Billy’s Federal Civil Procedure Outline

Week 1: Introduction; Subject Matter Jurisdiction: Diversity Citizenship

Whats Civil Pro?
 Service
 P seeks to force D to take some action
 P seeks to forces D to stop taking some action
Procedure?
 Process by which issues resolved
SMJ
 Can I go to federal or state court?
SMJ of State court
 State court can hear any case
 EXCEPT: Patent and Antitrust cases; Must go to Federal
Why people choose State courts?
 On federal level, judge may be bias against party, so party take case to state

Article III Section 2: Constitution

 Allows federal courts to have diversity jdx over citizens of different states
 In state ct Only requires minimal diversity between parties (at least 1 P in different state than 1 D).
o Ex: P (Mass) sues D (NY) in Mass. state court and alleges a state law cause of action and damages of 50K.
Subject matter jurisdiction? YES

28 U.S.C. Section 1332: Congress (Congress placed limits on FEDERAL COURTS)

1. Complete diversity at Time of Filing
o Citizens must be of different states
o If no diversity, then cannot go to federal court
2. Amount in Controversy must exceed $75,000
o Ex: P (Mass) sues D1(Maine) and D2(Maine) in Maine Fed. Ct. and alleges a state law cause of action and damages
>75K. Subject matter jurisdiction? YES.

Exception to Diversity: Courts do NOT have diversity jdx over PROBATE and FAMILY cases.
o Marshall Holding: Smith’s claim for tortious interference by former husband’s son with her former husband’s attempts
to prove she was beneficiary to trust. U.S. Supreme Court held that the federal courts possessed diversity jurisdiction
to hear her claim, even though her claim was related to a probate case.

Amount in Controversy
 Diversity requires amount in controversy exceed $75,000 AND made in good faith and must not be impossible to
recover more than $75,000.

St. Paul Mercury Test

 Plaintiff can meet the AIC if there’s a good faith argument for claim, unless it appears to a legal certainty that the claim
is really for less than the jurisdictional amount ($75,000)  then Amount in Controversy not met.

Aggregating Claims to meet Amount in Controversy

 Single P can aggregate (add together) any separate claims against single D to meet AIC, even if claims unrelated.
o Ex: Student A sues Student B for $70,000, for intentionally running into him as he walked by the exit to the
TJSL parking garage, and for $70,000 in punitive damages. Answer: A plaintiff can aggregate
compensatory damages with punitive damages against a defendant if:
1) state recognizes punitive damages AND
2) jury could award punitive damages
o Ex: Student A suffered $70,000 in damages when Student B struck him with his car, while Student A was
crossing Island Avenue. Count 1 of the Complaint seeks $70,000 from Student B for negligence in causing
Student A’s injuries. Count 2 of the Complaint seeks $70,000 from Student B for intentionally causing
Student A’s injuries. Answer: No. A plaintiff can plead alternative theories of liability and may even be
able to establish both theories at trial, but he or she cannot recover more damages than he or she has
sustained
o Hypo 7: Theory will be allowed here because either D may be liable for 80K, so AIC met against each one.
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  Single P cannot aggregate claims against multiple Defendants to meet AIC.
o Ex: Student A sues Student B for $80,000, arising from injuries sustained when Student B struck him with his
car as he was walking across Island Avenue to attend class. Student A also sues Thomas Jefferson School of
Law (TJ) for $20,000, due to TJ’s alleged negligence in failing to force Student A to use the cross walk.
Answer: Student A has satisfied the AIC requirement regarding Student B, but Student A has not
satisfied the AIC requirement regarding TJ.

 Multiple Plaintiffs (Co-Plaintiffs) cannot add claims to meet AIC against same D or different Defendants, unless 1 P
meets the AIC and other P’s claims are related, then all Ps can sue together, even if others don’t meet AIC - Covered by
Supplemental Jdx.
o Hypo 8: 1 P met over 75,000 AIC while the other P only has 20,000, but both related claims, so allowed
under supplemental jdx.

Diversity of Citizenship for Individual

Individual is domiciled in new state if there’s:
1. Intent to remain there indefinitely
 Unsure how long will be there enough for citizenship
2. Physically be in new state
 Citizen of original state until citizen moves to new state

Diversity of Citizenship of Corporation

Corporation is a citizen of a State in:
1. State where it has Principal place of business
o PPB is place where a corp’s officers direct, control, and manage corporate activities (Nerve center)
2. State of Incorporation (incorporated in state)

Citizenship for Partnerships AND Unincorporated Association

 Partnerships & unincorporated associations treated as individuals; NOT Corporations
 Each partner or member of association & other side must be of different states to have complete diversity.
(UPDATED ABOVE W/ PPS: YES / WRITTEN: YES) ------------------------------------------------------------------------------
Week 2: SMJ Continued: Federal Question and Removal Jurisdiction

Federal Question
 Article III Constitution – Fed ct may hear any case as long as there’s a federal ingredient in case.
 Section 1331: Congress – Fed ct may hear case only if P’s claim “arises under” federal law.
 Congress doesn’t require lower courts, so Congress can give less than fed jdx to Article III.

Mottley’s Well-Pleaded Complaint

 Plaintiff’s complaint must rely on a federal issue.
 Plaintiff’s anticipated Defenses NOT federal question

Railroad v. Mottley
Facts & Holding: P’s claim was for breach of K b/c Federal act deprived them of their 5th Amend. rights, so P anticipated a
federal defense, but claim not straight up federal question. Ct held P’s claim didn’t arise under fed question.

Holme’s Creation Test

 Federal law must create Plaintiff’s cause of action AND provide remedy.
o State law that creates P’s suit does not arise under federal question

Federal Defenses: Counter Claims Not Okay

 D’s Counterclaims cannot arise under federal law.
 Exception: ONLY Patent and Copyright claims MUST go to Federal court.

Declaratory Judgments
 Declaratory judgement allows party, before violation of right or suit, to sue and ask court to get clarification (declare)
of their rights.
o Example: Billy filed Dec Judgment against Angel, asking ct to declare his right to terminate Angel’s
employment under fed law. Is this allowed in fed ct?
Answer: Unless replying to imminent/threatened suit by Angel, Billy can file dec judgment to declare
his rights to terminating job before any violation/suit.
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  Exception: Defendant raises defense against imminent or threatened suit by Plaintiff & no federal jdx even if
Defendant waited to bring defense, Court Dismisses.
OR

If you have an embedded federal issue in a state claim, apply federal embedded issue test:

Embedded Federal Issue

Two-part test to show if P’s complaint arises under fed question 1331:
First step: Does federal law create P’s cause of action and provide remedy?
 If yes, federal question jdx exists under 1331.
 If no, then proceed to question #2.
Second step: Does Plaintiff’s state law claim requires application of federal law?
 If yes, claim arises under federal question if:
1. Necessarily deals with federal issue (have to apply federal law to resolve it)
2. Actually disputed (disagreement btwn parties)
3. Substantial
o Is it important to fed system as a whole?
4. Can case be decided in federal court without disrupting federal-state balance?
o Would deciding this case in fed ct create too many new cases to be filed in or removed? (How many other
cases like this will be removed to fed ct to be taken out of state courts)
o Can it be handled by states?
Gunn v Minton
Holding: Minton’s malpractice claim necessarily requires application of patent law to case to show a patent infringement.
Federal issue actually disputed b/c Minton argued experimental exception would’ve helped him win, but Gunn disagrees.
Federal issue not substantial b/c it was a hypothetical patent issue case, so substantial to case & has no real world effects.
Case would disrupt balance btwn fed & state b/c state cts entitled to regulations of legal profession through malpractice
claims. Thus, state claim not under fed question.

Removal
 Section 1441(a): Claim with original jdx (Diversity/Federal Q) Defendant or Defendants may remove claim to fed
District Court of US where action is pending.
 In State Defendant: 1441(b)(2) Diversity case cannot be removed if any Defendants are citizens of the forum state.
o Ex: Jenny from Texas sues Billy from Utah and Sonia from Nevada, on state law breach of K claim in Utah
state court, for $200,000. Answer: Removal is not proper here because one of the defendants is citizen of
Utah, which is where case was filed.
 In State Defendant: Claims under Federal Question may be removed to Federal ct, even if D is in forum state.
o Ex: Billy from Texas sues Edgar from Utah on claim arising under federal law. He sues in Uta state court.
Answer: Even if in state D is in forum state, Still Removable to fed ct b/c claim arises under fed law.
 Counterclaims
o P could’ve brought it in fed ct  D may remove

Procedure of Removal
 Who may remove?
o Only Defendant AND ALL Defendants must agree to remove
 When must case be removed?
o Remove to fed ct within 30 days after getting complaint or served w/ process.
o Diversity Case:
Diversity claim cannot be removed after more than 1 year since initial suit, unless Plaintiff acted
in bad faith to stop removal.
o If doesn’t removed within 30, waives it.
Procedure for Remand
 Remanded to state for other reasons  within 30 days  after filing removal
 Any time before final judgment NO Original jdx  Remand and Require payment of costs and actual expenses and
lawyer fees due to removal.

Framework
o Always ask: Whether P could’ve filed action in federal ct?
o If so, D may remove to fed ct.
o If not, case should be remanded to state ct.

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Avitts v Amoco Co
Holding: No diversity between D & P, so P’s claim could only arise under fed question. However, P’s claim only asserted state
law, despite reference to D’s violations of federal law. Reference to fed law here was NOT enough to arise under fed question.
Because fed ct didn’t have original SMJ over P’s claim, removal is not proper. Case should be remanded to state court.
(UPDATED ABOVE W/ PPS: YES / WRITTEN: YES) -------------------------------------------------------------------------------

Week 3: SMJ Continued: Supplemental Jurisdiction;

Supplemental Jdx Framework:
1. Is SJ Constitutional?
 Claims from CNOF
2. Is SJ allowed by Statute?
 Fed Question – limits to Constitution
 Diversity – ONLY Ancillary claims, but Exxon rule may allow P’s added claims be heard if 1 P meets AIC.
3. If answer to 1 and 2 is yes, then court has supplemental jdx under 1367 (a)
4. Federal ct may dismiss claims under supplemental jdx if:
 Apply Gibbs Factors
* Complicated state law issue
* Federal question claim dismissed early
* Claim mostly state law
* Jury confusion

Pendent Claims
 Plaintiff asserts additional parties in complaint.

Ancillary claims
 Defendant asserts additional parties after P complains (counterclaim, cross-claims, third party claims)

Constitution
Only requires additional claims arise from CNOF.

1367 (a) Federal Question Rule for Supplemental Jdx (Gibbs Rule)
 If Claim ARISES under FEDERAL QUESTION  court MAY HEAR other related state claims arising out of the
same common nucleus of operative facts as the main claim.
o Example: Billy, CA, files suit for injuries of sports against Andrea, CA. Suit brought under Federal Torts
Claims Act. Billy also sues Adriana, CA, for same injuries. Does ct have jdx over Billy’s claim against
Adriana?
Answer: Yes, can be heard under supp. jdx b/c firstly, b/c 2nd claim has no original jdx but Billy’s main
claim has “original jdx” (first suit under Fed Tort Act) and 2nd related claim arises under CNOF (injuries
related to same injuries of sports) can be heard too.
 Supplemental jdx applies to Ancillary claims
o Example: P, CA, sues D1, NY, for 200K for misrepresentation. D1 impleads D2, CO, for giving false info.
Does ct have jdx over D1’s impleader against D2?
Answer: Yes, but Supplemental jdx not needed b/c there’s diversity jdx over impleader. However, if there
was no “original jdx” over impleader, then may be heard under supp jdx b/c first claim has original jdx &
CNOF met.

United Mine Workers v Gibbs

Facts
 Coal company laid off 100 miners & Grundy Co, subsidiary of Coal Co, opened new mine & gave Gibbs haul coal
 Miners who were laid off acted violently & believed they deserved jobs.
 Gibbs lost haul contracts & unable to obtain contracts due to this.
 Gibbs claims violations of the Labor Management Relations Act & Tennessee law.

Issue: Could P add on additional state claims if the original claim arises under federal question?

Holding & Reasoning

 Yes

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  Because both Labor Management Act arose under federal law & Tennessee law claim arose from same common
nucleus of operative facts related to inability to get haul contracts due to United Mine Worker’s actions, federal
court may hear both federal & state law claim.

1367(b) Limit on Diversity Cases for Supplemental Jdx (Kroger Rule)

 If Primary claim solely based on DIVERSITY jurisdiction and second claim fails to meet complete diversity and AIC,
secondary claim cannot be heard in fed court under supplemental jurisdiction. (Destroys Diversity).
 EXCEPT: YES SUPPLEMENTAL jdx over D’s ANCILLARY CLAIMS that arise from Common Nucleus of
Operative Facts as main claim, regardless of diversity for Defendant’s ancillary claims.

 Framework for D’s ancillary claims:

1) Analyze whether there’s diversity over D’s ancillary claim, but doesn’t matter if not met
2) Whether Ancillary claim arise from CNOF?
 If yes, there’s supplemental jdx
 If no, no supplemental jdx.

Exxon Rule
 Plaintiff’s Claim has DIVERDITY Jdx + 1 Plaintiff meets Amount in Controversy, then OTHER P claims arising
under CNOF MAY be heard under Supplemental Jdx.

1367 (c): Federal Court MAY decline Supplemental Claims (4 GIBBS FACTORS)
 Fed court MAY DECLINE supplemental claims if:
o Claim w/ FEDERAL QUESTION DISMISSED EARLY in case
 Court MUST hear cases under federal question
o Claim MOSTLY about State law
 Ex: Arch tech incorporated in Oregon and PPB in Cali. Sues Corporation, incorporated in Delaware
and PPB in Oregon in fed ct for fed statute barring deceptive commercial practice and claims
$500K & also claims Corp’s conduct for unfair business practice. Judge should? Answer: Fed Ct
cannot remand claim originally filed in fed ct, so should dismiss the state law claim, but must
hear fed law claim.
o State claim about a COMPLEX ISSUE of STATE LAW
o Might CONFUSE JURY

Owen Equipment & Erection Co v Kroger

Facts
 Kroger electrocuted and died and his wife filed wrongful death against OPPD
 Kroger’s claim was based on Diversity Jdx
 OPPD added third party claim (Owen) alleging crane owned & operated by Owen
 Third day of trial, its found that Owen is from Iowa & Nebraska and Kroger is citizen of Iowa, so no diversity
Issue
 Is there diversity jdx when P asserts additional defendant of the same state?
Holding & Reasoning
 No
 No Supplement Jdx over P’s added claim against Owen b/c both of them Iowa, which destroys complete
diversity in initial claim AND P’s claim against Owen was Pendent, thus, supplement jdx does not apply to Pendent
Claims.

(UPDATED ABOVE W/ PPS: YES / WRITTEN: YES) --------------------------------------------------------------------------

Personal Jurisdiction
In Rem Jurisdiction
 Claim about who owns property  In Rem Jdx exists.

Quasi In Rem Jurisdiction:

 Shaffer: Case about property in FS + owned by Out-State Defendant  Must Satisfy Minimum Contacts from
International Shoe to have PJ over D.
 Ownership of property alone is not enough for Minimum contacts.
 Quasi: Defined as Dispute between property owners, neither of them is the true owner.

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In Personam Jurisdiction (4)
 Consent (3)
o Implied Consent Waiver
* D fails to include PJ defense in answer or motion  Waives it & consents
 Note: Subject Matter Jdx can Never be Waived!
* Waives PJ defense for refusing to give discovery or lying in discovery about PJ over D.
o Implied Consent Sanctions: D consents to PJ as a sanction for misconduct (discovery)
o Express Consent: By contract, party agrees that FS will have PJ over it or files suit in FS.

 Presence (AKA Tagging) (Burnham Rule)

o PJ exists over Defendant while present in the forum state, regardless of minimum contacts.
* Example: Mario can injure Jenny in Mississippi, but Jenny tags Mario in Florida and sues him in
Florida court for injuries suffered in Mississippi  PJ over Mario based on tagging.
o Partnerships: 1 or more Partners in FS  YES PJ over partnership based on Presence
o Corporation: Corporate Director in FS  NO PJ over director based on Presence.

NOTE: Some courts held NO PJ over D based on Presence if D is in FS by Fraud/Duress or Other Litigation.

 Domicile
o Person or corporation is always subject to PJ where they reside.
 Ex: Damage Inc incorporated and PPB in Ohio. Billy injured in Indiana by product manufactured
by Damage Inc. and sold in Indiana, but moves to Ohio and sued in Ohio. Is there PJ over Damage
Inc in Ohio?
Answer: Not under Specific jdx because no PA in Ohio, but there is General jdx over Damage Inc
in Ohio because it is domiciled (“at home”) in Ohio.

 Minimum contacts – See Rule Below

Pennoyer v Neff
Facts
o Who owned it before auction? Neff owned property and required legal services from Mitchell but didn’t pay him
o Mitchell sues Neff for legal fees but doesn’t personally serve him
o So Mitchell publishes notice in newspaper & bought Neff’s property at auction o get Mitchell’s money & sells it to
Pennoyer
Holding & Reasoning:
o Land not owned by Neff when Mitchell sued and suit was not about Neff’s land!
o Publication not enough for In personam jdx
o If state court concerns D’s personal liability, D must be brought within state’s jdx by service of process within
forum state or by voluntary appearance.
o Mitchell didn’t serve Neff in forum state nor did Neff voluntarily appear in court
o Before exercising In Rem jdx, no attachment of Neff’s property to resolve Mitchell’s claim.
o Oregon court lacked PJ

Personal jurisdiction in Federal Court

a) Serving summons or filing waiver of service establishes PJ over D:
1) Subject to general jdx in state where district court located; OR
2) If authorized by federal statute

Objection of Personal Jurisdiction 12(b)(2)

 Party’s defense for lack of personal jurisdiction MUST be raised in ANSWER or MOTION to DISMISS early in case.

Waiver of Personal jurisdiction in Fed Ct

 However, Party waives defenses from Rule 12b(2)-(5) – Including Personal Jurisdiction 12(b)(2) by a) failing to make
it by motion OR b) include it in response plead (Answer).

General v Special Appearance to Object to Personal Jurisdiction

 Special appearance – Defendant WAIVES PJ when talks about other issues unrelated PJ.
 General Appearance - If you make General appearance, you consent to PJ.

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Interlocutory Appeal of Adverse Ruling on PJ
 For Federal courts & some states  Defendant MUST wait until trial ct’s final judgment to appeal on Adverse
Personal Jurisdiction ruling.

 In some states  Immediate Appeals allowed for Personal jurisdiction.

Collateral Attack on PJ
 To raise a collateral attack, D must:
1) must fail to appear in the court where the plaintiff filed the lawsuit and
2) permit that court to enter a judgment against the defendant.
3) Then, when and if the plaintiff attempts to enforce the judgment against the defendant in another court, the
defendant can then challenge the original judgment on PJ grounds.
4) However, by failing to appear in the original action, the defendant has waived any opportunity to contest the
plaintiff’s claim on the merits.

Procedures for Challenging PJ in Fed Ct

(1) In a motion to dismiss filed at the beginning of the lawsuit [Rule 12b2];
(2) As an affirmative defense, included in an answer to plaintiff’s complaint;
(3) On appeal, but only if you preserved your objection by raising it either in your answer or in a motion to dismiss; OR
(4) Collaterally – Make no appearance in the lawsuit filed in a court that lacks PJ over you; allow a default judgment to be
entered against you; and then object to enforcement of the resulting judgment on grounds of personal jurisdiction. If you choose
this option, you waive all of your defenses on the merits; you can object to the enforcement of the judgment solely on the grounds
of PJ.

(UPDATED ABOVE W/ PPS: YES / WRITTEN: YES) -------------------------------------------------------

Old Specific Personal Jurisdiction

2 ways to show Sufficient Contacts w/ FS (International Shoe Rules)

Specific Jurisdiction
 Claim Arises out of Defendant’s Contact with forum state
 Single contact in forum state is enough.
o Example: Billy & Angel enter contract in Pennsylvania & after Angel breached contract in Pennsylvania,
Billy sued for breach in Massachusetts court. Angel only drove through Massachusetts to make delivery in
Maine. Can Billy sue Angel in Massachusetts for breach?
Answer: NO, b/c Angel’s driving in Massachusetts unrelated to subject of claim.

Note: After Int’l Shoe, Specific Jdx requires “Purposeful Availment.”

OR

General Jurisdiction
 General jdx exists over corporations if defendant had continuous and systematic contacts in any state, even if claim
doesn’t arise from D’s contact w/ forum state.
 Ex: Wal-Mart may have continuous and systematic contacts w/ numerous states where it has dozens of stores.

Note: After Daimler, General PJ ONLY applies where D is DOMICILED.

International Shoe v Washington

Issue: Did defendant have systematic & continuous contacts w/ Washington such that it doesn’t offends traditional notions of
faire play?

Facts, Holding, & Reasoning

 Yes. International Shoes hired sales agents to market in Washington & paid for sales. International’s shoes rented
hotels. Thus, International Shoe did have systematic and continuous contacts w/ Washington.

International Life Insurance

Facts
 Franklin(P), from CA, bought life insurance policy from International Insurance (D), from Texas.
 D had no offices in CA

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  P paid premiums, but D refused to pay because P committed suicide
 McGee, P’s beneficiary, sued in CA ct
Issue
 Does CA ct have PJ over Texas Co?
Holding & Reasoning:
 Yes
 CA ct had PJ over Texas Co b/c insurance K delivered to CA resident & premiums sent to CA
 Doesn’t offend due process clause of Constitution
 Witnesses re the suicide note in CA
 No burden for D to travel to CA
 Thus, CA ct has PJ over Texas Co

-------After Int’l Show, McGee, WW Volkswagon, & BK, Minimum Requirements Defined ----------

New Specific Personal Jurisdiction: Minimum Contact Requirements

Court may exercise personal jurisdiction if:

1. Facts consistent with LAS; AND
2. Claim arises from D’s contacts w/ FS for PJ to be constitutional

Long Arm Statute

 State’s Long Arm Statute must grant court PJ and satisfy Due Process Clause of 5th Amendment, as applied to States
through 14th Amendment.

California Long Arm Statutes

 Forum State may exercise jdx on any basis consistent with the U.S. Constitution or state, making LAS unnecessary.
* EX: LAS limited to torts cases, so PJ can only apply to torts cases; no other cases gets PJ.

Specific Personal Jurisdiction Requirements (3)

 Defendant must have minimum contacts w/ forum state by Purposefully Availing itself of the privileges by
conducting activities in Forum State, thus invoking benefits and protection of laws there. (World-Wide V.W. Rule)
 Claim must arise out of Defendant contacts w/ Forum State (Either of 2 Tests)
 Evidence Test: D’s contacts satisfy one or more elements of claim  Claim arises from D’s act
w/ FS.

OR

 But for Test: But for D’s contacts w/ Forum State, claim wouldn’t have arisen.

 Fairness factors must weigh in favor of PJ over D. (BK Rule)

1) Burden to Out of State Defendant (ex: Foreign Defendants) to travel to FS.
2) Forum state’s interest in hearing case
3) P’s interest in getting relief in FS
4) Efficiency of location of evidence & witnesses
5) Defendants State’s interest in furthering social policy (ex: Interest in applying their laws to their residents)
 Foreseeability Rule
o Foreseeability alone is not enough for PJ over an out of state defendant who had no contacts w/ forum state.

World Wide Volkswagon v Woodson

Facts
 P bought a volkswagon in NY & moved to Arizona next day
 Pass thru Oklahoma & got into accident
 Filed suit in Oklahoma ct in products liability against Dealer (Seaway) & Distributor (World Wide Volkswagon)
 Seaway only operated in NY & Volkswagon only operated in East Coast
Issue
 May Oklahoma ct have PJ over Co w/ no connections to forum state when their product injured a person?
Holding & Reasoning
 No

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  Only connection w/ Oklahoma was that car was driven there, but P thought it was foreseeable that the car would end up
in Oklahoma.
 Business CANNOT be sued somewhere merely because consumer brings defective product somewhere.
 Suing Seaway & WW Volkwagon not reasonable b/c:
 Ds didn’t sell in Oklahoma
 Ds didn’t advertise in Oklahoma
 Ds didn’t ship there
 Ds had no agent there
 Thus, Ds lacked MC w/ Oklahoma

Minimum Contacts: Contracts (BK Rules)

 Mere fact that D signed a contract in FS is not enough to have PJ, but must consider contract negotiations &
consequences of contract to show D’s purposeful availment.

 Choice of Law Provision

o Contract’s Choice of Law not enough for PJ

Burger King v Rudzewicz

Facts:
 Brian MacShara & Rudzewicz (Defendants) apply for Burger King franchise in Detroit.
 They negotiated w/ Burger King Corp’s (Plaintiff) Miami headquarters
 Contract Provision: “If we ever get into a fight about this, Florida law will apply.”
 MacShara attended a management course in Miami
 Rudzewicz bought 65,000 in restaurant equipment from BK in Miami.
 Both Defendants were unable to make payments to BK Corp, so BK sued them for breach of K in Florida.
Issue: Did MacShara & Rudzewicz purposefully avail itself of Florida and did the claim arise from D’s contacts with Florida?

Holding & Reasoning

 Yes
 Rudzewicz purposefully avail itself of Florida because they negotiated w/ representatives and made deal w/ corporation
in Florida
 Course that MacShara attended in Florida
 Franchise fees were paid in Florida
 Rudzewicz reasonably should’ve known that his contacts there in Florida might make it foreseeable that he would be
hailed into court in Florida
 K was signed in Florida
 Based on Reasonable factors, no burden on D because corporation domiciled in Florida. Favor PJ under forum state
interest because D is a resident of forum state. Favor PJ for P’s interest for convenience and relief in Florida because
evidence (above) exists in Florida. Favor PJ for Judicial system interest b/c evidence is located there and D domiciled
there.
 Thus, M & R purposefully availed themselves of Florida.

Minimum Contacts: Stream of Commerce

 Mere placement of a product into the stream of commerce and foresee that its product would end up in Forum State not
enough to show D’s minimum contacts w/ FS.
o 10% sales of products suggest that you know that you will be sued in forum state – NOT ENOUGH to have
PJ over D.
 O’Connor: Additional conduct needed to show D’s minimum contacts (Only one Factor needed)
1) designing product in FS
2) advertise in FS,
3) Create channels to advice customers in FS, AND
4) Market product through distributor who agreed to work as agent in FS.

Other Tests for Stream of Commerce

 Brennan: Pure Stream of Commerce
o D knows final product is sold – enough for minimum contacts.
 Stevens: Middle Ground?
o Look at volume, value of sales, hazardous product to have PJ over D.

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Asahi Metal Industry v Superior CA court
Facts
 Gary (P) injured & wife killed when crashed their motorcycle due to tire blowout
 Filed products liability claim against Chen Shin Rubber Idustrial Co in CALIFORNIA state court
 Chen filed a cross-complaint against Asahi Metal Industry, Japanese supplier (third party Defendant)
 Asahi manufactured valve assemblies in Japan
 Chen bought over 100,000 assemblies from Asahi
 CALIFORNIA accounted for 20% for their sales in US.
 Cheng alleged that they informed Asahi of these sales
 Trial court held there was PJ over b/c not unreasonable to hold an international business accountable for its sales where
it does business
Issue
Whether Asahi’s mere placement of a product in stream of commerce is enough for PJ in California?

Holding & Reasoning

 No PA in California
 Asahi’s awareness that some valves sold to Cheng would be sold as tire tubes in California DOES NOT show
purposeful availment w/ California.
 Asahi didn’t advertise in California
 Asahi didn’t have office, property, or employees in California.
 Asahi didn’t do business w/ California residents, nor designed its product under the impression that it would be sold in
California.
 Thus, Asahi did not PA itself in California
Reasonable Factors Applied:
 Not favor PJ for D’s burden b/c Asahi’s burden in traveling to defend in foreign country is severe
 Not favor PJ for FS interest b/c transaction was made in Taiwan, and Asahi’s components were shipped to Taiwan
 Not favor PJ for P’s interest b/c Chen (P) is not a resident of California
 Judicial system’s interest in getting efficient results and further of social policy does not favor PJ
 Thus, considering all factors, PJ in CA would be unreasonable & unfair

Minimum Contacts: Internet Cases (2 Tests)

2 tests to show whether Defendant’s website has minimum contacts w/ FS:
Zippo Test: Level of Interactivity Test (Jackson Rule)
 Three categories for Zippo Test:
1. Defendant’s website allows sales (interactivity) in FS  Yes Minimum Contacts w/ FS
o Buying stuff from website

2. Defendant’s website Does Not allow sales  No Minimum Contacts w/ FS

o Post a comment

3. If Defendant’s website allows Some Interactivity  Consider level of interactivity & relation btwn
Defendant, website, and FS.

Calder Effects Test (Defamation Cases)

 To determine minimum contacts, Court look at relation between Defendant, FS, and litigation
o Defamation – Flrodia publish ariticle based on CA contacts. Then defamed CA actress in CA.
Publishider cant bt subject to PJ in CA b/c

Jackson v California Newspaper Partnership

Rule
Three categories for Zippo Test:
1. Interactive websites which defendants conduct business and sales are enough for PJ
2. Passive websites that afford interest in users no interactivity is not enough for PJ
3. Interactive websites where users exchange info w/ host computer is enough for PJ.
Facts

Issue: Is creation and maintenance of website enough for PJ over defendants with no other contacts w/ state?

Holding & Reasoning: No.

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  Website directed to California residents.
 All contact numbers are 909 area cod numbers, w/ no 1-800 number options for long distance callers.
 Even though Illinois users can subscribe online, no Illinois resident subscribed to either print newspaper or free
electronic newspaper.
 Because website didn’t focus its services at Illinois residents, defendants had no reason to foresee that Illinois could
access their California website.

General Jurisdiction
 At Home Test: General jurisdiction exists over corporation where ever it has its principal place of business or
incorporation, even if claim is unrelated to defendant’s contacts in FS. (Daimler Rule)
 General jurisdiction exists over individual based on domicile, where individual intends to permanently and intends to
return whenever absent. (Daimler Rule)
 Ex: Billy, from Georgia, sued Google in Georgia state court for negligence. Google is incorporated
in Delaware and has its PPB in Illinois, and 75 stores in Georgia. If Google moves to dismiss case
based on lack of PJ, court will probably:
Answer: Grant b/c even if Google had systematic & continuous contacts in Georgia, there’s no
General PJ over Google based on domicile because Google is domiciled in Delaware and Illinois,
not Georgia. Thus, there’s no General PJ over Google in Georgia ct.

Daimler AG v Bauman
Facts: 22 Argentinian residents filed complaint in U.S. district court for the northern district of CALIFORNIA against Daimler
Chrysler Aktiengesellschaaft, a German public stock company that manufacturers Mercedes-Benz cars in Germany. Claims were
under Alien Torts Statute and Torture Victim Protection Act, and for wrongful death ad IIED. The suit alleges that Mercedez-
Benz Argentina, a Daimler subsidiary, collaborated w/ security forces to kidnap, detain, torture, and kill MBA workers, such as
plaintiffs and persons closely related to plaintiffs during the Argentinian War. MBUSA in incorporated in Delaware and PPB in
New Jersey. MBUSA distributed Daimler cars in California and had offices in California.

Issue: Whether Daimler’s contacts w/ California are enough to subject it to general jdx in California?

Holding & Reasoning:

 No.
 No specific jurisdiction because claims don’t arise from D’s contacts w/ California; instead they arise from D’s
contacts w/ Argentina.
 Defendants are not “at home” because Daimler & MBUSA are not incorporated in California, nor have PPB in
California, so no general jdx applies.
 According to distributor agreement, MBUSA an independent contractor and doesn’t act on behalf of Daimler while in
California
 10% of dales of new cars in US take place in California
 MBUSA’s California sales account for 2.4% of Daimler’s worldwide sales.

Quasi In Rem based on Minimum Contacts (Shaffner Rule)

 Shaffer held quasi in rem must satisfy minimum contacts test from International Shoe & ownership of property alone is
not enough for minimum contacts.
 Case about property in FS + owned by Out-State Defendant  Must Satisfy Minimum Contacts standard to have PJ
over D.
 Property must be attached before suit.
o Ex: Billy, from North Carolina, sues Jenny from California in North Carolina ct and asks ct to
attach a money market account that Jenny owns in state. Jenny seeks to recover funds from Jenny’s
North Carolina money market account. Assume Jenny’s account is unrelated to suit and Jenny
doesn’t have contacts w/ North Carolina. Is there PJ?
Answer: No, b/c under quasi in rem jdx, Jenny lacks enough contacts w/ North Carolina (Shaffner
Rule).

Shaffner v Heitner
Facts: Heitner (P) brought a shareholder suit in Delaware against Greyhound Corp., incorporated in Delaware, represented by
Shaffer, alleging that they violated their fiduciary duties to Greyhound related to various antitrust and criminal acts in Oregon.
Property at issue in case consisted of stock shares in Greyhound corporation owned by out-of-state directors & officers of
Greyhound. P filed motion for an sequestration of shares of Greyhound stock owned by individual defendants, who move to
dismiss case based on ex parte sequestration violated due process and property seized was not attached in Delaware.

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Issue: Whether there was sufficient contacts between forum state and out of state D’s shareholder (property) interests before court
can exercise Quasi in Rem?

Holding & Reasoning: NO. Here, property ownership was in Delaware, but sequestration wont work because property is not
owned in Delaware. Additionally, defendant’s ONLY contact with Delaware was merely accepting positions as directors of
Delaware corporation, which is not enough for purposeful availament of the benefits/privileges in Delaware & no reason to
expect to be haled into Delaware ct.

Physical Presence based on PJ(Burnham Rule)

General PJ exists over out of state Defendant who is properly served while present in forum state.

Burnham v Superior Court

Facts: Dennis Burnham (P) & Francie Burnham were married from 1976-1987, at which they separated. He filed divorce case
against her in New Jersey but never serves her. She’s in Southern California. He vi
Issue
Holding & Reasoning

Rule 4(k)(1)(A)
 Federal court have PJ over D subject to the state’s general jdx where the district court is located.
o Exception: Federal courts may exercise broader PJ if court allowed to under federal statute
 Ex: Fed R. Bank provides nationwide PJ in bankruptcy cases.
(UPDATED ABOVE W/ PPS: YES / WRITTEN: YES) -------------------------

SERVICE OF PROCESS

Due Process Requirements for Service of Process

 Notice must be reasonably calculated to notify parties of pending litigation and give them a chance to object. (Mullane
Rule)
 Nonexclusive Factors:
1. How effective is method?
2. Any other methods available?
3. How effective or expensive are the other methods?
4. What type of interest is at stake?
Generalizations from Mullane
 Known names and addresses + Large Deprivation  At Least Service by Mail is Adequate Notice
 Unknown names and addresses + Small Deprivation  Mail may not be needed, so Publication might be adequate
 Actual Notice OR No Actual Notice may be relevant but not enough for Adequate notice

Note: Notice of Publication does not satisfy due process for beneficiaries if there’s a better method of service available.

Mullane v Central Hanover Bank & Trust

Facts:
 Central Hanover Bank & Trust Co (Defendant) created a common trust fund, which pools many small trusts into one
large fund for easier administration.
 During accounting period, 113 trusts joined common trust fund
 Bank & Trust petitioned court for settlement of its first account as trustee
 Beneficiaries given notice by publication in newspaper complying w/ NY bank law
 Notice laid out names and addresses of the trust company & list of each participating estate, trusts, funds.
 Mullane (Plaintiff) appointed by court as guardian of beneficiaries of trust who didn’t show up to reply to notice
& argued notice inadequate.
Issue: Whether publication in local newspaper is sufficient notice of pending account settlement to beneficiaries of trust?

Holding & Reasoning:

 No.
 Because proceedings may deprive beneficiaries of property rights, notice & and hearing must be given to satisfy due
process.
 Notice of publication doesn’t satisfy due process where beneficiaries addresses & interests are known to trustee
 Because NY bank law allowed notice of publication in newspaper to parties whose addresses and interest were
known to trustees, it doesn’t comply w/ 14th Amendment’s due process.

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  Thus, Notice of publication would not satisfy due process for beneficiaries because better method of notice was
available.

Examples of Adequate Notice

 In hand service (personal delivery) of summons & complaint to D by Sheriff
 Mailing summons & complaint to D at his home by certified or first class mail
Not Examples of Adequate Notice
 Publication of notice in newspaper
 Posting of notice on bulletin board

Who, When, or What?

What?
 Under Federal Rule 4(c)(1), complaint and summons must be served together on Defendant
o Complaint: Plaintiff initial pleading listing claims
o Summons: Court order commanding Defendant to appear in court

Who serves process on Defendant?

 Rule 4(c)(1): Plaintiff cannot serve Defendant; instead person of 18 years of age and not party to case, such as
 Generally Private Process Server
 Plaintiff lawyer
 Sheriff

When must service be made?

 After complaint is filed.
o Rule 4(m): Defendant must be served within 120 days after filing complaint.

FRCP 4(e)(2) – Proper Methods for Serving Natural Persons

Unless federal law says otherwise, individual may be served in the following ways:
 Personal delivery to person (In-hand service)
 Leave summons & complaint at Defendant’s dwelling or usual place of abode with someone of suitable age AND
RESIDES THERE
o Ex: Billy sues Angel & Harold, two unrelated individuals. Billy serves process by delivering summons and
complaint to Angel at his home.
Answer: Service of Process was proper for Angel at his usual place of abode, but not okay for Harold, who
should’ve been served separately.
o Ex: Billy serves Jenny by having process server leave summons & complaint at his house w/ Coral, a friend,
who is in town for a convention.
Answer: Service of process not property b/c Coral doesn’t seem to live there if she is only there for a
convention.
 Deliver summons and complaint to Defendant’s Agent authorized by appointment or law

Serving Corporations and Associations

 Delivering copy of summons and complaint to officer, managing agent, or general agent, or any other agent authorized
by appointment or law.
o Ex: Your firm brings federal claim against City of Denver. What’s the service of process?
Answer: Deliver copy of summons & complaint to executive officer of Federal Small Business
Administration or City’s executive officer.
o Ex: Your firm brings federal claim against Penny Wright firm. What’s the service of process? Answer:
Deliver papers to agent authorized by appointment by firm or deliver it to managing agent of the firm.

Proper Service under State Law

 Service of process is okay if method authorized by state law where district is located or where service is made. (Hukill
Rule)

Hukill v Oklahoma Native American Domestic Violence Coalition

Facts
 Sheree Hukill (Plaintiff) sued Oklahoma Native American Domestic Violence Coalition, its executive director,
Musgrove, and other defendants in Oklahoma for laying her off.

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  Defendants didn’t authorize their lawyer to accept process, so Hukill served defendants under Rule 4, which allows
service authorized by state law.
 Oklahoma allows service by certified mail if delivery is restricted to addressee.
 Only Mail to Murgrove was marked “restricted delivery”, but were still mailed to Vollintine who was not
authorized to accept service.

Issue: When service of process is made pursuant to FRCP Rule 4 allowing service by any method authorized by state law, will
service be held invalid for failure to comply w/ state statutory procedures?

Holding & Reasoning:

 No.
 Oklahoma allows service by certified mail, return receipt and delivery restricted to the addressee. Oklahoma allows
acceptance or refusal of service by someone of at least 15 who lives in D’s home, and for corporation, acceptance and
refusal of service by officer or employee of registered office or PPB who is authorized to get mail for corporation.
 Here, though marked “restricted delivery” for Musgrove, it was not delivered to her house and not received by person
who lived there.
 For Spirits, mailing was not marked “restricted to addressee” and not accepted by officer or EE who was authorized by
company. D argue that P should’ve known or knew that Vollintine wasn’t working for them.
 Even if D’s had actual notice of litigation, Hukill didn’t comply w/ statutory requirements of the state’s law for
service.

Procedure for Waiver of Service of Process in Federal court Rule 4(d)

 Plaintiff mails summons and complaint to Defendant and Defendant signs waiver & mails back
 Defendant refuses to waive service and has not good cause  Defendant is required to pay costs of service and cost of
bringing motion
 Defendant refuses to waive service  Defendant not served.

4(d)(1) – Waiver of Service

 Plaintiff may notify and request Defendant to waive summons

How much time TO Return Waiver for Notice & Request?

 In State D: At least 30 days after request.
 Out-State D: At least 60 days after request

How much time IF Timely Returns Waiver?

 Before D served  Timely returns waiver  In State Defendant not required to answer complaint till 60 days after
request, while Out State Defendant not required to answer till 90 days after request.

Service of Process Framework in Federal Ct

1. Is method of service under Rule 4?
2. Is method of service allowed under state law where district court sits or where D served?
3. If authorize by statute, does method of service comply Due Process?

Effect of Service on Statute of Limitations

 Federal ct: Statute of Limitations stops running when complaint filed, but defendant must be served w/ complaint
within 90days.

 State ct: Many states, statute of limits keeps running.

UPDATED ABOVE: YES / WRITTEN: YES) -----------------------------------------------------------

VENUE
Venue refers to specific court within a court system where plaintiff can file suit.
 Ex: Within a federal court system  there are federal districts that covers certain geographic area.

1391(b): Federal Venue Statute

Venue is proper in district:
1. Where any Defendant resides if all Defendants (or Defendant) reside in same state too.

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 o Ex: Billy, Connecticut resident, sues Angel, resident of Albany, New York (in Northern District of NY) and
Martha, resident of Buffalo, New York (in Western District of NY), in federal court. Where is venue proper
in this case?
Answer: Venue is proper in Western District of NY and Northern District of NY because both defendants
reside in the same state of New York.
Note: If not (1)  go to (2).
2. Where substantial event gave rise to the claim that occurred there (Uffner Rule); OR
o Ex: Angel’s car accident occurred in Manhattan, New York, located in Southern District of New York. Angel
sues Billy in federal ct. Which district is venue proper?
Answer: Because a substantial part of the car accident occurred in Southern District of NY, venue is proper
in Southern District of NY.
NOTE: If 1 and 2 not met, go to step 3.

3. (1) & (2) don’t apply  case may be brought where any Defendant is subject to Personal Jdx

Uffner v La Reunion Francaise

Facts
 Uffner took out insurance policy on yacht
 Policy issued by La Reunion Fracais, French insurer & underwritten by TL Dallas, an English underwriter, and Sharffer
Inc, Georgia underwriter (Defendants)
 Yacht caught fire & sank near Puerto Rico & D denied Uffner’s claim b/c no current out of water survey.
 Filed suit in US district ct for District of Puerto Rico for bad faith denial of insurance claim

Issue
 Must federal district ct dismiss claim for improper venue b/c single event gave rise to claim outside of district?
Holding & Reasoning
 No
 Because the boat sank off coast of Puerto Rico, Uffner filed a claim with Ds for his losses, which means that the
sinking of the boat was substantial that gave rise to the claim that the boat was not covered by insurance.
 Thus, Puerto is a proper venue because substantial part of the event gave rise to claim there.

Mandatory Transfer of Venue under Sec. 1406(a)

 Under 1406 (a), Statute allows federal court to dismiss case or if in interest of justice, transfer it to any district where
could’ve been brought
o Note: case may be transferred in interest of justice to avoid time & expense of refiling claim.

2 Step Discretionary Transfer of Venue under Sec. 1404(a) (MacMunn Rule)

Step 1: Party requesting a transfer must show that:

(1) The plaintiff could have filed the case in the transferee forum OR all parties consent to transfer; AND
(2) The transferee forum is a more convenient forum than district where case filed (based on location of witnesses, evidence,
etc.); OR party requesting transfer suffers prejudice if not transferred.

Step 2: Now balance of private & public concerns under Forum Non-Convenience

Private Interest of Litigant

 Difficulty of getting evidence
 Witnesses forced to appear
 Cost of getting witnesses
 P’s Convenience
 D’s Burden
 Connection between cause of action and forum state

Public Interest of State & Court

 Forum state requires application of federal law?
 Forum state has more cases (crowded docket)?
 Closer connection to case?

MacMunn v Eli Lilly Co

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Facts
 MacMunn (P), Massachusetts resident, claimed to suffer uterine, cervical deformities, physical, & mental pain due to
exposure to Diethylstibestrol (DES) in utero.
 Witnesses & evidence is in Massachusetts
 Sued Eli Lilly & Co (D) manufacturer of DES in District of Columbia for negligence, strict liability, breach of
warranty, misrepresentation, and loss of consortium.
 D moved to transfer case from US District ct of D.C. to US District Ct of Massachusetts
Issue
 When P brought claim before venue transfer by D, may ct transfer case to another venue?
Holding & Reasoning
 Yes
 Private factors weigh in favor of transfer:
o Ease of access to proof - P and witnesses (P’s mother, doctors, pharmacists) and evidence are located in
Massachusetts, medical records regarding P’s pregnancy in Massachusetts, physicians who prescribed mother
lives in Massachusetts, and medical records related to injuries resulting from DES is in Massachusetts.
o P’s choice of forum – P resides in Massachusetts
o Where claim arose or connection between FS & COA – cause of action occurred in Massachusetts
o Thus, private factors weigh in favor of transfer.
 Public factors weigh in favor of transfer
o Transferee court required to apply law of another state/country – D.C choice of law require application of
Massachusetts law & courts favor FS whose law controls
o Court with closer connection to case has greater interest – P’s mom ingested DES in Massachusetts, suffered
illness effects there and all individuals currently reside in Massachusetts
o More crowded docket – D.C. has more crowded docket than District of Massachusetts
 Thus, because both public & private factors favor transfer, D’s motion to transfer to Massachusetts granted.

Piper Aircraft v Reyno

Facts
 Small commercial aircraft crashed in Scotland, killing pilot & five passengers from Scotland
 Plane manufactured in Pennsylvania by Piper & propellers were manufactured in Ohio
 Reyno (P), administratrix of five killed, filed wrongful death claim against Piper & Hartzell in California, alleging
negligence & strict liability.
 D wanted to transfer case to Middle District of Pennsylvania
 Ds wanted to dismiss case based on forum non convenience
Issue
 May P defeat motion to dismiss based on forum non convenience by showing that the substantive law is less favorable
to Ps than present forum?
Holding & Reasoning
 NO
 Private Factors:
o Ease of access to proof - Even though design, manufacturer, & testing of plane in U.S., large portion of the
relevant evidence is in Great Britain
o D’s inability to implead a third party supports Scotland
o Claim arose/ Connection between FS & action – D can show accident was caused by negligence of pilot,
plane’s owners, or charter co.
 Public factors
o Transferee ct required to apply law of another state? If case tried in Pennsylvania, Pennsylvania law applies
to Piper (D) nd Scottish law to Hartzell (D), which means two types of laws will confuse jury.
o Court with more crowded docket?
o Ct w/ closer connection to case to case? Accident occurred in airspace in Scotland, decedents from Scotland,
and all Ps and Ds either from Scottish & English.
o Thus, both pubic & private factors weigh in favor of Scotland.

Procedures for Challenging Improper Venue in Federal Court

 (1) In a motion to dismiss filed at the beginning of the lawsuit;

 (2) As an affirmative defense, included in an answer to plaintiff’s complaint;
 (3) On appeal, but only if you preserved your objection by raising it either in your answer or in a motion to dismiss; OR

16
  (4) Via a motion to transfer venue, often filed together with a motion to dismiss based on improper venue [28 USC §
1406(a)], or filed after answering the complaint (assuming you have preserved your objection to venue via an
affirmative defense).

Venue: Residency: 1391(c)

 Person or permanent resident resides in district where domiciled.

Venue Residency: Corporation

 Corporation resides in any district of state where has sufficient contacts to subject to PJ & if not district, corporation
resides in district where has most contacts.

(UPDATED ABOVE: YES / WRITTEN: YES) ---------------------------------------------------------

THE ERIE DOCTRINE: WHAT LAW DO FEDERAL COURTS APPLY IN DIVERSITY

CASES?

Two Types of Choice of Law Questions

 Vertical Choice of Law
* Should federal court apply federal or state law in diversity case?
 Horizontal Choice of Law
* Which state’s substantive law should court apply?

How does Vertical Choice of Law?

 10th amendment: any powers not given to federal government go to states or people  Feds must apply state law
 However, if federal or state has power  any federal law trumps state law.
 Rules of Decision Act:
o Fed courts MAY follow state law (law of several states) when Congress lacks power to legislate in certain
area (RDA) or doesn’t have authority to legislate in certain area (10th Amendment).
 Smith v Tyson Rule (100 years ago)
o State common law is not the law of several states, so federal court MAY follow fed common law instead of
the state law (i.e. Federal court is free to apply federal common law)
o i.e. When state court says something  federal judges can ignore it
 Ex: Black & White Taxicab

Federal Common Law in Diversity Case (Rule of Black & White Taxicab)
 When State common law is not part of the law of the several states  Rules of Decision Act requires a federal court to
apply in a diversity case
 Federal court is free to apply federal common law instead.

Black & White Taxicab & Transfer Co. v Brown & Yellow Taxicab & Transfers co
Facts
 Respondent (Brown & Yellow Taxicab) is a Tennessee corporation
 Petitioner is a Kentucky corporation in competition with respondent
 Railroad co is Kentucky corporation
 Kentucky common law struck the contracts between them to avoid competition.
 Brown & Yellow launched itself into federal court
 Federal ct said people should be free to enter Ks with anyone, despite competition.
Issue
 Must federal court sitting in diversity apply state common law?
Holding & Reasoning
 NO
 While federal court sees state rulings as persuasive authority on application of common law rules, federal court are not
required to follow state law.
 Kentucky courts hold exclusive railroad agreement between Brown & Railroad is void against public policy
(McConnel) b/c creates monopolies and prevents competition. Indiana and Missi. Cts agreed
 However, Supreme Ct and many other cts viewed K valid such that railroad companies should be allowed to
enter Ks
 Kentucky precedent against general common law b/c public policy favors freedom to contract

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  Thus, Railroad had right to enter into railroad agreement with Brown, even if Brown at an advantage + no bar
of competition

Absence of Federal Statute in Diversity Case

 In the absence of contrary federal statute or contrary provision in the U.S. Constitution, federal courts must follow “the
law of the several states” in diversity case, with state law defined to include state common law.
o Swift Defects
 Misinterpreted RDA
 Didn’t create expected uniformity (States should apply proper common law)
 Created forum shopping (encouraged one company to be subject to state and another subject to fed
law)
 Unconstitutional (federal courts exploited state courts)

Erie Railroad Co v Tompkins

Facts
 Harry Tompkins, Pennsylvania citizen, injured by train owned by Erie Railroad Co, while walking railroad tracks
 Sued Erie, NY company, for negligence in NY federal court
 Erie argued Tompkins was a trespasser and under Pennsylvania law, not liable unless conduct wantonly negligent
 Tompkins argued federal general law should apply
 Trial court ruled in favor of Tompkins such that according to Swift v Tyson, federal court had discretion to apply state
law
Issue
 Must a federal court sitting in diversity apply state common law?
Holding & Reasoning
 YES
 Swift decision was controversial with judicial defects that resulted in uncertainty for plaintiffs and defendants, which
resulted in discrimination and unequal treatment under the law, didn’t create expected uniformity, and was
unconstitutional.
 To avoid injustice and discrimination, state law should be applied in diversity cases, regardless if law is made by
courts
 Federal court exercising diversity jdx must enforce state law & refusing to apply state law in general matters is
unconstitutional
 Federal courts is not given power to create “general federal common law” b/c undermines autonomous power of
state cts.
 Swift overturned.

Klaxon Co. v Stentor Electric Manufacturing Co

Facts
 Stentor Electric Manufacturing (Stentor -P) New York Corp entered agreement w/ Klaxon Co (D), Delaware
corporation, which Stentor would transfer its business in certain patent devices to Klaxon in exchange for their profits.
 Agreement substantially performed in New York
 1929 – Stentor sued D in federal court in Delaware for breach of K on diversity of citizenship
 1939 – Stentor awarded $100,000 after trial
 Stentor moved to have interest added to award from date that case commenced to date of judgment pursuant to New
York Civil Practice 480.
 Delaware court applied New York law b/c Stentor’s motion was based on New York Law
Issue
 Where jurisdiction is based on diversity, must federal court apply conflict of laws rules of state in which it sits?
Holding & Reasoning
 YES
 According to Erie, to allow federal courts in this case to apply their own conflict of law rule would go against equal
application of laws between state and federal court on a diversity case in same state.
 States are allowed to apply their own local interests by having right to make rules for conflicts of laws, which
means that federal courts cannot take over by applying their own rules of conflicts
 Here, Delaware district ct hearing the diversity case should apply Delaware’s rules for conflicts of laws b/c they
should have right to choose rules of conflict law that applies in their forum state
 Thus, case remanded to Delaware’s state court to apply their conflict rules.

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United States v Standard Oil Co. of California
Facts
 John Etzel, US soldier, injured by Standard Oil Co of California (Standard – D) truck driven by Employee
 United States (P) paid Etzel’s medical expenses and wages while he was disabled
 D & Boone paid Etzel $300 to release all his claims against them
 Government sued D to recover expenses related to Etzel’s injuries and interference w/ government-soldier relation w/
Etzel
 Appellate court said that state rules of substantive common law control claim brought by US on behalf of a private
litigant
Issue
 Does Erie abolish federal common law?
Holding & Reasoning
 NO
 Federal common law not abolished by Erie in cases strictly related to federal authority
 Cts look at federal policies and governmental interest at stake that apply
 Here, government-soldier relation is uniquely federal, so power protect relationship falls under federal law and
government’s authority over military and other matters
 Government has federal authority to protect itself from financial/other harm
 Federal issues like this are proper for uniform national treatment on whether or not Congress has acted, so
federal law applies
 Issue on whether national financial and regulatory policies should be advanced by executive branch should be
decided by Congress
 Thus, UNITED STATES has power to make D liable, but authority over federal issued involving the
government should be exercised by Congress.

How does a federal court determine the content of state law?

 If there is no state law (statute, regulation, or state supreme court opinion) directly on point, the federal court must
make an “Erie guess.”
 The goal is to predict what the state’s highest court would say on the subject by looking at the trends in that court, what
the lower courts in that state have said, etc.
 In some cases, a court will certify the question to the state’s highest court.

Is the rule a “form or method of enforcing a right” or does the rule create a substantive right? (Guaranty Trust Rule)
o Substantive rights: State law applies
o Form or method of enforcing a right:
 Federal courts create (and follow) their own rules in general, but may have to follow the state rule
if the rule would be outcome determinative (although the court may also have to consider/balance
special federal interests, such as 7th Amendment right to jury).

Guaranty Trust Co. of New York v. York

Facts
 York (P) sued in federal ct in New York on behalf of class of persons damaged by Guaranty Trust (D) for breach of
trust.
 Suit based on diversity, but as class action sought remedy on “equity side” of federal court
 Guaranty argued that York’s suit was barred by New York statute of limitations
 York argued since action was “in equity,” federal court not bound by statute of limitations

Issue
 Must a federal court, exercising jdx based on diversity, follow the state’s rules that would be outcome determinative if
held in state court?
Holding & Reasoning
 YES
 Courts do not have to ask whether statute of limitations is under procedural or substantive law b/c of unequal treatment
of parties in similar situations
 Because Outcome of both parties’ case depended on whether party was in state or federal court, court should
consider the outcome of litigation
 If applying federal law results in substantially different outcome  court should apply state law
 Because federal law provides remedy while New York law bars the suit, court to apply state law
 Thus, trial court’s decision reversed.

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Hanna v Plumer
Facts
 Hanna (P), Ohio resident, got in car accident w/ Plumer (D), Massachusetts resident, & Plumer died
 Hanna sued in federal court the estate of Plumer for personal injuries
 Hanna served Plumer’s executor w/ complaint & summons at his residence w/ someone of suitable age
 Hanna’s practice according w/ Federal Rules of Civil Pro 4(d)(1)
 However, Massachusetts state law required executors to serve in person, so Plumer’s estate argued Hanna
didn’t properly serve & argued state law should apply; not FRCP

Issue
 Is FRCP 4(e)(2)(B) the proper standard for service of process in a federal diversity case when it doesn’t violate the
constitution?
Holding & Reasoning
 YES
 Erie with an outcome determinative test is not a strict standard; instead when there’s conflict between federal
law and state law, FEDERAL LAW WILL APPLY.
 Thus, federal court should apply federal procedural law.
 Reversed.

(UPDATED ABOVE: PENDING : WRITTEN: YES)-----------------------------------------------------------------------------

Modern Pleading and the Complaint

Doe v Smith
Facts
 Jane Doe (P) filed complaint in Central District of Illinois, alleging that Jason Smith (D) secretly videotaped two of
them having sex
 Doe stated that she didn’t know or consented to being filmed and said that Smith later shared video w/ other students in
his high school
 Doe sued under federal question, arguing that Smith violated federal wiretapping statute
 Doe said that statute states that anyone whose “wire, oral, or electronic communication is intercepted, disclosed, or
intentionally used” & Smith intentionally disclosed film in violation of statute
 However, didn’t allege video recording was an interception
 Additionally, Doe filed state law claims for eavesdropping, IIED, invasion of privacy, and battery under supplemental
jdx
 Smith filed Rule 12(b)(6) motion under FRCP for failure to state a claim
 Lower court dismissed Doe’s suit b/c complaint didn’t mention that Smith’s recording was an interception
covered under wiretapping statute.
Issue
 (1) Whether Doe can show, without contradicting any of complaint’s allegations, that Smith captured “wire, oral, or
electronic communication?
 (2) Whether Smith intercepted oral communication?
Holding & Reasoning
 YES
 Rule 8(a) of FRCP got rid of code pleading, which required Plaintiff to state and plead every element of the legal
theory asserted
 Rule 8 only required that plaintiff’s claim entitles him to relief, regardless if claim doesn’t state necessary facts and
legal theories, which may be proven later in litigation
 (1) Doe makes a claim of the wiretapping statute that applies to anyone who “intentionally intercepts … any
wire, oral, or electronic communication and intentionally discloses its contents
 Here, Doe may be able to show that recording was a sound track that she had an expectation of privacy
 Even though this silent filming would not include electronic communication, most video recorders capture sound
tracks.
 (2) If interception was wrongful, then the disclosure is prohibited by the statute.
 Further, while consent is a defense and Smith consented, Doe may be able to prove the recording was made for
the purpose of committing a crime or tort, which may be proven if Doe succeeds on her claims

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Leatherman v Tarrant County Narcotics Intelligence & Coordination Unit
Facts
 Charlene Leatherman (P) sued Tarrant County Narcotics Intelligence and Coordination Unit (D), alleging violations of
her civil rights during execution of search warrant at her home, violating Sec. 1983 and Fourth Amendment.
 Leatherman alleged officer’s conduct of shooting and killing Leatherman’s 2 dogs was evidence that officers were not
trained properly, thus incurring municipal liability
 Northern District of Texas dismissed her complaint b/c pleading didn’t meet heightened requirement by Fifth Circuit
case law
Issue
 May a trial court require heightened pleading beyond the requirements of Rule 8(a)(2)?
Holding & Reasoning
 NO
 Plaintiff not required to state detailed facts in his allegations; rather file a claim that entitles relief to plaintiff that
provides info putting defendant on notice of charges against him.
 Here, Fifth Circuit imposed a heightened pleading requirement, that required Plaintiff to plead
additional/detailed facts that’s not normally required under Rule 8 (a)(2) to survive a motion to dismiss
 D argued that case law (Elliot v Perez) says that heightened pleading states that plaintiff alleging Sec. 1983
violation to hold municipality liable must plead additional facts with particularity.
 P argued Federal Rules of Civ. Pro Rule 8(a) doesn’t require Plaintiff to mention detailed facts in his claim;
instead merely requires short and plain statement that gives Defendant notice of charges against him.
 Because Federal Rules of Civ. Pro 8(a) did require heightened pleading in complaints about municipal liability,
with exception of fraud and mistake cases, Fifth Circuit cannot require heightened standard for Sec. 1983
pleadings

Ashcroft v Iqbal
Facts
 Javaid Iqbal (P) was arrested and detained during investigation of September 11 2001 terrorist attacks
 Iqbal claimed conditions of custody violated First and Fifth Amendments and sued former US Attorney General John
Ashcroft, Mueller, and other officials
 Held in detention for a long time
 Complaint accused both for discriminatory policy of confining individuals in harsh conditions based on religion, race,
and/or national origin.
 Ashcroft and Mueller moved to dismiss Iqbal’s complaint for failure to stat a claim
Issue
 Under Twombly, will complaint survive motion to dismiss if facts are conclusory?
Holding & Reasoning
 NO
 Plausible claims under Twombly means that facts alleged allow reasonable inference that Defendant is liable.
 Complaint with plausible claim survives motion to dismiss and plausibility to be determined by judicial experience and
common sense.
 Even if facts must be taken as true, court not required to accept conclusory statements
 Here, Respondent plead petitioners knew, condoned, willfully subject to harsh conditions based on religion,
race, etc and that Ashcroft was principal architect and Mueller was instrumental were merely a recitations of
the elements of a discrimination claim that they adopted a policy, thus these allegations were conclusory and not
taken as true.
 Moreover, complaint also alleged that FBI arrested thousand of Arab Muslim men as part of investigation of
September 11, which is consistent w/ allegations of discrimination in Iqbal’s claim, but there were other
alternative explanations, such that the policy for arrests was made b/c of suspected links to attacks that may
cause an impact on Arab Muslims or to detain illegal aliens, thus discrimination is not a plausible conclusion.

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Answering the Complaint & Motions to Dismiss
(UPDATED ABOVE: PENDING / WRITTEN: YES / CASES BRIEFED: YES) -------------------------------------------------

Sanctions
(UPDATED ABOVE: PENDING / WRITTEN: YES / CASES BRIEFED: YES) -------------------------------------------------

Amending the Pleadings

UPDATED ABOVE: PENDING / WRITTEN: NO / CASES BRIEFED: YES) ----------------------------------------------------

Joinder of Claims and Parties

UPDATED ABOVE: PENDING / WRITTEN: NO / CASES BRIEFED: YES) ------------------------------------

Complex Joinder: Intervention, Interpleader & Required Parties

Required Joinder of Parties – Rule 19 (a)(1)

1. A required party or Person required to be joined if feasible is subject to service of process and whose
joinder will not deprive the court of SMJ must be joined as a party if:
a) Court cannot give complete relief to existing parties in person’s (PJF) absence; OR
b) PJF has an interest in suit that he or she needs to protect by being a party to suit; OR
c) PJF will be prejudiced if PJF is not made a party to suit
2. If a), or b), or c) is YES, then Person required to be joined if feasible must be joined as long as required
party is subject to PERSONAL JURISDICTION in forum state AND adding person will not destroy
SUBJECT MATTER JURISDICTION.
3. Joinder is Not Feasible under Rule 19(b): If a person required to be joined if feasible cannot be joined, the
court must determine whether in equity and good conscience, the case should proceed with existing parties
or should be dismissed. Factors considered in determining whether to dismiss the case or go forward
without required party.
 Extent that judgment rendered might prejudice missing or existing parties
 Extent that prejudice can be reduced or avoided by the court by: a) protective provisions in
judgment, b) shaping relief, or c) other measures
 Whether judgment rendered would be adequate in person’s absence
 Whether plaintiff would have an adequate remedy if the case is dismissed

Motion to Dismiss for Failure to Join – Rule 12(b)(7)

 A party may assert motion for failure to join party by a) motion or b) including an affirmative defense in
Answer

Interventions
Intervene as a Right 24(a) – Factor test
 A non-party can intervene as a right if:
o Application must be timely
o Intervenor must have a substantial legal interest about the subject of the case
o Resolution of case may impair or impede intervenor’s ability to protect interest
o Intervenor’s interest cannot already be adequately represented by existing parties.

Permissive Intervention Rule 24 (b) – Factor test

 A non-party is permitted to intervene if:
o Application must be timely
o Intervenor’s claim or defense must share a common question of law or fact with main claim
o Intervention cannot unduly delay or prejudice adjudication of original parties rights
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Interpleaders: Venue, Personal Jurisdiction, Subject Matter Jurisdiction
Interpleader – Venue (Sec 1397)
 Any civil action of interpleader or in nature of interpleader may be brought in district court where one or
more claimants reside

Interpleader – Personal Jurisdiction Rule 4(k)(1)(c)

 Service of summons is effective to establish jurisdiction over Defendant whose subject to federal
interpleader jurisdiction under 28 Section 1335

Interpleader – Subject Matter Jurisdiction (1335 (a)(1)

 Subject Matter Jdx exists in an interpleader action if:
1. Minimal Diversity: Two or more adverse claimants are completely diversed; AND
2. Claiming or may claim to be entitled to money or property worth $500 or more; AND
3. Plaintiff deposited money or property into the court’s registry, there to abide to court’s judgment
or given bond.

Statutory Interpleaders
Statutory Interpleader – Power to Enjoin Other Suits (Section 2361)
 In a statutory interpleader, court may issue its process for all claimants and enter order restraining them
from instituting or prosecuting any proceeding in any state or U.S. court affecting property in interpleader
case

Interpleader – Double or Multiple Liability (Rule 22(a))

1. Claims that subject plaintiff to double or multiple liability may be joined as defendants and required to
interplead, even if a) claim lack a common origin or not identical or plaintiff denies liability in whole or
partly to claims
2. Defendant subject to double or multiple liability may seek interpleader through crossclaims or counter
claims

Interpleader – Relation to Statutory Interpleader (Rule 22(a)(2)(b)

 Remedy this rule provides is in addition to and does not supersede or limit remedy stated by 28 Section
1335, 1397, and 2361.

(UPDATED ABOVE: YES / WRITTEN: YES) ------------------------------------------------------------------------

Class Actions

(UPDATED ABOVE: NO / WRITTEN: YES) --------------------------------------------------------------------------

Dismissals and Summary Judgment

 Casebook, 711-28 (Class Actions); 1003-43 (Dismissals & SJ); E&E, pp. 473-93 (Comparison of MSJ and
Motion to Dismiss);
o Optional – Glannon Multiple Choice, pp. 403-24 (Comparison of MSJ and Motion to Dismiss); CALI
Lesson: Summary Judgment.

Week 13: Motions for Judgment as a Matter of Law; Appellate Review

In-class quiz 8: Class Actions and Summary Judgment

 Casebook, pp. 1079-1108 (JML); 1169-1214 (Appeals); E&E, pp. 495-537 (JML Motions);
o Optional – Glannon Multiple Choice, pp. 425-45 (JML Motions); CALI Lesson: Judgments as a Matter
of Law.

Week 14: Claim Preclusion & Issue Preclusion

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  Casebook, pp. 1215-30, 1241-47 (Claim Preclusion) [skip Section IV – Non-Party Preclusion]; 1249-88,
1292 (Issue Preclusion) [Skip Section V – Intersystem Preclusion]; E&E, pp. 541-612 (Claim and Issue
Preclusion);
o Optional – Glannon Multiple Choice, pp. 469-88 (Claim Preclusion), 489-510 (Issue Preclusion); CALI
Lesson: Preclusion.

NOTE: SMJ AND PJ NOT TESTED ON ESSAY FOR FINAL.

Final Exam: Wednesday, December 5; 2:00 PM – 5:00 PM; Location TBD.

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