GETTING THE DEFENDANT INTO COURT

Personal Jurisdiction
I.

Overview
a. Definition geographical limitation on where a P may sue a D to litigate a
claim. This is a right or defense and is waivable.
b. Full faith and credit
c. Limitations on PJ statutory (state statute needs to grant court power over
the parties) and due process clause (must have contacts such that exercise
of jurisdiction would be fair and reasonable, and must be given
appropriate notice and opportunity to be heard).
i. Federal courts Rule 4: must exercise PJ as if it were a court of the
state in which it is located.
d. Three types:
i. In personam jurisdiction power of the Ds person.
ii. In rem jurisdiction authority over property w/in the state.
iii. Quasi in rem jurisdiction (two types)
1. Court has power to determine if individuals own specific
property in court control.
2. Permits the court to adjudicate disputes other than ownership
based on the presence of the Ds property in the forum.
e. Types of service
i. Personal service directly delivered to the D
ii. Substituted service sending papers by registered mail
iii. Notice by publication publish in newspaper.
Constitutional Limitations on In Personam PJ
= contacts with the forum + notice

Contacts with the forum and fairness

II.

Traditional Rule: Physical Power Theory of PJ (states have power over things
in borders) 1
a. Historical bases for personal jurisdiction:
i. Consent (you show up in court)
1. Implied Consent; Hess v. Pawloski court comes up legal
fiction of implied consent so that nonresident motorists are
served via agent.
2. D responds to court claim in state.
ii. Presence

Theory behind traditional notion states are like separate countries w/exclusive jurisdiction over people/property
in its border. Have exclusive jurisdiction in state and no jurisdiction out of state.

1. In the state
a. If make special appearance to contest jurisdiction
then not presence.
2. Property
iii. Citizenship
b. Notice doesnt matter if put on notice.
III.

Modern Due Process Standard: Contact and Fairness via International Shoe
a. The concept of power by which a state could enforce judgments was
expanded by the Supreme Court in International Shoe in part sparked by
modern economy / rise of corporations / technology.
b. Intl Shoe test: To subject a D to judgment in personam if he be not present
in the territory of the forum, 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.

See class notes, some hypothetical dont know the answer too do the traditional notions
last as well as minimum contacts (minimum contacts only for out of state who doesnt
meet traditional notions?).
Connections with the Forum State
Continuous and Systematic

Cause of Action
Arises out of Instate Activities

Isolated incident

Does not

Intl shoe = continuous and systematic + instate

Hess = isolated act + arises instate
Specific jurisdiction = isolated act + arises instate
General jurisdiction = sufficient contact to assert jurisdiction over all matters
IV.

Modern Due Process Standard: Minimum CONTACTS. The court looks to

purposeful availment and foreseeability to determine if there are minimum
contacts.
a. Purposeful availment A Ds contacts with the forum must result from her
purposeful availment with that forum. Contacts cannot be accidental. D
must reach out to the forum in some way, such as to make money or use the
roads there, or invoke the benefits and protections of its laws. Hanson v.
Denckla. 2
i. Examples of purposeful availment:

Mother established trust in Delaware, named bank trustee. Moved to FL, changed beneficiaries. FL exert
jurisdiction over DL trustee (bank). Trustee contact with FL did not satisfy minimum contacts. Compare to McGee
where insurance company reached out to forum state. Note the case here, bank isnt doing that.

1. McGee v. International Life Insurance Co send only one

insurance policy into forum. Also considered that California
has manifest interest in providing effective means of redress
for residents when insurers dont pay claim.
2. Burger King v. Rudzewicz franchisees reach out to state of
franchise.
3. Keeton v. Hustler Magazine advertising is purposeful
availment.
ii. Examples where there is no purposeful availment:
1. Kulko v. Superior Court 3 Purposeful act outside of the state
that causes effects in state is NOT purposeful availment.
where does effects test come to play in all of this?
2. WW Volkswagon v. Woodson P buy car in NY, get in
accident in OK. D did not reach out to OK. Unilateral
activity of the Ps.
3. The unilateral activity of those who claim some relationship
with the nonresident defendant cannot satisfy the requirement
of contact with the forum. Hanson v. Denckla.
iii. Grey area Stream of commerce
1. Gray where does this fall in SOC dispute? If you are a
manufacturer and you put your product out there, where-ever
the stream of commerce comes out you need to go and defend
the injury (where the tort occurred) you have caused; this is
the cost that comes with being a manufacturer. (Gray v.
American Radiator this is according to Illinois, but it is a
well respected theory). If tortuous act didnt occur in the
state then the statute wouldnt apply. 4
2. Split among the justices in Asahi Metal Industry Co. v.
Superior Court: 5
a. (Stream of commerce) Placing the item in the stream
of commerce, with the knowledge that it would end up
in a particular forum, constitutes purposeful availment.
VERSUS
b. (Stream of Commerce plus) There would have to be a
showing that the D took some additional step to
purposefully avail itself of the forum.
3

Ex-husband bought daughter a plane ticket to live with mother in California, said effects of greater expense on
mother were felt in state. Financial effects do not count as effects.
4
In this case Titan (Ohio) American (Pa) Illinois store Gray. The issue is only over one valve that makes it
into Illinois, others from other states. Gray suing Titan as manufacturer
5
Can a car part manufacturer be brought in CA courts by a foreign company to which it sold parts? No, because
violates fair play and substantial justice (large expense for Asahi, little value for CA, diplomatic concerns), torn on
the minimum contacts element and stream of commerce.

b. Foreseeability must be foreseeable that the Ds activities make her

amendable to suit in the forum. The D must know or reasonably anticipate
that her activities in the forum render it foreseeable that she may be haled
into court there. Keeton v. Hustler Magazine.
V.

Modern due process standard: FAIRNESS, the traditional notions of fair play
and substantial justice

Connections with the Forum State

Continuous and Systematic

Cause of Action
Arises out of Instate Activities

Isolated incident

Does not

a. Relation of Claim to Contact

a. Specific jurisdiction: If in state activity is less than systematic and
continuous (isolated act), the PJ will be proper if arise out of instate
activities.
b. General jurisdiction: If the D engages in systematic and continuous activity
in the forum state, the court will likely find this activity a sufficient basis
for exercising PJ for any cause of action by the D, whether it arose in or out of
state. Perkins v. Benguet Consolidated Mining Co. 6
i. Example of general jurisdiction Perkins is the only case; question is how
far does this go?
ii. Example of not general jurisdiction; i.e. continuous and systematic:
1. Helicopteros Nacionales de Colombia v. Hall not satisfied in
Texas for wrongful death case against a Colombian corporation
whose contacts consisted of only one trip to Texas by the CEO,
acceptance of checks from Texas bank, purchases in sate. Claims
not related to Texas activities.
b. Convenience forum is constitutionally acceptable unless it is so gravely difficult and
inconvenient that a party is unfairly put at a severe disadvantage in comparison to his
opponent. Burger King. Hardly ever met.
c. Forum States Interest
a. Legitimate interest in providing redress for residence. McGee strong interest in
protecting citizens from alleged misfeasance by insurance companies.
b. No legitimate interest. Asahi even though placed defective good in stream of
commerce that might get to California, it would be unreasonable for California to
exert jurisdiction considering severe burdens on Asahi defending foreign legal
system, slight interest of Taiwanese manufacturer and California in jurisdiction,
and international interest in subjecting alien corporation to US jurisdiction. NOT
FAIR.
d. Other Factors see 9 if interested

President of Philippines company return to Ohio during WWII, do company services, etc.

VI.

Modern due process: NOTICE reasonable method be used to notify the

defendant of a pending lawsuit so that she may have an opportunity to appear
and be heard. Due process requires that notice be reasonably calculated,
under all the circumstances, to apprise interested parties of the pendency of the
action and afford them the opportunity to present their objections. Mullane v.
Central Hanover Bank.
a. Traditional methods satisfy due process:
i. Personal delivery to the D
ii. Leaving papers with a responsible person @ D residence
iii. Delivery to agent appointed to accept service
iv. Delivery by registered mail, return receipt requested.
1. Does not require receipt, due process satisfied if the placed in
mail.
b. Requirements that Agent notify defendant
c. Multiple and unknown parties, Mullane 7 beneficiaries whose address
were known could be notified by mail, those unknown could be notified by
publication.
d. See SERVICE OF PROCESS, for how notice is delivered.

VII.

Modern STATUTORY STANDARD most states have statutes that grant

courts in personam jurisdiction in the following situations:
a. Physical Presence in the State at time of Personal Service. Burnham v.
Superior Court. There are exceptions:
i. Service by fraud or force
ii. Immunity to parties and witnesses most states grant immunity
from PJ to nonresidents who are present in the state solely to take
part in judicial proceedings.

Is this transient jurisdiction too? Even though Shaffer says everything needs to comport
with International Shoe, by mere presence in the state he can be served. Takes us back to
the historical notions only just changed a little: (1) citizenship; (2) consent; (3) presence
of property [changed by Shaffer]; (4) Presence of person in state [Pennoyer / Burnham]
and presence of person out of state [International Shoe].
b. Domicile?
c. Consent express and implied
i. Express consent
1. Contract forum selection clause, Carnival Cruise
2. Appointment of Agent to Accept Service of Process
7

Beneficiaries of a trust are suing the bank/trustee for mismanagement. Bank is the caretaker of the trustees, one
responsible for giving notice, but since an adversarial party there is concern they will not provide sufficient notice.

ii. Implied consent Hess v. Pawloski

iii. Voluntary appearances if contest the case w/o challenging personal
jurisdiction (special appearances) then consenting. Insurance Corp
of Ireland v. Compagnie des Bauxites de Guinee. 8
d. Long-arm statutes courts have PJ over nonresidents who perform or cause
to be performed certain acts w/in the state; extend jurisdiction across state
borders.
i. Unlimited long arm give the courts power over any person or
property over which the state can constitutionally exercise
jurisdiction.
ii. Limited (or Specific) Long Arm specify in detail the situations in
which their courts can exercise jurisdiction.
1. Tort vs. tortuous act, see Gray read tortuous act to be the
place where the tort occurred.
iii. What they can cover:
1. A D who conducts general activity in the state.
2. Commission of any series of enumerated acts w/in the
jurisdiction.
3. Commission of act outside the jurisdiction causing
consequences w/in it.
Some language in Gray notes that I dont understand about legislature making long arm
shorter than the constitutional limit and judicial activism?
VIII. In rem jurisdiction adjudicates rights of persons w/respect to property in the
state. Binding not on the parties but the disposition of the property. Hulk
case??
IX. Quasi in rem jurisdiction permits a court w/o in personam jurisdiction to
determine certain disputes between a P and D regarding property when the
property is located in the forum state. Shaffer v. Heitner
a. Two types one involving property in state, the other unrelated to property
in state (severely limited by SC court sold basis of jurisdiction is the
property; judgment can only be satisfied out of the property).
b. Until Shaffer (1977) a D w/no other connections to the state could be sued
there simply because he owned property there.
c. Shaffer 9 minimum contacts standard is applicable to every exercise of
jurisdiction. Mere presence of property is not enough; quasi-in-rem is only

Delaware bauxite producer sues foreign insurer to cover them for mechanical failure. Insurer contests jurisdiction,
Del corp. try to do discovery, insurers fail to comply. Consented to JP when came to court re: discovery. Consented
to litigate.
9
H brings derivative shareholder suit, corporation poorly managed, owns only 1 stock in the company. File order to
sequester Delaware property (shares of Greyhound). No, cant do this. Quasi-in-rem because shares are property.

proper when minimum contacts exist making exercise of jurisdiction fair

and just.
i. If on property then property is enough due to close connection to
litigation = minimum contacts.
ii. Unrelated to property must have minimum contacts. Rare. Only
use this to fill the due process gap?
X.

Personal Jurisdiction in Federal Court Rule 4

a. How the Federal Courts get personal jurisdiction:
i. 4 (k, 1, A) Service of a summons or filing a waiver of service is
effective to establish jurisdiction over the person of a defendant (A)
who could be subjected to the jurisdiction of a court of general
jurisdiction in the state in which the district court is located.
1. Using the state long arm
2. Need to have a statute (long arm, or, tag them while in the
state) + satisfy due process
3. Do this to limit the number of federal courts a P can hail a D.
ii. 4 (K, D) Service of a summons or filing a waiver of service is
effective to establish jurisdiction over the person of a defendant (D)
when authorized by a statute of the United States.
1. Nation wide long-arm, very limited provision (because if not
it would undermine the above).
2. (K,2) only use if not subject to the jurisdiction of the
courts of general jurisdiction of any state. I.e. intended for
foreign defendants that have minimum contacts with the US
but no specific state. Only use this if you cant show that
there is another state that will hear the case.

XI.

Challenging Personal Jurisdiction Rule 12

a. Be aware of rules 12B, 12G, and 12H
b. Importance: MUST challenge personal jurisdiction FIRST. If you dont
and you file something else, then youve waived jurisdiction which is the
same as consenting to jurisdiction.
Service of Process

I.

How service is made FRCP 4 personal service or service left at the Ds

usual place of abode w/one of suitable age and discretion residing therein, or
service upon an authorized agent of the D, is valid. Alternatively service may
be made under state rules or, under waiver of service provision of Rule 4(d), by
mail.

a. State rules 4(e) where federal court sits or where service is to be effected.
Regardless of whether its diversity or not, federal courts use state long
arms.
b. Waiver of service = service by mail, enticing to do this because otherwise
D has to pay the costs. See Maryland Firemans Association.
c. Federal Rule 4(e)(2): Delivery to an Agent Authorized by Appointment,
National Equipment Rental Ltd. v. Szukhent. 10
d. Parties served out of state:
i. Statute rules for extraterritorial service of the state in which the
federal court sits i.e. long arms, etc.
ii. 100 mile rule 3rd party D or joined w/100 miles where action
pending and out of state service is permitted by federal statute
(interpleader).
II.

Immunity and Etiquette

a. Purposes behind it:
i. Promoting the administration of justice / for the benefit of the court
namely, parties that come to a state to participate in a lawsuit are
often granted immunity from service of process in other suits
(witness or lawyer for a party).
ii. Other immunities
1. If come to jurisdiction to answer a different charge against
you, cant be served w/something else.
b. When not immune: State ex rel. Sivinsty v. Duffield when come into
county on own will and in jail, not immune from service of process.
c. A judgment procured by fraudulent service is void. Wyman v. Newhouse
FEDERAL SUBJECT MATTER JURISDICTION: 1332, 1331, 1367

Cant waive SMJ because its an issue of federalism, impinging on the state courts.
I.

10

Diversity Jurisdiction ( 1332)

a. History, created to alieve potential for local prejudice. Gets constitutional
support in Article III jurisdiction extends to controversies between
citizens of different states. Jurisdictional Statute 28 USC 1332
b. Complete diversity:
i. No diversity jurisdiction if any P is a citizen of the same state as any
D, no matter how many parties are involved in the litigation.
Strawbridge v. Curtis.

P(NY) sues D(Mich) in NY. In K, they appointed an agent for D to be served process. Ds say not valid agent
because K doesnt say anything about sending her notice, they dont even know who the agent is. Agent put them
on notice. Held: Agent is ok, interest of both parties to effect the lawsuit.

ii. If you dont know the citizenship of one of the parties, then diversity
jurisdiction doesnt apply need to know the parties citizenship.
Capron v. Van Noorden.
iii. Tested at the time the complaint is filed, not when the cause of
action arose.
c. Citizenship
i. State citizenship of an individual (domicile) depends on the
permanent home to which the individual intends to return. Concept
is the same as domicile.
1. Test (Mas v. Perry)
a. Physical presence in new domicile (true, fixed, and
permanent home where you have the intention of
returning when absent from there).
b. Intent to remain there, only needs to be present intent
i. Mental state look at evidence like drivers
license, taxes, bills, job, etc.
2. Tested at the time the complaint is filed
ii. Corporations citizenship (multiple citizenship) defined by federal
statute: every state it is incorporated in and the one state that is its
PPOB.
1. PPOB fact question
a. Executive officers nerve center
b. Physical operations muscle center
iii. Class actions only based on citizenship of the named members.
d. Collusion and Devices to Create or Defeat Diversity Claims
i. Federal court does not have jurisdiction if a party collusively join a
party to invoke jurisdiction of the court. Kramer (1359), case
where assignment of a claim to another party for collection was
collusive. If retained interest in the claim, then it would be a
different story.
ii. If change location must be genuine.
iii. Nominal parties do not court in the diversity equation. Pete Rose v.
Giamatti. 11
II.

11

Jurisdictional Amount In diversity actions need to reach a certain amount in

controversy (in excess $75,000) to bring a claim in federal court, need to assert
this is good faith. This amount excludes interests and costs.
a. Test = good faith and legal certainty: AFA Tours, Inc. v. Whitchurh
i. Defendant has the burden of proof.
ii. Tough standard, makes it easy to bring in federal court for damages.

Giamatti learn Rose is betting on bb games. Tries to disassociate Rose from bb altogether. Rose (Ohio)
Giamatti (NY) and MLB (all bb teams). Giamatte removes to federal court, problem of diversity since one of MLB
is the Ohio bb team. Held yes diversity

b. Aggregation
i. 1 P v. 1 D may aggregate all claims (even unrelated) to meet the
amount.
ii. Two Ps cannot aggregate if they have separate and distinct claims
(example, bus hit and injured 50 people, injuries $50,000 cant
aggregate because they have separate injuries). BUT, if its a single
indivisible harm then Ps may aggregate for example joint
ownership where parties have interest.
c. Counterclaims
i. Cant combine Ds counterclaim with Ps claim to get amount
ii. Compulsory counterclaim doesnt need to meet
iii. Permissive counterclaim does need to meet
III.

12

Federal Question Jurisdiction ( 1331)

a. Constitutional authority from Article III 2 (The judicial power shall
extend to all cases, in law and equity, arising under this Constitution, the
laws of the US, and treaties made, or which shall be made, under their
authority). 1331 is virtually identical, which means that Congress
cannot change the rule have to stay in the arising under confines.
i. Arises under = creates cause of action
b. Federal question must appear in the Ps cause of action so often need to
figure out if federal element is essential to the Ps case.
i. Ds answer or defense is irrelevant
ii. Anticipation of the defense is not a federal question. Louisville &
Nashville R.Co. v. Mottley
iii. Suit must arise under the law that creates the cause of action. TB
Harms Co. v. Eliscu. 12
c. Artful pleading? Coercive suits and coercive D and P???
d. When a federal claim is nested in a state cause of action. I.e. the P can
assert / invoke supplemental jurisdiction only in federal question cases???
i. Cannot sue
1. Merrell Dow Pharmaceuticals, Inc. v. Thompson no private
federal cause of action. 13
ii. Can sue
1. Grable & Sons Metal Products Inc. v. Darue Engeneering &
Manufacturing - federal issue of IRS tax law, even though
state claim need to consider the federal issue.

Federal copyright claim, but no federal question because while 1338 says that copyrights are under federal
jurisdiction our dispute here is a K dispute over the ownership of a copyright, no actual interpretation of the
copyright itself.
13
Suit for birth defects in children after mothers took drugs negligence, tort liability, strict liability. I.e. a suit in
tort. Federal act creates labeling requirement that was violated, the duty element of the tort claim. Federal law is
nestled into the state tort claim.

iii. Grey area of the law right now

IV.

Supplemental jurisdiction: Federal and Nonfederal Claims in Combination

Historical roots of 1367

a. Pendant jurisdiction (federal question?) when P has both federal and state
claim against D (P asserts only in federal question cases?). Can assert
federal jurisdiction over both claims if derive from a common nucleus of
operative fact and are such that a plaintiff would ordinarily be expected
to try them all in one judicial proceeding (power federal court to hear it as
a whole). Gibbs. Can also invoke for a 2nd D if of the same transaction,
w/a state law claim.
i. Court NOT required to hear the claim.
ii. Once determine they have the power to hear it, must consider other
factors to decide if it makes sense to do so (Gibbs factors):
1. State law claim predominates
2. Whether it would require the court to decide a sensitive or
novel issue of state law.
3. Whether hearing the claims might confuse the jury.
4. If federal issues resolved early, only leaving the state claim
for decision. (I.e. can always bring separate in state court).
b. Ancillary Jurisdiction (diversity?) Federal court will consider claim
normally not federal if they arise from the same transaction or occurrence
as the underlying suit and are asserted by a party other than the P. Court
suggests ancillary jurisdiction exercised over compulsory counterclaims,
cross-claims, and third-party claims.
Owen Equipment & Erection Co. v. Kroger: Wife husbands employer for wrongful
death (power lines). Employer Owen (crane operator) that negligence caused
wrongful death. OPPD get summary judgment, K Owen. No diversity between K and
Owen, was based on diversity w/ OPPD (couldnt bring Owen in before). Held: no
federal jurisdiction between K and Owen. Inconsistent with long-standing interpretation
of 1332, allowing her to do something indirectly that should couldnt do directly.
Protecting a strategic P.
1. Diversity Rule does not apply when D impleades, crossclaims, or counter claims; and can go in under supplemental
jurisdiction. Would apply if the P wants to then assert claim
against impleaded D.
Impleader: sue another for same suit, (P (Iowa) D1 (NY), D1 D2(NY))
Cross-claim: Cross between two defendants, P(NY) sues D1(Wa) and D2(Wa), D2 sues
D1)

Counter claim: When counter claim P

D, D

P, same state).

c. The merger of pendant and ancillary jurisdiction, hint that need some kind
of codification. Finley v. United States 14
1. After Finely appear that pendent and ancillary jurisdiction
had converged into a single doctrine that required a 3-part
test:
a. Same nucleus of operative facts
b. Congressional intent behind the statute that granted
jurisdiction
c. Whether court should exercise powers based on Gibbs
factors.
d. Congressional codification of supplemental jurisdiction in 28 USC 1367
i. Contents
1. 1367 A Same constitutional case or controversy as claim
that provides initial basis for original jurisdiction.
2. 1367 B codifies Owen v. Kroger diversity statute.
Prohibits joinder or intervention of persons if inconsistent
with 1332, Class actions do not count.
3. 1367C other reasons why DC might not want to exercise
supplemental jurisdiction
ii. Things to look out for, 1367 B is the narrowing section:
1. Will not have supplemental jurisdiction over claims by
plaintiffs consistent with Kroeger that P use joinder rules to
get around complete diversity.
2. Only applies to diversity cases.
3. Over-rules Finely because if you have case where P USA,
and P D (both from MO) then A is satisfied and founded
on 1331, so rules dont apply in [B].
a. This changes Curtis because dont need complete
diversity and amount in controversy requirements.
iii. Exxon Mobile sets it straight
1. History:
a. Although 1367 wasnt intended to interfere with class
action rules, Exxon interprets it this way.
2. Facts:
a. [1] Exxon dealers file class action against Exxon
Corporation under diversity jurisdiction. Exercise
supplemental jurisdiction over class members who had
not met the minimum amount in controversy
14

Family die when plane hit power line, sue in federal court under FAA, later try and amend the complaint to
include state law claim against the city and utility company as D, amendments not allowed. No diversity. Court talk
about how Congress meant to convey only claims against the US.

requirement. 11th Circuit upheld extension

supplemental jurisdiction.
b. [2] Girl and family sue for damages from Star Kist. 1st
Circuit ruled that the girl, not her family, has right
amount but NO supplemental jurisdiction over family;
improper because original jurisdiction lacks diversity if
one P fails to satisfy the amount-in-controversy.
3. Held:
a. Only 1 P needs to reach amount in controversy, before
this every P had to.
b. Does not apply to diversity requirement, incomplete
diversity destroys original jurisdiction w/respect to all
claims.
iv. Codification of the Gibbs factors Executive Software North
America v. United States District Court. 15
1. Requirements # 1 3 seem to codify Gibbs
2. #4 exceptional circumstances channels the courts
discretion to find new grounds to decline jurisdiction. BUT,
cant dismiss the case w/o giving reason.

15

V.

Removal Jurisdiction must satisfy a and then b, if neither than c.

a. Need original jurisdiction - 1441 a can only remove an action that could
have originally been brought by the P in the federal court.
b. Only the defendant can exercise the right of removal the P cannot remove
on the grounds of a counterclaim. If more than one D then all have to
agree.
c. 1441 (c) D may remove separate and independent federal question
claim. If there are multiple claims or multiple parties under part (c) a
defendant may remove a whole case if it contains a separate and
independent claim or cause of action w/in federal question jurisdiction.
The federal court can retain the whole case or remand the matters not in its
original jurisdiction. American Fire & Cas. Co. v. Finn. 16 To do this look
at formal distinctions between different causes of action, and not factual
relationships. Might want to look back at notes on this.

VI.

Attacks on Subject-Matter Jurisdiction

Employee sue employer for discrimination in workplace. 2 federal causes of action, and 3 state law claims. Court
can exercise discretion to decide if to retain state law cases. 1367 does not restrict the court from looking at Gibbs
discretionary factors. Remanded state law claims but w/no reason.
16
In Finn you have a P (Tex) who sued 3 D (2 from Texas, and 1 NY) over fire and one of the Ds has to pay. Thus
cant use 1441 (a) to remove. Tried using 1441 (c) to remove to federal court. Not separate and independent
because some underlying harm to the P, same fire.

a. Direct Attack
One may challenge subject matter jurisdiction at any time
they want. * Once the gravel falls its done though.
b. Collateral Attack Judgment rendered by a court that lacked subject
matter jurisdiction is void and null, can be challenged later.
i. If nobody argues about personal jurisdiction in the first suit then its
no problem. Durfee v. Duke.
ii. Cant collaterally attack for new lawsuit the PJ of old lawsuit
should have attacked it then. Chicot.
iii. Court reopens case when allowing the judgment to stand would
substantially infringe the authority of another tribunal or agency of
government.
c. Every court has the jurisdiction to decide if it has jurisdiction this goes
with being a court.
VENUE and OTHER TERRITORIAL RESTRICTIONS
I.

II.

III.

17

Introduction - 1391
a. Venue is the 3rd requirement to bring someone into court (in addition to PJ
and SMJ)
i. Distinguished from SMJ SMJ is the power of the court to
adjudicate the mater, venue relates to the proper district. Venue is a
question of convenience.
b. Allocates cases among districts (91) to bear semblance to claim.
c. Statutory
Local and Transitory Actions
a. A Local Action a local action is in district where the property that is
the subject matter of the action is located. Historical roots in England.
b. Reasor Hill Corp. v. Harrison courts change the local action rule. 17
Courts among the states are just as competent to hear claims out of state.
W/ full faith and credit you have to enforce in other states.
1391, venue in civil actions is proper in
a. 1391a, b
i. A judicial district where any defendant resides, if all defendants
reside in the same state;
ii. A judicial district in which a substantial part of the events or
omissions giving rise to the claim occurred, or a substantial part of
property that is the subject of the action is situated.
iii. If there is no district in the US that satisfies (a) and (b), then:

PFS (crop duster that never got paid for destroying the crops)
Hill (chemical manufacturer). Sue in AK, land is MO.

Barton (farmer, didnt pay), Barton

Reasor-

IV.
V.

1. For actions based solely on diversity, a judicial district in

which any defendant is subject to personal jurisdiction at the
time the action is commenced; or
2. For actions not based solely on diversity, a judicial district in
which any defendant may be found.
b. Language of 1391 b Bates v. C&S Adjusters Inc was case where debt
was in PA, move to NY, sent collection notice to PA, forwarded to NY. P
D in NY because substantial part of the events occurred there.
i. Language of substantial part was added to where the events
giving rise to the claim occurred in the amendment.
ii. Point of this case is you dont need much to get venue.
c. Corporations under 1391 c A defendant that is a corporation resides in
any district where it is subject to personal jurisdiction. So it would be
where it was incorporated and the PPOB. (1391c is not a venue statute
simply tells you where a corporation resides common mistake on exam).
1441 (removal statute) if remove under this dont need to meet 1391. 1391
is used in cases where P is initially filing in federal court. 1441 is when file in
state court and want to remove to the federal district court.
Transfer of Venue in Federal Courts
a. Where original venue is proper
i. Section 1404(a) allows transfer to another district where the action
might have been brought even though venue has been properly
laid in the court before which the motion to transfer is made.
1. Hoffman v. Balaski might have been brought = where the
P could have originally sued
ii. Point of this: while venue may be correct some parties or witnesses
might be greatly inconvenienced by the trial. Thus can transfer to
where it might have been brought if SMJ, PJ, and venue is proper.
iii. Forum selection clauses are a factor to be strongly considered in this
case.
b. When transferred the transfer takes with it the law of the transferor forum.
The Supreme Court wants 1404 to be used w/o people taking advantage and
trying to get a different states laws. Ferens v. John Deer Co.
c. Where original venue is improper (1406a)
i. Designed for when venue is improper and the alternative to transfer
is dismissal of the action.
ii. The standard = in the interest of justice. Transfer is more
appropriate than dismissal except for extraordinary circumstances.
iii. The transferee forum must have SMJ and PJ over the D and venue
must be proper.
d. Where original court lacks personal jurisdiction the Supreme Court has
held that the original courts lack of PJ over the D does not affect its power
to transfer a case under 1406a.

VI.

Forum Non-Conveniens court may resist the imposition upon its jurisdiction
even when authorized by letter of general venue statute because sometimes the
P is tempted to force a trial in the place most inconvenient for their adversary.
a. Balancing test from Gulf Oil
i. Private interest of the litigant
1. Access to sources of proof
2. Availability of compulsory attendance of unwilling
(witnesses?)
3. Possibility of view of premises (where accident occurred?)
4. Practice problems that make trials fast and cheap
5. Cant vex
6. ** Unless balance strongly in favor of the , the s choice
of forum should rarely be disturbed.
ii. Public interest
1. Administrative difficulties in courts
2. Burden of jury duty on uninterested citizens, no relation
3. Local interest in having localized controversies heard at
home.
b. Piper Aircraft Co v. Reyno 18 - good example of application of FNC.
Usually a doctrine applied to international lawsuits.
c. Before use this have to have a more convenient forum.
ERIE DOCTRINE

A federal court in the exercise of its diversity jurisdiction, is required to apply the
substantive law of the state in which it is sitting, including the states conflict of law
rules. However, the federal courts are to apply federal procedural law in diversity cases.
I.

18

Before Erie we had Swift v. Tyson 19 - importance was that the Rules of
Decision Act 20 did not require the federal court to follow NY law. The laws
of the several states only refers to statutes / local usages, not judicial
decisions.
1. Problems this created

Small aircraft crash in Scottish highlands during charter flight. Pilot and 5 passengers were killed instantly (all
Scottish). Catch the plane was manufactured in PA, everything else was Scottish.
19
Swift (P) brought diversity suit in federal court to collect on a bill of exchange. Tyson gave bill to Norton who
endorsed it over to Swift in NY. As consideration, Swift cancelled an antecedent debt owed him by Norton. Issue:
was Swifts cancellation of the debt valuable consideration, (i.e. does Tyson have to pay Swift). Ds argument:
New York law applies, since bill executed in NY and no federal statute. Under NY this consideration was
insufficient.
20
Rules of Decision Act: The laws of the several states, except where the constitution, treaties or statutes of the
United States shall otherwise require or provide, shall be regarded as rules of decision in trials at common law in the
courts of the United States, in cases where they apply.

a. Forum shopping, allowing the P to choose a

substantive rule of law that was in favor of their cause.
Black & White Taxi v. Brown & Yellow Taxi. 21
b. Also does not acknowledge that the law derives its
force not from its inherent rightness (Swift) but from
the fact that the authorities empowered to make such a
rule have made it. No federal common law
developed.
II.

Marks a change in the substantive law. The federal

The Erie Decision 22
court must apply state law on the substantive issue. Problem encountered
when courts consider procedural issues.

In diversity cases federal courts must apply the law that would be applied by the courts of
the state in which they sit. They are not free to decide for themselves the right rule.
Rather than create general common law, their job in a diversity case is to apply state
common law. State law reigns supreme in broad areas where the law is largely judgemade because there can be no other law. (Hanna v. Plumer).
Substantive is fine, problem when get into procedural. How do we know when to apply a
federal law?
Which issues are governed by Erie and which issues are NOT the Substance /
Procedure problem. Cant get rid of federal procedure or would totally eradicate the
FRCP.
III.

21

Is there a Federal Directive On Point (FRCP)?

a. If there is a federal law on point then it is valid. Hanna v. Plumer. A
FRCP is valid if it is arguably procedural.
i. Exception: If it violates the Rules Enabling Act (rules will not
abridge, enlarge, or modify any substantive right). If you dont
have a rule on point then use the Erie doctrine. Thus, courts can
adopt any Federal Rule that is arguably procedural. [Steep uphill
battle to argue rule isnt procedural - lots of constitutional authority
for the Federal Rules of Civil Procedure: Congress, Agency, and
Supreme Court].

BY want to enforce a K w/ railroad in Kentucky, KY does not enforce such K. BY reincorporated in Tennessee,
creating diversity w/D BW cab. Brought suit in federal court to enjoin BW from interfering w/K. Ky federal court
held the K was enforceable, enjoined the D. SC upheld, saying that federal court under Swift had authority to reach
its own conclusion on the common law issue.
22
Tompkins lost an arm when hit by a projection for an Erie RR train while walking on a pathway along the tracks,
likely the cause of RR negligence. Penn. law was willful and wanton standard, no evidence of this. Federal
decisions said there was a duty of due care. Tompkins recovered in federal court. Supremes reversed with this
decision, applied state law.

b. Be careful here sometimes hard to determine if there is a federal directive

on point. Walker v. Armco Steel (Rule 3 says when case commenced, but
NOT interpreted for when SOL starts to toll, just timing statute).
i. Some read rules narrowly to avoid direct conflict and use the state
law.
1. Walker v. Armco Steel
2. Gasperini v. Center for Humanities, Inc. 23 no conflict with
FRCP 59 and strict state standard of review. Since Rule 59
doesnt state standard it can accommodate both sides.
IV.

23

If there is NO Federal Directive On Point, is the issue Substance or Procedure?

a. Some clearly established situations
i. Statutes of limitations and rules for tolling statutes of limitations are
substantive for Erie purposes. Therefore must follow state law.
Guaranty Trust Co.
ii. Choice of law rules are substantive. Klaxton v. Stentor Electric
Manufacturing.
iii. Elements of a claim or defense.
b. Law is unclear in other situations, apply the tests
i. Outcome determination issue is substantive if it substantially
affects the outcome of the case. Guaranty Trust Co (SOL, for the
policy reasons of Erie, doesnt come out and say
substance/procedure).
1. Problem almost anything can be outcome determinative.
ii. Balance of interests court weights whether the state or federal
judicial system has the greater interest in having its rule applied.
Bryd v. Blue Ridge. 24
1. Rule: When there is a countervailing federal policy to
uniformity of diversity cases, such as here the constitutional
right to jury trial, then the Erie policy of maximizing
uniformity of outcome should yield to the federal policy of
broad availability of a jury trial. [Weight state interest (none)
v. federal interest (jury trial)].
iii. *** Forum shopping deterrence follow state law on the issue if
failing to do so would cause litigants to flock to federal court.
Hanna v. Plumer. Whether federal procedure is outcome

Case where the jury lost the slides, excessive jury verdict. NY can re-examine jury verdict size, 7th Amendment
says wont reconsider jury finding of fact. Deviates materially vs. shocks the conscience standard.
24
Issue: Should the judge or the jury determine the Ps status as an employee of D when the state says question
goes to the judge, federal sends it to a jury. Held: Employee issue not bound up in substantive law (Erie), but was
merely a form and mode of enforcing (procedure), federal court was not constitutionally compelled to apply state
practice.

determinative must be viewed in light of the policies underlying

Erie: to prevent forum shopping and inequitable administration of
the laws.
V.

Ascertaining State Law

a. States highest court
b. If no decision, determine what the decision the highest court of the state
would reach.
i. Some states have certification procedures federal court certify
thorny issue to the state supreme court.
1. Lengthy and expensive diversion
2. Increases state Supreme Courts workload
ii. Take into account other jurisdictions / changing law in making
decision. Mason v. American Emory Wheel Works. 25

VI.

A Framework for Analysis

a. Conflicts between a Federal Constitutional Provision and State law
Constitution is the supreme law of the land
b. Conflicts between a Federal Statute and State law Federal statutes are also
the supreme law of the land if they are valid. Ok if fall between substantive
and procedure as long as they are rationally capable of classification as
either. If arguably procedural then youre ok.
c. Conflicts between a Federal Rule and a State law FRCP applies if it is
valid (Hannah), i.e. the Rule is rationally capable of classification as a
procedural regulation.
d. Conflicts between a Federal Judicial Practice and State law -- ? Erie says
the federal judicial practice must fall.

VII.

Choice of laws forum state law to apply Klaxon v. Stentor Manufacturing

Co. (1941). Plays into goal of deterring forum shopping.
PLEADING

Pleadings serve the function of giving notice, the process is not about surprises.
Dioguardi v. Durning. 26 If cant get into court with pleadings then never will, one bite at
the apple notion.
I.
25

Complaint 8(a)

P from MI sue RI company when their wheel exploded in his face. DC dismissed. Apply MI law where accident
occurred, MI case that said need privity of K (P didnt have it). P argue the law is changing.
26
Very cryptic complaint written by P himself w/o lawyer about not getting price at bidding auction for tonics.
Claim looks like conversion so the judge allows it.

a. Contents:
i. Statement of the grounds for SMJ
ii. Short and plain statement showing entitled to relief
iii. Demand for judgment.
Garcia v. Hilton Hotels (1951) p.522 A complaint sufficiently pleads a right to relief
when it states enough facts to reasonably assume that the essential elements of the claim
can be proven at trial. This is even if the P does not explicitly allege every element of his
claim (i.e. slander claim failing to explicitly allege publication).
American Nurses Assn v. Illinois (1986) p.544 A multiple-charge complaint is neither
dismissible nor invalid because it includes extraneous facts that do not state a claim in
addition to stating a valid claim; a complaint does not fail for merely being confusing or
including invalid claims with valid ones; the purpose of federal pleading rules is not to
eliminate all imperfectly written complaints but only those which fail to state any valid
claim at all. Different story if violates the law.
b. Does not require detail w/exception of FRCP 9:
i. 9(b): fraud or mistake
ii. 9(g): must give claims for specifics for special damages.
c. FRCP 11: Requires attorney to sign all documents / sanctions
i. Certify the pleadings are not frivolous (Shurowitz polish immigrant
case)
ii. Have 21 day safe harbor period to w/draw frivolous claim. If P does
nothing then D can file a motion. Hadges v. Yonkers Racing Corp.
1. An attorney may rely on objectively reasonable
representations of his client in order to avoid Rule 11
sanctions.
II.

III.

Pre-Answer Motions Rule 12(b) gives different defenses that can be raised
a. Can raise SMJ at any time, other defenses certain time limits on filing.
Among them is motion for dismissal for failure to state a claim upon which
relief can be granted.
Answer
a. Must contain denials or admissions and any affirmative defenses
i. Specific denial or admission of each averment
ii. General denial w/ specific admissions to certain averments
iii. Failure to deny is an admission
iv. Raise affirmative defenses in Rule 8(c): (SOL, fraud, res judicata)

Zielinski v. Philadelphia Piers (1956) Case where D at first said he did it, then took it
back. A general denial is not valid if any allegations being denied have previously been
admitted by both parties as being true. sued for injuries; after being served,

answered that they were ; later it was revealed that was not the defendant at the
time of injury b/c forklift had been sold, but not rebadged; later denied the allegations
of s complaint; court held that a general denial is ineffective when some of the claims
denied are true and not at issue; in such a circumstance, must make a more specific
answer; a general denial implies that was not even injured; 2 policy reasons for this: (1)
SOL will run on , depriving him of any opportunity for redress; (2) when a knowingly
ineffective answer filed after s SOL has run, an allegation of agency will be instructed
to the jury as presumptively admitted by both parties for the purpose of litigation.
made a general denial when they should have made a specific denial under Rule 8-court
used Rule 8 violation as a way of sanctioning
Ingraham v. United States (1987) An affirmative defense will not be saved for appeal
unless it is raised at some point during the pleading or trial stage before judgment is
passed; 2 s were awarded $1.3 mln and $4.2 mln respectively for med mal by an Air
Force surgeon; U.S. appealed both jgmts on the grounds that they exceeded a $500K cap
set by TX state legislature; CA5 held that an affirmative defense must be raised at some
point before jgmt is passed; affirmative defenses must be pleaded in a timely manner to
prevent an unfair surprise to a by raising an unexpected defense; if s knew of the
statutory cap in this case, they could have challenged the constitutionality of the cap or
argued their injuries were not subject to the cap.
Taylor v. United States (1988) A does not waive the right to raise a statutory limit of
damages on appeal if not raised in the pleadings; tough to reconcile w/ Ingraham; to hold
otherwise would unrealistically require s to anticipate awards in excess of the statutory
limitation even when they were not requested by the ; even if does not ask for
damages above the cap, should be aware of the cap b/c the court may not be aware of
the cap being on the books.
Owens Generator v. Heinz (App. p.21) Erie doctrine as applied to pleadings. D moves
to dismiss complaint based on fraud. DC held that federal law did not require complaint
to set forth facts of fraud to w/stand motion to dismiss. Motion denied. In state court
have to plead discovery of fraud and reasonable not to discover earlier v. federal court
says only plain statement justifying relief (dont need facts). Since decided before
Hanna, need to give notice of reasonable discovery. After Hanna, only need to go with
8(c) which is a pleading rule? Very confused with this case.
b. Counterclaims claims that the D may have against the P that arise out of
the same transaction or occurrence as one of the Ps claims is compulsory
counterclaim and must be pleaded or it will be barred.
IV.

Amending the pleading: Rule 15 a pleading may be amended once before a

responsive pleading is served, or if not responsive pleading is required, w/in 20
days of service of the pleading. Thereafter, a pleading may be amended only

by the written consent of the adverse party or by leave of the court upon
motion. Court also be implied consent. Moore v. Moore (child custody
case) 27 . Leave of the court is freely given when justice so requires. Beeck v.
Aquaslide N Dive Corp. 28
a. Relation back dates back to the date when the original pleading was filed
if the conduct, transaction, or occurrence set forth in the amendment was
set forth or attempted to be set forth in the original pleading. Worthington
v. Wilson. 29
i. This is 15(c) Amending after the SOL has run, if a party seeking to
amend is entitled to relation back, it is treated as though it were filed
before the SOL expired.
1. (c)(2): Can be amended after SOL runs to add new claim
2. (c)(3): Can be amended after the SOL runs to join a new D.
b. Changing party an amendment changing the party or the naming of the
party against whom a claim is asserted relates back if the amendment
concerns the same conduct, transaction, or occurrence as the original
pleading AND if, within 120 days after filing the compliant the party to be
brought in by amendment:
i. Has received such notice of the action that she will not be prejudiced
in maintaining her defense on the merits; and
ii. Knew or should have known that, but for a mistake concerning the
proper partys identity, the action would have been brought against
her.
JOINDER
I.

27

Joinder of parties
a. Compulsory joinder persons NEEDED for just adjudication (Rule 19)
i. When its compulsory:

15(b) when issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be
treated in all respects as if they had been raised in the pleadings.
Father sues for custody. After trial, mother motion to conform pleadings to the evidence and for attorney fees, court
grants. She never directly cross-claims for custody, assumed. I.e. you can try things beyond the scope of the
pleadings. Pleadings only get you into trial. Can impliedly consent to try things father impliedly consent to
custody being argued w/ child support.
28
15a says you may amend the pleadings by leave of court and leave shall be given when justice so requires.
Standard for appeals review = abuse of discretion by the lower court. B injured using waterslide. Sued Aqua, they
admitted, later amended to deny when Prez went and looked at the slide and said it wasnt theirs. Court let them
amend. Court dismiss case. Court allowed amendment here because there is no bad faith here, no negligence,
furthers justice. Allowed this even though P lost chance to sue because the SOL had run.
29
was injured by (cops), sue for Civil rights violation named three unknown officers in his compliant. After
SOL expired he specifically name the officers; IL rule would allow this sort of amended complaint; FRCP 15 did
not allow at the time because there was no mistake concerning the proper party and FRCPs always win in conflicts
with state procedural laws; the new standard of the rule would have allowed to amend b/c the new actual was
given notice within 120 days of the filing of the complaint and s even concede this, but this is not use to here b/c
it was not in effect at the time.

a. Complete relief cannot e given to existing parties in

her absence.
b. Disposition in her absence may impair her ability to
protect her interest in the controversy, OR
c. Her absence would expose existing parties to a
substantial risk of double or inconsistent obligations.
Note SC has held that joint tortfeasors subject to joint and several liability is not a
person needed for just adjudication.
ii. Must be joined if possible if a party needed for just
adjudication is amenable to process AND her joinder will
not destroy diversity or venue, she must be joined.
iii. Where joinder is impossible If joinder is not feasible, the
court must decide whether the action can proceed in the
partys absence or must be dismissed. The court will
consider the following factors:
a. Whether the judgment in the partys absence would
prejudice her or the existing parties.
b. Whether the prejudice can be reduced in shaping the
judgment.
c. Whether a judgment in the partys absence would be
adequate, and
d. Whether the P will be deprived of an adequate remedy
if the action is dismissed.
Provident Tradesmens Bank v. Patterson Facts: Auto-accident when driver of the car
is not its owner. Insurance company will have to pay if the owner gave permission
wont pay if the owner didnt give permission. Issue: Is the owner of the car an
indispensable party? Need to look to 19(a): 19(a)1 persons absence complete relief
cannot be accorded among those already parties (yes, hes the only one with the money).
19(a)2 person has such an interest that disposition of the action in their absence will
either (i) Impair or impeded their ability to protect interests, or (ii) Leave those already
parties into risk of incurring double obligations. This case would be under 19(a)2(ii)
because if Ps sue Dutcher, he can sue insurance company for his losses, and the insurance
company will incur double liability. Didnt get brought in originally because owner
would ruin diversity, little chance it would come to insurance issue above.

b. Permissive joinder (FRCP 20) P can sue multiple D if criteria are met.
(* Note does not require the P to sue all D, its a choice).
i. Requirements

a. Some claim is made by each P against each D relating

to or arising out of the same series of occurrences or
transactions, AND
b. There is a question of fact or law common to all the
parties (ex, common for all Ps in car accident to join
together).
ii. Jurisdiction
a. Must be complete diversity and each claim must
satisfy the jurisdictional amount (unless common
undivided interest)
II.

Joinder of Claims
a. Common law joinder of claims

Common law joinder (Harris v. Avery): Harris arrested Avery w/no process, had cause of
action for slander (case) and false imprisonment (trespass) which could not be united
because they are not part of the same form of action. The P may unite several causes of
action, whether legal, equitable, or both, when they arise from the same transaction or
transactions connected with the same subject of the action.

b. Issue and claim preclusion

Issue and claim preclusion (claim preclusion makes joinder mandatory, when the rules do
not) Rush v. City of Maple Heights. A P cant split damages. P bring two suits for
motorcycle injury one for personal injury, one for property injury. Decide property
injury that the D is liable, so just have personal injury trial for damages. Holding: Cant
split causes of action; new rule in Ohio. Single cause of action rule. Hypothetical: Have
plot of land: B C B. A starts a fire and damages all three. Must B sue for both
parcels at once, or can he sue for each parcel separately? One transaction must sue for
both at the same time. If only sue for one then you lose the right to sue on the other.

c. Policy of FRCP permit the adjudication of all claims between the

parties and all claims arising out of a single transaction. A P can join
any number and type of claims against a D; where multiple Ps or
multiple Ds are involved, it is essential only that at least on of the
claims arise out of a transaction in which all were involved.
d. Successive claims - ?
e. Jurisdiction when jurisdiction is based on the diversity of citizenship
between the P and D, the P may aggregate all claims she has against the
D to satisfy the jurisdictional amount. If federal question, then nonfederal can be attached as pendant jurisdiction only if same case or
controversy.

f. See Class Actions section

g. Counterclaims (FRCP 13) allows a defending party in a suit to assert
claims back against the P.
i. Two types of counterclaim:
a. Compulsory (FRCP 13a) if Ds counterclaim arises
from the same transaction or occurrence as the claim
against him, it is compulsory, and must assert in
original action or lose it forever.
i. 13a is unnecessary because common law creates
compulsory counterclaim, if you dont bring it
you will be prevented in the future. Mitchell v.
Federal Intermediate Credit Bank. 30
b. Permissive (FRCP 13b) claim that is completely
unrelated to the original claim.
ii. Compulsory Counter claims + claim preclusion
a. Cant split your theories, for efficiency sake
b. Cant use a defense as a shield and then as a sword.
c. The size of a transaction for the purposes of a
compulsory counterclaim.
i. Courts interpret very broadly, if have two
contracts you want to sue on need to bring them
both in or will be forever barred from it.
Heyward-Robinson Co.
d. 13a and 1367a have the same standard
e. If P D in fed court, D cannot P in state court.
Precluded.
f. D can counter-claim even after a SOL has run. think
of reasons why we have SOL, not hurt by this.

h. Cross-claims (FRCP 13g) cross claim is a claim asserted by one party

against a co-party. Has to arise out of the same transaction. Makes
joinder optional, cross-claiming party can sue on their own time if they
want. LASA v. Alexander.

i. Impleader [Third Party Practice] (FRCP 14) a defending party may

implead someone who is not a party who is or may be liable to the
defending party (now 3rd party P).
30

D (bank) P (potato grower) for note worth ($9000), court found for P; then P D to do an accounting (hes
owed extra $9000), court found for D. Ps 2nd suit was barred because he should have brought the claim in the first
action for recovery.

A defending party may implead a nonparty who is or may be liable to her for any part of
a judgment that the P may recover against her. If the indemnity claim by the D party
against the 3rd party D does not meet the requirements for diversity of citizenship or
federal question jurisdiction, it will invoke supplemental jurisdiction because such claims
will meet the same transaction or occurrence requirement of supplemental jurisdiction
and are asserted by a party other than the P. Thus, the D party may assert an indemnity
claim in federal court even if there is no diversity between the D party and 3rd party D
and 3rd party claim is based on sates law. Venue need not be proper for the 3rd party D.
i. Is or may be liable (Jeub v. BG Foods) 31 can be made a
party even if you dont owe anything yet, can be tried if
might owe in the future.
ii. Supplemental jurisdiction issues:
Guaranteed Systems v. American National Can Company read this case for good
summary of the law. Facts: GS ANC; ANC counterclaim GS; GS try and implead
HydroVac (subcontractor). Case originally in federal court from diversity, and Hydro is
not diverse. Compare this to the case of Owen Equipment. 1367 removes the case, says
that GS cant bring in Hydro 1367 is imprecise, wasnt meant for case when had a real
claim.

j. Intervention (FRCP 24) Intervention of right is available whenever

the applicant claims an interest in the property or transaction that is the
subject matter of the action, and the disposition of the action w/o her
may impair her ability to protect that interest (unless her interest is
already represented). The stare decisis effect of the judgment may be
sufficient interest to authorize intervention of right. No supplemental
jurisdiction in diversity action.
Smuck v. Hobson: Facts: School board civil rights desegregation suit, SB loses and
doesnt appeal, former superintendent and former school board member try to appeal
unsuccessfully. Parents appeal successfully. Parents interests were represented by the
board (24(a)), but when board doesnt appeal their interests are no longer represented.
Parents have different interests that the school board. Problem if give credence to some
parental opinions, then all are going to want to be heard. Everyone will want to
intervene. Parties could lose control of the case. Tension between 24a and 24b trial
judge has a lot of discretion to let those come in b; a has a lot less control.

31

Facts: J BG (ate bad ham in their restaurant). BG implead Swift, making them a 3rd party (they were
manufacturers of ham). Swift should be liable to indemnify and reimburse BG Foods for the whole amount of
recovery to Jeub. Issue here: BG didnt have to pay anything yet to J and J didnt bring Swift in. Swift doesnt owe
anything.

CLASS ACTIONS
I.

Class Action Practice Rule 23(a) and (b) as prerequisites

a. Rule 23(a) representatives will be permitted to sue on behalf of a class if:
i. Class is so numerous that joinder of all members is impracticable.
(~ 25 member cut off).
ii. Questions of law or fact common to the class
iii. Named parties interests are typical of the class
iv. Named representatives will ensure the fair and adequate
representation of the interests of absent class members.
b. Rule 23(b)
i. 23 (b) (1) Prejudice Class Actions (when individual actions might
cause prejudice that can be avoided by using the class action device).
These are mandatory in the sense that the absentee cannot opt-out.
1. (A) prejudice to the nonclass party (the )
a. Incompatible standards of conduct for the - position
of total uncertainty not knowing how to treat the class
as a whole. (Not about paying damages to some
claimants and not others).
b. Example: Voting rights registration dispute, some class
members win, some lose in individual suits, election
board doesnt know if they should register all
individuals (all class members) similarly situated.
2. (B) prejudice to other class members
a. Substantially impair the ability of class members to
protect their interests.
b. Example: Multiple claimants to a limited fund
ii. 23 (b) (2) Primary application in injunction suits such as civil
rights, employment discrimination, environmental cases where the
goal is to change the s behavior or policy prospective and not
individual compensation.
1. Theory: injunctive class is cohesive, notice is not deemed
essential.
2. s conduct need only be generally applicable to the class.
3. Doesnt need to be damaging or offensive to all class
members.
a. Example: suit for change school uniform (even though
some might like it or not care).
4. Problem arises under here when people sue for injunction +
damages; less procedural safeguards here than B3
iii. 23 (b) (3) used for damages actions, including mass torts.
1. Prerequisites

a. (Predominate) Question of law or fact common to

class members must predominate over any questions
effecting individual class members.
b. (Superiority) Courts must find that a class action is
superior to other available methods for fair and
efficient adjudication of the controversy.
2. Additional procedural protection
a. Mandatory notice
b. Right to opt-out
3. Factors considered when deciding superiority and
predominance
a. The interest of individual control
b. The extent and nature of litigation elsewhere on the
same subject
c. The desirability of having the whole package in court
d. #4 is the key: difficulties likely to be encountered in a
class action.
i. Size of the class
ii. Number of class members who seek to
intervene and participate.
iii. Onerous ness of Rule 23(c)(2) notice
requirement.
4. P & S not applied with uniformity; key to resolving this lies
in ascertaining whether the efficiency and economy of
common adjudication outweighs the interest of each class
member may have in individual adjudication.
a. Superiority = compare class action with other
adjudicative possibilities.
c. Certifying a class deciding at an early time that action is appropriate for
class action.
i. Court must define class claims, issues, or defenses in certifying a
class.
1. Across the board notion if a company discriminates the
effect of the discrimination appear across the board. General
Telephone Co. v. Falcon. 32
2. Need to name class accurately and think if the class
representative is named correcting in view of the class.
a. Holland v. Steele

32

(Federal certification requirements). Employee was passes over for promotion. Sued as a class for discrimination
for all employees and applicants who had yet to be hired. Held: shouldnt have certified the class.

Civil rights action where P (detainee) seeks an order prohibiting the D (jail) from
restricting plaintiffs access to counsel and to the courts in civil matters. Class = all who
are or will be detained at the jail division between detainees and sentences. Common
questions of law or fact problem is that the jail has people who are detained before
trial and those that have been sentenced. How do we know if the jailors let some counsel
in and others not? Typicality different constitutional provisions for the rights at stake.
b. Causey v. Pan American World Airways, Inc.
Plane crash on Bali. Son suing for wrongful death of parents. Class action = heirs
personal representatives, next of kin of all other passengers killed in the crash. 96
passengers, only 17 from the US. 23(a) is satisfied (1) numerosity w/ ~ 96; (2)
common questions of law or fact w/wrongful death; (3) typicality because others bring
wrongful death; (4) representatives good lawyers. 23(b) (1,A) inconsistent
adjudications isnt a problem, just have to pay out sometimes, other times not. Possible
to comply w/ all the orders. (1,B) no other impact on other Ps they will still have
their day in court. Have to bring under 23(B)(3) if you bring a mass tort action. 4
elements see rule. [A] interest in some members of the class controlling own
prosecution weigh this against efficiency goals. [D] causes the most difficulties
difficulties likely to be encountered in the management of a class action. For example,
choice of laws.
ii. Court must appoint class counsel.
d. Efficiency considerations, Castano v. American Tobacco Co. Do you
certify the largest class ever or risk 1,000,000s of lawsuits?
Largest class attempted for all nicotine smokers, dead, alive, and families. Fraudulent
failure to inform consumers that nicotine is addictive. Held: Will not certify the class
because of predominance and superiority, manageability problems. Says its an
immature tort dont know about addictions, some people addicted others not, individual
issue on how you tell. Judicial blackmail so many people involved force the D to settle.
This case: new tort, let it develop in the lower courts to learn how to handle it. Notice is
a problem.
e. Notice
i. Required Notice as a matter of due process, see below (check on
adequacy of representation and option to opt out)
1. Only for common question suits under B3, so that class
member can opt out.
2. Requirements (must be intelligible so recipient can make
informed decision):
a. Nature of the action

b. Definition of the class

c. Class claims, issues, defenses
d. Binding effect of the class judgment
i. All members of a class will be bound by the
judgment rendered in class action except those
under 23B3 who opt out. Members under B1
and B2 cannot opt out.
ii. Discretionary Notice B1 and B2

33

II.

Due Process considerations

a. Cant have class represent two diametrically opposed positions. Hansberry
v. Lee 33 . Need this because class actions are an exception to the rule that
you are no bound by judgment unless you are a party to the lawsuit.
i. Not good enough that the class purports to represent you.
ii. No binding if there is antagonism in the class need to represent
true interests.
iii. Way to get around this is bring in D class of all who oppose.
b. Notice requirements, representing class members that are away:
i. Binding on B1 and B2 even though they dont get notice and dont
have an opt out right (if there was would be inconsistent w/theory
behind them).
ii. Notion of homogeneity if people knew here they wouldnt add
much.
iii. B1 and B2 have procedural safeguard of adequacy of representation.
(B3 does not have this).
1. Review more than once: first by court certifying, second by
court called to evaluate the binding effect of the judgment.
Gonzoles v. Cassidy.
iv. Problem: What about b2 injunction + money? There is a b3
element about the money, maybe should get notice for that. But b2
is about injunctive relief, does provide for money damages at times.
c. Nobody is forced to intervene. A party seeking a judgment binding on
another cannot obligate the latter to intervene in a suit to which that person
is not a party. Martin v. Wilks (ff case).

III.

Diversity Jurisdiction (Federal questions are no problem)

a. Citizenship = only the citizenship of the named representatives of the class
b. Amount in controversy = only need one class member to satisfy the
$75,000 amount in controversy.

Racially restrictive covenant issue over whether the neighbors can enforce it. Earlier lawsuit upheld the
covenant. P not party to first lawsuit. Claim earlier case binding on P. Says that P is member of class of all
landowners and successors. Challenges earlier fraudulent action (how he got into court) saying not member of the
class.

i. History of amount in controversy rule

1. Zahn May be aggregated only w/joint claims BUT the more
common case the claims if each class member must meet the
jurisdictional minimum in diversity of citizenship cases.
2. Supplemental Jurisdiction Statute 1367 dispute over
whether this over-ruled Zahn between the circuits.
3. Exxon Mobile Corp v. Allapattah Services Inc. overruled
Zahn, Nothing in the text of 1367 withholds supplemental
jurisdiction over the claims of s certified as class action
members pursuant to Rule 23. Need one well pleaded
complaint that satisfies the amount in controversy.
4. Congress new minimal diversity statute extends federal courts
to any class action where any D is from a different state as
any single P and the amount in controversy exceeds 5 million.
c. Personal jurisdiction there is a due process / minimum contacts
requirement that must be met for the assertion of personal jurisdiction need
not be satisfied to bind absent members of the P class in 23B3 suit who
choose not to opt out. Phillips Petroleum v. Shutts. This allows to bind P
class members even though they have no contact at all w/the state they
are consenting.
i. This does not apply to D class.
ii. Some tension is 23 trying to get rid of PJ? No, must have PJ.
Disclaimer of Shutts: our holding today is limited to those class actions which seek to
bind known plaintiffs concerning claims wholly or predominantly for money judgments.
Doesnt apply to equitable class actions relief OR defendants class. So would this apply
to b1 claim when also ask for money? Due process is infringing and imposing notice
requirement.
Notice and adequacy of representation are procedural. They balance each other out.
Dispute in Shutts if you give enough procedure then dont need personal jurisdiction
really saying that minimal consent is ok because of all the procedures. Dont think
because you have a lot of procedures you can do away w/substantive element (Pennoyer
federalism). If Shutts requires consent then change whole scope of b1 and b2 way it
has shaken out is that people only worry about money damages.
IV.

Settlement Classes court must approve the settlement of a class action.

a. The class must satisfy the requirements for certification under 23a and 23b
before a court can approve a class settlement. Amchem Products v.
Windsor 34 .
i. Has become a tool for D class actions, do this to favor the D.
b. Notice must be given to all members of the class in a matter as directed by
the court.
c. Limited fund cases have limitations: Ortiz v. Fibreboard Corp.
i. Limited fund: lawsuit cant create a limited fund, it has to be over a
limited fund (trust, mineral deposit). Must be fixed before hand.
ii. This and Shutts limit the use of B1 class actions tremendously. They
wont use B3 because costs way too much to give notice.

34

V.

Mass Tort Litigation Tension here because cant do B3 (too expensive), and
cant do B1 (need limited fund first), wind up w/ system where wrongdoer is
punished but those injured make very little. Problem of race to the bottom
(judge, etc. in coohots and lawyer makes the big bucks). One part of the
problem is just that the system doesnt work for these issues. Dalkon Shield. 35

VI.

Preclusive Effect
a. Difference between an individual claim and a class claim. Cooper v.
Federal Reserve Bank of Richmond (Baxter).
i. While a judgment in a class action is binding on class members,
there is a difference between an individuals claim of discrimination
and a class action alleging a general pattern or practice of
discrimination.
ii. You can have instances of individual discrimination but not class
wide discrimination. Interveners want to show if there was
systematic discrimination.
b. Preclusive effect of a class action bars: (1) class members from bringing
another class action against the Bank alleging a pattern or practice of
discrimination for the relevant time period; (2) precludes the class members
in any other litigation w/the Bank from relitigating the question whether the
Bank engaged in a pattern and practice of discrimination. Not dispositive
of individual claims.

Asbestos illness case, Ds use it to their advantage. Ds negotiate settlement w/class on condition they promise to
sue again for everyone who hasnt suffered injuries yet (future class). Problem - Classes are antagonistic too each
other those that want payment now and those that want payment in the future. So doesnt meet 23a and 23b. *
Note, use B1 because there is no opt-out right and you dont want individual members suing you independently
originally use B3 to make P lawyer pay for notice, but now B1 is better. Plus there is no personal jurisdiction either
how would you get consent from people who havent shown symptoms?
35
Birth control that caused terrible infections in women, set up 2.4 billion trust fund for people to make claims and
be paid. Were paid inadequately less than they should have for their injuries (some lose children). Problem = the
system doesnt work, too many injuries, people need to be paid.

c. Doesnt frustrate the purpose of Rule 23 class action device was

intended to establish a procedure for adjudication of common questions of
law or fact if require every class member to intervene and litigate merits
of individual claim then would get unruly.
d. Procedurally:
i. Class members dont need to bring individual issues w/ the class
claim.
ii. Different rule of claim preclusion for class actions: P alone cant
divide up claims, any mandatory joinder of additional claims in class
action scenario.
ADJUDICATION W/O TRIAL
I.

36

Summary Judgment Rule 56

a. Standard = If from the pleadings, affidavits, and discovery materials, it
appears that there is no genuine issue of material fact and the moving party
is entitled to judgment as a matter of law. [FRCP 56].
b. Affidavits
i. When a motion for summary judgment is supported by affidavits,
etc., an adverse party may not rest upon mere pleading allegations or
denials. His response must be shown by affidavits or otherwise and
must set forth specific facts showing there is a genuine issue for trial.
If he does not so respond, summary judgment if appropriate, will be
entered against him. Lundeen v. Cordner. 36
1. Witnesses gets sticky, best if unbiased. If undermine
credibility of witness should go to trial.
ii. You cannot rely on pleadings once the D files an affidavit. Cross v.
United States.
c. When there is a mental element, then summary judgment is not appropriate.
Cross v. United States. 37
d. Has to be an issue of fact IN ADDITION TO the party being entitled to a
judgment as a matter of law. Adickes v. SH Kress & Co.
i. Here the claim is that there is conspiracy because the police officer
went into the store before the kids + teacher went in. Court held no
grounds for summary judgment because the pleadings didnt claim
there was a police officer in the store (whole complaint is predicated
on the cop being in the store). No issue of fact if the cop wasnt in

Facts: First wife is suing the insurance company who gave dead husbands insurance money to second wife. First
wife wins automatically (her name on the policy) unless 2nd wife shows affidavits. She does, 1st responds he really
loves his kinds not an issue of material fact.
37
Facts: Cross deducted money spent on European trip in pursuit of profession IRS says you can deduct in
pursuit of trade but general travel expenses not deductible. Unclear whether expenses here are deductible. Cross
puts forth affidavit. Need to find out from him what his mental state was when he made each expenditure.

the store. Leaves you now with just a claim that there is no
conspiracy. Denying a legal conclusion.
e. The party moving for summary judgment, and what they need to prove.
Celotex Corp. v. Catrett.
i. When the P moves for summary judgment:
1. Question: can Ps evidence satisfy their case: P has to have a
genuine issue of fact and evidence to overcome the burden of
proof.
ii. When D moves for summary judgment
1. Put on evidence to negate the prima facie case
f. Evidence put forth needs to be for a reasonable theory. Matsushita
Electric.
i. If you put forth evidence it has to go towards a reasonable theory.
The evidence in this case made no sense that Japanese TV market
trying to create a treasure chest in Japan by charging high prices
there. Makes no sense, no economic motive to do this, trying to use
this like a 12(b)(6) motion.
ii. It was not a dispute over the facts, just a question of the inferences
drawn from the facts.
II.

Dismissal of Actions Rule 41

a. Voluntary dismissal A P may dismiss his action without prejudice as a
matter of right only before the defendant files an answer or a summary
judgment motion, or by stipulation of all parties. Otherwise, a dismissal
without prejudice can be taken only with leave of the court. Whether to
allow such a dismissal is in the courts discretion. McCants v. Ford Motor
Co.
b. Involuntary dismissal Court will dismiss on its own if the lawsuit
becomes dormant. If you dont put forward a case then the P will lose. If
you fail to prosecute.

III.

Default Judgments Rule 55

a. Rule 55
i. 55a if D refuses to respond to the summons then can get entry of
default under 55a
ii. 55b
1. If its a fixed amount then under 55(b)(1) the clerk can enter
the judgment, not even the judge.
2. If uncertain sum (ex: auto accident) then under 55 (b)(2)
then P has to demonstrate evidence of his damages.
b. Coulas v. Smith have to fail to plead or otherwise defend, if defend in
earlier motion then not a default judgment under Rule 55. Rule 55 is used
to hurt the absent defendant. In the case of Bass v. Hoagland the Ds

lawyer disappeared, but the court would not let Rule 55 apply to help the
absent party.

THE TRIAL STAGE

I.

38

Right to a Jury Rule 38

a. Constitutional authority 7th Amendment preserved the right to a jury trial
in federal courts of facts in all suits of common law where the amount in
controversy exceeds $20. The distinction is historical and turns initially on
whether the claim or relief was available at law or in equity in 1791. The
Supreme Court has demonstrated a clear preference for jury trial in
doubtful cases by holding some of the following points.
i. (Legal clean up doctrine) If have both legal and equitable claims
that are joined in one action involving a common fact issue, the legal
claim should be tried first to the jury and then the equitable claim to
the court (the jurys findings of fact will bind the court in the
equitable claim). Dairy Queen v. Wood 38
1. FRCP 2 there will only be one action known as a civil
action.
ii. If a procedure formerly available only in equity, such as a class suit
or derivative action, and is now permitted under the FRCP for
determining a legal claim, the jury should try the fact issue. Katchen
v. Landy
1. (Note, derivative suits are traditionally in equity) BUT if
there is a specific statutory scheme then can hear the equity /
bankruptcy claim first.
iii. Jury even though damages are incidental to equitable relief. Beacon
Theaters Inc. v. Westover. 39
iv. Ross v. Bernhard look to the heart of the issue/case, makes the call
that its a one way street in favor of a jury trial. Trend to really push
in favor of juries. Some discussion that the courts look to the
practical abilities and limitations of the jury in addition to premerger custom and remedy. Usually agreed that the complexity of
issue for the jury is not a consideration.
b. Jury size and procedural matters

DQ is suing trademark person who they signed a contract with seeking an injunction, accounting, and payment of
money due. Held: even though injunction and accounting are historic equity remedies, the payment of the money =
damages which is a legal remedy. Trying to make it look like an equity case to avoid the jury trial issue (DQ wants
to avoid jury sympathies for franchisees).
39
Facts: Dispute over how long a movie theater can show a first run of a movie. We have F B for an injunction
and declaratory relief. B counterclaims for antitrust damages. Held: Although Fs claim is equitable; there is no
longer need for injunctive relief (irreparable harm and no legal remedy) because there is legal remedy now. Jury
decides first, this is binding on the judge when deciding the equity issue.

i. Federal civil cases a jury must have at least 6 and no more than 12
jurors.
ii. Rule 38B Only 10 day time period to request a jury trial and if
you dont do this w/in service of the last pleading then its as if you
waived your right to jury trial.
iii. If both parties are happy with a majority verdict then that is fine, if
not has to be unanimous.
II.

Jury Misconduct
a. Historical Mansfield Rule (see page 1008)
b. Iowa Rule (see page 1008)
c. Federal Rule of Evidence a juror cannot testify to a statement made
during deliberation or anything about the mental processes with the
exceptions of:
i. Extraneous prejudicial information improperly brought to the jurors.
ii. Or, someone threatening the juror.
d. Quotient verdicts
i. What they are: When the jurors average all their different thoughts
at what damages should be to get the final damage award.
ii. Why they are wrong: Its the deliberation is what makes the damage
award acceptable in society.
e. ??? Throw out if tamper w/jury?

III.

Judicial power to override the jury

a. Directed Verdicts (now, Motion for Judgment as a Matter of Law) FRCP
50(a)
i. A judge can direct a verdict when the evidence viewed in the light
most favorable to the party against whom the verdict was directed
(including legitimate inferences in that partys favor) and w/o
considering the credibility of witnesses was such that reasonable
people could only come to one conclusion. (If confused see page 45
in Supplement).
b. JNOV (now, Renewed Motion for Judgment as a Matter of Law) FRCP
50(b)
i. Judgment was based upon a verdict that reasonable persons could
not have reached and if the moving party had sought a directed
verdict at the close of all evidence.
ii. Must be filed no later then 10 days after entry of judgment.
iii. Must move for judgment as a matter of law at the close of all
evidence to preserve this right. Standard is same for above.
c. Motion for a New Trial FRCP 60
i. Court may grant a new trial because of an error during the trial,
because the verdict is against the clear weight of the evidence

(limited to cases where the judge finds the verdict seriously

erroneous), or because the verdict is excessive.
ii. Based upon false evidence or will result in a miscarriage of justice,
even though there may be substantial evidence which would prevent
the direction of a verdict.
iii. Lets the judge sit as the 13th juror good compared to directed
verdict because doesnt take it away from jury.
iv. Standard for new trial: abuse of discretion. Very hard to meet.
IV.

Extraordinary Relief from Judgment, 60B is very hard to reopen, most of the
time once its tried its final. This rule is the only hope you have after the fact.
a. Mistake and excusable neglect
b. Newly discovered evidence, fraud
i. Must relate to facts that were in existence at the time of the trial.
ii. Needs to be extrinsic fraud P has duty to explore all avenues at
trial.
THE BINDING EFFECT OF DECISIONS

I.

Res Judicata (Claim preclusion)

a. Definition: Once a final judgment on the merits has been rendered on a
particular cause of action, the claimant is barred by claim preclusion from
asserting the same cause of action in a later lawsuit.
b. What must be shown:
i. Earlier judgment is valid, final judgment on the merits
1. If based on actual litigation then it is on the merits.
2. Becomes some what an issue with default judgments.
a. 41b says that all dismissals are to operate as
adjudication on the merits unless based on
jurisdiction, improper venue, or failure to join an
indispensable party, the SC says that 41b does not
govern whether judgment is on the merits for claim
preclusion purposes.
ii. The cases are brought by the same claimant against the same
defendant.
1. Has to be same P v. same D (cant switch and have the D
suing P and still have claim preclusion). * Note however this
might be barred by compulsory counterclaim rule.
iii. The same cause of action is involved in the later lawsuit.
1. Cause of action all claims arising out of the same
transaction or occurrence that is the subject matter of a claim
asserted by the claimant.
2. Examples:

c.

d.

e.

f.

a. Accidents = property damage + personal injury.

b. Installment obligations = sue on all due at time of suit,
if acceleration clause then have to sue at time of suit.
Separate notes are separate actions though.
Reasons for claim preclusion
i. Efficiency, courts wont retry something they have already heard.
For example, if you receive a ruling in federal court, re-file in state
court, only to be removed again to federal w/the same facts, then you
are claim precluded. Doesnt matter if former co-pp won on appeal.
Federal Department Stores v. Moitie.
Not allowed to split theories Jones v. Morris Bank of Portsmouth
i. If a transaction is represented by a single and indivisible contract and
the breach gives rise to a single cause of action, it cannot be split
into distinct parts and separate action.
ii. This was the case I was on call for acceleration clause.
iii. Coupons are different separate negotiable coupons, each is
separate promise.
Prejudice versus without prejudice
i. If a claim is dismissed w/prejudice because of failure to state a
claim, it is considered to have been heard on the merits and is claim
precluded. Rinehart v. Locke. (Police impersonating case).
1. Should always appeal from the first judgment / failure to
allow amendment instead of trying to start up a second suit.
2. Under 41b wasnt dismissed for lack of jurisdiction, improper
venue, or failure to join a party under 19 so dismissed on
the merits. 41 is a harsh rule. If you go to court you need to
get it right the first time.
ii. Compare w/ Costello case where court interprets jurisdiction to
mean something different than we studied all year.
iii. An involuntary dismissal (not indicating w/out prejudice) will result
in claim preclusion. Aguilano v. Transcontinental Bus System, Inc.
1. P D for bond but fails to post it. Dismissed on the merits.
Is this like Costellos failure to have affidavit of good cause?
Threshold defect? If same then Aguilano would come out
differently.
iv. Spectrum: Lack of real jurisdiction lack of Costello jurisdiction
grey area reaching the merits of a case.
ALL CHANGED with Semtek International Inc. v. Lockheed Martin Corp.
Rule 41b does not govern whether judgment is on the merits for claim
preclusion purposes, gets rid of 41b, have to use common law claim
preclusion instead.
i. Two suits, same P and D, first in federal court in ND Cal, dismissed
w/prejudice due to SOL. Same claim try to bring in MD.

ii. Erie issue: Md remands to see what the Cal court would do on claim
preclusion. Cal judge does not want refiled. So would follow this
law also, common law claim preclusion.
iii. Have to get around 41b to have the case heard in Md. Goes back to
41a, gets the meaning of 41b from 41a (this court).. Holds that
41b, just like 41a only bars from returning later to the same court.
This does not bar the claim from different courts. ** Limiting 41b
to the district itself, first time interpreted as being district specific.
II.

40

Collateral Estoppel (Issue preclusion) only precludes certain issues as

opposed to the common overall claim.
a. Definition A judgment binds a P or D (or their privies) in subsequent
actions on different causes of action between them as to issues actually
litigated and essential to the judgment in the first action. Here the issue is
deemed to be established in the second case w/o need to proffer evidence
on it.
b. Requirements:
i. First case ended in a valid, final judgment on the merits.
ii. Issue actually litigated and determined (default and consent
judgments generally no collateral estoppel as to the fact issues).
iii. Issue was essential to the judgment
1. Must be clear exactly how the issue was decided by the trier
of fact. If could be one of two theories then no issue
preclusion.
2. The judgment must depend on the issue of fact decided. If
personal injury action and the jury finds that neither P nor D
was negligent (find for D), the finding that P was not
negligent was not essential to judgment and will not be
collaterally estopped.
c. Differs from claim preclusion, can split you issues. If you dont litigate an
issue in the first suit then you can bring it the second time around. Only
reason not claim precluded is because suing on different coupons.
Cromwell v. County of Sac.
d. When findings are in support of the winner Russell if have 2 patents
and sue for patent infringement, even if jury finds for P and rejects both to
Ds defenses then still no issue preclusion if dont specify which patent
claim you are brining. Must show precise question raised and determined
in the former suit, if there is any uncertainty then it must be relitigated.
e. When findings are against the winner only losers can appeal. 40 Rios

Suppose we have an auto accident:

o P D
o D defends by alleging
(a) No negligence

i. Two lawsuits:
1. Popular Dry Goods Davis (Davis wins)
a. Davis joins Rios as 3rd party defendant (Rios wins)
b. Jury finds PDG and Rios are guilty of negligence,
Davis is guilty of negligence = all three negligent, no
recovery.
2. Rios Davis injuries in the car crash
a. Davis says finding above of Rios negligence is
contributory negligence in the 2nd suit, so Davis should
win.
ii. Held: Rioss claim should not be precluded, no preclusion on Rioss
negligence. Not binding because verdict rests on the first suits
finding. Rios cant appeal because he won. If you are the loser then
you have to appeal or you are estopped from brining the second
action.
f. General rule need parties to be adverse before there is issue preclusion.
For example, with co-D suing each other, no issue preclusion. This has
changed in NY over strong dissent, and the change comes about for the
sense of efficiency. Been litigated once, why try again.
g. Patterson v. Saunders Rule (vs. Restatement)
i. Patterson rule when judge / jury makes holding on two separate
issues that support the final judgment, then each issue is
automatically estopped and in the 2nd suit D would win by issue
preclusion.
ii. Restatement dont know if one is dicta, or the either, so neither is
acceptable for issue preclusion. SMJ might be exception where
always go w/Restatement because if dont have SMJ then shouldnt
be deciding other aspects of the case.
III.

Issue Preclusion Persons Bound by a Judgment

a. Traditional Mutuality Rules since a judgment cannot be used against a
person who was not a party (because such would violate due process,
deserving your DAY IN COURT), that person has traditionally been barred
from taking advantage of the judgment.
b. Breakdown of Mutuality: Bernhard v. Bank of America.
(b) Contributory negligence
Jury gives special verdict
o D was negligent, but P was contributory negligent
o D wins, because contributory negligence is a complete defense
When D P is anything estopped?
o Can P use findings above to estop re-litigation of contributory negligence?
o D cant appeal because she won even though the court held that she was negligent. Only losers
can appeal. When say D was negligent, then its almost like dicta, because D cant appeal.

Example: A B on issue; find for B. B cannot assert issue preclusion on C when C

B because C has not had their day in court. (Can never do this).
BUT: A B and A wins; then when C B we would let C use A as issue preclusion?
One way street, B had chance in A B suit and lost. Seems like C is free-riding off As
efforts.
Mutuality problem when: A B, B wins. A C and A wins. So B C. If B wins
then C will have to pay in spite of earlier win. So allow C to use issue preclusion to
defend (as a shield). Dilemma if allow non-mutual issue preclusion.
c. Exceptions to Mutuality when use Judgment as a Shield I.e. using issue
preclusion as a defense regardless of whether nonparty is in privity with the
original defending party.
i. When a nonparty wishes to utilize a prior judgment to avoid liability
in a subsequent suit, there are compelling reasons to allow this.
1. Example: sue primary liable person (servant), then sue
secondary liable person (master) could will allow issue
preclusion.
ii. Emphasizes that better do a good job the first time you litigate.
iii. ENCOURAGES JOINDER of parties by the P, because if not suing
one party (employer of employee) then will never be able to sue.
d. Exceptions to Mutuality when use Judgment as a Sword Offensive issues
preclusion
i. Issue preclusion usually unavailable for nonparty Ps courts very
reluctant to allow this
1. Worry about the wait and see approach free ride off of
others efforts.
2. Encouraging people to opt-out of class actions if you allow
this.
ii. Courts should consider fairness to the D Parklane Hosiery Co v.
Shore upheld the use of collateral estoppel as a sword. In the first
action the SEC D for violating the federal securities law. In the
second suit, a new private P same D, alleging damages resulting
from the same violation established in the first action. Court
allowed the 2nd P to rely on issue preclusion to establish the
existence of a violation since under all circumstances it was fair to
the defendant to do so.
iii. Courts should have broad discretion to determine when it should be
applied. Parklane. Its a benefit that the courts can give you.

iv. Teaches you that if you are a P and you bring a suit, you could be on
the defensive if you lose that suit and have issue preclusion imposed
upon you.
v. In mass torts if you allow issue preclusion then this gets rid of the
need for class actions. The first case to judgment turns out to
establish the common issue. Its like a test case. ** Issue preclusion
impacts class action tremendously.
vi. Offensive does not encourage joinder, and might in fact discourage
joinder.
vii. Rehnquist dissent = result of Parklane is that DD are coerced into
agreeing to consent orders, or settle with agencies in order to
preserve right to jury trial in private actions. Will agree to settle
with private government agencies.
e. Schwartz v. Public Administrator if have P D1, D2, D3, then Schwartz
says that D1 has to bring cross claim in first suit (compulsory) because if
found negligent in 1st suit, then in 2nd suit when D1 D2 he will be found
contributory negligent and not collect.
IV.

Interstate Preclusion choice of laws issue arises when case two is brought in
a different jurisdiction than case one, thus the law that the court in case 2 uses
to determine if the judgment in case one is entitled to claim or issue preclusion
needs to be determined.
a. Case one decided in state court court in case 2 (state or federal) generally
will apply the claim or issue preclusion law of the jurisdiction that decided
case one.
b. Case one decided in federal court under diversity jurisdiction court in
case two should apply federal law (because a federal court decided case
one). However, usually the federal law in such an instance would be the
state law of the state in which the federal court sat.