a) The federal court shall have supplemental jurisdiction over any claims that are so related to the original that they form part of the same case "common nucleus of operative facts" Gibbs

b) In a diversity case the court does not have jurisdiction over claims made by people joined by P under 14, 19, 20 or 24 or over claims by people proposing to be Ps under 19 or 24 if this would break diversity

c) The court may decline supplemental if (1) claim raises a complex issue of state law (2) state claim substantially predominates (3) the district court dismisses federal claims (4) any other compelling reason

d)S/l is tolled while claim is pending and for 30 days after dismissed unless state has longer time

Facts: NY assignee of Michigan mortgage note sues defendant in Michigan in Federal Court claiming jurisdiction.  Court decides that SMJ is premised on original note holder. 

Rule: Domicile for 1332 is created by original note holder, diversity jurisdiction cannot be created and it must follow the statutory requirements.  Congress can give less but not more power then allowed by Article III. 

For a federal court to have power it must be a matter enumerated under: 1) The Constitution, and; 2) Statute passed by Congress.  

a.       Mas was a domiciliary of MI since she only moved to LA for school and lacked intent to remain in LA.  Until a person acquires a new domicile, they remain a domiciliary of their previous domicile

b.       Even though they recovered less than the amount the statute require, they had a good faith claim of the required amount.  You can’t revoke federal SM jdxn because they recover less than required amount.

c.        Claim was permitted because it was made in good faith, and the claim was made at the start of the case, and the fact that a recovery is less than the amount necessary is fulfill diversity jurisdiction, is immaterial.

1. Resident- living in a state (“a physical presence”)

2. To establish a domicile you must: 1) intend to stay where you move; 2) and be a U.S. Citizen.

      a)       You keep your domicile until you move and intend to stay where you move

      b)       Student is a citizen of the state they were in b4

3. Citizen- citizen of US + domicile of state

1. 1 Plaintiff can aggregate claims against 1 Defendant to reach amount; cannot join claims of multiple Plaintiffs to reach total.

2. Does not allow stacking of Ps to get required amount in controversy, each Plaintiff meet $75K requirement.  Exxon v. Alapattah exception, if Plaintiffs are added per FRCP 20 only one party needs to meet $75K requirement in class action. (Exxon held that Section 1367 does overrule Zahn and that so long as one of the plaintiffs in a suit satisfies the amount-in-controversy requirement, federal district courts may exercise supplemental jurisdiction to hear the claims of other plaintiffs that do not independently satisfy the requirement. Parties must still have required diversity)

• Under the Class Action Fairness Act of 2005, a class action can usually be brought in a federal court when there is just minimal diversity, such that any plaintiff is a citizen of a different state from any defendant. Class actions that do not meet the requirement of the Class Action Fairness Act must have complete diversity between class representatives (those named in the lawsuit) and the defendants.

FEDERAL RULES OF CIVIL PROCEDURE

RULE 4 - Summons

Describes service of process on persons and corporations

e. service upon individuals in US  may be effected 1. pursuant to law of the state which the district is in or 2.  by delivering a copy to the person or leaving a copy at their dwelling w/ some person of suitable age or discretion or by delivering a copy to an authorized agent

k.  1. Service of summons is effective to get jurisdiction over Δ a. who could be subjected to general jurisdiction in that state where district court located or b. who is a party under rule 19 or 20 or 100 miles of the place the summons is issued c. who is subject to federal Interpleader d. when authorized by statute  2.  If exercise of jurisdiction is consistent w/ constitution to establish personal jurisdiction if they are not subject to general jurisdiction 

FEDERAL RULES OF CIVIL PROCEDURE

RULE 12(b)(1), (2), (3), (4), (5), (6), (7)

(1) - Lack of SMJ

(2) - Lack of PJ

(3) - Improper venue

(4) - Insufficient process

(5) - Insufficient service of process

(6) - Failure to state a claim

(7) - Failure to join an indispensable party under FRCP 19

FEDERAL RULES OF CIVIL PROCEDURE

RULE 14 - Impleader

A) defendant [third party plaintiff]  may bring in third party who is may be liable to the third party plaintiff of for all or part of a claim  [this is for defendant bringing a derivative indemnity or contribution claim]. 

-the defendant may also serve any claim against the plaintiffs that arising out of the transaction or occurrence that is the subject matter of the plaintiff’s claim. 

-the plaintiff may assert any claim against the third party defendant arising out of the transaction or occurrence that is the subject manner of the plaintiffs claim against the third party plaintiff 

FEDERAL RULES OF CIVIL PROCEDURE

RULE 18 - Joinder of Claims and Remedies

FEDERAL RULES OF CIVIL PROCEDURE

RULE 20 - Permissive Joinder 

A. Parties may join as ps if they assert relief jointly or arising out of same transaction or occurrence or same questions of law or fact, Δs may join if claim is asserted against them j/s or arising out of same transaction or occurrence or same questions of law or fact

B. The court may make order to prevent party from being embarrassed, delayed etc and prevent prejudice

FEDERAL RULES OF CIVIL PROCEDURE

RULE 55 - Default; Default Judgment

Judgment may be entered against a party for failure to plead.  

(If a judgment is entered in one state it may be honored in another state so long as adequate PJ exists, and judgment will be enforced under the Ful Faith and Credit Clause under Art. IV, Sec. of the Constitution)

FEDERAL RULES OF CIVIL PROCEDURE

RULE 56 - Summary Judgment

FEDERAL RULES OF CIVIL PROCEDURE

RULE 15 - Amended and Supplemental Pleadings

FEDERAL RULES OF CIVIL PROCEDURE

RULE 23 - Class Action

a)      One or more can sue as reps of a class if

1)      There are so many joinder is impracticable

2)      ?s of law and fact are common to the class

3)      The claims of named parties are typical of class

4)      The reps adequately protect the interests of the class

b)      An action is a class action if you have (a) and

1)      Separate actions would a. Give inconsistent results or b. Impede or impair other claims

2)      The Δ has refused to act on behalf of the class

                  3) ?s of law and fact are similar enough, class action is best 

FEDERAL RULES OF CIVIL PROCEDURE

RULE 50 - JUDGMENT AS A MATTER OF LAW IN A JURY TRIAL; RELATED MOTION FOR A NEW TRIAL; CONDITIONAL RULING

a)      Judgment as a matter of law

1. If, after hearing a party, there is no legally sufficient basis for a reasonable jury to find for that party, the court may grant judgment as a matter of law with respect to any claim or defense

     2.Motion for judgment as a matter of law may be made at

        any time b4 submission to a jury

b) Renewing motion for judgment as a matter of law after trial- If court not grant motion at the close of evidence, movant may request a new trial 10 days after entry of judgment

a)      if the renewed motion is granted the court shall also rule on the motion for a new trial

FEDERAL RULES OF CIVIL PROCEDURE

RULE 59 - NEW TRIAL; ALTERING OR AMENDING A JUDGMENT

a.       a new trial may be granted for any reason for which new trials have been granted

b.      motion shall be filed no later than 10 days after entry of judgment

c.       when a motion for new trial based on affidavits opposing party has 10 days to file their affadavits

D.  no later than 10 days after entry the court may move for a new trial

FEDERAL QUESTION JURISDICTION

28 U.S.C. § 1331 - Pre-Judiciary Act of 1875

FEDERAL QUESTION JURISDICTION

28 U.S.C. § 1331 - Bank Incorporation Statute

FEDERAL QUESTION JURISDICTION

28 U.S.C. § 1331 - Constitutional Provision v. Statutory Provision

FEDERAL QUESTION JURISDICTION

28 U.S.C. § 1331 - Judiciary Act of 1875

Judiciary Act of 1875 is passed to address federal questions and arising under cases, to specifically address civil rights cases.

 i.  Article III Section 2 of the Constitution- Judicial power of the Fed government extends to “all cases, in Law and Equity, arising under the Constitution, the Laws of the U.S. … between citizens of different states…” Describes what the Federal Courts have judicial power over.

ii. 28 U.S.C. 1331 (enacted in 1875) mirrored the language of the constitutional grant of jurisdiction but was interpreted much more narrowly under the well pleaded complaint rule from Mottley.

FEDERAL QUESTION JURISDICTION

28 U.S.C. § 1331 - Louisville & Nashville RR v. Mottley

Facts: Mottley sue for failure to abide by settlement agreement for injuries sustained, in which they would be provided free fare. Mottleys file in federal court because RR will use federal law as a defense.

Issue: Does a federal court have federal question jurisdiction when the complaint does not arise out of federal law, but the defendant’s anticipated defense raises issues of federal law? No, jurisdiction is based on allegations in the complaint not the possible defenses. 

Rule: The test to determine if the case invokes subject matter jurisdiction under §1331 is the well-pleaded complaint rule based on allegations contained in the complaint.  (Unless there is pre-emption in law; ERISA, Labor Management Act, National Bank Act, Trademark/Patent law, Admiralty, etc.) 

FEDERAL QUESTION JURISDICTION

28 U.S.C. § 1367 - Supplemental Jurisdiction

GIBBS- Fed Court is allowed to take jdxn over a state claim if the fed and state claim both arise out of “common nucleus of operative fact.”

a.       Pendant jdxn (ability to hear federal claim and closely related state claim) is discretionary

b.       Should incl. Factors such as judicial economy, convenience, fairness

c.        Should be turned down if state issue predominates or is dismissed

d.       Remains an issue throughout the case

FEDERAL QUESTION JURISDICTION

28 U.S.C. § 1367 - Supplemental Jurisdiction [codified Gibbs]

a. [1367(a)] The federal court shall have supplemental jurisdiction over any claims that are so related to the original that they form part of the same case

b. [ 1367(b)] In a diversity case the court cannot have jurisdiction over claims made by people joined by P under 14, 19, 20 or 24 or over claims by people proposing to be Ps under 19 or 24 if this would break diversity [leaves out Ps adding under 14 and 20-Gaping Hole]

c. [1367(c)] The court may decline supplemental if (1) claim raises a complex issue of state law (2) state claim substantially predominates (3) the district court dismisses federal claims (4) any other compelling reason

d. [1367(d)] S/L is tolled while claim is pending and for 30 days after dismissed unless state has longer time

e. Codifies Gibbs so it allows Pendant Jdxn [state + fed claim] and Ancillary Jdxn{claim is state and counterclaim is fed]; There must be a substantial Federal claim, it cannot be frivolous, i.e. injury by comic book superhero

FEDERAL QUESTION JURISDICTION

28 U.S.C. § 1367 - Supplemental Jurisdiction

Owen Equipment & Erection Co v. Kroger

FEDERAL QUESTION JURISDICTION

28 U.S.C. § 1367 - Supplemental Jurisdiction and §1331

Grable & Sons Metal Prod. Inc. v. Darue En’g and Manu. 2005(§1331)

Facts: IRS sold property of Grable to satisfy tax lien.  Grable claimed that notice was insufficient becasue IRS tax code required personal service and IRS sent notice by certified mail.  Therefore they claimed sale to Darue was void for failure of process.  Grable files quiet title action based on state court claim five years later.

Rule: Federal jurisdiction is proper if there is: 1) A substantial federal interest, and 2) Allowing jurisdiction will not create large flow of potential litigation.

This contrasts with Merrell Dow where federal law was only being interepted in one claim out of five, and case involved state tort claim, which beign permitted to be heard would create large shift of cases to be potentially heard in federal courts and upset balance between federal and state courts.  

1. Any action that has original jdxn in fed ct, can be removed to fed ct in the same place

2. Case cannot be removed from state court if the diversity action is brought in the same place as D’s domicile. i.e. Paul, a citizen of Florida, sues Danielle, a citizen of New Jersey, on a personal injury claim in New Jersey state court, seeking $100,000 in damages.

3.       You can remove if you have a fed ? joined with other non-removable claims

4.    You can remove if fed jdxn was proper in the 1^st place (i.e. patent or tax claim)

REMOVAL OF ACTIONS - 28 U.S.C. § 1446

Removal Procedure

a. Notice of removal must occur w/in 30 days after D gets the receipt of initial pleading ‘through service or otherwise’

b. If original claim was not removable and an amended claim becomes removable, then notice of removal may be filed 30 days after receipt of amended pleading ‘through service or otherwise

- After case is removed the State Court "shall proceed no further..."

REMOVAL OF ACTIONS - 28 U.S.C. § 1447

Process After Removal Generally 

REMOVAL OF ACTIONS - 28 U.S.C. § 1447

Process After Removal Generally - Murphy Bros v. Michetti Pipestringing, Inc.

The issue in Murphy Brothers arose because the language of Section 1446(b) provides that removal must occur within thirty days of the defendant receiving a copy of the initial complaint “through service or otherwise.” The plaintiff had provided the defendant with a “courtesycopy” of the complaint prior to formal service of the complaint and summons.

 Rule: A named defendant’s time to remove is triggered by simultaneous service of the summons and complaint, or receipt of the complaint, through service or otherwise, after and apart from service of the summons, but not by mere receipt of the complaint, unattended by any formal service. 

REMOVAL OF ACTIONS - 

28 U.S. Code § 1445 - Nonremovable actions

FEDERAL RULES OF CIVIL PROCEDURE

RULE 20 - Permissive Joinder 

KEDRA v. CITY OF PHILADELPHIA (Allegations of police brutality over the course of 1.5 years, with different parties) 

Court allowed joinder of different policemen during different incidents when one family alleged a systematic harassment by the PD because the systematic nature = same transaction or occurrence

1. Though there might be prejudice against Δs since all would be in 1 trial and maybe some were not involved in all occurrences the court can make protective orders under R20b.

FEDERAL RULES OF CIVIL PROCEDURE

RULE 20 - Permissive Joinder 

INSOLIA v. PHILLIP MORRIS (three plaintiffs with different backgrounds suing cigarette manufacturer)

Court did not allow joinder for 3 ps alleging industry-wide conspiracy b/t tobacco companies because there were so many variables à no same transaction or occurrence

Kedra is better example than Insolia because the Δs are logically connected- the PD is targeting one family - efficiency.  Insolia would be too confusing for the jury

The key is the amount of facts and the potential for prejudice

EERIE DOCTRINE 

In General

- Applies to federal diversity cases

- Applies if there is a direct or indirect conflict of laws

- **A federal court sitting in diversity must apply state sustentative law but federal procedural law.**

EERIE DOCTRINE

ERIE RR v. THOMPKINS (Resolved issues between local and general common law)  

a. Overturned Swift v. Tyson which held that federal c/l applied in federal court

b. Determined that state law should be used for substantive issues [includes state c/l] and federal law should be used for procedural issues. Concurrence opinion.

c. There is no federal c/l for substantive issues- it is unconstitutional to impose what it thinks is c/l on the states

d. **There is no federal common law only federal general law, because federal law does not cover the complete gamete of legal issues.**

e. Policy

       1.       Discourage forum-shopping

        a)       Note- it only prevents vertical shopping parties are still free to choose b/t states

       2.       Uniform Application of Law

EERIE DOCTRINE

General Policy

In federal diversity cases:

1.       If a procedural issue is covered by a FRCP and a directly conflicting state law- FRCP controls.  This is the rule from Hanna and it holds as long as the FRCP is both Constitutional and it comports w/ the 1934 Rules Enabling Act by not enlarging, abridging or modifying a substantive right [no FRCP has failed this test]

2.       If a procedural issue is not covered by FRCP and only by judge-made law, and a contrary state law exists, then use the Byrd balancing test (alters an essential characteristic of the federal courts).  Guaranty Trust weighs the federal and state interest and the extent to which the rules are outcome determinative.  The court must also consider the twin aims of Erie (1) whether applying federal judge-made law would encourage forum shopping and (2) whether it would result in inequitable administration of laws

EERIE DOCTRINE

GUARANTY v. YORK- (Federal common law v. State Statute of Limitations) 

a. Under the Erie doctrine, is the s/l a procedural or sustentative issue of law?  Erie applies to cases of equity as well because of FRCP 2 because there is only one form of civil action which incorporates civil and equitable actions concurrently.  “There is one form of action – the civil action.” FRCP 2.

b. Where a state statute would bar recovery in a state court, but the federal law would not, hence it would substantially affect the outcome, the state law must be used; Federal courts with diversity jurisdiction must apply the state’s statute of limitations or other procedural rules if they have a significant effect on the outcome of the case. “Outcome Determinative Test” – We will apply state law if the case it significantly affects the outcome of the case.  If the outcome is different apply state law.

c. Broad holding- a rule is substantive if it is outcome determinative

EERIE DOCTRINE

BYRD-[SC]- Judge and Jury Division of Labor (Plaintiff v. Defendant for state common law of negligence; affirmative defenses of exhausting worker’s compensation benefits prior to filing suit, state common law)

Federal Courts Will NOT Imitate State Court If It Alters an Essential Characteristic

a.       Federal common law (Jury decides 7^th Amendment) v. State common law (Judge decides). Federal common law should prevail because a Federal Court can only go so far in imitating a state law.

b.       Federal court should not use state law if it would undermine a large federal policy, state law should not alter the rules about the fact-finding roles of the judge and jury

c.        Balancing test

  1.       Look at the purpose of the federal law or policy [federal interest]

  2.       Look at the purpose of the conflicting state law [state interest]

  3.       Determine the extent to which applying the federal as opposed to the state law would affect the outcome of the case

EERIE DOCTRINE

HANNA- p sued for wrongful death in federal court and served the wife.  But state law requires that you serve executor, and p didn’t do that w/in enough time- S/L had run, Δ argues MA law bars the suit

a. Court must use FRCP for service even if it would be outcome determinative

b. The two rules conflict if they could not be used in conjunction

c. Situation where there is a federal rule right on point and a contrary state rule

d. The federal rule must be applied unless it would abridge, enlarge or modify a substantive right. See Rules Enabling Act. 

EERIE DOCTRINE

BURLINGTON- [SC]- AL law requires a 10% penalty if you lose a PI claim on appeal AND FRCP 38 does not mandate a penalty.

a. Court held the rule was inapplicable because it conflicted w/ FR of App Pro 38 which does not mandate a penalty

b. The argument is that there is no conflict but court rejects- there is a conflict AL requires a penalty and FR says no penalty 

EERIE DOCTRINE

WALKER v. ARMCO STEEL-[SC]-p filed b4 S/L and served

after.  State law says that suit starts w/ service and suit would be

barred.  p argues R3 controls in federal court. 

a. Rule 3 does not replace a state S/L- because state S/L is substantive interest

b.       FRCP are assumed to be valid but if there is a state interest and it substantially affects the outcome of the action then use state law

EERIE DOCTRINE

GASPERINI-[SC]- p sent slides to Δ who lost them.  p sued and was awarded $1500/slide.  Δ appealed and said that NY allows a judge to overturn verdict if it deviates materially from what would be reasonable compensation

a.       State law controlling excessive jury awards should be used

b.       Rules should be read w/ sensitivity to state interests

EERIE DOCTRINE

RAGAN v MERCHANTS TRANSFER (Indirect Conflict case) [SC]-in PI case state SOL had run because she filed b4 but served after, but using FRCP 3 the S/L would not have run because action commenced by filing

a.       Court used state law- if recovery could not be had in state court then no recovery in federal court

b.      After Ragan courts held that FRCP were subject to Erie test

EERIE DOCTRINE

INDIRECT v. DIRECT CONFLICT CASES

Indirect conflict cases use Erie, Byrd, Guaranty Trust, Walker

and Ragan cases.  In direct conflict cases use Hanna and federal

rule.  (Think about federal (common law and FRCP) v. state

law (c/l and state statute). 

Bars litigation of claims arising out of same transaction and occurrence in a subsequent action after a final judgment on the claims)(Often called the “rule against claims splitting”

3 requirements for claim preclusion

1.      Final judgment on the merits

2.      Attempting to litigate same claim from previous action in another action or attempting to litigate claims that should have been brought in previous action (Manego uses transactional analysis, considers when same legal claims arise from same facts.)

3.      Same parties in fist action as second, or in privity

Claim Preclusion- Res Judicata

Same Transaction Test - Manego

1. A 2^nd suit alleging anti-trust violation, after an initial suit alleging conspiracy is barred by res judicata because they arise out of the same transaction or occurrence

2. Since these events were part of the same transaction, res judicata bars any claims that have been adjudicated and those that could have been brought in the 1^st action

Claim Preclusion- Res Judicata

Same Transaction Test - Landrigan v. City of Warwick

Claim Preclusion- Res Judicata

Same Claim Test - Moitie

Facts: p sued in class action and case was dismissed.  5 appealed and it was reversed.  The other 2 brought a new claim collaterally in a state claim.  Δs removed and moved to dismiss for res judicata.  Court of appeals reversed saying the claim was not barred due to public policy. SC overturned and dismissed case.

Rule: Res judicata bars relitigation of a final adjudication on the merits and is not affected by the fact that the judgment may have been wrong or rested on a legal principle subsequently overruled in another case.

Claim Preclusion- Res Judicata

On the Merits - Rinehart v. Locke

Facts: p filed suit and was dismissed for failure to state a claim w/o prejudice.  He made a new complaint and Δ moved to dismiss for res judicata.

R41b states that except for certain listed exceptions (lack of jurisdiction, improper venue or failure to join party under FRCP 19), all dismissals are on the merits unless the court dismisses w/o prejudice

Rule: Unless otherwise provided, a court order dismissing a complaint for failure to state a claim is an adjudication on the merits, which bars any subsequent litigation on the issue.

Claim Preclusion- Res Judicata

On the Merits - MARRESE V. AMERICAN ACADEMY OF ORTHOPAEDIC SURGEONS

Facts: p brought a case in state court and it was adjudicated.  He then brought an anti-trust suit in federal court, which could not have been brought in state court.

1. A state court judgment’s preclusive effect on a federal case is governed by state law in the state of the case

2. The preclusive effect of a judgment is governed by full, faith and credit for cases from state court case judgments to federal court

3. Rule: In determining the preclusive effect of a state court judgment on subsequent federal litigation, a federal court must look to the law of the state to determine whether the judgment would preclude relitigation in state courts. 

Issue Preclusion - Collateral Estoppel

In General

Bars relitigation of issues in a subsequent action if they have already been litigated in a previous action even if the identical issues come from different transactions and occurrence

Elements

a. Final judgment on the merits;

b. Same issue was actually litigated and determined in previous case;

c. The litigation of the issue must have been actually necessary to the courts judgment

Issue Preclusion Exceptions: 1) Dismissal for failure to state a claim pursuant to FRCP 12(b)(6); 2) Dismissal w/o prejudice; 3) Claim that is under exclusive jurisdiction of court but partially litigated in state court; 4) A claim that was withdrawn.

Issue Preclusion - Collateral Estoppel

Little v. Blue Goose

Facts: BG sued for negligence and won.  Later he sued for personal injuries from the same accident alleging gross negligence of BG.

Rules: A previous court decision constitutes collateral estoppel to a subsequent action involving the same parties, issues and transaction

Application: Since the first suit settled the issue of BG being negligence then the 2^nd suit is barred by collateral estoppel

Issue Preclusion - Collateral Estoppel

Halpern v. Schwartz (Surplus Exception)

Facts: A bankruptcy judge denied H a discharge based on intent to defraud having been found earlier, although intent was only one of 3 possible bases for the earlier decision.

Rule: 1.      When a prior judgment rests on 1 of 3 possible grounds it is not conclusive to discharge issues if less than all grounds are involved

2.      Even if an issue was fully litigated in the prior proceeding, preclusive effect will not be given if the resolution of that issue was not necessary for the judgment

3.      Since the bankruptcy referee could have held the plaintiff bankrupt with or without a finding of intent, the issue will of the intent can still be litigated   

Claim Preclusion/Res Judicata and Issue Preclusion/Collateral Estoppel

Taylor v. Sturgell (Classes in Privity)

Claim Preclusion - Collateral Estoppel

Taylor v. Sturgell

Facts:  Taylor sued the FAA for release of plane plans to finish remodel of aircraft, folowed by his neighbor.  The neighbor lost and was represented by the same attorney.  Sturgell alleged claim preclusion.

Rule: A claim cannot be precluded if the previous litigant is a different party and there is no privity between the current and past litigants.

“Virtual representation” is a theory that states that a litigant may be subject to claim preclusion if they bring a claim that was litigated in a previous suit and (1) their interests were adequately represented by the previous litigant and (2) a close relationship between the old party and the new party, participation by the present party in the current case, or “tactical maneuvering” by the present party in order to avoid preclusion in the first case.  

Claim Preclusion - Collateral Estoppel

Mutuality

Claim Preclusion - Collateral Estoppel

Types of estoppel (“shield and sword”)

1. offensive use (“sword”) -  new p wants to use collateral estoppel against a Δ who lost the first case

a)      P wins and Δ loses, then P2 sues Δ and pleads collateral estoppel to use the issue in their suit

b)      Rarely permitted

2.      defensive use (“shield”) -  new party is a Δ seeking to stop P from establishing a fact he couldn’t prove in the 1^st trial

 a)      P v. Δ1 and P loses, then P sues Δ2 pleads collateral estoppel to stop P from re-litigating issue

Claim Preclusion - Collateral Estoppel

Parklane Hoisery

Facts: ps brought a class action suit against Parklane.  B4 that action was brought the SEC sued them and won on essentially the same issues.  ps tried to use the result of the previous action.  Courts find that Parklane could not have joined suit and should not be subject to claim preclusion. Parklane should be allowed to use SEC verdict to aid in their case.

Rule: Offensive estoppel is allowed if there is no policy reason against it. (Generally offensive collateral estoppel will not be allowed where a plaintiff could have joined and the application would be unfair to the defendant, or When the plaintiff in a later suit could easily have joined in an earlier action, or when the application of offensive estoppel would be unfair to a defendant, the doctrine of offensive collateral estoppel does not apply.)

PERSONAL JURISDICTION

WHAT ARE THE TWO REQUIREMENTS UNDER THE DUE PROCESS CLAUSE?

FAIRNESS: 1.       Traditional notions of fairness “fairness requirement” a)       14^th Amendment – NO person shall be deprived of the rights of due process

NOTICE: 1.       Must have adequate notice “notice requirement” a)       Has reasonable notice been provided to the defendant 

PERSONAL JURISDICTION

WHAT ARE THE JURISDICTIONAL LIMITS ON FEDERAL COURTS?

PERSONAL JURISDICTION

ARE THERE EXCEPTIONS TO THE GENERAL RULE ABOUT PERSONAL JURISDICTION EXISTING ONLY WHERE IT WOULD EXIST FOR A STATE COURT THAT DEMONSTRATE CONGRESS HAS THE POWER TO EXPAND PERSONAL JURISDICTION BEYOND A STATE’S AUTHORITY? 

PERSONAL JURISDICTION

General Jurisdiction v. Specific Jurisdiction

General Jurisdiction - A court’s authority to hear all claims against a defendant, at the place of the defendant’s domicile or the place of service, without any showing that a connection exists between the claims and the forum state.  (A corporation could be sued in any state it is incorporated or its principle place of business, and could be sued in either place for all claims against it because of its strong connection to those places in which it is “present”.)

Specific Jurisdiction - Jurisdiction that stems from the defendant’s having certain minimum contacts with the plaintiff and forum state so that the court may hear a case involving issues arising from those facts.

PERSONAL JURISDICTION

3 Types of Personal Jurisdiction

a. In personam- when forum has power over person, court adjudicates damages or monetary damages.

b. In rem- court has the power to adjudicate the rights of every1 in world w/ respect to a particular piece of property

     1. e.g. forfeiture of property used in illegal activity

c. Quasi in rem- attachment of property to satisfy a monetary judgment.

     1.       e.g. sue for property cos can’t get $ recovery

PERSONAL JURISDICTION

STATE LONG ARM STATUTE

These statutes allows states to exercise personal jurisdiction over a party based on their interaction with the state.

Long arm statutes must still be fair, provide proper notice and take into account whether venue is proper.

PERSONAL JURISDICTION

Pennoyer

Facts:  Mitchell sued Neff for legal work he performed but for which he was not paid. Neff was not a resident of the state and was not personally served. Hence Neff did not appear and default judgment was entered against him. After the judgment, Neff purchased a tract of land. Mitchell had the sheriff seize the land to be sold to satisfy the judgment. Neff (plaintiff) brought this suit against Pennoyer (defendant), who had purchased the land at the sale.

Rule: Physical presence or consent is required for due process. W/o notice default judgments could be entered with ease.  Also personal jurisdiction is created at the time of injury/accident not after the fact.

Service by publication in an in rem case involving real property may be permitted because owner would be concerned as to his rights involving that property.

PERSONAL JURISDICTION

Harris v. Balk

Facts: Harris (N.C.) owed Balk (N.C.) $180. Balk owed Epstein (MD) over $300. Harris goes to Maryland and Epstein serves him with a writ of attachment to seize the money owed to Balk. Harris does not challenge attachment by Epstein and pays Epstein’s attorney. Balk was given notice of the attachment but never appeared. Balk then later sues Harris for $180 in NC court. Harris says debt was repaid but to Epstein, and suit was barred. TC rules in favor of Balk because MD did not have jurisdiction of debt owed to Balk. NC Supreme Court affirms.

Rule: A state court may exercise jurisdiction over a debt that was incurred in another state, if the non-resident debtor is personally served while in the state. Also the debt travels with the debtor therefore where the defendant travels so does jurisdiction of the debt.

PERSONAL JURISDICTION

Three Traditionally Ways to Establish Jurisdiction

1. Physical presence (Burnham, father on vacation in CA and wife had him served)

2. D is domiciled in state

3. Consent: Express, implied (Hess, statute allowing for service to third-party for vehicular causes of action permitted) or by voluntary appearance

PERSONAL JURISDICTION

Establishing Jurisdiction Through General or Specific Jurisdiction

a. Specific- the cause of action arises out of contacts with the state?

   1.       Look to International Shoe Co v. Washington. (minimum contacts)

b. General- the cause of action does not arise out of the contacts with the state [but there are contacts]

   1.       Need to prove systematic and continuous activity

Modern Standards- Fairness, suit cannot “offend traditional notions of fair play and substantial justice”- must satisfy two prong test of minimum contacts and reasonableness

PERSONAL JURISDICTION

Int'l Shoe v. Washington

Facts: Washington wanted Int'l to pay into state unemployment fund and Int'l claimed it had no employees, though they had representatives in the state that sold shoes all orders were processed in St. Louis.

Rule: For a defendant not present within the territory of a forum to be subjected to a judgment in personam, due process requires that he have certain minimum contacts with the forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. a)       “Systematic and continuous contact” will satisfy due process but isolated or casual connection to the state will not justify due process.

Court looked at three elements: 1) Volume of business transactions, 2) Continuity of transaction and 3) Connectedness of transactions with state.

PERSONAL JURISDICTION

Hanson v. Denckla and McGee v. Int'l Life Insurance Co. - Purposeful Availment 

World Wide Volkswagen (WWV)

Calder v. Jones

In Hanson the trustee of a decedent's estate could not be sued in a state where relatives moved becasue he did not direct any contact toward the state as opposed to Int'l Life who contracted with a party in California by sending a renewal notice to the state.

Similarly WWV or Seaman could not be sued in Oklahoma for products liability when the vehicle sold in New York had an accident in Oklahoma.  Placing product in commerce does not create personal jurisdiction, exercise of jurisdiction must be foreseeable.

Calder v. Jones, a Florida newspaper editor who published defamatory articles which were expected to be directed toward California resident could exercise personal jurisdiction.

PERSONAL JURISDICTION

SHAFFER V. HEITNER

Facts: The Delaware sequestration statute allowed property within the state to be seized to allow the Delaware court to obtain personal jurisdiction over the owner. Shaffer et al. made a special appearance to challenge the court’s jurisdiction on the grounds that the statute was unconstitutional. Shaffer also asserted that there were insufficient contacts to confer jurisdiction. The District Court found that the statute was valid, and did not address the minimum contacts argument due to the finding that the legal presence of the stock in Delaware conferred quasi-in rem jurisdiction.

Rule: The exercise of quasi in rem jurisdiction is subject to the minimum contacts test established in Int'l Shoe.

PERSONAL JURISDICTION

Burger King

Personal Jurisdiction

Nicastro v. J. McIntyre Machinery  

Facts: P was injured while using sewing machine manufactured in England.

Rule: Merely putting product into stream of commerce is not enough to force a foreign company into American Court , overrules the stream of commerce theory relied upon in Asahi Metal Industry Co. v. Superior Court.

PERSONAL JURISDICTION

OUTLINE OF CASES

A.      Physical presence – PENNOYER

B.      Consent – Pennoyer (Conditional Presence)

C.      Defendant’s Property in the State

      ----- A claim for property = In rem

      ------ using property to satisfy a personal claim (quasi in rem)

D.      Minimal contacts – International Shoe

    1)      Substantial Connection – International Shoe

    2)      Purposeful Availment – Hanson

            a) Mere foreseeability is not enough – Nicastro

            b) Action must be targeted – WW Volkswagen

VENUE - 28 U.S.C. §1391 (Decides where the case will be heard geographically)

Where May the Case Be Heard?

A case founded on diversity can be brought in any (Go through the provisions chronologically)

  1)       Judicial district where any defendant resides, if all defendants reside in the same state (§1391(b)(1))

  2)       District in which a substantial part of the events occurs (§1391(b)(2))

  3)       District where any defendant is subject to personal jurisdiction (§1391(b)(3))

  4)       Location of the property in dispute (in rem)

**Only use (b)(3) if you cannot obtain venue under (b)(1) or (b)(2)

A civil action not founded on diversity [federal question case] may be brought 

1)       In any district where any defendant resides, if all defendants reside in the same state

2)       In any district to wear a substantial part of the claim occurred

3)       Judicial district in which any defendant may be found

VENUE - 28 U.S.C. §1404(a) Change of Venue

(Discretionary judge made doctrine)

(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 or division where it might have been brought or to any district or division to which all parties have consented.

This is from a correct venue to another correct venue, therefore you apply the choice of law law of the original state of filing.

VENUE - 28 U.S.C. §1406(a) Cure of Waiver or Defects

(Transfer from an incorrect forum to a correct forum)

(a) The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.

(Choice of law law of prior wrong venue will not be used and the new venue will determine the choice of law law. Prevents forum shopping by intentionally having suits filed in improper venues and then transferring to another venue.)      

VENUE - 28 U.S.C. §1391 

Venue and Removal under §1441(a) 

VENUE - 28 U.S.C. §1391

BATES V. C & S ADJUSTERS, INC.

Discussion of whether a suit under the FDCPA should have been dismissed when the collection letter was forwarded to another state, in which suit was brought.  Trial Court dismissed for erroneous venue. Case was reversed and remanded.

Rule: Venue is allowed where a collection notice is sent, even if not addressed there, because that is where a “substantial part of the events …giving rise to the cause of action which occurred.”

VENUE - 28 U.S.C. §1404(a) and 1406

PIPER AIRCRAFT V. REYNO

Facts: Plane crash in Scotland involving Scots, PA plane manufacturer and propeller manufacturer in Ohio. Ps file in US, first in CA becasue of more favorable laws.  Case moved to PA.  TC dismissed because case should be filed in Scotland even w/less favorable laws.  Appeals Ct. overruled and said less favorable laws barred dismissal. SC dismisses case because less favorable law does not provide grounds for forum non convenience.

Rule: A plaintiff may not defeat a motion to dismiss on grounds of forum non conveniens merely by showing that the substantive law that would be applied in the alternative forum is less favorable to the plaintiffs than that of the present forum.

The only time where a difference in remedies justifies denial of dismissal for non-convenience is when the foreign forum provides no remedy at all.

VENUE - 28 U.S.C. §1404(a) and 1406

PIPER AIRCRAFT V. REYNO

Private Interest Factors and Public Interest Factors

Private interest factors for determining forum non-convenience:

a)       Relative ease of access to proof;

b)       Availability of compulsory discovery, witnesses appearing, etc.

c)       Premises relevant to action;

d)       Practical considerations for making trial of a case easy

Public interest factors for determining forum non-convenience:

a)       Administrative difficulties from court congestion;

b)       Local interests in having controversies decided at home;

c)       Diversity case in a forum that is at home;

d)       Avoidance of unnecessary problems in the conflicts of laws or in the application of foreign; and

e)       Unfairness of the burdening citizens in an unrelated forum with jury duty.

VENUE - 28 U.S.C. §1404(a) and 1406

Dismissal for Forum Non Convienence

When the plaintiffs are foreign, dismissal based on forum non-convenience is easier.

All the petitioners for dismissal pursuant to dismissal for foreign non-convenience must show that it is “burdensome” but they do not prove that it would be “unfair.”

Courts may differ on the tests used to determine the proper venue, i.e. “governmental interest” test v. “significant contacts” test.