Subject Matter Jurisdiction

Subject Matter Jurisdiction  Plaintiffs can almost always file in an appropriate state court; except: o admiralty and maritime cases o bankruptcy cases o patent, plant variety protection, copyright/trademark o antitrust o securities  Why? All of these have a certain national significance that requires a certain uniformity of deciding  When can they file in federal courts if Congress chooses to extend federal jurisdiction to them? o arising under the Constitution, the Laws of the US, and Treaties” o “between citizens of different states” o Congress believes that these implicate national concern, so parties should have the right to a federal judge  Concurrent jurisdiction: if either a fed or state court can hear a particular case  Exclusive jurisdiction: if only a fed court can hear a case

Diversity Jurisdiction  Article III, Section 2 permits Congress to vest federal courts with jurisdiction to hear cases between “citizens of different states.” Congress did so in 28 U.S.C. §1332(a)(1).  Goal to eliminate bias against out of state D  To be a “citizen”: o Must be a citizen of the US o Must be domiciled in that particular state (a person can only be domiciled in one state)  Domicile: o Determined at date of filing o animo manendi: intention of remaining o change of residence + o intent to remain indefinitely (no definite plans to leave) o Tests that ARENT used . change of residence + intent to remain permanently . change of residence + intent not to return to original state of residence  Gordon v. Steele o Gordon files in Fed/Western District of Penn o D moves to dismiss on grounds of DJ; say that she is not diverse, and a resident of Penn o Court finds that she had no intention of returning to Penn o domicile test: residence + the intent to remain “indefinitely”

Complete diversity: Each P must be from a different state than each D; co-Ps and co-Ds can be from the same state  Vt + Mass vs. NH + Maine Minimal diversity: When one of the Ps or Ds are from the same state  Vt. + Mass vs. NH + Mass **Although Article III, Section 2 and Section 1332(a)(1) use the same language: “citizens of different states,” the Supreme Court has held that Article III permits minimal diversity, but that Section 1332 requires complete diversity. The latter is the famous Strawbridge rule.

**Mas v. Perry . Are Mr. Mas and Mr. Perry diverse? Why? Yes. Mr. Mas is domiciled in France, and Mr. Perry is in LA . Are Ms. Mas and Mr. Perry diverse? Why? Yes. Ms. Mas was domiciled in Miss. and Perry in LA . Married in Miss with Judy’s family, then return to teaching at LSU . Move to Park Ridge, Ill. . They filed in LA then moved to Ill . Jury finds in favor of Mass, but Perry appeals and files motion to dismiss based on DJ (a party or court can raise an issue of Subject Matter Jurisdiction at ANY time) . Court uses same test, but rules differently than in Gordon o Ms. Mas is considered a domiciliary of Miss when she is a student in LA

Citizenship of corporations  Some chose to incorporate in a different state than their new business o Delaware: favorable corp. laws o this is a concern to Congress: meant that more cases would be filed in fed. ct. o 1928, corp. citizenship for DJ o can be citizen in two states (where it is incorporated and where is its Principal Place of Business (PPB) (1332a and c) o Where is PPB? Harder; “nerve center” test (where are the offices that control and coordinate the corp’s activities?  Hertz v. Friend o Friends filed a state claim for violation of wage and hour law o Hertz moves to get it “removed” (removal: in general permits defendant, and only them, to file notice with state ct. in which D says there is fed jurisdiction in this case; case will be removed to US district court in the geographic proximity of the trial court); corps prefer to have it in fed ct. usually o Ps argue that Hertz is citizen of Cali; file for a “remand”; Hertz says no, we’re in NJ (incorporated in Delaware) o Judge in San Fran uses the “business activity” test; find that the amt of business found in Cali was significantly more than in any other state . what activities are included? and how are they weighted? at war with administrative simplicity o Supreme ct. reversed and said that they were actually a citizen of NJ . s/b determined by “nerve center” test, usually main headquarters, is often a single place . say it’s consistent with the language of the statute . simplicity of the test; more consistent  Entity citizenship: o unincorporated associations and partnerships are treated diff. they are considered to be citizens of every state in which their members (or partners) are domiciled o AARP, law firm, labor union  LLC, PLLC, LLP? They share characteristics of both partnerships and corporations; inquiry is governed by how the entity is treated under state law (is it more like a citizen, or more like a partnership, etc)

Amount in Controversy  **This rule does not apply to federal question cases.  The party seeking federal jurisdiction must show that his claim was made in good faith and that it is possible the amount in controversy is over $75,000. The party is not required to prove the actual value of the amount in controversy.  The party challenging the jurisdiction will only prevail if he shows with “legal certainty” that the claim will be adjudicated for less than $75,000  St. Paul Mercury: Plaintiff’s good faith allegations control unless it is clear to a legal certainty that the p cannot recover more than the amount in controversy requirement  ***Diefenthal v. CAB  The jurisdiction may not be challenged if the actual recovery turns out to be less than $75,000  Aggregation o One plaintiff may aggregate several claims against a single defendant to reach the $75,000 minimum o One plaintiff may not aggregate several claims against several defendants nor may he join claims against other defendants when he has aggregated several claims against one defendant to reach the minimum o Multiple plaintiffs will qualify for federal jurisdiction when at least one plaintiffs claim is valued at $75,000 o Jurisdiction will not be allowed when several plaintiffs’ claims total $75,000 but no single claim is $75,000. Exception: Two or more plaintiffs enforcing the same right or interest that they share or own o The same rules apply for class action suits o A counterclaim may satisfy the $75,000 requirement.

Federal Question Jurisdiction  Article 3, secton 2:  The judicial power shall extend to all cases arising under this constitution, the laws of the US, and Treaties made…  28 U.S.C. Section 1331: Federal Question Jurisdiction  The district courts shall have original jurisdiction of all civil actions arising under the constitution, laws, or treaties of the US o The federal question must be part of the well-pleaded complaint. Mottley o The complaint must raise a central question of federal law. Grable/Gunn Well-pleaded complaint o In Osborn v. Bank of the United States, the Supreme Court held that Art III only requires that the federal question only potentially form an ingredient of the claim or defense of the case. o This formulation would allow the federal courts to hear cases which never, in fact, raised a federal issue. This might not be seen as a wise use of federal judicial resources o One might reasonably expect Congress, then, to narrow the scope of federal question jurisdiction by statute, but it used the same language in Section 1331 o So where can you find fed issue? o Federal issue cannot reside only in the defendant’s defense or answer o Nor can it even reside in the plaintiff’s complaint if it is there only to anticipate a defense o One way to present the question is to ask yourself: “What allegations would the plaintiff have to plead and prove in order to win if the defendant said absolutely nothing?” Mottley: o Got free passes for life (35 ys), but then federal statute prohibited free passes o claim was for breach of contract, started in fed court (no diversity jurisdiction) o state law claim o Mottley’s lawyer did more than just say breach of K; o “The railroad will argue” . the railroad refused to honor the passes because of a 1906 fed law o “if the railroad arruges that, we will argue” . the 1906 federal statute was not intended to apply retroactively to previously awarded passes o Or, alternatively: . the 1906 fed statute is unconstitutional because it takes our property without just compensation o Therefore, we pray for specific performance of the contract o Supreme court said that fed didn’t have jurisdiction (raised issue by themselves; was never an issue before) o Ps complaint referred to federal law, but it did not RELY on federal law to win o Federal law was not an element of their claim (but NONE are federal law issues) o Ironic that the only disputed issues are federal issues

Centrality o 99% of these cases are very easy because they follow a simple rule created by Justice Holmes in American Well Works v. Layne & Bowler (1916): a case “arises under federal law when federal law creates the cause of action asserted”: o Employee sues employer under the federal ERISA law which governs things like pension benefits. o Environmental group sues company under federal clean water laws. o Disabled tenant sues landlord under federal Americans with Disabilities Act or Fair Housing Act statutes. o Company sues rival under federal patent law. o Man sues police department under 42 USC 1983 for federal civil rights violations Minton/Gunn:  Patent case: Minton v. NASD et al = exclusive federal jurisdiction  GRABLE TEST: federal question if:  federal issue is necessarily raised  federal issue is actually disputed  federal issue is substantial  federal issue is capable of resolution in federal court without disrupting the federal state balance approved by congress  Nature of claim: state quiet title; Grable is suing Derue saying that you didn’t get the land validly; deals with if the service of the notice was proper o Facts: . Grable owes fed taxes and doesn’t pay . U.S. seizes its property and provides notice of seizure and right to redeem by certified mail, rather than personal service . grable does not respond and US sells property to Darue . Five years, Grable files state law “quiet title” action against Darue, arguing that the seizure was unlawful because service violated the IRS Code . 26 USC 6335 (a): as soon as practicable after seizure of property, notice in writing shall be given by the secretary to the owner of the property . Is the federal issue part of the well-pleaded complaint? YES; the only argument they have is the federal statute of terms of service  Gunn: no fed question jurisdiction because it was not substantial and it disrupted the fed state balance o Understand why the test was not satisfied in Gunn. . Was it raised? YES! . Was it disputed? YES! . Is it substantial? NO; not a big deal; state court judges adhere closely to SCOTUS decisions; it is fact-bound, not interpretation-bound . Disruption of fed state balance? if a lawyer screws up any case dealing with federal issues, then they could go to fed ct., so YES

Removal o procedure that may be employed by Ds to send cases filed by P in state court, to fed court o The P is the “master of the complaint”, but D can veto o Why allow? Puts the P and D on equal footing; each have equal access to a federal forum o P or D could try to destroy diversity: not “collusively removed” o Can P prevent removal? o yes drop fed claims, include non-diverse party o Keys to understand removal are that: o Removal under Section 1441 does not expand federal jurisdiction. A defendant can NEVER remove to federal court a case filed in state court over which the federal court would not have had subject matter jurisdiction had the plaintiff chosen to file in federal court in the first instance. o It is not true that a defendant can ALWAYS remove to federal court a state court case over which the federal court would have had subject matter jurisdiction had the plaintiff chosen to file in federal court in the first instance. o Removal basics: o when the P file in state court D may remove the case to fed if the fed ct. would have had juris if the P filed there and o Avitts: o originally filed in Texas State Court o complain referred to some federal law (very vague reference) o Ds (Amoco) removed to federal court; file with the district court within 30 days of receiving service of complaint o They also requested P to file a clearer complaint o IF P amends complaint, can you remove? o If case does gets removed, but Avitts doesn’t mean that there is fed question, then he should remand; Avitts amends the complaint that gets rid of fed claim (w/o remand) o P wins preliminary injunction o Amoco moves for remand saying there is no federal question! Why? because he loves the fed judge that is giving him what he wants o P opposes remand saying that he pointed out CERCLA and OPA vaguely . says maybe that it doesn’t ARISE UNDER, but the result depends on an imbedded fed issue o Court denies remand o Amoco appeals preliminary relief: under 1292(a)(1)-Note 5 o Fifth Circuit vacates relief and remands to state court for lack of SJ o **if court grants remand, then they can make D pay attny. fees o Jaffray o originally filed in Fed court for diversity juris (del/minn v. Wis/Wis o Jaffray filed for a restraining order to bring client files back o they dismiss the case themselves and refile in state court. Why? because fed court didn’t grant restraining order o state court grants him the restraining order in just a few minutes; has to pay a bond; Why? as insurance in case temp restraining order was not issued properly o Before bond gets paid (and tro wasn’t in effect yet), they file a notice of removal on the same day with the federal court o P moves for remand and fees because of the forum defendant rule (1441 (b)(2); still upset because he really wants the tro (june 27) o didn’t grant the motion until August 8 o has to start over in state court

PERSONAL JURISDICTION

 Sources of law for PJ:

o Due Process clause o State long arm provisions

 Assertion of PJ

o in personam: over the D personally

. creates a personal obligation or debt to pay the winning P precisely the amount the court awarded

. sometimes D is rendered “judgment proof” if they can’t pay

. if can pay, but doesn’t, you can get a writ of attachment for property  cannot get juris over the property; this juris is unnecessary because we already have in personam juris o in rem or quasi in rem: over the D’s property

. attachment must happen at outset of litigation o in Pennoyer, service had to occur within the boundaries of the forum state

 traditional bases of juris:

o consent o presence o residence/domicile

 Two pressures on Pennoyer:

o motor vehicles (mobility of parties) o interstate commerce o now: internet issues and the expanding concept of physical space

 Fixes:

o expansion of consent:

. Hess v. Pawloski: if you are driving in any state, you give implied consent to be tried in their courts under their standards

 International Shoe

o State of WA wanted to sue a DE corporation with PPB in Missouri for unpaid contributions to the state unemployment compensation fund o Shoe’s only contacts in WA were the 11-13 salespeople who rented rooms and sales areas in WA… customer base here

. no manufacturing, no office, shipping the exact quantity to customer (they only have one shoe on display) o quasi in rem (Pennoyer) is not possible because Shoe has no property in WA o Shoe also says they are not present in WA o New rule:

. Shoe should be subject to Wa laws (in personam jurisdiction)

. Minimum contacts test: “with it such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice’”

. why? they are taking advantage of WA laws (they can sue in courts of Wa, can drive on highways, use their customers) o Two ways to establish sufficient contacts . Specific juris: the cause of action arose out of the D’s contact with the forum state, OR . General juris: The cause of action did not arise out of the D’s contact with the state, but the D’s contacts with the forum are so continuous and systematic that it would be reasonable for there to be personal juris over the D in the forum state o Service in Shoe . Service does not have to occur in the forum state . “nor can we say that the mailing of the notice of suit to Shoe by registered mail at its home office was not reasonably calculated to apprise appellant of the suit”

Specific Jurisdiction

 Requirements:

o D has minimum contacts with the forum o claim arose out of these contacts, AND o Personal jurisdiction is consistent with notions of fair play and substantial justice

 McGee v. International Life Insurance Company

o Upheld jurisdiction over Texas Insurance company in California even though they had one client in the state o state court jurisdiction satisfies due process when it is based on a contract with substantial connection with state o Court noted two things: . The Texas company reached in to California and solicited the person . California has an interest in adjudicating claims that affects its residents. (states interests) . would be different if P moved to a different state and Insurance didn’t “reach in” to follow him o Other factors: . burden on D . interest of P . interest of forum state . interest on efficient resolution . possible impact on substantative law  from Hanson v. Denckla: “It is essential in each case that there be some act by which the D PURPOSEFULLY AVAILED itself of the privilege of conducting activities within the forum state, those invoking the benefits and protections of its laws”—that it does something affirmative itself to participate in the business relationships of the state . contacts are necessary, but NOT sufficient  World Wide Volkswagen v. Woodson o Ps bought a car in NY from retail dealer Seaway. Ps were driving their car during their move from their former home in NY to their new home in AZ, and got in a serious accident in OK. They attempted to sue Seaway (NY) and the regional distributer (only did business in NY, NJ, and CT) in OK o Found no jurisdiction in Oklahoma because the D’s had not reached in. The P’s drove the car there o not enough that is FOS for product to end up in forum state; test: is it FOS that they would be sued there o protects D against the burdens of litigating in a distant or inconvenient forum o if the 5 factors point towards juris, then why is case failing? . two part test requires minimum contacts AND fair play . minimum contacts wasn’t met here—fair play notions do not push us above the line . fair play notions can only bring it below the line (requires minimum contacts) . don’t seem to “avail themselves” . unilateral activities of the third party are not sufficient for the “contact”—think of McGee moving to another state  Gray v. American Radiator—gets to stream of commerce o “The forum state does not exceed its powers under the due process clause if it asserts personal juris over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum state” o Do they anticipate being called for suit in another state (like Ill.)  Burger King v. Rudzewicz o D and P entered into a contract w/ BK to open a franchise in Michigan, they don’t make enough money, BK cancels contract, but they continue the store o Sues for breach of contract and trademark violation; sues in Florida federal court o “These considerations sometimes serve to establish the reasonableness of jurisdiction upon a lesser showing of minimum contacts than would otherwise be required. On the other hand, where a D who purposefully has directed his activities at forum residents seeks to defeat juris, he must present a compelling case that the presence of some other considerations would render juris” o D need not ever physically enter the forum state; in contracts cases, relevant minimum contacts are:

. prior negotiations

. contemplated future dealings

. terms of the contract (governed by FL law; forum selection clause)

. parties actual course of dealings

 Keeton v. Hustler Magazine, Inc. o Hustler did publish in NH and, even if that is its only contact with the state, is subject to personal jurisdiction there. Plaintiff doesn’t need minimum contacts with a forum state.  Calder v. Jones o Allegedly libelous story about the CA activities of a CA resident whose career was centered in CA. The harm was primarily felt by P in CA. o Personal jurisdiction upheld o Test:

. Committed an intentional act

. act was expressly aimed at forum state

. caused harm and D knew it would cause harm in forum state

Stream of Commerce  Three variances of streams: o manufacturer  distributer  customer (Nicastro) o part maker  manufacturer  customer (Gray; Asahi) (indirect benefit from forum state) o manufacturer  customer  customer’s home (WWVW) (least benefit from forum state) o **goes from most to least control for party on the left  Asahi o Zurcher injured by a motorcycle and sued the Taiwanese manufacturer of the tire tube, who joined as a third party Asahi (the Japanese manufacturer of the tube’s valve). o Brennan- It is a contact if the “contact” is placed into the stream of commerce and can reasonable anticipate that it would end up to another state . sending goods in substantial quantity . FOS that company will be . benefits from sales and indirectly from law regulating commercial activity o O’Connor- Need more than above (FOS/awareness) . need to show additional conduct to indicate the “intent” or “purpose” to serve the market . Maybe advertised, had customer service. . designed product for use in that state o Stevens- middle ground approach . for personal availment, look at:  volume  value  hazardous character of the product o Ultimate ruling: reasonableness factors weighted against adjudication in California  McIntyre- English company manufactures metal cutting company. Sells it only to Ohio. In Ohio, another company sells it to other states. Π is injured in NJ by this machine and tries to sue in Jersey. Court said no Jurisdiction. o Kennedy- Adopted the O’Connor test. o Breyer- adopts both tests. o Ginsburg- Would have upheld- Consistent with Brennan but a little broader- Says that if you target the United States, then you should anticipate being sued in all the states. “Arises out of”—

 second prong of WWV specific jurisdiction test:

o (1): D has had contacts with forum state o (2): P’s claim arose out of those contacts o (3) personal jurisdiction is reasonable based on a consideration of the factors mentioned above

 Two major approaches

o the evidence test: the D’s contacts offer evidence for at least one of the elements of the claim o the “but for” test: but for the D’s contact w/ the forum, the claim would not have arisen

 Zippo: o interactive websites-involve the sale of goods and services. Juris OK in state of user’s purchase o Passive websites—involve simple posting of information. Juris NOT OK in state of user’s viewing o some interaction: MAYBE personal juris  Jackson v. The California Newspaper Partnership

o Defendants' operation of a website available to Illinois web surfers was insufficient to permit the Court to assert general jurisdiction over the defendants o did not direct any internet activity specifically into Illinois; internet is not “continuous and systematic” contact o "The mere maintenance of an Internet website is generally not sufficient to exercise general jurisdiction . . .". o reinforces Calder and Zippo tests

General Jurisdiction

 Specific Juris (this distinction is from International Shoe) o the claim arises from the D’s purposeful contacts in the forum state o specific juris is available when the minimum contacts and fair play test is met  General o claim does not arise from the D’s purposeful activities in the forum state o General juris is available ONLY when the unrelated contacts are continuous and systematic AND o consistent with traditional notions of fair play and substantial justice (some disagreements if we need to go through the reasonableness factors)  Goodyear v. Brown o A bus accident in France, in which two boys from NC were killed, was attributed to a defective tire made in Turkey at by a foreign subsidiary of Goodyear USA o Goodyear USA and its foreign subsidiaries were sued in NC o The Turkey subsidiary’s only possible contact with NC was that very rarely, the tires it produced, but not the type of tire in the accident, are distributed in NC o Plaintiff argues that the subsidiary placed its tires into the stream of commerce through a highly organized distribution process and made no efforts to keep them out of NC o General juris only when a corporation “feels essentially at home” . Humans you look at their domicile. . Corporations- Look at state of incorporation and principal place of business. . Buying and selling is not enough. You need some physical presence. o Helicopteros . -systematic contact alone not sufficient for general jurisdiction . when property is the only contact and it has nothing to do with claim there is no personal juris

Quasi-in-rem  under Pennoyer, court could exercise jurisdiction based on the presence of a D’s property in the forum state, even if debtor was not subject to personal juris—also needed attachment before litigation and the debtor receives proper notice  Shaffer o when only contact in the forum state is property, and the property has nothing to do with the claim, no PJ o “all assertions of state-court jurisdiction must be evaluated according to the standards set forth in international shoe: must employ a contacts-based inquiry”  why? exercise of juris over person’s property is effectively an exercise of juris over the owner

Transient Presence Jurisdiction  Burnham: o Issue: does Cali have personal jurisdiction over Mr. Burnham just based on the fact that they caught him to serve him in Cali o If attny for Ms.: cite Pennoyer: he is present o If attny for Mr.: you want to cite Shaffer v. Heitner . under this, doesn’t seem like there is juris (either specific or general) o but they all agree that there is personal juris . Scalia based on tradition  presence alone is sufficient for the state court to assert jurisdiction  intn’l shoe does not replace the traditional bases, it supplements them . Justice Brennan:  while tradition is important, we have to look at modern day notions of fairness and justice  he thinks it is fair according to modern notions because: he is purposefully availing himself and taking advantage of what Cali has to offer (reciprocity) o **individual is usually subject to PJ in any state where she is served personally while physically present in that forum, assuming she is there voluntarily

Long Arm Statutes . limits jurisdiction from constitutional coverage . Outer boundary is made up of Due Process Clause (as defined by Int’l Shoe) . inner boundary is determined by long arm statutes . Hess v. Polowski: if you drive on the road in Mass, you impliedly consent to jurisdiction . Shaffer: Deleware statute: if you are an officer, you submit to juris for claims related to officer duties . authorize the state courts to extend juris to outside of state borders . PJ test: State Long Arm Statutes: o is PJ consistent with the state long arm statute? o is PJ consistent with the DP clause (we spent time on this one before) . two forms of long arm statutes o enumerated long arm statutes . Ohio (301)—turns on acts/activities . Ohio (302)—turns on status/consent o Un enumerated long arm statutes . California (pg. 300) “a court of this state may exercise juris on any basis not inconsistent with the constitution of this state or the US . essentially a one circle/one part test . Bensusan Restaurant Corp v. King o Bensusan sues in SDNY, federal court: federal question case o Look at NY state long arm statute o as a matter of federal constitutional law, a federal court has the constitutional power to assert jurisdiction over D’s so long as there are contacts in the US; now we need statutory authority o long arm statute: court may exercise PJ over any non-domiciliary who: commits a tortious act within the state, except as to a cause of action for defamation of character o P says defamation was experienced in NY, D says that if anything was done wrong, it was done in MO o court says D must be physically in NY

NOTICE

 Due process:

o for a court to issue a valid, binding judgment, the court must have PJ over the D o AND the D must be given notice and an opportunity to defend

 Mullane o NY state banking law allowed for pooling of small trusts into common fund administered by corporate fiduciary o Central Hanover Bank petitioned court for judicial settlement of the trust o only notice given was publication in a newspaper—is this adequate? o Mullane standard:

. an elementary and fundamental requirement of DP in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objection o Three categories of benificiaries

. when you know the addresses: mail is required

. don’t know where they live, but address could be determined: publication is ok

. no known address, and no way to determine: service by publication is OK

. **everyone in these categories has the same interest

. ***doesn’t matter if everyone in suits like these find out, just that some do o Why is publication OK here (in some cases), but wasn’t OK in Pennoyer? Need to run a cost/benefit analysis; interests of the entire group are being served—especially in this context of pooling trusts where they are trying to save money, not spend it tracking people down

 Practicalities of Service of Process

o What gets served: complaint and a summons must be served together o Who serves: duty to serve falls to the P (4(c)(1);

. 4(c)(2): “any person who is at least 18 years old and not a party may serve a summons and complaint”

. most likely by a process server o When must it be served: after complaint is filed

. 4(m): court must dismiss an action if service is not made on the D within 120 days after filing, or order it served w/i a certain time o How for Natural Persons: 4(e)

. deliver papers to D personally (“in hand service”) wherever she can find the D 4(e)(2)(a)

. leave the summons and complaint at the D’s dwelling or usual place of abode with someone of suitable age and discretion who resides there (4)(e)(2)(b)

. deliver the summons and complaint to an agent of the D authorized by appointment or by law to receive service of process (4)(e)(2)(c)

. follow the rules for service of process of the state where the federal court sits or of the state in which service of process is made 4(e)(1) o How for Corporations: 4(h) . delivering a copy to an officer, a managing agent or a general agent of the entity 4(h)(1)(B)

. delivering the papers to an agent authorized by law or by appointment to receive service of process

. serving process under state rules for serving corps 4(h)(1)(A)

. **can serve an officer/agent anywhere

 Hukill v. Oklahoma Native American DV Coalition

o P sued employer; sent by certified mail, but an unauthorized person signed for it (“substantial compliance” with state rules; court wanted “strict compliance”—higher standard ); P moved for default judgment due to D’s failure to respond; Ds moved for relief from judgment for lack of proper service of process o Oklahoma statute required service by certified mail with “delivery restricted to the addressee”

 Waiver of service of process

o FRCP 4(d): P may ask D to waive formal service o P sends D a notice of the action with two copies of the waiver form, complaint, prepaid envelope for returning the waiver o Ds have a duty to avoid the costs of formal service; if they don’t return the waiver, they must pay the costs of formal service o 30 days to answer waiver o enticement for Ds to waive service: gives them 60 days to answer instead of the usual 21

 Review:

o SMJ: does the court have power over the subject matter of the case

. rationale: court authority o PJ: does the court have power over the D?

. rationale for limitation: fairness to the D o Venue: is the court an appropriate location within the court system

. rationale for limitation: convenience/efficiency (of court, D, and witnesses)

 28 USC 1391(b): venue exists where:

o A judicial district where any defendant resides, if all defendants reside in the same state o A judicial district in which a substantial part of the events giving rise to the claim occurred, or a substantial part of the property that is the subject of the action is situated o IF THERE IS NO DISTRICT IN WHICH THE ACTION MAY OTHERWISE BE BROUGHT, a judicial district in which any defendant is subject to personal jurisdiction  Residency defined: o 1391 (c)(1): Residence” for individuals = state of domicile o 1391(c)(2): A corporation defendant resides in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced o 1391(c)(3) An alien may be sued in any district  1391(d): o When a state has multiple districts, D resides in any district in which its contacts would be sufficient to subject it to personal jurisdiction o If no such district exists, D resides in the district in which it has the most significant contacts  Uffner

o Uffner’s boat sinks, calls insurance co, denied because he needed “out of water survey” o files claim in Puerto Rico for failure to pay out of bad faith; D’s dismiss for failure to state a claim o court sua sponte dismisses based on lack of PJ and said venue is wrong in Puerto Rico o higher court says lower court cannot dismiss sua sponte for bad PJ and venue, because Ds waived this defense

. Rule 12(g)(2) and (h)(1)(A)

o “where a substantial part of the property giving rise to the suit is situated”—1391 (b)(2) o venue was proper—location of the injury occurred in Puerto Rico

TRANSFER

Case filed in the wrong venue Case filed in a correct venue Motion to transfer 28 USC 1406 28 USC 1404 Motion to dismiss 28 USC 1406 Forum non conveniens

 1406:

o option to transfer or dismiss o standard: “in the interest of justice”

. if wrong venue, P has to refile (costs, re-serve D, statute of limitations might have run out) o transferring court: need not have PJ over Ds o transferee court:

. must be w/i federal court system

. must be in district in which case “could have been brought”

. transferee court must have PJ and venue o ***court most likely will transfer, not dismiss it (efficiency and costs)

 1404

o Standard: “for the convenience of the parties and witnesses, in the interest of justice…” o transferring court: need not have PJ over Ds (majority rule) o transferee court: . must be w/i federal court system . must be in a district in which the case could have been brought or one in which all parties consent . must have PJ and venue or consent of parties  MacMunn v. Eli Lilly Co.

o P files in DC superior court; Ds want to transfer to Mass o Ds remove to DC fed court on grounds of diversity; also have PJ because of general jurisdiction (business there, and “army of lobbyists”); also have venue because D resides there and “the division embracing the place where such action is pending” o MacMunn test: . D must establish that the case could have been brought in the U.S. District Court for the District of Mass. . D must demonstrate that considerations of convenience weigh in favor of a transfer to that District o private interest factors:

. P’s choice of forum unless balance of convenience is strongly in favor of D

. D’s choice of forum

. where the claim arose

. convenience of the parties

. convenience of the witnesses

. ease of access to sources of proof o public interest factors:

. transferee court’s familiarity with governing law of transferor court

. local interest in resolving local disputes at home

. relative congestion

Forum Non Conveniens

 right venue, but inconvenient

 Piper v. Reyno

o Reyno is acting for decedents of Scottish plane crash; they want to file in US for better recovery o P files in CA state court; Ds remove to CA district court (fed court); D’s transfer to PA District Court (fed); Ds moves for dismissal for forum non conveniens o Court upholds dismissal based on two part test

. is there an alternative forum

. Ps choice should rarely be disturbed unless (MacMunn) private/public factors weigh heavily against it o If Ps are foreign, their choice is given less deference Pleadings

 Jurisdiction allegations (subject matter jurisdiction)

 “A short and plain statement of the claim to show that pleader is entitled to relief”

 Demand for judgment

 **Look at Form 11 for guidelines

 Dioguardi

o Claim (dismissal w/o prejudice) amended complaint  dismissal (with prejudice)  appeal o claim is legally insufficient: when even if all of the facts are true, the P has no basis under the prevailing law to recover from the D o factually insufficient: are there enough facts to state a claim for which relief can be granted o court decides that the complaint was sufficient: only required to plead a “short and plain statement” of his claim for relief” o not required to plead specific facts o if the statement is not “plain” the court gives the P the benefit of “reasonable intendments” in the allegations: you could draw reasonable inferences on behalf of the P on interpreting the complaint o needs to be clear enough to give notice to the D of the potential claims

 Conley v. Gibson: “the accepted rule is that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the P can prove not set of facts in support of his claim which would entitled him to relief”

 Doe v. Smith

o suit under federal wiretapping: he videotapes her during sex, spreads video to his friend o district court: dismisses complaint because failure to allege that the recording was an interception within the meaning of the statute o **pleadings in fed court do not have to allege facts corresponding to each element of a statutes o need not plead fact, need not plead law; they plead claims for relief: “what rule of law requires a complaint to contain an allegation”—factual details and legal arguments come later: need discovery for some of this o **For FRAUD or MISTAKE: must state with particularity: Rule 9

 Leatherman

o P alleges improper searches from the government o this court says: if suing the government, heightened standard of pleading o Supreme court says: courts cannot set standard higher than as defined in rule 8

 Twombly o Bell Atlantic v. Twombly: Twombly brings class-action suit against Bell Atlantic and other large phone companies for engaging in anti-competitive behavior in violation of § 1 of Sherman Act in acting in order to disadvantage smaller telephone companies and charge consumers more by refraining from entering markets where other large companies were dominant and thereby preventing price wars which are beneficial for consumers. . Twombly’s complaint didn’t provide enough facts for court to find it plausible that companies engaged in conspiracy. Only provided factual bases for parallel conduct and merely stated that an agreement had taken place with no details to support their allegation. . “conscious parallelism” is circumstantial evidence that may permit an inference of an agreement to be drawn, but alone is insufficient to prove an agreement. There must be more . possible  plausible  probable . Rule: Plaintiffs must include enough facts in complaint to make it plausible – not merely possible or conceivable – that they will be able to prove facts to support their claims. Complaint will be plausible when pleaded factual content allows court to draw reasonable inference that D is liable for misconduct alleged . **not raising the stand  Iqbal o Iqbal is alleging that Ashcroft and Mueller designed and implemented a policy of harsh confinement solely on account of P’s religion, race, and/or national origin and for no legitimate penological interest. o 1) Court cannot accept as true all allegations in complaint if complaint consists of legal conclusions without support from factual allegation  if no legal conclusions accept facts as true o 2) Determine whether the allegations plausibly give rise to an entitlement of relief . in order to figure out if claim is plausible, context-specific tast that requires court to draw on judicial experience and common sense . passes the line from conceivable/possible to plausible

PLEADINGS  Responding to the complaint options: o Answer: . types of responses to allegations  admit, deny, lack of sufficient information . 8(c) affirmative defenses (statute of limitations, fraud, estoppel, duress,) . claims by a defendant (cross-claim, counter-claim, third party defense) o Pre-answer motion (must be w/i 21 days of notice of complaint) . 12(b): lack of SMJ, PJ, improper venue, insufficient process (or service), failure to state a claim, failure to join a party under Rule 19 . 12(e): motion for a more definite statement . 12(f): motion to strike an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter . 12(g): o Do nothing and risk a default judgment (after 21 days of no answer) . Entry of default FRCP 55(a)  service? must show proof of service before; have to notify other side of the entry of default; mail the motion with a certification of service to D  effect? clerk enters the party’s default; she is now barred from filing an answer and pre- answer motion; admits to the facts from the P  motion to set aside if D responds to entrance of default? 55(c) for “good cause” . Entry of default judgment 55(b)  service?  proof?  motion to set aside? o Virgin Records America v. Lacey – Responding by Default . Copyright infringement case against Lacey for stolen music; Lacey never responds  entry of default (she essentially admits to the facts and is barred from filing an answer) . After 30 days of still no response, P seeks entry for default judgment . Notice must be given if D or their rep has ever made a personal appearance (at least 7 days before trial) . injunctive relief: destroy all songs that were downloaded illegally . anything the lawyer can do at this point? motion to set aside default judgment under 50(d)  60(b)  could say that they were not properly served [60(b)(4)]  could say “mistake, inadvertence, surprise, or excusable neglect [60(b)(1)] o Matos v. Nextran . D files multiple Rule 12 motions to dismiss P’s complaint:  12(b)(6) Negligence: there must be direct or inferential allegations regarding all the material elements for a viable legal claim  12(e) Motion for a More Definite Statement  Motion to strike “any redundant, immaterial, impertinent, or scandalous matter” o Hunter v. Serv-Tech . D’s file a motion to dismiss under 12b5 for insufficient service of process. P then serves D appropriately and D again moves to dismiss except now under 12b2 for improper personal jurisdiction . D’s file a motion to dismiss under 12b5 for insufficient service of process. P then serves D appropriately and D again moves to dismiss except now under 12b2 for improper personal jurisdiction . You snooze on PJ defense, then you lose PJ defense o The Waiver Trap – rule 12(h)(1) . 12(b)(2-5) defenses MUST be included in the defendants first response, or they will be automatically waived

. If first response is a 12b motion, then include the defense in the motion

. If first response is an answer, then include in the answer o Reis Robotics v. Concept Industries

. Reis has alleged breach of contract, Concept answered the complaint with 6 affirmative defenses and 7 counterclaims

. Reis moves to strike and dismiss affirmative defenses based on rule 12(f) based on insufficiencies

. pleading standard for a defense? same standard as for a complaint

 8(b)(1)(1): state in short and plain terms its defenses to each claim asserted against; does not need to show that pleader is entitled to the defense

. 12(f) Motion to strike affirmative defense:

 is the matter appropriately pled as an affirmative defense?

 is the aff defense adequately pled under FRCP 8 and 9

 aff defenses are subject to normal pleading standards

. cannot allege aff defenses w/o facts supporting them . motion to strike portions of D’s answer

 cannot just deny the whole thing

 8(b)(2) must deny and admit what you want

o Ingraham v. US

. Question for the court: is a cap on pain and suffering damages an affirmative defense?

. Three part test:

 whether the matter at issue fairly may be said to constitute a necessary or extrinsic element in the P’s cause of action

 which party, if either, has better access to relevant evidence

 polity considerations; should the matter be indulged or disfavored

. Central to requiring the pleading of affirmative defenses is the prevention of unfair surprise

 Care and Candor in Pleadings

o Hays

. Teachers created manual about word processor, thought that Sony distributed it for profit, but there was no evidence to support this

. Sanctioned attny Guyon because most of the requests for relief were frivolous

. Guyon never contacted Sony to find out the story, didn’t provide evidence of lost profits

. Guyon did not conduct a reasonable precomplaint inquiry into fact and law required by rule 11

. No indication of bad faith, but court has an objective standard of negligence (what would a reasonable lawyer do under the circumstances?)

. **if a claim later becomes frivolous, there is a requirement not to later advocate for it

o Rule 11: Requires a signature, which hopes to ensure that to the best of attny’s belief, they are submitting something legit

. certification that lawyer has stopped and thought about what they are doing under all of the circumstances and understanding of the law

. (b): to the best of the person’s knowledge, information, and belief

o Rule 11(b)(2): legal support; non-frivolous argument for extending, modifying, or reversing existing law or for establishing new law

o Rule 11(b)(3): no evidentiary support of damages

o Rule 11(c)(5)(a): only attny sanctioned, not clients

o Rule 11(c)(1): in firm, you are held jointly liable o Rule 11(c)(4): purpose of the sanction is to deter repetition

o Hunter v. Earthgrains Co. Bakery

. sues for employment discrimination, but there is an NC rule that requires you to follow th e Collective Bargaining Agreement

. Ds move for 11(c)(2) motion for sanctions

 Ps have 21 days to withdraw or correct case w/o judicial intervention

 but here, judge brought it sue esponte (didn’t have 21 days) and had to show immediately why she couldn’t be sanctioned

. challenging precedent isn’t forbidden, and she’s allow to argue why she thinks the court is incorrect; failing at this or applying other law incorrectly doesn’t make the claim frivolous

o Sussman v. Bank of Israel

. Can a non-frivolous complaint be sanctioned if it was filed for an improper purpose (putting pressure on a foreign government)?

 in rare cases, yes; in most, no

. Why? Rule 11 is based on an objective standard, so subjective purpose is disregarded

. Attny does not have to file in the most convenient forum, but only the proper forum

 Amendments to Pleadings

o Governed by Rule 15:

. Amendments as of Right:

 Party may amend the original pleading once without leave of court w/i 21 days of serving the pleading

 If the original pleading is one to which a responsive pleading is required, a party may amend the original pleading w/i 21 days after service of the responsive pleading

 If a party files motion under 12(b) to dismiss a complaint, counterclaim, cross-claim, or third complaint; has right to amend w/i 21 days after motion is served

. Amendments with Leave of Court (after 21 days)

 must not present hardship to the opposing party

 “court should freely give leave when justice so requires” and burden is on the non- moving party to show prejudice

o Beeck v. Aquaslide

. Beeck becomes seriously injured on the waterslide, sues

. Insurance adjusters sent to site and conclude that Aquaslide is the manufacturer; later, realize that they are not the manufacturer

. court gives leave for Aqua to amend the answer to now deny that they are manufacturer o Amending During and After Trial

. 15(b)(1): If, at trial, a party objects that evidence is not w/i the issues raised in the pleadings, the court may permit the pleadings to be amended

. 15(b)(2): when an issue not raised by the pleadings is tried by the parties’ express or implied consent, it must be treated in all respects as if raised in the pleadings. Party may move—at any time, even after judgment—to amend the pleadings to conform them to the evidence and to raise an unpleaded issue

. Hardin

 P injured by a push-pull jack; sues some Ds, not others. D, during trial brough into question if other entities were also at fault. P did not object, so he was said to have impliedly consented to their addition (with the exception of Lummis)

 Evidence was offered showing how Lummis played a role in delivering the faulty jack, but not how they might have been partially at fault, so this did not give Hardin notice to try and defend against this theory of fault o Amending after Statute of Limitations

. Reasons for statue of limitations:

 provides prospective Ds repose after an appropriate period of time

 availability of evidence

 encourages Ps to proceed diligently

. “Relates Back”: 15(c)

 **Still needs to pass the threshold 15(a): when justice so requires

 15(c)(1)(b): the amendment asserts a claim or defense that arose out of the conduct, transaction, or occurrence set out—or attempted to be set out—in the original pleading

. Moore v. Baker

 Sued day before SoL runs out for malpractice based on informed consent (did not offer EDTA as an alternative treatment); later moved to amend it on negligence

 court finds that neg claim was after SoL and did not relate back to original claim—D reasonably thought from Ps first complain that they were not going to be sued for neg.

. Adding parties after SoL expires

 rule 15(a) must be satisfied

 15(c)(1)(b) must be satisfied AND  within period provided by rule 4(m) for serving the summons and complaint (120 days), the party to be brought in by the amendment

o received such notice of the action that it will not be prejudiced in defending on the merits

o know or should have known that the action would have been brought against it, but for a mistake concerning the proper party’s identity

 Krupski

o accident on Costa Crociere

o P originally sued Costa Cruise, moves to amend to add “Costa Crociere”

o Lower courts said it was a deliberate mistake

o Sotomayor says that it was an acceptable mistake because the names are so similar—Costa Cruise should have anticipated the mistake

o Meets the “relates back” test, and the 4(m) notice test—their attny is the same, they are essentially the same comp.

o look at “mistake” from the Ds perspective, not from the Ps subjective perspective; just because attny made a conscious choice between parties, does not mean that it wasn’t an understandable mistake

 Add Defendants: o 15(c)(1)(c) can change D’s as long relates back to original filing if you made a mistake if C(1)(b) is satisfied (transaction test), if within 154m 120days of original filing must receive notice of law suit, if it’s a mistake . Reasons for not allowing amendments  unreasonable delay  enough time to prepare to meet the claim  strategic behavior or bad faith

JOINDER  Overview of Joinder o General joinder . claims (R18): a party (P/D) may join, as many claims as it has against an opposing party . Permissive party joinder (R20):  P/D: persons may join in one action as Ps if they assert any right to relief jointly, severally, or in the alternative with respect to or arising out of the same txn… (D: if relief is asserted against them) o counterclaims (R13) . compulsory: arises out of txn or occurrence that is the subject matter of the claim; must bring it, or waive it . permissive: any claims that are not compulsory (even if unrelated) o Cross-claims (R13): arises out of txn or occurance that is the subject matter of the claim o Overriding Ps party structure . impleader (R14): Defending party may, as a 3rd party P, bring in a 3rd party D if they may be liable to it for all or part of the claims against defending party  must bring in 3rd party D w/i 14 days of serving answer to P—if not, need permission from court . 3rd party options once they have been impleded  defend against 3rd party P o defenses: R14(a)(2)(a) o counter/cross-claim (a)(2)(b)  file a motion to protest the impleder  Defend against P o defenses: 14(a)(2)(c) o claim arising out of the txn or occurance (cross-claim) . Compulsory Joinder (not covering) o Class actions (not covering) o Holbein . Multiple, unrelated potential employee’s file related against same potential employer for similar misleading information during interview process (duties and responsibilities, relocation $, ect) . Court finds a commonality (common glue) in the claims, binding the Ps together—Rule 20 (“arising out of the same txn or occurance”) o Leindecker . First: new board claims: old board was not validly elected and could not fire Leiendecker  old board filed a counter claim saying opposite (compulsory counterclaim); make Leiendecker in as third-party def. (13(h)) (must satisfy rule 20 first)  L does not bring any counterclaims for this suit; claims were dismissed o second: L sues old board for defamation, Breach of K, tortious interference with K, violation of nonprofit corp act, wrongful termination o issue in court: were L’s tort claims (defamation, and tortious interference with K) compulsory? NO—in Minn. they are permissive  other non-tort claims were not yet ripe when she answered original compliant, thus were not compulsory o 4 elements to determine if counterclaim is compulsory or permissive: . are the issues of fact and law raised in the claim and the counterclaim largely the same? . would res judicata (claim preclusion) bar a subsequent suit on the parties counterclaim absent the compulsory counterclaim rule . will substantially the same evidence support or refute the claim as well as the counterclaim . is there a logical relationship between the claim and counterclaim o Erkins . Erkins sues Case Power on SL claims for back hoe injury; Case Power impleads Fitzpatrick and ERCACOM for negligence in failing to conduct safety meetings (files motion for leave of court) . Fitz/ERC oppose motion on grounds that they cannot be impled on different legal theory (SL v. negligence) . Court says theories of liability do not have to be the same . 4 factor test to determine if motion to implead is proper:  was the motion timely  is resolution possible w/o unnecessary complications  will there be significant delays  is there prejudice for P . Court finds that motion passes four part test  Supplemental Jurisdiciton o Two requirements . does the procedural rule allow the joinder of the claims or parties . is there supplemental juris under 28 USC 1367 or an independent basis for SMJ o Gibbs: . Gibbs (TN) sues United Mine Worker (TN) (no diversity) for federal law claim and “pendent” state law claim . Court is deciding if it has federal SMJ over state law claim between two non-diverse parties  joinder of claims typically OK under Rule 18 if they derive from “common nucleus of operative fact” (Article 3 gives them this right because they are a “case or controversy”) . Court has SMJ over pendent state law claim if:  there is substantial federal anchor claim  two claims derive from common nucleus of operative fact . Court can, in its discretion, decline juris over pendent claim if:  federal claims are dismissed before tiral  state issues predominate  pendent claim involves a sensitive issue of state law  if it will cause jury confusion o Owen: . Original suit was Kroger (IA) v. OPPD (NE): in federal court based on diversity . OPPD impleads Owen (NE) for damages that OPPD may owe to Kroger . Kroger amends complain to add a crossclaim against Own (allowed by 14(A)(3)) . OPPD wins motion for summary judgment (they are removed from the triangle and only the suit between Kroger and Owen remains) . Turns out Owen is from IA—no longer diverse from Kroger . Court must figure out if this is allowed . No statutory authority under 28 USC 1367(b): supp juris does not extend to cases based solely on diversity

Rules:

Diversity Statute USC 1332

 The district courts shall have original jurisdiction of all civil action where the matter in controversy exceeds the sum or value of 75k, exclusive of interest and costs, and is between: o Citizens of different States o Citizens of a State and citizens or subjects of a foreign state o Citizens of different States in which citizens or subjects of a foreign state are additional parties; and o A foreign state as plaintiff and citizens of a State or of different States

USC 1359:

A district court shall not have jurisdiction of a civil action in which any party, by assignment or otherwise, has been improperly or collusively made or joined to invoke the jurisdiction of such court.

Federal Question Statute 1331

 The district courts shall have original jurisdiction of all civil actions arising under the constitution, laws, or treaties of the United States.

28 USC 1441: REMOVAL:

 allowed by the D to the federal district court for the district and division embracing the place where such action is pending  1441(b)(2) Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.

 can remove based on federal questions

 removal can only occur if P could have originally filed in federal court

1446: Procedure for removal:

 D shall file notice of removal w/i 30 days of receiving the pleading

 diversity cases must be removed w/i a year

1447: REMAND

 on the basis of any other defect other than lack of SMJ w/i 30 days

 1447(c): for SMJ issues: “at any time before final judgment”