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Louisiana Civil Procedure Outline

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Civ Pro

Louisiana Civil Procedure Outline

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ohmstedeabby

Авторское право

Доступные форматы

Скачать в формате PDF, TXT или читать онлайн в Scribd

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CIVIL PROCEDURE—FEDERAL

TABLE OF CONTENTS

I. INTRODUCTION �� 21
A. PERSONAL JURISDICTION �� 21
B. SUBJECT MATTER JURISDICTION �� 21
1. Diversity of Citizenship Jurisdiction �� 21
2. Federal Question Jurisdiction �� 21
3. Removal Jurisdiction �� 21
4. Supplemental Jurisdiction �� 21
C. VENUE ��22
D. DISCOVERY ��22
E. MULTIPLE PARTIES ��22
II. PERSONAL JURISDICTION ��22
A. OVERVIEW ��22
1. Limitations on Personal Jurisdiction ��22
a. Statutory Limitations ��22
b. Constitutional Limitations ��22
c. Personal Jurisdiction in Federal Courts ��23
2. Three Types of Personal Jurisdiction ��23
a. In Personam Jurisdiction ��23
b. In Rem Jurisdiction ��23
c. Quasi In Rem Jurisdiction ��24
1) Defendant Is Not Bound Personally ��24
B. STATUTORY LIMITATIONS ON IN PERSONAM JURISDICTION ��24
1. Physical Presence at Time of Personal Service ��24
2. State Law Exceptions to Traditional Rule ��24
a. Service by Fraud or Force Invalid ��25
b. Immunity of Parties and Witnesses ��25
3. Domicile ��25
a. Defined ��25
b. Citizenship ��25
4. Consent ��25
a. Express Consent ��26
1) By Contract ��26

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CIVIL PROCEDURE—FEDERAL

2) Appointment Required by State to Do Business ��26

b. Implied Consent ��26
c. Voluntary Appearance ��26
5. Long Arm Statutes ��26
a. Unlimited Long Arm Statutes �� 27
b. Limited (or Specific) Long Arm Statutes �� 27
1) Limitations in Tort Cases �� 27
2) Limitations in Contract Cases �� 27
3) Limitations in Property Actions �� 27
4) Limitations in Marital Dissolution Cases �� 27
C. CONSTITUTIONAL LIMITATIONS ON IN PERSONAM JURISDICTION ��28
1. Sufficient Contacts with the Forum ��28
a. Traditional Rule: Physical Power ��28
b. Modern Due Process Standard: Contact, Relatedness,
and Fairness ��28
1) Contact ��28
a) Purposeful Availment ��28
(1) “Stream of Commerce” Cases �� 30
(2) Internet Cases �� 31
b) Foreseeability �� 31
2) Relatedness of Claim to Contact ��32
a) Claim Arising from Activity in the State
(Specific Jurisdiction) ��32
b) Claim Not Arising from Activity in the State
(General Jurisdiction) ��33
(1) Registration to Do Business in a State ��33
(2) “At Home” in the State ��33
3) Fairness ��34
a) Convenience ��34
b) Forum State’s Interest ��34
c) Other Factors ��35
2. Notice ��35
a. Traditional Methods of Personal Service Satisfy Due
Process Notice Requirements ��35
b. Requirement that Agent Notify Defendant ��36
c. Requirements for Cases Involving Multiple Parties or
Unknown Parties ��36
d. Knowledge that Notice by Mail Was Not Received ��36
D. IN REM JURISDICTION ��36
1. Statutory Limitations ��36
2. Constitutional Limitations �� 37
a. Nexus �� 37

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CIVIL PROCEDURE—FEDERAL

1) No Jurisdiction If Property Not Located in State �� 37

2) No Jurisdiction If Property Brought in by Fraud or
Force �� 37
b. Notice �� 37
E. QUASI IN REM JURISDICTION �� 37
1. Statutory Limitations �� 37
2. Constitutional Limitations ��38
a. Nexus ��38
1) Quasi In Rem Type I ��38
2) Quasi In Rem Type II ��38
3) Procedural Requirements ��39
b. Notice ��39
III. DIVERSITY OF CITIZENSHIP JURISDICTION ��39
A. INTRODUCTION ��39
B. DIVERSITY AMONG THE PARTIES ��39
1. Complete Diversity When Action Is Commenced ��39
a. Multiple Parties—Complete Diversity ��39
1) But Note �� 40
b. “Alienage” Jurisdiction �� 40
1) Aliens as Additional Parties �� 40
c. Diversity When Action Is Commenced �� 41
2. Questions of Citizenship �� 41
a. State Citizenship of an Individual—Domicile �� 41
b. Citizenship of a Corporation—Possible Multiple
Citizenships ��42
1) Special Rule for Direct Actions ��42
2) Incorporation or Principal Place of Business in
Foreign Country ��42
c. Unincorporated Associations ��42
1) Capacity ��42
2) Citizenship ��43
3) Class Action ��43
4) Partnerships ��43
5) Limited Liability Companies ��43
d. Legal Representatives ��43
e. Class Actions ��43
f. Nonresident United States Citizens ��44
3. Collusion and Devices to Create or Defeat Diversity ��44
a. Assignment of Claims ��44
b. Class Actions ��44
c. Voluntary Change of State Citizenship ��45

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CIVIL PROCEDURE—FEDERAL

4. Realignment According to Interest ��45

a. May Create or Destroy Diversity ��45
b. Shareholder Derivative Actions ��45
5. Supplemental Jurisdiction over Additional Claims ��45
6. Joinder or Subsequent Addition of Parties ��46
a. Restriction on the Use of Supplemental Jurisdiction in
Diversity Cases ��46
b. Intervention of Right ��46
c. Permissive Intervention �� 47
d. Substitution of Parties �� 47
e. Third-Party Practice—Impleader ��48
1) Subject Matter Jurisdiction Required ��48
f. Cross-Claims ��49
1) Subject Matter Jurisdiction Required ��49
C. JURISDICTIONAL AMOUNT: IN EXCESS OF $75,000 �� 50
1. What Is “In Controversy”? �� 50
a. Collateral Consequences of the Judgment �� 50
b. Interest and Costs �� 50
c. Equitable Relief �� 51
d. Punitive Damages �� 51
2. Aggregation of Separate Claims �� 51
a. One Plaintiff Against One Defendant �� 51
b. One Plaintiff Against Several Defendants ��52
c. Several Plaintiffs Against One Defendant ��52
d. Significance in Class Actions ��52
3. Supplemental Jurisdiction over Claims Not Exceeding $75,000
in Diversity Cases ��53
4. Counterclaims ��53
a. Compulsory Counterclaim Need Not Meet Jurisdictional
Amount ��54
b. Permissive Counterclaim Must Meet Jurisdictional
Amount ��54
c. No Removal to Federal Court Based on Counterclaim ��54
D. ERIE DOCTRINE AND THE LAW APPLIED UNDER DIVERSITY
JURISDICTION ��55
1. Federal Statutes or Federal Rules of Civil Procedure ��55
a. Caution ��56
2. If There Is No Federal Statute or Rule on Point, Is the Issue
Substantive or Procedural? ��56
a. Some Situations Are Clearly Established ��56
b. Law Is Unclear in Other Situations �� 57

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CIVIL PROCEDURE—FEDERAL

3. Statutes Involving Both Substance and Procedure �� 57

4. Interpreting State Law ��58
a. De Novo Review of District Court’s Decision ��58
b. Subsequent State Court Decisions ��58
E. FEDERAL COMMON LAW ��58
1. When Federal Courts Create Federal Common Law Rules ��58
a. Interpretation of Federal Statute or Constitution ��58
b. Creating Rules to Fill Gaps in Federal Regulatory
Schemes ��58
1) Formulating Uniform Federal Standard ��58
2) Borrowing State Standard ��59
2. When Federal Courts Create Federal Implied Rights of
Action ��59
a. Implied Right of Action Based on Federal Statute ��59
1) Need for Affirmative Congressional Intent �� 60
b. Implied Right of Action Based on Constitution �� 60
F. EXCEPTIONS TO DIVERSITY OF CITIZENSHIP JURISDICTION �� 60
1. Domestic Relations �� 60
2. Probate Proceedings �� 60
G. MULTIPARTY, MULTIFORUM TRIAL JURISDICTION ACT �� 61
1. Requirements �� 61
a. The Action �� 61
b. Minimal Diversity �� 61
c. One Additional Condition �� 61
d. Limitation on Jurisdiction �� 61
2. Intervention ��62
3. Service of Process ��62
IV. FEDERAL QUESTION JURISDICTION ��62
A. INTRODUCTION ��62
B. FEDERAL QUESTION MUST APPEAR IN THE COMPLAINT ��62
1. Defendant’s Answer or Defense Is Irrelevant ��62
2. Anticipation of a Defense ��62
C. IMPLIED FEDERAL RIGHT OF ACTION ��63
D. FEDERAL CORPORATIONS ��63
E. SUPPLEMENTAL (PENDENT) JURISDICTION OVER STATE CLAIMS ��63
1. Supplemental (Pendent) Claims ��63

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CIVIL PROCEDURE—FEDERAL

a. Effect of Dismissal of Federal Claim on Supplemental

(Pendent) Claim ��64
2. Pendent Parties ��64
F. SPECIFIC STATUTORY GRANTS ��65
1. Exclusive Jurisdiction ��65
V. VENUE ��65
A. SUBJECT MATTER JURISDICTION DISTINGUISHED ��65
B. GENERAL RULES ��65
1. General Rules for Most Civil Actions ��65
2. Special Venue Provisions ��66
C. RESIDENCE ��66
1. Natural Persons ��66
2. Business Entities ��66
a. Note for Corporations �� 67
3. Nonresident of United States �� 67
D. IMPROPER VENUE MAY BE WAIVED �� 67
E. TRANSFER �� 67
1. Original Venue Proper �� 67
2. Original Venue Improper ��68
3. Effect of Forum Selection Clauses ��68
4. Original Court Lacks Personal Jurisdiction ��68
F. LAW APPLICABLE UPON TRANSFER ��68
1. Original Venue Proper ��68
2. Original Venue Improper ��68
VI. REMOVAL JURISDICTION ��69
A. ORIGINAL JURISDICTION NECESSARY ��69
1. When ��69
2. Federal Defense Insufficient ��69
3. State Court Need Not Have Had Jurisdiction ��69
B. ONLY DEFENDANT MAY REMOVE; ALL MUST SEEK REMOVAL ��69
C. VENUE ��70
D. DEFENDANT MAY REMOVE SEPARATE AND INDEPENDENT FEDERAL
QUESTION CLAIM ��70

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CIVIL PROCEDURE—FEDERAL

E. DISMISSAL OF NONDIVERSE PARTY ALLOWS REMOVAL ��70

F. LIMITATIONS ON REMOVAL IN DIVERSITY OF CITIZENSHIP CASES ��70
1. Defendant Citizen of Forum State ��70
2. One-Year Rule �� 71
G. PROCEDURE FOR REMOVAL �� 72
1. Notice of Removal �� 72
a. Allegation of Amount in Controversy �� 72
2. Thirty-Day Rule �� 72
a. Effect of Multiple Defendants on the Thirty-Day Rule �� 72
b. Effect of Amendment on Thirty-Day Rule �� 72
3. Procedure After Removal �� 73
4. Right to Jury Trial �� 73
a. Demand for Jury Trial �� 73
b. Demand Not Required �� 73
5. Remand �� 73
a. Based on Procedural Defects �� 73
b. Based on a Lack of Subject Matter Jurisdiction �� 73
c. When All Federal Claims Have Been Adjudicated �� 74
d. Appellate Review of Remand Order �� 74
VII. CONFLICT OF JURISDICTION BETWEEN STATE AND FEDERAL COURTS �� 74
A. FULL FAITH AND CREDIT EXTENDED TO FEDERAL COURTS �� 74
B. INJUNCTIONS AGAINST PENDING STATE PROCEEDINGS �� 74
C. INJUNCTIONS AGAINST THREATENED STATE CRIMINAL
PROSECUTIONS �� 74
D. INJUNCTIONS AGAINST STATE TAX PROCEDURES �� 74
VIII. THE FEDERAL RULES OF CIVIL PROCEDURE �� 75
A. COMMENCEMENT OF THE ACTION �� 75
B. SERVICE OF PROCESS �� 75
1. Who May Serve �� 75
2. Time Limit for Service of Process �� 75
3. How Service Is Made �� 75
a. Individuals �� 75
b. Minors or Incompetent Persons �� 75
c. Corporations, Partnerships, Etc. �� 75
d. Service Under State Rules �� 76
e. Waiver of Service by Mail �� 76

11
CIVIL PROCEDURE—FEDERAL

1) Effect of Waiver �� 76

2) Effect of Failure to Waive �� 76
4. Parties Served Outside State �� 76
5. Parties Served in Foreign Country �� 77
6. Immunity from Process �� 77
C. TIME PERIODS �� 77
1. Counting Time �� 77
2. Extensions of Time ��78
D. INTERLOCUTORY INJUNCTIONS ��78
1. Temporary Restraining Order ��78
a. Requirements for Ex Parte Temporary Restraining
Orders �� 78
1) Specific Facts Showing Immediate and Irreparable
Injury �� 78
2) Efforts to Give Notice �� 79
3) Security �� 79
b. Notice of Hearing vs. Actual Notice �� 79
c. Time Limit �� 79
2. Preliminary Injunction �� 79
a. Requirements for a Preliminary Injunction �� 79
E. PROVISIONAL REMEDIES �� 80
F. PLEADINGS �� 80
1. Complaint �� 80
2. Pre-Answer Motions �� 80
a. Rule 12(b) �� 80
b. Motion for More Definite Statement �� 81
c. Motion to Strike �� 81
3. Answer ��82
a. Must Contain Denials or Admissions and Any Affirmative
Defenses ��82
b. Time ��82
c. Counterclaims ��82
d. Effect of Failure to Answer—Default and Default
Judgment ��82
1) Default ��83
2) Default Judgment ��83
a) Default Judgment Entered by the Clerk ��83
3) Notice Required ��83
4) Setting Aside a Default or a Default Judgment ��83

12
CIVIL PROCEDURE—FEDERAL

4. Inconsistent Claims or Defenses ��83

5. Special Pleading ��84
a. Capacity ��84
b. Fraud or Mistake ��84
c. Conditions of the Mind ��84
d. Conditions Precedent ��84
e. Official Document or Act ��84
f. Judgment ��84
g. Timing ��84
h. Special Damages ��84
6. Reply ��85
7. Amendment and Supplemental Pleadings ��85
a. Amendment ��85
1) Relation Back ��85
2) Changing Party ��85
3) Conform to Evidence ��86
4) Due Process Limitation ��86
b. Supplemental Pleadings ��86
8. Rule 11 ��86
a. Certification upon Presenting Paper to Court ��86
b. Sanctions �� 87
1) Court’s Initiative �� 87
2) Party’s Motion �� 87
G. JOINDER ��87
1. Joinder of Parties ��87
a. Capacity �� 87
b. Compulsory Joinder (Indispensable Parties) �� 87
1) Should the Absentee Be Joined? �� 88
2) Can the Absentee Be Joined? �� 88
3) Should the Action Proceed Without the
Absentee? �� 88
c. Permissive Joinder—Requirements ��89
2. Joinder of Claims ��89
a. Successive Claims ��89
b. Jurisdiction ��89
c. Class Actions �� 90
1) Prerequisites �� 90
2) Consideration in Treating Case as a Class Action �� 91
a) Court Must Define Class Claims, Issues, or
Defenses �� 91
b) Appointment of Class Counsel �� 91
3) Effect of Judgment �� 91

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CIVIL PROCEDURE—FEDERAL

4) Class Action Not Mooted If Class Representative’s

Claim Mooted �� 91
5) Notice �� 91
a) Notice Required in Common Question Suits �� 91
b) Notice Discretionary in Other Types of Class
Action Suits ��92
6) Jurisdiction ��92
a) Diversity Action ��92
b) Federal Question Action ��92
7) Court Approval of Dismissal or Settlement ��92
a) Notice of Dismissal or Settlement ��92
b) Procedures for Settlements of Class Action
Suits ��93
(1) “Opt Out” Provision ��93
(2) Court Approval Required for Payment in
Connection with Objection ��93
c) Appeal of Approval of Settlement ��93
8) Appeal of Class Action Certification Decision ��93
d. Class Action Fairness Act ��94
1) Subject Matter Jurisdiction Under the CAFA ��94
2) Removal Under the CAFA ��94
3) Excluded Actions ��94
a) Primary Defendants Are States or
Governmental Entities ��94
b) Claims Based on Securities Laws or Regarding
Corporate Governance ��94
4) Local Considerations May Defeat Jurisdiction ��94
a) Mandatory Decline of Jurisdiction ��95
b) Discretionary Decline of Jurisdiction ��95
5) Protections Under the CAFA ��95
a) Coupon Settlements ��95
b) Protection Against Loss by Class Members ��95
c) Protection Against Discrimination Based on
Geographic Location ��96
d) Notification of Federal and State Officials ��96
e. Shareholder Derivative Suits ��96
1) Minority Shareholder Allegations ��96
2) Corporation Named as Defendant ��96
3) Jurisdictional Amount and Venue ��96
4) Court Approval �� 97
f. Interpleader �� 97
1) Purpose Is to Avoid Double Liability �� 97
2) Rights of Plaintiff Stakeholder �� 97
3) Jurisdiction �� 97
a) Rule 22 Interpleader �� 97

14
CIVIL PROCEDURE—FEDERAL

b) Federal Interpleader Statute �� 97

c) When to Use Which �� 97
g. Intervention ��98
1) Intervention of Right ��98
2) Permissive Intervention ��98
3) Caveat ��98
h. Third-Party Practice (Impleader) ��99
1) Claims for Indemnity or Contribution ��99
2) Non-Indemnity or Non-Contribution Claims ��99
3) Severance of Third-Party Claims ��99
4) Response of Impleaded Party ��99
5) Impleading Insurance Companies ��99
i. Cross-Claims ��99
H. DISCOVERY �� 100
1. Duty of Disclosure �� 100
a. Types of Disclosure Required �� 100
1) Initial Disclosures �� 100
a) Exemptions from Initial Disclosure
Requirement �� 101
2) Disclosure of Expert Testimony �� 101
3) Pretrial Disclosures �� 101
2. Discovery of Electronically Stored Data ��101
a. Format for Producing Electronic Documents �� 102
b. Destruction of Electronically Stored Information ��102
c. Remedies ��102
d. Party Acted with Intent to Deprive ��102
3. Scope of Disclosure and Discovery ��102
a. In General ��102
b. Trial Preparation Materials ��103
1) Procedure for Claiming Work Product ��103
c. Inadvertent Disclosure of Trial Preparation or Privileged
Materials ��103
d. Experts ��103
e. Protective Orders ��104
f. Supplementation of Disclosures and Discovery
Responses ��104
4. Types of Discovery ��104
a. Pre-Action Depositions ��104
1) Contents of Petition ��104
2) Notice and Appointed Counsel ��104
3) Court Order ��104
b. Depositions ��104
1) Oral Deposition of a Witness, Including a Party-
Witness ��105

15
CIVIL PROCEDURE—FEDERAL

a)
Compulsory Appearance of Witnesses ��105
(1) Subpoena Not Needed for Parties ��105
(2) Nonparties Should Be Subpoenaed ��105
(3) Costs When Notifying Party Fails to
Attend ��105
2) Deposition of Witnesses on Written Questions ��106
c. Interrogatories to the Parties ��106
1) Option to Produce Business Records ��106
d. Production of Physical Material; Inspection ��106
e. Physical and Mental Examinations ��106
1) Order for Examination ��106
2) Report of Findings �� 107
f. Requests for Admission �� 107
5. Enforcing Disclosure and Discovery �� 107
a. Motion for an Order Compelling Disclosure or
Discovery �� 107
1) Motion Granted or Discovery Is Provided After
Filing �� 107
2) Motion Denied ��108
3) Motion Granted in Part and Denied in Part ��108
b. Failure to Comply with a Court Order ��108
c. Failure to Disclose or Supplement an Earlier Response ��108
d. Failure to Admit ��108
e. Party’s Failure to Attend His Own Deposition, Serve
Answers to Interrogatories, or Respond to a Request for
Inspection ��109
6. Use of Depositions at Trial or Hearing ��109
7. Errors and Irregularities in Depositions ��109
a. As to Notice ��109
b. As to Manner of Taking ��109
c. As to Completion and Return ��109
d. As to Form of Written Questions ��110
I. PRETRIAL CONFERENCES ��110
1. Rule 26(f) Conference of Parties—Planning for Discovery ��110
2. Rule 16(b) Scheduling Conference ��110
3. Pretrial Conferences ��110
4. Sanctions ��111
J. ALTERNATIVE DISPUTE RESOLUTION ��111
1. Contractual Arbitration ��111
a. Procedure ��111
1) Judicial Review of Award ��111

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CIVIL PROCEDURE—FEDERAL

2. Judicial Arbitration �� 112

3. Mediation �� 112
K. TRIAL �� 112
1. Jury Trial Problems �� 112
a. Right to Jury Trial �� 112
b. Jury Trials in Diversity Cases �� 113
1) Right to a Jury Trial �� 113
2) Motion for New Trial Based on Excessiveness of
Verdict �� 113
c. Jury Size �� 113
d. Jury Selection ��114
1) Jury Venire ��114
2) Voir Dire ��114
3) Jury Challenges ��114
e. Jury Instructions ��114
f. Jury Deliberations ��115
g. Jury Verdicts ��115
1) General Verdict ��115
2) Special Verdict ��115
3) General Verdict with Written Questions �� 116
4) Erroneous Verdicts and Inconsistent Findings �� 116
5) Juror Misconduct �� 116
2. Consolidation and Separate Trials ��116
3. Involuntary Dismissals ��116
4. Voluntary Dismissals �� 117
a. Without Leave of Court �� 117
b. With Leave of Court �� 117
5. Offer of Judgment �� 117
6. Summary Judgment �� 117
a. Standard �� 117
b. Applicable to All Civil Actions ��118
c. Time ��118
d. Partial ��118
e. Support ��118
f. Affidavits ��118
g. Nonappealability ��119
h. Relationship to Motion to Dismiss ��119
i. Relationship to Motion for Judgment on the Pleadings �� 119
7. Motion for Judgment as a Matter of Law (Formerly Directed
Verdict) ��119
8. Renewed Motion for Judgment as a Matter of Law (Formerly
Judgment Notwithstanding the Verdict (“JNOV”)) ��119

17
CIVIL PROCEDURE—FEDERAL

9. Motion for New Trial �� 120

a. Reasons for Granting New Trial �� 120
1) Remittitur �� 120
2) Additur �� 120
b. Renewed Motion for Judgment as a Matter of Law with
Motion for New Trial �� 120
10. Effect of Failure to Move for a Renewed Judgment as a Matter
of Law or for a New Trial �� 121
11. Nonjury (Bench) Trials and Judgments on Partial Findings �� 121
IX. ATTACK ON THE JUDGMENT AT THE TRIAL COURT LEVEL �� 121
A. RELIEF FROM JUDGMENT OR ORDER �� 121
1. Clerical Mistakes �� 121
2. Motions to Amend Prior Orders or Renew Prior Motions �� 121
3. Other Grounds for Relief from Judgment �� 121
B. INDEPENDENT ACTION IN EQUITY TO SET ASIDE THE JUDGMENT �� 122
X. FINAL JUDGMENT AND APPELLATE REVIEW �� 122
A. JUDGMENT �� 122
1. Relief that May Be Given �� 122
2. Judgment on Multiple Claims or Parties �� 122
3. Final Decision on Merits May Be Valid Despite Lack of Subject
Matter Jurisdiction �� 123
B. TIME FOR APPEALS �� 123
1. Extension of Time for Appeal �� 123
C. REVIEWABLE ORDER �� 123
1. Interlocutory Orders as of Right �� 124
a. Injunction �� 124
b. Receivers �� 124
c. Property Possession �� 124
2. Interlocutory Appeals Act �� 124
3. Fewer than All Claims or Parties �� 124
4. Collateral Order Rule �� 124
5. Review of Nonappealable Orders by Writ �� 124
6. Certification of Class Actions �� 125
D. STANDARDS OF REVIEW �� 125

18
CIVIL PROCEDURE—FEDERAL

1. On Matters of Law �� 125

2. On Questions of Fact �� 125
3. On Mixed Questions of Law and Fact �� 125
4. On Discretionary Matters �� 125
E. STAY PENDING APPEAL �� 125
1. Execution �� 125
2. Bond �� 126
3. Injunction Order �� 126
a. Power of Trial Court �� 126
b. Power of Appellate Court �� 126
F. SUPREME COURT JURISDICTION �� 126
1. Court of Appeals Cases �� 126
2. Cases from Highest State Court �� 126
XI. EFFECTS OF JUDGMENT ON FUTURE CASES ��127
A. CLAIM PRECLUSION (RES JUDICATA) ��127
1. Definition ��127
2. Terminology Used to Describe Effect—“Merger” and “Bar” ��127
3. Requirements for “Merger” and “Bar” ��127
4. Valid, Final Judgment ��127
5. “On the Merits” ��127
6. Same Claimant Versus Same Defendant �� 128
7. “Cause of Action” �� 128
a. Common Examples �� 128
1) Accidents �� 128
2) Installment Obligations �� 129
B. ISSUE PRECLUSION (COLLATERAL ESTOPPEL) �� 129
1. Definition �� 129
2. Requirements �� 129
a. Final Judgment �� 129
b. Issue Actually Litigated and Determined ��130
c. Issue Was Essential to the Judgment ��130
d. Due Process and Mutuality Considerations ��130
1) Against Whom Is Issue Preclusion Used? ��130
2) By Whom Is Issue Preclusion Used? ��130
3) Exceptions to Mutuality When Judgment Used
Defensively �� 131

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4) Exceptions to Mutuality When Judgment Used

Offensively—Consider Fairness �� 131
C. CLAIM AND ISSUE PRECLUSION IN SPECIAL SITUATIONS �� 132
1. In Rem Judgments �� 132
2. Quasi In Rem Judgments �� 132
D. WHICH PERSONS ARE BOUND BY A JUDGMENT? �� 132
1. Parties Are Bound �� 132
2. Privies to Parties Are Bound by Issue Preclusion �� 132
3. Represented Parties May Be Bound by Claim Preclusion �� 132
E. WHICH CHOICE OF LAW RULES APPLY TO PRECLUSION
QUESTIONS? �� 133
1. Case One Decided in State Court �� 133
2. Case One Decided in Federal Court Under Diversity
Jurisdiction �� 133

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CIVIL PROCEDURE—FEDERAL

I. INTRODUCTION

This outline is designed to acquaint you with commonly tested areas within the fields
of federal jurisdiction and procedure. These are: personal jurisdiction, subject matter
jurisdiction, venue, discovery, and joinder of multiple parties.

A. PERSONAL JURISDICTION
Personal jurisdiction refers to the ability of a court to exercise power over a partic-
ular defendant or item of property. It may be categorized as in personam, in rem,
or quasi in rem. The primary limitations on a court’s power to exercise personal
jurisdiction are found in the United States Constitution and state statutes.

B. SUBJECT MATTER JURISDICTION

The subject matter jurisdiction of the federal courts is limited to that authorized by
the Constitution as implemented by federal statute and decisional law. In general,
it may be categorized as follows:

1. Diversity of Citizenship Jurisdiction

Diversity of citizenship jurisdiction under 28 U.S.C. section 1332 is grounded
historically in the desire to protect out-of-state parties from local prejudice.
Its main requirement is that there be complete diversity between opposing
parties. Each plaintiff must be of diverse citizenship from each defendant.
Also, the amount in controversy must exceed $75,000.

2. Federal Question Jurisdiction

Federal question jurisdiction under section 1331 presents fewer specific
difficulties. The principal problem in this area is to determine when an action
“arises under” federal law. A secondary problem is to know what types of
actions are within the exclusive jurisdiction of the federal courts under other
specific statutes.

3. Removal Jurisdiction
Removal jurisdiction allows defendants to remove an action brought in a state
court to a federal court if the federal court would have had original jurisdic-
tion over the action.

4. Supplemental Jurisdiction
The doctrine of supplemental jurisdiction is codified under section
1367 and includes, under a single name, the concepts of “ancillary” and
“pendent” jurisdiction. In any form, supplemental jurisdiction allows a
federal court to entertain certain claims over which it would have no
independent basis of subject matter jurisdiction; that is, claims that do
not satisfy diversity or federal question jurisdiction requirements. It is
important to note that supplemental jurisdiction operates only after some
claim has met the requirements for federal subject matter jurisdiction.

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Supplemental jurisdiction operates to bring additional claims into that

case that arise from the a common nucleus of operative fact as the
original claim.

C. VENUE
Venue is the designation of the proper geographic district in which to bring an
action. Venue will depend on where the cause of action arose and on the nature of
the parties (whether corporate or natural persons).

D. DISCOVERY
Discovery is the process by which litigants gather information from each other
before trial, enabling them to know what evidence may be presented during the
trial. The discovery issues that typically arise in court or during pretrial proceedings
principally revolve around the scope of the examination allowed in discovery, the
uses of depositions at trial, and the available methods of enforcing discovery rights.

E. MULTIPLE PARTIES
Multiple party questions concern whether various types of joinder are permitted
under federal law and, if so, whether there is a jurisdictional basis for a particular
attempted joinder. The majority of the issues that arise in this area are grounded
in the interpretation or application of statutes and the Federal Rules of Civil
Procedure (“Federal Rules”), and also require knowledge of subject matter jurisdic-
tional bases, especially supplemental jurisdiction.

II. PERSONAL JURISDICTION

A. OVERVIEW
There are two branches of jurisdiction: subject matter jurisdiction and personal
jurisdiction. Subject matter jurisdiction involves the court’s power over a partic-
ular type of case. Personal jurisdiction involves the ability of a court having
subject matter jurisdiction to exercise power over a particular defendant or item
of property. This section discusses personal jurisdiction.

1. Limitations on Personal Jurisdiction

The exercise of personal jurisdiction generally must be authorized by statute
and constitutional.

a. Statutory Limitations
States have the power to decide over whom their courts may exercise
jurisdiction. Therefore, the first place to look to determine whether the
court has properly exercised personal jurisdiction usually is state law. If
no state statute grants the court the power over the parties before the
court, the court lacks personal jurisdiction.

b. Constitutional Limitations
The Due Process Clause of the Constitution places two restrictions on
the exercise of personal jurisdiction. First, the defendant must have

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such contacts with the forum state that the exercise of jurisdiction would
be fair and reasonable. Second, the defendant must be given appro-
priate notice of the action and an opportunity to be heard. Exercise of
personal jurisdiction over a defendant in violation of these constitutional
requirements is not valid, even if a statute purports to grant the court
jurisdiction.

c. Personal Jurisdiction in Federal Courts

The main jurisdictional problem in state courts arises when the defen-
dant over whom power is sought lives in another state. Since the federal
borders encompass all states, one might expect that federal courts
would encounter problems of personal jurisdiction only when the
defendants were foreign nationals. However, Rule 4 of the Federal Rules
provides that, absent some special federal statute, each federal court
must analyze personal jurisdiction as if it were a court of the state in
which it is located. Thus, in most cases, the assessment of whether
the court has personal jurisdiction over the defendant will be exactly
the same in federal court as it is in state court. Rule 4 also authorizes
jurisdiction without regard to state long arm statutes over third-party
defendants and parties required to be joined under the compulsory
joinder rules, provided the party is served within 100 miles from the
place where the summons was issued. (See VIII.B.3., infra.)

2. Three Types of Personal Jurisdiction

a. In Personam Jurisdiction
In personam jurisdiction exists when the forum has power over the
person of a particular defendant. (Jurisdiction over a plaintiff is generally
not an issue because the plaintiff accedes to the court’s jurisdiction by
bringing suit in that court.) In these cases, the court may render a money
judgment against the defendant or may order the defendant to perform
acts or refrain from acting. Such a judgment creates a personal obliga-
tion on the defendant and is entitled to full faith and credit in all other
states; in other words, if a defendant is ordered to pay a sum of money
to a plaintiff, the plaintiff may enforce the judgment against the defen-
dant’s property in any other state where that property is located.

b. In Rem Jurisdiction
In rem jurisdiction exists when the court has power to adjudicate the
rights of all persons in the world with respect to a particular item of
property. This jurisdiction is limited to situations where the property is
located within the physical borders of the state and where it is neces-
sary for the state to be able to bind all persons regarding the property’s
ownership and use. This occurs with respect to actions for condem-
nation (eminent domain cases), forfeiture of property to the state (for
example, when the property is used for the unlawful transportation of
narcotics), and settlement of decedents’ estates.

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CIVIL PROCEDURE—FEDERAL

c. Quasi In Rem Jurisdiction

One type of quasi in rem jurisdiction exists when the court has power
to determine whether particular individuals own specific property within
the court’s control. Unlike in rem jurisdiction, however, it does not permit
the court to determine the rights of all persons in the world with respect
to the property. A second type of quasi in rem jurisdiction permits
the court to adjudicate disputes other than ownership based on the
presence of the defendant’s property in the forum (see E.2.a.2), infra,
regarding applicable constitutional limitations).

1) Defendant Is Not Bound Personally

The basis of a court’s power to exercise quasi in rem jurisdiction is
the property within the state. (See E., infra.) The judgment does not
bind the defendant personally and cannot be enforced against any
other property belonging to the defendant.

B. STATUTORY LIMITATIONS ON IN PERSONAM JURISDICTION

Each state is free to prescribe its own statutory bases for personal jurisdiction. Of
course, the exercise of jurisdiction in a given case must also satisfy the constitu-
tional requirements. (See C., infra.) Most states have statutes granting their courts
in personam jurisdiction in the following four situations:

(i) Where the defendant is present in the forum state and is personally served
with process;

(ii) Where the defendant is domiciled in the forum state;

(iii) Where the defendant consents to jurisdiction; and

(iv) Where the defendant has committed acts bringing him within the forum
state’s long arm statutes.

Each of these bases of in personam jurisdiction will be discussed in detail below.

1. Physical Presence at Time of Personal Service

Most states grant their courts in personam jurisdiction over any defendant
who can be served with process within the borders of the state, no matter
how long he was present, even if merely passing through. The Supreme
Court has upheld this type of jurisdiction, allowing a transient defendant to
be served with process for a cause of action unrelated to his brief presence
in the state. [Burnham v. Superior Court, 495 U.S. 604 (1990)]

2. State Law Exceptions to Traditional Rule

Even though jurisdiction through presence at the time of service has been
upheld under the Constitution, state statutes and court decisions have limited
the power of their courts in certain situations.

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CIVIL PROCEDURE—FEDERAL

a. Service by Fraud or Force Invalid

If a plaintiff brings a defendant into a state by fraud or force to serve
process, most courts will find the service invalid for exercising personal
jurisdiction over the defendant. [See, e.g., Copas v. Anglo-American
Provision Co., 73 Mich. 541 (1889)]

EXAMPLE
While in Tennessee, a driver from Ohio was in a car accident with a me-
chanic from Tennessee. The accident was clearly the mechanic’s fault, so
the driver suggested that the mechanic repair his car and return it to him
in Ohio as a means of avoiding a lawsuit. The driver immediately went
back to Ohio and filed suit. When the mechanic returned the car to the
driver in Ohio, the driver delayed the mechanic long enough to have the
process server serve the mechanic with the summons and complaint.
The fact that the mechanic was served in Ohio cannot be used as a basis
for personal jurisdiction over the mechanic in Ohio.

b. Immunity of Parties and Witnesses

Most states likewise grant immunity from personal jurisdiction to
nonresidents who are present in the state solely to take part in a judicial
proceeding, or who are passing through the state on their way to a
judicial proceeding elsewhere.

3. Domicile
Most states grant their courts in personam jurisdiction over persons who are
domiciliaries of the state, even when the defendant is not physically within
the state when served with process.

a. Defined
Domicile refers to the place where a person maintains her permanent
home. If a person has legal capacity, her domicile is the place she has
chosen through presence (even for a moment), coupled with the inten-
tion to make that place her home. If a person lacks capacity, domicile is
determined by law (for example, an infant is a domiciliary of the custo-
dial parent’s home state).
b. Citizenship
A United States citizen, even though domiciled abroad, is subject to
personal jurisdiction in the United States. The scope of this basis for
jurisdiction is unclear, because states have never attempted to enact
laws or rules enabling their courts to obtain jurisdiction solely on the
basis of citizenship.

4. Consent
Virtually every state provides for in personam jurisdiction through the defen-
dant’s consent. Such consent may be express or implied or through the
making of a general appearance.

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a. Express Consent
A party’s express consent to the jurisdiction of local courts, whether
given before or after suit is commenced, serves as a sufficient basis for
in personam jurisdiction.

1) By Contract
A party can, by contract, give advance consent to jurisdiction in
the event a suit is brought against him. In fact, the party can be
required to appoint an agent to receive service of process as part
of the contract. The terms of the contract determine the extent of
the agent’s power and thus the scope of the jurisdiction conferred.

2) Appointment Required by State to Do Business

When a state authorizes a party to do business within its borders,
the state will often require the party to appoint an agent for service
of process. Some states view that appointment as consent to
general jurisdiction within the state, whereas other states view
appointment as consent to specific jurisdiction or a mere ministe-
rial appointment for service. The Supreme Court has held that
it does not violate due process for a state to require a party to
consent to general jurisdiction by registering to do business in
the state and appointing an agent for service. [Mallory v. Norfolk
Southern Railway Co., 143 S. Ct. 2028 (2023)]

b. Implied Consent
When the state has substantial reason to regulate the in-state activity
of a nonresident of the state, it may provide that by engaging in such
activity, the nonresident thereby appoints a designated state official as
his agent for service of process. Thus, for example, the Supreme Court
has upheld statutes that use such implied consent to subject a nonresi-
dent motorist to jurisdiction in any state in which he has an accident.
[Hess v. Pawloski, 274 U.S. 352 (1927)]

c. Voluntary Appearance
A defendant may consent to jurisdiction by a voluntary appearance,
such as by contesting the case without challenging personal jurisdiction.
Generally, any sort of appearance provides a sufficient basis for juris-
diction, but many states allow “special appearances” through which a
defendant can object to the court’s exercise of jurisdiction. The defen-
dant usually must make this special appearance—by stating grounds for
his objection to jurisdiction—in his initial pleading to the court; other-
wise, the defendant will be deemed to have consented to jurisdiction.

5. Long Arm Statutes

Virtually all states grant their courts in personam jurisdiction over nonresi-
dents who perform or cause to be performed certain acts within the state
or who cause results within the state by acts performed out of the state.

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In personam jurisdiction is granted regardless of whether the defendant is

served within or outside the forum, but is limited to causes of action arising
from the acts performed or results caused within the state.

a. Unlimited Long Arm Statutes

A few states, such as California, have long arm statutes that give their
courts power over any person or property over which the state can
constitutionally exercise jurisdiction. (See C., infra.) These are known as
unlimited long arm statutes.

b. Limited (or Specific) Long Arm Statutes

Most states, however, have long arm statutes that specify in detail the
situations in which their courts can exercise jurisdiction.

1) Limitations in Tort Cases

Some statutes permit jurisdiction when a “tort” occurs within the
state, while others require a “tortious act.” The latter language
has caused problems where an out-of-state manufacturer puts his
products into the stream of commerce knowing that some items
will end up in the forum state. When the gravamen of the complaint
is negligent manufacture, some courts have read “tortious act”
narrowly and confined jurisdiction to the place of manufacture;
others have read it to mean “the place the tort occurred,” inter-
preting that to be the place of injury.

2) Limitations in Contract Cases

Many statutes permit jurisdiction if the cause of action arises out of
the “transaction of business” in the state. Some states require the
defendant or his agent to have been physically present in the state
at the time the transaction took place, but others have taken a
broader view—for example, New York has upheld jurisdiction over
a California resident who made telephone bids from California on
paintings being sold in New York.

3) Limitations in Property Actions

Many state statutes permit jurisdiction over a nonresident defen-
dant when the cause of action arises from ownership of property
within the state—as in the case of a tort action based on negligent
maintenance of realty or a contract action regarding the sale of the
property. Some statutes include chattels, while others are confined
to realty.

4) Limitations in Marital Dissolution Cases

All states provide that when a married couple last lived together in
the state and one spouse then abandons the other, the remaining
spouse may obtain personal jurisdiction over the absent spouse for
divorce or legal separation proceedings. States vary on whether the

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plaintiff spouse must be living in the state at the time of abandon-

ment (or other cause for dissolution) or whether jurisdiction may be
acquired whenever the plaintiff has acquired domicile in the state.

C. CONSTITUTIONAL LIMITATIONS ON IN PERSONAM JURISDICTION

Once it is determined that a state has a statute that allows the court to exercise
in personam jurisdiction over the parties before it, the constitutionality of the
exercise must next be determined. There are two components of the constitutional
aspect: contacts with the forum and notice.

1. Sufficient Contacts with the Forum

a. Traditional Rule: Physical Power

Traditionally, jurisdiction over a person (or res) was a consequence
of the state’s physical power to carry out its judgment; i.e., it was
based on the power to arrest the person to force compliance with a
judgment. Accordingly, the Supreme Court upheld exercises of juris-
diction whenever the defendant was served with process within the
forum state. [See Pennoyer v. Neff, 95 U.S. 714 (1878)] The Court later
expanded the states’ physical power to extend not only to those defen-
dants who were served within the state, but also to those defendants
who consented to the state’s power or who were domiciled in the state,
regardless of where they were served.

b. Modern Due Process Standard: Contact, Relatedness, and Fairness

The concept of power by which a state could enforce its judgments
was greatly expanded by the Supreme Court in International Shoe Co.
v. Washington, 326 U.S. 310 (1945). No longer was power controlled
solely by whether one of the traditional bases of presence, residence,
or consent was present. Instead, the focus became whether sufficient
minimum contacts exist between the defendant and the forum so that
maintenance of the suit against the defendant does not offend “tradi-
tional notions of fair play and substantial justice.” The Supreme Court
has listed a series of factors by which to assess the constitutionality of
personal jurisdiction. In general, the factors fall under three headings:
contact, relatedness, and fairness.

1) Contact
International Shoe requires that the defendant have “such
minimum contacts” with the forum that the exercise of jurisdiction
would be fair and reasonable. In considering whether there are
such contacts, a court will look to two factors: purposeful availment
and foreseeability.

a) Purposeful Availment
Defendant’s contact with the forum cannot be accidental.
Rather, the contact must result from her purposeful availment

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CIVIL PROCEDURE—FEDERAL

with that forum. The defendant must reach out to the forum in
some way, such as to make money there or to use the roads
there. The court must find that through these contacts the
defendant purposefully availed herself “of the privilege of
conducting activities within the forum state, thus invoking the
benefits and protections of its laws.” [Hanson v. Denckla, 357
U.S. 235 (1958)]

EXAMPLES
1) A plaintiff is injured in a car accident in Montana and brings
a products liability action against Ford, the manufacturer, in
Montana. The car was designed in Michigan and manufac-
tured in Kentucky. Furthermore, the car was not sold in Mon-
tana but in another state. The Court held that Ford was subject
to personal jurisdiction in Montana. By advertising in a state,
shipping original replacement parts to the state, and maintain-
ing a network of dealers that sell and repair used cars in the
state, Ford created a market for its cars within Montana. Ford
thus has purposeful contacts with the state, and the cause of
action relates to those activities, as those contacts encour-
age people in the state to buy and drive Ford products. [Ford
Motor Company v. Montana Eighth Judicial District Court, 141
S. Ct. 1017 (2021)] Whether the court would have had general
personal jurisdiction was not addressed in the case.

2) Defendants, Michigan residents, entered into a franchise

contract with a Florida corporation. The agreement required,
among other things, that fees be sent to the franchisor’s home
office in Florida, and provided that Florida law would govern
any dispute. The Court held that the defendants could be
sued in Florida; their contact with Florida resulted from their
purposeful availment of that state. [Burger King v. Rudzewicz,
471 U.S. 462 (1985)]

COMPARE
1) Father, in New York, agreed to give up custody of Daughter
to Mother in California. Mother sued Father in California for ad-
ditional support. Father’s only contact with California was letting
Daughter go there. The Court held that California could not
obtain in personam jurisdiction over Father because, in acting in
the interest of family harmony, Father could not be said to have
purposefully availed himself of the benefits and protections of
California laws. [Kulko v. Superior Court, 436 U.S. 84 (1978)]

2) Defendant, a New York car dealer, was sued in Oklahoma

based on an injury that Plaintiff received from an accident in

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CIVIL PROCEDURE—FEDERAL

Oklahoma. The only basis for jurisdiction over Defendant was

the sale of the allegedly defective car in New York by Defen-
dant, who knew no more than that any vehicle sold might be
driven elsewhere. The Court found that there was no purpose-
ful availment of the privileges or protections of Oklahoma.
Note that this case is unlike Ford Motor Company, above,
because the dealer, not the car manufacturer, was contesting
personal jurisdiction. The New York dealer had insufficient
contacts with Oklahoma. [World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286 (1980)]

(1) “Stream of Commerce” Cases

There is great difficulty in assessing purposeful avail-
ment in “stream of commerce” cases. Stream of
commerce cases typically arise when Defendant
manufactures its product in State A (or even Country
A) and sells them to a second party in State B, thereby
placing the product in the stream of commerce. The
product eventually winds up in another state (State C)
and causes an injury therein. The question is whether
Defendant purposefully availed itself of State C. The
Supreme Court has failed to reach a consensus as
to when placing an item in the stream of commerce
subjects the defendant to personal jurisdiction in the
state where the product winds up. [Asahi Metal Industry
Co. v. Superior Court, 480 U.S. 102 (1987); J. McIntyre
Machinery, Ltd. v. Nicastro, 564 U.S. 873 (2011)] For bar
exam purposes, the important points to remember are:

(a) Merely placing an item in the stream of

commerce, by itself, is not a sufficient basis for
personal jurisdiction.

(b) It is unresolved whether placing an item in the

stream of commerce with the knowledge or hope
that it will wind up in a particular state would be
a sufficient basis for personal jurisdiction (but
probably unlikely). If you encounter such a question
on the exam, you should scour the question for
facts showing an intentional targeting (purposeful
availment) of the forum. (See (c), below.)

(c) Placing an item in the stream of commerce

coupled with some other acts that show the
intent to serve a particular state, for example,
by modifying its product to comply with state law,

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CIVIL PROCEDURE—FEDERAL

by maintaining sales offices within the state, by

maintaining repair capabilities in the state, etc., is a
sufficient basis for personal jurisdiction.

(2) Internet Cases

The Supreme Court has not set out a specific test or
standard for assessing purposeful availment based on
the defendant’s Internet activity. Many courts will look
at whether the defendant has a passive website that
allows people to view only content, an active website
that allows people to order and download products, or
something in between. The maintenance of a website
for only informational purposes, without more activity
in the forum, is insufficient to exercise jurisdiction over
the defendant for all causes of action (that is, general
jurisdiction), but it may be sufficient for a claim arising
from the maintenance of the website itself and brought
under the state’s long arm statute (thus using specific
jurisdiction) if the defendant is specifically targeting
readers in the forum. On the other hand, maintenance
of an active website alone would be sufficient for the
exercise of general jurisdiction (that is, a claim unrelated
to the website activities) if the “at home” test is satis-
fied. Specific jurisdiction hinges on whether the defen-
dant was purposefully directing his activities to the
forum. [Snowney v. Harrah’s Entertainment, Inc., 35 Cal.
4th 1054 (2005)—Nevada hotel subject to personal
jurisdiction in California when it specifically targeted
California consumers by providing rate information to
and accepting reservations on its website, by touting its
proximity to California, and by providing driving direc-
tions from California]

b) Foreseeability
It must be foreseeable that the defendant’s activities make
her amenable to suit in the forum. In other words, the defen-
dant must have known or reasonably anticipated that her
activities in the forum would render it foreseeable that she
may be “haled into court” there.

EXAMPLES
1) A national magazine is subject to in personam jurisdiction
for libel cases in every state in which the magazine is mar-
keted. Its publishers may reasonably anticipate causing injury
in every state in which the magazine is sold, and thus should
reasonably anticipate being haled into court in each state.

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[Keeton v. Hustler Magazine, 465 U.S. 770 (1984); Calder v.

Jones, 465 U.S. 783 (1984)]

2) In Ford Motor Company v. Montana Eighth Judicial District

Court, supra, the Court held that, by creating a market for its
used cars in the forum state, and by continuously and delib-
erately exploiting that market, Ford should have reasonably
anticipated being haled into a court of the state where its
product failed due to an alleged design defect.

2) Relatedness of Claim to Contact

One important factor is whether the claim asserted against the
defendant arises out of or relates to the defendant’s contacts with
the forum. If it does, the court is more likely to find that jurisdiction is
fair and reasonable. This assessment requires the court to determine
the nature and quality of the defendant’s contacts with the state.
Some authorities consider this factor to be part of the “contact” or
the “fairness” assessment; others consider it, as we do here, to be
part of the “relatedness” assessment. On an essay, the important
point is that you address the issue in your answer, whether under
the contact, relatedness, or fairness prong of the analysis. On an
MBE question, remember that if the cause of action does not arise
from or is unrelated to the defendant’s activities in the forum, there
must be general personal jurisdiction over the defendant.

a) Claim Arising from Activity in the State (Specific

Jurisdiction)
If the defendant’s in-state activity is based on isolated acts
committed within the jurisdiction, personal jurisdiction over
the defendant will be proper only for causes of action arising
from or relating to that in-state activity; in other words, the
court will have “specific jurisdiction.” When there are multiple
claims or parties involved, each claim of each plaintiff must
arise from or relate to some in-state activity for there to be
specific jurisdiction.

EXAMPLE
Eighty-six plaintiffs from California and 592 plaintiffs from oth-
er states sued Bristol-Myers Squibb, a pharmaceutical compa-
ny incorporated in Delaware and headquartered in New York,
in California, alleging that the drug Plavix injured them. None
of the non-California plaintiffs alleged any connection to Cali-
fornia with regard to their treatment. Because there was no
activity in California as to the nonresident plaintiffs, the court
lacked personal jurisdiction over Bristol-Myers Squibb as to
the claims of the non-California plaintiffs, even though Bristol-

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CIVIL PROCEDURE—FEDERAL

Myers Squibb was subject to personal jurisdiction in California

with respect to the California plaintiffs. The fact that the place
of injury was outside the forum state also distinguishes this
case from Ford Motor Company v. Montana Eighth Judicial
District Court, supra. The place of injury is thus significant in
accessing whether there is personal jurisdiction. [Bristol-Myers
Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017)]

Note: When the injury does not take place in the forum state,
there also could be a lack of statutory authorization because
no state would authorize personal jurisdiction over a defen-
dant who commits an out-of-state act that produces an out-of-
state injury. However, California has an unlimited long arm
statute, so the statutory authorization issue essentially rolled
into the constitutional issue.

Note also: The court specifically stated its ruling does not
apply to class actions.

b) Claim Not Arising from Activity in the State (General

Jurisdiction)
General jurisdiction (that is, in personam jurisdiction for any
cause of action against the defendant, even if the claim does
not relate to the defendant’s contacts with the forum) might
be available when the defendant (1) has registered to do
business and appointed an agent in the state for service of
process; or (2) is “at home” in the state.

(1) Registration to Do Business in a State

The Supreme Court has held that a state may require
foreign businesses to consent to general personal juris-
diction when they register to do business in the state.
[Mallory v. Norfolk Southern Railway Co., supra] If a state
requires such consent and it has a statute authorizing
general jurisdiction over such business (as some states
do), general jurisdiction may be exercised over a regis-
tered business. Of course, if a state does not have such
a statute, or if its courts have held they won’t extend
personal jurisdiction this far, general jurisdiction cannot
be exercised on this basis.

(2) “At Home” in the State

In addition to basing general jurisdiction on the contacts
discussed above, a defendant can be subject to general
personal jurisdiction if they were “at home” or “essen-
tially at home” in the state. A person is “at home” in the

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CIVIL PROCEDURE—FEDERAL

state in which they are domiciled, and a corporation is

“at home” in the state in which it was incorporated and
the state in which it has its principal place of business.
[Goodyear Dunlop Tires Operations, S.A. v. Brown, 564
U.S. 915 (2011); Daimler AG v. Bauman, 571 U.S. 117 (2014);
BNSF Railway Co. v. Tyrrell, 581 U.S. 402 (2017)]

3) Fairness
In addition to the defendant’s having relevant contacts with the
forum, International Shoe requires that the exercise of jurisdiction
not offend “traditional notions of fair play and substantial justice.”
The Court has listed several factors relevant to assessing whether
jurisdiction would be fair. It is possible that an especially strong
showing of fairness might make up for a lesser amount of contact
(although minimum contacts are always required). Note, however,
that fairness is not a factor for the exercise of general jurisdiction.

a) Convenience
A defendant will often complain that the forum is inconve-
nient. The Supreme Court has emphasized, however, that
the Constitution does not require that the forum be the best
of several alternatives. The forum is constitutionally accept-
able unless it is “so gravely difficult and inconvenient that a
party is unfairly put at a severe disadvantage in comparison
to his opponent.” [Burger King v. Rudzewicz, supra] This is a
very difficult standard to meet, and the defendant usually will
not be able to meet it simply by showing that the plaintiff has
superior economic resources.

b) Forum State’s Interest

The forum may have a legitimate interest in providing redress
for its residents.

EXAMPLES
1) Decedent, a California resident, purchased a life insurance
policy by mail from a Texas company. Decedent regularly
mailed his premiums from California to the Texas company,
which had no other contacts with California. In a suit brought
by the beneficiary of the life insurance policy, the Supreme
Court held that California had personal jurisdiction over the
Texas company. Among other things, the Court noted that
California had a strong interest in protecting its citizens from
alleged misfeasance by insurance companies. [McGee v. Inter-
national Insurance Co., 355 U.S. 220 (1957)]

2) Asahi, a Japanese manufacturer of tire valves, shipped

valves to a Taiwanese manufacturer of motorcycle tire tubes.

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The valves were incorporated into tires and sold in California,

where a resident was injured by a defective tire. The Tai-
wanese manufacturer was sued in a California court, where
it sought to implead Asahi. The main case was settled, leav-
ing only the indemnity claim by the tire manufacturer against
Asahi pending. Held: Even though Asahi placed the defective
goods in the stream of commerce knowing that some would
be used in California, exercise of jurisdiction by the California
court would be unreasonable considering the severe burdens
of Asahi in defending in a foreign legal system, the slight
interest of the Taiwanese manufacturer and California in the
exercise of jurisdiction, and the international interest in not
subjecting an alien corporation to United States jurisdiction.
[Asahi Metal Industry Co. v. Superior Court, supra]

c) Other Factors
The Supreme Court has listed other factors relevant to the
assessment of whether the exercise of jurisdiction would be
fair and reasonable, but has not discussed these factors in
detail: (1) the plaintiff’s interest in obtaining convenient and
effective relief, (2) the interstate judicial system’s interest in
obtaining the most efficient resolution of controversies, and
(3) the shared interest of the states in furthering fundamental
substantive social policies.

2. Notice
In addition to the requirement that the defendant have such minimum
contacts with the forum to render the exercise of jurisdiction there fair and
reasonable, due process also requires that a reasonable method be used to
notify the defendant of a pending lawsuit so that she may have an oppor-
tunity to appear and be heard. Due process requires that notice be “reason-
ably calculated, under all the circumstances, to apprise interested parties
of the pendency of the action and afford them an opportunity to present
their objections.” [Dusenbery v. United States, 534 U.S. 161 (2002)—quoting
Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950)]

a. Traditional Methods of Personal Service Satisfy Due Process Notice

Requirements
Any of the traditional methods of personal service satisfy due process
notice requirements. These include personal delivery to the defendant;
leaving papers with a responsible person at the defendant’s residence
or place of business; delivery to an agent appointed to accept service;
or delivery by registered mail, return receipt requested. (See VIII.B.,
infra, for discussion of methods of service of process.)

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b. Requirement that Agent Notify Defendant

If an agent is appointed by contract, in a case where the plaintiff chose
the agent for his own benefit, or the agent is appointed by operation
of law (as under a nonresident motor vehicle statute), the failure of the
agent to notify the defendant will prohibit jurisdiction—since the defen-
dant will in fact be deprived of an opportunity to be heard. (This is not
true when the defendant voluntarily selects his own agent, since any
failure of the agent can and will be attributed to the principal.)

c. Requirements for Cases Involving Multiple Parties or Unknown

Parties
In Mullane v. Central Hanover Bank & Trust Co., supra, an action was
brought against a number of trust beneficiaries scattered throughout
the world. The Supreme Court held that the Constitution did not require
personal service on each beneficiary since the cost would have been
prohibitive. However, every beneficiary had to be notified by the best
practical means available. Thus, those whose addresses were known
or could reasonably be ascertained had to be notified by ordinary mail,
while those whose names or addresses were unknown could be notified
by publication. Such methods of notice are valid only if all defendants
have substantially identical interests.

d. Knowledge that Notice by Mail Was Not Received

Although Mullane v. Central Hanover Bank & Trust Co., supra, does not
require actual notice, if a party knows that the notice by mail was not
received, he may not proceed in the face of such knowledge if practi-
cable alternatives to apprise the defendant of the action exist.

EXAMPLE
In Jones v. Flowers, 547 U.S. 220 (2006), the state sent a certified letter
to a homeowner to inform him that he was delinquent on taxes and that
failure to pay would make his property subject to public sale. By statute,
the taxpayer was required to keep his address updated. The letter was
returned “unclaimed,” after which the state took no further steps (such as
using first class mail or posting notice on the property) to notify the tax-
payer. The Court held that taking no further steps to provide notice with
the knowledge that notice had not been received violated due process.

D. IN REM JURISDICTION
As stated in A.2.b., supra, in rem actions adjudicate rights of all persons with
respect to property located in the state. An in rem judgment does not bind the
parties personally, but is binding as to the disposition of the property in the state.

1. Statutory Limitations
Most states have statutes providing for in rem jurisdiction in actions for
condemnation, title registration, confiscation of property (such as vehicles

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used to transport narcotics), forfeiture of a vessel, distribution of the assets

of an estate, and a grant of divorce when only the complaining spouse is
present and subject to personal jurisdiction. In the last case, the “property” is
the marital status of the complainant.

2. Constitutional Limitations

a. Nexus
In in rem actions the basis of jurisdiction is the presence of the property
in the state. The state has a great interest in adjudicating the rights of
all the world regarding this property. Therefore, the presence of the
property in the state is constitutionally sufficient for the exercise of juris-
diction over the property.

1) No Jurisdiction If Property Not Located in State

A court has no in rem power over property outside the state; for
example, in settling a decedent’s estate, the court has no in rem
power over property in other jurisdictions.

2) No Jurisdiction If Property Brought in by Fraud or Force

The exercise of in rem power is prohibited when the property is
brought into the state by fraud or force.

b. Notice
The requirements of Mullane v. Central Hanover Bank & Trust Co.,
supra, apply to in rem actions. Thus, persons whose interests are
affected and whose addresses are known must at least be notified by
ordinary mail. [Walker v. City of Hutchinson, 352 U.S. 112 (1956)]

E. QUASI IN REM JURISDICTION

Quasi in rem jurisdiction permits a court without in personam jurisdiction to deter-
mine certain disputes between a plaintiff and defendant regarding property when
the property is located in the forum state. (See II.A.2.c., supra.)

1. Statutory Limitations
There are two types of quasi in rem jurisdiction (see 2., infra). The first type
(type I) involves disputes between parties over their rights in property within
the state. The second type (type II) involves disputes unrelated to the in-state
property and has been severely limited by the Supreme Court. In quasi in rem
cases, the plaintiff is unable to obtain personal jurisdiction over the defen-
dant, but the defendant has property in the state that the plaintiff attaches.
The court then adjudicates the dispute between the parties on the basis of
its power over the property. Since the court’s sole basis of jurisdiction is the
property, any judgment against the defendant can be satisfied only out of
that property.

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2. Constitutional Limitations

a. Nexus
The minimum contacts standard is applicable to every exercise of
personal jurisdiction. The mere presence of property within a state is
not, by itself, sufficient to permit a court to exercise personal jurisdiction
over a defendant merely because she happens to have property in the
state when the action is not related to the property. [Shaffer v. Heitner,
433 U.S. 186 (1977)]

1) Quasi In Rem Type I

Thus, when the dispute involves the rights of the parties in the
property itself (quasi in rem type I), jurisdiction based upon the
presence of the property in the state is proper. The close connec-
tion between the litigation and the property provides the neces-
sary minimum contacts.

EXAMPLE
A brother, who lives in State A, and a sister, who lives in State B,
own antique furniture together. The furniture is located in State B.
The sister brings an action in State B against the brother to deter-
mine who has rightful possession of the furniture. Because the fur-
niture is located in State B, a court in State B would have personal
jurisdiction over the brother in this suit to determine ownership of
the furniture.

2) Quasi In Rem Type II

When the dispute is unrelated to the ownership of property (quasi
in rem type II), jurisdiction cannot be based solely on the presence
of property in the forum state; there must be minimum contacts
between the defendant and the forum. However, if the defendant
has minimum contacts with the forum, it is also likely that a court
could exercise in personam jurisdiction over a defendant under
the forum’s long arm statute, thus removing the limit on recovery to
the defendant’s in-state property. As a result, use of quasi in rem
jurisdiction type II will be rare.

EXAMPLE
A contractor, a resident of Maine, flies to Ohio and enters into a
contract with a homeowner, a resident of Ohio. All performance is
to occur in Ohio. The contractor flies home to Maine. The home-
owner breaches the contract. The contractor does not want to fly
to Ohio to sue the homeowner, but he discovers that the home-
owner has a boat docked in Maine. Attaching the boat would not
provide the court with personal jurisdiction over the homeowner;

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the contractor would have to show minimum contacts between the

homeowner and Maine.

3) Procedural Requirements
To obtain quasi in rem jurisdiction, a plaintiff must “bring the
asset before the court” by attachment (or garnishment). This will
inhibit the sale or mortgage of the defendant’s interest, since a
new owner must take subject to the decision of the court. Serious
questions have been raised as to whether such a pretrial interfer-
ence with a defendant’s property rights is constitutional unless
the defendant is afforded a hearing on the necessity of such
procedures. Most commentators think the process is valid, but the
Supreme Court has thus far avoided the issue.

b. Notice
As in in rem cases, quasi in rem cases require the best practical notice.
Therefore, posting of notice or notice by publication will be insufficient
where the addresses of persons affected by the action are known or
reasonably ascertainable. The federal statute for the enforcement of
liens or other claims to real or personal property requires personal
service if practicable and service by publication if personal service
is not practicable. If the defendant is not personally served, he may
appear within one year of final judgment, and the court must set aside
the judgment on payment of costs as the court deems just. [28 U.S.C.
§1655]

III. DIVERSITY OF CITIZENSHIP JURISDICTION

A. INTRODUCTION
The federal courts have been given subject matter jurisdiction over controversies
between citizens of different states, even though the controversies do not involve
questions of federal substantive law, in order to protect an out-of-state party from
possible local bias in state courts.

B. DIVERSITY AMONG THE PARTIES

1. Complete Diversity When Action Is Commenced

a. Multiple Parties—Complete Diversity

Diversity jurisdiction requires “complete diversity,” meaning that no
plaintiff may be a citizen of the same state as any defendant. If one
defendant and one plaintiff are co-citizens of the same state, complete
diversity is lacking and there is no diversity jurisdiction.

EXAMPLE
A, B, and C bring an action against X, Y, and Z. A and B are citizens of
New York; X and Y are citizens of Florida; and C and Z are citizens of

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Texas. Since no diversity exists between C and Z, the requirement of

complete diversity is not satisfied, and, as structured, the case cannot be
brought in federal court under diversity jurisdiction.

1) But Note
The rule of complete diversity does not require that every party be
of diverse citizenship from every other party. It requires only that
no plaintiff be a co-citizen with any defendant. Thus, two plaintiffs
who are both citizens of Missouri may invoke diversity of citizen-
ship jurisdiction against three defendants, all three of whom are
citizens of Kansas.

b. “Alienage” Jurisdiction
Most bar exam questions in this general area involve basic diversity of
citizenship jurisdiction, in which the dispute involves “citizens of different
states,” as discussed immediately above. However, section 1332(a)(2)
grants subject matter jurisdiction over “alienage” cases, in which the
dispute is between a citizen of a U.S. state and an “alien”—meaning a
citizen or subject of a foreign country. Jurisdiction is denied, however, if
the case is between a citizen of a state and a citizen of a foreign country
who has been admitted to the United States for permanent residence
and domiciled in the same state as the U.S. citizen. Also note that the
U.S. Constitution does not provide for federal jurisdiction over cases by
an alien against an alien; there must be a citizen of a U.S. state on one
side of the suit to qualify for alienage jurisdiction.

EXAMPLES
1) A, a citizen of Venezuela, sues B, a citizen of New York. This dispute
would invoke alienage jurisdiction (assuming the amount in controversy
requirement was also met), because it is between a citizen of a U.S. state
and a citizen of a foreign country.

2) A, a citizen of Venezuela, sues B, a citizen of France. This dispute

would not invoke alienage jurisdiction, because it is not between a citi-
zen of a U.S. state and a citizen of a foreign country. There is no citizen
of a state involved here.

3) A, a citizen of New York, sues B, a permanent resident alien domiciled

in New York. Alienage jurisdiction would be denied because B has the
same U.S. domicile as A.

1) Aliens as Additional Parties

28 U.S.C. section 1332(a)(3) grants jurisdiction in a case between
citizens of different states in which citizens or subjects of a foreign
country are additional parties. The foreign parties are disre-
garded for jurisdictional purposes. It appears that the restriction
in example 3) above does not apply—by the statutory language,

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it applies only to section 1332(a)(2) actions. Although not entirely

clear from case law, there also appears to be no subject matter
jurisdiction when there are U.S. citizens on one side of the action
and aliens on both sides.

EXAMPLE
A plaintiff from State A sues a defendant from State B and a resi-
dent alien who is domiciled in State A. By the face of the statute,
jurisdiction apparently is not defeated by the fact that the resident
alien is domiciled in the same state as the plaintiff.

c. Diversity When Action Is Commenced

Diversity of citizenship (or alienage) must exist as of the time the suit is
instituted. [Grupo Dataflux v. Atlas Global Group, 541 U.S. 567 (2004)]
It need not exist at the time the cause of action arose, and it is not
defeated if, after commencement of the action, a party later becomes a
citizen of the same state as one of his opponents.

EXAMPLES
1) A buyer from State A breaches an $80,000 contract with a seller from
State A. Solely to create diversity, and prior to filing suit, the seller moves
to State B. Diversity of citizenship exists because the seller is considered
to be a citizen of State B even though it was a citizen of State A when
the cause of action arose. Its intent is irrelevant.

2) A buyer from State X breaches an $80,000 contract with a seller from

State Z. Solely to defeat diversity, the seller moves to State X prior to
filing suit. Diversity of citizenship does not exist because the seller is
considered to be a citizen of State X even though it was a citizen of State
Z when the cause of action arose. Its intent is again irrelevant.
3) A buyer from State C breaches an $80,000 contract with a seller from
State D. After suit was filed, the seller moves to State C. Diversity of citi-
zenship is not defeated by this post-filing move.

2. Questions of Citizenship

a. State Citizenship of an Individual—Domicile

The determination of the state of citizenship of a natural person
depends on the permanent home to which he intends to return. The
concept is the same, except in name, as domicile. A new state citizen-
ship may be established by (1) physical presence in a new place and (2)
the intention to remain there, that is, no present intent to go elsewhere.
The citizenship of a child is that of her parents. In most cases, the
citizenship of a party will be determined by the court, but it may be left
to the jury.

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b. Citizenship of a Corporation—Possible Multiple Citizenships

For diversity purposes, a corporation is deemed to be a citizen of every
state and foreign country in which it is incorporated and the one state or
foreign country in which it has its principal place of business. [28 U.S.C.
§1332] A corporation’s “principal place of business” is the state from which
the corporation’s high level officers direct, control, and coordinate the
corporation’s activities (that is, its “nerve center,” which will usually be the
corporation’s headquarters). [Hertz Corp. v. Friend, 559 U.S. 77 (2010)]
Thus, many corporations have two citizenships—their state of incorpora-
tion and the state in which their principal place of business is located.
Although rare, it also is possible for a corporation to have more than two
state citizenships because a corporation may be incorporated in more
than one state. It is impossible, however, for a corporation to have more
than one principal place of business. If an opposing party is a citizen of
any of the corporate party’s states of citizenship, there is no diversity.

1) Special Rule for Direct Actions

The rules of corporate citizenship are subject to a special rule in
direct actions against an insurer. When a plaintiff sues an insurer
on a policy or contract of liability insurance, and does not also join
the insured, the insurer (whether incorporated or not) is treated
as a citizen of all of the following: (1) the state or foreign country
in which the insurer is incorporated (if it is); (2) the state or foreign
country in which the insurer has its principal place of business; and
(3) the state or foreign country of which the insured is a citizen.

2) Incorporation or Principal Place of Business in Foreign

Country
Because a corporation is a citizen of both its place of incorporation
and its principal place of business, and either of those places may
be in a foreign country, a corporation might simultaneously be an
alien and a citizen of a U.S. state. In that case, there would be no
alienage jurisdiction between that corporation and another alien,
even though the corporation may also have U.S. state citizenship.
(See 1.b., supra.)

EXAMPLE
There is no alienage jurisdiction in an action between a Delaware
corporation that has its principal place of business in Canada and a
citizen of Mexico.

c. Unincorporated Associations

1) Capacity
In federal question cases, unincorporated associations (for
example, partnerships) are considered entities that may sue or be

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sued (this is not true under some state laws). In diversity jurisdic-
tion cases, an unincorporated association may sue or be sued in its
own name if local state law permits.

2) Citizenship
Regardless, the unincorporated association’s citizenship is that of
each and every one of its members. (If an unincorporated associa-
tion cannot be sued in its own name, each member must be sued,
so the rule is the same.)

3) Class Action
If the association is large, a class action is possible. If a class action
is brought, the relevant citizenship is that of the named members
who sue or are sued on behalf of the members of the association.
(See e., infra.)

4) Partnerships
The citizenship of a partnership, general or limited, is that of each
and every partner. [Carden v. Arkoma Associates, 494 U.S. 185
(1990)]

5) Limited Liability Companies

Although limited liability companies (“LLCs”) are formed in a
manner similar to corporations, they are treated as unincorporated
associations for citizenship purposes. Thus, an LLC is a citizen of
all states of which its members are citizens. [See, e.g., Belleville
Catering Co. v. Champaign Market Place LLC, 350 F.3d 691 (7th Cir.
2003)]

d. Legal Representatives
A legal representative of an infant, an incompetent, or an estate of a
decedent is deemed to be a citizen of the same state as the infant,
incompetent, or decedent.

EXAMPLE
A commuter from State A is killed in an auto accident with a truck driver
from State B. The commuter’s brother, who is from State B, is appointed
to administer the estate of the commuter. Complete diversity exists, as
the brother effectively takes on the citizenship of the commuter.

e. Class Actions
If suit is brought by several named persons on behalf of a class, diver-
sity is determined on the basis of the citizenship of the named members
of the class who are suing. Thus, there is considerable room for maneu-
vering to create diversity if the class has members who are citizens of
several different states.

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f. Nonresident United States Citizens

A United States citizen domiciled abroad is not a citizen of any state
and also is not an alien. (Alien status depends on nationality, not
domicile.)

EXAMPLE
A retiree has permanently moved from State A to Country B to live out
the remainder of her years, but she has not obtained citizenship in Coun-
try B. She is no longer a citizen of State A, nor of any state, and she is not
a national of Country B. Thus, she is neither a citizen of any U.S. state nor
a foreign national. (Of course, any claim by or against her can be brought
in state court.)

3. Collusion and Devices to Create or Defeat Diversity

Diversity jurisdiction cannot be created by improperly or collusively assigning a
claim or joining a party merely to create diversity jurisdiction. [28 U.S.C. §1359]

a. Assignment of Claims
The assignment of a claim to another party for collection only is clearly
within this section. [Kramer v. Caribbean Mills, Inc., 394 U.S. 823 (1969)]
Thus, the assignment would be ignored in determining whether diver-
sity exists. But note: There is no collusion if an absolute assignment of a
claim is made and the assignor retains no interest in the assigned claim.

EXAMPLE
A supplier from State A enters into a contract with a manufacturer from
State A. Naturally, a contract dispute arises. In order to create diversity
jurisdiction, the supplier assigns its interest in the contract to a citizen of
State B for $1 plus 5% of any litigation proceeds. The assignment to the
citizen of State B will be disregarded, and there will be no subject matter
jurisdiction because complete diversity does not exist.

COMPARE
A home buyer from State A buys a home in State A and initially finances
the purchase through a small State A bank. The total value of the mort-
gage is $500,000. As a normal course of business, the lender then sells
the mortgage for $300,000 to a large bank that is incorporated in State
B and has its principal place of business in State C, with the right to col-
lect payment solely in the hands of the larger bank. Here, diversity would
exist because the assignment is complete and was not intended to cre-
ate diversity.

b. Class Actions
It is not improper to select the named members of a class action to
ensure diversity jurisdiction exists, even if unnamed members of the

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class are co-citizens of the defendant and naming them would prevent
diversity jurisdiction.

c. Voluntary Change of State Citizenship

As noted above, a plaintiff can create diversity by changing his
state citizenship after the cause of action accrued but before suit is
commenced, but the change must be genuine. In other words, a true
change of citizenship can create or destroy diversity. The party’s motive
for changing citizenship is irrelevant.

4. Realignment According to Interest

a. May Create or Destroy Diversity

In determining whether diversity exists, the court will look beyond the
nominal designation of the parties in the pleadings and realign them
according to their true interests in the dispute. Thus, realignment may
create diversity or destroy it.

b. Shareholder Derivative Actions

In a shareholder derivative action, a shareholder brings the action on
behalf of his corporation because the corporation has failed to enforce
a perceived claim against a third party. In such a case, the corporation
typically is named as a plaintiff in the case even though it is antagonistic
to the shareholder’s claim. Recognizing the realities of the situation, the
corporation is treated as a defendant for purposes of determining diver-
sity jurisdiction. [See Smith v. Sperling, 354 U.S. 91 (1957)]

EXAMPLE
A shareholder from State A contends that a high level corporate offi-
cer, who resides in State B, has converted company assets for his own
benefit. The company is from State B. Complete diversity exists as the
company is considered to be a defendant.

5. Supplemental Jurisdiction over Additional Claims

Occasionally, a claim may be joined that could not, by itself, invoke federal
question jurisdiction or diversity jurisdiction (because, for example, it is a
state claim between parties who are citizens of the same state or because
it does not involve the requisite amount in controversy). (See C., infra.) The
federal court may nonetheless entertain such claims under its supplemental
jurisdiction. (This type of supplemental jurisdiction used to be known as
“ancillary jurisdiction.”) Supplemental jurisdiction requires that the supple-
mental claim arise from a common nucleus of operative fact as the claim that
invoked original (diversity or federal question, usually) federal subject matter
jurisdiction. Some courts consider the common nucleus test to mean that the
claims must arise from the same transaction or occurrence, but the growing
trend is that the common nucleus test is broader than that.

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6. Joinder or Subsequent Addition of Parties

The Federal Rules permit numerous methods by which multiple claims or
parties may be joined or added to the case. A claim by or against such a
party, like any claim in federal court, must satisfy some basis of federal
subject matter jurisdiction, such as diversity of citizenship or federal
question. If the claim does not satisfy either of those, and it arises from a
common nucleus of operative fact (see above), the party asserting the claim
might invoke supplemental jurisdiction. Joinder of claims or parties is also
discussed in VIII.G., infra.

a. Restriction on the Use of Supplemental Jurisdiction in Diversity

Cases
For cases that are in federal court based solely on diversity, supple-
mental jurisdiction may not be used to support:

(i) Claims by plaintiffs against persons made parties under Rules 14

(impleader), 19 (compulsory joinder), 20 (permissive joinder), or 24
(intervention);

(ii) Claims by persons proposed to be joined as plaintiffs under Rule

19; and

(iii) Claims by persons seeking to intervene as plaintiffs under Rule 24;

When the exercise of supplemental jurisdiction would be inconsistent

with the requirements for diversity jurisdiction.

[28 U.S.C. §1367(b)]

b. Intervention of Right
Intervention of right must be allowed when: (1) the intervenor claims
an interest relating to the property or transaction that is the subject of
the action; (2) the disposition of the action may adversely affect that
interest; and (3) the current parties do not adequately represent the
intervenor’s rights. [Fed. R. Civ. P. 24(a)] Under the supplemental juris-
diction statute, there appears to be no supplemental jurisdiction for
claims by original plaintiffs against intervening defendants or for claims
by intervening plaintiffs. Such claims may proceed only if there were an
independent basis of jurisdiction, that is, diversity or federal question
jurisdiction.

EXAMPLE
A stockholder from State A holds stock in a corporation from State B
worth $100,000. The stockholder’s partner, also from State A, claims
that the stock was purchased as part of an agreement and thus should
have been issued in both the stockholder’s and partner’s name. The
partner brings an action in federal court to have the stock reissued in

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both names. If the stockholder intervenes as a plaintiff, he may not use

supplemental jurisdiction to support his claims. Similarly, if he intervenes
as a defendant, the partner may not use supplemental jurisdiction to sup-
port the partner’s claim against the stockholder. Note, however, that the
corporation could use supplemental jurisdiction to assert claims against
the stockholder.

c. Permissive Intervention
Permissive intervention may be permitted in the court’s discretion when
the intervenor’s action and the main action have a claim or defense
involving a common question of law or fact. The claim by a permissive
intervenor must invoke either diversity of citizenship or federal question
jurisdiction. [Fed. R. Civ. P. 24(b)]

EXAMPLE
A pedestrian from State A was injured when she was hit by a work truck
driven by a citizen of State B and owned by a corporation from State B.
The truck was insured by an insurance company from State C. An issue
in the case is whether the truck driver was in the course of his employ-
ment at the time of the accident. If the truck driver was not driving the
truck in the course of his employment, the insurance company would not
be required to pay any claim arising out of the accident. Accordingly, the
insurance company sues the truck driver and corporation in federal court
for a declaratory judgment that the accident is outside of the policy. The
pedestrian should be allowed to intervene, as the common question of
whether the truck driver was in the course of employment at the time of
the accident is shared between her action and the insurance company’s
action. Note that here, presence as either a defendant or a plaintiff
would not destroy diversity, and the amount in controversy would be the
same in both actions.

d. Substitution of Parties
Substitution involves changes in parties to a lawsuit necessitated by
death, incompetency, etc., of an original party after an action has been
commenced. [Fed. R. Civ. P. 25] The citizenship of the substituting party
is disregarded; that of the original party controls. Substitution should
be distinguished from an amendment that allows “replacement” of an
original party by the party in whom or against whom the action properly
lies. A “replacement” party must be diverse to the party or parties on
the opposing side.

EXAMPLE
A v. B. A dies and the administrator of his estate is substituted as plaintiff.
Jurisdiction is not destroyed even though B and the administrator are

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co-citizens. However, if A sues B and subsequently discovers that C—not

B—is the proper defendant, an amendment to the complaint by which B
is replaced by C must show that diversity exists between A and C.

e. Third-Party Practice—Impleader
A third-party claim is the joinder by the defendant in the original action
(who is usually called the third-party plaintiff) of another person not
originally a party to the action (who is called the third-party defendant).
[Fed. R. Civ. P. 14] The impleader claim asserts that the third-party defen-
dant is or may be liable to the defendant for all or part of the plaintiff’s
claim against the defendant. In other words, an impleader claim is for
indemnity or contribution.

EXAMPLE
P sues D for $500,000 for personal injuries allegedly inflicted by joint
tortfeasors D and X. Applicable law provides that joint tortfeasors have a
right of contribution against each other. D may implead X into the pend-
ing case. D is seeking to deflect her liability on P’s claim, in part, to X. (If
X owed D indemnity for some reason, then D could implead X to deflect
her entire liability on the underlying claim to X.)

After the third-party defendant is impleaded, he may assert a claim

against the plaintiff in the pending case if the claim arises from the
same transaction or occurrence as the underlying suit. In addition, after
the third-party defendant is impleaded, the plaintiff may assert a claim
against him if it arises from the same transaction or occurrence as the
underlying suit.

1) Subject Matter Jurisdiction Required

Of course, every claim asserted in federal court must have a basis
of subject matter jurisdiction.

EXAMPLES
1) P, a citizen of Illinois, sues D, a citizen of Wisconsin, asserting
a state law claim of more than $75,000. Thus, the case invokes
diversity of citizenship jurisdiction and is properly brought in federal
court. Now D impleads X, who is also a citizen of Illinois, on an
indemnity claim of more than $75,000. That claim invokes diversity
of citizenship jurisdiction, because it is asserted by a citizen of Wis-
consin (D) against a citizen of Illinois (X) and exceeds $75,000. The
fact that P is also a citizen of Illinois is irrelevant; the claim is not
by or against her, so her citizenship does not affect the impleader
claim. If P wanted to assert a claim against X in this situation, how-
ever, there would not be diversity because P and X are co-citizens
of Illinois. In addition, the claim would not invoke supplemental

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jurisdiction, because in diversity of citizenship cases, the supple-

mental jurisdiction statute cannot be used to override the complete
diversity rule. Thus, unless the claim by P against X invoked federal
question jurisdiction, it could not be asserted in the pending case; it
would have to be asserted in state court.

2) P, a citizen of Alabama, sues D, a citizen of Maine, asserting

a state law claim of more than $75,000. Thus, the case invokes
diversity of citizenship jurisdiction and is properly brought in federal
court. Now D impleads X, who is also a citizen of Maine, on a state
law contribution claim. The impleader claim does not invoke diver-
sity of citizenship jurisdiction, because it is asserted by a citizen of
Maine (D) against another citizen of Maine (X). It does not invoke
federal question jurisdiction because it is based on state law. The
claim invokes the ancillary form of supplemental jurisdiction, how-
ever, because it arises from a common nucleus of operative fact
as the underlying case and is asserted by the defendant, not the
plaintiff, thus avoiding the restriction on the use of supplemental
jurisdiction in 28 U.S.C. section 1367(b).

f. Cross-Claims
A party may assert a claim in a pending case against a co-party, but
only if the claim arises from the same transaction or occurrence as the
underlying dispute. [Fed. R. Civ. P. 13]

EXAMPLE
A homeowner sues a carpenter and a plumber in federal court. A claim
by the plumber against the carpenter (or by the carpenter against the
plumber) that arises from the same transaction or occurrence as the
underlying case would be a cross-claim.

1) Subject Matter Jurisdiction Required

Cross-claims, like all claims in federal court, must invoke subject
matter jurisdiction. Therefore, after determining that a cross-claim
would be filed, assess whether that claim could invoke diversity
of citizenship or federal question jurisdiction. If so, the claim may
be asserted in federal court. However, if a cross-claim does not
invoke diversity of citizenship or federal question jurisdiction, the
cross-claim could nonetheless be asserted in federal court through
supplemental (ancillary) jurisdiction.

EXAMPLE
A homeowner from State A validly sues a carpenter and a plumber,
both of whom are from State B, in federal court. If the plumber has
a cross-claim for $25,000 against the carpenter, it may be asserted

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in federal court under the court’s supplemental jurisdiction, even

though the amount in controversy is not more than $75,000 and
the parties are from the same state.

C. JURISDICTIONAL AMOUNT: IN EXCESS OF $75,000

Actions brought in a federal court under the diversity statute must meet the
jurisdictional amount requirement. The matter in controversy must be in excess of
$75,000, exclusive of interest and costs. [28 U.S.C. §1332] The amount is deter-
mined from what is claimed in the complaint, disregarding potential defenses
or counterclaims. Usually, all that is necessary is a good faith allegation that
the amount of the damages or injuries in controversy exceeds, exclusive of
interest and costs, the sum of $75,000. Good faith means that there must be a
legally tenable possibility that recovery will exceed the jurisdictional amount.
The complaint can be dismissed only if it appears there is no legal possibility of
a recovery exceeding the jurisdictional amount. Jurisdiction is not retroactively
defeated by the fact that the amount actually recovered is less than the jurisdic-
tional amount.

1. What Is “In Controversy”?

a. Collateral Consequences of the Judgment

Does the collateral effect of the judgment sought by the plaintiff bring
into controversy the value of other claims that may be governed by the
judgment? The Supreme Court has held that the collateral effects of a
judgment may not be considered.

EXAMPLE
An insured from State A asserts a claim for installments due under a
disability policy for the past year totaling $50,000 against an insurance
company from State B. The insured is due another $80,000 over the
next year. Only the $50,000 amount is considered, even though the
judgment may control the insured’s rights to payment of the $80,000.

COMPARE
Same facts as above, but if the insurance company sues to cancel the
contract for fraud, the value of the entire contract, $130,000, is brought
into controversy, and the amount in controversy is satisfied.

b. Interest and Costs

The statute excludes interest and costs in determining the jurisdictional
amount. However, attorneys’ fees that are recoverable by contract or
by statute are considered part of the matter in controversy rather than
as costs. Similarly, interest that constitutes a part of the claim itself, as
distinguished from interest payable by virtue of a delay in payment, is
part of the jurisdictional amount.

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EXAMPLE
Plaintiff sues on a three-year note with face value of $70,000 and ac-
crued interest of $10,500. Since the interest on the note is part of the
claim, the jurisdictional amount is satisfied. [See, e.g., Brainin v. Melikian,
396 F.2d 153 (3d Cir. 1968)]

COMPARE
Plaintiff sues on a one-year note with the face value of $60,000 and
accrued interest of $10,000. But the defendant did not pay immediately,
and additional interest of $10,000 accrued between maturity and filing.
The additional interest after maturity is not part of the claim.

c. Equitable Relief
There may be difficulty calculating an amount in controversy for a
claim for equitable relief, given that the claimant does not seek money
damages. For example, suppose P sues D for an injunction ordering D to
remove part of D’s house that blocks P’s view. What is the value of the
injunction and, therefore, the claim? Some courts look at the issue from
the plaintiff’s viewpoint, and ask what the value of the harm caused by
the blocked view is. Other courts look at the issue from the defendant’s
viewpoint, and ask what it would cost the defendant to comply with the
injunction if it were ordered. Some courts conclude that the amount in
controversy requirement is satisfied if the amount under either test—
plaintiff’s viewpoint or defendant’s viewpoint—exceeds $75,000. On an
essay, discuss both viewpoints; on the MBE, consider whether jurisdic-
tion would be valid under either viewpoint before answering.

d. Punitive Damages
If a punitive damage claim is permitted under state substantive law, it
may be used in making the dollar amount requirement because there is
“no legal certainty” that the amount will not be recovered.

2. Aggregation of Separate Claims

a. One Plaintiff Against One Defendant

For purposes of meeting the jurisdictional amount, the plaintiff may
aggregate all her claims against a single defendant. This aggregation
is permitted regardless of whether the claims are legally or factually
related to each other. Aggregation has nothing to do with supplemental
jurisdiction.

EXAMPLE
A plaintiff from State A has a breach of contract claim for $50,000 and a
tort claim for $50,000 against a defendant from State B. He may add those
two claims together to satisfy the amount in controversy requirement.

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b. One Plaintiff Against Several Defendants

A plaintiff who has an action against several defendants cannot aggre-
gate claims based on separate liabilities. However, there is no aggre-
gation problem if the plaintiff asserts a joint claim against multiple
defendants. With a joint claim, courts look at it as one claim, and look to
the total value of the claim to determine whether the amount in contro-
versy is satisfied.

EXAMPLE
A homeowner contracts with a roofer to put a new roof on his house in
the summertime and a home improvement contractor to remodel his
kitchen in the fall. The contracts for each are $50,000. Turns out, the
roofer installs the roof poorly, and the contractor never shows up after
accepting a $30,000 advance payment. The homeowner may not aggre-
gate the two claims. They are separate claims.

COMPARE
A pedestrian is hospitalized when he is injured by two drag racers. The
hospital bills run $80,000. The pedestrian sues the drag racers in federal
court. Here, the amount in controversy is satisfied because the claim is
based on joint liability. Either drag racer may be held liable for the total
amount of the claim.

c. Several Plaintiffs Against One Defendant

Several plaintiffs can aggregate their claims only where they are
seeking “to enforce a single title or right in which they have a common
or undivided interest . . . . ” If the claims are separate and distinct, aggre-
gation may not be used.

EXAMPLE
Two investors own Blackacre, an empty lot worth $100,000, as an invest-
ment as joint tenants. They bring a quiet title action against a neighbor
in federal court. The amount in controversy requirement is met, because
joint tenancies are undivided interests in the whole land, so we use the
total value of the land.

COMPARE
A driver is in a collision with a city owned bus. Two passengers were in-
jured. One passenger has a claim of $50,000, the other has a claim worth
$30,000. Because their claims are separate and distinct from one another,
aggregation is not allowed and the amount in controversy is not satisfied.

d. Significance in Class Actions

This rule has special importance in class actions, in which the rule is that
the claims of the class members cannot be aggregated if their rights are

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“separate” rather than “joint” or “common.” One class representative’s

claim must exceed $75,000, and the court will have supplemental juris-
diction over the claims that do not exceed $75,000. [Snyder v. Harris,
394 U.S. 332 (1969)]

3. Supplemental Jurisdiction over Claims Not Exceeding $75,000 in

Diversity Cases
A claim by a joined plaintiff (a co-plaintiff) that does not meet the amount
in controversy requirement for diversity of citizenship jurisdiction may use
supplemental jurisdiction if the claim arises from a common nucleus of opera-
tive fact as the claim that invoked diversity of citizenship. However, in such a
case, the supplemental jurisdiction cannot be used to override the complete
diversity rule as between the co-plaintiff and defendant(s). [Exxon Mobil Corp.
v. Allapattah Services, 545 U.S. 546 (2005)]

EXAMPLE
A plaintiff from California asserts a state-law claim for $100,000 against a
defendant from Arizona. This claim may use diversity of citizenship jurisdic-
tion, as it is between a citizen of California and a citizen from Arizona, and
the amount in controversy exceeds $75,000. In the same case, a co-plaintiff,
who is also from California, wants to assert a state-law claim against the
same defendant for $50,000 that arises from a common nucleus of opera-
tive fact as the first claim. The claim by this co-plaintiff cannot use diversity
of citizenship jurisdiction because it does not exceed $75,000. Nonetheless,
the claim by the co-plaintiff can be heard in federal court under supplemen-
tal jurisdiction.

COMPARE
A plaintiff, a citizen of California, asserts a claim for $100,000 against a
defendant, a citizen of Arizona. That claim invokes diversity of citizenship
jurisdiction. In the same case, a co-plaintiff, a citizen of Arizona, wants to
assert a claim against the same defendant for $50,000 in the same case.
The claims by plaintiff and co-plaintiff again arise from a common nucleus of
operative fact. The claim by co-plaintiff cannot invoke diversity of citizenship
jurisdiction because it is by a citizen of Arizona against a citizen of Arizona
and the amount in controversy is not sufficient. Here, the co-plaintiff can-
not use supplemental jurisdiction because it cannot be used to override the
complete diversity requirement. Thus, that claim may be asserted only in
state court.

4. Counterclaims
A defendant’s counterclaim [see Fed. R. Civ. P. 13] cannot be combined with
the plaintiff’s claim to reach the jurisdictional amount; for example, if the
plaintiff claims $20,000, the amount in controversy is not satisfied even if the
defendant counterclaims for $100,000. Does a counterclaim itself have to
meet the requirements of the jurisdictional amount?

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a. Compulsory Counterclaim Need Not Meet Jurisdictional Amount

A compulsory counterclaim (arising out of the same transaction or
occurrence) does not need to meet the jurisdictional amount require-
ment. The court has ancillary (supplemental) jurisdiction over such
a counterclaim just as it does over a third-party claim under Rule 14
impleader.

EXAMPLE
A driver from Colorado is in an accident with a trucker from Illinois. The
driver sues the trucker in federal court for $100,000 to cover his medi-
cal bills. The trucker’s truck was damaged to the tune of $10,000 in the
accident. The counterclaim arises out of the same transaction or occur-
rence, so the trucker must assert this claim in federal court in the same
action. He may use supplemental jurisdiction to have his claim heard in
federal court, because the claim, by necessity, arises out of a common
nucleus of operative fact, and the claim is asserted by a party other than
the plaintiff.

b. Permissive Counterclaim Must Meet Jurisdictional Amount

A defendant’s permissive counterclaim (arising out of a completely
unrelated transaction) must have an independent jurisdictional basis,
and thus must meet the jurisdictional amount requirement because
the common nucleus test is not satisfied. A growing body of case law,
however, holds that supplemental jurisdiction is available if there is
some sort of factual relationship between the two claims.

EXAMPLE
A driver from Colorado is in an accident with a trucker from Illinois. The
driver sues the trucker in federal court for $100,000 to cover his medical
bills. The trucker’s truck was damaged to the tune of $10,000 in the acci-
dent. By coincidence, the trucker also has a separate and distinct breach
of contract claim against the driver for $50,000. There is no supplemen-
tal jurisdiction over the contract claim.

c. No Removal to Federal Court Based on Counterclaim

As will be discussed later, if a plaintiff brings a case in state court that
could have been brought in federal court, the defendant typically has a
right to remove the case to federal court. However, the same is not true
regarding plaintiffs and counterclaims: A plaintiff who claims $75,000
or less in a state court action who is met with a counterclaim for more
than $75,000 may not remove the suit to federal court, regardless of
whether the counterclaim is compulsory or permissive, because removal
is permitted only to defendants. The weight of authority also holds that
in a situation where the plaintiff has not met the jurisdictional amount,

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the defendant who must assert a compulsory counterclaim in the state

suit may not remove the action, even though the counterclaim is over
$75,000 and there is complete diversity. Thus, a plaintiff with a small
claim can require a defendant with a large claim to litigate it in state
court simply by being the first to file. But note: Even though this is the
traditional rule, there is a trend allowing removal. If you encounter
such a question on the exam, use the traditional rule, but, on an essay,
note the trend for allowing removal.

EXAMPLE
A trucker from Illinois is in an accident with a driver from Colorado. The
trucker sues the driver in state court for $10,000. The driver has medi-
cal bills totaling $100,000. Under the traditional rule, the driver may not
remove the case to federal court.

D. ERIE DOCTRINE AND THE LAW APPLIED UNDER DIVERSITY JURISDICTION

A federal court, in the exercise of its diversity jurisdiction, is required to apply the
substantive law of the state in which it is sitting, including that state’s conflict
of law rules. [Erie Railroad v. Tompkins, 304 U.S. 64 (1938); Klaxon Co. v. Stentor
Electric Manufacturing Co., 313 U.S. 487 (1941)] However, the federal courts apply
federal procedural law.

1. Federal Statutes or Federal Rules of Civil Procedure

To determine whether federal law should be applied, the first question
to ask is whether there is a federal law (such as a statute, Federal Rule of
Civil Procedure) on point. If there is, the federal statute or federal rule will
apply, provided that it is valid. (Since the Supreme Court reviews and sends
proposed rules to Congress prior to enactment, it is very unlikely that a
Federal Rule would be held invalid.) Of course, if there is a federal constitu-
tional provision (for example, a right to jury trial in cases over $20), it applies.

EXAMPLES
1) Federal Rule 4 permits substituted service of process. Suppose that state
law (of the state in which the federal court sits) does not permit substituted
service. The court will apply the Federal Rule, because it is on point and is
valid. A Federal Rule of Civil Procedure is valid if it is “arguably procedural.”
[Hanna v. Plumer, 380 U.S. 460 (1965)]

2) In Shady Grove Orthopedic Associates v. Allstate Insurance Co., 559 U.S.

393 (2010), a plaintiff brought a diversity jurisdiction class action under a New
York law for recovery of interest on claims paid late by insurance companies.
A New York statute would have denied class action status to claims seeking
such recovery. A majority of the Court held that Federal Rule of Civil Proce-
dure 23 governed regarding class action status and refused to apply the New
York statute. Under the Rules Enabling Act, a Federal Rule is valid if it deals

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with “practice or procedure” and does not “abridge, enlarge, or modify” a

substantive right, and concluded that Rule 23 is valid.

a. Caution
Sometimes it is difficult to determine whether a federal statute or
rule is on point. For example, Federal Rule 3 provides that a case is
commenced when the complaint is filed. Many people thought that the
rule thus was a directive that the statute of limitations would be tolled
from the date of filing the complaint. The Supreme Court held, however,
that Rule 3 did not address tolling at all, and thus did not constitute a
federal directive on the tolling question. [Walker v. Armco Steel, 446
U.S. 740 (1980)]

2. If There Is No Federal Statute or Rule on Point, Is the Issue Substantive

or Procedural?
If there is no federal statute or rule on point, can a federal judge refuse to
follow state law on a particular issue? The answer depends on whether the
law on that issue is substantive or procedural. If it is a matter of substance,
the federal judge must follow state law in a diversity case. If it is a matter of
procedure, the federal judge may ignore state law. Most questions will deal
with the clearly established situations discussed below.

a. Some Situations Are Clearly Established

In some instances, the characterization as substance or procedure is
well established. For example, the Supreme Court has established that
statutes of limitations and rules for tolling statutes of limitations are
substantive for Erie purposes; therefore, a federal judge in a diversity
case must follow state law on those issues. [Guaranty Trust Co. v. York,
326 U.S. 99 (1945)] Choice of law rules are also substantive for Erie
purposes, and a federal judge in a diversity case must follow state law
on that issue as well. [Klaxon v. Stentor Electric Manufacturing Co., 313
U.S. 487 (1941)] Finally, of course, elements of a claim or defense are
substantive. If tested, most MBE questions should come from these
clearly established areas.

Note: There can be two issues presented in a conflict of laws problem.

The first issue involves determining whether federal or state law
applies. The second issue involves determining which state’s laws
apply. Both questions are often resolved using “substantive” and
“procedural” language, but a determination that a law is “substan-
tive” for the federal vs. state question does not mean that it has to be
“substantive” for the state vs. state question.

EXAMPLE
A driver from State A is injured in an automobile accident in State A by
a trucker from State B. The driver files a state tort-law claim in federal

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court for $80,000 against the trucker in State B. Assume that the ac-
tion would be barred by one of the state’s statute of limitation, but not
the other. Which statute should the federal court in State B apply? As
explained above, because the issue is “substantive,” the federal court
must apply State B law, including State B’s choice of law rules, and
not federal law. But you do not automatically apply State B’s statute of
limitation. You have to use State B’s “substantive” choice of law rules to
determine which statute of limitation actually applies. State B law might
follow the traditional approach, call the issue “procedural,” and tell you
to apply the State B statute. Or State B might follow another approach
and apply State A’s statute, which a federal court in State B would have
to follow. If all this confuses you, just remember that a federal court in
State B will do whatever a state court in State B would do on “substan-
tive” issues.

b. Law Is Unclear in Other Situations

Outside these areas, when there is no federal directive on point, it is
often difficult to determine whether an issue is substantive or proce-
dural for Erie purposes. The Supreme Court has given different “tests”
at different times on this point, and has failed to integrate the tests
comprehensively. One such test is outcome determination, which
holds that an issue is substantive if it substantially affects the outcome
of the case. [Guaranty Trust Co. v. York, supra] Another test is balance
of interests, in which the court weighs whether the state or federal
judicial system has the greater interest in having its rule applied.
[Byrd v. Blue Ridge Electric Cooperative, Inc., 356 U.S. 525 (1958)]
Yet another test is forum shopping deterrence, which directs that the
federal judge should follow state law on the issue if failing to do so
would cause litigants to flock to federal court. [Hanna v. Plumer, supra]
If you get a question on an “unclear” area at all, it will most likely be on
an essay. Just discuss each approach and come to some reasonable
conclusion.

3. Statutes Involving Both Substance and Procedure

Sometimes, a state statute or rule may be both substantive and procedural.
In one case, the state tort reform law relaxed the standard for granting a
new trial, making it easier to grant a new trial than under the basic federal
standard. Also, the state appellate court was charged with the responsibility
to consider whether a new trial should be ordered. In a diversity case under
this state law, the standard for granting a new trial was held to be substan-
tive, so the federal court had to apply the state standard for granting a new
trial. However, the requirement that the appellate court consider whether a
new trial should be ordered was held to be procedural, so a federal trial court
would determine whether a new trial should be ordered, using the aforemen-
tioned state standard, rather than an appellate court. [Gasperini v. Center

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for Humanities, Inc., 518 U.S. 415 (1996)—in diversity case, federal trial court
applied New York “excessive damages” standard for new trial rather than
federal “shock the conscience” standard]

4. Interpreting State Law

The federal court is bound to apply the substantive state law that would be
applied by the highest court of the state. If the state courts have not decided
the issue that is before the federal court, or if the decisions on point are old
and no longer current with the decisions of other jurisdictions, the federal
court may consider the law of other jurisdictions in reaching its decision.
However, the focus of the federal court is to determine what decision the
highest court of the state would reach if confronted with the issue.

a. De Novo Review of District Court’s Decision

On appeal, the federal appellate court reviews the federal trial judge’s
decision as to state law de novo. [See Salve Regina College v. Russell,
499 U.S. 225 (1991)]

b. Subsequent State Court Decisions

If the highest state court renders a decision on an issue after the federal
court has made its determination, the decision of the district court may
be changed to conform to the new decision of the highest state court
until the disposition of the final federal appeal. [See Thomas v. American
Home Products, Inc., 519 U.S. 913 (1996)]

E. FEDERAL COMMON LAW

1. When Federal Courts Create Federal Common Law Rules

Although Erie held that federal courts cannot create “federal general
common law” rules to govern state-law claims, Erie did not change the
authority of federal courts to create “federal common law” (that is, to rely on
federal precedent).

a. Interpretation of Federal Statute or Constitution

The federal courts create substantive rules of federal common law when
interpreting the meaning of federal statutes or the federal Constitution.

b. Creating Rules to Fill Gaps in Federal Regulatory Schemes

The federal courts may also create substantive rules of federal law
based on the determination that Congress has expressly or by implica-
tion authorized the federal courts to do so for the purpose of filling in
gaps or silences in a federal regulatory statute.

1) Formulating Uniform Federal Standard

In some instances, the federal courts have determined that a
uniform judge-made standard is necessary as a matter of federal
common law. Examples of such cases include suits involving
the rights and obligations of the United States, admiralty cases,

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border disputes between states, and disputes involving relations

with foreign states. But ordinarily, in the absence of congressional
authorization to formulate substantive rules of decision, federal
common law will not be created outside these areas.

EXAMPLE
Even though no federal statute supplies a rule of decision,
Clearfield Trust Co. v. United States, 318 U.S. 744 (1943), held that
rules for the negotiability of checks payable by the United States
should be governed by uniform judge-made federal law rather than
by state law.

2) Borrowing State Standard

When borrowing a legal rule from state-law authority, a federal
court may select a rule that is used by a majority of state courts. Or,
if there is little need for federal uniformity, and if the parties might
expect that state law would apply, then the borrowed rule may be
the one that would be applied under the law of the state forum.

EXAMPLE
In De Sylva v. Ballentine, 351 U.S. 570 (1956), the Court held that
the meaning of the term “children” in the federal copyright statute
should be defined in accordance with ordinary usage under state
law, and that it would be up to the federal courts to determine
which state’s definition would be applicable.

2. When Federal Courts Create Federal Implied Rights of Action

In some decisions, federal courts have exercised the authority to provide
judicial recognition for “implied” remedies in the form of causes of action that
are not specified in federal statutes or federal constitutional provisions that
establish particular rights.

a. Implied Right of Action Based on Federal Statute

Initially, federal courts looked to several factors in determining whether
an unspecified remedy could be viewed as “implied” in a statute. These
factors looked to the questions of whether the plaintiff belonged to
a class for whose special benefit the statute was enacted, whether
evidence of legislative intent supported an implied remedy, whether
such a remedy would be consistent with the underlying purposes of
the legislative scheme, and whether a remedy should not be implied
because the cause of action was one traditionally relegated to state
law. This approach led to the recognition, for example, of an implied
cause of action under the nondiscrimination provision of Title IX (a law
prohibiting discrimination on the basis of gender in schools receiving
federal funds).

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1) Need for Affirmative Congressional Intent

More recently, federal courts have required a showing of affirma-
tive congressional intent for implied remedies in federal statutes,
the absence of which led to the judicial rejection of an implied
cause of action under the nondiscrimination provisions of Title VI
of the Civil Rights Act.
b. Implied Right of Action Based on Constitution
The federal courts have recognized several implied causes of action for
damages against federal officials for the violation of particular consti-
tutional rights. These rights include the Fourth Amendment protection
from unreasonable searches and seizures, the Equal Protection right
to nondiscrimination in employment on the basis of gender under the
Fifth Amendment, and the right of a prisoner to not be deprived of
medical treatment under the Eighth Amendment’s prohibition on cruel
and unusual punishment. In other cases, federal courts have declined
to recognize additional implied remedies based on the existence of
alternate federal statutory remedies. Note that the violation of federal
constitutional rights by a federal official is not cognizable under 42
U.S.C. section 1983 (which provides for a cause of action for constitu-
tional deprivations performed under color of law because section 1983
applies only to defendants who are state or local officials).

F. EXCEPTIONS TO DIVERSITY OF CITIZENSHIP JURISDICTION

For historical reasons, even though the requirements for diversity of citizenship
jurisdiction are satisfied, federal courts will not exercise jurisdiction over domestic
relations or probate proceedings.
1. Domestic Relations
The federal court will not take jurisdiction over actions “involving the
issuance of a divorce, alimony or child custody decree.” [Akenbrandt v.
Richards, 504 U.S. 689 (1992)] Note that this exception is quite narrow.
Federal courts may maintain actions upon state court decrees, such as those
for alimony. They also may hear cases involving intra-family torts. They refuse
only cases involving issuance of decrees of divorce, alimony, or child custody.
2. Probate Proceedings
Federal courts will not entertain cases to probate a decedent’s estate. To fall
within this exception to diversity of citizenship jurisdiction, however, the claim
asserted must involve actual probate or annulment of a will or seek to
reach property in the custody of a state probate court. [Marshall v. Marshall,
547 U.S. 293 (2006)]

EXAMPLE
The federal court had jurisdiction over a claim for damages for alleged tor-
tious interference with testator’s efforts to create a trust benefiting the plaintiff
(who was Anna Nicole Smith). [Marshall v. Marshall, supra]

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G. MULTIPARTY, MULTIFORUM TRIAL JURISDICTION ACT

The Multiparty, Multiforum Trial Jurisdiction Act applies to accidents meeting the
statutory definition. The principal points are these:

1. Requirements

a. The Action
The Act grants jurisdiction to federal district courts of civil actions that
(1) arise “from a single accident, (2) where at least 75 natural persons
have died in the accident (3) at a discrete location.” [28 U.S.C. §1369(a)]

b. Minimal Diversity
Such jurisdiction attaches based on minimal diversity of citizenship;
thus, all that is required is that at least one plaintiff be of diverse citizen-
ship from at least one defendant.

c. One Additional Condition

In addition, however, one of three other conditions must be satisfied:
either (1) a defendant resides in a different state from the place where
a substantial part of the accident took place (even if the defendant also
resides where the accident took place); (2) any two defendants reside
in different states; or (3) substantial parts of the accident took place in
different states.

EXAMPLE
A popular nightclub frequented by tourists and located in Massachusetts
burns down. Eighty patrons from various states, including some from
Massachusetts, are killed in the fire, and another 40 are injured. The
owners of the nightclub are from Massachusetts and New York. Jurisdic-
tion would be authorized even though some plaintiffs and the defendant
are from Massachusetts.

d. Limitation on Jurisdiction
The federal court must abstain from hearing a case that meets the
criteria in a. - c. above if (1) the substantial majority of all plaintiffs are
citizens of a single state of which the primary defendants are also
citizens; and (2) the claims asserted by the plaintiffs will be governed by
the laws of that state.

EXAMPLE
Same facts as above, except now 115 of the potential plaintiffs are from
Massachusetts, and the club is owned only by a citizen of Massachu-
setts. The limitation would arguably apply, given the Massachusetts con-
nection and the fact that Massachusetts law will likely apply.

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2. Intervention
Anyone “with a claim arising from the accident” is permitted to intervene
as a plaintiff, even if she could not have maintained an action in the district
where the case is pending. [28 U.S.C. §1369(d)]

EXAMPLE
Same facts as the first example. An injured patron from Massachusetts with a
claim less than $75,000 would be able to intervene as a plaintiff in the case.

3. Service of Process
Finally, the Act provides for nationwide service of process. [28 U.S.C. §1697]

IV. FEDERAL QUESTION JURISDICTION

A. INTRODUCTION
It is difficult to formulate a summary of the case holdings as to when an action
“arises under” federal law. The best one can do, perhaps, is the following: A case
arises under federal law if the plaintiff is alleging a right or interest that is substan-
tially founded on federal law, which consists of federal common law, federal
constitutional law, federal statutory law, treaty law, and federal administrative
regulations. For exam purposes, there is no amount in controversy requirement for
federal question cases.

B. FEDERAL QUESTION MUST APPEAR IN THE COMPLAINT

The federal question must appear as part of the plaintiff’s cause of action as
set out in a well-pleaded complaint. It is therefore sometimes necessary to deter-
mine whether certain allegations are proper in pleading the cause of action, and
whether the federal element is essential to the plaintiff’s case.

1. Defendant’s Answer or Defense Is Irrelevant

The content of the defendant’s answer is not relevant; the existence of a
defense based on federal law will not give federal question jurisdiction.
Likewise, the court may not look to a counterclaim asserted by the defendant
to determine whether the plaintiff’s complaint states a federal question claim.
[Holmes Group, Inc. v. Vornado Air Circulation System, Inc., 535 U.S. 826
(2002)]

2. Anticipation of a Defense
Similarly, a complaint does not create federal question jurisdiction if it alleges
federal issues only in anticipation of some defense.

EXAMPLE
A sues B for specific performance of a contract and alleges that B’s refusal to
perform is based on B’s erroneous belief that federal law prohibits his perfor-
mance. No federal question jurisdiction exists because the federal question

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presented by the plaintiff’s complaint is merely in anticipation of B’s defense.

[Louisville & Nashville Railroad v. Mottley, 211 U.S. 149 (1908)]

C. IMPLIED FEDERAL RIGHT OF ACTION

It is not essential that the federal statute expressly provide for a civil cause of
action for an alleged violation. Thus, federal question jurisdiction was held to exist
in an action involving an alleged violation of the Fourth and Fifth Amendments
[Bell v. Hood, 327 U.S. 678 (1946)], although neither the Constitution nor the
act involved created a “remedy” for the wrongs complained of. However, not all
federal provisions creating duties are held to create an implied private right of
action. [Cort v. Ash, 422 U.S. 66 (1975)]

D. FEDERAL CORPORATIONS
Federal question jurisdiction does not arise merely from the fact that a corporate
party was incorporated by an act of Congress unless the United States owns more
than one-half of the corporation’s capital stock, in which case it is treated as a
federal agency that can sue or be sued on that basis in federal court. [28 U.S.C.
§1349]

E. SUPPLEMENTAL (PENDENT) JURISDICTION OVER STATE CLAIMS

As previously discussed (supra, III.B.5.), claims sometimes can invoke supple-
mental jurisdiction when the supplemental claim arises from a common nucleus
of operative fact as the original claim, whether the case got into federal court by
diversity of citizenship or federal question jurisdiction. Supplemental jurisdiction in
federal question cases is discussed here.

1. Supplemental (Pendent) Claims

In some cases, the plaintiff will have both federal and state claims against
the defendant. Although there may be no diversity, the federal court has
discretion to exercise supplemental (pendent) jurisdiction over the claim
based on state law if the two claims “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.” [United Mine Workers of America v.
Gibbs, 383 U.S. 715 (1966)] Essentially, this means that the two claims must
arise from the same transaction or occurrence. The supplemental jurisdic-
tion statute [28 U.S.C. §1367(a)] adopts this standard for the grant of supple-
mental jurisdiction.

EXAMPLE
P, a citizen of Arkansas, asserts two claims against D, who is also a citizen
of Arkansas, in federal court. Importantly, both claims arise from a common
nucleus of operative fact. Claim #1 is for violation of a federal statute, and thus
invokes federal question jurisdiction. Claim #2 is based on state law, and thus
does not invoke federal question jurisdiction (because it is based on state,
not federal, law). Also, Claim #2 does not invoke diversity of citizenship (be-
cause P and D are citizens of the same state). Nonetheless, Claim #2 invokes

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supplemental jurisdiction because it arises from a common nucleus of opera-

tive fact as the claim that invoked federal question jurisdiction.

a. Effect of Dismissal of Federal Claim on Supplemental (Pendent)

Claim
The court may exercise supplemental (pendent) jurisdiction over the
state claim even though the federal claim is dismissed on the merits.
However, the state claim should probably also be dismissed (without
prejudice) if the federal claim is dismissed before trial. Indeed, the
supplemental jurisdiction statute provides that the court may refuse
supplemental jurisdiction if the federal claim is dismissed, if the state
claims are complex or novel, or if the state claims predominate substan-
tially over federal claims.

2. Pendent Parties
Pendent party jurisdiction is relevant in cases in which the plaintiff sues more
than one defendant, there is federal jurisdiction over the claim against one
defendant, and the claim against the second defendant does not invoke
federal question or diversity of citizenship jurisdiction. Under the supple-
mental jurisdiction statute, the claim against the second defendant might
invoke supplemental jurisdiction if it arises from a common nucleus of opera-
tive fact as the claim against the first defendant. Pendent party jurisdiction
also can arise when multiple plaintiffs assert claims against one defendant.

EXAMPLES
1) A school employee from State A asserts a section 1983 claim against a
school district and joins a transactionally related state law (not federal ques-
tion) claim against the principal. The school employee and the principal are
citizens of the same state. The claim against the principal cannot invoke
federal question jurisdiction (because it is based upon state law) and cannot
invoke diversity of citizenship jurisdiction (because the school employee and
the principal are citizens of the same state). The claim against the principal
falls within the court’s supplemental jurisdiction, however, because it arises
from a common nucleus of operative fact as the claim that invoked federal
question jurisdiction and is asserted by the plaintiff in a federal question
case.

2) The estate of a husband asserts a section 1983 claim for violation of his
constitutional rights against the sheriff arising out of his arrest and death while
in custody. In the same case, the wife asserts a state law claim against the
sheriff based on loss of consortium. The wife and sheriff are citizens of the
same state. The claim by the wife falls under the court’s supplemental jurisdic-
tion because it arises from a common nucleus of operative fact as the federal
question claim by the estate against the sheriff.

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F. SPECIFIC STATUTORY GRANTS

1. Exclusive Jurisdiction
Congress has expressly provided that the jurisdiction of the federal courts
shall be exclusive of state courts in:
a. Bankruptcy Proceedings [28 U.S.C. §1334]
b. Patent and Copyright Cases [28 U.S.C. §1338]
c. Many Cases Where United States Is Involved
Cases involving fines, penalties, or forfeitures under the laws of the
United States; crimes against the United States; tort suits against the
United States; or customs review. (Because of the doctrine of sovereign
immunity, there is no jurisdiction in the courts to hear lawsuits against
the United States unless the United States has consented to be sued.)
d. Foreign State—Caveat
28 U.S.C. section 1441(d) permits a foreign state (or agency thereof), if
sued in state court, to remove the action to federal court.
e. Postal Matters [28 U.S.C. §1339]
f. Internal Revenue [28 U.S.C. §1340]
g. Securities Exchange Act [15 U.S.C. §78aa]

V. VENUE

A. SUBJECT MATTER JURISDICTION DISTINGUISHED

Subject matter jurisdiction and venue are very often confused. Subject matter
jurisdiction is the power of the court to adjudicate the matter before it, whereas
venue relates to the proper geographic district in which to bring the action. [28
U.S.C. §1390] Subject matter jurisdiction is a question of power or authority; venue
is a question of geography. Subject matter jurisdiction cannot be conferred by
agreement; venue can be. A court can have subject matter jurisdiction without
being a proper venue.

EXAMPLE
Smith, a citizen of Georgia, brings a personal injury suit arising in Florida against
Jones, a citizen of New York. Suit is brought in the federal district court in California.
The amount in controversy exceeds $75,000. Under section 1332, the district court
has diversity jurisdiction, but venue is improper and the case is subject to transfer
or dismissal.

B. GENERAL RULES

1. General Rules for Most Civil Actions

Venue in civil actions in the federal courts is proper in:

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(i) A federal district court in which any defendant resides, if all defendants
are residents of the state in which the district is located;

(ii) A federal district court in which a substantial part of the events or

omissions giving rise to the claim occurred, or a substantial part of
property that is the subject of the action is situated; or

(iii) If there is no federal district court anywhere in the United States which
satisfies (i) or (ii), a judicial district in which any defendant is subject to
the court’s personal jurisdiction with respect to the action.

[28 U.S.C. §1391] Note: Unlike past federal practice and the existing practice
in many states, local actions (like those involving real property) and transi-
tory actions (like tort actions) are treated under the same venue provision in
federal court.

EXAMPLE
A roofing contractor from Nebraska entered into a contract to put a new roof
on a homeowner’s home in Kansas. The roofing contractor did a poor job,
resulting in substantial damages to the homeowner. Venue in this case would
be in either Nebraska (in which the roofing contractor resides) or Kansas (in
which the home is located, as it is the place where a substantial part of the
events or omissions occurred).

2. Special Venue Provisions

There are many venue provisions applicable only to specified types of
actions. One is worth noting: Where the defendant is the United States or an
agency thereof, or an officer, employee, etc., of the United States acting in
his official capacity, a civil action may be brought in the federal district where:
(1) a defendant resides; (2) a substantial part of the events or omissions
giving rise to the action occurred, or a substantial part of property that is the
subject of the action is situated; or (3) the plaintiff resides if no real property
is involved in the action. [28 U.S.C. §1391(e)]

C. RESIDENCE

1. Natural Persons
For venue purposes, a natural person, including an alien lawfully admitted for
permanent residence in the United States, is deemed to reside in the federal
judicial district in which that person is domiciled. [28 U.S.C. §1391(c)(1)]

2. Business Entities
An entity with the capacity to sue and be sued in its common name under
applicable law, whether or not incorporated, is deemed to reside, if a defen-
dant, in any federal judicial district in which the defendant is subject to the
court’s personal jurisdiction with respect to the civil action in question. [28
U.S.C. §1391(c)(2)]

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a. Note for Corporations

In a state having more than one federal judicial district and in which a
corporate defendant is subject to personal jurisdiction at the time the
action is commenced, the corporation is deemed to reside in any federal
district in that state within which the corporation’s contacts would be
sufficient to subject the corporation to personal jurisdiction if the federal
district were a state. If there is no such federal district, the corporation
is deemed to reside in the federal district within which it has the most
significant contacts. [28 U.S.C. §1391(d)]

3. Nonresident of United States

A defendant who is not a resident of the United States—whether a U.S.
citizen or an alien—may be sued in any federal district. The joinder of such a
defendant, however, is disregarded in determining where the action may be
brought with respect to any other defendants. [28 U.S.C. §1391(c)(3)]

EXAMPLE
While on a trip in Wyoming, a driver from Kansas has a car accident with a
driver from Germany. The Kansan could sue the German in any federal district
within the United States.

COMPARE
If a citizen from Montana were also involved in the accident, the driver would
be limited to where venue is proper as to the Montana citizen—either Wyo-
ming (the place of the accident) or Montana (the residence of the Montana
citizen).

D. IMPROPER VENUE MAY BE WAIVED

Unlike jurisdiction over the subject matter, venue may be waived by the parties.
Venue is considered to be waived unless timely objection (in a pre-pleading
motion or, where no such motion is made, in the answer) is made to the improper
venue.

E. TRANSFER

1. Original Venue Proper

Section 1404(a) allows transfer to another federal district where the action
“might have been brought” or “to which all parties have consented,” even
though venue has been properly laid in the court before which the motion to
transfer is made. The policy behind section 1404 is that while venue may be
correct, the parties or the witnesses might be greatly inconvenienced by the
trial in the original forum. By balancing the relative convenience offered by
the alternative forums, the original court has discretion to transfer the action
to a court in which the action “might have been brought” in conformity with
the rules governing: (1) subject matter jurisdiction, (2) in personam jurisdiction
over the defendant, and (3) venue. Another alternative is transfer to a federal

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court to which all parties have consented (even if venue ordinarily would not
be proper there). If the superior forum is in another judicial system, the court
may dismiss or stay the action under the doctrine of forum non conveniens.

2. Original Venue Improper

When a case is filed in an improper federal venue, a court must dismiss, or,
in “the interests of justice,” transfer the case to a federal venue in which it
could have been brought (in other words, subject matter jurisdiction, personal
jurisdiction, and proper venue must exist). [28 U.S.C. §1406(a)] Transfer is
more appropriate than dismissal except in extraordinary circumstances.

3. Effect of Forum Selection Clauses

If the transaction involved in the suit included an agreement as to where a
suit should be brought in case of litigation (that is, a forum selection clause),
the clause will be enforced by means of a motion to transfer “in the inter-
ests of justice” unless exceptional public interest factors dictate otherwise.
[Atlantic Marine Construction Co. v. United States District Court for the
Western District of Texas, 571 U.S. 49 (2013)]

4. Original Court Lacks Personal Jurisdiction

The Supreme Court has held that the original court’s lack of personal
jurisdiction over the defendant does not affect its power to transfer a case
under section 1406(a). [Goldlawr, Inc. v. Heiman, 369 U.S. 463 (1962)] There
is also authority to support the conclusion that the same is true in transfers
under section 1404(a). [See, e.g., United States v. Berkowitz, 328 F.2d 358
(3d Cir. 1964)]

F. LAW APPLICABLE UPON TRANSFER

1. Original Venue Proper

If venue in the transferring court was proper, the transferee court applies
the law the transferor court would apply, including its choice of law rules,
unless the transfer was ordered to enforce a forum selection clause. [Atlantic
Marine Construction Co., supra] This is true even where the plaintiff initiates
a transfer for convenience after initially choosing the inconvenient forum.
[Ferens v. Deere Co., 494 U.S. 516 (1990)]

EXAMPLE
P sued D in a federal district court in Pennsylvania. D moves to transfer to the
Federal District Court of Massachusetts. The court must apply the law that would
have been applied in Pennsylvania. [Van Dusen v. Barrack, 376 U.S. 612 (1964)]

2. Original Venue Improper

A transfer on the ground that the original choice of venue was improper
generally results in a change of the law applicable under Erie; that is, the law
of the transferee court will apply.

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EXAMPLE
P sued D in the federal district court in Maryland. D moved to transfer to New
York under section 1406(a) because Maryland was an improper venue. The
law applied in the transferee court (New York) would be its own law.

VI. REMOVAL JURISDICTION

A. ORIGINAL JURISDICTION NECESSARY

A defendant sometimes may remove an action that was brought by the plaintiff
in state court when the action could have originally been brought in the federal
courts (that is, the case satisfies the requirements for diversity or federal question
jurisdiction). [28 U.S.C. §1441]

EXAMPLE
While in State A, a law firm partner (also from State A) is driving his $200,000
Lamborghini down the road when he hits a poor, heavily indebted law student from
State B. The Lamborghini is totaled. The partner sues the student in a State A state
court for the value of his car. The student may remove the case to federal court in
State A (see C., infra).

1. When
Complete diversity must exist when the original complaint is filed in state
court and when the case is removed.

2. Federal Defense Insufficient

A defendant cannot remove on the ground that she has a defense grounded
in federal law, since the existence of a federal defense is insufficient to confer
original federal question jurisdiction under section 1331.

EXAMPLE
To settle a claim, a railroad gave a passenger a lifetime pass on its railroad. After
a number of years passed, Congress made the provision of such lifetime passes
illegal. The passenger sues the railroad for breach of contract. The fact that
the passes are now illegal is a federal defense to the breach of contract action,
which does not give the federal court jurisdiction based on a federal question.

3. State Court Need Not Have Had Jurisdiction

By statute, the federal court may hear and decide a claim in a removed civil
action even where the state court had no jurisdiction because the action is
exclusively federal.

B. ONLY DEFENDANT MAY REMOVE; ALL MUST SEEK REMOVAL

Only defendants can exercise the right of removal. Thus, a plaintiff cannot
remove on the ground that a counterclaim against him could have been brought

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independently in a federal court. If there is more than one defendant, all defen-
dants who have been properly joined and served must join in or consent to the
removal. (Note: The Class Action Fairness Act relaxes this rule for some class
actions. See VIII.G.2.d., infra.)

C. VENUE
Venue for an action removed under section 1441(a) lies in the federal district court
“embracing the place where such [state] action is pending.” In removal cases,
section 1441(a) determines proper venue, not section 1391(a). Thus, in a properly
removed case, venue is proper in the federal court of the state where the case
was pending, even if venue would have been improper had the plaintiff originally
filed the action in the federal district court of that state.

EXAMPLE
Linda, a citizen of State A, sues Jim, a citizen of State B, in the state court in
State Z in the amount of $2 million for negligent acts Jim committed in State
B. Jim may remove the case to the federal district court of State Z because the
court has diversity jurisdiction and Jim is not a citizen of State Z. Although under
section 1391(a) venue would have been improper if Linda had filed her case in
the State Z federal district court, under section 1441(a) venue is proper in the
federal district court of State Z because it “embraces the place” where the state
court action was pending.

D. DEFENDANT MAY REMOVE SEPARATE AND INDEPENDENT FEDERAL

QUESTION CLAIM
If a case filed in state court contains a claim that would arise under federal law,
and it is joined with state law claims that do not come within the court’s diversity
or supplemental jurisdiction, the entire case can be removed to federal court.
The federal court, however, must then sever and remand the state law claims to
state court. Only those defendants against whom a federal claim is asserted are
required to join in the removal.

E. DISMISSAL OF NONDIVERSE PARTY ALLOWS REMOVAL

If no federal question is involved and diversity jurisdiction does not exist because
a party is a co-citizen of an opposing party, removal will be permitted if the nondi-
verse parties are thereafter dismissed from the action and there is complete diver-
sity between the remaining parties, subject to the limitations discussed below.

F. LIMITATIONS ON REMOVAL IN DIVERSITY OF CITIZENSHIP CASES

1. Defendant Citizen of Forum State

When the jurisdiction of the federal court is based solely on diversity and
one of the defendants is a citizen of the state in which the state action
was brought, the action is not removable. [28 U.S.C. §1441(a)(2)] Rationale:
Diversity jurisdiction was created to ensure that defendants could get a fair
hearing in a neutral court, rather than in a state court that might favor its own

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citizens. When the state court involved is a court in the state in which the
defendant lives, no such concern arises.

EXAMPLE
Jones, a citizen of State A, sues Brown, a citizen of State B, and Smith, a
citizen of State C, in the state court in State B. Although diversity jurisdiction
would have existed originally (assuming the jurisdictional amount had been
met), Brown and Smith cannot remove. Had Jones brought the action in the
state court in State A, Brown and Smith could remove. [28 U.S.C. §1441(b)]

When the original jurisdiction of the district court would have been based on
a federal question, the defendants can remove without regard to the citizen-
ship of the parties.

2. One-Year Rule
A case may not be removed on the basis of diversity of citizenship jurisdic-
tion more than one year after it was commenced in state court. [28 U.S.C.
§1446(b)] Note also that a case must be removed no later than 30 days after
the defendant discovers, through service of an amended pleading, order, etc.,
that the case has become removable (see G.2., infra). Because most cases will
be removable, if at all, at commencement of the action, the one year deadline
generally will not be difficult to meet. The provision may be important, however,
if the case is not removable at the outset, but becomes removable later.

But note: The one year rule does not apply to removals based on federal
question jurisdiction, nor does it apply if the district court finds that the plain-
tiff has acted in bad faith (for example, by fraudulently joining a nondiverse
party or by intentionally failing to disclose the true amount in controversy) in
order to prevent a defendant from removing the action.

EXAMPLES
1) A homeowner from Illinois sues a contractor from Wisconsin in an Illinois
state court, seeking damages of $100,000. The case is removable at its com-
mencement because the case meets the requirements of diversity of citizen-
ship jurisdiction and no defendant is a citizen of Illinois. The contractor must
remove the case within 30 days of being served with process.

2) A pedestrian from Illinois sues a driver from Illinois and a trucker from
Wisconsin in an Illinois state court based on joint liability arising out of a car
accident. The pedestrian seeks damages of $250,000. The case is not re-
movable at its commencement because the pedestrian and the driver share
Illinois state citizenship. However, if the pedestrian later voluntarily dismisses
the claim against the Illinois driver, the case becomes removable. The trucker
must then remove within 30 days. But if more than one year has passed since
the state case was commenced, the trucker generally cannot remove on the
basis of diversity of citizenship.

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G. PROCEDURE FOR REMOVAL

1. Notice of Removal
A defendant seeking removal must file a notice of removal—containing a
short and plain statement of the grounds for removal and signed under Rule
11—in the federal district court in the district and division within which the
action is pending. A copy of the notice should be sent to the other parties
and to the state court. Once this is done, the state court can no longer deal
with the case. If the state court attempts to do so, the federal court can enjoin
the state court’s action.

a. Allegation of Amount in Controversy

In cases seeking nonmonetary relief, or in cases in which the plaintiff
(under state law) is not required to state an amount in controversy or in
which recovery may be in excess of the damages stated, the defendant
may state that the amount in controversy exceeds $75,000, and the
district court may keep the case if it finds, by a preponderance of the
evidence, that the amount does exceed $75,000.

2. Thirty-Day Rule
Generally, a defendant must file a notice of removal within 30 days “after
receipt by or service on that defendant of the initial pleading or summons.”
[28 U.S.C. §1446(b)] The statute is intended to address different state
approaches to the order of filing a case and serving process. For instance, in
some states, the defendant is served with a summons but not a copy of the
complaint. For such defendants, the 30-day removal period would start to
run upon formal receipt of the complaint. Informal notice does not start the
ticking of the 30-day clock.

EXAMPLE
A plaintiff files an action against a defendant in state court. The plaintiff e-
mails a “courtesy copy” of the complaint to the defendant, but does not have
formal process (a summons and complaint) served for two weeks. The defen-
dant removes the case within 30 days after being served with process, but
more than 30 days after receiving the e-mailed copy of the complaint. Was re-
moval timely? Yes. The 30 days ran from service of process on the defendant.
[Murphy Brothers v. Michetti Pipe Stringing, Inc., 526 U.S. 344 (1999)]

a. Effect of Multiple Defendants on the Thirty-Day Rule

If defendants are served at different times, and a later served defendant
initiates timely removal, the earlier served defendant may join in the
removal even though his 30-day period for initiating removal may have
expired.

b. Effect of Amendment on Thirty-Day Rule

A defendant also may file a notice of removal within 30 days of receipt
of an amended pleading, motion, order, or other court paper (such as

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discovery or other state court pleadings) that shows that a nonremov-

able case (or an apparently nonremovable case) is in fact removable.
[28 U.S.C. §1446(b)(3)] This provision is significant in states that either
prohibit the plaintiff from alleging or do not require the plaintiff to allege
a specific amount of damages and in cases in which a nondiverse
defendant has been dismissed. In such cases, the 30-day window
to remove may begin much later than after the service of the initial
pleading.

3. Procedure After Removal

After removal, the case proceeds according to the federal rules of procedure.
Repleading is not necessary unless the court so orders. If the defendant has
not answered, she must answer or present the other defenses or objections
available to her under the Federal Rules within 21 days after being served,
or within seven days after filing the petition for removal, whichever period is
longer. Amendments may be made to pleadings filed before removal.

4. Right to Jury Trial

a. Demand for Jury Trial

The right to a jury trial in a case removed to a federal court may be
waived unless a timely demand for a jury trial is filed. If, at the time of
removal, all necessary pleadings have been served, a trial by jury will be
granted to a party so entitled. The removing party must file a demand
for jury trial within 14 days after the notice of removal is filed. The nonre-
moving party generally must file for jury trial within 14 days after service
on her of the notice of filing for removal.

b. Demand Not Required

A party who, prior to removal, has made an express demand for trial
by jury in accordance with state law, need not make a demand after
removal. In addition, if state law applicable in the court from which
the case is removed does not require the parties to make an express
demand in order to claim trial by jury, they need not make such demand
after removal unless the court directs they do so.

5. Remand

a. Based on Procedural Defects

A plaintiff can file a motion to have the case remanded (sent back) to
the state court. If the plaintiff bases this motion on a defect other than
subject matter jurisdiction (for example, a defect in removal procedures),
the motion must be brought within 30 days of removal.

b. Based on a Lack of Subject Matter Jurisdiction

A motion to remand for lack of federal jurisdiction, on the other hand,
may be made at any time. If the court erroneously fails to remand, but
the subject matter defect is cured before trial begins, failure to remand

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does not require that the federal judgment be vacated. [Caterpillar Inc. v.
Lewis, 519 U.S. 61 (1996)]

c. When All Federal Claims Have Been Adjudicated

The federal court has discretion to remand a case to state court once all
federal claims have been resolved, leaving only state claims over which
there would be no diversity jurisdiction. [28 U.S.C. §1447(c)]

d. Appellate Review of Remand Order

Appellate review of remand orders is generally barred [28 U.S.C.
§1447(d)]; however, appeal is allowed where a case involving civil rights is
remanded to state court. Remand orders can also be reviewed by means
of a mandamus if the remand represented a refusal to exercise plainly
proper jurisdiction. [Thermtron v. Hermansdorfer, 423 U.S. 336 (1976)]

VII. CONFLICT OF JURISDICTION BETWEEN STATE AND FEDERAL COURTS

A. FULL FAITH AND CREDIT EXTENDED TO FEDERAL COURTS

The Constitution’s Full Faith and Credit Clause—which requires a state to recog-
nize the legislative acts and judicial decisions of its sister states—is applicable only
where a state court judgment is sought to be enforced in another state. However,
an implementing federal statute provides that this Clause is extended to the
federal courts. Therefore, recognition of judgments is required between state and
federal courts and between federal courts.

B. INJUNCTIONS AGAINST PENDING STATE PROCEEDINGS

Potentially, a case also could be filed in state court by one party and in federal
court by the other party. In such a case, federal court is prohibited from enjoining
pending state court proceedings unless expressly authorized by statute (that is,
the interpleader provision expressly authorizes injunctions against state court
proceedings), or “where necessary in aid of its jurisdiction, or to protect or effec-
tuate its judgments.” [28 U.S.C. §2283] The case coming to a final decision first will
have preclusive effect on the other. (See XI.B., infra.)

C. INJUNCTIONS AGAINST THREATENED STATE CRIMINAL PROSECUTIONS

Threatened state criminal prosecutions, where state court proceedings have not
already been instituted, will be enjoined only when necessary to prevent irrepa-
rable harm which is clear and imminent and where appellate remedies in the
criminal case are clearly inadequate to provide relief. Such injunctions are almost
invariably denied, except where a federal right of free speech or assembly or a
federally protected civil right is threatened by the state criminal proceeding, and it is
shown that the prosecution is in bad faith or is for the purpose of harassment. Relief
by declaratory judgment will ordinarily be denied if an injunction would be denied.

D. INJUNCTIONS AGAINST STATE TAX PROCEDURES

A statute [28 U.S.C. section 1341] prohibits injunctions against the assessment,
levy, or collection of state taxes “where there is a plain, speedy and efficient

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remedy . . . in the courts of such State.” [See Rosewell v. LaSalle National Bank,
450 U.S. 503 (1981)]

VIII. THE FEDERAL RULES OF CIVIL PROCEDURE

A. COMMENCEMENT OF THE ACTION

An action is commenced by filing a complaint with the court. [Fed. R. Civ. P. 3]
Filing a complaint before the statute of limitations has run will satisfy the statute
of limitations in federal question cases and in diversity cases where the state rule
is similar. However, the Supreme Court has held that a state rule that an action is
commenced for purposes of the statute of limitations only upon service of process
must be applied in diversity cases. (For example, a state rule might say that filing
is effective for commencement purposes only if service of process is perfected
within a certain time period, like 90 days. That rule must be followed in diversity
cases.) [Walker v. Armco Steel Corp., 446 U.S. 740 (1980)]

B. SERVICE OF PROCESS
[Fed. R. Civ. P. 4]

1. Who May Serve

Any person who is at least 18 years old and not a party to the action may
serve the summons and complaint (together known as “process”). A party
may request that service be made by a United States marshal.

2. Time Limit for Service of Process

Service within the United States ordinarily must be made within 90 days of
the complaint being filed; however, the court must extend this period for
good cause shown.

3. How Service Is Made

a. Individuals
An individual may be served by (1) personal service, (2) service left
at the defendant’s usual place of abode with one of suitable age and
discretion residing therein, or (3) service upon an authorized agent of
the defendant. A person of suitable age and discretion is generally a
person who is older than 14 years.

b. Minors or Incompetent Persons

A minor or incompetent person must be served only in accordance with
the rules of the state in which service is to be made.

c. Corporations, Partnerships, Etc.

A corporation, partnership, or association may be served by serving
an officer, a managing or general agent, or an authorized agent of the
corporation.

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d. Service Under State Rules

In addition to the above methods (and other than on a minor, incompe-
tent person, or a person whose waiver has been filed), service may be
made as provided by the rules of the state in which the federal court sits
or the state in which service is to be effected, regardless of the basis of
subject matter jurisdiction. Hence, federal courts can use state long-arm
provisions.

e. Waiver of Service by Mail

The plaintiff may also request the defendant to waive service of process.
To request a waiver of service, the plaintiff must mail the defendant
certain items, the most important of which are a formal request to
waive service (that also informs the defendant of the consequences of
failing to waive service), two copies of the waiver form, and a copy of
the complaint. The defendant generally has 30 days (60 days if outside
the United States) from the date that the request was sent to return the
waiver.

1) Effect of Waiver
A defendant who waives formal service of process has 60 days
(90 days if outside the United States) from the date the request
was sent, instead of the usual 21 days (see F.3.b., infra) to answer
the complaint. The waiver of service does not waive the defen-
dant’s right to object to venue and jurisdiction.

2) Effect of Failure to Waive

If the defendant does not waive service of process, the plaintiff
must serve him using one of the methods described in 3., supra.
However, a defendant who is located in the United States is liable
for the cost of such service if he does not have good cause for
failing to waive service.

4. Parties Served Outside State

The court will acquire personal jurisdiction over parties served outside the
state:

a. Under statute and rules for extraterritorial service of the state in which
the federal court sits (domiciliaries, long arm jurisdiction, and in rem
jurisdiction);

b. If they are third-party defendants [Fed. R. Civ. P. 14] or required to be

joined for just adjudication [Fed. R. Civ. P. 19], if served within 100 miles
from the place where the summons was issued (but within the United
States);

c. If out-of-state service is permitted by federal statute (such as the inter-

pleader statute);

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d. For cases that involve a federal question, when a defendant is served

with process (or waiver thereof), provided that the defendant is not subject
to general jurisdiction in any state court, that the defendant has suffi-
cient contacts with the United States to warrant the application of federal
law, and that the exercise of jurisdiction is not prohibited by statute.

5. Parties Served in Foreign Country

Unless a federal law provides differently, a court will acquire personal juris-
diction over a party served in a foreign country:

a. As provided in an international agreement;

b. In absence of an agreement, as provided by the foreign country’s law

or as directed by a foreign official in response to a letter of request
(but the method must be reasonably calculated to provide notice);

c. Unless it is prohibited by the foreign country’s law, by personal service

or by mail, signed return receipt requested. (However, a corporation
may not be served by personal service, and a minor or incompetent
person may not be served by either of these methods); or

d. Any method the court orders (so long as the method is not prohibited
by international agreement).

6. Immunity from Process

The federal courts recognize the immunity from service of process of parties,
witnesses, and attorneys who enter a state to appear in another action. In
addition, if a party was induced by the plaintiff’s fraud or deceit to enter a
state so that he could be served, the service is invalid and the court does not
acquire personal jurisdiction.

EXAMPLE
A driver from State A is sued in two different cases in federal court in State
B. The driver has not yet been served in case one, and is set to be deposed
in State B for case two. If the driver were to be served in State B while being
deposed in case two, such service would not be effective.

C. TIME PERIODS

1. Counting Time
When a time period is expressed in days, the day of the event that triggers
the period is excluded, and the last day of the period is included, when
determining on what day an action must be taken. Intermediate Saturdays,
Sundays, and legal holidays are included, except that if the last day of the
period falls on a Saturday, Sunday, or legal holiday, the due date becomes
the next workday. Three days are added to the period when service of
the paper is made by mail, by leaving the paper with the clerk, or by other

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means to which the parties have consented. [Fed. R. Civ. P. 6(a)] Note: It is
unlikely that a question would expect you to get an exact date down without
providing you a calendar.

2. Extensions of Time
The district court may extend the period within which actions under the
Federal Rules must be performed (for example, when a paper is delivered
late in the day). However, certain time periods may never be extended. The
following motions must be filed, with no extensions, within 28 days after
entry of judgment: a renewed motion for judgment as a matter of law, a
motion to amend judgment, a motion for a new trial, a motion to amend
findings of fact in a nonjury case, and a grant of a new trial on the court’s
initiative. [Fed. R. Civ. P. 6(b)]

D. INTERLOCUTORY INJUNCTIONS
An injunction is an equitable remedy by which a person is ordered to act or
to refrain from acting in a specified manner. Injunctions may be granted at the
conclusion of a case as a remedy, but several types of injunctions may be granted
while a case is pending (broadly known as interlocutory injunctions). Interlocutory
injunctions are granted to maintain the status quo until a trial on the merits may
be completed. There are two main types of interlocutory injunctions: temporary
restraining orders (“TROs”) and preliminary injunctions. They differ in duration and
evidentiary requirements. Briefly, TROs usually are sought at the very beginning
of a case, can be issued without formal notice or an adversary hearing, and are of
limited duration. Preliminary injunctions require formal notice and an adversarial
hearing and they may last until the end of the case.

1. Temporary Restraining Order

A TRO usually is sought at the beginning of a case to prevent irreparable
injury that will result before a preliminary injunction hearing can be held.

a. Requirements for Ex Parte Temporary Restraining Orders

Generally, oral or written notice of the hearing for the issuance of the
TRO must be given before a TRO is issued. However, a court may grant
a TRO without notice of the hearing to the adverse party if three
requirements are met [Fed. R. Civ. P. 65(b), (c)]:

1) Specific Facts Showing Immediate and Irreparable Injury

The moving party must give specific facts in an affidavit or in the
verified complaint to establish that immediate and irreparable
injury will result to the moving party before the adverse party can
be heard in opposition.

EXAMPLE
The probability that the defendant would hide or dispose of the
subject matter of the litigation would be an adequate showing of
irreparable injury.

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2) Efforts to Give Notice

The moving party must certify in writing all efforts she made to
give notice of the hearing to the adverse party and/or the reasons
why notice should not be required.

3) Security
The moving party must provide some security, the amount of which
is determined by the court, to pay for any costs and damages
incurred by the adverse party if he was wrongfully enjoined or
restrained. The United States, its officers, and its agencies are not
required to give security.

b. Notice of Hearing vs. Actual Notice

Although a TRO may be issued without notice of the hearing, due
process requires that a person must receive actual notice (through
service of process or otherwise) of the TRO (or any other injunction for
that matter) before he may be held in contempt for violating it. [See Fed.
R. Civ. P. 65(d)]

c. Time Limit
The TRO will expire within 14 days unless the restrained party consents
to an extension or good cause is shown for an extension for a like
period. If the TRO is extended beyond 28 days from its issuance, it is
considered to be a preliminary injunction for purposes of appeal.

2. Preliminary Injunction
As mentioned above, like a TRO, a preliminary injunction is intended to
maintain the status quo while a trial is pending to prevent irreparable
injury that can arise before a full trial on the merits of the complaint can be
concluded. Unlike a TRO, a preliminary injunction is sought by a party prior
to a trial on the merits of the complaint. A preliminary injunction may not be
issued without formal notice to the adverse party. [Fed. R. Civ. P. 65(a)]

a. Requirements for a Preliminary Injunction

A preliminary injunction ordinarily will be granted when:

(i) The plaintiff will suffer irreparable harm before the conclusion of
the trial if the injunction is not granted;

(ii) The harm to the plaintiff if the injunction is not granted outweighs
the harm to the defendant if the injunction is granted;

(iii) The plaintiff shows that he is likely to be successful on the merits; and

(iv) The public interest favors granting the injunction.

Irreparable harm is the most important factor. If the party seeking injunctive
relief has an adequate remedy at law (for example, money damages will
adequately compensate the party), the injunction will be denied.

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E. PROVISIONAL REMEDIES
“Provisional remedies” provide for the pretrial seizure of property for the purpose
of securing satisfaction of a judgment that may be entered in the case. Federal
Rule 64 specifically authorizes the use of provisional remedies but notes that the
remedy’s precise name and the precise procedure to be used will be governed by
state law. Some of the more common remedies (which are also listed in Rule 64)
are:

(i) Garnishment—A court order directing that money or property in the hands of
a third party (for example, wages) be seized;

(ii) Attachment—A process by which another’s property is seized in accordance

with a writ or judicial order for the purpose of securing a judgment yet to be
entered (see II.E.2.a.3), supra, and II.E.2.b., supra, for some restrictions on the
use of attachment); and

(iii) Replevin—A process by which the plaintiff takes possession of and holds
disputed property during the lawsuit (possession pendente lite).

Procedure will vary from state to state, but the party seeking the remedy gener-
ally must make out a prima facie case on the underlying claim and show that the
property will likely not be available after trial if relief is not granted.

F. PLEADINGS
Pleadings serve the function of giving notice to the opposing parties.

1. Complaint
Each claim for relief should contain:

(i) A short statement of the grounds for the court’s jurisdiction;

(ii) A short statement of the claim showing that the pleader is entitled to
relief; and

(iii) A demand for judgment for relief, which may be in the alternative.

The federal pleading rules generally require only that a pleader put the other
side on notice of the claim being asserted; detailed assertions of facts under-
lying the claim generally are not required. However, the Supreme Court in
recent years has required that the plaintiff state facts supporting a plausible
(not just possible) claim. [Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007);
Ashcroft v. Iqbal, 556 U.S. 662 (2009)]

2. Pre-Answer Motions

a. Rule 12(b)
Prior to filing an answer, the defendant may, if he chooses, file a motion
and raise any or all of the following defenses:

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(i) Lack of subject matter jurisdiction;

(ii) Lack of personal jurisdiction;

(iii) Improper venue;

(iv) Insufficient process;

(v) Insufficient service of process;

(vi) Failure to state a claim upon which relief can be granted (that is,
even if plaintiff’s allegations are taken as true, relief could not be
granted); or

(vii) Failure to join a party needed for a just adjudication (includes

necessary and indispensable parties).

The first defense (subject matter jurisdiction) may be raised at any

time—even for the first time on appeal. The defendant must raise
defenses (ii) through (v) at the time he files a motion or his answer (or
an amendment as of right thereto)—whichever is first. If he does not,
the defendant waives these defenses. The last two defenses (if limited
to failure to join an “indispensable party”) can be made at any time
prior to trial or “at trial.” The defendant may choose not to file a motion
and instead raise these defenses in his answer. A motion to dismiss for
failure to state a claim that raises issues outside of the pleadings will be
treated as a motion for summary judgment.

EXAMPLE
A plaintiff from Wyoming files a negligence claim against a corporate
defendant that is incorporated in Delaware and has its principal place of
business in New York. The claim arises out of a breach of contract for the
sale of goods in New York. The plaintiff files the case in Wyoming, and
the defendant files a motion to dismiss for lack of subject matter jurisdic-
tion without raising the issues of personal jurisdiction or incorrect venue.
The defendant has waived both those issues.

b. Motion for More Definite Statement

A party may move for a more definite statement before responding (by
filing an answer or reply) to a pleading (a complaint) that is so vague or
ambiguous that a responsive pleading cannot reasonably be framed.
The opposing party has 14 days after notice of an order to obey unless
the court fixes a different time. If not obeyed, the court may strike the
pleading or issue any other appropriate order. [Fed. R. Civ. P. 12(e)]

c. Motion to Strike
Before responding to a pleading or, if no responsive pleading is
permitted, within 21 days after service of the pleading, a party may

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move to have stricken any insufficient defense, or any redundant,

immaterial, impertinent, or scandalous matter. Such motion may also be
made upon the court’s initiative at any time. [Fed. R. Civ. P. 12(f)]

And note: An objection of failure to state a legal defense to a claim is not

waived merely because a motion to strike is not made. Such a defense
can be made by motion for judgment on the pleadings, or at the trial.
[Fed. R. Civ. P. 12(f), (h)]

3. Answer

a. Must Contain Denials or Admissions and Any Affirmative Defenses

The answer must contain a specific denial or admission of each
averment of the complaint, or a general denial with specific admissions
to certain averments. Where the defendant is without knowledge or
information sufficient to form a belief, a statement to that effect consti-
tutes a denial. A failure to deny constitutes an admission. The answer
must also state any affirmative defenses the defendant may have, such
as statute of limitations, Statute of Frauds, res judicata, etc.

b. Time
If no Rule 12 motion is made, a defendant who was formally served with
a summons and complaint must present an answer within 21 days after
service; a defendant to whom the complaint was mailed and who waives
formal service must answer within 60 days after the request for waiver
was mailed to her. If a Rule 12 motion is made and the court does not
fix another time, the responsive pleading is to be served within 14 days
of the court’s denial or postponement of the motion. The answer is due
within 14 days of service of a more definite statement if the court grants
a Rule 12(e) motion (see 2.b., supra). The same timing rules apply to
answers to counterclaims and cross-claims.

c. Counterclaims
Claims that the defendant may have against the plaintiff may be pleaded
in the answer as counterclaims. If a counterclaim arises out of the
same transaction or occurrence as one of the plaintiff’s claims, it is a
compulsory counterclaim and must be pleaded or it will be barred. Any
other counterclaim is permissive and may be asserted (assuming there
is subject matter jurisdiction) even though there is no connection at all
between it and the plaintiff’s claim.

d. Effect of Failure to Answer—Default and Default Judgment

A default is simply a notation in the case file by the clerk that there has
been no answer filed within the time permitted by the rules. A default
judgment is a judgment, with the same effect as any other judgment,
that is entered because the defendant did not oppose the case.

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1) Default
If a party against whom a judgment for relief is sought has failed to
plead or otherwise defend, and that fact is made to appear by affidavit
or otherwise, the clerk must enter the default of that party. Once the
default has been entered, the party may not proceed with the action
until the default has been set aside by the court. [Fed. R. Civ. P. 55]

2) Default Judgment
A defendant against whom a default is entered loses the right
to contest liability. However, the amount of damages must still
be determined before a default judgment may be entered, and
the defaulting party can be heard at the hearing for damages. A
default judgment may be entered against a minor or incompe-
tent person only if she has a personal representative who has
appeared in the case.

a) Default Judgment Entered by the Clerk

On request of the plaintiff, supported by an affidavit as to the
amount due, the clerk may sign and enter judgment for that
amount and costs against the defendant if: (1) the plaintiff’s
claim against the defaulted defendant is for a sum certain;
(2) the default was entered because the defendant failed
to appear; (3) the defaulted defendant is not an infant or
incompetent person; and (4) the damages amount requested
is not greater than the amount requested in the complaint.
[Fed. R. Civ. P. 54(c), 55(b)(1)]

3) Notice Required
If the defendant has “appeared,” even though he has not
answered, he must be notified of the request for a default
judgment by first-class mail at least seven days before the
hearing on the application for a default judgment. Appearance
includes any actual formal appearance before the court and any
other action that clearly indicates that the defendant intends
to contest the case on the merits (for example, the defendant’s
continued settlement negotiations). [Fed. R. Civ. P. 55(b)(2)]

4) Setting Aside a Default or a Default Judgment

An entry of default may be set aside for “good cause shown.”
Although not specifically required by the rules, a majority of courts
also will require that the defendant have a meritorious defense. A
default judgment may be set aside as provided in Rule 60 (relief
from judgments) (see IX.A., infra).

4. Inconsistent Claims or Defenses

A party may set out as many alternative claims or defenses as he may have
regardless of consistency.

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5. Special Pleading
The general rule of pleading is for short and plain statements, but there are
certain rules for special circumstances. [See Fed. R. Civ. P. 9] Note that in some
of these situations (notably concerning fraud, mistake, and special damages),
the Federal Rules require a party to state more detail than simply a short and
plain statement. These situations requiring greater specificity are narrow,
however, and the Supreme Court has emphasized that courts have no power
to impose such rigorous pleading requirements outside the areas addressed
by Federal Rule or statute. [Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002)—
lower court erred by requiring detailed pleading of employment discrimination
claim; Leatherman v. Tarrant County, 507 U.S. 163 (1993)—lower court erred by
requiring detailed pleading of civil rights case against municipality]

a. Capacity
Capacity or authority to sue or be sued need not be alleged. A person
wishing to challenge a party’s capacity has the duty to raise the issue by
specific negative averment, including such particulars as are within his
knowledge.

b. Fraud or Mistake
Circumstances that establish fraud or mistake must be stated with
particularity. By statute (the Private Securities Litigation Reform Act),
plaintiffs in federal securities fraud cases must plead with particularity
facts relating to the defendant’s acting with the required scienter.

c. Conditions of the Mind

Malice, intent, knowledge, or other conditions of the mind may be
averred generally.

d. Conditions Precedent
The performance of conditions precedent may be alleged generally.
Denial of performance or occurrence must be made specifically and
with particularity.

e. Official Document or Act

When dealing with an official document or act, it is sufficient to aver that
it was issued or the act was done in compliance with the law.

f. Judgment
It is not necessary to aver jurisdiction when a domestic or foreign court
or a board or officer renders a judgment or decision.

g. Timing
Time and place averments are material for the purpose of testing the
sufficiency of a pleading.

h. Special Damages
Elements of special damages must be specifically stated.

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6. Reply
A reply by the plaintiff to the defendant’s answer is required only if the court
orders the plaintiff to file one. A plaintiff need not reply to an affirmative
defense; he is deemed to deny or avoid the allegation of the defense. [Fed. R.
Civ. P. 7, 12]

7. Amendment and Supplemental Pleadings

a. Amendment
As a matter of course, a pleading may be amended once no later than
21 days of serving it or, if the pleading is one to which a responsive
pleading is required, 21 days after service of a responsive pleading or
a pre-answer motion. Thereafter, a pleading may be amended only by
the written consent of the adverse party or by leave of the court upon
motion. Leave of the court is “freely given when justice so requires.”
[Fed. R. Civ. P. 15]

1) Relation Back
For statute of limitations purposes, an amendment to a pleading
that arises from the same conduct, transaction, or occurrence
that was set forth (or was attempted to be set forth) in the original
pleading generally is deemed filed on the date that the original
pleading was filed. (In other words, the filing of the amend-
ment relates back to the filing date of the original pleading.)
Amendments also relate back if relation back is permitted by the
law that provides the statute of limitations applicable to the action.
[Fed. R. Civ. P. 15(c)] Of course, the original complaint must have
been filed within the applicable statute of limitations period.

2) Changing Party
An amendment changing the party or the naming of the party
against whom a claim is asserted relates back if the amendment
concerns the same conduct, transaction, or occurrence as the
original pleading and if, within the period for filing a complaint and
serving process, the party to be brought in by amendment:

(i) Has received such notice of the action that she will not be
prejudiced in maintaining her defense on the merits; and

(ii) Knew or should have known that, but for a mistake

concerning the proper party’s identity, the action would
have been brought against her.

[Fed. R. Civ. P. 15(c)(1)(C)] The Supreme Court has emphasized that

it is the knowledge of the party to be brought in by amendment
(not of the plaintiff) that is relevant. [Krupski v. Costa Crociere
S.p.A., 560 U.S. 538 (2010)] And again, the original complaint must
have been filed within the applicable statute of limitations period.

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3) Conform to Evidence
A pleading may be amended during or after trial, or even after
judgment, to conform to the evidence, reflect an issue actually
tried by the express or implied consent of the parties, or permit the
raising of new issues at trial. However, a party may not raise a new
claim or defense for which the opposing party had no opportunity
to prepare and which would result in prejudice in maintaining his
action or defense. [Fed. R. Civ. P. 15(b)]

4) Due Process Limitation

Amendments to pleadings must satisfy due process. For example,
in Nelson v. Adams U.S.A. Inc., 529 U.S. 460 (2000), the trial court
permitted a post-verdict amendment to add a defendant, and
simultaneously entered judgment against that new defendant. The
Supreme Court held that this procedure violated the new defen-
dant’s due process rights. The Federal Rules are meant to provide
an opportunity for an added defendant to respond to a claim, and
do not permit such “swift passage from pleading to judgment in
the pleader’s favor.”

b. Supplemental Pleadings
Supplemental pleadings relate to matters occurring after the date of the
original pleading. The permission of the court, upon motion, is required.
Permission may be granted even though the original pleading is defec-
tive in its statement of a claim for relief or a defense. [Fed. R. Civ. P. 15(d)]

8. Rule 11

a. Certification upon Presenting Paper to Court

In federal civil cases, the attorney (or unrepresented party), by
presenting to the court a pleading, written motion, or other paper, certi-
fies that to the best of her knowledge, information, and belief formed
after an inquiry reasonable under the circumstances:

(i) The paper is not presented for any improper purpose (harassment,
delay, etc.);

(ii) The legal contentions in the pleading are warranted by existing

law or a nonfrivolous argument for the modification of existing
law or the establishment of a new law;

(iii) The allegations and factual contentions either have, or upon

further investigation or discovery are likely to have, evidentiary
support; and

(iv) Denials of factual contentions are warranted on the evidence or,

where specified, are reasonably based on a lack of information and
belief.

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The certification applies anew each time an attorney or unrepresented

party “later advocates” a position contained in a pleading, motion,
etc. Thus, a paper that was not sanctionable when first presented may
become sanctionable if the attorney or party later advocating a position
contained in the paper has since learned or should have learned that
the position no longer has merit.

b. Sanctions
For violations of the requirements listed above, the court has discre-
tion to impose sanctions limited to what is sufficient to deter repetition
of such conduct by the parties or parties in other cases (that is, general
deterrence is a valid consideration). When appropriate, sanctions may
be imposed against parties, attorneys, or law firms, and may consist of
nonmonetary directives or monetary penalties including payment of
expenses and attorneys’ fees incurred because of the improper paper.
However, a monetary sanction may not be imposed on a represented
party for violation of a.(ii), supra.

1) Court’s Initiative
A court on its own initiative may enter an order describing the
matter that appears to violate Rule 11 and direct the proponent to
show cause why sanctions should not be imposed.

2) Party’s Motion
A party who believes that his opponent has presented a paper in
violation of Rule 11 may serve a motion for sanctions on the party. If
the party does not withdraw or correct the matter within 21 days, the
moving party may then file the motion for sanctions with the court.

G. JOINDER

1. Joinder of Parties

a. Capacity
An individual’s capacity to sue or be sued is determined by the law of
her domicile; the capacity of an organization (for example, an associa-
tion or partnership) is determined by the law of the state where the
federal court sits, except that a partnership or unincorporated associa-
tion always has capacity where a substantive federal right is asserted by
or against it.

b. Compulsory Joinder (Indispensable Parties)

In certain situations, a plaintiff must join all interested parties or face
dismissal of the lawsuit. The dismissal is usually sought under Rule
12(b), and the issue may be raised any time up until judgment. [Fed. R.
Civ. P. 19] Analysis of a compulsory joinder issue follows a three-step
process:

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(i) Should the absentee be joined?

(ii) Can the absentee be joined?

(iii) If not, should the action proceed in his absence (in other words, is
the absentee “indispensable”)?

1) Should the Absentee Be Joined?

The absentee should be joined as a party when:

(i) Complete relief cannot be accorded among the other parties

to the lawsuit without the absentee being made a party; or

(ii) The absentee has such an interest in the subject matter of

the lawsuit that a decision in his absence will:

i. As a practical matter, impair or impede his ability to

protect the interest; or

ii. Leave any of the other parties subject to a substantial

risk of incurring multiple or inconsistent obligations.

2) Can the Absentee Be Joined?

Assuming that the absentee should be joined under the analysis
above, the next question is whether he can be joined, that is,
whether the court can obtain personal jurisdiction over the
absentee and whether the court will still have subject matter
jurisdiction over the action after joinder of the absentee. (28 U.S.C.
section 1367 does not permit supplemental jurisdiction over claims
by or against parties joined under Rule 19, so joinder of a party
who would destroy diversity is not possible under the compul-
sory joinder rules.) If the court has personal jurisdiction over the
absentee, and his joinder will not destroy diversity or venue, he
must be joined.

3) Should the Action Proceed Without the Absentee?

If the absentee cannot be joined (for example, plaintiff cannot
serve process on the absentee), the court must determine whether
“in equity and good conscience” the action should proceed
among the parties before it, or should be dismissed, the absentee
thus being regarded as indispensable. The decision requires
consideration of:

(i) The extent of prejudice to the absentee or available parties

of a judgment;

(ii) The extent to which the prejudice can be reduced or avoided

by means of protective provisions in the judgment, the
shaping of relief, or other measures;

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(iii) The adequacy of a judgment rendered without the absentee;

and

(iv) Whether the plaintiff will have an adequate remedy in

another forum if the case is dismissed for nonjoinder.

Note: The Supreme Court has held that a joint tortfeasor subject to
joint and several liability is not a person needed for just adjudica-
tion. [Temple v. Synthes Corp., 498 U.S. 5 (1990)]

c. Permissive Joinder—Requirements
Parties may join as plaintiffs or be joined as defendants whenever:

(i) Some claim is made by each plaintiff and against each defendant
relating to or arising out of the same series of occurrences or
transactions; and

(ii) There is a question of fact or law common to all the parties.

EXAMPLE
It is very common for all persons injured in an automobile accident to
join as plaintiffs. The common issue is the defendant’s negligence; the
other issues of contributory negligence and damages are tried individu-
ally for each plaintiff.

The court is given wide discretion to order separate trials where joinder
would be unfair to a party not sufficiently involved in all the claims. Note
that the court still must have subject matter jurisdiction over the claim.

2. Joinder of Claims
The policy of the Federal Rules is to permit the adjudication of all claims
between the parties and all claims arising out of a single transaction. A
plaintiff can join any number and type of claims against a defendant; when
multiple plaintiffs or multiple defendants are involved, it is essential only that
at least one of the claims arise out of a transaction in which all were involved.

a. Successive Claims
A plaintiff may join two claims when success on the first is a prerequi-
site to the second, such as a claim for money damages and a suit to set
aside a conveyance that was fraudulent because of the debt asserted in
the first claim. [Fed. R. Civ. P. 18]

b. Jurisdiction
When jurisdiction is based on the diversity of citizenship between the
plaintiff and defendant, the plaintiff may aggregate all claims she has
against the defendant to satisfy the jurisdictional amount. When juris-
diction is based on a “federal question” claim, and diversity jurisdiction

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is not available, a nonfederal claim can be joined only if the court has
supplemental (pendent) jurisdiction over it. The court will have supple-
mental (pendent) jurisdiction over the claim if it is regarded as part of
the same case or controversy as the federal claim.

EXAMPLE
Plaintiffs claimed that the defendant appropriated plaintiffs’ literary work
in such a way as to (1) infringe federal law copyright, and (2) constitute
state law unfair competition. There was federal pendent jurisdiction over
the state claim. [Hurn v. Oursler, 289 U.S. 238 (1933)]

c. Class Actions

1) Prerequisites
Named representatives will be permitted to sue on behalf of a
class if:

a) The class is so numerous that joinder of all members is

impracticable;

b) There are questions of law or fact common to the class;

c) The named parties’ interests are typical of the class;

d) The named representatives will ensure the fair and adequate

representation of the interests of absent members of the
class [Fed. R. Civ. P. 23(a)]; and

e) The action meets the definition of any of the following three

types of class actions found in Rule 23(b):

(1) Separate actions by class members would create a risk

of inconsistent results or, as a practical matter, would
impair the interests of other absent members of the
class; or

(2) A defendant has acted or refused to act on grounds

applicable to the class and injunctive or declara-
tory relief is appropriate for the class as a whole (as
in employment discrimination claims; but note that in
Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011), the
Supreme Court rejected an effort to recover monetary
relief in such a class action); or

(3) There are questions of fact or law common to

members of the class that predominate over individual
issues and a class action is superior to the alternative
methods of adjudication.

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2) Consideration in Treating Case as a Class Action

The court should determine at an early practicable time whether
the action may be maintained as a class action, that is, whether
to “certify” a class, but may determine at any time thereafter that
the action is not an appropriate one for class action treatment. In
determining whether to treat the case as a class action, the court
should consider, inter alia, the following factors: (1) the interest of
individual control, (2) the extent and nature of litigation elsewhere
on the same subject, (3) the desirability of having the whole
package in this court, and (4) the difficulties in managing the class
action.

a) Court Must Define Class Claims, Issues, or Defenses

The court, in certifying a class, must “define the class and the
class claims, issues, or defenses.”

b) Appointment of Class Counsel

The court must appoint class counsel for every certified class,
who must fairly and adequately represent the interests of the
class. [Fed. R. Civ. P. 23(g)(1)]

3) Effect of Judgment
All members of a class will be bound by the judgment rendered in
a class action except those in a “common question” class action
[Fed. R. Civ. P. 23(b)(3)] who notify the court that they do not wish
to be bound (“opting out”). Members of the other types of class
actions may not opt out.

4) Class Action Not Mooted If Class Representative’s Claim Mooted

If the substantive claim of the individual representing the class is
mooted, this does not render the class action moot. [United States
Parole Commission v. Geraghty, 445 U.S. 388 (1980)—release from
prison of named plaintiff in class action suit challenging parole
procedure did not moot entire class action suit]

5) Notice

a) Notice Required in Common Question Suits

Notice to all members of the class of the pendency of the
class action is required under Rule 23 only in “common
question” suits [Fed. R. Civ. P. 23(b)(3)], so that class
members can opt out. The notice must state (1) the nature of
the action, (2) the definition of the class, (3) the class claims,
issues, or defenses, and (4) the binding effect of a class
judgment. Notice may be by first-class mail, electronic means,
or other appropriate means.

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b) Notice Discretionary in Other Types of Class Action Suits

Notice to members of the class of the pendency of the class
action in other class suits is discretionary with the court. [See
Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974); Oppenheimer
Funds, Inc. v. Sanders, 437 U.S. 340 (1978)]

Note: Notice of dismissal or settlement is a separate notice

that must be given to class members of all types of class
actions. (See 6)a), infra.)

6) Jurisdiction

a) Diversity Action
In class actions founded on diversity, only the citizenship
of the named representatives of the class is taken into
account to establish diversity. The Supreme Court held that
the amount in controversy requirement is satisfied in a class
action that invokes diversity of citizenship if any named
representative’s claim exceeds $75,000. The class action
may proceed in federal court even if class members’ claims
do not exceed $75,000. The claims by the class members
that do not exceed $75,000 come within the court’s supple-
mental jurisdiction. [Exxon Mobil Corp. v. Allapattah Services,
III.C.3., supra]

b) Federal Question Action

If the class asserts a claim arising under federal law, it can
invoke federal question jurisdiction. In that sort of case,
of course, the citizenship of the parties and the amount in
controversy are irrelevant. (See IV., supra.)

7) Court Approval of Dismissal or Settlement

The court must approve the dismissal or settlement of a class
action. The class must satisfy the requirements for certification
under Rule 23(a) and (b) before a court can approve a class settle-
ment (see 1), above).

a) Notice of Dismissal or Settlement

Moreover, notice of the proposed dismissal or settlement
must be given to all members of the class in a manner as
directed by the court. [Fed. R. Civ. P. 23(e)] This notice is
required in all types of class actions, unless the judgment will
not bind the class. The purpose of notice to class members
is to allow them to object to the proposed dismissal or settle-
ment when the court holds a “fairness hearing” to determine
whether to approve the dismissal or settlement. (See below.)

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b) Procedures for Settlements of Class Action Suits

The court must hold a settlement hearing (usually called a
“fairness hearing”) if the judgment will bind the class and
permits settlement only if the court finds the terms to be
fair, reasonable, and adequate, considering such factors as
whether:

(i) The class representative and class counsel have fairly

and adequately represented the class;

(ii) The settlement was negotiated at arm’s length;

(iii) The relief provided to the class is adequate in light of the

risks and delays of further litigation, the effectiveness of
distributing relief to the class, and attorneys’ fees; and

(iv) The settlement treats all class members equitably.

The court must make a finding supporting its conclusion that

the settlement meets that standard. Parties seeking approval
of a settlement must inform the court of any collateral agree-
ments made in connection with the class settlement. [Fed. R.
Civ. P. 23(e)]

(1) “Opt Out” Provision

The court may refuse to approve a settlement of a
common question class action if members are not
provided a new opportunity to opt out. Thus, members
who received notice of the pendency of the class action
(see 4), above) but declined to opt out may be permitted
a second opportunity to opt out, essentially to reject the
terms of the settlement and proceed on their own.

(2) Court Approval Required for Payment in Connection

with Objection
The court also must approve, after a hearing, any
payments or other consideration made to a party so that
she will forgo an objection or appeal.

c) Appeal of Approval of Settlement

A class member who objects to the approval of settlement
may bring an appeal of the approval of settlement. [Devlin v.
Scardelletti, 536 U.S. 1 (2002)]

8) Appeal of Class Action Certification Decision

Although a court’s order granting or denying the certification of a
class is not a final judgment in the case, a party may seek review of
the decision in the court of appeals under Rule 23(f). (See X.C.6.,

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infra.) The court’s decision on the type of notice to give may not be
immediately appealed.

d. Class Action Fairness Act

The Class Action Fairness Act (“CAFA”) relaxes federal jurisdictional
requirements for some class actions in an effort to make it easier for
class action plaintiffs to file in federal court and for class action defen-
dants to remove class actions from state to federal court. (Congress had
concluded that some state courts had certified class actions inappropri-
ately and that greater access to federal courts would protect defendants
from such perceived abuses.) [28 U.S.C. §§1711 - 1715]

1) Subject Matter Jurisdiction Under the CAFA

Under the CAFA, subject matter jurisdiction is established if:

a) Any class member (not just the representative, but anyone in

the plaintiff class) is of diverse citizenship from any defendant;

b) The amount in controversy in the aggregate (that is, adding

all the class claims together) exceeds $5 million; and

c) There are at least 100 members in the proposed class or classes.

2) Removal Under the CAFA

Additionally, in a case falling under the CAFA, any defendant,
rather than all defendants, may remove the case from state to
federal court. Moreover, there is no in-state defendant limitation
on removal—the case may be removed under the CAFA even if a
defendant is a citizen of the forum.

3) Excluded Actions

a) Primary Defendants Are States or Governmental Entities

There is no federal court jurisdiction under the CAFA if the
primary defendants are states, state officials, or other govern-
mental entities against whom the court may be foreclosed
from ordering relief.

b) Claims Based on Securities Laws or Regarding Corporate

Governance
There is no federal court jurisdiction under the CAFA over a
class action that solely involves a claim under federal securi-
ties laws, or that relates to the internal affairs of a corpora-
tion and is based on the laws of the state of incorporation.

4) Local Considerations May Defeat Jurisdiction

The CAFA has some provisions designed to defeat federal jurisdic-
tion in class actions that are relatively local in nature. These provi-
sions contain some unclear terms.

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a) Mandatory Decline of Jurisdiction

A district court must decline jurisdiction provided by the CAFA
if: (1) more than two-thirds of the members of the proposed
plaintiff class are citizens of the state in which the action was
filed; (2) a defendant from whom “significant relief” is sought
is a citizen of that state; (3) the “principal injuries” were
incurred in the state in which the action was filed; and (4) no
similar class action has been filed within the prior three years.

b) Discretionary Decline of Jurisdiction

A district court may decline jurisdiction provided by the
CAFA if more than one-third but less than two-thirds of
the proposed plaintiff class are citizens of the state in
which the action was filed and the “primary defendants”
are also citizens of that state. In that case, the court
considers a variety of factors, including whether the claims
involve matters of national interest, whether the claims will
be governed by the law of the state in which it was filed,
and whether the state has a “distinct nexus” with the class
members, the alleged harm, or the defendants.

5) Protections Under the CAFA

The CAFA adds a number of protections that apply to settlements
in all class actions in federal court.

a) Coupon Settlements
Sometimes class action settlements provide that the class
members are to receive coupons good for purchase of further
goods or services from the defendant. The court may approve
such a settlement only after holding a hearing and making a
finding that the settlement is fair, and it may also require that
unclaimed coupons be distributed to charitable organiza-
tions. If attorneys’ fees in such cases are to be based on the
value of the settlement to the class, they must be limited to the
value of the coupons actually redeemed by class members,
rather than the total amount available to class members.
Alternatively, attorneys’ fees can be based on the amount of
time class counsel reasonably expended on the action.

b) Protection Against Loss by Class Members

In some consumer class actions, some class members have
actually lost money, because attorneys’ fee awards required
them to pay the lawyers more than they received from the
settlement. A court may approve a settlement that would
have that effect only if it makes a written finding that nonmon-
etary benefits to the class member substantially outweigh
the monetary loss.

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c) Protection Against Discrimination Based on Geographic

Location
The court may not approve a settlement that provides larger
payouts for some class members than others solely because
the benefitted class members are located closer to the court.

d) Notification of Federal and State Officials

Settling defendants are required to give notice of proposed
settlements to identified federal and state officials. Final
approval of the proposed settlement may not be issued until
at least 90 days after the notice is served. A class member
who demonstrates that required notice was not provided may
choose not to be bound by the settlement.

e. Shareholder Derivative Suits

[Fed. R. Civ. P. 23.1]

1) Minority Shareholder Allegations

A minority shareholder, suing on behalf of other minority shareholders
to enforce some right of the corporation which the corporation refuses
to assert, must allege in a verified complaint that:

(i) She was a shareholder at the time of the transaction

complained of (or received her shares thereafter by operation
of law);

(ii) The action is not a collusive effort to confer jurisdiction on the

court that it would otherwise lack; and

(iii) She made a demand on the directors and, if required by

state law, on the shareholders, or the reasons why she did
not make such demands. For this requirement, facts must be
pleaded with particularity.

Rule 23.1, like Rule 23, requires that the class representative be
able to fairly and adequately represent the class.

2) Corporation Named as Defendant

The corporation must be named as a defendant if those who
control the corporation are antagonistic to the action sought by the
plaintiffs. If not so named, the court will align the corporation as a
defendant to reflect the antagonism.

3) Jurisdictional Amount and Venue

The judgment runs to the corporation; therefore, the jurisdictional
amount looks to the damages allegedly suffered by the corpora-
tion. By statute, venue is proper wherever the corporation could

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have sued the same defendants (usually in the state of its incorpo-
ration). [28 U.S.C. §1401]

4) Court Approval
The court must approve the dismissal or settlement of a derivative
suit.

f. Interpleader

1) Purpose Is to Avoid Double Liability

Interpleader permits a person in the position of a stakeholder to
require two or more claimants to litigate among themselves to
determine which, if any, has the valid claim where separate actions
might result in double liability on a single obligation. (See example
below.) Interpleader is available under Rule 22 and under the
Federal Interpleader Statute. [28 U.S.C. §1335]

2) Rights of Plaintiff Stakeholder

The plaintiff stakeholder does not have to admit liability to any
claimant and the claims do not have to have common origin. Once
the court has allowed interpleader, a trial by jury is available to
determine the issues of fact.

3) Jurisdiction

a) Rule 22 Interpleader
If Rule 22 interpleader is relied on, the normal rules as to
subject matter jurisdiction apply. Therefore, there must be
either a federal question claim, or complete diversity between
the stakeholder and the claimants and more than $75,000 in
controversy.

b) Federal Interpleader Statute

Under the Federal Interpleader Statute, on the other hand,
the jurisdictional requirements are less restrictive. The federal
statute permits jurisdiction where the amount in controversy
is $500 or more and where there is diversity between any
two contending claimants. Venue lies where any claimant
resides, and process may be served anywhere in the United
States under the statute (but not under Rule 22). The plaintiff
stakeholder must deposit the amount in controversy (or a
bond) with the court.

c) When to Use Which

If the plaintiff-stakeholder makes no claim to the stake (that
is, the stakeholder is disinterested), and the claimants are
all from the same state, statutory interpleader would not be
available. But if the plaintiff-stakeholder makes a claim against

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the stake (that is, the stakeholder is interested in the stake),

statutory interpleader potentially would be available.

EXAMPLE
An insurance company, a State A citizen, is unsure to which
claimant it should pay $80,000 of life insurance proceeds, so
it wants to file an interpleader action to have a court deter-
mine the issue. The company makes no claim to the insurance
proceeds. All potential claimants to the life insurance policy
are citizens of State B. Statutory interpleader would not be
available because no two contending claimants are diverse,
but Rule 22 interpleader would be available because com-
plete diversity exists between the insurance company-plaintiff
and all claimant-defendants and the amount in controversy
exceeds $75,000. If the insurance company were to make a
claim against the proceeds, most courts would hold that statu-
tory interpleader would be available, as the insurance com-
pany would then be considered a contending claimant.

g. Intervention
Intervention may be granted to a party of right or permissively. [Fed. R.
Civ. P. 24]

1) Intervention of Right
Intervention of right is available whenever the applicant claims an
interest in the property or transaction that is the subject matter of
the action, and the disposition of the action without her may impair
her ability to protect that interest (unless her interest is already
represented). The possible stare decisis effect of a judgment
may be sufficient “interest” to authorize intervention of right.
Jurisdiction is discussed in III.B.6., supra. The United States has
a right of intervention in all cases where the constitutionality of a
United States statute is raised.

2) Permissive Intervention
Permissive intervention is available when the applicant’s claim
or defense and the main action have a question of fact or law in
common; no direct personal or pecuniary interest is required. A
claim in permissive intervention must not destroy complete diver-
sity (if it does, intervention will be denied), and must be supported
by its own jurisdictional ground. Permissive intervention is discre-
tionary with the court.

3) Caveat
In all cases of intervention, the application must be timely, which is
a matter within the court’s discretion.

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h. Third-Party Practice (Impleader)

1) Claims for Indemnity or Contribution
A defending party may implead a nonparty, but only if the nonparty
is or may be liable to her for any part of a judgment that the plaintiff
may recover against her. Usually, such an impleader claim will be
for indemnity or contribution. If the indemnity or contribution claim
by the defending party against the third-party defendant does
not meet the requirements for diversity of citizenship or federal
question jurisdiction, it will invoke supplemental (ancillary) juris-
diction, because such claims will meet the “common nucleus of
operative fact” requirement of supplemental (ancillary) jurisdic-
tion. (See III.B.5., 6.e., supra.) Thus, the defending party may assert
an indemnity or contribution claim in federal court even if there is
no diversity between the defending party and the third-party defen-
dant and the third-party claim is based on state law. Furthermore,
venue need not be proper for the third-party defendant.
2) Non-Indemnity or Non-Contribution Claims
As part of the third-party complaint, the third-party plaintiff (that
is, the original defending party) may join other (non-indemnity
or non-contribution) claims she may have against the third-party
defendant. If these other claims do not meet the requirements
of diversity of citizenship or federal question jurisdiction, they
would need to come within the court’s supplemental (ancillary)
jurisdiction (see III.B.5., 6.e., supra), although it is less likely that
the “common nucleus” test could be met.
3) Severance of Third-Party Claims
In any event, even if jurisdiction exists, the court may sever any
third-party claim to be tried separately if it is just to do so (such
as when addition of those claims would lead to unfair prejudice to
one of the parties).

4) Response of Impleaded Party

After he is joined by the third-party complaint, the third-party
defendant may assert defenses to the plaintiff’s original claim, as
well as defenses to the third-party liability asserted against him.

5) Impleading Insurance Companies

In some states, a defendant may not implead its own insurance
company, but if the insurance company denies coverage and
refuses to defend, then the defendant may implead the company
and have that issue decided in the same case.

i. Cross-Claims
Co-parties may assert claims against each other that arise out of the
same transaction or occurrence as the main action by filing cross-claims.

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CIVIL PROCEDURE—FEDERAL

Since a cross-claim is, by definition, transactionally related to the

existing action, it is commonly considered to come within the court’s
supplemental jurisdiction, at least if the claim is by a defendant against a
co-defendant.

H. DISCOVERY

1. Duty of Disclosure
Parties are required to disclose certain information to other parties without
waiting for a discovery request. However, parties may stipulate, or the court
may order, modifications of some disclosure requirements. [Fed. R. Civ. P. 26]

a. Types of Disclosure Required

Before making disclosures, a party has an obligation to make a reason-
able inquiry into the facts of the case. The rules require parties to
disclose all information “then reasonably available” that is not privileged
or protected as work product. A party is not relieved from her obligation
to disclose merely because she has failed to complete her investigation
or because another party has not made his disclosures or has made
inadequate disclosures. Three types of disclosure are required: initial
disclosures, disclosure of expert testimony, and pretrial disclosures.

1) Initial Disclosures
Without waiting for a discovery request, a party must provide to
other parties (unless stipulation or court order provides otherwise):

(i) The names, addresses, and telephone numbers of individuals

likely to have discoverable information that the disclosing
party may use to support its claims or defenses, unless the
use would be solely for impeachment;

(ii) Copies or descriptions of documents, electronically stored

information, and tangible things that are in the disclosing
party’s possession or control and that the disclosing party
may use to support its claims or defenses, unless the use
would be solely for impeachment;

(iii) A computation of damages claimed by the disclosing party

and copies of materials upon which the computation is based;
and

(iv) Copies of insurance agreements under which an insurer

might be liable for all or part of any judgment that might be
entered.

These disclosures must be made within 14 days after the meeting

of the parties required by Rule 26(f) (discussed at I.1., infra), unless
a different time is set by court order or by stipulation.

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a) Exemptions from Initial Disclosure Requirement

Initial disclosures are not required in particular types of cases,
such as actions to review an administrative record, actions
to enforce an arbitration award, pro se litigation brought by
prisoners, actions to quash or enforce subpoenas, or habeas
corpus petitions. [Fed. R. Civ. P. 26(a)(1)(B)]

2) Disclosure of Expert Testimony

A party must also disclose to other parties the identities of expert
witnesses expected to be used at trial. If the expert witness has
been specially retained to provide expert testimony, or if the
expert’s duties as the party’s employee regularly involve giving
expert testimony, the disclosure must be accompanied by a report
prepared and signed by the expert witness stating her qualifi-
cations, the opinions to be expressed, and the basis for those
opinions, along with a list of cases in which he has testified in
the past four years and his compensation, among other items.
Otherwise, no report is required, and instead these disclosures are
required: the identity of the expert, the subject matter on which
the expert is expected to present evidence, and a summary of the
facts and opinions to which the witness is expected to testify. This
disclosure must be made at the time directed by the court or, in the
absence of any directions or any stipulations among the parties, at
least 90 days before trial; if the evidence is intended solely to rebut
another party’s disclosure of expert testimony, it must be made
within 30 days after disclosure of the evidence being rebutted.

3) Pretrial Disclosures
At least 30 days before trial, a party must disclose to the other
parties and file with the court a list of (1) the witnesses she expects
to call at trial, (2) the witnesses she will call if the need arises, (3)
the witnesses whose testimony will be presented by means of a
deposition and a transcript of pertinent portions of the deposi-
tion, and (4) documents or exhibits she expects to offer or might
offer if needed. Evidence or witnesses that would be used solely
for impeachment need not be disclosed. Within 14 days after this
disclosure, a party may serve objections to use of the deposi-
tions at trial and to the admissibility of disclosed documents and
exhibits. Such objections are waived if not made at this point,
except for objections that the evidence is irrelevant, prejudicial, or
confusing under Federal Rules of Evidence 402 and 403.

2. Discovery of Electronically Stored Data

The Rules require parties to discuss the discovery and preservation of electron-
ically stored data and to report to the court on those discussions. Electronically
stored information need not be produced if the responding party identifies it as

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from a source not reasonably accessible because of undue burden or cost. On

motion to compel or for a protective order, that party must show to the court’s
satisfaction that its assertion is justified. Even then, the court may order the
information produced for good cause, but it may also impose conditions such
as cost-shifting or cost-sharing. [Fed. R. Civ. P. 26(b)(2)(B)]

a. Format for Producing Electronic Documents

A requesting party may specify the form or forms for producing
electronically stored information, and the responding party must use
that form unless it objects (but the party must still produce other items
to which it has no objections). The court will determine if the objection
is valid. If the request does not specify the form for producing electroni-
cally stored information, the responding party may use any form in
which the information is maintained or a form that is reasonably usable
by the requesting party. [Fed. R. Civ. P. 34(b)]

b. Destruction of Electronically Stored Information

There are remedies for discovering parties and sanctions against parties
who fail to take reasonable steps to preserve electronically stored informa-
tion when litigation is reasonably foreseeable. [Fed. R. Civ. P. 37] If reason-
able steps were taken, or if litigation was not reasonably foreseeable, no
sanctions may be imposed for the destruction of discoverable information.

c. Remedies
If unpreserved electronically stored information can be restored or
adequately replaced through additional discovery, no other remedial
measures need be imposed. If the information cannot be restored or
replaced, and the discovering party is prejudiced by the lack of informa-
tion, the court may order remedial measures no greater than necessary
to cure the prejudice, taking into consideration the importance of the
information to the case and the expenses resulting from restoring or
replacing the information.

d. Party Acted with Intent to Deprive

If the disclosing party acted with intent to deprive the discovering
party of the information, the court may (1) presume the lost informa-
tion was unfavorable to the party; (2) instruct the jury that it may or must
presume the information was unfavorable to the party; or (3) dismiss the
action or enter a default judgment. The imposition of these measures is
discretionary with the court.

3. Scope of Disclosure and Discovery

a. In General
Unless the court limits discovery by order, discovery may be had of “any
nonprivileged matter that is relevant to any party’s claim or defense”
and proportional to the needs of the case, considering the importance

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of the issues at stake in the action, the amount in controversy, the

parties’ relative access to information, the parties’ resources, the impor-
tance of the discovery in resolving the issues, and whether the burden
or expense of the proposed discovery outweighs its likely benefits. “Any
matter” encompasses both documentary evidence and individuals with
knowledge of any discoverable matter. Furthermore, information need
not be admissible at trial to be discoverable. [Fed. R. Civ. P. 26(b)(1)]

b. Trial Preparation Materials

Work product of a party or a representative of a party (for example,
a lawyer), made in anticipation of litigation, is discoverable only
upon showing “substantial need” and to avoid “undue hardship”
in obtaining materials in an alternative way. If the court orders the
disclosure of work product, it must take steps to avoid the disclosure
of mental impressions, conclusions, opinions, or legal theories of the
disclosing party. However, a party may obtain, without a court order
and without showing need and hardship, a copy of any statement or
recording previously made by that party. Draft reports and draft disclo-
sures of “trial” experts are work product. Confidential communications
between such experts and counsel for the party are generally protected
as trial preparation materials, except for communications relating to the
expert’s compensation or to facts or data the attorney provided to the
expert. [Fed. R. Civ. P. 26(b)]

1) Procedure for Claiming Work Product

When a party claims that certain discoverable information is privi-
leged trial preparation material, he still must disclose the existence
of the material in sufficient detail to the opposing party so that the
opposing party may assess the claim of privilege.

c. Inadvertent Disclosure of Trial Preparation or Privileged Materials

If a party inadvertently discloses trial preparation or privileged material
to opposing parties, he may still invoke a claim of work-product protec-
tion or any privilege by notifying the opposing parties of the inadvertent
disclosure and the basis for the claim of work product or privilege. Once
so notified, the opposing party may not use or disclose the trial prepara-
tion or privileged material until the claim is resolved, and he must take
reasonable steps to retrieve the material if he disclosed it to others.

d. Experts
A party may depose experts who are expected to be called at trial
(testifying experts). If a report from the expert is required, the deposi-
tion may take place only after the report is provided. The opinions of
experts who are retained in anticipation of litigation but who are not
expected to testify at trial (consulting experts) may be discovered only
upon a showing of exceptional circumstances under which it is impracti-
cable to obtain facts or opinions by other means. [Fed. R. Civ. P. 26(b)(4)]

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e. Protective Orders
Protective orders may be obtained to limit the nature and scope of
examination or to terminate examination if discovery is abused. The
court also may allocate the expenses of discovery among the parties.
[Fed. R. Civ. P. 26(c)]
f. Supplementation of Disclosures and Discovery Responses
A party must timely supplement required disclosures and prior
responses to interrogatories, requests for production, or requests for
admissions if she learns that the information disclosed was materially
incomplete or incorrect and the new information has not been made
known to the other party in discovery or in writing. The duty to supple-
ment also applies to an expert’s reports and information from any
deposition of an expert. [Fed. R. Civ. P. 26(e)]
4. Types of Discovery
a. Pre-Action Depositions
Prior to a lawsuit being filed, or while an appeal is pending, a potential
party or party to an appeal may ask the court to order the deposition of
any person in order to perpetuate her testimony. To do so, the poten-
tial party must file a verified petition in the federal court for the judicial
district in which any expected adverse party resides.
1) Contents of Petition
The request for a court order is included within the petition
itself. The petition also must show that, among other things, the
petitioner expects to be a party to an action cognizable in a court
in the United States but is presently unable to bring it or cause it
to be brought. All expected adverse parties must be named.
2) Notice and Appointed Counsel
At least 21 days before the hearing date for the court order, the
potential party must serve each expected adverse party with
a copy of the petition and a notice of hearing. The manner of
service is the same as for an original petition (see VIII.B., supra). If
the expected adverse party cannot be so served, the court must
appoint counsel for that party.
3) Court Order
If the court finds that ordering a deposition may prevent a failure
or delay of justice, it will issue an order that specifies the person
being deposed, the subject matter of the deposition, and the
manner of the deposition.
b. Depositions
A party may not take more than 10 depositions, nor may she depose the
same person more than once, without leave of court or stipulation of the
parties.

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1) Oral Deposition of a Witness, Including a Party-Witness

A common form of discovery is the oral deposition. [Fed. R. Civ.
P. 30] If the deponent is not available at trial, the deposition may
be used in lieu of her appearance as a witness. The deposition
may be recorded by sound, sound and visual, or stenographic
means. Depositions may be taken by telephone or through other
remote electronic devices. All parties may pose questions to the
deponent. A deposition may not exceed “one day of seven hours”
absent court order or stipulation to the contrary.

a) Compulsory Appearance of Witnesses

(1) Subpoena Not Needed for Parties

It is not necessary to serve a subpoena on an adverse
party or an officer, director, or managing agent of a
party to compel appearance; the notice of deposition
is sufficient to compel attendance. For organizations,
the notice may name the organization and state with
“reasonable particularity” the matters to be covered. The
organization and the requesting party must then confer
about the topics to be covered during the deposition,
and the organization will designate individuals to testify
about those topics. [Fed. R. Civ. P. 30(b)(6), 37]

(2) Nonparties Should Be Subpoenaed

If the witness to be deposed is not a party to the action,
he should be subpoenaed. The subpoena may be served
by any person who is not a party and is not less than 18
years old. Service is made by delivering a copy of the
subpoena with any necessary fees to the person named
in the subpoena. A nonparty organization may be required
by subpoena to confer and designate individuals to testify,
as in (1), supra. A subpoena may command a person to
appear only within 100 miles from where he resides,
works, or regularly transacts business in person; or within
the state where he resides, works, or regularly transacts
business in person so long as he would not incur substan-
tial expense. A subpoena is enforceable in the court it
was issued or the court in which the action is pending on
transfer from the issuing court. [Fed. R. Civ. P. 30, 45]

(3) Costs When Notifying Party Fails to Attend

When the party who notices the deposition does not
appear (in person or by an attorney) to take the deposi-
tion, and the other party does appear, the latter can
obtain his costs of attending, including reasonable attor-
neys’ fees.

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2) Deposition of Witnesses on Written Questions

To facilitate depositions of witnesses living a great distance from
the parties, a deposition may be taken by written questions to
witnesses (including parties). All parties can pose questions to the
deponent, which must be served on all parties before the deposi-
tion. [Fed. R. Civ. P. 31]

c. Interrogatories to the Parties

Written interrogatories also may be submitted to parties. The party
must respond in writing with not only facts which she herself knows, but
also facts that are available to her. The party may also be asked to give
opinions, even on the application of law to facts. Initially, the requesting
party may not serve more than 25 interrogatories including subparts
without court order or stipulation, but leave may be granted to serve
additional ones.

1) Option to Produce Business Records

If the answer to an interrogatory may be ascertained from the
responding party’s business records (including electronically
stored information), and the burden of ascertaining the answer will
be essentially the same for the parties, the responding party may
(1) specify the records that must be reviewed, in sufficient detail to
enable the requesting party to locate and identify them as readily
as the responding party could; and (2) give the interrogating party
a reasonable opportunity to examine and audit the records and to
make copies, compilations, abstracts, or summaries.

d. Production of Physical Material; Inspection

A party may ask (1) for the production by a party (or, if accompanied by
a subpoena, a nonparty) of physical material, including documents and
electronically stored information, relevant to the pending action; and (2)
that a party be required to permit entry onto land for relevant testing.
[Fed. R. Civ. P. 34] Notice must be given to all other parties before a
nonparty subpoena issues. A subpoena is limited to production at a
place within 100 miles of where the person resides, works, or regularly
transacts business in person.

e. Physical and Mental Examinations

1) Order for Examination

The discovery rules provide for an independent physical or mental
examination of a party when that party’s physical or mental condi-
tion is in controversy. Such exam is available only if ordered by the
court, on showing of good cause. [Fed. R. Civ. P. 35] Traditionally,
the Rule has allowed exams only by “physicians.” Now, however,
it allows exams by a “suitably licensed or certified examiner,”
which would include, for example, doctors, dentists, occupational

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therapists, and any others required to be licensed and qualified to

comment on a physical or mental condition.

2) Report of Findings
The person examined may request a copy of the examiner’s
report, but if that person so requests or takes a deposition of
the examiner, she waives any privilege and must produce, upon
demand, copies of her own doctor’s reports of any other examina-
tions of the same condition.

f. Requests for Admission

Any party may serve on any other party a written request for admission
as to the truth or genuineness of any matter or document described
in the request. The matters will be considered admitted unless the
party upon whom the request was served returns a sworn statement
denying the truth of the matters set forth in the request, or explaining
why she cannot admit or deny them. Alternatively, the party upon whom
the request was served can file written objections to those requests
that she has a legal basis for not answering. A party may be asked to
admit matters that are genuine issues for trial. The admission is for the
purpose of the pending action only and may not be used against the
party in any other proceeding. [Fed. R. Civ. P. 36]

5. Enforcing Disclosure and Discovery

a. Motion for an Order Compelling Disclosure or Discovery

On notice and motion, a party may seek an order compelling discovery
from the court. (An evasive or incomplete response to discovery essen-
tially is treated as a failure to make discovery.) The movant must certify
that he has, in good faith, conferred or attempted to confer with the
person or party failing to make discovery in an effort to avoid court inter-
vention. If the motion is to compel a party to make discovery, the motion
must be filed in the court in which the action is pending; if the order
is sought against a nonparty, the motion must be made in the court in
which discovery will be taken. [Fed. R. Civ. P. 37(a)]

1) Motion Granted or Discovery Is Provided After Filing

If the motion is granted, or if the discovery is provided after the
motion was filed (and, of course, after the movant conferred or
attempted to confer to resolve the dispute), the court must, after
giving an opportunity to be heard, require the party or deponent
whose conduct necessitated the motion, the party or attorney
advising that conduct, or both, to pay the moving party’s reason-
able expenses incurred in making the motion, including attorney’s
fees, unless the nondisclosure was substantially justified or other
circumstances exist that make an award of expenses unjust.

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2) Motion Denied
If the motion is denied, the court may issue a protective order and
must, after giving an opportunity to be heard, require the movant
and/or the attorney filing the motion to pay the opposing party’s
or deponent’s reasonable expenses, including attorney’s fees,
incurred in opposing the motion unless the motion was substan-
tially justified or other circumstances exist that make an award
of expenses unjust.

3) Motion Granted in Part and Denied in Part

If the motion is granted in part and denied in part, the court may
issue a protective order and/or, after giving an opportunity to be
heard, apportion the reasonable expenses for the motion.

b. Failure to Comply with a Court Order

A party or deponent may be held in contempt of court for failing to obey
a court order (except for an order for a mental or physical examination).
There are further sanctions that may be available against a party. The
court in which the action is pending may: (1) take designated facts as
true for the purposes of the action; (2) prohibit the nondisclosing party
from supporting designated claims or defenses; (3) strike pleadings; (4)
stay the proceedings until the order is obeyed; (5) dismiss the action in
whole or in part; (6) render a default judgment against the nondisclosing
party; and/or (7) order the party and/or his attorney to pay reasonable
expenses, including attorney’s fees. [Fed. R. Civ. P. 37(b)]

c. Failure to Disclose or Supplement an Earlier Response

If a party fails to provide information or identify a witness, the party is
not allowed to use that information or witness to supply evidence in a
motion, or at a hearing or at trial, unless the failure was substantially
justified or harmless. In addition to or instead of this sanction, the court,
on motion, may (1) order payment of the reasonable expenses, including
attorney’s fees, caused by the failure; (2) inform the jury of the party’s
failure; and (3) impose other appropriate sanctions. A motion to compel
is not required for these sanctions. [Fed. R. Civ. P. 37(c)(1)]

d. Failure to Admit
If a party fails to admit a fact that is the subject of a request for admis-
sions, and the requesting party later proves the matter true, the
requesting party may move that the party who failed to admit pay the
reasonable expenses, including attorney’s fees, incurred in making that
proof. The court must order payment of expenses unless: (1) the request
was held objectionable; (2) the admission sought was of no substantial
importance; (3) the party failing to admit had a reasonable ground to
believe that it might prevail on the matter; or (4) there was other good
reason for the failure to admit. A motion to compel is not required for
this sanction. [Fed. R. Civ. P. 37(c)(2)]

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e. Party’s Failure to Attend His Own Deposition, Serve Answers to

Interrogatories, or Respond to a Request for Inspection
If a party, after being served with proper notice, fails to attend his own
deposition, or if a party fails to provide any response to interrogatories
or a request for inspection, the requesting party may, instead of moving
to compel, apply for immediate sanctions against the nondisclosing
party. However, the movant (requesting party) must certify that he made
a good faith attempt to resolve the discovery dispute. That a request
is objectionable does not serve as a defense unless the nondisclosing
party has a pending motion for a protective order. Permissible sanctions
are the same as those described above. [Fed. R. Civ. P. 37(d)]

6. Use of Depositions at Trial or Hearing

Subject to the rules of evidence, a deposition may be used (at trial or in a
hearing) against any party who was present at the deposition or had notice of it:

a. To impeach the testimony of the deponent as a witness;

b. For any purpose if the court finds that the deponent (including a party-
deponent) is dead, at a distance greater than 100 miles from the
place of trial (unless the absence was procured by the party offering
the deposition), unable to testify because of age, sickness, or impris-
onment, or the party offering the deposition could not procure the
witness’s attendance by subpoena;

c. For any purpose if, on notice and motion, the judge permits the deposi-
tion to be so used due to exceptional circumstances; or

d. For any purpose if the deponent is an adverse party.

[Fed. R. Civ. P. 32]

7. Errors and Irregularities in Depositions

[Fed. R. Civ. P. 32]

a. As to Notice
Errors and irregularities relating to the notice of deposition are waived
unless written objection is promptly served on the party giving notice.

b. As to Manner of Taking
Errors of any kind which could have been obviated if promptly
presented are waived unless seasonable objection is made at the time
of taking the deposition (applies to form of questions, oath, conduct of
parties, etc.).

c. As to Completion and Return

Errors and irregularities as to the completion and return of the deposi-
tion are waived unless a motion to suppress is made with reasonable

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promptness after the error was or should have been discovered (applies
to signing, sealing, certification, and transmittal).

d. As to Form of Written Questions

Objections to the form of written questions are waived unless served
on the party propounding them within the time for serving succeeding
questions and within five days after service of the last questions autho-
rized.

I. PRETRIAL CONFERENCES

1. Rule 26(f) Conference of Parties—Planning for Discovery

As soon as practicable, and in any event before the Rule 16(b) scheduling
conference (see below), the parties must confer to consider their claims
and defenses, the possibility of settlement, initial disclosures, any issues
concerning the preservation of evidence, and a discovery plan. The parties
must submit to the court a proposed discovery plan within 14 days after
the conference addressing the timing and form of required disclosures, the
subjects on which discovery may be needed, the timing of and limitations
on discovery, and relevant orders that may be required of the court. Unless
the parties stipulate or the court orders otherwise, a party may not seek
discovery until after this conference is held, with the exception that the party
may serve a request to produce, which will be considered served on the date
of the first conference.

2. Rule 16(b) Scheduling Conference

The court must (except in classes of cases exempted by local rule) hold a
scheduling conference among the parties or counsel. The scheduling order
will limit the time for joinder, motions, and discovery. The order may also
include dates for pretrial conferences, a trial date, and any other appro-
priate matters. This schedule cannot be modified except by leave of court
upon a showing of good cause. [Fed. R. Civ. P. 16(b)]

3. Pretrial Conferences
The court may also hold pretrial conferences as necessary to expedite trial
and foster settlement. A final pretrial conference, if any, is held as close
to the time of trial as reasonable, and is for the purpose of formulating a
plan for the trial, including the admission of evidence. This conference is to
be attended by at least one of the lawyers for each side who will actually
be conducting the trial, and by any unrepresented parties. After a pretrial
conference, an order must be entered that controls the subsequent course
of events in the case. Thus, the final pretrial conference order is a blueprint
for the trial, usually listing witnesses to be called, evidence to be presented,
factual and legal issues needing resolution, and like matters. It is thus said
to supersede the pleadings and may be modified only to prevent manifest
injustice.

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4. Sanctions
A party or counsel may be sanctioned for failure to attend a conference or
obey an order entered pursuant to a conference, for being substantially
unprepared to participate in a conference, or for acting in bad faith. The court
has a broad range of available sanctions including contempt, striking plead-
ings, and prohibiting the introduction of evidence. In addition, the court must
require the disobedient party or counsel to pay expenses incurred (including
attorneys’ fees) by other parties, unless the court finds that circumstances
make such an award unjust.

J. ALTERNATIVE DISPUTE RESOLUTION

Alternative dispute resolution (“ADR”) is a process in which a neutral person
resolves a dispute or helps the parties to resolve their dispute. Examples of these
processes include contractual arbitration, judicial arbitration, and mediation.

1. Contractual Arbitration
The Federal Arbitration Act (“FAA”) governs written arbitration agreements
involving interstate or international commerce and preempts conflicting state
law. [9 U.S.C. §§1 et seq.]

a. Procedure
A written agreement to arbitrate a dispute is valid and enforceable
unless a contractual ground for revocation exists (for example, fraud in
the inducement of the arbitration clause, illegality or unconscionability
of the arbitration clause). Court proceedings are stayed until the arbitra-
tion proceedings are completed. The appointment of the arbitrator
usually will be provided for in the arbitration agreement. At the arbitra-
tion proceeding, the arbitrator can subpoena witnesses and require
them to bring documentary evidence to the hearing. After the arbitrator
renders the award, a party can move to have the court confirm the
award. The opposing party may move to vacate the arbitration award on
the grounds below. If the award is confirmed, it is considered to be final
and binding, and it is enforceable as a court judgment.

1) Judicial Review of Award

An arbitration award may be vacated, even on appeal, only on
narrow statutory grounds, such as fraud or bias of the arbitrator, the
arbitrator’s refusal to delay proceedings for sufficient cause, or the
arbritrator’s failure to follow the arbitration agreement to such a
degree as to affect the outcome. Additionally, an arbitration award
also may be overturned when it represents a manifest disregard
of the law, which is a judicially created and extremely deferen-
tial standard that requires the complaining party to show that the
arbitrator knew the applicable law but chose to disregard it. A party
may also move to modify the award to correct miscalculations, to
modify an award that goes beyond the scope of the arbitration
agreement, or to correct minor imperfections of form. [9 U.S.C. §10]

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2. Judicial Arbitration
“Judicial arbitration” is a dispute-resolution process conducted by a neutral
person under the auspices of the court in an attempt to resolve the action
without trial. At the federal level, participation in arbitration procedures
is voluntary, and even then certain actions (cases involving a violation of
constitutional rights, certain civil rights actions, and cases alleging an amount
in controversy of more than $150,000) may not be referred to ADR even if
the parties consent. Within 30 days of the arbitration award, a party may
reject the award and request trial de novo. Any evidence that the case was
arbitrated is generally excluded. [28 U.S.C. §§654 et seq.]
3. Mediation
Mediation involves the use of a neutral person to help parties to a dispute
reach a mutually acceptable agreement. The mediator does not have
decisionmaking power; his role is to facilitate the process by which the
parties reach their own voluntary agreement. In federal court, mediation is
accomplished by local district rule. By local rule, mediation may be made
mandatory for certain cases. [28 U.S.C. §§651, 652]
K. TRIAL
1. Jury Trial Problems
A party who desires a jury trial (on some or all fact issues) must file a written
demand with the court and serve it on the parties. [Fed. R. Civ. P. 38] (Such
demand may be indorsed upon a pleading of the party.) Failure to make such
a demand within 14 days after the service of the last pleading directed to the
jury-triable issue constitutes a waiver by that party of any right to trial by jury.
A court may, within its discretion, order a trial by jury if the plaintiff’s waiver
was not intentional. In the absence of compelling reasons to the contrary, a
court should grant relief from waiver if the issue is one normally tried by a
jury. [Cox v. Masland & Sons, Inc., 607 F.2d 138 (5th Cir. 1979)] A jury demand
may be withdrawn only if all parties consent.

a. Right to Jury Trial

The Seventh Amendment preserves the right to a jury trial in federal
courts of facts in all “suits of common law” where the amount in contro-
versy exceeds $20. The determination is historical and turns initially on
whether the claim or relief was available at law or in equity in 1791. The
Supreme Court has demonstrated a clear preference for jury trial in
doubtful cases by holding that:

1) If legal and equitable claims are joined in one action involving

common fact issues, the legal claim should be tried first to the
jury and then the equitable claim to the court (the jury’s finding on
fact issues will bind the court in the equitable claim);

2) If a procedure formerly available only in equity, such as a class

suit, interpleader, or derivative action, is now permitted under the

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Federal Rules for determining a “legal” claim, a jury should try the
fact issues;

3) If damages are claimed as part of an action seeking an injunction,

the defendant cannot be denied a jury on the damages issues on
the ground that they are “incidental” to the equitable relief; and

4) If a new claim is created that did not exist at common law, a right to
a jury trial will exist if the claim is similar to a claim for common law
rights and remedies, unless the statute creating the right provides
otherwise. [See, e.g., Feltner v. Columbia Pictures Television, Inc.,
523 U.S. 340 (1998)—statutory damages under Copyright Act to be
tried to jury]

b. Jury Trials in Diversity Cases

1) Right to a Jury Trial

The federal court must permit a jury trial in any diversity “suit at
common law” even though the state court would deny a jury (the
Seventh Amendment prevails over state law in Erie situations); and
a federal court will generally follow the federal practice of submit-
ting issues of fact to the jury even though the state law assigns
the issue to the court. [Byrd v. Blue Ridge Electric Cooperative,
Inc., III.D.2.b., supra] If the state rule requires submission of a fact
issue to the jury, the federal court may nonetheless direct a verdict
under the usual standards or otherwise follow a federal practice
that calls for the court to be the trier of fact. Likewise, state law
is disregarded in determining the sufficiency of the evidence
to create a jury issue; that is, the directed verdict standards are
always federal.

2) Motion for New Trial Based on Excessiveness of Verdict

The Supreme Court has required federal trial courts to apply a
state standard when considering a motion for a new trial based on
excessiveness of the verdict. [Gasperini v. Center for Humanities,
Inc., III.D.3., supra] Under the Seventh Amendment, federal appel-
late review of whether a trial court properly denied a motion to
set aside a verdict as excessive is limited to whether the trial
court abused its discretion in denying the motion. In contrast,
a jury’s determination of the amount of a punitive damage
award is reviewed de novo on appeal. [Cooper Industries, Inc. v.
Leatherman Tool Group, Inc., 532 U.S. 424 (2001)]

c. Jury Size
In federal civil cases, a jury must begin with at least six jurors and not
more than 12 jurors. A juror may be excused for good cause (such
as illness) without causing a mistrial, so long as at least six jurors

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participate in reaching the verdict. Parties may stipulate to accept a jury

of fewer than six. [Fed. R. Civ. P. 48]

d. Jury Selection

1) Jury Venire
Jury selection process begins with individual potential jurors being
summoned to appear in court. At this stage, the potential jurors
together are called a “venire,” and the jurors who will actually hear
the case are chosen from the venire. The venire must be a reason-
able cross-section of the community.

2) Voir Dire
Typically, the potential jurors will be asked to fill out a question-
naire to discover if the juror has some potential bias in the case
(for example, whether the juror knows any of the parties or attor-
neys involved in the case, whether the juror has been involved in
a similar case, whether the juror owns stock in one of the parties,
etc.). The juror likely will be asked questions individually also. This
process is known as “voir dire.”

3) Jury Challenges
If the questioning of a potential juror reveals that the juror is
biased, that juror may be excused for cause. Bias may be actual
or implied. Actual bias may be inferred by the juror’s deliberately
lying during voir dire. Implied (or presumed) bias arises when it is
very unlikely that an average person in the juror’s shoes would
be impartial. Examples of implied bias include when the juror is
closely related to one of the parties or attorneys, when the juror
is employed by one of the parties, when the juror was the victim
of a similar crime or suffered a similar injury, or when the juror
has a financial stake in one of the parties. In such cases, the juror
must be excused, even if the juror states that she can be fair and
impartial.

e. Jury Instructions
At the close of the evidence, or sooner at the court’s direction, a party
may file proposed instructions. Ordinarily, the judge will inform the
parties of the instructions she intends to give, and the party will be
given an opportunity to object on the record and outside of the jury’s
presence before the instruction is actually given, and must do so to
preserve the issue for appeal unless the erroneous instruction was plain
error that affected a party’s substantial rights. The plain error standard is
a difficult standard to meet. [Fed. R. Civ. P. 51]

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EXAMPLE
An instruction that misstates or misplaces the burden of proof might be
reversible on appeal without objection if the aggrieved party can show
the incorrect instruction likely affected the outcome of the case.

f. Jury Deliberations
Jurors may take into the jury room all papers or exhibits in evidence
and their own notes. Instructions, pleadings, or other matters are
generally improper for use in the jury room, except when they are
formally admitted into evidence. A jury may not engage in experiments
in the jury room, and jurors may not make private studies of documents
or items outside of the jury room. Jurors may not view property or
places involved in the case, except by court order. Jurors must not
communicate with any nonjuror regarding the trial; in fact, any private
communication between jurors and counsel or parties is serious miscon-
duct that may lead to a new trial. It is error for a juror, in the jury room,
to state facts not in evidence; however, jurors are entitled to evaluate
evidence presented in light of their general knowledge and experience.

g. Jury Verdicts
The jury verdict must be unanimous unless the parties agree otherwise.
The trial court has discretion to decide the type of verdict to be used
(that is, general vs. special; see below). [Fed. R. Civ. P. 49] Jurors cannot
decide a verdict by flipping a coin or averaging (although averaging may
be proper as a starting point for discussion).

1) General Verdict
In a general verdict, the jury finds for the plaintiff or defen-
dant and gives the amount of damages or relief due. A general
verdict implies that all essential issues were found in favor of the
prevailing party.

2) Special Verdict
In a special verdict, a jury is asked to make a finding on all material
conclusions of fact, and the court applies the law. The procedure
for a special verdict is to submit to the jury a series of questions
regarding each ultimate fact. The court then makes legal conclu-
sions based on those facts. Each question must deal with a single
fact only and must not assume the existence of facts in dispute. A
party waives objections to the form of the questions if she does
not object when they are given. If the court fails, on request, to
submit an issue to the jury, the case will be reversed unless the
omission was harmless. If no request was made, a jury trial on the
issue is generally held to be waived, and the court will decide it.
[See Fed. R. Civ. P. 49]

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3) General Verdict with Written Questions

Sometimes, a jury is asked to give a general verdict and also to
answer specific written questions concerning certain ultimate facts
in the case. The purpose is to ensure that the jury properly consid-
ered the important issues. The questions must be submitted with
the general verdict to test the verdict’s validity. [See Fed. R. Civ. P.
49(b)]

4) Erroneous Verdicts and Inconsistent Findings

Inconsistent determinations in a verdict make the verdict
erroneous if the determinations are irreconcilable (for example,
when a verdict is rendered against a person vicariously liable
and the principal wrongdoer is exonerated). Any clear compro-
mise verdict is also erroneous, as is any verdict that simply finds
for the plaintiff “for actual damages suffered.” When a verdict is
erroneous, the jury may be asked to reconsider it, or a new trial
may be ordered. When answers to special interrogatories are
consistent with each other, but one or more is inconsistent with
the general verdict, the court may (1) enter judgment in accord with
the special interrogatories; (2) have the jury reconsider its answers
or verdict; or (3) order a new trial. When the answers to the special
interrogatories are inconsistent with each other and one or
more is inconsistent with the general verdict, judgment cannot
be entered, and the court must either have the jury reconsider its
answers and verdict, or the court may order a new trial. A jury may
completely change its answers or verdict when redeliberation is
ordered.

5) Juror Misconduct
A new trial is appropriate if a juror gave false testimony on voir
dire or concealed material facts relating to his qualifications to
serve. A verdict will not be set aside if the alleged misconduct was
harmless.

2. Consolidation and Separate Trials

A court may consolidate actions then before it when the actions have a
common question of law or fact, or order separate trials of any claim, cross-
claim, counterclaim, or other issues when such separation will foster judicial
economy. [Fed. R. Civ. P. 42]

3. Involuntary Dismissals
On the defendant’s motion or on its own motion, a court may order an invol-
untary dismissal against a plaintiff for failure to: (1) prosecute; (2) comply with
the Federal Rules; or (3) comply with a court order. [Fed. R. Civ. P. 41(b)] An
involuntary dismissal is with prejudice, meaning that it operates as adjudica-
tion on the merits, unless the court orders otherwise.

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4. Voluntary Dismissals
The plaintiff can give up his case voluntarily by way of a voluntary dismissal,
either with or without leave of court. [Fed. R. Civ. P. 41(a)]

a. Without Leave of Court

If the defendant has not answered or filed a motion for summary
judgment, the plaintiff may dismiss her case by filing a notice of
dismissal. A dismissal by notice is without prejudice unless the plaintiff
has previously dismissed any federal or state court action on the same
claim, in which case the dismissal by notice is with prejudice. (This is
known as the “two dismissal rule.”) The parties may also stipulate to a
voluntary dismissal at any time. A stipulated dismissal is without preju-
dice unless the stipulation states otherwise. The plaintiff is charged with
costs only if she files the action again after the dismissal.

b. With Leave of Court

When a voluntary dismissal without leave of court is not available (that
is, there has been an answer or a motion for summary judgment), the
court has discretion to grant dismissal on such terms and conditions
as the court deems proper. The dismissal is without prejudice unless
the court specifies otherwise. If there is a counterclaim pending in the
action, there can be no dismissal over the defendant’s objection unless
the counterclaim remains pending.

5. Offer of Judgment
A party defending against a claim or counterclaim may serve, at least 14 days
before trial, a formal offer to have a judgment entered against it on speci-
fied terms with costs then accrued, thereby settling the case out of court.
A defending party may also serve an offer of judgment after it has been
determined to be liable to another party, but before actual damages have
been set; such an offer must be made at least 14 days before the hearing on
damages. If the claiming party rejects the offer, and the ultimate judgment is
less favorable to him, he must pay costs incurred after the offer was made.
So long as the offer does not explicitly or implicitly exclude costs, it is a
valid offer. Evidence of an unaccepted offer is not admissible except in a
proceeding to determine costs. Unlike the practice in a number of states,
only defending parties may make a formal offer to have a judgment entered
voluntarily. [Fed. R. Civ. P. 68]

6. Summary Judgment
[Fed. R. Civ. P. 56]

a. Standard
Summary judgment may be granted if, from the pleadings, affidavits,
and discovery materials, it appears that there is no genuine dispute of
material fact and the moving party is entitled to judgment as a matter
of law. The court may not decide disputed fact issues on a motion

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for summary judgment; if there is a genuinely disputed material fact

(meaning a dispute backed by evidence on both sides of the issue), the
case must go to trial.

b. Applicable to All Civil Actions

A summary judgment motion may be made by any party in any civil
action that is subject to the Federal Rules, and may be made as to any
claim (that is, any cross-claim, counterclaim, impleader claim, etc.).

c. Time
Unless local rule or court order dictates otherwise, a party may file a
motion for summary judgment any time until 30 days after close of all
discovery. [Fed. R. Civ. P. 56(b)] If a motion is premature, the court may
defer ruling on it.

d. Partial
Summary judgment may be partial (as well as complete).

EXAMPLE
Summary judgment may be rendered on the issue of liability alone al-
though there is a genuine issue as to the amount of damages.

e. Support
The motion may be supported or opposed with affidavits or other decla-
rations made under penalty of perjury, depositions, sworn pleadings,
admissions, answers to interrogatories, or other materials in the record.

f. Affidavits

1) Affidavits or declarations must: (1) be made on personal knowl-

edge; (2) set forth such facts as would be admissible in evidence;
and (3) show the affiant is competent to testify.

2) A party may object that the material cited to support or dispute a

fact cannot be presented in a form that would be admissible in
evidence.

3) If a party fails to support an assertion of fact or fails properly to

address another party’s assertion of fact, the court may consider
the fact undisputed for purposes of the motion, grant summary
judgment if appropriate, give an opportunity to address the fact,
or issue any other appropriate order.

4) When the party opposing the motion shows by affidavit or decla-

ration that he cannot present facts, he may state the reasons for
their unavailability or declarations. The court may then deny the
motion, order a continuance to permit affidavits to be obtained or
depositions to be taken, or make such other order as is just.

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5) When affidavits or declarations are made in bad faith, the court

may order the party using them to reimburse the other party for
those expenses that the affidavits caused him, including attorneys’
fees and/or adjudge in contempt the offending party or attorney.

g. Nonappealability
The denial of a motion for summary judgment is generally not appealable.

h. Relationship to Motion to Dismiss

A motion pursuant to Rule 12(b)(6) to dismiss a complaint for failure to
state a claim upon which relief can be granted differs from a motion
for summary judgment in that the former is addressed only to the legal
sufficiency of the complaint.

i. Relationship to Motion for Judgment on the Pleadings

A motion for judgment on the pleadings presents the moving party’s
contention that on the face of the pleadings, he is entitled to judgment.
Theoretically, matters outside the pleadings are irrelevant to a decision
on either of these motions. However, a party making such a motion and
accompanying it with an affidavit or other matters outside the pleadings
may in reality be making a motion for summary judgment, putting the
wrong label on the motion. The court is expressly authorized to treat
such a motion as one for summary judgment and to conduct subsequent
proceedings on the motion in accordance with the rule on summary
judgment, giving the parties full opportunity to present material made
relevant by that rule.

7. Motion for Judgment as a Matter of Law (Formerly Directed Verdict)

Historically, a judge could direct a particular verdict whenever the evidence—
viewed in the light most favorable to the party against whom the verdict was
directed (including legitimate inferences in that party’s favor) and without
considering the credibility of witnesses—was such that reasonable persons
could come to only one conclusion. Today, this can be done pursuant to a
party’s motion for judgment as a matter of law (“JMOL”). The motion may
be made by any party any time before submission of the case to the jury, and
the moving party must specify the judgment sought and the law and facts
on which the party is entitled to judgment. The motion may be granted only
after the nonmoving party “has been fully heard” on the matter. To grant the
motion, the court must find that “a reasonable jury would not have a legally
sufficient basis to find for the [nonmoving] party on that issue.” [Fed. R. Civ. P.
50(a)]

8. Renewed Motion for Judgment as a Matter of Law (Formerly Judgment

Notwithstanding the Verdict (“JNOV”))
Historically, a party against whom judgment was entered could move for
JNOV if the judgment was based upon a verdict that reasonable persons
could not have reached and if the moving party had sought a directed

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verdict at the close of all the evidence. Now, the motion for JNOV is called
a renewed motion for judgment as a matter of law. It must be filed no later
than 28 days after entry of judgment and the party making the renewed
motion must have moved for judgment as a matter of law at some time
during the trial. In theory, a party may raise only those issues raised in the
motion for a JMOL. The standard is the same as for the motion for judgment
as a matter of law. [Fed. R. Civ. P. 50(b)]

9. Motion for New Trial

A motion for a new trial must be filed no later than 28 days after judgment is
entered. Within that period, the court may order a new trial on its own motion.
[Fed. R. Civ. P. 59]

a. Reasons for Granting New Trial

The court may grant a new trial because of an error during the trial (usually
going to the admissibility of evidence or the propriety of the instructions),
because the verdict is against the weight of the evidence (limited to cases
where the judge finds the verdict seriously erroneous), because of juror
misconduct, or because the verdict is excessive or inadequate.

1) Remittitur
If the trial judge believes that the jury’s compensatory damages
award is so excessive as to “shock the conscience” (or in a diver-
sity case if the award meets the state standard for excessiveness),
the judge may order a new trial or may offer the alternative of
remittitur. When offered remittitur, the plaintiff is given the choice
between accepting an award less than that given her by the jury or
submitting to a new trial. Note that the court cannot simply lower
the award given by the jury. It must offer the plaintiff the alternative
of a lower award or a new trial. [Hetzel v. Prince Williams County,
523 U.S. 208 (1998)]

2) Additur
If the trial judge believes that the jury’s compensatory damages
are inadequate, she may not offer the defendant the choice of
accepting a higher award or submitting to a new trial. “Additur” has
been held to violate the Seventh Amendment (which is not appli-
cable to the states). However, inadequate damages may be a basis
for a new trial.

b. Renewed Motion for Judgment as a Matter of Law with Motion for

New Trial
When a renewed motion for judgment as a matter of law and a motion
for a new trial are made in the alternative and the renewed motion is
granted, the court must rule hypothetically on the new trial motion so
that no remand is required if the ruling on the judgment as a matter of
law is subsequently reversed on appeal.

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10. Effect of Failure to Move for a Renewed Judgment as a Matter of Law or

for a New Trial
If a party fails to move for either a renewed judgment as a matter of law
or for a new trial on the basis of insufficiency of the evidence, that party is
precluded from raising the question of evidentiary sufficiency on appeal, to
support either judgment as a matter of law or a new trial. [Unitherm Food
Systems, Inc. v. Swift-Eckrich, Inc., 546 U.S. 394 (2006)]

11. Nonjury (Bench) Trials and Judgments on Partial Findings

In a nonjury trial, the judge may enter a judgment as a matter of law against a
party on any issue whenever there are sufficient facts to resolve the issue,
provided that the party has been fully heard on the issue. If the issue is disposi-
tive of a claim or defense, the judge may enter judgment as a matter of law
against a party on that claim or defense. The judge may also wait until the close
of all evidence to render judgment. Because the judge is acting as the trier of
fact, she decides issues of disputed facts, and she may consider the credibility
of witnesses. The judgment must be supported by findings of fact and conclu-
sions of law, either in writing or orally on the record. [Fed. R. Civ. P. 52]

IX. ATTACK ON THE JUDGMENT AT THE TRIAL COURT LEVEL

A. RELIEF FROM JUDGMENT OR ORDER

1. Clerical Mistakes
A clerical error is one arising from oversight or omission, and may occur in
judgments, orders, or other parts of the record. The court can correct clerical
errors on its own motion or the motion of any party. [Fed. R. Civ. P. 60(a)]
There is no time limit for the correction of clerical errors, and the court order
correcting the error dates back to the time judgment was entered. As a result,
the battle over what constitutes a clerical error is acute.

2. Motions to Amend Prior Orders or Renew Prior Motions

Motions to amend a final order (that is, one that disposes of the litigation) may
be brought when: (1) new evidence has been discovered that was not previ-
ously available; (2) there has been an intervening change in controlling law;
(3) there is a need to correct a clear error of law or fact; or (4) there is a need
to prevent manifest injustice. Such a motion must be brought within 28 days
of the order; otherwise, the party must seek relief from judgment under Rule
60 (discussed below) or appeal. [Fed. R. Civ. P. 59(e)] It should be noted that
an order that does not dispose of all parties and claims is not a final order
and may be modified.

3. Other Grounds for Relief from Judgment

On motion and just terms, the court may relieve a party from a final judgment
or order on the following grounds:

(i) Mistake, inadvertence, surprise, or excusable neglect;

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(ii) Newly discovered evidence that by due diligence could not have
been discovered in time to move for a new trial (but note that the newly
discovered evidence must have been in existence before judgment to
fall under this provision);

(iii) Fraud, misrepresentation, or other misconduct of an adverse party;

(iv) The judgment is void;

(v) The judgment has been satisfied, released, or discharged; a prior

judgment on which it is based has been reversed or otherwise
vacated; or it is no longer equitable that the judgment should have
prospective application; or

(vi) Any other reason justifying relief from the operation of the judgment.

For grounds (i), (ii), and (iii), the motion must be made within a reasonable
time not to exceed one year; for the other grounds, the motion must be made
within a reasonable time. [Fed. R. Civ. P. 60(b)] Note: Ground (iv) does not
apply simply because the judgment was erroneous; such errors are to be
remedied on appeal. Ground (iv) applies only if there was a fundamental flaw
such as lack of jurisdiction or deprivation of due process by failure to give
notice or opportunity to be heard. [United Student Aid Funds, Inc. v. Espinosa,
559 U.S. 260 (2010)]

B. INDEPENDENT ACTION IN EQUITY TO SET ASIDE THE JUDGMENT

A court, in its discretion, may entertain an independent action to relieve a party
from a judgment or order. The plaintiff must show that he is likely to win if a new
action is allowed. The only advantage of an independent action is that it will not
be barred by the specific time limits outlined in A., above. However, the aggrieved
party must act promptly once he knows or should know of the ground for relief. An
independent action will be rejected if a motion to set aside the judgment has been
rejected on the merits.

X. FINAL JUDGMENT AND APPELLATE REVIEW

A. JUDGMENT

1. Relief that May Be Given

Except in default cases, the court is not limited to the demand for relief in the
pleadings and may give any relief that is appropriate based on the evidence.
Thus, damages may exceed the plaintiff’s demand and an injunction may be
entered although not requested. Interest on a money judgment is awarded at
the rate provided under state law from the date of judgment.

2. Judgment on Multiple Claims or Parties

When multiple claims or multiple parties are involved in an action, the court
may enter a final judgment as to fewer than all of the claims or parties only on

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an express determination that there is no just reason for delay and an entry
of judgment. Unless the trial judge makes such an express determination,
the order determining the merits of fewer than all of the claims or dismissing
fewer than all of the parties is not a final judgment and is not appealable.
This is in accord with the traditional policy against piecemeal appeals. [Fed.
R. Civ. P. 54(b)]

3. Final Decision on Merits May Be Valid Despite Lack of Subject Matter

Jurisdiction
Occasionally, lack of subject matter jurisdiction is not raised until the decision
is final and all appeals are completed. The question then is whether the
decision may be collaterally attacked—that is, be set aside in an indepen-
dent proceeding or treated as invalid in a later case. The factors that must be
balanced in making this determination are: (1) lack of jurisdiction is clear; (2)
jurisdiction depends on a question of law, not fact; (3) the court is of limited,
not general, jurisdiction; (4) the question of jurisdiction was not litigated; and
(5) strong policy exists against the court acting beyond its jurisdiction.

B. TIME FOR APPEALS

An appeal may be taken by filing a notice of appeal with the district court within
30 days from the entry of the judgment appealed from (60 days where the United
States is a party to the action). [Fed. R. App. 3, 4] However, if a timely (within 28
days) renewed motion for judgment as a matter of law, a motion for new trial, or
a motion to set aside or amend the judgment is made, the running of the 30 days
is terminated. Upon the entry of an order based on such post-trial motions, a new
30-day period begins to run. A notice of appeal filed during the pendency of such
a post-trial motion will become effective on final disposition of the motion by the
trial court.

1. Extension of Time for Appeal

Upon a showing of excusable neglect, made within 30 days after the time to
appeal has expired, the district court may extend the time for filing a notice of
appeal by 30 days from the time it would otherwise have run, or 14 days from
the date of the order granting the extension, whichever is later. The court
also may reopen the time to appeal for a period of 14 days when (1) the party
did not timely receive notice of entry of judgment; (2) the motion for exten-
sion is filed within 180 days of the judgment or within 14 days of receiving
notice of judgment, whichever is earlier; and (3) the opposing party will not
be prejudiced.

C. REVIEWABLE ORDER
Generally, only final orders are reviewable on appeal. A final order is one that
disposes of the whole case on its merits, by rendering final judgment not only as
to all the parties but as to all causes of action involved. [Cunningham v. Hamilton
County, 527 U.S. 198 (1999)—order imposing sanctions on attorney is not a final
order even when the attorney no longer represents a party to the case] However,
certain interlocutory orders are also reviewable:

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1. Interlocutory Orders as of Right

a. Injunction
A party may appeal as of right any order granting, continuing, modifying,
refusing, dissolving, or refusing to dissolve or modify an injunction. A
TRO is not an injunction for appeals purposes.

b. Receivers
A party may appeal as of right any order appointing a receiver, or
refusing to wind up or take steps to accomplish purposes of receiver-
ships (for example, directing sales or other disposals of property).

c. Property Possession
A party may appeal as of right any order whereby possession of
property is changed or affected, such as orders dissolving writs of
attachment and the like.

2. Interlocutory Appeals Act

Review under the Interlocutory Appeals Act [28 U.S.C. §1292] is discretionary
and may be available when: (1) the trial judge certifies that the interlocutory
order involves a controlling question of law, as to which there is substantial
ground for difference of opinion, and immediate appeal from the order may
materially advance the ultimate termination of the litigation; and (2) the court
of appeals then agrees to allow the appeal. A party obtaining such a certifi-
cate from the trial judge must, within 10 days, apply to the court of appeals,
where two out of three judges must agree to hear the appeal.

3. Fewer than All Claims or Parties

(See A.2., supra.)

4. Collateral Order Rule

If the claim or issue is separable from and collateral to the main suit and is
too important to require deferring appellate review, it may be classified as
a judgment in a separate (“collateral”) proceeding and thus be appealable.
[Puerto Rico Aqueduct & Sewer Authority v. Metcalf & Eddy, Inc., 506 U.S.
139 (1993)—governmental entity’s claim of Eleventh Amendment immunity
from suit denied; issue appealable immediately under collateral order rule
because failure to permit interlocutory appeal would effectively eviscerate
Eleventh Amendment immunity from suit in federal court by requiring entity
to litigate to final judgment before appealing]

5. Review of Nonappealable Orders by Writ

In exceptional cases, nearly all jurisdictions allow some circumvention of the
final judgment rule through the appellate writs of mandamus and prohibi-
tion. Mandamus commands a trial judge to act, and prohibition commands
the judge to refrain from acting. The writs are available only if an appeal will
be insufficient to correct a problem and the trial court’s actions constitute a
serious abuse of power that must be immediately corrected.

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6. Certification of Class Actions

A district court’s order granting or denying certification of a class action can
be appealed within 14 days of entry of the order. [Fed. R. Civ. P. 23(f)] The
court of appeals has complete discretion in deciding whether to hear the
appeal. If the court decides to hear the appeal, proceedings are not stayed
at the district court unless the district court or court of appeals so orders.

D. STANDARDS OF REVIEW

1. On Matters of Law
On appeal, when it is alleged that the trial judge erred on a pure matter of
law, the appellate court may substitute its judgment for that of the trial judge.
This is called a de novo review.

2. On Questions of Fact
In a bench trial, the trial judge will make findings of fact (see VIII.K.11., supra).
The trial judge’s findings of fact will not be disturbed on appeal unless they
were “clearly erroneous.” [Fed. R. Civ. P. 52(a)(6)] A factual determination by
the jury is afforded even greater weight on appeal. Findings of fact by a jury
will be affirmed on appeal if, while viewing the evidence in the light most
favorable to affirming the jury’s verdict, a reasonable jury could have reached
the same conclusion. (This is similar to the standard a trial judge faces when
deciding whether to grant a judgment as a matter of law; see VIII.K.7., supra.)

3. On Mixed Questions of Law and Fact

Mixed questions of law or fact are reviewed de novo. It is often diffi-
cult to determine whether the question is purely factual, purely legal, or
mixed. Generally speaking, whether a set of facts meets a legal definition
(for example, whether the use of copyrighted material is “fair use” under
copyright law) is considered to be a mixed question of law and fact.

4. On Discretionary Matters
Many decisions a trial judge makes are left to her discretion (for example,
whether to consolidate or sever cases, whether to grant leave to amend
a pleading, etc.). On appeal, the standard of review is whether the judge
“abused her discretion” in making her decision. This means that the judge’s
ruling will not be overturned on appeal unless is it plainly wrong or without an
appropriate basis.

E. STAY PENDING APPEAL

Stays are governed generally by Rule 62.

1. Execution
No execution on judgments is allowed for 30 days after entry except injunc-
tions or receiverships, which are not held up unless otherwise ordered by
a court. If the case follows the usual route to appeal, the appellate court
ordinarily will continue the stay or issue a new stay.

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2. Bond
A bond or other security is required in sufficient size to satisfy the judgment,
costs, interest, and damages for delay, should the appeal be dismissed or
affirmed. Upon filing such a bond, an appellant has a stay pending appeal.

3. Injunction Order

a. Power of Trial Court

When appeal is taken from an interlocutory or final judgment granting,
dissolving, or denying an injunction, the court may suspend, modify,
restore, or grant an injunction during the pendency of the appeal upon
such bond or other security as it considers sufficient to protect the
adverse party.

b. Power of Appellate Court

An appellate court has similar power to grant a stay or injunction
pending appeal, or to vacate one granted by the trial court, or to make
any order appropriate to preserve the status quo or the effectiveness
of the judgment subsequently to be entered. Ordinarily such a stay or
injunction pending appeal must be sought in the trial court before the
appellate court will entertain it.

F. SUPREME COURT JURISDICTION

1. Court of Appeals Cases

Cases in the courts of appeals may be reviewed by the Supreme Court:

a. By certiorari granted upon petition of any party to any civil or criminal

case, before or after rendition of judgment or decree; or

b. By certification by the court of appeals of any question of law in any

civil or criminal case as to which it desires instructions. Upon such
certification, the Supreme Court may give binding instructions or may
require the entire record to be sent to it for decision of the entire case.

[28 U.S.C. §1254]

2. Cases from Highest State Court

Final judgments rendered by the highest court of a state in which a decision
could be had may be reviewed by the Supreme Court by certiorari in the
following circumstances:

(i) Where the validity of a treaty or federal statute is drawn into question;
or

(ii) Where the validity of a state statute is drawn into question on the
ground that it is repugnant to the federal Constitution or to a treaty or
federal statute; or

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(iii) Where any title, right, privilege, or immunity is claimed under the
federal Constitution or treaty or federal statute.

[28 U.S.C. §1257] Only the Supreme Court may hear appeals coming from the
state court system.

XI. EFFECTS OF JUDGMENT ON FUTURE CASES

A. CLAIM PRECLUSION (RES JUDICATA)

1. Definition
Once a final judgment on the merits has been rendered on a particular
cause of action, the claimant is barred by claim preclusion (res judicata) from
asserting the same cause of action in a later lawsuit.

2. Terminology Used to Describe Effect—“Merger” and “Bar”

When the claimant wins the earlier lawsuit, the cause of action is said to
have been “merged” into the judgment. When the defendant wins, the
claimant is said to be “barred” by the earlier adverse judgment. Both terms
simply mean that the claimant cannot sue again on the same cause.

3. Requirements for “Merger” and “Bar”

Before merger or bar apply, it must be shown that (1) the earlier judgment is a
valid, final judgment “on the merits”; (2) the cases are brought by the same
claimant against the same defendant; and (3) the same “cause of action” (or
“claim”) is involved in the later lawsuit.

4. Valid, Final Judgment

Claim preclusion (res judicata) flows from the entry in an earlier case of a
valid, final judgment “on the merits.” A judgment is valid as long as it is not
void (for example, for lack of subject matter jurisdiction). The process for
determining whether a judgment is final for these purposes is generally the
same as whether it is final for purposes of taking an appeal. (See X.C., supra.)

5. “On the Merits”

Usually, the more difficult issue is whether the valid, final judgment is consid-
ered “on the merits” for purposes of claim preclusion. Often, a judgment will
be based on actual litigation between the parties, but it can also be a default
judgment entered as a penalty against a party (such as a dismissal for willful
violation of discovery orders) or an involuntary dismissal closely related to the
merits (such as for failure to state a claim upon which relief may be granted).
In contrast, other involuntary dismissals not involving the merits (such as
those based on lack of jurisdiction, improper venue, or failure to join an
indispensable party) are not a judgment on the merits and do not have claim
preclusive effect. Although Federal Rule 41(b) indicates that all dismissals
are to operate “as an adjudication on the merits” unless based on jurisdic-
tion, improper venue, or failure to join an indispensable party, the Supreme

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Court has held that Rule 41(b) does not govern whether the judgment is “on
the merits” for purposes of claim preclusion. [Semtek, Inc. v. Lockheed Martin
Corp., 531 U.S. 497 (2001)] Thus, jurisdictions may take different views of
whether a particular dismissal—such as a dismissal because the statute of
limitations has run—is deemed “on the merits” for purposes of claim preclu-
sion.

6. Same Claimant Versus Same Defendant

Traditionally, claim preclusion applies only if the earlier case and the latter
case are brought by the same claimant against the same defendant. It is not
enough that the same litigants were also parties in the previous case; they
must have been in the same configuration of one asserting a claim against
the other.

EXAMPLES
1) In Case One, a trucker sues a driver to recover damages for personal inju-
ries suffered in an automobile accident. A valid, final judgment on the merits is
entered. Now the trucker sues the driver again, this time to recover damages
for property damage inflicted in the same wreck. Assuming that both cases
involve the same “cause of action” (discussed immediately below), claim pre-
clusion would apply, because both cases were brought by the trucker against
the driver.

2) In Case One, the trucker sues the driver to recover damages for personal
injuries suffered in an automobile accident. A valid, final judgment on the
merits is entered. Now the driver sues the trucker to recover for her personal
injuries suffered in the same wreck. Claim preclusion does not apply. Here,
the second case is brought by the driver against the trucker, while the first
case was brought by the trucker against the driver.

Note: The driver may be barred from asserting her claim because of the
compulsory counterclaim rule, but not because of claim preclusion. The
compulsory counterclaim rule requires a defending party to assert against
the claimant in the pending case any claims arising from the same transac-
tion or occurrence as the claimant’s claim. (See VIII.F.3.c., supra.)

7. “Cause of Action”
While various tests have been used to define “cause of action,” the modern
approach is to require assertion of all claims arising out of the same transaction
or occurrence that is the subject matter of a claim asserted by the claimant.

a. Common Examples

1) Accidents
The claimant seeks to recover separate damages from the same
accident in separate actions. The claimant may not seek damages
for neck injuries in one action and leg injuries in another. Likewise,

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most courts would not permit the claimant to sue for personal injuries
and property damage in separate actions. However, if the claimant
is insured for property damage and, after payment of the claim, the
claimant assigns her cause of action for property damage to the insur-
ance company, most courts would consider the property damage
claim and personal injury claim as two separate causes of action.

2) Installment Obligations
In the situation of a series of obligations, such as installment
payments on a debt or lease, the claimant is required to sue on all
installments due at the time of suit, but not later installments. But if
the contract has an acceleration clause that makes all installments
due if earlier ones are not paid, the claimant must sue for all install-
ments (unless the acceleration clause is optional and the claimant
elects not to exercise the option). This rule does not apply if the
installment obligations are represented by separate notes; in such
cases, suit as each note comes due represents suit on a separate
cause of action.

B. ISSUE PRECLUSION (COLLATERAL ESTOPPEL)

1. Definition
A judgment binds the plaintiff or defendant (or their privies) in subsequent
actions on different causes of action between them (or their privies) as to
issues actually litigated and essential to the judgment in the first action. This
conclusive effect of the first judgment is called issue preclusion (or collateral
estoppel). Note that issue preclusion is narrower than claim preclusion. Claim
preclusion focuses on something relatively large—the scope of a “cause of
action.” If it applies, the result is usually to bar the claimant from asserting a
second case. Issue preclusion, in contrast, focuses on something relatively
narrow—an issue that was litigated and determined in the first case, and that
is relevant in a second case. With issue preclusion, the issue is deemed estab-
lished in the second case without need to proffer evidence on it.

2. Requirements

a. Final Judgment
The traditional view is that the final judgment requirement for issue
preclusion (collateral estoppel) is very similar to the final judgment
requirement for claim preclusion. (See A.4. - 5., supra.) However, recent
decisions have relaxed the final judgment rule for issue preclusion.
A judgment may be “final” even if it is subject to post-trial motions or
appeals. Several factors may be weighed in determining whether to give
preclusive effect to a judgment not entered as final, such as whether the
prior decision was adequately deliberated, whether the court’s decision
is supported by reasoned opinion, and whether the prior decision was
subject to appeal or is on appeal.

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b. Issue Actually Litigated and Determined

The issue on which issue preclusion applies must actually have been
litigated and determined in the previous case. Thus, if a default or
consent judgment is entered, there is generally no issue preclusion as
to the fact issues that would have been tried had the case gone forward.

c. Issue Was Essential to the Judgment

1) It must be clear exactly how the issue was decided by the trier of fact.

EXAMPLE
P sues for personal injuries based on D’s negligence. D pleads
contributory negligence as a defense. If the jury renders a general
verdict for D, the decision will have no issue preclusive effect in
a subsequent case involving either P or D’s negligence, because
there is no way of knowing whether the jury found that D was not
negligent or that P was contributorily negligent, or both.

COMPARE
However, if the jury found for P for the full amount of his injuries,
it clearly had to decide that D was negligent and P was not. Thus,
both issues could have issue preclusive effect in a later case.

2) The judgment must depend on the issue of fact decided.

EXAMPLE
If, in a personal injury action, the jury specially finds that neither P
nor D was negligent—thereby rendering a verdict for D—the finding
that P was not negligent was not essential to judgment and will
have no issue preclusive effect in a later suit.

3) Note that the “essential fact” rule tends to reduce the number of
cases in which issue preclusion can be applied, thus eliminating
some of the burden from the first suit.

d. Due Process and Mutuality Considerations

1) Against Whom Is Issue Preclusion Used?

Issue preclusion may be asserted only against someone who was
a party (or in privity with a party) to the previous case (the case
in which the issue was actually litigated and determined). This
requirement is imposed by due process, and thus is the rule in
every jurisdiction.

2) By Whom Is Issue Preclusion Used?

Under the traditional “mutuality” rule, only someone who was a
party (or in privity with a party) in the previous case can use issue

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preclusion. This requirement is not imposed by due process,

however, and has been subject to modification in certain circum-
stances to allow nonparties to take advantage of a prior judgment.

3) Exceptions to Mutuality When Judgment Used Defensively

When a nonparty wishes to utilize a prior judgment to avoid
liability in a subsequent suit, there are often compelling reasons
for allowing her to do so. Fairness to the party being bound will
also be considered.

EXAMPLE
If P unsuccessfully sues a person primarily liable (such as an em-
ployee), P’s later suit against a person secondarily liable (for ex-
ample, against the employer for the employee’s acts) will be barred
by issue preclusion in virtually all courts. Similarly, if P unsuccess-
fully sues a person secondarily liable, there is little reason why the
person primarily liable should be subjected to a separate suit, and
most courts so hold.

4) Exceptions to Mutuality When Judgment Used Offensively—

Consider Fairness
Courts have been very reluctant to permit a nonparty to use issue
preclusion to aid him (as a plaintiff) to obtain relief.

EXAMPLE
Suppose one of many passengers in a public vehicle success-
fully sues the driver for injuries received in an accident, and other
passengers wish to utilize the judgment to establish liability. While
a few courts have permitted such use, others refuse. They fear a
situation in which 10 plaintiffs each sue and lose, and the 11th plain-
tiff wins, and all other potential plaintiffs seek to ignore the first 10
suits and rely solely on the 11th; application of issue preclusion in
such a situation is considered unfair and demeaning to the legal
system.

However, the United States Supreme Court, in Parklane Hosiery

Co. v. Shore, 439 U.S. 322 (1979), upheld the use of issue preclu-
sion offensively. In the first action, brought by the Securities and
Exchange Commission, the defendant was held to have violated
the federal securities laws. The second suit, brought by a private
plaintiff against the same defendant, alleged damages resulting
from the same violation established in the first action. The Court
allowed the latter plaintiff to rely on issue preclusion to establish
the existence of the violation since under all the circumstances it
was fair to the defendant to do so. Thus, in cases of nonmutual

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issue preclusion used offensively, the key often is whether such

use is fair and equitable.

C. CLAIM AND ISSUE PRECLUSION IN SPECIAL SITUATIONS

1. In Rem Judgments
If a court exercises in rem jurisdiction over some property or status within
its control, and if proper notice has been given to all interested persons, the
judgment as to title or status is binding on all persons.

2. Quasi In Rem Judgments

A quasi in rem judgment determines the rights of the parties only in the
specific property before the court. No personal judgment is granted against
anyone, and no other property is affected.

D. WHICH PERSONS ARE BOUND BY A JUDGMENT?

1. Parties Are Bound

Parties are persons named as parties who have the power to control
the action or who, if they lack capacity, are represented by guardians.
Nonparties normally are not bound. Even where the lawsuit raises an issue
as to performance or rights, nonparties normally are not bound by the
judgment; for example, an assignor who has no control over the suit and no
interest in the outcome, or an employee who allegedly was negligent, where
the suit is filed only against the employer.
2. Privies to Parties Are Bound by Issue Preclusion
Persons who control the litigation and who will be affected by the outcome
are bound by issue preclusion as to all issues litigated. For example, if the
owner of a patent assumes control of an infringement suit brought by her
licensee against a competitor, and the court holds the patent invalid, the
owner is barred on that issue should she sue the same competitor. The
owner has had her day in court.
3. Represented Parties May Be Bound by Claim Preclusion
Persons whose interests are represented and privities also may be bound
by claim preclusion. For example, beneficiaries are bound by an action
brought or defended on their behalf by the fiduciary, provided the fiduciary is
operating within her authority. Holders of future interests are bound. Unborn
or unascertained persons having future interests in property are bound by
judgments as to the property if their interests are identical to those of parties
to the action, or if a special representative is appointed for them. This rule
reflects public policy favoring free marketability of property. Members of a
class are bound by a valid class action judgment. Successors in interest are
bound. Transferees of property are in privity with prior owners and thus are
bound by a prior judgment concerning the property. This rule protects the
public as to security of titles.

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Note, however, that one is not barred from asserting a claim simply because
she is asserting the same claim that a previous claimant has already litigated.

EXAMPLE
Citizen A sues to challenge a tax as unconstitutional and loses. Citizen B is not
barred from suing to challenge the same tax on the same basis unless Citizen
A and Citizen B are in privity or Citizen A represented Citizen B in bringing the
first suit. [Richards v. Jefferson County, 517 U.S. 793 (1996)]

In vicarious liability situations (employer-employee, principal-agent, insurer-

insured) a judgment exonerating either generally is held to preclude an
action on the same claim against the other.

EXAMPLE
P sues Principal claiming injuries as a result of Agent’s negligence. P alleges
Agent was acting in the course and scope of agency at the time of harm. A
judgment in favor of Principal on the ground that Agent was not negligent
would in some jurisdictions preclude suing Agent thereafter on the theory that
Agent was negligent in causing the harm. If P first sued Agent and Agent was
found not negligent, P should thereafter be barred from suing Principal for the
negligence of Agent causing the harm.

E. WHICH CHOICE OF LAW RULES APPLY TO PRECLUSION QUESTIONS?

Preclusion questions—whether claim preclusion or issue preclusion—always
involve at least two cases. One case has gone to a valid, final judgment on the
merits. Preclusion law determines whether that judgment (in “case one”) precludes
litigation of any matters in a pending case (“case two”). (By the way, note that “case
one” was not necessarily filed first; it is “case one” because it went to judgment
first.) A choice of law issue arises when case two is brought in a different jurisdic-
tion than case one; that is, what law does the court in case two use to determine
whether the judgment in case one is entitled to claim or issue preclusion?

1. Case One Decided in State Court

When case one has been decided in state court, the court in case two
(whether state or federal) generally will apply the claim or issue preclusion
law of the jurisdiction that decided case one.

EXAMPLE
Judgment is entered in a case in Kansas. A second case is brought in Missouri.
To decide whether that case is subject to claim or issue preclusion, the judge
in Missouri should generally apply Kansas law on claim or issue preclusion.

2. Case One Decided in Federal Court Under Diversity Jurisdiction

What if case one was decided in a federal court under diversity jurisdiction?

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Here, the Supreme Court held that the court in case two should apply federal
law (because a federal court decided case one). However, it also held that
usually the federal law in such an instance would be the state law of the state
in which the federal court sat.

EXAMPLE
After plaintiff files suit in a California state court, defendant removes the case
to federal court based on diversity jurisdiction. Plaintiff’s federal court case is
then involuntarily dismissed because it is barred by California’s statute of limi-
tations. Plaintiff files the same claims in state court in Maryland (which has a
longer statute of limitations). In determining whether to dismiss the case under
claim preclusion, the Maryland state court should look to federal law. But, de-
spite the language of Federal Rule 41, federal law would adopt the California
law (unless “state law is incompatible with federal interests”). Because Cali-
fornia law would allow the plaintiff to file in a jurisdiction with a longer statute
of limitations, the Maryland court should not dismiss under claim preclusion.
[Semtek, Inc. v. Lockheed Martin Corp., A.5., supra]

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CIVIL PROCEDURE CHARTS

REMOVAL ISSUES

The key points to remember are:

☑ A federal court must have jurisdiction over the case; jurisdiction need not
have been proper in the state court.

☑ Removal is to the federal district court whose territory encompasses

the state court.

☑ Only defendants can remove; all defendants generally must join in the removal.

☑ A case based on diversity may not be removed if any defendant is a citizen of

the forum state.

☑ Notice of removal must be filed within 30 days of the date defendant receives a
copy of the initial pleading.

☑ If a case later becomes removable (as by dismissal of a nondiverse defendant),

the case may be removed within 30 days of the date it becomes removable, but
(for diversity cases) not more than one year after it was brought in state court.

☑ The one-year rule may be disregarded if the plaintiff has acted in bad faith to
defeat removal.

CMR Chart

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CIVIL PROCEDURE CHARTS

TIMING OF PRE-ANSWER MOTIONS

Motion Timing

1. Lack of jurisdiction over the May be raised any time,

subject matter even on appeal

2. Lack of jurisdiction over the person

3. Improper venue Waived if not raised by Rule 12

motion or answer, whichever
4. Insufficiency of process is first

5. Insufficiency of service of process

6. Failure to state a claim upon

which relief can be granted
May be raised any time
7. Failure to join a party under
before trial or at trial
Rule 19 (indispensable party)

CMR Chart

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CIVIL PROCEDURE CHARTS

FEDERAL CLASS ACTION REQUIREMENTS

A federal class action must meet all four requirements on the left side of the chart
and one of the requirements on the right. The three alternatives on the right
determine the type of federal class action. Only the third type, i.e., the common
question type, requires notice to all class members and allows opting out.

Numerous class
and Risk of inconsistent results
or
Common questions
Injunctive or declaratory
and relief appropriate
AND
or
Typicality
Common questions predominate
and and a class action is superior to
alternate methods of adjudication
Fair and adequate
representation

CMR Chart

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CIVIL PROCEDURE CHARTS

PROCEDURAL DEVICES THAT MAY TERMINATE CASE

Method Circumstances Timing

Pre-Answer Motion Addresses the following (See “Timing of Pre-Answer

[Rule 12(b)] preliminary matters: defects in Motions” chart supra for
subject matter jurisdiction, timing of Rule 12 defenses.)
personal jurisdiction, venue,
process, and service of process;
failure to state claim; failure to
join needed party.

Voluntary Dismissal by Without prejudice once as a If dismissed as a matter

Plaintiff [Rule 41(a)] matter of right; also possible of right without prejudice,
by stipulation or court order. must be done before
defendant files answer or
motion for summary judgment.

Involuntary Dismissal Plaintiff fails to prosecute the Any time.

[Rule 41(b)] case or to comply with the
Rules or a court order.

Motion for Judgment on On the face of the pleadings After pleadings are closed but
the Pleadings [Rule 12(c)] (without considering matters not so late as to delay trial.
outside the pleadings), the moving
party is entitled to judgment.
Treated as motion for summary
judgment if accompanied by
outside matters.

Summary Judgment No genuine dispute of material Unless local rule or court

[Rule 56] fact and moving party is entitled order dictates otherwise, a
to judgment as a matter of law. party may file a motion for
May support by pleadings, summary judgment at any
affidavits, discovery materials. time until 30 days after close
of discovery. If a motion is
premature, the court may
defer ruling on it.

Judgment on Partial In a nonjury trial, the judge may During trial, once the judge
Findings [Rule 52] enter a judgment as a matter of has heard sufficient evidence
law if she makes dispositive to make dispositive findings
partial findings on the claim. and all parties have been fully
heard on the issue.

Motion for Judgment as Evidence viewed in light After opponent has presented
a Matter of Law (Directed most favorable to motion’s case but before submission of
Verdict) [Rule 50(a)] opponent leads reasonable case to jury.
person to conclusion in favor
of moving party.

Renewed Motion for The verdict returned could Within 28 days after entry of
Judgment as a Matter of not have been reached by judgment.
Law (“JNOV”) [Rule 50(b)] reasonable persons. Moving
party must have previously
sought judgment as a matter of
law sometime during the trial.

CMR Chart

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APPROACH TO CIVIL PROCEDURE

APPROACH TO EXAMS
CIVIL PROCEDURE
IN A NUTSHELL: To determine where to file a case, a plaintiff must find a court that has
power over the defendants (“personal jurisdiction”) and power over the type of case
(“subject matter jurisdiction”), and the location (“venue”) must be proper. The plaintiff
drafts a complaint (sometimes called a “petition”) that will inform the defendant of the
plaintiff’s claims; the plaintiff files the complaint with the court. Once filed, the plaintiff
must provide the defendant with timely notice the complaint has been filed (“service
of process”), using a method authorized by law. After the defendant is served with
process, the defendant may challenge the merits of the case or defects in the complaint
or petition by filing an answer and/or various motions (e.g., a motion to dismiss). The
defendant may also file a claim against the plaintiff. Thereafter, the parties disclose
to each other the evidence each may have (“discovery”). If a party discovers that his
opposing party may not be able to prove a claim or defense at trial, he may ask the
court to dismiss the case for lack of evidence (“motion for summary judgment”). If the
plaintiff’s case survives to this point, it is tried before a jury (if requested) or a judge. In
certain circumstances, the case may be withdrawn from the jury, or the jury’s verdict
may be set aside, or the case may be appealed.

I. JURISDICTION OVER THE PERSON

State law must authorize jurisdiction, and the exercise of such jurisdiction must be
constitutional

A. Types of Personal Jurisdiction

1. In personam—forum has personal jurisdiction over defendant
2. In rem—forum has power to adjudicate rights of all persons to a particular
item of property; defendant not personally bound
3. Quasi in rem—two types
a. Quasi in rem type I—court adjudicates rights of parties in property
based on property being in forum; close connection between case and
property provides minimum contacts
b. Quasi in rem type II—court attaches property to bring defendant into
forum on unrelated claim; defendant must have minimum contacts with
forum

B. Statutory Limitations on Personal Jurisdiction

1. Federal court must analyze personal jurisdiction as if it were a court of the
state in which it is located
a. State law must authorize jurisdiction
b. Most, if not all, states authorize jurisdiction over a defendant who:
1) Is present in forum state and personally served with process
therein;
2) Is domiciled in forum state;

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APPROACH TO CIVIL PROCEDURE

3) Consents to jurisdiction; or
4) Commits an act covered by the long arm statute

C. Constitutional Limitations on Personal Jurisdiction

1. Traditional rule—physical power
2. Modern due process standard—contact and fairness
a. Defendant must have such minimum contacts with the forum such that
the exercise of personal jurisdiction over him is fair and reasonable
1) Consider whether defendant purposefully availed himself of the
benefits and protections of state law and whether he could have
anticipated being brought into state court
b. Notice also required
1) Traditional methods of personal service satisfy notice requirements
2) Requirement that agent notify defendant
3) Requirement for cases involving multiple or unknown parties

II. SUBJECT MATTER JURISDICTION IN FEDERAL COURTS

A. Diversity of Citizenship Jurisdiction
1. Complete diversity
a. Every defendant must be of diverse state citizenship from each plain-
tiff—this is “complete diversity”
b. Must have complete diversity when action commenced
1) Interpleader exception
c. Alienage jurisdiction—citizen of U.S. state and foreign citizen
d. Questions of citizenship
1) Individuals—domicile
2) Corporations—every state/country where incorporated and one
state/country of principal place of business, which is the place from
which the corporation’s high level officers direct and control its
activities
3) Unincorporated associations and limited liability companies—
citizenships of its members
4) Legal representatives—domicile of the represented person
5) Class actions—domiciles of the named members
6) Nonresident U.S. citizens—not a citizen of any state and not an alien
e. Realignment of parties according to their true interest
1) Shareholder derivative actions
f. Supplemental jurisdiction
1) Must be one claim with original jurisdiction
2) Supplemental claim must arise from a common nucleus of opera-
tive fact as the original jurisdiction claim such that the claims
should be tried together
g. Subsequent addition of parties and claims
1) Intervention of right—no supplemental jurisdiction

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APPROACH TO CIVIL PROCEDURE

2) Substitution of parties—citizenship of original party controls

3) Impleader—supplemental jurisdiction as to claim of Defendant v.
Third-Party Defendant; claim of Plaintiff v. Third-Party Defendant
must have original jurisdiction in diversity case
4) Cross-claims—supplemental jurisdiction
2. Jurisdictional amount in excess of $75,000
a. Amount in controversy does not include interest and costs or counter-
claims
1) Attorneys’ fees and interest that are recoverable by statute or as
part of claim are included
b. Aggregation
1) One plaintiff may aggregate claims against a single defendant
2) One plaintiff may not aggregate separate claims against several
defendants
3) One plaintiff may sue several defendants on a joint liability claim if
it exceeds $75,000
4) Several plaintiffs may aggregate claims against one defendant if
seeking to enforce single title or right
c. Supplemental jurisdiction over claims by permissively joined plaintiffs
not exceeding $75,000 possible in diversity cases
d. Counterclaims
1) Compulsory counterclaim may invoke supplemental jurisdiction
2) Permissive counterclaim needs original jurisdiction
3) Citizenship generally not an issue—if diversity exists between
Plaintiff v. Defendant, it exists between Defendant v. Plaintiff
3. Erie doctrine and law applied in diversity cases—state substantive law,
federal procedural law
4. Exceptions to diversity of citizenship doctrine—no probate, divorce, alimony,
or child custody cases
5. Multiparty, Multiforum Trial Jurisdiction Act

B. Federal Question Jurisdiction

1. Federal question must appear in complaint
2. Implied federal right of action possible
3. Supplemental jurisdiction
a. Pendent claims—federal court has discretion to hear state law claim if
it arises from a common nucleus of operative fact as the federal claim
such that the claims should be tried together
b. Pendent parties—must be common nucleus of operative fact
4. Specific statutory grants of exclusive federal jurisdiction

III. VENUE

A. Subject Matter Jurisdiction Distinguished—Venue Is Proper

Geographic District

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APPROACH TO CIVIL PROCEDURE

B. General Rules
1. Venue proper in federal district where any defendant resides (if all defen-
dants reside in the same state), where a substantial part of events or
omissions occurred, or where a substantial part of property situated
2. Fallback provisions—if no district satisfies above, venue proper in federal
district where any defendant is subject to court’s personal jurisdiction
3. Unlike subject matter jurisdiction, venue can be waived

C. Residence for Venue Purposes

1. Individuals—domicile
2. Business entities—where subject to court’s personal jurisdiction
3. Nonresidents—any judicial district

D. Transfer
1. Original venue proper—transfer for convenience to venue where case might
have been brought or to venue to which parties consent
2. Original venue improper—transfer to venue where case could have been
brought to correct error
a. Dismissal if transfer not available or if some extraordinary circumstance
exists

IV. REMOVAL JURISDICTION

Defendant can remove an action that could have been brought originally in federal
court

A. Requirements
1. Original jurisdiction
a. Diversity jurisdiction
1) Dismissal of nondiverse party allows removal
2) Case cannot be removed based solely on diversity if any defen-
dant is a citizen of the forum state
3) Case cannot be removed based solely on diversity more than one
year after case was filed unless defendant can show plaintiff acted
in bad faith to prevent removal
b. Federal question jurisdiction
1) Having a federal defense is insufficient
2) Entire case is removed
3) State law claims may be severed and remanded to state court
2. State court need not have had jurisdiction
3. Only defendants may remove
4. Venue—federal district where state action was filed

B. Procedure for Removal

1. Time—30 days
a. Generally starts to run after formal service of complaint

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APPROACH TO CIVIL PROCEDURE

b. If later pleading, motion, etc., is filed that shows case is now removable,
period begins to run on service of that pleading, motion, etc.
2. Remand to state court if no federal subject matter jurisdiction

V. CONFLICT OF JURISDICTION BETWEEN STATE AND

FEDERAL COURTS
A. Injunctions Against State Court Proceedings
1. Federal court generally may not enjoin pending state proceedings
2. Threatened state criminal proceedings—to prevent clear and imminent harm
that cannot be remedied with a criminal appeal

VI. FEDERAL RULES OF CIVIL PROCEDURE

A. Commencement of Action—Complaint and Service of Process

B. Service of Process
1. Personal service, abode service, service on agent; also state rules and waiver
of service (by mail)
2. Parties served outside of state or in foreign country
3. Immunity from process for parties, witnesses, attorneys in another action, or
fraud or deceit

C. Interlocutory Injunctions—Maintain Status Quo Until Trial

1. Preliminary injunctions—require notice
2. Substantive requirements—irreparable harm, harm to party seeking injunc-
tion outweighs harm to party to be bound, likelihood of success on the
merits, public interest factors
3. Temporary restraining orders—necessary to prevent irreparable injury

D. Pleadings
1. Complaint—notice of plaintiff’s claim
2. Pre-answer motions
a. Motion to dismiss for (i) lack of subject matter jurisdiction; (ii) lack of
personal jurisdiction; (iii) improper venue (transfer probably); (iv) insuf-
ficient process or service of process; (v) failure to state a claim; and (vi)
failure to join a party
b. Motion for more definite statement
c. Motion to strike
3. Answer—specific or general denials by defendant
a. Compulsory counterclaims—arises out of same transaction or occur-
rence; must be pleaded
b. Permissive counterclaims—any other counterclaim
c. Inconsistent claims or defenses allowed

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4. Special pleading for, e.g., fraud, mistake, special damages; must be more
detail
5. Reply by plaintiff generally not required
6. Amendment of pleading and supplemental pleadings
a. Relates back to filing date of original complaint if it concerns same
conduct, transaction, or occurrence
b. If party is charged, relates back if, within period for service of process,
new party (i) received notice of the action such that party will not be preju-
diced; and (ii) knew or should have known that, but for plaintiff’s mistake
concerning identity, new party would have been made a party originally
7. Rule 11
a. Attorney certifies proper purpose upon presenting paper to court
b. Sanctions—judge has discretion limited by deterrence factor

E. Joinder
1. Compulsory joinder
a. Court cannot accord complete relief without absentee
b. Absentee has interest that will be impaired by lawsuit
c. Parties are at substantial risk for multiple or inconsistent judgments
without absentee
d. If a., b., or c. is true, and absentee’s presence will not destroy subject
matter jurisdiction or venue, and the court can obtain personal jurisdic-
tion over absentee, he must be joined
e. If absentee can be joined, court must consider whether to proceed
without absentee, looking at:
1) Prejudice to absentee and parties
2) Whether judgment can be shaped to avoid prejudice
3) Adequacy of judgment without absentee
4) Whether another forum can hear entire case
2. Permissive joinder—arises out of same occurrence and transaction and
common question of law or fact
3. Joinder of claims
a. Class actions
1) Requirements
a) Numerous class so joinder of all is impracticable;
b) Common questions of law or fact;
c) Named parties’ interests are typical;
d) Named parties will ensure fair and adequate representation
of absent members; and
e) Either (i) separate actions risk inconsistent results or harm
absent members; (ii) injunctive or declaratory relief is appro-
priate; or (iii) common questions of law or fact predominate
and class action is superior to other methods
2) Effect of judgment—all members bound unless opt out
3) Notice of pendency required in “common question” suit so
members can opt out

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APPROACH TO CIVIL PROCEDURE

4) Jurisdiction—for diversity, named parties control whether diversity

and amount in controversy are satisfied
5) Notice of settlement must be given to class members so they can
object at “fairness hearing”
6) Court must approve dismissal or settlement after “fairness
hearing”; if class action based on common question of law or fact,
court may refuse settlement unless members are given second
chance to opt out
b. Class Action Fairness Act
1) Federal jurisdiction if:
a) Any member of the plaintiff class is of diverse state citizenship
from any defendant
b) Aggregated amount in controversy exceeds $5 million
c) 100 members to the class
2) Local considerations may defeat jurisdiction
c. Shareholder derivative suits
1) Must have been a shareholder at time of transaction (or received
shares by operation of law); not collusive effort to confer jurisdic-
tion; made demand on directors if required
2) Jurisdictional amount—consider corporation’s damages
3) Venue—where corporation could have sued the same defendants
d. Interpleader
1) To avoid double liability
2) Mnemonic: Rule 22 interpleader must follow the regular rules;
statutory interpleader has special, simple standards
4. Intervention
a. As of right—intervenor has an interest in property or transaction that is
subject of the action and action may adversely affect interest
b. Permissive—intervenor’s action has common question of law or fact
c. No supplemental jurisdiction in federal court
5. Impleader—generally to bring in nonparty to get indemnity or contribution
a. Supplemental jurisdiction over claim by defendant/third-party plaintiff
against third-party defendant, but no supplemental jurisdiction over
claim by original plaintiff against third-plaintiff defendant
6. Cross-claims—co-partners may sue each other for claims arising out of same
transaction or occurrence
a. Supplemental jurisdiction available

VII. DUTY OF DISCLOSURE AND DISCOVERY

A. Disclosure Requirements
1. Types of disclosure required without discovery request
a. Initial disclosures—generally disclosure of witnesses who support claims
or defenses and materials that support claims or defenses

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APPROACH TO CIVIL PROCEDURE

b. Disclosure of expert testimony—testifying experts and their reports

must be disclosed
c. Pretrial disclosures—trial witnesses, depositions to be used at trial,
exhibits, etc.
2. Scope of disclosure and discovery—generally any relevant nonprivileged
matter that is proportional to the needs of the case
a. Trial preparation materials—only if substantial need and to avoid undue
hardship
b. Experts
1) Testifying experts—may depose
2) Consulting experts—only if exceptional circumstances
c. Protective orders may limit or end discovery if abused
3. Supplementation of disclosures and discovery response required if learn
information given is materially incomplete or incorrect

B. Types of Discovery upon Request

1. Pre-action depositions to perpetuate testimony
2. Oral depositions
a. Notice of deposition compels appearance of parties
b. Nonparties must be subpoenaed
3. Written depositions—questions to deponent submitted in wrtiting
4. Interrogatories to parties—written questions to parties
5. Production of physical material—nonparties need to be subpoenaed
6. Request for admissions as to truth or genuineness of any matter or document

C. Enforcing Disclosure and Discovery

1. Motion to compel disclosure
a. Must certify good faith attempt to resolve dispute with opponent
2. Failure to comply with court order
a. Sanctions
b. No sanctions if substantially justified or unjust
3. Failure to disclose or supplement
a. No use of material unless substantially justified or harmless
b. Sanctions
4. Failure to admit
a. Pay expenses for proving matter unless generally some good reason for
not admitting
5. Failure to attend own deposition, serve answers to interrogatories, respond
to request for inspection
a. Must certify good faith attempt to resolve dispute with opponent
b. Sanctions
c. Must seek order of protection to avoid sanctions if request objectionable

D. Use of Depositions at Trial or Hearing

Subject to the rules of evidence, depositions can be used:
1. To impeach the witness

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APPROACH TO CIVIL PROCEDURE

2. For dead, unavailable, or absent witness

3. For any purpose if deponent is the adverse party

E. Pretrial Conferences
1. Rule 26(f) conference of parties—planning for discovery
2. Rule 16(b) scheduling conference
3. Sanctions for failure to attend, obey an order, etc.

VIII. TRIAL
A. Alternative Dispute Resolution
1. Contractual arbitration—written agreement to arbitrate
2. Judicial arbitration—voluntary arbitration under auspices of court
3. Mediation—use of neutral person to facilitate voluntary settlement between
the parties

B. Trial
1. Jury trial problems
a. Right to jury trial—7th Amendment
b. Jury size—at least six, no more than 12 jurors
c. Jury instructions—objections must be made before jury retires
d. Jury verdicts—general (for plaintiff or defendant and amount of
damages) or specific (jury makes findings on material issues of fact)
2. Involuntary dismissal—with prejudice
3. Voluntary dismissal—by plaintiff, with or without leave of court
4. Summary judgment—if no genuine dispute of material fact, party entitled to
judgment as a matter of law (no trial necessary)
5. Judgment as a matter of law (directed verdict)
a. Evidence viewed in light most favorable to nonmoving party
b. Witness credibility is not considered
c. Standard—evidence is such that a reasonable jury would not have a
legally sufficient basis to find for the party on that issue
6. Renewed motion for judgment as a matter of law (a.k.a. JNOV)
a. Same standards as above
7. Motion for new trial—some error occurred at trial (e.g., juror misconduct)
a. If made with renewed motion for judgment as a matter of law, and
renewed motion is granted, judge must rule hypothetically on new trial
motion
8. Party waives “sufficiency of the evidence” argument on appeal if he fails to
move for a renewed motion for judgment as a matter of law or for a new trial

IX. POST-TRIAL MOTIONS AND APPEALS

A. Attack on the Judgment at the Trial Court Level
1. Relief from judgment or order is given for:

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APPROACH TO CIVIL PROCEDURE

a. Clerical mistakes
b. Other grounds for relief from judgment
2. Independent action in equity to set aside the judgment

B. Final Judgment and Appellate Review

1. Judgment
a. Appropriate relief that may be given
b. Final decision on merits may sometimes be valid despite lack of subject
matter jurisdiction
2. Time for appeals—generally 30 days
3. Reviewable order—final orders reviewable on appeal
a. Interlocutory orders as of right—reviewable
b. Interlocutory Appeals Act—review discretionary
c. Collateral order rule—reviewable
d. Orders may be made appealable (or nonappealable) by writ
e. Certification of class action—can be appealed within 14 days of order
4. Stay pending appeal may be granted
5. Supreme Court has jurisdiction to hear federal appellate cases (certiorari or
certification) and state supreme court cases (by certiorari) where federal issue

X. CLAIM AND ISSUE PRECLUSION

A. Effects of Judgment on Future Cases
1. Claim preclusion (res judicata)—a final judgment on the merits bars claimant
from asserting same claim in later action
2. Issue preclusion (collateral estoppel)—a judgment binds parties (or their
privies) in subsequent actions between them as to issues actually litigated
and essential to judgment in first action

B. Who Is Bound by Judgment?

1. Parties and their privies are bound
2. Mutuality rules
a. Traditionally, if a nonparty was not bound by a judgment, he could not
use issue preclusion against one who was bound by the judgment
b. Some states (and federal courts) have relaxed mutuality rule when issue
preclusion is used defensively
c. Some states (and federal courts) employ a four-part test to determine
if issue preclusion can be used offensively—if all of the following are
answered affirmatively, issue preclusion can be used offensively
1) Are the issues identical?
2) Is there a final judgment on the merits?
3) Did the party against whom the judgment is to be used have a fair
opportunity to be heard?
4) Is it not unfair or inequitable to apply issue preclusion?

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CIVIL PROCEDURE—FEDERAL

2) Appointment Required by State to Do Business ��������26

1) No Jurisdiction If Property Not Located in State ������� 37

4. Realignment According to Interest ����������������������������������������������������45

3. Statutes Involving Both Substance and Procedure ���������������������� 57

a. Effect of Dismissal of Federal Claim on Supplemental

E. DISMISSAL OF NONDIVERSE PARTY ALLOWS REMOVAL ����������������������70

1) Effect of Waiver ���������������������������������������������������������������������� 76

4. Inconsistent Claims or Defenses ����������������������������������������������������������83

4) Class Action Not Mooted If Class Representative’s

b) Federal Interpleader Statute ���������������������������������� 97

2. Judicial Arbitration ��������������������������������������������������������������������������������� 112

9. Motion for New Trial ������������������������������������������������������������������������������ 120

1. On Matters of Law ����������������������������������������������������������������������������������� 125

4) Exceptions to Mutuality When Judgment Used

B. SUBJECT MATTER JURISDICTION

1. Diversity of Citizenship Jurisdiction

2. Federal Question Jurisdiction

Supplemental jurisdiction operates to bring additional claims into that

II. PERSONAL JURISDICTION

1. Limitations on Personal Jurisdiction

c. Personal Jurisdiction in Federal Courts

2. Three Types of Personal Jurisdiction

c. Quasi In Rem Jurisdiction

1) Defendant Is Not Bound Personally

B. STATUTORY LIMITATIONS ON IN PERSONAM JURISDICTION

(ii) Where the defendant is domiciled in the forum state;

(iii) Where the defendant consents to jurisdiction; and

Each of these bases of in personam jurisdiction will be discussed in detail below.

1. Physical Presence at Time of Personal Service

2. State Law Exceptions to Traditional Rule

a. Service by Fraud or Force Invalid

b. Immunity of Parties and Witnesses

2) Appointment Required by State to Do Business

5. Long Arm Statutes

In personam jurisdiction is granted regardless of whether the defendant is

a. Unlimited Long Arm Statutes

b. Limited (or Specific) Long Arm Statutes

1) Limitations in Tort Cases

2) Limitations in Contract Cases

3) Limitations in Property Actions

4) Limitations in Marital Dissolution Cases

plaintiff spouse must be living in the state at the time of abandon-

C. CONSTITUTIONAL LIMITATIONS ON IN PERSONAM JURISDICTION

1. Sufficient Contacts with the Forum

a. Traditional Rule: Physical Power

b. Modern Due Process Standard: Contact, Relatedness, and Fairness

2) Defendants, Michigan residents, entered into a franchise

2) Defendant, a New York car dealer, was sued in Oklahoma

Oklahoma. The only basis for jurisdiction over Defendant was

(1) “Stream of Commerce” Cases

(a) Merely placing an item in the stream of

(b) It is unresolved whether placing an item in the

(c) Placing an item in the stream of commerce

by maintaining sales offices within the state, by

(2) Internet Cases

[Keeton v. Hustler Magazine, 465 U.S. 770 (1984); Calder v.

2) In Ford Motor Company v. Montana Eighth Judicial District

2) Relatedness of Claim to Contact

a) Claim Arising from Activity in the State (Specific

Myers Squibb was subject to personal jurisdiction in California

b) Claim Not Arising from Activity in the State (General

(1) Registration to Do Business in a State

(2) “At Home” in the State

state in which they are domiciled, and a corporation is

b) Forum State’s Interest

2) Asahi, a Japanese manufacturer of tire valves, shipped

The valves were incorporated into tires and sold in California,

a. Traditional Methods of Personal Service Satisfy Due Process Notice

b. Requirement that Agent Notify Defendant

c. Requirements for Cases Involving Multiple Parties or Unknown

d. Knowledge that Notice by Mail Was Not Received

used to transport narcotics), forfeiture of a vessel, distribution of the assets

1) No Jurisdiction If Property Not Located in State

2) No Jurisdiction If Property Brought in by Fraud or Force

E. QUASI IN REM JURISDICTION

2) Appointment Required by State to Do Business ��26

1) No Jurisdiction If Property Not Located in State �� 37

4. Realignment According to Interest ��45

3. Statutes Involving Both Substance and Procedure �� 57

E. DISMISSAL OF NONDIVERSE PARTY ALLOWS REMOVAL ��70

1) Effect of Waiver �� 76

4. Inconsistent Claims or Defenses ��83

b) Federal Interpleader Statute �� 97

2. Judicial Arbitration �� 112

9. Motion for New Trial �� 120

1. On Matters of Law �� 125

the contractor would have to show minimum contacts between the