civil procedure gomez spring 2013

8/10/2019 Civil Procedure Gomez Spring 2013

1/82

1

Civil Procedure Outline

General Issues

FRCPnot statutes; Congress delegated authority to the Supreme Court to make statute-

like rules of procedure.

Rules Enabling Act28 U.S.C. 2072

Federal v. State Court

Jury pool

o State courtsmaller jury pool; likely to be a better representation of the local areathan a federal court.

o

Federal courtlarger jury pool drawn from a wider area (possibly from the wholestate, in less populous states). Possibly more affluent on average.

Types of cases

o Federal courts are used to hearing cases dealing with large sums of money andinvolving large corporations.

o State court judges are used to hearing local matters. They might be less likely todismiss a huge case involving large corporations, since they might want to see thiscase go to trial.

Caseloado State courts are generally more crowded. The judge might be looking for a reason

to dismiss the case easy.

Judges

o Federal court judges are more conservative on average.o State court judges tend to be more representative of the overall population.

More women, more minorities, more LGBT people.

Procedural differenceso State procedure and rules of court might be different. However, many of these are

modeled after the FRCP.


2/82

2

Jurisdiction

Definition: the power of a court to render a judgment that other courts and governmentagencies will recognize and enforce.

Constitutional sources of jurisdictional language:

o Article III establishes the federal judiciary and specifies its subject matter andpersonal jurisdiction.

Congress can often further restrict federal judicial authority.

o Article IV, 1Full Faith and Credit Clause Judgments rendered in another states court are enforceable in courts of

other states, so long as the original court had jurisdiction over the action.

o Fourteenth AmendmentDue Process Clause

Pennoyer v. Neff interpreted this clause to mean that states only hadpower over property and people who were present within the states

borders.

Personal Jurisdiction

Three distinct periods of personal jurisdiction interpretation in case law

1. 1877Pennoyer

2. 1945-1980International Shoe

3. Modern / post-1980Volkswagen; Burger King; Zell

Pennoyer v. Neff

A court only has jurisdiction over a person (in personam) if he is personally served withprocess within the territory of that state, or if he voluntarily appears in court.

o The court still has jurisdiction over the legal status and disposition of his propertywithin that state (in remjurisdiction).

o However, the court must have jurisdiction before judgment is rendered in orderfor the judgment to be valid.

An invalid judgment does not become valid just because the court later

acquires jurisdiction over the defendant.

o This notice is required by the Due Process Clause of the Fourteenth Amendment.


3/82

3

In RemJurisdiction

A court has in remjurisdiction because the defendant has property in the forum state, andbecause the state has properly attached that property beforethe lawsuit.

The property has to be related to the lawsuit (e.g. the suit is about the property)o For example, a torts claim that occurred on the defendants land in the stateo A dispute over who has title to the property.

Constructive notice is sufficient for in remjurisdiction

Full Faith and Credit Clause

A court in one state does not have to enforce a judgment from another state if that other

state did not have jurisdiction over the action.

Challenge and Waiver of Jurisdictional issues

Collateral attackafter a (default?) judgment has been entered against you, you canchallenge that judgment for lack of jurisdiction using a collateral attack.

o If the new court decides that the other court did not have jurisdiction, then thejudgment will be void.

o If not, issue preclusion will mean that the defendant is now liableo Not the ideal procedural posture

Better strategy is to file a Rule 12(b)(2) motion challenging jurisdiction

o

If the defendant does not raise the issue in a pre-answer motion, the defendantmust raise the issue in the answer, or else it is waived.

o If the defendant makes anytype of 12(b) motion, the 12(b)(2) motion must beincluded in the motion, or else the issue of personal jurisdiction will be waived.

o Need to raise the issue of personal jurisdiction as early as possible to ensure

that it is not waived.

Special appearanceo A legal fiction whereby the defendant actually appears in court in order to

challenge a personal jurisdictional issue, but has not yet voluntarilyappeared incourt for purposes of waiving personal jurisdiction challenges.

International Shoe

Whether a corporation can be sued in a given state depends on the nature and extent ofthe corporations activities (contacts) within that state.


4/82

4

Specific personal jurisdictiono If a corporation has only minimum contacts in a state, it is only subject to that

states jurisdiction for lawsuits that are related to those contacts (activities)

o Cant offend notions of fair play and substantial justice.

General personal jurisdictiono In the state where a corporation is incorporated, where it has its principal place of

business (if different from the state of incorporation), and in states where itconducts continuous and systematic activities, a corporation is subject to

personal jurisdiction for ALL lawsuits.

McGee v. ILI Co.

California court had jurisdiction over a Texas corporation for a claim on an insurancecontract, since the insured was a California resident, since the insurance certificate was

mailed to his home, and since the insured paid all his premiums by mail from California.

Because more transactions are conducted by mail, and because modern communicationand transportation make it easier for out-of-state corporations to defend an action,recently the courts have sought to expand the scope of state jurisdiction over foreigncorporations and other nonresidents.

Hanson v. Denkcla

In addition to asking whether the defendant has minimum contacts with the forum state,the court asks whether the defendant has done something to purposefully avail itself of

the privilege of conducting activities within the forum state.o Has the defendant benefitted from the laws of the forum state?

One partys unilateral communications with the out-of-state defendant are not enough to

satisfy the minimum contacts or purposeful availment tests.

Quasi in remJurisdiction

See Harris v. Balk (pp.91-92)

Gives the courts jurisdiction over non-real property present within the forum states

territory.

In Balk, the property in question was a debt owed to the defendant.

Shaffer v. Heitner

Eliminated the separate jurisdictional standards for in remand quasi-in remjurisdiction.Personal jurisdiction must always be evaluated by the International Shoe standard.


5/82

5

However, the existence of physical property within the forum state can be considered indeciding whether the defendant had minimum or substantial contacts with that state.

How do personal jurisdiction appeals go forward before the trial is over, since ruling that there is

personal jurisdiction is NOT a final judgment?

Supreme Court can issue a writ of prohibition telling the lower court that it may notexercise jurisdiction.

Rule 4(k)(1)(A)

The personal jurisdiction of a federal court is the same as a state court in the same state,unless a specific federal Rule or statute authorizes more extensive personal jurisdiction.

o E.g. 4(k)(1)(B)-(C); Federal Interpleader Act (28 U.S.C. 2361); federal

securities laws.

Specific Personal Jurisdiction

Minimum contacts and Purposeful availmento Effects test

Arising under (the defendants contacts with the forum state?)

Fair play and substantial justice

Stream of commerce discuss, but this is not an independent basis for showing

specific jurisdiction.

o Where a defendant targeted the forum through the stream of commerce, then itmeets the purposeful availment test.

World-Wide Volkswagen Corp. v. Woodson

Whether or not it is foreseeable that the defendants product may cause an injury in theforum state can be a factor in the minimum contacts test, but it is not dispositive.

Restatement of the minimum contactstest: Are the defendants conduct and

connections in the forum state such that he should reasonably anticipate being haled intocourt there?

Burger King Corp.

Applies minimum contacts standard, and also applies other tests.


6/82

6

Arising under test: A court will have personal jurisdiction if the defendant haspurposefully directed his activities at residents of the forum state, and if the litigation

results from alleged injuries that arise out of or relateto those activities.

Fair play and substantial justice standard: consider several factors

o Does calling the defendant into this forum state place a heavy burden on him?o Does the forum state have an interest in adjudicating this dispute?o Will trial in this forum state result in the most efficient resolution of the

controversies?

o Fair play and substantial justice considerations sometimes serve to establish thereasonableness of jurisdiction upon a lesser showing of minimum contacts thanwould otherwise be required.

o On the other hand, if the defendant has purposefully directed his activities atforum residents, to defeat jurisdiction he must present a compelling case that the

presence of [fair play and substantial justice] considerations would renderjurisdiction unreasonable.

Even though Rudzewicz had only minimal (nonexistent?) contacts with Florida, hedirected his activities towards Florida by signing a contract withsubstantialconnectionsto Florida.

o (Parallel with McGee).

Pavlovich v. Superior CourtCalifornia State Court

Good statement on the specific personal jurisdiction test.

Effects test where a defendant knowsthat his actions will have a potentially harmfulimpact onspecific entitiesin a certain jurisdiction, this may show that the defendant hasmade himself liable to defend a suit in that jurisdiction.

o This is a variation on the purposeful availment test

A passive website that serves only an informational purpose (as opposed to interactive or

sales solicitation) is not grounds for the exercise of personal jurisdiction wherever thatwebsite is accessed.

J. McIntyre v. Nicastro

Plurality opinion

A defendants placing goods into the stream of commerce may satisfy the purposeful

availment test, if the defendant expected his goods to be purchased by consumers in theforum state.


7/82

7

o However, the defendant must purposefully target the forum in order to indicatesubmission to the forum states jurisdiction.

Concurring justices: the stream of commerce test is unworkable, because it is difficult

to know when the defendant has targeted the forum state.

General Personal Jurisdiction

Can get general jurisdiction over a corporation in

o The state in which it is incorporatedo The state where it has its principle place of businesso Any state where its operations are so continuous and systematic that it can be

considered at home in that state.

General jurisdiction over a person in

o Any state where the individual is personally served with process (tagged)o Any state where an individual has substantial (continuous and systematic)

contacts.

Goodyear v. Brown

A court can assert general jurisdiction over a foreign corporation only when theiraffiliations within the State are so continuous and systematic as to render them essentiallyat home in the forum State.

A foreign subsidiary of a U.S. parent corporation cannot be sued in the forum State onany claim unrelated to the subsidiarys activitiesin the forum State.

Burnham v. Superior Court

Jurisdiction based on physical presence alone constitutes due process.o Tag jurisdiction

Contracting for Personal JurisdictionConsent

A substitute for personal jurisdiction

The defendant can consent to the lawsuit by

o Appearing in court without challenging personal jurisdiction (or by filing aresponsive pleading without raising this defense; see Rule 12(h)(1))

o Signing a contract containing a forum-selection clause


8/82


9/82

9

Therefore, wavier should not be requested if the statute of limitations isclose to running.

o This is meant to reduce costs of service across the entire system, making the firstphase of lawsuits more efficient.

o

It also lowers the initial barriers for plaintiffs to get into court.

4(a)(1)(A)(ii)By waiving service, the defendant extends his time to answer thecomplaint from 21 to 60 days (or to 90 days for foreign defendants).

4(d)The defendant has a duty to avoid unnecessary expense in serving the summons,and if a defendant located within the United States refuses to waive service of processwithout good cause, he will be required to pay the costs of subsequent service.

Rule 4(d)(5)If the defendant waives personal service, he may still raise jurisdictional orvenue challenges.

Rule 4(e)lists all the different ways in which a plaintiff can serve an individual.

Rule 4(k)(2)for claims arising under federal law against defendants not subject to

personal jurisdiction in any state, serving a summons or filing a waiver of serviceestablishes personal jurisdiction so long as exercising jurisdiction is consistent with theU.S. Constitution and laws.

o Creates a new type of personal jurisdiction for foreign persons or entities whohave insufficient contacts with any one state to satisfy personal jurisdiction.

o

This provision assumes that the Due Process Clause permits aggregating thedefendants contacts with the U.S. as a whole for jurisdictional purposes.

Now, mailed service is the norm. Personal service is rare, but it is still required for certaintypes of lawsuits in different states.

Discretionary Refusal of Jurisdiction

Long-Arm Statutes

Federal long-arm statute: Rule 4(k)(1)(A)a district court has the same personaljurisdiction as a state court in that state, unless a specific Rule or statute authorizesbroader jurisdiction.

o So federal district courts are subject to the state long-arm statutes in the forumState.


10/82

10

State long-arm statutes - Two types:

o Jurisdictional reach is less than the Constitution allows. In some states, courts have still interpreted these statutes to authorize the

maximum allowable jurisdiction.

For states that have a restricted long-arm statute, a court must first decide

whether the court has jurisdiction under the statute, and then it mustanalyze whether the substantial contacts test under the Due Process clauseis met.

The long-arm statute will sometimes look at different criteria than thesubstantial contacts test to decide whether jurisdiction exists.

o Jurisdictional reach goes as far as the Constitution allows. Same personal jurisdiction analysis as for federal courtsminimum

contacts / purposeful availment test.

Why would a state limit its jurisdiction?o Wants to limit court case loads.o Encourage businesses to business in that state.

Gibbons v. Brown

Floridas Long-Arm statute conferred less than the Constitutionally-allowable maximum.

The defendant in that case did not satisfy the requirements of the long-arm statute.

Federal Long-Arm Statutes

Federal Interpleader Actfederal courts have authority to serve process anywhere in thenation. This has been interpreted to include personal jurisdiction (p.174).

Transfer

The movement of an action to another federal judicial districto Intra-system transfer.

Applies only to federal district courts under 1404(a).

The courts have discretion to grant transfer for the convenience of parties and witnesses,in the interests of justice.

Forum Non Conveniens

Dismissal of a suit in the U.S. so that it can be tried in another nations courts.


11/82

11

o Inter-system transfer.

State and federal courts have the discretion to dismiss when appropriate.

Sometimes, the defendant will argue that a court without jurisdiction is more convenient;

the U.S. court may still grant dismissal if the defendant agrees to waive any jurisdictionalchallenges.

Piper Aricraft v. Reyno

A plaintiffs choice of forum should rarely be disturbed.

However, when an alternative forum has jurisdiction, and when trial in the chosen forum

would burden the defendant out of all proportion to plaintiffs convenience, or whenadministrative and legal problems of the chosen court would make that foruminappropriate, the court has discretion to dismiss the case.

See the case brief for a list of factors considered in deciding whether to dismiss.

A difference in substantive law that would be unfavorable to the plaintiff in the requestedalternative forum cannot prevent a court from granting dismissal forforum nonconveniens, unless the remedy provided by the alternate forum is so clearly inadequateor unsatisfactory that it is no remedy at all.

o In that case, a court can give substantial weight to the difference between laws.

Subject Matter Jurisdiction

Limits the types of cases a court can hear.

The right to challenge subject matter jurisdiction cannot ever be waived.

o Technically, the right does not even belong to the defendant, since it is anembodiment of the separation of powers principle underlying federal government.

A court must analyze this issuesua sponteif the parties do not raise it on

their own.

State trial courts have general subject matter jurisdictionthey can hear most types ofclaims.

Federal courtsalong with certain types of specialty courts (bankruptcy courts, familycourts, traffic courts)are courts of limitedsubject matter jurisdiction.

Subject matter jurisdiction can be concurrent or exclusive


12/82

12

o If it is exclusive, only one type of court can hear that complaint. E.g. only federal courts can hear patent lawsuits; only state courts can hear

an auto negligence suit between two citizens of the same state.

Admiralty, bankruptcy, tort suits against a federal employee, and antitrust

cases all must be tried in federal courts.

If it is concurrent, a claim of that type can be brought in federal or state court, e.g.diversity cases and federal question cases.

Jurisdiction of the Federal Courts

Article III, 2 of the Constitution specifies all the types of cases that the federal courtsmay hear.

o Includes federal question, diversity, and other categories.

Congress must authorize the lowerfederal courts to assume jurisdiction over these typesof cases; it has done so through various statutes, e.g.:

o 28 U.S.C. 1331federal questiono 28 U.S.C. 1332diversity

Congress has specifically forbidden the federal courts from hearing certain cases, e.g.

enjoining state tax collection.

Federal Question

28 U.S.C. 1331district courts have jurisdiction over cases arising under theConstitution, statutes, or treaties of the federal government.

Well-pleaded complaint rule

Louisville & Nashville Railroad v. Mottley

The federal claim must appear as part of the plaintiffs statement of his own cause ofaction in order to qualify as arising under federal law.

o There is not a federal question, even if the defendants defense or the plaintiffs

rebuttal to a defense relies on federal law or Constitutional law.

Advantageso Easy to apply; does not require a lot of evidence to decide whether federal

jurisdiction is appropriate.o Decision about subject matter can be made early in the litigation

Doesnt waste federal courts resources to oversee discovery and pretrial-motions, just to later have the case dismissed for lack of jurisdiction.


13/82

13

o Reduces the federal case load.

Disadvantageso Denies some plaintiffs access to the federal system.

Important federal issues that do not arise in the complaint (e.g. a defense

that arises from federal law) will not be heard in federal court.o Unduly burdens the state court systems.

Federalized Claims

Grable (USSC note case, p.201)

The federal courts have jurisdiction over a state-law claim if that claim:

o Necessarily raises a federal issue, which is: Actually disputed and substantial, and

Which a federal forum may entertain without disturbing anycongressionally approved balance of federal and state responsibilities.

Most lower courts applying this test remand back to the state court, usually claiming thatthe case fails the third criterion.

Supreme Court

The Supreme Courts federal question jurisdiction (granted by Article III, 2) is broaderthan the lower courts jurisdiction (authorized under 28 U.S.C. 1331).

So the Supreme Court will be able to hear some cases on appeal from the state courts thatthe district courts could not have heard (?)

Dismissing for Lack of Subject Matter Jurisdiction

12(b)(1) motionSubject Matter Jurisdiction challenge: precludes filing of a new claimin federal court. Dismissed without prejudice.

12(b)(2) motionPersonal Jurisdiction challenge: precludes filing of a new claim in

federal orstate court in that forum. Dismissed without prejudice.

12(b)(6) motioncomplaint fails to state a claim: complaint dismissed with prejudice.Usually, the plaintiff will not be able to file the claim again, even if she can find a newlegal basis for her argument.

If a defendant makes Rule 12(b)(1) and (2) motions, the federal court may dismiss forlack of personal jurisdiction if that is the most obvious ground, even though this will alsoprevent refilling in state court, whereas the Rule 12(b)(1) dismissal would not.


14/82

14

Separation of Powers and Subject Matter Jurisdiction

Federal courts and federal juries may be better suited to decide cases on federalquestions.

However, our system of government does not deny state courts from hearing theseclaims.

Diversity Jurisdiction

Based on the idea that state court judges and juries will be biased against out-of-stateparties.

A federal judge/jury is needed to provide a neutral forum for diverse parties.

o Are these justifications still valid? Now a national media has more or less

diminished major differences in state ideologies. We also have a nationaleconomy and a national culture.

Requirements for Diversity Jurisdiction

To prevent overload on federal courts, the amount in controversy for diversity cases mustexceed$75,000

o It has to be AT LEAST $75,000.01!!

Complete diversity is requiredif there is at least one party on each side from the samestate, then diversity jurisdiction is destroyed

o See Strawbridge v. Curtiss (1806), p.211

o Some exceptions, e.g. The Federal Interpleader Act (28 U.S.C. 1335); ClassAction Fairness Act (28 U.S.C. 1332(d)).

See 28 U.S.C. 1332 for diversity jurisdiction rules.

o 1332(a)(2)for purposes of diversity jurisdiction, a foreign citizen can be acitizen of a U.S. state if he is a lawful permanent resident of the U.S. and is

domiciled in that U.S. state.

o 1332(a)(3)If citizens from foreign states are on bothsides, then there must alsobe U.S. citizens from different states on each side.

28 U.S.C. 1359No diversity jurisdiction where a party has been improperly or

collusively...joined to invoke diversity jurisdiction.

o But no consensus among the courts on what is improper.


15/82

15

Diversity of citizenship is determined based on the time when the complaint is filed.

Citizenship of a Person

Redner v. Sanders

A person is a citizen of a U.S. State under 28 U.S.C. 1332 if he is a U.S. citizen and is

domiciled within the state in question.

Domicile means:o The place where a person resides and where he intends to reside indefinitely.

o A person can only have one domicile.

All U.S. citizens are presumed to be domiciled in at least one state.

For a U.S. citizen living abroad, his place of domicile is the last state he was domiciled in

before he went abroad.

Establishing domicile is a fact-intensive inquiry.

Corporate Citizenship

Hertz Corp. v. Friend

A corporation is a citizen of the state in which it is incorporated andof the state where ithas its principal place of business.

o

The principal place of business is where the corporations high level officersdirect, control, and coordinate the corporations activities.

Usually the corporations headquarters.

Amount in Controversy

Courts generally consider the pleading controlling, without engaging in judicial guessing

as to whether the plaintiff can recover as much as he hopes.

However, if it is certain from the face of the pleadings that the plaintiff cannot recoverthe amount claimed, the suit will be dismissed for lack of diversity jurisdiction.

o St. Paul Mercury Indemnity Co. v. Red Cab Co. (USSC note case p.218)

Plaintiffs mere hope for an extreme punitive award cannot be the sole basis for[diversity]jurisdiction.

o Salmi v. D.T. Management, Inc. (District Court note case p.218).


16/82

16

For a suit requesting an injunction, attempt to value the injunction.

Supplemental Jurisdiction

Originally a common law doctrine, from the Owens Power cases.

o

It was later codified by Congress.

28 U.S.C. 1367

o So related to the federal claims that they form part of the same case or

controversy standard.

o Subsection (b) applies only to diversity jurisdiction cases

o Subsection (c) provides exceptions allowing a federal court the discretion to denysupplemental jurisdiction even though it does have original jurisdiction:

If the State law issue is novel or complex If the State law claim substantially predominates over the claim over

which the federal court has original jurisdiction. If the district court has dismissed the claims over which it has original

jurisdiction In exceptional circumstances, any other compelling reasons.

In re Ameriquest

A federal court may have supplemental jurisdiction over state law claims if they areclosely related to claims over which the federal court already has proper jurisdiction.

o The test for this is whether the facts necessary to prove the elements of the federalclaim are similar or related to the facts necessary to prove the state law claim.

o The court also considers whether the state claims can be resolved or dismissedwithout affecting the federal claims.

Szendrey-Ramos v. First Bancorp

District Court declines to exercise supplemental jurisdiction, applying the four-factor testabove.

Deciding Supplemental Jurisdiction Cases

The cases above could have come out in different waysdifferent judges might make

different decisions.

In some instances, the judge will examine the merits of the claim to decide whethersupplemental jurisdiction is appropriate.


17/82

17

o E.g. Szendrey-Ramos, where the judge realized that the Code of Ethics mayprevent the plaintiff from a full recovery.

Social issues surrounding the state law claims (including the level at which the state law

claim is wrapped up in historical state law arenas) will often dictate how a judge will ruleon supplemental jurisdiction.

One district court has declined to exercise supplemental jurisdiction because applyingstate and federal law in one trial complicates the entire litigation, lengthens juryinstructions, confuses the jury, results in inconsistent verdicts, etc.

o See National Fair Housing Alliance, Inc. v. Hobson-Hollowell (note case p.228)

Savings Statutes

Some states toll the state statute of limitations while the plaintiff is trying to get a federalcourt to hear his state law claims.

o The plaintiff will then have a limited time to refile in state court if the federalcourt declines to exercise supplemental jurisdiction.

1367(d) seeks to do something similar for states that do not have a savings statute.

Removal

Allows a defendant to move a case from state court into federal court if certain conditions

are met.

o See 28 U.S.C. 1441 for these conditions.

o 28 U.S.C. 1446 sets out the procedure for removal; 28 U.S.C. 1447 identifiesthe procedure for challenging removal.

o Class Action Fairness Act and Securities Litigation Uniform Standards Act callfor removal of certain types of class actions.

Power to remove needs to be limited to prevent misuse by defendants.

o E.g. diversity-based removal must take place within one year from the lawsuitscommencement, to prevent the defendant doing this late in litigation to wasteplaintiffs time and money.

However, limiting rules should not interfere with the ultimate goals of efficiency andfinality of judgment (see Caterpillar).


18/82

18

Caterpillar, Inc. v. Lewis

So long as the federal jurisdictional requirements are met at the time of judgment, thedistrict courts initial failure to remand a case improperly removed will not make thejudgment invalid.

State Law in Federal Courts

Three major points in jurisprudential historyo Swift v. Tyson (1841)o Erie v. Tompkins (1938)o Deconstitutionalizing Erie (19582000)

Rules of Decision Act

Federal courts should apply state law when exercising diversity jurisdiction.

However, there is dispute about what qualifies as lawo Is judge-made common law part of the state law that should be applied in

diversity cases?

Swift v. Tyson

Holds that federal judges mayfollow, but are not constrained by, state common law in

diversity cases in federal court.

o They can adopt and create federal common law principles, ignoring judge-made

law from the state whose statutory law applies to the case at hand.

This opinion started off a period of intense forum-shopping.

Erie v. Tompkins

Overrules Swift

Federal courts must apply state common law in diversity cases and for supplementaljurisdiction claims.

There is no federal common law.

Choice of LawKlaxon Co. v. Stentor Elec. Mfg. Co. (note case p.249)

Under Erie, a federal court must apply the choice of law (conflicts) rules of the state inwhich the district court sits (the forum state) to decide which states law governs the case.

Because of this, there is still some forum-shopping.


19/82

19

Substantive v. Procedural State RulesGuaranty Trust Co. v. York

In cases where a federal court is exercising jurisdiction solely on diversity grounds, theoutcome of the litigation should be essentially the same as if it were tried in state court.

The outcome-determinative ruleo Federal court must apply a state procedural rule if it would lead to a different case

outcome compared with the applicable federal rule.

Discussion

o This rule more or less totally supplants the Federal Rules of Civil Procedure

o Many rules will be outcome determinative, since failing to follow a rule oftenresults in the plaintiffs case being dismissed, or at least in some type of penalty.

Interpreting York

Byrd v. Blue Ridge

Does the rule affect the legal outcome of the case, or does it just determine the processused to decide the outcome?

o E.g. in Byrd, the judge / jury rule does not determine whether or not the plaintiffis a statutory employee. It only determines whowill be responsible foranswering this question.

De-Constitutionalizing Erie

Hanna v. Plumer

The Constitution gives Congress the power to dictate rules of procedure to the federal

courts, so if the statute is constitutional and tells a court to do something, the federalcourts must follow it.

Two step analysis for Federal Rules of Civil Procedure (since these are not really

statutes):

o

Looking at what the Rule requires, is it really a rule of practice and procedure?

This ensures that the Rule properly falls under the Rules Enabling Act

o Is the procedure specified in the Rule constitutional?

If the Rule passes these two tests, then it must be applied, even if it is significantlydifferent from the state practice


20/82

20

Allowing a state rule to trump a federal rule when the federal rule is permissible underthe Constitution is a usurpation of the federal system.

Analyzing Erie questions on an exam problem

If the federal rule or practice is dictated by a federal statute or FRCP:o Follow the Hanna approach

If the federal practice is not required by any Rule or statute (e.g. federal voir direpractices):

o Apply Byrds interest-balancing test: Balance the interest of the federalgovernment in maintaining the federal rule against the states interest in keepingthe outcome of litigation the same

See case for more specifics

o

Apply Hanna: would following the federal (or state) practice lead to forumshopping, or unequal administration of the law (injustice to the parties [as a resultof reliance])?

If yes, then follow the state procedure.

Life-Cycle of Litigation

Civil Cases

Less than 5% of all U.S. cases are heard in federal courts.

The remaining 95% are heard in state courts.o Excluding traffic ticket cases, about half of these are criminal cases, and about

half are civil. See p.283 for a detailed breakdown. More than half of these civil cases are contract claims

About 97% of all cases end before they go to trial.o Default judgmento Settlemento Plaintiff abandons the litigationo

Summary judgment

Trial Outcomes

Of the 3% of cases that go to trial, about 60% of them are tort cases.o 90% of these tort cases are tried before a jury.o Plaintiffs win in about half of the cases.o The average recovery in tort cases is between $21,000 and $24,000.


21/82

21

Most contract cases that go to trial are tried before a judge.o Plaintiffs win in just over two-thirds of cases.o The average recovery is about $45,000.

$25,000 for bench trials; $75,000 for jury trials.

Damages

Compensatory Damages

o No fixed standard for deciding the amount of noneconomic damages (pain andsuffering, etc.). Juries must use the evidence and common sense to decide on areasonable amount.

o To create some predictability, some legislatures have put a cap on noneconomicdamages or have barred them entirely for certain types of lawsuits.

Punitive DamagesState Farm v. Campbell

Appellate courts must review a trial courts award of punitive damages under a de novoreview standard.

In reviewing the award, the appellate court should consider:

o The degree of reprehensibility of the defendants conduct. Was the harm physical or economic? Was the defendant reckless or indifferent with regard to others health or

safety? Was the target of the conduct financially vulnerable?

Was the conduct a repeated behavior, or an isolated incident? Did the harm result from malice, trickery, or deceit?

o The ratio between the plaintiffs actual or potential harm and the punitive award.

There is no bright-line rule, but usually punitive awards greater than 9times the compensatory damages do not satisfy due process.

o The difference between the punitive damages awarded and the civil penaltiesauthorized or imposed in similar cases.

A state court cannot punish a defendant for harm that occurred outside the state.

In awarding punitive damages, a court (or jury) should not place too much emphasis onharm that was done to people not before the court.

o Phillip Morris USA v. Williams (USSC note case, p.302).


22/82

22

Litigation Financing

A huge proportion of the costs of litigation are actually paid by taxpayers. The statefunds the administrative costs of courtrooms, including overhead and judge and staffsalaries.

The American Rule

Each party finances its own litigation

Questions a plaintiffs attorney must consider:o What are the chances of winning?o How much is the case worth if we win?o How much will it cost to try the case?

This means that plaintiffs cases which are worth only a small amount in damages are

unlikely to go to trial, even if the plaintiff has a high chance of success.

The English Rule

The losing party must finance the prevailing partys litigation.

This means that a plaintiff will be unlikely to try a case that is unlikely to win, even if theclaim is worth a great deal of money.

Ways of Financing a Case under the American Rule

Contingency Fee

Insurance

Hourly rates

Flat fee

Third-Party Financing

Public / Private No-Fee Serviceso Legal Services Corporation (public) and civil rights groups (private)

Contingency Fee Financing

This method of financing a case is like after-the-fact insurance

o If your case loses, then you dont have to pay anything you are insured against atrial loss.

o However, if your case wins, then you will pay a high premium to cover the

attorneys other cases that will lose.


23/82

23

Flat Fee financing

This is on the rise in recent yearso Many plaintiffs attorneys now negotiate a flat fee for the entire lawsuit instead of

agreeing to a contingency fee.

To a certain extent, this is a response to the huge fees that plaintiffs attorneys get whenthey win cases.

o Attorneys use the flat fee as a way to compete with high-priced contingency feemodels.

This involves a lot of hustling for clients

Legal Services Corporation

Landlord-tenant cases

Family law cases Government benefits (social security, disability issues)

Consumer debt

Third-Party Financing

Consumer Lendinga third-party lends directly to clients, and only collects the loan ifthe borrower collects a judgment

Lawyer Lendinglawyers borrow from specialized lenders (or regular banks)

Direct Investment in Commercial Claimsthird-party looks into the merits of the claim,then contributes towards the litigation costs in exchange for a share of any recovery.

o This type of financing is primarily open only to big corporations and law firms.

Fee Shifting: An Exception to the American System

By Contractparties to a contract may specify that if litigation over the contract arises,the loser will pay the winners legal fees.

o Common in contracts where the amount in dispute will be relatively small.

By Common Lawjudges have the authority to force a party to pay the other sides legal

fees if they have acted in bad faith.

Fee Shifting Statutes

o Incentivize plaintiffs litigating in a particular area by allowing prevailingplaintiffs to have their fees paid by the defendant.

o 42 U.S.C. 1988(b) is the fee-shifting statute for civil rights cases.


24/82

24

o The American Rule exceptions that the legislature sought to create are more

limited than they might have hoped. See Evans v. Jeff D. and Buckhannon.

o

Evans v. Jeff D.

The trial court may exercise discretion in deciding whether or not toapprove a settlement offer that contains a fee waiver. The courts are notrequiredto reject a settlement offer just because it contains such a waiver.

However, the court may choose to reject a settlement because itcontains a fee waiver.

o Buckhannon

No attorneys fees when the court dismissed the case because thedefendant regulatory board voluntarily repealed the challengedregulations.

Pleading

Purposes

o Give notice to the parties.o Weed out unmeritorious claims or defenses.o

Limit the issues within each individual case that will be tried at later stages.o Provide a record for later judgments, appeals, etc.

Major Periods

Royal courtso More than 30 different writs, and each writ had its own formula.o Since there were a limited number of possible writs, plaintiffs had to squeeze their

unique claims into one of the preexisting forms.

Code EraMid-19thCentury to 1930s

o States created codes that were a reaction to the strict formulas of the writ system.

o These codes loosened the rules from the writ system; plaintiffs only had to state avalid cause of action rather than try to fit their claim into one of a limited set ofpossible claims.

o This period emphasized the first function of pleading: notice.


25/82

25

o Pleading was significantly simplified.

FRCP (1938)

o Notice pleading.

o

Purpose is to ensure the just, speedy, and inexpensive resolution of every case.

o Emphasized the first, third, and fourth functions of pleading, but specificallyrejected the idea that pleadings should be used to weed out sham cases.

The new system was designed to resolve these weak cases in the pretrial

period instead.

2007Supreme Court

o Two casesBell Atlantic v. Twombly and Ashcroft v. Iqbal

o Some people believe that the Supreme Court is signaling a shift in the emphasis ofpleading from giving notice to weeding out unmeritorious claims.

Parts of a PleadingRule 8(a)

Jurisdictional allegation

A short and plain statement of the claim

Claim for relief

Challenging a Pleading

Rule 12(b) motionsthese can be made before the defendant has to answer.

Rule 12(b)(6)Complaint fails to state a claim for which relief can be granted.

o Called a demurrer at common law, and in some state procedural codes.

o Admits, for the purposes of the motion, all the facts alleged in the complainto Argues that the law grants the plaintiff no legal remedy.

o See e.g. Haddle v. Garrison

Federal Forms

Illustrate the brevity and simplicity of pleadings contemplated by the rules.

Rule 84the forms in the Appendix represent the type of pleadings that will sufficeunder the Federal Rules.


26/82

26

o Many of these forms are only two sentences long.

Pleading Rules pre-TwiqbalConley v. Gibson (1957; note case p.387)

A complaint can only be dismissed if it appears beyond a doubt that the plaintiff can

prove no set of facts in support of his claim which would entitle him to relief.

o This seems to set the burden of disproving the plaintiffs case on the defendant(s).

The Court reasoned that, since Rule 8 (and the forms) endorsed conclusory statementsand brevity in the pleadings, the pleading burden for plaintiffs was very low.

Conversely, the 12(b)(6) motion to dismiss burden should be very high for thedefendant(s).

Bell Atlantic Corp. v. Twombly (2007; note case pp.388-89)

Involves an anti-trust case.

o Gomez: These cases are very complicated, require thousands of hours ofdiscovery, and tie up hundreds of hours of court-time. Therefore, many judgeswant to dispose of these cases as quickly as possible.

How much factual detail is required in the complaint to satisfy the pleading burden?

o Is it enough to allege that the defendants engaged in parallel conduct (e.g. the

businesses are charging the same high prices)?

Parallel conduct could be evidence of illegal collusion, but it is also possible that theseparate companies individually arrived at similar prices without collusion.

Conleys interpretation of the Federal Rules would allow the case to go forward even if

the plaintiff could only show that there was parallel conduct.

o However, this means that plaintiffs would be allowed to go forward and tie up thecompanies and the courts legal resources for unmeritorious claims, since manyinstances of parallelconduct are in fact not illegal.

The Court held that the plaintiff must allege enough factual matter (taken as true) tosuggest that an [illegal] agreement was made

o Evidence of parallel conduct is not enough to show that there was an

agreement.

o Therefore, a plaintiff must allege parallelism plus.


27/82

27

Since evidence of a collusion will be very, very hard to find (because companies have astrong incentive to keep their collusions a secret), many antitrust claims will neversurvive a 12(b)(6) motion.

Ashcroft v. Iqbal

Pleadings that contain only labels and conclusions, a formulaic recitation of theelements of a cause of action, or naked assertions devoid of further factualenhancement are not sufficient.

To survive a motion to dismiss, a complaint must contain sufficient factual matter,accepted as true, to state a claim to relief that is plausible on its face.

o The plausibility standard is not as high as aprobabilitystandard, but it requiresthe plaintiff to show more than a sheer possibility that the defendant has actedunlawfully.

The Court here extends the holding in Twombly (which appeared to be limited toantitrust casesand possibly other cases which required extensive discovery andcomplicated legal analysis) to all legal claims.

The court requires plaintiffs to show in their pleadings that it is plausible that thedefendant has engaged in illegal conduct.

o This is a standard, not a rule.

o The plaintiff does not have to show that the defendant probablyengaged in the

misconduct, but it is not enough to show merely that the defendant could haveengaged in the misconduct.

Evaluating a 12(b)(6) motion after Iqbal

3-step process

1. Sift through the statements in the complaint and ignore all of the legal conclusions

2. Give deference to all well-pleaded factual allegation. Well-pleaded means that the allegations reference specific factual

information.

3. Then, the judge examines all the well-pleaded factual allegations to decide whetherthey give rise to a plausible claim for relief.

Draw on judicial experience and common sense to determine whether theclaim is plausible.


28/82

28

Due Process and Pleading Requirements

Are the heightened pleading requirements laid out in Iqbal a violation of due process?

o Probably notthe courts need some way of sorting out unmeritorious cases in

order to focus limited judicial resources on the remaining cases.

o Moreover, since the Supreme Court is the final interpreter of the Constitution, thepleading requirements cannot be held unconstitutional unless the Supreme Courtitself later decides that its decision in Iqbal was inappropriate.

Heightened Pleading for Fraud under Rule 9

Rule 9(b)In alleging fraud or mistake, a party must state with particularity thecircumstances constituting fraud or mistake. Malice, intent, knowledge, and otherconditions of a persons mind may be alleged generally.

Stradford v. Zurich Insurance Co.

Reasons for heightened pleading

o Protect the validity of contracts (a finding of fraud would void the contract).

o Fraud is an easy allegation to make. Heightened pleading forces the plaintiff tothink more meaningfully about the validity of his claim.

o Punitive damages might result from a fraud claim.

Details required:

o Who lied to whom?o When and where did the lie/misrepresentation take place?o What aspect of the representation was misleading?o Are there sufficient facts supporting an inference that the defendant acted with

fraudulent intent?

Tellabs (USSC note case, p.406)Rule 9(b) overruled the normal pleading requirementsfor fraud cases.

Allocating the Elements of a Claim

Three ways to allocate:

o Burden of pleading (pleading stage)o Burden of production (discovery stage)o Burden of proof (trial stage)


29/82

29

Usually, these burdens all flow together (e.g. each particular burden for any givenelement falls on the same party)

Jones v. Bock

o Different and more onerous pleading rules should not be imposed by the judiciaryon a case-by-case basis. Pleading reform should be done through establishedrulemaking procedures, such as amending the Federal Rules or throughCongressional legislation.

(But what about Iqbal and Twombly?)

o A Congressional requirement that prisoners exhaust administrative remediesbefore bringing suit against the prison was interpreted as an affirmative defense,and not as a pleading requirement.

Rule 8(c) lists common affirmative defenses.

Regulations of Attorney Bad Behavior

Criminal lawe.g. punishing lawyer misuse of clients money

Professional malpracticebased in state common law and statutory law

Rules of professional responsibilityvary by state

Rules governing particular practice arease.g. FRCP Rules 11 & 12, 37

Rule 11

11(a) requires attorneys to sign any documents that they submit to the court. Thesignature signifies that the attorney has done reasonable research and is not submittingthe documents for an improper purpose.

11(b) requires attorneys to do appropriate legal and factual research before submittingany documents.

11(c) requires a judge or opposing party to give the infringing lawyer notice of potentialRule 11 sanctions and an opportunity to correct the mistake.

o A judge can require,sua sponte, any party to show cause why given conduct does

not violate Rule 11. However, a judge may not issue an order to show cause after voluntary

dismissal or settlement.

11(c) also imposes sanctions on attorneys who violate the provisions of Rule 11.

o Sanctions can be monetary or nonmonetary or both.o Sanctions are imposed jointly against the violating attorney and his law firm.


30/82

30

11(d) holds that Rule 11 is inapplicable to discovery motions and documents.

Garth: Are Rule 11 motions subject to Rule 11?o Answeryes. Attorneys can be liable for filing a Rule 11 motion with the

improper purpose of harassing the opposing party.

Walker v. Norwest Corp.

Plaintiff failed to plead complete diversity in a federal diversity action.

It was the plaintiffs burden to prove diversity of citizenship. This is a burden that has

been accepted and understood for a long, long time.

o Since the attorney had no excuse for failing to follow this procedural rule,sanctions are appropriate.

Wright v. Wilson, et.al. (1996; note case pp.419-20)

Plaintiff filed a sexual harassment suit against her law firm employer.

The law firm filed a motion to dismiss for lack of subject matter jurisdiction, but the brieffor the motion did not attack subject matter jurisdiction.

o Instead, the brief contended that the plaintiff could not prove the merits of herclaim, and it made allegations meant to impugn her character.

The Court imposed Rule 11 sanctions for frivolous legal claims and for improperpurpose.

The sanctions are imposed against the attorney representing the defendant AND againstthe defendant law firm, since they were experienced attorneys who should have knownthat this motion was improper.

Christian v. Mattell, Inc.

Hicks clearly violated Rule 11 for failing to adequately investigate his clients factual

allegations. All he had to do was look on the back of one of the Barbie dolls that his

client alleged was infringing her copyright.

o If he did, he would have seen that the particular Barbie was copyrighted beforethe plaintiffs dolls.

Crank v. Crank (District Court note case, pp.425-26)


31/82

31

A court can impose sanctions including completion of additional continuing legaleducation, and submission of letters of apology.

Responding to the Complaint

The defendant could do nothing, resulting in a default judgment.

The defendant could file a pre-answer motion to avoid getting to the merits of the case.

Finally, the defendant could answer the complaint, admitting to our denying factualallegations and possibly asserting affirmative defenses.

Rule 12

12(a)(1)defendant has 21 days to answer the complaint, extended to 60 days (90 forforeign defendants) if the defendant waives service of process.

12(a)(4)filing a pre-answer motion stops the clock, and the defendant will get another14 days (or some other length of time, at the judges discretion) to answer the complaintafter notice of the judges denial or postponement of the pre-answer motion.

However, the defendant must be wary of filing a pre-answer motion that will subject herto Rule 11 liability.

o The pre-answer motion must have some legal and factual merit.

12(e)Motion for a More Definite Statemento Today it is rarely, and almost never successfully, invoked.

12(f)Motion to Strike

o Two purposes

Challenge apartof a pleading that fails under the substantive law.

Functions like a focused 12(b)(6) motion

12(f) motions are frequently filed for this purpose.

Force removal of redundant, immaterial, impertinent, or scandalous

allegations in a pleading.

Less commonly used. Courts usually do not favor these motions, and will not grant them

if the court is at all in doubt.

12(c)Motion for Judgment on the Pleadings

o Functions like an early motion for summary judgment


32/82

32

o Used only rarely, since often the defendant will want to challenge the plaintiffsfactual allegations.

o Used when the plaintiffs claim makes it clear that the statute of limitations hasrun on a claim.

Answer

Rule 8(b) & (c)

The defendant must specifically deny any factual allegations that he will seek to disprove

at trial. Otherwise, the court may rule that the defendant has implicitly admitted to thesefacts.

The defendant must also raise any affirmative defenses that he wishes to raise; otherwise

he may be foreclosed from raising these at trial.

The defendant should avoid making a general denial of all of the factual allegations in thecomplaint, unless the defendant truly wishes to deny everyfactual allegation.

o Some judges may hold that the failure to specifically deny each factual allegationreally counts as a default admission of these facts. King Vision Pay Per View v.J.C. Dimitris Restaurant(District Court note case, pp.437-38).

Zielinski v. PPI

The defendant answered with a general denial, but did so improperly since it clearly

intended to admit certain facts.

As a result, PPI is estopped from denying agency.

Reply

Rule 7(a)(3)replies are only required when the defendant states a counterclaim.

Rule 7(a)(7)however, the judge may require a plaintiff to reply in some cases. Thishappens rarely.

See pp.441-2 for examples and problems.

Amendments

Rule 15

(a)(1)Allows liberal amendment of complaints.


33/82

33

o This reflects the low hurdle presented by the complaint stage and the plaintiffs

access to robust discovery to find more evidence.

o Party may amend the pleading once within 21 days after serving it (or within 21days after service of a responsive pleading or of a Rule 12(b), (e), or (f) motion,

whichever comes earlier).

(a)(2)In all other cases, the party is free to amend its complaint only with the otherpartys consent or with the courts leave. The court should give leave freely when justiceso requires.

(b)Not covered in this course

(c)Relation back of amendments

o Amendment relates back when the proposed amendment arises out of the same

conduct, transaction, or occurrence as the original pleading.

Gomez: Similar to the inquiry in deciding supplemental jurisdiction.

o Applies to claims and defenses, to adding parties, and to changing the name(s) ofpart(ies).

Amended parties will be permitted so long as the party sought to be addedhad notice of the pleadings.

o Seeks to balance the conflicting principles of allowing liberal pleadings and the

desire to give sufficient notice to the other party.

Beeck v. Aquaslide

The court should freely give leave to amend where justice so requires.

o Absent any undue delay or bad faith on the part of the movant, or undue prejudiceto the opposing party, the court should give leave to amend a pleading.

Also see the discussion section for review of relation back and other issues.

Moore v. Baker

Relation backno relation because the new claim arises from the doctors actions duringand after the surgery, whereas the original claim arises out of his actions before thesurgery.


34/82


35/82

35

26(g)Imposes sanctions for improper use of the discovery process.

o The language and requirements are very similar to Rule 11.o Pay special attention to (g)(1)(B)

Purposes of Discovery

Collecting information to avoid surprises at trial

Streamlining cases by narrowing the issues and weeding out entire cases by helping theparties reach settlement.

o As the parties collect more information about each others positions, the partieswill be in a better position to settle the case.

Gathering and preserving evidence for trialo E.g. deposing a witness who may die before trial, or who may not remember the

events by the time trial comes around.

Harassing or burdening the other partyo This is an improper use of the discovery process, but it occurs nonetheless.o The court can sanction parties under Rule 26(g) for using the discovery process in

this way.

Judicial Involvement in Discovery

Generally, judges do not play a major role in the discovery process; it is driven by theparties.

However, when the parties do not cooperate with one another, judges can compel theparties to participate through Rule 37 motions.

o Judges are often loath to get involved in the process.

Most judicial discovery rulings cannot be automatically appealed, because they are not

final judgments.o However, many of these decisions will have a lot of influence on subsequent

litigation.

Relevancy

Only information that is legally relevant to one of the parties claims or defenses is

discoverable.

Information is legally relevant if it tends to prove or disprove something that thegoverning substantive law considers important.

Rule 26(b)(1)


36/82

36

o Anything relevant to a claim or defense and non-privileged is discoverable

o If a party can show good cause, a judge may allow discovery for anythingrelevant to the subject matter involved in the action.

This category is broader

o Relevant information need not be admissible at trial, so long as the discoveryappears reasonably calculated to lead to the discovery of admissible evidence.

Davis v. Precoat Metals

o In a race discrimination claim, court found that complaints made to the defendantemployer by other employees alleging racial discrimination were discoverable.

Steffan v. Cheney

o

Plaintiff and defendant disagree about what information is discoverable, and whenthe plaintiff refuses to comply with a discovery request the court dismisses theclaim pursuant to Rule 37(b)(2)(A).

Informal Research

Lawyers should not overlook traditional, informal research methods when findinginformation for a case.

o E.g. news articles, scientific research, informal interviews, cold-calling, internetsearches, public records searches, etc.

Required Initial Disclosures

Rule 26(a)(1) governs

Parties must disclose the names and locations of witnesses (including experts),descriptions and locations of documents, calculations (with supporting documentation) ofdamages, and copies of insurance agreements.

Parties only need to disclose information that they will use tosupporttheir claims ordefenses.

o Do not need to disclose potentially harmful information, at least at this initial

stage.o Also do not need to disclose evidence to be used solely for impeachment.

Amending Initial Disclosures

Rule 26(e)


37/82

37

Parties must disclose newly discovered additional information through an amendment tothe initial disclosures, unless the other party has already encountered the information inthe discovery process (e.g. in a deposition).

Examinations of Documents, Things, and People

Rule 34Documents

Parties need to be careful about going on fishing expeditions e.g. asking broadly forall relevant documentation without specifying or categorizing the most relevantinformation.

o The other side may just give you a mountain of documentation, making it difficultto pick out the most relevant information.

o Alternatively, the opposing party may claim that your request for information is

overly burdensome.

34(b)(1)(A)When making production requests, the requesting party must identify the

requested information with reasonable particularity.

34(b)(2)(A)The responding party must respond in writing to the request within 30 days(absent exceptions), and

34(b)(2)(E)Must provide requested documents in the same format as they are kept inthe usual course of business, or must organize them to correspond to the requestingpartys categorizations.

o For electronic documents, the disclosing party cannot provide a hard copy if thatparty only stores the information electronically.

o However, unless the requesting party specifies otherwise, the disclosing party canprovide the information in a format (like PDF) that does not contain traces ofearlier drafts.

Rule 34 applies only to partieso A different process is needed for requests to third-parties.

Rule 35Medical and Psychological Examinations

Parties must show good cause before a court will allow them to examine a person.

Courts seek to balance the privacy of the examined party against the discovery needs ofthe lawsuit.

Also see Privacy Issues, below.


38/82

38

Rule 33Interrogatories

Party can ask up to 25 questions (interrogatories) in writing of any other party. Can askmore questions with special permission from the court or a stipulation from the otherparty.

Must get permission to issue interrogatories to non-parties (?)o But Yeazell says they cant be used at all.

These are much cheaper than depositions, but they are limited in usefulness and in scope(e.g. usually limited to 25 interrogatories; cant follow up on evasive answers).

Responding party must answer or object to each interrogatory within 30 days (absent

exceptions).

33(d)if the answer to an interrogatory can be determined by examining records, and if

it would take either party about the same amount of time to do so, he responding partymay answer by specifying in sufficient detail the records that must be reviewed.

o If the responding party could really do this faster, then the requesting party canmove for a more complete answer to her interrogatory under Rule 37(a)(4).

Rule 36Admissions

Parties can ask other parties to admit to certain facts or allegations to narrow the issuesfor trial and further discovery.

An admission takes an entire matter out of controversy, whereas an interrogator answer isa piece of evidence that can be contradicted by other pieces of evidence.

Under a literal reading of Rule 36, failure to deny any admissions request can lead to adefault admission, but some courts interpret the Rule more broadly and allowamendments to the admission.

Depositions

Rules 27-32

During depositions, the witness must answer all questions, as long as they do not ask forprivileged information.

The opposing party can make objections, but the witness must still answer the question.The objection can be used later to invalidate use of the deposition testimony at trial.

30(a)(2)(A)Without the courts permission or the opposing partys stipulation, a party

may not take more than ten deposition or depose a person a second time.


39/82

39

A deposition may not exceed a day of seven hours.

See problems, p.482.

Sanctions

Found in Rules 26(g) and 37

Rule 26(g) is a parallel to Rule 11; it requires that all discovery requests be made in goodfaith.

o A party can ask, or the court can ordersua sponte, that sanctions be awardedimmediately following the violation

Rule 37 sanctions are triggered only after a trial court has order a party to comply with adiscovery request.

o Before moving for sanctions, the moving party must confer with the opposingparty to try to resolve the problem.

o If this doesnt resolve the problem, then the moving party can file a Motion to

Compel.

o After the judge grants the motion, then the moving party can finally ask forsanctions.

Rule 37(b)(2)(A)lists 7 potential sanctions for failure to comply with discovery orders

o

One of these is dismissal of the action (as in Steffan v. Cheney).

See problems on p.486

Privilege

Information that is otherwise discoverable is nonetheless protected if it is privileged.o Privilege trumps relevance

Several types of privilege: attorney-client; doctor-patient; spousal; self-incrimination (?)(if the question calls for the person to admit to criminal behavior)

Information from particularsourcesis protected, but not the information itself.o If a party can get the same or similar information from another source, this is

allowed.

Privilege reflects societys valuation of the confidential relationships between groups ofpeople.


40/82

40

Although privilege trumps relevance, privileges are construed narrowly, and they areeasily waived.

o If a party discloses attorney-client information to a third party, then the opposingparty can request this (and possibly all other) privileged information.

o A party may inadvertently waive privilege by accidentally including a privilegeddocument among other disclosures.

This also waives the privilege as to any other privileged communicationson the same subject matter, with subject matter interpreted very broadly.

However, 26(b)(5)claw-back provision

Attorney-Client PrivilegeElements

The privilege applies to (1) a communication (2) from the client to the lawyer (3) withoutthe presence of others (4) for the purpose of seeking legal advice.

Questionso At what point does a person become a client?

Attorney Work Product / Trial Preparation Material

Not a privilege; simply a conditional protection for one class of information.

First Protected in Hickman v. Taylor (1947)

Later codified in Rule 26(b)(3)

o Protects documents that were prepared in anticipation of litigation, unless anotherparty can show that the materials cannot be obtained without undue hardship fromanother source, and that the materials are needed to prepare the case.

o Mental impressions, conclusions, opinions, or legal theories of a partys attorney

are never discoverable26(b)(3)(B)

Potential exam problem: Company does some investigation into an accident that occursin the course ofbusiness. The injured party later sues. Is the companys accident reportconsidered trial preparation material? I.e. was the investigationconducted in the usualcourse of business?

Experts

Categorized into two types:


41/82

41

o Experts who are somehow involved in the events being litigated, and not retainedby the parties; fact witness experts.

E.g. the doctor who treats an injured plaintiff; the engineers who built abridge that later collapsed.

o Experts retained to analyze the case and (perhaps) testify at trial.

Retained experts are further categorized into two types:o Testifyingo Non-testifying

Disclosure of Expert Information

The identity of all experts must be disclosed in the initial disclosure round.

Rule 26(a)(2)requires a second round of disclosure 90 days before trial, for parties todisclose the contact information of their retained & testifying experts and a report of whateach retained & testifying expert will testify.

26(b)(4)after this disclosure, the experts must submit to a deposition.

26(a)(2)(C)fact witness experts must submit a briefer report of what they will testify.

26(b)(4)(D)non-testifying retained experts do not need to give a report of theirfindings, nor does the attorney need to disclose their information.

o

If there are exceptional circumstances, however, the judge may require theattorney to disclose this information.

o Information from these experts is really a special category of trial preparationmaterials.

See problems on p.499

Getting / Withholding Information from Non-TestifyingExperts

Thompson v. The Haskell Co.exceptional circumstances exist, and the non-testifying

expert must disclose her report.

Chiquita v. Bolero Reeferthe experts report is not discoverable; he is not a factwitness, and there are not exceptional circumstances because the defendant had access toall the same information and could have hired its own information.


42/82

42

Privacy Issues

Rule 26(c)Protective Orders

Rule 26(c)the court, upon a showing of good cause, may issue an order to protect a

party or person from annoyance, embarrassment, oppression, or undue burden orexpense.

Stalnaker v. Kmart

o Party seeking a protective order has the burden to show good cause for it.

o Must submit a particular and specific demonstration of fact, as distinguished

from stereotyped and conclusory statements.

Very infrequently will the witnesses themselves seek or ask the attorney to seek a

protective ordero This is almost exclusively a mechanism used by the attorneys to gain a strategic

advantage by withholding information.

Rule 35Limiting Physical and Mental Examinations

Only allows these examinations upon a showing of good cause and when a partys

mental or physical condition is in controversy.

When a party has put her own mental or physical condition at issue, courts will almostcertainly permit examination.

However, when the individual has not clearly put this information at issue, courts aregenerally much less willing to permit examinations.

o See Schlangenhauf v. Holder (p.508), the only Supreme Court case on Rule 35.

Discovery Abuse

The line between zealous advocacy in discovery and sanctionable abuse is a fuzzy one.

The more is at stake in the case, the more incentives there will be to engage in potentially

abusive behavior.

Two forms of abuse:

o Over-discovery (and its extreme form, predatory discovery)o Evasion (Obstruction)


43/82

43

Some judges will consider over-discovery and evasion as a permissible form of zealousadvocacy; others will be more willing to sanction

o Gomez: Small A abuse

Most judges will be willing to sanction predatory discovery or obstruction.

o Gomez: Big A abuse

Another dimension of discovery:

o Front-end complianceRule 26(g)

This form of discovery protection is meant to be self-enforcing; it requiresthe parties to confer together, and it places the parties on notice that theymust behave appropriately

Meant to prevent abuses altogether before they even happen

These sanctions are less serious and take up less of the judges time and

efforts.

o Back-end complianceRule 37(a) & (b)

This form of sanction is a big deal, and the judge must use her discretionto decide what sanctions and remedies are appropriate.

Responding to Discovery Abuses

Evasionhow to respond when the opposing party doesnt answer interrogatories?

o If the party didnt respond at all, confer with the party and file a 37(a) Motion to

Compel if they still dont respond.

o If you suspect that the party didnt provide a full answer, file a motion based on26(g)(1)(B) or file a 37(a)(4) Motion to Compel.

Responding to a Claim of Abuse

Claim that the requested information is privileged, irrelevant, or trial preparationmaterials.

Alternatively, file a protective order.


44/82

44

Zubulake v. UBSNY District Court case.

The spoliation of key evidence can support an inference that the evidence would havebeen unfavorable to the party responsible for its destruction.

o

However, this determination is made on a case-by-case basis at the trials judgesdiscretion.

See the case brief for a detailed discussion of a partys obligations to preserve relevantevidence.

E-Discovery Amendments to the Rule

37(f)meant to codify the holding in Zubulake about information lost as a result ofroutine, good-faith operation of an electronic information system.

26(b)(2)(B)meant to deal with the enormous cost of tracking down every potentialsource of electronic information.

26(b)(5)(B) & 26(f)(4)claw-back provisions.

Resolution Without Trial

How Litigation Ends

Trial2-3%

Settlement60-80%

Adjudication without trial20-40%o 12(b)(6) Motion to Dismisso Rule 56Summary Judgmento Rule 55Defaulto 41(b) Involuntary Dismissalo 41 (a) Voluntary Dismissal

Default

55(a)When the defendant fails to answer a complaint or to show up in court to defendthe claim, a default judgment will be entered

o This rule puts poor and unsophisticated defendants at risk.

o As an alternative, couldnt a court require the plaintiff to prove that it has acolorable claim before allowing default judgment?


45/82

45

55(c)a court may set aside a default judgment for good cause

o 60(b) lays out the grounds on which a court may set aside a default or any othertype of judgment

Courts greatly prefer to see the parties engage on the merits of the dispute.

Peralta v. Heights Medical Center

Failure to give notice violates the Due Process Clause, and default judgment cannot beentered where the defendant did not have proper notice.

If default judgment is entered in that case, then the judgment must be set aside, even if

the defendant did not have a meritorious defense.

Dismissal

Involuntary Dismissals41(b)

Case will be dismissed if the plaintiff fails to prosecute hisclaim (as well as on other

grounds).

Plaintiffs perspective

o Plaintiff may have come across new information which convinced him that hecannot prevail, or for which he needs time to prepare a new strategy.

o Plaintiff may have run out of money to pursue the claim or time to dedicate to the

case.o The lawyer may have taken on too much work and inadvertently missed a

deadline.

Defendants perspective

o Filing a claim is negative for the defendant because it imposes costs and stress onthe defendant.

o Moreover, a court may have attached a lien on the defendants property, limitingthe defendants ability to use or sell the property.

Involuntary dismissal helps to balance the needs of the defendant against the plaintiffsright to sue.

Involuntary dismissal is with prejudice, unless the judge orders otherwisethe plaintiffcannot re-file the claim.

o Is this fair if the dismissal is due to lawyers error?


46/82

46

Voluntary Dismissals41(a)

The plaintiff may dismiss the case without court approval at any time before thedefendant answers.

o

If a voluntary dismissal would harm the defendant, it should answer as soon aspossible to lock the plaintiff into the forum.

o See Texaco Inc. v. Pennzoil (USSC note case, p.530). When it appeared that the trial judge was inclined to rule against the

plaintiff, the plaintiff voluntarily dismissed and refilled in state court, thenwent on to win a $10 billion verdict.

The plaintiff may also dismiss after the defendant answers if it has the defendantspermission or the courts approval.

In this case, the claim is dismissed without prejudice, and the plaintiff can re-file later

o However, if the plaintiff has previously dismissed any other state- or federal-courtaction based on or including the same claim, the dismissal is with prejudice.

Settlement

60-80% of civil lawsuits end in settlement

Courts overseeing litigation frequently mandate some attempt at settlement before a caseis allowed to proceed to trial

o

This trend is going to increase given present budget cuts.

Parties can usually settle without court approval, except in class actions, cases involvingminors, and some multi-defendant cases.

Benefits of Settlement v. Litigation

Reach an agreement faster than by going through the entire trial process.

Saves costs of litigating the entire action.

Settlement saves the risk of trial, both for the defendant and plaintiff.

Prevent evidence from going into the public record.

Attorneys may have an incentive to settle as wella settlement guarantees a plaintiffsattorney working on a contingency basis some compensation.


47/82

47

Types of Settlements

Simple contract stating the plaintiffs agreement not to sue, to seek a voluntary dismissal,or both.

Involuntary dismissalthis is a judgment on the merits, and legally bars the plaintifffrom refiling the suit.

o A more reliable way of preventing the plaintiff from re-bringing suit than a simpleagreement not to refile.

o Under claim preclusion, this also prevents the filing of all related claims.

Stipulated agreementthis incorporates the private settlement into a court judgment, sothat the court can later enforce the settlement if one party creates problems.

o This is especially useful for settlement agreements that call for ongoing

compensation or other benefits.

Parties can stipulate liability, leaving only the issue of damages for trial.

Parties can stipulate damages, leaving only liability at trial.

o E.g. a high-low agreement ($250,000 damages even if jury returns a defenseverdict; $750,000 if jury returns a plaintiff verdict).

Matsushita v. Epstein

Delaware state court approved a global settlement releasing the state law claim and arelated federal claim over which the federal courts had exclusive jurisdiction.

The Full Faith and Credit Act (28 U.S.C. 1738) mandates that the judicial proceedings

of any State shall have the same full faith and credit in every court within the UnitedStates as they would have in the courts of the State which rendered the judgment.

The state court settlement of the federal claim is binding if that states preclusion lawswould have considered the settlement binding on the federal issue.

o Gomez: Most state courts will answer that the settlement is binding, since these

courts generally want to broaden the reach of their subject matter jurisdiction.

This is a powerful statement of the importance of settlement.

Alternative Dispute Resolution (ADR)

Alternative Dispute Resolution Act (28 U.S.C. 651 et seq.) requires each federaldistrict court to implement its own ADR program.


48/82

48

o Some state courts have a similar requirement.

Rule 16(a)(5)pretrial conferences have facilitating settlement as one of their goals.

Mediation

o A negotiation with a facilitating third party who helps to negotiate a settlement.

o Positional mediationzero-sum or adversarial negotiation. These types ofnegotiations tend to focus on arriving at a numerical value settlement, or onobtaining discrete objectives.

o Interest-based mediationwin-win or cooperative approach. This type ofmediator will ask about what interests the parties want to protect, and then willhelp the parties to explore mutually-beneficial alternatives that will advance bothof the parties interests.

o Mediation is often appropriate when the parties have an interest in maintainingongoing relationships.

o Mediators will want to ask which party representatives have settlement authority,what significant monetary and nonmonetary issues are at stake, and what the partyrelationships are.

Arbitration

o Like mediation, there is a neutral third party.

o However, this person actually decides the outcome of the case.

o Arbitration can be voluntary, contract-mandated (e.g. form contracts), or court-mandated, and it can be binding or non-binding.

Confidentiality Agreement

In some cases, one or both parties will want to keep the legal dispute confidential.

o When both parties desire confidentiality, the parties easily agree that such an

agreement should be part of the settlement.

o When only one party desires confidentiality, sometimes the other party willdemand a larger settlement in exchange for her silence.

o Some plaintiffs, however, wantto tell their story and will not be willing to agreeto confidentiality.


49/82

49

Kalinauskas v. Wong

Confidentiality agreements cannot forbid a witness from testifying about past events thatare relevant to another lawsuit.

Kalinauskas may discovery factual information surrounding Thomass case andemployment, but she may not discovery any of the specific terms of Thomass settlement

agreement.

Contracting for Arbitration

Pre-dispute agreements to settle potential disputes through arbitration originated in

dealings between corporations.

Federal courts were initially very hesitant to enforce these agreements.

Federal Arbitration Act (1925)9 U.S.C. 2 et seq.

o 2Congress instructs federal judges to enforce arbitration agreements incontracts evidencing a transaction involving commerce.

o However, a court can still refuse to enforce arbitration agreements if it can do soon grounds applicable to allcontracts, e.g. duress, mistake, unconscionability.

o 3if there is an arbitration agreement, on motion of one of the parties a federalcourt must stay pending litigation until the arbitration occurs.

It is useful to keep the litigation open, in case something goes wrong in thearbitration process (e.g. the arbitration agreement is foundunconscionable).

This also allows either party to turn to the court to enforce any terms fromthe arbitration adjudication that the opposing party might be resisting.

o 4federal court can order a party to participate in the arbitration as requiredunder the contract, so long as the court otherwise has jurisdiction over the lawsuitthrough diversity or some other independent basis.

o

Preemption

The Supreme Court has made clear that this legislation was meant to bind

state courts to enforce this federal policy favoring arbitration agreements.

Where the contract or transaction involves interstate commerce,states must enforce arbitration agreements even when theycontravene state contract law.


50/82

50

Ferguson v. Countrywide (9th Cir.)

Apply state-law contract principles to decide whether an arbitration agreement is

unconscionable.

California contract lawIn order to be held unconscionable, a contract must containprocedural and substantive elements of unconscionability.

o It is procedurally unconscionable if the drafting party had greater bargainingpower, and where the other party had no meaningful choice to alter theagreement.

(The circumstances surrounding the agreement).

o It is substantively unconscionable if the terms of the agreement are so one-sidedas to shock the conscience.

(The substantive terms of the arbitration agreement).

AT&T v. Concepcion

USSC overruled California Supreme Court case holding that an arbitration agreement in aconsumer contract is unconscionable unless it permitted class arbitration.

Purpose of the FAA is to ensur[e] that private arbitration agreements are enforcedaccording to their terms.

Requiring class arbitration when the parties have sought to waive this procedure is

inconsistent with the FAA.

But see Breyers dissent

Ferguson v. Writers Guild of America

An appellate court does not review the merits of an arbitrator(s)s award.

It only examines whether the parties in fact agreed to submit their controversy to

arbitration, whether the procedures employed deprived the objecting party of a fairopportunity to be heard, and whether the arbitrators exceeded their powers.

See the case brief for an overview of the procedures used in this form of arbitration.

Summary Judgment

Need to weed out any clear cases that have survived to the pre-trial stage in litigation.


51/82

51

When the facts are undispute