Civil Procedure Outline Two 2nd. Semester
Civil Procedure Two 2nd Semester
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Ascertaining the Applicable Law.
Which State’s Law
A federal judge in a diversity case sits as though she were a state court judge. Accordingly, she must apply state substantive law. (Erie). However, there may be a question of which state’s law to apply. Therefore, the judge’s first inquiry is to determine the state’s choice of law regime and then to determine whether, under the state’s choice of law principles, the court should apply forum state law or some other state’s law.
A. A federal court must apply the conflicts-of-laws-rules of the state in which the federal court sits. Klaxton (S Court.)
1) Transfer of venue 28 USC §1404(a) When D seeks a transfer of venue under 28 USC §1404(a), transferee court must apply the conflicts-of-laws rules of the state in which original court sat. Van Dusen (US)(1980)
B. A state borrowing statue may provide that the proper s/l and the proper accrual of the c/a is that state where the c/a arose. This case illustrates the procedure whereby federal courts sitting in diversity determine procedural issues. McKenna
I. Interpreting State Law
Once a federal judge determines which state’s law applies, she must ascertain the content of that law. If a state’s highest court has not yet spoken on a given issue, the federal court must imagine itself in the high state court’s place and decide the case as it believes the high state court would decide the case if it were doing so in the present day.
A. following criteria and order of preference.
1) high court decisions in analogous cases.
2) Considered dicta of the high court
3) Decisions of lower state courts (persuasive though not binding)
4) Scholarly treatises, restatement, law review.
C. A highest state court’s ruling on an issue need not be followed by a federal court sitting in diversity if that ruling has lost its vitality. Rather, a federal court must forecast how the state’s highest court would handle the case if it were deciding it in the present day. Mason
State certification procedures. Many states have adopted certification procedures that permit a federal court to petition a state’s highest court for a decision on how that state court might rule on an issue of law on which the court has not yet spoken.
III. Federal Common Law. Civil Procedure Two
1. Federal c/l can displace state law in few and restricted instances.
In pronouncing that there is no general c/l, the Erie Court emphasized that the grant of diversity jurisdiction to federal courts did not authorize federal courts to fashion rules of substantive law. However, Erie is not implicated in non-diversity cases, where there is a federal interest beyond just providing a forum. When a federal court tries a non-diversity case, the substantive rights involved have their source in federal law.. In such situations, federal common law exists. However, Congress, not the courts, has the authority to make law.. This is so because, Congress is better able to represent interests of states. Further, separation of powers creates a federal judiciary which is purposefully insulated from democratic pressures and a Congress, at least in theory, that represents the choice of the people. Accordingly, federal c/l can displace state law in few and restricted instances.
B. If the application of federal c/l is deemed appropriate, then the Constitution’s supremacy clause (Article VI) requires displacement of state law.
II. Spontaneous Generation
A. Federal courts have most typically applied federal c/l in cases implicating important federal issues.:
1) interstate disputes
2) admiralty/maritime cases
3) International Relations
4) waterways between states. Texas Industries.
B. Intro: The decision to formulate federal common law is one of judicial policy, in which a court must determine whether the advantages of borrowing state law are outweighed by federal interests.
C. Clearfield Trust and subsequent case law tells us that state law should only be displaced in certain circumstances.
1) there is a clear and substantial interest of the Federal Gov’t Clearfield Trust
a. In Clearfield, The Supreme Court held that federal law applied in an action by the gov’t concerning commercial paper issued by it. When federal Government (P) disperses funds or pays debts, it exercises a power given to it by the Constitution, and thus there is a strong federal interest. However, a strong federal interest will not be found where private parties’ transactions are merely collateral to federal issues B of A v. Parnell In this case, the issue was not about the paper itself but about theft of papers. Thus the contention was between private parties and did not touch the rights and duties of the United States.)
2) applying state law would frustrate specific objectives of federal programs
a. In Yazell, 1966 the US brought suit against Mrs. Yazell to recover proceeds under a loan contract negotiated between Small Business Administration and Mr. Yazell. The anachronistic law of coverture, preventing married women from binding their property, still existed in state where transaction occurred. This law, the court ruled, had to be applied even though doing so would bar SBA from recovery. The Court emphasized that the K was negotiated and entered into individually, and drafted with state law clearly in mind. Therefore, applying the state law of coverture—although anachronistic--could not frustrate the objectives of the federal program. (outline above only)
3) there is a strong need for a nationally uniform rule. (Clearfield)
a. Consider whether not applying federal law would lead to inconsistencies (In Clearfield, The Supreme Court held that federal law should apply in an action by the federal government, concerning paper issued by it. A key to this decision was the need for uniformity transactions regarding the paper would occur in many different states.)
b. Consider whether residents of state severely inconvenienced by having two systems of law govern similar actions. Commentators have suggested that.. p423
c. Consider to what extent application of new federal rule disrupt commercial relationships based on state law? (Kimbell)
The Yazell opinion did not decide whether the application of state law in this matter was required by the Rules of Decision Act (i.e. to be applied as Federal c/l) or was to be adopted as state c/l based on a federal principal. Considering Yazell, the trend is to forget about adopting state law as federal c/l but instead asking whether there is a need to displace state law.
Intersticial Federal Common Law: Which Law Should Fill In Gap in Federal Law?
Congress cannot anticipate every aspect that will arise under statute. Therefore, federal or state laws are sometimes used to fill in the gap.
Often arises in context in which fed statutes defines c/a but then does not provide a s/l. The usual rule is that when Congress has failed to provide a s/l for a federal c/a, a court “borrows” the local time limitation most analogous the case at hand. However, this general rule is not without exceptions. (Lampf)
1. Congressional intent. would use of state law frustrate the policies embodied in the statute and does federal law provide a closer analogy? Lampf
a) In Lamp, Sup Court held that best way to uphold Congress’ intent would be to look to the s/l of other section in same federal regulatory act.
b) A legislative scheme dealing with anti-trust violations is comprehensive and includes an integrated system of procedures for enforcement. Given the statutes attention to this kind of detail, the court decided that Congress would have included a s/l if it had intended for a Federal s/l to be used. Therefore, the court decided that Congress did not intend for courts to have the power to alter or supplement the remedies enacted. Texas Industries v. Radcliff.
c) An express c/a is one that contains specific s/l. If no s/l then may suggest Congress’ intent was that there not be a private c/a. These days courts are wary to recognize a private c/a unless Congress spells it out. There might be a strong suggestion of an implied c/a. Might this be sufficient or must c/a be express.
d) With regard to a federal statute, if state law has been borrowed for a long time, we can assume that Congress intends it to be valid, otherwise, would have changed it. Rules of decision act borrowed state statute…
2. Determine whether interstice is mostly state or federal concern.
a) Court looked to state law in determining who is a “child” for purposes of the Copyright Act. The Supreme Court held that in questions of domestic relations, when there is no federal law and when the subject is largely a matter of state concern, it was reasonable to borrow the state standards. However, dissenting opinions argued that a federal standard was needed in order to ensure uniformity. DeSylva v Ballentine.
Federal Law in the State Courts
Federal law in state courts is sometimes referred to as Inverse Erie situation. However, that term may be a misnomer. When federal courts exercise jurisdiction over state claims, the analysis attempts to determine whether there is some federal interest involved that would place the case outside the reserve clause [10th amendment] When state courts hear federal claims, no such balancing is necessary-Supremacy clause requires courts to follow federal law despite competing state interests. Ward.
If US brought Clearfield suit in PA state, would federal law be applicable? Yes. Forum is not determinative of the substantive law that should be applied. And state law has concurrent jurisdiction over most federal claims.
Situations where state courts apply Federal Law
1. State courts are often called upon to construe and apply federal law.
2. A federally created right becomes germane to a state-court action when it is interposed as a defense to a claim based on state law.
State courts may not refuse to adjudicate federal claims if they are competent to do so. Congressional power to create substantive rights includes the power to enforce such rights by imposing portion or all of burden on state courts. Supremacy Clause [Article VI section 2] means that above is true, even if state law/policies are contrary. Testa US 1947.
But Congressional power to enforce rights has allowed state courts with a valid excuse to decline federal claims. Valid excuse include: 1) matter beyond state court’s limited jurisdiction 2) forum non-convenience dismissal. But state courts can’t discriminate against federal claims.
When do state courts entertaining federal c/a apply federal procedural rules?
Usually, state can apply their own procedural rules.
State can’t apply own procedure if imposes unnecessary burden on vindication of federally created rights. Brown/Dice
State can’t apply own procedure if the corresponding federal procedure has substantive aspects. If federal rule can be classified as either substantive or procedural, state court must apply. Brown/Dice
Wingate referred to an analysis of federal law in state courts as being just like spontaneous generation federal c/l analysis.
Dice US 1952: Federal law may displace even a state’s most basic procedural rules, e.g. allocation of fact-finding function between judge-jury, when state court is adjudicating federal created rights. Court held that federal rights providing relief to injured railroad employees required the right to jury trial which is an essential federal right. [recall that the issue in Byrd was also judge-jury: double standard?] Dice. But dissent in Dice asserts that to require Ohio to try a particular issue before a different fact-finder in negligence actions brought under Employer’s Liability Act disregards the settled distribution of judicial power between Federal and State courts.
Brown: Respondent requested a demurr to petitioner’s complaint in an action brought in GA state court under Employer’s Liability Act. Demurr theory was that complaint failed to set forth c/a. Georgia courts sustained demurr on basis of state rule requiring that pleading allegations be construed most strongly against the pleader. Su Ct reversed: “strict local rules of pleading cannot be used to impose unnecessary burden upon rights of recovery authorized by federal law.
Overview of Modern Pleading System
Since modern pleading system replaced c/l pleading system, there has been a debate about how much we should depend on modern pleading to carry out its original function.
1. Some believe the modern pleading system should still carry a substantial share of the burden in eliminating irrelevant issues, and shaping the case. If rules are not rigidly applied, some assert, the courts will become congested with unjustified contentions.
2. Others assert that the purpose of the reform of c/l was to loosen the rules so that cases could turn on the merits and not on the lawyers’ tactics and technical skills. Therefore, pleadings should only be general guides. After all, there are other procedural mechanisms, such as pretrial discovery, summary judgment, and the pretrial conference with which to shape the case, but even these should be applied with flexibility to avoid the elimination of an otherwise-valid contention due to a lawyer’s technical error. Furthermore, applying modern pleading rules with rigidity encourages dishonesty for the crafty lawyer will always be able to fashion a pleading such that it will successfully navigate a minefield of technical rules.
I. Definition: Pleadings are the documents containing the factual allegations that each party is required to communicate to the opponent before trial.
II. Components: The basic forms of pleadings available under FRCP:
A. Complaint or cross-claim elicits motion to dismiss or answer under Rule 12.
B. Counterclaim to complaint elicits reply.
C. If D’s motions to dismiss are unsuccessful, the D must file an answer. In the answer, the D may respond to the P’s claims (admit or deny), assert affirmative defenses, or allege any counterclaims that the D may have against the plaintiff.
III. Purpose: Modern pleading under the Federal Rules of Civil Procedure is intended primarily to provide litigants of notice of the nature of the claims and defenses.
IV. Examples of pleading under Rule 8(a) are found in the Appendix of Forms, which are set out in the Supplement following the FRCP’s. Note that in 1946, Rule 84 was amended to state that the Forms were not mere guides but were themselves “sufficient under the rules.”
I. Required Contents: Federal Rules do not require a great deal of specific fact pleading, except for a few special kinds of cases, such as cases involving fraud or libel. Generally, under federal rules, a complaint is required only to contain
A. “a short and plain statement of the claim showing that the pleader is entitled to relief.” Rule 8(a)(2). It is enough if the federal court complaint contains enough information to put other party on notice of action against him. Dioguardi v. Durning
B. The pleader also must state the grounds for the court’s jurisdiction, Rule 8(a)(1), and
C. a demand for relief, Rule 8(a)(3).
Application: in Dioguardi, P drew up his own complaint and filed it. The complaint ambiguously stated that the collector of customs at the Port of NY (D) converted two cases of tonic bottles belonging to P. He alleged that at a public auction held by Customs to sell items which had not been claimed at Port was illegal, as it did not comply with 19 USCA 1491. Issue: Is it sufficient if complaint in federal court contains enough information to put other party on notice of action against him? Yes. Here, the facts were not well presented but complaint should not be judged on quality of pleading but whether required notice was given. Under the new federal rules all that is required is that the complaint show a statement illustrating that person making complaint is entitled to relief. This challenge of this complaint went to the face of the complaint, not to any of the evidence. The court should be careful not to deny a person his day in court because of the form of the complaint.
E. However, a complaint which alleges “everything but the kitchen sink” may be rejected for being too fact specific and prolix. Decker.
F. Motion to dismiss for failure to state a claim. Rule 12(b)(6) The Federal Rules permit a D to challenge the factual sufficiency of a complaint in a motion to dismiss for failure to state a claim upon which relief can be granted. Standard: A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the P can prove no set of facts in support of his claim that would entitle him to relief. Conley v. Gibson.
G. Rule 12(e) Motion
a. A P must state a claim w/ a level of specificity sufficient for the D to frame a response. If a P’s complaint is factually too vague, a D, in a motion for a more definite statement may request plaintiff to state more facts specifically detailing the claim. Lodge 743 v United Aircraft. Rule 12(e).
b. In current practice, Rule 12(e) motions are disfavored because of liberal notice-pleading standard of Rule 8 and the availability of extensive discovery.
1. Application: A complaint generally alleging negligence in the improper extraction and post-operative care of a tooth was sufficient under Form 9 in FRCP’s Appendix of Forms, without a need for the P to state more definitely the acts constituting the negligence. Webb v. Webb.
2. Application: When material allegations are insufficient for other party to frame a response, a motion for a more definite statement is proper. Motion to dismiss for failure to state a claim must be determined in a light most favorable to plaintiff. Generally it is sufficient if the federal court complaint contains enough information to put the other party on notice. A conditional privilege isn’t grounds for dismissal, while an absolute privilege is. Facts: Garcia was discharged from Hilton Hotel for allegedly procuring women for use as prostitutes
3. United Aircraft information in complaint was insufficient for other party to frame a response. Therefore, a motion for a more definite statement is proper. P Union alleges D Employer violated strike settlement agreement but not recalling strikers as jobs for which they were qualified became available. Over 2,000 registered strikers. D could not respond without more information.
H. Rule 9 requires that certain matters be pleaded with greater specificity or particularity.
1. Fraud or mistake need to be pleaded with particularity. Here it is justified b/c of the potential harm to D’s reputation as a consequences of allegations and to deter strike suits.
2. Court has to balance latter with the possibility that meritous claims won’t be litigated if requirements are strict. Though in other situations, inappropriate to ask P to plead in more detail, for example, if facts are more available to D.
3. Harmonizing Rule 9(b) pleading requirements with Rule (8). Some federal courts have held that Rule 9(b) only slightly increases a plaintiff’s pleading burden, requiring only slightly more notice than rule 8.
a. Application: Denny v. Carey. (holding a securities fraud complaint containing general conclusory allegations of fraud tracking the securities fraud statute, and failing to delineate the underlying transactions constituting the fraud.) Wingate notes that form 13 Model for action for fraudulent convey-not detailed, seems to support Denny v. Carey.
b. Other federal courts have held that securities complaints couches in general terms violate 9(b) Denny v. Barber 2d circuit. Facts pleaded must give rise to strong inference. Stricter interpretation. 4. Less specificity in pleadings increases value of settlement claims.
I. Qualification: Pleading conditions of the mind. Pleading conditions of the mind such as malice, intent, or knowledge may be pleaded generally. Rule 9(b).
J. Antitrust Litigation Some federal courts have suggested a more rigorous and detailed fact p leading in certain complex litigation, such as antitrust cases. However, other federal courts have suggested that the Federal Rules do not carve out a “big case” exception to the general pleading rules.
K. Pleading Special Damages When pleading damages, we first distinguish between special and general damages.
1. General damages are those that ordinarily and necessarily flow from a particular legal wrong which has been set forth.
2. Special damages are peculiar to a particular P such that D cannot reasonably expect to follow from an injury or breach alleged by P. The kinds of injuries that would be classified as “special damages” vary from jurisdiction to jurisdiction. For example, in some jurisdictions medical expenses and loss of wages are special damages. Have to check cases from specific jurisdiction to see what special damages are.
C. Under Rule 9 (g), special damages must be specifically stated in a Federal complaint to put D on notice that such damages are being sought. Many states also require that special damages be specially pleaded. Ziervogal v. Royal Packing Mo Ct. of Appeals 1949
a. Ziervogal. Wingates notes that Ziervogal is an unusually narrow view of a 9(g)-type rule. Usually injuries that augment the physical injury pain and suffering and are considered to be general damages. In Ziervogal, court held it was an error to admit evidence of some injuries, because P failed to include a request for special damages and had neglected to request leave to amend the complaint to include such damages. The court held this even though D had actual notice of special injuries and wouldn’t have been surprised that they were introduced at trial. Facts: P was in an automobile accident with D’s employee and requested damages for injuries sustained to her neck, back, spine, and nervous system. At trial, she also sought to introduce evidence and collect damages for increased blood pressure and a shoulder injury. Missouri, the state in which this case was tried had a rule similar to 9(g).: D found out about increased blood pressure and shoulder injuries through D’s insurance agent and D’s doctor also verified this fact.
b. Contrast: Ephrem v. Phillips A woman was injured in an automobile accident. Her alleged injuries were lacerations to her head, body, and limbs, but she sought and was permitted to collect damages for a required abortion. The court held that the abortion augmented the physical injury and pain and suffering of the accident and therefore would correctly be classified as “general damages.”
Prayer for Relief. The concluding paragraphs of the complaint typically contain the “prayer for relief” setting forth the legal and equitable remedies the pleader seeks for the claims set forth in the complaint.
1. In federal court, a pleader must set forth a “demand for judgment for the relief the pleader seeks.” A pleader may seek alternative relief, or several different types of relief (such as a combination of legal and equitable remedies.) FRCP8(a)(3)
3. In both federal and state courts, the prayer for relief has been criticized as unnecessary. In most situations, damage amounts can be gleaned from discovery procedures. A P is usually awarded less than that stated in prayer for relief, but—at least in federal court-- can be awarded more than that stated in prayer.
4 A federal pleader is entitled to recover an amount exceeding what was demanded in the complaint. FRCP 54(c). Bail v. Cunningham. Most states also follow the rule with regard to recovering excess damages.
a. Default exception: In cases where the D suffers default judgment, then damages are capped by the amount in the prayer for relief (ad damnum clause). Otherwise, D would have an unfair disadvantage in considering whether to default; he might not have taken the higher amount in account.
b. Malpractice Exception: Some states have eliminated prayer for relief in medical malpractice cases (although the complaint must allege that the claim meets or exceeds the amount-in-controversy jurisdictional requirement.). Some states also prohibit pleaders from requesting an amount in all PI cases. This is so because of concerns about protecting Ds from the publicity resulting from large damage claims.
c. Application: Bail v. Cunningham. On day of trial, P moves that prayer for relief be increased from $100,000 to $250,000. Court denies motion because D was not given notice. Generally prayer for relief is not made available to jury, however, it can be argued to jury as part of the closing statements. However, jury returned figure for higher figure: $150,000. FRCP 54(c) states that judgment after trial should be for relief warranted even though relief isn’t in the complaint. The only question is whether P’s earlier denied increase changes the interpretation of FRCP 54(c). The court holds that it does not, therefore, P can be awarded the higher figure.
Responding to the Complaint
Ds have two options.
1) D may either challenge the complaint by a motion prior to answering, or
2) by filing an answer to the complaint.
Challenging a Complaint: Rule 12 provides for seven separate grounds for dismissing a complaint:
Lack of smj Rule 12(b)(1)
Lack of pj Rule 12(b)(2)
Improper venue Rule 12(b)(3)
Insufficient process Rule 12(b)(4)
Insufficient service of process Rule 12(b)(5)
Failure to state a claim upon which relief can be granted Rule 12(b)(6)
Motion for jdgmt on pleadings 12(c)
Motion for more definite statement 12(e)
Lack of PJ, improper venue, insufficient process, or insufficient service of process must be asserted in a timely manner, either in a Rule 12 pre-answer motion, the answer, or an amended pleading (permitted under Rule 15). The failure to raise these defenses as described above, constitutes a waiver of these objections. Rule 12(h)(1).
Objections to the court’s subject matter jurisdiction are not waivable and are never lost. Such objections may be raised prior to, during, and after trial. If the court finds that it lacks smj, it must dismiss the case.
Filing an Answer
1. Some states permit general denials. Other states do not permit a D to generally deny the entire complaint.
2. In CA a general denial can be used only if complaint is NOT verified, e.g. if complaint is not sworn to/signed under oath. General denials are widely used in CA. where a general denial means that only material allegations are in dispute. It is a useful tactical move: it does not disclose what defenses are or which facts are being disputed, and therefore leaves P uncertain of D’s actual position. However, they are disfavored by commentators. Also, general denials are simple and helpful in avoiding technical errors that might lead to inadvertent admissions.
3. A federal pleader may “generally deny” all the allegations contained in a complaint, including the jurisdictional allegations. Rule 8(b). A general denial under Federal Rule 8(b) however is more difficult and unusual. 8(d) provides that all averments to which D has not specifically responded are deemed admitted. General denials are disfavored on the theory that at least some allegations in the complaint are truthful and incontrovertible such as statement of a court’s jurisdiction.
a. 8(b) requires that denials fairly meet the substance of the averments denied. Also there is a basic requirement that denials be pleaded in good faith. If a court decides that a general denial does not meet this standard, it may deem the D to have admitted the P’s specific averments. And usually some allegations in the complaint are truthful and incontrovertible such as statements of the court’s jurisdictions. Therefore, general denials are rarely alleged in federal practice.
b. Application: Zielinski v. Philadelphia Piers
A complaint in a PI action alleged P was injured by a fork lift that was owned, operated, and controlled by Carload Contractors. The allegation was that D’s employee had operated the lift negligently. Before the accident, company had been sold to another owner. The forklift operator was not aware of this. The forklift itself was still owned by Philadelphia Piers and was leased to Carload. Philadelphia’s initials remained on the forklift.
But both the alleged D and the real D had the same insurance agent. When the alleged D received the complaint they forwarded it to their insurance agent, informing them of the mistake and asking them to handle the matter. However, P did not find out that he was suing the wrong party until the pretrial conference because Philadelphia generally denied this allegation. In the federal courts, a D who knowingly makes inaccurate statements may be estopped from denying those inaccurate statements at the trial. Rule 8(b) requires that denials fairly meet the substance of the averments denied. This, requirement, together with the basic requirement of good faith in pleading contained in Rule 11 probably would provide adequate grounds for this case.. Rule 8(b) also requires that the party shall state in short and plain terms his defenses to each claim asserted against him. If Philadelphia piers, had stated their defense to the complaint, was that they were not the employers of the personnel involved then P would have been able to bring this action against the property party. D seemed to lack the good faith the federal courts requires because they waited until the time of trial to raise their defense that Zielinksi had sued the wrong party. Wingate says that usually, a court would have allowed amendment to complaint. Here they don’t b/c s/l. If not modified, would have to proceed as though forklift driver were employee, based on improper, inadequate denial.
This was a PA federal court sitting in diversity. The court states that they could find no federal rule on point (though I wonder why Rule 8(b) wouldn’t have been on point) and so they apply the state law. The PA law to be applied is that of equitable estoppel which prevents a party from taking advantage of the s/l where the P has been mislead by D’s general denial response.
When a general denial is impermissible or improper, D must utilize a specific denial. This does not mean that D must respond to every sentence in the complaint. Very often D’s can deny entire paragraphs and is permitted to do so by merely listing the paragraph number.
A D may respond to allegations in a complaint by stating that the pleader “neither admits or denies” the P’s allegations. Rule 8(b) does not particularly prohibit evasive denials but such a response may fail to comport with the requirement that denials fairly specifically meet the substance of averment denied. However, some states specifically prohibit evasive denials.
Denials based on Lack of Knowledge or Belief.
A party may also state that the pleader lacks the knowledge or sufficient information upon which to form a belief as to the truth of the averment. A response based on lack of knowledge or information has the same effect as an outright denial.
Example: A D’s response that it lacked knowledge or information concerning whether it was an unincorporated business association constituted a defective denial b/c this is a fact that is preemptively within the D’s knowledge and frequently is a matter of public record.
Denials Constituting a Negative Pregnant
A negative pregnant is a form of denial in which D’s denial effectively includes an affirmative implication that is favorable to the adversary.
P’s complaint for recovery on a series of notes contained in the allegation that as for each note the “sum of $150 is a reasonable sum to be allowed the P for its attorney’s fees. A summary judgment was granted in favor of the P and the court awarded the P $100 in attorney’s fees. D appealed on the ground that the denial put the matter of attorney’s fees in issue. On appeal, P contended that D’s general denial contained a negative pregnant supporting the fee award. The State Supreme Court agreed, holding that the D had only denied that $150 was a reasonable fee, but not that any lesser fee would be a reasonable amount. If D wanted to contest any other amount, the she had to state in her responsive pleading what they considered the maximum amount to be.
To avoid negative pregnant: Wingate says most common negative pregnant situation is where P alleges certain amount is due, and D denies. To avoid, if D owes nothing she should deny she owes P $X or any amount whatsoever. Most courts today would treat Wingfoot denial as adequate or would allow amendment.
Rather than denying allegations of the complaint, an argumentative denial is where D pleads affirmative facts that are inconsistent w/ the complaint. Example: Complaint: on June 12, D assaulted me. An argumentative denial: on June 12, I was in Tahiti. In some older cases decided under the codes, argumentative denials were held to be defective. Today, however, it is unlikely that any court would treat such a denial other than as fully effective to dispute the opposing party’s allegation.
A denial mimicking the language of the complaint, denying all allegations as wholly untrue (I did not execute, implement, and deliver the K. Clear that D did not do all three of these things, but might have done one or two of them.) Most courts would give a Conjunctive denial the effect of denying all (three) parts or would allow an amendment.
An affirmative defense must be raised in the answer if it is a defense that does not flow logically from the P’s claims or claim.
The purpose of requiring the assertion of affirmative defenses is to put P on notice of the existence of the defense and to avoid unfair surprise.
Affirmative defenses are available under both state procedural rules and Rule 8(c). FRCP 8(c) covers affirmative defenses. Nineteen specific defenses are listed as affirmative, requiring pleading and proof by a defendant. The rule also has a residuary clause mandating pleading of “any other matter constituting an affirmative defense.” What constitutes these other matters is left to the discretion of the court. If not mentioned in 8(c) then substantive law determines whether matters not listed are affirmative defenses. If notice of statutory limitations on damages is necessary to prevent prejudice to P, then it will be treated as an affirmative defense.
Federal Diversity Cases:
In Federal diversity cases, the federal court usually will look to state law to determine the availability of an affirmative defense, but not always.
Ingraham Federal Court of Appeals
A statutory cap on damages is an affirmative defense that is waived if not raised in the pleadings. Facts: Several individuals brought suit against the Gov’t for negligent treatment by military physicians. At trial, damages in excess of 4 million were awarded. On appeal, the Govt (D) attempted to raise for the first time a state limitation on general damages in malpractice awards. FRCP 8 (c) requires that any matter constituting an affirmative defense be raised in the pleadings. Several factors are relevant in determining whether a matter is in fact such a defense.
1) whether the matter is intrinsic or extrinsic to a plaintiff’s case; Generally, an affirmative defense avoids a c/a while a denial destroys c/a.
2) which party has access to the evidence
3) whether fairness mandates disclosure of the defense early in the proceedings. In other words, will allowing it at a given point be an unfair surprise?
4) Should defense be indulged or disfavored as a matter of policy (e.g. fraud and other special matters.)
Here, the cap on damages would appear extrinsic to the c/a of the plaintiff’s. Also, had the plaintiffs been apprised of this defense early in the proceedings, they might have tried to maximize special damages and minimize general damages. For these reasons, it appears that the statutory cap is an affirmative defense, and was waived when not raised in the pleadings. Affirmed.
In Taylor v. United States, as a matter of California law, the state statute (cap on damages) at issue in this case was understood to be an affirmative defense. The Ninth Circuit held, however, that this determination is not binding on a federal court because the proper characterization of the statute in this case, which was brought in federal court, is a matter of federal procedural law. Federal rules do not consider damage limitations as affirmative defenses. Here, treating cap as non-affirmative defense does not prejudice other party. Thus statute not an affirmative defense and can be brought in. But in his dissent from the denial of certiorari in Taylor, Justice White notes that this holding conflicts with that of Ingraham. (Note that Taylor is Federal Question court. Federal Tort Claims Act.)
But can differentiate Taylor and Ingraham. In Taylor, all damages were subject to a statutory cap, so it is unlikely that P’s being apprised of cap would have changed the outcome of his award. In Ingraham, only general damages to malpractice awards were capped. Thus in Ingram, P was more prejudice, b/c had he been apprised of this defense early in the proceedings, P might have tried to maximize special damages and minimize general damages.
Federal Courts Civil Procedure Two
FRCP 7(a) Reply only required if answer alleges counterclaim.
FRCP 8(d) Effect of failure to deny. Averments in a pleading to which a responsive pleading is required are admitted when not denied in the responsive pleading. Averments in a pleading to which no responsive pleading is required shall be taken as denied or avoided.
Reply is often required in response to D’s pleading of an affirmative defense, or if D counterclaims.
CAL: adheres to federal rule
Rule 15(a): Amendments Allowed:
a) Once as a matter of course at any time before responsive pleading is served or
b) If pleading does not require responsible pleading, and action is not yet on the calendar, then anytime within 20 days after pleading was served.
c) Otherwise only be leave of court or written consent of adverse party (leave shall be freely given when justice so requires. 15(b)
Responding to amended pleading:
d) Within time remaining for response to original pleading or within 10 days after service of amended pleading, whichever is longer (unless court otherwise orders.)
There is a tactical dilemma to objecting to evidence because then the other side may simply seek leave to amend thus giving them more time to think about new c/a’s.
15(b) urges court to grant leave to amend when presentation of merits of action would be served, and other side wouldn’t be prejudiced. How can other party show prejudice? D is prejudiced if evidence would have been available but is not available b/c of delay
Application: Moore v. Moore.
After a custody trial, Mrs. Moore filed a motion to amend pleadings to include a counter claim and a motion for the award of counsel fees. In the motion to amend, she sought to assert a counterclaim for custody, child support, separate maintenance. Court granted motion to conform, so she got custody etc. even though her pleadings did not ask for such relief. On appeal, Mr. Moore asserts that because Mrs. Moore requested no affirmative relief in pretrial pleadings the court erred in affording her any relief. D.C. has a rule 15(b) which is identical to FRCP 15(b). The appeals court tells us that 15(b) is an attempt to favor substance over form and “to avoid the tyranny of formalism and to promote resolution of cases on their merits by permitting the amendment of pleadings to reflect the actual litigation which transpired. In upholding this general policy of 15(b), the court distinguishes between “express consent” and “implied consent” of the parties at trial. Express consent is when both parties agree that issues not raised in pleadings are to be tried. Implied consent is when parties recognize that an issue not stated by the pleadings. The clearest indications of a party’s implied consent lie in the failure to object to evidence, or in the introduction of evidence that is related to the new issue and not to other matters specified in the pleadings. So, the court searches entire court record to look for actual notice. Here, although Mrs. Moore did not request child support etc. in her pleading, she asserted in answer to appellant’s complaint that the best interests of the child would be served by the child’s being in her custody. Also, both parties introduced evidence supporting their respective qualifications for custody w/o objection. Child support was implied because it is usually a part of custody disputes where the best interests of the child are at issue. And because Mrs. Moore introduced evidence of the financial needs of child w/o objection. But Wingate points out that financial need may also be relevant to which party gets custody. If evidence is relevant to issues that were already raised, then the other party does not have notice that new issues are being litigated. Evidence must be relevant to unique issues. Although here, that child support is an inherent issue in child custody disputes would be sufficient to give other party notice. In light of these factors, the court concluded. Rule: If issues not raised in pleadings are tried by express or implied consent of the parties, the court has the discretion to permit post-trial amendments to pleadings to reflect the actual litigation that transpired. Maintenance is not an inherent issue in this kind of proceeding. But evidence of D’s financial needs were introduced without objection. Why didn’t D’s failure to object to this evidence mean that maintenance could not be introduced? B/c D’s financial needs were also relevant to child support and custody. They are not uniquely relevant to maintenance. Therefore, trial court abused its discretion in allowing this amendment. Evidence of expenditures on counsel were introduced without objection. Judge reversed issue and then held hearing on issue. Hearing serves to show that court cured any unfair surprise by new issues being injected into trial.
Illustration in Beeck v. Aquaslide (8th)
Key term: abuse of discretion. P injured on an aquaslide. There was a question as to who made the slide since it had been sold through a distributorship. And because D had relied on the investigations of three insurance companies, each of which had conducted an investigation of the circumstances surrounding the accident. D initially admitted manufacture of slide but then later moved to amend answer to deny manufacture after s/l had run. P appealed asserting that it was an abuse of the trial court’s discretion to grant leave to amend to the manufacturer in order to deny these admissions after s/l had run. Rule 15(a) declares that leave to amend “shall be freely given when justice so requires.” Allowance or denial of leave to amend lies within the sound discretion of the trial court, as is review-able only for an abuse of discretion. Forman v. Davis. With regard to whether to let D amend, trial court looked to see whether there was any sign of bad faith, prejudice, or undue delay on D’s part. Leave to amend will be granted when justice so requires absent bad faith, prejudice, or undue delay. D’s reliance on the investigations of the insurance companies led the trial court to conclude there had been no bad faith on D’s part. With regard to prejudice, the trial court held that the facts did not support P’s assertion that, because of the running of the two year Iowa s/l on PI claims, the allowance of the amendment would be detrimental to the litigation. At the time of the trial court’s decision, it wasn’t certain that defendant would prevail at trial on the factual issue of whether they were the manufacture. P wasn’t conceding that Aquaslide didn’t manufacture. Doesn’t show that P wouldn’t be able to recover against other Ds: retailer, wholesalers etc. If court denied D leave to amend, Aquaslide would have to go forward with the trial on the fact that it was the manufacturer. Aquaslide would have been unable to contend that it manufactured the waterslide. But the other side of the argument is that it is unreasonable to expect P to continue to spend resources to prove that D made the aquaslide after it already said that it did. Aquaslide should have been responsible for checking to see if slide was theirs. Suppose Aquaslide had known that slides were regularly copied and had been sued before in the past for slides made by others. At that point, reliance on insurance companies identification might be bordering on bad faith. The court reasoned that the amendment would merely let the D contest disputed factual issue at trial. Further it would be prejudicial to D to deny the amendment. The burden is on the party opposing the amendment to show prejudice. Hanson v. Hunt Oil.
Prejudice to P wasn’t certain at time of court’s decision to allow amendment (proceed v. other parties, litigate issue of whether D manufactured.)
P could have made prejudice clearer if he had not conceded at motion hearing that slide was not manufactured by D. i.e. no way can win if amended. The district court granted leave to amend. On the motion of the D, a separate trial was held on the issue of whether D manufactured, designed, or sold the slide.
Amendment of claims:
A federal pleader may amend if the allegations in the amended pleading arose out of the same conduct, transaction or occurrence set forth in the original pleading (or was attempted to be set forth in the original pleading.)
Some courts are less likely to permit amendments that add substantially different facts to the original allegations or change the focus of a litigation. Some courts restrict an amendment taking place if amendment alleges a new c/a. However, in most courts it doesn’t matter as long as c/a arises under the same transaction alleged in complaint.
Four Requirements of FRCP 15 Amendment of parties.
1) allegations in the amended pleading arose out of the same conduct, transaction, or occurrence set forth in the original pleading (or was attempted to be set forth in the original pleading.)
2) The other party has received notice of the institution of actions such that the party will not be prejudiced in maintaining a defense on the merits
3) The other party knew or should have know that, but for a mistake concerning the identity of the proper party, the action would not have been brought against the party.
4) 2 & 3 must be met within this period provided by Rule 4 for service of process. (usually 120 days.)
Primary concern of 15(c) is notice.
Relation Back Doctrine:
In certain special circumstances, a party may be permitted to amend a pleading after a s/l has run, and then the amended pleading “relates back” to the date of the original pleading. The relation-back doctrine then is a saving doctrine that permits otherwise expired claims to be asserted, or mistaken parties to be changed or added to the litigation. In federal practice, relation-back of time-barred amendments is permitted under limit circumstances set forth in Federal Rule 15(c)
Worthington v. Wilson Dst Court Ill
P filed complaint in state court against the village of Peoria Heights and three unknown-named police officers, claiming that treatment by police officer’s deprived P of his constitutional rights in violation of the civic rights act 42 USC 1983. The Village removed the action to Federal Court (on the basis of federal question.) P filed amended complaint naming Ds, David Wilson and Jeff Wall. D moved to dismiss complaints on grounds that s/l had run. For this federal c/a, state s/l applies because the federal law does not provide a s/l and a state s/l applies as Federal c/l.
Issue: Can amendment setting forth new names relate back to the original claim? If there is no relation back then the claim is barred by the s/l. If case hadn’t been removed to federal court, then there would be certainly be relation back b/c State relation back laws are more forgiving. D’s say FRCP 15(c) applies, and according to which, P cannot relate back the new parties to the original complaint. This is so because FRCP 15(c) applies only when the incorrect party was named as a “mistake.” Here, there was no mistake. Rather, P simply did not know the name of the officers when the complaint was filed.
FRCP 15(c) states whatever may be the controlling body of limitations law,. If that law affords a more forgiving principle of relation back, then than the one provided in FRCP, then it should be available to save the claim. Here, s/l is from state law. And state relation back doctrine is more forgiving. But court doesn’t go through this analysis. Why? B/c state law does not provide the s/l. Rather the s/l is provided by Federal Common Law which simply borrows the state s/l to fill in a gap left by a federal statutory provision. So Controlling body of limitations law is federal, and thus the 15(c) analysis is irrelevant. But Wingate says you can argue it the other way too.
Relation Back and Erie Analyis:
1. Federal courts disagree whether 15(c) is substantive or procedural for Erie purposes.
2. Does the reversion of Rule 15(c) make Erie analysis unnecessary? JS: yes with regard to relation back. But Erie analysis is still necessary to determine which s/l should apply. The relation back determination would follow from that decision.
States Approach to Relation Back
In California, one can sue potential D’s whose names are fictitious. Can substitute names for actual D. For fictitious D and that amendment relates back at bottom of complaint have to allege she is ignorant of the real names. Lawyers do this in CA as a matter of course as a precautionary device. CA statute 474 can be interpreted to include situations where P knows name of D but doesn’t know facts that give rise to claim. Even if P knows identity of D and relevant facts but there is not a reasonably known legal basis for recovery, can still use John Doe rules under CA law. However there is an outside limitation of 3 years. D must be served within three years of complaint. But probably won’t really have 3 years b/c case would have gone to trial by then.
In MA law XYZ company is listed as D though Wingate not sure if you even need the XYZ place holder. MA laws even more liberal than CA’s.
A supplemental pleading is one which sets forth facts that have occurred since the date of the pleading which is sought to be supplemented.
Federal Practice: Under 15(D) supplemental pleadings can be used to cure a defect in original pleading.…
A party must seek permission to the court to serve supplemental pleadings. The supplemental proceedings must satisfy three requirements.
(1) reasonable notice to the opposing party of the supplemental pleadings.
(2) Under “terms that are just”
(3) Setting forth transactions, occurrences, or events that have happened since the date of the pleading that is being supplemented.
New Claims: There is substantial authority in lower federal courts that a P (or other pleader) is permitted to bring new claims in a supplemental pleading. Keith v. Volpe. (9th Cir. 1988). This is based on the rationale that allowing such supplemental pleadings promotes the economical and speedy disposition of the controversy. A minority of federal courts take the position that newly arising claims can only be asserted in a new action.
Counter Claims to a Supplemental Pleading: A D is permitted to assert counter-claims to a supplemental pleading even after D has filed an answer. Rule 13(e)
Correcting Factually deficient Claims through Supplemental Pleadings. A P may correct a factually deficient pleading through supplemental pleadings. This provision was added to the Rule in 1963 to correct a split in the lower federal courts concerning whether a party could use supplemental pleadings to cure defective original pleadings.
Some states prohibit pleaders from asserting a new cause of action in a supplemental pleading. Other states, however, very liberally, permit a pleader to add new claims or issues filed as supplemental pleadings even if the pleader had no c/a at the time of filing the original complaint.
Example: Under NY State rules permitting liberal filing of supplemental pleadings, a New York court permitted a wife suing her husband for separation to supplementally add a cause of action for divorce, on the ground that husband had developed into an adulterer. Herzog v. Herzog
Contrary NY authority: Another NY court refused to permit supplemental pleadings that alleged new theories of liability based on facts not previously alleged; three years had elapsed since the original complaint and discovery proceeded on the original legal theories, and the P failed to file an affidavit establishing the merits of the proposed supplemental claims or asserting a reasonable excuse for the Ps delay in seeking leave to serve the supplemental pleadings. Hypertronics.
Action to dismiss under Rule 11
Policy of action to dismiss under Rule 11: D’s right to be free of frivolous or unfounded litigation vs P’s right to her day in court.
Historical Notes on Rule 11: Rule, 11, the so-called federal sanctioning provision, was a largely moribund provision from 1938 through the late 1970’s and early 1980’s. Only a few dozen cases reported sanctions under the old rule 11.
1983 Rule 11 amendment. In 1983, the Advisory Committee on Civil Rules amended Rule 11 to “put teeth” into the rule and empower federal judges to more actively impose sanctions for frivolous and inadequately investigated complaints. The major doctrinal shift in the courts was away from a subjective standard for what constituted a reasonable inquiry prior to filing, to an objective standard, so that subject g/f was no longer a defense. The 1983 amendment of Rule 11 led to a decade of aggressive enforcement and imposition of Rule 11 sanctions, with thousands of reported decisions in the lower federal and appellate courts. Many of these cases set forth conflicting interpretations of amended Rule 11, and sanctions varied widely. Rule 11 sanctions became a tactical weapon often used by defense lawyers. While Rule 11 was initially enacted to prevent needless delay and undue defense, under the 1983 amendment, Rule 11 became a source of undue delay and defense. (Wingate notes that there were even Rule 11 responses to Rule 11 motions.)
1993 Rule 11 amendments. During the decade spanning 1983-1993, abuse of Rule 11 led to another round of reform, culminating in the revision of Rule 11 in 1993. The intended purpose of the 1993 rule revision was to lessen the harsh impact of the 1983 amendments on the practicing bar. The two major revisions of Rule 11 changed the impositions of sanctions from mandatory to discretionary and included a “safe harbor” provision to allow a pleader to correct or withdraw a challenged pleading on paper.
Scope of Rule + Signature and certification requirements: Rule 11 Every pleading, motion and paper filed in federal court must be signed by an attorney of record or, if a party is not represented by a lawyer then by the party. In general, pleadings do not need to be verified (that is, by sworn oath before a notary—under penalty of perjury.) or accompanied by an affidavit. Rule 11(a).
Reasonable Inquiry Standard: A pleader certifies that the allegations in the complaint were formed after “an inquiry reasonable under the circumstances.” In addition, the pleader certifies that, to the person’s best information, and belief (Wingate says best information and belief):
• The complaint is not being presented for any improper purpose, such as to harass or cause unnecessary delay or needless increase in the cost of litigation.
• The claims, defenses, and other legal contentions are warranted by existing law or by a non-frivolous argument for the extension, modification, or reversal of existing law, or the establishment of new law. 11(b)(2)
Under amended Rule 11 “non-frivolous” is defined by an objective standard: g/f standard no longer a defense. The “non-frivolous” element dicates that attorneys should not be sanctioned if they can show g/f + research yielding some support for attorney’s legal position, even if minority support (law review articles, dicta, dissenting opinions etc.)
• The allegations or other factual contentions have evidentiary support or are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery.
• Denials of factual contentions are warranted on the evidence, or are reasonably based on a lack of information or belief.
Sanctions for Rule 11 violations. The 1993 revisions changed several significant provisions relating to the imposition of sanctions for violations of the rule.
Who may be sanctioned: A party, lawyer, or law firm may be sanctioned for violations of Rule 11. A party who signs a court paper may be independently subject to Rule 11 sanctions. Absent unusual circumstances, a law firm will be deemed responsible when one of its lawyers has violated Rule 11.
Who may seek Rule 11 Sanctions: Any person, party, or the court on its own initiative, may seek Rule 11 sanctions.
Sua Sponte Rule 11 Sanctions: If a court wishes to exercise its discretion to impose sanctions sua sponte, it must “enter an order describing the specific conduct that appears to violate subdivision (b) and directing an attorney, law firm, or party to show cause why it has not violated this subdivision (b) with respect thereto. Hadges. (If a court initiates Rule 11 sanctions, then the safe harbor does not apply) The advisory committee note on the 1993 amendment specifically states that such sanctions will ordinarily be imposed only in situations akin to contempt of court. Wingate adds that Rule 11 motions imposed sua sponte are likely to be for conduct in front of judge. There are no compensatory sanctions when sanctions are imposed sua sponte.
Notice; safe harbor provision; opportunity to be heard: A person seeking sanctions for a Rule 11 violation is required to serve notice on the person who has filed the challenged paper. That person then has 21 days (a safe harbor) either to withdraw or correct the challenged claim, defense, contention or allegation. If the challenged paper is not corrected or withdrawn within 21 days, then the person seeking sanctions may file the request for sanctions with the court. The pleader has to be given an opportunity to respond to the alleged Rule 11 violation.
Purpose of the safe harbor provision. The safe harbor provision was intended as a common-sense reform to alleviate the large number of Rule 11 sanctions that were sought and imposed for technical defects under Rule 11 from 1983-1993. Thus the safe harbor provision is intended to support and enhance the goal of Rule 11 to secure the just, speedy, and inexpensive resolution of civil actions.
Sanctions imposed at court’s discretion. Prior to the amendment of Rule 11 in 1993, a court was required to impose a monetary sanction against a Rule 11 violator. The 1993 amendments of Rule 11 substantially modified the available array of sanctions under the rule and additionally provided that sanctions may be imposed in the court’s discretion.
Among the available sanctions, a court may issue a “directive of a nonmonetary nature: against a person who has violated Rule 11 (i.e. reprimand, censure, mandatory attendance of seminar.) A court may also order the violator to pay a monetary penalty payable to the court that is necessary to deter a repetition of the offending conduct. A violator may be required to pay some or all of the expenses incurred in seeking the sanction including attorney’s fees. In unusual circumstances, effective deterrence may require monetary payment to those who have been injured by the violation.
An Attorney is entitled to rely on the objectively reasonable representations of the client. No longer are attorneys required to certify that their representations are “well-grounded in fact.” “Reasonable” depends on surrounding circumstances including
1) how much time for investigation was available to the signer,
2) whether he had to rely on a client for information as to the facts underlying the pleading;
3) whether he depended on forwarding counsel or another member of the bar.” Hadges
Hadges v. Yonkers Racing Corp
US Ct of Appeals 2nd Cir 1995
Facts: District Court dismissed Hadges’ claim of fraud. It went on to impose Rule 11 sanctions on Hadges and his attorney, Kunstler for misrepresentations and omissions in written motion.
The Rule 11 sanctions were based on 2 grounds (1) Misstatement of the date of the alleged “scratching incident” [Hadges submitted to the court a “scratch sheet” that he claimed documented that fact that the NY state racing board barred him from a race in 1989 following the re-issuance of his racing license. However, YRC later demonstrated that the sheet was from a 11/87 race.] (2) Misstatement about Hadge’s lack of work in the years since. YRC did not take into account the new Rule 11 and its safe harbor period of 21 days Hadges was entitled to use to amend the challenged paper (claim, defense, contention, allegation, or denial.) The court record shows that Hadges would have withdrawn or appropriately corrected his misstatements thus avoiding sanctions. Hadges did, in fact, correct one of his misstatements that he had raced at Monticello in 91 and 93. Here there was evidentiary basis in the record to support Hadges allegations.
Difference between Rule 11 and 12(b)(6) motions? Rule 11 looks behind allegations of complaint to see whether there is basis for suit. Latter merely addresses adequacy of allegations. For purposes of 12(b)(6) motion, allegations are deemed to be true. In Anderson Rule 11 b/c D’s contended no factual support for claim.
Benefits of Rule 11 motion, Anderson Example: Small % of resources spent for big $ firms. Possible frustrated and distracted, P, a smaller firm. Delayed P’s discovery. Required P to come forward w/ support for factual allegations earlier than otherwise would have to do so: Rule 11 is one (tactical) way of getting information earlier. Same with motion for summary judgment.
Drawbacks of Rule 11 motion, Anderson Example: Alienated Skinner (or would alienate judge if Rule 11 not brought upon reasonable foundation). P’s attorney became angry so this motion strengthened his ties to the case.
RES JUDICATA, “a thing adjudicated,” is a term used by courts to describe two distinct doctrines concerning the preclusive effect of prior judgments. The doctrines are
1) claim preclusion (true res judicata) and
2) issue preclusion aka collateral estoppel.
Goals of Res Judicata
1. Conserve judicial resources
2. relieve parties of the burdens and expenses of vexatious suits
3. encourage reliance on adjudication by preventing inconsistent decisions.
I. Claim Preclusion
A. Definition: Once a claim has been presented for adjudication and a valid and final judgment has been rendered on the merits, the same claim cannot be re-litigated in a subsequent suit between the same parties
a. Merger: When a P wins, the claim merges into the judgment and the P cannot seek relief on that claim in a subsequent separate lawsuit.
b. Bar: When P loses, P’s claim is extinguished and the D’s judgment acts as a bar to P seeking relief on same claim.
B. The main inquiries with regard to this rule are:
1) Valid judgment
2) Final judgment
3) Judgment on the merits
4) Parties in subsequent action must be identical to parties in first action
5) Same claim
C. Valid Judgment
1. PJ, SMJ, constitutionally adequate notice.
2. Collateral attack: Prior judgments may be attacked collaterally on jurisdictional grounds in a subsequent proceeding if D never raised the jurisdictional defect and defaulted.
D. Final judgment
1. Finality is the completion of all of the steps in the adjudication process short of execution.
2. MAJORITY APPORACH + Federal Courts+R2J13: Claim preclusion will be given effect even if the appeal is pending.
3. MINORITY APPROACH: Only give claim preclusion effect to judgments if the time for appeal has passed or the case has been finally resolvy76tfced by the appellate court.
E. On the Merits
1. Disposition based on the substantive determination of P’s right to relief
2. rather than on a procedural or technical ground: a substantive determination of rights.
3. Any judgment in favor of the P is “on the merits” b/c substantive determination of P’s right to relief.
4. Claim preclusion applies if D defaults.
5. Not every judgments for D is not “on the merits” I.e. D wins b/c lack of SMJ, improper venue, P can re assert claim in proper court.
6. Dismissals (failures to amend): courts SPLIT
A) CA and some courts: no preclusion b/c 1st judgment only determined that 1st complaint was insufficient/defective. No judgment reached on the merits of the complaint.
B) FRCP 41(b) Unless otherwise specified by court, dismissals under this rule other than for lack of PJ, SMJ, IV, or failure to join a party under Rule 19 operate as an adjudication of the merits.
Hypo: P files complaint that D’s negligence causes auto accident. D demurrs b/c under substantive law of state have to plead and prove lack of own contributory negligence. Trial court grants demurr and gives P 20 days to amend. P goes to Mexico, and six months later files complaint and alleges lack of own contributory negligence. In most states claim preclusion bars.
Summary judgments are considered on the merits. Addresses P’s right to relief. Evidence and arguments are presented on both sides so both parties have had an opportunity to be heard on the matter.
12(b)(6) dimissals for failure to state a claim may be considered on the merits. Might depend on whether outside material is introduced (if it is then similar to summary judgment.) Roadmap 438
F. Between the Same Parties
1. CP applies only to persons who were parties to first suit or “in privity” with them.
A. Examples of modern “privity relationships”
1. legal representatve
2. employers/employees or agency relationships.
C. Mathews v. New York Racing Association Dst. Court Southern Dist of NY
Facts: The NY Racing Association (Association) (D) employed the Thoroughbred Racing Protective Association (D), a private detective agency, for security purposes. Mathews (P) having unsuccessfully sued employees of Thoroughbred Association (D) in a prior action, brought a second suit on the same c/a against Thoroughbred, and Thoroughbred’s Employer, NY Racing Agency. Rule: A judgment against an agent or employee may bind his principal or employer under the doctrine of respondeat superior. Here employees/agents were the group that allegedly caused the harm. If the employees/agents are not at fault, there is no basis for corporate liability..
G. Same Claim. What is a claim?
1. First Approach: Single Transaction
Restmt 2d Judgments § 24 defines “claim” as embracing all the remedial rights flowing from a single transaction or series of connected transactions.
Restatement (second) Judgments §24 lists some considerations that determine whether a factual grouping constitutes a single transaction. Three categories for evaluation:
a) Whether facts are related in time, space, origin, or motivation.
b) Whether facts or events form a convenient trial unit
1) See Jones below.
c) Whether the treatment of facts as a unit conforms to the parties expectations or business understanding or usage.
Rush v. City of Maple Heights.
Facts: P injured on motorcycle. Presented two claims to city for failure to maintain roads: 1) injury to personal property. Then after damages were awarded on first, 2) PI’s she suffered in accident. D asserted defense of res judicata. On 2) Court found for D b/c P split claim. PI and PD are from same wrongful conduct and can only bring one claim to recover for both.
Rule: Damages resulting from a single tort suffered by one person consisting partly of property damages and partly of PI damages are the subject of only one action against a tortfeasor. One action frees P of delay and burdensome expense and relieves D of the injustice of being subjected to more than 1 suit for a single tort.
Jones v. Morris Plan Bank of Portsmouth. Supreme Ct. of Appeals VA
Mandatory not optional acceleration clause in retail installment K, whereby default of one payment causes entire K amount to be due. Accordingly, P’s suit for one installment bars later actions for other installments. Facts: Jones (P) purchased an automobile from Parker, a dealer. P agreed to pay of the balance in 12 installments. P failed to make payments for May and June when payable, and the Bank obtained judgment against him for the two payments. The judgment was satisfied by Jones (P). Later, when Jones (P) failed to meet the July installment payment, the Bank D instituted another court action and repossessed car. P filed a plea of res judicata. Jones (P) sued the Bank (D) for conversion on the theory that the Bank, in obtaining a judgment for the May, June installments, had waived, under the acceleration clause, to sue for the balance which became due at the time of first failed payment. Analysis: Here, it was essential that the Bank institute an action for all of the installments due rather than institute its action for only two of the installments and later bring another action for others. One test to determine whether a demand is single or entire is to see if the same evidence will support both actions; if so, there is but one c/a. ;’p
Since all of the installments were due at the time of Jones’ default, the evidence to support the action on two installments was identical to the evidence to maintain an action upon all the installments. END
2. Primary Rights Analysis (CAL)
“Same claim” is defined by underlying primary rights that P seeks to enforce.
A common distinction is between property rights and personal rights.
According to the Primary Rights approach a single event such as an auto accident that led to two different injuries: personal and property could provide a valid basis for two different suits without invoking the effects of res judicata. So, for example, if Rush were decided according to the Primary Rights Approach, the decision would have come out differently. However, a problem with the “primary rights” analysis is that outside of the personal rights/property dichotomy, the definition of “primary rights” is unclear. Underlying harms can be grouped together in different ways. In Takahashi, P’s underlying rights are broadly defined.
Takahashi v. Board of Education CA Court of Appeals 1988
Old schoolteacher fired; although CAL uses primary rights analysis, manipulated here almost to same transaction test; looked to harm suffered and defined broadly: right to be free of breach of employment K and all harms ensuring therefrom.
3. Same claim issues related to specific areas of substantive law.
A. Courts like to avoid general definition of “claims” and prefer to focus on what is a “claim” in a specific context, so as to increase predictability.
1) Generally, an entire (single, indivisible) K supports only one c/a. (Fridenthal, Kane, Miller.) A K is entire if it consists of a single, indivisible promise to do some act.
2) If a K is several and divisible then each K that is breached may give rise to a different c/a. A K that is several is a compound of different promises that may be broken and performed individually.
i.e. series of P notes, or when a bond includes a number of interest coupons. In Jones, K was found to be entire because of the acceleration clause. If not for the acceleration clause, the K would be several. If acceleration clause is optional then K would be several.
3) Limitation: Rule of accumulated breaches. A suit for a breach of one continuing (several and divisible) K merges with all claims that arose prior to the time the action is brought. Therefore, in the Jones example, if Jones missed the May, June, July installments and Bank only seeks recovery for July installment, the decision rendered would bar or merge the May and June actions.
4) Breach of continuing K: if one party to a K commits a material breach that neither is accompanied nor followed by a repudiation, the law of Ks teaches that the other party is free, on the one hand, to treat the K as binding and sue for the damages or, on the other hand, to treat the K as ended. If the aggrieved party chooses the former option, and then suffers further material breaches, she will not be barred from suing for damages not sought in the first suit. R2J§ 26.
5) The expectations of the parties also may be decisive in determining the scope of the prior judgment. Imagine that a wholesale distributor regularly ships goods to a retailer on credit. If the parties conceive of their relationship as a series of discrete transactions, a suit by the creditor seeking to recover any one of the payments would not bar subsequent suits for other payments. If, however, the parties believe they have a single running account, a suit by the creditor would have to seek to recover the entire balance then due.
In chronic tort cases, i.e. nuisance cases, there is a single continuous wrong that results in ongoing damage. For these chronic torts, a rule analogous to the Rule of Accumulated Breaches in K law has developed. A suit for damages caused by an ongoing nuisance is treated as conclusive of all claims up to the time suit is brought. However, an earlier judgment does not preclude a subsequent action for damages that accrue later.
Permanent Damage Exception: There is an exception to this general rule concerning continuous torts. Either the P or the court may choose to treat the nuisance as “permanent” and award damages that are calculated to compensate for anticipated as well as past injury. A judgment awarding permanent damages precludes later suits based on the same nuisance.
A. There are three situations where the defensive assertion of a group of fact precludes the later assertion of those same facts in a separate affirmative suit.
1) When the effect of using the facts in the 2nd suit could nullify the 1st judgment. Majority and R2 §22
2) If jurisdiction follows Mitchell.
3) If jurisdiction has a FRCP 13-type compulsory counter claim rule.
C. Mitchell v. Federal Intermediate Credit Bank; Supreme Court of South Carolina 1932
Facts: In federal court, the Federal Intermediate Credit Bank (D) brought action to recover on the notes of Mitchell (P). Mitchell defended by contending that to obtain loans from the Bank he had sold his crops and assigned the proceeds as security for the notes. The proceeds netted $18,000 and the assigned security was only for $9,000 but P claimed he never saw any of the proceeds which went to the Bank. However, P, apart from his defense, did not counterclaim or ask for any relief. Judgment was for Mitchell in this action. Later P sued for the amount of the proceeds retained by the bank which was in excess of the notes, pleading the same set of facts he raised as a defense in the earlier suit. The trial court ruled that Ps action was barred on the theory that his affirmative claim was merged in the earlier judgment. Rule: A D may not split his cause of action against a P using part of it as a defense to the first action and saving the remainder for a separate affirmative suit. He cannot use the same defense, first as a shield and then as a sword. Thus Mitchell’s action against the Bank was barred because he had the opportunity to counterclaim or ask for relief while defending the first, suit since both the defense and Mitchell’s action arose out of the same transaction. Promotes Judicial Economy because the entire controversy of parties is resolved in one conflict. END
D. Linderman Machine v. Hillenbrand Ind. App 1920
P sued for payment on a machine. D asserted defense of fraud. D then brought suit for damages based on fraud. Damage suit not barred. Because D’s right to affirmative relief is distinct from defense. See R2J. Rule: Solely as a matter of preclusion, the defense assertion of a group of facts does not prevent D from bringing a separate affirmative suit based on those same facts.
Linderman is the MAJORITY and R2J view. Preclusion shouldn’t force D to litigate claim in forum of P’s choice.
E. Compulsory counterclaim rules supersede the rules of preclusion in many contexts and yield similar results. (even though claim not “precluded” it will be “barred.”) In fact compulsory counterclaim rules are broader because they are not limited to cases in which D relied on facts as basis for defense. Compulsory Counterclaim rule, FRCP 13(a) D must state any counter claim that D had opportunity to raise at the time of the pleading, if it arises out of the transaction or occurrence that is the subject matter of the P’s claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire adjudication.” BUT the pleader need not state the claim if 1) at time action was commenced the claim was the subject of another pending action. And there are other exceptions as well.
Many jurisdictions do not have compulsory counterclaim rule. Mitchell’s claim might be decided differently under FRCP 13(a). Could argue that loan proceeds arise out of same transaction or occurrence.
Compulsory Counterclaim rules, like FRCP 13(a), are broader than Mitchell because they force D to assert a counter claim (or else lose the right to assert the claim) even if D is NOT relying on the facts of the first suit as the basis for an affirmative defense.
Here, there is no need to deal with the definition of the claim. The only issue is whether an asserted defense precludes him from raising the claim in a subsequent suit.
HYPO: Physician sues patient to collect fee for services rendered. Default judgment entered against patient. Patient seeks recovery of fees on grounds that services are worthless (no) and seeks damages for injuries as a result of malpractice (yes). Should law of preclusion effect patient’s lawsuit.
III. Issue Preclusion or Collateral Estoppel (c/e)
A. Def: The traditional definition is that Issue Preclusion bars from re-litigation an issue that has been /8//// when the issue was essential to a valid and final judgment.
B. Goal of c/e: to ensure that only those issues that have been fully and fairly litigated will be binding in subsequent suits.
C. BEFORE GOING INTO ISSUE PRECLUSION, ASK WHY THERE IS NO CLAIM PRECLUSION.
D. Actually Litigated.
1. Re: Negative: Generally, failure of party with burden to prove existence of a fact in 1st action establishes its non-existence for the 2nd action, unless there is new evidence which could not have reasonably been presented in the first action.
HYPO Separate suits for personal and property damage in CA.
X v. Y Property damages. Judgment for Y on grounds that X did not present sufficient evidence to establish Y’s negligence.
X v Y PI
2. Issue in first suit must be identical to issue in second.
A. Cromwell Rule: c/e does not apply to a subsequent action between the same parties that is based on a different demand or issue; the prior judgment operates as an estoppel only as to matters actually litigated [between same parties.] County of Sac (D) issued bonds in 1860 to a contractor for the erection of a court house. They were to be redeemed in 68, 69, 70, and 71. However, the courthouse was never built. Cromwell (P) sued County of Sac to redeem bonds. The court held that bonds could only be redeemed if Cromwell had given value to acquire them. The trial court estopped Cromwell from proving the latter, because in a previous suit, some of Cromwell’s bonds had been declared fraudulent. The previous suit was brought by Smith, Cromwell’s agent, for the sole benefit of Cromwell. Therefore, that finding is binding on Cromwell. BUT the bonds in question in the second suit were from a different group than those litigated in the first action. The status of these bonds had not been litigated. Why claim preclusion does not operate: Each coupon presents a separate c/a. Whether he paid value for the other coupons was not relevant to whether he paid value for these coupons. Why issue preclusion does not operate: There were certain issues which were binding against Cromwell. Cromwell bound to issue that first set of bonds were fraudulently issued. BUT entitled to separate determination about THIS set of bounds which were never a subject of litigation.
HYPO: Rush facts in Cal. (primary rights jurisdiction); in 1st suit, for property damage, D denies generally, so D is not able to raise contributory negligence. Can D raise CN in second suit? Yes. Would go through claim defense preclusion analysis first. If claim preclusion does not bar D from litigating, issue preclusion would not either. Because issue has not been actually litigated.
B. Acts occurring at diff times =no identity of issue. Org. tax exempt 1 year does not mean tax exempt the next.
C. Different Burdens of Proof = different issues If the burdens of proof differ in successive cases (for example if one litigation is a criminal case and the other is civil litigation), then the issue in the second case has not been actually litigated in the first, because they are different issues. However, if there is a higher standard of proof on an issue in the first case (“beyond a reasonable doubt” in criminal cases) then a court may give preclusive effect to that issue in a later proceeding. The converse is not true. Issue preclusion cannot run from a civil case to a criminal case.
D. CE will not operate if the PARTY asserting CE did not have the BOP in first suit but has it in second. Example of a situation where this rule would apply.
E. Valid and Final Judgment: The Required Qualities of a Judgment Before it Gives Rise to CE Effect.
(1) Valid: the judgment upon which CE is to be based must be VALID and not VOID: A judgment is void when there is no PJ; SMJ; constitutionally adequate notice. Wingate told us to think about when collateral attacks would fit.
A) A court order that leaves major issues or determinations for subsequent \\
B) ==]proceedings is not final. I.e. a temporary restraining order or preliminary injunction not final (binding) b/c not determined on the merits.
C) When time for appeal has NOT run: courts are SPLIT
1/MAJORITY + FEDERAL courts treat judgment as final for claim preclusion.
2/MINORITY inc. CA: judgment is not final for purposes of claim preclusion until time to file appeal has run or all appeals have been determined.
3/R2J§13: Traditionally there is no difference between claim and issue preclusion with regard to finality of judgment. But some courts have moved away from this rule, giving c/e effect for issue preclusion when in some instances when it would not have been given for claim preclusion. Here, the emphasis is on determining whether decision upon which CE is sought was adequately deliberated and firm.
HYPO: Downey action but with separate trial for liability and damages. In First trial, TWA is found negligent. If another passenger moves for c/e based on Downey, what outcome? Is determination sufficiently final? A number of courts say that c/e if decision upon which c/e is sought is adequately deliberated and firm. Note that this is different from claim preclusion which would require both liability and judgment to have been decided.
3. Admissions in Response to Facts.
Majority: NO. Even if D admits facts in response, CE will not be invoked in a subsequent suit because it was not actually litigated. This approach encourages admission or stipulations because a party can make an admission that won’t come back and haunt him in subsequent litigation.
Minority: YES. C/E should apply unless D adequately explains why it should not. Professor Vestal asserts that should give issue preclusion affect to matters unless a party explains adequately the failure to deny allegations. A few courts have found issue preclusion in these circumstances. Vestal says approach doesn’t have any affect on encouraging admission because parties will always be focusing on the case at hand, and not thinking about effect admission will have on subsequent suits. Promotes judicial economy.
4) Default Judgments
Majority: NO. Most courts have found the effect of collateral estoppel is NOT to be given to default judgments, because issues were not litigated even though claim was.
Minority: The effect of collateral estoppel can be given to all issues alleged by P that were essential to the default judgment.
F. What is “Essential.”
1. Russell Patent case. Here, there are different c/a’s. Two different infringements, and the case alleges that the one infringement had taken place after the first judgment had been rendered. Given that P prevailed, why isn’t D precluded from raising novelty as a defense again, even though it was raised in the first suit? Because it is uncertain in first lawsuit which issues were decided. It is not clear which claims jury had relied on to find infringement. Patent may be valid as to 1 claim but invalid as to others. If there is a judgment based on a general verdict, and the judgment represents a determination of any of several issues, then that judgment is not entitled to collateral estoppel effect, because we do not know that that issue was “essential” to the verdict.” To avoid problem:
A) Rule 52: Bench trial judge could enter a finding of facts and conclusions of law to indicate what issues formed the opinion.
B) Rule 49: Use a special verdict form whereby jury answers specific Qs about findings
C) Rule 49: Use a general verdict form with interrogatories. (jury is asked Qs then enters verdict for one party or another.)
D) Using extrinsic evidence to determine what was ‘actually litigated.” A transcript of the trial may show that claims pleaded were not actually litigated. For example, a trial transcript shows that evidence was introduced only regarding one issue and not the other, which may provide sufficient assurance that this issue was the basis of the verdict.
Why do we require that finding be “essential to a judgment? 1) b/c otherwise we don’t know that judgment of issue was correct and 2) Losing party not in a position to appeal.
3. Rios v. Davis The jurisdiction of the case is one of contributory negligence, where the P’s recovery is barred if P’s own negligence is also proximate cause of the injury. CAVEAT: this is Texas, where 3d party claim proceeds essentially independently of original claim. Usually a third party claim would be that of indemnity or contribution. As a result of an auto accident, Poplar Dry Goods Co. brought suit against Davis. Davis answered that Rios was contributorily negligent. Davis also joined Rios as a third party D and sought to recover from Rios damages to his car. Here the court held that all were negligent. Judgment for Davis and third party. Thus, court denied Poplar any recovery against Davis. It also denied Davis any recovery against Rios. In a subsequent suit, Rios brought an action against Davis for injuries allegedly sustained as a result of the same an auto accident. Davis pleaded contributory negligence. Davis also contends that res judicata and collateral estoppel should bar his suit because they were all found guilty in the first suit, making Rios contributorily negligent. Regarding c/e, Rios contends that collateral estoppel cannot be applied b/c the findings on the issues regarding Rio’s negligence and liability were immaterial because judgment was entered in Rios’ favor. The sole basis for judgment between Rios and Davis was Davis’ contributory negligence. The finding that Rios was negligent was not essential or material to judgment. Further Rio’s could not appeal (he won.) And therefore the judgment was not based upon it. Rule: A finding of fact by a court which does not become the basis of judgment rendered is not entitled to c/e effect.
In Russell, there was no issue preclusion because the jury gave a general verdict. In Rios, even though the jury gave a special verdict, certain issues were not given preclusive effect because the outcome did not depend upon those findings. HOWEVER multiple findings have been found preclusive when the jury could NOT have arrived at the same judgment without each of those findings.
Suppose Davis had not cross-claimed against Rios, merely impleading the latter on a contingent claim for contribution; that Poplar had then made a claim against Rios; that at trial Davis and Rios each had argued the other was solely negligent; and that the jury had found for Popular against both of them. In a subsequent suit by Rios against Davis, would the earlier finding that each had been negligent estop Rios from denying negligence? Book them gives examples of where on court held yes; another held no.
Generally, a judgment does not act as a collateral estoppel between co-parties unless they are adversaries, and they are considered adversaries ONLY if there is a claim for relief by one co-party against the other. The fact that their interests clash and that they are on opposite sides of every issue does not necessarily make them adversaries for this purpose.
4. Rios should be compared with Home Owners Fed Sav. And Loan Assn v. Northwestern Fire and Marine Insurance in which the majority opinion states, in what may well be the dictum that “certain findings not strictly essential to the final judgment in the prior action may be relied upon if it is clear that the issues underlying them were treated as an essential element to the prior case by the court and the party to be bound.
5. HYPO: A v. B. for injuries in auto accident. B denies negligence. B also counters that A was contributorily negligent. Jury returns a special verdict saying that B is not guilty of negligence. AND A is guilty of contributory negligence. Here there are alternative or independent grounds for judgment. Either would have been enough. SPLIT: most jurisdictions give both findings preclusive effect. (1st restmt). This situation is not like Rios in that A could appeal. 2nd Rstmt gives neither collateral estoppel effect unless both are affirmed on appeal. Reasons: alternate grounds. Jury might no consider as carefully; A might lack incentive to appeal.
IV PURE ISSUES OF LAW
A. Issue occurs when claims present historically distinct issues though analytically identical.
B. In jurisdictions that follow Moser and Sunnen, a Court will not give c/e effect to pure issues of law,
1) in order to foster development of the law, and discourage inequities among litigants.
2) and discourage inequities among litigants.
C. R2J and other courts have rejected the pure/mixed distinction, and give c/e effect to even pure issues of law as long as:
1) The issues are not substantially unrelated
2) New determination of issue is not need to take account of intervening change in legal climate
3) C/e will not lead to inequitable administration of the laws. (See Stauffer)
Clearly tax context is urgent. Need to treat similar taxpayers alike.
V. Who can Use C/E?
New term: mutuality of estoppel. Mutuality of estoppel prevents a non-party to the first lawsuit from asserting collateral estoppel, in a subsequent litigation, on an issue against a party to the first lawsuit. It would be unfair to allow some to use a judgment when they would not have been bound by that judgment.
Erosion of Mutality Requirement: Summary of Mutuality Requirements Now
Defensive use of CE without Mutuality
Federal courts allow use of CE without mutuality (Blondertongue)
Minority of state courts allow (CA/Bernhard)
Offensive use of CE without Mutuality
Federal courts assess non-mutual offensive CE on a case by case basis based on Parklane analysis.
Some state courts allow.
Ralph Wolff & Sons v. New Zealand Insurance Co.
Ky Ct App (1933)
Facts: Ralph Wolff & Sons (P) suffered the partial loss by fire of their candy factory. They had 12 insurance policies on the property for a total sum of $19,500. In one action they consolidated suits against nine of their insurers on nine policies for a sum of $14,500. The jury returned a verdict for $2,500. Since the insurance involved in the consolidated action was $14,500/19,500 of the whole coverage, judgment was rendered for that fractional part of the total loss fixed by the jury, that is, for $1,858.90. P then sued in a later action, two other insurers for $1,000. These insurers claimed that by reason of the first jury’s determination, P was estopped to claim a greater damage than $2,500; if liable at all these insurer’s liability was only for the proportional part, or 1,000/19,500, that is 128.20.
Rule: Only parties bound by the first suit may assert collateral estoppel. Here we know that D not bound b/c they didn’t have the opportunity to be heard. (i.e. not in privity with.)
Analysis: Even though the persons are interested in the same question or in proving the same facts, they do not control each others actions and are thus not the same parties. There was a stipulation in the respective Ks of insurance that the company would be liable only for its proportionate share of any loss sustained if other insurance Ks should be made. Nonetheless, there was no K or privity of K among the insurers. It is doubtful if this would have been claimed had the loss been fixed by the former judgment at what the companies regarded as excessive. For the P to be bound, the insurers must also have been bound, for an estoppel is always mutual.
City of Anderson v. Fleming
Facts: P suffered personal injuries by stepping into an excavation in the street. She sued contractor responsible for the excavation, but the judgment went against her. Then she sued the city for the same injuries. The court said that P was estopped from suing city because in the normal sequence of events, the city would get indemnity from the contractor. But here the city cannot do so because, contractor has already received a favorable judgment on the merits with regard to P’s injuries. Cities liability is based on liability of Ktor. If Ktor not liable then City not. If didn’t let city assert c/e then would deprive city’s rights to indemnity. Rule: P is estopped from suing indemnitee if P has already sued and lost against indemnitor b/c don’t want indemnitee to lose right of subrogation. END
Fleming illustrates the traditional indemnity circle exception to mutuality. Here, the Indiana court removed the mutuality requirement to prevent the D from having to pay damages for personal injuries and then risk losing its suit against the government for indemnification.
HYPO: Same facts as Anderson, except P sues City first and lost b/c jury found Ktor not negligent. Issue: Can Ktor use c/e in 2nd suit? If c/e were denied would there be the same anomalous results? (1) City would not lose right to subrogation b/c already found not liable, so would not have to pay. (2) Ktor would not lose benefit of victory b/c he was not involved in first suit. (3) HOWEVER, most courts still allow a party whose liability is primary to rely on a secondary party’s victory.
Abandonment of Mutuality Requirement:
Defensive CE Without Mutuality
Bernhard v. Bank of America National Trust and Savings Assoc. Cal. Sup. 1942
Administrator (P) of Bernhard’s estate lost in an earlier probate action to recover funds drawn from bank account by friend of Bernhard, and failing to prevail against the friend, later sued the bank, D, who sought to invoke CE to prove, as a defense, that the withdrawals were undertaken with Bernhard’s permission.
Rule: In California and a minority of jurisdictions, a judgment in the first action may be asserted as a defense in a later action by one who was neither in privity with a party nor a party in the first suit, so long as the party against whom the judgment is raised was a party or privity with a party in the first suit.
Analysis: The requirements of due process of law forbid the assertion of a plea of res judicata against a party unless SHE was bound by an earlier litigation in which the matter was decided. However, “there is no compelling reason that the party asserting the plea of res judicata must have been a party or in privity with a party to the earlier litigation. Many courts have abandoned the requirement of mutuality and confined the requirement of privity to the party against whom the plea of res judicata is asserted. The courts of most jurisdictions have in effect accomplished the same result by recognizing a broad exception to the requirements of mutuality and privity, namely kinds of derivative liability such as master and servant, principal and agent, and indemnitor and indemnitee.
Here, Bank was not a party to the first lawsuit or in privity with a party from the first lawsuit.
Blonder-Tongue Laboratories Inc. v. University of Illinois Foundation 402 US 313
Blonder-Tongue was the case in which the Supreme Court first began to erode the mutuality requirement of the federal system. Substantial costs in time and expense to the judicial system and D do not warrant P’s re-litigation of an issue which has been fully and fairly litigated by another party.
Offensive CE Without Mutuality
Fact pattern: a new P asserts CE against a party who was a D in the prior suit and lost.
(1) Encourages P to sit on the sidelines and adopt a “wait and see” attitude. If P one is successful, then P could assert CE in the second action. If unsuccessful, P could claim due process rights to re-litigate issues anew.
(2) Undermines judicial economy since there is no incentive to join 1st suit.
The Supreme Court ultimately abandoned the doctrine of mutuality and allows a non-party to the first suit to offensively assert c/e. The Supreme Court requires that the court in the 2nd action determine whether the D will be unfairly prejudiced by the non-party P’s offensive use of a prior P’s favorable judgment against D. Considerations include:
(1) Foreseeability of subsequent lawsuit. Could the D, at the time of the 1st lawsuit, have foreseen the subsequent litigation so that the D would have fully and aggressively litigated the issue for which the non-party P asserts offensive c/e.
a. if gov’t action, P might not have been able to join.
b. If lawsuit was a small claim + future suits were not foreseeable, then D may have little incentive to defend vigorously.
(2) Sideline Sitters. Could P have easily joined the first lawsuit? If the P could have but chose not to (i.e. chose to sit on the sidelines and await a favorable P outcome) then the 2nd court may not apply c/e to give the sideline sitter the benefit of the favorable outcome.
(3) Aberrational 1st judgment: Was the judgment in the first action typical or consistent with judgments on similar issues or so aberrational as to preclude re-litigation by a D.
Professor Currie’s HYPO: train accident injures 50 passengers. Each passengers files a separate negligence action against railroad. The rr prevails in the first 25 suits. It loses the 26th. Fair to allow others to assert c/e of 26th judgment. Though on the other hand, no reason why the “aberrant” result might not have been reached in first trial rather than in 26th.
(4) Are there any procedural opportunities available in 2nd action that were not available in the first such that a different result might be reached in the 2nd suit if the D were not offensively precluded by the 1st judgment.
(a) did D have greater discovery oppty
(b) are witnesses available that weren’t in 2nd suit?
(5) Application of offensive c/e does not violate a litigant’s 7th amendment right to a jury trial when a 2nd legal action follows a first equitable action.
The Supreme Court in Parklane: District Courts have discretion to decide on a case by case basis whether c/e can be used offensively without mutuality according to above analysis. Other considerations mentioned in notes after Parklane:
(1) Sympathy factor: was decision affected by relations among parties not present in 2nd action?
(a) in 1st suit, P is old widow, 2nd Suit, P is an insurance co.
(2) Compromise Verdicts: not sufficiently reliable to give CE effect. Uncontradicted and unbiased evidence, yet P does not get all he dues for: only explanation is a CV. Do not want D to appeal b/c of likelihood that J will be given CE effect. A compromise verdict is reached when jurors concede some issues so they can settle other issues in their favor.
(3) Co Parties (Schwartz) Traditionally, CE did not operate between co-parties in 1st suit unless they were formal adversaries. I.e. one asserted claim against another. Now trend is that its enough if they re actual adversaries, even if not formal. 1252.
Wingate Hypo: Chuck v. Gail; Chuck says Gail attacks and beat him. Chuck shows that he beyond a doubt that he incurred 25,000 in medical expenses and suffered 25,000 in lost wages; and on top of that there were damages for pain and suffering. Gail’s only defends is that Chuck has misidentified her. She seeks to establish she was out of town at time of attack. Jury finds for Chuck for 10,000. Later, Chuck’s friend Phil makes public statements that Gail is a big criminal. Gail sues Check for defamation. Should Phil be able to use Chuck’s verdict against Gail. Maybe not: would be unfair to Gail: G vs. C was compromise verdict. Explain why it would be compromise. (if evidence support G’s defense, then G wouldn’t be liable at all. OOH if jury supports C, she would be liable for more than 10,000.
FAIRNESS (E.G. PARKLANE) ANALYSIS MUST BE USED ANYTIME C/E IS USED SHOWING THAT THE PARTY AGAINST WHOM C/E IS BEING ASSERTED HAD THE OPPORTUNITY TO LITIGATE ISSUE FULLY AND FAIRLY A ND THE OPPORUNTIY AND INCENTIVE TO LITIGATE AGRESSIVELY. (IN C/E ALL ROADS LEAD TO PARKLAND ANALYSIS.)
In Re Multidistrict Civil Actions Involving the Air Crash Disaster Near Dayton Oh on March 9, 1967
Facts: A midair collision between a Trans World Airlines (D) jetliner and a small aircraft owned by Tann Co. (D) left no survivors. Various wrongful death suits were filed in numerous district courts, and were consolidated in the Southern District Court of OH. TWA and Tann were the principal defendants. The first case to go to trial, in which P’s case was handled by an experienced aviation attorney resulted in a judgment for Tann. Tann then moved for summary judgment on remaining cases, contending that collateral estoppel could be used to preclude further litigation on the issue of negligence. P’s opposed the motion.
Rule: Due process requires that c/e not be used against someone who has not had the opportunity to litigate.
Analysis: Traditionally, one of the requirements of c/e was that the p arty against whom it is asserted must have been a party to the first action. This requirement was grounded on due process considerations. A party who was a stranger to the prior litigation would be denied his day in court.. However, the TRIAL COURT found that this is not always true. In Dayton the trial court held that it is highly unlikely the next P would reach a more favorable result because :
1) the various cases had been consolidated,
2) discovery had been coordinated, and all counsel had participated therein.
3) The first trial presented a full litigation of the issue of Tann’s liability, and
4) P counsel was recognized as expert in the field
5) Decedent in first case was very sympathetic to jury (wife w/ child.)
Based on these considerations, the TRIAL COURT found due process will not be offended if c/e is allowed. THE 6TH CIRCUIT DISTRICT COURT reversed a decision.
1) There is substantive value to the procedural right to litigate on own behalf.
a. Furthers fundamental fairness and dignity in the judicial process
2) Allows P to choose own counsel instead of having another’s effectively appointed as his/her own.
3) Due Process: Fundamentally unfair to bind party before they’ve had their day in court.
Exceptions: When non-parties are bound
1) Binding those in “privity”
(a) What is “privity”
(1) Some courts: Privity is any relationship which justifies the application of preclusion to one not a party to the previous suit. (This is conclusory.)
(2) Other Courts: Privity is a concurrent or successive relationship to the same property rights.
(3) Bernhard: Privity is one who after rendition of a judgment, has acquired an interest in the subject matter affected by the judgment through or under one of the parties by inheritance, succession, or purchase. Note all courts likely to find a non-party bound under this definition.
(4) Fiduciary relationship between beneficiary and fiduciary
(5) Absent class member in class action if member’s interests have been represented by class rep.
(6) Persons that control the litigation in which they have a direct interest.
(eg) those that have the power to make decisions regarding the handling of litigation such as legal theories, evidence, appeals, etc.
Payment of attorney fees and costs indicate “control” See Montana
(1) State to State Preclusion
1. Article IV §1: Each state must accord the judgments of sister state full faith and credit;
“FFC shall be given in each State to the public acts, Records and Judicial proceedings of every other state.”
2. 28 U.S.C. 1738, the statue which implements FFC clause of constitution, is interpreted to require a state court to give a sister state’s judgment at least the same CE effect as would that rendering sister state.
3. Can a state court give more preclusive effect than rendering state?
a. Most crts say NO. The same preclusive effect must be given.
Marrese. Supreme Court 1985 supports the majority view that the same preclusive effect should be given and no greater.
WHY: The comity concerns reflected in ffc doctrine, usually allow states to determine the preclusive effect that their own state judgments should be given. Therefore, federal courts cannot give greater claim preclusive effect to state court judgment than the rendering court. By analogy: Courts cannot give greater issue preclusive effect to a J than the rendering state court would have given it.
4. General rule: Whenever there is a Q of claim/issue preclusive effect between states, the analysis begins with the rendering state’s laws, which will generally control.
1. Hart v. American Airlines. Supreme Court of NY 1969; MINORITY
Facts: The actions arise out of a plane crash that took place in Kentucky. Most of the passengers died. Actions were brought in many states. The first case to be tried to conclusion was Creasy which was brought in the district court of Texas. The case resulted in judgment for plaintiff and against American Airlines. The judgment was affirmed on appeal. P’s in this NY case want to assert c/e
Rule: Hart deals with the question of whether a state can given greater preclusive effect than the rendering state would have given. Remember that some states require mutuality for application of preclusive doctrine, while other states have abandoned the mutuality requirements. State courts disagree about whether they must given the same preclusive effect to a judgment as would that state that rendered the judgment or whether they are free to apply their own preclusion rules. Here, the NY court gives non-mutual preclusive effect in circumstances in which the Texas court would not have done so.
Analysis: D argues c/e should not be applied b/c of ffc. To this the court responds that the court is not deciding the issue of whether the Texas judgment should be enforced. Rather it is determining the fact according to the premise that one who has had his day in court shall not be permitted to litigate the issue anew.
D also argues that jury did not know that its verdict would be applied to all of the passengers in the crash. Court counters with the fact it is unlikely that D would get a more favorable result in NY: that the issue was presented to the jury under the substantive law of Kentucky which is less favorable to the D than is NY law.
The area of matrimonial and custodial law presents special problems for the application of preclusion. The anomaly traces to the fact that custody orders characteristically are subject to modification as required by the best interests of the child. Thompson v. Thompson raises the peculiar issue of inter-state preclusion when each state retains jurisdiction over a dispute. In the context of custody disputes, a court can always reopen proceedings if it is in the best interests of the child.
Thompson v Thompson; Su Court of US 1988
Facts: CA court initially awarded joint custody of son to both P (mother) and D (father). That arrangement became unfeasible when respondent decided to move from CA to LA to take a job. The CA court then entered an order providing that P would have sole custody of son once she left for LA. In LA P filed petition in LA state court for enforcement of the CA custody decree, judgment of custody, and modification of visitation rights. Petition granted. However, two months later, CA court, having received and reviewed its investigator’s report, entered an order awarding sole custody of Matthew to D. D brought this action in District Court for Central District of CA requesting an order declaring the LA decree invalid and the new CA decree valid. District court granted P’s motion to dismiss the complaint for lack of subject-matter and personal jurisdiction. Supreme Court affirms.
Issue: Does the Parental Kidnapping Prevention Act of 1980, 28 usc 1738 furnish an implied c/a in federal court to determine which of two conflicting state custody decisions is valid.
Rule: The Parental Kidnapping Prevention Act does not provide an implied c/a in federal court to determine which of two conflicting state custody decisions is valid.
Analysis: The anomaly of custody disputes traces to the fact that custody orders characteristically are subject to modification as required by the best interests of the child. As a consequences, some courts doubted whether custody orders were sufficiently final to trigger ffc requirements. Even if custody orders were subject to full faith and credit requirements, the ffc clauses obliges states only to accord the same force to judgments as would be accorded by the courts of the State in which the judgment was entered. Because courts entering custody orders generally retain the power to modify them, courts in other States were no less entitled to change the terms of custody according to their own views of the child’s best interests. For these reasons, a parent who lost a custody battle in one State had an incentive to kidnap the child and move to another State to relitigate the issue. In response, a number of States joined in an effort to avoid these jurisdictional conflicts by adopting the Uniform Child Custody Jurisdiction Act prescribing uniform standards for deciding which State could make a custody determination and obligated enacting states to enforce the determination made by the State with proper jurisdiction. The context of the PKPA suggests that the principal problem Congress was seeking to remedy was the inapplicability of full faith and credit requirements to custody determinations. B/c Congress’ chief aim in enacting the PKPA was to extend the requirements of FFC to custody determinations, the act is construed to furnish a rule of decision for courts to use in adjudicating custody disputes and not to create an entirely new c/a.
A judgment may be given preclusive affect per ffc even though the judgment would not be enforceable in the state where the 2nd suit is being litigated. Parker v. Hoefer
2. Federal courts must treat state court Judgments with the same respect that those judgments would be given in the rendering state.
a. USC §1738 says records and judicial proceedings of any court of any state “shall have ffc in every court in the U.S.”
b. There is no constitutional basis for ffc here. The basis is solely statutory and thus can be supervened by other federal statutes that provide an exception (implied or express) to §1738. See McCurry.
3. Allen v. McCurry (§1983 suit)
Facts: D convicted of a crime in state court after motion to suppress evidence b./c of alleged illegal search and seizure was denied. D brings §1983 claim against police officers for damages, claiming that search was unconstitutional. §1983 “Ku Klux Klan Act” was passed after civil war to prevent injustice in southern states. Concerned that KKK controlled courts and was infringing on civil rights under color of office.
Issue: Can police and the City use CE to preclude D from litigating the constitutionality of the search?
Rule: Federal courts will give preclusive effect to state court determinations of alleged constitutional violations in subsequent federal civil rights actions as long as litigant has a full and fair opportunity to litigate the issue in the prior proceeding.
Analysis: Nothing in the language of §1983 suggests that it is an exception to §1738. Congress intended sec. 1983 to provide for a remedy in three situations: when state substantive law is facially unconstitutional; where procedural law is adequate legally inadequate or in practice to allow for full litigation of a constitutional claim. If party seeking to resist preclusion shows that they did not get full and fair opportunity to litigate the issue, then preclusion would not apply anyway.
Dissent: assertion relies on reason the statute was passed, arguing that it is senseless to believe that a Congress concerned about injustice caused by state court decisions would have intended to give such state court judgments preclusive effect.
Rebuttal to dissent is that an unfairness analysis is already built in to c/e analysis. If it is unfair to P or D to give c/e effect to state court decisions, then c/e is not likely to be given effect.
The logic of Allen was soon extended by the Supreme Court. In Migra v. Warren City School District, the Court found that a prior state-court adjudication precluded the P from bringing a subsequent suit in federal court even though the later proceeding was based on constitutional issues that the P failed to raise, but could have raised in the earlier state action.
Rationale: §1983 does not override state preclusion law and guarantee petitioner a right to proceed to judgment in state court on her state claims and then turn to federal court for adjudication of her federal claims.
Exclusive Federal Court Jurisdiction: the Marrese test. In construing statutory full faith and credit, federal courts must apply a tw+o part test to determine whether to give preclusive effect to a state court determination in a subsequent lawsuit over which federal courts have exclusive jurisdiction.
1) apply state preclusion law. The federal court must first determine whether state claim preclusion law would preclude the federal lawsuit. If the state would not bar the federal lawsuit, then there is no preclusion.
a. in most cases Marrese will prevent preclusion b/c most all states follow the prior judicial competency rule which prohibits preclusion of a claim beyond the court’s jurisdiction. Since state courts cannot hear cases when the federal court’s jurisdiction is exclusive, the prior jurisdictional competency rule would prevent a state from precluding such cases.
2) If the state would not bar the federal lawsuit, then the court must ascertain whether the relevant federal law contains an explicit or implicit exception to 28 usc §1738
(1) Language of §1783 does not require state to give ffc/preclusive effect to federal judgments.
(2) Supreme Court has consistently found that state court much give such claim and issue preclusive effects to federal judgments.
(3) One reason why is federal c/l. Without allowing it here, state courts would ignore federal judgments and Article III which allocates federal judicial power would be empty.
(4) It is clear that FCL determines federal claim preclusion effect in federal Q cases (Parklane)
(5) What law determines preclusion effect in federal diversity cases?
Prof Degnan, Wingate; R2K§87 Majority: Fcl controls.
a. Erie does not apply here at all.
b. Rule governing preclusive effects of Js are extremely important to a judicial system. The federal court system should be able to develop own rules of preclusion for own judgments.
c. Inappropriate for another sovereign to determine the binding effect of federal judgments.
d. Would be strange to allow a state to nullify judgment of federal court.
Prof Burbank: State Law controls
a. Preclusion is substantive so Erie applies.
b. A federal court sitting in diversity is but another state court and preclusive effects are part of the substantive rights to be adjudicated in that forum.
NOTICE AND SMJ
(1) Joinder of claims by Ps
FRCP 18 itself does not impose any limitation on P’s ability to join as many claims as he has against a D. But 18 must be interpreted in conjunction with FRCP 82.
FRCP 82: These rules shall not be construed to extend or limit the jurisdiction of the US district courts or the venues of action therein. (if no SMJ, claim must be dismissed.)
Separate Trials: a court may sever any claim into separate trials in order to:
1. further judicial economy
3. to avoid jury confusion from the different rules of law, different testimony and different measure of damages*
4. Prejudice of one claim by another. Jury might be biased in assessing negligence claim b/c of evidence of malicious prosecution*
FRCP 42(b). See also Sporn*. Separate trials but still same “case,” same judgment, same judge, can coordinate discovery. Applies to joinders by Ps and Ds.
Analysis: Is joinder allowed?
(1) Do the FRCP allow claim to be asserted.
(2) Pursuant to FRCP82, does the court have SMJ based on 1331, 1332, 1367?
Joinder of Claims by Ds (and Maybe sometimes P’s in a Counter Claim)
Joinder of Claims by D’s covers two types:
A counter claim is a claim against an adversary pleader. (D’s may assert a counter claim in response to a P’s complaint.) A cross claim is a claim against a co-party.
If the cc arises out of the same t/o then it is compulsory. If the cc merely involves the same sm as the opposing parties claim, then the cc is permissive. How do we know whether the cc arises out of the same t/o? Various tests are used:
1. Test most frequently used: logical relations test: Would separate trials of the respective claims lead to a substantial duplication of time and effort?
a. In Heyward Robinson, the Court said, “yes.” 2 K’s involved same parties, made reference to each other and concerned same project. Also, P had right to terminate both K’s in the event of breach of either.
b. In Great Lakes, the court also said, “yes.” Here P sued D for unfair competition. D counterclaimed for monopoly of interstate commerce and that P filed claim to harass D. A determination that P’s claims are harassing will require an airing of law and fact related to P’s claim.
c. Logical relations test is criticized for being too broad and uncertain.
2. Would res judicata bar a subsequent suit on the D’s claim absent cc rule? Go into whole res judicata analysis?
3. Are issues of fact and law largely the same?
4. Is the claim and the cc substantially based on the same evidence?
If the CC is permissive, then there must be an independent basis of jurisdiction. To see whether there is, look at 1331, 1332, and 1367.
Qualities of CC’s
1. If CC is compulsory, then there is automatically supplemental jurisdiction. Supplemental jurisdiction was found in Gibbs b/c the facts related to “a common nucleus of operative fact.” The same t/o and occurrence requirement of compulsory counterclaims is narrower than Gibbs. Therefore, under Gibbs, there will be supplemental jurisdiction for compulsory counterclaims. 1367(a) codifies Gibbs.
A. BUT does 1367(b) eliminate automatic ancillary jurisdiction of a P’s compulsory cc? Many say no: that 1367 was not intended to modify existing c/l on subject which provided for automatic jurisdictions for ccs by P’s. Also many argue that in this case, P’s are acting in capacity of D’s and so 1367 does not apply here.
2. Compulsory CCs may not be reasserted in a subsequent suit. They are barred by:
A. res judicata
B. waiver and estoppel: culpable conduct in failing to assert a claim that should have been asserted therefore litigant waived right to claim.
C. 13(a) implicitly bars unasserted compulsory CC’s.
1) but under 13(a) pleader need not assert cc if cc is subject matter of another suit which was commenced before this one.
2) But under 13(a) pleader need not assert cc if it requires the presence of third parties over whom the court cannot acquire jurisdiction.
If there is no independent basis for jurisdiction, then D will want cc to be compulsory.
If D wants to bring cc later in a subsequent suit (like maybe in a state court that might be more sympathetic) then D will want cc to be permissive.
Hypo: A v. B. If A elects not to assert a CC against B, can A later assert CC against B in a later suit? No 13(a) precludes subsequent litigation of the CC. 13(a) requires a party to state in pleadings any CC against opposing party arising out of the same transaction or occurrence. Doesn’t exclude P’s.
Intersystem Sanction of 13(a)
1. Does Rule 13(a) itself extend the RJ effect of compulsory counterclaims from federal to state courts.
Although federal courts may prevent litigation of a previously unasserted counterclaim, it is less likely that the federal courts have any power to enjoin a subsequent state action if a person seeks to assert a claim not previously asserted as a compulsory counterclaim in a federal action.
2. Wingate + other courts believe that there is a FCL rule stating that one of the preclusive effects of a federal court judgment is to include any claims precluded under a compulsory CC rule.
B. Cross Claims.
Xclaim may be asserted if it:
1. arises out of same t/o as original claim
2. arises out of same t/o as counterclaim therein
3. relates to same property that is sm of original claim
FRCP 13(h): Joinder of Additional Parties:
Persons other than those made parties to the original action may be parties to the CC or X-claim in accordance with the provisions of Rules 19 and 20.
Same logical relations tests as for cc.
All Xclaims are permissive b/c:
1. don’t want to force D’s to adjudicate in forum of P’s choice
2. could unnecessarily complicate litigation
3. balances with cc rule regarding tension between between P’s ability to control own forum and judicial economy
1. D Xclaims
Xclaim by D against co-D has supplemental jurisdiction under 1367.
In LASA, the court said yes: same t/o.
1. Subcontractor situation City of Memphis makes contract with Southern Builders
2. Chain of subcontractors: Southern BuildersAlexander MarbleLasa (marble supplier)
3. Lasa v. City of Memphis, Southern Builders, Alexander Marble for payment.
4. Alexander filed xclaim against Southern Builders and City.
5. Court said same t/o even though different Ks involved b/c
a. all contentions arise out of the same issue of marble installation in a single construction project.
b. If it is likely that case would become complicated or confusing, then judge has discretion under 42(b) to order separate trials.
Can a P assert a Xclaim against another P?
1. P may only assert P when she is in a defensive position. Unless so limited, P xclaims would have the effect of extending the jurisdiction of the federal courts. Danner interpreting 13(g)
a. Danner read broadly: no P xclaims unless D asserts cc, thus putting P in a defensive position so she can be categorized as a D.
2. P xclaims NOT permitted in diversity suit if destroys diversity. 1367 and Danner read narrowly.
When no cc and P xclaims do not destroy diversity either b/c 1) in federal court under federal ? jurisdiction; or because all parties are diverse then SPLIT:
1. Those courts who read Danner broadly, would not allow b/c P not in defensive position.
2. Those courts who read Danner narrowly would not find xclaims a problem as long as they do not extend jurisdiction.
P in defensive position may always assert xclaims under 1367 and Danner.
Hypo: A (CA driver) and B (CA passenger) v C (NV driver). A sues C in Federal Court, and then B wants to sue A.
(1) reading of 13(g) per Danner does not permit b/c B not in defensive position.
(2) §1367(b): does not permit. Offends diversity. No P can be from same state as any D (Strawbridge.)
C. 4ies in Interest Requirement
FRCP 17: Real Party in Interest
17(a): Every action shall be prosecuted in the name of the real party in interest.
Reasonable time must be allowed for substitution, joinder, ratification if RPI is not named as a P. Trustee etc. may sue in name of other without joining person benefiting from action. Note: If this is done, would be the same effect as if the action commenced in the name of the RPI. It makes clear that the substitution/joinder is given retroactive effect for S/L purposes (SOL does not start until RPI is named.)
Requirements: The named P must possess the right sought to be enforced.
Objective: The Rule protects D from subsequent action by the party actually entitled to sue. I.e. the D can insist on a P who will provide RJ protection of the suit proceed to judgment.
Alternative Grounds: D can also use 12(b)(6) motion: Failure to state a claim upon which relief can be granted. So abolition of Rule 17 could still lead to same results.
Ellis Canning Co. v. International Harvester Co
Supreme Court of Kansas, 1953
Facts: Ellis (P) alleged that while servicing its tractor, International (D) negligently started a fire, thereby causing damage in the amount of $479.79. Ellis (P) was insured against the loss and was paid the full amount of its loss by its insurer. Ellis (P) commenced this action to recover the amount in its own name but for the benefit of the insurer. International (D) argued that since Ellis (P) is seeking to recover the amount paid by its insurer as full compensation for the damage to the tractor, the insurance company is the real party in interest, and Ellis (P) has no legal right to maintain this action.
Rule: An insured who has been fully paid for his loss is not the real party in interest and, hence cannot maintain an action to recover the amount of such loss for the use and benefit of the insurer.
Analysis: Why does Insurance Company want P to bring suit? 1) jury sympathy, 2) defeat diversity; larger settlements in state court. How insurance company can bypass rule: 1) Have V bring the lawsuit before payments are made; 2) IC could make a conditional loan, payable if V goes to trial for IC.
Joinder of Parties
A. Permissive Joinder of Parties.
FRCP 20: Permissive Joinder of Parties: Parties may be joined if
1) their interests are joint, several, or in the alternative; AND:
1) Their interests arise out of the same TRANSACTION OR OCCURANCE as that of other P’s or D’s AND
2) A COMMON QUESTION OF LAW OR FACT EXISTS between the parties actions.
Note: All the parties need not be interested in each of the joint claims. If 2 Ps assert at least 1 claim that fulfills requirements of Rule 20, then 1 P can raise an additional claim not related to same T/O.
STATE Ryder v. Jefferson Hotel; Minority Decision. SC Supreme Court 1922.
Facts: While guests at the Jefferson Hotel (D), the Ryders (P) were roused from sleep by an employee of the hotel, Mr. Bickley. Bickley insulted Edith Ryder (P) and she and her husband were forced to leave hotel. They filed suit against the Hotel (D) for injuries to their reputations, credit card business, and for loss of custom gains and profits to Charles Ryder (P). Both allege a c/a for breach of duty growing out of an innkeeper-guest relationship. Damages asked for were $10,000. Jefferson Hotel (D) demurred to the complain on the grounds that there was a misjoinder of c/a’s as between the separate injuries of the husband and wife.
Rule: Where two or more people suffer a tortious act arising from the same t/o, each person’s c/a must be severed and tried separately if the torts are of a personal nature.
Claims must be joint to join 2 c/a’s. Joint claims are defined by each party having a legal interest in damages recovered by the other.
STATE Tanbro Fabrics Corp v. Beaunit Mills Inc.
Facts: three actions. The first was brought by the seller Beaunit (D) against the buyer, Tanbro (P), to recover the purchase price of goods sold and delivered. Tanbro (P) counterclaimed for breach of warranty, claiming improper manufacture resulted in “yarn slippage.” But Beaunit (D) denied improper manufacture. The second involved Tanbro (P) against the processor, Amity (D), for replevin of goods still in Amity possession. Amity (D) counterclaims that the goods were subject to an artisan'’ lien, and sued for charges. Amity (D) also claimed the “yarn slippage” was caused by Beaunit’s (D) improper handling while Beaunit (D) claimed it resulted from Amity’s (D) improper manufacture. The third and present actioni was brought by Tanbro (P) against Amity (D) and Beaunit (D), claiming that one of the two caused the “yarn slippage.” Tanbro (P) moved to consolidate the three actions. Beaunit (D) and Amity (D) made cross-motions to dismiss the complaint on grounds that each had a separate and independent K with Tanbro (P) and therefore this destroyed the common question of law and fact arising out of a common transaction.
Rule: Even though there are separate relationships, Ks, or duties existing between parties in a multiple action, modernly a P, to consolidate his claims need only show: 1) prima facie that one of the D’s caused the injury; 2) the D’s alternative liability arose from a common transaction; and 3) that there exist questions of law and fact common to all parties.
B. Compulsory Joinder
FRCP 19: Compulsory Joinder
Model of Analysis
(1) Should the Court order the joinder of the absent parties if feasible?
(2) If it should, but can’t (i.e. no PJ), should the Court proceed with the lawsuit in their absence or dismiss.
Note: a dismissal means that the absentees are indispensable parties.
Necessary Parties: Those who have an interest in the controversy and normally should be made parties so that the court can do complete justice and have judicial economy. But their interests are separable from those of the parties in the case so the court can proceed without them.
Indispensable Parties: Those who have interest of such a nature that a final decree cannot be made without affecting their interests or leaving the controversy in such a condition that its final determination may be wholly inconsistent with equity and good conscience.
Bank of California v. Superior Court CA 1940
Facts: Boyd died intestate, leaving an estate valued at $225,000. Her will was admitted to probate and Bank of CA (D) was appointed executor. The will left legacies and bequests amounting to $60,000 to a large number of legatees, many of whom live outside the state and country. St. Luke’s (D) received the bulk of the estate as residuary legatee. Smedley (P) brought an action to enforce an alleged K in which Boyd agreed to leave Smedley (P) the entire estate. The complaint named Bank of California (D) and St Luke’s (D) as D’s. It prayed that Smedley (P) be adjudged owner of the entire estate. No other legatees were made D’s or served. None appeared. Bank of California (D) and St Luke’s (D) made a motion for an order to bring in the other D’s. The motion was denied, and they applied for a writ to restrain the court until the other D’s had been brought it.
Rule: Beneficiaries are necessary but not indispensable. Necessary parties are those who are so interested in the controversy that they should normally be joined to enable the court to do complete justice but whose interests are separable so they are not indispensable parties, that is, parties without whom the court cannot proceed.
Analysis: In cases like this, the action is against the distributee trustee solely of the property that came to her, and none is interested in the granting or denial of similar relief to others. unlike a case in which any judgment would affect the rights of absent persons, the present case is one in which Smedley (P) may litigate her claim against bank of CA (D) and St Luke’s (D) alone and obtain a decree which binds them alone. The absent legatee-defendants, not being before the court will not be bound by the judgment, and their property will not be affected. They weren’t served with process and did not defend themselves, therefore they are not bound. Following are examples of indispensable parties: in any action to determine ownership, title or right to possession, all co-tenants or joint tenants are indispensable parties; in a representative suit by a minority shareholder, the corporation is an indispensable party; courts are split on whether al joint obligees under a note, lease, or other contractual obligation must be joined in an action to enforce the K.
Warner v. Pacific Telephone CA 1953
Facts: Caryl Warners first and second wives were listed in the telephone book as Mrs. Caryl Warner. The second Mrs. Caryl Warner was married to Mr. Warner at the time the suit was brought. After the telephone company refused to remove the first Mrs. Caryl Warner from the listing, the present Mrs. Warner brought suit against the company for damages on the ground that the existing listings injured her reputation in the community and caused her “emotional distress, humiliation, fear, vexation, annoyance, scorn and ridicule with regard to her reputation, and made her physically ill with asthma P also asserted that she owned the title “Mrs. Caryl Warner” and that her prestige and dignity were being depreciated. The listing invaded her privacy because it suggested a bigamous marriage. And the Phone company k or shk that listing would cause such damage. Telephone company demurred saying that the P had failed to join an indispensable party.
Rule: Other Mrs. Caryl Warner is necessary to judgment even though not legally bound by it. A party should be joined if her rights may be affected in a practical way by the judgment, even if the party will not be legally bound by it. END
Interests to be Considered
1) The rights of absent 3rd parties whose interests may be affected in a practical way.
2) The interests of parties to the suit in avoiding multiple suits and liability
3) Judicial efficiency and economy.
1966 Amendment to Rule 19: abandoned old terms in favor of “equity and good conscience test” [Rule 19(b)]
FRCP 19 (a) Persons to be Joined if Feasible.
(a) Person subject to service of process and whose joinder won’t deprive court of smj shall be joined if:
(1) In person’s absence, complete relief cannot be accorded among those already parties. OR
(2) The person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person’s absence may:
(i): as practical matter impair or impede person’s ability to protect interest.
(ii) leave any of persons already parties subject to substantial risk of incurring double, multiple or otherwise inconsistent obligations by reason of claimed interest.
If person should join as P but refuses, may be made D, or in proper case, an involuntary P. (involuntary P if has duty to allow P to sue in his name. E.g. owner of patent regarding exclusive licensee. Don’t need to serve process on involuntary P.)
If joined party objects to venue and joinder would render venue improper, party shall be dismissed.
(b) Determination by Court Whenever Joinder Not Feasible. If above person cannot be made party (i.e. b/c of p.j. smj or venue), court should determine whether in equity and good conscience it should proceed with parties before it or whether it should dismiss, absent party being regarded as indispensable.
Provident Tradesmens Bank & Trust Co. v. Patterson, 1968 U.S.
Facts: Dutcher lends car to (assume) employee, Cionci, allegedly to run a specific errand. Allegedly, Cionci made a detour from that errand, and in doing so, got in a car accident. As a result of that collision, Smith, the other driver was killed. Cionci was killed as was his passenger, Lynch. Cionci’s other passenger, Harris, was injured but not killed.
1) Lynch’s administrator, Provident Tradesman Bank (+50,000) v. Cionci’s estate
Cionci’s estate was broke so it never paid.
2) Smith’s estate and Harris v. Cionci estate, Dutcher, and Lynch/Provident.
Provident needs to find fund to satisfy that potential liability. (Remember, Cionci is broke.) Fortunately for Provident, Dutch had a $100,000 insurance policy on his auto with Lumberman’s Mutual, covering 1) the liability of anyone driving with Dutch’s permission or 2) vicarious liability as a principal. But Lubermens declined to defend Cionci’s estate in the first suit on the grounds that Cionci was not covered by the insurance policy as he was on a frolic at time of accident, and therefore Dutcher had not given the necessary permission. Thus, Provident (P) brought this diversity suit based on its claim from the 1st action:
asking for a declarative judgment that Dutcher had given Cionci permission to use his car. Harris and Smith’s estate were joined as P’s. All P’s were residents of PA. Dutcher was also PA resident. Dutcher was not joined as a D.
Harris (P) + Smith (P) + Lynch Provident (P) v. Luberments
The district court found for the Ps, holding that Cionci was driving with permission, but the court of appeals reversed and dismissed the case on grounds that Dutcher was an “indispensable” party whose joinder would destroy lack of diversity. But the appellate court did not follow FRCP 19
Rule: FRCP 19: [acts to protect judgments from post-trial tactics to have the judgment dismissed for lack of indispensable parties. (e.g. if missing parties would destroy diversity jurisdiction, then the losing party could move addition which would lead to dismissal after the judgment.)]. If above person cannot be made party (i.e. b/c of p.j. smj or venue), court should determine whether in equity and good conscience it should proceed with parties before it or whether it should dismiss, absent party being regarded as indispensable.
Analysis: Toward determining FRCP’s “equity and good conscience” elements, there are four interests the court must look to: 1) Look to P’s interest. Usually means must ascertain whether P could bring all parties in state court. But here, P’s situation is somewhat atypical in that he already had fully litigated judgment which was set aside. Don’t know if P will have remedy in state if dismissed for disjoinder. So P would be prejudiced if court chose not to proceed with parties before it, because that would mean the action would be dismissed and would have to be relitigated. 2) Look at D’s interest. Here, D’s do not appear to be prejudiced since they failed to complain of Dutcher'’ non-joinder at trial. 3) Look to 3rd parties interest. Here, Dutcher is not harmed because he is not bound by judgment (though he might have a practical interest down the line: if C had permission and was found liable, then insurance company would have to pay and premiums would go up.) BUT court of appeals could have shapped relief to avoid any prejudice to Dutcher. Could have accepted a limitation of all claims to the amount of insurance policy, thus precluding any subsequent action against nonjoined party, Dutcher. Modification of a judgement as an alternative to dismissal. 4) Finally, the court should look to efficiency considerations. Though the idea of joinder is to promote judicial economy, here, it would be more efficient to preserve the judgment than to dismiss and force relitigation.
Provident Trademan 19(b) analysis: should the court proceed with absent parties? Factors to consider:
(1) The Ps interest :
a. Will P have another adequate remedy if dismissed?
b. Can state court hear the case if fed dismisses?
c. Does state sol bar the suit?
(2) Ds interest in avoiding multiple litigation, multiple liability or inconsistent relief.
(3) The interests of the absentees:
a. Will 3rd part interests be affected in a practical way?
If a person is not a party to suit, won’t be bound: a judgment is not res judicata as to, or legally enforceable against nonparty. But a judgment might have practical effects on nonparty.
b. Can relief be shaped to avoid this problem? ($/injunctive: Warner)
(4) The public interest in efficiency:
a. If there is a forum where all the parties can be joined in one suit then P should go there.
Note: These factors are implicit in 19(b). Final analysis is a Balancing Test.
Rule 19(b): acts to protect judgments from post-trial tactics to have the judgment dismissed for lack of indispensable parties. E.g. if the missing parties would destroy diversity jurisdiction, then the losing party could move addition which would lead to dismissal after the judgment.
Can only determine if party is indispensable in the context of a particular case. Rule 19 governs how that determination is made in federal courts; determines importance of substantive rights and if the court can proceed w/out absentee.
Hypo: If Provident arose, would 1367 authorize Dutcher’s joinder as a D, despite the fact that he was a co-citizen of P.
§1367(a): Supplemental jurisdiction over cases from “same case or controversy”
§1367(b)Prevents District court from adjudicating claims by P’s that would destroy diversity.
(1) So, P could not assert a claim against the joined party.
(2) Some say that §1367 does not prevent the D from impleading a non-diverse party on the defensive side of the suit to employ a defense. Thus the 3rd party here would be a party to the suit and would be bound by the determination. This avoids situation where either the absentee would be harmed by the non-joinder if P prevails or D harmed by multiple suits. Note: D could assert a defense to avoid practical harm. Interpretation: Under §1367, D could be joined as a D, even though P could not assert a claim against him.
A and B (CA) assault C (NV). A and B are joint and severally liable for C’s damages. C sues B in federal court. Should A be joined if feasible under Rule 19? NO. Joint tortfeasors are not “necessary” or indispensable parties even if feasible. P can obtain complete relief against either one.
A Court faces 19(b) problems when:
(1) absentee not within PJ of court
(2) SMJ destroyed by joinder.
(3) Absentee joined and raises valid venue objection.
Advisory Committee Comments to Rule 19:
Failure to join an indispensable party does not deprive court of power to adjudicate controversy between parties present. Court can make a binding determination regarding the parties before it. Could have practical impact on absentees or subject present parties to inconsistent relief but still not void. Must balance considerations.
HYPO: P brings action to evict D from land, claiming ownership and right to profits from removal of minerals. D moves to dismiss b/c lessor also claims ownership of land but cannot be joined b/c would destroy diversity. Court dismisses b/c lessor is an indispensable party.
1) Effects lessor’s interest as a practical matter.
a. if D evicted then no royalties.
b. Though not legally bound (no RJ), court decision would cloud value of title if court determined that P owned land.
2) No real way to shape relief or give an adequate judgment.
a. no in between way to settle controversy and not do harm to absentee.
3) There is an alternative forum available in LA state court
a. All parties amenable to process and cases could be decided under state law.
FRCP 14: Impleader
At any time after commencement of action, D, as 3rd party P, may serve upon a person not a party to the action, who is or may be liable to the 3rd party P for all or part of P’s claim against the 3rd party P.
(1) There is no need to obtain leave if 3rd party P files complaint within 10 days after service of the original complaint (amendment)
(2) 3rd party D shall:
1. Make any defense to the 3rd party P’s claim as provided in R12.
2. Any CC against 3rd party P and Xclaims against the other Ds as provided for in R 13.
3. Also may assert any defenses that third party has against original P since now 3rd party will be bound.
(1) Impleader is always optional
(2) Involves indemnity or contribution
(3) Impleader must involve transfer of liability based upon original claim
(4) The legal theory upon which impleader is based must be recognized by substantive law. If not, D could file 12(b)(6) motion.
(5) Impleader is a procedural rule that accelerates prosecution of otherwise recognized claims.
(6) §1367 specifically authorizes supplemental jurisdiction over ‘claims that involve the joinder or intervention of additional parties.
a. same case or controversy requirement.
b. Restriction of 1367(b).
(7) Impleader CANNOT be used when D believes another party is responsible for the breach of duty giving rise to P’s claim. Should be raised in the answer, not in the impleader.
Jeub v. B/G Foods Inc.
Facts: Jeub (P) brought suit against B/G foods (D) alleging Jeub (P) suffered illness from eating ham served in one of B/G’s restaurants. B/G Foods purchased ham in a sealed container from Swift. Prior to serving the answer, B/G Foods (D) obtained an ex-parte order making Swift & Co. a third-party defendant. In its third-party complaint, B/G Foods (D) disclaimed negligence for Jeub’s (P’s) injuries, placing blame solely on Swift. D asked that if Jeub (P) recovered against them, Swift & Co. should indemnify them for such recovery. Swift & Co. moved to vacate the ex parte order on several grounds, including the assertion that Rule 14 offered no substantive basis for joinder, and under MN law, a right to indemnification existed only after D suffered payment of any recovery. Rule: In a federal action, impleader is permitted of a party who is or may be liable for indemnification to a party-D as long as the applicable state substantive law regarding indemnification is satisfied. Rule (1) Rule 14 is not limited to rights of indemnity presently enforceable. (2) 14 allows indemnity against party “who is or may be liable.” (3) Rule 14 accelerates indemnity clause, does not change rights of parties. Until D loses to P, any judgment by court against 3rd party D will be stayed. Allows courts to resolve all claims arising from same T/O in single proceeding without prejudice.
HYPO: D sued for neg. driving. D wants to implead ins co. Ins. Policy contains “no action” clause stating that no action can be brought against the co until J is entered against D.
1) Rule 14 only accelerates determination of rights.
2) To avoid prejudice of jury if know insurance co will pay:
- court could order separate trials under 42(b) to avoid prejudice.
HYPO: What if D(P?), 3rd party P, and 3rd party D are citizens of the same state in diversity action?
(1) Court has supp jur under §1367(a) but limited by §1367(b)
(2) BUT a claim by the 3rd PD against the P which violates diversity is different b/c P chose the forum and should be ready to live with its limitations; whereas the 3rd PD is brought in against her will.
Jurisdictional limitations: if the federal court’s jurisdiction is based on diversity, then P’s ability to assert claims against impleaded parties is limited by diversity requirements. Kroger codified in §1367(b).
§1367(b) restricts claims by Ps that would destroy diversity. BUT does not restrict supplemental jurisdiction over claims made by Ds or 3rd party Ds in diversity suits.
Can P now assert non-diverse claim against a third party D?
YES: 1367(b) talks about claims not CC
1367(b) talks about P’s. Once P is in a defensive position he is a D.
NO: 1) P is still a P, even if there is a claim against her. 2) Still subject to restrictions of 1367(b); not unless it is compulsory under 13(a).
Jurisdiction over Pendant Parties.
(1) Pendant Jurisdiction: P asserts federal claim against D. Court would recognize state claim against another D that arose out of the same common nucleus of operative fact. Gibbs.
(2) 1367 overrules Aldinger v. Howard (SC): §1367(a) expressly provides that federal court has SMJ if claim is part of same case or controversy as the original claim.
Return to Supplemental Jurisdiction.
Stromberg and Comfort Control bring a diversity suit in Federal Court against Press to get paid their subcontractor fees. The amount in controversy requirement at the time was $50,000. Stromberg’s claim was for 425,000. Comfort Control’s claim was for $27,000.
B (CA), A (CA)(25,000) v. C (Nev.)
MOST Federal courts would hold that B and A’s claim may not be aggregated and A has to meet the amount in controversy requirement independently. BUT can make argument that fed court would have jurisdiction: Under 1367 A’s claim against C falls under supplemental jurisdiction b/c all other claims that re so related to claim in action within such original jurisdiction…same case or controversy (same as Gibbs) incl claims that are joinder. 1367(b) provides an exception to a, but regarding rule 20, it focuses on claim against. Doesn’t prohibit claims by parties. Wingate says his hypo above is even stronger than stromberg. There isn’t supp juris by Ps against parties joined pursuant to 20. If Stromberg applies to all-it applies to these situations were there is only 1 D.
Intervention is the means by which a person (or groups) who are not named in a lawsuit may join the litigation if they have an interest they seek to protect.
Interest Impairment. A person has the right to intervene when the applicant:
1. claims an interest relating to the property or transaction that is subject of action AND
2. The disposition of the action may as a practical matter impair or impede the applicant’s ability to protect that interest UNLESS
3. The applicant’s interest is adequately represented by the existing parties. §24(a)
What constitutes “interest”
1. Broadly defined for intervention purposes.
2. Need not be an economic interest
a. Smuck: parental interest in school administration sufficient to support a right of intervention.
b. Public interest groups frequently seek intervention to protect non-economic interests such as clean air.
3. Don’t have to meet res judicata standards.
a. enough if interest is impaired as a “practical matter”. Atlantis.
Atlantis Development Corp v. United States 1967
Anderson claimed to have discovered a number of coral reefs called the Atlantis Group. He claimed ownership and put advertisements in newspapers in US and England. Anderson sold his interest in the reefs to Atlantis Development. A group of corporations tried to get permission from the Army Corps to develop the reef. Atlantis found out about it and notified the US of its claim to ownership of the reefs. The Government (D) brought an action against the Ds for trespassing on government land and for erecting a structure on the outer continental shelf without a permit from the Secretary of the Army. Atlantis sought intervention by a proposed answer and cross-claim. Atlantis (P) alleged that it held title to the property by discovery and occupation and that the Government (D) has no territorial jurisdiction, dominion, or ownership over the reefs. Atlantis (P) also filed a cross-claim against D’s for trespass.
Issue: When can a party practically effected by stare decisis assert intervention of right?
Analysis: Legal issue is whether the reefs are submerged lands according to the Continental Shelf Lands Act. If the reefs do constitute “land” another question is whether the sovereignty of the US extends to them with regard to another federal statute: §1333(a)(1). FRCP 24 amendments ease the requirements for intervention by attempting to coordinate the rules controlling joinder of parties and class actions. The changes either require the joinder of or the intervention of a party who claims an interest relating to the subject of the action and is so situated that the disposition of the action may, as a practical matter impair or impede his ability to protect his interest. When a party is required to be joined in an action under Rule 19, the same party would have sufficient interest in the action that he would be able to intervene in the case as a matter of right. Because Atlantis (P) had claimed ownership of the contested reefs, they probably should have been joined as D under Rule 19. Rule24(e)(2) requires both the existence of an interest which may be impaired as a practical matter and an absence of adequate representation of the intervenor’s interest by existing parties. Atlantis (P) certainly has no one in the action that is representing their interests. Both the government and the D’s interests conflict with that of Atlantis. Even though Atlantis would not have been bound by the judgment, as a practical matter, its rights would be decided b/c of the effect of stare decisis.
3 Main Purposes of Discovery
1. Ascertain and isolate issues actually in controversy between the parties.
2. Ascertain testimony and other evidence available on both sides of each disputed factual issue.
3. Preserve relevant testimony that might not otherwise be available at trial.
4. But sometimes goals of discovery are in tension with the idea that each litigant should prepare their own case and not sit back and let other litigant do all the work.
Scope of Discovery Broad (Rule 26)
1. Information reasonably calculated to lead to the discovery of admissible evidence is discoverable even if not itself admissible as evidence.
2. Information sought through discovery need NOT be relevant to issues actually in dispute between parties: only needs to be relevant to subject matter of suit.
3. If #1 and #2 satisfied, information is discoverable unless privileged.
First Amendment concerns: There is no first amendment right to obtain or disseminate information obtained through discovery. Seattle Times (upholding as constitutional a protective order prohibiting a newspaper from publishing donor’s list of a religious foundation.)
Parties generally may not seek discovery from any source before they have met and conferred as required by Rule 26(f)
1. Per 26(f) Attorneys of record + unrepresented parties must meet at least 14 days prior to a scheduling conference with a federal district judge magistrate. At this meeting, parties must in good faith:
a) discuss claims and defenses and possible settlement.
b) Arrange for informal exchange of information required under 26(a)(1).
c) Develop a proposed formal discovery plan.
2. Within 10 days after this meeting, the parties must submit to the court a written report of the meetings results.
Oral Depositions: Most Effective Discovery Device.
a) answers under oath
b) both Qs and As transcribed
c) Can get an idea of how witness will perform at trial
1. attorney can address witness directly and ask follow up Q
2. Can see demeanor of witness
d) No time for witness to reflect and plan, and often admissible at trial
e) But time consuming and expensive; each party must pay the expenses of conducting a deposition including:
1. witness fees
2. travel expenses
3. stenographer’s fee
5. BUT sometimes deposition costs can be recovered in the judgment.
1993 amendments to curb abusive deposition practice.
1. Parties may not begin to take depositions before they have met, discussed and planned discovery pursuant to Rule 26(d), unless the deponent is going to leave the country or be otherwise unavailable. Rule 33(a)(2)(c)
2. Limits on the number of depositions. Ps Ds or third party D’s may take up to 10 depositions per side without the court’s permission. The court must approve depositions beyond this number. 30(a)(2)(A)
3. Repetitive Depositions: A party also must obtain the court’s approval to depose a person who already has been deposed in the litigation.
Non-parties need not be subpoena, but if don’t use subpoena and witness doesn’t show up, then noticing party bears all costs. (including other party’s attorney’s fees.)
1. Rule 30 allows subpoena to compel witness.
2. Parties can be compelled without subpoena rule. Broad range of sanctions that can be raised. (JS CHECK THIS OUT. NOTES FROM CLASS.)
If the non-party then fails to show , the court may cite the non-appearing person for contempt.
A deposition subpoena was served upon nonparty, Teledyne Inc. in NY. The subpoena stated that the corporate president was to be produced in NY. The president was located in Los Angeles, Teledyne’s principal place of business. Rule: The deposition of a nonparty corporation should be taken at its principal place of business. Analysis: FRCP 30 gives great leeway to courts to fashion such orders as are necessary to prevent injustice. The protective order is a principal device in this regard.
Non-party Corporations Rule 30(b)(6)
Can notice/subpoena corporation or partnership and describe matters on which exam will be conducted.
Organization must designate persons to testify on its behalf.
1. designated persons must testify as to matters known or reasonably available.
Compelling Production of Documents at Deposition
Party: Via request in notice, by complying with rule 34 and specifying materials
Non-party: via subpoena duces tecum
Recording by means other than Typographic
Rule 30(B)(2): Parties may stipulate/court may order preservation of testimony by other than typographic means (eg video), unless court says otherwise.
Party can videotape only if so states in notice or if all parties agree (so consent is not required.)
Can be used for any purposes for which deposition can be used.
a. must make transcript available at trial. Generally would have stenographer.
Depositions on written interrogatories Rule 31
A deposition on written questions operates the same way an oral deposition does except the attorneys are not present. Questions are sent to an officer who reads the question aloud to the deponent whose answers are recorded.
Less costly, particularly if party distant, but loss of flexibility and spontaneity.
For depositions, lawyers must object at time of deposition. Deposed person can still answer, but attorney’s objection is on record.
1. Can you ever properly instruct client not to answer?
a. If court has ordered a limitation on evidence
b. if question is made in bad faith or is oppressive, the deponent’s lawyer may ask to suspend the deposition to seek a court order to cease the deposition.
c. A lawyer may instruct deponent not to answer to preserve a privilege or immunity
Interrogatories Rule 33
See supp for form interrog. 486-493
Limit of service of 25 interrogatories per side without leave of court or written stipulation. Includes discrete subparts. Prevents abuse by large firm of solo practioner.
Written request for information served only on parties to the lawsuit (can’t be used on non-parties.)
Not as effective as depositions b/c attorneys can counsel before answers given to opposing party.
No opportunity for follow-up Qs
No interrogatories about questions of law, but many courts, including FED, allow “contention of interrogatories” in which party is asked to apply law to fact. Usually also ask for back up facts.
Main benefit is that party can be asked for information not known but which is at its disposal. (e.g. organizational information.)
Rule 33(d): Party may produce business records instead of answering if:
1) burden of ascertaining information (from records) substantially same for both parties.
2) Responding party specifies records from which answer can be found in sufficient detail to permit interrogating party to locate and identify as readily as could responding party.
3) Responding party specifies records from which answer can be found in sufficient detail to permit interrogating party to locate and identify as readily as could responding party.
Generally not admissible as evidence at trial
Document production and inspection of property
A party may compel an opposing party to produce documents or other tangible things for inspection. A party may also compel the opposing party to allow them to come onto property to inspect, measure, survey, photograph, test or sample the property, or to observe an operation taking place on the property. Rule 34(a)
Procedure for production of documents or things in the possession of parties. A party seeking production or inspection services notice on the opponent stating what the opponent want to see and when, where, and how they would like to see it. Rule 34 B
Hart v. Wolf
Hart filed a defamation action against Wolff (D). The statements involved concerned Hart’s alleged misappropriation of funds in the formation of Arctic Bowl, Inc. Then another party purchased Arctic Bowl but Hart stayed on as manager. Hart argued that the superior court could not properly order the production of records of Arctic Bowl b/c the records were not in the possession of custody, control of a party to the pending action. Rule: An order to produce the records is justified where the party to an action does not have actual custody, control, or possession of certain records, but could use her influence to produce them.
Parties may not evade discovery by placing documents with others, and control does not mean legal control. Parties may not plead lack of poss’n or control to avoid discovery. Societe Internationale v. Rogers.
Lawyers frequently use a Rule 33 interrogatory request to identify documents, coupled with a Rule 34 request to produce those documents. In lawsuits involving corporate or governmental entities, lawyers frequently use interrogatories to ascertain who has “possession, custody, and control” of the documents.
Form of production: Responding parties required to produce documents as kept in usual course of business or label them corresponding to categories in request.
Party may request entry upon designated property w/I possession or control of another party.
Must use deposition via subpoena duces tecum
Rules give no right to inspect property that can’t be brought to deposition. Would cause complex jurisdictional and procedural problems.
Maybe via equitable action against non-party.
Physical and mental examinations: Rule 35 A person whose physical or mental condition is in controversy in a litigation may be compelled to submit to a medical examination.
1. a Persons physical or mental condition must be in controversy
2. movant must show “good cause” to compel examination
a. weigh pain, danger, or intrusiveness of the examination
b. need for, or usefulness of information gained.
c. Greater cause than just being relevant (narrower rule than 26)
Most physical and mental examinations occur as a result of agreements between attorneys. Rule 35 to encourage parties to stipulate to examinations.
Requests for admission: Rule 36 A party may serve on another party a written request to admit the truth of certain matters of fact, or the application of law to fact, or the genuineness of a document or other evidence.
1. Status as a discovery device: requests for admissions are the least frequently used discovery technique. In a technical sense, this is not a discovery device at all, because it does not seek to discover new information. Instead it narrows issues for trial.
2. Purpose: trial expedition: the major purpose of admissions is that such statements help to expedite trial by eliminating uncontested facts from proof at trial. Admitted facts need not be proved at trial and therefore the lawyer does not have to adduce evidence in support of the admitted facts. 36(b). Unlike other discovery responses, a responding party cannot contradict an admission at trial or explain it away.
1. P/I actions
4. Undue influence.
Constitutional Privacy concerns Rule 35
Permitting court-ordered exams is constitutional. Schlagenhauf v. Holder.
Order for examination: Standards
A. Without awaiting a discovery request, parties must now disclose:
1) Names, addresses, and telephone numbers of individuals likely to have discoverable information relevant to disputed facts alleged with particularity in the pleadings.
2) Descriptions and locations of documents, data compilations, and tangible things in the possession, custody, control of a party that are relevant to the disputed facts alleged with particularity in the pleadings.
3) A computation of damages the disclosing parties claims + documents or other evidence supporting the calculation of those damages.
4) Any insurance agreement which may satisfy or indemnify all or part of a judgment.
B. Encourages plaintiff’s lawyers to set forth their claims with more fact specificity.
1) But at least some authorities claim that this is in tension with liberal notice pleading standard.
C. Timing of information exchange
a. within 10 days after they meet to discuss the litigation required in rule 26(f)
D. A party will be penalized if they fail to make a disclosure that is
1) not substantially justified OR
1) Court may inform jury of obligation to disclose.
2) Penalty does not require motion.
3) What is penalty? 37(b)??
Summary Judgment Rule 56
Summary Judgment ends a litigation where there are no disputed factual issues to be determined at trial and therefore one of the parties is entitled to a judgment as a matter of law.
When party moving for summary judgment does not bear the burden of proof at trial (like they are a D)
Celotex US Supreme Court Decision
P sues asbestos manufacturers claiming that her husband’s death resulted from exposure to Celotex’s products. Celotex (D) moves for summary judgment on the basis that no evidence existed that the decedent had been exposed to Celotex’s products. The district court granted the motion, and the court of appeals reversed, holding that Celotex had not offered sufficient evidence to rebut P’s allegation.
Rule: FRCP 56 does NOT require that the moving party negate the non-movant’s claim. A party can meet her initial burden by showing that the non-movant cannot establish an essential element of the case that it will have the burden of proving at trial.
Dissent (Brennan): takes a seemingly opposing view. According to Brennan, the movant must show that the record is devoid of any evidence of P’s claim. (Have to prove there is nothing.)
On Remand (Starr): the court found sufficient evidence for P to continue. Even though some of the evidence relied on might not be admissible at trial, it at least points to the possible existence of other evidence (like witnesses!). (Wingate: “inadmissible” docs can be presented at trial if no objection is raised.)
Remand Rule: Even if the evidence used to establish that a genuine issue exists is inadmissible at trial, if that evidence is reducible to admissible evidence then a genuine issue exists.
Some Authorities: have criticized the majority approach contending it allows D’s to bypass discovery phase by moving for summary judgment. And indeed, the Supreme Court’s lessening of the initial burden in Celotex was intended to facilitate more frequent use of the summary judgment procedure.
Sub rule of Celotex: “Affidavits” in FRCP 56 is followed by the phrase “if any.” Celotex: there is no affirmative requirement that the moving party support its motion with any materials in support of its action. However, usually the moving parties do supply the court with more info than what is alleged in parties pleadings.
Summary Judgment in Favor of Party with BOP at Trial
a. Movant must shift burden of production to the nonmovant
b. Must support the motion with enough credible evidence as would entitle party to a directed verdict at trial. (no reasonable jury could find for the opposing party.)
c. Need more than the fact that party wishes to examine movant’s evidence. Must have facts to show affidavit is unreliable or non-credible. Specific facts put credibility at issue (dishonesty, vias, former perjury conviction, mistake, inconsistency.)
d. Judge cannot consider the credibility of witnesses in deciding SJ motion.
Lundeen v. Cordner
Facts: Decedent, Joseph Cordner has group life insurance policy naming his children from a prior marriage as his beneficiaries. After decedent divorced his 1st wife, he married and had another child. Contest for proceeds from the life insurance policy are between the kids of the first wife (brought by the first wife) and the 2nd Mrs. Cordner.
2nd Mrs. Cordner asserts that deceased attempted to change the beneficiaries of his life insurance policy before he died. If he had completed all the necessary steps required of him to change the beneficiary in his policy, then the 2nd Mrs. Cordner would be entitled to judgment. If 2nd Mrs. Cordner can demonstrate this issue then there is no issue of material fact and the court may grant a summary judgment pursuant to FRCP 56. Another way of considering this question is would the information presented entitle one of the parties to a directed verdict?
1) Appears that after deceased’s marriage to 2nd Mrs. Cordner, he amended his group hospitalization plan to include his new wife.
2) Some correspondence indicates “conclusively” that a change in life insurance was already made.
a) Benefits administrator of Mr. Cordner’s employer prepared a letter to the main office stating that Mr. Cordner:
i) wanted to know who his beneficiaries were under his current plan b/c
ii) he recently remarried and not sure if he had changed his beneficiaries.
b) Working with the benefits administrator, Mr. Cordner completed the necessary forms and signed in presence of benefits administrator.
c) Benefits administrator then sent forms to NY office asking if changes were acceptable under the plan.
d) Benefits administrator recalls that change was that ¼ proceeds to new wife and rest according to last will and testament.
3) The court holds that Mr. Cordner’s expressed desire to change was beyond any reasonable and genuine dispute.
a) benefits administrator was disinterested third party
b) his assistance in making of change was performed in the ordinary course of business.
c) His affidavits are positive, internally consistent, and unequivocal.
d) D made no efforts to depose: apparently believed nothing to gain.
4) Here, D would be entitled to a directed verdict at trial and it would be up to P to specify at least some evidence which could be produced and weigh in her favor.
5) P says that insurance certificate showing kids as intended beneficiaries entitles her to trial.
i) credibility of affidavit giver is always an issue that can be explored at trail.
ii) Court says this is lame: if true then the court would never give summary judgment.
iii) P would have a valid issue if there were issues of witness credibility or demeanor. But here there doesn’t seem to be any.
6) Rule: Desire for cross examination will not prevent summary judgment when affiant is disinterested party with no cause to believe he is dishonest or unsure of facts.
Cross v. US
Facts: P, a foreign language professor, attempted to deduct the cost of a summer vacation to Europe from his federal income taxes. District Court granted SJ for P.
Rule: SJ is generally inappropriate where the material issues relate to motivation, intent, or other subjective feelings.
Why: When state of mind is a factual issue, the witness’s credibility will often be very important in deterring that issue and courts are not to consider credibility in SJ motions. That is for fact finder. Here, the tax code based its deductions on the purpose of the vacation (possibly a subjective test.)
Reconciling Lundeen and Cross
1. For credibility to prevent SJ, there must be a threshold showing of relevance to the evidence.
a. Here relevance is that witness’s state of mind is key issue.
b. Witness has a financial stake.
Once a movant satisfies initial burden, opposing party must:
a. Produce evidentiary materials and demonstrate the existence of a genuine material issue of fact OR
b. Submit a motion for additional discovery pursuant to Rule 56(f)
Party cannot simply dispose of Summary Judgment by referring to pleadings, must produce evidence (e.g. discovery material, affidavits, to show genuine issue of fact.)
FRCP 56(f) If opposing party cannot present evidence necessary to oppose motion, the court may refuse the app
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