Civil Procedure Outline: Fall 2009

Table of ContentsI. Procedure..............................................................................................................................................................................................2

b. Personal Jurisdiction.........................................................................................................................................................................2

c. Subject Matter Jurisdiction...............................................................................................................................................................2

II. Personal Jurisdiction.............................................................................................................................................................................2

d. Specific Jurisdiction:..........................................................................................................................................................................2

iii. Minimum Contacts Test................................................................................................................................................................3

4. Purposeful Availment Test...........................................................................................................................................................3

e. General Jurisdiction..........................................................................................................................................................................3

f. Consent to jurisdiction......................................................................................................................................................................4

i. Notice............................................................................................................................................................................................... 4

j. Long arm statute:..............................................................................................................................................................................4

III. Venue................................................................................................................................................................................................5

d. USC 1391 - Diversity..........................................................................................................................................................................5

ii. Federal question venue- section 1391(b) Venue is proper only in the judicial district where:..........................................................5

iii. Corporations- section 1391 (c)..........................................................................................................................................................5

IV. Subject Matter Jurisdiction..............................................................................................................................................................5

d. 28 USC 1331 – Federal Question.......................................................................................................................................................6

iii. Rule 4(K)(2) - Well Pleaded Complaint Rule.......................................................................................................................6

e. 28 USC 1332 - Diversity.....................................................................................................................................................................6

2. Amount in controversy: In addition, the case must involve an "amount in controversy" in excess of 75k..................................6

f. Article 3, MINIMAL DIVERSITY is enough..........................................................................................................................................6

g. Diversity for Aliens –.....................................................................................................................................................................6

V. 28 USC 1367 - Supplemental Jurisdiction..............................................................................................................................................6

VI. 28 USC 1441 - Removal.....................................................................................................................................................................7

i. 1447(c) supplemental and non supplemental claims all move together when removed..................................................................8

VII. Erie Doctrine.....................................................................................................................................................................................8

f. The substance/ procedural distinction:.............................................................................................................................................8

i. The Erie doctrine essentially provides that federal courts must apply state substantive rules of law except when deciding a federal question and federal procedural law.............................................................................................................................................8

h. Rules Enabling Act - §2071................................................................................................................................................................9

2. When a federal rule conflicts with a state rule:............................................................................................................................9

VIII. Pleadings...........................................................................................................................................................................................9

b. Rule 8 – Complaints..........................................................................................................................................................................9

d. Rule 7a: types of pleadings...............................................................................................................................................................9

g. Bell Atlantic Corp. v. Twombly........................................................................................................................................................10

h. Iqball...............................................................................................................................................................................................10

k. Rubric of burden of proof...............................................................................................................................................................11

1 | P a g e

vi. Rule 8 c - affirmative defenses....................................................................................................................................................11

vii. Rule 11:.......................................................................................................................................................................................12

1. important for several reasons.........................................................................................................................................................12

l. Responding to the complaint. Rule 12............................................................................................................................................13

m. Rule 15: amending pleadings......................................................................................................................................................14

IX. Former Adjudication.......................................................................................................................................................................14

b. Claim Preclusion............................................................................................................................................................................. 15

1. Same claim................................................................................................................................................................................. 16

2. The ability to bring the claim in suit 1.........................................................................................................................................16

3. Same parties...............................................................................................................................................................................16

4. Final judgment in suit 1 – haven’t talked about yet....................................................................................................................16

c. Issue Preclusion.............................................................................................................................................................................. 16

1. Same issue (claim/fact................................................................................................................................................................16

2. Actually litigated and determined..............................................................................................................................................16

3. Final judgment............................................................................................................................................................................16

4. Necessary to judgment...............................................................................................................................................................16

5. Same parties? If not, is it one of the exceptions?.......................................................................................................................16

vii. Difference between offensive and defensive use of issue preclusion:...................................................................................17

I. Procedurea. Federal courts have limited jurisdiction…article 3 says what kinds of cases can be filed in federal courts. Diversity

jurisdiction = controversy between citizens of different states.b. Personal Jurisdiction

i. What states can a Δ be forced to show up and defend themselves inii. Court have authority to enter judgment in relation to this particular Δ

c. Subject Matter Jurisdictioni. The issue is the power of the court to hear this kind of case.

ii. When you’re in federal court…the outer boundaries of subject matter jurisdiction are set by article 3 of the constitution

II. Personal Jurisdictiona. Definition:

i. What state(s) can a Δ be forced to show up and defend themselves in? b. Constitutional Basis:

i. If the courts don’t have personal jurisdiction over that person, they would violate the due process clause of the 14th amendment

c. Historically:i. In Personam: states have power over people within their state (non residents must be personally served with

process while within the state)ii. In Rem: state has power over a person’s property present in the state. Allows for service of process by

publication in a newspaperiii. Quasi in rem: allowing property to be attached to satisfy a claim unrelated to the claim – up to the value of

the property. Must be attached at the beginning of the lawsuit1. (Pennoyer): established personal jurisdiction if person had property within the state2. Property = a contact. property does not establish jurisdiction because it is seized3. Shaffer says: no more quasi in rem jurisdiction4. If you’re proceeding against property only, that is pure in rem, not quasi in rem jurisdiction

2 | P a g e

d. Specific Jurisdiction:i. Not whether Δ can be sued about anything in the state but whether the Δ can be sued about this specific

case. May be specific jurisdiction in more than one state… specific jurisdiction is always a case by case analysis. Must look at the contacts with the state…isolated contacts are not enough, but the word isolated is a value judgment. what you’re suing/subject has to relate to the state

ii. 1 contact can be plenty…driving thru the state and hit a pedestrian, that 1 contact would be enough if the lawsuit directly comes out of it. Δ doesn’t have to be physically present in the forum state. acts outside the jurisdiction as long as they have an effect w/in the jurisdiction may be enough

iii. Minimum Contacts Test1. From IN Shoe – (Shaffer expands min contacts to in rem juris & gets rid of quasi in rem) 2. Does the suit offend traditional notions of fair play and substantial justice? 3. Minimum Contacts

a. PJ: if the Δ have such minimum contacts with the state ANDb. If it would be fair to require the person to defend the lawsuit in that state

4. Purposeful Availment Test a. – from Hanson v. Denckla (trust created in Delaware while widow living in Pennsylvania.

Beneficiaries are suing for jurisdiction after widow dies. Florida cannot have jurisdiction because the trust company did not purposefully avail itself of the privilege of conducting activities in Florida. TEST: Did the Δ purposefully avail itself of the privilege of conducting activities in the state

iv. Contact Cases re: PJ1. McGee v. International Life Insurance Co. – one contact can be sufficient, Texas Company accepted

payment for life insurance policy from California resident, subjecting the company to California jurisdiction. Accepting the payment is a substantial contact.

2. Hanson v. Denckla – not sufficient contacts with a state. They mailed checks from the Delaware trust to Florida when the trustee moved. The trust company did not purposefully avail itself of the privilege of conducting business in the state.

3. Burger King v. Rudzewicz – minimum contact established when Michigan residents signed a franchise contract with a Florida corporation.

v. Stream of Commerce Cases re: PJ1. Worldwide Volkswagen v. Woodson – company sold car in New York that exploded in Oklahoma.

Company did not purposefully avail themselves of Oklahoma, they cannot know where their products will end up through the stream of commerce, does not subject them to jurisdiction everywhere. Did the Δ target his activities with respect to the forum state that makes it fair to bring the suit?

2. Asahi Metal Industry v. Superior Court – Tire blowout causes an accident. Asahi, Taiwanese manufacturer of tire valve assembly, is not subject to California jurisdiction by selling a product on an international scale, they did not purposefully avail themselves of California. This would also offend our notions of fair play and traditional justice. Even if they had minimum contacts…it would still be unfair. Brennan was trying to sell his stream of commerce theory here, too.

vi. Internet & Personal Jurisdiction1. Pavlovich v. Superior Court – Texas resident posted a trade secret on the internet. California does

not have jurisdiction over the Texas resident for violating a California company’s copyright.e. General Jurisdiction

i. Always jurisdiction in the state of domicile for individuals and in the states of incorporation and principal place of business for corporations. Anything to do with what you’re doing?

ii. Substantial Minimum Contacts1. Domicile2. Continuous and Systematic Activity in the Forum

a. Perkins v. Benguet Consolidated Mining Company – Phillipines company doing business in Ohio, the owner moved there and conducted all business from Ohio. General jurisdiction because the owner continuously and systematically did business in the state. (Not specific jurisdiction because the claim doesn’t have to do with the contacts the business made in the state).

3 | P a g e

b. Purchase is not continuous/systematic contacti. Helicopteros Nacionales de Colombia v. Hall – no general jurisdiction, nor specific

jurisdiction. Texas citizens working in Peru, contract negotiated in Texas and pilots trained in the US is not enough to change that the contract said controversies would be litigated in Peru. No systematic and continuous contacts with Texas.

3. State of domicile4. Presence must be voluntary

a. Burnham v. Superior Court – Francie Burnham wanted a divorce from Dennis Burnham, they agreed to file for divorce citing irreconcilable differences in California. Dennis filed for divorce in New Jersey but never served his wife. Francie filed for divorce in California and served Dennis while he was in the state. He was served in the state, so it’s good according to Pennoyer. Good according to IN Shoe because it is fair, okay with our traditional notions of fair play and justice. “If you can be found in a state, then there is general jurisdiction over you”

f. Consent to jurisdiction i. General or specific jurisdiction over you because you gave implied/express consent.

ii. Implied Consent1. Δs can consent by default (not claiming that there is no jurisdiction) or by responding to complaint.2. Acting in a way that contradicts Δ’s claim of no jurisdiction

iii. Express Consent1. Forum Selection Clauses:

a. Carnival Cruise Lines v. Shute - i. Court upholds forum selection clause on cruise ticket

ii. 2 questions iii. is the contract enforceable? iv. is the forum reasonable

g. Presence (voluntary):i. Burnham v. Superior Court – Π in California for reasons other than the claim. Court says jurisdiction over him

but disagree why1. Brennan: minimum contacts test, Π is voluntary there and was served while in the state = general

jurisdiction2. Scalia: Don’t need minimum contacts, enough that he was served while in the state. (because of

Pennoyer)3. Stevens: easy case…

h. How do you challenge PJ? 3 waysi. File rule 12b2 – if you file any rule 12 motion then you must combine all rule 12 defenses with it per 12g or h.

ii. You can raise it by putting it in your answer.iii. Collateral Attack - Wait until Π gets a default judgment against you…and then claim no PJ (but that’s the only

defense you can claim). i. Notice

i. In addition to PJ… must give noticeii. Mullane Requirement and RULES Requirement

iii. Mullane v. Central Hanover Bank - Is it practicable under the circumstances? Court says in Mullane that you know where these people are…you must do something to get the complaint to these people that you know where they are but publication may be OK for the Δs that you don’t know the location of.

iv. Steps to Notice1. Rule 4m: 120 days to serve2. Rule 4(d)

a. Δ may waive processb. May have to pay costs of process if they don’t waive when askedc. Get longer to respond (60 rather than 20 days)

j. Long arm statute:

4 | P a g e

i. once min. contacts are established, the state must still have legislation authorizing its courts to accept such jurisdiction (some have unlimited that allows all constitutional bases of juris.)

ii. Rule 4k1a – pretend you’re in state court even though you’re in federal court. If the state court could have exercised jurisdiction, then you can, too. So you must figure out the state long arm statute (usually that it is consistent with the constitution).

iii. Rule 4k1b – anomalyiv. Rule 4k1c – there may be broader jurisdiction than is allowed by 1av. Rule 4k2 is about disputes where no specific state may have jurisdiction, though they did something to affect

Americans.vi. Gibbons v. Brown - Gibbons, a Texas resident, was giving directions while Mr. Brown, a Florida resident, was

driving, Mrs. Brown was a passenger. Gibbons sues Mr. Brown in Florida. 2 years later, Mrs. Brown sues Ms. Gibbons in Florida because she gave bad directions. No jurisdiction over Gibbons in FL 2 years later. Florida’s long arm statue says she has to have substantial contact with the state, which it says she does not, though it would be OK constitutionally. FL law: your contact with the state must be substantial and not isolated activity, which it is not, in part because Gibbons’ lawsuit ended 2 years prior

III. Venuea. Locality where case may be tried…b. Venue rules attempt to allocate cases within a judicial system, federal or state, in a manner convenient for all. Qs of

personal and subject matter jurisdiction are decided before venuec. Curing defects. Jurisdictional defects may not be cured by the court's transfer of the case to a court having valid

personal jurisdiction, while venue defects can be cured by transfer to a court of proper venue. d. USC 1391 - Diversity

i. Diversity venue- section 1391(a). Venue is proper only in the judicial district where:1. Any Δ resides, provided that all Δs reside in the same state;2. Any substantial part of the events, omissions, or property concerning the controversy is situated; or3. The Δs are subject to personal jurisdiction at the time the lawsuit is commenced, if there is no

district in which the action may otherwise be brought. ii. Federal question venue- section 1391(b) Venue is proper only in the judicial district where:

1. Any Δ resides, provided that all Δs reside in the same state2. Any substantial part of the events, omissions, or property concerning the controversy is situated; or3. Any Δ may be found, if there is no judicial district in which the lawsuit could otherwise be brought.

iii. Corporations- section 1391 (c)1. For purposes of applying sections 1391 a and b, a corporation is deemed to reside in any judicial

district where it is subject to personal jurisdiction.2. If there is more than one judicial district in the state, then the corporation is deemed to reside in any

judicial district in that state within which its contacts would be sufficient to subject it to personal jurisdiction if that judicial district were treated as an independent state.

3. If no such judicial district exists, then the corporation shall be deemed to reside in the judicial district within which it has the most significant contacts.

iv. Dee-k Enterprises, Inc. v. Heveafil Sdn. Bhd. - Statute that governs …Clayton antitrust says that as long as it is not unconstitutional to sue someone in the US, then we’re not worried about which state. 1391(b)(3) applies

e. Forum Non Conveniensi. Piper Aircraft v. Reyno - Forums non conveniens is all about discretion. Piper makes a plane, it crashes in

Scotland. The pilot and 5 passengers all die, they are all from Scotland. Hartzell makes the propellers in Ohio. Reyno is the executor of the estates, she’s from California. She brings the case in state court. Hartzell and Piper move to dismiss and try to remove the case to federal court, they successfully get it there. Then they move to change venue…from California to Pennsylvania federal court. In Pennsylvania they ask for it to be dismissed because it is not convenient to be there. They argue Scotland is more convenient because physical evidence there and the system of justice is better for these Scottish citizens to seek justice in their courts

IV. Subject Matter Jurisdictiona. The issue is the power of the court to hear this kind of case. It’s possible to have SMJ in state, fed, or both.b. When in federal court…the outer boundaries of subject matter jurisdiction are set by article 3 of the constitutionc. Original jurisdiction, cases begin in the SC for these types of cases -- very few cases

i. Ambassadors

5 | P a g e

ii. Other public ministersiii. Those in which a state shall be a party

d. 28 USC 1331 – Federal Questioni. No amount in controversy requirement, it is concurrent jurisdiction.

ii. District courts shall have original jurisdiction of all civil actions arising under the constitution, laws, or treaties of the U.S.

iii. Rule 4(K)(2) - Well Pleaded Complaint Rule1. Π must state cause of action is based upon federal laws or the Constitution2. Louisville & Nashville Railroad v. Mottley – “A suggestion of one party that the other will or may set

up a claim under the Constitution of laws of the United States, does not make the suit one arising under that Constitution or laws.” A federal court cannot have jurisdiction just because a Δ may use the Constitution or a federal law to defend itself. In order to have jurisdiction under 1331, the case must arise under federal law. The case may involve federal law but DOES NOT ARISE UNDER FEDERAL LAW. The Mottleys sued in federal court anticipating the railroad would say they are just following federal law. The Mottleys failed to state that their cause of action is based upon those laws or that Constitution, because it is not.

a. Mottleys take their case to state court then eventually to SC again. How does the court interpret the statute narrower than the constitution? Article 2 is broader than 1331…the 1331 allows Mottley to be heard since it is a part of a well pleaded complaint, the Π ’s claim is based on federal law rather than the Δ’s law based on federal law

iv. The federal statute 1331 and constitution read the same, but end up meaning things…and congress has never said they meant something else. The court interprets the exact same language in 2 different contexts…

v. Federal question jurisdiction is not limited to federal courts, these questions can still be heard in state courts. If a state court hears that question, the SC can exercise appellate jurisdiction. In federal court, a dist level court can only hear the case if it the claim is part of a well pleaded complaint

1. When a state court has a FQ…then the federal courts can take up the question even if not part of a well pleaded complaint, so long as it starts in state court. It cannot allow federal courts to respond to FQs when not part of a well pleaded complaint because of 1331

e. 28 USC 1332 - Diversity i. Statute has 2 requirements

1. Diversity: The suit must involve Π s and Δs who are "citizens of different states" or citizens or subjects of a foreign state.

a. Diversity must exist at the commencement of the action. 2. Amount in controversy: the case must involve an "amount in controversy" in excess of 75k.

a. Hypo: Borrowed 40,000 two times and owe $80k, one Π can aggregate 2 separate claims to get to the amount in controversy minimum. But if Π1 is owed 40k and Π2 is owed 40k, the claims cannot be aggregated, even though in both cases, more than 75k is at issue

b. Makes sense, 2 Πs can’t combine separate claims to reach the 75k markf. Article 3, MINIMAL DIVERSITY is enough.

i. There is a least one party on the other side of the case with a different diversity. As long as one Π and one Δ with different citizenship that is enough. But Congress requires COMPLETE DIVERSITY.

ii. Redner v. Sanders - Π is a US citizen residing in France while the person Δ is a resident of NY and the corporate Δ has a principal place of business in NY. Dismissed for lack of SMJ. 28 U.S.C. §1332, “the district courts shall have original jurisdiction …and is between 1. Citizens of different States 2. Citizens of a state and citizens or subjects of a foreign state.” The Π is not a citizen of France and therefore cannot claim jurisdiction under that statute. The Π also claimed CA domicile, which would allow Π to sue under §1332(a)(1) RATHER THAN 1332(a)(2), but the Π has not sufficiently proven CA domicile

g. Diversity for Aliens – i. Federal courts do not have diversity jurisdiction over a lawsuit between foreign nations if neither has U.S.

immigrant status. Such suits must be brought in State court. If one of the parties has achieved permanent resident status, 28 U.S.C. 1332(a) gives the party the status of a citizen of the state in which she is domiciled.

ii. Saadeh v. Farouki - Saadeh, a Greek citizen brought suit on the loans invoking diversity jurisdiction, Farouki is a Jordanian citizen residing in Maryland with permanent resident immigration status. No SMJ. They are

6 | P a g e

essentially citizens of the same state, even though technically one is a non resident alien and one is an alien. The alienage provision was created to limit diversity jurisdiction, not expand it.

V. 28 USC 1367 - Supplemental Jurisdictiona. Any lawsuit for which the court has federal question or diversity jurisdiction, the court shall have supplemental

jurisdiction over all claims that are so related to the federal question or diversity claim that they derive from a "common nucleus of operative fact."

b. Codifies in section 1367 two common-law concepts: pendent jurisdiction and ancillary jurisdictioni. Pendant - can 2 claims be brought together? Allows a Π to join a state claim with a federal question claim in

her complaintii. Ancillary jurisdiction: A Π asserts a federal question or diversity claim in her complaint and another party, or

nonparty, asserts a claim over which the district court lacks original federal question or diversity jurisdictionc. 1367(a)

i. start out with constitutional test – article 3, make sure the additional person/claim arises out of a common nucleus of fact

d. 1367 (b)i. When 3rd parties are added to either side, the question is whether if the suit had begun that way originally

would there have been diversity jurisdiction? If no, then it’s not allowed in federal courtii. If the Δ is bringing the claim, we don’t analyze b.

iii. If the original claim is not based solely on diversity, then subsection b doesn’t apply at all.iv. 1367(b) says if 3rd party comes in, the Π cannot make a claim against them unless there is diversity & 75k

because we don’t want to get to a non diverse situation through the back door.e. 1367(c)

i. The claim raises a novel/complex issue of state lawii. Claim substantially predominates over federal claim

iii. District court has dismissed all federal claimsiv. In exceptional circumstances there are other compelling reasons to decline jurisdiction

f. EXCEPTIONS: subsection b where if the basis for being in federal court is ONLY diversity from 1332 then you do not have supplemental jurisdiction over some claims if adding additional parties (Rules 19, 20, 24)

g. In re Ameriquest Mortgage Co Mortgage Lending Practices Litigation – 3 counts, 2 & 3 aren’t FQ/Diversity but arise from same nucleus of facts. Since there is no diversity claim subsection (b) of 1367 does not apply. Since there is not a novel/complex issue of State law, then 1367 (c) does not apply. Also, the State claim does not predominate over the federal claim, the court states that ultimately the state claim should have been heard at the same time as the federal claim

h. Szendrey-Ramos v. First Bancorp - Federal claim brought under Title VII, and there are other claims brought against Puerto Rico by the Π . Court declined supplemental jurisdiction in this case, because the state law claims raise complex or novel issues, and the state-law claims substantially predominate over the federal claim

VI. 28 USC 1441 - Removala. 28 USC 1441 – Removal: Any complaint that could have been brought into state court can be removed to the federal

court in the same locationb. Removal is to the district in which the state action was filed. The lawsuit must be removed to the district court of the

district in which the state is located [1441(a)]c. The district court must have original jurisdiction/ The lawsuit must be within the district court's diversity or federal

jurisdiction. [1441(a)] d. In order to properly remove the case, there is an exception of 1441b (when jurisdiction based SOLELY ON DIVERISTY) if

ANY of the Δs reside in the state where the case was brought, then they may not remove the case. e. 1441 (c ), if parts are removable, the whole case moves over and the federal court sends back to state court what it

could not hear originally, but they must be separate and independent claimsf. Special Requirements

i. Removal in diversity cases: If the state action is within the federal court's diversity jurisdiction, all Δs must be noncitizens of the state. [1441(b)]

ii. Removal in federal question cases: If the lawsuit filed in state court arises under a federal statute or other federal law, removal is allowed only if such federal question appears in the Π 's complaint.

iii. Removal jurisdiction not derivative of state court jurisdiction: Formerly, removal jurisdiction was viewed as only "deriving" from proper state court jurisdiction. Since '86, Federal Court is permitted to retain an action

7 | P a g e

removed from state court even though the state court lacked jurisdiction over the claim. [U.S.C. 1441(e)] g. 1445: doesn’t allow removal of certain kinds of cases from state court to federal like: cases against railroads, common

carriers, workers comp, etc.h. 1446 is procedure for removal. If removable, must file within 30 days …the 30 days begins after service. One year

limitation on removal. If a case becomes removable during the first year, the right to remove countdown starts when the case becomes removable (complete diversity happens or a federal question is added). If the case becomes removable on the 364th day, then you only have 1 day to remove. A case can become removable later, by the time it becomes removable, you have 30 days to remove it. All removals in diversity cases must be removed during the first year

i. 1447(c) supplemental and non supplemental claims all move together when removedj. Caterpillar, Inc. v. Lewis - Lewis, a resident of Kentucky, sued Caterpillar a Delaware corporation with its principal place

of business in Illinois, and Whayne Supply Co. with its principal place of business in Kentucky, in a Kentucky state court. Caterpillar removed the case to federal court per diversity jurisdiction, informing the court in its removal petition that once a settlement agreement between Π and Whayne was reached, the dismissal of Whayne would make the case removable. Supreme court held that diversity at the time of trial and judgment cures a wrongful removal of the case at a time when diversity was incomplete

VII. Erie Doctrinea. Federal courts must apply state common law as well as state statutory law in diversity actionsb. The Rules of Decision Act, states, "The laws of the several states, except where the Constitution or Treaties of the U.S.

or Acts of Congress otherwise require or provide, shall be regarded as the rules of decision in trials at common law in the court of the U.S. in cases where they apply. (28 U.S.C. 1652)

c. Diversity case in federal court – do you apply state or federal law? Usually both. To substantive law, apply state law. To procedural parts of the case, apply federal law

d. Swift v. Tyson - Federal courts had to follow state statutory law in cases dealing with a nonfederal question, which meant that there was state common law and federal common law. This gave the Π to shop around for a favorable forum within a given state. Swift says when there is no statute on the topic, federal courts should apply federal common law and figure out what the best rule is.

e. Erie Railroad v. Tompkins – Try to apply what a state judge would do, even though it is in federal court. Swift was unconstitutional. But there’s no such thing as federal common law. What kind of state law must judge apply in a diversity case? The substantive law. So now we have to figure out what is substantive and what is not.

i. The court overturned its earlier holding in Swift finding that the reference to laws in RODA included not only state statute law, but also state judicial opinions interpreting the common law.

1. The Erie Court rejected the idea that there was a general common law that applied with equal force in all common law jurisdictions.

2. The Court held that federal courts had no power to create common law. ii. The court could have reached the holding above based on the RODA, however the Court made it clear that

the result in the case was dictated by the U.S. Constitution. iii. There is nothing in the constitution that allows Congress to pass general laws, which means the courts do not

have power either. [Article I, Article III, and the 10th Amendment]f. The substance/ procedural distinction:

i. The Erie doctrine essentially provides that federal courts must apply state substantive rules of law except when deciding a federal question and federal procedural law.

ii. Guaranty Trust Co. v. York - New York statute of limitations law or federal should apply? statute of limitations are substantive, New York law should be applied. if New York law applies then Guaranty wins. If federal common law applies then York wins.

1. Outcome determinative test: whenever state law is outcome determinative, you must apply the state law (frankfurter’s rule).

a. Problem with analysis: any procedural matter can change the outcome of the case, therefore, the test would require federal courts to apply many state rules that are clearly procedural.

b. Byrd v. Blue Ridge Electric – Factors Test: is a worker an independent contractor or employee? If independent contractor you can be a statutory employee under South Carolina law. State law required the judge, not jury, to decide issue of application of workman's compensation law.

i. State law did not apply in federal diversity case where it allowed a judge, and not

8 | P a g e

jury, to determine a factual issue. ii. The SC develops an interest balancing approach for whether state law is

substantive, and also thinks that if a matter is outcome determinative, federal law must be applied if a strong federal policy is involved in the matter.

iii. Federal interest: The court noted a strong federal interest in using juries whenever possible, as evidenced by the 7th amendment to the U.S. Constitution.

iv. Hard to apply, not a bright line test like Guaranty, must weigh factorsg. 2 Goals of Erie

i. Discourage forum shoppingii. Avoid inequitable administration of laws

h. Rules Enabling Act - §2071i. Gives SC the ability to promulgate rules of procedure, evidence, bankruptcy rules… SC according to §2072

doesn’t allow them to make rules of contracts, but procedure is OKii. Hanna v. Plummer - Car accident, Plumer dies. Served at the home of the executor, the federal rule 4e2b says

that one can be served by leaving the copy of the complaint at the home of the Δ with a competent adult of suitable age and discretion. Massachusetts has a contradicting rule that the executor must be served personally. Stat of Lim had run unless federal law applied.

1. any conflict between federal and state law is always outcome determinative. Outcome determination is not talismanic anymore, don’t follow that anymore

2. When a federal rule conflicts with a state rule: a. Must determine if it really is a rule of procedure. (proper under REA?)

i. Warren says yesb. Must determine if it is constitutional-does it deprive someone of a substantive right

i. Warren says no, no one is depriving you of defending yourself.3. 3 Hypos of federal rule conflicting with state rule

a. State law v. constitution, constitution always wins. b. State law v. fed statute, fed statute wins so long as constitutional. c. Federal rule of civil pro v. state law – was it properly enacted/really procedural and doesn’t

abridge substantive rights? Federal rule wins. The one federal thing that will never win against state law is federal common law – which does not exist

i. Semtek International, Inc. v. Lockheed Martin Corp - Semtek sues Lockheed in CA courts, and Lockheed removes to federal courts. Now in federal court, Lockheed states that it exceeds the statute of limitations. Court dismissed based on merits and with prejudice. Semtek re-files in MD state court with 3-yr. SOL. Lockheed says that the federal judgment must be honored. Semtek states that if it was dismissed in CA state court, it would only bar suits in CA.

i. The Supreme Court held that the claim was not barred. The Court questioned whether Fed. R. Civ. P. 41(b) might exceed the Rules Enabling Act if it were to bar a substantive law claim. Instead, the Court held that the law of the state in which the original federal court sat would be used to determine if Π 's claim is barred

ii. The claim-preclusive effect of a judgment on the merits in a federal diversity action is governed by the law of the state in which the federal court sits.

VIII. Pleadingsa. Rule 84: Forms in the appendix suffice under these rules and illustrate the simplicity and brevity that these rules

contemplate. b. Rule 8 – Complaints

i. Short and plain statement of the grounds for jurisdiction. (Arising under, or diversity). ii. You need a short and plain statement of the claim, why you are entitled to relief.

iii. Prayer for relief; what the Π wants. iv. Enough info for the Δ to look at the complaint and make a response.

c. Bell v. Novick - filed tort claim in Maryland state court and removed to the district court. MTD because the Π fails to state a claim upon which relief can be granted. Motion overruled. Π claims the injuries and damage were a direct result of the negligence on the part of the Δs without any contributory negligence from the Π . Rule 8 is good. Not entitled to a more definite statement under 12e, the information should be determined by interrogatories under rule 33 or other discovery procedure. Under Hanna v. Plumer this is a procedural rule, this would be different under a Maryland court but federal rules only require a short and plain statement of the case. Rule 8 standards are met, maybe not Maryland’s standards, but that does not matter

9 | P a g e

d. Rule 7a: types of pleadings i. only 7 types of pleadings

1. Complaint- governed by rule 8a2. Answer to complaint – governed by rule 83. Answer Counterclaim – governed by rule 13- arises out of the same facts

a. (rule 12 motion - can include all of the defenses available under it) 12b6 – even if everything in your complaint is true, there is no relief for those claims.

4. Answer to Crossclaim – between 2 parties on the same side of the case –governed by rule 13. Limits crossclaims to those arising out of the same facts of the complaints.

5. 3rd party complaint– claims must arise out of the same complaint6. Answer to 3rd party complaint7. If court orders, a reply to an answer

e. Haddle v. Garrison - trial court allowed Δ's motion to dismiss under Rule 12(b)(6) for failure to state a claim. The SC finds that the 11 Circuit's conclusion that Haddle must suffer an injury to a "constitutionally protected property interest" to state a claim under section 1985(2) is wrong because nothing in the statute establishes such a requirement. The fact that employment at will is not property under the Due Process Clause does not mean that loss of at-will employment may not injure a person or his property under section 1985(2). The sort of harm asserted by Haddle states a claim for relief under section 1985(2) and such harm has long been compensable injury under tort law.

i. case is all about whether his complaint was acceptable under rule 8f. Conley v. Gibson: The Supreme Court enunciated a very broad standard-

i. Until last year, if you say enough to let the other side know what the basis of the claim is, and it is conceivable that you have a claim, that was enough. (based on Conley v. Gibson)

ii. Conley stated that "Specific Facts are not necessary."iii. A complaint should not be dismissed for failure to state a claim unless it appeared beyond doubt that the Π

can prove no set of facts. iv. Served as the basic interpretation of the "short, plain statement" criterion for half a century. v. The idea was to hash the details out during the rest of the trial process.

vi. Why would you file a case that you are not certain about all of the details?vii. Perhaps statute of limitations is about to run.

viii. Perhaps the other side is stonewallingix. A lot of times, if a lawyer has enough to get by rule 11 (reasonable expectation of an inquiry) you will file a

suit under the reasonable expectation that you will find out more information during discovery.x. As long as you have a good faith basis for alleging the things you need to allege, under Conley, you could file

suit. g. Bell Atlantic Corp. v. Twombly

i. District court dismissed the complaint, 2nd circuit reversed citing “short plain statement” provision of Rule 8. Supreme Court reverses and dismisses the complaint. Requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action is unacceptable. Must have something than a mere possibility of a loss causation. Π s have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed. Hard to prove that companies charging the same price have AGREED to charge the same price. Conley rule…technically allows the Π to start discovery. Rules don’t require lots of facts. Agreement in restraint of trade? Well they all charge the same amount…no facts to support the antitrust allegation except that they all charge the same amount

ii. Rule11b says to the best of your knowledge and belief you are submitting this complaint…so Twombly believes to the best of his ability and knowledge that his complaint is true. Don’t have to have evidentiary support yet… but I will have it after discovery.

iii. Recognize Conley is the base-line, but see that plausibility has been added to it through Twombly, although the court has not defined what plausibility is.

h. Iqball i. He is complaining about being considered a “high-interest” detainee and says he was abused while in prison. Says he

was deprived of his constitutional rights, say he was discriminated against on the basis of national origin and religion, he says that he was treated poorly because he is a Pakistani and a Muslim, which violates the civil rights clause. Claims Ashcroft, head of the department of justice and Mueller, the head of the FBI knew about the mistreatment and did it because of his national origin and religion. The prison officials are also sued and the court allows that. Court doesn’t

10 | P a g e

allow him to recover against Ashcroft and Mueller. Iqball says they condoned and formulated the policy to discriminate against him and others. Furthermore, respondeat superior, the people who hurt him were subordinates of Ashcroft and Mueller. Kennedy says under civil rights law you have to show that the individuals did something wrong and condoned it, not that the subordinates did something. Throwing out the respondeat superior on our own, cannot state a claim for respondeat superior under civil rights clause. Supreme Court is not worried about Ashcroft spending a ton of money on discovery (like they were in Twombly)…but before we let this guy who was deported back to Pakistan, etc. we should make sure he has a good case before discovery because national security could be compromised then. Iqball is not saying they can’t have a strict confinement for high security prisoners…they are saying the prisoners in strict confinement cannot be based on origin/religion. Kennedy says the complaint is conceivable, of course the head of the FBI and DOJ got together after the country was attacked. But where is the evidence that the men got together and planned a discriminatory policy. The plan is conceivable BUT NOT PLAUSIBLE. Kennedy says there isn’t a civil rights violation. Rule 8 means claim must not only be conceivable but also plausible, no facts have been given to make it plausible so this claim cannot proceed. Not sure that there is any evidence that Kennedy could have been given to cross the line to Plausible.

i. Dissent: Why do they think Twombly is a different case? In Twombly we weren’t even sure the conduct alleged was illegal, they just said there was parallel conduct which can be perfectly innocent. They gave no reason to believe it was wrongdoing. In Iqball you allege terrible things and say it was because of national origin/race, which would definitely be illegal. We are fighting about whether the Δs are proper or not in this case. When I said plausible I meant plausible that there was a tort or cause of action or civil rights action…you made it plausible. The only question is whether these guys were a part of it, you said enough. You said they enacted the policy themselves, those aren’t legal conclusions. Iqball is 5-4 and is now the rule

ii. Some things are clear from Iqball1. Plausibility is now the standard for all cases2. No clear definition of plausibility … mushy standard. 3. Iqball interprets rule 8 – short, plain claim…4. Rule 84: if you use the form, that suffices under rule 85. Forms are limited to certain types of cases6. What does this mean about how cases are processed? Under Iqball cases are more likely to be

thrown out earlier under 12b6.j. Stradford v. Zurich Insurance Co - Stradford sued insurers in state court seeking payment on an insurance policy. Δs

removed the case to federal court and asserted counterclaim against Stradford asserting that he knowingly and willfully devised a scheme to defraud them and obtain money by false pretenses. Stradford moved to dismiss the counterclaims that are based on fraud for failure to state their claims with sufficient particularity under Rule 9(b)

i. Rule 9(b): In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.

ii. The court held that Δ's counterclaim for fraud was insufficient because it failed to identify the false statements allegedly made by Π .

k. Rubric of burden of proof i. there are 3 types of burdens.

1. Burden of pleading – who has to plead a certain fact. 2. Once you get to trial, there is something called a burden of production. I may have pleaded in my

complaint that your car ran into mine but that doesn’t get me to the jury. At trial I must produce evidence that it occurred. You can be dismissed by MSJ if you don’t have enough evidence. If the judge calls the jury in and by the time you haven’t produced evidence to prove your case = directed verdict from the judge because there isn’t evidence. This is throwing out the case.

3. Burden of persuasion – in a criminal trial the state puts on evidence that a crime committed, this is a burden of persuasion. But now the jury must find that the evidence shows beyond a reasonable doubt the crime was committed.

ii. Typically all 3 of these burdens fall on the Π with respect to the elements of a claim. If it is a torts claim and you’re the Π then you must show generally the Δ had a duty, there was a breach of the duty and the proximate caused by the Δ.

iii. Discharge the pleading when you file your complaint. Production is discharged at either MSJ or doing the trial. Persuasion discharged by arguing in front of the jury and convincing them your case was right.

iv. As to pleading it’s enough if you just say it correctly. Production requires enough evidence that if believed

11 | P a g e

would reasonably establish your case. As to persuasion, you must show that your evidence is more powerful than the other side’s evidence. We have focused on the pleading burden, but it’s important to remember the burden of pleading will carry with other burdens down the road.

v. If Δ doesn’t feel Π fulfilled its burden file 12b6 motion. vi. Rule 8 c - affirmative defenses.

1. Affirmative defenses – why do we make a Δ allege these defenses? Why don’t we have the Π say there are no affirmative defenses…but the list is not exhaustive, so this expedites things to allow Δs to allege the ones that are valid. The evidentiary support about whether an affirmative defense is true, is held by the Δ rather than the Π usually. Δ will most likely know. If I sue you on a promissory note, it’s unlikely I would sue you if it has been paid, unless it is a mistake.

2. Why we have 8c: a. someone has to allege these and Π s may not have information about it. b. they are a bit unusual, not what we normally expect the response to a complaint to be, so

we have to put the burden on the one who didn’t draft the complaint. 3. The consequence of not including an 8c defense in your answer at some point, is that you can’t make

it. If you don’t bring it up, then it is waived.4. affirmative defenses can always be added to an answer under the liberal amendment policies of rule

15 - can amend this answer so long as you have a reason to add it. It can even show up at trial. This is not an exhaustive list, consequence of alleging it you maybe have to prove it, but it still may be better to raise it.

5. Can put in your answer “as an affirmative defense, I allege…” – the affirmative defense is not a counterclaim. Counterclaims seeks recovery against Π . You may do both, though. If you were injured in an auto accident and think he was at fault, you would answer his complaint with affirmative defense of contributory negligence and then file a counterclaim to get recovery for yourself…

6. Π s don’t reply to affirmative defenses, but they do reply to counterclaims. You reply to it the same way you do an answer, I admit, I deny, I don’t know…

7. Jones v. Block - court say he didn’t exhaust all his administrative appeals. Rule 8c says in responding to a pleading a party must state any affirmative defense including (but it doesn’t say that these are the only possible affirmative defenses.) 8c doesn’t answer if this is an affirmative defense. The court concludes this is a burden for the defense

vii. Rule 11: 1. important for several reasons.2. Judge may sanction you even if you say you’ll never do it again. The system is built on the

assumption of good faith on both sides. 3. Plausibility – it is whether you alleged enough facts for it to be plausible if the facts are assumed

true. Iqball would survive a MTD if Ashcroft admitted everything. 4. Can’t just look at the rules to see what you need to say to get past the technical requirements of the

rules. Ashcroft can’t say he was never AG – because that’s not true. The default assumption is that people have some basis for what they are doing.

5. This is so we aren’t questioning if people really are a citizen of a certain state, rule 11 polices the system.

6. Sanctions can occur in 2 ways, a court can impose sanctions on its own –Rule 11c1 – the court must give you notice and sufficient opportunity to respondWalker v. Norwest Corp - complaint did not allege complete diversity = rule 11 violation? rule 8 says that one must allege the basis for jurisdiction, the complaint says ‘some of the Δs and some of the Πs are citizens of different states and therefore there is diversity.’ What part of rule 11 does this violate? Rule11b. He did not sufficiently investigate the facts. He argues that he did investigate the facts but he didn’t understand the legal significance of the facts. This is an 11b2 case. He’s made an uninformed claim about jurisdiction and reasonable lawyers would not make that claim. He checks and figures out that some on the Πs side and some on the Δs side on each side. So he’s done sufficient investigation to figure out that there is not diversity and should not bring it in federal court. He says making an effort to figure out the citizenship of the Δs would be overly burdensome. But he figured out that there is one from each side from SD, then you’re done, don’t have to investigate everyone once you find diversity is destroyed. He also alleges that the district court abused its discretion in awarding monetary sanctions. Rule 11 gives the court some discretion, if he

12 | P a g e

had just made a mistake in the complaint and was told about it from the other side then they should be sanctioned by the court and the court has the discretion for sanctioning jerks. He argues that the court should just dismiss those from South Dakota because the court says they shouldn’t have to do his work for him. The judge dismisses the case without prejudice because there is no longer jurisdiction because no subject matter jurisdiction. Have to do show cause order of 11c3 before the case is settled or dismissed…otherwise you can’t do it.

7. Christian v. Mattell, Inc - how did he violate rule 11? No factual investigation. What didn’t he investigate? He didn’t investigate when the Barbie was designed and unlike the guy in SD who gets to say it would have been hard to figure out where the Δs are…but it is stamped right there on the Barbie he brought to court. Why does she reverse the rule 11 sanctions? Worried about whether or not the court used other factors besides the writings to influence the decision of sanctions (1/2 million in sanctions). But rule 11 sanctions is only for things filed in court, there are other sanctions for not showing up on time, acting out during meetings, etc. Penalty given by the district court seems disproportionate. This is the clearest rule 11 violation ever. A rule 11 violation on a rule 11 motion is possible if you file it without a sufficient basis. That is why there are 21 days

l. Responding to the complaint. Rule 12i. 4 ways

1. You can admit things…2. You can deny things3. You can say I don’t know4. Or you can allege things = affirmative defenses.

ii. You can file an answer – the complaint alleges different things and the answer says deny, admit or I don’t know

iii. You can respond to a complaint with a defense from rule 12b. It’s an either or. You can’t file an answer AND a MTD. Must make that choice within the time given to respond, usually 20 days after service unless there is a waiver and you have 60 days.

iv. Must file answer/motion with the court and serve it on the other side, Rule 4 allows everything but the initial complaint to be served by mailing it.

v. Don’t have to file an answer until the court dismisses the motion. 10 days after the denial to file the answer (rule12a4).

vi. Never required to file a 12b motion, to preserve the defenses without filing a 12b motion, you put them in your answer. I admit, deny the allegations AND the 12b defense of no personal jurisdiction, etc. Might put the 12b defenses in the answer… to do further investigation later, or as a strategic move. It’s not a motion if you put the 12b defense in your answer. At the beginning you have to choose 12b motion or the answer. Even if you don’t think you will succeed under 12b you might not want to file an answer if you are following rule 11… might not want to admit the allegations and try for the 12b defense.

vii. Rule 12d is a motion for a more definite statement – courts don’t usually allow this. If the claim passes 12b6 then court tells you to get the answers in discovery.

viii. Motion to strike almost never gets used, tooix. When you bring a rule 12b motion or an answer with 12b defenses, you assert all of the rule 12b defenses

you have. You will have waived the 12b defenses if you don’t assert them. There are a couple exceptions.x. Subject matter jurisdiction, rule 12h3.

xi. Rule 12h2 has some other exceptions. Can’t include failure to state a claim if you leave it out of your 12b motion, you can assert it later in trial or in a motion for judgment on the pleadings. You can raise the failure to join a responsible party later, too.

xii. Rule 12e Motion for judgment on the pleadings: once we have a complaint and answer, there might not be anything to litigate anymore. Asks the judge to end the suit because they admitted everything, just have to look at the pleadings and I win. Or if there is not a claim that can be remedied.

xiii. Rule 12g is about all motions under this rule, not just 12b. combination under rule 12 is all 12motions…but 99% of the time it is 12b. Rule 12 also provides that any of these defenses under rule 12 in an answer if you haven’t filed a MTD. But if you don’t put them in the answer, you waive them.

xiv. Later amendments can’t bring back rule 12 defenses. But there is no similar rule for rule 8, if you have an affirmative defense and convince the judge to let you amend…then it’s ok.

xv. Zielinski v. Philadelphia Piers, Inc. - Only if the court orders a response can you actually respond. It is an ineffective denial for Δ to deny Π 's allegations that Δ "owned, operated, and controlled" a forklift when Δ

13 | P a g e

owned the forklift, but did not operate and control it.1. The court held that the vague general denial of liability where a specific denial of ownership was

required constitutes a bad faith pleading. 2. The court, because of PPI's improper form of the answer was deficient, treated the allegation as

admitted, since allegations not specifically denied are admitted. m. Rule 15: amending pleadings

i. Amendments as a right always allowed if done before answer. Can amend so long as there is no prejudice against the Δ for the amendment – says amendment should be given to avoid injustice. Rule 15c only comes into play when the statute of limitations has run, the additional complaint must arise out of the same transaction. If it is before you receive an answer to a complaint…then you have 20 days after it is filed to amend it once as a right. Otherwise you have to get a stipulation from the other side or permission of the court…permission will be given liberally to allow justice

ii. Can you amend after you are served with a MTD because a MTD is not a pleading, it is a motion. Once he answers, cannot amend it without consent of the other party or the court. You have the same period of time as you would if you had a complaint.

iii. If there is something wrong with your answer, you can fix it within the 20 days, after that you have to get a stipulation or court permission.

iv. The language is specific here, 15a2, the courts “should freely give leave to amend when justice so requires” = we should generally let people amend their pleadings if they need to.

v. The rule encourages people to amend their pleadings along the way, the judge can allow amendments to happen during trial because everybody had notice along the way… the court will damn well ask the other side why they didn’t agree to the amendment and most judges won’t find it persuasive to say that they didn’t have to do it.

vi. The rule 8b even allows amendments after the trial is over. vii. 15c2 – does the party know a mistake was made in the relevant time?

viii. Amendment issues become most important in circumstances where the statute of limitations has run. 15c allows an amendment that relates back to an original pleading, under certain circumstances.

1. Three requirementsa. Same transactionb. Receive notice within that time period so not prejudiced without knowing meritsc. Know or should have known action would be brought against you but for mistaking the

party’s identity (forgetting to add Δ is not a mistaken identity). You honestly believe the person filed again is the right person even though they aren’t, happens with corporations and subsidiaries

2. Beeck v. Aquaslide “n” dive corp. - Beeck sued Aquaslide which he believed to be the manufacturer of a slide on which he was injured. Aquaslide originally admitted that it was the manufacturer, but 6 months later found out that they had not manufactured the slide. They then moved for leave to amend their answer, to withdraw its admission, and to have a separate trial on the manufacture issue.

3. Rule 42(b) gives court the authority to order separate trials in the int. of judicial economy. 4. Statute of limitations and relation back: The federal Rules permit both Π s and Δs to amend their

pleadings to add a new legal theory, a new party, or a new defense, whether or not such new matter arises out of the same factual patter that forms the basis for the original complaint.

ix. Moore v. Baker – No informed consent. After statute of limitations has run the Π wants to amend the complaint to say that the doctor negligently performed the surgery. But it doesn’t arise out of the same occurrence, you are complaining about 2 different things. First you’re complaining about what happened before surgery, now you want to complain about what happened during/after surgery, doesn’t meet the basic requirement of it arising out of the same transaction. The doctor wasn’t put on notice that he would have to defend the events during and after the surgery. Doctor did not get fair notice from the original complaint that you had complaints about the surgery.

1. Did not relate back (15c) = SOL bars claim2. Not arising out of same facts

x. Bonerb v. Richard J. Caron Foundation - Original complaint is about negligence, the amendment is adding that after Π s’ counsel was substituted he realized he had a malpractice claim, too. But it arises out of the same transaction so this is OK to amend.

14 | P a g e

IX. Former Adjudicationi. Claim preclusion = res judicata.

1. A sues B and A loses. A cannot bring a 2nd suit claiming the first suit was wrong. Once a claim has been decided you cannot bring the same claim again. Forbids a party from litigating a claim that was, or could and should have been raised, in former litigation

ii. Issue preclusion = Collateral Estoppel1. A sued and the issue is whether you were driving, the jury decided you were driving. Next case

comes along and a different person sues you and it is at issue if you were you driving, but that claim has already been decided so that judgment stands for the second lawsuit

b. Claim Preclusioni. Goals of claim preclusion

1. Efficiency - bring all claims at once2. finality - don’t have to go back to the same transaction’3. avoiding inconsistency

ii. Rush v. City of Maple Heights - Wife owns a motorcycle, her husband drives the cycle and both he and the bike are hurt when they run into a hole in the road.

1. #1 Mrs. R v. city for property damage and she won. 2. Suit #2 is Mrs. R v. City for personal injury using issue preclusion3. Suit 1 established the city was negligent because of the pothole. City’s argument is claim preclusion,

she should have brought personal injury in the first case. 4. Π wins at trial in the 2nd suit, court says Ohio SC has already decided you can split claims =

restatement rule, general rule for today. It is more efficient to litigate all at once. Negligence already established and damages just have to be decided

iii. Full faith and credit, not an issue for claim preclusion rule, says that state 2 needs to find out what the issue/claim preclusion rules in state 1 were. This question is not necessarily answered by rule 41a, full faith & credit clause requires you to figure out what the state 1 follows. Modern rule is the same transaction test

iv. Claim splitting rule – if you only try property in first claim and try different one on another claim, some states still allow claim splitting.

v. Frier v. City of Vandalia - 4 cars have been towed by the city. Sues for replevin = wants his property back. Suit #1 in state court, city wins because the cars were properly towed. Suit #2 filed in federal court, claims due process violation because the government has to have a prompt hearing (not necessarily before) to take or temporarily deprive you of your property. Could have brought his federal constitutional claim in state court. Court finds claim preclusion because he should and could have brought the DPC in the first lawsuit. Doesn’t matter who won/lost #1, #2 is barred by preclusion regardless of the outcome in #1 (for claim preclusion). For issue preclusion it matters a lot who won suit #1. Combining claims in a single complaint doesn’t mean they have to be tried together (rule 42 allows claims in a suit to be tried separately)

vi. Rule 13a – a Δ must bring as a counterclaim all defenses he has arising out a transaction that is the subject of the complaint. Claim preclusion works both ways

vii. Martino v. McDonald’s System, Inc - as part of the franchise, Martino’s relatives cannot have a financial interest in another food business. Π ’s son buys a burger chef franchise. McD sues for breach of contract and sues the Martinos. Court gives consent judgment for McD in #1 where the judge says you can order certain things and it is enforceable with the full power of a judgment. In #2 Martino brings a suit saying that their agreement violated antitrust acts. If we allow #2 then in #1 McD is enforcing a contract that we later find illegal. It is more efficient for the 2 issues to be separate but the transaction test has us try them together. Federal court says Martino should have brought his claim as a counter-claim in suit 1 (rule 13). Court doesn’t want inconsistent judgments. If #1 found K fine and then we find it not OK, it is inconsistent. Don’t want conflicting results even if inefficient to mix breach of K with antitrust.

viii. If case is up on appeal, still considered a final judgment unless the case is reversed b/c no final judgment.ix. 2 basic requirements for claim preclusion

1. Always a suit 1 and suit 2 – do they involve the same claim? Under the majority test the question is whether they arise out of the same transaction (same question you ask for supplemental jurisdiction). Under the minority rule, the question is whether the 2 cases involve the same evidence? For our purposes, the majority rule = the restatement test, the same transaction test, is what we need to know

15 | P a g e

2. Court #1 must have had the ability to hear the 2nd claim (If Rush brought her claim in small claims court for $5 could not have also heard her multimillion dollar personal injury claim…then no claim preclusion).

3. Suit 1 and suit 2 must involve the same parties… there are some exceptions to the rule when parties are in privity. If you own a house and I claim I have an ownership in the house and I win the case that I have ½ interest and if you sell the house I don’t have to litigate with the next person who buys it that I still have ½ interest.

4. Suit 1 must have a final judgment on the meritx. Searle Brothers v. Searle - Suit 1: Edlean says she owns half the Slaugh House cause of marital property.

Woodey says he owns ½ interest in the property and the other half was owned by a partnership with his sons as partners. Suit 2: sons sue their mother, Edlean because they claim suit 1 was wrong. Trial court finds claim preclusion. Claim preclusion: even if the 2nd court thinks the first suit was terrible, it doesn’t matter and the 2nd suit cannot go forward.

xi. Taylor v. Sturgell - Taylor says what the rule of virtual representation is…SC doesn’t like visual representation. Could Arizona have a virtual representation rule that is broader? Can’t screw people out of their ability to show up for their day in court…states are not entirely free to ignore if someone is not in suit 1 but precluded for suit 2. Being friends is not enough, must have a formal relationship for privity according to Ginsberg. Make sure they are the same parties for claim preclusion…there are a few exceptions but mainly just need the same parties.

1. Same claim2. The ability to bring the claim in suit 13. Same parties4. Final judgment in suit 1 – haven’t talked about yet

a. Suit dismissed for absence of personal jurisdiction. Can I rebring it? It is not preclusive, it is not with prejudice, it is not on the merits. Unless it is a final judgment on the merits in suit 1 then there is no claim preclusion

b. Suit 1 tried and is up on appeal but you bring suit 2, is suit 1 preclusive? Yes, even though it’s not really final but it is a final trial court judgment. Have to wait to see the appeal.

c. Who should have to prove claim preclusion on basis of agency? Defense, because claim preclusion is an affirmative defense.

d. What is a final judgment on the merits? Jury verdict? Yes. Directed verdict? Yes. Summary Judgment? Yes

xii. Gargallo v. Merrill Lynch - Merrill Lynch sued Gargallo in Ohio state court to collect a 17k debt, Gargallo counterclaimed that Merril had caused the losses through negligence. Oho state court dismissed the counterclaim with prejudice under Ohio law for failure to comply with dsicovery requests. Gargallo then sued Merrill Lynch in federal court alleging that they had violated federal securities laws, and the court dismissed the case on grounds of res judicata.

1. The court of appeals held that the prior state court judgment upon a claim with the exclusive jurisdiction of the federal courts did not bar a subsequent federal lawsuit involving an identical cause of action.

2. Federal courts are required under 28 U.S.C. 1738 to determine the preclusive effect of prior state court judgments pursuant to the law of the state where the judgment was entered, and under Ohio state law, a final judgment on the merits that is not valid for lack of subject matter jurisdiction over the claim in question has no preclusive effect with regard to that claim.

3. When a court has no jurisdiction, its disposition of the claim will not be preclusive (this is the general rule) which is taken from the Restatement.

c. Issue Preclusioni. We are not saying you can’t bring the claim, just can’t say the same issues.

ii. Must have the following 4 things for Issue Preclusion1. Issue of fact/law2. Actually tried or determined in suit 13. Essential4. Valid final judgment

iii. 5 requirements

16 | P a g e

1. Same issue (claim/fact2. Actually litigated and determined3. Final judgment4. Necessary to judgment5. Same parties? If not, is it one of the exceptions?

iv. Illinois Central Gulf Railroad v. Parks - Jessie Parks brings suit against the railroad for personal injuries after already having brought a derivative claim previously for loss of his wife's service as a part of her personal injury claim. The court held that issue preclusion did not bar Jessie's attempt to recover for his own injuries because it is not clear what the jury in the first action considered, let alone was presented with

1. state law stated that the consortium claim and personal injury claim involved different legal "rights" and accordingly were not barred by claim preclusion.

2. The court reasoned that Jessie could have lost his first claim because he was contributorily negligent or because he suffered no damages. Although the contributory negligence was the same in both suits, damages would differ for the different claims

3. whether the issue was essential to the judgment? a. Was the issue really something the jury had to find in order for one of the Πs to winb. A determination in the alternative may not have been as carefully or rigorously considered

as it would have if it had been necessary to the result and in that sense it has some of the characteristics of dicta.

c. The second restatement is trying to discourage appeals, by saying that neither issue is issue preclusive. If there was only one issue, then you could appeal. If the judge affirms that, then both claims are now issue preclusive, because now, the appeal has already been taken.

d. Trying to avoid unnecessary appealsv. Mutuality: same parties on both sides … for claim preclusion you shouldn’t lose your claim if you haven’t

litigated, this makes sense. In issue preclusion the modern trend is to be much looser about mutuality. The first critical case is Blondertongue…judge says patent is not valid…got the chance to prove the patent was valid and suing a different victim in suit 2 doesn’t make it unfair to assert the issue that was decided in suit 1. When a Π loses an issue in suit 1 (meeting all 5 requirements) the patent Is no good then if he wants to litigate the same issue a Δ may assert issue preclusion because the Π already had his day in court. Blondertongue wanted to make defensive use of issue preclusion.

vi. Parklane hosiery co v. Shore- The court held that issue preclusion did not allow Parklane to relitigate the factual issues previously determined against them in the first claim, the SEC action. Focus is on offensive use of issue preclusion, as opposed to the defensive use of issue preclusion described in blonder-tongue. SEC filed suit against Δs alleging that Parklane had issued a false proxy statement. Shore then files a claim against Parklane, and wants to apply issue preclusion to findings of the other suit which found that the proxy statement was materially false.

vii. Difference between offensive and defensive use of issue preclusion:1. Defensive use precludes a Π from relitigating identical issues by merely switching adversaries. 2. Offensive use could create an opposite incentive- since the Π will be able to rely on a previous

judgment against a Δ but will not be bound by that judgment is the Δ wins, the Π has every incentive to adopt a "wait and see" attitude.

a. Court is concerned about giving people the incentive for people to not join in the same suit. b. There are federal rules for joinder etc.c. Second reason is the same as discussed previously: The incentives to litigate may not be the

same for the Δ in each case; if the Δ in the first action is sued for small damages, he may have little incentive to defend vigorously.

viii. Critical thing in this case: offensive use of issue preclusion is highly discretionary; there are other policies at stake.

1. Other question in this case is whether or not this violates the 7th amendment (party is entitled to a jury trial.)

ix. The government is never subject to offensive issue preclusion. x. State Farm v. Century Home - This case involves mass tort litigation arising out of a fire that began on Century

Home components property, and resulted in 50 separate actions. Three of these actions proceeded to final judgment; one ruled in D's favor, and 2 ruled in P's favor after one was appealed. A group of Π s asserted that

17 | P a g e

the court should provide issue preclusion against D on the question of liability. The court held that nonmutual offensive collateral estoppel must not be applied if it results in unfairness to the Δ.

1. When there is an ambiguous trend, the court will most often not apply issue preclusion. 2. Issue preclusion would never be applied to the Π , because each Π is entitled to his/her day in court

Rule 1 says: these rules should be construed and administered to secure the just, speedy and inexpensive determination of every action and proceeding.Rule 2: only a civil action. If you allege the appropriate facts, prove them, and then you get the appropriate relief. (meant to combine all these previous points of action, don’t have to go to equity court to get specific performance for breach of K)Rule 7a: types of pleadings - only 7 types of pleadings (1) Complaint- governed by rule 8a (2) Answer to complaint – governed by rule 8 (3)Answer Counterclaim – governed by rule 13- arises out of the same facts. (rule 12 motion - can include all of the defenses available under it) 12b6 – even if everything in your complaint is true, there is no relief for those claims. (4) Answer to Crossclaim – between 2 parties on the same side of the case –governed by rule 13. Limits crossclaims to those arising out of the same facts of the complaints. (5) 3rd party complaint– claims must arise out of the same complaint (6) Answer to 3rd party complaint (7) If court orders, a reply to an answerRule 8: Governs complaints. No stylized complaint A complaint under 8(a) has to have 3 things

1. A short and plain statement of the grounds for jurisdiction 2. Short and plain statement of the claim showing the pleader is entitled to relief3. A demand for the relief you think you are entitled to: give me an injunction, my property back or moneyRule 8: look at this for what the SC has said are affirmative defenses…rule 8c these are likely to be Qs on the test.Rule 8(d): a party may set out 2 or more statements of a claim or defense alternatively.Rule 8e2: requires a reason for making these allegations. If you make alt allegations, better have a reason/ each claim.

Rule 9 says there are some complaints where you need heightened standards…like when someone accuses you of fraud, that must be given proof to base that on

Rule 9b requires that fraud cases have more facts than required by 8aRule 11 means you can’t just say what would win the case for you. If you get in an accident, must admit that you ran your car into someone else -- you can still say that it was not a negligent accident. Under 11, you must admit the things you know to be true. Rule 11 has several requirements – for any paper filed with the court:

1. All papers must have a signature of an attorney – signature is viewed as a representation 2. B – you are filing this for a purpose – because you believe in the position you are advocating, that this is a claim/defense

warranted by existing law. Representing as a lawyer that you have made a legal investigation into the claim/defense and say that it is supported by existing law or that you are trying to change law in a good faith way. Facts and contention must have evidentiary support or will have it after an investigation – may not be enough that your client tells you the allegations. Clients lie to you. Rule11b says to the best of your knowledge and belief you are submitting this complaint

3. D – for parties represented by lawyers, you can never complain a paper doesn’t have a legal basis. All other legal sanctions can be filed on a party

Rule 13 a, must bring all claims against a party arising out of a transaction. 13a defines compulsory counterclaim. It meets 1367a because it arises out of the same facts13a – a Δ must bring as a counterclaim all defenses he has arising out a transaction that is the subject of the complaint. Claim

preclusion works both waysRule 14 If Δ liable to Π but someone liable to Δ = 3rd party complaint governed by rule 14Rule 15: amending pleadings: Amendments as a right always allowed if done before answer. Can amend so long as there is no prejudice against the Δ for the amendment – says amendment should be given to avoid injustice.

Rule 15c only comes into play when the SOL has run; the add’l complaint must arise out of the same transaction.Rule 19, allows a Δ to say you can’t just sue me because there’re other people who will be affected by the judgmentRule 20, Δ says there should be additional judgments but they are not required, it would just be better for justice.Rule 24 is someone asking to be a part of the suit, should be in the case because the judgment will affect them.Rule 19 and 24 also allow Δ to force Π to add additional parties (like if the Π is married so they won’t have to go through 2 separate lawsuits against each of the married Π s).

18 | P a g e