Green

Civil Procedures

Spring 2014

Table of Contents

Notice .....................................................................................................................................7

• Notice is reasonable when: The means is one that is reasonably expected to inform those affected and where the conditions do not reasonably permit such notice, the form that is chosen must not be substantially less likely to bring home notice than other of the feasible and customary substitutes. 7

Service of Process....................................................................................................................8Summons .......................................................................................................................................................................................8Service of a summons............................................................................................................................................................... 9Waiving Service...........................................................................................................................................................................9Fraud............................................................................................................................................................................................. 10Due Process, notice and the opportunity to be heard (Replvins and Judgments before notice)..........10

When may notice be waived............................................................................................................................................... 11Prejudgment rulings are not enforced when ............................................................................................................. 11Prejudgment rulings may be enforced when ............................................................................................................. 11Factors to consider when determining of prejudgment ruling should be enforced(Doehr 3 part Test borrowed from Mathews)................................................................................................................................................... 12

Jurisdiction............................................................................................................................12Personal Jurisdiction.............................................................................................................................................................. 12

Implied Consent(Hess v. Pawloski).................................................................................................................................. 13Minimum Contacts Test( International Shoe)............................................................................................................ 13There may sufficient contact for general jurisdiction over all matters or sufficient contact for spe-cific jurisdiction over matters related to the activity in the forum state. ......................................................13Long Arm Statutes (Gray v. American Radiator)...................................................................................................... 13What are Sufficient minimum contacts(McGee- Balancing Test)......................................................................13Functions of the International Shoe (World-Wide Volkswagen Corp)............................................................14Foreseeability test for establishing minimum Contacts (World-Wide Volkswagen Corp)......................14Who needs to have sufficient minimum contacts( Keeton) .................................................................................14Balancing Test to determine if jurisdiction is proper(Burger King Corp).....................................................14Stream of Commerce test for establishing minimum contacts. (Asahi)..........................................................15Territorial Limits of Effective Service(Rule 4 k)........................................................................................................ 15Stream of Commerce rule vs. rule exercise of judicial power. (J. McIntyre Machinery)...........................15

General Jurisdiction................................................................................................................................................................ 16General Jurisdiction v. Specific Jurisdiction (Goodyear) .......................................................................................16

Subject Matter Jurisdiction..................................................................................................................................................16U.S. Constitution Article III.................................................................................................................................................. 16Diversity of Citizenship (28 U.S.C S 1332).................................................................................................................... 17Exceptions to Diversity of Citizenship............................................................................................................................ 17Rational for Diversity of Citizenship............................................................................................................................... 17Federal Question (28 U.S.C. S 1331)................................................................................................................................ 18Supplemental Jurisdiction. When may a Federal Court Decline to hear a claim. (28 U.S.C. § 1367). .18Residence and Diversity of Citizenship(Mas v. Perry).............................................................................................18

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Who is a real Party (Rose v. Giamatti)........................................................................................................................... 19Defendants Answer and Subject Matter Jurisdiction (Mottley)..........................................................................19Gibbs Test for Subject Matter Jurisdiction................................................................................................................... 19Removal....................................................................................................................................................................................... 1928 U.S.C. § 1441(a)-(c) Actions Removable Generally.............................................................................................1928 U.S.C. § 1447 Procedure after removal generally ..............................................................................................20Can a Federal Court remand state law claims that arise from the same common nucleus of opera-tive fact? (Executive Software)......................................................................................................................................... 20Removal Jurisdiction.............................................................................................................................................................. 21Why is there Removal?.......................................................................................................................................................... 21

Venue and Forum Non Conveniens........................................................................................2128 U.S. Code § 1391 - Venue generally........................................................................................................................... 211391(b) Where to bring a Civil action .......................................................................................................................... 211391 (c) Residency for purposes of Venue.................................................................................................................... 221404 Change of Venue ......................................................................................................................................................... 221406 Cure of defects in Venue............................................................................................................................................ 22Any County Rule (Burlington)........................................................................................................................................... 22Substantial part of the action(1391 b 1) (Bates v. C & S Adjusters)................................................................23Where it could have been brought (1404 (a))............................................................................................................ 23What is Forum non Conveniens (Gulf Oil).................................................................................................................... 23Determining Forum non Conveniens (Gulf Oil)......................................................................................................... 23Personal Jurisdiction v. Subject Matter Jurisdiction ...............................................................................................24Dismissing for Forum Non Conveniens (Piper Aircraft).........................................................................................24

Swift v. Erie, State Law vs. Federal Law in Federal Court......................................................................................25The Rules Enabling Act and Seventh Amendment....................................................................................................25Swift Rule vs. Erie Rule......................................................................................................................................................... 25State Law v. Federal Law (Statutes of Limitations and Outcome determinative Test ) (Gaurenty Trust)............................................................................................................................................................................................ 26When to use the outcome determinative test (Byrd)...............................................................................................26Outcome determinative test vs. Erie Doctrine(Hanna)..........................................................................................27

Preclusion.............................................................................................................................27Principles of claim Preclusion ...........................................................................................................................................27Claim Preclusion ..................................................................................................................................................................... 27

Why Claim Preclusion? (Rush).......................................................................................................................................... 27Claim Preclusion ..................................................................................................................................................................... 28Is it the same claim................................................................................................................................................................. 28Splitting claims(Jones).......................................................................................................................................................... 29Parties in Privity...................................................................................................................................................................... 29Starre Decisis v. Preclusion................................................................................................................................................. 29Exceptions to Claim Preclusion......................................................................................................................................... 29

Issue Preclusion........................................................................................................................................................................30What is Issue Preclusion?.................................................................................................................................................... 30Elements of issue preclusion (Bernhard)...................................................................................................................... 30Dismissals (41 a 1 and 41 a 2)........................................................................................................................................... 30Was the Issue previously litigated? ................................................................................................................................ 31Is it final Judgment on the Merits?................................................................................................................................... 31Affirmative action/ Consent Decree (Martin v. Wilks)...........................................................................................31

Full Faith and Credit / Claim Preclusion in Federal Court....................................................................................32U.S. Const. Article IV, Section 1:......................................................................................................................................... 32

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28 U.S. Code § 1738................................................................................................................................................................ 32Judgment of States in Federal Court(Claim Preclusion)........................................................................................32Full Faith and credit (Final Judgment on the Merits) (Dupasseur v. Semtek)..............................................33Who can assert Issue Preclusion(Bernhard)............................................................................................................... 33

There is no requirement that the party asserting the plea of res judicata must have been a party, or in privity with a party, to an earlier litigation so long as the party against whom res judicata was asserted was a party in privity to a party in that litigation. 33

Reasons for Issue Preclusion(Blunder-tongue).......................................................................................................... 33When can’t issue preclusion be assered(Blunder-tongue)....................................................................................34How to determine if an issue is Precludued(Blunder-Tongue)...........................................................................34Offensive Use of Issue Preclusion(Parklane Hosiery co. ).......................................................................................34Offensive vs. Defensive use of Issue Preclusion(Parklane).....................................................................................35Arguments against Offensive use of Issue Preclusion(Parklane).......................................................................35

Pleadings...............................................................................................................................35Rules of Pleadings....................................................................................................................................................................35

General........................................................................................................................................................................................ 35Rule 8. Form of Pleadings: .................................................................................................................................................. 35Rule 12. Defenses and Objections: When and How Presented; Motion for Judgment on the Pleadings; Consolidating Motions; Waiving Defenses; Pretrial Hearing...............................................................................38Rule 7. Pleadings Allowed; Form of Motions and Other Papers..........................................................................40Rule 10. Form of Pleadings................................................................................................................................................. 40

Rule 5. Serving and Filing Pleadings and Other Papers..........................................................................................41

(a) Service: When Required. 41(1) In General. Unless these rules provide otherwise, each of the following papers must be served on every party: 41

(A) an order stating that service is required; 41

(B) a pleading filed after the original complaint, unless the court orders other-wise under Rule 5(c) because there are numerous defendants; 41

(C) a discovery paper required to be served on a party, unless the court orders oth-erwise; 41(D) a written motion, except one that may be heard ex parte; and 41(E) a written notice, appearance, demand, or offer of judgment, or any similar pa-per. 41

Complaints.................................................................................................................................................................................. 41What should a complaint contain?.................................................................................................................................. 41

The complaint must provide the Defendant with notice to show the legal duty and violation thereof. Gillispie 41

Standard for evaluating a complaint............................................................................................................................. 41Evaluating the Sufficiency of a Complaint................................................................................................................... 42

Statement of facts v. Conclusions of Law.......................................................................................................................42Complaints and Answers......................................................................................................................................................42

Fraud, mistake and Special Damages ........................................................................................................................... 42Rule 15. Amended and Supplemental Pleadings....................................................................................................... 42Fraud in Pleadings.................................................................................................................................................................. 43Claiming Relief in Pleadings (Standard) (Swierkiewicz).......................................................................................44Motions to dismiss for failure to state a claim(American Nurses)....................................................................44

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Denials..................................................................................................................................45Improper Form of Denials................................................................................................................................................... 45

Denial for lack of information........................................................................................................................................... 45Negative Pregnant Denial................................................................................................................................................... 45

Affirmative Defenses..............................................................................................................................................................45Asserting Affirmative Defenses......................................................................................................................................... 45Determining if a defense is affirmative(Ingram)...................................................................................................... 46Is it an affirmative defense.................................................................................................................................................. 46Mistakes...................................................................................................................................................................................... 46

Adding Claims........................................................................................................................47Rule 11. Signing Pleadings, Motions, and Other Papers; Representations to the Court; Sanctions....47Consolidation ............................................................................................................................................................................48Joiner of claims Rule 18(a)..................................................................................................................................................48

A party asserting a claim, counterclaim, crossclaim, or third-party claim may join, as indepen-dent or alternative claims, as many claims as it has against an opposing party. 48Joiner Rule 20............................................................................................................................................................................ 48

Imposing Sanctions(Hadges)............................................................................................................................................. 49

Joiner....................................................................................................................................50Addition of Claims .................................................................................................................................................................. 50

Counterclaims ......................................................................................................................................................................... 50Compulsory v. permissive claims.....................................................................................................................................50

Triggering Compulsory Joiner(Heyward-Robinson Co.)........................................................................................50Exceptions to Compulsory Joiner...................................................................................................................................... 51

Cross-Claims.............................................................................................................................................................................. 51When are cross-claims permitted(Lasa)....................................................................................................................... 51

Permissive Joiner.....................................................................................................................................................................51Rule 14 ........................................................................................................................................................................................ 51Required Joiner Rule 19........................................................................................................................................................ 52Rule 21. Misjoinder and Nonjoinder of Parties.......................................................................................................... 54Who must be joined? (Bank of California)................................................................................................................... 54Should a case be dismissed for failure to join(Provident Bank).........................................................................54

Impleader..............................................................................................................................54Should Leave be given to add an impleader................................................................................................................ 55

Notice

Alerting the parties to the procedings. • Mullane notice must be the type that is reasonably calculated to succeed

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• Notice is reasonable when: The means is one that is reasonably ex-pected to inform those affected and where the conditions do not rea-sonably permit such notice, the form that is chosen must not be sub-stantially less likely to bring home notice than other of the feasible and customary substitutes.

• Exceptionso Where the state seizes property that can be assumed abandonedo Where the parties whereabouts are unknown and would require unreason-

able steps to ascertain.

Notice that does not satisfy Mullane Due Process:• Constructive notice(publication) if the defendant;s name and address are known are

available from public record• State condemnation proceedings• State condemnations where publication is coupled with signs posted on trees. • Publication and posting in a proceeding to sell mortgaged property for nonpayment

of taxes. Personal service or mailed service is required even when he mortgagee may have know or should have known of the delinquency in payment or a sophisti-cated creditor had the means to discover that the taxes had not been paid. Mennon-ite board of missions v. Adams

• If the identity of a part is known or reasonably ascertained due process requires that a creditor be given notice by mail or such other means to ensure actual notice. Tulasa Professional Collection Services v. Pope

• Eviction notices posted on doors in public housing. Green v. Lindsey.o May be removed by children and other tenants before they could have their

intended purpose.

Notice that satisfies Mullane • certified mail to the facility where the party is held. Dusenbery v. U.S. (party was

housed in prison facilty which is where the FBI sent him notice via certified mail)

When are other steps needed to satisfy the notice• When a letter sent by certified mail is returned as unclaimed the party is required to

take additional steps to ensure that there is sufficient notice. Jones v. Flowers• However where the letter is returned and the taxpayer has not yet suffered any

property loss additional steps are not needed. Pagonis v. United States.• Where the party is adjudged insane, and committed to hospital and has no guardian

notice by mail is not sufficient. Covey v. Town of Somers

Waiver of Notice• A party may waive receiving notice in advance of litigation or after litigation has

commenced. • Must be assessed on Case by Case basis with regard to factors such as consideration

and inequality in bargaining power.

Notice to Military Personnel

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Servicemembers Civil Relief Act• Postpones or suspends proceedings that may lead to eviction, motgage foreclosure,

the entry of a default judgment or sale of stored goods to pay for storage liens• If a servicemember fails to appear the court is obligated to determine if the absent

party is in the military before adverse action can be taken• If the serviceman is in the military, the court must appoint the sevicemember an at-

torney• Self help creditor remedies are barred.

Service of Process

Service of process refers to notice of the commencement of action.

Service usually consists of a summons, service is generally achieved by personal service.

Summons

What summons should contain. Rule 4 (A)• Must name court and parties• Directed at defendant• Plaintiff’s attorney information• Time when defendant must appear• Let defendant know that failure to response results in default judgment• Must be signed and bear the clerk’s signature.

A summons or a copy of summons addressed to multiple defendants must be issued for each defendant.

Service of a summons

A summons must be served with a copy of the complaint, the plaintiff is responsible for en-suring the service is made with the time prescribed in 4(m) and must furnish the necessary copies to the person who makes service. 4(c) (1)

Who should serve a summons: Any person who is at least 18 years old and is not a party to the summons and the complaint. 4(C) (2) or alternatively at the plaintiff’s request the court may order that service is made by a U.S. marshal or any other person specially au-rthorised. 4(c)(3)

Waiving Service

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Requesting a waiver of service

Rule 4(d) (1) A defendant that is subject to service under 4(e), (f) or (h) has a duty to avoid the expenses of serving the summons. A plaintiff may notify the defendant that an action has been commenced and request the defendant waive service provided the notice and re-quest:

• Is in writing and addressed to the defendant or his agents• The name of the court• Be accompanied by a copy of the complaint, two copies of the waiver form and pre-

paid means for returning the forms• Inform the defendant of the consequences of not waiving service• State the date the request was sent• Give the defendant a reasonable time to respond and be sent by first class mail or

any other reliable means

Failure to Waive Service

Rule 4(d)(2) if a defendant in the U.S. fails to waive without good cause, the court must im-pose upon him the expenses incurred from making service and the reasonable expense of any motion required to collect those service expenses.

Time to answer a waiver

A defendant who before being served with process returns a waiver need not answer a complaint until 60 days(90 day for none U.S. plaintiff’s) after the request was sent. Rule 4(d)(3)

Results of filing a waiver

Having filed a waiver, proof of service us not required and the rules apply as if a summons and complaint had been served at the time of filing the waiver. Rule 4(d)(4)

Jurisdiction and venue not waived

Waiving of service does not waive and objection to personal jurisdiction or venue.

Serving an Individual in the U.S.A

Rule (4) (e) Any individual with the exceptions of minors, incompetent persons or a person who has waived service, a person may be served by:

• Following state law OR • By doing one of the following

o Delivering a copy of the summons and complaint to the individual personallyo Leaving a copy at the defendant’s dwelling or usual place of abode with some

of reasonable age and discretion that lives thereo Delivering a copy to an agent authorized by appointment or by law.

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Time Limit for Service

Rule 4(m) the court must dismiss a complaint without prejudice if a defendant is not served within 120 days after the complaint is served. If a plaintiff can show good cause then the court must extend the time for service to a reasonable one.

Fraud

Where a defendant is induced to enter a jurisdiction under fraud, there is no jurisdiction and he is not required to proceed against the judgment. A judgment entered in that sate is not enforceable.

Due Process, notice and the opportunity to be heard (Replvins and Judgments before notice)

Due Process

Due process requires that the “notice” and “hearing” establish at the very least the proba-ble validity of the underlying claim before the alleged debtor is deprived of his property or it’s unrestricted use. Sniadach

Right to be Heard

Constitutional right to be heard is a basic aspects of fair process. An after the fact hearing does not undo the arbitray taking of property. Fuentes.

Measures to dissuade creditors from filing a bad suit may fail because his private interest is at stake and his confidence in is claim may be unfounded. Fuentes.

When may notice be waived

Prejudgment rulings are not enforced when

• No state official participates in the decision to seek the writ, review the claim or evaluate the need for the immediate seizure. Or the plaintiff fails to provide informa-tion to the court in these matters. Fuentes

• Fails to provide the defendant with “early” hearing or safe guard against mistaken repossession. Di-chem

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Prejudgment rulings may be enforced when

• When the vendor has an interest in preventing waste of property. Mitchel• There is judicial authorization of the writ. Mitchel• When there is immediate availability of post seizure hearing. Mitchel• Owner’s interest may be forfeited when the property being seized is used in an ille-

gal manner even without the owner’s knowledge. Bennis v. Michigan• When the government’s interest is public safety outweighs the owner’s private in-

terest. Patterson v. Cronin. Fuentes

• Seizure is necessary to secure a necessary government or general public interest. • There has been a special need for a very prompt action• Government official is responsible in determining under a narrowly drawn statute

that is necessary and justified. E.g. IRS, war effort, protect the public from mis-branded drugs and contaminated food.

Factors to consider when determining of prejudgment ruling should be enforced(Doehr 3 part Test borrowed from Mathews)

1. Doehr examined the following considerations of private interests (Defendant’s) that will be affected prejudgment measure• Attachment clouds title• Impairs ability to sell• Alienates property• Taints credit ratings• Reduces the chances of obtaining a home equity loan or additional mortgage • Place existing mortgage in technical default

2. Examination of the risk of error and the probable value of additional or alternative safe guards.

a. If a plaintiff has no interest the defendant’s property and the likelihood of re-covery does not involve uncomplicated matters and the plaintiff is not re-quired to put up bond then the risks outweigh the safeguards. Doehr

b. Where a defendant has strong private interests in property (written docu-ments and incorporation of labor and materials) the likelihood of erroneous deprivation is not high and due process rights are not violated. Shaumnyam v. O’neil

3. Examination of the party seeking the prejudgment remedy with due regard to any ancillary interests of the state. Doehr.

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Jurisdiction

Types of Proceedings:1. In personam: the court exercises it power to render a judgment for or against a per-

son by virtue of his presensce in the state’s territory or his citizenship there2. In rem: the court renders a judgment for or against a person but recovery is limited

to the value of the property within the jurisdiction and determination is binding with respects to all possible interest holders in that property.

3. Quasi in rem: the court renders a judgment for or against a person but recovery is to limited to value property that is within the jurisdiction and thus subject to the court’s authority.

Personal Jurisdiction

A court may exercise personal jurisdiction over a nonresident so long as there exists mini-mum contacts between the state and defendant.

Implied Consent(Hess v. Pawloski)

Generally a court cannot reach into another state and summon a party domiciled there to respond to the proceedings against him.

Implied consent can be used to establish jurisdiction over the defendant, if the statute aims to put out-of-state drivers on the same level as resident drivers and did not discriminate against them (Hess v. Pawloski)

Minimum Contacts Test( International Shoe)

If a defendant has had sufficient minimum contacts with the forum state it enables a court in that state to exert personal jurisdiction over a party consistent with the Due Process clause.

A casual presence of a corporation or its agent in a state in single or isolated incidents is not enough to establish jurisdiction. Acts of agents of the corporation, because of the na-ture, quality, and circumstances of their commission, may be deemed sufficient.

Consent may be implied from the corporation’s presence and activities in the state through the acts of authorized agents.

The defendant must have received the benefits and protection of the laws of the state and has conducted “systematic and continuous” business operations in the forum state.

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There may sufficient contact for general jurisdiction over all matters or sufficient contact for specific jurisdiction over matters related to the activity in the forum state.

Long Arm Statutes (Gray v. American Radiator)

If the foreign corporation elected to sell its product for ultimate use in that state it thus had sufficient minimum contacts in that state for the trial court to exercise jurisdiction over it without violating due process.

A fact specific analysis is required to determine if the activity conducted within the state is adequate to satisfy the jurisdictional requirement.

The relevant inquiry is whether defendant engaged in some act or conduct by which he may be said to have invoked the benefits and protections of the law of the forum.

What are Sufficient minimum contacts(McGee- Balancing Test)

The Supreme Court, in considering fact the contract was delivered in California, the premi-ums were mailed from there and the insured was a resident of California when he died, combined with the recognition that modern transportation and communication have made it much less burdensome for a party sued to defend themselves in a state where they con-duct business, found that it did not violate just and fair play for the California court to enter a binding agreement on International Life. Moreover, the Court reasoned that California residents would be at a severe disadvantage if they had to leave their own state to obtain payment from their insurance company.

Functions of the International Shoe (World-Wide Volkswagen Corp)

The two goals of International Shoe Co. v. Washington, are to avoid unfair inconveniences for the defendant and to maintain the system of co-equal sovereignty among the states.

Foreseeability test for establishing minimum Contacts (World-Wide Volkswagen Corp)

The defendant must purposely avail himself of the laws of the forum state in order for to satisfy the minimum contacts test.

The foreseeability inquiry asks not whether the manufacturer or distributor can foresee his product ending up in a particular state, but whether he can foresee being hailed into court there.

Where such as in Gray, the company delivered its product to another state with the expec-tation that consumers in that forum state would purchase it there is foreseeability however

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where there is a unilateral activity completely out of the control of Defendants there is no foreseeability nor sufficient minimum contacts.

Who needs to have sufficient minimum contacts( Keeton)

The court should focus on the relationship among the defendant, the forum, and the litiga-tion.

Plaintiff did not need to have minimum contacts with the forum state in order for that state to have asserted personal jurisdiction over Defendant.

The forum state may have sufficient interest in adjudicating the dispute if the defendant has sufficient contacts with the forum state.

Balancing Test to determine if jurisdiction is proper(Burger King Corp)

Jurisdiction is proper when the defendant’s contact proximately results from actions by the defendant such that they create a substantial connection with the forum state.

The question of fairness requires a balancing of: the forum’s interest in the litigation, the plaintiff’s interest in efficient and convenient relief, the demands of the federal system as a whole, the best interests of the federal system, and the defendant’s interest in not having to defend a suit in a remote or disadvantageous forum.

Where are minimal, if they are purposeful they allow the state to exercise personal jurisdic-tion.

Stream of Commerce test for establishing minimum contacts. (Asahi)

The mere awareness that a product may reach a remote jurisdiction when put in the stream of commerce is not sufficient to satisfy the requirement for minimum contacts un-der the Due Process Clause.

There be some act by a party which would purposefully avail itself of the privilege of con-ducting activities within the forum state.

If the defendant placed it’s products in the stream of commerce that is if it advertised or marketed its products in the forum state or deliberately designed them to conform to unique forum state regulations then it actions could constitute sufficient minimum contacts

Even if minimum contacts were to be found, traditional notions of fair play and substantial justice must be examined. (e.g. facts it would be fundamentally unfair to require Asahi Metal to defend after California’s interest in the suit has been terminated.)

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Territorial Limits of Effective Service(Rule 4 k)

Serving a summons or filing a waiver of service establishes personal jurisdciction over a defendant.

a. Who is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located

b. Who is joined under rule 14 or 19, within a judicial district in the U.S. not more than 100 miles from where the summons was issued

c. When authorized by a federal statute.

(4K 2) If claim arises under federal law, serving a summons or waiver establishes personal jurisdiction over a defendant if

a. the defendant is not subject to jurisdiction in any other state’s couts of general jurisdiction and

b. exercising jurisdiction is consistent with the U.S. Const. and laws

Stream of Commerce rule vs. rule exercise of judicial power. (J. McIntyre Machinery)

The stream-of-commerce rule in products liability cases does not mean that the rule re-garding the exercise of judicial power to be unlawful unless the defendant has chosen on purpose to base his activities in the forum state, in order to avail of the state’s benefits and protection, is to be ignored.

Where the defendant knew or should have known under existing circumstances that the possibility existed of its products being sold in forum state, (products were distributed through a system extending throughout the country) defendant is under the jurisdiction of the state.

Unless the individual or jurisdiction expressly agrees to be under the state’s authority, or is a citizen of that state or has a residence there, or has a presence in that state at the time the suit is filed, or is incorporated in that state, there is no indication of any intention to be sub-ject to the laws of that state.

General Jurisdiction

A state has general personal jurisdiction over a foreign subsidiary of a U.S. corporation if there are systematic and persistent business contacts between the state and the subsidiary. (Goodyear)

General Jurisdiction v. Specific Jurisdiction (Goodyear)

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A state has no general personal jurisdiction over a foreign subsidiary of a U.S. corporation if the subsidiary has no ongoing or organized business relationship with the state.

General personal jurisdiction is due to a defendant being under the state’s laws as a re-sult of continuous and systematic business relations with the state. The state therefore can exercise personal jurisdiction over the defendant for any legal claim, even if the claim should not be related to the subsidiary’s activities in the state.

Specific personal jurisdiction is due to an existing connection between the state and the claim, and the state has jurisdiction only in that area.

Subject Matter Jurisdiction

U.S. Constitution Article III

Sect. 1 The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish.

Sect. 2 The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, un-der their Authority;

• to all Cases affecting Ambassadors• other public Ministers and Consuls • to all Cases of admiralty and maritime Jurisdiction • to Controversies to which the United States shall be a Party • to Controversies between two or more States• between a State and Citizens of another State; between Citizens of different States• between Citizens of the same State claiming Lands under Grants of different States• and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.

In all Cases affecting Ambassadors, other public Ministers and Consuls, and those in which a State shall be Party, the supreme Court shall have original Jurisdiction. In all the other Cases before mentioned, the supreme Court shall have appellate Jurisdiction, both as to Law and Fact, with such Exceptions, and under such Regulations as the Congress shall make.

Diversity of Citizenship (28 U.S.C S 1332)

The district court have original jurisdiction of all civil actions where the matter in the con-troversy exceeds $75, 000 and is between

a. citizens of different statesb. citizens of a state and citizens of a foreign statec. citizens of different states where citizens or subjects of a foreign state are addi-

tional parties and

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d. a foreign state as the plaintiff and the citizens of a state or different states.

1332 and 1441 establish that a corporation is deemed a citizen of any state by which it has been incorporated and of the state where it has its principal place of business.

Exceptions to Diversity of Citizenship

There is no diversity of citizenship when any plaintiff is a citizen of the same state of any defendant, no matter how many parties are involve in the litigation. Strawbridge v. Curtiss However, the three jurisdictional reforms allow for diversity even where Strawbridge is not met.

Rational for Diversity of Citizenship

The most popular view is to avoid discrimination against out of state residents in state court. Bank of United States v. Deveaux

The historical view is to provide a federal forum that would help to create a secure finan-cial environment, especially in the southern and western portions of the country.

Federal Question (28 U.S.C. S 1331)

The district courts shall have original jurisdiction of all civil actions arising under the Con-stitution, laws, or treaties of the United States.

Supplemental Jurisdiction. When may a Federal Court Decline to hear a claim. (28 U.S.C. § 1367)

a) In any civil action of which the district courts have original jurisdiction, thedistrict courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution, including claims that in-volve the joinder or intervention of additional parties.

• Section C: The district courts may decline to exercise supplemental jurisdiction ifo the claim raises a novel or complex issue of State lawo the claim substantially predominates over the claim or claims over which the

district court has original jurisdictiono the district court has dismissed all claims over which it has original jurisdic-

tiono in exceptional circumstances, there are other compelling reasons for declin-

ing jurisdiction

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d) The period of limitations for any claim asserted under subsection (a), and for any other claim in the same action that is voluntarily dismissed at the same time as or after the dis-missal of the claim under subsection (a), shall be tolled while the claim is pending and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period.

Residence and Diversity of Citizenship(Mas v. Perry)

Domicile requires two things: taking up residence in a different domicile with the intention to remain there. A person remains a domicile of one place until that person has adopted a new domicile through physical presence and intent to remain.

Domicile is determined as a matter of federal law, not state law. The state of a person’s res-idence is not necessarily the state of domicile for purposes of establishing diversity juris-diction.

28 USC 1332(a)(4) does not apply to aliens who are not permanent residents of the United States, regardless of their place of domicile.

For diversity purposes a woman’s domicile does not change solely by marrying an alien.

Who is a real Party (Rose v. Giamatti)

A real party in interest defendant is one who, by the substantive law, has the duty sought to be enforced or enjoined.

A formal or nominal party is one who, in a genuine legal sense, has no interest in the result of the suit.

Defendants Answer and Subject Matter Jurisdiction (Mottley)

Mere allegation that a defendant will raise a federal question in his answer is not sufficient to create jurisdiction.

Subject matter jurisdiction does not exist where there is merely the anticipation of the rais-ing of a federal question in a reply. It is not sufficient that the complaint mentions some an-ticipated defense and asserts that the validity of the defense is governed by federal law.

Gibbs Test for Subject Matter JurisdictionIn determining whether pendent jurisdiction is appropriate, the court should consider judi-cial economy, convenience, and fairness to the litigants.

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The federal court has discretion to exercise pendent jurisdiction over the state claim based upon state law

1. if the state-created claim and the federal claim derive from a common nucleus of op-erative fact, and

2. are such that a plaintiff would ordinarily be expected to try them all in one judicial proceeding.

In cases where a plaintiff has both federal and state claims against the defendant, although there may be no diversity jurisdiction, the federal court has discretion to exercise pendent jurisdiction over the state claim based upon state law if the state-created claim and the fed-eral claim derive from a common nucleus of operative fact, and are such that a plaintiff would ordinarily be expected to try them all in one judicial proceeding.

Removal

28 U.S.C. § 1441(a)-(c) Actions Removable Generally

(a) Any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district

(b) Removal Based on Diversity : (1) In determining whether a civil action is removable on the basis of the jurisdiction …the citizenship of defendants sued under fictitious names shall be disre-garded and

(2) A civil action otherwise removable solely on the basis of the jurisdiction …may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought. (Strawbridge Rule)

(c) Joiner of Federal Claims and State Law Claims

(1) If a civil action includes (A) a claim arising under the Constitution, laws, or treaties of the United…, and (B) a claim not within the original or supplemental jurisdiction of the dis-trict court or a claim that has been made nonremovable by statute, the entire action may be re-moved if the action would be removable without the inclusion of the claim described in subpara-graph (B).

(2) Upon removal of an action …the district court shall sever from the action all claims described in paragraph (1)(B) and shall remand the severed claims to the State court from which the action was removed. Only defendants against whom a claim described in paragraph (1)(A) has been as-serted are required to join in or consent to the removal under paragraph (1).

28 U.S.C. § 1447 Procedure after removal generally

• The district court may issue all necessary orders and process to bring before it all proper parties whether served by process issued by the state court or otherwise

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• The removing party may be required to file with the clerk copies of all records and pro-ceedings in such State Court or may cause the same to be brought before it by writ of cer-tiorari

• A motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of re-moval. If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.

• An order remanding a case to the State court from which it was removed is not re-viewable on appeal or otherwise, except that an order remanding a case to the State court from which it was removed pursuant to section 1442 or 1443 of this title shall be reviewable by appeal or otherwise.

• If after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the State court.

Can a Federal Court remand state law claims that arise from the same common nucleus of op-erative fact? (Executive Software)

1. 28 U.S.C. Section: 1367(c), Congress has delineated specific circumstances in which a federal court can decline to exercise jurisdiction over state law claims.

2. Under Section (c)(1)-(3), the District Court can use these exceptions so long as it agrees with the policies of “economy, convenience, fairness and comity.”

3. Under Section (c)(4), the District Court must use these exceptions only in excep-tional circumstances and must articulate what the compelling reasons for declining jurisdiction are.

4. A District Court can decline to exercise supplemental jurisdiction over state law claims that arise from the common nucleus of operative fact of the federal law claims, however there must be articulated reasons that are mentioned in the statute in order to remand to state court.

5. Under Section (c)(4), the District Court must use these exceptions only in excep-tional circumstances and must articulate what the compelling reasons for declining jurisdiction are. (Shamrock Oil)

Removal Jurisdiction1. Procedure that allows a suit filed in state court to be transferred to federal court2. Only the defendant has the right to do so3. A plaintiff who has submitted himself to a courts jurisdiction can not remove it’s

claim because the defendant interjects a federal counter claim.(Shamrock Oil)4. The federal court must have been able to have original jurisdiction over the case had

it been filed in the federal court.

Why is there Removal?

1. Ensures defendants and plaintiffs get a voice in determining what cases federal courts hear

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2. Protects out of state defendants from the threat of local bias

Venue and Forum Non Conveniens

Having established Jurisdiction a lawyer must decide on venue i.e. the place of trial. This is dependent on statute, constitutional provision or rule of court.

28 U.S. Code § 1391 - Venue generally

1391 applies to the venue of all CIVIL actions brought in DISTRICT courts of the U.S. and the proper venue is determined without regard to whether the action is local or transitory. 1391 (a)

1391(b) Where to bring a Civil action 1. in a judicial district where a and defendant resides if all the defendants are

residents of the state in which the district is located2. a judicial district in which a substantial part of part of the action giving rise to

the claim or substantial part of the property that is the subject of the action is situated or

3. if there is no district in which the action may otherwise be brought under this section -any district in which the any defendant is subject to the court’s personal jurisdiction with respects to the action.

1391 (c) Residency for purposes of Venue

1. A natural person(including permanent residents) shall be deemed to reside in the judicial district in which that person is domiciled.

2. An entity that can sue or be sued is deemed to reside in any judicial district in which it is subject to the court’s personal jurisdiction with respect to the civil action in question if it is a defendant. If it is a plaintiff then only in the judicial district in which it maintains it’s principal place of business

3. A defendant not resident in the U.S. may be sued in any judicial district and the joiner of such a defendant shall be disregarded in determining where the action may be brought with respects to it’s principal place of business.

1404 Change of Venue

(a) A district court may transfer any civil action to any other district or division where it might have been brought or to any district with parties consent for the convenience if parties and witnesses, in the interest of justice.

(b) Upon motion, consent or stipulation of all parties, any action, suit or proceeding of a civil nature or any motion or hearing thereof, may be transferred, in the discretion of the court, from the division in which pending to any other division in the same

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district. Transfer of proceedings in rem brought by or on behalf of the United States may be transferred under this section without the consent of the United States where all other parties request transfer.

1406 Cure of defects in Venue

a) the district court in which is file a case laying venue in the wrong division or district, shall dismiss or if it be in the interest of justice, transfer such case to any district or division where it could have been brought

b) Nothing in this, shall impair the jurisdiction of a district court of any matter involv-ing a party who does not who does not interpose in a timely and sufficient objection to venue.

Any County Rule (Burlington)

It dos not violate the equal protection act to limit the venue of an action against an in-state corporation to the country of it’s original place of business, while extending the venue of an action against an out –of-state corporation to any country in the state.

State may temper “any county” rule to the extent that a reasonable assessment of the de-fendant’s interest so justified.

The state has weighed the interests of a defendant who does not reside the forum state on the grounds that for a noncitizen defendant the inconvenience is great regardless of the county.

Substantial part of the action(1391 b 1) (Bates v. C & S Adjusters)

The determination of where venue is proper is fact specific.

The action must be considered a “substantial part of events”, unfairness should be consid-ered.

Example: in Bates The mailing of a debt collection notice is considered a “substantial part of events” regarding actions pursuant to the Fair Debt Collection Act.

Where it could have been brought (1404 (a))

Federal statute 28 U.S.C. Section: 1404(a) that states the defendant may remove the action to any district “where it might have been brought” refers to jurisdictions where the action could have been brought at the time of filing

The power of the District Court to transfer an action under the statute is limited to places where the plaintiff could have brought the action at the time it was filed, regardless of whether the defendant consents to the transfer.

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When evaluating whether a transfer of venue is proper, the focus is on the location of the defendants and the propriety of exercising personal jurisdiction and service of process.

What is Forum non Conveniens (Gulf Oil)

A court may resist imposition on its jurisdiction even when jurisdiction is authorized by the letter of the general venue statute.

Determining Forum non Conveniens (Gulf Oil)

Unless the balance is strongly in favor of the defendant, the plaintiff’s choice of forum should rarely be disturbed.

Public interest point towards dismissal for forum non conveniens where the court would be required to “untangle problems in conflict of laws, and in law foreign to itself”.

Public InterestsI. Administrative difficultiesII. Jury duty being imposed on persons with no relationship to the litigationIII. Local interest in localized litigationIV. Appropriateness of venue – prevention of having to resolve conflicts of law.

Private InterestI. Ease of access to evidenceII. Availability of compulsory process for attendanceIII. Cost of obtaining attendanceIV. Possibility of premisesV. Enforceability of judgment

Personal Jurisdiction v. Subject Matter Jurisdiction

Personal jurisdiction refers to a court's jurisdiction over the parties to a lawsuit, as op-posed to subject-matter jurisdiction, which is jurisdiction over the law and facts involved in the suit. A lack of subject-matter jurisdiction cannot be waived. A judgment from a court that did not have subject-matter jurisdiction is forever a nullity.

Dismissing for Forum Non Conveniens (Piper Aircraft)

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The possibility of change in substantive law should not be given conclusive or even sub-stantial weight in a forum non conveniens inquiry. That is a defendant cannot prevail on a motion to dismiss on the grounds of forum non conveniens by showing that the substantive law that would be applied in the alternative forum is less favorable than that of the chosen forum.

If there are fewer evidentiary problems that would arise if the trial were held in the alternative forum and there are public interest factors that favor the trial in that forum then it can be dismissed.

In a motion to dismiss for forum non conveniens, a court should consider both private and public interest factors. (Gulf Oil)

When an alternative forum has jurisdiction to hear a case and when trial in the chosen fo-rum would establish oppressiveness and vexation to a defendant out of proportion to the plaintiff’s convenience, or when the chosen forum is inappropriate because of considera-tions affecting the court’s own administrative and legal concerns, the court may in the ex-ercise of sound discretion dismiss the case by applying the list of private and public inter-est factors.

Private factors include the relative ease of access to sources of proof, availability of compul-sory process for the attendance of unwilling witnesses, the cost of attendance of witnesses, the possibility of viewing the scene if appropriate to the action, and other practical matters related to making the trial easy, expeditious, and inexpensive.

Public factors include administrative difficulties of the courts, interest in having local con-troversies adjudicated at home, the interest in having the trial in a forum that is familiar with the law governing the action, the avoidance of unnecessary problems in conflict of laws or the application of foreign law, and the unfairness of burdening citizens in an unre-lated forum with jury duty.

Swift v. Erie, State Law vs. Federal Law in Federal Court

The Rules Enabling Act and Seventh Amendment

The Seventh Amendment: “In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.”

28 U.S.C. § 2072 (“The Rules Enabling Act”)“(a) The Supreme Court shall have the power to prescribe general rules of practice and procedure and rules of evidence for cases in the United States district courts (including proceedings before magistrate judges thereof) and courts of appeals.

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(b) Such rules shall not abridge, enlarge or modify any substantive right. All laws in conflict with such rules shall be of no further force or effect after such rules have taken effect. . . .

Swift Rule vs. Erie RuleSwift represents the old rule:

Federal courts exercising jurisdiction predicated upon the ground of diversity of citizen-ship need not, in matters of general jurisprudence, apply the unwritten law of the state as declared by its highest court. The federal court is free to exercise an independent judgment as to what the common law of the state is, or should be

Erie Overturned Swift by establishing that

In diversity cases, federal courts must apply state law as declared by the highest state court in addition to state statutory law.

Justification for Erie Overturning Swift

I. The term “laws” in Section 34 in the Judiciary Act of 1789 (the “Rules of Decision Act”) refers to the decisions of local tribunals as well as state statutes, their interpre-tations by the courts, and the rights and titles to things having a permanent locality.

II. There is no federal general common law.III. Congress has no power to declare substantive rules of common law applicable in a

State and the Constitution does not confer such a power upon the federal courts.IV. Swift v. Tyson is overruled. It was an unconstitutional assumption of powers by the

Courts of the United States. Federal courts do not have the power to create federal common law as this gives federal courts powers not granted in the Constitution.

V. The Swift decision is flawed because it promotes forum shopping.

State Law v. Federal Law (Statutes of Limitations and Outcome determinative Test ) (Gau-renty Trust)

When no recovery can be had in a state court because the action is barred by the statute of limitations, a federal court cannot in equity take cognizance of the suit because there is di-versity of citizenship between the parties that is, the federal court must follow a state statute of limitations.

When there is diversity jurisdiction, the federal court should use the outcome-determina-tive test to ensure that the outcome of the federal court’s application of law would not be different than the outcome if the state had tried the case.

What is important under this test is that the outcome of the litigation in the federal court should be substantially the same as it would be if tried in the state court

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A party should not be able to manipulate the state and federal court systems solely to bring a claim in federal court that would, otherwise, be defeated by a statute of limitations if brought in state court.

This test is designed to prevent forum shopping between federal and state courts.

When to use the outcome determinative test (Byrd)

There are varying degrees of the Guaranty Trust Co. “outcome-determinative test.” The fact that the decision of which law, federal or state, to apply will be outcome-determinative is not conclusive. There may be other countervailing considerations

Federal courts in diversity suits need to respect the definition of state-created rights and obligations of state courts.

Federal courts should conform to state rules even if it is only a procedural rule, when the application of state rules as opposed to federal rules would substantially alter the outcome of the litigation.

The application of state rules may not “alter the essential character or function of the fed-eral court.” The Seventh Amendment protection of the right to a jury trial and the pre-scribed function of the jury is a fundamental right, which should not be governed by state law in federal court.

If there is not a strong likelihood that a different result would occur in the application of state law, as opposed to federal law, the state rule should not be applied over the federal rule.

Outcome determinative test vs. Erie Doctrine(Hanna)

If the rule at issue is procedural and the federal rule is on point with the state rule, then the Federal Rule must be applied as long as it complies with the Rules Enabling Act, 28 U.S.C. Section: 2071 and the U.S. Constitution. If there is no federal rule on point, then the Erie doctrine should apply.

Rule 4(d)(1) is not prohibited by the Constitution. It is authorized by Article III and the Necessary and Proper Clause. The purpose of the Federal Rules is to create uniformity.

The Erie doctrine was not meant to block the federal rules if they are “outcome determinative” or have “integral relations.”

Service of process is not a substantive right intended to be enforced by the Erie decision because the method of service here only “altered the mode of enforcing state-created rights” rather than changing the actual rights.

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Preclusion

Principles of claim Preclusion

I. One chance to litigate a claimII. One chance to litigate an issueIII. One “full and fair” chance to litigate before being barred from further litigationIV. The defense of preclusion is waived unless it is raised at the early stage of the litiga-

tion

Claim Preclusion

Why Claim Preclusion? (Rush)

It is improper to bring different claims for damages to property and person, which arose, from the same tort.

A single tort could be the basis of but one action.

This is necessary to prevent multiplicity of suits, burdensome expense and delays to plain-tiffs and vexatious litigation against defendants.

Claim Preclusion

A defense of claim preclusion may be raised if 1. There has been a decision on the Merits2. Case 1 and Case 2 must have been brought by the same claimant against the same

defendant, or parties in privity3. The second suit must involve matters that could have been properly considered in

the first action

Is it the same claim

I. The doctrine of res judicata (Claim Preclusion_ operates as a bar to subsequent suits involving the same parties, or those in privity with them, based on a claim, which has once reached a judgment on the merits.

The term claim refers to a group of facts limited to a single occurrence or transac-tion without reference to the legal rights

It is the facts surrounding the occurrence, not the legal theory, which make up the claim. (Mathews)

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II. In determining whether a demand is single and entire, or whether it is several, so as to give rise to more than one cause of action, one must identity the facts necessary to maintain the action. If the same evidence will support both actions, there is but one cause of action. (Jones v. Morris Plan Bank of Portsmouth)

III. Petro-hunt the critical issue us whether the two actions under consideration are based on the “same nucleus of operative facts”

IV. Restatement 2nd. When a debt is secured by a series if notes or when a bond includes a number of interest coupons, an action on one of the notes does not bar subsequent action on those others. (See Jones)

V. Considerations relevant to determining if it is the same claim 2nd Restatement

a. Facts related in time, space, origin or motivationb. Form a convenient trial unitc. Does treatment as unit conform t parties expectations, business understand-

ing or usage

Splitting claims(Jones)

If the contract was a single transaction and the breach gave rise to a single cause of action, then it could not be split into distinct parts and separate actions maintained for each. If the contract was divisible, giving rise to more than one cause of action, each could be pro-ceeded upon separately.

Parties in Privity

This is a state issue. Those who acquired an interest in the subject matter after the begin-ning of the action or the rendition of the judgment; and if their title or interest are attached before the fact, they are not bound unless made parties. (Rush)

Starre Decisis v. Preclusion

A judicial doctrine that helps the courts fashion and preserve a system of laws based on ra-tional principle.

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Planned Parenthood of S.E. P.A. v. Casey: stare decisis is a principle of policy and not a me-chanical formula of adherence to the latest decision.

Exceptions to Claim Preclusion

1. There are some instances when considerations of justice and fairness dictate that prior judgments should be given preclusive effect. (Federated Department Stores Inc. v. Mottie)

2. Where there is clear and foundamental jurisdictional defect that should have pre-vented the first court hearing of the suit, courts will often hold that there is no preclusive effect.

3. To insure that both parties agree to reservation of a claim, the reservation must be incorporated into the offer of the judgment and be an inherent part of the original complaint. (Hanover Logansport inc. v. Robert C. Anderson, inc.)

Issue Preclusion

What is Issue Preclusion?

A plaintiff cannot dispute an issue in a subsequent suit between the same parties or their privies; and even if the second suit is for a different cause of action the right, question, or fact once so determined must as between the same parties or their privies be taken as con-clusively established so long as the first suir remains unmodified. Southern Pacific Railroad v. United States.

Issue preclusion applies to matters argued and decided in a previous suit.

Elements of issue preclusion (Bernhard)

I. Judgment on the merits( not procedural issue)II. Issue must have been litigated in the first action and decided (the party against

whom issue preclusion is being asserted must have had a full and fair opportunity to litigate the issue in the first judicial proceeding)

III. The determination of that issue must have been essential to the decision IV. Privity of partiesV. Note: Issue preclusion does not bar future litigation over issues not actually raised

in the original judicial proceeding, even if the issues could have been raised.

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Dismissals (41 a 1 and 41 a 2)

Dismissals by the plaintiff without court order

The plaintiff may dismiss an action without a court order by filing:(i) a notice of dismissal before the opposing party serves either an answer or

a motion for summary judgment; or(ii) a stipulation of dismissal signed by all parties who have appeared.

Prejudice 41 a 1 (B)

Unless the notice or stipulation states otherwise, the dismissal is without prejudice. But if the plaintiff previously dismissed any federal- or state-court action based on or including the same claim, a notice of dismissal operates as an adjudication on the merits.

41 a 2 Except as provided in Rule 41(a)(1), an action may be dismissed at the plaintiff's request only by court order, on terms that the court considers proper.

Was the Issue previously litigated?

Where uncertainty exists as to several distinct matters that may have been litigated, with-out indication of which specific matters were decided upon, the whole subject matter of the action is open for re-trial unless the uncertainty is removed with regard to extrinsic evi-dence showing the precise point determined. (Russel v. Place)

It is the judgment and not the conclusions of fact filed by a trial court that constitutes estoppel. A finding of fact by a jury or court, which does not become the basis or one of the grounds of the final judgment, is not conclusive against either party to the suit. (Rios)

Is it final Judgment on the Merits?

Default Judgments

Housing Authority of La Salle County v. YMCA of Ottowa – Default judgments are entitled to the same preclusive effect under the doctrine of res judicata as any other judgment.

Error in first judgment(Moser)

The doctrine of issue preclusion is not applicable to unmixed questions of law.

A fact, question or right distinct adjudged in the first action can not be disputed in a subse-quent action even though the determination was reached upon an erroneous view or erro-neous application of the law.

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Consent Judgment(Handover)

To insure that both parties agree to reservation of a claim, the reservation must be incorpo-rated into the offer of the judgment and be an inherent part of the original complaint.

The court reasoned between two theories of consent judgments: The first, the contract-the-ory consent judgment, which looks to the intent of the parties. The second likens the judg-ment to claim preclusion and issue preclusion. Courts have adopted the consent-judgment-as-contract theory and held that the preclusive effect of a consent judgment had to be measured by the intent of the parties.

Affirmative action/ Consent Decree (Martin v. Wilks)

A court mandated consent decree does not preclude a subsequent suit brought on the same issue by parties not present in the earlier action.

There is an exception to the rule that sates that one is not bound by a judgment in per-sonam in which he was not a party where the plaintiff has had his interests represented by another party with the same interests.

Overruled by Civil Rights Act of 1991 which prohibits challenges to employment consent decrees by individuals who had a n actual notice and a reasonable opportunity to intervene or whose interests were represented adequately.

Full Faith and Credit / Claim Preclusion in Federal Court

U.S. Const. Article IV, Section 1:

“A Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State.”

28 U.S. Code § 1738

The Acts of the legislature of any State, Territory, or Possession of the United States, or copies thereof, shall be authenticated by affixing the seal of such State, Territory or Posses-sion thereto.

The records and judicial proceedings of any court of any such State, Territory or Posses-sion, or copies thereof, shall be proved or admitted in other courts within the United States and its Territories and Possessions by the attestation of the clerk and seal of the court an-

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nexed, if a seal exists, together with a certificate of a judge of the court that the said attesta-tion is in proper form.

Such Acts… shall have the same full faith and credit in every court within the United States and its Territories and Possessions as they have by law or usage in the courts of such State, Territory or Possession from which they are taken.

Judgment of States in Federal Court(Claim Preclusion)

A prior state court’s adjudication of an action precludes a plaintiff from subsequently filing a federal action if she could have but not raise her constitutional claim in the state action. (Migra)

It is more important to give full faith and credit to state court judgments than to ensure separate forums for federal and state claims. (Migra)

State-court judgment has the same preclusive effect in federal court that the judgment would have in state courts. (Migra)

Full Faith and credit (Final Judgment on the Merits) (Dupasseur v. Semtek)

Depasseur Rule: The claim preclusive effect of a federal diversity judgment is such that “would belong to judgments of the State courts rendered under similar circumstances” and may not be “accorded any higher sanctity”. Dismissal on grounds of statute-of-limita-tions by state court is not claim preclusive.

Rule 41(b) unless otherwise stated a dismissal should be treated as claim precuded in other federal courts.

Depasseur based on old statute that no longer exists and no longer applies.

41(b): 1. The rule is not about the adjudication on the merits. It is rather whether there is a preclusive judgment. Rather it depends on prejudice. Without prejudice means it can be refiled. 2. If 41(b) changed the preclusive effect of what it would be in the original judgment it would violate the Rules enabling act. I.e. if California court does not bar preclusion then the federal rules can’t change it so that it would be barred in Maryland Federal Court. 3. May create an Erie Problem. If the Expiration of statute of limitations bars remedy and does not extinguish the substantive right. Therefore dismissal on the grounds of statute of limitations does have preclusive effect in other jurisdictions. This would re-sult in removal of out of state defendants removing state law suits brought against them to federal court where statute of limitations would bar suit. (forum shopping) 4. They have never relied on 41(b) to treat the preclusive effect.

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State substantive law is at issue, therefore there is no need for a uniform federal rule. Fed-eral diversity judgment should have the same preclusive effect as the State Court judg-ments from that state.(Semtek)

Who can assert Issue Preclusion(Bernhard)

There is no requirement that the party asserting the plea of res judicata must have been a party, or in privity with a party, to an earlier litigation so long as the party against whom res judicata was asserted was a party in priv-ity to a party in that litigation.

Reasons for Issue Preclusion(Blunder-tongue)

1. Where a defendant because of mutuality principle is forced to present a complete defense on the merits to a claim which the plaintiff has fully litigated and list, there is a misallocation of resources.

2. Permitting the repeated litigation of the same issue as long as the supply of unre-lated defendant holds out reflects either the aura of gaming the table or “ lack of disciple and disinterestedness on the part of the lower courts, hardly a worthy or wise basis for fashioning rules.

3. The requirement of determining whether a party against whom a estoppel is as-serted had a full and fair opportunity to litigate is a most significant safeguard.

When can’t issue preclusion be assered(Blunder-tongue)

1. Litigants that’ have never appeared in a prior action may not be collaterally estopped without litigating the issue.

2. Due Process prohibits estopping them despite one or more existing adjudications of the identical issue which stand squarely against their position.

3. Authorities are not apt to allow a plaintiff in a second suit to use offensively a judg-ment obtained by a different plaintiff in a prior action against the same defendant.

4. Where there is not due process or offensiveness issue, the court should consider the factors weighing for and against allowing a litigant to try his case after he lost the first time in a full and fair trial.

How to determine if an issue is Precludued(Blunder-Tongue)

If a patentee/plaintiff should be allowed if he can to demonstrate that he did not have “a fair opportunity procedurally, substantially and evidentially to pursue his claim for the first time.

The determination will be based on the following considerationsa) Choice of forumb) Incentive to litigate

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c) If the opinions filed by the lower court demonstrate that the courts wholly failed to grasp the technical subject matter and issues.

d) Whether without fault of his own was unable to present crucial evidence and wit-nesses.

Offensive Use of Issue Preclusion(Parklane Hosiery co. )

A plaintiff should be allowed to employ issue preclusion offensively unless it would have been easy for the plaintiff to have joined in the earlier action, or issue preclusion would be unfair given the circumstances.

The preferable approach is not to preclude the use offensive collateral estoppel, but to grant trial courts broad discretion to determine when it should be applied.

The preferable approach is not to preclude the use offensive collateral estoppel, but to grant trial courts broad discretion to determine when it should be applied.

Offensive vs. Defensive use of Issue Preclusion(Parklane)

1. In either case the party against whom collateral estopel is being asserted has liti-gated and lost in a previous action.

1. Defensive: Defendant trying to prevent a plaintiff from relitiating a matter which he has previously lost

2. Offensive: Plaintiff is trying to prevent a defendant from relitigating an issue which he has previously lost

Arguments against Offensive use of Issue Preclusion(Parklane)

1. Encourages a plaintiff to adopt a wait and see attitude rather than joining an ongo-ing lawsuit since he can use it in his lawsuit if the defendant loses or is not bound by it if the defendant wins.

2. Unfair to defendant, if the defendant is sued for nominal amounts in the first lawsuit he may not vigorously defend the suit.

Pleadings

Rules of Pleadings

General

Rule 1. Scope and Purpose: These rules govern the procedure in all civil actions and pro-ceedings in the United States district courts, except as stated in Rule 81. They should be

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construed and administered to secure the just, speedy, and inexpensive determination of every action and proceeding.

Rule 2. One Form of Action: There is one form of action—the civil action. (civil action is no separate from equitable action)

Rule 3. Commencing an Action: A civil action is commenced by filing a complaint with the court.

Rule 8. Form of Pleadings:

Claim of Relief(a)

A pleading that states a claim for relief must contain:(1) a short and plain statement of the grounds for the court's jurisdiction, (2) a short and plain statement of the claim showing that the pleader is entitled to

relief; and(3) a demand for the relief sought, which may include relief in the alternative or dif-ferent types of relief.

Defenses; Admissions and Denials(b)

In General. In responding to a pleading, a party must:(A) state in short and plain terms its defenses to each claim asserted against

it; (B) admit or deny the allegations asserted against it by an opposing party.

(2) Denials—Responding to the Substance. A denial must fairly respond to the substance of the allegation.

(3) General and Specific Denials. A party that intends in good faith to deny all the allegations of a pleading—including the jurisdictional grounds—may do so by a general de-nial. A party that does not intend to deny all the allegations must either specifically deny designated allegations or generally deny all except those specifically admitted.

(4) Denying Part of an Allegation. A party that intends in good faith to deny only part of an allegation must admit the part that is true and deny the rest.

(5) Lacking Knowledge or Information. A party that lacks knowledge or informa-tion sufficient to form a belief about the truth of an allegation must so state, and the state-ment has the effect of a denial.

(6) Effect of Failing to Deny. An allegation—other than one relating to the amount of damages—is admitted if a responsive pleading is required and the allegation is not de-nied. If a responsive pleading is not required, an allegation is considered denied or avoided.

(c) Affirmative Defenses.(1) In General. In responding to a pleading, a party must affirmatively state any

avoidance or affirmative defense, including:

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• accord and satis-faction;

• arbitration and award;

• assumption of risk;

• contributory negligence;

• duress;• estoppel;• failure of consid-

eration;• fraud;• illegality;• injury by fellow

servant;

• laches;• license;• payment;• release;• res judicata;• statute of frauds;• statute of limita-

tions; and• waiver

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(2) Mistaken Designation. If a party mistakenly designates a defense as a counterclaim, or a counterclaim as a defense, the court must, if justice requires, treat the pleading as though it were correctly designated, and may impose terms for do-ing so.

(d) Pleading to Be Concise and Direct; Alternative Statements; Inconsistency.(1) In General. Each allegation must be simple, concise, and direct. No techni-

cal form is required.(2) Alternative Statements of a Claim or Defense. A party may set out 2 or

more statements of a claim or defense alternatively or hypothetically, either in a sin-gle count or defense or in separate ones. If a party makes alternative statements, the pleading is sufficient if any one of them is sufficient.

(3) Inconsistent Claims or Defenses. A party may state as many separate claims or defenses as it has, regardless of consistency.

(e) Construing Pleadings. Pleadings must be construed so as to do justice.

Rule 12. Defenses and Objections: When and How Presented; Motion for Judgment on the Pleadings; Consolidating Motions; Waiving Defenses; Pretrial Hearing

(a) Time to Serve a Responsive Pleading.(1) In General. Unless another time is specified by this rule or a federal

statute, the time for serving a responsive pleading is as follows:(A) A defendant must serve an answer:

(i) within 21 days after being served with the summons and complaint; or

(ii) if it has timely waived service under Rule 4(d), within 60 days after the request for a waiver was sent, or within 90 days after it was sent to the defendant outside any judicial district of the United States.

(B) A party must serve an answer to a counterclaim or crossclaim within 21 days after being served with the pleading that states the counter-claim or crossclaim.

(C) A party must serve a reply to an answer within 21 days after being served with an order to reply, unless the order specifies a different time.

(2) United States and Its Agencies, Officers, or Employees Sued in an Official Capacity. The United States, a United States agency, or a United States officer or em-ployee sued only in an official capacity must serve an answer to a complaint, coun-terclaim, or crossclaim within 60 days after service on the United States attorney.

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(3) United States Officers or Employees Sued in an Individual Capacity. A United States officer or employee sued in an individual capacity for an act or omis-sion occurring in connection with duties performed on the United States’ behalf must serve an answer to a complaint, counterclaim, or crossclaim within 60 days af-ter service on the officer or employee or service on the United States attorney, whichever is later.

(4) Effect of a Motion. Unless the court sets a different time, serving a motion under this rule alters these periods as follows:

(A) if the court denies the motion or postpones its disposition until trial, the responsive pleading must be served within 14 days after notice of the court's action; or

(B) if the court grants a motion for a more definite statement, the re-sponsive pleading must be served within 14 days after the more definite statement is served.

(b) How to Present Defenses. Every defense to a claim for re-lief in any pleading must be asserted in the responsive pleading if one is required. But a party may assert the following defenses by motion:

(1) lack of subject-matter jurisdiction;(2) lack of personal jurisdiction;(3) improper venue;(4) insufficient process;(5) insufficient service of process;(6) failure to state a claim upon which relief can be granted;

and(7) failure to join a party under Rule 19.

A motion asserting any of these defenses must be made before pleading if a respon-sive pleading is allowed. If a pleading sets out a claim for relief that does not require a responsive pleading, an opposing party may assert at trial any defense to that claim. No defense or objection is waived by joining it with one or more other de-fenses or objections in a responsive pleading or in a motion.

(e) Motion for a More Definite Statement. A party may move for a more definite statement of a pleading to which a responsive pleading is allowed but which is so vague or ambiguous that the party cannot reasonably prepare a response. The mo-tion must be made before filing a responsive pleading and must point out the de-fects complained of and the details desired. If the court orders a more definite state-ment and the order is not obeyed within 14 days after notice of the order or within the time the court sets, the court may strike the pleading or issue any other appro-priate order.

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(f) Motion to Strike. The court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter. The court may act:

(1) on its own; or(2) on motion made by a party either before responding to the pleading or, if

a response is not allowed, within 21 days after being served with the pleading.

Rule 7. Pleadings Allowed; Form of Motions and Other Papers

(a) Pleadings. Only these pleadings are allowed:(1) a complaint;(2) an answer to a complaint;(3) an answer to a counterclaim designated as a counterclaim;(4) an answer to a crossclaim;(5) a third-party complaint;(6) an answer to a third-party complaint; and(7) if the court orders one, a reply to an answer.

(b) Motions and Other Papers.

(1) In General. A request for a court order must be made by motion. The mo-tion must:

(A) be in writing unless made during a hearing or trial;(B) state with particularity the grounds for seeking the order; and(C) state the relief sought.

(2) Form. The rules governing captions and other matters of form in pleadings apply to motions and other papers.

Rule 10. Form of Pleadings

(a) Caption; Names of Parties. Every pleading must have a caption with the court's name, a title, a file number, and a Rule 7(a) designation. The title of the complaint must name all the parties; the title of other pleadings, after naming the first party on each side, may refer generally to other parties.

(b) Paragraphs; Separate Statements. A party must state its claims or defenses in numbered paragraphs, each limited as far as practicable to a single set of circum-stances. A later pleading may refer by number to a paragraph in an earlier pleading. If doing so would promote clarity, each claim founded on a separate transaction or occurrence—and each defense other than a denial—must be stated in a separate count or defense.

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Rule 5. Serving and Filing Pleadings and Other Papers

(a) Service: When Required.(1) In General. Unless these rules provide otherwise, each of the following papers must be served on every party:

(A) an order stating that service is required;(B) a pleading filed after the original complaint, unless the court orders otherwise under Rule 5(c) because there are numerous defendants;(C) a discovery paper required to be served on a party, un-

less the court orders otherwise;(D) a written motion, except one that may be heard ex

parte; and(E) a written notice, appearance, demand, or offer of judg-

ment, or any similar paper.

Complaints

What should a complaint contain?

A complaint must allege material, essential and ultimate facts upon which Plaintiff’s right of action is based. Gillispie

The complaint must provide the Defendant with notice to show the legal duty and viola-tion thereof. Gillispie

The complaint should state what occurred, when it occurred, where it occurred and who did what. Gillispie

Standard for evaluating a complaint

A complaint need only state a claim upon which relief can be granted. It does not necessarily have to contain facts that can support a cause of action. Dioguardi v. Durning

The standard for evaluating a complaint against a motion to dismiss under Federal Rules of Civil Procedure 12(b)(6) (failure to state a claim upon which relief can be granted). This standard is known as “notice pleading.” Dioguardi v. Durning

A complaint need only state grounds which would entitle the plaintiff to relief. It need not contain specific allegations of facts that would constitute some specific cause of action. Dioguardi v. Durning

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A complaint can be vague and incoherent, but if there is a discernable ground for relief, the complaint should not be dismissed for failure to state a claim. Dioguardi v. Durning

Evaluating the Sufficiency of a Complaint

In appraising the sufficiency of a complaint the accepted rule is that a complaint should not be dismissed for failure to state a claim unless it appears that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief. (Conley)

The rule does not require a detailed fact statement upon which he bases his claim but rather “ a short and plain statement of the claim” that will give the defendant fair notice of what the plaintiff’s claim and what grounds upon it rests. (Conley)

Statement of facts v. Conclusions of Law

Conclusion of law: a statement that can be made only after some legal rule has been applied. E.g. Plaintiff owes Defendant $500

Complaints and Answers

Fraud, mistake and Special Damages

Rule 9(b) In alleging fraud or mistake, a party must state with particularity the cir-cumstances constituting fraud or mistake. Malice, intent, knowledge, and other con-ditions of a person's mind may be alleged generally.

Rule 9(g) Special Damages. If an item of special damage is claimed, it must be specif-ically stated.

Rule 15. Amended and Supplemental Pleadings

(a) Amendments Before Trial.(1) Amending as a Matter of Course. A party may amend its pleading once as

a matter of course within:(A) 21 days after serving it, or(B) if the pleading is one to which a responsive pleading is required,

21 days after service of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is earlier.

(2) Other Amendments. In all other cases, a party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires.

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(3) Time to Respond. Unless the court orders otherwise, any required re-sponse to an amended pleading must be made within the time remaining to respond to the original pleading or within 14 days after service of the amended pleading, whichever is later.

(b) Amendments During and After Trial.(1) Based on an Objection at Trial. If, at trial, a party objects that evidence is

not within the issues raised in the pleadings, the court may permit the pleadings to be amended. The court should freely permit an amendment when doing so will aid in presenting the merits and the objecting party fails to satisfy the court that the evi-dence would prejudice that party's action or defense on the merits. The court may grant a continuance to enable the objecting party to meet the evidence.

(2) For Issues Tried by Consent. When an issue not raised by the pleadings is tried by the parties’ express or implied consent, it must be treated in all respects as if raised in the pleadings. A party may move—at any time, even after judgment—to amend the pleadings to conform them to the evidence and to raise an unpleaded is-sue. But failure to amend does not affect the result of the trial of that issue.

(c) Relation Back of Amendments.(1) When an Amendment Relates Back. An amendment to a pleading relates

back to the date of the original pleading when:(A) the law that provides the applicable statute of limitations allows

relation back;(B) the amendment asserts a claim or defense that arose out of the

conduct, transaction, or occurrence set out—or attempted to be set out—in the original pleading; or

(C) the amendment changes the party or the naming of the party against whom a claim is asserted, if Rule 15(c)(1)(B) is satisfied and if, within the period provided by Rule 4(m) for serving the summons and complaint, the party to be brought in by amendment:

(i) received such notice of the action that it will not be prejudiced in defending on the merits; and(ii) knew or should have known that the action would have been brought against it, but for a mistake concerning the proper party's identity.

(d) Supplemental Pleadings. On motion and reasonable notice, the court may, on just terms, permit a party to serve a supplemental pleading setting out any transac-tion, occurrence, or event that happened after the date of the pleading to be supple-mented. The court may permit supplementation even though the original pleading is defective in stating a claim or defense. The court may order that the opposing party plead to the supplemental pleading within a specified time.

Fraud in Pleadings

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Rule 9(b) of the Federal Rules of Civil Procedure only requires that the plaintiff al-lege the circumstances of fraud such that the defendant will be able to sufficiently answer the allegations(Denny)

If the allegations of fraud are sufficiently identified to give the defendant an oppor-tunity to draft an “adequate answer,” Rule 9(b) of the Federal Rules of Civil Proce-dure is satisfied. (Denny)

In a similar case Denny v. Barber with the sane plaintiff and counsel, the court held that there must be more than mere vague allegations that the corporations true fi-nancial picture was not so bright in some respects as its annual reports had painted and the defendant knew or were reckless in failing to know this.

PSLRA requires that complaints specify every statement alleged to have been mis-leading and to provide reasons why the statements are misleading.

If an allegation is made on information and belief, the pleader must provide all facts on which the belief is based and state those facts with particularity.

Claiming Relief in Pleadings (Standard) (Swierkiewicz)

A complaint only needs to contain a “short and plain statement of the claim showing that the pleader is entitled to relief” Fed Civ. Proc 8(a)(c)

Establishing a prima facie case is an evidenciary standard not a pleading standard.

It is not appropriate to require that a pleading establish a prima facie case because in an employment discrimination suit a plaintiff may prevail without establishing a prima facie case if he can provide direct evidence of discrimination.

Leatherman v, Tarrant country narcotics: Rule 8 does not impose a heightened pleading standard on civil rights complaints.

Motions to dismiss for failure to state a claim(American Nurses)

If a complaint’s allegations are ambiguous and one reading states a possible claim, the claim cannot be dismissed under Rule 12(b)(6) of the Federal Rules of Civil Pro-cedure. The defendant can only move for the court to order the plaintiff to allege a more definite statement of the claim

The complaint does not fail because it contains futile allegations or facts that would not state a claim standing alone.

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Even if a lengthy complaint contains specific allegations that do not state a claim that would entitle the plaintiff to relief, the complaint cannot be dismissed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure if there are other allegations that could be read to state a claim.

Denials

Rule 8(b) requires that a defendant makes one of three answers, admit, deny or plead insufficient information in response to each allegation.

Improper Form of Denials

Denial for lack of information

A party may deny an allegation on the grounds that it “lacks knowledge or informa-tion sufficient to form a belief about the truth” of the allegation. 8(b)(5)

Negative Pregnant Denial

A statement phrased in the negative that carries an affirmative implication. E.g. de-fendant denies owing P $2000 but may actually owe $1999

Affirmative Defenses

There are two types of defensive allegations: 1. Affirmative defense: Plaintiff admits the allegations of the complaint but chal-

lenges the plaintiff’s legal right to bring the action by suggesting a reason why relief is not available.

2. An avoidance avers matters outside the complaint that cannot be raised by denial.

Asserting Affirmative Defenses

Under Rule 8(c) of the Federal Rules of Civil Procedure, Defendant must present all affirmative defenses or avoidances listed in the Rule as whether any other grounds constituting an assertion of avoidance or affirmative defense or else it is deemed waived. Ingram

Under Rule 8(c) of the Federal Rules of Civil Procedure, affirmative defenses listed in the rule or “any other matter constituting an avoidance or affirmative defense” that are not raised in the answer are waived. The major consideration behind the rule is preventing unfair surprise. Ingram

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Determining if a defense is affirmative(Ingram)

To determine if an affirmative defensea) Is it a necessary element in the plaintiff’s cause of actionb) Which party has better access to relevant evidencec) Policy considerations.

Is it an affirmative defense

Cap on Damages

The cap on damages is considered an “avoidance” or a response to an admitted alle-gation in a former pleading that argues the admitted fact in such pleading should not be given its ordinary legal effect.(Ingram)

Federal rules do not require plaintiffs to plead the extent of damages sought, defen-dants should not be required to plead the limitation of damages prescribed by statute. (Taylor)

Mistakes

Absent an element of bad faith on the part of the Defendant, courts will generally grant a Defendant leave to amend his answer to a complaint unless it will clearly prejudice the ability of the Plaintiff to proceed with his suit.(Beeck v. Aquaslide)

Fed. R. Civ. P. 15(a) provides that a party may amend his pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires. .(Beeck v. Aquaslide)

The risk of harm to the plaintiff must be balanced against the risk of harm to the de-fendant. (Beeck v. Aquaslide)

“The question under Rule 15(c)(1)(C)(ii) is NOT whether plaintiff knew or should have known the identity of defendant as the proper defendant, but whether Defen-dant knew or should have known that it would have been named as defendant but for an error.” (Krupski)

Similarly, deliberately choosing to sue one party over another doesn’t necessarily mean you cannot make a mistake in doing so. (Krupski)

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Adding Claims

Rule 11. Signing Pleadings, Motions, and Other Papers; Representations to the Court; Sanctions(a) Signature. Every pleading, written motion, and other paper must be signed by at least one attorney of record in the attorney's name—or by a party personally if the party is unrepresented. The paper must state the signer's address, e-mail address, and telephone number. Unless a rule or statute specifically states other-wise, a pleading need not be verified or accompanied by an affidavit. The court must strike an unsigned pa-per unless the omission is promptly corrected after being called to the attorney's or party's attention.

(b) Representations to the Court. By presenting to the court a pleading, written motion, or other paper—whether by signing, filing, submitting, or later advocating it—an attorney or unrepresented party certifies that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:

(1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;

(2) the claims, defenses, and other legal contentions are warranted by existing law or by a non-frivolous argument for extending, modifying, or reversing existing law or for establishing new law;

(3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and

(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information.

(c) Sanctions.

(1) In General. If, after notice and a reasonable opportunity to respond, the court determines that Rule 11(b) has been violated, the court may impose an appropriate sanction on any attorney, law firm, or party that violated the rule or is responsible for the violation. Absent exceptional circumstances, a law firm must be held jointly responsible for a violation committed by its partner, associate, or employee.

(2) Motion for Sanctions. A motion for sanctions must be made separately from any other motion and must describe the specific conduct that allegedly violates Rule 11(b). The motion must be served under Rule 5, but it must not be filed or be presented to the court if the challenged paper, claim, defense, con-tention, or denial is withdrawn or appropriately corrected within 21 days after service or within another time the court sets. If warranted, the court may award to the prevailing party the reasonable expenses, in-cluding attorney's fees, incurred for the motion.

(3) On the Court's Initiative. On its own, the court may order an attorney, law firm, or party to show cause why conduct specifically described in the order has not violated Rule 11(b).

(4) Nature of a Sanction. A sanction imposed under this rule must be limited to what suffices to deter repetition of the conduct or comparable conduct by others similarly situated. The sanction may in-clude nonmonetary directives; an order to pay a penalty into court; or, if imposed on motion and warranted for effective deterrence, an order directing payment to the movant of part or all of the reasonable attorney's fees and other expenses directly resulting from the violation.

(5) Limitations on Monetary Sanctions. The court must not impose a monetary sanction:

(A) against a represented party for violating Rule 11(b)(2); or

(B) on its own, unless it issued the show-cause order under Rule 11(c)(3) before volun-tary dismissal or settlement of the claims made by or against the party that is, or whose attorneys are, to be sanctioned.

(6) Requirements for an Order. An order imposing a sanction must describe the sanctioned con-duct and explain the basis for the sanction.

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(d) Inapplicability to Discovery. This rule does not apply to disclosures and discovery requests, responses, objections, and motions under Rules 26 through 37.

Rule 13.

(a) Compulsory Counterclaim.

(1) In General. A pleading must state as a counterclaim any claim that—at the time of its service—the pleader has against an opposing party if the claim:

(A) arises out of the transaction or occurrence that is the subject matter of the opposing party's claim; and

(B) does not require adding another party over whom the court cannot acquire jurisdiction.

(2) Exceptions. The pleader need not state the claim if:

(A) when the action was commenced, the claim was the subject of another pending action; or

(B) the opposing party sued on its claim by attachment or other process that did not establish personal juris-diction over the pleader on that claim, and the pleader does not assert any counterclaim under this rule.

(b) Permissive Counterclaim. A pleading may state as a counterclaim against an opposing party any claim that is not compulsory.

(c) Relief Sought in a Counterclaim. A counterclaim need not diminish or defeat the recovery sought by the opposing party. It may request relief that exceeds in amount or differs in kind from the relief sought by the opposing party.

(e) Counterclaim Maturing or Acquired After Pleading. The court may permit a party to file a supplemen-tal pleading asserting a counterclaim that matured or was acquired by the party after serving an earlier pleading.

Consolidation Rule 42(b)(b) Separate Trials. For convenience, to avoid prejudice, or to expedite and econo-mize, the court may order a separate trial of one or more separate issues, claims, crossclaims, counterclaims, or third-party claims. When ordering a separate trial, the court must preserve any federal right to a jury trial.

Joiner of claims Rule 18(a)A party asserting a claim, counterclaim, crossclaim, or third-party claim may join, as independent or alternative claims, as many claims as it has against an opposing party.

Joiner Rule 20.

a) Persons Who May Join or Be Joined.

(1) Plaintiffs. Persons may join in one action as plaintiffs if:

(A) they assert any right to relief jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and

(B) any question of law or fact common to all plaintiffs will arise in the action.

(2) Defendants. Persons—as well as a vessel, cargo, or other property subject to admiralty process in rem—may be joined in one action as defendants if:

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(A) any right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occur-rences; and

(B) any question of law or fact common to all defendants will arise in the action.

(3) Extent of Relief. Neither a plaintiff nor a defendant need be interested in obtaining or defending against all the relief demanded. The court may grant judgment to one or more plaintiffs according to their rights, and against one or more defendants according to their liabilities.

(b) Protective Measures. The court may issue orders—including an order for separate trials—to protect a party against embarrassment, delay, expense, or other prejudice that arises from including a person against whom the party asserts no claim and who asserts no claim against the party.

Imposing Sanctions(Hadges)

Under Rule 11 of the Federal Rules of Civil Procedure, sanctions cannot be imposed on a party before the 20 day “safe harbor” period expires because the point of the period is to give the accused party time to correct the mistakes.

Sanctions should only be imposed on a party’s attorney for failure to investigate his/her client’s statements if the attorney did not conduct a reasonable inquiry un-der the circumstances as to whether the statements have evidentiary support.

Party seeking sanctions must send a motion to the opposing party. The opposing party has 21 days to cure the issue for which sanctions are sought before the party seeking sanctions may file the motion with the court.Rule 11 of the Federal Rules of Civil Procedure requires that attorneys conduct a reasonable inquiry under the circumstances as to whether the attorney can find evi-dence to support the factual statements.

The “safe harbor” provision of Rule 11 gives a party or an attorney a chance to rec-tify errors that are alleged to be sanctionable.

An attorney’s investigation of his/her client’s statements must only be reasonable. In this case, it shows that evidence supporting the client’s statements is “eviden-tiary support” notwithstanding that evidence clearly controverts such statements and the attorney later admits the error.

Joiner

Sporn v. Hudson: if a single jury were jury were allowed to try both types of action at the one time, there is is strong likelihood that confusion would exist in the minds of the jury as to the rules of law to be applied to the respective actions and they would undoubtedly entertain much difficulty in applying the various parts of testi-mony introduced to the appropriate cause of action.

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A party is allowed to assert in a single action against an opposing party, but it does not compel joiner.

Principles of res judicata, which prohibit the splitting of a cause of action into two or more lawsuits, may create incentives for the joiner of related claims even in the ab-sence of compulsory joiner.

Addition of Claims

Counterclaims

Counterclaims need only have similar circumstances to the subject matter of the liti-gation in order to be compulsory. There need not be identical facts.

Compulsory v. permissive claims

1. Are the issues of facts and law raised by the claim and counterclaim the same?

2. Would res judicata bar a subsequent suit on a defendant’s claim absent the compulsory counterclaim rule?

3. Will substantially the same evidence support or refute the plaintiff’s claim as well defendant’s counterclaim?

4. Is there any logical relation between the claim and counter claim?

Triggering Compulsory Joiner(Heyward-Robinson Co.)

If the counterclaims arise out of the same transaction or occurrence then they are compulsory under Rule 13(a) of the Federal Rules of Civil Procedure. This does not require identical facts, but a logical relationship between the claims.

Rule 13(a) of the Federal Rules of Civil Procedure was intended to prevent re-litiga-tion of the same issues and duplicate claims litigated in different forums.

If the counterclaims were compulsory, the Court has ancillary jurisdiction over the counterclaims and can therefore render judgment.

Exceptions to Compulsory Joiner

There are several exceptions to the joiner rule 13. • Several are set out in the rule itself.

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Cross-Claims

When are cross-claims permitted(Lasa)

Cross-claims are permitted to be filed against co-defendants under Rule 13(g) of the Federal Rules of Civil Procedure if the claims arise from the same “transaction or oc-currence” of the initial claim. If the claims are centered on the same legal issue in-volved in the initial claim, this is considered the same “transaction or occurrence.”

A court has ancillary jurisdiction over cross claims if they arise from the subject matter of the original action.

The term “transaction or occurrence” as used in Rule 13(g) of the Federal Rules of Civil Procedure is given a broad and liberal meaning in order to avoid many law-suits. Although the cross-claims involve different subcontracts, they all center on the issue of responsibility for the marble job.

In the event that the issues in the case will cause jury confusion, the District Court has discretion to order separate trials, but not dismiss the cross-claims.

Permissive Joiner

Rule 14

(a) When a Defending Party May Bring in a Third Party.

(1) Timing of the Summons and Complaint. A defending party may, as third-party plaintiff, serve a summons and complaint on a nonparty who is or may be liable to it for all or part of the claim against it. But the third-party plaintiff must, by motion, obtain the court's leave if it files the third-party complaint more than 14 days after serving its original answer.

(2) Third-Party Defendant's Claims and Defenses. The person served with the sum-mons and third-party complaint—the “third-party defendant”:

(A) must assert any defense against the third-party plaintiff's claim under Rule 12;

(B) must assert any counterclaim against the third-party plaintiff under Rule 13a, and may assert any counterclaim against the third-party plaintiff under Rule 13(b) or any crossclaim against another third-party defendant under Rule 13(g);

(C) may assert against the plaintiff any defense that the third-party plaintiff has to the plaintiff's claim; and

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(D) may also assert against the plaintiff any claim arising out of the transaction or occurrence that is the subject matter of the plaintiff's claim against the third-party plaintiff.

(3) Plaintiff's Claims Against a Third-Party Defendant. The plaintiff may assert against the third-party defendant any claim arising out of the transaction or occur-rence that is the subject matter of the plaintiff's claim against the third-party plain-tiff. The third-party defendant must then assert any defense under Rule 12 and any counterclaim under Rule 13(a), and may assert any counterclaim under Rule 13(b) or any crossclaim under Rule 13(g).

(4) Motion to Strike, Sever, or Try Separately. Any party may move to strike the third-party claim, to sever it, or to try it separately.

(5) Third-Party Defendant's Claim Against a Nonparty. A third-party defendant may proceed under this rule against a nonparty who is or may be liable to the third-party defendant for all or part of any claim against it.

(6) Third-Party Complaint In Rem. If it is within the admiralty or maritime jurisdic-tion, a third-party complaint may be in rem. In that event, a reference in this rule to the “summons” includes the warrant of arrest, and a reference to the defendant or third-party plaintiff includes, when appropriate, a person who asserts a right under Supplemental Rule C(6)(a)(i) in the property arrested.

(c) When a Plaintiff May Bring in a Third Party. When a claim is asserted against a plaintiff, the plaintiff may bring in a third party if this rule would allow a defendant to do so.

Required Joiner Rule 19

(a) Persons Required to Be Joined if Feasible.

(1) Required Party. A person who is subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined as a party if:

(A) in that person's absence, the court cannot accord complete relief among existing parties; or

(B) that person claims an interest relating to the subject of the action and is so situ-ated that disposing of the action in the person's absence may:

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(i) as a practical matter impair or impede the person's ability to protect the interest; or

(ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.

(2) Joinder by Court Order. If a person has not been joined as required, the court must order that the person be made a party. A person who refuses to join as a plain-tiff may be made either a defendant or, in a proper case, an involuntary plaintiff.

(3) Venue. If a joined party objects to venue and the joinder would make venue im-proper, the court must dismiss that party.

(b) When Joinder Is Not Feasible. If a person who is required to be joined if feasible cannot be joined, the court must determine whether, in equity and good conscience, the action should proceed among the existing parties or should be dismissed. The factors for the court to consider include:

(1) the extent to which a judgment rendered in the person's absence might preju-dice that person or the existing parties;

(2) the extent to which any prejudice could be lessened or avoided by:

(A) protective provisions in the judgment;

(B) shaping the relief; or

(C) other measures;

(3) whether a judgment rendered in the person's absence would be adequate; and

(4) whether the plaintiff would have an adequate remedy if the action were dis-missed for nonjoinder.

(c) Pleading the Reasons for Nonjoinder. When asserting a claim for relief, a party must state:

(1) the name, if known, of any person who is required to be joined if feasible but is not joined; and

(2) the reasons for not joining that person.

Rule 21. Misjoinder and Nonjoinder of Parties

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Misjoinder of parties is not a ground for dismissing an action. On motion or on its own, the court may at any time, on just terms, add or drop a party. The court may also sever any claim against a party.

Who must be joined? (Bank of California)

A party is required to join all “necessary and indispensable” parties. A party is con-sidered indispensable only if the party’s rights will definitely be disposed of in the case at issue. It is not enough for the party to only have an interest in the case.

In order to determine whether a party must be joined, the party must be necessary and indispensable.

A necessary party is one that should be brought into the lawsuit in the interests of justice. However, if the party’s interest can be separated and jurisdiction cannot be obtained over the party, the party is not indispensable.

An indispensable party is a party that must be joined in the suit so that the court may have jurisdiction to decide the action.

Should a case be dismissed for failure to join(Provident Bank)

The interests articulated in Rule 19(b) of the Federal Rules of Civil Procedure must be evaluated by the Court prior to disposition of the case in order to determine whether a case should be dismissed for failure to join an indispensable party. The decision rendered should always be consistent with “equity and good conscience.”

Not all parties have a substantive right to be joined under Rule 19 of the Federal Rules of Civil Procedure. The interests articulated in Rule 19(b) must be evaluated to determine if such a substantive right exists in a particular situation.

Impleader

A defendant may implead a third party that may be liable in a lawsuit under Rule 14 of the Federal Rules of Civil Procedure even though the defendant may not be able to bring an independent action against the third party at the time the third party is impleaded. The policy behind Rule 14 is to have the rights of all parties resolved in one proceeding. If the trial court has means to prevent any prejudice ensued from impleading a third party, then impleader is permitted. (Jueb)

Defendant implead a third party under Rule 14 of the Federal Rules of Civil Proce-dure if the applicable state law governing contribution and indemnity would require the third party to be named as a defendant in the original complaint brought by Plaintiff (Jeub)

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Under Rule 14 of the Federal Rules of Civil Procedure, a defendant may implead a third party defendant “who is or may be liable.”(Jeub)

Should Leave be given to add an impleader

• Was filing delayed?• would it delay or complicate the trial• would it delay or complicate the trial• did third-party complaint states a claim which relief can be granted

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