Civil Procedure Outline~fall '09

I. AN OVERVIEW OF PROEDURE No assignments. PART A: THE CONSTITUTIONAL FRAMEWORK FOR U.S. LITIGATION A. Approaching Civil Procedure B. Constitutional Limits in Litigation 1. The Idea of Jurisdiction: the power of a court to render a judgment that other courts and government agencies will recognize and enforce. 2. Jurisdiction and the Constitution a. Personal Jurisdiction: The power of a state court to render a judgment binding someone who may never have set foot in that court. b. Subject Matter Jurisdiction: Power of a federal court to decide certain kinds of cases. c. Both personal and subject matter jurisdiction are necessary ingredients of any court’s power to render a binding decision in a case; that is, a court must have both subject matter and personal jurisdiction to render a valid judgment. d. Because the federal Constitution defines the lines of authority among the competing centers of power, courts look to the Constitution for their basic framework in deciding issues of judicial jurisdiction. e. 3 parts of the Constitution bear on jurisdiction: i. Article III: Authorizes the establishment of the system of federal courts and in Section 2 sets the limits of federal judicial authority. Federal courts cannot exceed those jurisdictional boundaries, and Congress has the power in many instances to restrict the scope of federal judicial authority more narrowly than does the Constitution. The constraints imposed by Article III and the legislation implementing it are the focus of subject matter jurisdiction. ii. Article IV, Section 1: Requires that “Full Faith and Credit…be given in each State to judicial proceedings of every other State.” The Supreme Court has interpreted this clause to require that one state recognize and enforce judgments of another state. This clause has an important unstated condition – such judgments are entitled to full faith and credit only if the court rendering them had jurisdiction to do so. iii. Fourteenth Amendment, Section 1: Provides that no “State [shall] deprive any person of life, liberty or property without due process of law.” This clause, the Due Process Clause, has proved one of the cornerstones of modern constitutional and procedural theory. It derives its relation to jurisdiction from Pennoyer v. Neff. 3. The Constitution and Choice of Law: Beyond personal and subject matter jurisdiction, the Constitution shapes U.S. litigation in a third way: it sometimes dictates which set of laws a court must apply to a dispute. There are two key ways in which the Constitution dictates choice of law: a. Article VI provides that the Constitution and federal laws “shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” This provision is commonly referred to as the Supremacy Clause. The clause means that if Congress has validly enacted a statute dealing with a particular subject,

both federal and state courts are required to enforce the federal statute, regardless of whether there is a contrary state statute or state common law rule. b. In the absence of a controlling federal statute, the federal court system is required to respect both the statutory and common law rules of the several states. Focus of this is the Erie problem.

iii.

II. PERSONAL JURISDICTION A. The Origins: Personal jurisdiction is a part of the U.S. constitutional law because of Pennoyer. Some definitions necessary for understanding: a. writ of execution: Obtained by the sheriff from the court, when a victories plaintiff tries to collect judgment from the defendant who declines to pay, to seize any property belonging to the defendant, sell it, and give the resulting money to the plaintiff (up to the amount of the judgment). When that sell occurs, the sheriff gives to whoever buys the defendant’s property a “sheriff’s deed” as evidence of title. b. “constructive” notice: Generally means “fictional” or “pretend.” Defendants generally receive service of process, but if the defendant cannot be found, they are given constructive notice. Such notice can be accomplished by notice in a newspaper. Service, in those conditions, is “constructive” because it is highly unlikely that the defendant will actually see it. c. “attachment”: Legal term for an officially sanctioned seizure of property: real estate, cars, and other property may be “attached.” Sometimes “attachment” means literal seizure; other times it means posting notices on property or on records of title so that prospective buyers know it cannot be sold. 1. Pennoyer v. Neff: The great-grandparent of personal jurisdiction; made the question of what we now call personal jurisdiction part of the Constitution. i. Facts: Mitchell was Neff’s attorney. Neff failed to pay him so Mitchell sued Neff in Oregon. At this time Neff was a non-resident so he wasn’t personally served and didn’t appear in court. Default judgment was entered against him in not answering the complaint based upon constructive service to him through publication. After the jgmt. was entered, Neff acquired 300 acres of land in the federal govt. To satisfy the jgmt., Mitchell had the sheriff seize and sell the land. Pennoyer bought the land and received sheriff’s deed as evidence of title. Sheriff then returned proceeds of sale to Mitchell. Neff then sued in Oregon federal court to recover possession of the land. Neff pointed to original govt. deed as evidence of title. Court entered special jgmt. in favor of Neff b/c prior jgmt. was invalid by defects in affidavit. Pennoyer sued out this writ of error. ii. Rule: A state has exclusive jurisdiction over people and property within its borders. No state can exercise jurisdiction over people or property in other states. Judgments in personam without personal service of process shall not be upheld. Judgments in rem with only constructive service may be upheld. The “Full Faith and Credit” clause of the Constitution only applies “when the court rendering the judgment had jurisdiction of the parties and of the subject-matter”. Holding: The original verdict of Mitchell v. Neff was invalid because the state of Oregon did not have jurisdiction in personam over Neff. Therefore, the judgment shouldn’t have happened and the property should have never been

sold. Consequently, the court upheld the decision in Neff’s favor. iv.

Reasoning:

Constructive service is only substantial regarding in rem proceedings. When purpose of action is to determine in personam jurisdiction proceeding, constructive service upon a non-resident is ineffectual for any purpose because “if, w/o personal service, jgmts. in personam, obtained by ex parte against non-residents and absent parties, upon mere publication of process, which, in the great majority of cases, would never be seen by the parties interested, could be upheld and enforced, they would be the constant instruments of fraud and oppression.” 2. Pennoyer introduces three basic concepts that are still important today: (1) Power – jurisdiction is power, and the power of states or other jurisdictions (federal courts) to make you do what you might otherwise not do; plus limits to that power imposed by the Constitution itself. (2) Consent – If you consent to jurisdiction, these black and white rules go out the window. (3) Notice – the “concealed” strand of Pennoyer. This will eventually become a constitutional requirement. At the time of Pennoyer, we have sort of a duality of notice. For in personam jurisdiction, you need personal service of process within the state. For in rem or quasi in rem actions, you can be served by publication. 3. Pennoyer sets forth two jurisdictional categories: a. In personam jurisdiction: An in personam action is also known as personal jurisdiction. This has to do with jurisdiction over a person and their personal rights and liabilities. You would want to seek this first, then turn to in rem because the limit is the extent of the assets no matter where they are. b. In rem jurisdiction: An in rem is an action where the court is trying to decide the rights in a piece of property itself (in the thing). Limited b/c the jurisdiction reaches only as far as the value of the value of the seized property located in the jurisdiction. Conceptually, think of in rem as land. If you stop thinking about in rem as land, you’ll get in trouble. i. Quasi in rem – determines the rights of a person in a thing. Property isn’t part of the lawsuit; property is used only to obtain jurisdiction. Must attach property at the outset of the lawsuit. Not the rights of the world in a thing, but the rights of specific individuals in a thing. There are two kinds of quasi in rem: (1) True quasi in rem: trying to secure a preexisting claim in the property, or extinguish someone else’s. (2) Substitute for personal jurisdiction where you apply a defendant’s property to satisfy a claim that is unrelated to property. 4. Traditional Bases of Personal Jurisdiction: 1. personal service in state Pennoyer 2. consent (implied, express, contract, statute, appearance/waiver) Pennoyer 3. attachment of property from outset Pennoyer 4. domicile (have a residence there and intent to return or remain) Milliken v. Meyer 4.

The Modern Constitutional Formulation of Power

1.

Redefining Constitutional Power: Pennoyer gets confusing if you try to apply it to corporations. Corporations don’t have physical reality, so they can’t be “present” to receive process in a fundamental sense. They also can’t (in the conventional sense) “consent” to a court’s power. a. International Shoe Co. v. Washington i. Facts: International Shoe is a Delaware company with its main office in St. Louis, Missouri. They have some salesmen on commission in the state of Washington but don’t have any offices there. Washington is trying to get the company to ante up for its unemployment fund. Washington served Shoe notice of assessment by personally delivering it to one of their salesmen in Washington as well as sending registered mail to their home office in St. Louis. ii. Rule: A corporation that is protected by the laws of a state shall be subject to personal jurisdiction in that state. iii. Holding: The Supreme Court upheld the lower court’s ruling for the state of Washington. Shoe’s activities resulted in them receiving the benefits and protections of the state’s laws, which included the right to resort to the courts for the enforcement of its rights. Service of process was valid since it was delivered within the state to an authorized agent of the corporation, thus establishing “presence.” The state may maintain the suit in personam to collect the tax laid upon the exercise of the privilege of employing Shoe’s salesmen within the state. iv. Reasoning: The court interprets the due process clause and the Fourteenth Amendment to mean that if a company has “sufficient contacts” in a state, they may be subject to being sued in that state. b. Traditional Bases of Personal Jurisdiction: 1. personal service in state Pennoyer 2. consent (implied, express, contract, statute, appearance/waiver) Pennoyer 3. attachment of property from outset Pennoyer 4. domicile (have a residence there and intent to return or remain) Milliken v. Meyer International Shoe added minimum contacts as a Modern Base of Personal Jurisdiction: 5. minimum contacts (minimum contacts with the forum state such that maintenance of the suit does not offend “traditional notions of fair play and substantial justice.” c. Two questions arise from minimum contacts: 1. Is extent of contacts single/isolated/sporadic OR continuous/systematic? 2. Does COA arise out of contacts OR unrelated to contacts?

SporadicIsolated/Single/EXTENT OF systematicContinuous/CONTACTS

RELATEDNESS SPECIFIC JURISDICTION GENERAL JURISDICTION COA arises out of contacts COA unrelated to contacts Never been doubted

May be deemed sufficient

Maybe

Almost never

2. Absorbing In Rem Jurisdiction a. McGee v. International Life Insurance Co. i. Facts: The plaintiff is the beneficiary of a life insurance policy for which the defendant refused to pay a claim. The defendant was based in Texas, but the premiums were sent by mail from California. ii. Rule: If the contact between the defendant and the state of California is minimal, such contact must be closely related to the claim in order for the state of California to have jurisdiction. iii. Holding: The court finds that the life insurance policy in question had substantial connection with the state of California. The K was delivered in CA, the premiums were mailed from CA, and the insured was a resident of CA when he died. Furthermore, the court holds that the state has an interest in protecting its citizens without making them travel to other states. b. Hanson v. Denckla i. Facts: A family fought over the estate of Mrs. Donner, who had established a trust in Delaware but had then moved to Florida and died there. If Florida had jurisdiction, one daughter would get everything, while if Delaware had jurisdiction, three daughters would share. ii. Rule: If there are only minimal contacts between a state and a defendant, then the contacts must be closely related to the claim. iii. Holding: The court rules that Florida does not have specific jurisdiction over this matter. The court says that the contacts were not sufficient in volume, nor were they sufficiently related. The unilateral activity of those who claim some relationship w/a nonresident defendant cannot satisfy the requirement of contacts w/the forum state. iv. Reasoning: The court concedes that the trust paid income to her in Florida and she did a little bit of work on administering the trust from Florida, but the court says that’s not enough. McGee v. International Life Insurance Co. -yes jurisdiction -Franklin (insured) was in forum state at time the relationship began -insurer reached out to McGee, establishing relationship between them and forum state -“purposeful availment” by insurance company through solicited business to a resident of that state

Hanson v. Denckla -no jurisdiction -relationship was pre-established when Mrs. Donner entered forum state -unilateral activity of Donner moving that relationship between trustee and forum state -“purposeful availment”=none b/c only relationship was by Donner moving there

c. Harris v. Balk i. Facts: This case would be decided differently today. Epstein sues in Maryland to get Harris to pay him. Then Balk sues Harris in North Carolina. Harris’s defense is that he’s already paid his debt to Epstein, such that Balk should get his money back from Epstein.

ii. Rule: A state can acquire jurisdiction over persons whenever their debts were present in that state by “attaching” the debts (quasi in rem jurisdiction). iii. Holding: North Carolina, the Supreme Court rules, must enforce the Maryland judgment, because personal jurisdiction was obtained over Balk when Harris entered Maryland. iv. Reasoning: Result makes creditors liable (to extent of amounts owed to them) in any state in which their debtors set foot. d.

e. 1.

Shaffer v. Heitner i. Facts: Heitner was a shareholder in Greyhound who sued a number of officers of the company. He moved to “sequester” their property in Delaware. This property included the defendants’ stock in Greyhound and other financial instruments. The motion was granted. ii. Rule: The Shoe model should be applied to jurisdiction in rem as well as in personam. The true test of jurisdiction is the “relationship among the defendant, the forum, and the litigation”. This had been the test for in personam jurisdiction since Shoe, and the Court says it should be extended to quasi in rem actions. iii. Holding: The Court rules that Delaware does not have jurisdiction over the defendants, and therefore, it reverses the ruling of the Delaware Supreme Court. There’s no indication of ‘purposeful availment’ on behalf of the defendants. iv. Reasoning: The Court argues that no in rem action is, strictly speaking, “thing-related”. There is always a person behind the thing they own who will be affected. The Court suggests that apply minimum contacts standards to in rem actions won’t change anything, because the simple fact that you own land or other big-time property in a state can be seen as sufficient proof that you have more than minimal contacts there. The Court says that quasi in rem jurisdiction is going to have to change. The difference with quasi in rem is that the property in question isn’t really related to the subject of the plaintiff’s lawsuit. The Court will no longer allow the states to assert jurisdiction merely because somebody owns some property in that states. Soooo, post-Shaffer, our Bases of Personal Jurisdiction looks like this: Traditional Bases of Personal Jurisdiction: personal service in state Pennoyer 2. consent (implied, express, contract, statute, appearance/waiver) Pennoyer 3. attachment of property from outset Pennoyer *This doesn’t necessarily mean attachment of property can’t ever be used again; you could do so if they hope it will satisfy the jgmt. in their favor.. 4. domicile (have a residence there and intent to return or remain) Milliken v. Meyer International Shoe added minimum contacts as a Modern Base of Personal Jurisdiction: 5. minimum contacts (minimum contacts with the forum state such that maintenance of the suit does not offend “traditional notions of fair play and substantial justice.” -purpose availment of (likely that min. cont. are present)

-not unilateral activity (not likely that min. cont. are present) Specific Jurisdiction: The Modern Cases a. Specific jurisdiction can exist when single acts, because of their “quality and nature,” will support “specific in personam jurisdiction,” that is, jurisdiction over claims arising out of that single act (McGee). Continuous but limited activity in the forum state, such as the ongoing business relationship in Burger King, will also support specific jurisdiction, that is, jurisdiction over claims arising out of that continuous activity. b. World-Wide Volkswagon Corp. V. Woodson (ADDS PURPOSEFUL AVAILMENT & FORESEEABILITY) i. Facts: Somebody bought a car from a car dealership in New York. They got into a car accident in Oklahoma where the fuel tank exploded. They started a product liability suit against the present appellants and others in Oklahoma. The car dealer and regional distributor put in a special appearance to argue that Oklahoma did not have jurisdiction under the Due Process Clause of the Fourteenth Amendment. The Supreme Court of Oklahoma denied their writ and the appellants went to the U.S. Supreme Court. ii. Rule: In order for a state court to exercise in personam jurisdiction over a defendant, there must exist minimum contacts between the defendant, forum, and claim. Defendant’s contacts with the forum state must be such that maintenance of the suit “does not offend ‘traditional notions of fair play and substantial justice.’ Foreseeability isn’t the mere likelihood that a product will find its way to the forum state. Instead, it’s the defendant’s conduct and connection with the forum state are such that he should reasonably anticipate being hauled into court there. The Due Process Clause, by ensuring the “orderly administration of the laws,” gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit. iii. Holding: The court rules that the appellants have no contacts with Oklahoma and thus it reverses the judgment of the Supreme Court of Oklahoma. The Audi dealer, Seaway, hadn’t purposely availed itself of the opportunity to conduct activities in Oklahoma, although it could foresee that its buyers might take its cars there. It hadn’t sold cars there, advertised there, cultivated OK customers, or deliberately focused on OK as a market. Thus, it had not sought any direct benefit from OK activities sufficient to require it to submit to jurisdiction there. iv. Reasoning: The court finds that the contacts between the defendant and the forum are not sufficient to sustain jurisdiction. They argue that if they allow the defendants to stand trial in Oklahoma for problems with their car, anyone that sells anything will have to be subject to jurisdiction anywhere that the products might go. c. Asahi Metal Industry Co. v. Superior Court (STREAM OF COMMERCE) (***NOTE: This is NOT a majority opinion, it’s a plurality opinion=An opinion lacking enough judges' votes to constitute a majority, but receiving more votes than any other opinion.)

1.

i. Facts: A man got into a motorcycle accident and sued Cheng Shin for product liability. Cheng Shin filed a third-party complaint in California against Asahi, which made parts for Cheng Shin. Asahi moved to quash Cheng Shin’s summons, saying California didn’t have jurisdiction. The California Superior Court denied the motion, and Asahi appealed to the California Supreme Court, which also denied the motion. Asahi appealed up to the United States Supreme Court. ii. Rule: The majority agrees with the five factor test for “fair play”: (1) burden on the defendant, (2) interests of the forum state, (3) interest of the plaintiff, (4) interstate efficiency, and (5) interstate policy interests. iii. Holding: The judgment of the California Supreme Court is reversed and California is found not to have jurisdiction over Asahi. iv. Reasoning: The Court finds that fair play would be violated because: 1. The burden on the defendant is “severe” because the corporation would have to travel from Japan to California and defend itself under the laws of a foreign country. 2. The plaintiff is not a California resident, and thus California’s interests in the case are “diminished”. California can enforce its interest in having safe products in its state indirectly by applying pressure to direct suppliers of goods to California, who in turn will apply commercial pressure to their suppliers. 3. Cheng Shin has not shown that California is a more convenient forum than Japan or Taiwan in which to pursue its claim. 4. Jurisdiction is not necessarily in the best interests of the other countries involved. 5. Jurisdiction is not warranted by any international policy considerations, if they even exist. The court disagrees about whether there are minimum contacts. Some of the justices believe that in another case with the same contacts but more fair play jurisdiction could hold: **MAJORITY (O’Connor, Rehnquist, Powell, Scalia) : Stream of commerce + purposeful availment to forum state is a ‘substantial connection.’ **Brenna, White, Marshall, Blackmun: SOC + awareness **Stevens: No need to discuss SOC b/c finding that jurisdiction is unreasonable is enough. d. Although World-Wide stated these in dicta, Ashai sets forth the five factors one must consider when determining the reasonableness of the exercise of jurisdiction: 1. The burden on the defendant. *The 1st 3 are the most 2. The interests of the forum state important b/c the 3. The plaintiff’s interest in obtaining relief Δ’s burden is primary.* 4. The interstate judicial system’s interest in obtaining the most efficient resolution of controversies. 5. The shared interest of the several States in furthering fundamental substantive social policies. * Note that these factors have nothing to do with minimum contacts, but rather with “traditional notions of fair play & substantial justice”.* e. Soooo, post-Asahi, our Bases of Personal Jurisdiction looks like this: Traditional Bases of Personal Jurisdiction: personal service in state Pennoyer

2.

consent (implied, express, contract, statute, appearance/waiver)

Pennoyer 3.

f.

domicile (have a residence there and intent to return or remain) Milliken -generally a corporation’s domicile is the state of its incorporation and its principal place of business 4. International Shoe (1) minimum contacts *apply these to (a) purpose availment specific personal (b) foreseeability/not unilateral activity jurisdiction.* (2) fairness (a) burden on Δ (b) π’s interests (c) forum state’s interests (d) interstate judicial system’s interest (e) shared interest of states Burger King Corp. v. Rudzewicz i. Facts: The defendant started a Burger King franchise. Things went sour and Burger King sued in federal court in Florida to terminate the franchise. Rudzewicz challenged the court’s personal jurisdiction. The district court rejected the defendant’s jurisdiction challenge, and at trial Burger King won. The Eleventh Circuit overturned the verdict, accepting the jurisdictional argument. Burger King appealed to the United States Supreme Court. ii. Rule: In considering whether a contract creates a contact, there are four factors to be considered: 1. The nature of prior negotiations between the parties 2. The “contemplated future consequences” of entering into the contract 3. The terms of the contract 4. The course of dealing between the parties iii. Holding: The Court reversed the ruling of the Eleventh Circuit, and thus upheld the ruling of the trial court. The Court also says that the Court of Appeals erred in finding factually that Rudzewicz lacked fair notice because the District Court found that the business was basically done cleanly, and the FRCP says that you can’t set aside the findings of fact of a lower court under they’re clearly wrong. iv. Reasoning: The Court argues that the four criteria it establishes to measure the connectedness of a contract with a state are met in this case: 1. Rudzewicz chose to negotiate for a franchise with a Florida company when he could have chosen to establish a franchise of a company based in Michigan or many other states. 2. Rudzewicz knew that he would derive many benefits by being affiliated with Burger King because of its national reach. 3. The terms of the contract clearly indicate that Burger King conducts its operations out of Miami. 4. Rudzewicz clearly learned from his dealings with Burger King that the decision making power lay in the Florida headquarters and not the Michigan district office. The Court says in its dicta that its decision doesn’t mean that all defendants who are parties to contracts with big corporations can be haled to remote forums. The Court basically says that

each case must be weighed individually. In particular, the Court says that jurisdiction can’t be based on a contract obtained through fraud or other wrongdoing. Justices Stevens and Powell dissent, saying that the result is unfair because Rudzewicz lacked notice that he could be haled into Florida court. They especially note the power differential between the parties and claim that Rudzewicz was “financially unprepared” to defend a suit in Florida. g. Pavlovich v. Superior Court i. Facts: Pavlovich worked on defeating DVD copy protection and put up a web page with information about the DeCSS program. DVD CCA brought suit against Pavlovich in California alleging that the defendant had “misappropriated its trade secrets”. The defendant moved to quash service based on a lack of personal jurisdiction in California. The Court of Appeal found that California had jurisdiction, and the defendant appealed. ii. Rule: In order for a state to exercise specific jurisdiction over a foreign Δ only if: (1) the Δ has purposefully availed himself/herself of forum benefits; (2) the controversy is related to or ‘arises out of’ the Δ’s contacts w/the forum; (3) the assertion of personal jurisdiction would comport with “fair play and substantial justice.” iii. Holding: The court reversed the appellate court’s decision, finding that California had no personal jurisdiction over the defendant. iv. Reasoning: A Δ’s knowledge that his tortuous conduct alone may harm industries centered in CA is insufficient to establish express aiming at the forum state as required by the Calder effects test (conduct in one state having a tortuous effect in another state can establish the necessary ‘minimum contacts’ to support the exercise of jurisdiction over non-resident Δs). The only evidence suggesting express aiming is Pavolich’s knowledge that his conduct may harm industries centered in CA, due process requires the Court to decline jurisdiction over his person. 4. General Jurisdiction: Appropriate when the Δ’s activities in the state are so substantial and continuous that she would expect to be subject to suit there on any claim and would suffer no inconvenience from defending there. General jurisdiction requires continuous and systematic contacts. You must have more of a relationship with a forum to constitute general jurisdiction than to be subject to specific jurisdiction. Think of general jurisdiction as “super contacts”. a. Helicopteros Nacionales de Columbia, S.A. v. Hall i. Facts: Helicopteros is a Colombian company that was operating in Peru providing transportation for a Peruvian counterpart to a U.S. company. One of their helicopters crashed and four U.S. citizens were killed. Their decedents sued Helicopteros (AKA Helicol), among others, for wrongful death in the state of Texas. Helicol made a special appearance and argued that Texas state court did not have personal jurisdiction over the company. The motion was denied by the trial court, and Helicol lost at trial. They appealed on the basis of lack of personal jurisdiction, and the Texas Court of Civil Appeals reversed the judgment on that basis, while the Texas Supreme Court in turn reversed the ruling of the intermediate appellate court. Helicol appealed to the United States Supreme Court.

ii. Rule: In order for the forum to exercise personal jurisdiction, the defendant must have “certain minimum contacts” that do not violate “fair play”. iii. Holding: The decision of the Texas Supreme Court was reversed, and it was found that Texas did not have jurisdiction. iv. Reasoning: The Court cites two cases, Perkins and Rosenberg, to justify finding a lack of minimum contacts. The Court argues that the present case is more like Rosenberg (where the only contacts were purchases and related trips) than Perkins (where Ohio courts were found to have jurisdiction over a Philippine corporation due to “continuous and systematic” contacts). v. Dissent: Brennan’s dissent uses the doctrine of purposeful availment to argue that there were indeed minimum contacts between the defendant and the forum. Brennan disagrees with the court’s use of Rosenberg because he says it may be outdated given more recent decisions and advances in communications and transportation. Brennan argues that the contacts between Helicol and Texas are significant because they show that Helicol received benefits from doing business in Texas, and thus should be on notice that they may face obligations there. Brennan claims that the present case is distinguishable from both Perkins and Rosenberg in that the contacts are highly related to the claim. Thus, the possibility of being sued in Texas should have been foreseeable to Helicol. Finally, Brennan says that the Court in this decision limits specific jurisdiction too strictly. b. Coastal Video Communications Corp. v. The Staywell Corp. i. Facts: π is a VA corp. engaged in business of producing employee handbooks which they sell to companies throughout the U.S. Δ is an affiliated company of Krames (a DE corp. w/its principal place of business in CA; it has copyright to publish one of π’s handbooks) but it’s purpose in this lawsuit is that its website claims it is the exclusive creator and publisher of American Red Cross health and safety training programs and manuals. Π sought a declaration in VA that its handbook does not infringe on copyrighted material in Δ’s handbook. A motion to dismiss for lack of personal jurisdiction was filed, pursuant to FRCP 12(b)(2). ii. Rule: Even when an action doesn’t ‘arise from’ Δ’s in-state contacts, court may still exercise personal jurisdiction over Δ if it has general jurisdiction, in which the requisite minimum contacts between the Δ and the forum state are fairly extensive. Only when the continuous corporate operation within a state is thought so substantial and of such a nature as to justify suit against it on COAs arising from dealings entirely distinct from those activities may a court assert general jurisdiction over a corporate Δ. iii. Holding: π must seek discovery of information relevant to issue of court’s general personal jurisdiction over Δ within 15 days of date of this order. Within 75 days of this order, parties are directed to set a hearing w/calendar clerk on Δ’s motion to dismiss. c. Burnham v. Superior Court (TRANSIENT JURISDICTION) i. Facts: The Burnhams were getting divorced. Mrs. Burnham sued for divorce in California. While Mr. Burnham, the appellant, was in California briefly he was served process. Burnham made a special appearance in California to try to

quash service of process on the grounds that California did not have personal jurisdiction over him due to insufficient contacts. The Superior Court denied his motion, and the California Court of Appeal agreed. Burnham appealed to the United States Supreme Court. ii. Rule: NO MAJORITY RULE. Scalia’s bunch says that it is sufficient that the defendant be physically present for California to have personal jurisdiction. Brennan’s bunch agrees that California has jurisdiction, but in deciding this you must consider minimum contacts and fair play factors. iii. Holding: State of CA had jurisdiction over π. There is tag jurisdiction here because his physical presence in forum state. iv. Reasoning: Scalia says that most of the big cases have asked the Supreme Court to find out whether a state has jurisdiction over an absent defendant. Now they have to figure this out for an actually physically present defendant. Scalia says that courts basically have always had jurisdiction over physically present defendants and ought to continue to have such jurisdiction. Scalia also rejects the argument that Shaffer says that all questions of personal jurisdiction should be evaluated according to Shoe. Scalia points to the language in Shaffer and says it only applied to absent defendants. Brennan says that just because something has been the law for a long time doesn’t mean it’s just or right. Brennan interprets the ruling in Shaffer to mean that really all personal jurisdiction rules must be evaluated according to minimum contacts and fair play, even “ancient” rules. The fact that physical presence has been sufficient for personal jurisdiction for so long, Brennan argues, means that someone who goes to California has “clear notice” that they can be served process there. Brennan further says that by being in a state at all, you get some benefit from the protection of its laws, and it’s clear that it was convenient for you to travel there at least once. Thus, he argues, it’s only fair that you be subject to its jurisdiction. Scalia counters by saying that the benefits which Brennan mentions are too cheap, or else could be plausibly cheap in such a way that you couldn’t draw a clear line. Scalia finally says that if people want physical presence not to constitute jurisdiction anymore, the legislature should pass a law, and the judiciary shouldn’t meddle. Stevens basically suggests that he wouldn’t have granted cert because it is such an easy case. GENERAL JURISDICTION -automatically if COA is unrelated to the contacts -contacts must be continuous and systematic -doesn’t mean purposeful availment and foreseeability are irrelevant, but the court has never applied them here. -fairness: • As a π you wouldn’t want to apply it

SPECIFIC JURISDICTION -COA arises out of the contacts -contacts: • Purposeful availment • Foreseeability -fairness: • Burden on ∆ • Π’s interest in obtaining relief • Forum state’s interest

•

b/c you would say that if contacts are continuous and systematic then jurisdiction is fair. As a ∆ you would want to apply it

Choice of Law Clause Don’t purport to say where suit shall be brought but do provide that the substantive law of a particular jurisdiction will govern disputes arising under the K. K in Burger King contained such a clause. You could bring suit in another jurisdiction, but FL law will still govern. “The parties agree that any litigation arising out of this agmt. shall be governed by the law of Fl.”

Consent as a Substitute for Power If you have an agent representing you, that agent can accept personal service for you. It doesn’t require that suit be brought in that jurisdiction. “Sarah Low appoints Kristi Walker, residing in Miami, Fl, as her agent for service of process.”

Forum-selection Clause Contractual provisions in which parties establish the place/forum for specific litigation btwn. Them. “The parties agree that any litigation arising out of this agmt. shall be brought in Miami, Fl.”

Cognovit Clause A K that authorizes an attorney to confess jgmt. against person(s) signing it. It doesn’t deprive signer of a hearing, but it does mean that any hearing will come only if that signer brings an action to set aside jgmt. authorized by the cognovits. “Kristi Walker appoints Sarah Low as her agent for the purpose of confessing jgmt.”

a. Consent as a Substitute for Power 1. Carnival Cruise Lines, Inc. v. Shute i. Facts: The Shutes went on a cruise. On the ticket, there was a forum selection clause that said any litigation related to the cruise must be tried in Florida. They departed for their cruise from Los Angeles and the ship sailed to Mexico and back to Los Angeles. Mrs. Shute slipped on the ship and hurt herself. The Shutes sued in Washington and Carnival moved for summary judgment due to the forum selection clause. At trial, the Shutes conceded that they had notice of the forum selection clause. The suit was first brought in the Western District of Washington. The Ninth Circuit refused to enforce the clause, and the cruise line appealed to the United States Supreme Court. ii. Rule: Courts have the responsibility to determine whether forum selection clauses in form passage contracts are fair. iii. Holding:

iv. Reasoning: The Court says that the ticket contract was a routine commercial passage contract. It was not negotiated, and the parties did not have equal bargaining power. The Court enumerates several good reasons for a forum selection clause in a cruise ticket contract: 1. A cruise will have passengers from all over the country, and absent a forum selection clause, the cruise company could be subject to suit in all sorts of places. 2. A forum selection clause eliminates uncertainty about the forum and avoids costly pretrial motions. 3. Forum selection clauses mean lower fares for passengers because the cruise company passes along savings from limiting the forums where the company must defend itself. The Court says that the key question is whether the clause is fair. In evaluating the fairness of such clauses, the Court must consider whether Carnival was, in bad faith, discouraging legitimate claims from its passengers. The Court says that because Carnival does business primarily in Florida and has a lot of cruises that depart from Florida, they didn’t include the clause in bad faith. v. Dissent: Stevens, in his dissent, refers to two “strands” of contract law that come into play in this case. 1. Courts look closer at contracts made between parties with unequal bargaining power, especially “take it or leave it” contracts. 2. At least in the past, forum selection clauses have been found to be counter to public policy. In particular, they are not enforced if they (1) “were not freely bargained for”, (2) “create additional expense for one party”, or (3) “deny one party a remedy”. b. The Constitutional Requirement of Notice 1. FRCP 4: Deals with Summons. States what is required in a summons, service of summons, etc. See page 15-22 of FRCP. The following is a brief summary: • A summons and a copy of the complaint must be served at the outset of the lawsuit. • Must be contained in the summons: it must identify the court and the parties; be directed to the ∆; state name and address of π’s attorney or if unrepresented, to the π; state time within which ∆ must appear and defend; it must notify ∆ that failure to do so will result in a jgmt. by default against ∆ for relief demanded in complaint. • Service may be effected by any person who isn’t a party and at least 18 yrs. old • Service can be effected by: delivering a copy of summons and complaint to individually personally; leaving copies at individual’s dwelling house or usual place of abode w/some person of suitable age and discretion then residing there; by delivering copies to an authorized agent; pursuant to law of state in which district court is located. • Waiver of Service: a ∆ who waives service doesn’t thereby waive any objection to venue or to the jurisdiction of the court; to avoid costs, a π may notify the ∆ of commencement of action and request ∆ to waive service; a ∆ has a duty to avoid unnecessary costs of service and if they fail to do so the court will impose costs if effecting

service on ∆ unless good cause is shown; if ∆ timely returns waiver, before being served w/process, isn’t required to answer complaint until 60 days after date request was sent, or 90 days after if ∆ is outside any judicial district of U.S.; when π files request the action shall proceed as if a summons and complaint had been served at time of filing of waiver, and no proof of service shall be required. o Notice and request: be in writing and addressed directly to ∆ or authorized agent; 1st class mail or other reliable means; include copy of complaint and identify court where it has been filed; inform ∆ of consequences of compliance or failure to comply; set forth date on which request was sent; allow ∆ reasonable time to return waiver (at least 30 days from date request was sent, or 60 days from request date if ∆ is outside any judicial district of U.S.); extra copy of notice and request and prepaid means of compliance. • Service upon Foreign Residents: by any internationally agreed upon means of service; if not internationally agreed upon means of service then in manner prescribed by law of that foreign country, or as directed by foreign authority, delivery to individual personally, or by mail requiring return receipt. • Service upon Corporations and Associations: in judicial district of U.S. pursuant to law of state in which district court is located; delivering copy of summons and complaint to an officer, managing or federal agent, or any other agent authorized by law or appointment to receive process, and by mailing a copy to ∆ if agent is authorized by statute and so statute requires. • Service upon U.S., its Agencies, Corporations, Officers, or Employees: delivering copy of summons and complaint to U.S. attorney for district in which action is brought or to Asst. U.S. attorney or clerical employee designated by U.S. attorney in writing filed w/clerk of court, or by sending copy of summons and complaint by registered/certified mail addressed to civil process clerk at office of U.S. attorney; by registered/certified mail to Attorney General of U.S. at Washington, D.C. • Territorial Limits of Effective Service: over ∆ who could be subjected to jurisdiction of a court of general jurisdiction in state in which district court is located; party joined under Rule 14 (3rd party) or Rule 19 (joinder) who is served at place within a judicial district of U.S. and not more than 100 miles from place from which summons issues; authorized by U.S. statute. • Time Limit: if service and complaint isn’t made upon ∆ within 120 days from filing of complaint, the court, upon motion or its own initiative, shall dismiss action without prejudice to that ∆ or direct that service be effected within a specified time; if π shows good cause for failure, court shall extend time for service for an appropriate period. 2. Mullane v. Central Hanover Bank & Trust Co.

a.

b.

i. Facts: Don’t know, and don’t care. No, seriously…there’s this fund, and this stuff, and then something happens. There are people who they can find, and people who they can’t find. They publish something in a newspaper in New York without their names, just letting them know that something is coming up in court with regard to this common trust fund. An attorney who is appointed to represent the interests of absent beneficiaries tries to argue that this constructive notice is unconstitutional. The New York Surrogate’s Court held that the notice given was okay. This decision was affirmed by the intermediate appellate court and the Court of Appeals of New York. The appellant appealed to the Supreme Court. ii. Rule: An elementary and fundamental requirement of due process in any proceeding, which is to be accorded finality is notice reasonably calculated, under all circumstances, to apprise interested parties of pendency of action and afford them an opportunity to present their objections. A method of service of process must either be (1) of such nature as reasonably to convey required information; and (2) it must afford a reasonable time for those interested to make their appearance. ii. Holding: The Court ruled that constructive notice for unknown persons is Constitutionally OK, but that constructive notice for known persons is unconstitutional. The case was reversed and remanded for further proceedings. iii. Reasoning: The Court says that you can’t just go through the motions, you actually have to try to let people know something’s going on in court they ought to pay attention to. c. Self-Imposed Restraints of Jurisdictional Power: Long-Arm Statutes, Venue, and Discretionary Refusal of Jurisdiction i. Long-Arm Statutes as a Restraint on Jurisdiction: statutory authority giving jurisdiction over nonresident ∆s. Authorizes state courts to exercise jurisdiction over cases arising out of contacts such as committing a tortuous act within the state, transacting business in the state, or owning property in the state. Gibbons v. Brown i. Facts: Brown and her husband got into an accident with Gibbons. Brown’s husband was driving, and Gibbons allegedly gave him bad directions, causing the accident. Gibbons, a Texas resident, sued Mr. Brown in Florida. Two years later, Mrs. Brown sues Gibbons in Florida, alleging that Gibbons is subject to jurisdiction in Florida because of the suit she filed there earlier on the same subject matter. ii. Rule: Florida shall have jurisdiction over a defendant who is “engaged in substantial and not isolated activity” in Florida. This is construed to be a higher standard than the federal constitutional one. iii. Holding: The court dismisses Mrs. Brown’s lawsuit. iv. Reasoning: The court assumes that the first lawsuit is over, and thus finds that Gibbons is not currently engaged in any activities in Florida. The court says that brining a lawsuit in Florida shouldn’t hang over your head for the rest of your life. Gee v. Reingold i. Facts: ii. Rule:

iii. Holding: iv. Reasoning: ii. Venue as a Further Localizing Principle a. Venue specifies a specific court within a jurisdiction where parties can litigate. For example, let’s say you know you have jurisdiction in Texas, but there are four federal district courts there. Venue tells you where exactly you’re going to do your trial. b. §1391: Venue Generally (a) A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in (1) a judicial district where any defendant resides, if all defendants reside in the same State, (2) 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, or (3) a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought. (b) A civil action wherein jurisdiction is not founded solely on diversity of citizenship may, except as otherwise provided by law, be brought only in (1) a judicial district where any defendant resides, if all defendants reside in the same State, (2) 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, or (3) a judicial district in which any defendant may be found, if there is no district in which the action may otherwise be brought. (c) For purposes of venue under this chapter, a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced. In a State which has more than one judicial district and in which a defendant that is a corporation is subject to personal jurisdiction at the time an action is commenced, such corporation shall be deemed to reside in any district in that State within which its contacts would be sufficient to subject it to personal jurisdiction if that district were a separate State, and, if there is no such district, the corporation shall be deemed to reside in the district within which it has the most significant contacts. (d) An alien may be sued in any district. (e) A civil action in which a defendant is an officer or employee of the United States or any agency thereof acting in his official capacity or under color of legal authority, or an agency of the United States, or the United States, may, except as otherwise provided by law, be brought in any judicial district in which (1) a defendant in the action resides, (2) 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, or (3) the plaintiff resides if no real property is involved in the action. Additional persons may be joined as parties to any such action in accordance with the Federal Rules of Civil Procedure and with such other venue requirements as would be applicable if the United States or one of its officers, employees, or agencies were not a party. The summons and complaint in such an action shall be served as provided by the Federal Rules of Civil Procedure except that the delivery of the summons and complaint to the officer or agency as required by the rules may be made by certified mail beyond the territorial limits of the district in which the action is brought.

(f) A civil action against a foreign state as defined in section 1603 (a) of this title may be brought— (1) in any 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; (2) in any judicial district in which the vessel or cargo of a foreign state is situated, if the claim is asserted under section 1605 (b) of this title; (3) in any judicial district in which the agency or instrumentality is licensed to do business or is doing business, if the action is brought against an agency or instrumentality of a foreign state as defined in section 1603 (b) of this title; or (4) in the United States District Court for the District of Columbia if the action is brought against a foreign state or political subdivision thereof. (g) A civil action in which jurisdiction of the district court is based upon section 1369 of this title may be brought in any district in which any defendant resides or in which a substantial part of the accident giving rise to the action took place. c. Possible Bases for Venue under U.S.C. §1391: 1. Where ∆ resides if all ∆s in same state. 2. Where substantial part of events giving rise to claim occurred. 3. Where any ∆ is subject to personal jurisdiction or found IF no venue under (1) or (2). ****IMPORTANT: To turn to 1391(b)(3), you MUST eliminate 1391 (b)(2) in that none of the events occurred in the U.S. d. Dee-K Enterprises, Inc. v. Heveafil Sdn. Bhd. i. Facts: The plaintiffs are American companies suing foreign companies. The defendants challenged personal jurisdiction and venue. ii. Rule: The foreign defendants may be sued in any district. The American distributors can only be sued in districts where they can be “found”. iii. Holding: The court rules that the plaintiff must make a showing that venue is proper in the Eastern District of Virginia or else the proceedings would be transferred to the Western District of Virginia. iv. Reasoning: The court looks at the contacts of the American defendants in Virginia and finds that some of the American distributors can be found in the Eastern District of Virginia, though some may only be found in the Western District of Virginia. i. Declining Jurisdiction: Transfer and Forum Non Conveniens a. Forum Non Conveniens -Piper Aircraft v. Reyno i. Facts: There was a plane crash in Scotland. The plane was manufactured by a Pennsylvania company with parts made in Ohio. A representative of the decedents, who lived in Scotland, filed lawsuits against the two companies in the United States because the laws here are more favorable to plaintiffs than in Scotland. The defendants had the case removed to federal court in California, then transferred to Pennsylvania and finally tried to get a forum non conveniens dismissal. The federal district court granted the motion, but the Third Circuit reversed on the ground that forum non conveniens mustn’t be applied if it will

cause the plaintiff to go to a forum with less favorable law for the plaintiff. This decision, in turn, was appealed to the Supreme Court. ii. Rule: A court has the authority to decline jurisdiction if the suit may be brought more appropriately in another forum. iii. Holding: The judgment of the Court of Appeals was reversed. iv. Reasoning: In deciding whether to dismiss for forum non conveniens, a court must follow the rule of Gulf Oil Corp. v. Gilbert, which says: • When the plaintiff chooses a forum, you shouldn’t mess with their choice unless you have a really good reason. • One reason to change the forum is if the burden and “oppressiveness” to the defendant is out of proportion to the convenience of the plaintiff. • It seems that a court may decline jurisdiction if its docket is overloaded. (?) • Finally, the court must consider and balance certain public interest factors and private interest factors. The Court finds that the district court applied the test correctly. In particular, it finds that forum non conveniens cannot be inflexibly defeated merely on the basis that the alternative forum would have laws less favorable to the plaintiff. The district court also ruled correctly that the interests of foreign plaintiffs should be weighted less heavily than the interests of domestic defendants. Finally, the Court acknowledges that Scotland has many contacts with the litigation and that it would be best if it moved there. b. Transfer under 28 U.S.C. sections 1404, 1406, and 1631 -Hoffman v. Blaski i. Facts: ii. Rule: iii. Holding: iv. Reasoning: §1404: Change of Venue (a) For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought. (b) Upon motion, consent or stipulation of all parties, any action, suit or proceeding of a civil nature or any motion or hearing thereof, may be transferred, in the discretion of the court, from the division in which pending to any other division in the same district. Transfer of proceedings in rem brought by or on behalf of the United States may be transferred under this section without the consent of the United States where all other parties request transfer. (c) A district court may order any civil action to be tried at any place within the division in which it is pending. (d) As used in this section, the term “district court” includes the District Court of Guam, the District Court for the Northern Mariana Islands, and the District Court of the Virgin Islands, and the term “district” includes the territorial jurisdiction of each such court. §1406: Cure of Waiver of Defects (a) The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.

(b) Nothing in this chapter shall impair the jurisdiction of a district court of any matter involving a party who does not interpose timely and sufficient objection to the venue. (c) As used in this section, the term “district court” includes the District Court of Guam, the District Court for the Northern Mariana Islands, and the District Court of the Virgin Islands, and the term “district” includes the territorial jurisdiction of each such court. §1631: Transfer to Cure Want of Jurisdiction Whenever a civil action is filed in a court as defined in section 610 of this title or an appeal, including a petition for review of administrative action, is noticed for or filed with such a court and that court finds that there is a want of jurisdiction, the court shall, if it is in the interest of justice, transfer such action or appeal to any other such court in which the action or appeal could have been brought at the time it was filed or noticed, and the action or appeal shall proceed as if it had been filed in or noticed for the court to which it is transferred on the date upon which it was actually filed in or noticed for the court from which it is transferred. Forum Non Conveniens (inter-system) -older version of Transfer under §1404 -common law doctrine -can move from state to federal or federal to another country -dismissal requires that there be an alternative forum in which suit can be prosecuted -private interest factors affecting convenience of litigants: (1) relative ease of access to sources of proof; (2) availability of compulsory process for attendance of willing witnesses; (3) possibility of view of premises, if view would be appropriate to action; (4) all other practical problems that make trial of a case easy, expeditious, and inexpensive. -public interest factors affecting convenience of forum: (1) administrative difficulties flowing from court congestion; (2) the local interest in having localized controversies decided at home; (3) interest in having trial of a diversity case in a forum that is at home with law that must govern the action; (4) the avoidance of unnecessary problems in conflict of laws, or in the application of foreign law; (5) unfairness of burdening citizens in an unrelated forum w/jury duty.

Transfer (intra-system) -§1404 only applies to transfer from federal courts to other federal courts -1404 (a) “where it might have been brought,” this means that district court to where you are transferring must have: (1) venue, AND (2) personal jurisdiction -difference btwn. 1404 and 1406: • 1404=venue is proper • 1406=venue is improper -to decide which to use (1404 or 1406), ask “is current venue proper?”, you would then turn back to 1391 -in determining transfer, you look at: (1) convenience of parties (2) convenience of witnesses (3) interest of justice *this is from 1404

III.SUBJECT MATTER JURISDCITION OF THE FEDERAL COURTS A. The Idea and the Structure of Subject Matter Jurisdiction Personal jurisdiction is people. That is, personal jurisdiction determines whether a court has the power to render a judgment against a particular defendant. Subject matter jurisdiction is all about limiting the power of the federal government. There are two big political compromises in the Constitution: 1. Creating courts lower than the Supreme Court was left up to Congress. This was done to mitigate the concerns of those who feared an overly powerful federal government. 2. If a case doesn’t fall into one of the categories set out in § 2 of Article III, the federal courts can’t hear it. However, Congress can choose what jurisdiction to give to the lower federal courts. Therefore, federal courts are courts of limited jurisdiction. This leads to two questions: 1. Is the case at hand listed in Article III § 2? 2. Has Congress allowed the federal courts to hear such a case? It’s important to note that federal courts share most of their jurisdiction with state courts. This is called concurrent jurisdiction. 28 U.S.C. § 1331 says that federal courts will have original jurisdiction1[1] over any case dealing with the Constitution, federal statutes, or U.S. treaties. 28 U.S.C. § 1332 says that diversity jurisdiction is also concurrent. We definitely saw cases where people from different states went to state court. There are also several areas of jurisdiction that Congress has given exclusively to the federal courts: 1. Admiralty (boats) – 28 U.S.C. § 1333 2. Bankruptcy – 28 U.S.C. § 1334 3. Antitrust – 28 U.S.C. § 1337 Why might Congress grant exclusive jurisdiction to the federal courts over patents and copyrights but not over trademarks? Maybe trademarks tend to be more local. For example, you could have The Columbus Café™ suing The Café Columbus (not ™) in Ohio courts, and that’s fine because it’s a local dispute. However, patents and copyrights are probably going to be used throughout the country and it’s important that there’s no bias towards a local litigant. Original Jurisdiction

Appellate Jurisdiction

1331 gives district courts original jurisdiction District courts have the power to hear a case of all civil actions arising under Constitution, AFTER it’s been appealed. laws, treaties, etc. Basically gives the power to hear a case FIRST. 1

General Jurisdiction No limits on cases that a particular court can hear.

Limited Jurisdiction Article III, §2 limits federal courts to those listed.

Exclusive Jurisdiction

Concurrent Jurisdiction

Limits juris. Only to federal courts. Examples are above (admiralty, bankruptcy, antitrust)

1331 doesn’t grant federal courts exclusivity; cases arising under this statute can be brought in state courts as well as federal courts. Diversity jurisdiction is concurrent via §1332.

What are some reasons that an attorney or litigant might want a case either in federal or state court and not the other? 1. Some federal courts have a “rocket docket”! 2. A defendant may get more sympathy from a local judge than a big city federal judge. 3. A federal jury, which is drawn from a different pool, may be more or less likely to award higher or lower damages. 4. A federal judge may feel more secure in reducing a large jury award because he or she has lifetime tenure. 5. A federal judge may be more likely to enforce an arbitration agreement. 6. The opposing lawyer may be more comfortable in state court than federal court. Federal judges are “shielded” in two ways: 1. Lifetime tenure “insulates” them from political pressure. 2. Limited jurisdiction “insulates” them from an overly broad caseload. The take-home message is that it matters whether you’re in federal or state court, and that’s why subject matter jurisdiction is important. Personal Jurisdiction -limits both state and federal courts in relation to particular ∆s. If ∆s lack requisite connection w/forum state, due process prevents courts in that state from rendering jgmt. on ∆s. -is a waiveable defense

Subject-matter Jurisdiction -decides what type of cases belong in which courts, state or federal. -Rule (h)(3) allows a court to dismiss an action for lack of jurisdiction of the subject matter, either by suggestion of the parties or the court. -isn’t a waiveable defense

B. Federal Question Jurisdiction: Today, 28 U.S.C. § 1331 gives federal district courts jurisdiction over cases “arising under” the Constitution, statutes, or treaties of the federal government. The problem is that nobody quite knows what “arising under” means.

1. 28 U.S.C. § 1331. Federal Question The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States. 2. Louisville & Nashville Railroad v. Mottley i. Facts: The facts are actually irrelevant, but the Mottleys got a lifetime free rail pass to settle a claim against the railroad. Later, Congress outlawed all lifetime rail passes and the railroad refused to honors the Mottleys’ pass anymore. The Mottleys sued in federal court for specific performance to keep their pass. They basically anticipated that the defense of the railroad would be to say that Congress forbade them from honoring the pass but that such an interpretation of the statute violated the Fifth Amendment, and that’s why the Mottleys brought suit in federal court. The federal court granted specific performance to the Mottleys and the railroad appealed to the Supreme Court. ii. Rule: A suit arises under the Constitution and laws of the United States only if the original statement of the plaintiff’s cause of action shows that it is based on the Constitution or federal statutes. (A federal court can’t have jurisdiction just because the defendant might use a federal law or the Constitution to defend himself.) iii. Holding: The case is reversed and remanded to the federal district court which is directed to dismiss the case for lack of subject matter jurisdiction. iv. Reasoning: The court cites two cases, Tennessee v. Union & Planters’ Bank and Boston & Montana Consolidated Copper & Silver Mining Company v. Montana Ore Purchasing Company. These cases set up the rule stated above. The basic reason for this rule is that it is unnecessary for a plaintiff to answer their own complaint. 3. Well-pleaded complaint rule: From Mottley. A suit that arises under Constitution and laws of U.S. is only so when π’s statement of his own COA shows that it is based upon those laws or that Constitution. It isn’t enough that π alleges some anticipated defense to his COA and asserts that the defense is invalidated by some provision of U.S. Constitution. Although such allegations show that very likely, in course of litigation, a question under Constitution would arise, they don’t show that the suit, that is, π’s original COA, arises under Constitution. FEDERAL CLAIM MUST APPEAR AS A PART OF THE COMPLAINT. 4. Two tests for determining ‘Arises Under’: (1) American Well Works: a suit arises under the law that creates the COA (2) Smith v. Kansas City Title: law that created COA was state law, federal law was only an element but there is federal jurisdiction ‘arises under’ b/c there was a substantial federal interest. ***NOTE: These aren’t conjunctive tests! You don’t have to use both to satisfy federal question; they’re separate tests! C. Diversity Jurisdiction: This is one of the oldest grants of jurisdiction to the federal courts. It has become controversial. We don’t know why the Framers of the Constitution chose to allow (but not mandate) federal court jurisdiction over “controversies between citizens of different States” and “between a State, or the citizens thereof, and foreign States, citizens or subjects.” One view is that we didn’t want an out-of-state defendant to experience

bias in the local court. A minority view is that the federal courts were seen as qualitatively superior and thus ought to get as many cases as possible. Statutory authority is §1332. 1. §1332. Diversity of Citizenship; Amount in Controversy; Costs. a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between — (1) citizens of different States; (2) citizens of a State and citizens or subjects of a foreign state; (3) citizens of different States and in which citizens or subjects of a foreign state are additional parties; and (4) a foreign state, defined in section 1603 (a) of this title, as plaintiff and citizens of a State or of different States. For the purposes of this section, section 1335, and section 1441, an alien admitted to the United States for permanent residence shall be deemed a citizen of the State in which such alien is domiciled. (b) Except when express provision therefor is otherwise made in a statute of the United States, where the plaintiff who files the case originally in the Federal courts is finally adjudged to be entitled to recover less than the sum or value of $75,000, computed without regard to any setoff or counterclaim to which the defendant may be adjudged to be entitled, and exclusive of interest and costs, the district court may deny costs to the plaintiff and, in addition, may impose costs on the plaintiff. (c) For the purposes of this section and section 1441 of this title— (1) a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business, except that in any direct action against the insurer of a policy or contract of liability insurance, whether incorporated or unincorporated, to which action the insured is not joined as a party-defendant, such insurer shall be deemed a citizen of the State of which the insured is a citizen, as well as of any State by which the insurer has been incorporated and of the State where it has its principal place of business; and (2) the legal representative of the estate of a decedent shall be deemed to be a citizen only of the same State as the decedent, and the legal representative of an infant or incompetent shall be deemed to be a citizen only of the same State as the infant or incompetent. (d) (1) In this subsection— (A) the term “class” means all of the class members in a class action; (B) the term “class action” means any civil action filed under rule 23 of the Federal Rules of Civil Procedure or similar State statute or rule of judicial procedure authorizing an action to be brought by 1 or more representative persons as a class action; (C) the term “class certification order” means an order issued by a court approving the treatment of some or all aspects of a civil action as a class action; and (D) the term “class members” means the persons (named or unnamed) who fall within the definition of the proposed or certified class in a class action. (2) The district courts shall have original jurisdiction of any civil action in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs, and is a class action in which— (A) any member of a class of plaintiffs is a citizen of a State different from any defendant;

(B) any member of a class of plaintiffs is a foreign state or a citizen or subject of a foreign state and any defendant is a citizen of a State; or (C) any member of a class of plaintiffs is a citizen of a State and any defendant is a foreign state or a citizen or subject of a foreign state. (3) A district court may, in the interests of justice and looking at the totality of the circumstances, decline to exercise jurisdiction under paragraph (2) over a class action in which greater than onethird but less than two-thirds of the members of all proposed plaintiff classes in the aggregate and the primary defendants are citizens of the State in which the action was originally filed based on consideration of— (A) whether the claims asserted involve matters of national or interstate interest; (B) whether the claims asserted will be governed by laws of the State in which the action was originally filed or by the laws of other States; (C) whether the class action has been pleaded in a manner that seeks to avoid Federal jurisdiction; (D) whether the action was brought in a forum with a distinct nexus with the class members, the alleged harm, or the defendants; (E) whether the number of citizens of the State in which the action was originally filed in all proposed plaintiff classes in the aggregate is substantially larger than the number of citizens from any other State, and the citizenship of the other members of the proposed class is dispersed among a substantial number of States; and (F) whether, during the 3-year period preceding the filing of that class action, 1 or more other class actions asserting the same or similar claims on behalf of the same or other persons have been filed. (4) A district court shall decline to exercise jurisdiction under paragraph (2)— (A) (i) over a class action in which— (I) greater than two-thirds of the members of all proposed plaintiff classes in the aggregate are citizens of the State in which the action was originally filed; (II) at least 1 defendant is a defendant— (aa) from whom significant relief is sought by members of the plaintiff class; (bb) whose alleged conduct forms a significant basis for the claims asserted by the proposed plaintiff class; and (cc) who is a citizen of the State in which the action was originally filed; and (III) principal injuries resulting from the alleged conduct or any related conduct of each defendant were incurred in the State in which the action was originally filed; and (ii) during the 3-year period preceding the filing of that class action, no other class action has been filed asserting the same or similar factual allegations against any of the defendants on behalf of the same or other persons; or (B) two-thirds or more of the members of all proposed plaintiff classes in the aggregate, and the primary defendants, are citizens of the State in which the action was originally filed. (5) Paragraphs (2) through (4) shall not apply to any class action in which— (A) the primary defendants are States, State officials, or other governmental entities against whom the district court may be foreclosed from ordering relief; or (B) the number of members of all proposed plaintiff classes in the aggregate is less than 100.

(6) In any class action, the claims of the individual class members shall be aggregated to determine whether the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs. (7) Citizenship of the members of the proposed plaintiff classes shall be determined for purposes of paragraphs (2) through (6) as of the date of filing of the complaint or amended complaint, or, if the case stated by the initial pleading is not subject to Federal jurisdiction, as of the date of service by plaintiffs of an amended pleading, motion, or other paper, indicating the existence of Federal jurisdiction. (8) This subsection shall apply to any class action before or after the entry of a class certification order by the court with respect to that action. (9) Paragraph (2) shall not apply to any class action that solely involves a claim— (A) concerning a covered security as defined under 16(f)(3) [1] of the Securities Act of 1933 (15 U.S.C. 78p (f)(3) [2]) and section 28(f)(5)(E) of the Securities Exchange Act of 1934 (15 U.S.C. 78bb (f)(5)(E)); (B) that relates to the internal affairs or governance of a corporation or other form of business enterprise and that arises under or by virtue of the laws of the State in which such corporation or business enterprise is incorporated or organized; or (C) that relates to the rights, duties (including fiduciary duties), and obligations relating to or created by or pursuant to any security (as defined under section 2(a)(1) of the Securities Act of 1933 (15 U.S.C. 77b (a)(1)) and the regulations issued thereunder). (10) For purposes of this subsection and section 1453, an unincorporated association shall be deemed to be a citizen of the State where it has its principal place of business and the State under whose laws it is organized. (11) (A) For purposes of this subsection and section 1453, a mass action shall be deemed to be a class action removable under paragraphs (2) through (10) if it otherwise meets the provisions of those paragraphs. (B) (i) As used in subparagraph (A), the term “mass action” means any civil action (except a civil action within the scope of section 1711 (2)) in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact, except that jurisdiction shall exist only over those plaintiffs whose claims in a mass action satisfy the jurisdictional amount requirements under subsection (a). (ii) As used in subparagraph (A), the term “mass action” shall not include any civil action in which— (I) all of the claims in the action arise from an event or occurrence in the State in which the action was filed, and that allegedly resulted in injuries in that State or in States contiguous to that State; (II) the claims are joined upon motion of a defendant; (III) all of the claims in the action are asserted on behalf of the general public (and not on behalf of individual claimants or members of a purported class) pursuant to a State statute specifically authorizing such action; or (IV) the claims have been consolidated or coordinated solely for pretrial proceedings. (C)

(i) Any action(s) removed to Federal court pursuant to this subsection shall not thereafter be transferred to any other court pursuant to section 1407, or the rules promulgated thereunder, unless a majority of the plaintiffs in the action request transfer pursuant to section 1407. (ii) This subparagraph will not apply— (I) to cases certified pursuant to rule 23 of the Federal Rules of Civil Procedure; or (II) if plaintiffs propose that the action proceed as a class action pursuant to rule 23 of the Federal Rules of Civil Procedure. (D) The limitations periods on any claims asserted in a mass action that is removed to Federal court pursuant to this subsection shall be deemed tolled during the period that the action is pending in Federal court. (e) The word “States”, as used in this section, includes the Territories, the District of Columbia, and the Commonwealth of Puerto Rico. 2. Redner v. Sanders i. Facts: ii. Rule: iii. Holding: iv. Reasoning: 3. Saadeh v. Farouki i. Facts: The plaintiff is a Greek citizen. The defendant is a permanent resident of the United States residing in Maryland but whose citizenship is Jordanian. The plaintiff sued for breach of contract in federal court, citing diversity jurisdiction, and prevailed on the merits at trial. The defendant appealed on the merits. The Court of Appeals asked the parties to write briefs on jurisdiction. ii. Rule: The statute states that at least one of the parties in a dispute must be a “citizen of a State” in order for the federal courts to have diversity jurisdiction. Furthermore, the statute says that for the purposes of the section in question “an alien admitted to the United States for permanent residence shall be deemed a citizen of the State in which such alien is domiciled”. iii. Holding: The case was dismissed for lack of subject matter jurisdiction. iv. Reasoning: The court chooses to liberally interpret the statute because it feels that a literal reading would cause an undesirable and unintended result, that is, that federal diversity jurisdiction could exist over a dispute involving only foreign litigants. The court uses the legislative history to interpret the amendment to the statute as a move to narrow federal diversity jurisdiction rather than broaden it. The statute apparently was intended to reduce the federal caseload. The court finds that the statute was intended to eliminate federal diversity jurisdiction between a United States citizen and a resident alien living in the same state as that United States citizen. 4. Complete Diversity Rule: Established in Strawbridge v. Curtiss; No one party on one side of a suit may be a citizen of same state as any party on other side. Π ∆ (MX) Π ∆

v.

No (Japan)

v. ∆

Yes

(CA) Π ∆ (CA) Π ∆ (CA)

Π ∆ (MX) Π (MX)

(MX) v.

(Japan) Yes

(N.Y.) (Japan) v.

No

(Japan)

5. Citizenship: • Individuals=by domicile (their residence with they intend to remain) • Corporations=state of incorporation or state of its principal place of business. • Determined at the time a suit is filed. 6. Minimal Diversity=established by Congress which says that at least one of the parties on each side must be diverse. 7. Amount in controversy rules- it must appear to a legal certainty that the claim is really for less than the juris. amount to justify dismissal. -P mere hope for punitive damages cannot be the sole basis for jurisdiction. (1) a single P, with two or more unrelated claims against a single D MAY aggregate claims to satisfy that statutory amount (2) if 2 P each have claims against a single D, they MAY NOT aggregate their clams as they are regarded as “separate and distinct” (3) if 1 P has a claim in excess of the statutory amount and a 2nd P has a claim for less than the statutory amount, both against the same D, the 1st P can sue in federal court. The 2nd P can invoke supplemental jurisdiction where the claims are related. (4) with multiple P’s or D’s with a common undivided interest and single title or right, the value of the total interest will be used to determine the amount in controversy. This is not the case if the claims are considered “separate and distinct” (5) class actions- at least some members must have claims that exceed the statutory amount—cannot just aggregate all claims to satisfy the statutory amount 8. Counterclaims*when a P’s claims exceeds $75,000— (1) compulsory counterclaim (if not brought before final judgment, it is barred)—may be heard regardless of the amount (2) permissive counterclaim (one which maybe asserted, but if not asserted, it is not lost) —requires and independent jurisdictional basis D. Supplemental Jurisdiction: The prior two jurisdictional concepts we went over, diversity jurisdiction and federal question jurisdiction, tend to narrow the caseload of the federal courts. This one tends to broaden it somewhat. In 1990, we got 28 U.S.C. § 1367 which codified stuff that had previously just been judge-made law. Luckily for us, things are much simpler now than before 1990, because there used to be two branches of supplemental jurisdiction: (1) pendant jurisdiction and (2) ancillary jurisdiction. 1. Exists whenever there’s a claim and relationship btwn. That claim and claim outside constitutionally enumerated jurisdiction of federal courts permits the conclusion that the

entire action before court comprise but one constitution case. Federal claim must have substance sufficient to confer subject-matter juris. State and federal claims must derive from a common nucleus of operative fact. But if, considered w/o regard to their federal or state character, a π’s claims are such that he would ordinarily be expected to try them all in one judicial proceeding, then, assuming substantiality of the federal issue, there’s power in federal courts to hear the whole case. United Mine Workers v. Gibbs. 2. 28 U.S.C. § 1367. Supplemental Jurisdiction (a) Except as provided in subsections (b) and (c) or as expressly provided otherwise by Federal statute, in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties. (b) In any civil action of which the district courts have original jurisdiction founded solely on section 1332 of this title, the district courts shall not have supplemental jurisdiction under subsection (a) over claims by plaintiffs against persons made parties under Rule 14, 19, 20, or 24 of the Federal Rules of Civil Procedure, or over claims by persons proposed to be joined as plaintiffs under Rule 19 of such rules, or seeking to intervene as plaintiffs under Rule 24 of such rules, when exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332. (c) The district courts may decline to exercise supplemental jurisdiction over a claim under subsection (a) if— (1) the claim raises a novel or complex issue of State law, (2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction, (3) the district court has dismissed all claims over which it has original jurisdiction, or (4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction. (d) The period of limitations for any claim asserted under subsection (a), and for any other claim in the same action that is voluntarily dismissed at the same time as or after the dismissal of the claim under subsection (a), shall be tolled while the claim is pending and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period. (e) As used in this section, the term “State” includes the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession of the United States.

(1) (2) (3) (4)

3. In applying 1331 ‘so related’, it would be that claims are so related and are directly in line with federal claim; “common nucleus of operative fact.” 4. 1367(b) is only applied when jurisdiction is based SOLELY on diversity jurisdiction under 1332. It prevents: (1) elimination of complete diversity; (2) prevents πs from going around 1332 by filing against diverse ∆ and later adding a non-diverse ∆ by joining them. 5. Test for determining subject-matter jurisdiction: Independent basis for jurisdiction over claim? If not, is 1367(a) satisfied? Does 1367(b) apply? (applies only if jurisdiction is based on 1332) Would court may dismiss anyway under 1367(c)?

6. Discretionary nature under 1367(c) is unique b/c it allows courts to deny juris. But 1331 and 1332 have no such language. 7. Jin v. Ministry of State Security i. Facts: ii. Rule: 2 part test for supplemental jurisdiction: (1) 1367(a) whether π’s claims shares a common nucleus of operative facts w/other federal claims. (2) 1367(c) whether interests of judicial economy, convenience, and fairness support exercise of suppl. Juris. Through complex issues of state law. iii. Holding: iv. Reasoning: 8. Exxon Mobil Corp. v. Allapattah Services, Inc. i. Facts: ii. Rule: iii. Holding: iv. Reasoning: E. Removal: Statutory authority is §1441, §1446, §1447, §1448 1. §1441. Actions Removable, Generally

(a) Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending. For purposes of removal under this chapter, the citizenship of defendants sued under fictitious names shall be disregarded. (b) Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties. Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought. (c) Whenever a separate and independent claim or cause of action within the jurisdiction conferred by section 1331 of this title is joined with one or more otherwise nonremovable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters in which State law predominates. (d) Any civil action brought in a State court against a foreign state as defined in section 1603 (a) of this title may be removed by the foreign state to the district court of the United States for the district and division embracing the place where such action is pending. Upon removal the action shall be tried by the court without jury. Where removal is based upon this subsection, the time limitations of section 1446 (b) of this chapter may be enlarged at any time for cause shown. (e) (1) Notwithstanding the provisions of subsection (b) of this section, a defendant in a civil action in a State court may remove the action to the district court of the United States for the district and division embracing the place where the action is pending if— (A) the action could have been brought in a United States district court under section 1369 of this title; or (B) the defendant is a party to an action which is or could have been brought, in whole or in part, under section 1369 in a United States district court and arises from the same accident as the action in State court, even if the action to be removed could not have been brought in a district court as an original matter. The removal of an action under this subsection shall be made in accordance with section 1446 of this title, except that a notice of removal may also be filed before trial of the

action in State court within 30 days after the date on which the defendant first becomes a party to an action under section 1369 in a United States district court that arises from the same accident as the action in State court, or at a later time with leave of the district court. (2) Whenever an action is removed under this subsection and the district court to which it is removed or transferred under section 1407 (j) has made a liability determination requiring further proceedings as to damages, the district court shall remand the action to the State court from which it had been removed for the determination of damages, unless the court finds that, for the convenience of parties and witnesses and in the interest of justice, the action should be retained for the determination of damages. (3) Any remand under paragraph (2) shall not be effective until 60 days after the district court has issued an order determining liability and has certified its intention to remand the removed action for the determination of damages. An appeal with respect to the liability determination of the district court may be taken during that 60-day period to the court of appeals with appellate jurisdiction over the district court. In the event a party files such an appeal, the remand shall not be effective until the appeal has been finally disposed of. Once the remand has become effective, the liability determination shall not be subject to further review by appeal or otherwise. (4) Any decision under this subsection concerning remand for the determination of damages shall not be reviewable by appeal or otherwise. (5) An action removed under this subsection shall be deemed to be an action under section 1369 and an action in which jurisdiction is based on section 1369 of this title for purposes of this section and sections 1407, 1697, and 1785 of this title. (6) Nothing in this subsection shall restrict the authority of the district court to transfer or dismiss an action on the ground of inconvenient forum. (f) The court to which a civil action is removed under this section is not precluded from hearing and determining any claim in such civil action because the State court from which such civil action is removed did not have jurisdiction over that claim.

Taylor’s Test for 1441: Is it a case that could’ve been brought in federal district (1441(a))? Is it a case that could’ve been brought by that ∆ at that time (1441(b))? 2. §1446. Procedure for Removal

(a) A defendant or defendants desiring to remove any civil action or criminal prosecution from a State court shall file in the district court of the United States for the district and division within which such action is pending a notice of removal signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and containing a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant or defendants in such action. (b) The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter. If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable, except that a case

may not be removed on the basis of jurisdiction conferred by section 1332 of this title more than 1 year after commencement of the action. (c) (1) A notice of removal of a criminal prosecution shall be filed not later than thirty days after the arraignment in the State court, or at any time before trial, whichever is earlier, except that for good cause shown the United States district court may enter an order granting the defendant or defendants leave to file the notice at a later time. (2) A notice of removal of a criminal prosecution shall include all grounds for such removal. A failure to state grounds which exist at the time of the filing of the notice shall constitute a waiver of such grounds, and a second notice may be filed only on grounds not existing at the time of the original notice. For good cause shown, the United States district court may grant relief from the limitations of this paragraph. (3) The filing of a notice of removal of a criminal prosecution shall not prevent the State court in which such prosecution is pending from proceeding further, except that a judgment of conviction shall not be entered unless the prosecution is first remanded. (4) The United States district court in which such notice is filed shall examine the notice promptly. If it clearly appears on the face of the notice and any exhibits annexed thereto that removal should not be permitted, the court shall make an order for summary remand. (5) If the United States district court does not order the summary remand of such prosecution, it shall order an evidentiary hearing to be held promptly and after such hearing shall make such disposition of the prosecution as justice shall require. If the United States district court determines that removal shall be permitted, it shall so notify the State court in which prosecution is pending, which shall proceed no further. (d) Promptly after the filing of such notice of removal of a civil action the defendant or defendants shall give written notice thereof to all adverse parties and shall file a copy of the notice with the clerk of such State court, which shall effect the removal and the State court shall proceed no further unless and until the case is remanded. (e) If the defendant or defendants are in actual custody on process issued by the State court, the district court shall issue its writ of habeas corpus, and the marshal shall thereupon take such defendant or defendants into his custody and deliver a copy of the writ to the clerk of such State court. (f) With respect to any counterclaim removed to a district court pursuant to section 337(c) of the Tariff Act of 1930, the district court shall resolve such counterclaim in the same manner as an original complaint under the Federal Rules of Civil Procedure, except that the payment of a filing fee shall not be required in such cases and the counterclaim shall relate back to the date of the original complaint in the proceeding before the International Trade Commission under section 337 of that Act

3. §1447. Procedure After Removal, Generally. (a) In any case removed from a State court, the district court may issue all necessary orders and process to bring before it all proper parties whether served by process issued by the State court or otherwise. (b) It may require the removing party to file with its clerk copies of all records and proceedings in such State court or may cause the same to be brought before it by writ of certiorari issued to such State court. (c) A motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal under section 1446 (a). If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded. An order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal. A

certified copy of the order of remand shall be mailed by the clerk to the clerk of the State court. The State court may thereupon proceed with such case. (d) An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise, except that an order remanding a case to the State court from which it was removed pursuant to section 1443 of this title shall be reviewable by appeal or otherwise. (e) If after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the State court. 4. §1448. Process After Removal In all cases removed from any State court to any district court of the United States in which any one or more of the defendants has not been served with process or in which the service has not been perfected prior to removal, or in which process served proves to be defective, such process or service may be completed or new process issued in the same manner as in cases originally filed in such district court. This section shall not deprive any defendant upon whom process is served after removal of his right to move to remand the case. 5. Caterpillar, Inc. v. Lewis (Represents an exception to time-of-filing rule; VERY narrow case) i. Facts: Lewis sued Caterpillar in state court along with Whayne, a local company. The insurance carrier for Lewis’s employer became a plaintiff to try to subrogate Caterpillar and Whayne for workers’ comp. Lewis settled with Whayne. Caterpillar moved for removal upon the settlement between Lewis and Whayne, saying that the case now had complete diversity between the parties. Lewis argued that Whayne was still a defendant because they were still getting sued by the insurance company. The district court denied Lewis’s objection to removal. Liberty Mutual and Whayne settled before trial. Caterpillar then won at trial. ii. Rule: Once a case comes to trial in federal court, general efficiency considerations will trump fairness considerations in specific cases. iii. Holding: iv. Reasoning: 6. Grupo Dataflux v. Atlas Global Group, L.P. i. Facts: ii. Rule: iii. Holding: iv. Reasoning:

1. 2.

IV. THE ERIE PROBLEM A. State Courts as Lawmakers in a Federal System The Issue in Historical Context Constitutionalizing the Issue a. Erie Railroad v. Tompkins (STATE SUBSTANTIVE LAW APPLIES IN FEDERAL DIVERSITY CASES!) i. Facts: Tompkins got his arm lopped off in a train accident. He sued the

railroad in the Southern District of New York to try to take advantage of the rule of Swift v. Tyson, which said that federal court didn’t have to use state common law to decide cases. Tompkins won at trial and the railroad appealed to the Second Circuit, arguing that Pennsylvania law, which would have been more favorable to the defendant, should have been applied. The Second Circuit upheld the verdict for Tompkins, refusing to interpret Pennsylvania law. The Supreme Court granted certiorari because they wanted to strike down Swift. ii. Rule: NEW RULE!!! Federal courts must follow and apply both state statutes and state case law in deciding cases unless the case is governed by federal statutes or the United States Constitution. iii. Holding: Swift is overturned. The present case is remanded to the Second Circuit for them to determine how Pennsylvania law would apply to the situation. iv. Reasoning: Brandeis and the Court attack Swift on several fronts: 1. Swift relied on a bogus interpretation of the Rules of Decision Act, as proven by Chuck Warren. 2. Swift has had disastrously unfair results in practice. 3. Swift is unconstitutional because it usurps part of the power that the Constitution left to the states to make their own laws (statutes and case law). 4. Lack of uniformity led to: (1) forum shopping; (2) inequitable administration of laws. THESE ARE THE CENTRAL AIMS OF ERIE! §1652. State Laws as Rules of Decision (Rules of Decision Act-RDA) The laws of the several states, except where the Constitution or treaties of the United States 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. 3.

B. The Limits of State Power in Federal Courts Interpreting the Constitutional Command of Erie a. Guaranty Trust Co. v. York i. Facts: The plaintiffs sued for some stuff. The defendant countered by claiming that the New York statute of limitations barred the plaintiffs’ suit. The plaintiffs claimed that the New York statute of limitations did not apply under Erie because their claim was in equity rather than in law. The Second Circuit found that the plaintiffs were right and that their suit could proceed. The defendant appealed to the Supreme Court. ii. Rule: NEW RULE, AGAIN! Established the outcome-determinative test (See below.) The outcome of the case in federal court should be the same as it would be in state court. iii. Holding: The judgment was reversed and the case was remanded, presumably to be dismissed by application of the New York statute of limitations. iv. Reasoning: The Court looks to the intent of the ruling in Erie and asserts that it doesn’t matter whether state law is substantive or procedural as long as it will have an impact on the outcome of a case.

)

4.

OUTCOME-DETERMINATIVE TEST: If you didn’t apply state law in federal court, would the outcome be different than it would be if filed in state court? If so, the federal court is required to apply state law, as a matter of policy, not constitutional compulsion, where using a separate federal rule could lead to a different outcome. Erie said follow state law, because there can be no other law, Guaranty pronounced follow state law, even where there can be federal law, if it will further the policy of uniform outcomes in state and federal courts in diversity cases. Guaranty attempts to promote the same policies as Erie: prevention of (1) forum shopping and (2) inequitable administration of laws. b. Byrd v. Blue Ridge Rural Electric Cooperative i. Facts: The plaintiff sued the defendant in tort. There was an issue of immunity that came up. Under South Carolina law, this was a matter for the judge, while under federal rules, it was a matter for a jury. ii. Rule: NEW RULE! The federal practice will be used when it is not certain that using the federal rule will be outcome-determinative. iii. Holding: The case is reversed and remanded, and the lower courts are instructed to use the federal rule and have the issue of immunity decided by a jury and not a judge. Byrd says, in deciding whether state or federal practice should prevail, 3 questions should be asked: Is state practice “bound up with the definition of the rights and obligations of the parties?” -If so, state law governs. -This is substantive question. -In Erie, stat rule (duty of care to trespassers) had everything to do w/rights and obligations, so state rule applied. (2) Even if it isn’t part of substantive rights and obligations, would its application determine outcome of the case? -In York, answer was yes. If federal court didn’t apply statute of limitations, claim wouldn’t have been barred. If case were filed in state court, where statute of limitations was 2 years, case would’ve been dismissed b/c statute of limitations had expired. (3) Are there “affirmative countervailing” considerations of federal judicial administration present? The idea of Byrd is that some procedural practices are so much a part of the substantive law that they should be followed. Byrd’s distinctive doctrinal contribution lies in its 3rd question, which requires courts to balance state against federal interests. De-Constitutionalizing Erie a. Hanna v. Plumer i. Facts: Hanna, from Ohio, sued the estate of Osgood, from Massachusetts, over a car accident in South Carolina. Hanna served process by leaving documents with the wife of the executor, which complied with the FRCP, but not Massachusetts law. The defendant moved to dismiss on this basis, citing Erie and subsequent cases, and the trial court granted the motion. The plaintiff

appealed, saying that the FRCP rules in diversity actions. The Circuit Court ruled that the state statute should govern because it is substantive rather than merely procedural. The plaintiff appealed to the Supreme Court. ii. Rule: NEW(ish) RULE! Basically, Erie does not kill the FRCP. iii. Holding: The decision of the Circuit Court of Appeals was reversed. The FRCP live on. iv. Reasoning: The majority writes that the Federal Rules of Civil Procedure as adopted by the Supreme Court do not violate the Rules Enabling Act, nor are they unconstitutional. The Court is trying to remedy a divergence between the Erie line of cases and those construing the Rules Enabling Act. The Court finds that if there was no conflict with state law, the Federal Rules of Civil Procedure would control, but Erie presents a problem. The defendant argued that the outcome-determinative test must be used, and under that test the defendant would win immediately. However, the Court says that the outcome-determinative test is not absolute. Erie is meant to remedy problems arising from big differences between state and federal law, not tiny, insubstantial ones. The Court suggests that the difference between Massachusetts law and the Federal Rules of Civil Procedure in this case is not that big. To figure out which law controls, the Court says that the policy reasons underlying Erie must be considered. Erie, according to this Court, has two goals: 1. Stop forum-shopping, and 2. Avoid unfair differences in administration of justice between state and federal courts. The Court says that the competing rules, though outcome-determinative, have little or no relevance to the choice of a forum. You wouldn’t decide to file in state versus federal court based solely on the choice between these two laws. The difference between the two laws also doesn’t raise any equal protection problems. The Court further argues that Erie has never been used to kill a Federal Rule. The Federal Rules of Civil Procedure have not been held to be invalid, only not as broad as alleged and thus trumped in a particular case by a state rule. The Court says that the tests of Erie and of the Rules Enabling Act are not identical. The nature of the Rules Enabling Act is that it kills rules that go too far given the constitutional and Congressional mandate. Nobody is allowed to write unconstitutional rules. But Erie dealt with a difference in law that was clearly substantive, and didn’t kill the Federal Rules of Civil Procedure. The Court claims that Erie wasn’t meant to curtail the power of Congress to say how things should run at a procedural level in the federal courts. v. Concurring: Justice Harlan, in a concurring opinion, proposes an alternative rule: the state rule should prevail if “the choice of rule would substantially affect those primary decisions respecting human conduct which our constitutional system leaves to state regulation.” I don’t know what the heck that means. Harlan objects to the rule made by the majority in that he feels that anything that can reasonably be called “procedural” and put into the Federal Rules of Civil Procedure will be allowed to control, no matter how much it screws up rights granted by the states. Harlan finds that this makes the Federal

Rules of Civil Procedure too absolute. Harlan says that in the present case, the Federal Rules of Civil Procedure should rule because the effect of using them instead of the Massachusetts rule “would not be substantial”. Harlan basically says: no harm, no foul, so we’ll use the Federal Rule. §2072. Rules Enabling Act (REA) The Supreme Court shall have the power to prescribe, by general rules, the forms of process, writs, pleadings, and motions, and the practice and procedure of the district courts of the United States in civil actions. Such rules shall not abridge, enlarge or modify any substantive right and shall preserve the right of trial by jury.

Analytical Framework under Hanna: Source of federal law? REA Hanna “Hanna II”

RDA Erie/York/Byrd “Hanna I”

Conflict w/FRCP, Federal statutes? Yes conflict

Conflict w/federal practices, policies, common law, Judge-made law? No conflict

(1) Valid under REA? (a) “really regulates procedure” (b) “abridges, enlarges, modifies any substantive right” (2) Constitutional? (“arguably procedural”)

Go to 3 questions in Hanna 1 (1) Is substantive rule bound up with state-created rights and obligations? (2) Would application determine outcome of the case? -prevention of forum shopping -prevention of inequitable Administration of laws (3) Are there affirmative countervailing considerations of federal judicial administration present?

• • •

Constitutional standard isn’t really a test at all, almost any rule is constitutional. Most analysis is focused on (1)(b) b/c (1)(a) is easy b/c once a rule is approved by Congress, Supreme Court, etc. most assume it’s valid. No rule has ever been found to fail this test. In determining what makes an issue more substantive than procedural (part (1)(b)), many theories have developed: (1) Harlan’s concurrence: If choice of rule would substantially affect those primary decisions respecting human conduct which our constitutional system leaves to state regulation. Example: Speed limit=regulates how fast you drive, if you violate rule you may be liable to those you have a car accident with. (2) Consider whether it’s procedural=a rule designed to make process of litigation a fair and efficient mechanism for fair resolution of disputes. Everything else is substantive.

Determining the Scope of Federal Law: Avoiding and Accommodating Erie a. Semeteck Int’l Inc. v. Lockheed Martin Corp. i. Facts: ii. Rule: iii. Holding: iv. Reasoning: