Result: SCOTUS reverses PD award. Reprehensibility (most important factor)

Transcription

1 1 Civil Prcedure Outline Res judicata, claim preclusin: prhibits claim splitting because a claim is barred by res judicata if it arises ut f the same nucleus f perative facts as the prir claim. (see, e.g., Lane v. Petersn, 1990) I. PUNITIVE DAMAGES FRCP Rule 1: The Rules shall be cnstrued and administered t secure the just, speedy, and inexpensive determinatin f every actin and prceeding. A. Purpse f punitive damages i. Trt law- deterrence f wrngful cnduct; punish particularly egregius behavir (grss negligence r wantn miscnduct). ii. Gal f PD is NOT t cmpensate P, wh will receive cmpensatry damages B. Due Prcess i. Main defense that Ds invke when fighting against PD, n State shall deprive any persn f life, liberty, r prperty, withut due prcess f law (14th Amendment). C. Jury discretin in awarding punitive damages des nt vilate the prcedural due prcess rights f Ds as lng as the jury s discretin is exercised within reasnable cnstraints (see, e.g., Pacific Mutual v. Haslip, agent f insurance c. was fund t have cmmitted fraud against cmpany s client, jury awarded PDs within reasnable cnstraints [review by trial cts and appellate cts]). Result: SCOTUS allwed PD award t stand. Analysis: 1. Cmmn law methd fr assessing PD is cnstitutinal per se. 2. It is nt pssible t draw clear lines btwn un/cnstitutinal awards, must rely n jury s reasnableness and adequate guidance frm ct. 3. PD d nt vilate DPC f 14 th A; jury instructins and trial/appellate reviews allwed jury s discretin t be exercised within reasnable cnstraints. O Cnnr dissent: jury instructins vague, give n criteria n which t use discretin, judicial review inadequate. D. Awarding PD fr ptential fr harm, even when harm that has actually ccurred is relatively small: Is there a reasnable relatinship between punitive damages and the harm likely t result frm D s cnduct (see, e.g. TXO v. Alliance Crp., slander case invlving effrt t swindle P ut f substantial sums, gave $19k CD, $10M PD). SCOTUS allwed PD award t stand since CD were s lw, and the D's scheme wuld have stlen substantial sums f mney frm lts f peple if it had wrked. E. Denying judicial review f PD awards is a vilatin f the DP rights f D (see, e.g., Hnda Mtr v. Oberg, OR statute nly allwing judges t rder new trial in case f fundamental errr; culd nt reduce PD award). SCOTUS reverses PD award. Histrical English system had judicial review as imprtant part f prcess F. Excessive awards f PDs are characterized by: degree f reprehensibility, rati, and sanctins fr cmparable miscnduct (see, e.g., BMW f Nrth America v. Gre, BMW s cnduct was nt reprehensible enugh, the rati was excessive, and the sanctins fr cmparable miscnduct were much lwer than the PD amunt, therefre PD award was vilatin f BMW s DP rights). Result: SCOTUS reverses PD award. Reprehensibility (mst imprtant factr) Rati Sme wrngs are mre blamewrthy than thers: nnvilent less than vilent, negligence less than trickery/deceit, first time ffenders less than recidivists high degree f culpability that warrants a substantial punitive damages award. Rati f PD award t actual harm inflicted n P: reasnable relatinship Higher ratin may be justified if cmpensatry damages are lw egregius act has small ecnmic cnsequences, etc. Suspicius judicial eyebrw. Sanctins fr cmparable miscnduct Cmpare PD award and civil/criminal penalties that culd be impsed

2 2 G. Cnduct in ther jurisdictins may be prbative when it demnstrates the deliberateness and culpability f D s actin in the state where it is trtuus, but that cnduct must have a nexus t the specific harm suffered by P, PD awards fllwing a single digit ratin will, in general, satisfy DP (see, e.g., State Farm Mutual v. Campbell, due prcess desn t allw judgment f merits f 3 rd parties hypthetical claims under reprehensibility analysis because it creates pssibility that multiple PD awards will be granted; majr reinterpretatin f BMW v. Gre). Result: SCOTUS reverses PD award. H. The use f a PD award t punish a D fr injury that it inflicts upn nnparties vilates DPC f Cnstitutin; State curts can t authrize prcedures that create an unreasnable/unnecessary risk f cnfusin happening in a jury when tasked with separating reprehensibility f D frm punishing D fr harm dne t thers (see, e.g. Philip Mrris USA v. Mayla Williams, harm dne t nnparties can be taken int cnsideratin in evaluating reprehensibility, but cannt punish with PD awards n this basis. Must ensure that jury will ask crrect questin.) Result: SCOTUS vacates PD and remands. II. SUBJECT MATTER JURISDICTION A. Diversity f citizenship jurisdictin Art. III, s.2 f Cnstitutin: creates fed jurisdictin ver diversity cases Cngress limits grant f diversity jurisdictin; minimum amunt in cntrversy: $75,000 i. State citizenship f individuals: dmicile test Test fr dmicile fr a persn: citizenship at time f filing suit with intent t remain indefinitely cts. have accepted diversity as lng as parties are diverse at time f filing, even if they were nt at time f events in questin r later in litigatin (see, e.g., Grdn v. Steele, yung wman was given wrngful diagnsis in PA, she is ging t schl in ID, curt fund that diversity jurisdictin was present).** ** NB: Mas v. Perry, a wman desn t have her dmicile changed by virtue f marrying an alien;** St. Paul Mercury Indemnity v. Red Cab Crp., requisite jurisdictinal amunt is satisfied if the amunt claimed by P in gd faith is mre than minimum amunt in cntrversy inability f P t recver $75k r mre des nt demnstrate bad faith. A persn des nt lse her ld dmicile until he acquires a new ne ii. Cmplete diversity rule Diversity statute (s.1332) has been interpreted t require cmplete diversity between all Ps and all D. N P can be a citizen f the same state as any D (see, e.g., Strawbridge v. Curtiss). NB: Dmestic relatins exceptin t DJ s.1332 has been read t exclude matters f family/prbate curt (nt universal rule, sme exceptins invlving trusts). iii. State citizenship f crpratins and ther entities Cngress cdified test f PPB in 1958: crpratins had dual citizenship bth in the state f incrpratin and in the state f PPB. A crp s principle place f business determines citizenship: referring t the place where a crpratin s fficers direct, cntrl, and crdinate the crpratin s activities in practice it shuld nrmally be the place where the crpratin maintains its HQ prvided that HQ is the actual center f directin, cntrl, and crdinatin (see, e.g., Hertz Crp v. Friend, 2010, Hertz fund t be a citizen f NJ because its HQ was there, despite majrity f ** **Mas v. Perry and Grdn v. Steele are fairly incnsistent, cases f judges filling in the blanks with what they need t achieve the right utcme

3 3 business being in CA, and therefre diversity jurisdictin existed fr the tw parties bc P was citizen f CA). NB: befre this case, there was NO unifrm test fr PPB amng the CA system. Test mainly chsen fr unifrmity and simplicity. Labr unins: treated as grup f individual litigants, nt as crp.; each member s citizenship is cnsidered in determining whether there is diversity. Partnerships: treated as grup f individual litigants, nt as crp. each member s citizenship is cnsidered in whether there is DJ. NB: if a law firm (partnership) sues a unin (unincrprated assciatin) there is diversity nly if each firm is frm a different state as any member f unin. iv. Amunt in cntrversy requirement Amunt in cntrversy requirement is $75k, used t be $10k (set by Cngress). P s claim fr mre than required amunt will generally be accepted, if it appears t be made in gd faith, unless it appears t a legal certainty that the claim is really less fr the jurisdictinal amunt (see, e.g. St. Paul Mercury Indemnity C. v. Red Cab C., 1938, set this precedent, affirmed in Diefenthal). Judge decides (using St. Paul standard) whether the evidence f P s injuries culd pssibly supprt a jury verdict ver the required amunt. Claims fr damages must be supprted by legal and factual bases in rder t satisfy diversity jurisdictin (see, e.g., Diefenthal v. CAB, 1982, P s ridiculus claims f extreme humiliatin and emtinal distress were unfunded n legal and factual bases, althugh they claimed that their damages claim was made in gd faith the curt fund that unsupprted allegatins wn t satisfy diversity jurisdictin requirement.) v. Aggregating claims t meet amunt requirement Single P may aggregate separate claims she has against a single D t meet amunt in cntrversy requirement, even if claims are unrelated. C-Ps can t add claims tgether t reach amunt requirement, and amunts claimed frm different Ds can t be added tgether. NB: 28 USC s. 1367: supplemental jurisdictin statute, if P1 s claim meets the amunt requirement but P2 s claim des nt, P2 may aggregate with P1 (Exxn Mbil Crp. v. Allapattah Servs. Inc, 2005). vi. Cnstitutinal scpe f diversity jurisdictin cmpared t the statutry grant f diversity Cnstitutinal scpe under Art. III, s. 2 much greater than under 28 USC 1332; e.g., amunt in cntrversy requirement, interpretatin under Strawbridge t have cmplete diversity requirement. NB: Class Actin Fairness Act- allws natinwide class actins t be brught in fed ct r remved t fed ct if any member f the P class is diverse frm any D, and if amunt in cntrversy (fr entire class) exceeds $5 millin. 28 USC s.1332(d)(2)(a). B. Federal questin jurisdictin cncurrent jurisdictin w/state curts (except admiralty, antitrust, patents, and securities). 28 USC s grants jurisdictin t fed district ct ver all cases arising under the cnstitutin, laws r treaties f the US. NB: amunt in cntrversy limit des NOT apply t FQJ i. Cnstitutinal scpe f FQJ Cnstitutinal grant fr arising-under jurisdictin is brad, but statutry grant has been interpreted much mre narrwly. Osbrn v. Bank f the US- Chief Justice Marshall gave expansive interpretatin f scpe f FQJ under Art. III s. 2: as lng as the riginal cause (basic suit) invlves a questin f federal law, the case arises under federal law. Ingredient test. Ex: A sues B fr libel (state law claim) but B invkes defense f 1 st amendment right t free speechfederal questin jurisdictin.

4 4 ii. Statutry scpe f FQJ: well-pleaded cmplaint rule Cngress has given FQJ t fed district cts in 28 USC s authrizes jurisdictin ver cases arising under federal law Curts have interpreted this grant much mre narrwly. Well pleaded cmplaint rule: A suit arises under the Cnstitutin and laws f the US nly when the P s riginal cause f actin shws that it is based upn thse laws r that cnstitutin nt enugh that P anticipates D s answer t riginal cmplaint is invalidated by sme prvisin f cnstitutin (see, e.g., Luisville & Nashville RR C v. Mttley, 1908, P s cause f actin was really BC, they anticipated that D s defense fr nt issuing them their lifetime RR passes was due t a federal statute, but this was insufficient). Well-pleaded cmplaint rule serves administrative cnvenience mre than intellectual elegance; serves as rugh srting mechanism fr cases. NB: furthers sensible judicial administratin; n having t wait fr D s answer. Declaratry judgments: still have t ask whether case wuld arise under fed law if brught by party wh wuld rdinarily be P, s this still wuldn t wrk fr the Mttleys. iii. Applying Mttley: Justice Hlmes creatin test A suit arises under the law that creates the cause f actin. (Hlmes Creatin Test, American Well Wrks v. Layne, 1916, P sued D because D said that P had infringed its patent yu re saying bad things abut my patent althugh patents slely under fed law, claim was a trt (slander), therefre SCOTUS held NO FQJ). NB: In Mttley the law that created P s riginal cause f actin was K law therefre arising under K law state law, des nt satisfy Hlmes test. NB: SCOTUS has als held that FQJ may nt be based n a cunterclaim (it s part f D s answer, nt P s riginal claim) (Hlmes Grup Inc. v. Vrnad Air Circulatins Systems). Exceptin t Hlmes test: Shshne Mining C. v. Rutter, 1900, suit t settle mining claim; fed statute authrized parties t bring suits, but prvided they shuld be decided under lcal mining custms and statutes fed law prvided gverning standard, but n right t sue because gverning substantive standard fr deciding the claims was state law. SCOTUS held that this case didn t arise under fed law because gverning substantive rules were state/lcal Als makes gd sense, mechanically applying Hlmes test wuld bring these int fed ct w/ any gd reasn. iv. Beynd the Hlmes test: state law claims invlving substantial questins f federal law Whether federal curts can exercise FQJ in a case with state law claims in which ptentially imprtant federal issues are embedded in thse claims. Where it appears that relief requested depends n the cnstructin r applicatin f the Cnstitutin r laws f the US, there smetimes can be fed jurisdictin (see, e.g., Smith v. Kansas City Title & Trust, 1921, P culd nly win be establishing that federal act authrizing issuance f bnds was uncnstitutinal, therefre culd nly win by establishing this prpsitin f fed law; SCOTUS held that FQJ was present). SCOTUS has held that a case that asserts a state law claim may satisfy s if the curt will have t reslve a substantial issue f federal law in rder t decide state claim (Franchise Tax Bard f CA v. Cnstructin Labrers Vacatin Trust, 1983). There is n FQJ when the federal statute des nt create a private right f actin (see, e.g., Merrell Dw Pharmaceuticals v. Thmpsn, 1986, P sued D

5 5 fr negligent marketing and alleged that D was negligent in failing t cmply with Federal Fd, Drug, and Csmetic Act standards in labeling prduct; because FDCA did nt create private right t sue SCOTUS fund n FQJ allwing P t get int fed ct wuld allw fed. suits fr many fed. regulatins, even thugh Cngress had declined t create right t sue fr vilating them). SCOTUS saying t Cngress, if yu want peple t be able t sue under a statute, put it explicitly in yur statute mving away frm implied cause f actin). Much brader implicatins frm this precedent than frm Grable here it s Fd and Drug regulatin as ppsed t activity by IRS. Fed Ct. says there s federal issue embedded, but nt enugh; desn t want t create a batlad f new litigatin. T examine whether r nt state law claims arise under FQJ, the fllwing factrs must be cnsidered:1) Is the federal issue clearly raised? 2) Is it clearly cntested? 3) Is it substantial? 4) Is the issue ne that reasnably belngs in federal curt (impact n state curt/federal curt allcatin)? (see, e.g., Grable & Sns Metal Prducts, Inc. v. Darue Engineering and Manufacturing, 2005, P sues under state law but t prve its substantive right, must establish a pint f federal law). NB: SCOTUS recnciles Grable utcme with Merrell Dw utcme in Merrell Dw the federal issue wasn t the key issue ut f the 6 cunts, but in Grable it was, it was the ONLY issue; Merrell Dw was trt case and wuld have pened the dr fr tns f new trt cases; in Grable the prcedure f gv t is n trial (federal tax cde) and therefre the gv t had interest in defending it. Clearly a state law claim, arguing that gv t didn t take it in the right way. Federal issue was part f the state law claim. Cnstitutinally that is enugh. But SCOTUS has been mre restrictive Grable is exceptin, is unusual case. Nt ging t cme up very ften; invlves the IRS. Clean issue, imprtant because IRS is invlved this is ging t be extremely restricted in terms f its applicability t ther cases. VERY DIFFERENT DYNAMIC FROM MERRELL DOW. Very fcused, federal issue is the nly and main issue here, as ppsed t being 1 ut f 6 cunts in Merrell. v. Article III and SCOTUS jurisdictin: Mttley, Rund II Art. III s. 2 f Cnstitutin plus cngressinal authrizatin fr SCOTUS t review state judgments when validity f treaty r statute f US is drawn in questin n the grund f its being repugnant t the Cnstitutin, treaties r laws f the US. Art. III allws FQJ fr cases as lng as they invlve a fed. issue, whether issue is raised by P r by D. NB: final hlding in Mttley Ct. cncluded that the statute was intended t bar passes granted befre its enactment and that the statute was cnstitutinal. Mttleys lst. C. Remval f cases t federal curt i. Standard fr remval NB: statutry creatin nly, NO CONSTITUTIONAL REQUIREMENT that remval prcess exist If remved imprperly, fed ct remands case back t state ct. 28 USC s. 1441(a)- basic remval prvisin; D shuld nly be entitled t remve a case if the case (as pleaded by P) culd have been filed in fed ct initially. Ratinale: D shuld have same ptin as P t chse a fed ct t hear a case that is within federal SMJ result is that if either party wants a

6 6 case within fed jurisdictin t be heard in fed ct., the case will be heard there. Mttley s well pleaded cmplaint rule and Strawbridge s cmplete diversity rule still apply. Remval and Diversity: 28 USC s.1441(b), remval in diversity cases pssible nly if nne f Ds is a citizen f the State in which the actin is brught; this rule des NOT apply t FQJ (s resident D can remve FQJ case) Jurisdictin upn remval turns n riginal federal jurisdictin, which turns n whether P sught relief under federal law (see, e.g., Avitts v. Amc, 1995, Ps didn t have federal cause f actin at all, just state cause f actin with vague reference t fed. law, SCOTUS vacates judgment fr P and remands back t state ct frm where it was remved). ii. Prcedure fr remval and remand NB: Ps can prevent D frm remving case by structuring suit t d s nt unethical and is cnsidered an acceptable tactical chice REMOVAL: Wh, when, where and hw f remval: Wh may remve? Only D If multiple Ds, SCOTUS says all Ds must agree t remve, if any refuse it remains in state ct. (Chicag, Rck Island & Pacific Railway C. v. Martin, 1900). When must case be remved? 28 USC s. 1446(b): must remve t fed ct within 30 days f receiving initial pleading/being served w/ prcess in the actin; after 30 days yu waive right t remve Remval later in the case Smetimes case may be remved after 30 days; s.1446(b) para 2 gives D 30 days t remve after receiving amended pleading that cntains fed claim where previusly nne existed. Applies t FQJ and DJ cases Where is case remved t? 28 USC s. 1441(a): must remve it t the district ct f the US fr the district and divisin embracing the place where such actin is pending aka depends n where riginal cmplaint was filed. Prcess f remval 28 USC s. 1446(a): D files ntice f remval in fed ct and ntifies P and state ct she has dne s. Specify grund n which case is remvable, include cpy f state ct cmplaint and summns Filing ntice autmatically transfers case t fed ct, regardless f if it s prperly within its jurisdictin filing ntice triggers state ct. s lss f pwer in prceeding with case while it s pending in fed ct. REMAND: P takes n part in remval and may nt knw abut it until ntice f remval has been filed; if P thinks case is nt remvable/d didn t use prper prcedure, she shuld mve in fed ct. t remand actin t state ct. III. PERSONAL JURISDICTION A. Evlutin f persnal jurisdictin- histrical rigins i. Early histry Persnal jurisdictin- a curt must have the authrity t require D t appear in frum and defend actin there Cnstitutin impses imprtant restrictins n a curt s authrity ver Ds 14 th A prvides that a state may nt deprive a persn f prperty withut due prcess f law. Pennyer: Early case in which SCOTUS tried t define apprpriate limits f curts t exercise persnal jurisdictin ver ut f state defendants.

7 7 A curt may enter a judgment against a nn-resident nly if the party 1) is persnally served with prcess while within the state, r 2) has prperty within the state, and that prperty is attached befre litigatin begins t establish in rem jurisdictin (see, e.g. Pennyer v. Neff, a state curt cannt exercise persnal jurisdictin ver a nn-resident unless he vluntarily submits t that jurisdictin; because state ct never acquired jurisdictin ver Neff r his prperty, riginal judgment which tk his prperty (Mitchell v. Neff) and subsequent sheriff s sale f land were invalid). Histrical cntext: New 14 th A allws fr questining validity f prceedings in regards t whether r nt DP rights are vilated by curt s assertin f jurisdictin. Cmmandments f Pennyer: 1. States have pwer ver their peple 2. States have pwer ver their prperty 3. All assertins f jurisdictinal pwer must be cnsistent with 1 and 2 PROBLEM: Pennyer framewrk underinclusive and inadequate t prtect rights f citizens in suing nncitizens. Mitigating principles (NB: 2 & 3 became especially manipulated): 1. Quasi-in-rem jurisdictin ( quasi bc prperty might nt have anything t d with lawsuit, nly using prperty bc persn isn t available) t permit assertin f claims against nn residents by grabbing prperty 2. Physical presence if in kingdm, grab them! 3. Cnsent can be express r implied 4. Status relatinship such as marriage Harris v. Balk: Balk (NC) wed Epstein (MD) $, Harris (NC) wed Balk $, Harris went t MD n a trip; Epstein sued Balk by seizing Harris; Harris paid Epstein what he wed Balk, SCOTUS said this was k! ii. Scial change and dctrinal rigidity: prblems with Pennyer dctrine Curts came t realize that Pennyer s rules were nt gd fr an ecnmy increasingly cnducted acrss state lines. Advent f the car and mdern nature f business made cts less cmfrtable w/ Pennyer framewrk Hess v. Pawlski, 1927 Hess, PA citizen drve int MA and injured Pawlski, MA citizen. After Hess returned t PA, Pawlski sued Hess in MA state curt, asserting persnal jurisdictin under MA statute (perating mtr vehicle in MA cnstitutes assent f nn resident, which cnstitutes the appintment f the registrar t be nnresident s lawful attrney attrney may be served in lieu f nnresident with same legal frce as if nnresident had been served persnally). SCOTUS upheld assertin f PJ ver Hess. Twisting idea f cnsent t reach desired utcme; driver didn t have real cnsent: didn t knw, never had pprtunity t knw. Curt essentially expanded Pennyer s in-state dctrine t reach an acceptable result fr the autmbile age, and Curt admitted as much in a later decisin. B. The mdern framewrk i. Mdern era begins- Legal realist view f law; increasingly skeptical that the law has bdy f natural principles; began t believe that law has t be interpreted/develped in light f ther cnsideratins (public plicy) parallel with Erie T establish in persnam jurisdictin, if D is nt within territry f frum, he must have certain minimum cntacts with it such that the maintenance f the suit des nt ffend traditinal ntins f fair play and substantial justice (see, e.g., Internatinal She C. v. Washingtn, 1945, Int l She was subject t prceedings in WA because f their sufficient cntacts in WA s jurisdictin. WA can enfrce their state prcedure f cllecting unemplyment funds frm emplyers, which is nt in cnflict w/ DPC f 14 th A).

8 8 Specific in persnam jurisdictin- creates in persnam jurisdictin if the claim arises ut f D s deliberate cntact w/ the state General in persnam jurisdictin-creates in persnam jurisdictin as lng as D (typically crprate) has cntinuus and systematic cntacts w/ state. NB: quid pr qu in new analysis- privileges f wrking there pens crp up t liability (allw ptential Ds t predict/limit expsure t liability); recnceptualized PJ as related t fairness/reasnableness Ntable qutables: Make it reasnable, in the cntext f ur federal system, t require the crpratin t defend (p. 165) Whether due prcess is satisfied must depend rather upn the quality and nature f the activity in relatin t the fair and rderly administratin f the law which it was the purpse f DP clause t insure. Inquiry is NOT mechanical r quantitative (p.166) Int l She received the benefits and prtectin f the laws f the state. (166) In sme respects Internatinal She verrules Pennyer Internatinal She: ct can exercise PJ ver a D even if he wasn t served within the state, was nt dmiciled r present in the state, and did nt therwise cnsent t be sued in the state minimum cntacts is new basis. Pennyer: territrial authrity f ct is still imprtant; persnal service n an individual D while the D is within the state still supprts PJ in mst cases NB: State ct can nly exercise PJ if it has the cnstitutinal authrity AND relevant statute (usually a lng arm statute) that authrizes it. Lng arm statute specify cntacts with state that allw cts t assert jurisdictin ver D. Cllateral challenge t PJ Ds can raise PJ in cllateral hearing; must first fail t appear in ct where P filed riginal suit. This eventually results in default judgment entered against D by that ct. D appears in enfrcing ct (state f D s assets) and argues that riginal ct s judgment is invalid fr lack f PJ and shuldn t be enfrced. VERY RISKY- D waives any pprtunity t cntest P s claims n merits, if cllateral challenge fails the enfrcing ct can rder D s assets t be sld. Only makes sense if D has n/very weak defense against P s claims n the merits, amunt at issue is small relative t csts f trial, r argument against PJ is strng. C. Cntemprary prblems and the cncept f specific jurisdictin i. Refining the test fr specific jurisdictin defining minimum cntacts D s deliberate in state cntact is nt the nly factr t cnsider in assessing PJ: must als cnsider factrs specific t P and D in their individual circumstances (see, e.g., McGee v. Internatinal Life Insurance Cmpany, 1957, CA citizen sues TX insurance cmpany t make them pay life insurance claim, SCOTUS finds minimum cntact established bc D entered int K knwingly w/ CA citizen, CA has manifest interest in prviding effective means f redress fr citizens n hard and fast test cming frm this pinin). NB: Significance f case cmes frm verall take n where law was heading: Expanding scpe f state PJ, transfrmatin f nat l ecnmy, less burdensme given mdern transprtatin and cmmunicatin. SCOTUS mst liberal apprach t PJ.

9 9 It is essential in each case that there be sme act by which the D purpsefully availed itself f the privilege f cnducting activities within the frum State, thus invking the benefits and prtectins f its laws (see, e.g. Hansn v. Denckla, 1958, D s trust executr based in DE but D mved t FL and signed new will there, SCOTUS fund n persnal jurisdictin bc there were n deliberate acts by D cnnecting her t FL). UNILATERAL ACTS f smene else dn t establish a minimum cntact that hks yu. Clarifies scpe f McGee, Hansn made clear that an verall cnsideratin f frum s cnnectin t dispute is nt a substitute fr existence f MCs. Defendant MUST have initiated a cntact in the frum state. Specific jurisdictin is cnstitutinal nly when 1. The defendant has had cntacts with the frum state, 2. The plaintiff s claim arse ut f thse cntacts, and 3. Persnal jurisdictin is reasnable based n a cnsideratin f additinal factrs: burden n D, frum state s interest in adjudicating dispute, P s interest in getting cnvenient frum, mst efficient reslutin f disputes, shared interest f states in furthering fundamental substantive scial plicies (Federalism cncerns) (see, e.g., Wrld-Wide Vlkswagn v. Wdsn, 1980, state curt culd nt exercise SPJ ver nnresident retailer and its whlesale distributr when Ds nly cnnectin t state is that ne f their prducts sld in NY t NY residents was invlved in an accident in OK, because allwing SPJ wuld vilate DPC f 14 th A). P argued freseeability f mbility f car, SCOTUS rejects this, says it s nt enugh: every seller f chattels wuld in effect appint the chattel his agent fr service f prcess. Take away: SPJ can t be established by unilateral activities f smene else, D must have made chice t serve market in OK (affirms Hansn v. Denckla). Nteable quteable: this dctrine acts t ensure that the States thrugh their curts d nt reach ut beynd the limits impsed n them by their status as cequal svereigns in a federal system. (p.186). Brennan s dissent: cites Ohi v. Wyandtte Chemical Crp, crp having n direct cntact with Ohi culd cnstitutinally be brught t trial in Ohi bc they dumped pllutants int streams utside f Ohi s limits, water carried these t Lake Erie and affected Ohi n crprate acts, just cnsequences. ii. Pst Wrldwide Vlkswagn cases Keetn v. Hustler Magazine, Inc. (1984)- Curt decided Keetn culd sue fr natinwide damages in NH if libel P culdn t sue fr all damages in ne state, there wuld be a serius ptential fr draining judicial resurces. Als prtects defendants frm harassment arising frm multiple suits. Selling thusands f magazines mnthly in NH was sufficient t establish PJ fr Hustler. Calder v. Jnes (1984)- writer and editr wrte libelus article in FL abut CA resident. Published by Natinal Enquirer, including in CA. Jnes sued the Natinal Enquirer, writer and editr in CA. Natinal Enquirer cnceded PJ in CA but the writer and editr cntested it. Curt held that CA s exercise f PJ ver reprter and editr was cnstitutinal. CA is the fcal pint f bth the stry and f the harm suffered. Jurisdictin ver petitiners is therefre prper in CA based n the effects f their Flrida cnduct in CA. Ds knwingly caused injury in CA, wuld nt be fair t make P g t FL t seek relief. Their status as emplyees des nt insulate them frm jurisdictin. NB: Ct rejected any 1 st A cnsideratins; wuld needlessly cmplicate an already imprecise inquiry.

10 10 iii. Cntracts as cntacts: Burger King v. Rudzewicz PJ test: 1) must have meaningful cnnectin between Ds and frum state, D must have purpsefully availed itself f frum state; 2) litigatin results frm injuries that arise ut f r are related t the activities in the state; 3) lk verall t fair play and substantial justice based upn several factrs (see, e.g. Burger King v. Rudzewicz, 1985, FL ct had PJ ver MI franchisee, while existence f K is insufficient t establish cntact per se. D had 20 year cntractual relatinship, deliberate affiliatin w/ FL and reasnable freseeability f litigatin there b/c f terms in his K and FL s lng arm statute) Factrs that weigh n fair play and substantial justice: burden n D P s interest in cnvenient frum Frum s interest in adjudicating dispute Interstate justice system s interest in btaining efficient reslutins Shared interest f the several states in furthering substantive scial plicies. D received fair ntice frm cntract dcuments and curse f dealing that he might be subject t suit in FL, failed t demnstrate hw jurisdictin in that frum wuld be fundamentally unfair. Key cncept: purpseful availment: whether D can reasnably anticipate being haled int curt. iv. PJ and federal curts In mst cases, a fed ct can exercise PJ ver a D nly if the curts f the state in which the fed ct sits culd d s under state s lng arm statute and the DPC f the 14 th A fed cts have t analyze PJ the same way that state curts d. D. The stream f cmmerce prblem i. Cmpnent part manufacturer is subject t PJ in a state where its cmpnent is ultimately sld, even thugh cmpnent part manufacturer did nt sell the cmpnent directly int that state (see, e.g., Gray v. American Radiatr and Standard Sanitary Crp., 1961, wman wh was injured by water heater using a defective cmpnent part manufactured by D was able t sue D in her hme state). Mst liberal interpretatin f SC ii. Stream f cmmerce by itself is insufficient t establish purpseful cntacts with the frum state need SC PLUS (advertising in frum state, prduct supprt in frum state, etc.)(see, e.g., Asahi Metal v. Superir Curt, 1987, CA ct did nt have PJ ver Japanese cmpnent part manufacturer because there was n purpseful availment f the frum state s market, must shw that D must have directed sme activity t frum state beynd its cmpnent part being used in the prduct that was sld there). Other factrs weighed against PJ ver D: P had settled, D was frm freign cuntry, n real interest f state remaining, cuntervailing internatinal interest in nt impsing US jurisdictin. First case shwn t be an unreasnable exercise f PJ: unreasnable b/c f ttality f its circumstances iii. 1) PJ requires a frum-by-frum analysis: need t demnstrate D s actins directed at the ecnmy existing within the jurisdictin f a given svereign; 2) because the US is a distinct svereign, D may be subject t jurisdictin f the curts f the US but nt f any particular state (see, e.g., J. McIntyre Machinery, Ltd., v. Nicastr, 2011, D (manufacturer f shearing machine) was nt subject t PJ in NJ (where P filed suit) because D had nt purpsefully availed itself f ding business in NJ, nr did it place gds in the SC in the expectatin that they wuld be purchased in NJ) split decisin, replaces Asahi

11 11 Plurality states that SC is a metaphr, nt a test, and analysis needs t cnsider whether D had purpseful cntacts directed at r w/ frum state, nt US in general, as a whle t establish PJ. Strng plicy reasns are insufficient NB: replaces Asahi E. The arises ut f cncept i. Determining when a claim arises ut f a cntact SCOTUS nt clear n issue, lwer curts develp different appraches Evidence test- claim arises ut f D s in state cntacts nly if D s frum cntact prvides evidence f ne r mre elements f the underlying claim. But fr test- claim arises ut f cntact if claim wuld nt have arisen but fr D s cntact with the state NB: But fr test is mre expansive in regards t jurisdictin than evidence test. Use mre flexible standard, decide whether claim is sufficiently related t cntact may capture what cts actually d, esp thse wh haven t chsen btwn evidence and but fr tests ii. Fcus n claims, nt cases In general, ct cannt establish PJ ver all claims in a case that stem frm a single claim arising ut f D s cntact with frum; nrmally yu have t establish that each claim arises ut f D s cntacts. iii. Effects test and the internet Restatement (2d) f Cnflicts f Law: A state has pwer t exercise judicial jurisdictin ver an individual wh causes effects in the state by an act dne elsewhere with respect t any cause f actin arising frm these effects (unless the nature f the effects and the individual s relatinship wuld make exercise f jurisdictin unreasnable. Must have causal relatinship: purpseful actineffect in state; activities must be targeted. Plus unreasnable standard NB: Effects test DOES NOT EQUAL freseeability! A curt within a state can assert persnal jurisdictin ver the authr and editr f a natinal magazine which published an allegedly libelus article abut a resident f that state, and where the magazine had wide circulatin in that state (see, e.g., Calder v. Jnes, 1984, cmbinatin f libelus article and Natinal Enquirer s large circulatin in CA wuld harm career f P in CA (her hme state) and were enugh t establish D s minimum cntacts with the state). NB: SCOTUS said Ds culd use 1 st A argument against claim itself, but nt against PJ f curt t hear the claim. A curt within a state can assert PJ ver a magazine when party injured by libelus assertin is nt a resident f the frum state (see, e.g., Keetn v. Hustler Magazine, 1984, D s relatively small (10k-15k/year) sales f magazine in NH were enugh t establish minimum cntacts there, s that NH culd assert PJ ver D withut vilating DPC). Sending defamatry infrmatin int many states via the internet (nt directing infrmatin specifically t ne/several states) is nt enugh t establish PJ ver the authr f such infrmatin (see, e.g., Revell v. Lidv, 2002, US CA fr 5 th Circuit rejected PJ ver wner f website and authr f allegedly defamatry article, because neither D knew that P lived in TX, website wasn t directed at TX, while website had TX subscribers the article wasn t

12 12 written using TX surces, article didn t have anything indicating it wuld be f particular interest t TX readers). Disseminating infrmatin ver the internet neither creates GJ nr PJ, must have targeted frum state with infrmatin and knwn that impact f actin wuld be in frum state (see, e.g., Jacksn v. Califrnia Newspapers Partnership, 2005, D s website s publicatin f allegedly slanderus article abut P was nt specifically targeted at P s hme/frum state, P s allegedly harmed reputatin is natinal, nt limited t IL (therefre weaker than Calder), and asserting PJ ver D wuld ffend traditinal ntins f fair play and substantial justice. NB: Zipp test fr determining extent t which a website is interactive fr PJ purpses mainly bslete tday, and in any event n real need fr new test, just apply Internatinal She: whether r nt there was directed activity, is cntent directed t specific audience? Whether the wner f the website intentinally directed electrnic twards frum state and whether the cause f actin in case arse frm that activity. F. General jurisdictin and ther bases fr persnal jurisdictin i. Definitin f GJ General jurisdictin- can be exercised nly if the defendant has cntinuus and systematic cntacts with the frum. If this standard is met, a curt can hear any claim that the plaintiff may have against the defendant, even if the claims arse ut f defendant s cntacts in a different state. ii. If crp. has cntinuus and systematic cntacts w/ state, then it wn t experience much f a burden by defending claims there cncept f taking advantage f benefits f ding business in state, must accept expsure t liability. iii. Mere purchases, even if ccurring at regular intervals, are nt enugh t warrant a State s assertin f in persnam jurisdictin ver a nn resident crp in a cause f actin nt related t thse purchase transactins (see, e.g., Helicpters Nacinales de Clmbia, SA v. Hall, 1984, freign cmpany s cntacts with state f TX were insufficient t establish general jurisdictin in TX fr purpses f wrngful death cause f actin, because nature f D s cntacts were nt cntinuus and systematic ne trip by D s CEO t negtiate K des nt meet that standard, neither d purchases/related trips). Majrity did nt explain what kinds f cntacts are cntinuus and systematic lwer curts have had difficulty determining what Helicpters means. Mst curts have fund general jurisdictin where an entity has either its place f incrpratin r its PPB. Sme curts have held it exists in states where the defendant has a cntinuing physical presence, such as an ffice (especially when that presence includes emplyees). NB: Majrity relies n Rsenberg Brs. & C. v. Curtis Brwn C., 1923, - defendant was small retail cmpany in OK that was sued in NY nly NY cnnectin was that it bught a large prtin f the merchandise sld in its Tulsa stre frm NY whlesalers. Curt cncluded that this did nt establish general jurisdictin. Brennan s dissent pints ut that Rsenberg might nt be relevant anymre in the mdern ecnmy, was decided in 1923 befre fundamental transfrmatin f ur natinal ecnmy. Brennan als pints ut related t part f establishing PJ, and wnders why it isn t allwed t be applied here given TX s interest in adjudicating suit.

13 13 Majrity did nt explain what kinds f cntacts are cntinuus and systematic lwer curts have had difficulty determining what Helicpters means. Mst curts have fund general jurisdictin where an entity has either its place f incrpratin r its PPB. Sme curts have held it exists in states where the defendant has a cntinuing physical presence, such as an ffice (especially when that presence includes emplyees). Reyes v. Marine Mgmt & Cnsulting, Ltd (1991)- accident ccurred ff the cast f OR, plaintiff sued in LA. Luisiana Supreme Curt held that general jurisdictin applied because Hng Kng cmpany had a crprate ffice in Luisiana frm which it cnducted a significant amunt f crprate business. Rbbins v. Yutpian Enterprises (2002)- claim against CA cmpany in MD. Alleged infringement ccurred in CA, but defendant had cnducted almst 50 transactins with MD custmers in the year prir, and had engaged in heavy marketing in MD. Curt did nt find general jurisdictin: regular cntacts are nt necessarily cntinuus and systematic cntacts. iv. A curt may assert general jurisdictin ver freign (sister-state r freigncuntry) crpratins t hear any and all claims against them when their affiliatins with the State are s cntinuus and systematic as t render them essentially at hme in the frum state. (see, e.g. Gdyear Dunlp Tires v. Brwn, 2010, D was nt subject t GJ nr PJ in frum state f NC in wrngful death suit, because the fact that D s prducts are in the SC in NC (nly cntacts with state) is insufficient t establish PJ, let alne GJ). NB: SC is fr establishing PJ ONLY, and strengthening PJ assertin des nt = GJ. Ruling therwise wuld leave any manufacturer pen t suit n any claims f relief, wherever gds are distributed (wuld g against WWV precedent). v. Helicpters curt did nt say whether general jurisdictin applies t individual defendants; later n Scalia suggested that general jurisdictin (based n cntinuus and systematic cntacts) might be limited t entity defendants, such as crpratins. Analgus dctrine t general jurisdictin fr individual defendants is dmicileindividuals are subject t persnal jurisdictin wherever they are dmiciled (Milliken v. Meyer- Curt held that dmicile in state is sufficient alne t bring an absent defendant within reach f state s jurisdictin fr the purpse f persnal jurisdictin). Main difference: a persn nly has ne dmicile fr purpses f PJ, but a cmpany may have cntinuus and systematic cntacts in several different states systematically. IV. REQUIREMENT OF NOTICE AND OPPORTUNITY TO BE HEARD A. Cnstitutinal requirement f ntice i. DPC in 5 th A (applicable t fed. cts) and DPC in 14 th A (applicable t state cts) put cnstitutinal restraints n methds f service f prcess). ii. Ct must act in accrdance w/ DP f law bc when ct enters judgment against D, it interferes with his liberty/prperty. i. Fr service t be cnstitutinally inadequate, it must be sufficiently unlikely t reach the parties, and there must be a means f prviding mre effective service; When ntice is a persn s due, prcess which is a mere gesture is nt due prcess. The means emplyed must be such as ne desirus f actually infrming the absentee might reasnably adpt t accmplish it. (see, e.g., Mullane v Central Hanver Bank and Trust C., 1950, ntice via newspaper publicatin f settling first accunt f a trust deprived sme f the beneficiaries f their due prcess rights under the 14 th A, because the publicatin was inadequate ntice fr beneficiaries with knwn interests in trust and/r addresses, mail must be used).

14 14 NB: Persnal service is always cnstitutinal Have t weigh csts/cnvenience f ntificatin v. cnstitutinal rights, must have relatinship t ptential deprivatin NB: Mullane establishes brad cnstitutinal standard rather than a mechanical answer; was the first time SCOTUS has discussed ntice Metzlff s qute: 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. When abslutely nthing else wrks, substituted service is k but it must be last resrt, must ask curt t grant rder allwing publicatin. B. Service f prcess (see pgs. 335 fr rules fr natural persns/crpratins ther entities) NB: 4(e): individual defendant; 4(h): crpratin, partnership r assciatin ; 4(j): municipalities; 4(f): freign Ds i. Greene v. Lindsey, 1982 service f prcess in an evictin actin KY statute authrized sheriff t deliver ntice t tenant If n ne was hme, pst papers n tenant s dr Tenants argued statutry methd didn t satisfy minimum standards as described in Mullane SCOTUS agreed, many such ntices didn t reach Ds via that methd, and anther inexpensive and reliable methd was available (the mail). ii. Jnes v. Flwers, 2006 ntice f tax sale prceeding AK statute authrized ntice in a tax sale prceeding by certified mail t the wner pf prperty, fllwed by prperty if letter was returned unclaimed. SCOTUS held this was inadequate (clsely divided pinin) Majrity: cnsequence f deprivatin invlved (sale f D s real estate), mre steps needed t give actual ntice. iii. Rule 4(c)(1): cmplaint and summns must be served n D Rule 4(c)(1): plaintiff is respnsible fr having summns and cmplaint served n D. Rule 4(c)(2): [any] persn wh is at least 18 years ld and nt a party may serve summns and cmplaint. iv. Fed. Rule 4(e)(2)(B) allws service by leaving summns and cmplaint (if D is a persn) at D s dwelling with a persn f suitable age and discretin residing therein. 4(d): waiving frmal service; mailing cmplaint and asking ptential D t waive service if yu say n, marshall/sheriff will d it, yu ft the bill, and they might turn up at yur ffice. Sme states (like MA) allw fr service at last and usual place f abde withut requirement f leaving it with a persn seems like apprach that was rejected in Greene. Smarter t just use fed standard t avid cnstitutinal challenge. v. Service and SL Rule 4(m): SL: 120 days t serve service and cmplaint (after it is filed in ct.), therwise ct must dismiss actin If P shws gd cause fr failure t make service, ct must grant extensin f time t make service fr an apprpriate perid. If n gd cause shwn, ct can still extend time but it s at its discretin. Dismissal fr failure t make timely service desn t bar P frm filing new actin Apprach 1: filing suit is enugh fr SL Apprach 2: serving cmplaint is required t meet SL SL varies depending n claim n ne universal SL

15 15 Sme lnger than thers (medical malpractice much lnger than libel, bc exceptin is needed fr things yu culdn t have pssibly knwn abut until later) Sme events tll SL: pstpne its expiratin r keep the clck running, fraudulent cncealment discvery prvisins (e.g., medical malpractice freign bdy cases) tlling agreement ptential D agreeing t waive SL t permit time fr ptential P t investigate claim; if yu allw them mre time, might decide nt t file, if yu say n, might file immediately. V. THE AMERICAN APPROACH TO PLEADING -FRCP 2: There is ne frm f actin the civil actin; merger f law and equity A. Basic pleading principles Rule 7: cmplaint must state grunds fr federal SMJ, shrt and plain statement f claim shwing entitlement t relief and a demand fr relief. Rule 7: answer respnds t factual allegatins f P, asserts defenses and smetimes claims (can include cunterclaim r crss claim) Ds ften challenge sufficiency f pleadings: mtin t dismiss cmplaint fr failure t state a claim (can file befre even having t answer) Ntice pleading adpted in FRCP in 1938 under Rule 8(a): a shrt and plain statement f the claim shwing that the pleader is entitled t relief, made ntice the primary functin f pleading Intentinally avided use f terms facts r cause f actin Even thugh minimalist cmplaint, Rule 11 states that when a lawyer signs a cmplaint, she certifies that there is a reasnable basis frmed after reasnable inquiry that the claims are warranted by existing law (r a nn frivlus argument fr extending the law) and that there is a factual basis fr claims that have evidentiary supprt). NB: mst cmmn instance f P pleading herself ut f curt is P wh alleges dates in cmplaint that shw claims t be time-barred by SL. Liberal system f ntice pleading: under refrm f FRCP, the sle requirement fr pleading is that there is a shrt and plain statement f the claim shwing that the pleader is entitled t relief (see, e.g., Diguardi v. Durning, 1944, althugh P s cmplaint identified n thery f law r substantive legal argument (just alleged facts), CA reversed 12(b)(6) mtin because the ct culd identify the theries frm the facts; a pleading cntaining n issues f substantive law can be cnsidered sufficient by the ct). T survive 12(b)(6) mtin: if the facts in the cmplaint were true, wuld they entitle the pleader t relief under the substantive law? Must have evidentiary supprt fr factual assertins. Bare statement f claim suffices under the rules, shuld be cnstrued generusly in favr f surviving a mtin t dismiss. Ps dn t have t d any mre than narrate a grievance simply and directly t satisfy Rule 8(a) (see, e.g., De v. Smith, 2005, P s cmplaint is acceptable under Rule 8(a) and Cnley althugh it desn t allege anything relating t a key wrd in the statute under which her claim is filed). Dn t need t plead facts r law; just plead claims fr relief, n magic wrds. Standard needed t allw a pleading t survive mtin t dismiss The accepted rule that a cmplaint shuld nt be dismissed fr failure t state a claim unless it appears beynd dubt that the plaintiff can prve n set f facts in supprt f his claim which wuld entitle him t relief (see, e.g., Cnley v. Gibsn, 1957, extremely favrable standard fr Ps). plaintiffs need nt plead facts.

16 16 Hishn v. King & Spalding- dismiss case nly if it is clear that n relief culd be granted under any set f facts that culd be prved cnsistent with the allegatins. Prf. Metzlff wrked n this case****** Cmmn fr curts t deny mtins t dismiss saying it cannt be said that there are n set f facts Nw a retired case, replaced by Twmbley/Iqbal B. Special pleading situatins- Rule 9(b) paradigm -Rule 9(b) prvides that the circumstances cnstituting fraud r mistake shall be stated with a particularity. Theries behind the rule: higher stakes (PD, etc) s D deserves prtectin; aviding in terrrem settlements given higher stakes and reputatin i. Rule 9 is interpreted by expressi unius est exclusi alterius, meaning that the express mentin f ne thing excludes all thers nly subjects that may have heightened pleading standards are listed in Rule 9, and the list is exhaustive (see, e.g., Leatherman v. Tarrant Cunty Narctics Intelligence and Crdinatin Unit, 1993, 5 th Circuit s heightened pleading standard fr civil rights cases alleging municipal liability vilated Federal Rules standard nly requirement (except fr cases falling under 9(b)) is shrt and plain statement f the claim shwing that the pleader is entitled t relief. ). authrity t require heightened pleadings Decisin written by Rehnquist, nt nrmally a civil rights-friendly guy Plain meaning dctrine (dn t lk at the purpse behind the rule, stick t the text f the rule and apply it), if it s a prblem, slve it by changing FRCP and nt by a clever interpretatin f an existing rule C. Current cntrversy in pleading- Twmbly/Iqbal revlutin Cnley was standard fr pleading fr 50 years in 2007, SCOTUS seemed t end its reign i. Parallel cnduct alne, absent sme evidence f agreement t engage in anti-cmpetitive behavir, is nt sufficient t prve a vilatin f 1 f the Sherman Act. A cmplaint must allege facts with sufficient specificity t state a claim fr relief that is plausible, nt merely cnceivable, n its face (see, e.g., Bell Atlantic Crp. v. Twmbly, 2007, parallel business cnduct is admissible as circumstantial evidence frm which an illegal agreement culd be inferred, but it is nt cnclusive evidence r itself unlawful). We d nt require heightened fact pleading f specifics, but nly enugh facts t state a claim t relief that is plausible n its face. Has nt nudged their claims acrss the line frm cnceivable t plausible therefre dismiss it! Twmbly: the curt adpted a stricter "plausibility" standard, requiring in this case "enugh fact[s] t raise a reasnable expectatin that discvery will reveal evidence f illegal agreement". NB: evidence f SCOTUS antagnism tward discvery prcess, but hw des SCOTUS knw there is abuse f discvery? They cite 1 law review article. NOT verruling Cnley, but saying it s verstated; als created cnfusin as t whether r nt this was limited t antitrust cases clarified in Iqbal. ii. Tw prnged apprach fr all civil cmplaints: 1) While a curt must accept as true all f the factual allegatins in a cmplaint, this des nt include legal cnclusins; 2) Only a cmplaint that states a plausible claim fr relief survives a mtin t dismiss; (fr this specific case: fr establishing discriminatry intent, it des nt suffice t make cnclusry allegatins when generally alleging the intent) (see, e.g., Ashcrft v. Iqbal, 2009, P s pleading was dismissed because they pled the elements f their claim withut enugh facts t supprt thse elements, and in the well-pleaded parts,