In personam-

1. physical presence- makes party subject to general jurisdiction based on

their “presence” in that forum at the moment of service- under pennoyer
this is presumptively sufficient
 Transient rule- can be served no matter how fleeting forum
presence
• Harris v. Balk- MD has PJ over harris through personal
service while Harris was visiting MD (regardless of him
being there only temporarily
• Constitutionality upheld in Burnham v. Superior Court (
even though suit unrelated to defendants activites in
state)- However you have to be careful because this
may not be enough if defendants presence in state was
not intentional or voluntary
Burnham v. Superior Court-
Scalia- physical presence alone is enough
Brennan- must also apply min contacts test and see if
purposeful availment

2. Voluntary appearance- submits to courts jurisdiction by voluntarily

appearing to defend lawsuit
3. Consent to service
-Express- expressly designates an agent for process within state
or had a contractual agreement stipulating jurisdiction
o Ex- forum selection clauses, Carnival Cruise lines
v. shute
-Implied- state may provide a public officer to be designated
for that purpose
• Ex- non resident motorist statute

4. Domicile
- Where party intends to stay, agrees to laws of state in which they
reside

1.Four categories of Minimum Contacts-

should be evaluated with reference to whether they are “continuous and
systematic” or “single and isolated” and with whether “give rise” to action or are
“unconnected”
1- contacts are systematic and continuous and give rise to claim- always
jurisdiction
2. systematic and continous contacts that are unrelated to cause of
action (come to represent are of general jurisdiction)- jurisdiction is appropriate if
contacts are “substantial”
-exp- extensive corp activity, management, admin activity and
state
3. Isolated and sporadic contacts giving rise to cause of action (specific
jurisdiction cases)- most cases are found in this category- jurisdiction is
appropriate if defendant “purposely availed” themselves to the laws of the state

purposeful availment- looks to some voluntary action by the defendant

establishing a relationship with the forum state
- formula for finding what constitutes purposeful availment, but rather case-by-
case
- 4 Categories:
o Δ entered state and conducted activity there
o Δ entered into contractual relationships with forum residents
o Δs whose products enter the forum through stream of commerce
o Δs whose out-of-state conduct caused an injurious effect in forum state

a. Contractual Relationships

Rule: Passive Purchaser- no personal Jurisdiction

Active vs. Passive Purchasers: distinguishes consumer from company
o Active: Burger King
 Δs dictate or negotiate contract, inspects facilities, etc
o Passive: Chalek
-Merely places order by mail or phone, accepts price from ad or
solicitation

-contracts plus analysis- Entering into a contract with a forum resident

may be sufficient- take into account place of negotation, execution, and
performance of contract.
- Unilateral actions of plantiff or third parties- does
not constitute purposeful availment

b.Stream of commerce-
-personal jur. over corp. that “delivers products into stream of commerce with
expectation they will be purchased by consumers in forum state”- WW
Volkswagen- However court went other way on this issue in Ashai Metal so this
issue remains unclear (lower courts seem to favor oconners opinion in ashai)
-oconner standard- defendant must have intended for its product to be
marketed in the forum state in order to satisfy the purposeful availment
requirement
- brennan standard- the defendant merely must have been aware that its
product would be marketed in the forum state in order to satisfy the purposeful
 availment requirement

-forseeability - ensures that defendants will be on clear notice regarding when

conduct will subject them to jurisdiction-“reasonably anticipate being haled into
court there” (WW Volkswagen v. Woodson)- mere forseeability that ones actions
will cause injury in forum insufficient to establish personal jur.

c. - Calder “effects” test -Intentional wrongful conduct that has effects in state-
sufficient for personal jur. (calder v. jones-defemation claim but has been applied
to other intentional torts) -“directed” at forum state is kind of a forseeability
argument- you would argue that the harm was foreseeable therefore it was
“targeted”

"purposeful direction," which requires

(a) an intentional action, that was
(b) expressly aimed at the forum state, with
(c) knowledge that the brunt of the injury would be felt in the forum state.

4. isolated but unrelated contacts- no personal jurisdiction

2. Reasonableness-
-once it is determined minimum contacts exist must determine whether assertion
of PJ would be reasonable (whether assertion of jurisdiction comports with fair
play and substantial justice)
-Justice brennan has suggested IS test is sliding scale- more substantial
minimum contacts make up for lesser showing of reasonableness prong

Five Factor Analysis- (Gestalt Factors) - first three are more significant
and Court not really clear how to apply last 2 (Burger King v. Rudezewicz)
1. The burden on the defendant
2. the forum states interest in adjudicating the dispute
3. plantiffs interest in obtaining convenient and effective
relief
4. interstate judicial systems interest in obtaining the most
efficient resolution of controversies
5. shared interest of the several states in furthering
fundamental substantive social policies

Inconvenience Argument: Δ must show that the forum is so gravely inconvenient that
Δ is at a severe disadvantage in litigation.

3. Personal Jurisdiction in Federal Courts

 -Rule 4(k)(1)(A):
-Fed. Courts may exercise jurisdiction over a defendant who could be
subjected to the jurisdiction of a court of general jurisdiction in the state in which the
district court is located.
- Conversely, if a state court could not obtain jurisdiction, neither could
the federal court.

4. Diversity Jurisdiction
governed by 28 U.S.C. § 1332
Two requirements-
- litigation between citizens of different states (or between a citizen of a
state and an alien
- amount in controversy must be more than 75k

A. Diversity of State Citizenship

1.Complete Diversity Rule- no diversity if any plaintiff is a citizen of the same

state as

2, Citizenship of the Parties-

i. Individuals—citizenship for individuals is determined based on their

domicile. To establish domicile:
- must be physically present in a place
-have the intention to remain there indefinitely

ii. Corporations- defined by 1332(c)(1): a corporation is a citizen of

states where:
- it is incorporated
-where it has its principal place of business
-the test for PPB is the “nerve center test”- Nerve Center:
look to locus of decision-making authority. Usually HQ. Hertz
v. Friend - where corp's officers direct, control, and
coordinate corp's activities.

iii. Partnerships and Unincorporated Associations- citizens of every

state and country of which its partners or members are citizens

iv. Legal Representatives- legal representatives are deemed citizens only

of the state of the party whom they represent 1332(c)(2)

B. Amount in Controversy
Joint and several liability-
At times multiple defednats may combine to cause a single injury
-under these circumstances amount in controversy is satisfied as to the claims
against all defendants because under the substantive law either can be held liable for the
entire injury

“Good Faith” Test

- The amount claimed by Π will be accepted as being the true amount in
controversy if it is apparently made in “good faith”
- Test will not be met if the Δ can demonstrate that Π inflated the amount claimed
merely to be able to bring suit in federal court

“Legal Certainty” Rule

- But under the good faith test, jurisdiction does not exist if it is shown to a “legal
certainty” that Π cannot reach jurisdictional minimum

Subsequent events versus subsequent revelations: Subsequent events that alter the
amount in controversy will not affect a court’s subject matter jurisdiction as long as the
jurisdictional minimum was met at the time suit was filed. These events include
abandonment/dismissal of some of plaintiff’s claims or defendant’s payment of portion of
plaintiff’s demands. Subsequent revelations as to what the amount in controversy was
when suit was commenced will affect the court’s jurisdiction if they establish plaintiff’s
lack of good faith.

Aggregation of Claims
- Π can aggregate all of his claims, even if the claims are unrelated
- Aggregation is normally only allowed for one Π against one Δ
o If more than one Π, each Π must individually satisfy the amount
requirement
o If more than one Δ, Π must establish amount requirement as to each Δ

5. Federal Question Jurisdiction

A. Article III “Arising Under” Jurisdiction

B. Statutory “Arising Under” Jurisdiction (28 U.S.C.)

- 28 U.S.C. §1331: Grants subject matter jurisdiction over federal question cases in
general
o Uses similar “arising under” language as Article III
 But “arising under” construed much more narrowly than Art. III

Tests-
1. Holmes Creation Test- cause of action created by fed. law- under
inclusive
2.Well pleaded complaint rule- Louisville and Nashville Railroad v.
 Mottley – fed question must appear in well pleaded complaint- fed. Questions that
appear in answer or may be used as defense will not suffice
3. Federal IngredientTest- Smith v. Kansas City - Turns on construction of
federal law
.4. Merrel Dow v. Thompson- Implies that unless fed. Question is
substantial fed. Courts should decline to exercise jurisdiction (may be
proper if sub. Fed. Question)
5. Grable Test (Substantial Federal Issue)- Grable & Sons Metal
Products v. Darue Engineering
-Is there a contested federal issue (disputed)?
-Is it substantial?
-is it necessary to resolution of claim?
-If all these are met must decide of it will disturb
balance between federal and state courts – (don’t want to
flood federal courts)

5. Supplemental Jurisdiction

definition- Ability of the federal court to hear additional claims and parties,
where the court would otherwise lack SMJ over those claims and parties independently.

- 1367 (a): incorporates Gibb’s recognition that a federal court’s ability to hear
claims over which there is no independent basis of jurisdiction is limited to claims
that are party of the same constitutional case; “common nucleus of operative fact”
Some courts give it broad reading, as long as there is a loose factual connection

Discretionary decline of jurisdiction (1367(c))-authorizes district courts to decline

jurisdiction in certain circumstances that largely implement discretionary factors
identified in United Mine Workers
-Grounds to decline- only on the basis of one of the following four grounds
1. Novel or complex issue of state law- law to be applied is uncertain so
may decline so parties can get a “surer-footed reading of applicable law” from a state
court
2. Nonfederal claim substantially predominates- non federal claim is the
real body of the case. Court should not “tolerate a litigants effort to impose upon it what
is in effect only a state law case.” (United Mine Workers)
3. All original jurisdiction claims dismissed- if all claims over which fed
court had original jur. are dismissed, court may dismiss nonfed claims
4. Extraordinary circumstances- may decline in these circumstances if
there are “other compelling reasons for declining jurisdiction”

6. Removal Jurisdiction
definition- allows a defendant to shift a case from state court to federal court when
plaintiff has chosen to sue in state court (1441(a))

Removal Under § 1441(a) and (b)

- Need BOTH parts (a) and (b) to remove a case
- 1441(a): allows a case to be removed if it is one over which the district court
would have had original jurisdiction
- 1441(b): bars removal in diversity cases if any Δ is a citizen of the forum state
(unless jurisdiction founded on claim that arises under fed. law)
o local Δ defeats removal
- 1441 (c)- provides that parties who believe removal is erroneous can then move in
fed. court to remand the issue to state court (as long as motion is made within 30
days of filing of notice of removal)

Rules of Removal:
1. One way street: only from state court to federal court
2. Only Δs can remove – Π can never remove a case
3. All Δs must agree to removal (see McCurtain County Production Corp. v. Cowett)
4. Can only remove to federal court that embraces the state court where suit was
filed
5. Removal must occur within 30 days of service
6. Can only remove if case has federal subject matter jurisdiction

Notes:
- A defendant who removes a case to federal court does not thereby waive an
objection under Rule 12(b)(2) to lack of personal jurisdiction.
- When a case is removed, the federal court must immediately determine whether
or not it has subject matter jurisdiction. Section 1447 (c) provides that if at any
time therefore but before final judgment, the court concludes that it lacks subject
matter jurisdiction, the case should be remanded.

7. Venue in Federal Courts

A. General Venue Statute: 28 U.S.C. §1391
- venue statutes in the federal system limit the federal districts in which suit may
be brought
- if a special venue statute other than 1391 applies than 1391 is either inapplicable
of supplementary depending on language of special statute
-removal actions (1441a) and claims qualifying for supplemental jurisdiction do
not have to satisfy the terms of general removal statute
- Venue can be waived either by prior agreement or by failing to challenge
improper venue intitially (12h1)

Two Choices of Venue in ALL Cases

1. May lay venue in any district where any Δs reside.
 o §1391(a)(1) and (b)(1)
o If all Δs reside in different districts of the same state, you may lay venue
where any one of the Δs resides (provided they all reside in same state)
o Definition of “resides”:
 For human beings: the district in which you are domiciled
 For corporation: corporation’s residence 1391(c):
• Corporation resides in all districts where it is subject to
personal jurisdiction
2. May lay venue in any district where a substantial part of the events or
ommisions giving rise to the cause of action claim occurred (if property at
issue- venue is proper in district where substantial part of property is located)
o §1391 (a)(2) and (b)(2)
- 1391: use a if actions founded solely on diversity and use b to apply to all other
actions, including those founded on federal question jurisdiction.
- In federal jurisdiction, when objection to venue—two remedies:
o 1. Dismissal of case for improper venue
o 2. Transfer case to proper venue (U.S.C. 1406)

Fallback Provisions- if neither of these tests can be satisfied and give you proper venue
then venue approp. As determined by fallbacks
Diversity only actions- venue is proper wherever any defendant can be subject to
personal jurisdiction (1391(a)(3))
Non diversity cases- venue is proper simply in any district where the defendant
“may be found” (1391(b)(3))

B. Transfer of Venue in Federal Court

§ 1404 Transfer- proper venue to another proper venue

- transfer is about convenience of parties and witnesses and the interest of justice
- Transfers can only be made to districts where the case could have originally been
brought, regardless of whether the defendant now consents to suit in alternate
forum- decision to transfer is within discretion of court
- Factors use:
o Strong preference for plaintiff’s choice of forum
o Ease of access to sources of proof
o Availability of compulsory process for unwilling witnesses
o Cost of obtaining attendance of willing witnesses
o Practical problems that make trial of a case easy, expeditious and
inexpensive
o Public interest factors (congestion, choice of law, relationship of
community in which courts/jurors are required to service)

§ 1406 Transfer- improper to proper venue

- Court has authority to transfer in the interest of justice, or can dismiss (defendant
can move for dismissal under 12(b)(3).
8. Forum Non Conveniens
- Rule- common law doctrine that permits the dismissal of a case over which a
court has jurisdiction and venue on the ground that practical factors indicate that it should
be heard in another court and that court is outside of the same judicial system (often
employed when appropriate court is in a foreign country).
-rational-courts not required to make their jurisdiction available to parties who
engage in unfair forum shopping and impose substantial inconvenience on other parties
and expense and burden on courts

In order to obtain dismissal on forum non conveniens grounds two Factors must be
satisfied—
1. Must be an adequate alternative forum available for case-
- applicability of less favorable law will not undermine status of an
alternate forum as adequate (Piper Aircraft Co. v. Reyno)
2. Must be a showing that interests of convenience to the parties and certain
public interests argue in favor of alternative forum notwithstanding plantiffs choice of
current forum (Gulf Oil Corp v. Gilbert)

Note: Most courts have found that an alternate forum is adequate so long as it provides
some remedy for the plaintiff; unless the foreign forum provides no remedy at all, it is
unlikely that a federal court will find the alternative forum unavailable.

Factors Relevant to Determine FNC:

- Private Interests of Litigants:
o Ease of access to evidence and witnesses
o Enforceability of a judgment
o Advantages/obstacles to a fair trial
o Existence of an alternative forum that will provide adequate relief
- Public Interest:
o Administrative difficulties of courts
o Burden on community of an unrelated forum for jury duty
o Interest in trying the case locally rather than in a distant forum
o Interest in avoiding interpretation of foreign law

Important Note: usually substantial weight is given to plantiffs choice of forum (where
venue and jurisdiction are proper). However, when plantiff is foreign that deference is
not warranted (Piper Aircraft).

9. NOTICE PLEADING & F.R.C.P.

Questions to ask for complaint -
- does complaint adequately allege grounds for courts subject matter
 jurisdiction
- does complaint adequately state a claim showing pleader is entitled to relief
- Did the defendant sufficiently plead damages under FRCP

Questions to ask for answer-

-Was answer filed within required amount of time
-Did defendant adequately admit of deny all allegations?
-Has defendant adequately pleaded any affirmative defenses?

Questions to answer for Amendments-

-Is amendment one that requires court permission?
- If amendment involves a claim or defense does it arise out of same conduct,
transaction or occurrence set forth in original pleading?

- Three Requirements for Complaint Under Rule 8(a):

1. Short and plain statement of the grounds for jurisdiction [8(a)(1)]
2. Short and plain statement showing that party is entitled to relief
[8(a)(2)]
3. Demand for the relief sought [8(a)(3)]
- Exceptions to Rule 8(a): Heightend Pleading Standards
1. Claims of fraud or mistake must be “stated with particularity” (Rule
9b)
 Policy purpose: to prevent meritless claims about a person’s
reputation
 “a party must state with particularity the circumstances
constituting fraud or mistake
 Not meant to impose a significantly more burdensome pleading
standard-deatiled evidence need not be pleaded; rather
sufficient information must be provided identifying the
circumstances of the fraud (or mistake) such that the defendant
will be able to form a response (see footnote seven pg 91
acing)
 Special damages must be specifically stated in order to be
claimed (protects opposing parties from being surprised at trial
by claims of damge that would not reasonably foreseeable from
alleged event)
2. Statutory Exceptions
3. Common Law Exceptions
 Created by courts imposing heightened pleading requirements
in certain types of action deemed “disfavored” – ie, libel,
slander, defamation. (Similar policy reason as fraud/mist.)’
 Also in civil rights claims, anti-trust actions, suits against
government, and complex litigation- imposed heightened
pleading standard in order to reduce number of frivolous claims
that enter system
 Supreme court has intervened on some occasions to overturn
such practices- indicating inappropriate for lower courts to
impose heightened standards not set of in rules (e.g.
Leatherman)
 However, Bell Atlantic suggests courts may allowed to now
impose some degree of factual substantiation at pleading stage
although Court denys that this rises to level of heightened
pleading
 Requirements for Δ’s Answer:
- Three types of responses- Denials, defenses, and counterclaims
- Rule 8(b) – Δ must either admit or deny each claim asserted in Π’s
complaint
 If Δ fails to respond to a claim, then it is inferred that Δ admits
that claim [8(d)] (see king vision pay per view v. J.C. Dimitri’s)
 General vs. Specific Denials [8(b)(3)]
• General: when Δ generally denies all allegations in the
complaint
• Specific: if Δ does not want to deny all the allegations, Δ
must either:
o Specially deny designated allegations, or
o Generally deny all allegations except those
specifically admitted.
 Denying Part of a Claim – if Δ only wants to deny a part or
aspect of a claim, he must admit the part that’s true and deny
the rest. (ie: yes, I was hit by a car, but it was blue not red.)
 Lacking Knowledge or Info – Δ must state if he does not have
info about an allegation
• This statement of lack of knowledge has the effect of a
denial
 Specificity – some denials mus9(a) and (c)]
 Affirmative Defenses – answer must also contain any affirmative
defenses [8(c)]- defenses available are discussed in Rule 12
Rule 12(a)- defendant generally has 20 days to respond to complaint
 if defendant has waived service of process pursuant to plantiffs
request will have 60 days (90 days for foreign defendants

Amendments
-
-F.R.C.P. 15: Allows party to amend a complaint to conform to the evidence,
even after judgment is entered!

Amendments by Right – 15(a)

Rule 15(a)- allows parties to amend pleadings as a matter of right as long as it
is done within 20 days from the time of the filing of the pleading
Permissive Amendment- 15(b)
o “freely give leave as justice requires” – standard for court to
grant leave to amend
• court is not required but evaluates the totality of the
circumstances balancing interests of both parties to
determine whether justice would be furthered by
permitting the amendment
• 15(a) creates a strong presumption in favor or granting
amendment
-15(b)(1) – If Δ objects that evidence at trial isn’t within issues
raised in the pleading, court should “freely permit” Π to amend their
complaint if doing so would aid in presenting the merits, and Δ fails to
show that the new evidence would prejudice them
 Burden on Δ to convince the court not to permit the
amendment b/c of prejudice
  Usually, if a truly unexpected issue comes up, the court will allow
amendment, but also give Δ more time for discovery regarding the
new issue
-15(b)(2) – When an issue is raised at trial that was not in the
complaint, if Δ doesn’t object to that issue, then he gives his implied
consent to the amended pleading that includes that issue
 Doesn’t matter if Π actually amended or not – if Δ doesn’t
complain to the issue, then it is considered part of the original
complain
 If objection is made is made courts are instructed to permit the
amendment “freely” unless the objecting party can show
prejudice
- Relation Back Doctrine: Rule 15c- allows amendment of a pleading, even if the
statute of limitations has run
o Court will treat the amended complaint as if it were filed on the same
date as the initial complaint
o Requirements:
 When doing so is permitted by the law that provides the
relevant SOL
 Claim/defense asserted in the amended pleading must arise out
of the same “conduct, transaction or occurrence” that was set
forth of attempt to be set forth in the original pleading
o Relation back can be denied if the amended pleading differs so
substantially from the initial pleading that Δ was not given notice of the
“new” claim at the time of the original pleading

-Situations in which the court may decide not to permit proposed amendment
1. When allowing would unfairly predjudice adverse party
-example- if amendment is being made at time when adverse party
would not be able to prepare adequate response
2. Party seeking amendment was previously aware of the information forming
the basis for the amendment or failed to become aware of such info due to lack of
diligence
-party doesn’t have unreasonable duty but rather if an ordinary and
expected investigation would have revealed info more recently discovered makes
argument in favor of permitting amendment less strong when balanced w/ the
burden placed on the other party

-Remedies for Δ Opposing a Complaint that Fails to State a Claim under Rule 8:
1. Do nothing, ignore the defect
2. Move to dismiss for failure to conform to Rule 8(a)(2)
 But court will typically grant Π leave to amend complaint under
Rule 15(a)
3. If complaint is vague/ambiguous, Δ can move for a more definite
statement under Rule 12(e)

Rule 11- Counsel stating claims are not frivolous

-Pleadings and other papers filed with court must be signed by
counsel w/ representation that allegations and arguments therein are
not frivolous, have or potentially have some evidentiary support, and
are not being made for improper purposes (does not apply to discovery
filings-governed by diff rule)
- if counsel runs afoul of rule eleven other party may make
motion for court to impose sanctions
-By signing counsel is indicating to court three things
1. filing not for improper purposes-
-“harass, cause unnecessary delay, or needlessly
increase the cost of litigation
2. legal connotations contained in filing “warranted by
existing law or by nonfrivilous argument for extending, modifying, or
reversing existing law or for establishing new law
3. factual allegations or denials in the filings are supported
by evidence or are likely to have evidentiary support after further
investigation

Rule 12(b) Motions to Dismiss

- Rule 12 Motions: Allows Δ to raise certain specified defenses by motion
before filing their answer
o Most motions to dismiss do not deal with the merits of the action
 7 motions: (1) lack of subject matter jur, (2) lack of personal
jur, (3) improper venue, (4) insufficient process, (5) insufficient
service, (6) failure to state a claim upon which relief can be
granted, (7) failure to join a party under Rule 19.

10. Discovery
Limits to Scope-
courts have discretion to broaden or limit scope discovery as provided by the rules
-Rule 26- must limit if court makes any of following
determinations-
1.discovery sought is unreasonably cumulative or
duplicative
2. discovery sought is more easily obtained from other
source that is more convenient, less burdensome, or less expensive
3. the party seeking discovery has had ample
opportunity from discovery to obtain the information sought
-4. the burden or expense of the proposed discovery
outweighs its likely benefit -taking into account-
a. needs of case
b. amount in controversy
c. parties resources
d. importance of issues at stake
e. importance of proposed discovery in resolving
the issues
5. can also limit for other reasons such as to protect
privacy or to prevent harassment of undue delay
3 Essential Components:
1. Discovery Relevance
 A matter is “relevant” if it is “reasonably calculated to lead to
discovery of admis. evidence”
 Disc. is allowed if there is any possibility that the info will lead
to admis. evidence at trial
 Idea: the liberal disclosure of info will lead to a more just
adjudication of the case
2. Standard for Attorney-Managed Discovery = Relevance to a claim
or defense
 More narrow/strict standard for discovery: discovery is only of
info relevant to the claim
 Claim = group of facts relating to the same transaction or
occurrence, and giving rise to one or more rights of action
3. Standard for Judicially Supervised Discovery = Subject matter
standard
 More lax standard for discovery: info has to be relevant to the
subject matter of the dispute
 This standard is only triggered if a party is denied discovery
under the claim/defense std.

Process of discovery-
1. initial discovery
2. discovery request
3. Initial Refusal- must confer with dislosing party to try and
reach agreement regarding request
4. No resolution-
motion to compel- if granted would order resisting party
to disclose
protective order- court orders info is protected from
discovery and either need not be disclosed or be disclosed in some limited
fashion that addresses party’s concerns
5. Duty to supplement- oncer material is disclosed pursuant to
discovery obligations parties have a continuing obligation to supplement if
info becomes incomplete due to new info or discovery that info was incorrect
in some way

Privilege

- Privilege = judicially recognized right to refuse to disclose otherwise relevant

info
o Rule 26(b)(1) expressly limits the scope of discovery to matters not
privileged

Rational:
-Public Policy Reasons – free communications in important social and
legal relationships is deemed to be a superior societal interest than the ability
to have such info available as evidence in litigation

- 4 Types of Privilege:
1. Created by federal common law
2. Created by state law
 3. Created by the Constitution
4. Created by federal statute or rule

-
1. Psychotherapist-patient privilege

- Jafee v. Redmond
o Rule: Court established a psychotherapist-patient privilege

2. Attorney-Client Privilege
- Upjohn Company v. U.S. [Part I]
o Rule: application of the attorney-client privilege in the corporate
setting.
 2-Way Street: The privilege extends not only to the giving of
advice/info from the attorney, but also the giving of info to the
attorney to enable him to give sound and informed advice
 Communications vs. Facts: privilege only protects disclosure of
communications, it does NOT protect the underlying facts
• Ie, Witness at trial can’t refuse to answer a question
about a fact that was mentioned in a communication –
that fact is open to inquiry under the normal system
o Court found that the lower court’s “control group” (only extending
privilege to higher officers) was too narrow because lower employees
often have info needed by a corporation’s lawyers

a. The Work Product Doctrine

- Work Product Doctrine: protects the preparation an attorney undertakes on
behalf of his client in anticipation of litigation or trial.
- Two Kinds of Attorney Work Product:
1. Fact Work Product – written statements by witnesses about the
facts
 This info is discoverable by a showing of necessity + hardship
[26(b)(3)(A)]
2. Opinion Work Product – the attorney’s personal notes or
impressions about the statements made by witnesses
 This info is rarely – if ever – discoverable [26(b)(3)(B)]
 Can’t force an attorney to share his internal mental processes
and personal evaluations
- Hickman v. Taylor
o Rule: Access to fact work product requires a showing of necessity AND
hardship
o Π failed to show hardship or necessity to warrant granting access to
attorney fact work product
- Upjohn Company v. U.S. [Part II]
o Rule: Access to opinion work product is rarely if ever discoverable
o Court doesn’t make an absolute rule of such work product, but it would
require a higher showing of good cause. The necessity/hardship
standard of fact W.P. is insufficient.
 - Expert Testimony: -655-666
o If expert will testify at trial: Rules allow for generous discovery of facts
known and opinions held by that expert [26(b)(4)(a)]
o If expert is not expected to testify at trial: More limited discovery
 Discovery is only allowed upon a showing of “exceptional
circumstances under which it is impracticable for the party
seeking discovery to obtain facts or opinions on the same
subject by other means” [26(b)(4)(B)]
 Purpose: prevent one party from relying exclusively on the work
done by another
 2 circumstances where burden might be satisfied:
1. when investigation done by the expert can’t be
replicated b/c object of study is no longer observable
2. when the expense of replicating the study is
prohibitive

Formal Discovery in Federal Court

b. Mandatory Conference & Mandatory Disclosures
- Discovery Conference: Rule 26(f) – discovery can’t commence until the
parties first meet (without court supervision) and confer “to consider the
nature and basis of their claims and defenses,” and the possibility of
settlement
o Also to arrange for a discovery plan
 At the end of the conference parties must submit to the court a
“written report outlining the plan.” Failure to participate in
plan’s creation/submission can = sanctions [Rule 37(g)]
- Mandatory Disclosure: Rule 26(a)(1) -- imposes an initial disclosure
requirement on all parties without having to wait for a request for discovery.
o These initial disclosures must be made within 14 days of the Discovery
Conference
o Purpose = to accelerate the exchange of basic info about the case and
to eliminate the paperwork involved in info requests
o Info Required:
1. IDs of all potential witnesses
2. ID of all docs, data, or tangible things that may be used as
evidence
3. Computation of damages
4. Copies of insurance agreements

- Court Supervision of Discovery Process: Court has 3 tools to supervise –

1. Protective order
2. Order to compel disclosure
3. Sanctions

11. Joinder of Claims By Πs and Δs

1. Claims and Counterclaims
- Rule 18: Π can join as many claims as it has against Δ (applies to parties making
original claims, counterclaims, crossclaims, or third party claims)
o Claimants must first successfully assert a claim against a party under one
of the rules before it will be able to join other claims against same party
 o The decision to join additional unrelated claims under rule 18(a) is
discretionary; thus a party failing to join such claims is free to raise them
in a subsequent action.
o Must independently satisfy jurisdictional and venue requirements

- Permissive Counterclaims: Rule 13(b)

o may be raised by the party but need not be
o claims a defending party has against an opponent that do not arise out of
the same transaction or occurrence
o Must independently satisfy jurisdictional and venue requirements

- Compulsory Counterclaims: Rule 13(a)

o Requirements for Compulsory Counterclaims –
1. Claim must exist at the time of pleading
2. Must arise out of the same transaction/occurrence as the opposing
party’s claim
-Logical relationship test- claims that are logically related to
one another satisfy same transaction/occurrence standard
- logical relationship exists when claims are offshoots of
same basic controversy between parties or otherwise related in
such a way that separate trials on each of claims would involve
“a substantial deuplication of effort and time by the parties and
the courts” or the presentation of similar bodies of evidence
-Note: although this test does not present a bright line rule
cause in the way it has been inconsitently applied- the policy of
the underlying standard of efficient use of judicial resources,
minimizing burden on litigants, and avoiding unnecc.
Impositions on witness help to apply standard.

3. Must not bring in parties over whom the court doesn’t have
jurisdiction (Must also independently satisfy jurisdictional and
venue requirements- since compulsory counterclaims rise out of
same transaction of occurrence- generally be supplemental
jurisdiction)

First-to-File Rule – (Semmes Motors v. Ford Motor Co.) If Δ fails to assert a

compulsory counterclaim in Suit 1 in Court 1, and then brings that compulsory
counterclaim in Suit 2 in Court 2, Court 1 can enjoin the second action.

Supplemental Jurisdiction:
 o Permissive vs. Compulsory Counterclaims: federal courts have SMJ over
compulsory counterclaims, but permissive counterclaims require their own
jurisdictional basis.
 Permissive don’t fall within court’s SMJ, require independent basis
for jurisdiction
o SMJ Under §1367:
 Part A: the court has SMJ over all claims if they are part of the
“same case or controversy” – unless part B takes that away.
 Part B: if SMJ is based on diversity jurisdiction, the court does
NOT have SMJ over claims under Rules 14, 19, 20, or 24.

Cross-Claims
- Rule 13(g): Cross-Claims = Claims asserted by a party against a co-party
o Cross-claims may be asserted if:
 It arises out of the same transaction/occurrence as the original
action, or
 It relates to property that is the subject matter of the original action

12. Permissive Joinder of Parties

Requirements for Joinder: Rule 20(a) –
1. Claims involve the same transaction/occurrence
2. There is at least one question of law or fact that is common to all
the claims

13. Compulsory Joinder of Parties: : NECESSARY AND

INDISPENSABLE PARTIES
- Rule 19: Required joinder. 3-pronged analysis. Must meet at least one prong to
make joinder mandatory.
1. Necessary Party Status -Is the absentee a necessary party whom Π must
join? YES if lack of joinder would result in –
3 prong analysis-
a. the court could not accord complete relief among the existing parties
b. the person’s interest would be prejudiced
c. existing parties would be harmed by exposure to a substantial risk of
incurring multiple liability
2. Feasability of Joinder - Assuming the absentee is necessary, is it feasible for
Π to bring them into the suit?
a. Personal Jurisdiction-can court obtain personal jurisdiction over
necessary party
b. Subject Matter Jurisdiction- will joinder of the party deprive court of
 subject matter jurisdiction over the action
c. Venue- has the necessary party objected to venue- if yes does joinder of
party render venue improper

 If yes, then Π must amend her complaint to join absentee as additional

Π or Δ- If one of these factors is not meant joinder is not feasible and proceed to next
question to seem if party is indispensable
3. Indispensability of Party - it is not feasible to join absentee, can the action
proceed among the existing parties, or should it be dismissed? Factors for the
court to consider:
a. Extent to which judgment rendered without absentee might prejudice
that person or existing parties
b. Extent to which that prejudice could be avoided or lessened
c. Whether judgment rendered in that person’s absence would be
adequate
d. Whether Π would have an adequate remedy if the action were
dismissed for nonjoinder.

14. JOINDER OF THIRD PARTIES BY ΔS

2 Ways Δ Can Assert Claim against Party Not Already in Suit:
1. Rule 13(h) – Δ who has filed a counterclaim or cross-claim to join a new party to
that claim
o Ask  would Rule 20 or 19 allow such a joinder? If yes, then proper.
2. Rule 14(a) – Δ can file a third-party complaint against a nonparty who is or may
be liable to indemnify the Δ for all or part of Π’s claim against Δ

Joinder of Third Parties Under Rule 14

- 3 Types of Claims under 14(a):
1. Impleader/indemnity claim by Δ against the third-party Δ.
2. Claims by the third-party Δ against Π
3. Claims by Π against the third-party Δ.
**Note: 14(a) also allows the third-party Δ to file any counterclaims he may
have against Δ under Rule 13
- Joining Third Parties:
o Δ may bring in third party who may be liable to him for all or part of
Π’s claim against Δ, any time after commencement of the action against
him
o Π may bring in third party only when a counterclaim is asserted against
him

Rule 13(h) Joinder vs. Rule 14(a) Joinder

- Both rules allow a Δ to bring in new parties to the action, but a 13(h) claim must
be part of a counterclaim or cross-claim being asserted against the existing party.
o A 14(a) claim is asserted solely against the new party to the suit.
 - Joinder under 14(a) is limited to indemnity claims, but 13(h) joinder may seek any
form of relief.

15. Intervention
- Mandatory Intervention under (a)(2) vs. Permissive Intervention under (b)(2) –
o A. Mandatory: Pitney Bowes Test. To intervene as of right under Rule
24(a)(2), intervenor must show:
1. A timely motion
 Factors to consider for timeliness issue:
• Length of time during which intervenor actually knew or
reasonably should have known of its interest in the case
before it petitioned to intervene
• Extent of prejudice the existing parties may suffer from
timing/delay
• Extent of prejudice intervenor may suffer if intervention is
denied
 Best gauge for timeliness
2. An interest relating to the property or transaction that is the subject
matter of the action
 Interest must be direct, substantial, and legally protectable (not
remote or contingent)
3. Impairment of that interest without intervention
4. The movant’s interest is not adequately represented by the other
parties to the litigation
 Adequate representation is presumed when the intervenor shares
same objective as a party to the suit
 Presumption can be overcome by intervenor showing that
collusion, nonfeasance, adversity of interest, or incompetence on
the part of the named party sharing the interest.
o B. Permissive: may be granted when intervenor’s claim or defense and the
main action have a question of law or fact in common.
 Principle consideration of the court: whether intervention will
unduly delay or prejudice the adjudication of the rights of the
original parties
 Interest in preventing intervention to be used as a means to inject
collateral issues
 Factors court may consider:
• nature/extent of intervenor’s interest
• whether those interests are adequately represented by the
parties

whether intervening party will significantly contribute to the full development of the
underlying factual issues in the suit, or to the just/equitable adjudication of legal ques

16. INTERPLEADER

- Interpleader: Joinder device that comes into play when 2 or more parties claim
right to one property/stake
o Stakeholder may bring action against all of the claimants, forcing them to
“interplead” and fight it out amongst themselves to determine which of
them is entitled to the stake
o Stakeholder interests advanced by interpleader –
 Spares the stakeholder the vexation of multiple lawsuits with
respect to the same property
 Eliminates the risk that in separate suits the stakeholder might be
found liable to more than 1 claimant for the same property
o Interpleader can even be used by stakeholder who has already been sued
by 1 or more claimants
 If SH was already sued by C1, and later C2 brings suit, SH can
interplead defensively by filing a counterclaim for interpleader
against C2 under 13(a) and enjoin suit
- Steps for Interpleader:
1. Court decides whether anyone other than stakeholder is entitled to the
stake (making interpleader appropriate remedy). If yes, then …
2. Adverse claimants litigate against each other to see which of them is
entitled to the stake.

17. Summary Judgment

- Rule 56:
- Either party can move for summary judgment on the ground that “there is no
genuine issue of material fact”
o Evidence must be substantial enough for a reasonable jury to render a
verdict in the nonmovant’s favor; otherwise, SJ will be granted for the
moving party.
o Question presented when summary judgment motion is made is whether
there is a “genuine issue as to any material fact” and if the movant is
entitled to judgment as a “matter of law”
o After moving party meets initial burden Party opposing SJ must set forth
specific facts showing that there IS a genuine issue for a trial.

1. Summary Judgment Sua Sponte

- Courts may enter SJ sua sponte, or on their own motion, so long as the losing
party was on notice that they had to come forward with all of their evidence.
o Rule 56(c): When SJ motion is made, non-moving party must have
minimum 10-days’ notice
18. DEFAULT JUDGMENTS
- Rule 55 – if Δ is properly served w/ complaint, and Δ fails to respond within time
allowed (usually 20 days, per R12), then Π may move for default judgment
[55(a)]

19. DISMISSAL OF ACTIONS

Voluntary Dismissal under Rule 41(a)
o Usually result from the parties reaching a settlement – and Π drops the suit
 Or, Π can voluntarily drop the suit if he learns through discovery
that he lacks sufficient evidence
 Π might also drop the suit to be able to refile in a more favorable
court
o Rule 41(a)(1) – Π may voluntarily drop the suit without court approval if
Δ hasn’t answered complaint yet
 Rule 41(a)(2) – all other voluntary dismissals require court
approval!
• Court can refuse to allow a dismissal if Δ can show
prejudice. Refusal under this is liberal.
• Even if dismissal is granted w/o prejudice (so Π can sue
again), court can force Π to reimburse Δ for court costs and
attorneys fees
• Court will NOT grant Π’s motion to dismiss in order to
defeat SMJ for Δ’s counterclaim
1. Dismissal for Failure to Prosecute under Rule 41(b)
o Allows a Δ to file a motion seeking involuntary dismissal for Π’s failure to
prosecute
 If dismissal is granted, it is treated as a judgment on the merits,
barring Π from refilling same claim
 Regarded as a sanction only taken in cases of egregious abuse,
especially since it bars future litigation
o Rule 41(c): Gives courts authority to dismiss counterclaims and cross-
claims where Δ failed to prosecute.
o Factors Courts Consider in Deciding Whether to Dismiss for Failure to
Prosecute:
 Was the failure due to the party’s willfulness, bad faith, or fault?
 Does the failure prejudice the opposing party?
 Was adequate warning given that such a failure could lead to
dismissal?
 Is dismissal needed to deter future misconduct?
 Are less drastic sanctions available or appropriate?
 What was the length of time that the party didn’t act?
 Dismissal as a Judicial Sanction under Rule 41(b)
o Authorizes dismissal as a sanction for failure to comply with federal rules
or the court’s order.
o Other rules that allow dismissal as a sanction: 4(m), for failure of service;
16(f) for failure to comply with pretrial conference; 37(b)(2) for failure to
comply with discovery orders.

o Factors Courts Consider in Deciding Whether to Dismiss as Sanction:

 Did Π act intentionally, or only accidentally or involuntarily?
 Is Π’s action part of a pattern of misconduct, or just an isolated
incident?
 Was Π warned by the court that he was skating on thin ice and
facing dismissal?
 Are any less drastic sanctions available or appropriate?
JML: Rule 50 –
-may be made at any time prior to the submission to the jury, but only after a
party has “been fully heard on the issue,” but can be renewed after the jury returns
its verdict [50(b)]
o Party is entitled to JML if, on the evidence submitted, no reasonable juror
could find against the party (evidence is legally insufficient)

JML (Rule 50) vs. SJ (Rule 56):

-Identical std for BOTH! Party entitled to JML or SJ if no reas. juror
could find against it
o SJ decision must be made BEFORE the offset of trial, while the JML can
come post-trial
o JML can be more advantageous because the court has had a chance to hear
the evidence more completely

Motions for a New Trial- Rule 59 –

Party can challenge an adverse judgment by moving for a new trial, filed in lieu of
or as an alternative to JML
o Time limitation = no later than 10 days after entry of judgment [Rule
59(b)]
o Unlike JML under Rule 50, this motion calls on the court to decide
whether a seriously erroneous result happened such that it was a
miscarriage of justice. Different from JML in 2 ways:
1. Specific remedy sought is a new trial, not a judgment in favor
of the moving party
2. Therefore, the standard for granting a new trial are significantly
more flexible than JML
o Trial court is given broad discretion to determine whether the purported
error has so infected the trial process as to render the judgment or process
fundamentally unfair
 o Motion will only be granted to redress prejudicial errors that affect
fundamental fairness. Typical grounds:
 Errors in the jury selection process
 Erroneous evidentiary rulings
 Erroneous verdict instructions
 Misconduct by judge, jury, parties or witnesses
 Newly discovered evidence

20. Claim and Issue Preclusion

- Rule of Finality – Generally, claims/issues resolved and decided by a judgment
may not be the subject of further litigation between the same parties.
o Policy: assures parties of finality, and conserves judicial resources.

Claim Preclusion/Res Judicata: refers to the treatment of a judgement as the

full measure of relief to be awared between same parties on same claim
defines when a claim or cause of action resolved in one case may
preclude further litigation on that claim in a subsequent case.
o prevents a party from asserting any part of a
previously resolved claim, including those
aspects of the claim that may not have been
litigated in the initial suit!!!
o Key = identity of the parties, and whether cases
involve the same claim.
Issue Preclusion/Collateral Estoppel: doctine that bars relitigation of issues
that were actuallylitigated in a prior action, provided the adjudication of those issues
was essential to the judgement.
defines the extent to which discrete issues decided in a prior suit may be
binding in subsequent litigation involving different claims.
o Not dependent on the claim litigated, but on the
discrete issues decided.

Difference between claim and issue preclusion-

-Res judica bars A from suing B for any kind of relief arising from a particular
transaction or occurrence if smith had previously brought an action against
jones based on that transaction or occurrence and the prior action was on the
merits. Res judica bars any relitigation of A’s rights against B based on those
events, including not only the claims that Smith did raise the first time around
but also any other claims arising out of the same set of facts that A could
have raised (but did not) in the first action.
-Collateral estoppel is more narrowly focused. It precludes A from
relitigationg issues that were actually litigated and decided in a prior action with B. If
an issue could have

CLAIM PRECLUSION OR RES JUDICATA-

THINK WAS IT THE SAME TRANSACTION- VERY LIBERAL
-BASED ON IDEAS THAT
- if party had right to join two claims for relief arising from same
transaction, it is reasonable to require her to do so, instead of bringing two suits that
will rehash same facts
 - under same transaction or occurrence test preclusion turns on the
right to join a claim in the original action, bot on whether claim actually was asserted
(only need to have been available to plaintiff) (advantage of same transaction and
occurrence test it is less ambiguous cause it focuses on the same set of facts)
-it doesn’t matter if claim is based on different legal theory if the claim
arises out of the same occurrence as first it wil be barred.

- Three elements of the defense of claim preclusion:

1. The claim in the 2nd suit must be the same claim or cause of action
as the first suit
2. The judgment in the first suit must have been final, valid, and on
the merits
3. Both the first and second suits must involve the same parties or
those in privity with them

1. Same Claim-
I. Transactional Test – defines a claim to be defined as “a group of
operative facts giving rise to one or more rights of action” 
Promotes efficiency, but potentially at the cost of unfairness
II. Restatement Transactional Test – Tempers the reach of the
transactional test by imposing commonsense limitations on what
may constitute a transaction. Adds considerations for court to
consider:
a. Whether facts are related in time, space, origin, or
motivation
b. Whether they form a convenient trial unit
c. Whether their treatment as a unit conforms to the parties’
expectations

2 Final, Valid, and on the Merits

a. Finality
 Finality: Trial ct’s decision is the “final” decision until
reversed/altered on appeal. Incl. injunctions
• some courts only give res judica effect to judgements if
the time for appeal has based or the case has been fully
resolved by the appellate court.
• Exception: a decision imposing liability but not assessing
damages ≠ final.
b. Valid
 Judgment = VALID if:
• Δ had proper notice
• If personal jurisdiction was satisfied, and
• If the rendering court had subject matter jurisdiction
over the controversy.
c. On the Merits
 Merits of the claim are in fact adjudicated against the Π after
trial of the substantive issues
• Judgment for Plaintiffs – Every final judgment in favor of
a Π is “on the merits,” including defaults, SJ and directed
verdicts – despite the lack of an actual trial.  Claim
Preclusion
 • Judgment for Defendants – Not so clear-cut for Δs.
o Judgment = “on the merits” if it is on Π’s
substantive claims  Claim Preclusion.
o Judgment ≠ “on the merits” and does NOT trigger
claim preclusion if it’s clearly premised on
nonsubstantive grounds. Not on the merits if:
 Judgment is for dismissal for lack of
jurisdiction, venue, or misjoinder

d. Same Parties of Those in Privity With Them

o Claim preclusion only binds/benefits the parties to the previously
decided action, or those in privity w/ them!
 Party = person who is named as a party to an action and
subjected to court’s jurisdiction
 Privity = person in such a relationship with a party to a suit
that he can be treated as a party for RJ.
• 3 relationships in privity:
a. Owners and successive owners of real property
b. Relationships that intertwine substantive legal
interests of party and nonparty
 Vicarious liability relationships!
 Ex: V gets in a car crash with pizza
deliveryman – if V sues the pizza
company you can’t sue the pizza driver as
well for additional damages.
c. Relationship premised on a representational
relationship b/w party and nonparty
 Ex: administrator of an estate for the
beneficiaries of the estate
 Virtual Representation – some courts have
attempted to enlarge representational
category to find privity when a party to
the suit can be said to have adequately
represented the nonparty, due to their
shared interests
o Richards v. Jefferson County
 Rule: Virtual Representation – Virtual representation does not
preclude rights of strangers!

Issue Preclusion or Collateral Estoppel

- Claim v. Issue Preclusion
o Claim precl. extinguishes the entire claim, including the aspects of a
claim that were not previously litigated
 Most often applies when a Π splits a claim by failing to allege it
entirely
o Issue preclusion focuses on discrete issues, and prevents their
relitigation

4 Elements of Issue Preclusion

1. The same issue is involved in both actions
2. The issue was actually litigated in the first action
 3. The issue was decided and necessary to the judgment in that
action
4. Both actions involve the same parties or those in privity with
them

Note: Issue preclusion only bars issues actually ligitgated and decided in the
prior action; it does not affect claims or defenses that could have been raised
but were not (example-defense of mutual mistake)

1. Same Issue
Think different factual issue
o Sameness = enough of a factual/legal overlap b/w the issues that it is
reasonable to treat them as the “same”
 “Reasonableness” should take into account:
• Factual and legal similarities
• Nature of the underlying claims as to each
• Substantive policies that may argue for or against
application of issue preclusion
• Extent to which applying issue preclusion will promote or
undermine fairness/efficiency
o Commissioner of Internal Revenue v. Sunnen
 Rule: Narrow construction of the “same issue” under Issue
Preclusion.
 Here, court found NO issue preclusion because 2nd claim was
based on a different tax year
• 1st suit b/w IRS and Δ didn’t preclude this 2nd suit b/c it
was under a different year’s tax K.
o Lumpkin v. Jordan
 Rule: A federal trial can issue preclude the need for a later state
trial, when the state case is based on the same issues of fact or
law as the federal case was decided on.
 Here, issue preclusion prevents Π from bringing claim in state
court re: discrimination issues previously litigated and finally
decided in a federal court: (1) same issue of discrim., (2)
actually litigated, (3) discrim. issue was both decided and
necessary to Suit 1, and (4) same parties involved.

2. Actually Litigated
o If the same issue is presented in both cases, the party asserting the
issue preclusion must also establish the issue was not merely present –
but was actually litigated there.
o Requirements for “Actually Litigated”:
 Properly raised
 Formally contested between the parties
 And submitted to the court for determination
o Parties must formally oppose one another on the issue at some point in
the litigation process and submit the issue to the court for resolution –
(ie, it does NOT have to be adversarial, can be solely on paper, like SJ.)
 Here’s the difference from Claim Preclusion!
o Claim preclusion applies even to aspects of a claim that were never
raised or disputed (ie, that were never litigated). But issue preclusion
 DOES require actual litigation.

3. Decided and Necessary

o A party asserting issue preclusion must establish that the issue was
both:
 Previously resolved (decided) as a part of a final judgment, and
 That the resolution was essential (necessary) to that judgment
o Ex: A sues B for breach of K. B’s sole defense is that A procured K
through fraud. Judgment is for A.
 Absence of fraud was both decided and necessary to the judgment
 Even though there was no specific findings on the fraud issue, a
decision that no fraud occurre4d = implicit
o Cuningham v. Outten
 Rule: For issue preclusion to be appropriate, the issues must be
fully decided in previous suit.
 Here, Δ’s conviction of “Inattentive Driving” in Suit 1 does not
preclude him from bringing Suit 2, which is based on
negl/liability, since Π’s comparative negl/liab were not fully
decided in Suit 1.
o Aldrich v. State of NY
 Rule: If the issue was “squarely addressed and specifically
decided” in Suit 1, precluded from Suit 2.
 Here, Suit 1 found that a bridge was not negligently engineered
 precludes Suit 2, which is claiming that the bridge’s faulty
design is to blame for a flood.
4. Same Parties or Those in Privity with Them
o Three Categories of the “Same Party”:
i. Party = person named as a party to the action
ii. Person in Privity = someone whose relationship w/ party
enables him to be = a “party”
iii. Substantial Participator = a person who substantially
participates in a prior litigation will also be treated as a
party as to those issues over which he asserted
control/participation.
o Mutuality Principle – only a person bound by a judgment may benefit
from it.
 Therefore, only a party (or in privity w/ a party) may use a
judgment in a preclusive manner in a subsequent proceeding.
 A stranger to the case (not bound by it) can’t legally benefit
from it either
o Bernhard v. Bank of America
 Rule: Nonmutual Collateral Estoppel: exception to Mutuality
Principle is justified when it would be unjust to permit a party to
reopen identical issues merely by switching adversaries.
 Here, Probate Court found against Π (heirs) that Cook didn’t
steal from their old mother, but now Π bringing suit against the
bank where Cook deposited and pilfered the money
• Court: mutuality principle does NOT preclude bank from
using defensive collateral estoppel!
• Even though bank was not a party to Suit 1 (Probate
Suit), it can use Suit 1’s holding to prevent Π from suing
them. Based on fairness – Π already had their day in
 court re: the estate, and they lost.
 Issue as to the ownership of the money was already finally
decided in the probate court.
o Nonmutuality Principle: Jurisdictions abandoned mutuality principle
with exception caveat:
 A stranger may invoke issue preclusion against a party only if
that party had a full & fair opportunity to litigate the issue &
had an incentive to do so.
 ***Due process entitles everyone to their day in court (7th
amendment) and the abandonment of the mutuality principle
has not changed this basic tenant of our court system. In every
non mutual estoppel situation the estopped party must have
been a party in the first suit and therefore had his chance to
litigate the issue.
 Restatement: Nonmutual Issue Preclusion should NOT be
allowed when –
i. It would be incompatible w/ scheme of
administering remedies in actions involved
ii. If forum in Suit 2 provides procedures that would
likely lead to a different determination and which
were not available in Suit 1
iii. If person invoking preclusion could have easily
joined in Suit 1
iv. If decision may have been affected by the
relationships among the parties to Suit 1
v. If the decision was based on a compromise
verdict.
o Parklane Hosiery Co. v. Shore (supreme court held offensive does not
violate due process- already had day in court)
 Rule: Offensive Collateral Estoppel: Π seeks to use the
holding from Suit 1 offensively in Suit 2 against the same Δ that
lost in Suit 1. Π wants to estop Δ from relitigating issues he
already lost to!
• Court has broad discretion whether to allow the use of
offensive collateral estoppel.
• Offensive collateral estoppel should NOT be allowed if:
o Π could have easily joined in the other action, or
o The application of offensive collateral estoppel
would be unfair to Δ.

Note: Courts will- usually allow use of use of

defensive non mutual estoppel in cases where they are
convinced the party being estopped had a full opportunity and
incentive to litigate the issue of his neg. in the first action.
However, this is still discretionary
o