CIVIL PROCEDURE OUTLINE

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1 Civ Pr, Outline, Prfessr Glen Staszewski, Fall 2012 CIVIL PROCEDURE OUTLINE CIVIL PROCEDURE- Curse abut where lawsuits can be brught (persnal AND subject matter jurisdictin must be satisfied) and hw litigatin is cnducted) Federal Curts- limited jurisdictin State Curts- general jurisdictin PERSONAL JURISDICTION- determines where curts can enter an enfrceable judgment against the D; is a gegraphic limitatin n the places where P may chse t sue D fr particular claim determines which curts can enter enfrceable judgment against D (fcus n which states) & hw D can challenge it; if persnal jurisdictin is nt raised, it is waived OVERVIEW Cnstitutinal requirement- persnal jurisdictin is a cnstitutinal requirement fr bth state and federal curts. A judgment rendered against a persn ver whm the curt has n persnal jurisdictin vilates that persn s right t due prcess Cmmn law statutes fr persnal jurisdictin: Lng-arm statutes- Lng arm statutes usually cnstitutin when there are min cntacts and service Ability f lcal curts t exercise jurisdictin ver freign ("freign" meaning ut-fstate) defendants, whether n a statutry basis r thrugh a curt s inherent jurisdictin (depending n the jurisdictin). This jurisdictin permits a curt t hear a case against a defendant and enter a binding judgment against a defendant residing utside the jurisdictin cncerned. Generally, the authrity f a curt t exercise lng-arm jurisdictin must be based upn sme actin f the defendant, which subjects him r her t the jurisdictin f the curt Venue statutes- a civil actin can be brught: A judicial district in which any defendant resides, if all defendants are residents f the state in which the district is lcated A judicial district in which a substantial part f the events r missin giving rise t the claim ccurred, r a substantial part f prperty that is the subject f the actin is situated If there is n district in which an actin may therwise be brught, any judicial district in which any defendant is subject t the curts persnal jurisdictin with respect t such actin Transfer statutes- Can change venue fr cnvenience f the parties and witnesses t any ther district where it might have been brught r where all parties have cnsented Frum nn-cnvenience (Judicial dctrine)- curts will ccasinally dismiss case pursuant t this s that it can be brught in anther frum (usually nt used) Tw categries f persnal jurisdictin: In persnam (jurisdictin ver persn)- needs t be prvided with persnal service f prcess within state In rem (jurisdictin ver prperty)- prperty has t be within state and prperty has t be attached at utset f cases Differences between in persnam and in rem: In persnam jurisdictin is btained by serving defendant persnally with prcess. In rem is btained by seizing prperty. POWER THEORY OF JURISDICTION- states have jurisdictin ver peple and prperty within their brders Frms f Jurisdictin (in persnam, in rem, cnsent, dmiciled in state) In persnam Service f prcess- prper service f prcess is als necessary befre a curt may exercise persnal jurisdictin ver a defendant. Any judgment rendered withut reasnable ntice vilates defendant s due prcess rights and therefre is invalid Rule 4- Can Serve Smene by: Fllwing the state law 1

2 Civ Pr, Outline, Prfessr Glen Staszewski, Fall 2012 In rem Cnsent Delivering a cpy t the individual Leaving a cpy at the individual s dwelling r usual place f abde with smene f a suitable age Delivering t an agent authrized Mullane (1950)- an elementary and fundamental requirement f due prcess in any prceeding which is t be accrded finality is ntice reasnably calculated, under all the circumstances, t apprise interested parties f the pendency f the actin and affrd them an pprtunity t present their bjectins Persnal service is ALWAYS adequate Persn needs t have adequate ntice Persnal service is t tell peple abut law suit and give them a chance t bject Persnal service needs t be reasnable under the circumstances Persnal appearance- waiver Statutry Cnsent - If yu cnduct business within state, have t appint agent within state t accept services Cntract- agreement Implied Cnsent Dmiciled in State (general jurisdictin) (Hawkins) Peple- physical presence in state and intent t remain Crpratins- principal place f business Place where a crpratin s high level fficers direct, cntrl, and crdinate the crpratin s activities Place f incrpratin and crprate headquarters- nerve center PROCEDURES FOR CHALLENGING PERSONAL JURISDICTION (has t be challenged immediately r the curt will deem yu t have cnsented) Take a default judgment and cnduct a cllateral attack Risky Special Appearance Available in sme states Peple can shw up and challenge persnal jurisdictin withut being persnally served while ding s Mtin t dismiss fr lack f persnal jurisdictin File an answer in respnse t cmplaint and raise persnal jurisdictin as an affirmative defense and then mve t dismiss the case MODERN CONSTITUTIONAL TEST OF PERSONAL JURISDICTION- these decisins develped the current minimum cntacts test Imprtant Aspects f Minimum Cntacts: 1) Minimum cntacts applies t bth individuals and crpratins 2) Limitatins n minimum cntacts fund in lng-arm statutes 3) D may have sufficient cntacts within a state t supprt minimum cntracts even thugh she did nt act within the state If D cmmits act utside the state and knws it will cause harmful effects within the state, she will be subject t jurisdictin fr claims arising ut f that act 4) Minimum cntracts analysis fcuses n the time when the D acted, nt at the time f the lawsuit 2

3 Civ Pr, Outline, Prfessr Glen Staszewski, Fall 2012 parties wh cnduct activities in a state accept the risk that thse activities will give rise t suits and understand that they may have t return t the state where the activity was cnducted t defend the suit jurisdictin based n in-state service nly requires D t be present in the state at the time that the summns and cmplaint are served upn her Pennyer (1877)- Oregn st ct lacked persnal jurisdictin t enter enfrceable judgment against Neff because Neff was neither persnally served with prcess in the state (in persnam jurisdictin) nr was his prperty attached prir t the initiatin f the lawsuit (in rem jurisdictin) Persn r prperty in state: Presence sufficient- a state jurisdictin had jurisdictin ver a persn merely passing thrugh the state prvided they be service within the state Ntice required- in persnam jurisdictin requires being served while in that state; in rem requires exercising dminin ver the prperty at the utset f the actin Exceptins t having in persnam jurisdictin fr smene nly in the state: Status- curt has authrity t determine the status f ne f its citizens in relatin t a nnresident; jurisdictin ver the citizen gave the curt jurisdictin ver the status, t Exp. a curt culd grant a divrce even thugh nly ne spuse was a resident Cnsent- cnsenting t jurisdictin in the state Internatinal She (1945)- the crpratins nly cnnectin with Washingtn was that it emplyed salesmen in the state, but curt said that due prcess requires nly that the defendant have certain minimum cntacts within the frum state such that the maintenance f the suit des nt ffend traditinal ntins f fair play and substantial justice ; curt fund that the cnnectin t Washingtn was adequate (She nly dealt with in persnam; still use minimum cntacts test tday) Recgnizes tw categries f in persnam jurisdictin: 1. General Jurisdictin- when cntacts are s substantial and f such a nature as t justify suit against [the defendant] n causes f actin arising frm dealings entirely distant frm thse activities cntinuus and systematic cntacts Peple- where they are dmiciled Crpratins- principal place f business / nerve center Place f incrpratin Place where a crpratin s high level fficers direct, cntrl, and crdinate the crpratin s activities 2. Specific Jurisdictin- jurisdictin ver persn fr a particular type f claim Minimum cntact? (2-prng test): 1. sufficient minimum cntacts Level f activity (is it a single islated r cntinuus and systematic cntact?) Relatedness t claim 2. traditinal ntins f fair place and substantial justice Fairness (traditinal ntins f fair play and substantial justice) Reasnable frm f ntice? Can t put ntice in a newspaper that wn t be seen Analysis- Internatinal She rejected Pennyer s apprach in lieu f an apprach that cnsiders the cnnectins between the defendant and the frum McGee (1957)- TX insurance cmpany cntacted a persn in CA t ask t d business with them the Due Prcess clause did nt preclude a CA ct frm entering a binding judgment n a TX insurance cmpany because (1) the suit was based n a cntact that had a substantial cnnectin with the state; (2) CA has a manifest interest in prviding effective means f redress fr its residence when their insurers refuse t pay claims; and (3) there was n 3

4 Civ Pr, Outline, Prfessr Glen Staszewski, Fall 2012 cntentin that the defendant did nt have adequate ntice f the suit r sufficient time t defend itself Hansn (1958)- Dnner went t a trust cmpany in DE when she lived in PA and gt a trust; Dnner mved t FL; althugh Dnner received trust incme and carried n sme trust administratin in FL, the trust cmpany did nt have minimum cntacts with FL Essential that there be sme act by which the defendant purpsefully avails itself f the privilege f cnducting activities in the frum state, thus invking the benefits and prtectins f its law D must have made a deliberate chice t relate t the state in sme meaningful way befre she can be made t bear the burden f defending there Criteria: 1. purpsefully avails itself t the frum state 2. invkes the benefits and prtectins f its law Shaffer (1977)- DE ct can t btain persnal jurisdictin ver defendant bc defendant did nt have minimum cntacts; just bc defendant has prperty within the state, withut ther ties, des nt cnstitute minimum cntacts Issue- Whether a DE Statute allws a ct f that state t take jurisdictin f a lawsuit by sequestering any prperty f the defendant that happens t be lcated in DE? NO, defendants nly allwed t be tried in states where they have minimum cntacts with the state Criteria fr persnal jurisdictin: 1. Need minimum cntacts prperty is nly ne frm f cntact 2. All assertins f state curt jurisdictin must be evaluated accrding t the Internatinal She standard. sufficient minimum cntacts traditinal ntins f fair place and substantial justice Wrld Wide Vlkswagen (1980)- Ps sued in OK fr injuries suffered by an accident invlved the defective car that was purpsed by D; P purchased the car in NY while they were NY residents; D did nt d business in OK; OK ct culd nt exercise persnal jurisdictin ver a car dealer and reginal distributr frm NY bc defendants had n cntacts, ties, r relatins with OK did nt seek any direct benefit frm OK activities sufficient t require it submit t jurisdictin there Was it freseeable that a car wuld g t OK? Yes, but frseeablility is nt enugh alne t establish persnal jurisdictin Frseeability is NOT minimum cntacts What is necessary fr defendant t have minimum cntacts? Purpsefully avails itself f the privileges f cnducting activities in the frum state Delivery prducts int the stream f cmmerce with expectatin they be bught in the frum state (exp. custmizing an item fr a market) Stream f cmmerce- when a defendant distributes its gds in multiple states thrugh a third party; althugh defendant knws that sme f its gds g t a particular state, it des nt knw exactly which prducts g where Ways D s gds can reach the frum state: 1. An ut-f-state cmpnent manufacturer sells cmpnents t a manufacturer f a finished prduct utside the state; then that manufacturer incrprates the cmpnent int a finished prduct and distributes the finished prduct in the frum state The party at the beginning f the stream f cmmerce DID NOT imprt the prduct int the frum state itself Exp. Asahi 4

5 Civ Pr, Outline, Prfessr Glen Staszewski, Fall Manufacturer sells finished prducts t a whlesaler utside the state, the whlesaler then resells t a retailer in the frum state, and the retailer resells t the cnsumer The party at the beginning f the stream f cmmerce DID NOT imprt the prduct int the frum state itself Issue with persnal jurisdictin: Whether purpsefully injecting gds int the stream f cmmerce cnstitutes purpseful availment with a state in which ne f thse gds causes injury? Reasns fr minimum cntacts test: Fairness t defendants- shuldn t have t g defend themselves in places where they have n cntacts Federalism- maybe have jurisdictin in NY, but nt in OK APPLICATION OF THE MODERN CONSTITUTIONAL TEST Asahi (1987)- brught suit in CA st ct claiming the rear tire was defective; Asahi ships valve frm Japan t Taiwan; the Japanese manufacture sld tires with the value thrughut the wrld, including in the U.S.; There was evidence that Asahi was aware that the values sld t Japan wuld end up in the U.S.; Asahi made n direct sales in CA and had n ffices r agents there, and didn t cntrl the system f distributin that carried its prducts int the state Whether the mere act f selling gds utside the frum state that will likely be imprted int the frum state fr resale suffices t supprt jurisdictin?/ Whether purpsefully injecting gds int the stream f cmmerce cnstitutes purpseful availment with a state in which ne f thse gds causes injury? (A) Minimum Cntacts? O Cnnr Plurality (nt binding bc nly 4/9 justices)-asahi had n minimum cntacts in CA bc didn t take any purpseful actin directed twards the frum state Difference between mere awareness" and "purpseful availment": The "substantial cnnectin" between a defendant and the frum State necessary fr a finding f minimum cntacts must derive frm an actin purpsely directed tward the frum State, and the mere placement f a prduct int the stream f cmmerce is nt such an act, even if dne with an awareness that the stream will sweep the prduct int the frum State absent additinal cnduct indicating an intent t serve the frum state market Brennan s Cncurring- Asahi did Asahi has minimum cntacts because they put their prducts int cmmerce and the prduct is ending up in CA injecting gds int the stream f cmmerce with freseeable destinatin As lng as a participant in this prcess is aware that the final prduct is being marketed in the frum State, the pssibility f a lawsuit there cannt cme as a surprise. sending gds int the stream f cmmerce in substantial quantities cnstitutes purpseful availment whether r nt the riginal maker knws that the gds will be sld in a particular state Stevens Cncurring- CA jurisdictin ver Asahi wuld be unreasnable and unfair

6 Civ Pr, Outline, Prfessr Glen Staszewski, Fall 2012 whether r nt cnduct rises t the level f purpseful availment requires a cnstitutinal determinatin that is affected by the vlume, value, and hazardus character f the cmpnents) (B) Fair Play and Substantial Justice (reasnableness) Test t determine whether "traditinal ntins f fair play" wuld permit the assertin f persnal jurisdictin ver a freign (meaning ut-f-state) defendant: 1. Burden n the defendant- this cnsiders nt nly the distance defendant must travel but als any ther circumstances that make defending in the frum burdensme n defendant 2. Interests f the frum state- a state is interested in hearing a case if any f the parties are frm that state r if the dispute directly affects that state 3. Interests f the plaintiff- this is satisfied if plaintiff is frm the frum r if the frum is cnvenient place t try the case because f the availability f witness r ther evidence 4. Interests f federal system (especially freign natins) Persnal jurisdictin in this case wuld vilate traditinal ntins f fair play and substantial justice because the exercise f jurisdictin wuld be unreasnable even if minimum cntacts existed Burger King (1985)- FLs exercise f persnal jurisdictin didn t vilate due prcess bc defendant deliberately reached ut beynd MI and negtiated with a FL crpratin fr the acquisitin f a lngterm franchise and the benefits that wuld derive frm affiliatin with a natinwide rganizatin Where the D has purpsefully directed activities t the frum state, jurisdictin is presumptively reasnable Test fr Determining if there is Persnal Jurisdictin: (1) Minimum cntacts- purpse f this test is t prvide individuals with fair warning that their activities within a frum may subject them t suit there Fair Warning requirement- satisfied if the defendant has purpsefully directed his activities at residents f the frum and the litigatin results frm alleged injuries that arise ut f r relate t thse activities (2) Fair play and substantial justice- nce it has been decided that a defendant purpsefully established minimum cntacts with the frum state, these cntacts may be cnsidered in light f ther factrs t determine whether they cmprt with fair play and substantial justice These cnsideratins smetimes serve t establish the reasnableness f jurisdictin upn a lesser shwing f minimum cntacts than wuld therwise be required. On the ther hand, where a defendant wh purpsefully has directed his activities at frum residents seeks t defeat jurisdictin, he must present a cmpelling case that the presence f sme ther cnsideratin wuld render jurisdictin uncnstitutinal Why was defendant subject t persnal jurisdictin? Deliberately reached ut t FL t frm/enter int cntract (lng-term franchise) Chice f law clause THE LATEST WORD ON PERSONAL JURISDICTION INTERNET CASES: Pavlvich (2002)- the exercise f persnal jurisdictin ver defendant in CA wuld vilate due prcess because his website was neither interactive nr specifically targeted tward the frum and he lacked knwledge that his activities wuld cause cncrete harm within the state If smene psts smething n the Internet, there are minimum cntacts, BUT then everyne wuld get persnal jurisdictin and it wuld be a free fr all 6

7 Civ Pr, Outline, Prfessr Glen Staszewski, Fall 2012 Sliding Scale Test (3-prngs) 1. Clearly ding business in frum= minimum cntacts 2. Interactive websites (viewver may enter infrmatin that affedcts th site but nt enter int a transactin; curts lk t all the circumstances, including the level f activite and whether the site is cmmercial in nature) 3. Psting infrmatin= n minimum cntacts Calder- D subject t persnal jurisdictin in CA fr allegedly defamatry article written I FL, since the article was t be circulated in CA the P lived there, and the Ps career was centered there Effects Test (Calder) (2-prngs) Defendant must have expressly aimed intentinal cnduct at the frum state Defendant must have knwn that this intentinal cnduct wuld cause harm in the frum STREAM OF COMMERCE CASES- USUALLY A DEFECTIVE PRODUCT THAT ENDS UP IN THAT STATES COMMERCE McIntyre v. Nicastr (2011)- emplyee was hurt using a machine that was frm an English cmpany; Supreme curt specified hw t analyze stream f cmmerce cases (says there needs t be mre than 4 prducts put int the stream f cmmerce) NJ curts culd NOT exercise persnal jurisdictin ver an English manufacturer that neither marketed gds in the state nr shipped them there Merely placing the prduct int the stream f cmmerce is nt enugh t subject a defendant t persnal jurisdictin, even f the defendant knws the prduct will end up in the frum Plurality (Kennedy; 4 justices)- defendant did nt take purpseful actin that was directed at the frum state 1. Due prcess prtects petitiner s rights t be subject nly t lawful authrity (as determined by traditinal practice ; at n time did petitiner engage in any activities in NJ that reveal an intent t invke r benefit frm the prtectins f its laws 2. Criticizes Bennan s Asahi pinin and the dissent n the grunds that they are incnsistent with the premises f lawful judicial pwer ; Freefrm ntins f fundamental fairness divrced frm traditinal practice cannt transfrm a judgment rendered in the absence f authrity int law DUE PROCESS= POWER (stemming frm traditinal practice; NOT FAIRNESS (r Reasn) Wuld say wealth matters Breyer Cncurring (2 justices)- plaintiff failed t meet his burden t demnstrate that it was cnstitutinally prper t exercise jurisdictin ver McIntyre based n previus curt prceedings (Vlkswagn) Claims that this is an unsuitable vehicle fr making brad prnuncements that refashin basic jurisdictinal rules, because this case des nt implicate mdern cncerns, such as thse raised by the Internet Ginsburg Dissenting (4 justices)- defendant was subject t persnal jurisdictin in NJ because it put its prduct in the stream f cmmerce, knwing that it culd be sld there (irrespective f its use f a natinal distributr) DUE PROCESS- FAIRNESS AND REASON; NOT SOVEREIGN POWER (r traditin) 7

8 Civ Pr, Outline, Prfessr Glen Staszewski, Fall 2012 Wuld say wealth desn t matter GENERAL JURISDICTION AND THE CONTINUTED IMPORTANCE OF CONSENT GENERAL JURISDICTION- CONTINUOUS AND SYSTEMATIC CONTACTS Gdyear (2011)- bus accident utside f Paris killing tw bys frm NC; attribute t the Gdyear tiers frm Turkey The freign subsidiaries f the Gdyear USA were nt subject t general jurisdictin in NC bc their attenuated cnnectins t the State fall shrt f the cntinuus and systematic general business cntacts necessary t empwer NC t entertain suit against them n claims unrelated t anything that cnnects t the State Supreme Curt acknwledged that general jurisdictin culd exist in the prper case, but fund that there were insufficient cntacts fr general jurisdictin PRESENCE IN STATE- ALLOWS A STATE TO EXERCISE JURISDICTION OVER ANYONE WHO WAS SERVED WHILE PRESENT IN THE STATE Burnham (1990)- CA curt may exercise persnal jurisdictin ver a nn-resident wh was persnally served with prcess while temprarily in the state; Tag Jurisdictin= state can assert jurisdictin ver a persn wh temprarily enters the state Scalia view (4 justices; Part II) Bright Line Rule- amng the mst firmly established principles f persnal jurisdictin in American traditin is that the curts f a state have jurisdictin ver nnresidents wh are physically present in the state Traditinal practice frm Pennyer- jurisdictin based n physical presence alne cnstitutes due prcess because it is ne f the cntinuing traditins f ur legal system that define the due prcess standard Scalia (3 justices, Part III) Criticizes the subjectivity, and hence, inadequacy, f Brennan s apprach Brennan s view (4 justices, cncurring) Case by Case Inquiry- the Due Prcess Clause generally permits a state curt t exercise jurisdictin ver a defendant if he is served with prcess while vluntarily present in the frum state Nnetheless, it is necessary t undertake an independent inquiry int the fairness f the prevailing in-state service rule. The critical insight f Shaffer is that all rules f jurisdictin, even ancient ne, must actually satisfy cntemprary ntins f due prcess. Cncurs in judgment because in this case, it is undisputed that petitiner was served with prcess while vluntarily and knwingly in the state f CA = CA curt has general jurisdictin Knwingly and vluntarily present in the frum state Stevens s view (cncurring)- didn t jin either side bc it was a very easy case and jurisdictin was present Traditin + Fairness + Cmmn Sense = Easy Case CONSENT- PERSONAL JURISDICTION IS A PERSONAL DEFENSE, SO A PARTY MAY WAIVE IT EITHER EXPRESSLY OR BY TAKING ACTIONS INCONSISTENT WITH THE DEFENSE Carnival Cruise (1991)- gt tickets fr a cruise and was injured n cruise, and the ticket had a clause n it stating that any suit must be filed in FL Frum selectin clause is enfrceable fundamental fairness did nt preclude the enfrcement f a frum-selectin clause cntained in tickets issued by cruise line t its passengers when there was n bad faith, fraud, r verreaching (i.e. FL was a sensible place t cnduct the litigatin) and plaintiffs essentially cnceded that they had ntice f the prvisin 8

9 Civ Pr, Outline, Prfessr Glen Staszewski, Fall 2012 Hyps: If there was n frum clause, where wuld carnival cruise have jurisdictin? WA bc minimum cntacts (specific jurisdictin) FL bc dmiciled there (general jurisdictin CA bc minimum cntacts (specific jurisdictn) What if carnival cruise wants t sue Shutes fr prperty she destryed? If there is n frum selectin clause: Prbably cannt n FL bc Shutes have n minimum cntacts, BUT can pssibly use the Burger King precedent If there is a frum selectin clause: If Shutes knew f clause: Ntice? Bad faith? Fraud? Overreaching? 9

10 Civ Pr, HOW Outline, TO Prfessr ANALYZE Glen Staszewski, PERSONAL Fall JURISDICTION: 2012 Start with these questins: 1. IS THERE GENERAL OR SPECIFIC JURISDICTION? a. If General: i. IS D DOMICILED IN THE FORUM STATE? Hawkins 1. If yes, there is valid persnal jurisdictin ii. DOES D HAVE CONTINUOUS AND SYSTEMATIC CONTACTS WITH THE FORUM STATE? Gdyear 1. If yes, there is valid persnal jurisdictin b. If Specific: i. DID D CONSENT TO PERSONAL JURISDICITON? Carnival Cruise ii. WAS D PRESENT IN THE FORUM STATE WHEN PROCESS WAS SERVED ON HIM (IN PERSONAM JURISDICTION)? Pennyer and Burnham 1. If yes, there is valid persnal jurisdictin iii. DOES D HAVE MINIMUM CONTACTS WITH THE FORUM STATE? Internatinal She 1. If yes a. Are the cntacts sufficient? i. Level f activity (is it a single islated r cntinuus and systematic cntact?) ii. Relatedness t claim b. Des the maintenance f the suit ffend traditinal ntins f fair play and substantial justice? i. Fairness (traditinal ntins f fair play and substantial justice) ii. Reasnable frm f ntice? T supprt arguments fr PL r DF fr specific jurisdictin: Wuld it be fair play and substantial justice fr the curt t have jurisdictin? Is there a burden n the defendant (distance t travel), des the frum state have an interest, des the plaintiff have interest (plaintiff frm state r it is cnvenient), des the federal system have interest? Asahi Des D have substantial cnnectins with state, des the state have a manifest interest, and did D have adequate ntice? McGee Did D purpsely avail itself t the privilege f cnducting activities in the frum state, thus invking the benefits and prtectins f its law? Hansn Did D purpsefully direct his activities at residents f the frum and the litigatin results frm alleged injuries that arise ut f r relate t thse activities? Burger King Fr internet: Did D clearly d business in the frum (min. cntacts), have interactive websites (lk at circumstances), r just pst infrmatin (n min. cntacts? Pavlvich Sliding Scale r Calder Stream f Cmmerce: Did D purpsefully avail itself f the privileges f cnducting activities in the frum state by delivering prducts int the stream f cmmerce with expectatin they d be bught in the frum state? Wrld-Wide Vlkwagn Did D take purpseful actin directed twards the frum state? Asahi- plurality Did D inject gds int the stream f cmmerce with a freseeable destinatin? Asahi- cncurrence Did cnduct rise t the level f purpseful availment, which requires a cnstitutinal determinatin that is affected by the vlume, value, and hazardus character f the cmpnents? Asahi- Steven s cncurring Did D take purpseful actin that was directed at the frum state by placing the prduct int the stream f cmmerce, knwing the prduct wuld end up in frum? (merely placing prduct int stream f cmmerce is nt enugh) McIntyre 10

11 Civ Pr, Outline, Prfessr Glen Staszewski, Fall 2012 SUBJECT MATTER JURISDICTION- whether the curt has authrity t adjudicate a particular type f case; if subject matter jurisdictin is nt raised, it is nt waived because a curt may still nt have the pwer t hear a case GENERAL: Federal Curt has jurisdictin if: Federal questins (1331)- cases that arise under federal law Diversity cases (Article 3, 1332)- cmplete diversity in citizenship and greater than $75,000 in claim Supplement jurisdictin (Article III and 1367) Remval Psitives abut federal curt: Shrter dckets Mves faster Diverse jury pl Experienced lawyers FEDERAL QUESTIONS (1331)- requires that the claim arise under federal law; must be a substantial federal claim 3 surces f federal questins : cases arising under the natinal Cnstitutin cases arising under federal law cases arising under treaties Well-pleaded Cmplaint Rule- asks whether the federal element is necessary t plaintiff s case Plaintiff has t raise cause f actin in cmplaint Purpse- efficiency (helps srt cases befre t much mney and time has been spent) Luisville (1908)- Plaintiff was injured while riding a train; settled by giving Plaintiff free transprtatin fr life; then a act f Cngress was past and frbade the giving f free passes There was n federal subject matter jurisdictin because issues f federal law were used as a defense; the actual claim was fr breach f cntract under state law A suit arises under the Cnstitutin and laws f the U.S. fr purpses f 1331 nly when the plaintiff s well pleaded cmplaint is based upn federal law DIVERSITY CASES (ARTICLE 3, 1332) Hw t establish diversity: Diversity must exist at the cmmencement f the actin Plaintiff must include a statement in her federal cmplaint alleging diversity is satisfied Plaintiff bears the burden t prve diversity 2 Requirements f 1332: 1. Diversity- pl and df wh are citizens f different states r citizens r subjects f a freign state 2. Must invlve an amunt in cntrversy in excess f $75,000 Article III- citizens f different states; nthing at $75,000 r mre (that is a statutry requirement) 1332: (a) cmplete diversity in citizenship and greater than $75,000 in claim Actins between: (a)(1) citizens f different states Redner (2000)- fed. District curt dismissed a case against NY defendants fr lack f sub. matter jurisdictin bc there was n diversity f citizenship. Plaintiff wasn t a citizen f France (while wuld have authrized diversity under 1332(a)(2)) nr a citizen f CA (which wuld have established diversity jurisdictin under 1332(a)(1)) (a)(2) citizens f a State and citizens r subjects f a freign state, except that the district curts shall nt have riginal jurisdictin under this subsectin f an actin between citizens f a State and citizens r subjects f a freign state wh are lawfully admitted fr permanent residence in the United States and are dmiciled in the same State; 11

12 Civ Pr, Outline, Prfessr Glen Staszewski, Fall 2012 (a)(3) citizens f different States and in which citizens r subjects f a freign state are additinal parties; and (a)(4) a freign state, defined in sectin 1603 (a)f this title, as plaintiff and citizens f a State r f different States. (c)(1) a crpratin shall be deemed t be a citizen f every State and freign state by which it has been incrprated and f the State r freign state where it has its principal place f business, except that in any direct actin against the insurer f a plicy r cntract f liability insurance, whether incrprated r unincrprated, t which actin the insured is nt jined as a party-defendant, such insurer shall be deemed a citizen f (c)(1)(a) every State and freign state f which the insured is a citizen; (c)(1)(b) every State and freign state by which the insurer has been incrprated; and (c)(1)(c) the State r freign state where the insurer has its principal place f business Hertz (2010)- a crpratin shall be deemed t be a citizen f any state by which it has been incrprated and f the state where it has its principal place f 12 business Nerve Center Test - where the crpratins high level fficers direct, cntrl, and crdinate the crpratins activities Hyps: Is there diversity jurisdictin in: CA v. NY?- Yes, under 1332(a)(1) CA v. Mexic and Japan?- Yes, under 1332(a)(2) CA and Mexic v. NY and Japan?- Yes, under 1332(a)(3) CA and Mexic v. Japan?- N, because there is freign natins n bth sides Mexic v. Japan (aliens living in NY)?- N, even if they were aliens living in NY, can nly be litigated in state curt, but nt fed. Curt ***n diversity jurisdictin fr any aliens invlved because they are nt technically citizens they can nly g t state curt CA v. NJ (divrce case)?- N, family law is nt in diversity jurisdictin NY citizen v. NY crp. (if cmpany des mst business in NJ)? N, the nerve center is in NY, s there is nt diversity SUPPLEMENT JURISDICTION (ARTICLE III AND 1367)- The tw claims (federal and state) must be: a cmmn nucleus f perative facts There is supplemental jurisdictin if: 1. Primary claim arises under federal law 2. Besides federal claim, plaintiff als claims a state claim (exp. breach f cntract with is state law) and the state claim is tact n then by supplemental jurisdictin can exercise authrity ver the claim Article III- if the claims are clse enugh t the same cntrversy, they are sufficiently related Article III- district curts shall have the riginal jurisdictin f all civil actins arising under the Cnstitutin, laws, r treaties f the U.S. 1367(a)- relatinship test whether the tw frm part f the same case r cntrversy under Article III f the U.S.C. In any civil actin f which the district curts have riginal jurisdictin, the district curts shall have supplemental jurisdictin ver all ther claims that are s related t claims in the actin within such riginal jurisdictin that they frm part f the same case r cntrversy under Article III f the United

13 Civ Pr, Outline, Prfessr Glen Staszewski, Fall 2012 States Cnstitutin. Such supplemental jurisdictin shall include claims that invlve the jinder r interventin f additinal parties In re Ameriquest Mrtgage C. (2007)- district curt denied defendants mtin t dismiss plaintiff s state law claims fr lack f supplemental jurisdictin because the state and federal claims were cnnected by cmmn and perative facts (they were intertwined) and there was n cmpelling reasn fr the curt t decline t exercise supplemental jurisdictin 1367(c)- prevents the use f supplemental jurisdictin ver claims brught by plaintiffs against parties jined under certain listed rules The district curts may decline t exercise supplemental jurisdictin ver a claim under subsectin (a) if (1) the claim raises a nvel r cmplex issue f State law (2) the claim substantially predminates ver the claim r claims ver which the district curt has riginal jurisdictin such that federal curt desn t want anything t d with it (if state case is strng, federal curt dismisses because desn t want it) Szendrey-Rams (2007)- the district curt granted defendant s mtin t dismiss plaintiff s state law claims fr lack f supplemental jurisdictin because the Puert Ric law claims predminated ver plaintiff s federal claim under Title VII and there were nvel and cmplex issues f Puert Ric law (3) the district curt has dismissed all claims ver which it has riginal jurisdictin, r (4) in exceptinal circumstances, there are ther cmpelling reasns fr declining jurisdictin Hyps: 1: Emplyer sues cmpany fr sexual harassment under federal statute Can sue in federal curt What if plaintiff wants t add a state law claim fr IIED? Can there be supplemental jurisdictin? Yes Is there any reasn fr federal curt t decline? N because the state claim desn t substantially dminate What if plaintiff wants t add a state law claim fr assault and battery? Is there supplemental jurisdictin? Yes Is there any reasn fr federal curt t decline? N because the number f state law claims des nt matter!! What if plaintiff als wants t sue the perpetratr fr assault and battery (perpetratr is an emplyee as well and all f them are frm the same state)? Is there diversity jurisdictin? N because they are all frm the same state Des the claim derive frm the same nucleus (is there supplemental jurisdictin)? Yes because it is still the same stry 1367(a)- Such supplemental jurisdictin shall include claims that invlve the jinder r interventin f additinal parties 1367(b)- nly applies in diversity cases What if the federal claim is dismissed and there is nly a state claim left? What shuld the federal curt d? 13

14 Civ Pr, Outline, Prfessr Glen Staszewski, Fall 2012 Dismiss state claim pursuant t 1367(c) What if supplemental state law claims are dismissed? under Statute f Limitatins, defendant has 30 days t re-file in state curt 2: Plaintiff (emplyee) frm Michigan Defendant (emplyer) frm Illinis Suing fr sexual harassment, but it is a state law claim Des federal curt have jurisdictin? Yes because diversity jurisdictin f citizenship New plaintiff supervisr frm Michigan Is there supplemental jurisdictin? N because f 1367(b)- if the surce f federal jurisdictin is diversity, cant use supplemental jurisdictin t get arund cmplete diversity REMOVAL- CASES FROM STATE COURT TO FEDERAL COURT (1441) 1441: When is case remvable? generally a case in state curt may be remved when it culd have been filed riginally in federal curt The federal curt t which the case is remved must have diversity, federal questin, and/r supplemental jurisdictin ver all claims in the case Certain expectatins t the well-pleaded cmplaint rule apply when remval is based n a federal questin 1441(a)- general rule if cmplaint is filed in state curt and the case cmplies with federal curt, defendant can remve case t federal curt. 1441(b)- exceptins diversity jurisdictin remval is nt allwed if ne r mre defendants is a member f the state where case is brught diversity must be at the time judgment it entered, rather than at the time the case is remved frm state t federal curt When remval is based n diversity, special rules apply: prevents a defendant sued in her hme state frm remving diversity must exist bth when the case is filed and at the time f remval a diversity case rdinarily cannt be remved mre than ne year after it was field 1441(c)- allws remval f federal claims brught alng with certain separate and independent claims that are nt remvable state law claim that desn t arise ut f the same nucleus f federal claim cannt be remved but if riginal cmplaint has federal law claims and state law claims related the federal claim if the state law claims are nt related t federal claim, federal curt can remand the claims nt related t federal claim back t state curt (a)- ntice f remval takes case frm state curt t federal curt must be within 30 days t file ntice f remval frm the time defendant is served with ntice f cmplaint all defendants must cnsent t remval. 1446(b)(3)- a ntice f remval may be filed within thirty days after receipt by the defendant, thrugh service r therwise, f a cpy f an amended pleading, mtin, rder r ther paper frm which it may first be ascertained that the case is ne which is r has becme remvable 1446(c)- new bad faith clause attached t this sectin diversity based n citizenship 14

15 Civ Pr, Outline, Prfessr Glen Staszewski, Fall 2012 cant remve diversity case if been pending fr mre than a year, UNLESS plaintiff has been acting in bad faith t prevent defendant frm remving the case bad faith example: plaintiff lied abut hw much mney is in cntrversy 1446(d)- defendant have t give written ntice t adverse parties and state curt nce ntice f remval is filed, state curt cant prceed any further unless r until case is remanded mtin t remand if dn t think defendant cmplied with statutes, then filed within 30 days plaintiff files the remand back t state curt if federal curt lacks subject matter jurisdictin, case shuld be remanded t state curt at ANY time OR whenever federal curt figures it ut 1447(d)- t remand a case t a state curt, the rder is unreviewable upn appeal Hyps: Can there be remval? Lewis (KT) & LM (MA) v. C (DE/IL) & WS (KT) N remval because there is nt cmplete diversity. KT v. DE/IL Yes because diversity, but als must be mre than $75,000 The Erie Prblem: What law applies in a diversity case? (diversity can be a tip as t whether its an Erie prblem (where federal curt is ppsing state law) Fr diversity cases- state substantive law and federal prcedural law Rules f Decisins Act (Statute 1652)-(Erie stems frm this Act) The laws f the several states, except where the Cnstitutin r treaties f the United States r Acts f Cngress therwise require r prvide, shall be regarded as rules f decisin in civil actins in the curts f the United States, in cases where they apply. What are the applicable laws f several states? Substantive Psitive Law- written rules adpted by state gvernment (statutes, etc.) des apply in federal curts Rules f Evidence and Prcedure- federal curts dn t apply State Cmmn Law (decisins in state curts)- State v. Tysn says can verrule state cmmn law des nt apply in federal curts Swift v. Tysn (1841)- curt held that decisins f state curt are nt law (curts d nt engage in lawmaking but rather find the law_ and that Rules f Decisin Act applied nly t substantive psitive law) Federal curts therwise free t apply general law, i.e., whatever rules they preferred (ften favring business interests) Erie Railrad said that Swift shuld be verruled, thereby requiring federal curts t apply state cmmn law in diversity cases Erie Railrad (1938)- P was hit by a train while walking alng the tracks f D railrad in PA; he sued the railrad in a federal district curt based n diversity jurisdictin, claiming that the railrad had acted negligently by leaving the dr t ne f the cars pen Federal curts are suppsed t predict hw state law wuld apply and therefre, applying general law (althugh uncnstitutinal t apply general law) Under PA law, P culd recver nly upn shwing f wantn negligence because he wuld be cnsidered a trespasser n the railrad s right-f-way P, hwever, argued that the federal curt shuld apply the general r federal cmmn law rule, which required the railrad t act with rdinary care Overturned earlier hlding in Swift, finding that the reference t laws in Rules f Decisins included nt nly state statute law but als state judicial pinins interpreting the cmmn law What shuld influence which law t apply (PA law r general federal law)? Surces f authrity U.S. Cnstitutin- federal gvernment is ne f the limited and enumerated pwers (federal gvernment can nly d that authrized by Cnstitutin) 15

16 Civ Pr, Outline, Prfessr Glen Staszewski, Fall 2012 There is NO prvisin f Cnstitutin that authrizes federal curts t apply general law in diversity cases Article III Article I- gives cngress certain pwers Statutry/Statute (RDA) Precedent (Swift v. Tysn) Results in: Frum shpping (plaintiff will chse frum that will be mst favrable) Inequitable administratin f the law (n unifrm decisins) Develping a Test AFTER Erie Guaranty Trust (1945)- lwer curt erred by refusing t apply the state statue f limitatins based n a cntrary federal practice Curt held that Erie applied nly t matters f substance, nt prcedural Curt held that the issue (Statute f limitatins) shuld be treated as a substantive rule under Erie Any rule that culd affect the utcme shuld be cnsidered substantive under Erie. Outcme-determinative Test: Federal curts sitting in diversity shuld apply a state law that cnflicts with federal practice when disregarding the state law wuld significantly affect the utcme f the litigatin Prblem with this test: virtually any prcedural matter can change the utcme f a case; therefre, the test wuld require federal curts t apply many state rules that seem clearly prcedural After this case, everything was seen as utcme- determinative test state will always win under this test, which was prblematic because then applying state law ALL the time Byrd (1958)- the federal curt was nt required t fllw a State Supreme Curt decisin hlding that the trial curt, rather than a jury, shuld determine whether the plaintiff was a statutry emplyee wh was cvered by the state wrkers cmpensatin statute. The requirement appeared t be merely a frm and mde f enfrcing the immunity, and nt a rule intended t be bund up with the definitin f the rights and bligatins f the parties, and the imprtance f the federal practice utweighed the likelihd f a different result in state curt Questin: whether disregarding state curt wuld change the utcme? says it might! Balancing Test- curt balances federal practice versus the likelihd f a different utcme in state curt federal curt fllws wn practice Exp.: Differences between state and federal law in determining if persn was a statutry emplyee : State law wuld say the judge decides Federal law wuld say jury decides Issue: Whether a judge r jury decided the case culd affect the utcme? Is this a substantial/prcedural issue? Prcedural- because a judge/jury decisin is a manner r mde f enfrcing legal rights Substantive- because culd affect the utcme f the case if a judge r jury 16

17 Civ Pr, Outline, Prfessr Glen Staszewski, Fall 2012 decides (therefre, wh decides des matter) juries are mre sympathetic t individuals (especially against large crpratins) judge will just interpret statue the way thinks apprpriate Current Relevance- still used t apply t judge-jury questins and is ften invked by the lwer curts n ther issues Hanna (1965)- service f prcess in a diversity case in federal curt is gverned by Rule 4 f the Federal Rules f Civil Pr. Rule 4- gverns service f prcess in federal curt, even in a diversity case Disregarding state law wuld nt facilitate frum shpping wuld just make plaintiff fllw Rule Article III requires lwer federal curts and creating rules f prcedure fr them t fllw Wuld the decisin in Hanna change the utcme in the Guaranty Trust case? Guaranty Trust invlved Statute f Limitatins There was n FRCP that gverned state law in Guaranty Trust If federal curt disregarded Statute f Limitatins, there is a likelihd f a different utcme in Guaranty Trust Under Byrd balancing, still apply the Statute f Limitatins therefre, Guaranty wuld still be gd law If dn t fllw state law: Wuld prevent frum shpping- a practice where Ps chse a legal frum simply because f the prbability f a mre favrable ruling Wuld lead t inequitable administratin f the law Hyp: What if lking at: Pleadings State Law has a very detailed pleading requirement Federal Law requires prviding ntice f pleading Which applies? Federal law applies if yu d the abve applicatin fr the Rules Enabling Act and therefre, Rule 8 can apply (abve applicatin= frum shpping and inequitable admin) Vir dier State law includes detailed questins by lawyers Area f debate: Federal law includes cursry questin by judge If there is a diversity case in federal curt, then des the state r federal rule apply? Vir dire wuld be prcedural, BUT wh is n jury can have influence n utcme (substantive) therefre, it s a gray area Vir dier is nt in FRCP and nt a cdified act it is just hw federal judges cnduct this Whether there is a federal rule f statute gverns situatin, wuld applying it cnflict with state law? 3 appraches: 17

18 Civ Pr, Outline, Prfessr Glen Staszewski, Fall Federal Curt- taking brad view f federal law 2. Hybrid Apprach- (rare) accmmdate cmpeting plicy cncerns between state and federal, and supreme curt made new federal rue t respect plicy f bth 3. Oppsite f #1- (mst cmmn)- Narrw view f federal law narrwly cnstrue federal rule and therefre allw state law t apply Test t determine what law (state r federal) applies: 1. Substantial rules f state law apply under Erie. If hwever, state law rule r practice is ratinally capable f classificatin as either substantive r prcedural then THEN 2. Des Fed. Rules f Civil Prcedure (FRCP) r federal statute gvern the situatin and cnflict with state curt? (A) If s, is FRCP permissible under the Rules Enabling Act (REA)? i.e. have t be rules f practice and prcedure and can t mdify substantive rules (B) If s, is FRCP r federal statute cnstitutinal? (C) If s, federal rule applies under Hanna. IF #2 IS YES, Federal Rule Applies! IF #2 IS NO, need t determine whether federal r state shuld apply Guaranty Trust- utcme determinative test? Hanna says that anything can be utcme determinative and yu actually need t lk at Erie 3. If answer t (2) is n (if they d nt cnflict) curt shuld: (A) Balance the imprtance f a cnflicting federal practice against the likelihd f a different utcme in state curt under Byrd Balancing Test (B) Examine, under Hanna, whether disregarding the state law wuld: (use twin gals f Erie) (i) Encurage unseemly frum shpping, r ii) Lead t inequitable administratin f the laws ***Erie test and Byrd test are still gd law ***Curts have flexibility with hw t analyze! judges may pick which test t use that they think will be better OR judges may apply bth 18

19 HOW TO ANALYZE SUBJECT MATTER JURISDICTION: Start with Civ Pr, these Outline, questins: Prfessr Glen Staszewski, Fall IS THE CLAIM A FEDERAL QUESTION? ( ARISE UNDER FEDERAL LAW?) a. If yes, federal curt has subject matter jurisdictin 2. IS THERE COMPLETE DIVERSITY OF CITIZENSHIP? a. If yes, federal curt has subject matter jurisdictin i. Crpratin: nerve center Hertz ii. Peple: dmicile 3. IS THERE SUPPLEMENTAL JURISDICTION? (FEDERAL AND STATE CLAIM) a. If yes, federal curt has subject matter jurisdictin i. Primary claim arises under federal law ii. Besides federal claim, plaintiff als claims a state claim (exp. breach f cntract with is state law) and the state claim is tact n then by supplemental jurisdictin can exercise authrity ver the claim 4. CAN THERE BE REMOVAL TO FEDERAL COURT? (CASE COULD HAVE ORIGINALLY BEEN FILED IN FEDERAL COURT) a. If yes, federal curt has subject matter jurisdictin i. Federal curt t which the case is remved must have 1. Diversity, 2. federal questin, AND/OR 3. Supplemental jurisdictin T supprt arguments fr PL r DF fr FEDERAL QUESTION: Arise Under Federal Law? 28 USC 1331 Fed l questins requires that the claim arise under federal law Must be a substantial federal claim Is the Federal Element Necessary? Luisville Well-pleaded Cmplaint Rule- a suit arises under the Cnstitutin and laws f the U.S. fr purpses f 1331 nly when the plaintiff s well-pleaded cmplaint is based upn federal law (asks whether the federal element is necessary t plaintiff s case) Luisville (1908)- There was n federal smj because issues f federal law were used as a defense; the actual claim was fr breach f cntract under state law Is the Federal Element used as a Defense? Luisville Can t use the federal claim as defense T supprt arguments fr PL r DF fr DIVERSITY: Are the parties NOT citizens f different states? Redner, 1332 (a)(2) Lack f smj because nt frm different states Where are the peple dmiciled? Hawkins Established by physical presence in a place in cnnectin with a certain state f mind cncerning ne s intent t remain there. Where is the crpratin dmiciled? Hertz A crpratin shall be deemed t be a citizen f any state by which it has been incrprated and f the state where it has its principal place f business Nerve Center Test - where the crpratins high level fficers direct, cntrl, and crdinate the crpratins activities T supprt arguments fr PL r DF fr SUPPLEMENTAL jurisdictin: D the tw claims (federal and state) arise frm a cmmn nucleus f perative facts? In re Ameriquest Are the tw claims (federal and state) sufficiently related? Article 3 Des the state claim substantially predminate ver the federal claim? Szendrye-Rams State law claims that are predminate ver federal claim If there are nvel and cmplex issues f state law D the claims frm part f the same case r cntrversy? Article 3 T supprt arguments fr PL r DF fr REMOVAL: Are the federal jurisdictinal requirements met at the time judgment is entered? Caterpillar Did the party file ntice f remval within 30 days frm the time defendant is served with ntice f cmplaint? 1446(a) Did the party try t remve a diversity case after it was pending fr mre than a year? 1446 (c) Bad faith clause UNLESS plaintiff has been acting in bad faith t prevent defendant frm remving the case If federal curt lacks subject matter jurisdictin, when can the case be remanded? 1447 If federal curt lacks subject matter jurisdictin, case shuld be remanded t state curt at ANY time OR whenever federal curt figures it ut 19