CIVIL PROCEDURE IIFather Moore / Spring 2002

James P. Quinn

VII. DISCOVERY

Discovery, if conducted properly, leads to three desired results:

1. No surprises at trial 2. Accurate assessment of each side (encouraging settlement, more effective summary judgment) 3. Remove case from trial to some other form of resolution.

A. Modern Discovery

FRCP allow easy and broad discovery with few restrictions, which is consistent with “notice pleadings”

Discovery is a two-faced reality:

1. Informative: The more information you have about your opponent’s case and your own case the more likely you are to settle or to be successful in seeking summary judgment.

2. Expensive: The cost of discovery means the better financed side is able to wear down the underfinanced side.

B. The Possibilities and Limits of Discovery: Relevance and Privilege

What is Discoverable?

1. Any Matter 2. Not Privileged3. Relevant to the Claim or Defense 4. Of Any Party

(The former version of this rule read: A party may obtain discovery of any matter relevant to the subject matter involved in the action).

It is not necessary that the relevant information be admissible at trial, but only that it be relevant (new) and reasonably calculated to lead to the discovery of admissible evidence.

1. Relevance Rule 26(b)(1)

To be discoverable information must be “relevant to a claim or defense.” For information to be relevant means that the information tends to prove or disprove something which the law says matters.

Blank v. Sullivan & Cromwell

What was the purpose of Ms. Blank's interrogatories? To determine how many associates were made partners. Her charge was that she and her class were not hired by S & C as associates because they were female. So how can information about advancement to partner have anything to do with her case? General information on labor practices of

D casts light on their hiring decisions. Perhaps a similar pattern. Therefore S & C is directed to answer the interrogatories.

Steffan v. Cheney

After Steffan resigned from the US Naval Academy, he sought reinstatement by challenging a regulation requiring discharge of admitted homosexuals. Steffan sued Secretary of Defense Cheney, challenging the constitutionality of the regulation that provided for discharge of homosexuals. During discovery, Steffan, invoking his fifth amendment privilege against self-incrimination, refused to answer questions as to whether he engaged in homosexual conduct during or after his active duty. The district court dismissed Steffan’s action for failure to comply with discovery orders. On appeal, the court held that only evidence which is relevant to the issue being litigated may be discovered. If the basis for separation from the Academy was homosexual conduct, then the questions may have been relevant and the information discoverable. However, the reason for separation here was a statement made by Steffan in response to an inquiry by Academy supervisors. This does not put into question whether he engaged in the prohibited conduct. Therefore, this area was not discoverable.

Note: Discovery is allowed on issues which are admissible at trial or that will lead to discovery of admissible evidence. However, discovery may be denied even if the issue is relevant if it invades the right of privacy of the individual.

Note: Steffan was able to obtain immediate appellate review because the trial court dismissed his suit as a sanction for not answering deposition question, leading to final judgment. However, most discovery disputes are handled at the trial court level as in the Blank case. Blank is typical of the usual scope of discovery, using a broad definition of relevance.

Notes and Problems, p. 384 (supp.)

3. (a) No. Irrelevant to P’s injuries or D’s negligence

(b) Yes. In intentional torts, courts consider the wealth of D in determining amount of punitive damages to award P.

(c) Yes. P may determine whether D is covered by insurance. D must make available insurance information for required initial disclosure, even though this information is not relevant. Why this special rule for insurance coverage? So time is not wasted on pikers.

4. The 3 stages of discovery :

1. Each party must disclose information that they “may use to support” its claim or defense2. Each party may use the discovery devices to discover information relevant to any party’s claim or defense3. Each party may (with court permission and a showing of good cause) extend their discovery beyond the claims or defenses to the subject matter of the suit, or increase the number or duration of interrogatories or depositions beyond the scope specified in the Rules.

(a) Only what supports Albert's claim: medical and wage records; names (and if known addresses and phone numbers) of witnesses. Not poor driving record or potential loss of job.

(b) Names etc. of mechanic (if may use) and vagrant bystander. Not boss.

5. Rule 26a requires disclosure only of what that party "may use to support," while Rule 26(b) is broader, "relevant to claim or defense of any party."

(a) Boss – no, because no intention of using. Vagrant – yes, because may use.

(b) Yes, as a result of interrogatory asking for names of any witness with information relevant to Albert's claim, Barbara must disclose the name of her boss.

6. (a) But how broad is relevancy? Suppose you are attacking the reserve clause. Could you obtain discovery about management and financial affairs of all 32! teams in NFL? This is relevant under both old (subject matter) and new (claim or defense). Consider 26(c) and ask judge to protect against "annoyance, embarrassment, oppression, or undue burden or expense.” Also might have reached an agreement in parties' planning meeting under 26(f).

(b) Peters is killed while operating a backhoe which flipped. Mrs. Peters asks whether Digtrench is aware of any other accidents involving that model of backhoe. Digtrench limits its answer prior to P's accident. Are accidents subsequent to P's accident discoverable? Probably yes to explain how accident occurred. Perhaps it was a design defect and not failure to warn

2. Privilege Rule 26(b)(1)

To be discoverable information must also be “not privileged”. This means that information from certain sources must be protected.

Rule 26(b)(2)

Party may obtain any work product prepared in anticipation of litigation if it can show that: (1) it has substantial need for this information in preparation for its case and (2) it cannot get the equivalent without undue hardship. However, court will protect against disclosure of any of the following: mental impressions, opinions, legal theories and conclusions of the opposing party. This information is privileged because we don’t want anyone to get into the lawyer’s mind.

Notes and Problems, p. 494:

1. (a) Allege intentional injury. May A's lawyer ask B whether she intentionally collided with A? May B be compelled to answer? Yes. Surely relevant.

(b) Cannot use privilege against self-incrimination because this is the crime of battery and perhaps attempted vehicular homicide

Privilege may be waived. A criminal D invoking a privilege against self incrimination may waive that privilege by taking the stand and denying the crime. Having started to testify about the crime, he cannot then invoke the privilege when the prosecution seeks to cross-examine. Or a client can waive the attorney-client privilege by disclosing to some third party the contents of his statements to his lawyer – statements that would otherwise be privileged.

We need to probe the scope of attorney-client privilege. If Albert's attorney had an interrogatory asking Barbara whether she was speeding at the time (and she told her attorney that she was), is that protected under attorney-client privilege? No

But if interrogatory was whether Barbara told her attorney that she was speeding, that would be protected by attorney-client privilege. Yes, whole theory is to promote open communications between attorney and client.

Things get more complicated when we deal with a corporate client. How far down should the attorney-client privilege go? Many courts took the position that only communications with top management was protected. What did court hold in Upjohn case (495)?

The attorney-client privilege applies to corporations too. It covers any employee, even those at bottom, because attorney needs their candid information in order to advise client properly

So imagine case of individual v. corporation. Attorney for corporation interviews accountant employee of corporation. Protected from discovery by individual? Yes

Now, assume that the attorney for individual interviews accountant employed by individual. Protected from discovery by corporation? No

C. Surveying Discovery: Procedures and Methods

Rule 26(g): Certification by Attorney: Discovery requests and responses must be certified by the attorney that his request is not being done for any improper purpose and is not unduly burdensome

The ground rules for disclosure and discovery come in 2 stages: Stage 1: Required Disclosures – Rule 26(a)Stage 2: Further Discovery – Rule 26(b)

STAGE 1: REQUIRED DISCLOSURES Rule 26(a)

Parties must meet early in the suit. Within 14 days following this meeting each side must supply the names of witnesses, description of documents, calculation of damages, and copies of insurance agreements. These must be disclosed without being requested by the opposing party.

3 Types of Required Disclosures:

1. Initial Disclosures Rule 26(a)(1)

Parties MUST disclose: 14 days after 26(f) conference:

(A) Persons likely to have discoverable information, including name, address, phone (B) Documents that either party may use to support its claims or defenses(C) Computation of damages (relevant to P)(D) Insurance information to cover judgment (relevant to D)

Note: Parties can get around the requirements of 26(a)(1) through a local rule of district court, or a court order, or a stipulation of parties

2. Disclosure of Expert Testimony Rule 26(a)(2)

Parties MUST disclose: 90 days before trial:

(A) Experts that may be used at trial. (B) Produce a written report that contains relevant information about the expert including the experts’ opinions (the basis for his opinions; the information used to form his opinions, and any exhibits he will use in support of his opinions); qualifications of the expert, all publications authored by the expert within the last 10 years, any compensation he will receive for his testimony, and a listing of cases in which he testified in the last 4 years.

3. Pretrial Required Disclosure Rule 26(a)(3)

Parties MUST disclose: 30 days before trial:

(A) Witnesses who will testify in person (B) Witnesses who will testify by deposition(C) Documents that the party expects to offer, to be done 30 days before trial. Within 14 days of this disclosure, if a party objects to their use, it must serve a list of objections. Any objections not disclosed are waived.

Cases Exempt from Initial Disclosure Rule 26(a)(1)(E)

1. action for review on administrative record2. petition for habeus corpus to challenge a conviction or sentence3. a lawsuit brought without an attorney by a person in custody of the U.S.

4. a lawsuit to enforce or quash an administrative summons or subpoena5. a lawsuit by the U.S. to collect on a student loan guaranteed by the U.S.6. a proceeding subordinate to proceedings in other courts7. a lawsuit to enforce an arbitration award

Supplementation of Response Rule 26(e)

Party must supplement its response if it later learns that its response to a required disclosure is incomplete or incorrect.

Notes and Problems, p. 387 (supp.)

1. Alice claims damages when your client Baker refused to complete sale of car to her. File in state court with required disclosure similar to FRCP 26(a). You deny that a K existed.

(a) As attorney for Baker, what information must you disclose under 26(a)(1)? Name/address/phone number of any witnesses, plus perhaps his own name/address/phone number

(b) What information would Alice have to disclose? Basis for damages calculation under 26(a)(1)(C), plus her own n/a/pn

You notice that both 26(a)(1)(A) and (B) exclude matters "solely for impeachment." So record of previous case where judge found that Alice lied need not be disclosed. What if Baker's theory that Alice was lying was the central element in Baker's defense? Because the only purpose is to impeach A, the information need not be disclosed

2. When must this disclosure take place?

Rule 26(f) (71)--Parties' Planning Meeting (see Form 35 (190)). Requires parties to meet without judge at least 21 days before mandatory scheduling conference to discuss settlement, arrange 26(a)(1) disclosures and develop discovery plan. Parties then make required disclosures after or within 14 days of PPM.

Rule 16(b) (43) mandates scheduling conference "as soon as practicable but in any event within 90 days after the appearance of D and within 120 days after the complaint has been served on D."

What does it mean to “appear”? When filing a paper or motion or entry of appearance

26(d): No discovery is permitted until planning meeting

5. (a) Must disclose because of 26(e) duty to update (b) May not, unless such failure is harmless, use as evidence at trial. In addition, the court may impose sanctions (including expenses and attorney fees)

STAGE 2: FURTHER DISCOVERY Rule 26(b)

Once required disclosures have been made, parties may request additional information using interrogatories, depositions, requests for inspection of documents, mental and physical exams, and admissions.

Asking Questions: Interrogatories and Depositions (Rules 28, 30, 31, 32, 33, 37)

Interrogatories Rule 33

Send opposing party a list of questions to answer

Advantages: 1. Cheap for the Interrogator2. Convenient for the Interrogator

Disadvantages:1. Interrogator cannot follow up evasive answers2. Limited to 25 questions unless permission of court or stipulation of parties3. May be sent only to parties, but not to non-party witnesses

Oral Depositions Rules 28, 30, 31, 32

Deposition: the session at which testimony is recorded

Advantages:1. Lawyer can ask a series of questions that force the witness to take a position 2. Follow up if the witness is evasive 3. Follow up if his answers open up new avenues of inquiry4. May depose non-party witnesses

Disadvantages:1. Expensive for both parties2. Must have a method for recording. Many methods are available today.3. Restrictive

- 10 maximum- 7 hour limit per day- no person can be deposed twice without permission of court or opposing side

Depositions on Written Questions Rule 31

In this rarely used procedure the lawyer writes down the questions and sends them to the court reporter who asks questions and records answers of the witness.

Advantage:Cheaper than oral deposition

Disadvantage:Yields less information than an oral depositionWhy? It is difficult to frame follow-up questions without knowing what the witness will say in response to the initial inquiry. Or, the side being questioned could object that the questions are unjustified.

Notes and Problems, p. 389 (supp.):

1. Cora is injured by household appliance and brings action against Manufacturer. Cora serves 55 interrogatories on Manufacturer and 20 on Department Store; both refuse to answer. Questions are both relevant and not privileged.

(a) What may Cora do to force Store to answer? Nothing because only parties are subject to interrogatories--rule 33(a). So either amend complaint to make S answer or take S's deposition

(b) What may Cora do to force Manufacturer to answer? Rule 33(a) (93) limits number to 25 unless court permission or stipulation. Ways to get M to answer: File a motion to compel under 37(a)(2)(B) on the grounds you have made a good faith attempt to solve without court action. M waives its objections (to number of interrogatories) if they are not stated with particularity unless good cause shown--33(b)(4) (94)

2. Cora notices Manufacturer and asks M to designate (allowed under 30(b)(6)) employee or officer responsible for the design and safety engineering. Geraldine Chen is designated. After asking questions about her qualifications and responsibilities, Cora’s attorney asks questions about the financial structure of M. M's attorney believes these are outside the scope of designation (“The person designated shall testify as to matters known or reasonably available to the organization.” Rule 30(6)).

(a) What should M's attorney do? He should make an objection on the record, 30(c), and then allow Chen to answer because competency not waived unless immediately curable--32(d)(3)(A). This is not like privilege where you can tell client not to answer--30(d)(1) or argue that the questioner is demonstrating bad faith and seek to have the deposition terminated--30(d)(3).

(b) So what happens? Should Cora's attorney ask Chen to answer? Yes, because answers are subject to objection

(c) After 7 hours of deposing Chen, Cora's attorney wants to continue deposition, but M's attorney refuses. Cora may then seek permission of the other party to allow extension. If refused, then Cora's attorney may ask court to extend--26(b)(2). Cora’s best argument is that M's numerous objections caused the lengthening. It’s not Cora's fault

(d) Cora's attorney schedules an 11th deposition of another witness. On what grounds may M's attorney object? Limited to 10 depositions unless court allows for additional-- 30(a)(2)(A)

3. Cora's attorney asks Chen a series of questions about her communication to attorney. M's attorney instructs Chen not to answer--allowed by 30(d)(1). What can Cora's attorney do? After a good faith conference, move to compel--Rule 37.

Examining Things and People Rules 34 & 35

A party may request examination of things and property from any party. Production of documents (almost anything tangible) is possible. Production of things also possible from non-parties through rule 45. No numerical limits to production/inspection in the rules, but general limits about burdensomeness etc. in Rule 26. The requesting party is given some latitude because only the possessing party has a detailed knowledge of the documents. In almost every instance, it is a copy that the possessing party produces, either in the order that they were kept or by category of request. All this only after required disclosure which may reduce the amount of production.

Production and Inspection of Documents and Things Rule 34

The procedure for requesting documents differs according to whether one is requesting them from a party (requires a Rule 34 request) or a non-party (requires a subpoena issued according to Rule 45(a)(1)(C)).

Request to Examine1. State the items to be inspected2. Describe each item with particularity3. Specify a reasonable time, place, and manner of making the inspection

Response to the Request1. Serve a written response within 30 days after the service of the request2. State that the inspection and related activities will be permitted as requested3. State the reasons for any objections to the request

Unlike interrogatories or depositions, the number of document requests is not limited by the Rules. Documents play a central role in a case and the requesting party will want to examine the documents before proceeding with depositions.

Possible Problems with Document Requests:1. How should the requesting party identify the document in question?2. Who will bear the cost of production?

Physical and Mental Examinations Rule 35

Parties can get a physical/mental exam only with a court order showing:

1. Health is in controversy2. Good cause3. Notice to the person to be examined4. Specific time, place, manner, conditions, and scope of the exam and person who will

conduct it

By requesting and receiving a report of the examination, or by taking a deposition of the examiner, the party examined waives any privilege the party may have in that action or any other action involving the same controversy.

Note: A party can only take an exam of a person who is a party or a person in the party’s control (i.e., child of a parent who is a party to the action).

Problems, p. 391 (supp.):

1. Alice sues Centerville because she alleges police assaulted her during an afternoon demonstration and severely injured her.

(a) Must Centerville produce a photograph of Alice taken the night after the incident? Yes. Must disclose "unless used solely for impeachment"--26(a)(1)(B)). I believe that the primary purpose is a defense, so must disclose. If C chooses not to disclose, C runs the risk of not being allowed to use the photos as evidence at trial, or hearing or motion (unless C’s failure is deemed harmless)--37(c)(1)

(b) Suppose the Centerville does not believe that the photo must be disclosed, then Alice moves for production of "all documents, memoranda, and reports relating to the incident." Required? Yes, if document includes photograph, which rule 34(a) does

(c) Then Alice seeks sanctions for Centerville's failure to disclose photo. Centerville argues its failure was harmless because photo was eventually given to Alice. Result under 37(c)(1). This would be a close call. A had to go to trouble of a production request, yet A eventually got the photo. C’s sanction is that it would not be permitted to use the photos at trial, at hearing, or in a motion, in addition to, or in place of, reasonable expenses and standard sanctions under 37(b)(2).

Problems, p. 503:

2. Randolph brings action against Craven. R has reason to think that C's truck was serviced at Elaine's Garage and wants to see the service records. If E will not voluntarily produce the records, is there any way to force her to produce the records? Cannot use rule 34 because only for parties. Instead, use a subpoena: "command each person to whom it is directed ... to produce ... documents or tangible things in the possession"--45(a)(1)(C).

3. Pat is injured in auto crash with Dunham. D seeks an exam of P by a physician. Should it be granted? Yes, but only on court order for good cause shown and showing that physical condition is in controversy--Rule 35. Order should specify extent of exam and physician routine. Is P entitled to a copy of that report? Yes--35(b)(1). Is D entitled to copies of P’s reports? Yes, any report of the same physical condition, 35(b)(1).

4. If Pat's attorney and Dunham reach an agreement under rule 26(f) for Pat to be examined, is Pat's attorney entitled to a copy of the examining physician's report? Yes, unless agreement is otherwise-- rule 35(b)(3). Can P's attorney take the deposition of that doctor? Yes, if doctor is going to testify--26(b)(4)(A). P may also obtain it even if doctor is not going to testify, so long as he makes a showing of "exceptional circumstances" that he is unable to obtain this same information by other means--26(b)(4)(B)

5. Can Dunham obtain an eye examination of Jones, an eye-witness? No, only parties What if Jones is employee of P? No, an employee is not "in custody or legal control".

6. Elizabeth Learned sues Stateville U for employment discrimination for failure to hire. Based on affidavit of Dr. Pigge that feminists have severe mental problems and that he observed Elizabeth behaving in a psychotic manner, Stateville U asks for mental exam of E to support its theory that it refused to hire E because she is mentally unstable. Result? Deny, since too conclusory.

Asking Your Opponent to Admit Things

The real purpose of admission is not to uncover evidence but to take an issue out of controversy by eliminating undisputed issues. For example, that at the time in question,

the car was registered to Martha. Although rarely a discovery device, in a world of notice pleading requests for admission narrow the issues for trial. What if the request is for a central (core) issue of the litigation? May you refuse to respond? No, not a valid defense Effect of requested party doing nothing? Deemed admitted--some courts are moving to interpret this rule literally.

Requests for Admission Rule 36

A party may serve upon any other party a written request for the admission of any matters relating statements, opinions, or authenticity of documents. Each matter is deemed admitted unless the receiving party provides a written answer or objection (with reasons) to the request. The answer must specifically deny the matter or give reasons why the answering party cannot admit or deny the matter. The answering party may not give lack of information or knowledge as an excuse for not answering unless it states that it made a reasonable inquiry and the information it obtained is insufficient for it to admit or deny. If the court determines that an answer does not comply with the requirements of Rule 36, it may order either that the answer is admitted or that the answer be amended.

Can respond in one of three ways:1) admit2) deny3) object* cannot do nothing (after 30 days deemed admitted)

Notes and Problems, p. 505:

1. Suppose that P asks D to admit validity of contract and that D breached it. D refuses to admit. P prevails at trial. Is P entitled to expenses, including attorney fees? Yes.

Rule 37(c) allows a court to award fees if requesting party proves truth of matter unless: 1) request was objectionable 2) matter of no substantial importance 3) party had reasonable ground to believe that they might prevail on the matter 4) other good reason

2. In an accident at a Boy Scout camp, D's attorney finds a witness who saw four other boys stumble over the same wire. Must D admit this fact? Not necessarily, D may intend to contest this assertion (see 37(b): “unless…party failing to admit believed it might prevail on the matter”). If D admits, is that admission binding when another boy sues? No, binding only for this litigation--"not an admission for any other purpose nor may it be used against the party in any other proceeding"--36(b).

Why would you follow up an answer to an interrogatory with a request for an admission? It is easier to refute an answer with another piece of evidence, while admission takes the whole matter out of controversy (unless the admission is withdrawn or amended)--36(b).

Certifying Documents Rule 26(g)

Disclosures: An attorney’s signature certifies the disclosure is complete and correct at the time it is made.

Discovery Request, Response or Objection: An attorney’s signature certifies that the request, response or objection is:1. Warranted by existing law or by a good faith argument for the extension,

modification, or reversal of existing law2. Not being done for any improper purpose, such as to harass or delay or increase

litigation costs3. Not unreasonable or burdensome or expensive

If no signature is provided, it must be stricken unless it is signed promptly after the omission is called to its attention. If without justification a certification is made in violation of this Rule, the Court will impose a sanction that may include expenses and attorney fees.

Ensuring Compliance

Sanctions – 2 typical scenarios:

Before we seek sanctions, we must show the court that we tried in good faith to get the materials from the opposing party.

Scenario 1: Two-Step Required Rule 37:

If the party does not provide answers to all our questions, we may (1) move for a court order compelling him to answer all questions. (2) If the disobedient party does not cooperate even after the court order, then we may move for sanctions. The motion to compel disclosure must include a certification that we have made a good faith effort to secure the disclosure without court action. If the motion is granted, the Court may force the disobedient party to pay expenses, including attorney fees. If the motion is denied, the Court may make us pay to the disobedient party expenses and attorney fees. If the motion is partially granted and denied, then the Court may apportion the expenses between both parties.

Scenario 2: Immediate Sanctions Rule 37:

If the other party fails to do any of the following, we can move immediately for sanctions (good faith certificate required), and recover costs, including attorney fees.

Immediate Sanctions for: 1. not appearing for deposition (no good faith certificate required)2. not answering interrogatories 3. not responding to a written request for inspection 4. not participating in good faith in framing discovery plan--37(g)5. not certifying disclosures properly (no good faith certificate required)--26(g)

Types of Immediate Sanctions:1. deem certain facts established2. prohibit party from supporting or denying certain claims or defenses3. prohibit party from using certain evidence4. strike out pleadings, or freeze further proceedings until the order is obeyed, or

dismiss the action, or enter a default judgment5. enter contempt of court for failure to obey (except for mental/physical exam)

The Court will also require that the disobedient party pay the expenses, including attorney fees, caused by their failure to obey the court order.

A party that fails to disclose required information or to amend a prior response is not allowed to use such evidence at trial.

If a party fails to admit the genuineness of any document or truth of any matter requested and if the requesting party later proves the genuineness of the document or truth of the matter, the requesting party may apply to the court for an order requiring the other party to pay the reasonable expenses, including attorney fees, that they incurred in making that proof.

Problems, p. 392:

1. (a) What should the court do when Producer notices a deposition before disclosure? P has violated proper certification rule under 26(d) and so may seek sanctions directly under 26(g)(3)

(b) What should Supplier do if it believes that Producer's deposition notices are unnecessarily burdensome when done before interrogatories and requests for documents? Not show up? No. This would be improper. Supplier could be sanctioned, 37(d). Instead, Supplier ought to ask court for protective order under 26(c) that discovery may be had only on specific terms and conditions because of undue burden or expense, but first must certify good faith attempt to resolve privately.

2. Producer failed to disclose former officer who was present at contact negotiations and had knowledge of intent of parties. At trial Producer seeks to have this former officer testify. What objection may Supplier make? Violation of disclosure--37(c)(1), means P can't use at trial or hearing since not disclosed, plus additional sanctions under 37(b)(2).

3. Producer fails to disclose former officer, but wouldn't use because her testimony would be damaging to Producer. Any sanctions on Producer? Yes, costs caused by failure to disclosure--37(c)(1), plus full list of sanctions in 37(b)(2) (matter established, can't introduce other evidence to support or to rebut, strike pleadings, dismiss action or default judgment), and inform jury.

4. (a) Supplier seeks documents from Producer who simply does not produce. Supplier later learns of these documents. What step should Supplier take force Producer to produce. Is there anything that Producer can do for production or sanctions? They should follow 2-step formula: certification of good faith, then ask court for order to compel (entitled to own attorney fees unless Producer's position substantially justified). Then, only after further refusal may court impose sanctions.

(b) If two of the documents are letters from Producer to its attorney, what should Producer do? Seek a protective order under 26(c) to prevent discovery since this is protected by attorney/client privilege (again certify good faith attempt to resolve privately). Otherwise when Supplier seeks motion to compel under rule 37(a), Producer can assert defense of attorney/client privilege to justify non-compliance--37(a)(4). Any advantage to one procedure over the other? A protective order is more proactive. Asserting the defense of attorney/client privilege may seem like truculent attitude, plus 34(b) requires a response.

(c) What if Producer's response is simply to state that they are protected by attorney-client privilege? P should make their claim expressly and describe the document/communication in enough detail to allow S "to assess the applicability of the privilege or protection" without disclosing privileged information—26(b)(5). P should fill out a discovery log--list each item (e.g., date of each letter), indicating their specific reasons for objecting. If Producer had not done this, then Supplier could move for an order compelling disclosure of the documents. The motion must include a certification of good faith that Supplier tried to resolve this privately. Good news is that most discovery is uneventful, done without court supervision. Most discovery disputes are handled by magistrate judges. Remember that the factual preparation for trial may include informal investigations (i.e. research over the web) outside of the discovery devices, often more useful.

Shuffle Master, Inc. v. Progressive Games, Inc.In a patent infringement dispute, one party was unhappy with answers to interrogatories and requests for production. It sent of series of faxes over months (only one phone call) to opposing counsel and then sought an order to compel. The court found that party had failed to certify attempting to confer in good faith and so denied the order to compel. The courts required as a minimum: "the names of the parties who conferred or attempted to confer, the manner by which they communicated, the date and time of that communication, the specific discovery disputes discussed, and the results of their meaningful discussions, if any or an explanation as to why such meaning discussions were not had."

D. Discovery and Privacy

Any discovery is in a sense invasive, so it becomes a matter of degree weighing the usefulness of the information sought versus the burden imposed. Under 26(g) every request for discovery and every response must be signed by attorney/party and that signature certifies that the document is in conformity with the discovery rules and not for any improper purpose. In addition, rule 26(c) allows parties to seek from the judge protective orders with a certification of good faith.

1. The General Problem of Privacy

Stalnaker v. Kmart Corp.

Stalnaker brought a sexual harassment suit in federal district court against Kmart and its employee Graves. Stalnaker alleged that Graves created a hostile work environment and sexually harassed her by inappropriate touching. Stalnaker sought to discover information regarding the alleged voluntary sexual activity of four other non-party witnesses who were employees at Kmart. Kmart moved for a protective order under Rule 26(c) to protect these four employees. Kmart argued that none of them had complained of sexual harassment; that any voluntary sexual activities of the witnesses were irrelevant; that inquiry into these activities would invade their privacy rights and cause them embarrassment and humiliation; that Fed. R. Evid. 412 bars inquiry into such activities. Stalnaker argued that these other witnesses could possess relevant information about sexual harassment at Kmart.

Rule 26(b) permits a broad scope of discovery, allowing parties to discover information regarding any matter, not privileged, which is relevant to the claim or defense (old version: subject matter) of any party. However, under 26(c), the court may enter a protective order totally blocking discovery or limiting discovery to certain matters.

Although Fed. R. Evid. 412 applies generally to sexual harassment cases, the court did not find that it controlled here (confirmed by Fr. Moore) because the rule only applies in cases where the person against whom the evidence is offered is a victim of sexual misconduct. At the same time, Kmart showed that the voluntary sexual activities of the other witnesses had no relationship to the claim against Kmart. However, any sexual harassment committed on Stalnaker by Graves is relevant. Therefore, the court will not prevent the discovery of voluntary sexual activities to the extent they show that Graves encouraged any employee of Kmart to engage in such activities. Discovery is only permitted for purposes of this case and cannot be disclosed to anyone outside the suit.

Notes and Problems, p. 511

2. (a) What types of questions would be appropriate of Ms. Rozenberg? Whether Graves harassed her or even had a voluntary relationship with her, whether she had seen G harass others. What questions would be barred by protective order? R's other romantic/sexual relationships, other voluntary relationships at work.

(b) Would it be proper for Stalnaker's attorney to ask R whether she ever had a romantic or sexual relationship with G? Yes, but the court goes on to limit this "to the extent it shows any conduct on his part to encourage, solicit, or influence any employee of defendant to engage or continue in such activities." (510) But how do you show G's intent to continue without first inquiring into the activity? (Implication is that court did not think this issue all the way through.)

(c) "Did you ever have a romantic or sexual relationship with Mr. Graves that he in any way encouraged or solicited?" Yes, this is a safer question.

3. The motion for a protective order was made by Kmart, not the deponents. Is it fair to infer they did not care being asked these questions? Unclear. Perhaps employees were happy that they avoided cost of hiring own attorneys and let Kmart's attorney do the work

4. (a) P’s attorney had a good argument for the relevance of the information sought. But what other purposes could he have had in seeking this information? Place Kmart on defensive in settlement negotiations if testimony shows a workplace rife with improper sexual relations.

(b) Suppose Rozenberg is unhappy with scope of protective order. As her attorney what do you tell her about further limits? You could argue further the issue of embarrassment, but unless your position is substantially justified (she might have a more particularized reason such as pending divorce, and these matters would be handled in a sealed, in camera hearing), you could end up paying Kmart's legal fees for this part of dispute

(c) Suppose that Rozenberg is unhappy with scope of deposition (whether modified for her or not), so just not appear at deposition or refuses to answer question? If she does not appear, she would be subject to immediate sanctions including contempt of court-- 37(d)(1). Evasive answers are treated as non-answer--37(a)(3).

5. Ordinarily, you are stuck with judge's discovery rulings until after final judgment. Exception is if you believe you are being forced to disclose privileged information. Then contempt and immediate appeal. How is the situation different here? You can appeal magistrate judge's ruling to district court judge. By what standard? "Clearly erroneous or contrary to law." Under rule 72(a), objection to magistrate's ruling must be made within 10 days of being served the ruling. Because so much of rule 26(c) is up to this discretion of the trial judge, it is hard to draw exact lines.

6. Nancy Clark underwent an abortion at Thomas Jefferson Hospital. As a result of complications she eventually had a hysterectomy. She seeks damages for being rendered sterile and for severe mental depression. At a deposition Clark is asked about her social relationships, name of putative father and her emotional state. She refuses. May she be compelled? Yes. She claimed emotional damage, so her social relationships may provide information about her previous and current emotional situation. Likewise the putative father has similar information about her social relationships. Her emotional state is also clearly relevant. Do the doctors and hospital have to release identity of prior abortion recipients? Most states have privilege of physician-patient. Therefore, probably not if state law controls. Could either Clark or hospital depose former patients to see what side effect previous abortions had? 26c gives broad discretionary power to court to prevent discovery if it involves "annoyance, embarrassment, oppression or undue burden." So as a matter of discretion, the court might prohibit such questions, but it will probably be up to hospital and doctors or former patients to make the argument. In federal common law, these are privileged: 1. attorney-client 2. self-incrimination--complete 5th Amend protection 3. informer 4. state secret 5. spouse--but need not be observed if spouse doesn't want to 6. clergy

Note: physician-patient is not privileged under federal common law (but may recognize it) – neither is newsperson, but Jaffee suggests movement in that direction.

7. (a & b) These examples highlight the crucial role of the court when evidence is found to be relevant but not privileged. The court allowed discovery of names of donors of blood when they contracted HIV infection from the transfusions because the donors, being already dead, had less privacy interest. Yet in a tenure dispute, court protected sensitive scholarly critiques of reviewers in other tenure cases.

(c) When the school promises confidentiality for a disciplinary hearing I would be hesitant to allow my client to testify for fear that later a court might force disclosure of the record. At that point, I could only make an estoppel argument.

Given the scope of discovery perhaps you ought to counsel your client, before filing his action, about the possible disclosures the client may have to make.

8. In addition to claiming that the material sought in discovery is irrelevant or privileged, rule 26(c) allows court as a matter of discretion to allow discovery into certain matters even if privileged. Consider the Coca-Cola case, where bottlers claimed they were entitled to larger share of profits from Diet Coke. The bottlers claimed the best way was to compare ingredients. The court offered to keep ingredients confidential (trade secret) and not to disclose to third parties. Yet Coke still refused to comply and suffered sanction of negative inference and costs for sanctions.

One of the hot button topics is spillover effect of discovery to other similar cases that must defended. Why is it nearly impossible to develop protection against the same attorney using that information in a similar case? Returning documents will not prevent P's attorney from knowing exactly what information to seek. Ds often obtain a protective order prohibiting the P's attorney from sharing that information with other attorneys, at least trade secrets. This works unless discovery is filed with the court and becomes part of the public record. But under 5(d), items used in disclosures and discovery must not be filed with the court until used in a proceeding. Such secrecy agreements are very popular with Ds--makes Ps work harder; Ps receive extra amount for this claim and so more willing to settle; P's attorney agrees to return all documents and agrees to liquidated damages if disclosed; and usually terms of agreement are also secret. If part of consent decree, backed up by contempt power of court. What is a criticism of such settlement agreements? They hide defects from public criticism and discourage other meritorious claims because of need to do duplicative discovery.

10. (c) Baker v. General Motors examines confidentiality in another context. Elwell, a former engineer for GM, was bound by a consent decree in Michigan state court not to testify about GM without GM's approval. Baker in an action in federal court in Missouri called Elwell. Why, according to USSC, is the federal court in Missouri not bound? The Michigan consent decree cannot reach beyond Michigan into other states.

2. A Special Instance: Physical and Mental Examinations

Rule 35 is a bit different from all of the other modes of discovery. If the party is unwilling to submit to an examination, it requires a court order.

Before ordering a physical or mental examination, the court must find:

1. the physical or mental condition of the individual is in controversy 2. there is good cause for the examination

Schlagenhauf v. Holder

Passengers of a Greyhound bus suffered personal injuries when their bus collided with a tractor trailer. The injured passengers brought a negligence claim against Greyhound (bus), Schlagenhauf (driver), Contract Carriers (owner of tractor), and against the owner and driver of the trailer. Greyhound brought a cross-claim against Contract Carriers and the trailer owner. Contract Carriers answered the cross claim by stating that the collision was caused by Schlagenhauf’s own negligence. Contract Carriers petitioned for 4 mental and physical exams of Schlagenhauf, which was granted (9 exams) by the District Court. Schlagenhauf applied for a writ of mandamus (not an appeal but an independent action against the court or judge, alleging that a court order is unlawful) against the District Court judge, which was denied by the Court of Appeals. The Supreme Court granted certiorari to review the application of Rule 35 to this case.

Under Rule 35, a person who moves for a mental or physical exam of a party who has not asserted his mental or physical condition either in support or defense of a claim must show that the condition sought to be examined is in controversy and there is good cause for requesting the exam. Since Schlagenhauf did not assert his mental or physical condition in support of or defense of a claim, Contract must show that Schlagenhauf’s mental or physical condition was in controversy and there was good cause for the exam requested. Nothing in the pleadings or in the affidavit would support a basis for a belief that Schlagenhauf was suffering from mental or physical condition warranting an exam.

What do the requirements of “in controversy” and “good cause” mean according to Justice Goldberg? “An affirmative showing by the movant that each condition as to which the examination is sought is really and genuinely in controversy and that good cause exists for ordering each particular examination.”

Why do Black & Clark (concurring and dissenting) and Douglas write separately? Black thinks that there was enough showing of good cause to place in controversy S's mental and physical condition – even P’s conclusory allegation was sufficient. Douglas, on the other hand, thinks that there is insufficient reason for any sort of examination of S. Only places condition in controversy. Ultimately his concern is based on a First Amendment concern about the inviolability of the individual.

Note: Examinations apply to any party. Doesn’t have to be an opposing party.

Notes and Problems, p. 524

3. (a) Majority answer is no, although it can be up to discretion of court whether to allow attorney or physician to be present during examination. Attorney or physician might interfere with exam.

(b) If court could find physician of Pat's sect who is qualified to perform examination, then might order that the court specify "the time, place, manner, conditions, and scope of the examination and the person or persons by whom it is to be made." Now rule allows "suitably licensed or certified examiner," instead of just physician or psychologist.

(c) Pat might convince court to allow only a less stressful type of exam

4. What about examination of non-parties? Rule 35 allows only one exception--"a person under the custody and legal control"--to the general rule that only parties may be ordered examined. What is meant is a child of a party. A spouse today is not under the custody and control of the other spouse.

E. Discovery in an Adversary System

1. Privilege and Trial Preparation Material

Hickman v. Taylor

Hickman’s husband was killed in a ship sinking incident while employed on the J.M. Taylor. Hickman sued the tug for wrongful death. Taylor’s attorney Fortenbaugh interviewed various persons with information about the case in anticipation of possible litigation. He collected the information in various forms including written statements, private memos, and oral recollections. Hickman sought discovery of this information. Fortenbaugh objected that this information was privileged. District Court ruled information was not privileged. Court of Appeals reversed and held that the information sought constituted attorney work product and was therefore privileged. Supreme Court granted certiorari.

The Supreme Court considered the issue of whether the information prepared by Fortenbaugh in anticipation of litigation was privileged and protected from discovery.

The information requested was not within the attorney-client privilege because it did not involve communication between attorney and client. However, any work produced in anticipation of litigation is free from discovery unless the requesting party can show a substantial need for the materials and an inability to obtain equivalent material by other means. The written statements and private memos contained information that is readily available to Hickman because it is possible to reach most of the witnesses to the sinking.

Notes and Problems, p. 535

2. (a) Does 26(b)(3) cover insurance adjusters and investigators? Yes, if in anticipation of litigation or for trial.

(c) What about factual information, discoverable? Yes, remember that F answered the questions about whom he interviewed and what facts he uncovered

(d) If something is covered by work product doctrine, any way to obtain discovery? Upon a showing of substantial need and undue hardship

3. (a) Vice President of claim department makes an investigation after an accident. Covered by 26b3? No, regular operation -arguable

(b) B's attorney spends $10,000 to find another witness. Is that name discoverable? Yes, because not "documents or tangible things," plus duty to disclosure under 26(a)(1)(A) and duty to update under 26(e)(1)

5. (a) Allow discovery because this would be the only way to obtain this information, but protect against disclosure of F's mental impression

(b) Again, allow discovery because can't remember

(c) As to surveillance films and videotapes, certainly not a statement. Relevant, but tangible things in preparation for litigation

7. Ruling on the attorney-client privilege is easy when court is dealing with an individual client. What about a corporate client? Upjohn case held that all corporate employees' conversations with an attorney are privileged, so this privilege is absolute unless waived, unlike work product doctrine. How would Upjohn change result in

Hickman? F's conversations with crew members are privileged. What would be the additional effects on Hickman's attorney? You can't talk to employees without permission of the other party’s attorney.

2. Expert Information

Disclosure of Expert Testimony Rule 26(a)(2)

(A) Identify those experts that may be used at trial. (B) Produce a written report that contains relevant information about the expert including the experts’ opinions (the basis for his opinions; the information used to form his opinions, and any exhibits he will use in support of his opinions); qualifications of the expert, all publications authored by the expert within the last 10 years, any compensation he will receive for his testimony, and a listing of cases in which he testified in the last 4 years.

Trial Preparation: Experts Rule 26(b)(4)

(A) A party may depose any person who has been identified as an expert whose opinions may be presented at trial. If a report from the expert is required, the deposition shall not be conducted until after the report is provided.(B) A party may, through interrogatories or by deposition, discover facts known or opinions held by an expert used in anticipation of litigation and who is not expected to be called as a witness at trial only as provided in Rule 35(b) or 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.(C) Unless injustice would result, the court shall require that the party seeking discovery pay the expert a reasonable fee for time spent in responding to discovery and shall require the party seeking discovery to pay the other party a fair portion of the fees and expenses that the latter party incurred in obtaining facts and opinions from the expert.

Notes and Problems, p. 538

2. (a) Under 26(a)(1)(A) and 26(a)(2)(A)--Dr. Kildare's and Dr. Welby's names as having favorable information and reports

Under 26(a)(2)(B)--names, reports, opinions, data, qualifications, publications (10 yrs), compensation, previous expert testimony (4 yrs), probably just for Dr. Welby, as he has been hired by John’s attorney to be used at trial to present evidence. Unless Dr. Kildare is specially retained by John’s attorney, no report will be needed from him, but his notes could be subpoenaed

(b) Under 26(a)(1)(A) and (B)--maybe Dr. Welby's name and report but nothing under 26(a)(2) since he is not testifying

(c) If Dr. Welby is going to testify, may Mary's lawyer depose? Yes, but the deposition may be held only after the doctor’s required report is given--26(b)(4)(A)

There tension between 26(a)(1)(A) which limits disclosure to "discoverable information" (non-testifying experts are generally not discoverable) with the following: how can the other party make the exceptional circumstances showing unless that party first knows about the non-testifying expert?

Suppose as note 3b asks, there is sufficient support of John's claim to force disclosure of Dr. W's name. May Mary's attorney depose or call Dr. W or can John's attorney get a protective order to prevent deposing Dr. W? Under 26(b)(4)(B), discovery of non-testifying expert is permitted only upon a showing of "exceptional circumstances". I would argue that Mary's attorney must first obtain a court order before deposing Dr. W, much less call as a witness, so a protective order is unnecessary

What constitutes “exceptional circumstances”? Read Thompson below.

Thompson v. Haskell Co.

Thompson brought a sexual harassment suit against her employer Haskell and employer Zona. She alleged that Zona’s abuse reduced her to a severely depressed emotional state and she was terminated from her job when she resisted his advances. D sought discovery of doctor report that contained an exam performed by Dr. Lucas 10 days after her termination. Normally such information would be protected from discovery under 26(b)(4). However, the court found that no other comparable report was prepared during the weeks immediately after her termination and D could not obtain the information contained in Dr. Lucas’ report by other means. (Remember that litigation had not begun, so rule 35 exam was not possible) Chiquita International Ltd. v. M/V Bolero Reefer

Chiquita alleged that due to malfunction of loading gear on International Reefer's ship, IR did not ship the full load from Ecuador to Germany and bananas arrived in poor condition. IR sought to depose Winer, a marine surveyor who had been hired by C to examine the ship’s loading gear upon arrival in Germany, and production of his report. C objected to these demands by saying Winer was a non-testifying expert as to whom discovery is barred under 26(b)(4)(B). IR argued that Winer was a fact witness rather than an expert. Should Winer and his report be subject to discovery? No, held the court. Why? Winer was not a fact witness. He was an expert because he was specifically hired by C to examine the loading gear and use his technical knowledge in offering his opinion to C. These were not exceptional circumstances because IR was not prevented from sending its own expert. IR had control of the vessel for entire 3 week trip. However, if Winer’s files contained any discoverable information given to him by others, this information would have to be disclosed by C. How do you justify suppression of crucial facts in Chiquita? This information should be suppressed because each side should do its own discovery

Why different results about the expert's report in Thompson and Chiquita? What factual changes would lead to the opposite result? Thompson: If Ms Thompson had filed her lawsuit immediately upon termination. Chiquita: If Winer had inspected the ship and then it had sunk immediately thereafter.

Additional hypos:

Often a person, such as Dr. Kildare, begins as an ordinary witness. Until a person is hired as an expert, he is given no special protection under 26(b)(4).

Suppose that after a court denies production or deposition of a non-testifying expert, the other side calls that expert as a witness at trial. Allowed?

Although there is no constitutional or statutory immunity, it hinders an attorney's evaluation and preparation; it encourages free riders; it diminishes the willingness of experts to be hired if they know that they are likely to be called; it presents practical problems if an expert is hired, but then testifies in a way favorable to both sides, since the hiring side will then be forced to discredit the very person it hired

F. Ensuring Compliance and Controlling Abuse of Discovery

1. Anatomy of Discovery Abuses

Discovery Abuses:

1. Too little discovery (“stonewalling”) – one party resists or refuses the other party’s requests for discovery – can respond with sanctions2. Too much discovery – one party seeks more discovery than the case justifies so as to discourage or hamper the opponent 3. Mismatched discovery – two parties have significantly unequal wealth; even if the richer party does not abuse discovery, he may have an unfair advantage

Tools to prevent too much discovery:

1. Scope of discovery – limited to the "claim or defense" 2. Signatures to discovery requests – certify that the signer’s request is not "unreasonable or unduly burdensome." Rule 26(g)3. Numerical limits – 25 interrogatories; 10 depositions, each limited to 7 hours (unless court allows more). Even if party works within numerical limits, a court may issue protective orders or call a discovery conference under rule 16.

Discovery Sanctions: Rule 37(b)(2)

(A) Fact Established; (B) Evidence Excluded; (C) Strike Pleadings (default judgment or involuntary dismissal); (D) Contempt of Court AND reasonable expenses caused by failure to follow order

Rule 37(a)(4)--basically costs for getting order to compel (unless court finds that the other side was substantially justified in failing to cooperate)

What causes the kind of lawyer behavior that results in sanctions?

1. The profession is becoming younger, as new lawyers starting their careers outnumber older practitioners2. The larger size of the profession means that any 2 lawyers will probably never see each other again

Notes and Problems, p. 395 (supp)

1. Arthur Corp. brings action against Baxter Corp for breach of K. After disclosures, by interrogatories A seeks details of corporate organization, which officers and employees are responsible for what. B claiming this request is irrelevant to claims or defenses and refuses to answer. A believes information is needed to determine who to depose.

(a) How should A's attorney go about getting answers to interrogatories? Rule 37(a)(2)(B)--apply for motion to compel with certificate (of good faith)

(b) Can A obtain sanctions? No, because B responded. Thus no 37(d)(2)), unless court believed that under 33(b)(4) B’s objection was not stated with specificity. More likely A may obtain sanctions only after Baxter refuses to obey motion to compel.

2. If after being noticed, A does not show up for deposition, what sanction may B's attorney obtain? Sanctions under 37(d)(1)--no certificate required. Any sanction that is just, probably costs incurred by A’s nonattendance

3. When B's attorney seeks sanctions, A's attorney claims that B purposefully scheduled the deposition at extremely inconvenient time and place. This is not a valid defense. Before the time of the scheduled deposition, A's attorney should have sought a protective order under rule 26(c). “The failure to attend a deposition may not be excused unless the party failing to act has a pending motion for a protective order”--Rule 37(d). So still award costs for A's failure to attend.

4. A's attorney believes that B's attorney has skated to edge by raising barely tenable objections. 7 hours have been consumed. What ought A's attorney do? Call for an extension of the deposition under 30(d)(2). Another possibility is a pretrial conference under rule 16(c)

5. A believes B has been uncooperative--making barely tenable objections, producing only when threatened with sanctions, producing incomplete documents and then burying documents in overwhelming mass, see 34(b) third ¶: "A party who produces documents for inspection shall produce them as they are kept in the usual course of business or shall organize and label them to correspond with the categories in the request." A pretrial conference under FRCP 16 seems best way to untangle these multiple problems

6. Although Baxter's counterclaim is for only $5000, B's attorney has scheduled depositions costing at least $10,000. Anything Arthur's attorney can do? Seek a protective order under 26(c)(2) ("discovery only be had on specified terms and conditions") because amount of discovery is unduly burdensome or expensive “taking into account ... the amount in controversy, the parties' resources" 26(b)(2)

What should you do if you do not have financial resources to pay for extensive discovery but your opponent does? (1) Use informal discovery techniques and be smarter in picking formal discovery; (2) "piggy back" on someone else's discovery in a separate but related action (all parties get copies of all discovery). But now rule 5(d) prohibits filing discovery at the court until it is used in a proceeding (court's file space being used up)

But better financed side may wear out the other. Any remedy? No, unless a violation of 26(b)(2), where you would show that "the expense of the proposed discovery outweighs its likely benefit…taking into account the party’s resources"

Beside judicial supervision of discovery, the other way to prevent abuse is to sanction it after it occurs. However, courts continue to show reluctance to sanction parties for minor violations (busy courts hesitant to spend time to determine whether cost shifting is justified). Even when the court suspects a serious violation, the time involved in resolving such fact-specific disputes causes hesitation.

Chudasama v. Mazda Motor Corp.

Wife was injured when C lost control of MPV and collided with a utility pole. C filed a products liability suit against M. Their claim alleged 2 defects in the MPV: (1) brakes caused driver’s unexpected loss of control; (2) doors side panels were inadequately designed and failed to provide for occupant safety. C's complaint is standard for products liability (strict liability, breach of implied warranty and negligent design and manufacture) but added a fraud count (they marketed van as a passenger car when it only was designed and constructed as a multipurpose vehicle and only passed those safety tests).

Both sides, according to the circuit court, behaved badly: C's interrogatories (arguably 635) and requests for production (almost any paper M ever produced, especially any connected with advertising) were vague and overly broad. M's response with delay and non-cooperation was also wrong: (1) boilerplate objections, (2) motion to dismiss fraud count, (3) non-sharing protective order of materials produced, (4) withholding of documents. This eventually led to "unbridled legal warfare".

Despite M asking for rulings on its objections at least 25 times and motion to dismiss, trial court refused. Trial court did issue a protective order, [only to the extent of not sharing with M’s competitors, but did allow C to share with other potential plaintiffs]

Ultimately, C asked for an order to compel that trial court amazingly granted in 3 days giving M only 15 days to produce. M made a Herculean effort to comply, but failed. Finally, trial court struck answer and entered default against M (leaving only issue of damages). Also trial court vacated protective order. When trial court refused to stay vacating protective order, M asked for certification for issue as immediate appeal under § 1292(b). The circuit court accepted interlocutory appeal, but broadened it to entire sanctions order.

According to the circuit court, what did trial court do wrong? failed to rule on M’s motion to dismiss the fraud count (which substantially widened the scope of discovery) and M's other motions; failed to intervene when mutual warfare broke out; lacked a basis under either 26(g) or 37(b)(2) to sanction; turning over M's secret information

The order to compel should not have been issued until after the trial court ruled on motion to dismiss the fraud count. How can you know the needs of the case (required by 26(b)(2), (g)(2)(C)) until you know the scope of the claims?

Because trial court failed to explain its order to compel in the face of M's non-frivolous objections, the resulting sanctions are not justified. This was an abuse of discretion.

The severest sanctions were not justified under 26(g) due to M's failure to cooperate, because it was brought on by the trial court’s failure to rule on M's objections and manage discovery. This was also an abuse of discretion.

Therefore, both order to compel and sanctions were vacated and case was remanded to be assigned to another judge.

Additional Notes:

Self help is never a justification – seek a protective order before resorting to self help

If you refuse to turn over the requested information – court will hold you in contempt – but this sanction is appealable

What could you possibly do in response when the trial judge demands that you turn over documents immediately? You could contact the other party’s attorney and try to settle. Otherwise you could file a writ of mandamus and ask the court of appeals to have trial judge modify his request

Signer of ever request must certify that the amount of discovery requested matches the amount in controversy (26(g))

VIII. RESOLUTION WITHOUT TRIAL

Very few cases actually get tried (1 out of every 50 or 2.3%). Why? Most cases get settled – with or without the help of a judge. What is the engine driving the parties toward trial? Devices such as involuntary dismissal (P) and default judgment (D).

A. The Pressure to Choose Adjudication or an Alternative

1. Default and Default Judgments Rule 55

Default Judgment: Serves as the ultimate pressure on D. Occurs when D refuses to respond to P’s claim, often by not appearing for trial.

Notes and Problems, p. 567

1. (a) You serve D with process. Twenty days pass, and you have not heard from D. What should you do? First make a good faith effort to confer with the other party. (You cannot get a default without first warning the other party). Call the other party’s attorney. Ask why they have not answered within 20 days. Better yet, write a letter notifying the other party that they are tardy and that if they do not answer you will seek a default, and if necessary, a default judgment.

(b) You request a waiver of service and D signs and returns the waiver form. How long must you wait before being justified in seeking a default judgment? Minimum is 60 days from day that you sent waiver request. It could be more, however, depending what you tell the other party.

2. (a) State precisely the steps you must take to obtain a default judgment: (Rule 55):Request from the court clerk an “entry of default” (= D is liable so at this stage D can only argue the amount of damages). Under this option, you must show proof (with an affidavit) that they have been served and that they have not responded. If the other party made no appearance, then no notice is needed. If the other party did appear, then you must give the other party 3 days notice before court hearing (appearance - notice - hearing).

(i) If there is no appearance and it is for a sum certain (an amount that can be determined from the pleadings), file a motion for default judgment (plus affidavit) with clerk. (ii) If there is no appearance and the sum is not certain, then file an application with court for default judgment. Judge will hold a hearing on amount of damages, and then enter judgment for that amount.

(b) What does it mean to “appear” in an action where one has failed to plead or defend? To file an answer, or file a motion, or appear before the court

Additional Hypos:

Suppose you represent D and you have not been informed about default and default judgment has been entered. What do you do?File a motion to set aside entry of default--55(c) (easier); File a motion to vacate judgment--60(b)

Suppose in this auto accident case, there is notice and the court grants a hearing. What happens at the hearing? P must “prove up” damages, even if a jury is required. May D contest liability? No, because liability has already been determined with entry of default judgment. The only purpose after the entry was to determine damages at a court hearing.

Rule 55 deals with granting default judgment to party seeking affirmative relief. For example, a D on a counterclaim could ask for a default judgment against P.

Peralta v. Heights Medical Center

HMC sued Peralta on their guarantee to pay medical expenses for an employee of Peralta. Peralta was improperly served (he was served too late – under TX law, after 90 days it is a nullity). HMC entered a default on Peralta’s failure to respond. A judgment lien was placed on real estate belonging to Peralta. The property was sold at a marshal’s sale at a large discount. Peralta filed an action to void the sale and to have the default set aside, alleging service was invalid. Trial court granted summary judgment and dismissed the action, holding that Peralta had to show a meritorious defense to the underlying action (which he could not do). Texas Court of Appeals affirmed. Supreme Court granted review, and reversed. Why? Wasn’t the Texas court justified since it was expected that Peralta would lose on the merits anyway? A meritorious defense is not required to set aside a default judgment entered after improper service. Due process requires valid notice before entry of a default judgment even if the same result is expected to occur. Arguably, if Peralta was properly notified, he might have impleaded employee, worked out a settlement, sold other property to satisfy the judgment, or taken other measures to avoid having his real property encumbered by a lien.

2. Failure to Prosecute: Involuntary Dismissal Rule 41(b)

Involuntary Dismissal: Serves as the ultimate pressure on P. Occurs when P initiates a suit but then fails to prosecute or disobeys court orders. But why should D complain about a P who fails to follow through with his lawsuit? Because if P has put a lien on D’s property, then D cannot sell or mortgage it. Also, P’s filing stops statute of limitations. The P may appeal an involuntary dismissal as a final order

Notes and Problems, p. 573

1. (a) In which scenarios would involuntary dismissal for failure to prosecute be justified? Before answering, ask the following questions:

1. Who is responsible? The more the actual party is at fault, the more willing the court is to impose dismissal. The more their attorney is at fault, the less willing the court is to impose dismissal. 2. How long must D wait? Generally speaking, the longer the delay, the greater is the presumption that D will be harmed. 3. Can D show actual harm? If D can show actual harm, courts will be more sympathetic than if D argues presumed harm4. Has D attempted lesser sanctions but failed?5. Is P’s failure to prosecute intentional or negligent?

If “yes” to the above, then perhaps allow P another chance (but have him pay costs)

(b) Additional facts: P’s attorney asked for a special date; transportation was available (though he claimed there wasn’t). In this case, involuntary dismissal is appropriate.

Note: Involuntary dismissals are presumed to be “with prejudice”. To dismiss with prejudice means that the suit can never be re-filed (bars P from suing on the same claim)

3. Voluntary Dismissal Rule 41

May P dismiss without prejudice a case after he has filed it? Yes

How can P obtain a voluntary dismissal of his case?

1. Before D answers or files motion for SJ (can be done only once) * 2. Get a signed written agreement of all parties (can be done only once) 3. By permission of the court

Note: Because a voluntary dismissal is normally not considered a final order, it is not appealable. A voluntary dismissal does not prevent a later re-filing of the suit unless there has been a previous dismissal or the dismissal itself contains a provision that prevents re-filing (usually agreed to by P in settlement negotiations).

* If P wants to obtain a voluntary dismissal after D has answered or filed a motion for summary judgment, then there are 3 options: (1) all parties sign a written agreement providing for voluntary dismissal; (2) the court grants permission; or (3) dismiss the case with prejudice.

B. Avoiding Adjudication

1. Negotiation and Settlement

Most cases end with a settlement. Settlements are contracts reached through negotiation. Each party seeks to maximize its interest through the negotiation. Some argue that settlements are qualitatively better than litigation because each side gets what it wants. Others argue that quality of outcome suffers in favor of expediency. There are 2 competing schools of thought with regard to negotiation: one group sees negotiation as adversarial – a zero-sum game; the other group sees negotiation as cooperative – a win/win proposition (this approach is more effective).

If your client (D) were to ask you if you could settle his case and how much it would cost, what would you tell him? Some of it will depend on the merits of the case, that is, how strong is our case? How sympathetic would P be as a witness? Could you persuade P and his attorney that the offer was good? How much effort have we already put into this case? How close are we to trial?

The parties can reach settlement in a variety of ways: a meeting of lawyers, a series of phone calls, or an exchange of documents. Regardless of the form of their agreement, do parties need a judge’s approval of their deal? No. In an ordinary case the judge does not examine or approve the settlement. The exceptions are cases involving class actions, multi-defendants, minors, and incompetents. Why? In cases involving many parties, everyone will be bound by the results. Also, minors and incompetents may not have the ability to appreciate the issues at stake in the negotiations without supervision.

Benefits of Negotiation & Settlement : 1. Cheaper 2. Faster3. More Nuanced4. Attentive to Feelings of Participants

Then why would anyone want to go to court?1. Other side is not cooperating2. Think you can get more money by litigating the issue

3. Often the stronger party beats down weaker party 3. Want to make a public spectacle of the lawsuit

a. Contracting to Dismiss

The simplest form of settlement is a contract (sometimes called a release) in which P agrees not to bring a lawsuit (or to drop one already filed) in exchange for money or specific performance on D’s part. In return for such an agreement, D will often ask for a stipulation that the settlement is not a confession of liability on his part. Since settlements are contracts, they can be attacked on any of the grounds on which one can attack any contact: fraud, duress, mistake, incapacity, unconscionability, etc. Usually there is no judge involved.

Why not require a judge to approve all settlements? (1) Parties want to remain autonomous; (2) Courts are viewed primarily as a dispute resolution device.

After a suit has been filed, a settlement agreement would call for an end to the lawsuit that may require P to refrain from re-filing this or any related lawsuit. What if P does re-file? How does D enforce the agreement? D could argue “accord and satisfaction” (an affirmative defense). However, the burden is on D to plead and prove that P’s second claim is the same as that covered by the settlement agreement

What if D wants not only to see an end to the lawsuit but for court to enter a judgment on the merits? An involuntary dismissal with prejudice would serve as a judgment on the merits and would bar all related claims, whether or not they were stated in the complaint. This means that if P were to file a second lawsuit, D could invoke both “contract settlement” as well as “former adjudication” to have the suit dismissed.

Hypos/Problems:

Suppose settlement is before filing the action. This might pose a risk to the P if the settlement agreement is for “all the claims that P has against D at the time of the signing”. If P has other claims, then he must exclude these claims from the agreement or he will have given up his right to pursue them.

A problem unique to federal courts is this: What if P’s federal question claim is dismissed with prejudice, but D then does not fulfill his end of the settlement agreement? Should P go back to the federal court to enforce? P could not do this unless there was diversity because agreement did not involve a federal question. Solution: Make settlement part of the judgment, or have court agree to retain jurisdiction to enforce the settlement agreement.

p. 582

5. (a) Employee accuses employer of racial discrimination. Employee wants not just compensation, but continuing health coverage and a favorable letter of recommendation. What type of settlement would employee want? Court judgment or retaining jurisdiction because of possible need to take future action

(b) The employer wants to minimize publicity. What type of settlement would the employer want? Voluntary dismissal with prejudice or involuntary dismissal with prejudice (“with prejudice” = cannot re-file)

Full Faith & Credit: A state’s enforcement of another jurisdiction’s laws or court decisions

Matsushita Elec. Industrial Co. v. Epstein main issue: full faith & credit

MCA shareholders filed 2 sets of class actions against Matsushita. One group of class actions was brought in federal court alleging breach of federal securities laws. A second group of class actions was brought in Delaware state court alleging breaches of state law fiduciary responsibilities. The claims in the federal actions all fell within the federal courts’ exclusive jurisdiction. (State courts cannot hear securities). While the federal district court granted summary judgment to Ds and the decision was being appealed, the parties in the Delaware state action negotiated a settlement. The settlement included a

release of all state and federal claims arising out of the acquisition. The Delaware court approved the settlement as fair. However, the Ninth Circuit Court found that, despite the Full Faith and Credit Act, the state settlement could not bar litigation of federal claims in federal court. The Supreme Court granted certiorari (and ultimately reversed the Ninth Circuit decision).

The Full Faith and Credit Act mandates that the judicial proceedings of any state shall have the same full faith and credit in every U.S. court. Federal courts must accept the rules chosen by the state from which the judgment was taken.

Dissent: Ginsburg wrote that to be entitled to full faith and credit, a state court judgment must satisfy the Due Process Clause. The issue of adequacy of representation by the Delaware class should be considered on remand. Thomas wrote there was adequate representation, but in any case, “representation” was outside the scope of the issue presented in this case.

b. Contracting for Confidentiality

One settlement goal shared by the parties, especially Ds, is that the settlement be confidential. How might a settlement agreement be drafted to assure that P keeps the details confidential? See example, p. 587-588.

Advantages of Confidentiality Agreements:

1. Encourages Settlements – Ds typically consider confidentiality of settlement more important than amount of settlement, but without confidentiality, they will not settle2. Benefits Plaintiffs – Ds wanting confidentiality will pay a premium to Ps to achieve this goal.

Disadvantage of Confidentiality Agreements:

1. Public interest is defeated by confidentiality agreements. Public has a right to know of the disputes that are being kept private, since many of them could involve dangerous products or substances, or the illegality of D’s course of action

Kalinauskas v. Wong

Kalinauskas sued Caesar’s for sexual discrimination. As part of discovery P sought to depose Thomas, a former Caesar’s employee, who had sued Caesar’s for sexual harassment the previous year. Thomas’ suit settled without trial pursuant to a confidential settlement agreement. The agreement stated in part that “the P shall not discuss any aspect of P’s employment at Caesar’s except to state the dates of her employment and job title.” Caesar’s sought a protective order to bar Thomas’ deposition. P opposed the order.

The issue the court considered was whether P should be allowed to depose a witness who is bound by a confidentiality agreement when that witness has relevant factual information.

While courts want to encourage settlements, they are also concerned with the just, speedy, and inexpensive determination of every action. Preventing Thomas’ deposition would condone the practice of buying the silence of a witness with a settlement agreement. Thomas’ deposition will lead to relevant factual information and avoid the costs of re-discovery of information already in existence. Prejudice concerning the substantive rights of Thomas will not occur here so long as the deposition seeks only factual information and not the specific terms of the settlement agreement.

Ultimately this case presents a clash between 2 competing interests: that of confidentiality agreements to encourage settlements versus that of factual development through discovery. This court finds the second to be more important.

Notes and Problems, p. 594

3. Party wants an expert not to be able to testify against it in other cases, precisely what the Michigan state court ordered. Why in Baker v. GM did the USSC approve calling Elwell, an expert, in a case in Mo. Federal court? Although there is no public policy exception to the full faith and credit clause, Michigan’s judgment cannot reach beyond that controversy to control proceedings brought against GM in other states. Why doesn’t this logic extend to Kalinauskas case? All in the same (federal) system.

Amended Rule 5(d) does what to openness of discovery materials? Discovery materials are not to be filed with the court until they are “used”. Are documents that are shown to a deponent “used”? No. But if a document is used to support a motion for summary judgment, then it is “used” and must be filed with the court. However, if the parties attach to their motions only those parts of the documents that are the subject of the dispute, then only those portions must be filed at the court.

c. Contracting for a Judgment

Suppose a settlement is reached at the appellate level. What do you do with the lower court opinion? Should it be vacated (vacatur)?

Neary v. University of California

P sued D over a publication issued by D. The report blamed P for ranch mismanagement as the reason for the mysterious death of a number of his cattle. P argued the cattle were poisoned by a pesticide sprayed by governmental agencies to control mites. P obtained a jury verdict for $7 million in a libel action. D appealed. P cross-appealed. While the appeal was pending, the parties agreed to settle.

The settlement called for D to pay $3 million in return for a stipulation to vacate the trial court judgment and dismiss the appeals with prejudice. Their joint application was denied by the court of appeals. P and D both appealed.

The issue addressed by the California Supreme Court was whether the appellate court abused its discretion by refusing to reverse the trial court judgment as the parties stipulated.

The court held that stipulated reversals should be granted unless extraordinary circumstances warrant an exception. The primary purpose of the judiciary is to provide a forum for the settlement of disputes. Stipulated reversals advance that policy. The practical benefits of a stipulated reversal include (i) accommodating the parties’ interests by reducing the costs involved in litigating appeals; (ii) accommodating the courts’ interests by reducing the costs involved in deciding appeals; (iii) promoting the primary function of the public judiciary, which affords a forum for the settlement of private disputes. The original judgment should be set aside. When the parties settle at the higher court level, and then seek to have the lower court’s judgment vacated, it should be granted, except in extraordinary circumstances.

U.S. Bancorp Mortgage Co. v. Bonner Mall

U.S. Bancorp Mortgage (P) held a mortgage on a shopping mall owned by Bonner Mall (D). D defaulted and P scheduled a foreclosure sale. The day before the sale, D filed for bankruptcy under Chapter 11. (All court action is suspended in such a case.) It filed under a reorganization plan that depended on the “new value exception” which P opposed. P attacked the new value exception in federal court but lost. The Supreme

Court granted certiorari. While the case was pending the parties agreed to a settlement. P then moved for an order vacating the court of appeals decision. D opposed the motion.

The issue addressed by the Supreme Court was whether the appellate court should have vacated the trial court judgment after the post-judgment settlement was reached. Should the federal court routinely vacate lower court judgments?

No, except in exceptional circumstances. We do not want to re-litigate issues. Judicial precedents are presumptively correct and are binding and should not be altered unless they would serve the public interest as a whole, not just the interest of the litigants. Here P has the burden of making a strong showing that it is entitled to the vacatur remedy. P’s argument that the decision should be vacated because D has agreed to it is not compelling. To permit vacatur when a settlement is reached at such a late stage would reduce the incentive parties have to settle earlier. When a case is settled on appeal, ordinarily it should be remanded back to the lower court that rendered the judgment to ask them to vacate their judgment.

2. Guided Negotiation: Mediation and Coercion

Suppose that negotiations fail. What is the solution? You could bring in a neutral party. The mediator facilitates resolution. He is the go between. A key attribute to a successful mediator is his ability to establish trust with either party. He should never propose a decision. Instead he should do what he can to facilitate negotiations between parties. He should always encourage parties to seek an attorney before they sign any agreement. If both parties reach a solution, but mediator thinks one party is taking unfair advantage of weaker party, then he might want to point out that this solution is not likely to last because it is unfair in the long-run.

What is the difference between mediation and arbitration?

Binding Arbitration – results are bindingNon-Binding Arbitration – just a decisionMediation – merely a suggestion

Consider the settler judge. Rule 16 allows judge to order attorney or unrepresented party to attend a settlement conference, but may the court require a represented party to attend personally? Read Lockhart.

Lockhart v. Patel

Lockhart (P) sued Patel (D) for medical malpractice, alleging that P lost sight in one eye due to D’s negligence. In a summary jury trial, the jury issued an advisory award of $200,000. The trial judge directed the attorney for D’s liability insurance carrier to attend a settlement conference along with the carrier’s attorney. The insurance carrier deliberately disobeyed the judge’s order by sending a local adjuster who was not qualified to negotiate. The trial judge then struck the pleadings (issued a default judgment) against D and set up a criminal contempt hearing for the next day. The insurance carrier then settled the case for the amount requested by P. At the contempt hearing, Patel officials apologized to the court.

The issue addressed by the court was whether a trial court has the authority to order parties and their insurers to attend settlement conferences and to impose sanctions for failure to attend.

Federal Rule 16 and case law grants authority to the trial judge to order attendance of all parties necessary to hold a productive settlement conference and to impose sanctions for failure to obey court orders. Rule 16 encourages courts to use forceful judicial management to manage their caseloads effectively and efficiently by settling cases whenever possible.

Why did he write this opinion? (1) The court needs someone at the settlement conference with the authority to settle. Rule 16(f) speaks of a party or a party’s attorney (by extension a party’s insurer); (2) tremendous docket pressure on judges

Not all judges would agree with above opinion. Rule 16(c) allows a “party or its representative to be present or available by telephone in order to consider settlement…” Also, Committee Notes say that “the unwillingness to be available for a settlement conference may make it unproductive and that personal participation by the parties should not be required . ”

Note: Studies show that most effective way of promoting settlement is to push cases to trial briskly rather than spend long hours of pretrial conferences pushing settlements

3. Contracting for Arbitration

What if the parties cannot agree, even with the help of a mediator, or can agree only that they want to have their disputes decided by a third party? Must they then resort to the courts? No. A good alternative to litigation is arbitration. Unlike a mediator, an arbitrator can decide over a dispute and issue an oral or written decision after having heard from both sides. His word is final.

a. The Possibilities of Arbitration

Benefits to Arbitration:

1. Choice of Procedure (parties may agree that the arbitrator will be bound by precedent or that he will ignore it)2. Choice of Law (they can insist that the arbitrator will not refer to the ordinary rules of contract but instead will adhere to those rules that have governed their particular contractual relationship)3. Choice of Arbitrator (parties can have someone who is experienced in their field decide their case)4. Faster, Cheaper, Private (they can dispense with the rules of discovery and insist on a quick decision to their dispute and insist that the arbitrator will not disclose the dispute or its decision)5. Softer Decisions (the arbitrator may decide the dispute more softly than a court by applying his own sense of the law as he sees it and making an award reflecting the spirit rather than the letter of the agreement)6. Binding Decisions (arbitrator’s ruling binds parties and is enforceable today unless it is beyond its jurisdiction, irrational, or subject to undue influence (i.e. bribery)

In light of these benefits, why would anyone want to go to court?

1. To make a public statement2. To have a sympathetic jury hear their case3. To have the advantages of a formal discovery process4. Lack of legal training of arbitrator5. Inability to obtain review of errors committed by the arbitrator6. Arbitration is becoming more legalized (= slower)

Note: Judges generally favor arbitration and will usually enforce an arbitrator’s decision

Ferguson v. Writers Guild of America, West

Ferguson was a screenwriter who wrote a screenplay for Beverly Hills Cop 2. When the movie was completed, the Writers Guild determined the writing credits, giving F joint credit. F argued he ought to be given sole credit. According to theatrical agreements, any writer who wants to dispute the credit determination could file a request for arbitration to a panel of 3 arbitrators. The 3 arbitrators held no hearing, and they deliberated independently of each other. Each arbitrator notified the Guild secretary of his determination. After receiving joint credit before the arbitration committee, F requested the policy review board to review the arbitrator’s decision. After losing before both committees, Ferguson brought this action in state superior court to have him awarded sole credit. The superior court dismissed his case, and he appealed.

Before ruling on anything, the appellate court addressed what should be the proper scope of judicial review of arbitration:

1. Did the parties agree to arbitration?2. Did objecting party have a fair opportunity to be heard? 3. Did the arbitrators exceed their power?

The court found that since the arbitrators followed their own procedures, F’s injunction must be denied. The credit determination can be handled more skillfully, expeditiously, and economically by the Guild’s arbitration committee than by courts. The Guild’s intention is to avoid ruinously expensive litigation.

This court is willing to accept arbitration even though it would otherwise violate due process – parties agreed to voluntarily

b. The Limits of Arbitration

What justifies a court in overturning an arbitration award?

1. Arbitrator exceeds power 2. Arbitrator subject to undue influence3. Parties did not agree to arbitration4. Arbitration procedures deprive party of fair opportunity to be heard5. Agreement says that only certain issues may be arbitrated6. Judge thinks the award is irrational7. It is unconscionable on contractual grounds (procedurally or substantively)

Disputes where arbitration agreements are not enforceable:

1. Public Law 2. Divorce3. Child Custody (courts split)

How can you obtain appellate review of arbitration proceedings?“Rent-a-Judge” – eliminates waiting for trial and allows subsequent appeal but too expensive for most people

Engalla v. Permanente Medical Group, Inc.

Ps were the surviving family members of Engalla, who through his employer was enrolled in the Kaiser Permanente (D) HMO prior to his death. As part of its standard insurance agreement, Kaiser insisted on binding arbitration with a panel of 3 arbitrators. Before his death, Engalla was engaged in a medical malpractice dispute with Kaiser which was submitted to arbitration. After attempting unsuccessfully to conclude the arbitration prior to Engalla’s death, his family sued Kaiser in superior court for medical malpractice, claiming that Kaiser failed to diagnose Engalla’s terminal cancer. Kaiser filed a petition to compel arbitration.

Court held that arbitration should not be enforced. The facts supported P’s argument that D entered into the arbitration agreement with knowledge that it would not comply with its own contractual timeliness. For example, on average, it took almost 2 years for the appointment of a neutral arbitrator. Furthermore, depositions of in-house counsel showed that D was soon aware after it began its program that its contractual deadlines were not being met. P nonetheless persisted in its contractual promises of timeliness. Therefore, P had a prima facie case for fraud because Kaiser’s contract fraudulently induced P to agree to unreasonably delayed arbitration.

How would you advise Kaiser to create a better arbitration system?Stop making false representations (i.e. like “our system is faster than the court system”) Hire a neutral arbitration committee, like AAA

(but today they could not use AAA because they don’t do medical malpractice)

C. Curtailed Adjudication: Summary Judgment Rule 56

Running the Gauntlet:If P survives a motion to dismiss for failure to state a claim and doesn’t suffer an involuntary dismissal and if D doesn’t suffer default judgment and if there is no settlement, must the case go to trial? No.

Basics of SJ:Basically, the motion for SJ challenges your opponent’s right to go to trial. It says to your opponent that he cannot recover unless he proves fact X, but before that he must put some evidence before the jury to show X is true. I know that fact X is not true. So I will move for judgment in my favor. I’ll bring my evidence before the judge to show X is not true, and invite you to bring forth any evidence to show X is true. If you can’t bring forth any opposing evidence, then there is no need for a trial. There is “no genuine issue of material fact” and I am “entitled to judgment as a matter of law.”

Burden Shifts:Once a SJ motion is made, and properly supported, the responding party must respond with countervailing evidence or SJ will be entered against it. P cannot just rest on the allegations in his complaint to defeat SJ. Allegations in a complaint are only statements about what P hopes to prove. They are not proof themselves. The whole purpose of Rule 56 is to challenge P to go beyond his pleadings to bring forth evidence which tends to prove his allegation.

Standards of SJ:1. No genuine issue of material fact2. Entitled to judgment as matter of lawBUT court cannot weigh the credibility of evidence

Items the Court Considers

Pleadings, depositions, admissions, answers to interrogatories, affidavits (personal testimonies under oath), business records, police reports, photos of the scene, expert testimony, and copies of any other relevant documents

Court Cannot Weigh Evidence When deciding whether to grant SJ, the judge may not weigh the evidence. He may only examine the items (basically sheets of paper) presented by each party to determine whether there is a meaningful dispute in the evidence about that point. For example, questions of credibility of witnesses are questions of fact for the jury to decide at trial

The “Partial” SJ:Under 56(d), a court may grant SJ on just some issues (i.e. liability but not damages)

When may a party move for SJ?No earlier than 20 days after beginning the lawsuit, orImmediately after a SJ motion is filed against themD may move for SJ at any timeAt least 10 days before the court hearing

What if the other party moves for SJ before P can develop his case?If D moves for SJ immediately after P’s complaint if filed, this can create a problem for P, particularly if P has not had a full opportunity to develop his evidence through investigation and discovery. In this case, P may move (under Rule 56(f)) for a continuance to develop further evidence through discovery.

What constitutes an “issue of material fact”?There must be some disputed fact for the jury to decide. For a fact to be disputed, there must be evidence tending to prove both the positive and the negative. If all the evidence tends to point one way, then there is no point in having a trial.

Notes and Problems, p. 627

1. Why does the court deny D’s motion to dismiss for failure to state a claim? P’s complaint is a valid claim. Does this mean P will win at trial? Not necessarily. Once a trial puts the facts at issue, P may be unable to prove note and nonpayment.

When D files a general denial, there are only a couple of ordinary defenses: D didn’t sign the note or D has already paid the note. P’s discovery should try to pin D down to a precise defense. Now assume that discovery produces the note whose validity D does not challenge and that has not been repaid. If case now goes to trial, D has no defense and should suffer judgment as a matter of law. Summary judgment just moves-up this process earlier.

5. (a) Not personal knowledge, so inadmissible

(b) Does not affirmatively show competence

(c) “I saw D sign the note”. Plus name, address of P and that he knows D

(d) In place of affidavit

6. (b) “I did not sign the note”

Suppose in response P produces affidavits of 20 bishops who saw D sign the note. Will SJ be granted? No. Court cannot weigh the credibility of evidence.

Celotex Corp. v. Catrett

Catrett (P) filed a wrongful death action against Celotex (D), alleging that her husband’s death was caused by his exposure to asbestos manufactured by D. D moved for SJ, arguing that P had failed to produce any evidence to support her claim that her husband

had been exposed to D’s product. In response, P produced documents tending to show such causation. D argued that the documents were inadmissible hearsay and could not be considered in opposition to D’s motion for SJ.

If information produced through discovery shows that P cannot prove an essential element of her cause of action, must D (bringing the motion for SJ) still come forward with evidence to prove that P lacks any genuine issue of material fact?

No. There can be no genuine issue of material fact when P (who will have the burden of proof at trial) fails to prove the existence of an essential element in her case. The burden is not on the party moving for SJ to produce evidence showing the absence of a genuine issue of material fact. The non-moving party bears the burden of proof. Instead, the moving party must only show (point out to the court) the absence of evidence to support the non-moving party’s claim.

So who bears the burden of proof at the SJ stage?The party moving for SJ always has the burden of persuasion on SJ. The burden of going forward, however, shifts during the motion process.Majority: The party that will have the burden of proof at trial has the equivalent burden at SJ, that is, the burden of “making a showing” of evidence sufficient to let a reasonable trier of fact find in its favor. Dissent: D must prove affirmatively at SJ that P’s husband was not exposed to asbestos

Effect of Celotex:The effect of Celotex is to make SJ more available. The USSC also clarified the burdens: if the party bears the burden of production at trial, then that party must produce enough evidence that a reasonable trier could base a judgment in favor of that party to avoid SJ. It is not enough for P to claim that she will find the evidence in time for trial. What do you advise someone with P’s problem to do? Ask for additional time for more discovery, as allowed by 56(f).

Notes and Problems, p. 634;

4. (a) Consider Celotex case. Suppose P must prove at trial that asbestosis caused her husband’s death. Celotex points to the absence of such evidence in the discovery and moves for SJ. P produces the affidavit of a pathologist that in his professional judgment, “the tissue samples are consistent with P’s husband having died as a result of asbestosis. Will SJ be granted? No. Based on this evidence a reasonable trier of fact could find in favor of P.

(b) Now suppose that P offers this same affidavit and moves for SJ. D offers nothing. Will court grant SJ for P? No. Jury might disbelieve her expert and rule in favor of D. A rational jury could rule against her. This illustrates how rare it is for the party bearing the burden of production at trial (P) to obtain a motion for SJ.

5. (a) Consider Celotex case and P’s problem on remand. Would Hoff’s letter that said “I bought asbestos from Celotex and gave it to Catrett” be enough? It would be safer to have Hoff’s affidavit—56(e). In the actual case, the Appellate Court considered Hoff’s letter because it was an answer to an interrogatory and so was available under 56(c).

(b) What if letter said that Hoff didn’t know what asbestos products were used but that the company records would indicate. Would this be enough to avoid SJ? No.

(c) What if the letter said that he understood that Celotex products were used. Enough to avoid SJ? No.

Visser v. Packer Engineering Associates

After Packer (D) fired Visser (P) for disloyalty, P filed an age discrimination suit. P was 64 years old, and within 9 months of the full vesting of his pension at the time of his termination. D moved for SJ, arguing that P’s discharge was not because of his age or pension benefits.

Will a court enter SJ if, on the evidence presented during a SJ proceeding, no rational jury could find for the party opposing SJ?

Yes. P’s allegations supported the conclusion that he was fired for refusing to pledge loyalty to D, but not for age discrimination. D could have had more than 1 motive, but P failed to allege facts to show that age discrimination was a substantial factor in his termination. The affidavits offered by witnesses were also insufficient, because they testified about matters outside their personal knowledge. Witnesses are permitted to testify only from their personal knowledge.

Notes and Problems, p. 642

The effect of Celotex was to clarify that P bears the burden of proof. Packer probably had an affidavit in which he swore that he did not fire Visser for reasons of age. At that point Visser correctly did not rest on the pleadings, but like P in Celotex case, he had to produce affidavits. What additional evidence would Visser have had to produce to convince majority to reverse SJ? See next problem.

2. (a) Suppose Visser presented an affidavit from an employee in payroll department who heard Packer say in terminating him, “that guy will never get his pension”. Packer’s overheard statement would be admissible as an exception to the hearsay rule, and would also be enough to avoid SJ.

(b & c) What about an affidavit where Packer said “we have to cut back on benefit costs here” or that Packer asked how close Visser was to vesting? Closer call – you would need to infer age discrimination and tie this into Visser’s firing.

Then why were the 3 affidavits Visser submitted deemed insufficient? These were lay witnesses, who can testify only to what they directly observed. Only experts are able to speculate about motivation.

D. Judicial Management of LitigationParties will ultimately decide to end their dispute by adjudication or settlement. Recently courts have sought to speed the parties’ decision for one of these alternatives through “managerial judging” or “fast-track adjudication” with the goal to save time, expense, and judicial effort.

1. “Managing” Litigation

Early judicial management reduced time to trial but also increased expenses. (The only thing that saved both time and money was shortening the time for discovery.)

Sanders v. Union Pacific Railroad Co.

A pretrial conference was scheduled and an order was issued requiring that the parties complete various motions by then. The order indicated that failure to comply could result in sanctions. However, P failed to comply with nearly all of the requirements, apparently because of his responsibilities in another case, but did not confer with the court or D. Following the pretrial conference, the court dismissed P’s action with prejudice as a sanction for failure to comply with the pretrial order. P appealed.

Can a case be dismissed for failure to comply with a court order when it has caused prejudice to the other party and lesser sanctions are unavailable?

Yes. P’s multiple failures to comply with the pretrial order of the court impaired D’s efforts to prepare for trial. Further, by not informing the court or D of the impending failures, P deprived the court of a chance to impose lesser sanctions. P was on notice, from the warning in the court order, that dismissal would result for failing to comply. Therefore, the lower court did not abuse its discretion in ordering dismissal with prejudice.

Why did lower court dismiss Sander’s case with prejudice? - P’s complete failure to follow pretrial order- D had already incurred pain and expense in preparing for litigation- Other litigants would be inconvenienced by a delay in this case- P’s case did not involve important questions of public policy

What should Sanders attorney have done when the Nebraska proceedings dragged on? Inform D and the court. If D would not agree to an extension, then ask court. Then, if the extension was granted, D’s attorneys would not have turned over its materials.

(On en banc rehearing, court reversed both prior decisions). Suppose P’s dismissal had stood. What should P’s attorney have told him after dismissal of his case? He now had the option of an en banc hearing or an appeal to USSC (otherwise he’d be liable for malpractice for failing to inform).

2. Managing Litigation Bound for Trial: Pretrial Order Rule 16

In the typical pretrial conference, the parties meet in advance and decide on a variety of issues. Those decided issues are written into a document that P’s attorney prepares, to be signed by each party, and a space is left for the judge to sign. This becomes the pretrial order. Included within the PTO is such information as: a listing of contested and uncontested facts, contested issues of law, exhibits to be introduced, deposition testimony to be offered, a listing of witnesses, etc.

McKey v. Fairbairn

P’s decedent slipped and fell on the floor of her rental dwelling. Not as a result of these injuries she later dies. P brought this action for damages. At trial, P’s lawyer agreed with judge’s assessment of this case as one of negligence. Then, P moved to amend her complaint to include an ordinance requiring that owners keep roofs leak proof. The judge denied P’s motion and directed verdict for D. P appealed.

Is a trial judge allowed broad discretion to exclude evidence supporting a theory of recovery not raised in the complaint?

Yes. The judge did not allow P to introduce the municipal ordinance in her complaint as a standard of duty because: (1) it wasn’t in the PTO; (2) the attorney only used a common law standard of duty; (3) P was asked twice by the judge if he wished to change his theory, and each time he said no. After all this, P sought to introduce the ordinance. Trial court judge was right in refusing to grant a change in the PTO. Whether to allow modification in PTO is up to the discretion of the trial court. Thus, there was no abuse of discretion.

Notes and Problems, p. 654

2. Suppose P had sought to amend her pleading to allege violation of the housing code before the pre-trial conference. Would the court allow this? Yes. Rule 15(a) says that “leave shall be freely given when justice so requires. Rule 15(b) says “shall do so freely”. The goal of PTO is to freeze parties in a definite position. Besides, parties know issues better by time of PT conference.

3. Couldn’t the whole problem in McKey have been eliminated if the judge had pointed out to P’s attorney the housing ordinance at the pretrial conference? Most judges will not take such an action, saying that to do so is like “trying the party’s case” for them and that it is inconsistent with the whole idea of an adversary system.

Standard for modifying PTO:

Manifest injustice (“The PTO following a pretrial conference shall be modified only to prevent manifest injustice”—16(e))

It is hard to see what is unjust about allowing the PTO to be modified after evidence has been introduced. When the issue is not covered by the PTO, the majority of courts simply apply 15(b)—freely amend unless prejudice shown. Therefore, if no objection, then automatically make part of the pleadings (the parties have already been litigating them anyway without any problem). If objection, then court should allow pleadings to be amended freely unless objecting party can show prejudice.

PTO – 16(e) – court may allow modification only to prevent “manifest injustice” (harder)Pleadings – 15(a) (b) – leave should be “freely given when justice so requires” (easier)

IX. IDENTIFYING THE TRIER

A. Judging Judges: Bias and Recusal

Even in a jury trial the judge has considerable power. When the judge is the trier of facts, his power is even greater. But long before the trial, the judge wields great influence, with his rulings on motions, discovery and summary judgment. Even in cases with a jury, the judge controls what evidence the jury hears and can reverse a jury verdict or order a new trial.

When you file a case in federal court, the judge is assigned randomly at the time of change of the judge with or without a cause. In the federal system, however, you must show that the judge is biased and should recuse (disqualify) himself before you can change judges.

The standards for recusal are found in 455 with (b) providing specific situations and (a) providing a general standard where his “impartiality might reasonably be questioned.”

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In re Jeffrey C. Hatcher, Sr.

Hatcher (D) filed a motion under § 455 to have judge recuse himself from a criminal case in which D was a criminal defendant. This case was nearly identical to an earlier case that was handled by the judge’s son while a student in the US attorney’s office. The judge sat in the courtroom to observe his son in the son’s first case. D was named as a co-conspirator in that case. The judge refused to disqualify himself. D appealed via a writ of mandamus.

Under § 455, must the judge recuse himself because his son acted as an attorney in a related case? Yes.

1. Under 455 (b)(1), a judge must recuse himself if he has attained “personal knowledge of disputed evidentiary facts”. This was not met by the judge’s visit to the courtroom because: he did not learn anything he could not have also found out by reading the newspaper; he said he had no recollection of any particular evidence that was presented at that trial; and he was supplied with transcripts from prior related trials which gave him access to the same kind of information he may have heard while he was watching the earlier trial anyway. Thus, no grounds for recusal here.

2. Under 455(b)(5), a judge must recuse himself if “he or his spouse, or a person within the third degree of relationship to either of them…is acting as a lawyer in the proceeding.” His son was acting as a lawyer. However, proceeding here means the same proceeding. In this case, the 2 proceedings are clearly separate. Thus, no grounds for recusal here either.

3. Under 455(a), a judge must recuse himself if the judge’s “impartiality could be questioned by a reasonable, well-informed observer.” Therefore, if the son’s case was so clearly related to the present case that a reasonable observer would question the impartiality of the judge, then the judge must recuse himself. This is the case here because outside observers would have no way of knowing how much information was passed onto the judge from the son’s earlier work. Thus, the judge must recuse himself in this “rare case” where the earlier proceedings are so close to the present case that to do otherwise would lead the public to view the verdict as unfair.

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Once a 455 violation is found, what difference does it make whether (a) or (b)? Subsection (e): under (a) [not (b)], parties may waive after full disclosure on the record

Subsection (f): If it is found that a judge has financial interest in a party [under (b)(4)], but the judge has already expended significant time to the case, parties may waive after full disclosure on the record and the judge divests himself of the interest.

Generally, the standards under (b) are clearer and easier to apply. Note that owning even one share of stock is a financial interest. (Ownership of stock through a mutual fund is not considered a financial interest, however, unless the judge manages the fund)

Under 455(b)(1), a judge should recuse himself when he attains personal knowledge before the case. What about knowledge acquired during the case? When does it rise to the level of bias? “When there is such a high degree of favoritism or antagonism as to make fair judgment impossible.” – Liteky (note 6, p. 665)

Although the standards under 144 and 455 are the same (144 incorporates the standards of 455), the procedures used to challenge the judge appear different. Under 144, an affidavit with good faith certificate is required, unlike 455 which requires a motion. From reading 144, you might think that that as soon as an affidavit is filed the case is automatically re-assigned to another judge. False. The original judge must determine whether you have made a prima facie case before re-assigning to another judge to decide.

B. Judge or Jury: The Right to a Civil Jury Trial

1. Historical Reconstruction and the Seventh Amendment

Seventh Amendment: “In suits at common law, where the value in controversy shall exceed 20 dollars, the right to a jury trial shall be preserved”

Note: The Seventh Amendment does not apply to the states, and so there is no federal constitutional requirement that states give the right of a jury trial in any civil case (although criminal cases require a jury trial in both systems under the Sixth Amendment). State courts have shown to be less enthusiastic about jury trials – Why? Federal courts are better financed to absorb the cost of jury trials

Historical Test: To determine whether the right to a jury exists in a given case, ask if the claim lay within the jurisdiction of the common law courts in 1791. If so, then the parties have a right to a jury; if not (because only a court of equity would have heard the claim), then there is no right to a jury.

Legal Cases: (jury) R-R-E-N-A-L-DNegligence DamagesLost ProfitsAttorney Fees EjectmentRecover Value of ItemRestore Item to Owner

Equity Cases: (no jury) S-T-A-I-R-R Specific Performance

Contract RescissionContract ReformInjunctionsAccountingsTrademark InfringementProcedural Devices D-I-C-A-P

derivative suits class actions bills of peace bills of impleader

Why do juries flourish in the U.S.?- Right is preserved by the Seventh Amendment- Provides a check on the judiciary- Gives a way to get democratic values into the judicial system

2. Applying the Historical Test to New Claims

Chauffeurs, Teamsters & Helpers v. Terry

Teamsters Union instituted a grievance action against McLean trucking on behalf of certain truckers. Following the action, Terry and several truckers, unhappy with the result, filed an action against the Union, claiming that the Union breached its duty of fair representation and violated the collective bargaining agreement. When the employer filed for bankruptcy, truckers voluntarily dismissed the collective bargaining agreement claim against it. The lower court ruled that the trucker’s duty of fair representation claim should be tried before a jury. The Union appealed.

Are plaintiffs entitled to a jury trial in their fair representation / collective bargaining lawsuit against the Union?

Yes. In deciding whether the Seventh Amendment guarantees a right to a jury trial, a court must examine each of the following and determine whether it is legal or equitable in nature: (1) nature of the issues being litigated – by looking for an analogous 18 th century case; and (2) the remedy sought. The second consideration is more important to the analysis. As to the first inquiry, P’s fair representation claim is analogous to a claim against a trustee for breach of fiduciary duty, which is an equitable claim. On the other hand, P’s collective bargaining agreement claim is analogous to breach of contract claim

which is a legal claim. Thus, the first part of the Seventh Amendment inquiry left the court to balance these considerations to determine whether to give P a jury trial. As to the second inquiry, the only remedy the truckers sought was back pay and benefits. This is a legal remedy and not restitutionary, since the truckers did not seek money wrongfully held by their employer, but wages they would have received had their grievances been properly processed. Thus, a jury must hear this case.

3. Applying the Historical Test to New Procedures

a. The Seventh Amendment and Changes in Judicial Procedure

Beacon Theatres

In a case with overlapping equitable and legal claims and counterclaims, a party gets a jury trial on any legal claims. The jury trial should precede any hearing on the equitable claim and the jury’s findings will control as to any “common” factual issues (disputed issues that might arise in the legal and equitable claims).

Hypo: P seeks ejectment (legal). D seeks specific performance of a franchise agreement (equitable). Jury will try ejectment (legal) first.

If, when hearing the ejectment claim, the jury finds that there was a valid agreement, the judge must rule on D’s claim for specific performance (equitable) consistent with that factual finding.

If, when hearing the ejectment claim, the jury finds that there was no valid agreement, then judge must rule in favor of P on D’s claim for specific performance.

Amoco Oil Co. v. Torcomian 685

D took over a gas station and wanted to become a franschisee of P. While negotiations were underway, D ran the station, but never finalized an agreement with P. Then P brought a suit to eject D from the station (legal), to enjoin D from operating the station (equitable), and for damages for wrongful operation of the station (legal). D counterclaimed for damages (legal) and specific performance (equitable), demanding a jury trial. Then P sought to amend its complaint to remove claims for damages and other claims that would be considered legal theories in order to prevent D’s right to jury trial.

Did the District Court err in refusing to allow D a jury trial with respect to both P’s complaint and D’s compulsory counterclaim?

Yes. Joinder of an equitable claim with a legal claim cannot defeat the right to trial by jury under the Seventh Amendment. Even an equitable main claim cannot prevent a jury trial on a legal (compulsory) counterclaim. Under federal law, actions seeking ejectment (P’s claim) are legal, not equitable. Further, actions seeking damages for contract breach (D’s counterclaim) are legal, not equitable. The clear teaching of Beacon Theatres is that joining of legal and equitable remedies entitle the parties to a jury trial on the legal claim. Thus, it was an error for the trial court to refuse a jury trial.

Notes and Problems, p. 689

1. (c & d) What if Amoco sought only injunction and Torcomian sought only specific performance. Would there have been a right to a jury trial? No

Amoco then adds a claim of ejectment. This is different because it is a legal claim, so a jury trial is allowed.

6. (a) no (b) no (c) yes

b. The Seventh Amendment and the Structure of Government 693

Administrative Adjudication: After a decision is rendered by the administrative law judge (ALJ), and perhaps an appeal to a board in the agency, the review is by a federal court (either district or appellate). At no stage is there a jury involved. Is this constitutional? According to USSC, it is constitutional when government is suing to protect a public right (private matters like tort, contract, or property are not included)

Bankruptcy System : Operate without a jury. In Katchen, USSC ruled it did not violate the Constitution, but in Grandfinanciera, USSC ruled it did. So courts are mixed.

4. Jury Integrity: Size, Rules of Decision & Reexamination Clause

Traditionally at common law, there had to be jury of 12 and decisions had to be unanimous. In 1973, USSC began approving juries of 6 and such juries are now in widespread use in federal courts and some states. In the federal system, unanimous verdicts are still required unless the parties agree to accept a non-unanimous verdict.

Reexamination Clause: “No fact, tried by a jury, shall be reexamined in any U.S. court” Its purpose is to strengthen jury power by preventing trial and appellate courts from overturning jury verdicts, except when they are found to be without evidentiary support

5. Choosing Juries

The federal court’s policy about jury pools appears at USC 1861 – goal is to have a random cross-section of the community

Voire Dire – the jury selection phase of trial – exam by judge or lawyer to see whether the prospect is qualified to serve on a jury

Challenge for Cause – a party’s challenge supported by specific reason (such as bias or prejudice) that would disqualify that potential juror. In fed system, must be 18, be able to read/speak English, not biased – judges don’t want too many “challenge for cause(s)” because then they’ll have to go back to reselect the jury pool

Once a lawyer determines a juror lied during voir dire, what recourse does he have? A new trial. But first, a party must demonstrate that a juror failed to answer honestly a material question and also that a correct response would have provided a valid reason for a challenge for cause

Peremptory Challenge – a party’s challenge that need not be supported by any reason (but cannot use to discriminate by race, etc.); limited to 3 – but why any allowed? (1) peremptories in effect allow the parties to choose their juries; (2) allow parties to excuse a juror about whom they have a hunch that does not rise to the level of a challenge for cause or whom they may have offended through vigorous questioning

a. Assembling and Challenging a Pool of Jurors

Choosing a jury involves 2 phases: 1. a pool of prospective jurors is summoned 2. the members of the trial jury are selected from the pool

Procedure to Choose the Jury Pool:Wheel – names are put into the wheel to get a “a fair cross section of the community” Venire – group selected to appear at the court from whom the jurors will be chosenArray – either the judge (usually) or attorneys conducts the voir dire examinationPetit – selected from the venire

Notes and Problems, p. 698

1. (a) Alberta Student’s lawyer wants to challenge the composition of the jury wheel or venire or petit. When must that challenge be made? Before the voir dire or within 7 days after having discovered, whichever is earlier – 1867(c).

(b) Alberta’s lawyer presents affidavit that college students constitute 5% of population of district but jury list is only 1%. Why is it important that that jury is a cross-section? Different groups bring different perspectives to a situation. Is the lack of students a denial of fair cross-section? Judge could decide that others, young recent graduates, but not in college, probably have similar perspectives.

(c) What if pool was 40% female while population was 52% female – is this list a fair cross-section? Much stronger case for violation

2. (b) Assume judge finds lack of students is a prima facie violation of fair cross section requirement. The commissioner testifies that he works from voter registration lists. What should the judge do? Order that the list be supplemented by additional lists like postal addresses, college registration lists.

(c) What if the commissioner’s explanation is that students often refuse to answer the questionnaire and this is why they are underrepresented. Is this an adequate explanation? No, 1864(b) allows clerk or commissioner to summon those who fail to fill out form.

b. Challenging for Cause

Once the juror pool is chosen, jurors are selected to sit in a case. The selection occurs in a process called voir dire, where the pool is called into the courtroom for questioning. The attorneys may challenge jurors for cause to disqualify them from the case. (However, most federal judges do it themselves to speed up the process). What can disqualify a potential juror? Relatives and employees of parties; cannot read or speak English, are under 18 years old; are biased or prejudiced.

Notes and Problems, p. 701

1. (a) What must you show to challenge for cause? As the question speculates, having gone to high school does not disqualify a potential juror simply because the D is a high school teacher.

(b) Yet if the potential juror was taught by the D, then he could be disqualified. Why? His degree of connection

2. (a) What if the prospective juror is a grade school teacher? Lawyer could argue it would be too easy to identify with D

(b) Judge will probably ask whether prospective juror is able to keep an open mind and decide the case based on just the evidence presented. Framed that way, most prospective jurors will say yes and the judge will keep that person on the panel

c. Peremptory Challenges

Unlike a challenge for cause, a peremptory challenge allows lawyers to strike a juror for any reason. In federal civil cases, each side may have 3 peremptory challenges, alternating one-by-one, P then D. When there are multiple parties on one side, the court may award additional peremptory challenges to such parties. -- §1870.

Why allow such unexplained striking?1. gives verdict legitimacy to the parties2. may have offended juror by vigorous questioning

Edmonson v. Leesville Concrete Co.

P sued his employer after he was injured in a job-site accident caused by the negligence of another employee. During voir dire, D used 2 of its 3 peremptory challenges to strike African Americans from the jury. After P was awarded a low award of damages, P appealed, arguing that it was unconstitutional for the trial court to have allowed D to use race-based peremptory challenges.

May a civil litigant use peremptory challenges to strike jurors solely on the basis of race?

No. A civil litigant may not use peremptory challenges to strike jurors solely on the basis of race. (1) This Constitutional right to equal protection applies generally only to action by the government, meaning that racial discrimination violates the Constitution only when it may be attributed to state action. When private litigants participate in the selection of jurors, they serve an important function within the government (state) and act with its substantial assistance. Further, it all occurs in the courtroom. (2) In the ordinary course, a litigant must assert his own equal protection rights. The exceptions to this are cases where litigant can show that he has suffered a concrete injury, he is closely related to the third party, and the third party is helpless. In sum, Batson is upheld. Once there is a showing of racial discrimination, a race neutral reason for striking of jurors must be provided.

Note: P must now make out a prima facie case of race-based peremptory challenges by establishing a pattern of strikes against a particular race. If he can, the burden will then shift to his employer (D) to present a race-neutral reason for its strikes.

Batson left undecided the issue of gender discrimination. Is it improper to discriminate on the basis of gender? – Yes, held the USSC in J.E.B. v. Alabama (707)

Batson 3 step analysis (used in Purkett):

1. prima facie case is made of discrimination2. other side must offer a race-neutral explanation for their striking of juror3. opponent of the strike continues to bear burden of proving that the strike was exercised with the purpose of discriminating

Notes and Problems, p. 707

4. (a) Suppose Bertha brings action against state university for discriminatory dismissal. State university exercises its first peremptory challenge to remove an African-American. Is this a prima facie case? No, cannot infer a pattern of racial discrimination.

(b) This is now a prima facie case because we see a pattern. Burden now shifts to Bertha to offer a neutral explanation for the challenge (c) University now strikes a second African-American. Prima facie now? University must now offer a non-racist neutral explanation. What could count as an excuse now? I didn’t like their looks or they were both management and were therefore unsympathetic to a wrongful discharge.

X. TRIAL 711

Judges are required to explain the factual and legal reasoning on which their judgment is based. In contrast, jurors are typically not asked to explain how they reached their verdict. A verdict will be set aside only if no reasonable person could rationally draw the inferences necessary to support a jury’s verdict. But in almost all cases, the jury’s actual deliberative process is protected from any scrutiny.

The judge’s power:1. controls what the jury will hear (rules of evidence)2. instructs the jury3. can prevent a case from even going to the jury4. has the power to grant a new trial (or even reverse a verdict)

* At the appellate level, the judge can vacate if the trial judge misstates the law in his instructions or conclusions

Appellate Court wants:1. the right law to be applied2. rational verdicts

A. The Limits of Rational Inference 712

Reid v. San Pedro 713

One of R’s cows passed through a fence separating the grazing land from a railway. A train hit and killed it. The cow could have reached the tracks either by going through a portion of the fence negligently left un-repaired by SP, or by going through a gate which could have been left open by R. There was no direct evidence supporting either theory. The jury rendered their verdict in favor of R and SP appealed.

To overcome a motion for a directed verdict, does the plaintiff have the burden of producing evidence that it is more probable than not that the defendant is liable?

Yes. The evidence here points to 2 conclusions: one that SP was negligent and one that R was negligent. Neither of these conclusions is stronger than the other under the facts as known by the jury. Where the evidence of the plaintiff points with equal force to 2 equally plausible explanations, one which renders the defendant liable and the other not, the plaintiff must fail. Therefore, the plaintiff has the burden of presenting evidence that “it is more probable than not” that the defendant is liable in order to overcome a motion for a directed verdict against the defendant. R should have proved that it was more likely than not that his cow passed through the un-repaired broken fence. This R failed to do.

Notes and Problems, p. 715 715

4. (a) Enough evidence? Maybe – more likely that cow got there through the broken fence and not gate

(b) Is the veterinarian’s testimony enough? It is doubtful that Reid has carried her burden of persuasion

5. (a) no (b) no (c) no (d) yes

(e) Most courts would not admit such discovery because evidence of how hard you worked to obtain your evidence is not relevant

6. Enough evidence to get to the jury? Probably not – here, unlike previous cab question, it is impossible to obtain more direct evidence. It might be due to a background rate

B. Procedural Control of Rational Proof 717

1. Juries, Democracy, and Rationality 717

2. Adversarial Responsibility for Proof 718

3. Burdens 719

Burden of Production: Requires a party to produce “substantial” evidence to permit a reasonable jury to find in his favor

Burden of Persuasion: Requires a party to convince the jury by a preponderance of the evidence that he is correct. The plaintiff always has the burden of persuasion as to the allegations in his complaint. The defendant has the burden of persuasion as to any new matter (affirmative defenses and counterclaims) asserted in the answer.

Standards for Burden of Persuasion :

1. Civil – “preponderance of evidence”

2. Equitable (moral) – “clear and convincing evidence”

3. Criminal – “beyond a reasonable doubt”

Shifting Burdens:

1. Plaintiff must satisfy his burden of production – if he does, then:

2. Defendant must satisfy his burden of production – if he does, then:

3. Plaintiff must persuade jury that his version of the evidence is correct

Note: if P fails to meet his burden of production, the case ends without the D having to produce any evidence

p. 722, note 2: if both sides present credible evidence then all these mechanisms have no effect, they are only to prevent irrational decisions

4. Controlling Juries Before the Verdict 722

a. Judgment as a Matter of Law 723

Pennsylvania Railroad v. Chamberlain 724

The estate of C sued RR to recover for C’s death which occurred as he was routing train cars in a RR yard. C’s complaint alleged that certain cars were negligently brought into collision with the cars that C was riding on, which caused C to fall off and be run over. There was proven testimony by 3 eyewitnesses who said that there was no collision. Bainbridge, a witness for C, testified that he heard a loud crash before the accident; that he stood 900 feet from C’s body; that he was paying no attention; that loud crashes were common. The trial court entered a directed verdict for RR. C appealed and court of appeals reversed. Certiorari granted.

Was the evidence of the RR’s alleged negligence sufficient to reach a jury? In other words, did C satisfy her burden of production?

No. Where there is a real conflict of testimony, evidence must be considered by the jury. However, there was no such conflict here. Bainbridge’s testimony was so unsubstantial that it did not justify being heard by the jury, since there was no evidence that a jury could have properly proceeded to a verdict for the party offering it as proof. Why did

judge rule this way? (1) Bainbridge’s testimony was incredible (had an indirect angle of view; was a dark, misty night); (2) Indirect circumstantial evidence of Bainbridge is outweighed by direct evidence of 3 witnesses

When may a party move for JML?

At any time after the other party has been fully heard (e.g. after P’s case). For example, in case above, RR moved for JML at the close of all the evidence (a party may move for JML after the close of all the evidence and before the case is submitted to the jury)

What must the JML specify?

“Must specify the judgment sought and the law and the facts on which the moving party is entitled to judgment” – 50(a)(2) [same standards as that for summary judgment]

What evidence should the court consider before granting JML? (729)

- all of the evidence *

- not just the evidence that supports the non-mover’s case

- not a mere scintilla of evidence

- must be a conflict in substantial credible evidence

- where reasonable persons could differ

- where reasonable jury could reach verdict in favor of the non-moving party

- jury must weigh the evidence and determine the credibility of witnesses (not judge)

* Note: There is a split in the federal courts as to what evidence the court should consider before granting JML: (1) “all of the evidence” (most common test); (2) “favorable only” (evidence favorable to the non-moving party); (3) “qualified favorable” (evidence that is both favorable to the non-moving party, and evidence of the moving party that is not contradicted by direct evidence and cannot reasonably be disbelieved)

How should the evidence be viewed before granting JML?

Evidence is to be view in a light most favorable to the party against whom the motion is being made

What is the deciding factor in granting JML?

If the facts and inferences point so strongly in favor of one party that the court believes that reasonable men could not arrive at another verdict

What issues go to the jury?

Questions of fact Issues to which ordinary people will bring the benefit of wisdom

What issues go to the judge?

Questions of law (was there a contract, a deed?)Inferences so certain that there is nothing for the jury to decide on (JML)

b. Excluding Improper Influences 731

To prevent the jury from reaching irrational verdicts:

- before trial, judge screens jurors at voire dire

- during trial, judge limits what information jury hears to exclude misleading evidence

- instructs jury not to discuss the case with others until it is finished

- instructs jury to base its decision only on evidence presented at trial

- can sequester (isolate) jury if necessary to exclude media and public

c. Instructions and Comment 732

To guide the jury in their decision-making:

- judge explains the law that will apply to the case

- judge frames (in a sequential way) each question that must be decided by the jury

- judge can also (very carefully) comment on the evidence (in fed court only)

- judge may not, however, interfere with the jury’s independent decision-making

Judge has two audiences:

- there is a tension between making the instructions understandable for the jury yet satisfying the eagle eye of the appellate court that the law was stated precisely

5. Controlling Juries After the Verdict 733

Since the same standard (“no reasonable trier could have found in favor of the party against whom the motion is made”) is applied to JML before the verdict and renewed JML after the verdict, why would a judge ever allow such a case to reach the jury and later grant JML?

Why deny JML?

1. Economy: if the judge grants JML and an appellate court reverses, a whole new trial is necessary

2. Fairness: let the jury decide, since it will likely render the proper verdict anyway which will make for a stronger decision than if the judge does. Besides, if the jury decides improperly, judge can always rescue case with JNOV after verdict

a. Judgment as a Matter of Law (JNOV) 733

The JNOV is essentially a late ruling on the earlier motion for JML.

The standards for a JNOV are identical to those for a pre-verdict JML: “that there is ‘no legally sufficient evidentiary basis for a reasonable jury to find for the party’” against whom the motion is made – 50(a). By granting a JNOV, a court is saying that the winner of the verdict had no evidentiary support for at least one essential element of the claim or defense.

To be eligible for JNOV after the verdict, a party must have moved for JML before the case was sent to the jury. This has constitutional foundations. The Seventh Amendment provides that “no fact tried by a jury, shall otherwise be re-examined in any court of the U.S., than according to the rules at common law.”

b. New Trial 735

New trial may be ordered by the judge (Rule 59) or granted to a party by filing a motion. Probably the most common reason for granting a new trial is that the verdict is against the great weight of the evidence. The new trial requires an easier standard than that JNOV: that the verdict is “against the great weight of the evidence.” The grant of a new trial does not make a winner out of a loser; it just begins the contest again.

When may a new trial be granted?

1. Error in the process leading up to the verdict- attorney misconduct- jury misconduct- mistakes in admission- mistakes in judge’s instructions

2. Error in verdict form

3. Correctness in verdict itself

Lind v. Schenley Industries

P sued D to recover commissions due as a result of a written contract and oral promises made by D’s vice president. P’s allegations were supported by his own testimony and the testimony of D’s secretary. D denied that the commissions had been promised to P and that person who made the alleged promise had no authority to do so. D moved for a directed verdict, which was denied. The jury returned a verdict for P. The trial judge thought that the verdict went against the evidence and so granted D’s motion for JNOV and its alternative motion for a new trial. Both motions were granted under 50(b). P appealed.

Was the trial court’s granting of the motion for a new trial an abuse of discretion?

Yes. The subject matter of the case was simple and easily understood by an intelligent jury. The critical issue at trial was the credibility of the witnesses. P presented a very strong case. The jury believed this testimony. The trial judge simply substituted his own judgment for that of the jury and that was an abuse of legal discretion. A trial judge must abstain from interfering with the verdict unless it is quite clear that the jury has reached a seriously erroneous result. The trial judge has no right to usurp the jury’s role as the trier of facts and credibility of witnesses.

What standard should a trial judge use in granting a new trial?

It is “quite clear that the jury has reached a seriously erroneous result”

What standard should appellate court use to evaluate a judge’s order for new trial?

- “abuse of discretion”

- using sliding scale: “complexity of issues” v. “jury’s ability to apply common sense”

Joining JNOV with New Trial:

Rule 50(c) allows losing party to make all its pre-trial motions at once. It allows the trial judge to rule on them with the case still fresh in his mind and allows the appellate court to consider them all at once. Otherwise, the losing party would have to return to the trial court and make its motion for a new trial

Which of the following are immediately appealable?

1. Deny JNOV, deny NT – yes

2. Deny JNOV, grant NT – no (because no final judgment)

3. Grant JNOV, conditionally grant NT – yes (because new trial is only conditional)

4. Grant JNOV, conditionally deny NT – yes (because new trial is only conditional)

Remittitur and Additur 743

Instead of granting a whole new trial on the issue of damages, the court can simply reduce (remittitur) or increase (additur) the amount of damages to a reasonable level

How should the court calculate amount of damages?

1. highest reasonable amount

2. reasonable amount (average of similar cases)

3. lowest reasonable amount

Notes:

- the trial court must offer the option of NT or reduction in remittitur

- the P may not appeal remittitur once it has been accepted – he must accept or suffer NT

- USSC has accepted remittitur as constitutional

- USSC has held additur unconstitutional because it is seen as going beyond what the jury decided while remittitur is just reducing excess

C. Limits of Law’s Control: Jury in a Black Box

Peterson v. Wilson

P filed suit in district court after he was fired from Texas Southern University. After a trial, the jury awarded P $187,000. Ds moved for a new trial. In granting the new trial, the court revealed in its order that it did so because comments made by the jurors after the verdict showed that they disregarded the court’s instructions.

Is the admission of juror testimony to impeach a jury verdict prohibited?

Yes. A jury’s verdict can be disregarded if it is against the great weight of the evidence. However, here the district court clearly granted the new trial due to its meeting with jurors following the verdict and the comments made at that time. FRE 606(b) says that jurors may not testify to statements made in deliberations or concerning their mental processes in arriving at their decision. The only exception is for extraneous and outside influences on the jury. The only reason for granting the new trial in this case was the comments made by jurors after the verdict. This was erroneous.

3 Different Verdicts – Rule 49(b)

1. General Verdict: party winning and amount

2. General Verdict with Interrogatories- If general verdict is consistent with interrogatory answers – enter that judgment

- If interrogatory answers are internally consistent but not consistent with the general verdict, then:

(1) order jury to deliberate further(2) enter judgment based on the interrogatories (3) declare a mistrial

- If interrogatory answers are internally inconsistent and inconsistent with general verdict, then:

(1) order further deliberations(2) declare a mistrial(3) cannot enter judgment!

3. Special Verdict: no general verdict, just questions to interrogatories (favored by D)- Special verdicts ask the jury to decide specific factual questions

Why use a Special Verdict or General Verdict with Interrogatories?

1. Efficiency

2. Clarity

3. Control of Jury

XI. APPEAL 753

A. Who Can Appeal 754

What is Appealable:

1. Final Judgments: all final judgments of the district courts are immediately appealable to the appeals court (§1291). A final judgment is one which “ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.”

Six Exceptions to Final Judgment Rule (§1291)

(1) Partial Final Orders (54(b)) a district court judge may convert a “partial judgment” into an immediately

appealable final judgment by: - certifying that there is no just cause to delay the appeal; - resolving at least one claim or rights of one party; and - directing the entry of judgment. - you have 30 days to appeal from the entry of the order

(2) Collateral Order Doctrine (Lauro Lines) - conclusively determines

- an important issue that is completely separate from the underlying merits - which is effectively unreviewable on appeal

(3) Permitted Interlocutory Appeals (1292(a))- granting or refusing an injunction is immediately appealable - due to the potential of causing irreparable harm if granted or denied- if the court refuses to grant summary judgment that includes a preliminary

injunction, this is not immediately appealable - if a court stays proceedings for arbitration, this is not immediate appealable, - however, if the court denies arbitration, that is immediately appealable - you have 10 days to appeal from the entry of the order

(4) Discretionary Interlocutory Appeals (1292(b))- district court has the discretion to certify certain non-final interlocutory orders

for immediate appellate review- appellate court has the discretion to permit appeal (may choose to deny appeal)- immediate appeals are reserved for “exceptional cases”- to qualify for immediate appellate review, the district court must state:

- the order involves a controlling question of law- to which there is substantial difference of opinion, and - resolution of the question will speed termination of the litigation

- you have 10 days to appeal from the entry of the order

(5) Class Certifications (23(f))- a district court’s decision granting or denying class certification can be appealed on an interlocutory basis, meaning that the parties might not have to wait until the end of the litigation in the district court to learn whether the decision to certify would be upheld- appellate court has the discretion to permit appeal of an order granting or denying class certification - if the appellate court permits the appeal, the appeal does not automatically stay proceedings in the district court- instead, a party seeking a stay must apply to either the district court or appellate court- you have 10 days to appeal from the entry of the order

(6) Writs of Mandamus - an order to a public official to do his duty - you go directly to the appellate court to get the writ - appellate court must find district court is behaving outside its authority- most commonly used on the right to a jury trial - also used when transferring the case to another circuit

2. Aggrieved Parties: an appeal can only be taken from an “adverse decision.” When the denial of a claim results in P not getting the relief to which he claims to be entitled (whether in amount or in quality of judgment), then he has a right to appeal. [755, Probs. 1(a), (b); 2 (a), (d)]

3. Not-Moot Issues: you may not appeal from a judgment when circumstances have changed in such a way that relief is no longer possible. Thus, as long as circumstances are still the same so that relief is still possible, you can appeal.

4. Preserved Issues: also, you may only appeal a contention if it was presented to the trial court. Today in federal and most state courts, you need only make one objection; you need not make a formal exception to preserve the contention for appellate review.

Exceptions to “Must Raise to Preserve” Rule:

1. appellee (seeking neither to increase his own, nor to decrease his adversary) may raise new arguments in support of the result as long as it is contained in the record. However, cross-appellant (seeking something more) is bound by issues presented

2. law has changed by court decision since the trial court decision, but change in law must be fundamental

3. “plain error” limited to an error that affects the fairness, integrity or public reputation of the judicial process

4. summary judgment (in federal system at any time)

5. issue intimately connected to an issue properly raised and preserved

How to Appeal:

1. Contents of Appeal Notice:

- names of all parties - identify court to which appeal is going- judgment or order appealing from

2. Time to File:

- 30 days (60 days if US is a party) from the date of entry of the judgment appealing from

3. Extension of Time to File:

Extension for Excusable Neglect

- upon a showing of excusable neglect, you can get an extension to file your appeal notice- what is excusable is determined by district court- factors: moving party’s good faith, prejudice to non-moving party, impact of delay- you must seek the extension within 30 days after the original appeal period expires- then the district court may extend your time to appeal by another 30 days- or by another 10 days after motion for extension is granted (whichever time is later)

Extension for Failure to Receive Order

- if you did not receive notice of entry of judgment within 21 days after judgment- then district court may extend your time to appeal for 14 days, but only:- if no other party is prejudiced; and- you move for the extension within 180 days after judgment is entered or 7 days after

receiving notice of the entry

3. Place to File:

- clerk of district court from which you are appealing

4. Filing Mistakes:

- if you mistakenly file with Court of Appeals, this will not defeat the appeal- the appeals clerk will simply note the date of filing and send to district court- deemed filed with district court when filed with appeals clerk

5. Suspending Time to Appeal by Filing Post-Trial Motions

- some post-trial motions will suspend the time for appeal until those judgments are met:- RJML (50b) -- can be filed up to 10 days after entrance of final judgment - amended findings (52b) -- 10 days - amended judgment (59e) -- 10 days - attorney fees (54, 58) -- 14 days - new trial (59a) -- 10 days - vacatur (60b) -- 10 days (you can file this at anytime but must be in the 10 day period to

suspend appeal notice requirement)

----------------------Notes:

- appellate court will only consider issues that have already been raised in the brief. However, court may on its own consider issues not already mentioned in the brief (e.g. Erie – where neither party raised the choice of law issue)

- although USSC has held that there is no constitutional right to an appeal, every state and federal court allow at least one appeal as of right

- to discourage frivolous appeals, the federal court will assess “just damages and single or double costs to the appellee”

- you can file an appeal before a final judgment is actually entered but it is not considered entered until the final judgment is filed

- if you wish to appeal the disposition of one of the (6) post-trial motions, then you must amend your notice of appeal

- 1995 amends to FRCP 50, 52, 59, 60 and FRAP 4 makes clear that the motion must be filed (not merely served) within 10 or 14 days of entry of judgment

- Suppose that you have a $100,000 judgment against you. What happens to that judgment after you file your appeal? May the plaintiff start executing judgment or enforcing injunction? Yes, unless you file a supersedeas bond (suspends a judgment creditor’s power to levy execution pending appeal)

- Suppose trial judge announces a final decision (but has not entered yet its final judgment) then later finally enters its judgment? If the parties reasonably believe that the final judgment would be entered as the judge had so announced, a notice of appeal filed after the court announces a decision – but before the entry of judgment – is treated as filed on the date of and after the entry [rule 4(a)(2)]

- pretrial orders are not appealable

- if the court stays on arbitration, that is not appealable

- if arbitration is denied, that is appealable

- if you wish to appeal original judgment, you need do nothing additional

Liberty Mutual Ins. Co. v. Wetzel 764

P filed a complaint alleging that D’s employee insurance benefits and maternity leave regulations discriminated against women in violation of Title VII of CRA. P’s complaint sought several forms of relief, including monetary damages, attorney fees, and injunctive relief. After finding no issues of material fact in dispute, the district court granted partial summary judgment for P on the issue of liability only. Then the district court issued an order of final judgment as to D’s liability, but granted none of the relief requested in P’s complaint. The court of appeals held that it had jurisdiction over D’s appeal under 1291 and affirmed judgment of the district court.

Is an interlocutory appeal under Rule 54(b) limited to multiple claims?

Yes. Rule 54(b) does not apply because it is limited expressly to multiple claims actions in which one or more, but less than all, of the multiple claims have been finally decided and are found to be ready for appeal. Here, P set forth a single claim, which advanced a single legal theory which was applied to only one set of facts. Even if the district court’s order was a declaratory judgment on the issue of liability, it still left unresolved P’s requests for an injunction, monetary relief, and attorney fees. Thus, the district court’s

order was not appealable under 1291. Also 1292(a)(2) does not apply because Liberty Mutual has not been aggrieved and 1292(b) because appeal was not appealed within 10 days. Bottom line: Appeal was premature because there was no final judgment

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Lauro Lines v. Chasser 773

After the district court denied LL’s motion for dismissal based on a forum selection clause which limited Chasser to suing in Naples, LL sought to overturn the denial on interlocutory appeal.

Is an interlocutory order denying LL’s motion to dismiss a damages action on the basis of a forum selection clause in a contract immediately appealable under the collateral final order exception to §1291?

No. The district court’s order denying dismissal of the lawsuit is not a final judgment within the meaning of 1291. To fall within the collateral final order exception to 1291, an order must: (1) conclusively determine an important issue (2) that is completely separate from the underlying merits (3) which is effectively unreviewable on appeal. The district court’s order fails to satisfy the last condition. The right LL wishes to assert on appeal (the right not to be sued in a particular forum) is not one that is lost because LL could assert the forum selection clause in appealing any unfavorable final judgment.

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B. Scope of Review 785

Following a non-jury trial, the trial judge must state his findings of fact and conclusions of law. Findings of fact are presumed correct, and are only disturbed if the appellate court finds the trial court decision was clearly erroneous. “Clearly erroneous” has been defined as when, after reviewing all the evidence, the appellate court is “left with the definite and firm conviction that a mistake was made.” Findings are not set aside merely because the appellate court would have decided differently.

Standards of Review used by Appellate Court:

Findings of Fact – clearly erroneous

Inferences from Evidence – clearly erroneous

Conclusions of Law – de novo

Mixed Questions of law/fact – de novo

Motion RJML – de novo (since a question of law)

Order for New Trial – abuse of discretion (deferential standard)

Sanction Imposed – abuse of discretion

Note: Really all use the abuse of discretion standard (like clearly erroneous standard)(Standards of review summary – see Friedenthal, Kane & Miller hornbook at §134)

Anderson v. Bessemer City

P sued D for sexual discrimination after she was denied a position as a City recreation director. The trial court found for P that she was discriminated against, and the City appealed. The appellate court reversed the trial court ruling, holding that the lower court’s findings were clearly erroneous. P appealed to the USSC, arguing that the trial court’s finding of discriminatory intent in her case was a factual finding that could be overturned on appeal only if it was clearly erroneous.

Was the trial court’s interpretation of the facts clearly erroneous?

No. The finding of discrimination is a finding of fact. Therefore, the standard of review used by the appellate court to examine the trial court’s finding is the clearly erroneous standard. Under Rule 52(a), a finding is clearly erroneous only when, although there is evidence to support it, the reviewing court is left with the definite and firm conviction that a mistake was made. When there are 2 equally plausible views of the evidence, the fact finder’s choice between them cannot be clearly erroneous. These rules apply even when the trial court’s findings do not rest solely on credibility determinations, but are based instead on physical or documentary evidence. This is because the trial judge is in the best position to make credibility determinations. The appellate court did essentially a de novo weighing of the evidence, and this was error. Duplication of the trial court’s role does not increase the accuracy of factual determinations and only leads to a huge waste of judicial resources.

Harmless Error Rule 61

Even if an appellate court applying the appropriate standard of review determines that the trial court has committed error, it will not necessarily reverse. Federal courts are forbidden to reverse for “errors or defects that do not affect the substantial rights of the parties” (§ 2111). Therefore, a court must, after concluding there was error, also decide whether that error was harmful. Courts typically do so by speculating about the likely outcome of the case in the absence of error. What that usually means is that the appellate judge will ask how serious was the error.

Summary:

In order to Appeal:

- Must be aggrieved- Must have been an error that deprived you of substantial rights- Must have preserved the issue at trial level- And must have raised the issue at appeal level also- Must be done after a final judgment

XII. RESPECT FOR JUDGMENTS

Six instances where a previous adjudication binds a subsequent:

1. Law of the Case - an appellate court’s decision on an issue will hold later in the same case- e.g. remand after an interlocutory appeal

2. Claim Preclusion - formerly called res judicata

- once a claim is decided, it can’t be re-litigated

3. Issue Preclusion - formerly called collateral estoppel - an issue in another case is estopped from litigating - sometimes claim preclusion and issue preclusion are both called res judicata

4. Double Jeopardy - can’t be tried for the same crime twice (only criminal proceedings)

5. Stare Decisis - binding precedent

6. Judicial Estoppel - if you swear to something in one case, you can’t contradict that in a later case

A. Claim Preclusion

Claim preclusion forbids a party from re-litigating claims that should have been raised earlier.This promotes efficiency, finality and consistency.

Claim Preclusion Requirements:

1. Same Claim

2. Same Parties or Privies

3. Final Judgment

4. Judgment on the Merits - see examples on 828, 829

5. Order Practically Final (Given By Some Courts)

1. Same Claim

“Splitting” Between Cases:

Courts that preclude a plaintiff’s claim often find the plaintiff tried to split his case between lawsuits. Such splitting usually takes one of the following forms:

1. Splitting Theories of Recovery- contract / quasi contract - conversion / restitution

2. Arithmetical Splitting- P tries to recover separate damages involving the same incident in 2 lawsuits- broken hand / broken foot- personal injuries / property damage

3. Splitting of Relief- P asserts an alternative or supplemental remedy in the second action- replevy of car / violated due process rights

Hypos:

Suppose a fluorescent light exploded suddenly in this room and injured me.

1. I could bring an action based on negligence. Should I be able later to bring an action based on products liability? (Splitting theories of recovery)2. I could bring an action the first time for damage to my body. Should I be able to bring a later action for damage to my clothes? (Arithmetic splitting)3. I could bring the first action for damages. Then should I be able to sue the manufacturer to have the defective lights removed? (Splitting of relief)

Claim Preclusion Tests:

1. Traditional Test (Same Evidence) 2. Modern Test (Same Transaction)

Modern Trend: The modern trend is to consider the claim broadly. The claim excluded “includes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction or series of connected transactions, out of which the claim arose.” (Restatement § 24, note 2c, 807)

Severing Claims: A court may choose to sever parts of a complaint for trial if it finds, for example, that one of the theories is more complicated. According to Restatement 24(b), one of the factors that ought to be considered in deciding whether claims ought to be precluded is “whether (the claims) form a convenient trial unit.”

Louisiana Approach: Louisiana has adopted broad formulas for both claim preclusion and issue preclusion: “all causes of action existing at the time of final judgment arising out of the transaction or occurrence that is the subject matter of the litigation…with respect to any issue actually litigated.”

Other Tests: There are many other tests used by courts, such as: same right (same claim); same duty (same claim); same delict (same claim); same wrong (same claim)

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Frier v. City of Vandalia

F sued City in state court for replevin of his car. In his complaint, he alleged that City seized his 4 cars without a hearing or a ticket. State court entered judgment in favor of City, finding that City had the right to tow F’s car because it was obstructing traffic. F then filed a 1983 Civil Rights claim in federal court, alleging City deprived him of his due process rights by not granting him a hearing before seizing his cars. The district court dismissed F’s suit for failure to state a claim and F appealed.

Does claim preclusion bar a second suit where the first suit arose out of the same transaction?

Yes. Claim preclusion bars a second suit where the first suit arose out of the same transaction. The court upholds the district court dismissal because of claim preclusion, choosing to apply the modern “same transaction” test. Claim preclusion bars “not only as to every matter which was offered and received to sustain or defeat the claim or demand, but to any other admissible matter which might have been offered for that purpose.” This encourages parties to consolidate all closely related matters into the same suit. This prevents oppression of defendants through multiple cases and there is no good reason to incur the costs of litigation more than once.

F could have joined his 1983 Civil Rights claim (brought in the second lawsuit) to his replevin claim (brought in his first lawsuit). The 2 claims have the same common core of

operative facts and are the same transaction. Both theories alleged the same conduct: that City towed and detained his cars without lawful process.

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Hypos:

1. Suppose that F had brought his first action in municipal court whose jurisdictional limit was $15,000. CP? No

2. What if F’s first claim was brought under a special, expedited replevin statute that, in order to speed the process, permitted only a single question to be litigated --- who had the superior right to possess the car? CP? No

3. What if after the second action in federal court F had filed a third suit, this one claiming that the city overcharged him on a recent tax bill? CP? No, because different claim that is not even connected series of transactions

4. What if after the second action F had filed a third suit, this one claiming that the police officer, when he left the note addressed to Charlie, had been sufficiently irritated to vandalize his porch? CP? Probably not, although some courts might see this as part of same series of connected transactions

5. What if F was married and one of the towed cars belonged to his wife. He brought the first action of replevin in state court for his car. After that went to judgment, his wife brought a § 1983 action for her car in federal court. CP? No, different party

6. Student sues University for a broken arm allegedly sustained when a campus shuttle bus driver negligently began driving the bus while P was getting off. Verdict and judgment. Student brings a second action for his broken leg, allegedly sustained when, after falling off the bus, he fell into a trench left open by university workers excavating next to the bus stop. CP? Yes

7. Security officers at University stadium falsely accuse Student of drunk and disorderly conduct during an athletic event. They assault him, slander him to his friends, and file criminal charges for disturbing the peace. Student sues for assault, slander, and false imprisonment and wins. May he file a second action for malicious prosecution? Yes, unless malicious prosecution action has accrued at the time first suit was filed.

8. New PhD gets a postdoctoral employment in biochemistry lab. She is dropped from her payroll because, according to lab head, her experimental technique is not as good as she represented it to be. A year later, her employer is called for a reference and says he suspected New PhD was on drugs. If she has sued to recover the salary promised her at the time of her original employment and termination, may she bring a second slander action? Yes, because sufficiently different time and circumstances.

9. Husband is injured and recovers damages. May wife bring separate action to recover for loss of consortium? Most states say yes. Problem with forcing joinder of different people is that they may live in different states.

10. What happens if the same claim is pending in 2 courts? Suppose one goes to judgment; Effect? Claim preclusion on the other

11. Suppose Court A enters a judgment. What is court B to do? Give as much as a court in state A would give for its judgment

12. Suppose (note 10b, 810) State A has no waiver rule (failure of D to object to splitting will be deemed as his consent) and would hold that because claim in Court B is the same claim, it is precluded. Suppose that Court B decides that it is not precluded and rules the opposite way as Court A on the merits. What is D to do in the face of conflicting judgments? Appeal up the line, if necessary, to the USSC because this is a constitutional issue. Argument: that Court B should give FF&C to court A’s judgment including any preclusive effect.

13. But if D does not appeal, what is Court C to do in the face of conflicting judgments? Last in time (Court B) controls; D should have appealed Court B’s judgment.

14. When an agreement becomes part of a court judgment/decree, then you have consent judgment/decree. Presumption is that the judgment is given full claim preclusion effect. If you wish to save a right to a claim, then make an explicit waiver in the judgment. The problem in Coker (note d4, 817) was that the waiver was not explicit enough, so claim preclusion applied.

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Martino v. McDonald’s 811

In the first lawsuit, McD sued Mar for breach of contract for opening a competing fast food restaurant. P then agreed (through a consent decree) to terminate the lease and sell the franchise property back to McD. In the second lawsuit, Mar sued McD, arguing that a termination of the lease was an effort by D to monopolize the franchise business.

Does res judicata bar a counterclaim when its prosecution would nullify rights established by a prior action?

Yes. The conclusion of the first lawsuit with consent judgment has a res judicata effect on this second lawsuit because the earlier judgment was accompanied by findings of fact and conclusions of law that went to the merits of the controversy. These findings and conclusions had a preclusive effect on any subsequent lawsuit. Although the second lawsuit involves a different claim, it is barred on the grounds of res judicata because it would change the outcome of the prior lawsuit and would thus lead to inconsistent judicial rulings. (If the court were to find that the termination of the lease violated the antitrust laws, this would be inconsistent with the previous judgment upholding termination of the lease). Claim preclusion helps prevent inconsistent judgments, thereby promoting (1) judicial economy; (2) integrity of judgments; and (3) the protection of those who rely on such judgments.

Note: Rule 13(a) bars compulsory counterclaims that are not raised at the proper time. If a defendant fails to assert a compulsory counterclaim in the original action, that claim may not be brought in a later, subsequent action (with some exceptions). In this case, for example, because the first lawsuit ended with a consent judgment before Martino filed an answer, Rule 13(a) did not apply to the second lawsuit.

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2. Same Parties or Privies 817

In both claim and issue preclusion, the parties who were part of the original litigation and those in privity to them are bound by that judgment. The problem is that privity is a conclusory label. It is really a matter of fairness whether someone ought to be bound.

“In Privity”: Where a person is so identified in interest with another that he represents the same legal right. This includes a mutual or successive relationship to rights in property

Non-Parties In-Privity:(courts regularly bind these non-parties to judgments)

1. Legal Relationships

- successive owners of property- administrators, beneficiaries, heirs, trustees, executors of estates- co-owners, joint owners- indemnifiers (insurers)- those held vicariously liable for the acts of another

2. Agreement to be Bound

- a party agrees to be bound by a decision to a lawsuit to which it was not present

3. Virtual Representation

- guardians appointed by the court to represent a minor or incompetent- where one so guides and controls a lawsuit that a court treats him as a party- class actions – if a sufficient number of the class appears, they can virtually

represent the others not present

Searle Bros. v. Searle 818

In the first lawsuit, the parties were Edlean Searle v. Woodley Searle in a divorce action. Woodley had argued that he had a one-half interest in the property and that the other half was owned by a partnership with his sons as partners. The issue determined was that the Slaugh House would be given completely to Edlean. In the second lawsuit, the parties were Searle Bros. (partnership of sons and father) v. Edlean Searle. The trial court held claim and issue preclusion barred this action.

Does the judgment in the first lawsuit bar the Searle brothers from bringing this second lawsuit on the grounds that they are in privity with their father Woodley?

No. The Searle brothers in this second lawsuit were not parties to the first lawsuit. Thus, the only way that they can be barred from pursuing the second lawsuit is if they were “in privity” with the parties to the first lawsuit. In this case, the brother’s interest is neither mutual nor successive. They claim no part of the interest owned by their father Woodley but assert their own, independent and separate partnership interest in 50% of the property. The rights are similar but not identical. The property interest arose before the commencement of the first lawsuit, not after it, so that the brothers cannot be regarded as in privity and subject to the first judgment.

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Hypos:

Suppose I am unhappy with my Geo. I bring a breach of warranty action against Geo and lose. Then I sell you the car. May you bring a breach of warranty action for the same defect? No. You are a successor in interest. – p. 826, note 5(a)

The insured is injured. His insurance company paid part, so the insured assigned that part of interest to his insurance company. Then the insured sued and lost. Why is the insurance company bound? Insurance company is a successor in interest; it stepped into the shoes of the insured. – p. 826, note 5(a)

Another very common case is a trustee or administrator. Such a person represents the beneficiaries. The beneficiaries are bound and said to be in privity.

3. Final Judgments 827

Only final judgments will be given preclusive effect. This also includes Partial Final Orders under Rule 54(b), where the court has declared as final the ruling as to a claim or a party. The modern trend is to give claim preclusion effect to an order which, as a practical matter, is final.

What effect do post-trial motions and appeals have on final judgments?

- Federal system: Judgment is final even though an appeal is pending- Some states: Judgment is postponed while the appeal is pending- Some states: If judgment given claim preclusion effect and then reversed on appeal,

then the judgment is vacated – Rule 60(b)

4. Judgment on the Merits 828

The following stages of litigation WILL preclude filing a second suit:

- full jury trial- directed verdict- summary judgment- dismissal for failure to state a claim (but will be allowed leave to amend) *- dismissal for failure to prosecute

The following stages of litigation will NOT preclude filing a second suit:

- dismissal for lack of jurisdiction- dismissal for improper venue- dismissal for failure to join a party under Rule 19

* in code pleading states, dismissal for failure to state a claim will not bar a second suit because in code pleading, additional facts could change the result

Gargallo v. Merrill Lynch 830

G had a margin account with ML (where ML lent him money). His investments went poorly and ended up owing ML $17,000. ML sued in state court to collect the debt. G filed a counterclaim, alleging the losses were caused by ML violating federal securities laws (federal issue). The state court dismissed G’s counterclaim for G’s failure to comply with discovery orders. G then filed a complaint in federal district court, but the court dismissed G’s complaint on res judicata grounds, finding that G’s claims were the same as those dismissed by the state court. G appealed.

Does a judgment rendered by a court lacking subject matter jurisdiction have a claim preclusive effect in subsequent proceedings?

No. (The federal district court’s dismissal of G’s complaint on res judicata grounds was proper because: (1) the previous state court dismissal of G’s counterclaim for failure to comply with discovery orders operated as a final judgment on the merits; and (2) it involved the same claim and the same parties as the original action.)

However, following the teaching of Marrese, a federal court must give the same preclusive effect as the state court. (1) Ohio law says that we should not give claim preclusive effect to a judgment that lacks subject matter jurisdiction, and (2) Ohio did not have subject matter jurisdiction because only federal courts have jurisdiction over federal securities cases. Therefore, the state court judgment did not have a preclusive effect on this case and the federal court may hear it.

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What should be the preclusive effect when a claim is brought from federal court to state court where the first case was based on diversity?

A state court must give the same claim preclusive effect to federal court judgments (whether they involve federal question or diversity cases) that federal courts give.

In diversity cases, the claim preclusive effect of a federal court should be the same as the claim preclusive effect of the state court in which the federal court sits as long as there is no incompatibility (between federal rules and state law)

In sum:

STATE – to – FEDERAL = follow state’s claim preclusion effect

FEDERAL – to – STATE = follow federal common law incorporating state’s claim preclusion effect (as long as there is no conflict)

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B. Issue Preclusion

Issue preclusion bars from re-litigation only those issues actually litigated and determined. These issues will be barred from re-litigation in all subsequent claims between the parties (and, in some cases, between claims that do not involve both parties). Like claim preclusion, it promotes efficiency, finality and consistency.

Issue Preclusion Requirements:

1. The Same Issue

2. Actually Litigated and Determined

3. To Final Judgment

4. And Essential to the Judgment (not dicta)

5. Is Binding between Same Parties & Privies in Subsequent Litigation

1. The Same Issue 835

When defining the “issue”, you must consider the substantive and procedural conditions under which it was determined. For example, civil and criminal proceedings operate under different burdens of proof. To prove by a preponderance of the evidence (civil) does not mean that one can prove the same issue beyond a reasonable doubt (criminal).

Notes & Problems, p. 835

1. Government criminally prosecutes IRS agent. Agent is acquitted. Government then sues agent in a civil suit. Agent seeks to invoke preclusion by arguing that her acquittal in the previous case shows that the acts did not occur. Preclusion? No. Just because government failed to meet the higher standard of proof (“beyond a reasonable doubt”) does not mean that it did not meet a lower standard of proof (“by a preponderance of the evidence”).2. Reverse the order above. The civil action came first and the government won. Then the government brings criminal charges. Why doesn’t the first case preclude? Government must now meet a higher burden of proof to convict her in the second criminal case.3. Suppose in Problem 1 the agent was convicted in the first criminal case. In the second civil case, could the government take advantage of preclusion? Yes, because government proved agent’s guilt by meeting its higher burden of proof in the first criminal proceeding.

2. An Issue Actually Litigated and Determined 836

Unlike claim preclusion, under which theories are barred even if not raised, issue preclusion only precludes issues actually litigated and determined in the prior action. The rationale behind issue preclusion is that the needs of judicial finality and

efficiency outweigh the possible gains of fairness and accuracy from continued litigation of an issue that has already been considered by a court.

Issue preclusion cannot be used if the first action involved any of the following because no issues were actually decided:

- default judgment- sanction- consent decree- admission- stipulation

Illinois Central RR v. Parks 836

Mr. and Mrs. Parks were injured when their car hit a train. Wife sued for her own injuries, and husband sued for loss of consortium. The jury returned a general verdict in wife’s favor on her personal injury claim and in RR’s favor on husband’s claim. Then husband sued RR for his own injuries. RR moved for summary judgment. The trial court held that husband’s claim was not barred by claim preclusion or on the issue of contributory negligence.

Does claim preclusion or issue preclusion bar husband from suing for his own injuries?

(1) No. Claim preclusion does not apply to a different cause of action. The second suit is different from the first suit because the second suit seeks recovery for husband’s personal injuries, whereas the first suit sought recovery for injuries associated with his wife’s personal injuries. (2) No. Issue preclusion applies to a subsequent case when issues that were previously litigated and determined are raised again. Since the jury returned a general verdict against husband and in favor of RR, it is impossible to know the basis for their decision (what issues were actually determined). Their verdict could have been based on a finding that husband sustained no damages or that his own negligence caused the injuries. Here it is not clear what was actually litigated or determined by the jury in the previous suit.

Notes and Problems, p. 839

4. Suppose RR had not asserted husband’s contributory negligence in the first action. Could RR plead that defense in husband’s second action? Yes, because IP is limited to issues actually litigated. Unlike CP, under which theories are barred even if not raised, IP only bars issues actually decided in the prior action.5. A sues B for negligence in a state with contributory negligence and no compulsory counterclaim. General verdict for B. Then B sues A for damages. What issues are precluded? None. The “general” verdict that was returned in the prior action could mean that jury thought B wasn’t negligent or that A was contributorily negligent. Unclear.

After a general verdict, how can one uncover what issues were actually litigated?

Pleadings, pre-trial order, witnesses presented, verdict formPretrial Order – a court order setting out the claims and defenses to be tried, stipulation of parties, and procedural rules, as agreed by the parties at a pretrial conference

3. An Issue Essential to the Judgment 841

Usually it is hard to discover what issues were actually litigated. However, in a bench trial there are usually findings of fact and conclusions of law. Suppose that a court bases its judgment on 2 theories. Should one, both, or neither be given issue preclusion effect?

Why preclude:

1. Both issues were fully litigated2. Each supports the results3. The loser may appeal

Why not preclude:

1. The issue was not carefully considered originally (shown by multiple grounds)2. Might discourage appeals (must win on all to succeed)3. Might generate additional appeals (to avoid preclusion effect)

Yet, if appellate court has considered the issue, then concern is lessened. Therefore:

1. If both upheld on appeal – preclude both2. If one upheld / one rejected on appeal – preclude the one upheld 3. If one considered – preclude that one only

In sum, when a court’s judgment is based on multiple grounds, there are 3 possible positions to take on issue preclusion effect:

When there are multiple grounds to uphold a judgment:

1. Preclude both (1st Restatement) 2. Preclude neither unless affirmed on appeal (2nd Restatement)3. Preclude neither (Halpern)

4. Between Which Parties? 843

Due process requires that anyone bound by a decision be a party or in privity. At common law, this identity of parties (called mutuality) was a requirement for both claim and issue preclusion. That is, a person could only bind if that person was himself bound by the previous result. For example, in Illinois Central RR v. Parks, wife sued for injuries and won. Husband then sued for his personal injuries. Why could husband not use previous judgment on issues of negligence, causation and proximate cause? Answer: if RR had won, husband would not have been bound. Today, however, courts are abandoning the mutuality requirement for issue preclusion.

Parklane Hosiery Co. v. Shore 845

Round 1: SEC sued PH for issuing false and misleading proxy statements (SEC wins)Round 2: Shore sues PH for essentially the same allegations as had SEC in round 1. Shore wanted to use “offensive” IP by taking the issue decided in round 1 (PH issued misleading proxy statements) in his subsequent suit against PH. PH moved for partial summary judgment as to the issues already litigated in round 1. The district court denied the motion, holding that issue preclusion would deprive PH of their 7th Amendment right to a jury trial. Court of appeals reversed. USSC granted certiorari.

Should Shore be allowed to use “offensive” issue preclusion against PH?

Offensive use of IP should not be allowed where:

1. The P could easily have joined in the prior action

2. The D did not have a full and fair opportunity to litigate the issue in prior suit because:

- first action was for a small amount- future suits were not foreseeable in the first action- previous judgments were inconsistent- fewer procedural opportunities in the first action

Applying the above factors to the facts of this case, (1) the federal securities laws provide that a plaintiff may not join in an SEC action without consent. Thus, P could not have easily joined the first action. However, (2) PH had a full and fair opportunity to litigate because SEC made serious allegations, so PH didn’t take lightly; it was foreseeable since Shore’s action was already pending; decision for SEC was not inconsistent with other decisions; no procedural opportunities are available to PH in the second suit that were unavailable in the first suit that might cause a different result.

State Farm v. Century Home 855

Over 50 actions were filed against D to recover for losses from a fire. The issue of D’s negligence was tried 4 times and 3 final judgments were entered. The D has received one favorable judgment and the Ps have received 2 favorable judgments. The present Ps sought to use IP on the issue of D’s liability.

Is it unfair to a defendant to apply non-mutual offensive IP where the determination of prior actions is inconsistent?

Yes. Where prior decisions on a particular matter are inconsistent, a court cannot have complete confidence in those decisions, and it would be unfair to preclude a party by the judgment it lost. Here, because the prior determinations were different, it would be unfair to preclude D from re-litigating the issue of liability.

C. The Boundaries of Preclusion 862

Both CP and IP are judge-made rules, so it is not surprising that courts have found exceptions not required by the Constitution.

1. Exceptions to Claim Preclusion 863

Reasons Not to Allow Claim Preclusion:

1. Parties agreed to allow claim splitting2. Court in first case reserved P’s right to bring the second action3. Jurisdictional limitations prevented P from seeking certain forms of relief now sought4. First case was wrongly decided (e.g. due to a change in law after first case)5. Claim involves a recurring wrong6. Court finds the results of the first case too bizarre7. Some other compelling reason (catchall)

Does Claim Preclusion Apply to Civil Rights cases?

- Yes. If you could have brought both actions in one action, then CP will operate to bar you from bringing your second claim – thus, the same and usual rules for CP apply for civil rights cases under §1983 (Miagra)

2. Exceptions to Issue Preclusion 865

Since IP is a broader doctrine, there are more exceptions to it

Reasons Not to Allow Issue Preclusion:

1. Party unable to obtain review in first suit2. Both actions involve claims that are substantially unrelated3. A new determination is necessary due to a change in law4. A new determination is necessary due to differences in procedure between the courts

5. Party had a heavier burden of persuasion in the first action than in the second6. Burden of persuasion has shifted to the opposing party7. Potential adverse impact of the determination on the public interest8. Potential adverse impact on those not parties to the first case9. Not foreseeable during the initial action that the issue would arise again10. Party had no opportunity or incentive to fully and fairly litigate the first case

3. The Law of the Case and “Judicial Estoppel” 867

Law of the Case: You have one shot to an appeal. After the appellate court has issued an appellate ruling, that ruling becomes the “law of the case” which will govern in all subsequent trial and appellate proceedings. The losing party may not reargue the same issue on remand before the trial court. If the losing party does not like the initial appellate ruling, his only choice at that point is to file a writ of certiorari to the Supreme Court, but he may not continue to litigate the issue in the lower court. Its purpose is to prevent re-litigation of issues that have already been decided.

Judicial Estoppel: (Preclusion of “Inconsistent” Positions): If you take a sworn position in an earlier proceeding, and benefit from that position by receiving a judgment or other award, you will be barred from taking a different position in a subsequent proceeding. If you give inconsistent statements, you have to explain why they are inconsistent to avoid summary judgment. Note that unlike issue preclusion, where you usually lost your first case, in judicial estoppel, you usually won your first case.

When should Judicial Estoppel be Applied?

1. Party makes a sworn statement that is inconsistent with a prior sworn statement concerning a factual matter

2. Party derived a benefit from making the prior statement3. Party is now misleading the court to gain an unfair advantage

Why will a party not be judicially estopped from making inconsistent pleadings?

- Under rule 8(e)(2), a party may state as many claims as it has “regardless of consistency” because the parties at the outset are uncertain about which set of facts they will persuasively present. Hence, the pleadings are not sworn to.

C. Collateral Attack and Reopened Judgments 871

1. Full Faith & Credit to Judgments 872

Although the doctrines of issue and claim preclusion require courts within a given unit to respect the judgments of other courts within that same unit, they give no guidance as to the judgments of courts outside that unit.

The Constitution now requires each state court to give the same (no more or less) full faith and credit to state court judgments as those state courts would give. -- 1738

Full Faith & Credit Demands:

State courts must honor other state court judgments

State courts must honor federal court judgments (Semtek)

Federal courts must honor state court judgments

Federal courts must honor other federal court judgments

(An open question whether federal court can give more effect than the state court would)

Note: like judgments, issue and claim preclusion must also be given the same effect!!

Note: if the original court was without personal jurisdiction, then the second court need not give full faith and credit -- Pennoyer

How does Full Faith & Credit apply to foreign judgments?- If a treaty requires it, that binds both state and federal courts- If no treaty applies, notions of comity and reciprocity will be applied (in federal court)- States free to do as they wish, but most states give res judicata effect too

Comity = the respect shown in giving effect to another country’s judicial decisions

Test to determine whether federal court should honor a foreign judgment:1. Were the procedures used by the foreign court fundamentally fair (comity)?2. Does the foreign court honor our judgments (reciprocity)?

When are you bound in the following cases?

Lack of Personal Jurisdiction: If the court lacks personal jurisdiction, you need not show up and can collaterally

attack the judgment in a later proceeding. – Pennoyer If you show up and challenge personal jurisdiction, you are bound with regard to the

jurisdictional issue through issue preclusion – Baldwin If you show up and do not raise an objection to personal jurisdiction, you waive your

right to object later on – Rule 12(h)

Lack of Subject Matter Jurisdiction: If you litigate subject matter jurisdiction, you are bound by that decision – Durfee Courts are split on whether you are bound when you were properly notified and yet

failed to raise an objection to subject matter jurisdiction

Bottom Line: If you litigate personal or subject matter jurisdiction, you are bound by that decision

Hypo:State 1 A v. B B shows up, A winsState 2 B v. A A shows up and argues FF&C which state 2 erroneously rejects, B winsState 1 B returns to state 1 to enforce the judgment of state 2. What result? “Last in

Time” controls, so that state 1 must accept state 2’s judgment. How should A avoid this problem? Appeal state 2’s refusal to give FF&C to state 1’s judgment

Durfee v. Duke

Durfee brought an action against Duke in Nebraska court to quiet title to land situated on the Nebraska/Missouri border. The Nebraska court had subject matter jurisdiction only if the land was in Nebraska. Duke appeared in the Nebraska court and litigated the issues, including the court’s jurisdiction. Both the Nebraska trial and appellate courts found for Durfee and held that the Nebraska court had subject matter jurisdiction based on their finding that the land was in Nebraska. Duke then brought an action against Durfee in Missouri district court to quiet title on the same land.

After an issue has been fully and fairly litigated, does the principle of res judicata preclude the same issue from being re-litigated by the same parties in another state?

Yes. The Missouri courts indeed have the power to inquire into the jurisdiction of the Nebraska courts to render the judgment quieting title the land. But when that inquiry discloses that the jurisdictional issues had been fully and fairly litigated by the parties and finally determined in the Nebraska courts, the federal court in Missouri was correct in ruling that further inquiry was precluded. Public policy demands that there be an end to litigations.

2. Post-Judgment Relief 881

Suppose a litigant discovers that his opponent has won a victory through unlawful means, like concealing evidence he should have disclosed. He cannot appeal the decision because the original court committed no error (the complaint is instead about evidence that never reached the court’s attention). And he cannot bring a second lawsuit either because he will face the defense of claim preclusion. What can he do? Move to vacate the judgment under Rule 60(b). But why would a court remove the certainty of a final judgment? Getting it “right” may sometimes be more important than keeping it “final”. On the other hand, courts are more willing to vacate after a default judgment than after a complete trial and appeal. Why? Every party should have an opportunity to be heard. The other situation where courts are more willing to grant vacaturs is when the attorney alone, not the client, is at fault.

Reasons to Grant Relief from Judgments – Rule 60

b1. Mistake, Inadvertence, Surprise, or Excusable Neglect

b2. Newly Discovered Evidence

b3. Fraud, Misrepresentation, or Other Misconduct by an Adverse Party

b4. Judgment is Void

b5. Judgment has been Satisfied, or Reversed, or its Enforcement would be Inequitable

b6. Or Any Other Reason (i.e. “Super Fraud”)

Note: Parties may bring b1, b2, b3 within a reasonable time, but not later than 1-year after the judgment was entered. Parties may bring b4 and “Super Fraud” at any timeParties may bring all others within a reasonable time

Note: Taking an appeal does not extend either the Rule 60(b) “one year” or “reasonable” time limits. However, a Rule 60 motion filed within 10 days after entry of the judgment will toll the time for taking an appeal

U.S. v. Beggarly

The federal government brought a quiet title action against Beggerly over certain property. The issue was whether certain land had been deeded to a certain person prior to the Louisiana Purchase in 1803. If it had, then the government would now have to purchase it; if not, then the government would already own it. A search by government officials of public records revealed nothing that proved a land grant before 1803, and the case settled. However, Beggerly continued to search the records and discovered that a grant took place in 1783. Beggerly then moved to vacate the judgment. The district court dismissed the case. The court of appeals reversed, deciding that it qualified as an independent action under Rule 60(b).

Do the facts of this case justify vacating the prior judgment (made after the 1-year limit)?

Rule 60(b)(3) motions made beyond one-year after the judgment must establish that a “grave and gross miscarriage of justice” will result if the judgment is not set aside. However, the facts do not justify this standard. They only establish that the government failed to “thoroughly search its records and make full disclosure to the court” regarding the original grant. No grave miscarriage of justice will result if the original settlement stands.

Modifying Consent Decrees: A consent decree is a settlement between parties that the judge gives his approval on. A party seeking a modification of a consent decree must establish that a significant change in facts or law warrants modification of the decree and that the proposed modification is suitably tailored to the changed circumstances – Requires a motion under 60(b)(5) to modify

XIII. JOINDER (FRCP 13-24)

B. Joinder of Claims 891

1. Joinder of Claims by the Plaintiff Rule 18 892

Common law said you could join many claims so long as same writ, but not with different writs. Equity was more flexible. Field code was even more flexible. Today, legal, equitable, as many claims as a party has against an opposing party, can be joined

Although Rule 18 allows joinder, it does not compel it. There is no compulsory joinder of claims. However, the principles of former adjudication may require a P to join related claims, especially if they arise out of the same incident. Also, a P’s own interest is often served by joining all his related claims against the D in one suit

2. Counterclaims by the Defendant Rule 13 895

We have just seen that a party may join as many claims, counter-claims, third-party claims as he has against the opposing party. Must a defendant in his answer join certain claims? Permissive counterclaims may be pled at the option of the defendant. Compulsory counterclaims must be presented in an answer or they are lost, unless the court allows amending under 13(f)

Plant v. Blazer Financial Services 895

P, who borrowed money from D, sued D in federal court, claiming D violated the Truth in Lending Act by not making certain required loan disclosures. D counterclaimed on the P’s unpaid balance of the loan. The trial court ruled that the counterclaim was compulsory within the meaning of Rule 13(a). P appealed

Is D’s counterclaim that P is in default on the underlying debt a compulsory counterclaim within the meaning of Rule 13(a)?

Yes. A counterclaim is compulsory if it arises out of the same transaction or occurrence that is the subject matter of P’s claim. Four tests have been used by courts to determine whether a claim is compulsory. (If the counterclaim passes any one of these tests, then it is compulsory):

Tests for Compulsory Counterclaims:

1. Largely the same issues of law and fact?

2. Would res judicata bar a second suit if not raised?

3. Will the same evidence refute both the claim and the counterclaim?

4. Is there a logical relationship between the claim and the counterclaim?

The most important test for determining whether a claim or counterclaim arises out of the same transaction or occurrence is test 4. A “logical relationship” exists when the counterclaim arises from the same aggregate of operative facts. Here the test is satisfied because a single aggregate of operative facts (the loan transaction) gave rise to both P’s and D’s claim.

B. Joinder of Parties 904

1. Permissive Joinder by Plaintiffs Rule 20 904

Mosley v. GM

Mosley and 9 other employees joined in suing GM. Although some employees claimed acts of discrimination that were different than others, all 10 employees alleged that they had been injured by a general policy of discrimination on the part of GM. The District Court ordered the 10 Ps to bring 10 separate actions, holding that the claims had little in common and that as pleaded were completely unmanageable. Ps were granted an interlocutory appeal.

Did the District Court abuse its discretion in severing the joined actions?

Yes. Under Rule 20(a), permissive joinder of parties requires that (1) a right to relief must be asserted by each P arising out of the same transaction or occurrence or series of transactions or occurrences; and (2) some question of law or fact common to all the Ps must arise in the action. (1) Under the first requirement, all logically related events generally are regarded as comprising a transaction or occurrence. Here, the events giving rise to the Ps claims are logically related because all Ps alleged that they were injured by the same general policy of discrimination on the part of GM. This would satisfy the first requirement that the claims arise from the same transaction or occurrence. (2) Under the second requirement, it is not necessary that all questions of law and fact be common. Courts have found that the discriminatory nature of a defendant’s conduct is basic to the class. The fact that the individual class members may have suffered different effects is immaterial.

In Mosley, why would Ps prefer to join their claims in one action? (1) To share the costs of discovery; (2) A policy of discrimination is more obvious when several Ps bring their action together. On the other hand, (1) D would prefer to increase costs for the Ps; and (2) to hide their discriminatory policy.

What happens when a court finds joinder improper, simply dismiss the action? No. Under Rule 21, dismiss without prejudice the improperly joined parties. Under Rule 42(a), sever the claims.

2. Impleading Third Party Defendants Rule 14 911

Watergate Landmark Condominium Association v. Wiss, Janey, Elstner 911

WL (condominium association) sued L&N (real estate management firm) and WJE (engineering firm) for faulty design of the repair of balconies. L&N cross-claimed against WJE and filed a third party complaint against BW (waterproofing firm), which did the actual repairs and which was hired by WL, alleging that it had negligently performed the repairs. Trial court dismissed L&N’s third party complaint.

Can a third-party claim be maintained if the liability asserted against the third party is not derivative of the main claim?

No. Under Rule 14(a), a third-party claim can only be maintained if the liability asserted against the third party is derivative of the main claim. A third party claim may be maintained only if the third party would be derivatively liable to the defendant if the defendant were found liable. Here, the claim asserted against BW by L&N was separate from, and not derivative of, the claim asserted against L&N by WL. L&N’s claim against BW failed because L&N claimed that BW was solely liable, that “it was him, not me”. Therefore, L&N’s compliant was dismissed without prejudice because it was not derivative.

What are some major procedural advantages to join all possible Ds in a single action? (1) The right to cross-examine at depositions; (2) The right to discovery of other parties; (3) Less expensive litigating one case than litigating separate cases; (4) The Ds will probably resort to finger pointing; (4) There is a better chance of finding at least one deep pocket among the Ds

So why did P in Watergate decide not to sue all those who might be liable? Perhaps (1) P thought that there was no basis for liability because BW had fulfilled its obligations under the contract; (2) If P named BW as a D, complete diversity would be destroyed since both were citizens of the same state. (Note that normally there is no such obstacle when the original D impleads a third-party D of non-diverse citizenship. This is because 1367(b) only limits Ps, not Ds, from violating diversity under 1332 when adding additional parties. However, in this case the third-party D was hired directly by the P, and so there was no contractual relationship (and thus no derivative liability) between the original D and the third-party D for this to be a proper impleader.

Could L&N and WJE continue to assert as a defense that BW’s faulty work caused the problem? Yes, this would be a valid defense, just not a proper basis for impleader.

Why would Ds be eager to implead BW even if contribution were not possible? (1) BW could serve as an alternative sacrificial lamb; (2) However, there would also be the danger of mud-slinging amongst Ds

3. More Complex Litigation 918

Owen Equipment v. Kroger 922

P filed a diversity suit against OPPD in federal District Court for negligent operation of a power line that electrocuted her husband. OPPD then filed a third-party complaint under 14(a) against Owen, alleging that D operated the crane negligently and this was the cause of husband’s death. P amended her complaint to add the third-party D.

Can a federal court exercise supplemental jurisdiction over a P’s claims against a third-party D who is a citizen of the same state in a diversity case?

No. Rule 1332(a)(1) requires complete diversity of citizenship. Supplemental jurisdiction is not so broad as to permit a federal court in a diversity case to exercise jurisdiction over a P’s claims against a third-party D who is a citizen of the same state. To allow supplemental jurisdiction in this case would permit circumvention of this complete diversity requirement. P could simply sue those Ds of diverse citizenship and wait for them to implead non-diverse Ds, then sue the non-diverse third-party Ds.

4. Compulsory Joinder Rule 19 928

A court ought to include in a suit all of the parties who will be affected (significantly) by the outcome. The necessary party rule under 19(a) typically operates when “there is some connection of property ownership, contract rights, or obligations between those who are initially made parties and those who have not been joined.”

Arguments for compulsory joinder are most common in the following situations:

(1) Cases involving joint obligations where some joint obliges or joint obligors are absent(2) Cases involving property ownership where some persons claiming a property interest are absent(3) Cases involving representative parties where either the representative or the represented are absent(4) Cases involving claims to a limited fund or pool of assets where the potential claimants who are not parties might find the funds depleted when their cases are later heard

Rule 19(a)

Should the party be joined? A party should be joined if:

(1) in their absence complete relief cannot be granted to those already parties. (Ex: Buyer enters into a contract with H and W to buy property. The sellers refuse to convey the land and buyer sues H seeking specific performance. If W must sign deed to convey the title then she must be joined, because without her complete relief for the buyer is not possible.)

(2)(i) as a practical matter impair interest of absentee.(Ex: You sue where there is a lump sum insurance policy. Several other people were also injured with you in the accident. If you recover the lump sum there will be nothing left for the absentees in their separate actions to recover)

(2)(ii) leave person already a party subject to multiple or inconsistent obligations(Ex: You bring an action against your insurance company for the death of your wife. Another person also claims to be the surviving spouse. Suppose the insurance company pays you, and then the other “spouse” brings an action and wins. In that case the insurance company is subject to multiple obligations)

Can the party be joined? A party can be joined so long as the court has SMJ and PJ over the absent party.

If the party should be joined and can be joined, then they must be joined.

If the party cannot be joined, however, due to lack of SMJ or PJ, then go to 19(b).

Rule 19(b)

If the party cannot be joined, then the court must decide whether the action should continue or the absentee should be declared indispensable and the case dismissed.

The factors that the court considers include:

(1) extent of prejudice to parties or absentee(2) extent prejudice can be reduced (3) whether judgment will be adequate in absence of party(4) whether P can obtain relief by some other means if case dismissed

Helzberg’s Diamond Shops v. Valley West Shopping Center 930

P (Missouri) sued D (Iowa) in federal court based on diversity jurisdiction using a Missouri long-arm statute (a statute giving a state jurisdiction over a nonresident D who has had contacts with the state). P operated a full-line jewelry store in D’s shopping mall, and sought to enjoin D from breaching a lease agreement that precluded D from leasing space to anyone (Lord’s) who would operate a fourth full-line jewelry store in D’s mall. D moved to dismiss on the ground that Lord’s was not joined as an indispensable party. (P brought suit in district court in Missouri and could not obtain PJ over Lord’s (Iowa), which had no Missouri contacts.)

Lower court determined that Lord’s was a party that should be joined. Under 19(a)(2)(i), Lord’s interest could be impaired if it were not made a party, and under 19(a)(2)(ii), leave D subject to inconsistent obligations if Lord’s were later to win in state court. However, this court found that Lord’s was not an indispensable party after considering the 4 factors:

(1) Prejudice to those already parties or to absentee? There would be no prejudice to Lord’s in this case because Lord’s is not bound by this judgment. It might leave D subject to inconsistent obligations but this would be due to D signing 2 inconsistent lease agreements rather than the absence of Lord’s. However, all the parties to this lease agreement are present and thus the matter involving this lease can be fully adjudicated. Besides, Lord’s has not filed elsewhere, and even if it did, there is no showing that another court is likely to interpret the lease agreement any differently.

(2) Extent prejudice can be reduced? The lower court took protective measures by offering to allow Lord’s to intervene, but Lord’s refused.

(3) Will judgment be adequate in absence of Lord’s? Yes.

(4) Can P obtain relief by some other means if case dismissed? It is irrelevant that remedy is available in Iowa court. P could transfer to Iowa federal court or refile in Iowa state court.

Thus, lower court’s finding that Lord’s is not indispensable is affirmed

C. Intervention -- Rule 24 938

(a) Intervention of Right- must allow me to intervene if- timely application- U.S. statute allows an unconditional right; OR- interest in subject matter of the litigation- risk that the interest will be impaired- not adequately represented by existing parties

(b) Permissive Intervention- may allow me to intervene if- timely application- U.S. statute allows a conditional right; OR- common question of law or fact- court must consider if intervention will delay or prejudice those already parties

NRDC v. NRC 940 Rule 24 – Intervention of Right

NRDC sued the NRC to enjoin it from granting licenses for the operation of uranium mills without first preparing environmental impact statements. Subsequently, UNC was allowed to intervene. KM and AMC then also moved to intervene under 24(a) and (b). The district court denied their motions on the ground that UNC would adequately represent the movant’s interests.

Did the court commit error in denying intervention of right to the movants?Yes. Court considered whether the movants fulfilled the requirements of 24(a)(2):

(1) Interest? Yes. Ps argue that movants do not have the requisite interest because they are not directly involved. However, a direct interest is not necessary, but only an interest that would be impaired by the outcome. The movants have an interest in obtaining licenses to operate their uranium mills.

(2) Risk that the interest will be impaired? Yes. Ps argue that movants would not be bound by such a result if they are not participants. However, the movants argue that, even though it may not be res judicata, it would still have a stare decisis effect.

(3) Not adequately represented by existing parties? No. It is enough to show that the representation may be inadequate. The movants have shown that it is possible that since UNC has already received its license, it might be willing to agree to a compromise that requires environmental statements only from future mill operators.

HYPOS:

1. Suppose that you know of similar litigation settled with a confidentiality agreement sealing discovery. Is there any way to unseal it? Yes. Intervene for purpose of unsealing the discovery (note 3b, 946)

2. Suppose that UNC, KM and AMC did not intervene in the suit. The case just went forward with the original parties. Eventually those parties reached a settlement. The parties presented their agreement to the judge to be adopted as a consent decree. UNC, KM and AMC sue, alleging that this process is a taking. The original parties point to the consent decree. Are the 3 parties free to re-litigate those issues? Supreme Court decisions suggest that those who decline to intervene might be bound

Martin v. Wilks 948

White firefighters challenged affirmative action plans mandated by a consent decree which was entered in a prior lawsuit of which they had knowledge but had not intervened. The trial court dismissed the white firefighters’ new lawsuit, holding that because they had notice of the prior action but had elected not to intervene, the matter was res judicata as to them.

Does the white firefighters’ lawsuit constitute an impermissible collateral attack, given the fact they chose not to intervene in the earlier lawsuit?

No. The impermissible collateral attack doctrine is inconsistent with Rules 19 and 24. Rule 19 indicates that existing parties to a lawsuit bear the burden of adding new parties when necessary to adjudicate a dispute. Rule 24 indicates that potential new parties have no duty to intervene.

It is more consistent with the Rules to require those already parties to bear the responsibility of figuring out who is adversely affected, rather than placing this duty on potential new parties to intervene when they become aware of the lawsuit. Joinder as a party, rather than knowledge of a lawsuit and an opportunity to intervene, is the method by which potential parties are bound by a judgment or decree.

--------------------------------

Today, impermissible collateral attack is dead, except for Civil Rights cases involving employment discrimination. If: (1) you had actual notice; and (2) a reasonable opportunity to present your arguments; or (3) your interests are already adequately represented…then you are prohibited from collaterally attacking a consent decree in a civil rights case complaining of employment discrimination -- Note 6, 955

D. Interpleader -- Rule 22 955

Permits a person who may be subject to multiple liability by claimants with overlapping or inconsistent claims to interplead or join such claimants as defendants in a single action. The “stakeholder” will join multiple, inconsistent claims to determine the rights in the asset (“the stake”) in a single proceeding.

Issue Statutory Rule 22Diversity Minimal diversity among claimants

Stakeholder (FL) v. 19 Claimants (FL) 1 Claimant (LA)

No diversity among rival claimants

Stakeholder (FL) v. 20 Claimants (LA)

Amount $500 $75,000 +Personal Jurisdiction / Service

Nationwide Service Allowed Personal Jurisdiction Required

Venue Residence of one or more claimants Residence of any claimant (if all from 1 state); district of dispute; district of property; district where any claimant found (if no other basis for venue)

Injunctions Statutory authority for injunctions under § 2361

Only allows injunctions under § 2283 to “stay” when necessary in aid of jurisdiction

Cohen v. Republic of the Philippines 957

Cohen had in his possession 4 paintings which he had received on consignment from an agent of Marcos. Agent demanded return of the paintings. Cohen refused and filed an interpleader to determine the ownership of the paintings, naming Agent and the Philippine Government as defendants. (Cohen chose to implead them because if he sued them separately, it might lead to inconsistent results.) Marcos sought to intervene in the interpleader action to assert her claim to the paintings. (Cohen did not to implead Marcos, however, since he might not have jurisdiction over her in the U.S.) The Philippine Government objected and argued that the existing parties would be prejudiced.

Does a party have an unconditional right to intervene if the party can prove a timely application, risk of impairment of a relevant interest, and lack of adequate representation?

Yes. Consider the 4 factors of 24(a)(2):

(1) Timely Application? Yes. Marcos made her claim before the proceedings reached an advanced stage.

(2) Relevant Interest? Yes. Marcos has an interest in the paintings

(3) Risk that the Interest will be Impaired? Yes. She must be allowed to intervene as she risks losing her interest in the paintings.

(4) Lack of Adequate Representation? Yes. Marcos’ interests is not being adequately represented by either existing party

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E. Class Actions -- Rule 23 962

Allows joinder of parties where the number of parties is sufficiently large so that it is impractical or inefficient for the parties to pursue their claims individually.

A class action cannot be brought unless it is first certified by meeting the requirements of 23(a). All the requirements of 23(a) must be satisfied. After meeting all of the requirements of 23(a), the class must meet at least 1 of the requirements of 23(b) to show that it can be maintained.

(a) Prerequisites to a Class Action (all)

(1) Numerosity – class membership must be sufficiently large

(2) Commonality – members must have a common question of law or fact

(3) Typicality – representative’s claim must be typical of class as a whole

(4) Adequacy – representative must be a member of the class; have a stake in the litigation; must not be an employee of or a relative of the lawyer; must be experienced; must have adequate support and financing

(5) Ascertainability – must be able to figure out who is a member of the class and who will be bound; some courts say that it is unnecessary to ascertain in beginning who is a class member, but class must not be too amorphous

(b) Class Action Maintainable (at least 1)

(1) Unfair to Any Party – to members or to opposing party without class action

(2) Equitable Relief Sought – party opposing class has acted / refused to act in same way for the whole class

(3) Class Action is Superior – compared to individual actions (most commonly where each member has suffered only small loss – requires individual notice (c2) to class members with the opportunity to opt out

Note: if seeking monetary damages, then you cannot be certified under b2 but instead under b3. Why is certification under b3 so dreaded? The notice requirement can be expensive; the standards are tougher (common questions of law or fact must predominate

over issues of individual members; class action is superior to other forms of action; you must allow members the opportunity to “opt out”)

(f) Appeals

A district court’s decision granting or denying class certification can be appealed on an interlocutory basis. The decision to allow an appeal lies with the discretion of the court of appeals. The application for such an appeal must be made to the appellate court within 10 days after the district court granted or denied the class certification

Will allow the appeal under the following conditions:

1. Will be terminated if not granted interlocutory appeal 2. There is need for immediate resolution

Communities for Equity v. Michigan High School Athletic Assn. 968

P sought to bring a class action on behalf of girl athletes who were discriminated against in Michigan. They proposed as members of the class “all present and future female students enrolled in Michigan schools who participate, or are deterred from participating, in athletics”. This class would involve thousands of students and would-be athletes.

Does P meet the prerequisites of 23(a) for certifying a class action?

Yes. First, consider the 5 prerequisites for certification:

(1) Numerosity – Yes. Thousands of female athletes are involved, which means this is too numerous to make joinder practical

(2) Commonality – Yes. The common question is whether MHSAA discriminated against female athletes

(3) Typicality – Yes. Community for Equality is an organization representing a broad group of those discriminated against

(4) Adequacy – Yes. P is a skillful and highly motivated organization. The fact that some female athletes might be happy with the current program does not undercut adequate representation, because the class is limited to those adversely affected

(5) Ascertainability – Yes. Proposed as members “all present and future female athletes…”

Next, consider the 3 possible requirements for maintaining the class action:

(1) Unfair

(2) Equitable Relief – Yes. Injunctive relief is sought

(3) Class Action Superior

Note: A valid defense to Title 9 is inadequate resources. That is, there may not be enough money for all the female sports requested. Any solution to this adequacy problem? Allow subclasses (c4)

Note: An important consequence of certifying a class: an adequately represented class is bound by a judgment or settlement (Ex: thus “all present and future female athletes” are bound and future female athletes thus could not challenge a judgment)

Heaven v. Trust Along with meeting the requirements of subsection (a) of Rule 23, a class action being certified under (b)(3) must meet the additional requirements of certification, one of which is that the class action must be superior method of resolving the dispute under (A)-(D) of 23(b).

Superiority is not satisfied here because the class members will have to provide individual responses to D’s counterclaim which will make management of the class action difficult under Rule 23(b)(D)

Hansberry v. Lee

There must be adequate representation of the members of a class action or the judgment is not binding on the parties not adequately represented

Court found that one is not bound by a judgment in personam in litigation where he is not made a party

An exception to this rule is in the class action where members of the class (who are parties) may bind members (who are not parties)

Constitutional due process requires that exception apply only when members of the class (present) are entitled to stand for those who are not when they can adequately represent the (non-party) interests or when both interests are joint

Cannot be said that Ps in earlier action adequately represented the interest of D in this action because each have opposing interests

A stranger is not bound to an actionThose who are not adequately represented are not bound by a class actionOnly when the class representative adequately represents a class are class members bound by that judgmentOnly those adequately represented are bound – what does this mean?If you didn’t appear and were not adequately represented, then you can collaterally attack

If you exercise your option to opt out of a class action, you cannot then take advantage of a favorable judgment later by using issue preclusion, since only those who are parties to an action are bound by that judgment

If you are unfairly represented, you can collaterally attack it (similar to how this operates when you can collaterally attack when there was no personal jurisdiction over you in the previous suit)

Phillips Petroleum v. Shutts

Shutts and others brought a class action in Kansas state court against Phillips seeking interest payments on suspended royalty payments

Each class member was given notice of the action by mail

Notice said members would be included in the class and bound by the judgment unless they opted out by returning a request for exclusion form

Fewer than 1000 of the 28000 members resided in Kansas

Trial court applied Kansas law and found Phillips liable

Phillips appealed, claiming that Kansas lacked jurisdiction over the absent members, and that the trial court should have considered the laws of each state to determine where interest was due

The forum state can exercise jurisdiction over absent class members under certain circumstances:

To bind an absent plaintiff, the forum must provide minimal procedural due process protection. This includes the best notice possible to plaintiffs, plus the opportunity to be heard and participate in the suit. The P must have the opportunity to opt out. P also had argued that must have the opportunity to opt in. The court found, however, that the opportunity to opt out, etc. was sufficient

Does this mean that only b3 is constitutional?(Only b3 requires you give notice and opportunity to opt out)

What is reasonable notice under the circumstances?The majority of federal courts see that only when you are seeking money damages does the notice standard apply under b3 (b2 and b3 do not require notice or the giving of opportunity to opt out)

For the purposes of fulfilling the amount of controversy requirements for complete diversity, courts are split on whether one can aggregate the claims of all class members for the purposes of satisfying the amount in controversy

Ways to Calculate Attorneys Fees: (whatever is reasonable)- percentage method- lode star method- put the case out to bid (to see who will charge the lowest amount)

Fluid Class Recovery: Allow price breaks for future customers (federal courts don’t do)

Who should pay for the notice given of the settlement? Rule 23 does not state

Amchem Products v. Windsor

Rule 23 requirements for class certification must be met even if the certification is for settlement only

At the heart of the dispute was concern over settlement allocation decisionsThe settlement prevented present and future claims against Ds Counsel was also trying to represent both groups of PsThe USSC found this dual representation to be troubling because:The present Ps had a clear interest in a settlement that maximized current fundsAnd the future Ps had a strong interest in preserving funds for their future needsSettlement does not make the standards of Rule 23, thus certification cannot be madeAll of the requirements of Rule 23 must be metCommon questions must predominate over the individualCannot pool together inventory and exposure claims togetherThese claims are too differentLack of adequate representation