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Contributed by Roger Martin, 2L Student by night at U. of San Diego, Patent Agent by day at rmartin@qualcomm.com

** Sierocinski v. E.I. Du Pont De Nemours & Co., (1939)

2. Facts: P. was injured while crimping a dynamite cap.

3. Procedural Posture: P. made a claim for relief under Rule 8. The trial court granted the D.'s motion for a more definite statement under Rule 12(e). The amended complaint stated that the P. was injured by premature explosion of the dynamite cap caused by the negligent acts of the D. which included manufacturing and distributing of the cap "in such a fashion that it was unable to withstand the crimping which D. knew it would be subjected to." The trial court granted the D.'s ensuing motion to strike the amended statement as failing to set forth any specific act of negligence, and dismissed the action. P. appealed to this court.

4. Issue: What are the requirements of a claim?

5. Holding: "A short and plain statement of the claim showing that the pleader is entitled to relief." Rule 8(a)(2).

6. P.'s Argument: The claim sets for a specific averment of negligent manufacture and distribution of the cap in such a fashion as to make it explode when crimped. Such a statement is sufficient to show that the P. is entitled to relief.

7. D. Argument: It is not put on notice by the complaint as to whether it must meet a claim of warranty, of misrepresentation, of the sue of improper ingredients, or of faulty inspection. Thus, it is insufficient to state a grounds for relief.

8. Majority Reasoning: First, a plaintiff need not plead any evidence. Any further information as to the specific nature of the negligence claim would be in the nature of evidence. Second, Form 9 of the appendix to the rules was meant to indicate the simplicity and brevity of the statement of the claim necessary, and it merely avers that the D. negligently drove an automobile against the P.. Lastly, if the D. needs further information to conduct its defense, then it can use Rule 33 interrogatories.

** Conley v. Gibson, (1957)

2. Facts: Black members of the Brotherhood of Railway and Steamship Clerks brought suit under the Railway Labor Act to compel the union to represent them without racial discrimination.

3. Procedural Posture: The trial court granted the D.'s motion to dismiss on the ground that the complaint was defective for failure to state a claim upon which relief could be granted.

4. Issue: Whether a claim for relief is insufficient if it appears that the plaintiff can prove facts in support of the claim which would entitle him to relief, but does not include such facts in the claim.

5. Holding: No. "A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief."

6. P.'s Argument: The claim stated allegations that the union had not represented the workers without racial discrimination. More specific facts were not required by the Rules. Thus, the lower court's dismissal was improper.

7. D. Argument: The claim lacked specific facts sufficient to state a claim which entitled the plaintiff to relief. Thus, the dismissal was proper.

8. Majority Reasoning: The Federal Rules do not require the claimant to detail the facts upon which he bases his claim. They only require a "short and plain statement of the claim" that will give fair notice to the D. of the claim and the grounds on which it rests. The Forms in the rules are an example. Any further facts needed to more narrowly define the scope of the claim and the possible defenses can be obtained through pretrial discovery. Rule 8(f) states that all pleadings shall be "construed as to do substantial justice." Thus, their purpose is to facilitate a proper decision on the merits, not to become a decisive trap for the less skilled counsel.

I. Multiple Claims
A. Rule 8(e)(2) allows a party to set forth two or more statements of a claim in the alternative, either in one or more separate counts or defenses.
1. assists a plaintiff who may be genuinely uncertain about what substantive law will apply, and what he will have to prove.
2. the pleader can take any version of the claim.
B. Definition of a Claim
1. analogous to "cause of action"
2. can be defined either by a single legal theory or a single natural grouping of events.
a. Rule 18(a) minimizes the distinction by permitting a plaintiff to join all of his claims either independently or in the alternative.
C. Consistency
1. Rule 8(e)(2) allows a party to claim as many separate claims as he has regardless of consistency.
2. Rule 11 requires that the signature constitute a certification that there is good ground to support it and that it is not interposed for improper purpose.

** Mohammed v. Union Carbide Corp., (1985)

2. Facts: P.'s company had done some work for Union Carbide, but then lost the business to a competitor, Gandol. In 1983, P. sued Gandol for libel and slander as well as antitrust counts.

3. Procedural Posture: In 1984, Gandol obtained summary judgment as to the libel and slander counts, and then eventually on the rest of the counts as well. Gandol then moved for and award of costs and attorney's fees under Rule 11.

4. Issue: What is the proper standard for determining whether an attorney has satisfied the requirements of Rule 11?

5. Holding: An attorney is obligated to make a "reasonable inquiry" into the operative facts and relevant law before signing his name to a pleading, motion or other paper.

6. P.'s Argument: The P.'s attorney failed to make any inquiry whatsoever concerning any of the claims contained in his original complaint asserted against Gandol. Thus, he has violated Rule 11 and should bear the sanctions.

7. D. Argument: The attorney made a good faith prosecution of the claim. The court can not make a reliable determination about the state of mind of the attorney when looking at the pleadings after the fact. The attorney had a duty to zealously represent his client, and such actions were thus justified.

8. Majority Reasoning: Unlike the subjective good-faith standard, the objective standard of "reasonable inquiry" can be measured. Furthermore, counsel's duty to zealously represent his client does not conflict with his duty to the fair administration of justice, because he is obligated to dissuade his client from pursuing frivolous claims, thereby saving the client money and time. Even though the attorney may think that a claim is borderline, his has a clear and unambiguous obligation to counsel the client against bringing meritless claims and to conduct a reasonable inquiry into the claims. In this case, the attorney made no inquiries. Thus, he is liable for the cost of Gandol's defense to the extent that it can be linked to claims which were not investigated.

** Coleman v. Frierson, (1985)

2. Facts: In 1982 Coleman sued the city, the mayor and the police chief in a 1983 action (deprivation of constitutional rights) when he was fired for allegedly uncovering corruption in the city government.

3. Procedural Posture: Frierson answered the complaint, denying many of the allegations. However, they were willfully delinquent during the discovery phase, leading the trial judge to eventually enter a default judgment as to liability. The jury determined damages, and the judge entered judgment on the verdict. Within the proper time, the defense made several motions to set aside the verdict, including one motion that asserted 1) res judicata on the grounds that Coleman's claims could have been raised previously in a lawsuit for unpaid wages which was dismissed with prejudice; 2) failure to state a claim upon which relief can be granted; and 3) Coleman was not deprived of due process because he had no property or liberty interest in his employment and was therefore not entitled to a pre-termination hearing.

4. Issue: 1) Whether res judicata may be raised as an affirmative defense to liability after judgment has been entered and the record in the case established. 2) Whether an affirmative defense of failure to state a claim upon which relief can be granted can be raised after disposition of the case on the merits. 3) Whether a challenge to one of the elements of the cause of action can be made after judgment.

5. Holding: No as to all three issues.

6. Majority Reasoning: 1) The affirmative defense of res judicata is a defense that asserts facts outside of the complaint. As such, it is normally pleaded in the defendant's answer to the complaint, or at least during trial. It may not be raised after judgment and establishment of the record because that would undermine the policy of certain and final judgments on the merits. 2) Citing Snead, Rule 12(h)(2) provides that the 12(b)(6) motion may be made during the pleading stage or at trial. The rule clearly implies that it may be made at any point up to judgment, when it them becomes forbidden. Any other construction would cause delay as well as undermine finality of judgments. 3) To allow additional challenges to become part of the record is to undermine the efficiency and finality of judgments. In all of the defenses, the defense had a year and a half to raise these issues before default judgment was entered. Default judgment must be treated as an action on the merits. Thus, absent any showing under Rule 60(b) that there was an excusable mistake, the judgment must be allowed to stand, otherwise the orderliness that the Rules promote would be lost. The Rules are liberal enough already to afford protection for those who need it.

I. Replying to defenses
A. Rule 7(f) indicates that the P. is not permitted to respond to an affirmative defense unless ordered by the court (normally upon motion by D.).
1. Ques 25: the prohibition on replies to defenses expedites the trial instead of attempting to try the case on the pleadings.
2. An order to compel the P. to respond to an affirmative defense should only be granted if it expedites the case.
B. Rule 8(d) provides that since the P. is not permitted to respond under Rule 7(f), that all unanswered allegations are taken to be denied or avoided.
1. Ex: P. makes allegations 1, 2, 3, and 4. D., in his answer, denies 1, and asserts affirmative defenses 5, 6, and 7. Thus, the matters in dispute are 1 (which was expressly denied), and 5-7 (which were impliedly denied or avoided under Rule 8(d)).
a. at trial, P. may expressly deny 5-7, or avoid them, or both.
C. Rule 12(f) provides that a motion to strike a defense may raise the point that the defense is "insufficient" in the same way that the D. can bring a 12(b)(6) motion.
1. Rule 12(h)(2) preserves P.'s right to bring the 12(f) motion through trial.

II. Counterclaims
A. Compulsory Counterclaims
1. Rule 13(a) requires that the D. include any counterclaims in his answer that arise out of the same "transaction or occurrence that is the subject matter of" P.'s claim.
2. Failure to assert the counterclaim in D.'s answer thereafter precludes the P. from asserting it:
a. in the P.'s pending action; and
1) Rule 13(f) provides that the D. can, by leave of the court, amend his claim to include a counterclaim if it was first omitted through oversight.
b. in an independent action.
1) Ex: P. sues D. who moves under Rule 12(b)(6) and wins. D. never answers. D. then brings an independent suit on a claim arising out of the same occurrence. D. loses by res judicata.
B. Permissive Counterclaims
1. Rule 13(b) allows counterclaims that are wholly unrelated to the subject matter of the P.'s claim to be included in the D.'s answer at the D.'s option.
a. the court may order a separate trial of any claim or counterclaim under Rule 42(b) to avoid prejudice or for convenience.
2. "Transaction or occurrence" is elusive, without much case law interpreting it.
C. Ques 30: There is an inconsistency between Rule 18(a) which allows P.'s to join claims at their option, and Rule 13(a) which requires D.s to provide all compulsory counterclaims in their answer.

** Williams v. Robinson, (1940)

2. Facts: Robinson's wife filed a suit for maintenance. In his answer, Robinson filed a counterclaim for divorce, alleging that his wife had committed adultery with Williams and joining Williams as a co-respondent for his divorce claim. Williams denied all of the alleged acts of adultery.

3. Procedural Posture: Williams brought this action for libel and slander for the alleged false and malicious charges of adultery that were raised by Robinson in his counterclaim for divorce. Robinson did not file an answer, but moved for dismissal on the grounds that Williams failed to assert his claim in his answer to the counterclaim in the divorce action under rule 13(a) which relates to compulsory counterclaims that arise out of the transaction or occurrence that was the subject matter of the defendant's counterclaim. The lower court granted the motion to dismiss.

4. Issue: Whether the slander and libel of which the P. complains arose out of the transaction or occurrence that was the subject matter of the defendant's counterclaim for divorce in the separate action.

5. Holding: No.

6. Majority Reasoning: The D.'s counterclaim charged the P. with specific acts of adultery. Thus, to arise out of the same transaction as the subject matter of the D.'s counterclaim, the libel must have arisen from the same facts that led to the counterclaim for divorce. A "transaction" is a completed action. Furthermore, an "occurrence" is a happening or event, and is more narrow than a transaction. Thus, both of the claims must have arisen from the same completed action, the same event. The test of whether the subject matter of opposing claims is the same is whether the same evidence will support or refute both claims. Since the divorce claim arises from an alleged fact of adultery, it cannot be joined with the libel claim, which arises from the fact of the presentation of the D.'s counterclaim. They are not supported or refuted by the same evidence. To allow the D.'s motion would be to require P. to admit that he committed adultery.

I. Responding to a counter-claim
A. P. required to respond under Rule 7(a) and 12(a) in much the same way as a D. is required to respond to the P.'s original claim.
1. Ques 33: P sues D on contract 1. D counterclaims on contract 2. P replies, denying breach of contract 2. The action is disposed of. Then P sues D for breach of contract 2 that occurred before P answered D's counterclaim in the original suit. D can successfully defend because D's breach of contract 2 would have been a compulsory counterclaim for P under Rule 13(a) since it occurred before his answer. If it would have occurred after his answer, P would not have lost it.
B. Recoveries on counter claims
1. normally the difference between the amount of the two judgments under Rule 13(c).
II. Amending the Pleadings (Rule 15)
A. Amendments before trial
1. Rule 15(a) allows a party to amend his pleading "once as a matter of course at any time before a responsive pleading is served."
a. An answer is a "responsive pleading", a motion is not. Thus, if D. moves under 12(b)(6), P. may still amend his claim as a matter of course.
b. an amendment a pleading to which no responsive pleading is permitted is not allowed.
2. After a responsive pleading is served, the party may amend:
a. With leave of the court; or
b. with the written consent of the adverse party.
B. Amendments after trial
1. There is no absolute limit when a pleading may be amended - even after trial.
2. Rule 15(b) (first two sentences) treat the pleadings as amended when the opposing side failed to object to trial evidence which is unambiguously beyond the pleadings.
3. Rule 15(b) (last two sentences) provide for the case where the opposing side has successfully objected to trial evidence as going beyond the pleadings.

** Blair v. Durham, (1943)

2. Facts: Durham was a stenographer working in an office building that was being remodeled by Blair. Durham was struck in the head by a piece of lumber that fell from a scaffolding about 10 feet above her head.

3. Procedural Posture: Durham filed an original complaint alleging that the D.'s agents had negligently handled the lumber, breaching a duty of care to her, resulting in her injury. A trial began, and a jury was impaneled, when Durham obtained leave from the court to amend her complaint to allege that the D.s had breached a duty of care to her by negligently constructing a scaffolding in an area that they knew was likely to cause injury to those working below, thus causing her injury. The jury was set aside, and a continuance granted. Upon retrial, the jury returned a $6,500 verdict in Durham's favor, and Blair appealed, claiming that the amendment created a second cause of action, which was barred by the one-year statute of limitations.

4. Issue: 1) Whether the amendment stated a new cause of action. 2) Whether the statute of limitations was tolled by the original complaint.

5. Holding: 1) No. "An amendment does not set up a new cause of action so long as the cause of action alleged grows out of the same transaction and is basically the same or is identical in the essential elements upon which the right to sue is based and upon which the defendant's duty to perform is alleged to have arisen." 2) Yes. Rule 15(c) provides that whenever the amended pleading arose out of the conduct, transaction or occurrence set forth or attempted to be set forth in the original pleadings, the amendment relates back to the date of the original pleading.

6. P.'s Argument: The statute of limitations was tolled by the original complaint under Rule 15(c) because the amendment did not state a new cause of action.

7. D. Argument: The statute of limitations ran before the amendment was entered because is stated a new cause of action.

8. Majority Reasoning: A cause of action is the violation of a single right by a single legal wrong. The right violated here was that the D. breached a duty of care to the P. to avoid striking her in the head with a piece of falling lumber. The many different grounds that the negligence was based upon all resulted in the same breach of duty - the same injury. The difference in the amendment was only in the mode in which the D. breached his duty and caused the injury. It is immaterial "whether [the injury] resulted from the negligence of the users of the scaffold or from its construction, since in either case it was a violation of the same obligation."

I. Discovery
A. Scope of discovery- Rule 26(b)(1) 1. The "parties may obtain discovery regarding any matter not privileged, which is relevant to the subject matter involved."
2. "It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence."
B. Devices of discovery - usually start and move along by party initiative, except for special situations, such as physical or mental examination which must be made by motion.
1. depositions upon oral examination - Rule 30
a. leave of the court is not needed except:
1) when the deponent is in prison
2) when the total number of depositions without leave exceeds 10
3) when that person has been previously deposed.
b. non-parties must be subpoenaed, but parties are required to show up simply by authority of the notice of deposition.
c. objections are noted, but the deponent still must answer, and the objection awaits trial.
1) objections can be raised for the first time at trial unless they could have been overcome at deposition - ex: leading question could have been rephrased.
2) deponent may not answer unless by court order if the answer is privileged or damaging such that exclusion at trial is not a cure.
2. depositions upon written questions - Rule 31
a. may be directed to non-parties, but probably does not allow questions which require application of law, only facts.
b. party is on his own when testifying under oath to the questions, but lawyer can have questions for 30 days prior to testifying.
3. interrogatories to parties - Rule 33
a. may not be used to question non-parties, but 33(c) requires answers to application of law to fact, perhaps delayed until later in discovery.
b. party can frame answers with help of lawyer.
4. production of documents and things - Rule 34
5. physical and mental examinations - Rule 35
a. only applies to parties, not third-party witnesses.
b. only made on motion, must be for "good cause," and the condition must be "in controversy."
c. a P. in a negligence action who asserts personal injury places that injury clearly in controversy and provides the D. with good cause.
6. requests for admission - Rule 36
a. failure to answer or object is admission.
b. can ask for the application of law to fact.
c. party can not fail to admit or deny based on lack of knowledge until after he makes a reasonable inquiry.
d. insufficient answers or ungrounded objections may result in admission. See Rule 37(c).

** Umphres v. Shell Oil Co., (1971)

2. Facts: Umphres brought an action against Shell Oil for anti-trust violations, alleging conspiracy. At the oral deposition of Umphres, the defense counsel asked Umphres questions about the alleged conspiracy, and if he had any information to support the claim that there was a conspiracy. The P.'s counsel instructed him not to answer. The defense counsel thought that conspiracy was a question of fact, and the P. counsel thought that the questions required conclusions of law.

3. Procedural Posture: The defendant brought a motion to compel the plaintiff to answer the questions regarding the conspiracy.

4. Issue: Whether a motion to compel and answer during discovery is premature until the party making such a request has first explored all reasonable avenues of agreement as to discovery problems by conference with the counsel for the opposing side.

5. Holding: Yes. [See Rule 37(a)]

6. Reasoning: The oral interrogatory might ask for conclusions of law from the P., but since he is not an experienced man in the field and subject matter, that he should not have to answer them. However, the D. is certainly entitled to interrogate P. about the facts upon which the claim of conspiracy was based. But, the D. counsel had not framed the questions correctly, and had resorted immediately to bringing an action to compel an answer instead of trying to work out the problems with the opposing counsel. So, the two lawyers were ordered to discuss the question in good faith and resolve what facts were to be deposed.

** Brandenberg v. El Al Israel Airlines, (1978)

2. Facts: Brandenberg was a 72 year old woman who flew abroad to visit her daughter and was carried by British Airways. Brandenberg apparently was very critical of her service during the flight.

3. Procedural Posture: P. brought a $900,000 negligence action against D., alleging physical stress and mental injuries, and that because she was old, the airline had a duty to treat her with particular care, and they had breached that duty, "abandoning her in her time of need." During discovery, P. was advised not to answer several questions that asked her the basis of her claim. D. moved under Rule 37(a) to compel answers.

4. Issue: Whether a P. may properly refuse to answer any question during deposition which ask for the basis of the P.'s claim.

5. Holding: No.

6. P.'s Argument: The questions call for a legal conclusion, and so she should not have to answer them since she is a layperson.

7. D. Argument: The questions are properly phrased to discover the basis for the P.'s claim.

8. Majority Reasoning: The D. is left in the dark by the pleadings and her refusal to answer these questions as to the factual basis of her claim of negligence. The D. is entitled to discover the facts underlying the claim, and so the P. must answer them.

** O'Brien v. Int'. Brotherhood of Elec. Workers, (1977)

2. Facts: O'Brien distributed certain information which was detrimental to the Union. The local 613 heard the case and fined O'Brien, but later rescinded the fine when they realized that the jurisdiction to fine under their constitution rested with the parent IBEW. The parent IBEW reheard the case and fined O'Brien.

3. Procedural Posture: O'Brien brought this action under 29 USC 411 that guaranteed his freedom of speech subject to interference with the union's obligations. In interrogatories, O'Brien asked several questions designed to discover the defendant's legal theory based on the facts elicited from the other interrogatories. D. generally objected to the interrogatories. P. moves to compel answers.

4. Issue: Whether an interrogatory which involves an application of law to fact is proper.

5. Holding: Yes. [See Rule 33(c)].

6. P.'s Argument: Several of the interrogatories were irrelevant. Others were outside of their knowledge. Others required conclusions of law.

7. Majority Reasoning: Rule 33(b) [Now (c)] makes it clear that such discovery is permissible if it requires the application of law to fact. Since the discovery is almost complete, there is no danger of tying the defendant to a legal theory before he has had an opportunity to fully explore the case. However, the interrogatory that asks to bounce the constitution against the statute to adequacy is purely a question of law which is not related to the facts, and so crosses the line of Rule 33(c) into impermissible discovery.

** Hickman v. Taylor, (1947)

2. Facts: A tug sank crossing the Delaware while towing a railroad car. Five of the crewmen died, and P. represents one of the crewmen suing the tugboat owner. A public hearing was held before the US Steamboat Inspectors to investigate the sinking, and the four surviving crew members were examined. The testimony from this hearing was made available to all parties. The tugboat owner hired a lawyer, Fortenbaugh to gather information with an eye towards litigation, and he privately interviewed the four survivors and took statements from them.

3. Procedural Posture: P. sent an interrogatories to parties to Fortenbaugh, which asked him to turn over true copies of the survivor's statements, and to describe any oral discussions with particularity. Other questions asked for the production of records, reports, statements, and other memoranda collected by Fortenbaugh concerning any factual matter surrounding the sinking. Fortenbaugh refused on the grounds that the information asked for was "privileged matter obtained in preparation for litigation" and would call for invasion and turning over of counsel's private thoughts. The District Court held that the matters were not privileged, and ordered their production. Upon Fortenbaugh's refusal, they were cited for contempt. The Court of Appeal reversed, holding that the information sought was "work product of the lawyer" and hence privileged. The Supreme Court granted cert.

4. Issue: Whether the desire to prepare for examination of witnesses is sufficient justification to compel discovery of oral and written statements of witnesses, or other information, secured by an adverse party's counsel in the course of preparation for litigation?

5. Holding: No. The party desiring discovery of the "work product" of a lawyer of materials generated in preparation for litigation must show that he has an adequate need for those materials and that he would be prejudiced without them.

6. P.'s Argument: The discovery rules are designed to enable parties to discover true facts and compel their disclosure, thus they should be read as broadly as possible. The attorney-client privilege is not involved here because these were statements from third-party fact witnesses. Thus, they should be discoverable under Rule 26. To hold otherwise would give a corporate D. a clear advantage in fact gathering, which facts they could subsequently hide as being undiscoverable.

7. D. Argument: These matters are "privileged" and an indirect attempt to obtain access to counsel's private files. This request would require turning over the very thoughts of the counsel.

8. Majority Reasoning: The Federal Rule on discovery serve 1) as a device to narrow and clarify the issues, and 2) a device for ascertaining the facts, or locating more information about where the facts may be relative to the issues. To this end, they are to be accorded broad and liberal treatment. Mutual knowledge of all the relevant facts gathered by both parties is essential to proper litigation. To that end, either party may compel the other to disgorge whatever facts are in his possession. The matter at issue here does not fall within the attorney-client privilege, however, there is no reason to believe that the facts required have not already been disclosed or are not available to the P. by other means, such as interviewing the witnesses himself. Rule 26 is not so broad as to compel discovery under these circumstances. Public policy in the orderly prosecution of legal claims requires that even the broadest reading of Rule 26 does not justify inquiry into the files and mental impressions of an attorney. To allow it would be to deter attorneys from writing down records, and cause them to engage in sharp practices to avoid disclosure. It is implicit in the structure of the rule that the burden of showing that an attorney's privacy should be violated is on the party seeking discovery. In this case, the need was insufficient to discover either the written or the oral statements. Furthermore, mistakes in testimony could arise if the attorney were required to recall from memory the oral statements. The P. has all of the needed tools to get the facts he needs through interrogatories and interviews.

I. Supplementation of Responses Rule 26(e)
A. Rule 26(e) imposes a general duty on a party to supplement incomplete
or incorrect responses based on the nature of the discovery tool:
1. 26(e)(1) applies to disclosures, requiring a party to supplement "at
appropriate intervals."
2. 26(e)(2) applies to interrogatories, requests for production, and
requests for admission, requiring a party to "seasonably amend."
B. The duty is avoided if the information has been otherwise made known
to the other party, or is disclosed in writing.
C. Does not apply to deposition testimony according to Legislative
II. Use of depositions in court proceedings - Rule 32
A. Generally depositions are inadmissible under the hearsay rule, except
in special cases delineated in Rule 32(a).
1. Impeachment of a witness.
2. Testimony on behalf of a non-natural person party.
3. dead, missing, ill, imprisoned, recalcitrant witness.
B. Objections are handled as if the person were present and testifying.

** Freed v. Erie Lackawana Ry., (1971)

2. Facts: Freed was the head brakeman on a train. Freed and his friend were walking through a right-of-way adjacent to a side track in a busy switching area when Freed was struck by the lead car in a train that was backing. A train yard rule provided that if the train was operating outside of the railyard, it was required to post a lookout on the lead car. If the train was operating inside the railyard, no lookout was required. There was no lookout on the train that hit Freed.

3. Procedural Posture: Freed brought an action for personal injuries against the train company. In one of Freed's interrogatories to the train company, he asked whether the train was being operated in the railyard at the time of the accident. The train company answered that it was not [thus there should have been a lookout]. At trial, the train company produced testimony that the train was actually operating within the yard limits [thus, there did not need to be a lookout], contradicting its interrogatory answer. The jury, during deliberation, asked the judge where the train was during the accident, and the judge refused to answer, stating that it was a question of fact for the jury to decide. The jury found for defendant.

4. Issue: "Whether an answer made by the defendant to an interrogatory is binding on it although contradicted by other evidence adduced by the defendant."

5. Holding: No.

6. P.'s Argument: The answer to the interrogatory, when introduced in evidence, was binding on the defendant, and therefore the court should have answered the jury's question with the answer given in the interrogatory.

7. Majority Reasoning: The court cited to Victoria Carriers, stating that the answer to an interrogatory is comparable to answers given in deposition or testimony, which may be mistaken themselves. Since they are usually supplied before the completion of discovery, they can frequently be based on imperfect information. Where there is conflict between the testimony and the interrogatory, it should be treated the same as all other testimony conflicts, and evaluated and resolved by the jury.

I. Pretrial Conference A. Begins with mandatory scheduling order of rule 16(b). B. Optional one or more pretrial conferences may follow. C. Primarily intended to promote broad scope case management by judges early on in the litigation, but individual judges have much discretion on how much management to give. D. The result of the pretrial conference is an order in accordance with rule 16(e), which stipulates the action taken, and in effect supersedes the pleadings, because it controls the action from there forward. No contrary evidence will be allowed after the order is granted, unless it would cause "manifest injustice."

** Identiseal Corp. v. Positive Ident. Systems, (1977)

2. Facts: Identiseal entered into a franchising contract with Positive ID Systems, based on Positive ID's representations that it was successful in promoting its products. After spending $15,000 on Positive ID's products, Identiseal determined that Positive ID had misrepresented its success.

3. Procedural Posture: P. sought relief under a common law theory of misrepresentation relating to franchising. Jurisdiction was based on diversity. At the pretrial conference, the judge concluded that "the pretrial work necessary to efficiently try this action" had not been done. It ordered that the action be dismissed for want of prosecution, but stayed the order for 3 months, giving the P. a chance to conduct specific discovery to revive the action. P. did not conduct the discovery because he felt that it would only help the D., and rather would wait until trial to develop the facts. The judge dismissed the action, and P. appeals.

4. Issue: Whether a trial judge has the authority under Rule 16 to dismiss an action for want of prosecution if one of the parties decides that it is in his best interest not to conduct pretrial discovery.

5. Holding: No.

6. P.'s Argument: The court had exceeded its authority under Rule 16 in ordering the P. to conduct discovery or suffer dismissal of the complaint.

7. Majority Reasoning: Discovery Rules 26-37, which cover discovery, do not give District Court judges the authority to compel a litigant to engage in discovery in the first place. Under Rule 16, the court has the authority to direct the parties' attorneys to appear for a pretrial conference to consider the possibility of conducting discovery that will avoid unnecessary proof. As stated in O'Malley, this gives the court wide discretion and power to advance the case. However, it does not give the court the power to compel discovery, even if it is clear that such discovery would advance the case. In Edwards, the court noted that a judge may not dismiss an action based on a party's refusal to follow the trial judges' wishes at the pretrial conference unless they could be characterized as a "failure to prosecute." In this case, the attorney simply disagreed with the court's wishes, but he was still willing to advance the case and go to trial. Furthermore, the decision is based on the traditional principle that the parties, rather than the court, should determine the litigation strategy, because it is the attorney who is responsible for representing his client's best interests.

** Shuber v. S.S. Kresge, (1972); pg, 96,

2. Facts: Wife-P. was injured when a light fixture fell from the ceiling of D.'s store, in which wife-P. worked.

3. Procedural Posture: Wife-P. brought a negligence action for personal injuries, and husband-P. joined a claim for medical expenses and loss of services. At the pretrial conference, the P.'s attorney submitted a narrative describing the facts and his theory of liability, that D. store had negligently installed the light fixture. The narrative stated that "plaintiff" would testify, but gave no indication that the husband- P. would testify. [Apparently a pretrial order was issued on this narrative.] At trial, evidence arose that the light was installed by a subcontractor of the D.'s landlord, thus establishing no causal link to D.. After D. moved for a directed verdict on the close of P.'s case, P. moved for leave to reopen and call the husband-P. to testify that D. itself had installed the ceiling tiles, thus changing both the facts and the legal theory. The trial judge denied the motion to reopen and granted the directed verdict.

4. Issue: Whether a pretrial order binds the parties to what facts and theories they have presented at the pretrial conference.

5. Holding: Yes.

6. Reasoning: The court has an interest in preserving the efficiency of actions. If the pretrial order were not to bind the parties, except in special circumstances, to avoid manifest injustice, then it would serve no purpose at all. Liberal modification of pretrial orders encourages careless preparation, which is contrary to the spirit of Rule 16.

I. Motion for judgment on the pleadings (Rule 12(c))
A. Made after the pleadings are closed (summary judgment 12(b)(6) can come before the pleadings are closed, but they can still be amended.)
1. Asserts that the moving party is entitled to judgment on a particular claim.
2. Can only be used to resolve questions of law, not fact.
a. Ex: if the answer admits the allegations of the complaint, but sets up two affirmative defenses, the motion will be granted only if both defenses are legally insufficient (if only one is bad, strike it with a 12(f) motion.)
b. Counter-ex: motion will not be granted if the answer contains a denial because that affects a matter of fact.
3. Motion by the D. takes on no added strength by virtue of affirmative defenses in his answer because they are taken as denied anyway under rule 8(d).

II. Motion for Summary Judgment (Rule 56)

A. Provides a means for going behind the pleadings to see whether there really is a genuine issue as to any material fact. 1. Can overcome frivolous or harassing denials or counterclaims in this way, because even though a motion for judgment on the pleadings may not be possible because of a frivolous denial, the motion for summary judgment is still available.

B. Can be filed by either party in any type of case, even before the pleadings are closed.

C. Ordinarily accompanied by affidavits in support of the contention that there really is no genuine issue of fact. 1. The opponent may enter counter-affidavits, but may not simply rest on the denials in his pleadings.

D. Granted only if a reasonable trier of fact could not find for the opponent on the matter. 1. Ex: statute of limitations has run - no reasonable trier of fact could find that it has not.

E. Not used to actually resolve a genuine factual dispute that is found to exist, only to identify whether there are any.

F. May be partial in nature, narrowing the scope of the dispute for trial.

** American Airlines v. Ulen, (1949)

2. Facts: Ulen boarded an airliner belonging to American Airlines to fly to Mexico City. However, the plane crashed into the top of a mountain, injuring her severely. Evidence showed the flight plan called for the plane to fly at 4,000 ft over the mountains, coming within 2 miles of the mountain that the flight crashed into, which had an elevation of 4,080 feet. There was a regulation that stated that the plane must fly 1,000 ft above the highest elevation that would be within 5 miles of the flight path.

3. Procedural Posture: Ulen and her husband filed actions for personal injury, medical expenses, and loss of services, seeking about $300K in damages. The Ulens served a set of 55 interrogatories on the Airline, and the answers indicated that the Airline was negligent. The Ulens then filed motions for summary judgment based on the pleadings and the interrogatory answers, and to impanel a jury to determine damages. In response, the Airline moved to amend its answer to add the additional defense that the damages were limited by the Warsaw Convention to $8,291.87. The motions for summary judgment were granted, jury verdicts for damages were entered, and the Airline appealed.

4. Issue: Whether summary judgment is proper when the pleadings raised genuine issues of material facts, but when the judge has evidence that a reasonable jury could not find otherwise.

5. Holding: Yes.

6. P.'s Argument: Appellees were not entitled to summary judgment because the pleadings, that is the complaint and the answer denying the allegations, raised genuine issues of material fact that could only be determined by a trial on the merits. Furthermore, any liability is limited by the Warsaw Convention, because the airline did not have malicious intent when it crashed, based on a proper interpretation of the Warsaw Convention treaty.

7. Majority Reasoning: Although the pleadings viewed alone presented a dispute of material facts on their face, the judge had the answers to the interrogatories answered by the Airline, the motion for summary judgment, and the brief in opposition to the motion for summary judgment before him when he made the decision. The facts presented conclusively showed that the Airline planned to, and did, violate the altitude safety regulation. Thus, duty, breach, and proximate cause had been established. The only issue left was damages. The Warsaw Convention provided for limitation of damages only where the Airline was not guilty of "willful misconduct." The facts here amounted to willful misconduct. The proper interpretation of the treaty was that it did not excuse "willful misconduct." There was no evidence to support that any higher standard must be met.

I. Provisional Remedies - Seizure of Property (Rule 64) Preliminary Injunctions & Temporary Restraining Orders (Rule 65)

A. Seizure of Property - Obtained to prevent irreparable harm to the P. in advance of trial, or the possibility that he won't collect after a successful trial.
1. Attachment - seizure of D.'s property to give P. security that the judgment he hopes to obtain will be collectible.
2. Garnishment - property held by a third person, but belonging to the D. is made subject to the P.'s claim.
a. ex: D.'s bank deposit or, to a limited extent, wages.
b. requires proper service on the third party.
c. third party who violates the garnishment order can be forced to pay out of his own pocket.

B. Injunction - directs D. to do or refrain from doing specific acts.
1. Rule 65(a)(1) requires that no preliminary injunction will be given without notice.
2. Rule 65(b) provides for temporary restraining orders when the harm feared by P. may be done before the court can hear and decide the case.
a. May be done without notice only upon a sufficient showing of need and inability to serve notice in time.
b. Expires nlt 10 days without good cause or permission of D..
c. Must be followed immediately by an application for a preliminary injunction.
d. D. may move for dissolution of the TRO upon 2 days notice to P..
3. Rule 65(c) Both TRO's and preliminary injunctions require the P. to deposit a security bond for damages to the D. in case P. is wrong.
4. Rule 65(d) the order granting a TRO or preliminary injunction shall be binding only upon the parties to the action and their agents, or parties in concert with actual notice of the order.

** American Hospital Supply Corp. v. Hospital Products, Ltd., (1986)

2. Facts: Hospital Products makes a piece of surgical equipment and sells it through American Hospital Supply. HP and AHS signed a 3 year exclusive distribution contract which provided for automatic renewal each year for ten years unless AHS notified HP of its intent to terminate at least 90 days prior to the end of each year. AHS did not give notification, and in fact gave indication that they intended to renew, but on the first day of the following year, HP terminated the contract and told all of AHS's customers that they were no longer an authorized HP dealer.

3. Procedural Posture: AHS brought a diversity action for breach of contract, and moved for a preliminary injunction, requiring HP to notify all of AHS's customers that it was still an authorized supplier, and to continue to comply with the terms of the contract. The injunction was granted after an evidentiary hearing. Shortly thereafter, HP filed for Chapter 11 bankruptcy reorganization. HP brought this appeal.

4. Issue: What is the proper standard for granting a preliminary injunction?

5. Holding: The proper standard is to grant the preliminary injunction only if P x HP > (1-P) x HD, or in other words, only if the harm to the plaintiff of denying the injunction outweighs the harm to the defendant of mistakenly granting the injunction.

6. Majority Reasoning: The district judge, when granting an injunction, is to choose the course of action that will minimize the cost of being mistaken. To assist him in this determination, Hand's probability x harm formula of Carroll Towing can be modified to fit this situation. The equation is a distillation of the four factor test that has been commonly used to date. Since the premise of an injunction is that the remedy available at the end of the trial will not make the plaintiff whole, the plaintiff's harm must be fairly great to grant an injunction, all other things being equal. It is for the granting judge to determine this balance, based on the limited evidence he is given, and based on his "feel" of the case. The appellate court will not overrule his decision unless it is found to be an "abuse of discretion." Based on the evidence here, the judge set forth as adequate a reasoning under Rule 65(d) as can be expected under the circumstances, and the evidence supports the injunction. Namely, the harm to the defendant caused by his bankruptcy was partially offset by the $5 million bond that the P. posted under Rule 65(c), and that it appears that the D. breached, there being no evidence of anticipatory repudiation by P..

7. Dissent Reasoning: The dissent felt that there was insufficient evidence showing a likelihood of success on the merits, and that the balance of harm weighed against P.. Furthermore, he felt that the mathematical formula provided by the majority was too rigid and would reduce the discretionary decision of whether to grant an injunction to a "quantitative straitjacket." The four-factor test was adequate and proven and lent itself better to the unquantifiable "feel" of the case than the mathematical formula.

** Colgrove v. Batten, (1973)

2. Facts: A civil action was brought in Montana, which has a local rue 13(d)(1) which provides that a jury for the trial of civil cases shall consist of six persons plus such alternate jurors as may be impaneled. The trial judge set the diversity case for trial before a jury of six.

3. Procedural Posture: The petitioner sought mandamus from the Court of Appeals for the Ninth circuit to direct the trial judge to impanel a 12- member jury. The Court of Appeals found no merit in the contentions and sustained the validity of the local rule, and denied the writ of mandamus. The Supreme Court granted cert.

4. Issue: Whether a panel of six members satisfies the seventh amendment guarantee that "in suits at common law...the right of trial by jury shall be preserved."

5. Holding: Yes.

6. P.'s Argument: The local rule 1) violated the seventh amendment because at the time of the framing of the constitution, juries at common law were traditionally 12 members in most civil courts, 2) violated 28 U.S.C. 2072 [Rules enabling Act] which provided [until 1988] that the federal rules of procedure "shall preserve the right to trial by jury at common law and as declared by the Seventh Amendment", and 3) was rendered invalid by Fed. Rule 83 because it was "inconsistent with" Rule 48 which provided for juries of less than 12 when stipulated by the parties.

7. Majority Reasoning: In Williams v. Florida, the court sustained the constitutionality of a Florida statute providing for six-member juries in certain criminal cases. The same reasoning applies here. The language of the Seventh Amendment only guarantees that a the right to the jury shall be preserved, as a substantive right, and not that the characteristics of the jury, such as size, shall be preserved as a procedural right. Thus, the federal courts had the power to vary the characteristics of the jury to adapt it to efficient use in modern cases. So the real question was whether the jury of 12 is a substantive right meant to be protected by the constitution. Based on empirical studies presented in the Williams case, the court concluded that the size of the jury was not a function of its size, so the 12 member jury was not a substantive right. What is required for a "jury" is a number large enough to facilitate group deliberation combined with a likelihood of obtaining a representative cross-section of the community. Six is large enough to meet that requirement, but the court expressed no opinion on whether less would be adequate.

8. Dissent Reasoning: The dissent was concerned that the federal rules as to trial by jury were gradually eroding any guarantee of the Seventh Amendment. The framers only knew of juries of 12 when they passed the amendment, so a jury of six would be a completely different entity, foreign to them. The majority provided no test or means to determine at what point a jury is considered to be too small. Thus, there was no reason to draw the arbitrary line at six, but there was reason to draw it a 12 since the framer's experience was that 12 members was the right number.

** Handel v. New York Rapid Transit Corp., (1938)

2. Facts: A police officer was dragged by an elevated train for several blocks before the train stopped and he fell to the tracks. Two separate witnesses arrived within a few minutes and found the officer moaning on the tracks. They would have testified that they heard him say "Help me. Save me - why did that conductor close the door on me." A medical examination showed that the officer had several serious injuries, and he died later in the day.

3. Procedural Posture: The police officer's surviving relative brought an action for negligence against the train company. The trial court refused to allow the witnesses testimony on the grounds that it was incompetent as evidence as being hearsay. There being no other evidence of negligence, the complaint was dismissed. The plaintiff appealed.

4. Issue: Whether the statements of the injured police officer are properly excludable as hearsay.

5. Holding: Yes.

6. Majority Reasoning: The statements were not admissible as part of the res gestae because they were a narrative of a past event, and thus within the hearsay rule.

7. Dissent Reasoning: The real issue was whether the statement fell within the "spontaneous exclamation" exception to the hearsay rule. Thus, two questions must be answered 1) whether the declaration was "spontaneously expressive of the injured person's observation" of the occurrence, and 2) whether the utterance was made "within such limit of time as presumably to preclude fabrication." The nature of the officer's statement was spontaneous because it was not in response to a question, and it was posed as a rhetorical question itself. Also, the time that had elapsed between the accident and the arrival of the witnesses was not sufficient for a man in such shock and pain to fabricate an explanation to implicate the railroad company.

I. Submission to the Jury and Return of Verdict (Rules 49, 51, 52)

A. Jury instructions - Rule 51
1. May come before or after closing arguments, or both, at the discretion of the judge.
2. Allows more flexibility to judge to manage the trial.
3. Party must object to the instruction before the jury retires to deliberate, but does not have to propose the instruction in order to object to the lack of giving of an instruction.

B. Special verdicts and interrogatories - Rule 49
1. Can be a special verdict - 49(a)
a. "special written finding upon each issue of fact."
b. parties waive consideration of an issue if it is omitted by the court and the jury has retired.
2. Can be a general verdict with interrogatories - 49(b)
a. "written interrogatories upon one or more issues of fact the decision of which is necessary to a verdict."
C. Findings by the Court -Rule 52
1. in a non-jury trial, "the court shall find the facts specially and state separately its conclusions of law thereon."

II. Motions after Verdict - Rules 50, 59

A. Motion for judgment n.o.v.
1. Rule 50(b) allows a motion for directed verdict at the end of trial which is deferred or denied to be renewed as a motion for judgment n.o.v. after an adverse jury finding.
a. must be made within 10 days ("ten day motion")
b. standard is same as motion for directed verdict, i.e. reasonable jury.
c. judge may deny the motion at the end of evidence:
1) to prevent reversal causing a new trial.
2) jury may find for mover anyway, making it moot.
d. if judge is reversed on judgment n.o.v., there is no new trial, only reinstatement of jury verdict.

B. Motion for a new trial - Rule 59
1. Motion must be made within 10 days, ("ten day motion") or the court itself can order a new trial on its own initiative after giving the parties a chance to be heard.
a. judge may reconside
r his actions and thought he made a prejudicial error. 2. One standard is that judgment is against the "weight of evidence".
a. Differs from judgment n.o.v.:
1). by definition results in a new trial,
2). standard is different than reasonable jury.
3. Another standard is failure to follow jury instructions.
4. Also, newly discovered evidence (civil trial only).
5. Only available for non-harmless errors, meaning ones that affect the substantial rights of the parties - Rule 61.
6. Usually joined with a motion n.o.v. under Rule 50(b).
a. if the judgment n.o.v. is granted, the judge may also conditionally grant the rule 59 motion for a new trial, subject to the judgment n.o.v. being reversed on appeal.

III. Judgment

A. Demand for judgment - Rule 54(c)
1. in case of default, the judgment shall not be different in kind, or exceed the amount asked for.
2. every judgment shall grant relief that the party is "entitled" to, regardless of what they ask for, and even if they don't ask.

B. Costs
1. Other than attorneys fees - Rule 54(d)(1)
a. granted as a matter of course.
b. "taxed" (tallied) by the clerk under 28 USC 1920
c. may be reviewed or denied by judge by motion made within 5 days.
2. Attorney's fees - Rule 54(d)(2)
a. motion must be made within 14 days to ensure notice to the adverse party before the time for appeal has expired.
b. does not require an exact accounting of the fees, but only a "fair estimate".
c. court may require the moving party to disclose any fee arrangements that have been made between the parties.
d. the court may grant or deny the motion with or without allowing the adverse party time to prepare an opposing motion or to conduct additional discovery as to fees.
e. fee awards are made as a separate judgment under Rule 58.
f. local rules may be promulgated for the efficient resolution of fee disputes.

C. Declaratory Relief - Rule 57
1. Under 28 USC 2201, "any court of the United States upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought."
2. Under 28 USC 2202, further relief may be granted against the adverse party whose rights have been determined by a delcaratory judgment, after reasonable notice and hearing.
3. The existence of another adequate remedy does not preclude a declaratory judgment.

** American Mach. & Metals, Inc. v. De Bothezat Impeller Co., (1948)

2. Facts: P. entered into a contract with D. to manufacture fans under D.'s patents and name. For the term of the contract, (which was indefinite), the P. was to pay royalties based on "net sales." P. had the right to terminate the contract at any time with six months notice, however it had not exercised this right yet. The D. threatened that if the P. terminated the contract, and continued in the same line of business, that it would sue.

3. Procedural Posture: The P. borught an action under federal statute for declatory judgment of its post contractual rights, should it decide to terminate the contract. The District Court granted the D.'s 12(b) motion to dismiss on the grounds that the P. 1) failed to state a claim upon which relief can be granted, and 2) that the court lacked jurisdiction because there was no "actual controversy" as required by statute, given that the P. had not yet exercised his contractual right to terminate, and may never do so, which would make the point moot.

4. Issue: Whether there may be an "actual controversy" deserving of declaratory judgment based on contingent post-contractual rights, the contingency being in control of the P., namely whether the P. himself will terminate the contract.

5. Holding: Yes.

6. Majority Reasoning: The difference between an abstract question and an actual controversy is a question of degree. Where there is an actual controversy over contingent rights, a delcaratory judgment may nevertheless be granted, in order to serve as a practical guide for the future conduct of the parties. Prior case law had granted declaratory judgment where the contingency was in the power of the D., but there seemed to be no material reason to distinguish the case where the contingency is in the power of the P.. If the claim were dismissed, the P. would have to "act on his own view of his rights" and risk an otherwise profitable business in order to present an "actual" controversy. This is exactly the kind of risk that the statute was enacted to prevent.

** Int'l. Longshoremen's Local 37 v. Boyd, (1954)

2. Facts: Every summer, aliens residing in the northwest go to Alaska to work in the herring canneries. In 1952, before the 1953 season, a new federal statute was passed which the INS at Seattle intended to construe as enabling them to treat these aliens as coming to the country for the first time. This construction would result in the risk of some being denied re-entry.

3. Procedural Posture: The Union brought this action to declare the rights of the aliens to reenter, and forbid the INS from interpreting the statute in a way that would allow their possible exclusion. The District Court entertained the suti, but dismissed it on the merits.

4. Issue: Whether a declaratory judgment may properly be made in a case that asks for determination of the scope and constitutionality of legislation in advance of its immediate adverse effect in the context of a concrete factual case.

5. Holding: No.

6. P.'s Argument: The law would deny the returning aliens their contract and property rights. There was an actual controversy because the INS has already stated its intent to interpret the language as such, and the Union has already stated its intent that it should not be interpreted as such.

7. D. Argument: The District Court should have dismissed the case for want of an "actual controversy" because the aliens had not yet even gone, much less returned, and it was hypothetical that they ever would do so.

8. Majority Reasoning: The Union asked the court to declare the scope of a statute whose sanctions had not been set in motion against individuals on whose behalf relief was sought, because an occasion had not yet arisen. It is only hypothetical that such a contingency would arise. Thus, without concrete facts, it involves too remote or abstract an inquiry for the proper exercise of judicial function.

9. Dissent Reasoning: This case is more than abstract hypothetical. The INS has taken one side and the Union another in a case that would involve irreparable harm to the aliens if not decided properly. In fact, the INS has delivered on their promise to exclude the aliens, so it is not too remote a case.

I. Enforcement of Judgment - Rule 69 A. First step is for P. to identify and discover the D.'s assets.

B. Then P. seeks a writ of execution from the federal court, addressed to a federal marshal.
1. marshal seizes so much of the D.'s non-exempt property as to satisfy the judgment.
2. if D. does not pay, marshal sells the property, pays the judgment, subtracts his own costs, and refunds the difference to D.

C. Local state rules are generally conformed to.
1. some states mandate that the D. attend a post-judgment hearing to determine his assets, and order him to turn over his assets to pay the judgment.
2. if D. does not pay, he may be imprisoned for contempt, not for indebtedness, but for failure to comply with the order since he was able.

I. Appellate Review
A. Appeal to the Court of Appeals - Rule 62
1. 28 USC 1291 gives a party the right to appeal erroneous "final decisions" of a district court.
a. Russel v. Barnes Foundation held that a defendant may not appeal a Rule 56 summary judgment as to liability before the assessment of damages, because it is not a "final adjudication of the controversy between them."
b. however, it follows that a plaintiff would be entitled to appeal a summary judgment against him as to D.'s liability.
c. with multiple parties, a court may enter a final judgment as to part of case, if it makes "an express determination that there is no just reason for delay." - Rule 54(b).
2. 28 USC 1292(a)(1) also gives a right of appeal from "interlocutory" judgments that grant, refuse, modify, or otherwise affect injunctions. a. uncommonly used, 1292(b) allows appeal of interlocutory orders (other than injunctions) when they involve "controlling questions of law" to which there is "substantial ground for difference of opinion" and that immediate appeal "may materially advance the ultimate termination of the litigation."

B. Stay of proceedings to enforce a judgment.

I. Jursidiction and Venue with multiple parties/multiple claims A. 1332 requires complete diversity - no two opposing parties can be of the same state. But 1332 does not appear to provide diversity jurisdiction in some cases involving foreign litigants.
1. Ex: NY and Ohio sue Michigan - YES under 1332(a)(1) ("between citizens of different states")
2. Ex: NY and Ohio sue France - NO under 1332(a) because 1332(a)(2) says "citizens of a State [singular] and citizens or subjects of a foreign state."
3. Ex: NY and France sue Ohio - YES under 1332(a)(3) (between citizens of different states and in which citizens of a foreign state are additional parties.)
4. Ex: NY and France sue Ohio and France - YES also under 1332(a)(3) - "additional parties" does not preclude foreign citizens from being P..
5. Ex: NY and France sue France - NO falls between 1332(a)(2) (which would allow it if France were not also on P. side) and 1332(a)(3) (which would allow it if there were also a citizen of a different state on D. side).

B. But the court has the power to realign the parties according to their ultimate interests (unscramble them) to defeat or create diversity jurisdiction (similar to federal question jurisdiction).

C. 1441 on removal states that "the defendant or defendants" may remove the case.
1. Ex: CA sues CT Person and CT Corp. in CA state court, CT Person happy with CA state court; CT Corp. can NOT remove under 1441(A) because "the defendants" (implying all) must remove.
2. Ex: CA sues CA person and CT Corp. in CA state court; both D.'s can NOT remove together under 1441(a) because 1441(b) prevents and in- state D. from removing, and 1441(a) doesn't allow split removal.

D. 1391 on venue requires that "all defendants" must reside in the same state to bring the action in the D.'s home district.
1. Ex: MN sues VT and NH for a claim arising in MN. Must sue where claim arose under 1391(a)(2) because D.'s don't reside in same state.
2. Ex: MN sues West NY and So. NY for claim arising in MN. Can sue in either district or MN under 1392(a)(1) or (2) because D.'s reside in same state (although different districts).
3. Ex: West NY and So. NY sue VT and NH for claim arising in MN. Must sue where claim arose under 1391(a)(2) because D.'s don't reside in same state.
4. Ex: West NY and So. NY sue VT and NH for claim arising in Quebec. Can only sue where there is personal jurisdiction over "the defendants" (implying both) under 1391(a)(3) because there is no judicial district where the claim arose (a)(2), and D.'s aren't from same state (a)(2).

** Erie Railroad v. Tomkins, (1938)

2. Facts: Tomkins, a PA citizen, was injured while walking on an established footpath that runs along railroad tracks. The train that passed had a door open, which hit Tomkins and injured him. The railroad is a NY company.

3. Procedural Posture: Tomkins brought an action in the federal court for So. NY, based on diversity jurisdiction. The trial judge held that state law was inapplicable in this case under the Swift v. Tyson doctrine. The case was tried by a jury, which found that the railroad breached a duty to persons walking alongside the railroad tracks on an established footpath, and awarded Tomkins $30K. The railroad appealed. The court of appeals affirmed, and the Supreme Court granted cert.

4. Issue: Whether 34 (now 1652) applies to all state laws not in conflict with federal law or the constitution. In other words, whether the Swift doctrine which held that the federal courts had the power to come to an independent conclusion as to "general law" announced by the state courts and not codified by state statute should be overruled.

5. Holding: Yes. "Except in matters governed by the Federal Constitution or by acts of Congress, the law to be applied in any case is the law of the state. And whether the law of the state shall be declared by its Legislature in a statute or by its highest court in a decision is not a matter of federal concern."

6. D. Argument: 34 of the Judiciary Act requires the application of PA law in this case. The PA law treats Tomkins as a trespasser, and thus the railroad has no duty to him.

7. P.'s Argument: Since there is not a statute on the subject, under Swift, the railroad's duty is to be determined independently by the federal court. Also, the PA law does not treat Tomkins as a trespasser.

8. Majority Reasoning: There was much criticism of the Swift doctrine. It appeared that the courts had assumed the power to declare law that would apply to the states even though the constitution reserved much of that power to the states. This led to persons purposefully becoming residents of other states just to establish diversity jurisdiction and get a more favorable substantive law applied. This was particularly true in Black & White Taxicab where one cab company overcame a local law prohibiting anti-competion contracts by simply re-incorporating in another state and executing the contract there. This led to discrimination against citizens of a state by non-citizens who could choose the substantive law to be applied, thus preventing equal protection based on who brought the action. Also, the determination of what was "general law," and thus what could be independently decided, was broadening in practice to apply to too many things. The doctrine is unconstitutional because the federal courts have not been constitutionally granted the power to declare substantive rules of common law to be applied in a state. The authority of the state to say what its common law is has been guaranteed by the 10th amendment. Thus, 34 is not declared unconstitutional, but it is interpreted as applying to all state laws.

9. Concurrence Reasoning: [Reed] felt that the majority reasoning was correct except insofar as it relied upon the "unconsitutionality" argument. All that was necessary was to say the the Swift construction of the 34 was erroneous and reinterpret the words "the laws" to include the decisions of local state courts. There is confusion as to whether the majority opinion would preclude the power of Congress to determine procedural rules as well as substantive general law rules.

I. Burden of Proof in Diversity Actions
A. In Cities Service Oil Co. v. Dunlap, the Supreme Court held that state law controls the burden of proof as to whether a party was a bona fide purchaser because it "relates to a substantial right upon which the [party] may confidently rely."
B. In Palmer v. Hoffman, the court stated that the burden of proof of establishing contributory negligence is a question of local law which federal courts in diversity cases must apply, regardless of the rule 8(c) requirement that it be raised as an affirmative defense because 8(c) only applies to pleadings.

** Klaxon Co. v. Stentor Elec. Mfg. Co., (1941)

2. Procedural Posture: P. brought a breach of contract action based on diversity of citizenship in the Federal District Court in Delaware, and obtained a verdict of $100K. The District Court applied the state law of New York, the place that the contract was to be performed, to add pre- judgment interest to the verdict. The court of appeals affirmed, stating that the choice of law decision in a conflict of laws case should be decided by the federal court based on the type of case, and that in contracts cases, that is the state of performance.

3. Issue: Whether in diversity cases the federal courts must follow conflict of laws rules prevailing in the state in which they sit.

4. Holding: Yes.

5. Reasoning: The prohibition in Erie against federal courts doing independent determination of substantive general law extends to the field of conflict of laws. The conflict of law rules must conform to those prevailing in the state in which the federal court sits. Otherwise, the accident of diversity would disturb the equal protection clause between state courts and federal courts that sit across the street from each other. This is necessary for uniformity within states. Uniformity between states is not necessary due to our federal structure.

** Guarantee Trust Co. v. York, (1945)

2. Facts: Breach of trust by Guarantee.

3. Procedural Posture: P. brought action in federal court based on diversity of citizenship only. D. moved for summary judgment on the grounds that the state statute of limitations had run. District court granted summary judgment. Court of Appeals reversed holding that the statute of limitations did not apply in this federal court case in the presence of a federal tolling doctrine.

4. Issue: Under what circumstances are the federal courts bound by state law in a diversity action?

5. Holding: Where it would "significantly affect the result" of a litigation for a federal court to disregard a state law that would be controlling in the state court.

6. Majority Reasoning: Erie did not merely overrule Swift with regard to "substantive" state law. It overruled the judicial process of federal courts disregarding state law where it would lead to different results in the state vs. federal court in a diversity action. In these cases, the federal court is acting as just another state court. Thus, it cannot afford recovery for a state-given right if the state itself would not afford recovery. The difference between "substance" and "procedure" is not the dividing line for when to apply state law. Rather, the question is whether the state law merely concerns "the manner and the means by which a right to recover is enforced" or whether it would "substantially affect the result." Here, the state bars the action. Thus, the federal court should bar the action for the same reason.

7. Dissent Reasoning: The dissent noted that the state of the forum may have different laws for disregarding the statute of limitations of the other state. Thus, whether or not the action will be held to be barred depends on the law of the forum, not the law of the state of the incident.

8. Notes: In Ragan v. Merchants Transfer, the diversity P. filed the complaint with the court a month before the state statute of limitations expired, but did not serve the summons until 2 months after the statute of limitations had expired. Federal Rule 3 states that the action is commenced upon filing of the complaint with the court, however the state law states that the action is commenced upon service of the summons. Under Guarantee Trust, the Supr. Ct. held that state law applied to bar the action. In Woods v. Interstate Realty, P. was a corporation in a diversity action. State law required corporations to file a power of attorney for service prior to bringing an action. P. failed to do so. Again, the Supr. Ct. held that state law applied to grant summary judgment for D.. In Cohen, the P. was a shareholder and state law entitled the D. corporation to require the P. to post bond in order to sue. Again, the Supr. Ct. followed state law.

** Bernhardt v. Polygraphic Co. of Am., (1956)

2. Facts: A contract clause between P. and D. called for arbitration of disputes. The contract was executed in New York and was to be performed in Vermont.

3. Procedural Posture: The P. brought an action for wrongful discharge in the VT state court. The D. removed to the federal court based on diversity. The D. applied for a stay pending arbitration. The district court denied the stay under Vermont law because arbitration agreements were not enforceable under a 1910 VT law. The court of appeals reversed, holding that the arbitration matter was not "substantive" under Erie.

4. Issue: Whether a state judicial precedent that would substantially affect the outcome of a case appears to be old on its face and is contrary to recent legal developments in other states should be applied in a federal court in a diversity action in that same state if there is no apparent movement in the state, either judicially or legislatively, to change the law.

5. Holding: Yes.

6. Majority Reasoning: If the federal court allows arbitration where the state court would disallow it, the outcome of the litigation might depend on the courthouse where the suit was brought. Although this precedent is old, three is no action in the VT courts or legislature to change it. The court then ducked the issue and remanded the case (under Klaxon) to the district court to determine whether the state of VT would apply VT law or New York law as a matter of conflict of laws.

7. Concurrence Reasoning: In light of all that has happened since this precendent was issued, there is no reason to assume that the Court of Appeals could not have found that the state court would have changed the law. Thus it should have been remanded to the Court of Appeals.

8. Notes: In Factors Etc., Inc. v. Pro Arts, Inc., the Second Circuit had issued an opinion that, in the absence of controlling Tenn. law, the court would follow the decision of the federal court sitting in Tenn. (the 6th Cir.), holding that there is no descendible right of publicity in Tenn. However, before the judgment was entered, a Tenn. state court held that the right did exist. However, before rehearing, a differnt Tenn. state court held that the right did not exist. Thus, the court found that there was not enough basis to reverse itself. The cutoff for consideration of state law changes is up until judgment is entered, but after judgment, change in state law alone is not enough to get relief from judgment.

I. State Determination of State Law
A. Abstention - the federal court, in deference to state interests, declines to exercise federal jurisdiction.
1. appropriate where there are difficult questions of state law with important precedential value.
B. Certification - the state law question is certified by the federal court of appeals to the local state court for determination.
1. causes some delay and increased expense for the parties
2. imposes a burden on the state court
3. poses a possible threat to federal judical independence and authority.

** Byrd v. Blue Ridge Rural Elec. Coop., (1958)

2. Facts: Byrd was injured while performing construction work as a contractor of the D..

3. Procedural Posture: P. brought a negligence action. D. raised the defense of immunity under workmen's compensation because the work done by P. was of the kind done by his own employees, thus making the P. a statutory employee and not just a contractor. In South Carolina, the judge was the decider of whether a contractor was an employee. In the federal courts, the jury was the normal trier of fact in such a case.

4. Issue: Whether the general federal policy favoring jury decisions of disputed facts should yield to the state rule of judge determination in this type of case in the interest of promoting uniformity between the state and federal court sitting in the same location.

5. Holding: No.

6. Majority Reasoning: Erie held that the federal courts must generally give deference to state law in diversity cases involving state-created rights. However, in this instance, the judge only sits as the trier of fact of the employee determination issue because the statutory scheme in the state makes it customary and convenient to do so. There is no reason to believe that the rule was an integral part of the special relationship created by the statute. It appears to be merely a "form and mode of enforcing" the immunity. Although there might be an interest in preventing a different "outcome" in the federal vs. state court on the same litigation, there are also competing federal interests here. Particularly, the federal system has an interest in remaining independent from the state courts. State law can not alter the essential character or function of a federal court because that function is not in any sense a local matter. State statutes that would interfere with the performance of the federal judicial function are not binding under the Rules of Decision act. Also, there is not the certainty here, as there was in Guarantee that a different outcome would result.

** Hanna v. Plumer, (1965)

2. Facts: Hanna is a citizen of Ohio. Plumer is the executor of a citizen of Massachusetts. A car accident between Hanna and Plumer's decedent occurred in South Carolina.

3. Procedural Posture: Hanna filed suit in the District Court of Mass on Feb. 6th. Service was filed in accordance with Rule 4(d)(1) [now 4(e)(2)], by leaving a copy of the summons and complaint at the executor's residence with his wife. The executor's answer alleged that the action could not be maintained because he was not been served "by delivery in hand" as required by a Mass. statute concerning service of executors. The District court granted summary judgment, and the Court of Appeals affirmed, relying on Ragan and York opinions which required the use of state law in matters of "substance" and when the choice of law would be outcome determinative.

4. Issue: Whether Rule 4(d)(1) is applicable rather than the local Mass. rule.

5. Holding: Yes.

6. P.'s Reasoning: Rule 4(d)(1) clearly defines the manner in which service may be made in diversity actions.

7. D. Reasoning: Erie doctrine, as defined in York demands that federal courts apply state law whenever application of federal law in its stead will alter the outcome of the case. In this case, use of Mass. law would immediately result in victory for the D.. If 4(d)(1) were instead applied, the litigation would continue, resulting in a possible victory for P.. Thus, Erie demands that Mass. law be applied.

8. Majority Reasoning: First, even if there were no state law, Rule 4(d)(1) would pass muster under the Rules Enabling Act because it is one that relates to the "practice and procedure" of the courts, and does not "abridge, enlarge, or modify the rules of decision by which that court will adjudicate" the parties' rights. As to York, "outcome determination" was never intended to be a mechanical test like the procedure/substance test was. The court must also examine the policies underlying the Erie rule. Erie sought to reduce forum shopping and to provide equal protection. Non-substantial, or trivial, variations between state and federal practice (like this one) are unlikely to produce forum shopping or unequal protection. It appears that actual notice was made in this case, which is the policy behind rule 4(d)(1) and the constitutional aspect of service. Although the outcome is important in this determination, any Rule would be "outcome- determinative" if not followed. Also, Erie has never been invoked to void a federal rule. Any matter which "fall[s] within the uncertain area between substance and procedure, [and] rationally capable of classification as either" may be constitutinally regulated under the Rules as a valid exercise of Congressional power. The Erie doctrine was not intended to "disembowel" the Rules, which are constitutionally valid.

9. Concurrence Reasoning: [Harlan] felt that Erie should be more broadly read as a cornerstone of federalism. The proper test should be whether the rule, whether "substantive" or "procedural", would "substantially affect those primary decisions respecting human conduct which our constitutional system leaves to state regulation." The majority's test may trample on federalism if the rule violates a strong local state interest. For example, Ragan was wrongly decided because the state interest was too weak - the defendants would only have had to wait a few days before knowing whether the action was brought within the statute of limitations. Thus, federal law should have prevailed. Cohen, on the other hand, was properly decided because the state interest in preventing "strike suits" by making the P. put up a bond was very strong. Here, the state interest is very weak. All that would happen is that the executor would have to check the local courthouse, or his own house, before releasing funds from the estate.

** Day & Zimmerman v. Challoner, (1975)

2. Facts: Two soldiers were injured in Cambodia during the Vietnam war when the howitzer they were using had a round prematurely explode in the chamber. The victims and the gun's manufacturer were from different states.

3. Procedural Posture: Diveristy action for wrongful death and personal injury was brought in Texas federal court, under a strict liability theory. The jury returned sizable verdicts for the plaintiffs, but defendant appealed contending that under Klaxon, the federal court sitting in Texas must use the Texas state choice of law rule (which was a law of the place of injury), and apply Cambodian law which did not have strict liability. The court of appeals found for defendant, claiming that the federal court had an independent power to choose the law because the federal interest in promoting U.S. law in U.S. courts outweighed the state interest in uniformity.

4. Issue: Whether the conflict of law rule in Klaxon applies if the state's rule is law of the place of injury, and the place of injury is outside the U.S.

5. Holding: Yes.

6. Reasoning: Klaxon applies. The federal court must apply the conflict of law rule of the state in which it sits in order to avoid the twin Erie doctrines of forum shopping and discrimination against in-state defendants. The federal court is not free to modify the holding in Klaxon.

** Walker v. Armco Steel, (1980)

2. Facts: Identical to Ragan. Statute of limitations is tolled by state law when the actual service on the person is made. Rule 3 states that the action is commenced when a complaint is filed with the court. The P. filed the action before the statute of limitations had run, but did not get actual service in time.

3. Procedural Posture: The lower courts found that the state action would have been barred, and thus under Ragan, the federal action must be barred as well.

4. Issue: Whether the holding in Ragan (that the statute of limitations tolling statute of the state is to be followed in the federal court) is still good law given the holding in Hanna (that a federal rule must be followed if it is directly on point).

5. Holding: Yes.

6. Reasoning: Stare decisis. Also, Ragan was interpreted, distinguished, and left standing in Hanna. In order for the Hanna doctrine (Hanna/Sibbach) to apply, the federal rule must be directly on point, and there must be a "direct collision" between the federal rule and the state law. Here, the scope of Rule 3 is not so broad as to control the issue of tolling the statute of limitations. It merely states that the action is commenced. It measures prospective deadlines for filing papers, not retrospective deadlines for tolling the statute of limitations. The federal rule and the state law can thus exist side-by- side with no conflict. Thus, the Erie policies apply. Although there might be no forum shopping encouraged, there is still discrimination against in-state defendants. The ALI comments only suggest that the Rule 3 might have the affect of tolling the statute of limitations, not that it was intended to do so.

** Burlington Northern RR v. Woods, (1987)

2. Facts: Personal injury action. P. won in federal court (after removal from state court by defendant).

3. Procedural Posture: D. filed for a stay pending appeal, which was granted. The court of appeals affirmed. The state had a law that put a 10% penalty on awards that were stayed by appeal if the court of appeals affirmed. Also, federal appellate rule 38 has a discretionary provision for penalties upon frivolous appeals.

4. Issue: Whether the state law penalty is applicable in federal court given FRAP 38 and the holding in Hanna and Walker (direct collision).

5. Holding: No.

6. Reasoning: "When fairly construed, the scope of Federal Rule 38 is sufficiently broad' to cause a direct collision' with the state law or, implicitly, to control the issue' before the court, thereby leaving no room for the operation of [the state penalty law]."

** Masino v. Outboard Marine Corp., (1981)

2. Facts: P. was injured by a lawnmower manufactured and sold by D..

3. Procedural Posture: P. brought a diversity action in federal court to a jury of eight persons (Colgrove v. Battin), who returned a unanimous verdict for P.. D. sought to have the judge apply the five-sixths rule of the state (that a simple 5/6 majority was all that was required to enter judgment on a verdict). The district court refused.

4. Issue: Whether a federal court must apply the state statute providing that a civil jury may be less than unanimous.

5. Holding: No.

6. Reasoning: The court must perform Byrd balancing of the state interest vs. the federal interest minus the outcome determinative test (if it would result in forum shopping or discrimination). The state interest in non-unanimous juries is to prevent jury deadlock, which creates overcrowding of the state court system. The state has no interest in the docket of the federal court. The federal interest in unanimous juries is not constitutionally required, but has a strong tradition, including being implicit in Rule 48. Finally, the non- unanimous verdict would not result in forum shopping or unequal protection because a unanimous verdict requirement is not likely to encourage the majority of the jury to change their mind to prevent deadlock.

7. Notes: Congress rejected the Supreme Court's proposed uniform privilege rules in favor of letting the states retain control of the laws of privilege. The Congress reasoned that the federal interest in privilege was not strong enough to override the state policy, and that it would lead to forum shopping. In contrast, the Federal Rule of Evidence 407 on subsequent remedial measures was written to override any state contrary rules.

** Clearfield Trust v. United States, (1943)

2. Facts: A paycheck from the United States to a federal employee was intercepted and fraudulently endorsed to J.C. Penney to buy merchandise. J.C. Penney endorsed the check over to Clearfield Trust, which acted as the collecting agent, and endorsed the check over for payment, guaranteeing all prior endorsments (the first of which was fraudulent). Upon failing to receive his paycheck, the federal employee notified his proper supervisors. However, the U.S. failed to notify Clearfield Trust for several months. A state law provided that if there was unreasonable delay in notification of the defendant, then the plaintiff would be barred from recovery on the endorsment guarantee.

3. Procedural Posture: The district court held that the state law applied and dismissed the action. The Court of Appeals reversed.

4. Issue: Whether state law should apply (under Erie) to a case involving the rights and duties of the United States on its commercial paper.

5. Holding: No.

6. Reasoning: Erie does not apply to this action. The rights and duties of the United States on commercial paper which it issues are governed by federal rather than local law. [These rights and duties are based in the Constitution and in Federal Statutes. Thus, the Rules of Decision Act (and Erie) does not apply because the state laws can not supersede the Constitution.]

** United States v. Kimball Foods, (1979)

2. Facts: Two competing liens existed on the same piece of property. One was held by the U.S., the other by a private party. State laws on competing liens priority would have favored the private lienholders in this case.

3. Procedural Posture: The U.S. brought an action under federal original jurisdiction under 1345 to recover the property from the private lienholders.

4. Issue: Whether state law should apply in determining the priority of competing liens on the same piece of property when one of the liens is owned by an agency of the federal government pursuant to the exercise of its federal (constitutionally or statutory-based) power.

5. Holding: Yes.

6. Reasoning: The court followed the reasoning of Clearfield Trust that the state had no independent power to determine the exercise of legitimate federal power by federal agencies. The Constitution and acts of Congress require that state law not infringe on federal power. Thus, federal common law must control. However, here the federal statute has not spoken to the issue of priority of liens. Since there is not a need for uniformity in this area, and since the local businessman plans his commercial activities based on state law, state law may be followed until Congress comes up with a better plan. The pre-existing state laws do not conflict with protection of federal interests, because Congress can change the federal common law to preempt the state law if desired.

7. Notes: In Illinois v. City of Miluakee, the Supreme Court stated that a federal court should apply a federal common law of nuisance, and that such an action would arise under the "laws" of the U.S. under 1331 (federal question jurisdiction).

I. Permissive Joinder of Parties (Rule 20)
A. must grow out of same transaction or occurrence, AND
B. some common question of law or fact will arise later in the action.
C. defendants may be joined in the alternative (See Form 10).
II. Cumpulsory Joinder of Parties (Rule 19)
A. Must be joined if feasible, if:
1. "complete relief" can not be afforded to the parties; or
a. ex: A sues B for a debt on a note that C is also a holder. If A wins,
B may become bankrupt and A may spend the money before C can bring suit.
2. the person's interest will be practically destroyed, or leave one of
the parties subject to double liability as a result of later suit by the
omitted person.
3. service of process and subject matter jurisdiction will continue
a. venue can be waived by the joining party, or the action may be
dismissed as to him if he objects to venue.
B. if it is not feasible to join, then the action must be dismissed
(indispensable party); or it may continue.
1. court must weight the amount of the damage of going on without the
other party.
III. Interpleader (Rule 22)
A. mechanism for a defendant to seek relief against multiple competing
parties each of which claims to be entitled to the identical relief.
(i.e., two parties claiming to be the beneficiary of a life insurance
B. potential defendant brings an action to have the court declare which
one (if any) is entitled to relief.
1. "we'll pay the winner, or neither."
C. Two versions:
1. "rule interpleader" - Rule 22(1);
a. must be used for federal question jurisdiction
b. for diversity actions, ($50,000 or more) service of process is
limited by Rule 4.
2. "statutory interpleader" - Rule 22(2) ( 1335, 1397, 2361)
a. only $500 or more 1135(a)(1), but claimants must be from different
states (but not complete diversity, only necessary that two are from
different states)
b. venue is proper in any district in which a claimant resides under
1337 (regardless if all reside in the same state as is the case in
c. process may be served nationwide under Rule 4(k)(1)(C)

IV. Third Party Practice (Rule 14)

A. a defendant may implead another party who he believes should indemnify his losses against the plaintiff (original defendant, even by counter-claim, becomes the third party plaintiff, and impleaded party becomes third party defendant.)
B. must get permission of the court unless implead within 10 days of original answer.
C. the third party defendant may assert any defense against the original plaintiff that the third party plaintiff has, or may bring a related action, or the plaintiff may take the opportunity to bring a related action solely against the third-party defendant.

** Bell v. Hood, (1946)

2. Facts: Hood alleges that FBI agents broke into his house, imprisoned him and conducted an illegal search and siezure of various documents.

3. Procedural Posture: Hood brought suit in a federal district court to recover monetary damages, alleging federal question jurisdiction under the 4th and 5th amendments. The damages were sought as the remedy for the civil rights violation. D. moved to dismiss for failure to state a cause of action and for summary judgment on the facts. On his own motion, the district court dismissed for lack of subject matter jurisdiction. The court of appeals affirmed and denied P. leave to amend the complaint.

4. Issue: Whether the federal court must assume jurisdiction over a case in which the complaint is drawn as to seek recovery directly under federal law, even if the claim fails to state a cause of action.

5. Holding: Yes.

6. P.'s Argument: There is subject matter jurisdiction because the claim "arises" out of the consitution, namely the 4th and 5th amendment. Federal statute gives the court original jurisdiction in civil cases with federal question jurisdiction.

7. D. Argument: The complaint only alleges the common law tort of trespass which is governed by state law, and does not "arise" out of federal law. Furthermore, no cause of action is pleaded because there are no federal laws providing for monetary damages for 4th and 5th amendment civil rights violations.

8. Majority Reasoning: The complaint plainly seeks recovery under federal law. It is up to the party to decide what law he will rely upon, and the P. is clearly basing the suit on civil rights violations. Where this occurs, the federal court must assume jurisdiction in order to decide whether the allegations state a cause of action on which the court can grant relief, as well as to determine issues of fact. Failure to state a cause of action requires adjudication on the merits, which requires assumption of jurisdiction. The only exceptions are where the federal question is immaterial and made solely for the purpose of obtaining jurisdiction, and where the claim is frivolous. The valid federal question here is whether monetary damages are proper for violation of the 4th and 5th amendments.

9. Dissent Reasoning: The rule should be that the cause of action must arise out of the constitution in order for jurisdiction to be present. Otherwise, the pleader is the one controlling the establishment of jurisdiction. Also, once the court has jurisdiction, it would also have to pass on the question of trespass under state law.

** Hurn v. Oursler, (1933)

2. Facts: Violation of a copyrighted play.

3. Procedural Posture: P. joined three claims in the same complaint: 1) infringement of copyright of a play (federal question), 2) unfair competition in unauthorized use of the same play (state law), and 3) unfair competition through interference with an uncopyrighted version of the same play (state law). The trial court dismissed the copyright claim for failure of proof, and the other two claims for lack of jurisdiction.

4. Issue: Whether the federal district court had jurisdiction over an unfair competition claim arising from state law if it is joined with a claim arising under a federal copyright law, if the two claims support the same "cause of action."

5. Holding: Yes.

6. Reasoning: It was error to dismiss (for lack of jurisdiction) the unfair competition claim with regard to the copyrighted play because both it and the federal copyright claim supported the same "cause of action." The claim with regard to the uncopyrighted version of the play was properly dismissed because it was a separate and distinct cause of action.

7. Notes: Codified in 1338(b): the state unfair competition claim must be "related" to a "substantial" federal claim.

** United Mine Workers v. Gibbs, (1966)

2. Facts: Gibbs worked in a mine. He claims that the union interfered with his contractual relationship with his employer.

3. Procedural Posture: P. claimed damage under a federal statute and also damage for the same acts under the common law of the state. The trial court dismissed the federal claim on judgment n.o.v., but allowed the P.'s verdict on the state claim to stand. The court of appeals affirmed.

4. Issue: Whether the relationship between the federal claim and the state claim was close enough to permit "the conclusion that the entire action before the court comprise[d] but one constitutional case'."

5. Holding: Yes. If a P.'s claims are such that they derive from a "common nucleous of operative fact", such that he would be expected to try them in on judicial proceeding [disregarding the federal or state nature of the claim], then if the federal issue is "substantial", then the court has the "power" to adjudicate the entire case.

6. Reasoning: The power of pendent jurisdiction is discretional. The court must consider convenience, and fairness to the litigants. If it appears from the pleadings that state law dominates, then the case should be dismissed without prejudice for lack of jurisdiction, so that it can be brought in the state courts as a matter of deference to the judicial power of the states. However, if, as in the present case, the scope of the state claim implicates the doctrine of federal preemption, i.e. the state and federal claims implicate trigger overlapping state and federal remedies, pendent jurisdiction should be exercised. That is not to say that the relationship of the state and federal claims "creates" pendent jurisdiction, only that it is within the discretion of the court to consider this factor in exercising pendent jurisdiction. The judge also has the power to separate the state and the federal claims under Rule 42(b). The question of power to hear the case is based on the pleadings. However, the issue of whether pendent jurisdiction has been properly assumed always remains open [like 12(b)(1)/12(h)(1)] throughout the litigation.

** Finley v. United States, (1989)

2. Facts: P.'s family died in an airplane crash.

3. Procedural Posture: P. sued the U.S. in federal district court for negligence, invoking exclusive jurisdiction under the Federal Tort Claims Act. She tried to join non-federal claims against different parties, a municipality and a corporation, that were also involved in the airport's operation. The district court decided to exercise pendant jurisdiction over the claims to the new parties. The court of appeals reversed on interlocutory appeal.

4. Issue: Whether the pendent jurisdiction rule in Gibbs extends to pendent-party jurisdiction; that is, the joining of non-federal claims against parties who are not named in any claim to which there is independent original federal jurisdiction.

5. Holding: No.

6. Reasoning: The case here is fundamentally different from Gibbs. The plaintiff has substantial federal claims against a first defendant, and state claims against a second defendant. Gibbs only held that the state claims could be joined against the first defendant. The court will not assume that the Gibbs doctrine should be applied any further, because that would be to assume that Congress has granted this broad power in apparent infringement of the notion that federal courts are courts of enumerated, limited jurisdiction. To prevent any further confusion, the court will assume the clear interpretive rule that Congress must specifically grant jurisdiction in this type of case.

7. Dissent: There is widely recognized desire for jurisdiction in this case since the facts are the same, and Gibbs should be read more broadly. The court should thus presume that there is Congressional intent to favor pendent jurisdiction in a case like this.

** Revere Copper & Brass v. Aetna Casualty & Surety Co., (1970)

2. Facts: Construction of a building was not completed in accordance with a construction contract. Revere had insured the construction performance bonds with Aetna. Aetna's principle, Fuller, was the maker of the performance bonds.

3. Procedural Posture: Revere brought suit against Aetna under diversity of citizenship, alleging that Aetna's principle, Fuller, had breached the contracts. Aetna denied the allegations, and impleaded Fuller under 14(a), alleging that Fuller had agreed to indemnify Aetna for all losses. Fuller admitted the indemnification, but denied breaching the contract, and brought a counterclaim against Revere for breach of contract. There was no diversity of citizenship between Revere and Fuller, and so Revere moved to dismiss Fuller's claim under 12(b)(1). The district court denied the motion, finding the claim to be within its ancillary jurisdiction with regard to the original claim, even though it did not have an independent ground for federal jurisdiction. Revere brought this interlocutory appeal.

4. Issue: Whether proper ancillary jurisdiction exists in the case where an impleaded (under rule 14(a)) party seeks to bring a claim, not having independent federal grounds, against the original plaintiff in a diversity action.

5. Holding: Yes. Proper ancillary jurisdiction exists if the claim arises out of the same aggregate of operative facts as the original claim in two senses 1) that the same aggregate of operative facts serves as the basis for both claims, or 2) that the aggregate core of facts upon which the original claim rests activates additional legal rights in a party that would otherwise remain dormant.

6. Resaoning: It is well established that compulsory counterclaims under 13(a), impleader action under 14(a), and intervention as a matter of right under 24(a) all bring proper ancillary jurisdiction, because they all arise out of the same transaction or occurrence the original claim. 13(b) permissive counterclaims must have an independent federal ground, and do not normally bring ancillary jurisdiction because they don't arise out of the same transaction or occurrence. Ancillary jurisdiction is made available to defendants in order to protect their interests since they have been involuntarily brought into the litigation. Here, the two claims are the opposite sides of the same coin; they both arise out of the breach of a contract. Thus, ancillary jurisdiction is proper.

** Owen Equipment & Erection Co. v. Kroeger, (1978)

2. Facts: Kroeger's husband was electrocuted when he passed too near a steel crane that came too close to a power line.

3. Porcedural Posture: Kroeger's wife (Iowa) brought a wrongful death negligence action against the construction company, OPPD (Nebraska), under diversity of citizenship. OPPD impleaded Owen under 14(a), alleging that they were negligent in operation of the crane. OPPD then moved for summary judgment, and Kroeger amender her complaint to name Owen as an additional defendant. OPPD won the summary judgment action. At trial, it appeared that Owen actually had its primary place of business in Iowa, not Nebraska, and so there was no longer diversity of citizenship. The trial court reserved decision on Owen's motion to dismiss for lack of jurisdiction, and verdict was for the plaintiff.

4. Issue: Whether ancillary jurisdiction is proper with regard to a plaintiff's claim against an impleaded third-party defendant, when the two claims in a diversity action arise out of the same transaction or occurrence, but there is not complete diversity between the plaintiff and the impleaded third-party defendant.

5. Holding: No.

6. Majority Reasoning: There was no independent federal ground for the P.'s tort claim against Owen, because of lack of diversity. Although the two claims arise out of the same transaction, as required by Gibbs, that is not the end of the inquiry. There also must be an inquiry, under Aldinger, of whether Congress has approved the exercise of jurisdiction over the non-federal claim in an action having a particular procedural posture. It is clear that Congress intended complete diversity in 1332(a) actions. Since P. could not have brought an action naming both OPPD and Owen as defendants originally, she can not do it by the accident of ancillary jurisdiction, because that would open the danger of persons circumventing the requirement by suing only the out-of-state joint tortfeasor, and waiting for them to implead the in-state joint tortfeasor. Also, the plaintiff is the one attempting to get ancillary jurisdiction. There is not a danger of unfairness (as there is with impleaded defendant's counterclaims) with P.'s because the P. chooses his own forum. Also, the claim against Owen does not depend at all on the claim against OPPD.

7. Dissent Reasoning: Congress did not intend to define the jurisdiction of the federal courts so inflexibly that they are unable to effectively resolve an entire, logically entwined lawsuit. Here, the complete diversity requirement should bend to the doctrine of preventing duplication of lawsuits. The facts were already before court. Thus, for the sake of efficiency, the court should have resovled the state case as well.

** Shamrock Oil & Gas Corp. v. Sheets, (1941)

2. Facts: P is from Delaware, D is of Texas. P has a contract claim in excess of the diversity jurisdictional amount against D. D has an entirely unrelated contract claim against P, also in excess of the jurisdictional amount.

3. Procedural Posture: P brought the original action in Texas state court against D. D counterclaimed for his unrelated contract. P then removed on the basis of diversity. D moved to remand, and the District Court denied the motion. P won on both the claim and the counterclaim. The court of appeals reversed and remanded the case to state court.

4. Issue: Whether 1331(a) allows a plaintiff who is defending against a counterclaim to remove to federal court (i.e. does the word "defendant" or "defendants" in 1331(a) apply to plaintiffs who are defending against a counterclaim).

5. Holding: No.

6. Reasoning: It is irrelevant whether the counterclaim was compulsory or permissive under state law, or even factually related to the main claim. "Defendant" means what it says. A plaintiff can not remove, even if he is counterclaimed.

7. Notes: The plaintiff may be able to simply abandon his original claim, thus becoming a defendant only, and then remove and reassert his claim as a counterclaim in the federal court.

I. 1441(c) removal of "separate and independent" federal question claim A. Allows a small opportunity to remove a case not removable under 1441(a) because not within the federal court's original jurisdiction. 1. Ex: P sues D in state court on a federal civil rights claim, and joins a completely unrelated contract claim. D can remove the whole case. 2. However, the federal court can remand, at its discretion, "all matters in which State law predominates" in order to avoid any constitutional problems.

B. The federal question must be removable if it were sued upon alone.
1. Ex: P sues D on a FELA action (not removable under 1445), and joins a completely unrelated state contract claim. D may not remove simply because the combination literally fits the language of 1441(c).
C. 1441(c) does not avoid the Shamrock rule.
1. Ex: If P sues D in state court on a contract claim, and D counterclaims on a completely unrelated federal civil rights claim, P can not remove because 1441(c) is interpreted narrowly as applying only to claims brought by original plaintiffs against original defendants.
D. 1441(c) operates with pendent jurisdiction to provide for removal of almost any federal question case.
1. Ex: P sues D on a federal question, and joins a state claim which is transactionally related - D can remove whole case under 1441(a) (and court has discretion to remand state claim under 144(c).
2. Ex: P sues D on a federal queston, and joins a state claim which is "separate and independent" - D can remove whole case under 1441(c) (and court must remand state claim under 1441(c)).

** Carnegie-Mellon Univ. v. Cohill, (1988); pg. 60 supp.,

2. Facts: Cohill was allegedly wrongfully terminated by the University. All parties are citizens of PA.

3. Procedural Posture: Cohill brought a federal question claim (under federal age-discrimination laws) and various other state-based contract and tort claims all arising out of the same transaction under pendent jurisdiction. Carnegie removed under 1441(a). 6 mo. later, Cohill was granted leave to amend his complaint to remove the untenable federal question claim (leaving only the state claims).

4. Issue: Whether the case should be remanded to state court now that the federal question (on which subject matter jurisdiction over the state claim depended by pendent jurisdiction) has been dropped.

5. Holding: Yes.

6. Reasoning: 1441(c) does not give power to remand in this case. However, the doctrine of pendent jurisdiction itself entails the court's jurisdiction to decline jurisdiction by dismissing the state case, and hence implies the power to remand the case.

** Alexander v. Goldome Credit Corp, (1991); pg. 61 supp.,

2. Facts: Alexander took out a second mortgage on his home from Goldome to perform home improvements. Alexander hired C.J. Construction, through their agent, Capsuto, to perform the work. The Alexanders were not happy with the construction work, and so refused to sign the certificate of completion. Nevertheless, Goldome paid C.J. Construction for the job. All parties are residents of Alabama, which allows punitive damages for breach of contract.

3. Procedural Posture: Alexander brought state actions for fraud and breach of contract against Goldome, C.J. and Capsuto, and a federal question action under the Truth in Lending Act against Goldome only. Goldome signed a notice of removal, but the other two defendants did not. Alexander brought a motion to remand.

4. Issue: Whether 1441(c) allows for remanding of both the state and the concurrent jurisdiction federal claims (i.e. those which the federal courts do not have exclusive statutory jurisdiction over) back to the state court.

5. Holding: Yes.

6. Reasoning: First, the case was defectively removed under 1441(a) and (b) because of procedural defects in the notice of removal, i.e. it was not signed by all of the defendants. However, the federal court may have had jurisdiction to hear the case under 1441(c) because 1367 allows for pendent party jurisdiction, thus Goldome could have been the only signer on the notice of removal under 1441(c) because it allows for removal of the entire case by one defendant if there is a "separate and independent" claim. Here, the state claims are "separate and independent" because it is possible that the work was done correctly, but that Goldome still violated the truth in lending act. However, 1441(c) also provides that the federal court may, at its discretion, "remand all matters in which State law predominates," and "matters" means whole cases, not just individual claims. This reflects Congress' intent to reduce the caseload of the federal courts. This is the kind of case that is properly adjudicated in state court because the federal claim is relatively insignificant compared to the state claims.

7. Notes: These claims probably should have failed the stringent Finn test (which requires the claims to be "separate and independent").

** United States v. United Mine Workers, (1947)

2. Facts: At the close of WWII, the coal mines were in control of the U.S. government, under contract with the Secretary of the Interior. The mine workers union wanted a new contract, and they gave notice to the government of their unilateral termination of the existing contract.

3. Procedural Posture: The U.S. brought an action for delcaratory judgment that the union had no right to unilaterally terminate the contract, and obtained a temporary restraining order prohibiting the union from taking any action until the hearing on the preliminary restraining order. However, the union walked out on strike, and the U.S. moved to punish for contempt. The union asserted that the court had no jurisdiction to punish for contempt under the Norris-LaGuardia act, which applied to civilian employers, but was questionable whether it applied to the government. The court ruled that the Act did not apply to the government, and fined the union for contempt.

4. Issue: Whether a disobedience of a TRO is proper grounds for a finding of contempt if the court issues the TRO while it considers whether it even has jurisdiction to grant a TRO.

5. Holding: Yes.

6. Reasoning: The District Court has the power to preserve existing conditions while it determines its own authority to grant injunctive relief. The injunction is valid, and must be obeyed, until it is found to be erroneous be a proper judicial proceeding. This is true without regard to the constitutionality of the Act under which the order is issued.

** Walker v. City of Birmingham, (1967)

2. Facts: MLK Jr. and other ministers applied for a permit to demonstrate by marching in Birmingham, Alabama. A local city ordninance required petition to the city commission, consisting of three persons. There was evidence that the ordinance was enforced in an arbitrary and discriminatory manner previously. The ministers asked one of the Commission for a permit, and were denied. They did not take any further actions. The city obtained an ex parte injunction against the ministers, prohibiting them from marching. They marched anyway, in direct civil disobedience of the injunction, claiming that it was unconstitutional.

3. Procedural Posture: The ministers were convicted of contempt, and they raise this appeal.

4. Issue: Whether an injunction which is granted based on an allegedly unconstitutional law is valid, even if it is found later that it was erroneously granted.

5. Holding: Yes.

6. Reasoning: Howat v. Kansas controls. An injunction, even erroneously granted, is valid until it is modified or dissolved in a proper procedding. A person acts at his own risk when he judges the propriety of an injunction on his own. The ministers could have sought prompt judicial relief in the two days before the march, but they did not. Accordingly, the conviction is affirmed.

7. Notes: In Shuttlesworth v. City of Birmingham, the Supreme Court found that the ordinance that the injunction was based upon was unconstitutional as written. In United States v. Ryan, however, the court pointed out that a person who refuses to comply with a subpoena duces tecum, and is thereafter held in contempt may have his contempt conviction reversed because the failure of the trial court to quash a subpoena duces tecum is not appealable. They distinguished Walker by stating that the claims of those defendants were open to review before they failed to comply. Likewise, in Maness v. Meyers, the court held that where irreparable damage would occur if the defendant complied with the subpoena (violation of 5th amendment), the contempt conviction could be overturned.

** Pennoyer v. Neff, (1878)

2. Facts: Neff homesteaded a large plot of land in Oregon, and consulted an attorney, Mitchell, while he was there. He then left for California. Mitchell filed suit in Oregon claiming that Neff owed him legal fees. The Oregon court, upon affadavits by Mitchell that Neff was non- locatable, allowed Mitchell to proceed by running a notice in a local paper. Judgment by default was entered against Neff. Then Mitchell moved to collect on the judgment against Neff's land, and he bought it for the cost of the legal fees. Mitchell then sold the land to Pennoyer.

3. Procedural Posture: When Neff returned from California, he sued Pennoyer for ejectment. The trial court found for Neff, holding that the affadavits of service by publication were defective.

4. Issue: Whether a state may properly exercise personal jurisdiction over an out of state resident who is not available to be personally served, if the out of state resident has property within the state.

5. Holding: No.

6. Majority Reasoning: Certainly the state has jurisdiction over the property within its borders. It may therefore properly exercise jurisdiction over the property in a proceeding in rem. However, here the property was moved against in order to satisfy a personal judgment against a non-resident, against whom service was defective because it did not provide constructive notice and was thus in violation of the 14th amendment due process clause. The power of a state is limited to within its own borders. There is great possibility for fraud if proper due process service is not required. Since the law assumes that real property is always in the possession of its owner, constructive notice may be acheived through proper pre-trial seizure of the land in a proceeding in rem. However, where the object of the action is to determine the personal rights of an out of state resident in a proceeding in personam, seizure of the property is not sufficient or proper to give notice to the person. A judgment rendered on a proceeding lacking personal jurisdiction is void when rendered, whether the person owns property in the state or not. It is void even in the state which grants it and is thus subject to collateral attack, and is not deserving of "full faith and credit."

7. Notes: However, Closson v. Chase, refused to follow Pennoyer, holding a Wisconsin state statute valid which expressly provided that a plaintiff could make service by publication against a non resident who owned property in the state in order to get jurisdiction over the person for an action to collect on a promissory note, and then move against the property.

** Tyler v. Judges of the Court of Registration, (1900)

2. Facts: A parcel of land was freed from cloud of title by recordation of title after a hearing to establish title. A local statute provides that in order to perform this recordation, service by means of publication, mailing to those parties known to have any claim (either valid or invalid), mailing to all of the adjoining residents, and posting on the property.

3. Procedural Posture: The Court of Registration held a hearing which complied with the local statute, and recorded title to the land in a person. Tyler seeks a writ of prohibition to prevent the court from recording the title, and to declare the act establishing the court unconsitutional. According to the petitioner, such an action is not possible due to violation of due process.

4. Issue: Whether the local statute providing for service in a proceeding of determination of title to land is constitutional even though it does not require actual notice by personal service on all persons who may have an interest in the land, but who are not known.

5. Holding: Yes.

6. Reasoning: Jurisdiction over the real property is established by its presence in the geographical boundaries of the state. The court has power over the res of the land. Were this a proceeding in personam, i.e. one to which the rights of identified persons are to be established, and only certain persons are to be heard in defense, then actual notice of the defendants would be constitutionally required under due process. However, this is a proceeding in rem, against an unknown and unascertainable body of defendants, the object of which is to bar all possible defendants. In a proceeding in rem, notice is effected by seizure of the res, because seizure is notice to the owner due to the presumption that owners are in possession of their property. Seizure here has been effected by posting on the property. Another justification is that of necessity. Since many of the possible defendants may be unknown, notice by publication is necessary. As to those defendants who are known, there is no constitutional difference between sending personal notice by messenger, and sending it in the mail, publishing it in a newspaper, and recording it in the registry and posting it on the land.

** Garfein v. McInnis, (1928)

2. Facts: An action for specific performance of an alleged contract to convey real estate.

3. Procedural Posture: P. served the out-of-state D. in person under a state "long-arm" statute which provided for personal service of out-of- state residents who have an interest in in-state property, if the action had to do with the property. D. moved to set aside service, and the motion was denied.

4. Issue: Whether, in an action for specific performance of an alleged contract to convey real estate, a New York plaintiff may serve an out- of-state defendant to provide notice of the proceeding; that is whether a judgment in an action for specific performance is only a decree in personam against the party who had agreed to convey property, or whether the court in such an action may grant a judgment which will operate upon the property itself and result in a transfer of title to a successful party.

5. Holding: Yes.

6. Reasoning: Historically, a court of equity only had the power to issue "commands" against the conscience of the parties. As such, they were only actions in personam. However, in this country, the difference between courts of equity and of law has been virtually destroyed, and in most places, the court has the power to actually vest an interest in a person. Here, the state has several statutes that allow the court such equitable power. Thus, they may provide out of state service to notify the owner of an interest in a property of a proceeding in rem against that property. Although the court can not obtain jurisdiction over the person in such a case, it does have jurisdiction over the res.

** Harris v. Balk, (1905)

2. Facts: Harris (NC) borrowed $180 from Balk (NC). However, Balk (NC) owed Epstein (MD) $344. When Harris was temporarily in Maryland, Epstein served on him a proper notice under local statute of a garnishment proceeding against him for the $180 Harris owed Balk, as partial satisfaction of the $344 that Balk owed Epstein. The Marlyand court gave judgment for Epstein, and Harris paid Epstein the $180 that he owed to Balk.

3. Procedural Posture: Balk brought an action in North Carolina to recover the $180 from Harris, claiming that the Maryland judgment was invalid and not entitled to full faith and credit, because the Maryland court lacked jurisdiction over the debt, since it was incurred in North Carolina, and Harris was only temporarily and casually within the borders of Maryland, and thus did not subject any of Balk's property to Maryland jurisdiction during his visit.

4. Issue: Whether the Maryland judgment against Harris was valid even though the debt was incurred out of state, given that Maryland acquired personal jurisdiction over Harris by proper service in state.

5. Holding: Yes.

6. Reasoning: Attachment of debt is a creature of local law. So if personal jurisdiction can be had over a visitor to the state, the court can garnish a debt due from him, provided that the debtor can sue in that state. Here, Harris was subject to personal jurisdiction in Maryland, and Balk could have sued in Maryland. The nature of Harris' stay in the state, and the location of the origination of the debt was immaterial. Epstein was acting in the place of Balk with respect to Harris, because money owed to Balk was moreover owed to Epstein. Thus the judgment is valid.

I. In Rem and Quasi-In Rem Federal Actions
A. 28 USC 1655 authorizes territorial jurisdiction over real or personal property located within the jurisdiction.
1. Applies only to liens or titles existing prior to suit (not to quasi- in rem).
2. Requires publishing if personal service notice can not be made.
3. If the absent D. does not appear, the judgment affects only the property, but the D. can make a "special appearance" for the purpose of challenging the court's jurisdiction over the property without subjecting himself to personal jurisdiction.

B. Rule 4(e)(2) allows original quasi-in rem and in rem jurisdiction in federal courts to the extent authorized by the state in which the federal court sits, given, of course, that subject matter jurisdiction (i.e. diversity or federal question) exists.

C. It is unclear in a quasi-in rem action based solely on diversity whether the $50,000 jurisdictional requirement refers to the amount of the underlying claim, or to the value of the seized property, although there is case law indicating that the underlying claim amount controls.
1. current attitudes toward limiting federal jurisdiction would indicate that the value of the property should control, in order to prevent multiple suits for small amounts.
2. However, sometimes the value of the seized property is not known until it is sold, for example, real property.

** Campbell v. Murdock, (1950)

2. Facts: P. is a contractor who expended labor and materials on D.'s land. Apparently the work was not paid for, and Campbell put a lien on the land itself. Campbell was from Penn. Murdock was from South Carolina.

3. Procedural Posture: P. brought a federal court action with diversity jurisdiction and jurisdiction under 1655. Murdock appeared specially to challenge jurisdiction and move to dismiss the action against her insofar as it asks for personal judgment, and appearing solely for the purpose of defending her property, asks for a more definite statment.

4. Issue: Whether an out-of-state defendant in an in rem action may make a special appearance to defend her property, other than challenging jurisdiction, without subjecting herself to personal jurisdiction.

5. Holding: No.

6. Reasoning: 1655 provides that if an absent defendant does not appear, the judgment shall only affect the property which is the subject of the action. This leaves the inference that if the defendant does appear, the court may try the entire controversy between the parties. This gives the defendant the option of making no appearance at all, or to make a general appearance and subject himself to personal jurisdiction with regard to all of the claims of the action. The defendant may not appear solely to defend the property without subjecting himself to personal jurisdiction. Furthermore, in this action, the personal action is so related to the in rem action, that the judgment may exceed the value of the land without defeating the in rem jurisdiction under 1655.

7. Notes: In an action in rem or quasi-in rem, the defendant in federal court does not have to plead any counterclaims that he might have, even if he makes a general appearance, but if he chooses to counterclaim, then the compulsory counterclaim rule comes back into normal operation.

I. Enforcement of Judgments in Other States
A. A state court judgment may be enforced in another state by bringing a separate action on the judgment in that new state, in order to obtain a new judgment in that new state.
1. New court must find that the judgment was valid (on collateral attack).
a. court must have competency to render judgment (i.e. subject matter jurisdiction)
b. sufficient nexus or basis for exercising authority over the defendant or the target of the action (i.e. substantive due process).
c. persons to be legally affected must be given an opportunity to be heard (i.e. notice).
2. If judgment is valid, it is entitled to full faith and credit.
a. laws of the state of judgment are used to determine validity.
b. laws of the state of enforcement are used to enforce the judgment.
3. if the first judgment is from a state court and the second action is in federal court, 1738 provides that the federal court will give full faith and credit.
4. if the first judgment is in a federal court and the second action is in a state court, then the supremacy clause requires that the federal common law doctrine of res judicata is applicable and binding on the state court to enforce the judgment.
5. If both actions are in the federal courts, federal res judicata binds the second court.
a. 1963 provides for registration of a federal judgment in all of the federal courts, without requiring a new action, automatically converting the judgment into a judgment in the jurisdiction of the registering court.

B. Fraud and Force - service of process of out-of-state residents is void if done by fraudulently or forcibly persuading them to enter the state and be served, however, fraud may be used to serve a defendant who is otherwise voluntarily in the state. C. Immunity from Service - a non-resident party has customarily been immune from service of process while in the state for attendance at litigation and a reasonable time to go to and from.

** Milliken v. Meyer, (1940)

2. Facts: A suit to recover profits from certain Colorado oil properties. At all times, Meyer was domiciled in Wyoming.

3. Procedural Posture: Milliken sued Meyer in Wyoming state court. Meyer received in-hand service of process in Colorado pursuant to a Wyoming statute. He did not appear, and jugdment was entered against him. Then Meyer sued Milliken in Colorado state court to enjoin Milliken from enforcing the judgment there, and to declare the Wyoming judgment invalid for want of personal jurisdiction (due to lack of basis). The state supreme court found for Meyer, and Millikin appealed to the Supreme Court.

4. Issue: Whether domiciliary status is alone sufficient to establish proper nexus to establish personal jurisdiction over an absentee defendant who is served out-of-state.

5. Holding: Yes.

6. Reasoning: Service is adequate so far as due process is concerned if it is reasonably calculated to give the defendant actual notice of the proceedings and an opportunity to be heard. The authority of a state over one of its citizens is not terminated by the mere fact of his absence from the state. The stae which accords him privileges and affords protection to him and his property by virtue of his domicile may also exact reciprocal duties.

7. Notes: A defendant can subject himself to personal jurisdiction by consent, either before the commencement of the action (perhaps as a contractual term), or after the commencement of the action (by accepting or waiving service when he otherwise would not have been subject to service; or by making a general appearance at the action).

** Hess v. Pawloski, (1927)

2. Facts: Mass. had a statute that made the operation of a motor vehicle by a non-resident an implied consent to have the Mass. state registrar of motor vehicles become his agent for the purpose of service of process in any action arising from any accident involving the non-resident motorist while in Mass. D. was a non-resident, and got in an accident while driving in Mass.

3. Procedural Posture: The D. challenged the service of process statute as a violation of due process.

4. Issue: Whether the Mass. statute that provides for implied agency for the purpose of service of process on non-resident motorists was a violation of due process.

5. Holding: No.

6. Reasoning: The state has the police power to regulate the use of its highways. Automobiles are very dangerous, even when operated carefully, and the state had the inherent power to regulate the non-motorist's access to their highways. As such, it has the power to enact such a statute that makes operation of the motor vehicle an implied consent to service. It does not discriminate against non-residents, but rather brings them on the same footing as residents. The statute also requires service by mail (for notice), and provides for adequate time to be heard. Thus, the only difference here is the difference between formal and implied appointment of an in-state agent. This difference is not substantial enough to be a violation of due process.

** Flexner v. Farson, (1919)

2. Facts: Flexner contracted to buy bonds from Farson, who was a partnership (not a corporation). The partnership's in-state agent (who was also named Flexner) handled the sale. The contract was breached. The partners were domiciled out of state, and were out of state residents. A local statute provided that service may be made against an out of state partnership by serving their agent in state.

3. Procedural Posture: Flexner served the partnership's in-state agent in the county where the contract was made. The defendant defaulted, and Flexner obtained a judgment, which he sued upon in Illinios to enforce against Farson, claiming that the contract had the implied consent that the partnership would be subject to the service of process statute. Farson defended on the grounds of lack of jurisdiction over the person (lack of nexus). The state court held the judgment void.

4. Issue: Whether service of process under the Kentucky statute was valid.

5. Holding: No.

6. Reasoning: The implied consent doctrine is only applicable if the state has the right to exclude the entity altogether, and thus could establish the service of process obligation as a condition to letting the entity in to do business. That analogy does not apply here to a partnership, because the state has no power to exclude the defendant partnership (under the privileges and immunities clause of Article IV, section 2). As such, the judgment is void for lack of nexus required for jurisdiction over the defendant's person.

7. Notes: However, in Doherty v. Goodman, on similar facts, the Supreme Court held that service was proper, given that service was made on the in-state agent, and that the selling of securities was an exceptional business which the state subjects to special regulation. The court reasoned that this was not a violation of the privileges and immunities clause because neither Iowa citizens, nor out of state citizens, could freely engage in the business of selling securities. The statute was constitutional as long as it provided for reasonable notice (by mailing or similar). Also, in Adam v. Saenger, the Supreme Court held that a plaintiff who brings an action against a defendant in a state court subjects himself to personal jurisdiction of that court with respect to any counterclaim (whether or not compulsory). The court reasoned that the plaintiff, in voluntarily demanding relief from the court, may reasonably be treated as being subject to that court's jursidiction for all purposes for which justice to the defendant requires his presence.

** Int'l Shoe Co. v. Washington, (1945)

2. Facts: The shoe company is a Delaware corporation, with its principle place of business in Missiouri. It "employs" several salesmen in the state of Washington, who solicit orders for shoes, which are in turn shipped into Washington. The salesman is paid a commission. Washington had an unemployment compensation statute which required employers doing business in the state to pay a certain percentage into the fund on a per-employee basis. The shoe company did not pay this amount, claiming that the tax was a burden on interstate commerce, and a violation of the 14th amendment.

3. Procedural Posture: The state served notice on a salesman who resided in Washington, and also mailed a copy to the shoe company at their Missouri address [as required by the statute]. The shoe company appealed all the way to the Supreme Court, with each lower court finding that they had sufficient activity in the state to be considered amenable to suit there.

4. Issue: Whether the shoe company has sufficient activity in the state of Washington to render itself amenable to suit there.

5. Holding: Yes.

6. Majority Reasoning: First, the tax is not a burden on interstate commerce because the states have power under federal statute to make foreign corporations doing business in the state subject to the unemployment tax. In order to determine whether a business has sufficient in-state presence for nexus purposes to satisfy the due process clause, an "estimate of the inconveniences" which would result to the corporation from a trial away from its "home" or principle place of business is relevant. Whether due process is satisfied must depend on the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure. But to the extent a corporation exercises the privileges of conducting activities within a state, it enjoys the protection of the laws of that state, and the right to bring actions in a court of that state. This gives rise to obligations at least as far as they arise out of the business conducted in the state. Thus, a procedure which requires the corporation to respond to a suit brought to enforce these obligations is not undue. Here, the activity was sufficient because it extended over a long time and was systematic, resulting in a large amount of product being shipped into the state.

7. Concurrence Reasoning: [Black] felt that the appeal should have been dismissed as raising no new issues. The majority's new constitutionality test required a vague and unprincipled balancing of "reasonableness" with "inconvenience."

** Perkins v. Benguet Consolidated Mining Co., (1952)

2. Facts: The mining company had a mine in the P.I. which was occupied by the Japanese during WWII. During this occupation, the president of the company returned to his home in Ohio to conduct business on behalf of the company. Perkins' husband was given the stock and dividends of the company when they were divorced. Perkins is a non-resident of Ohio.

3. Procedural Posture: Perkins brought an in personam action in the Ohio state courts against the mining company to recover the value of the stock and dividends the thought were due to her and not her husband. This cause of action did not arise in Ohio, and does not concern the business being performed in Ohio. Personal service on the president of the company was made in Ohio. The lower courts quashed the service of the mining company, not giving a reason. The court of appeals affirmed, as did the Supreme Court of Ohio. Perkins argues that the federal due process compels the state to open its courts to her action.

4. Issue: Whether the 14th amendment due process clause compels a state court to exercise jurisdiction over a foreign corporation which has sufficient nexus with the state.

5. Holding: No.

6. Reasoning: In accordance with Int'l Shoe, the amount and kind of activities which must be carried on by the foreign corporation in the state of the forum so as to make it reasonable and just to subject the corporation to the jurisdiction of that state are to be determined in each case. Here, there is sufficient nexus to permit Ohio to exercise jurisdiction, where the cause of action arose from activities entirely distinct from its activities in Ohio. However, it would not violate due process for Ohio to either take or decline jurisdiction of the corporation.

** Gray v. American Radiator & Standard Sanitary Corp., (1961)

2. Facts: P. was injured by an exploding water heater in Illinois. The water heater was assembled in Penn. by D., and the valve that exploded was manufactured in Ohio by Titan. The water heater was sold in Illinois. Titan had no contacts in the state of Illinois except that its valves were used on water heaters sold to customers there.

3. Procedural Posture: D. cross-claimed against Titan for indemnification under warranties. Titan moved to dismiss the claim and the cross-claim for lack of jurisdiction over the person. The trial court granted the motion, and the P. appeals.

4. Issue: 1. Whether a tortious act was committed in Illinois within the meaning of the Illinois jurisdictional (long-arm) statute, and 2. whether the statute, if so constructed, was consistent with due process.

5. Holding: Yes.

6. Reasoning: Although the valve was manufactured out of state, a "tortious act" plainly refers to conduct that results in an injury, thus being inseparable from the injury itself. Thus, the place of the wrong is the last place where an event takes place which is necessary to render the actor liable. Here, that was the explosion which occurred in Illinois. Also, since the statute of limitations is measured from the time of the injury, then it makes sense to fix the place of the tortious act in the place of the injury. There is legislative history indicating that the legislature meant to go to the limits of the due process clause. With regard to due process, it is a reasonable inference that Titan's valves are frequently and substantially used in the state of Illinois. As such, there is sufficient basis for jurisdiction.

7. Notes: In Longines-Wittnauer Watch Co. v. Barnes & Reinecke, Inc., (1965), the New York court of Appeal rejected the view that a "tortious act" under the New York long-arm statute could include acts committed outside the state which resulted in injury within the state. However, the next year, the legislature expressly amended the statute to provide for such jurisdiction, indicating that they wished to go to the limits of the due process clause. Note that due process still requires that the cause of action must arise from the conduct, and that the person has some regular activity in the state.

** Cook Associates v. Lexington United Corp., (1981)

2. Facts: Cook is a headhunting firm that provided a recruiting lead to Lexington. The applicant declined the offer. There was a statement in the letter from Cook to Lexington recommending the applicant that Cook would be paid 20% of the applicant's salary if he was hired within 2 years. The agent at Cook then left and formed her own headhunting agency, where she recommended the applicant to Lexington for a different job, and he accepted the offer. Cook is an Illinois corporation. Lexington is a Delaware corporation not licensed to do business in Illinois, and with its principle place of business in St. Louis, Mo. Lexington has attended three trade shows in Illinois, where it solicited $50,000 of business.

3. Procedural Posture: Cook filed suit in Illinois for the payment of the headhunting fee. Lexington made a special appearance to object to in personam jurisdiction, but its motion to quash service was denied. The court of appeals reversed. Lexington argues that the requirements of the statute were not satisfied because the action did not arise from "the transaction of any business" by Lexington in Illinois. Cook argues that the long-arm statute does not prohibit the acquiring of jurisdiction according to the "doing-business" doctrine, and that Lexington had sufficient "minimum contacts" to afford basis under due process.

4. Issue: Whether there was sufficient basis under the Illinois long-arm statute for in personam jurisdiction over Lexington.

5. Holding: No.

6. Reasoning: The due process clause merely represents the outer limits of a state's jurisdictional boundaries. However, the state statute is to be construed more narrowly so as not to be dependent on changing concepts of due process. Here, Lexington did not transact business in Illinois because no contract was formed when the applicant refused the offer [really?]. The long-arm statute and the doing business doctrines are not to be equated with the mere "minimum contacts" standard of due process. Lexington also did not do sufficient business in Illinois to satisfy the doing business doctrine.

** Mullane v. Central Hanover Bank & Trust Co., (1950)

2. Facts: New York has a common trust fund law that allows the principle from several different trusts to be pooled and managed as a unit [like mutual funds]. The Bank has such a fund, of which the assets are great, and of which some of the beneficiaries are clearly non-residents of the state of New York.

3. Procedural Posture: The Bank filed a petition with the court to "settle" the account of the common trust fund [foreclosing any beneficiary from bringing an action for negligent management of the common fund for the period covered by the settlement, i.e. providing finality]. In compliance with state law, the Bank published notice of the action in the newspaper. It did not attempt to make any personal service of any beneficiaries, either local or non-resident. Counsel for the beneficiaries made a special appearance to object to in personam jurisdiction, which was denied, and affirmed.

4. Issue: Whether the court had jurisdiction to settle the account even though many beneficiaries were non-residents who were not personally served.

5. Holding: Yes.

6. Reasoning: This case has both an in rem nature [in that the rights to the trust are involved], as well as an in personam nature [in that the right of the beneficiary to sue is involved]. However, regardless of the technical nature of the action, the 14th amendment due process requirements do not depend on the classification of the action being in rem or in personam. The interest of the state in providing means to close trusts that exist only under state law is so rooted in custom as to establish beyond a doubt the right of its courts to determine the interests of all claimants, resident or non-resident, provided its procedure accords full opportunity to appear and be heard.

** Hanson v. Denckla, (1958)

2. Facts: Mrs. Donner purported to create a trust in Delaware naming Wilmington Trust Co., a Delaware corporation, as trustee. Mrs. Donner reserved a life estate in the corpus of the trust, and the power to appoint the remainder either by will or by inter vivos instrument. Mrs. Donner then executed a will which had a residuary clause, and also appointed the remainder to her grandchildren, Donner Hanson and Joseph Winsor who were the children of her executrix daughter, Mrs. Hanson.

3. Procedural Posture: At Mrs. Donner's death, her other daughters Mrs. Denckla and Mrs. Stewart, both Florida residents, brought a declaratory action in Florida to determine who was entitled to the trust. Both Donner Hanson and Joseph Winsor were personally served, and the Trust Co. was notified by regular mail and by publication in a local newspaper. The trust co. did not make an appearance, and the Florida court found that the trust was invalid, and so the corpus of the trust passed by the will to Mrs. Denckla and Mrs. Stewart. Meanwhile, Mrs. Hanson was bringing a declaratory action in Delaware. All of the non- resident defendants (who were the same as in the other action) were notified by registered mail. After the Florida decree, Mrs. Stewart unsuccessfully urged res judicata The Delaware court refused to give the Florida judgment full faith and credit, and instead came to the opposite conclusion that the trust funds passed pursuant to the appointment. Both state supreme courts affirmed their respective lower court rulings.

4. Issue: 1. Whether the Florida court erred in holding that it had jurisdiction over the non resident defendants, and 2. Whether the Delaware court erred in refusing full faith and credit to the Florida judgment.

5. Holding: 1. Yes. 2. No.

6. Majority Reasoning: The Florida court did not have jursidiction by way of in rem jurisdiction because of two reasons: 1. the property (the trust) was not located in the state of Florida, and 2. the will, although drafted in Florida and probated there, was an instrument under which the property only might pass, not under which it was sure to pass. In fact, that was the very issue. Also, the decedent's domicle was not sufficient basis for in rem jurisdiction because the locus of a trust is not necessarily the locus of the trustor. In regards to in personam jurisdiction, the Trust Co. did not have sufficient "minimal contacts" within Florida to sustain jursidiction. No business was conducted there, and no assets were there. The unilateral execution of assignment of the trust by the decedent may have been sufficient to establish a choice of law rule, but not sufficient to establish personal jurisdiction. It is the validity of the trust itself and not of the appointment that is in issue. The Turst co. never purposefully availed itself of the privilege of conducting activities within the state of Florida, thus invoking the protection of its laws, and thus does not have an obligation to submit itself to personal jurisdiction there. Since the Florida law requires personal jurisdiction over the trust company to adjudicate the dispute, and it does not have it, the Florida judgment must be reversed.

7. Dissent Reasoning: The appointment was made in Florida. The litigants lived in Florida. Thus, the Florida court has a sufficient interest and the power to determine whether the appointment was effectual.

** Shaffer v. Heitner, (1977)

2. Facts: Hietner is a stockholder of Greyhound Lines, and Shaffer is an officer of Greyhound who has a large amount of stock. Apparently, Greyhound lost an anti-trust suit and were held liable for a large criminal contempt judgment. Greyhound is a Delaware corporation with its principle place of business in Arizona. None of its officers are residents of Delaware. Delaware has a statute that provides that stock of Delaware corporations is located in Delaware. Delaware also has a quasi-in rem jurisdictional statute that allows a plaintiff to attach in-state property in order to compel a general appearance by the defendant.

3. Procedural Posture: Heitner brought a stockholder derivative suit in Delaware state court, and seized a large amount of stock of Greyhound belonging to the defendant officers. All of the D. officers were served by certified mail. D.s made a special appearance to quash service and free their assets, but the trial court denied. The Delaware state supreme court affirmed jursidiction, holding that the "minimum contacts" requirement of Int'l Shoe did not apply because they were exercising quasi in-rem jurisdiction and not in personam jurisdiction.

4. Issue: Whether the standard of fairness and substantial justice set forth in Int'l Shoe should be held to govern quasi in rem actions as well as in personam actions.

5. P. Argument: The "minimum contacts" requirement of Int'l Shoe did not apply because they were exercising quasi in-rem jurisdiction and not in personam jurisdiction. Even if it does, the D.'s positions as officers in a Delaware corporation provide sufficient minimum contacts with Delaware to give in personam jurisdiction. The state's interest in supervision of its corporations is strong.

6. D. Argument: The Delaware sequestration statute as applied in this case violates due process because it permits the state courts to exercise jurisdiction despite the absence of sufficient contacts between the defendants, the litigation and the state of Delaware.

7. Holding: Yes.

8. Majority Reasoning: Pennoyer's territorial boundary test, which provided for quasi in rem jurisdiction solely due to the presence of property in the state (because it only "indirectly" affected the rights of the person), is outmoded. It also leads to arguments over whether the action is one in personam or quasi in rem. Since an in rem or quasi in rem action is really just a proceeding against the rights of a person, and therefore against the person himself, it should also be subject to the Int'l Shoe minimum contacts standard. Of course, the presence of property in the state may bear on the existence of minimum contacts, especially where the underlying claim arises from the existence of the property. Thus, many in rem actions and quasi in rem type 1 actions would not be affected by requiring minimum contacts. However, for quasi in rem type 2 actions, such as that in Harris v. Balk, the presence of property alone would not support jurisdiction absent other ties to the state. This does not allow a defendant to avoid payment of his obligations by moving his property out of state, because the P. could still obtain a judgment in another state and it would be valid in the state where D.'s property lies under the Full Faith and Credit clause. Lastly, these officers do not have minimum contacts with Delaware because they have never been there and only own property there because of the statute. They can not be said to have implied consent to submit to in personam jurisdiction. The state does not acquire jursidiction over a non-resident just because it is the center of gravity of the litigation. Any interests that Delaware has in controlling its corporations are only of concern for choice of law, not for determination of in personam jurisdiction.

9. Concurrence Reasoning: [Stevens] One who purchases stock shares on the open market can hardly be expected to know that he has thereby become subject to suit in a forum remote from his residence and unrelated to the transaction. However, there are in rem actions that probably should not be affected by this judgment, such as those involving real estate.

10. Dissent Reasoning: [Brennan] As a general rule, a state forum should have the jurisdiction to adjudicate a shareholder derivative action centering on the officers of that corporation. The strong interests of the state should be considered when determining jurisdiction because of the practical consideration of the strong relationship between choice of law and jurisdiction. Furthermore, since jurisdiction can rest on out- of-state actions that have an in-state effect (i.e. Gray v. Amer. Radiator), the officers of a corporation should be subject to jurisdiction in the incorporating state when they damage the corporation by breaching fiduciary duties. Also, the officers have "invok[ed] the benefit and protection of [Delaware's] laws."

11. Notes: 1. After the decision, the Delaware legislature passed a statute providing that a non-resident's acceptance of a directorship in a Delaware corporation would be deemed consent to the appointment of an in-state agent for service of process for shareholder derivative actions [the fiction of consent], provided registered mail notice is also given. 2. In Atkinson v. Superior Ct., the employees of various entertainment industry companies brought an action to declare the collective bargaining agreement made by their union, AFofM, as void. The agreement provided that periodically, certain royalty payments should be made to a New York trustee, instead of to them. They sued in CA state court to get a preliminary injuction to prevent the payments to the trustee. All of the parties were in CA, except the trustee, who was served in New York, but made no appearance. The CA supreme court held that the court had jurisdiction to adjudicate the trustee's right to receive payments under the collective bargaining agreement. 3. In Kulko v. Superior Ct., the supreme court held that a CA state court did not have jurisdiction over a divorced father in New York for a child support action, even though his wife and children were in CA, because it was not "reasonable" and "fair" to require him to defend in CA, even though CA had a strong interest in protecting the wife and children.

** Rush v. Savchuck, (1980)

2. Facts: Rush was the driver of a car that Savchuk was a passenger in. Rush crashed the car in Indiana while both Rush and Savchuck were Indiana residents. However, Indiana had a guest statute that prevented Savchuck from suing Rush. Rush had an insurance policy with State Farm obligating them to defend and indemnify Rush. Savchuck moved to Minnesota where they had no guest statute, and where State Farm was actively doing business.

3. Procedural Posture: Savchuck brought a quasi in-rem action against Rush by garnishing the insurance policy's obligation to defend and indemnify, under a Minnesota statute based on the Seider v. Roth theory. Rush moved to dismiss for lack of terretorial jurisdiction. The trial court denied the motion and the state supreme court affirmed the existence of quasi in rem jurisdiction.

4. Issue: Whether there is sufficient nexus between Rush and the forum state of Minnesota to get quasi in rem jurisdiction over Rush.

5. Holding: No.

6. Reasoning: This action is not really quasi in rem. In any event, a constitutional test applies under Shaffer. Here, Rush does not have any contacts with the state of Minnesota. Thus, it is unfair and unreasonable to require him to defend his interests of reputation and insurability in Minnesota.

** World-Wide Volkswagen Corp. v. Woodson, (1980)

2. Facts: P.'s purchased an Audi in New York from a local retailer. P.'s were badly injured when the car exploded upon being hit from the rear during a trip through Oklahoma. The local retailer and his distributor do no business in Oklahoma. Their only connection with Oklahoma was that they sold the car to the plaintiffs who had an accident there.

3. Procedural Posture: P.'s brought a products liability action against all members of the manufacture and distribution chain of the car under an Oklahoma Long Arm statute which provides for in personam jurisdiction over a non-resident if they cause tortious injury in the state "by act or omission outside this state" and if he "derives substantial revenue from goods used or consumed" in the state. The defendants made a special appearance to object to jurisdiction, but their motion was denied. The P.'s argument was that it was foreseeable that the car would be driven in Oklahoma (because it is mobile), and that the defendant derived substantial revenu from cars driven in Oklahoma.

4. Issue: Whether sufficient basis exists to subject the defendants to in personam jurisdiction in Oklahoma consistent with due process.

5. Holding: No.

6. Majority Reasoning: The minimum contacts rule of due process serves two functions, it prevents unfair burdening of the defendant, and it ensures that the states do not reach out beyond their authority. It must be reasonable to subject the defendant to in personam jurisdiction in the forum court. The burden on the defendant, the state's interests, the plaintiff's interests, and the shared federal interest of the other states are all relevant factors. Although the expansion of personal jurisdiction has progressed, it has not gone so far as to apply to a person who has no contacts with the state. Here, the defendants have absolutely no contacts whatsoever. Mere foreseeability of injury in the forum state is insufficient because that would in effect make every seller amenable to suit wherever the chattel traveled, by unilater activity, resulting in extreme unpredictability. That is not to say that a manufacturer who delivers products into the stream of commerce with the expectation that they will be consumed in the forum state is immune, but that is not the case here. There was no reason to believe that the defendants sought to receive any protection under the Oklahoma laws, or any revenue from sales of cars used in Oklahoma.

7. Dissent Reasoning: [Brennan] The court reads Int'l Shoe too narrowly. The state's interest is relevant, and is strong here. Also, the inconvenience to the defendant is very small given the modern world. Int'l Shoe should be read to allow consideration of other interests when the unfairness (i.e. inconvenience) to the defendant is small. All of the witnesses, the plaintiff and the underlying accident are in Oklahoma. There can be no violation of due process if the defendant suffers no inconvenience in defending an action that arose in the forum state. The requirement should merely be that there are minimum contacts between the parties, the transaction, and the forum state. There is presently too much focus on the rights of the defendant.

** Burger King Corp. v. Rudzewicz, (1985)

2. Facts: Rudy, a Michigan citizen, negotiated a franchise agreement with Burger King, a Florida corporation with its principle place of business in Florida. The contract provided that Rudy would pay certain fees, and that Florida law would apply in construing the contract. Rudy subsequently defaulted on the contract.

3. Procedural Posture: Burger King brought a diversity action in Florida, and served Rudy in Michigan by invoking, under Rule 4(e), a Florida long-arm statute that provides for in personam jurisdiction for claims arising from breach of contract in Fla. by failure to perform acts contracted to be performed in Fla. Rudy sought unsuccessfully to dismiss for lack of jurisdiction, and lost the suit. The court of appeals reversed.

4. Issue: Whether there were sufficient minimum contacts for in personam jurisdiction in Florida.

5. Holding: Yes.

6. Reasoning: The due process clause is primarily a protection of an individual's liberty interest in not being subjected to binding judgments in a forum to which he has no meaningful contacts. It provides predictability and foreseeability of where the defendant will render himself liable to suit. It does not represent a restriction on judicial power as a matter of federalism or sovereignty [power test]. Thus, if the claim arises out of the in-state activity, it is presumptively reasonable for a state to reach out past its territory to exert specific jurisdiction over a person who purposefully establishes contacts with in-state citizens, and avails himself of the privilege of conducting activities in that state, because the state has a manifest interest' in providing convenient remedies for its citizens. Additionally, once it has been established that there are minimum contacts, the court may also consider other factors to determined whether the exercise of personal jurisdiction would comport with fair play and substantial justice', such as the interests of the state, the plaintiff, and the judicial system. These considerations sometimes serve to establish jurisdiction upon a lesser showing of minimum contacts. In this case, Rudy clearly made purposeful contacts with the state of Florida and agreed to be subject to Florida law concerning the contract. Thus it is not unreasonable that he be subject to personal jurisdiction in Florida.

** Asahi Metal Industry Co. v. Superior Court, (1987)

2. Facts: A motorcyclist was injured when his back tire exploded.

3. Procedural Posture: The motorcyclist sued the Taiwanese manufacturer of the tire, who impleaded the Japanese manufacturer of the valve stem. The main claim settled, and Asahi objected to personal jurisdiction, having no other contacts with California other than the Taiwanese tire manufacturer had sold many tires which included their valve stem in California. The California state supreme court upheld jurisdiction under the California long arm statute and due process.

4. Issue: Whether the California state court may exercise personal jurisdiction over the foreign corporation under these facts.

5. Holding: No.

6. Reasoning: Power over the defendant might exist because he put his goods into the stream of commerce, knowing that they were sold in California, and with the purpose that they be sold in California. However, it would be unreasonable to subject the defendant to in personam jurisdiction in California considering the severe burden to the defendant, and the weak plaintiff and state interests in adjudicating in California, since this was only a spinoff indemnification action from the main suit which had already settled.

** Burnham v. Superior Court, (1990); pg. 71 Supp.,

2. Facts: Burnham and his wife separated in New Jersey, and she took the kids to California. Burnham continued to reside in New Jersey, but made a few visits to California for business, and to visit his children. During one of those visits, he was served with divorce papers by his wife.

3. Procedural Posture: Burnham made a special appearance to quash service on the grounds of lack of personal jurisdiction due to insufficient "minimum contacts." The California court held that physical presence in the state combined with personal service was a sufficient basis for jurisdiction, regardless of the level of contacts Burnham had with the state.

4. Issue: Whether the "minimum contacts" requirement of Int'l Shoe precludes a state from acquiring in personam jurisdiction over a non- resident defendant who is personally served while transiently physically present within the state.

5. Holding: No.

6. Majority Reasoning: [Scalia] Int'l Shoe merely served to cast aside the fictions of consent and presence of a non-present non-resident, holding that due process does not necessarily require the states to adhere to the unbending terretorial limits on jurisdiction as set forth in Pennoyer. "Minimum contacts" may take the place of physical presence. However, it is illogical to assume that now physical presence is not sufficient. It is traditional that physical presence be sufficient, and so it satisfies due process. There is no need to apply any contemporary due process analysis to physical presence basis for jurisdiction, because it is validated by its own pedigree.

7. Concurrence Reasoning: [Brennan] The court must perform contemporary due process analysis on physical presence because all exercises of in personam jurisdiction must meet the Int'l Shoe standards. However, physical presence in a state, because of its long tradition, gives a defendant adequate notice that he is subject to risk of litigation in that state. The transient defendant takes advantage of the protection of the state, even if he is only transiently present. However, it may be possible under certain fact situations, such as mistake or fraud, that physical presence is not sufficient.

** DeJames v. Magnificence Carriers, (1981)

2. Facts: P. was injured while working aboard a merchant vessel docked in New Jersey.

3. Procedural Posture: P. sued the shipyard in Japan which converted the ship from an auto carrier, claiming that the conversion work was defective and the direct cause of his injuries. The defendant shipyard was served in Japan, and moved to dismiss for lack of personal jurisdiction, claiming that it has insufficient contacts with the state of New Jersey, given that it has never done any business in New Jersey.

4. Issue: Whether a federal court sitting in New Jersey may acquire in personam jurisdiction over a non-resident defendant in an action arising out of a federal question, when the basis for in personam jurisdiction is a state long-arm statute, and where the defendant does not have minimum contacts with the state of New Jersey.

5. Holding: No.

6. Reasoning: The standards of due process set forth in Int'l Shoe apply in federal question cases in federal court as well as in state courts. Here, the defendant does not have sufficient minimum contacts with New Jersey. Furthermore, its level of national contacts may not be aggregated to determine due process sufficiency in this case, because the basis for jurisdiction arises from a state long arm statute. The FRCP place a limit on the reach of the federal court's jurisdiction, namely that when substituted service is made pursuant to a long arm statute, the service may be made "under the circumstances and in the manner prescribed in the statute." Thus, where service of process is effected by means of a state statute, a federal court is forced to look to the state in which the district is located to determine whether jurisdiction may be asserted over an out-of-state defendant. Although the New Jersey long arm statute has been construed to the limit of due process, it has not exceeded due process, and so the lack of minimum contacts with the state of New Jersey is fatal to this case. Were this a case where service could be effected through wholly federal means, such as by a nationwide service statute, then the outcome may have been different.

7. Notes: In Omni Capital, the Supreme Court held that absent consent, there must be authorization for service of summons on the non-resident defendant. Since the defendant did not have sufficient contacts with the state of Louisiana, and thus were beyond its long-arm statute, there was no authorization for service, even for federally created claims, and despite the defendant's extensive contacts with the rest of the United States.

** Livingston v. Jefferson, (1811)

2. Facts: Jefferson took some dirt from Livingston's land in New Orleans on the bank of the Mississippi river. Jefferson is a resident and citizen of Virginia.

3. Procedural Posture: Livingston brought a trespass action in the federal district court in Virginia, where Jefferson lived. Jefferson objected to venue.

4. Issue: Whether the district court sitting in Virginia may exercise jurisdiction over a trespass action that occurred outside of the district, even though the defendant is a resident of Virginia and is personally served there.

5. Holding: No.

6. Reasoning: The common law rule that came from England requires that a local jury try issues that are local in nature. By definition, a land action for trespass is local in nature because of the nature of the land. Other actions, such as contracts, are transitory in nature could take place anywhere, and do not depend on the peculiarities of the local area. As such, a fiction is created which makes them capable of being tried in any venue. Although there is a strong consideration for providing a remedy for an injured victim, and there certainly is jurisdiction over the person of Jefferson, there is improper venue because there have been no statutory changes to the common law local action doctrine.

7. Notes: In Casey v. Adams, the Court held that local actions are in the nature of suits in rem and are to be prosecuted where the thing on which they are founded is situated, thus allowing commencement of a suit where a property was located even though the special venue statute was not satisfied. Also, in Ellenwood v. Marietta Chair Co., the Court held that a trespass action for the cutting down of trees in a West Virginia forest could not be maintained in Ohio, even though the defendant was an Ohio resident, under the local action doctrine. However, in Stone v. United States, the Court held that an action to recover the value of lumber made from the plaintiffs trees in Idaho could be maintained outside of Idaho because the claim was conversion and not trespass, and thus not a local action.

** Gulf Oil Corp. v. Gilbert, (1947)

2. Facts: Negligence action for allowing P.'s warehouse in Virignia to burn. P. is a Virginia resident. D. is a Pennsylvania corporation qualified to do business in both Virginia and New York.

3. Procedural Posture: P. brought suit in the federal district court in New York. D. sought dismissal under the doctrine of forum non-conveniens claiming that Virginia was the appropriate location for trial since it was amenable to suit there, and all of the evidence and witnesses were in Virginia.

4. Issue: Whether the action should be dismissed from the New York federal district court under the doctrine of forum non conveniens given the facts of the case, even though in personam jurisdiction and venue are proper.

5. Holding: Yes.

6. Reasoning: The doctrine is one of discretion of the court. However, the interests of the plaintiff, the defendant and the forum state in the litigation need to be considered. Here there is no strong interest for any party to have the litigation in New York. In fact, the interests weigh against it. The P. may not choose an inconvenient forum to harrass the D.. Also, the state has an interest in avoiding overcrowding of its own courts and subjecting its citizens to jury duty in a case having no ties to their state.

7. Notes: In 1948, Congress enacted 28 U.S.C. 1404(a) which changed the remedy from dismissal to transfer to a convenient forum. Note that a plaintiff may also invoke 1404(a) to transfer if the only place he could get venue and jurisdiction was inconvenient.

** Hoffman v. Blaski, (1960)

2. Facts: P. brought an action against D., and D. successfully moved to transfer to a more convenient district. However, the transferee district was not a place where the defendant was previously subject to service, and did not have proper venue at the time the P. brought the action [i.e. the defendant made some affirmative act to move to the new district or conduct business there, or perhaps merely waived venue and service].

3. Procedural Posture: The cicruit court granted mandamus, ruling that 1404(a) did not authorize the transfer.

4. Issue: Whether a defendant may seek transfer to a more convenient forum after commencement of the action if the transferee forum was not one where the P. could have initially brought the action.

5. Holding: No.

6. Majority Reasoning: 1404(a) clearly states that the transfer may only be to a more convenient forum "where it might have been brought", not "where it may now be rebrought with the defendant's consent." Thus, the conduct of the defendant after the commencement of the suit may not add to the permissible forums. Otherwise, the defendant would then have more power over the forum than the plaintiff, because then the defendant could theoretically move the action anywhere, even though the plaintiff could only move it where the defendant agreed, which would lead to discrimination and harassment. Thus, the action may only be transferred to a location where the P. had an unqualified right to bring it in the first place.

7. Dissent Reasoning: There is more than one possible interpretation of the words "where it might have been brought." The phrase may refer to venue, amenability to service, period of limitations, or any number of other things. To restrict the number of places where the action can be transferred to is to restrict the number of situations where 1404(a) may serve the interests of justice.

** Van Dusen v. Barrack, (1964)

2. Facts: Several P.s brought wrongful death actions in a federal district in Pennsylvania against an airline for a crash in Massachusetts shortly after takeoff, enroute for Pennsylvania. There was a significant difference in the substantive law between the states. Pennsylvania had no limit on the amount of compensatory damages for these types of actions, but Massachusetts did have a $20,000 limit.

3. Procedural Posture: The D. successfully moved to transfer the actions to Massachusetts. P. then brought a mandamus action to vacate the transfer order on the grounds that although jurisdiction and venue were proper in Mass., it was not a district where the action "might have been brought" because the P.s were not qualified to bring suit there due to technicalities concerning their capacity to sue for wrongful death there.

4. Issue: Whether 1404(a)'s "where it might have been brought" must be construed with reference to the federal laws delimiting the district in which jurisdiction and venue are proper, without regard to laws concerning the capacity of fiduciaries to sue.

5. Holding: Yes.

6. Reasoning: There is nothing in 1404(a) to justify its use by defendants to defeat the advantages accruing to plaintiffs who have chosen a forum which, although inconvenient, was a proper venue. Thus, upon transfer of the action, the transferee court would be obligated to apply the substantive rule of the transferor state to avoid a significant affect on the outcome of the case. The change of venue should be just a change of courtrooms and not substantive law.

7. Notes: In Ferens v. John Deere Co., the supreme court held that the transferor law applies in a case where the statute of limitations of the transferor state allowed the action, but the transferee state did not, even though it was the P. who moved the case.

** Goldlawr, Inc. v. Heiman, (1962)

2. Facts: An action under the Sherman act.

3. Procedural Posture: The action was first brought, within the period of the statute of limitations, in a federal court in Pennsylvania. However, the D. was not subject to personal jurisdiction there. However, the court, instead of dismissing the case, transferred it under 1406(a) to a federal court in New York where venue and personal jurisdiction were proper. In the meantime, the statute of limitations had run. However, the New York court dismissed the action claiming that the Pennsylvania court did not have power to transfer because it did not have personal jurisdiction.

4. Issue: Whether the P.'s action should be defeated due to the statute of limitations running while the courts were busy transferring the case.

5. Holding: No.

6. Reasoning: The language of 1406(a) does not forbid a court from transfering a case, even if it does not have personal jurisdiction. There is a strong interest in providing a forum for a plaintiff who has shown a desire to commence it, regardless of the technicalities that may stand in the way of an expeditious and orderly adjudication of his case.

** Martin v. Stokes, (1980)

2. Facts: An automobile accident in Kentucky. P. is a Virginia resident. One D. is from Kentucky, and one from California.

3. Procedural Posture: P. brought suit in federal court in Virginia, and personally served the D.s in their home state [subject to long-arm statute?]. D.s moved to quash process, but the court refused, and transferred the case to Kentucky under 1406. D.s then successfully moved to dismiss on the basis of Kentucky's one year statute of limitations, even though the Virginia court would have applied a two-year statute of limitations.

4. Issue: Whether the transferee court is to apply its own state law or the state law of the transferor state.

5. Holding: Transferor law applies under 1404 [upon motion of a party], but transferee law applies under 1406 [by action of the court to cure a defective action].

6. Reasoning: 1404 and 1406 are mutually exclusive. 1404 applies when the transferor court is a proper forum, but 1406 applies when the transferor court cannot acquire personal jurisdiction although venue is proper.

** Piper Aircraft Co. v. Reyno, (1981)

2. Facts: A plane maufactured by Piper crashed in Scotland, killing all of the passengers, each of whom were Scottish. All of the evidence of the crash is in Scotland. Piper is a U.S. manufacturer, operating in Pennsylvania. The propeller manufacturer, Hartzell, was located in Ohio.

3. Procedural Posture: Reyno was appointed as the administratix of the estates of the five Scottish passengers, and she brought suit in the California State court for negligence and strict liability against Piper and Hartzell. Piper removed to the federal district court in California, and then transferred to federal court in Penn. Piper then moved for dismissal on the grounds of forum non-conveniens. The district court dismissed, but the court of appeals reversed and remanded, stating that the doctrine of forum non-conveniens could not be used to dismiss an action if it would result in the law of the new forum being less favorable to the P..

4. Issue: Whether the district court erred or abused its discretion in dismissing the case for forum non-conveniens.

5. Holding: No.

6. Reasoning: The proper standard for forum non-conveniens is the balancing test of Gulf Oil v. Gilbert. Although a P.'s choice of forum ordinarily deserves a strong presumption, it is given less deference if the P. is a foreign citizen. Although evidence concerning the design and manufacture of the plane are in the U.S., the connections with Scotland were "overwhelming." Piper properly asserted that the witnesses, and any third parties to implead, were beyond the reach of compulsory process. Also, the choice of law rules made this a very complex case. Any change in the law unfavorable to the P. was not strong enough of an interest given the counter-interests of the other parties. If an unfavorable change in the law were the decisive factor, then the doctrine would lose its flexibility, and also require more inquiry so as to be self- defeating. The Scottish interest in this case is very strong, and the American interest too weak to justify trying the case here.

** Mullane v. Hanover Bank & Trust, (1950)

2. Facts: New York has a common trust fund law that allows the principle from several different trusts to be pooled and managed as a unit [like mutual funds]. The Bank has such a fund, of which the assets are great, and of which some of the beneficiaries are clearly non-residents of the state of New York.

3. Procedural Posture: The Bank filed a petition with the court to "settle" the account of the common trust fund [foreclosing any beneficiary from bringing an action for negligent management of the common fund for the period covered by the settlement, i.e. providing finality]. In compliance with state law, the Bank published notice of the action in the newspaper. It did not attempt to make any personal service of any beneficiaries, either local or non-resident. Counsel for the beneficiaries made a special appearance to object to in personam jurisdiction, which was denied, and affirmed.

New York has a common trust fund law that allows the principle from several different trusts to be pooled and managed as a unit [like mutual funds]. The Bank has such a fund, of which the assets are great, and of which some of the beneficiaries are clearly non-residents of the state of New York.

3. Procedural Posture: The Bank filed a petition with the court to "settle" the account of the common trust fund [foreclosing any beneficiary from bringing an action for negligent management of the common fund for the period covered by the settlement, i.e. providing finality]. In compliance with state law, the Bank published notice of the action in the newspaper. It did not attempt to make any personal service of any beneficiaries, either local or non-resident. Counsel for the beneficiaries made a special appearance to object to in personam jurisdiction, which was denied, and affirmed.

4. Issue: Whether publication under the New York statute was sufficient notice to the class of persons owning interests in the common trust.

5. Holding: No.

6. Reasoning: Due process requires that notice be "reasonably calculated under all the circumstances to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." Thus, the means must be such that a person who actually desired to inform the absentee might reasonably use. Personal service is clearly sufficient, even if it lacks the compulsoriness of personal jurisdiction. Clearly, mere publication in a local newspaper is not reliable. Publication may be accompanied by other means to reinforce notice, such as attachment or seizure of property to make it sufficient. However, with respect to absentees whose interests or addresses are unknown, practical necessity requires that publication be sufficient. However, with respect to the income beneficiaries, their addresses are indeed known, and it is reasonable to include notice in the mail to them, either with or apart from the normal statements that are sent to them. Also, mail service to those of known address would be sufficient as to those of unknown address in a case like this because all of the parties belong to a greater class. As such, notice reasonably certain to reach most of the interested parties is likely to safeguard the interests of all because they all have overlapping mutual interests.

7. Notes: In Walker v. City of Hutchinson, the Court held that notice of condemnation proceedings published in a local newspaper was inadequate notice to a landowner whose name as in official city records. In Schroeder v. City of New York, the Court similarly held that publication notice was insufficient in a condemnation action where the names and addresses of the owners was readily ascertainable from both deed records and tax rolls. In Greene v. Lindsey, posting a summons on a tenant's door was inadequate notice of forcible entry and detainer actions. In Mennonite Board of Missions v. Adams, publication notice was insufficient to notify the mortgagee on a foreclosure action on a tax lien, even though the mortgagee had easy access to tax records and could have maintained a close watch to determine if the mortgagor had been paying his taxes.

** Sniadach v. Family Finance Corp., (1969)

2. Facts: Sniadach owed Family Finance $420.

3. Procedural Posture: Family Finance proceeded under a Wisconsin statute, in a Wisconsin state court, to serve a summons on Sniadach's employer, to garnish his wages. Under the statute, the D. must be served within 10 days, and if he wins, his wages are restored to him, but he is deprived of at least half of them in the meantime. D. moved to dismiss for failure of due process, but the Wisconsin state courts denied his motion.

4. Issue: Whether the Wisconsin state statute provides adequate due process for the garnishment of wages.

5. Holding: No.

6. Reasoning: The statute fails to provide notice and opportunity to be heard prior to garnishment of the wages, which are a "specialized type of property."

** Fuentes v. Shevin, (1972)

2. Facts: Fuentes bought a stove and stereo under an installment contract that provided for repossession of the property for failure to pay. Fuentes stopped paying.

3. Procedural Posture: The creditor brought a replevin action in the small claims court under a Florida state law providing for summary issuance of a writ of replevin upon application to the clerk of the court and posting of a bond for twice the value of the property. A D. could retain possession during the proceedings if she also posted a bond within 3 days, otherwise, the P. would retain possession during the proceedings. Fuentes challenged the replevin proceeding on due process grounds, and the state court denied relief.

4. Issue: Whether the Florida state replevin statute provides adequate due process.

5. Holding: No.

6. Reasoning: Notice and an opportunity to be heard are required before deprivation of a possessory interest in the property. The hearing should at least establish the probable validity of the underlying claim.

** Mitchell v. W.T. Grant Co., (1974)

2. Facts: Mitchell stopped paying for property that he bought on an installment contract from Grant.

3. Procedural Posture: Grant brought a sequestration action under Louisiana statute to remove the property during the pendency of the action. The statute provides that the P. must post bond, and sign affadavits in an ex-parte proceeding before a Judge, but that the D. may immediately move to dissovle the writ, and it must be dissolved unless the P. can prove the debt, lien and delinquency. Mitchell moved to dissolve the writ for failure of due process.

4. Issue: Whether the Florida state statute is consistent with due process.

5. Holding: Yes.

6. Reasoning: The statute balances the interests of the parties. Due process does not require that the D. have possession of the property during the pendency of the action, only that he have notice and an opportunity to be heard before deprivation.

** North Georgia Finishing, Inc. v. Di-Chem, Inc., (1975)

2. Facts: The Finishing Co. allegedly owes Di-Chem about $50,000.

3. Procedural Posture: Di-Chem brought an action under Georgia garnishment statute to garnish the bank account of the Finishing Co. The statute provides for application to a clerk of the court, combined with posting a bond, and an affadavit of anticipated loss. The D. may dissolve the writ only by posting bond. The Georgia state courts upheld the statute, distinguishing Sniadach on the grounds that it was limited to wages, and not mentioning Fuentes.

4. Issue: Whether the Georgia garnishment statute is consistent with due process.

5. Holding: No.

6. Majority Reasoning: The statute garnishes the bank account without notice or opportunity to be heard, or participation by a judicial officer. In contrast to Mitchell, which provided for application to a judge, and immediate dissolution of the writ upon D.'s motion unless the P. could prove the facts alleged in his affadavit, there are no such protections here. Here, the bank account is apparently unreachable for duration of the proceeding without posting of adequate bond, regardless of the validity of the claim. There is no reason to distinguish between the wages in Sniadach, and the bank account here, even if the D. is a commercial business rather than a person.

7. Concurrence Reasoning: [Powell] Procedural due process is satisfied where the statute provides for posting of a bond, application to a neutral officer, provision of an adequate factual basis for the writ, and a prompt post-garnishment hearing in which the garnishor has the burden of showing that the garnishment need continue.

8. Dissent Reasoning: Sniadach is distinguishable from the context of commercial business relations. The D. is adequately protected here because of his commercial nature.

** Connecticut v. Doehr, (1991); pg. 97 Supp.,

2. Facts: DiGiovanni and Doehr allegedly got into a fist fight.

3. Procedural Posture: DiGiovanni brought a personal injury action in the Conn. state court, and moved under Conn. statute to attach Doehr's house to the sum of $75,000. The statute provided that real property could be attached without prior notice and hearing if there is "probable cause" to find for the P., and there is some reason that the D. might not pay. The P. did not need to post a bond. The Superior court granted the attachment without notice, and Doehr brought a federal suit directly against DiGiovanni claiming that the statute was unconstitutional. The District Court denied relief, and the Court of Appeals reversed.

4. Issue: Whether the Conn. statute violates due process.

5. Holding: Yes.

6. Reasoning: Whether due process is met depends on a three part inquiry. First, the private interest that will be affected by the prejudgment measure; second, the risk of erroneous deprivation and the procedural safeguards; and third, the interest of the part seeking the judgment. Cloud on a title of property is a serious deprivation. Here, the standard of "probable cause" is too loosely defined to adequately protect the D. from erroneous deprivation of property. Although the statute also provides for expeditious post-attachment hearing (as was approved in Mitchell), this case (unlike Mitchell) does not lend itself well to a judge determining by documentary proof, whether the P. is likely to be entitled to judgment. An assault is too complicated and fact specific. Also, the P.'s interest is very low. He had no pre- existing interest in the property, and he made no allegation that he would not otherwise be able to obtain judgment. Lastly, the lack of a bond at the time of attachment is another procedural safeguard that is insufficient.

** D.H. Overmeyer v. Frick, (1972)

2. Facts: Overmeyer is the owner of a warehouse in which Frick contracted, under an installment contract, to build refrigeration. After many requests to renegotiate the contract, it was redrafted with a "cognovit" clause in which Overmeyer consented in advance to Frick being able to obtain a judgment without notice or a hearing. Overmeyer stopped paying.

3. Procedural Posture: Frick obtained a judgment without notice under th cognovit clause, and Overmeyer moved to vacate the judgment. The state courts overruled the motion to vacate.

4. Issue: Whether it is unconstitutional to waive in advance the right to present a defense in an action on a note.

5. Holding: No.

6. Reasoning: Due process rights to notice and hearing prior to a civil judgment are subject to waiver. Whether those rights have been violated is very fact specific. But here, it is clear that the parties had equal bargaining power in a commercial setting and that the contract was valid. Overmeyer is not remediless. It may still get a post-judgment hearing to bring out defenses, and may also bring a separate action for breach of contract against Frick.

** Williamson v. Columbia Gas & Electric Corp., (1951)

2. Facts: Williamson alleges violation of anti-trust provisions against Columbia Gas & Elec.

3. Procedural Posture: P. first brought an action alleging conspiracy under the Sherman act, but only naming Columbia as the D.. P. then brought an action not alleging conspiracy under the Clayton act, and likewise only naming D.. In action #2, P. stipulated that the acts occurred nlt a certain date, which turned out to be beyond the statute of limitations. Thus, action #2 was dismissed, and D. successfully won summary judgment in action #1 based on res judicata.

4. Issue: Whether the first action was barred by res judicata, even though the second action was brought later, alleged different facts, and was decided on the basis of a stipulation not made in the first action.

5. Holding: Yes.

6. Reasoning: The adjudication in favor of the defendant operates as a bar to another suit on the same cause of action in the same jurisdiction. The fact that the case was tried upon a stipulation of facts does not make it any less final. Action #1 and action #2 are substantially identical, even though one alleges conspiracy and the other does not. These actions both arise out of the same events. The policy behind res judicata is to end litigation. Everything that P. was entitled to ask for from D. in action #1 was included in action #2, and it was adversely decided.

7. Notes: In Smith v. Kirkpatrick, P. sued on a breach of contract theory, but it failed because of the statute of frauds. He then brought an action in quantum meruit, which was allowed to proceed on the ground that contract and quantum meruit are two actions involving different rights and different wrongs. Since cause of action was defined as the violation of a single right by a single wrong, the case was allowed to proceed. In O'Brien v. City of Syracuse, however, the court stated that the test for cause of action was whether the claims arose out of the same transaction or series of transactions. Thus, an action for de-facto taking that failed because the level of intrusion was not high enough to constitute a taking precluded a subsequent action, based on the same events, for mere trespass.

** Hennepin Paper Co. v. Fort Wayne Corrugated Paper Co., (1946)

2. Facts: Breach of a requirements contract that was allegedly ambiguously worded.

3. Procedural Posture: The P. pleaded, in a first action, allegations concerning contemporaneous negotiations that would indicate that the intent of the parties was for a minimum amount to be purchased each month. However, the trial court had these allegations stricken, and the case was tried without including parol evidence. The P. lost the first action. In a second action, the P. applied to have the contract reformed. The action was dismissed.

4. Issue: Whether the second action should be dismissed given that the remedy of reformation was available, but not pursued in the first action.

5. Holding: Yes.

6. Reasoning: The P. made an election of remedies in the first action and can not now change his position inconsistently. Where the party elects to sue upon a written contract as executed, and the action proceeds to trial and judgment, he can not thereafter bring an action to reform the contract. The P. should have amended his complaint to include the inconsistent claim for reformation under Rule 8(e)(2) and joinder of inconsistent claims under Rule 18.

** Sutcliffe Storage & Warehouse v. United States, (1947)

2. Facts: P. leased property to the Navy throughout four separate years, with each year having a renewal of a lease. P. claims that the Navy actually occupied more property than was covered by the lease.

3. Procedural Posture: P. brought a separate action to recover for the overage on each of the four leases. The amount of the overage was computed in exactly the same way for each lease, and each was less than $10,000. However, under a federal act, claims against the gov't for greater than $10,000 were required to be brought to the Court of Claims in Washington D.C. The D. successfully moved for dismissal of all but the first filed action.

4. Issue: Whether dismissal of all but the first action was proper.

5. Holding: Yes.

6. Reasoning: It is to the advantage of P. that these actions were dismissed, because a final adjudication of one of them would result in barring the others. It is well settled that an action on running accounts must include a claim for all amounts due at the time. Here, even though the owner's convenience in forum might be served by having the actions split into less than $10k and trying them locally, congressional policy is opposed to such splitting. Furthermore, the P.'s position depends on there being no leases covering the excess property used, thus he can not also claim that the existence of four separate leases separates his claim into four separate actions.

** Commercial Box & Lumber Co. v. Uniroyal, Inc., (1980)

2. Facts: P. and D. entered into a contract to deliver ammo boxes to a base in Illinois. However, after partial performance, D. moved the delivery location to Kansas. The contract also had a provision for discount if payments were made within 10 days of delivery.

3. Procedural Posture: The P. brought a first action to recover damages related to the change in delivery location, and won. It then brought a second action to recover for improper taking of discounts by D.. D. successfully moved to dismiss on the grounds of res judicata, since the action for improper discounts was available at the time of trial of the first action.

4. Issue: Whether two actions which arise out of the same contract, but otherwise have no relatedness of issues, must be tried together under the doctrine of res judicata.

5. Holding: no.

6. Reasoning: A second cause of action is the same as a first if it refers to all grounds for relief arising out of the conduct complained of in the original action. Here, the discounts do not arise out of the changing of the delivery location. Thus, the two actions are divisible and the grant of summary judgment on the basis of res judicata was erroneous.

** Harrington v. Vandalia-Butler Board of Education, (1981)

2. Facts: P. was discriminated against in employment by the D. school board.

3. Procedural Posture: P. brought a successful action under Title VII, which has limited remedies. Subsequently, the U.S. Supreme court ruled that 1983, which has more favorable remedies, would be available in a discrimination case against a public entity. Thus, P. brought a second action, this time under 1983. D. successfully moved for dismissal under res judicata.

4. Issue: Whether dismissal of an action for res judicata is proper even though there has been a favorable change in the law which opens up a new and more favorable theory of liability and remedy for the P..

5. Holding: Yes.

6. Reasoning: The suits under Title VII and 1983 were based on the same discriminatory acts. Since two actions can not be maintained on the same injury, even though based on different legal theories, the second claim is barred unless there is manifest unjustice. Thus, an erroneous decision which is exposed by a change in the law, will be deprived of finality only on direct appeal. Here, the general policy behind res judicata outweighs the unfairness to the P. for not being able to recover compensatory damages.

** Keidatz v. Albany, (1952)

2. Facts: Contract for the purchase of land. P. alleges that land is worth less than he paid for it.

3. Procedural Posture: P. brought an action for recission, to which the D. successfully demurred, and the P. failed to timely amend, resulting in judgment for D.. P. sought relief from judgment, which was denied. P. then brought this action for damages, and the trial court granted summary judgment on the basis of res judicata.

4. Issue: Whether res judicata acts to bar an action for damages on a contract, when a prior action for recission was brought, and where P. lost the first action by demurrer.

5. Holding: No.

6. Reasoning: A judgment on the merits will bar a future action on the same claim. A judgment based on failure to state a claim is a judgment on the merits to the extent that it will bar a subsequent action alleging the same facts as in the first pleading, or a subsequent claim having the same grounds for deficiency. However, if new or additional facts are alleged that cure the defect in the first pleading, the judgment on the pleadings will not be a bar to the subsequent claim, whether or not the P. failed to timely amend the first complaint. Since the P.'s first pleading did not allege damages, it does not bar a subsequent claim for damages if the first action was lost without a trial. Judgment on the pleadings does not have such a broad res judicata effect as a judgment after a full trial. Even though there are forceful arguments for requiring the P. to timely amend in the first action at the peril of res judicata (since the amendment rules are so liberal), the D. who wins on the pleadings does not suffer much prejudice by being required to defend a second action since the first action was disposed of summarily.

7. Notes: The Restatment (Second) of Judgments abandons this rule by providing that a judgment for insufficient of the complaint normally operates as a bar unless the court directs otherwise.

** Rinehart v. Locke, (1971)

2. Facts: P. was arrested by police, and he alleges violations of his civil rights.

3. Procedural Posture: P.'s first action was dismissed for failure to state a claim [failure to allege lack of probable cause]. P. sought leave to amend, which was denied. P. did not appeal. P. then brought a second action, including lack of probable cause in his complaint. The court sustained the defense of res judicata and dismissed.

4. Issue: Whether, when a first action is dismissed for failure to state a claim, and leave to amend is denied, a second action curing the defect in the complaint is nonetheless barred unless the first action was expressly not an adjudication on the merits as provided by Rule 41.

5. Holding: Yes.

6. Reasoning: The list of exceptions in Rule 41(b) types of dismissal which are not adjudications on the merits is not exclusive, but those that do operate as an adjudication on the merits are those "in which the defendant must incur the inconvenience of preparing to meet the merits because there is no initial bar to the Court's reaching them." Here, there is no initial bar to the court having to reach the merits of the case. This places the burden on the P. to persuade the district court either to include a specification that the dismissal is without prejudice, or to permit amending the complaint. If the plaintiff is unsuccessful, he may appeal.

7. Notes: Dismissal for failure to obey a court order or rule, or failure to prosecute will also act as an adjudication on the merits by operation of Rule 41(b) unless the judge indicates otherwise, and is only reviewable on appeal. The Restatment (Second) of Judgments 20 (like Rule 41(b)) provides for exceptions to the general rule of bar, including lack of jurisdiction, improper venue, non-joiner/mis-joinder, voluntary dismissal, prematurity of the claim, and by statutory authorization.

** Schwabe v. Chantilly, (1975)

2. Facts: Landlord (chantilly) alleges rent not paid by tenant (Schwabe). Tenant alleges that landlord fraudulently induced them to sign the lease.

3. Procedural Posture: The landlord brought a first action for non- payment of rent against the tenant, who set up the affirmative defense of fraud, but did not enter a permissive counterclaim based on fraud. The tenant won the first action, and then brought a second action to collect damages for fraud based on the actions alleged in the affirmative defense in the first action, but not counterclaimed. The trial court dismissed, holding that the failure to bring a counter claim in the first action, but to rely on the alleged fraud as an affirmative defense, barred the second action.

4. Issue: Whether failure to interpose an available permissive counterclaim in a first action in which the facts giving rise to the permissive counterclaim were used as an affirmative defense, bars a subsequent action by the original defendant against the original plaintiff for the available claim not originally asserted in the first action.

5. Holding: No.

6. Reasoning: The Restatment (Second) of Judgments 58 provides that "where the defendant does not interpose a counterclaim although he is entitled to do so, he is not precluded thereby from subsequently maintaining an action against the plaintiff on the cause of action which could have been set up as a counterclaim." Comment d to this section, covers the case at bar: "where the same facts constitute a defense to the plaintiffs claim and also a ground for a counterclaim...[and the defendant is successful]...he is not improperly splitting his cause of action, although he uses the same facts first as a defense to the plaintiff's claim, and later as the basis of an action against the plaintiff." However, if the defendant loses, the second action would be barred by operation of collateral estoppel, because the failure of the affirmative defense would have been essential to the first judgment (see comment c).

7. Notes: A "common-law compulsory counterclaim rule" applies in an action where the P.'s claim and the D.'s claim are related in such a way that if the D. were to prevail on his claim in any subsequent action, the effect would be to nullify the prior judgment. For example, in Horne v. Woolever, W sued H in state court for personal injury arising from an auto accident. H removed to federal court, and answered with a general denial, but no counterclaim. H then brought a reciprocal action in state court separately against W. When W settled his original claim against H, the parties stipulated that the original federal action would be dismissed with prejudice. This also acted as a bar against H's subsequent state action against W because the judge applied the res judicata effect of federal rule 13(a) [compulsory counterclaims] to H's state action, even though there was no comparable state statute requiring compulsory counterclaims.

** Dindo v. Whitney, (1971)

2. Facts: Dindo was driving Whitney's car, in which Whitney was a passenger. The car crashed while Dindo was driving.

3. Procedural Posture: W brought a personal injury action against D, but since D was insured under W's policy as having permission to drive, W's own insurance company was liable to W. D did not make any counterclaim. The case was settled for an amount within the policy limit. D then became aware that W might be liable to him as well, based on some new facts discovered. So D brought an action against W. The lower court dismissed the action on the basis that the failure to raise it as a counterclaim in the original action barred a subsequent action.

4. Issue: Whether the failure to raise a compulsory counterclaim in federal court under Rule 13(a) necessarily results in a bar of a subsequent action on whatever could have been pleaded in the compulsory counterclaim.

5. Holding: No.

6. Reasoning: The purpose of Rule 13(a) is to prevent a multiplicity of actions, all arising out of the same transaction. However, if the case is settled, the court has been less burdened and the parties can protect themselves by demanding cross-releases. If the D. knows of the existence of a counterclaim, and fails to raise it, then his subsequent action is barred by the action of collateral estoppel, regardless of whether the claim was settled, or a full trial on the merits was held. That is to say that a final judgment is not the sine qua non of a bar. However, lesser facts might five rise to some exception to the general rule of bar in an inequitable situation, such as the one here where the insurance company was representing a D. having a conflict of interest. Thus, the case should be remanded.

** Little v. Blue Goose Motor Coach Co., (1931)

2. Facts: Dr. Little's car and a Blue Goose bus collided, doing damage to the bus, and injuring Dr. Little.

3. Procedural Posture: Blue Goose brought an action against Dr. Little for damage to the bus, and won. The appeal was dismissed for failure to prosecute. During the pendency of the first suit, Dr. Little commenced an action against Blue Goose for personal injuries, and then died. His executrix was substituted as P., and she amended the claim to allege wrongful death, and willful and wanton negligence [to which contributory negligence is not a defense]. Blue goose plead the defense of issue preclusion, and lost.

4. Issue: Whether an issue essential to the judgment in a first action is precluded from reconsideration in a second action if the parties to the second action were in privity with the parties in the first action.

5. Holding: Yes.

6. Reasoning: It does not matter that the new action is for wrongful death, or that the new plaintiff was not Dr. Little. The issue that was the basis for the first action was whether Dr. Little was negligent. That issue was conclusively determined in the first action, and was only available for review on direct appeal. Thus, when the appeal was lost for failure of prosecution, it became a final determination of that issue between all of the perons in privity with either of the parties, whether upon the same claim or different claims. The fact that a willful negligence claim is brought, to which contributory negligence is not a defense, does not matter, because in the first action, by determining that Dr. Little was liable for the damages, the court necessarily determined that the bus company was not wilfully negligent.

7. Notes: The scope of the issue previously determined is a source of litigation. However, generally, if A brings a negligence action against B alleging excessive speed, and loses, he is later barred from setting up B's negligence as an affirmative defense in a subsequent suit by B against A [must assume no compulsory counterclaim rule] even if it is based on something other than excessive speed because A is required to bring all grounds for negligence forward in his first action.

** Jacobson v. Miller, (1879)

2. Facts: Jacobsen allegedly leased a property to Miller who allegedly did not pay rent because he allegedly did not occupy the premises at the time of the lease.

3. Procedural Posture: Landlord successfully brought a first action for rent, and tenant did not defend that the lease was invalid. Landlord then brought a second action for rent on a later period that had not matured at the time of the first action, and the tenant raised the defense that the lease was invalid. The landlord successfully moved for summary judgment as to that issue based on the tenant's failure to raise it in the first action.

4. Issue: Whether a tenant must bring forward the defense of invalidity of a lease in a first action brought by the landlord, or lose it forever with respect to subsequent actions maturing later.

5. Holding: No.

6. Reasoning: Various considerations, other than the actual merits, may govern a party in bringing forward grounds of recovery or defense in one action, such as smallness of the value of the property, the cost of defending, as well as the difficulty in obtaining evidence. A party acting upon these considerations should not be precluded from bringing these defenses forward in a subsequent action.

** Cambria v. Jeffery, (1940)

2. Facts: Auto accident. Cambria is the owner of one of the vehicles, and Jeffery the driver of the other.

3. Procedural Posture: First, Jeffery brought an action for personal injury against Cambria, and lost due to contributory negligence. However, in the judgment, the judge as the trier of fact stated that "Defendant [Cambria] was clearly negligent." Then Cambria brought an action against Jeffery for damage to its car. The action was tried to a jury who found for Cambria, but the judge set aside the verdict and entered judgment for Jeffery based on contributory negligence of Cambria as stated in the judge's findings in the first case.

4. Issue: Whether a fact merely found in a case becomes adjudicated only when it is shown to have been essential to the judgment in the prior action.

5. Holding: Yes.

6. Reasoning: The issue adjudicated in the first action must have been a basis for the relief, denial or relief, or other ultimate right established by the judgment. Here, the earlier judgment rested solely upon Jeffery's contributory negligence. The fact that the judge also found Cambria negligent was not conclusive in this later action because it was not essential to the prior judgment.

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