U.S. Constitution, amendment XIV: “…nor shall any state deprive any person of life, liberty, or property without due process of the law.”
Pennoyer v. Neff: π Neff obtained land under Fed. Land act, then went to CA. Mitchell brought suit v. π in absentia, obtained judgment on land, which was sold at auction to Δ. In first suit, Neff was not personally served with process. Held: In personam judgments against non-residents not validly personally served with process within the jurisdiction are invalid and unconstitutional. (territorial jurisdiction).
Post Pennoyer, jurisdiction valid: (1) on non-residents served while passing through jurisdiction, no matter how briefly; (2) absent citizens; and (3) defendants who consent to jurisdiction.
Expanding the Bases of Personal Jurisdiction
Hess v. Pawloski: Δ, PA resident, hit π, MA resident while driving through MA. MA statute provided that operating a car within the state amounted to naming a state official as a lawful agent upon whom process could be served, if also sent by mail to Δ. Held: Given the significant interest of the state in keeping roads safe, and the combination of appointing of in-state agent and mailing, MA statute provided for valid service of process.
A New Theory of Jurisdiction
International Shoe Co. v. Washington: π state had unemployment compensation scheme requiring employer contributions. Delinquent contributors informed in person in state and by mail out of state. Served process on Δ’s salesman and by mail. Δ argued lack of personal jurisdiction, that it did not actually “do business” in state. Held: “Due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory or the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” To establish general jurisdiction, contacts must be sustained and systematic. For specific jurisdiction, contacts can be less, even only one act if a suit arises out of it.
Specific Jurisdiction and State Long-Arm Laws
Gray v. American Radiator & Standard Sanitary Corp: π injured by exploding water heater, brought suit against, inter alia, Titan, manufacturer of safety valve. Notice served on Titan’s agent in accordance with IL long-arm statute. Held: By injecting their products into the stream of commerce in such a way that they could reasonably expect them to be sold to IL customers and to benefit from IL laws, Titan established minimum contacts with IL and was thus liable to suit there.
Due Process and Long-Arm Statutes
McGee v. International Life Insurance Co.: π beneficiary of life insurance policy bought by CA resident from TX company, all correspondence carried on by mail. Δ refused to pay upon policy-holder’s death. π obtained judgment in CA, TX cts. refused to enforce. Held: Given the nationalization of commerce trend personal jurisdiction over non-residents. While Δ didn’t have significant contact with CA, Δ’s contract did. Fairness requires allowing beneficiaries to bring suit in their home state, and CA has a sovereign interest in regulating the insurance of residents.
Hanson v. Denckla: Two suits on validity of trust set up in will, one in FL, one in DE. DE trustee indispensible party in FL suit. Held: DE trustee’s contacts with FL less than minimal – while correspondence with trustor similar to that in McGee, DE bank did not solicit trustor’s business in FL, unlike life insurance co in McGee. While trend expanding jurisdiction, it does still have limits. Explicitly added a reasonableness/fairness inquiry to minimum contacts and focused on Δ’s “purposeful availment” of the laws and protections of the forum state.
World-Wide Volkswagen Corp. v. Woodson: π’s injured in car accident in OK. Had purchased car in NY, suing regional distributor and dealer, neither of which had any contacts with OK (necessary to destroy diversity – π wanted to keep suit in state ct.). π argued that cars are inherently mobile, by selling car Δs should expect suit anywhere it could be driven. Held: Allowing suit to continue v. these Δs would subject any sellers of chattels to suit anywhere in the country. Despite OK’s interest in adjudicating this claim, Δs did not purposefully avail themselves of the protection of OK law, and therefore could not expect to be haled into court there and had not established minimum contacts. Justice Brennan, in dissent, emphasized the significant state interest.
Keeton v. Hustler: π OH resident suing Hustler magazine for libel, OH statute of limitations had run out so π brought suit in NH. Held: Though π had no contacts with forum state, Δ did, and it’s Δ’s contacts that matter for establishing jurisdiction.
Kulko v. Superior Court: π ex-wife, CA resident, sued Δ ex-husband, NY resident, in CA ct. to modify child-support agreement. Δ’s contacts limited to 2 short trips to CA, buying plane ticket to send daughter to mother, which CA SC relied upon to suggest that Δ had had a “purposeful effect” on the state. Held: Sending children to their mother not enough to constitute “purposeful availment” of benefit and protections of CA law. Effects test applicable only to commercial activity.
Burger King Corp. v. Rudzewicz: Δs – MI residents, franchisees of π – FL corp., franchise contract stated that it was made in FL and governed by FL law. Dispute arose, π filed suit in FL, Δ arguing insufficient contacts, claim didn’t arise in FL. Held: Δ deliberately reached out beyond his home state to establish contract with substantial contact with FL, with an FL company, purposefully availed himself of the protection of FL law. Still always have to weigh “fairness and substantial justice” on a case-by-case basis, but satisfied in this case.
Asahi Metal Industry Co. v. Superior Court: CA resident injured in motorcycle accident, sued tire tube manufacturer who impled valve manufacturer, both foreign corporations. O’Connor, J, in a plurality opinion, suggested it was necessary to establish minimum contacts (including, in stream of commerce cases, “purposeful direction” of products to a forum) then to apply a balancing test weighing: (1) the burden on the Δ; (2) state interest; (3) π’s interest in obtaining relief; (4) efficient administration of the laws; and (5) social policy interests.
General Jurisdiction and State Long-Arm Laws
Perkins v. Benguet Consolidated Mining Co.: Held: States are not prohibited from exercising general jurisdiction over a corporation carries out sufficiently “continuous and systematic corporate activities” within the forum.
Helicopteros Nacionales de Colombia, S.A. v. Hall: Δ Colombian owner of helicopter that crashed in construction project in Peru. π’s US citizens but non TX residents brought suit in TX. Held: Δ’s attendance of meetings in TX, purchase of helicopters and training of pilots there not enough to establish the “continuous and systematic” contacts necessary to establish general jurisdiction. Suggests that the only clear indicators of continuous and systematic contacts are to have an office or designated agent within the state. Brennan, in dissent, argued that Δ had purposefully availed itself of the protection of TX law, and that since the claim arose out of a contract that had been negotiated in TX, this case skirted the line between general and specific jurisdiction.
New Bases of Jurisdiction – Technological Contacts
Zippo Mfg. Co. v. Zippo Dot Com, Inc.: Copyright infringement case. π- PA corp. Δ – internet news service based in CA but with 3000 subscribers and contracts with 7 ISPs in PA. Held: When determining whether jurisdiction is available over a website, apply a “sliding scale” rule, evaluating the commercial nature of the site and its “level of interactivity” as related to members of the forum. The more interactive a website is, the easier it is to exercise jurisdiction.
Jurisdiction Based upon Power over Property
quasi in rem: a claim over a piece of property addressed at a specific person; claim itself unrelated to property, just used as a means of getting at person.
Harris v. Balk: Harris, NC resident, owed money to Balk, also NC resident, who owed money to Epstein, MD resident. Harris in MD, Epstein garnished Harris’ debt to Balk (sent Balk notice). Balk still tried to collect from Harris, claiming MD had no jurisdiction over Harris’ debt which was situated in NC. Held: Jurisdiction over garnishee confers jurisdiction on state that issues writ of garnishment. A debtor’s obligation follows with him wherever he goes.
Shaffer v. Heitner: π shareholder in Greyhound – DE corp. headquartered in AZ. Filed shareholder derivative suit and motion to sequester DE property v. Δs – current and former Greyhound execs, non-DE residents. Held: Minimum contacts/fairness and substantial justice, following Int’l Shoe, should also be applied to in rem suits. In most cases, property in the state will be enough to establish minimum contacts, but in this kind of quasi in rem case, where non-material property (stock in Greyhound) being used as means to induce in personam appearance, contacts insufficient.
Refrain: Jurisdiction Based Upon Physical Presence
Burnham v. Superior Court: Δ, NJ resident, and π, CA resident, filed competing divorce suits in their respective states; Δ came to CA for business/to visit children, served with process. Held: Even temporary presence in state sufficient to establish general jurisdiction. Minimum contacts test has always been about absent Δs, not present non-residents.
Another Basis of Jurisdiction: Consent
Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee: Held: By appearing in order to raise a defense of personal jurisdiction, one inherently consents to courts’ right to determine jurisdiction. Court refers to this as consent to jurisdiction by estoppel, but would be cleaner to say that court always has jurisdiction to determine jurisdiction. Requirement of jurisdiction flows from Due process Clause, not article 3, and therefore like all other rights can be waived. Failure to comply with discovery requests supports presumption of min. contacts.
M/S Bremen v. Zapata Off-Shore Co: Held: Forum selection clause requiring disputes between US corp. and German corp. to be litigated in England dispositive, π barred from bringing suit in US cts.
Carnival Cruise Lines, Inc. v. Shute: SCOTUS upheld forum selection clause in contract of adhesion found on back of pre-purchased cruise tickets. Relied on Δs abilities to keep prices down by limiting adjudication to a single forum. Stevens, J, dissented suggesting that πs had no real opportunity to negotiate k, fairness standards not met.
Jurisdictional Reach of the Federal District Courts
In general, federal courts piggyback jurisdiction off of the states in which they sit. 3 exceptions: (1) 100-mile bulge rule – fed. cts. can exercise jurisdiction over any party joined under rules 14 or 19 served within 100 miles of where summons issued; (2) with express authorization of federal statute; (3) If no state would have jurisdiction and the claim involves a question of federal law. In this case, Δ has to have minimum contacts to US as a whole.
Fed. R. Bankr. Procedure 7004(d): provides for nationwide jurisdiction of bankruptcy cases in the interest of adjudicating all of a debtor’s debts at once.
29 U.S.C. § 1132(e)(2):
Providing Notice and an Opportunity to be Heard
The Requirement of Reasonable Notice
Mullane v. Central Hanover Bank & Trust Co.: Δ trust company – as per NY law, for judicial settlement of accounts, gave notice only by publication (at time of first common investment, notice of procedure was sent by mail). Held: Beneficiaries have to have the opportunity to appear in ct. Notice must be reasonably calculated to inform interested parties and to allow them to appear. In this case, notice by mail in anticipation of hearing found to be appropriate. Creates a standard, rather than a rule, allowing cts to balance the costs of notice with the interests of the parties.
Aguchuk v. Montgomery Ward: Held: to be adequate, notice must inform parties of their rights.
Greene v. Lindsey: KY statute allowed for notice of eviction proceedings to be posted on door of tenants’ apartments. Held: given process servers’ awareness of the likelihood that notice posted on doors in housing project in question would be removed before tenants could see them, posting not an adequate method of notice. Have to consider availability of feasible alternatives.
Jones v. Flowers: π paid off mortgage on house, didn’t pay taxes (which had been included in the mortgage payments) after mortgage paid. Lived elsewhere and (in violation of statute) didn’t change address of record with state. State mailed notice of unpaid taxes, potential repossession to house, no one signed for letter or picked it up, it was sent back. 2 years later, Δ bought house from state, served unlawful detainer notice on property, π filed suit alleging inadequate notice. Held: When the State undertakes to deprive a citizen of his property and has proof that efforts to give notice are failing, they have a duty to follow up within reason.
The Mechanics of Giving Notice
Federal Rule of Civil Procedure 4: provides for summons and service of process.
National Equipment Rental, Ltd. v. Szukhent: Δ – MI resident - leased equipment from π – NY co., contract provided NY agent for service of process, unknown to Δs. Claim arose, π served notice on agent in person and by certified mail to Δs. Held: given the narrowness of the agency and the good faith actions of named agent, this method of serving notice is valid.
Fuentes v. Shevin: Δ bought items from π on installment, dispute arose with $200 balance outstanding, π attempted to repossess items immediately, before even filing action of repossession or notifying Δ. Held: denying the right to a prior opportunity to be heard before chattels are taken from a Δ’s possession is a violation of due process. Notice can only be postponed when: (1) seizure is to secure important government interest, (2) there’s a special need for urgency, and (3) the state has control over its monopoly on legitimate force, not using it for a private party as in the instant case.
Mitchell v. W.T. Grant Co.: Similar fact pattern to Fuentes but LA statute at issue had higher threshold of proof for replevin then did the FL and PA statutes at issue in Fuentes, so the risk of arbitrary deprivation of poverty without due process was found to be much lower and the process to be constitutional.
North Georgia Finishing, Inc. v. Di-Chem, Inc.: π filed suit against Δ, instituted garnishment action before Δ had even received notice of suit. Held: official seizures had been carried out without notice or opportunity for a hearing or any other safeguard against mistaken repossession. GA statute had none of the “saving characteristics” of LA statute in Mitchell, falls strongly within the precedent of Fuentes.
Connecticut v. Doehr: DiGiovanni (π) bringing assault/battery charge v. Δ Doehr, applied to attach Δ’s house under CT law allowing prejudgment attachment of real property if π shows valid clause for claim. House attached before Δ received service of battery claim. Held: White, J borrowed a test from Matthews v. Eldridge used to determine whether gov’t taking of property is constitutional. Consider: (1) private interest that will be affected (Δ); (2) risk of error and available safeguards; (3) gov’t interest. With private parties, as in instant case, prong 3 = π’s interest/any pub pol interest. In this case, CT statute found to be unconstitutional, as posing a strong risk of arbitrary deprivation of a significant property interest without great gain to π or public.
Jurisdiction over the Subject Matter of the Action -- The Court’s Competency
State courts are courts of general subject matter jurisdiction – have jurisdiction over everything not specifically banned by statute.
Federal courts are courts of limited jurisdiction – only have jurisdiction when specifically granted by statute or the Constitution.
Courts have discretion to determine whether certain threshold requirements are in fact elements of subject matter jurisdiction or simply potential defenses against claims. See Lacks v. Lacks and Arbaugh v. Y&H Corp
Federal Court Jurisdiction: Diversity of Citizenship
U.S. Constitution, Article III, § 2: Gives federal courts jurisdiction over all cases and controversies of federal law or to which the US Govt is a party. (Cases and controversies clause)
28 U.S.C. § 1332(a), (b), (c), and (e): (a) Fed. Cts. have jurisdiction over suits where amount in controversy exceeds $75,000 and case is between (1) citizens of different states; (2) citizens of a state and foreign citizens; (3) citizens of different states w/ foreign citizens = additional parties; (4) a foreign state = π and citizens of a state or states. (b) if π is found to be entitled to less than $75,000, court can sanction by denying costs or by imposing costs on π. (c) (1) corporations = citizens of state where incorporated and place of business, except insurance companies who take citizenship from insured. (2) legal representative of estate = citizen of same state as decedent. (e) DC & Puerto Rico = states for jurisdiction
Pros of diversity jurisdiction: fairness (elimination of hometown advantage), uniformity, reduced burden on state cts., better/more impartial federal judges, access to a less congested docket.
Cons of diversity jurisdiction: affects state cts.’ ability to shape their own law, dangers of misapplication, provides disincentive for reform, increases fed. burden.
Capron v. Van Noorden: π lost case in federal ct., then brought claim that subject matter jurisdiction didn’t apply. Held: previous judgment invalid. No matter who brought suit and who raised claim, no decision made without jurisdiction can be valid.
Mas v. Perry: 2-way mirror case! Held: for diversity, citizenship is established by domicile rather than residence. Domicile = true home, place to which one intends to return. Even though π had been a resident of same state as Δ, she had maintained her domicile in MS, where her parents lived.
Aggregation: single π with multiple claims can aggregate
multiple πs with multiple claims aggregation depends on divisibility of claims
multiple πs with dissimilar claims no aggregation
multiple Δs aggregate when common nucleus of operative fact and undivided liability
no aggregation of claims and counter claims
Injunctions: depending on jurisdiction will look either at injunction’s value to π or to Δ (think Coase theorem polluting factory examples).
Judicially Created Exceptions to Jurisdiction
Marshall v. Marshall: (Anna Nicole Smith) JH Marshall died, leaving everything to son, nothing to wife. Estate hearings in TX probate court. Wife filed for bankruptcy in CA, bankruptcy judge awarded her $500 mil. Held: “Probate exception” requiring all claims related to a will to be decided by probate court to be narrowly read. Fed. Cts. can hear any claims of parties in probate suit that don’t directly interfere with probate proceedings. Judgment of CA bankruptcy judge valid.
Ankenbrandt v. Richards: Also a “domestic relations exception” that is similarly narrowly read. Only applied in divorce, alimony, or child custody cases.
Federal Court Jurisdiction: Federal Questions
U.S. Constitution, Article III, § 2
Osborn v. Bank of the United States: Chief Justice Marshall, in an attempt to protect the Bank of the United States, established “ingredient test” for arising under jurisdiction, giving federal courts jurisdiction over any dispute where a question of federal law was an “ingredient” of the cause of action. Too expansive to ever have really been applied.
28 U.S.C. § 1331: The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.
Louisville &. Nashville R. Co. v. Mottley: πs – KY residents, brought equity suit in fed. dist. ct. v. Δ RR. Had been previously injured as a result of Δ’s negligence and had settled for lifelong transport passes, Δ refused to renew. Held: Because question of federal law was one of Δ’s defenses, not an element of π’s cause of action, circuit court lacked jurisdiction over claim. The federal question must be included in the “well-pleaded complaint” to create federal subject matter jurisdiction.
American Well Works: Held: When reading the well-pleaded complaint, have to consider which law creates cause of action.
Skelly Oil Co. v. Phillips Petroleum Co.: Attempt to use the Declaratory Judgment Act, which allows fed. cts. to rule on rights and legal relations in cases of actual controversy within its jurisdiction, to get ruling on termination of ks under state law. Held: “To sanction suites for declaratory relief as within the jurisdiction of the district courts merely because…artful pleading anticipates a defense based on federal law” counter to the goals/principles of federal ? jurisdiction.
Smith v. Kansas City: Held: Absent a federal cause of action in complaint, arising under jurisdiction can still occur when claim depends on construction or application of federal law. Strenuously objected to by Justice Holmes.
Merrell Dow Pharmaceuticals Inc. v. Thompson: πs bringing product liability failure to warn suit against πs. Failure to warn argument came out of federal regulations. Held: To determine whether there is “an implied federal cause of action” in a statute, consider: (1) whether πs are part of a class for whose special benefit the statute was passed; (2) whether there is evidence of a legislative intent to create or not create a cause of action; (3) whether a federal cause of action would further the underlying purpose of the legislation; and (4) whether the subject of the statute is one not traditionally relegated to state law. In the instant case, while the lawsuit involved a question of federal law, federal law did not create π’s cause of action, therefore no federal jurisdiction.
Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing: π’s property seized by IRS, sold to Δ, π notified of seizure but not sale, brought improper seizure suit. Held: Attempting to resolve ambiguities of Merrell Dow, ct. held that when a state claim involves a significant question of federal law, cts. should evaluate (1) availability of federal right of action; (2) seriousness of federal interest; (3) Congressional conception of division of labour between fed. and state cts. (4) likelihood of “floodgates” problem.
Empire Healthchoice Assur., Inc. v. McVeigh: Δ insured by π according to federal workers insurance plan, died as a result of third party, brought suit v. 3rd party and won, π suing for recovery of Δ’s medical costs under “right to reimbursement” clause in insurance k. Held: Ginsberg, J chose not to follow Clearfield Trust and instead applied a Smith/Grable federal question analysis, under which there was no federal cause of action available and no significant federal interest in adjudication, so no arising under jurisdiction.
Supplemental Jurisdiction of the Federal Courts
Pendent and Ancillary Jurisdiction
Pendant jurisdiction: administration of state claims that arise in same suit as a federal claim.
Ancillary jurisdiction: administration of claims involving non-diverse indispensible parties in diversity suits.
United Mine Workers of America v. Gibbs: π suing Δ for violations of Federal Labour Management Relations Act as well as state law claims. Held: Federal courts can exercise pendant jurisdiction over any state claims that arise from “a common nucleus of operative fact” as the federal ones.
Finley v. United States: π’s husband and children killed in accident at San Diego airport, brought suit v. FAA under Federal Tort Claims Act, amended complaint to include state law claims v. city of San Diego and local utility co. Held: (Scalia) Neither Gibbs nor any act of Congress supplied “pendant party” (or ancillary) jurisdiction.
28 U.S.C. § 1367: Congressional response to Finley. Grants supplemental (pendant + ancillary) jurisdiction over all state claims arising in same case or controversy (codification of Gibbs). 1367(c)(3) allows for dismissal of state claims if original basis for federal claim found to be invalid.
Exxon Mobil Corp. v. Allapattah Services, Inc.: Held: Federal courts in diversity cases can exercise supplemental jurisdiction over additional πs who fail to meet the amount-in-controversy requirement, if all other elements of jurisdiction present. In line with trend favouring letting people into federal court.
Removal Jurisdiction of the Federal Courts
28 U.S.C. §§ 1441, 1446, and 1447.: 1441 defines which cases are removable. Limitations: Δs can’t remove from their home court, can only remove to district court embracing state court where action pending (but then transfer = often possible), 30-day time limit. 1446 provides procedure for removal, and 1447 procedure after removal.
Syngenta Crop Protection v. Henson: π brought suit v. Δ in LA state court. Different π bringing suit on same cause of action in AL state ct. πs lawyer participated in AL settlement, agreed to drop all state law claims in LA, then went back to LA and claimed that settlement only applied to certain claims. Δ removed to fed. ct., transferred back to AZ, had dismissed. Held: Removal requires original jurisdiction, which federal courts didn’t have in the immediate case. But everybody upheld sanctions on π’s lawyer who was a lying mofo.
Venue, Transfer, and Forum non Conveniens
Venue and Transfer in the Federal System
28 U.S.C. §§ 1391, 1404, 1406: 1391 sets out general venue rules. 1404 allows changes of venue to anywhere with jurisdiction, “for the convenience of parties and witnesses, in the interest of justice.” 1406 provides for dismissal or transfer of suits brought in the wrong venue.
Bates v. C & S Adjusters, Inc.: π debtor sued Δ bill collector for violation of Fed. debt collection law. Brought suit in district of present residence, to which the collection letter had been forwarded. (Debt incurred in district of previous residence). Held: 28 USC § 1391(b)(2) requires that a “substantial part of events giving rise to the claim” happen in a district for it to have venue. In the instant case, the harm to π occurred with his receipt of the collection letter, so venue is proper in the district where it was received.
Gulf Oil Corp. v. Gilbert: Held: “The principle of forum non conveniens is simply that a court may resist imposition upon its jurisdiction even when jurisdiction is authorized by the letter of a general venue statute.” When deciding whether to dismiss of primary interest is private interest of litigant. Consider: availability of alternate forum, ease of access to proof/witnesses, possibility of view of site of claim, other costs/practicalities, enforceability, advantages/obstacles to a fair trial, forum shopping. Also worry about public interest: whether it’s appropriate to expend judicial/juridical resources on case at hand, if the state has an interest in adjudicating.
Piper Aircraft Co. v. Reyno: Claim arising out of plane crash in Scotland, foreign π’s (with atty’s secretary as agent) brought suit in CA court, admittedly because US laws more favourable. Case removed to fed. ct., transferred to PA, Δ moved for dismissal for forum non. Held: Mere favourability of law not enough to justify maintaining π’s suit in a venue that fails other elements of Gilbert analysis.
Post Piper forum non claims very frequently granted to keep foreign πs/cases out of US cts.
Iragorri v. United Technologies Corp.: Decedent, FL resident, died in Colombia in elevator accident in elevator manufactured by CT company. Brought suit in CT under CT law. Held: Higher deference than that given to the foreign πs in Piper is due to US residents who do not appear to be forum shopping.
Sinochem International Co. Ltd. v. Malaysia International Shipping Corp.: Held: Jurisdiction and venue are both threshold inquiries that must be established before a case can be tried, but there is no hierarchy among them. Therefore, district courts’ dismissal of suit on a forum non basis before determining jurisdiction was appropriate.
Ascertaining the Applicable Law
28 U.S.C. § 1652: The laws of the several states, except where the Constitution or treaties of the United States or Acts of Congress otherwise require or provide, shall be regarded as rules of decision in civil actions in the courts of the United States, in cases where they apply.
State Law in the Federal Courts
Swift v. Tyson: Held: Under 28 USC § 1652, the Rules of Decision Act, Fed. Cts. required only to follow the statutory laws of the states, unbound by state court decisions.
Black and White Taxicab Co. v. Brown and Yellow Taxi Cab Co.: 2 KY companies, Black and White obtained exclusive rights to a certain train station, unenforceable under KY common law, so B&W reincorporated in TN, brought diversity suit in Fed. Ct., able to enjoin B&Y from competing. Example of forum shopping possibilities created by Swift v. Tyson.
Erie R. Co. v. Tompkins: π walking next to RR, arm severed by something sticking off of passing train. Under PA law, π would have been trespasser and had no cause of action, so sued in Fed. Ct. Held: Brandeis, J rejected Swift rule, citing forum shopping, lack of federal/state uniformity, and impossibility of equal protection. Also new research suggested that Congress intended common law to be included in RDA. So, federal courts must apply all law of the state, and are not authorized to interfere in state jurisprudence except where authorized by Congress.
Guaranty Trust Co. v. York: Held: Outcome of federal diversity cases should be substantially the same as would be in state court, therefore federal courts required to apply any rule of state law that would be “outcome determinative” even if nominally “procedural.” In this case, fed. ct. sitting in diversity required to apply state statute of limitations.
Byrd v. Blue Ridge Rural Electric Cooperative, Inc.: π brought claim that under SC law would have been decided by judge. Held: (Brennan) While judge v. jury question might be outcome determinative, it’s largely procedural, and given 7th Amendment, federal courts interest in providing a jury trial in civil cases is an “affirmative countervailing consideration” to the outcome determinative test.
28 U.S.C. § 2072: Rules Enabling Act. Allows SCOTUS to determine rules of practice and procedure in fed. cts.
Hanna v. Plumer: Service of process on MA Δ made in accordance with FRCP but in violation of MA state law. Held: (Warren) When determining whether to apply state law, first determine if there is a direct conflict between FRCP and state law. If so, follow the REA and apply federal law. If not, use an Erie/York analysis. Harlan, J, concurring, suggested that, in the interests of fairness and predictability, state rules should prevail when “the choice of rule would substantially affect…primary decisions reflecting human conduct.” Harlan’s standard tends to get applied when no federal law directly on point.
Walker v. Armco Steel Corp.: Held: limited/clarified Hanna as being about cases where a federal rule was clearly applicable. In the instant case, it is unclear whether FRCP 3 is intended to affect state statutes of limitations, so they should still be applied following an Erie/York analysis.
Gasperini v. Center for Humanities, Inc.: Held: Ginsberg, J updated York/Byrd analysis, weighing federal interests against the “outcome effective” nature of applicable state statute.
Klaxon Co. v. Stentor Electric Mfg. Co.: Held: Federal courts should apply state law and state choice-of-law rules as determined by the highest court of the state in which they sit.
In the absence of a clear ruling by the state’s highest court, federal courts can either (1) certify a question to the state high court or (2) “act as another court of the state” considering previous relevant decisions from lower courts, high court dicta, all other authorities that would be considered by a state lower court.
3 theoretical approaches to Federal Common Law:
Meltzer: Enclave theory – federal common law confined to narrow “enclaves” of federal interest or a great need for national uniformity.
Field: Coextensive theory – federal common law authorized so far as Constitution or federal statute enable its creation.
Kramer: Most limited - would require explicit legislative justification for creation of a federal common law rule.
Clearfield Trust Co. v. United States: Held: following an enclave theory, the rights and duties of the United States on commercial paper which it issues are governed by federal rather than local law.
Boyle v. United Technologies Corp.: π father of Marine killed in helicopter crash during training exercise, sued Δ contractor for negligent design. Held: (Scalia) Even lacking legislative approval, federal interests justify immunity from private actions for military contractors on designs subject to federal government approval. ps. this ruling is total bullshit and i hate it and Brennan DESTROYS it in his dissent.
Federal Law in the State Courts
Dice v. Akron, Canton & Youngstown R. Co.: Held: When suit brought in state court under federal statute, federal law should apply in the interests of nationwide uniformity.
Stating the Case: Pleading
The Development of Modern Procedure (Background)
Early common law pleading rules were very stringent, made things really difficult on parties. Modern procedural rules designed for efficiency, ease, to give people the chance to bring their case.
The Complaint -- Notice Pleading
Federal Rule of Civil Procedure 8(a), (d), & (e): (a) Establishes that a pleading requires establishment of jurisdiction, “short plain statement of the claim showing that pleader is entitled to relief,” and a demand for relief. (d) failing to deny another party’s claim in a responsive pleading has the effect of an admission. (e) (1) pleadings should be concise, direct, and consistent. (2) Parties can set forth two or more claims or defenses, only one has to be valid to make pleading valid.
Dioguardi v. Durning: Held: despite lack of sophistication of pro se π’s claim, it showed “enough to withstand a mere formal motion” to dismiss. Modern FRCP don’t require that a pleading state facts sufficient for a cause of action, just a claim that the π is entitled to relief.
Conley v. Gibson: Held: When ct. facing a motion to dismiss for failure to state a claim, can’t dismiss unless there is “no set of facts under which π could prevail.”
Swierkiewicz v. Sorema N.A.: π brought age-discrimination suit against former employer under ADEA. Held: District Court’s requirement that π’s complaint establish a prima facie case erroneous, as requiring π to establish facts that might be better determined during discovery. All that’s necessary in complaint is “short and plain statement” under Rule 8.
Bell Atlantic Corporation v. Twombly: πs local phone companies bringing antitrust suit against major national phone companies. Held: allegations of parallel conduct without other facts suggesting an explicit agreement are not enough to establish a claim in an antitrust case. Seems to overrule or at least takes serious issue with Conley v. Gibson.
Post-Twombly: uncertainty as to whether Twombly (1) opens up courts’ ability to evaluate the plausibility of a claim; or (2) is limited to antitrust cases (prisoner’s rights case decided in the same year suggests this); or (3) is a disguised summary judgment case.
The Complaint -- Heightened Pleading
Federal Rule of Civil Procedure 9: Requires “particularity” in pleading of “fraud or mistake.”
Denny v. Carey: πs brought securities fraud class action suit, Δs alleged that πs failed to meet “rigorous” burden of particularity requirement. Held: Particularity requirement has to be reconciled with the goals of Rule 8. Burden is not “rigorous” but merely requires that πs bring a clear enough allegation that Δs can come up with an answer.
Post-Denny Congress passed the PSLRA, requiring super-heightened pleading, including a scienter requirement, in securities fraud cases. Concern is that these types of cases are particularly susceptible to frivolous claims.
Tellabs, Inc. v. Makor Issues & Rights, Ltd.: Held: PSLRA requires courts to compare competing inferences in securities fraud complaints. If inferences favourable to π are at least as likely as unfavourable inferences, suit can be brought. (Scalia, in dissent, argued that favourable inferences needed to be more likely.)
The Motion to Dismiss for Failure to State a Claim
Federal Rule of Civil Procedure 12(b), (e),(g), & (h): Most important – 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted.
American Nurses’ Association v. Illinois: πs bringing sex discrimination class action against state. Held: (Posner) Rule 8 requires deference to πs when validity of claims is ambiguous. (contrast with Twombly).
Federal Rule of Civil Procedure 8(b) & (c): 8(b) denials: can give a general denial of all allegations in the pleading, but don’t usually want to.
Federal Rule of Civil Procedure 15: (a) allows amendments before responsive pleading filed or with permission of court and adverse party. (c) relation-back provision: allows πs to change the name of Δ , if actual Δ on notice of suit. Requirements for relation back: (1) mistake; (2) Δ has to be on notice of mistake w/in 120 days of original filing; (3) Claim has to arise out of same nucleus of operative fact; (4) has to be named Δ that changes, not unnamed (Worthington v. Wilson).
Worthington v. Wilson: Police brutality suit where π left individual policemen unnamed, then tried to add them under relation back statute after statute of limitations had run out. Held: Relation-back provision intended to correct mistakes, here there was no mistake, but rather a lack of knowledge. Relation back can’t be used to name previously unknown Δs after statute of limitations has run out.
Federal Rule of Civil Procedure 13: 2 types of counterclaims: (1) permissive – any claim Δ has v. π; (2) compulsory – arises out of transaction/occurrence that is subj. of orig. claim and doesn’t bring in any other parties. Has to be brought or else subject to claim preclusion.
Provisions to Deter Frivolous Pleadings
Federal Rule of Civil Procedure 11: Requires attorneys to attest to validity of suits, provides for sanctions if they’re found to be frivolous. Includes a safe harbour rule that allows improper docs. to be withdrawn w/in a certain period of time w/out sanctions.
Case Management & Discovery
Rule 16 and the Development of Case Management Techniques
FRCP 16: requires conference to determine schedule, facilitate process. Aligned with notions of judicial efficiency, judges not just as distant arbitrators but as managers of process.
Velez v. Awning Windows, Inc.: Held: Δ’s failure to meet deadlines, provide requested documents/pleadings justified summary judgment in π’s favour.
The General Scope of Discovery
Generally, anything related to claims and defenses discoverable.
Relevance and Limitations
Federal Rule of Civil Procedure 26(b)(1), (b)(2), & (c)
Limits: (1) anything where burdens or consequences of discovery outweigh the benefits; (2) anything duplicative.
Mandatory Disclosure and the Discovery Plan
Federal Rule of Civil Procedure 26(a) & (f)
The Mechanics of Requested Discovery and Electronic Discovery
Federal Rule of Civil Procedure 30(a)-(c): covers depositions
Federal Rule of Civil Procedure 33: covers interrogatories
Federal Rule of Civil Procedure 34: covers documents and electronically stored material.
Generally, can discover (in order of preference): (1) documents; (2) depositions; and (3) interrogatories. Generally try to avoid interrogatories because written by opposing council, but they do provide: (1) identification of documents; (2) responses to pleadings; and (3) hints to other side’s theory/strategy.
Privileges and Work Product
Hickman v. Taylor: Suit regarding tugboat accident, π’s lawyer requested transcripts and notes from interviews Δ’s lawyer had done with potential witnesses. Held: “Work product” privileged as long as π unable to provide adequate justification for compelling production.
Upjohn Co. v. United States: Held: Attorney-client privilege in the corporate context extends to all employees of the corporation. Absent a showing of unavailability or necessity, work product privilege applies to any work prepared by attorney in preparation for current or potential litigation.
3 ways to waive/destroy atty-client privilege: (1) interviews in front of a stranger; (2) talking out of turn; (3) inadvertently revealed docs. – likely to be frowned upon by the court or a setup by the other party.
Adjudication Without Trial: Summary Judgment
Suggests that there’s no issue of material fact to be determined. Designed to weed out frivolous claims.
Summary Judgment in Operation
Federal Rule of Civil Procedure 56
Adickes v. S.H. Kress & Co.: π teacher in “Freedom School” arrested for bringing black children to eat at Δ’s lunch counter. Brought suit alleging Δ conspired with police to have her arrested, alleged only hearsay evidence of conspiracy. Δ moved for summary judgment. Held: Moving party must foreclose finding that the allegations of the non-moving party could be true.
Celotex Corp. v. Catrett: Asbestos case, π’s evidence that decedent was exposed to Δ’s product questionable/inadmissible. Δ moved for summary judgment, offering no evidence to disprove π’s claims. Held: Moving away from Adickes, parties have the burden of establishing in summary judgment elements on which they will bear the burden of proof in trial. Once moving party has challenged validity of non-moving party’s claims, non-moving party bears the burden of answering.
Anderson v. Liberty Lobby, Inc.: Held: The evidence standard necessary for summary judgment is the same as would be necessary at trial for a specific claim.
Matsushita Electric Industrial Co. v. Zenith Radio Corp.: Twombly at a later stage. Evidence of parallel conduct not enough to escape summary judgment in anti-trust cases.
Scott v. Harris: π bringing suit v. police officer related to injuries incurred in high-speed chase. Stong material differences between π and Δ’s versions of story, but video tape of chase supported Δ. Held: While questions of fact should be left to juries, summary judgment is valid if the facts are such that no reasonable jury could rule for one party. In summary judgment decisions relevant facts should be reviewed in light most favourable to non-moving party, but only as far as supported by the record.
The Binding Effect of Prior Decisions: Res Judicata and Collateral Estoppel
Claim Preclusion (res judicata)
“a valid final adjudication of a claim precludes a second action on that claim or any part of it.”
Mathews v. New York Racing Association, Inc.: Δs racetrack owners and security co., π racetrack customer, alleging mistreatment by Δs’ agents. In prior case, π brought assault and libel charges against Δs’ employees. Held: A claim is made up of the facts surrounding an occurrence giving rise to a suit. Since previous suit arose from same claim, π is precluded from bringing this one. πs can’t be able to splinter their claims into multiple suits.
Federated Department Stores, Inc. v. Moitie: πs 2 of 7 πs in original suit, others appealed loss, πs chose to refile in state ct – removed to fed. ct. and dismissed for res judicata. Other πs won appeal. Held: “there is no principle of law or equity which sanctions the rejection by a federal court of the salutary principle of res judicata,” even when original suit had effectively been overruled.
“an issue or fact of law, actually litigated and resolved by a valid final judgment, binds the parties in a subsequent action.”
Pros of issue preclusion: stops gamesmanship, forces finality, makes system more efficient.
Cromwell v. County of Sac: Action on bonds/coupons. Previous action had been brought by π’s agent on earlier coupons from same bonds. In previous action, it was found that π hadn’t given value for the coupons (and therefore had committed fraud). Held: While it was found that π did not give value for previous coupons, he has a right to prove that he has given value for those in present case, as that issue was not actually litigated at trial.
Post-Cromwell definition of issue expanded. In determining if an issue is precluded, consider: (1) could the issue have been litigated at the original litigation? (2) was the issue foreseeable? (3) does the passage of time between the two litigations make a difference to the issue?
Rios v. Davis: π injured in car crash with Δ, brought suit for injuries. In previous litigation, π’s employer had brought suit v. Δ for damage to truck and Δ had impleaded π for damage to car. Previous suit found comp. neg., denied both parties recovery. Held: Finding of π’s negligence in previous suit was not necessary or essential to the outcome and π had no chance to appeal it. No collateral estoppal
The Required Quality of Judgment
Has to be valid, final, and on the merits. Hard to determine in summary judgment cases or judgment by consent.
Persons Benefited and Persons Bound by Preclusion
Traditionally, mutuality required for issue preclusion – only applied to parties bound by original decision.
The Decline of Mutuality Doctrine
First casualty: relationships of indemnification.
Parklane Hosiery Co. v. Shore: πs bringing stockholder class action against Δ, SEC filed claim against Δs on some of same issues, decided against Δ. π’s moved for summary judgment v. Δs on issues ruled on in SEC suit. Held: In cases of offensive nonmutual collateral estoppel, consider (1) whether π could easily have joined earlier action and (2) fairness to Δ – how hard did they try/how fair was previous litigation?
Semtex Intl Inc. v. Lockheed Martin: Held: Res judicata effect of a federal court sitting in diversity should be the same as that of a state court in the state where court sits.
Prelude: Joinder of Parties
Federal Rule of Civil Procedure 20: provides for permissive joinder of parties with claims arising from same transaction.
Federal Rule of Civil Procedure 19: (sexiest FRCP, according to mckenzie) (a) names people to be joined if feasible – “indispensible parties.” (b) gives court leeway to determine what to do with suit if joinder of indispensible parties not feasible
Provident Tradesmens Bank & Trust Co. v. Patterson: Held: When determining whether a party is indispensible, courts must consider (1) π’s interest in having a forum; (2) Δ’s interest in avoiding multiple litigation; (3) interest of party to be potentially joined; (4) judicial efficiency and consistency.
Federal Rule of Civil Procedure 23: (a) basic requirements: (1) have to have a class and a representative; (2) numerosity – joinder has to be impracticable; (3) commonality of interest/question; (4) typicality of representative – have to consider what will happen in litigation, can add named πs to cover all subclasses; (5) adequacy of representation – almost always boils down to a battle about council. (b) types of class actions (1) prejudice classes – individual actions would create risk of: (A) inconsistent judgments; or (B) impairment of abilities to bring suit; (2) civil rights class actions – most common; used mostly for injunctive relief; (3) opt-out class - most controversial because seek damages; used in torts, antitrust.
Castano v. American Tobacco Co.: Attempt to bring suit with everyone in the US who’d ever been or been in privity with a smoker v. big tobacco. Preliminary certified by district court on issues of core liability and punitive damages. Held: District court erred in not considering how a trial on the merits would be conducted when undergoing its predominance inquiry. Especially difficult in fraud cases because individual reliance is a huge issue in fraud.
Hansberry v. Lee: Landowners trying to enforce a racially restrictive covenant. Prior decision by IL courts had found covenant legitimate, that the required 95% participation was met (despite actual participation being only 54%). π’s claimed that homeowners were a class and therefore black homeowner Hansberry bound by previous decision. Held: Conflicts of interest between homeowners made it impossible for them to be considered a class, as representation would be inadequate.
Phillips Petroleum v. Shutts: πs holders of leases to land from which Δ produced gas. 28,100 class members in all 50 states, DC, foreign countries. Sued in KS state ct. and applied KS law, despite 99% of leases and 97% of πs being unrelated to KS. Δ argued that adjudication in KS violated the due process rights of foreign πs – need for minimum contacts or opt-in class, and that application of KS law was inappropriate. Held: (1) Foreign class πs don’t bear the same burdens as foreign Δs and therefore have no need for minimum contacts or opt-in class. (2) but courts DO have to consider material differences between different laws that could be applied, and need significant contact or aggregation of contacts with a certain state to apply its laws.
Amchem Prods. Inc. v. Windsor: Attempt at mass settlement of asbestos litigation. 3rd Circuit refused to take settlement into account when conducting its certification analysis, found significant legal differences between class members and decertified. Held: Settlement must be taken into account when certifying a settlement class, and thus there is no reason to consider manageability of trial. But 3rd circuits predominance inquiry largely correct: material differences between those already affected by asbestos and those exposed but not yet sick made representation inadequate, certification impossible. (Breyer, dissenting, argued that SCOTUS didn’t give enough value to settlement/need for nationwide processing of asbestos claims.)
Ortiz v. Fibreboard Corp.: Held: Mandatory settlement class in asbestos litigation that excluded πs who had already brought suit and contained material differences between different groups of πs failed to meet certification requirements of fairness and inclusiveness.