Legal Three

Civil Procedure Attack Sheet

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by

esquire
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Personal Jurisdiction Overview

Introduction

  1. Pennoyer v Neff: originally found that for the state to exercise power over individuals or property there must be valid service of process on the individual or attachment of property in the state.
    1. No 14th Amendment yet but said that due process would apply the same limitations on exercise of jurisdiction.
    2. Originally, decided that have to have personal service for in personam.
      1. Ok if just in state for short amount of time: transient jurisdiction
      2. BUT, not ok if obtained by fraud
      3. Seizure of property after judgment was not ok. But seizure of property before is ok.
    3. Exceptions:
      1. Status – divorce cases
      2. Consent
  2. International Shoe – shift to minimum contacts
    1. DP only requires that the D have certain minimum contacts with the forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.
    2. Systematic & continuous activity with forum state is ok.
    3. Single contact ok – if contract sued on had a substantial connection with the State.
      1. BUT – need some act by which the D purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits & protections of its laws.

 

Contemporary Constitutional Grounds for State Court Jurisdiction

  1. Contacts with Forum – two-stage analysis for determining J
      1. Factor to consider include:
  1. Purposeful availment – minimum contacts – focuses solely on the D’s activities and not on the interests of the P.
      1. Looks to some voluntary action by the D establishing a relationship with the forum, usually one in which the D seeks to benefit from the relationship with the forum.
      2. Foreseeability that a suit might be filed in a forum is insufficient. Should be that the D’s conduct and connection with the forum State are such that he should reasonably anticipate being hailed into court there.
        1. Unilateral act of P – insufficient: act of brining a product to the forum or relocating in the forum is insufficient (WW VW)
        2. But, when entering into a long-term relationship with a forum resident, it is sufficient (Burger King)
        3. Seeking to serve ok – if D regularly engages in activities in forum state, or markets in the forum state (WW VW). This is the case even if it is a single act (McGee)
        4. Stream of Commerce ok – a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum state is ok (WW VW).
          1. But, ends with the retail sale – even if it is foreseeable that the purchaser will take the product to another state.
          2. Manufacturer or component supplier – split opinion
            1. Placing a product in the stream of commerce is insufficient, some additional conduct by which the D indicates an intent or purpose to serve the forum state is essential.
            2. Jurisdiction ok over a component supplier whose product was sent into the forum state as part of the product manufactured by its customer.
        5. Effects test – Intentional torts – J ok, because D intended that his actions could have an effect in that forum (Calder v Jones). Intended to reach wrongful activity outside of the State causing injury within the State or commercial activity affecting State residents.
      3. Specific Jurisdiction: Claims related to the forum contacts that satisfy the purposeful availment requirement are ok.
      4. But, similar claims that are not evidently connected with the forum contacts are a problem. Focus on the foreseeability elements. If the claim actually asserted is of the type the D should have foreseen in the forum, it is fair to subject the D to jurisdiction even if this particular claim does not arise from the D’s contacts.
      5. Choice of law clause in a contract usually makes jurisdiction ok, although not just by itself
    1. Fair play and substantial justice – reasonableness factors, consideration focuses on the P’s interests
      1. The burden on the D to defend the litigation in the forum
      2. The forum state’s interest in adjudicating the dispute
      3. The P’s interest in obtaining convenient and effective relief
      4. The interstate judicial system’s interest in obtaining the most efficient resolution of the dispute
      5. The shared interest of the several states in furthering fundamental substantive social policies
    2. Presence of D’s Property in Forum – Quasi in rem and in rem J have been curtailed since Harris v Balk. Nevertheless, the presence of the D’s property in the J often may suffice to make J constitutional, but ordinarily only b/c it establishes a relevant contact between the D and the forum.
      1. Contacts test – Shaffer held that the minimum contacts analysis should be applied to J over property, reasoning that J over a thing is an elliptical way of referring to J over the interests of persons in a thing and should therefore be viewed as analogous to PJ in terms of protection of those interests.
      2. But, when property is completely unrelated to the P’s cause of action, its presence alone will not suffice to support J. (Shaffer).
  1. Specific v General J
    1. General: When there is not a sufficient relation between the contacts and the claim, D is subject to suit on any claim in the forum (if J is established). (Helicopteros)
    2. Specific: gives rise to J only for claims related to the jurisdictional contact with the state.
    3. Natural Persons – General J is available in the state of a person’s domicile – place where you presently reside with the intent to make it one’s home for an infinite period of time. Home address if away at school, etc (Mas v Perry).
    4. Corporations – Subject to general jurisdiction in its state of incorporation & in the state in which its headquarters are located.
      1. Also, corporations have been subject to suits on unrelated claims in states in which they conduct “substantial activity.” But, distinguish – purchase of equipment and execution of contract in forum (Helicopteros) is insufficient
  2. Consent to J
    1. Express consent
    2. Implied consent
    3. Appearance
      1. Consent to jurisdiction to decide jurisdiction – By moving to dismiss for lack of PJ, the D consents to the power of the court to decide that question, including the power to order discovery pertinent to the jurisdiction question. (Insurance Corp of Ireland).

 

Statutory Authorization for Jurisdiction (Long-Arm Statutes)

  1. Long Arm Statutes – most long arm statutes designate specific acts as warranting the exercise of jurisdiction. (CA’s is to the extent that due process allows).
    1. “Arising out of” requirement – If designate specific acts, require that claims arise out of that act. The analysis made is of the relationship between the contacts and the claim as a matter of state law, rather than as a matter of federal constitutional law.
  2. Federal Court J – federal courts exercise J no broader than that authorized by state long arm statutes.
    1. In personam J
      1. Subject to J of state court – Process from a federal court will confer J over a D if the D would be subject to J of a court of general J in the state in which the federal court is located.
        1. FRCP 4(k)(1)(A) – If the D could be served in a suit in the state where the federal court is located, the D can also be served in a federal court suit.
      2. Minimum contacts with US – for claims arising under federal law, federal courts can exercise J even though the D is not subject to the J of the courts of general jurisdiction in any state, if this would be consistent with the Constitution. This situation usually involves a foreign defendant. (FRCP 4(k)(2)).
    2. In rem J
      1. The federal court may assert J by seizing a D’s assets found within the district only if the D cannot be served by an otherwise authorized means, and then only in the manner provided by the law of the state in which the district is located.

 

Venue

  1. Federal Venue Limitations
    1. Defendant’s residence – venue is proper where any D resides, if all Ds reside in the same state, whether federal subject matter J is based on diversity of citizenship or a federal question. (28 USC 1391(a)(1)(b)(1)).
    2. Venue is proper in a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, whether federal subject matter J is based on diversity of citizenship or a federal question. (28 USC 1391(a)(2), (b)(2)).
    3. Fallback venue – used when other venue requirements cannot be satisfied in any district (28 USC 1391(a)(3), (b)(3)).
      1. In diversity of citizenship cases, venue is proper in any district in which a D is subject to PJ at the time the action commenced.
      2. In cases in which federal subject matter J is not based solely on diversity of citizenship, is proper in a district in which a D can be “found” (where the D can be served with process). (28 USC 1391(b)(3)).
  2. Removal cases
    1. Where a case is removed from state to federal court, it is assigned to the district encompassing the state court in which the action was pending, regardless of the residence of the parties. (28 USC 1441(a)).
  3. State Venue Limitations
    1. Defendant’s Residence – traditionally, in personam actions can be brought in the county where the D resides; and where multiple Ds are sued, the action may be proper in any county where one of them resides.
    2. Where claim arose – In CA, most types or claims (tort claims) can be brought where the claim arose.
    3. Where the action affects title to real property, venue is usually the county where the property is located
  4. Litigating Venue – as with PJ, improper venue may be waived unless raised in the proper way. In federal court, it is waived unless it is raised in the first Rule 12 motion or in the answer if the is no Rule 12 motion (FRCP 12(h)(1)).
    1. Where the D timely objects to venue, the court cannot proceed with the case. It may dismiss, but in most Js it can also transfer the case to a court that is a proper venue.
    2. Federal Transfer Provisions – federal case may be transferred to another federal court in the following circumstances:
      1. Venue or J improper in original court
      2. Transfer for convenience of the parties and witnesses, in the interests of justice.
        1. Authorizes transfer only to a district in which the action might have been brought in the first place. This means that the transferee district must be a proper venue and have valid PJ. The moving party’s willingness to waive objections to venue or personal J does not satisfy this requirement.
      3. Procedure
        1. Either the P or the D can move to transfer (Ferens v John Deere).
        2. The P’s initial choice of forum should be respected, and the transfer is proper only when the balance of conveniences strongly favors the transfer. This showing should look to the identity and location of witnesses, access to items of real evidence, and any other factor that would make trial in the transferee forum more convenient.
  5. Forum Selection Clause – where parties have entered into a contract containing a forum selection clause concerning the dispute in question, the SC has stated that the presence of the clause should be a significant factor in determining whether to transfer the case to the forum designated.
  6. Effect on Choice of Law
    1. Venue and jurisdiction proper in original court – In cases where the P sues in a court that has proper venue & J, a transfer for the convenience of the parties does not affect choice of law because the transferee court is to apply the same choice of law rules that the transferor court would have applied (Van Dusen v Barrack). This applies even when the transfer is on motion of the P who chose the inconvenient forum in the first place and thus could shop for a more favorable law.
    2. Venue or jurisdiction improper in original court – If the P could not have overcome the D’s venue or J objections in the original court, the choice of law rules of the transferee state should usually be applied.

 

Forum Non Conveniens – even when J and venue are proper, courts may decline to exercise J on the ground that the location the P selected for the case is grossly inconvenient.

  1. Present Use
    1. Federal Courts – when the inconvenience problem can be solved by transfer to another federal district, the court may not dismiss; but if the proper forum is in another country, the federal court can dismiss (Piper Aircraft).
    2. State courts – when the more convenient court is not with the state and transfer is therefore not possible, forum non conveniens remains an important device
    3. Procedure – The D must make a motion to dismiss on grounds of inconvenience
      1. Showing required – The D must show that the P has selected a grossly inconvenient location for the suit.
      2. Factors – consider private & public factors in making a decision whether to dismiss on forum non conveniens grounds.
      3. Weight given P’s choice- Usually substantial weight is given to the P’s choice to sue in a forum where venue and J requirements are satisfied. When the P is foreign, however, the deference is not warranted (Piper Aircraft).
      4. Adequate alternative forum available – the court cannot dismiss unless an adequate alternative forum is available to the P.
    4. Effect on Choice of Law – because forum non conveniens results in a dismissal, the P must file a new suit, and the choice of law rules that apply are determined by the forum of the new suit.
    5. Contractual Limitations on Forum
      1. Federal law – generally enforceable
      2. Such clauses are generally enforceable even where they result in dismissal because the forum chosen is in another country. Moreover, the forum selection clause on a printed passenger ticket is enforceable even though not the subject of bargaining, unless enforcing it would violate fundamental fairness. (The Bremen & Carnival Cruise)

Notice

  1. Constitutional Requirements – DP requires that reasonable efforts to provide notice be made with regard to persons whose interests are to be determined (Mullane).
    1. Method – must have a reasonable prospect of giving actual notice
    2. Efforts to identify – reasonable efforts to identify and locate effected persons are required.
    3. Constructive Notice – when a person cannot be located after reasonable efforts, published or other constructive notice will suffice.
    4. Effect of failure to receive – if a constitutionally valid procedure is used, the judgment is binding even if some interested parties do not actually receive notice. Due process requires reasonable efforts to provide notice, but SC cases have never required actual notice.
    5. Duty to make further efforts if notice not received – when the state learns that its initial efforts at giving notice failed even though they were reasonable, it must take reasonable additional steps to provide notice (Jones v Flowers).
    6. Service in diversity cases – the service procedures of FRCP 4 are to be applied

 

Prejudgment Seizures

  1. State law requirements – Before considering possible constitutional objections to state procedures, first consider whether the prejudgment seizure sought by the P is authorized by state law.
  2. Procedural due process requirements for prejudgment seizure
    1. Sniadach – garnishment of wages – the State violated a D’s due process rights by allowing prejudgment garnishment of wages. The opinion contained suggestions that wages might be viewed as a special type of property because they are essential to everyday life.
    2. Fuentes – seizure of chattels – Court invalidated FL & PN procedures for writs of replevin that authorized the seizure of property, because there was no provision for notice and a pre seizure hearing.
    3. Exception for extraordinary situations – three factors to overcome these rights:
      1. Such seizures should be directly necessary to secure an important governmental or general public interest
      2. Such seizures without notice may occur only where delay would be inimical to the public interest
      3. Such seizures should be limited to circumstances in which the state controlled the initiating of proceedings.
    4. Mitchell – the court upheld LA’s procedure allowing the seller of several household appliances to obtain a writ for their seizure when the D missed payments
      1. Mitchell requirements – Fuentes distinguished
        1. They required more than the conclusory claims of ownership called by the state procedures at issue in Fuentes
        2. Where this case arose, the practice was that a judge (rather than a clerk) would pass on the application for the writ
        3. Narrowly confined issues were presented by the application for the writ in LA in contrast to the broad “fault” standard applicable in the statutes at issue in Fuentes
        4. The D is LA had a right to an immediate hearing on whether the P was entitled to the writ, and the burden remained on the P to justify the issuance of the writ.
    5. Di-Chem – the court struck down Georgia’s garnishment procedures. Its description of the distinguishing factors that made the case different from Mitchell provide a guide to important constitutional criteria.
      1. Property not the subject of the suit – unlike Fuentes and Mitchell, the property in Di-Chem (a bank account) had no intrinsic relation to the claim
      2. Purpose of due process requirements – The procedure in Fuentes was unconstitutional because the seizures there were carried out without notice and without opportunity for a hearing or other safeguard against mistaken repossession. This seemed to revise the thrust of the Fuentes opinion, which treated the presence of safeguards as bearing on the type of hearing required, not the need for pre-seizure notice at all.
    6. Doehr – the Court struck down Conn’s provision for attachment of real property without prior notice and an opportunity for a hearing as applied in this case. Followed a three-step analysis based on MATHEWS
      1. Private interest – The interests of a homeowner were significantly affected by attachment even though it did not interfere with possession of the property because attachment can cloud title, impede sale, and interfere with barrowing on the property.
      2. Risk of erroneous deprivation – there was a substantial risk of an erroneous deprivation because the state practice allowed decisions based on a conclusory affidavit without prior notice and adversary hearing, and the underlying issue in the case did not lend itself to documentary proof.
      3. Governmental interest – Conn had no significant interest in allowing a private P to attach D’s property without notice or a showing of exigent circumstances, in view of the fact that other states have more exacting requirements for seizure without notice.
    7. Effect of Doehr – appears to have the following effects besides prescribing the three-part analysis of Mathews:
      1. Exigent Circumstances – Proof of such may be constitutionally necessary to permit seizure without notice.
      2. Effect of preexisting interest in property – less rigorous standards might apply when the P is asserting an interest in the property that antedates the suit (mechanic’s lien).
      3. Type of claim – only claims that can be reliably evaluated on documentary proof may be the basis for seizure without notice
      4. Due process limitations if hearing held before seizure – even if a hearing is held before seizure, procedural due process may limit seizure unless the above criteria are satisfied.

Subject Matter Jurisdiction of the Federal Courts

Questions to ask:

  • Is jurisdiction available under the general diversity jurisdiction statute?
    • Jurisdictional amount – more than $75,000
    • Do special jurisdictional provisions apply to this case?
  • Is jurisdiction available on the ground that the suit raises a federal question?
    • Federal Claim
    • State law claim raising a federal issue: Even if the P is not asserting a claim created by federal law, there may be grounds for federal court jurisdiction if the assertion of a state law claim turns on the resolution of a federal issue. Assuming the complaint alleges a federal issue, the question is whether it meets the well-pleaded complaint test – i.e., whether the inclusion of the federal issue is necessary as a matter of pleading to state a claim. Thus, P’s anticipation of a defense based on federal law that D is certain to raise is not sufficient to establish federal court J. Also, if the federal ingredient is necessary to a P’s claim, the federal issue must be substantial, because the determination of the state law claim turns on resolution of the federal issue, and it may be important to ask whether there is a federal interest in having the claim in federal court.
    • If the case was originally filed in state court, have D’s properly removed it to Federal court? – In general, Ds may remove the case to federal court whenever the P could originally have filed the case in federal court on grounds either of diversity or federal question. Consider specialized aspects of removal:
      • Timely notice of removal by all Ds: There is a short time frame for removing a case to federal court, and all defendants must usually join in removing the case.
      • Whether case was within federal court’s original J – Ds ordinarily may remove the case only if it would have been within the federal court’s original J had P filed it in federal court. But note that sometimes this is not sufficient. For example, even if there is complete diversity of citizenship, removal is generally not available on grounds of diversity of citizenship if one of the Ds is a citizen of the state in which the suit was filed.
      • Alternatively, whether case involves a separate and independent claim arising under federal law – in one situation, removal J is broader than original J. If a D is sued on a claim arising under federal law that is entirely separate from the other claims asserted in the case, it may remove the case on that ground even though P could not initially have filed the case in federal court
      • Once removed, whether case is subjects to remand to state court- if the case was improperly removed to federal court, the federal court may remand it. Even if removal was initially proper, if all federal claims have been dismissed, or if P was allowed to amend to add non-diverse Ds in a diversity case, the federal court may remand.
    • Can Supplemental J be used to add claims or parties to the case? – when a claim is properly before a federal court, the court may have supplemental J over additional claims against existing parties or against additional parties. If you are presented with such additional claims or parties, consider the following issues:
      • Constitutional limits of federal judicial power – the federal court may exercise J over the additional claims only if they are part of the same constitutional case, which usually depends on whether the additional claims arise out of the same common nucleus of operate fact as those within the federal court’s original J.
      • Special limits on supplemental J in diversity cases – to safeguard the complete diversity requirement, supplemental J is limited when Ps want to use it in cases that fall within diversity J.
      • Discretionary decline of J – even of supplemental K is authorized by statute, the district court has discretion to decline to exercise it due to the complexity of state law, because the state law claim substantially predominates, or because the court has dismissed the claim over which it had original J.

Introduction

  1. Lack of subject matter J is not waivable so it may be raised as a basis for dismissing a case at any time.
    1. D may raise objection at any time – even after final judgment has been entered and the case has been appealed on other grounds.
    2. Even if the parties do not raise the issue, the court is to raise subject matter J on its own motion.
    3. J must be resolved before court addresses merits of suit
    4. Federal Courts’ J
      1. Constitutional Grant – Article III, section 1 of the USC established the SC and gives Congress the power to create inferior federal courts. Section 2 sets out the scope of the federal judicial power. It provides that, among others, the federal courts may hear cases: arising under the Constitution or federal law, affecting ambassadors, or between citizens of different state. To be constitutional, an exercise of jurisdiction be a federal court must be within the scope of power granted by Article III section 2.
      2. Statutory Grant – It is not enough that an exercise of federal J is merely permissible under the Constitution. There must also be some statutory grant by Congress vesting the federal courts with J. Unless Congress has vested a federal court with J, the fact that it might do so without violating the Constitution is irrelevant.

Diversity Jurisdiction

  1. Diversity Statute – There are two main prerequisites to diversity J under the statute: diversity of citizenship and a minimum amount in controversy
    1. Diversity of citizenship
      1. Complete diversity requirement – no D can have the same citizenship as any P.
        1. Alienage diversity J – section 1332(a)(2) confers federal subject matter K over cases involving a citizen of the US and a citizen of a foreign country, and section 1332(a)(3) confers federal subject matter J over cases involving completely diverse citizens of the US in which aliens are additional parties.
      2. How is citizenship determined
        1. Corporations – for diversity purposes, a corporation is deemed to be a citizen of every state in which it is incorporated and of the state in which it has its principal place of business.
        2. Distinguish – venue – a corporate D is usually treated as a resident of every state in which it is subject to PJ, not merely its principal place of business.
        3. Time for determination – Diversity need only exist at the commencement of the action
        4. Partial exception, removal – Where an action is removed to federal court from state court on grounds of diversity, diversity must exist at the time of filing of the suit and on the date of filing of notice of removal.
        5. Efforts to create diversity – 28 USC 1359 provides that there shall be no J when a person has collusively or improperly been made a party or joinder in order to invoke federal J.
    2. Jurisdictional amount – more than $75,000 must be in controversy
      1. Good faith limitation – the claim for damages set forth in the complaint is determinative of the amount in controversy if the claim was made in good faith; there need only be some legal possibility of recovering the minimum amount.
      2. Effect of judgment for lesser amount – does not affect the J of the court, as long as the claim was made in good faith. The court may, however, deny P costs of suit or impose them on the P.
      3. Aggregation of claims to satisfy requirement – whether separate claims for less that the J amount can be aggregated to satisfy the J requirement depends on a number of factors.
        1. Claims of single P against single D – all claims of the P against the D, whether or not related, can be aggregated to meet the minimum
        2. Claims of single P against several Ds – Only claims for which all Ds are jointly liable to the P may be combined.
        3. Claims of several Ps against single D – claims can be aggregated only if they have a commonly undivided ownership interest in the claims.
        4. Counterclaims – in general, the amount sought on a counterclaim cannot be aggregated with a P’s small claim to satisfy the J minimum.
    3. Exceptions to exercise diversity J – although the diversity statute does not limit the subject matter of cases brought in federal court, the courts decline to exercise J in some types of cases.
      1. Domestic relations
      2. Probate proceedings
      3. Local actions

Federal Question J

  1. Constitutional Grant – federal judicial power extends to:
    1. Cases in law and equity arising under the Constitution, the laws of the US, and treaties
    2. Cases affecting ambassadors, consults, etc
    3. Cases involving admiralty and maritime J
    4. Cases to which the US is a party
  2. Federal Question Statute
    1. 28 USC 1331 – used language very similar to that in the Constitution, granting the federal courts J to hear all civil actions arising under the Constitution, laws, or treaties of the US.
  3. Well-pleaded complaint rule – Generally, a federal court will have a federal question subject matter J unless the federal question appears in the P’s “well-pleaded complaint.” Federal questions raised by an answer to a complaint are not sufficient.
    1. Federal elements of nonfederal claim properly included under pleading rules – Sometimes a P who has a state law claim will want to sue in federal court but cannot bring diversity action. Such a P might try to get the case into federal court by injecting a federal law issue unto the complaint even though it is not required to be included by the rules governing pleading. This does not suffice to support federal question J. The federal issue must be an element of the state-law claim that is required to be included in the complaint to state a claim under the applicable rules of pleading, for that is what makes these allegations well-pleaded.
    2. Anticipation of defense insufficient – similarly a P who wants to sue in federal court may try to raise a federal question to invoke J by including in his complaint allegations relation to a federal law defense that the D might raise. Such an allegation – in anticipation of a defense – is not a sufficient basis for federal question J. Under a well-pleaded complaint rule, allegations going to an anticipated defense are not required to be in a complaint.
    3. Federal counterclaim insufficient – Like a federal defense to a state law claim, a counterclaim based on federal law, even if compulsory, does not create a federal question that justifies J under 1331. The D should not be able to defeat a P’s right to have a state law claim heard in state court by asserting a counterclaim based on federal law.
    4. The Supreme Court J – the well- pleaded complaint rule does not apply to cases appealed from state courts to the US SC. Thus, even though a lower federal court does not have smj to hear a case because the federal claim arises only as a defense, the SC may hear an appeal from a state court judgment entered in essentially the same case.
      1. Supplemental J – If a court dismisses for lack of J, it cannot hear any part of the case. However, if the court decides it has J and then dismisses for failure to state a federal claim, it may exercise supplemental J over related state law claims and retain the case. But, because state law claims should usually be dismissed as a matter of discretion if the federal claims are dismissed early in the action, this possibly is rarely important.
    5. No J amount – where the court’s federal question J is properly invoked, there is no minimum amount in controversy requirement.

Supplemental Jurisdiction

  1. Introduction
    1. Effect- decision may be based on state law alone – federal courts exercising federal question J can rest a decision entirely on issues of state law, without reaching issues of federal law. Where federal constitutional issues are raised, there is often the preferable approach, because it is said that courts should two to avoid unnecessary decisions of matter of constitutional law.
    2. Ancillary J – allowed the court to entertain claims of others to the property even though the court had no independent basis for J over those claims. Generally, ancillary J was related to the claims made by the P.
    3. Pendent J – developed in cases where the P had both federal and nonfederal claims against a non-diverse D arising from the same event. The court was said to have J over the state law claims, which are appended to the federal claim. Thus, it referred to the assertion of nonfederal claims by the P that are related to the P’s federal claim.
    4. Supplemental J Statute
      1. Jurisdiction power to limit of Constitution – the statute grants federal courts that have original J over a claim supplemental J over all other claims that form part of the same case or controversy under Article III. The focus of the constitutional inquiry is whether the claims sought to be added to those within federal J are part of one constitutional case. (United Mine Workers v Gibbs).
        1. Standard for Supp J in federal Q cases – in United Mine Workers v Gibbs, the SC articulated the following three-part test to determine whether a federal court has the power to entertain pendent claims:
          1. Substantial federal claim – the federal claim must be sufficiently substantial to support federal question J
          2. Common nucleus of operative facts – the federal and nonfederal claims must derive from a common nucleus of operative fact.
          3. One judicial proceeding – the federal and nonfederal claims must be such that the P would ordinarily be expected to try them in one judicial proceeding
        2. Diversity cases – The same test may apply to determine the outer constitutional limits of diversity J.
          1. Exception for diversity cases – when federal subject matter J is founded solely on diversity of citizenship, supplemental J is limited. The legislative history indicates that this was done to implement the rationale of Owen. This represents Congress’s adoption of the complete diversity requirement long ago adopted by the SC.
          2. Claims by P – In diversity-only cases, there is no supp J over claims by Ps against persons made parties under Rule 14 (impleader), Rule 19 (necessary part joinder), Rule 20 (permissive party joinder), or Rule 24 (intervention).
        3. Discretionary decline of J – the statute explicitly authorizes district courts to decline J in certain circumstances that largely implement discretionary factors identified in United Mine Workers v Gibbs
          1. Grounds to decline – a federal court may decline to exercise supp J, but only on the basis of one of the following four grounds.
            1. Novel of complex issue of state law – if the law to be applied to the nonfederal claim is uncertain, the district court may decline to entertain that claim so that the parties can get a surer-foot reading of applicable law from a state court.
            2. Nonfederal claim substantially predominates – the federal court may conclude that the nonfederal claim is the real body of the case. (1367). The court should not tolerate a litigant’s effort to impose upon it what is in effect only a state law case
            3. All original J claims dismissed – if all claims over which the federal court had original J are dismissed, the court may dismiss the nonfederal claims. (1367). In deciding whether to do so, the court should consider the amount of time invested in the case by the court.
          2. Extraordinary circumstances – the federal court may also decline to exercise supp J in extraordinary circumstances if there are other compelling reasons for declining J.
          3. Complication of case – in United Mine Workers, the Sc said that complication of the case in federal court would justify refusal to entertain the nonfederal claims. It has been held that this ground for decline of J was limited by the statute to instances in which the district court finds that exceptional circumstances exist in the case and that these provide compelling reasons for decline of J.
          4. Timing of decision – the question whether to decline to exercise supp K remains open throughout the case.
        4. Tolling of limitations – the limitations period for any claim asserted under sup K, or any other claim in the same action voluntarily dismissed at the same time or later, is tolled while the claim is pending in federal court and for 30 days after the federal court dismisses it.

Removal

  • Removal allows a D to shift a case from state court to federal court when the P has chosen to sue in state court.
  1. Grounds for Removal – in general, if the P files an action in state court but could originally have filed in federal court, the D can remove the action to the federal court. (1441) Note that there are exceptions to this rule
    1. Federal question – if the P’s state court complaint raises a federal question, the D may remove.
      1. Federal defenses not considered – the well-pleaded complaint rule applies in the removal situation. Thus, the fact that the D has raised a federal defense to the P’s state law claim is not sufficient to support removal
      2. Federal counterclaim not considered – the fact that the D has interposed a counterclaim asserting a federal claim does not provide a basis for removal on federal question grounds
      3. P omits federal claim – if the P chooses not to assert a possible federal claim, the D may not remove the case by citing the unasserted claim.
      4. Amendment to assert federal claim – if after filing in state court, the P amends the complaint to assert a federal claim, the D can them remove the case. Note that if the P does not amend the complaint, res judicata may bar assertion of the federal claim in a later action.
      5. Exception: complete preemption – If federal law completely preempts state law on the matter and converts the P’s claim into one of federal law that satisfies the well-pleaded complaint requirement and makes the case removable.
    2. Diversity of citizenship – If the P could have filed the action in federal court using diversity of citizenship J, the D may remove the case to federal court. Not that the complete diversity requirement applies in this situation.
      1. Local D – however, such removal is not permitted if any F is a citizen of the state in which the action is brought. Rationale: since diversity J is designed to protect against local prejudice, there is no reason to invoke it on behalf of a local party.
    3. Separate and independent federal claim – A D sued on a separate and independent claim or cause of action within federal question J may remove, even if the P has joined non-removable claims. For example, a D sued for breach of contract and an unrelated violation of federal antidiscrimination law can remove the case to federal court. Rationale: such removal protects the D’s right of removal of a federal claim so that the P cannot prevent removal by joining a wholly unrelated claim.
      1. Entire action removed – where the separate and independent claim requirement is satisfied, the federal court may retain J over otherwise non-removable claims or remand them to state court.
    4. Exception – removal forbidden in employment injury cases – suits brought in state court against a railroad under the Federal Employers’ Liability Act (FELA) or under state workers’ compensation laws are not removable. (28 USC 1445). The rational for this limitation is to allow injured workers to pick the court in which they wish to have their claims decided.
    5. Procedure for Removal – a D seeking removal must file a notice setting forth the facts supporting removal in the federal district court and division within which the action is pending. A copy of the notice should be sent to the other parties and to the state court.
      1. Only D can remove – only D has the power to seek removal. Even if the D asserts a federal claim as a counterclaim, the P may not remove.
      2. All D’s must join
    6. Timing – the notice of removal must be filed within 30 days after the time the case becomes removable. If the action is removable as filed, the 30 days begin running from the time process is served on the D. If the action becomes removable only due to some later development, the 30 days begin running from that point. However, removal on grounds of diversity is not allowed more than one year after commencement of the action (28 USC 1446(b)).

Relation between State and Federal Law – ERIE

  • Erie Doctrine
  • In state law matters in the federal courts, state substantive and federal procedural law are followed
    • First ask whether there is a true conflict – are there both federal and state rules of law that purport to apply and cannot be harmonized? There is no true conflict if a federal rule or practice does not exist and state law is of a substantive nature; or the federal and state rules, while related, do not speak to exactly the same point; or the two rules agree. In such cases, no choice of one or the other is necessary.
    • Second, if there is a true conflict, look to the source of the potentially applicable federal rule of law; the tests for the federal rule’s validity and governing force varies depending on whether it derives from the Constitution, a statute enacted by Congress, a court rule promulgated under the Rules Enabling Act, or purely from decisional law (as opposed to interpretation of Constitution, an Act of Congress, or a Federal Rule).
      • Is the federal rule of law grounded in the Constitution itself? If so, the federal rule governs, without regard to the source, importance or substantive nature of any contrary state rule.
      • Is the federal rule of law found in an Act of Congress? Is so, it governs as long as it is constitutional – i.e.,
        • It falls within the broad powers of Congress
        • It does not violate any independent federal constitutional right
      • Is the federal rule of law an FRCP? If so, the Rules Enabling Act provides the principal tests for its validity: It must be arguably procedural, dealing with practice, procedure, or evidence, and must not abridge, enlarge or modify an substantive right. If it passes theses tests, the federal rule governs.
      • Is the federal rule of law judge-made (the equitable doctrine of laches ex)? If so, it should not govern in federal court if it fails the twin aims test
          • If the federal courts do not follow the state rule, will it encourage forum shopping between state and federal courts and inequitable administration of the laws by providing different, and possibly outcome affecting, regimes of applicable law.
        • Certain judge-made-law cases involve an essential characteristic of the federal court system, such as relations among the jury, trial judge, and appellate court. In such cases, it might be necessary to balance state interests against those served by a decisional federal rule, or to see whether the state and federal interests both can be accommodated.
  • Federal Common Law – Although in Erie the Sc state that “there is no federal general common law,” in several areas of special federal authority or interest, the federal courts may develop federal common law by borrowing or even preempting state law. You made need to ask whether a case involves
    • A need to borrow state law (such as a statute of limitations for a federal claim when Congress has enacted none)
    • An express or implied authorization from Congress for the federal courts to develop federal common law
    • A federal interest significant enough to call for uniform federal decisional law

 

State Law in the Federal Courts

  1. Rules of Decision Act (28 USC 1652) – “the laws of the several states, except where the Constitution or treaties of the US or Acts of Congress otherwise require or provide, shall be regarded as rules of decision in civil actions in the courts of the United States, in cases where they apply.”
  2. Former rule: Swift v Tyson – For almost a century, the prevailing interpretation of the reference to states law s in the RDA was that it did not include state common law of a general, as opposed to local, nature. Thus, the federal courts could and did follow their own view of what the general common law was or should be. The federal courts’ decisions on this general common law, however, were not binding precedent on the courts of the states; consequently, different rules of substantive law could apply to the same transaction, depending on whether litigation took place in state or federal court.
    1. Note – even under Swift, federal courts were bound be applicable state statutes
  3. Difficulties of Swift Regime
    1. Changing attitudes toward law
    2. Failure to achieve uniformity – Uniform common law failed; and thus, Swift came to be seen as allowing the federal courts to add one more regime of common law rather than taking part in the development of one true set of common law doctrines.
    3. Practical difficulties and unfairness – Swift led to forum shopping. Because the federal courts often applied common law rules different from the law of the states in which they sat, litigants could manipulate federal J to gain favorable substantive law.
    4. Doubts about Swift interpretation – Swift also came into doubt because historical research on the adoption of the original RDA questioned whether the drafters had intended to exclude general common law from the term laws of the several states
    5. View on the constitutional scope of federal power – Finally, there seemed to be no constitutional basis for the federal courts’ lawmaking authority that existed under Swift. The decision appeared to presume a general law-making power in the federal courts of a sort that the Constitution does not grant to Congress, and which Congress had not attempted to confer on the federal courts.
  4. Overruling of Swift by Erie – Erie held that in the absence of an Act of Congress providing governing law, a federal court should follow applicable state common law principles rather than developing and applying its own general common law.
    1. Reasoning of Erie
      1. Statutory interpretation – The Court accepted the argument that the language of the RDA was not intended to exclude all state general common law. Instead, the term laws of the several states includes state common law, general and local, as well as positive law like state constitutions, statutes, regulations, and ordinances.
      2. Lack of uniformity and resulting discrimination – The Erie majority also noted the persistence of differing views on common law questions between the state and federal courts, and the possibility this created for discrimination among litigants depending on the forum in which the case was tried.
        1. Discrimination by noncitizens against citizens – An out-of-state party has the control to choose the forum – federal or state – in diversity litigation. An out-of-state D often can effect removal regardless of who controls the forum choice, discrimination among litigants depending on the forum and what law it may apply remains a concern.
      3. Principal cases developing Erie – Erie solves many old problems buy opened up new ones, especially in cases in which the competing federal and state rules that might apply were in the borderland between substance and procedure. The SC has repeatedly said that in matter in the federal courts arising under state law, the general guideline is that state substantive law and federal procedural law govern.
  5. Guaranty Trust Co v York – presented the question whether a state statute of limitations or the more flexible federal decisional rule of laches – which asks whether delay has been excessive and caused the other side prejudice – should determine the timeliness of an equitable state law claim filed in federal court.
      1. Specific Holding Note – Regardless of the fluctuations in the Erie doctrine since York, this holding – treating state statutes of limitations as substantive for Erie purposes – still stands
  1. Outcome Determination Test – will application of federal law instead of the state law significantly affect the outcome of the litigation?
  1. The Byrd balancing approach – the Court appeared to signal another departure by at least demoting the outcome determination factor to one among several – to be balanced along with federal and state interests in the rules that could be applied.
    1. Specific holding – Byrd was a federal diversity case. The issue was whether federal or state law should govern the manner of determining an ancillary state law issue (the status of an outside contractor’s employee under a workers’ compensation law. Under state practice, the judge determined status; in federal court, such issues went to the jury. The court held in factor of the federal rule.
    2. Balancing approach – Byrd discusses three main types of factors that could bear on the choice between the state and federal rules.
      1. Relation between state rule in question and underlying state right – Is the state procedural practice an integral part of the state substantive right, or if the state system followed it for some independent reason that might relate more to state court internal housekeeping and, therefore, have less call to be followed in federal court.
      2. Countervailing interests of the federal judicial system – The Byrd court also looked to the strength of the federal policy involved – i.e., the relationship between judge and jury in federal court – and the danger that following the state rule would disrupt that policy. The federal interests relevant to this inquiry fall into a narrow range; they do no pertain to the substance of the law, but rather involve the federal courts’ interest in their own smooth functioning and in the uniformity and coherence of the decisional principles they have evolved to govern their procedures.
      3. Likelihood of effect on outcome – Finally, the Court looked to the Work outcome determination tests and decided that following the federal practice would not likely have an effect on the outcome of the suit.
  1. Approach under Hanna v Plumer – When FRCP arguably conflict with the law that would apply in state courts, usually apply the FRCP
    1. Specific holding – FRCP 4(d)(1) (now Rule 4(e)(2)(B)), allowing substituted service or process on a D’s spouse at their home, rather than the personal service required by Mass law, was valid and controlling, even though the substituted service would not have sufficed had the same state law action been brought in Mass state court.
    2. Hanna twin aims – discouragement of forum shopping and avoidance o inequitable administration of the laws.
      1. Application – although the Court decided that Hanna was not the type of case to which the modified York test applied, the Court implied that if it did apply, the Federal Rule would govern because the different rules in federal and state court regarding service of process would neither encourage forum shopping nor cause unfair discrimination among litigants.
    3. Holding with respect to validity of Federal Rules – The Twin Aims applied to the typical relatively unguided Erie choice, but did not apply here because Congress had provided a different standard in the REA, under which the Federal Rules are promulgated. That Act gives the SC the power to adopt Federal Rules regarding practice, procedure, and evidence in the federal courts, as long as the Rules do not abridge, enlarge or modify any substantive right. Under the REA, the Hanna Court ruled that the FRCP are to be applied in federal courts unless they violate the Constitution or the terms of the REA itself.
      1. Enabling Act limitations
        1. Practice and procedure requirement – In Hanna, the Court reiterated that a rules passes muster under the practice and procedure portion of the REA if it really regulars procedure – the judicial process for enforcing rights and duties recognized by substantive law and for justly administering remedy and redress for disregard or infraction of them. It is highly unlikely that any FRCP the Court might plausibly promulgate could fail this test.
      2. Strong presumption of validity – The Hanna Court made it clear that when there is a conflict between a federal rule and state law, there is a very strong presumption in favor of the validity of the FRCP/ It states that the Rule is to be applied unless it appears that the Rules Advisory Committee, the SC, and Congress erred in their initial judgment that the Rule did not transgress the REA or the Constitution. Indeed, the SC has never held an FRCP invalid on its face or as applied.
    4. Modern approach under Erie and Hanna – First, it is necessary to see whether any choice is needed; there may be no conflict to resolve between federal and state rules. Second, if conflict exists, one should determine the source of the arguable applicable federal rule of law – the Constitution; an Act of Congress; an FRCP or evidence; or a decisional rule developed by the federal courts and not resting on interpretation of one of the foregoing sources. The source of federal rule determines the test for its validity and governing force.
      1. Conflict determination stage – For several reasons, federal and state rules of law that might apply in a situation may not conflict; eg, only one system may purport to have an applicable rule at all; or the two rules may address somewhat different, even if closely related, points and may both be applied; or the rules may agree and thus call for the same result; whichever is applied. If so, no Hanna analysis is necessary, although in the absence of an applicable FRCP, the Erie concern for inequitable administration of the laws may clinch the case for application of the state rule. (Walker v Armco Steel).
    5. Conflict Resolution state – If the federal and state rules conflict, it is necessary to proceed to the Hanna analysis. In applying that analysis, it is essential first to determine the source of the potentially applicable federal rule of law. If it is valid, it prevails over country state law.
      1. Federal Constitution – If the Constitution speaks to a situation before a court, it governs, without regard to any contrary state law or practice
      2. Acts of Congress – if Congress passes a Statues governing federal court procedure, that statute is valid and prevails over any contrary state law if it is arguably procedural. Thus, one should look only to the procedural nature of the federal statute in determining whether it is valid and governing; the substantive nature of any contrary state rule would be irrelevant, and there is no place of the Byrd’s balancing of state and federal interests, because Congress has already done that balancing.
      3. Federal Rules – An FRCP (including court interpretations of the Rules) is to be applied instead of contrary state law unless it appears that the relevant Advisory Committee, the SC, and Congress erred in their initial judgment that the Rule did not transgress the REA or the Constitution.
      4. Judge- made federal procedural rules – If a potentially applicable federal rule is purely decisional – i.e. not the result of an interpretation of positive law found in the Constitution, an Act of Congress, or an FRCP, the twin aims Erie test articulated governs: If applying the federal judge-made rule would counter the aims of discouraging forum shopping and avoiding inequitable administration of the laws, the federal court should follow state law.
        1. Ex: Guaranty Trust Co v York – Today, federal courts apply the state rule in a case like York because following the federal rule would fail the twin aims test: a party who would be barred by a statute of limitations in state court, but might be able to argue around a more flexible federal judge-made laches rule, would be tempted to fill in federal court; and entertaining the action would also deprive the D of the benefits of repose meant to be conferred by the state statute.
      5. Note – The twin aims approach might also apply, and cut against applicability of state law in federal court, if state courts have a rule governing purely internal housekeeping matters – such as judicial attire or length of paper for court filings – and federal courts have nothing that amounts to a rule but do have a practice differing from that followed in state court.
  2. Which state’s law applies
    1. General Rule – in diversity cases, as to matters for which the federal court is required to follow state law, it will apply the law of the state in which it sits. This law includes the state’s choice of law rules, i.e. the rules the state courts use to determine what law to apply to cases such as those involving a nonresident party or events that occurred out of state. Thus, if the state’s choice of law rules requires application of another state’s law, the federal court is to do the same.
  3. Determining Applicable State Law – Erie referred to the law of a state as declared by the state’s high court. Often, of course, because a state statute or Supreme Court decision is on point, the state substantive law to be followed by a federal court will be clear. However, in other cases, the state court system may never have faced a question, or only lower state courts may have ruled, or it may seem likely that the state Supreme Court would overrule an old precedent if given the opportunity.
    1. General Guidelines – proper regard to state court ruling – In some cases, a federal court will not be bound by the ruling of a state intermediate appellate court on a point of state law, and a fortiori not by a state trial court decision
    2. Implementation in light of Erie aims – Many lower federal courts look to all relevant sources, giving due regard to the varying weights of different authorities within the state system, in an attempt to discern how the state supreme court would decide the issue. In any event, a federal court is supposed to apply state law and not attempt to change it to what the court thinks might be a better rule.
    3. State certification law – Many states authorize their highest courts to answer questions of state law certified by federal courts before which cases are pending. Where this procedure is available, a federal court may seem an authoritative answer to uncertain questions about state law rather than speculating on them.

Federal Common Law

  1. No “Federal General Common Law” – the federal courts do have authority to create common law in particular areas of federal authority or interest, subject to overruling by Congress.
  2. Examples of Federal Common Law Areas
    1. Borrowed state law
    2. Authorization by Congress
    3. Sufficient federal interest – The court sometimes regards the federal government as having a strong enough interest in a transaction that it should be governed by uniform federal common law to further that interest, even in the absence of congressional authorization and despite contrary state law.
    4. Interstate disputes
    5. United States foreign relations

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