Civil Procedure Fall 2002 - Santa Clara Law



Civil Procedure Fall 2002

I. Jurisdiction Over Persons and Property

When making this Analysis:

1.

Asking what the forum states interest is

Looking at what the inconveniences

Looking at the

A. The Development of Our Concept of Jurisdiction

Pennoyer v. Neff

Facts: Mitchell is Neff’s attorney, he sues Neff for services rendered, in Oregon State Court. Neff is not a resident of Oregon, but owns a piece of property there. Mitchell serves Neff by publication in a small religious newspaper in Oregon for six weeks. Neff is never informed of trial, Mitchell wins by default judgment. Neff’s land is sold to satisfy judgment; Mitchell later sells this land to Pennoyer.

Procedural: Mitchell sues Neff in state court. Neff sues Pennoyer in District Federal Court and wins. Pennoyer appeals in Supreme Court.

Holding: No in personam jurisdiction over Neff, in Mitchell’s case, therefore ruling was in violation of due process on two counts: (1) person must be properly served; and (2) ?

Reasoning at Trial Court: Mitchell’s affidavit did not state what measures he had taken to notify (serve) Neff. Plaintiff is required to show “due diligence” in attempt to notify. Also, Mitchell never attached the land Neff owned in Oregon.

1) Important Concepts

a) Territoriality: each state, according to this case is a separate entity and is sovereign within its territory. According to the court there would be no way to afford full faith and credit to sister state judgments without conflict if state territorial boundaries were not honored. [NO LONGER CONTROLLING]

b) Fourteenth amendment due process clause: Nor shall any State deprive any person of life, liberty, or property without due process of law.

c) Direct attack v. Collateral Attack

- Direct Attack is when defendant shows up to challenge personal jurisdiction in a special appearance. This is the approach most preferred/ safe.

- Defendant does not respond. After default judgment, def. brings up separate suit to invalidate the first judgment. This approach is only used when def. is completely confident there is no jurisdiction. (Pennoyer- he was unaware of case pending)

d.) Types of Jurisdiction

▪ In Rem: power over property within the territory, power over a “thing” within the territory of the state. Lawsuit is all about the property and nothing else.

▪ Quasi in rem: Land or property within the forum state is used to establish in personam jurisdiction. Attaching property is the same as attaching def. himself. (Pennoyer).

▪ In personam: Need to somehow show actual physical presence of def. in the forum state. Bright Line Rule adopted in Pennoyer:

1) Service of process within the state

2) Voluntary appearance

3) Def. lives in the jurisdiction

4) Appointing an agent for non-resident to receive service.

e.) Attachment of Property- procedure that files a lien and gives the actor power or control over the property. Means of showing the actual physical presence of the defendant in the forum state. Filing requires:

1) Showing proof of who owns the property

2) Showing a reasonable certainty that the claim will prevail

3) Must be a state claim

f.) State courts can exercise general jurisdiction, but they must have jurisdiction over the person. Almost all cases can be heard, except issues that are specifically prohibited.

g.) Federal Courts have limited jurisdiction, only certain cases can be heard.

Grace v. MacArthur

Summary: Defendant is served over Arkansas airspace, Court rules this is sufficient for Arkansas to exercise jurisdiction.

Hess v Pawloski

Summary: Defendant got into car accident while driving in Mass. Mass. statute provided that any non-resident operating a motor vehicle in Mass. accepts appointment of the registrar to be his agent for receipt of service of process in any action growing out of accident or collision. Court held this was not a violation of due process, consent was established by driving in that state.

International Shoe Co. v. Washington

Facts: Appellant is a Delaware Corporation, having its principle place of business in St. Louis and is engaged in the manufacture and sale of shoes and other footwear. Appellant has no office in Washington and makes no contract either for sale or purchase of merchandise there. It maintains no stock of merchandise in that state and makes there no deliveries of goods in intrastate commerce. During years in question, appellant employed eleven to thirteen salesmen under direct supervision and control of sales managers in St. Louis. Salesmen resided in Washington and were compensated by commission on sales. Commissions totaled more than $31,000.

Issue: 1) Whether, within the limitations of the due process clause of the Fourteenth Amendment, a Delaware corp. has by it’s activities in the State of Washington rendered itself amenable to proceedings in the courts of that state to recover unpaid contributions to the state unemployment compensation fund exacted by state statutes….; and 2) Whether the state can exact those contributions consistently with the due process clause of the Fourteenth Amendment.

Holding: Court holds that state has jurisdiction to enforce the obligations which appellant has incurred there.

Rule: Due process requires only that in order to subject a defendant to a judgment in personam, if he be not within the territory of 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.”

1) Important Concepts:

a) Minimum Contacts Rule- Broad Rule Adopted in Int’l Shoe

1) Activities (business) must be continuous and systematic

2) Result (of activities) in a large volume of commerce

3) Claim arises out of or is related to the contacts (specific jurisdiction)

4) Estimate of the inconveniences is relevant

5) Corp. benefits from laws and protection of the forum state.

*certain factors are favored more heavily; not all factors will need to be met everytime.

B. General v. Specific Jurisdiction

1. Specific Jurisdiction – situation in which the claim arises out of or is related to the contacts with the forum.

McGee v. Int’l Life Ins. Co.

Summary: Plaintiff was attempting to claim proceeds of a life insurance policy purchased by her deceased son, Franklin, from an Arizona Life Ins. Co. The Ins. Co. was later bought out by Int’l Life which had an office in Texas. Int’l Life offered to extend insurance to Franklin by sending reinsurance statement to his home in Cali. Plaintiff brought suit in Cali. And received judgment, but Texas cts. refused to uphold the verdict. Int’l life had no office, agents, employees, or other business in Cali, Franklin’s policy was the single policy and contact with California. Courts upheld California’s exercise of jurisdiction. IMP: DEFENDANT HAD REACHED OUT THERE SERVICE TO PLAINTIFF, NOT PLAINTIFF REQUESTING DEF. SERVICES.

2. General Jurisdiction- situation in which the claim has arisen in another place, and is unrelated to the contacts with the forum. Systematic and continuous contacts should be required in a case of general jurisdiction.

Perkins v. Benguet Consolidated Mining Co.

Summary: Plaintiff filed claim in Ohio, however claim had arisen in the Philippines, where the company had operated profitable gold and silver mines. The president of the company had established an office in Clermont, where he resided. He maintained bank accounts, and carried on correspondence, drew salary checks, and supervised rehabilitation of the company’s properties from that location. Supreme Court held this was enough contact to establish continuous and systematic business activities and allow Ohio jurisdiction.

C. Long-Arm Statutes: State Law Restrictions on Jurisdiction- The extent of a state’s jurisdiction is subject to two different restrictions: 1) state long-arm statute/state law decides which cases that fall within due process it will hear; and 2) due process, or “minimum contacts test.”

Gray v. American Radiator & Standard Sanitary Corp.

Facts: Plaintiff bought a water heater from American Radiator; the water heater exploded and injured the plaintiff in Illinois. A valve on the water heater, manufactured by Titan, was the defective cause of accident. Valves were manufactured defectively at Titan’s place of business in Ohio. Illinois long arm statute states: a nonresident who, either in person or through an agent commits a tortious act within the state submits to jurisdiction. The statute also provides: summons may be personally served upon any party outside the State; and that as to nonresidents who have submitted to the jurisdiction of our courts, such service has the force and effect of personal service within Illinois.

Issue: (1) Whether tortious act was committed in Illinois, so as to warrant the assertion of personal jurisdiction by service of summons in Ohio.

(2) Whether statute violates the requirements of due process.

Holding: (1) Yes. Tortious act was committed in Illinois. (This is stretching the long-arm statute to fit what courts think the law should be).

(2) No, due process clause is not violated.

Reasoning: (1) Court rules that tortious act is completed in place where injury occurs, word “tort” and “tortious act” are indistinguishable. (courts eliminate the requirement of an act from the statute).

(2) The courts look to Titans contacts with the state of Illinois, Ct states the following reasons to show minimum contacts are met:

a. It is reasonable to assume Titans commercial transactions result in substantial use and consumption in this State.

b. Titan enjoys benefits from the laws of the state.

c. ***Where alleged liability arises from the manufacture of products presumably sold in contemplation of use here, it should not matter that the purchase was made from an independent middleman or that someone other than the defendant shipped the product into this State.

Feathers v. Mc Lucas

Summary: Plaintiff was injured by truck driven propane tank near their home in Berlin, N.Y. The N.Y. long arm statute is similar to Illinois, states: tortious act committed within the State… Court disagrees with reasoning in Gray, and rules: the verbiage “committing a tortious act within the state” is not synonymous with “committing a tortious act without the state that results in injury within the state.”

Markham v. Anderson

*This case is different because it is brought in Federal Court.

Summary: Defendant certifies a truck driver to drive, against federal law, who suffers from epileptic seizures. The driver injures Plaintiff. Defendant satisfies the N.Y. long arm statute amended to include tortious act committed outside of the state but results in injury within the state. However, court holds no jurisdiction over the def., because his practice did not constitute “regular” or “continuous” business in New York and did not result in his deriving “substantial” revenue from interstate commerce.

Hall v. Helicopteros Nacionales De Colombia, Tex. Ct. of Appeals, 1982

?????

D. Modern Expansions and Contractions of the Minimum Contacts Doctorine

[1] Commercial Defendants: “Purposeful Availing,” “Reasonable Anticipation,” and “Convenience”

Hanson v. Denckla

Facts: Ms. Donner set up a trust with Wilmington Bank of Delaware appointed as trustee. She later moves to Florida and continues to receive income from the Delaware trustee, she communicated regularly with the trustee regarding trust business. Before her death in Florida, she exercises her power of appointment and leaves the trust to Hanson and group. She also executed a will that gave the residue of her property to Denckla and group. Denckla sues, claiming the trust is invalid and should pass to them under the will. Two suits commence, one in Delaware and the other in Florida. Two different results: Florida cts. hold thetrust invalid and pass contents to Denckla; Delaware cts. refuse to uphold Florida judgment and rule trust is valid and should pass to Hanson.

Issue: Whether Florida ct. had jurisdiction against trustee (Wilmington Bank).

Holding: Supreme Court say there was no jurisdiction. No in rem, because the situs of the trust was in Delaware. No in personam, because trustee did not have requisite contacts (Int’l shoe). Delaware trustee had no office, property or business in Florida other than its dealings with Ms. Donner. Difference from McGee: PURPOSEFUL AVAILMENT; trustee did not solicit the continued business of Ms. Donner, she moved and decided to continue her business with the trustee. Ct. rules there was not the requisite purposeful availment.

Counterargument (Dissent): Shouldn’t Florida have the power to adjudicate the issues arising out of a will administered in it’s state? Florida has a strong interest in this resolution and there would be no “heavy or disproportionate burden on a non-resident that would offend . . . ‘traditional notions of fair play and substantial justice.’”

World-Wide Volkswagen Corp. v. Woodson

Facts: Plaintiffs buy a Volkswagen from N.Y. and then drive cross-country to Arizona. While in Oklahoma they are rear-ended by another vehicle. The wife and two children are seriously injured. Plaintiff files suit against manufacturer, importer, regional distributor, and retail dealer. The distributor and retailer file special appearance to deny jurisdiction.

Oklahoma long arm statute holds jurisdiction over defendants that cause “tortious injury in this state by an act or omission outside this state if he regularly does or solicits business or engages in any other persistent course of conduct, or derives substantial revenue . . . from this state. . . .”

Holding: U.S. Supreme ct. reverses Oklahoma Sup. Ct, holds state ct does not have jurisdiction over the retailer or dealer.

Reasoning: IMPORTANT: Mere foreseeability is not enough to enough to allow jurisdiction over a defendant, the defendant must also have minimum contacts with the state and purposefully avail themselves of the jurisdiction of the state.

In this case, the defendants carry on no activity in Oklahoma; they close no sales there, and perform no services there.

The argument can be made that given an automobile is mobile by its very design and purpose, it is foreseeable that the vehicle would cause injury in Oklahoma. The RULE stated by the court to counter this argument: “the foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum state. Rather, it is that the defendant’s conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there. . . . Hence if the sale of a product of a manufacturer or distributor . . . is not simply an isolated occurrence, but arises from the efforts of the manufacturer or the distributor to serve, directly or indirectly, the market for its product in other states, it is not unreasonable to subject it to suit in one of those states if its allegedly defective merchandise has been the source of injury to its owner or to others.”

Helicopteros Nacionales De Colombia, S.A. v. Hall

Summary: Plaintiff’s decedents were killed in a plane crash in Peru. Defendants was a Colombian Corp. that maintained no office in Texas, but has purchased helicopters and supplies extensively in Texas. Def. had sent pilots to Texas for training, accepted a check drawn on a Texas bank, and sent its president to Texas to negotiate and sign the contract for helicopter service.

Supreme courts rule this is a case of general jurisdiction, which requires continuous and systematic contacts with the forum state. Court holds the defendant does not meet this level of contact. Ct makes a distinction between purchasing from a state rather than soliciting or selling in a state. This distinction goes toward the idea of “purposeful availment.” The defendant has more to gain from selling product and purchasing may be considered unilateral action.

Burger King Corp. v. Rudzewic

Facts: Defendants are residents from Michigan, who contract with Burger King to purchase a franchise in Michigan area. Defendants negotiate with both the Michigan district office and the Miami Headquarters. One of the defendants travel to Miami for a training seminar; this is the only physical presence the defendants have with the state of Florida. The defendants breach their contract by failing to make the required payments and when asked to vacate the premises defendants refuse and continue to occupy and operate the facility as a Burger King restaurant. Burger King files suit in district court for the Southern District of Florida under diversity jurisdiction.

RULE: COURT SUMMARIZES THE MODERN REQUIREMENTS FOR IN PERSONAM JURISDICTION:

(1) Look at the long-arm statute of the state( even when suit is filed in fed. Ct; look at the long-arm of the state law that will be applied).

- This needs to be evaluated on an exam even if the long-arm reaches to the extents of due process.

(2) Requirements of Due Process: Is states exercise of jurisdiction over the defendant fair and reasonable as defined by the due process clause in the fourteenth amendment.

- In Specific Jurisdiction cases:

1. “Purposeful Availment”- “defendant has ‘purposefully directed’ his activities at residents of the forum, . . . and the litigation results from alleged injuries that ‘arise out of or relate to’ those activities . . . .”

**unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum state.

**foreseeability of causing injury in another state, alone, has consistently been held insufficient to meet “minimum contacts” requirement. “The foreseeability that is critical to due process analysis . . . is that the defendant’s conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.”

2. “Minimum contacts”-In this case, contract evaluated as satisfying minimum contacts:

-Cts. look at parties course of negotiations; this was not just a blanket contract.

- Cts. contemplated the contractual arrangement; parties knew/ agreed payments would be sent to Miami for the next 20 years.

- Cts. look at parties course of dealing; specific actions taken in this case.

(3)Once the first two requirements have been established, courts may evaluate: “‘the burden on the defendant,’ ‘the forum State’s interest in adjudicating the dispute,’ ‘the plaintiff’s interest in obtaining convenient and effective relief,’ ‘the interstate judicial system’s interest in obtaining the most efficient resolution of controversies,’ and the ‘shared interest of the several States in furthering fundamental substantive social policies.’”

Asahi Metal Industry Co. v. Superior Court

*Plurality Decision- justices are divided; there is no precedent in from this case

Facts: Plaintiff was injured when his motorcycle went out of control and collided with a tractor. He sued Cheng Shin, a Tiawanese Corp., in Cali. Superior Ct., claiming the accident was due to a defective tube it manufactured. Chen Shin counter-claimed against Asahi Metal, a Japanese Corp., the manufacturer of the tube’s valve assembly for indemnification. Plaintiff’s claim against Chen Shin was settled and only the counter-claim remained.

Rule: Asahi Metal had made the sale of it’s goods in Taiwan, had shipped it’s good from Japan to Tiawan, and was a Japanese Corp. The courts rule that placement of a product into the stream of commerce, without more, is not an act that alone can be considered purposefully availing one of the forum state. Secondly, the courts say the burden on the defendant would be great, considering the distance from Japan to California, and subjecting def. to the laws of a foreign country; doesn’t meet “notions of fair play and substantial justice.”

Dissent: J. Brennan dissents on interpretation of stream of commerce: he says “stream of commerce refers to . . . regular and anticipated flow of products . . . .As long as a participant in this process is aware that the final product is being marketed in the forum state, the possibility of a lawsuit there cannot come as a surprise.”

[2] Non-Commercial Defendants

Kulko v. Superior Court

Summary: Father’s, defendant, only contacts with the forum state were a marriage ceremony that took place there, and buying a ticket for his child to travel to the forum state to be with her mother. Ct. rules def. does not have sufficient minimum contacts with forum state to assert personal jurisdiction.

Concept: Need to look at minimum contacts when determing personal jurisdiction over individuals as well.

Note on Long-Arming the Press: In Calder v. Jones and Keeton v. Hustler Mag., Cts. rule that exercising jurisdiction over a press defendant does not violate First Amendment rights, when the publication is circulated in the forum state. Also, plaintiff has a right to chose a forum state that is favorable to the suit, plaintiff’s minimum contacts are not relevant; personal jurisdiction is decided on the minimum contacts of the defendant.

[3] Keystroke Contacts: The Internet and Other Electronic Media

Compuserve, Inc. v. Patterson

Summary: Defendant entered into a shareware agreement w/Compuserve, which was memorialized in a Shareware Registration Agreement which provided that the agreement was entered into in Ohio, and was to be governed by Ohio law. Compuserve latter generated it’s own program that competed with Defs. And Def. e-mailed the company alleging trademark infringement. Compuserve files the lawsuit in Ohio Cts. to settle the issue. The cts. allow jurisdiction, ruling the case to be one of specific jurisdiction, where the issues arise from the placing, selling, and marketing of defs. Software on Ohio based Compuserve system.

Problem with this case: People generally are not aware of where the company that they are entering into a contract with on the internet is located. Merely pressing a key on the computer to agree with terms of a contract. There is a split in the circuit over this type of case.

E. In Rem Jurisdiction: Power Over Property

Shaffer v. Heitner(????)

F. “Tag” Jurisdiction, or In-State Service on a Foreign Defendant with Only General- Jurisdiction Contacts: Does “Fairness” Control or Does “ Tradition” Control?

Burnham v. Superior Court

Summary: Defendant is served with process while visiting his children in California, court rules that this is enough for California to assert jurisdiction over the defendant. Court states when a defendant is served within the forum there is no need to look at defs. Contacts with the state, jurisdiction according to tradition is automatically conferred. The courts must reject jurisdiction if the defendant was lured to the state by fraud.

G. Special Bases of jurisdiction: “Consent,” “Contract,” “Necessity,” and “Nationwide Contacts”- These factors can be used to establish personal jurisdiction over a defendant without establishing minimum contacts.

[1] Consent

A. Consent Before Suit:

(1) Corporations doing business in a state, which appoint a resident as agent for receipt of service.

(2) Implied consent statutes covering non-resident motorists. (Hess v. Pawloski).

B. Using Implied Consent to Make Directors Amenable to Jurisdiction in the State of Incorporation

C. Consent by Raising the Jurisdictional Issue, Then Failing to Follow the Court’s Orders

D. Consent by “General” as opposed to “Special” Appearance: According to Rule 12(g), the first paper filed with court must-

(1) In answer to the complaint, include issue of jurisdiction.

(2) File a separate motion raising the issue of jurisdiction.

Gonzalez v. Gonzalez

Summary: Signature of Defs. lawyer on judgment of divorce and property division was held to constitute a general appearance. Challenging jurisdiction must be done promptly and before doing anything else.

[2] Private Contracts Fixing Jurisdiction

Carnival Cruise Line, Inc. v. Shute

Summary: Court denies jurisdiction over Carnival Cruise Lines, bases on a forum-selection clause located on the back of the ticket purchased by plaintiff, that state all disputes would be tried in Florida Courts.

Dissent questions the “full and fair” notification of plaintiff’s by a boiler plate clause on the back of a ticket. Also, notes enforcement of forum-selection clauses should be limited to commercial arrangement between parties with equal bargaining power.

[3] Necessity, Rule 4(k) and “Nationwide Contacts”

A. Jurisdiction by Necessity: A forum lacking consent or relationship to the claimants may be justified in exercising jurisdiction simply because there is no more appropriate forum to adjudicate a question that requires resolution. This has never been expressly approved by the Supreme Court.

Ex. Foreign defendants that would not have minimum contacts with any state.

B. Alternative Long-Arm Provision for Claims based on Federal Law:

Rule 4(k)(2): If the exercise of jurisdiction is “consistent with the Constitution,” the federal long-arm provision reaches.(????)

C. Nationwide Service of Process- Congress has allowed dispensing with the limitations of state boundaries, in special cases, when it can be determined that the def. has undertaken a nationwide activity that should be subject to nationwide process.

H. Challenging Personal Jurisdiction

[1] By Default Followed by Collateral Attack

Wyman v. Newhouse

Defendant in this case did not appear, and challenged the default judgment in his home state. This is considered a collateral attack. This may be risky, because the claim cannot be argued on its merits, only considered on a jurisdictional basis.

[2] By Special Appearance or Analogous Process

Direct attack- Bringing up the jurisdictional issue in the answer to the claim or in a separate motion.

Harkness v. Hyde

Summary: Defendant challenged personal jurisdiction in a special appearance, on grounds that he was served with process while residing on a Indian reservation and this territory was not within the jurisdiction of the state. Motion was denied, but because the motion was made initially def. was allowed to bring it up again on appeal.

Baldwin v. Iowa State Traveling Men’s Assoc.

Summary: The defendant makes a special appearance to challenge jurisdiction in Missouri State Cts., motion is denied and court orders def. to answer claim on the merits within 30 days. The defendant then fails to appear, and courts grant a default judgment. Plaintiff attempts to enforce this judgment in Iowa cts., and defendant again challenges personal jurisdiction. Cts. Rule this cannot be done, the defendant must choose to either form a direct or collateral attack and then follow the result. Cannot resort to second method after the first is denied.

II. Notice Requirement and Service of Process

[A] Due Process Notice Standards

Mullane v. Central Hanover Bank & Trust Co.

Facts: N.Y. statute permitted trust companies to petition for judicial approval of it’s accounts, and service of process to beneficiaries, in these cases, could be made by newspaper advertisement. Guardian of trust challenges sufficiency of notice.

Holding: Court rules States interpretation of it’s statute is unconstitutional.

Reasoning: Personal service, actually handing the def. a notice, within the jurisdiction is the classic form of notice that is always adequate in any type of proceeding. Court rules “[t]he notice must be of such a nature as reasonably to convey the required information, . . . and it must afford a reasonable time for those interested to make their appearance, . . . But if with due regard for the practicalities and peculiarities of the case these conditions are reasonably met, the constitutional requirements are satisfied. → IMPORTANT RULE.

Those def. whose names and addresses were known should have been served at least by mail. Those whose names were known, a reasonable effort should have been made to find address’ and contact. Those whose names and address’ were not known could be served by publication.

Important Concepts:

(1) Plaintiffs must make a “reasonable” attempt to notify the defendant, cts. will take into account the time and expense required to find a defendant. Plaintiff is not expected to expend unreasonable amounts of time or money.

(2) Receipt of the service is not always required to constitute constitutional service of process.

Aguchak v. Montgomery Wards Co.

Summary: Court enforces rule in Mullane, ruling service of process was not adequate where the mailed process papers did not provide information on right to change venue and that defs. could properly appear by a written pleading.

Meidrich v. Lauenstein

Summary: Where the officer serving process made a false return of a pretended summons, the court upheld default judgment against defendant. The court stated as long as the plaintiff was free from fraud, plaintiff had done all that was required by the law. Defendant’s means of compensation is suing the server.

[B] The Ceremony of Service: Complying With The Rules

[1] Serving Individuals and Corporations: Rule 4(e) and 4(h)

Leigh v. Lynton

Summary: This case considers Rule 4(e)(2): service of process at the defs. dwelling house with some person of suitable age and discretion. Plaintiff served def. by handing service to his wife at an apartment she had rented in N.Y.C., while def. had returned to England and remained there. Court rules this process was sufficient to meet requirement of suitable person but not dwelling house. Dwelling house is place that def. acknowledges as his home, usual place of abode. Cts. may look to address on driver’s license or major documents.

Nat’l Development Co. v. Triad Holding Corp.

Summary: Def. owned 12 homes, and his housekeeper was served with process at an apartment at which time he was staying. The court ruled this was sufficient notice. Court states a def. can have more than one dwelling house or usual place of abode, and each must only contain “sufficient indicia of permanence” to suffice as a dwelling place.

[2] The Defendant Who Evades Process: “Substituted Process”

Butler v. Butler

Summary: Where the plaintiff has exhausted all means of attempting to serve defendant, and defendant evades process, the plaintiff can file motion for substituted service. The plaintiff will need to show proof of valid attempts at serving defendant, and if motion is granted, trial ct. may offer another method in which def. can be served.

Hunsinger v. Gateway Management Corp.

Summary: Rule 4(d) allows waiver of service of process request to be sent to the defendant and accepted in 30 days if within the U.S. Plaintiff’s attorney sends this request to the defs. attorney, def.s attorney does not respond and after 120 days moves for dismissal under Rule 4(m). Rule 4(m) states: if service is not made upon def. within 120 days after filing of complaint, the court may dismiss the action. Court in this case, uses its discretion to specifies a new time within which service must be made.

Rules to Know For Service of Process:

Rule 4- governs initial service of process(fill in after talking to Prof. Basset)

Rule 5: governs subsequent paperwork service to defendant.

III. Venue and Forum Non Conveniens

[A] Forum Non Conveniens- doctrine that allows a court with personal jurisdiction over a defendant to dismiss the action so that it can be brought in another, more appropriate forum. Discretionary doctrine.

Piper Aircraft Co. v. Reyno

Facts: Five Scottish subjects were killed in a plane crash in the Scottish Highlands. The administrator of decedents’ estate sues Piper, the manufacturer of the aircraft, American companies. Piper moves to dismiss on grounds of Forum Non Conveniens.

Holding: The courts dismiss the case; considering Scotland the appropriate forum for the claim.

Reasoning: Gilbert Rule for deciding motions of Forum Non Conveniens:

(1) availability of proof, compulsory process, and jury view of premises;

(2) practical problems of inexpensive and expeditious trial;

(3) public interest considerations;

(4) and the interest of the plaintiff in his choice of forum.

The wreckage and witnesses were in Scotland, charter and maintenance co., Scottish co., could be made third party defendants, jury would need to be directed partially on Scottish law and partially on American law- which would be confusing.

Possibility of unfavorable change in substantive law for the plaintiff is rarely taken into account, unless the change of forum would preclude the claim from being heard at all.

Assuming forum is convenient when the plaintiff is foreign is more unreasonable. Policy: To discourage foreign suits based solely on more favorable law in the U.S.

Hoffman v. Blaski

* Venue Provisons begin with U.S.C. §§ 1391, 1392, 1404, and 1406

Summary: Case interprets the language of U.S.C § 1404(a) which states: For convenience of parties and witnesses, in the interest of justice, a District Court may transfer any civil action to any other district or division where it might have been brought. District court and Fifth Circuit allowed defendant who waved venue in there own district to transfer case to the plaintiff’s home state. Supreme Court rules this was incorrect. “Where it might have been brought” means where the plaintiff may have initially brought the suit, doesn’t allow to merely waive venue and bring suit any where they would like.

Chapter 3 Federal Subject Matter Jurisdiction

A. Concurrent Jurisdiction- State courts hold jurisdiction over federal claims concurrently with federal courts. State judges are able to apply federal law. If a case can be heard in either court, the plaintiff chooses where to file the claim.

1. Article III, Section 2 of Constitution: “Arising Under” Jurisdiction- Judicial power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;

-Article III has a broad reach; § 1331 of Federal Rules narrows this reach: The district court shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.

§ 1338 (a)-

Osborne(Handout)

Summary: Court uses federal ingredient test and allows any case that raises any federal issue to be heard under in federal court.

Testa v. Katt

Summary: Court rules a particular statute is a “penal statute”- statute that provides a penalty; therefore it cannot be heard in state court. Congress may restrict certain subject matters to Federal courts (i.e. federal patent or copyright laws). Codified in 28 U.S.C. § 1338(a)- Exclusive Jurisdiction.

Louisville & Nashville R.R. V. Mottley

Summary: Plaintiffs, Mottleys’, sue the defendant when def. refuses to honor free train passes they had acquired in an earlier settlement with the defendant. Defendant’s defense to this claim is that a new federal law prohibits the honoring of the passes. Plaintiff’s bring suit in Federal court and win at lower levels, U.S. Sup. Ct. rules there was no jurisdiction on appeal.

Concepts:

(1) There is no subject-matter jurisdiction if the federal issue in question is raised as a defense by the defendant. The “Well Pleaded Complaint” Rule: the claim asserted in the plaintiff’s well pleaded complaint (meaning a compliant pleaded without anticipation of purely defensive matter) must be founded in federal law.

(2) Subject-Matter jurisdiction, unlike personal jurisdiction, can be brought up at anytime by anyone (on appeal, after testimony has started, by another level court, etc.). It CANNOT be waived or conferred by consent.

[B] Diversity Jurisdiction- Codified in 28 U.S.C § 1332:

(a ) The district court shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of inter

[1] The Requirement of Complete Diversity- Strawbridge v. Curtis: states all plaintiffs must be diverse from all defendants. There cannot be two citizens of the same state on opposite sides of the case. This rule is not explicitly stated in Article III, became law from this case.

Mas v. Perry

Summary: Plaintiffs sue the defendant for violating privacy act in Federal court under diversity jurisdiction. Plaintiff Judy Mas is concluded to be citizen of Miss. and plaintiff John Mas is citizen of France (today he would be considered citizen of the state he was domiciled in). Defendant was a citizen of Louisiana. Defendant contends the plaintiffs’ citizenship and that the amount in controversy was met for Mr. Mas. Plaintiffs’ file claim asserting recovery of $100,000 each; Mrs. Mas is awarded $15, 000 and Mr. Mas is awarded $5,000.

Concepts:

(1) Court determines citizenship of plaintiff as their citizenship at the time they filed the complaint. Subsequent changes in citizenship, after claim has been filed, is not taken into consideration. This minimizes the opportunity for “game playing.”

(2) Citizenship= Domicile. Domicile= the place of a person’s “true, fixed, and permanent home and principle establishment, and to which he has the intention of returning whenever he is absent therefrom.” Domicile= Residence + Intent to remain

*students place of schooling does not meet the domicile requirement, because they do not necessarily have the intent to remain.

*A person remains the citizen of a state until they establish citizenship of another state.

(3) Amount in controversy is met if the estimate of recovery, made in good faith, is above the limit. If it seems to a legal certainty that claim cannot recover the amount in controversy, then case does not have jurisdiction to be heard in Federal Court (i.e. statutes limiting amount of recovery).

NOTE: Citizenship of Corporations or Associations:

§ 1332 (c)(1)- corporations for the purposes of diversity have two citizenships:

(1) Any state in which it is incorporated; AND

(2)State of its “principle place of business”= where the bulk-of-the-activity takes place; if activities are thoroughly dispersed then nerve center test controls.

Partnerships, Associations, and other unincorporated entities- do not have citizenship apart from the citizenship of their members.

United Mine Workers v. Gibbs

Acri v. Varian Associates, Inc.

§ 1367 (c)- When a federal claim is dismissed, the federal court has discretion to dismiss or not to dismiss the state law claim. Not mandated. Federal court may keep a state law claim for judicial efficiency. Proceeding has already gone far enough through testimony and evidence that the court decides it is more practical to finish case in federal court. If state law claim needs to be decided by state court, some type of state controversy, then federal court may remove to state court.

Owen Equipment & Erection Co. v. Kroger

Summary: Plaintiff sues in Federal Court based on diversity jurisdiction. She later enjoins second defendant believing def. to be from Nebraska, but defendant is actually from Iowa(same state as Plaintiff). Diversity is destroyed.

Concepts: § 1367(b)- Restricts Supplemental Jurisdiction: restricts addition of claims if “inconsistent with the jurisdictional requirements of §1332.”

Kramer v. Caribbean Mills, Inc.

Summary: Attorney from Texas was assigned to a case for the purpose of qualifying for suit in federal court. This was apparent from the consideration of $1 given by Kramer and an agreement to pay 95% of the settlement to the Panama Corp. Ct. refused to hear this case based on U.S.C. § 1359- district court shall not have jurisdiction of a civil action in which any party, by assignment or otherwise, has been improperly or collusively made or joined to invoke the jurisdiction of such court.

Williams v. Kleppe

Summary: Plaintiffs sue for the right to skinny dip on the Atlantic shore of Cape Cod. Courts allow the case to be heard in federal court, saying amt. in controversy is met by the loss to defendants. Ct. upholds the regulation against skinny dipping.

Concepts:

(1) Tests for Amt. in Controversy (if not monetary recovery):

- value of object/ loss to defendant

- aggregation of claims

*some suits cannot meet the amt. in controversy requirement: declaratory relief suits, preliminary injunction, or on the facts.

C. Supplemental Jurisdiction

(1) U.S.C. § 1367- federal cts. may hear non-jurisdictional claims, if they are “so closely related to claims in the action within [the courts] original jurisdiction that they form part of the same case or controversy under Article III of the Constitution.”

Chapter 4 The ERIE Doctrine

***These issues ONLY arise in DIVERSITY cases.

I. State Law in the Federal Courts: The Erie Doctrine: in diversity cases, federal courts follow state substantive law and federal procedural law.

[A] State Substantive Law

[B] Federal Procedural Law- § 2072(a)-Congress gives the Supreme Court the right to prescribe general rules of practice and procedure and rules of evidence for cases in the federal system. § 2072(b)- provides a caveat that such rules should not abridge, enlarge, or modify any substantive right. ***These two rules often conflict with each, the issue is what to do when a federal procedural rule may effect the substance of the case. (i.e.- Sibboch: federal procedural rules allow the courts to demand a medical exam by defendant, which is not required in the State law. This could affect the evidence submitted and the ultimate verdict. Majority allowed federal procedure to be followed.)

II. The Substance-Procedure Distinction

[A] The “Outcome Determinative” Test

Guaranty Trust Co. v. York

Facts: Guaranty was a trustee for certain noteholders of Van Swearingen Corp., including plaintiff, York. York brought suit in federal court in NY, under diversity, claiming Guaranty violated its’ fiduciary duties under principles of equity defined in NY state law. Fed. Ct. of Appeals federal statute of limitations, which had passed, is controlling over NY State SOL, so they grant summary judgment for Guaranty. Supreme Ct. Reviews and reverses.

Policy: “[I]n all cases where a federal court is exercising jurisdiction solely because of the diversity of citizenship of the parties, the outcome of the litigation in the federal court should be substantially the same , so far as legal rules determine the outcome of a litigation, as it would be if tried in a State court.”

Reasoning:

-The Court rejects any conclusory decisions on all SOL, as to whether they are substantive or procedural. Court did not want to be held to that standard in all cases regardless of the facts of the case.

Rule: The Court develops a test to determine if the issue at hand is substantive or procedural: Whether it concerns merely the manner and the means by which a right to recover, as recognized by the State, is enforced, or whether such a statutory limitation is a matter of substance in the aspect that alone is relevant to our problem, namely does it significantly affect the result of a litigation for a federal court to disregard a law of a State that would be controlling in an action upon the same claim by the same parties in a State court?

IMP Concept: (1) The court is trying to avoid the result of a case being different in a State Court and Federal Court.

(2) Eliminates the notion of forum shopping based on the law that will apply, forum shopping for favorable procedure is still okay.

(3) Court decides it is more important to establish uniformity of law “vertically” throughout the system, between federal and state courts. ( Not horizontally- throughout the federal system).

(4) Decision still allows the court to provide remedies available only in federal courts and not state courts.

[B] Balancing State and Federal Interests

Ragan v. Merchants’ Transfer & Warehouse Co.

Summary: Plaintiff filed complaint on 9/4/45, but did not serve the complaint on the defendant until 12/28. The accident that gave rise to the suit occurred on 10/1/43. Kansas law had a two-year statute of limitations and stated suit commenced when service was accomplished, following this law would bar plaintiffs claim. Plaintiff’s claim would not be barred by Fed. R. Civ. P., which deemed suit commenced by filing the complaint. Sup. Ct. ruled Kansas law was applicable since it was an “integral part” of the statute and plaintiffs’ claim was barred.

Byrd v. Blue Ridge Rural Electric Cooperative, Inc.***

Facts: Plaintiff brings a diversity suit in a federal court in South Carolina for injuries sustained in the course of his employment. Under state law, issue of whether employer receives immunity was to be decided by the judge alone, w/o intervention of a jury.

Holding: Supreme court decides the case can be tried by a jury in the federal system.

Reasoning: The court gives three reasons for its decision:

(1) “Bound up” concept: The rule in question was not an integral part of the special relationship created by the statute. Court looks to whether the rule in question is part of the policy the statute is attempting to enforce or is it merely a practice of the State court.

(2) “Affirmative countervailing considerations”: There is a strong federal policy against allowing state rules to disrupt the judge-jury relationship in the federal courts. When looking at underlying policy if the federal interest is more weighted than the state interest, it should be followed.

(3) “Absolute” outcome-determinative test- Court looks the degree of certainty and predictability that a different outcome will result. There is not a certainty that the outcome of the litigation would be substantially different if the issue is decided by judge or jury.

***Bassett characterizes this as a balancing test- taking into account all of the three above considerations.

The court does not overrule Erie, it only clarifies the issue of when to use Federal procedural law as opposed to State procedural law.

[C] Controlling Federal Rules and the Policies of Erie

Hanna v. Plumer***

Facts: Plaintiff files suit against the executor of Osgood’s estate, for negligently causing injuries in an automobile accident. She served process on the executor,

Plumer, by leaving papers at his residence with his wife, in accord with F.R.C.P 4. Def. answered by asserting under Mass. Statute, the service must be by delivery in hand upon the executor. D.Ct. grants summary judgment for the def., and Ct.of App. affirms. Sup. Ct. grants certiori.

Rule: (1) There are some rules that “are rationally capable of classification as either” substance or procedure, and within this “gray area,” deference should be given to a valid and controlling F.R.C.P. if there is one applicable.

(2) The policies underlying Erie, discouragement of forum shopping and avoidance of inequitable administration of the laws, are important for distinguishing substance and procedure. Look to the question, would the issue make a difference in where a plaintiff would file a complaint, because it changes the result. (i.e., in this case, plaintiff’s case would not have been barred or substantially changed; the plaintiff would merely change the way they served process).

Rules Enabling Act § 2072- Court emphasizes the point that in this statute Congress has given the federal court the right to prescribe its federal procedural law. So, the courts goal should be to develop their own set of procedural laws while maintaining the separation of powers between state and federal govt.

The court rules an “incidental” change in the result should not be considered, only look to what the

Holding: A federal C.P.R. should be upheld unless the administrative power can show that the Rules Enabling Act is violated.

Three step process:

(1) Is this a federal rule?

(2) Is the F.R.C.P. sufficiently narrow that the state requirements can be superimposed without violating the rule?

(3) If (2) is not possible, then is the F.R. under the Rules Enabling Act? The answer to this will always be yes.

Concurrence- The law is the majority opinion, not J.Harlans opinion.

Burlington Northern Ry. v. Woods

Summary: On appeal the Fed. Court of Appeals imposes a 10% mandatory affimance penalty as required by Alabama Statute. The defendants appeal this decision and win. The court rules that if “a federal rule is ‘sufficiently broad’ to cause a ‘direct collision’ with the state law or, implicitly, to ‘control the issue’ before the court, therby leaving no room for the operation of that law. The rule must then be applied . . .” The court says because the Federal Rule 38 gives the court discretion to apply a penalty, whereas the state law mandates this penalty these laws are opposing and therefore the federal rule will be followed. Even though the outcome is different, this is not something that would have affected where the claim would have been filed.

Gasperini v. Center For Humanities, Inc.

Facts: Laws in conflict are N.Y law that appellate courts are empowered to review the size of jury verdicts and seventh amendment which states “no fact tried by a jury, shall be otherwise re-examined in any Court of the United States.”

Issues: (1) Whether the D.Ct should have applied the N.Y. Statute.

(2) Whether the Seventh Circuit violated the Seventh amendment re-examination (allows the appellate court to reverse the opinion, but not allowed to re-determine the issue) clause by reviewing the jury award and re-determining the award amount.

Holding: District should have applied the N.Y. standard: whether the award deviates from what would be reasonable compensation, rather than the more stringent “shock the conscience” approach of the Federal courts, because this is more of a federal practice and not a requirement codified in rule 59.

Rule: (1) Applies twin aims of Erie- Using the federal would promote forum shopping and cause a different result in the two courts.

(2)

Five Step Approach To ERIE problems:

(1) Is clearly issue of substantive law issue? If no, step 2.

(2) is federal rule legislative, or a practice? Practice, then 3.

(3) “bound up” concept- bound up with rights and liberities of state substantive law? If no, then 4.

(4) will results in federal courts v. state court vary? If yes, then 5.

(5) “affirmative countervailing consideration”? If

Missed Lecture 11/25/02

Fox v. Lummus Company (cont.)

Rule 12(b) motion:

Court will order to amend a pleading if it is so indefinite that defendant would not be able to respond. The court rules “harrassment and pressure” is indefinite because it did not state when the acts occurred and who did them.

Courts have the discretion to strike language or portions of a claim that are merely scandalous or mean spirited, without any legal cause. The courts strike the claim of emotional distress on these grounds, because that type of complaint is not permitted in a suit of this type.

[C] Particularized Pleading Requirements

[1] Pleading Fraud, Damages, and Other Special Matters- Rule 9(b), (c), (f), (g): mandates that complaints alleging fraud or mistake (b), non-performance or omission (c), must be stated with particularity, including time and place (f) and any special damages alleged (g). *special damages- are damages that are not a necessary result of the injury, but have been incurred in this specific instance.

Sweeny Co. v. Engineers-Constructors, Inc.

Summary: The courts evaluate an amended pleading and rule it is still insufficient and use its discretion not to allow the complainants to file another pleading.

Rule: Rule 9(b) recites necessary elements of a pleading alleging fraud: “the circumstances constituting fraud or mistake shall be stated with particularity.”

Plaintiff must state: time, place, and contents of the false misrepresentation, the fact misrepresented and what was gained or given up as a consequence of the fraud. The plaintiff in a particularized pleading must give specific names, dates, and actual monetary amounts of what was gained or lost.

Policy: Court cannot allow a “fishing expedition.” The pleading is so general that anybody could make this claim in a breach of contract case. Cases that are difficult to prove, moral behavior, require greater specificity to insure that there is a valid issue.

[2] “Heightened Pleading Requirements” Imposed for Public Policy Reasons: A Shift Away from Notice Pleading?”- Civil Rights Cases, RICO

Siegert v. Gilley

Summary: A former employee of a government hospital claims his supervisor submitted a false, negative reference that prevented him from getting another job. The supervisor claimed government immunity as a defense. The Court of Appeals rules the pleading must be submitted to a “heightened pleading” standard- to protect good-faith public officials from not only liability, but also from suffering the process of the lawsuit.

§ 1983 claim- claims against government officials. (?)

Supreme Court affirms on different grounds, never officially approves of heightened pleading standard. Rejected in the following case.

Leatherman v. Tarrant County Narcotics Intelligence and Coord. Unit

Summary: The Supreme Court rejects the notion of heightened pleading for claims alleging municipal liability under § 1983.

Reasoning: Rule 9(b) does not include a particularized pleading standard for claims arising under § 1983. The court believes this type of rule should be made, but that is not under judicial discretion. The legislature or committee making FRCP must make this amendment.

Note: A Congressionally-Mandated Heightened Pleading Requirement has been enacted.

[3] Requirements of Pleading Evidentiary Matters in Compliance With Screening Mechanisms

Deluna v. St. Elizabeth’s Hospital, Illinois State Ct. Case

Summary: The court rules a state statute requiring plaintiffs’ in a medical malpractice claim to attach to the complaint an affidavit stating that he or she has consulted with a healthcare professional, in whose opinion there is a “meritorious cause” is constitutional.

**This trend is following in repo. cases and class actions suits.

**The current FRCP (Rule 12(b)) that allow the court to demand an amended more detailed claim.

**Rule 7 is another option available to courts: allows the court to demand plaintiff file a response to defendants answer.

[D] Alternate and Inconsistent Allegations

Lambert v. Southern Counties Gas Co.

Rule: Plaintiff’s do not usually have all of the facts at the time of filing a pleading. Therefore, the plaintiff may allege inconsistent claims to cover all the ground. The court allows this inconsistency during the pleading procedure.

[E] The Form of the Pleadings: No “Magic Words”

Faulkner v. Fort Bend Ind. Sch. Dist.

Rule: There are no magic words that need to appear in a pleading to be heard.

[4] Drafting the Complaint

[5] The Answer in Federal Court

A. Dilatory Pleas and Attacks on the Complaint- used to raise fundamental defects in the suit by a “plea to the jurisdiction” or by a “plea in abatement.”

1. Modern Federal Approach: Rule 12(b) motion to dismiss on grounds of personal or subject matter jurisdiction, venue, process, service, failure to state a claim, and failure to join a party. May be included in the answer or can be filed separately in a Rule 12 motion. Rule 12(h) allows several of these issues to be waived if not raised in a timely manner. Rule 12(g) allows pleader to consolidate multiple defenses or requests in one motion.

2. Rule 12(a)(1)(A)- Gives the defendant 20 days after being served with summons to answer a complaint. Rule 6 tells you which days count in the 20 days.

3. The defendant can include these pleas in the answer, rather than filing a motion.

B. Admissions and Denials

1. General denial- defendant is generally denying the plaintiff’s allegations. The effect is to put in issue all of the ultimate facts required to sustain plaintiff’s claim. Defendant’s greatest benefit is that he avoids narrowing the issues available to him at trial and therefore minimizes the probability of variances between proof and pleading of his defensive theories. NOT allowed in FRCP.

2. Rule 8(b): defendant is required to sift through the complaint and state a position on the truth or falsehood of each allegation in it. Defendant can format his answer to admit true allegations and lump together his denial of all other allegations. If allegation is not denied, it will be deemed admitted. Defendant is allowed to say that they don’t know the response yet, since they haven’t had enough time to discover.

White v. Smith

Summary: Plaintiff was to be extradited to North Carolina. Plaintiff files a habeas corpus suit to challenge the extradition; officials extradite him before his hearing. Plaintiff files the following complaint in response. The defendants answer to this complaint is much to broad, they essentially file a general denial.

A general denial in federal court essentially denies EVERYTHING the plaintiff states. The defendant must separate out and admit to the facts that are accurate. There is normally at least something correct specified in the complaint.

Policy: If plaintiff has taken time to make a complaint, the defendant should take equal effort in replying, in light of fairness.

C. Affirmative Defenses- rather than denying or rebutting an element of the plaintiff’s claim, the affirmative defense adds a new fact or set of facts that defeats the claim even if plaintiff proves all the elements.

1. Rule 8 (C): lists certain affirmative defenses, among the most common are contributory negligence, estoppel, fraud, limitations, and waiver. These defenses must be plead early or they will be deemed waived.

2. The burden of raising the issue of defense and proving the elements of the defense is assigned to the defendant. Policy: Plaintiff should not have burden of proving their own claim and disprove all of defendant’s possible defenses.

Gomez v. Toledo

Summary: The plaintiff was retaliated against for “whistle-blowing.” The plaintiff claims damages for violation of due process. District grants motion for dismissal for failure to state a claim. Ct. of Appeals affirms. These courts hold that since defendant has qualified immunity if he was acting in good faith, plaintiff has the burden of showing defendant acted in bad faith.

Supreme Court overrules. The Court states the burden of anticipating the defendant’s defense cannot be placed on the plaintiff. It is a heavy burden to ask plaintiff to prove bad faith, prove a negative action.

[D] The Plaintiff’s Reply

1. Rule 7: A reply is required by the plaintiff in response to a counterclaim, in all other situations the court may use it’s discretion to require plaintiff to file a response. Reply will probably consist of responses denying or avoiding the answer. Policy: Allow courts to see the parameters of the case and flush out frivolous claims.

Office Hours:

Mon.: 10:00 – 2:00 (away 11:00 – 12:00)

Wed.: 10 – 12:00

Fri.: 10 – 11:00, 2 – 5:00

Sun: 11:00 – 5:00

Mon. (12/9): 7:30 – 9:00am

Exam Review

A. Subject-matter Jurisdiction- goes to the courts power to hear the case in the first instance….

1. Arising Under- Article III-Congress has the power to authorize federal jurisdiction if there is a federal issue in question and Osborne;

§1331- more narrow; Mottley Case: well pleaded complaint rule.

2. Diversity- Article III- Congress authorizes hearing a case with minimal diversity, however Strawbridge v. Curtis requires complete diversity and § 1332 establishes amount in controversy req.(good faith claim of monetary relief, generous standard); Look to value of claim to either side (avoiding penalty)

§1332(a)-for individuals

§1332(c)- for corporations

In general, aggregation of claims is not allowed.

Aggregation of claims is allowed for single plaintiff against a single defendant.

3. Supplemental- §1367 subsection A: very broadly confers (Gibbs Case- limits requiring common nucleus of operative fact); Subsection 2 (Kroger Case) exception- when asserting a claim against a third party defendant (brought in under 14, 9, see statute) the diversity req. must still be met?; Subsection 3: gives the court discretion to not hear the case.

4. Removal- §1441 and §1442; defendant can remove a state court case to federal district court in the same geographical area. §1446(B): Right to remove expires in 30 days. Removal must be based on plaintiff’s claim, not defendants defense; All defendants must remove together.

5. Remand: plaintiff may remand a case within 30 days of removal.

SUPPLEMENTAL JURISDICTION CANNOT BE WAIVED AND CAN .

B. Personal jurisdiction and Notice

1. Does the states long-arm statute bring the defendant within the states jurisdiction.

2. Does the courts exercise of jurisdiction over the defendant violate due process? What contacts does the non-resident defendant have with the forum state (minimum contacts analysis)? Are the contacts pervasive: systematic and continuous to confer general jurisdiction or are they limited to the issue in the state and therefore confers specific jurisdiction? Talk about notions of fair play and substantial justice. Did the plaintiff purposefully avail themselves of the jurisdiction? Even if the def. meets minimum contacts, would exercising jurisdiction be reasonable (Asahi)?

Schaffer v Heitner- All exercise of jurisdiction must satisfy notions of fair play and substantial justice. Quasi in rem jurisdiction is not enough alone to confer jurisdiction.

Tag Juridiction and General Appearance in court automatically confers jurisdiction.

3. Notice- The defena

a. Rule 4 is for federal court and incorporates state req., which must also be looked at,

b. Mullane standard: was the notice sufficient to make def. aware of the claim against them? Due process standard.

C NOTICE IS WAIVABLE, if defendant does not raise the issue first then the right to raise it is waived.

C. Venue- §1391: require that a lawsuit be brought where the defendant resides or where the claim arises out of (site of accident). Goes to the notion of a more appropriate forum. Even if subject §1391 (a)- § 1391(b)- § 1391(c)- corporations; §1391(d)- change venue?

Forum nonconveniens- gives the forum discretion to refuse to hear the case because the forum has no interest in litigating the issue. In order to use this discretion there must be another available forum where the case can be heard.

D. Erie Doctrine- show additional knowledge of cases

1. Need a state law based claim: only diversity or supplemental jurisdiction

2. Apply state substantive law and the FRCP for procedural

3.

4. Is there federal legislation governing the rule or is it merely custom? Can the federal provision and state procedure be put together?

5. Is the substantive and procedure bound up together? Is the procedure an integral part of enforcing the substantive rule?

6. Would the result change if heard in the federal or state court? If the result would not change then follow federal procedure. If it does change, then…

7. Is there strong federal policy that requires using the federal law? Then use federal, if not use state.

Rules Enabling Act (rest of the cases) v. Rules of Decisions Act-first couple of cases (Erie and York)????

E. Pleadings-

1. File lawsuit by filing complaint

2. Must contain: Rule 8:(1) basis of subject matter juris.; (2) short and simple statement of the claim, the court and defendant must have notice of the basis of the claim (3) what is the relief sought. Rule 9: claims that require greater specificity.

3. Defendant must respond: (1) short and plain statement of defenses and any affirmative defenses (2) counter claims and cross claims.

4. Reply: Counter claim by defendant must be answered by the plaintiff. Otherwise the requirement of a reply is left to the discretion of the court. Court may req, a reply in

Issue List

I. Subject-Matter Juridiction: Is case being brought in Federal Court?

A. Arising-Under J. (1) Issue in Claim?

B. Diversity J.-(1) Citizenship of P and D?

(2) Corporations Citizenship?

(3) Is the amount in controversy meet?

(a) value of objects? Value of P and D interest?

(b) aggregation of claims.

C. Supplemental J. (1) Is there a related state law claim that may be added?

(2) Common nucleus of operative facts?

(3) Destroy diversity?

WAS THIS JURISDICTION ASSERTED IMPROPERLY? IT CANNOT BE WAIVED!

II. Personal Jurisdiction: Does the court have jurisdiction over the defendant?

A. Identify which type of long-arm statute the state has. Is the long-arm statute a laundry list or does it reach to the limits of due process?

Laundry list: Identify if D falls within one of the clauses, MAY fall within more than one. Policy is to make sure not to go outside of what legislature intended.

B. Is the exercise of jurisdiction over the defendant fair and reasonable.

1. Are there minimum contacts?

a. Is the lawsuit based on D’s contacts with the forum state (general v. specific)?

- offices, employees, purchases, deliveries, and contracts.

b. Nature and quality of those activities.

- volume of activities, systematic-continuous-pervasive, percentage of sales, foreseeability v. unilateral activities of others, purposeful availment.

c. Has the party enjoyed the benefits/ protections of the forum state?

-stream of commerce, purposeful availment, targeting customers, marketing.

2. Even if minimum contacts are sufficient, is the jurisdiction fair and reasonable? “notions of fair play and substantial justice.”

a. The forum state’s interest in hearing the case.

- protecting citizens, enforcing its laws.

b. Estimate of inconveniences

- In D defending in that state and P defending in alternative forum

- witness, transporting evidence,

- is the D a foreigner- which might make it unfair to subject them to U.S. jurisdiction (Asahi)

3. Judicial Efficiency

4. Existence of alternative forum(s)

5. Purposeful availment.

****THIS CAN BE WAIVED, Look for Direct attack(Special Appearance)?

Collateral Attack (Default/ challenge decision in desired forum)?

III. Service of Process

(1) On an individual?

(2) What is a dwelling?

(3) On a Corporation?

IV. Removal- Was the case brought in state court and defendant wants to move to federal court?

A. Could the Plaintiff have brought suit in Federal Court?

B. Is the Defendant a citizen of the state in which suit is brought?

C. Are 30 day and 1 year procedural requirements met?

V. Venue- Final issue regarding where the suit can be brought.

1. Where do the defendants reside?

2. Is jurisdiction based on diversity? Use 1391 (a).

3. Is jurisdiction based on arising under? Use 1391(b).

a. (a)(1) and (b)(1) allow the case to be brought in any district where any of the defendants

VI. Transfer of Venue

1. Where the action could have been brought by plaintiff?

2. Is there another appropriate forum?

VII. Erie Issue. Does the jurisdiction arise out of diversity/ supplemental?

A. Is there a state common law that should be applied?

B. Is there an issue of state substantive law v. federal procedural law?

VIII. Pleadings

Requirements in pleadings for federal court are governed by Rule 8-22

IX. Answer- SEE END OF OUTLINE

I. Subject Matter Jurisdiction.

The first question to address is whether the (?) federal court has subject matter jurisdiction over this case. The federal courts are not courts of general jurisdiction; the courts are limited to hearing the types of cases listed in Article III §2 of the constitution and the federal statutes, such as 28 U.S.C. §§ 1331 and 1332.

(A) Article III and U.S.C. §1331 confers jurisdiction on the federal courts to hear cases that “arise under the Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their authority.” The court in Osborne, takes a federal ingredient approach to interpreting this language. The federal ingredient approach allows federal courts to hear any case where a federal issue is raised in the initial claim or as a defense. The Mottley decision took a much narrower approach to interpreting the statute, establishing instead the well-pleaded complaint rule. This rule requires that the claim asserted in plaintiffs’ complaint raise a federal issue in order for federal courts to properly exercise subject matter jurisdiction based on arising under jurisdiction. In this case, (?????). -ANALYSIS and CONCLUSION-

(B)Article III of the constitution also confers subject matter jurisdiction on federal courts to hear cases “between citizens of different states.”

(1)Strawbridge v. Curtis narrows the interpretation of the clause to require complete diversity between plaintiffs’ and defendants’; all plaintiffs’ must be diverse from all defendants’.

(2) U.S.C. 1332(c)(1) provides that corporations are citizens, for purposes of diversity, of both the place where the principal place of business is located and the state in which they are incorporated. If the corporation’s activities are widely dispersed the courts may look to the nerve-center of the corporation: the corporate headquarters or home office.

(3) U.S.C. § 1332 limits the federal courts jurisdictional reach in this instance to cases “where the matter in controversy exceeds the sum or value of $75,000.” To meet the AIC requirement, plaintiff good faith estimate of recovery greater than $75,000 will suffice, unless it is appears to a legal certainty that the claim is really for less.”

(a) If the damages are intangible the courts look to the value of the object or loss to defendant as opposed to plaintiff.

(b) A single plaintiff may aggregate any claims he has against a single defendant to reach the required sum. However, plaintiff cannot add claims he has against different defendants or claims from other plaintiffs’ against the defendant.

(C) In § 1367(a) where the federal court has proper jurisdiction over a case, they are given the authority to hear “all other claims that are so related . . . that they form part of the same case or controversy.”

(1) The Gibbs analysis allows the courts to hear “all claims that arise out of a common nucleus of facts” as the federal claim, including additional claims by plaintiff, as well as those asserted by other parties.

(2) Congress codifies the Kroger result in § 1367 (b), restricting the application of supplemental jurisdiction over defendants impleaded under Rule 14, 19, 20, or 24, if diversity is destroyed and jurisdiction over the original suit was based on diversity (§1332).

(3) The second half of the Gibbs decision is codified in § 1367 (c), giving the court discretion not to hear the additional claims even if jurisdiction is proper, if (1) the federal claims are dismissed, or (2) if the state issue predominates.

Conclusion: IF THIS JURISDICTION IS CONFERRED IMPROPERLY, IT CANNOT BE WAIVED.

-Quantify the above conclusion, and regardless continue the discussion.-

II. Now we have to consider whether the court has personal jurisdiction over the defendant.

(A) To find jurisdiction over the defendant in the first instance, the courts must look to the jurisdictional reach authorized by the states long-arm statute.

(B) The second consideration is whether the courts exercise of jurisdiction would meet the constitutional requirements of due process. The court must consider has sufficient minimum contacts with the forum state that they could reasonably expect to be hauled into court there (Int’l Shoe). The court weighs equally contacts that are and are not present. Establish three way relationship between defendant, forum state, and the litigation. International Shoe requires that when considering the sufficiency of defendants contacts with the state, the courts look at the “quality and nature” of the contacts and exerting jurisdiction must comport with “traditional notions of fair play and substantial justice.”

1. First determine what type of contacts are necessary: Is the case arising out of defendants contacts with the forum state- specific jurisdiction? Or has the claim arisen in another place and is unrelated to the contacts with the forum state? In this case the contacts must be systematic and continuous (Perkins).

2.

*File a Rule 12(b)(2) motion to challenge personal jurisdiction. MUST BE DONE FIRST –PJ CAN BE WAIVED.

III. The service of process standard established in Mullane requires “notice be of such a nature as reasonably to convey the required information, . . . and it must afford reasonable time for those interested to make their appearance, . . . But if with due regard for the practicalities and peculiarities of the case these conditions are reasonably met, the constitutional requirements are met.”

(1) F.R.C.P 4(e) governs service of process on an individual defendant. Rule 4(e)(2): allows service of process in a federal case to be made by personally delivering the summons and complaint to the defendant, or by leaving papers at the defendants dwelling house with some person of suitable age and discretion, or by delivering papers to an agent appointed by defendant. Rule 4(e)(1) also allows service to be made according to provisions governing service in the state where the federal court sits or according to the provisions of the state where service is effected.

(2) A dwelling house is defined as the place that defendant recognizes as his home (Leigh). Defendant may have multiple dwellings or place of abode; each must only contain sufficient indicia of permanence (Nat’l Dev. Co.).

(3) Rule 4(h) (1) governs service of process on corporations. Service can be made by delivering papers to any agent of the corporation or by any means provided by the state law in which the court sits or where service is effected.

* File Rule 12(b)(5) motion to challenge service of process.

IV. (A) Defendant may remove a case brought in state court to federal court under § 1441(a), if the federal courts have original jurisdiction, meaning the plaintiff could have initially chosen to bring the suit there.

(B) § 1441 (b) limits removal if the original jurisdiction is based on diversity and any of the defendants are citizens of the state in which the claim was filed.

(C) § 1441 (c)- If the original jurisdiction is based on

(D) § 1446 requires that the notice for removal must be made according to Rule 11 of the FRCP and contain a short and plain statement of the grounds for removal.

(E) Procedural requirements codified in § 1446 (b) require defendant to file a notice for removal within 30 days of receipt of service. Right to remove is waivable and must be raised in the initial answer. § 1446 (b) also limits removal of amended complaints that become removable after a one year period if the basis of jurisdiction is diversity.

(F) Plaintiff may move to remand a case, according to § 1447, within 30 days after the notice of removal is filed. If plaintiff’s contention is based on the court lacking subject matter jurisdiction, the motion may be made at anytime before judgment.

V. (1)§ 1391(a) is used when considering appropriate venue in diversity cases. Subsection (1) provides that venue is proper in a judicial district where any defendant resides, if they all reside in one state. “Resides” has been interpreted to mean where the defendant is domiciled, or where she actually lives and intends to remain. If the defendant are from different states, subsection (2) provides venue is proper in a judicial district in which a “substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated.”

(2)SAME ANALYSIS FOR ARISING UNDER JURISDICTION IN § 1391 (b) (1)(2).

(3) If an appropriate venue cannot be found under either of these provisions, in diversity cases, § 1391 (a)(3) authorizes venue in a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced.

In cases based on all other types of jurisdiction, § 1391(b)(3), authorizes venue in a judicial district where the defendant may be found.” This is a fall back provision and rarely used.

Exceptions to these venue provisions (1) WAIVING the right, by not raising the issue in answer (2) special types of claims (i.e. patent claims), (3) local actions.

VI. U.S.C. § 1404 (a) allows District ct. to transfer venue to “any district where it might have been brought.” The Supreme Court interprets this language to mean defendant can only transfer to a venue where the plaintiff could have brought the suit. § 1404 (a) also gives the court discretion to transfer cases to other districts when justice so requires. The court may look at the Gilbert factors in deciding whether a transfer in venue is appropriate: (1) availability of proof, (2) practical problems of inexpensive and expeditious trial, (3) public interest considerations, (4) and the interest of the plaintiff in his choice of forum. REMEMBER VENUE TRANSFER REQUIRES ANOTHER APPROPRIATE VENUE.

VII. (A) The Rules of Decision Act § 1652 states “the laws of the several states . . . shall be regarded as rules of decision in trials at common law in the courts of the United States, in cases where they apply.” The Erie interpretation of this rule, overruled the Swift interpretation, and required federal courts to apply state statutory law as well as common law in adjudicating disputes arising out of a state law based claims.

(B) The Erie Doctrine requires that the federal courts, in adjudicating state law based claims, follow state substantive law and federal procedural law. The Rules Enabling Act § 2072 (a) allows the Supreme Court to prescribe general rules of practice and procedure, so long as they do not “abridge, enlarge or modify any substantive right (§ 2072 (b)).”

Five step test to apply to decide if a law is substantive or procedural:

(1) Is the conflicting state law substantive law? If yes, state law controls per Erie (§ 1652). -It won’t be on the exam, but make an argument both ways and move on.

(2) Is the federal rule legislative or is it a custom/practice? If legislative (i.e. “true rule” of civil procedure) then Hanna (Rules Enabling Act) says the courts must follow the federal procedural rule.

(a) Is the federal and state law superimposable?

If it is arguably a practice and not superimposable go on to step three.

(3) Is the conflicting state law “bound up” with the substantive state law that gives the basis for the claim? (Byrd & Ragan).

(a) together in same state?

(b) procedural v. policy

(c) strongly tied to the substance of the case?

(d) bound up w/rights and abilities of state substantive law?

4. Will result in Federal court be different than state court? (Outcome determinative test; York)

(a) look @ it from when the Plaintiff filed the claim: was there a reason why plaintiff chose to bring the case in federal court?

(b) was this one of the reasons why the P brought the claim

5. “Affirmative countervailing considerations”- are there strong policy issues supporting the application of the federal law? If the federal interest is more weighted than the state interest, it should be followed (Byrd).

VIII. The requirements for pleadings in federal court are codified in F.R.C.P. 8-11. Rule 8(a)(1) requires that a pleading contain the basis for subject matter jurisdiction and 8(a)(2) requires a short and plain statement of the claim, which will suffice to avoid dismissal (Conley). Rule 8(e)(2) allows plaintiff to plead in the alternative.

The sufficiency of the pleading may be challenged in the answer or by filing a Rule 12(b) motion stating the claim is so indefinite that the defendant cannot answer. Defendant may also file a 12(b) motion to dismiss on grounds that the pleading does not state a valid claim. Court may require an amended, more detailed claim.

Rule 7 is another option available to courts, it allows the court to demand plaintiff file a response to defendants answer.

Certain types of cases require a particularized pleading, including complaints alleging fraud or mistake (Rule 9(b)) and non-performance or omission (Rule 9(c)). Rule 9(f) requires that these pleadings alleging these complaints must include time and place of injury, and any special damages alleged (Rule 9(g)).

The Supreme Court in Leatherman, required heightened pleading standards be codified in the F.R.C.P. before they become applicable to other types of claims.

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