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The Demands of Due Process

Due Process - tells us how far reaching the court can go. If jurisdiction is outside the due process circle, it is
not entitled to full faith and credit. Due process also protects the defendants right not to be coerced, subject
to an inconvenient jurisdiction. Except by lawful power.
One cannot discuss the merits of the case before they establish jurisdiction.
Personal Jurisdiction
Pennoyer: Traditional Basis of PJ: Territorial Sovereignty - A state has authority over a party if:
1) He commences suit in that state
2) Service of Process - the party is within state borders and is served (GJ)
3) Contains property within the state borders
4) They are a resident of the state / domicile in the state
Advantage: predictability and certainty
Hess: Implied Consent (Hess expands Pennoyer from consent to implied consent)
According to the state statute, the Non-Resident Motorist Act (every state has one), the court held use of
the highway = implied consent to be subject to jurisdiction there. It does not violate due process - interest in
the state to protect its citizens. This gives specific jurisdiction.
International Shoe: (does NOT overrule Pennoyer)
If D isnt present in the state,to establish jurisdiction need: minimum contacts (undefined. Determined by
quality and nature) with the forum so that jurisdiction does not offend the notion of fair play and
substantial justice.
Relationship between the cause of action and the contacts:
1) Many contacts, no relationship no jurisdiction
2) Many contacts, big relationship specific jurisdiction
3) Little contacts, no relationship no jurisdiction
4) Little contacts, big relationship specific jurisdiction - maybe. Cases: Hess
2 Tier Approach:
1) Power/Authority - Is there a relationship with the defendant and the state?
Are the contacts sufficient to establish personal jurisdiction?
Before you look to fairness concerns you must have a relevant contact.
2) Fairness - Is personal jurisdiction fair and reasonable?
Look to fairness of:
1) The Defendant - reasonably fair to make him travel?
2) The Forum State - interests in its citizens?
3) The Plaintiff - P travelling vs.D travelling
4) Judicial Efficiency - where are the witnesses located? Place of injury - to view the scene?
5) Policy Concerns - is it fair under public policy?
Gray: Is there jurisdiction over an out-of-state valve manufacturer that explodes in the forum state causing
P injury? (Applies the 2 tier test - statute + constitutional)
The long arm statute says there is jurisdiction if the tort is committed in the state - D contests this by
saying that the tort wasnt committed in the state. Court says yes and bolsters it by the legislative
history which shows the intent of the statute was to apply it as broadly as the C would allow.
Now that the statute applies, is it constitutional? Yes. doesnt offend Due Process.
The main issue in Gray is determining if this is a single isolated act or continuous activity in the state.
Court shies away from saying that 1 single act would be sufficient, but hold that it was multiple activity.
They decide to presume that there were many valves in the state and a single 1 didnt just land up
there. The court assumes that Titan contemplated a wide distribution of sales and couldve reasonably
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foreseen that their product would end up in IL - they werent selling directly to the consumer, they were a
business (could plan and predict).
Fairness Test
1) Site of injury so its convenient from a litigation standpoint.
2) Small injured P vs. big corporate D - would be more inconvenient for P to travel than for D
3) Illinois has an interest in protecting its citizens and providing redress for them.
Quid pro quo argument - you enjoyed the benefits and protections of the laws of the state (rights to sue),
you should be subject to jurisdiction
Mcgee: Court upheld PJ in California based on a single act of mailing insurance premiums.
Court went straight to a fairness analysis and didnt analyze the nature of the relationship D created with
the state.
Court holds a single contact is sufficient for jurisdiction.
1) CA has a big interest in providing justice for its citizens - expressed in a special statute CA passed (this
is key)
2) D solicited business in CA - reached out to the forum
This case is weak precedent bec they use fairness factors to overcome the weakness of contacts, the D
reaching out to the forum - this hodgepodge approach is increasingly disfavored by the court.
D/ILA was required by law to continue the relationship - this would strengthen an argument where the
reaching out was voluntary.
Hanson: Delaware denied FFC to FL and held NO JURISDICTION bec trustees contacts with FL were
less than minimal. Court applies the 2 step approach: purposeful availment and if yes look to fairness
concerns
1) The Delaware trustee had not purposefully availed themselves of the forum - P moved to FL, they
didnt deliberately form a relationship with FL. His continuance of his trustee duties does not constitute
purposeful availment. The reaching out has to be an act of the D.
2) Unilateral activity does not justify the contact requirement
3) The underlying substantive equities heavily favor upholding the trust - its whats fair.
World Wide Volkswagen: A NY family buys a car in NY to take to Arizona. On their way, they get into a
car accident in Oklahoma. They bring a products liability suit in Oklahoma. Does the Court have jurisdiction
over the NY retailer and the NY distributor? No.
1) This was a single fortuitous occurrence, WWV does/solicits no business in OK. There was no
purposeful availment - whatever marginal revenues they accrued from OK is too weak for PJ. and no
relevant contacts.
2) Wasnt it foreseeable that the car could end up there? Foreseeability alone is never sufficient to
establish jurisdiction. Foreseeability is only relevant to D couldve reasonably anticipated litigating
there. If foreseeability stretched to its mobility - D would be amenable to suit almost everywhere by
unilateral activity of P.
3) The consumer brought the car into OK - the contact has to result from a reaching out of the
defendant (differs from Gray - there the seller brought the product into state - manufacturer would know
about it, here it was the consumer).
4) The courts do not address fairness concerns under the 2 tier approach because there was no
purposeful availment.
Plaintiff specifically wanted to sue in OK bec they have the largest jury awards compared to e/w else.
The court refines Gray but does not overrule it. Court wants to avoid the possibility of portable torts.
Burger King: Suit against BK franchisee located in Michigan and headquarters of BK are in FL. PJ in FL?
Is there a long arm statute? Yes. Fl has PJ over nonresident who breaches a contract.
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A contract alone will not be the sufficient minimum contacts req. It must be analyzed together with the
contemplated future consequences.
D had no ties to FL, nonetheless, the contract has substantial connection with the state - D deliberately
reached out beyond MI to negotiate with a FL corp. The quality and nature of the agreement was
deliberate and not fortuitous.
A choice of law provision would generally not be sufficient for PJ, but when combined with a 20 year
relationship (an ongoing commercial relationship where theres planning and prediction) - it reinforces his
deliberate affiliation with the forum state and its reasonably foreseeable to litigate there.
Now that the statute applies, is it constitutional? Yes. Ds inconvenience and MIs interests do not amount
to unconstitutionality. D must show that it is so gravely inconvenient that he is at a severe disadvantage in
the case.
Court here establishes the 2 part test of Shoe. 1) contacts 2) fairness
NOTE: This is an ongoing commercial relationship with planning and prediction vs. a one-shot consumer
(the little guy is not so little).
Dissent: If they wanted jurisdiction, they shouldve put a forum selection clause in and they didn't.
Walden: Applies the minimum contacts test
1) The defendant himself mustve established
2) The contacts must be with the forum state
3) It must be an intentional reaching out and not fortuitous.
Calder Effects Test - If u cause harm in the forum it can be considered purposeful availment.
Asahi: Stream of Commerce case
This is a product liability suit in CA, where the P is from, against tire tube manufacturer, Cheng Shin
(Taiwanese), who then seeks indemnification by the valve manufacturer, Asahi (Japanese). PJ in CA for
indemnification? No.
However the 8 justices concur on the fairness concerns (look at 5 fairness concerns) - that PJ would not
be fair - Both Cheng Shin and Asahi are foreign corp and CA no longer has an interest in resolving this
dispute - just an indemnification claim. The product liability that P brought was already settled. Burden on
D is severe - foreign country and legal system.
This case doesnt provide any law, just a frame of argument. Split 4-4 (equally viable theories), no
majority, just plurality opinion on the issue of sufficient contacts.
Brennans Approach: A mere foreseeability of awareness is sufficient to establish PJ. They put their
product into the stream of commerce with awareness that it could end up in CA. (Gray is good law)
O'Connor's Approach: There must be foreseeability from stream of commerce + purposeful availment -
D mustve had the intent to serve the market (market specificities, advertisements). Mere foreseeability
is insufficient. (overruling Gray)
Mcintyre: Stream of Commerce case (doesnt take the 2 tier approach, addresses power (Pennoyer) not
fairness)
Product liability suit in NJ against British manufacturer. D sells it to a company in Ohio. The Ohio Company
sells it to other states, including New Jersey. PJ in NJ? No. (overruling Brennan in Asahi)
Doesnt provide clear law - majority agrees no PJ but not why there is no PJ.
1) Kennedy Opinion:
Placement of a product into the stream of commerce does not suffice the purposeful availment req -
D mustve purposefully availed itself to NJ. Ds contacts with US is not relevant.
D had not engaged in any contact with NJ specifically - no office, no taxes, no ads. Only tie with NJ
is the single machine at hand. That is not sufficient to provide that they had an intent to serve the
NJ market (OConner approach).
2) Breyer Opinion:
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Because there was only a few machines sold in NJ, no PJ. Courts never upheld PJ on such isolated
or sporadic contacts - ignores Mcgee and avoids the fact that the nature of the machine was that
not allot would be sold.
Dissent: (Ginsburg)
There should be PJ. Unfairness to injured P vs.D. They purposefully availed themselves to US. Goal of a
corp is to maximize profits. Shouldnt be able to avoid liability by circumventing the law by using an
independent distributor.
Purposeful Availment - defined here as: intent to serve the market in the forum.
General Jurisdiction
Goodyear: Bus accident in France as a result of a tire explosion, 2 boys die. Parents, NC residents, bring
suit there against Goodyear Turkey.They didnt do business in NC, but a small percentage of their products
were distributed in NC by Goodyear USA (parent corp) General jurisdiction in NC? No.
For GJ need continuous and systematic activity with the forum as to render it essentially at
home. Entering a product into the stream of commerce is not sufficient for GJ (may be sufficient for SJ),
transacting business does not make you a domicile of the state.
At home -
1) Individual - domicile
2) Corporation - state of incorporation or principal state of business
The small percentage of Ds products in NC may have been sufficient for SJ but not GJ - contacts
requirements are distinct. The foreign subsidiaries did not have sufficient contacts with the forum to
render it at home. (Contacts of the parent corporation are irrelevant, subsidiaries are independent legal
entities from its parent corp) If would allow GJ wherever products are distributed, D would be amenable to
suit on any claim everywhere.
Court did not allow combining specific contacts with general contacts, imputing contacts of the subsidiary
to the main corp.
Goodyear changes GJ from substantial ties with the forum as held in Helicopteros and Perkins to
continuous and systematic activity to render D essentially at home.
Daimler: P seeks damages against D, a German based Co, in CA (would be most favorable verdict). P
predicates GJ on CA contacts from Ds subsidiary, MBUSA - incorp in Delaware and PPOB in NJ but
distributes in CA. is there GJ against D? No.
Neither D or MBUSA are incorporated/PPOB in CA - the connections with CA do not render D at home in
CA
Just because a corporation has sizeable sales somewhere, that doesnt subject them to GJ there.
Court rejects the agency theory the 9th Circuit applies, its way too broad to be sustained.
Helicopteros: crash in Peru, 4 US citizens died, Brought suit in Texas against D, a Colombian corp, had
many contacts with Texas - personal training, accepting $, purchasing etc. but not enough to establish GJ.
There was no relationship with the crash and the contacts do not resemble continuous and systematic
activity.
Perkins: P sued on a claim in Ohio, that didnt arise in Ohio or related to Ds activities there. Court held
there was GJ - Ohio was Ds principal place of business.
Harris v. Balk: Harris owed Balk, Balk owed Epstein, Epstein couldnt sue Balk in Maryland bec there was
no PJ so he sues Harris for the money. Harris pays, Balk finds out and says there was no PJ and FFC
shouldnt be given. Was there PJ over Harris/Balk in MD? Yes.
Situs Rule - the debt goes where the debtor goes. Backpack theory. The debt clings to him wherever he
goes and is equally bound to pay it in a foreign state.
This is a quasi in rem action - bec it was against Harris. If it had been against Balk wouldve been in
personam.
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Fits under Pennoyer jurisdiction.

Limited Appearance Rule - court allows Balk to come and contest jurisdiction. Makes quasi in rem fairer.
Shaffer: P files suit in DL against Greyhound and individuals of the corp for violating antitrust. P was
granted an order of sequestration on their stocks - of a DL corp. Did DL courts have PJ over D?
The court broadened Shoes standard to apply to all assertions of jurisdiction including actions in rem
- they must meet the minimum contacts requirement as well. The presence of the property in the
forum is insufficient for PJ.
According to this test, D did not have sufficient contacts for PJ. D did not purposefully avail themselves to
the forum. Not foreseeable to litigate here.
P argues DL has a strong interest of supervising management of a DL corp - this arg is undercut by the
DL legislature failure to assert the states interest in a statute that P finds so compelling.
2 unique factors of this case that narrows the holding for future cases:
1) Delaware Situs Rule - the shares of the company incorporated in DL, are located in DL. (unique to
DL)
2) No Limited Appearance Rule - if you show up to court, its a general appearance.
Justice Powell: quasi in rem is not completely dead. It can still be applied to property that is indisputably
and permanently in the state (real property).
Burnham: D files for divorce in CA and serves P process when he comes to visit for a few days. P is from
NJ. Does CA have PJ over P? Is service of process sufficient? Yes. brings back Pennoyer.
Service of process is sufficient to establish jurisdiction in an in personam action.
Shoes minimum contacts analysis only applies to out-of-state residents and not to those who are
present in the forum state.
Split 4-4-1. All agree there is PJ, just dont agree why.
Scalia: its a firmly established principle in the American tradition. Doesnt offend due process
Shaffer doesnt change things. It needs to be read narrowly - doesnt apply to all assertions of jurisdiction.
Shoe never got rid of the presence theory - tag youre it. Shoe is just an alternative to Pennoyer when you
dont have presence in the forum.
Brennan: Shaffer did change things. Shoe test still applies. According to Shoe, there is sufficient contacts
with the state to establish PJ.
Incorrect approach of plurality opinion to say just bec its been around forever its still a valid basis. The
court can strike down a well established rule if it deems it unconstitutional.
Carnival Cruise: Is a forum selection clause sufficient for jurisdiction even though there are no contacts
with the forum? Yes.
A forum selection clause is enforceable for jurisdiction if its reasonably fair.
1) Special interest of D - passengers from e/w, would have to litigate e/w if they didnt limit the fora
2) Rids of Confusion Where to Litigate - sparing time and money of pretrial motions
3) Benefit of Reduced Fares - reflection of D saving money on travelling to litigate
Arg of P - questions of fairness - should be subject to Shoes minimum contacts requirement - court
disregards this. Unfairness of bargaining power - small print, no one reads the forms...
Statutory and Constitutional Test for Personal Jurisdiction - working through a problem
The Statutory Inquiry
Every state has a statute that allows the traditional basis of jurisdiction
Every state has a Non-Resident Motorist Act
Every state has a Long-Arm Statute (specific jurisdiction) - the state can limit jurisdiction further
than what the constitution allows.
Ex: Gray - long arm statute that says theres PJ if a tort was committed in the state. You have to
determine if the act was considered to be in the state. (Gray, says yes) however some courts (NY) will
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say no. The tort was committed where the product was manufactured vs. where the injury occurred.
Argue it both ways.
Constitutional Inquiry - now that there is a statute that governs, is jurisdiction constitutional?
Does traditional basis apply?
First address Pennoyer - sufficient for PJ. Then move on to discuss the split in Burnham. Then address
Shoe.
If the courts would say Pennoyer does not apply, apply the Shoe test.
International Shoe Test
1) Is there a relevant contact between D and the forum state? (fairness factors are not relevant yet)
a) Purposeful availment (Hanson)
b) Reaching out (Mcgee)
c) D does not need to step foot in the state. Causing injury there is sufficient. (Calden)
d) Can not be an act of a unilateral 3rd party (WWV)
e) Foreseeability (can he foresee litigating there? Problem cases: SOC - know the Brennan and the
OConnor approach in Ashai and Mcintyre)
2) Relatedness of the Contact With the Cause of Action - Is this Specific or General Jurisdiction?
a) If the claim arises from D contact with the forum, then it is specific jurisdiction.
b) If not, then it is general jurisdiction and you are going to have to show how the case meets the
Goodyear requirements.
3) Fairness - is jurisdiction over the D fair?
This step only applies in specific jurisdiction cases (Daimler)
There Are 5 Fairness Factors:
1) Defendant - the inconvenience of D litigating in the forum. Burger King put a huge burden on D to show
that she is so gravely inconvenienced that she is at a severe disadvantage in the case.
2) Plaintiff - Is the plaintiff seriously injured and can't sue in another state? We don't want plaintiff's to lose
their claims if they are injured and can't travel.
3) Forums Interest - McGee: our state has an interest in protecting our citizens and providing a means of
redress for them
4) Judicial Efficiency - Where the injury occurred, where the witnesses are located. We want it to make
sense to try a case in the forum, we want there to be evidence in the forum and have witnesses located
there, etc.
5) Policy Concerns (this does not carry significant weight)
Can argue that even if D doesnt meet purposeful availment, fairness concerns outweigh and there should
be PJ. (MCgee)
In Rem or Quasi In Rem Jurisdiction (situs rules)
In Rem: The court exercises its power to determine the status of property located within its territory.
Quasi In Rem: the court renders a judgment for or against a person, but recovery is limited to the value of
property that is within the jurisdiction and thus subject to the courts authority (it does not create personal
obligations).
Mitchell v. Neff (Pennoyer): Property has to be attached before the case (in both types of actions).
Harris v. Balk where is the situs of the res/debt?
Shaffer v. Heitner introduced the limited appearance rule
1) Statutory Test
There must be an attachment statute - every state has one. It must apply.
2) Due Process Test
Shaffer: For quasi in rem actions, seizing property at the outset is not enough by itself. You must also
show that D meets the minimum contacts test of international shoe. For in rem actions, Shaffer has
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indicated that such actions will generally meet the minimum contacts standard. When claims to the property
itself are the source of the underlying controversy between the plaintiff and the defendant, it would be
unusual for the State where the property is located not to have jurisdiction. In such cases, the defendants
claim to property located in the State would normally indicate that he expected to benefit from the States
protection of his interest. According to Shaffer, the constitutional test for in rem is the same as it is for in
personam.
The Constitutional Test is the same for all forms of Personal Jurisdiction under International Shoe
(Burnham said that it only applied to quasi in rem actions).
Attacking Personal Jurisdiction: Once a court decides it has jurisdiction, validly or not (after you make
your defenses) it has res judicata status. In federal court, that has to be the first thing out of your mouth or
you lose your chance.

Opportunity to be Heard
Mullane: Case to close the books of a collective trust. Constructive notice was given to the beneficiaries
via publication in a local newspaper. D appeared contesting PJ on the grounds of insufficient notice and
offends due process. (court reads Pennoyer narrowly)
The court here focuses more on adequacy of representation more than the method of notice.
2 Issues Raised:
1) No PJ over the out of state D - A: Jurisdiction by Necessity - if they cant bring suit in NY, where else
would there be jurisdiction? Ny has the strongest connection to this issue by far then anyone else.
2) Even if there is PJ, failure to provide sufficient notice violates due process.
The court here does away with the distinction between in rem and in personam (Pennoyer standard would
differ, case is a bit of both), and held that either way constructive notice is insufficient. The requirement of
notice is not contingent on the type of action.
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A fundamental pre requisite of due process is opportunity to be heard - which implies adequate notice.
Sufficient Notice = notice reasonably calculated under all circumstances to give awareness to the
suit and allow D an opportunity to defend himself. The notice given here was not reasonably calculated
and therefore insufficient.
So what notice is sufficient? As long as its purpose is fulfilled - adequacy of representation. In a class
action if most but not all beneficiaries receive notice = reasonable bec even if some didnt receive notice
personally, those who did have the same interests as them and their arguments will be heard. Individual
notice is not always required.
Notice must be reasonably calculated under all the circumstances to apprise the party of the
proceeding.
Constructive service - in certain circumstances it is sufficient notice (Mullane). However, if some other
method is available, you have to do that. This is just a last resort.
Challenging PJ:
1) Rule 12(b) - motion to dismiss or answer and include your defense there. Otherwise its consent to suit.
2) Let the judgement default against you and collaterally attack.

Subject Matter Jurisdiction - arising under Jurisdiction - 28 USC 1331

The power of a court to hear a case given the nature of the dispute
What court will the case be brought if theres PJ? (state vs. federal)
1) State Courts - have general subject matter jurisdiction, can hear any claim.
2) Federal Courts - have limited subject matter jurisdiction - can only hear claims governed by Article 3
Concurrent Jurisdiction - federal courts have Article 3 telling them what they may hear, but not exclusive
to them. The power for state courts to hear the same claims is not revoked.
Exclusive Jurisdiction - there are certain subject matters that are exclusive to the federal courts (ex:
patents - complex topics that the federal courts have expertise in)
FRCP 12(h)(3) - you cannot consent to subject matter jurisdiction. You cannot waive your right. One
can challenge SMJ at any point (as oppose to PJ). Reason: once in federal courts, its a public interest
issue beyond fairness to the litigants.
2 Main Cases That Federal Courts Can Hear: (constitutional limit)
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1) Diversity of Citizenship + $75k in controversy

2) Federal Question Dispute
- The fact that you meet the requirements for FJ, does not mean you must litigate in FC. SC has
concurrent jurisdiction.
Mottley: P released all claims for injuries in exchange for free RR passes. D stops paying bec of a newly
enacted congressional statute. P sues in FC (no DOC). Subject matter jurisdiction? No.
Ps claim was not based on a federal issue. Ps claim was breach of contract. Just included the
anticipated constitutional defense of D in its claim - this is NOT sufficient for SMJ. The case did not
arise under federal law.
Well Pleaded Complaint Rule - The case must be federal from the beginning and not cases that may
have a federal issue arise. The cause of action must originate with a constitutional claim to arise under
federal question jurisdiction. (Purpose: to restrain the flood of litigation in FC.)
1) Is this an anticipated defense?
2) Is this artfully pleaded?
3) Are they trying to bring a federal issue when one doesnt really exist?
Implied Private Right of Action - The WPCR is not express in the statute. Written in invisible ink. The
court here implied a limitation in the congressional statute 1331. Imposing a further limitation than the
constitution. Although the C and 1331 have the same language they are interpreted differently. The Mottley
case falls under 1331 - subject to the WPCR. The court is not going beyond the bounds of the C. Theyre
only applying their limitation to the congressional statute, not to Article 3. (Proof: On appeal goes up to
USSC - there is jurisdiction bec Article 3 governs in appellate jurisdiction and there is no limitation of the
WPCR.)
In order to imply a private right of action:
1) Does legislative history suggest that there should be?
2) How important is it that there be a private right to sue?
3) How strong is the federal interest?
4) Do we need FCs expertise to litigate this issue?
POLICY: SC are often good place to litigate both. SC also capable of interpreting federal law.
Substantial Federal Interest Test: Does a state claim require interpretation of federal law? (Grable) If so,
is the federal interest implicated substantial"? (Gunn)
1) barring any global ramifications of the federal government
2) Gunn was a legal malpractice case that had a tiny ingredient of patent infringement. It was limited to two
parties and was not global.
3) The governments purse (collection of taxes) is an example of a federal interest of incredible magnitude.
POLICY: Federal Courts want to avoid a herd of lawsuits, flood of cases (need gatekeeper). States are
also capable and uniformity is achieved in the U.S. Supreme Court.
Harms: Dispute between P and D over copyright ownership. P brings action in FC predicated on 1338 - FC
has SMJ over copyright infringement. Court held no SMJ.
Holmes Test - a case arises under (pursuant to 1331) the law that:
1) creates the cause of action and
2) The law that provides the remedy
Court held the dispute was not copyright infringement but a question of contract law = no FJ over SM
If the law creating the cause of action is not federal = no federal question jurisdiction.
Even though the claim arises under state law, it may arise under federal law if the complaint discloses a
need for determining the meaning or application of such law (case her does not do) - asserting a claim
requiring construction of the act (Smith).
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Merrel Dow: P sues D for negligence. Claim is predicated on failure to comply with the federal statute
regulating drug labeling. Federal question jurisdiction? No.
The claim did not arise under federal law. It was a state negligence suit.
There is no explicit private right of action. D would have to argue an implied private right of action under
the federal statute to establish a federal claim to get into FC (Mottley). However, court held Merrel Dow did
not meet the standards for implying a private right of action (a good arg though).
D argues Smith as precedent. Court rejects this as a valid argument (does not overrule it). They say the
application of Smith here is too broad and must be narrowly interpreted - Smith applies only to incredibly
touchy cases as to the application of federal law that it can go to FC (the case here does not meet that
test).
The court didnt accept Ds policy argument of uniformity in the law. That there is FJ on the in order to
ensure uniform interpretation and application of a federal statute. - Court was not swayed by this. They held
that Congress will clarify through legislative provisions.
Diversity of Citizenship - 28 USC 1332
1) Parties are citizens from different states.
a) Complete Diversity - there is no DOC if any P is from the same state as any D. (Minimal
diversity is allowed in certain cases ex: class action suits.)
b) The citizenship of an individual - a US citizen is a citizen of the US state where he is domiciled -
there is only 1 domicile - (changing domicile, must affirmatively change domicile = physical
presence + form the intent to make that your permanent home)
c) The citizenship of a corporation (1332(c)(1)) - a corporation is a citizen in all states where the
corporation is incorporated and where it has its principal place of business. PPOB (there can only
be one) - this is where the manager directs, controls and coordinates corporate activity. The
nerve center.
d) Citizenship of businesses that are not corporation - use the citizenship of all of its members.
2) Amount in controversy
a) The amount must exceed $75k
b) Whatever the P claims will govern unless it is clear to a legal certainty that he cannot recover
more than $75k. (ex: if there were a statute limiting the amount of recovery)
c) Aggregation - where we must add multiple claims to get over $75k. We aggregate the Ps claim of
one P vs. one D. you can aggregate the claims and they can be unrelated claims. However,
cannot aggregate if there are multiple parties on either side (one P vs. 2 Ds). with a joint claim
(one P sues multiple Ds on one claim for over $75k, just joint liability)- use the total value of the
claim. And the number of parties is irrelevant.
Supplemental Jurisdiction - 28 USC 1367
Supplemental Jurisdiction - when P adds a claim to his complaint that lacks an independent basis for
federal jurisdiction to a claim that has an independent basis for federal jurisdiction.
There must be SMJ for every claim one brings into federal court (DOC or FQ). If it does not meet FQ
or DOC, might still be able to bring the claim into FC if supplemental jurisdiction applies. SJ says can
bring an additional claim into a case that is already in federal court. (It would never have been able to go
to FC on its own.) Consider SJ from an efficiency perspective.
28 USC 1367(a) - imposes limitations on what types of state claims can be attached to a federal claim
under SJ. They must meet the Gibbs test/constitutional test.
28 USC 1367(b) - imposes a further statutory restriction on cases that have FJ solely on DOC. There is
no SJ over certain claims - FRCP 14 (third party impleader), 19 (joinder of parties), 20 (permissive
joinder) or 24 (intervention) - brought by the plaintiff + DOC as sole basis for FJ
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POLICY: P chose the forum with all its restrictions, not D! We dont want to penalize D, we want to allow
him to indemnify himself. (Possible arg: what if he removed to the FC?)
Section 1367(c) Is there a discretionary basis for denial of jurisdiction? (Gibbs)
1) State Claim Predominates - Does the state law claim substantially predominate over the federal claim
(e.g., the bulk of the evidentiary showing will relate to state issues; the federal claim is minor compared
with state claims)?
2) Novel State Issue - Will the federal court have to decide sensitive or novel issues of state law?
3) Federal Claims Dismissed have the federal claims been dismissed? Will federal issues be resolved
early on, leaving only state claims to be decided? Is it really a state claim disguised as a federal claim?
4) Other Circumstances are there other exceptional circumstances that would suggest that the
supplemental claims should not be heard in federal court/ together with the federal claims (e.g., jury
confusion)?
2 Steps:
1) Does 1367(a) grant supplemental jurisdiction over this claim. The answer is yes if it meets Gibbs test -
a common nucleus of operative fact.
2) Does 1367(b) take away supplemental jurisdiction? This limits SJ application. This applies only in DOC
cases - cases that got into FC under DOC and 1367(b) will kill SJ only under claims brought by
Plaintiff - not by D. in the statute theres a list of claims brought by P that are removed under SJ.
Gibbs: P had a state claim and a federal claim based on the same facts. He was awarded damages for the
state claim but the federal claim was dismissed. Is there FJ anyway under supplemental jurisdiction?
Gibbs Test - There is SJ if the claims arise from a common nucleus of operative facts. Theres one set
of facts for 2 separate claims. Analyzes SJ from a functional perspective (as opposed to Hurns), whats
more efficient? Constitutional basis: defines case in Article 3 as a common nucleus of operative fact (very
broad meaning).
Gibbs met the Gibbs test. There is a distinction between a federal claim ultimately failing and bringing a
claim that is federal. P came in with a federal claim even though it was dismissed.
Owen: Is an independent basis for FJ necessary for an impleader action? Yes. There was no longer DOC.
There must be complete diversity for DOC jurisdiction. (wouldnt be able to name both Ds as co-Ds.)
There is no argument for supplemental jurisdiction bec DOC (the basis for FJ) was destroyed. The court
does not want to allow FJ on basis of DOC when there is no DOC - would be a disregard of the
congressional statute 1332.
Court sympathizes for D - was dragged into court w/o a choice as opposed to P - who chose the federal
forum with all its limitations.
1367(b) does not bar the case from being heard bec the impleader claim is brought by the defendant and
not by plaintiff.
 12

Removal Jurisdiction - 28 USC 1441

Removal Jurisdiction - a procedure that allows a claim filed in state court to be transferred to federal
court by the defendant. (congressionally enacted statute, not in the constitution)
1) Only the defendant has this right (bec P consents to the forum by bringing suit there)
2) Primary requirement for RJ: the federal court would have had original jurisdiction had it been brought
there initially. There must have been concurrent jurisdiction.
3) Suit can only be removed from state to federal and not federal to state.
4) 1441(b) - Exception: (applied only to DOC cases) cannot remove a DOC case if any D is a citizen of the
forum - this is the in-state defendant rule which blocks removal. The in-state defendant rule only applies
to DOC and not FQ cases.
5) Remove only to the federal district that embraces the state court where the case was filed ex: (brooklyn
only to NY FC)
RJ Justification:
1) Litigant Equality - protects the defendant from a local bias
 13

The Erie Doctrine

Erie: Federal courts are required to apply state substantive law in DOC cases (common law + statutory
law). If it is not a substantive issue, dont have to apply state law.
It isnt of federal concern whether the applicable law is statutory or common law. The C doesnt confer such
power to the FC.
There can even be an Erie conflict with PJ if the statute underlyingly creates its own PJ rules - which it can
do bec PJ is all common law, not codified. Ex: dismissal of non-resident even if PJ can be asserted over him.
Federal Common Law is not dead. However, cannot overstep their bounds by taking the place of congress
and creating a law when there is no congressional statute. The FC has the power but need a ticket in:
1) Constitution - an interpretation
2) Congress - where congress declares their intent of a federal interest. Perhaps a gap in a
congressional statute (ex: Mottley implies well pleaded complaint rule).
Policy Reasons of Erie:
1) Discrimination - two sets of laws that can apply in a DOC case leads to disuniformity in the law.
2) Forum Shopping - courts want to avoid people choosing a more favorable choice of law. (ex:
taxicab case - moved place of incorporation to = DOC and get into FC for a more favorable law.)
 14

3) Respect State Policies - states should be able to fashion their own agendas according to their law.
FC should respect state interests. Even if FC have a ticket in to fill in a gap of a congressional
statute, should consider if doing so would respect state interests.
Guaranty: Cases litigated in FC solely on the basis of DOC, the outcome should be substantially the same
as it would be in state court. It is just another tribunal, not another body of law.
If the state law is substantive = state law applies
If the state law is procedural = FC are free to apply their own procedural laws
Statute of Limitations (Source: state statute) vs. Doctrine of Laches (Source: judicial doctrine). (If there
were no doctrine of laches, you can argue that there should be one. You can be the first to start the
beginning of precedent. If youre trying to get around a state rule thats unfavorable to you, bring up an Erie
conflict. If there is none, create one.)
SOL is a grey area of substantive/procedural. So, apply the outcome determinative test.
Outcome Determinative Test: If theres a big disparity, if the outcome would be significantly altered, in the
application of federal and state laws (even procedural), state law applies. (This upholds policies of Erie -
forum shopping, discrimination.)
Byrd: Issue in DOC case to apply state law - determined by a judge or federal law - determined by a jury
(pursuant to the 7th amendment - not a direct constitutional command, just in the shadows. Otherwise C
would prevail).
Balance of Interests Test - weigh the interests of the state in having their state law applied v. federal
interests of applying federal law. (Is it embodied in a statute? Whats the purpose of the law? If its just
practical and now in FC, may not be a state interest in application. Ex: strict SOL bec. State courts are
cluttered.)
Applying federal law, wouldnt infringe on state policies - judge's determination is just a judicial practice,
not in any statute. (However, would infringe on Erie policies - forum shopping.) The court held the federal
interests outweighed the states and therefore, the federal law should be applied. And the outcome of a
judge/jury is not likely to be significantly different requiring a need to yield to state law.
1) Is it bound up with the substantive rights and obligations?
2) Are there any overriding federal policies? Any federal interest expressed?
Hanna: DOC in FC, FRCP 4(d)(1) v. MA state law. Court holds FRCP applies. OD test must be applied in
light of twin aims of Erie.
Outcome Determinative Test in Light of Twin Aims of Erie:
1) Discourage Forum Shopping
2) Avoidance of Inequitable Administration of the Law
To hold that FRCP 4 is outcome determinative, by that standard, every procedural rule is also and
would infringe on Erie policies if allowed.
The FRCP is constitutional - congressional power to enact.
The Source of the Conflicting Federal Law:
1) Constitution - always prevails (must be a constitutional command)
2) Federal Statute - a federal statute cannot be disregarded unless, its unconstitutional.
Test: Is the statute rationally classifiable as procedure? If yes, we follow the federal statute bec its
within congressional power to enact.
Q: What if the statute has both substantive and procedural goals?
A: If theres an overarching procedural aim, theyre entitled to apply federal law under the C, even if
theres an ancillary substantive issue.
Make sure the federal statute directly applies to the issue or that its broad enough to cover the
issue (statutory interpretation).
3) Federal Rule (2 Views)
 15

a) (Justice Warren) Federal rules are of equal status as a federal statute bec the rule was created with
the power of a statute - The Rules Enabling Act. Theyre making the rules under delegated authority
of Congress. If it is arguably procedural = constitutional
b) (Justice Harlan) Read REA as instruction that the rules can be applied so long as they dont alter
or abridge substantive rights even if they are rationally classifiable as procedural. (This imposes
a limitation on rulemakers - have less power than congress.)
4) Judge-Made Rules / Federal Practice
Test: Outcome Determinative Test in light of twin aims of Erie. Then proceed to Byrd balancing test.
Stewart: State law disfavors upholding forum selection clauses v. federal statute 1404 - transfer for improper
venue.
1404 doesnt expressly state anything about forum selection clauses. Would have to argue that the
statute is broad enough to apply to the issue.
Now theres a clash between state and federal law. Apply the constitutional test bec its a federal statute.
1404 meets the constitutional test = apply the federal statute and x uphold the forum selection clause.
Gasperini: State law standard of deviates materially v. federal standard shock the conscious in judge
reviewing jury awards of damages.
The conflicting federal law sources:
1) FRCP 59 (when you can override jury determination) - Justice Ginsburg wanted to avoid an Erie
conflict so avoids a broad reading of the rule. Rule 59 does not squarely conflict with state law
here. We can harmonize the two.
2) 7th Amendment - the federal shock the conscious standard is a shadow of the 7th amendment,
not a direct constitutional command.
3) Judicial Practice - this is the conflicting federal law - applies OD test in light of twin aims +
Balancing Interests Test - state vs. federal
ANALYSIS:
1) Is there a clash between a state law and a federal law?
2) Is the claim at issue based on federal or state law? Is this a diversity case? (Or even a federal
question case with a state claim riding the coattails of a federal claim?
a) If the claim is based on federal law there is no need to conduct an Erie or Hanna analysis; apply the
federal law.
b) If the claim is based on state law, an Erie/Hanna analysis will be necessary to determine whether
federal or state law applies to a given issue.

3) Is the issue before the court potentially covered by a Federal Rule of Civil Procedure or federal
statute (big r rule) as opposed to an uncodified federal practice (small r rule)?
Test for statute = is it constitutional? Rationally capable of being classified as procedural.
If there is a big r rule in the picture, proceed with the following analysis:
1) Is the federal directive on point? Is the Federal Rule intended or designed to govern the issue at
hand such that the rules purposes would be served by applying it? If it is read in its plain and
ordinary meaning does the federal directive have to clash with state law or can it be read as not to
apply?
a) If it is applicable, proceed with the next question. If it is not applicable, the determination of whether
to apply state law must be made with reference to the Erie analysis.
2) Compliance with the Rules Enabling Act: Can the Federal rule be rationally classified as
procedural? (Hanna)
Justice Warren: If the Rule is bound up in a book called the FRCP, we should give it deference and
it is probably procedural.
 16

Justice Harlan: Does the federal Rule affect primary conduct that the state has autonomy to
regulate? Does it abridge, enlarge, or modify any substantive right? Or can it fairly be
classified as a procedural rule?
If the rule is deemed procedural, federal law stands. If the rule is deemed substantive, then it is
invalid. Proceed with the Erie analysis to determine whether the federal court remains free to craft
its own judge made rule to resolve the issue at hand in the face of a competing state rule (Shady
Grove). Throw in sentence about how the Court has never invalidated an FRCP.
If there is a judge-made law at stake, the federal practice will have to be evaluated as follow:
1) Is the federal directive substantive or procedural?
Harlan says that primary conduct is reserved for the states. Scalia says that states defined their
rights but now how they are enforced. If it is a matter of enforcement, then it is procedural.
2) Modified Outcome Determinative Test: Would ignoring the state law implicate one or both of the
twin aims of Erie?
a) Forum Shopping Encouraged: Will it cause parties in the future to flock to federal court? (taxi
cab) Is forum shopping grossly overstated?
b) Inequitable Administration of the Laws Likely: Would application of the federal legal rule result
in substantial variations between outcomes in state and federal courts? (Hanna had a case in
state court but not in federal court)
If the answer to both these questions are no, then neither of the twin aims of Erie are implicated
and the federal common law rule should be followed. If the answer to any one of these
questions are yes, proceeded with the Byrd balancing approach to determine if there are any
countervailing federal policies that warrant application of the federal legal rule notwithstanding its
promotion of forum shopping or inequitable administration of the laws. (For purposes of the exam,
proceed with Byrd anyways because there is more than one argument)
Byrd Balancing Approach: outcome determinativeness must be evaluated against the substantive
policy interests furthered by the respective state and federal practices.
a) State Substantive Policy Furthered? Is the state practice bound up with the definition of the
rights and obligations of the parties, such that the practice furthers some substantive state policy?
If yes, it must be balanced against any countervailing federal policy that would outweigh the state interest.
If no, the presence of the federal policy that will be furthered by application of the federal rule will allow the
court to ignore the state practice.
b) Countervailing Federal Interest? Does the federal legal rule promote an important federal
substantive policy interest (ex: right to a jury, due process) that outweighs the significance of the
policy underlying the state legal rule?
If yes, follow the federal rule.
If no, if there are only slight or no federal substantive policy interests at stake compared to the state
interests, follow the state legal rule.
The countervailing federal interest every single time is the federal interest in uniformity in its laws and
protecting the Federal Rules of Civil Procedure. Strong federal policy in the 7th amendment.
Does the state have any interest in exploiting this rule? Do they care what goes on in a federal court?
(Think of Byrd and Gasperini)
POLICY CONSIDERATIONS: In the Rules Enabling Act, Congress granted the federal court the power to
have procedural laws on the condition that they can not abridge, enlarge, or modify substantive right.
Justice Brandeis, in Erie, said that no one doubts the federal courts power to have their own procedural
laws. The whole doctrine is rescuing the FRCP have to strike a balance of the interests that weigh
heavily on both sides. All the power that wasnt for the national entity was reserved for the states (Article 1).
 17

Huge policy consideration is that we want to preserve state power but also want to preserve the FRCP.
Reference which part of the circle you are referring to; outer, inner.

Venue - 28 USC 1391

Venue must be challenged initially otherwise, you waive your right to do so - Rule 12(h)
One can consent to venue (forum selection clause)
Do not have to satisfy 1391 - removal actions, supplemental claims, if there is a special venue statute.
Test: (1 or 2 must apply. If neither do, go to 3 - fallback provision)
1) 1391(b)(1) - venue is proper in the district where any defendant resides
2) 1391(b)(2) - venue is proper in any district where substantial part of the events/omissions giving rise to the
cause of action occurred.
3) 1391(b)(3) - if proper venue doesnt exist based on 1 and 2, venue is proper wherever any D can be subject to
PJ in the action.
1391(b)(3) can only be used when 1 and 2 do not provide any venue. If they provide a venue, even if its not
the one you want, you may not refer to the fallback provision.
1391(b)(3) can be used when all the Ds do not reside in same state and all the substantial parts of events
occurred outside the US.
28 USC 1404 - Transfer when the claim is properly filed
1) For the convenience of the parties and witnesses
2) In the interest in justice
3) or all parties consent to alternate forum
Transfer only when couldve been brought there originally (PJ and Venue)
1404(a) - can be used to transfer when a suit is brought in a different court than the agreed upon forum.
 18

In DOC actions, the applicable state law follows the transfer and is applied in the court where the case is
transferred to - provided the transfer occurs under 1406(a). If federal law applied, transferee court isnt bound
by transferor court's interpretation. POLICY - Should not disrupt Ps choice of forum (Van Dussen).
When federal law applies, however, most courts hold that the receiving court need not adhere to
interpretations of federal law that would have been binding on the transferring court but rather must apply
federal law as it exists within the receiving jurisdiction.
28 USC 1406 - Transfer when claim is improperly filed
If venue is improper, D can move to dismiss. However, the court has the authority to dismiss or transfer to a
proper venue (Piper) if deemed to be in the interest of justice.
PJ is not required for a 1406 transfer.
This only applies within the federal system. Cannot transfer from state to state.
The law to be applied is the law of the transferee court. Not just a change in courtrooms, but change of law.
Forum Non Conveniens
FNC is a Judicial Doctrine - permits dismissal of a case on the grounds that practical factors indicate it
should be heard in another court and that court is outside of the same judicial system. (1404 and 1406 are for
transfers in the same system)
1) There must be an adequate alternative forum available - the applicability of a less favorable law will not
deem a forum inadequate for FNC purposes (Piper).
2) There must be a showing that interest of convenience to the parties and certain public interests argue in
favor of an alternate forum (location of events, location of witnesses and evidence, applicable law, ability to
compel others in the action - witnesses or parties)
POLICY: we dont want disrupt Ps choice of forum. It may be overcome only when the private and public
interest factors clearly point towards trial in the alternative forum.
Public & Private Interests do private and public interests weigh in favor of having the case heard in the
alternate forum? Gulf Oil v. Gilbert.
Private Interest Factors:
Location of the events giving rise to the case;
Availability of compulsory process for attendance of the unwilling;
Ability to implead other parties in the court;
Ability to take a view of premises involved in the dispute;
East and cost of access to sources of proof, which depends on the location of relevant witnesses and
documentary evidence;
Enforceability of judgment if one is obtained.
Public Interest Factors:
Administrative difficulties flowing from court congestions;
Local interest in having localized controversies decided at home;
Interest in having the trial of a diversity case in a forum that is at home with the law that must govern the
action;
The avoidance of unnecessary problems in conflict of laws;
Unfairness of burdening citizens in an unrelated forum with jury duty.
Piper:
Every state has a choice of law doctrine - applies only state vs. state and not state vs. federal - Erie). COL
doctrine would indicate if the state has an interest in litigating or not.
 19

Pleadings
Dismissal at the Pleading Stage
1) No relief for such a claim exists - FRCP 12(b)(6)
2) There is no factual basis for the claim - the law gives relief but your facts dont entitle you to that relief -
FRCP 12(c)
FRCP 8(a) Notice Pleading Standard - requires a short and plain statement of the claim to provide D with
fair notice of the basis of the complaint.
The Answer:
1) Denials - Lacks knowledge or info sufficient to form a belief about the truth of an allegation
2) Admission - after an admission, can move for summary judgement bec no dispute of facts. Or can make an
affirmative defense.
There may be implicit admissions - if the party neither denies nor admits the allegations in the answer,
they will be deemed as admitted - FRCP 8(b)(6)
3) Defenses
4) Counterclaims
General Denial - should be avoided bec leaves open the possibility that the allegation may be true in a
slightly different respect (Zielinski).
Affirmative Defenses - D bears the burden proof and must plead them in their answers. FRCP 8(c)(1) -
sets out a list of affirmative defenses that must be pleaded. If the AD is not plead, ay not be able to
introduce evidence of it later - it would ambush the P = unfair surprise. If no unfair surprise or prejudice
would result, court may allow evidence of AD even though not plead.
Amendments - any change to any part of the pleading.
 20

FRCP allows amending once as a right if within 21 days and after that, need courts permission (liberally
granted), unless other party consents in writing. Court will grant amendment when justice so requires. -
discretion to the court. If it would prejudice the adverse party (ex: made at a late time that the adverse party
wouldnt have adequate preparation time, party was previously aware of info and failed to disclose it,
intentional delay, bad faith), the court will deny it.
Will the amendment relate back to the time of original filing of the pleading? FRCP 15(c)
1) If the SOL applicable allows relation back, it will relate back and/or,
2) FRCP 15(c)(1)(b) - relation back is allowed if the claim or defense being raised by the amendment arose out
of the same conduct, transaction or occurrence that was set forth in the original pleading or,
3) If the amendment seeks to change/add a party to the action after SOL expired, will have to
a) Satisfy 15(c)(1)(b)
b) FRCP 4(m) -party to be brought into action received such notice of the action that it will not be prejudiced
on defending on the merits within 120 days of the institution of the action.
c) The party to be added must have had notice that it was the intended party and it was mistakenly brought
against another party concerning the proper identity.
Conley:
Sufficiency of a Claim - a complaint will not be dismissed for failure to state a claim unless, apparent
beyond a doubt that P can prove no set of facts in support of his claim which would entitle him to relief.
Twombley:
Must plead facts showing plausible entitlement to relief. The facts must be suggestive of liability rather than
simply consistent with it. Plausible to permit a reasonable inference of Ds misconduct - not probability.
One cannot just state elements of the claim but must include theories on how to prove such elements.
Justification: cost-benefit analysis - from an economical perspective, makes sense to tighten pleading stage.
Not too burdensome for P to allege a big set of facts.
Iqbal:
Twombly is not limited to antitrust cases.
Need a set of facts maintaining plausibility and not just a conclusory allegations.
Plausibility is needed at the pleading stage in order to survive an MTD. Facial plausibility is when P pleads
factual content that allows the court to draw a reasonable inference that D is liable. Whether or not a
factual claim exists.
Set aside all conclusory allegations and just based on the facts alone, decide if theres non-
speculative/plausible entitlement to relief under the substantive law.
Authority of USSC here: interpretation of FRCP 8 - showing that the pleader or its a federal
practice/judge-made law (can be overturned).
Zielinski:
Equitable Estoppel - D is estopped in denying (generally) inaccurate statements which wouldve deprived P
of his right of action and to prevent a party from taking advantage of SOL.
There were multiple occasions when P couldve learned the truth - of the correct identity of the party, but D
prevented them from doing so.
Surowitz:
Cannot construe FRCP to summarily dismiss valid cases. It would prevent unsophisticated litigants from
bringing suit.
The FRCP should be understood in light of its purpose - see if theres a good faith effort here.
P isnt required to verify the complaint on the basis of her own personal knowledge if shes been advised by a
competent individual that the allegations are true.
Beeck:
If D seeks to amend (not as a right anymore) and not in bad faith, amendment should be granted.
 21

However, if SOL expired, will the complaint relate back when name the proper D? Refer to FRCP 15(c).
Summary Judgement
A judgement entered before trial when there is no factual dispute and thus not warranting a trial.
There must be no genuine dispute as to any material fact to be entitled to a judgement as a matter of law.
Material Fact - any fact that is essential to establishing an element of the claim.
MSJ differs from MTD bec the facts that are alleged are established as facts bec of supporting evidence.
Adickes:
One cannot make a naked MSJ. need some evidence to back up your motion.
Yes, P has the burden of proving his case however, moving party has the burden of production showing
their entitlement to MSJ. Celotex doesnt interpret this to mean evidence needs to be provided. Just need a
showing/pointing out.
Celotex:
Burden of Proof and Production - the moving party bears the initial burden of production - to show there is
no factual dispute. But if the nonmoving party would bear the burden of proof at trial, that party bears the
burden of proof to support its claim in the face of summary judgement.
The moving party need not produce evidence supporting their motion. They can just refer to the evidentiary
record and how it fails to support the non movant's claim. Instead of proving there is no factual dispute, just
prove that the nonmovant cannot support its claim that there is a genuine factual dispute.
If nonmovant raises any affirmative defenses, D bears the burden of proof to those.
After movant establishes there is no genuine dispute of fact, the non movant can only bring in evidence to
show otherwise and can no longer just allege the facts.
Anderson: Standard of Proof
In an MSJ, the judge must be guided by the substantive evidentiary standard the jury will have to use at trial.
Whether it be a preponderance standard or a convincing standard.
The party bearing the burden of proof in a MSJ, will have to provide evidence of sufficient quantum to satisfy
the evidentiary burden that would be required at trial.
Matsushita:
Courts can disregard supporting evidence thought to be unconvincing or evidence that fails to rule out
alternative, more plausible lawful explanations for the challenged conduct.
Test: whether a rational jury could find for P given the burden of proof of P.
Court is making inferences / common sense assumptions based on the quality and quantity of evidence
submitted by P.
 22

Res Judicata - Claim Preclusion

3 Requirements:
1) The claim must fairly be considered part of the same claim as was involved in the prior action. The claims
need not be identical. Claims are related if they arise from the same transaction or occurrence or a
series of connected transactions.
Test: Claims from the same factual circumstances. Its irrelevant if the legal theory is different now.
As long as they could have been raised in the prior suit, they will be barred from litigating.
2) The party invoking preclusion and the party against whom preclusion is being invoked must have both been
parties in the original action.
A Party in Privity - if a party wasnt a party in the original suit, it can still be barred if its a party closely
related to one of the original parties. Ex: Representation in the Prior Action - closely related that ones
interests were represented in the prior action.
3) Only claims that have been reduced to final judgement on the merits can have a preclusive effect on
subsequent actions. (A dismissal is not on the merits. SJ, default, settlement etc. is on the merits. A statute
of limitations dismissal is grey area of whether its merits - some jurisdiction will hold its substantive rather
than procedural.)
Collateral Estoppel - Issue Preclusion
Bars issues that were actually litigated in a prior action and were essential to the judgement.
This involves issues, not claims. CE can still apply on a totally unrelated claim. The samesness of the
claims doesnt matter, but whether the issue has already been raised.
CE can only preclude relitigation of issues and does not bar issues that couldve/shouldve been raised.
4 Requirements:
1) The parties must be identical or in privity with the parties in the original action. Exception: offensive
non-mutual CE.
Offensive Nonmutual Collateral Estoppel -
 23

a) The P could not have had a wait and see approach by failing to join prior action when they
couldve.
b) The party to be bound by the preclusive effect must have been sufficiently motivated to litigate in
the prior action.
c) There may not several inconsistent determinations on the issue - would result in unfairness by
picking one that would adversely affect the party preclusion is being invoked against.
d) This a one way street - a party cannot invoke preclusion against a nonparty. The party that is
bound by issue preclusion must always be identical/privity to the party of original suit.
2) Identity of Issues - the issue being precluded must be identical in all respects. Similar or transactionally
related issues will not preclude one another. New evidence, legal theories or facts will not enable a party
to overcome the preclusive effect.
3) The issue must have actually been litigated and determined. If was just a default or a settlement, it will
not have preclusive effect bec it was not raised and litigated. It was just determined.
4) The resolution of the issue in question must have been necessary and essential to the judgement.
Policy: The losing party may not have had a strong incentive to litigate it fully (Rios)
Test: Whether a different decision regarding the issue would have affected the outcome of the case.
If no, the issue was not necessary to the judgement and does not have preclusive effect.
If unclear, no preclusive effect can be given.
Policy of Issue and Claim Preclusion - The promotion of finality and repose and the prevention of
duplicative litigation.
Every jurisdiction have their own definition of a claim (broad or narrow) - look to the definition!
Federal Definition of a Claim - The facts surrounding the occurrence which operate the claim and not
the legal theories - broadest one, the FRCP aim is judicial efficiency. This is a judge-made law.
Cardinal Principle - every man has their day in court. Due Process.
Extensions and Exceptions:
1) As If Parties - parties who are in privity, parties who are actually controlling the litigation (ex: financing
the lawyer, share a lawyer).
2) Adequate Representation - implicitly operating under this assumption. Not a formal class action suit
(Mullane).
3) Virtual Representation - an opportunity which you were able to come and defend yourself and you
failed to do so. Sometimes the onus is on the outsider to join in if they dont want to be disadvantaged
(Wilks).
Factors in Defining a Claim:
1) Conceptual/abstract thinking - distinct difference in property and personal injury.
2) Efficiency perspective - so much overlapping proof, facts, same story.
Rush: Can a personal injuries claim use issue preclusion on issue of negligence which was already
decided in a property damage suit arising out of the same accident? Or is P precluded from bringing the
claim altogether? Must have P brought both claims together?
Court abandons precedent and adopts a broader definition of a claim - stare decisis is never absolute.
Is P screwed? Not necessarily. He can argue that the new definition should be prospective and not
retrospective - would have to make a strong argument bec courts dont like to do this.
Cromwell: Issue of good faith purchaser on one bond is not binding to another. Independent claims.
Logic of Issue Preclusion - when applying the preclusive effect to an issue, basically saying that it could
not have been decided any other way, no need to relitigate.
Negotiable Instruments - a more narrow definition of a claim is adopted since they can be freely
negotiated and bought and sold in different transactions.
Russell:
 24

General Jury Verdict - cannot give issue preclusion bec we dont know the grounds for the verdict. Given
the black box of the jury, cannot conclude what was decided when there were 2 alternatives.
Rios: Court holds P and D both negligent, D wins bec P is barred bec of CN. P brings a subseq lawsuit. Is
issue preclusion allowed against Ds negligence finding?
Efficiency Standpoint - why relitigate? We want to avoid inconsistent judgements.
Fairness to D - D didnt properly litigate rebutting his negligence bec had a huge case of CN against P =
no incentive to litigate = not essential to the judgement
An adverse finding against a winning party cannot be given preclusive effect - had no reasonable
incentive to litigate or opportunity to appeal.
It has been held that the better view (Restatement) is not to give preclusive effect to a decision that
is based on multiple grounds that was given in a special verdict - why not? Bec theres no incentive
to appeal bec the judgement is resting on 2 grounds - so even if sure can appeal and win on one
grounds, will lose on the other = insufficient incentive to litigate = we shouldnt give preclusive effect.
Bernhard:
Defensive Issue Preclusion - D (a new D) uses this as a shield to ward off the case bec it was already
litigated. P is bound by the adverse finding against him.
Test: was the issue already litigated / full hearing? Yes. DIP. Dont look to mutuality of estoppel. Only care
about the due process limit here.
P here, was wearing two different hats - victim and executrix. Representing same interests = same party.
Parklane:
Offensive Issue Preclusion - New P using IP as a sword. After the issue was already litigated with
another P, you come in and say - D youre already bound by the issue.
Doctrine of Discretion - going to leave it to trial courts discretion to decide if OIP is fair - joinder
disincentive /P gaming the system, insufficient incentive to litigate, other inconsistent judgements out there.
POLICY: How do we know the issue being used as OIP is an outlier or not? We dont want dramatic
inconsistencies. What about the P who waited to see and didnt join the action - discourages joinder.
How much do we care about the court producing consistent judgements?
Attacking the Preclusion Doctrine - there is a presumption of imperfection in lawsuits. Would have to
show not something that just amounts to an error, but a fatal defect of unfairness = will cause a
breakdown.
Wilks: Black and white firemen lawsuit.
P says we never had our day in court - no adequate representation and werent an original party. However,
you had notice of the lawsuit and failed to intervene (permissive joinder is really a compulsory joinder in
disguise). USSC said you are not the rulemakers and were not putting the onus on the outsiders = no
preclusion here. Doesnt agree with the virtual representation theory. We dont want to allow the courts
to expand preclusion rules beyond what the rulemakers provide.
Hart: Plane crash, new P wants OIP. The rendering court has mutuality doctrine - no OIP and the enforcing
court allows OIP. Which law applies?
28 USC 1738 - Full Faith and Credit - must respect the rendering courts judgement of another sovereign
Cant give less preclusive effect to the judgement, that would violate FFC. However, can give more
preclusive effect and allow OIP. Applying OIP is still giving FFC to rendering court.
POLICY ARGUMENTS: (rendering court vs. enforcing court)
1) Protecting the Litigants - they shaped their litigation in the rendering court in light of the rendering
courts preclusion rules.
2) FFC - only demands we give FFC to the judgement, not the procedural rules. Can therefore apply
preclusion rules of the enforcing court.
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3) Rendering Court Setting the Scope of its Judgement - theres an implicit notion that the rendering court
operates against the background of its own preclusion rules. It would be an infringement on their
sovereignty to say you can no longer control it after rendered.
Generally, most hold the rendering courts preclusion rules should be applied. Hart is the outlier that
says no, its a matter of procedure, and were applying our own procedure.
Even if a state court is applying a different states preclusion rules bec of the choice of law, they are still the
rendering court and apply their own preclusion rules. Preclusion rules dont follow with the choice of
law.
Semtek: Suit #1 was dismissed on the merits in FC sitting in DOC. Which preclusion rules were applied -
federal or state? This matters bec in suit #2 we need to see which preclusive effect to give the case.
Why are we looking at federal rules? The FC was sitting in DOC - applies the rules of the state its sitting in
- implication of Erie, would promote forum shopping.
A judge-made law was made that stated - when FC is sitting in DOC, apply state preclusion law of the
state which you are sitting.
In DOC, the FC is pretending to be a state court - pretend all the way including determining the scope of
the judgement.

Joinder
Permissibility of the Claim Is the joinder of the claim permitted under the Rules?
REMEMBER: We also have to assess each claim for subject matter jurisdiction! (1) What is the claim?
(2) Is there diversity? (3) Is there federal question? (4) If neither diversity nor federal question applies, is
there supplemental jurisdiction under 1367(a) and 1367(b)?
FRCP 18 - Joinder of Claims: P can assert as many claims (related or unrelated) against D. This applies
to cross-claims, counterclaims, third-party claims. Claims must have independent SMJ and venue. (Only
related claims not raised will later be precluded.)
The rules do not differentiate bet compulsory or permissive claims for P - bec res judicata already does that
Counterclaim - claims made against the opposing party (diff sides of the V).
FRCP 13(a) - Compulsory Counterclaim - a claim that the defending party has that arises out of the
same transaction or occurrence that is the subject matter of the opposing partys claim.
There will generally be supplemental jurisdiction bec claim is arising out of same t/o. In the event that
compulsory claims lack an independent basis for SMJ, refer to 1367(b).
T/O Test: Are the claims logically related? Are the claims offshoots of the same basic controversy bet the
parties? If litigated separately, would there be a result of substantial duplication of time/effort by the
courts and parties and similar evidence?
When doing the test of t/o, can see if it would be barred by res judicata - arg that if preclusive effect under
claim preclusion, its compulsory.
1367(b) allows supplemental jurisdiction for compulsory counterclaims raised by D. POLICY: It
seems like D wasnt planning on bringing suit altogether, but now that hes in court, counterclaims. We are
not going to now penalize him - it would be a disincentive to not sue! We dont want to encourage
litigation.
POLICY: Judicial efficiency, minimizing burden of the litigants, duplicative litigation.
Under the Federal Rules of Civil Procedure, a claim arises out of the same transaction or occurrence in three ways
(from broad to narrow): historical overlap (story/same space and time); factual/evidentiary overlap; and logical
 26

relationship (conceptual/legal questions raised by the claims sought to be joined may overlap). Jurisdictions may
vary so we must test all three. (U.S. v. Heyward-Robinson Co)
If a compulsory counterclaim is not asserted, he is precluded from doing so in a subsequent action.
FRCP 13(b) - Permissive Counterclaims - claims that do not arise out of the same t/o. They need not be
raised. Will not be later precluded if not asserted.
If its a permissive counterclaim, proceed to 1367(b) to see if it has supplemental jurisdiction.
Cross-Claims: A claim brought by one co-party against the other. Same side of the V.
FRCP 13(g) - Cross-claims:
1) Cross claims are permissive and need not be asserted.
2) They are proper if they arise out of the same t/o + same subject matter as original action or
counterclaim against them.
3) They must arise out of the same t/o (LASA)
4) They must have SMJ. if meets the t/o test, will usually meet supplemental jurisdiction.
POLICY: Judicial and economic efficiency - duplicative litigation, let them battle it out once theyre in court vs.
We dont want P, the master of the claim, to become a bystander in other suits and have her lawsuit be
hijacked. Therefore the Rules generally define claims that can be brought in light of their relation to
plaintiffs original complaint against the defendant (U.S. v. Heyward).
FRCP 13(h) - Joining a Non-Party in Cross/CounterClaim: When its not quite an impleader action and you
cant cross/counterclaim them bec theyre a nonparty, they must be joined.
Must meet requirements of FRCP 19 or 20 (same t/o and common Q of fact or law).
This is used for - you know one of two people injured you but dont know which. Can join the parties to avoid
being potentially whipsawed - both blaming other D and youre left screwed with no recovery.
FRCP 20 - Permissive Joinder of Parties - Who may be joined in a case?
Joinder of Plaintiffs - are the Ps asserting a claim arising out of the same t/o and involve a common
question of law or fact?
1) Yes. If so, the plaintiffs may join together in a single action under Rule 20(a)(1)(A) and Rule 20(a)(1)(B).
2) No. If not, the plaintiffs may not join together in a single action.
Joinder of Defendants is the plaintiff asserting against the defendants a right to relief arising out of the
same t/o and involving a common question of law or fact?
1) Yes. If so, the plaintiff may join the defendants in a single action under Rule 20(a)(2)(A) and Rule 20(a)(2)(B).
2) No. If not, the plaintiff may not join the defendants together in a single action.
REMEMBER: Now we have to assess whether this case, with all these plaintiffs and defendants, can get into
federal court. We have to test for subject matter jurisdiction.
POLICY: We want plaintiff to steer the ship, but we dont want the defendant to be exposed to multiple
litigations.
FRCP 14 - Joinder of Nonparties is the party who is seeking to join a defending party?
1) No. If not, the party may not implead a nonparty into the action as a third-party defendant under Rule
14(a)(1). (However, look to Rule 19 to determine whether the party can seek compulsory joinder of the
party).
2) Yes. If so, is the party seeking to assert against the nonparty a claim that the nonparty is liable to the
impleading party for all or part of the plaintiffs claim against the defending party (contractual relationship;
indemnification implied by law; contribution)?
a) Yes. If so, the claim is proper and can properly be asserted against the nonparty under Rule 14(a)(1).
The non-party becomes a third-party defendant.
b) No. If not, the party will not be able to implead the nonparty into the action as a third-party defendant.
Rule 14(a)(3): P can assert a claim against a TPD as long as it arises from the same transaction or
occurrence as the basic case.
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Rule 14(a)(2)(D): TPD can assert a claim against the plaintiff as long as it arises out of the same transaction
or occurrence as the basic case.
NOTE: In a diversity case, Rule 14 can only be used when there is a state law recognizing such a right. These
statutes are legal devices, which imply in law a right of indemnity if one defendant has been singled out
among many tortfeasors. The fact that Rule 14 gives you a procedural device does not mean that one can
bypass the substantive restrictions of state law. Rule 14 is a procedural rule of efficiency. In Jeub v. B/G
Foods, Inc., this issue came up because the lower court misconstrued Minnesotas state law as barring
indemnification. However, said law was actually procedural in the sense that it allowed for
indemnification, just after the fact. Rule 14 does not create a legal relationship of indemnity that would be
substantive. Creating a right of indemnification that doesnt exist under state law seems pretty substantive.if
theres no recognized indemnity relationship, FRCP 14 does not come into play.
Contribution for joint tortfeasors creates a substantive indemnity relationship.
FRCP 19 - Compulsory Party Joinder/Necessary and Indispensable Parties Who must be joined in the
action? Must a nonparty or absentee be joined in an action under Rule 19?
1. Necessary Party Status is the absentee a necessary party under Rule 19(a)(1)? If we meet any of
these tests, the absentee is necessary and should be joined.
1) Availability of Complete Relief in the nonpartys absence, is the court able to afford complete relief
among those who are already parties to the action? (If we do not bring the absentee into this case, there is
going to be a whole bunch of litigation and the court cant wrap it up in one neat package). Rule 19(a)(1)(A)
2) Impairment to Absentees Claimed Interest would disposition of the action in the nonpartys absence
impair or impede the nonpartys ability to protect its claimed interest relating to the subject of the action?
(The absentees interest may be harmed if she is not joined). Rule 19(a)(1)(B)(i)
3) Threat to Existing Parties would disposition of the action in the nonpartys absence leave existing parties
subject to a substantial risk of incurring multiple or inconsistent obligations by reason of the nonpartys
claimed interest relating to the subject of the action? (The absentees interest subjects the defendants to
multiple or inconsistent obligations). Rule 19(a)(1)(B)(ii)
2. Feasibility of Joinder if a nonparty is deemed to be a necessary party, is joinder in the action feasible?
Personal Jurisdiction can the court obtain personal jurisdiction over the necessary party?
Subject Matter Jurisdiction will the joinder of the party deprive the court of subject matter jurisdiction
over the action or involve a claim over which the court will lack subject matter jurisdiction? Will the
nonparty destroy diversity?
Venue - is there proper venue over the party?
Indispensability of the Party if joinder of the necessary party is not feasible, should the court dismiss the
action in the partys absence? If we proceed without the absentee, the absentee may be harmed. But if we
dismiss the case, we might be robbing plaintiff of a forum (POLICY).
Note: This is a discretionary, balancing analysis that requires the weighing of potentially conflicting
considerations to reach a result. Thus, you should analyze each of these factors and then a reach a judgment
whether, in equity and good conscience, the action should proceed among the existing parties or
should be dismissed. Rule 19(b). If we dismiss, we call the absentee indispensable.
1) The extent to which a judgment rendered in the persons absence might prejudice that person or
existing parties;
The extent to which any prejudice could be lessened or avoided by:
2) Protective provisions in the judgment
3) Shaping the relief; or
4) Other measures;
Whether a judgment rendered in the persons absence would be adequate from the plaintiffs perspective; and
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Whether the plaintiff would have an adequate remedy if the action were dismissed for nonjoinder. (This
consideration ensures that we do not dismiss the case unless there is some other court where everyone can
be joined. Ordinarily, we will not dismiss under Rule 19(B) if this is not true.)
NOTE: Rule 19 motions can survive and dont have to be made at first appearance. However, if the motion is
made at a later point, the court may give little weight to the 19(b) considerations. (Provident Tradesmens)
POLICY: We want there to be res judicata for the parties. We dont want the parties to be subject to
multiple liabilities or inconsistent judgments. If the court dismisses the case for nonjoinder and the plaintiff
will never get relief for his injury - P is screwed. This argument worked in Bank of California v. Superior Court.
We want the judgment to be binding, but it cant be binding over an absent person. If absent parties arent
involved in the suit, even if they are not legally affected, they will be practically affected. The legal rights of an
absent party are not in theory affected by maintaining the action without them. In the end of the day, they
would always be able to either reclaim money or to argue that they were not parties to the initial
determination of who owned the proceeds of the estate and therefore they couldnt be bound by any judgment
that was made without them. However, they are practically affected because often the court will create a
change in status quo and now persons who thought they had something they cant realize their right
without defending against action or taking action. Practical impairments of rights rarely render dismissal
of action on the grounds that absent party indispensable in it of itself. For example, the person in the first
litigation can spend all of the defendants money before the second person has the opportunity to sue. We
want to avoid piecemeal litigation and multiplicity of suits. Think of the two Mrs. Warners!
Heyward - Robinson:
Interprets transaction and occurrence broadly. An absolute identity of factual background isnt necessary for
a logical relationship to exist.
They do this so the claim falls under compulsory counterclaim and suffices the supplemental jurisdiction test
as well. They did this for fairness concerns and from an efficiency perspective - didnt want P to have to
have 2 separate litigations and if didnt interpret broadly it would be a permissive counterclaim and flunk the
supplemental jurisdiction test 1367(b).
LASA:
If it ever gets too complex with all the motions, can make a motion for severance pursuant to FRCP 42(b)
Dissent: interprets the t/o narrowly - looking at it from a trial perspective. They have nothing to do with each
other and wouldnt make sense to try them together - very little overlap of factual or legal questions.
Counter to the dissent: FRCP 42(b) - can just severe! Its still a compulsory claim for the purposes of SMJ
and will just have two separate trials to avoid jury confusion. Will stay in FC if already there based on fairness
concerns - unduly burdensome to D to have to relitigate in SC.
Counterclaims and Cross Claims have to be determined under 1367(a) - same t/o or more broad -
common nucleus of operative fact. they must be riding the coattails of plaintiffs claim.
Proceed to 1367(b) if in FC on DOC - bars FRCP 14, 19, 20, 24 motions of plaintiff
Its silence on defendants means D has SJ under 1367(a). POLICY: Fairness to D - were giving them the
benefit of SJ bec they were dragged into court against their will.
Provident:
The onus is not on the D to come in to protect his interests. Burden iss on the parties inside the lawsuit.
Is the party being joined as a D or a P? Matters for purposes of 1367.
What if a party is a D and cross claims, and gets counterclaimed by the co-D, he is still a D. can argue that
being treated like a P now...weak though.

28 USC 1367 - Supplemental Jurisdiction

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a) Except as provided in subsections (b) and (c) or as expressly provided otherwise by Federal statute, in any civil action of which the
district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to
claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United
States Constitution. Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties.
b) In any civil action of which the district courts have original jurisdiction founded solely on section 1332 (DOC), the district courts shall
not have supplemental jurisdiction under subsection (a) over claims by plaintiffs against persons made parties under Rule 14,
(third party impleader), 19 (joinder of parties), 20 (permissive joinder) or 24 (intervention), of the Federal Rules of Civil
Procedure, or over claims by persons proposed to be joined as plaintiffs under Rule 19 of such rules, or seeking to intervene as
plaintiffs under Rule 24 of such rules, when exercising supplemental jurisdiction over such claims would be inconsistent with the
jurisdictional requirements of section 1332.
c) The district courts may decline to exercise supplemental jurisdiction over a claim under subsection (a) if
1) the claim raises a novel or complex issue of State law,
2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction,
3) the district court has dismissed all claims over which it has original jurisdiction, or
4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction.

1) Personal Jurisdiction
Can argue even if no PA, fairness concerns say yes PJ.
2) Subject Matter Jurisdiction - 1331 arising under
3) Diversity of Citizenship - 1332 - complete diversity + $75k. Owen v. Kroger
4) Supplemental Jurisdiction 1367- Does FQ apply to ALL Ds?
5) Venue 1391 - can waive your right. Dont need to satisfy for RJ, SJ, special
statute.
6) Transfer -1404, 1406 / FNC
7) Erie
Can argue no clash and the two can be harmonized (narrow reading). Still
continue with Erie.
8) Joinder
9) Res Judicata - want to achieve finality of judgement and consistent
judgements
10) Pleadings
11) Opportunity to be heard and Notice - adequate representation
12) What is the underlying goal of a law? Erie?
13) POLICY!!
14) USE EVERY FACT. EVERYTHING IS THERE FOR A REASON.