across the Hudson in NY) (Keeton/Calder). Reasonableness (fair play and substantial justice) Consider three main factors (Asahi): o Burden on the defendant o Interest of the plaintiff o Interest of forum state.

3. Notice a. Service of process (was service accomplished properly?) State court: Did service comply with state rules on service of process? Federal court: Did service comply with Rule 4? Constitutionality (Was the defendant notified in a way that comports with due process?) Was notice reasonably calculated to reach the defendant? (Mullane; Jones)

VENUE
P. Venue in State Court
Venue rules for state courts vary from state to state and are generally regulated by statute.

Q.

Venue in Federal Court


To figure out which districts are proper venues for a case in federal court, look at the general federal venue state 28 U.S.C. 1391. o Remember that a few types of cases, such as interpleader, have their own specific venue statutes. To apply the general venue statute, decide whether to look at 1391(a) or (b). 1391(a) applies to cases in federal court based on diversity jurisdiction. 1391(b) applies to federal question cases. o The difference really doesnt matter, but its important to cite the correct statute.

1.

Defendants Residence 1391(a)(1)/(b)(1): Permits a case to be brought in a judicial district 19

where any defendant resides, if all defendants reside in the same State. o This makes sense. If there are multi-defendants, than it makes more sense to base venue on where the relevant events occurred. Residency for Corporations: A defendant corporation resides in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced. 1391(c) o So, with a single corporate defendant, if the defendant is subject to personal jurisdiction in a district, then federal venue in that district would be proper under 1391 (a)(1) or (b)(1). o Dont say venue is proper because the defendant is subject to personal jurisdiction; rather say 1391(c) establishes that the defendant resides in this district because it is subject to personal jurisdiction here; venue is proper in this district under 1391(a)(1) because all defendants reside here. 2. Events or Property 13931(a)(2)/(b)(2): Permits cases to be brought in a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is subject of the action is situated. Waiver If a defendant doesnt object to venue, the court may go ahead and hear the case. Rule 12(h)(1), like the defense of personal jurisdiction, provides that the defense of improper venue is waived if not asserted at the outset of the litigation. 4. Venue upon Removal An action removed to federal court is removed to the district court of the US for the district and division embracing the place where such action is pending.

3.

R.

Venue Transfer
There are three different federal venue transfer statutes: 1404: Deals with cases that are filed in a court that has jurisdiction and where venue is proper, but under circumstances in which would be more convenient for the case to be heard somewhere else. 1406: Deals with cases that are filed in a venue that is not proper and permits a court to transfer from the impermissible venue to a permissible venue.

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1407: Deals with situations in which related cases have been filed in multiple federal district courts; it offers a way to bring cases together so they can be handled more efficiently. 1. Transfer from a Proper Forum 1404 If you are deciding whether a court is likely to grant a motion to transfer venue, look at where the parties are located, where the witnesses reside, where the evidence can be found, and where the relevant events occurred. Venue transfer is highly discretionary: o The words of the statute give the district plenty of leeway in deciding whether to grant a transfer of venue. 2. Transfer from an Improper Forum Rather than dismiss a case under a 12(b)(3) motion to dismiss for improper venue, a court can transfer a case to a proper venue. 1406 As interpreted by the Court, a case filed in an improper forum can be transferred even if both venue and personal jurisdiction are missing. 3. Venue Transfer and Choice of Law The Court has held that the transferee court should apply the same law that the transferor court would have applied. o This way, when a court is deciding whether to transfer venue, it can focus on the location of the parties and witnesses, rather than worrying about whether transfer would alter the applicable substantive law. Only applies to a transfer from proper venue, not an improper venue. 4. Multidistrict Litigation Transfer Involves situations in which related lawsuits have been filed in multiple federal district courts. 1407 permit the transfer of multiple cases to a single federal district court for coordinated pretrial handling. Power is transferred to a seven-judge Judicial Panel on Multidistrict Litigation that decides whether it makes sense to transfer the cases to a single district court, and decides which court. MDLs only handle pretrial matters.

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S.

Forum Non Conveniens


Gives courts a basis to dismiss actions that should more appropriately be brought in a different court. If the more appropriate forum falls within the same judicial system, then there is no need for dismissal because venue transfer works fine. Forum non conveniens comes into play when the more appropriate forum is a different court system. This basically means two situations: a case filed in a state court that ought to be brought in a different state or a case filed in the US that ought to be brought in another country. In general, courts defer to the plaintiffs choice of forum, and disturb it only for good reason. But courts give plaintiffs choice less deference if it is not the plaintiffs home forum. In Piper Aircraft v. Reyno, the Court laid out the analysis for applying forum non conveniens. o The Court agreed that dismissal was warranted, because Scotland was a more appropriate forum. o In reaching that decision, the Court applied a three-part analysis: (1) adequate alternative forum; (2) private interest factors; and (3) public interest factors.

1.

Adequate Alternative Forum An adequate alternative forum must exist, or else the court will deny the motion. If the other countrys legal processes are inadequate, then a court may refuse to grant a forum non conveniens motion. The fact that the alternative forum may provide less favorable law to the plaintiff does not, in itself, make it an inadequate forum.

2.

Private Interest Factors Private interest factors include the location of the parties, witnesses, and evidence.

3. Public Interest Factors The court asks which forum has a greater interest in the dispute? Which forum would offer a more efficient and appropriate use of judicial resources?

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THE ERIE DOCTRINE


T. The Basic Doctrine
On state law claims, federal courts apply state substantive law and federal procedure.

U.

Development of the Erie Doctrine

1. Swift to Erie In Swift v. Tyson, the Court held that the Rules of Decisions Act from 1789 meant that the laws of the several states that federal courts were to apply when sitting in diversity, is state statutes but not general common law. o Instead, the federal courts should discover law, and in turn, create a sort of federal common law. In Erie Railroad v. Tompkins, the Court overruled Swift, holding that the federal court must apply not only state statutes but also the common law decisions of state courts. o As Justice Brandeiss opinion explained, the holding was largely a way to avoid discrimination in favor of out-of-state litigants. If federal courts do not have to apply state common law, then a litigant might obtain a different result by choosing either federal court or state court.

In Klaxon v. Stentor, the Court held that the federal court must apply whichever substantive law would be applied by the state court where the federal court sits. 2. Guaranty Trust to Byrd In Guaranty Trust Co. v. York, the plaintiff brought the claim after the relevant time permitted under New Yorks statute of limitations had expired. But at the time, federal courts in equity cases still applied the doctrine of laches instead. o If the statute of limitations was deemed substantive, NY law would apply, but if it were deemed procedural, federal law would apply. o Rather than focus on whether it was substantive or procedural, the Court focused on whether the rule would determine the outcome of the dispute. The point of diversity jurisdiction was to provide another tribunal, not another body of law.

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Outcome Determinativeness Test: If the difference between the federal and state rule would determine the outcome, then the federal court must apply the state rule.

It quickly became clear that the Outcome Determinativeness Test was way too simplistic for distinguishing between substance and procedure. o As applied, the Guaranty Trust rule meant that everything was outcome determinative. In Byrd v. Blue Ridge Rural Electric Cooperative, the Court acknowledged that theres more to the story than outcome determinativeness. Blue Ridge wanted the judge to decide Byrds employment status under South Carolina law, but Byrd wanted the jury to decide under federal law. o The Court identified a countervailing federal interest in the allocation of power between judge and jury in federal court, in holding that in balancing the strong federal interest in the power of the federal jury against the state interest in in having the judge decide, the federal rule should apply. Dont rely too heavily on Byrd. Its countervailing federal interests test has rarely tipped the scales and is rarely cited by the Court. At least be aware of the possibility that countervailing federal interests may figure into the choice between federal and state law.

3. Hanna and Post-Hanna Application In Hanna v. Plumer, the plaintiff served process on the defendant in a manner compliant with federal rules, but not compliant with Massachusetts law. The defendant contended the Massachusetts statute should apply and the complaint dismissed. o Rather than apply the outcome determinativeness test, the Court held that: (1) If there is a federal rule directly on point, then that federal rule applies as long as it is valid under the REA. That is so long as the rule does not abridge, enlarge, or modify any substantive right. (2) Further, for situations in which the Erie/RDA analysis was unavoidable because there was no federal rule or statute on point, apply a more sophisticated outcome determinativeness 24

test, by referencing the twin aims of the Erie Rule: (i) discouraging forum shopping and (ii) avoiding inequitable administration of the laws. Hannas Twin Aims of Erie: 1 the best way to discouraging forum shopping is to make sure the outcome wont differ from state to federal court. 2- to avoid inequitable administration of the laws, make sure the outcome wont differ from state to federal court. o Goes deeper than the Guaranty Trust test, because it ask if its the sort of difference that really matters. Ex., Under Guaranty Trust, we see that the outcomedeterminative test would find that state law should apply since it would result in dismissal. But, applying the twin-aims version of the test to Hanna, would either side have chosen a court based on the rules for service of process? No. Is there anything inequitable about requiring personal service in state court but permitting dwelling-place service in federal court? Nope. Therefore, from the point of view of a litigant filing the case, the service-of-process rule is not outcome determinative at al. In Walker v. Armco Steel Corp., the Court narrowly construed Rule 3 to avoid a direct conflict with federal law. While its hard to say what exact lesson to learn from Walker, it tells you that when you see a conflict between state and federal law, before you assume that some federal rule applies under Hanna and the REA, you have to examine closely whether the federal rule (or statute) governs the exact issue on which state law conflicts.

o Maybe the rule is not directly on point, in which case Hanna no longer directs application of the federal rule, and you are into the broader analysis under Eries twin aims and the RDA. 4. Gasperini In Gasperini v. Center for Humanities, the court considered each issue independently and found a way to accommodate both state and federal interests. o Under New York law, an appellate court has the power to review the amount of a jury verdict and to order a new trial if the verdict 25

deviates materially from a reasonable amount. o The federal courts, by contrast, allow a jury verdict to stand unless the amount is so unreasonable that it shocks the conscience. o Furthermore, unlike NY appellate court, the federal circuits have no independent power to review the amount of a verdict. The federal district court decides whether to grant remittitur (a new trial unless the plaintiff accepts a reduced damages award); the circuit courts power is limited to reviewing the district courts decisions for abuse of discretion.

o The Court saw two distinct, yet intertwined issues: (1) deviates materially v. shocks the conscience; (2) power of appellate review. (1) goes to the substantive outcome of the case as an Erie matter, so state law applies; (2) concerns the allocation of power between the federal district and circuit court, so federal appellate review should apply. In this way, the Court was able to protect the federal interest in setting up the functions and institutional capacities of federal trial courts and appellate courts, while accommodating New Yorks interest in having a less deferential standard for reviewing excessive jury awards.

Gasperini brings the pendulum back towards the center between state law and federal law, reaffirming the importance of federal interests but also demanding accommodation of state interests.

V.

Determining State Law


State law is whatever the state high court says it is. When applying state law, federal courts must apply the law exactly as they believe the states high court would do. o The federal court therefore looks to see if the state supreme court has decided the issue, and if so, it follows that ruling unless there is very good reason to believe that the state supreme court would no longer decide it the same way. If there is no state supreme court decision on point, then the federal court looks at intermediate appellate decisions from that state, or other sources the state high court would consider, such as cases from other states, treatises, and policy rationales.

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W. Applying the Erie-Hanna Analysis


Erie-Hanna Analysis 1. Spotting the Erie Issue a. You are in federal court on a state law claim. (Probably this is because federal subject matter jurisdiction is based on diversity of citizenship, but it could also be a state claim in federal court on supplemental jurisdiction.) b. On some issue, you see a conflict between what the federal court would do and what a state court would do in the same situation. 2. Federal Rule or Statute a. Is there a valid federal rule or statute directly on point? i. If yes, the court will apply federal law because a federal court must apply any valid federal statute or rule even if it conflicts with state law. (Hanna) ii. But not so fast. First, make sure the federal rule or statute really is directly on point, and make sure it is valid. b. Is the federal rule or statute directly on point? i. What is the precise issue on which federal and state law diverge? Find each federal rule or statute that governs that issue, and examine whether it addresses the specific point on which federal and state law differ. If the federal rule or statute addresses the precise issue you have identified, then it is directly on point. c. Is the federal rule or statute valid? i. For a federal statute, ask whether it is constitutional. ii. For a federal rule (such as the FRCP), also ask whether it complies with the REA. Under the REA, a valid rule must not abridge, enlarge, or modify any substantive rights. 3. Federal Practice a. If there is no valid federal rule or statute directly on point (that is, state law conflicts with a federal practice, but not with a specifically enacted rule or statute), then you must do the more complete Erie/RDA analysis. There are three ways you might know that youre in this situation: i. No applicable federal rule or statute exists (ex., Guaranty Trust, where federal law was based on the equitable doctrine of laches rather than on any particular rule or statute). ii. There is an applicable federal rule or statute, but on closer examination it does not directly address the point (as in Walker, where Rule 3 defined the commencement of the action but did not specifically address the statute of limitations). iii. There is an applicable federal rule or statute directly on point, but it is invalid under the constitution or the REA.

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b. Erie/RDA Analysis i. Apply the Erie/RDA test to determine whether state or federal law applies. Ask the following questions about the point on which state and federal law differ: o Is it outcome-determinative? (Guaranty Trust) o Is the state law bound up with state-created rights and obligations? (Byrd) o Would applying federal law rather than state law promote forum shopping or inequitable administration of the laws between state and federal court? (Hanna) o Does the state law affect primary decisions about human conduct? (Harlans Hanna concurrence) Based on these questions, if the state law is not substantive/outcome-determinative (that is, if the answers were mostly no), then the court will apply federal law. Based on these questions, if the state law is substantive/outcomedeterminative (that is, if the answers were mostly yes), then the court probably will apply state law, but first may consider the federal and state interests at stake. ii. Consider federal and state interests. Erie-Hanna Analysis Summary Erie Issue (1) Federal Rule/Statute a. Directly on point? b. Valid? (REA) o If yes Apply federal law. o If no (go below) (2) Erie/RDA Outcome-determinative? Bound up with state-created rights/obligations? Encourage forum-shopping? Inequitable administration of laws? Primary human activity?

PLEADINGS
Pleadings are where each litigant first gets to tell its side of the story as a formal part of the litigation process. The plaintiff files a complaint setting forth the plaintiffs allegations. o The complaint is what officially starts the lawsuit.

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The defendant then files an answer responding to the plaintiffs allegations, or sometimes instead files a pre-answer motion. o In some cases, the plaintiff files a reply to the defendants answer. The pleadings serve the critical function of notifying each party about the adversarys claims or defenses. Pleadings also give the court the opportunity to decide whether a claim should be dismissed at the outset either for some procedural flaw or because, even taking the plaintiffs factual allegations as true, the claim lacks legal merit.

X.

Complaint

1. History The point of the Federal Rules of Civil Procedure pleadings is not to reduce the dispute to a single issue. Rather, the pleadings give the parties notice of each others claims and defenses. o The pleadings also provide a basis for motions to dismiss and other procedures to test whether those claims and defenses have enough substance to be allowed to proceed. 2. Modern Pleading a. Federal Rule 8 The Complaint: The pleading that a plaintiff files to initiate a lawsuit, setting forth the plaintiffs claims against the defendant. o For a valid complaint in federal court Rule 8(a) requires three things: (1) a statement of the basis for jurisdiction subject matter jurisdiction (not PJ, because PJ can be waived); If federal jurisdiction is based on diversity, the complaint must allege the citizenship of each party and the amount in controversy.

(2) a short and plain statement of the claim showing that the pleader is entitled to relief; (3) a demand for judgment. Plaintiffs are not required to specify the amount, but rather state what kind of relief plaintiff is seeking.

o Rule 8(a)s requirements apply not only to original claims, but also to counterclaims, cross-claims, and third-party claims.

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b. Statement of the Claim (i) Notice Pleading o A realistic phrasing of rule 8(a)(2) a statement of the claim showing that the pleader is entitled to relief, and feel free to keep it short and plain if you so chose. o The name reinforces the concept that the primary function of a complaint is to give the defendant notice of the claim. o In Conley v. Gibson, the plaintiffs asserted employment discrimination claims, but their complaint did not specifically spell out what was discriminatory about the defendants acts. The Court held that the complaint sufficed, reasoning that the FRCP do not require a claimant to set out in detail the facts upon which he bases his claim.

o In Swierkiewicz v. Sorema, a plaintiff claimed discrimination based on national origin. After a court dismissed the complaint for failing to allege facts in enough detail to show discrimination, the Court reversed, citing Conley and Rule 8s notice pleading standard. (ii) The Plausibility Requirement o In Bell Atlantic v. Twombly and Ashcroft v. Iqbal, the Court announced a requirement of plausibility for a complaint to survive a motion to dismiss. o Plausibility: Calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal agreement. o In Twombly, two consumers filed an antitrust class action alleging that the telephone companies agreed to not compete in each others territorial market areas for local telephone and Internet business, in violation of a federal antitrust statute. Under antitrust law, the defendants could only be held liable if they actually had an agreement not to compete. The complaint alleged numerous ways the defendant engaged in parallel conduct, and alleged in light of the parallel conduct, the defendants agreed not to compete with one other. The Court held that the complaint failed to meet the pleading standard of Rule 8, and the district court should dismiss the complaint for failure to state a claim. o The Court insisted that it was not really requiring a heightened level of pleading: We only require enough facts to state a claim to relief that is plausible on its face. Because the plaintiffs here have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed. o In Iqbal, the plaintiff needed to show that each defendant acted with

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discriminatory purpose towards him. The Court held that the complaint failed to meet the Rule 8 pleading standard because the allegation of purposeful discrimination was not conclusory. The Court emphasized that although a complaint need not include detailed facts, a plaintiff cannot simply assert conclusions such as discriminatory purpose without factual allegations to back up those conclusions. o In other words, a complaint had better not be so short and plain that it fails to include factual, nonconclusory allegations to support the essential elements of the claim. o Twombly and Iqbal convey an attitude of caution: discovery can be really expensive and burdensome, so unless the plaintiff provides enough facts in the complaint to show that the key allegations are plausible, were not going to let the plaintiffs launch the litigation. Complaints dont have to contain a lot of actual detail as long as they state a valid claim, but a plaintiff cannot rely on bare allegations of legal conclusions without alleging the facts on which those conclusions are based. The Courts recent cases warn us not to ignore the part of 8(a)(2) about showing that the pleader is entitled to relief. 3. Motions to Dismiss for Failure to State a Claim Rule 12(b)(6): To argue that the complaint is insufficient, a defendant makes a motion to dismiss for failure to state a claim. o It says to the complainant, So what? Even if what you say is true, that does not give you a valid legal claim.

a. Basis for Dismissing Complaint In general, the way to analyze a Rule 12(b)(6) motion is to see whether, accepting all of the plaintiffs allegations as true, it would entitle plaintiff to a judgment. o More than a legal conclusion, the complaint must tell the defendant that what the lawsuit is about by stating the basic circumstances that the plaintiff asserts as a basis for the relief demanded. There are several ways a complaint may fail, leading to a Rule 12(b)(6) dismissal. 1. A complaint may be inadequate because on the facts alleged, it simply does not state a valid legal claim. The pleader in other words, is not entitled to relief even if the allegations are true. Ex., Defendant used to be my friend, but last week said he wouldnt and it made 31

me very sad. 2. A complaint may fail because the allegations fail to meet a required element of the claim. Ex., If a complaint fails to allege damages or causation as require for a particular type of legal claim, the complaint could be dismissed for failure to state a claim upon which relief could be granted.

3. A complaint may fail because it alleges only a legal conclusions rather than stating the factual basis for the claim. Ex., A plaintiffs complaint alleges, as its entire statement of the claim, Defendant is liable to plaintiff for violating section 10(b) of the SEC Act.

4. A complaint may fail because it does allege specific facts, and those facts make it clear that the plaintiffs claim cannot succeed. 5. The complaint may fail to meet the plausibility test of Twombly and Iqbal. Even if a complaint gives notice of the basis for the lawsuit and even if it contains allegations about each element of the claim, it may be dismissed if its allegation of an essential element (such as the agreement in Twombly or the purposeful discrimination element in Iqbal) is merely conclusory and the complaint does not include enough factual allegations to show why that conclusion is plausible.

b. Dismissal With or Without Prejudice A dismissal with prejudice precludes the plaintiff from bringing the same claim again. Some courts call this a dismissal on the merits. A dismiss without prejudice has no claim preclusive effect. If a complaint is dismissed without prejudice, then the plaintiff can try again by filing a new complaint. o Courts sometimes refer to this as a dismissal with leave to amend or with leave to replead. Rule 41(b): If a court does not say whether a dismissal is with or without prejudice, certain dismissals lack of jurisdiction, improper venue, and failure to join an indispensable party are presumed to be without prejudice. o All other dismissals (including failure to state a claim), operate as adjudications upon the merits unless the court specifies otherwise. In other word, unless the court states that the dismissal is without prejudice or with leave to amend or similar words, then the dismissal is deemed to be with prejudice. 32

4.

Inconsistent Pleading While ethical and tactical concerns limit the use of inconsistent pleadings, Rule 8(d)(2) permits a party to set forth two or more statements of a claim or defense alternately or hypothetically, and state as many separate claims or defenses regardless of consistency. Because of this rule, a pleading cannot be dismissed simply because it includes allegations that are not consistent with each other.

Y.

Heightened Pleading
Congress has enacted statutes requiring heightened pleading in certain types of cases, such as fraud and civil rights cases.

Z.

Defendants Response
When a defendant has been served with a complaint, the defendant has a number of options. o Answer: May include denials and affirmative defenses. o Alternatively, the defendant can make a pre-answer motion, such as a motion to dismiss for lack of jurisdiction. Also, the defendant may assert claims of its own, whether as counterclaims, cross-claims, or third-party claims.

1.

Admissions and Denials The most basic response of all is the denial. A defendant may answer the complaint by saying that some or all of the plaintiffs allegations are untrue. Rule 8(b): A responsive pleading admits or denies each of the allegations in the complaint, and asserts the defenses to each claim. o The core component of a defendants answer is a series of statements in which the defendant answers each paragraph of the complaint by stating whether the defendant admits or denies the allegations contained in that paragraph. Any allegation thats not denied is deemed admitted.

Rule 8(b)(5): A party that lacks knowledge or information sufficient to form a belief about the truth of an allegation must so state, and the statement has the effect of a denial. Affirmative Defenses Affirmative defenses include but are not limited to: assumption of risk, contributory negligence, discharge, duress, failure of consideration, fraud, illegality, license, release, res judicata, statute of frauds, statute of limitations, waiver, and several more.

2.

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Affirmative defenses are waived if not pleaded, so defense attorneys must think carefully about all possible affirmative defenses before filing an answer. o In practice, however, if a party fails to plead an affirmative defense in its original answer, the party often can fix the problem by amending the answer.

3.

Motions to Dismiss and Other Motions on the Pleadings Any defense may be asserted in the answer, but certain defenses may be raised by motion if the pleader so chooses.

a. Motion to Dismiss Rule 12(b) Defenses: (1) Subject Matter Jurisdiction (2) Personal Jurisdiction o Unlike SMJ, waived if not asserted. (3) Venue o Unlike SMJ, waived if not asserted. (4) Process o Insufficient process means that something was wrong with the summons itself, such as misnaming the defendant or missing clerks signature. (5) Service of Process o If served improperly, the court lacks personal jurisdiction over the defendant and will be filed with a 12(b)(2) motion as well. (6) Failure to State a Claim (7) Failure to Join a Party o If a complaint fails to include a party that the defendant believes is essential to the fair resolution of the litigation, then the defendant may move to dismiss for failure to join an indispensable party.

b. Motion for a More Definite Statement Rule 12(e): If a complaint is unintelligible or missing critical information, a defendant can

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seek refinement or explanation. Infrequently used, as it allows the plaintiff to make the complaint stronger. Defendants prefer to move to dismiss under 12(b)(6).

c. Motion to Strike Rule 12(f): The defendant can move to strike portions of the complaint irrelevant, redundant, or scandalous matter. It can also be used by defendants as a smaller version of a 12(b)(6) motion, contending that certain aspects of the complaint fail to state a legally sufficient claim and therefore ought to be thrown out.

d. Motion for Judgment on the Pleadings 4. Rule 12(c): After the pleadings are completed a party may move for judgment on the pleadings as a matter of law. It resembles a 12(b)(6) if made by a defendant, save for the timing.

Waiver of Defenses If a defendant files an answer without filing a pre-answer motion, the defendant must include such defenses in the answer to avoid waiving them. In general, if you make a pre-answer motion, you must include all of your defenses at the same. o Rule 12(g): If you bring any Rule 12 motion, you may include any additional Rule 12 defense in the same motion. If you do mess up and realize your mistake promptly enough, you may be able to fix the problem by amending your answer to include the omitted defense, as under Rule 12(h)(1). Rule 12(h)(2): Ensures that indispensable party concerns can be raised later even if omitted from the defendants answer or pre-answer motion.

5.

Claims by Defendants In additions to the various responses defendants can make to a complaint, there are three types of claims defendants can make when theyve been sued: counterclaims, cross-claims, and third-party claims.

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Counterclaim: A claim that the defendant asserts against the plaintiff. Other than the fact that is asserted by a defendant, a counterclaim is just like a claim asserted in an original complaint and must comply with the pleading requirements of Rule 8(a). o Used to impose liability on the plaintiff.

Crossclaim: A claim asserted against a co-party. If a plaintiff sues multiple defendants, a defendant may assert a crossclaim against a codefendant. Under Rule 13(g), crossclaims are permitted only if they arise out of the same transaction or occurrence as the original claim. o Used to impose liability on co-defendants or to shift liability to them.

Third-Party Claim: Also known as impleader, is a device by which a defendant can bring in an additional party (a third-party defendant) and assert that if the defendant is held liable to the plantiff, then the thirdparty defendant should be liable to reimburse the defendant for some or all of what the defendant has to pay the plaintiff. o Rule 14: Third-party claims may be used only for claims such as contribution or indemnification, in which one party must pay another party who was held liable. o Used to shift liability to parties who had not originally been sued by the plaintiff.

RECAP: DEFENDANTS RESPONSE TO THE COMPLAINT 1) WRONG PLACE: Cant sue me here. 12(b)(1): Lack of SUBJECT matter jurisdiction. 12(b)(2): Motion to Dismiss for lack of PERSONAL jurisdiction. 12(b)(3): Improper Venue 12(b)(4): Service of Process Not Signed 12(b)(5): Improper Service of Process 2) SO WHAT?: 12(b)(6): Failure to State a Claim. Not a valid legal claim or not plead adequately (Twiqbal). Demurrer moving to dismiss. 3) HUH? 12(e): Motion for More Definite Statement. In NY called Bill of Particulars. 4) YOURE MISSING SOMEONE: Have to be another party included that is inexplicably linked. 19: When Certain Parties are Necessary 12(b)(7): Failure to Join a Party 5) NUH UH: Denials

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8(b): Answer 6) YES, BUT: Affirmative Defenses 8C: Lists affirmative defenses, but not all of them. ADDITIONAL REACTIONS 1) COUNTERCLAIM: Yeah, we did this, but you damaged me too. New claim for relief.13(a) & (b) 2) CROSS-CLAIM: Arises out of the same occurrence. Ex., Defendant1 sues Defendant2 13(g) 3) THIRD-PARTY CLAIM: Impleader. Defendant says there is someone else responsible for my liability. Defendant impleads third party. 14 *Can always move for multiple reasons. Ex., not negligent, have affirmative defense, and counter-claim.

AA. Amendment
Rule 15: Makes amending the pleadings a relatively easy process, and it is not uncommon for complex cases to have names like Seventh Amended Complaint or Fourth Amended Answer and Counterclaim. Two Reasons for Amending Pleadings 1. Amending the pleadings allows the pleader to avoid the pitfalls of deficient pleading. 2. Amending the pleadings permits the court to resolve the case on its merits if pretrial investigation uncovers facts that suggest additional claims or defenses 1. Amending the Pleadings Amendment as a Matter of Course: Often, party may amend its pleading without asking the courts permission or the other partys consent. o Rule 15(a): Allows a party to amend its pleading once as a matter of course before being served with a responsive pleading. o Similarly, if a defendant asserts a counterclaim, the defendant may amend the counterclaim as long as the plaintiff has not yet served a reply. o A defendant can amend an answer as a matter of course as long as you do it within 20 days, but not if the case is already scheduled for trial. Amendment by Consent: Any pleading may be amended if the adverse party consents to the amendment in writing. Amendment by Leave of Court: If its too late to amend as a matter of course, and if the opposing party wont consent, a party must ask the 37

courts permission to amend a pleading. The party makes a motion for leave to amend the pleading. o Rule 15(a): The court should freely give leave when justice so requires. 2. Essentially, it encourages judges to grant such motions by adding the words freely give.

Relation Back The hard part about amended pleadings is not really about the pleadings at all, but rather about the statute of limitations. o The question is If a claim would be time-barred under the statute of limitations, should a party nonetheless be allowed to amend its pleadings to assert that claim, as long as the original pleading was filed within the limitations period?

The party seeking to amend the pleading argues that the amended pleading should relate back to the date of the original pleading, and therefore does not violate the statute of limitations. Rule 15(c)(1)(B): Relation back of a claim is permitted if the amendment asserts a claim or defense that arose out of the conduct, transaction, or occurrence set out or attempted to be set out in the original pleading. o If the amended pleading closely tracks the original pleading, then the defendant cannot complain of inadequate warning to start gathering the relevant evidence. o The most problematic relation back situations involve amended pleadings that add a new party or change the name of a party. Courts are much more grudging about applying relation back to amendments that change the name of parties.

Rule 15(c)(1)(C): Governs relation back involving new parties. It lays out three requirements that must be met in order to get the benefit of relation back for an amendment that changes the party against whom a claim asserted. 1. The amendment must satisfy 15(c)(1)(B); that is, it must arise out of the same conduct or occurrence as the original pleading. 2. Within the 120-day period for service of process after the original pleading was filed, the new party must have known about the lawsuit so that it will not be at a disadvantage in defending the lawsuit. 38

3. It must be the case that within the same period, the new party knew or should have known that the action would have been brought against it, but for a mistake concerning the proper partys identity. In practice this means that if you failed to join a party within the statute of limitations, youre probably out of luck. Whatever the pleader does choose to plead must have at least some basis in law and fact. Rule 11: When you sign a pleading, motion, or other paper, or when you file it or present it to the court, you are certifying that it is not frivolous.

BB. Sanctions and Ethical Constraints


o If a lawyer or party violates this rule by presenting a paper with legally or factually baseless contentions, the court may punish the violator by imposing sanctions. Rule 11(b): The lawyer or party may not submit a pleading or other paper without first making a reasonable inquiry into the facts and law.

o The lawyer is certifying that the pleading, motion, or other paper: 11(b)(1). Is not being presented for improper purpose. Such as harassment, causing unnecessary delay, or needlessly increasing the cost of litigation.

11(b)(2). Claims and defenses have a nonfrivolous legal basis. 11(b)(3). Factual allegations have reasonable factual basis. 11(b)(4). Denials have reasonable factual basis. If a lawyer or party violates Rule 11, the court may impose sanctions such as a monetary penalty to be paid to the court, nonmonetary directives, or an order directing the violator to pay the other sides legal fees or expenses. Safe Harbor Provision: Rule 11(c)(2). Added to address the concern that Rule 11 motions had become a tactical game in which parties engaged in finger pointing to gain the courts favor and leverage in the litigation. Under the safe harbor provision, a party must serve a Rule 39

11 motion on the other party at least 21 days before the party may file the motion with the court. It means that parties cannot go crying to the court every time they think the other side did something baseless. So they serve the motion on the opposing party, wait at least 21 days, and if the challenged paper hasnt been withdrawn or corrected, they file the motion with the court. Savings Clause in Rule 11(b)(3): A party can assert a factual contention without evidentiary support if the contention will likely have evidentiary support after a reasonable opportunity for further investigation or discovery.

DISCOVERY
GOOD -Encourages settlements by bringing out more information. -Cuts down on private investigation. -Encourages disclosure/accuracy. -Narrows the issue. -Prevents dishonesty. BAD -Expensive/cost-prohibitive for certain types of cases. -Can result in injustice/more advantageous for financially stronger party.

CC. Discovery Tools


1. Disclosures Rule 26(a): Unlike interrogatories, depositions, and so on, the mandatory disclosure provisions require parties to disclose certain information to each other without even being asked. 1. Each party must disclose the name and contact information of every witness likely to have discoverable information that the disclosing party may use to support its position. 2. Each party must provide a description, by category and location, of all documents and electronically stored information that the disclosing party has and may use to support its claims or defenses. 3. A party seeking damages must provide a computation of each category of damages, along with the material on which the 40

computations are based. 4. The parties must disclose any applicable liability insurance policies. The idea behind Rule 26(a) is that if basic information would be requested and provided as a matter of course in any lawsuit, it is faster and cheaper to make the disclosure automatic rather than to require parties to plow through the request-and-response process of discovery. A judge usually issues a scheduling order at a scheduling conference within 90 days after the defendant files the answer and within 120 days after filing the complaint. o To formulate a discovery plan, the parties hold a discovery conference. The mandatory initial disclosures occur either at the discovery conference or within 14 days after. In addition to initial disclosures, Rule 26(a) requires expert disclosures and pretrial disclosures. These are mandatory, but they occur later in the litigation process as the parties get ready for trial. Expert Disclosures: Rule 26(a)(2) - If a party plans to use an expert witness at trial, then the party must disclose the identity of that expert to the other parties, along with a written report from the expert stating the experts opinion, qualifications, and other information. Pretrial Disclosures: Rule 26(a)(3) Shortly before trial, each party provides the others with a list of witnesses the party expects to call at trial, depositions, the party plans to present as evidence at trial, and documents, exhibits, and summaries of any other evidence they plan to offer.

2.

Interrogatories Rule 33: Permits each party to serve each other party with a limited number of interrogatories, and the responding party must answer in writing and under oath. o If the responding party has the answer within its knowledge or control, then it must provide that answer unless it asserts an objection such as irrelevance, privilege, or undue burden. o Rule 33 limits interrogatories to 25 questions, unless the parties stipulate otherwise or the court order that the number be 41

changed. Contention Interrogatories: A party can ask for all facts which support the other sides contentions, such as that the defendant acted negligently. Depositions Rule 30: Each party is limited to ten depositions, but like nearly all details of the discovery rules, these limits can be altered by stipulation or court order. You may depose a party simply by serving notice of the deposition, but to depose a witness who is not a party to the lawsuit, you need a subpoena to compel the persons attendance at the deposition. o You notice the deposition, by serving a deposition notice on the deponent altering them o the time and place of the deposition. In a deposition, an attorney poses questions to a witness and the witness answers those questions under oath.

3.

o Unlike an interrogatory, which gives the opposing lawyer time to phrase each answer in the least damaging way, the deposition allows you to get answers straight from the horses mouth. Furthermore, the lawyer can ask follow up questions. Rule 30(b)(6): If you dont know the name of a person who handles something youd like to depose them about, this rule allows you to send a deposition notice to the company describing the topics to be addressed in the deposition, and the company must identify and produce a deponent with the knowledge to speak about those topics.

4. Production of Documents, Electronically Store Information, and Things, and Inspection of Land Rule 34: Allows a party to inspect, copy, test, or sample items that are in anothers possession, custody, or control. Mostly, all Rule 34 requests are about getting documents and their electronic equivalents. o Any designated documents or ESI stored in any medium from which information can be obtained is subject to Rule 34 requests.

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Rule 26(b)(2): Specifically mentions that parties may refuse to provide ediscovery if the information is not reasonably accessible because of undue burden or cost, and gives the court discretion to order discovery from such inaccessible electronic sources upon a showing of good cause. o To determine whether there is good cause the court is to look to 26(b)(2)(C), as well as 1) the specificity of the discovery request; 2) the quantity of information available from other and more easily accessed sources; 3) the failure to produce relevant information that seems likely to have existed but is no longer available on more easily accessed sources; 4) the likelihood of finding relevant, responsive information that cannot be obtained from other, more easily accessed sources; 5) prediction as to the importance and usefulness of the further information; 6) the importance of the issues at stake in the litigation; and 7) the parties resources.

5.

Physical and Mental Examinations Rule 35: Permits physical or mental exams only with a court order based on a showing of good cause. o Unlike the other discovery tools, which can be used without making a motion to the court, a party must explain to the judge why a physical or mental examination is needed.

6.

Requests for Admissions Requests for Admissions allow one party to ask another party to admit specific facts, and the responding party must admit, deny, or state exactly why the party cannot truthfully admit or deny. o When used effectively, requests to admit narrows the issues in dispute by establishing certain facts as uncontested.

DD. Planning and Supplementation


1. Supplemental Responses Rule 26(e): A party who has made a disclosure under Rule 26(a) or who has responded to an interrogatory, request for production, or request for admission must supplement or correct its disclosure or response upon finding new information responsive to earlier discovery requests or realizing it made a mistake, unless the supplemental or corrective information has otherwise been made known to the other parties during discovery. Rule 26(b)(1): Sets out the basic scope of discovery and it is vast: The

EE. Scope of Discovery

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starting point for thinking about discovery is that if some piece of information is relevant, and if it does not fall within a legally recognized privilege, then that information is discoverable. o Proportionality and the work product doctrine further limit the scope of discovery, but the basic Rule 26(b)(1) standard relevant and not privileged should be your first step when thinking about whether certain information is subject to discovery. 1. For information to be discoverable it must be relevant, not work product, not privileged, and proportional.

Relevance The law of evidence defines relevance broadly: having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence. o To be relevant the evidence must have some bearing, however slight, on facts that have some legal consequence in the matter.

Rule 26(b)(1): Creates a two-tiered relevance inquiry, allowing normal discovery to proceed for information relevant to the claims or defenses, but requiring a court order for information relevant to the subject matter (more tangential information).

2.

Privilege a. Attorney-Client Privilege Protects confidential communications between a lawyer and a client for purposes of giving or receiving legal advice or service. o It protects communications from lawyer to client as well as from client to lawyer. o It extends to oral, written, and electronic communications. If a communications is privileged, then neither the client nor the lawyer can be forced to reveal what was said. Privilege just protects communications, not the underlying facts. o Ex., If a client in auto accident case tells his lawyer that he was looking at this cell phone when he got into the crash, neither the client nor the lawyer can be compelled to disclose that conversation because the communication is privileged. So you cant ask, What did you tell your lawyer about what happened? 44

But you have no objection on grounds of attorney-client privilege when someone asks your client, What happened?

When a party objects, Rule 26(b)(5)(A)(ii) requires the party to prepare a description (Privilege Log), of the withheld material that without revealing information itself privileged or protected, will enable other parties to asses the claim. The Work Product Doctrine Protects lawyers enormous amounts of work product created for purposes of litigation and trial. In Hickman v. Taylor, the Court held that statements made by witnesses to the defense attorney in a case were not discoverable because they were the attorneys work product. o It would be demoralizing the Court said for lawyers to be forced to turn over their work product to the other side, and it would discourage lawyers from doing their own work thoroughly and in writing.

3.

Added, and modified to the FRCP in Rule 26(b)(3): Defines the protected materials as documents and other tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative. o So, a lawyer doesnt need to turn over witness statements or describe what each witness said, but the lawyer cannot refuse to answer interrogatories about facts related to the issue, even if it comes from those interviews.

Work product only has qualified protection, not absolute protection. Materials that fall within the definition of work product may still be discoverable if they are relevant and not privileged, and if the requesting party has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means. Expert Witnesses: Rule 26(b)(4) draws a sharp distinction between testifying and nontestifying experts. o One may depose any testifying expert, but it is much tougher to get discovery from a nontestifying expert. Unless it would be practically impossible for the requesting party to obtain facts or opinions on the same subject matter by other means, the nontestifying experts opinions are not 45

discoverable. 4. Proportionality The burden of discovery should not be disproportionate to its benefit. Rule 26(b)(2)(C): Instructs judges to limit the frequency or extent of discovery based on this idea of proportionality. o If the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive, the judge must disallow the unwarranted discovery. The more drastic version of proportionality comes in a subsection of Rule 26(b)(2)(C) that tells the court to limit discovery if the burden or expense of the proposed discovery outweighs its likely benefit. o Based on this subsection, information may be nondiscoverable even if it is relevant and not privileged. Proportionality functions as an important limit on the general scope of discovery as announced in Rule 26(b)(1). o Judges must do a cost-benefit analysis that considers not only the burden of discovery, but also the amount at stake in the lawsuit and the importance of the discovery in resolving the issues. Hard-to-reach information may not be worth the trouble if the case is small and the information tangential, but if the stakes are high and the hard-to-reach information is key, a court will allow discovery even if it is quite burdensome.

FF. Discovery Enforcement


When there are objections to discovery requests, the lawyers confer with each other to try and work out their differences. When they cannot resolve their problems, motions to compel, motions for protective orders, and discovery sanctions come in handy.

D. 1 A Walk Through Discovery Procession


We Have a Discovery RequestWhat are the Various Options for the Responder? Motion for a Protective Order Rule 26(c). BUT, before you can move for a protective order you have to Confer with the other side regarding the request. Object. 46

Provide the Information. Fail to Respond/Refuse to Answer without a Specific Objection. Do not do this.

The Responder ObjectsWhat are the Various Options for the Requester? Confer with the other side, regarding the reasons for objections. Motion to Compel Rule 37. BUT, before you move, you must confer with the other side. Narrow/Withdraw Request in response to objection. The Responder Moves for a Protective OrderWhat are the Various Options for Requester? Litigate the Motion by submitting brief in opposition to the order. (File a Motion to Compel as a competing motion). Narrow/Withdraw Request. Confer to figure out a way to work out some agreement to get the documents. The Requester Moves to CompelWhat are the Various Options for the Responder? Litigate the Motion by submitting brief in opposition to the order. (File a Motion to Protect as a competing motion). Confer with otherside to discuss narrowing request. o The best way to handle discovery disputes, what judges hope happen, is that the parties handle it themselves. Provide the Request. 1. Motions to Compel and for Protective Orders Motion to Compel: When another party fails to comply with a discovery request, the requesting party may file a motion to compel. o A motion to compel asks the court to order the other party to provide discovery. o Governed by Rule 37. Motion for Protective Order: The responding party to a discovery request asks the court to order that certain discovery not be had or to order some other constraint on discovery. o Rule 26(c) permits a party or any person from whom discovery is sought to move for a protective order. The court is empowered to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.

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Protective orders also can serve to protect the confidentiality of discovery materials so that even if it is subject to discovery, it may be kept confidential and not revealed outside of the litigation. Discovery Sanctions If a party fails to disclose required information such as the names of witnesses or descriptions of relevant documents, Rule 37(c) imposes an appropriate punishment: the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless. 37(b) lists more severe discovery sanctions for parties who fail to comply with a court order. o When a party responds to interrogatories incompletely or evasively, or makes unwarranted objections to document requests, or refuses to answer certain questions at a deposition, the requesting party may not move for sanctions, but move to compel. If the court grants the motion to compel, and the responding party violates the order, then a Rule 37 motion for sanctions is proper.

2.

Rule 37(b) lists punishments for a court to consider imposing: directing that certain facts be taken as established for purposes of the action, prohibiting the disobedient party from making particular assertions or from using certain pieces of evidence, striking pleadings in whole or in party, staying the proceedings, dismissal, default judgment, and contempt of court.

JOINDER
To understand when litigants may or must join additional claims or parties, we look to the rules of joinder. o These rules establish procedural mechanisms for joining more than one claim in a lawsuit (joinder of claims), as well as for joining additional parties (joinder of parties). As a lawyer, you need to understand both when you may join additional claims or parties in a lawsuit (permissive joinder) and when you must do so (compulsory joinder).

GG. Joinder of Claims


1. Permissive Joinder of Claims Permissive Joinder of Claims: A plaintiff may assert multiple claims 48

against a defendant in one complaint. Rule 18(a): Permits joinder of claims even if the claims are utterly unrelated. o A party asserting a claim, counterclaim, crossclaim, or third-party claim may join, as independent or alternate claims, as many claims, as it has against an opposing party. Permissive joinder of claims are unlimited, a reflection of the thinking that, as long as they are in litigation, they may as well be allowed to assert whatever claims they have against each other at the same time.

2.

Rule 42(b): Judge can bifurcate the trial of the claims for case management issues always. Counterclaims The rules provide for permissive counterclaims in Rule 13(b) and compulsory counterclaims in Rule 13(a).

a. Permissive Counterclaims Rule 13(b): A defendant may assert, as a counterclaim, any claim that the defendant has against the plaintiff, even if it is completely unrelated to the plaintiffs claim. o Mirrors the reasoning in Rule 18(a)s unlimited permissive joinder of claims. Can provide good leverage in settlement negotiations, as the best defense is sometimes good offense. But you may want to withhold the claim if youre unhappy with the forum or timing.

b. Compulsory Counterclaims Rule 13(a): A pleading must state as a counterclaim any claim that at the time of its service the pleader has against an opposing party if the claim: (a) arises out of the transaction or occurrence that is the subject matter of the opposing parts claim; and (b) does not require adding another party over whom the court cannot acquire jurisdiction. o The word must is what makes this a rule of compulsory counterclaims. If the claim arises out of the same transaction or occurrence, then the defendant party must assert it as a counterclaim. o What makes it compulsory is claim preclusion.

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If the defending party fails to assert the transactionally related claim as a counterclaim, then the party will be precluded from asserting the claim later in a separate suit.

3.

13(a) compulsory counterclaims enhances efficiency, consistency, and finality (more on theses values in Preclusion). Crossclaims Rule 13(g): Permits crossclaims amongst co-parties as long as they are transactionally related to the claims already asserted in the action. In the case of co-defendants, crossclaims often involve claims for contribution or indemnification, in which one defendant asserts that if it is held liable the plaintiff, then the other defendant should have to pay the damages. o This type of crossclaim among co-defendants substantively resembles a third-party claim under Rule 14, but procedurally the third-party claim is used to bring in someone who has not already been made a party to the lawsuit.

Similarly, co-plaintiffs may assert crossclaims against each other. The federal rules treat crossclaims as purely permissive. How come co-parties may assert crossclaims only if they arise out of the same transaction? o Crossclaims create an additional axis of adversariness, creating an additional layer of complexity that is thought to outweigh the cost of efficiency when the crossclaims are unrelated to the same transaction.

HH. Permissive Party Joinder


Rule 20(a) makes it relatively easy to join parties, as long as the claims by or against them rise out of the same underlying circumstances. Rule 20(a)(1) explains when multiple plaintiffs may sue together: 1. When they assert relief arising out of the same transaction, occurrence, or series and 2. A common question of law or fact will arise in the action. If the first part is satisfied, it is unimaginable that the second part wouldnt be, but when doing your 20(a) analysis still point out (1) the transaction or occurrence that gave rise to the claims by or against the various 50

parties, and (2) at least one common question that will arise with regard to each of the parties. Determining whether claims arise out of the same transaction or occurrence can be trickier than it seems. Courts often describe it as a logical relationship test:

o Are the claims by or against the parties closely enough related that it makes sense to package them together for trial? Framing the Issue: In Mosely v. General Motors Corp., the district court granted defendants motion to sever, because the plaintiffs claims some for race discrimination, others gender discrimination were too varied.

o The court of appeals reversed, stating that all of the plaintiffs alleged a companywide policy of discrimination, so they satisfied the test for joinder under Rule 20. The district court viewed the transaction or occurrence as each individual plaintiffs termination, nonhiring, or nonpromotion, whereas the court of appeals viewed the transaction or occurrence as the alleged companywide policy. Rule 20 does not place any cap on the number of parties who can be joined, as long as they satisfy the two-part test, so permissive joinder of plaintiffs can be massive. Permissive joinder not only allows multiple plaintiffs to sue together, but also allows plaintiffs to sue multiple defendants, and multi-defendant cases are very common. Consolidation: Rule 42(a) empowers a court to bring multiple cases together for a joint trial or other joint proceedings: If actions before the court involve a common question of law or fact, the court may (1) join for hearing or trial any or all matters at issue in

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the actions; (2) consolidate the actions. o The minimal requirement leaves the consolidation decision almost entirely to the courts discretion. o For consolidation however, all actions must be pending in the same court. Separation: Under 42(b),a court may order separate trials of any claims, crossclaims, counterclaims, third-party claims, or even of separate issues, for convenience, to avoid prejudice, or to expedite and economize. Rule 20(b) reminds the court, in the context of permissive party joinder, that even if a party is properly joined under the rule, the court retains the power to order separate trials.

o Judges have significant discretion to consolidate actions that were brought separately or to separate claims that were brought in a single action.

II.

Compulsory Party Joinder


Compulsory Party Joinder Rule dictates who must be joined in an action and empowers the court to order joinder of such a required party. o The rule also offers guidelines for determining whether a case should be dismissed if such a required party cannot be joined. Rule 19 establishes a two-step process for analyzing compulsory party joinder. 1. Whether a person must be joined. This is often referred to as whether the person is a required party or necessary party under Rule 19(a). o If so, the court can order the person to be joined. But, what if the person is a required party under Rule 19(a), but cannot be joined because of the courts jurisdictional limits? Then ask.

2. Whether the person is so critical to the lawsuit that, in the persons absence, the lawsuit should be dismissed. Keep in mind that compulsory party joinder under the federal rules is 52

very narrow; so do not read it too expansively. 1. Required Parties Rule 19(a): Persons required to be joined if feasible and instructs the court to order their joinder. o A required party, depending on the circumstances, may be aligned either as a plaintiff or as a defendant. Required parties are those who are so inextricably linked to the case that their absence could create real problems. The rules spells out three circumstances under which a person will be deemed a required party. As long as one is satisfied the person is a required party, but this example arguably satisfies all three, so it is best to understand it within this hypothetical. o Ex., Employees Andy and Benny work for Carvel and seek the same promotion, which can only be given to one of them. Their contracts say the promotion is based on seniority, but they disagree over the application of the seniority rule. Andy claims he is entitled to the promotion, but the company says its obligated to give the promotion to Benny. Andy sues Carvel, seeking injunctive relief to obtain the promotion. Carvel moves for an order that Benny must be joined as a required party under Rule 19(a). Rule 19(a)(1)(A): Requires joinder if in that persons absence, the court cannot accord complete relief among existing parties. Because Andy seeks injunctive relief and the promotion is a single position that cant be held by both Benny and Andy, Andy cannot get complete relief unless Benny is bound by a ruling that the promotion belongs to Andy.

Rule 19(a)(1)(B)(i): Requires joinder if that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the persons absence may, as a practical matter, impair or impede the persons ability to protect the interest. Benny certainly claims an interest relating to the subject of the action the promotion. o And as a practical matter, the action may impair Bennys ability to protect that interest, because 53

if the court rules that Andy is entitled to the promotion, there is a significant risk the company will remove Benny from the position. Rule 19(a)(1)(B)(ii): Requires joinder if that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the persons absence may leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest. Suppose the case goes forward without joining Benny and the court orders the employer to give Andy the job. Benny was not a party to the lawsuit, so Benny is not legally bound by the judgment. Benny brings a separate lawsuit and obtains a judgment ordering Carvel to give the position to Benny, not Andy. o The two judgments would place Carvel in an untenable position. One judge told Carvel to give the single position to Andy, while the other told Carvel to give the position to Benny. In the language of Rule 19(a)(1)(B)(ii), disposing of the action in Bennys absence would leave Carvel subject to a substantial risk of inconsistent obligations. Inconsistent doesnt mean if for instance, Andy wins in a suit for employment discrimination and Benny doesnt. o Rather it means the type of impossible situation in which a party may be ordered to do X and also to not do X. Multiple victims injured by a defendants negligence are not required parties in each others lawsuits.

o Nor are multiple consumers defrauded by a business, or multiple investors who lost money on securities based on an issuers misrepresentation, or multiple victims of a civil rights violation, and so on. May they bring their claims in a single action against the defendant? Sure, but thats permissive joinder and up to them, unless under Rule 19(a) they meet the test for required parties. 54

2.

In Temple v. Synthes, the Court set forth a clear rule: joint tortfeasors are not required parties.

Indispensable Parties If a court finds that a person is a required party, the court may order that person be joined. But what happens when a required party cannot be joined? o There are two reasons why it might be impossible to join an otherwise required party in federal court: personal jurisdiction and subject matter jurisdiction. Recall Rule 4(k)(1)(B) expands a federal courts jurisdictional reach for joining parties under Rule 19. But if a party cannot be served within 100 miles of the court and otherwise is not subject to the courts personal jurisdiction, then joinder is impossible. Similarly, if subject matter jurisdiction is based on diversity of citizenship and joinder of the party would destroy complete diversity, then the court cannot order the party be joined.

If the absent party is needed under the Rule 19(a) analysis, but cannot be joined because of the jurisdictional barrier (we must, but we cant), the courts choices are to go forward without the required party or to dismiss the action. o Rule 19(b) instructs the court to determine whether, in equity and good conscience, the action should proceed among the existing parties or should be dismissed. It forces the judge to make a hard decision - would it be better to go forward with the case to do at least some justice, or would it be so unjust to proceed in the partys absence that its better not to adjudicate at all?

Rule 19(b) lists four factors for the court to consider: (1) To what extent might a judgment be prejudicial to the parties or to the absent person? (2) To what extent can relief be shaped to avoid prejudice? o Ex., if the court can minimize the prejudicial impact by awarding money damages instead of injunctive relief, then dismissal may be unwarranted. (3) Would a judgment rendered in the persons absence be adequate? 55

o If the judgment would not provide the relief sought, then it may make little sense to proceed in the persons absence. (4) Would the plaintiff have an adequate remedy if the action is dismissed? o Dismissal may be the right option if the plaintiff can bring the action in a different forum. o If the obstacle to joinder was diversity jurisdiction, can all parties be joined in state court? If the obstacle was personal jurisdiction, can all of the parties be joined in a different state? If so, then the court may dismiss so that all of the required parties may be joined in a single action elsewhere.

Compulsory Party Joinder Analysis First, determine whether the absentee is a required party. (Rule 19(a)) o 19(a)(1)(A): If the case proceeds without the person, is complete relief impossible among those already parties? o 19(a)(1)(B)(i): If the case proceeds without the person, would a judgment impair the absentees interests? o 19(a)(1)(B)(ii): If the case proceeds without the person, is there a substantial risk of inconsistent obligations? If the answer to these three questions is no, then the person need not be joined. If the answer to any of them is yes, then the person is a required party and must be joined if feasible

If the absentee is required, then proceed to determine whether joinder is feasible. o Does the court have personal jurisdiction over the person? Apply the jurisdictional analysis. Keep in mind the extended reach of federal courts over Rule 19 parties pursuant to Rule 4(k)(1)(B). o Would the court retain subject matter jurisdiction if the person were joined? Apply the diversity jurisdiction analysis to determine whether joinder would destroy complete diversity. If the answer to both of these questions is yes, then joinder is feasible, and the party must be joined. The court may 56

order joinder if needed. If the answer to either of them is no, then joinder is not feasible, and the party may not be joined. The court then must decide what to do

If the party cannot be joined, then proceed to determine whether the action should be dismissed. (Rule 19(b)) o In the interests of justice and equity, does it make more sense to proceed without the absentee, or not to proceed at all? o Four factors: Extent of prejudice to parties and absentee. Possibility of minimizing prejudice. Whether judgment would be adequate. Whether plaintiff would have remedy if dismissed.

JJ.

Third-Party Claims
With a third-party claim, a defendant joins a new party the third-party defendant and asserts a claim against that party for indemnification or contribution in case the defendant is held liable to the original plaintiff. o Often referred to as impleader the defendant impleads a thirdparty defendant.

Rule 14: A defending party may, as third-party plaintiff, serve a summons and complaint on a nonparty who is or may be liable to it for all or part of the claim against it. Whereas counterclaims and crossclaims involve only joinder of claims, the third-party claim constitutes a type of party joinder because it adds a new party to the litigation. Intervention is the procedural mechanism by which someone seeks to become a party to an action that has already commenced. o Although the plaintiff did not join the person as a plaintiff or as a defendant, the person desires to be part of the lawsuit and therefore intervenes in the action.

KK. Intervention

Unlike with required parties, where its the defendant who drags the outsider into the litigation, with intervention its the outsider who wants to jump in. 57

Mostly, outsiders to a lawsuit would want to jump in if they have some substantial interest that may be harmed by the outcome of the litigation and they cannot trust any of the current parties to protect their interest. Rule 24 divides intervention into intervention of right and permissive intervention. o If a would-be intervenor satisfies the requirements for intervention of right under Rule 24(a), then a court must allow the party to intervene. o If the would-be intervenor satisfies Rule 24(b), then it is up to the court whether to permit the party to intervene.

1.

Intervention of Right Rule 24 lists two bases for the right to intervene. a. If a federal statute grants the right to intervene, then of course the court must allow intervention in accordance with the terms of the statute. b. More importantly, the rule grants a right to intervene when the applicant claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movants ability to protect its interest, unless existing parties adequately represent that interest. Similar to required party language. o For Rule 19 its an outsider whose interest is at stake and who therefore must be joined if feasible. With Rule 24, its an outsider whose interest is at stake, and who therefore must be allowed to intervene.

Courts usefully describe Rule 24(a)(2) as establishing a three-part test: (1) an interest in the action, (2) a risk that the action may impair or impede that interest, and (3) no current party who adequately protects that interest. o The intervenors interest must be a legally protectable interest often, but not always an economic interest of some sort and not merely a moral or political concern about the issues in the lawsuit.

2.

Permissive Intervention Unlike permissive counterclaims, joinder of claims, and permissive party joinder which refers to the partys discretion, permissive intervention

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refers to when a court may permit intervention at the courts discretion. Under Rule 24(b), a court may permit a person to intervene in an action when an applicant has a claim or defense that shares with the main action a common question of law or fact. o Similar to Rule 42(a)s requirement for consolidation: Both permissive intervention and consolidation set up this bare minimum requirement and then leave the court wide discretion to decide whether it would make sense to consolidate or let another party join the action by intervening.

3.

Timeliness Rule 24 does not specify the time limit for applying to intervene, which is noteworthy since dozens of other ultra-specific time limits exist in the FRCP. o Instead Rules 24(a) and 24(b) each begin with On timely motion So, once you realize that intervention is warranted be sure to file the application promptly.

LL. Interpleader
Interpleader: An action brought by a stakeholder against multiple claimants to allow a stakeholder to obtain a resolution that will bind all of the known claimants. o It is used when someone (the stakeholder) is holding something (the stake) that others (the claimants) claim. It could be an insurance company holding the proceeds of an insurance policy and facing multiple persons claiming to be the legitimate beneficiary. The stakeholder needs to know whether it must give the stake to one of the claimants, and if so, to whom.

Interpleader provides the procedural mechanism by which the stakeholder can bring an action against the claimants and thereby obtain a judgment that will be binding on all of them. Rule Interpleader Rule 22: Rule interpleader is the FRCP rule that simply establishes a procedural mechanism for interpleader in federal court.

1.

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2.

Statutory Interpleader 28 U.S.C. 1335 alters the requirements for federal subject matter jurisdiction from $75,000 to $500 and instead of requiring complete diversity between plaintiffs and defendants, it requires only minimal diversity among the claimants themselves (one claimant of diverse citizenship from another). 28 U.S.C. 2361 grants nationwide personal jurisdiction for statutory interpleader. Also, 28 U.S.C. 1397 permits a statutory interpleader action to be brought in any district where at least one claimant resides. o By reducing the jurisdictional obstacles to through joinder, statutory interpleader tries to make good on the promise of the interpleader device to allow a stakeholder to obtain a resolution that will bind all of the known claimants.

MM. Class Actions


1. A Different Kind of Joinder Class actions are representative litigation. In a class action, a party sues on behalf of himself and on behalf of all others who are similarly situated. o When a class action reaches judgment, the judgment is binding on all the class members so long as they were adequately represented. Why would the law allow such a thing that runs contrary to all of our usual notions of autonomy, consent and participation in civil procedure? Efficiency, consistency, and empowerment.

Because class actions bind persons who may not have participated in the litigation, the law imposes a number of special procedures to protect the interests of class members. 1. A case does not proceed as a class action unless the court certifies the class. 2. The court has the power to appoint the lawyer for the class and the court has power over the class counsels fees. 3. Settlement of a class action requires court approval. 4. In most money damages cases, class members get notice and have the right to opt out of the class action. 60

5. A class action is binding on the class members only if they were adequately represented. 2. Rule 23(a) Prerequisites Filing a class action complaint does not create a class action; it merely creates a putative class action that the plaintiff hopes will be certified. The only thing that creates a class action is class certification. When a party moves to certify the class, the judge must decide whether the case meets the class certification requirements of Rules 23(a) and 23(b). o For class certification, a class action must meet all four of the prerequisites stated in Rule 23(a): numerosity, commonality, typicality, and adequate representation. In addition class certification requires that the class meet the requirements of at least one of the class action categories identified in Rule 23(b). Numerosity: Rule 23(a)(1) requires that the number of class members be so large that joinder is impracticable.

o While no magic number exists, in general classes in the hundreds usually meet the numerosity requirement, while classes below 40 rarely meet the requirement. Commonality: Rule 23(a)(2) requires at least one common question of law or fact.

o This is the same requirement for permissive joinder under Rule 20. In most class actions, the commonality requirement should be easy to meet. Typicality: Rule 23(a)(3) requires that the named partys claim be typical of the class. The class representative should not be an outlier. Adequacy of Representation: Rule 23(a)(4) is the most fundamental requirement of them all. For class certification, the class representative or representatives must adequately represent the interests of the entire class. The adequacy requirement transcends Rule 23. Without adequate representation, a class action would 61

violate the constitutional guarantee of due process. In the landmark case of Hansberry v. Lee, the Court held that a class action judgment can bind the members of the class consistent with due process, only if they were adequately represented. 3. Rule 23(b) Categories The categories are significant not only for class certification, but also because different procedural requirements attach to them. o In particular Rule 23(b)(3) class actions have a stringent notice requirement and give class members the right to opt out, while (b) (1) and (b)(2) class actions do not permit opt-outs and carry a more flexible notice provision. Because they do not allow opt-outs, class actions under Rule 23(b)(1) and 23(b)(2) are sometimes called mandatory class actions, in contrast to Rule 23(b)(3)s opt-out class actions.

a. Rule 23(b)(1) Class Actions Actually includes two subcategories of class actions, (b)(1)(A) and (b)(1)(B). o The main thing they have in common is that their language and logic strongly resemble the compulsory party joinder analysis of Rule 19(a). Rule 23(b)(1)(A) permits class certification if individual adjudications would create a risk of incompatible standards of conduct for the defendant. o Ex., A company has issued a bond owned by thousands of investors, and an investor sues the company for a declaratory judgment that the bond may be converted to common stock. It makes no sense to address the issue individually, because if the security is convertible to common stock, then it must be so for all investors. Without a class action, the company could face inconsistent rulings and wouldnt know how to treat the security. 23(b)(1)(A) class action permits a single adjudication or settlement that applies to all the investors who own that security.

Rule 23(b)(1)(B) permits class certification if individual adjudications might impair the ability of other class members to protect their own interests. o The typical (b)(1)(B) class action involves a limited fund, that for example, has a large number of individuals with claims to money held in a trust, and the maximum amount available for all of the claims is the amount in the trust. AS a practical matter, individual adjudications for some of the claimants would limit the amount of money left for the remaining claimants and might even exhaust all funds.

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The 23(b)(1)(B) class action permits a single adjudication or settlement that attempts to deal fairly and consistently with all of the claimants.

In 1999, the Court imposed strict requirements for limited fund class actions, emphasizing that they may be certified only if the fund is clearly inadequate and the entire fund is applied to paying the claims.

b. Rule 23(b)(2) Class Actions Some class actions seek injunctive or declaratory relief rather than money damages. Most notably, civil rights class actions seek prison reform, school desegregation, voting rights enforcement, and other types of institutional reform. Rule 23(b)(2) permits certification of a class action when the defendant has acted with respect to the entire class so that injunctive or declaratory relief is appropriate respecting the class as a whole. Courts agree that for 23(b)(2) class certification, the class must seek predominantly injunctive or declaratory relief, but they disagree about how to determine when money damages become too prominent to be permissible.

c. Rule 23(b)(3) Class Actions Rule 23(b)(3) permits a class action if common questions predominate and if the court finds that a class action is the superior way to adjudicate the controversy. o For the most part, class actions for money damages whether they involve antitrust, securities, product liability, consumer fraud, or other claims are handled under Rule 23(b)(3). Because money damages class actions seem less necessary than (b)(1) and (b)(2) class actions, Rule 23(b)(3) adds the two requirements that define this category: predominance and superiority. 1. The Court must find that questions of law or fact common to class members predominate over any questions involving only individual members. Common questions often involve the defendants conduct and classwide defenses, while individual questions often relate to the individual class members causation and damages as well as individual defenses such as comparative fault.

2. The Court must find that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. One important factor is the class members interests in individually controlling their cases. o If each claim involves high enough stakes that individual class

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members might pursue the claims themselves, a court is less likely to find superiority, in contrast to cases where each claim is too small to make an economically viable individual lawsuit. The rule also instructs courts to consider the likely difficulties in managing a class action. If the court cannot see how it will be able to manage the case if it gets to trial, then the court may reject class certification.

The predominance and superiority inquiries often overlap. o Ex., If the class action would require the court to apply the laws of different states to different class members, the court may find that the various laws are individual issues and thus reject predominance, and the court may also find that applying the various laws would be unmanageable and thus a class action is not superior. o Ex., if the class would require individualized determinations of causation, the court may find the common issues do not predominate, and also find that the individual causation analysis makes the class action an inferior way to handle the dispute. Remember that unlike (b)(1) and (b)(2) class actions, Rule 23(b)(3) class actions give class members the right to exclude themselves from the class, or opt-out.

4.

Jurisdiction in Class Actions a. Subject Matter Jurisdiction For federal question jurisdiction, the analysis is identical to nonclass cases. o Plenty of class actions arise under federal law such as securities, antitrust, and civil rights - and for those cases federal courts possess subject matter jurisdiction under 1331. For basic diversity, under 1332 (a), courts look only at the citizenship of the named class representatives, not every single class member. o In a nationwide suit against a New York defendant, as long as none of the named representatives are citizens of NY, diversity is satisfied. Further, under 1332(a), at least one class representative must individually meet the $75,000 amount-in-controversy requirement. o For other class members that do not, the court can exercise supplemental jurisdiction over those claims.

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The Class Action Fairness Act (CAFA) dramatically expanded federal court jurisdiction over class actions, permitting federal jurisdiction over class actions based on minimal diversity and over $5 million aggregate amount in controversy (rather than over $75,000 for each individual).

b. Personal Jurisdiction In Phillips Petroleum v. Shutts, the Court reasoned that because class members are similar, but not identical to ordinary defendants for purposes of personal jurisdiction, the minimum contacts test does not apply. o Rather a court may enter a judgment that binds absent class members as long as certain due process requirements are met: notice and an opportunity to be heard, the right to opt out, and of course, adequate representation. This ruling enables courts to resolve nationwide class actions without worrying about whether every class member has minimum contacts with the state.

5.

Class Action Settlements Class action settlements require courts approval, unlike most settlements which usually require only the parties agreement. The absent class members will be bound by a settlement, even though they did not agree to it. Therefore, the class action rule gives the judge the responsibility to protect the interests of absent class members in the settlement. Rule 23(e) requires that the court hold a hearing to determine whether the proposed settlement is fair, reasonable, and adequate. o Class members must get reasonable notice of the proposed settlement, and they may voice any objections. When the court approves a proposed class action settlement, that outcome becomes a judgment of the court. An approved class action settlement is binding on all of the parties, including the class members.

In some cases, the parties negotiate a settlement even before seeking class certification, in cases known as settlement class actions or settlement-only class actions. o The parties ask the court to certify a class action solely for 65

purposes of the settlement they already negotiated. o Simultaneously, they ask the court to approve the class settlement they negotiated but only if the class is certified. They arise when a defendant faces widespread potential liability and seeks to dispose of the entire dispute within a single massive settlement. As long as the settlement class action is fair under Rule 23(e) and the court finds the class meets the requirements of Rule 23(a) and 23(b) for class certification, a court may approve the settlement class action.

SUMMARY JUDGMENT AND PRETRIAL ADJUDICATION


NN. Summary Judgment
Summary Judgment allows a court to decide a case before trial based on a determination, as a matter of law, that only one side could reasonably prevail. Get the Lingo Right: o Burden of Persuasion: For trial purposes, the plaintiff bears the burden of persuasion as to each element of the claim. o Burden of Production: For Summary Judgment purposes, we are talking about Burden of Production. The burden also belongs to the plaintiff, and that party has to produce evidence sufficient to meet each element of the claim, otherwise as a matter of law, the plaintiff loses. It must be enough so that a reasonable jury could find in plaintiffs favor. 1. The Summary Judgment Standard Rule 56(c): The judgment sought should be rendered if the pleadings, the discovery, and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to a judgment as a matter of law. For a plaintiff to win summary judgment, the plaintiff must be able to establish every element of the claim and show that if the case were to go to trial, no reasonable jury could find for the defendant. For a defendant to win summary judgment, the defendant must show that the plaintiff does not have sufficient evidence to raise a genuine issue as to any element of the claim. 66

o In this sense, this is easy the defendant need only show plaintiffs failure as to a single element of the claim. o But in another sense, showing a lack of genuine issue is quite hard the defendant must show that the plaintiffs evidence is so utterly lacking that no reasonable jury could find for the plaintiff on that element of the claim. Courts deciding summary judgment cases often talk about viewing the evidence in the light most favorable to the nonmoving party. In Celotex Corp. v. Catrett, Celotex argued that there was no evidence that the plaintiffs husband was exposed to their asbestos; in other words, even if he died because of asbestos exposure, it could have been another companys product. o Celotex moved for summary judgment and attached a copy of an interrogatory that asked the plaintiff to identify any evidence that her husband was exposed to Celotex asbestos and plaintiffs response failed to name any witnesses or other evidence. o Plaintiff argued that the defendant had not proved that Mr. Catrett was not exposed to Celotex asbestos and therefore, there was a genuine issue of material fact. The Court decided that the defendant need only point out the plaintiffs lack of evidence, because the plaintiff bears a burden of production: that is, the burden of producing enough evidence so that a reasonable jury could find in the plaintiffs favor.

2.

Summary Judgment Motion Practice The party moving for summary judgment must file the motion with the court and serve the motion on the other parties. The notice of motion notifies the court and other parties that the movant seeks summary judgment. The memorandum of law, a.k.a., the brief, contains the legal argument in favor of granting the motion. And along with the motion and brief, the moving party almost always includes attachments, pieces of evidence to show why the court should grant the motion. o The nonmoving party responds with a memorandum of law in opposition to summary judgment, plus attachments to show why summary judgment should not be granted. The moving party may submit a reply brief, and the court may hold a hearing for oral argument on the motion. 67

Unlike a Rule 12(b)(6) motion to dismiss for failure to state a claim, summary judgment looks at evidence. o The Rule 12(b)(6) motion says to the judge, the other party has not stated a legally valid claim (or defense). Just look at the pleadings and youll see that we have to win. o The summary judgment motion says to the judge, The other party does not have the evidence to establish its claim (or defense). Just look at the evidence and youll see that we have to win.

In Celotex, the Court spoke of summary judgment after adequate time for discovery, and judges do not like to grant summary judgment before the nonmoving party has had enough opportunity to gather information. A party responding to a summary judgment motion has one additional weapon to consider the cross motion for summary judgment. o Cross-motions for summary judgment present the possibility that the judge may decide the case either way as a matter of law.

3.

Partial Summary Judgment If certain parts of claims or defenses are established or rejected clearly enough to meet the summary judgment standard, the court may grant partial summary judgment on those issues. There are three basic versions of partial summary judgment: 1. Rule 56(a) and (b) state that a party may move for summary judgment on all or part of the claim. For instance, a defendant can move for summary judgment for the punitive damages issue, but not the compensatory damages issue.

2. Rule 56(d)(1) instructs judges that if summary judgment is not rendered o the whole action, the judge should, to the extent practicable, determine what material facts are not genuinely at issue. Summary judgment may reduce the number of factual issues for trial, even if it does not fully resolve any claims. 3. Rule 56(d)(2) permits a court to grant summary judgment on liability alone, even if there is a genuine issue on the amount of damages. Ex., if summary judgment found the defendant liable, the 68

case would then proceed to trial only to dispute the extent of the plaintiffs harm and the jury would render a verdict on the amount of damages.

OO. Voluntary Dismissal


Voluntary dismissal is exactly what it sounds like, the plaintiff voluntarily dismisses the lawsuit. Rule 41 declares that the first voluntary dismissal is without prejudice, so that plaintiff may then refile the same claim without a problem. If the plaintiff decides for a second time to voluntary dismiss his case, it is with prejudice, precluding the party from bringing the claim a third time.

PP. Default
If the defendant fails to move forward, the court will grant judgment in favor of the plaintiff, in other words default. Under Rule 55, default involves a two-step process. 1. The court clerk enters the default, which is basically an administrative notation that the defendant has failed to plead or otherwise defend. 2. After the entry of default, the plaintiff requests a default judgment by applying either to the court clerk or to the judge. The clerk enters the default judgment at the plaintiffs request, only if the amount of damages is a sum certain or sum that can be made certain by computation.

PRETRIAL ADJUDICATION PROCEDURAL DEVICE/BASIS FRCP

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Adjudication on the Pleadings Pre- Answer Motion to Dismiss Lack of subject matter jurisdiction Lack of personal jurisdiction Improper venue Insufficient process Insufficient service of process Failure to state a claim Failure to join a party Forum non conveniens Motion for judgment on the pleadings Summary judgment Voluntary dismissal Involuntary dismissal Noncompliance with rule or order Default judgment Adjudication as Punishment Default or dismissal as an extreme sanction for baseless or improper assertions Default or dismissal as an extreme discovery sanction 11 37 41(b) 55 12(c) 56 41(a) 12(b) 12(b)(1) 12(b)(2) 12(b)(3) 12(b)(4) 12(b)(5) 12(b)(6) 12(b)(7); 19

DISPUTE RESOLUTION

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Owen M. Fiss, Against Settlement o Really powerful idea for the reason that we have public dispute resolution is that justice sometimes needs to be done by the courts o Doesnt like settlement Power party may be able to influence One party may need damages immediately and enticed to settle The poorer party might be forced to settle because he does not have the resources to finance the litigation o COURTS SHOULD BE DOING IT

Ways to Resolve Disputes Litigation: Process of lawsuit in a court, adjudicated by a judge. Litigation can be slow/expensive It is a public process, uses non-expert decision making (have to know a lot of areas of law at large) Litigation that results in adjudication tends to be a winner take all situation (which is not usually the best situation). Adversarial Settlement: Deal between the parties in which the defendant offers to pay plaintiff X amount of money in exchange for plaintiff to release the claim. Negotiation Mediation: Facilitated negotiation. When a third party neutral tries to help the parties reach an agreement. Arbitration: Asking someone to decide the dispute. Similar to mediation, you bring in a third person, BUT the arbitrator decides the dispute. Usually pursuant to a contract. Avoids costs of litigation, can design own process, and get an arbitrator that is an expert in this area. Can have rules that look a lot like litigation. Under the Federal Arbitration Act, arbitration is binding and can be court enforced. Other Dispute Mechanisms for Facilitating Settlement Summary Jury Trial: Two parties have a dispute, one party files a lawsuit and there are statutes in some courts that allow the court to pull in a jury that is used for a mock jury. There is a moot-court essentially, a shortened version of the case. Then the jury issues a mock verdict. But its not binding, rather it facilitates settlement. Mini-Trial: Bring the decision-maker from both parties and have them sit as the jury. Then have the lawyers present an abbreviated version of the case. Hopefully leads to a facilitation of settlement. Settlement and ADR Rule 16(a)(5): Purposes of a Pretrial Conference. One pretrial conference purpose is to facilitate settlement. 71

Rule 16(c)(2)(I): Authorizes the court to take appropriate action with respect to settling the case and using special procedures to assist in resolving the dispute when authorized by statute or local rule. Rule 26(f)(2): Conference Content; Parties Responsibilities (in Discovery rules section). In conferring, the parties must consider the nature and basis of their claims and defenses and the possibilities for promptly settling or resolving the case. Rule 68: Offer of Judgment. Allows defendants to make formal offers to have judgment entered against them, with the consequence that if a claimant does not accept the offer and does not do better in the end, the plaintiff is liable for the defendants post-offer costs usually not including attorney fees. The idea is to both encourage defendants to make serious settlement offers and to give plaintiffs an incentive the prospect of having to pay post-offer defense costs, even if they win but dont do better than the offer to take defense offers seriously. It has been relatively little used and consequently ineffective.

TRIAL
QQ. Pre-Trial Case Management
Rule 16: Pretrial Conferences; Scheduling; Management. 16(b): Scheduling Order. Except in certain excluded cases, the district judge must issue a scheduling order after receiving the parties report or after consulting with the parties attorneys. o The order must limit the time to join other parties, amend the pleadings, complete discovery, and file motions. o The order may also modify the timing of disclosures, the extent of discovery, provide for disclosure of discovery, set dates for pretrial conferences and trial, and include other appropriate matters (16(b)(3)(B)(vi). May only be modified for good cause and with the judges consent. The judge has the power to sanction a party or attorney who fails to obey the scheduling order. Amendments gave authority to consider the use of ADR methods to resolve the parties dispute. ADR Act of 1998: Requires each federal district to adopt by local rule, some sort of ADR program, which in some situations can include mandatory litigant participation. 72

Rule 16(e): Final Disclosures - The Final Pretrial Order After the completion of discovery, the trial court may (and most often does) hold a final pretrial conference. It focuses on the conduct of the trial. Most judges insist that before the final pretrial conference, the parties submit a joint trial plan or proposed final pretrial order that includes some or all the following elements: o The stipulations of law and fact on which all parties agree, a statement of the remaining disputed issues of law and fact that will form the basis of the trial, a list of witnesses that each party may call, the deposition excerpts that a party proposes to use, a list of documents that each party proposes to introduce in evidence, and the objections, if any, to the opposing parties witnesses, deposition excerpts, or documents. These essentially distill the lengthy process of discovery the legal issues, the evidence, and the witnesses that emerge from the threshing floor of pretrial. Final pretrial orders can be modified only to prevent manifest injustice. Rule 16(f)(1)(C).

RR. Jury Trial


1. Right to a Jury Trial The basic rule: A party in a federal civil case has a right to a jury trial if the same case would have been tried by a jury in 1791, the year the Seventh Amendment was ratified. A tort claim or breach of contract claim for money damages, for example, carries a right to a jury trial. Those cases would have been heard in the common law courts in 1791. o By contrast, a claim for an injunction prohibiting certain conduct by the defendant or a claim seeking specific performance of a contract does not carry a right to a jury trial, because it wouldve been decided by a judge in the courts of equity. The historical test, however, only goes so far. A lot has happened since the Seventh Amendment was ratified, and many types of current claims had not even been imagined in 1791. In Chauffeurs Local 391 v. Terry, the Court addressed how to approach a cause of action that was created after the Seventh Amendments adoption. o The Court, acknowledging this limitation, described a two-pronged analysis for applying the Seventh Amendment to more recent types of claims. 73

First, the Court said, look for a historical analog to the claim. So find the type of 18th century claim that most closely resembles the claim in the case. Second, the Court said, look to the remedy sought. The Court emphasized that the remedy sought often provides the determining factor under the Seventh Amendment (common law courts vs. courts of equity).

Rule 38: If a party wants to have a jury, the party must demand it within the time limit set by the rule. o A party demands a jury trial by serving the other parties with a written demand which may be included in a pleading, and filing the demand with the court. o Parties often make jury demands by including a prominent statement on the first page of their complaint or answer. The statement usually consists of something creative and poignant, like PLAINTIFF DEMANDS TRIAL BY JURY.

Like many other constitutional rights, the right to a jury trial is waiveable. If a party does not demand a jury, that party loses the right to a jury trial.

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2.

Pros and Cons of a Jury Trial Why is it a good idea to have a jury? o Buffer between the citizen and the man (check and balance) o Wider perspective o Accept judgments easier by litigants and public o Claims heard by the community (catharsis) / voice o Notion of flexibility (allows the law to bend without breaking) o Changing norms o Educating jurors (i.e. idea of a public school) o Reflect societal norms and community standards Why is it a bad idea to have a jury? o Lack of consistency o Inexperienced in the law / lack of knowledge o Unwilling deciders (is that really who we want deciding cases) o Bias o Prejudice/sympathy o Expensive and inefficient o Damages related to sympathy o Lack of transparency Jury Selection As a first step, the court summons citizens to appear for jury duty. The group of people from whom the jury will be selected, known as the jury venire, is then narrowed until the jury is finally seated for a particular trial. This questioning process is known as voir dire. Litigants have the right to challenge particular jurors, either for good reason or no reason at all. o They make challenges for cause, in which a party argues that a particular juror should be excused because the juror would be unable to decide the case fairly. o In addition each side may make several peremptory challenges, in which the party gets rid of a particular juror without offering any reason. A federal statute limits each party in a federal court civil case to three peremptory challenges, in contrast to challenges for cause, which are unlimited.

3.

The Court has declared that peremptory challenges on the basis of race or gender are unconstitutional as violations of the Equal Protection

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Clause. o If a party believes the other party has used a peremptory challenge to exclude a juror based on race or gender, the party may object and the court may require the party using the challenges to show that their challenge is not based on race or gender.

SS.
1.

Trial Process

Verdicts a. Burden of Persuasion The plaintiff must establish each element of the claim by a preponderance of the evidence.

b. Forms of Verdicts General Verdict: the most basic form of verdict, which simply asks the jury to decide who wins and how much. Rule 49 gives courts two alternative forms of verdicts: the special verdict and the general verdict with questions. Special Verdict: does not ask the jury to state which party should prevail, but instead asks the jury to answer specific factual questions. The judge then enters judgment for the appropriate party based on the answers given by the jury. General Verdict with Questions: The jury renders a verdict stating which party prevails, but in addition the jury answers specific questions presented by the court. o Basically a combination of the first two types of verdicts. 2. Bench Trials Bench trials (trials without juries) occur when there is no right to a jury trial, and where no party makes a timely jury demand, even if the lawsuit is one that entails a right to a jury trial. Unlike a jury trial, a judge in a bench trial must state his or her findings of fact and conclusions of law. The transparency of a bench trial decision as contrasted with the opacity of a general verdict makes a bench trial decision both less powerful and more powerful than a jury verdict. o A judges decision is more vulnerable to reversal on appeal, since an appeals court may reverse a trial judges factual findings if they are clearly erroneous.

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o But a bench trial decision carries the potential to be more powerful than a jurys general verdict because of issue preclusion, which permits courts in later proceedings to use certain factual determinations reached in an earlier case.

TT. Judgment as a Matter of Law and New Trial


1. Judgment as a Matter of Law Rule 50: Motion for Judgment as a Matter of Law and the Renewed Motion for Judgment as a Matter of Law if the evidence at trial is so lopsided that only one party can reasonably prevail. o Older cases use the terms directed verdict and judgment notwithstanding the verdict (j.n.o.v). Judgment as a Matter of Law shifts some of the jurys authority to the judge. Whenever a judge grants judgment as a matter of law, the judge is taking the decision-making authority away from the jury. o The justification is that the jury may decide the case within the bounds of reason, but juries are not empowered to decide civil cases without regard to the evidence and the applicable loaw. If the evidence is so clear that there is only one way a reasonable jury could decide, the judgment as a matter of law may be appropriate.

The standard for granting judgment as a matter of law is just like summary judgment. When a plaintiff or defendant moves for judgment as a matter of law, the court must look at the evidence in the light most favorable to the nonmoving party. o This means drawing all reasonable inferences and resolving credibility disputes in favor of the nonmoving party. If, by believing certain witnesses and disbelieving others, a jury could reasonably find in favor of the nonmoving party, then the court must deny the motion for judgment as a matter of law.

Motion and Renewed Motion (or Directed Verdict and J.N.O.V.): Judgment as a matter of law can occur before or after the jury has rendered a verdict. Its important to be aware of the procedural details that relate to this difference in timing. o Before the verdict, this device is what used to be known as directed verdict.

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o Rule 50(a) states that party may move for judgment as a matter of law at any time before the case is submitted to the jury, but also makes it clear that judgment as a matter of law may be granted only after the nonmoving party has been fully heard on the relevant issue. Therefore, the timing to move for judgment as a matter of law depends on whether the movant is a plaintiff or a defendant. For a plaintiff, judgment as a matter of law ordinarily must wait until the close of all the evidence because the court doesnt know whether the defendant should lose until the defendant has had an opportunity to present its evidence. For a defendant, however, judgment as a matter of law can occur at the close of all evidence or at the close of the plaintiffs case.

o One big difference between Rule 50 (judgment as a matter of law) and Rule 56 (summary judgment) is that while judgment as a matter of law takes the decision away from jury, at the rule 56 stage, the jury is just an idea; at the Rule 50 stage the case is at trial. Although as a matter of procedural theory, Rule 56 and Rule 50 motions function quite almost identically, the fact that Rule 50 motions occur during trial highlights the judicial assertion of power in relation to the jury. If a case is so lopsided that a party wins judgment as a matter of law, that party may have not won on summary judgment if the judge wanted to see how the evidence will develop at trial.

o After the jury has rendered a verdict, the losing party may ask the judge to take the decision away from the jury and decide it the opposite way, arguing that based on the evidence and the applicable law, no reasonable jury could have decided the way this jury did. This is what has traditionally been called a J.N.O.V., or what Rule 50(b) calls the Renewed Motion for Judgment as a Matter of Law.

o A party cannot moved for J.N.O.V. unless that party previously moved for a directed verdict. 78

If a party thinks that the other sides evidence is so weak or the case is so clear that it can be decided only one way, the party may not wait until after the jury verdict to make this argument.

o Reasons for granting Renewed Motions for Judgment as a Matter of Law instead of Motions for Judgment as a Matter of Law: (1) Straightforward psychology and political science if the jury gets it right, it obviates any need for the judge to grant judgment as a matter of law and everyones happy. If they mess up there is always J.N.O.V.; (2) If a Judgment as a Matter of Law gets reversed, the entire case must be retried. If a J.N.O.V. on the other hand, gets reversed on appeal, the trial court can simply reinstate the original jury verdict. Unlike in the first scenario, no new trial is required. o Its counterintuitive, but judges understand that it can actually be more efficient to deny a deserving Rule 50(a) motion and instead to grant the Rule 50(b) renewed motion if necessary. 2. New Trial Rule 50 spells out the procedure for new trial motions, but the rule is pretty cryptic about what are adequate grounds, stating only that a court may grant a new trial on whatever grounds have traditionally been permitted. o The case law, however, makes it clear that new trials can be granted in response to types of trial flaws process problems and outcome problems. Process problems to justify a new trial must be serious enough to raise serious questions about the fairness of the proceedings. o Ex., the judges instructions to the jury may have been an erroneous interpretation of the law, or important evidence may have been erroneously admitted or excluded. Or a lawyer may have engaged in misconduct such as an improper closing argument. If a judge believes that allowing the trial stand would be unjust in light of the error in the conduct of the trial, then the judge has the discretion to order a new trial. 79

Outcome problems, as a basis for new trial motions, tend to go hand in hand with motions for judgment as a matter of law. o Courts say that a new trial may be granted if the jury verdict is against the weight of the evidence. Some courts emphasize the high standard by using the phrase against the great weight of the evidence. The question is not what the judge would have decided if he was a juror, rather whether the jurys decision was so clearly contrary to the evidence that the verdict cannot stand.

The new trial standard is softer than J.N.O.V. because instead of handing the verdict to the other side, the judge is saying, lets try again. o For a new trial, the judge disagrees strongly with the jury, but cannot say that no reasonable jury could have gone there.

Judges also use the power to grant new trials as a way to lower the amount of damages awarded by the jury. o If the judge finds the amount awarded irrationally high, the judge may order a conditional new trial, telling the plaintiff that there will be a new trial unless the plaintiff accepts a reduced amount of damages. Judges should not simply substitute their measure of damages for the jurys; courts sometimes state that the judge should alter the damages only if the amount shocks the conscience. Known as remittitur, this type of conditional new trial order is permitted in both federal and state courts.

Rule 50 and Rule 59 motions often go hand in hand. o When a losing party believes the jurys verdict was unsupported by the evidence, the party may make a Rule 50(b) renewed motion for judgment as a matter of law, and in the alternative, a Rule 50 motion for a new trial. Naturally, the losing partys first choice is to win judgment as a matter of law, the next-best option is to get a new trial, and the worst option is to let the verdict stand.

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By renewing a Rule 50 motion and moving in the alternative for a new trial, the party is trying to say to the judge, We think the facts and law in this case so clearly support our position that no rational jury could have found otherwise, and therefore we think you should grant judgment as a matter of law for us. But even if youre unwilling to go that far, the evidence weighs so heavily in our favor that you should find the jurys verdict o be against the weight of the evidence and therefore grant a new trial.

PRECLUSION
UU. Two Kinds of Preclusion
Claim preclusion (a.k.a. res judicata): Addresses whether parties are prohibited from asserting a claim because they already received a judgment on the same claim. Issue preclusion (a.k.a. collateral estoppel): Addresses whether parties are prohibited from litigating a particular issue that was decided in a prior lawsuit. The doctrine of claim preclusion can be pretty well summed up in one sentence: A valid, final judgment on the merits precludes relitigation of the same claim between the same parties. Same Claim The majority approach and the modern trend is to apply a broad transactional test. o According to the Restatement (Second) of Judgments 24, a claim is precluded by a prior judgment if the actions arise out of the same underlying transaction or series of transactions. The transactional test tends to further the goals of claim preclusion efficiency, consistency, finality by encouraging joinder of related claims.

VV. Claim Preclusion

1.

To apply the transactional test, resist the law student temptation to think about lawsuits in legal terms. Do not focus on what legal theories the complaint invokes (strict liability, breach of trust, etc.) o Instead, ask what the case was actually about. What was alleged to have happened that gave rise to the dispute? Maybe it was a business deal, or a motorcycle accident, or 81

an employment termination. The transaction test asks whether the claim asserted in the second lawsuit arose out of the same underlying factual situation as the first. o If so, then its the same claim for purposes of claim preclusion. The transactional test casts a wide net. It makes claim preclusion a powerful tool for defendants to get claims dismissed in the second case. o More significantly, it creates a huge incentive for a plaintiff to join all related claims in a single lawsuit. 2. Same Parties Claim preclusion applies to claims between the same parties. o If Andy sues Benny and a court enters judgment on Andys claim, then Andy is precluded from reasserting the same claim against Benny. Claim preclusion does not prevent a different plaintiff from asserting a claim against Benny, even if it arises out of the same event. Charlie can still sues Benny, because Charlie cannot be bound by the first judgment. Charlie was not a party to the case and you cant bind a non-party. 3. Nor does it prevent Andy from asserting a claim against a different defendant.

Valid and Final Judgment a. Validity Think of validity more as a structural and procedural notion. What entitles a judgment to recognition ultimately is the legitimacy of the court to render a decision that is binding in this particular dispute on these particular parties. o Which brings us back to personal jurisdiction and subject matter jurisdiction: if a court lacks personal jurisdiction over a party or if adequate notice hasnt been provided, then the judgment doesnt bind that party. According to the Restatement (Second) of Judgments, a judgment from a court that lacked subject matter jurisdiction may nonetheless be given preclusive effect, with a few exceptions. o One exception is for default judgments if a defendant does not appear in the first 82

action, then the defendant later can challenge the validity of the judgment by showing the first court lacked subject matter jurisdiction.

b. Finality 4. For a judgment to be entitled to finality, it must be final. In the federal courts and the majority of state courts, a judgment is considered final even if an appeal is pending. On the Merits Claim preclusion is meant to prevent litigants from relitigating their dispute after the dispute has been resolved. If parties have received an adjudication on the substantive merits of their dispute, a dissatisfied party should not be permitted to try again for a better result. o If, on the other hand, a lawsuit is dismissed on a threshold procedural issue, and if the procedural flaw in the first action can be repaired, then there is no good reason to prevent a litigant from refilling the same claim. Under modern pleading theory, it would not make sense to apply claim preclusion to a dismissal that was intended simply to tell the plaintiff to get the pleading right, rather than to tell the plaintiff that she had no case. o To make this clear, the court might state that the dismissal is without prejudice or with leave to amend. In Semtek v. Lockheed Martin, the Court called into question whether Rule 41(b) really means that the default rule is to consider a dismissal to be on the merits unless the court states otherwise. o The Court expressed concern about whether it would violate the Rules Enabling Act for a federal rule of civil procedure to govern the law of claim preclusion. The Court concluded that the upon the merits language of Rule 41(b) means only that the same claim cannot be filed in the same court, and does not govern whether a judgment is entitled to claim preclusive effect

Claim Preclusion Analysis TO determine whether claim preclusion applies, analyze whether the cases involve the same claim, whether they are between the same parties, and whether the prior judgment was final, valid, and on the merits. Does the new lawsuit involve the same claim as the prior action? o In federal court and most state courts, apply the transactional test: Do the actions 83

arise out of the same underlying factual sitation? Is the new lawsuit between the same parties or those in privity with them? Is the new judgment in the prior case entitled to claim preclusive effect? o Was there a final judgment in the prior case? o Was the prior judgment valid? Did the court have personal jurisdiction? If the answer is no, then the judgment has no claim preclusive effect, but usually the only way to collaterally attack a judgment for lack of personal jurisdiction is by defaulting in the first action.

Did the court have subject matter jurisdiction? Even if the answer is no, the judgment may have claim preclusive effect, unless the first court abused its authority, or unless the defendant defaulted and has a meritorious defense.

o Was the judgment in the first case on the merits? Judgments for plaintiffs are nearly always on the merits. Dismissals for lack of jurisdiction, improper venue, or failure to join a party are not on the merits. Other dismissals are not on the merits if the court dismisses without prejudice or with leave to amend; otherwise, they are on the merits.

WW. Compulsory Counterclaims


Rule 13(a): Requires counterclaims to be brought in the original action if they arise out of the same transaction or occurrence as the original claim. When a specific question has been answered in one case, issue preclusion prevents the parties from trying to get a different answer to the same question in another case. o If issue preclusion applies, then the determination from the first case is taken as conclusively established for purposes of the second case. Restatement (Second) of Judgments 27: When an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is

XX. Issue Preclusion

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conclusive in a subsequent action between the parties. o Validity and finality is the same here, as it is for claim preclusion, so no need to revisit it. 1. Identical Issue For an issue determination to be given preclusive effect in a subsequent lawsuit, the very same issue must be relevant in both actions. o Some call this the identical issue requirement. If the issue that was decided in the first case differs from the issue that is relevant in the second case, then issue preclusion does not apply.

Whenever you think about issue preclusion, your first step should be to define as crisply as possible the issue or issues that you think might be precluded. o Is it did Benny drive negligently? Or in one case it could be, Did Andy have a valid patent? The issue may be major or minor, it may be simple or complex, but for issue preclusion to apply, the issue must be identical not merely similar in both proceedings.

2.

Actually Litigated and Determined Unlike claim preclusion, which tells litigants, You could have presented evidence about this issue earlier in the lawsuit, so now youre precluded from raising it, issue preclusion says, This exact issue was already raised in a prior lawsuit. Its been litigated enough, and its been answered. SO were going to take that answer and use it in the current action, and you are precluded from relitigating the issue. Remember that the actually litigated and determined requirement is no mere technicality. o Issue preclusion means that certain determinations fromone case may be taken a conclusively established in another case, and the parties will not be allowed to relitigate those questions. The point of the actually litigated and determined requirement is to prevent the unfairness that would occur if parties were precluded from presenting evidence on issues that had not truly been litigated in the prior action, or that the factfinder in the prior action did not actually decide.

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3.

Essential to the Judgment If a determination was not necessary to the disposition of the case, then the judge or jury may not have considered the issue thoroughly. o Also, to whatever extent the parties foresee that an issue will not be essential, they may not advocate their positions as vigorously as they would with regard to issues that are more likely to determine the outcome. Finally, if the determination was not essential to the judgment, then it could not have formed a basis for appeal, and the possibility of appellate review is one guarantor that an issue has been treated with care. Most federal courts continue to follow the view of the First Restatement of Judgments, which stated that alternative holdings should be given issue preclusive effect.

4.

Same Parties and the Mutuality Doctrine The notion of same parties for purposes of issue preclusion resembles, to some extent, the treatment of claim preclusion. o On the question of who can assert preclusion, we will see that issue preclusion is treated quite differently from claim preclusion.

Only parties can be bound by a judgment, with exceptions that generally fall under the description of privity.

a. Who Is Bound by Issue Preclusion In general, only parties are bound by a judgment, with a limited exception for nonparties who are in privity with a party. o Ex., Andy, Benny, and Charlie are in a three-car collision. Andy sues Benny for negligence and the jury finds Benny was not negligent. Charlie sues Benny for negligence. The court never acquired power over Charlie, therefore Charlie is not bound by either claim preclusion nor issue preclusion, because YOU CANT BIND A NON-PARTY.

b. Who Can Assert Issue Preclusion: The Mutuality Doctrine and the Rise of Nonmutual Issue Preclusion Nonmutual issue preclusion occurs when someone who was not a party to the first case uses the judgment for issue preclusion against someone who was a party to the first case. 86

Most modern courts permit at least some nonmutual issue preclusion, but under more limited circumstances than mutual issue preclusion. This hypo will illustrate: o A three-car collision occurs amongst Andy, Benny, and Charlie. Andy sues Benny for negligence. The jury returns a verdict for Andy, and the court enters judgment accordingly. Subsequently, Charlie sues Benny for negligence in the same collision. This time, it is Charlie who tries to use issue preclusion. Charlie argues that it was already established in case 1 that Benny was negligent in causing the collision. Benny cant say, You cant bind a non-party, because Benny was a party. Hence this is nonmutual, since only one of the parties has the possibility of binding the other.

Until the mid-twentieth century, courts would have applied the mutuality doctrine. Under the mutuality doctrine, one could not assert issue preclusion unless one could also be bound by the same doctrine. o It had to be mutual. This means that the only ones who could use issue preclusion were those who were parties to the first case.

Defensive Nonmutual Issue Preclusion v. Offensive Nonmutual Issue Preclusion o Defensive nonmutual issue preclusion, the party using the doctrine is using it as a shield, that is, to defend the issue as precluded. o Offensive nonmutual issue preclusion, the party using the doctrine is using it as a sword, that is, to assert the issue as precluded. Courts are much more reluctant to permit offensive nonmutual issue preclusion than defensive. Why? Defensive nonmutual issue preclusion encourages plaintiffs to join all potential defendants in one action, which tends to promote judicial efficiency. o If a party knows defensive nonmutual issue preclusion is permitted, hell prefer to sue both parties in a lawsuit, because otherwise the plaintiff would face a one-way disadvantage. Offensive nonmutual issue preclusion does just the opposite. If courts were to freely allow offensive nonmutual issue preclusion, the potential plaintiffs would prefer not to join in the first action, but rather to wait and see the outcome. 87

o The wait and see problem is one important reason why courts disfavor offensive nonmutual issue preclusion. Consider which party is bound by each type of issue preclusion. o Defensive nonmutual issue preclusion binds the party who chose the time and place of the first lawsuit. It hardly seems unfair to hold a litigant to the decisions of a tribunal that was selected by that litigant.

o Offensive nonmutual issue preclusion, by contrast, would bind a party who may have been dragged into the first case kicking and screaming. In Parklane Hosiery Co. v. Shore, the Court decided that in some cases offensive nonmutual issue preclusion is permissible. o In the case, a private plaintiff in a class action sought to bind the Parklane Hosiery Company with a determination from a government enforcement action that the company had issue a materially misleading proxy statement. The Court acknowledged that offensive nonmutual issue preclusion often presents dangers of unfairness, but on the facts of the case, the Court found it permissible to use such issue preclusion. There was no wait and see problem because it would have been impossible for the plaintiff to join in the first action. o Also, the stake sin the first case were high and the procedural opportunities were thorough, so the defendant had a full and fair opportunity to litigate the issue. The issue had not been the subject of inconsistent determinations.

Issue Preclusion Analysis First, be sure to identify clearly what issue was resolved that may be entitled to issue preclusive effect. Then ask: o Is the issue identical in case # 2 and case # 1? o Was there a valid and final judgment in case # 1? o Was the issue actually litigated and determined in case # 1? o Was the determination essential to the judgment in case # 1? o Was the party to be bound by issue preclusion either a party in case # 1 or in privity with a party?

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If the answer to any of the above questions is no, then issue preclusion does not apply. If the answer to all of them is yes, then figure out whether youre dealing with mutual or nonmutual issue preclusion. o Was the party asserting issue preclusion in case # 2 also a party in case # 1? If so, then its mutual issue preclusion. If not, then it is nonmutual issue preclusion, which would be prohibited under the traditional mutuality doctrine, but may be allowed under modern preclusion doctrine. o If nonmutual issue preclusion, figure out whether its defense or offensive: Is the asserting party using issue preclusion as a shield to defend against a claim (defensive), or as a sword to advance a claim (offensive)? If defensive nonmutual issue preclusion, then pay attention to whether there was a full and fair opportunity to litigate the issue in the first action, but most courts permit such preclusion. If offensive nonmutual issue preclusion, then courts permit it under much more limited circumstances, and with much greater attention to potential unfairness. Could the plaintiff easily have joined in case #1? Were the stakes or procedural opportunities in case # 1 insufficient to ensure a full and fair opportunity to litigate the issue? Have there been inconsistent determinations of the issue?

If the answer to any of these questions is yes, that may provide a reason for a court to reject offensive nonmutual issue preclusion as unfair.

YY. Interjursdictional Preclusion


Full Faith and Credit Clause: Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. Article I, Section 4. o Each state must give respect to judgments entered by courts of every other state. Judgments are frequently enforced and given preclusive effects across international borders, but that transnational enforcement of judgments is much more complex and uncertain than enforcement and preclusion across jurisdictional borders within the US. Most courts and commentators agree that the law of the first forum should generally govern the preclusive effect of the judgment. In Semtek v. Lockheed Martin, the Court faced a difficult twist on the question of choice of preclusion law, because it involved the preclusive 89

effect of a judgment from a state law case in federal court, therefore implicating the Erie doctrine. Gives us the general rule: The second forum is not supposed to apply its own preclusion law, but rather to look to the first forum as the source of applicable preclusion law. o Semtek sued Lockheed on a state law claim. Semtek originally sued in California state court, but Lockheed removed the action to federal court on diversity jurisdiction. The federal court dismissed on the merits and with prejudice based on Californias two-year statute of limitations. Semtek then proceeded to file the same claim in Maryland state court, because in Maryland the applicable statute of limitations was three years, which had not yet expired. o Lockheed moved to dismiss on grounds of claim preclusion. Even though the dismissal was on the merits as stated by the court, the Court explained that the preclusive effect of the judgment must be determined by looking to the first case. So Maryland preclusion law was entirely besides the point. Since the first case was a state law case in federal court, the question of whose law governed the preclusive effect of the judgment was really an Erie question. o The Court ultimately concluded that the effect of a federal court judgment was governed by the federal common law of preclusion, but that the federal law should incorporate state standards, unless an overriding federal interest demands otherwise. Therefore, the Court

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held that the Maryland state court should apply the California rule that the statute of limitations dismissal was not on the merits and thus not entitled to claim preclusive effect. Semtek: An In-Depth Analysis Semtek International v. Lockheed Martin (Sup. Ct. 2001) Case #1 Semtek sues Lockheed Martin in California state court. Lockheed removes to C.D. of Cal (1441 removal statute) based on diversity jurisdiction (1332). Judgment for Lockheed based on statute of limitations for type of claim. Goes up to 9th Circuit and 9th Circuit affirms. Case #2 Semtek sues Lockheed Martin in Maryland state court for the same claim. Semtek argues that it is not time-barred in Maryland by the statute of limitations. We know that statute of limitations it is substantive (Guaranty Trust). Lockheed tries to remove based on diversity, but cannot because Lockheed is an in-state defendant in Maryland. So Lockheed tries For jurisdiction on federal subject matter jurisdiction (1331), based on an anticipated federal defense. BUT EASILY shot down under Mottley. So Lockheed argues the C.D. of Cals judgment was final and on the merits, so Semtek is claim precluded. Elements of Claim Preclusion: 1. Same clam yes 2. Same parties - yes 3. Valid, final judgment - yes 4. On the Merits for CP purposes. Thats what is at issue. o We know that On the Merits doesnt actually mean On the Merits. o The court in Cal. Says dismissed on the merits and with prejudice. Even if it didnt, Rule 41(b) says its a dismissal with prejudice/on the merits because any dismissal that doesnt state whether it is on the merits/with prejudice, is assumed to be (except for lack of jurisdiction, improper venue, failure to join a party under Rule 19 go bring case in a court where you can join that party). o If the court said without prejudice, or with leave to amend, we know you could bring a new case. But that is not what the court said. In fact, the court said it explicitly! On the Merits, with prejudice. So Semtek says we should look at California state law to determine the 91

preclusion question for the effect of that judgment. What does California claim preclusion law? Cal. Law would not treat a statute of limitations dismissal as one on the merits. o If you do so, youll see it was not on the merits, and well be able to go forward. Why does Maryland state court need to respect this decision? o Not Full Faith and Credit Clause (of the Constitution) Only between State court and State court, not Federal court and State court. o What about Full Faith and Credit Statute? 1738 Full faith and credence to every court within the United States so should be every court right? It means that district court has to give Full Faith and Credit to the state court proceedings, NOT state courts giving Full Faith and Credit to the federal courts. o Go to Federal Common Law Nothing on point, so it remains to the federal courts to determine what the law is. In Park Lane Hosiery there was court-made federal law about issue preclusion. Same thing about claim preclusion going on here. o Dont get hung up by Erie, There is no federal GENERAL common law. This is about torts, contracts, property, etc. There is federal common law about SPECIFIC things, such as procedure, admiralty law, etc. o Interstitial fills the gaps of various statutes. States have a duty to respect federal law and federal courts decisions (US Constitution Supremacy Clause). Where there is federal law, that is the supreme law of the land. So, under federal law, Maryland state court has to respect the judgment of the federal court, while under Maryland law, the statute of limitations doesnt apply. ERIE ISSUE. But its an Erie issue embedded in the decision from the prior case. GO TO ERIE ANALYSIS to determine what law to apply. 1. Is there a federal rule directly on point? (Hanna). 41(b): Dismissals are on the merits unless one of the exceptions. o Kind of like Walker Semtek argues that 41(b) is not really about claim preclusion, but rather about bringing the 92

same claim in THAT court. If it meant that it was claim precluded nationwide, then it would be in violation of the Rules Enabling Act because it abridges, enlarges or modifies a state substantive right. --> Itd be stepping out telling state courts the effect of a federal court decision. So Rule 41(b) doesnt really say its claim preclusive. 2. There is no federal rule directly on point Modified Outcome Determinativeness Test. Is there a difference? It is outcome determinative in the Guaranty Trust sense. Twin Aims of Erie: Discourage Forum Shopping and Avoid Inequitable Administration of the Law? o Is this the kind of thing that they would forum shop over? If they thought theyd get dismissed they wouldnt have brought the case there ,so no real forum shopping here. So the Court says that federal common law governs the claim-preclusive effect of a dismissal by a federal court sitting in diversity. So were not applying state law, were applying federal common law. o What the federal common law would do is to look to the state law and adopt by reference, as part of the federal common law, the rule. The federal reference to state law will not apply if the state law is incompatible with federal interests. Ex., state law did not accord claim-preclusive effect to dismissals for discovery sanctions. o Federal courts interest in the integrity of their own processes justify a contrary federal rule.

FORUM EXERCISE
I. Subject Matter Jurisdiction 1. 1331- Federal Question Jurisidction: Merrell Dow v. Grabel Weak for this. No Federal Question Jurisdiction. 2. 1332 Diversity Jurisdiction: NY (inc.) NY (principle place of business) v. DE (inc.) MA (principle place of business is where HEADQUARTERS ARE for DIVERSITY). Good on both sides. Not if you add Catchcart (NY resident not complete diversity).

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Do we meet amount in controversy? Can aggregate claims against one party by one party So yes ($85,000 > $75,000). II. Personal Jurisdiction (FOR SJ Start with Long Arm Test) Revere General: DE, MA, RI Specific: MA, RI, CT, NY? A little bit tougher. Stream of commerce question (Like Asahi). MUCH STRONGER THAN ASAHI because here the whole dispute is whether the phones were designed for compliance with NY regulations. Looks exactly like there is an ADDITIONAL PURPOSEFUL CONTACT with NY. (Revere agreed to design these phones to NY regulations). Strong argument for specific jurisdiction. Cathcart General: NY Specific: MA, NY? III. Venue 1391(a)(2): D. Mass, SDNY, D. RI, D. Conn 1391(a)(1): D.Del, D. Mass, D. RI, D. Conn, SDNY. FNC/Transfer: What Do we End Up With State Federal Mass D. Mass RI D. RI Conn D. Conn NY SDNY IV. Strategy/Choice of Law Parole Evidence Rule We care most about this MA, DE allow evidence of add. terms. E-Discovery-FRCP, CT wont help us. DE, RI, MA, NY are not really known. Preemption- most preemption, less preemption. V. Erie Analysis 1. Is there a federal rule/statute on point? No. Go to the Erie analysis 2. (a)Outcome Determinativeness/(b)Discouraging F.S. & Inequitable administration of the laws. VI. What Court Do We Get Things to remember: if you choose state court and dont want defendant to be able to remove to federal, see if you could destroy diversity (add Cathcart-NY defendant who also under 1441 cant remove since shes an in-state defendant) or only sue for 75K (doesnt meet minimum for amount in controversy). Considerations for courts: If youre a NY plaintiff, may want to stay in your home state (also if a state law with certain policy implications is part of claim).

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RECAP: How to do the Forum Problem 1) State/fed SMJ a. 1331, 1332, other, supplemental jurisdiction, if it a class action is there CAFA jurisdiction? 2) Where PJ, Venue 3) Erie

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