Table of Contents

Introduction

Personal Jurisdiction…………………………………………………………………………………………………………………….3Service of Process…..……………………………………………………………………………………………………………………12Subject Matter Jurisdiction………………………………………………………………………………………………………….14Multiple Claims and Parties – Joinder & Jurisdiction………………….………………………………………………..16Removal and Venue..……………………………………………………………………………………………………………………23Pleading….…..…………………………………….…………………………………………………………………………………………26Class Actions.…………………………………….…………………………………………………………………………………………31

I. INTRODUCTION

Authority of Court to Proceed with Action

Illustrative Cases:

Capron v. Van Noorden – SCOTUS 1804 Facts: Van Noorden trespassed on Capron’s property. Capron filed suit. NC Circuit court fount against Capron. Capron appeals to SCOTUS stating that court record did not clarify that there was diversity jurisdiction. SCOTUS overturned saying Subject Matter Jurisdiction cannot be waived and fed. Court should not have heard. Takeaway: SMJ cannot be waived. PJ and Venue can be waived.

Why does diversity jurisdiction exist?- Federal judges less biased – appointed for life, no election. - There is significant overlap between federal and state courts. - Limits on federal court exist so the state courts can retain a piece of the pie. (Spirit of Article III).

Article III of the Constitution (relevant portions).

SECTION 1 - The judicial power of the United States, shall be vested in one Supreme Court, and in such inferior courts as the Congress may from time to time ordain and establish.

SECTION 2 - The judicial power shall extend to all cases, in law and equity, arising under this Constitution, the laws of the United States, and treaties made, or which shall be made, under their authority;--to all cases affecting ambassadors, other public ministers and consuls;-- to controversies to which the United States shall be a party;--to controversies between two or more states;--between a state and citizens of another state;--between citizens of different states;--between citizens of the same state claiming lands under grants of different states, and between a state, or the citizens thereof, and foreign states, citizens or subjects……The trial …shall be by jury; …held in the state where the said crimes shall have been committed; but when not committed within any state, the trial shall be at such place or places as the Congress may by law have directed.

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Tickle v. Barton, S.Ct. WV 1956Facts: Coleman, Barton’s agent (VA), caused an automobile injury to Tickle. Attorney for Tickle wrongfully and deceitfully tricked Barton into coming to WV and sheriff served him at an event (Alias process- second attempt to serve). ∆ filed Plea in Abatement * and filed demurrer*. ∆ won. πTakeaway: A plaintiff cannot effect service of process by tricking a ∆ by entering the jurisdiction.Notes and definitions:

1. Plea in Abatement: (Motion to dismiss) - In Common-Law Pleading, a response by the defendant that does not dispute the plaintiff's claim but objects to its form or the time or place where it is asserted – time, place, manner or mode where the claim has been asserted.

2. Demurrer: Motion to dismiss for failure to state a claim upon which relief can be granted. Legal way of saying “So What?!” – Lawyer doesn’t deny actions – the process is still valid.

3. Interlocutory hearings: Hearing in the middle of a lawsuit on a particular judgment. Not allowed in federal court. Allowed in some state courts.

The Right to Due Process

14th Amendment of the US Constitution: No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process; not deny to any person within it’s jurisdiction the equal protection of the laws. (Due Process in both 5th and 14th Amendment. 5th for Federal only, 14th covers states too).

Illustrative Cases:

Goldberg v. Kelly – SCOTUS 1970Facts: NYS welfare recipients brought suit due to having their welfare payments terminated before due process was awarded to them, i.e. the right to appear in person, for an oral presentation, to plead their case. Held. Cannot take away welfare from destitute person in brutal need, unconscionable and takes precedence over govt.’s need to protect tax revenue. Condemns them to suffer grievous loss. Welfare fosters dignity within borders, prevent social malaise, and promote general welfare. Pre-termination hearing does not have to be a judicial hearing; just fair with oral presentations allowed and must state reasons for ruling. Dissent: Slippery slope to overwhelm the govt. Govt. will put less people on welfare, new experiments should not be frozen into const. law. Takeaway: Right to in person hearing before taking away of brutal need (life and property – 14th Amendment).

Mathews v. Eldridge – SCOTUS 1976 Facts: Eldrigde lost social security disability benefits as state determined he was no longer disabled. Claimed had right to pre-termination hearing under 14th amendment and Goldberg. Held. SSA does not need pre-termination hearings to terminate disability benefits due to its elaborate procedural safeguards. Potential deprivation not as high as Goldberg. Complete information reviewed, medical professionals reviewed sharply focused and easily documented evidence. Dissent: Limited deprivation is speculation. Takeaway: Don’t always have right to an in person hearing if the procedural safeguards are enough to provide fair and unbiased hearing.

Des Moines Navigation v. Iowa Homestead, SCOTUS 1887 Facts: Old case- Iowa sued Des Moines in state court. ∆ moved to federal court (some were from NY), partial diversity only. Nobody challenged diversity. Des Moines wins. SCOTUS affirms on merits and “impliedly recognizes” the circuit courts authority to take the suit. Current case- 14 years later, Iowa sues

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Des Moines to recover taxes for land. Des Moines Collaterally attacks old suit – saying no SMJ. IA S.Ct agrees. Held. The federal court has the power to decide whether a case is properly before it. The Circuit Court and the Supreme Court of the United States impliedly recognized subject matter jurisdiction of the previous case when it evaluated the case on its merits.Takeaway: Jurisdiction can be implied. When a case is removed to federal court, the federal court has the power to determine subject matter jurisdiction. It should be noted that federal courts have subsequently required complete diversity in analogous situation.

Things to consider before filing suit:

1. Subject Matter Jurisdiction (Article 3)2. Personal Jurisdiction (1. Long arm statutes 2. Due Process)3. Notice (Due Process)4. Has service of process been properly served and elated to above- was manner of notice done properly? (Federal Rule 4)5. Venue6. Removal (D’s can veto P’s choice of court)7. Waiver – when can the 6 issues above be waived?

II. PERSONAL JURISDICTION

Pennoyer v. Neff, SCOTUS 1878Facts: Neff buys land under land donation. Mitchell brings suit against Neff for unpaid legal fees. Mitchell publishes summons in OR newspaper. Neff no show and default judgment. Writ of execution for sale. Mitchell buys land at auction and assigns to Pennoyer. Neff suing Pennoyer to recover possession. Earlier decision invalid due to lack of PJ over him and land. Held. Property is still Neff’s. Takeaway: A court may enter a judgment against a non-resident only if the party 1) is personally served with process while within the state, or 2) has property within the state, and that property is attached before litigation begins (i.e. quasi in rem jurisdiction).

1. In PersonamPage 83, exercises authority over person served process in it’s borders, citizen of the state, or voluntarily agrees to the jurisdiction of the state.

2. In Rem Court can determine the “status” of a property in the state. Exists just for property – many claimants – one property.

It is acceptable to use “publication” as a notice–as seizure of property:a. More likely to give the ∆ notice b. The state can legally exercise jurisdiction on property.

3. Quasi in RemExercises authority over person not in its borders, but who owns property in the state. The value of the judgment cannot exceed the value of the property. No QIR jurisdiction in M v. N because Mitchell didn’t attach the property at the beginning of the law school. Mechanism for court to assert control over property (court can seize it if it’s physical, if it’s land it’s an “Order of Attachment” (can’t sell or buy), court secured control over property only after. As a formal matter – the jurisdiction should be est. at the outset and without property you can’t

have jurisdiction.

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Actual act of attachment at the beginning of the suit is better means of notice at the beginning of the suit.

Attachment of property can work either as a jurisdictional device or a means of recovery.

Pennoyer Bright Line Rules: Below are only ways in which court can assert jurisdiction on a non-resident: 1. Presence – In personam, within states borders. 2. Domicile3. Express consent – waiver of personal jurisdiction, or agents. 4. Implied consent

Jurisdiction over Individuals

1. Presence/Domicile/Residence:

Jurisdiction may be exercised over an individual by virtue of his presence within the forum state. That is, even if the individual is an out of state resident who comes into the forum only briefly, PJ on him may be gotten as long as service was made on him while he was in the forum state. Jurisdiction may also be exercised over somebody who is domiciled within the forum state, even if the person is temporarily absent from the state. A person is considered domiciled in the place where he has his current dwelling place, if he has the intention to remain in that place for an indefinite period. Domicile does not change if the person states intent not to return but does not specify new domicile.

Illustrative case:

Burnham v. Superior Court, SCOTUS 1990 Facts: D and his wife, P, separate while residing in New Jersey. P moves to California with their children. D visits California on business, and stops briefly to visit the children. While D is visiting, P serves him with process in a California suit for divorce. D never visits the state again. Disputes process on basis of “no minimum contacts.” Held, California can constitutionally assert personal jurisdiction over D based on his presence in the state at the time of service, even though that presence was brief, and even though D had virtually no other contacts with the state. Scalia v. Brennan discourse on pages 180-191Takeaway: Long discussion, but in person service valid because of traditional notions of fair play and justice (tradition key word for Scalia), and because (Brennan) ∆ availed himself to California’s laws and protections, travel is easy etc. Voluntary presence enough to establish PJ.

2. Express consent

When PJ is waived or an agent is appointed for PJ, the person may be served there.

3. Implied Consent

States often exercise jurisdiction over non-residents who conduct businesses within the state, use the states roads and or social services, and who commit tortuous acts in a state’s borders.

Hess v. Pawlowski, SCOTUS 1927∆ was driving in Massachusetts where he has no contacts, sued by in MA. Was the Massachusetts lawπ that stated that out of state drivers gave implied consent to the appointment of the Registrar as agent for service of process constitutional? Held. Courts ruled that the state has the right to make equal rules that bind non-residents who choose to use their resources.

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Takeaway: Implied consent case. By choosing to drive in a state, a non-resident demonstrates that the state is not so inaccessible or remote that it would be unfair to subject him to suit in that state. The Massachusetts statute sought to put out-of-state drivers on the same level as resident drivers and did not discriminate against them.

Considerations when Determining Jurisdiction over Individuals 1. Purposeful availment of ∆2. Burden on ∆ 3. Burden on third parties – witnesses etc. 4. State’s interest – in enforcing it’s own laws. 5. Plaintiff’s interest

Jurisdiction over Corporations

Pennoyer created two rules for jurisdiction, presence and domicile. International Shoe added a third rule “minimum contacts” to grant courts the right to jurisdiction.

International Shoe, SCOTUS 1945Facts: ∆ out of state corp. selling shoes in WA. Shipping shoes to WA, salesmen in WA, semi-permanent showrooms in WA etc. WA suing ∆ for failure to make unemployment contributions per statute. Served ∆ by service on salesman and also mail. ∆ argued that it did not “do business” in the state, that there was no agent upon which service could be made and that the statute violated the Due Process Clause of the 14th amend. and imposed a prohibitive burden of interstate commerce. Held. ∆ had minimum contacts with the state that the maintenance of the suit does not offend “traditional notions of fair play and justice.” – Minimum contacts not just continuous and systematic but also related to liability. ∆ was awarded protection of WA laws and therefore also subject to suit. Takeaway: In order for a state to exercise personal jurisdiction over a defendant, the defendant must have such minimum contacts with the state so that exercising jurisdiction over the defendant would not offend “traditional notions of fair play and substantial justice.”

Extent of defendant’s activities and Type of ClaimHow to formulate jurisdiction arguments

Type of Contacts/Cause of Action Jurisdiction? Examples – Update these

(1) Extensive contacts/Claim Related

Yes

(2) Extensive contacts/Claim Un-related (General jurisdiction - Continuous and Systematic contacts).

Sometimes International Shoe, Goodyear(3) Isolated acts/ Claim related (Specific jurisdiction) Sometimes

American Radiator, McGee v. Insurance, Hanson v. Denckla, Burger King, Asahi, J. McIntyre, WWVW

(4) Isolated acts/Claim unrelated -

No

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Long Arm Statutes

Most states have some sort of long arm statutes. Long arm statutes permit courts to obtain jurisdiction over persons not physically present within the state at the time of service. Long arm statutes usually provide for substitute service since in-state personal service is not is not possible.

Some long arm statutes give the court great power to decide. That is, they go to the limits of constitutional powers. Others are more restrictive. Allowing courts more freedom may lead to more power, but may also clog up courts. However, this may give the courts the best chance to protect their citizens. See Venn Diagram, below:

Whenever we make determinations about whether a court has jurisdiction we need to ask:

1. Does the long arm reach the D?2. If so, is due process upheld?

If yes, the court may grant jurisdiction.

Courts only address constitutional questions if they HAVE to – to avoid declaring too many things “unconstitutional.” So they always address the state statute question first.

IL Long arm statute on Page 97 of textbook.

Specific Jurisdiction

Gray v. American Radiator & Standard Sanitary Corp, IL S.Ct, 1961Facts: was injured when a valve in a water heater made by American Rad. exploded. Valve was made πby Titan Manu. Valve was manufactured in Ohio and heater assembled in PA. Titan was served in Ohio. ∆ claimed no minimum contacts and IL Long arm is unconst. (Statute on Page 97). Held. Place of last event is where tort is committed so under IL long arm, there is jurisdiction over ∆. IL Long arm does not violate due process since it gives opportunity to be heard. Court says Titan does not meet the International Shoe minimum contacts test but that has been relaxed and now it is sufficient to satisfy due process if the act or transaction itself has a substantial connection to the forum state. Court where injury occurred = most convenient forum. Takeaway: International Shoe has been relaxed. Minimum contacts not only test. Now if ∆s sell products in a forum and avail themselves of protection of forum then they may be required to defend action in the forum. ALSO, first time a ∆ served outside the state was said to be okay. Not even a fictitious agent in the state.

McGee v. International Life Insurance, SCOTUS 1957Facts: The , in CA was beneficiary of insurance policy from ∆ TX company but ∆ refused to pay. sued π πin CA court, won, and tried to get TX court to enforce judgment. TX court refused citing violation of due process and CA court could not have juris. over ∆ without service in CA. Held. Scotus ruled that CA jurisdiction was valid as it was based on a contract with substantial connection to the state (solicited in

Constitution

Long

Arm

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CA, premiums paid from CA etc.). CA has manifest interest in providing recourse to it’s residents when insurers refuse to pay claims. Takeaway: IF long arm allows, state court satisfies due process when it is based on a contract with substantial connection to that state.

Dealings with residents of forum state:

Usually, a corporation will be found to have the requisite "minimum contacts" with the forum state only if the corporation has somehow voluntarily sought to do business in, or with the residents of, the forum state. The above case was useful not for it’s holding, but all the considerations that the court considered in determining “fair play” and “substantial justice.” The court balances these many factors when determining whether jurisdiction is proper.

Note that MINIMUM CONTACTS must be established first, before can make FAIRNESS considerations. Absent the contacts we don’t get to fairness. (e.g. WWVW)

State’s Interest P’s Interest Convenience

Generally – 3rd Party Interest

Burden on D Purposeful

Availment Foreseeability

Hanson v. Denckla, SCOTUS 1958Facts: est. a trust in DE and then moved to FL. She conducted some affairs of the trust from there and πdied there. Family fight between three daughters. 2 daughters brought action in Florida, executrix claimed FL did not have jurisdiction over DE trustee. FL concluded it did have jurisdiction and trust beneficiary designation invalid. Executrix commenced action in DE – DE held trust valid. Held. SCOTUS held that FL did not have PJ over the DE trustee (bank), an indispensible party to the action. Trust company never did business in FL, did not solicit in FL, did not avail to FL laws. Takeaway: Jurisdiction relaxed but not gone. If no minimum contacts, no solicitation and no availment of state protection, no PJ. Jurisdiction does not move, stays with transaction.

Difference between McGee and Hanson: First ∆ (insurance company) purposefully availed themselves to CA, whereas the second ∆ (bank/trustee) did not avail themselves to FL.

Products Liability Series: The requirement of "minimum contacts" with the forum state is especially important in products liability cases.

Effort to market in forum state: The mere fact that a product manufactured or sold by ∆ outside of the forum state finds its way into the forum state and causes injury there is not enough to subject ∆ to personal jurisdiction there. Jurisdiction does not move with product. Instead, ∆ can be sued in the forum state only if it made some effort to market in the forum state, either directly or indirectly.

Applying our rule from above: IF (1) Minimum Contacts, THEN (2) balance considerations. This rule is applied to protect the rights of states to hear those cases that may be of interest to them, even more so than to protect the rights of the plaintiffs.

World Wide Volkswagen v. Woodson, SCOTUS 1980

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Facts: got injured in a car accident in OK – in a car they bought in NY from ∆ who does business only in πtri-state area. OK court denied motion to dismiss based on no juris. in OK. ∆ appealed against judged to ask to stop enforcing PJ on them. Held. No PJ since ∆ did not avail themselves of OK. Fairness questions don’t come into place unless there is PJ first. Takeaway: Foreseeability that a product might end up in a state is not enough for PJ. The ∆ must have intentionally inserted themselves into the stream of commerce. No fairness determination without deciding on PJ question.

Knowledge of in-state sales enough: If the out-of-state manufacturer makes or sells a product that it knows will eventually be sold in the forum state (as opposed to WWV), this fact by itself is probably enough to establish minimum contacts. However, if this is the only contact that exists, it may nonetheless be "unreasonable/unfair" to make ∆ defend there, and thus violate due process.

Burger King v. Rudzewicz, SCOTUS 1985Facts: Florida Corporation and ∆ Michigan resident had a franchise agreement specifying that ∆ may beπ subject to suit in Florida. Sued in FL federal court based on diversity of citizenship for non-payment under the franchise agreement. ∆moved to dismiss saying FL did not have PJ over ∆. FL court upheld PJ, appeals reversed. Held. SCOTUS said PJ over ∆ exists in FL. FL long arm allows jurisdiction over any person who breaches contract. Minimum contacts exist as ∆ entered contract there, agreed to forum selection, agreed to FL law being used, made payments there, could reasonably foresee being sued there. Takeaway: Business agreements with forum-selection clause in contracts will be upheld if the state long arm allows and if there is no grave hardship to the ∆.

Contractual relationship involving the state: Where the contract itself somehow ties the parties’ business activities into the forum state, this will be an important factor tending to show the existence of minimum contacts. For instance, if one party is to make payments to the other, and the latter will be receiving the payments in the forum state, this stream of payments coming into the state is likely to establish minimum contacts and thus to permit suit against the payor.

Choice-of-law clause: Where there is a contract between the parties to the suit, the fact that the contract contains a choice of law clause requiring use of the forum state’s law will also be a factor (though not a dispositive one) tending towards a finding of minimum contacts.

Asahi Metal Co. v. Superior Court, SCOTUS 1987 Facts: injured in motorcycle accident sued the manufacturer of the motorcycle’s tire tube (Cheng πShin/CS), who then filed a cross-complaint against the manufacturer of tube valve. and Cheng Shin πsettled. Now CS v. Asahi (∆). Sales to CS only 1.24% of ∆’s income and of CS sales only 20% go to US. Held. No PJ. While ∆ may have known that it’s tires might end up in the US, it did nothing to avail itself of CA’s laws, did not market, sell, design product for CA. Asking ∆ to defend in CA is unfair, especially since two foreign corporations, and CA’s slim interest in the forum. Also not good for foreign relations to extend PJ this far. Takeaway: Stream of commerce, PLUS theory. Just entering stream of commerce/ or foreseeing that it will be entered is not enough. Must also purposefully avail of the state laws etc., and not be unreasonable or unfair to defend there.

J.McIntyre Machinery v. Nicastro, SCOTUS 2011 Facts: British Manufacturer ∆ sold machinery in US through a US distributor. One machine ended up in NJ and had an accident while using machine, which caused serious injury. NJ court gave PJ over ∆ because π1. ∆ had an independent distributor 2. ∆ officers attended annual conventions to advertise (never in NJ)

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3. 4 machines (dispute, record shows 1) ended up in NJ 4. ∆ held US patents. NJ S.Ct said PJ valid since ∆ entered stream of commerce and could foresee products being sold in all 50 states. Held. No PJ. Foreseeability and entering stream of commerce not enough. ∆ must also purposefully avail self of forum. Never availed self of NJ – even if availed of United States. Fairness cannot come into play without minimum contacts and due process considerations. Takeaway: Stream of commerce PLUS purposeful availment of forum necessary- only together do they satisfy “minimum contacts”; Fairness considerations after.

As Asahi and McIntyre show, there has to be an known entering into the stream of commerce PLUS a purposeful availment of forum to satisfy the “minimum contacts” required for due process to be met. Even more so with foreign defendants when it might be “unreasonable” to have them defend a suit in the United States. “Stream of Commerce Plus” Rule – where there is stream of commerce plus something else, like customer service, purposeful availment et al. there will likely be jurisdiction.

General Jurisdiction

What do we need for General Jurisdiction?1. Threshold for minimum contacts is much higher when cause of action is unrelated.2. Requisite contacts that are “Continuous and Systematic” + Substantial contacts in the state.

Goodyear v. Brown, SCOTUS 2011 Facts: Bus carrying to CDG overturned outside a road in Paris. were young soccer players from NC. π πGoodyear France and Goodyear Turkey named as ∆ - they serve primarily EU and Asia and their tires are different than those ordinarily sold in the US. Claims did not arise from ∆ contacts with NC so “General Jurisdiction” case – requires “continuous and systematic” activity. Held. No PJ 1. NC Long arm does not reach ∆. 2. Since the requisite contacts for General Jurisdiction are not met. ∆ did not have continuous and systematic activity in the state. A single sale cannot constitute systematic activity. Corporations are at home where they are incorporated and their PPB. Takeaway: Significantly raised threshold for General Jurisdiction (treating International Shoe almost like a specific jurisdiction case) – Corporation is subject to general jurisdiction in 1. State where Incorporated 2. Where the corporation is “Essentially at home.” Can be more than 2 places unlike domicile for SMJ. So HQ, big factory, “Continuous and Systematic” contacts in the state.

Jurisdiction over Property

Two types of actions: There are two types of actions that relate primarily to "things" rather than to people: (1) in rem actions; and (2) quasi in rem actions.

In Rem Actions

Ones that do not seek to impose personal liability on anyone, but instead seek to affect the interests of persons in a specific thing (or res). (Examples: actions to quiet title to real estate or to foreclose a lien upon it; actions for divorce.) In all of these types of in rem actions, no judgment imposing personal liability on anyone results – all that happens is that the status of a thing is adjudicated. (Example: In a quiet title action, a determination is reached that A, rather than B, is the owner).

Specific performance of land sale contract: One important type of in rem action is an action for specific performance of a contract to convey land. Even if the defendant is out of state and has no connection

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with the forum state other than having entered into a contract to convey in-state land, the forum state may hear the action. ∆ does not have to have minimum contacts with the forum state for the action to proceed – it is enough that the contract involved in-state land, and that ∆ has received reasonable notice.

Quasi in Rem Actions

Harris v. Balk , SCOTUS 1905Harris, of North Carolina, owes $180 to Balk, of North Carolina. Epstein, of Maryland, has a claim against Balk for $300. While Harris is visiting in Maryland, Epstein attaches Harris’ debt to Balk by serving Harris with process in a Maryland suit. Held. SCOTUS says that Epstein could assert a quasi in rem jurisdiction since a debt is a kind of property. Under pre-Shaffer law, this established quasi in rem jurisdiction over the $180 debt, on the theory that the debt goes wherever the debtor goes. If Epstein won, he could require Harris to pay the $180 to him rather than to Balk. Since Maryland had law that would allow defendant to pursue debt owed by garnishee to defendant, plaintiff could attach debt owed by garnishee to defendant, even though garnishee was not Maryland resident.

Shaffer v. Heitner, SCOTUS 1977 Facts: brings “shareholder derivative suit” in DE against 28 of Greyhound’s non-resident officers and πdirectors. None of the activities happened in DE so no specific jurisdiction – asserts QIR jurisdiction πsince DE considers the stock of the company to be in DE (no matter where the certificates are held). Held. SCOTUS says that property cannot be subject to a court’s judgment unless reasonable and appropriate efforts have been made to give the owners notice of the action. We should look at Int. Shoe’s notions of fair play in justice not only for in personam but also for in rem. Conclude all assertions of state-court jurisdiction must be evaluated according to the standards set forth in International Shoe. QIR only for real estate. Takeaway: Basically did away with QIR since why use QIR instead of IP when minimum contacts have to be established anyway.

Does Quasi in Rem still exist?- What would you pick between QIR and IP? Depends on value of property in QIR. - Cases involving property? Yes but same standard so why?

o Maybe Defendant is absent – cannot be found – QIR may be useful. o Shaffer is only about the second step (constitutionality) of the two-step question – the long

arm statute might not reach as far as the constitution permits – you might want to use QIR to get jurisdiction.

Jurisdiction Over Presence

Jurisdiction may be exercised over an individual by virtue of his presence within the forum state. That is, even if the individual is an out-of-state resident who comes into the forum state only briefly, personal jurisdiction over him may be gotten as long as service was made on him while he was in the forum state.

Illustrative case:

Burnham v. Superior Court, SCOTUS 1990 Facts: D and his wife, P, separate while residing in New Jersey. P moves to California with their children. D visits California on business, and stops briefly to visit the children. While D is visiting, P serves him with process in a California suit for divorce. D never visits the state again. Disputes process on basis of “no minimum contacts.” Held, California can constitutionally assert personal jurisdiction over D based on his

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presence in the state at the time of service, even though that presence was brief, and even though D had virtually no other contacts with the state. Scalia v. Brennan discourse on pages 180-191Takeaway: Long discussion, but in person service valid because of traditional notions of fair play and justice (tradition key word for Scalia), and because (Brennan) ∆ availed himself to California’s laws and protections, travel is easy etc. Voluntary presence enough to establish PJ.

Jurisdiction by Consent

A defendant that challenges jurisdiction in a court is then obliged to abide by the court’s ruling on that jurisdiction.

Insurance Corp. of Ireland v. CBG, SCOTUS 1982Facts: CBG sued multiple foreign insurance companies in federal court in PA for failure to pay insurance. The insurance companies contested jurisdiction. CBG attempted to use discovery to establish jurisdiction but the companies refused to produce documents. The court issued a sanction consisting of presumed jurisdiction due to failure to produce documents. Held. SCOTUS ruled that the insurance companies were subject to jurisdiction since they challenged jurisdiction in the court and pursuant to their failure to provide the required discovery were now obliged to abide by the court’s ruling of jurisdiction. Takeaway: PJ can be waived by consent. 1. If the court rules there is PJ and 2. If the ∆ fails to raise an objection to PJ in the answer to the initial motion under federal rule 12.

Jurisdiction by Registration in State

SCOTUS has not resolved this issue and some states rule that foreign corporations that register to do business in a state are amenable to suit there despite maybe not meeting minimum contacts requirements (South Carolina) yet others have ruled that registration to do business and appointment of an agent to for service of process is enough for general jurisdiction (Minnesota).

Jurisdiction Consent by Contract

Bremen v. Zapata Off-Shore Co. SCOTUS 1972 Facts: The two companies entered a contract saying all disputes would be settled in the London Court of Justice. Zapata commenced suit in federal court in FL. Held. SCOTUS ruled that must respect international laws and terms of contracts and suit should be settled in London. Takeaway: Will give much weight to forum selection clause, especially in international disputes. (Also see Burger King 1985).

Carnival Cruise v. Shute, SCOTUS 1991Facts: brought suit in WA when she slipped and fell on a cruise. Cruise tickets had a forum selection πclause saying all suits have to be litigated in FL. Held. SCOTUS did not consider minimum contacts and ruled that suit could not be brought in FL due to the selection clause as 1. The cruise line has special interest in limiting forums and ex ante forum selection clauses save everybody time and money. Takeaway: Will give much weight to forum selection clauses even in the absence of minimum contacts.

Jurisdictional reach of Federal Courts (Service of Process - Rule 4, Supp pp. 16)

Rule 4(k)(1)(A) authorizing the federal court to piggyback on the long arm statute of the state it sits in.

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Rule 4(k)(1)(B) special service rule that allows additional parties to an already pending action to be served if they reside within a 100 miles of where the court sits. Rule 4(k)(1)(C) permits service when authorized by a federal statute Rule 4(k)(2) federal long-arm statute that establishes PJ, for a federal law claim, where the ∆ cannot be reached by long arm statute of any state. Step 1. PJ in any state? Step 2. Contacts with US satisfy due process?Rule 4(n) jurisdiction by attaching any form of property, even intangible (Page 198 note)

Challenging Jurisdiction

There are three types of appearance:

General: submitting to jurisdiction, to defend the merits of the law suit. Special: way to appear without subjecting yourself to service of process. Only to challenge jurisdiction. Limited: Only in quasi in rem – would defend on merits but would NOT subject himself to in personam jurisdiction. If the property was worth only $1,000 (and the suit was for $10K). Come and fight only the $1000 on it’s merits. They can’t come after you in the same suit for the rest of the $9K. Collateral attack on PJ: Can be made if you don’t show up but not when you show up and lose on a challenge to PJ

Rule 12 (Supp. pp. 43): A party must raise a jurisdiction issue before any other proceedings occur. If they do not do so, they identify themselves as amenable to the court’s jurisdiction, and the defendant’s right to question jurisdiction in the future is then waived.

III. SERVICE OF PROCESS

Two step test for service of process:1. Authorized by Statute or rule?2. If yes, (2) Is it constitutional?

Notice generally: Even if the court has authority to judge the dispute between the parties or over the property before it (covered in the above sections), the court may not proceed unless D received adequate notice of the case against him.

Reasonableness test: In order for D to have received adequate notice, it is not necessary that he actually have learned of the suit. Rather, the procedures used to alert him must have been reasonably likely to inform him, even if they actually failed to do so. Example: Leaving with wife at home.

Notice Mantra “Reasonably calculated, under the circumstances, to give actual notice.”

Mullane v. Central Hanover Bank and Trust, SCOTUS 1950Facts: New York state passed Section 100 saying that small trusts could be consolidated into one large fund for the purposes of investment. The sued saying that the publication notice provisions during π“settlement” of the accounts were inadequate under due process and would provide no rights to the benes against the trustee for mismanagement. Held. SCOTUS ruled that notice by publication usually not good enough, but okay for 1. Beneficiaries whose ID/whereabouts are unknown (might not have been appointed yet) 2. Conjectural beneficiaries (beneficiaries if somebody else dies). Those who are known at

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present must get at least mail. Enough of them that even if MOST get service, the interests of all will be protected. They all want the same/similar things.Takeaway: Notice must be reasonably calculated, under the circumstances to reasonably convey the required information and afford reasonable time to make appearance/respond.

National Equipment Rental v. Szukhent, SCOTUS 1964Facts: sued Szukhent and filed notice with the agent designated by both parties in lease, wife of ’s π πofficer. Szukhent said service not valid under Fed. Rule 4(e)(2)(C). Held. SCOTUS found ∆ was given prompt notice, and her authority was so narrow the conflict of interest didn’t come up. ∆ and have πequal interest in service.Takeaway: If notice is served upon an agreed upon agent, and notice is given promptly, notice is valid.

Individual ∆ Rules: Service on an individual (Rule 4(e)) may be made in any of several ways: a. Personal (Rule 4(e)(2)): By serving him personally; b. Substitute (Rule 4(e)(2)): By handing the summons and complaint to a person of "suitable age and discretion" residing at ∆’s residence; c. Agent (Rule 4(e)(1)): By serving an agent appointed or designated by law to receive process. (Example: Many states designate the Director of Motor Vehicles as the agent to receive process in suits involving car accidents); d. Local state law: By serving ∆ in the manner provided by either (Rule 4(e)(1)):

(1) the law of the state where the district court sits, if that state has such a provision, or (2) the law of the state where the person is being served. (Example: brings an action πagainst ∆, a resident of California, in New Jersey federal court, and wishes to serve him by certified mail. Service will be possible if either the courts of New Jersey or California allow certified-mail service.)

Corporation ∆ Rules: Service on a corporation may be made by leaving the papers with an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive process for the corporation. FRCP 4(h)(1).

a. Local state law: As with individuals, service on a corporation may also be made in the manner provided by the local law of

(1) the state where the action is pending or (2) the state where the service is made. FRCP 4(h)(1),first sentence.

Waiver of service: Rule 4(d) allows plaintiff to in effect serve the summons and complaint by mail, provided that the defendant cooperates. mails to ∆ a π "request for waiver of service"; if ∆ agrees, no actual in-person service is needed. Applied to both individuals and corporations.

Incentives: ∆ is free to refuse to grant the waiver, in which case must serve the summons by theπ in-person methods described above. But, if ∆ refuses the waiver, the court will impose the costs subsequently incurred by in effecting service on ∆ unless "good cause" is shown for ∆’s refusal. π(FRCP 4(d)(2), last sentence.)

Notes: Some state rules and federal rules allow an employee of sufficiently high placement, who has the

knowledge of what to do with summons to be served, instead of/along with the “designated” official, if any.

Appropriateness of notice is more important than actual notice – not required to make inhuman efforts for notice.

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Publication only okay for unknown/conjectural people. Waiver may not be returned if statute of limitations is running out. Reasons to comply with service of process statutes:

o Don’t want to invite disputes, way to minimize disputes about notice. o Similarly suited parties should be treated equitably. o Mere fact of actual notice doesn’t guarantee timely notice – complying with rules more

likely to give not just actual notice but also timely notice. o Would be invitation for the ∆s to just not show up when not served properly.

IV. SUBJECT MATTER JURSIDICTION

Diversity Jurisdiction

Mas v. Perry, 5th Circuit, 1974Facts: ∆ spying on husband (French) and wife (from MS) in LA where they were grad. assistants. Suit in federal court due to diversity. ∆ says no diversity. Held. There is diversity, husband is French so alienage jurisdiction and wife’s domicile is still MS since she moved to IL temporarily, in LA temporarily and not returning to MS but hasn’t chosen a new permanent domicile. Takeaway: Domicile doesn’t change till new domicile is established. Even if old one is repudiated.

Rules that govern Diversity Jurisdiction

1. Complete Diversity §1332 (However, the courts have said this is not a constitutional requirement. If congress wants to change the statute to allow for minimum diversity it can, but it hasn’t).

2. Citizenship a. Individual: Domicile – determined largely by state of mind – intention to leave or stay long

term can create or destroy domicile. It cannot be evaded or created just by verbal testimony – there has be proof of roots or no roots.

b. Corporation: 1332(c)(1)- Citizenship at most domiciled where Inc. and PPB (“Nerve center”). c. Unincorporated Associates: Partnerships, labor unions, etc. – Determined by Citizenship of

all of the Members. e.g. A law firm is a citizen of all the states it’s partners are citizens of. d. Representative Actions: One person files a suit on somebody else’s behalf – 1332(c)(2)

Citizenship of the representative party is the citizenship. Still rule of class action rule. Citizenship of the represented party is the citizenship for executors, infants and

incompetence.3. Citizenship that matters is the citizenship at the time suit was filed. It’s NOT “at the time of the claim inducing event” because not all events are one day – some are continuous.

Amount in Controversy

AFA Tours v. Whitechurch, 2nd Circuit, 1991Facts: Tour guide from decided to steal list of customers and try to start own agency. sought damagesπ π of $50K and punitive damages of $250K. SJ for ∆ based on not meeting amount in controversy. Held. Court failed to give way to show its amount was in good faith and failed to apply standard for both πactual damages and punitive damages.Takeaway: amount must be taken in good faith. It must be a legal certainty that not in good faithπ to show that amount in controversy is not appropriate. Punitive damages to be added.

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Rules that govern Amount in Controversy

1. Dollar amount - Good faith/unless it can be proven with legal certainty that it is not a good faith number. 2. Injunctive relief –

a. What is the injunction worth in money?b. To whom should we calculate the cost or the value of the plaintiff? Also have to look at ∆’s loss.

3. Aggregation a. One v one ∆ - ’s claim can be aggregated for all claims even if they’re unrelated. π πb. Multiple s cannot aggregate claims unless there is a “common and undivided interest” – if one π π

did not collect the other parties would get more. c. Two s who jointly own property etc. – the claims can be aggregated. Because if one died the π

other would get it all anyway. d. One against two separate ∆’s – one is 80K and the other is 30K then the 30K gets severed and π

sent to state court. e. Joint and Several Liability – $80K against multiple ∆ will meet threshold.

Federal Question Jurisdiction

The Constitution gives the federal courts authority to hear "federal question" cases. More precisely, under 28 U.S.C. §1331, the federal courts have jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States."

Federal claim: There is no precise definition of a case "arising under" the Constitution or laws of the United States. But in the vast majority of cases, the reason there is a federal question is that federal law is the source of the plaintiff’s claim. (Examples: A claim of copyright infringement, trademark infringement or patent infringement raises a federal question, because in each of these situations, a federal statute – the federal copyright statute, trademark statute or patent statute – is the source of the right the plaintiff is asserting.)

Osborn v. Bank of United States, SCOTUS 1824Facts: Bank of United States, alleged that the tax being collected by OH was unconstitutional. Lower πfederal court granted temporary injunction but OH seized tax anyway and said court lacked SMJ. Held. SCOTUS held that the act of congress that allowed the bank to sue in federal court was in question, therefore the question of whether congress act was legitimate itself was of a federal nature and therefore gave the federal court SMJ. Takeaway: If the primary ingredient/question is federal or constitutional in nature the federal courts have SMJ.

Louisville & National Railroad v. Mottley, SCOTUS 1908Facts: brought suit since the ∆ terminated lifetime passes based on a law passed by Congress that πterminated free transportation. ∆ argued lack of SMJ. Held. Dismissed for lack of SMJ. A suit arises under the United States Constitution and laws of the United States only when the plaintiff’s statement of his own cause of action shows that it is based upon those laws or the Constitution. It is not enough for a plaintiff to allege an anticipated defense to his cause of action and assert that the defense is invalidated by some provision of the United States ConstitutionTakeaway: The ’s complain itself must be about a federal law or constitutional in nature – π“original cause.” Cannot bring suit based on the fact that the anticipated defense will be based on federal law or constitution.

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From Mottley: Well-Pleaded Complaint Rule : The federal question must be integral to ’s cause of πaction, as revealed by ’s complaint. It does not suffice for federal question jurisdiction that anticipates π πa defense based on a federal statute, or even that ∆’s answer does in fact raise a federal question.

V. MULTIPLE CLAIMS AND PARTIES – JOINDER AND JURSIDICTION

JOINDER

Claim Joinder – ability of litigant to join together multiple claims in one law suit.

Rule 18 (Page 59 of Supplement) – Joinder of Claims

One may join all claims against an opposing party This is PERMISSIVE (may join) No requirement for claims to be related. How to not confuse the jury?

o Jury instructionso Bifurcate the trial

Atmospherically makes ∆ look worse. Claims can be added by amendment. Why is it not mandatory to join?

o If the claim before was even a little bit related the would not be able to bring the claim πagain.

o ∆ to a lawsuit doesn’t choose to bring law suit, doesn’t have rights of being a - choosing πjurisdiction, venue etc. – now has to bring all claims against without having rights of a π π

o Jurisdiction issues may arise. Turns out it is kind of mandatory to join all “related” claims – Claim Preclusion. Can’t recover again

under Res Judicata. It’s just not in the FRCP.

Rule 20 (Page 62 of Supplement) – Permissive Joinder of Parties

s can join togetherπ on the left side of v. or can join ∆s on the right side of v. if the claims they are asserting transpire from the same

o Transaction or occurrence o Common question of law or fact

Permissive

Rule 21 (Page 63 of Supplement) – Misjoinder or Non-joinder of Parties

Misjoinder or non-joinder is not grounds for dismissing an action.

Rule 42 (Page 122 of Supplement) – Consolidation; Separate Trials

Courts may order a consolidation or separation of trials

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Rule 13 (Page 48 of Supplement) - Counterclaim and Cross Claim

1. Counterclaim: Claim against an opposing party (opposite side of v.) who has already asserted a claim against you. When the ∆ asserts a counterclaim, the ∆ is acting like a for that claim. π

Compulsory Counterclaimo Under Section 13(a) a ∆ must bring any counterclaim that:

Arises out of the same transaction and occurrence that is the subject matter of the opposing party’s claim

Don’t HAVE to bring a counterclaim, just waive the right to bring it later if you don’t.

Permissive Counterclaim o Under Section 13(b) a pleading may state as a counterclaim against an opposing party that

is not compulsory or not related.

What is the same transaction and occurrence? o A claim that “logically” is so related to the claim over which original jurisdiction exists as to

form one claim or controversy. o Interest of judicial economy outweighs the interests of the ∆.

2. Crossclaim Rule 13 (g): Claim against a coparty (same side of the v.)

A claim against a co-party is allowed as long as it arises from the same transaction or occurrence as long as it is the subject matter of another claim in the case (this can be the original subject matter or a counterclaim).

If it’s not the same T&O then it cannot be brought.

Rule 14 (Page 50 of Supplement) – Third-Party Practice

P v. D (D – 3rd Party Plaintiff- can “implead” R – 3rd party defendant). Has to be a question about derivate liability. Only applies to new parties

Situations where Joinder is REQUIRED Usually not required but sometimes it is. E.g. When a bank is sitting on money but doesn’t know who it belongs to, it will interplead all the

interested parties and let them “fight it out.” The bank does not want a situation where A wins and C comes along and also wins and the bank will have to pay twice.

Rule 19 (Page 60 of Supplement) – Required Joinder of Parties A party must be joint if

o Court cannot grant complete relief in it’s absence

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o Person claims an interest and disposing off the case without the person may: Impede the person’s ability to protect the interest or Leave the existing party open to risk of multiple obligations

Have to ask whether it is feasible to join the new partyo Will they destroy SMJ? o Is there PJ?

If it’s not feasible, can the suit continue without the party?

JURISDICTION OVER SUPPLEMENTAL CLAIMS AND PARTIES

United Mine Workers of America v. Gibbs, SCOTUS 1966

Pendant jurisdiction exists whenever there is a “claim arising under Federal Law” - the Constitution, the laws of the US and treaties made and the relationship between that claim and the state claims made in the compliant permits the conclusion that the entire action before the court comprises but one constitutional case.

o The federal claim must have substance sufficient to confer SMJ on the courto The state and federal claims must arise from a Common Nucleus of Operative Facto Such that would ordinarily be expected to be tried together

Justification? If not allowed to join then options are to bring one claim in one court, two concurrent lawsuits in two courts, or both in state court (which may be prejudicial).

Brennan says Fed. Courts should exercise discretion in hearing related state claims (Judicial economy should be the consideration).

When to dismisso If federal claims dismissed, state claims should be dismissed too. o If state claims dominate, should be left to state. o If jury confusion would result… should be severed.

Section 42 USC 1983 (Important statute) – s can sue state officials for violating their federal rights πunder the “color of state law.”

Aldinger v. Howard, SCOTUS 1976 WA State citizen brought a Fed. Civil Rights claim against several state officials, and also a state

claim against Spokane County, and tried to satisfy Gibbs by saying they both arose from a CNOF. SCOTUS said you can’t join two different ∆s against whom you have two different claims under

one action.

Finley v. United States, SCOTUS 1989 brought a federal claim against the United States under Federal Torts Claim Act (federal π

question jurisdiction) and a state law claim against a power company (not diverse). Court could not assert pendant jurisdiction over another ∆ Unless congress specifically confers SMJ over cases like these, courts should not hear cases. FTCA claims can only be brought in federal court so will have to bring two different suits or dropπ

one.

Owen Equipment v. Kroeger, SCOTUS 1978 Kroeger (IA) brought a diversity action against Omaha Power – OPPD (NE). OPPD impleaded Owen under Rule 14.

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Kroeger amends claim to add Owens (as of now NE) who then turns out to be an IA corporation destroying diversity. OPPD has been dismissed by this point.

Kroeger could not assert claim against Owen as it would be a “circumvention” of the complete diversity requirement.

In impleading Owen, courts were applying a doctrine called Ancillary Jurisdiction – which existed to allow federal courts to have SMJ over cross claims, impleaders etc. as long as those claims had the appropriate factual relationships.

Pendent jurisdiction as there to give jurisdiction to allow to add additional claimsπ . (as opposed to ancillary which was for cross, counter, impleaders etc.)

Rule 14 claims also fall under Ancillary Jurisdiction as long as brought by ∆ The ORIGINAL PLAINTIFF however CANNOT bring in a 3rd party ∆.

Rule 13(a): Must join if same T&ORule 13(b): MAY join claims from different T&ORule 13(g): MAY cross claim if same T&O

Hypo:

P (WA) v. M(WA)P sues M in federal court under federal anti-trustM counter claims against P under state law for breach of contract, same CNOFAllowed? Yes. BECAUSE - Ancillary jurisdiction under compulsory counterclaims OKAY but not under permissive counterclaims.

USC 28 Section 1367 (Page 256 of Supplement) – Supplemental Jurisdiction

Part (a) - When the district court has original jurisdiction over a case the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action that they form part of the same case or controversy. “As long as it’s constitutional – it’s under the supplemental jurisdiction of the court.”

o Gibbs would be decided the same way. o Finley would be overruled by this sentence – “Such supplemental jurisdiction shall include

claims that involve the joinder or intervention of additional parties.” Part (b) - Limits the scope of (a) – by saying supplemental jurisdiction not allowed where it

destroys complete diversity. “If the basis of SMJ is complete diversity, no supplemental jurisdiction over claims BY THE PLAINTIFF over DEFENDANTS made parties under Rule 14 etc..”

Part (c) – Is Gibbs codified. In certain cases the district court can decline to hear a state claim – πcan refile state claims in state court – or dismiss one claim – or take up both claims in state court.

Exxon Mobil v. Allappattah Services, Inc., SCOTUS 2005

1000 Exxon dealers filed a class action suit but each one did not meet the AIC requirements. Before Section 1367 came into law, courts had held that each had to meet the AIC requirement πfor diversity.

Court held that - As long as there is one claim by plaintiff over which the district court has original SMJ, it can assert supplemental jurisdiction over all the other claims of plaintiffs

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who do not meet AIC requirements because 1367 (b) bars claims against DEFENDANTS made party by Rule 20, not PLAINTIFFs.

Justification: o The very reason for having diversity jurisdiction is to avoid bias, and both parties are

affected when diversity is destroyed. o AIC is completely different from Diversity.o The presence of non-diverse parties defeats the justification for a federal forum. o Congress was trying to avoid, the destruction of complete diversity.

HOW TO GO THROUGH PROBLEMS LIKE THESE, IS THERE SMJ?

(a) Joinder proper?(b) Independent basis for SMJ?(c) Supplemental Jurisdiction

1367 (a)? 1367 (b) issues?

P (MD) and D & R (VA) get into an accident.

(1) P(MD) v. D(VA) for $100K Complete diversity, AIC met

(2) P (MD) v. D(VA) D wants to counter claim $25K

(a) Yes, okay under Rule 13(a), compulsory counterclaim. Both arise from same T&O. (b) No independent basis of SMJ (no AIC). (c) Supplemental jurisdiction

o Okay, under Section 1367 (a) o Okay, under Section 1367 (b)

Appropriately before the court.

(3) D impleads R for contribution. P(MD) v. D(VA) R(VA)

(a) Yes, okay under Rule 14 impleader claim. (b) No independent basis for SMJ (No complete diversity)(c) Supplemental jurisdiction

o Okay, under 1367 (a) – same CNOF. o Okay, under 1367 (b) (because not made party by plaintiff).

Appropriately before court.

(4) After D impleads R for contribution.P also brings a claim against R for $100K

(a) Rule 14

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(b) Independent basis of SMJ (P and R from different states). (c) NO REASON FOR SUPPLEMENTAL JURIS. because have independent basis for SMJ.

Appropriately before court.

(5) P(MD) v. D(VA) implead R(VA) P also brings claim against R for $50K.

(a) Rue 14(b) No Independent SMJ (No AIC) (c) Supplemental jurisdiction

o Okay, under 1367 (a) – same CNOF. o Not okay, under 1367 (b) – when Diversity juris. is the basis for original claim, no

supplemental jurisdiction under 1367 (a) by persons made party under Rule 14. Not appropriately before court. Codifies Kroeger.

(6) P(MD) v. D(VA) implead R(MD) R wants to assert claim against P

(a) Rule 14 – authorizes claims by impleaded 3rd party ∆ against π(b) No Independent SMJ (No diversity) (c) Supplemental jurisdiction

o Okay, under 1367 (a) – same CNOF and joinder of new parties. o Okay, under 1367 (b) – Yes, since it’s not the is not the one making the claim. π

Appropriately, in front of court.

(7) P(MD) v. D(VA) implead R(MD) R wants to assert claim against P P asserts claim back against R

(a) Rule 14 – authorizes claims by against impleaded 3rd party ∆. π Also might be a “compulsory counterclaim” *italicized because it’s not lost in case the court doesn’t have SMJ over it. (b) No Independent SMJ (No diversity, no FQ) (c) Supplemental jurisdiction

o Okay, under 1367 (a) – same CNOF and joinder of new parties. o NOT okay, under 1367 (b) – since it’s the asserting the claim. π

Not appropriately, in front of court.

(8) P(MD) had Q(MD) in car. Exxon Case P (MD) D(VA) $100K Q (MD) D(VA) $25K

(a) Rule 20 – Same T&O – permissive (b) No Independent SMJ (No AIC) (c) Supplemental jurisdiction

o Okay, under 1367 (a) – same CNOF and joinder of new parties. o Okay, under 1367 (b) – since it’s not a claim by a against a defendant made party π

under rule 20. Appropriately in front of court.

(9) P (MD) v. D(VA) for 100K Q (VA) also wants to assert claim against D for $100K

(a) Rule 20 – Same T&O – permissive

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(b) No Independent SMJ (No diversity) (c) Supplemental jurisdiction

o NOT okay, under 1367 (a) – The presence of non-diverse parties defeats the justification for a federal forum.

o Okay, under 1367 (b) – since it’s not a claim by a against a defendant made party πunder rule 20.

Not appropriately in front of court.

(10) P(MD) v. D(VA) for 100KP also wants to sue R(VA) for $100KQ (MD) wants to join P to sue the ∆s for $25K

(a) Rule 20 – Same T&O – permissive (b) No Independent SMJ (No AIC for Q) (c) Supplemental jurisdiction

o Yes, OKAY, under 1367 (a) – There is a civil action over which the district court has original jurisdiction and Qs presence does not destroy diversity, and CNOF.

o NOT OKAY, under 1367 (b) – No claims by plaintiff’s under defendants made party under Rule 20.

Not appropriately in front of court, no supplemental jurisdiction.

(11) P(MD) v. D(VA) for $55KQ(MD) wants to sue D also. For $25K

(a) Rule 20 – Same T&O – permissive (b) No Independent SMJ (No AIC) (c) Supplemental jurisdiction

o No, under 1367 (a) – There is a no civil action over which the district court has original jurisdiction.

o Okay, under 1367 (b) – No claims by plaintiff’s under persons made party under Rule 20.

Not appropriately in front of court, no civil action with original jurisdiction – cannot add claims together.

(12) P(MD) and Q(MD) v. D(VA) for $100K each. D counterclaim against P. P impleads Q (plaintiff’s side). (Crossclaim under Rule 13g).

(a) Rule 13g – Permissive Crossclaim(b) No Independent SMJ (No Diversity) (c) Supplemental jurisdiction

o Yes, under 1367 (a) – There is a civil action over which the district court has original jurisdiction.

o NO, under 1367 (b) – No claims by plaintiff’s under persons made party under Rule 20.

VI. REMOVAL AND VENUE

REMOVAL

Removal permits a ∆ sued in state court to change the forum to federal court.

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Why? Local bias, federal question cases, etc.

Rules for Removal (Section 1441, Supplement pp. 265; 1446-7, Supplement pp. 269-71)

1. Only defendants can remove cases 1446(a)2. All ∆s must agree 1446(b)(2)(A)3. Original Jurisdiction – it cannot be removed if under the Well-Pleaded complaint rule the ’s original πcomplaint could not have been brought in federal court. 1441(a)Exceptions

“Artful pleading” by (Bright case on 347, sued in state court saying employer issued a paycheck πless than contractually required, ∆ removed to federal because it was a question of federal tax law.)

cannot defeat removal by joining defendants who would destroy diversityπ . Cannot add fictitious ∆s who would defeat diversity. Cannot use fraud to add ∆s to defeat diversity. 1441(b)

Preemption – Federal law displaces state law; Congress wanted to be the only one regulating this; Complete Preemption – particular area of the law has become completely federal – not only is all

law federal, all claims arising under that area can be removed to federal court. 3. If the only basis is diversity

Then the ∆ cannot remove if sued in state of citizenship. ∆ can remove only if sued out of the state of citizenship. 1441(b)(2)

4. Vertical Removal Removal has to be to a federal court of the same state

5. Unrelated state + federal claims in one suit. 1441(c) Can be removed but then the federal court has to sever the state claim and send that back to

state court. Removal Hypos:

(1) P(MD) v. D(VA)D counterclaim P (under Federal anti-trust laws) Can P remove this case to federal court?

No, only the defendant can removed.

(2) P(MD) v. D(MD) in state courtD defends against P using federal law. Can ∆ remove?

Section 1441(a) ∆ may move a civil action over which the district courts have ORIGINAL jurisdiction.

So No. Because original jurisdiction is the ’s complaint (in this context). Under the π Well-Pleaded complaint rule - could not have filed it in federal court. π

(3) P(NY) v. D(AL) in AL state court – Can D remove to federal court? No 1441 (b)(2)

(3) P(NY) v. D(CA) in NY state court. Can this be moved to CA Federal court? No removal is to be vertical. So has to remove to federal court in NY.

(4) P(MD) v. D(MD) Federal Claim + Unrelated State Law -- Can D remove the action to federal court?

Properly joined? Yes. One and one ∆π Under supplemental? No, CNOF.

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Under 1441 – yes can be removed to federal court, but then the federal court will have to sever the state claim and send it back down.

VENUE AND CHANGE OF VENUE

Venue Rules (Section 1391 – Venue Generally, Supplement pp. 258; 1404 – Change of Venue, Supplement pp. 262; 1406 – Cure or Waiver of Defects, Supplement pp. 273)

1. Venue 2. Transfer3. Forum non-conveniens

Bates v. C&S Adjusters, Inc., 2nd Circuit, 1992 (Incurred debt in PA, moved to NY, collection agency mailed to old PA address, mail forwarded to NY).

, Bates filed in the Western District of NY. Argued suit was okay under 1391(b)(2) as a π“substantial part of the events” e.g. the receiving of letter happened there.

1391(b)(2) would have been satisfied in PA also. A substantial part not THE subs. part. 1391(c)(2) resides anywhere they would be subject to court’s PJ – waived PJ in NY.

o Rule is that you have to raise PJ at the threshold – in your answer. If you’re going to object to venue in the answer then you have to raise PJ at the same time.

Since PJ was waived requirements of venue were satisfied. Usually, PJ more restrictive than venue statutes – some cases where you can have PJ but no

venue and vice versa. 1391(b)(3) is a fall back venue – IF nowhere else then venue is okay where there is PJ.

When can defendants ask for transfer to another Federal System?

Hoffman v. Blaski, SCOTUS 1960

TX venue is okay under 1391(b)(1) and (2) – TX is residence of Howell and all the infringement of patents is happening in TX.

Howell probably wanted to move to IL because the 7th circuit probably had better law for the ∆s. That’s probably why the wanted to litigate in 5th Circuit.π

SCOTUS Created 2 step test for transfer: (1) Might have been brought/consent (2) Convenience/Justice

SCOTUS says under this test the case should not have been moved to IL. This lawsuit could not “have been brought” (absent consent to PJ) in the federal district of IL b/c

no personal jurisdiction in IL and no venue in IL. Defendants can move to transfer any place they want, but plaintiffs can’t file anywhere they want.

– that would be kind of unfair and render the half statute unfair. After Hoffman, every motion to transfer venue – requires the district court to analyze

whether there would be appropriate PJ or venue in the place to be moved (absent consent for both) – also in the interest of justice and convenience of the parties.

Forum Non Conveniens – Remedy of Last Resort only when the brought suit in particularly πinappropriate forum

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Piper Aircraft v. Reyno, SCOTUS 1981 Plane manufactured by Piper Aircraft, a PA corporation, crashed in Scotland. Parts of the airplane were manufactured by Hartzell, an OH corp. Reyno was appointed administrator for the families of five UK citizens involved in a plane crash in their suit against the defendants for negligence and strict liability. Separate suit happening in UK.

Suit removed to district court in CA and then transferred to dist. court in PA under 1404, Hartzell also okay with it because it was amenable to PJ in PA.

o Inter system transfer device (changes from one system to another – state to federal, one state court to a different state court, American court to foreign court.).

o 1404 is an intra-system change (within same system e.g. Federal courts). ∆s move to dismiss on grounds of forum non conveniens. What is the “Balancing Test”?

o “If the remedy provided by the alternate forum is so clearly inadequate or unsatisfactory that it is no remedy at all” then the court cannot send to another forum.

Also discussion of Public and Private Interestso Private factors

Relative ease of access to sources of proof, Availability of compulsory process for the attendance of unwilling witnesses Cost of attendance of witnesses, Other practical matters related to making the trial easy, expeditious, and

inexpensive.o Public factors

Administrative difficulties of the courts Interest in having local controversies adjudicated at home, Familiarity with the law governing the action- conflict of laws - application of

foreign law Unfairness of burdening citizens in an unrelated forum with jury duty.

VII. PLEADING

Rule 7 – Pleadings Allowed, Form of Motions and Other Papers, Supplement pp. 29

Rule 8 – General Rules of Pleading, Supplement pp. 31

Rule 9 – Pleading Special Matters, Supplement pp. 36

Rule 12 – Defenses and Objections, Supplement pp. 42-45

Under Federal Rule – “Notice Pleading” – Function is to: - Notice- Fact revelation is regulated by the Discovery phase of trial. - Issue formulation – what issues are part of the controversy – Case Management and Summary

Judgment - Screening (out sham and frivolous claims) – Integrity in pleading – Rule 11 and Rule 12.

Rule 7 – pleadings shall include a complaint and an answer, and if the court requires one, then a reply (if a counterclaim under rule 13).

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Usually only two documents— Plaintiff’s complaint and defendants answer. This happens over again each time a party is joined or a counter claim or something.

Defendant can file motion to dismiss before an answer. - Can be related to SMJ- Or “you cannot win” on this claim.

THE COMPLAINT

Rule 8(a) governs substantive requirement for the complaints. - Short and plain statement of jurisdiction- Short and plain statement of claim- Demand for relief – Form 11

Demand for ReliefRule 54(c) – the can recover anything he is entitled to – regardless of what the claim is for. If can π πshow $200k of damage, even if the claim was for 50K.

Why have demand for relief then?- To satisfy AIC- To use to see if ∆ wants to settle- If the claim is very small, the ∆ could default and let them have small relief. - Availability to jury trial is usually not allowed for injunctive relief. Only when money is allowed.

Short and Plain Statement of Claim Showing that the is Entitled to Reliefπ

Dioguardi v. Durning, 2nd Cir. 1944 Extreme example of making an unclear statement and how generous Rule 8 was. π

Why make it easy to get to court?- Give all people access to the legal systems. - If you can’t get to discovery without very specific facts, then your case will never get to discovery

because powerful ∆s may have all the facts in their control.

Why not make it easy to get to court?- Large ∆s are likely to settle even if they know the won’t win on the merits b/c it’s cheaper than π

discovery. - Numerous lawsuits will be brought just for their settlement value.

Conley v. Gibson, SCOTUS 1957 A complaint should not be dismissed under Rule 12 b(6) unless it appears beyond doubt that the π

can prove “no set of facts” in support of his claim which would entitle him to relief. Not super literal but a very generous standard.

Swierkiewicz v. Sorema NA, SCOTUS 2002 Employment discrimination on the basis of age and ethnicity

Meeting all the requirements of a Prima Facie case is an evidentiary standard not a pleading requirement.

Bell Atlantic Corp. v. Twombly, SCOTUS 2007

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CLECs allege that the ILECs carved out the country between themselves. Conscious parallelism was not enough to show a violation of Sherman. Rule 12(b)(6) attacks the merits of the case, motion to dismiss – not legally sufficient to proceed

o No cognizable claim o OR cognizable claim but no set of facts to support the allegation

Court says that the complaint is not legally sufficient to show an agreement between the ∆s – didπ not make any factual allegations to support its claim.

Conley too broad as applying the “no set of facts” rule would basically mean any claim could survive as long as there were theoretically some facts to support recovery.

NEW STANDARD – “Once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint.”

Court worried about the tremendous cost of litigation and discovery – which is hard to control with “case management”

Ashcroft v. Iqbal, SCOTUS 2009 Detained and subjected to harsh conditions based solely on account of his religion, race, and or national πorigin and for no legitimate penological interest.

Court says the allegations are just legal conclusions. What remains is not enough to plausibly show that detentions were made based solely on

race/national origin – policy to target people who may have involvement with 9/11 will obviously target a disparate amount of Arabs and Muslims even though the purpose was not to target them.

needs to name specific facts that Mueller and Ashcroft knew – produce a document or πsomething.

Dissent o Twombly was a case where the conduct could also have been legal. o However, in this case everybody has agreed detaining people based on their race is

unconstitutional Problems with Plausibility Standard

o People don’t have access to the kinds of information the court wants to make cases against powerful ∆s.

o Plausibility is a different standard from person to person. o The very inquiry of plausibility is like trying a case on it’s merits at the outset.

Standard of Pleading – Post Twombly and Iqbal Allegations of facts that are sufficiently plausible to demonstrate that the is entitled to relief. π Discount legal conclusions – seems to invalidate Form 11 In measuring it, you need to know about the substantive law

THE ANSWER

Three Possible Responses: 1. Default 2. Motion to dismiss (Rule 12)3. Answer (Rule 8)

Except for a Motion to Dismiss for Subject Matter Jurisdiction all other motions have to be brought at the outset of the complaint.

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Two Arguments under Rule 12(b)(6) No legally cognizable claim OR cognizable claim but no set of facts to support the allegation

Rule 12 has two other bases for attacking a complaint. 12(e) – Motion for a more definite statement 12(f) – Remove any irrelevant material

Motions to dismiss are always filed at the outset under 12(b)(6) since it stops the clock and requires plaintiff to respond.

Other option is the “Answer” An allegation by allegation response to the complaint Include any affirmative defenses and compulsory counterclaims

Affirmative Defenses

Not denials, excuses or avoidances for the ’s claim. It offers some other reason why the plaintiff πcannot recover.

Hypo - P v. D for breach of contract o D could say, - “Never signed contract.” o D could also say “K was induced by fraud.” – Affirmative Defense. o Contributory negligence (affirmative defense).

If the defense fails to raise an affirmative defense it is waived – defense might not be available later.

Substantive law: Fraud or misrepresentation is an affirmative defense. The answer, at a minimum is a place to raise affirmative defenses. Also respond to allegation:

o Admit ito Deny ito Insufficient information to respond to information – limited by the more general

requirement of candor. 21 days after service to respond (unless service was waived in which case 60 days). General denials are frowned upon Rule 8(b)(3) – general denial cannot be used unless the corporation wants to deny everything.

Must deny each thing specifically and admit to anything that is true.

Amendment IssuesRule 15 - Rule Amended and Supplemental Pleadings, Supplement pp. 51

A. When can you amend your pleading – Rule 15, B. Relation back

A. When can you Amend your Pleading – Rule 15(a)

(1) Rule 15(a)(1)

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A can amend π once within 21 days as a matter of course (without permission of court). After the response, 21 days to amend complaint to cure the problem. ∆ can amend once without permission of court also.

(2) Once 21 days have passed…. Rule 15(a)(2) the court should freely give leave when justice required. With leave of court (or consent), before trial Should be “Freely given” as long as not bad faith or prejudicial

Beeck v. Aquaslide Corporation, 8th Circuit 1977 Aquaslide wants to amend the response after 21 days have passed (over 6 months) to deny that

they manufactured the slide. Statute of Limitations had run by now. Court considered bad faith (none) and prejudice (court could not find prejudice against based π

only on the fact that the SoL was going to run out. It would be prejudicial to the ∆ if they weren’t allowed to defend on the merits).

How was this case different from Zelinski o No reason for the ∆ to delay. So they actually thought it was there product.

Who was at fault?o Everybody kind of screwed up.

(3) Actual or constructive amendment at trial with implied or express consent.

Moore v. Moore, D.C. Ct. App., 1978 Failure to object to evidence at trial can amount to implied consent to adjudicate of certain

questions at proceedings. Impliedly consented to child support but not to alimony. When litigating custody, also going to introduce child’s financial need – that’s constructive notice. Alimony however, even though the evidence was overlapping, is not related to child support and

the ∆ was not put on notice. Courts assume implied consent

o Other party does not consent to trialo Has fair notice that a new issue is being litigated

If evidence issued at trial that is not related to what’s going on, and you fail to object then the ∆ has constructive notice.

If the issue was not raised at the beginning of trial, but two issues are usually decided together then the court can adjudicate on both since the opposing party was on notice.

However, even if the evidence for the two things is the same, but it’s not an issue that is decided together, and the other party would not have notice, then they court does not adjudicate.

Other party can object to expressly not allow extra evidence (vigilant defendants will do this).

(4) Over an objection at trial – Rule 15(b)(1) If you’re the opposing party

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o If you don’t object to the introduction of evidence then the other party will be able to rely on evidence – implied consent

o If you do object, then the other party can just say please allow us to amend the complaint over objections.

B. Relation Back – Rule 15(c)

What happens if the tries to add a new party after the statute of limitations had run?π

This part comes in at “stage (2)” from above list, after 21 days but before trial.

Can a party amend to add another issue? If the SoL permits it, you are allowed to relate back. Same transaction and occurrence as the old timely claim, then allowed = treated as “related back”

to the original claim. Why is this allowed?

o Might not know that you had a claim until after discovery. o Reason for SOL - Evidence might fail over time, peace of mind (repose). o It’s not inconsistent with the SOL b/c the evidence is equally stale or fresh and the ∆ has

already been sued on a claim arising out of conduct, so no basis for thinking he won’t be sued and no reason to expect repose.

Under 15 (c)(1)(c) Zielinski would have been able to relate back to a different ∆ if within 120 days (Rule 4(m)) of filing of ORIGINAL suit – the ∆

(i) Received such notice of the action that it will not be prejudiced in defending on the merits; and(ii) Knew or should have known that the action would have been brought against it, but for a mistake concerning the proper party's identity. (Krupski v. Costa Crociere, SCOTUS 2010)

Would the in Beeck (Page 627) have been able to relate back to the old filing when they find the πactual defendant and want to sue them:

o No because the new ∆ would not have known within 120 days that the action would have been brought against them.

How to answer Amendment Question?

TWO inquiries under amendment question: Are you allowed to amend – within 21 days or complaint or pleading? After, with permission of

the court? Can formally or constructively amend the pleading. Is there any timing problem? Has the SOL run? Can you relate back?

o Factual relationshipo Notice to new party

Frivolous pleadings – Rule 11 – Attorney conduct Sign all paperwork Has basis in law or ought to

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Factual basis

Point of sanctions is to deter, not award other party. Safeguard period – under 11(c)(2) – if the opposing party files a rule 11 against a party – they

have 21 days to withdraw the evidence without the court knowing.

IX. CLASS ACTIONS

Hansberry v. Lee, SCOTUS 1940 A. Class Action – if signed by 95% of the homeowners then the covenant is imposed on the entire

neighborhood. Found that the covenant was valid. B. Class Action again – Lee v. Hansberry (and all the other owners who wanted to sell to blacks). The plaintiff is saying that there is Res Judicata. IL Supreme Court says yes the earlier class action decision is binding because the defines class π

action as “all current and further property owners.” SCOTUS says no, the interests of the s here were clearly not represented by the earlier suit as π

that was to enforce performance and the s are resisting performance. Can’t be the same class. π

Rule 23 – Class Actions, Supplement pp. 64

Rule 23(a) - 4 prerequisites that must be satisfied in any class action:

1. Numerosity Enough members to justify the use of the class action mechanism. Usually more than 40 yes.

Fewer than 25 then maybe just join together in an action. 2. Commonality

Efficiency and fairness – common questions of law or fact3. Adequacy

Whether the representative party adequately and fairly represents interests of absent class members

Plaintiff has to at a minimum have interests that coincide with absent class members. Somebody we trust to stand in shoes of absent class members. 23(g) – lawyer also has to have sufficient experience in class actions to handle such a suit.

4. Typicality Representatives have to be typical of those of the class. “Each class member’s claim arises from

the same course of events, and each class member makes similar legal arguments to provide the ∆’s liability”

Hypothetical Suit: Practice of firing flight attendants when they become pregnant – class action lawsuit on behalf of all current and former attendants terminated because of pregnancy.

- Enjoin the company from policy- Reinstate all fired flight attendants

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Numerosity – Yes Commonality – Yes Adequacy?

o Two sub classes Fired for being pregnant Female but not been terminated because not yet pregnant

o The current flight attendants may not want to lose their seniority which might occur from retroactive relief

o The flight attendants who don’t want to have children are actually benefitted from policy. Typicality – Kind of the same as adequacy.

Castano v. American Tobacco Co., 5th Circuit 1996, Handout Can the suit be maintained as a class action – can it be certified?

o Certification gives tremendous leverage to the to force a settlement πo Sometimes courts allow discovery just for certificationo Immediate appeal allowed for certification of class action.

A federal court can certify a class action if the requirements of 23(a) are met and can satisfy one of the requirements of 23(b)

23(b)(1) – Prejudice o (1)(A) Different suits would create different standards.

Prejudice to ∆ Usually applies mostly to injunctive relief – e.g. Voter registration

o (1)(B) Pot of money will run out. Prejudice to π

23(b)(2) – Injunctive Relief Suit. o Likely to satisfy rules of the prejudice class in 23(b)(1)(a). o Applicable conduct - ∆ has acted same way towards all absent class memberso Want ∆ to stop doing something.

23(b)(3) – Damages Class, Predominance/Superiority o All class members injured in roughly in the same way. o What state’s law applies to the claim?o Predominance - Have to show that the relied to their detriment on the π

misrepresentations. o Superiority- Might be more benefit to pursuing individual suits.

Different categories of class actions raises different questions: 32

Not uncommon for a class to satisfy multiple categories. Ultimate difference between these categories Rule 23(c)(2) – req. to notify the absent class members to allow them to opt out of a 23(b)(3)

Damages class. Why?o Injuries are not cohesive, it’s the cause that’s cohesive. o Might want to pursue an individual suit. o Notice to the class members can be really expensive.

Both other categories the judge has discretion to allow an opt out or make it binding on absent parties.

o Injuries are cohesive Jurisdictional issues:

o You have to not only satisfy all the Rule 23 rules but also all the regular jurisdictional issues etc.

Jurisdictional ConcernsAssume plaintiff from MD brings a nationwide class action in MD against AT&T (Inc. in DE with PPB in NY).

Subject Matter Jurisdiction

P(MD) v. D(NE/NY) Is there diversity?

o Citizenship in class actions is defined by the person bringing the party, named plaintiff

o Even though there are absent class members from DE or NY. Damages to the plaintiffs range from $10 to a $1K dollars to the π

o Snyder v. Harris – can’t aggregate the claims of individual plaintiffs to satisfy the AIC rules. o Is this true after Exxonn case?

In this case we can’t aggregate claims since Exxonn requires that there be original jurisdiction over at least one claim.

Section 1332(d)(2) – if there is minimal diversity and some percentage of the class members are not from the same state you can be in federal court and the sum/value is over $5MM.

More deserving of class action certification because it would never be feasible to bring a suit over a small amount.

Personal Jurisdiction

Phillips Petroleum Co. v. Shutts, SCOTUS 1985’s gave ∆s lease to drill gas on land. Suing for interest on late royalty payments. π

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Class action in Kansas state court – sent notice to all certified class members – those who opted out and undeliverables removed – Final class 28K people in all 50 states.

Did the Kansas trial court have personal jurisdiction to adjudicate the claims of absent class members not residing in Kansas?

o Yes. Absent Plaintiffs, unlike absent defendants, did not have to hire counsel or appear, are not subject to counterclaims and can opt out of the class action.

o The due process clause is not violated as to the absent Plaintiffs – to bind absent πcourt must provide minimum procedural due process protection.

Notice, and opportunity to be heard. In this situation, the absent class members did have that opportunity.

An “opt in” provision would impede the class action and would require revisions of many lawsuits.

o BASICALLY – PJ in class actions is not evaluation using “minimum contacts” test. Notice is enough with option to opt out if money damages are involved.

Should the Kansas trial court have applied to Kansas law to all transactions of the absent class members?

o There is a conflict between Kansas law and the laws of other states regarding the interest rates owed to Plaintiffs. The parties that do not reside in Kansas had no expectation that Kansas law would apply to the royalty transactions. The Court is permitted to apply the laws of various states and must exercise that authority when applying the law of the forum state would be arbitrary and unfair.

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