CIVIL PROCEDURE



CIVIL PROCEDURE

SPRING SEMESTER 2003

I. DISCOVERY CONTINUED

Rule 26 requires parties to disclose certain information to the other parties without waiting for a discovery request. However, Rule 26 also has provisions allowing the stipulation of the parties of the court order to modify some disclosure requirements.

a. WORK PRODUCT; ATTORNEY-CLIENT PRIVILEGE

i. Work-product privilege – 26(b)(3) – this is to protect exploitation of the lawyers work done in preparation or anticipation of litigation. It is called a QUALIFIED IMMUNITY because it can be overcome with a showing of sufficient hardship or no way that the other party can get the material.

ii. Attorney-Client Privilege: This is different, and is limited to direct communication between the attorney and the client(s). It is a common law creation and has 4 elements: 1. Communication (of any type, written or oral, 2. From client to lawyer (it is stated this way because it is the client that drives the privilege and has the right to waive it), 3. Without the presence of others, and 4. For the purpose of seeking legal advise.

➢ UPJOHN CO. v. UNITED STATES

o FACTS: In 1976 it was discovered that Upjohn or a subsidiary may have made a payment to a foreign government to secure business. Upjohn began to investigate and sent out a questionnaire to employees. The questionnaire was to be regarded as confidential and was used to prepare for potential litigation. When litigation ensued, the IRS issued them with a summons to turn over all information, but they didn’t turn over the surveys because they alleged that they were protected by the attorney-client privilege.

o HOLDING: The court held that the materials were work product and were protected. The communications were protected, but not the underlying facts included in them. The “control-group” test was not used here, and the court allowed the broadening of the attorney client privilege allowable in this context.

b. EXPERTS AND DISCOVERY – Rule 26

A party may depose experts who are expected to be called at trial. The opinions of experts who are retained in anticipation of litigation but are not expected to testify at trial (consulting experts) may be discovered only upon a showing of exceptional circumstances under which it is impracticable to obtain facts or opinions by other means. FRCP 26(b)(4)

➢ CORDY v. SHERMAN- WILLAMS CO. (486)

o FACTS: P suffered damages while riding his bike over a railroad track and retained Green (expert) to work on their behalf, he later returned the retainer, and at trial he was working for D. P wanted to move to bar him from being used as an expert because a previous confidential and fiduciary relationship has existed with Green.

o HOLDING: The motion was granted to dismiss Green as an expert. There are several times when it is ok for an expert to switch sides. 1. There are no other experts, 2. There was no retainer in the 1st place, and 3. That the first party hired all or most of the experts to prevent the other side from having them. None of these situations existed here.

➢ COATES v. AC&S INC. (486)

o FACTS: This focuses on 26(b)(4)(B) and the hurdle that must be surpassed to get information from a non-testifying expert. P died and samples of his tissues were sent to both P and D to determine if he had really died of peritoneal mesothelioma. This is a motion on P to compel discovery of the experts consulted by D. The courts want to prevent “expert shopping”

o HOLDING: This case showed the exceptional circ. of 24(b)(4)(B) and that a pathologist or other experts examination of tissue samples is sufficiently analogous to an examination under Rule 35 that the parties have a right to the type of information set out under that rule. Whenever parties send out tissue samples for review – the other party is entitled to discover the results of those studies at their own expense.

➢ BERKEY PHOTO INC. v. EASTMAN KODAK CO (481)

o FACTS: This case demonstrates the importance of ethics in the legal system. Kodak relied on Professor Peck as an expert to explain why Kodak always had high market shares in the film processing industry. Kodak and Peck alleged that they turned over all the documents they had, and that some had been destroyed. Later it was shown that this was not true, and both had documents that had been claimed to have been destroyed.

o HOLDING: Jury found for Berkey on every disputed issue.

c. INTERROGATORIES AND THE ADVERSARIAL ADVOCATE/ ETHICAL BEHAVIOR IN DEPOSITIONS

i. Important rules for when you can compel attendance at a deposition:

1. nonparty ( 30(a) and 45(d)(1)

2. Party who is sued or is suing in their individual capacity ( 37(d)(1)

3. Corporate entity ( 30(b)(6) or 37(d)(1)

ii. Where depositions may be taken

1. Of a party ( 26(c)

2. Of a nonparty ( 45(b)(2) or 45(c)

iii. Recourse for deposition misconduct:

1. 26, 30(d), 32(b)

iv. Rules for preparing a client for deposition

1. Witness are under oath and obliged to tell the truth

2. They are not required to answer questions that have not been asked, should not respond to a questioners tone, and should not argue with the questioner

3. Witnesses should not volunteer information, guess, speculate or assume

4. Witnesses should make sure that they understand the question being asked

5. A question that calls for a narrative response should be prefaced with “as I recall” so that they can later change their minds.

➢ ROZIER v. FORD MOTOR COMPANY (497)

o FACTS: P’s husband died as a result of an accident in his Ford Galaxie 500, this case arose when P learned that Ford had failed to disclose a document (Trend Cost Estimate Document) covered by P’s interrogatories and that the failure to disclose constituted fraud and entitled her to relief under 60(b)(3).

o HOLDING: The court saw the defense counsel as sabotaging the trial machinery and that this is equivalent to deliberate mismanagement which is fraud and from which there can be relief from judgment. Ford was wrong and the new trial was required.

➢ PARAMOUNT COMMUNICATIONS v. VIACOM INC. (511)

o FACTS: This was the case where the lawyer was an overall jackass and yelled at the opposing lawyer and swore at him. FRCP 30(d)(1) states that objections during a deposition must be concise, non-argumentative and non-suggestive. Ultimately threatening is not a good technique and is not allowed. Using profane language is also not allowed nor is insulting the other side.

v. Appealability of Discovery Orders

1. GENERAL RULE: Orders enforcing subpoenas issued in connection with civil and criminal actions, or grand jury proceedings are not final and therefore not appealable.

2. You can make interlocutory appeals – but this applied to the situations where decisions can be appealed immediately.

II. DISPOSITIONS AND ADJUDICATIONS: SETTLEMENTS, PRETRIAL CONFERENCES AND OTHER MANUEVERS

a. RULES/STATUTES

i. FRCP 16 ( the rule encouraging pre-trial conferences. This rule is the basis of authority for a trial court judge to schedule a conference.

ii. FRCP 54(d) ( Minor rule. A reference to the district court judges authority to order “costs”

iii. FRCP 68 ( Very important Rule: Offer to settle, costs, and the meaning of “costs”

iv. 28 USC 1920 ( “COSTS” a procedural statute that defines costs in the federal court

v. 42 USC 1983 ( Civil Rights Statute.

vi. 42 USC 1988 ( Civil Rights Attorney’s Fee Awards Act. Section of the civil rights act that accompanies 1983. You can’t use this attorney’s fee award without the accompanying 1983.

b. LITIGATION ISSUES: Who pay’s for what?

i. Attorney’s Fees: Often attorney’s fee award provisions are linked to particular statutes or types of cases to promote the bringing of these cases and encourage pro bono work. There is usually a legislative impetus to have a lawyer bring the case.

1. Attorney’s fees = hourly rate * hours * lodestar (multiplier increasing the fees by the complexity, difficulty or importance of the case)

ii. American Rule: Each side pays its own way

iii. English Rule: Loser pays

iv. Costs: These include everything but attorney’s fees: Cost of filing, depositions, court reporters, experts etc.

v. Settlements: Pros and cons. When rules are crafted like FRCP 68 it encourages people to settle and this is less finding of the truth and more a cost benefit analysis for each case.

➢ MAREK v. CHESNY (527)

o FACTS: Petitioners were police officers who shot and killed respondent’s son when responding to a domestic disturbance call. They made a settlement offer of $100,000 and respondent didn’t accept it and the case went to trial. After the holding, respondent filed a request for $171,692.47 in costs including attorney’s fees accrued after the settlement offer. Petitioners opposed based upon FRCP 68 and the district court agreed.

o HOLDING: Petitioners are not responsible for costs incurred after the offer of settlement. FRCP 68 discourages parties and their attorneys to go forth with a case after a reasonable settlement offer has been made. If your client doesn’t want to settle you have to make it clear to them that they are facing paying the attorney’s fees.

III. SUMMARY JUDGMENT – FRCP 56 – SUPREME COURT TRILOGY

SJ must be granted if, from the pleadings, affidavits, and discovery materials it appears that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. The court may not decide disputed fact issues on a motion for SJ; if there is a disputed issue of material fact the case must go to trial.

a. KEY DIFFERENCES BETWEEN FRCP 56 and 12(b)(6)

i. 12(b)(6) you argue that even if you take everything P says as true, there is still no legal claim. The result of granting a 12(b)(6) motion is that the case is dismissed.

ii. 56 is a motion that you have a claim, but that the claim is factually insufficient. There is no genuine issue of material fact. You need to look at everything that has been submitted, and say that even without all of this information, P has not produced sufficient evidence to go to trial. P’s burden of persuasion is preponderance of the evidence. If D is moving for SJ, they are required to develop enough evidence to make sure that P doesn’t get above the 50% point.

iii. The party opposing SJ will always argue that not enough time has elapsed to develop the evidence necessary to defeat the motion

➢ ADICKES v. S.H. KRESS & CO. (562)

o FACTS: P is a white school teacher from NY who was working with the Mississippi Freedom School and when she went out to lunch with some of her students (all black) she was refused to be served and then when she left the restaurant she was arrested for vagrancy. She alleged a violation of her 14th amendment rights and a conspiracy on the part of Kress and the police. She needed the conspiracy action to remain in the state court.

o HOLDING: There was enough evidence to get around a summary judgment motion - where the evidentiary matter in support of the motion does not establish the absence of a genuine issue, SJ must be denied even if no opposing evidentiary matter is presented. The dispute as to whether there was a police officer in the restaurant or not was a lack in credibility of the witnesses and it is wise for the judge to send this to trial because he can’t make decisions on facts.

o The Adickes standard is liberal in letting the case proceed and limiting summary judgment

b. COMPARING FRCP 56

i. Compare to FRCP 50(a) – Judgment as a matter of law (JMOL): this is the argument that no jury could possibly find for the non-moving side. Based upon everything in the record there is no genuine issue of material fact and the moveant should prevail as a matter of law.

ii. Compare with FRCP 50(b) – Renewed JMOL. This is the same argument but it is raised after the jury has come back with a decision. This happens before the entering of a final judgment and an official appeal. To raise this you had to have raised 50(a) and it is also known as a JNOV or judgment not withstanding the verdict.

c. SUPREME COURT TRILOGY

➢ CELOTEX CORP v. CATRETT

o FACTS: Celotex was involved in a wrongful death action based upon decedent’s alleged exposure to defendant’s asbestos product. D moved for summary judgment alleging that there was no evidence connecting them to any asbestos to which decedent had been exposed. Key here was how much D had to produce in terms of a burden of production to meet the SJ standard and shift the burden to P to show evidence that he was exposed to asbestos from D’s products.

o HOLDING: The court didn’t overrule the case, they shifted the interpretation of what D has to do. Celotex was entitled to SJ because P failed to uncover ay evidence on an essential element of her case which she would have the burden of proving at trial. This is a finger-pointing notion. If P had been able to muster up sufficient evidence to make out its claim – and trial would have gone on.

➢ MATSUSHITA ELECTRICAL INDUSTRIAL CO. v. ZENITH RADIO CORP. (571)

o FACTS: This case is a continuation of the move towards a more relaxed standard for D in Summary Judgment. The court reversed the holding that SJ was inappropriate for complex anti-trust cases.

o HOLDING: Factual context renders the respondents claim implausible and they would need to come forward with more evidence to support their claim than otherwise needed. This showed that anti-trust cases don’t always have to go to trial if it can shown that P had enough time to develop the record and has not done so – D can point to the absence of elements of P’s case and SJ will be granted.

➢ ANDERSON v. LIBERTY LOBBY (572)

o FACTS: This was a case dealing with defamation and libel where there is a requirement of actual malice to recover. This actual malice standard has to be Clear and convincing.

o HOLDING: Supreme court held that whenever the standard required is clear and convincing this should be incorporated into the summary judgment standards so that if D is moving for SJ where P has the burden of proof the argument would be that there is no way P can meet the higher standard. Same basis – SJ is appropriate where the evidence is so one sided that one party must prevail as a matter of law.

IV. THE JUDGE

What makes a qualified judge: Is it paper prestige in school, professional accomplishments post J.D, life experience, temperament or a combination of all.

a. THE SHORT CASES: 618-622

➢ US v. HATAHLEY

o FACTS: District court judge was deemed too impartial to hear cases about the Native Americans based upon her opinions of what should be done with Native American land and live stock.

o Language was used as a bias. You have to look at what language was used, and in what context to determine if you have a bias or not.

➢ HAINES v. LIGGERT GROUP

o FACTS: This was a case dealing with the tobacco industry. The judge had previously referred to the tobacco industry as the kings of concealers of evidence.

o This was a case of a judge acting impartially.

➢ PENSYLVANIA v. LOCAL UNION 542, INTERNATIONAL UNION OF OPERATING ENGINEERS

o FACTS: Higginbotham was charged as being unable to be partial because he had been involved in race discrimination cases and racial issues.

o He uses this to argue that if he is biased because of his experience, then everyone else would also be biased because they didn’t have these experiences.

b. OTHER CASES

➢ BLANK v. SULLIVAN & CROMWELL

o FACTS: Judge was asked to be removed because she was too experienced in issues of sex and race discrimination. She was involved in Brown v. Board of Ed.

o She responds that nowhere in the affidavits does it show that she has any personal relationship with the parties that would influence her opinion, and if race and gender were a basis for bias, then every judge would be biased.

c. JUDGE’S POWER

i. Contempt

➢ NEW YORK STATE NATIONAL ORGANIZATION FOR WOMEN v. TERRY

o FACTS: Contempt orders came because people were trying to get into the clinics and Terry had been ordered to comply with earlier orders to cease blocking entrances but did not do so. Issue was how to determine what kind of contempt (civil- to compensate the plaintiff or coerce D from doing something wrong or criminal- to punish) was appropriate.

o HOLDING: After the temporary restraining order and the temporary injunctions were all violated by Terry the contempt citations were filed at $25,000 a day. Terry says this as an admittance of guilt and wanted to appeal this as a criminal contempt charge to get a jury. The court says it doesn’t matter here what the contempt charges were because the purpose of the order was to get him to stop, and if he had done that he wouldn’t have had to pay. KEY: The judge should be careful at the outset of exercising contempt power to distinguish between the rationales they are using to that later if there is an appeal they can use those materials to justify their behavior.

ii. Sanction:

1. Rule

2. Inherent

➢ CHAMBERS v. NASCO INC

o FACTS: The key here is why you need an inherent power to sanction on top of the FRCP rules. FRCP 11 states that when the papers are signed the signature is used to validate or confirm that every paper filed has been looked at and is valid and in good faith. Here the parties were trying to get out of an agreement without documentation but creating a new agreement with documentation.

o Here you need the inherent power to sanction as a proactive rule unlike contempt actions which are more of a reactive rule.

V. THE JURY – THE SEVENTH AMENDMENT RIGHT

a. KEY POINTS

i. Applies to Federal Court only as trial by jury in civil cases when it is a suit at common law.

ii. Each state has their own right to jury trial rules

iii. In criminal cases the right to jury trial is 6th amendment.

b. FRCP 38 – Jury Trial of Right:

i. Right as preserved by the 7th amendment

ii. Party can demand a jury trial on any issue protected by the Constitution of by US statute if they meet the requirements

iii. In the demand they must specify which issues they want to be heard by the jury

iv. Failure to serve and file constitutes a waiver of this

c. PROS AND CONS OF JURY TRIAL

|Pros of Jury Trial |Cons of jury trial |

|Reasonable person standard |Notion of the complexity exception |

|Everyday person may be better to determine points than a judge |Judge knows law better – legal competence |

|Lay people should decide the case |No chance of a hung jury |

|Lack of prejudice? |Moral rectitude? |

|Emotion v. Reason |Lack of |

|More minds are better than one – more open debate |prejudice? |

d. 7th AMENDMENT DOCTRINE + PRECEDENT

i. Text: In suits at common law where the controversy shall exceed $20 the right of trial by jury shall be preserved

1. In suits at common law – this is talking about the equity/law distinction.

a. Equity is non-monetary ways of addressing the harm done

b. Law is money damages

2. Where the amount in controversy exceeds $20 – this is a nominal barrier at this point. Not a big issue

3. The right of trial by jury shall be preserved – at the time 1791 the right to jury trial already existed, the 7th amendment isn’t creating this, it’s preserving it.

ii. What does this mean today? To determine if there is a right to jury trial:

1. Look at the history of the cause of action – where would it have fallen pre 1791

2. Look what relief is requested

➢ CURTIS v. LOETHER (791)

o FACTS: Petitioner brought this case because she claimed that the white respondents refused to rent an apartment to her because she was black. She sought only injunctive relief and punitive damages, and later added compensatory damages. The issue is the interpretation of a modern civil rights statute that prohibits discrimination in housing based upon race. D is the one that wants the jury trial here, and P is trying to prevent it. That is how this case makes it to the Supreme Court.

o HOLDING: 7th amendment does entitle either party to a jury trial. The judge looked at the two part test: History – the 7th amendment can apply to new statutes. Look to see if it is similar to a 1791 COA, the court says this is similar to the harm of an injury in tort and that would have gone to a jury. Second: Relief requested- there is a request for damages, this also points to a right for jury trial.

e. THE ORDER OF PRESENTATION AT TRIAL

Often there are legal and equitable issues mixed together and the court has to determine how to handle these issues for trial.

➢ BEACON THEATERS, INC v. WESTOVER (663)

o FACTS: First case where Supreme Court looked at mixed law/equity cases. The two theater companies were disputing the issue of “clearances” and the rights of first release of movies. Beacon felt that D’s clearances violated antitrust laws and D claimed that Beacons threats deprived them of valuable property rights and filed a “Complaint for Declaratory Relief” and Beacon filed a counter claim and demanded a jury trial.

o HOLDING: The facts pertaining to the case that ask for damages (legal relief) need to be tried first to preserve the right to jury trial. 1st there is the jury phase, and 2nd the judge/equity phase. Liberal joinder rules allow these claims to be brought as one case, but the legal issues must proceed first.

f. IS THERE A COMPLIXITY EXCEPTION?

This results in a functional approach to deal with cases that may be beyond the abilities of the basic juror. Must look at two issues: First, the two part test, and second, whether juries are capable of hearing the case.

➢ MARKMAN v. WESTVIEW INSTRUMENTS INC

o FACTS: Some sort of patent case and there is a dispute over whether an issue should go to jury.

o HOLDING: The construction of the patent including the terms of art within its claim are within the province of the court. The interpretation of the word “inventory” is therefore for the judge not the jury.

VI. CHOOSING THE JURY

The process that the lawyers engage in when picking a jury is based upon the concept that from the jury pool each lawyer gets to exercise 3 different strikes or challenges to get an individual out of the jury pool.

a. THE THREE CHALLENGES:

i. For Cause – When there is an on the table, above board, judicially approved reason for why a particular juror should go. There is an ethical obligation during voir dire for lawyers to eliminate people they have a relationship with.

ii. Peremptory Challenges – These are unexplained strikes, you are limited on the number of this type of challenges that you can make. Historically you didn’t have to explain these at all.

iii. Modified Peremptory – These came into being as a result of evidence that revealed that peremptory strikes were being used to cloak juror striking based upon race and gender.

➢ BATSON v. KENTUCKY

o FACTS: P was about to use the argument that members of his race (black) were being eliminated from the jury with peremptory challenges. The court said that discrimination was not allowed in governmental actions, but didn’t know if it applied to private actions as well. This case established the notion of the BATSON CHALLENGE: It is a prima facie case of racial prejudice and can only be rebutted if the other side can come forth with a non-discriminatory reason for why the jurors were struck.

➢ THIEL v. SOUTHERN PACIFIC CO. (680)

o FACTS: P jumped out of a moving window of a train and sued the company. P demanded a jury trial and then moved to strike the entire panel because there were no members from his class of society on the jury. The court denied this and went along with the case, but eventually cert was granted.

o HOLDING: There was improper jury selection because they court was deliberately and intentionally excluding day laborers from the jury pool. The judgment was reversed (judgment reversal is the only remedy for improper jury selection) and there was to be a new trial with a proper jury.

➢ EDMONSON v. LEESVILLE CONCRETE CO. (685)

o FACTS: P was injured on the job site and evoked his right to a jury trial. During voir dire the other side was using their peremptory challenges to eliminate black individuals from the jury. After the holding, P appealed, the Court of appeals reversed and ultimately cert was granted due to the Court of appeals split

o HOLDING: The court must entertain a Batson type challenge to private litigant’s racially discriminatory use of peremptory challenges in a civil trial.

➢ J.E.B. v. ALABAMA ex. rel. T.B. (691)

o FACTS: State of Al. filed this to get paternity and child support out of JEB. When jury selection was happening the state was using all its challenges to remove male jurors and the P was using his strikes to remove women, this resulted in an all female jury. P argued that based on the equal protection clause of the 14th amendment the Batson challenge applied to gender as well as race.

o HOLDING: Equal protection clause forbids peremptory challenges on gender as well as race especially where it is used to ratify and perpetuate stereotypes about men and women. Judgment reversed.

VII. MOTION FOR JUDGMENT AS A MATTER OF LAW; MOTION FOR A NEW TRIAL – FRCP 50

a. 50(a) – Motion for Judgment as a matter of law:

i. Historically a judge could direct a particular verdict whenever the evidence, viewed in the light most favorable to the party against whom the verdict was directed and without considering the credibility of witnesses – was such that reasonable persons could come to only one conclusion. Today this motion can be made a any time before submission of the case to a jury and the moving party must specify the judgment sought and the law and facts upon which it is entitled to judgment.

b. 50(b) – Renewed motion for judgment as a matter of law – JNOV

i. Historically, the party against whom judgment was entered could move for JNOV if the judgment was based upon a verdict that a reasonable person could not have reached and if the moving party had sought at JMOL at the close of all evidence. It must be filed no later than 10 days after the entry of judgment.

ii. Both parties can file these, and there can also be partial judgment motions.

iii. If this motion is lost then there can be a new trial or an appeal.

➢ REEVES v. SANDERSON PLUMBING PRODUCTS, INC. (729)

o FACTS: Reeves was 57 and had spent 40 year working for respondent. He was fired on the basis that he was not keeping accurate enough accounts, and that result productivity was down. He alleges that he was fired due to his age. DC denied the JMOL two times. DC holding for P. Court of appeals reversed and held that P had not introduced sufficient evidence to sustain the jury’s holding. Eventually cert granted.

o HOLDING: DC was correct in submitting the case to a jury – P must not always introduce additional evidence of discrimination and D was not entitled to JMOL. Based upon the McDonnell Douglas standard: P was a member of a protected class, he was qualified for the position, he was fired by the respondent, and was replaced by younger persons. This is sufficient to shirt the burden to D to show that the action was not discriminatory.

VIII. NEW TRIAL MOTION – FRCP 59

A motion for a new trail must be filed no later than 10 days after judgment is entered. Within that period the court may order a new trial on its own motion as well.

a. THINGS THAT WARRANT RETRIAL

i. Error during trial

ii. Influencing a juror

iii. Verdict is against the weight of the evidence

iv. Verdict is excessive (60)(b)

v. Eluding to a matter not relevant

vi. Engaging in conduct that is fraudulent

vii. Harassment

viii. Prejudice

ix. Inflammatory arguments

➢ SANDERS-EL v. WENCEWICZ

o FACTS: Police stopped a car being driven by P due to a warrant out for his arrest. They handcuffed him and as they were closing the door on the police car he kicked it open and ran. They chased him down and in the struggle he sustained injury to his eye, and then filed a suit alleging use of excessive force denying him of his constitutional rights. When the 2nd jury found for the police, P alleged prejudicial errors, including faulty evidentiary rulings, incomplete instructions to jury, and racially biased peremptory challenges.

o HOLDING: The slamming down of the criminal record after being told not to, to make a point did amount to prejudicial error on the part of the defense council. Reversed and remanded. Have to look at all of the factors – this was prejudicial here because the case was close and the incident was not isolated as well as the fact that it is a black plaintiff against a white defendant.

IX. OTHER OPTIONS

a. For the verdict loser

i. If P is the verdict loser: Making a JMOL motion is going to be difficult to obtain. They are probably going to lose this and should just ask for a new trial or appeal

ii. If D is the verdict loser: First try JMOL this is also difficult to get and then the new trial motion, if that is not granted they too can appeal.

b. 50(c) – Conditional New Trial Motion

i. This refers to the ruling that a judge would make on each party’s new trial motion if it turns out that their ultimate ruling on the JMOL is overturned on appeal. It preserves the right in the trial court if the Court of Appeals overturns the JMOL holding.

➢ WEISGRAM v. MARLEY CO (750)

o FACTS: When firefighters arrived at the home of Bonnie Weisgram they found her dead from carbon monoxide poisoning. Her son brought the diversity action seeking wrongful death actions against the company that made the heater. At trial after P presented 3 inadmissible experts, D moved for JMOL and was denied. The court of appeals said the JMOL should have not have been denied, but then divided over whether FRCP 50 permits them to direct the entry of JMOL or whether it must go back to the district level. Cert Granted

o HOLDING: 8th cir was right in directing entry of the judgment for Marley. There are certain situation where it must go back to the trial judge, but this was no one of them, and the court has the authority to enter the JMOL for cases where on the exclusion of testimony erroneously admitted, there remains insufficient evidence to support the jury’s verdict. Although it is sometimes important for the appellate courts to give deference to the trial court, it is not mandatory.

X. EXCESSIVE VERDICTS

a. REMITTITUR: If the trial judge feels that the jury’s compensatory damage award is so excessive as to “shock the conscious” the judge may order a new trial or may offer the alternative or remittitur.

i. Remittitur is allowed in both federal and state courts and gives the judge broader discretion to grant a new trial.

b. ADDITUR: This is the option on the party of the judge to turn to D and say that he’d be more inclined to grant P a new trial unless D adds some money to the damage award. This has existed in state court for a long time, but you cant have it in Federal court because it was found to be a violation of the 7th amendment by Demek v. Shite

➢ CURTIS PUBLISHING v. BUTTS (762)

o FACTS: This was a libel suit alleging that a game between U. of Georgia and U of Alabama had been fixed. The court returned with a verdict against Curtis for 60,000 in general damages and $3,000,000 in punitive damages. Conditioned upon the failure of Butts to remit the damages in excess of $400,000 a new trial was granted. Curtis’s motion for JNOV was also denied. Butts filed the remittitur and judgment entered at 460,000. Curtis then filed for a new trial under 60(b) which was denied. Issue was whether the $460,000 was appropriate

o HOLDING: The trial court has a duty to determine what allowances for punitive damages should be made and what the maximum amount of these should be. The trial court was fair and affirmed. To determine the amount you want to look at how callous the behavior was, how deep the defendants pocket are to prevent them from doing it again, and deter others from the same activity.

➢ BMW of NORTH AMERICA v. GORE (772)

o FACTS: This was a case of excessive damages. The amount of damage done to P’s car was only $4000 but the jury came back with over $4 million in damages in an attempt to prevent BMW from similar activity in the future.

o HOLDING: The state court reduced the damages to $2 million and then it was later reduced again. There is no specific formula which marks what damages should be, but there are limitations. This allows appellate courts the authority to cut down excessive verdicts in a due process realm.

XI. ALTERNATIVE DECISION MAKING

Arbitration and mediation are not the same. In mediation there is a person who helps the parties work together, but he does not make a conclusive decision about the case. In arbitration, both sides submit their disputes to an arbitrator, and his decision is binding.

a. PROS AND CONS OF ARBITRATION

|PROS |CONS |

|Cuts costs of trial |No jury |

|Less time consuming |No formal procedure |

|Judicial efficiency |Is not relied on a precedent for later cases |

|May keep the relationship better between the parties |No appeal |

|Informality of procedure. FRCP do not apply | |

➢ GILMER v. INTERSTATE/JOHNSON LANE CORP. (781)

o FACTS: D hired P in 1981 as manager of financial services. P was required to register with the NYSE etc, and the application included an agreement to arbitrate any claim arising between him and interstate. In 1987 P was fired at the age of 62 and after filing a complaint with the ADEA wanted to sue D in court.

o HOLDING: The court found that P did not meet the burden of showing that Congress enacted the ADEA intending to preclude arbitration agreements and the holding was affirmed. Looking at the Federal Arbitration Agreement statute the court found that arbitration can be imposed upon these type of agreements since there was no legislative intent otherwise.

➢ WOODS v. HOLY CROSS

o FACTS: Woods, alleged a wrongful death action in federal court for her husband and she claimed damages pursuant to Florida’s wrongful death act. The COA was based upon medical malpractice. D tried to dismiss P’s claim because she didn’t abide by the mandatory mediation panel requirement. District court granted the motion to dismiss and the case was appealed.

o HOLDING: The requirement of a mediation meeting is consistent with the Federal constitution standards so long as she ultimately has her right to a jury trial. She was not unconstitutionally restricted. There is nothing wrong with mandatory layers of alternate dispute resolution before going to trial

XII. THE ERIE DOCTRINE

A federal court, in the exercise of its diversity jurisdiction, is required to apply the substantive law of the state in which it is sitting, including that state’s conflict of law rules. However the federal courts apply federal procedural law in diversity issues.

a. UNIFORMITIES:

i. There should not be outcome determination dependent upon whether the case is brought in state or federal court.

ii. There should also be intra-state or state to state uniformity.

iii. These two will help curb forum shopping and unfair advantages to various parties.

b. RULES OF DECISION ACT – 28 USC 1652

i. The laws of the several states except where the Constitution or treaties of the US, or Acts of Congress otherwise require or provide shall be regarded as the rules of decision in civil actions in the court of the US in cases where they apply.

ii. In Swift v. Tyson the court determined this to mean only codified statutes and state law, but not case law. In this case the court held that there was such a thing as Federal Court common law, and that when there is no hard law of the state to rest upon, the Federal court has the power to determine the law on its own.

iii. This notion was overturned in Erie Railroad v. Tompkins

c. RULES ENABLING ACT – 28 USC 2072

i. This becomes important after the FRCP become active. It has two provisions:

1. The Supreme Court provides rules of practice and procedure

2. No Federal rule of practice or procedure can abridge, enlarge or modify any substantive right.

➢ ERIE RAILROAD v. TOMPKINS (819)

o FACTS: Tompkins was walking along a beaten footpath along the train tracks and was struck by something protruding from an Erie train. He claims that he is a licensee because of the common use of the footpath and has brought his case in the federal court of southern NY. Erie wants to invoke PA law which would make him a trespasser and they would have no duty to unlawful trespasser unless it was wanton or willful. Question for the Supreme Court because whether the Federal court could overlook the PA rule

o HOLDING: There is no general federal common law for the federal courts to rely upon; state law should be used in diversity suits on substantive issues. This case represents the determination of what law applies.

d. DEFINITIONS:

i. Substantive Rule: One that characteristically and reasonable affects people conduct at the stage of primary activity outside the context of litigation.

ii. Procedural Rule: This is a rule designed to make the process of dispute resolution fair and efficient mechanism for resolving legal controversies.

e. INTERPRETING THE RULES OF DECISION ACT

i. The Federal court was making rules that they were not entitled to make and this was leading to incongruity in decisions.

ii. A key example of this is Black and White Taxicab v. Brown and Yellow Taxicab. There was arbitrary forum shopping to allow for the ability to sue for the right to enforce a contract. Erie wants to make it so that it doesn’t matter what court house you do into – there should be the same result – this is why state law supplants federal law.

XIII. OUTCOME DETERMINITIVE TEST USED IN GREY AREAS

a. When it is unclear whether a state law rule is substantive or procedural courts often use the outcome determinative test. A state law that substantially determines the “outcome” of the litigation must be applied. However, if it is a federal rule that is arguably “procedural” it will apply. Also if there is a definite countervailing federal policy, such as the right to jury trial, federal law applied.

b. HANDY GUIDE TO WHAT LAW APPLIES:

i. Conflict of laws ( State law

ii. Statute of Limitations ( State Law

iii. Burden of Proof ( State law

iv. Agreement to arbitrate ( State law

v. Discovery – physical examination ( Federal law

vi. Venue transfers/ effect of forum selection clause ( Federal Law

➢ GUARRANTY TRUST v. YORK

o FACTS: The court tried to articulate the difference between procedural and substantive law to avoid arbitrary outcomes. Whenever a judge is unsure about what law to apply they should apply the outcome determinative test. If one rule is applied instead of the other and there is a difference in the outcome, this means that it is substantive and you should apply state law.

o HOWEVER: This ended up being too rigid of a test because everything could be outcome determinative and state law was always applying.

➢ BYRD v . BLUE RIDGE ELECTRIC COOPERATIVE

o FACTS: The court determined that this was substantive and not procedural and that they should use the outcome determinative test.

o HOLDING: This case is a more refined understanding of Erie and that with outcome determination you also have to balance that with any affirmative countervailing Federal interests or conditions or the importance the case has in Federal court. This is a case by case analysis.

➢ RAGEN v. MERCHANTS TRANSFER & WAREHOUSE

o FACTS: Here there is a conflict between Kansas statute of limitations and FRCP 3. If Kansas law is applied there is a different outcome, but is this substantive or procedural?

o HOLDING: This would be substantive even though it is procedural on its face. When you look at the implications there are very different results.

XIV. WHEN FEDERAL LAW OR STATE LAW APPLIES

a. No clear rule differentiates “substantive” from “procedural” rules. Generally federal statutes or rules dealing with procedural matters are used over contrary state law. State law is usually applied if there is no federal statute of rule. However, the FRCP rule will not be applied in diversity cases when its effect would be to toll a state statute of limitations. FRCP 3 provides that an action is commenced when the complaint is filed with the clerk of the court, since it doesn’t address tolling the statute of limitation, state law controls on when and whether the statute of limitations is satisfied.

b. Up to this point no cases (Erie, York or Byrd) had challenged the FRCP rules explicitly.

➢ HANNA v. PLUMER

o FACTS: This case is important because it is the first supreme court case where the court looked at the Erie doctrine, the Rules enabling act and the FRCP rules together. This was a question about the appropriate service of process for a case brought in Federal court.

o HANNA 1: Here the court looks at the Rules Enabling Act and says that the FRCP is an act of federal law and should trump stat procedure when the case is in federal court. The FRCP derives its power from the Rules enabling act and gives some rule making authority to the Federal Court.

o HANNA 2: This goes back to the goals of Erie and tries to stitch together York and Byrd to make sense out of the FRCP dispute. You always want to go back to the original intents of Erie and avoid forum shopping and inequitable administration of the laws while having a respect for state substantive law.

➢ GASPERINI v. CENTER FOR HUMANITIES

o FACTS: Center lost the slides they had borrowed to do a documentary and admitted the fault. The only decision for the jury was the amount of damages, and they based this off one expert awarding P $450,000. The center moved for a new trial and attacked the award as excessive, and then the dispute became whether to use the NY Law 5501(c) on what constitutes excessive as “materially deviates from what is reasonable compensation” (which is what the center wants) or the general federal “shocks the conscience” rule.

o HOLDING: Not applying 5501(c) would be outcome determinative and the court remanded the case to the district court to look at this. Because there is no clear FRCP conflict you can’t rely on the REA so you have to go to the RDA and determine what the relative law is. The Court sends this back to the trial level and not appellate because the appellate court only had the cold paper trail to deal with.

XV. SUPPLEMENTAL JURISDICION

a. 28 USC 1367 – This is in contrast to independent subject matter jurisdiction. Supplemental jurisdiction arises when parties already in the suit want to add in parties in federal court – you must meet the joinder rules and the court must have subject matter jurisdiction.

b. This allows you to bring in other claims so long as they meet the requirements of the Gibbs test.

i. “Common nucleus of operative fact”

c. This brought confusion when parties started bringing state claims, and then non-diverse parties into the suit destroying the diversity – this is not ok. Pendant claims are ok – but not pendant parties that destroy the diversity of citizenship.

d. ORGANIZATION OF THE STATUTE:

(a): General Concepts and rules: In any civil action where the district courts have original jurisdiction the district court shall have supplemental jurisdiction over all other claims that are so related that they form part of the same controversy.

(b): This refers to the joinder rules. This is designed to protect the notion of complete diversity of citizenship

(c): This is the role of discretion. District Court has supplemental jurisdiction over claims unless any discretionary factors are met and the trial judge decides that neither the party or the claim belong in the same lawsuit. This could be because of:

i. Novel or complex issue of law

ii. The claim substantially predominates over the claim which the district court had jurisdiction

iii. DC has dismissed claims where it had original jurisdiction and then no longer have jurisdiction over the state claim

iv. Exceptional circumstances or other compelling reasons (catch-all)

➢ UNITED STATES MINE WORKERS v. GIBBS

o HOLDING: The court held that the basic test for tacking on claims and the power to do so was that the state and federal claims must arise from a common nucleus of operative fact, and where if P’s claims are such that he would ordinarily be expected to try them all in one proceeding assuming the substantiality of the federal issue, there is power in the federal court to hear the whole case.

➢ FREE v. ABBOTT LABORATORIES

o FACTS: This was a class action brought under the anti-trust laws alleging that the company had conspired to fix infant formula prices. The Free’s filed for themselves and a class of consumers in state court. The Defendants removed to Federal court, P moved to remand. The court initially granted this because there was not a federal question and not diversity among the entire class.

o HOLDING: The court held that the case should remain in Federal court because there was diversity of citizenship between the named P’s and D’s and that 1367 granted supplemental jurisdiction over the claims of unnamed P’s. In class actions, if the representatives meet the amount in controversy and the diversity requirements this is sufficient and other members of the class can be bootstrapped in without each needing to meet the $75k requirement.

o RULE 14: Impleader under 1367(a) allows D to file a claim and bring in non-diverse parties, but does not allow P the same action if it destroys diversity.

XVI. FEDERAL REMOVAL JURISDICTION; VENUE TRANSFERS; SUA SPONTE TRANSFERS

a. 28 USC 1441 – REMOVAL

i. It can take place only from state to federal court

ii. It is done ONLY by defendants

iii. This exists to counterbalance the fact that P has the initial choice of forum.

iv. It occurs immediately (1446(b)) – within 30 days from the initial receipt of summons by D

v. Under 1441(c) if there is both state and federal claims, D can remove the case and then allow the judge to determine whether he will hear the entire case, or just the federal part and send the rest to state court.

b. 28 USC 1447 – REMAND

i. This is the flipside of removal

ii. DC judge can look at the case and determine that it was improperly removed, or that there are strong state court interests in the bootstrapped claims.

iii. (c) A motion to remand the case must be made within 30 days after the filing of the removal under 1446.

➢ CATERPILLAR v. LEWIS

o FACTS: This was the case where there was initially diversity of citizenship and the case was removed to federal court, but then when the insurance company got involved there was not diversity of citizenship and the case could have been remanded but was not. The holding that came down did so after there was again diversity of citizenship, but Lewis argued that because there was not complete diversity when Caterpillar removed to Federal Court that this error made it necessary to vacate the DC’s judgment.

o HOLDING: Even though the court was wrong in not remanding the case, this did not affect the outcome, and retrying the case in state court would be wasteful. This is a sort of “alls well that ends well approach” and is in controversy with the language of the statutes

c. 28 USC 1404 – CHANGE OF VENUE (Inconvenience)

i. When the case is in Federal court and one party wants to move it to a different venue in the Federal Court for the convenience of the parties, the witnesses, and in the interest of justice.

ii. In a situation with multiple parties this can bounce cases across the country

iii. P can move for transfer, but since they made the original case in that particular court it is unlikely.

iv. Either party seeking to move the case will use the language of 1404(a). The location of the transfer must be somewhere where the case MAY HAVE BEEN BROUGHT in the first place. You need to have subject matter/personal jurisdiction and venue.

d. 28 USC 1406 – ERROR IN VENUE

i. If there is an error in the original venue this can be raised early to transfer or dismiss the case.

XVII. FORUM NON CONVENIENS; EXTENDING THE LAWSUIT; MORE ON JOINDER

a. FORUM NON CONVENIENS

i. This is a request for OUTRIGHT DISMISSAL. It is a non-statutory common law option for litigants to argue for dismissal based upon the fact that there is some forum that is such an important forum, that the only remedy for the judge possible is to dismiss the case so it can be brought in that forum.

ii. This is all based on decisional law.

iii. This can be made in federal or state court, and can be made in connection or alternately with a transfer motion.

➢ PIPER AIRCRAFT v. REYNO

o FACTS: This was a wrongful death action based upon a plane crash in Scotland. The case gets filed in CA state court by Reyno (the secretary of the lawyer bringing the case) and then it gets moved to Federal court in CA, there is a motion under 1404(a) and it gets booted to the middle district of PA.

o HOLDING: In PA the case is dismissed so that they can move it to Scotland. They have to balance the interests of the parties, witnesses and state interest, and American interest in this accident was not sufficient to justify the commitment of judicial time and resources.

b. JOINDER CONTINUED

i. FRCP 13 – Counterclaim

ii. FRCP 18 – Claim Bundling

iii. FRCP 17 – Real Party in interest

1. Cases should be brought in the names of the real party in interest

2. The party bringing the lawsuit must be someone with the authority to bring it. They must have the capacity to sue or be sued.

3. There are different rules with DOE parties that will be named as discovery continues.

iv. FRCP 20 – Permissive Joinder of Parties

1. This allows P to add additional parties to lawsuits

2. ONLY allows parties acting as plaintiffs (so D can use this only if he is bringing a counterclaim)

3. This determines if there can be a bundling of parties in the same lawsuit.

4. Claims must arise out of the same transaction or occurrence, and have a common question of fact or law.

➢ MOSLEY v. GENERAL MOTORS

o FACTS: 10 P alleged that they had been discriminated against on the basis of race and gender. The defense motion was to bust up the plaintiffs as a group because the criteria of FRCP 20 were not met. The argument will always be that there is too loose a connection between the party’s claims, and that there is no common question of law and fact.

o HOLDING: The trial court was wrong in disallowing the joinder. The difficulties in ultimately adjudicating damages to the various P’s was not so overwhelming as to require such severance. The claims and facts were common enough to allow the class action to continue.

v. FRCP 19 – Compulsory Joinder

EXAM COMMENT: When you go through 19(a) – even if you determine that they can’t be joined assume arguendo that you could apply 19(a) and do the 19(b) analysis

1. If a party is needed for fairness of the lawsuit they will be added.

2. This is used mostly by D to bring in parties on D’s side that for some reason P sought to leave out. D would want to do this to spread out liability, or destroy complete diversity of citizenship

3. P wouldn’t need to use this because they have FRCP 20 which is easier.

4. LANGUAGE OF THE RULE:

a. Person to be joined if “feasible” –

i. In the persons absence complete relief cannot be accorded among those already present

ii. (i) – as a practical matter impede the personal ability to protect their interest. (ii) leave any of the persons already subject to a risk of incurring double or multiple judgments or inconsistent obligations

b. Is the party “Indespensable”

i. This is whether you really need the party in the lawsuit. There is chain of mandatory relationships.

ii. To what extent the absence of a party may be prejudicial to others already parties.

iii. Whether judgment in the persons absence will be adequate

iv. Whether P will have an adequate remedy if the action is dismissed for non-joinder

➢ HELTZBERG’S DIAMOND SHOPS v. VALLEY WES DES MOINS SHOPPING CENTER (905)

o FACTS: The shopping center had agreed that P would be the only full service jewelry store in the mall, but then let in another company. Issue was whether the factors of 19(a) were met so the court should go onto 19(b)

o HOLDING: The District court was correct in concluding that Lord’s (the competing jewelry store) was a party to be joined if feasible. After looking at 19(b) they decided that Lord’s was not a party that was indispensable – and the court agreed. RULE: Whether a party is indispensable must be made on a case by case basis and is dependent upon the facts and circumstance of each case.

XVIII. IMPLEADER; INTERPLEADER

a. IMPLEADER – FRCP 14

i. 14(a) - When D may bring in a 3rd party.

ii. A – B – C: where any liability B owes to A is because C caused it.

iii. This is a notion of derivative liability or the legal concept of indemnity. That the 3rd party defendant is liable secondarily to the original defendant in the event that D is held liable to the plaintiff.

iv. Once you bring in a 3rd party the original D becomes the 3rd party plaintiff, and the 3rd party has the option to file an answer and assert defenses to the original claim as well.

➢ TOBERMAN v. COPAS

o Here there is a car accident with multiple parties, and the party seeking to be the 3rd party D doesn’t allege that the he should be brought in due to liability. The court doesn’t allow this as appropriate under 14.

o Because the complaint stated that the 3rd party defendants were liable for indemnity or contribution because they are wholly responsible for P’s injuries this is not an acceptable theory of 3rd party liability.

➢ UNITED STATES v. JOE GRASSO & SONS

o FACTS: Shrimp boat case. Government seeks employment taxes from Grasso, he brought the claim to get reimbursed for those taxes because he didn’t hire the crewmen. The government asserted that if Grasso was not liable for the taxes then the captains were.

o HOLDING: The 3rd party claim against the captains would be a separate claim and is inappropriate for impleader and should be denied. Grasso not being liable for the taxes does not make the captains automatically liable. Liability of the 3rd party must be dependent upon the outcome of the main claim.

b. INTERPLEADER – RULE 22

i. This originated under the federal rules, and then because the subject of the statute 28 USC 1335 to expand for interpleader in federal courts.

ii. If a party is going to use Rule 22 – it requires complete diversity + amount in controversy ($75K) or a federal question

iii. To have true interpleader you must have one “pot” or “stake” – one distinct thing that the party bringing the interpleader is worried that multiple claimants are going to go after.

iv. It is in the stakeholder’s interest to get all possible parties to go forward together.

v. TWO main ways this happens:

1. P v. D: lawsuit happens and D recognizes that this P is not the only P what will go after the stake, and then by counterclaim beings an action to require that anyone else that wants to lay claim on the stake come to court – this leads to multiple plaintiffs.

2. P v. D – D can initiate their own action in interpleader and D will go into court and initiate the action under Rule 22.

vi. This could include: a building, a car, a painting, something that can’t be divided. NOT MONEY

c. STATUTORY INTERPLEADER: 28 USC 1335

i. Can be distinguished by when it applies.

ii. This expands the situations where these can be brought into court

iii. Amount in controversy $500 or federal question

iv. Only minimal diversity required among claimants (at least two claimants are from different states)

v. Service of process is nationwide in scope.

➢ STATE FARM FIRE AND CASUALTY v. TASHIRE

o FACTS: Multi-vehicle accident. This became an interpleader action because State Farm has a policy with the driver of the truck and decides that they want to get involved and avail themselves of 1335 and go into Federal Court in Oregon. The policy only held for $10,000 per individual in an accident, and $20,000 total coverage.

o HOLDING: It is inappropriate to proceed like this. The insurance company’s interest is not sufficient to drive the case – they should not be able to initiate an action in a suit where they were not even defendants and then force everyone to go where they want.

d. HOW TO KNOW WHEN TO USE INTERPLEADER?

i. When it appears that many parties are going after the same thing

ii. It is concerned with people going after the goods and a desire of the stakeholder to handle this easily.

XIX. INTERVENTION; JOINDER PROBLEM

a. FRCP 24

i. Language is similar between FRCP 24 and 19 – but there is a difference in when you apply the two. 19 is used as a motion by a party that is already in the suit to add others not in the suit. 24 is used by parties outside the suit that want to intervene and become part of the suit.

ii. (a) This applies when:

1. A statute of the US confers a right to intervene

2. When the applicant claims an interest in the subject of the action and the applicant is so situated that disposition of the action may impair or impede the applicant’s ability to protect their interests unless they are represented. This is often used in situations where there are public rights at stake.

iii. (b): Permissive Intervention:

1. This is a different option where the court doesn’t want to let parties argue that they have a RIGHT to intervene, but where it is appropriate for them to be there. This is the same procedurally as (a) but the difference is the way in which the judge determines if something is right or intervention sets precedence in common law.

➢ AMERICAN LUNG ASSOCIATION v. REILLY

o FACTS: The EPA was required to make their decisions on the NAAQ’s (National Ambient Air Quality Standards for Ozone) and get up to date with the requirements set forth by the ALA. The utilities wanted to intervene as parties because they felt that they had to protect their interests.

o HOLDING: The judge denied their motion to intervene and held that their interest in the action’s subject matter was too remote to prevent intervention. The court felt that the utilities interests were already being represented in the process of developing the guidelines.

XX. CLASS ACTION

a. FRCP 23

i. All Factors of (a) must be met:

1. NUMEROSITY: the class is so numerous that joinder of all members is impossible

2. COMMONALITY: Common question of law or fact to the class.

3. TYPICALITY: Claims or defenses of the representative parties are typical of the class

4. That the representatives named and lawyers will adequately protect the interest of the class.

ii. ONE factor of (b) must be met:

1. Prosecution of separate actions by individual members would create a risk of: (a) inconsistent adjudication (b) impair the ability of individuals to protect their interests

2. The party opposing the class as acted or refused to act on grounds generally applicable to the class thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole. NO MONEY DAMAGES ALLOWED HERE.

3. The court finds that questions of law and/or fact common to the class predominate over those affecting individual members. This is the catch-all. There is also an opt-out provision here to have the right to bring your own lawsuit.

➢ ANGELASTRO v. PRUDENTIAL-BASCHE SECURITIES, INC

o FACTS: P alleged that D miscalculated the interest and they are seeking to join as a class because they all suffered from the misinformation which they all received about how the interest was calculated. They sought to certify all individuals who were customers between 1977-1982.

o HOLDING: The requirements of 23(a) were met.

b. DIVERSITY OF CITIZENSHIP IN CLASS ACTIONS

i. When the DOC and amount in controversy path is chosen, only the named parties need to be diverse

ii. There must only be one member of the class whose amount in controversy is greater than $75k – Thanks to Free v. Abbott Labs.

iii. You want more parties to have claims over $75k to show substantial commonality though.

OTHER IMPORTANT INFO:

• 28 USC 1331 – Federal Question: All civil actions “arising under” the US Constitution, US Laws of US treaties have original federal jurisdiction.

• 28 USC 1332 – Diversity of Citizenship requirements

• 28 USC 1335 – Interpleader Statute: Lowers the amount in controversy needed, and has minimal diversity requirements.

• 28 USC 1441 – Removal Statute: Cases that can be removed to Federal court

• 28 USC 1446 – Procedure for Removal

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