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[Jurisdiction]
- Definition: the power to declare law
- Courts powers are limited
- Two main types of jurisdiction. BOTH are required for a court to enter a valid judgment
o Personal Jurisdiction: power over the persons in the lawsuit
o Subject Matter Jurisdiction: Power to hear the type of suit brought
[Personal Jurisdiction]
- Three main types of Personal Jurisdiction
o In Personam: service performed on the Δ to resolve a controversy involving personal obligations
o In Rem: Focuses on a dispute over property w/in the Forum
o Quasi in Rem: Service is performed on a piece of property w/in a forum and used to adjudicate a personal obligation (can only get up to value of property)
- Reason that PJ is required
o 5th and 14th Amendments: due process: fairness
[Traditional Forms of Personal Jurisdiction]
- Domicile: Suit in Δ’s home state. Resident of State
o State of incorporation for a corporation & principle place of business
- Waiver
o Party acts in a manner incompatible with assertion that forum lacks jurisdictional basis
- Consent
o Express: Can consent to jurisdiction of a court
o Implied: By doing an action in the state such as driving
- Transient Jurisdiction
o Courts have all power over persons and property w/in its boarders
Grace v. MacArthur: Δ was served while flying over the state; service was held to be valid
[Ways to fight Jurisdiction]
- Art. IV, Sect. 1 of US Constitution: Full Faith and Credit Clause
o Requires states to up hold judgments from courts in other states
o States do NOT have to up hold judgments if the ruling court did not have jurisdiction
- Direct Attack:
o Enter under a Special Appearance and attack jurisdiction directly
o Problems: have to travel to inconvenient forum and stuck with decision
- Collateral Attack:
o Do nothing and wait to attack jurisdiction when judgment is brought against you
[Ways to fight jurisdiction w/o acting inconsistent w/ PJ argument]
- Special Appearance: CAN ONLY fight jurisdiction
- Limited Appearance: fight the case on the merits against property that has been attached
[Personal Jurisdiction over a Nonresident Defendant]
- Two main areas
o Pennoyer Era
o Post-Pennoyer Era (Minimum Contacts)
[Pennoyer Era]
- Prior to 1877 the constitutional framework for regulating personal jurisdiction was uncertain
- Pennoyer v. Neff:
o Facts: Mitchell sued N for unpaid legal fees. N was not present and did not own property in Oregon. P won default judgment. Later N bought property in Oregon and Mitchell filed against it to secure the amount owned to him. Mitchell won and sold his interest to Pennoyer. N then sued P for ejection. Supreme Court said that Oregon courts did not have the power to hear the original suit b/c N was not present and did not own property at the time.
- Created Bright Line PJ Rule: Due Process requires service within a State’s Boundaries on the defendant or someone authorized to accept service for him. “Every State possesses exclusive jurisdiction over persons and property w/in its territories”
- Notice:
o In Personam: requires personal service
o In Rem: can publish
- Problems with Pennoyer: 70 years of confusion amount courts
o What to do w/ a foreign corporation
OK for states to req. someone be appointed for service but when is there presence enough to req. this?
[Minimum Contacts/Modern Era]
- Much confusion after Peynnoyer: Courts attempted to determine when a corporation was “present”
- International Shoe v. Washington: court rejected the “presence” analysis and instead introduced a reasonableness standard known as minimum contacts
o Required Δ to 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”.
Does the Δ have contacts w/ the forum?
Are the Contacts minimally sufficient to comport w/ traditional notions for fair play and substantial justice?
[Relatedness of the Claim to the Contact]
- International Shoe did not provide an exhaustive test; but one main idea is that a court looks at the contact with the forum and level of relatedness to the action brought
McGee v. International Ins.: Single Contact can be enough so long as it is sufficiently related to the claim
• Casual or isolated contact w/o strong connect to claim = no PJ
[Purposeful Availment]
- Hanson v. Denckla: Δ must have “purposefully availed” himself of the benefits and protections of the forum state for PJ to apply. Π Unilateral action is insufficient.
- WWWV v. Woodson: Even though it was foreseeable that product would end up forum it was not sufficient for PJ b/c dealer had not availed itself to the benefits of protections of the forum.
o Foreseeability that a product will be in a forum it not enough. Rather “it is Δ conduct and connection with the forum such that he should reasonably anticipate being haled into court there.”
[Quasi-In Rem Jurisdiction and Minimum Contacts]
- Shafer v. Heitner: Quasi-in-Rem jurisdiction only valid if it satisfies the minimum contact standard
[Stream of Commerce]
- What happens when a manufacture makes a product which is later sold (not by the manufacturer) in different forum. Confusion exists between two theories (Ashai):
o Pure Stream Theory: Allows for valid jurisdiction whether or not the original maker knows the goods will be sold in a particular state
o Stream Plus Theory: requires clear evidence that the Δ seeks to serve a particular state, such as designing the product for the forum market or advertising there
Must somehow target the forum:
a) marketing in forum
b) designing product for forum
c) controlling supply system for forum
[General Jurisdiction]
- Δ forum contacts are unrelated to the controversy
- Contact must be “so substantial and continuous” that the Δ would expect to be subject to a suit of any claim in the forum
- Can get PJ over Δ for any claim even those which do not originate in the forum
[Specific Jurisdiction]
- Exists when there is a connection between the forum and the Δ actions that generated the controversy
- Contact must relate to the claim in order to have in personam jurisdiction
- If not General Jurisdiction, must have specific jurisdiction
- Use minimum contact analysis defined in Shoe and following cases
Tutorial Two
10/5/07
[Purposeful Availment]
- Hanson v. Denckla: Δ must have “purposefully availed” himself of the benefits and protections of the forum state for PJ to apply. Π Unilateral action is insufficient.
- WWWV v. Woodson: Even though it was foreseeable that product would end up forum it was not sufficient for PJ b/c dealer had not availed itself to the benefits of protections of the forum.
o Foreseeability that a product will be in a forum it not enough. Rather “it is Δ conduct and connection with the forum such that he should reasonably anticipate being haled into court there.”
[Stream of Commerce]
- What happens when a manufacture makes a product which is later sold (not by the manufacturer) in different forum. Confusion exists between two theories (Ashai):
o Pure Stream Theory: Allows for valid jurisdiction whether or not the original maker knows the goods will be sold in a particular state. Simply place product into the stream of commerce is sufficient.
o Stream Plus Theory: requires clear evidence that the Δ seeks to serve a particular state, such as designing the product for the forum market or advertising there
Must somehow target the forum:
a) marketing in forum
b) designing product for forum
c) controlling supply system for forum
[Fairness Factors in Jurisdictional Calculus]
- There are times, even when jurisdiction is presumptively valid that it would not be “fair” for court to exercise PJ over the Δ. Asahi Metal Industry Co. v. Superior Ct.
o Interest in the Forum state in providing redress for its citizens: forum state’s interest in adjudicating the matter
o Interest of the π is obtaining relief in a convenient forum: plaintiff’s interest in complete relief
o the shared interests of the states in furthering substantive social policy
Safety on shared roadways, etc.
o Extent of the inconvenience to the Δ is she if forced to defend away from home: burden on the defendant VERY IMPORTANT
o the efficient resolution of the controversy
Where is the bulk of the evidence
- Typically used when contacts are barely sufficient
[Minimum Contacts and Contracts / Burger King]
- General Proposition: All of Δ contacts related to the controversy need not be with the Forum (After WWVW seemed to think that actions had to be directed to the forum…this said otherwise)
- When is contracting with someone of another state sufficient:
o Business Negotiations (sent payments to FL and Spoke w/ Mimi HQ)
o Contemplated Future Consequences
o Terms of the K
o Actual Business Dealings between the parties
o Level of Sophistication of the parties
[Effects Test]
- Calder v. Jones: Δ profited from the sale of National Inquirer Magazine which defamed Jones. She sued the reporter and editor, FL residents. Court upheld personal jurisdiction b/c the effect of the FL conduct in California. They knew that their FL actions would have a potential devastating effect on Jones in CA.
[Minimum Contacts and the π]
- Hustler v. Keeton: due process does not require minimum contacts between the plaintiff and the forum
[Internet and Personal Jurisdiction]
- No General Jurisdiction: Technically the Internet is everywhere
- Pavlovich v. Superior Court: Website printed how to decrypt a DVD; movie industry sued. No personal jurisdiction b/c Δ did not express a direct intent, that is target, to cause harm in the CA forum (remember the effects test, supra)
- Zippo: If Business “clearly does business over the internet” PJ applies. Looks to the Interactivity of the site:
1) purely interactive sight = jurisdiction
2) somewhat interactive sight = murky
3) purely informational sight = no jurisdiction
[General Jurisdiction]
- Δ forum contacts are unrelated to the controversy
- Contact must be “so substantial and continuous” that the Δ would expect to be subject to a suit of any claim in the forum.
- Can get PJ over Δ for any claim even those which do not originate in the forum
[Specific Jurisdiction]
- Exists when there is a connection between the forum and the Δ actions that generated the controversy
- Contact must relate to the claim in order to have in personam jurisdiction
- If not General Jurisdiction, must have specific jurisdiction
- Use minimum contact analysis defined in Shoe and following cases
[Presence and Minimum Contacts]
- Burnham v. Superior Court: Presence is still valid for jurisdictional purposes
o Based on historical ideas of power and states sovereignty (Scalia)
o Based on Purposeful Availment (Brennan)
[Consent Revisited]
- Historically a Δ could consent to the jurisdiction to the court
o Express
o Implied
- Three main types of Jurisdiction Related Contract Provisions
o Choice of Law: chose which type of law will govern the transaction
This type of Clause was found in Burger King
o Consent to Jurisdiction: Person waives all objections to PJ in a particular jurisdiction
Valid after National Equipment Rental
o Forum Selection Clause: Wave objection to jurisdiction and wave right to bring suit anywhere but the said forum
Valid after: Carnival Cruise Lines v. Shute: Court upheld a forum selection clause that was printed on the back of a passengers ticket
- Remember: Courts always look to the enforceability of the K
Tutorial 3
[Presence and Minimum Contacts]
- Burnham v. Superior Court: Presence is still valid for jurisdictional purposes
o Based on historical ideas of power and states sovereignty (Scalia)
o Based on Purposeful Availment (Brennan)
[Consent Revisited]
- Historically a Δ could consent to the jurisdiction to the court
o Express
o Implied
- Three main types of Jurisdiction Related Contract Provisions
o Choice of Law: chose which type of law will govern the transaction
This type of Clause was found in Burger King
o Consent to Jurisdiction: Person waives all objections to PJ in a particular jurisdiction
Valid after National Equipment Rental
o Forum Selection Clause: Wave objection to jurisdiction and wave right to bring suit anywhere but the said forum
Valid after: Carnival Cruise Lines v. Shute: Court upheld a forum selection clause that was printed on the back of a passengers ticket
Remember: Courts always look to the enforceability of the K
[Notice]
- Federal and State Adjudications are binding only when they satisfy the Due Process Clause of the Constitution
o Territorial limitation
o Notice limitation
o Subject Matter limitation
- Notice Requires sufficient Service of Process
o Process: summons directing Δ to respond or appear
o Service: formal means in which Process is delivered
[Modern standard]
- Defined in Mullane v. Central Hanover
o Notice must be “reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objects…”
o Court did not give an exacting standard, but rather authorized service by the best alternative means under the circumstances
Subsequent cases looked at the knowledge of Δ whereabouts and the methods used notify them (see Greene v. Lindsey where court rejected eviction proceeding where process was nailed to the door b/c process could have been mailed as well)
o Trick: Look to the cost of locating/serving the party and compare it to the interest of the part
[FRCP Rule 4]
- Persons Authorized to Serve Process Any person who is
o Not a party to the suit AND
o at least 18 years of age
- Ways service can be performed
o delivering the summons and complaint to the individual personally
o leaving the summons and complaint at the individual's dwelling house or usual place of abode with a person of suitable age and discretion then residing therein
o delivering the summons and complaint to an agent authorized by appointment or by law to receive service of process
o Mail Most common
Complaint and Summons are mailed to Δ. Accompanying these documents is an “acknowledgment of service” (or waiver of service). Δ then can choose to waive formal service by filling out the form and sending it back to the π.
• Advantage (carrot) for waiving formal service:
o Get 60 days to answer from date you send acknowledgement back (as opposed to 20)
• Punishment (stick) for not waiving formal service
o Δ has to pay the cost associated with formal serivce and any attorny fees associated w/ obatining them
Δ who waives service does NOT waive objections to venue or jurisdiction
[Personal Jurisdiction and Federal Courts]
- Rule 4 limits Federal Courts power they typically only have personal jurisdiction over defendants whom the state court has valid personal jurisdiction over. Thus Federal Courts personal jurisdictional powers are limited to the state that they are in.
o Exception: Bulge Rule: when parties are joined under rule 14 or 19 of FRCP, personal jurisdiction is extended to 100 miles of the court-house location.
[Statutory Limits on Personal Jurisdiction – Long Arm Statutes]
- 14th Amendment defines the outer bounds of fundamental limitations on the power of state courts when exercising power over Δ.
- It is up to each state legislature to actual grant power of their courts to exercise personal jurisdiction
- Every Personal Jurisdiction evaluation involves a two step analysis
o FIRST: Does the state’s Long Arm Statute authorize the court to exercise authority over the Δ?
o SECOND: Is it constitutional to do so?
- State Long Arm Statutes generally have taken two forms
o Blanket Approach: conferring all jurisdiction permitted by federal constitutional law
See California LAS: authorizes courts to exercise jurisdiction “on any basis not inconsistent with the Constitution of the State or of the United States”
o Enumerated Approach: authorize jurisdiction over defendants based on specific types of contact with the forum state (claim must arise out of this contact)
[Georgia Long Arm Statue]
- 5 “Fingers” of the Georgia Long Arm Statute
o transacting business within the state
o commits a tortious act or omission within this state, except defamation
Illinois rule: (Grey) tort resulting in damage within the state deemed to have occurred inside the state if warranted by “fair play and substantial justice.”
New York rule: tort committed within the state only if the act/omission itself occurs within the state, not merely the injury. GA follows this rule.
o commits a tortious injury in the state caused by an act or omission outside this state if the tort-feasor regularly does business … or derives revenue …
o owns/uses/possesses real property within the state
o marriage related cause of action, if matrimonial domicile within state
[Venue]
- Like personal jurisdiction, venue determines where litigation will take place
- Locates litigation within a state or judicial district
- Must plead improper venue at the onset of litigation or the objection is waived
- Parties can select venue by contract
Tutorial 4
[Venue]
- Like personal jurisdiction, venue determines where litigation will take place
- Locates litigation within a state or judicial district
- Must plead improper venue at the onset of litigation or the objection is waived
- Parties can select venue by contract
[Federal Venue Rules]
- 28 U.S.C. § 1391
o (a)1 & (b)1: allows suit to be brought in the judicial district where any Δ resides, so long as all Δ reside in the same State
Typically is deemed to be where Δ actually lives
o (a)2 & (b)2: allows suit to be brought in the judicial district in which a substantial part of the events or omissions giving rise to the claim occurred
o If neither one of the above are available; fall back is:
(a)3: If the SMJ for the case is solely diversity; suit can be brought in a judicial district in which any defendant is subject to personal jurisdiction at the time the action was commenced
(b)3: If the SMJ is not solely diversity: suit can be brought in any judicial district in which any Δ may be found
o (c): Corporate Δ: defines “resides” for a corporate Δ: suit can be brought in any judicial district in which it is subject to personal jurisdiction at the time the action was commenced. If corporation is in a state w/ multiple districts, corporation is deemed to reside in any district sufficient to establish PJ as if that district were its own state.
- Note that Venue can be waived.
- 28 U.S.C. § 1392
o Any local action involving property located in different districts can be brought in any of those districts.
[Forum Non Conveniens]
- Even if present forum is technically appropriate, courts have the power to dismiss based on the inconvenience that a particular forum poses
- Courts do not have the power to transfer outside of their judicial system and instead, use this doctrine as an end-run around this restriction.
- Used for inter-system transfers (state to federal; federal to foreign; etc.)
- Two Requirements
o (1): An adequate alternative forum is available
less favorable application of the law is not enough to show inadequacy Piper
o (2) Δ must show that considerations of party and forum convenience override the π choice of forum and justify dismissal
Private Interest Factors
• a) Ease of access to sources of proof
• b) Availability of unwilling witnesses attendance
• c) Possibility of view of premises
• d) Other practical problems (speed, expense)
Public Interest Factors
• a) Court congestion
• b) Local interest in local controversies
• c) Desire to have forum coincide w/ law
• d) Burden to citizens in unrelated forum w/ jury duty
- Court has power to condition dismissal upon some sort of action by Δ
o Agreement to waiver SOL issues
o Submit to jurisdiction of alternative forum
[Transfer]
- Allows a case to be transferred w/in a judicial system to a forum where the case might have been brought
- Case picks up where it left off, thus no need to re-file, etc.
- 28 U.S.C. §1404: Allows for transfer for the connivance of the parties and witness as well as if it is “in the interest of justice”
o Tip: uses common law Forum Non Conveniens factors BUT in a much relaxed manner
- 28 U.S.C. §1406: Even if venue is improper a court can transfer the case to a forum w/ proper venue (can also dismiss)
[Subject Matter Jurisdiction]
- The power of the court to hear the subject matter presented in a particular case
- Need SMJ for each claim brought before the court
- States can allocate subject matter jurisdiction however they want – constitutions, statutes, etc.
- Art. III § 2 of the Constitution sets out the permissible scope of the judicial power of the federal courts.
- Federal courts have been granted exclusive jurisdiction over certain cases
o Admiralty
o Bankruptcy
o Antitrust
- State courts have been granted exclusive jurisdiction over certain matters as well
o State tax collection
- Many cases however fall within shared or concurrent jurisdiction between the federal and state courts
o Diversity 28 U.S.C. §1332
o Federal Question 28 U.S.C. §1331
- SMJ argument can be raised at any time prior to a final judgment being entered
[Federal Question 28 U.S.C. § 1331]
- Constitution allows for federal SMJ when a case “arises under the Constitution, statutes, or treaties of the federal government.”
- When interpreting Art. III § 2, when looking at the jurisdiction of the Supreme Court for instance, “arising under” has been interpreted to create valid SMJ where a questions arising under federal law was an ‘ingredient’ to the suit whether or not it was actually raised by the parties, so long as it is potentially applicable to the action.
- § 1331, which grants power to the Federal Courts, mirrors the language of Art. III exactly, but has been interpreted much more narrowly than under the Constitution.
- Well Pleaded Complaint Rule (Mottley): §1331 does not confer jurisdiction on the federal district courts over cases involving federal law unless the federal issue is necessary to the proof of the plaintiff’s claim.
o Trick: Ask whether the π would have to raise the federal issue in a complaint which includes the elements she needs to prove to establish her claim…NOT defenses to the complaint
[Diversity 28 U.S.C. §1332]
- Art. III § 2 grants power to hear cases ‘between citizens of different states’
- Policy is to avoid “home cookin’”
- Supreme Court has interpreted to Art. III § 2 to require “minimum diversity”, that is there is at least one Δ that is diverse from at least one π.
- While interpreting § 1332, which grants federal courts power to hear cases, the Court has required “complete (Strawbridge) diversity” which requires all Δ to be diverse from all π.
- Excluded from Diversity actions
o Ankenbrandt: domestic relation cases can not use Diversity SMJ in federal courts
o Deny where jurisdiction has been “improperly or collusively” made.
Assignment of right to create jurisdiction is improper
• Administrators are deemed to be from the citizenship of the person they represent (child, deceased, ect.)
[Citizenship Requirement]
- Look to the citizenship of the parties at the time the action was commenced (filed)
o Post-commencement changes neither create nor destroy jurisdiction
- Citizenship for diversity purposes has been equated to domicile
- Individuals
o Each person has only one domicile
o Domicile requires (1) physical presence & (2) intent to remain there
o Once a domicile is established, you maintain that domicile until you have another one
o Subjective analysis is required
(Look for these while arguing): place of employment, voter registration, driver’s licenses, current residence, bank accounts, etc
- Corporation
o Are Domiciled (1) in the place where they are incorporated and (2) where they have their principle place of business
Nerve Theory: place where the executive and administrative functions are controlled
Muscle Theory: place where most of the everyday activities of the corporation occur
[Amount in Controversy]
- Currently requires an amount greater than $75,000 in controversy
- Good Faith amount as determined at the beginning of the action (well pleaded complaint)
- Aggregating amounts of several claims:
o Π may aggregate all the claims he asserts against a single Δ, whether or not the claims are related.
o If two π each have claims against a single Δ they may not aggregate if their claims are “separate and distinct”
If interest of group of π or Δ are NOT separate and distinct (ie undivided common interest) look to the amount of the undivided interest
o If π have a claim against multiple Δ, the amount must be sufficient as per each Δ
- Counter Claims
o If π claim meets the amount in controversy requirement, compulsory counterclaims can be heard regardless of the amount, while permissive counter claims require an independent jurisdictional basis.
[Supplemental Jurisdiction 28 U.S.C. §1367]
- Used to allow federal courts to have SMJ when some claims in a controversy satisfy independent SMJ basis and some do not
- §1367 codified a very confusing common law allowance of these types of actions
- §1367(a): extends federal jurisdiction from freestanding claims within the original jurisdiction of the federal courts to supplemental claims that are “so related that they form part of the same case or controversy…”
o Look for a common Nucleus of Operative Facts (CNOF) (Gibbs test)
- § 1367(b): In diversity-only cases, courts do not have supplemental jurisdiction over claims by π against persons added as parties (Rule 14, 19, 20, or 24).
o Still a lot of confusion among the courts as to how to properly apply this rule. Basic idea is that the Court was not going to allow a π to create an end-run around the complete diversity requirement.
o Policy: π chooses the forum
- §1367 (c): Even if court can exercise Supplemental jurisdiction, they are not required to so. Must look at discretionary factors:
o claim raises novel or complex state law issue
o state claim predominates federal claim
o all federal claims dismissed
o other compelling reasons (efficiency, common sense)
[Removal 28 U.S.C. §1441]
- Congress has granted power to defendants to second guess the π forum selection
- Only available to Δ…π can not remove even if counter claimed
- All Δ must join in the removal action
- Available in civil actions where the district court has original jurisdiction over the action
o Court asks if the district court could have had jurisdiction had the action originally been filed in federal court
o Can only be removed to the federal court sitting in the place where such action is pending (§1441(a))
- §1441(b): Δ can not remove action if original federal SMJ would have been diversity and the action was brought in a state court in which any defendant is a citizen.
o Policy: Home cookin’ is no longer a fear
- §1446: Δ must file a removal action w/in 30 days of receiving the pleading or other paper affording him grounds for removal
o Action is filed in the district court in which the state court where the action is currently pending lies.
o §1446 (b): prevents removal after 1yr. of the commencement of an action where the original federal SMJ would have been diversity
- §1441 (c): If a π files an action in state court with an independently removable federal question claim together with “separate and distinct” state actions this code section allows a federal judge to either (1) retain the whole removed case OR (2) remand all matters in which the State law predominates.
o With the passage of Supplemental jurisdiction this point is largely mooted b/c if both claims arise from CONF, court has independent basis to hear the claim
Tutorial 5
[Removal 28 U.S.C. §1441]
- Congress has granted power to defendants to second guess the π forum selection
- Only available to Δ…π can not remove even if counter claimed
- All Δ must join in the removal action
- Available in civil actions where the district court has original jurisdiction over the action
o Court asks if the district court could have had jurisdiction had the action originally been filed in federal court
o Can only be removed to the federal court sitting in the place where such action is pending (§1441(a))
- §1441(b): Δ can not remove action if original federal SMJ would have been diversity and the action was brought in a state court in which any defendant is a citizen.
o Policy: Home cookin’ is no longer a fear
- §1446: Δ must file a removal action w/in 30 days of receiving the pleading or other paper affording him grounds for removal
o Action is filed in the district court in which the state court where the action is currently pending lies.
o §1446 (b): prevents removal after 1yr. of the commencement of an action where the original federal SMJ would have been diversity
- §1441 (c): If a π files an action in state court with an independently removable federal question claim together with “separate and distinct” state actions this code section allows a federal judge to either (1) retain the whole removed case OR (2) remand all matters in which the State law predominates.
o With the passage of Supplemental jurisdiction this point is largely mooted b/c if both claims arise from CONF, court has independent basis to hear the claim
[Two systems, Two Laws Whose law applies?]
- Having two overlapping judicial systems creates difficulty when deciding whose law to apply to a claim.
- When dealing with Federal Question SMJ, the federal law is always applied
o Reason: Constitution has granted Congress the power to makes these laws
- Problems arise when dealing with state based claims (Diversity and Supplemental SMJ)
o Reason: Congress does not have the authority to create many types of laws (contracts, tort, etc. Constitution has granted those powers to the States)
[Swift v. Tyson]
- Court had to interpret the Rules and Decision Act which said when dealing with Non-Federal Question SMJ, “The rules of the several states shall apply”
- Court interpreted that phrase as only referring to statutes and certain established local usages of the state…NOT to judicial decisions interpreting general principles of the common law
- Thus, in (1) non federal question cases and (2) when deciding a common law issue, federal judges should examine all common law authorities to ascertain the proper rule.
- Swift Rationale (natural law view):
o Idea that judges are not charged with making the law, but rather, they merely find or declare that law
- Swift Problems:
o Created forum manipulation
o Unfairness to non-diverse parties (if you were diverse you had two choices of law (state common law by filing in state court – or federal common law if you filed in federal court) whereas non-diverse parties had only one (state court common law)
- BASIC Swift effect: created two bodies of common law: State and Federal
o Note: Federal judges did not have to follow the federal common law (natural law theory)
[The Erie Decision]
- Court overruled the Swift idea of a federal common law for 3 main reasons
o Failed its mission to create a general common law
o Non-Diverse party discrimination
o Swift doctrine was unconstitutional: allowed federal judiciary to make laws which they had no delegated powers to do
- Basic Erie Rule: In diversity cases federal courts must apply the law that would be applied by the courts of the state in which they sit (this is the easy rule to 97% of all cases)
- Problems with Erie
o In what seemed like an afterthought in the Erie decision, the court stated that “of course the federal courts can apply their own purely procedural rules”
[Substantive / Procedural distinction]
- Substantive law: definition of state-created rights and obligations by the state courts If Substantive law: apply state rule
- Procedural is defined as: form of mode and enforcement if Procedural…it depends
- Dunlap: State law applies if it applies to a “substantial right” of the parties
o Thus, courts not only apply state law on “substantive rules”, but also on matters of procedure that that relate the enforcement of state rights.
- Guaranty Trust: Introduced an outcome determinative test: State law applies if the state procedure “significantly affected the result of the litigation”
o This created obvious problems almost everything would affect the outcome.
Federal Rules of Civil Procedure
Service requirements
Placement of a staple, etc.
- Bryd v. Blue Ridge: Court must not only decided whether the procedural rule is outcome determinative but should also consider any countervailing federal policies that arise from the federal court’s status as an independent judicial system
o Thus, even though a rule would affect the outcome of the litigation, the federal procedural rule can apply if there is a strong federal policy to apply the federal rule
Example: a constitutional amendment
[Hanna v. Plumer]
- Facts: π served process on the Δ by leaving the summons and the complaint at the home with an eligible person (FRCP 4) but Massachusetts statutes required personal delivery to the Δ. Court said federal procedural rule could apply for two reasons:
- Hanna Part 1: Modified outcome determinative test Whether a federal procedure “significantly affects the outcome of litigation” must be viewed in the policies underlying Erie
o (1) to prevent forum shopping
o (2) to prevent inequitable administration of the law
HERE: very doubtful that a π would chose of forum b/c they could leave the summons at the abode of the Δ as opposed to person service.
- RULE of Hanna Part 1: Applies state procedure only where the disputed rule would either govern the forum the π would choose OR cause an inequitable administration of the law
- Hanna Part 2: Different Analysis when an official Federal Rule of Civil Procedure conflicts with a state law
o Both statutory and constitutional authority for FRCP
Necessary and Proper clause provides constitutional authority
Rule of Decisions Act provides statutory authority
o RULE of Hanna Part 2: Congress and the Courts have broad constitutional authority to promulgate any Federal Rule that is “arguably procedural”
VERY hard to argue that a Federal Rule of Civil Procedure is not “arguably procedural” b/c it was passed by they were recommended by the Advisory Committee, promulgated by the Supreme Court, and endorsed by Congress.
Hawkins v. Masters Farms
Diversity jurisdiction; if parties are diverse, can go to Fed. Ct and not state.
When are they diverse? We have to look at where they are domiciled = physical presence in a place + state of mind concerning one's intent to remain there.
Bridges v. Diesel Service
Bridges sued Diesel Service for dismissal under ADA, Defendant moved to sanction pl. b/c should have exhausted EEOC remedies first. Court says: sanctions are for frivolous/unmeritorious filing, and this is not it. (Rule 11)
Bell v. Nowick Transfer
Pl. injured in car accident caused by truck operated by def. Defs move to dismiss b/c of insufficient complaint. Ct. found that did not need very detailed complaint to continue, needed for State ct, but not Fed, so defs. shot themselves in the foot by moving to fed. ct.
PER: 28 U.S.C. 1441, any civil action brought in a state court can be removed by def. to district court. , 1446 gives procedure for removal. (Rule 12 B 6): failure to state a claim upon which relief can be granted.
JURISDICTION: Personal: does this court have power over this person? Subject matter: does the court have power over this problem: probate/bankruptcy ct.
12 B(1) Motion to dismiss for lack of subject matter jurisdiction
12 B (2) lack of personal jurisdiction
12 B (3) improper venue
12 B (4) insufficiency of process
12 B 5 insufficiency of service of process
12 B 7 Failure to join a party under Rule 19
JOINDER: putting all parties which should be involved together at once; must be transactionally related.
Bridgeport Music v. 11C music
770 music/entertainment co's sued because of sampling/copyright infringement
Each song is a separate occurrence so no joinder. Joining all these cases would create unreasonable prejudice and expense to defendants, also impossible to try case.
DISCOVERY:
Butler v. Rigby
Health care providers did not want discovery; overruled, we have very liberal discovery rules
Houchens v. American Home Ins.
Pl sued Def for breach of K, b/c husband disappeared, and def refused to pay on accidental death policy. No evidence to show accidental death, so summary judgment (No reasonable person could find for other side/no reason to go to trial)
Norton v. Snapper Power Equipment
Norton injured when riding lawnmower fell on him. Jury in Dist. Ct found for plaintiff, then Dist Ct issued a Judgment Non Obstante Verdicto, then reversed by appellate ct.
Res Judicata: this question has been answered by the courts, so can't do it again
Claim preclusion: Can't sue for the same claim twice. (Arm and leg: same claim)
Rush v. City of Maple Heights
Rush injured in motorbike accident sued city twice, once for damage to bike and then once again for personal injury. Previously, two separate claims, this court does away with that for efficiency's sake. Court mentions Vasu: in that case, can sue ins. co and tortfeasor separately.
Apex Hosiery v. Leader
Leader does not want discovery; can't appeal orders/motions until final verdict.
PERSONAL JURISDICTION: Pennoyer v. Neff: neff hired Mitchell to represent him; Neff iddn't pay, Mitchell sued him in State ct. and won- he wasn't served with process, Mitchell got default judgment. Neff later buys property w/in state. Mitchell uses default judgment to get property + sells to pennoyer.
SUBJECT MATTER JURISDICTION:
28 u.s.c $ 1331 grants federal courts jurisdiction over questions that arise under federal law. Admiralty= fed only, family matters= state only. Defenses arising from Constitution do not place case in Fed ct.
Louisville and Nashville RR v. Mottley. Mottleys sued in Fed ct after granted lifetime pass which was then taken away. Ct sez: they're not diverse; and the cause of action isn't constitutionally based.
Well Pleaded Complaint Rule: if the federal complaint, as filed by Pl, does not contain a federal question, it can't proceed in fed. ct. Since Mottleys suing for breach of K, thrown out.
REMOVAL:
28 $ 1441 a) if it's brought in a state ct and dist cts have original jurisdiction, can be removed by def. there.
b) If fed question, can be removed w/o considering diversity.
Caterpillar v. Lewis.
Originally there was diversity based federal jurisdiction, then parties which made it diverse dropped out,
DIVERSITY JURISDICTION
The ERIE question: state or fed law with overlapping jurisdiction?
A Fed ct having diversity jurisdiction must apply the law, common/statutory of the state IN WHICH THEY SIT in resolving the dispute.
Tompkins' arm cut off by Erie rr, while he was visiting PA. We dunno where he's from. Dunno where RR is from. Since he doesn't want to be considered a trespasser under PA law, he brings suit in Fed ct. Judgment for Pl, rr appeals all the way to Sup Ct and offers to settle.
Case of Brown & Yellow v. Black and White brought up. RR wanted former to have sole custom, but that would be void under common law of KY so Brown & Yellow reincorporated in TN, filed suit in Fed Ct under diversity jurisdiction and won, b/c they can do it under fed law but not KY state law. This sux, sez ct. "The law to be applied in any case is the law of the state, common or statutory, except if Constitutional or by Acts of Congress. See also: 28 $ 1652, the laws of the several states, except etc., will be regarded as rules of decision in civil actions in the US cts.
Ct did not overrule Swift b/c it was wrongly decided, can't do that, has to be unconstitutional.
Erie requires deference to state courts and lawmaking bodies and federal cts are an independent judicial system. feds have power over procedure.
Guaranty Trust v. York. (U.S. Sup Ct '45)
Pls sued bond trustee for breach of trust in Fed diversity ct. under NY law. Under NY stat of limitations, claim barred, under fed, not so.
Statute of limitations, is it a matter of procedure?
Well, we want to make sure result is the same as it would be in state ct., so out goes suit.
Byrd v. Blue Ridge Electric Cooperative
Pl injured while on construction job for def, not directly employed by def, but doing same work, and so claimed recompense under South Carolina Workmen's comp act which sez; judge decides whether injured party has valid claim. Decided not to follow state rule and give jury the decision as is the rule in Fed ct. (what to do when fed practice not dictated by particular rule/statute)
Hanna v. Plumer
service of process under state (personal service reqd) or federal (can leave w/competent adult) guidelines (ct decided fed law rules!) (what to do when a rule or fed statute governs federal practice)
Hanna: Erie questions arise when a fed ct would behave differently than a state ct. If practice dictated by FRCP, if statute/rule is constitutional, ct must follow, even if significantly different from state practice.)
Hanna's principle will yield a result different from Guaranty Trust whenever the federal practice is dictated by a federal statute or Rule (as long as statute or rule is constitutional and within scope of Rules Enabling Act)
Byrd deals with when federal practice comes from common law of federal procedure or custom.
Byrd has 3 questions
Is state practice "bound up with the definition of the rights and obligations of the parties?" if yes, state law governs
Would its application determine the outcome of the case?
If so, are there "affirmative countervailing" considerations fo federal judicial administration present?
Flow chart:
If there is no conflict, apply state law (+ fed)
Is there a valid Federal Positive (law that is issued, (rule or statute) not common law)? if yes, apply Fed Law.
Is Fed Common law outcome determinative-
If no, apply fed law, if yes, balance state and fed interest
examine 1: twin arms of Erie, avoiding forum shopping and equality of outcome
2: State Sovereignty under Semtek; ct in Hanna ignored state sovereignty, Scalia reintroduces
Ragan asked: when does suit commence? Fed rule is on filing, State rule is on service, the Sup Ct found outcome determinative conflict so applied state rule.
Hanna said that Ragan said there was no conflict (they can say whatever they want.)
Cohen-shareholders must post bond if suing corporation, the federal rule says they don't have to, the state rule says yes they do, ct decides there is no conflict between the rules and applies the state rule. In these cases, ct favoured federal rules
Pre Byrd + Hanna, ct favoured state law, did not want to find conflicts; post byrd and Hanna, ct favoured federal rules and wanted to find conflicts, at Gasparini pendulum swings back. .
Burlington Northern marks a shift- if def appeals money judgment and loses, Pl gets add'l 10% under AL law. Under fed law, if it's a frivolous appeal, they can award single or double costs. In this case ct chose to interpret these laws as in conflict and used Federal law.
Stewart v. Ricoh, AL refused to enforce forum selection clause, ct decided it conflicted w/ 28 USC 1404, transfer statute. why transfer? convenience in the interests of justice, if there is a conflict, apply Fed law.
Gasparini: pendulum swings back. NY law, appellate cts can reduce excessive jury awards, vs 7th amendment to constitution, can't reexamine outside that of the common law. Both state and fed interests are significant here, we can't have state appellate review a fed decision so ct writes new rule accommodating state sovereignty.
Semtek: Brings suit against Lockheed-martin in CA, dismissed, brings suit in MD, Lockheed sez, no you don't either, this has been decided. No, sez Sup ct. this may have been decided in CA but hasn't been decided in other states. Fed law sez if it's been dismissed on the merits it's claim preclusive according to Fed Rule 42, but this rule is rubbish 'cos violates rules enabling act, it would violate/abridge a substantive right.
How do you tell if it's substantive or procedural? If you would change the court depending on that thing, then it's substantive- paper size or the like is not substantive. Statute of limitations can be either. Ct decides this is based on common law, Erie told us no such thing as general fed common law, we'll apply state rule from state where fed ct is sitting. Fed system should be able to vindicate its important interests, like throw out cases permanently if counsel lies or something. Here no fed interest or conflict. Fed rule is apply state law- claim preclusive in CA but has nothing to do with other states. Sovereignty v. Fed power. Arms of Erie, like Equality, we want results to be the same whether suit is brought in state or Fed Ct.
