Civil Procedure Spring Outline 2004
Lonnie Brown
1. Subject Matter Jurisdiction in a Dual Court System
- Erie problem - when a fed district court has subject matter jxn based on diversity, what law applies to dispute
- 1st place to look is Rules of Decision Act
- if there is state law, then the state law should apply
- if there is no law on a given issue, then the laws of several states will govern
- sources of law that could be “laws of several states” - historically
1. Federal law
- fed statutes, Constitution, treatises, etc
2. General law
- nationwide common law - a general legal principle that is somewhat accepted
- this was prevalent with regards to commercial law issues
3. State law
- state statutes, made by legislatures, positive law
- can also be judge made common law
- federal law will take priority over state or general law when fed law exists - per supremacy clause
a. Governing Law in a Diversity Case
i. Swift v Tyson
- whether fed courts had to follow local or state law when there was a
rule of general law that was also capable of serving as the rules of
decision
- facts - Tyson wrote bill to x and y, x and y endorse not to Swift;
Swift is trying to get paid
- under NY state law, Tyson would be excused
- under general law, this wouldn’t be a defense and Tyson
would have to pay
- Sup Ct said that general law should be followed
- how is this holding reconciled with the Rules of Decision
Act?
- Sup Ct says that RDA applies only to statutes
- when a judge decides common law, he’s merely describing
his interpretation of what the law is, not creating law
- fed judges shouldn’t be bound to follow a state judge’s
interpretation of what the law should be on the particular issue
- here, Sup Ct stepped in and stated what the law was, contrary to NY
common law
- by doing this, the court created federal general common
law
- after Swift, all fed courts - not just Sup Ct - had authority to
make federal general common law
- law of several states - wouldn’t be subject to RDA - so not subjecct
to general laws - law of several states include:
- things that are peculiarly local
- state and local laws
- judges interpreting local laws
- this holding became troubling to some people
- since it shows a lack of deference to state autonomy - going
against federalism principles
- fed courts were free to ignore a state’s interest as articulated
by a state judge and then be able to pronounce what the state
law might be on whatever topic they wanted
- “the Swift doctrine” - benefit of this interpretation of
RDA
- increasing uniformity among states
- belief that fed courts are more likely to get it right
- increasing uniformity will increase certainty with
regard to litigation
ii.Erie RR v. Tompkins
- Erie reversed Swift
- facts: Thompkins (PA) had arm chopped off when walking on path next to
RR and Erie RR’s (NY) car hit him
- Thompkins says that Erie is liable to him for negligence - and
under general law (per
Swift), he is a licensee and gets a standard of
ordinary care - negligence standard
- Erie says that this should come under state law - since it was
peculiarly local in nature
- this state law would classify T as a trespasser - and standard would
be no wanton or wilful negligence (harder for T to prove)
- district court applied general law
- they followed Swift - and said that it’s not peculiarly
local, so general law applies
- appeals court affirms
- Sup Ct overturns Swift and says that state law should govern
- said that there is no more federal general common law
- problems with Swift - practical defects
- citizens are discriminated against by non-citizens
- you are depriving a citizen the right to have local
law apply
- this was used by big business corporations to pick where they
filed a suit so they could get the most favorable law
- so suggested that citizens were denied “equal
protection of the law”
- ability to pick courts = forum shopping
- could pick between state and federal court
- case of Black & White v Brown & Yellow - a KY corporation
dissolved itself and reincorporated in TN to execute a contract
to sue on diversity jxn
- things that we might think are local became general
- Swift encouraged judges to exert too much authority as to
what is the general law
- Swift didn’t create any uniformity
- state courts insisted on keeping their own opinions
- so you had difference in law within the state (state and
federal) and within the federal system (when people couldn’t
agree on the general law)
- so this increased forum shopping even more
- actual holding of Sup Ct
- reversed and remanded to decide what PA law was
- there is no more federal general common law
- after Erie, fed courts can’t look at what the general law is - they have
to follow the state law - both common law and positive law
- Sup Ct said that Swift is unconstitutional - although this doesn’t
really make sense
- it’s not a 10th amend case - since Congress could give this
power to the courts
- it’s not a 14th amend case - since citizens can’t violate it only state gov’ts
- best argument - separation of powers problem
- fed courts under Swift were acting without congressional
authority to create substantive law
- seems most concerned with issues of federalism
- ultimately, this decision gave back to the state power that was
improperly given to the fed courts
- so now fed courts in a diversity action have to look to
state laws
- Reed’s concurrence - just interpret “laws of several states” to include judge
made law - don’t need all the constitutionality stuff
- why didn’t Brandeis just do what Reed did?
- maybe he really felt it was unconstitutional
- it was tradition and had long-standing pedigree - didn’t want
to reinterpret something that had been around for so long
- clearest bottom line - federal courts sitting in diversity must treat state court decision as a
source of law when looking for legal principles that apply to a case
- fed courts can’t ignore state judge made law when an issue of general
law comes up
- there is no more federal general common law
- after Erie - fed court can create federal common law
- federal common law could come up in a federal question case where there is a statute but maybe it’s not specific enough
- areas where fed courts can fill in the gaps - gaps in federal
statutes, maritime law
- fed courts just can’t state common law in a diversity case
where there is state law in a given area
- what law will apply when you have multi-state elements in a
case?
- common rule is the law of the place where the tort occurs
is going to control
- in diversity action, court must look to the conflict of laws provision
of the state where the fed court sits
- this rule would tell the court what law to apply to the
substantive issue in the case
iii.Substance and Procedure
- in Erie, there was a suggestion that a distinction between substantive and
procedural was a critical factor in determining what law would apply in
diversity cases
- substantive - state law must be followed
- procedural - federal law should be followed (as a general
rule of thumb)
- what type of legal issues are procedural?
- statute of limitations, filing deadlines, page length of briefs, format of
documents, filing requirements
- these have nothing to do with the merits of the case, but are rules that
regulate the process itself - how to bring the lawsuit
iv.Guaranty Trust v York
- court tries to make a line dealing with how to distinguish between procedural
and substantive
- federal diversity action filed by a group of note holders against
the trustee for the notes
- class action and Ps allege that GT as trustee breached its fiduciary duty by
permitting an exchange of notes for stock of the company that issued the notes
- says that GT wasn’t looking out for the best interest of the
note-holders
- NY law governs the substantive liability issues here - no question
about this
- D’s defense - to avoid liability - NY law should apply and statue
of limitations had run
- P’s response - NY law didn’t apply - since this is an action in equity and fed
court sitting in equity isn’t bound to apply statute of limitations - since they
have more flexible rules
- latches - limitations doctrine - a general equitable doctrine that says that you
waited too long, this is a flexible doctrine
- court has to decide whether latches or the state statute of
limitations will apply here
- if it’s procedural - latches law would apply
- if it’s substantive - then statute of limitations would apply
- court says that latches isn’t proper here
- because the reason they were in fed court was based on diversity - so
you need to look at what happens if you disregard the state law and
look at the fed rules, whether this will have an impact
- you shouldn’t be able to get a different result in state court and fed
court just because you are in fed court based on diversity
- so - the substantive/procedural distinction doesn’t work here - the true
question is whether the statute of limitations will affect the result in the case
- this is known as the outcome determinable test
- if applying fed law will substantially alter the outcome of
the case, in order to
ensure uniformity, you need to apply state
law
- you don’t want the choice of the forum to change the outcome that
would have otherwise have occurred had you filed the suit in state
court
- what about the labels?
- you can say that when you use this test and say that state law should
apply, this matter is substantive
- when you shouldn’t apply state law after using the test,
the matter is procedural
- so - after this case - you can’t label something to determine the outcome you have to determine the outcome first
- potential problems with outcome determinative test
- it might catch too much - too many things could be
outcome determinative
- Ragan case - issue was determining when action commenced for
statute of limitations purposes - this was outcome determinative
- Cohen case - issue - whether posting of a bond to cover defense costs
if D was successful is required - this was outcome determinative
- Woods case - is TN corp doing business in MS without properly
qualifying able to avail itself of the courts of that state - this is
outcome determinative
- court says that paper size, length, size of brief, service of process
rules are all outcome determinative
- this is a little ridiculous - since then anything can
determine the outcome
v.Byrd v Blue Ridge Electric Co-Op
- P was hired by independent contractor who was working for D
- P was hurt while working on power line
- nature of relationship between P and D was significant, since in SC,
employees can’t sue, but have to go through worker’s comp process
- D’s argument - P was doing work for D, P shouldn’t be allowed
to sue
- under Erie, state law governs the issue of whether or not
immunity defense will work
- difficult Erie in this case - should immunity question be decided
by judge or jury
- under SC law - judge
- under fed law - jury
- how to decide - 1st determine if judge or jury decision is
procedural or substantive issue
- look at origin of case - is it so bound up with the substantive rights
and obligations of the case that it is a substantive issue
- court decides that it’s not substantive - since case that said you
should use judges said this because they were better equipped to do it so it’s not bound up in statutory scheme
- 2nd part - outcome determinative test
- whether or not conforming with the state rule will be
outcome detemrinative
- this case applies Erie and then the GT outcome
determinative test
- court says that having a judge v having a jury could have specific
result on case - so it has potential to be outcome determinative - so
state law should apply
- but don’t stop at York test - look at countervailing federal
interests
- fed interest here is ensuring the same outcome in state and
fed courts
- court says fed interest is strong here
- 7th amend - essential nature of the jury to fed
process
- court says that this isn’t directly at issue in
this case
- but issue is out there and makes it
important
- there is an important fed interest here - so much so that it outweighs
the policy considerations of ensuring consistency between fed and
state courts
- in the end, court says that the fed judge has more control - so judge/jury
question wouldn’t be so outcome determinative
- so what is the Byrd test?
1. Is the state rule at issue bound and tied up wit the state created rights
and obligations that are at issue in such a way that its application is
required
- court doesn’t say how bound up - but has to be
pretty close
- if yes - apply state law (per Erie)
- if no - go to question 2
2. Outcome determinative
- whether or not application of fed rule would be
outcome determinative
- if answer is no - apply federal law
- if answer is yes - go to question 3
3. Countervailing interest
- balancing of interests - take into account the importance of
countervailing fed interests - particularly with regard to judicial
administration and consistency
- if interests are sufficiently strong, would outweigh interest in
Erie of ensuring uniformity
vi.Hanna v Plumer
- personal injury action filed in fed dist court in Mass - based on
diversity
- P (OH) seeking money from D (Mass) for injuries in car accident
that happened in SC
- D died prior to filing, so P served process on executor
- service of process happened by leaving with respondent’s wife substituted service (4e2)
- D argued service was defective, since didn’t comply with Mass law - which
requires personal service in this kind of case
- if service was defective, then statute of limitations had run
- dist court agreed with D and granted summ judg - said it was outcome
determinative, since if you applied fed law here, the statute of limitations
would have run
- appeals court agrees
- if this were allowed to stand, fed courts would always have to go
with state law - and there would be no uniformity whatsoever
- Sup Ct says that you don’t just look at outcome determinative test - but also
at policy considerations - like forum shopping and uniformity
- if you apply outcome determinative now, it would be determinative - but you
are supposed to look at it when the lawsuit was filed
- service in this case is only the mode and means of how you enforce
the substantive right at issue - so it’s not that significant and shouldn’t
influence where you file the suit
- but in this case, there was a specific fed rule that governed the issue - so this
analysis doesn’t really apply in this case
- what is appropriate analysis when you have fed rule involved?
- Rules Enabling Act and the Constitution
- 2 questions to ask:
1. Does rule go against the Enabling Act - is it a rule that
abridges or enlarges a substantive right
2. Is the rule unconstitutional
- Rules Enabling Act - the rules that the fed gov’t make have to be strictly
procedural
- rules can’t be substantive - since that steps over
the court’s powers
- this is where the FRCP came from
- Congress has the authority to make procedural housekeeping
rules because the Const gave them this power under the
necessary and proper clause
- in this case - we had a direct collision between the rules - or rule 4 was
sufficiently broad to cover the issue presented
- what happens to fed rule if state rule applies (since fed rule
doesn’t cover the situation)?
- there might be other things the fed rule applies to
- state rule may supplant fed rule - but other aspects of the fed rule
might still apply
- Harlan’s concurrence
- felt that majority’s decision was too absolute - since the tests he uses
would indicate that fed rule would always apply
- he feels this test isn’t a good substitute for outcome
determinative test
- how would he approach this case?
- he is concerned about the choice of forum
- thinks that Warren isn’t going back far enough - not just to
the time about when you are deciding when you are going to
file in a particular place
- is the distinction between the laws and how they apply going
to affect your behavior
- uses Ragan and Cohen to apply this approach
- says Ragan was incorrect - since commencement of statute of
limitations isn’t going to change your behavior
- says Cohen is more complicated
- rule here might not have been broad
enough
- if there was a direct collision here, state law
should prevail - since these are cases where state
law would affect primary behavior of
individuals
- there was strong state interest in this policy - designed
to impact behavior
- whose approach is better?
- Warren (majority) - bright line test - encourages
predictability, uniformity, etc
- Harlan (dissent) - will vary from case to case, might get
closer to what is truly substantive - but very unclear and
unpredictable
vii.Walker v Armco Steel Corp
- appears that fed rule 3 is directly on point
- P injured while hammering nail - shattered and hit him in eye
- he filed products liability suit just under 2 years later
- but D wasn’t served until after 2 years (got lost in lawyer’s filing
cabinet)
- D’s response - says that it wasn’t within the statute of limitations
per OK law
(tolled means that the statue of limitations freezes - either hasn’t started yet or
takes a break)
- P’s response - fed rule 3 should apply - since commencement of lawsuit is
when you file the lawsuit, not when you serve the guy
- dist ct rules in favor of D - says statute here was an integral part
of the state law
- 10th circuit - followed Ragan - since it was the exact same statute
- followed stare decisis - didn’t even look at Hanna
- in Ragan, they followed outcome determinative test
- Sup Ct ultimately says that state law should be followed - since fed rule 3
wasn’t broad enough to cover the issue
- court says that there wasn’t a direct collision here - like in Ragan - since fed
rule wasn’t broad enough to cover the situation
- what is fed rule 3 intended to cover? Solely for measuring deadlines, not for
telling when the statute of limitations will toll
- rationale - looked to Advisory Committee notes, says that
this is “our view”
- Advisory Comm notes don’t really say anything
- seems like court is stretching to say that there isn’t a
direct collision here
- court said this tolling statute in OK served to further the purpose underlying
the statute of limitations themselves
- purposes - to protect the D - don’t want to have liability
forever
- evidence will become stale and will become more difficult for
D to put together a case
- how does tolling provision further these policies? In OK, action is
commenced when person is served - so they have notice
- why did the court work so hard to make sure there is no direct
collision?
- didn’t want to overrule Ragan
- if there was a direct conflict, would look to Hanna part 2
analysis
- rules enabling act and constitutionality questions
- the fed rule might violate the rules enabling act - since it
would be encroaching on a substantive area - whether the suit
could go on
- this would mean that Sup Ct, Cong, and Advisory
Comm were wrong
viii.Stewart Org v Ricoh Corp
- involved lawsuit by AL company against a NJ company for
breach of contract
- forum selection clause said it had to be decided in Manhattan
- P filed in AL dist court; D filed motion to transfer under 1404a
- dist court dismissed motion - saying AL law would apply and didn’t like
forum selection
clauses
- 11th circuit - motion should be accepted, since venue selection in diversity
cases is controlled by fed law
- Sup Ct agrees that fed law should apply to this case - especially
sec 1404
- Sup Ct’s analysis - factors to consider
1. Whether the statute is sufficiently broad to control this
issue
- court says that 1404 is sufficiently broad to cover the issue of
enforcing the forum selection clause
- since 1404 is pretty loose, case by case analysis to decide
whether to transfer - and judges have a lot of discretion under
this clause
- so the judge will take the forum selection clause into account
when considering whether to transfer
- have to look at fairness factor in light of the forum selection
clause itself and also the relative bargaining power of the
parties
- also can consider what would happen if AL law applies although this isn’t dispositive
- court says that state law can’t supplant fed law on this
issue - since Congress created the law
- look to other factors - convenience for witnesses and
availability of evidence - so forum selection clause isn’t
dispositive
2. Look to see whether the statute represents a valid exercise of Cong’s
authority under the Constitution
- don’t have to look to Rules Enabling Act - since
Cong created statute
- statute was procedural - so this was within
authority
- so now, case gets remanded to district court for them to weigh the
factors
- Sup Ct just decided that rule 1404a will apply here
- was this the right decision?
- nature of forum selection clause is contract and state law
usually covers contract
- if clause wasn’t enforceable under 1404 - fed court could still have
transferred - for convenience, justice, etc
- court could have said that 1404 wasn’t broad enough - since it
doesn’t say anything about forum selection clause
ix.Gasperini v. Center for Humanities
- Gas was a journalist who took pictures and gave them to D for a
video
- slides weren’t returned and were lost
- P filed suit in NY fed court - diversity - asserting 3 state law
claims - breach of contract, conversion, negligence
- D conceded liability - so only issue was damages
- jury awarded $450,000 - $1500 per slide
- D moved for a new trial under fed rule 59 - dist court denied this
without comment
- 2nd circuit - sets aside verdict and orders new trial unless P takes
$100K damages
- in determining whether or not judgement should be vacated, court
applied NY law - that directs appellate division to vacate if verdict
deviates from reasonable compensation
- court applied NY law because claims were state law
claims
- remittiturs - court is lowering award that the jury gave
- prior to 1986, standard was whether verdict shocked the conscience - this
was judge made law
- in 1986 - NY enacted statute court applies in this case
- changed shocked the conscience standard to materially
deviates standard
- they did this because they wanted more appellate review of verdicts since shock the conscience standard is really hard to meet
- why make this change?
- excessive medical malpractice verdicts
- pure and simple policy-driven tort reform to help
the system generally
- was this statute substantive or procedural in nature per the Sup
Ct? Both
- substantive - determining how much a P gets
- procedural - assignment of decision making
- problem with applying this statute at fed appellate level - it conflicts with
language in 7th amendment saying that there can’t be review of jury verdicts
- exception to this is the “than according to the rules of the
common law” language
- if the fed appellate court is applying the substantive portion of
statute, this is revaluation of what jury has done and isn’t appropriate
- issue for Sup Ct - whether fed courts can give effect to the substantive part
of the NY statute without altering scheme for trying cases
- have to respect fed interest, but also give effect to the substantive part
of NY statute
- initially, Sup Ct applies Hanna test (twin aims)
- court refers to this as outcome effective
- would application of the state standard have such an effect that it
would implicate the twin aims - inequitable administration of the law
and avoidance of forum-shopping
- if fed courts didn’t apply state standard here, verdicts would be hugely
different - since fed court damages would be much higher (because you would
keep the shock the conscience standard)
- so this would result in forum shopping and would discriminate
against citizens of the forum state
- P’s argument - cited 7th amend as his defense
- court acknowledges that this is a valid argument, but says that they
should be able to accommodate the substantive state law
- how did majority accommodate both interests?
- dist ct will apply substantive state standard
- then court will use abuse of discretion standard to
accommodate fed interest
- used Hanna part one - outcome determinative test - to determine that
deviates materially test should be used
- here, it looks like the court decided issue was substantive and
then tried to justify it
- why not apply Byrd analysis?
- 3-part test - bound up with state created right; outcome determinative
test; balancing of interests
- if you did this - it would be bound up with state created
right, so same outcome
- 2nd part of court’s decision
- court of appeals can’t apply NY standard, since it violates 7th amend,
so they apply the abuse of discretion standard
- Scalia’s dissent
- says the true substantive issue is the amount of money
they are going to get
- says the standard of review should be purely review for
legal error
- gets this from 1791 - the time the amend was
enacted
- thinks that everything about what the court has decided runs afoul of
the 7th amend
- says that majority concluded that this was substantive and
then tried to explain it
- the court made up the abuse of discretion standard for the
appellate court
- to allow state law to apply here would go against the policy of
allowing state rules to disrupt the judge/jury relationship in fed
courts
- court was incorrect in applying Hanna part 1 - wouldn’t
result in forum shopping
- says the shock the conscience test and deviates materially test
won’t produce different results - although this doesn’t make
much sense
- Scalia’s approach to deciding this issue
- rule 59 is sufficiently broad so there is a direct
collision with state law
- so then look at Hanna part 2
- Rules Enabling Act doesn’t prevent rule 59 from
applying - since it’s procedural
- is this right? Depends on whether you say it’s
substantive or not - since there is in the REA that a law
can’t abridge, amend a state right
x. What do we know?
- question - what law governs in fed court when subject matter jxn
is based on diversity
- what do we know for sure?
- state substantive law always applies in this context - per
Erie
- not only statutes, but also decisions of state courts
- situations where it’s not clear whether the law is
substantive or procedural
- Guaranty Trust was 1st case to address this outcome determinative test
- but this allowed for everything to be substantive,
since, at some point, everything is outcome
determinative
- Hanna - modified outcome determinative test - need to apply
this with twin aims of Erie in mind - forum shopping and
inequitable administration of justice
- Byrd - added interest balancing analysis to the
equation
- once we determine that something is outcome
determinative, still have to weigh the state’s interest
against those of fed court
- situation where there is a fed rule or statute
- where fed rule is sufficiently broad to cover the dispute, then
it has to be applied unless it violates the Rules Enabling Act
- this is Hanna part 2
- if there is no conflict between state and fed law, then
apply both
- ie Cohen, Ragan
b. Supplemental Jurisdiction of the Federal Courts
i. Gibbs Test
2. Constructing a Civil Lawsuit
a Modern Procedure in Federal Courts
b. Pleadings & Responding
- documents that provide the framework for a lawsuit
- filed with the court, frame nature of dispute and nature of relief that is being sought, gives
the parties notice of the subject for litigation
- Rules Enabling Act - 1934
- authorizes the US Sup Ct to promulgate the rules that govern fed procedure goal of nat’l uniformity
- abolished distinction between law and equity - fed dist court can now hear both
- instituted notice pleading - per rule 8 - all that is required is a short statement showing the P
is entitled to relief
- Rule 8 - how much information does the P need to plead?
- complaint has to contain
1. Statement about the jxn’s grounds - basis for jxn
2. Statement showing pleader is entitled to relief
3. State what the relief is that you are seeking
i. The Complaint
1. Basic Standard: Rule 8
a. Conley v. Gibson
- black employees sue their union - since employer said he was
abolishing the jobs, but really gave the jobs to whites
- specific legal claim - violation of Fed Ry Labor Act - so
it’s federal question jxn
- act requires that members of union are all treated
equally
- relief sought - declaratory judgement, injunction and
damages
- Ps sued union instead of employer because at that time, there was no
title 7 - so no statutory basis for discrimination claim
- D’s response - motion to dismiss for failure to state a
claim - 12b6 motion
- dist court grants motion and appeals court upholds
- issue for the Sup Ct - did the claim fail to state a claim upon which
relief could be granted
- D’s two theories about why it was impossibly for Ps to get
recovery desired
- there is no law - no legal merit
- D argued that what P was claiming wasn’t in their
obligation to the Ps
- not enough facts - insufficient facts
- Sup Ct said that a claim shouldn’t be dismissed unless it appears
beyond doubt that the P can prove no set of facts upon which relief can
be granted
- this standard wasn’t satisfied here
- the D did have a legal duty - so the no legal merit
argument isn’t good
- this is notice pleading - so all you have to do is notify the P and D
what the case is about - and this pleading satisfied this requirement
- Connely v Gibson standard - in order to dismiss, it has to be
established beyond doubt that the P can get no facts in support of the
claim
- if you take this to its logical extreme - only frivolous claims
will get dismissed, so you can’t take it this far
- why would you want to put in more facts?
- scare the other side - for settlement leverage
- sway the judge - first impression
- may get facts admitted by other side in their answer
b. American Nurses Assoc v. Illinois
- involves sex discrimination class action against state of Illinois under title 7 and equal protection clause of constitution
- sued because people in predominantly male jobs were paid
more than people in predominantly female jobs
- D’s response - motion to dismiss - 12b6 - for failure to
state a claim
- dist court granted this motion - saying that there is no such thing as a
comparable worth claim under title 7
- P’s appeal said that their claim was also based on
intentional sex discrimination
- problem with P’s complaint - too long and wordy, pleaded
too much
- the intentional discrimination based on sex was the
essential claim here
- but Ps also alluded to comparable worth stuff which isn’t a viable claim
- they went way beyond the restrictions in rule 8
- didn’t have short and concise statements - in
accordance with 8e
- court eventually said they had a good complaint - but
examined it way too much
- judge here did say that you can plead yourself right out of court since whatever you plead you are stuck with
- court needs to be liberal in their interpretation of what the P is
pleading, but not too liberal
- lesson: keep your complaints simple
- it can be dangerous to keep your complaints too simple - complaint for affirmative relief - have to have elements of relief
outlined, plead jxnal facts, tell what relief you are seeking
- in other special cases, you may have to plead more
2. Special Pleading Requirements:
(a) Leatherman v. Tarrant County Narcotics
- suit against policemen and municipality for police officers who
overstepped their bounds in asserting some search warrants - sec 1983
- violated P’s const rights
- detailed facts #1 - cops shot dogs, found nothing, had party on
lawn
#2 - cops broke into house without identifying themselves, hit
old dude many times and never found anything
- typical theory of recovery for this case (in suing municipality) would
be respondeat superior - but that doesn’t work here - since you have to
show a practice regarding wrongful conduct - ie this is how they
normally do searches
- specific allegation here - failure to train officers
adequately
- trial court granted motion to dismiss - because they failed to meet
heightened pleading standard
- you have to state with factual detail and particularity the basis
for the claim - this requirement was established through case
law
- 5th circuit affirms dismissal
- Sup Ct - reverses dismissal
- D’s argue 1. They are immune from suit because of the freedom from
respondeat superior - court says that this isn’t what this means,
it just means that you can’t recover based on a theory of res
superior
2. Heightened pleading standard isn’t a heightened
standard at all
- if you have a more complex case - like we have here you have to plead more to satisfy rule 8
- Sup Ct said that this was in fact a heavier pleading
standard and this is inappropriate - since there is
nothing in the rules to say that it’s ok
- the expression of one thing is the exclusion of another
(latin phrase the court uses)
- change has to be made through the legis,
not the courts
- why would 5th circuit want to impose heightened pleading
standard?
- don’t want to distract gov’t officials from what
they have to do
- shouldn’t have to deal with difficult and
expensive discovery
- perception that there are lots of frivolous claims in
this area
- this creates a problem when non-frivolous cases don’t
meet heightened pleading standard
- most abundant cases are prisoner’s cases
- Sup Ct says that you can’t have a heightened standard unless it is an
exception to rule 9
(b) Schultea v. Wood
th
- 5 circuit wanted to get around what the Sup Ct rule in not having
heightened
pleading standards
- P claimed that he had been demoted in his position from police chief
in response to reporting criminal activity of city councilman
- he sued people in their individual capacity - they had deprived him of
his liberty and property without due process
- trial court denied his motion in entirety
- 5th circuit agreed that denial of 1st amend claim was correct, but
disagreed with the holding on due process claim
- 2 issues with respect to P’s due process claim
1. He was deprived of his property interest in his job without
proper procedures (like Loudermill)
- 5th circuit said he had failed to show that he had a
property interest in his employment contract - since it
was at will
2. His demotion deprived him of his liberty interest because
they were slandering him and he had been demoted
- 5th circuit said that his demotion didn’t mean
anything, since he just lost his title, not his job
- Sup Ct remanded the case - to give P an opportunity to re-plead to try
and state a claim
- court then proceeded to say what the needed to do
- what is now required - have to state facts - can’t base your complaint on
conclusions
- have to plead more to support your conclusions
- if Ds plead a defense of qualified immunity - then court has ability to
order reply - and rule 8a doesn’t apply to replies (just pleadings
seeking affirmative relief)
- another way to get around rule 8a - motion for more
definite statement
- D would motion for this and court can grant the motion heightens the pleading requirement
(c)Rule 9(b) - Fraud
- fraud is the only substantive claim that is specifically addressed in
the rules that requires a heightened pleading standard
- rule 9b states that have to plead some facts that establish
what nature of claim is
- 4 elements of fraud claim:
1. False statement
2. Of material fact
3. Intentionally made
4. On which P relies
- can also have a fraud claim based on failure/omission to state
certain information - if there is a duty to disclose information
- this arises most often in securities fraud
- why has fraud been singled out?
- easier to make up claims; greater risk for “strike suits” individuals filing suits to exact a settlement
- downside for having the heightened pleading requirement
for fraud
- difficult to prove - may have trouble getting this info ever,
much less at this stage
- difficult to defend against - so this is why you
require more
- have to plead fraud “with particularity” - but can aver
intent generally
- all you have to do is allege intent, since it is so
hard to prove
3. Pleading in the Alternative: how consistent must the P be?
a. McCormick v. Kopmann
- P’s husband killed in accident when his car was hit by K
- P sues K and owners of 2 bars (Hulls) for money for death
of husband
- count 1 - as to K - wrongful death suit
- K negligently crossed the line and hit P
- count 4 - as to bar owners - Dram Shop suit
- these Ds gave alcohol to P and he got drunk and
hit K
- this theory is that the bars were responsible
- K’s defense - per count 4 - this was a judicial admission and a fact
that should be admitted at trial to free him from liability
- trial court let case go to jury on both counts
- jury found against K - and didn’t find bar owners at all at
fault
- why did court of appeals hold that it was fine for claims to go
forward - even though they are clearly inconsistent
- statute says that you can do this, so it’s ok
- why? The only person who really knows for sure
if he was drunk is dead
- so P shouldn’t be penalized or forced to figure out
the truth
- it makes sense for her to try both cases together - since they all relate
to one accident - judicial economy argument
- P didn’t have to file the suits this way - she just wanted to
do it this way
- under what circumstances is pleading in the alternative
not justified?
- if you know for sure that one set of facts is
accurate
- can still plead in the alternative here - but only as it relates to
different theories about how you got to that particular outcome
- there are certain situations where the P must know the facts ie personal injury
- why isn’t it fair to force the P to pick a theory on which to
sue?
- the truth isn’t determined until the jury determines
it
- election of remedies doctrine - if you are seeking out different
remedies, you can be made to elect which remedy you want the
jury to decide
- the P isn’t going to know the facts after it’s all been presented
- she may have a better idea, but probably don’t know for sure
- downside to allowing for inconsistent pleading
- argument that the jury can’t figure it out isn’t any
good - per court
- could lead jury to believe that it was either intoxication or no
intoxication - but he might have been contributorily
negligent anyway
- these sorts of admissions might prejudice jury
against the P
- rule 8e2
- party can state 2 claims alternatively or hypothetically
- generally speaking, as a P, you can plead whatever you want - no
matter how inconsistent they are
- pleading in alternative applies to both defenses and
alternative claims
- ethical kicker at the end - still have obligation under rule 11 - places ethical
restrictions on pleadings
- when lawyer signs document, you certify pleadings have legal
and factual support
ii. Responding to the Complaint
(2) Rules and Forms
(3) Pre-Answer Motion - rule 7
- 4 parts to the motion
- label = D Mike’s motion to dismiss
- generally tell the court what you are asking for - moving
to dismiss
- but should also put a little bit of your argument in
here too
- also ask what relief you want
- brief part
- give some factual background - all facts that P has asserted as
accepted as true
- need to have some legal authority saying why you
are entitled to relief
- conclusion - restate your relief
- certificate of service - everything served pursuant to rule 5, and have
certificate showing this
- serve P’s counsel instead of P- why?
- know who the lawyer is now
- ethical rule that says that you don’t have contact with
a party represented by counsel
- 12b - objections to a pleading - have to assert any defense you have in a
responsive pleading
- 12c - motion for judgement on the pleadings
- 12e - motion for more definite statement - use this to get around heightened
pleading standards
- 12f - motion to strike - for crazy allegations that aren’t true
- a motion will indicate what your argument is specifically - and let
P fix his complaint
- all of the defenses under 12b can be asserted in the answer - so
why not put them there?
- don’t have to go through investigation and discovery
- if you have a good argument, why not put it forward?
- if you don’t raise these objections in a timely manner,
they might be waived
- motions will buy more time
- avoid having to make damaging admissions
- potential dangers associated with motions?
- if you make a pre-answer motion and leave something out
- might be waived
- what defenses get waived?
- lack of jxn
- insufficiency of process
- improper venue
- 12h2 defenses won’t get waived
- 12b6 - motion to dismiss for failure to state a claim is usually denied - if this
is your only argument - should just go ahead and answer
- answer has to be served within 20 days after service of the
complaint - how to count 20?
- day of service isn’t included
- last day of period is included
- if it’s less than 11 days - only count weekdays
- if done by mail - get 3 extra days
- includes service by any other means than personal
- court can allow for extensions
(4) the Answer
(a) Fuentes v. Tucker
- case involved some clever pleading
- D amended answer on day of trial to concede liability in
the case
- by doing this, D prevented some of the gory
details from getting in
- court concedes that this kind of evidence would be material to the
issue of damages - but here, we are just talking about economic loss on
the parents
- concurrence - all of the info should be able to come in
- why allow D to get away with this?
- this is purely a strategic move on the part of the D
- benefit to the system - more expeditions - only have a
trial on damages; will cut down on the trial a good deal
(b) Zielinski v. Philadelphia Piers
- P sought damages for injuries sustained in forklift
accident
- P claimed lots of stuff in one paragraph - this was stupid, should be
simple and concise separate out claims and different factual
circumstances
- D denied entire paragraph - but rules say that you can’t do this - 8b says can’t have a general denial - should admit true parts and deny
wrong parts
- D mislead the P - since P sued wrong company and didn’t know who
real party was - but D did know who real D should have been
- P found out who real D was after statute of limitations had
run
- why should we stretch to find that what D did was
inappropriate?
- counsel for D was sitting there when witness under oath
identified the wrong D as the actual D and lawyer didn’t
correct him
- D was just giving the bare minimum in his response - even
though P was very diligent
- ultimate remedy in this case - changed what the jury was going to hear - court made true the
fact of the wrong D - but this didn’t matter, since it was the
same insurance company representing the wrong D and the
right D
- court said there is no bad faith here - no evidence the D is really
trying to deceive the P
- rule 8b - tells you what you need to say to respond to claims
- emphasizes that the only time you want to deny everything is when
you have a good claim for it
- rule 8d - when you don’t deny something in your answer, it’s
considered admitted
- so you want a disclaimer paragraph at the end of the
answer
- how to serve your answer - with P’s attorney, file with court,
certificate of service
- comply with rule 5 service
(5) Affirmative Defenses
- 8c - lists affirmative defenses - ie insanity, self-defense, etc
- even though all claims are true, there is an excuse for what
happened
- if affirmative defense isn’t asserted, it is waived
- sometimes lawyers overplead affirmative defenses - but need to
have factual support
- need to do the same thing the P does in forming the complaint - research
claim, figure out the elements of the claim
- what affirmative Ds could Tyson assert in our hypo?
- self-defense
- assumption of risk - but this doesn’t work, since we have
intentional torts here
- insanity - but this is a criminal defense, so it doesn’t work
here
- consent - you know you are going to get hurt when you
start boxing
- 12b6 - general defense of failure to state a claim - every lawyer
always puts this in
(a) Gomez v. Toledo
- P was agent with Puerto Rican police department and tattled on two
other officers of the dept; allegations were true, but dept wasn’t happy
- in criminal trial of two officers, P testified and was then charged with
wiretapping and suspended and then discharged without a hearing
- all of these charges were deemed false
- P got back pay, but still wasn’t happy - so filed lawsuit about how his
civil rights had been violated - discharged without hearing
- D’s response - answer with affirmative defenses, 12b6 motion for
failure to state a claim
- motion to dismiss was granted by trial court - why?
- D argued that officials are entitled to qualified immunity, so P
has burden of pleading in the complaint that the D acted in bad
faith
- P didn’t do this here, so court dismissed the case
- Sup Ct ultimately reversed this dismissal
- to state a claim per sec 1983 1. Deprived of fed right
2. Person was acting under color of state law when P was being
deprived of his rights
- the P did both of these, so he did state a claim
- qualified immunity isn’t listed as affirmative defense in
8c
- P shouldn’t have to refute this affirmative defense in the
complaint
- unfair to make him discover objective and subjective (state of
mind) elements of this defense
- also not fair to make P anticipate every possible
affirmative defense
- Rehnquist concurrence -
- recognized that this didn’t address issue of burden of
persuasion/burden of proof
- seems to be suggesting that, with regards to affirmative
defenses, P should have burden of persuasion - this isn’t
usually the case
- would this approach be fair - to place the burden
on the P? Yes
- discourage frivolous lawsuits
- gov’t official doesn’t have to worry about
proving his side
- if P sees that they have to plead all this information,
maybe they won’t plead at all - so will weed out bad
claims
(b) Ingraham v. US
- 2 lawsuits for injuries by some government doctors
- both case were filed in TX - which had a law that placed a cap on
general damages that you can recover in med mal cases (not med
expenses)
- jury awarded lots of money for spinal injury and injury to
newborn
- through some post-judgement maneuvering, D (US gov’t) raised
issue of statutory cap on damages
- they had never raised this before or during the trial
- court denied this issue as being untimely
- gov’t appealed - issue - whether the statutory limit on damages
constituted an affirmative defense, thus making D’s failure to raise it
in pleading constitute a waiver
- court found it was an affirmative defense - encompassed
in 8c’s residuary clause
- main goal of affirmative defenses is to provide P with notice - and
here, enforcing the statute post-judgement would be an unfair surprise
to the P
- how were Ps unfairly surprised here?
- would have argued non-general damages more if
they knew about the cap
- would have established medical expenses better
- is this really an affirmative defense?
- anyone can read the code
- why does the court say that it is an affirmative defense?
- as a practical matter, don’t want to say there is a cap - since
you are saying that you aren’t guilty in the first place
- in reading statute, it doesn’t look like you have to
raise as affirmative def
- this isn’t the typical affirmative defense case
- best argument is that which said the statute was
unconstitutional
- but since Ps didn’t know D was going to use it, didn’t have an
opportunity to rebut it and say that it wasn’t constitutional
(6) Amending the Pleadings
(a) Liberal Pleading and Liberal Amendments
- supplemental complaint - when it isn’t really related to
initial action
- have to get leave of court in order to be able to add
this complaint
- ie - if Tyson made death threats to Jared 10 days
afterwards
- joinder - increasing the number of claims in an action
- allowed per 18a - you can join any and all claims against a
party - no matter how unrelated the claims are
- this rule only relates to pleading
- no restrictions on pleading, but there are restrictions with
regards to subject matter jxn and venue
- there is no such thing as a compulsory claim - don’t have to assert all
3 claims in same action
- but res judicata may apply to prevent you from
asserting them later
- but for purposes of being most efficient, it makes sense to
assert all claims at once - convenience, judicial economy
arguments too
- how joinder applies to Ds
- D has to answer with either answer or counterclaim
- answer with affirmative defense argument why P can’t recover
- counter-claim - asserting a claim against
the P in an action
- what happens if D calls it the wrong thing - like saying it’s an
affirmative defense instead of counter-claim? Doesn’t matter
per 8c
- rule 13 - counter-claim rule
1. Compulsory - arises out of same transaction or occurrence as the
subject matter of opposing party’s complaint
- have to raise this - if you don’t, it’s barred
later
2. Permissive - has nothing to do with what has already
been plead
- if you fail to raise this, not barred later on
- limit to number of counter-claims? No - can assert as many as you
want against opposing party - per 18a
- once D serves counter-claim - P has to reply within 20
days - per 7a
- P can assert counter-claim against D - and may even be
required to under rule 13
- cross-claim
- claim between co-parties - commonly for
indemnification
- cross-claim isn’t compulsory
- once one has asserted a valid cross-claim against another, can
add as many claims as he’s got against the other party - subject
to subject matter jxn and venue limitations
- party responds to cross-claim with answer (this is
different from orig answer)
- and then can assert any claims of his own as well
- per 13i - court has discretion to sever aspects of the case
to simplify matters
(b) Barcume v. City of Flint
(c) Nelson v. Adams USA
c. Multiple Claims and Parties
i. Appletree v. City of Hartford
- P brought 2 counts in his lawsuit 1. Deprived of his constitutional rights - fed question jxn - against
city
2. Against Casati - false arrest
- count 1 was dismissed
- count 2 - alleging D made stuff up in order to get him arrested
- C files counter-claim for libel and slander against P
- P responded with motion to dismiss - lack of jxn over claim
- key issue for court - is it a compulsory or permissive counter-claim
- if it’s permissive - needs an independent basis for subject matter
jxn
- argument is that if it’s not related enough to anchor claim, it can’t be
brought in under supplemental jxn
- if it’s compulsory - general rule is that it automatically comes in under
supplemental jxn
ii.Our Hypo Counter-Claims
- Tyson’s counter claim for assault and battery is compulsory - since it arises
out of the same facts as original complaint
- basis for subject matter jxn - has to be in accordance with rule 8a
- paragraph 4 - court also has jxn under diversity
- if P drops his case, court dismisses original case, counterclaim can go forward
- court has discretion whether to keep other claims if
original claim is dropped
- paragraph 10 - it is fine to plead upon information and belief
- if he later discovers that it’s not true, has to remove
counter claim
- have to demand jury trial in writing if you want it - even in
counter-claim
- serve counter-claim pursuant to rule 5
iii.The Rules of Party Joinder
d. Policing the Pleadings; Ethical Constraints, Frivolous cases, & Creative
Advocacy
i. The worker w/ the bad accent
(1) Rule 11
- one of few rules that talks about lawyer ethics
- only applies to papers - not oral arguments
- limits extent to which lawyers can advocate through written
pleadings or other papers
- lawyers have a duty to investigate claims and defenses prior to asserting
them - in order to show you have support for those claims
- original rule wasn’t very effective - enacted in 1938 1. Standard was one of subjective bad faith
2. Lawyer’s code - don’t seek sanctions against other
lawyers as prof courtesy
3. Gave courts discretion to impose sanctions
- 1983 rule - major changes
1. Standard was changed to standard of objective reasonableness couldn’t rely on “empty hand, pure heart” standard
2. Took away court’s discretion in imposing sanctions
3. Type of sanctions were different - attorney’s fees now
available
- lots of litigation happened, and Ps suffered - particularly
in sec 1983 claims
- current rule - 11a - pleading paper has to be signed
- 11b - attorney has to certify complaint
1. Isn’t improper
2. Has legal support - need to have some support from
somewhere
3. Have factual support - have information and belief - then allow for
discovery to uncover more facts
4. Makes it applicable to affirmative claims for relief and
answers and denials
- 11c - due process requirement in rule - give lawyer notice before
imposing sanctions
- how rule 11 argument is initiated - made separately from other requests
- served pursuant to rule 5
- prepare motion, serve other side, wait 21 days to see what
happens
- safe harbor provision - they can withdraw incorrect
complaints in this time period
- problem with this - nothing to deter filing frivolous lawsuits since can just withdraw in 21 days
- lawfirm held jointly responsible for sanctions
- sanctions that can be imposed
- non-monetary nature - dismissal with prejudice
- everything filed by run by pleading tutor at courthouse
prior to filing
- suspend lawyer from practice before the court
- collateral discipline
- monetary penalties to the court
- attorney’s fees - if argument is made with regard to
particular motion
- can’t impose monetary sanctions on party for not having a
legal basis
- party isn’t supposed to know the law - the lawyer
is
- if lawyer voluntarily dismisses lawsuit, can’t impose
monetary sanction
ii.An Inquiry Reasonable Under the Circumstance
(1) Business Guides, inc v. Chromatic Comm Enter.
- claims by Guides for copyright infringement
- P’s complaint was based on fact that they planted seeds in their guides to
make sure people don’t copy it - and claimed that D copied some of the
information
- P filed complaint and application for temporary restraining order - to stop D
from publishing their book
- P files TRO application with court and submits sworn statements from
people from P swearing the 10 seeds were in D’s directory
- lawyer and pres of P’s company signed TRO application
- prior to hearing on TRO, court called P’s attorney and asked to
specify the wrong info
- P retracted 4 of the claims - and then court became suspicious
- court then did its own investigation and it only took an hour to find out that 9
out of 10 had correct information
- court denied TRO and referred case to magistrate to determine if rule 11
sanctions were appropriate
- magistrate said that rule 11 sanctions were fine for both attorney
and client
- why the client?
- they signed TRO application - so this constitutes
certification
- law firm shouldn’t have been held responsible because they didn’t have time
to conduct investigation
- since they had a sophisticated client and were just trusting
them
- but, after the first 4 were retracted, they should have
investigated the others
- the fact that the judge found out in only an hour hurts the
law firm lots
(2) Kraemer v. Grant County
- P went to attorney claiming sheriff had conspired with deceased
husband’s parents
- attorney told her to write down her claims - which she did
- attorney then made an administrative claim - which was denied
- then he hired a private investigator - who didn’t find anything to
support or deny claim
- why wait so long to hire PI?
- see where claim went
- there is no rule 11 with regards to administrative claim, but with
complaint there is - so now he has to verify allegations
- then filed suit against sheriff and dead fiance’s parents - sec 1983
claim
- lawsuit survived motion to dismiss, but didn’t survive motion for
summary judgement
- he didn’t prove enough in discovery - particularly part where
you have to show that sheriff did something wrong
- trial court found that attorney had to pay D’s legal fees - he should have
known allegations were false
- issue before appeals court - whether his investigation was reasonable under
the circumstances
- court said that he did conduct a reasonable investigation
- difficult to uncover facts about conspiracy allegations
- he hired a PI (who the Ds refused to talk to)
- so he needed to file a lawsuit in order to get discovery
iii.Presented for any Improper Purpose
(1) Saltany v. Reagan
- some Libyan citizens sued lots of people seeking damages for personal
injury, property loss during the bombings of Libya
- Ps represented by Ramsey Clark - former Atty General - so not
just any lawyer
- asserted a wide variety of legal claims - federal tort action, RICO,
alien tort claim
- Ds move to dismiss and prevail - and then file for rule 11
sanctions
- why did these claims supposedly violate rule 11 sanctions?
- allegation that this lawsuit was filed for an improper purpose - trying
to protest and harass the government
- no legal basis for asserting the claims
- district court denies sanctions - court system should be open to public
challenges to the government
- appeals court says that rule 11 sanctions were proper because P’s lawyers
surely knew that the claims had no chance of success - so the case amounted
to a protest suit that isn’t appropriate
- was appeals court right?
- yes - it’s a public place and expends judicial resources, so it gives
claims some weight
- no - court shouldn’t be used as protest, since you are
using taxpayers’ money
(2) Improper Purpose Clause in Rule 11
- problem is that in the 1st amend, it says that you can petition the
gov’t for redress
- because of this conflict, when you sue the gov’t - the court will say
that they are dismissing because there is no legal claim - not just for
improper purpose
- then why have an improper purpose clause?
- comes into play regarding motions - in motions, there can be stuff
that is clearly designed to harass, make them spend money, etc - this is
where courts will impose sanctions for improper purpose
- this also comes into effect where D has conceded, but P
refuses to drop the suit
- can also get rule 11 sanctions if you assert a claim without an adequate legal
basis for doing so - so what does non-frivolous mean?
- it used to mean good faith - but this was confusing - so now it means
not
frivolous
- what does frivolous mean? Need a legal basis to your
claim
- notes say that some case law - dissents, law review articles,
etc would be enough
- safe harbor provision may give you additional
comfort
(3) Lawyers for Causes
- if lawyer intends to argue for an extension, modification or reversal of
existing law - advisory committee notes suggest that you might want to
identify your argument - since it can be concluded that you are
misrepresenting the law if you don’t do this
iv.Warranted by Existing Law
(1) Franz v. US Powerlifting Federation
- claims by 2 weightlifters against USPF for allegedly conspiring
to monopolize the sport
- in P’s amended complaint - only included USPF
- claim gets dismissed under 12b6
- Cotter and USPF seek rule 11 sanctions - and dist court grants
Cotter’s
- C is now seeking lots of money
- dist court says that this amount of money is too much - if it needed this much
attention, case is more complicated than they thought
- appeals court reverses - sanctions were based on fact lawsuit was
frivolous
- if defense counsel is wasteful - this is another issue - not considered
with regards to rule 11 sanctions
- to figure out rule 11 sanctions, only look at stuff on P’s side - and here the
claim was frivolous
- appeals court felt that 40 hours for motion to dismiss was
probably fair
- but what about the time spent for rule 11 motion? Probably suspect, since
400 hours is damn lot of time
- but this isn’t a valid reason for denying sanctions
- USPF’s motion for rule 11 sanctions - denied by district court - says he had a
colorable claim
- court of appeals reverses - says that a colorable claim isn’t enough,
can still be sanctioned for lack of investigation - it’s not ok to have 1
good claim and 6 trash claims - this would undermine purpose of rule
11
v.Denials… Reasonably based on lack of information or belief
(1) Committee v. Dennis Reimer co.
3. More on Joinder
a. Joinder of Multiple Parties
- claims themselves are always allowed to be added, so long as you satisfy jxnal
requirements
- who are proper parties in an action? - 3 considerations
1. Who is proper party P
2. Whether party has capacity to sue and be sued
3. Standing
- rationale for joinder - efficiency, try similar cases together
vi.Real Party in Interest
- rule 17a (allows for naming wrong party to be fixed)
- just because you have sued someone doesn’t mean that you are
the right party at interest
- the real person is the individual or government entity who, under the law,
can assert the claim - ie someone who is representing in an official or legal
capacity can sue in their own name, so long as they are doing it for the person
who has the substantive right to sue
vii.Capacity to sue or be sued
- refers to one’s competence - an individual’s ability to represent themselves
in a lawsuit without the help of someone else (old people, retarded people
don’t have capacity)
- capacity is determined by the law of someone’s domicile
- corporations capacity is determined by law of the state of
incorporation
- don’t have to plead capacity - has to be raised by other party or
it’s waived
viii.Constitutional Limitations: Standing
- fed court jxn can only be invoked to decide cases or controversy
- one must have an actual legal injury - injury in fact - has to be traceable to
improper conduct of the D and likely to be redressed by a favorable decision
in the case
- assuming we have all 3 - under what circumstances can we join parties to the
lawsuit?
- permissive joinder - appropriate in certain circumstances - rule 20
- compulsory joinder - rule 19 - very complicated; involves parties without whom the
lawsuit can’t move forward
ix.Fictitious Names
x.Anonymous Parties
b. Rules of Party Joinder
xi.Permissive Joinder (Rule 20)
(1) Mosley v. General Motors
- motion to join Ps - claims for racial and sexual discrimination under title 7
and sec 1981 (discrimination with regard to terms of a contract)
- 8 of Ps assert claims against Chevy division and union
- 2 Ps assert claims against GM Fisher division and union
- all Ps seeking declaratory judgement and injunctive relief and
attorney’s fees
- D’s response - pre-answer motions
- motion to strike, motion for more definite statement
- dist court ordered that lawsuits be broken into 10 different suits - since only
thing in common was the D
- also a judicial economy argument - that 10 separate Ps
would be unmanageable
- 8th circuit - interlocutory appeal - looked at rule 20a requirements
1. Any right to relief asserted by Ps arising out of same transaction or
occurrence or a series of transactions or occurrences
2. Question of law or fact in common
- court applied logical relationship test - if things are logically related, then Ps
should be allowed to join together
- there has to be a reasonable amount of factual overlap involved so
that people can conclude that there is a logical relationship between
the claims
- court here thought this test was met
- court found that there was a broad company-wide policy of discrimination,
so it satisfied rule 20a
- what about 20b? Common question of law or fact... court found there was
here - for basically the same reasons as 20a
- issue here was conduct involved, not effects of the conduct - so
surely we have one question of fact in common here
- why was it so important that Ps sue together here?
- impact of all the claims validates each individual claim
- lawsuit with 10 Ps will have bigger impact and get D’s
attention more
- it wasn’t going to be all that unmanageable - and if it did get that
way, can separate down the road under 20b
- court is going to be pretty liberal when determining whether parties can be
joined together
2. Joining Defendants in a single lawsuit
- exact same test
- asserted against them
1. Any right to relief, etc
2. Question of law or fact common to all Ds
- examples of P joining Ds in this context - case where widow sued car driver and bar owners in
alternative pleading
- Mosley - have more than one D - GM Chevy and Fisher
divisions and the union
xii.Compulsory Joinder (Rule 19)
- when P has to join other Ds to the action - and this is mandatory
- in the absence of this party, undesirable consequences could
result in the case
- convenience and judicial economy are still factors - but not all
important
- rule 19a - persons to be joined if feasible
- if person is subject to personal jxn, and whose joinder doesn’t
deprive court of subject matter jxn
- shall be joined as a party in action if
1. Complete relief can’t be accorded
2.
- if these people haven’t been joined - court is allowed to
require joining
- although they can object to venue and can be
removed
- you don’t ever get to part b unless you make determination in part a that
party is someone who is needed in the action, but first part about feasibility
isn’t met
- like they destroy subject matter jxn or can’t be served
- 19b - if in equity and good conscience, the court can’t determine that the
lawsuit can go forward - the lawsuit can be dismissed - factors to consider court has broad discretion
(1) Temple v. Synthes Corp.
- P had surgery and afterwards device broke
- device manufactured by D; surgery performed by doctor in New
Orleans
- P sued D in eastern dist of LA - diversity for products liability
- P sued doctor and hospital in state court for negligence,
malpractice
- D filed 12b7 motion - dismissal for failure to join party under
rule 19
- trial court granted motion - said P had to join doctor - judicial
economy rationale
- P refused to bring in doctor and manu
- appeals court affirmed trial court in dismissing - focused on effect ruling
could have on other Ds
- since P wouldn’t have to put out all arguments at trial, potential for
inconsistent verdicts
- Sup Ct issue - whether absent Ds were indispensable parties
- Sup Ct held they weren’t indispensable
- don’t get to analysis of 19b unless you hold they were necessary
parties under 19a
- court says they are joint tortfeasors - and as joint tortfeasors, they are
permissive, not compulsory
- here - they don’t satisfy 19a - complete relief can be accorded - since he can
get all the money from D
- if D wants doctor and hospital to contribute, he can sue
for indemnification
- also don’t satisfy 2nd question of 19a - is this going to impair or impede their
ability to protect their interest
- no - the doctor will have a chance in negligence suit to
defend himself
- 3rd question - will it leave people who are already parties subject to
inconsistent obligations or getting hit twice - here, no
- the parties here aren’t so integrally tied together that they have to
be sued in one action
- why didn’t P bring all these in one lawsuit?
- avoid confusion - since jury might think that only one D
can be liable
- to try and recover from all 3 parties
- if you sued all 3 Ds at once, they might help each other out - here
they will be going against each other
(2) Helzberg Diamond v. Valley West Shopping Center
- H entered into lease with VW to open a full line jewelry store in mall - lease
provided that VW wouldn’t lease to more than 2 other stores
- VW leased to 3 stores - 3rd was Lord’s - so this lease violated
leasing agreement
- H sues VW in fed court seeking an injunction - prevent Lord’s
from opening
- VW moves to dismiss - 12b7 - saying that Lord’s is a compulsory
party
- rule 20 is for P to control joinder
- rule 19 is tool for D saying P should have joined a party
- does Lord’s need to be joined?
- district court says yes - since it would impair or impede Lord’s
interest (judgement would prevent them from opening a store)
- is it feasible to join Lord’s?
- here - no - since they aren’t subject to personal jxn
- so now it’s up to the court’s discretion about whether the party is
indispensable to the case - dist ct concludes that they weren’t and denied
motion to dismiss
- factors about whether they are indispensable
1. Potential prejudice to Lord’s and VW if Lord’s isn’t
joined
- no prejudice to Lord’s - since they will retain the rights to
their lease agreement (since this action is between H and VW
and involves their lease)
- what about prejudice to VW?
- they would be subject to inconsistent obligations - but
court says this is their own fault - since they made the
leases
- another aspect to explain that it’s not prejudicial - court says
they are right here - so it’s speculation to think that the
obligation would be inconsistent anyway
2. Lessening the potential for prejudice
- it gave L’s the opportunity to intervene - and L’s
chose not to
- L’s could waive personal jxn and be in lawsuit if
they wanted to
3. Would judgement in L’s absence be adequate?
- court says that it is - since you are simply resolving the
dispute between H and VW - not between L and VW
4. If you dismiss lawsuit, would P have remedy?
- there was potential to have remedy somewhere else - would
have had to be refiled in Iowa
- these factors aren’t determinative - the court has broad discretion
xiii.Impleader (Rule 14)
- purpose - enhance efficiency and judicial economy - resolve everything that
relates to a particular claim all at once and thereby conserve judicial resources
- P sues D1 who joins D2
- D1 now = 3rd party P and D2 now = 3rd party D
- as between D1 and D2 - there has to be answer from D2
- D2 can counter-claim against D1 - if you don’t do this,
defenses can be waived
- if D1 also brings in D3 - D2 can assert cross-claim against D3
- 3rd party D can assert claims against original P that the 3rd party P
(orig D) has against P
- why? Protects D3 from D1 having a shitty lawyer
- even if D1 waives some defenses, D2 can assert
them against P
- can have claim from D2 to P - if it arises out of same facts as original claim
between P and D - called a claim - since D2 and P aren’t opposing parties
- then P has to answer and assert any compulsory counterclaims
- P can assert claims against D2 - assuming it’s out of same
transaction
- then D2 has to answer and assert any counter-claims
- D2 can implead D3 - under indemnification
- D2 would then be 4th party P and D3 would be 4th party D
- if D asserts a counter-claim, P can bring a D for indemnification
(1) Toberman v. Copas
- Ts were injured in car accident and file suit against various Ds including Menedez
- M files suit against 3rd party Ds - Swarthour and St Johnsbury
Trucking Co
- 3rd party Ds file motion to dismiss - 12b6 - and 12b1 (no subject
matter jxn)
- they were arguing that there was no supplemental jxn - it
wasn’t related enough
- real focus of court is whether M’s claim was proper 3rd party
complaint under rule 14
- does D need to establish personal jxn over added 3rd party Ds?
- yes - always have to have personal jxn (sufficient minimum contacts
or wouldn’t violate traditional notions of fair play and substantial
justice)
- there does not need to be an independent basis for subj matter jxn
for 3rd party complaint
- if it truly comes in under rule 14 - is supplemental jxn
- court ultimately said this wasn’t a proper 3rd party complaint - since they
were saying that 3rd party D was wholly liable for P’s injuries - and this isn’t
good
- if stuff like this could come in - might have collusion with orig P and
D to fabricate subj matter jxn
- rule says that D must say that 3rd party is liable to D1 - not to P
directly
- this is called derivative or secondary liability
- this derivative liability requirement will guard against any
collusion by P and orig D
xiv.Interpleader (Rule 22) and Statutory Interpleader: Stakeholder’s Remedy
- in its purest form, interpleader involves a stakeholder - someone who has
some amount of money
- stakeholder doesn’t know who is entitled to the money - there are lots of
people claiming it - so this allows stakeholder to put money into court and let
parties fight over it
- most common stakeholder is insurance company or escrow agent
- reason you want to do this - stakeholder is usually the P
- people claiming rights to money are claimants
- if stakeholder pays one of the claimants, they are going to be liable to
other claimants
- affirmative interpleader - when stakeholder files lawsuit against claimants
(usually what happens)
- determine if it is an appropriate cause of action for interpleader - if it
is, pays money into court or bond is posted
- then stakeholder requests to be dismissed from lawsuit
- if arguments are valid, stakeholder is dismissed and claimants
fight it out b/n themselves
- defensive interpleader = when D asserts interpleader in crossclaim or counter-claim
- when P sues escrow agent to get money back
- this would be a compulsory counter-claim
- 2 types of interpleader 1. Rule 22
- basis for subj matter jxn is claimants all from same jxn, but
different from stakeholder - complete diversity
- amount in controversy is more than $75K
excluding interests and costs
- venue - sec 1391a - various requirements there
- rule 4 service of process - have to establish
personal jxn
- only reason you use this is when stakeholder and claimants
are from different state - but claimants all from same state - so
statutory interpleader isn’t available to you
2. Statutory
- minimal diversity - at least two claimants have to
be diverse
- amount in controversy - more than $500
- venue - more liberal - where any of claimants
reside
- service of process per rule 4k
- as long as you have a valid interpleader can serve them anywhere
- since someone with interest in money should
be given notice of lawsuit
- they have opportunity not to raise a claim if
they don’t want to
(1) State Farm & Casualty Co v. Tashire
- accident between bus and truck; 2 passengers killed, 30 injured
- 1st step taken - 4 injured passengers file suit in CA state court separate lawsuits
- they sue Greyhound, Nauta (bus driver), Clark (drove truck) and
Glasgow (passenger and owner of truck)
nd
- 2 step - State Farm brought interpleader action in OR dist court - naming as
claimants anyone who has claim about accident (they insured Clark - up to
$20,000)
- they wanted all potential claimants to assert claims
against Clark in one action
- this wasn’t true interpleader - since in the alternative, they said that
they weren’t liable to Clark - since he was driving someone else’s car
- so this makes them a claimant too - and makes it in the nature
of interpleader, not true interpleader
- dist court exercised its authority to enjoin other proceedings
- 9th circuit reversed this decision and said this wasn’t appropriate
case for interpleader
- claims weren’t liquidated yet - since no one had a judgement against
State Farm yet, they weren’t liable yet - so they couldn’t interplead
- Sup Ct - disagreed that you had to liquidate a claim first - since then there
would be a race to judgement
- statute says “or may claim” - implying that you don’t have to have a
claim on day one - just the potential for a claim later
- dissent - agreed with 9th circuit
- reasoning based on language of insurance policy itself - aren’t
obligated to pay until judgement was entered
- majority would likely respond with public policy rationale
- majority holding - interpleader was appropriate remedy here
- what about broad nature of injunction? This wasn’t appropriate
- court says injunction should only go to issue of Clark’s liability - not
to Greyhound and bus driver’s liability
(2) Transfer for Consolidation
xv.Intervention (Rule 24)
(1) American Lung Association v. Reilly
4. Discovery
- this is when the real factual development takes place - most important part of litigation
process
- per FRCP - forces adversaries to show their hand in litigation
- basic premise - parties to litigation are entitled to know what facts other parties
possess
- hope this will lead to early resolution - and no surprises if it does go to trial
- why is focus of discovery to develop facts?
- to avoid surprise - want to know everything, getting an objective version
- need to preserve evidence - since witnesses get sick, die, move away
- streamline your case
- eliminate points of agreement so you can narrow the facts and evidence that is
ultimately
introduced
- how could weasel lawyer use discovery?
- drag out litigation; ask questions that make people spend a lot of money; give way too
much information - to hide the important stuff
- how to prepare for discovery - try to set a goal - settlement, summary judgement, trial, etc
- conduct discovery with these goals in mind - ie - if summary judgement, get stuff
admitted so there isn’t much in dispute
- develop a theory or theme for your case
- develop facts to support your closing argument
- but still be flexible, in case you need to change
- methods to employ to develop your case
- informal methods
- should always begin with this
1. Interview potential witnesses - so if they aren’t good for you it isn’t
under oath
- always have 3rd person present
2. Affidavits - sworn statement witness is going to be bound by
3. Private investigator
- people are sometimes more willing to talk to these people, but still have to
do things legally
- formal methods
1. Voluntary disclosure
- parties are required to disclose these things - certain people,
damage calculations, etc
- information that is going to be turned over in the case later
anyway
2. Interrogatories
- written questions that are posed to another party - cannot be
posed to non-party
- required to respond under oath - and this is now evidence
3. Request for production of documents or things
- written request to ask for documents and other tangible things
4. Request for admission of fact and genuineness of documents
- can ask opposing party to admit certain facts - if they don’t admit what is
true, they can be penalized for this
- if you get them to admit it, the fact is settled and no longer in
dispute
- good tool for summary judgement and to streamline the case
- authenticity of documents is admitted - most tedious process at trial is to
prove that documents are genuine - so get this out of the way before trial
5. Deposition
- sworn testimony of a witness - lawyer asks questions and record
is made of this
- can also take deposition through written questions and answers - but this
isn’t very effective - since you can’t follow up if answer is too ambiguous
6. Subpoenas
- utilized to get information from non-parties, requires them to
produce some information
- problems that can arise
- lying - in deposition or interrogatories
- destroying documents
- conducted in harassing or intimidating manner
- evasive responses
- overproduction of documents - dumping documents
- rule 26
- disclosure has to be made within 14 days after conference - unless party objects
at conference
- parties brought in after conference have 30 days
- have duty to respond in timely fashion with information you have - also have duty to amend
or supplement
- pre-trial disclosures - have to disclose anything that you will or might use at trial
a. Discovery Reform
- mandatory disclosure - under rule 26a
xvi.Chalick v. Cooper Hospital
- P wanted to amend complaint under rule 15c to add D physician
- at time complaint was filed, he didn’t know name of all the Ds so used fictitious names
- D’s response to motion to amend the lawsuit - statute of limitations had run with regard to any malpractice claim
against Dr Burns
- it wouldn’t relate back to original complaint - since Burns would
have no notice that he was being sued
- per 15c - party has to have notice that he is being sued
- court found disclosures submitted by the Ds deficient - provided Burns’
name, but didn’t provide address or basis of his knowledge - as required by
rule 26
- punishment court put on the Ds
- Ds were barred from saying Burns didn’t have knowledge
of lawsuit
- this is the court’s equitable remedy - they can’t deny he
had notice anymore
- remedy here isn’t purely out of equity - there is a rule that makes violation of
mandatory disclosures a very serious violation - rule 37c1
- was the remedy appropriate here?
- court seems to say that it is the D’s duty to disclose more than it’s the
P’s duty to discover
- although the P’s attorney should have inquired further
- only real explanation is that this is an obligation on the D - you’d better do
what the rules say or you can be precluded from using evidence
- why have this requirement?
- court doesn’t want judicial process to be about investigating, but
about discovering the truth
- judicial economy
- it’s going to be disclosed at some point later anyway - so might as
well get it in the beginning - also, shouldn’t have to put all your
resources towards this
- under current version of rule 26a - would Ds have been required
to voluntarily disclose?
- if they are going to use him as a defense, yes
- they don’t have to disclose things that hurt their case, but if you are
going to use it or may use it, for your defense, you have to disclose
b. Scope of Discovery
xvii.Relevant to the Subject Matter
- discoverable information - any matter, not privileged, that is relevant to the
claim or defense of any party
(1) Blank v. Sullvan Cromwell
- involved the old limitation - information “relevant to the subject
matter”
- Ps were women law school grads who unsuccessfully applied for associate
positions at D’s lawfirm - claimed firm discriminating on basis of sex
- served interrogatories on the firm
- firm responded by saying that they didn’t have to respond, since it wasn’t
relevant to subject matter - interrogatories were about women getting
partnerships
- D objected by saying that subject matter of suit is the hiring of women, not
promoting them to partner
- Ps file a rule 37 motion - motion to compel discovery - make
other side answer
- motions to compel - specifics - first, have an obligation to meet and confer with other side in good
faith in an effort to resolve the discovery suit
- if you can’t work it out - then file a motion to compel
- along with motion - submit a good faith certificate saying you made a
good faith effort to resolve dispute and failed to do so
- court ultimately told Ds to respond to the interrogatories
- discovery was relevant - since it would tend to show that there was
an overall bias against women
- court has broad discretion - issue was phrased as whether the information is
so unrelated -so it’s got to be really really unrelated for the court to conclude
the info can’t be discovered
- discovery is very liberal - since judges are concerned with being overruled,
and will tend to err on the side of finding almost anything relevant
- what does relevant mean?
- fed rules of evidence - “evidence having any tendency to make the
existence of any fact that is of consequence to the determination of the
action more probable or less probable than it would be without the
evidence”
- anything that is going to have any bearing on the issue in
the case
- how would case come out under current standard - of relevant to
any claim or defense
- come out the same - since it could have a bearing on their
claim
- court has discretion to order the same scope of discover that existed
under the previous rule - since it says - for good cause - the court may
order discovery of any matter relevant to the subject matter
- even if the evidence isn’t admissable, court can still order discovery if it is
reasonably calculated to lead to admissable evidence
- does firm have any other options - other than turning over
interrogatories?
- can settle; can arrange for secret settlement
(2) Other Limitations on Discovery
- 26b2 - limitations
- allows court to limit number of depositions, interrogatories and
monitor discovery
- can also seek protective order - motion with court after trying to work things
out with other side - order saying you don’t’ have to give over information
- common area for this is trade secrets
- rule 26g2 - puts teeth in limitations requirement
- incorporates unreasonable, undue burden requirement
- parties can’t discover information that is privileged
(3) Unduly Burdensome or Expensive
xviii.Any Matter not Privileged
(1) Privileges in Civil Litigation
- most common is attorney-client priv
- 5th amend priv against self-incrimination
- state recognized privs - governed by state law
- priest-penitent, accountant-client, doctor patient
- work product doctrine
(a) Hickman v. Taylor
- case with regard to scope of work-product doctrine
- involved sinking of tug boat - some crew members died
- owners of tug hire a law firm - lawyer Fortenbaugh - to defend them
against any potential suits
- attorney interviews survivors and took signed statements
- also interviewed witnesses to accident and made memos
regarding what they told him
- eventually, rep of dead dude files lawsuit against tug owners - and
serves interrogatories demanding material lawyer had gotten
- D refused to give this info over - saying it was protected
by atty-client priv
- lawyer identified who the people were - but not his
memos
- trial court said info wasn’t privileged and interrogatories had to be
answered and documents had to be produced
- lawyer refused to turn over documents and went to jail for
this
- he couldn’t appeal - since it’s just a ruling on
discovery
- Sup Ct first concluded that info wasn’t covered by attyclient privilege
- since it wasn’t between the client - but a 3rd party
- info was protected by the work-product doctrine
- why protected?
- other side could interview the people and
get the same info
- it isn’t appropriate for other side to use this lawyer’s
work to make sure they have covered their bases
- information prepared in anticipation of litigation is protected
by work product doctrine
- there may be certain situations where you can get the info where there is hardship in trying to get the info (death, moved
away)
- but P here didn’t show any of this
- what is really protected is what the lawyer does, not the
information that comes from the witness
- real issue - is that you don’t want lawyers to be able to delve into
what is going to be the strategy of the other side
- so lawyers don’t get lazy
- can only get at information that is work product if you can
establish that you
can’t obtain the substantial equivalent by other means or you can’t get it
without undue hardship
- exceptions to general rule - statement previously made by your party to another party
- can get this because you made the statement
rd
- the 3 party can also get their statement from the lawyer
who took it
- some sneaky lawyers will get around this by getting the 3rd
party to get their statement and give it to them
- protect against this by not writing everything
down
- what about documents that reflect the mental impressions of
counsel?
- need undue hardship and substantial need and other stuff - need more
stuff to prove that you need this
- this is per rule 26b3 - opinion work product
- court shall protect against the disclosure of mental
impressions, conclusions, opinions, or legal theories from the
atty or other representative of the party
- so court says to just “white out” the impression stuff if the
party can prove the need to get the facts
- this is more difficult to get than regular work product
(2) Attorney Client Privilege
- this is stronger than the work product priv
- many say this is the most sacred legal concept - since it allows clients to trust
lawyers and helps lawyers feel loyalty to the client
- this priv casts a veil of secrecy on the communications between
lawyer and client
- applies only to disclosure that was made for the purpose of obtaining legal
advice - so things said in passing don’t count
- this will always be narrowly construed
- to be protected - must be a communication - oral or written
- made in connection with the obtaining or rendering of
legal advice
- between the client and the atty or other privileged persons
- has to be made in confidence - without other people
around
- this information can be privileged forever - even after dude is
Berlin v US
- client can waive the atty client priv - ie by giving copy of
dead - per Swidler and
confessino to someone else
- this is the client’s priv - not the atty’s
- atty can also waive the priv - if the lawyer is acting through the
scope of litigation
- ie - accidentally turning in documents in discovery
- although if you have a process to safeguard against this and it still
happens and you try to get it back right away - most courts will say
you haven’t waived
- if someone else tells people, the priv is still not waived in the
courtroom
- exceptions to atty-client priv - present crimes - this is the crime-fraud exception
- lawyer self-defense exception - to disclose priv info if you are trying
to get your fee
- when client sues you for malpractice
- if goal is truth, why have such broad protections for the priv?
- policy rationale - risk client won’t tell lawyer what he did, maybe
lawyer can talk him out of it
- priv is narrowly construed - this protects it from applying
to too many things
(3) Scope of Work Product and Anticipating Litigation
(a) Upjohn v. US
- addresses A-C with regards to corporation
- company instigates an internal investigation with regards to
fraudulent accounting practices
- carry out investigation by - Chairman of Board sends out questionnaires and says to
return them to Thomas - company’s general counsel
- followed up with people who answered questions and wrote
down these interviews in memos
- sent preliminary report to IRS/SEC and then IRS demanded
production of all info gathered during internal investigation
- P objects - based on A-C priv and work product priv
- difference between A-C priv and work product prive
- A-C - want it to be this, since then there is
absolute protection
- work product - there is a chance that D can make necessary
showing and get these documents
- court of appeals used “control group” test to determine
scope of A-C priv
- only people who qualify are those who have an influence on
management and operations of the corporation; more
specifically, people authorized to act on advice of counsel
- Sup Ct didn’t agree with this - said any person who is part of
corporation should have priv - since they too will have info that needs
to be protected
- says the control group test only considers the rendering of
legal aid part, and not the obtaining information part
- some concerns about broadening the test this much - that there will
be a zone of silence - but this isn’t realistic - since you can distinguish
between fact and the communication as a whole
- what could lawyers for IRS done? gone to the people
themselves
- closest thing we get to a test in this case - “communications were
made by P’s employees to counsel for P acting as such, at the direction
of corporate superiors in order to secure legal advice from counsel”
- most importantly, the information has to be kept
strictly confidential
- privilege log - rule 26b5
- log that describes in detail what you are holding back from discovery
- so the judge can decide whether these things are privileged
- typically, you’ll object and then the other atty will ask for
a priv log
(4) Lifetime of the Privilege
(a) Swidler & Berlin v. US
(5) Role of Privileges in Assuring Accurate Outcomes
(6) Administering a Claim of Privilege
(a) US v. Construction Products Research
xix.Adversary’s Experts
(1) Berkey Photo Inc v. Eastman Kodak
(2) Cordy v. Sherwin Williams Co
(3) Coates v. A C & S
c. Interrogatories
- written questions, served on other parties, other parties must answer in writing
and under oath
- objections are signed by the lawyer
- lawyer will sign end of response consistent with rule 26g and attach verification
of indiv who answered
- if you don’t raise objections, these are waived - per rule 33b4
- answers and objections have to be served within 30 days, parties can get more time with
permission from the court
- these are only served, they aren’t filed with the court - unless you are going to
use them in the case
- limited to 25 interrogatories - includes discrete sub-parts
- other written discovery tools
- request for production - rule 34
- forces other party to produce documents for turning over or
examination
- no limit on these
- not supposed to dump documents - per rule 34b - produce in
manner they are kept
- have to respond in 30 days, raise objections when you respond
- request for admission
- can get document authenticated, fact admitted
- no limit, can get into trouble when you have to admit part and
deny part
- subpoenas - way to get information from people who aren’t parties
- to make them show up for deposition, trial, or give information
xx.Rozier v. Ford Motor
- P’s husband killed when 1969 Ford Galaxy was hit and fuel tank
exploded
- P sued for under products liability - location of fuel tank wrongful death suit
- during discovery, P served interrogatories, inquiring into existence of any
cost-benefit analysis relating to vehicles similar to this car
- also wanted written reports regarding advantages/disadvantages
regarding alternate fuel tank placement
- D initially responded by saying that the question didn’t relate to
case or vehicle at issue
- relevance objection
- trial court grants P’s motion to compel
- D then said that there would be no formal cost-benefit analysis (so then why
did they object to relevance the first time?)
- case went to trial and P lost
- 10 months later, P’s counsel discovered “trend-cost estimate” that
wasn’t produced by D
- P moves - per 60b3 - to vacate the judgement and move for new
trial
- said this document hindered P’s ability to fully and fairly
litigate the matter
- D said they didn’t know about document, and it didn’t fall under
cost-benefit analysis
- court of appeals said that they should have produced it
- interrogatory requested any written analysis
- argument that it was too late was crap - since they have duty to
update/supplement per 26e
- court believes that person who found it wasn’t involved with trial,
but still comes down hard on Ford
- remaining issue - did document affect P’s ability to fully and
fairly litigate the issue?
- court says yes - P was trying to prove that Ford needed to update
warnings - not only fix the mistake
- if they knew about the document, P could have focused on this theory
more and might have won
- court found Ford fraudulent - intentionally didn’t disclose and knew that it
would make a difference in this case
xxi.Responding to interrogatories
- copies interrogatory, sends to client, might or might not meet with client to
get documents
- potential problems with this approach:
- no incentive for employees - since it’s outside their job and they
don’t know how important it really is
- might be asking the wrong person - how company is
organized
- employees don’t understand nature of stuff sought and shouldn’t
make judgement calls about what is important and what isn’t
- employees leave - have to figure out who the person is
and get information
- amount of information can be huge and in many places
- attorney who drafts interrogatories - don’t leave weasel room - be precise
- general interrogatory pointers - don’t repeat requests for information that you are entitled to under
mandatory disclosure
- don’t say exactly what you are going - be subtle, ask about people
involved, not information you want
- define what you mean by list
- don’t over-qualify your terms
- don’t be too broad or too narrow
- objections to interrogatories
- information is privileged
- information is beyond their possession
- relevance and/or materiality
- information is unduly burdensome - per 26b2
- currently investigating things, so it may not all be there
d. Depositions
- typically where you get the good information
- rule 30 deposition - allows you to question the witnesses live
- record them, have someone there authorized by law to administer oaths
- videotape the deposition if you have enough money
- to see physical reactions, control atty behavior, use at trial - since it’s
more interesting to watch
- people present - witness, counsel for witness, counsel for all parties involved in
the lawsuit
- schedule by contacting the atty and then send formal notice
- rule 30d1 tells what you are supposed to do as a lawyer defending a deposition
- can object to stuff that is privilege, form of question or responsiveness of
question
- these are waived if they aren’t objected to
- how to prepare the witness 1. Tell the truth
2. Listen to questions and don’t volunteer information
3. Want witness to pause before they answer - to give lawyer time to
object
4. Tell witness not to feel compelled to answer every question - it’s fine to
say they don’t know
5. Explain format of deposition
6. Go over some factual information and even possible questions
- objections in depositions
- waived if not made
- except objections to form of question and responsiveness of answer
- can usually raise competency, materiality, or relevance objections later
- 32d3a and b
- even after objecting, lawyer has time to fix question and witness has to
answer
- problems regarding notice has to be in writing - or else it’s waived
- qualifications of court reporter
- 10 deposition limit
- rationale - encourage counsel to be more efficient in planning of
discovery
- 30d2 - limit to one day of 7 hours of actual deposition time
- rationale - unprepared lawyer, prevent lawyers from being abusive and
dragging them out
- corporate depositions - rule 30b6 - in notice, describe what information you want and it is the corporation’s
responsibility to designate the individuals
- no matter how many people they designate, it counts as one deposition
for purposes of 10 limit
xxii.Paramount Communications v. Viacom
- Jamail is a jerk and calls the lawyer a maggot
- most common type of abuse is - long winded objections
- take breaks at inopportune times
- call names, etc
- how to handle this type of situation - rule 30d2 - tattle to the judge - then can get more time to
make up for mean atty
- this isn’t the best idea - judges are busy, likely to get frustrated with
you for not working it out
- judge can order deposition at courthouse, sit in on deposition or be on
phone stand-by in case there is an issue
- put yourself in the best position for when it goes to court
- maintain composure and behave
- establish a record of abuse
- if you don’t have a video, state for the record what is
going on
xxiii.Other items
- settlement - consider this most once discovery has been completed
- most cases settle, this is generally viewed as positive by
court and parties
- rule 16 - court has discretion to order attys to appear before it for
pre-trail conferences
- pre-trial orders
- parties have to prepare this before trial - list all
information about the trial
- after pre-trial conference, judge signs this and it become
order of the case
- can only be amended to prevent manifest injustice
xxiv. summary judgement
- prior to getting to pre-trial conference, D will file for this
- try to convince the court that the case is so one-sided that it needs to be
decided without going to trial by the court as a matter of law
- majority of these are denied
- so why file?
- good tool for educating the court first
- can simplify your case - if you get summ judg with regards to one
part of your case - per rule 56d
- when being considered, facts are viewed in light most favorable to party not
moving for summary judgement
1. Adickes v SH Kress & Co
- white school teacher arrested for eating in a black
restaurant
- focus on D’s motions for summary judgement
- facts show no conspiracy between D’s employees
and police
- evidence that D shows:
- affidavits from police saying no conspiracy, deposition from
store manager saying no conspiracy
- P responds by saying that D shouldn’t get summary judgement
because, due to sequence of events, a jury could infer a conspiracy based on her own testimony
- Sup Ct reversed motion for summary judgement
- inferences can be drawn from material issues of
fact
- burden of proving there was no material issue of fact was on
the moving party and in this case it hadn’t been met
- view facts in light most favorable to non-moving
party
- D failed to show an absence of a genuine issue of
material fact
- problems with evidence under Rule 56?
- relying on her own statement is bad, since she doesn’t have
first hand personal knowledge
- can’t point to your pleadings as evidence to support denying
motion for summary judgement
- the un-sworn statement also lacks sufficient
evidentiary support
- so really, there was no evidence presented here - since all of it
sucked per rule 56
- last two sentences of rule 56 - explain why Sup Ct wasn’t
wrong
- D didn’t satisfy his burden to make the P produce
substantive evidence
- D had to come forward with evidence to show there was no
issue as to any material fact - and didn’t do this
- after this case, summary judgement was viewed as a long
shot
- until 1986 - when Sup Ct addressed it and it
became a more useful tool
2. Celotex Corp v Catrett
- case for summary judgement everyone cites
- wrongful death action for widow of man who died from
company’s asbestos
- D claimed P had no evidence that linked the death to
asbsetos products
- dist court granted the motion
- appeals court reverses - no facts that showed the deceased had not
come into contact with asbestos
- Sup Ct said that key is who had burden of proof
- here, P had burden of proof - since her claim was
causation
- so, if this is the case, D doesn’t have to show affirmative
evidence that P hasn’t proven her case
- all D has to show is that there is nothing in the record that
supports an essential element of P’s claim
- how to reconcile Adickes with Celotex?
- in Adickes - D has burden of somehow showing there is no genuine
issue of material fact
- Celotex told us how you go about carrying that burden of
an absence
- one way to do that is to point to absence of proof in the record
or the case itself to show that P isn’t going to be able to carry
its burden as to an essential element of the case
- movant does still need to reference the evidence that is already there and
show how it doesn’t carry the burden
- you actually have to submit to the court that they didn’t prove stuff
but you don’t need to submit affirmative evidence
- you may have to do something affirmative - and then point to
evidence or lack of evidence
3. Standard for Summary Judgement (motion for directed verdict)
- no legally sufficient evidentiary basis for reasonable jury to find for
party on a particular issue
- issue will have some bearing on the claim itself
- to avoid directed verdict (which is typically asked for by
D)
- P has to satisfy the burden of production - P has put forth
sufficient credible evidence to make the issue debatable
- can move for this after P’s evidence
- can also be moved for after D puts forth evidence
- these are usually denied
4. 3 burdens
- burden of pleading
- state enough in pleading to avoid motion to
dismiss
- burden of production
- burden of making issue debatable
- burden of proof/persuasion
- this is ultimate burden in the case - P always has
this as to P’s claim
- standard may vary - clear and convincing,
preponderance
- with regard to affirmative defenses, D has burden
of persuasion
4. The trial
a. rules allowing for disposition before a trial
1. Rule 55 - default
- when party that has to respond fails to respond
2. Rule 41 - voluntary dismissal and involuntary dismissal **most important**
- 41a - voluntary dismissal
- sometimes, all you have to do is file a notice of dismissal - only before your
complaint is answered or before filing motion for summary judgement
- other way - filing a stipulation of dismissal signed by all parties who have
appeared in the action
- this dismissal is without prejudice - so you can file again
- if you have already dismissed once, 2nd time will be with
prejudice
- can also file a motion with the court requesting dismissal without prejudice
- 41b - involuntary dismissal
- brought by the other side - failure to prosecute, violating a court
order
- this dismissal is with prejudice
- 41d - penalties
- might have to pay costs associated with dismissed lawsuit if you
file action again
3. Rule 54
- 54d - relates to costs associated with action - prevailing party is entitled
to costs (not atty’s fees)
- 54b - judgement on multiple claims
- if you have a final judgement, have right to collect
- can have judgement entered as to part of your case - important
during bankruptcy cases
b. Seventh Amendment right to jury trial
- Ps typically want a jury, D would rather have a judge
- no one gets jury trial unless they are entitled to it
- 7th amend sets forth right to trial by jury
th
- 7 amend requires courts to change modern claims into 1790s claims and then determine
whether it would be in court of law or court of equity
- law = jury; equity = no jury
- today, if claim is deemed analogous to or identifiable with claim at common law that would
have been heard by a court of equity, there is no right to trial by jury
- court of law = legal claim = yes trial by jury
c. Interpreting the 7th Amendment
1. Historical test - Curtis v Loether
- P claimed that she was being denied housing because she was black; P
sued LL under title 8
- she wanted injunctive relief, actual damages and punitive damages
- under the act, she could get injunctive relief, actual damages,
punitive damages, TRO
- act expressly allows private suits
- LL wanted jury trial
- trial court said there was no right to jury trial and awarded $250 in
punitive damages
- Ps argue against right to jury trial - literal interpretation of 7th amend - no right to
trial by jury under modern statute
- court rejects P’s argument - says that new cause of action needs to be judged under
historical test - whether it’s more like law or equity
- court says this was legal in nature and there was a right to trial by jury why?
- this is like a regular tort action - and tort is like a regular claim at
law
- how does court say prejudice of jury is protected against?
- judge still has ultimate control
- can make directed verdict, judgement notwithstanding the
verdict
- some good came out of having these cases tried by jury
- show more people about civil rights laws
- then people would realize there are these things happening and know
that there are laws to protect against it
- 7th amend commands it
d. Preserving the Right - Order of the Trial
1. How to ensure you have exercised your right to trial by jury
- include in your prayer for relief
- have to demand it - called a jury demand - and have to do this in writing
- 38a - right of jury has to be preserved inviolate
- 38b - indicates timing of demand
- at any time after commencement of action and not later than 10 days after
serving last pleading relating to issue
- if you fail to file a demand, you have waived your right
- 39b - upon motion, court can order trial by jury
- if you demand a jury trial, are you stuck?
- 39a - yes - unless parties consent to no trial by jury
- by written report or oral admission in court
- or court can do this on their own - if they discover you
aren’t entitled to jury
- if there is no right, you might still be able to get a jury trial
- 39c - upon motion or court’s initiative
2. Beacon Theaters, Inc v Westover(judge)
- P was Fox westcoast theaters and had theater with contracts to show first
run movies
- contract also granted clearances - period of time during which no other
theater in area could show same movie
- D Beacon build drive-in and wanted some movies - claimed that P was
violating anti-trust laws
- P claimed that D’s threats were depriving it of the right to negotiate for contracts which was a valuable property right
- Fox files lawsuit against Beacon - seeking declaratory relief (weren’t violating antitrust laws) and injunctive relief (stop B from bringing lawsuit)
- B counterclaims for damages under anti-trust and demands jury trial
- dist court’s response - claims are equitable - so they will be tried 1st
without a jury
- then counterclaim will be tried 2nd with jury
- appeals court affirms - says trial court is using their discretion
- Sup Ct says - didn’t agree with lower court’s finding that F’s complaint sought equitable
relief - especially the declaratory relief part
- says that the claim and counter-claim are essentially the same - and just
because they are different remedies sought, doesn’t change their status from
equitable to legal
- first, court looked to the standard for injunction
- to show there is a basis for injunctive relief - have to show that there was
irreparable harm and inadequacy of legal remedies
- court said that dist court essentially applied injunction analysis to
entire case
- big question - if B’s claims at law were tried first, would F suffer
irreparable harm?
- court said that it would have no impact - since F would be able to
raise these claims as a defense
- if you try the equitable claims first without a jury - lots of problems
- split the case and only be able to try to get injunction part
- only protection F would get is protection against having trial by jury although this isn’t really a protection
- under injunction analysis - it makes more sense for jury triable issue to
go first
- this is the general rule, since court is concerned about right to
trial by jury being inviolate
- court recognized that there might be situations where equitable claims
were tried first
- if there would be significant irreparable harm
- discretion is very narrowly limited here - since we are concerned
with a const right
- dissent - didn’t agree that right to trial by jury has to be first - since trial court has
discretion to manage the case
e. Taking the Case Away: Judgement as a Matter of Law
1. Galloway v United States
- Galloway went crazy while in the military - brought suit to recover
disability benefits
- US insured him for disability for injuries happening during his military
service
- he had to show permanent and continuing disability and that it happened
before 1919 (when he was discharged)
- after P put forth all his evidence of when he became nuts, D moved for
summ judgement
- dist court granted and court of appeals upheld
- said P had failed to come forth with sufficient evidence to satisfy the burden
of production - given the evidence, no reasonable jury could have found in
favor of P
- Sup Ct seemed to agree - evidence between 1922 - 1930 was weak
- he was trying to prove insanity during this time through inference - he was
crazy before and crazy after
- court said they weren’t going to infer this - since if he was crazy, there shouldn’t be
a vacuum of evidence
- constitutional argument - that summary judgement (directed verdict)
th
takes away 7 amend right
- P argues - there are times where it’s proper to take matter away
from jury
- demurrer, motion for new trial, ruling on evidentiary
matters
- P said that directed verdict was different from demurrer and
motion for new trial
- unless consequences of summ judg are end of case (from demurrer)
or adversary getting another chance (from motion for new trial) - then
summ judg is wrong
- court says that we don’t apply every procedural nuance from 1791 and
apply this now
- also shows that demurrer and new trial aren’t that different
- dissent - thinks motion for directed verdict should have a higher standard - when there
is no room whatsoever for honest differences of opinion over factual issues in
controversy
- should be a high burden on the D - since if it’s granted, it takes
away P’s jury right
- thought that there was enough evidence in this case to let issue go
to jury
2. Standard for motion for directed verdict
- rule 50a1 - no legally sufficient evidentiary basis for the claim so that no reasonable
jury could return a verdict with regard to particular issue
- standard also includes requirement in viewing evidence
- light most favorable to non-movant
- all reasonable inferences must be construed in favor of nonmoving
- mere scintilla of evidence is insufficient
- 50b - renewed motion for judgement as a matter of law - judgement
notwithstanding verdict
- can only move for this if they moved for directed verdict at close
of evidence
- since then the judge wouldn’t be re-examining the jury’s verdict, just
re-considering this motion
- will probably be denied - even if judge thinks that it’s valid
- since then will avoid re-trial if it is overturned - saving
judicial resources
- jury might go way judge thinks it should go - and jury verdicts are
much less likely to be overturned on appeal
- rule on motions quickly - might not have enough time to
gather evidence
3. Motion for New Trial
- party has 10 days from date of entry of judgement to file this motion
- motion for judgement notwithstanding the verdict - only concerns legal
sufficiency of evidence
- motion for new trial - has lots of other things - legal insufficiency, wrong
evidentiary rulings
- standard for this motion isn’t very high - court finds verdict goes against the weight of the evidence
- it could be that a reasonable jury might have returned verdict for P, but now
court can weigh evidence
5. Collateral Effects of Judgements
a. Claim Preclusion - Res Judicata
- party may not re-litigate the same claim against the same parties if there has been a valid
final judgement entered
- 4 parts
1. Valid, final judgement - notice, subject matter jxn, personal jxn
2. On the merits - rule 41b
3. Same parties
4. Same claim
- barred - when you lose on the first action and can’t assert a similar claim in 2nd
action
- merger - when you win on the first action and can’t assert a similar claim in 2nd action claim could have been raised in 1st lawsuit
- policy rationale for res judicata - so D doesn’t have to wonder if he’s going to be sued again
- want cases to come to an end
- judicial economy - free up judges to go on to other cases
- makes sense - since we have liberal pleading, joinder, etc
1. McConnell v Travelers Indemnity Co
- P - hubby and wife - injured in car wreck
- wife’s claim is her personal property
- husband’s claim was deemed part of community - in addition to wife’s
med expenses
- 1st suit - wife files personal injury claim - and husband adds on wife’s
med expenses
- 2nd suit - husband files personal injury claim and his medical expenses
- D files for summary judgement - saying that it was res judicata - since issue was
already “decided” when his claim for wife’s medical expenses was dismissed with
prejudice
- this was a valid final judgement on the merits
- is this the same claim? Court says yes
2. Federated Department Stores v Moitie
- court of appeals felt that it was appropriate to recognize an exception to
res judicata doctrine
- Moitie and other Ps file lawsuit claiming damages under anti-trust act
- lawsuit gets dismissed - 5 Ps appeal, M re-files in state court, alleging
state tort claims
- Ds remove this to fed court - saying claims were fed in nature - and then move to
dismiss based on res judicata - court dismisses
- while these cases are pending, Sup Ct decided a case that said Ps now have a valid
claim against the Ds - so the reason the cases got dismissed the first time don’t exist
any more
- 5 cases on appeal were reversed and remanded for trial
- with respect to appeal of Moitie - appeals court found there was res judicata, but
made an exception - said that non-appealing parties may benefit from a reversal when
their position is
closely interwoven with that of appealing parties
- says simple justice and public policy warrants this
- Sup Ct disagrees
- doesn’t think there should be an exception based on simple justice - since
there is no injustice here by applying well-recognized standards
- interest in res judicata in finality is most important interest here
- if we let courts make up touchy-feely exceptions, there will never
be certainty
- concurrence and dissent both argue that if res judicata applies, it should apply across
the board to fed and state law claims
- since state claims could have been raised in fed action
3. Counterclaims and Cross-Claims
i. Martino v McDonald’s System, Inc
- 1st lawsuit in case - McD’s and FRIC sue Martino and brothers
- alleging that Martino breached his contract by having stock in
another fast food restaurant
- outcome of case - consent judgement for Ps - court gave findings of
fact and conclusions of law
- 2nd lawsuit - Martino and corporation sued McD’s and FRIC
- allegation was that non-compete provision in contract
violated anti-trust act
- D’s response 1. 13a precluded it specifically - since it was a compulsory
counter-claim
- this isn’t a good argument - since rule applies when there are
pleadings, and judgement happened before answer
2. Res judicata
- this did bar the complaint - rule that any defenses that a party
has to P’s claim is part of the cause of action
- general rule when you have defenses that may also
be a counter-claim
- can file a separate lawsuit for this later - happens
when you don’t have 13a
- here, court recognized exception to general rule - logically
inconsistent exception
- if he won this lawsuit, this would be inconsistent with the
first lawsuit
- here, he’s essentially challenging the first decision - and can only do
this on appeal
b. Issue Preclusion - Collateral Estoppel
- prevents the re-litigation of issues actually decided in a prior action
- same policy rationale - enforce final judgements
- requirements 1. Valid final judgement
- judgement doesn’t necessarily have to be on the merits
2. Same issue
a. actually litigated and decided
- if you have consent or default judgement, argument is that the issue
wasn’t actually decided
b. full and fair opportunity
- by person against whom collateral estoppel is being
applied
c. essential to the judgement in the previous action
- can’t be some tangential issue that isn’t critical to the
decision in the case
3. Same parties
- this is called mutuality - requirement is that parties to 2nd action have to be
same parties to the 1st action
- this is usually present, but not required anymore
- non-mutual defensive collateral estoppel - where there was a finding in another case that
applies to an issue in your case - and D can assert this against a claim of the P
- non-mutual offensive collateral estoppel 1. Commissioner of Internal Revenue v Sunnen
- issue here involved the potential income tax liability of S from some
royalties
- Tax Court found that he was liable - except for royalties based on 1928
agreement
- so here, we have the same agreement at issue - and argument is that collateral
estoppel applies and he shouldn’t be liable for this years taxes based on 1928
agreement
- Sup Ct disagreed - res judicata doesn’t apply - since every tax year is a new cause of
action
- collateral estoppel wouldn’t apply - since laws have changed since then, so essentially - this judgement is now incorrect
- S didn’t have the opportunity to litigate in court under
new laws
2. Allen v McCurry
- can state court finding be binding on later fed action
- P was heroin dealer and state police officers went to his home
undercover
- P didn’t bring drugs to door, brought guns and then had gunfight
- after gun fight - cops found heroin in plain view and then looked in
drawers too
- got convicted on criminal charges in state court
- although an evidentiary ruling wouldn’t allow in evidence of heroin that
wasn’t in plain view - since this part of the search wasn’t valid
- D then filed a 1983 action against police officers - 4th amend issue illegal search and seizure
- PO’s response - barred by collateral estoppel - since criminal proceeding showed
that search was valid
- why not argue res judicata?
- different parties
- different claims - one was criminal, other was civil
- Sup Ct ultimately held that collateral estoppel did could bar his claim
- court really just ruled that D had no right to re-litigate the issue just because
it was in state court rather than fed court
- court remanded to trial court to determine if it was barred - which
is likely
- dissent - nothing in history of statue indicated that collateral estoppel
would be appropriate
- fed courts would be better to litigate this issue - since state courts would be
deciding about conduct of state employees
- D wasn’t a voluntary litigant in state court - so he was forced to raise this
defense or else waive it
- another problem - it’s not really the same issue - evidence
exclusion v 4th amend rights
- the proceedings would be so different, that it’s not the
same issue
3. Mutuality of Estoppel
- it used to be that strict mutuality was required - this meant that both parties had to
have been bound by the former judgement in order for collateral estoppel to apply
i. Parkland Hosiery Co v Shore
st
- 1 suit - stockholders filed complaint against PH for issuing false statement
about a merger - securities fraud case
- Ps were entitled to jury trial - since civil act with money
damages sought
- 2nd suit - SEC action against PH for same thing - sought
injunction, so no jury trial
- declaratory judgement was entered - saying proxy statement was
false and misleading
- shareholders in 1st case file motion for summary judgement on the false and
misleading issue - saying it had already been applied in other case
- dist court denies motion, appeals reverses
- Sup Ct
- 1st issue in the decision - whether mutuality was required for application of
offensive collateral estoppel
- biggest problem with making mutuality a requirement
- overburdens system - lots of needless re-litigation
- Sup Ct had already recognized non-mutual defensive collateral
estoppel
- problems with non-mutual offensive collateral estoppel
- P has incentive to take wait-and-see approach
- in defensive coll estop, P will join all Ds in one lawsuit, since
if he loses, he can’t sue anyone else = judicial economy
- in offensive - might have opposite effect - Ds who might want
to join will not wait to see if first P wins
- unfair to D - if damages sought in 1st claim are small, might not take
it seriously and assert all defenses
- also unfair to D when P claims collateral estoppel from a case where
most other cases have turned out differently
- might not be procedural safeguards in 1st suit - so D didn’t
litigate issue fully
- despite all these concerns - can assert non-mutual offfensive collateral
estoppel - it’s up to trial court’s broad discretion
- when is non-M off coll estop not going to be appropriate?
- when it’s unfair to D
- when you have wait-and-see Ps - when P could easily
have joined
- majority applied general rule in this case and said that coll estop
was permissible
- shareholders couldn’t have joined SEC action - no
possibility for wait-and-see
- shareholders filed lawsuit first
- no unfairness to D here - D had incentive to vigorously litigate SEC
action - since bad things typically follow
- SEC judgement wasn’t inconsistent with previous
decisions
- no additional procedural opportunities in shareholder action that
would have changed the result in the case
- this is where dissent gets pissed
- 2nd issue in case - whether use of non-M off coll estop in this case would
violate D’s 7th amend right to jury trial
- since SEC didn’t have jury, seems to violate this - if you say that
judgement is coll estop for shareholders’ case
- how did majority resolve 7th amend issue in this case?
- focus on loophole in Beacon - you can litigate equitable
claims first
- no link between mutuality and jury trial (response to P’s
argument I don’t get)
- dissent
- 7th amend should take priority - judges can’t take away
trial from juries
- trial judge shouldn’t have discretion when non-M off coll
estop should apply
- fairness argument - procedures between SEC action and
jury trial are huge
- general rule after PH - courts have broad permission to permit non-mutual
offensive collateral estoppel
- only situations where it isn’t appropriate is where it would be unfair
to D or where P is wait-and-see