Procedure I/Civil... · Web viewCivil Procedure Peterson – Fall 2011 Rule 1: FRCP should be construed and administered to secure the just, speedy, and inexpensive determination

CIVIL PROCEDUREPETERSON – FALL 2011

RULE 1: FRCP should be construed and administered to secure the just, speedy, and inexpensive determination of every action and proceeding

PLEADINGS

I. Introductiona. Pleadings: Documents filed by litigants setting forth claims and defensesb. Functions: Putting the other party on notice of the claims and defenses (the burden of

factual discovery is places on the discovery process) and on what grounds they restc. History of Pleadings

1. Common Law: Very formalistic writ system/forms of action2. Code Pleading: Statement of facts constituting the cause of action3. FRCP: No fact requirement

II. Complainta. Elements, Rule 8(a)

1. Short and plain statement of the grounds for the court’s jurisdiction2. Short and plain statement of the claim showing that the pleader is entitled to

relief3. Demand for the relief sought, which may include relief in the alternative or

different types of reliefb. Form, Rule 10

1. Caption stating the name of the court, title of the case, identity of the document, and file (case) number

2. Body has claims or defenses in numbered paragraphs3. Parties are allowed to reference allegations found elsewhere in the document4. Parties are allowed to attach to their pleading a copy of a significant written

instrument (like a contract)c. Legal Sufficiency

1. On the face of the complaint, if every fact alleged by the plaintiff was taken as true, does the law provide a remedy for P (does P state a claim upon which relief may be granted)?

2. D can challenge whether P has stated a claim under Rule 12(b)(6)3. D can make this challenge at other points in proceedings as well under Rule

12(h)(2)d. Factual Sufficiency

1. If the pleading is legally sufficient, has P pleaded her claim in sufficient detail to proceed in the litigation?

2. Code System:i. P must plead the “ultimate facts” constituting a cause of action

A.ii. Evidentiary facts are too specific

iii. Legal conclusions are too general3. FRCP:

i. Rule 8(a)(2): A short and plain statement of the claim showing that the pleader is entitled to relief

4. Test: Can D respond to the complaint?

DIOGUARDI V. DURNINGFACTS: P’s home drawn complaint was dismissed under 12(b)(6)HOLDING: The factual allegations of a complaint are sufficient if they show each element of the claim.

CIVIL PROCEDURE OUTLINE FALL 2011 1

CONLEY V. GIBSONHOLDING: Pleadings are sufficient unless P can prove no set of facts in support of his claim which would entitle him to reliefNOTE: Approved but not taken literally

BELL ATLANTIC CORPORATION V. TWOMBLYFACTS: P sued phone companies for violating the Sherman Antitrust Act, pleading that the companies engaged in conscious parallelism (that the Ds were aware of each other’s actions and engaged in such actions themselves) and that the Ds behavior was the result of an agreement, but did not state when or where such agreement allegedly took place.HOLDING: P cannot merely name an element of the cause of action but must provide a factual allegation supporting it.

ASHCROFT V. IQBALFACTS: P alleges that Ds violated his constitutional rights by adopting policies that led to his detainment on account of his race, religion, or national origin. His complaint was dismissed.HOLDING: In cases where the complaint is exceptionally vague (Note: here, this was in a case relating to terrorism after 9/11, so there was a strong tendency to think Ds’ actions legal), there is a plausibility standard

e. Pleading With Particularity1. Rule 9(b): In alleging fraud or mistake, a person must state with particularity

the circumstances constituting fraud or mistake. Malice, intent, knowledge, and any other conditions of a person’s mind may e alleged generally.

2. Rule 9(g): If an item of special damage is claimed, it must be specifically stated

i. Special damages differ by courtii. Majority – hospital and medical bills and lost profits for a business

are special damages

LEATHERMAN V. TARRANT COUNTYFACTS: P sued Tarrant County; municipal liability was for allegedly failing to adequately train its police officers. Complaint was originally dismissed because it did not meet the heightened pleading standard of the 5th Circuit for suing a municipality.HOLDING: Pleading with particularity is only required in cases of fraud and mistake. It does not apply to cases of municipal liability.NOTE: Still good law. Not overruled by Iqbal.

DENNY V. CAREYFACTS: P sued D for issuing false and fraudulent statements. D moved to dismiss under 12(b)(6) for not meeting standards of 9(b). HOLDING: 9(b) is not a rigorous standard. The ultimate test is, can the defendant adequately answer the complaint?NOTE: P won in Denny v. Carey. In essentially the exact same case, P lost in Denny v. Barber because the complaint did not meet 9(b), and that case is more often cited. Shows the importance of storytelling.

f. Pleading Inconsistent Facts and Alternative Theories1. Rule 8(d)(2): A party may set out 2 or more statements of a claim or defense

alternatively or hypothetically, either in a single count or defense or in separate


ones. If a party makes alternative statements, the pleading is sufficient if any one of them is sufficient.

2. Rule 8(d)(3): A party may state as many separate claims or defenses as it has, regardless of consistency.

MCCORMICK V. KOPMANNFACTS: Wife sued on behalf of her dead husband. She claimed that either (1) D1 negligently drove his truck and killed the husband, who was not driving negligently, or (2) D2 over-served the husband alcohol and that his intoxication caused him to drive so as to get into a collision.RULE: Inconsistent claims are mutually exclusive and P cannot recover on both, but she can make both.

III. Dismissal of Complainta. Voluntary Dismissal, Rule 41(a): A plaintiff may dismiss an action (without prejudice,

unless P has previously dismissed an action based on or including the same claim) without court order by filing

1. A notice of dismissal before the other party files an answer or makes a motion for summary judgment in response to the complaint, OR

2. A stipulation of dismissal signed by all parties who have appearedb. Involuntary Dismissal, Rule 41(b): A defendant may move for dismissal, with prejudice

1. Not dismissed with prejudice if it is dismissed for lack of jurisdiction, improper venue, or failure to join a party under Rule 9

2. Link v. Wabash R. Co.: Court may dismiss a case on its own motion under 41(b)

c. General: Defendant’s ways to get the case dismissed1. Dismiss complaint (Rule 41)2. Dismiss for failure to state a claim (Rule 12(b)6))3. Summary Judgment (Rule 56)4. Directed verdict (judgment as a matter of law)5. Judgment Not Withstanding the Verdict

IV. Responses to Complainta. Answer

Rule 12(a): Responsive pleadings must be served within 21 days after the original pleading is served (some exceptions)

1. Admit or deny allegations found in the complaint2. Denials

i. General denial: deny every allegationii. Specific denial: respond to each paragraph/allegation individually

iii. Qualified general denial: admits everything except Xiv. Argumentative denial: pleading contrary facts (bad)v. Negative pregnant: denial that is too specific/literal (bad)

vi. Conjunctive denial: deny an allegation that only some of which is false (bad)

ZELINSKI V. PPIFACTS: PPI denied an allegation that said “A motor vehicle . . . owned, operated, and controlled by the defendant, its agents, servants, and employees, was so negligently and carelessly managed . . .” The person operating the fork lift was no longer employed by PPI but rather by CCI, and the fork lift was owned by PPI but leased by CCI.HOLDING: Ineffective denial and court ordered that the jury be told that the fork lift was owned by PPI and the driver was a servant in PPI’s employ.

3. Affirmative Defenses (introduce new legal claim or practical matter)


i. Rule 8(c)(1): Includes things like duress, re judicata, statute of frauds, statute of limitations, etc.

ii. Must raise affirmative defenses in your answer or they are waivedb. Defenses by Motion, Rule 12(b)

1. Defenses raised by motionMotion asserting any of these defenses must be made before pleading is a responsive pleading is allowed.

i. Lack of subject matter jurisdictionii. Lack of personal jurisdiction

iii. Improper venueiv. Insufficient processv. Insufficient service of process

vi. Failure to state a claim upon which relief may be grantedvii. Failure to join a party under Rule 19

2. Joining Motions, Rule 12(g): Any Rule 12 motion may be joined with any other Rule 12 motions

3. Waiving Motionsi. 12(b)(2)-(5) [lack of PJ, improper venue, insufficient process and

service of process] defenses are waived ifA. They could have already been asserted in a motion OR B. The party fails to make a Rule 12 motion OR fails to include it

in a responsive pleading or amendment allowed as a matter of course

ii. Failure to state a claim and failure to join a person required by Rule 19 may be raised: in any pleading, in a motion for summary judgment, or at trial

iii. If lack of subject matter jurisdiction is discovered at any time, the court must dismiss the case

c. Claims Made by the Defendant1. Defendant can assert claims against other parties and sometimes join

additional parties2. Counterclaim: Claim against an opposing party3. Crossclaim: Claim against a co-party4. Plaintiff must file an answer to a counterclaim so designated

d. Failure to Respond1. Rule 12(a): Responsive pleadings must be served within 21 days after the

original pleading is served (some exceptions)2. Default, Rule 55(a): When a party against whom a judgment for affirmative

relief is sought has failed to plead or defend, a clerk must enter the party’s default Just a notation in the court’s docket; can be set aside for good reason

3. Default Judgment, Rule 55(b): If the plaintiff’s claim is for a liquidated amount, the clerk must enter judgment for that amount and costs against a defendant who has been defaulted. If the claim is for an unliquidated amount, the party must apply to the court for a default judgment (holds hearings on damages and enters judgment) Can also be set aside for good reason but much harder

V. Amendmentsa. Whether you can amend before trial, Rule 15(a)

1. As a matter of course, Rule 15(a)(1): A party may amend its complaint once as a matter of course within 21 days after serving it, or if a responsive pleading is required, 21 days after service of the responsive pleading or 21 days after service of a motion under Rule 12


2. Other amendments, Rule 15(a)(2): In all other cases, a party may amend its pleading only with the opposing party’s written consent or the court’s leave. The court should freely give leave when justice so requires.

i. When does “justice so require”?Balance the moving party’s need to amend, considering any unwarranted delay, with prejudice that will result for the non-moving party, considering any ways to mitigate it.

3. Time to respond, Rule 15(a)(3): Any required response to an amended pleading must be made within the time remaining to respond to the original pleading or within 14 days after service of the amended pleading, whichever is later.

b. Effect of variance at trial, Rule 15(b)1. Relevant for issue presented at trial that was not raised in the pleadings2. Objection at trial, Rule 15(b)(1): If a party objects to an issue raised at trial that

was not in the pleadings, the court may permit the pleadings to be amended when doing so will aid in presenting the merits and there is not prejudice to the objecting party. Court may grant a continuance to enable the objecting party to meet the evidence.

3. No objection at trial (consent), Rule 15(b)(2): When an issue not raised by pleadings is tried by the parties’ express or implied consent, it must be treated as if raised in the pleadings. A party may move at any time to amend the pleadings to include the issue but failure to amend does not affect the result of the trial of that issue.

c. Whether an amendment can relate back, Rule 15(c)An amendment relates back to the date of the original pleading when

1. Rule 15(c)(1)(A): The law on the statute of limitations allows relation back2. Rule 15(c)(1)(B): The amendment asserts a claim or defense that arose out of

the conduct, transaction, or occurrence set out in the original pleading 3. Rule 15(c)(1)(C): The amendment changes the party against whom a claim is

asserted, if 15(c)(1)(B) is satisfied and if within 120 days from when the original complaint was filed [Rule 4(m)],

i. The party to be brought in by amendment received notice of the action AND

ii. Knew or should have known that the action would properly have been brought against it

MARSH V. COLEMAN COMPANYFACTS: P filed suit against employer for his termination being in breach of contract but later sought to amend the complaint to add a claim for fraud (based on statements made before he was fired that P had job security). The statute of limitations for the fraud claim had run out at this point but had not run out at the time of the original complaint.HOLDING: The fraud claim does not relate back because did not arise out of the same conduct, transaction, or occurrence as the breach of contract claim because the only factual overlap is the date that his employment ended and the defendant had no reason to anticipate from reading the original complaint that it should prepare a case based on the acts alleged for fraud.NOTE: This was a very formalistic opinion. It could easily be argued the other way.

VI. Integrity & Sanctions in Pleadingsa. Rule 11(a) & (b): Every pleading and other paper submitted to the court must be signed

by the attorney or pro se party. Signed papers certify that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:


1. It is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation

2. The claims and defenses are warranted by existing law or by a non-frivolous argument for extending, modifying, or reversing existing law or for establishing new law[Sanctions for 11(b)(2) are only for counsel! You pay, not your client.]

3. The factual contentions have evidentiary support4. The denials of factual contentions are warranted on the evidence

b. Sanctions, Rule 11(c)1. If 11(b) is violated the court may impose sanctions2. The opposing party may move for sanctions (separate from any other motion),

but the offending party has 21 days to withdraw or correct the contested writing

3. Sanctions are limited to what will deter repetitionc. Model Rules of Professional Conduct

RECTOR V. APPROVED FEDERAL SAVINGS BANKFACTS: P sued for “at least 60 billion dollars” in compensatory damages and 20 billion in punitive damages. Complaint was dismissed. P amended complaint but asked for “an infinite amount of money.” P did not raise the defense that he was not given 21 days to correct his pleading either when he opposed dismissal or on his first appeal, but he raised this on his second appeal.HOLDING: The 21-day “safe harbor” provision is mandatory but as a defense is waivable if not raised in opposition to the dismissal.


NOTICE & SERVICE OF PROCESS

VII. Constitutionally Minimum Requirements (Mullane)a. Due Process: Requires that notice be

1. Reasonably calculated under all the circumstances to apprise interested parties of the pendency of the action and afford them an opportunity to be heard

2. Of such a nature to reasonably convey the required information3. Afford a reasonable time for those interested to make an appearance

b. Balancing Test:1. Burden on the state2. Interest of the individual

MULLANE V. CENTRAL HANOVER BANK & TRUST CO.FACTS: A bank issued notice of proceedings related to a particular trust in a regional NY newspaper. The beneficiaries included residents and non-residents of NY. Some of the beneficiaries’ addresses were known and some were unknown.HOLDING: Notice was sufficient for the beneficiaries whose addresses were unknown. Notice violated due process for the beneficiaries whose addresses were known.

VIII. Statutory RequirementsService of process must comply with constitutional and statutory requirementsa. Summons must be served with a copy of the complaint [Rule 4(1)] by any person over

the age of 18 who is not a party to the litigation [4(2)] within 120 days of when the complaint is filed [4(m)]

b. Waiving Service, Rule 4(d) 1. P may request, by first class mail or other reliable means, that D waive service2. D has 30 days to return the waiver3. If D fails to waive without good cause, the court must impose the expenses

later incurred in making service and the reasonable expenses of any motion required to collect those service expenses on D

4. If D waives service, D has 60 days to answer the complaint (instead of 21)c. Serving an Individual, Rule 4(e)

1. Follow the state law for service in the forum state, OR2. Delivering service to the individual personally, OR3. Leaving a copy at the individual’s dwelling or usual place of abode with

someone of suitable age (usually >16) and discretion who resides there, OR4. Delivering service to an agent authorized by appointment or law to receive

service of process

NATIONAL DEV. CO. V. TRIAD HOLDING CORPFACTS: Super-rich D is a citizen of Saudi Arabia, and lives there a few months over the year, which owns several homes. He was served with process at his apartment in NY while living there at the time.HOLDING: One may have more than one “dwelling or usual place of abode” where service would be proper if there is (1) sufficient indicia of permanence and (2) D is currently living there.NOTE: Court refuses to take a stand on how this case would have come out if D wasn’t living in the apartment at the time.

d. Serving a Corporation/Partnership, Rule 4(h)1. Follow the state law for service in the forum state, OR2. Deliver service to an officer, managing or general agent, or any other agent

authorized by appointment or by law to receive service of process


PERSONAL JURISDICTIONThe court’s power to render a binding judgment over a particular individual

What connects the concept of due process to personal jurisdiction requirements?Social contract theory – if you incur benefits from a state, you owe some obligation to submit to the state’s legal system in return (substantive due process issue) Full Faith and Credit Clause: If the original court did not have personal jurisdiction over its decision, other jurisdictions are not bound by it

IX. Jurisdictional Statutea. State jurisdictional statute, as interpreted by the state supreme court

1. States tend to interpret these broadly so that they can have personal jurisdiction over all disputes that affect state interest and the interest of the state’s citizens

b. Federal long-arm statute: Rule 4(k)(1)(A) makes the forum state’s jurisdictional statute applicable to federal cases

X. Due Processa. Traditional bases

1. Domicilei. Individual

A. Permanent residenceB. Intent to stay

ii. CorporationA. State of incorporation

2. Consenti. Express: The right to object to a court’s lack of personal jurisdiction

is a personal right that can be waived, in advance of litigation or by your conduct in the litigation (submitting a complaint, failing to raise a Rule 12(b)(2) objection in time)

ii. Implied

HESS V. PAWLOSKIFACTS: MA has an implied consent statute stating that by using its public highways, non-residents appoint the registrar as an agent upon whom service for the non-resident may be served.HOLDING: The statute does not violate due process.NOTE: Shows how consent as a traditional basis was stretched as far as possible for a case that was really based on social contract theory (using highways was a benefit to non-MA-residents)

INSURANCE CORP. OF IRELAND V. COMPAGNIE DES BAUXITES DE GUINEEHOLDING: By submitting to the jurisdiction of the court for the limited purpose of challenging jurisdiction, the defendant agrees to abide by that court’s determination on the issue of jurisdictionNOTE: So D’s choices are to appear for a direct attack OR default and appear for a collateral attack when P tries to enforce the judgment later

3. Territorial service

BURNHAM V. SUPERIOR COURT OF CALIFORNIAFACTS: P and D, married couple, separated in NJ. P moved to CA. D filed for divorce in NJ. P sued for divorce in CA. D came to CA for three days to visit his children there and was served with process for the suit in CA, and then contested personal jurisdiction(4 JUSTICES): International Shoe was meant to expand on the traditional bases and the pedigree of territorial service still allows it to confer personal jurisdiction.(4 JUSTICES): International Shoe applies to all bases of personal jurisdiction but a defendant’s presence in the forum state and receiving benefits from the forum state satisfies minimum contacts.


NOTE: Flawed minimum contacts argument.(1 JUSTICE): Stevens does not choose which argument he agrees with, but concurs in the judgment.

4. Property in the forum statei. Under Pennoyer v. Neff – Property must be seized at the beginning

of litigation in order to establish the court’s personal jurisdictionii. Under Harris v. Balk – Personal jurisdiction existed over an

individual wherever his debtors wereiii. After Shaffer v. Heitner – Personal jurisdiction assertions must be

evaluated according to International Shoe and property in the state is not enough to satisfy modern conceptions of due process. The pedigree of this basis is not enough.

SHAFFER V. HEITNERFACTS: P (nonresident of DE) owns stock in Greyhound (incorporated DE, principal place of business in AZ). P sued Greyhound and its officers in DE, based on the officers’ ownership of stock considered to be “present” in DE. [Personal jurisdiction based on property in the forum state].HOLDING: Property in the forum is not enough to satisfy personal jurisdiction. Personal jurisdiction assertions must be evaluated according to International Shoe and pedigree is not enough.NOTE: Pedigree argument not consistent with Burnham.

INTERNATIONAL SHOE CO. V. WASHINGTONFACTS: WA wanted personal jurisdiction over a DE corporation with its principal place of business in MO when none of the traditional bases applied. Corporation’s only contacts in WA were that it employed 11-13 salesmen there who occasionally rent permanent sample rooms and contain their activities to WA. HOLDING: Due process requires that a defendant have minimum contacts with the forum state such that personal jurisdiction over the suit does not offend traditional notions of fair play and substantial justice. There is personal jurisdiction when there are continuous and systematic contacts, even when the suit does not arise from such contacts. There is personal jurisdiction when there are isolated and sporadic contacts, if the suit arises from such contacts.

Claim arises from contacts Does not arise from contactContinuous & systematic contacts

International Shoe

PERSONAL JURISDICTION

Perkins v. Benguet MiningCONTACTS: Philippines mining corp. had a temporary headquarters in OHCLAIM: Arose in Phillipines but sued in OHPERSONAL JURISDICTION

Isolated & sporadic contacts

McGee v. Int’l Life Insurance Co.CONTACTS: TX company had one customer in CACLAIM: That one customer sued company in CAPERSONAL JURISDICTION

HelicopterosCONTACTS: Foreign corporation whose CEO was in TX and whose pilots were trained in TXCLAIM: Arose in Peru but sued in TXNO PERSONAL JURISDICTION

b. General Jurisdiction1. Continuous and systematic contacts2. Fairness

GOODYEAR DUNLOP TIRES OPERATIONS, S.A. V. BROWNFACTS: A bus accident in France, in which two boys from NC were killed, was attributed to a defective tire made in Turkey at by a foreign subsidiary of Goodyear USA. Goodyear USA and its


foreign subsidiaries were sued in NC. The Turkey subsidiary’s only possible contact with NC was that very rarely, the tires it produced, but not the type of tire in the accident, are distributed in NC. Plaintiff argues that the subsidiary placed its tires into the stream of commerce through a highly organized distribution process and made no efforts to keep them out of NC.HOLDING: No general jurisdiction over a foreign subsidiary without continuous and systematic contacts to the forum state. DICTA [GINSBURG]: General jurisdiction exists where a corporation is regarded as “at home.” NOTE: Before Goodyear, continuous and systematic contacts such as those in International Shoe and Perkins were sufficient. Goodyear decides that the type of contacts there are insufficient for general jurisdiction, and suggests that general jurisdiction requires that a corporation be “at home” in the forum state (and suggests that Perkins would satisfy this test). If the Court upholds the “at home” requirement . . .. If the Court does not uphold the “at home” requirement . . ..

BURNHAM V. SUPERIOR COURT OF CALIFORNIADICTA: Suggestion that an individual can never be subject to general jurisdiction.

c. Specific Jurisdiction1. Claim arises out of contact

MCGEE V. INTERNATIONAL LIFE INS. CO.FACTS: CA resident had insurance with an AZ company that was then sold to a TX company. The CA resident’s beneficiaries sued the now-TX company over a policy dispute in CA.HOLDING: The TX company’s contract in CA was the contact out of which the claim arose; specific jurisdiction was upheld. (Expansive for personal jurisdiction)

2. Minimum contactsi. Purposeful availment

HANSON V. DENCKLAFACTS: Donner, domiciled in PA, created a trust that was executed in DE. She then moved to FL and designated the recipients of the trust. She died and her will was probated in FL. A dispute between the beneficiaries arose and attempted to bring the DE into the litigation in FL. HOLDING: The defendant must purposefully avail himself to the forum state for specific jurisdiction.

ii. D should reasonably expect being haled into court in the forum state

WORLD-WIDE VOLKSWAGEN V. WOODSONFACTS: Ps bought a car in NY from retail dealer Seaway. Ps were driving their car during their move from their former home in NY to their new home in AZ, and got in a serious accident in OK. They attempted to sue Seaway (NY) and the regional distributer (only did business in NY, NJ, and CT) in OK. (Lower courts upheld personal jurisdiction, Supreme Court reversed).HOLDING: Even though there was a contact with OK in that Ds sold a car that went to OK, and the claim arises from this contact, it is insufficient. The defendant’s contacts with the forum state must be such that he should reasonably anticipate being haled into court there.NOTE: Court approves the holding of Denckla and how it applies to this case. The unilateral activity of one claiming a relationship with a nonresident defendant cannot satisfy minimum contacts.NOTE: This is NOT a stream of commerce case like American Radiator; Court seems to approve stream of commerce cases.

iii. Possible types of cases:A. Stream of commerce (American Radiator, Asahi)


GRAY V. AMERICAN RADIATOR & STANDARD SANITARY CORP.FACTS: OH defendant manufactured a valve that was sold to a PA company who incorporated the valve in a radiator. The radiator was sold to an IL customer. The customer sued the OH company in IL when the radiator exploded. OH company had not done any other business in IL.HOLDING: Because the manufacturer put a product in the stream of commerce, deriving a benefit from the state where the finished product was sold and having an expectation that the product would be purchased there, there is personal jurisdiction over the manufacturer in that state.

ASAHI METAL INDUSTRY V. SUPERIOR COURT OF CALIFORNIAFACTS: Zurcher injured by a motorcycle and sued the Taiwanese manufacturer of the tire tube, who joined as a third party Asahi (the Japanese manufacturer of the tube’s valve). (4 JUSTICES): Placing a good into the stream of commerce is, alone, not enough for minimum contacts without something more constituting purposeful availment, including: advertising to/in the forum, designing the product for the market, marketing to the forum through a distributor, or customer service in the forum state. [Think Asahi did not have minimum contacts](4 JUSTICES): Placing a good into the stream of commerce is enough if the defendant knowingly receives a benefit of sale in the forum. [Think Asahi did have minimum contacts](1 JUSTICE): Placing a good into the stream of commerce is enough if it is of sufficient volume, value, and hazardous character. [Think Asahi did have minimum contacts]

J. MCINTYRE MACHINERY, LTD. V. NICAROFACTS: P injured in NJ by a machine manufactured by J. McIntyre UK, distributed in U.S. by J. McIntyre U.S. (4 JUSTICES): Personal jurisdiction in a stream of commerce case requires that the manufacturer somehow personally avail itself to the forum state. [Finding no such purposeful availment in NJ](2 JUSTICES): Personal jurisdiction in a stream of commerce requires some kind of purposeful availment but not to the extent that the plurality suggests (that the manufacturer intend to submit to the power of the sovereign in the forum and can be said to have targeted the forum). This can be resolved by precedent and without extending the law.(3 JUSTICES DISSENT, PETERSON AGREES WITH THEM): This is a specific jurisdiction case. J. McIntyre UK purposely availed itself to the U.S. market as a whole without targeting or avoiding particular states, and should be subject to personal jurisdiction in any forum state market where injury from their product is felt.

B. Contracts (Burger King)i. Prior negotiations

ii. Expected future relationshipiii. Contract termsiv. Actual course of dealings

BURGER KING CORP. V. RUDEZEWICZFACTS: D (MI) entered a franchise contract w/ BK (headquarters in FL), who sued in FL. D purposely contracted with a FL company, sent payments to FL, and the 20-year contract had a choice of FL law clause. D negotiated primarily with MI regional office but was aware that it was an intermediary to the FL headquarters.HOLDING: D need not ever physically enter the forum state. In contracts cases, relevant minimum contacts are: prior negotiations, contemplated future dealings, terms of the contract, parties’ actual course of dealings.

C. Libel (Keeton, Calder)


KEETON V. HUSTLER MAGAZINE, INC.HOLDING: Huster did publish in NH and, even if that is its only contact with the state, is subject to personal jurisdiction there. Plaintiff doesn’t need minimum contacts with a forum state.

CALDER V. JONESFACTS: Allegedly libelous story about the CA activities of a CA resident whose career was centered in CA. The harm was primarily felt by P in CA. HOLDING: Personal jurisdiction upheld over a nationwide publication in CA because the story was focused in CA and the brunt of the harm was felt there.

D. Internet (Revell)

REVELL V. LIDOVFACTS: P (TX) sued Columbia University (NY) and D (MA) in TX for defamation in an article posted by D on Columbia’s website.HOLDING: Internet cases should employ the Zippo sliding scale test to determine minimum contacts. If a website is passive (allows only its owner to post information, who is outside the forum), it is not enough for personal jurisdiction in the forum state. If it is interactive (site owners engage in repeated online contacts with forum residents over the internet), personal jurisdiction may be proper.

3. Fairnessi. Burden on defendant

ii. Plaintiff’s interestiii. State interestiv. Judicial efficiencyv. Social policy

WORLD-WIDE VOLKSWAGEN V. WOODSONHOLDING: Fairness is determined by balancing the burden on the defendant with the plaintiff’s interest in convenient and effective relief, the forum state’s interest in adjudicating the suit, the judicial system’s interest in efficiency, and substantive social policy.

ASAHI METAL INDUSTRY V. SUPERIOR COURT OF CALIFORNIAFACTS: Zurcher injured by a motorcycle and sued the Taiwanese manufacturer of the tire tube, who joined as a third party Asahi (the Japanese manufacturer of the tube’s valve). HOLDING: (8 justices) Severe burden on the Japanese defendant. No interest for Taiwanese plaintiff to litigate indemnification in CA. CA has little interest because no party is a resident and the suit is not primarily about safety standards. The international judicial system should be considered. Unfair.

KULKONOTE: Example of social policy. We don’t want to allow personal jurisdiction to affect how divorced parents and their children act in a negative way.


SUBJECT MATTER JURISDICTIONThe court’s power to render a binding judgment over a type of case

SMJ cannot be waived at any timePresumption against federal SMJ so the party asserting it must prove that it exists

I. State Courts & General Subject Matter Jurisdictiona. State courts only lack have subject matter jurisdiction over areas Congress has designated

to the federal courts1. Some admirality proceedings2. Bankruptcy matters3. Patent and copyright infringement claims4. Antitrust securities laws

b. Federal courts can hear cases involving violations of federally protected rights and cases of federal question jurisdiction, but not exclusively – state courts can hear these too

II. Federal Courts & Limited Subject Matter JurisdictionCommon law exceptions (will not hear): Anything to do with probate, domestic relationsa. Diversity of Citizenship

Purpose: Prevent prejudice against out-of-state citizens1. Citizenship of parties (determined when the complaint is filed)

i. IndividualsA. State citizenship = domicile (residence + intent to stay)

i. You have to have actually taken up residence in a new state to change your domicile

B. An alien with permanent residence in the U.S. is a citizen of the state in which he his domiciled

C. For representatives of decedents, minors, and incompetents, use the citizenship of the represented party

D. No diversity jurisdiction even today for U.S. citizens domiciled in another country

MAS V. PERRYFACTS: Jean Mas was a citizen of France and Judy Mas was from MS, had worked in LA, moved to IL, and had an intention to move back to LA. Perry was a citizen of LA. Perry appealed for lack of diversity.HOLDING: Citizenship is determined by domicile (residence + intent to stay).

ii. Corporations, § 1332(c)(1)A. Dual citizenship of states of any state where it is incorporated

and the state where it has its principle place of businessB. Principle place of business is the “nerve center”

i. The place where a corporation’s officers direct, control, and coordinate the corporation’s activities

ii. Normally the place where the corporate headquarters is, provided that this is the actual center of direction, control, and coordination

RANDAZZO V. EAGLE-PICHER INDUSTRIES, INC.HOLDING: A corporation is a citizen of any state by which it has been incorporated and of the state where it has its principle place of business. The corporation’s “registered office” is not enough for PPoB. Adequately pleading jurisdictional requirements is not mere formalism but a constitutional matter of federal power.


THE HERTZ CORPORATION V. FRIENDFACTS: Plaintiffs are citizens of CA. Defendant, Hertz, claimed that its principle place of business was in NJ, not CA. Hertz operated facilities in 44 states. Its corporate headquarters was in NJ and that the core executive and administrative functions are carried out in NJ and to a lesser extent in OK. The lower court found Hertz a citizen of CA (using a rule that if the amount of activity is significantly larger or substantially predominates in one state, then that state is the PPoB, and if there is no such state, then the place where the majority of its executive and administrative functions are performed is the PPoB). HOLDING: A corporation’s principle place of business is the “nerve center,” where a corporation’s officers direct, control, and coordinate the corporation’s activities.

iii. Non-Incorporated AssociationA. Partnerships, LLCs, labor unions, associations, etc. are

considered citizens of all states of which its members are citizens

BELLEVILLE CATERING CO. V. CHAMPAIGN MARKET PLACE LLCFACTS: Plaintiff is incorporated in IL and has its principle place of business in MS, and the 500 individual plaintiffs are MS citizens. Complaint alleged that defendant is a DE LLC with its principle place of business in IL. HOLDING: An LLC is not treated like a corporation; it is a citizen of every state of which its members are citizens.

2. Complete diversity (Strawbridge v. Curtiss)i. Diversity jurisdiction exists only if all plaintiffs are of diverse

citizenship from all defendants3. Amount in controversy

i. Must exceed $75,000ii. Use the amount in the complaint unless D can show to a legal

certainty that P cannot recover that muchiii. If P recovers less than $75,000 it does not affect subject matter

jurisdiction, but P may be required to pay D’s costsiv. Aggregation: Can P add together separate claims to reach $75,000?

A. P v. D with multiple, unrelated claims – YesB. P1 & P2 v. D or P v. D1 & D2 – NoC. Ps or Ds have joint interest in something (property) – Yes

4. Why diversity jurisdiction goes to federal court?i. Hometown bias

ii. Judges (how they are selected, how qualified they are, identity of judge, ideology or biases)

iii. Law (procedural law varies)iv. Juries (selection process and composition)v. How long it will take to get a jury trial

b. Federal Question JurisdictionPurpose: Expertise, uniformity, and independence of federal courts on federal law§ 1331: Original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States

1. Constitutioni. Osbourne: Federal law is an ingredient in the case

2. Statutory requirementsi. Well-pleaded complaint rule


A. If the complaint set forth only a short and plain statement of the plaintiff’s claim for relief, does it raise a federal issue?

Louisville & Nashville Railroad Co. v. MottleyFacts: RR gave Mottley lifetime passes for the railroad before a federal statute forbade railroads from giving out such passes. The RR refused to honor Mottley’s passes and they sued for breach of contract. Federal law was only an issue because Mottley anticipated that it would be the RR’s defense.Holding: Federal question jurisdiction is only allowed when the plaintiff’s statement of his own cause of action shows that it is based on federal law or the Constitution. Just because in the course of litigation it is likely that a federal question does arise does not make the suit arise under federal law.

ii. Declaratory Judgment ActA. Declaratory judgments can only be issued in federal courts if

there is an underlying coercive suit that would have had an independent basis of federal jurisdiction

B. Declaratory judgments are usually sought by the party who would have been the defendant in the coercive suit

C. Skelly Oil – The Declaratory Judgment Act is intended to give the defendant the power to bring a suit but not to expand federal question jurisdiction

iii. Centrality of federal issue to claimA. American Well Works Co.: The case arises under the law that

creates the cause of action

AMERICAN WELL WORKS CO. V. LAYNE & BOWLER CO.FACTS: Plaintiff manufactured a pump and sued the defendant under state trade libel law, because the defendant had wrongfully accused the plaintiff of infringing on its patent on the pump.HOLDING: No federal question jurisdiction. The case arises under state law – even though it would focus on the federal issue of patents. The case arises under the law that creates the cause of action.

B. Exceptions:i. Shoshone Mining: If federal law creates the claim but

the only substantive law at issue is state law/local custom (federal law gives you the right to sue but state law governs the merits of the case)

ii. Grable: If the claim arises under state law but the substantive law at issue is federal law:

1. Claim necessarily raises a federal law issue2. That is actually disputed (not already decided

& is actually contested)3. Substantial (not an insignificant part of the

claim)4. Won’t disturb the balance of authority

between state and federal court

GRABLE & SONS METAL PRODUCTS, INC. V. DARUE ENGINEERING & MANUFACTURINGFACTS: IRS seized Grable’s real property and sold it to Darue. Grable brought a quiet title action in state court that Darue’s title was invalid because the IRS failed to notify Grable of its seizure of the property exactly as statute required.ANALYSIS: Grable’s title action arose under state law but was based on the failure of the IRS to give adequate notice under a federal statute. The meaning of the federal statute is actually disputed because it is yet undecided. It is substantial because it is the only legal or factual issue in the case. Federal jurisdiction will not affect federal-state division of labor.


3. No amount in controversy requirementc. Removal Jurisdiction

1. Allows a defendant to have the opportunity to get a case into federal court, so long as the case has an independent basis for federal jurisdiction [1441(a)]

2. Only defendants can removei. If P sues D in state court on a non-removable claim, and then D files

a counterclaim against P that meets federal subject matter jurisdiction requirements, P cannot remove

3. D can only remove:i. If the case could have been originally brought in federal court

ii. Within 30 days of service of process on DA. A later-joined D has 30 days from being served with process in

which to get the original D to join her notice of removali. Contrary to Noble – this is now majority rule

iii. Directly to the federal court of the jurisdiction of the state court in which it started

iv. If all Ds agree to remove the case4. Removability is determined at the time the removal notice is filed

i. But – diversity must exist both when the complaint is filed and when the removal notice is filed, to prevent D from acquiring a new domicile after the commencement of the suit and then removing it on basis of diversity

5. In-State Defendant Rule [1441(b)]i. An in-state defendant can’t remove a claim that would be based on

diversity because there is no hometown biasA. NJ sues CA on a state claim in CA state court. CA cannot

remove.B. NJ sues CA on a state claim in NJ state court. CA can remove.

ii. An in-state defendant can remove a claim based on federal question jurisdictionA. NJ sues CA on a federal claim in CA state court. CA can

remove.6. If after removal P seeks to join additional Ds whose joinder would destroy

SMJ, the court may deny joinder or permit joinder and remand the action to state court

NOBLE V. BRADFORD MARINE, INC.FACTS: In B’s facilities, P’s boat caught fire and spread to N and M’s boats. N and M sued B, and added P as a defendant. P tried to remove to federal court.HOLDING: Adding a new defendant does not start the time for removal over if the original complaint was removable. Since the original defendant (B) did not remove during the 30 day period after service of process, the subsequently added defendant (P) cannot remove after this time period either.NOTE: NO LONGER MAJORITY RULE


VENUEWhere within a court system a case can be brought;

for the convenience of the parties and the convenience of the courts

I. Basic Venuea. Common Law Rules

1. Local action – If it affects real property (usually ownership or damage), needs to be filed in the place where the land was located

2. Transitory action – can typically be brought in places other than where they arose; state and federal statutes prescribe venue

b. Statutory Rules [1391]1. [1391(a)-(b)] Venue exists where:

i. A judicial district where any defendant resides, if all defendants reside in the same state

ii. A judicial district in which a substantial part of the events giving rise to the claim occurred, or a substantial part of the property that is the subject of the action is situated

iii. IF THERE IS NO DISTRICT IN WHICH THE ACTION MAY OTHERWISE BE BROUGHT, a judicial district in which any defendant is subject to personal jurisdiction

2. [1391(c)] A corporation defendant resides in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced

i. When a state has multiple districts, D resides in any district in which its contacts would be sufficient to subject it to personal jurisdiction

ii. If no such district exists, D resides in the district in which it has the most significant contacts

3. [1391(d)] An alien may be sued in any district

BATES V. C & S ADJUSTERS, INC.FACTS: P incurred a debt while a resident of PA, and then moved to NY. The creditor, with a principal place of business in PA, referred the account to D, a local debt collector in PA with no business in NY. D mailed collection notice to P’s PA address and it was forwarded to his NY address, where he received it.HOLDING: There is venue where a substantial part of the events giving rise to the claim occurred. P sues D under a debt statute that is intended to stop the harmful effect of abusive debt collection practices. Receipt of the collection notice is a substantial part of the events giving rise to this claim, so there is proper venue.

II. Change of Venuea. Intra-system transfer (within a system)

1. [1404] Transferor court is a proper venuei. [1404(a)] For the convenience of parties and witnesses, in the

interest of justice, a district court may transfer any civil action to any other district where it might have been brought.

ii. Discretionary – may move for (1) convenience of parties, (2) convenience of witnesses, and (3) interest of justice

iii. Every 1404 transfer asks where there would have been personal jurisdiction and where there would have been proper venueA. Hoffman: “Where it might have been brought” means where

personal jurisdiction and venue are proper, not where there is no personal jurisdiction and venue but the defendant has waived them


2. [1406] Transferor court is an improper venuei. [1406(a)] [A district court in which venue is improper] shall

dismiss, or if it is in the interest of justice, transfer such case to any district in which it could have been brought.

3. Choice of lawi. Diversity cases – Federal court uses state substantive law

ii. Choice of law is determined by the choice of law rules of the forum iii. Transfer between forums – Which choice of law rules do you use?

A. Van Dusen: If personal jurisdiction and venue are proper in the transferor state, use transferor choice of law rules in the transferee state

i. Ferens v. John Deere: This is true even when the plaintiff moves to transfer and PJ/V were proper in the transferor forum (use transferor choice of law rules)

B. Goldlawr: If personal jurisdiction/venue are improper in the transferor state, transfer to forum where personal jurisdiction/venue are proper and use transferee choice of law rules

C. Stewart: Choice of forum clause is important but not dispositiveb. Inter-system transfer (between systems): Forum non conveniens

Used in federal courts only where the alternative forum is in a foreign countryGilbert test: A plaintiff’s choice of forum should rarely be disturbed, except…

1. When an alternative forum has jurisdiction to hear the case and2. When trial in the chosen forum would be oppressive to D at the expense of P’s

convenience or when the chosen forum is inappropriate because of inconvenience to the court

i. Private factors (inconvenience of the litigants)A. Relative ease of access to sources of evidence

Keep in mind evidence of damages, tooB. Availability of witnessesC. Possibility of view of premises, if appropriateD. All other practical problems that make trial of a case easy,

expeditious, and inexpensiveii. Public factors (inconvenience of the forum)

A. Administrative difficulties of court congestionB. Local interest in having localized controversies decided at homeC. Interest in having the trial of a diversity case in a forum that is

at home with the law that must govern the actionD. Avoidance of unnecessary problems in conflict laws or in the

application of foreign lawE. Unfairness of burdening citizens in an unrelated forum with

jury duty

PIPER AIRCRAFT CO. V. REYNOFACTS: Reyno (administratrix of decedents) sues Piper and Hartzell in CA state court over plane crash in Scotland. Case removed [1441] to CA federal court. Piper moved for a 1404 transfer to PA. Hartzell moved for a 1406 transfer. Case was transferred to PA. Both Piper and Hartzell then moved to dismiss for forum non conveniens based on the Gilbert test.NOTE: Because Piper’s transfer from CA to PA was a 1404 transfer, CA choice of law rules apply (PA substantive law). Because Hartzell’s transfer from CA to PA was a 1406 transfer, PA choice of law rules apply (Scottish substantive law).HOLDING: Gilbert test.


HOW TO CHALLENGE JURISDICTION

XI. Challenging Personal Jurisdictiona. General approaches

1. Special appearance: Allows a defendant to appear in a forum for the sole purpose of contesting personal jurisdiction. D can only raise this question and submits to the court’s determination.

2. 12(b)(2) Motion: Defendant is allowed to raise several defenses simultaneously with an objection to personal jurisdiction.

b. Collateral and direct attacks on personal jurisdiction1. Direct attack: D challenges personal jurisdiction in Case 1

i. Submit to this court’s decisionii. May challenge the decision on appeal of Case 1

2. Collateral attack: D defaults in Case 1 and waits for the judgment in Court 1; when P seeks to enforce the judgment in Court 2 (different jurisdiction), D challenges Court 1’s personal jurisdiction over him

i. Cannot litigate on the meritsii. If you lose Case 2, you are bound by the judgment of Case 1

BALDWIN V. IOWA STATE TRAVELING MEN’S ASSOCIATIONFACTS: P sued D in MO state court. Case was removed to MO federal court. D moved to dismiss for lack of personal jurisdiction; motion was overruled and a judgment for P was ultimately entered. P sought to enforce the judgment in IA, and D there moved for dismissal for the MO court’s lack of personal jurisdiction.HOLDING: A party can challenge personal jurisdiction either on a direct attack or a collateral attack, but not both. Challenging on a direct attack amounts to res judicata.

XII. Challenging Subject Matter Jurisdictiona. D may move to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1)b. A defendant who litigates the issue of subject matter jurisdiction and loses cannot

challenge it again in a separate action1. You can fail to raise SMJ while litigating the merits of the case and raise it on

appealc. SMJ cannot be raised in a collateral suit

1. Narrow exception: Case 1 was litigated in state court but is a claim over which federal court has exclusive jurisdiction under a statute, when P seeks to enforce the judgment of Case 1 in federal court Case 2, D may collaterally attack

XIII. Remember: Rule 12(g) & 12 (h)a. If you file any Rule 12 motion you must join any other Rule 12 motion at that time, with

the only exceptions of1. 12(b)(6) – Failure to state a claim2. 12(b)(1) – Lack of subject matter jurisdiction3. 12(b)(7) – Failure to join an indispensible party


JOINDER OF CLAIMS AND PARTIES, AND SUPPLEMENTAL JURISDICTIONAdding any claim or party is “joinder,” even if it is on the original pleading

Ask: (1) Is there a joinder rule that permits this claim, and (2) Is there SMJ over this claim?

XIV. Joinder Rulesa. Claim Joinder by Plaintiffs

1. Claim joinder: Add one claim to another claim. Under Rule 18, a party can join as many claims as it has against an opposing party, but doesn’t have to

2. Rule 18 is not compulsory but res judicata law makes joinder of transactionally related claims mandatory, or you lose them

3. Rule 17:(a) An action must be prosecuted in the name of the real party in interest(b) A person must have the capacity (ability) to be sued

4. Rule 18: A party asserting a claim, counterclaim, crossclaim, or third-party claim may join, as independent or alternative claims, as many claims as it has against an opposing party

b. Permissive Party Joinder by Plaintiffs1. Rule 20:

i. Parties may be joined as plaintiffs ifA. They assert any right to relief jointly, severally, or in the

alternative arising out of the same transaction, occurrence, or series of transactions or occurrences and

B. Any question of law or fact common to all plaintiffs will arise in the action

ii. Parties may be joined as defendants ifA. Any right to relief is asserted against them jointly, severally, or

in the alternative arising out of the same transaction, occurrence, or series of transactions or occurrences and

B. Any question of law or fact common to all defendants will arise in the action

2. U.S.C. § 1367c. Counterclaims and Crossclaims: Rule 13

1. Rule 13(a): Compulsory Counterclaimi. A pleading must state as a counterclaim any claim that, at the time

of its service, the pleader has against an opposing party if the claimA. Arises out of the transaction or occurrence that is the subject

matter of the opposing party’s claim andB. Does not require adding another party over whom the court

cannot acquire jurisdictionii. Requires D to assert all claims he has against P that arise out of the

same transaction or occurrence2. Rule 13(b): Permissive Counterclaim

i. A pleading may state as a counterclaim against an opposing party any claim that is not compulsory

ii. Allows D to assert any claims he has against P, that do not arise out of the same transaction or occurrence, if D can

3. Rule 13(g): Crossclaim Against Copartyi. A pleading may state as a crossclaim any claim by one party against

a coparty if the claim arises out of the same transaction of occurrence that is the subject matter of the original action or of a counterclaim

ii. The crossclaim may include a claim that the coparty is or may be action against the crossclaimant

CIVIL PROCEDURE OUTLINE FALL 2011

DP

D

PD

P

same transaction

A B

A B

C

A B

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iii. Crossclaims are not compulsoryd. Third-Party Claims

1. Whenever a D (can be the D to a counterclaim) passes on liability by either:i. Contribution among joint tortfeasors (common liability of two or

more actors for the same injury)2. Third-party claims are derivative If A is liable, someone else is liable to A3. Rule 14(a)(1): A defending party may join a non-party who is or may be liable

to it for all or part of the claim against it. [Third-party plaintiff must obtain the court’s leave if it files the third-party complaint more than 14 days after serving its original answer].

4. Rule 14(a)(2): The third-party defendanti. Must assert any defense against the third-party plaintiff’s claim

under Rule 12ii. Must assert any counterclaim against the third party plaintiff under

Rule 13(a) and may assert any counterclaim against the third-party plaintiff under Rule 13(b) or any crossclaim against another third-party defendant under Rule 13(g)

iii. May assert against P any defense that the third-party plaintiff has to P’s claim

iv. May assert against P any claim arising out of the transaction or occurrence that is the subject matter of P’s claim

XV. Compulsory Joinder of Parties: Rule 19a. Do we want to join the party? Yes, if…

1. In that person’s absence, the court cannot accord complete relief among existing parties, or

2. That person claims an interest relating to the subject of the action, and litigating the case in that person’s absence may

i. Impair that person’s ability to protect the interestii. Leave an existing party subject to a substantial risk of incurring

double, multiple, or otherwise inconsistent obligations because of the interest

b. Can we join the party?1. Personal jurisdiction2. Subject matter jurisdiction3. Venue

c. If we can’t join the party, do we need to dismiss the case?1. Whether in equity and good conscience the action should proceed among the

existing parties or should be dismissed2. Consider

i. Whether the judgment rendered in the person’s absence might prejudice that person or an existing party

ii. The extent to which any prejudice could be lessened/avoided byA. Protective provisions in the judgmentB. Shaping the reliefC. Other measures

iii. Whether a judgment rendered in the person’s absence would be adequate

iv. Whether the plaintiff would have an adequate remedy if the action were dismissed for nonjoinder

HAAS V. JEFFERSON NATIONAL BANKFACTS: Haas (OH) sued Bank (FL), directing Bank to issue to Hass stock. Haas had an agreement with Glueck (OH) that they would purchase stock together and each have one-half ownership. Glueck went


A B

C

A B

C

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to the bank to request that half of the stock be in Haas’ name, but withdrew the request to use the stock as collateral for a loan when Bank informed him that he owed it under a promissory note.ANALYSIS: Glueck should be joined if feasible because Glueck has an interest in the case (ownership of the stock) and litigating the case without him would leave the Bank open to possible inconsistent litigation over the ownership of the stock. Glueck could not be added without destroying diversity, the federal court’s reason for subject matter jurisdiction. The case should be dismissed if Glueck cannot be joined as a party because proceeding is prejudicial to Glueck and the Bank, the court cannot shape the relief to avoid prejudice (must determine title of the stock), a judgment in Glueck’s absence would be inadequate, and Haas can file the claim in state court if this case is dismissed.

TEMPLE V. SYNTHES CORP.FACTS: Temple (MS) had a device manufactured by Synthes (PA) implanted in his spine in a hospital and by a doctor in LA. Temple sued Synthes in LA federal court under diversity jurisdiction. Synthes sued the doctor and hospital in LA state court. Synthes moved to dismiss Temple’s case for failure to join necessary parties.HOLDING: It is not necessary to join all joint tortfeasors as defendants in a single lawsuit. The threshold of 19(a) has not been satisfied.

XVI. Supplemental Jurisdictiona. Is the claim “so related to claims in the action within such original jurisdiction that they

form part of the same case or controversy under Article III of the U.S. Constitution?”1. Is there an independent basis of subject matter jurisdiction over the anchor

claim?i. Diversity

ii. Federal Question2. Is the claim at issue part of the same “case or controversy” as the anchor

claim?i. Gibbs: Claims are part of the same “case” when they arise out of a

common nucleus of operative factii. Arises out of the same transaction or occurrence

3. If so, there is supplemental jurisdiction unless it is excluded by (b) or (c)b. The claim is mandatorily excluded from supplemental jurisdiction if:

1. Original jurisdiction over the main (anchor) claim is founded solely on § 1332 (diversity jurisdiction),and

2. It is a claim made byi. Plaintiffs against persons made parties under Rule 14, 19, 20, or 24

orii. Persons proposed to be joined as plaintiffs under Rule 19 or 24

and3. Supplemental jurisdiction would be inconsistent with jurisdictional

requirements of § 1332i. Intended to codify Kroger: The claim is inconsistent with

jurisdictional requirements of § 1332 if it is essentially the same as an original claim that would violate complete diversity. A claim isn’t inconsistent with § 1332 if it is made by a defending party.

c. The claim may also be excluded in the discretion of the District Court if[Codifies part of Gibbs]

1. It raises novel issues of state law2. State claim substantially predominates over the federal jurisdiction claim3. District court has dismissed all federal jurisdiction claims4. Exceptional circumstances where there are compelling reasons for declining

jurisdiction


UNITED MINE WORKERS V. GIBBSFACTS: Gibbs sued UMW under a federal statute in TN federal court. Gibbs joined a state law claim. ISSUE: Was there supplemental jurisdiction over the state law claim?HOLDING: Claims arise under the same constitutional “case” if they derive from a common nucleus of operative fact. State claims arising under the same “case” as the federal claim that provides jurisdiction for the anchor claim should not be heard if: if the federal law claims are dismissed before trial or if the state issues substantially predominate.

SCHWARTZ V. SWANFACTS: Plaintiff sued D1 for a car accident. P’s husband sued D1. P’s passenger sued D1. Plaintiff sued D2 for a car accident a week later. P’s husband sued D2. These were all joined by the plaintiffs in one case. The court ordered severance of the cases by accident.HOLDING: The trial court erred in severing the cases because (1) it had not yet been determined if the plaintiff’s injuries could be attributed correctly to each defendant and (2) leaving the cases joined is not too difficult for a jury to understand.

DINDO V. WHITNEYFACTS: Whitney sued Dindo for a car accident that occurred while Dindo was driving Whitney’s car. Can Dindo assert a counterclaim after the settlement that Whitney had caused the accident (that he didn’t know he could assert earlier)?HOLDING: Yes, because the case was settled out of court, so allowing Dindo to bring the action does not violate the purpose of 13(a) [purpose = avoid multiplicity of actions for a single lawsuit].

CARTERET SAVINGS & LOAN ASSN. V. JACKSONFACTS: Jackson was sued by loan association in FL federal court and defaulted. Loan association sought to enforce the judgment in MA federal court and was granted summary judgment. Jackson then appeals, with claims against the loan association. Can Jackson assert claims that would have been compulsory counterclaims under 13(a) in the MA case?HOLDING: No, these claims are barred by 13(a) because the case was resolved in FL when the Jackson’s defaulted. Allowing them to assert them now would violate the purpose of 13(a).NOTE: Inconsistent with Dindo because in both cases, the first case was not really litigated in court and did not use court resources.

OWEN EQUIPMENT & ERECTION CO. V. KROGERISSUE: Is Kroger’s claim against the third-party defendant, Owen, allowed when there is no independent basis for SMJ over that claim?

ANALYSIS: Kroger’s claim against Owen arises under the same case (“nucleus of operative fact”), so it is allowed under Gibbs. However, the claim violates the complete diversity required by U.S.C. § 1332 because Kroger would not have originally been able to sue OPPD and Owen, because Owen and Kroger are both citizens of IA. Kroger’s claim is an independent claim, not a dependent claim. Kroger’s claim is also not made by a defending party.


Kroger (IA) OPPD (NE)

Owen (IA)

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