Civil Procedure II Spring J=Jones, S=Smith, SMJ=subject matter juris, pj=personal juris, =plaintiff, ª=defendant

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1 Civil Procedure II Spring 2003 Final Exam Model Professor Fletcher Prosser Question 1 Motion 1 J=Jones, S=Smith, SMJ=subject matter juris, pj=personal juris, =plaintiff, ª=defendant ' 1441 allows removal only if the plaintiff could have filed suit in federal court originally. The district court should not remand the case because the suit could have been brought in fed court under ' A) ' 1331 J asserted two claims, neither of which satisfy the wellpleaded complaint rule, which requires that a federal question be asserted in the complaint. Claim #1 alleges negligent driving under the influence of alcohol. This is purely a state claim and as such does not satisfy the well-pleaded complaint rule. Claim #2 also asserts a state claim: negligent driving under the influence of cocaine. However, this claim may also implicate a federal rule because taking cocaine violates a federal law. Merrill Dow and Smith give guidance in whether a state claim that incorporates a federal issue satisfies the well pleaded complaint rule when there is no private right of action for the fed claim (I=m assuming there is no private right of action for a violation of federal driving law). Under those cases, the answer turns on the importance of the federal question to the state claim. In this case, the federal question is not very important. Even in Merrill Dow (where a fed question was not found), the state claim turned on whether a federal rule had been violated. Here, that is not the case. The state claim does not turn on the violation of federal law B driving under the influence of cocaine is negligence per se, not because taking coke is a federal violation, but because it=s an illegal drug under state law. Therefore, there is no ' 1331 jurisdiction and no removal on that basis. 1

2 You can also have SMJ if the area of law is completely preempted by federal law. Complete preemption usually only applies to ERISA and labor cases, and this is neither. B) ' 1332 Diversity for purposes of ' 1332 is determined by domicile. J is a citizen and domiciliary of Oregon. S appears to be a citizen of Nevada. He grew up on Nevada and he continues to vote there. He also pays taxes on his trust fund in Nevada. One remains a domiciliary of a particular state until one physically resides in another state and indefinitely intends to remain there. Does S indefinitely intend to remain in California? He=s been a student there for 3 years. He has Calif. license plates and driver license and has told UC that he is an in-state resident. He has paid Cal. taxes on his 2L summer earnings. He also said he would Akind of like@ to stay in Calif. after graduation. Despite all those commitment-oriented acts, he has conditioned his staying on passing the bar and getting a permanent job, both very speculative (!) assumptions. Students often say they are residents just go get in-state tuition, not because they are committed to staying there. Until S changes his voting and tax residency or makes a more firm commitment to Calif. he is a Nevada citizen. Because J is an Oregon citizen and S is a Nevada citizen, there is diversity under ' 1332 and the removal is proper (and the suit is for $1 million, which satisfies the amt. in controversy requirement). Motion 2 H=Harrah=s, pj=personal juris. The Calif. fed ct. does have personal jurisdiction over H. Because Calif. long arm statute goes to the extent of the constitutionally allowed reach, we analyze the issue under the constitutional standard set forth in Int=l Shoe and its progeny. A) Are there minimum contacts? Yes. Harrah=s purposefully solicits business in California. H advertises over the internet, which reaches customers in all states including Calif. Importantly, it advertises in the SF Chronicle. Also, many of its customers are from Calif. and I 2

3 think its safe to assume that given Reno=s proximity to Calif., Harrah=s knows that it has many customers from Calif. Based onthis information, Calif. courts and the fed. ct. in Calif. have general PJ over H. Also, there is specific jurisdictions. Under the effects rule, someone who commits a tort in one state with foreseeable negative effects in another state is liable to suit in the affected state. Here, H continued to serve alcohol and S, who had a CA drivers license which they probably checked. The effect of H=s wrongdoing was felt in Calif. and he should be subject to PJ there. B) Does subjecting H to suit in PJ comport with notions of fair play and substantial justice? You bet. Because H has so many Calif. customers and its quite foreseeable that they would get drunk and create an accident in Calif., H is clearly on notice that it could be sued in Calif. It is clear that that was the case here B he crashed just after crossing the border while on the main highway from Reno. Also Reno is not so far from Calif. Any witnesses would be in Reno or in Calif. and could easily be brought to court in Calif. Thus, Calif. has a strong interest in administering justice against a company that sends drunks into Calif., possibly on a regular basis. Since Calif. has a Adram shop@ act this sort of thing must happen all the time. Motion 3 SMJ=sub. matter juris The court should deny the notion to dismiss for lack of SMJ because there is jurisdiction under ' A court has subject matter jurisdiction if there is a federal question under ' 1331 or diversity under ' The court could also keep the claim if there is supplemental jurisdiction under ' A) ' 1331 Jones has asserted the same two claims against H as he asserted against S. As discussed earlier, neither claim satisfies the well-pleaded complaint rule. Even if he sues H for a violation of the dram act, that is a California state law and does not raise a federal question. B) ' 1332 Jones is an Oregon citizen. H is a corporation incorporated in Delaware with its principal place of business in Nevada. 3

4 Because the ª and the plaintiff are diverse, jurisdiction is proper under ' Also, the suit is for $1 million, which satisfies the amount in controversy requirement. C) ' 1367 Because there is independent jurisdiction under ' 1332, ' 1367 does not apply. If it did, it would not extend to this suit because ' 1367(b) precludes jurisdiction for suits by s against Rule 14 ªs when the original suit was in diversity. Motion 4 Although this question now looks much like Asahi, the answer is different. The court should not dismiss for lack of personal jurisdiction. Again, the Calif. long arm statute goes to the extent of constitutional du process, so we analyze the question on the constitutional level. A) Minimum contacts As discussed earlier, H has regular, systematic contacts with California sufficient to warrant general jurisdiction over it. Also, thee is specific jurisdiction (see earlier discussion). B) The question comes down to fairness, just as it did in Asahi. In Asahi, the two remaining parties were both foreign companies who had tenuous connections to California. That is not the case here. As discussed earlier, Calif. has a strong interest in adjudicating this suit. H has a fairly strong connection to Calif., the accident happened in Calif., and it was foreseeable that the accident would happen in Calif. J is from Oregon, but apparently he has no objection to a suit in California because he chose to sue there. All in all, there is no fairness problem with Calif. courts having PJ over H. Motion 5 The district court in Nevada should not dismiss the complaint. Under ' 1404, a change of venue is Aa change of courtroom, not a change of law@ (Van Dusen). The transferee court must apply the law of the transferor state, here Calif. law. Nevada does not have a dram act, so it should apply California=s dram shop act and its accompanying statute of limitations. 4

5 The problem here is that Sun Oil says a transferor laws may apply its own statute of limitations laws. Taking a narrow view of that holding, S=s suit against H would be time-barred. But, I do not believe that a narrow view is the correct one. We know that in Ferens, the Sun Oil rule was applied and the Miss. statute of lim=s, the one with the longer time, was applied and then transferred to a state where the action would have been time-barred. In this case, we have the opposite situation: The case was permitted in the original forum, but time-barred in the second. If the policy behind Van Dusen is to be upheld, we must not permit a transferee state to bar a suit that was properly brought in the original forum. Îs could easily take advantage of forum-shopping and defeat a s interests by transferring to a state that could bar the suit. It is understandable to allow a to expand her rights (and states to exercise their freedom) by choosing to sue in a place where there is a longer statute of limitations (like in Ferens) because a assumes the risk that the suit will not be transferred and they=ll have to litigate in the originally chosen forum. But it=s unfair and unjust to defeat a properly-brought suit by removal. The Nevada courts would endure little hardship by applying the Calif. statute of lims to Calif. law. It makes sense to do so because Nevada courts have already agreed to enforce the Calif. law should that one take the Calif. law in its entirety. Honestly, the real problem here is that the ' 1404 motion was granted in the first place. The increase in convenience was marginal and the injustice if the Nevada it applied its arm statute of limitation would have been great. Denying the transfer would have avoided this ugly statute of lim=s problems (but it might not have made for such a good examination!) Motion 6 Now we have a different situation. S=s suit against H was not properly brought in Calif. because there was no PJ in Calif. Although 1406 has been read broadly to allow transfer when thee is no PJ in the original forum, the laws of the original state do not carry over to the transferee state. This result makes sense because a should not be able to use Calif. laws in Nevada when she could not have properly brought the suit in Calif. Erie, which stands for the idea that you shouldn=t be able to get something in fed court that you couldn=t get in state court, and van Dusen, which holds that a change of courtroom is not a change of law, are both consistent with this result. Therefore, the Nevada court should apply its own statute of 5

6 limitations and dismiss the suit. S had no proper suit in Calif., so only Nevada laws apply. If the Nevada court will entertain a suit based on the Calif. dram act, it has no policy or legal need to apply Calif=s statute of limitations. Again, the real problem here is that the 1406 motion was granted at all. A should not be able to transfer when she had no PJ over the ª in the original forum. But, since this is allowed, the gets no benefits from the law of the original forum. Issue #1 =plaintiffs, ª=defendant, RC=Reyes-Cruz, M=Moncanto The Florida district court should not discuss the case under Piper. Piper dismissed a case in which Scottish s pretextually found a Calif. representative to sue in the United States. The s admitted that they wanted to sue in the US because they were more likely to get a bigger judgment. The accident happened in Scotland, the witnesses were most likely over there, and the s could cite no significant reasons of convenience for suing in the United States. Although the burden on the Î in the US was not great, the court held that a foreign plaintiff=s choice of forum gets less deference and an unfavorable change in law alone is not enough to overcome dismissal. RC=s case is readily distinguishable from Piper. First, although much of the damage done by M happened in Honduras, RC continues to suffer the effects of it here in the United States. He is presumably using US doctors and the US health system as a result of M=s alleged wrongdoing. Second, RC lives in Florida and is a legal immigrant. He did not pretextually find an American representative just to take advantage of American laws. Thirdly, although many witnesses are in Honduras, there are also witnesses, and importantly expert witnesses, here in the US. Fourth, although the Scottish courts were not as plaintifffriendly as the US courts, they did offer reasonable access to justice. The Honduran courts, in contrast, are so biased that RC could not possibly recover justly there. Because of the ongoing damage by RC, the US has a strong interest in adjudicating this case. Because he is not a foreign (he is actually a legal US resident), his choice of forum is entitled to as much weight as that of a US citizen. The facts that there are a significant number of witnesses and expert witnesses in the US and that RS and M are both United States 6

7 residents makes it convenient to have the trial in the US. Those facts counterbalance fact that the allegedly illegal activity happened in Honduras and that many witnesses are there and that the Honduras law is being used. Finally, Piper said that an unfavorable change in law could be a relevant consideration if the alternate forum has so inadequate that it would provide Ano remedy at all.@ That is the case here. Although the Honduras courts might offer RS a Apittance@ of a recovery that recovery would not be even close to just because it was in effect landholders and the corporations who judged the case, not an independent court. An extremely biased court cannot provide a remedy. Therefore, a dismissal on FNC would, in this case, be against the interests of justice. This consideration makes sense in terms of policy. Although US courts have an interest in protecting American business against foreign plaintiffs (that idea seems to be motivating Piper), they have stronger interest in holding US corporations accountable to American residents/citizens, even when the alleged wrongdoing happened abroad. Issue #2 The federal court should apply the state law. To decide this issue, we apply traditional Erie analysis uder Hanna, York, and Byrd. A) Hanna B Three is no Federal Rule of civil procedure that governs FNC. Therefore, the first prong of Hanna doesn=t apply and one should do a York and Byrd analysis. B) York The test under York considers whether the federal law would result in an outcome so different from state law that to apply it would undermine the Erie policy advocating similar results in state and fed court. Hanna fine-tuned the York analysis to focus on the A twin arms@ of Erie: avoidance of forum-shopping, and avoidance of the inequitable administration of justice. 1) Forum-shopping In this case, Florida law would deny a motion to discuss for FNC. Although I argued that Federal law under Piper would also deny a motion to dismiss, this conclusion is by no means certain. The facts are such that a court could easily come down the other way. The Florida law is very protective of the and the federal law is less so. A plaintiff choosing between state court and 7

8 federal court would absolutely consider the respective FNC laws and choose the court with one most favorable to s. In a case such as this are where the alternative forum is so unfavorable as to offer no remedy, FNC rules will certainly be a major factor in the s choice of forum. 2) Equitable administration of justice Clearly, the difference between results in state court and federal court would be significant. In state courts the suit will certainly not get dismissed. In fed court, there is a reasonable chance that the suit will get dismissed. Such a disparity in results based on which court you are in undermines Erie=s policy that Athe same transaction@ the accident of a suit...in federal court instead of in a state court a block away should not lead to a substantially, different result.@ (York - casebook p. 504) Therefore, under York, Florida state rule should apply because the FNC rule is outcome-determinative with respect to the twin aims of Erie. c) Byrd The Byrd analysis considers the relative interests of the state and the federal government. The federal interests in applying a federal FNC law are substantial but not very strong. Because FNC laws vary greatly from state to state, following the state law would create much inconsistency among the federal courts. However, fed courts already accept such inconsistency in many contexts. Erie mandates that consistency in the context of substantive law is diversity cases and justifies it (see above York analysis) reasonably. Fed courts already apply state choice of law rules, claim preclusion rules, and statutes of limitation in addition to substantive law, and I have a hard time seeing why FNC should be any different. The fed gov. does have a significant in strong interest in maintaining conformity with respect to foreign relations. Unless the fed courts create a federal common law rule of FNC binding over the states, this interest in uniformity is not served by following a general federal FNC rule that=s not binding on the states. For example, the problem in Asahi would still come up if there is not binding federal common law. Furthermore, the states do have a strong interest in applying their own FNC law. States should be able to decide how -friendly they want to be. In a case such as this one, Florida 8

9 has a very strong interest because the is a Florida resident who is suffering the damages inflicted by M in Florida, using Florida health system and other state services. Therefore, Florida has a strong interest in hearing this =s case. On balance, the Byrd test shows equally strong interests for the state and federal government. (Note that if were considering a federal common law rule, the balance would favor the federal rule). The York test weighs heavily in the state=s favor. Therefore, the federal court should apply Florida FNC law and deny the motion to dismiss. 9