Mastering Civil Procedure

CAROLINA ACADEMIC PRESS

MASTERING SERIES
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Mastering Civil Procedure
THIRD EDITION

David Charles Hricik

MERCER UNIVERSITY
WALTER F. GEORGE SCHOOL OF LAW
 Copyright © 2017
David Charles Hricik
All Rights Reserved

Library of Congress Cataloging-in-Publication Data

Names: Hricik, David, author.
Title: Mastering civil procedure / David Charles Hricik.
Description: Third edition. | Durham, North Carolina : Carolina Academic
Press, 2017. | Series: Carolina Academic Press Mastering Series | Includes
bibliographical references and index.
Identifiers: LCCN 2017009731 | ISBN 9781611637342 (alk. paper)
Subjects: LCSH: Civil procedure--United States.
Classification: LCC KF8841 .H75 2017 | DDC 347.73/5--dc23
LC record available at https://lccn.loc.gov/2017009731

eISBN 978-1-53100-714-0

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Printed in the United States of America

For Abby, Alex, Houston, and Julian
 Contents
Table of Cases

Series Editor's Foreword

Introduction and Acknowledgments

Chapter 1 · Courts Decide Claims
Claims Roadmap
A. Lawsuits Begin with Clients
B. What Is a “Claim”?
C. Affirmative Defenses Compared to Claims
D. Destroying a Myth and an Important Note About Studying Procedure
Checkpoints
PART A
TO ANCHOR THE ACTION IN A FEDERAL COURT, A PLAINTIFF MUST PLEAD
ONE CLAIM WHERE (1) SUBJECT MATTER JURISDICTION, (2) PERSONAL
JURISDICTION, AND (3) VENUE ARE PROPER.
Chapter 2 · A Preview of Part A of This Book
A. The Three Requirements to Adjudicate an Anchor Claim: Subject Matter
Jurisdiction, Personal Jurisdiction, and Venue
Chapter 3 · The Foundations of Subject Matter Jurisdiction
Subject Matter Jurisdiction Roadmap
A. A Divided System of Government: States and the Federal Government
B. Power to Resolve a Claim: Subject Matter Jurisdiction
C. Which Law Applies Can be Distinct from Subject Matter Jurisdiction
Checkpoints
Chapter 4 · Federal Question and Diversity Subject Matter
Jurisdiction
Federal Question and Diversity Subject Matter Jurisdiction Roadmap
A. Do Federal Courts Have Power to Adjudicate the Claim?
1. Federal Question Subject Matter Jurisdiction under Section 1331
 a. Federal Question Subject Matter Jurisdiction
i. The Typical “Arising Under” Federal Claim: A Federal
Statute Creates the Claim
ii. Plaintiff's State Law Claim Necessarily Turns on a
Substantial Question of Federal Law
iii. Federal Question Jurisdiction if Federal Law Completely
Preempts a State Law Claim
2. Diversity Subject Matter Jurisdiction
a. Section 1332 Requires Complete Diversity and More Than
$75,000 Exclusive of Costs and Interests be in Controversy
i. Section 1332(a) Requires Complete Diversity
(a) Determining Citizenship of a Party
(1) When Is Citizenship Determined?
(2) How Is Citizenship Determined?
aa. A Natural Person Is a Citizen of His State
of Domicile
bb. Corporations Are Citizens of Both the
State of Incorporation and the State of
Principal Place of Business, Which Is Where
It Has Its “Nerve Center”
cc. Citizenship of Other Business Entities
dd. Representative Actions: Citizenship of
Real Party in Interest
ii. Section 1332 Requires More Than $75,000 in
Controversy
(a) When Is the Amount in Controversy Calculated?
(b) The Legal Certainty Test Applies to the Amount
Pled by Plaintiff
(c) Multiple Claims, Multiple Plaintiffs, and the
Amount in Controversy
(1) A Single Plaintiff may Aggregate Claims
Against a Single Defendant
(2) A Plaintiff Cannot Aggregate Claims Against
More Than one Defendant Unless the Defendants
are Jointly Liable
(3) Multiple Plaintiffs may not Aggregate Their
Claims Unless They are Pursuing a Unified
 Remedy
B. Must the Claim be Filed in Federal Court?
1. Claims Arising Under Federal Law
2. State Law Claims That Meet Diversity Requirements
3. The Discussion Here Applies to the First Claim and all Other
Claims but as to Additional Claims, if There is no Diversity or Federal
Question, Supplemental Subject Matter Jurisdiction may be Available
Checkpoints
Chapter 5 · The Foundations of Personal Jurisdiction
Personal Jurisdiction Roadmap
Checkpoints
Chapter 6 · Personal Jurisdiction: Consent, Long-Arm Statutes,
Minimum Contacts, and Fair Play
Personal Jurisdiction Roadmap
A. Generally a Claim-by-Claim, Defendant-by-Defendant Analysis Is
Required
B. Did the Defendant Consent to Personal Jurisdiction?
1. Did the Parties Contractually Agree the Claim Could or Must be
Filed in the Forum State?
2. For Corporate Defendants, is the Suit Filed in a State Where a State
Statute Required the Corporation to Consent to be Sued Over Any
Claim?
3. Operating a Motor Vehicle Consent Statutes
C. Without Consent: The Three Steps to Evaluate In Personam Jurisdiction
1. A Long-Arm Statute Must Authorize Service of Process
a. State Long-Arm Statutes Apply to Both State and Federal
Claims
b. Specific Federal Long-arm Statutes Govern Some, but few,
Federal Claims
2. If a Claim is Within the Reach of the State's Long-Arm Statute,
Assertion of In Personam Jurisdiction Must Still Not Violate the
Defendant's Due Process Rights
a. Did the Defendant, Individual or Corporate, “Consent” to
Personal Jurisdiction, Either by Operation of Law or by Contract?
b. Was the Individual Defendant “Tagged” with Process While
Present in the Forum State After the Suit was Filed?
 c. Due Process Requires Either Specific or General Personal
Jurisdiction Exist
i. General Personal Jurisdiction
ii. Specific Personal Jurisdiction: For State Claims and
Federal Claims Without Nationwide Service of Process,
There Must be Minimum Contacts Between the Forum State
and the Defendant; For Federal Claims with Nationwide
Service of Process, the Defendant Must Have Minimum
Contacts with the United States
(a) Purposeful Availment or Direction by the Defendant
Toward the Forum
(b) Relationship Between Claim and Contacts
(c) Defendant can Show that, Even if There are
Minimum Contacts, Assertion of Personal Jurisdiction
Would be Unfair
C. Special Issues in In Personam Jurisdiction
1. Which Contacts by a Corporate Defendant “Count”?
2. Does an Internet Website Count?
3. Rule 4(k)(2) and Foreign-Country Defendants
4. The Few Federal, Claim-Specific Long-Arm Statutes
ii. Specific Jurisdiction: “Sufficient” Contacts, a
Relationship between the Claim and the Contacts, and
Fairness
Checkpoints
Chapter 7 · In Rem and Quasi In Rem Jurisdiction
In Rem and Quasi In Rem Jurisdiction Roadmap
A. The Three Types of In Rem Jurisdiction
1. True In Rem
2. Quasi In Rem
a. Quasi In Rem Type 1
b. Quasi In Rem Type 2
B. The Same Standards for In Personam Jurisdiction Apply to In Rem
Jurisdiction
C. How Is Notice Given?
Checkpoints
Chapter 8 · The Foundations of Venue
Venue Roadmap
Checkpoints
Chapter 9 · Proper and Improper Venue
Proper and Improper Venue Roadmap
A. Determining Proper Venue
1. The Three Possible Proper Venues Under the General Venue Statute
(a) A district in which a substantial part of the events or
omissions giving rise to the claim occurred
1. Substantial Part of the Events or Omissions
2. What Does “Substantial Part” Mean?
(b) A judicial district where any defendant resides if all
defendants reside — or the only defendant resides — in
the forum state
(c) Venue Based on the Catch-All Subsection
2. Establishing Proper Venue Based on Specific Federal Venue Statutes
3. There Must be Proper Venue, or Pendent Venue, Over Each Claim
of a Plaintiff
Checkpoints
Chapter 10 · Removal: What Can the Defendant do if the Plaintiff
Filed in State Court a Claim over Which a Federal Court Would Have
Subject Matter Jurisdiction?
Removal Roadmap
A. The Foundations of Removal
B. When Is a Case Removable?
C. What Claims and Circumstances Make a Case Removable?
1. Removal on the Basis of Federal Question
a. Single Federal Claim in a State Court Complaint
b. Federal Claim Joined with Non-Removable State Claim in the
State Court Complaint
2. Removal on the Existence of a Removal-Type Diversity Claim
a. Citizenship of Fraudulently Joined Defendants Is Ignored
i. Fraudulent Jurisdictional Allegations
ii. No Possibility of Recovery
iii. Fraudulent Procedural “Misjoinder”
iv. The Trump Card: The No Forum-Defendant Rule
b. Determining the Amount in Controversy
 i. Plaintiff Pleads no Specific Amount
ii. Plaintiff Pleads Less Than $75,000 in its State Court
Pleading
iii. Plaintiff Seeks Injunctive Relief
D. Deadlines, Waiver by Conduct, and Procedure for Removal
1. Deadlines
a. The 30-Day Deadline
i. Initial Pleading: What Is “Receipt Through Service or
Otherwise”?
ii. Subsequent Papers: “Receipt”
b. One-Year Deadline for Diversity-Type Removal
2. Waiver by Conduct of Right to Remove
3. Procedure for Removal
a. Consent of All Properly Joined and Served Defendants
b. Required Filings
E. Plaintiff's Motion to Remand to State Court
1. Attorneys' Fees and Costs
F. Removed or Remanded: What Next?
G. Post-Removal Actions That Destroy or Create Subject Matter
Jurisdiction
H. Limited Appealability of Orders Granting or Denying Remand
1. Orders Granting Remand
2. Orders Denying Remand
I. Removal by Parties Other Than Defendants
Checkpoints
PART B
JUDICIAL RESOLUTION OF (1) PERSONAL AND SUBJECT MATTER
JURISDICTION AND VENUE; (2) THE MERITS OF A DISPUTE WITHOUT
DISCOVERY, WITH DISCOVERY BUT WITHOUT TRIAL, AND ONLY AFTER
DISCOVERY AND TRIAL; AND (3) APPEALS
Chapter 11 · A Preview of Part B of This Book
Chapter 12 · The Plaintiff's Pre-Suit Investigation Required by Rule 11
Plaintiff's Pre-Suit Investigation Roadmap
A. The Purpose of Rule 11 Is to Eliminate Frivolous Legal and Factual
Assertions in Filed Court Papers
B. Every Document Signed and Filed with a Court, Including the
Complaint, Is Covered by Rule 11
C. The Representations Implied by Rule 11
1. The Implied Representation of Reasonable Inquiry
2. The Other Four Implied Representations
a. No Improper Purpose
b. No Frivolous Legal Arguments, Claims, or Defenses
c. No Unfounded Allegations
d. No Unfounded Denials of Allegations
e. What Must be Investigated?
f. Examples With Explanations
Checkpoints
Chapter 13 · Pleadings: The Complaint
Complaint Roadmap
A. Historical Role of Pleadings
B. The Modern Limited Role of Pleadings
C. Requirements for Pleadings
1. Technical Requirements
2. Substantive Requirements
a. Short and Plain Statement of the Court's Jurisdiction
b. Short and Plain Statement of the Claim
i. Inconsistent Claims (or Defenses)
ii. Pleading Unsupported Allegations
iii. Rule 9(b) as an Exception
c. Demand for Relief
D. Who Must Be a Named Plaintiff and a Named Defendant?
E. Examples and Forms
F. Corporate Disclosure Statement and Civil Cover Sheet
G. Conclusion
Checkpoints
Chapter 14 · Preview of the Four Steps to Analyze Joinder of Claims
and Parties
A. The Anchor Claim
B. The Four Steps for Analyzing Joining Each Additional Claim Against
Each Party
Chapter 15 · Joinder Step One: Authority in a Rule for Joining the
Party or the Claim
A. Introduction to the Concept of Authority
Chapter 16 · Authority to Join Claims
Authority to Join Claims Roadmap
A. Joinder of Claims by a Plaintiff
1. Joinder of a Claim by an Existing Plaintiff Against an Existing
Defendant
a. Permissive Joinder
b. Mandatory Joinder of Claims by Plaintiffs
B. Joinder of Claims by a Defendant Against an Existing Plaintiff
1. Compulsory Counterclaims
2. Permissive Counterclaims
3. Impact of Rule 18(a)
C. Procedure for Joining Claims or Counterclaims
Checkpoints
Chapter 17 · Authority to Join Parties
Party Joinder Roadmap
A. Joinder of Parties by Plaintiffs
1. Permissive Joinder of Parties by Plaintiffs
a. Permissive Joinder of One or More Co-Plaintiffs by a Plaintiff
i. What Is the “Same Transaction or Occurrence”?
ii. What is a “Common Question of Law or Fact”?
b. Permissive Joinder of Co-Defendants by a Plaintiff
2. Mandatory Joinder of Parties: Rule 19 as a Narrow Exception to
Party Autonomy
a. How Rule 19 Typically Gets Litigated
b. Rule 19: Three Steps with a Venue-Related Twist
i. Is the Person a “Necessary” Party?
(a) Parties Who Are Necessary to Accord Complete
Relief to Existing Parties
(b) Parties Who Claim an Interest and Are Necessary to
Join
ii. If the Person Is Necessary, Joinder Must Be Ordered if
Personal and Subject Matter Jurisdiction Exist
(a) Joinder Can't be Ordered if Personal or Subject
Matter Jurisdiction is Lacking, but Must be Ordered
Even if Venue is Improper
 iii. Determining Whether a Necessary Person Is
Indispensable
B. Joinder of Parties by Defendants
1. Joining a Party to a Counterclaim or Crossclaim
2. Impleader of Third-Party Defendants
a. Scope of Rule 14(a)(1)
b. Time for Filing and Serving
c. Service of the Third-Party Complaint
3. Joinder of Additional Claims Under Rule 18(a)
Checkpoints
Chapter 18 · Multiple Parties and Joinder
Multiple Parties Roadmap
A. Crossclaims against Co-Parties and Joinder of Parties to Crossclaims
B. Rule 14: Fourth-Party Defendants and Beyond
C. Misjoinder, Severance, and Separate Trials
Checkpoints
Chapter 19 · Interpleader: A Non-Party Creates a Suit between Two
Parties
Interpleader Roadmap
A. What the Two Kinds of Interpleader Share
B. Statutory Interpleader
C. Rule Interpleader
D. Adjudication of Interpleader Actions
Checkpoints
Chapter 20 · Intervention: The Only Way for Someone to Force
Himself into a Lawsuit
Intervention Roadmap
A. Intervention
1. Intervention as of Right
a. Rule 24(a)(1): Unconditional Statutory Right
b. Rule 24(a)(2): Rule-Based Right
2. Permissive Intervention
a. Rule 24(b)(1)(A): Conditional Statutory Right
b. Rule 24(b)(1)(B): Rule-Based Conditional Right
C. Impact of Intervention on Subject Matter Jurisdiction
D. Appellate Review
Checkpoints
Chapter 21 · Joinder Step Two: Original or Supplemental Subject
Matter Jurisdiction Must Exist
Joinder Step Two Roadmap
A. Is There Original Subject Matter Jurisdiction Over the Additional
Claim?
B. Is There Supplemental Jurisdiction Over the Additional Claim?
1. Step One: Is the Additional Claim Part of the Same “Case or
Controversy” as an Anchor Claim?
2. Step Two: Even if it is Part of the Same “Case or Controversy” and
is not “Contaminated” does Section 1367(b) Preclude Supplemental
Jurisdiction Over the Additional Claim?
a. Is the Additional Claim Anchored by a Federal Question
Claim?
i. What's Not Excluded by Section 1367(b)?
(a) No Claim Is Excluded if There is at Least one
Federal Question Anchor Claim
(b) No Claim by a Defendant or a Party Sought to be
Joined as a Defendant is Excluded
(c) No Claim by a Single Plaintiff against a Single
Defendant is Excluded
ii. What is Excluded?
3. Step Three: Does the District Court Have Discretion to Decline to
Exercise Supplemental Jurisdiction Over the Additional Claim?
a. The Four Triggers to Exercise of Discretion in the
Subparagraphs of Subsection 1367(c)
i. Dismissal of an Additional Claim That Raises a Novel or
Complex Issue of State Law
ii. Dismissal of an Additional Claim That Substantially
Predominates Over the Claim or Claims Over Which the
District Court has Original Jurisdiction
iii. Dismissal of the Additional Claims After the District
Court has Dismissed all Claims Over Which that Court had
Original Jurisdiction
iv. Dismissal of an Additional Claim When, in Exceptional
Circumstances, There are Other Compelling Reasons for
Declining Jurisdiction
 b. If One Subparagraph is Met, What Informs the District Court's
Discretion?
B. What Happens if the Court Dismisses the Additional Claim?
Checkpoints
Chapter 22 · Joinder Step Three: Personal or Pendent Personal
Jurisdiction Must Exist Over Most Claims
Joinder Step Three Roadmap
A. Must There be, and if so is There, Regular Personal Jurisdiction Over the
Additional Claim?
B. If Needed but There is no Regular Personal Jurisdiction, is There
Pendent Personal Jurisdiction Over the Additional Claim?
C. Assertion of Pendent Personal Jurisdiction Must Comport with Due
Process
Checkpoints
Chapter 23 · Joinder Step Four: Venue or Pendent Venue Must Exist
Over Some Claims
Joinder Step Four Roadmap
A. Is Venue Proper Under the “Regular” Analysis?
B. Is Proper Venue Unnecessary Over the Claim?
a. Venue is not Required for a Counterclaim Against an Existing
Plaintiff
b. Venue is not Required for a Counterclaim Against a Party
Joined as a Counterclaim Defendant Under Rule 13(h)
c. Venue is not Required for a Claim Against a Third-Party
Defendant Joined Under Rule 14(a)
2. All Other Claims Require Proper Venue or Pendent Venue
Checkpoints
Chapter 24 · A Recap and Flow Chart of the Four Steps for Adding
Claims or Parties
A. A Flow Chart for Applying Section 1367
B. The Charts Revisited
C. Some Examples with Explanations
1. Compulsory Counterclaims
2. Certain Permissive Counterclaims
3. Joinder of Plaintiffs Under Rules 19 and 20
4. Joinder of Defendants Under Rules 19 and 20
 5. Joinder of a Counterclaim Defendant to a Counterclaim Against and
Existing Plaintiff Under Rule 13(h)
6. Third-Party Practice Under Rule 14
7. Rule 18(a) Joinder of Claims
Chapter 25 · Notifying the Defendant of the Filing of Suit through
Service, Waiver of Service of Process, or Substituted Service
Notifying the Defendant Roadmap
A. Formal Service or Request for Waiver of Formal Service
1. Formal Service of Process
a. Plaintiff's Counsel Fills Out the Forms
b. The Court Clerk Signs and Seals the Forms
c. Plaintiff's Lawyer has Process Properly and Timely Served
d. The Process Server Completes Proof of Service
e. Plaintiff Files the Proof of Service
2. Request for Waiver of Service of Process
B. Constructive Service of Process as an Alternative to Formal Service or
Waiver of Formal Service
C. What's Next?
Checkpoints
Chapter 26 · Preview of the Defendant's Options in Response to
Receiving a Federal Court Complaint
Chapter 27 · The Defendant's Initial Set of Options
Defendant's Initial Options Roadmap
A. Filing a Motion Under Rule 12
B. Filing an Answer
C. Doing Nothing
D. Limitations on the Defendant's Options
E. Moving to the Details
Checkpoints
Chapter 28 · An Introduction to Motions
Motions Roadmap
A. Technical Requirements for Motions
1. Writing, Caption, Grounds
2. Serving and Filing the Motion
B. Briefs, Affidavits, and Other Things Associated with Motions
C. The Opposition to the Motion
D. The Reply in Support of the Motion
E. Court Dockets and Rules on the Motion
Checkpoints
Chapter 29 · When and Why Must a Defendant File an Answer or Rule
12 Motion?
File an Answer or a Rule 12 Motion Roadmap
A. When and Why Must a Rule 12 Motion or Answer Be Filed?
1. When Must a Rule 12 Motion or Answer Be Filed?
2. Why Must a Rule 12 Motion or Answer Be Filed?
B. What Must or Can be Raised in a Rule 12 Motion?
Checkpoints
Chapter 30 · Rule 12(b)(1) Challenges to Subject Matter Jurisdiction
Rule 12(b)(1) Roadmap
A. Two Forms of Attack
1. Facial Attacks
2. Factual Attacks
B. The Impact of Adjudication
C. Additional Doctrines Related to Subject Matter Jurisdiction
1. A Summary Chart
2. Requirements Originating from Article III's Case or Controversy
Clause
a. Constitutional Standing
b. Ripeness
c. Mootness
i. The Exception to the Mootness Limitation: Courts May
Adjudicate Claims Capable of Repetition Yet Evading
Review
3. Prudential Standing Requirements
4. Other Limitations on Federal Judicial Power
a. Rooker-Feldman: Review of State Court Orders go to the
Supreme Court, Not Federal District Courts
b. Younger “Abstention”
c. Colorado River Abstention
d. Pullman Abstention
Checkpoints
Chapter 31 · Rule 12(b)(2) Challenges to Personal Jurisdiction
Rule 12(b)(2) Roadmap
A. Promptly and Timely Objecting to Lack of Personal Jurisdiction
1. Two Types of Challenges to Personal Jurisdiction
a. Facial Challenges
b. Factual Challenges
2. Waiving Objection to Lack of Personal Jurisdiction
a. Intentional Waiver
i. Pre-Dispute Forum Selection Clauses
ii. Post-Filing Deliberate Inaction
iii. Filing of Suit
b. Inadvertent Waiver: Pleading an Objection to Personal
Jurisdiction in an Answer is not Enough
B. The Impact of Adjudication of the Motion
C. Not Appearing and Later Collaterally Attacking the Judgment
Checkpoints
Chapter 32 · Rule 12(b)(3) Challenges to Improper Venue
Rule 12(b)(3) Roadmap
A. Objections to Improper Venue Must Be Made Promptly or Are Waived
1. Inadvertent Waiver
a. Failing to Timely File a Pre-answer Motion to Dismiss for
Improper Venue
b. Including the Objection to Venue in a Pleading but
Participating in Litigation Before Moving to Dismiss
2. Intentional Waiver
a. Post-Suit Deliberate Choice to Waive Objection
b. Pre-Dispute Forum Selection Clauses
i. Raising a Venue Objection Based on a Forum Selection
Clause
ii. Adjudicating Validity of Forum Selection Clauses
B. Procedure for Adjudicating Objections to Improper Venue
1. Burdens of Proof
2. The Court Must Either Dismiss or Transfer If Venue Is Improper
3. Where can the Court Transfer the Claim?
4. What if Venue Over Some Claims is Proper?
5. No Second-Guessing by Transferee Court
Checkpoints
Chapter 33 · Rule 12(b)(4) and (5) Challenges to Process
Rule 12(b)(4) Roadmap
A. The Scope of These Two Rules
B. Procedure to Make a Rule 12(b)(4) or 12(b)(5) Motion
C. Waiver of Objection
D. The Impact of Adjudication
Checkpoints
Chapter 34 · Rule 12(b)(6) Challenges to Statement of a Claim by
Plaintiff and under Rule 12(c) for Judgment on the Pleadings
Rule 12(b)(6) Roadmap
A. The Limitations in Rule 12(b)(6)
1. If the Court Does not Limit its Consideration to the Allegations of
the Complaint, a Rule 12(b)(6) Motion Must be Treated as a Rule 56
Motion for Summary Judgment
a. What are the “Contents of the Complaint”?
b. What if the Court Does not Exclude, but Does not Consider,
Matters Outside the Complaint?
2. The Plausible Facts in the Pleading are Taken as True: Rule 12(b)
(6)'s Burden of Persuasion
a. An Example Applied to a Claim
b. Rule 12(b)(6) and Affirmative Defenses
B. Determining Whether the Pleading States a Claim for Relief
C. Procedure for Making a Rule 12(b)(6) Motion
D. Responding to a Rule 12(b)(6) Motion
E. It's Hard to Waive the Objection of Failing to State a Claim
1. Rule 12(c)
a. The Window of Rule 12(c)
b. The Same Standards Under Rule 12(b)(6) Apply Under Rule
12(c)
i. Burden of Proof
ii. Conversion to a Rule 56 Motion for Summary Judgment
2. At Trial
F. The Impact of Adjudication of a Rule 12(c) Motion
Checkpoints
Chapter 35 · Rule 12(b)(7) and Indispensable Parties under Rule 19
A. Timing of Rule 12(b)(7) Objection
B. Facial or Factual Attacks Permitted
C. The Impact of Adjudication
Chapter 36 · Rule 12's One-Motion-Consolidation Requirement
Rule 12's One-Motion-Consolidation Requirement Roadmap
A. A Party Can Easily Waive Personal Protections
B. The Requirement That Certain Rule 12 Objections Be Consolidated in
the First Response or Be Deemed Waived, and the Three Exceptions to
Waiver
C. Special Issues under Rule 12
1. One, and Only One, Pre-Answer Motion
2. An Exception for Motions Under Rules 12(e) or (f)
3. Compelling a Party to Abide by a Pre-Dispute Arbitration Clause
D. The Court Can Grant, Deny, or Carry a Rule 12 Motion With the Case
1. Impact of Granting a Rule 12 Motion
2. Impact of Denial of a Rule 12 Motion
3. Carrying the Motion with the Case
E. Should a Party with the Choice File an Answer or a Rule 12 Motion?
F. Filing a Rule 56 Motion Should Not Postpone the Answer Date
Checkpoints
Chapter 37 · The Defendant's Answer
Answer Roadmap
A. Defense Counsel Must Investigate the Facts and Law
B. Defense Counsel Must Address Each Allegation in the Complaint
C. The Answer Must Plead Every Affirmative Defense
1. What is an “Affirmative Defense”?
2. How Much Detail About the Affirmative Defense Must be Pled in
the Answer?
3. May the Defendant Be Inconsistent in its Positions?
4. An Example of Pleading Affirmative Defenses in Pre-
Iqbal/Twombly Fashion
D. Defense Counsel Must Plead Any Rule 12(b) Objections
E. Defense Counsel Must Analyze Joinder of Claims and Parties
F. Defense Counsel Must Determine if a Jury Trial is Available and Desired
G. Defense Counsel Must Timely File and Serve the Answer
Checkpoints
Chapter 38 · Rule 11's Reach and Special Procedures
Rule 11's Reach Roadmap
A. Rule 11 Reaches all Papers, but not Discovery
B. The Reach of Rule 11 Beyond “Filing” or “Submitting” a Paper to “Later
Advocating”
C. Two Ways to Raise Violations of Rule 11
1. Party's Motions for Sanctions
2. Court's Own Motion for Sanctions
D. The Proper Sanction Under Rule 11
1. A Violation Permits but Does not Require Imposition of any
Sanction
2. Who Can the Court Sanction?
3. Determining the “Appropriate” Sanction
a. Monetary Sanctions
b. Non-Monetary Sanctions, Including Dismissal
E. Related Law: Sanctions Under 28 U.S.C. § 1927 and Inherent Power
1. Section 1927
2. Inherent Power to Sanction
F. Sanctions Related to Discovery
Checkpoints
Chapter 39 · Transfer from a Proper Venue to a More Convenient,
Proper Venue
Venue Transfer Roadmap
A. How to Analyze a Section 1404(a) Motion to Transfer Venue
1. Venue Must be Proper in the Current District
2. Venue in the Proposed Transferee District Must be Proper and the
Defendant Must be Subject to Personal Jurisdiction in the Transferee
Forum
3. The Party Seeking to Transfer the Case Bears the Burden to
Establish the Transferee District is Clearly More Convenient
B. Procedure to Move to Transfer Under Section 1404(a)
1. Is a Rule 12(b)(3) Motion Required to Move Under Section
1404(a)?
2. Transfer, Not Dismissal, is the Only Option
C. Intra-District, Inter-Divisional Transfer Under Section 1404(a)
Checkpoints
Chapter 40 · Special Venue Issues
Special Venue Issues Roadmap
A. The Impact of Forum Selection Clauses
1. Enforceability and Interpretation
2. Interplay Between Forum Selection Clauses and Rule 12(b)(3)
B. Forum Non Conveniens
1. International Application of Forum Non
2. Narrow Domestic Application of Forum Non
3. Appellate Review
4. Waiver of Forum Non
C. Venue in Removed Actions
Checkpoints
Chapter 41 · Amending Pleadings
Amending Pleadings Roadmap
A. The General Rule Regarding Amendment of Pleadings in Rule 15(a)
1. The Right to Amend
2. Agreement From the Opposing Parties
3. Moving for Leave to Amend
a. Rule 15(a)(2): The General Rule
B. The Procedure to Amend a Pleading
C. The Other Parties' Right to Respond if Amendment is Permitted
D. Rule 15(c) Relation Back of an Otherwise Time-Barred Claim
1. Rule 15(c)(1): The Rule Governing Relation Back
a. Relation Back Under Rule 15(c)(1)(A)
b. Relation Back Under Rule 15(c)(1)(B)
c. Relation Back Under Rule 15(c)(1)(C)
i. Changing the Defendant or Defendant's Name
ii. Changing the Plaintiff
2. How the Question of Relation Back is Typically Litigated
Checkpoints
Chapter 42 · Lawyer Responsibility for and Judicial Involvement in
Case Management
Chapter 43 · The First Steps After Pleadings Close: Conferences and
Required Initial Disclosures
After Pleadings Close Roadmap
A. Required Initial Disclosures: Each Party Must Show its Best Hand
B. The Parties Agree on a Plan for the Lawsuit at the Rule 26(f) Conference
1. When
2. What
3. Why
B. The Rule 26(f) Conference's Impact on Discovery
C. The Rule 16(b) Conference and Order
D. Exchange of Required Initial Disclosures
1. Exemptions
2. When
3. What: The Good Stuff Reasonably Available to the Party
4. Supplementation
5. Sanctions and Exclusion From Evidence for Violating the Rule
E. Amending a Deadline in a Rule 16 Scheduling Order: Good Cause Plus
1. Amending Pleadings: Good Cause to Amend or Bias To Allow the
Amendment?
Checkpoints
Chapter 44 · Adjudication or Resolution of Claims Before Discovery
Adjudication Before Discovery Roadmap
A. Default Judgments
1. The Three Steps to Obtain a Default Judgment
a. An Act of Default: The Failure to “Plead or Otherwise Defend”
i. Failure to Plead
ii. What Constitutes “Failure to Otherwise Defend”?
b. Entry of Default and Setting Entry of Default Aside
i. Entry of Default
ii. Setting Aside Entry of Default
c. Entry of Default Judgment and Vacating Entry
i. Can the Clerk or Must the Judge Enter Default Judgment?
(a) What Is a “Sum Certain”?
(b) What is an “Appearance”?
ii. Vacating a Default Judgment
B. Voluntary Dismissal
1. Voluntary Unilateral Dismissal of a Claim by a Party
a. Time for Filing Notice of Dismissal
b. Impact of Filing a Notice of Dismissal
2. Only one Voluntary Dismissal Without Prejudice
 3. Dismissal by Stipulation of the Parties
a. Dismissal After Answer or Summary Judgment or Without All
Parties' Consent: Court Approval Required
C. Involuntary Dismissal with Prejudice for Violating Rules or Orders
D. Dismissal of a Claim Based Upon a Motion Under Rules 12(b)(6) or
12(c)
E. Settling the Case
Checkpoints
Chapter 45 · The Foundations of Choice of Law in Federal Court
Foundations of Choice of Law Roadmap
A. Federal Power is Limited
B. States Authorized Congress to Create Federal District Courts
C. Limits on State Power
D. The Complexities of Choice of Law
Checkpoints
Chapter 46 · Vertical and Horizontal Choice of Law
Choice of Law Roadmap
A. Federal Law and Federal Procedure Apply to Claims Arising Under
Federal Law
B. State Substantive Law, but Federal Procedural Law, Applies to Claims
Arising Under State Law
1. The Erie Decision: State Substantive Law Applies to State Law
Claims Being Adjudicated in Federal Court
2. The Federal Power to Regulate Federal Procedure and its
Limitations
3. Where We Are Today
a. A Validly Enacted Rule Will Control Absent State Substantive
Law to the Contrary
B. Determining Which State's Law Applies and Then Identifying the
Content of that State's Law
1. Which State's Law Applies?
a. Choice of Law in Federal Courts: The General Rule
b. Choice of Law After Transfer of Venue to a Different State
i. Choice of Law After a Section 1404(a) Transfer to a More
Convenient Forum
ii. Choice of Law After a Section 1406(a) Transfer for
 Improper Venue (or Lack of Personal Jurisdiction)
2. How Does a Federal Court Determine What State Law is — the
“Content” of State Law?
3. Constitutional Limitations on Imposition of Substantive State Law
D. Appellate Review
Checkpoints
Chapter 47 · Discovery
Discovery Roadmap
A. Purpose of Discovery
B. Party Responsibility for Setting the Boundaries for Discovery and
Making Initial Disclosures
C. Greater Judicial Involvement in and Lawyer Management of Discovery
1. Each Lawyer Must Participate in the Rule 26(f) Conference
2. New Amendment Requires Early, More Judicial Involvement
3. Each Party Must Make Initial Disclosures
4. A Discovery Request Is Certified as Reasonable
5. Lawyers Must Meet and Confer Before Raising Disputes with the
Court, and Must Request a Conference with the Court Before Filing a
Discovery Motion
Checkpoints
Chapter 48 · Scope of Discovery: Relevancy and Other Boundaries
Scope of Discovery Roadmap
A. Relevancy to a Claim and Proportionality as a Key Limit on Discovery
B. Sometimes Even a Request for Information that is Relevant to a Claim or
Defense and which is Proportional to the Case is Objectionable
C. Privilege and Work Product as Boundaries to Discovery
1. Privileged Information Is Protected from Disclosure
2. Work Product or “Trial Preparation” Materials Receive Qualified
Protection
(3) Trial Preparation: Materials
D. Other Boundaries
E. Enforcing the Boundaries
Checkpoints
Chapter 49 · Forms of Discovery
Forms of Discovery Roadmap
A. Requests for Production of Documents and Things
 1. Obligations of the Requesting Party
2. Obligations of the Recipient
3. Obtaining Documents from Non-Parties by Rule 45 Subpoena
Duces Tecum
B. Requests for Inspection of Land and Other Locations to Parties or Non-
Parties
C. Interrogatories to Parties
1. Serving Party's Obligations
2. Recipient's Obligations
D. Requests for Admission
1. Serving Party's Obligations
2. Recipient's Obligations
3. Scope of Admission and Withdrawal of an Admission
E. Depositions on Written Questions
1. Sender's Obligations
2. Recipient's Obligations
F. Oral Depositions
1. Overview
2. Procedure for Taking the Deposition of Parties or Non-Parties
3. Deposing a Natural Person Who Is Already a Party to the Suit
4. Deposing Corporations and Other Entities: Rule 30(b)(6)
a. The Procedure for Obtaining a Rule 30(b)(6) Deposition
b. Issues Concerning the Designee's Testimony
5. Taking Oral Deposition of a Non-Party by Service of a Subpoena
G. Physical and Mental Examinations
1. Obtaining an Order for an Examination
a. Who May Be Examined?
b. When Is a Condition “in Controversy”?
c. What Constitutes “Good Cause”?
H. Special Issues
1. E-Discovery
I. Practical but Crucial Big Picture View of Discovery
Checkpoints
Chapter 50 · Expert Witnesses: Disclosure, Discovery, and Protection
Expert Witnesses Roadmap
A. Required Disclosures from Parties Intending to Use Testifying Experts
and Hybrid Experts at Trial
1. An Overview of the Two Rounds of Disclosures
a. Disclosure of the Identity of Each Testifying Expert and Hybrid
Expert
b. Disclosure of Reports of Testifying Experts and Summaries
from Hybrid Experts
i. Who is a “Testifying Expert” and so Must Prepare a
Report?
ii. What Must Be in the Report of a Testifying Expert?
iii. What Must the Summary of a Hybrid Expert Contain?
2. Each Party Must Supplement Expert Disclosures
3. Incomplete or Late Reports, Summaries of Hybrid Experts, or
Deposition Testimony
B. Non-Testifying (aka Consulting) Experts
1. The Rule: No Discovery of Consulting Experts
2. The “Exceptional Circumstances” Exception
a. The Condition Is No Longer Observable and Could Not Have
Been Observed by the Party Seeking Discovery from the
Consulting Expert
b. The Event or Condition Can be Recreated Only at Great
Expense
c. There's No Other Expert in the Field Available
C. Special Issues
1. Deposing a Testifying Expert's Non-Testifying Assistants
2. Waiver of Protection of Non-Testifying Expert's Opinions
3. De-Designating a Testifying Expert
Checkpoints
Chapter 51 · Adjudication of Discovery Disputes
Adjudication of Discovery Disputes Roadmap
A. Penalties for Noncompliance with Discovery Requests and Disclosure
Obligations
1. The Process for Adjudicating Disputes About Discovery
2. Adjudicating a Party's Motion to Compel
a. The Process for Moving to Compel
b. Violation of an Order Compelling Discovery
3. Adjudication of a Party's or Non-Party's Motion for Protective Order
Checkpoints
Chapter 52 · Summary Judgment: Adjudication of Claims Before Trial
but Usually After Discovery Closes
Summary Judgment Roadmap
A. Timing: When Motions for Summary Judgment Can Be and Typically
Are Filed
B. What a Court May Consider in Adjudicating a Motion for Summary
Judgment
C. The Burden of Persuasion is on the Party Moving for Summary
Judgment Movant
1. The Burden of Persuasion
a. No Genuine Issue of Material Fact
i. When Is a Fact “Material”?
ii. When Is There a “Genuine Issue”?
b. When Is a Movant “Entitled to Judgment as a Matter of Law”?
2. The Burden of Production, Not Persuasion, Is Usually What Matters
a. How Much Evidence Is Sufficient?
D. The Summary Judgment Process: Shifting Burdens of Production
1. The Movant's Initial Burden of Production and the Shift to the
Responding Party
a. The Burden of Production If the Party Moving for Summary
Judgment Does Not Have the Burden of Proof at Trial
b. The Burden of Production If the Party Moving for Summary
Judgment Also Has the Burden of Proof at Trial
2. The Burden of Production Shifts Only if the Summary Judgment
Movant Meets Its Burden of Production
E. Examples with Explanations and a Flow Chart
1. Examples with Explanations
2. A Flow Chart
Checkpoints
Chapter 53 · The Final Set of Required Disclosures: The Pretrial Order
Pretrial Order Roadmap
A. Pretrial Disclosures Required by Rule 26(a)(3) 30 Days Before Trial
B. The More Common, Jointly Prepared Pretrial Order and Commonly
Required Additional Materials
C. Impact of the Pretrial Order on Subsequent Events
Checkpoints
Chapter 54 · Adjudication of Claims by Trial
Adjudication of Claims by Trial Roadmap
A. Pretrial Motions in Limine
B. Juries
1. Will a Jury Hear the Claim?
a. Is There a Right to Trial by Jury?
b. Was the Right Waived or, if Made, Can It be Revoked?
c. Power of the Court to use a Jury on Non-Jury Questions, or
Despite the Parties' Waiver of the Right to One
2. Jury Selection
a. Jury Pools
b. Jury Strikes
i. Striking for Cause
ii. Striking Peremptorily
c. Jury Seated
C. Trial
1. Turns and Burdens
2. Plaintiff's Case in Chief
3. Defendant's Turn
a. JMOL under Rule 50(a): aka “Motions for Directed Verdict”
i. Timing of Rule 50(a) Motion
ii. Two Motions
iii. Movant's Burden of Proof
iv. Grant or Denial of Motion
4. Plaintiff's Rebuttal Case and Plaintiff's JMOL Against Defendant's
Counterclaims or Affirmative Defenses
5. JMOL on Issues on Which the Movant Has the Burden of Proof
6. JMOL Examples with Explanations
D. Conferring on the Charge and Verdict Form
E. Closing Arguments
F. Charging the Jury
G. Jury Deliberation
H. Return of Verdict
Checkpoints
Chapter 55 · After Verdict: In the District Court
After Verdict Roadmap
A. Options for the Verdict Loser That Must Be Taken before Jury Discharge
B. After the Jury Discharge: Verdict Winner Moves for Entry of Judgment
1. Process for Entry of Judgment
2. Form of Judgment
C. Within 28 Days of Entry of Judgment, the Verdict Loser Must File Any
Motions for New Trial and Rule 50(b) Renewed Motions for JMOL
1. Post-Judgment Rule 50(b) JMOL Motions (aka JNOV)
a. Predicate: Pre-Submission Rule 50(a) JMOL Motion
b. Scope of Post-Judgment Rule 50(b) Motion Limited to Pre-
Verdict Rule 50(a) Motion
c. Burden of Proof
d. Impact of Rulings
2. Motions for New Trial under Rule 59
a. The Two Common Bases for New Trial Motions
b. New Trial Awarded Based Only on the Amount of Damages
i. Remittitur
ii. Additur: Unconstitutional in Federal Court
D. Motions to Amend the Judgment under Rule 59(e)
E. What Does the Verdict and Judgment Winner Have to Do?
1. Did the Verdict Deprive It of Any Relief?
2. Respond to the Loser's Motions
F. Impact of Entry of Judgment on Execution and Appeals
G. Possible Actions by the Trial Court and the Impact on Appeal
Checkpoints
Chapter 56 · Obtaining Relief after Prevailing on a Claim
Obtaining Relief Roadmap
A. Execution of Judgment and Discovery in Aid of Execution
B. The Judgment Loser Can Move in Federal Court to Stay Execution of
the Judgment Pending Appeal
Checkpoints
Chapter 57 · Limited Availability of Appeals: The Final Judgment Rule
and Its Exceptions
Final Judgment Rule Roadmap
A. Who Can Appeal?
B. When is the Earliest an Appeal Can Be Taken? The Final Judgment Rule
and Its Few Exceptions
 1. Exceptions to the Final Judgment Rule
a. Rule 54(b)
i. Adjudication of at Least One of Multiple Claims
ii. Express Determination There Is No Just Reason for Delay
iii. Express Entry of Final Judgment
iv. Waiver of the Right to Seek Rule 54(b) Certification
v. Appellate Review
b. Collateral Orders
i. Conclusive Determination
ii. An Important Issue Separate From the Merits
iii. Effectively Unreviewable After Appeal
c. Orders Granting or Denying Injunctive Relief: 28 U.S.C. §
1292(a)(1)
i. Orders Granting or Denying Preliminary Injunctions:
Appealable as of Right
ii. Temporary Restraining Orders: Generally Not Appealable
d. Appeals under 28 U.S.C. § 1292(b)
i. Requirements
(a) Controlling Question of Law
(b) Substantial Ground for Difference of Opinion
(c) Interlocutory Appeal May Materially Advance
Litigation
ii. Process in the District Court
iii. Process in the Appellate Court
iv. Waiver
e. Mandamus
C. The Big Picture
Checkpoints
Chapter 58 · A Brief Word on Appeals
Appeals Roadmap
A. Timing of Filing of Notice of Appeal
B. The Appellate Process
1. Reversible Error and Harm Must Be Established
a. Standards of Review
b. Harmful Error Is Required to Reverse
2. Affirm, Reverse, Render or Remand
 3. Panel Reconsideration and Rehearing En Banc
C. Petition for Certiorari to the United States Supreme Court
Checkpoints
Chapter 59 · Attacking a Judgment in District Court under Rule 60(b)
Rule 60(b) Roadmap
A. Motions to Reopen the Judgment under Rule 60(b)
B. The Six Narrow Bases of Rule 60(b) and the Short Time Limits
C. Adjudication of Rule 60(b) Motions
1. Rule 60(b)(1): Mistake, Inadvertence, Surprise, or Excusable
Neglect
2. Rule 60(b)(2): Newly Discovered Evidence
3. Rule 60(b)(3): Fraud
4. Rule 60(b)(4): Judgment is Void
5. Rule 60(b)(5): Judgment has been Satisfied, Released, Discharged,
Reversed, or Become Inequitable
6. Rule 60(b)(6): The Narrow Catch-all
Checkpoints
Chapter 60 · After Appeals: Claim and Issue Preclusion
Claim and Issue Preclusion Roadmap
A. Choice of Law
B. Claim Preclusion
1. Purpose of Claim Preclusion
2. The Elements of Claim Preclusion
a. Could the Later-Asserted Claim Have Been Brought in the First
Suit?
b. Should the Later-Asserted Claim Have Been Asserted in the
First Suit: is it the “Same Claim” as one in the Earlier Suit?
i. Is the Later-Asserted Claim so Identical to or Closely
Related to one in the Earlier Suit that “Should Have Been”
Brought Earlier?
ii. Was the Later-Asserted Claim a Compulsory
Counterclaim in the First Suit?
iii. Could the Later-asserted Claim Have Been a Defense to
the First Suit That, if Successful, Would Nullify Rights
Established in the First Suit?
c. If the Party Bringing the Later-Asserted Claim was not a Party
 to the First Suit, is it Nonetheless Bound by the Prior Judgment
Because it is in “Privity” with a Party to the First Suit?
d. Did the First Suit End with a Final Judgment “On the Merits”?
C. Issue Preclusion
1. Purpose of Issue Preclusion
2. Elements of Issue Preclusion
a. Was the Same Issue Litigated and Actually Determined in the
First Suit?
b. Was the Issue Essential to the Judgment in the First Case, Such
That the Judgment Could Not Have Issued Without That Issue
Having Been Decided?
c. Was There a Valid, Final Judgment on the Merits in the First
Suit?
d. Can Issue Preclusion be Applied Against the Party in the
Second Suit?
e. Can the Party in the Second Suit Assert Issue Preclusion?
D. Procedure for Litigating Claim Preclusion
1. Claim Preclusion is “Res Judicata” and So Must be Pled as an
Affirmative
2. Ordinarily Claim Preclusion can be Resolved by Moving for
Summary Judgment
E. Procedure for Litigating Issue Preclusion
1. Pleading Requirements
a. Because Issue Preclusion is “Res Judicata” it must be Pled as
an Affirmative Defense Under Rule 8(c)
b. Offensive Use: Must Plaintiff Plead Issue Preclusion?
2. Litigating Issue Preclusion by Moving for Summary Judgment
F. Special Issues
1. Co-Pending Suits with Same Claims
Checkpoints
PART C
SPECIAL PROCEDURES FOR RESOLVING SIMILAR CLAIMS AMONG MANY
PARTIES
Chapter 61 · A Brief Introduction to Mass and Class Actions
A. Class Actions
1. Overview of Class Actions
 2. Impact of CAFA
B. Multi-District Consolidation: 28 U.S.C. § 1407
Mastering Civil Procedure Master Checklist
Index
 Table of Cases
A. Kraus & Son v. Benjamin Moore & Co., 122
Aamot v. Kassel, 398
Abbott Labs. v. Gardner, 290
A.B.C.G. Enterp., Inc. v. First Bank Southeast, N.A., 579
Acevedo-Garcia v. Vera-Monroig, 538
Achtman v. Kirby, McInerney & Squire, LLP, 223
Ackra Direct Mktg. Corp. v. Fingerhut Corp., 394
ACLU of Nev. v. Lomax, 289, 291
Acri v. Varian Assocs., Inc., 231
Action Embroidery Corp. v. Atlantic Embroidery, Inc., 238
Adams v. AlliedSignal General Aviation Avionics, 312
Advance Financial Corp. v. Utsey, 388
Advanced Magnetics v. Bayfront Partners, 546
Aequitron Medical, Inc. v. CBS, Inc., 375
Aetna Health, Inc. v. Davila (1984), 32, 36
Aetna Health, Inc. v. Davila (2004), 32, 36
Ager v. Jane C. Stormont Hosp. & Training School for Nurses, 466
Aguayo v. AMCO Ins. Co., 124, 130
Ahern v. Scholz, 561
Ahrenholz v. Bd. of Trustees of Univ. of Ill., 555, 557
Ajifu v. Int'l Ass'n. of Machinists & Aerospace Workers, 400
Aldrich v. New York, 585
Alexander Proudfoot Co. World Headquarters L.P. v. Thayer, 413
Alexander v. Okla., 315
Allen v. Wright, 288, 291
Allred v. Moore & Peterson, 300
Allstate Ins. Co. v. Hugh Cole Builder, Inc., 203
Allstate Ins. v. Hague, 419
Alper v. U.S., 458
Alpine View Co. v. Atlas Copco AB, 362
Alvarez v. Simmons Mkt. Research Bureau, Inc., 400
Am. Cyanamid Co. v. McGhee, 398
Am. Express Travel Related Serv. Co., Inc. v. Beaumont, 203
Am. Reliable Ins. Co. v. Navratil, 419
Am. Reliable Ins. Co. v. Stillwell, 293
Amway Corp. v. Procter & Gamble Co., 468
Anderson v. Docuport, Inc., 189
Anderson v. Hale, 431
Anderson v. Liberty Lobby, Inc., 488, 496
Angelo v. Armstrong World Indus., Inc., 511
Ankenbrandt v. Richards, 292
Apotex, Inc. v. Food & Drug Admin., 576
Arbegast v. Bd. of Ed. Of S. New Berlin Central H.S., 494
Arizonans for Official English v. Arizona, 290
Armotek Indus., Inc. v. Employers Ins., 542
Arons v. Lalime, 144
Asahi Metal Indus. Co., Ltd. v. Superior Ct. of Ca., 84–85
ASARCO Inc. v. Kadish, 54
Ashcroft v. Iqbal, 152
AT&T Broadband v. Tech Communications, Inc., 554
Atchinson v. Dist. of Columbia, 368
Atlanta Shipping Corp. v. International Modular House., Inc., 128
Atlantic Marine Const. Co., Inc. v. U.S. Dist. Court for Western Dist. of
Texas, 360–362
Audette v. Isaksen Fishing Corp., 524
Avco Corp. v. Aero Lodge No. 735, Int'l Ass'n of Machinists, 36
Avista Mgmt., Inc. v. Wausau Underwriters Ins. Co., 458
Avita v. Metropolitan Club, 158
B. Fernandez & HNOS, Inc. v. Kellogg USA, Inc., 217–218
B & B Hardware, Inc. v. Hargis Indus., Inc., 582, 584
Bain v. MJJ Prods., Inc., 567
Baker v. Gold Seal Liquors, Inc., 180
Bancroft & Masters, Inc. v. Augusta Nat'l, Inc., 84
Bank of Am. Nat'l Trust & Savs. Ass'n. v. Nilsi, 197
Bank of Augusta v. Earle, 66
Bank of the Orient v. Superior Court, 430
Banks v. Office of Senate Sergeant-at-Arms, 447
Barab v. Menford, 203
Barrett v. Lombardi, 300
Barton v. Florida, 307
Base Metal Trading, Ltd. v. OJSC “Novokuznetsky Aluminum Factory,”
89, 97
Bates v. C&S Adjusters, Inc., 108
Batts v. Tow-Motor Forklift Co., 569
Baumgart v. Fairchild Aircraft Corp., 362
Beattie v. U.S., 243
Becker v. Montgomery, 344
Beeck v. Aquaslide 'n' Dive Corp., 368
Beighley v. Federal Deposit Ins. Corp., 130
Belcher v. Basset Furn. Indus., 448
Belknap v. Leary, 554
Bell Atlantic Corp. v. Twombly, 152, 156
Bell v. City of Kellogg, 542
Bell v. Hood, 27
Belleville Catering Co. v. Champaign Market Place L.L.C., 45
Bel-Ray Co. v. Chemrite Ltd., 302
Beneficial Nat'l Bank v. Andersen, 36
Benham v. Rice, 461
Berhard v. Bank of Am., 587
Bhaya v. Westinghouse Elec. Corp., 528
Bias v. Advantage Int'l., Inc., 488
Bird v. Carteret Mortgage Corp., 122
Bird v. Parsons, 88
Bishop v. Okla., 243
Blake v. Gov't of V.I. Dept. of Housing, 550
Blakey v. Continental Airlines, Inc., 529
Blockbuster, Inc. v. Galeno, 597
Blonder-Tongue Labs., Inc. v. Univ. of Ill., 587
Blue Compass Corp. v. Polish Masters of Am., 111
Bockweg v. Anderson, 590
Boeing Co. v. Shipman, 514
Bors v. Johnson & Johnson, 67
Bonerb v. Richard J. Caron Found., 367, 372
Bowler v. U.S. Immigration and Naturalization Serv., 349
Boyer v. Snap-on Tools Corp., 118
Bracco Diagnostics, Inc. v. Amersham Health Inc., 457
Bracken v. Matgouranis, 29
Bradgate Assocs. Inc. v. Fellows, Read & Assocs., Inc., 142
Branch v. Tunnell, 315
Braud v. Transp. Serv. Co. of Ill., 373
Braun v. Lorillard Inc., 471–472
Bremen v. Zapata Off- Shore Co., 301, 307, 359
Breuer Elec. Mfg. Co. v. Toronado Sys., Inc., 393
Brinderson-Newberg Joint Venture v. Pacific Erectors, 310
Brink v. First Credit Resources, 373
Brokopp v. Ford Motor Co., 519
Bromwell v. Mich. Mut. Ins. Co., 134
Brooks v. Vassar, 290–291
Broussard v. Columbia Gulf Transmission Co., 194
Brown v. Capitol Air, Inc., 344
Brown v. Lockheed Martin Corp., 67, 69
Brown v. McBro Planning & Dev. Co., 530
Brunswick Corp. v. Sheridan, 548–549
Budinich v. Becton Dickinson & Co., 413
Burden v. Gen'l Dynamics Corp., 118
Burger King Corp. v. Rudzewicz, 58, 76, 83
Burke v. General Motors Corp., 128
Burke v. Smith, 413
Burlington Northern & Santa Fe Ry. Co. v. U.S. Dist. Ct., 444
Burnham v. Superior Court of Cal., 95
Bus. Guides, Inc. v. Chromatic Communs. Enterp., Inc., 141
Byrne v. Nezhat, 349
Cadent Ltd v. 3M Unitek Corp., 458
Caiola v. Berkshire Med. Ctr., Inc., 414
Cal. Scents v. Surco Prods., Inc., 507
Calder v. Jones, 81, 83
Calderon Rosado v. General Elec. Circuit Breakers, Inc., 591
Calderone v. U.S., 494
Calista Enterprises Ltd. v. Tenza Trading Ltd, 236
Cannon Mfg. Co. v. Cudahy Packing Co., 87
Canny v. Dr. Pepper/Seven-Up Bottling Group, Inc., 527
Car Carriers, Inc. v. Ford Motor Co., 154
Carden v. Arkoma Assocs., 45, 273
Carnegie-Mellon Univ. v. Cohill, 231
Carnite v. Granada Hosp. Group, Inc., 389
Carnival Cruise Lines, Inc. v. Shute, 65, 301
Carr v. State Farm Mut. Auto. Ins. Co, 431
Carson v. Am. Brands, Inc., 552, 554
Carter v. Macon Manor NRC, LLC, 395
Caruso v. Coleman Co., 447
Caterpillar Inc. v. Lewis, 135–136
Caterpillar, Inc. v. Williams, 30, 135–136
Catlin v. U.S., 544
Celotex v. Catrett, 493–96
Century Commodity Corp. v. Data-Trend Commodities Inc., 41
Certain Underwriters at Lloyds, London v. Warrantech Corp., 232
Chambers v. Capital Cities/ABC, 443
Chambers v. NASCO, Inc., 349
Chapman v. Barry, 45
Chase Manhattan Bank v. Celotex Corp., 579
Chauffers, Teamsters Helpers Local No. 391 v. Terry, 506
Chiquita Int'l Ltd. v. M/V Bolero Reefer, 472
Christian v. Mattel, Inc., 146
Chrysler Corp. v. Carey, 478
Cima v. Wellpoint Healthcare Networks, Inc., 329
Clark v. Associates Commercial Corp. v. Howard, 329
Clark v. Coats & Clark, Inc., 494
Clark v. Exxon Corp., 367
Clark v. State Farm Mutual Auto. Ins. Co., 52
Clements v. Airport Auth. of Washoe County, 591
Cliff v. Payco Gen'l Am. Credits, Inc., 375
Clough v. Rush, 525
Coast Fed. Bank, FSB v. United States, 556
Cohen v. Bd. of Trustees of the Univ. of Med. & Dentistry of N.J., 553
Cohen v. Beneficial Indus. Loan Corp., 414, 550
Cohen v. Office Depot, Inc., 413
Cohen v. Republic of the Philippines, 217
Coleman v. Conseco, Inc., 122
Coleman v. Milwaukee Bd. of School Directors, 259
Collision v. Int'l Chem. Workers Union, Local 217, 531
Colorado River Water Conserv. Dist. v. U.S., 295
Com/Tech Commn. Tech., Inc. v. Wireless Data Sys., Inc., 413
Commerce & Indus. Ins. Co. v. Grinnell Corp., 474
Commercial Nat'l Bank v. Demos, 212
Commonwealth of Massachusetts v. First National Supermarkets, Inc., 436
Competitive Tech. Inc. v. Fujitsu Ltd., 301
Compuserve, Inc. v. Patterson, 89, 295
Concession Consultants, Inc. v. Mirisch, 305
Conk v. Richard & O'Neil LLP, 122
Conley v. Gibson, 152, 156
Continental Cas. Co. v. Am. Nat'l Ins. Co., 330
Continental Cas. Co. v. Howard, 531
Continental Training Services, Inc. v. Cavazos, 552
Controlotron Corp. v. Perry Printing Corp., 307
Coopers & Lybrand v. Livesay, 550
Cooter & Gell v. Hartmarx Corp., 141, 143
Coover v. Saucon Valley Sch. Dist., 580
Corpus v. Bennett, 524
Correia v. Fitzgerald, 524
Cory v. Aztec Steel Building, Inc., 70, 74
Cottman Transmission Sys., Inc. v. Martino, 107
Coury v. Prot, 43
Coventry Sewage Assocs. v. Dworkin Realty Co., 48, 50
Credit Co. v. Aaron-Lincoln Mercury, 129
Cullen v. Margiotta, 548
Cunningham v. Hamilton County, 545
Cunningham v. Outten, 585
Cunningham v. Rothery, 315
Curtis Management Group, Inc. v. Academy of Motion Picture Arts &
Sciences, 198
Curtiss-Wright Corp. v. General Electric Co., 548
Cybersell, Inc. v. Cybersell, Inc., 89
Dadurian v. Underwriters at Lloyd's of London, 530
Daggett v. Comm. on Gov'tal Ethics & Election Practices, 217
Daimler AG v. Bauman, 67
DaimlerChrysler Corp. v. Cuno, 288–289
DakColl, Inc. v. Grand Central Graphics, Inc., 312
Dalminter, Inc. v. Jessie Edwards, Inc., 396
Dalton v. R & W Marine, Inc., 88
Danial v. Daniels, 48
Daniel v. Am. Bd. Of Emergency Med., 107
Dartmouth Review v. Dartmouth College, 318
Datskow v. Teledyne, Inc., Continental Products Div., 312
Davis v. Precoat Metals, 430, 476
D.C. Electronics, Inc. v. Nartron Corp., 397
De Aguilar v. Boeing Co., 124
De Antonio v. Solomon, 393
Debreceni v. Bru-Jell Leasing Corp., 64
Dempsey v. Atchison, Topeka & Santa Fe Ry. Co., 316
Denver & R.G.W.R. Co. v. Brotherhood of R.R. Trainmen, 111
Detoy v. San Francisco, 457
Devlin v. Transp. Communications Int'l Union, 531
DeWeerth v. Baldinger, 568–569
D.H. Blair & Co. v. Gottdiener, 65, 353
Diamond Shamrock Oil & Gas v. Comm'r of I.R.S., 213
Dick v. N.Y. Life Ins. Co., 514
Dickson v. Murphy, 193, 196
Digital Equip. Corp. v. Desktop Direct Inc., 550–551
Digital Props., Inc. v. City of Plantation, 290
Dimick v. Schiedt, 531
Dist. of Columbia Court of Appeals v. Feldman, 294
DiStefano v. Carozzi N. Am., Inc., 299
Dobrick-Peirce v. Open Options, Inc., 112
Doe v. Kerwood, 131
Doe v. Unocal Corp., 88
Don King Productions, 213
Donaldson v. Clark, 142–143
Donson Stores, Inc. v. American Bakeries Co., 437
Dove v. Wash. Area Metro. Transit Auth., 367
Drexel Heritage Furnishings, Inc. v. Furniture USA Inc., 441
Drooger v. Carlisle Tire & Wheel Co., 404
Druid Group, Inc. v. Dorfman, 64
Duha v. Agrium, Inc., 363
Dupre v. Fru-Con Eng'g, Inc., 543
Dura Automotive Sys., of Indiana, Inc. v. CTS Corp., 473
Durning v. First Boston Corp., 314
Dusenberry v. U.S., 257
Eagle v. American Tel. and Tel. Co., 53
Eastway Const. Corp. v. City of New York, 146
ECDC Envtl., L.C. v. New York Marine and Gen. Ins. Co., 437
Edmonson v. Leesville Concrete Co., 509
Edwards v. Occidental Chem. Corp., 373
E.E.O.C. v. Peabody West. Coal Co., 192
EFCO Corp. v. Iowa Ass'n of Bus. & Indus., 37
Effjohn Int'l Cruise Holdings, Inc. v. A & L Sales, Inc., 394
Effron v. Sun Line Cruises, Inc., 301
Ehorn v. Sunken Vessel Known as “Rosinco,” 97
E.I. du Pont de Nemours & Co. v. Phillips Petroleum Co., 539
Eichenholtz v. Brennan, 355
Elk Grove Unified School Dist. v. Newdow, 291
EMI April Music, Inc. v. 1064 Old River Rd., Inc., 567
Empire Healthchoice Assurance, Inc. v. McVeigh, 34
Empresa Lineas Maritamas Argentinas, S.A. v. Schichau-Unterweser A.G.,
362
English v. Cowell, 324
Ennis v. Queen Ins. Co. of Am., 128
Enron Oil Corp. v. Diakuhara, 567
EP Operating Ltd. Partnership v. Placid Oil Co., 329
Equal Employment Opp'y Comm'n. v. Peabody Western Coal Co., 195
Erie R. Co. v. Tompkins, 410
Eriline Co. S.A. v. Johnson, 317
ESAB Group, Inc. v. Centricut, Inc., 74, 84, 238
Espinoza v. U.S., 259
Executive Software N. Am., Inc. v. U.S. Dist. Ct., 229, 231
ExxonMobil Corp. v. Allapattah Serv., Inc., 40, 51, 168, 170, 220, 251
ExxonMobil Corp. v. Saudi Basic Indus. Corp., 293
F.D.I.C. v. Bathgate, 200
F.D.I.C. v. LeGrand, 538
Feathers v. McLucas, 73
Fed. Dept. Stores, Inc. v. Moitie, 581
Fed. Ins. Co. v. Tyoco Int'l, Ltd., 118
Federated Mut. Ins. Co. v. McKinnon Motors, LLC, 50
Federico v. Order of St. Benedict in R.I., 561
Ferens et ux. v. John Deere Co., 417
Ferrell v. Pierce, 583
Fietzer v. Ford Motor Co., 508
Fink v. Foley-Belsaw Co., 528
First of Michigan Corp. v. Bramlet, 108, 308
Fitzgerald v. Seaboard System, 44
FleetBoston Fin. Corp. v. FleetBostonFinancial.com, 94
Fletcher-Harlee Corp. v. Pote Concrete Contractors, Inc., 319
Flight Extenders, Inc. v. Lakewood Aircraft Serv., Inc., 205
Foman v. Davis, 367, 375
Ford v. Elsbury, 547
Foster Poultry Farms, Inc. v. Int'l Bus. Mach. Corp., 136
Franchise Tax Bd. Of Cal. V. Constr. Laborers Vacation Trust, 29
Freeport-McMoRan, Inc. v. KN Energy, Inc., 218
Friedman v. New York Life Ins. Co., 53
Frier v. City of Vandalia, 577
Fruend v. Nycomed Amersham, 526
Fuddruckers, Inc. v. KCOB I, LLC, 537
Fuesting v. Zimmer, Inc., 526
Gardiner v. V.I. Water & Power Auth., 197
Gargallo v. Merrill Lunch, Pierce, Fenner & Smith, 574
Garner v. Wolfinbarger, 555
Garr v. U.S. Healthcare, Inc., 143
Gasperini v. Ctr. for Humanities, Inc., 414
Gen'l Contracting & Trading Co., L.L.C. v. Interpole, Inc., 302
General Electric Co. v. Marvel Rare Metals Co., 242
Gerling Int'l Ins. Co. v. Comm'r of Internal Rev., 443
Ginett v. Computer Task Group, 546
Glaser v. Enzo Biochem, Inc., 367
Glater v. Eli Lilly & Co., 78
Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 96
Global Satellite Commun. Co. v. Starmill U.K. Ltd., 131
Go-Video, Inc. v. Akai Elec. Co., Ltd., 90
Goel v. Heller, 581
Goldlawr, Inc. v. Heiman, 302, 308
Goldwater v. Carter, 285
Gonzalez v. Chrysler Corp., 362
Goodyear Dunlop Tires Operations, S.A. v. Brown,, 76
Grable & Sons Metal Prods., Inc. v. Daure Engineering & Mfg., 32
Grace v. McArthur, 76
Gray v. Am. Radiator & Standard Sanitary Corp., 73
Gray v. Genlyte Group, Inc., 520
Great N. Ry. Co. v. Alexander, 128
Great Rivers Co-op. of S.E. Ia. v. Farmland Indus., Inc., 545
Great-West Life Annuity Ins. Co. v. Woldemicael, 191
Greater Yellowstone Coalition v. Bosworth, 355
Green v. Daimler Benz, A.G., 159
Green v. Lake of the Woods County, 46
Greyhound Exhibit Group, Inc. v. E.L.U.L. Realty Corp., 394
Grindell v. Am. Motors Corp., 472
Grochowski v. Phoenix Constr. Co., 388
Grossheim v. Freightliner Corp., 524
Grupo Dataflux v. Atlas Global Group, L.P., 40
Guaranteed Sys., Inc. v. Am. Nat'l Can Co., 209
Guaranty Trust Co. v. York, 410–411
Gucci America, Inc., v. Gold Ctr. Jewelry, 566
Gulfstream Aerospace Corp. v. Mayacamas Corp., 550
Gully v. First Nat'l Bank, 33
Gunn v. Minton, 35
Gust v. Flint, 72
Haas v. Jefferson Nat'l Bank, 194, 198
Hadges v. Yonkers Racing Corp., 143
Hall v. Norfolk So. Ry. Co., 374
Hamilton v. Atlas Turner, Inc., 302
Hanna v. Plumer, 411, 413
Hanson v. Denckla, 81–82, 96
Harleysville Mut. Ins. Co. v. Packer, 284
Harris v. Balk, 94
Harriscom Svenska AB v. Harris Corp., 548
Harrison v. M.S. Carriers, Inc., 207
Hart v. Clayton-Parker and Assocs., Inc., 182
Hartford Steam Boiler Inspection & Ins. Co. v. Quantum Chem. Corp., 227,
245, 248
Hartsel Springs Ranch of Co., Inc. v. Bluegreen Corp., 590
Harvey by Blankenbaker v. United Transp. Union, 590
Hawthorne Land Co. v. Occidental Chem. Corp., 388
Haynes v. Gasoline Marketers, Inc., 130
Hays County Guardian v. Supple, 231
Heitmann v. Concrete Pip Machinery, 474
Helzberg's Diamond Shops, Inc. v. Valley West Des Moines Shopping
Center, Inc., 194
Hemme v. Bharti, 208
Henderson v. U.S., 258–259
Henshell Corp. v. Childerston, 109
Henson v. CSC Credit Servs., 315
Herman v. Marine Midland Bank, 473
Hermeling v. Montgomery Ward & Co., 470
Hermes Consol., Inc. v. United States, 556
Hermsdorfer v. Am. Motors Corp., 472
Herrera v. Reicher, 585
Herrick v. SCS Commun., Inc., 45
Hertz Corp. v. Friend, 44
Hess v. Pawloski, 70
Hester Indus., Inc. v. Tyson Foods, Inc., 399
H.F. Livermore Corp. v. Aktiengesellschaft Gebruder Loeppfe, 396
Hickman v. Taylor, 434
Hidalgo v. Fagen, 509
Hilton v. Braunskill, 539
Hodgson v. Gilmartin, 112, 355, 360
Hoechst Celanese Corp. v. Nat'l Fire Union Fire Ins. Co. of Pittsburgh, 457
Hoffman v. Blaski, 353
Hogan v. Consolidated Rail Corp., 548
Holmes Group, Inc. v. Vornado Air Circulation Sys., 136
Holmgren v. State Farm Mut. Ins. Co., 438
Holston Investments, Inc. B.V.I. v. LanLogistics Corp., 877 F.3d 1068, 44
Home Ins. Co. v. Thomas Indus., Inc., 308
Honaker v. Smith, 517
Hoopeston Canning Co. v. Cullen, 83
Horizon Unlimited, Inc. v. Richard Silva & SNA, Inc., 347
Houston Indus. Inc. v. U.S., 547
Howard v. Wal-Mart Stores, Inc., 518
Hunter v. Earthgrains Co. Bakery, 144
Hurd v. American Hoist & Derrick Co., 516
Hurley v. Motor Coach Indus., 133
Hy Cite Corp. v. Advanced Marketing Int'l, Inc., 355
Ierardi v. Lorillard, Inc., 456
Iglesias v. Mut. Life Ins. Co., 181
Ill. Central R. Co. v. Parks, 582, 584
Illinois Central Gulf Railroad v. Parks, 584
In re 60 East 80th St. Equities, Inc., 344
In re Advanta Corp. Securities Litig., 158
In re Air Crash Disaster Near New Orleans, La., 363
In re Arthur Treacher's Franchisee Litig., 542
In re Bank of N.Y. Derivative Litig., 218
In re Blackwater Security Consulting, LLC, 36
In re Brand Name Prescription Drugs Antitrust Litig., 423
In re Briscoe, 135–136
In re Cendant Corp. Sec. Litig., 437
In re Clerici, 538
In re Daily, 585
In re Dierschke, 394
In re First T.D. & Inv., Inc., 549
In re Flor, 556
In re Keegan Mgmt. Co., Sec. Litig., 349
In re New Motor Vehicles Canadian Export Antitrust Litig., 78
In re Pioneer Hi-Bred Int'l, Inc., 468
In re Polymedica Corp. Sec. Litig., 474
In re Sealed Case, 431, 433, 447
In re Shell Oil Refinery, 473
In re Silicon Graphics, Inc. Securities Litig., 315
In re Zyprexa Prods. Liability Litig., 598
Indianapolis Colts v. Mayor & City Council of Baltimore, 212
Industrial Hard Chrome, Ltd. v. Hetran, Inc., 456
Injection Research Specialists v. Polaris Indus., L.P., 111
Ins. Co. of the West v. United States, 555
Ins. Corp. of Ireland v. Compagnie des Bauxites de Guinee, 302
Intamin Ltd. v. Magnetar Tech., Corp., 144
Intera Corp. v. Henderson, 300
International Shoe Co. v. Washington, 79
Interstate Life Assurance Co. v. Sedlak, 211
Int'l Science & Technology Institute, Inc. v. Inacom Comms., Inc., 26
Ivey v. Wilson, 543
J. McIntyre Mach. Ltd. v. Nicastro, 85
J&J Celcom v. AT&T Wireless Serv., Inc., 469
J.A. Olson Co. v. City of Winona, 44
Jackson v. West Telemarketing Corp. Outbound, 418
Jaffe v. Accredited Surety & Cas. Co., Inc., 581
Jaffe v. Redmond, 433
Jean Alexander Cosmetics, Inc. v. L'Oreal USA, Inc., 585
Jenkins v. National Union Fire Ins. Co. of Pa., 129
Jewell v. Grain Dealers Mut. Ins. Co., 52
Jin v. Ministry of State Security, 224, 230
John v. Sotheby's Inc., 212
Johnson v. De Grandy, 294
Johnson v. Heublein Inc., 130
Johnson v. Oroweat Foods Co., 367
Jones v. Bock, 317
Jones v. Ford Motor Credit Co., 223
Jones v. GNC Franchising, Inc., 359
Jones v. Weibrecht, 301
Jumara v. State Farm Ins. Co., 352
Justice v. Atchison, Topeka and Santa Fe Ry. Co., 125
Jyachosky v. Winter, 308
Kalb v. Feuerstein, 54
Karibian v. Village Green Mgmt. Co., 231
Kendall v. GES Exposition Servs., Inc., 449
Kenneth Leventhal & Co. v. Joyner Wholesale Co., 203
Kerobo v. Southwestern Clean Fuels, Corp., 351
Kerr v. United States Dist. Court, 557
Key Bank v. Tablecloth Textile Co., 394
King v. Pratt & Whitney, 457
Kircher v. Putnam Funds Trust, 135
Klaxon Co. v. Stentor Elec. Mfg. Co., 416
Kline v. Burke Constr. Co., 21
Klipsch, Inc. v. WWR Tech., Inc., 590
Kneeland v. Nat'l Collegiate Athletic Ass'n, 218
Krisa v. Equitable Life Assurance Soc'y, 468
Kugler v. Helfant, 295
Kulko v. Superior Court, 82
Kusens v. Pascal Co., Inc., 515
Kyle v. Morton High School, 158
Laber v. Harvey, 367
Laborers' Welfare Fund v. Lowery, 302
LaFont v. Decker-Angel, 338
Laguna v. Am. Export Isbrandtsen Lines, 502
Lake v. Jones, 590
Landon v. Hunt, 144
Langadinos v. Am. Airlines, Inc., 318
Langsam-Borenstein Partnership by Langsam v. NOC Enterp., Inc., 205
Larsen v. Senate of Commonwealth of Penn., 551
Latino v. Kazer, 529
Lauro Lines S.R.L. v. Chasser, 551
Lavender v. Kurn, 516
Lawler v. Fireman's Fund Ins. Co., 418
Layman v. Southwestern Bell Tel. Co., 338
Leatherman v. Tarrant County Narcotics Intell. & Coord. Unit, 158
Lee v. Trans Am. Trucking Serv., Inc., 43
Legault v. Zambarano, 344
Legg v. Chopra, 414
Leroy v. Great W. United Corp., 100
Lesnik v. Public Industrials Corporation, 242
Leveto v. Lapina, 317
Lewis v. Cont'l Bank Corp., 291
Lewis v. Herrman's Excavating, Inc., 460
Lewis v. Time Inc., 507
Lewis v. U.S. Slicing Mach. Co., 152
Liberty Mut. Ins. Co. v. Midwest Cold Storage & Ice Corp., 389
Liberty Mut. Ins. Co. v. Wetzel, 544, 547
Lieb v. Topstone Indus. Inc., 142, 348
Lifshitz v. Walter Drake & Sons, Inc., 526
Lind v. Schenley Indus., Inc., 528, 529
Lindsay v. Gov't Employees Ins. Co., 224–226, 229
Link v. Wabash R.R., 399
Lively v. Wild Oats Markets, Inc., 133
Lomano v. Black, 107
Long Term Capital Holdings v. U.S., 471
Lony v. E.I. DuPont de Nemours & Co., 356
Lopez-Gonzalez v. Municipality of Comerio, 317
Los Angeles Branch NAACP v. Los Angeles Unified School Dist., 576
Louisville & Nashville R.R. v. Mottley, 27
Lovell v. State Farm Mut. Auto. Ins. Co., 53
Lowdermilk v. U.S. Bank Nat'l Ass'n., 47
Lujan v. Defenders of Wildlife, 289
Lundquist v. Precision Valley Aviation, 42
Lutomski v. Panther Valley Coin Exchange, 396
Magnum Foods, Inc. v. Continental Cas. Co., 515
Malautea v. Suzuki Motor Co., Ltd., 350
Manguno v. Prudential Property & Cas. Ins. Co., 49
Marder v. Lopez, 314
Marex Titanic, Inc. v. Wrecked and Abandoned Vessel, 94
Markham v. Allen, 292
Markhorst v. Rigid, Inc., 374
Markvicka v. Broadhead-Garrett Co., 203
Marques v. Federal Reserve Bank of Chicago, 397
Marriott Int'l Resorts, L.P. v. U.S., 555
Marsh v. Coleman Co., 372
Martens v. Smith Barney, Inc., 557
Martin v. Automobili Lamborghini Exclusive, Inc., 350
Martin v. Delaware Law School of Widener Univ., 329
Martin v. Franklin Capital Corp. (2005), 233
Martino v. McDonald's Sys., Inc., 578
Mas v. Perry, 41
Matrixx Initiatives, Inc. v. Siracusano, 156
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 497
Mattel, Inc. v. Bryant, 146, 197
Matter of Gober, 584
Matter of Yagman, 349
Matthews v. Brookstone Stores, Inc., 302
Max Arnold & Sons, LLC v. W.L. Hailey & Co., 316
McCann v. Newman Irrevocable Trust, 42, 284
McCauley v. Ford Motor Co., 49
McClaughlin v. Fellows Gear Shaper Co., 519
McCullough v. Ligon, 29
McCurtain County Production Corp. v. Cowett, 131
McFarlin v. Conseco Serv., LLC, 557
McGee v. Int'l Life Ins. Co., 82, 87
McGinn v. Burlington Northern R.R. Co., 495
McKeel v. City of Pine Bluff, 543
McKey v. Fairbairn, 502
McKinnon v. City of Berwyn, 513
Meagher v. Long Island R.R. Co., 520
Med. Mut. of Ohio v. de Soto, 239
Meehan, 567
Mendez v. Teachers Ins. & Annuity Ass'n, 212
Mendota Ins. Co. v. Hurst, 579
Mennonite Bd. Of Missions v. Adams, 261
Mercantile Capital Partners v. Agenzia Sports, Inc., 107
Meridian Sec. Ins. Co. v. Sadowski, 49
Merrell Dow Pharm., Inc. v. Thompson, 28
Merrill Lynch, Pierce, Fenner and Smith, Inc. v. ENC Corp., 30, 35, 197
Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Manning, 30, 35, 197
Metro. Life Ins. Co. v. Taylor, 36
M.F. Patterson Dental Supply v. Wadley, 159
Miami Herald Pub. Co. Div. of Knight-Ridder Newspapers, Inc. v. Ferre,
131
Middle Tenn. News Co. v. Charnel of Cincinnati, Inc., 52
Middlesex County Ethics Comm. v. Garden State B. Ass'n., 295
Miedema v. Maytag Corp., 597
Miller v. Grgurich, 40
Miller v. Mer, 283
Minn. Supply Co. v. Raymond Corp., 338
Mitchell v. Forsyth, 551
Mitchell v. Gonzales, 519
Mitrano v. Hawes, 107
Mitzel v. Westinghouse Elec. Corp., 423
Mobley v. McCormick, 348
Moe v. Avions Marcel Dassault-Breguet Aviation, 20
Mohr v. Margolis, Ainsworth & Kinlaw Consulting, Inc., 307
Monahan v. Holmes, 97
Monfore v. Phillips, 503
Montana v. U.S., 573
Montecatini Edison, S.P.A. v. Ziegler, 184
Moore v. Baker, 371–372
Moore v. Dixon, 107, 244
Moore v. Permanente Med. Group, Inc., 130
Moore v. Western Surety Co., 347
Moreland v. Barrette, 414
Morgan v. City of New York, 436
Morongo Band of Mission Indians v. Ca. St. Bd. of Equalization, 212
Morris v. Princess Cruises, Inc., 120
Morris v. Wachovia Sec., Inc., 145
Mosley v. General Motors Corp., 189
Muenzberg v. Barnes, 111
Mullane v. Central Hanover Bank & Trust CO., 257
Munoz v. England, 310
Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 126
Musser v. Gentiva Health Serv., 469
N. Ind. Gun & Outdoor Shows, Inc. v. South Bend, 315
NAACP, Detroit Branch v. Detroit Police Officers Assoc., 576, 583
Naghiu v. Inter-Continental Hotels Group, Inc., 159
NAS Elecs., Inc. v. Transtech Elecs. Pte Ltd., 389
Nat'l Bank of Washington v. Dolgov, 548
Nat'l Dev. Co. v. Triad Holding Corp., 259
Nat'l Equip. Rental, Ltd. v. Szukhent, 301
Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Aerowhawk Aviation, Inc.,
330
National Org. for Women v. Mutual of Omaha Ins. Co., 53
Nat'l Park Hospitality Ass'n. v. Dep't of Interior, 289
Nelson v. Kefer, 49
New Jersey Sports Prods., Inc. v. Don King Prods., Inc., 212
New Mexico v. Trujillo, 547
New York Life Ins. Co. v. Taylor, 562
New York State Nat. Organization for Women v. Terry, 552
New York v. Cyco.net, Inc., 112
Newman-Green, Inc. v. Alfonzo-Larrain, 43
Nivens v. Gilchrist, 295–296
Nixon v. U.S., 285
Noonan v. Winston Co., 78
Norris v. Wal-Mart Stores, Inc., 127
Northeast Ohio Coalition for Homeless and Serv. Employees Int'l. v.
Blackwell, 554
Nowak v. Tak How Investments, Ltd., 86
N.Y. Life Ins. Co. v. Brown, 392–393
NYLife Distribs., Inc., v. Adherence Group, Inc., 213
O'Brien v. Alexander, 343
O'Brien v. City of Syracuse, 576
Ocean Atlantic Dev. Corp. v. Willow Treat Farm L.L.C., 337, 339
Office of Pers. Mgmt. v. Am. Fed'n of Gov't Employees, AFL-CIO, 553
Ohio Forestry Ass'n, Inc. v. Sierra Club, 290
Olympia Equipment Leasing Co. v. Western Union Tel. Co., 538
Olympic Sports Prods., Inc. v. Universal Athletic Sales Co., 419
OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 75
Omni Capital Int'l, Ltd. v. Rudolf Wolff & Co., 258, 260
One Beacon Ins. Co. v. JNB Storage Trailer Rental Corp., 242
Ontel Prods., Inc. v. Project Strategies Corp., 355
Oppenheimer Fund, Inc. v. Sanders, 431
Orb Factory Ltd. v. Design Science Toys, Ltd., 306
Osborn v. Bank of the U.S., 27
Owen Equipment & Erection Co. v. Kroger, 253
Pacitti v. Macy's, 430
Palcko v. Airborne Express, Inc., 330
Palmore v. Sidoti, 292
Pan Am. World Airways, Inc. v. Lopez, 363
Panavision Int'l, L.P. v. Toeppen 81, 89
Paparelli v. Prudential Ins. Co., 457
Parke-Chapley Constr. Co. v. Cherrington, 565
Parker v. Colombia Pictures Indus., 388
Parklane Hosiery Co. v. Shore, 582, 587–588
Patterson v. MacDougall, 196
Payne v. Brake, 394
PdP Parfums de Paris v. Int'l Fragrances, 159
Peabody v. Hamilton, 76
Pebble Beach Co. v. Caddy, 80, 89
Pelletier, 347
Penn Millers Ins. Co. v. U.S., 375
Pennoyer v. Neff, 58, 532
Pennsylvania Railroad v. Chamberlain, 517
Penrod Drilling Co. v. Johnson, 111
People ex rel. Wheeler v. So. Pac. Transp. Co., 467
Pepsico, Inc., v. Board of Trustees of the W. Conference of Teamsters
Pension Trust Fund, 111
Percy v. San Francisco Gen. Hosp., 375
Peregrine Myanmar Ltd. v. Segal, 194
Perez v. Posse Comitatus, 346
Perkins v. Benguet Consol. Mining Co., 78
Peterson v. Wilson, 520
Phillips Petroleum Co. v. Shutts, 419
Phillips v. Bowen, 526
Phillips v. General Motors Corp., 479
Picciotto v. Continental Cas. Co., 225
Pieczenik v. Dyax Corp., 72
Pierce v. Shorty Small's of Branson, Inc., 308
Pikofsky v. Jem Oil Co., 393
Pinker v. Roche Holdings, Ltd., 91, 308
Pioneer Hi-Bred Int'l v. Holden Found. Seeds, Inc., 232
Piper Aircraft Co. v. Reyno, 361
PKWare v. Meade, 108, 113, 243, 354
Plant v. Blazer Financial Services, 181
Plaut v. Spendthrift Farm, Inc., 589
Poole v. Textron, Inc. 476, 478–479
Porn v. Nat'l Grange Mut. Ins. Co., 576
Port-Wide Container Co. v. Interstate Maint. Corp., 396
Poulos v. Naas Foods, Inc., 128
Preferred RX, Inc. v. Am. Prescription Plan, Inc., 543
Price v. Alfa Mut. Ins. Co., 29
Price v. CTB, Inc., 202
Pro Billiards Tour Ass'n. v. R.J. Reynolds Tobacco Co., 479
Professional Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc.,
144
Protestant Mem. Med. Center, Inc. v. Maram, 290
Provident Tradesmens Bank & Trust Co. v. Patterson, 197
Prudential Prop. & Cas. Ins. Co. v. Stump, 320
Publicis Communication v. True North Communications Inc., 577
Publicker Indus. Inc. v. U.S., 351
Puerto Rico Aqueduct and Sewer Auth. v. Metcalf & Eddy, Inc., 551
Pullman Co. v. Jenkins, 117
Puricelli v. CAN Ins. Co., 189
PYCA Indus. v. Harrison County Waste Water Management Dist., 547
Q Int'l Courier, Inc. v. Smoak, 181
Quinn v. Owen Fed. Bank FSB, 231
Railroad, Inc., 27–28, 44, 152–153, 296, 410, 516–517, 584–585
Rainbow Mgmt. Group., Ltd. v. Atlantis Submarines Hawaii, L.P., 208
Raines v. Byrd, 288
Rainey v. Am. Forest & Paper Ass'n., Inc., 456
Randazzo v. Eagle-Picher Indus., Inc., 151
Rashidi v. Albright, 333, 393
Rates Technology Inc. v. Nortel Networks Corp., 302
Rector v. Approved Fed. Sav. Bank, 345
Red Wing Shoe Co. v. B-Jays USA, Inc., 356
Redfern v. Sullivan, 576
Regal Stone Ltd. v. Longs Drug Stores California, 132
Reid v. San Pedro, Los Angeles & Salt Lake R.R., 517
Reiter v. Cooper, 547
Revell v. Lidov, 89
Reyes v. Freebery, 550
Richardson v. Nassau County, 567
Rich-Mix Products, Inc. v. Quickrete Companies, Inc., 108
Ricke v. Armco, Inc., 332
Ridder Bros., Inc. v. Blethen, 49
Rios v. Davis, 584
Rivera Castillo v. Autokirey, Inc., 530
Roberts v. Corrothers, 331
Robinette v. Jones, 583, 586
Roche v. Evaporated Milk Ass'n, 557
Rockwell Int'l Corp. v. H. Wolfe Iron & Metal Co., 446
Rodick v. City of Schenectady, 143, 146
Romine v. CompuServe Corp., 295
Rooker v. Fidelity Trust Co., 293
Rose v. Giamatti, 45, 131
Ross v. Rell, 554
Roth v. Green, 345
Rozier v. Ford Motor Co., 567
Rush v. Smith, 543
Rutherford v. Merck & Co., 123
S&W Enterp., L.L.C. v. Southtrust Bank of Alabama, NA, 389
Sagent Technology, Inc. v. Micros Sys., Inc., 306
Salgado v. Gen'l Motors Corp., 469
Salpoglou v. Schlomo Widder, 112
Salve Regina College v. Russell, 419
Samuel-Bassett v. KIA Motors Am., Inc., 125
Santelli v. Electro-Motive, 434
Sanyo Laser Prods., Inc. v. Arista Records, Inc., 428
Saval v. BL Ltd., 50
Schaefer v. First Nat'l Bank of Lincolnwood, 549
Scherer v. Equitable Life Assurance Soc'y of U.S., 48
Schlagenhauf v. Holder, 460
Schmitt v. Beverly Health & Rehab. Serv., Inc., 502
Schoot v. U.S., 201
Schrag v. Simpson, 347
Schultze v. DaimlerChrysler Corp., 353, 354
Schwarm v. Craighead, 229–230
Searock v. Stripling, 443
Sears, Roebuck & Co. v. Mackey, 547
SEC v. Lucent, 319–320
Semtek Int'l Inc. v. Lockheed Martin Corp., 572
Senate Select Committee v. Nixon, 21
Seven Hanover Assocs., LLC v. Jones Lang LaSalle Americas, Inc., 437
Shaffer v. Heitner, 96
Shamrock Oil & Gas Corp. v. Sheets, 116
Sheets v. CTS Wireless Components, Inc., 189
Shell Oil Co. v. Aetna Casualty & Sur. Co., 367
Shoshone Mining Co. v. Rutter, 31
Shuffle Master Inc. v. Progressive Games, Inc., 476
Silver Sage Partners, Ltd. v. U.S. Dist. Court, 558
Singh v. George Washington University, 555
Sinochem Int'l Co. Ltd. v. Malaysia Int'l Shipping Corp., 362, 551
Skidmore Energy, Inc., v. KPMG, 143
Skillin v. Kimball, 524
Slayton v. Am. Exp. Co., 373
Smart v. Goord, 353
Smelt v. County of Orange, 297
Smith Pet. Serv. Int'l v. Monsanto Chem. Co., 216
Smith v. Colonial Penn Ins. Co., 306, 357
Smith v. Islamic Emirate of Afghanistan, 261
Smith v. Kansas City Title & Trust Co., 33
Smith v. Kirkpatrick, 576
Smith v. Yale Univ., 308
Smothers v. Solvay Chem., Inc., 468
Snell v. Mayor and City Council of Havre de Grace, 576
Snyder v. Harris, 53
So. New England Tel. Co. v. Global NAPS, Inc., 370
Sobley v. So. Natural Gas Co, 514
Sopha v. Owens-Corning Fiberglas Corp., 575
Sosa v. Airprint Sys., Inc., 388
Souran v. Travelers Ins. Co., 347
Southern Boston Mgmt. Corp. v. BP Prods. N. Am. Inc., 204
Southern States Rack & Fixture, Inc. v. Sherwin-Williams Co., 470
Southland Sec. Corp. v. Inspire Ins. Solutions, Inc., 157
Sovereign Sales, L.L.C. v. New York Accessory Group, Inc., 204
Spearman Indus., Inc. v. St. Paul Fire & Marine Ins. Co., 471
St. Paul Mercury Indem. Co. v. Red Cab Co., 47
St. Paul Reinsurance Co. v. Commercial Fin. Corp., 441
Stalnaker v. Kmart Corp., 479
Starlight Int'l Inc. v. Herlihy, 442
State Exchange Bank v. Hartline, 350
State Farm Fire & Cas. Co. v. Tashire, 38, 212
State Farm Fire & Cas. Co. v. Century Home Components, 588
Steel Valley Auth. v. Union Switch & Signal Div., 134
Steffan v. Cheney, 430
Stelax Indus., Ltd. v. Donahue, 239
Stock West Corp. v. Taylor, 40
Stone v. Dept. of Aviation, 577
Stradford v. Zurich Ins. Co., 157
Strawbridge v. Curtiss, 38
Stuart v. Spademan, 88
Studio Art Theatre of Evansville, Inc. v. City of Evansville, Ind., 583
Suber v. Chrysler Corp., 48
Sun Oil Co. v. Wortman, 419
Sunview Condo. Ass'n v. Flexel Int'l, 300
Swedberg v. Marotzke, 397
Swierkiewicz v. Sorema, 158
Swift v. Tyson, 409
S.W.S. Erectors, Inc. v. Infax, Inc., 124
Sykes v. Hengel, 324
Sylvester v. City of N.Y., 530
Taylor v. CSX Transp., Inc., 243
Telectron v. Overhead Door Corp., 350
Temple v. Synthes Corp., Ltd., 193
Tesser v. Bd. of Ed., 528
Testa v. Katt, 54
Tex. Railroad Comm'n. v. Pullman, 296
Theilmann v. Rutland Hospital, Inc., 399
Thesleff v. Harvard Trust Co., 47
Thomas v. Capital Security Serv., Inc., 143
Thompson v. Altheimer & Gray, 509
Thompson v. Dep't of Housing & Urban Dev., 431
Thompson v. Duke, 143
Thompson v. Haskell Co., 472
Ticketmaster-New York, Inc. v. Alioto, 86
Tinius v. Carroll County Sheriff Dept., 229
Toms v. Links Sports Mgmt. Group, L.P., 431
Tongkook Am. v. Shipton Sportswear Co., 47
Too, Inc. v. Kohl's Dept. Stores, Inc., 8, 18, 35, 41, 49, 60, 82, 91, 142, 147,
156, 167, 192, 195, 204, 207, 223, 235, 264, 290, 302, 309, 330, 333, 423,
427, 477, 503, 506, 518, 530–531, 544, 548, 557
Touchcom, Inc. v. Bereskin & Parr, 90
Transclean Corp. v. Jiffy Lube Int'l., Inc., 589
Travelers Health Ass'n v. Va., 80
Tri-Ex Enterprises, Inc. v. Morgan Guaranty Trust Co., 371
Triggs v. John Crump Toyota, Inc., 121
Truck-a-Tune, Inc. v. Re, 212
Trustees of the Univ. of Pennsylvania v. Mayflower Transit, Inc., 319
Tull v. U.S., 506
Turner v. CF&I Steel Corp., 196
Uffner v. La Reunion Francaise, S.A., 107
United Mine Workers of Am. v. Gibbs, 223
United States v. Dist. Council of New York City and Vicinity of the United
Brotherhood of Carpenters and Joiners of Am., 436
United States v. J.M. Taylor, 456
United Steelworkers of Am. v. R.H. Bouligny, Inc., 45
Unitherm Food Sys., Inc. v. Swift-Eckrich, 526
Univ. of S. Ala. v. Am. Tobacco Co., 398
Univ. of Tex. v. Vratil, 448
Upjohn Co. v. U.S., 434
U.S. v. United Shoe Machinery Corp., 433
U.S. E.E.O.C. v. Caesars Entertainment, Inc., 457
U.S. ex rel. Bilyew v. Franzen, 562
U.S. ex rel. Englund v. Los Angeles County, 451
U.S. ex rel. Tiesinga v. Dianon Systems, Inc., 457
U.S. v. An Article of Drug, 530
U.S. v. Botefuhr, 237
U.S. v. Diabetes Treatment Centers of Am., Inc., 544, 551, 558
U.S. v. First Nat'l Bank of Circle, 388, 502
U.S. v. Indrelunas, 544
U.S. v. Konovsky, 583
U.S. v. Mercedes-Benz of North Am., 398
U.S. v. Reyes, 400
U.S. v. Reynolds, 433
U.S. v. Rice, 135
U.S. v. Sioux Nation, 589
U.S. v. Swiss Am. Bank, Ltd., 90
Ushman v. Sterling Drug, Inc., 129
Valdes v. Wal-Mart Stores, Inc., 133
Valentinn v. Hosp. Bella Vista, 41
Van Dusen v. Barrack, 356, 416
Vance v. U.S., 470
Vereda, Ltda. v. United States, 555
Verizon Md., Inc. v. Global Naps, Inc., 35
Versa Prods., Inc. v. Home Depot, USA, Inc., 399
Viacom, Inc. v. Harbridge Merchant Servs., Inc., 156
Vines v. Univ. of La. at Monroe, 582
Vitalo v. Cabot Corp., 468
VMS/PCA Ltd. Partnership v. PCA Partners Ltd. Partnership, 352
Von Zuckerstein v. Argonne Nat'l Lab., 514
Vt. Teddy Bear Co. v. 1-800 Beargram Co., 391
Vuitton v. White, 553
Walden v. Fiore, 80
Walker v. Armco Steel Corp., 414
Walker v. Norwest Corp., 145
Walkill 5 Assocs. II v. Tectonic Eng'r, P.C., 203–204
Warger v. Shauers, 520, 524
Warth v. Sedlin, 291
Washington State Physicians Ins. Exchange & Ass'n. v. Fisons Corp., 445
Wasson v. Riverside County, 311
Watergate Landmark Condo. Unit Owner's Ass'n v. Wiss, Janey, Elstner
Ass'n., 203
Watson v. Blankinship, 188
Watson v. City of Newark, 542
Weathington v. United Behavioral Health, 134
Weiss v. Nat'l Westminster Bank, PLC, 437
Wennik v. Polygram Group Distrib., Inc., 524
Whole Women's Health v. Lakey, 468
Wickstrom v. Ebert, 393
Wight v. Bankamerica Corp., 158
Wild v. Subscription Plus, Inc., 308
Wilderness Soc'y v. Alcock, 288
Will v. Hallock, 550
Will v. United States, 557
Williams v. Bd. Of City Comm'rs., 448
Williams v. Kleppe, 49
Williams v. Lehigh Valley R.R. Co., 456
Williams v. Runyon, 527
Williamson v. Consol. Rail Corp., 529
Wilson v. Belin, 73
Wilson v. Lakner, 456
Wilson v. U.S., 356
Wise v. Wachovia Securities, LLC, 45
Wood v. Worachek, 374
Woods v. Interstate Realty Co, 412
Workman v. Frito-Lay, Inc., 519
World-Wide Volkswagen Corp. v. Woodson, 58, 84
Yannacopoulos v. Gen'l Dynamics Corp., 543
Yavuz v. 61 MM, Ltd., 361
Young & Assocs. Public Relations, LLC v. Delta Air Lines, Inc., 512
Young v. Lepone, 375
Younger v. Harris, 295
Zielinski v. Philadelphia Piers, Inc., 336
Zippo Mfg. Co. v. Zippo Dot Com, Inc., 88
Zubalake v. UBS Warburg LLC, 461
 Series Editor's Foreword
The Carolina Academic Press Mastering Series is designed to provide
you with a tool that will enable you to easily and efficiently “master” the
substance and content of law school courses. Throughout the series, the
focus is on quality writing that makes legal concepts understandable. As a
result, the series is designed to be easy to read and is not unduly cluttered
with footnotes or cites to secondary sources.
In order to facilitate student mastery of topics, the Mastering Series
includes a number of pedagogical features designed to improve learning
and retention. At the beginning of each chapter, you will find a “Roadmap”
that tells you about the chapter and provides you with a sense of the
material that you will cover. A “Checkpoint” at the end of each chapter
encourages you to stop and review the key concepts, reiterating what you
have learned. Throughout the book, key terms are explained and
emphasized. Finally, a “Master Checklist” at the end of each book
reinforces what you have learned and helps you identify any areas that need
review or further study.
We hope that you will enjoy studying with, and learning from, the
Mastering Series.

Russell L. Weaver
Professor of Law &
Distinguished University
Scholar
University of Louisville, Louis
D. Brandeis School of Law
 Introduction and
Acknowledgments
This book is the product of 15 years of teaching civil procedure on top of
almost 30 doing federal civil litigation. It is designed to bring the practical
aspects of civil procedure in focus while addressing the policy issue often
focused on in law school. Profound thanks to Cindy Schiesel at Palo Verde
High School and Ruth Gardner at the University of Arizona for helping me
learn to write more clearly.
Chapter 1

Courts Decide Claims

Claims Roadmap
This chapter explains the basic building block of civil procedure: that federal courts resolve
claims between parties. The “claim” is the fundamental unit of federal civil procedure.

This book is about civil procedure, and more particularly the rules and
law that govern adjudication of civil lawsuits filed in federal court in the
United States. Many states have rules that govern civil lawsuits filed in
state court that are quite similar to the law we will discuss here, so much of
what you learn in this book likely applies in state courts. On the other hand,
however, many states have differently worded rules, or rules that, despite
being identical to the Federal Rules of Civil Procedure (the “Rules”), have
been interpreted differently. So, our focus will be solely on the Rules, but
some of what we study will apply in state court practice.
What is a civil lawsuit? It is when somebody sues someone. Civil
lawsuits are typically filed by a private party with the goal of having the
government — through a court — resolve a dispute by issuing some sort of
decision that binds both parties. More specifically, a civil lawsuit is usually
filed to have a court (jury or judge) determine whether the party who
believes it has been harmed — the plaintiff — has proven facts that entitles
it to obtain relief against the party it has sued — the defendant. In the
simplest case, a court decides whether the plaintiff can recover for a claim
against the defendant, and, if so, what relief (e.g., money for damages the
defendant caused to the plaintiff) the plaintiff is entitled to receive.

A. Lawsuits Begin with Clients

With that brief background, let us start at the beginning. A lawsuit starts
when a client walks into a lawyer's office and says, “I think I've been
wronged” (or more colorful language). Lawyers know that it is not enough
to justify filing a suit. It may be that a client feels they have been wronged,
or even that the lawyer concludes that something unfair or immoral has
happened to the client. But that does not mean the law provides a remedy.
Instead, lawyers know that, before a lawsuit can be filed, the lawyer must
investigate and determine whether the lawyer can likely prove a “claim”
that entitles the client to relief in court. Substantive law “creates” claims. At
the most basic level of civil lawsuits, a court decides whether one party,
called the plaintiff, proved the elements of a “claim” against the other party,
called the defendant. Substantive law defines the “elements” of a claim.
For example, a plaintiff injured by a defendant in a car wreck can prove a
claim of negligence; if the plaintiff does so, a “judgment” will be entered
that can result in the defendant having to pay the plaintiff money. Another
example of a claim is one called “battery.” If a client tells a lawyer that
someone punched her, the lawyer will examine the substantive law to
determine whether this action constitutes a claim upon which relief can be
granted — if believed by a jury, the court will enter a judgment that makes
the defendant pay the plaintiff money (if the defendant has any). In your
torts class, you will learn that punching someone gives rise to a claim for
battery, or negligence, or both. If, under the substantive law, these facts, if
true, show the plaintiff is entitled to relief, then the lawyer may file a
lawsuit. Substantive law is what you will study in most classes.
If the lawyer believes that the law and facts show his client has claim
against a defendant, the lawyer can file a lawsuit. At its core, the essential
purpose of civil litigation is to decide which party is entitled to prevail on
one or more “claims” by a plaintiff against a defendant.
Procedural law regulates how the plaintiff's lawyer begins the process of
litigating a claim, and then how the parties and the court proceed to
determine whether the plaintiff will recover money. Procedure is about how
to resolve a claim, not defining the circumstances in which the plaintiff
should get money, or not, for what the defendant has done. Procedural law
governs what the lawyer must do to file a lawsuit (she files a “complaint,”
we'll see.) Procedural law also controls the various steps that the parties will
then go through. The end result, at least in the trial court, may be a jury
trial. If the plaintiff persuades a jury that the facts needed to establish a
claim are true, then after the jury verdict, the court will enter an order,
called a “judgment,” awarding the plaintiff damages. The plaintiff can use a
judgment to force the defendant to pay money up to the amount of those
damages.
In most of your classes, you will study substantive, not procedural, law.
Although substance and procedure are distinct, they are both important. A
lawyer who knows substantive law, but not procedure, will not do a good
job for their client. Likewise, a lawyer who understands procedural law, but
not the underlying substantive law, will fail.
Since what constitutes a “claim” turns on substantive law — the stuff
learned in your other courses — those other courses, in some ways, provide
the foundation for civil procedure. Without knowing what a “claim” is, or
what elements of law make up a claim, you will be unable to understand
civil procedure. This chapter, therefore, provides some forest-from-the-trees
views of what a “claim” is.

B. What Is a “Claim”?
The key point to take away is that courts follow rules of procedure to
decide each claim (and, as we will see, defenses to claims), not “lawsuits”
or “disputes.” A “claim” is a set of allegations that, if true, would mean that
the party asserting the claim is entitled to relief (usually money) from the
party against whom the claim is asserted. The substantive law dictates what
facts are needed to support a claim and how much money (or other
remedies) a party can get. If you start with a focus on what “claim” or
“claims” are involved, a lot of the Rules and law we will cover will make
sense.
Oddly, however, despite the repeated mention of a “claim” in the Rules
and pertinent federal statutes, these sources of law do not define it. For
example, Rule 8(a) provides that a “pleading that states a claim for relief”
must contain a “short and plain statement of the claim showing that the
pleader is entitled to relief.” Similarly, Rule 12(b)(6) allows a party against
whom a claim is asserted (typically the defendant) to move to dismiss the
claim for “failure to state a claim upon which relief can be granted.” In
summation, the Rules state a court may dismiss a pleading if the pleading
does not set forth a “statement of the claim showing that the pleader is
entitled to relief,” yet the Rules fail to explain precisely what a “claim” is.
Rather than the Rules describing the definition of a claim, state common
law and state and federal statutes — the focus of your other courses — tell
what a “claim” is. Particularly, within the realms of those sources of law,
claims define the boundaries of when someone can sue for breach of
contract, for battery, or for negligence. So let us look at a few claims you
have probably explored or are about to learn in your other classes.
In torts, for example, the laws of most states do not create a general “duty
to rescue.” If I am walking along the beach and you are drowning, I can just
stand there, and no one can sue me for not rescuing you. Instead, to state a
claim upon which relief can be granted, a plaintiff must allege more than
simply stating that “he was walking by and did nothing.” In many states,
the substantive law necessitates that stating a claim requires (1) a special
relationship between the plaintiff and defendant — one that causes
defendant to owe a duty to plaintiff; (2) which was breached by the
defendant; (3) which caused (in fact and proximately) (4) damages to the
plaintiff. Typically, are the four elements of a negligence claim.
In continuing with the above example, a claim for failing to rescue
someone is only stated when the plaintiff's complaint alleges facts to
support each element. Thus, a complaint that failed to allege the plaintiff
was harmed would fail to state a claim upon which relief could be granted
because the complaint would lack establishing “damages to the plaintiff.”
Likewise, a complaint that failed to allege facts to support the existence of a
duty — for example, the complaint did not allege that the defendant had a
“special relationship” with the plaintiff — does not state a claim upon
which relief can be granted. If the party against whom the claim is asserted
can say “so what” — even if the facts are true, they do not support
imposing liability on me to you — then the complaint fails to state a claim
upon which relief can be granted.
Solely the pleadings may notify the opposing party of the claims a party
asserts against it and the allegations that, if true, support each element of
every asserted claim. To state a claim in this example, the Rules require a
plaintiff to give notice of facts that support each element of the negligence
claim based upon the duty to rescue, and they must give that notice through
the pleadings.
However, to construct the pleadings, the plaintiff's lawyer must analyze
and research not procedure, but substantive law (state common law in this
example) to identify the elements of the claim. A lawyer researching the
substantive law will find, in most states at least, that I may have been
morally corrupt for not rescuing you, but that I cannot be legally liable. As
a result, you cannot state a claim for relief against me because there are no
facts you can allege (making them up is not an option, as we will see)
showing a special relationship exists between us. Thus, there is no duty, and
duty is an element of this tort. There is, as a result, no basis to award you,
as the plaintiff, money.
To reiterate, substantive law — that is, state common law in a duty to
rescue claim — defines the elements of a claim. The law of procedure tells
how the plaintiff must notify the defendant of the claims and, after that,
how to resolve the dispute between the parties concerning whether the
plaintiff is entitled to have the government order the defendant to pay the
plaintiff money for what happened.
The same concepts about “claims” lurk, perhaps less obviously, in
contracts classes. In general, only a party to an agreement can sue for a
breach of the contract. To use contract lingo, the plaintiff and defendant
must commonly be in “privity” for the plaintiff to state a claim for breach
of contract. Thus, a complaint that falls short of alleging privity between
plaintiff and defendant fails to state a claim upon which relief can be
granted for breach of contract.
(A central exception to the requirement of privity is that an intended
third-party beneficiary can sue for breach of a contract; if you are thinking
of that, you are correct and thinking of substantive contract law. What do
you suppose you would need to plead if your client was not a party to a
contract, but was a third-party beneficiary to it? That is right: you would
have to plead allegations that show, if true, that your client was a third-party
beneficiary.)
Since privity frequently is an element of the claim for breach of contract,
let us try an example. If I were to sue you because you failed to pay for a
car you agreed to buy from Bob, and as a result, Bob could not pay a debt
he owed to me, your response would be that I have failed to state a claim
for breach of contract because you and I were not in privity; only you and
Bob were.
How do you, as a lawyer, make that response if your client was sued
despite lack of privity? How does a lawyer respond if you (or your estate)
sue me for failing to rescue you? Those are the questions procedure
addresses; it does not tell us what someone must allege, like a special
relationship or privity. Rather, procedure tells us how to allege something
and, subsequently, gives the rules to resolve the dispute.
One final point that may not be intuitive: the same set of facts often gives
rise to multiple claims. For example, a party can bring a negligence claim
and an intentional tort claim arising from the same basic facts. For example,
the plaintiff who had been punched might claim both battery and
negligence, essentially alleging that if the defendant's act was not
intentional, then it was negligent. Or, as is common, a medical malpractice
plaintiff might assert both a battery claim — intentional nonconsensual
contact — and negligence. Both claims arise out of the same botched
operation. For various reasons concerning remedies, insurance coverage,
and other factors, lawyers may choose not to assert every claim the facts
present. However, one set of facts will almost always give rise to more than
one claim.

C. Affirmative Defenses Compared to

Claims
It is also important to distinguish between an affirmative defense and a
claim. A claim is what the plaintiff has the burden to plead and prove, and if
the plaintiff fails to do either, then the plaintiff loses. Even if the plaintiff
proves all elements of a claim, however, they can still lose if the defendant
pleads and proves an affirmative defense to the claim.
Suppose the plaintiff sues for breach of contract. It alleges all of the
elements of breach of contract and, later, prove them. The defendant can
still prevail on this proven breach of contract claim — the plaintiff takes
nothing even though the defendant breached the contract — if the defendant
proves an affirmative defense. Consider, for example, that the statute of
limitations bars the claim; meaning it was filed “too long” after the breach
occurred. (For a list of common affirmative defenses, see Rule 8(c).) This
statute of limitations serves as an affirmative defense to the plaintiff's
breach of contract claim, no matter how severe the claim may be, and the
plaintiff cannot prevail.
Keeping the roles of claims and affirmative defenses distinct will help
throughout the study of civil procedure, as well as your other courses. Why
is this distinction important? Generally, the party asserting a claim
possesses the burden to plead allegations to support it and to produce
evidence to prove it later. Analogously, the party asserting an affirmative
defense has those same obligations. If someone with the burden of pleading
or production of evidence fails to meet that burden on even one element of
the claim or defense, they lose that claim or defense. But, it is important to
note that the plaintiff does not have to plead or prove it filed their suit on
time, just as the defendant does not have to plead or prove that it was not
negligent. Each party has its own burdens.

D. Destroying a Myth and an Important

Note About Studying Procedure
This final short section is more important than its length might suggest.
Its first goal is to destroy a myth; if you believe this myth, it makes learning
procedure unnecessarily difficult.
The myth is that some judge sits in their courtroom eagerly waiting to
independently examine the allegations to hear in court; for example,
whether a complaint states a claim. Judges are passive in the litigation
process. Parties control lawsuits. The adversary process resolves lawsuits;
meaning, a lawyer representing a client who has been sued must read the
complaint and respond appropriately. If the complaint does not state a
claim, the judge will do nothing. Instead, defense counsel must file a
motion to ask the court to dismiss that claim. In our simple hypotheticals,
defense counsel would move to dismiss for failure to state a claim upon
which relief could be granted. See FRCP 12(b)(6). If the lawyer does not do
that, the judge is not going to do it for them. We will see that theme arise
over and over again. It is not the judge's responsibility to point out defects
or raise objections because, with few exceptions, the rules put that
responsibility on the lawyers.
This duty on lawyers leads to an important point about the word
“require.” If a Rule or statute “requires” something, that obligation only
means that the opposing party can raise the problem with the court for the
other party's failure to establish a requirement. So, for example, if a party
fails to abide by a deadline “required” by a Rule, nothing will happen
unless either the opposing party does something to raise the violation with
the court or it is one of the rare instances when a court will raise the issue
on its own.
When reading that something is “required” by a Rule or statute, or that
something “must” be done, keep it clear that a party's failure to abide by a
Rule or statute usually means that an opposing party has the power to raise
the issue with the court. We will see that a party can almost always waive
the other party's violation of the Rules or statute by not promptly and
correctly raising the violation with the court.
 The second point of this section is this: In civil procedure, the first place
to look for an answer is the Rules or a few federal statutes. That may not be
the case in your other courses, which are probably not as regulated by
statutes and rules to the same degree as civil procedure. In many instances,
a Rule or federal statute specifically addresses a common issue, or a dispute
arising between the parties. Thus, always start with the text of the Rule or
statute and read it carefully. Other classes may regularly reference and turn
on what a court said, and while court decisions play a role in civil
procedure, the first step differs. Rather than looking to an opinion first, look
to the particular rule or statute; a skill that you may not be developing in
your other classes. Develop it here because statutes and rules are
everywhere, not just in civil procedure.

Checkpoints

Can you describe what a “claim” is?

Can you distinguish a claim from an affirmative defense?
Can you explain who has the burden to plead and prove both a claim and an affirmative defense to a
claim?
Do you understand why substantive law, not procedural law, provides the meaning of what a “claim”
is?
 Part A

To Anchor the Action in a

Federal Court, a
Plaintiff Must Plead One Claim
Where
(1) Subject Matter Jurisdiction,
(2) Personal Jurisdiction, and
(3) Venue Are Proper.
Chapter 2
 A Preview of Part A
of This Book

A. The Three Requirements to

Adjudicate
an Anchor Claim: Subject Matter
Jurisdiction,
Personal Jurisdiction, and Venue
In many law schools, professors teach civil procedure in two semesters,
with the first semester focusing on subject matter jurisdiction, personal
jurisdiction, and venue, and the second semester focusing on the “rules”
aspect of civil procedure. While these two portions are keenly interrelated,
this book organizationally mirrors how professors commonly teach the
course. Additionally, the first part of the book points to where, in the second
part of the book, the rules explain what to do if, for example, the court lacks
subject matter jurisdiction, personal jurisdiction, or venue over a claim.
Remember, as a general rule, the court does not act on its own, so parties
must move the court to take action.
Accordingly, the first part of this book, Part A, addresses and summarizes
the three requirements for a federal district court to have the power to
resolve a plaintiff's claim against a defendant. In a complaint, a plaintiff
must assert at least one claim over which the court has “subject matter
jurisdiction” over the action, “personal jurisdiction” over the defendant, and
proper “venue.”
Starting with the hardest one to grasp of the three requirements, “subject
matter jurisdiction” is an awkward phrase that essentially means the federal
courts possess Constitutional and statutory authority to adjudicate a claim.
In the U.S. Constitution, the States gave power to Congress to create federal
courts that resolve certain types of claims, including the two claims this
book (and most civil procedure courses) focus on: (1) claims created by
federal law (called “federal question” jurisdiction), and (2) claims between
citizens of different states (called “diversity” jurisdiction).
A federal court lacks the power — in civil procedure lingo, a federal
court lacks subject matter jurisdiction — to decide a claim unless two
things have occurred: (1) the Constitution authorized Congress to create
federal courts to adjudicate that type of claim, and (2) pursuant to that
authority, Congress enacted a statute that gave federal courts the power to
do so. Without Constitutional and statutory power, federal courts cannot
resolve the claim — even despite of what the parties may want. Neither the
parties nor the court may expand the scope of subject matter jurisdiction
conferred by Congress as limited by the Constitution. The court must have
the power to resolve the action, or it must dismiss the claim.
“Personal jurisdiction,” perhaps, is a bit more intuitive than subject
matter jurisdiction. No court — state or federal — can force a party to
defend itself against a claim in that state unless the facts leading to the
claim have enough connection to the state to make litigation a fair trial. For
example, if a person has never been to Ohio, that person likely cannot be
forced to defend themselves in Ohio for a claim arising out of a car wreck
that happened in Iowa. In large measure, determining whether personal
jurisdiction exists over a claim depends on the defendant's “minimum
contacts” with the state in which the plaintiff filed suit. However, despite
the required “connection” to the state, personal jurisdiction is not a question
of convenience. Rather, the concept of personal jurisdiction springs from
the Constitution's requirement that a person cannot be deprived of property
without Due Process of law — without a fair hearing.
However, unlike subject matter jurisdiction, a lack of personal
jurisdiction is something that a party can “waive” — and in various ways.
Sometimes, parties agree that if a dispute arises between them, a claim must
be filed in a certain state. Absent unusual circumstances, that kind of
contractual clause will be upheld and waive any objection that personal
jurisdiction is lacking. Furthermore, if the lawyer representing that Iowa
driver, from the earlier example, fails to follow the proper procedure by
neglecting to object to a lack of personal jurisdiction in Ohio for the Iowa
car wreck (remember, the judge won't do it for her), then any future
objection of theirs would be waived.
“Venue” is a concept that primarily seeks to litigate claims in the
particular district (almost every state is, by federal statute, divided into
more than one district and has more than one federal district court) in which
most of the witnesses and other information are likely to be. While personal
jurisdiction generally turns on whether a person has sufficient contacts with
a state to expose that person to suit in that state, venue mainly examines
which district in that state will likely be the most convenient for the court,
parties, and witnesses to try the lawsuit.
Venue, like personal jurisdiction, can be waived. Similar to personal
jurisdiction, parties sometimes agree that venue will lie in a particular state
or district before there is even a dispute. Absent unusual circumstances, that
contract will waive any objection to that chosen venue. Likewise, the judge
does not raise an objection to venue on their own. If the defendant's lawyer
fails to object to improper venue, a claim can be tried in a district that is
totally unconnected to the dispute.
Accordingly, lawyers for both plaintiffs and defendants must know how
to determine whether subject matter jurisdiction, personal jurisdiction, and
venue are proper. Plaintiffs' counsel needs to know these things to
determine in which district suit can be filed. Defense counsel equally needs
to discern whether these three requirements are proper so they can see if
any of them are missing and, if so, how to object. Again, the first part of
this book, Part A, focuses on the substance of the three requirements, and
the second part, Part B, analyzes (among other things) what to do if a party
believes one is missing.
The flowchart below ties the two steps together. Notice that you need to
analyze all three requirements: it may be possible that subject matter
jurisdiction and personal jurisdiction are lacking and that venue is proper, or
other various combinations. Also, remember that this analysis generally is
done on a claim-by-claim basis, with the exceptions discussed below.
Chapter 3

The Foundations of
Subject Matter Jurisdiction

Subject Matter Jurisdiction Roadmap

The next several chapters, including this one, explain that there must be at least one claim
— the “anchor claim” — to allow a particular federal court to decide that claim and, perhaps,
others.
These chapters show that the three principal requirements for a federal court to have the
power to adjudicate an “anchor” claim are: subject matter jurisdiction, personal jurisdiction,
and venue. To anchor a claim — and a case with other claims — in federal court, the plaintiff
must plead one claim over which the court has all three, or the defendant can move to dismiss
the claim (and case) for lack of whichever is missing. (Once a plaintiff has one anchor claim, it
can join other claims and parties to the suit as part of that case, which we will explore later in
this book. But without one claim anchored, there is nothing to join other claims or parties to.)
This chapter focuses on the consequences of our divided government — divided between
state and federal power — on federal judicial power. It explains why the Constitution both
grants and limits federal judicial power to decide claims — what we call subject matter
jurisdiction — and explains that Congress has not authorized federal courts to have that power
to the fullest extent possible under the Constitution.
Although this book presents subject matter jurisdiction first, a court may analyze whether it
has personal jurisdiction first, without determining whether it has subject matter jurisdiction.
Civil procedure course books discuss these three principal requirements in different orders, but
the courses tend to address subject matter jurisdiction first. While this book tracks that
approach, the chapters can be tackled in the order your professor takes.

A. A Divided System of Government:

States and the Federal Government
In the United States, there are two broad divisions of government: state
and federal. (Obviously, there are other divisions within each of those two
broader categories, such as the legislative, executive, and judicial sectors;
moreover, state governments often have various entities, such as counties,
cities, and so on. However, the two expansive divisions implicated by
subject matter jurisdiction are state and federal.)
This divided form of government creates many complexities for
litigators.
One is that substantive law and procedural law can be created by both
state and federal courts. Substantive law can be created by states and by the
federal government. For example, state legislatures can enact statutes, as
can Congress. State courts create “common law,” and so too (to a very
limited extent) can federal courts. That creates issues: Which law, state or
federal, governs a particular claim? If a state law claim is filed in federal
court, does the federal court apply federal law even if state law creates the
claim? If the federal court applies state law, what if the state law conflicts
with federal law?
Second, there are both state and federal court systems. Do both state and
federal courts have the power to decide any given claim, or does only one
have that power? If both do, who gets to pick? More simply, do state courts
only decide claims created by state law, while federal courts only decide
claims arising under federal law, or can the two courts overlap?
Third, what if a claim created by state law is in federal court? Does a
federal court apply state law, or does federal law apply? What about
procedure?
We will see that these questions must be asked separately. Sometimes,
state law applies to a claim, and it must be filed in state court, while at other
times, state law creates a claim and it can but need not be filed in federal
court. Some federal claims can be filed in state court, while a few must be
filed in federal court. Usually, the plaintiff gets to pick which system to file
in but — sometimes — if the plaintiff picks state court the defendant can
“remove” the case from state to federal court. A party could have two
claims that arise out of the same set of facts — one arising under state law,
the other under federal law — and a federal court would apply state federal
substantive law to one claim and state substantive law to the other. Despite
all of these variables, usually, in federal court, federal procedural rules
control even if state substantive law applies to the claim.
The federal judicial branch has power to adjudicate a claim only when
the Constitution authorizes it to do so and, further, Congress has enacted a
statute that extends the subject matter jurisdiction of federal courts to
decide that claim. This chapter focuses on that principle.
 In light of the dual system of government, it is important to remember
that the federal judiciary must have the power to adjudicate a claim, that
such power is limited by the Constitution and Congress, and that the limited
power has immediate consequences for someone who wants to file a civil
lawsuit. Mainly, they must determine if the suit may or must be filed in
federal court, or if they can choose where to file the action. (If there is a
choice, practical issues may influence which forum — state or federal — is
better for the suit, a point this book will discuss later.) If the Constitution
does not authorize Congress to allow federal courts to decide the claim, or
if the Constitution does but Congress has not enacted a statute authorizing
federal courts to hear a claim, then federal courts lack power to decide the
claim, no matter what the parties might want.
Let's be clear. Lawyers and judges typically do not explicitly discuss
whether the Constitution gives federal courts power to decide a claim. For
example, they don't ask, “Does the Constitution give a federal court the
power to decide this claim, and did Congress enact a statute that ‘turned on’
that power?” Instead, they implicitly address the issue by analyzing whether
a federal court has “subject matter jurisdiction” over a claim. However, the
two questions ask exactly the same thing. Be sure to understand that when
saying a federal court “lacks subject matter jurisdiction,” that phrase
indicates that particular federal court lacks the power to adjudicate the
claim, either because the claim is beyond the reach of the Constitution or
because it is beyond the reach of a statute that Congress adopted pursuant to
its Constitutional power. Almost always, the issue is the latter: is the claim
within the scope of a statute giving the federal courts power?

B. Power to Resolve a Claim:

Subject Matter Jurisdiction
Although, as Chapter 4 shows, federal law is the supreme law of the land
and can “preempt” conflicting state law, the federal government's power is
limited. Specifically, the States in the Constitution delegated only limited
powers to the federal government, and any power not expressly given to the
federal government is reserved for the States. See U.S. Const. Am. 10 (“The
powers not delegated to the United States by the Constitution, nor
prohibited by it to the States, are reserved to the States respectively, or to
the people.”) Consequently, unless States delegated a specific power to the
federal government in the Constitution, the federal government does not
have that particular power; the States do.
Pertinent here, through Article III of the Constitution, the States
authorized Congress to create “inferior” federal courts (that is, courts with
lesser power than the Supreme Court) to adjudicate certain claims. Notably,
the States gave Congress power to create what are now the federal district
courts in Section 1 of Article 2. This Article confers judicial power to “one
Supreme Court, and in such inferior Courts as the Congress may from time
to time ordain and establish.” Thus, the Constitution itself creates only the
Supreme Court, and the States permitted, but did not require, Congress to
create these other “inferior” federal courts.
While States gave power to Congress to create lower federal courts,
Article II also limits that authority. Section 2 of Article III provides:
The judicial Power shall extend to all Cases, in Law and Equity,
arising under this Constitution, the Laws of the United States, and
Treaties made, or which shall be made, under their Authority; to all
Cases affecting Ambassadors, other public Ministers and Consuls; to
all Cases of admiralty and maritime Jurisdiction; to Controversies to
which the United States shall be a Party; to Controversies between two
or more States; between a State and Citizens of another State; between
Citizens of different States; between Citizens of the same State
claiming Lands under Grants of different States, and between a State,
or the Citizens thereof, and foreign States, Citizens or Subjects.
Though this language clearly delegates power from the States to the federal
government, it is also limited by its own terms. The States did not authorize
federal courts to decide all disputes — only those enumerated in Section 2
of Article III. Put another way, Section 2 of Article III and the Tenth
Amendment both create and limit the power of federal courts. See Moe v.
Avions Marcel Dassault-Breguet Aviation, 727 F.2d 917, 932–33 (10th Cir.
1984) (“The enumerated powers set forth for the . . . Judiciary in Article III
are by implication limited powers, and the notion of limited federal
authority is reinforced by the Tenth Amendment.”).
There's one counter-intuitive point that is important to confront: you must
keep separate the power to adjudicate the claim from what law applies to it.
The Constitution does not make federal judicial power turn on which law
governs a claim. One possibility mentioned above ties to the notion that the
States in the Constitution could have agreed that claims arising under
federal law could be tried only in federal court, while claims arising under
state law had to be decided in state court. However, the States did not do so.
Instead, the States limited federal judicial power to two types of cases, and
the law that creates the claim is only part of the limitation for one of type.
One type of claim over which federal courts have subject matter
jurisdiction, federal question jurisdiction, turns solely on which law created
the claim. If federal law created the claim (meaning, almost always, a
federal statute created the claim), then the Constitution permits Congress to
allow federal courts to decide it. But the other type of subject matter
jurisdiction, diversity jurisdiction, requires not just that state law created the
claim, but also on whether the parties are citizens of different states. While
there are many subsections in Section 2 of Article III, this book (as well as
most civil procedure courses) focus on those two main bases for federal
subject matter jurisdiction, which are (1) to adjudicate cases “arising under
this Constitution” or “arising under . . . the Laws of the United States” and
(2) to adjudicate cases “between Citizens of different States.” Again, the
first of these grounds for subject matter jurisdiction is “federal question”
jurisdiction, and the second is “diversity” jurisdiction.
It is important you recognize that this discussion is about constitutional
power and limitations. Remember, the Constitution demonstrates only that
the States gave Congress the power to create federal courts with
“jurisdiction” over certain claims. Congress could have chosen not to
exercise that power; and, it could have only used some of that power. We'll
see that when it enacted statutes pursuant to the power in the Constitution,
Congress did not go as far as it could have. Although Section 1 of Article
III authorizes Congress to enact statutes to create lower federal courts and
Section 2 of Article III allows Congress to delegate certain powers to those
federal courts, federal courts only have power to the extent that Congress
actually enacted a statute.
Accordingly, “federal courts may assume only that portion of the Article
III judicial power which Congress, by statute, entrusts to them.” Senate
Select Comm. v. Nixon, 366 F. Supp. 51, 55 (D.D.C. 1973). Said differently,
the Constitution simply authorizes Congress to act while simultaneously
setting the outer limit of such power; however, it does not itself create or
require jurisdiction. Since Congress has power to not create lower courts at
all, Congress can establish them while concurrently limiting their authority
to hear claims, provided that, the creation is still within the bounds of
Article III. Kline v. Burke Constr. Co., 260 U.S. 226, 234 (1922).
 As discussed, for a federal district court to have subject matter
jurisdiction, Congress must have enacted a statute. As a result, subject
matter jurisdiction turns on whether a federal statute gives federal courts
certain power to hear a particular type of claim. Accordingly, so long as any
statute Congress creates does not exceed jurisdictional boundaries set by
Article III, the scope of subject matter jurisdiction turns on the scope of the
statute, not the Constitution. To put it visually:

In this diagram, Circle A represents one of the clauses of Article III, Section
2. For example, the clause “between Citizens of different States” authorizes
Congress to create what we've come to call “diversity subject matter
jurisdiction.” Congress could enact a statute that gives federal courts less
power than the Constitution lets it — a statute could not go to the full extent
authorized by the Constitution (represented here by Circle 1, which
illustrates what Congress has actually done). On the other hand, Congress
could enact a statute that goes to the maximum extent allowed in the
Constitution, which is represented by the same circle; however, call it
Circle 2 to distinguish the statute (Circle 2) from the Constitution (Circle
1). (A statute that exceeds the scope of authority permitted by the
Constitution is represented here by Circle 3. It would be unconstitutional
since it exceeds the delegated authority in Article III, and thus that power
remains with the States under the 10th Amendment.)
Most likely, your professor will emphasize that Congress did not give to
the federal courts all of the constitutionally-permitted power to adjudicate
claims that it could have. The statutes that implement each principal form
of subject matter jurisdiction — diversity and federal question — do not
extend to the limits of Article III. Thus, Circle 1 exemplifies the statutes
that Congress has enacted, which do not extend to the limits of Article III.
That point becomes important because neither the federal question nor
diversity statutes extend to the limits of Article III. They're like Circle 1,
not Circle 2.

C. Which Law Applies Can be Distinct

from
Subject Matter Jurisdiction
I emphasize to my students is that they have to keep the issues in this
course separated. Analyze each one separately. Keep 'em separated, to coin
a phrase.
It would be simpler if only state courts could decide claims created by
state law, and only federal courts could decide claims created by federal
law, but our Founders did not choose that dividing line. Instead, federal
courts have “subject matter jurisdiction” — power to decide a claim — over
a claim created by state law, if there is diversity (or, for claims beyond the
anchor claim, also if there is “supplemental jurisdiction”). Likewise, state
courts have power to decide federal claims; very few federal claims must be
filed in federal court.
The focus of subject matter jurisdiction is may the claim be in federal
court? (And, in rare instances, must it be in federal court?)

Checkpoints

Do you understand the difference between power to adjudicate a claim (what is called subject matter
jurisdiction) and what substantive law applies to the claim?
Do you understand why the Constitution both grants and limits Congressional power to enact statutes
that give federal courts subject matter jurisdiction?
Can you identify the language in the Constitution that creates diversity jurisdiction? What about the
language for federal question jurisdiction?
Do you understand why, even though the Constitution gave Congress power to adopt jurisdictional
statutes, the terms of any statute controls whether a court has subject matter jurisdiction, unless the
statute exceeds the scope of Congressional authority under the Constitution?
Chapter 4

Federal Question and

Diversity Subject Matter
Jurisdiction

Federal Question and Diversity

Subject Matter Jurisdiction Roadmap
This chapter describes federal question subject matter jurisdiction and distinguishes it from
diversity subject matter jurisdiction, and identifies the Constitutional and statutory sources for
both types of jurisdiction.
This chapter shows that the Supreme Court has held that, although the Constitution gives
Congress broader power to authorize federal question jurisdiction in the lower courts, Section
1331 does not go to the full breadth of the Constitution. Instead, a claim “arises under” federal
law, and so can be heard in a lower federal court, in only three circumstances: (a) when a
federal statute creates the claim; (b) when federal law preempts state law; or (c) when the
claim, though created by state law, turns on a substantial question of federal law. This chapter
explains how to identify each type of federal claim, and emphasizes the narrow nature of the
latter two types.
This chapter shows that the Supreme Court has held that, although the Constitution gives
Congress broader power to authorize diversity jurisdiction, it, again, did not enact a statute that
gives the lower federal courts power that goes to the limits of the Constitution. Instead,
Section 1332 gives lower federal courts subject matter jurisdiction to hear state law claims
only if every plaintiff is a “citizen” of a different state from every defendant, and the “amount
in controversy” exceeds $75,000. This chapter explains how to determine which state(s) a
party is a citizen of, and how to determine the amount in controversy.
Finally, the chapter ends by emphasizing that this discussion is only the first part of the
subject matter jurisdiction story: there must be one claim in a lawsuit over which a lower
federal court has subject matter jurisdiction under either Section 1331 or Section 1332 (or,
rarely, some other federal claim-specific statute), but if there is one such claim then additional
related claims might be able to “tag along” under Section 1367, the supplemental subject
matter jurisdiction statute.

As we saw above, the States in Article III delegated power to Congress to

enact statutes to authorize lower federal courts to decide claims (a) “arising
under” the Constitution or laws of the United States or (b) between citizens
of different states. We also saw that, while Article III allows Congress to
create federal courts to decide those claims, Article III is not itself a self-
executing grant of power to the judicial branch. Instead, “the district courts
only have only that jurisdiction that Congress grants through statute.” Int'l
Science & Technology Institute, Inc. v. Inacom Comms., Inc., 106 F.3d
1146, 1153 (4th Cir. 1997). Thus, a federal district court does not have
federal question jurisdiction — or any subject matter jurisdiction, for that
matter — simply because the Constitution authorizes Congress to enact
statutes to permit the courts to have the power to decide certain claims.
Instead, a federal statute must authorize federal subject matter jurisdiction
over a claim. While any statute must be within Article III of the
Constitution, the routine inquiry is whether a claim is within the scope of a
statute: does the claim “arise under” federal law, or does it satisfy the
requirements for “diversity”?
Many federal statutes that create federal claims also explicitly give
federal courts subject matter jurisdiction over those claims. A federal court
has power to adjudicate a federal claim if the statute that creates the claim
and also creates subject matter jurisdiction over the claim.
Not all statutes that create claims have specific statutes like that,
however. Congress also enacted two general statutes on which civil
procedure courses focus: (1) one gives federal courts power to adjudicate
over claims “arising under” the U.S. Constitution or federal statutes, and (2)
the other gives them power to adjudicate claims between citizens of
different states if the amount in controversy exceeds $75,000. Thus, while a
federal court will have subject matter jurisdiction over every claim “arising
under” federal law, if a claim arises under state law, a federal court will not
have jurisdiction it unless the parties to the claim are “diverse” and more
than $75,000 is “in controversy.”
It is important to note that the statutes are mutually exclusive: a claim
can meet the requirements of the federal question statute, or be a state law
claim that meets the requirements of the diversity statute, but not both.
There is no such thing as a “diverse federal claim.” Put the other way, if a
claim arises under federal law, then it doesn't matter either whether the
amount in controversy exceeds $75,000 or whether the parties are
“diverse.”
 A. Do Federal Courts Have Power
to Adjudicate the Claim?
1. Federal Question Subject Matter Jurisdiction
under Section 1331
The Constitution gave Congress broad power to confer federal question
jurisdiction on the federal courts. The scope of the federal question prong of
Article III was examined in Osborn v. Bank of the U.S., 22 U.S. 738, 822–
23 (1824), where Chief Justice Marshall held that a claim “arises under”
federal law in terms of Article III if
the title or right set up by the party, may be defeated by one
construction of the Constitution or law of the United States, and
sustained by the opposite construction. We think, then, that when a
question to which the judicial power of the Union is extended by the
Constitution, forms an ingredient of the original [claim], it is in the
power of Congress to give [federal district courts] jurisdiction of that
[claim], although other questions of fact or law may be involved in it.
Thus, the phrase “arising under” in Article III reaches claims where federal
law is merely an “ingredient” in it: a claim is within the “federal question”
prong Article III if the claim is sustained by one construction of federal law,
but defeated by another. See Bell v. Hood, 327 U.S. 678, 681 (1946).
Again, simply because the Constitution gives federal courts this broad
authority over federal claims, the key issue is the scope of the statutes that
Congress has enacted that actually create the power in federal courts.
Although there are many claim-specific grants of federal subject matter
jurisdiction in federal statutes, most civil procedure courses focus on what
is called the “general federal question” statute. That statute gives federal
district courts subject matter jurisdiction over “all civil actions arising under
the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331.
Somewhat surprisingly, even though Section 1331 uses exactly the same
phrase as the Constitution — “arising under” federal law — the Supreme
Court long ago interpreted Section 1331 to not reach as far as Article III
permits. Put the other way, Congress gave federal courts less power to
adjudicate claims than it could have. Louisville & Nashville R.R. v. Mottley,
211 U.S. 149 (1908) is the case you will study for this point and a related
one.
The first important point from Mottley is the scope of Section 1331. In
Mottley, the L&N railroad had agreed to provide the plaintiffs with lifetime
free passes for transportation. Plaintiffs sued for breach of contract, a state
law claim, seeking an order for specific performance of the contract. In
their complaint, the plaintiffs pled that the railroad had defended its
decision to stop honoring the passes because Congress had, later, passed a
federal statute that prohibited railroads from giving free transportation. In
their complaint, the plaintiffs also alleged that the federal statute did not
apply to their contract for free passes and, if it did, the statute was
unconstitutional. Even though clearly federal law was an ingredient of this
state law claim, the Court held there was no federal question subject matter
jurisdiction under what is now Section 1331:
It is the settled interpretation of . . . [Section 1331] that a suit arises
under the Constitution and laws of the United States only when the
plaintiff's statement of his own cause of action shows that it is based
upon those laws or that Constitution. It is not enough that the plaintiff
alleges some anticipated defense to his cause of action, and asserts that
the defense is invalidated by some provision of the Constitution of the
United States. Although such allegations show that very likely, in the
course of the litigation, a question under the Constitution would arise,
they do not show that the suit, that is, the plaintiff's original cause of
action, arises under the Constitution.
Id. at 152. Note that the Court reached this conclusion even though the
outcome turned on federal law: if the federal statute was interpreted one
way, plaintiffs won, but if it were interpreted the other way, they lost.
Clearly, the claim “arose under” federal law if Section 1331 reached to the
extent permitted by the Constitution as construed by Osborn.
Mottley established the proposition that Section 1331 did not reach that
far. Although the phrase “arising under” in Article III allowed Congress to
enact a statute that would have given federal courts subject matter
jurisdiction over their claim, the Court held that Congress had not done so
— even though it uses the same words. (Again, referring to the diagram in
the prior chapter, Section 1331 is like Circle 1, not Circle 2.) “Although the
constitutional meaning of ‘arising under’ may extend to all cases in which a
federal question is ‘an ingredient’ of the action . . . the statutory grants of
federal-question jurisdiction . . . confers a more limited power.” Merrell
Dow Pharm., Inc. v. Thompson, 478 U.S. 804, 807 (1986).
Mottley established a second fundamental principle of subject matter
jurisdiction: whether a claim “arises under” federal law turns on application
of the “well-pleaded complaint” rule. A “complaint” is the pleading the
plaintiff files with a federal court to commence a lawsuit. Among other
things, a complaint must state at least one claim that anchors the case in
federal court. See Chapter 13. Under the well-pleaded complaint rule, two
principles are important: first, the focus is on claims actually pled, second,
on a some-what imaginary “well-pleaded” complaint.
First, the focus is solely on the complaint. Whether federal question
subject matter jurisdiction exists is determined by looking solely at the
complaint and examining each claim in it. This means that a federal court
determines from the complaint itself whether or not the claim “arises
under” federal law. The focus solely on the complaint excludes things pled
in the defendant's answer (which is the pleading a defendant files in
response to being served with a complaint, see Chapter 37):
Affirmative defenses that are based on federal law raised in a
defendant's answer cannot show a federal question exists, Bracken v.
Matgouranis, 296 F. 3d 160 (3rd Cir. 2002) (state law defamation
claim did not raise federal question where complaint anticipated
defendant's First Amendment defense), unless the defense is that
federal law completely preempts the state law claim. McCullough v.
Ligon, 430 F. Supp. 2d 846, 849–50 (E.D. Ark. 2006). (Complete
preemption is discussed below.)
Thus, for example, a defendant's counterclaim cannot be used to show a
federal question exists. Price v. Alfa Mut. Ins. Co., 877 F. Supp. 597, 600 n.
7 (M.D. Ala. 1995) (“a defendant's counterclaim constitutes a subsequent
pleading by the defendant, and a federal claim raised (by a defendant) in a
counterclaim does not provide an independent basis for jurisdiction”).
Second, not only does the well-pleaded complaint rule focus only on the
plaintiff's complaint and not the defendant's answer, the well-pleaded
complaint rule even filters out some things that may be in the plaintiff's
complaint. The rule limits federal question subject matter jurisdiction to a
claim in a well-pleaded complaint that either:
(A) is created by federal law either (i) expressly or (ii) impliedly
through complete preemption or
 (B) “the plaintiff's right to relief necessarily depends on resolution of a
substantial question of federal law.”
Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust, 463 U.S. 1,
27–28 (1983). The next section explores these two categories: the claim
must either be created by federal law or depend on resolution of a
substantial question of federal law. We'll explore these next, but it is not
enough if the plaintiff, like the Mottley's, predicts in its complaint the
obvious federal defense to their claim, and proactively pleads why that
federal defense fails. The claim is what matters, and a complaint that pleads
to avoid a defense is not “well pleaded” since avoiding the federal defense
is not an element of a claim.
This is sometimes a difficult concept. One way to think about it is ask
yourself: what must the plaintiff plead to win, without considering reasons
why it might lose. So, for example, in a car wreck case a plaintiff must
plead duty, breach, causation, and damages. In a breach of contract, it must
plead a contract, breach, and damage. A plaintiff does not have to plead that
it sued on time, or that it was not at fault. This will take practice!

a. Federal Question Subject Matter Jurisdiction

i. The Typical “Arising Under” Federal Claim: A Federal
Statute Creates the Claim
The first step to determine if federal question jurisdiction exists is to
determine what law creates the claim. Remember to apply the well-pleaded
complaint rule, which means focusing on the elements of plaintiff's claim,
not what a court will have to decide to resolve the claim. Simply because a
federal statute bars enforcement of a contract does not mean the claim for
breach of contract arises under federal law.
Notice that the well-pleaded complaint rule often gives a plaintiff control
over whether a federal claim will be stated in the complaint. As you should
be recognizing, the same set of facts often give rise to different claims. See
Chapter 1. The same set of facts sometimes gives rise even to a claim under
state law and another that arises under federal law. But plaintiff does not
have to plead every claim it has, and so it can choose to assert only the state
law claims to avoid federal question jurisdiction. Caterpillar, Inc. v.
Williams, 482 U.S. 386, 392 (1987). A defendant cannot argue that federal
question jurisdiction can be based upon a claim that the plaintiff has not
alleged. Merrell Dow, 478 U.S. at 809 n. 6; E.g., Merrill Lynch, Pierce,
Fenner & Smith, Inc. v. Manning, 136 S. Ct. 1562 (2016) (no jurisdiction
under Section 1331 where plaintiff pled only state law security fraud
claims, even though a federal statute created federal claims and that statute
gave federal courts exclusive jurisdiction over claims created by that
statute).
If you apply the well-pleaded complaint rule, and the claim is not created
by federal law, then (absent the very narrow circumstances required for
preemption or present in Grable, discussed below), there will not be federal
question jurisdiction.
And it is usually easy to spot a federal claim. The vast majority of federal
claims arise because a federal statute creates the claim. And federal statutes
are identified by the letters “U.S.C.” (for United States Code). So, if you
see “Plaintiff asserts a claim under 35 U.S.C. § 271,” you've got a federal
claim and — almost without doubt — federal subject matter jurisdiction.
Where a party asserts a claim created by a federal statute, questions about
federal question jurisdiction are rarely raised. These are the easy ones, and
for two reasons.
First, if a federal statute creates the claim, often that same statute will
give federal courts jurisdiction to decide the claim. More likely than not,
your professor will not test you on this, but in the real world, a federal
statute that creates a claim often has a provision that makes it clear federal
courts have power to decide that claim.
The second source for subject matter jurisdiction over a claim created by
federal law is Section 1331. If a federal statute creates the claim, then it
“arises under” federal law and is within Section 1331. There are only very
narrow exceptions, but some casebooks cover them. See, e.g., Shoshone
Mining Co. v. Rutter, 177 U.S. 505 (1900) (holding there was no federal
question jurisdiction over claims authorized by federal statute to determine
who owns certain interests in mines). These, however, are rare. Ordinarily,
if federal law creates a claim, either there will be a statute specific to that
claim giving federal courts power to decide it, or it will be covered by
Section 1331.
There are two instances, however, when federal courts have power to
hear a claim created by state law, and they can do so even when the
requirements for diversity are lacking.
ii. Plaintiff's State Law Claim Necessarily Turns on a
Substantial Question of Federal Law
The second category of federal question subject matter jurisdiction is
conceptually difficult, but very narrow. Be sure to keep Mottley in mind!
Suppose state law creates the claim, but to adjudicate it, a court must
decide a very significant issue of federal law? As an element of the state
law claim, the plaintiff must prove something that turns on the meaning of
important federal law. Federal law is not a defense; it's part of plaintiff's
claim.
Remember, first, that the Constitution permits Congress to enact a statute
that gives federal courts jurisdiction over these claims, because federal law
is at least an “ingredient” of the state law claim. Despite its narrow
interpretation of Section 1331, the Supreme Court has held that Section
1331 includes state law claims but only the claim necessarily depends on
resolution of a substantial question of federal law. That rule is very narrow
and has several components.
First, only the plaintiff's claim counts: the question is not whether the
court must, to decide whether the plaintiff “wins” a lawsuit, resolve a
substantial question of federal law. Instead, the question is whether
prevailing on plaintiff's state law claim requires resolution of a substantial
question of federal law. So, for example, there is no federal question if a
plaintiff pleads a state law contract claim and includes in its complaint facts
that, if true, would overcome a federal law defense that the defendant might
raise in its answer. (As was the case in Mottley.) As noted above, the
existence of a federal defense to a state law claim is normally irrelevant
(absent complete preemption) to determining federal question jurisdiction.
Aetna Health, Inc. v. Davila, 542 U.S. 200, 207 (2004). To enforce that
principle, it is irrelevant to federal question jurisdiction that a plaintiff
pleads “around” a federal defense in the complaint. Metropolitan Life Ins.
Co. v. Taylor, 481 U.S. 58, 63 (1987). Put another way, it does not matter if
the defendant might have a federal defense to a claim; the resolution of the
state law claim itself must necessarily depend on a substantial question of
federal law.
Second, the federal issue implicated by the state law claim must be
“substantial” or “significant.” Grable & Sons Metal Prods., Inc. v. Daure
Engineering & Mfg., 545 U.S. 308 (2005) states that the “mere presence of
a federal issue in a state cause of action does not automatically confer
federal-question jurisdiction.” Merrell Dow, 478 U.S. at 807. Instead, a
federal question exists only where a substantial, disputed question of
federal law is an element of the plaintiff's state law claim. Id. at 813.
The meaning of “substantial” is not subject to a precise, single test.
Grable, 545 U.S. at 313. The Court has characterized “substantial” as
meaning that the state claim must “really and substantially involve a dispute
or controversy respecting the validity, construction or effect of federal law.”
Id. at 313. Similarly, the Court has stated that “substantial” in this context
“demands not only a contested federal issue, but a substantial one,
indicating a serious federal interest in claiming the advantages thought to be
inherent in a federal forum.” Id.
In addition, and even if there is a disputed substantial federal issue, “the
federal issue will ultimately qualify for a federal forum only if federal
jurisdiction is consistent with congressional judgment about the sound
division of labor between state and federal courts governing application of
§ 1331.” Id. Amplifying on this point, the Court stated that “the question is,
does a state-law claim necessarily raise a stated federal issue, actually
disputed and substantial, which a federal forum may entertain without
disturbing any congressionally approved balance of federal and state
judicial responsibilities.” Grable, 545 U.S. at 314. Thus, at the outer
reaches of Section 1331, “determinations about federal jurisdiction require
sensitive judgments about congressional intent, judicial power, and the
federal system.” Merrell Dow, 478 U.S. at 810.
This requirement of a “substantial issue” of federal law is more difficult
to establish than it sounds. Suppose, for example, that a plaintiff files a state
tort law claim, alleging that a product was negligently designed, and in so
alleging the plaintiff relies on the fact that the product failed to satisfy
certain federal safety regulations. If “substantial” is read broadly, the
plaintiff's claim necessarily turns on federal law since to figure out if the
product was negligently designed the court will have to apply federal
regulations to it. The following cases show both that it is not read that
broadly, but that its boundaries are far from clear, with Justices often
disagreeing on whether federal question jurisdiction existed. In cases with
remarkably similar facts, the Court has reached different results.
On the one hand, in a few cases the Court concluded that a substantial
federal question was necessary to the state law claim, and so federal
question subject matter jurisdiction existed. Foremost, in Smith v. Kansas
City Title & Trust Co., 255 U.S. 180 (1921), the plaintiff pled a state law
breach of fiduciary duty claim against a bank. However, whether the bank
had breached its duty, or not, turned on — necessarily depended on —
whether the bank had bought bonds that were unconstitutionally issued by
the government. Because the question of whether the bonds were
unconstitutionally issued turned on a question of federal law, the Court held
that the plaintiff's state law claim necessarily depended on resolution of a
substantial question of federal law, and so federal question subject matter
jurisdiction was present.
More recently, in Grable & Sons Metal Prods., Inc. v. Darue Eng'g &
Mfg'g, 545 U.S. 308 (2005), to satisfy a tax lien the IRS seized property
owned by Grable, and then sold the property to Darue. Five years later,
Grable sued Darue in state court to “quiet title” to that property (i.e., for a
judicial determination of who owned the property). Grable asserted that
Darue's title was invalid because the IRS had not properly notified Grable
of the sale, as required by a federal statute. Darue removed the case to
federal court, and ultimately the Court held that the claim presented a
federal question: whether Grable received adequate notice of the sale was
“an essential element of [Grable's] quite title claim” and “appear[ed] to be
the only . . . issue contested in the case.” Id. at 315. Thus, it was a
substantial question, and one that the claim necessarily depended on.
Finally, the Court noted that the meaning of the federal tax notice provision
was “an important issue of federal law that sensibly belongs in a federal
court.” Id. Thus, the resolution of the federal question was dispositive, and
the resolution of that issue would involve litigation of the propriety of an
act by the federal government.
The Court reached the opposite conclusion in three other cases. In the
oldest, Gully v. First Nat'l Bank, 299 U.S. 109 (1936), Bank A had agreed
to pay Bank B's debts and taxes. Both banks were national banks. The state
filed suit against Bank A to collect the taxes Bank B owed. Court held the
state law claim did not create any substantial federal question even though a
federal law permitted states to tax banks, and the state had enacted its tax
pursuant to that federal statute. Although the Court did not use the term,
clearly Bank A's argument that the taxes were not validly assessed did not
arise out of the state's well-pleaded complaint, but was at best a defense to
enforcement of the state-law contract for debt.
In only a few cases, the Court has found question subject matter
jurisdiction lacking even though federal law played an important role in
adjudicating the state law claim. For example, in Merrell Dow, the plaintiff
filed suit in state court alleging a state claim based on the allegation that a
drug had been defectively made, in part relying on an allegation that the
drug had been “misbranded” in terms of the federal Food Drug and
Cosmetic Act (“FDCA”). The Court held there was no substantial federal
question, heavily relying on the fact that Congress had not created a federal
claim for violating the FDCA, and on the fact that, because breach of a
federal regulation is often used to establish negligence in products liability
cases, allowing federal question jurisdiction would seriously alter the
federal-state balance, since those claims historically had been decided in
state court.
Similarly, in Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S.
677 (2006), after an accident an insured federal employee recovered money
from a defendant who settled a tort claim. The employee's insurance
company then sued the employee in federal district court seeking
reimbursement, since it had paid the employee's medical bills, a portion of
which the insured employee had obtained from the settling defendant. The
insurer and insured disputed how much the insurer was entitled to, a matter
which in part turned on application of federal regulations and statutes. The
district court found no federal question and so dismissed the claim. In a 5–4
decision, the Court held that there was no substantial federal question, even
though the insured had been a federal employee and the insurer subject to
federal regulation.
The Empire Court identified several distinctions with Grable that
justified a different result: First, the reimbursement claim “was triggered,
not by the action of any federal department, agency, or service, but by the
settlement of a personal-injury action launched in state court.” Second, the
claim did not involve a dispositive “pure issue of law” as in Grable but
instead “the bottom line practical issue is the share of that settlement
properly payable to” the insurer. Id. Finally, the majority noted that the
federal interests in attracting able workers “do not warrant turning into a
discrete and costly ‘federal case’ an insurer's contract-driven claim to be
reimbursed from the proceeds of a federal worker's state-court-initiated tort
litigation.” Id.
More recently, the Court found no substantial federal question in Gunn v.
Minton, 133 S.Ct. 1059 (2013). Gunn had represented Minton in a patent
lawsuit that had been filed in federal court. Patent suits are required to be,
and Minton's was, in federal court. During that lawsuit, the defendant
asserted that Minton's patent was invalid. The court agreed and dismissed
Minton's suit. Minton's lawyers then, in a motion to reconsider dismissal,
argued for the first time that an exception applied and, as a result, the patent
was not invalid. Specifically, although patent laws provide that an inventor
must file for a patent within one-year of putting his invention in public use,
an exception allowed an inventor to engage in “experimental use.” An
invention was not in “public use” if its use was experimental. The district
court held that this argument was made too late, and waived.
Minton sued Gunn for legal malpractice, a claim created by state law. He
filed the case in Texas state court. Minton argued that Gunn should have
raised the experimental use exception earlier, and, had Gunn done so, the
patent would not have been found invalid. The trial court ruled for Gunn,
granting summary judgment. On appeal in the Texas Supreme Court,
Minton argued that the state courts lacked subject matter jurisdiction since
it was an exclusively federal issue (patent law is one of those rare
exclusively federal issues). The Texas Supreme Court agreed, undoing
Minton's loss and giving Minton the opportunity to file in federal court. The
Supreme Court, however, granted certiorari and held that — even though
central issues in the case turned on patent law — there was no federal
subject matter jurisdiction. The Court emphasized that the relief Minton
sought would not affect a patent (his was invalid) and any interpretation by
a state court of federal patent law would not bind federal courts.
The fact that the line between these cases is not bright is confirmed by
the fact that there were dissenting opinions in these decisions (except
Gunn), and the lower appellate courts, too, have struggled with the
boundary. See, e.g., Verizon Md., Inc. v. Global Naps, Inc., 377 F.3d 355
(4th Cir. 2004) (appellate court split on whether a claim arising out of the
breach of a contract that was required by federal statute presented a federal
question).
Finally, a recent case addressed the scope of Grable in passing and in
dicta. In Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Manning, 136 S. Ct.
1562 (2016), the plaintiff's state court complaint contained only claims
created by state law, alleging that the defendant had committed securities
fraud. The Court stated that if the state statute had created a state claim for
“any violation of the” federal statute, there would be Grable type
jurisdiction because an element of the plaintiff's claim would have been a
determination that very important federal laws — the securities laws — had
been violated.
iii. Federal Question Jurisdiction if Federal Law Completely
Preempts a State Law Claim
Some casebooks address this very narrow form of federal question
jurisdiction, but your professor may not.
As noted above, under the well-pleaded complaint rule, only the elements
of claims that “needed” to be pled in the complaint “count.” Thus, anything
in the defendant's answer, including affirmative defenses, do not. However,
there is one exception: the defense of complete preemption by federal law.
Congress sometimes completely precludes (or “preempts”) state law from
applying to certain subjects. Where Congress intends to preclude states
from making law in a field — whether through common law or state
legislation — Congress is said to have “completely preempted” that subject.
The fact that Congress has enacted a federal statute does not usually lead
to a finding of complete preemption. Instead, there are various kinds, or
degrees, of preemption. Federal preemption often arises as a defense to a
plaintiff's state-law claim, and without more does not change federal court
jurisdiction: the well-pleaded complaint rule would ignore the defense.
However, where federal law completely preempts state law, a claim is
available, if at all, only under federal law. “A federal statute carrying the
power of complete preemption wholly displaces a claim couched in state
law, and such a claim is considered to be one arising under federal law.”
Aetna Health, Inc. v. Davila, 542 U.S. 200, 207–08 (2004).
This is a narrow exception to the well-pleaded complaint rule, but be sure
you recognize it is just that — narrow. It is narrow for two reasons.
First, a federal statute that completely preempts a plaintiff's state law
claim provides a basis for federal question subject matter jurisdiction even
though preemption will be raised in the defendant's answer, not the
plaintiff's complaint. Aetna Health, Inc. v. Davila, 542 U.S. 200, 207
(1984). This doctrine, which conceptually permits federal question
jurisdiction over a something not raised in the complaint “recognizes that
some federal laws evince such a strong federal interest that, when they
apply to the facts underpinning the plaintiff's state-law claim, they convert
that claim into one arising under federal law.” In re Blackwater Security
Consulting, LLC, 460 F.3d 576, 583 (4th Cir. 2006). Congress has
completely preempted state law in only a few areas: § 301 of the Labor
Management Relations Act, Avco Corp. v. Aero Lodge No. 735, Int'l Ass'n
of Machinists, 390 U.S. 557, 560 (1968), § 502(a)(1)(B) of ERISA, Metro.
Life Ins. Co. v. Taylor, 481 U.S. 58, 63–66 (1987), and §§ 85 and 86 of the
National Bank Act, Beneficial Nat'l Bank v. Andersen, 539 U.S. 1, 10–11
(2003).
Second, complete preemption usually only matters when a defendant
“removes” a state law case from state to federal court. See Chapter 10.
Complete preemption gets used almost exclusively when a plaintiff files a
state law claim in state court, but the defendant wants to “remove” the case
to federal court. Without diversity jurisdiction, the claim is proper in federal
court only if there is complete federal preemption of state law. A defendant
can rely on federal question subject matter jurisdiction to remove a state
law claim that is completely preempted by federal law. See EFCO Corp. v.
Iowa Ass'n of Bus. & Indus., 447 F. Supp. 2d 985 (N.D. Iowa 2006). So, the
second way that this doctrine is narrow is that it applies almost only in
determining whether a defendant properly removed a case from state to
federal court based upon the complete preemption of a state law claim.
One counter-intuitive point about complete preemption is that it may be
that federal law will provide the plaintiff with a claim, or federal law may
preclude the plaintiff's claim entirely: whether the plaintiff has a federal
claim, or not, is irrelevant to whether state law is completely preempted!

2. Diversity Subject Matter Jurisdiction

As shown above, in the vast majority of cases, if federal law (almost
without exception, a federal statute) creates a claim, then federal question
jurisdiction exists because that claim arises under federal. If state law
creates the claim, federal question jurisdiction will not exist, unless
resolution of the state law claim necessarily depends on resolution of a
substantial federal question, or there is complete preemption.
The other source of original jurisdiction (remember, we'll cover
supplemental jurisdiction later) is diversity. We turn there next.
The States in Article III of the Constitution granted Congress the power
to enact statutes to allow federal courts to decide claims created by state
law, but only if the dispute is “between Citizens of different States.”
Before turning to what this means, consider why this exists. After all, it
makes sense for federal courts to have the power to decide federal claims.
As we'll see in Chapter 46, when deciding a state claim because of diversity
jurisdiction, a federal court will apply state, not federal, law. Thus, a federal
court with diversity jurisdiction over a claim will apply the same law as
would the state court. So why did the States authorize Congress to create
federal courts that could decide disputes between citizens of different
states? The answer, back then at least, was bias: each State was concerned
that if its citizens were sued in another State, that the jury would disfavor its
citizen. At the time of the Constitution, the States concluded that a federal
forum might be closer to neutral, and so they authorized Congress to let
federal courts decide matters of state law when the dispute was between
citizens of different States.
The Court has held that the Constitution permits Congress to enact
statutes that permit federal courts to hear claims where there is merely
“minimal diversity.” Minimal diversity exists so long as at least one
plaintiff is a citizen of a different state of at least one defendant. If so, there
is a claim “between Citizens of different States” in terms of Article III.
State Farm Fire & Cas. Co. v Tashire, 386 U.S. 523 (1967). Much like the
Constitution merely required that any federal question jurisdiction statute
require at least that federal law be an “ingredient” of a claim, the
Constitution only limits Congress to giving courts power to hear claims
with “minimal diversity.”
Rather than going to the limits allowed by Article III, however, Section
1332(a) requires “complete diversity,” meaning that no plaintiff may be a
citizen of the same state as any defendant. Strawbridge v. Curtiss, 7 U.S. (3
Cranch) 267 (1806). Just like federal question jurisdiction, diversity
jurisdiction is not co-extensive with Article III. It is symbolized by Circle 2,
not Circle 1, in the illustration that appears in Chapter 2. So, to illustrate the
difference, if two plaintiffs, one from Texas and another from California,
sue a defendant in California, there is minimal diversity, but there is not
complete diversity. Further, Congress included in Section 1332(a) an
“amount in controversy” requirement. Neither it nor complete diversity are
required by the Constitution. But, again, what matters is whether a claim is
not within Section 1332, not whether Congress could have enacted a statute
giving jurisdiction over the claim.

a. Section 1332 Requires Complete Diversity and

More Than $75,000 Exclusive of Costs and
Interests be in Controversy
 Using the power delegated to it in Article III, Congress enacted 28
U.S.C. § 1332. In full, Section 1332 provides:
(a) The district courts shall have original jurisdiction of all civil
actions where the matter in controversy exceeds the sum or value of
$75,000, exclusive of interest and costs, and is between —
(1) citizens of different States;
(2) citizens of a State and citizens or subjects of a foreign state;
(3) citizens of different States and in which citizens or subjects of
a foreign state are additional parties; and
(4) a foreign state, defined in section 1603 (a) of this title, as
plaintiff and citizens of a State or of different States.
For the purposes of this section, section 1335, and section 1441, an alien
admitted to the United States for permanent residence shall be deemed a
citizen of the State in which such alien is domiciled.
(b) Except when express provision therefor is otherwise made in a
statute of the United States, where the plaintiff who files the case
originally in the Federal courts is finally adjudged to be entitled to
recover less than the sum or value of $75,000, computed without
regard to any setoff or counterclaim to which the defendant may be
adjudged to be entitled, and exclusive of interest and costs, the district
court may deny costs to the plaintiff and, in addition, may impose
costs on the plaintiff.
(c) For the purposes of this section and section 1441 of this title —
(1) a corporation shall be deemed to be a citizen of any State by
which it has been incorporated and of the State where it has its
principal place of business, except that in any direct action
against the insurer of a policy or contract of liability insurance,
whether incorporated or unincorporated, to which action the
insured is not joined as a party-defendant, such insurer shall be
deemed a citizen of the State of which the insured is a citizen, as
well as of any State by which the insurer has been incorporated
and of the State where it has its principal place of business; and
(2) the legal representative of the estate of a decedent shall be
deemed to be a citizen only of the same State as the decedent, and
the legal representative of an infant or incompetent shall be
deemed to be a citizen only of the same State as the infant or
incompetent.
 (d) The word “States”, as used in this section, includes the Territories,
the District of Columbia, and the Commonwealth of Puerto Rico.
Again, like Section 1331, Section 1332(a) does not extend to the limits of
Article III. It is narrower in two ways: it requires complete, not minimal,
diversity and it imposes a minimum “amount in controversy.” To analyze
whether there is diversity subject matter jurisdiction over a claim, you'll
need to know what complete diversity means, what “citizenship” means,
and how to determine whether the amount in controversy exceeds $75,000.

i. Section 1332(a) Requires Complete Diversity

Because subject matter jurisdiction turns on meeting the requirements of
the statute, there is no diversity jurisdiction because the statute requires
complete diversity. Even though complete diversity is not mandated by
Article III or the statutory language, the Court has “adhered to the complete
diversity rule in light of the purpose of” diversity jurisdiction, “which is to
provide a federal forum for important disputes where state courts might
favor, or be perceived as favoring, home-state litigants. The presence of
parties from the same State on both sides of a case dispels this concern. . . .”
ExxonMobil Corp. v. Allapattah Serv., Inc., 545 U.S. 546 (2005).
This is an important point: if a plaintiff is a citizen of the same state as a
defendant, then there can be no “anchor claim” under Section 1332.
“Contamination” occurs, according to ExxonMobil.
We'll now explore how to determine “citizenship” and the “amount in
controversy.”

(a) Determining Citizenship of a Party

(1) When Is Citizenship Determined?
Citizenship is measured at the time of filing the pleading that contains the
ostensibly diverse claim. Because jurisdiction is measured as of the time of
filing suit, or the claim at issue if that comes later (we will see that parties
may amend pleadings to add claims after the suit has been initiated) the
focus generally is on the time the claim is filed and events after that point
are irrelevant. If there is diversity at the time of filing the complaint (or of
amending a complaint to add the new claim) then there is diversity subject
matter jurisdiction even if after the claim is filed the parties become citizens
of the same state. (In the next section, you'll also see the same principle
applies to the amount in controversy requirement: it is measured as of the
time of filing the claim, and subsequent events cannot divest a court of
jurisdiction.) So, if an Alabama plaintiff files a $100,000 state law claim
against a Texas defendant, there is diversity jurisdiction. Even if the
plaintiff later moves to Texas, there is still diversity jurisdiction and even if
the plaintiff amends his complaint to add another state law claim based
upon diversity.
Conversely, if the parties are citizens of the same state when the claim is
filed, the lack of diversity cannot be “cured” if afterwards the parties move
and become citizens of different states. If a plaintiff was a citizen of the
same state as a defendant at the time the claim was filed, but then becomes
a citizen of a different state from the defendant, there still was no diversity
at the time of filing, and so there is no diversity jurisdiction. Grupo
Dataflux v. Atlas Global Group, L.P., 541 U.S. 567 (2004).
So, we will see that citizenship of a corporation turns in part on its
principal place of business. That determination is also made at the time the
claim is filed, Stock West Corp. v. Taylor, 964 F.2d 912, 917 (9th Cir.1992),
or the case with the pertinent claim is removed from federal to state court,
Miller v. Grgurich, 763 F.2d 372, 373 (9th Cir.1985), or the amendment
with a new claim is filed. Because subject matter jurisdiction turns on the
facts at the time the claim is filed, changes in a corporation's activities or
state of incorporation subsequent to that time are irrelevant.
Citizenship at the time the claim is filed is what counts. Note, that in
addition to meaning that post-filing changes to a particular plaintiff's
citizenship are irrelevant, this bright line also means that a party's
citizenship at the time of the events that led to the lawsuit is irrelevant, too.
Finally, don't overstate what this section says: if a party is added to a
lawsuit later, its citizenship is determined at that time, not when the lawsuit
was initially filed. Century Commodity Corp. v. Data-Trend Commodities
Inc., 1986 WL 9557 (N.D. Ill. Aug. 22, 1986) (citizenship of party
subsequently joined to a suit is measured at time of joinder, not time suit
was originally filed).

(2) How Is Citizenship Determined?

aa. A Natural Person Is a Citizen of His State
of Domicile
“For purposes of diversity jurisdiction, citizenship [of a natural person]
usually is equated with domicile.” Valentinn v. Hosp. Bella Vista, 254 F.3d
358, 366 (1st Cir. 2001). Thus, the domicile of a human being named as a
party determines his or her place of citizenship for purposes of determining
whether a federal court has diversity subject matter jurisdiction. “A person's
domicile is the place where he has his true, fixed home and principal
establishment, and to which, whenever he is absent, he has the intention of
returning. Domicile requires both physical presence in a place and the intent
to make that place one's home.” Id. See Mas v. Perry, 489 F.2d 1396 (5th
Cir. 1974). Note that a person has only one domicile, even though she can
have more than one residence. A residence is not the same as a domicile.
Mas v. Perry, 489 F.2d 1396 (5th Cir. 1974), illustrates these two
requirements. There, Mrs. Mas had married her husband, a French citizen,
at her parent's home in Mississippi during a time when both were teaching
graduate school in Louisiana. Shortly after their marriage, they returned to
Baton Rouge to resume teaching duties. They rented an apartment and after
several months discovered that their landlord had installed a “two way
mirror” enabling him to look into the bedroom of their Baton Rouge
apartment. After suit was filed, they moved to Illinois to continue teaching,
but always intending to return to Baton Rouge so Mr. Mas could complete
his degree in Louisiana, but they testified that they intended once he
completed his studies to move elsewhere, but did not know precisely where.
Louisiana was simply a place for them to study and work.
They filed suit against the landlord in Louisiana, basing jurisdiction on
diversity, alleging that Mrs. Mas was a Mississippi citizen, Mr. Mas a
French Citizen, and the landlord a citizen of Louisiana. The district court
denied the landlord's motion to dismiss for lack of subject matter
jurisdiction, and the Fifth Circuit affirmed. The court held that the fact that
Mrs. Mas had lived for a year in Louisiana did not change her domicile
even though she testified that she had no intention of returning to the
Mississippi home of her parents, that she was a Mississippi domicile
because she was in Louisiana only as a student and lacked the requisite
intent to remain there. “Until she acquires a new domicile, she remains a
domiciliary, and thus a citizen, of Mississippi.” Id. at 1400.
In the typical case, determining a person's state of domicile is
straightforward: most people own one home and, though they may travel or
have a vacation spot, they intend to return to that home. However, if a
party's domicile is unclear (imagine they spend half the year in New
Hampshire, and the other half in Georgia), then the courts look to the
totality of the circumstances to determine domicile. In making that
determination, there are no bright line rules. Some of the factors that courts
often consider include:
(1) the person's place of voting;
(2) the location of the person's real and personal property;
(3) the state issuing the person's driver's license;
(4) the state where the person's bank accounts are maintained;
(5) club, church, or membership in other organizations;
(6) the person's place of employment;
(7) the state or city where the person pays taxes;
(8) the state where the person votes; and
(9) where the person's vehicles are registered.
See Lundquist v. Precision Valley Aviation, 946 F.2d 8, 11 (1st Cir. 1991).
No one factor controls and the list is not exclusive.
Note that a person's domicile can change instantly, a fact that becomes
important because what matters is the place of domicile at the time the
claim is filed, not the time of the accident. Suppose, for example, that for
several years a person clearly was domiciled in New York, but then just
before suit was filed he bought a house in and moved his belongings to
New Jersey. He then sues a New York citizen: thus, unless he is now
domiciled in New Jersey, there is no diversity.
On the other hand, there is a presumption that a long-time domicile
continues. Consequently, absent evidence that shows a change of domicile,
it would be taken as fact that the person still is a citizen of New Jersey, and
so diversity would be lacking. To overcome this presumption, two things
are required: “He must take up residence at the new domicile, and he must
intend to remain there.” McCann v. Newman Irrevocable Trust, 458 F.3d
281, 286 (3rd Cir. 2006). To determine whether a party has established a
physical presence and intent to stay in a domicile, courts look at the same
factors above. Id.
A Special Circumstance: Citizens of the U.S. Domiciled Abroad. There
will never be diversity subject matter jurisdiction over a claim brought by
or against citizen of the United States who is domiciled in a foreign country
if the opposing party is a citizen of a State. A United States citizen who
establishes her domicile abroad cannot sue or be sued in federal court based
on diversity of citizenship because she will never be a citizens of different
State, since she's a citizen of the foreign country. Thus, there is no diversity
under Section 1332(a)(1). See Coury v. Prot, 85 F.3d 244 (5th Cir. 1996).
Nor will she come within another clause of Section 1332(a)(2), one we will
do not focus on, which gives federal courts subject matter jurisdiction over
claims between “citizens or subjects of a foreign state.” That clause only
applies if the suit is between two people who are both citizens of a foreign
country, and so while she is a U.S. citizen, the other party is not. Newman-
Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 828 (1989).

bb. Corporations Are Citizens of Both the State of

Incorporation and the State of Principal Place of
Business, Which Is Where It Has Its “Nerve Center”
A lot of lawsuits are brought by or against corporations. Corporations do
not have “domiciles” since they don't “intend to live” anywhere. Their
citizenship is instead defined by Section 1332(c)(1), which provides that,
with the exception of certain insurance suits, “a corporation shall be
deemed to be a citizen of any State by which it has been incorporated and
of the State where it has its principal place of business. . . .” Thus, a
corporation may be a citizen of one or two states for purposes of diversity:
the state in which it is incorporated (often Delaware) and the state of its
principal place of business.
States of Incorporation
Determining a corporation's state or states of incorporation is
straightforward: to become incorporated, a corporation must file certain
documents, including what are called “articles of corporation,” with a state
agency (typically, the state's Secretary of State). Corporations are typically,
but not always, incorporated only by one state. If the corporation is
incorporated by more than one state, which is rare, it is a citizen of every
state in which it is incorporated. Lee v. Trans Am. Trucking Serv., Inc., 111
F. Supp.2d 135 (E.D.N.Y. 1999); 28 U.S.C. § 1332(c)(1) (a corporation
shall be deemed a citizen of “any State by which it has been incorporated”).
Identifying the states in which a corporation is incorporated is a matter of
public record.
Nerve Center: Where Are the Company's Operational Headquarters?
Until recently, federal courts had applied competing tests to determine
where a corporation had its principal place of business for purposes of
Section 1332: (1) “nerve center”; (2) “place of activities” or “locus of
operations” test; and (3) “total activities.” J.A. Olson Co. v. City of Winona,
818 F.2d 401 (5th Cir. 1987) (discussing the tests). Fortunately, the
Supreme Court recently held that only the nerve center test determines the
citizenship of an active corporation. In Hertz Corp. v. Friend, 130 S.Ct.
1181 (2010), the Court held that in determining the state of a corporation's
“principal place of business” under Section 1332(c)(1) courts should look to
where the corporation's officers direct, control, and coordinate the
corporation's activities. Often this will be the corporation's main
headquarters. But the inquiry, necessarily, requires comparative analysis,
since some corporations may have several plants, many sales offices, and
multiple employees located throughout the country. What matters is where
the corporate control takes place, even if more “activity” such as sales
occurs in a different state, and is more visible to the public.
Inactive Corporations. Often corporations become inactive, and so have
neither a nerve center nor a place of activity. Yet, the diversity statute
requires they be given the citizenship of both the state of incorporation and
principal place of business. Does an inactive corporation have a principal
place of business? The courts split: (1) it has no principal place of business;
(2) the state where it does anything or, if none, the state where it last did
some; or (3) a facts and circumstances test. Holston Investments, Inc. B.V.I.
v. LanLogistics Corp., 877 F.3d 1068 (11th Cir. 2012).
Parent, Subsidiary, and Affiliated Corporations Each has its Own
Citizenship. It is common for a corporation to be owned by another
corporation (called a parent corporation), or to own a separate corporation
(called a subsidiary), or to have “sister” corporations, each owned by a
common parent (called affiliated corporations, or sister corporations). Thus,
a corporation that is incorporated as a separate entity from its parent,
subsidiary, or affiliated corporation has its own principal place of business.
Fitzgerald v. Seaboard System Railroad, Inc., 647 F. Supp. 205 (S.D.
Ga.1985).

cc. Citizenship of Other Business Entities

While Congress has specified which states corporations are deemed to be
citizens of, Congress has not defined citizenship for any other form of
business entity. Thus, courts have developed common law approaches. This
subsection summarizes their holdings.
Partnerships. The citizenship of each partner counts for determining
diversity. Chapman v. Barry, 129 U.S. 677, 682 (1889). So, a partnership of
two natural persons will have the citizenship of each natural person; a
partnership between a person and a corporation will have the citizenship of
(a) the domicile of the natural person; (b) the state of incorporation of the
corporation; and (c) the state of the principal place of business of the
corporation. (If one partner is a citizen of a foreign country, then as we saw
with natural persons, there will not be diversity subject matter jurisdiction
because the partnership is not a citizen of any state. Herrick v. SCS
Commun., Inc., 251 F.3d 315, 322–23 (2d Cir. 2001)).
Limited Partnerships. Limited partnerships have limited partners and at
least one general partner. The citizenship of all partners, both general and
limited, of an LP count for diversity purposes. In Carden v. Arkoma Assocs.,
494 U.S. 185 (1990), the Court in a 5–4 decision rejected the holding of the
appellate court that only the citizenship of the general partners of the
limited partnership mattered, noting that it had “never held that an artificial
entity, suing or being sued in its own name, can invoke the diversity
jurisdiction of the federal courts based on the citizenship of some but not all
of its members.” The majority recognized that the general partners are in
control of the limited partnership, and that by definition limited partners
must be passive, but rejected the dissent's argument that only the citizenship
of the “real parties to the controversy” should be counted — that of the
limited partnership itself, and the general partner. The impact, obviously, is
to make it more difficult for suits by or against limited partnerships to be
based on diversity subject matter jurisdiction.
Limited Liability Partnerships. An LLP is treated like a partnership, and
so has the citizenship of each partner, unless a state statute specifies
otherwise. Belleville Catering Co. v. Champaign Market Place L.L.C., 350
F.3d 691 (7th Cir. 2003) (“we have held that limited liability companies are
citizens of every state of which any member is a citizen”). LLP's can be
comprised of partners who are individuals, partnerships, and corporations.
Limited Liability Companies. A Limited Liability Company (LLC) has
the citizenship of each state of its members. Wise v. Wachovia Securities,
LLC, 450 F.3d 265, 267 (7th Cir. 2006).
Unincorporated Associations. An unincorporated association, such as a
trade association or union, is deemed to have the citizenship of each of its
members. United Steelworkers of Am. v. R.H. Bouligny, Inc., 382 U.S. 145,
146–50 (1965); Rose v. Giamatti, 721 F. Supp. 906 (S.D. Ohio 1989) (major
league baseball was an unincorporated association and so had citizenship of
each member team).
Watch for Mixtures. As briefly noted above, these various business
entities can come in tiered forms. For example, in some states a corporation
can be a limited partner in a limited liability partnership. Likewise, a
partnership might be comprised of two corporations, or a corporation and a
person. This can add steps to the citizenship inquiry. For example, if a
limited liability corporation has two members — one a natural person and
the other a corporation — then it has the citizenship of (1) the domicile of
the natural person; (2) the state of incorporation of the corporation; and (3)
the principal place of business of that corporation.

dd. Representative Actions: Citizenship of

Real Party in Interest
Certain persons are not competent to file suit, or for other reasons cannot
personally be named as a plaintiff in a suit. For example, infants,
incompetent adults, and decedents cannot file suits. Another person as a
representative instead brings the suit. Does the citizenship of the
representative, or the person she represents, count?
Section 1332(c)(2) provides the answer. It provides that “the legal
representative of the estate of a decedent shall be deemed to be a citizen
only of the same State as the decedent, and the legal representative of an
infant or incompetent shall be deemed to be a citizen only of the same State
as the infant or incompetent.” Put simply, the state of the real party in
interest — the party being represented by the legal representative —
controls, not the citizenship of the representative. So, for example, in Green
v. Lake of the Woods County, 815 F. Supp. 305 (D. Minn. 1993), the father
of a boy killed in a car wreck filed suit as trustee of his son's estate filed suit
against the driver of the vehicle that killed him. The son and the other
driver were citizens of Minnesota, but the father was a citizen of Illinois;
even so, the district court held that the son's citizenship controlled and
diversity jurisdiction was lacking.
ii. Section 1332 Requires More Than $75,000 in Controversy
Not only does Section 1332 require complete, rather than minimal
diversity, Congress included a minimum amount in controversy. Article III
does not require a minimum amount in controversy. Congress has amended
the statute to increase the minimum amount in controversy over the years.
Today, it is at $75,000. Thus, even if complete diversity exists there is no
diversity subject matter jurisdiction if the amount in controversy, exclusive
of interest and costs, does not exceed $75,000. Contrast this with the
general federal question statute, which has no minimum amount in
controversy.

(a) When Is the Amount in Controversy Calculated?

The amount in controversy requirement is initially determined by the
amount claimed by the plaintiff in its complaint, which “controls if the
claim [was] made in good faith.” St. Paul Mercury Indem. Co. v. Red Cab
Co., 303 U.S. 283, 288–89 (1938). Thus, as with citizenship, the amount in
controversy is determined at the time the complaint is filed. Thesleff v.
Harvard Trust Co., 154 F.2d 732, 732 n.1 (1st Cir. 1946) (“federal
jurisdiction depends upon the facts at the time suit is commenced, and
subsequent changes . . . in the amount in controversy [do not] divest it”).
But, the defendant's ability to argue that the amount claimed is in bad
faith (discussed below) raises some complex issues, and what if the plaintiff
does not plead an amount in the complaint, or pleads an amount that is less
than $75,000? (That latter question gets litigated in removal issues
frequently, a topic we'll cover in Chapter 10.) What if the plaintiff in good
faith pleads an amount in excess of $75,000, but ends up recovering less
from the jury?

(b) The Legal Certainty Test Applies to the Amount

Pled by Plaintiff
A court can dismiss a claim for failure to satisfy the amount in
controversy requirement only if it is proven to a legal certainty that the
actual amount in controversy is less than $75,000. Lowdermilk v. U.S. Bank
Nat'l Ass'n., 479 F.3d 994 (9th Cir. 2007) (“if the complaint alleges
damages in excess of the federal amount-in-controversy requirement, then
the amount-in-controversy requirement is presumptively satisfied unless it
appears to a legal certainty that the claim is actually for less than the
jurisdictional amount”). This is an extremely difficult burden: to dismiss
because the amount in controversy requirement is not met, “[t]he legal
impossibility of recovery must be so certain as virtually to negative the
plaintiff's good faith in asserting the claim.” Tongkook Am. v. Shipton
Sportswear Co., 14 F.3d 781, 786 (2d Cir. 1994). “The court should not
consider in its jurisdictional inquiry the legal sufficiency of those claims or
whether the legal theory advanced by the plaintiff is probably sound.”
Suber v. Chrysler Corp., 104 F.3d 578, 583 (3d Cir. 1997). Instead, the
court should engage “in only minimal scrutiny of the plaintiff's claims.” Id.;
see Coventry Sewage Assocs. v. Dworkin Realty Co., 71 F.3d 1, 4 (9th Cir.
1995) (recognizing that although “a federal court should rigorously enforce
the jurisdictional limits” of the diversity statute, “preliminary jurisdictional
determinations should neither unduly delay, nor unfairly deprive a party
from, determination of the controversy on the merits.”).
Why is it so hard for a party to prove that the actual amount in
controversy really doesn't satisfy the $75,000 requirement? The high
standard created by the legal certainty test is designed to avoid pre-trying
the case: if a lower standard were used, then to determine if it has subject
matter jurisdiction the court would almost have to try the whole case to
know if it has jurisdiction to do so. To avoid that problem, it must appear to
a legal certainty that the plaintiff can't recover more than $75,000 for the
court to conclude that the requirement is not met. Thus, the “legal certainty”
standard is a minimal check so that the court doesn't have to try the case to
determine whether the court has jurisdiction to do so.
In part also to avoid pre-trying the case, the court cannot consider
affirmative defenses to “whittle down” the amount in controversy. Scherer
v. Equitable Life Assurance Soc'y of U.S., 347 F.3d 394 (2d Cir. 2003)
(viewing this also as an aspect of the well-pleaded complaint rule). In
Scherer, the Second Circuit explained:
This may seem paradoxical: if it can be said “to a legal certainty” that
the defense in question is a winning defense, ought it not be
considered for amount-in-controversy purposes? One plausible answer
is that because affirmative defenses can be waived, the court cannot at
the time of filing be certain that any given affirmative defense will be
applied to the case. Given the time-of-filing rule, it follows that
waivable “affirmative defenses” are not germane to determining
whether the amount-in-controversy requirement has been met.
Id. at 398. Likewise, in St. Paul Mercury Indemnity Co. v. Red Cab Co., 303
U.S. 283 (1938), the Supreme Court explained that the plaintiff's inability to
ultimately recover the jurisdictional amount does not oust the court of
jurisdiction, “[n]or does the fact that the complaint discloses the existence
of a valid defense to the claim.” Id. at 289. Thus, it is somewhat unusual for
a court to dismiss where the plaintiff has pled an amount exceeding
$75,000, see, e.g., Danial v. Daniels, 162 Fed. Appx. 288 (5th Cir. 2006)
(affirming dismissal of complaint where plaintiff specifically pled that its
damages were less than $7,000); Nelson v. Kefer, 451 F.2d 289 (3rd Cir.
1971) (affirming dismissal where medical and property damages in personal
injury case came to 1% of amount in controversy requirement), and cases
reversing district courts for dismissing a claim for not meeting the amount
in controversy are comparatively more common. See, e.g., Meridian Sec.
Ins. Co. v. Sadowski, 441 F.3d 536 (7th Cir. 2006) (remanding for trial a
case that district court had dismissed under the legal certainty test).
This issue may allow for dismissal when there is a substantive rule of law
that clearly excludes the type of damages the plaintiff seeks to rely on to
meet the $75,000 minimum. Suppose, for example, that a plaintiff brings a
breach of contract claim and asserts the damages are more than $75,000
because it suffered emotional distress as a result of the breach. Suppose that
under state law, emotional distress damages are not recoverable for breach
of contract (that is the general rule, with exceptions relating to disposition
of dead bodies and other odd circumstances). In that case, the defendant
could establish to a legal certainty that plaintiff would not recover more
than $75,000 because the damages sought are not legally recoverable.
 Valuing Injunctive Relief. Where a plaintiff seeks equitable relief, such
as an injunction, how should it be valued? Generally, the amount in
controversy requirement is met if the value of the injunction to the plaintiff
or the cost to the defendant meets or exceeds the statutory minimum.
McCauley v. Ford Motor Co., 264 F.3d 952, 958 (9th Cir. 2001) (citing
Ridder Bros., Inc. v. Blethen, 142 F.2d 395, 399 (9th Cir.1944) (the test for
determining the amount in controversy is the “pecuniary result to either
party which the judgment would directly produce”)).
The Value of the Object Test. This test is sometimes applied in injunction
cases, too, and sometimes in other circumstances. In Williams v. Kleppe,
539 F.2d 803 (1st Cir. 1976), for example, the plaintiffs sought to enjoin a
statute that prohibited skinny dipping, and applied value of the objective
approach and held that the right to skinny dip was probably not worth
$10,000 (the amount in controversy requirement at that time).
Do Attorneys' Fees Count? The general rule is that attorneys' fees that
the plaintiff seeks to recover from the defendant do not “count” for
purposes of determining whether the amount in controversy is met.
However, there two principal exceptions: (1) where a statute (state or
federal) permits their recovery for the claim or (2) for a breach of contract
claim, where the plaintiff is entitled to such fees under the terms of the
contract in suit. See Manguno v. Prudential Property & Cas. Ins. Co., 276
F.3d 720, 723 (5th Cir.2002) (“[i]f a state statute provides for attorney's
fees, such fees are included as part of the amount in controversy.”); Saval v.
BL Ltd., 710 F.2d 1027, 1033 (4th Cir.1983) (courts consider attorney fees
part of the jurisdictional amount in controversy where statutes or
contractual provisions transform the fees into substantive rights to which
litigants are entitled).
What if no Amount is Pled in the Complaint? Where a claim is made for
indeterminate or unspecified amount damages, “[the] ‘legal certainty test’
gives way, and the party seeking to invoke federal jurisdiction bears the
burden of proving by a preponderance of the evidence that the claim on
which it is basing jurisdiction meets the jurisdictional minimum.”
Federated Mut. Ins. Co. v. McKinnon Motors, LLC, 329 F.3d 805, 807 (11th
Cir. 2003). Thus, if a plaintiff or other party wants there to be diversity
jurisdiction in federal court, it should plead in its complaint that the amount
in controversy exclusive of costs and interests exceeds $75,000.
What About Facts Learned After Filing the Complaint? What if the
plaintiff files suit and in good faith alleges that damages are greater than
$75,000, but even before the defendant answers, the plaintiff learns that in
fact damages are substantially below the jurisdictional minimum? It doesn't
matter: as noted above, the general rule is that federal jurisdiction turns on
the facts at the time suit is filed, and so subsequent changes in the amount
in controversy are irrelevant. So, for example, in Coventry Sewage Assocs.
v. Dworkin Realty Co., 71 F.3d 1 (1st Cir. 1995), the plaintiff in good faith
claimed damages in excess of $75,000 but learned before the defendant
filed its answer that in fact the actual amount in controversy was about
$30,000. The defendant moved to dismiss for lack of subject matter
jurisdiction, but the court held that the case fit “well within the rule that
once jurisdiction attaches, it is not ousted by a subsequent change of
events.” Id. at 7 (collecting cases).
What if the Judgment Obtained After Trial is Less Than the
Jurisdictional Minimum? Jurisdiction is unaffected: so long as the
complaint met the legal certainty test under the facts at the time of filing —
the plaintiff had a good faith basis for believing the amount exceeded
$75,000 — then jurisdiction attaches and subsequent events are irrelevant.
But, under 28 U.S.C. 1332(b), the plaintiff may have to pay certain costs to
the defendant, or be denied recovery itself:
where the plaintiff who files the case originally in the Federal courts is
finally adjudged to be entitled to recover less than the sum or value of
$75,000, computed without regard to any setoff or counterclaim to
which the defendant may be adjudged to be entitled, and exclusive of
interest and costs, the district court may deny costs to the plaintiff and,
in addition, may impose costs on the plaintiff . . .
Why did the plaintiff in Coventry then seek to remain in federal court?
Probably because the “costs” that the court can deny to the plaintiff, or
impose on it, are typically fairly low, often measuring only a few hundred to
a few thousand dollars. See Coventry, 71 F.3d at 8 n.1.

(c) Multiple Claims, Multiple Plaintiffs, and the

Amount
in Controversy
For a court to have diversity jurisdiction over one claim by a plaintiff
against a defendant under Section 1332, the amount in controversy must be
satisfied as to that claim. If a plaintiff asserts a claim for $75,001 against a
diverse defendant, the amount in controversy is satisfied.
What if a plaintiff has two claims against a single defendant, each of
which is for less than $75,000, but when added together — aggregated —
the total is more than $75,000? Likewise, what if two (or more) plaintiffs
each have a claim against a single defendant, but no one plaintiff's claim
exceeds $75,000? Can separate plaintiff's claims be aggregated? Finally,
what about one plaintiff with claims against two (or more) defendants,
where no one claim exceeds $75,000? (If a plaintiff has a claim against a
defendant exceeds $75,000 and has a claim against that defendant, or other
defendants, that does not meet the minimum, then the plaintiff could either
aggregate them or if aggregation is unavailable, examine whether joinder of
the claim for less than $75,000 is proper and whether supplemental
jurisdiction exists. See Chapter 21.)

(1) A Single Plaintiff may Aggregate Claims Against

a Single Defendant
It is common for a plaintiff to include two (or more) claims against one
defendant. The amount of those claims may be aggregated: “in determining
whether the amount-in-controversy requirement has been satisfied, a single
plaintiff may aggregate two or more claims against a single defendant, even
if the claims are unrelated.” ExxonMobil Corp. v. Allapattah Serv., Inc., 545
U.S. 546 (2005). Thus, a plaintiff can plead two claims, one for $45,001
and the other for $30,000, and the total amount counts, even if the claims
are completely unrelated to each other. This rule holds true for each plaintiff
who sues a single defendant: if two plaintiffs sue one defendant, each
plaintiff can aggregate its amounts; if two plaintiffs sue two defendants,
each plaintiff can aggregate its amounts separately against each defendant.

(2) A Plaintiff Cannot Aggregate Claims Against More Than

one Defendant Unless the Defendants are Jointly Liable
In a case by a single plaintiff with claims against more than one
defendant, the general rule is that “where a suit is brought against several
defendants asserting claims against each of them which are separate and
distinct, the test of [the amount in controversy requirement] is the amount
of each claim, and not their aggregate.” Jewell v. Grain Dealers Mut. Ins.
Co., 290 F.2d 11, 13 (5th Cir. 1961). So, if a plaintiff sues one defendant for
$65,001, and another for a separate claim for $10,000, the plaintiff does not
satisfy the amount in controversy requirement.
There is one fairly large exception to that general rule. Where a plaintiff
makes claims against two defendants who are jointly liable to the plaintiff,
the amount sought against each defendant can be aggregated (added
together) to reach the statutory minimum. Middle Tenn. News Co. v.
Charnel of Cincinnati, Inc., 250 F.3d 1077 (7th Cir. 2001). Thus, a plaintiff
may aggregate damages claimed against two or more defendants only if
under governing state law the defendants are jointly and severally liable to
the plaintiff.
If there is no joint and several liability, the plaintiff must satisfy the
amount in controversy requirement against at least one individual
defendant; if so, there is jurisdiction over that claim, and the question would
be whether there is supplemental jurisdiction over the claim against the
other, joined defendant. See Chapter 21. But, if one or more defendants are
not jointly and severally liable and neither claim exceeds $75,000, the
amount in controversy is not satisfied.

(3) Multiple Plaintiffs may not Aggregate Their Claims Unless

They are Pursuing a Unified Remedy
Suppose more than one plaintiff each signed the same contract with a
defendant, say to borrow money, with each plaintiff's damages being less
than $75,000, but the total amount they collectively lost exceeding that
amount. Can they aggregate their claims to satisfy the amount in
controversy?
Almost always the answer is “no”: in cases involving multiple plaintiffs,
“the separate claims of multiple plaintiffs against a single defendant cannot
be aggregated to meet the jurisdictional requirement.” Clark v. State Farm
Mutual Auto. Ins. Co., 473 F.3d 708 (7th Cir. 2007). So, while the claims of
Plaintiff A against Defendant A can be aggregated, the claims of Plaintiffs
A and B cannot be. Multiple plaintiffs cannot add their amounts together
where their claims are separate and distinct, as in the case of multiple
contracts. Each plaintiff must individually satisfy the amount in controversy
requirement. Snyder v. Harris, 394 U.S. 332, 335 (1969). Thus, if each
plaintiff has its own claim against a defendant for breach of contract that
resulted in damage to the particular plaintiff, the amounts may not be
aggregated even if the two contracts are identical. Lovell v. State Farm Mut.
Auto. Ins. Co., 466 F.3d 893 (10th Cir. 2006).
 However, there is one fairly narrow exception (and another for federal
class actions, a subject discussed in the final part of this book): the amounts
can be aggregated when plaintiffs “unite to enforce a single title or right in
which they have a common and undivided interest.” Snyder, 394 U.S. at
335. It is hard to satisfy this “unity of right” requirement:
Despite pervasive criticism of the “separate and distinct” versus
“common and undivided” distinction as arcane and confusing, there
appears to be a common thread in the relevant case law-the presence of
a “common and undivided interest” is rather uncommon, existing only
when the defendant owes an obligation to the group of plaintiffs as a
group and not to the individuals severally. See Eagle v. American Tel.
and Tel. Co., 769 F.2d 541, 546 (9th Cir.1985) (“[T]he character of the
interest asserted depends on the source of plaintiffs' claims. If the
claims are derived from rights that they hold in group status, then the
claims are common and undivided. If not, the claims are separate and
distinct.”); National Org. for Women v. Mutual of Omaha Ins. Co., 612
F. Supp. 100, 107 (D.D.C.1985) (“[T]he cases that allow aggregation
often speak of the presence of some fund to which a plaintiff class is
seeking access[, and] . . . they often involve an attempt to enforce a
right that belongs to a group.”).
Friedman v. New York Life Ins. Co., 410 F.3d 1350 (11th Cir. 2005). Thus,
the general rule that plaintiffs cannot aggregate their claims is broad, and
the exceptions are narrow.

B. Must the Claim be Filed in Federal

Court?
1. Claims Arising Under Federal Law
There are two significant but counter-intuitive points about federal
question jurisdiction.
First, nothing in the Constitution requires Congress to allow only federal
courts to hear federal question claims: Article III does not say that Congress
has to preclude state courts from having concurrent subject matter
jurisdiction. Put another way, Article III allows Congress to enact statutes
that permit, but do not require, federal claims to be filed in federal courts.
Other portions of the Constitution do give exclusive jurisdiction to federal
courts over certain types of claims (e.g., claims between two States can
only be brought in the Supreme Court), but Article III does not. Thus,
Congress could give federal courts exclusive federal jurisdiction over
federal claims (not state claims without, at least, minimal diversity!). But
Section 1331does not do so: a claim may be filed in federal court under
1331. Unless some other federal statute requires the particular federal claim
be filed in federal court, the plaintiff can choose to file in state court. Thus,
state courts can “render binding judicial decisions that rest on their own
interpretations of federal law.” ASARCO Inc. v. Kadish, 490 U.S. 605, 617
(1989). See Testa v. Katt, 330 U.S. 386 (1947).
The only likely statute that will require a federal claim to be filed in
federal court is the statute that creates the claim. There are not many
exclusively federal claims, but the common ones include:

Claims where the United States is a party. Art. III, § 2

Patent infringement claims. 28 U.S.C. § 1338
Admiralty and maritime claims. 28 U.S.C. § 1333
Bankruptcy proceedings. 28 U.S.C. § 1334
Claims against a foreign state. 28 U.S.C. § 1441(d)
Federal Tort Claim Act claims. 28 U.S.C. § 1346(b)

But that brings up the second oddity: even if a statute provides that a
claim must be filed in federal court, nothing requires a plaintiff to do so.
And mistakes do happen. A plaintiff also may make a mistake and file an
exclusively federal claim in state court. What happens if a plaintiff files in
state court a claim over which the federal courts have exclusive subject
matter jurisdiction? If the defendant does not remove the case (see Chapter
10), the state court can decide the claim; however, its judgment will be
subject to collateral attack. That is, the defendant could later file suit in
federal court to challenge the outcome reached by the state court. See Kalb
v. Feuerstein, 308 U.S. 433 (1940). That may result in the whole state court
proceeding being rendered a nullity, and the claim having to be relitigated
in a federal forum.
What does the fact that a plaintiff often can file a federal claim in state
court, and sometimes may do so even in the rare case when only federal
courts have subject matter jurisdiction over the claim? First, the plaintiff
may have a choice: it may be that the claim can be properly filed in either
state or federal court. Filing in state court a claim that is exclusively federal
is not a good idea, but it can be done. For the defendant, it means that
defense counsel must analyze whether the claim arises under federal law.
The plaintiff may have exercised a choice to file in state court a claim that
could also be filed in federal court. If the claim does arise under federal law,
then the defendant can remove the case to federal court. See Chapter 10.

2. State Law Claims That Meet Diversity

Requirements
Nothing requires a plaintiff to file in federal court a claim that meets the
requirements of the diversity statute. A plaintiff can file in state court a
claim between citizens of different states with an amount in controversy
over $75,000. But, the defendant then may “remove” the case to federal
court. See Chapter 10.
What does the availability of these choices mean for the parties' lawyers?
The plaintiff's lawyer can exercise the first option, deciding whether as a
practical or strategic matter one forum is more favorable than the other.
Generally, lawyers view state courts as more favorable for plaintiffs and
federal court more favorable for defendants, although there are many
exceptions to that view. If the plaintiff's lawyer chooses to file a claim in
state court that meets the requirements of the diversity statute, defense
counsel has the power to “remove” the case to federal court. Thus, defense
counsel must ascertain whether a claim is “removable,” and, if so, decide
whether a federal forum would strategically best serve the defendant; if so,
defense counsel should remove the case from state to federal court. See
Chapter 10.

3. The Discussion Here Applies to the First Claim

and all Other Claims but as to Additional Claims,
if There is no Diversity or Federal Question,
Supplemental Subject Matter Jurisdiction may be
Available
As shown above, the Constitution permits Congress to enact statutes that
allow subject matter jurisdiction where federal law is merely an ingredient
to a claim, or when there is minimal diversity. In Section 1331 and 1332,
Congress chose not to extend federal power to the Constitutional limits.
But there is another statute, 28 U.S.C. § 1367. See Chapter 21. It only is
available if there is one claim over which the court has subject matter
jurisdiction under Section 1331 or 1332, however. We will explore it in
detail later. But just because 1332 requires complete diversity and a
minimum amount in controversy does not mean that Congress could not
enact a statute that requires only minimal diversity or has no amount in
controversy. Congress did so in Section 1367, but that statute only applies if
there is one claim that fits under Section 1331 or Section 1332. So, unless
there is one claim over which the court has original subject matter
jurisdiction under either of those two statutes, Section 1367 is unavailable.
So as to not leave you in suspense, the basic notion behind Section 1367
is this, and it relates to something we talked about at the outset: the same set
of facts will give rise to multiple claims. If a plaintiff has a federal claim
(say employment discrimination under a federal statute) and, for example, a
state law claim that arises out of that same set of facts for breach of
contract, why not try those claims in one case? Without Section 1367,
unless there was also complete diversity and at least $75,000 in
controversy, there would have to be two lawsuits. Section 1367 is designed
to allow for efficient resolution of cases already anchored in federal court.
That, as you'll see, is the easy part.

Checkpoints

Can you identify the three ways that a claim can arise under federal law?
Can you explain when a plaintiff's state law claim nonetheless arises under federal law?
Do you know how to determine the citizenship of each type of party?
Can you calculate when the amount of controversy is satisfied when plaintiff has not simply pled for
more than $75,000, including when and when not “aggregation” is proper?
Can you explain when you will look to Section 1367 and why it may Constitutionally require “less”
than Section 1331 or Section 1332?
If subject matter jurisdiction is lacking, what do you do? See Chapter 30.
Chapter 5

The Foundations
of Personal Jurisdiction

Personal Jurisdiction Roadmap

This chapter explains that the concept of personal jurisdiction arises from a non-resident
defendant's right not to be sued in a state where it would be unfair to defend himself, and how
that right is balanced against the need for a state to protect its citizens from harm by citizens of
some other state.

It helps to understand personal jurisdiction to keep in mind that, at their

core, civil lawsuits are about obtaining governmental power to coerce
resolution of a private dispute: a process we call “adjudication.” A person
who believes someone has breached a contract, for example, sues to force
that person to pay money to compensate for the harm caused by the breach.
A court can issue orders that allow the prevailing party to use the
government to force the losing party to pay money.
Now, add to that the fact that each state has its own separate government
and is sovereign from each other. On the one hand, a state should be able to
force a defendant who comes into that state and deliberately hurts one of its
citizens to come back to that state and defend a claim arising out of that
visit. But, should a state have the power to force a defendant to defend a
suit when the defendant has never been to the state and the suit has nothing
to do with that state?
Personal jurisdiction is a limit on governmental power. We'll see that
some limitations are created by state or federal statute, while others are
imposed by the Constitution. Specifically, “long-arm statutes” of the states
both create and limit judicial power to force non-residents to defend
themselves in a state. Likewise, the Due Process Clauses of the Fifth and
Fourteenth Amendments limit the power that federal and state courts have
over a person and his property. These limitations on power are expressed by
the principle that a court, whether state or federal, must have “personal
jurisdiction” over a defendant to enter an order that binds the defendant to
pay a money judgment or otherwise be affected by a court's judgment.
Why should a state have any power over non-residents? Why should a
court in Arizona have the power to enter a judgment that will require a
defendant living in Colorado to pay money to an Arizona resident? Why
should the courts of one state be able, at all, to force a citizen of another
state to defend lawsuits in their state? That question helps to make clear
why states do have power to force non-residents to defend claims brought
by residents, but also why there are limits on that power.
The power arises from the need of a state to protect its citizens from
wrongful acts of out-of-state citizens. Imagine a world where, if a driver
from Oregon injured an Arizona resident in a car wreck in Tucson, the
Arizona resident must sue the Oregon resident in Oregon. Or, if a citizen of
Tennessee bought a defective flat screen TV by mail from a California
company, but had to sue in California to get her money back. Many wrongs
would go unpunished. Thus, the law recognizes that every state has a
“‘manifest interest’ in providing its residents with a convenient forum for
redressing injuries inflicted by out-of-state actors.” Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 474 (1985).
At the same time, this power is not without limits. Some limits are built
into “long-arm statutes.” Some state long-arm statutes, for example, require
that part of the claim have physically occurred in the state. No matter the
reach of the long-arm statute, however, the Due Process Clause of the
Fourteenth Amendment limits the power of states to force non-residents to
be haled into a state to defend themselves. (The Due Process Clause of the
Fifth Amendment limits federal courts' power over federal question claim in
a similar fashion.)
The law of personal jurisdiction balances the competing concerns of
allowing a state to protect its citizens, protecting citizens of another state
from defending themselves in another state, and the fact that each state is its
own sovereign. See Pennoyer v. Neff, 95 U.S. 714 (1877) (recognizing that
although “every State possesses exclusive jurisdiction and sovereignty over
persons and property within its territory” that principle also means that “no
State can exercise direct jurisdiction and authority over persons and proper
without its territory”).
The limitations on government power that arise from the Due Process
Clauses are worth emphasizing. “Even if the defendant would suffer
minimal or no inconvenience from being forced to litigate before the
tribunals of another State; even if the forum State has a strong interest in
applying its law to the controversy; even if the forum State is the most
convenient location for litigation, the Due Process Clause, acting as an
instrument of interstate federalism, may sometimes act to divest the State of
its power to render a valid judgment.” World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286 (1980). Think about that: the defendant's
constitutional right not to be sued in a forum where “personal jurisdiction”
over a claim is lacking outweighs the efficiency interests, the interest of a
state of protecting its citizens from harm, and does so even if it would be
entirely convenient for the defendant to defend itself where suit is filed.
Finding the right balance between these interests — the right of a state to
protect its citizens from harm and the right of a citizen not to be haled into
foreign courts — is subject to few bright lines. That is why the personal
jurisdiction analysis is fact intensive, multi-factored, and often
indeterminate.
Personal jurisdiction has many counter-intuitive aspects. Personal
jurisdiction can exist even when the defendant has never set foot in the state
where he's been sued, for example. Physical connections matter, but they
are not controlling. Instead, personal jurisdiction largely turns on whether
the defendant has created sufficient contacts with the state where the suit is
filed such that it is reasonable for the defendant to defend himself there.
Suppose you've never been to Iowa, but an Iowan sues you because, while
she was visiting you in the state where you live, you punched her. Should
you be required to defend yourself in Iowa when you've never been there,
and the wrongdoing didn't occur there? Doesn't sound like you made any
connections with Iowa, concerning this claim, does it? You shouldn't be
subject to being sued in a state that you haven't made much connection with
and which isn't connected to the dispute.
That basic idea — a person should not have to defend himself in a state
without having made sufficient contact with that state — underlies personal
jurisdiction. “Personal jurisdiction” limits the ability of a state or federal
court to force a citizen of another state to defend itself in that state against
the threat of a money judgment being rendered that will be enforceable
against the person and all his assets. There are three broad principles to
remember.
 First, a statute must allow the court to assert personal jurisdiction for the
claim over the non-resident defendant. These can be state or federal
statutes. They are called long-arm statutes because they allow the “long
arm” of the state to reach out to grab the non-resident defendant.
Second, personal jurisdiction must be analyzed on a claim-by-claim
basis: it is possible that a court will have personal jurisdiction over only
some claims in a pleading, not all. Suppose, for example, a Minnesota
defendant makes a contract with a Florida resident to build a house in
Florida, but builds a defective home. We'll see that it's likely a Florida court
would have personal jurisdiction over the defendant on that breach of
contract claim because that claim arose directly out of defendant's contacts
with Florida. But, what if while in Minnesota visiting friends, the same
defendant and same plaintiff happened to get into a fight in a bar; can a
Florida court exert personal jurisdiction over a party for claim for battery
arising out of a bar fight in Minnesota when the defendant's only connection
with Florida is an unrelated contract? No, as we'll see. The point is that each
claim must be analyzed separately.
Finally, even if a state or federal long-arm statute literally permits
assertion of personal jurisdiction over the claim, the Due Process Clause
always limits when any court can force someone to defend himself in
another state. The Due Process Clause requires there be “minimum
contacts” between the defendant and the forum state, and that it be “fair”
for the defendant to be forced to defend itself in that state.
On this third issue, the courts have struggled mightily: when does a
defendant have “minimum contacts” and when is it “fair” to require one to
come to a state to defend itself? As we'll see, a judgment entered by a court
in another state can be brought to the defendant's home state and used by
the plaintiff to take away the defendant's property. Allowing a court in
another state to enter a judgment that can affect someone who's never been
there, or who has only minor connections with that state raises some serious
questions. If we make it too easy to do, then defendants will be forced to
defend suits in places they have no connection with; if we make it too hard,
then the acts of an out-of-state defendant who harms someone may go
unpunished, because the victim would have to travel to the defendant's
home state to get relief. In the next chapter, we'll see how the law that
balances these competing interests is rapidly changing.

Checkpoints
What is a long-arm statute?
Can you articulate the purpose of the Due Process Clause as applied to personal jurisdiction?
Do you understand whether convenience of the other party, or the court, can outweigh the defendant's
Due Process interests?
Chapter 6

Personal Jurisdiction: Consent,

Long-Arm Statutes, Minimum
Contacts, and Fair Play

Personal Jurisdiction Roadmap

This chapter describes the steps to determine whether a court has personal jurisdiction over
a claim against a party.
The first step is to determine if the defendant had consented to be sued on the particular
claim in the forum state. If so, the analysis is over unless the forum was chosen in bad faith,
such as to reduce claims..
The second step requires determining whether a statute — usually a state “long arm”
statute — authorizes service of process on the defendant for the claim.
The third step requires looking to see if an individual defendant was “tagged” in the forum
state; if so the analysis is at an end unless the defendant was deceived into coming into the
forum state in order to serve process on him.
The fourth step requires analyzing whether assertion of personal jurisdiction over the
defendant on that claim meets the “minimum contacts” requirements of the Due Process
Clause.
The fifth step requires analyzing whether, even though a statute authorizes service of
process and minimum contacts are present, assertion of personal jurisdiction would
nonetheless violate traditional notions of fair play and substantial justice.
Beyond that, and much in the way that supplemental subject matter jurisdiction under
Section 1367 allows a court to decide claims that are closely related to one over which a court
has original subject matter, in narrow circumstances “pendent personal jurisdiction” allows a
court to assert personal jurisdiction over claims closely related to one over which it has
“regular” personal jurisdiction.

Subject matter jurisdiction is a limitation on federal courts' power over

claims. In contrast, personal jurisdiction is a limitation on state and federal
courts' power over persons and their property. Like subject matter
jurisdiction, personal jurisdiction is determined on a claim-by-claim,
defendant-by-defendant basis. Consequently, personal jurisdiction might
exist over some, but not all, claims in a particular lawsuit.
As will become clear in this chapter, as a general principle, the Due
Process Clause prevents a defendant being subjected to a suit in a state if it
would be “unfair” to make the defendant defend himself there. As an easy
case, it would be unfair for a defendant with no connection to Colorado to
defend herself there against a claim arising out of a car wreck in Georgia.
On the other hand, it would be fair to make a defendant who lives in
Georgia to defend himself in Georgia against a claim arising out of a
Georgia car wreck. But in between those two extremes is an enormous sea
of grey. This chapter will shed light on that grey sea.
There are three kinds of personal jurisdiction: in rem, quasi in rem, and in
personam. As their names suggest, the first two are related. They are means
by which a court can issue orders that bind specific property of the
defendant's — not the defendant's assets in general. In personam or
“personal” jurisdiction is the more commonly litigated and asserted form of
personal jurisdiction. It subjects all of the defendant's assets to satisfaction
of any judgment issued against the defendant. See Chapters 5, 6 and 7. This
chapter addresses in personam jurisdiction, and the next chapter addresses
in rem and quasi in rem.
A plaintiff who sues a defendant in a state where the defendant does not
have significant presence and seeks to subject all of the defendant's assets to
any judgment — and not specific property the defendant has in that state —
must establish that the court has in personam jurisdiction over the claim
against the defendant. In rem and quasi in rem are not enough to establish
unlimited personal liability. Fortunately, as will become clear, the same
process to determine whether personal jurisdiction exists is the same,
regardless of which type is used.
Analyzing whether personal jurisdiction is proper starts with: did the
defendant consent to be sued in the state, whether by operation of law or by
agreement? If not, then the analysis requires three steps. First, a statute
must authorize service of process on the defendant for the particular claim.
These are typically state statutes, and are called “long arm statutes” because
the long arm of the state reaches out to a defendant and grabs him. But there
are federal long-arm statutes, though they are much less common. Second,
the defendant must have “minimum contacts” with the forum (for state law
claims, the contacts must be with the state where the federal court sits; for
federal claims, the contacts also ordinarily be with the state where the suit is
filed, but for a few federal claims, contacts can be with any state.) Third,
even if the defendant is within the long arm statute and has minimum
contacts, the defendant can avoid being haled into court by showing that
forcing it to defend itself in the state is not “fair.”
 This chapter addresses personal jurisdiction going from the easiest
analysis to the most difficult. Here is a flow chart that captures this chapter
and a means to spot and effectively address personal jurisdiction:

A. Generally a Claim-by-Claim,
Defendant-by-Defendant Analysis Is
Required
First, analyze personal jurisdiction on a claim-by-claim, defendant-by-
defendant basis. If a “complaint contains two [or more] claims . . . there
must be an independent basis for the assertion of personal jurisdiction for
each claim. Jurisdiction over one claim does not imply jurisdiction over
another.” Debreceni v. Bru-Jell Leasing Corp., 710 F. Supp. 15, 19 (D.
Mass. 1989); see Druid Group, Inc. v. Dorfman, 2006 WL 2460553 (N.D.
Tex. 2006) (“The Court must conduct the minimum contacts analysis
separately for each cause of action asserted, because Plaintiff is obligated to
secure jurisdiction over [each defendant] with respect to each claim
brought.”). So, and just as with subject matter jurisdiction, courts determine
personal jurisdiction on a claim-by-claim basis.
However, there is one wrinkle called “pendent personal jurisdiction.” A
court can sometimes use “pendent” personal jurisdiction to let closely
related claims tag along with a claim over which the court has, for lack of a
better word, “regular” personal jurisdiction. Further, the same tag along
concept that applies to subject matter jurisdiction (and is called
“supplemental subject matter jurisdiction, see Chapter 22), and the concept
also applies to venue, and is called “pendent venue.” See Chapter 23.

B. Did the Defendant Consent

to Personal Jurisdiction?
If a defendant has consented to be sued on a claim in a state, for example,
then personal jurisdiction will exist. Consent can take two forms: express
and by operation of law.
Some of the following apply only to corporations, while others apply to
both corporations and individuals, so read carefully. Further, theoretically a
state long arm statute could not reach these “easy” examples. If a long arm
statute somehow, for example, excludes corporations incorporated in the
state, then there would be no personal jurisdiction. For that reason, these
“easy” points are mentioned again where applicable in the analysis below.

1. Did the Parties Contractually Agree the Claim

Could or Must be Filed in the Forum State?
Both individuals and corporations can agree by contract that a suit can be
filed in a particular state, or that it must be filed there. In fact, many
contracts contain “forum selection clauses.” Essentially, a forum selection
clause is an provision in an agreement that, if a claim is within its scope, the
suit can and must be brought in a certain state. So, for example, a contract
may state: “The parties to this contract agree that any claim or dispute
arising out of or related to this contract must be filed in Fulton, County,
Georgia. Further, the parties waive any objection to personal jurisdiction or
venue over any suit filed in Fulton County, Georgia.”
If the claim is for breach of the contract containing the forum selection
clause, and if both the plaintiff and defendant are parties to the contract,
then — absent very unusual circumstances — the clause will be enforced.
Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991). Generally, forum
selection clauses are enforced unless (1) the existence of the clause was not
reasonably communicated to the parties (a minimal standard); (2) the clause
was obtained through “fraud or overreaching;” or (3) “enforcement would
be unreasonable and unjust.” D.H. Blair & Co. v. Gottdiener, 462 F.3d 95,
103 (2d Cir. 2006).
If the claim is against a party who did not sign the contract, or if the
claim does not fall within its scope — what if the claim has nothing to do
with the contract — then ordinarily it will not be covered by the clause. As
you can imagine, there is a lot of litigation over what is “close enough” and
when someone not a party to a contract can, nonetheless, be covered by it.

2. For Corporate Defendants, is the Suit Filed in a

State Where a State Statute Required the
Corporation
to Consent to be Sued Over Any Claim?
This form of consent only applies to corporations. There are two
potential ways that a state statute may require that corporations consent to
be sued in the state. One is if the corporation is incorporated in the state
where the suit is filed, and the other is if the corporation is registered to do
business in the state.
If a suit is filed in a state where a corporation is incorporated, the same
statute that allows for incorporation almost invariably provides that the
corporation agrees that it is subject to be sued in the state by serving
process on the state's Secretary of State, or an agent the corporation
registers to receive process. Further, as discussed more fully below, the law
has long been that a corporation is subject to “general personal jurisdiction”
in any state where it is incorporated. Thus, even without a state statute
expressly stating that incorporation in a state constitutes consent to be sued
in the state, a corporation can be sued in the state for anything. See Bank of
Augusta v. Earle, 38 U.S. (13 Pet.) 519 (1839) (reasoning that a corporation
dwells “in the place of its creation” and so probably are subject to general
jurisdiction in the state of incorporation even without a state statute so
stating).
As to the second form, many state statutes require corporations that
choose to do business in the state to register with the state Secretary of State
and provide that by doing so, the corporation agrees to be sued in the state
over any claim — even one having nothing to do with the business done by
the corporation. The Supreme Court has stated that doing so pursuant to a
state registration statute constitutes consent to personal jurisdiction. See,
e.g., Pa. Fire Ins. Co. of Phila. v. Gold Issue Mining & Milling Co., 243
U.S. 93, 95 (1917) (corporation consented to personal jurisdiction in
Missouri by appointing an agent for service as required by a Missouri
statute). That Court emphasized it had “little doubt” that a foreign
corporation's appointment of an agent for service of process consented to
personal jurisdiction. A few years later, in Robert Mitchell Furniture Co. v.
Selden Breck Const. Co., 257 U.S. 213 (1921), the Supreme Court then
made clear that a registration statute can support personal jurisdiction, so
long as it is broad enough to reach the claim. See also Neirbo Co. v.
Bethlehem Shipbuilding Corp., 308 U.S. 165 (1939) (defendant corporation
waived its right to contest venue in federal court in New York, by
complying with a New York State statute that required it to designate an
agent for service of process).
Circuit courts have confirmed this view. Bane v. Netlink, Inc., 925 F.2d
637, 640 (3d Cir.1991) (“[b]y registering to do business in Pennsylvania,
[the defendant] purposefully avail[ed] itself of the privilege of conducting
activities within the forum State, this invoking the benefits and protections
of its laws.”); Knowlton v. Allied Van Lines Inc., 900 F.2d 1196, 1199–1200
(8th Cir.1990) (appointment of an agent for service of process conferred
“consent to the jurisdiction of Minnesota courts for any cause of action,
whether or not arising out of activities within the state.”); Holloway v.
Wright & Morrissey, Inc., 739 F.2d 695, 697 (1st Cir. 1984). (It is “well-
settled that a corporation that authorizes an agent to receive service of
process in compliance with the requirements of a state statute, consents to
the exercise of personal jurisdiction in any action” within the scope of the
agent's authority.)
But it is critical to read the registration statute. If it does not state that
consent to be sued over anything, then to avoid a constitutional problem,
the statute may be read narrowly. See Brown v. Lockheed Martin Corp., 814
F.3d 619 (2d Cir. 2016) (“although the Connecticut registration statute does
not expressly limit the matters as to which an authorized agent may accept
service of process, neither does it contain express language alerting the
potential registrant that by complying with the statute and appointing an
agent it would be agreeing to submit to the general jurisdiction of the state
courts”).
Despite this long-standing view, after the recent decision in Daimler AG
v. Bauman, 134 S.Ct. 746 (2014) (discussed below) some corporate
defendants are contending these consent-by-registration statutes are
unconstitutional. The courts are splitting on whether a registration statute
that provides that registering to do business constitutes consent to be sued
in a state over any claim violates due process. As one court recently
explained:
Following Daimler, courts in our Circuit have reached different
outcomes in deciding whether “jurisdiction by consent” contradicts the
due process concerns of fair play and substantial justice raised in
Daimler. Applying Delaware law, the District of Delaware held
Daimler “was limited to the conclusion that continuous and systematic
contacts, by themselves, were not enough to establish general personal
jurisdiction” and “offered no guidance on acceptable criteria for
jurisdiction by consent.” As a result, the court . . . held a party
consents to personal jurisdiction in Delaware “as a result of its
compliance with Delaware's business regulation statute.” In Otsuka
Pharm. Co. v. Mylan Inc., the district court held “it cannot be
genuinely disputed that consent, whether by registration or otherwise,
 remains a valid basis for personal jurisdiction following International
Shoe and Daimler.”
Bors v. Johnson & Johnson, 2015 WL 517816 (E.D. Pa. Sept. 20, 2016). A
court of appeals recently explained:
In Daimler, the Court criticized as “unacceptably grasping”
plaintiffs' request that it “approve the exercise of general jurisdiction in
every State in which a corporation engages in a substantial,
continuous, and systematic course of business.” It explained, “If
Daimler's California activities sufficed to allow adjudication of this . . .
case in California, the same global reach would presumably be
available in every other State in which [the subsidiary's] sales are
sizable.” The Court rejected such an “exorbitant exercise[ ] of all-
purpose jurisdiction.”
Brown's interpretation of Connecticut's registration statute is
expansive. It proposes that we infer from an ambiguous statute and the
mere appointment of an agent for service of process a corporation's
consent to general jurisdiction, creating precisely the result that the
Court so roundly rejected in Daimler. It appears that every state in the
union — and the District of Columbia, as well — has enacted a
business registration statute. States have long endeavored to protect
their citizens and levy taxes, among other goals, through this
mechanism. If mere registration and the accompanying appointment of
an in-state agent — without an express consent to general jurisdiction
— nonetheless sufficed to confer general jurisdiction by implicit
consent, every corporation would be subject to general jurisdiction in
every state in which it registered, and Daimler's ruling would be
robbed of meaning by a back-door thief.
In Daimler, the Court rejected the idea that a corporation was
subject to general jurisdiction in every state in which it conducted
substantial business. Brown's interpretation of the Connecticut statute
could justify the exercise of general jurisdiction over a corporation in a
state in which the corporation had done no business at all, so long as it
had registered.
Were the Connecticut statute drafted such that it could be fairly
construed as requiring foreign corporations to consent to general
jurisdiction, we would be confronted with a more difficult
constitutional question about the validity of such consent after
 Daimler. Though a defendant may ordinarily, through free and
voluntary consent given (for example) in a commercial agreement,
submit to jurisdiction a court would otherwise be unable to exercise,
we decline to decide here whether consent to general jurisdiction via a
registration statute would be similarly effective notwithstanding
Daimler's strong admonition against the expansive exercise of general
jurisdiction. . . . [S]ome of our sister circuits have upheld states'
determinations that in their respective states, registration to do
business constitutes consent to the exercise of general jurisdiction, and
that due process requires no more: That is, personal jurisdiction by
consent of a corporate defendant is consistent with due process.
Similarly, in an approach emphasizing the amenability to waiver of
personal jurisdiction as an individual right, applicable to a defendant
corporation without regard to the due process analysis, the Supreme
Court has upheld the assertion of personal jurisdiction as a sanction for
failure to comply with jurisdictional discovery, holding such failures
“may amount to a legal submission to the jurisdiction of the court,
whether voluntary or not.” Bauxites, 456 U.S. at 704–05. From these
sources, it could be concluded that a carefully drawn state statute that
expressly required consent to general jurisdiction as a condition on a
foreign corporation's doing business in the state, at least in cases
brought by state residents, might well be constitutional.
But as the Supreme Court recognized in Goodyear, “A state court's
assertion of jurisdiction exposes defendants to the State's coercive
power, and is therefore subject to review for compatibility with the
Fourteenth Amendment's Due Process Clause.” The reach of that
coercive power, even when exercised pursuant to a corporation's
purported “consent,” may be limited by the Due Process clause. We
need not reach that question here, however, because we conclude that
the Connecticut business registration statute did not require Lockheed
to consent to general jurisdiction in exchange for the right to do
business in the state.
Brown v. Lockheed Martin Corp., 814 F.3d 619 (2d Cir. 2016) (citations
omitted). This is an issue that your professor will likely analyze in detail,
and so the long quote.

3. Operating a Motor Vehicle Consent Statutes

 Many states have statutes that provide that, stated very generally, a
nonresident person who operates a car in the state consents to personal
jurisdiction over claims arising out of the operation of the car. They do this
by stating that the nonresident appoints a state agency, such as the Secretary
of State, to accept service of process on the nonresident. Here is an example
of one:
Any [such] nonresident individual . . . over whom a court may exercise
personal jurisdiction [because the nonresident caused harm in the state
while in the state], shall be deemed to have appointed the Secretary of
the State as its attorney and to have agreed that any process in any civil
action brought against the nonresident individual . . . may be served
upon the Secretary of the State and shall have the same validity as if
served upon the nonresident . . . personally. The process shall be
served by the officer to whom the same is directed upon the Secretary
of the State by leaving with or at the office of the Secretary of the
State, at least twelve days before the return day of such process, a true
and attested copy thereof and by sending to the defendant at the
defendant's last-known address, by registered or certified mail, postage
prepaid, return receipt requested, a like true and attested copy with an
endorsement thereon of the service upon the Secretary of the State.
Conn. Gen. Stat. § 52-63. Here is a statute which applies if the owner of the
car has registered it in the state, but then left the state after the accident but
before suit is filed:
Any operator or owner of a motor vehicle at the time of issuance of his
license or registration shall be deemed to have appointed the
Commissioner of Motor Vehicles as his attorney and to have agreed
that any process in any civil action against him on account of any
claim for damages resulting from his alleged negligence or the alleged
negligence of his servant or agent in the operation of any motor
vehicle in this state may be served upon the commissioner as provided
in this section and shall have the same validity as if served upon the
owner or operator personally, even though the person sought to be
served has left the state prior to commencement of the action or his
present whereabouts is unknown.
Conn. Gen. Stat. § 52-59b.
These statutes will provide personal jurisdiction for claims within their
scope. They have been long-held constitutional. See, e.g., Hess v. Pawloski,
274 U.S. 352 (1927) (holding that a state could constitutionally adopt a
statute which provided that a non-resident consented to personal
jurisdiction over accident occurring while driving in the state).

C. Without Consent: The Three Steps

to Evaluate In Personam Jurisdiction
1. A Long-Arm Statute Must Authorize Service
of Process
“Service of a summons is a means of establishing a court's jurisdiction
over a defendant.” Cory v. Aztec Steel Building, Inc., 468 F.3d 1226, 1229
(10th Cir. 2006). Consequently, Rule 4(k) is the starting place for analyzing
personal jurisdiction. That Rule limits effective service of a summons,
which must be served along with a copy of the complaint on the defendant.
FRCP 4(c).
In addition to two circumstances which relate to specific joinder rules
(and so are discussed in connection with joinder), Rule 4(k) provides that if
a defendant is served with a summons or files a waiver of service of the
summons, the court is authorized to serve process if: (1) the defendant is
subject to personal jurisdiction of a state court; (2) service is authorized by
a federal statute; or (3) in those cases where the defendant is not subject to
personal jurisdiction in any state (e.g., when the defendant is a foreign
entity or citizen), where the claim is federal and the defendant has
minimum contacts with the United States as a whole.
The first two provisions are the more common ones litigated. This chart
summarize those two common prongs of Rule 4(k):

That chart shows that if the claim arises under federal law, then there are
two possible sources of authority to serve process: to the extent a state court
is authorized to do so by a state statute statute, or as allowed by federal
statute. In contrast, a state statute must authorize service of process over
state claims. Since the state long-arm statute is common to both state and
federal claims, we'll begin with it. Remember that a federal court has
authority to serve process over a defendant under the state's long-arm
statute for a federal claim. Federal statutes authorizing service of process
over federal claims are fairly rare, as we'll see.

a. State Long-Arm Statutes Apply to Both State

and Federal Claims
Rule 4(k)(1)(A) authorizes a federal court to serve process for a state or
federal claim as would a state court in that state. Most states have adopted
so-called “long-arm” statutes — which authorize the “long arm” of their
courts to reach out and assert power over out-of-state defendants. A federal
court in the state can do the same thing, to the same extent as a state court
in the same state.
No state statute can authorize service beyond the limits of the Due
Process Clause of the Constitution. (We'll look at due process later.) So, a
state long-arm statute can't — constitutionally — go “further” than due
process would allow. But, nothing requires a state to have a long arm statute
that goes to the limit of due process; its statute can be “shorter,” in that a
defendant will have to have “more” connections with a state than the
constitution requires.
So, long-arm statutes come in two general types: those that are co-
extensive with, and so have precisely the same reach as, the Due Process
Clause, and those which have a shorter reach. (The “length” of a particular
state long-arm statute is a question of state law, while the question of
whether assertion of personal jurisdiction violates Due Process is a matter
of federal law, as we'll see.) Perhaps surprisingly, many state long-arm
statutes do not go to the limits of Due Process. Thus, one way to visualize
state statutes and the Due Process Clause is as follows:
 You should determine the reach of the state long-arm statute and
determine whether it requires more contacts than does the Due Process
Clause before examining whether asserting personal jurisdiction comports
with Due Process: if the state long-arm statute doesn't reach to the limits of
Due Process (like the bottom one in the chart above) and under the facts
service on the defendant is not authorized by the state long-arm statute, then
as a matter of state law there simply is no statute that authorizes service of
process, and so no personal jurisdiction. A court would not have to reach
the constitutional question of whether asserting personal jurisdiction would
comply with Due Process. See Gust v. Flint, 356 S.E.2d 513 (Ga. 1987)
(holding Georgia's long-arm statute “requires that an out-of-state defendant
must do certain acts within the State of Georgia before he can be subjected
to personal jurisdiction”).
In those states where the statute does not reach the limits of Due Process,
service must meet the state statutory requirements and assertion of personal
jurisdiction must comport with Due Process. You must do both analyses,
since it's possible for assertion of jurisdiction over a claim to comply with
Due Process, but service not to be authorized by the state long-arm statute
because that statute is shorter than the Due Process Clause. For example,
New York's long-arm statute does not extend to the limits of Due Process.
Pieczenik v. Dyax Corp., 265 F.3d 1329 (Fed. Cir. 2001). If the state statute
does not extend to the limits of Due Process and service is not authorized
by the statute, then the defendant cannot be forced to defend itself in the
state.
It is also possible for a long-arm statute to reach a defendant, but for
assertion of personal jurisdiction to violate the Due Process Clause. For
example, some state long-arm statutes literally reach any claim over any
defendant “engaged in business” in the state. But, as will be seen, it would
likely violate Due Process to assert personal jurisdiction over a claim that
has nothing to do with that business, among other things. So, always
analyze both the long-arm statute and then, if the conduct is within the
long-arm, the Due Process issues.
Statutes that do not extend to the limits of Due Process create interesting
interpretive issues. For example, some of these statutes provide that
jurisdiction exists if the defendant or its agent “committed a tortious act” in
the forum. Courts have reached different interpretations of those words.
Compare Gray v. Am. Radiator & Standard Sanitary Corp., 176 N.E.2d 761
(Ill. 1961) (defendant that had manufactured in another state a product that
exploded in Illinois committed a “tortious act” in Illinois) with Feathers v.
McLucas, 209 N.E.2d 68 (N.Y. 1965) (product exploding while on way
through the state was not a tort in the state).
Some long-arm statutes go to the limits of, or are “co-terminus” with,
Due Process. Thsee come in two types. Some statutes expressly state that
they reach to the limits of the Due Process Clause. E.g., Cal. Code Civ Pro.
§ 410.10 (“A court of this state may exercise jurisdiction on any basis not
inconsistent with the Constitution of . . . the United States.”). Other long
arm statute are not worded so plainly, but have been interpreted by state
courts to authorize service to the full extent allowed by the Due Process
Clause. E.g., Wilson v. Belin, 20 F.3d 644, 648 (5th Cir. 1994) (Recognizing
that, even though it does not expressly say so, Texas courts hold that Texas'
long-arm statute “authorizes the exercise of personal jurisdiction to the full
extent allowed by the Due Process Clause of the Fourteenth Amendment”).
In states with statutes that go to the limits of due process, the personal
jurisdiction analysis collapses into the single inquiry of whether asserting
personal jurisdiction comports with Due Process. By definition, if due
process is satisfied, so is the long-arm statute.
Finally, recognize that there is a third type of long-arm statute: one
which, when literally applied, allows the court to assert personal
jurisdiction over the defendant for the claim, but doing so would violate the
due process rights of the defendant. Particularly with this type of statute it is
important to always analyze both the statute and due process. This is
because even if the defendant is within reach of the state's long-arm statute,
you must still address the question of whether assertion of personal
jurisdiction violates the defendant's Due Process rights, discussed below.
To sum up, for every claim (state or federal), a federal district court is
authorized by Rule 4(k) to serve process as allowed by the long-arm statute
of the state where that federal court sits. To determine whether service is
authorized, the reach of the state long-arm statute first must be determined.
If the state long-arm statute does not reach to the limits of due process, then
the statute must authorize service under the particular facts and assertion of
personal jurisdiction must comport with due process. If the statute does
reach to the limits of due process, then the only question is whether
asserting personal jurisdiction meets the requirements of the Due Process
Clause.

b. Specific Federal Long-arm Statutes

Govern Some, but few, Federal Claims
When Congress enacts a statute creating a federal claim, it sometimes —
but not often — includes provisions regulating the procedure for
adjudicating the new statutory claim, including sometimes providing a
specific long-arm statute regulating service of process (and, sometimes, a
statute of limitation for the specific claim, and less frequently, even
pleading requirements, and other things). For example, when Congress
enacted the federal securities statutes, it included a specific statute
regulating service of process. The same is true with the antitrust laws and a
few other federal claims.
So, it may be that a specific, federal long-arm statute applies to a federal
claim. The reach of these federal long-arm statutes varies. Often these
statutes have particular requirements that must be analyzed and applied to
the facts. See ESAB Group, Inc. v. Centricut, Inc., 126 F.3d 617 (4th Cir.
1997) (“Even for federal claims, the effective territorial authority of the
federal court may differ significantly from case to case, depending on the
federal statute involved.”). Most common, though, are federal long-arm
statutes that authorize “nationwide” service of process for the particular
claim. See Cory v. Aztec Steel Building, Inc., 468 F.3d 1226 (10th Cir. 2006)
(discussing RICO's provision, 18 U.S.C. § 1965).
A particular federal long-arm statute for a specific claim may “go
further” than the otherwise applicable state long-arm statute does. Many
federal long-arm statutes authorize “nationwide service of process.” If so,
the a defendant may be sued in any state in the United States if the
defendant has minimum contacts with the United States as a whole such
that assertion of personal jurisdiction does not violate the Due Process
Clause of the Fifth Amendment. See ESAB Group, Inc. v. Centricut, Inc.,
126 F.3d 617 (4th Cir. 1997). Thus, if a federal statute authorizes
nationwide service of process over a particular federal claim, the question
becomes one of minimum contacts with the United States, not with the
forum state, a subject we'll get to below.
Let's talk about related state law claims for a minute. If there is a federal
long-arm statute that authorizes nationwide service, then the doctrine of
“pendent personal jurisdiction” may be available to allow a court having
personal jurisdiction over the federal claim to also have personal
jurisdiction over a related state law claim. Suppose, as is common, a
plaintiff includes a related state claim in a complaint along with a federal
claim for which Congress has authorized nationwide service of process.
Congress empowered federal courts to have personal jurisdiction over the
federal claim if the defendant had minimum contacts with the United States
as a whole, but that power does not expressly give that power over any state
law claims. If a state law claim could not “tag along” with the federal claim,
then we'd end up with two suits perhaps in different states. If the state law
claim is related to the federal claim, we'd end up with two suits in different
states — and maybe one in federal court, the other in state court, in
different states — even though the two lawsuits arose out of the same basic
set of facts. Pendent personal jurisdiction allows a related state law claims
to “tag along” with a federal claim that has a “nationwide service of
process.” See Chapter 22.

2. If a Claim is Within the Reach of the State's

Long-Arm Statute, Assertion of In Personam
Jurisdiction Must Still Not Violate the
Defendant's Due Process Rights
Even if a claim is within a state's long-arm statute, assertion of personal
jurisdiction could still violate the Due Process rights of the defendant. The
Due Process Clause protects “an individual's liberty interest in not being
subject to the binding judgments of a forum with which he has established
no meaningful contacts, ties, or relations.” OMI Holdings, Inc. v. Royal Ins.
Co. of Canada, 149 F.3d 1086, 1090 (10th Cir. 1998).
This section next explores how to determine whether assertion of
personal jurisdiction over a defendant violates due process. It is organized
from the “easier” ways to identify that Due Process has been satisfied to the
more difficult ones. Some of the easier ways are not intuitive!

a. Did the Defendant, Individual or Corporate,

“Consent”
to Personal Jurisdiction, Either by Operation
of Law or by Contract?
As explained above, a person or corporation can consent to be sued in a
particular state, sometimes by operation of law and sometimes by
agreement. Some of these apply only to corporations, and some only to
natural people, however. They are discussed above but this is a reminder to
check for consent first.

b. Was the Individual Defendant “Tagged” with

Process While Present in the Forum State After
the Suit was Filed?
Most state long arm statutes provide that personal jurisdiction is proper if
a person (not a corporation) is served with process after the suit is filed and
while the defendant is physically present in the state. In Burnham v.
Superior Court, 495 U.S. 604 (1990), the Court, based on divided
rationales, held that because courts have traditionally held that they have
personal jurisdiction over non-residents who are physically present in a
state, a plaintiff who serves process on a defendant who is passing through
a state satisfies due process. Physical presence in the state is sufficient to
establish personal jurisdiction, and it does not violate “fair play and
substantial justice” to serve a defendant who happens to be visiting the state
on unrelated matters. The Court split on why this was so, but agreed that it
was and has long been the case. See Peabody v. Hamilton, 106 Mass. 217
(1870) (service effective on defendant who had been served while passing
through Boston Harbor on a ship bound for Nova Scotia from New York);
Grace v. McArthur, 170 F. Supp. 442 (E.D. Ark. 1959) (defendant served
while seated in a plane flying over Arkansas airspace).
Thus, a long arm statute that authorizes service on a person who is named
as a defendant while physically present in that state is constitutional. And in
such a state, personal jurisdiction exists if a person who is a defendant is
served with process in a suit arising out of a dispute having nothing to do
with Florida while the defendant is actually in Florida. So long as a statute
authorizes a “tag you're a defendant” service, it presents no constitutional
issues. There are some limits. A plaintiff could render “tag” invalid — what
if the plaintiff lured the defendant to the state through deceit — but absent
those facts, “tag” if authorized by the long-arm statute creates personal
jurisdiction.

c. Due Process Requires Either Specific or

General Personal Jurisdiction Exist
There are two very different approaches to determine whether personal
jurisdiction exists. The one you should look for first is “general personal
jurisdiction.” See Goodyear Dunlop Tires Operations, S.A. v. Brown, 1331
S.Ct. 2856 (2011). If general personal jurisdiction exists, then the claim
does not have to have anything to do with the forum state. If there is no
general personal jurisdiction, then the more difficult steps of “specific
personal jurisdiction” have to be addressed. See Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 472 (1985).
That difference between specific and general jurisdiction is worth
emphasizing. Specific jurisdiction requires that the claim be related to the
claim. For general jurisdiction, the contacts need not have anything to do
with the contacts. Recent cases made is much harder to establish general
personal jurisdiction over corporations, but they made the analysis much
simpler.

i. General Personal Jurisdiction

General personal jurisdiction exists only when the defendant has
pervasive contacts with the forum sufficient for it to be “at home” in the
forum. Luckily, this has become much easier with recent case law
developments.
A defendant is a natural person is subject to general personal jurisdiction
only in the person's state of domicile. Domicile is determined the same way
for personal jurisdiction as it is for determining a person's domicile for
purposes of diversity subject matter jurisdiction: it is a person's physical
presence coupled with the state of mind to remain for an indeterminate
period of time. This issue is discussed in the chapter on diversity subject
matter jurisdiction. And again, as noted above, if a person is “tagged” in a
state, general personal jurisdiction exists.
Corporations are usually subject to general jurisdiction — a corporation
is “at home” in a state and can be sued in that state for any claim
whatsoever — in four instances:
First, a corporation is subject to general personal jurisdiction in the state
or states where it is incorporated. Most corporations are incorporated only
in one state. Some are incorporated in more than one. Determining which
state(s) in which a corporation is incorporated is a matter of public record,
found on the Internet. Oddly, corporations are deemed to be “at home” in
these states merely by the fact of incorporation. Many corporations are
incorporated in Delaware but have no real connections to that state;
nonetheless, they are “at home” in Delaware and can be sued there over any
claim.
Second, a corporation is “at home” and subject to general personal
jurisdiction in the state where it has its principal place of business. How do
you determine a corporation's principal place of business? We don't know.
The majority decisions in Daimler and Goodyear used a proportionality of
business test: the majority compared how much business the defendant
corporation was doing inside of the state without how much it was doing
outside of the state. Clearly, if a majority of a corporation's business is in
one state, then that state is its principal place of business. Left unclear is
what courts will do when a plurality of business is done in one state, or its
business is equally split among many states. The dissent in Daimler
asserted that the Hertz test for principal place of business, which is used for
determining a corporation's citizenship for diversity purposes, applies. If
that view ends up winning, then the test will be somewhat easier to apply.
The significance of the change in the law that Daimler wrought is hard to
overstate. It significantly limited the circumstances in which a court can
assert general jurisdiction over a foreign corporate defendant. Before
Daimler, courts routinely asserted general personal jurisdiction over foreign
corporations if they engaged in a substantial, continuous, and systematic
course of business in the forum state. Now, even doing systematic and
continuous business in a forum is not enough. It's important you understand
this because some cases still use the “old” rule. Under the “old” rule, a
corporation was subject to general personal jurisdiction anywhere where its
contacts were sufficiently “continuous and systematic” to be reasonable to
be sued there. Thus, there are a lot of cases where — if they were to be filed
today — no one would even allege general personal jurisdiction exists. See,
e.g., Helicopteros, 466 U.S. at 416 (regularly purchasing equipment and
training services from the forum, accepting checks drawn on banks from the
forum, and sending personnel and officers to the forum to negotiate
contracts, insufficient); Noonan v. Winston Co., 135 F.3d 85, 92–93 (1st
Cir.1998) (soliciting business in forum, and visiting it to negotiate orders
and establish business relationships); Glater v. Eli Lilly & Co., 744 F.2d
213, 217 (1st Cir. 1984) (advertising in the forum, employing sales
representatives to distribute information in the forum, and selling products
to distributors in the forum); In re New Motor Vehicles Canadian Export
Antitrust Litig., 307 F. Supp. 2d 145, 151 (D. Me. 2004) (using an
advertising service based in forum, sending officers to attend meetings and
train in the forum, purchasing equipment from the forum, manufacturing
and selling products that ultimately end up in the market of the forum, and
being party to lawsuits in the forum).
Perhaps proving the impact of these cases, if you read Daimler and
Goodyear closely, you'll notice that the lawyers for the one of the
defendants — the parent corporation in each case — did not contest
personal jurisdiction. This is because under the “old” law, systematic and
continuous contacts were “enough” for general personal jurisdiction.
Daimler sold a lot of cars in California, and Goodyear shipped a lot of tires
into North Carolina. That is no longer enough. But that was not the law
before then.
There is one twist to keep in mind. “Principal place of business” doesn't
mean “a lot of business.” The Supreme Court found general jurisdiction in
Perkins v. Benguet Consol. Mining Co., 342 U.S. 437 (1952), where a
company operated its office, had bank accounts, held shareholder meetings,
and engaged in other business in Ohio, even though the claim concerned
activities in the Philippines. In fact, the company was barely operating since
its facilities had been taken over by the Japanese. Nonetheless, the court
characterized these as “continuous and systematic corporate activities” and
found general jurisdiction proper. Thus, even though the corporation was
barely doing anything, everything it was doing it was doing it was doing in
Ohio. Ohio was as a result its principal place of business.
Third, a corporation is subject to general personal jurisdiction some other
state if there are in “exceptional cases.” The Daimler court left open the
possibility that, in addition to the state(s) of incorporation and state of the
corporation's principal place of business, there might be an “exceptional”
instance where general personal jurisdiction would exist. Again, we will
have to wait to see.
If suit is not filed in an individual's domicile, or a corporation's “home”
state(s), then the other means to establish compliance with the Due Process
Clause is specific personal jurisdiction. We turn there now.

ii. Specific Personal Jurisdiction: For State Claims and

Federal
Claims Without Nationwide Service of Process, There Must
be Minimum Contacts Between the Forum State and the
Defendant; For Federal Claims with Nationwide Service of
Process, the Defendant Must Have Minimum Contacts with
the United States
Specific jurisdiction exists where the defendant through its acts has
created minimum contacts by purposefully availing himself of the laws of
the forum state — where the claim is filed — and it would not be unfair to
subject it to suit in that forum. Int'l Shoe Co. v. Washington, 326 U.S. 310
(1945), is the modern source of this doctrine. In Shoe, the plaintiff was the
State of Washington. It filed a suit in the state of Washington against the
International Shoe Company, which was a Delaware corporation with its
principal place of business in Missouri. The claim was that the defendant
had employees in the state of Washington but the employee had not paid
certain state employment taxes for them. The defendant contested personal
jurisdiction. The court held that specific personal jurisdiction was proper.
Under International Shoe and subsequent cases, the Due Process Clause
is satisfied when three requirements are met: (a) the defendant has
“minimum contacts” with the forum through the defendant's purposeful
actions; (b) there's a “nexus” between the contacts and the claim (only
contacts “related” to the claim “count”); and (c) assertion of personal
jurisdiction comports with “fair play and substantial justice.” Vague though
they surely are, these requirements are the foundations of in personam
jurisdiction. We now turn to them.

(a) Purposeful Availment or Direction

by the Defendant Toward the Forum
Perhaps a majority of the courts hold that specific jurisdiction can arise
from either (1) a showing that the non-resident defendant “purposefully
availed” himself or the forum's laws by conducting activities in the forum
or (2) from an act outside of the forum which was “purposefully directed”
at forum residents while they are in the forum. Pebble Beach Co. v. Caddy,
453 F.3d 1151, 1155 (9th Cir. 2006). Other courts lump the two together,
usually under the “purposeful availment” rubric.
Before we get into the details, make sure you have a firm grasp on this
fact: physical presence in the forum that led to the claim isn't required,
though it obviously “counts.” The question isn't only whether the defendant
was “in” the forum but instead whether it had “contacts” “with” the forum.
It's possible to have specific jurisdiction over a defendant who has never
physically visited a forum.
An example may help. Suppose you stay in your home state but through
telephone calls and other communications make an agreement with a
Nevada resident to perform several months of work later in Nevada. But,
you decide to breach that contract. Does it sound like it would be unfair for
the Nevada resident to sue you in Nevada? That's a simple example of both
purposeful availment and purposeful direction and a defendant who never
set foot in the forum state.
But even with contractual obligations, there is no bright line rule. While
it is true that a party who reaches out to another state to create “‘continuing
relationships and obligations with citizens of another state' are subject to
regulation and sanctions in the other State for the consequences of their
activities,’” it is also clear that “an individual's contract with an out-of-state
party” cannot by itself “automatically establish sufficient minimum contacts
in the other party's home forum. . . .” Burger King, 471 U.S. at 473 (quoting
Travelers Health Ass'n v. Va., 339 U.S. 643, 647 (1950)).
A recent case on specific jurisdiction emphasizes that it is not the
knowledge of the defendant that he is interacting with residents of the
forum state that matters. It is the defendant's contacts with the forum state.
The fact that the plaintiff is connected to the forum state is not enough, and
it is still not enough if the defendant knows the plaintiff is headed to the
forum state. This is the teaching of the recent case of Walden v. Fiore, 134
S.Ct. 1115 (2014), a unanimous case. There, plaintiffs were traveling from
Puerto Rico to Nevada by way of Atlanta. The defendant was a TSA agent
at Atlanta's Hartsfield International Airport. A guard at the Puerto Rico had
alerted the TSA agent that the plaintiffs had almost $100,000 in cash with
them. The TSA agent stopped the plaintiffs, and confiscated the money,
even though the plaintiffs claimed the money had been gambling winnings
and they were professional gamblers. The defendant knew the plaintiffs
were headed home to Nevada. He also allegedly drafted a false affidavit
after the plaintiffs were back in Nevada in order to justify seizing the
money.
The plaintiffs eventually got their money back, and they also sued the
TSA agent in Nevada. The Supreme Court held that specific personal
jurisdiction was lacking, even as to the claim arising out of the falsified
affidavit. The Court emphasized that even with respect to intentional torts,
the forum state's exercise of personal jurisdiction “must be based on
intentional conduct by the defendant that creates the necessary contacts
with the forum.”
The Court relied on an earlier case (discussed more fully below), Calder
v. Jones, stating that “In Calder, a California actress brought a libel suit in
California state court against a reporter and an editor, both of whom worked
for the National Enquirer at its headquarters in Florida.” The plaintiff's
claims were related to an allegedly libelous article published in a magazine
circulated to 600,000 Californians. The Court emphasized that the
defendants in writing the article had “relied on phone calls to ‘California
sources’” for information; “caused reputational injury in California”; and
the plaintiff suffered the “brunt” of her injury in California.
But the Court held the Walden facts were different. The Court held that
Nevada could not exercise personal jurisdiction over Walden, the TSA
agent, based on his conduct in Georgia, since he had “approached,
questioned, and searched [plaintiffs], and seized the cash at issue, in the
Atlanta airport.” Walden “never traveled to, conducted activities within,
contacted anyone in, or sent anything or anyone to Nevada.” Thus, “when
viewed through the proper lens — whether the defendant's actions connect
him to the forum — [Walden] formed no jurisdictionally relevant contacts
with Nevada.” The affidavit itself had never made its way to Nevada, let
alone done so by the agent's deliberative acts.
It is also important to distinguish acts of the plaintiff: courts will
sometimes call these “unilateral acts” and disregard them. For example, in
Hanson v. Denckla, 357 U.S. 235 (1958), the plaintiff set up a trust in
Delaware with a Delaware bank. Later, the plaintiff moved to Florida. The
Court found specific jurisdiction lacking over a claim brought in Florida
related to the trust agreement, stating that the “unilateral activity of those
who claim some relationship with a non-resident defendant cannot satisfy
the requirement of contact with the forum State.” Id. The fact that the
plaintiff moved to Florida did not mean the defendant had minimum
contacts with Florida when the events underlying the suit occurred in
Delaware while she lived in Delaware.
This concept becomes important in several areas, including products
liability claims: is it an act of the defendant if it puts products into the
“stream of commerce” knowing that its products will be purchased in or at
least be taken to virtually every state? We'll turn back to that question
below.
Finally, in part because of the requirement that the claim relate to the
contact with specific personal jurisdiction, that analysis can be heavily
influenced by the nature of the claim. For example, if someone intentionally
travels to Texas to punch someone, chances are personal jurisdiction will
exist over a battery claim with just that one connection between the
defendant and Texas. If a person makes a product in California, and one
happens to wind its way through commerce and negligently injures
someone in Texas, probably not. The elements and nature of the claim
matters, too. The Supreme Court has stated that the analysis is the same
regardless of the claim. While that is true, it is helpful to focus on the claim
over which personal jurisdiction is sought to see how the courts have
analyzed minimum contacts for each claim, because only the contacts with
a “nexus” to the claim “count” for specific personal jurisdiction.
Breach of Contract Claims. The Supreme Court found specific
jurisdiction in McGee v. Int'l Life Ins. Co., 355 U.S. 20 (1957). There, the
Court held that California courts had personal jurisdiction over a defendant
insurer who had issued life insurance policy to California resident over
claim for breach of the insurance policy, even though the insurer had never
solicited a single policy in California besides this one. There, the insurer
had been sued in the California state courts, but had not defended, resulting
in a default judgment in favor of the insured. When the insured sought to
enforce the judgment in Texas, the insurer argued that the California court
had lacked personal jurisdiction over it, and so the judgment could not be
enforced. The court found specific jurisdiction over the claim for breach of
the insurance policy sold to the California resident, and paid for by it while
it was in California, to have been proper.
 Just a short time later, however, the Court reached the opposite result in
Hanson v. Denckla, 357 U.S. 235 (1958). There, even though a defendant
Delaware trust company had mailed income payments to a Florida resident
and had received instructions from a Florida resident on how to implement
the trust, the Court found specific jurisdiction lacking over a claim for
breach of the trust company's obligations to the trust. The reason? Probably
the fact that the Florida residents had, after the contract between them was
formed, moved from Delaware to Florida. “The unilateral activity of those
who claim some relationship with a non-resident defendant cannot satisfy
the requirement of contact with the forum State.” Id.
In Kulko v. Superior Court, 436 U.S. 84 (1978), Ezra and Sharon Kulko
lived in New York with their two children. However, they separated and
Sharon moved to California. Under the separation agreement they executed
in New York, Ezra agreed to pay child support to Sharon in California or
anywhere else she designated, and the children were to live in New York
during the school year, but stay with Sharon in California over the
summers. Their daughter soon wanted to spend the school year in
California, and her father agreed and bought her a one-way ticket to
California. Their son, with the mother's surreptitious help, also later moved
to California. Sharon, then sued Ezra in California, seeking sole custody of
their children and an increase in child support. Ezra moved to dismiss for
lack of personal jurisdiction, but the California courts held that by allowing
the daughter to move to California, he had subjected himself to personal
jurisdiction in California over the contract action. The Supreme Court
disagreed, rejecting the notion that simply because he obtained an economic
benefit from the children being in California — it was less expensive for
them to live there — was not enough. The court emphasized that the claim
did not arise out of commercial transactions, but from personal domestic
relations and that the contract had been negotiated and executed in New
York.
Finally, in Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985), the
Supreme Court held specific jurisdiction proper where the defendant
reached out from its home state to negotiate with a Florida resident, Burger
King, to negotiate the purchase of a long-term franchise, but emphasizing
that it was because the parties entered into “a 20-year relationship that
envisioned continuing and wide-reaching contacts with Burger King in
Florida” and so the contacts were neither “fortuitous,” “random,” or
“attenuated.” Burger King, 474 U.S. at 479–80. In addition, the court noted
that the agreements stated that Florida law would govern. Id
In sum, courts adopt a “‘highly realistic’ approach that recognizes that a
‘contract’ is ‘ordinarily but an intermediate step serving to tie up prior
business negotiations with future consequences which themselves are the
real object of the business transaction.’” Burger King, 474 U.S. at 479
(quoting Hoopeston Canning Co. v. Cullen, 318 U.S. 313, 316 (1943)).
Thus, purposeful availment does not simply turn on the existence of a
contract with a forum resident, it turns on “prior negotiations and
contemplated future consequences, along with the terms of the contract and
the parties actual course of dealing.” Id. Those facts determine whether the
defendant purposefully established minimum contacts with the forum.
Intentional Tort Claims. An act that occurs outside the forum that is
“purposefully directed” or “aimed” at the plaintiff in the forum can support
personal jurisdiction if it is both aimed at and has effect in that forum. This
is often called the “Calder effects test,” after Calder v. Jones, 465 U.S. 783
(1984), which involved the intentional tort of defamation. In Calder,
National Enquirer employees in Florida wrote an article about a California
Entertainer, Shirley Jones. Jones sued the Enquirer in California. Even
through the article had been written in Florida and defendants had few
contacts with California, the Court held personal jurisdiction existed
because the article was not “mere untargeted negligence” but was
intentionally aimed at a California resident, drawn from California sources,
and caused professional and reputational harm in California. Other courts
have distilled Calder to require that the defendant “must have (1)
committed an intentional act, which was (2) expressly aimed at the forum
state, and (3) caused harm, the brunt of which is suffered and which the
defendant knows is likely to be suffered in the forum state.” Bancroft &
Masters, Inc. v. Augusta Nat'l, Inc., 223 F.3d 1082, 1087 (9th Cir. 2000).
See ESAB Group, Inc. v. Centricut, Inc., 126 F.3d 617 (4th Cir. 1997)
(applying the Calder effects test to claims for intentional interference with
contract and related intentional tort claims).
The Walden case, discussed above, also involved an intentional act.
Recall that beause the TSA agent had not been to or done acts targeted
toward forum residents, personal jurisdiction did not exist.
Negligence and Strict Liability Claims. Personal jurisdiction issues have
reached the Court twice in products liability cases — where the plaintiff
claims she was injured by a product purchased in her state which the
defendant had sold “into the stream of commerce” in another state, knowing
it might be purchased by a consumer in another state. In first addressing this
issue, the Court in World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286
(1980), held that an Oklahoma court could not exercise personal
jurisdiction over a non-resident automobile retailer and wholesale
distributor whose only connection with Oklahoma was the fact that they
had sold a car in New York to a New York resident that later was involved
in an accident in Oklahoma. The Court explained that even if it was
foreseeable that a car sold in New York could cause injury in Oklahoma,
that was an insufficient connection for the defendants to reasonably
anticipate being sued in Oklahoma. Foreseeability that the car would end up
in the State was not enough.
The Court a few years later again faced this question in Asahi Metal
Indus. Co., Ltd. v. Superior Ct. of Ca., 480 U.S. 102 (1987), where a
plurality of the Court sought to clarify World-Wide Volkswagen. In Asahi, a
Japanese company made a valve that was then incorporated into a tire by a
Taiwanese tire manufacturer. That tire then was installed on a Honda
motorcycle that was sold to a California consumer. After an accident in
California, the consumer filed a products liability suit naming both Honda
and the Taiwanese tire manufacturer as defendants. The tire manufacturer,
contending that the valve was the cause of the accident and so the valve
manufacturer owed an obligation of indemnity to it, impleaded (see Chapter
17) the valve manufacturer. The Supreme Court unanimously held that the
valve manufacturer could not be constitutionally required to defend in
California.
But in doing so, the Justices used three different tests. Four of the eight
participating justices concluded that even had the valve manufacturer
introduced the valves into the stream of commerce with awareness that a
significant portion of them would be sold in California was insufficient to
establish purposeful availment. In a portion of the opinion joined only by
the four, Justice O'Connor wrote:
The placement of a product into the stream of commerce, without
more, is not an act of the defendant purposefully directed toward the
forum State. Additional conduct of the defendant may indicate an
intent or purpose to serve the market in the forum State, for example,
designing the product for the market in the forum State, advertising in
the forum State, establishing channels for providing regular advice to
 customers in the forum State, or marketing the product through a
distributor who has agreed to serve as the sales agent in the forum
State.
Asahi, 480 U.S. at 111. This view has become known as the “narrow view”
of the stream of commerce doctrine.
A concurring opinion by Justice Brennen took a broader view, and one
that has become the second competing view. He wrote: “The stream of
commerce refers not to unpredictable currents or eddies, but to the regular
and anticipated flow of products from manufacture to distribution to retail
sale. . . . A defendant who has placed goods in the stream of commerce
benefits economically from the retail sale of the final product in the forum
State, and indirectly benefits from the State's laws that regulate and
facilitate commercial activity.” 480 U.S. at 117.
The third test would evaluate the volume, value and hazardous nature of
the goods entering the forum state. Id. at 122 (Stevens, J., concurring).
After Asahi, the courts remain split on which of the three approaches
ought to be applied. The only thing that is clear is that putting a single
product into the stream of commerce, without more, will not constitute
purposeful availment. In a 2011 plurality decision, J. McIntyre Mach. Ltd. v.
Nicastro, four justices endorsed the approach of Justice O'Connor. Thus, the
split remains in place.

(b) Relationship Between Claim and Contacts

To have specific jurisdiction, there must not only be “minimum” contacts
between the defendant and the forum, but the claim must “arise out of” or
“relate to” those contacts. So, for example, in Burger King Burger King
properly sued the franchisee in Florida for breach of the franchise
agreement, but personal jurisdiction in Florida would not have been proper
over a claim arising out of conduct unrelated to the contract.
How close must the relationship between the claim and the contacts be?
There are few guides to this beyond the statement that the claim must arise
out of or be related to the contact. See Nowak v. Tak How Investments, Ltd.,
94 F.3d 708 (1st Cir. 1996) (concluding that there are at least three
conceptions of “relatedness”). The requirement of relatedness acts as a filter
as to which contacts “count” for specific jurisdiction: the more closely the
claim must “relate to” the contact, the fewer contacts that will “count” for
personal jurisdiction, and the more difficult it will be to establish minimum
contacts. As a practical matter, the more contacts a defendant has with a
forum, the less the relationship likely has to be between the contacts and the
claim. A defendant with a single contact with a forum, therefore, might be
subject to specific jurisdiction but only as to claims directly related to that
contact. A non-resident defendant with a greater number of contacts with
the forum state will be subject to a broader range of claims.

(c) Defendant can Show that, Even if There are

Minimum Contacts, Assertion of Personal Jurisdiction
Would be Unfair
If only specific personal jurisdiction exists over a claim against a
defendant, and even if minimum contacts exist, a court must still consider
policy and functional issues before concluding whether asserting personal
jurisdiction comports with due process. In addition to minimum contacts,
the exercise of personal jurisdiction must comport with traditional notions
of fair play and substantial justice. Int'l Shoe, 326 U.S. at 316. (General
personal jurisdiction will never be “unfair.”)
Most courts place this burden on the defendant to produce evidence to
show that defending the suit in the forum would be unreasonable. The court
will consider: (1) the burden on the non-resident defendant; (2) the forum's
interest in adjudicating the dispute as compared to the defendant's home
forum; (3) the plaintiff's interest in obtaining convenient and effective
relief; (4) the judicial system's interest in obtaining the most efficient
resolution of controversies; and (5) the shared interest of the several states
in furthering substantive social policies. Burger King Corp., 471 U.S. at
477; World-Wide Volkswagen Corp., 444 U.S. at 292.
Some courts have stated that the more contacts a defendant has with the
forum, the greater the “unreasonableness” must be. Ticketmaster-New York,
Inc. v. Alioto, 26 F.3d 201, 210 (1st Cir. 1994) (“the reasonableness prong
of the due process inquiry evokes a sliding scale: the weaker the plaintiff's
showing on the first two prongs [minimum contacts and relatedness] . . . the
less a defendant need shown in terms of unreasonableness to defeat
jurisdiction.”)
It is quite rare for courts to find that even though a defendant has
minimum contacts with a forum, that fair play and substantial justice
require finding jurisdiction improper. Further, in Burger King, the Court
emphasized that “a defendant who purposefully . . . directed his activities at
forum residents . . . must present a compelling case that the presence of
some other considerations would render jurisdiction unreasonable.” Burger
King, 471 U.S. at 477. Instead, the Court emphasized that other means, such
as transferring venue to a more convenient forum, might be the appropriate
means to accommodate these considerations. Id. Similarly, the court has
emphasized that if the defendant purposefully derives economic benefits
from interstate activities, “it may well be unfair to allow them to escape
having to account in other States for consequences that arise proximately
from such activities.” Id. at 474. In addition, “because ‘modern
transportation and communications have made it much less burdensome for
a party sued to defend himself in a State where he engages in economic
activity,’ it usually will not be unfair to subject him to the burdens of
litigating in another forum for disputes relating to such activity.” Id.
(quoting McGee v. Int'l Life Ins. Co., 355 U.S. 220, 223 (1957)).

C. Special Issues in In Personam

Jurisdiction
1. Which Contacts by a Corporate Defendant
“Count”?
If a defendant is a corporation, obviously its contacts with the forum
“count.” Do contacts with the forum of related corporations — say the
“parent” of the defendant (a corporation which owns all of the defendant's
stock) or a subsidiary (a corporation of which the defendant owns all of its
stock) — also count? No. The general rule is that contacts by or in
personam jurisdiction over one corporate entity does not, by itself, count
against even wholly owned companies. Cannon Mfg. Co. v. Cudahy
Packing Co., 267 U.S. 333 (1925).
There are exceptions that take various forms, however. Some courts
permit the contact of a subsidiary to count against a parent, for example,
under an “agency theory.” “The agency test is satisfied by a showing that
the subsidiary functions as the parent corporation's representative in that it
performs services that are sufficiently important to the foreign corporation
that if it did not have a representative to perform them, the corporation's
own officials would undertake to perform substantially similar services.”
Doe v. Unocal Corp., 248 F.3d 915, 928 (9th Cir. 2001).
Other courts apply a so-called “alter ego” test, holding that if the plaintiff
shows that the parent corporation is merely the “alter ego” of its subsidiary,
the subsidiary's contacts with the forum “count” against the parent for the
purposes of establishing personal jurisdiction. Generally, the plaintiff must
prove that the parent controls the business and operations of the subsidiary
to succeed on this theory. These factors are relevant to determine whether a
parent controls a subsidiary sufficiently to meld the two for minimum
contacts purposes:
(1) Whether the parent owns 100% of the subsidiary's stock.
(2) Whether the two corporations maintain separate headquarters.
(3) Whether the parent and subsidiary share common officers and
directors.
(4) Whether corporate formalities are observed.
(5) Whether separate accounting systems are maintained.
(6) Whether the parent exercises complete authority over general
policy.
(7) Whether the subsidiary exercises complete authority over daily
operations, including research and development, marketing, and
supply.
Dalton v. R & W Marine, Inc., 897 F.2d 1359, 1363 (5th Cir.1990).
Although “alter ego” is also relating to “piercing the corporate veil” for
purposes of imposing liability on one corporation for the acts of another,
“the alter ego test for attribution of contacts, i.e., personal jurisdiction, is
less stringent than that for liability.” Stuart v. Spademan, 772 F.2d 1185,
1198 n. 12 (5th Cir.1985).

2. Does an Internet Website Count?

The Internet creates some interesting personal jurisdiction issues. Is a
website “in” every forum? How do we know if a defendant with a website
“targeted” citizens of a particular forum — does the fact that the plaintiff
placed an order through the site establish that? These are recent questions
for courts, and yet some consistency is emerging.
With respect to general jurisdiction, the existence of a web page seems
irrelevant. If a court were to deem the existence of a web page pertinent to
general jurisdiction, then it would be pertinent everywhere, since web pages
are accessible throughout the United States (and world, obviously). See Bird
v. Parsons, 289 F.3d 865 (6th Cir. 2002) (“the fact that [defendant]
maintains a website that is accessible to anyone . . . is insufficient to justify
general jurisdiction.”).
However, web pages can play a role in specific jurisdiction, depending in
large part on the nature and element of the claim. See Zippo Mfg. Co. v.
Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997) (posting of web
page that allowed for interactivity with forum residents and targeted to
Pennsylvania).
An appellate decision reveals how courts currently address the role of the
Internet in the specific jurisdiction analysis. In Pebble Beach Co. v. Caddy,
453 F.3d 1151 (9th Cir. 2006), a resident of a foreign country used the name
“Pebble Beach” in a website domain name even though it is the trademark
of the famous California golf course. The fact that California residents
could access the site and the defendant knew that the golf course was in
California was not enough to show that the defendant had purposefully
directed his activities in California. The court emphasized that a passive
website, even one with obvious connections to California, was insufficient:
there must be “something more” than just a foreseeable effect in the forum
state, and owning a passive website was not enough. Id. at 1158. In so
holding, the Pebble Beach court distinguished cases where the website
owners engaged in active contact, such as through e-mail, interactive
website communications or similar electronic contacts with California
residents. In fact, where there is interactivity, and not just a passive website,
specific jurisdiction can arise. See, e.g., Compuserve, Inc. v. Patterson, 89
F.3d 1257 (6th Cir. 1996) (specific jurisdiction found where Texas resident
sold shareware through CompuServe, located in Ohio); See Cybersell, Inc.
v. Cybersell, Inc., 130 F.3d 414 (9th Cir. 1997) (no purposeful activity
arising from “essentially passive nature . . . in posting a home page”);
Revell v. Lidov, 317 F.3d 467 (5th Cir. 2002) (affirming dismissal of
defamation claim brought by Texas resident against Columbia professor and
Columbia University over article posted on Columbia University's website).
On the other hand, specific jurisdiction over intentional tort claims can
based on Internet activities if those activities are the basis of the claim. For
example, in Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316 (9th Cir. 1998),
Panavision sued an alleged “cyber pirate” who obtained domain names
using Panavision trademarks and offered to sell them to Panavision at a
price. The court held personal jurisdiction was present because the tort was
intentional and was expressly aimed at a California corporation, and the
“brunt” of the harm was felt in California. “Toeppen engaged in a scheme
to register Pan-a-vision's trademarks as his domain names for the purpose
of extorting money from Panavision. His conduct, as he knew it likely
would, had the effect of injuring Panavision in California. . . .”

3. Rule 4(k)(2) and Foreign-Country Defendants

Rule 4(k)(2) is often called the “federal long-arm statute” since it
authorizes a federal court to assert personal jurisdiction over a defendant so
long as (1) the claim arises under federal law; (2) the defendant is beyond
the reach of any state court of general jurisdiction (i.e., personal jurisdiction
cannot be imposed under any state long-arm statute); and (3) assertion of
personal jurisdiction comports with Due Process. See U.S. v. Swiss Am.
Bank, Ltd., 191 F.3d 30, 38 (1st Cir. 1999). This rule was adopted to
eliminate a gap: a foreign defendant “who lacked single-state contacts
sufficient to bring them within the reach of a given state's long-arm statue
(whether by reason of the paucity of the contacts or of limitations built into
the statute itself) . . . could evade responsibility for civil violations of
federal laws that did not provide specifically for service of process.” Id.
Now, so long as the defendant has sufficient contacts with the United States
as a whole, a plaintiff may assert a federal claim against him. Thus, it fills a
gap left when there is no state long-arm statute or federal statute that would
authorize service of process, but the defendant's contacts with the United
States as a whole made it Constitutionally subject to suit — in the United
States.
Courts have disagreed on who has the burden of proof under this rule.
Even though a plaintiff has the burden to plead and prove personal
jurisdiction, courts believe the rule requires a different approach.
On the one hand, some courts hold that the plaintiff must establish a
prima facie case that personal jurisdiction is not available in any state, and
that asserting personal jurisdiction would be constitutional. Then the
defendant must produce evidence, which would show either that it could be
sued in at least one state or its contacts with the U.S. as a whole are
insufficient to constitutionally assert personal jurisdiction. Id. at 41–42. If a
defendant relies on the first option — showing it could be sued in a
particular state — then either the plaintiff can negate that showing, or the
case can be transferred to that state. If the defendant relies on the second
option and shows it lacks minimum contacts with the U.S. as a whole, then
the plaintiff must show that the court may constitutionally assert personal
jurisdiction. Id.
On the other hand, other courts hold that the defendant can avoid the
reach of this Rule only if it designates a state in which the plaintiff could
have filed suit. Touchcom, Inc. v. Bereskin & Parr, 574 F.3d 1403, 1414
(Fed. Cir. 2009) (discussing split in the case law). This avoids the plaintiff
from having to prove a negative — that the defendant can't be sued in any
particular state, and so the plaintiff should be permitted to rely on this gap-
filling rule.
Under both approaches, “‘due process demands [a showing of minimum
contacts with the United States] with respect to foreign defendants before a
court can assert personal jurisdiction.’” Go-Video, Inc. v. Akai Elec. Co.,
Ltd., 885 F.2d 1406, 1416 (9th Cir. 1989).

4. The Few Federal, Claim-Specific Long-Arm

Statutes
As discussed above, the question is minimum contacts between the
defendant and the forum. But what constitutes the “forum” depends on the
statute that authorizes service of process over the claim. If no federal statute
authorizes nationwide service of process (i.e., if it's a state law claim or a
federal claim that does not have a specific statute authorizing service of
process), then the “forum” is the state in which the district court sits. The
defendant must have “minimum contacts” with that state.
If a specific federal statute authorizes nationwide service of process on
the federal claim in the suit, then the “forum” with which there must be
“minimum contacts” is the United States as a whole. The Due Process
Clause of the Fifth Amendment requires minimum contacts for federal
claims only with the United States as a whole. See Pinker v. Roche
Holdings, Ltd., 292 F.2d 361, 369 (3d Cir. 2002) (“We too are persuaded by
the reasoning of our prior opinions on the subject, and, consistent with
several of our sister courts of appeals, hold that a federal court's personal
jurisdiction may be assessed on the basis of the defendant's national
contacts when the plaintiff's claim rests on a federal statute authorizing
nationwide service of process.”); U.S. v. Union Pacific R.R., 98 U.S. 569,
604 (1879) (“nothing in the Constitution . . . forbids Congress” from
enacting a statute allowing for nation-wide service of process).
The chart below summarizes these points. Note that in both instances
even if there are minimum contacts, the assertion of personal jurisdiction
must also still be “fair.” (In addition, a few federal statutes authorize
worldwide service of process even over foreign citizens not present in the
United States. E.g., 1934 Exchange Act, 15 U.S.C. § 78aa. Under those
statutes, courts analyze (1) whether the defendant had constitutionally
sufficient minimum contacts with the United States as a whole (in terms of
the Due Process Clause of Fifth Amendment) and (2) whether the exercise
of personal jurisdiction is reasonable, i.e., consistent with “traditional
notions of fair play and substantial justice.” Pinker v. Roche Holdings Ltd.,
292 F.3d 361, 369–71 and n. 2 (3d Cir. 2002).)

This chart shows that when analyzing minimum contacts, “forum” means
the United States if a statute allows nationwide service of process;
otherwise, “forum” means the state where the federal court in which the suit
has been filed is located.

ii. Specific Jurisdiction: “Sufficient” Contacts, a Relationship

between the Claim and the Contacts, and Fairness
There are three steps to determine whether specific personal jurisdiction
exists of a claim:
(A) whether the defendant has minimum contacts with the forum
because it either purposely directed its activities toward the forum state
or purposefully availed itself of the privileges of conducting activities
in the forum;
(B) whether the plaintiff's cause of action is related to the defendant's
contacts; and
(C) whether, if the first two elements are satisfied, the defendant can
show that the exercise of personal jurisdiction would not be fair and
reasonable.
 Checkpoints

Can you identify when a state statute extends to the limits of due process, and when it does not, and
explain the impact that has on a personal jurisdiction analysis?
Can you explain how to determine whether specific jurisdiction exists? General? Consent? Tag?
Can you articulate when a court may find that traditional notions of fair play and substantial justice
are violated?
If personal jurisdiction is lacking, what do you do? See Chapter 31
Chapter 7

In Rem and Quasi In Rem

Jurisdiction

In Rem and Quasi In Rem Jurisdiction

Roadmap
This chapter identifies the forms of in rem jurisdiction and explains how to determine
whether a court has personal jurisdiction.

As we saw in Chapter 6, personal jurisdiction is proper if a statute

authorizes service of process and the assertion of personal jurisdiction
comports with due process. The benefit of having in personam personal
jurisdiction is that the court has jurisdiction over the person — and thus all
the defendant's assets. The plaintiff, if it prevails, can recover money to
satisfy any award entered against the judgment by accessing all the
defendant's assets.
“In rem” means “against the thing.” A judgment obtained based upon in
rem personal jurisdiction applies only to certain property; it does not give
the plaintiff the ability to execute on all of the defendant's assets, wherever
they may be.

A. The Three Types of In Rem

Jurisdiction
A recent case summarized the three types of in rem jurisdiction:
The first, usually called “in rem” or “true in rem,” arises when the
court adjudicates the property rights corresponding to a particular res,
or thing, for every potential rights holder, whether named in the
proceeding or not. Examples of this type of true in rem proceeding are
 forfeiture, condemnation, probate and arrests of vessels in admiralty.
A second class of in rem proceeding is called “quasi in rem,” or more
specifically “quasi in rem type I,” which allocates property rights as
against particular named persons. Examples of this type of proceeding
are actions to remove a cloud on title to land or actions that seek to
quiet title against a particular rival's claim.
A third type of in rem proceeding is sometimes considered a
subcategory of the second, and is consequently called a “quasi in rem
type II” proceeding; it may be also called an “attachment” or
“sequestration” proceeding. This type of action concerns the rights of a
particular person or persons in a thing, but is distinguished from type I
quasi in rem proceedings because the claim against the person that
gives rise to the action is not related to the res that provides
jurisdiction. That is, the plaintiff does not dispute the property rights of
the owner of the res, but seeks to obtain the res in satisfaction of some
separate claim.
FleetBoston Fin. Corp. v. FleetBostonFinancial.com, 138 F. Supp. 2d 121
(D. Mass. 2001).
We will explore these distinctions a little bit more before turning to the
personal jurisdiction analysis.

1. True In Rem
In a true in rem proceeding the federal court is adjudicating title to
property in the state as to all people, not just the named parties to the suit. A
typical in rem case involves a dispute over who of several claimants owns a
parcel of land. A court in the state where the land is located has power to
decide who owns it, for example, regardless of where claimants reside. A
judgment entered “in rem” binds the world, and not just particular parties,
but it only affects the property in the forum state. In effect, the court's
power is over the “thing” not the persons. For example, in Marex Titanic,
Inc. v. Wrecked and Abandoned Vessel, 2 F.3d 544 (4th Cir. 1993), a party
who had salvaged parts from The Titanic and brought suit — actually
naming the property as the “defendant” and sought an order that the party
was its rightful owner.
The practical limitations arise from the fact that the property must be in
the state. Although often in rem actions can be brought to resolve disputes
over even intangible property (such as stocks and bonds), the property must
be in the state. There are only a few claims that are true in rem actions,
including actions to quiet title, certain probate actions, and some actions in
admiralty or bankruptcy. They are rare but important.
In one case, Harris v. Balk, 198 U.S. 215 (1905), Harris owed $180 to
fellow North Carolinian Balk, who in turn owed $300 to Epstein, a resident
of Maryland. When Harris went to Maryland to visit Epstein, Epstein used a
state court proceeding to “attach” Harris's debt to Balk. In response, Harris
paid to Balk the $180 Harris owed to Epstein, and a Maryland state court in
favor of Epstein entered a final judgment. When Harris got back to North
Carolina, Balk sued him for the $180 debt — which Harris had just paid to
Epstein. Harris in defense argued that the Maryland judgment barred
recovery of the $180 from him. The North Carolina state courts held that
the Maryland courts had not had jurisdiction to attach the debt Harris owed
to Balk, and ordered Harris to pay the $180 to Balk. Harris balked at paying
twice, and appealed to the Supreme Court. The Supreme Court held that
because Harris had physically been present in Maryland, its courts had
power over his person, and the fact that the debt from Harris to Balk
originated in North Carolina was immaterial. “The obligation of the debtor
to pay his debt clings to and accompanies him wherever he goes.” Id.
Notice that the court did not hold that all of Harris' property was subject to
judgment, just the $180 debt, which was “property” that was “with” him
while he was in Maryland. Cf. Burnham v. Superior Court of Cal., 495 U.S.
604 (1990) (state statute that authorizes in personam jurisdiction to arise by
service on a defendant who is only temporarily in a state satisfied Due
Process).

2. Quasi In Rem
In general, quasi in rem jurisdiction is used where the dispute is not over
title to the property, but, instead, a party has previously obtained a judgment
against a party who owns property, and wants an order from a court that
gives title to property to the judgment-winner to satisfy the judgment. Quasi
in rem jurisdiction is useful where, for example, the defendant lives in some
other state and is not subject to personal jurisdiction in the state where the
defendant owns a piece of property, but the plaintiff wants a court in the
state where the defendant owns the property to issue a judgment affecting
ownership of, or title to, that property. So, a plaintiff in Iowa can seek a
judgment from an Iowa court concerning land in Iowa, even if the
defendant lives in Florida and is not subject to personal jurisdiction in Iowa.

a. Quasi In Rem Type 1

These forms of quasi in rem jurisdiction have special uses, and in those
instances when the defendant has significant property in the jurisdiction,
one or the other may be sufficient. For example, one federal statute creates
quasi in rem type 1 jurisdiction for disputes over domain names: a suit to
force forfeiture, cancellation, or transfer of an Internet domain name can,
under some circumstances, be filed in jurisdictions where the domain name
is registered. 15 U.S.C. § 1125(d)(2) (part of the Anti-cybersquatting
Consumer Protection Act, or “ACPA”).

b. Quasi In Rem Type 2

Quasi in rem Type 2 jurisdiction is distinct in that the claim has nothing
to do with the property that is being sought by the plaintiff. This form of
jurisdiction is often utilized to “attach” specific property due to a prior
judgment obtained by the plaintiff against the property owner. “Tormented
souls of first-year civil procedure will recognize . . . quasi in rem type II,
where ‘the plaintiff seeks to apply what he concedes to be the property of
the defendant to the satisfaction of a claim against him.’” Glencore Grain
Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114 (9th Cir.
2002) (quoting Hanson v. Denckla, 357 U.S. 235, 246 n. 12 (1958)). The
plaintiff must identify the defendant's property in the jurisdiction and allege
that it is subject to attachment or seizure. Glencore Grain, 284 F.3d at 1128.

B. The Same Standards for In Personam

Jurisdiction Apply to In Rem
Jurisdiction
In Shaffer v. Heitner, 433 U.S. 186 (1977), the plaintiff filed a
shareholder's derivative suit in Delaware on behalf of a corporation against
some of its present and former officers and directors. (Not the corporation
itself!) The plaintiff alleged that the individual defendants had engaged in
activities that subjected the corporation to liability in Oregon, and sought
sequestration of their property — shares of the corporation's stock — that
were present in Delaware (because a Delaware statute said that shares of
Delaware corporations were constructively present in Delaware). Although
the lower courts had held that assertion of in rem jurisdiction was
constitutional, the Supreme Court reversed and held that the rubric of
International Shoe applied to in rem actions.
Thus, the same standard for personal jurisdiction applies to all kinds of in
rem jurisdiction:
Shaffer . . . eliminated all doubt that the minimum contacts standard in
International Shoe governs in rem and quasi in rem actions as well as
in personam actions. Shaffer, 433 U.S. at 207–12. The Court held that
“in order to justify an exercise of jurisdiction in rem, the basis for
jurisdiction must be sufficient to justify exercising jurisdiction over the
interests of persons in a thing.” Id. at 207. And “[t]he standard for
determining whether an exercise of jurisdiction over the interests of
persons is consistent with the Due Process Clause is the minimum-
contacts standard elucidated in International Shoe.” Id.
Base Metal Trading, Ltd. v. OJSC “Novokuznetsky Aluminum Factory,” 283
F.3d 208 (4th Cir. 2002).
Obviously the existence of property in the state matters. Indeed, if the
property is present and the claim relates to the property, then it will be rare
that personal jurisdiction does not exist. The two steps to apply
International Shoe to in rem proceedings are:
First, does the claim relate to the property in the state? If so, and even
though the Shoe analysis must be made, the Supreme Court in Shaffer
stated that “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.”
That was not the case in Shaffer, however: the ownership of stock by the
defendant directors had nothing to do with whether they were liable to the
corporation for their wrong-doing.
Second, if the claim does not relate to the property, then a careful
application of the minimum contacts analysis of Shoe is required. The
presence of the defendant's property in the state obviously matters to that
analysis:
Of course, the presence of property in a state may have an impact on
the personal jurisdiction inquiry . . . . Yet, when the property that
serves as the basis for jurisdiction is completely unrelated to the
 plaintiff's cause of action, the presence of property alone will not
support jurisdiction. While, “the presence of the defendant's property
in a State might suggest the existence of other ties among the
defendant, the State, and the litigation,” when those “other ties” do not
exist, jurisdiction is not reasonable. Id.
Base Metal, 283 F.3d at 213.

C. How Is Notice Given?

When the action is against the world as in a true in rem proceeding, a
state statute typically authorizes notice by publication of the filing of the
lawsuit. See, e.g., Ehorn v. Sunken Vessel Known as “Rosinco,” 294 F.3d
856 (7th Cir. 2002) (describing plaintiff's posting of ads in two newspapers
and posting notice in federal court house). This publication is called
“constructive” service of process.
Where the proceeding is quasi in rem, a statute must authorize service of
process. The requirements vary by state, some permitting service of
process, while others allow for constructive service. See Monahan v.
Holmes, 139 F. Supp. 2d 253 (D. Conn. 2001).

Checkpoints

Can you articulate the differences between true in rem and the two types of quasi in rem jurisdiction?
What difference does whether the claim relates to the property make in the analysis?
When will either in rem or quasi in rem jurisdiction be sufficient, as a practical matter, for a plaintiff?
Chapter 8

The Foundations of Venue

Venue Roadmap
This chapter describes the law of venue, which determines, in states that have more than
one federal district court, which district is a proper place to file a particular claim. While
subject matter jurisdiction tells us whether a claim can be filed in federal court, and personal
jurisdiction tells us which state or states a claim can be filed in, venue tells us which district
within a state a claim can properly be filed in. We will also see that even though suit has been
filed in a proper venue, the case may be transferred to a more convenient, proper venue.
Finally, we'll see that — much like supplemental jurisdiction expands the basic subject matter
jurisdiction of federal courts, and pendent person jurisdiction expands the basic reach of long-
arm statutes — “pendent venue” expands venue to let related claims “tag along” under some
circumstances.

The word “venue” is commonly used in real life in much the same way
that it is used in civil procedure. When someone says, “that was a great
venue for that concert,” he's saying that the show worked well in the place:
it fit. The same thing is true with “venue” in civil lawsuits: when a court is
a proper venue, it means that the district where the court is located is a good
fit under the circumstances. This chapter explores the issue of why a court
in a particular state, even if it has personal and subject matter jurisdiction,
may not be the best place in a particular state for the show. The question of
which federal court, when there is more than one in a particular state,
should hear a case largely turns on efficiency and convenience, but is
influenced by other factors such as the plaintiff's choice of forum.
Venue is related to, but distinct from, personal and subject matter
jurisdiction. A court can have personal jurisdiction over a claim against
defendant, for example, but venue over that claim may be improper. Keep
the analyses separate.
Why, if subject matter jurisdiction and personal jurisdiction are proper,
do federal statutes further restrict which federal district court in a state with
more than one district can hear a claim? Because subject matter jurisdiction
refers to the power of the court to hear the dispute, and personal jurisdiction
is the court's power over the defendant. Neither of them tells us whether the
particular court in that state is a convenient place for trial, as those concepts
are concerned with power in terms of power of the court to hear a claim or
power of the court to force the non-resident defendant to defend itself in the
forum state.
Specifically, “subject matter jurisdiction” simply means either that the
claim arises under federal law or the parties are diverse and the amount in
controversy is satisfied. Likewise, “personal jurisdiction” means that a
defendant has sufficient contacts with a state. But, simply because a claim
meets the requirements of diversity or presents a federal question, doesn't
tell us where in that state the suit should for the sake of convenience be
tried. Further, simply because a defendant is subject to personal jurisdiction
in a particular state doesn't even mean that the case should be tried in that
state — it may just mean, for example, that the defendant is subject to
general personal jurisdiction in that state. That fact doesn't tell us where the
witnesses and documents are located or, necessarily, where the events that
led to the claim occurred. Personal and subject matter jurisdiction do not
tell us anything about convenience or efficiency.
In contrast, venue doesn't relate to power of the court over the claim or
the person, but instead relates to the convenience of the court, the parties,
and the witnesses. Leroy v. Great W. United Corp., 443 U.S. 173, 180
(1979) (noting that venue “is primarily a matter of choosing a convenient
forum”). Venue is not about limiting power of the courts in a forum over a
defendant, but is instead about convenience and efficiency of federal courts
within a forum that does have power over the defendant.
The need for venue statutes arises from the fact that most states are
divided into more than one federal district. Texas, for example, has several
districts, ranging from the Eastern District covering the areas generally east
of Houston, to the Northern District, covering Dallas and areas northward,
the Western District, covering Austin to El Paso, and the Southern District,
covering essentially Houston to the Rio Grande Valley. So to say that
personal jurisdiction is proper “in Texas” doesn't tell us which district in
Texas is a proper venue to try the case. A determination that a defendant has
minimum contacts with “the United States” likewise doesn't say anything
about where it would cheap and easy to try the claim. Even if a defendant is
subject to personal jurisdiction in a state, there may be a much better (more
convenient and efficient) state in which to try the claim.
 The propriety of venue is determined by examining connections between
the facts that led to the claim and the district in which the suit is filed. Thus,
if you know that a defendant has minimum contacts with Texas, you know
that personal jurisdiction is proper in the Lone Star State; you still need to
analyze which district or districts, if any, will have proper venue over the
claim. (Again, some small states have only one district, and so the only
district that might have venue over the case is the one district in the state.
That is the exception, not the rule.)
Why does the location of witnesses or evidence matter? Trials require
that juries hear testimony and see evidence. Evidence is either testimonial
(eye witness testimony to a car wreck, for example) or tangible (e.g.,
documents evidencing a breached contract to sell land). Given that reality,
some districts will be more convenient and efficient to try the claim than
others because more of the witnesses, documents, or both, are located in
that district. The broad goal of the rules and statutes governing venue is to
have trial occur in a district that's generally more convenient than others
given the facts underlying the claim.
What this chapter shows is that federal venue statutes set a rough limit on
where venue is proper: Congress made some pretty high-level
determinations as to which districts will likely be relatively convenient
places to try a claim. As we'll see, Congress realized that as a general rule it
ought to be proper to file a claim where the defendant lives, the plaintiff
lives, or the incident giving rise to the claim occurred. That's not a bad
guess as to where, most of the time, trial of a claim would be convenient, at
least as compared to the many places where neither of the parties live and
none of the events occurred, and filing it in those venues is improper.
Second, in Chapter 39 we'll deal with the refinements available to the
rough cut of “proper” versus “improper” venue. We'll see that Congress
recognized that the rough pass of “proper” versus “improper” venue might
not lead a case to be filed in what, given all the circumstances, is a much
more convenient venue. Suppose, for example, the plaintiff files in a proper
venue, but there's another proper venue where there are more witnesses,
more documents, and in which trial will generally be more convenient. For
instance, what if the accident occurred in Minnesota, but now the parties
and witnesses live in other states. Venue might be proper in Minnesota
under the “rough first pass” approach, but does it really make sense to try
the suit in Minnesota? As we'll see, parties can move to transfer even a case
filed in a proper venue to one that's both proper and more convenient for the
parties and witnesses. A number of circumstances are relevant to
determining convenience, and convenience is weighed against the plaintiff's
choice of a proper venue. While a court will readily transfer or dismiss a
claim filed in an improper venue, transferring a claim from a proper venue
to a “more convenient one” overrides a legitimate choice by the plaintiff,
and so is done only with some reluctance by the courts. But it is done.
That broad background raises a number of distinct concepts you should
grasp early on. We'll fill in the details below.
First, venue is determined by district. Although a few states have only
one federal district court, most states have more than one district. Thus,
venue generally is not determined on a state-level, as with personal
jurisdiction, but on a district (and sometimes, intra-district or “divisional”
level). So, personal jurisdiction over a claim might be proper in Texas, but
it's seldom correct to say that venue is proper “in Texas”: venue might be
proper in the Northern District of Texas (around Dallas) or the Southern
District (Houston), or the Eastern District (Marshall), but usually not
“Texas” as a whole.
Second, this is a black and white issue: venue is either proper or
improper. Federal statutes define where venue is proper; if it's not filed in a
proper district, then it's improper. As noted above, there are general federal
venue statutes that apply to most claims. In addition, some federal statutes
have specific venue provisions that identify the criteria for determining the
venues in which a particular claim, say patent infringement, can be properly
filed.
Third, venue is often proper in more than one district in a given state.
That is, a plaintiff can often choose which district to file in. Obviously, the
plaintiff has the first choice of proper venues to file in.
Fourth, if venue is improper in a district, then, if a defendant timely
moves to change venue, the court must do so. While the plaintiff's choice of
a proper venue carries weight, filing in an improper venue gives the
defendant the ability to move to transfer venue to a proper district.
Fifth, “proper” venue doesn't mean “best” or “most convenient.” It means
only that by the terms of the federal venue states, venue is proper, not that
the district is the best district for trial. Even so, because often venue will be
proper in more than one district, the defendant can move to transfer venue
to another forum for convenience of the parties and witnesses, even though
venue is proper where the case was filed. One district may be a proper
venue, but that court may conclude that another district with proper venue
would be more convenient, and so it may order the case transferred to
another proper, and more convenient, district. That's the topic we'll deal
with in a Chapter 39.
Sixth — and this is some good news — some claims, including
counterclaims, aren't subject to venue requirements. See Chapter 23. The
venue requirements do apply, however, to every claim by a plaintiff against
a defendant, though “pendent venue” expands the venue statutes slightly if
there is one claim in a case for which venue is proper. See Chapter 23. With
that background, let's get started with determining what makes a venue
proper, or not.

Checkpoints

Do you understand that the district, and not the state, is the measuring unit for venue?
Do you understand the difference between proper and improper venue, as compared to a more
convenient and proper venue?
Chapter 9

Proper and Improper Venue

Proper and Improper Venue Roadmap

This chapter identifies the statutory venue requirements and explains how they promote
convenience by, generally, requiring that a claim be filed either where a party “resides” or a
substantial part of the claim occurred.
The chapter explains how to determine both where a party resides for purposes of venue
and where a substantial part of the claim occurred, and when those facts can render venue
proper.

A. Determining Proper Venue

Congress has enacted specific statutes that define where venue is proper
for particular federal claims. When Congress enacts a statute that creates a
federal claim, it sometimes also enacts a provision that addresses where
venue over those claims is proper. So, to identify the proper venue(s), you
first have to look at the complaint to determine whether it's a federal claim
that has its own specific venue statute. If so, that specific statute controls.
(We'll talk about some specific venue statutes below.) If, as is usually the
case, there is no specific venue statute for the claim, then venue turns on the
general federal venue statute.
The general federal venue statute, 28 U.S.C. § 1391, identifies which
districts are proper venue for a claim. This statute was heavily amended
(and simplified, they say!) in 2011. The key parts of the statute defining
proper venues are:
(b) Venue in General. — A civil action may be brought in —
(1) a judicial district in which any defendant resides, if all
defendants are residents of the State in which the district is
located;
(2) a judicial district in which a substantial part of the events or
 omissions giving rise to the claim occurred, or a substantial part
of property that is the subject of the action is situated; or
(3) if there is no district in which an action may otherwise be
brought as provided in this section, any judicial district in which
any defendant is subject to the court's personal jurisdiction with
respect to such action.
Thus, there are three possible categories of proper venues (and there may be
many districts which fall within one or more of those categories. We'll go
through each one next.

1. The Three Possible Proper Venues Under the

General Venue Statute
Put in order of easiest to hardest, the potential proper venues are these:
(a) a judicial district in which a substantial part of the events or
omissions giving rise to the claim occurred, or a substantial part of the
property that is the subject of the action is situated;
(b) a judicial district where any defendant resides if all defendants
reside in the forum State; or
(c) if there is no district in which the action may otherwise be brought,
a judicial district in which any defendant is subject to personal
jurisdiction at the time the action is commenced.
Notice that the final option applies only if venue is not proper under either
of the first two subsections. That's why it's the hardest subsection to apply:
you have to analyze the first two to figure out if you can use the third one.
Bear in mind that even if suit is filed in a “proper” venue in terms of
Section 1391, there may be a more convenient venue to which it can be
transferred under Section 1404. Section 1391 only defines which districts
are proper or improper venues.

(a) A district in which a substantial part of the events

or omissions giving rise to the claim occurred
Venue is proper where “a substantial part of the events or omissions
giving rise to the claim occurred.” There are two requirements to the first
part of this prong: there must have occurred in the district (1) a substantial
part (2) of the events or omissions giving rise to the claim. We'll take the
two elements required to establish proper venue under this subsection in
reverse order, since it's easier to understand that way.

1. Substantial Part of the Events or Omissions

To determine whether the events or omissions relied upon to establish
venue were “part of the events giving rise to the claim,” the elements of the
claim must be analyzed to determine what acts or omissions form the claim.
Only those acts or omissions that form “part of the historical predicate” for
the claim count. Uffner v. La Reunion Francaise, S.A., 244 F.3d 38, 42 (1st
Cir. 2002). They must “have more than some tangential connection to the
claim.” Lomano v. Black, 285 F. Supp. 2d 637, 640 (E.D. Pa. 2003). They
do not need to be disputed or have directly led to the filing of the action.
Mitrano v. Hawes, 377 F.3d 402 (4th Cir. 2004). Rather, what counts is “the
entire sequence of events underlying the claim.” Uffner., 244 F.3d at 42.
Why are the acts or omissions the focus? Because the events that led to
the claim will indicate where witnesses and tangible evidence will be found,
and having suit filed there furthers the purpose of venue. Thus, the test for
determining whether venue is proper under this prong does not turn on “the
defendant's ‘contacts’ with a particular district, but rather the location of
those ‘events or omissions giving rise to the claim.’” Cottman Transmission
Sys., Inc. v. Martino, 36 F.3d 291, 294 (3d Cir. 1994).

2. What Does “Substantial Part” Mean?

To determine whether the events were a “substantial part” of the claim,”
there's both a qualitative and a quantitative aspect. First, to “count,” the
event or omission must have a close nexus to the claim. Daniel v. Am. Bd.
Of Emergency Med., 428 F.3d 408, 433 (2d Cir. 2005). Second, there must
be “enough” of these closely related events or omissions to justify
characterizing the connection as being “substantial.” Id.
So, for example, venue over a claim alleging fraud would be proper in
the district where a document containing the fraudulent misrepresentation
was sent. Moore v. Dixon, 2006 WL 3091142 (E.D. Wis. 2006) (collecting
cases). In one case, the defendants allegedly sent documents containing
false statements concerning the sale of a hockey team to the plaintiff in
Illinois. The court held venue proper in Illinois because the letter was
mailed into the district where suit was filed and “in reaching its decision to
purchase [the hockey team, the plaintiff] relied on [defendants']
misrepresentations” in the district. Mercantile Capital Partners v. Agenzia
Sports, Inc., 2005 WL 351926 (N.D. Ill. 2005).
“Substantial” doesn't mean “most” or “more than other districts” — it
means only that a substantial part of the events that led to the claim
occurred in the district. The test isn't whether a majority of the events
occurred in the district. Under a former version of the venue statute, but not
the existing one, courts had to determine where the “weight of the contacts”
occurred — but “most” is no longer the test, “substantial” is. Mitrano v.
Hawes, 377 F.3d 402 (4th Cir. 2004). Accordingly, venue can be proper in
multiple districts: “There may be several districts that qualify as a situs of
such ‘substantial’ activities . . . However, if the selected district's contacts
are ‘substantial,’ it should make no difference that another's are more so, or
the most so.” Rich-Mix Products, Inc v. Quickrete Companies, Inc., 1999
WL 409946 (N.D. Ill. 1999).
For example, in First of Michigan Corp. v. Bramlet, 141 F.3d 260 (6th
Cir. 1998), the plaintiffs brought a fraud claim against the defendant based
on investment advice. The plaintiffs began receiving the allegedly bad
advice while they lived in Michigan, but soon moved to Florida, and
received most of the advice and suffered most of the harm while living in
Florida, not Michigan. The district court dismissed for improper venue, but
the appellate court reversed, holding that because a substantial part of the
events happened in Michigan, venue was proper, whether or not substantial
events, or more events, also happened in Florida.
Another example is PKWare v. Meade, 79 F. Supp. 2d 1007, 1018 (E.D.
Wis. 2000), where the plaintiff brought a breach of contract claim. The
district court held “substantial parts” of a contract claim included where the
conduct underlying the breach occurred, where performance was to have
occurred, and where the delivery or non-delivery of goods or payment or
non-payment occurred. Thus, in a typical contract action venue might be
proper in several districts. See also Bates v. C&S Adjusters, Inc., 980 F.2d
865 (2d Cir. 1992) (weight of contacts for Fair Debt Collection Practices
Act claim was in district where collection notice that violated act had been
received).
Consequently, there may be more than one district — indeed, more than
one state — in which a substantial part of the events or omissions occurred.
In other words, there can be more than one proper venue under this
subsection. It doesn't matter if more events occurred in another district than
in the one which plaintiff filed the claim: so long as “substantial” events or
omissions occurred in that district, venue is proper there even if “more”
occurred elsewhere. (We'll see that it may be that venue can be transferred
to that district if it is more convenient, but venue is not improper in a
district where a substantial part of the activities or omissions occurred, even
if the majority of them occurred in another district.)

(b) A judicial district where any defendant resides if all

defendants reside — or the only defendant resides —
in the forum state.
If the claim is not filed in a state where a substantial part of the cause of
action occurred, then venue can be proper in a district where a defendant
“resides” if all reside in the forum state.
First, one odd thing about this subsection: it applies to single-defendant
cases. So, if there is only one defendant, then venue will be proper in the
district where that defendant “resides.” In multiple defendant cases where
all defendants “reside” in the forum state, then venue will be proper where
any single defendant “resides.” But, if one defendant “resides” in Texas,
and the other in Louisiana, venue cannot be based on this subsection. It's
only available if every defendant — all of them, whether one or more —
resides in the forum state.
The meaning of “reside” is obviously the determinative issue. Luckily
the statute defines “residency” by the type of defendant. Also luckily, it's
relatively straightforward with respect to natural persons who are
defendants. The statute provides that “a natural person, including an alien
lawfully admitted for permanent residence in the United States, shall be
deemed to reside in the judicial district in which that person is domiciled.”
Thus, if the defendant is a natural person, the defendant resides in the
district of the person's domicile. This is determined just as with subject
matter and personal jurisdiction, though on a district level: which district
does the defendant have a physical presence coupled with an intent to
remain for an indeterminate period of time? See Chapter 4. Accordingly, it
is the individual's domicile that determines where the person “resides.”
Henshell Corp. v. Childerston, 1999 WL 549027 (E.D. Pa. 1999).
Things are not so easy with respect to business entities like
partnerships or corporations. Entities have no “home” as such, and
“they” don't have any intent to live somewhere, since they're not real.
Unfortunately, the statute divides business entities into two categories:
corporate and non-corporate.
First, be sure that you understand that “corporation” is not the same thing
as a “partnership” or a “business.” The word “corporation” means a specific
form of business, meaning an artificial person that has been incorporated
under state law. So, if you read the following carefully, you will see that
subsection 1391(d) only applies to corporations, not other business entities.
Further still, subsection 1391(c) and (d) each addresses where a
“corporation” “resides” for venue purposes, with the former applying to
single-district states and the latter to multi-district states:
(c) Residency. — For all venue purposes — . . .
(2) an entity with the capacity to sue and be sued in its common
name under applicable law, whether or not incorporated, shall be
deemed to reside, if a defendant, in any judicial district in which
such defendant is subject to the court's personal jurisdiction with
respect to the civil action in question and, if a plaintiff, only in the
judicial district in which it maintains its principal place of
business; . . .
(d) Residency of Corporations in States With Multiple Districts. —
For purposes of venue under this chapter, in a State which has
more than one judicial district and in which a defendant that is a
corporation is subject to personal jurisdiction at the time an action
is commenced, such corporation shall be deemed to reside in any
district in that State within which its contacts would be sufficient
to subject it to personal jurisdiction if that district were a separate
State, and, if there is no such district, the corporation shall be
deemed to reside in the district within which it has the most
significant contacts.
That's a lot of words, but it turns on two variables: whether the entity is a
corporation and whether the state in which it is subject to personal
jurisdiction has more than one district:
 So, the first step to determine where a corporation “resides” is to
determine whether it is subject to personal jurisdiction in a state. If so, and
if the state has one district, you're done. (If the corporation is a plaintiff, it is
deemed to reside in the district with this principal place of business. There
are very few statutes where the plaintiff's residence matters, however, and it
does not matter for the general venue statute, Section 1391.)
If the state has more than one district, you need to pretend that each
district is its own state and ask whether each district, were it a state, would
have personal jurisdiction over the defendant. If one or more districts in the
state would have personal jurisdiction, then you're done: the corporation
“resides” in each of those districts. One weird question: do you look at the
long-arm statute, or just the due process case law? This would matter if the
state long arm statute is more restrictive than due process requires. The
courts are splitting on that issue.
If the defendant is subject to personal jurisdiction in the state, but there's
no single district that would have personal jurisdiction as if it were a
separate state, then you need to identify the one district with which the
defendant has the most significant contacts. That district is where the
corporate defendant “resides.”
There's one more weird thing left.
Read Section 1391(c) closely. Unlike Section 1391(b), it is limited to
corporations, not entities that can sue in their own name (e.g., partnership).
Instead, on its face, Section 1391(c) only applies to the residence of
“corporations.” What of other business entities, such as partnerships or
limited partnerships? The text of the statute would not cover unincorporated
entities such as these. Nonetheless, the Supreme Court has construed
Section 1391(c) to apply to labor unions. See Denver & R.G.W.R. Co. v.
Brotherhood of R.R. Trainmen, 387 U.S. 556, 562 (1967). Since then, some
lower courts have construed Section 1391(c) to define the residences of
partnerships. See, e.g., Penrod Drilling Co. v. Johnson, 414 F.2d 1217 (5th
Cir. 1969) (applying Section 1391(c) to partnership); Injection Research
Specialists v. Polaris Indus., L.P., 759 F. Supp. 1511, 1515 (D. Colo. 1991)
(holding that partnership should be treated like a corporation for this
purpose). See also Pepsico, Inc., v. Board of Trustees of the W. Conference
of Teamsters Pension Trust Fund, 1988 WL 64869, *2 (S.D.N.Y. 1988)
(holding that Section 1391(c) covered an unincorporated association).
Other courts have rejected a broad reading, however, and have deemed
partnerships to reside where both the partnership and each of its individual
partners resides. See Muenzberg v. Barnes, 1998 WL 61207, *2 (N.D. Cal.
1998) (refusing to expand “the already expansive judicial interpretation of
‘corporation’ under 1391(c)” to include public entities, such as state
subdivisions); Blue Compass Corp. v. Polish Masters of Am., 777 F. Supp.
4, 5 (D. Vt. 1991) (rejecting argument that Section 1391(c) covers a sole
proprietorship).
Suppose a sole proprietor starts up a pizza shop. It becomes quite
popular, and soon he branches out and establishes other franchises
throughout the country. He forms a partnership, but does not incorporate.
Should Section 1391(c) define the residency of this partnership? That turns
on whether the courts will look at the plain text of the statute — in which
case partnership is not a corporation — or toward the purpose of the statute,
which arguably was to allow venue over claims against business entities to
be proper in more circumstances.

(c) Venue Based on the Catch-All Subsection

The third clause of Section 1391 can be used to support proper venue
only if no other district has proper venue under either of the first two
subsections. It is designed to identify venue in multi-defendant cases where
virtually all of the events underlying the claim did not occur in any district,
and no defendant resides in any district. It's largely going to apply when a
foreign defendant — one who lives overseas — committed a wrong through
acts that occurred almost entirely, if not entirely, overseas. It's a narrow
catch-all that will ordinarily not apply in common suits among citizens of
the United States or corporations incorporated in the United States.

2. Establishing Proper Venue Based on Specific

Federal Venue Statutes
The introductory clause of Section 1391 provides that venue is proper “as
otherwise provided by law.” So, if a federal statute makes venue proper for
a particular claim in certain districts, that statute controls over the general
federal venue statute. See, e.g., Hodgson v. Gilmartin, 2006 WL 2707397
(E.D. Pa. Sept. 18, 2006). A number of federal statutes create federal claims
and, further, provide specific venue statutes for those claims. The problem
is that these statutes differ from the general federal venue statute, and some
of them replace its rules about proper venue — venue is proper only under
the specific statute — while others supplement it, allowing venue to be
proper under the general statute or the specific one. Because the scope of
those statutes is claim-specific, we'll not focus on them. They can create
problems that courts address by the doctrine of “pendent venue,” a point
will touch on next and also later on. See Chapter 23.

3. There Must be Proper Venue, or Pendent Venue,

Over Each Claim of a Plaintiff
Venue is determined on a claim-by-claim basis for each claim by a
plaintiff. Consequently, venue must be proper over each claim by a plaintiff
against each defendant. New York v. Cyco.net, Inc., 383 F. Supp. 2d 526,
543 (S.D.N.Y. 2005); Salpoglou v. Schlomo Widder, 899 F. Supp. 835, 839
(D. Mass. 1995). The fact that venue must be proper over each claim of a
plaintiff against a defendant is particularly important where one claim is
covered by a specific venue statute, and another is covered by the general
federal venue statute. For example, in Dobrick-Peirce v. Open Options, Inc.,
2006 WL 2089960 (W.D. Pa. 2006), in addition to two state law claims, the
plaintiff included a federal discrimination claim under Title VII. The court
held that venue was proper over the Title VII claim because Congress
included in Title VII a specific venue provision that was quite broad.
Nonetheless it recognized that the “fact that venue is proper for the Title
VII claim does not necessarily mean that venue is proper for the two tort
claims,” which were instead covered by the general federal venue statute,
and, more specifically, Section 1391(b). It then held that venue was
improper as to the two state law claims. Similarly, in PKWare v. Meade, 79
F. Supp. 2d 1007 (E.D. Wis. 2000), the court refused to allow pendent
venue where venue was based, not on the general federal statute, but on a
venue statute specific to patent infringement claims, 28 U.S.C. § 1400(b).
We'll see below how the Dobrick-Peirce court resolved this issue: it
transferred the entire case to a district where all of the claims could have
been brought. Sometimes, however, courts invoke a doctrine known as
“pendent venue” to accept venue over a any claim that is closely related to a
claim over which venue is proper. See Chapter 23.

Checkpoints

Can you identify the way in which venue is determined where the complaint contains a federal
claim? Contains only state law claims?
Do you know how to identify the “residence” of each type of party?
If venue is improper, what do you do? See Chapter 32.
Chapter 10

Removal: What Can the

Defendant do if the Plaintiff
Filed in State Court a Claim
over Which a Federal Court
Would Have Subject Matter
Jurisdiction?

Removal Roadmap
This chapter explains when it is proper for a defendant to move to remove to federal court a
case (not a claim, but the entire case) filed by a plaintiff in state court.
This chapter explains the procedure for a defendant to remove a case from state to federal
court.
This chapter also explains when and how a party can move the federal court to “remand”
some claims in, or the entire removed case, back to state court.

Nothing requires a plaintiff with a claim that exceeds $75,000 against a

diverse defendant to file that claim in federal court. Likewise, federal
subject matter jurisdiction statutes usually give state and federal courts
“concurrent” subject matter jurisdiction over federal claims, allowing a
federal claim to be filed in either state or federal court. Further, sometimes
plaintiffs mistakenly file in state court claims over which the federal courts
have exclusive subject matter jurisdiction (though such claims are rare).
Various circumstances could give a plaintiff an advantage in state court.
For example, sometimes it takes less time to get to trial in state court, or
sometimes state court judges, or the particular state court judge to whom
the case was assigned, are perceived as more “plaintiff friendly.” The
number of jurors may vary between state and federal court, and the pool
from which jurors are selected may also be different. These and other
factors can have a substantial impact on the perceived value of a case.
In short, choice of forum can matter greatly. That is why plaintiffs
sometimes file claims in state court that could be filed in federal court. If
the requirements for removal are present, the defendant can remove a case
state to federal court. Any time a case is filed in state court, defense counsel
must determine if the case is removable, and, if so, whether as a strategic
matter the case should be removed to federal court in order to deny the
plaintiff's choice of a state court forum. A defendant who removes a case
from state to federal court may severely reduce the settlement value, or
likely verdict, in a particular dispute.
One preliminary note: a plaintiff who files in state court may not remove
the case even after the defendant asserts a counterclaim in state court that is
removable. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941). The
plaintiff chose state court, and removal is determined from the complaint,
not the answer and counterclaims.

A. The Foundations of Removal

Suppose a plaintiff serves on a defendant process for a suit that the
plaintiff has filed in state court, and the complaint includes a federal claim
or a state claim between citizens of different states for more than $75,000.
Under those circumstances, the defendant may be able to remove the case
from state to federal court. The defendant must act quickly (generally
within 30 days of receipt of a paper that shows the case is removable, and,
where diversity is the basis of removal, there is a one-year bar that also
applies) by obtaining consent from all properly joined defendants to file a
notice of removal with the federal court for the district and division where
the state suit is filed, and also to notify the state court of the removal of the
case.
A plaintiff who believes that a case has been improperly removed to
federal court must file a motion to remand the case back to state court.
Unless the defect is subject matter jurisdiction, the plaintiff must file the
motion to remand within 30 days of removal. In some instances, only part
of the case — that is, some of the claims — will be remanded to state court.

B. When Is a Case Removable?

 A case may become removable at almost any time, but once it becomes
so, it is removable only for a limited time. There are two time limitations.
First, regardless of whether the case is removable because of the presence
of a diversity-type or federal question claim, the notice of removal must be
filed (a) within 30 days of service of the initial pleading if it shows that a
claim was removable; or (b) if not, within 30 days of receipt of a paper
showing it is removable. 28 U.S.C. § 1446(b)(1) & (3). As recently
amended, if there is more than one defendant, each defendant gets 30 days
from its receipt of a paper to remove, but consent from other defendants is
required, as discussed more fully below. For now, just note that a defendant
must look at the first pleading to see if there's a removable claim; if not, it
must monitor to see if it receives a paper that makes the case removable.
Either circumstance gives the defendant only 30 days to remove the case
from state to federal court.
Second, there is a one-year bar for removal based on diversity. If more
than one year has passed from filing the suit then, absent bad faith by the
plaintiff, a case cannot be removed unless a federal question has been
added. So, for example, if 13 months after filing suit, the plaintiff dismisses
a non-diverse defendant, or makes it clear that the amount in controversy in
a case with diversity exceeds $75,000, the case cannot be removed or, if
removed, should be remanded on motion of the plaintiff.

C. What Claims and Circumstances

Make a Case Removable?
Removability is determined by the pleadings at the time of removal.
Pullman Co. v. Jenkins, 305 U.S. 534, 537 (1939). Thus, often removal
turns on the allegations in the plaintiff's state court pleading (which can be
called a complaint, a petition, or some other name, but which essentially
serves the same purpose as does a complaint filed in federal court). A case
is removable if either:
the plaintiff's state court pleading asserts a claim that arises under
federal law (and so presents federal question subject matter
jurisdiction) or the plaintiff's state court pleading asserts a claim (a)
between citizens of different states but excluding the citizenship of any
“fraudulently joined” or fictitiously named defendants; (b) involves an
amount in controversy greater than $75,000; and (c) no properly
 joined and served defendant is a citizen of the forum state (again,
excluding the citizenship of any “fraudulently joined” or fictitious
defendants).
The complaint must contain at least one claim that either arises under
federal law or meets the narrower diversity-like requirements in the
removal statute. If there is one such claim, then the case may be removed
even if there are other claims that do not meet either requirement. We'll
discuss below what happens when a case is removed but has a claim (or
claims) that do not meet the requirements for removal. But cases are
removed, not claims.
Finally, removal must be considered in light of the policy against
removal: “In light of the congressional intent to restrict federal court
jurisdiction, as well as the importance of preserving the independence of
state governments, federal courts construe the removal statute narrowly,
resolving any doubts against removability.” Fed. Ins. Co. v. Tyoco Int'l,
Ltd., 2006 WL 728400 (S.D.N.Y. 2006). In addition, a defendant seeking to
remove a case bears the burden to establish that removal is proper. Boyer v.
Snap-on Tools Corp., 913 F.2d 108, 111 (3rd Cir. 1990). Likewise, all
disputed questions of law are resolved against the party seeking removal.
Burden v. Gen'l Dynamics Corp., 60 F.3d 212, 217 (5th Cir. 1995).
This chapter addresses only the general removal statutes. Other statutes
may allow certain defendants, such as governmental entities, to remove
under different circumstances.

1. Removal on the Basis of Federal Question

a. Single Federal Claim in a State Court
Complaint
As explained in Chapter 4, federal question subject matter jurisdiction
largely turns on the well-pleaded complaint rule, and, most of the time,
exists only if the plaintiff has pled a claim for relief created by a federal
statute. Those same principles apply to determine whether a complaint filed
in state court states a claim that arises under federal law. Here, this means
that a defendant generally cannot remove the case unless the federal claim
is in the complaint; there are limited exceptions such as preemption of state
law. However, those exceptions are quite narrow.
 b. Federal Claim Joined with Non-Removable
State Claim
in the State Court Complaint
If a state court pleading includes a federal question claim and a state law
claim “not within the original or supplemental jurisdiction of the district
court or a claim that has been nonremovable by statute,” then the entire case
can be removed “if the action would be removable without the inclusion of”
such claim(s). 28 U.S.C. § 1441(c)(1). Thus, if there is a removable federal
claim (in rare instances, a federal statute makes federal claims filed in state
court non-removable), then the entire case is removable even if there are
state law claims and no diversity, or state law claims that are outside 28
U.S.C. § 1367's grant of supplemental jurisdiction. Supplemental
jurisdiction exists over state law claims by a plaintiff if the state law claim
is part of the same “case or controversy” as the federal claim. Usually
courts will say that the federal claim is “separate and independent” from the
state claims, even though the statute no longer uses that language.
Once the case is removed, then the district court must sever and remand
those claims that are not (a) federal claims; (b) diverse claims; or (c) within
the scope of Section 1367. The net effect? State law claims that arise out of
the same case or controversy as the federal claim will remain in federal
court, as will any state law claims that were removable based upon their
own independent jurisdictional basis for removal.

2. Removal on the Existence of a Removal-Type

Diversity Claim
Congress chose not to allow cases to be removed even if there is
complete diversity and the amount in controversy is met. Instead, those
requirements must be met and no defendant properly joined and served can
be a citizen of the state in which the suit was filed. 28 U.S.C. § 1441(b)(2).
This is called the “no forum defendant rule.” Thus, it is clear that a case
may be removed if there is complete diversity, the amount in controversy
for the claim exceeds $75,000, and no defendant is a citizen of the forum
state. Because most states do not require pleading of citizenship, some
research may be required to determine whether a particular case meets these
criteria.
 But there are issues beyond the simple fact patterns. For example, it may
be that a state court pleading which, on its face, is not removable may in
fact be removable. This can happen in at least two ways.
First, removal maybe available even if the amount of damages sought by
the plaintiff is at or below $75,000. Suppose, for example, the plaintiff does
not plead an amount in controversy (it is not required by all state court
systems) or pleads an amount below $75,000. But, the facts are that in
reality much more than $75,000 is in controversy. That case may be
removable; otherwise, a plaintiff could have a million dollar claim but plead
an amount below $75,000 and avoid removal.
Second, a claim can be removable even without complete diversity, or
even if a named defendant is a citizen of the forum state. Suppose the
plaintiff joins more than one defendant, or joins one or more additional
parties as plaintiffs, and the additional party destroys complete diversity or
is a forum-defendant. But, in reality either (a) it does not appear that the
non-diverse plaintiff has any claim, or (b) the claim against the non-diverse
defendant is frivolous. If removal was not possible simply because the
plaintiff joined a non-diverse party, or a forum defendant, who had no real
claim or against whom no real relief would be sought, then plaintiffs could
easily make a case non-removable for those reasons.
To avoid gamesmanship, sometimes the defendant can remove cases
where either the amount in controversy does not seem satisfied or there is a
lack of complete diversity or a forum-state defendant is joined to the suit.
For these reasons, determining removability requires additional steps than
does analysis under the diversity statute. First, not every party's citizenship
necessarily counts. Specifically, if a party has been “fraudulently joined”
their citizenship does not count. Second, the amount in controversy must be
examined in a different manner than under the diversity statute. We turn to
these two steps next.

a. Citizenship of Fraudulently Joined

Defendants Is Ignored
In addition to ignoring “John Doe” defendants, 28 U.S.C. § 1441(b)(2),
the citizenship of defendants who are not “properly joined and served” is
ignored. This is called the “fraudulent joinder” doctrine. It is extremely
difficult to establish that a defendant's citizenship should be ignored
because that defendant has been “fraudulently” (or “improperly”) joined.
 This question — of whether the federal court should ignore the
citizenship of a defendant — typically gets litigated when a plaintiff moves
to remand a case to state court that the defendant previously removed. (See
below.) However, the defendant must examine these questions before
seeking to remove it: if the case is removable because of fraudulent joinder,
for example, the defendant must act promptly. Consequently, defense
counsel typically must look at the complaint when filed and, even if it does
not show on its face that the case is removable, must examine at that time
whether there's a reasonable basis for arguing that the citizenship of non-
diverse parties or a forum-state defendant should not count. If so, the
defendant can remove the case.
If the defendant removes the case, the question of whether the citizenship
of non-diverse or forum-state defendant should “count” will be determined
by the court, — but only if the plaintiff moves to remand the case back to
state court. Motions to remand are discussed below. To assess the
citizenship of parties for the purposes of removal, a district court is
permitted to look beyond the pleadings and examine affidavits and other
forms of evidence typically offered in summary judgment motions,
including deposition transcripts. Morris v. Princess Cruises, Inc., 236 F.3d
1061, 1067 (9th Cir. 2001).
There are two common types of fraudulent joinder, and a third type that
is less common. The first one is somewhat easy to detect and prove, and the
other two much more difficult on both counts. The easy one first.

i. Fraudulent Jurisdictional Allegations

Suppose a plaintiff alleges that a defendant shares citizenship with the
same state as the defendant, but it's simply incorrect or false: in fact, the
parties are diverse. Or the plaintiff alleges that one defendant is a citizen of
the forum, thus precluding removal. Under these circumstances, whether
the plaintiff made the allegations through fraud or simple mistake, the false
or incorrect allegations do not control. Triggs v. John Crump Toyota, Inc.,
154 F.3d 1284, 1287 (11th Cir. 1998). In the notice of removal (see below),
the defendant would by affidavit establish the true facts.

ii. No Possibility of Recovery

Suppose the plaintiff has joined a defendant who is a citizen of the same
state as the plaintiff or a forum-state resident, but against whom the plaintiff
has no possibility of recovery. If the citizenship of such defendants counted,
then a plaintiff could always destroy diversity jurisdiction by naming a non-
diverse defendant, albeit one from whom the plaintiff will never actually
recover a dime. A plaintiff's lawyer could sue his secretary if she was a
forum resident with the understanding he'd never actually pursue the claim,
and by doing so defeat removal. Plaintiffs' lawyers thought of this tactic,
and the courts reacted to the cries of “foul” from defense counsel,
eventually creating the doctrine of “fraudulent joinder.” Under that
doctrine, the citizenship of a defendant does not count if the removing party
establishes that it has been “fraudulently joined” to the suit.
To succeed in having the court ignore the citizenship of a defendant
under the doctrine of fraudulent joinder, the party seeking to must establish
by clear and convincing evidence that the plaintiff has no reasonable
possibility of recovering against that defendant. In re Rezulin Prods. Liab.
Litig, 133 F. Supp. 2d 272, 280 n.4 (S.D.N.Y. 2001). Although courts
sometimes state that the removing party must show there is “no possibility”
of recovering, obviously it cannot be taken that literally, since there's
always a possibility: it turns on a reasonable basis. Id. In addition, even
though the doctrine refers to fraudulent intent, the intent of the plaintiff is
irrelevant: what counts is whether there is no reasonable possibility of
recovering. Id. This is an extremely high standard. Whether a plaintiff has a
possibility of recovery turns on state substantive law — whether there is no
possibility the removal-defeating defendant could be liable to the plaintiff
for the claim pled.
The same circumstance can arise if the plaintiff joins another plaintiff,
who destroys diversity, but who clearly has no possibility of recovering
against the defendant. These cases are rarer, but as a general rule the courts
use the same approach for determining whether a diversity-defeating
plaintiff has been fraudulently joined as they do with diversity-defeating
defendants.

iii. Fraudulent Procedural “Misjoinder”

Suppose a plaintiff files a complaint in state court that includes a claim
against a defendant for breach of contract, and expressly states that it seeks
recovery for less than $75,000. On its face that claim is not removable. In
addition, however, the plaintiff joins with that non-removable claim an
unrelated claim against an unrelated defendant, and that claim presents a
federal question, or is a claim that meets the diversity requirements. Clearly,
that claim is removable.
Suppose the claim against the non-diverse defendant is one that the
plaintiff intends to pursue and has a reasonable shot of winning, and so it's
not fraudulently joined in the sense we just discussed, but the plaintiff has
pled in one state court pleading two completely unrelated claims. Is there
anything the diverse defendant can do, or does the citizenship of the other
defendant count since there is no fraudulent joinder. Notice that this claim
cannot be removed under Section 1441(c) because two parties are joined,
not two claims.
Some courts recognize a doctrine called “fraudulent misjoinder” or
“procedural misjoinder” that applies where the plaintiff names two or more
defendants in one suit but the claims against them do not arise out of the
same basic set of facts. The doctrine is aimed at efforts “to defeat removal
by joining together claims against two or more defendants where the
presence of one would defeat removal and where in reality there is no
sufficient factual nexus among the claims to satisfy the permissive joinder
standard.” Conk v. Richard & O'Neil LLP, 77 F. Supp. 2d 956, 971 (S.D.
Ind. 1999).
But, the fact that removability is strictly construed means that it is not
enough that the claims against two defendants are unrelated: instead, it must
be an “egregious” a case of joining together unrelated claims. How far apart
the claims must be from each other to be “egregious” is not clear. A. Kraus
& Son v. Benjamin Moore & Co., 2006 WL 1582193 (E.D.N.Y. 2006)
(collecting cases that conclude there's no clear definition of what is, and is
not, egregious enough). Some courts hold that there must be bad faith by
the plaintiff in joining the parties, not just “unrelated” claims. Coleman v.
Conseco, Inc., 238 F. Supp. 2d 804, 817 (S.D. Miss. 2004). Further, some
courts have reasoned that the fraudulent misjoinder should allow removal,
if at all, only to federal question claims joined with a separate and
independent state claim against a non-diverse defendant. See Bird v.
Carteret Mortgage Corp., 2007 WL 43551 (S.D. Ohio 2007). Finally, other
courts have rejected “fraudulent misjoinder” as not a proper basis to ignore
the citizenship of non-diverse defendants. E.g., Rutherford v. Merck & Co.,
428 F. Supp. 2d 842, 851 (S.D. Ill. 2006) (“whether viable state-law claims
have been misjoined — even egregiously — is a matter to be resolved by a
state court.”).
In sum, it is unclear when fraudulent misjoinder applies, if at all. If it
does, it may only permit federal courts to ignore the citizenship of non-
diverse parties where a federal question claim is egregiously joined with an
unrelated state claim against a removal-defeating defendant, or it may
permit those citizenships to be ignored in all cases of egregious joinder.

iv. The Trump Card: The No Forum-Defendant Rule

Since fraudulent joinder doctrines permit a court to ignore the citizenship
of some parties, in that respect removal is broader than diversity subject
matter jurisdiction. However, in one key respect removability is much
narrower than diversity subject matter jurisdiction: removal is improper if
any party properly joined and served as a defendant is a citizen of the state
where the suit is filed. 28 U.S.C. § 1441(b)(2). Thus, if suit is filed in Texas
state court, and a non-fraudulently joined defendant is a citizen of Texas,
the case cannot be removed, even if the plaintiff is from Illinois.
Why? The short answer: the statute says so. See id. (A claim that does not
arise under federal law “may not be removed if any of the parties in interest
properly joined and served as defendants is a citizen of the State in which
such action is brought.”)
Why does the statute say so? Remember that one reason for diversity
jurisdiction is that states were afraid that their citizens would be treated
unfairly if sued in the state courts of another state, so a federal forum was
viewed as neutral. Where the defendant is a citizen of the state, this concern
does not arise, and Congress reasoned that if one defendant was a citizen of
the forum state, that would reduce any bias such that the case should not be
removed given the impact on federal dockets and the intrusion by federal
courts into deciding matters of state law that occurs when a case is
removed. Again, though, the citizenship of a fraudulently joined defendant
does not count. See above. A forum-defendant who is fraudulently joined
does not prevent removal.
Finally, courts split on whether the forum-defendant rule is procedural,
not jurisdictional. If it is merely a procedural requirement that no forum-
defendant be present, then the failure to raise the issue as a basis to remand
can waive it. If it is jurisdictional, then a party cannot waive it. In those
jurisdictions where the presence of a forum defendant is merely procedural,
a plaintiff must move to remand a case within 30 days, or the objection is
waived.
 b. Determining the Amount in Controversy
Various issues can arise concerning the amount in controversy
requirement. The general rule is that the “sum demanded in good faith in
the initial pleading shall be deemed to be the amount in controversy . . . .”
28 U.S.C. § 1446(c)(2). So, if the plaintiff pleads in the state court pleading
that the amount in controversy exceeds $75,000, then obviously the amount
in controversy requirement is satisfied. S.W.S. Erectors, Inc. v. Infax, Inc.,
72 F.3d 489, 492 (5th Cir. 1996).
What, however, if the plaintiff pleads no specific amount (not all court
systems require pleading an amount in controversy), or expressly pleads
that the amount in controversy is less than $75,000? What if the plaintiff
seeks injunctive relief, and not money damages? We'll now explore those
issues.

i. Plaintiff Pleads no Specific Amount

If the plaintiff has pled no specific amount in its state court pleading, the
defendant in the notice of removal must aver that it exceeds $75,000 and
the if that is contested, the defendant must establish by preponderant
evidence that the amount in controversy exceeds $75,000. 28 U.S.C. §
1441(c)(2). How can the defendant do this? Among other things the
defendant may rely on: (i) an estimate of the potential damages from the
allegations in the complaint; (ii) other documentation to provide a basis for
determining the amount in controversy, such as interrogatories obtained in
the state court before removal, affidavits, or other evidence submitted in
federal court afterward; and (iii) the plaintiff's proposed settlement amount
if it appears to reflect a reasonable estimate of the plaintiff's claim, because
the plaintiff's own estimation of its claim is a proper means of supporting
the allegations in the notice of removal. Aguayo v. AMCO Ins. Co., 59 F.
Supp. 3d 1225, 1243 (D.N.M. 2014).

ii. Plaintiff Pleads Less Than $75,000 in its State Court

Pleading
If the plaintiff expressly pleads in state court pleading an amount less
than $75,000 is in controversy, the defendant can still remove the case if the
state court from which removal is taken permits plaintiffs to recover more
than the amount pled and the defendant (through procedures similar to
those above) establishes that more than $75,000 is in play in the suit. 28
U.S.C. 1441(c)(2)(A)(ii).
The plaintiff can move to remand the case. The plaintiff can still show in
its motion to remand that the defendant has not carried its burden. De
Aguilar v. Boeing Co., 47 F.3d 1404, 1412 (5th Cir. 1995). The plaintiff can
do this either by (1) showing that state law that prohibits recovering more
than $75,000 or (2) filing a binding stipulation or agreement with their state
court complaint that precludes recovery in excess of $75,000. See id. If
you're following this, you realize that the plaintiff in seeking to remand the
case back to state court will be arguing that it's entitled to recover less than
the defendant says it is. “We recognize that requiring a defendant to show to
a legal certainty that the amount in controversy exceeds the statutory
minimum may lead to somewhat bizarre situations.” Samuel-Bassett v. KIA
Motors Am., Inc., 357 F.3d 392, 398 (3rd Cir. 2004).

iii. Plaintiff Seeks Injunctive Relief

What if the plaintiff only seeks injunctive relief? The defendant may state
the value in its notice of removal, and the question becomes whether the
cost, benefit, or either or both of those of complying with the injunction
exceeds $75,000. See 28 U.S.C. § 1441(2)(c)(A)(i). For example, the Tenth
Circuit follows what is called the “either viewpoint rule” which considers
either the value to the plaintiff or the cost to defendant of relief as the
measure of the amount in controversy. Justice v. Atchison, Topeka and
Santa Fe Ry. Co., 927 F.2d 503, 505 (10th Cir. 1991). Some courts rely only
on the cost to the defendant, and others the value of the injunction to the
plaintiff. See id.

D. Deadlines, Waiver by Conduct,

and Procedure for Removal
1. Deadlines
As noted above, there are two deadlines: a 30-day deadline runs from the
date that the case becomes removable; the other, a one-year deadline, from
the date the case is filed in state court.

a. The 30-Day Deadline

As a general rule, a defendant has 30 days from the day it receives a
paper showing a case is removable. That paper may be the first pleading
served by the plaintiff, or something received later. So, if the initial
complaint is removable, the defendants have 30 days within receipt of it
“through service or otherwise” to act. 28 U.S.C. § 1446(b)(1). If the initial
complaint was not removable, but the defendant later “receives” a “paper”
showing the case is removable (e.g., an answer to an interrogatory or an
amended complaint), the 30 days runs from “receipt by the defendant,
through service or otherwise” of that paper. 28 U.S.C. § 1446(c)(3). But if
the initial pleading was removable, once thirty days have passed, the case is
not removable even if some “new” basis for removal arises in a “paper.”

i. Initial Pleading: What Is “Receipt Through Service

or Otherwise”?
For a while, it was unclear what constituted receipt of a state court
pleading “through service or otherwise.” (Chapter 25 discusses what service
is, but with respect to a complaint, service essentially means some sort of
formal and memorialized delivery of summons and the complaint.)
Suppose, for example, that the plaintiff did not formally serve the pleading,
but simply faxed it to the defendant. For a long time, it was unclear whether
receipt, without formal service, counted. The Supreme Court answered that
question in 1999: the 30-day deadline for removal begins once a defendant
is formally served with the summons and complaint, and not a “mere
receipt of the complaint unattended by any formal service.” Murphy Bros.,
Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 348 (1999). In addition,
the last clause of the first paragraph of § 1446(b) makes it clear that, if the
state does not require that the complaint be served with the summons, then
the 30 days runs from the date the summons or complaint was served,
whichever is shorter. Id. Thus, if state law requires formal service of the
summons and complaint, the 30-day deadline begins to run only when that
occurs; otherwise it runs from service of summons or the complaint.
As we saw, removability turns on whether there is a federal question or a
diversity claim without a forum-defendant. A state court complaint may
state a federal claim, or one between citizens of different states without a
forum state defendant and for an amount exceeding $75,000. In either case,
the 30-day window begins to run. Similarly, the state court pleading may
show that the non-diverse or forum-defendant has been fraudulently joined.
Again, the 30-day deadline begins to run at that point if the defendant learns
that the plaintiff has no reasonable possibility of recovering against a
defendant whose joinder defeats removability.
A common problem is how to determine when the 30 days begins to run
when there are multiple defendants: suppose one defendant is served with
the complaint on January 1; a second on January 29; and the third on
February 14. Does each defendant get 30 days, or does the 30 days begin to
run when the first defendant is served, in which case here the second-served
defendant has a day to act, and the third defendant has no opportunity to
remove?
The courts had split but Congress clarified the issue in 2011. Under §
1446(b)(2(B), each defendant has 30 days from receipt or service of the
initial complaint to file a notice of removal, and if defendants are served at
different times, “and a later-served defendant files a notice of removal, any
earlier-served defendant may consent to the removal even though that
earlier-served defendant” had not tried to remove the case. 28 U.S.C. §
1446(b)(2)(B) & (C).

ii. Subsequent Papers: “Receipt”

Even if the initial pleading is not removable, subsequent papers received
by the defendant may make the case removable. A “paper” can be a lot of
things, some of which we have not studied yet, and the meaning of which
you won't fully grasp until later. This is a non-exclusive list of post-filing
papers that have been held to satisfy the “paper” requirement and thus
render the case removable within 30 days of receipt:

An amended pleading served by the plaintiff that makes the case removable
by dismissing claims against the non-diverse defendants or adding a federal
question;
A demand letter from the plaintiff that shows that the amount in controversy
exceeds $75,000;
An interrogatory answer from the plaintiff revealing that the case is
removable (because, for example, it reveals that citizenship is diverse or the
amount exceeds $75,000); or
The taking of a deposition (as opposed to receiving the transcript of it)
revealing the case is removable.

See generally, Norris v. Wal-Mart Stores, Inc., 2006 WL 1476045 (W.D. La.
2006). Put simply, “paper” is generally broadly construed.
 First, a defendant cannot rely on a paper it received prior to filing suit to
argue that a case that was not initially removable became removable later.
In general, papers received prior to filing of the suit do not count in
determining whether a case subsequent to filing became removable. At
most, pre-filing papers may show that the amount in controversy does, in
fact, exceed $75,000, but a defendant cannot use a paper that it received
before suit was filed to show that the suit has “later” become removable.
In that regard, remember that if the case was removable when the initial
pleading was received, the defendant had 30 days to remove it. This
principle simply prevents a defendant from arguing that information it had
when it received the initial pleading only counted later.
Second, a paper that results from an involuntary act of the plaintiff does
not count. What's that mean? If a plaintiff serves an amended state court
complaint that adds a federal question, or voluntarily dismisses all claims
against the non-diverse defendant, or amends its state court complaint to
specifically state the amount in controversy exceeds $75,000, then the
plaintiff acted voluntarily. Those acts count, and when the defendant
receives the paper showing them, then the 30-day period is triggered.
In contrast, though, suppose the non-diverse defendant moves to dismiss
the claim against it, or moves for summary judgment on the claim against
it, and the district court grants that motion, leaving only diverse parties in
the suit. Can they remove? No, because the action was not a voluntary one
by the plaintiff. The voluntary-involuntary principle holds that only a
voluntary action by the plaintiff, such as the voluntary dismissal of a
diversity-defeating defendant, can make a case removable. See Great N. Ry.
Co. v. Alexander, 246 U.S. 276, 281 (1918) (“[C]onversion [of an action
from nonremovable to removable in diversity] can only be accomplished . .
. where the case is not removable because of joinder of defendants, by the
voluntary dismissal or nonsuit by [a plaintiff] of a party or of parties
defendant.”); Poulos v. Naas Foods, Inc., 959 F.2d 69, 71–72 (7th Cir.1992)
( “[C]ases with non-diverse parties [do] not become removable just because
a non-diverse defendant [is] dismissed from the case. . . . Instead, . . . such
suits [are] removable only if the plaintiff voluntarily dismissed a non-
diverse defendant.”).
There are two policies served by the voluntary-involuntary rule, one
practical, and one quite fundamental.
As a practical matter, the fact that the non-diverse defendant manages to
get the claim against it dismissed does not mean state court action against
that defendant is over. For example, the plaintiff could appeal the state
court's dismissal of the non-diverse defendant. “An involuntary dismissal of
[a] non-diverse party in a state court action should not lead to removal of
the action to federal court if the complete diversity just created by the
dismissal might be destroyed by an appeal and reversal of the state court's
decision.” Atlanta Shipping Corp. v. International Modular Hous., Inc., 547
F. Supp. 1356, 1360 n. 8 (S.D.N.Y.1982). But if the plaintiff voluntarily
dismisses the claims, it cannot appeal them, and so finality does occur.
Burke v. General Motors Corp., 492 F. Supp. 506, 508 (N.D. Ala.1980) (the
voluntary-involuntary rule “is premised upon the assumption that voluntary
actions of the plaintiff which remove a party from a case are final” and thus
not subject to reversal on appeal so as to divest a federal court of
jurisdiction on removal); Ennis v. Queen Ins. Co. of Am., 364 F. Supp. 964,
966 (W.D. Tenn. 1973) (“The reason for the ‘voluntary dismissal’ rule is
based on judicial efficiency. The voluntary dismissal of a resident defendant
is not appealable. Such a dismissal finally determines who are the parties to
the action in a state court proceeding immediately prior to removal to a
federal court. The involuntary dismissal of a resident defendant, however, is
appealable. Thus, an involuntary dismissal would involve the possibility of
duplication and expense of an appeal being heard in state courts and the
same proceeding being before the federal courts at the same time, if such a
case could be removed to the federal courts.”).
The rule that only voluntary acts of the plaintiff count also has a broad,
fundamental purpose: it protects the plaintiff's right to choose the forum.
The more fundamental purpose of the voluntary-involuntary rule is “to
protect plaintiff's choice of forum as long as [the plaintiff] wants it
protected.” Ford Motor Credit Co. v. Aaron-Lincoln Mercury, 563 F. Supp.
1108, 1117 (N.D. Ill. 1983). See also Ushman v. Sterling Drug, Inc., 681 F.
Supp. 1331, 1337 (C.D. Ill.1988) (“the purpose of the rule is to protect
plaintiff's forum”); Jenkins v. National Union Fire Ins. Co. of Pa., 650 F.
Supp. 609, 614 (N.D. Ga. 1986) (“What emerges from an examination of
the Supreme Court cases on the voluntary-involuntary rule is the conclusion
that the rule is not based upon an appealability/finality rationale but upon a
policy of favoring the plaintiff's power to determine the removability of his
case.”).

b. One-Year Deadline for Diversity-Type

 Removal
The second deadline only applies to diversity-type removal. A case that
has been on file for more than one year cannot be removed, even if the
defendant receives a paper showing the case has become removable, if the
basis for federal subject matter jurisdiction after removal is diversity. Under
Section 1446(c), unless the plaintiff has acted in bad faith to prevent
removal, a case may not be removed on the basis of diversity jurisdiction
“more than 1 year after commencement of the action . . . .”
What is bad faith? The statute specifically states that it includes the
plaintiff deliberately failing to disclose the actual amount in controversy to
prevent removal. 28 U.S.C. 1446(c)(3)(B). Beyond that, the law in this area
is just developing. Courts have stated, however, that bad faith can be
ferreted out by this two-part test:
First, the Court inquires whether the plaintiff actively litigated against
the removal spoiler in state court: asserting valid claims, taking
discovery, negotiating settlement, seeking default judgments if the
defendant does not answer the complaint, et cetera. Failure to actively
litigate against the removal spoiler will be deemed bad faith; actively
litigating against the removal spoiler, however, will create a rebuttable
presumption of good faith. Second, the defendant may attempt to rebut
this presumption with evidence already in the defendant's possession
that establishes that, despite the plaintiff's active litigation against the
removal spoiler, the plaintiff would not have named the removal
spoiler or would have dropped the spoiler before the one-year mark
but for the plaintiff's desire to keep the case in state court. The
defendant may introduce direct evidence of the plaintiff's bad faith at
this stage — e.g., electronic mail transmissions in which the plaintiff
states that he or she is only keeping the removal spoiler joined to
defeat removal — but will not receive discovery or an evidentiary
hearing in federal court to obtain such evidence.
Aguayo v. AMCO Ins. Co., 59 F. Supp. 3d 1225, 1262-63 (D.N.M. 2014).
Absent bad faith, however, removal based upon diversity becomes barred
one year after commencement of the action, even if the paper initially
showing the case is removable on that grounds comes on the 366th day of
the case. Again, the one-year bar does not apply to removal based upon
federal question; but the 30-day deadline does.
2. Waiver by Conduct of Right to Remove
In addition to the 30-day and one-year deadlines, a defendant can waive
its right to remove a case by defending the merits of the suit in state court.
To determine whether a defendant has by conduct waived the right to
remove, the court must examine “whether the actions taken by the
defendant in state court were for the purpose of preserving the status quo,”
or whether they manifested “an intent to litigate on the merits in state
court.” Haynes v. Gasoline Marketers, Inc., 184 F.R.D. 414, 416 (M.D. Ala.
1999); see Beighley v. Federal Deposit Ins. Corp., 868 F.2d 776, 782 (5th
Cir.1989) (The “right of removal is not lost by action in the state court short
of proceeding to an adjudication on the merits.”). Defendants' acts must
express “clear and unequivocal intent to waive the right to remove.” Id.
Waiver has been found, for example, in these circumstances:

The defendant had agreed in the contract in suit that any dispute would be
filed in state court;
The defendant filed a motion to dismiss in state court and sought a hearing
on the motion;
The defendant moved in the state court to transfer venue;
The defendant filed a motion for summary judgment; or
The defendant files permissive counterclaims or other claims.

See, e.g., Johnson v. Heublein Inc., 227 F.3d 236 (5th Cir. 2000) (motion to
dismiss and summary judgment filed in state court); Moore v. Permanente
Med. Group, Inc., 981 F.2d 443 (9th Cir. 1992) (state court motion to
transfer venue); Global Satellite Commun. Co. v. Starmill U.K. Ltd., 378
F.3d 1269 (11th Cir. 2004) (contractual forum selection clause).
On the other hand, courts have found no waiver where the defendant only
filed an answer with affirmative defenses. See Miami Herald Pub. Co. Div.
of Knight-Ridder Newspapers, Inc. v. Ferre, 606 F. Supp. 122
(S.D.Fla.1984) (filing answer and affirmative defenses not clear intent to
waive removal rights); Rose v. Giamatti, 721 F. Supp. 906, 922 (S.D. Ohio
1989) (no clear intent to litigate in state court where defendant sought
discovery for an appeal of a temporary restraining order).
Obviously, a defendant who wants to remove should engage in as little
conduct in state court as is possible before filing the notice of removal.
3. Procedure for Removal
a. Consent of All Properly Joined and Served
Defendants
If there is more than one defendant, then Section 1446(b)(2)(A) generally
requires that each defendant consents or join in the notice of removal. If one
properly served and joined defendant refuses to consent, then removal is
improper and, if the plaintiff seeks remand, the case should be remanded,
unless the defendant who failed to join or consent falls within an exception.
Doe v. Kerwood, 969 F.2d 165, 167 (5th Cir. 1992).
The exceptions are narrow, however. Specifically, consent is not required
from a defendant who: (1) was fraudulently joined; (2) is a “Doe” or
nominal defendant; or (3) was not served at the time of the filing of the
notice of removal. See id. In addition, statutes give certain defendants or
foreign sovereigns the right to remove even if other defendants do not
consent.
Consent may be indicated either by having counsel for each defendant
sign the notice of removal (discussed next) or by filing with the federal
district court a separate document evidencing the defendant's consent to
removal. Each defendant must comply with the 30-day deadline, or removal
is untimely.
For example, in McCurtain County Production Corp. v. Cowett, 482 F.
Supp. 809 (E.D. Okla. 1978), several defendants were sued in state court,
but only defendant Deere signed the notice of removal. The plaintiff moved
to remand, but Deere argued that consent of the other defendants was not
necessary because the court lacked personal jurisdiction over them. The
district court remanded to state court because none of the exceptions
applied. It also emphasized that a party who removes a case to federal court
does not waive any objection, including one that the court lacks personal
jurisdiction. Id.
Significantly, nothing prevents a defendant from removing before anyone
is served. If a defendant files notice of removal before anyone is served, can
the case be removed even if there is a forum defendant (obviously, if there
is no diversity or federal question, the case has to be dismissed). The courts
split on this question. Perhaps a majority of courts hold that the statute
permits removal as long as no in-state defendant has been served. In that
regard, many courts have held that a non-forum defendant can remove
before service of any forum-defendant. See, e.g., Regal Stone Ltd. v. Longs
Drug Stores California LLC, 881 F. Supp. 2d 1123 (N.D. Cal. 2012). That
approach abrogates the “no forum defendant” rule.

b. Required Filings
The defendant must file with the federal district court for the district in
which the state court sits a notice of removal with certain attachments., and
serve it on all parties. The notice of removal must be “signed pursuant to
Rule 11 of the Federal Rules of Civil Procedure” and must contain “a short
and plain statement of the grounds for removal.” 28 U.S.C. § 1446(a). The
notice must also attach as exhibits any “process, pleadings, and orders
served upon such defendant or defendants” while the matter was pending in
state court. Id. The removing party's lawyer must also file the notice,
without attachments, in state court to notify the state court that it has lost
jurisdiction over the case. The receipt by the state court of the notice of
notice of removal ends its power over the case.

E. Plaintiff's Motion to Remand to State

Court
Section 1447(c) provides a time frame for raising certain objections to
removal, while allowing lack of subject matter jurisdiction to be raised at
any time:
A motion to remand the case on the basis of any defect other than lack
of subject matter jurisdiction must be made within 30 days after the
filing of the notice of removal under section 1446(a). If at any time
before final judgment it appears that the district court lacks subject
matter jurisdiction, the case shall be remanded. . . .
Within the first 30 days after removal, then, a case can be remanded for a
variety of reasons, all of which are conditions of removal or of subject
matter jurisdiction:

There is no diversity jurisdiction, either because of citizenship or lack of

sufficient amount in controversy;
A defendant is a citizen of the forum state in diversity;
There is no federal question under the well-pleaded complaint rule;
The notice of removal was not filed within 30 days;
The notice of removal was filed more than one year after the state case was
filed and jurisdiction is based on diversity, and plaintiff did not act in bad
faith;
An involuntary act of plaintiff created removability;
All defendants did not consent; or
The defendant waived its right to remove by conduct in the state court.

If the motion to remand is based upon anything other than lack of subject
matter jurisdiction, the plaintiff must file it within 30 days of removal. 28
U.S.C. § 1447(c). Thus, for example, if a defendant removes a case even
though one defendant is a citizen of the forum state, if the plaintiff does not
seek to remand within 30 days, that objection is waived. Hurley v. Motor
Coach Indus., Inc., 222 F.3d 377, 380 (7th Cir. 2000). Put another way,
subsection (c) limits the ability of district courts to remand cases: remand
can only be made for “defects other than lack of subject matter jurisdiction”
during the first 30 days; after that time, only the lack of subject matter
jurisdiction permits remand. Lively v. Wild Oats Markets, Inc., 456 F.3d
933, 937 (9th Cir. 2006).

1. Attorneys' Fees and Costs

A plaintiff who succeeds in remanding a case to state court may move the
federal court to award it the costs and attorneys' fees it incurred in having
done so. Specifically, § 1447(c) gives district courts that decide to remand a
case to state court discretion to “require payment of just costs and any
actual expenses, including attorney fees, incurred as a result of the
removal.” See also Valdes v. Wal-Mart Stores, Inc., 199 F.3d 290, 293 (5th
Cir. 2000) (district court's decision under Section 1447(c) is reviewed for
abuse of discretion).
An award is not automatic. Essentially, whether costs and expenses
should be awarded to a plaintiff who succeeds in having a case remanded
turns on the reasonableness of the defendant's removal. Absent “unusual
circumstances,” if the removing party had an objectively reasonable basis
for seeking removal, then an award should be denied. Martin v. Franklin
Capital Corp., 546 U.S. 132 (2005).
 F. Removed or Remanded: What Next?
Once removed, litigation in the state court is automatically stayed. The
Rules apply once a case is removed. Rule 81(c). The time for the defendant
to file an answer (or move under Rule 12, see Chapter 29), if it did not
answer in state court, is 20 days after it received the state court pleading, or
5 days after it filed the notice of removal, whichever is longer. Rule 81(c).
If the plaintiff's motion to remand is granted by the district court, then the
case is returned to the state court for adjudication. State rules govern from
that point onward. A federal district court may only either keep the case or
remand it to state court; it may not dismiss the case. Bromwell v. Mich. Mut.
Ins. Co., 115 F.3d 208, 214 (3rd Cir. 1997).

G. Post-Removal Actions That Destroy

or Create Subject Matter Jurisdiction
Suppose after the case is properly removed, the plaintiff seeks to join to
the suit a non-diverse defendant, or one against whom it does not seek more
than $75,000. What then? Section 1447(e) answers this question:
If after removal the plaintiff seeks to join additional defendants whose
joinder would destroy subject matter jurisdiction, the court may deny
joinder, or permit joinder and remand the action to the State court.
If the district court concludes that the non-diverse defendant is an
“indispensable party” in terms of Rule 19, see Chapters 17 and 35, then it
must allow joinder of the defendant and remand the case. Steel Valley Auth.
v. Union Switch & Signal Div., 809 F.2d 1006, 1010–11 (3d. Cir.1987)
(“[W]hen a nondiverse party is added to a federal proceeding and that
party's presence is indispensable to the furnishing of complete relief,
remand is mandated where federal subject matter jurisdiction depends on
diversity jurisdiction, even though removal was originally proper.”).
If, however, the defendant is not indispensable in terms of Rule 19, then
the court has discretion on how to proceed. In determining whether to allow
the amendment, “the court should examine the following factors: (1) the
extent to which the purpose of the amendment is to defeat federal
jurisdiction, (2) whether the plaintiff has been dilatory in asking for the
amendment, (3) whether the plaintiff will be significantly injured if the
amendment is not allowed, and (4) any other factors bearing on the
equities.” Weathington v. United Behavioral Health, 41 F. Supp. 2d 1315,
1318 (M.D. Ala. 1999).
The opposite facts also raise an interesting question. What happens if the
plaintiff's motion to remand is incorrectly denied, but before the case goes
to final judgment in federal court the non-diverse party is dismissed, and so
the court “then” has subject matter jurisdiction? In Caterpillar Inc. v. Lewis,
519 U.S. 61 (1996), the defendants removed the case even though complete
diversity was lacking, but before the case was tried the non-diverse
defendants settled and were dismissed as parties. The court held that so
long as the federal court had subject matter jurisdiction at the time of
judgment, it did not need to remand the case to state court. The court found
as the “overriding considerations” of “finality, efficiency, and economy”
were “overwhelming” since the case had been tried to verdict.

H. Limited Appealability of Orders

Granting or Denying Remand
Congress has almost eliminated appeals of orders granting or denying
motions to remand cases to state court, at least before a final judgment is
entered in the case. Unless an interlocutory appeal is allowed, in other
words, any error in keeping a case in federal court must await final
judgment, and any error in remanding a case will not be examined by an
appellate court.

1. Orders Granting Remand

With very narrow exceptions, an order granting remand cannot be
appealed. Thus, even if the district court erroneously concludes that it lacks
subject matter jurisdiction, appellate review is unavailable. “The policy of
Congress opposes ‘interruption of the litigation of the merits of a removed
cause by prolonged litigation of questions of the jurisdiction of the district
court to which the cause is removed.’” Kircher v. Putnam Funds Trust, 126
S.Ct. 2145, 2152 (2006) (quoting U.S. v. Rice, 327 U.S. 742, 751 (1946)).
As a result, attempts to obtain appellate review through interlocutory
appeals and mandamus (see Chapter 57), have failed. See In re Briscoe, 448
F.3d 201, 216 (3rd Cir. 2006) (noting that the Supreme Court long ago
“rejected the general availability of mandamus as a means of reviewing the
actions of a district court in denying a motion to remand a case of the state
court from which it had been removed.”).

2. Orders Denying Remand

An order denying a motion to remand cannot be appealed until after any
final judgment is entered. Caterpillar Inc. v. Lewis, 519 U.S. 61, 74 (1996).
Nor is mandamus available. In re Briscoe, 448 F.3d at 216. See Chapter 57.

I. Removal by Parties Other Than

Defendants
As noted above, a plaintiff cannot remove a case even if the defendant
asserts a compulsory counterclaim that arises under federal law or is
between citizens of different states with an amount in controversy
exceeding $75,000. A counterclaim cannot be the basis of federal
jurisdiction. Holmes Group, Inc. v. Vornado Air Circulation Sys., 535 U.S.
826, 830 (2002).
In Chapter 17 we will examine impleader under Rule 14(a). Essentially,
impleader allows a party that has been sued to join to the suit a non-party
who may be liable to that party if it is liable on the claim asserted against it.
A defendant, typically, can “implead” a non-party where that non-party
owes contribution or indemnity to the defendant on the claim asserted
against it. The defendant is called a “third-party plaintiff” and the party it
sues, the “third-party defendant.”
May a third-party defendant who is joined under state versions of Rule
14(a) remove a case? The majority of the courts limit the right to remove to
“defendants,” not third-party defendants. See Foster Poultry Farms, Inc. v.
Int'l Bus. Mach. Corp., 2006 WL 2769944 (E.D. Cal. 2006) (collecting
cases on the split).

Checkpoints

Can you describe the time frames for removal, both how long and when the clock starts to run?
Can you describe when a federal claim is removable? When a case with state law claims is
removable? Why non-removable claims can be removed if they relate to a federal question?
Can you define when a defendant will be deemed to be “fraudulently joined” and the consequences
of that conclusion?
Do you know how to determine the amount in controversy for removal?
Do you understand the procedure for removing a case, and seeking remand?
 Part B

Judicial Resolution of (1)

Personal and Subject
Matter Jurisdiction and Venue;
(2) the Merits of a Dispute
Without
Discovery, with Discovery but
Without Trial,
and only After Discovery and
Trial; and
(3) Appeals
Chapter 11
 A Preview of Part B
of This Book
Part A of this book addressed the three requirements for a claim to be
properly filed by one party against another in federal court: subject matter
jurisdiction, personal jurisdiction, and venue. It also described how a
defendant can remove a case from state to federal court. We thus know
what a plaintiff must do to file a case in federal court, and what a defendant
can do if the plaintiff files, in state court, a case that can be removed to
federal court. It is important to bear in mind that — except for a very few
federal claims which have exclusive federal subject matter jurisdiction (like
patents, for example) — the plaintiff can choose state court, and — again
absent those few claims — the defendant can leave the case in state court.
Which system either party would want the case to be in is a matter of
strategy that turns on the facts. Choice of court system is not, usually,
driven by the law.
Part B of this book addresses how a plaintiff starts a lawsuit by filing a
complaint in federal court. It explains how plaintiff's counsel drafts a
complaint that asserts at least one claim and complies with the Rules'
requirements for investigating, filing, serving, and properly formatting a
pleading. It then turns to how defense counsel responds to that complaint,
including the requirements that defense counsel investigate before
responding to the complaint, and the various options that defense counsel
may have.
After that, we'll return to what Chapter 1 emphasized: it's common for a
party to have multiple claims that arise out of the same basic set of facts.
The same set of facts that create a breach of contract claim might, for
example, present a fraud or negligent misrepresentation claim. The same set
of facts that demonstrate a federal employment law claim might also
support a state law claim for intentional infliction of emotional distress.
How do you analyze the joinder of an additional claim in the complaint or
the assertion of a claim by the defendant, or even the joinder of a party by a
plaintiff (say, another plaintiff or another defendant) or the defendant (can a
defendant even join parties?). This Part of this book answers these
questions as well.
Admittedly those topics fit nowhere perfectly. Let me explain to you why
I, after a lot of thought and after using several other organizational
structures, put it here. It'll help you to understand the next part of this book
(or whatever part of your course you're covering this in) as something other
than esoteric abstractions.
Some civil procedure casebooks, and some courses, go all the way
through the course or book using a one-plaintiff-versus-one-defendant-with-
one-claim before turning to cases involving multiple claims, multiple
parties, or both. I have found it confuses a many students to wait to study
joinder of claims and parties. For example, we've seen that diversity subject
matter jurisdiction requires both “complete diversity” and more than
$75,000 “in controversy.” That's only half the story, however, because
another statute, Section 1367, creates numerous exceptions to that rule.
Likewise, we have seen that “pendent venue” and “pendent personal
jurisdiction” perform roles similar to supplemental subject matter
jurisdiction, when there is a federal statute authorizing nationwide service
of process over a federal claim with “tag along” state law claims.
More fundamentally, a lawyer investigating whether a suit can be filed in
federal court, or whether one can be structured to prevent removal to
federal court, or removed from state court, or whether a suit has properly
been filed in federal court, almost invariably must consider the impact of
the federal joinder rules and the supplemental jurisdictional statute.
Likewise, many suits involve multiple claims, and a significant number
involve multiple parties, and a substantial number involve both.
Consequently, a lawyer must consider the joinder rules at the outset of a
lawsuit, not at its end. I think you will learn this subject better if you learn
the issues in the context in which they arise, and not in an artificial one.
Having said that, though, this book is structured to work no matter how
your professor teaches the course. If you get to the joinder rules covered in
Part B of this book at the end of the course, read it then, but if you're
reading this near the end of your course, when you've studied pretty much
all of the subjects, I'd tackle it in the order it's presented here. I think it
makes more sense that way.
Chapter 12

The Plaintiff's Pre-Suit

Investigation Required
by Rule 11

Plaintiff's Pre-Suit Investigation Roadmap

This chapter explains why plaintiff's counsel is required to investigate the law and facts
prior to filing a lawsuit in federal court.

Rule 11 is in the background of virtually all aspects of civil lawsuits

(except for discovery, where other rules control sanctions. See Chapter 51.)
Even before a lawsuit is filed, Rule 11 comes into play since it requires
plaintiff's counsel to investigate the legal and factual merits of the
anticipated litigation, both substantive (e.g., does the plaintiff have a
reasonable basis to sue someone?) and procedural (e.g., can this case be
filed in federal court?).
If the plaintiff violates Rule 11, then in response to the filing of the
complaint, a defendant can seek sanctions. This chapter describes what
Rule 11 requires of plaintiffs' counsel before suit is filed. Chapter 37
analyzes obligation of defense counsel in drafting an answer or other
response, and also completes the discussion of how Rule 11 motions are
adjudicated.

A. The Purpose of Rule 11 Is to

Eliminate
Frivolous Legal and Factual Assertions
in Filed Court Papers
 “The central purpose of Rule 11 is to deter baseless filings in district
court and thus . . . streamline the administration and procedure of the
federal courts.” Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 393
(1990). It does this by requiring litigants to certify that papers filed with the
court are well founded both in fact and in law. Bus. Guides, Inc. v.
Chromatic Communs. Enterp., Inc., 498 U.S. 533, 542 (1991). That means
that, before filing a complaint a plaintiff must investigate both the law and
the facts supporting the complaint.
Rule 11 may at first seem counter-intuitive if have heard much of the
“duty of zealous advocacy” and a lawyer's obligation to put a client's
interests ahead of all others. Rule 11 limits a lawyer's ability to zealously
represent a client by permitting courts to impose monetary and other
sanctions if, boiled down, counsel makes a “frivolous” legal argument or
assertion of fact. The Rule in effect penalizes lawyers who go too far in
representing their clients. But, we'll see that they have to go way too far to
be sanctioned under Rule 11.

B. Every Document Signed and Filed

with a Court, Including the Complaint,
Is Covered by Rule 11
Every document filed with a court must be signed. Specifically, Rule 11
requires that at least one attorney or, in pro se cases, the party, sign each
document filed with the district court. FRCP 11(a). In addition to being
signed, the paper must state the signer's address and telephone number. The
court should strike papers filed without signature, unless promptly
corrected. Id. The requirement that a document be signed is broad and
inclusive. See Chapter 38. It clearly covers a complaint. See FRCP 11(d).

C. The Representations Implied by Rule

11
1. The Implied Representation of Reasonable
Inquiry
Rule 11 states that a signature on a paper constitutes a certification “that
to the best of the person's knowledge, information, and belief, formed after
an inquiry reasonable under the circumstances” the filing does not violate
four subsections of Rule 11(b). Thus, the basic obligation is to conduct an
“inquiry reasonable under the circumstances.” The amount and quality of
investigation necessary to be “reasonable under the circumstances” turns on
all the circumstances. Donaldson v. Clark, 819 F.2d 1551, 1556 (11th Cir.
1987). Factors courts consider include the time available for investigation,
whether the attorney had to rely on information from the client, and the
general plausibility of legal arguments. Id. The test is objective, not
subjective. Lieb v. Topstone Indus. Inc., 788 F.2d 151, 157 (3rd Cir. 1988).
The objective standard is intended discourage submissions “without factual
foundation, even though the paper was not filed in subjective bad faith.”
Bradgate Assocs. Inc. v. Fellows, Read & Assocs., Inc., 999 F.2d 745, 749
(3rd Cir. 1993). The objective standard eliminated any “empty-head pure-
heart” justification for frivolous filings. FRCP 11 advisory committee note.
The attorney who signs the document doesn't have to do all of the
investigation himself. He can rely on information from other persons. “For
example, no one could argue fairly that it would be unreasonable for an
attorney to rely on witnesses to an accident before bringing a personal
injury action. After all, the accident hardly can be reconstructed for the
benefit of a plaintiff's attorney.” Garr v. U.S. Healthcare, Inc., 22 F.3d
1274, 1278 (3rd Cir. 1994). Thus, attorneys can rely on their clients'
objectively reasonable representations about the facts. Hadges v. Yonkers
Racing Corp., 48 F.3d 1320, 1329–30 (2d Cir. 1995).
With respect to the duty to investigate and Rule 11 generally, all doubts
are resolved against sanctions and in favor of the person who signed the
paper. Rodick v. City of Schenectady, 1 F.3d 1341, 1350 (2d Cir. 1993). The
reason for the hesitation to impose sanctions is that Rule 11 “must be read
in light of concerns that it will . . . chill vigorous advocacy.” Cooter & Gell
v. Hartmarx Corp., 496 U.S. 384, 393 (1990). Other courts emphasize that
“judges should always reflect seriously upon the nuances of the particular
case, and the implications the case has on the nature of the legal
representation, before imposing sanctions.” Thompson v. Duke, 940 F.2d
192, 195 (7th Cir. 1991).
Also important to the reasonable inquiry analysis is the “snapshot rule.”
Rule 11 can be violated only if the duty of inquiry was breached “at the
moment of filing.” Skidmore Energy, Inc., v. KPMG, 455 F.3d 564, 570 (5th
Cir.), cert. denied, 127 S.Ct. 524 (2006). Thus, the focus is on the signing
attorney's conduct “by inquiring what was reasonable to believe at the time
the pleading” was submitted. Donaldson v. Clark, 819 F.2d 1551, 1555–56
(11th Cir. 1987). “Like a snapshot, Rule 11 review focuses upon the instant
when the picture is taken — when the signature is placed on the document.”
Thomas v. Capital Security Serv., Inc., 836 F.2d 866, 874 (5th Cir. 1988).
Thus, hindsight cannot be used to find that a paper, though proper when
filed, violated Rule 11 because of subsequently gained knowledge or
events.
Underlying all of Rule 11 is this duty of reasonable inquiry. In filing any
written document, counsel represents to the court that he has conducted a
reasonable inquiry. A reasonable inquiry into what?

2. The Other Four Implied Representations

a. No Improper Purpose
Rule 11 prohibits filing of papers that are “presented for any improper
purpose, such as to harass or to cause unnecessary delay or needless
increase in the cost of litigation.” FRCP 11(b)(1). Most courts view this as
closely related to having legal and factual support: if a complaint has legal
and factual support, then it has not been filed for an improper purpose. As a
result, the subjective intent of the party or attorney is irrelevant. Intamin
Ltd. v. Magnetar Tech., Corp., 2007 WL 1138489 (Fed. Cir. 2007)
(“complaints are not filed for an improper purpose if they are non-
frivolous”). The Constitution probably requires this: citizens have a First
Amendment right to bring non-frivolous litigation, even if they do so with
“bad” intent. Professional Real Estate Investors, Inc. v. Columbia Pictures
Indus., Inc., 508 U.S. 49 (1993).

b. No Frivolous Legal Arguments, Claims, or

Defenses
Rule 11 prohibits frivolous legal arguments. Specifically, claims,
defenses, and other legal contentions must be “warranted by existing law or
by a nonfrivolous argument for extending, modifying, or reversing existing
law or for establishing new law.” FRCP 11(b)(2). A legal argument violates
Rule 11(b)(2) when “in applying a standard of objective reasonableness, it
can be said that a reasonable attorney in like circumstances could not have
believed his actions to be legally justified.” Hunter v. Earthgrains Co.
Bakery, 281 F.3d 144, 153 (4th Cir. 2002). “The legal argument must have
absolutely no chance of success under the existing precedent” to violate the
rule. Id.
For example, in filing a complaint, plaintiff's counsel certifies she has
conducted reasonable inquiry into the law. For each claim asserted in the
complaint, plaintiff's counsel certifies that she has a non-frivolous legal
argument that applicable law supports or reasonably could support. Arons v.
Lalime, 3 F. Supp. 2d 314 (W.D.N.Y. 1998).

c. No Unfounded Allegations
Rule 11 prohibits filing papers that make “allegations and other factual
contentions” that lack “evidentiary support” unless the allegation is
specifically identified as likely to “have evidentiary support after a
reasonable opportunity for further investigation or discovery.” FRCP 11(b)
(3). The standard for imposing sanctions is “reasonableness under the
circumstances.” Landon v. Hunt, 938 F.2d 450, 453 n.3 (3rd Cir. 1991). If,
for example, the plaintiff claims the defendant breached a contract,
plaintiff's counsel must reasonably investigate whether there was a contract,
whether it was breached, and whether it caused damage. Unless a federal
question is presented, the lawyer must reasonably investigate the citizenship
of the parties, the amount in controversy, and the facts supporting personal
jurisdiction and venue.
A lawyer can properly file suit without having support for every
allegation. However, a specific process is required to avoid violating Rule
11 when the lawyer does not have a reasonable basis in hand for an
allegation. If plaintiff's counsel cannot find evidentiary support for an
allegation, whether because of the press of time or inaccessibility to
evidence that would support the allegation, the lawyer must identify in the
complaint that allegation as being one likely to have evidentiary support
after a reasonable opportunity for further investigation.
For example, if a pleading must be filed quickly due to an approaching
statute of limitations, sanctions may be less appropriate than when an
attorney has the usual amount of time to make a pre-suit investigation.
Garr, 22 F.3d at 1279. On the other hand, absent exigent circumstances, an
attorney who relied solely on a newspaper article to form the allegations of
a securities fraud complaint violated Rule 11. Id. at 1280. Sometimes
lawyers state “based on information and belief,” an allegation is true. At
other times, they mimic the language of the rule, stating that the lawyer
believes the allegation “will have evidentiary support after reasonable
investigation.”

d. No Unfounded Denials of Allegations

Rule 11 prohibits denying a factual contention made by another party
unless “warranted on the evidence” unless the denial is specifically and
reasonably identified as “based on belief or lack of information.” FRCP
11(b)(4). Rule 11(b)(4) will not apply very often to a complaint; it mostly
applies to defense counsel and their preparation of an answer.

e. What Must be Investigated?

Plaintiff's counsel must investigate the facts necessary to support
jurisdiction (personal and subject matter) and venue. In addition, the lawyer
must conduct reasonable legal research into the claim and reasonable
investigation into as to whether the allegations that the law requires be
made have “evidentiary support.”

f. Examples With Explanations

What Rule 11 means for counsel filing a complaint is that the lawyer
must reasonably investigate the law and facts to be certain not to violate the
implied representations in Rule 11. See Morris v. Wachovia Sec., Inc., 448
F.3d 268 (4th Cir. 2006). So, for example, in Walker v. Norwest Corp., 108
F.3d 158 (8th Cir. 1996), the plaintiff alleged that the plaintiff was a citizen
of a different state than “some of the defendants.” Defense counsel raised
the lack of subject matter jurisdiction in a letter to plaintiff's counsel, but he
refused to dismiss. Ultimately, the district court dismissed for lack of
subject matter jurisdiction and imposed $4,800 in sanctions on plaintiff's
counsel. The appellate court affirmed, finding no abuse of discretion even
though the plaintiff's lawyer argued that it had not alleged each defendant's
citizenship because it “would be more trouble than [plaintiff] should be
expected to take.”
Similarly, in Christian v. Mattel, Inc., 286 F.3d 1118 (9th Cir. 2003), the
plaintiff filed suit against Mattel, claiming it had stolen his idea for a Barbie
doll and seeking $2.4 billion (yes, billion) in damages. The problem was
that Mattel had been selling its doll for nearly six years before the plaintiff
allegedly thought of his doll, and that fact could have been easily discerned
by plaintiff's counsel since that date was stamped on the back of each
Mattel Barbie's head. Although holding that the district court erred in
awarding Rule 11 sanctions for various oral arguments made by plaintiff's
counsel because Rule 11 only applies to filed documents, the appellate court
remanded for the district court to determine the appropriate sanction for
filing the suit based upon inadequate investigation.
The fact that these courts imposed sanctions is fairly uncommon. In part,
this is because “any and all doubts must be resolved in favor of the signer.”
Eastway Const. Corp. v. City of New York, 762 F.2d 243, 254 (2d Cir.1985);
see also Rodick v. City of Schenectady, 1 F.3d 1341, 1350 (2d Cir.1993)
(“When divining the point at which an argument turns from merely losing
to losing and sanctionable . . . we have instructed the district courts to
resolve all doubts in favor of the signer.”). But it is also because litigation is
expensive, and plaintiff's counsel — who often are not paid unless their
clients recover money — have clear financial self-interest to not bring suits
that lack merit.

Checkpoints

Can you identify the representations that come with filing a signed paper?
Which one is not likely to be implicated in preparing a complaint?
Chapter 13

Pleadings: The Complaint

Complaint Roadmap
This chapter summarizes the evolution of the role of pleadings in civil litigation, identifies
the pleadings that are authorized by the Rules, and describes their purpose.
This chapter describes the central requirement that a complaint provide notice to the
defendant of the claim by including assertion of facts plausible facts which, if true, state a
claim upon which relief can be granted, as well as the few other substantive and “technical”
requirements of pleadings.

Rule 3 makes clear that a federal lawsuit commences with the filing of a
complaint. But as we saw in Chapter 12, the work of the plaintiff's lawyer
began earlier, as Rule 11 requires a plaintiff's lawyer investigate the law and
facts and before filing the complaint.
After summarizing the history and current general role of pleadings
under the Rules, this chapter describes the requirements for complaints.
They have changed, radically, in just the past few years.
The next chapter looks at the defendant's responses to the filing of a
complaint. There is a close relationship between that chapter and this one.
First, keep in mind that the key audience for the complaint is defense
counsel — not the judge or jury, neither of whom will likely see it. The
complaint will also set many of the boundaries for the suit, including the
scope of discovery and of any trial. More immediately, if the complaint fails
to state a claim upon which relief can be granted, the defendant can move
under Rule 12(b)(6) to dismiss the complaint. Thus, after you read about the
defendant's responses, come back and re-read the latter portion of this
chapter to master the subject matter. (Yes, that was intentional.)

A. Historical Role of Pleadings

In the not-too-distant past, pleadings were the dominant form of
communication between the parties prior to trial. Back then, pleadings were
the way that the parties exchanged information about their positions on the
law and facts. A plaintiff would write a pleading; the defense would write a
response to it; the plaintiff would write a reply to that; and so on. A goal of
the pleading system was to use rounds of pleadings to identify one issue
that could resolve the parties' dispute. The rounds of pleadings were used to
identify that issue and to determine whether the issue was one that had to be
decided by a judge or by a jury. Parties exchanged principally only papers
called “pleadings.”
The parties were unable to ask questions of each other about their
positions or the underlying facts that led to the suit being filed. What would
a witness say at trial? Unless the rules of pleading required it to be
disclosed, it could remain a secret until trial.

B. The Modern Limited Role of

Pleadings
The role of pleadings under the Rules is much more limited. There are
fewer pleadings and for all but a very few, there is just one responsive
pleading to another party's pleading. The Rules limit “pleadings” to six
types that are permitted as a matter of course, and two types that can be
filed only with court permission:
 Rule 7(a) states that these, and only these, are “pleadings.” No other
paper involved in a lawsuit is a “pleading.” Id. It will clear a lot of clutter
away if you understand that the word “pleading” is a term of art. Do not
give the word “pleading” any broader meaning or you will get completely
confused. Motions are not pleadings, for example.
As the chart shows, there no longer are rounds of pleadings. Instead,
typically one pleading states at least one claim (with different names, such
as claim, counterclaim, crossclaim and third-party claim) and another
pleading responds to that pleading. In a few instances, a third round may be
allowed. Viewed functionally, therefore, the required pleadings look like
this:

C. Requirements for Pleadings

1. Technical Requirements
While the focus of this Section is on the complaint, some requirements
from Rules 8, 10 and 11(a) apply to all pleadings. Though somewhat
mechanical, they are important for you to know, since if you do it wrong, it
shows opposing counsel you don't know what you're doing:

Include the name of the court;

Name every party (as the “title”) in the caption;
Include a blank for the judge's name (will be randomly assigned by the
court);
Include a blank for case number (will be sequentially assigned by the
court);
Give it a “designation” (i.e., the complaint has to be titled “complaint”).
Separately number each paragraph, each limited to one topic;
Separately identify each “count” (“count” means “claim”) as “Count 1,”
“Count 2” and so on;
A lawyer must sign it and include her name, address, and phone number.

2. Substantive Requirements
It may surprise you how little substance the Rules require, at least on
their face. Because a complaint is a pleading that sets forth a claim for relief
it must comply with Rule 8(a) (why?) and so must contain: (a) a short and
plain statement of the grounds for the court's jurisdiction, unless the court
already has jurisdiction and the claim needs no new jurisdictional support
[which will never be the case with a complaint], (b) a short and plain
statement of the claim showing that the pleader is entitled to relief, and (c) a
demand for judgment for the relief the pleader seeks. FRCP 8(a).

a. Short and Plain Statement of the Court's

Jurisdiction
A complaint must include a short and plain statement of the court's
jurisdiction. Typically this is accomplished in a short paragraph or two,
where the plaintiff asserts the basis for subject matter jurisdiction. The
example below shows two typical examples, one invoking diversity
jurisdiction and the other federal question. Notice that each makes the broad
allegation that subject matter jurisdiction exists, but also states the facts (in
a very general sense) that support that allegation.
If jurisdiction is based on diversity, citizenship and amount in
controversy must be alleged. So, for example, a plaintiff must allege the
citizenship of a corporation by alleging these specific facts — its state of
incorporation and the state of its principal place of business (i.e., the
location of its “nerve center”). Randazzo v. Eagle-Picher Indus., Inc., 117
F.R.D. 557 (E.D. Pa. 1987) (deriding counsel who failed to make these
specific allegations but instead alleged where the business operated, not the
exact words “principal place of business” and “state of incorporation”). Do
it exactly the way it needs to be done or you'll look like you don't know
what you're doing, in other words.
Although not required, lawyers include allegations as to why venue is
proper. For example, a complaint might aver: “Venue is proper in the
district because a substantial part of the events or omissions giving rise to
the claim occurred in this judicial district.”

b. Short and Plain Statement of the Claim

Not that long ago in federal court, pleadings had to include not just a
plain statement of the claim, but evidence and detailed factual allegations.
Remember that pleadings were the way parties exchanged information.
There was a massive shift when the Rules were adopted, which reduced
the role of pleadings in information exchange and replaced it with what is
called “discovery,” which we'll get to later. With only the exception in Rule
9(b), which we will get to, the Rules require that pleading stating a claim
need only give notice of the claim asserted. “The function of a complaint . .
. is to afford fair notice to the adversary of the nature and basis of the claim
asserted and a general indication of the type of litigation involved.” Lewis v.
U.S. Slicing Mach. Co., 311 F. Supp. 139 (W.D. Pa. 1970). What is “fair
notice?” That changed in the last few years.
Your professor may spend a lot of time on two cases — Bell Atlantic
Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 129 S.Ct.
1937 (2009) — because they overruled a case — Conley v. Gibson, 355
U.S. 41 (1957) — that had for fifty years provided a simple, bright line test
for “how much” detail needs to be in a complaint to give “notice” under
Rule 8(a). Sounds like a minor detail? Not so: increasing what Rule 8(a)
required plaintiffs to allege will reduce the filing of complaints and make it
easier for defendants to dismiss a complaint because it fails to give
“enough” notice to state a claim upon which relief can be granted. See
FRCP 12(b)(6). Let's understand the old standard, then understand what is
now required under Twombly and Iqbal, and then be sure to understand the
significance.
Conley v. Gibson was a race discrimination case. To make this “how
much is enough” issue more concrete, here is the Court's summary of the
complaint:
Petitioners were employees of the Texas and New Orleans Railroad at
its Houston Freight House. Local 28 of the Brotherhood was the
designated bargaining agents under the Railway Labor Act for the
bargaining unit to which petitioners belonged. A contract existed
between the Union and the Railroad which gave the employees in the
 bargaining unit certain protection from discharge and loss of seniority.
In May, 1954, the Railroad purported to abolish 45 jobs held by
petitioners or other Negroes, all of whom were either discharged or
demoted. In truth, the 45 jobs were not abolished at all, but instead
filled by whites as the Negroes were ousted, except for a few instances
where Negroes were rehired to fill their old jobs, but with loss of
seniority. Despite repeated pleas by petitioners, the Union, acting
according to plan, did nothing to protect them against these
discriminatory discharges and refused to give them protection
comparable to that given white employees. The complaint then went
on to allege that the Union had failed in general to represent Negro
employees equally and in good faith. It charged that such
discrimination constituted a violation of petitioners' right under the
Railway Labor Act to fair representation from their bargaining agent.
And it concluded by asking for relief in the nature of declaratory
judgment, injunction and damages.
355 U.S. at 43. The Court stated these allegations gave notice of a claim
under the Railway Labor Act:
In appraising the sufficiency of the complaint, we follow, of course,
the accepted rule that a complaint should not be dismissed for failure
to state a claim unless it appears beyond doubt that the plaintiff can
prove no set of facts in support of his claim which would entitle him to
relief.
Here, the complaint alleged, in part, that petitioners were discharged
wrongfully by the Railroad and that the Union, acting according to
plan, refused to protect their jobs as it did those of white employees or
to help them with their grievances all because they were Negroes. If
these allegations are proven, there has been a manifest breach of the
Union's statutory duty to represent fairly and without hostile
discrimination all of the employees in the bargaining unit.
[D]iscrimination in representation because of race is prohibited by the
Railway Labor Act.
355 U.S. at 46 (emph. added). The kind of pleading allowed by Conley was
known as “notice pleading”: it was enough if the complaint gave notice of
the claim and a set of facts could support it. At that point, the role of
pleadings in the exchange of information was over, and the parties were left
to discovery.
 There's a lot you can learn about how to analyze the issue of stating a
claim from that passage. Start with the last sentence: a statute creates a
claim for those discriminated against on the basis of race in union
representation. What did they allege? That they were union members who
were discriminated against on the basis of race. Allegations to support each
element of the claim were made (apparently damages were not a required
element). At that generalized level, the approach remains exactly the same
today, but “more” notice in the complaint is required.
Twombly was a federal antitrust case, brought under a statute that gave a
claim to anyone injured as a result of any “contract, combination . . . or
conspiracy, in restraint of trade or commerce.” 15 U.S.C. 1. The statute
gave a claim to those injured by contract, combinations, or conspiracies, but
not to merely “parallel conduct” that sometimes happens when two actors
engage in independent, but still identical behavior. (Think about when one
gas station raises its price a penny, and the one across the street then follows
suit: could be a conspiracy, but could also be independent but parallel
conduct.) Now put yourself in a potential plaintiff's counsel's shoes:
suppose you believe it's a conspiracy: to allege it, you have to have a Rule
11 basis to do so.
In Twombly, the plaintiff alleged “upon information and belief” that a
contract, combination, or conspiracy existed among certain Internet and
local phone service providers based the fact that the defendants did not
compete with each other in each other's markets and various other facts and
circumstances. The district court held the allegations were insufficient to
state a claim upon which relief could be granted because the pled “factual
matter (taken as true)” did not “suggest that an agreement” had been made.
The complaint must contain “enough fact to raise a reasonable expectation
that discovery will reveal evidence of illegal agreement,” or “plausible
grounds to infer an agreement.” Because the factual matter of the Twombly
complaint did not plausibly suggest a conspiracy, but instead was more
likely explained by lawful, parallel conduct, the Court held the complaint
did not state a claim upon which relief could be granted.
At first many thought Twombly was merely an narrow application of the
pleading rule to the context of expensive antitrust cases, where getting past
the pleading stage often meant, as the Court noted, high discovery costs and
thus created significant settlement value. But in reaching its conclusion the
Court criticized Conley's “no set of facts” standard as being “best forgotten
as an incomplete, negative gloss on an accepted pleading standard: once a
claim has been stated adequately, it may be supported by showing any set of
facts consistent with the allegations in the complaint.”
Nonetheless, the Court re-iterated that detailed factual allegations were
not necessary, but the plaintiff had to provide “the grounds” that entitle it to
relief, which required “more than labels and conclusions” and emphasized
that a mere “formulaic recitation of the elements of a cause of action will
not do.” Id. Instead, the court held that though basic the “factual allegations
must be enough to raise a right to above the speculative level.” Id. Although
Twombly did not articulate the new standard precisely, the Court seems to
indicate that a complaint must “contain either direct or inferential
allegations respecting all the material elements necessary to sustain
recovery under some viable legal theory.” Id., quoting Car Carriers, Inc. v.
Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir. 1984).
Iqbal made it clear that Twombly was not a narrow exception. The
complaint in Iqbal alleged that Iqbal was a Muslim, Pakistani citizen who
had been unlawfully detained after the attacks of September 11, 2001. He
sued several defendants, including Ashcroft, who had been the Attorney
General of the United States at the time of his arrest, and Mueller, who had
been Director of the FBI. The complaint alleged misconduct by lower level
officials in a way that satisfied Rule 8(a): he was kept in maximum security
lockdown 23 hours a day, was often in chains, and was kicked in the
stomach and punched in the face without provocation. He plead guilty,
served his time, then sued the guards, some other administrators, and
Ashcroft and Mueller.
Lawyers for Ashcroft and Mueller — but not the guards and
administrators — moved to dismiss the complaint for failing to state a
claim. The Court emphasized that the complaint did not allege that those
two men had kicked or beaten Iqbal, but that each had approved of policies
of holding men of certain races following the September 11 attacks and
that, allegedly, they had done so because of Iqbal's race, religion, or
national origin.
It explained how to apply Twombly: First, legal conclusions are not
“factual matter” and so are not entitled to be presumed as true: thus, the
bare allegation in Twombly that there was an agreement or conspiracy did
not “count” as factual matter. So, legal conclusions are ignored. Once that is
done, the remaining “factual matter” is taken as true and the court must
determines whether the remaining allegations plausibly states a claim upon
which relief can be granted.
In Iqbal the court held these allegations were “legal conclusions” and so
not entitled to any weight: that the defendants condoned subjecting him to
harsh conditions because of his race and that Ashcroft was the architect of
the policy and Mueller was instrumental in executing it. The remaining
“factual matter” the Court held stated a claim but was subject to “more
likely explanations” than race discrimination. Because it was as plausible
that the men acted with the purpose of keeping “suspected terrorist in the
most secure conditions available” until they could be cleared, the
allegations did not state a claim for discrimination because of race, religion,
or national origin.
First the good news: Although Twombly and Iqbal overruled Conley and
said more detail was needed in pleadings, lawyers had already and for a
long time been doing pretty much what those cases require. Twombly and
Iqbal mean, at one level, that courts can require what had been often
already been the practice. So, in some ways, “big deal.”
But, the bad news comes first because lawyers must now distinguish
between “legal conclusions” and “factual matter,” and only the latter
“counts” and is assumed true, and even then the claim must still be
“plausible” in light of those allegations.
Second, Twombly and Iqbal did overrule a long-standing case, and
secondly because at the margins, the new standard can be very significant.
What do I mean by at the margins? In a car wreck case where someone ran
a red light, is the new standard gong to matter? No. But what in those cases
where, for example, the evidence to support an allegation is in the
defendant's sole possession, and so plaintiff's counsel can't get to it. What
about where intent is an element of the tort and the facts are weak about
inferring intent — plaintiff's counsel can't know what is going on in
someone's head. Marginal cases will be affected: there will be fewer filings
and more dismissals on the pleadings under the new standard.
Third, Twombly and Iqbal were in the eyes of many inconsistent with the
very conclusory official pleading forms that, until 2015, were in an
appendix to the Rules. Here is Form 9, which was until 2015 effective to
plead negligence:
These forms are no longer automatically sufficient after December 2015.
Fourth, there's tension between Twombly and Iqbal and another rule
about pleadings. Courts often say that the plaintiff pled too much. Viacom,
Inc. v. Harbridge Merchant Servs., Inc., 20 F.3d 771, 775–76 (7th Cir.
1994). Pleadings that are confusing or contain too much detail or which
plead evidence violate Rule 8, in other words. See Conley v. Gibson, 355
U.S. 41, 47 (1957), abrogated on other grounds, Bell Atlantic Corp. v.
Twombly, 127 S.Ct. 1955 (2007). Some pleadings have too little, some too
much, and others, just right. See Matrixx Initiatives, Inc. v. Siracusano,
2011 WL 977060 (March 22, 2011) (holding complaint stated claim under
Twombly and Iqbal).
One final note: Lawyers plead cases in slightly different ways in federal
courts throughout the country. Be sure you get a feel for what your
professor thinks is “right” and in practice learn what local custom expects.

i. Inconsistent Claims (or Defenses)

A party may assert inconsistent claims in the pleading. Rule 8(d)(2)
provides:
A party may set out 2 or more statements of a claim or defense
alternatively or hypothetically, either in a single count or defense or in
separate ones. If a party makes alternative statements, the pleading is
sufficient if any one of them is sufficient.
Likewise, Rule 8(d)(3) permits a party to “state as many separate claims or
defenses as it has, regardless of consistency.” A plaintiff may, therefore,
plead that the defendant is subject to strict liability, and was negligent, and
committed fraud, and so on.
 Why do the Rules allow this? Remember that the plaintiff's lawyer will
not know all the facts when drafting the complaint. He will not, for
example, likely have had access to any information known only to the
defendant. (It's generally unethical for a lawyer to talk to a person who is
represented by counsel in a matter, and even if the person is not
represented, a lawyer has significant restrictions on how he can conduct
pre-suit investigations of people who his client intends to sue. These are
subjects you'll cover in your Professional Responsibility class.) For these
reasons, lawyers are given some freedom, limited by Rule 11, to plead
alternative claims and theories.

ii. Pleading Unsupported Allegations

A lawyer must specifically identify any allegation that the lawyer does
not know has evidentiary support. See Rule 11. As we saw, this is permitted
where, for example, the suit had to be filed quickly. See Chapter 12.

iii. Rule 9(b) as an Exception

The only exception in the Rules to the requirement that a pleading must
only give notice is Rule 9(b). Rule 9(b) requires a party to “state with
particularity the circumstances constituting fraud or mistake.” This
“particularity” requirement has generally been construed to require that the
plaintiff must plead “the statements contended to be fraudulent, identify the
speaker, state when and where the statements were made, and explain why
the statements were fraudulent.” Southland Sec. Corp. v. Inspire Ins.
Solutions, Inc., 365 F.3d 353, 362 (5th Cir. 2002).
Meeting this requirement is especially intricate when the fraud claim is
made against a business entity: it is not sufficient to allege that “the
corporation” made a false statement, or that “an agent” of it did so; the
person must be identified.
Cases illustrate how much more “particularity” requires than a “short and
plain statement.” For example, in Stradford v. Zurich Ins. Co., 2002 WL
31027517 (S.D.N.Y. 2002), the plaintiff insured brought a claim against the
insurance company for an unpaid claim, and the defendant insurer filed a
counterclaim for fraud. The defendant alleged only that the plaintiff had
“knowingly and willfully devised a scheme and artifice . . . to defraud
defendants and obtain money by false pretenses and representations.” The
district court held this was insufficient under Rule 9(b) because it did not
disclose the “time, place, and nature of the alleged misrepresentations.” Id.
Why is more required in cases of fraud or mistake? Courts offer various
justifications for the rule, and some say it should not exist at all. One
common justification is that both fraud and mistake can be used to avoid
contractual obligations; if a party is seeking to avoid contractual
obligations, it should be required to explain why the contract should not be
enforced with more detail. Likewise, fraud claims can result in tort damages
(which, generally, are greater than contract damages) and punitive damages
(which generally are not available for breach of contract); so, if the party
believes that it is entitled to more than what the contract it has with the
other party would allow, it should be required to explain why in more detail.
Rule 9(b) has other limitations: “[m]alice, intent, knowledge, and other
conditions of a person's mind may be alleged.” FRCP 9(b). The last
sentence of Rule 9(b) means that while the facts that constitute fraud must
be pled with particularity, “the requisite intent of the [person who
committed the alleged fraud] need not be alleged with specificity.” Wight v.
Bankamerica Corp., 219 F.3d 79, 91 (2d Cir. 2000).
Courts should not interpret Rule 9(b) to require parties to plead anything
other than fraud or mistake with particularity. Swierkiewicz v. Sorema, 534
U.S. 506, 51 (2002); Leatherman v. Tarrant County Narcotics Intell. &
Coord. Unit, 507 U.S. 163 (1993) (“In the absence of [an amendment
allowing federal courts to require particularity in other cases] federal courts
and litigants must rely on summary judgment and control of discovery to
weed out unmeritorious claims sooner rather than later.”). Nonetheless, a
few courts particularly in “civil rights cases” require more than Rule 8. See
generally, Kyle v. Morton High School, 144 F.3d 448 (7th Cir. 1998)
(appellate court split on whether this practice was still appropriate after
Leatherman). Finally, certain statutes, such as the Private Securities
Litigation Reform Act, may require more detail than does Rule 8. See In re
Advanta Corp. Securities Litig., 180 F.3d 525 (3rd Cir. 1999).

c. Demand for Relief

A plaintiff must include a demand for all the relief that it seeks. Thus, if a
plaintiff seeks both money damages and injunctive relief (including specific
performance), it should include a demand (often called a “prayer for relief”)
that mentions these remedies.
Despite the requirement of a demand, the plaintiff generally need not
specify the amount of damages sought. Although a plaintiff is required to
demand relief, as a general rule the plaintiff is not required to plead a
specific dollar amount. Avita v. Metropolitan Club, 49 F.3d 1219, 1226 (7th
Cir. 1995).
However, there is an exception: if the plaintiff seeks special damages, it
must identify those damages. The dividing line between general and special
damages varies, depending on whether the claim is in contract or tort, and
states do not uniformly divide damages into the same category. However,
generally speaking “general damages” — those that need not be specifically
pled — are those that flow naturally and necessarily from the defendant's
wrongdoing. M.F. Patterson Dental Supply v. Wadley, 401 F.2d 167, 172
(10th Cir. 1968). On the other hand, “special damages” — which must be
pled — are those that the defendant caused, but that are not normally
caused by the claim alleged against the defendant. PdP Parfums de Paris v.
Int'l Fragrances, 901 F. Supp. 581, 585 (E.D. N.Y. 1995).
Finally, related to the demand for relief is a demand for a jury trial. The
plaintiff may demand a jury trial by simply including it in its complaint by
stating “Plaintiff demands a trial by jury” somewhere in the complaint. See
FRCP 38(b)(1); Chapter 54.

D. Who Must Be a Named Plaintiff

and a Named Defendant?
Rule 17 requires that a claim be prosecuted in the name of the “real party
in interest,” unless the plaintiff is a minor, is incapacitated, or for some
other reason the plaintiff who must bring the action must do so as a
“representative” of the real party in interest. So, for example, normally a
person who is injured in a car wreck must be named as a plaintiff to recover
for damages caused to that person by the wreck. However, where a minor is
injured, or the person who is injured is incapacitated or killed in the wreck,
then suit can be brought by a representative on behalf of the real party in
interest.
The question of when a representative must be appointed, and of when a
parent is the real party in interest to recover for damages caused to a minor
child are generally governed by state law, and are not the focus of the
Rules. Rule 17 requires that the real party in interest be the named plaintiff,
unless for some other reason it is proper for the suit to be prosecuted by a
representative. See Green v. Daimler Benz, A.G., 157 F.R.D. 340 (E.D. Pa.
1994). So, for example, in Naghiu v. Inter-Continental Hotels Group, Inc.,
165 F.R.D. 413 (D. Del. 1996), the plaintiff while in Zaire staying in the
defendant's hotel was beaten up and $146,000 in cash that belonged to his
employer was stolen. The court held that because the plaintiff had no legal
interest in the money, his employer was the real party in interest. The court
concluded that he was not a bailee of the money, but simply an employee,
and so he had no legal interest in the money.
As for defendants, the capacity of a defendant to be sued is also generally
determined under state law. See FRCP 17(b). As a general matter, the
question of which is the right defendant to sue is a matter of substantive,
not procedural, law, with the exception of incapacitated defendants and
certain business forms, such as unincorporated divisions and associations.
If after suit is filed a named party dies or becomes incapacitated, Rule 25
permits substitution of a party to replace the now-deceased or incapacitated
party.

E. Examples and Forms

Below is a very simple complaint, but one that complies with the Rules
and is typical of how a lawyer would draft it. Notice that the Cause Number
(“Civ. A. No.”) and “Judge” are blank: the clerk will fill in that information
after the complaint is filed.
 Be sure you realize that an allegation is just that: it does not mean
jurisdiction necessarily exists, or that the plaintiff will “win” its claim and
receive the relief it demanded. Plaintiff is required to make allegations
which, if proven, means (a) the court has subject matter jurisdiction; and (b)
the court will award relief to the plaintiff. The defendant has not even had a
turn, yet.

F. Corporate Disclosure Statement

and Civil Cover Sheet
The first time a non-governmental corporate party (e.g., a corporation)
files any motion, pleading, or other document in a case, it must also file a
“Disclosure Statement.” FRCP 7.1. This form requires lawyers representing
corporate parties to list for the court any parent corporation of the party, or
any corporation that owns more than 10% of the stock of the party, or to
state that there are no such parties. The purpose of the disclosure is to aid
the judges of the court to determine whether anyone owns any disqualifying
financial interest in a party. Thus, a non-governmental corporate plaintiff
typically files a Rule 7.1 statement along with the complaint, and a non-
governmental corporate defendant, along with its answer or Rule 12
motion.
Another form that must be filed along with the complaint is a “Civil
Cover Sheet.” The government uses the forms to collect data on civil
filings. It is available on the website of each district court, and is often in a
PDF form that can be completed on-line and then printed.

G. Conclusion
What remains to be seen is whether the plaintiff can support its
allegation: it may be that the facts do not support the allegations of subject
matter jurisdiction, or the facts alleged in support of a claim are untrue (or
can't be proven), or the defendant has an “affirmative defense” which
means that, even if the plaintiff proves every allegation of a claim, the
plaintiff still will not recover.
The defendant's pleading and then the process of discovery are the means
by which parties uncover the facts. Summary judgment and trial are the
vehicles by which the court, or a jury, determines whether a party can prove
the allegations: can the plaintiff prove each element of its claim? Can the
defendant prove each element of its affirmative defense? We will turn to
those procedures shortly.
But first, we'll look at a matter that often is not addressed until the end of
a civil procedure course, but which counsel for plaintiff and defendant must
confront early on: joinder of claims and parties. Some professors will cover
this material only at the end of the course, while others (me included) deal
with it where it belongs: at the outset of the suit, when lawyers must make
decisions about what claims can, and must be brought, and who can, must,
and cannot be joined with the suit.

Checkpoints
Can you list each pleading and its function?
Can you explain what is required by a “short and plain” statement of a claim?
Can you identify when something is a “legal conclusion,” and the significance of that conclusion?
When does Rule 9(b) apply and what more does it require? Why?
Chapter 14

Preview of the Four Steps

to Analyze Joinder of Claims
and Parties
As we saw, a federal court must have subject matter jurisdiction over
each claim. It must also have personal jurisdiction and, for claims asserted
by a plaintiff, venue must be proper. We learned earlier about original
subject matter jurisdiction — federal question and diversity — personal
jurisdiction, and venue. There must be original jurisdiction, “regular”
personal jurisdiction, and “regular” venue over a claim for a case to be
anchored in federal court.
In this chapter, we'll learn that — once there is an anchoring claim —
then doctrines expand original or regular subject matter jurisdiction,
personal jurisdiction, and venue to permit a claim that is related to the
anchor claim to “tag along” — even if, strictly speaking, there is no
diversity or federal question, or there is no personal jurisdiction, or venue is
technically improper, or all three are lacking — over that additional claim.
Be sure you understand that supplemental subject matter jurisdiction,
pendent personal jurisdiction, and pendent venue are only available for
additional claims beyond the anchor claim. Put more precisely: if there is
no claim over which the court has all three — original subject matter
jurisdiction (federal question or diversity), venue, and personal jurisdiction
— or if the defendant fails to recognize and properly take action and waives
any objection to venue or personal jurisdiction — then these doctrines are
unavailable. Put another way, they can only be used if there is a claim that
has proper subject matter jurisdiction and either (a) personal jurisdiction
and venue or proper or (b) the defendant failed to object to any defects with
them.
 We'll see over the next several chapters that in addition to the two forms
of original subject matter jurisdiction we've seen, a federal statute creates
“supplemental” subject matter jurisdiction. Likewise, we'll see that judges
have in addition to the regular forms of personal jurisdiction developed
“pendent personal jurisdiction” and, in addition to venue defined by statute,
developed “pendent venue.” All three are intended to help efficiently
adjudicate claims closely related to an anchor claim.
Why are these doctrines necessary? Remember that often the same set of
facts gives rise to more than one claim. It is common, for example, for a
plaintiff to plead more than state law claim, or to combine a state law claim
with a federal claim. For example, suppose you live in Texas but travel to
California, where you sell your car to a California resident. If the
Californian believes you breached the contract by selling him a defective
car, he could sue you for breach of contract. In addition, he might combine
with that a claim for fraud, alleging that you deliberately misrepresented the
car's quality. One set of facts might give rise to two or more state law
claims, or combinations of state and federal claims, if for example a federal
statute gave a civil cause of action to someone who bought a car in reliance
on a misrepresentation.
Similarly, a complaint may make claims against more than one
defendant, or more than one plaintiff may assert claims against a single
defendant. For example, a patient injured during back surgery may sue both
the doctor who operated and the manufacturer of an artificial disc that the
doctor implanted. Or, a husband and wife injured in a car wreck may sue
the other driver.
One plaintiff, at least, must have one anchor claim that meets all the basic
requirements discussed in Part A of this book: subject matter, personal
jurisdiction, and venue. As to each additional claim by that plaintiff against
that defendant, and even by other parties against each other, the same
requirements exist — subject matter jurisdiction, personal jurisdiction and
venue — but the ways to meet those requirements for each additional claim
relaxes a bit. A party can still show subject matter jurisdiction exists by
establishing diversity or federal question, and can still show that the
traditional minimum contacts test is met and that the general federal venue
statute or a specific statute is met. In addition, however, each additional
claim can also be proper under supplemental subject matter jurisdiction,
pendent personal jurisdiction, and pendent venue.
 This chapter focuses on the steps that must be undertaken for every
additional claim beyond the anchor claim that the plaintiff makes against
each defendant to properly anchor the dispute in federal court. The analysis
applies to all claims “joined” with that first, anchor claim, whether “joined”
in the initial complaint or after suit is filed.
To reiterate the point made above, which is counter-intuitive: “Join”
sometimes misleads some students. The word sounds like it applies only
after the complaint is filed. That's not right. The Rules governing joinder
apply always. For example, they apply if the plaintiff has included more
than one claim against a defendant, either originally or in an amended
pleading (we'll get there), and also if the plaintiff joins two defendants in
the original complaint, or at first sues only one and then joins another
defendant later through an amended complaint. The rules apply from the
original complaint onward.

A. The Anchor Claim

We saw in Chapter 13 that the Rules require a complaint to state a claim
for relief against a defendant over which the court has subject matter
jurisdiction, either diversity or federal question, and over which venue is
proper (or any objection to personal jurisdiction or venue is waived by the
defendant, or the court and the parties fail to recognize any defect with
subject matter jurisdiction). This is the “anchor claim.” There must be one
claim that anchors the case in federal court, or the suit can be dismissed
upon motion of the defendant: if there is no single claim in the complaint
that has all three — venue is improper, personal jurisdiction exists, and
subject matter jurisdiction exists — defense counsel can move to dismiss
the complaint; or, in the case of subject matter jurisdiction, upon the motion
of any party or by the court.
We've also seen that in some circumstances a plaintiff can aggregate its
claims against a single defendant to attain the minimum amount in
controversy, and also that a plaintiff can aggregate its claims against
multiple defendants if the defendants are jointly and severally liable to the
plaintiff. Those claims, too, can anchor a case in federal court, creating a
diversity anchor claim.
There can be more than one anchor claim: a plaintiff can include in the
complaint two claims, both of which are federal questions and over which
venue and personal jurisdiction proper. But there must be at least one claim
by one plaintiff against one defendant that meets all three requirements or
the entire case is subject to dismissal by motion of the defendant (or, if
subject matter jurisdiction is lacking, by the court, as we'll see), because no
one claim anchors the dispute in federal court. If there is more than one
claim against a defendant that does so, then each can serve the purpose of
“anchoring” additional claims.
To put it graphically, and assuming the court lacks subject matter
jurisdiction, personal jurisdiction, and/or venue, here is the analysis to
determine whether a claim can serve as an anchor claim:
 Why does identifying an anchor claim matter? If a well-pleaded
complaint contains either a diversity or federal question claim, a court
“beyond all question has original jurisdiction over that claim.” ExxonMobil
Corp. v. Allapattah Serv., Inc., 125 S.Ct. 2611, 2620 (2005). Thus, if a court
has original jurisdiction “over a single claim in the complaint, the court has
original jurisdiction over a ‘civil action’ within the meaning of § 1367(a)
[the statute governing supplemental subject matter jurisdiction], even if the
civil action over which it has jurisdiction comprises fewer claims than were
included in the complaint.” Id. at 2620. Once a civil action is properly
anchored in federal court, then the court “can turn to the question whether it
has a constitutional and statutory basis for exercising supplemental
jurisdiction over the other claims in the action.” Id. at 2621. Thus, if there is
at least one anchor claim, then the court has subject matter jurisdiction over
the civil action, and the issue turns to whether it has subject matter
jurisdiction over each other claim in that civil action. That and the related
requirements of personal jurisdiction and venue, is where we turn to next.

B. The Four Steps for Analyzing Joining

Each Additional Claim Against Each
Party
As to each additional claim made by a party — whether included in the
original pleading or added later through amendment — there must be:
authority by a Rule to add the claim or party: there must be a Rule that
authorizes the claim to be joined with the anchor claim(s) or to join a
person as party (see Chapters 15 to 18);
original or supplemental subject matter jurisdiction: there must be
either original jurisdiction (diversity or federal question) or
supplemental jurisdiction under 28 U.S.C.§ 1367 for each additional
claim (see Chapter 21);
personal jurisdiction: if a separate basis for personal jurisdiction is
required over the claim (sometimes it is not) there must be either
actual or pendent personal jurisdiction for each additional claim (see
Chapter 22); and
venue: if a separate basis for venue is required over the claim
(sometimes it is not), venue must be proper under the general federal
 venue statute, or under any applicable federal statute specific to that
claim or there must be pendent venue over the additional claim (see
Chapter 23).
We'll see that sometimes the rules give broad authority to add certain
claims, but the subject matter jurisdiction statutes exclude many of them.
Conversely, sometimes the Rules give very little authority to add claims,
but there will almost always be subject matter jurisdiction over them. Each
inquiry is independent and required. Likewise, venue and jurisdiction must
be analyzed for each claim.
One last word, but it's important: before Congress had enacted the
supplemental jurisdiction statute, 28 U.S.C. § 1367, federal courts had
developed common law doctrines called “ancillary” and “pendent” subject
matter jurisdiction. They did, basically, the same thing that Section 1367
does. But, they're gone: “Nothing in § 1367 indicates a congressional intent
to recognize, preserve, or create some meaningful substantive distinction
between the jurisdictional categories [the Court has] previously labeled
pendent and ancillary.” ExxonMobil Corp. v. Allapattah Serv., Inc., 125
S.Ct. 2611, 2621 (2005). In other words, Section 1367(a) did not adopt this
law; the statute replaces that judge-made law and expresses Congress'
controlling view of when federal courts have supplemental subject matter
jurisdiction. Section 1367, controls. See id. (distinguishing pre-Section
1367 case law from Section 1367).
Chapter 15

Joinder Step One: Authority

in a Rule for Joining the Party
or the Claim
If a Rule does not give authority for a claim or party to be joined to a
civil action, then a party can object to joining the claim even if subject
matter and personal jurisdiction and venue are all present. Thus lack of
authority by itself is a basis to dismiss a claim: you must learn to identify
which Rule, if any, authorizes joinder of the party or claim. The identity of
the Rule that authorizes joinder serves a second purpose: we will see that
whether a separate basis for personal jurisdiction is required, or whether a
separate basis for venue is required, and how to determine whether
supplemental jurisdiction under Section 1367 exists, each turns in part on
which Rule authorizes joinder of the claim or party. Correctly identifying
which, if any, Rule authorizes joinder of the claim or party is the critical
first step. Get it wrong, and you're toast.

A. Introduction to the Concept of

Authority
There must be authority in a Rule to join a party or claim. A Rule must
give a plaintiff authority to join an additional claim against a defendant, for
example, and a Rule must give a defendant authority to join a claim —
called a counterclaim — against a plaintiff. Likewise, if a party wants to
make a claim against a person who is not yet a party, a Rule must authorize
that party to join that person as a party to the suit and to assert a claim
against it.
There's a big picture that will help to give you some intuition about
joinder, but the details will always control: the joinder rules are designed to
allow all of the claims that arise out of the same incident and which involve
all of the parties to that incident to be litigated in one case. But it's not that
simple, because cutting against that principle is that the joinder rules also to
a large degree permit the plaintiff to determine who to sue, and over what.
The plaintiff is the “master” of the lawsuit. As a result, a defendant, we will
see, often has less ability to compel efficient resolution of a dispute than
intuition might suggest should be the case. (Further, the subject matter
jurisdiction, personal jurisdiction, and venue requirements of federal courts
also at times operate to eliminate efficient resolution of disputes, as we'll
see.)
The joinder rules are not that many, but they are quite specific. Be sure
that when you are determining whether joinder of a claim or party is
authorized, that you identify the correct Rule. Being correct — what type of
party (e.g., plaintiff or defendant) is seeking to join the claim or party, and
on what basis is it doing so — is critical. To help, these tables summarize
what we'll explore next, and may be used to identify which Rule applies to
joinder by a specific party:
 We will start with joinder of claims, since in many schools students study
that first. The issue is: when can the plaintiff who has one claim anchored in
federal court join claims against that one defendant, or when can a
defendant assert a counterclaim against an existing plaintiff? Then, we, as
likely will your professor, move on to joining additional parties — not just
one plaintiff and one defendant.
Chapter 16

Authority to Join Claims

Authority to Join Claims Roadmap

This chapter identifies the Rules that authorize the joinder of claims by a plaintiff or
defendant already anchored in federal court
This chapter also explains when a plaintiff or defendant may, or must, join a claim against
an opposing party.

Over the next few chapters, we will explore how the underlying policy of
the Rules and statutes is to permit parties to resolve in one suit all claims
involving all parties that arise out of the same basic set of facts, while still
giving the plaintiff some control over the scope of the suit. The Rules and
statutes balance these interests and others.

A. Joinder of Claims by a Plaintiff

While one-plaintiff-asserting-one-claim-against-one-defendant litigation
is not uncommon, a significant amount of federal litigation involves more
than one plaintiff or defendant, more than one claim, and to a lesser extent,
“third-party practice.” In this chapter, we'll examine the extent to which a
plaintiff may properly join additional claims against a defendant, and then
when a defendant may assert claims against the plaintiff. (We'll explore
crossclaims later, since more than one plaintiff or defendant must be
properly joined to make those claims. Likewise, we'll explore joining
parties to a counterclaim or crossclaim, or through “third-party practice”
later, since they turn on the existence of a pending or proposed claim.)
Remember that identifying the authority in a Rule to join a claim is one
step in the process of determining whether a claim or party can be joined:
there must be a claim that anchors the case in federal court, and for each
additional claim, there must be either original subject matter or
supplemental jurisdiction, as well as for some claims a separate basis for
personal jurisdiction and venue. To determine whether supplemental subject
matter jurisdiction exists, a key step is identifying which Rule authorizes
joinder of the claim or party. This chapter, therefore, not only begins our
examination of the scope of authority of each Rule to join a claim or party,
it also provides the details of one step that you must apply when
determining whether a court has supplemental jurisdiction over the claim.

1. Joinder of a Claim by an Existing Plaintiff

Against
an Existing Defendant
The following table lists every circumstance in which a plaintiff is
authorized to join a claim against an existing defendant where there are no
claims by the defendant (if the defendant has asserted a counterclaim or
joins a third party, see below):

a. Permissive Joinder
Once a plaintiff has an anchor claim against a defendant, Rule 18(a)
gives that plaintiff authority to join every additional claim it has against that
defendant, even if the claim has nothing to do with the anchor claim. “A
party asserting a claim . . . may join as independent or as alternative claims
as many claims . . . as it has against the opposing party.” FRCP 18(a). It
allows the plaintiff to throw in the kitchen sink.
So, for example, a plaintiff anchors a case in federal court with a federal
claim for employment discrimination has authority in Rule 18(a) to join a
totally unrelated claim arising out of a car wreck between those parties.
There's authority in Rule 18(a) for the plaintiff to join any claim — related
or not to an anchor claim. So, in the example below the complaint joins two
claims in the hypothetical Mangia Pizza versus Bob Smith, LP complaint
we saw above, with a new federal claim joined with the state law breach of
contract action:
 It is unlikely that two private individuals who have a dispute with each
other will have multiple unrelated disputes. If Bob and Susie get in a car
wreck, it's unlikely they also have a claim arising out of some contract. Any
claims each has against the other will all likely arise out of the car wreck.
But the unfettered authority to join claims can create problems. Think about
what Rule 18(a)'s broad grant of authority means when two large
companies that do a lot of business with each other and have many disputes
get into a lawsuit.
Fortunately these potential monster disputes are limited by other
concepts: simply having authority to join a claim doesn't end the analysis:
there must also be subject matter and personal jurisdiction over each claim,
and venue for a claim must be proper (at least for all claims by plaintiffs).
Those principles will limit the plaintiff's practical ability to add claims to a
suit. In addition, we will explore tools — severance and separate trial —
that allow courts to reduce the number of parties and claims in a particular
suit as it progresses, or only at trial. See Chapter 18.

b. Mandatory Joinder of Claims by Plaintiffs

Nothing in Rule 18(a) (or any other Rule) requires a plaintiff to join any
additional claim. Rule 18(a) is purely permissive. But, we'll see in Chapter
60 that common law doctrines of res judicata (now called “claim
preclusion”) require plaintiffs to join certain claims; the Rules, however, do
not.

B. Joinder of Claims by a Defendant

Against an Existing Plaintiff
Early in a suit, defense counsel must make analyze whether the defendant
has any claims that it can, or must, bring against any existing party to the
suit: a plaintiff or a co-defendant already joined by the plaintiff. The Rules
more closely limit the ability of a defendant to assert claims against existing
parties, however. The only Rules that permit a defendant to make a claim
against an existing plaintiff are in this chart:

Suppose defense counsel concludes that the defendant has a claim against
the plaintiff. This is quite common. For example, in a car wreck, the
plaintiff may sue the defendant, alleging the defendant was at fault, while
the defendant may believe the plaintiff was at fault and should pay for the
defendant's injuries and damages. Or, in a business dispute, the plaintiff
may believe that the defendant breached the contract, but the defendant
believes it was the victim of the breach. This section describes the authority
for a party who was already joined as a defendant by the plaintiff to join a
claim against a party already joined as a plaintiff.
A defendant can make only one claim against a plaintiff: a counterclaim.
Rule 13 authorizes two types of counterclaims: (1) compulsory and (2)
permissive. As their names sound, a defendant must assert a compulsory
counterclaim, or it will be barred from doing so in a later suit; in contrast,
the Rules authorize but do not require a defendant to file permissive
counterclaims. See Chapter 60.

1. Compulsory Counterclaims
A defendant must assert any claim that is a “compulsory counterclaim” or
it is barred. If you keep in mind that one goal of the law is to resolve all
claims that arise out of the same dispute that is anchored in federal court,
then the compulsory counterclaim rule is fairly intuitive.
Read Rule 13(a), which defines what is and what is not a compulsory
counterclaim. No matter how related it is to a claim by the plaintiff, a claim
is not a compulsory counterclaim if:
(a) when the lawsuit against this defendant was filed, its would-be
counterclaim was pending in another suit;
(b) the plaintiff brought suit by attachment or other process resulting
only in rem or quasi in rem jurisdiction and defendant has not filed a
counterclaim;
(c) including the counterclaim requires joining a party over whom the
court lacks jurisdiction; or
(d) the defendant did not have the would-be counterclaim — because it
did not yet exist — when defendant served its answer.
FRCP 13(a); Baker v. Gold Seal Liquors, Inc., 417 U.S. 467 (1974). So, for
example, if Bob has sued Susie over a car wreck in state court, and then
Susie sues Bob in federal court over that same wreck, Bob doesn't need to
bring a “counterclaim” against her. (See (a) above.) Likewise, a defendant
is not required to include in its answer a claim that it can't yet bring!
What is a compulsory counterclaim? It is one that does not fall in any of
the four categories above and which “arises out of the transaction or
occurrence that is the subject matter of the opposing party's claim.” Four
inquiries help determine whether a counterclaim “arises out of the same
transaction or occurrence” as a claim against the defendant:
(a) whether the issues of fact and law in the claim and counterclaim
are essentially the same;
(b) whether res judicata would bar a subsequent suit on the
counterclaim absent the compulsory counterclaim rule;
(c) whether the same evidence would support or refute the claim and
the counterclaim; or
(d) whether there is a logical relationship between the claim and the
counterclaim.
Q Int'l Courier, Inc. v. Smoak, 441 F.3d 214, 219 (4th Cir. 2006); see
Iglesias v. Mut. Life Ins. Co., 156 F.3d 327 (1st Cir. 1998). These are not
elements: the court “need not answer all these questions in the affirmative
for the counterclaim to be compulsory.” Instead, these inquiries work “less
like a litmus” test and “more like a guideline.” Id. The tests are fact-
intensive and often the answer turns on the broader question of whether trial
would be efficient if the counterclaim were joined with the plaintiff's claim.
For example, the plaintiff in Iglesias brought employment discrimination
and breach of contract claims against the defendant. The defendant filed a
counterclaim seeking restitution from the plaintiff for amounts the plaintiff
had “padded” his expense account with. The court held that the
counterclaim was not compulsory, emphasizing that the facts that gave rise
to the counterclaim rested on different sets of facts, and that the
counterclaim did not depend on the success or failure of plaintiff's claim
against the defendant. In other words, the plaintiff's claim turned on proving
discrimination; the defendant's counterclaim turned on whether plaintiff
padded his expense account. Ask whether the same would be true if the
defendant asserted a claim for padding the expenses, but also asserted that it
had fired the plaintiff for having done so, not because of discrimination.
The facts matter.
Leading casebooks often discuss two cases that reach different results on
similar facts. On the one hand, in Plant v. Blazer Financial Services, 598
F.2d 1357 (5th Cir. 1979), the court held the logical-relationship test was
satisfied where the plaintiff brought a truth-in-lending claim and the
defendant filed a counterclaim for payment, and both claims arose out of
the same note. The plaintiff's claim was based on the defendant creditor's
failure to disclose terms regarding an after-acquired security interest, while
the counterclaim was based on the plaintiff debtor's failure to make any
payments on the note. The court reasoned that resolution of the
counterclaim would impose little burden in fact because the only additional
finding to be made is simply “how much the plaintiff has paid.” Further, the
court explained that if the creditor was not allowed to assert his delinquent-
payment counterclaim against the defaulting debtor, the creditor “could be
forced to satisfy the debtor's truth-in-lending claim without any assurance
that his claims against the defaulting debtor arising from the same
transaction will be taken into account or even that the funds he has been
required to pay will still be available should he obtain a state court
judgment in excess of the judgment on the truth-in-lending claim.” Thus,
the court concluded that where a delinquent-payment counterclaim and a
failure-to-disclose claim arose from the same note, they were logically
related, notwithstanding that the reasons for the delinquent payment had
nothing to do with the reasons for the failure to disclose.
On the other hand, in Hart v. Clayton-Parker and Assocs., Inc., 869 F.
Supp. 774 (D. Ariz. 1994), the plaintiff brought a claim for violation of a
related federal statute governing debt collectors (the Fair Debt Collection
Practices Act, or “FDCPA”). The creditor counterclaimed for the unpaid
balance. The district court noted that Plant represented a minority view
under the truth-in-lending statute and that all of the courts applying the
FDCPA had held that a claim for the unpaid balance was not a compulsory
counterclaim to an FDCPA claim. The court reasoned that “plaintiff's
FDCPA claim relates to the alleged use of abusive debt collection practices,
while the defendant's counterclaim” related to a state law debt; one turned
on written demand letters made during collection efforts, the other
statements in loan documents.
This flow chart summarizes the steps to determine if a claim is a
compulsory counterclaim, or not (again assuming no party must be joined):
2. Permissive Counterclaims
A counterclaim is permissive if it is not compulsory. FRCP 13(b). In
other words, a claim “may,” but need not be, brought if it:

Does not arise out of the same transaction or occurrence as the claim;
Does not exist at the time the defendant serves its answer;
Was already the subject of a pending suit when the action was filed;
Is in a case where jurisdiction is based on quasi in rem or in rem, but not in
personam jurisdiction; or
Requires for its adjudication the joining third parties of whom the court
lacks jurisdiction.

If a defendant chooses to file a permissive counterclaim, the court must

permit it to be filed. The word “may” in Rule 13(b) does not give discretion
to the court to deny the timely filing of a permissive counterclaim; rather, it
gives the defendant the choice either to join it. Rule 13(b) gives a defendant
the right to have a permissive counterclaim determined along with the
claims of the plaintiff. Montecatini Edison, S.P.A. v. Ziegler, 486 F.2d 1279,
1282 (D.C. Cir. 1973).
Again, remember that Rule 13 only authorizes joining a counterclaim.
Subject matter and personal jurisdiction and venue remain as requirements.
If you recall the goal — to litigate related claims in one suit — your
intuition should tell you that the law will likely allow compulsory
counterclaims to be adjudicated in one suit, but may not permit permissive
counterclaims that do not arise out of the same transaction or occurrence to
be litigated.

3. Impact of Rule 18(a)

If the defendant can properly assert a counterclaim against a plaintiff,
then Rule 18(a) authorizes the defendant to join all other claims it has
against the plaintiff, whether related to the counterclaim, or not. “A party
asserting a claim to relief as . . . a counterclaim . . . may join, either as
independent or as alternative claims as many claims . . . as the party has
against an opposing party.” Rule 18(a). Thus, a defendant has the same
unfettered authority that as a plaintiff to add additional claims once it
asserts a permissive or compulsory counterclaim that is properly anchored
in federal court. There is no requirement that an additional counterclaim
arise out of the same set of facts as the first counterclaim, for example.
But, before the defendant can take advantage of Rule 18(a)'s broad
authorization to join even completely unrelated claims, the defendant must
first have authority under Rule 13(a) or (b) to join at least one counterclaim
against the plaintiff and subject matter jurisdiction must exist and the
parties must examine whether independent bases for personal jurisdiction or
venue are required.

C. Procedure for Joining Claims

or Counterclaims
As illustrated above, a plaintiff exercises the authority granted by Rule
18(a) by joining in its complaint any additional claims it has. A plaintiff
may also amend its original complaint to join claims later. See Chapter 42.
A defendant can include in its answer any counterclaim that it has against
the plaintiff by pleading it, in form much like the plaintiff's complaint.
Typically, at the end of its answer the defendant will include a statement of
each counterclaim, generally following the format of a complaint. If a
defendant files an answer without including either form of counterclaim,
the defendant may have to seek leave to amend its answer. See Chapter 41.

Checkpoints

Can you explain when the Rules authorize a plaintiff to join a claim? When they require joinder?
When can a defendant join a claim against a plaintiff? What is that called? Against a defendant?
What is that called?
When must a defendant join a claim against a plaintiff?
Chapter 17

Authority to Join Parties

Party Joinder Roadmap

This chapter identifies the Rules that authorize joinder of a party to a suit, including as a
plaintiff, defendant, crossclaim defendant, counter-claim defendant, or third-party defendant.
This chapter also describes the narrow circumstances when Rule 19 requires that a party be
joined, or the claim be dismissed, and explains the process for making that determination.

This chapter explores joinder of parties. As you have seen and will see
further, although the Rules do circumscribe joinder, circumstances could
lead to a huge suit with many parties joining completely unrelated claims
that could be unmanageable. Consequently, even if joinder of claims or
parties is proper, a district court has discretion to sever claims completely
(putting them in distinct lawsuits), or to order separate trials (keeping them
together for pre-trial purposes, but then holding separate trials). See Chapter
18.

A. Joinder of Parties by Plaintiffs

1. Permissive Joinder of Parties by Plaintiffs
This first paragraph may sound silly but it is important. There is no rule
about joining or “being” the first plaintiff, or the first defendant. Someone
just “is” the first plaintiff and is the first defendant, at least so far as the
rules go. One rule, Rule 17 bears only a little on this issue. The real law
about who must be a plaintiff, and who must be a defendant, comes from
substantive law: third party beneficiary contract law explains, for example,
who may sue when a contract is breached; foreseeability doctrine in tort law
limits who can sue. Likewise, a defendant's duty — whether arising in tort,
contract, or by statute — generally governs who may be sued. Those are not
procedural rules, however.
 Rule 20(a) is the primary source of authority for two or more plaintiffs to
agree to file a suit together, to for one or more plaintiffs to agree to bring
one civil action against one or more defendants. That Rule permits a person
to join a suit as an additional plaintiff if the person's claim arises out of the
same basic set of facts as an existing plaintiff. Similarly, Rule 20(a) also
permits a plaintiff to join an additional defendant if the claim against that
person arises out of the same basic set of facts as the claim against another
defendant. In other words, the Rules generally permit: (A) everybody who
has a claim arising out of the same basic set of facts to join as a plaintiff in
one suit, and (B) joining as a defendant everyone who might be liable to a
plaintiff for what happened in that same basic set of facts. A district court's
decision granting or denying joinder of parties under Rule 20(a) will be
reversed only for abuse of discretion, and those instances are difficult to
find. Watson v. Blankinship, 20 F.3d 383 (10th Cir. 1994) (finding district
court had improperly permitted joinder of defendant against whom plaintiff
asserted an assault claim with a defendant against whom the plaintiff
asserted a tortious interference with contract claim).
In addition to Rule 20(a), if a defendant asserts a counterclaim against an
existing plaintiff, then that plaintiff may join a party as a third-party
defendant under Rule 14(b). Rule 14 is discussed below.

a. Permissive Joinder of One or More Co-

Plaintiffs by a Plaintiff
Rule 20(a)(1) describes when a party may join a party as a co-plaintiff.
Rule 20(a)(2) describes when a plaintiff may join a party as a co-defendant.
Rule 19 describes when a party must be joined — as either a plaintiff or
defendant. We'll tackle Rule 20 first.
When can an existing plaintiff join a party as a co-plaintiff? “Persons
may join in one action as plaintiffs if (A) they assert any right to relief
jointly, severally, or in the alternative with respect to or arising out of the
same transaction, occurrence, or series of transactions or occurrences; and
(B) any question of law or fact common to all plaintiffs will arise in the
action.” FRCP 20(a)(1). Thus, there are two requirements: (A) the person to
be joined as a co-plaintiff must assert a right to relief with respect to the
same transaction as another plaintiff and (B) there must be a question of
law or fact in common among their claims. Two plaintiffs do not need to
seek identical relief to be joined. FRCP 20(a)(3). Also realize that if one
plaintiff wants to sue alone, someone can't use Rule 20 to force themselves
to be a plaintiff; courts cannot use Rule 20 to “bring in” people to be
plaintiffs.

i. What Is the “Same Transaction or Occurrence”?

To determine whether a particular factual situation constitutes a
transaction or occurrence for purposes of Rule 20, courts consider whether
a “logical relationship” exists between the claims. See Mosley v. General
Motors Corp., 497 F.2d 1330, 1333 (8th Cir. 1974) (“‘Transaction’ is a
word of flexible meaning. It may comprehend a series of many occurrences,
depending not so much upon the immediateness of their connection as upon
their logical relationship.”). Figuring out what that means is aided by the
purpose of Rule 20(a): “to promote trial convenience and expedite the final
determination of disputes, thereby preventing multiple lawsuits.” Mosley,
497 F.2d 1330, at 1332. “Under the Rules, the impulse is toward
entertaining the broadest possible scope of action consistent with fairness to
the parties; joinder of claims, parties and remedies is strongly encouraged.”
United Mine Workers of America v. Gibbs, 383 U.S. 715, 724 (1966). Thus,
courts have defined “series of transactions or occurrences” broadly in
applying this Rule. See Mosley, 497 F.2d 1330.
For example, in Mosley, plaintiffs were African-American employees of
GM who alleged that GM had a general policy of discrimination against
African-Americans. Id. at 1331–33. Plaintiffs brought various claims, and
sought injunctive relief, back pay, and other relief for purported instances of
discrimination. The Mosley court held that the trial court had abused its
discretion in denying plaintiffs the opportunity to join together in one
action. The court recognized that joinder should be permitted of “all
reasonably related claims for relief by or against different parties” and that
“[a]bsolute identity of all events is unnecessary.” Id. at 1333. Applying that
law, the court held that the claims relating to “a company-wide policy
purportedly designed to discriminate against blacks in employment” arise
out the same series of transactions or occurrences, even though many of the
facts alleged in support of each plaintiff's claims were quite distinct. (The
court further concluded that the “discriminatory character of the defendants'
conduct” created a common question of fact sufficient to satisfy the rule's
second prong, discussed below.) See Puricelli v. CAN Ins. Co., 185 F.R.D.
139 (N.D.N.Y. 1999) (similar fact pattern as Mosley). In contrast, where a
policy is not alleged and the claims arise out of different employment
circumstances, courts have found joinder improper. See Sheets v. CTS
Wireless Components, Inc., 213 F. Supp. 2d 1279 (D. N.M. 2002).

ii. What is a “Common Question of Law or Fact”?

This requirement is minimal: there need be only a common question of
law or fact, not identity of legal and factual issues among the parties. See
Anderson v. Docuport, Inc., 2007 WL 485342 (S.D.N.Y. 2007). If a logical
relationship between the plaintiffs' claims exists, almost invariably there
will be a common question of law or fact.

b. Permissive Joinder of Co-Defendants by a

Plaintiff
Rule 20(a)(2) describes when a plaintiff may join a party as an additional
defendant. In parallel with the first sentence of Rule 20(a), the second
sentence provides: “Persons . . . may be joined in one action as defendants
if (A) any right to relief is asserted against them jointly, severally, or in the
alternative with respect of or arising out of the same transaction,
occurrence, or series of transactions or occurrences, and (B) any question of
law or fact common to all defendants will arise in the action.” Thus, there
are two requirements: (A) a right to relief must be asserted by a plaintiff
against the additional defendant with respect to the same transaction as the
claim against an existing defendant and (B) a question of law or fact in
common must exist between the claims. It is not necessary that the
defendant assert all, or the same, defenses as the other defendants. FRCP
20(a)(3).
These terms have the same meaning as under Rule 20(a)(1) concerning
plaintiffs: there must be a logical relationship between the claims and at
least one common question of law or fact.

2. Mandatory Joinder of Parties: Rule 19 as a

Narrow Exception to Party Autonomy
a. How Rule 19 Typically Gets Litigated
Rule 19 has some unusual aspects to it, and it's probably the densest of
any of the Rules, but luckily it's narrower than it sounds. We will break it
down into steps to master it. This section concludes with a flowchart to help
you pull the analysis together.
Why is it rare? Normally, a plaintiff is going to sue everyone who ought
to be sued so the plaintiff can obtain the full relief it wants and is entitled to.
If a plaintiff can make more money by suing two defendants rather than
one, more likely than not the plaintiff will sue them both. That's pretty
obvious.
Suppose, though, that a plaintiff doesn't (because it wants to avoid
joining a defendant who would destroy diversity), or can't join a person as a
defendant (because the court lacks personal jurisdiction over the defendant,
or venue would be improper over the claim against the additional
defendant), and not only is that person someone who “should” be a
defendant, but the court as a practical matter can't adjudicate the particular
claim without that person being joined as a party. What if, for example,
there's a dispute over who owns a painting. Bob claims title to the painting.
Susie and Ernie, jointly as husband and wife, also claim title to it. Bob
obviously ought to sue both Susie and Ernie. Most of the time, as noted
above, Bob will: why shouldn't he, if what he wants is an order from the
court giving him clear title to the painting?
But what if Bob doesn't, or can't sue both? Suppose, for example, that
Bob's lawyer realizes that the court lacks personal jurisdiction over Susie,
so suit is filed only against Ernie. Susie's not a party, and can't be made one,
but she says she has an interest in the painting at issue. A court can't decide
what she owns without her being a party. What happens?
Or, suppose Bob does sue both Ernie and Susie, but then Susie moves to
dismiss for lack of personal jurisdiction, and is dismissed from the case.
Can the case proceed against only Ernie? Often, the plaintiff does join every
defendant who really ought to be a party, but then one obtains dismissal of
claims against it for lack of personal or subject matter jurisdiction, or for
improper venue. The remaining defendants then move to dismiss the claims
against them under Rule 12(b)(7) for failure to join an indispensable party
— namely, the defendant that just got itself dismissed! See, e.g., Great-West
Life Annuity Ins. Co. v. Woldemicael, 2006 WL 1638497 (W.D. Wash.
2006) (after one defendant was dismissed for lack of personal jurisdiction,
other defendants moved to dismiss for failing to join an indispensable
party). Thus, a motion to dismiss for failure to join an indispensable party
often follows the dismissal for lack of personal or subject matter
jurisdiction, or for improper venue, of claims against one defendant in a
multiple defendant case. That's a typical way that the question of whether
someone who hasn't been joined to the suit must be joined.
Rule 19 is concerned with the problem of a suit lacking a party who
“really, really ought” to be there, whether the party was omitted by the
plaintiff or was named as a defendant but has been dismissed from the case.
Combined with Rule 12(b)(7), see Chapter 35, Rule 19 allows a party to
dismiss a claim when not everyone who “really, really ought” to be a party
isn't one and can't be joined as one.
With that background, we will break down Rule 19 to grasp its
unintuitive terminology and, in doing so, learn what the Rule means. Along
the way, we'll pull the whole thing together with a flow chart and other
visual aids that will help you master this rule.
A brief word on service of process and Rule 19. Rule 4(k)(1)(B) allows,
in addition to service under applicable long-arm statutes, service on a Rule
19 defendant within 100 miles of the court house, whether the defendant is
within the same state, or not. This “100 mile bulge” extends from a court
into an adjoining state if the defendant is joined under Rule 19.

b. Rule 19: Three Steps with a Venue-Related

Twist
Rule 19 requires three-steps to determine what, if anything, should be
done to decide a motion to dismiss under Rule 12(b)(7). In addition, the
Rule takes an unusual twist about venue. The three steps to determine what
impact an absent defendant has on a claim are:
1. If the absentee is not even a “necessary” party, deny the motion and
proceed with litigation.
2. If the absentee is a “necessary” party, order the person joined if
personal and subject matter jurisdiction are proper, without regard to
venue.
3. If personal and subject matter jurisdiction are not proper, or if the
person objects to venue after being joined and the claim cannot be
transferred to a place with proper venue, determine whether the claim
can proceed without the person. If so, proceed without joining the
person; if not, dismiss the claim or, if possible, transfer it to a proper
venue.
i. Is the Person a “Necessary” Party?
The first step is to determine whether the missing person is even a
“necessary” party. Often this will end the inquiry because “necessary” has
been construed very narrowly. Rule 19(a) defines necessary parties. There
are two, and only two, types of necessary parties:

These two types are much narrower than you probably think. I can't say it
enough though: it's rare that a party is “necessary.” “If understood in its
ordinary sense, ‘necessary’ is too strong a word, for it is still possible under
Rule 19(b) for the case to proceed without the joinder of the so-called
‘necessary’ absentee.” E.E.O.C. v. Peabody West. Coal Co., 400 F.3d 774,
779 (9th Cir. 2005). Instead of some intuitive meaning of “necessary,” Rule
19(a) “defines the person whose joinder in the action is desirable in the
interests of just adjudication.” Id.

(a) Parties Who Are Necessary to Accord Complete

Relief to Existing Parties
The first type of Rule 19(a) necessary parties are those in whose absence
complete relief cannot be accorded among those who are already parties. It
means only what it says, and is narrower than it sounds.
Suppose a plaintiff is injured by a defective product, and sues only the
retailer of the product, not the ultimate manufacturer. Is the manufacturer a
necessary defendant? Or, what if a plaintiff brings a claim arising out of a
conspiracy, but sues only one of the alleged conspirators. Are other
conspirators necessary defendants? Put broadly, is one joint tortfeasor a
necessary party to a suit against another?
 The answer is “no.” Joint tortfeasors are never even necessary parties.
For example, in Temple v. Synthes Corp., Ltd., 498 U.S. 5 (1990), plaintiff
was injured after a device that had been implanted in his spine during
surgery broke inside his body. The plaintiff filed a federal diversity suit
against the manufacturer and also filed a state court negligence suit against
the hospital and doctor who had performed the operation. The manufacturer
moved the federal court to dismiss under Rule 12(b)(7) for failure to join
indispensable parties — the hospital and doctor. The district court held that
they were necessary parties. The Supreme Court reversed for abuse of
discretion. It held that as a matter of law joint tortfeasors are not even
“necessary” parties: “it is not necessary for all joint tortfeasors to be named
as defendants in a single lawsuit.” Id. Because the absentee defendants were
not even “necessary” parties in terms of Rule 19(a), the Court concluded
that “no inquiry under Rule 19(b) [was] necessary, because the threshold
requirements of Rule 19(a) [had] not been satisfied.” Id.
The Court's holding is in line with the literal language of Rule 19(a)(1)
(A): a plaintiff can obtain complete relief against one of two joint
tortfeasors. The fact that one then may have a claim for contribution or
indemnity against a non-party does not mean the plaintiff can't obtain the
relief it is entitled to against the one defendant; it means that the one
defendant may have a claim against the non-party. (Nor, obviously, does a
party who might be liable to a plaintiff claim an interest in the suit — just
the opposite!) Other examples of this type of “necessary” parties include
co-obligees on a contract. Dickson v. Murphy, 2006 WL 2847238 (3rd Cir.
2006). Again, the term “necessary” is much narrower than it sounds.

(b) Parties Who Claim an Interest and Are

Necessary to Join
The second type of necessary party is someone who 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 a practical matter impair or
impede the person's ability to protect that interest or (ii) leave any existing
party subject to a substantial risk of incurring double, multiple, or otherwise
inconsistent obligations because of the claimed interest . . .” Rule 19(a)(1)
(B). Whether a person is an indispensable party must be determined on a
case-by-case basis and depends on the facts and circumstances. Helzberg's
Diamond Shops, Inc. v. Valley West Des Moines Shopping Center, Inc., 564
F.2d 816 (8th Cir. 1977).
 One example of this type necessary party arises when two people jointly
hold title to property, but only one is a named party to a suit over title to
that property. For example, in Broussard v. Columbia Gulf Transmission
Co., 398 F.2d 885 (5th Cir. 1968), the court held that the owner of a small
interest in real property was a necessary party to a suit to invalidate an
easement over that property. Likewise, as a general rule, if litigation of a
claim will result in a judgment that determines a non-party's rights under a
contract, that non-party is a necessary party. See Peregrine Myanmar Ltd. v.
Segal, 89 F.3d 41, 48 (2d Cir. 1996). But the suit must determine the non-
party's rights.
A case used in casebooks to illustrate this type of necessary party is Haas
v. Jefferson Nat'l Bank, 442 F.2d 394 (5th Cir. 1971). There, Haas sued the
bank, contending that even though the bank had known of an agreement
between Haas and Glueck whereby they agreed to jointly acquire some
stock in that bank, the bank had issued all of the shares and had paid
dividends only to Glueck. Haas sought an order compelling the bank to
issue 50% of the shares to him, or to pay him damages equal to that
amount. The bank argued that Glueck was an indispensable party, and the
district court ordered that he be joined. However, joinder destroyed subject
matter jurisdiction (Glueck was a citizen of the same state as Haas) and so
the court dismissed the complaint without prejudice. The appellate court
held that Glueck was a necessary party since he claimed an interest in the
stock and if he was not added as a party, the Bank might as a practical
matter face inconsistent obligations, since even if in this suit Haas was
awarded some of the stock, that would not preclude Glueck from being
awarded that same stock if he brought suit later.

ii. If the Person Is Necessary, Joinder Must Be Ordered

if Personal and Subject Matter Jurisdiction Exist
A party who is “necessary” must be joined. Thus, if an absentee is
“necessary” then joinder is required. If the absentee can be joined as a party
— if there is authority for the claim, subject matter jurisdiction exists,
venue is proper, and the court has personal jurisdiction — then the party is
joined and off everyone goes.
But, what does a court do if the absentee cannot be joined because the
court lacks subject matter jurisdiction over the claim, or personal
jurisdiction over the absentee?
 Here's the counter-intuitive part of Rule 19: the court doesn't have to
dismiss even if it lacks personal or subject matter jurisdiction over a claim
involving a person who is “necessary.” The word “necessary” may import
to you too much significance, and may lead you to counter-intuitive result.
Suit can proceed without joining a “necessary” party. “If understood in its
ordinary sense, ‘necessary’ is too strong a word, for it is still possible under
FRCP 19(b) for the case to proceed without the so-called ‘necessary’
absentee. In fact, FRCP 19(a) ‘defines the persons whose joinder in the
action is desirable in the interests of just adjudication.” Equal Employment
Opp'y Comm'n. v. Peabody Western Coal Co., 400 F.3d 774, 779 (9th Cir.
2005).
Instead, “necessary” means only that the analysis proceeds to the next
step: the court must determine whether the “necessary” person is
“indispensable.” That's what FRCP 19(b) defines. If the necessary person
indispensable, then, and only then, might the court have to dismiss if it can't
join the person as a party. Before we get there, though, you need to
appreciate the following: the venue twist.

(a) Joinder Can't be Ordered if Personal or Subject

Matter
Jurisdiction is Lacking, but Must be Ordered Even if
Venue is Improper
To determine whether a necessary person can be joined, there need only
be subject matter and personal jurisdiction. If either or both are lacking,
then the court must determine whether the necessary person is
“indispensable” under Rule 19(b).
The Rule treats venue differently. If the court has personal and subject
matter jurisdiction over a claim against the necessary absentee, that
absentee must be joined. If, after joinder, the necessary absentee objects to
venue and it's in fact improper, then the case proceeds — but without that
party. This comes from Rule 19(a)(3) which says: “If a joined party objects
to venue and the joinder would make venue improper, the court must
dismiss that party.” Thus, the person is joined, but if he objects to venue,
then claims against that party over which venue is improper must be
dismissed. Patterson v. MacDougall, 506 F.2d 1, 5 (5th Cir. 1971) (courts
will not pre-determine whether necessary party will object to venue);
Turner v. CF&I Steel Corp., 510 F. Supp. 537, 546–47 (E.D. Pa. 1981)
(joining necessary party to see if it raises improper venue as an objection).
Put another way, a necessary party must be joined without a court
determining whether or not venue would be proper. But, not all courts
recognize this, and some hold that improper venue is a basis to deny
joinder. E.g., Dickson v. Murphy, 2006 WL 2847238 (3rd Cir. 2006).
However, that's not what Rule 19(a)(3) says: it says dismiss that party. A
court doesn't dismiss someone who has never been made a party.
Once the absentee is joined as a party, then it can object if venue is
improper, and must do so under Rule 12(b)(3) and seek dismissal or transfer
under 28 U.S.C. § 1406(a) if venue is improper. See Rule 19(a)(3); Chapter
32. If venue is improper, then the court must dismiss or transfer. But what
joining the necessary party allows the court to do is to determine whether
there is a district to which the case can be transferred where venue, subject
matter jurisdiction, and personal jurisdiction will be proper. If there is no
such district or the court deems that the interests of justice do not warrant
transfer, then the court must grant the motion to dismiss for improper venue
by dismissing the necessary party after joining it. So, if personal or subject
matter jurisdiction are lacking, or if the party is joined but then dismissed
because it objects to improper venue, then the court must analyze the next
step.

iii. Determining Whether a Necessary Person Is Indispensable

Rule 19(b) defines “indispensable parties.” Indispensable parties are a
narrower subset of the already narrow category of necessary parties. The
question of indispensability only comes up if the court can't join a necessary
party or joins them but they object to venue and the court can't transfer the
claim but instead must dismiss.
A court faced with a necessary party that cannot be joined or after being
joined objects to venue and the claim can't be transferred must consider the
four factors in Rule 19(b) to determine whether that necessary party is also
“indispensable”:
(1) the extent to which a judgment rendered in the person's absence
might prejudice that person or existing parties;
(2) the extent to which any prejudice could be lessened or avoided by
protective provisions in the judgment, shaping the relief, or other
measures;
(3) whether a judgment rendered in the person's absence would will be
 adequate; and
(4) whether the plaintiff would have an adequate remedy if the action
were dismissed for non-joinder.
Based upon these and any other pertinent factors, the court must determine
whether it can “in equity and good conscience” proceed without joining the
necessary person or, instead, should dismiss the claim. Gardiner v. V.I.
Water & Power Auth., 145 F.3d 635, 640–41 (3rd Cir. 1998) (Rule 19(b)'s
factors are the most important but not the exclusive factors in assessing
indispensability).
The first factor “overlaps considerably with the Rule 19(a) analysis.”
Gardiner v. V.I. Water & Power Auth., 145 F.3d 635, 641 n. 4 (3rd Cir.
1998). Courts consider whether, as a practical matter, the absent party's
interests will be protected. Merrill Lynch, Pierce, Fenner and Smith, Inc. v.
ENC Corp., 464 F.3d 885, 892 (9th Cir. 2006). The second factor considers
whether the court can shape the judgment or relief sought to lessen the
prejudice arising from non-joinder. The third factor notes the interest of the
public in having a dispute completely, consistently, and efficiently resolved.
Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 111
(1968). The fourth factor considers whether, if the claim is dismissed, it
could be litigated in another state or federal court. See Bank of Am. Nat'l
Trust & Savs. Asss'n. v. Nilsi, 844 F.3d 1050, 1055 (3rd Cir. 1988). These
factors are not exclusive, and the entire inquiry is based on “the balancing
of competing interests” and is “steeped in pragmatic considerations.”
Mattel, Inc. v. Bryant, 446 F.3d 1011 (9th Cir. 2006). See Provident
Tradesmen's Bank & Trust Co. v. Patterson, 390 U.S. 102 (1968) (engaging
in lengthy analysis of practical consequences of proceeding without joining
a person).
Several casebooks include the Helzberg case. There, Valley West Mall
leased a space to Helzberg's, a full line jewelry story. A provision in the
lease stated that the Mall would not lease spaces to more than two other full
line jewelry stores. It leased two other spaces to full line jewelry stores, and
leased a space to Lord's Jewelers, but the lease provided that Lords would
not run a full line jewelry store. Even so, Lords intended to operate a full
line jewelry store in its space. Naturally, Helzberg filed suit, but it named
only Valley West Mall as the defendant, not Lords, even though it sought as
relief for its breach of contract claim an injunction to order Valley West
Mall not to permit Lords, or any one else, to operate a fourth full line
jewelry store in the mall.
 Valley West Mall moved to dismiss for failure to join an indispensable
party. The district court held that Lords was a necessary party under Rule
19(a), since the injunction would prevent Lords from operating its jewelry
store in the mall. However, the district court held that Lords was not
indispensable. The appellate court affirmed. It reasoned that Lord's rights
under its lease would not be adjudicated in the case between Helzberg and
Valley West Mall, since Lords was not a party to that case. The court also
held that, even if Valley West Mall might be subject to inconsistent
obligations as a result of the case, those inconsistent obligations were not
the result of the litigation, but the result of Valley West Mall entering into
potentially inconsistent lease agreements. It also reasoned that because the
district court had offered to let Lords intervene, the district court had taken
steps to protect Lord's interest. Finally, it held that any potential for
inconsistent obligations were merely speculative, since there was no
indication that Lords was about to sue Valley West Mall, nor that a court
would give its lease with Valley West Mall a reading inconsistent with the
district court's order here. Accordingly, although Lords was a necessary
party, it was not indispensable. The fact that it could not be joined did not
preclude the court from proceeding to judgment.
Another case from casebooks is Haas v. Jefferson Nat'l Bank, 442 F.2d
394 (5th Cir. 1971), which reached a different conclusion. In that case, Haas
alleged that the defendant bank had issued stock to Glueck that should have
been issued to him, and the bank knew it. The court not only held that
Glueck was a necessary party, as noted above, it held he was indispensable
under Rule 19(b) because without joining Glueck the bank would likely
face a second suit from Glueck over ownership of the shares, and it could
result in inconsistent obligations owed by the bank; a jury could hold in the
first case that Haas owned the stock, but in the second case that Glueck did.
Finally, it realized that Haas could join Glueck as a party in state court, and
resolve all the parties' ownership claims there.
If a court concludes it cannot proceed without the person joined as a
party, then the person is indispensable: the court must join the person if it
can do so without destroying subject matter jurisdiction, and it must
obviously have personal jurisdiction. If it cannot join the party for either or
both of those reasons, then the claim must be dismissed for failure to join
an indispensable party. If the party can be joined, but after joinder raises a
venue objection and venue is improper, then the court must dismiss the
claims against that party if it cannot transfer the case to a district is proper.
Curtis Management Group, Inc. v. Academy of Motion Picture Arts &
Sciences, 717 F. Supp. 1362, 1374 (S.D. Ind. 1989) (recognizing court
could transfer a case under 28 U.S.C. § 1406(a) where venue was improper
over claim against necessary party). For a discussion of transfer of venue,
see Chapter 39.
Finally, note that Rule 19 allows for joinder of a person not just as a
defendant, but also as an “involuntary plaintiff.” Suppose some but not all
of the members of a homeowners' association file suit, and the plaintiffs
want to join those homeowners who have not joined because they all have
an interest in the suit and meet the definition of necessary parties, and can
be joined. The existing plaintiffs can serve them with process and the court
will align them as plaintiffs to reflect their interests.
 B. Joinder of Parties by Defendants
The following table shows the only circumstances in which a defendant
has authority to join a party. As we'll see, the first two are identical grants
of authority that apply in slightly different circumstances.
1. Joining a Party to a Counterclaim or Crossclaim
Rule 13(h) doesn't have the meaning you might give it on first read. It
sounds like it permits a defendant to join a non-party and make a claim only
against it. Rule 13(h) is narrower than that.
A key point first. To take advantage of party joinder under Rule 13(h),
the defendant must have a counter- or crossclaim pending against an
existing party or must be making one in the pleading that seeks to join the
additional party as a counterclaim or crossclaim defendant, pursuant to Rule
13(h). “Rule 13(h) only authorizes a court to join additional persons to
adjudicate a counterclaim or cross-claim that is already in a filed pleading
filed or that is being filed at the same time joinder of the non-party is
sought. A counterclaim or crossclaim may not be directed solely against
persons who are not already parties to the original action, but must be
against at least one existing party.” F.D.I.C. v. Bathgate, 27 F.3d 850, 873–
74 (3d Cir. 1994). So, a defendant cannot under Rule 13(h) simply add a
plaintiff to assert a counterclaim against it without making a counterclaim
against an existing plaintiff:
The table should make the text of Rule 13(h) clear to you in its central
limitation: “Rules 19 and 20 govern the addition of a person as a party to a
counterclaim or cross-claim.” FRCP 13(h). Thus, a party can be joined if a
counterclaim or cross-claim is asserted against an existing party and joinder
of that additional party is proper under Rules 19 or 20. See, e.g., Schoot v.
U.S., 664 F. Supp. 293 (N.D. Ill. 1987).
Rule 13(h) allows joinder to parties as counterclaim plaintiffs or
counterclaim defendants. The additional party must be authorized to make a
claim, or have a claim made against it, under Rule 20 or 19. The same
analysis above about the operation of Rule 19 applies when a defendant is
acting like a plaintiff in asserting a counter- or crossclaim. A party asserting
a claim against two parties can join them either (1) under Rule 20 as
defendants to a claim if both (a) the two parties allegedly are liable for a
claim arising out of the same circumstances and (b) a common question of
law or fact will exists or (2) under Rule 19 if the person is either (a) a
“necessary” or (b) “indispensable” party.

2. Impleader of Third-Party Defendants

a. Scope of Rule 14(a)(1)
Rule 14(a)(1) is in some ways broader and other ways narrower than
Rule 13(h). Specifically, Rule 14(a)(1) does allow a defendant to join a
party without having to also assert a counter-claim or crossclaim against an
existing party, and so in that respect it is broader than Rule 13(h). Rule 14 is
the only Rule that permits a defendant to join a party without asserting a
claim against an existing party. (If a defendant asserts a counterclaim
against a plaintiff, the plaintiff may rely on Rule 14 to implead a third party.
See Rule 14(b).)
However, Rule 14 is narrower than Rule 13(h) in that it allows the
joinder of a third-party defendant only where that person “is or may be
liable to [the existing defendant who is seeking to join the person under
Rule 14] for all or part of the plaintiff's claim against” that existing
defendant. FRCP 14(a)(1). The existing defendant, as a “third-party
plaintiff” files a “third-party complaint” naming the non-party as a “third-
party defendant” and serves it on the other parties, and obtains service of
process on the non-party that it is seeking to join. This is called impleader.
Impleader is proper only when the basis for the claim by the third-party
plaintiff (the existing defendant) is that the third-party defendant is or may
be liable to the third-party plaintiff for all or a part of an existing plaintiff's
claim. That's a narrow: typically, impleader will be proper where the
defendant has a claim against the non-party should indemnify or at least
contribute to any judgment the plaintiff obtains against the defendant. So,
for example, impleader is proper where the defendant has a contractual
claim for indemnification against a non-party, or a claim for contribution or
indemnity arising under state or federal law. See, e.g., Price v. CTB, Inc.,
168 F. Supp. 2d 1299 (M.D. Ala. 2001) (impleading party authorized where
state law recognized an implied claim for indemnity on behalf of defendant,
against whom claims arising out of sale of defective chicken coops, against
non-party who had allegedly sold the defendant components for the chicken
coops). These are claims where the defendant can essentially allege: “if I'm
liable to the plaintiff, you, non-party, are liable to me.”
For these reasons, impleader is appropriate only when the third-party
defendant's liability to the third-party plaintiff is “dependent upon the
outcome of the main claim” or the third-party defendant is “potentially
secondarily liable as a contributor to the defendant.” Kenneth Leventhal &
Co. v. Joyner Wholesale Co., 736 F.2d 29, 31 (2d Cir. 1984). Impleader may
be used only “when the third-party defendant's potential liability is
dependent upon the outcome of the main claim” but cannot be used
otherwise, even if the claim “arises out of the same general set of facts as
the main claim.” Am. Express Travel Related Serv. Co., Inc. v. Beaumont,
2002 WL 31298867 (N.D. Tex. 2002).
So, for example, in one typical casebook case, Markvicka v. Broadhead-
Garrett Co., 76 F.R.D. 205 (D. Neb. 1977), a machine injured a student
during woodworking class. When the parents brought a products liability
claim against the machine's manufacturer, it filed a third-party complaint
against the school district, alleging that the school district owed
contribution to the manufacturer for any liability it had to the plaintiff
because the school district had improperly maintained the machine and had
failed to supervise the student. The court denied the school district's motion
to dismiss because under Nebraska law there was a right of contribution
among joint tortfeasors.
In contrast, joinder under Rule 14 is not proper where the defendant is
effectively alleging, “the plaintiff sued the wrong person, non-party: it's all
the non-party's fault.” Those claims are not within Rule 14(a) — the non-
party not someone who “is or may be liable to [the existing defendant] for
all or part of the plaintiff's claim against the” defendant. See, e.g.,
Watergate Landmark Condo. Unit Owner's Ass'n v. Wiss, Janey, Elstner
Ass'n., 117 F.R.D. 576, 578 (E.D. Va. 1987) (“a third-party claim is not
appropriate where the defendant and putative third-party plaintiff says, in
effect, ‘It was him, not me.’”). Put the other way, a defendant cannot use
Rule 14(a) to join a party who may be liable to the plaintiff. Barab v.
Menford, 98 F.R.D. 455, 456 (E.D. Pa. 1983); Allstate Ins. Co. v. Hugh Cole
Builder, Inc., 187 F.R.D. 671 (M.D. Ala. 1999); Walkill 5 Assocs. II v.
Tectonic Eng'r, P.C., 1997 WL 452252 (D.N.J. 1997).
So, for example, in a case the course books cover, Barab v. Menford, 98
F.R.D. 455 (E.D. Pa. 1983), the plaintiff sued a hotel after tripping over a
doormat. The hotel properly impleaded Channel, the party that had sold the
doormat to the hotel, alleging that the doormat was defective and so if the
hotel was liable to the plaintiff, the manufacturer had to indemnify the
hotel. Channel, in turn, relied on the language then in Rule 14(a) providing
that a “third-party defendant may proceed under this rule against any person
not a party to the action who is or may be liable to the third-party defendant
for all or a part of the claim made in the action against the third-party
defendant.” However, what the third-party defendant claimed was not that
the fourth party defendant had sold the doormat to it, and so was liable to it
if it was liable to the plaintiff, but instead alleged that the fourth party
defendant had, in fact, sold the doormat directly to the plaintiff. The district
court as a result denied the motion for leave to implead the fourth party
defendant.
Why the rule and its limitations? The purpose of this rule is to promote
efficiency by eliminating the need for the defendant to bring a separate
lawsuit against a third party for contribution or indemnity where that claim
arises out of the same occurrence as a plaintiff's claim against the
defendant. Where that efficiency is lacking, then the purpose of the Rule is
not met, and joinder is not authorized. In that regard, a district court has
discretion to permit or reject the joinder of even an appropriate third-party
claim. Walkill 5 Assocs. II v. Tectonic Eng'r, P.C., 1997 WL 452252 (D.N.J.
1997).

b. Time for Filing and Serving

A defendant has the right to file and serve a third-party complaint so long
as it is filed within 14 days of serving its original answer. FRCP 14(a)(1).
Otherwise, the third-party plaintiff must seek leave from the court to file the
third-party complaint. Id. The courts generally consider these factors in
deciding whether to grant leave to file when sought after the 14 day period:
(i) whether the movant deliberately delayed or was derelict in filing
the motion; (ii) whether impleading would unduly delay or complicate
the trial; (iii) whether impleading would prejudice the third-party
defendant; and (iv) whether the third-party complaint states a claim
upon which relief can be granted. The court must balance the benefits
derived from impleader — that is, the benefits of settling related
matters in one suit — against the potential prejudice to the plaintiff
 and third-party defendants.
Too, Inc. v. Kohl's Dept. Stores, Inc., 213 F.R.D. 138, 140 (S.D.N.Y. 2003).
See, e.g., Sovereign Sales, L.L.C. v. New York Accessory Group, Inc., 2005
WL 289577 (S.D.N.Y 2005) (denying motion for leave to file third-party
complaint sought two years after suit had been filed and where suit for
contribution could still be separately filed); Southern Boston Mgmt. Corp. v.
BP Prods. N. Am. Inc., 2004 WL 2624891 (Nov. 18, 2004) (filing permitted
where parties had not yet begun discovery).

c. Service of the Third-Party Complaint

While the long-arm statute may also be used, Rule 4(k)(1)(B) authorizes
service of a party joined under Rule 14 who is served “within a judicial
district of the United States and not more than 100 miles from the place
from which the summons issues.” Thus, in addition to service under long-
arm statutes, service on a third-party defendant within 100 miles of the
courthouse, whether the third-party defendant is within the same state or
not, is proper if the third-party defendant has minimum contacts with that
“bulge” area. Flight Extenders, Inc. v. Lakewood Aircraft Serv., Inc., 90
F.R.D. 676 (E.D. Pa. 1981). The third-party defendant, however, must be
served within the 100-mile bulge; it is not enough if it has minimum
contacts with the bulge, but is served elsewhere. Langsam-Borenstein
Partnership by Langsam v. NOC Enterp., Inc., 137 F.R.D. 217 (E.D. Pa.
1990).

3. Joinder of Additional Claims Under Rule 18(a)

If a defendant has one claim authorized by Rule 14(a) against a third-
party defendant over which the court has subject matter and personal
jurisdiction, then that claim can serve as an anchor claim for additional
claims under Rule 18(a). (Venue is not required over claims under Rule 14
by defendants, but it will almost inevitably be proper.) Consequently, the
defendant as a third-party plaintiff may join against the third-party
defendant all claims that the third-party plaintiff has to assert under Rule
18(a), whether or not related to the claim authorized by Rule 14(a). Again,
the district court may sever the claims or order separate trials.

Checkpoints
Can you describe when a plaintiff may be join a co-plaintiff? A co-defendant?
What is a necessary party under Rule 19? What happens if that necessary party cannot be joined? If a
party that cannot be joined indispensable?
Can you describe when a defendant may join a party to a cross-claim? Counterclaim? By way of
impleader?
Chapter 18

Multiple Parties and Joinder

Multiple Parties Roadmap

This chapter discusses some of the additional claims that can be brought once a party is
properly joined to a suit. Then it describes severance and separate trials — the two means by
which a court can simplify even the most convoluted cases for the entire litigation or just for
trial.

A. Crossclaims against Co-Parties and

Joinder
of Parties to Crossclaims
Rule 13(g) authorizes a party — plaintiff or defendant — to bring a
“crossclaim” against a co-party, that is, a party who is already, too, named
as a plaintiff or defendant. So, a plaintiff can bring a crossclaim against a
party already joined as a plaintiff, and a defendant can do so against a party
already joined as a defendant. This is joining claims against existing parties.
So, if two plaintiffs are properly joined as plaintiffs, one of them may
under Rule 13(g) assert a crossclaim against the other so long as the
crossclaim arises “out of the transaction or occurrence that is the subject
matter of the original action or of a counterclaim, or if the claim relates to
any property that is the subject matter of the original action.” FRCP 13(g).
A crossclaim “may include a claim that the co-party is or may be liable to
the crossclaimant for all or part of a claim asserted in the action against the
crossclaimant.” Id.; cf. FRCP 14(a). Crossclaims are permissive, not
compulsory, under the Rules.
So, for example, in Harrison v. M.S. Carriers, Inc., 1999 WL 195539
(E.D. La. 1999), a driver and passenger as plaintiffs sued another driver in
negligence arising out of a car wreck. The passenger then filed a crossclaim
against her fellow plaintiff, who was driving the car she was riding in. The
court held that the crossclaim was proper since it was against a co-party and
arose out of the same transaction or occurrence as the original claim.
Rule 18(a) applies once a crossclaim is properly asserted. Thus, a party
who asserts a crossclaim against a party can use Rule 18(a) to join even
unrelated claims against that same party.
The rules also allow joining a party to a crossclaim asserted against an
existing party. Specifically, Rule 13(h) allows a party who asserts a
crossclaim against an existing party to join a party to that crossclaim, either
as a cross-claim defendant or cross-claim plaintiff. But Rule 13(h) cannot
be used unless there is already an existing co-party against whom the
crossclaim is asserted, as is the case with counterclaims as we saw in the
earlier chapter.
What about compulsory counterclaims when a crossclaim is asserted?
Suppose Bob and Susie sue Jill for breach of contract. Bob also makes a
crossclaim against Susie. What if Susie has a claim that arises out of the
same transaction or occurrence as Bob's crossclaim against her? Does Susie
simply have a permissive crossclaim, or is Bob now an “opposing party”
and so the compulsory counterclaim rule applies? The courts split. Rainbow
Mgmt. Group., Ltd. v. Atlantis Submarines Hawaii, L.P., 158 F.R.D. 656 (D.
Haw. 1994). If, however, the crossclaim is merely one for indemnity or
contribution, courts hold that the parties do not become “opposing parties”
and trigger the compulsory counterclaim rule. See Hemme v. Bharti, 183
S.W.3d 593 (Mo. 2006).

B. Rule 14: Fourth-Party Defendants

and Beyond
Rule 14 is dense. Among the options it presents is the ability of the third-
party defendant to “assert against the plaintiff any claim arising out of the
transaction or occurrence that is the subject matter of the plaintiff's claim
against the third-party plaintiff.” FRCP 14(a)(2)(D). So, a third-party
defendant can bring a claim against the party who impleaded it if the claim
arises out of the transaction or occurrence. Rule 18(a) does not permit the
third-party defendant to join any additional claims, however.
Similarly, Rule 14(a)(5) permits the third-party defendant to “proceed
under this rule against a non-party who is or may be liable to the third-party
defendant for all or a part of any claim against it.” So, the third-party
defendant can file its own third-party complaint against a fourth-party
defendant, arguing that if the third-party defendant is liable to the third-
party plaintiff, the fourth-party defendant is liable to the third-party
defendant. The caption might look something like this:
Bob,
Plaintiff v.
Susie,
Defendant/Third-party plaintiff v.
Jill,
Third-party Defendant/Fourth-party plaintiff v.
Ernie,
Fourth-party Defendant
Finally, if a counterclaim is made against the plaintiff, the plaintiff is
authorized to bring a third-party complaint to the same extent as is a
defendant. FRCP 14(b). An interesting example of this arose in Guaranteed
Sys., Inc. v. Am. Nat'l Can Co., 842 F. Supp. 855 (M.D.N.C. 1994). The
defendant filed a counterclaim against the plaintiff in a case where subject
matter jurisdiction was based on diversity. The plaintiff then used Rule
14(b) to implead a third-party defendant who would be liable to the plaintiff
if the plaintiff were liable to the defendant on the counterclaim. The court
held the plaintiff had authority to join the third-party defendant. However,
for reasons we will see later, the court recognized that there was no original
jurisdiction over the claim and the supplemental jurisdiction statute
excluded a claim by a plaintiff against a party joined under Rule 14. See
Chapter 21.

C. Misjoinder, Severance, and Separate

Trials
Rule 21 provides that misjoinder of a claim or party is not grounds for
dismissal. Instead, the court may on its own or upon motion of a party drop
a claim or a party. FRCP 21. Thus, if joinder of a claim or party is improper,
the party or claim is dismissed, not the whole lawsuit.
In addition, as we've seen with respect to other joinder rules, rules allow
courts to sever claims from a lawsuit — they proceed as a separate suit —
or to order the claims remain together in one “suit” but for claims to be
tried separately to different juries.

Checkpoints

Can you identify a crossclaim and when it is proper to join a party to a crossclaim?
Do you understand how Rule 14(a) permits the third-party defendant to bring claims against the
plaintiff? To join fourth-party defendants?
Can you describe the likely impact of improper joinder?
Chapter 19

Interpleader: A Non-Party
Creates a Suit between
Two Parties

Interpleader Roadmap
This chapter describes the two types of interpleader, both of which allow a person who
holds property but claims no interest in it to force two or more others who do claim an interest
in that property to litigate their claims to that property.

The Rules authorize a person to file a proceeding that does not fit neatly
in any other chapter. Lawsuits often are between two parties, each of whom
claims it owns certain property or is entitled to certain rights. What if a
person possesses property, but doesn't believe he owns it, but two or more
other people have competing claims to the property, but the person who
possesses the property doesn't know which of them in fact is the rightful
owner? If the person keeps the property, he's going to get sued by two
parties; if he gives it to one of them, he may get sued by the other.
Interpleader allows a person in possession of property — called the
“stakeholder” — to settle the competing claims in one lawsuit by forcing
the people who claim to own the property to litigate the question of
ownership. It lets the stakeholder get out of their way, but he can seek
attorneys' fees and costs. Interstate Life Assurance Co. v. Sedlak, 1985 WL
1595 (N.D. Ill. 1985) (“federal courts have exercised their discretion to
award fees as a matter of course to disinterested stakeholders who are
forced to commence litigation through no fault of their own”).

A. What the Two Kinds of Interpleader

Share
 There are two types of interpleader: (1) “rule interpleader” under Rule
22; and (2) “statutory interpleader” under 28 U.S.C. §§ 1335, 1397 and
2361. We will address their many similarities first.
First, there must be a single and identifiable property, fund, or right. See
State Farm Fire & Cas. Co. v Tashire, 386 U.S. 523 (1967). Second, the
stakeholder must not claim an interest in the property, fund, or right. Third,
more than one claimant must assert claims to the property, fund, or right.
See Morongo Band of Mission Indians v. Ca. St. Bd. of Equalization, 858
F.2d 1376, 1381 (9th Cir. 1998). Fourth, the stakeholder must demonstrate a
real, reasonable fear of inconsistent liability. Indianapolis Colts v. Mayor &
City Council of Baltimore, 741 F.2d 954, 957 (7th Cir. 1984). Finally, fifth,
the stakeholder must timely file the interpleader action. Mendez v. Teachers
Ins. & Annuity Ass'n, 982 F.2d 783, 788 (2d Cir. 1992) (11 month delay
after receiving notice of claims was untimely).
After filing an interpleader action, the competing claimants — who,
unlike the stakeholder, do claim an interest in the property — litigate who
should be awarded title to the property. See Commercial Nat'l Bank v.
Demos, 18 F.3d 485, 487 (7th Cir. 1994).

B. Statutory Interpleader
Statutory interpleader has several benefits over rule interpleader. First,
Section 1335(a) creates subject matter jurisdiction more broadly than the
general diversity statute. Rather than requiring complete diversity and an
amount in controversy exceeding $75,000, subject matter jurisdiction exists
where: (a) two of the claimants have diverse citizenship, without regard to
the citizenship of the stakeholder, Truck-a-Tune, Inc. v. Re, 23 F.3d 60, 62
(2d Cir. 1994), and (b) the value of the property exceeds $500. See 28
U.S.C. § 1335(a). Second, venue is proper in any district where at least one
claimant resides. 28 U.S.C. § 1397. Third, the stakeholder can rely on
nationwide service of process. 28 U.S.C. § 2361. However, unlike rule
interpleader, the stakeholder must deposit the property with the court. 28
U.S.C. § 1335(a)(2). On the other hand, venue is not available under the
general venue statute for statutory interpleader. See New Jersey Sports
Prods., Inc. v. Don King Prods., Inc., 15 F. Supp. 2d 534 (D. N.J. 1998).

C. Rule Interpleader
Because it is a rule, not a statute, Rule 22 does not create any subject
matter jurisdiction. Instead, there must be either diversity or federal
question jurisdiction. Further, rule interpleader does not require that the
stakeholder deposit the property with the court, but a court can require that
it be deposited, and the stakeholder can ask the court to take possession of
it. See John v. Sotheby's Inc., 141 F.R.D. 29, 34 (S.D.N.Y. 1992).

D. Adjudication of Interpleader Actions

Interpleader actions generally involve two separate trials: in the first, the
parties try the issue of whether the stakeholder meets the conditions for
interpleader; if interpleader is proper, then in the second, the court will
determine which claimant should be awarded title to the property. NYLife
Distribs., Inc., v. Adherence Group, Inc., 72 F.3d 371, 375 (3rd Cir. 1995).
As an example of the first, in a case used in the casebooks, Don King
Productions, a New Jersey boxing promoter had possession of a $3 million
guaranteed minimum that ostensibly belonged to the loser of a boxing
match. It was unclear who should be paid the prize, however, because of
controversy over how the boxing match had ended. It could be that the prize
money belonged to various entertainment interests, or to the losing boxer,
or to other parties. The promoter therefore filed an interpleader action,
showing that there were adverse claims to the monies, and that it faced
inconsistent or multiple obligations if interpleader were not allowed.
If the court holds interpleader is improper and dismisses the case, the
order is immediately appealable, but if the court finds interpleader proper,
appeal cannot take place until after the second trial is held. Diamond
Shamrock Oil & Gas v. Comm'r of I.R.S., 422 F.2d 532, 534 (8th Cir. 1970).

Checkpoints

Can you describe when interpleader is proper?

Can you describe the similarities and differences between statutory and rule-based interpleader?
Chapter 20

Intervention: The Only Way

for Someone to Force Himself
into a Lawsuit

Intervention Roadmap
This chapter discusses the rare circumstances when a non-party may, or must be permitted
to, intervene in a lawsuit already pending between other parties.

What if a suit is pending and a person hasn't been joined as a party, but if
he is not joined, there will likely have to be another suit over, essentially,
the same issues? While normally the plaintiff and defendant control who is
joined to a suit, Rule 24 allows a person — called an “applicant” — to
voluntarily seek court permission to join a pending lawsuit even though
neither the defendant nor plaintiff sought to join it and even if all existing
parties in fact object to joinder. The purpose is to prevent the need for more
than one suit over the same basic set of facts.
However, the Rules do not permit a person to “crash” a lawsuit simply
because there might be multiple suits. Instead, the ability of an applicant to
intervene is very limited.
Why, you ask, would anyone want to be joined in a lawsuit? There are
many instances. Suppose, for example, that a plaintiff has sued a defendant,
and the defendant is about to disclose information to the plaintiff that a third
party believes is privileged. The plaintiff may want to intervene in that suit
to prevent the disclosure of the privileged information.

A. Intervention
There are two types of intervention: (1) intervention as of right; and (2)
permissive intervention. For either type, the applicant serves on the original
parties and files with the court a motion to intervene that explains the basis
for intervention and the claim or defense in which the applicant wants to
intervene. FRCP 24(c). The applicant should also include with that motion a
copy of the pleading — typically a complaint or an answer — on which it
seeks to intervene. Both types of intervention also have two types, as
summarized by this chart:

1. Intervention as of Right
There are two types: (a) statutory and (b) by rule. Where intervention is
as of right, the applicant does not need to establish an independent basis for
subject matter jurisdiction over its claim. Smith Pet. Serv. Int'l v. Monsanto
Chem. Co., 420 F.2d 1103, 1115 (5th Cir. 1972).

a. Rule 24(a)(1): Unconditional Statutory Right

Statutes that give private parties the unconditional right to intervene are
uncommon, but those that permit the federal government to intervene in
certain disputes are common. For example, if the constitutionality of a
federal statute is at issue, the federal government has the right to intervene.

b. Rule 24(a)(2): Rule-Based Right

Intervention as of right requires proof by the applicant of three elements:
(1) it timely filed an application to intervene in which it (2) claims an
interest relating to the property or transaction which is subject of the suit
and (3) shows that it is so situated that disposing of the action may as a
practical matter impair or impede the movant's ability to protect its interest,
unless existing parties adequately represent that interest. FRCP 24(a).
Timeliness is a flexible determination that examines whether the
applicant knew of the dispute but delayed, and considers the prejudice to
the parties as well as to the party seeking to intervene. Cohen v. Republic of
the Philippines, 146 F.R.D. 90 (S.D.N.Y. 1993). With respect to the second
element, the applicant need not be interested in every aspect of the case, but
must claim an interest in subject matter involved in the suit. It is sufficient
if the litigation could result in an injunction that will affect the intervener's
interest. Daggett v. Comm. on Gov'tal Ethics & Election Practices, 172 F.3d
104, 110–11 (1st Cir. 1999). With respect to the third element, the applicant
must show that its ability to protect the interest as a practical matter will be
impaired or impeded if it is denied intervention. For example, it is sufficient
if the relief sought in the suit will affect the proposed intervenor's
contractual rights. B. Fernandez & HNOS, Inc. v. Kellogg USA, Inc., 440
F.3d 541, 545 (1st Cir. 2006).
A case cited in the casebooks and applying these principles is Cohen v.
Republic of the Philippines, 146 F.R.D. 90 (S.D.N.Y. 1993), where Imelda
Marcos (wife of the former dictator of the Philippines) moved to intervene
in an interpleader action between the government of the Philippines and
Cohen over which of the two owned certain valuable paintings. Marcos
claimed that neither of them owned them; she did. The court granted her
motion to intervene because she had moved to intervene within five months
of learning of the dispute and without great prejudice to the parties, who
knew she claimed and interest in the paintings. She supported her claim to
the paintings with an affidavit explaining how she acquired them with her
own money. Finally, she showed that the existing parties did not represent
her interest, since her interest was contrary to both of their interests.

2. Permissive Intervention
An applicant seeking permissive intervention must establish an
independent basis for subject matter jurisdiction over its claim, unlike
intervention as of right.

a. Rule 24(b)(1)(A): Conditional Statutory Right

Federal statutes may give a private party or the federal government a
conditional right to intervene in a suit. These are not common but obviously
control when applicable.

b. Rule 24(b)(1)(B): Rule-Based Conditional

Right
Under Rule 24(b)(1)(B), the applicant may be allowed to intervene if it
has a claim or defense that shares a common question of law or fact with
the pending case. This is narrower than it sounds, however: the “an
applicant must (1) timely file an application, (2) show an interest in the
action, (3) demonstrate that the interest may be impaired by the disposition
of the action, and (4) show that the interest is not protected adequately by
the parties to the action.” In re Bank of N.Y. Derivative Litig., 320 F.3d 291,
300 (2d Cir. 2003). “Failure to satisfy any one of these [four] requirements
is a sufficient ground to deny the application.” Id.

C. Impact of Intervention on
Subject Matter Jurisdiction
Where jurisdiction is founded on diversity, the intervention of a non-
diverse party will not destroy subject matter jurisdiction unless the
intervenor is indispensable under Rule 19 Freeport-McMoRan, Inc. v. KN
Energy, Inc., 498 U.S. 426, 428–29 (1991) (presence of a non-diverse and
not indispensable defendant intervenor does not destroy complete diversity
under Section 1332). Even if the intervenor's presence destroys complete
diversity because it is indispensable, there may be supplemental
jurisdiction. See Chapter 21.

D. Appellate Review
Appellate courts review the denial of a motion to intervene for abuse of
discretion. B. Fernandez & HNOS, Inc. v. Kellogg USA, Inc., 440 F.3d 541,
544 (1st Cir. 2006). Thus, “even [where] there is common question of law
or fact, or the requirements of 24(b) are otherwise satisfied,” a district court
may deny permissive intervention if such would “unduly delay or prejudice
the adjudication of the rights of the original parties.” Kneeland v. Nat'l
Collegiate Athletic Ass'n, 806 F.2d 1285, 1289 (5th Cir.1987).

Checkpoints
Can you describe when intervention is permitted?
Can you describe when intervention is mandatory?
Chapter 21

Joinder Step Two: Original or

Supplemental Subject Matter
Jurisdiction Must Exist

Joinder Step Two Roadmap

This chapter explains the second step for determining whether a claim or party can be
joined to a suit — whether from the beginning or after it is filed by amendment of a pleading.
This chapter explains that either original subject matter jurisdiction or supplemental subject
matter jurisdiction must exist over every claim by a party, and explains the process to
determine if supplemental jurisdiction exists.

A federal court must have subject matter jurisdiction over each claim. In
Chapter 4 we studied the two forms of original subject matter jurisdiction,
diversity and federal question. There must be at least one claim over which
the court has original subject matter jurisdiction, personal jurisdiction, and
venue (or, with respect to the latter two requirements, if lacking or
improper, the defendant does not object). Not all claims have to have
original subject matter jurisdiction (or personal jurisdiction or venue —
matters we will get to later).
With respect to subject matter jurisdiction, Congress gave federal courts
power in 28 U.S.C. § 1367 to resolve additional claims, even without
original jurisdiction, so long as they are closely related to a claim over
which district courts do have original jurisdiction and the additional claims
meet other requirements in that statute. The power of federal courts to
adjudicate related claims is now determined solely by § 1367. If the case is
anchored in federal court by one claim, subject matter jurisdiction can —
for additional claims — come from Sections 1331, 1332 or 1367.

A. Is There Original Subject Matter

 Jurisdiction Over the Additional Claim?
If the additional claim arises under federal law or satisfies the diversity
statute, then original subject matter jurisdiction exists. In addition, if the
claim is one that can be aggregated with another claim for diversity
purposes, then original diversity subject matter jurisdiction over that claim
exists. See Chapter 4. Even if there is no original subject matter jurisdiction,
there still may be “supplemental” jurisdiction over an additional claim. We
next turn to that issue.

B. Is There Supplemental Jurisdiction

Over
the Additional Claim?
Supplemental jurisdiction is now codified in § 1367. That statute arose
after case law had confronted the fact that often a court will have original
subject matter jurisdiction over one claim (the claim that anchors the case in
federal court), but not original subject matter jurisdiction over closely
related claims even though, as a matter of efficiency, the additional claims
ought to be tried along with the anchor claim. Often, for example, a plaintiff
would assert a federal question claim and closely related state law claims: if
there was no diversity jurisdiction over the state law claims, then without
some way to keep those additional claims in federal court, it might hear the
federal claim but a state court might have to hear the state claims, even
though they arose out of the exact same set of facts and involve the same
parties. Cases, including United Mine Workers v. Gibbs, 383 U.S. 715, 725
(1966) and Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365 (1978),
gave federal courts power over “ancillary” and “pendent” parties and claims
to enhance the efficiency of litigation that, nonetheless, stayed within
statutory and constitutional limitations on federal power.
In response to case developments, Congress adopted § 1367 to replace
“pendent” and “ancillary” jurisdictional constructs with what it called
“supplemental jurisdiction.” Section 1367 is still relatively new, and
substantial litigation has occurred over its meaning. Some people think it is
not a well drafted statute. Even so, the Court has emphasized that ordinary
statutory rules of interpretation apply to Section 1367 and that it is
important to analyze its “text in light of context, structure, and related
statutory provisions.” ExxonMobil Corp. v. Allapattah Serv., Inc., 545 U.S.
546 (2005). Consistent with its general approach to statutory interpretation,
the Court has given § 1367 its plain meaning. Id.
One goal of § 1367 was to allow federal courts to efficiently resolve all
of the claims that were part of the same “case or controversy” giving rise to
an anchor claim, but, at the same time, to prevent parties from structuring
lawsuits to get into federal court on a claim that could not originally have
been brought in federal court if all of the parties had been properly joined.
For example, Congress did not want a plaintiff to name one diverse
defendant when, to effectively resolve the claim, a non-diverse defendant
was a necessary party to the suit. The plaintiff shouldn't be allowed to sue
one defendant who was diverse, but then after that defendant joins the non-
diverse defendant, the plaintiff then makes a claim against it, thereby
obtaining relief in federal court when it could not have brought the claim
originally.
Whether § 1367 succeeded in achieving that goal is another matter. We'll
see some very difficult issues Section 1367 creates, many of which are
counter-intuitive to both principles that apply to the diversity statute and to
efficient resolution of litigation. The courts struggle with this statute and
will continue to do so during your career as a lawyer.
You should use three steps to determine whether supplemental
jurisdiction exists. Each step has sub-parts. Fortunately, once you master the
three steps, they collapse into the very simple two-part chart that appears
below. It won't make sense to you now, but come back to it and you'll see its
utility. There's also a long flowchart later.
1. Step One: Is the Additional Claim Part
of the Same “Case or Controversy” as an
Anchor Claim?
Boiled down, the first subsection of § 1367 is designed to give district
courts additional — “supplemental” in that sense of the word — subject
matter jurisdiction over claims that are closely enough related to an anchor
claim to be considered part of the same case or controversy. (We'll see that
§ 1367(b) is designed to avoid allowing parties to structure cases to get
federal jurisdiction when it “shouldn't” be allowed, and § 1367(c) is
designed to promote federalism concerns.) Section 1367(a) accomplishes
this goal of giving federal courts supplemental jurisdiction over related
claims by providing:
 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.
This section gives federal courts over a claim that is part of the case or
controversy involved in the claim over which the court has original subject
matter jurisdiction. It would allow, for example, a federal district court to
hear a non-diverse state law claim that is related to a plaintiff's federal
question claim. The district court would have original subject matter
jurisdiction over the federal question claim, and assuming the additional
claim is related “enough” to form part of the same case or controversy, it
would have supplemental jurisdiction over the non-diverse state law claim.
So, the first inquiry is whether the additional claim is “so related to
claims in the action within such original jurisdiction that they form part of
the case or controversy under Article III of the United States Constitution.”
Put in pragmatic terms: is the additional claim so closely related to an
anchor claim (remember, too, that a case can have multiple anchor claims)
that the additional claim should be treated as part of the same case?
In a case the casebooks discuss but which was decided prior to enactment
of Section 1367, the Court had reasoned that claims that “derive from a
common nucleus of operative fact” are part of the same case or controversy.
United Mine Workers of Am. v. Gibbs, 383 U.S. 715 (1966). Some courts
hold that the “case or controversy” language in Section 1367(a) means the
same thing as Gibbs' “common nucleus” test. See Achtman v. Kirby,
McInerney & Squire, LLP, 464 F.3d 328, 335 (2d Cir. 2006) (explaining
that the Gibbs test applies under 1367(a)). Other courts, however, have
concluded that Section 1367(a) goes farther. Jones v. Ford Motor Credit
Co., 358 F.3d 205, 212 n.5 (2d Cir. 2004). The issue is this: does Gibbs'
statement of “common nucleus of operative facts” define “case or
controversy” or does it define something less than that, and so “case or
controversy” is broader? See Jones, 358 F.3d at 213 (concluding that
Section 1367(a) is likely broader than Gibbs). Whether Section 1367(a)
extends supplemental jurisdiction beyond the scope of claims with a
“common nucleus of operative facts” remains for the Court to answer.
Until then, whether a claim arises from the same case or controversy as
an anchor claim likely will continue to turn on Gibbs' common nucleus of
operative facts test. Under that test, one claim shares a common nucleus of
operative facts with another if the facts underlying one claim substantially
overlap with the facts underlying the other claim. Achtman, 464 F.3d at 335.
Would you expect them to be litigated together? See Gibbs, 383 U.S. at
725; Lindsay v. Gov't Employees Ins. Co., 448 F.3d 416, 424 (D.C. Cir.
2006) (collecting cases holding that if the facts necessary to prove one
claim are practically the same as those necessary to prove another, then they
form the same case or controversy).
A casebook case is Jin v. Ministry of State Security, 254 F. Supp. 2d 61
(D. D.C. 2003). There, the defendant argued that the court lacked
supplemental jurisdiction over a state law claim for defamation because it
did not arise out of a “common nucleus of operative facts” as the plaintiffs'
federal civil rights claim. The court reasoned that “the facts supporting the
defamation claims are linked to the facts supporting the remaining claims
because they form a key part of an alleged overarching campaign to abridge
and nullify the plaintiffs' rights and liberties” and so would be expected to
be tried together.
There's one very difficult issue that concerns diversity jurisdiction and
joinder that needs emphasizing. Luckily, it arises only when the only basis
for original jurisdiction is diversity, and only when party, as opposed to
claim, joinder is at issue. Here's the issue: Section 1332, as we saw, requires
“complete diversity.” What happens if a diverse plaintiff making a claim for
more than $75,000 joins a second plaintiff, and either the amount in
controversy does not exceed $75,000 or the second plaintiff is a citizen of
the same state as the defendant?
One way to look at it — and, frankly, I think the right way — is that the
court has original jurisdiction over the claim by the diverse plaintiff that
exceeds $75,000, and to then turn to the supplemental jurisdiction statute to
determine whether there is subject matter jurisdiction over the second
plaintiff's claim. That would be consistent with the approach to federal
question jurisdiction, and it would also be consistent with the way venue,
personal jurisdiction, and virtually all aspects of civil litigation are
determined.
But, the Court in Exxon Mobil Corp. v. Allapattah Serv., Inc., 125 S.Ct.
2611 (2005) rejected that approach — at least in part, but only in dicta. The
Court held, first, that the claim-by-claim approach does apply where the
diversity jurisdictional defect is due to the amount in controversy: so, if one
diverse plaintiff asserts a claim for more than $75,000, and a second diverse
plaintiff asserts a claim for less than that amount, the court has original
jurisdiction over the first claim, and whether it has jurisdiction over the
second turns on whether supplemental jurisdiction exists. (Obviously, if the
plaintiffs can aggregate, then there would be original jurisdiction.)
However, in very strong dicta, the Court said that citizenship is different
from amount in controversy: if a diverse plaintiff joins a non-diverse
plaintiff in a suit, the lack of complete diversity “contaminates” the entire
case, and there is no “original jurisdiction” at all — and so nothing for any
additional claim to anchor to. As the Court viewed it, “[i]ncomplete
diversity destroys original jurisdiction with respect to all claims, so there is
nothing to which supplemental jurisdiction can adhere.” Id. As a result, if
one diverse plaintiff joins one non-diverse plaintiff to each assert a claim
for more than $75,000, a court will lack subject matter jurisdiction over the
entire case, at least according to the ExxonMobil dicta. E.g., Picciotto v.
Continental Cas. Co., 512 F.3d 9 (1st Cir. 2008) (at least where the non-
diverse plaintiff is indispensable in terms of Rule 19, joinder destroys
diversity jurisdiction over entire case). It may be that “contamination”
occurs only if the non-drivers plaintiff is indispensable under Rule 19, but
that remains an open issue, except it is inconsistent with the ExxonMobil
dicta. (But I think that's right.)
If an additional claim does arise out of the same “case or controversy,”
the district court must exert jurisdiction over the claim, unless it is excluded
by operation of either Section 1367(b) or 1367(c). Put the other way, a court
has no discretion under Section 1367(a) to decline to exercise supplemental
jurisdiction over a claim that is part of the same case or controversy as a
claim over which it has original jurisdiction. Lindsay v. Gov't Employees
Ins. Co., 448 F.3d 416, 421 (D.C. Cir. 2006) (collecting cases). This is
because Section 1367(a) states that the courts “shall have” supplemental
jurisdiction over such claims. See id.
Be sure you understand that a claim against one defendant can be part of
the same case or controversy as a claim against another defendant; likewise,
a claim by one plaintiff against one defendant can be part of the same case
or controversy as a claim by another plaintiff against a different defendant.
The last sentence of Section 1367(a) makes this clear: “Such supplemental
jurisdiction shall include claims that involve the joinder or intervention of
additional parties.” So long as the claim arises from the same common
nucleus of operative facts, it doesn't matter if the plaintiff bringing the claim
is distinct from another plaintiff, or the claim is against a different
defendant.
The next two steps — lengthy as they are — each arises from a few
words at the beginning of § 1367 (a): “Except as provided in subsections
(b) and (c). . . .”

2. Step Two: Even if it is Part of the Same “Case or

Controversy” and is not “Contaminated” does
Section 1367(b) Preclude Supplemental
Jurisdiction
Over the Additional Claim?
The second step of determining whether supplemental jurisdiction exists
occurs only if Section 1367(a) is satisfied — the additional claim is part of
the same “case or controversy” as an anchor claim. Subsection (b) provides
the second step. It is best to break Section 1367(b) into two sub-steps. The
first one is easy and can mean skipping the harder, second step.

a. Is the Additional Claim Anchored by a Federal

Question Claim?
If there is at least one anchor claim based on federal question subject
matter jurisdiction, then there will be supplemental jurisdiction over a non-
diverse state law claim related to it. If so, then you can skip to the third
step. Why can you stop there? The lead in clause to Section 1367(b) is a
condition for all the rest of that subsection: if the civil action is not founded
solely on diversity, then the rest of subsection § 1367(c) doesn't matter. So,
if there is one federal question anchor claim, under Section 1367(a), there
will be supplemental jurisdiction over all other claims that arise out of the
same case or controversy, and Section 1367(b) excludes none of them.
Lindsay v. Gov't Employees Ins. Co., 448 F.3d 416, 421 (D.C. Cir. 2006)
(explaining that subsection (b) “relates to diversity jurisdiction only”).
Now look back at the charts. The chart labeled “Federal Question” has
only one “stop sign” in it (i.e., if federal question is the anchor claim, there's
only one way there's no supplemental jurisdiction over a related claim): if
the additional claim is not part of the same case or controversy as the
federal claim. (We'll get to § 1367(c) when we get to the third step; to be
very precise, however, § 1367(c) does not exclude claims, since the court
has supplemental jurisdiction, but § 1367(c) gives the court discretion not
to exert that power. That's why § 1367(c) is represented on the charts as a
yield sign, not a stop sign.)
However, if there is no federal question claim, that brings us to the
second sub-step. The words of § 1367(b) are very important:
(b) In any civil action of which the district courts have original
jurisdiction founded solely on section 1332 of this title, the district
courts hall not have supplemental jurisdiction under subsection (a)
over claims by plaintiffs against persons made parties under Rule 14,
19, 20, or 24 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.
Section 1367(b) presents a thicket, but one not as dense as it seems. There
are three ways that we'll learn it: by text, flow chart, and a graphic.

i. What's Not Excluded by Section 1367(b)?

(a) No Claim Is Excluded if There is at Least one

Federal
Question Anchor Claim
To make clear what we just went through in the first sub-step, the first
clause of subsection 1367(b) limits its applicability to only those civil
actions where original jurisdiction is founded solely on diversity.
Accordingly, nothing is excluded by subsection 1367(b) if there's at least
one federal question in the complaint.

(b) No Claim by a Defendant or a Party Sought to be

Joined
as a Defendant is Excluded
 Subsection 1367(b) only affects claims by plaintiffs or parties sought to
be joined as plaintiffs. See Hartford Steam Boiler Inspection & Ins. Co. v.
Quantum Chem. Corp., 1994 WL 494776 (N.D. Ill. 1994). Specifically,
where jurisdiction is founded solely on diversity, subsection 1367(b)
excludes even a claim that is part of the same case or controversy of an
anchor claim if that claim:

Is by a plaintiff against person joined under Rule 14;

Is by a plaintiff against person joined under Rule 19;
Is by a plaintiff against person joined under Rule 20;
Is by a plaintiff against person joined under Rule 24;
Is by a person proposed to be joined as plaintiff under Rule 19; or
Is by an applicant seeking to intervene as a plaintiff Rule 24.

(c) No Claim by a Single Plaintiff against a Single

Defendant is Excluded
If a single plaintiff is seeking to add a claim against a single defendant,
no claim is excluded by subsection 1367(b). Although the claim is by a
plaintiff, neither the plaintiff nor the defendant is “joined” under any of the
listed rules. (Recall that the first plaintiff and first defendant are not
“joined” in any term in the rule, except to a limited extent by Rule 17.)
Further, Rule 18(a) authorizes a plaintiff to join an additional claim —
and Rule 18(a) is not mentioned in subsection 1367(b). Thus, if an
additional claim by a plaintiff against a defendant forms part of the same
case or controversy as an anchor claim by that plaintiff against that
defendant, subsection 1367(b) will never exclude that claim.
Think of the big picture: the combined effect of Rule 18(a) and
subsections 1367(a) and (b) is to permit each plaintiff to join in a suit all
claims it has against a defendant that arise out of the same case or
controversy as an anchor claim — a claim that will be in federal court —
that the plaintiff has against that defendant. The goal of efficiency is met,
and because the additional claim is related to an anchor claim that the
federal court must address anyway, the plaintiff is not avoiding limitations
on federal subject matter jurisdiction.

ii. What is Excluded?

 Where jurisdiction is founded solely on diversity, subsection 1376(b)
excludes even a claim that is part of the same case or controversy of an
anchor claim if that claim:

Is by a plaintiff against person joined under Rule 14;

Is by a plaintiff against person joined under Rule 19;
Is by a plaintiff against person joined under Rule 20;
Is by a plaintiff against person joined under Rule 24;
Is by a person proposed to be joined as plaintiff under Rule 19; or
Is by an applicant seeking to intervene as a plaintiff Rule 24.

This is why it is important to identify the authority in a rule to join the

claim or party. See Chapters 14 to 20. You have to identify the rule that
authorizes joining the claim or party to know whether subsection 1367(b)
takes away supplemental jurisdiction. This next step is simply mechanical:
since you've identified what rule authorizes joinder of the claim or party,
simply see if it is excluded by subsection 1367(b).
Now look back at the chart in the prior chapter concerning cases where
there is no federal question jurisdiction. Notice that it has a ‘stop sign’ for
each of these exclusions: the district court cannot exert supplemental
jurisdiction over a claim that is not within subsection 1367(a) or is excluded
by subsection 1367(b) (and may choose not to exert jurisdiction under
subsection 1367(c), which we'll get to). If a claim is excluded under
subsection 1367(b), then the court must dismiss that claim for lack subject
matter jurisdiction.
Dismissal is not required with the third step: if the court has subject
matter jurisdiction over the additional claim because it's within subsection
1367(a) and is not excluded by subsection 1367(b), the district court may
nonetheless decline to exercise subject matter jurisdiction over the
additional claim. We turn there now.

3. Step Three: Does the District Court Have

Discretion
to Decline to Exercise Supplemental Jurisdiction
Over
the Additional Claim?
Courts must apply subsection 1367(c) even if the claim is part of the
same case or controversy as an anchor claim and is not excluded by
subsection 1367(b). With respect to such claims, the court has supplemental
jurisdiction but subsection 1367(c) gives the court discretion under certain
circumstances to decline to exert supplemental jurisdiction over that
additional claim. Notice that both charts have a ‘yield sign’ for subsection
1367(c). But even if the additional claim “fits in” a subsection of subsection
1367(c), the court has discretion to keep the claim.
Subsection 1367(c) codifies Congressional concern over unnecessarily
intruding into matters of state law. It gives district courts discretion to
decline to exercise supplemental jurisdiction where Congress concluded
that the federal interest in the type of dispute was slight. That subsection
provides:
(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.
Notice how subsection 1367(c) operates: it gives the district court discretion
to dismiss a claim, but that discretion arises only if one of the four
circumstances in subparagraphs (1) to (4) are present. If one of those
circumstances is not present, then the district court must exert jurisdiction.
Lindsay v. Gov't Employees Ins. Co., 448 F.3d 416, 421 (D.C. Cir. 2006);
Schwarm v. Craighead, 233 F.R.D. 655, 658 n. 4 (E.D. Cal. 2006)
(collecting cases holding that, unless one of the predicates in subsection
1367(c) is present, a court cannot decline to assert supplemental
jurisdiction); Tinius v. Carroll County Sheriff Dept., 255 F. Supp. 2d 971,
977 (N.D. Iowa 2003) (“The statute plainly allows the district court to reject
jurisdiction over supplemental claims only in the four instances described
therein.”). We'll now explore each circumstance that must be present before
the court may decline to exercise supplemental jurisdiction.

a. The Four Triggers to Exercise of Discretion in

the
Subparagraphs of Subsection 1367(c)
Again, the triggers listed in subsection 1367(c) are the only four
circumstances that permit a district court to exercise its discretion to
dismiss claims over which the court has supplemental jurisdiction.
Executive Software N. Am., Inc. v. U.S. Dist. Ct., 24 F.3d 1545, 1556 (9th
Cir. 1994).

i. Dismissal of an Additional Claim That Raises a Novel

or Complex Issue of State Law
Subparagraph 1367(c)(1) codifies the policy of avoiding federal court
involvement in novel or complex issues of state law. The federal court may
“guess” wrong about what state law means, and as a result interfere with the
development of state law, as well as do injustice to the parties before it. But
the exception is is narrow: it is not enough for the issue to be simply one
that on which there is no case precisely on point. Instead, courts have found
this subparagraph met when the claim raises “issues of first impression that
are numerous or of [state] constitutional magnitude.” Schwarm v.
Craighead, 233 F.R.D. 655, 658 (E.D. Cal. 2006) (finding discretion not
triggered even though the claim presented a novel, but “unexceptional”
question of interpreting a state statute); see Jin v. Ministry of State Security,
254 F. Supp. 2d 61 (D.D.C. 2003) (“The court is reluctant . . . to equate
difficulty with complexity.”).

ii. Dismissal of an Additional Claim That Substantially

Predominates Over the Claim or Claims Over Which the
District Court has Original Jurisdiction
This subparagraph gives another reason why a federal court, with
original jurisdiction over one claim, may dismiss a state law claim that is so
closely related to that claim that they form the same case or controversy. A
district court pointed to the divided nature of government as the basis for
this exception:
 Litigation in the federal courts involving both federal law claims and
supplemental state law claims has caused procedural and substantive
problems. Even if the federal and state claims in this action arise out of
the same factual situation, litigating these claims together may not
serve judicial economy or trial convenience. Federal and state law
each have a different focus, and the two bodies of law have evolved at
different times and in different legislative and judicial systems.
Because of this, in almost every case with supplemental state claims,
the courts and counsel are unduly preoccupied with substantive and
procedural problems in reconciling the two bodies of law and
providing a fair and meaningful proceeding.
The attempt to reconcile these two distinct bodies of law often
dominates and prolongs pretrial practice, complicates the trial,
lengthens the jury instructions, confuses the jury, results in
inconsistent verdicts, and causes post-trial problems with respect to
judgment interest and attorney fees. Consequently, in many cases the
apparent judicial economy and convenience of the parties' interest in
the entertainment of supplemental state claims may be offset by the
problems they create.
Karibian v. Village Green Mgmt. Co., 2006 WL 3333099 (E.D. Mich. 2006)
(declining to exercise supplemental jurisdiction under subparagraph (c)(2)).

iii. Dismissal of the Additional Claims After the District Court

has Dismissed all Claims Over Which that Court had
Original Jurisdiction
Subparagraph 1367(c)(3) is the only subparagraph that presents a bright
line: if the district court dismisses all claims over which it had original
subject matter jurisdiction, it may dismiss any remaining claims. So, if a
case is anchored in federal court by a federal question claim, and the district
court had supplemental jurisdiction over non-diverse state law claims
arising out of the same case or controversy, if the district court dismisses
the federal claim, it may dismiss the related state law claims. See Acri v.
Varian Assocs., Inc., 114 F.3d 999 (9th Cir. 1997) (a district court must
consider whether to dismiss when the claims with original jurisdiction are
dismissed, but is not required to dismiss them).

iv. Dismissal of an Additional Claim When, in Exceptional

Circumstances, There are Other Compelling Reasons for
Declining Jurisdiction
The “catch-all” in subparagraph 1367(c)(4) requires a showing much like
those described by the first three subparagraphs. The “‘compelling reasons’
for the purposes of subsection (c)(4) should be those that lead a court to
conclude that declining jurisdiction ‘best accommodate[s] the values of
economy, convenience, fairness, and comity.’” Executive Software N. Am.,
Inc. v. U.S. Dist. Ct., 24 F.3d 1545, 1556 (9th Cir. 1994) (quoting Carnegie-
Mellon Univ. v. Cohill, 484 U.S. 343, 351 (1988)). Its requirements have
been found met where, for example, a parallel state suit was pending and so
adjudication of the same state claim in federal court would “be a pointless
waste of judicial resources.” Hays County Guardian v. Supple, 969 F.2d 111
(5th Cir. 1992).

b. If One Subparagraph is Met, What Informs

the District
Court's Discretion?
If the court finds that one of the circumstances in subsection 1367(c) is
present, and so it has discretion to dismiss or keep an additional claim, what
informs its exercise of discretion? District courts balance “factors such as
judicial economy, convenience, fairness and comity . . .” Quinn v. Owen
Fed. Bank FSB, 470 F.3d 1240, 1249 (8th Cir. 2006) (holding trial court did
not abuse its discretion in dismissing state claims after it had dismissed
federal claims). How these factors apply in part turns on which of the four
predicates in subsection 1367(c) was found to be present.
If the federal court litigation is going to continue — if the court has not
dismissed the anchor claim under subparagraph 1367(c)(4) — then
obviously the fact that dismissing the claims will increase litigation and
costs is an important factor. Schwarm, 233 F.R.D. at 659 (“economy and
convenience are best served in the maintenance of a single suit”). Militating
against that, however, is the impact of a federal court needlessly intruding
on state law. Id.
On the other hand, if under subparagraph 1367(c)(4) the court dismisses
all anchor claims early in the suit, some courts hold it is an abuse of
discretion to exert supplemental jurisdiction over an additional claim.
Certain Underwriters at Lloyds, London v. Warrantech Corp., 461 F.3d
568, 578–79 (5th Cir. 2006) (“if the federal claims are dismissed before
trial, even though not insubstantial in a jurisdictional sense, the state claims
should be dismissed as well.”). On the other hand, “the substantial
investment of judicial time and resources in the case . . . justifies the
exercise of jurisdiction over the state claim, even after the federal claim has
been dismissed.” Pioneer Hi-Bred Int'l v. Holden Found. Seeds, Inc., 35
F.3d 1226, 1242 (8th Cir. 1994). In sum, what constitutes abuse of
discretion turns on all the facts, including balancing the costs to the parties
with the risk of intruding into matters of state law.

B. What Happens if the Court Dismisses

the Additional Claim?
We will later see that a dismissal for lack of subject matter jurisdiction is
“without prejudice,” meaning that it can be refiled. If the district court does
dismiss the claim, subsection 1367(d) gives the party who had asserted the
dismissed claim at least 30 days to re-file it before the dismissed claim can
become barred by a statute of limitation:
(d) The period of limitations for any claim asserted under subsection
(a), and for any other claim in the same action that is voluntarily
dismissed at the same time as or after the dismissal of the claim under
subsection (a), shall be tolled while the claim is pending and for a
period of 30 days after it is dismissed unless State law provides for a
longer tolling period.

Checkpoints

Can you describe when a claim falls within subsection 1367(a)?

Can you list the claims that are excluded by subsection 1367(b)? Those that are not?
Can you explain why a court, though having supplemental jurisdiction over a claim, nonetheless can
decline to exercise jurisdiction under subsection 1367(c)?
Chapter 22

Joinder Step Three:

Personal or Pendent Personal
Jurisdiction Must Exist
Over Most Claims

Joinder Step Three Roadmap

This chapter explains when there must be personal jurisdiction — either “regular” or
“pendent” — over each claim by a plaintiff against a party, and for some other claims.
This chapter also explains when “pendent personal jurisdiction” is available, and how to
determine whether it exists.

As we saw in Chapters 6 and 7, a court must have personal jurisdiction

over each claim by a plaintiff against each defendant. While an anchor
claim must have “regular” personal jurisdiction (as we studied in Part A of
this book), an additional claim can have either regular personal jurisdiction
(as we discussed in Chapters 6 and 7) or “pendent personal jurisdiction.”
(Remember that if personal jurisdiction is lacking, nothing will happen
unless the party against whom the claim is asserted promptly and properly
moves to dismiss or transfer for lack of personal jurisdiction.)
In some ways, pendent personal jurisdiction is analogous to supplemental
subject matter jurisdiction because both give federal courts greater power to
decide additional, related claims than they do to decide an anchor claim
itself. (We'll see the same thing with pendent venue in the next chapter.)
Thus, step three of determining whether joinder of a claim against a party is
proper is to examine whether there is either “regular” personal jurisdiction,
or “pendent” personal jurisdiction. Generally, pendent personal jurisdiction
will be available only if a federal claim allows for nationwide service of
process, and the plaintiff brings related state law claims, too, that do not
meet the requirements of state long arm statutes or due process.
While a court must have personal jurisdiction over a claim by every
plaintiff against each defendant, the same is not true for every other claim
and party. The first section below explores that issue further.

A. Must There be, and if so is There,

Regular Personal Jurisdiction Over the
Additional Claim?
The first part of this step is to determine whether the court has “regular”
personal jurisdiction for each claim by a plaintiff against defendant for each
additional claim. See Chapters 6 and 7. If so, then there is regular personal
jurisdiction and the analysis ends. If not, there may be pendent personal
jurisdiction. But pendent personal jurisdiction exists only if (a) there is an
anchor claim that is a federal question for which (b) a statute authorizes
nationwide service of process that provides that national contacts “count”
for personal jurisdiction. We'll see below why both are required before
pendent personal jurisdiction is available for an additional claim.
Personal jurisdiction is not required for some claims. Specifically, a
plaintiff may not object to personal jurisdiction for any counterclaim —
permissive or compulsory — filed by a defendant against it. See 6 Charles
A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and
Procedure §§ 1416, 1424 (2015). The idea is that by filing suit the plaintiff
has submitted itself to the jurisdiction of the court: “Typically of course,
obtaining [personal] jurisdiction on a crossclaim is no problem when the
crossclaim defendant shows up to defend the principal suit [as] his presence
removes any objections to jurisdiction on the crossclaim.” Cincinnati Ins.
Co. v. Belkin Corp., No. CIV A 07-0615-WS-C, 2008 WL 4949783, at *15
(S.D. Ala. Nov. 14, 2008) (internal quotations and citation omitted). On the
other hand, there must be personal jurisdiction for claims by defendants as
third party plaintiffs against third party defendants, but there need not be for
claims by plaintiffs against third party defendants. Also, there must be
personal jurisdiction over a party joined to a counterclaim. See Calista
Enterprises Ltd. v. Tenza Trading Ltd., No. 3:13-CV-01045-SI, 2014 WL
3670856, at *3 (D. Or. July 23, 2014) (collecting cases). Thus:
 B. If Needed but There is no Regular
Personal
Jurisdiction, is There Pendent Personal
Jurisdiction Over the Additional Claim?
Under pendent personal jurisdiction, a court may assert personal
jurisdiction over a defendant with respect to a claim for which there is no
other source of personal jurisdiction so long as that claim arises out of a
common nucleus of operative facts as a claim over which the court does
have personal jurisdiction. U.S. v. Botefuhr, 309 F.3d 1263, 1272 (10th Cir.
2002). Normally, of course, if two claims are part of the same case or
controversy, there will likely be personal jurisdiction over both: if a plaintiff
pleads two claims arising out of a breach of contract, for example, it's
difficult to imagine circumstances where each claim won't satisfy regular
personal jurisdiction.
But sometimes a federal statute allows personal jurisdiction to be proper
for federal claims to be based upon contacts, not with a state, but with the
country as a whole. Pendent personal jurisdiction allows federal courts to
assert personal jurisdiction over an additional claim that arises out of the
same case or controversy as a federal anchor claim for which a statute
creates nationwide service of process. We saw in Chapter 4 that some — a
few — federal statutes authorize nationwide service of process, permitting a
defendant to be sued in much broader circumstances than would typically
be possible under normal state long-arm statutes, and allowing personal
jurisdiction to be based upon contacts with the United States as a whole, not
the particular state where the district court sits.
The availability of nationwide service of process based on national
minimum contacts gives rise to the practical need for pendent personal
jurisdiction: if a defendant is subject to suit in any state over a federal claim
because nationwide service of process, but the complaint includes a related
claim (under state or federal law) for which no statute authorizes
nationwide service of process based on national contacts, a court in a state
with personal jurisdiction over the nationwide federal claim wouldn't have
personal jurisdiction over the defendant on the related claim. Although the
Supreme Court has never expressly approved its use, many circuits have
done so. See Action Embroidery Corp. v. Atlantic Embroidery, Inc., 368
F.3d 1174 (9th Cir. 2004) (collecting cases).
Thus, pendent personal jurisdiction will matter when Congress has
created a federal statute to authorize nationwide service of process for a
federal claim that anchors the case, and the plaintiff pleads a related law
claim. Not many federal claims have nationwide service of process based
on the defendant's contacts with the entire country, and no federal statute
authorizes nationwide service of process for any state law claim. Thus,
pendent personal jurisdiction fills a gap. Specifically, without pendent
personal jurisdiction, there may have to be two lawsuits or Congress' desire
to authorize nationwide service of process would as a practical matter be
nullified. If suit had to be filed in a state where personal jurisdiction over
the related state law claim existed, then Congress's decision to permit
nationwide service of process based upon national contacts for the federal
claim would be neutered: the plaintiff would either have to forego the
related state law claims or file the suit where assertion of personal
jurisdiction over the state law claims was proper. Or the plaintiff would
have to file two suits.
To avoid frustrating Congressional intent, courts developed the doctrine
of pendent personal jurisdiction. For pendent personal jurisdiction to be
proper, the claim lacking personal jurisdiction must be so closely related to
the claim with personal jurisdiction that it forms part of the same “case or
controversy.” See ESAB Group, Inc. v. Centricut, Inc., 126 F.3d 617 (4th
Cir. 1997) (“When a federal statute authorizes a federal district court to
exercise personal jurisdiction over a defendant . . . we can find little reason
not to authorize the court to adjudicate a state claim . . . so long as the facts
of the federal and state claims arise form a common nucleus of operative
fact.”). Under that circumstance, the state law claim can piggyback on the
federal one, even though no statute authorizes service of process under the
circumstances and even if the defendant lacks minimum contacts with the
particular state.
To sum up, if a court has personal jurisdiction over a defendant for one
claim, the plaintiff may ‘piggyback’ onto that claim other claims for which
there is no independent basis for asserting personal jurisdiction, but only to
the extent that each additional claim arises from the same facts as the claim
over which the court has personal jurisdiction. Ordinarily, this only matters
if a related claim is brought that can be filed in any state if the defendant
has minimum contacts with the country.

C. Assertion of Pendent Personal

Jurisdiction
Must Comport with Due Process
Even if a court has pendent personal jurisdiction over a claim, assertion
of pendent personal jurisdiction must still comply with the Due Process
Clause. See Stelax Indus., Ltd. v. Donahue, 2004 WL 733844 (N.D. Tex.
2004) (court could not rely on pendent personal jurisdiction where assertion
violated the Due Process Clause). However, the “forum” for minimum
contacts analysis is the United States, not the forum state: the rationale for
that is that “when a federal court exercises jurisdiction pursuant to a
national service of process provision, it is exercising jurisdiction for the
territory of the United States and the individual liberty concern is whether
the individual over which the court is exercising jurisdiction has sufficient
minimum contacts with the United States.” Med. Mut. of Ohio v. de Soto,
245 F.3d 561, 567–568 (6th Cir. 2001).

Checkpoints

Can you explain why courts developed pendent personal jurisdiction?

Can you explain when it is available?
Can you explain what is required to take advantage of it?
Can you explain why it will not ordinarily be necessary unless one claim is based upon nationwide
service of process?
Chapter 23

Joinder Step Four: Venue

or Pendent Venue Must Exist
Over Some Claims

Joinder Step Four Roadmap

This chapter explains that venue, or pendent venue, must exist over most claims.
This chapter also explains when pendent venue is available, and how to determine whether
pendent venue is proper.

As we saw in Chapters 8 and 9, venue must be proper over each claim by

plaintiff against each defendant. Thus, for each claim by a plaintiff is to
determine if venue is proper under the general federal venue statute or
another applicable claim-specific federal statute. If so, then venue is proper.
There must be one claim for which venue is proper. If so, for additional
claims, venue can be proper under either the regular statutes or by pendent
venue. Like pendent personal jurisdiction, courts developed this doctrine to
allow venue to be proper over all claims that are closely related to a claim
over an anchor claim. Like pendent personal jurisdiction, pendent venue
slightly relaxes “regular” venue requirements.
Claims other than by a plaintiff against a defendant sometimes require
venue, but some do not, as we will see in this chapter. Pendent venue is
available for these claims as well, when venue is required.

A. Is Venue Proper Under the

“Regular” Analysis?
If the “regular” venue analysis reveals that venue over an additional
claim is proper, then the analysis need go no further. But, for each claim
beyond the anchor claim — over which the venue must be proper (or the
defendant waives any objection to it) — a party may also establish that
there is “pendent venue.”

B. Is Proper Venue Unnecessary

Over the Claim?
In several circumstances, proper venue is not required. Note that in each
circumstance, if a party nonetheless objects to venue, then the other parties
must point out that that objection is not well founded.

a. Venue is not Required for a Counterclaim

Against an Existing Plaintiff
A plaintiff cannot object to venue over a permissive or compulsory
counterclaim. General Elec. Co. v. Marvel Rare Metals Co., 287 U.S. 430
(1932).

b. Venue is not Required for a Counterclaim

Against a Party
Joined as a Counterclaim Defendant Under Rule
13(h)
A party joined as a counterclaim defendant under Rule 13(h) may not
object to venue. Lesnik v. Public Industrials Corp., 144 F.2d 968 (2d Cir.
1944).

c. Venue is not Required for a Claim Against a

Third-Party
Defendant Joined Under Rule 14(a)
A defendant impleaded under Rule 14(a) cannot object to venue, whether
the claim is by the third-party plaintiff or the original plaintiff: if venue is
proper for the original action, an independent basis of venue for a third-
party claim is not required. One Beacon Ins. Co. v. JNB Storage Trailer
Rental Corp., 312 F. Supp. 2d 824, 828 (E.D. Va. 2004); 6 Wright, Miller &
Kane, Federal Practice and Procedure: Civil 2d § 1445, at p.353 (“[V]enue
over a claim by plaintiff against the third-party defendant should be held to
be ancillary if the court has subject-matter and personal jurisdiction over
it.”). Thus:

2. All Other Claims Require Proper Venue

or Pendent Venue
If “regular” venue is not available, “pendent venue” may allow a related
claim to “tag along” with an anchor claim. Beattie v. U.S., 756 F.2d 91, 103
(D.C. Cir. 1984). Much like both pendent personal jurisdiction and
supplemental subject matter jurisdiction, the claim must “arise out of the
same core of operative facts” as a claim over which the court has proper
venue. Id. Whether to apply pendent venue is left to the discretion of the
district court. Id. The factors that a court should consider include judicial
economy, convenience of the parties and witnesses, avoiding piecemeal
litigation, and fairness. Id.; Bishop v. Okla., 447 F. Supp. 2d 1239, 1254–55
(N.D. Okla. 2006).
Pendent venue can apply in different circumstances than pendent
personal jurisdiction. For example, it can allow a claim that is covered by
the general federal venue statute to tag along with a claim governed
exclusively by a specific venue statute. So, for example, if a claim against a
defendant over which venue is proper under the general federal venue
statute is joined with a claim that arises under a federal statute covered by
its own venue provision, a court could exercise pendent venue and keep all
of the claims if the claim over which venue was improper arose out of the
same set of facts as the anchor claim. Taylor v. CSX Transp., Inc., 2006 WL
2550021 (N.D. Ohio 2006).
 Pendent venue also applies when state claims subject to the general
federal venue statute are joined with a federal claim subject to a specific
venue statute. For example, in PKWare v. Meade, 79 F. Supp. 2d 1007, 1018
(E.D. Wis. 2000), the plaintiff pled both a state law contract claim and a
claim under federal law for patent infringement. The court held that it had
venue over the contract claim, but recognized that specific statute covers
venue in patent infringement, 28 U.S.C. § 1400(b). Venue was improper as
to the patent claim under that statute. The court, though noting that pendent
venue might be proper, rejected applying it because Section 1400(b)
narrowed the available venues for patent infringement. Thus, allowing the
patent infringement claim to have venue pend from the contract claim was
“inconsistent with the specific requirements” of Section 1400(b). Thus, it
dismissed the patent infringement claim for improper venue.
In another case, the court confronted state law claims that were related to
each other, but over which venue was improper as to some of them. The
plaintiff's claim over which venue was proper was a fraud claim: plaintiff
claimed defendant defrauded it in part through representations made in
letters mailed into the district. The court found venue proper on that claim,
concluding that the letters constituted acts that occurred in the district that
formed a substantial part of the fraud claim. Moore v. Dixon, 2006 WL
3091142 (E.D. Wis. 2006). The plaintiff also pled two other claims: breach
of fiduciary duty and breach of contract. The letters were not pertinent to
those claims, since they both related to events that occurred later.
Nonetheless the court found that the two claims shared “a common nucleus
of operative fact with the plaintiff's misrepresentation claim” and so found
pendent venue proper. Id.
The doctrine of pendent venue is not fully developed. The reason may be
that it doesn't get raised a lot: a defendant who is going to face a claim in a
particular court might as well deal with all of the claims then and there,
rather than facing multiple suits in different forums. But, sometimes one
claim doesn't provide the same relief that another claim might, and so there
will remain reasons to analyze venue on a claim-by-claim basis, and to look
for pendent venue if “regular” venue is unavailable.

Checkpoints

Can you explain when pendent venue is available to support venue over a claim?
Can you describe what is required to meet the doctrine?
Chapter 24

A Recap and Flow Chart

of the Four Steps for
Adding Claims or Parties
We saw that for each additional claim asserted by a party and for joining
a party there must be authority to join the claim under a Rule, subject
matter jurisdiction, personal jurisdiction, and venue. This chapter recaps
Section 1367 and applies the four steps to common fact patterns. The big
picture is that Congress wanted to allow claims that arise out of the same
case or controversy to be tried in one suit, but not to let the original plaintiff
maneuver “a non-federal claim into federal court by initially filing claims
against only diverse parties, and then later seeking to add [claims against]
non-diverse parties, whose presence, had plaintiff included them in its
original complaint, would have destroyed diversity.” Hartford Steam Boiler
Inspection & Ins. Co. v. Quantum Chem. Corp., 1994 WL 494776 (N.D. Ill.
1994).
 A. A Flow Chart for Applying
Section 1367
If there is one claim over which the court has original jurisdiction, then
as to any joined party or claim, the flow chart on the next page controls:
B. The Charts Revisited
 With any luck, these charts now make absolute sense to you:

C. Some Examples with Explanations

I strongly recommend using the flow chart or the graphics before you do
this analysis or, at minimum, use them afterwards to double check. My
students have told me that these study aids work.

1. Compulsory Counterclaims
Suppose the defendant includes in its answer a compulsory counterclaim.
We'll see here that there will always be authority, subject matter
jurisdiction, personal jurisdiction, and no need for venue over that claim
regardless of what the subject matter jurisdiction exists over the anchor
claim in plaintiff's complaint. (Remember: Venue is not needed even over
permissive counterclaims. Likewise, a plaintiff may not object to personal
jurisdiction over a compulsory counterclaim.) The reason why subject
matter jurisdiction will exist is because a compulsory counterclaim will by
definition form part of the same case or controversy as the plaintiff's claim
— so it will be within subsection 1367(a) — and subsection 1367(b) does
not exclude claims by defendants. See Hartford Steam Boiler Inspection &
Ins. Co. v. Quantum Chem. Corp., 1994 WL 494776 (N.D. Ill. 1994).
If the anchor claim is federal question, the four step analysis is as
follows:
(1) The authority to assert a compulsory counterclaim comes from
Rule 13(a).
(2) If the court does not have original jurisdiction over the additional
claim, the claim nonetheless will be within Section 1367(a): in order to
be a compulsory counterclaim under Rule 13(a) the claim must arise
out of the same transaction or occurrence as the plaintiff's claim, and
by a claim that arises out of the same transaction or occurrence is
invariably within the “case or controversy” required by Section
1367(a).
(3) The claim is not excluded by 1367(b) because it only applies when
the anchor claim is only diversity. (Even if it did apply, it wouldn't
here because the claim is by a defendant.)
(4) The court would have discretion to dismiss the claim if one of the
circumstances in Section 1367(c) is present.
If instead subject matter jurisdiction is based solely on diversity, then the
only change is with respect to step (3): subsection 1367(b) will apply
because federal question is not an anchor claim. However, subsection
1367(b) does not exclude claims by defendants, and so the counterclaim is
not excluded.
The net effect? There will always be subject matter jurisdiction over
compulsory counterclaims. Personal jurisdiction will also always be present
since the filing of a suit waives personal jurisdiction objections as to
compulsory counterclaims. Likewise, venue will be proper because venue
statutes do not apply to counterclaims. Think of the big picture: we want
courts to efficiently adjudicate all claims arising out of the same basic set of
facts. They do so here.

2. Certain Permissive Counterclaims

Contrary to a lot of hornbooks and dicta from cases, not all permissive
counterclaims are the same. Permissive counterclaims come in different
forms, and the answers to whether they can be joined in a suit can vary
depending on the reason why the counterclaim is permissive. It is important
that you be careful: a lot of cases and even casebooks say that permissive
counterclaims must have an independent jurisdictional basis; that's not
always true. For example, if the only reason the claim is permissive is
because it was pending in another suit, it will not need an independent
jurisdictional basis if it arises out of the same claim or transaction, and so
the same case or controversy, as the plaintiff's claim, but just happened to
be filed in another suit before the civil action making it a counterclaim was
filed.
The most common reason why a counterclaim is permissive is because it
does not arise out of the same transaction or occurrence as a claim by the
plaintiff. Suppose, for example, that the plaintiff sues the defendant for
breach of contract, and the defendant counterclaims over an unrelated tort
action. What is the analysis (we'll see it's the same whether the anchor
claim is a federal question or not):
(1) Authority for permissive counterclaims comes from Rule 13(b).
(2) If the court does not have original subject matter jurisdiction over
the permissive counterclaim, the question first would be whether the
counterclaim is part of the same “case or controversy” as the anchor
claim, and so is within subsection 1367(a). If the counterclaim is not
part of the same case or controversy, then it would not be within
subsection 1367(a) and the court would lack subject matter
jurisdiction. If it does arise out of the same case or controversy, then
the claim is within subsection 1367(a), and the analysis proceeds to
subsection 1367(b). (Recall that a counterclaim is permissive not just
if it does not arise out of the same transaction or occurrence as the
plaintiff's claims but also for other reasons, including if it was already
pending in another court.)
(3) Regardless of whether the anchor claim is federal question or
diversity, permissive counterclaims are not excluded by subsection
1367(b) because the counterclaim is by a defendant, and that
 subsection does not exclude any claims by defendants.
(4) The court always has discretion to dismiss but only if at least one
of the circumstances in subsection 1367(c) exists.
Personal jurisdiction need not exist, since a plaintiff waives objection to any
counterclaim. A plaintiff cannot object to venue over a counterclaim. Thus,
the net effect is that a permissive counterclaim must have an independent
basis for subject matter jurisdiction only if the reason why it's permissive is
because it does not arise out of the same case or controversy as a plaintiff's
claim. Subsection 1367(b) will never exclude counterclaims, as they're
made by defendants.

3. Joinder of Plaintiffs Under Rules 19 and 20

As discussed Chapter 20, the ExxonMobil Court took the view that if a
diverse plaintiff making a claim for more than $75,000 joins a second
plaintiff, supplemental jurisdiction can exist only if the second plaintiff is
diverse from each defendant. Thus, the supplemental jurisdiction statute can
be used where there is no federal question jurisdiction only if there is
complete diversity of citizenship. Absent complete diversity, there is no
“original jurisdiction” due to “contamination” of the entire case by a
nondiverse party. As noted in Chapter 20, however, this may be the rule
only if the non-diverse plaintiff is indispensable in terms of Rule 19. The
rest of this section assumes there is original jurisdiction that anchors the
case in federal court; that there is no contamination.
Suppose two parties each have claims against a single defendant: a driver
and passenger in a car wreck, for example, sue the other driver. The
analysis for joinder of each plaintiff is as follows. You will see that the
answer to the first step — what rule authorizes joinder — is critical where
the anchor claim is diversity. This is because if the plaintiff is being joined
is a necessary party in terms of Rule 19, then the court will not have
supplemental subject matter jurisdiction because joinder will be improper
under subsection 1367(b).
(1) The authority for a plaintiff to join a co-plaintiff comes from one of
two places. Permissive joinder is authorized by the first sentence of
Rule 20(a): the plaintiff can be joined if it assert a claim arising out of
the same transaction or occurrence against the defendant and assert
join, several, or alternative liability. Rule 19 authorizes — indeed,
requires — joinder of a plaintiff in whose absence complete relief
cannot be afforded to the existing parties, or who claims an interest in
the subject matter, and whose non-joinder will impact the parties. See
Chapter 17. If a plaintiff is a necessary party — which, again, will be
rare — then the authority to join the party is Rule 19; otherwise, it is
Rule 20. The answer to that inquiry becomes important in the third
step.
(2) If joinder is proper under either Rule 19 or 20 that would almost
invariably mean that the additional plaintiff's claim arises from the
same case or controversy as the anchor plaintiff's claim. Thus, joinder
would be within subsection 1367(a) if the plaintiff is joined under
either Rule 20 or 19.
(3) Whether joinder is precluded by subsection 1367(b) requires more
thought. First, if the anchor claim(s) include a federal question, then
subsection 1367(b) would not exclude joinder since it applies if only
diversity claims anchor the case in federal court. Thus, if there is a
federal question claim, then nothing is excluded by subsection
1367(b). If there is no federal question anchor claim, then the
determinative issue under subsection 1367(b) is whether the plaintiff is
joined under Rule 20 (permissively) or under Rule 19 (necessarily).
Why is that? If the plaintiff is joined under Rule 20, then the claim is
not excluded; if the plaintiff is joined under Rule 19, then the claim is
excluded. That sounds backwards: if the plaintiff has to be part of the
case, then the court lacks jurisdiction. Why does that make sense? If
the plaintiff is a necessary party in terms of Rule 19, then allowing the
case to proceed in federal court will allow a case to proceed where the
additional plaintiff is a necessary party. In other words, Congress in
subsection 1367(b) decided to allow a plaintiff to join with another
plaintiff, so long as it was merely permissive, and not necessary, the
plaintiff to be a party. Allowing a necessary party to join would allow
a claim that should not be brought in federal court to be brought when
it should be dismissed under Rule 19 since joinder destroys diversity;
allowing a permissively joined plaintiff simply lets a federal court
resolve related claims in one proceeding without violating Rule 19 or
allowing a party to bring a claim in federal court where a party that
should be joined defeats diversity. Accordingly, if the anchor claim(s)
are only diversity, and if the plaintiff is necessary in terms of Rule 19,
there is no supplemental jurisdiction. (Note: under the ExxonMobil
contamination approach, the presence of a nondiverse plaintiff would
 mean there is no original subject matter jurisdiction; as mentioned, my
view is that there is original subject matter jurisdiction but the wording
of subsection 1367(b) ensures that if joinder of the plaintiff is required
by Rule 19 the case will be dismissed and cannot be refiled by one
plaintiff alone.)
(4) If the claim is not excluded by subsection 1367(b), the court still
has discretion to dismiss if one or more circumstances in subsection
1367(c) exists.
Note that the additional plaintiff must still establish that personal
jurisdiction exists and that venue is proper over each claim it has against the
defendant.
So, for example, in ExxonMobil Corp. v. Allapattah Serv., Inc., 125 S.Ct.
2611 (2005), one plaintiff brought a diversity claim, and joined a co-
plaintiff who, while diverse in citizenship from the defendant, did not assert
an amount in controversy that exceeded the minimum jurisdictional
amount. The Court held that there was supplemental jurisdiction over the
claim because the two claims arose out of the same case or controversy and
Section 1367(b) “does not withdraw supplemental jurisdiction over the
claims of the additional parties at issue here.” An interesting question that is
addressed at length in dicta in ExxonMobil is whether the same result would
apply if the co-plaintiff had met the minimum amount, but was from the
same state as the defendant. The text of subsection 1367(b) would seem to
allow that claim to be brought, but the ExxonMobil Court strongly
suggested that might not be the case. Stay tuned to how this develops in the
law.

4. Joinder of Defendants Under Rules 19 and 20

Suppose a plaintiff wants to sue two defendants: say a plaintiff injured in
back surgery wants to sue the doctor who implanted a surgical device along
with the manufacturer of that device. Is joinder proper? The result that
emerges is that there will be no supplemental jurisdiction over such claims
unless the anchor claim is federal question:
(1) Authority to join defendants comes from Rule 20(a) or Rule 19.
Unlike joinder of plaintiffs, the characterization of the defendant as
merely a proper or necessary party will have no effect, as we'll see in
step three. Under Rule 20(a), a defendant may be joined if the claim
asserted against it asserts joint, several, or alternative liability and
 arises out of the same transaction or occurrence; under Rule 19, a
defendant must be joined as a party if it falls within the definition of
“necessary party.”
(2) If the claim is authorized by either Rule 19 or 20, it would very
likely also meet the “same case or controversy” requirement of
subsection 1367(a).
(3) If the anchor claim is federal question, then subsection 1367(b) will
not exclude anything. However, if the anchor claims are only diversity,
then subsection 1367(b) will exclude the additional claim since it is a
claim against a party joined under Rule 19 or under Rule 20. The net
effect is that a plaintiff may only join a non-diverse defendant to assert
a state law claim that is related to a federal claim against another
defendant. That reflects a judgment: if there's a federal claim involved,
the other defendant can be joined because federal litigation is likely to
proceed anyway; but if not, then the plaintiff must file another suit in
state court even though that claim is closely related to a diversity claim
that properly could be tried in federal court. If the plaintiff wants to
have one suit, the one suit must be in state court.
(4) Even if the claim is not excluded by subsection 1367(b), the court
will have discretion to decline to exercise supplemental jurisdiction if
one of the conditions in subsection 1367(c) exists.
Venue and personal jurisdiction, of either the original or pendent variety,
must exist over each claim against the joined defendant.

5. Joinder of a Counterclaim Defendant to a

Counterclaim
Against and Existing Plaintiff Under Rule 13(h)
We saw in Chapter 17 that if a defendant asserts or has asserted a
counterclaim against an existing plaintiff, that defendant may join a person
who was not yet a party as a counterclaim defendant. For example, suppose
a plaintiff sues a defendant for breach of contract. If the defendant believes
that the plaintiff along with another person conspired to fraudulently induce
the defendant to enter into that contract, the defendant may want to bring a
counterclaim against the plaintiff and join the co-conspirator to that
counterclaim. The defendant would file an answer with a counterclaim
naming the existing plaintiff as, and joining that other person as, “counter-
claim defendants.” We will now analyze joinder of that other person as a
counterclaim defendant and will see that there will always be supplemental
jurisdiction over joinder of a party to a counterclaim whether the
counterclaim against the existing plaintiff is based on diversity or federal
question:
(1) The authority to join a party to a counterclaim is Rule 13(h).
(2) Because a party can be joined under Rule 13(h) only if the claim
against it arises out of the same transaction or occurrence as the
counterclaim against the existing party, almost invariably that claim
will arise out of the same case or controversy and so be within
subsection 1367(a).
(3) Subsection 1367(b) does not exclude claims by defendants
regardless of the basis of subject matter jurisdiction of the
counterclaim.
(4) Subsection 1367(c) must always be examined.

6. Third-Party Practice Under Rule 14

Every casebook includes Owen Equipment & Erection Co. v. Kroger, 437
U.S. 365 (1978) in its discussion of supplemental jurisdiction. Be careful
because this case was decided before enactment of Section 1367 and so
uses terminology and analysis different from that which we now use under
Section 1367. And, again, be careful: the only source of supplemental
subject matter jurisdiction is Section 1367. The doctrines of “pendent
party” and “ancillary claim” are gone.
In Owen, an Iowa citizen, Mrs. Kroger, brought a wrongful death claim
against a Nebraska utility (“OPPD”) after her husband was killed when the
crane he was working in made contact with a power line owned by OPPD.
OPPD, in turn, impleaded under Rule 14(a) the manufacturer of the crane,
Owen, asserting that if OPPD was liable to the plaintiff, OPPD had a right
of contribution against Owen as joint tortfeasors under applicable state tort
law.
Then Mrs. Kroger amended her complaint to assert a claim against Owen
that sought more than the minimum jurisdictional amount at the time. She
alleged in the amended complaint, and Owen admitted in its answer, that it
was a Nebraska corporation with its principal place of business in
Nebraska. Thus, ostensibly there was diversity. OPPD then obtained
summary judgment on Mrs. Kroger's claim against it. Much later, on the
third day of trial in fact, it came out that Owen's principal place of business
was not in Nebraska, but was instead in Mrs. Kroger's home state of Iowa.
Thus, at that time the claim was between two citizens of Iowa.
Owen then moved to dismiss for lack of subject matter jurisdiction. The
district court refused, and the appellate court affirmed. The Supreme Court
reversed. It emphasized that this was not a claim by a defendant against a
party joined under Rule 14(a), but instead was a claim by a plaintiff, and so
the non-diverse claim was not asserted by a party “haled into court against
his will.” A plaintiff cannot complain if ancillary jurisdiction does not
encompass all of his possible claims in a case such as this one, since it is he
who has chosen the federal rather than the state forum and must thus accept
its limitations.” Id.
How does third-party practice work under Section 1367? Let's look first
at the defendant's (i.e., the third-party plaintiff's) claim against the third-
party defendant, then claims by the plaintiff against the third-party
defendant (the latter being the problem in Kroger).
First, with respect to the claim brought by the third-party plaintiff, there
will always be supplemental jurisdiction:
(1) Rule 14(a) authorizes the claim.
(2) Because a claim authorized under Rule 14(a) can only be brought if
the third-party defendant will be liable for some or all of the third-
party plaintiff's liability to the plaintiff, it will invariably arise out of
the same case or controversy as a claim by the plaintiff against the
third-party plaintiff, and so will be within subsection 1367(a).
(3) Claims by defendants are not excluded by subsection 1367(b).
(4) Subsection 1367(c) must always be analyzed.
What if the plaintiff joins a claim against the third-party defendant? If the
plaintiff's claim against the defendant is based on diversity, then there will
not be supplemental jurisdiction over the claim.
(1) Rule 14(a) authorizes a plaintiff to bring a claim against a party
joined under Rule 14(a). (It's buried in that Rule.)
(2) If the claim does not arise out of the same case or controversy as
plaintiff's claim against the defendant, the claim will not be within
subsection 1367(b). If it does, then it will be within that section.
(3) If there is a federal question anchor claim, then subsection 1367(b)
will not exclude the plaintiff's claim. However, if there is not a
diversity anchor claim, then the claim by a plaintiff against a party
 joined under Rule 14(a) is excluded by subsection 1367(b). There will
never be supplemental jurisdiction over a claim by a plaintiff against a
party joined under Rule 14(a) unless there is a federal question
anchoring the plaintiff in federal court.
(4) Subsection 1367(c) must always be applied.
What's the net effect of this? The result in Kroger would be exactly the
same: the claim against Owen arose out of the same case or controversy as
the claim against OPPD; without a federal question anchor claim, the claim
against Owen, though within subsection 1367(a), is excluded by subsection
1367(b).

7. Rule 18(a) Joinder of Claims

We saw that Rule 18(a) authorizes a party to join even completely
unrelated claims once it anchors a claim in federal court. However,
remember that authority is only one of the steps. If the claim is unrelated to
an anchor claim, it will have to have an independent — original — basis for
subject matter jurisdiction. Let's see why.
(1) The authority to join the claim is Rule 18(a).
(2) If the claim does not arise out of the same case or controversy as an
anchor claim, it will not be within subsection 1367(a). If it does, then it
will be.
(3) No claim by defendants or plaintiffs joined under Rule 18(a) is
excluded by subsection 1367(b).
(4) Subsection 1367(c) must always be examined.
Thus, the net result is that if a claim joined under Rule 18(a) arises from the
same case or controversy, there will be supplemental jurisdiction over it, no
matter who asserts it. This fits within the goal of allowing all claims that
arise out of the same case or controversy to be tried together. It also
illustrates, however, that often authority is broader than the real ability to
litigate claims: unrelated claims joined under Rule 18(a) that lack original
jurisdiction will be subject to dismissal because they will not be within
subsection 1367(a).
Chapter 25

Notifying the Defendant

of the Filing of Suit through
Service, Waiver of Service of
Process, or Substituted Service

Notifying the Defendant Roadmap

This chapter explains the steps that plaintiff's counsel must take to initiate a civil lawsuit.

Once the plaintiff has drafted the complaint, the next step is filing it, the
civil cover sheet, and the Rule 7.1 disclosure form with the district court.
The act of filing the complaint “commences” the civil action. FRCP 3. Then
the plaintiff must properly notify the defendant that a civil action has been
filed against it, either through actual or, if that is unavailable, constructive
service.

A. Formal Service or Request for Waiver

of Formal Service
“An elementary and fundamental requirement of due process in any
proceeding which is to be accorded finality is notice reasonably calculated,
under all the circumstances, to apprise interested parties of the pendency of
the action and afford them an opportunity to present their objections.”
Mullane v. Central Hanover Bank & Trust CO., 339 U.S. 306 (1950).
Importantly, it is not actual notice that is required but instead reasonable
efforts to apprise interested parties. Dusenberry v. U.S., 534 U.S. 161
(2002).
The plaintiff has a choice: either use personal service — which requires
the plaintiff to pay someone to find the defendant and personally provide
him with the required documents — or instead mail a request to the
defendant asking that it waive service. (Personal service is required if the
defendant is a a governmental entity, infant, or incompetent person to do so.
FRCP 4(d)(1); 4(g); 4(h).)

1. Formal Service of Process

Formal service requires the plaintiff have the defendant served with both
a summons and a copy of the complaint. Together, the summons and the
complaint are often referred to as “process.” By validly serving process, (a)
the defendant is notified of the suit; (b) the court acquires personal
jurisdiction over the defendant (subject to any objection he may have); and
(c) the defendant is given an opportunity to defend. Henderson v. U.S., 517
U.S. 654, 672 (1996); Omni Capital Int'l, Ltd. v. Rudolf Wolff & Co., 484
U.S. 97, 104 (1987). There are five steps involved in effecting service.

a. Plaintiff's Counsel Fills Out the Forms

First, the plaintiff's lawyer is required to complete the summons form. A
form of summons is available on-line in PDF format, and an example is
below. The summons must contain:

The identity of the court;

The name of each plaintiff;
The name of plaintiff's counsel;
The name of each defendant;
The identity of any agent for service of process of the defendant (see
below);
A statement of when the defendant is required to respond;
The clerk's signature and the seal of the court.

b. The Court Clerk Signs and Seals the Forms

Second, the plaintiff's lawyer must submit the summons to the clerk of
the court to have it signed and sealed. FRCP 4(a), (b). If the summons is in
proper form, the clerk signs and seals it, then returns it to the plaintiff.

c. Plaintiff's Lawyer has Process Properly and

 Timely Served
The plaintiff's lawyer must have the summons and certain other
documents served on the defendant, and do so in a timely fashion. If service
is done by personally delivering summons, it must be done by a person who
is not a party and who is at least 18 years old. FRCP 4(c)(2). In some
circumstances, service by a U.S. Marshall is required. FRCP 4(c)(3).
The proper way to effect service depend on the type of defendant:
Competent Adults. Rule 4(e) gives the plaintiff two options on serving
competent adults: (a) service may be effected under Rule 4(e)(1) according
to state law of either the state where the suit is filed or where the defendant
resides; or (b) service may be effected by “delivering” process in terms of
Rule 4(e)(2). Either is sufficient; both may be used; and neither is favored
under the Rules.
Service According to State Law. Although it varies some, most states
permit service of process by: first class mail; in-person delivery;
publication; or by “long-arm” statute where the defendant does not reside in
the state. Rule 4(e)(2) permits service by in-person delivery; leaving
process at the individual's dwelling house or usual place of abode with an
appropriate person; or delivering process to an authorized agent. A person
may have more than one “dwelling house or usual place of abode.” For
example, in Nat'l Dev. Co. v. Triad Holding Corp., 930 F.2d 253 (2d Cir.
1991), the court held service proper so long as the defendant was actually
living in the dwelling at the time of service, even if he spent other time
living in other dwellings. Courts have tended to give the term a flexible
meaning, focusing more on whether notice was likely received than the
rigid meaning of the term.
Infants and Incompetent Natural Persons. Service must be performed
as authorized by the law of the state in which the district court where suit
has been filed is located. FRCP 4(g).
Business Entities. Rule 4(h) permits service on business entities either
according to state law (see above) or by serving process on an officer,
managing or general agent, or any other agent authorized by law or
appointment to receive process. Often, state statutes require corporations to
designate an agent for service of process.
Governmental Entities. To effect service on a state governmental entity,
see FRCP 4(j)(2). To effect service on a federal governmental entity, see
FRCP 4(i).
Time to Serve. The amount of time to effect service is fairly short. Unless
the defendant is outside the U.S., the deadline is 90 days after the complaint
is filed, shortened in 2015 from 120 days. FRCP 4(m). If a plaintiff does not
have the defendant served within that time period, the court may dismiss
the suit, without prejudice (meaning it can be refiled, subject to the statute
of limitations running on the claims), unless (1) the plaintiff files a motion
to extend the time and establishes good cause for not having timely served
it; or (2) the court in its discretion, and even without a showing of good
cause, extends the time. See Henderson v. U.S., 517 U.S. 654, 662 (1996)
(court must grant extension if good cause shown); Espinoza v. U.S., 52 F.3d
838, 841 (10th Cir. 1995) (court may grant extension even if no good cause
shown). “Good cause” in this context is limited to valid reasons for delay,
but includes the fact that the defendant actively sought to evade service.
Coleman v. Milwaukee Bd. of School Directors, 290 F.3d 932, 934 (7th Cir.
2002).

d. The Process Server Completes Proof of

Service
The second page of the summons shown above consists of a form that
must be completed, and a declaration attested to, showing how process was
served. The person who served process must complete it.

e. Plaintiff Files the Proof of Service

Plaintiff counsel's last step is to file the completed summons and proof of
service form with the court. FRCP 4(l). The entire process is not a mere
technicality, but instead is a part of the fundamental process of obtaining
personal jurisdiction over the defendant: “Absent consent, . . . there must be
authorization for service of summons on the defendant.” Omni Capital Int'l
v. Rudolf Wolff & Co., 484 U.S. 97, 104 (1987). Thus, compliance with the
Rules is required, unless the defendant waives formal service.

2. Request for Waiver of Service of Process

Rule 4(d)(1)(A) lists what must be included in a request for waiver of
service of process, and as of 2015 following Rule 4 is an “official” form.
Usually the district court will have posted on line interactive pdf files that
can be completed online, printed, and then mailed. The defendant must be
given two copies of the notice and request; a pre-paid means to mail a
response (e.g., a stamped returned envelope); and a copy of the complaint.
FRCP 4(d)(1)(C). Although first class mail is sufficient, “reliable means”
can be used. FRCP 4(d)(1)(G).
The rules (and form following Rule 4) give the defendant a choice. The
defendant is encouraged to waive formal service comes in several ways.
First, the defendant does not waive any defense by waiving service of
process. FRCP 4(d)(5). Second, the defendant is given more time to
respond to the complaint, generally giving a defendant who waives service
60 days to answer, while a defendant who does not waive service is given
only 20 days. FRCP 12(a)(1)(B); FRCP 4(d)(3). Third, a defendant who
chooses not to waive process without good cause must pay the costs of
obtaining formal service. FRCP 4(d)(2). In fact, the plaintiff may be able to
recover not just the costs of formal service, but also the cost of any motion
it has to file to collect them, along with reasonable attorney fees for filing
that motion. FRCP 4(d)(2).
The defendant must be given a reasonable time to respond to the request,
which is 30 days for a request mailed to an address within the United
States. FRCP 4(d)(1)(F); see id. (60 days for defendants with addresses
outside the U.S.). If the defendant waives service of process, the plaintiff
must file with the court the waiver it receives from the defendant, FRCP
4(d)(4), and the suit proceeds as if the defendant had been formally served.
FRCP 4(d)(1). If the defendant does not waive service, then the plaintiff
must formally serve the defendant with process. That brings us to the often
waived second step.

B. Constructive Service of Process

as an Alternative to Formal Service or
Waiver
of Formal Service
If personal service or waiver of it is not successful, a plaintiff may move
the court for permission to use alternatives to personal service. Other forms
of notice are available in “constructive” form, such as putting an
advertisement about the lawsuit in newspapers, are difficult to sustain.
(Many newspapers regularly contain columns of such notices, however.) In
several cases, the Court has held that absent unusual circumstances personal
notice is required, not merely posting a flyer or advertising the suit in the
newspaper. E.g., Mennonite Bd. of Missions v. Adams, 462 U.S. 791 (1983).
Due process may be satisfied, however, if enough advertising or other
notice occurs. Smith v. Islamic Emirate of Afghanistan, 2001 U.S. Dist.
Lexis 21712 (S.D.N.Y. 2001) (holding that notice to Osama bin Laden
could be accomplished by advertising a suit on CNN, al Jazeera, and in
Afghani and Pakistani newspapers).
Why is constructive service the last resort? Because it's constructive-
only, meaning that the defendant will be bound by the court's action even if
it never actually gets notice of the suit.
Generally, courts will not allow substituted service unless the plaintiff in
its motion demonstrates that it has taken reasonable efforts to personally
serve the defendant, but has been unsuccessful. State law dictates how to
accomplish substituted service (how often and where a notice must be
published, for example.
A recent issue is whether notice of a suit can be given through Facebook
or by email, rather than through newspaper advertisements. Generally,
courts are requiring proof from the plaintiff that the defendant regularly
accesses email or Facebook before approving of those methods for
substituted service. The cases, as of now, are about evenly split.

C. What's Next?
The ball is now in the defendant's court. The defendant has several
options after it has either chosen to waive service, or has been formally
served. That's where we go next.

Checkpoints

Can you describe how a plaintiff must initiate a lawsuit?

Why would a defendant choose to waive service of process?
Does a defendant waive any defenses or objections by waiving service of process?
Chapter 26

Preview of the Defendant's

Options in Response to
Receiving a Federal
Court Complaint
As we have seen, the plaintiff in its complaint is required to give notice
of circumstances which, which if plausible and true, show that the court has
both personal and subject matter jurisdiction over each claim and state one
or more claims upon which relief can be granted. (The rules do not require
the plaintiff to plead how venue over each claim is proper, but many
lawyers do so.) Plaintiff's counsel then notifies the defendant of the suit.
What must the defendant do? Before we see the answer, think about the
possibilities. The Rules could give only one option: require a defendant to
respond to each of plaintiff's allegations and to include any defenses to the
claims asserted. Or, the Rules could assume that the defendant denies
everything that the plaintiff alleges, and so require no formal response of
any kind, and even let the defendant later prove any sort of “defense” that it
may have to the claim without providing any notice to the plaintiff of what
that defense might be.
Or, the Rules could do what they do, which is give defendants options.
The defendant can choose to only address preliminary procedural matters
— such as the lack of subject matter jurisdiction, personal jurisdiction, or
venue — without having to respond to the substance of the allegations of
plaintiff's complaint. Or, the defendant can elect to respond to the
allegations on the merits and address any objections to personal
jurisdiction, venue, and subject matter jurisdiction. If the defendant
responds to the merits, we'll see that it has to admit or deny the allegations
made by the plaintiff, and plead any “affirmative defenses.”
Why not just assume everything's denied and move to the next phase?
The short answer is that this approach would not help to narrow the issues.
Suppose, for example, plaintiff sues the defendant for breach of contract.
Defendant did breach the contract, but believes the breach caused plaintiff
no damage. If the defendant isn't required to respond to the merits of
plaintiff's complaint or everything alleged by the plaintiff is presumed to be
denied, then the plaintiff will waste time (and money, and likely the court's
time, too) learning that the dispute is over causation of damages, not
breach. Likewise, suppose the defendant in that same case even believed
that it breached the contract and the plaintiff was damaged, but that the
claim is barred by something else — the statute of limitations or the statute
of frauds, for example. Even though the defendant has notice of plaintiff's
claim, the plaintiff won't know what the defendant's “affirmative defense”
will be, even though the defendant will know what plaintiff's claim is.
So, we require the defendant to respond in a way that helps to narrow
down the issues and to provide notice to the plaintiff of what really is in
dispute, but permit the defendant to raise procedural objections without
addressing the merits of the claim if it so chooses.
Why do the Rules allow the defendant to raise preliminary procedural
objections, such as venue, even before providing notice about its positions
in the suit? After all, that seems like an extra step: why not require anything
that might constitute a flaw or reason not to allow the suit to proceed to be
put in the answer? To save money. Recall that lawyers are required to
investigate under Rule 11 before filing signed papers. Thus, before defense
counsel can take a position in a paper filed with the court on whether each
allegation in the complaint is true or not, defense counsel must reasonably
investigate. Likewise, we'll see that the defendant must plead “affirmative
defenses” in Rule 8(c) and we've seen that he must plead “compulsory
counterclaims” in Rule 13(a). To determine if the defendant has an
affirmative defense or a compulsory counterclaim (or a permissive one, for
that matter), defense counsel must investigate the law and the facts. In some
circumstances, and that investigation can be expensive.
Now imagine that a plaintiff has filed suit in a federal court where
personal jurisdiction is lacking, venue is improper, or where the court lacks
subject matter jurisdiction. Not only are those issues largely separate from
the merits of the claim that the lawyer will need to investigate if she has to
respond to the substantive allegations, they are likely comparatively cheap
to investigate. (Where do the parties reside? Does the defendant have
contacts with the forum? Where did most of the events that led to the
lawsuit occur?) Shouldn't we allow the defendant to raise these preliminary
objections — ones that are essentially separate from the merits, the question
of whether the defendant should pay money to the plaintiff — but which
would require the court to dismiss the claim and avoid or at least delay
defendants' cost to investigate the merits?
To make litigation more efficient for both courts and parties, the Rules
require defendants to respond to allegations and give the plaintiff notice of
affirmative defenses, but the Rules also allow defendants to raise objections
apart from the merits — typically that the suit either should not proceed in
federal court (e.g., subject matter jurisdiction is lacking) or at least in this
particular federal court (e.g., venue is improper or personal jurisdiction is
lacking) — before filing an answer that takes positions on the merits. The
Rules permit defendants to raise these “this is the wrong court” type of
objections without addressing the merits of the allegations.
But, the Rules also permit — with very narrow exceptions — the
defendant to do all of the above at once: it can respond to the plaintiff's
allegations, plead its affirmative defenses, and make “wrong court”
objections, all in one paper. Why this last option? If, after all, the court
lacks subject matter or personal jurisdiction, or venue is improper, the court
will have to dismiss (or transfer) the claim, so why not require the
defendant to raise those objections before dealing with the merits?
The defendant has a choice: it can file a motion that contains preliminary
objections to the suit, or it can file an answer responding to the allegations
in the complaint and raising any affirmative defenses that also includes
(most, but not all) preliminary objections. The defendant has strategic
reasons to file an answer that includes preliminary defenses, as we'll see,
but the choice is largely its own to make (with, again, very limited
exceptions). But, notice what happens if a defendant chooses the “one
paper” route and files an answer that both addresses the merits and raises
“wrong court” objections . . . but then does not promptly file a motion to
have the court to dismiss the claim for lack of personal jurisdiction or
venue. While subject matter jurisdiction cannot be waived, it is easy for a
defendant to waive the two other “wrong court” objections. The defendant
also has the option of doing nothing.
Chapter 27

The Defendant's Initial

Set of Options

Defendant's Initial Options Roadmap

This chapter explains the options available to a defendant.

The Rules give defendants principally three initial options, some or all of
which may be available in a particular case: (1) filing a motion under Rule
12 (the filing of which will, at minimum, postpone the date on which an
answer is due); (2) filing an answer (which can include most, but not all, of
the issues that can be raised by a Rule 12 motion); or (3) doing nothing.
FRCP 12(a)(4). In addition to — not instead of — filing an answer or a
Rule 12 motion, the defendant may also be able to file a motion for
summary judgment under Rule 56. After the defendant files an answer or
Rule 12 motion, it may also have other options, such as moving to transfer
venue from a proper venue to a more convenient one, options we'll explore
later.
The facts and circumstances will dictate both which options are available
as well as which option the defendant should choose as a matter of
litigation strategy. Usually, doing nothing is not an option since it subjects
the defendant to entry of a default judgment against it. Thus, the defendant
will typically do something. This chapter explores its options.

A. Filing a Motion Under Rule 12

Rule 12 authorizes several so-called “defenses,” even though most of
them aren't really defenses to the claim, but rather objections to procedures.
The two that are not in Rule 12(b) — the motion to strike and the motion
for more definite statement — must be made by pre-answer motion. All of
the other defenses in Rule 12 may be included in the answer or can be
raised in one pre-answer motion, but some of them must be included in
whichever the defendant files first — a pre-answer motion or answer.
It is that last point that makes Rule 12 difficult: Rule 12 forces a
defendant who files a Rule 12 motion to include in that one motion some,
but not all, of any other Rule 12 defenses that it might then have available.
If a defendant contends venue is improper, for example, and chooses to
address the lack of venue with a Rule 12(b)(3) motion, it must include in
that motion its objection (if it has one) to personal jurisdiction, or the
objection to personal jurisdiction will be waived. On the other hand, the
defendant doesn't have to include in a Rule 12(b)(3) motion its objection
that the court lacks subject matter jurisdiction, or certain other objections in
Rule 12. So, while filing a Rule 12 motion is one option, exercising that
option may require the defendant to include other Rule 12 objections that it
has available. We'll explore each Rule 12 motion in the coming chapters.

B. Filing an Answer
Another option of the defendant is to file an answer. With two narrow
exceptions (the motion to strike and the motion for more definite statement
under Rules 12(e) and (f)), a defendant can include in its answer every
defense that it can include in a Rule 12 motion. Why, then, would a
defendant choose just to file a Rule 12 motion?
A defendant who files an answer must respond to all of the plaintiff's
allegations, must examine whether it has any counterclaims, must at least
make a preliminary determination as to which parties it may or must join,
and also include every “affirmative defense.” It can cost money and take
time to investigate the merits of a claim to determine whether the defendant
has a claim against the plaintiff, or any non-party, and to determine what
affirmative defenses might exist to the plaintiff's claims: filing a Rule 12
motion avoids those costs.
On the other hand, we'll see that filing an answer eliminates some
procedural options that the plaintiff still has open to it if the defendant files
only a Rule 12 motion. In other words, in some circumstances the defendant
should only file its Rule 12 motion, while in others filing an answer that
includes any Rule 12 defenses is the smarter move.
The important thing during law school is to master how to identify when
each option is available, and how to exercise that option. Which option is
best is a matter of circumstance, judgment and experience, not the Rules.

C. Doing Nothing
A defendant can choose to do nothing in response to being served with a
complaint. If so, the plaintiff can seek entry of a default judgment. See
Chapter 44. Generally, if the defendant has assets, doing nothing is not a
good option. For both practical and legal reasons, however, sometimes
allowing a default judgment to be entered is the best choice.
As a practical matter, if the plaintiff has sued a defendant who has no
assets and cannot afford to pay any judgment or an attorney to defend the
suit, the only option the defendant may have is to do nothing and allow
entry of a default judgment. The plaintiff will have a judgment, but will not
be able to collect on it — a hollow victory — and the defendant will have
avoided incurring attorneys' fees that it cannot afford to pay. The plaintiff at
best becomes a judgment creditor and might recover some portion of the
judgment someday. See Chapter 56.
Putting insolvent or nearly insolvent defendants to the side, there are also
legal reasons why a defendant can choose to allow for entry of a default
judgment despite having the ability to pay any judgment or defend the suit.
Specifically, a defendant might choose not to respond to a complaint
because it believes the court lacks power to enter the judgment against it,
and so any resulting judgment would be void. See Chapter 59. This occurs
most often when a defendant believes suit is filed in a court that lacks
personal jurisdiction over the defendant, subject matter jurisdiction over the
claim, or without having properly served the defendant. In those
circumstances, a defendant can do nothing in response to the complaint,
allow default judgment to be entered against it, but then “collaterally
attack” the default judgment when the plaintiff seeks to execute it and
collect its money. See Chapter 59.
This is a high-risk strategy for both practical and legal reasons.
Obviously, it allows a plaintiff to obtain a default judgment against the
defendant and to try to execute the judgment. Having a judgment against
someone can create credit problems and practical difficulties. In addition, a
defendant who believes that a court lacks personal or subject matter
jurisdiction or that service was defective can raise those objections by Rule
12 motion. If the defendant does not raise the defense that way, then the
burden of proof falls upon the defendant in the plaintiff's effort to enforce
the judgment to establish under Rule 60(b)(4) that the defect should have
prevented entry of the judgment. See Chapter 59.

D. Limitations on the Defendant's

Options
As we saw in Chapter 12, Rule 11 applies to all documents filed with a
court. Thus, pertinent here, it limits the ability of a plaintiff to make claims,
assert personal jurisdiction, allege the propriety of venue, or allege that
subject matter jurisdiction exists. The same implied representations that
apply to plaintiffs and their counsel apply to defendants and their counsel.
As laid out in more detail in Chapter 12, the signature on a paper filed with
a court implies these representations:

Reasonable Inquiry under the Circumstances;

No Improper Purpose;
No Frivolous Legal Arguments, Defenses (or claims);
No Unfounded Allegations; and
No Unfounded Denials of Allegations.

Thus, in analyzing its options, a defendant is limited to asserting claims and

defenses that have a reasonable basis in law and fact, and to denying an
allegation against it only if the denial is supported by evidence.

E. Moving to the Details

In the next several chapters, we'll explore the limitations on and
availability of each option available to the defendant in detail. While we're
learning about the options, remember that another option available to a
defendant is to make claims against other parties who the plaintiff has
joined as parties, and also to join parties that the plaintiff did not sue.

Checkpoints

Can you list the options available to a defendant?

Do you understand why one might be a better choice than the others under particular facts?
Chapter 28

An Introduction to Motions

Motions Roadmap
This chapter provides an overview of motions, including the Rules' technical requirements
as well as the process that the parties and courts follow in deciding motions.

Recall that — perhaps with the exception of subject matter jurisdiction

— federal judges do not sit in a courtroom, examining every pleading
looking for mistakes or missteps, and raising up problems sua sponte.
Instead, judges are very passive and typically only address issues raised by
a party by motion. This chapter explains the mechanical aspects of motions
and their common forms. After all, a motion under Rule 12 is one of the
defendant's initial options.

A. Technical Requirements for Motions

The required first step in filing most motions is a conference between
counsel for the parties in which they try to resolve the issue without
involving the court. Many Rules require counsel to certify in the motion
that in good faith they attempted to resolve the issue before filing a motion.
As a result, it is often required to hold a conference (it can be as simple as a
telephone call), and then include a “certificate of conference” at the end of
the motion.
If a conference is not required, or if it is held but counsel fail to resolve
the issue, then the motion can be filed. The rest of this chapter addresses the
components of motions and how they are resolved through, typically, three
rounds of briefing — motion, response, reply — and then adjudication.

1. Writing, Caption, Grounds

Unless it is made during a hearing or trial, a motion must be in writing,
state the relief sought, and state with particularity the grounds for seeking
that relief. FRCP 7(b)(1). The motion must include a caption and be signed
in accordance with Rule 11. FRCP 7(b)(2), (3). So, for example, the first
page of a motion to dismiss for lack of subject matter jurisdiction in the suit
between Mangia Pizza and Bob Smith, LP involving only a breach of
contract claim might look like this:

Defendant, Bob Smith, LP (“Smith”) respectfully moves this Court to

dismiss this case for lack of subject matter jurisdiction, since for purposes
of subject matter jurisdiction, both Defendant and Plaintiff are citizens of
Texas. In support of its motion, Smith would show the Court as follows . . .
Depending on local rules of the court, sometimes the motion includes
legal argument, or sometimes the argument must be included in a separate
“brief in support” of the motion. It is there that the party's lawyer — you!
— show why (in this hypothetical) the facts and law show that subject
matter jurisdiction is lacking, and move the court as a result to dismiss.

2. Serving and Filing the Motion

A motion must also be “served,” generally on the attorney for each party.
FRCP 5(a), 5(b)(1). “Service” on attorneys for parties can be accomplished
in several ways, and notice of a filing is done automatically by court
electronic filing systems. The rules require that motions include a
“certificate of service” stating that each party had been served. FRCP 5(d).
The party is also required to “file” the motion with the court. FRCP 5(e).
Generally, this is accomplished either by using electronic filing or by
delivering two copies of the motion to the court: one is filed, and the other
is “time stamped” and returned to the lawyer for her files. E-filing is the
norm in federal courts, however.

B. Briefs, Affidavits, and Other Things

Associated with Motions
Motions have different parts, and whether all parts, or only some, must
be included in a particular motion depends on the circumstances, the local
rules of the particular district court, and the type of motion. This section
briefly describes some of the common components that will be pertinent to
our later discussions.
Invariably, motions include legal argument to support the relief sought.
As noted above, sometimes legal argument is physically included in the
motion, while at other times local rules require that the legal briefing be
kept separate from the motion in a separate “brief.” In the argument, the
party who files the motion will explain why it is entitled to have the motion
granted. In the context of Rule 12 motions, for example, the defendant may
explain that Section 1332 requires there be complete diversity but that
because the defendant is a partnership it is deemed to be a citizen of the
states of citizenship of each of its partners, and that, as a matter of fact, one
partner has the same citizenship as the defendant. This argument might look
something like this, to build off of what we learned earlier involving the
one-count, diversity-based suit between Mangia Pizza and Bob Smith:
 This hypothetical motion includes an “affidavit” of Bob Smith. An
affidavit is a document that a lawyer prepares which consists of factual
statements by the “affiant” — Bob Smith — that the affiant swears are true.
Bob Smith's affidavit, for example, in part might look like this:

The affidavit must be signed and sworn to as true by Mr. Smith.

Affidavits are common when, for example, a defendant makes “factual
attack” on subject matter jurisdiction, personal jurisdiction, or venue.
They're also very common in motions for summary judgment or motions to
transfer venue. Affidavits are attached to motions and used to support
factual assertions by the party made in the motion.
Often parties who include a “proposed order” whether filing the motion
or responding to it. Although not required, it's good practice to include a
proposed order since it may make it easier for the judge to properly and
quickly decide the motion. A proposed order from the defendant filed with
its motion to dismiss might look like this:

C. The Opposition to the Motion

When opposing counsel is served with a motion, as required by Rule 11
she must first investigate the law and facts, and then prepare a written
response to the motion explaining why, legally, factually, or both, the
motion should be denied. Thus, in our example above, the plaintiff may
have some factual basis for contending that the defendant is not a citizen of
Texas. What if, for example, the plaintiff knew of facts showing that no
limited partner was a citizen of Texas. The plaintiff would likely include an
affidavit that sought to establish that fact.
The next step is the filing with the court and service on opposing counsel
the response in opposition to it. Typically, local rules of court require that a
response or opposition to a motion be filed within 20 days of the filing of
the motion itself. Often there are strict page limits on motions, oppositions,
and reply briefs.

D. The Reply in Support of the Motion

The third, and typically final, brief comes from the party who filed the
motion and is usually referred to as a “reply” brief. A reply brief is
generally the movant's only chance to address points raised by the other
party in its response. Generally, local rules strictly limit the length of reply
briefs. Local rules typically prohibit parties from filing any more briefs,
absent exceptional circumstances (e.g., after the party files its last brief, a
case is decided that is squarely on point). Reply briefs cannot raise new
arguments not presented in the motion.

E. Court Dockets and Rules on the

Motion
As each paper comes in — motion, response, reply — the clerk of the
court (or the electronic filing system) enters them on the “docket” for the
particular case. (Even though in federal court this is all done electronically,
“docket sheet” persists as a means of describing the list of motions, briefs,
and other papers received by a court for each case.) See generally, FRCP
79(a).
It may come to a surprise to you, and could be either a disappointment or
a relief, but federal courts routinely resolve motions “on the papers”
without oral argument. Oral arguments are becoming less common,
meaning that persuasive, concise writing is a critical skill for lawyers. See
generally, FRCP 78(b).
Either based upon the papers or after considering a brief oral argument,
the district court will enter an “order” like the example above. See
generally, FRCP 79(b). The clerk of the court will then mail a copy of the
order on counsel for each party, or it will be sent electronically. The order
can be quite brief (as in the proposed order above), or it can be a more
lengthy writing in which the district court explains its rationale. Some of
the opinions you read are, essentially, lengthy explanations of why a court
issued an order.
As we'll see in Chapter 57, until there is an order that is a “final judgment
on the merits,” there will almost never be an appeal. In our hypothetical, if
the court dismissed for lack of subject matter jurisdiction, an appeal could
properly be taken by the plaintiff because there would be no further
proceedings in the district court; but if the court denied the motion — if it
kept jurisdiction over the claim because it concluded it had subject matter
jurisdiction — then the case would proceed. The defendant could not
immediately appeal because the order did not end litigation, and so is not a
final judgment.
That last point bears emphasizing, because it may be counter-intuitive:
there generally is no “second chance” to go on appeal immediately after a
party loses a motion. Unless the order falls into one of a few narrow classes
of orders that can be appealed on an “interlocutory” basis, no order of a
district court can be appealed until after the entire case is finally resolved
by entry of a “final judgment.” Lawyers typically get only one chance.

Checkpoints

Can you identify the technical requirements for motions? For how motions are adjudicated?
Do you understand the function of affidavits, briefs, and other parts of a motion? Do you understand
what an “order” is and the distinction between it and a “final judgment”?
Chapter 29

When and Why Must

a Defendant File an Answer
or Rule 12 Motion?

File an Answer or a Rule 12 Motion

Roadmap
This chapter shows that, to avoid giving the plaintiff the power to seek entry of a default
judgment, a defendant must timely file either an answer or, if it has grounds to do so, a Rule
12 pre-answer motion. Filing a Rule 12 motion delays the time for filing an answer, and an
answer can be more expensive to prepare than a Rule 12 motion, since preparing an answer
requires defense counsel to conduct a more vigorous legal and factual investigation into all
allegations of the complaint, affirmative defenses, and joinder of claims and parties.

A. When and Why Must a Rule 12

Motion
or Answer Be Filed?
1. When Must a Rule 12 Motion or Answer Be
Filed?
As we saw, when a plaintiff files a suit it must mail to the defendant a
copy of the complaint along with a request for waiver of service of the
summons. That form explains to the defendant that it can either waive
service of process, in which case it has 60 days to respond to the complaint,
or it can require service, in which case it will only have 21 days to answer
the complaint after it is formally served. See Chapters 26 and 27; FRCP
12(a)(1).
2. Why Must a Rule 12 Motion or Answer Be
Filed?
Rule 12(a) requires filing an answer but Rule 12(a)(4) extends the time to
file an answer if the defendant files a Rule 12 motion. If a defendant does
not either timely file its answer or a Rule 12 motion, then the plaintiff can
move for entry of a default judgment. See Chapter 45. If default judgment is
entered, then defendant is at risk of the plaintiff moving forward to execute
the judgment, meaning having the government (typically a sheriff) force the
defendant to sell property and pay money to the plaintiff, for example.
Filing a Rule 12 motion postpones the time that the defendant must file a
responsive pleading, called an answer. If the court denies the Rule 12
motion, how much time the party gets to file its responsive pleading turns
on which type of Rule 12 motion it filed and how the court ruled on it:
(A) If the court denies the motion or postpones its disposition until
trial, the responsive pleading must be served within 14 days after
notice of the court's action; or
(B) If the court grants a motion for more definite statement, the
responsive pleading must be served within 14 days after the more
definite statement is served.
Rule 12(A)(4). Obviously, if the motion is granted the case may be
dismissed or transferred to a different district.

B. What Must or Can be Raised

in a Rule 12 Motion?
Two objections — as to scandalous or other improper material in the
complaint and as to the indefiniteness of the complaint — must be made in
a pre-answer motion. See FRCP 12(e) and 12(f). Seven others can be made
either in an answer or, at the option of the defendant, in a — one — pre-
answer motion, as Rule 12(b) tries to make clear:
Every defense to a claim for relief in any pleading must be asserted in
the responsive pleading if one is required. But a party may assert the
following defenses by motion: (1) lack of subject matter jurisdiction;
(2) lack of personal jurisdiction; (3) improper venue; (4) insufficient
process; (5) insufficient service of process; (6) failure to state a claim
 upon which relief can be granted; and (7) failure to join an
indispensable party.
This chart summarizes where, and so effectively when, Rule 12 defenses
can be made.

The next few chapters explore each Rule 12 objection, because defense
counsel must promptly analyze whether any Rule 12 objection is available
because many must be asserted no later than in the answer. Later, we'll
explore the “consolidation requirement” and see that if the defendant files a
Rule 12 pre-answer motion, many of the Rule 12 objections are waived if
they are not “consolidated” and included in that Rule 12 pre-answer motion
and, further, if one Rule 12 pre-answer motion is made, a second pre-
answer Rule 12 motion is improper. See Chapter 36.

Checkpoints

Can you identify how long a defendant has to respond to receipt of a complaint?
Can you explain why a defendant must file either a Rule 12 motion or an answer?
Can you identify those Rule 12 objections that must be raised in a pre-answer motion? That may be?
Chapter 30

Rule 12(b)(1) Challenges to

Subject Matter Jurisdiction

Rule 12(b)(1) Roadmap

This chapter describes the two forms of Rule 12(b)(1) motions and how each is decided.
This chapter explains related doctrines, under which subject matter jurisdiction might
literally exist, but other Constitutional or prudential concerns either require that the federal
court dismiss the claim, or give it discretion to stay its hand pending resolution of related state
court proceedings.

A party asserting lack of subject matter jurisdiction as to one or more

claims can raise the objection at any time, including before filing an answer
in a Rule 12 pre-answer motion and even while the case is on appeal after
final judgment. Most often, a defendant will raise lack of subject matter
jurisdiction early by pre-answer motion under Rule 12(b)(1), because a
district court without subject matter jurisdiction over a claim must dismiss
that claim.

A. Two Forms of Attack

Motions to dismiss for lack of subject matter jurisdiction either are
“facial attacks” — in which the defendant asserts that even if the allegations
in the complaint are taken as true the complaint insufficiently invokes
subject matter jurisdiction — or factual attacks (sometimes called
“speaking motions”), where the defendant takes issue with and attempts to
prove as false allegations in the complaint by, for example, submitting an
affidavit attesting that certain facts alleged in the complaint (e.g., the
citizenship of the defendant) are inaccurate or untrue. See Miller v. Mer,
2006 WL 1735355 (S.D. Ohio 2006). Subject matter jurisdiction must be
analyzed on a claim-by-claim basis.
1. Facial Attacks
If a party does not challenge the truth or accuracy of facts alleged in the
complaint, the court must accept those allegations as true. McCann v.
Newman Irrevocable Trust, 458 F.3d 281 (3rd Cir. 2006). The question for
the court is, assuming the alleged facts are true, is there subject matter
jurisdiction over the claim?

2. Factual Attacks
If a party in a Rule 12(b)(1) motion contests any of the allegations in the
complaint by submitting evidence (through, for example, an affidavit), the
plaintiff can include evidence in its response to the motion. The nonmoving
party (i.e., typically the party claiming jurisdiction exists) must introduce
specific facts, not mere speculation. Harleysville Mut. Ins. Co. v. Packer, 60
F.3d 1116, 1119–20 (4th Cir.1995). These factual motions typically are
litigated when diversity is the basis for subject matter jurisdiction, and the
defendant contends the citizenship of one or more parties is not accurately
alleged.
The court then decides the motion by weighing the evidence. The party
asserting that subject matter jurisdiction exists has the burden to prove the
facts by preponderant evidence. McCann v. Newman Irrevocable Trust, 458
F.3d 281 (3rd Cir. 2006). A live hearing may be needed in unusual
circumstances.

B. The Impact of Adjudication

If a court grants a motion to dismiss a claim for lack of subject matter
jurisdiction, then the claim is dismissed but without prejudice. See FRCP
41(b). The claim can be refiled, but must be refiled in state court.
Whether dismissal of one claim of a multi-claim suit means the entire
case is dismissed usually depends upon whether a claim over which the
court has original jurisdiction remains pending. However, sometimes even
if the only remaining claims are those over which the court lacks original
subject matter jurisdiction, the court can still keep the case under 28 U.S.C.
§ 1367(c)(3). See Chapter 21.

C. Additional Doctrines Related to

 Subject
Matter Jurisdiction
In some instances even a federal court that has subject matter jurisdiction
can, nonetheless, lack the power to adjudicate a claim or have discretion to
refuse to do so. These objections may be available to a defendant at the
time it is filing its answer or later.
In some circumstances, federal courts lack power to adjudicate claims
because the Constitution limits judicial power to “cases or controversies.” If
a claim presents no “case or controversy,” there is no constitutional
authority for a federal court to act. As we will see, a “case or controversy”
can be absent because the dispute is not yet ripe, the dispute has become
moot, or the plaintiff lacks “standing” — it doesn't have a personal stake in
the dispute distinct from any member of the public — to raise the claim.
These doctrines have different sources and different dimensions, but they
all share the same basic principle of prohibiting or giving discretion to
federal courts to choose not to adjudicate a claim. You may not reach these
doctrines in your first year civil procedure course, but you might. They are
covered in upper-year “federal courts” or “federal jurisdiction” classes, if
not during the first year. They're covered here just briefly.
Even if there is an actual case or controversy presented by a claim, under
some narrow circumstances the court, nonetheless, may — and sometimes,
must — refuse to adjudicate the claim. Generally, we'll see that there are
several differently named but closely related “abstention doctrines” under
which federal courts refuse to decide a claim, usually because doing so will
implicate a parallel or previous state suit on the same subject matter. We'll
see that these doctrines are fairly straightforward — a party who lost in
state court generally can't file a suit in federal district court to “overturn”
the state court judgment for example — while others turn on somewhat
complex balancing of competing and subtle policies.
The following chart summarizes the doctrines discussed in this chapter.
Each is distinct and must be analyzed separately. It's possible that a claim
could be ripe, but the plaintiff lack standing; or be subject to multiple bases
for abstention, for example.
In addition to what it depicts, there are other limitations, such as the
“political question doctrine” which deems non-justiciable questions that the
Constitution assigns to other branches of government. See, e.g., Nixon v.
U.S., 506 U.S. 224 (1993) (no subject matter jurisdiction over challenge to
trial procedure followed by the U.S. Senate); Goldwater v. Carter, 444 U.S.
(1979) (same as to President's decision to unilaterally abrogate a treaty with
a foreign country). This doctrine is sometimes studied in constitutional law,
not civil procedure classes.

1. A Summary Chart

2. Requirements Originating from Article III's

Case
or Controversy Clause
The first series of limitations all are anchored in the U.S. Constitution.
Article III of the United States Constitution both grants and limits judicial
power. In full, that Article provides:
Section 1. The judicial Power of the United States, shall be vested in
one supreme Court, and in such inferior Courts as the Congress may
from time to time ordain and establish. The Judges, both of the
supreme and inferior Courts, shall hold their Offices during good
Behaviour, and shall, at stated Times, receive for their Services, a
Compensation, which shall not be diminished during their
Continuance in Office.
Section 2. The judicial Power shall extend to all Cases, in Law and
Equity, arising under this Constitution, the Laws of the United States,
and Treaties made, or which shall be made, under their Authority; —
to all Cases affecting Ambassadors, other public Ministers and
Consuls; — to all Cases of admiralty and maritime Jurisdiction; — to
Controversies to which the United States shall be a Party; — to
Controversies between two or more States; — between a State and
Citizens of another State; — between Citizens of different States; —
between Citizens of the same State claiming Lands under Grants of
different States, and between a State, or the Citizens thereof, and
foreign States, Citizens or Subjects.
In all Cases affecting Ambassadors, other public Ministers and
Consuls, and those in which a State shall be Party, the supreme Court
shall have original Jurisdiction. In all the other Cases before
mentioned, the supreme Court shall have appellate Jurisdiction, both
as to Law and Fact, with such Exceptions, and under such Regulations
as the Congress shall make.
The Trial of all Crimes, except in Cases of Impeachment, shall be by
Jury; and such Trial shall be held in the State where the said Crimes
shall have been committed; but when not committed within any State,
the Trial shall be at such Place or Places as the Congress may by Law
have directed.
Section 3. Treason against the United States, shall consist only in
levying War against them, or in adhering to their Enemies, giving them
 Aid and Comfort. No Person shall be convicted of Treason unless on
the Testimony of two Witnesses to the same overt Act, or on
Confession in open Court.
The Congress shall have Power to declare the Punishment of
Treason, but no Attainder of Treason shall work Corruption of Blood,
or Forfeiture except during the Life of the Person attainted.
While obviously authorizing federal courts to decide disputes, this
language includes important limitations: there must be a “case” or
“controversy” to be adjudicated. The words “case” or “controversy” have a
very specific, limited meaning, as we've already seen in other contexts. The
grant of power in Article III is limited to the power to decide actual
controversies between parties.
We've not focused on why the Framers chose to limit judicial power to
cases or controversies. It wasn't by mistake. No “principle is more
fundamental to the judiciary's proper role in our system of government that
the constitutional limitation of federal-court jurisdiction to actual cases or
controversies.” Raines v. Byrd, 521 U.S. 811, 818 (1997). Why? Because if
the courts had power to resolve just any question — one that didn't involve
a concrete dispute between parties — then judicial power would extend to
virtually “every subject proper for legislative discussion and decision. . . .
The division of power [among the branches of government] could exist no
longer, and the other departments would be swallowed up by the judiciary.”
4 PAPERS OF JOHN MARSHALL 95 (C. Cullen ed. 1984). The “case or
controversy” requirement keeps the courts from acting as executives or
legislatures — issuing orders to govern solely future contemplated conduct,
not to address existing or completed actions or to remedy their future
impact. Thus, these limitations serve to check the unelected,
unrepresentative judiciary in another-wise democratic government. Allen v.
Wright, 468 U.S. 737, 760 (1984).
Most of the time, these doctrines are irrelevant to litigants. A party to a
contract who sues because the other party has failed to deliver on time has a
ripe, actual, case or controversy, and has standing to bring the claim. But
the doctrines are important because they are invoked in civil lawsuits and,
more importantly, they are fundamental to our system of divided
government, and the principle of separation of powers.
Over time, Article III has been construed to create a number of prudential
limitations on the exercise of federal judicial power. This chapter examines
the more common limitations that arise out of Article III: standing,
ripeness, and mootness (and its exception). If a claim is not ripe, or if it has
become moot, or if the plaintiff lacks standing to bring the claim, then
(absent an exception), the court lacks power to adjudicate the claim and
must dismiss it. Parties cannot waive these requirements. This is true even
if the Supreme Court is the first court to recognize that something is amiss.
The requirements of standing, ripeness, and lack of mootness are
constitutional jurisdictional requirements that cannot be waived by the
parties. Accordingly, the courts have an independent obligation to examine
whether a case or controversy is present. DaimlerChrysler Corp. v. Cuno,
126 S.Ct. 1854 (2006).
The doctrines examined in this section all originate in Article III's “case
or controversy” requirement. DaimlerChrysler Corp. v. Cuno, 126 S.Ct.
1854 (2006). They are inter-related and in some cases an analysis of
standing could be made under ripeness, and vice versa. See Wilderness
Soc'y v. Alcock, 83 F.3d 386, 389–90 (11th Cir. 1996) (noting that courts
confuse and conflate ripeness and standing analyses). Despite their
relatedness and overlap, each must be analyzed separately.

a. Constitutional Standing
“Standing” is a term that is used in various contexts. This section
discusses the Constitutional aspect of “standing” that originates in Article
III. The narrow “prudential” aspect of standing is discussed below in this
chapter. The “case or controversy” requirement of Article III requires that
the party asserting a claim have standing to do so. DaimlerChrysler Corp. v.
Cuno, 126 S.Ct. 1854 (2006) (collecting cases). Constitutional standing is
determined on a case-by-case basis. Id. Thus, it may be that a plaintiff has
standing to bring one claim but not another. If the plaintiff lacks standing to
bring a claim, then the court must dismiss the claim for lack of subject
matter jurisdiction: federal jurisdiction is limited to cases or controversies,
and a case or controversy requires that the party asserting the claim have
standing to do so. Id. Neither the parties nor the courts can waive standing
as it is a Constitutional requirement. See id.
The basic requirement of Constitutional standing is simple to state: (1)
the plaintiff must have suffered an injury in fact; (2) there must be a causal
connection between that injury and the conduct about which the plaintiff
complains; and (3) it must be likely, and not just speculative, that the injury
will be redressed by a favorable judicial decision. Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560–61 (1992). A court must conduct “careful . . .
examination of a complaint's allegations to ascertain whether the particular
plaintiff is entitled to an adjudication of the particular claims asserted.”
Allen, 468 U.S. at 752. Constitutional standing is measured at the time the
complaint is filed. Lujan, 504 U.S. at 569 n. 4; ACLU of Nev. v. Lomax,
2006 WL 352579 (9th Cir. Dec. 8, 2006). Thus, events subsequent to the
filing of the pleading containing the claim will not affect Constitutional
standing, although the claim can become moot. See below.

b. Ripeness
Article III's case or controversy limitation requires that a claim be “ripe”
for decision. Because ripeness is a Constitutional requirement, the parties
cannot waive it and the court should satisfy itself that a claim is ripe. Nat'l
Park Hospitality Ass'n. v. Dep't of Interior, 538 U.S. 803, 808 (2003).
Although Constitutional in origin, the ripeness requirement also has
prudential aspects. Id. The Constitutional aspect arises from the limitation
in Article III of federal judicial power to a “case or controversy”; the
prudential aspects arise from the desire to prevent federal courts “from
engaging in speculation or wasting their resources through the review of
potential or abstract disputes.” Digital Props., Inc. v. City of Plantation, 121
F.3d 586, 590 (11th Cir. 1997). At bottom, the ripeness doctrine prevents
federal courts from deciding cases prematurely, before a judicial decision is
actually necessary. A court must determine “whether the claim is
sufficiently mature, and the issues sufficiently defined and concrete, to
permit effective decision-making by the court.” Id. at 589.
A claim is ripe only if the issues raised are concrete enough for judicial
decision in light of the hardship to the parties of withholding judicial
determination. Abbott Labs. v. Gardner, 387 U.S. 136, 149 (1967). In
making the decision, the court must consider “(1) whether delayed review
would cause hardship to the plaintiffs; (2) whether judicial intervention
would inappropriately interfere with further administrative action; and (3)
whether the courts would benefit from further factual development of the
issues presented.” Ohio Forestry Ass'n, Inc. v. Sierra Club, 523 U.S. 726,
733 (1998).

c. Mootness
 Mootness is a requirement for justiciability of a “case or controversy”
under Article III. Protestant Mem. Med. Center, Inc. v. Maram, 2006 WL
3499943 (7th Cir. 2006). Similar to ripeness, the doctrine helps to avoid
judicial pronouncements on legal questions that do not impact an existing
controversy; with ripeness, the controversy has not yet become concrete
enough, but with mootness, a judicial decision will not affect any existing
right. Parties cannot waive mootness, and a court must ensure that a claim
has not become moot.
“To qualify as a case fit for federal-court adjudication, an actual
controversy must be extant at all stages of review, not merely at the time the
complaint is filed.” Arizonans for Official English v. Arizona, 520 U.S. 43,
67 (1997). “Federal courts have no power to hear moot cases, and because a
case can become moot at any time — even after entry of a final judgment
— the doctrine prevents a federal court of appeals from exercising its
appellate jurisdiction in a moot case.” Brooks v. Vassar, 462 F.3d 341, 348
(4th Cir. 2006). A once-ripe claim, therefore, can become moot.

i. The Exception to the Mootness Limitation: Courts

May Adjudicate Claims Capable of Repetition
Yet Evading Review
A claim that has become moot may, nonetheless, be within the subject
matter jurisdiction of the federal courts if it is “capable of repetition, yet
evading review.” There are two requirements to fall within this exception:
(1) the challenged action must have been too short in its duration to be fully
litigated prior to its cessation or expiration, and (2) there must be a
reasonable expectation that the same plaintiff will again be subjected to the
same conduct. Lewis v. Cont'l Bank Corp., 494 U.S. 472, 481 (1990).
With respect to the first element, an action evades review if it is “almost
certain to run its course before [an appellate court] can give the case full
consideration.” ACLU of Nev. v. Lomax, 2006 WL 3525179 (9th Cir. Dec.
2006). An example would be a challenge to an election procedure, since an
election will likely end before a court could rule on the challenge to any
election procedure or review on appeal any order issued by a district court
concerning that procedure. Id. With respect to the second element, the party
invoking the exception need only show that it is reasonable to expect that
the defendant will engage in the same conduct again. ACLU of Nev., 2006
WL 3525179 at *6. In one recent case, after a district court entered
judgment for the plaintiff finding a statute unconstitutional in part, the
legislature changed the statute to eliminate the infirmities identified by the
district court, and so the question of mootness was raised on appeal. Brooks
v. Vassar, 462 F.3d 341, 348 (4th Cir. 2006). The court of appeals explained
that without it being reasonably likely that the legislature would re-enact
the unconstitutional portions of the statute, the claims related to the
unconstitutionality of that aspect were moot, and the second element could
not be shown.

3. Prudential Standing Requirements

Prudential standing is distinct from Constitutional standing. Elk Grove
Unified School Dist. v. Newdow, 542 US 1, 12 (2004). Although closely
related to constitutional standing, prudential standing embodies “judicially
self-imposed limits on the exercise of federal jurisdiction.” Id. Prudential
standing can preclude a federal court from adjudicating even a ripe, non-
moot, actual case or controversy.
Prudential standing has not been “exhaustively defined.” Id. It
“encompasses ‘the general prohibition on a litigant's raising another
person's legal rights, the rule barring adjudication of generalized grievance
more appropriately addressed in the representative branches, and the
requirement that a plaintiff's complaint fall within the zone of interests
protected by the law invoked.’” Id.(quoting Allen v. Wright, 468 U.S. 737,
751 (1984)). The Supreme Court has reasoned that without these self-
imposed restraints, “courts would be called upon to decide abstract
questions of wide public significance even though other governmental
institutions may be more competent to address the questions and even
though judicial intervention may be unnecessary to protect individual
rights.” Id. (quoting Warth v. Sedlin, 422 U.S. 490, 500 (1975)).
The principal subject matter to which the Court has held that prudential
standing applies are domestic relations disputes, which is principally state
law governing the legal relations between husband, wife, and children. Id.
The Court has gone so far as to recognize a “domestic relations exception”
that “divests federal courts of power to issue divorce, alimony, and child
custody decrees.” Id. at 12–13 (quoting Ankenbrandt v. Richards, 504 U.S.
689, 703 (1992)). Thus, even if two spouses seeking divorce resided in
different states and are disputing an estate valued at more than $75,000,
federal courts lack power to address the divorce case. But cf. Palmore v.
Sidoti, 466 U.S. 429, 432–434 (1984) (court could answer a substantial
federal question that existed apart from the state family law issues).
The Elk Grove decision arguably broadened this exception. In that case, a
father filed a federal suit because state schools required teachers to lead
recitation of the Pledge of Allegiance. However, the father was in a child-
custody dispute in state court with the mother while this federal court action
was proceeding. While at the time suit was filed he had the right to bring
suit on her behalf, during pendency of the suit, that changed, and the mother
was awarded that right. The Supreme Court held that prudential standing
precluded jurisdiction over the case because the father's standing to
prosecute the suit on his daughter's behalf was “founded on family law
rights that are in dispute” and prosecution of the suit could “have an
adverse effect on the person who is the source of the plaintiff's claimed
standing.” Id. at 18. Thus, in Elk Grove because the father's right to sue on
his daughter's behalf had been taken away by a California state court while
the Elk Grove decision was in litigation, the court held that “the prudent
court is for the federal court to stay its hand rather than reach out to resolve
a weighty question of federal constitutional law.” Id. Several opinions were
written in Elk Grove, one of which wondered why Palmore did not control,
since the question of whether the Pledge could be required was a substantial
federal question that existed apart from the question of custody. Id. at 21–22
(Rehnquist, J., concurring in the judgment). For now, Elk Grove probably
represents an extreme illustration of prudential standing limitations.
Finally, federal courts similarly rely on prudential standing principles to
decline to adjudicate probate matters. Markham v. Allen, 326 U.S. 490, 494
(1946). The parameters of this limitation on federal power and its
exceptions are not as developed as the “domestic relations” exception.

4. Other Limitations on Federal Judicial Power

The foregoing limitations emanate directly from or at least are closely
related to Article III's limitation of judicial power to “cases or
controversies.” The following doctrines also relate judicial power, but
originate from more distant sources, policies, or concerns. With the
exception of the Rooker-Feldman doctrine, they do not mean that the court
lacks subject matter jurisdiction to address a dispute, but rather that it
should “abstain” from adjudicating a claim even though it has power to do
so. They are, as a result, known as the various “abstention doctrines.” This
section covers the principal abstention doctrines, each one known by the
case in which it was first recognized.

a. Rooker-Feldman: Review of State Court

Orders go to the
Supreme Court, Not Federal District Courts
A federal statute vests federal subject matter jurisdiction over appeals
from state court judgments exclusively in the Supreme Court. See 28 U.S.C.
§ 1257. To enforce that statute, if a state court enters a judgment against a
party in state court, but the loser files suit in federal district court that, in
essence, seeks to reverse that state court judgment, then the federal district
court lacks subject matter jurisdiction. ExxonMobil Corp. v. Saudi Basic
Indus. Corp., 544 U.S. 280 (2005). The plaintiff should have appealed, not
filed another suit. Because the Rooker-Feldman doctrine is jurisdictional,
the circuit courts hold that it may be raised at any time and cannot be
waived by the parties. Am. Reliable Ins. Co. v. Stillwell, 336 F.3d 311, 316
(4th Cir. 2003) (collecting cases).
The Rooker-Feldman doctrine covers cases where a party who has lost a
judgment in state court complains in federal court of injuries caused by that
judgment. Id. To establish that jurisdiction is exclusive in the Supreme
Court, the party invoking Rooker-Feldman must establish that: (1) there
was a state court judgment entered before the federal suit was filed and (2)
the federal suit is seeking to review and reject that judgment. Id.
With respect to the first element, the state court judgment must be prior
to the filing of the federal suit. Rooker-Feldman does not apply where one
party files a state court suit, and then while that suit is pending the other
party files a mirror-image federal court lawsuit, and the state court case gets
to judgment before the federal case. Id.(It may be that under such
circumstances claim or issue preclusion might apply. See Chapter 60.) Thus,
parallel state court litigation is no bar to federal court subject matter
jurisdiction. Id. With respect to the second element, the doctrine only
applies when a party is seeking to have the federal court review and reject
the state court judgment. In both Rooker and Feldman, the federal court
plaintiffs asked the federal court to overturn prior state court judgments.
Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923) (state court judgment
loser filed federal suit to have state judgment declared “null and void”). A
“party losing in state court is barred from seeking what in substance would
be appellate review of the state judgment in a United States district court.”
Johnson v. De Grandy, 512 U.S. 997, 1005–06 (1994). Thus, the doctrine
applies only if the plaintiff is seeking to set aside a state court judgment; it
does not apply if he is, in fact, presenting an independent claim. Id.
As a consequence, it is possible for a court to have subject matter
jurisdiction over some, but not all, claims in a complaint. For example, in
Dist. of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983), two
men who had lost a suit to have a state appellate court waive its rule
imposing qualifications to practice law, filed federal court suit to overturn
the court's decision to deny their request. The Court held that the district
court lacked subject matter jurisdiction to overturn the court's decision that
they personally could be admitted, but not over their claim that the
challenged rule was itself unconstitutional. The rule could be challenged,
but not its application in a particular case. Id. Thus, if a federal plaintiff
pleads “some independent claim, albeit one that denies a legal conclusion
that a state court has reached in a case to which he was a party . . . then
there is jurisdiction and state law determines whether the defendant prevails
under principles of [claim or issue] preclusion.” ExxonMobil, 544 U.S. at
294.
Prior to ExxonMobil, appellate courts had given the Rooker-Feldman
doctrine much greater breadth than the Court found appropriate in
ExxonMobil. So, many cases decided prior to 2005 applying Rooker-
Feldman may no longer be good law.

b. Younger “Abstention”
Although it is not typical, it is also not rare for multiple suits to be filed
arising out of the same dispute. If there are both an on-going state court
proceeding and a federal suit arising out of the same dispute, there is no
way for a federal court to “transfer venue” to the state court, and if subject
matter jurisdiction exists, no way for the federal court to dismiss. What the
federal court can do, however, is abstain from adjudicating the repetitious
claims. That fact pattern — on-going state and federal court proceedings on
the same subject — is the paradigm of Younger and Colorado River
abstention doctrines.
Younger and Colorado River abstention doctrines are related to each
other and, to a lesser extent, Rooker-Feldman. Under Younger and
Colorado River, a federal court with subject matter jurisdiction over a claim
can abstain from deciding the claim because there is parallel, on-going state
court litigation involving the same issues. In such circumstances, the court
should either stay or dismiss the federal suit pending resolution of the state
court proceedings to avoid unnecessary intrusion into state matters and in
recognition of the limited nature of federal government.
Younger v. Harris, 401 U.S. 37 (1971) established the strong federal
policy against interfering in ongoing state court matters without
“extraordinary circumstances” justifying doing so. This notion, called
“comity,” ensures “a proper respect for state functions, a recognition of the
fact that the entire country is made up of a Union of separate state
governments, and a continuance of the belief that that National Government
will fare best if the States and their institutions are left to perform their
separate ways.” Middlesex County Ethics Comm. v. Garden State B. Ass'n.,
457 U.S. 423, 431 (1982). The federal court has subject matter jurisdiction,
but refrains from acting. Nivens v. Gilchrist, 444 F.3d 237, 247–48 (4th Cir.
2006)
Younger abstention is proper when a parallel state court proceeding (1) is
currently pending, (2) involves an important, substantial, or vital state
interest, and (3) affords the plaintiff an adequate opportunity to raise
constitutional claims. See Nivens v. Gilchrist, 444 F.3d 237 (4th Cir. 2006).
Those circumstances permit the federal court to abstain, but there are
exceptions which permit it to continue: (a) it's shown that the state officials
responsible for the prosecution are acting in bad faith or to harass; (b) the
law applied in the criminal proceeding flagrantly and patently violates
express Constitutional provisions; or (c) “other extraordinary
circumstances” exist. Kugler v. Helfant, 421 U.S. 117, 124 (1975). Despite
exceptions, the “cost, anxiety, and inconvenience of having to defend
against a criminal prosecution alone [does] not constitute irreparable injury.
Younger, 401 U.S. at 46.
If, based on those factors the court finds a substantial risk of direct
interference with on-going state proceedings, it can dismiss the federal
claim or keep it but abstain from taking any further action pending
resolution of the state court matter. Nivens v. Gilchrist, 444 F.3d 237 (4th
Cir. 2006). A district court's decision to abstain or dismiss, or not, is
reviewed for abuse of discretion. Id.
 c. Colorado River Abstention
Abstention under Colorado River Water Conserv. Dist. v. U.S., 424 U.S.
800 (1976) is related to but distinct from Younger abstention. In Colorado
River, the Court recognized that, as did Younger, the existence of an on-
going state suit did not deprive the federal court of subject matter
jurisdiction over a claim arising out of the same subject matter but
considerations of federal-state comity and “wise judicial administration”
can justify abstaining despite having jurisdiction.
There need not be identical claims or complete identity of parties to
justify abstention under Colorado River. Romine v. CompuServe Corp., 160
F.3d 337, 339 (6th Cir. 1998). Instead, various factors affect whether
abstention under Colorado River is warranted: (1) whether the state court
has assumed jurisdiction over any res or property; (2) whether the federal
forum is less convenient to the parties; (3) avoidance of piecemeal
litigation; (4) the order in which jurisdiction was obtained; (5) whether state
or federal law provides the rule of decision; (6) the adequacy of the state
court action to protect the federal plaintiff's rights; (7) the relative progress
of the state and federal proceedings; and (8) the presence or absence of
concurrent jurisdiction. Id. at 340–41.

d. Pullman Abstention
The Pullman abstention doctrine arose from a case about Pullman
railroad sleeping cars, where a federal court was asked to restrain an order
of the Texas Railroad Commission requiring the use of attendants in
railroad sleeping cars. Tex. Railroad Comm'n. v. Pullman, 312 U.S 643
(1941). The problem was that the federal issue was of constitutional import,
but that issue had to be decided only if state law was interpreted a certain
way, and the meaning of state law was very uncertain. So, if the state law
was interpreted one way, there was no constitutional issue. The Fifth Circuit
had gone ahead and interpreted state law and then affirmed an injunction
against the order. However, the Court held that the federal courts, though
having subject matter jurisdiction, should have abstained and let the state
courts figure out the state law issue first, since that might have obviated the
need to determine the federal constitutional issue. Pullman is thus about
avoiding a constitutional question when reaching it turns on an
interpretation of unsettled state law. The Court recognized that the Texas
Supreme Court would have the final word on whether the Commission had
acted within the scope of its authority under Texas law. Id. at 499–500.
Nothing precluded that state court suit from being “brought with reasonable
promptness, in the state court.” Id. at 502. Thus, the Court held that the
federal courts should retain jurisdiction over the action, but abstain while
that state court process went forward. The court reached this result because
the case touched a sensitive area of social policy, a state decision could
obviate the need for federal constitutional adjudication, and any federal
construction of the state law might be ignored or rejected by a state court,
definitive decision.
Courts now characterize the purpose of Pullman as two-fold: (1)
avoiding constitutional questions when their resolution is unnecessary and
(2) allowing state courts to decide unsettled issues of state law. Nivens v.
Gilchrist, 444 F.3d 237, 246 n. 6 (4th Cir. 2006). Over time, the Pullman
analysis has become identified with these factors:
(1) The complaint touches a sensitive area of social policy upon which
the federal courts ought not to enter unless no alternative to its
adjudication is open.
(2) Such constitutional adjudication plainly can be avoided if a
definitive ruling on the state issue would terminate the controversy;
and
(3) The possibly determinative issue of state law is doubtful.
Smelt v. County of Orange, 447 F.3d 673 (9th Cir. 2006).

Checkpoints

Can you distinguish a facial attack from a factual attack?

Can you explain whether a claim that is dismissed for lack of subject matter jurisdiction can be re-
filed?
Can you describe the various doctrines related to subject matter jurisdiction and their purposes?
Chapter 31

Rule 12(b)(2) Challenges

to Personal Jurisdiction

Rule 12(b)(2) Roadmap

This chapter describes the two different forms of motions to challenge personal jurisdiction
and how they are decided.
This chapter also analyzes how an objection to personal jurisdiction can be waived, either
by consent before the dispute even arose or after suit has been filed — by design or neglect.

A party that has a Rule 11 basis for asserting that a court lacks personal
jurisdiction over one or more claims asserted against it has several options.
Some options allow for immediate litigation of the objection, others waive
the objection, and others delay litigation of the issue, at least for a while.

A. Promptly and Timely Objecting to

Lack
of Personal Jurisdiction
The Rules give a party three places to raise an objection of lack of
personal jurisdiction: in the pre-answer Rule 12(b)(2) motion; if there has
not been a pre-answer motion, in the answer; or, an amendment to the
answer that is allowed as a matter of right. FRCP 12(g), (h). See Chapter 41
(discussing amendments to pleadings).

1. Two Types of Challenges to Personal

Jurisdiction
A party has the burden of establishing that the court has personal
jurisdiction over each claim it asserts. DiStefano v. Carozzi N. Am., Inc.,
286 F.3d 81, 84 (2d Cir. 2001). How great that burden is depends on which
of the two types of challenge the defendant makes. The type of challenge
also affects the burden of proof and also the procedure that is used to
adjudicate the motion.

a. Facial Challenges
A facial challenge assumes the truth of the allegations in the pleading but
nonetheless contends the court lacks personal jurisdiction. If a defendant
makes a facial challenge, then the plaintiff must merely establish a prima
facie showing of personal jurisdiction. The defendant basically says, “if
everything the plaintiff pled is true, there still is no personal jurisdiction.”

b. Factual Challenges
In a factual attack on personal jurisdiction, the defendant disputes the
jurisdictional facts pled in the pleading and submits evidence, such as
affidavits, with its motion showing that, as a factual matter, the court lacks
personal jurisdiction over one or more claims. In deciding how to
adjudicate a factual attack, the district may use these procedures, or a
combination, or all three:
(a) determine the motions based on affidavits alone;
(b) permit discovery which would help resolve the motion; or
(c) conduct an evidentiary hearing on the motion.
See Intera Corp. v. Henderson, 428 F.3d 605 (6th Cir. 2005). “When a non-
resident defendant presents a motion to dismiss for lack of personal
jurisdiction, the plaintiff bears the burden of establishing the district court's
jurisdiction over the non-resident. The court may determine the
jurisdictional issue by receiving affidavits, interrogatories, depositions, oral
testimony, or any combination of the recognized methods of discovery.”
Allred v. Moore & Peterson, 117 F.3d 278, 281 (5th Cir. 1997).
Parties often choose to rely on affidavits alone. The defendant's lawyer
will submit along with its motion to dismiss, a sworn statement from its
client, third parties, or both, swearing as to facts which the lawyer will use
to argue that requirements of the long-arm statute, minimum contacts, and
“fair play” are not met. Plaintiff's counsel can do the opposite in the
response to the motion to dismiss.
 The district court may permit limited discovery into facts about personal
jurisdiction, but if “a party needs jurisdictional discovery, that party has an
obligation to request it in a timely manner.” Barrett v. Lombardi, 239 F.3d
23, 28 (1st Cir. 2001). While a district court has discretion to deny
jurisdictional discovery, “a diligent plaintiff who sues an out-of-state
[defendant] and who makes out a colorable case for the existence of in
personam jurisdiction may well be entitled to a modicum of jurisdictional
discovery if the [defendant] interposes a jurisdictional defense.” Sunview
Condo. Ass'n v. Flexel Int'l, 116 F.3d 962, 964 (1st Cir. 1997).

2. Waiving Objection to Lack of Personal

Jurisdiction
a. Intentional Waiver
i. Pre-Dispute Forum Selection Clauses
Parties can consent to personal jurisdiction through forum selection
clauses in pre-dispute contracts. See Nat'l Equip. Rental, Ltd. v. Szukhent,
375 U.S. 311, 315–16 (1964). A party seeking to avoid enforcement of a
forum selection clause must prove that it is unenforceable. To do so, it must
prove one of three things.
First, that the clause was not reasonably communicated to the party. See
Effron v. Sun Line Cruises, Inc., 67 F.3d 7, 9 (2d Cir.1995). Second, that the
forum selection clause “was obtained through fraud or overreaching.” Jones
v. Weibrecht, 901 F.2d 17, 18 (2d Cir. 1990) (citing The Bremen v. Zapata
Off-Shore Co., 407 U.S. 1, 15 (1972)). Finally, the party can show that
enforcement of the clause clearly “would be unreasonable and unjust,”
Jones, 901 F.2d at 18. See, e.g., Carnival Cruise Lines, Inc. v. Shute, 499
U.S. 585 (1991) (enforcing forum selection clause printed in fine print on
the back of a cruise line ticket because plaintiff did not carry a “heavy
burden” of showing enforcement would inflict “unreasonable hardship” on
her).

ii. Post-Filing Deliberate Inaction

A party can intentionally or inadvertently waive an objection to personal
jurisdiction in three ways. First, party who fails to properly raise an
objection to personal jurisdiction as required by Rule 12 waives the
objection, whether intentional or not. Second, sometimes counsel will
realize that, although its client has an objection to personal jurisdiction, the
suit is pending in a reasonably convenient forum and so, after consulting
with the client, they decide not to object to personal jurisdiction. A party
who appears in a suit without raising an objection to personal jurisdiction is
often said to have filed a “general appearance,” not a “special appearance.”
A general appearance waives objection to personal jurisdiction.

iii. Filing of Suit

The third form of intentional waiver occurs by filing a suit: a plaintiff
waives any personal jurisdiction objection to any compulsory counterclaim.
Competitive Tech. Inc. v. Fujitsu Ltd., 286 F. Supp. 2d 1118, 1141–42 (N.D.
Cal. 2003) (collecting cases).

b. Inadvertent Waiver: Pleading an Objection to

Personal
Jurisdiction in an Answer is not Enough
Pleading an objection to personal jurisdiction is not enough to preserve
the objection. “[P]ersonal jurisdiction may also be waived, even if a
defendant has nominally preserved the defense by reciting it in an answer, if
that defendant participates in the litigation without actively pursuing its
Rule 12(b)(2) defense.” Matthews v. Brookstone Stores, Inc., 431 F. Supp.
2d 1219, 1223 (S.D. Ala. 2006) (collecting cases). The party must in
addition promptly file a Rule 12(b)(2) motion to dismiss. While there is no
set time limit on how long is too long, or how much participation is too
much, a defendant waives the defense if it engages in substantial litigation
activities unrelated to the personal jurisdiction challenge. Cases provide
some meaning to this rule.
For example, a defendant who litigates a case for two years by engaging
in discovery and other motion practice unrelated to the personal jurisdiction
defense probably waives the objection. Hamilton v. Atlas Turner, Inc., 197
F.3d 58, 62 (2d Cir. 1999); see Laborers' Welfare Fund v. Lowery, 924 F.2d
731, 733 (7th Cir. 1991) (six years' participation waived defense). A
defendant who then sued the plaintiff in a separate suit in the state allegedly
lacking ties to the defendant or the dispute waives personal jurisdiction.
Gen'l Contracting & Trading Co., L.L.C. v. Interpole, Inc., 940 F.2d 20, 23
(1st Cir. 1991). Likewise, a defendant who files a motion for summary
judgment before seeking adjudication of the personal jurisdiction defense
waives the defense. Bel-Ray Co. v. Chemrite Ltd., 181 F.3d 435, 444 (3d
Cir. 1999).
On the other end of the spectrum, merely including a counterclaim in the
answer that also included the personal jurisdiction objection does not waive
the defense. Rates Technology Inc. v. Nortel Networks Corp., 399 F.3d 1302
(Fed. Cir. 2005) (filing a permissive or compulsory counterclaim does not
waive personal jurisdiction objection contained in that pleading).
On a related note, if a defendant fails to reasonably participate in
discovery into personal jurisdiction, a court as a sanction may hold that the
defendant waived even a properly preserved objection to personal
jurisdiction. Ins. Corp. of Ireland v. Compagnie des Bauxites de Guinee,
456 U.S. 694 (1982).

B. The Impact of Adjudication of the

Motion
If a court concludes that it lacks personal jurisdiction, it may either
dismiss the claim without prejudice, see Rule 41(b), or transfer the claim to
a state where personal jurisdiction is proper. See Goldlawr, Inc. v. Heiman,
369 U.S. 463, 466 (1962) (if personal jurisdiction is lacking courts have
authority to transfer a case to another district if the interests of justice so
dictate). Often, a court will give the defendant the choice of dismissing —
which means the decision can be appealed — or transferring the case and
moving forward with the suit in another state, an order which is not
appealable.

C. Not Appearing and Later Collaterally

Attacking the Judgment
A defendant can choose not to appear even if it has a proper objection to
personal jurisdiction. By failing to appear, the plaintiff will be able to obtain
a default judgment. See Chapter 44. A judgment is entitled generally to “full
faith and credit” — meaning that it generally has to be honored by the
courts of other states. To avoid enforcement of the out-of-state judgment in
its home state, the defendant must “collaterally attack” the judgment and
show the court which entered the judgment lacked jurisdiction to do so.
 Checkpoints

Can you distinguish facial and factual attacks?

Can you identify how objections to personal jurisdiction can be waived, either pre- or post-suit?
If a claim is dismissed for lack of personal jurisdiction, does that mean the claim cannot be re-filed in
a court that has personal jurisdiction?
Chapter 32

Rule 12(b)(3) Challenges

to Improper Venue

Rule 12(b)(3) Roadmap

This chapter describes the two ways that an objection to improper venue can be raised and
the two types of objections, facial and factual.
This chapter also explains how an objection to venue can be waived, either intentionally
prior to filing suit or after suit is filed through design or neglect.

A. Objections to Improper Venue Must

Be Made
Promptly or Are Waived
1. Inadvertent Waiver
a. Failing to Timely File a Pre-answer Motion to
Dismiss
for Improper Venue
As with personal jurisdiction, a party who has a Rule 11 basis to contend
that venue is improper — under Section 1391 or the rare federal claim-
specific venue statute — must act properly and promptly or the objection is
waived. Most likely because it affects the parties more than the federal
court system, objection to venue is “a privilege personal to each defendant,
which can be waived, and is waived . . . unless timely objection is
interposed.” Concession Consultants, Inc. v. Mirisch, 355 F.2d 369, 371 n. 1
(2d Cir. 1966).
As with personal jurisdiction there are three ways to raise an objection to
venue. A party must object to improper venue either (a) in its Rule 12 pre-
answer motion; (b) in a pleading (typically, the defendant's answer); or (c)
an amendment to that pleading made as of right thereof. FRCP 12(g)(h). See
Chapter 36.
A federal statute, 28 U.S.C. § 1406(a), authorizes district courts to
dismiss or transfer cases that filed “in the wrong division or district.”
Courts view Section 1406(a) as dependent on Rule 12(b)(3). That is, the
Rule's approach to waiver controls. Consequently, once waived in terms of
Rule 12(b)(3), venue is “proper” — no matter what — and so “the benefits
of a § 1406(a) transfer for lack of venue are no longer available.” Orb
Factory Ltd. v. Design Science Toys, Ltd., 6 F. Supp. 2d 203, 207 (S.D.N.Y.
1998).

b. Including the Objection to Venue in a

Pleading but
Participating in Litigation Before Moving to
Dismiss
A party who files a Rule 12(b)(3) motion has preserved its objection to
improper venue. However, a party who chooses to include the objection, not
in its pre-answer motion but in its answer must promptly follow-up by
filing a motion to dismiss for improper venue. Even if an objection to venue
is included in the answer, active participation in the suit can waive the
venue objection. See Sagent Technology, Inc. v. Micros Sys., Inc., 276 F.
Supp. 2d 464, 471(D. Md. 2003) (finding no waiver where objecting party's
post-answer conduct was minimal).

2. Intentional Waiver
a. Post-Suit Deliberate Choice to Waive
Objection
As with personal jurisdiction, counsel for a party may decide after
consultation with its client to forego an objection to improper venue. The
district may be as convenient as any district with proper venue, or
countervailing considerations — the judge's prior rulings on the legal
questions involved or her general reputation as being “pro-defendant,” the
likely jury pool compared to proper venues, and so on — may suggest that
any objection be intentionally waived.
The fact that lawyers often fight over whether a case will be tried in
Houston, or 45 miles away in Galveston, ought to indicate to you that
variations in juries and judges can be critically important. See, e.g., Smith v.
Colonial Penn Ins. Co., 943 F. Supp. 782 (S.D. Tex. 1996) (denying motion
for inter-divisional transfer from Galveston to Houston).

b. Pre-Dispute Forum Selection Clauses

i. Raising a Venue Objection Based on a Forum Selection
Clause
It is increasingly common for parties in contracts to insist that disputes be
litigated in certain locations. Sometimes these “forum selection” clauses
specify merely the state where any suit arising out of the contract must be
filed, while others specify the city, county (and, sometimes, specific court)
where any suit must be filed. If a claim governed by a clause is not filed in
the forum the clause specifies, then the other party may raise improper
venue.
The fact that a claim is filed in a district contrary to a forum selection
clause in an agreement between the parties does not mean venue is
improper. Instead, as explained in Chapter 40, a motion to transfer venue to
a more convenient district may be available.
The disagreement raises important issues for when an objection to venue
must be raised. See Chapter 36. The issue is discussed more fully in that
chapter and is often discussed in the casebooks.

ii. Adjudicating Validity of Forum Selection Clauses

Pre-dispute forum selection clauses are presumptively valid. M/S Bremen
v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972). Even if a forum selection
clause is properly raised as a basis to dismiss for improper venue, a court
can refuse to enforce the forum selection clause when doing so would be
clearly “unreasonable and unjust, or the clause is invalid for such reasons as
fraud or overreaching.” Id. Courts generally find that a clause is invalid
only if the party seeking to avoid it establishes: (1) incorporation of the
forum selection clause itself into the contract was the result of fraud, undue
influence, or overwhelming bargaining power; (2) the forum selected is
gravely difficult and so inconvenient that it will deprive the party seeking to
avoid it of its day in court; or (3) public policy prohibits its enforcement. Id.
at 12–18.

B. Procedure for Adjudicating

Objections
to Improper Venue
1. Burdens of Proof
Generally the plaintiff bears the burden to establish proper venue. Mohr
v. Margolis, Ainsworth & Kinlaw Consulting, Inc., 434 F. Supp. 2d 1051,
1058 (D. Kan. 2006). Even so, some courts put the burden on the party
challenging venue to establish its impropriety. Barton v. Florida, 2006 WL
2773238 (S.D. Ohio 2006).
A court may decide a venue issue on the pleadings alone, on affidavits
submitted by either or both parties, or after allowing discovery into the facts
relating to venue. E.g., Controlotron Corp. v. Perry Printing Corp., 1990
WL 86085 (D. N.J. 1990) (granting limited discovery into venue facts).
After all, venue often turns on where the defendant “resides” or where a
substantial part of the events giving rise to the claim occurred, both of
which can be fact-intensive issues. Pierce v. Shorty Small's of Branson, Inc.,
137 F.3d 1190, 1191 (10th Cir. 1998).
If the court decides venue on the pleadings alone, then the plaintiff must
“present only a prima facie showing of venue.” Home Ins. Co. v. Thomas
Indus., Inc., 896 F.2d 1352, 1355 (11th Cir. 1990). In all events, the court
must draw all reasonable inferences in plaintiff's favor and resolve any
factual disputes in plaintiff's favor. Pinker v. Roche Holdings, Ltd., 292 F.3d
361, 368 (3rd Cir. 2002). Facts pled by the plaintiff are taken as true unless
contradicted by the defendant. Jyachosky v. Winter, 2006 WL 1805607, *1
(D.D.C. 2006).

2. The Court Must Either Dismiss or Transfer

If Venue Is Improper
28 U.S.C. § 1406(a) provides that if a case is filed in the wrong district or
division, the court “shall dismiss, or if it be in the interest of justice,
transfer such a case to any district or division in which it could have been
brought.” (Emph. added.) Section 1406(a) was adopted to give district
courts an option other than dismissal, since venue can be improper simply
because a plaintiff failed to fully appreciate where events occurred or the
defendant resided. See Wild v. Subscription Plus, Inc., 292 F.3d 256 (7th
Cir. 2002) (discussing Section 1406(a)).
Don't confuse improper venue with convenient venue. A venue is proper
if it's authorized by a statute, the general one being Section 1391; it may be
that there's a better district for the claim to be tried, but that's not the same
thing as concluding that venue is improper. If venue is improper, the court
must either dismiss or transfer. It is within the sound discretion of the court
to dismiss or, if it is in the interests of justice to do so, to transfer to a
district where suit could have been brought. First of Michigan Corp. v.
Bramlet, 141 F.3d 260, 262 (6th Cir. 1998). A court may transfer venue
under Section 1406(a) even if it lacks personal jurisdiction over a
defendant. Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466 (1962). However, a
court should dismiss a claim filed in an improper venue unless the party
asserting it can show that “the interests of justice” require transfer. An
involuntary dismissal for improper venue will be without prejudice. See
FRCP 41(b).
A common reason for courts to transfer rather than dismiss is if the claim
has become barred by the statute of limitations. E.g., Smith v. Yale Univ.,
2006 WL 1168446 (D. Conn. Apr. 28, 2006). Thus, a plaintiff can respond
to a defendant's motion to dismiss for improper venue by pointing out that
transfer is in the interest of justice because the claim has become time-
barred. Often, a plaintiff faced with a defendant's persuasive motion to
dismiss for improper venue will respond that the court should transfer
rather than dismiss if the court finds venue is improper.

3. Where can the Court Transfer the Claim?

A claim filed in an improper venue can only be transferred to a district
where the claim could have been properly filed. Thus, the proposed
transferee court must (1) have personal jurisdiction over the defendants at
the time the suit was filed (subject matter jurisdiction will be a given), and
(2) venue must be proper in that district or division. Put the other way, a
claim cannot be transferred to a district without personal jurisdiction or in
which venue would have been improper, because that court is not one
where the claim “might have been brought” in terms of Section 1406(a).
This is true even if the defendant wants to waive its objection to personal
jurisdiction or venue.

4. What if Venue Over Some Claims is Proper?

The question of whether the court should dismiss or transfer gets much
more complex when venue is proper only some of the claims in the
complaint. There are several different paths this could take.
In Dobrick-Peirce, the court had venue over one claim, but not over two
related ones. We've seen above that some courts will invoke the doctrine of
pendent venue and allow the entire case to proceed even though venue is
improper as to some claims, so long as those claims are closely related to a
claim over which venue is proper. Again, the doctrine often applies to state
law claims which are related to a federal claim that has a statute giving
different, or broader, venue.
Suppose pendent venue isn't recognized by the court, or doesn't apply
because the claims aren't part of the same common nucleus of operative
facts. What should a court do when it has venue over one claim, but another
claim in the complaint ought to have been filed in another district or
division?
One option is to dismiss the claim over which venue is improper, and
keep the one with proper venue. This, however, could result in two suits
proceeding between the same parties on somewhat similar facts. To avoid
this, another option is to transfer the claims without venue to a proper
forum and to use Section 1404(a), if available, to transfer the other claim to
that same district. That is the option that the Dobrick-Peirce (yes, it's
spelled “Peirce”) court chose, doing so to avoid inefficiency. Other courts
have done so, too but remember that venue must be proper in the transferee
district over each claim to do this. Munoz v. England, 2006 WL 3361509,
*7 (D.D.C. 2006).
Note also that to transfer the claim over which it lacks proper venue, the
court must rely on Section 1406 and base its decision on a motion by a
party brought pursuant to Rule 12(b)(3), but to transfer the claims with
venue the court can rely on Section 1404, but must conclude that transfer is
in the interest of justice. See id.
5. No Second-Guessing by Transferee Court
Absent “impelling and unusual circumstances,” the transferee court
cannot reexamine the transferor court's conclusion that venue is proper in
the transferee court. Brinderson-Newberg Joint Venture v. Pacific Erectors,
690 F. Supp. 891, 893 (C.D. Cal. 1988).

Checkpoints

Can you list how objections to venue can be waived, either before or after suit is filed?
Can you describe how courts determine whether venue is proper?
Can you describe what a court can do if venue is improper?
Chapter 33

Rule 12(b)(4) and (5)

Challenges to Process

Rule 12(b)(4) Roadmap

This chapter explains how an objection to insufficient service must be raised.
This chapter also explains how an objection to insufficient service can be waived after suit
is filed through design or neglect.

A. The Scope of These Two Rules

Rules 12(b)(4) and 12(b)(5) are distinct but related means to challenge
defects relating to service of process. Rule 12(b)(4) permits objections to
“insufficient process” while Rule 12(b)(5) permits objections to
“insufficient service of process.” Both allow the defendant who has not
waived service of process to challenge the content of, or the manner in
which, process was served on it.
A Rule 12(b)(4) motion attacks the form of the process, not the manner
or method of service. In contrast, a motion made under Rule 12(b)(5)
challenges the mode of delivery, or lack of delivery, of process. See Wasson
v. Riverside County, 237 F.R.D. 423, 424 (C.D. Cal. 2006). As that court
explained:
Although the distinction between the Rule 12(b)(4) and 12(b)(5)
motions is easy to state, the line between them becomes blurred when
the alleged defect is that the defendant either is misnamed in the
summons or has ceased to exist. In these cases, the form of the process
could be challenged under Rule 12(b)(4) on the theory that the
summons does not properly contain the names of the parties, or a
motion under Rule 12(b)(5) could be made on the ground that the
wrong party — that is, a party not named in the summons — has been
 served.
As a result of the difficulty of distinguishing between objections under
these two Rules, “several courts have . . . treated a combination of the two
motions as proper procedure.” DakColl, Inc. v. Grand Central Graphics,
Inc., 352 F. Supp. 2d 990, 1001 n.4 (D. N.D. 2005). “The distinction
between the two insufficiencies is often blurred, and it is appropriate to
present and analyze service under both rules.” Adams v. AlliedSignal
General Aviation Avionics, 74 F.3d 882, 884 n. 2 (8th Cir. 1996).

B. Procedure to Make a Rule 12(b)(4)

or 12(b)(5) Motion
A defendant who has a Rule 11 basis to object to service must include the
objection in its Rule 12 pre-answer motion, in its answer, or in an
amendment to its answer made as of right. As with personal jurisdiction and
venue, failing to “consolidate” either a Rule 12(b)(4) or (5) objection
waives it. Rule 12(g), (h).

C. Waiver of Objection
A defendant who includes the objection in its answer must, as with the
other Rule 12 objections, act promptly by filing a motion to dismiss for
improper service, or the objection can be waived by time or substantial
participation in the litigation. Datskow v. Teledyne, Inc., Continental
Products Div., 899 F.2d 1298, 1303 (2d Cir. 1990) (by attending a
conference with the magistrate and participating in scheduling discovery
and motion practice defendant waived defense of insufficiency of process
even though it was asserted in its answer).

D. The Impact of Adjudication

If a court grants a motion to dismiss for insufficient process or service of
process, then the case is dismissed without prejudice. See FRCP 41(b). The
claims that were pled in the pleading can be refilled and properly served.
See FRCP 41(b) (“For failure of the plaintiff . . . to comply with [the FRCP]
or any order of the court, a defendant may move for dismissal of an action. .
. .”). Unless the statute of limitations has run on a claim, the plaintiff then
simply re-serves process without the defect.
 Checkpoints

Can you explain how an objection to service can be waived?

Can you describe the impact of a court's grant of a Rule 12(b)(4) or (5) motion?
Chapter 34

Rule 12(b)(6) Challenges

to Statement of a Claim by
Plaintiff and under Rule 12(c)
for Judgment on the Pleadings

Rule 12(b)(6) Roadmap

This chapter describes how to raise an objection that a pleading fails to state a claim upon
which relief can be granted.
This chapter also explains how even if the right to object in the pre-answer motion under
Rule 12(b)(6) is waived, an objection that a pleading fails to state a claim can be raised by
other rules besides Rule 12(b)(6).
This chapter also explains how Rule 12(b)(6) and those post-answer motions are
adjudicated.

Of all the Rule 12 motions, only one under Rule 12(b)(6) addresses the
merits of a claim. The other Rule 12 motions essentially raise the issue of
whether the suit has been properly filed and postured. Rule 12(b)(6) allows
a defendant to, essentially, say: “Even if every fact that the plaintiff alleges
is true, the law won't allow the plaintiff to recover anything from me.” If the
defendant is successful, then the defendant can prevail without having to go
through discovery, let alone a full trial. That is the core benefit of Rule
12(b)(6): it saves the parties and the judicial system time and resources.
Why have this? Think for a moment. If, at the very outset of a lawsuit, a
defendant can show that even if after the parties go through discovery and
hold a trial, it won't matter if the jury believes every factual allegation made
by the plaintiff, because the law does not allow a remedy. If so, why make
the defendant and the federal judicial system spend time on the claim? Why
make the public coffers pay for it? (Put in terms you'll understand later, if
after discovery and a trial the defendant would be entitled to judgment as a
matter of law, why waste time on discovery and conducting the trial?) Rule
12(b)(6) allows the parties and the courts to avoid wasting time.
Although powerful, there are limitations under Rule 12(b)(6) on what the
court can consider and how it views what it can consider. Those points first.

A. The Limitations in Rule 12(b)(6)

1. If the Court Does not Limit its Consideration to
the Allegations of the Complaint, a Rule 12(b)(6)
Motion Must be Treated as a Rule 56 Motion for
Summary Judgment
The first limitation on Rule 12(b)(6) is what the court can consider.
Under Rule 12(b)(6), the court can consider only the contents of plaintiff's
complaint. If matters outside it are presented to the court by any party and
not excluded by the court, the court must treat the motion as a motion for
summary judgment filed under Rule 56. See Rule 12(d); Chapter 52.
“Conversion” of a Rule 12(b)(6) motion into a Rule 56 motion is significant
because Rule 56 requires that the non-moving party be afforded time to
obtain discovery or affidavits to oppose the motion. Hence, if the moving
party submits to the court anything beyond the pleading, the plaintiff should
contend that the motion must be converted to one for summary judgment
and establish its right under Rule 56 for time for discovery or obtaining
affidavits. See Chapter 52.
Thus, the meaning of “the content of the complaint” can be critical. The
battle over what can be considered without converting the motion is critical
because it affects the value of the case, since conversion will delay
dismissal and buy the plaintiff time. That is why there is so much litigation
over the issue of what is “in” the complaint. The plaintiff typically will
want a narrow view, since the plaintiff's allegations may be belied by
documents not within the complaint; the defendant will want, generally, the
broad view.

a. What are the “Contents of the Complaint”?

Obviously, the “contents of the complaint” include the actual allegations
in the complaint, but also documents attached by plaintiff's counsel to the
complaint. Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2005). “A copy of a
written instrument that is an exhibit to a pleading is a part of the pleading
for all purposes.” FRCP 10(a); see Durning v. First Boston Corp., 815 F.2d
1265, 1267 (9th Cir. 1987). So, if plaintiff attaches a copy of a contract to a
complaint, the court may consider the contract without converting a Rule
12(b)(6) motion. N. Ind. Gun & Outdoor Shows, Inc. v. South Bend, 163
F.3d 449, 453–54 (7th Cir. 1998).
In some circumstances, a court may consider even documents not
attached to the complaint without converting the motion. First, a court may
consider documents incorporated by reference, In re Silicon Graphics, Inc.
Securities Litig., 183 F.3d 970 (9th Cir. 1999), or even merely referred to in
the complaint without converting the motion to a motion for summary
judgment. See Branch, 14 F.3d at 453. A complaint “refers” to a document
if it is specifically mentioned in the complaint. Id. Second, “‘when [a]
plaintiff fails to introduce a pertinent document as part of his pleading, [a]
defendant may introduce the exhibit as part of his motion attacking the
pleading,’” so long as three conditions are met. Branch v. Tunnell, 14 F.3d
449, 453 (9th Cir. 1994). A court may consider such evidence without
affording the protections of Rule 56 if: “(1) the complaint refers to the
document; (2) the document is central to the plaintiff's claim; and (3) no
party questions the authenticity of the copy attached to the 12(b)(6)
motion.” Marder, 450 F.3d at 448. Third, under some circumstances a court
may consider filings made in earlier litigation between the parties without
converting the motion. Henson v. CSC Credit Servs., 29 F.3d 280, 284 (7th
Cir. 1994).

b. What if the Court Does not Exclude, but Does

not Consider,
Matters Outside the Complaint?
Even if the document is not deemed to be a part of the complaint, Rule
12(d) provides that if “matters outside the pleadings are presented to and
not excluded by the court, the motion must be treated as one for summary
judgment under Rule 56. All parties must be given reasonable opportunity
to present all material that is pertinent to the motion.” Accordingly, a
district court has discretion to consider matters submitted with the motion,
response, or reply, even if not “part of” the complaint, but only if it converts
the motion to one for summary judgment. See Cunningham v. Rothery, 143
F.3d 546, 549 (9th Cir. 1998).
Either party may implicate conversion provision of Rule 12(d) by
submitting materials which are not “part of” the complaint in the motion
papers. Does the submission of such material, by itself, require that the
court convert a Rule 12(b)(6) motion into one for summary judgment?
There is a split on the answer to that question. Some courts have held that
the court may consider the materials without converting the motion unless
the court actually relies on the materials in deciding the motion. Alexander
v. Okla., 382 F.3d 1206, 1213 (10th Cir. 2004). Other courts hold that
consideration, alone, is sufficient to require conversion of a motion to
dismiss into a motion for summary judgment. N. Ind. Gun, 163 F.3d at 453
n. 5. Still others hold that the mere acceptance of the material requires
conversion. Dempsey v. Atchison, Topeka & Santa Fe Ry. Co., 16 F.3d 832,
835–36 (7th Cir. 1994).
The plain language of Rule 12(d) would indicate that it is the failure to
exclude the proffered materials — not reliance on or consideration of it —
that requires conversion. Max Arnold & Sons, LLC v. W.L. Hailey & Co.,
452 F.3d 494, 503 (6th Cir. 2006). But with no clear answer yet, any time a
party submits information that is not “part of” the complaint when litigating
a Rule 12(b)(6) motion, the other party should analyze whether under
controlling law the motion must be converted to one for summary
judgment. If so, then the court must give both parties notice that it is
converting the motion, and permit a “reasonable opportunity to present all
the material that is pertinent to the motion.” FRCP 12(d). It may be, for
example, that a plaintiff can postpone consideration of the motion to
conduct discovery. See FRCP 56.

2. The Plausible Facts in the Pleading are Taken as

True:
Rule 12(b)(6)'s Burden of Persuasion
The second limitation on Rule 12(b)(6) is the burden of persuasion. As
we saw in our discussion of Twombly and Iqbal, the inquiry is whether,
once the complaint is stripped of its legal conclusions and bare assertions,
the remaining factual material, taken as true, plausibly states a claim upon
which relief can be granted. This is the “so what” aspect of Rule 12(b)(6):
even if the allegations are true, the law does not afford a remedy.

a. An Example Applied to a Claim

In your torts class, you will probably learn there is no general duty to
rescue. If I am walking down the street and see you drowning, I don't have
to do a thing. If you're injured and sue me, you might allege something like
this (in addition to all the bells and whistles):

Assume that those allegations are true, but also assume that under the law
in the state where I left you stranded, there is no duty to rescue. I can avoid
a trial by relying on Rule 12(b)(6) and saying, “so what”: even if everything
you allege is true, the law affords you no relief. You have “failed to state a
claim upon which relief can be granted.”
That's a simple example, but the rule is not limited to such clear cases:
any time the law does not afford the plaintiff relief if its factual allegations
are taken as true, Rule 12(b)(6) is a powerful weapon to reduce costs and
exposure to a defendant.

b. Rule 12(b)(6) and Affirmative Defenses

Can a Rule 12(b)(6) motion be used to dismiss a claim that is subject to
an affirmative defense? Suppose, for example, that the pleading clearly
states a claim, but it is subject to the defense of statute of limitations. Can
the defendant move to dismiss under Rule 12(b)(6)? The answer is whether
the complaint can be dismissed while taking its allegations as true:
A complaint is subject to dismissal for failure to state a claim if the
allegations, taken as true, show the plaintiff is not entitled to relief. If
the allegations, for example, show that relief is barred by the
applicable statute of limitations, the complaint is subject to dismissal
for failure to state a claim; that does not make the statute of limitations
any less an affirmative defense, see Fed. Rule Civ. Proc. 8(c). Whether
a particular ground for opposing a claim may be the basis for dismissal
 for failure to state a claim depends on whether the allegations in the
complaint suffice to establish that ground, not on the nature of the
ground in the abstract. See Leveto v. Lapina, 258 F.3d 156, 161 (C.A.3
2001) (“[A] complaint may be subject to dismissal under Rule 12(b)(6)
when an affirmative defense . . . appears on its face”). See also Lopez-
Gonzalez v. Municipality of Comerio, 404 F.3d 548, 551 (C.A.1 2005)
(dismissing a complaint barred by the statute of limitations under Rule
12(b)(6)).
Jones v. Bock, 127 S. Ct. 910, 920–21 (2007). See also Eriline Co. S.A. v.
Johnson, 440 F.3d 648, 654 (4th Cir. 2006) (in rare circumstances courts
may raise limitations defense sua sponte).

B. Determining Whether the Pleading

States a Claim for Relief
There are two steps for determining whether a pleading states a claim
upon which relief can be granted: (A) determining the elements of the claim
(by looking at the substantive law that creates the claim) and then (B)
analyzing whether, stripped of legal conclusions and bare assertions, the
complaint plausibly states facts which, if taken as true, satisfies each
element of the claim. Plaintiffs must “set forth in their complaint factual
allegations, either direct or inferential, regarding each material element
necessary to sustain recovery under some actionable legal theory.”
Dartmouth Review v. Dartmouth College, 889 F.2d 13 (1st Cir. 1989).
So, for example, in a casebook case, Langadinos v. Am. Airlines, Inc.,
199 F.3d 68 (1st Cir. 2000), the district court granted a Rule 12(b)(6)
motion to dismiss the plaintiff's complaint which pled a claim under a
treaty, the Warsaw Convention, against an airline. The appellate court
reversed. To determine the elements of the claim, it analyzed the language
of the treaty, which stated that an airline was liable “for damage sustained . .
. by a passenger . . . if the accident which caused the damage . . . took place
on board the aircraft. . . .” The plaintiff had alleged that, while on an
aircraft, the flight attendants had plied alcohol to an obviously intoxicated
fellow passenger, who then assaulted the plaintiff. The court held that the
element “accident” had been interpreted “flexibly” by the courts and
included torts by other passengers so long as the airline had played a causal
role in the commission of the tort. Thus, the plaintiff alleged each element
of the tort: damage to a passenger caused by an accident that occurred on an
airplane.

C. Procedure for Making a Rule 12(b)(6)

Motion
A defendant who believes that the plaintiff has failed to state a claim
upon which relief can be granted can include the objection in its pre-answer
motion, in its answer, or an amendment or right to its answer. Rule 12(g),
(h). If the defendant includes the objection in the answer, it must promptly
move to dismiss under Rule 12(b)(6): remember that the judge doesn't ferret
out issues and do a party's job for it.

D. Responding to a Rule 12(b)(6) Motion

As noted above, the party responding to a Rule 12(b)(6) motion should
see if the movant submitted material beyond the complaint. If so, the party
may in its response to the motion either move to exclude the material, move
to have the motion converted to a Rule 56 motion and seek its protections,
or both.
Another issue critical for the non-moving party to analyze whether it can
fix any deficiency in the complaint by amending it. Suppose the plaintiff
simply forgot to include an allegation that the defendant, in its motion to
dismiss, argues is required, and the facts support making the allegation. The
plaintiff should move to amend the complaint in response to the motion to
dismiss (or amend as of right if that option is still available). While as a
matter of course district courts often grant a party leave to amend a
pleading subject to a Rule 12(b)(6) motion, they are not required to do so
sua sponte. Consequently, a party responding to a Rule 12(b)(6) motion
should seek leave to amend either during adjudication of the motion or
promptly after the order dismissing the claim is entered, but before final
judgment is entered. See Fletcher-Harlee Corp. v. Pote Concrete
Contractors, Inc., 482 F.3d 247 (3rd Cir. 2007) (“we hold that in ordinary
civil litigation it is hardly error for a district court to enter final judgment
after granting a Rule 12(b)(6) motion to dismiss when the plaintiff has not
properly requested leave to amend its complaint”).

E. It's Hard to Waive the Objection

of Failing to State a Claim
 In a somewhat awkward way, the Rules permit a party to raise the issue
of failure to state a claim at any time, up through trial, but not:
(a) after the defendant files a Rule 12 motion that does not include the
defense but before it answers; or
(b) if adjudication of the defense will delay trial.
See Rule 12(c), (h)(2). But, the following shows that at any other time a
defendant can move to dismiss a claim for failing to state a claim.

1. Rule 12(c)
a. The Window of Rule 12(c)
Technically, a Rule 12(b)(6) defense that is not raised either in the pre-
answer motion or answer (or amendment to the answer as of right) is
waived. However, Rule 12(c) lets a party do exactly the same thing as Rule
12(b)(6), by permitting the defense of failure to state a claim to be raised so
long as it does not delay trial, and so long as it is filed in or after the
defendant has filed its answer. FRCP 12(c); SEC v. Lucent, 2006 WL
2168789 (D. N.J. 2006) (refusing to treat a waived Rule 12(b)(6) motion as
a Rule 12(c) motion because defendant had not yet answered).
Thus, if it is filed within that window — after the answer is filed but
before it will delay trial — courts tend to simply re-characterize “waived”
Rule 12(b)(6) motions as motions for judgments on the pleadings under
Rule 12(c). See Trustees of the Univ. of Pennsylvania v. Mayflower Transit,
Inc., U.S. Dist. Lexis 14577 (E.D. Pa. 1997) (“although ‘a post-answer Rule
12(b) motion is untimely,’ this timing requirement has customarily been
treated as a mere technicality . . . a motion to dismiss under Rule 12(b)(6)
made after an answer has been filed may be treated, in the court's
discretion, as a Rule 12(c) motion for judgment on the pleadings.”);
Prudential Prop. & Cas. Ins. Co. v. Stump, 1994 U.S. Dist. Lexis 18072
(E.D. Pa. 1994) (“Technically, a 12(b)(6) motion filed after an answer is
untimely and the court must deny it. However, under Rule 12(h)(2), 12(b)
(6) motions are preserved from waiver . . . and . . . are then treated under
Rule 12(c) as a motion for judgment on the pleadings. . . .”).
Why? Think about it. If a defendant shows the plaintiff will not win even
if everything alleged is true, why wait until trial because even if the jury
finds the plaintiff proved everything it alleged, the defendant will prevail.
So, even if the defendant raises the motion near trial, a court can grant it. It
still saves time, just less time.
The first clause of Rule 12(c) makes it clear that a defendant cannot
make a Rule 12(c) motion before it answers. We also know that if the
defendant has already made its one Rule 12 motion, it cannot make a
second Rule 12 motion until after it answers. If a defendant were able to
make a Rule 12 motion, and then a Rule 12(c) motion before it answers, the
defendant could engage in successive Rule 12 motion practice. See SEC v.
Lucent, 2006 WL 2168789 (D. N.J. 2006). There is only one pre-answer
motion permitted.

b. The Same Standards Under Rule 12(b)(6)

Apply Under
Rule 12(c)
i. Burden of Proof
The standard for entry of judgment on the pleadings under Rule 12(c) is
the same as that for failing to state a claim under Rule 12(b)(6). Thus, in
ruling on a motion for judgment on the pleadings, a court must ignore the
legal conclusions and bare allegations of the complaint and then ask
whether the remaining material plausibly states facts which, if true, state a
claim upon which relief can be granted.

ii. Conversion to a Rule 56 Motion for Summary Judgment

The same discussion above concerning conversion of Rule 12(b)(6)
motions into motions for summary judgment when matters outside the
pleadings are presented to and not excluded by the court applies to Rule
12(c) motions. FRCP 12(d).

2. At Trial
Under Rule 12(h)(2), the objection of failure to state a claim can also be
raised in any pleading permitted or ordered or at trial on the merits. FRCP
12(h)(2). The impact of Rule 12(h)(2) in light of Rule 12(c) is to deny a
defendant the right to raise the objection where it will delay trial, but to
permit the objection to be raised at trial. This is the “window” noted above.
 F. The Impact of Adjudication
of a Rule 12(c) Motion
Typically, a court will give a party one chance to amend a pleading that
fails to state a claim upon which relief can be granted. So, for example, if
plaintiff's counsel made a mistake in not including allegations necessary to
state a claim, the court will permit the mistake to be remedied. If that
cannot be done, and if instead the court grants a motion for failure to state a
claim, then that claim is dismissed with prejudice. See FRCP 41(b). Absent
reversal on appeal, the claim is subject to the defense of res judicata and so
a party would likely violate Rule 11 by re-filing it. See Chapter 60.

Checkpoints

Can you explain when a motion under Rule 12(b)(6) must be converted into one under Rule 56, and
why that as a practical matter may be significant?
Do you see the relationship between Rule 12(b)(6)/Rule 12(c) and Twombly and Iqbal?
Can you describe how a Rule 12(b)(6) objection is made and adjudicated?
What impact does the grant of a Rule 12(b)(6) motion have? The denial of one?
How can failure to state a claim be raised even if not included in a Rule 12 motion or in the answer?
Chapter 35

Rule 12(b)(7) and

Indispensable Parties
under Rule 19
A defendant should use Rule 12(b)(7) to raise the failure to join an
indispensable party as required by Rule 19. Typically, a motion to dismiss
for failure to join an indispensable party is filed either when the plaintiff
has, for strategic reasons, failed to join a party — often in order to have
diversity — or a party that was sued by the plaintiff gets dismissed from the
case because, typically, the court lacks personal jurisdiction or subject
matter jurisdiction over claims against that party. In the former case, the
defendant will raise the objection; in the latter case, after a defendant is
dismissed from the case, the remaining defendant will move to dismiss the
case, contending that the dismissed party was indispensable. The same
standards apply in either circumstance.

A. Timing of Rule 12(b)(7) Objection

Rule 12(b)(7) objections can be raised either in the pre-answer motion or
in the answer itself or in an amendment allowed as of right. Further, the
objection that an indispensable party has not been joined can be raised in
any pleading permitted or ordered, by Rule 12(c) motion, or at trial on the
merits. FRCP 12(h)(2). Thus, as with Rule 12(b)(6), a Rule 12(b)(7) motion
can be raised at any time, except:
(a) after the defendant files a Rule 12 motion that does not include the
Rule 12(b)(7) defense but before it answers; or
(b) if adjudication of the defense will delay trial.
 B. Facial or Factual Attacks Permitted
When adjudicating a Rule 12(b)(7) motion, either party may submit
evidence to the court, which is permitted to “go outside the pleadings and
look to extrinsic evidence.” English v. Cowell, 10 F.3d 434, 437 (7th Cir.
1993). The party making a Rule 12(b)(7) motion has the burden to produce
“‘evidence showing the nature of the interest possessed by an absent party
and that the protection of that interest will be impaired by the absence,’” a
burden that “‘can be satisfied by providing “affidavits of persons having
knowledge of these interests as well as other relevant extra-pleading
evidence.”’” Sykes v. Hengel, 220 F.R.D. 593 (S.D. Iowa 2004).

C. The Impact of Adjudication

If the court grants a Rule 12(b)(7) motion, then the claim is dismissed but
without prejudice. See FRCP 41(b). Absent reversal on appeal, the claim
can be refiled, but must be refiled in another court where the indispensable
parties may be joined.
Chapter 36

Rule 12's One-Motion-

Consolidation Requirement

Rule 12's One-Motion-Consolidation

Requirement Roadmap
This chapter explains that a defendant may generally only make one pre-answer motion,
and must include in that one motion certain objections under Rule 12, or it is waived.

The preceding chapters explored each Rule 12 objection. If a defendant

intends to file a pre-answer motion to raise one objection, the defendant
must include in that motion every other objection it then has under Rule
12(e), (f), or Rule 12(b)(2) to (5), or the objection is “waived” by Rule 12's
“consolidation” requirement. The manner in which Rule 12 requires
consolidation is not simple, but it can become intuitive.

A. A Party Can Easily Waive Personal

Protections
Rule 12 generally forces a party (typically the defendant) to raise in its
first response — whether that response is a Rule 12(b) motion or an answer
— those objections that it has that will not affect whether a claim will have
to be adjudicated, but instead affect only where adjudication will occur or
how easy it will be for the defendant to litigate the claim.
What the chart below shows is that objections that do impact the court
are harder to waive, while those that largely protect a personal interest of
the defendant — personal jurisdiction, venue, defects with service of
process, and violations of the pleading rules by the plaintiff — are easier to
waive. The chart also shows that the Rule requires those defenses that are
personal to the defendant be raised early in the case, before the court spends
much time proceeding on the case.

B. The Requirement That Certain Rule

12
Objections Be Consolidated in the First
Response
or Be Deemed Waived, and the Three
Exceptions to Waiver
The essence of the “consolidation” required of Rules 12(g) and 12(h) is
that a party “who by motion invites the court to pass upon a threshold
defense should bring forward all the specified defenses [personal
jurisdiction, improper venue, insufficient process, or insufficient service] he
then has and thus allow the court to do a reasonably complete job.” FRCP
advisory committee note, 1966 Amendment. Thus, if a defendant raises any
Rule 12 objection in his first filing to the court, the defendant must raise all
objections specified in Rule 12(h). Read Rule 12(g) and (h) closely to see
why:
(g) Joining Motions.
(1) Right to Join. A motion under this rule may be joined with
any other motion allowed by this rule.
(2) Limitation on Further Motions. Except as provided in Rule
12(h)(2) or (3), a party that makes a motion under this rule must
not make another motion under this rule raising a defense or
objection that was available to the party but omitted from its
earlier motion.
(h) Waiving and Preserving Certain Defenses.
(1) When Some Are Waived. A party waives any defense listed
in Rule 12(b)(2)–(5) by:
(A) omitting it from a motion in the circumstances
described in Rule 12(g)(2); or
(B) failing to either:
(i) make it by motion under this rule; or
(ii) include it in a responsive pleading or in an
amendment allowed by Rule 15(a)(1) as a matter
of course.
(2) When to Raise Others. Failure to state a claim upon which
relief can be granted, to join a person required by Rule 19(b), or
to state a legal defense to a claim may be raised:
(A) in any pleading allowed or ordered under Rule 7(a);
(B) by a motion under Rule 12(c); or
(C) at trial.
(3) Lack of Subject Matter Jurisdiction. If the court determines
at any time that it lacks subject matter jurisdiction, the court must
dismiss the action.
(i) Hearing Before Trial. If a party so moves, any defense listed in
Rule 12(b)(1)–(7) — whether made in a pleading or by motion — and
a motion under Rule 12(c) must be heard and decided before trial
unless the court orders a deferral until trial.
FRCP 12(g), (h).
If a defendant files a pre-answer motion, then each objection in the top
row with a check mark must be included in its motion or that objection is
waived; that objection cannot be put in an answer. If, instead of filing a pre-
answer motion, the defendant files its answer, then each defense with a
check mark in the bottom row must be pled in that answer or it is waived.
There are three exceptions. First, motions under Rules 12(e) and (f)
cannot be pled in an answer. Second, motions under Rules 12(b)(6) and
12(b)(7) can effectively be made until and at trial. FRCP 12(h)(2). Finally,
third, lack of subject matter jurisdiction may be raised at any time, by any
party, or even by the court. FRCP 12(h)(3).

C. Special Issues under Rule 12

1. One, and Only One, Pre-Answer Motion
As shown above, objections to lack of subject matter jurisdiction, failure
to state a claim, and failure to join an indispensable party are not subject to
the consolidation requirement. Even with respect to Rules 12(b)(1), 12(c)
and Rule 12(b)(7), however, although the defendant can still raise these
objections if it does not include them in a pre-answer motion, it can raise
them only an answer, not in a second Rule 12 motion. As one court
explained:
At the outset, it is necessary to determine the nature of the motion
brought by defendants. None of the movants have yet filed an answer.
The motion submitted by the defendants is titled, “Motion to Dismiss
For Failure To Join A Party Under Rule 19”. The Motion argues that
MMS is a necessary or indispensable party and requests dismissal of
the complaint because of the failure of EP to join MMS. Although it is
not mentioned in either defendants motion or their memorandum in
support of the motion, defendants are apparently seeking dismissal
pursuant to Rule 12(b)(7) . . ., which lists among the defenses that may
be raised in a pre-answer motion to dismiss the failure to join a party
under Rule 19.
The Federal Rules clearly provide for a pre-answer motion to dismiss
for failure to join a party under Rule 19. However, the Rules also
govern how and when such a motion may be made. Rule 12(g)
provides that
A party who makes a motion under this rule may join with it any
other motions herein provided for and then available to the party.
If a party makes a motion under this rule but omits therefrom any
 defense or objection then available to the party which this rule
permits to be raised by motion, the party shall not thereafter make
a motion based on the defense or objection so omitted, except a
motion as provided in subdivision (h)(2) hereof on any of the
grounds there stated.
Therefore, if a party makes a Rule 12(b) motion, and does not include
an additional defense or objection that could have been joined pursuant
to Rule 12(g), that defense or objection is waived unless it is protected
by Rule 12(h)(2). The same defendants who now move to dismiss
under Rule 12(b)(7) previously filed a motion to dismiss for lack of
subject matter jurisdiction pursuant to Rule 12(b)(1). That Motion was
filed March 8, 1993, and failed to raise any defense or objection of
failure to join a party under Rule 19. Accordingly, that defense has
been waived by the Defendants, unless the defense is discussed and
preserved by Rule 12(h)(2). . . .
Rule 12(h)(2) preserves a defense based upon failure to join an
indispensable party from waiver. However, it must be asserted in a
manner consistent with that provision . . .
Defendant's second pre-answer motion to dismiss is clearly precluded
by the Federal Rules of Civil Procedure. It is the role of the Court to
apply the Rules to ensure the just, speedy, and efficient resolution of
disputes. The filing of successive pre-answer motions to dismiss serves
to frustrate these goals.
EP Operating Ltd. Partnership v. Placid Oil Co., 1994 WL 507455 (E.D.
La. 1994).

2. An Exception for Motions Under Rules 12(e) or

(f)
Read literally, the consolidation requirement applies to any motion filed
under Rule 12, including Rule 12(e) and (f). Consequently, if a party has
any other Rule 12 defense available when it files a Rule 12(e) or (f) motion,
the consolidation requirement applies. Clark v. Associates Commercial
Corp. v. Howard, 149 F.R.D. 629, 632 (D. Kan. 1993)(“the cases and
commentators are overwhelmingly of the opinion that a party who makes a
Rule 12(e) motion for a more definite statement may not thereafter assert by
motion a Rule 12(b) defense that was available at the time of the initial
motion.”); Martin v. Delaware Law School of Widener Univ., 625 F. Supp.
1288, 1296 (D. Del. 1985) (by not raising lack of personal jurisdiction,
improper venue, and insufficient service of process in motion for more
definite statement, defendant waived its right to assert those defenses in
motion to dismiss). Though there is little case law on the subject, the
consolidation requirement of Rule 12(g) also applies to motions filed under
Rule 12(f): if the defendant files a Rule 12(f) motion and fails to include an
objection that must be raised in the first response, the objection is waived.
Cima v. Wellpoint Healthcare Networks, Inc., 2007 WL 1068252 (S.D. Ill.
2007).
What if, however, the complaint is so indefinite that the defendant cannot
ascertain whether, for example, personal jurisdiction, venue, or subject
matter jurisdiction exists, and so it files a Rule 12(e) motion seeking a more
definite statement? How can the defendant include in the Rule 12(e) motion
its objection to personal jurisdiction when the basis for filing the Rule 12(e)
motion is that it can't tell whether it has an objection to personal
jurisdiction? In some circumstances, such as when a clearer pleading is
necessary for a party to understand whether it has a basis to move under
Rule 12(b), courts will not find waiver. Nat'l Union Fire Ins. Co. of
Pittsburgh, Pa. v. Aerowhawk Aviation, Inc., 259 F. Supp. 2d. 1096, 1100
(D. Idaho 2003).

3. Compelling a Party to Abide by a Pre-Dispute

Arbitration Clause
Many commercial agreements include clauses that require any dispute
arising out of the agreement be subject to binding arbitration, not litigation.
If a party files suit in violation of such a clause, how does the other party
enforce it? Specifically, must the party raise the issue under Rule 12(b)? If
so, which part of Rule 12(b) applies?
The characterization can be critical: if a motion to raise an objection
based upon an arbitration clause is, for example, one based upon improper
venue, then the objection is easy to waive; but if it is one based on lack of
subject matter jurisdiction, or failing to state a claim upon which relief can
be granted, then it is much more difficult to waive. Further, the standards of
review on appeal differ depending on which subsection of Rule 12(b) is
implicated. See Continental Cas. Co. v. Am. Nat'l Ins. Co., 417 F.3d 727
(7th Cir. 2005).
 The policies cut both ways. On the one hand, allowing arbitration to be
too easily waived would increase litigation, contrary to the parties'
agreement and public interests. See Palcko v. Airborne Express, Inc., 372
F.3d 588 (3rd Cir. 2004) (holding that, in part because of this policy,
motions to dismiss based upon arbitration provisions fell within Rule 12(b)
(6)). On the other hand, holding that a motion to compel arbitration can
effectively never be waived would allow a party to participate in litigation,
but then move to dismiss and compel arbitration if the litigation was not
going its way.
Because arbitration agreements are increasingly common and arbitration
is perceived by many to be pro-defendant, plaintiffs will often file suit
rather than seek arbitration. Defense counsel must therefore be diligent to
examine any agreement relating to a claim for an arbitration clause and to
avoid waiving the client's right to compel arbitration.

D. The Court Can Grant, Deny,

or Carry a Rule 12 Motion With the
Case
A court faced with a Rule 12 motion has three options: (1) grant it; (2)
deny it; or (3) postpone its decision by carrying the motion along with the
case until trial. Rule 12(i). A fourth option — converting a Rule 12(b)(6) or
Rule 12(c) motion into one for summary judgment — arises where that
motion refers to matters not part of the pleadings.

1. Impact of Granting a Rule 12 Motion

The impact of a court's grant of each of the Rule 12 motions is discussed
in the chapter on that specific motion, above. This chart summarizes them:
2. Impact of Denial of a Rule 12 Motion
The denial of the motion means the case moves on, and the defendant
must next file an answer. Again, sequential motions under Rule 12 are not
permitted. While a defendant may be able to include certain Rule 12
defenses in its answer that it did not include in its motion, it cannot file
another Rule 12 motion — even one that was not required to be
“consolidated” — but must answer and include in the answer any Rule 12
defenses that it has that were not waived.

3. Carrying the Motion with the Case

Courts will carry Rule 12 motions along until trial where, for example,
the merits of the motion are intertwined with the merits of a claim and so
the motion cannot be decided without adjudicating the claim itself. Roberts
v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987). For example, if the
court determines that a jurisdictional question and the merits of a claim are
inextricably intertwined, it may not resolve genuinely disputed facts on a
Rule 12(b)(1) motion but must wait until trial to resolve the jurisdictional
issue, unless “the material jurisdictional facts are not in dispute and the
moving party is entitled to prevail as a matter of law.” Id.

E. Should a Party with the Choice File

an Answer
 or a Rule 12 Motion?
If a party has a Rule 12 defense that need not be pled only in a pre-
answer motion, the defendant must determine whether to file a pre-answer
motion or include its Rule 12(b) defenses in its answer. Which one to pick
turns on several factors, including those summarized on this chart:

F. Filing a Rule 56 Motion Should Not

Postpone the Answer Date
It is unclear whether the filing of only a motion for summary judgment is
an option. On the one hand, Rule 12(a)(4) literally requires either the filing
of a Rule 12 motion or an answer. On the other hand, Rule 56 expressly
permits the filing of a motion for summary judgment by a defending party
at any time.
There is no clear answer to whether the filing of a motion for summary
judgment postpones the filing of an answer. Compare Ricke v. Armco, Inc.,
158 F.R.D. 149 (D. Minn. 1994) (a motion for summary judgment that was
not a Rule 12(b)(6) motion should not postpone the requirement of filing an
answer) with Rashidi v. Albright, 818 F. Supp. 1354, 1356 (D. Nev. 1993)
(reasoning that since a converted Rule 12(b)(6) motion postpones the need
to file an answer, so too does the filing of a Rule 56 motion, but noting
contrary authority). On a related note, it is clear that if a party files a Rule
12(b)(6) motion that the court “converts” into a Rule 56 motion for
summary judgment, the motion is still treated as a Rule 12 motion for
purposes of determining whether and if so when the party must file its
answer.

Checkpoints

Can you identify those Rule 12 defenses that are “easy” to waive, and those that are more difficult to
waive, and explain why they are treated differently?
Can you list those Rule 12 defenses that may only be raised in a pre-answer motion? That must be
raised in the first response? That may be raised in an answer even after a Rule 12 motion? That may,
in substance at least, be raised even if not included in the answer?
Chapter 37

The Defendant's Answer

Answer Roadmap
This chapter identifies the steps that defense counsel must follow to answer a complaint.
This chapter also describes when a “denial” of an allegation is insufficient to put a plaintiff
on notice that the defendant intends to raise an “affirmative defense.”

As we've seen, soon after service of a complaint the defendant must

either file a Rule 12 motion or answer. Earlier chapters examined Rule 12
motions. Unless the Rule 12 motion is granted and results in dismissal of
every claim, the defendant must next answer, even if it prevails on its Rule
12 pre-answer motion. This chapter examines the answer.

A. Defense Counsel Must

Investigate the Facts and Law
In its answer, the defendant must (a) admit or deny each allegation of a
complaint; (b) plead every “affirmative defense” to plaintiff's claims; and
(c) plead any counterclaim against the plaintiff. In addition, the defendant
may need to implead or otherwise join non-parties. As a result, Rule 11 and
competent lawyering require that defense counsel investigate both the facts
and law before filing an answer. Satisfying that duty may require nothing
more than speaking with the defendant and conducting, if any, only
rudimentary legal research. In more complex cases, investigation may
require a lot of time and money. The expense of an answer is, you will
recall, one reason to file a Rule 12 motion if a grounds for doing so is
available.

B. Defense Counsel Must

Address Each Allegation in the
 Complaint
The defendant is generally required to admit, deny, or state that it is
without sufficient information to form a belief as to the truth of each
allegation in a complaint. FRCP 8(b). A defendant may not deny an
allegation, or state that it lacks sufficient information to admit or deny it,
without making a reasonable investigation. See FRCP 11(b)(4). An
allegation that is not denied is admitted, but if the defendant states that it
lacks sufficient information to admit or deny a specific allegation, that
allegation is deemed denied. FRCP 8(b)(5). So a defendant's answer might
look in part like this:

The defendant is required both to “fairly respond to the substance of an

allegation” and, if it intends to “deny only part of an allegation” it must
“admit the part that is true and deny the rest.” FRCP 8(b)(2) and (3). In
Zielinski v. Philadelphia Piers, Inc., 139 F. Supp. 408 (E.D. Pa. 1956), the
plaintiff had alleged that the defendant “owned, operated and controlled” a
forklift that had injured the plaintiff. In fact, the defendant owned the
forklift, but had leased it to another party. The defendant in its answer
denied the allegation. After limitations ran against the party that had been in
control of the forklift that day, the defendant moved to dismiss the claim
because it did not control or operate the forklift, and so could not be liable
under a negligence theory. The court held that the defendant had not fairly
met the substance of the allegation; the defendant should have admitted that
it owned it, but denied that it controlled or operated the forklift on the day
in question.

C. The Answer Must Plead

Every Affirmative Defense
Rule 8(c) provides in pertinent part:
In responding to a pleading, a party must affirmatively state any
avoidance or affirmative defense, including: accord and satisfaction,
 arbitration and award, assumption of risk, contributory negligence,
discharge in bankruptcy, duress, estoppel, failure of consideration,
fraud, illegality, injury by fellow servant, laches, license, payment,
release, res judicata, statute of frauds, statute of limitations, and
waiver.
(Emph. added.) Each listed concept is an affirmative defense to some
claims. Contributory negligence, for example, generally is an affirmative
defense to a negligence claim. Fraud generally bars enforcement of a
contract induced by fraudulent misrepresentation. Whether a listed defense
can be used to defend against a specific claim turns whether under Rule 11
there is a good faith basis for asserting that it does so based upon
substantive law that creates the claim.
There are three issues we'll next consider: First, what is an affirmative
defense? Second, how much detail must be pled? Third, must a defendant
be consistent in its positions?

1. What is an “Affirmative Defense”?

Obviously, if after reasonable investigation defense counsel concludes
that the facts and law support asserting as a defense one or more of the
nineteen defenses expressly listed in Rule 8(c), the answer must include
them. It is the lead-in “catch-all” in Rule 8(c) that presents the difficulties:
when is something that is not expressly listed in Rule 8(c) nonetheless “an
avoidance or affirmative defense” that must be affirmatively pled? If
something must be pled, but is not, then the defendant will not — under the
new rules — even be allowed discovery into the matter, let alone be
permitted to introduce evidence to support that affirmative defense. But, if
it need not be pled, then pleading it will put the plaintiff on notice of facts
that the defendant may not have had to disclose. Further, the defendant may
by pleading something also undertake the burden to prove the facts
underlying the “affirmative defense,” even if it is not one.
Thus, while it is probably best to err on the side of pleading something as
an affirmative defense, there are reasons not to. Sometimes the line should
be clear: a contention that the defendant did not cause harm to the plaintiff
is not an affirmative defense, since it simply denies an element of plaintiff's
claim, and does not assume the claim is established but that is barred for a
reason which is not an element of the claim. See Ocean Atlantic Dev. Corp.
v. Willow Treat Farm L.L.C., 2002 WL 485387 (N.D. Ill. 2002).
 But the line between a denial and an affirmative defense is not always
clear. As one court explained:
the test applied is whether the defendant intends to rest his defense
upon some fact not included in the allegations necessary to support the
plaintiff's case. A general denial places in issue all of the material
allegations contained in plaintiff's petition necessary to support his
claim and the defendant is entitled to prove any fact which tends to
show plaintiff's cause of action never had any legal existence. On the
other hand, if the defendant has a defense in the nature of a confession
of the facts of the plaintiff's petition but avers that the plaintiff's theory
of liability even though sustained by the evidence does not apply to it
because of additional facts which place defendant in a position to
avoid any legal responsibility for its action, then such defense must be
set forth in his answer.
Layman v. Southwestern Bell Tel. Co., 554 S.W.2d 477 (Mo. Ct. App.
1977). Put another way, whether a particular matter is an “affirmative
defense” under the catchall in Rule 8(c) turns on whether denial of the
allegation by itself will put the plaintiff on notice of the facts underlying the
defendant's position. So, for example, in Layman the plaintiff brought a
trespass claim against the telephone company for digging a trench on her
land, and at trial the defendant sought to show that it had received an
easement from a predecessor in interest to plaintiff's title. The court held
that an easement was an affirmative defense, and should have been pled:
the right of defendant to enter upon the land to which plaintiff has
indisputable possessory right would have to be proven by some
competent evidence which would give that right to defendant. This
would not be in derogation of plaintiff's claim by way of showing that
her claim was nonexistent but rather that despite her claim, the
defendant had a positive right to enter and disturb the possessory rights
of the plaintiff. Thus it is the obligation of a defendant in an action for
trespass to affirmatively plead and prove matters in justification.
Layman, 554 S.W.2d at 480.
For these reasons, in response to a complaint, the defendant must plead
not only each affirmative defenses in Rule 8(c) that it has a Rule 11 basis to
plead, but also any which a court has or likely will conclude is covered by
the catchall. For example, even though it is not listed, the plaintiff's failure
to mitigate damages is nearly universally viewed as an affirmative defense
that must be pled. See Minn. Supply Co. v. Raymond Corp., 2003 WL
21303188 (D. MN. 2003) (collecting cases). See also LaFont v. Decker-
Angel, 1999 U.S. App. LEXIS 8336 (10th Cir. 1999) (holding that the
contention that a check the defendant had given to the plaintiff had been a
“gift” was an affirmative defense to a claim that the defendant had
committed fraud and conversion by using the check for the defendant's own
purposes when it was in fact payment for the plaintiff's portion of land the
two were to buy).
Finally, one important note: courts have observed that some of the
“defenses” in Rule 12, such as Rule 12(b)(6), are not properly pled as
affirmative defenses under Rule 8(c) because they do not raise matters
outside the scope of the plaintiff's claim. Ocean Atlantic Dev. Corp. v.
Willow Treat Farm L.L.C., 2002 WL 485387 (N.D. Ill. 2002) (noting that
simply asserting “this fails to state a claim” is insufficient under Rule 8).
Even so, it is common for defendants to unnecessarily plead the “defense”
of “failure to state a claim upon which relief can be granted.”

2. How Much Detail About the Affirmative

Defense
Must be Pled in the Answer?
Courts split on the second issue — how much detail must be pled. Rule
8(c) requires that affirmative defenses be stated “affirmatively.” Defendants
typically do so by including a section after the admissions and denials of
each paragraph of the answer that continues the sequential numbering of
paragraphs and gives notice of any affirmative defenses. Typically, these
affirmative defenses will state in a conclusory manner, for example,
“Plaintiff's claim is barred by the statute of limitations.”
But the courts are splitting on whether Iqbal and Twombly apply to
affirmative defenses. Perhaps a majority of district courts hold that they do
not, and so conclusory pleading of an affirmative defense is sufficient. But
other courts disagree, and require that the Iqbal/Twombly approach applies
to affirmative defenses, and so plausible facts must be pled. As a result,
plaintiff's counsel should review the law and determine whether to move to
strike an affirmative defense as insufficient.
3. May the Defendant Be Inconsistent in its
Positions?
A party may plead inconsistent defenses. Rule 8(d)(2) provides:
A party may set out 2 or more statements of a claim or defense
alternatively or hypothetically, either in a single count or defense or in
separate ones. If a party makes alternative statements, the pleading is
sufficient if any one of them is sufficient.
In addition, a party “may state as on any separate claims or defenses as it
has, regardless of consistency.” FRCP 8(d)(3). A defendant may, for
example, plead that there was no consideration for the contract; but if there
was, it did not breach the contract; but if it did, the plaintiff's claim is barred
by the statute of limitations; but if it's not . . .

4. An Example of Pleading Affirmative Defenses

in Pre-Iqbal/Twombly Fashion

D. Defense Counsel Must

Plead Any Rule 12(b) Objections
To the extent that the facts and law allow them and they have not been
waived by failure to include them in the defendant's pre-answer motion, the
defendant may plead every Rule 12(b) defense in its answer. Again,
however, Rule 12(e) or (f) objections cannot be in answers but must be
raised by motion and, again, only one pre-answer motion is permitted.

E. Defense Counsel Must

Analyze Joinder of Claims and Parties
 For defense counsel, the time to analyze joinder of claims and parties is
early in the case, and principally at the time of filing the answer. There are
several issues to consider. Of special concern is whether the defendant has a
compulsory counterclaim that it must raise against the plaintiff. A defendant
who has a counterclaim arising out of the transaction or occurrence that is
the subject of the plaintiff's claim against it must assert that claim if it exists
at the time the defendant serves its answer, unless it falls into the exceptions
listed in Rule 13(a). FRCP 13(a). Likewise, the defendant may assert any
other counterclaim it then has. FRCP 13(b). In addition, if the plaintiff has
joined another defendant, the defendant may have a crossclaim to assert
against a co-defendant. FRCP 13(g). In addition, with respect to both
counter- and crossclaims, the defendant may need or want to join additional
parties to the cross- or counterclaim. FRCP 13(h). Finally, a defendant may
need to examine whether it can or must “implead” any third-party
defendants under Rule 14(a). See Chapter 17.

F. Defense Counsel Must Determine if a

Jury
Trial is Available and Desired
If the plaintiff has demanded a jury on any claim, the defendant can rely
on that demand for that claim and need not make its own demand. FRCP
38(d), 39(a). If the plaintiff has not done so, the defendant must consider
whether to demand a jury. See Chapter 54. In addition, if the defendant
asserts a counterclaim, it may need to demand a jury trial on that
counterclaim even if the plaintiff has demanded a jury on its claim. See id.

G. Defense Counsel Must

Timely File and Serve the Answer
A defendant must serve and file the answer within the time allowed by
Rule 12(a)(2). In doing so, the defendant must include a “certificate of
service” at the end of the answer indicating how defense counsel served the
pleading on all other parties. FRCP 5(d), (e).

Checkpoints

Can you describe the steps that defense counsel must take in responding to receipt of a complaint?
Can you describe the two circumstances when something is an “affirmative defense”?
Can you describe when denial of an averment will be insufficient to allow a defendant to put in
evidence of an “affirmative defense”?
Chapter 38

Rule 11's Reach and Special

Procedures

Rule 11's Reach Roadmap

This chapter explains how Rule 11 applies to pleadings and all other papers filed with the
court except discovery.
This chapter also explains how a party, or the court on its own, can raise violations of Rule
11.
Finally, this chapter explains under what circumstances, and if so, what type of sanctions a
court may impose for a violation of Rule 11, and who those sanctions may be imposed upon.

A. Rule 11 Reaches all Papers, but not

Discovery
Rule 11 applies to every “pleading, written motion, and other paper” filed
with the district court, from the filing of the complaint until after the filing
of the notice of appeal, except for discovery and motions related to
discovery. FRCP 11(a); see FRCP 11(d). Thus, all pleadings and motions
filed with the court, except those related to discovery, must comply with
Rule 11. See Chapter 51. (Rule 11 even applies to Rule 11 motions
themselves, resulting in the Kafka-esque filing of a Rule 11 motion for
sanctions against a party for filing a Rule 11 motion for sanctions.) Though
Rule 11 is broad and clearly applies to pleadings such as answer and to
written motions under Rule 12 or Rule 56, Rule 11 has built-in limitations.
First, Rule 11 does not apply to oral statements as such, since it applies
only to signed written documents filed with the court. However, Rule does
apply to “later advocating” arguments included in written papers, and so
Rule 11 does apply to some oral statements, but only those that flow
directly from a document filed with the court. See O'Brien v. Alexander,
101 F.3d 1479, 1489 (2d Cir. 1996). Thus, arguing in open court that certain
evidence is not admissible cannot violate Rule 11, unless the argument that
the evidence was inadmissible was previously made in a document filed
with the court. The “later advocating” prohibition is discussed more fully
below. It is best thought of as an exception to the general rule that Rule 11
only applies to written documents filed with the court, and not to oral
argument generally.
Second, Rule 11 does not apply to documents that are not actually filed
with a district court. Thus, it does not apply to documents that had been
filed in state court in a case removed to federal court. However, Rule 11
applies to papers filed in federal court to facilitate removal and applies to
those filed after removal, and so it applies to the notice of removal itself,
both because it is filed in federal court and the removal statute expressly
says it is subject to Rule 11. 28 U.S.C. § 1446; see Chapter 10. However, if
a party “later advocates” in federal court a statement or position that was
taken in state court, then Rule 11 can be violated. Brown v. Capitol Air, Inc.,
797 F.2d 106, 108 (2d Cir. 1986).
Third, it does not apply to any aspect of discovery or initial disclosures.
FRCP 11(d) (“This rule does not apply to disclosures and discovery
requests, responses, objections, and motions under Rules 26 through 37.”).
Thus, even a motion to compel cannot violate Rule 11.
But Rule 11 covers all other papers filed with a district court. In addition,
Rule 11 may cover letters to the court even though often they are not
“filed.” See Legault v. Zambarano, 105 F.3d. 24, 28 (1st Cir. 1997) (letter to
the court is subject to Rule 11 only if letter is a “motion in disguise”).
Finally, Rule 11 applies to a notice of appeal, since it is filed in the district
court, but it does not apply to appellate filings; Federal Rule of Appellate
Procedure 38 does. See In re 60 East 80th St. Equities, Inc., 218 F.3d 109,
118–19 n. 3 (2d Cir. 2000); Becker v. Montgomery, 532 U.S. 757 (2001).
See Chapter 58 for a discussion of appeals.

B. The Reach of Rule 11 Beyond “Filing”

or
“Submitting” a Paper to “Later
Advocating”
A signature on a paper filed with a district court constitutes a
representation by the signing lawyer that the paper complies with Rule 11.
As noted in Chapter 12, Rule 11 applies a “snapshot” approach: if the paper
when filed did not violate Rule 11, facts learned later cannot be used to
“create” a violation in hindsight. Put the other way, if the paper when filed
complied with Rule 11 there is no “duty to correct” the paper or to
withdraw it based upon later-learned information.
Nonetheless, information learned after a lawyer files a paper covered by
Rule 11 can limit the ability of the lawyer to later “advocate” what is in that
paper if the lawyer learns that a position or argument in that paper, if
submitted in light of the new knowledge, would now violate Rule 11.
Although a 1993 Amendment to Rule 11 abrogated the duty to withdraw or
amend a paper that the attorney or party later learns would violate Rule 11
if filed with later-gained knowledge, an attorney or party still cannot later
advocate a position that it has learned has become frivolous under current
Rule 11. This principle arises from Rule 11(b), which makes it a violation to
“later advocat[e]” a statement in a paper that later is determined to have
violated Rule 11. So for example, a defendant who includes an affirmative
defense in its answer that, it later learns, is meritless would violate Rule 11
by later advocating that defense, even though the actual filing of the answer
did not violate Rule 11.

C. Two Ways to Raise Violations of Rule

11
1. Party's Motions for Sanctions
There is a three-step process for moving for sanctions under Rule 11:
(1) Serve the motion for sanctions on the party;
(2) Wait 21 days (the so-called “safe harbor”) to give the party that
filed the paper time to withdraw it; and then
(3) If the paper is not withdrawn, file the motion for sanctions with the
court.
See FRCP 11(c)(2). (See Chapter 28 for a discussion of motion practice.)
Rule 11 effectively gives a party 21 days to withdraw a paper that violates
Rule 11.
Each step is important. Merely sending a letter to the other side pointing
out the violation is insufficient; the party must serve the motion for
sanctions, then wait the 21 days See Roth v. Green, 466 F.3d 1179 (10th Cir.
2006). Where a party moves for sanctions without giving the other side this
21-day “safe harbor” by serving the motion for sanctions before filing it,
sanctions are improper, but the party against whom sanctions are sought
must object to the lack of receiving the 21 day safe harbor after receiving
the motion, or the objection is waived. Rector v. Approved Fed. Sav. Bank,
265 F.3d 248 (4th Cir. 2001).

2. Court's Own Motion for Sanctions

The procedure that a district court must follow when imposing sanctions
sua sponte differs from that which applies to motions for sanction. Compare
FRCP 11(c)(1)(A) with FRCP 11(c)(1)(B). A court may award sanctions on
its own initiative by issuing what is called a “show cause” order: an order
describing the specific conduct that appears to violate Rule 11. FRCP 11(c)
(1)(B).

D. The Proper Sanction Under Rule 11

1. A Violation Permits but Does not Require
Imposition of any Sanction
Rule 11 permits, but does not require, a court to sanction conduct that
violates the Rule. Specifically, Rule 11(c)(1) provides that if “after notice
and a reasonable opportunity to respond, the court determines that Rule
11(b) has been violated, the court may, impose an appropriate sanction . . .”
Thus, imposition of sanctions is permissive. Perez v. Posse Comitatus, 373
F.3d 321, 325 (2d Cir. 2004) (“Even if the district court concludes that the
[paper] violates Rule 11 . . . the decision whether or not to impose sanctions
is a matter for the court's discretion.”)
Whether a court should impose sanctions turns on all the facts. The
advisory committee notes to Rule 11 give examples of factors that help
determine whether to impose sanctions:
The rule does not attempt to enumerate the factors a court should
consider in deciding whether to impose a sanction . . . ; but, for
emphasis, it does specifically note that a sanction may be nonmonetary
as well as monetary. Whether the improper conduct was willful, or
negligent; whether it was part of a pattern of activity, or an isolated
 event; whether it infected the entire pleading, or only one particular
count or defense; whether the person has engaged in similar conduct in
other litigation; whether it was intended to injure; what effect it had on
the litigation process in time or expense; whether the responsible
person is trained in the law; what amount given the financial resources
of the responsible person, is needed to deter that person from repetition
in the same case; what amount is needed to deter similar activity by
other litigants; all of these may in a particular case be proper
considerations. The court has significant discretion in determining
what sanctions, if any, should be imposed for a violation, subject to the
principle that the sanctions should not be more severe than reasonably
necessary to deter repetition of the conduct by the offending person or
comparable conduct by similarly situated persons.
FRCP 11, Advisory Committee Note.

2. Who Can the Court Sanction?

Rule 11(c)(1) allows a court to “impose an appropriate sanction on any
attorney, law firm, or party that violated the rule or is responsible for the
violation.” Thus, the court may sanction only the person who violated Rule
11 or who is responsible for a violation. In that regard, Rule 11 allows the
party itself to be sanctioned even though the party's lawyer, not the party,
signed the paper that violated the Rule. See Souran v. Travelers Ins. Co.,
982 F.2d 1497, 1508 n. 14 (11th Cir. 1993) (“Even though it is the attorney
whose signature violates the rule, it may be appropriate . . . to impose a
sanction on the client.”).
In contrast, sometimes only the lawyer, not the party, may be sanctioned.
Specifically, only the lawyer may be sanctioned if the basis for the sanction
is that the paper was legally frivolous. See, e.g., Schrag v. Simpson, 141
F.3d 1185 (10th Cir. 1998) (unpublished decision) (stating “such legal
matters as the frivolousness of a claim . . . which are peculiarly [within] the
province of lawyers, would not, without specific findings implicating
knowing participation, support Rule 11 sanctions against a party”). Put the
other way, Rule 11 requires sanctioning the attorney, not the party, when the
conduct involves a representation regarding the legal sufficiency of a claim
or position. See FRCP 11(c)(5)(A).
On the other hand, in some circumstances, sanctions only against the
client are permissible. For example, sanctions can be levied against only a
party if that party misrepresents facts, or when it is clear that the client is
the “mastermind” behind a frivolous case. See, e.g., Pelletier, 921 F.2d
1465 (discussing client's scheme to institute frivolous litigation to extort
settlement and noting that the client was skilled in the law). Likewise, if the
client is responsible for a violation, the client may be sanctioned without
also sanctioning its attorney. Moore v. Western Surety Co., 140 F.R.D. 340,
345 (N.D. Miss. 1991), aff'd, 977 F.2d 578 (5th Cir. 1992).
Apart from those exceptions, “[w]ith any other violation, either the
attorney or the client, or both, may be sanctioned; when the attorney
reasonably relies upon the misrepresentations of a client, the client not the
attorney should be sanctioned under Rule 11.” Horizon Unlimited, Inc. v.
Richard Silva & SNA, Inc., 1999 WL 675469 (E.D. Pa. 1999).

3. Determining the “Appropriate” Sanction

If the court decides to impose sanctions, then it must exercise its
discretion to determine which available sanction is “appropriate.” FRCP
11(c)(1). Rule 11 limits the sanction to that which “suffices to deter
repetition of the conduct or comparable conduct by others similarly
situated.” FRCP 11(c)(4). Thus, sanctions are limited to those necessary to
deter similar conduct. In that regard, “The court has significant discretion in
determining what sanctions, if any, should be imposed for a violation,
subject to the principle that the sanctions should not be more severe than
reasonably necessary to deter repetition of the conduct by the offending
person or comparable conduct by similarly situated persons.” Fed.R.Civ.P.
11, Advisory Committee Note.
In addition, Rule 11 has two other limitations. First, as noted above,
monetary sanctions may not be imposed against a party (as compared to the
lawyer for the party) for violating Rule 11(b)(2). FRCP 11(c)(5)(A). This
makes sense, since Rule 11(b)(2) is prohibits a frivolous legal contention,
and few clients are as equipped as their lawyer to abide by that prohibition.
Second, sanctions which are imposed through the court's own initiative
under Rule 11(c)(3) cannot be awarded unless the court issues a show cause
order before the voluntary dismissal or settlement of the claims made by, or
against, the party to be sanctioned. FRCP 11(c)(5)(B). Thus, if the plaintiff
settles its claims against a defendant, and then the court issues a show cause
order for sanctions, any sanctions would be improper. As we'll see in
Chapter 44, filing the notice of voluntary dismissal terminates the power of
the court to act, and allowing a court to sanction a party after settlement
could obviously postpone or prevent settlement of litigation.

a. Monetary Sanctions
As noted above, an objective test applies in determining whether Rule
11(b) has been violated: there is no “young lawyer's defense” or “pure
heart, empty head” defense. However, courts do take into account the
subjective facts when determining the amount or kind of sanction to
impose. “Thus, the conduct of an experienced lawyer or of a lawyer who
acted in bad faith is more apt to invite assessment of a substantial penalty
than that of a less experienced or merely negligent one.” Lieb v. Topstone
Indus., Inc., 788 F.3d 151, 158 (3rd Cir. 1986).

b. Non-Monetary Sanctions, Including Dismissal

In some circumstances, a court can dismiss a complaint where the
plaintiff has violated Rule 11, or strike the defendant's answer if it has done
so. However, these are extreme sanctions and before imposing them the
court must consider:
(1) the degree of actual prejudice to the [moving party]; (2) the amount
of interference with the judicial process; (3) the culpability of the
litigant; (4) whether the court warned in advance that dismissal would
be a likely sanction for noncompliance; and (5) the efficacy of lesser
sanctions.
Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994).

E. Related Law: Sanctions Under 28

U.S.C.
§ 1927 and Inherent Power
1. Section 1927
28 U.S.C. § 1927 provides that any attorney “who so multiplies the
proceedings in any case unreasonably and vexatiously may be required by
the court to satisfy personally the excess costs, expenses, and attorneys' fees
reasonably incurred because of such conduct.” This statute “imposes an
obligation on attorneys throughout the entire litigation to avoid dilatory
tactics.” Bowler v. U.S. Immigration and Naturalization Serv., 901 F. Supp.
597, 604 (S.D.N.Y. 1995).
Rule 11 and Section 1927 are distinct sources of authority to sanction
litigants. They aim at different kinds of misconduct, differ in scope, and are
governed by different standards. Byrne v. Nezhat, 261 F.3d 1075, 1106 (11th
Cir. 2001) (explaining that Rule 11 “is aimed primarily at pleadings” and
covers both parties and attorneys while § 1927 covers “dilatory tactics
throughout the entire litigation” and covers only attorney conduct);
Chambers v. NASCO, Inc., 501 U.S. 32, 47 (1991) (noting Rule 11 permits
attorney's fees “for conduct which merely fails to meet a reasonableness
standard,” in contrast to a court's inherent powers, which require a higher
showing).
Unlike Rule 11 sanctions, which take a snapshot and focus on a particular
paper, sanctions under Section 1927 may involve any conduct that
generates needless proceedings. As a result, “Section 1927 does not apply
to initial pleadings, since it addresses only the multiplication of
proceedings. It is only possible to multiply or prolong proceedings after the
complaint is filed.” Matter of Yagman, 796 F.2d 1165, 1187 (9th Cir.),
amended, 803 F.2d 1085 (9th Cir. 1986). “The filing of a complaint may be
sanctioned pursuant to Rule 11 or a court's inherent power, but it may not
be sanctioned pursuant to § 1927.” In re Keegan Mgmt. Co., Sec. Litig., 78
F.3d 431, 435 (9th Cir. 1996).

2. Inherent Power to Sanction

Courts have a less well-defined “inherent power” to sanction even
conduct that falls outside Rule 11 or Section 1927. See Chambers v.
NASCO, Inc., 501 U.S. 32, 50, (1991) (noting that “if in the informed
discretion of the court, neither the statute nor the Rules are up to the task,
the court may safely rely on its inherent power” in imposing appropriate
sanctions).
A broad range of sanctions are authorized under inherent power,
including striking of frivolous pleadings, claims or defenses, disciplining
lawyers, punishing by contempt, and assessing attorney's fees. E.g.,
Chambers, 501 U.S. at 43–45; Martin v. Automobili Lamborghini Exclusive,
Inc., 307 F.3d 1332 (11th Cir. 2002) (dismissing complaint with prejudice);
Malautea v. Suzuki Motor Co., Ltd., 987 F.2d 1536 (11th Cir. 1993)
(striking defendant's answer and entering default judgment); State
Exchange Bank v. Hartline, 693 F.2d 1350, 1352 (11th Cir. 1982) (striking
pleadings); Telectron v. Overhead Door Corp., 116 F.R.D. 107 (S.D. Fla.
1987) (entering default judgment against defendant).

F. Sanctions Related to Discovery

This topic is covered in Chapter 51. Rule 11 does not apply to discovery.

Checkpoints

Can you describe how Rule 11 can be violated other than by filing a signed paper?
Can you describe the steps that a party who believes a paper has been filed in violation of Rule 11
can raise it with the court?
Can you describe when a court may sanction the lawyer? The client? Only one? Only the other?
Can you describe how courts determine the proper sanction?
Chapter 39

Transfer from a
Proper Venue to a More
Convenient, Proper Venue

Venue Transfer Roadmap

This chapter explains how and under what circumstances a case can be transferred from a
district even though it is a proper venue.

Earlier we learned that there are improper venues and proper ones, and
usually several districts could serve as a proper venue under the general
federal venue statute. If there are several proper venues to choose from, the
plaintiff gets to pick. If the venue is proper, then there's nothing in Section
1406 or Rule 12(b)(3) that permits a defendant change venues or to dismiss
the case: Section 1406 only applies if the venue is improper. See Kerobo v.
Southwestern Clean Fuels, Corp., 285 F.3d 531 (6th Cir. 2002) (“venue in
Michigan is not improper in this case, and the dismissal under Rule 12(b)
(3) must be reversed. . . . [W]e are left with the § 1404(a) motion.”).
However, another federal statute allows courts to transfer venue even
from a proper venue to another district that is also proper and is more
convenient for the parties, witnesses, and the judicial system. Specifically,
28 U.S.C. § 1404(a) provides: “For the convenience of parties and
witnesses, in the interest of justice, a district court may transfer any civil
action to any other district or division where it might have been brought.”
Unlike Section 1406(a) and Rule 12(b)(3), which concern dismissal or
transfer from an improper venue to a district where suit could have been
filed properly, Section 1404(a) is based on notions of convenience and
allows transfer of a case even, and only, from a proper venue to a more
convenient but still proper venue. The determination of whether to transfer
is left to the “broad discretion of the district court and determined upon
notions of convenience and fairness on a case-by-case basis.” Publicker
Indus. Inc. v. U.S., 980 F.2d 110, 117 (2d Cir. 1992).
 A. How to Analyze a Section 1404(a)
Motion to Transfer Venue
Any party may move to transfer a case to a more convenient forum.
Whether transfer is proper requires analyzing three things: (1) Venue must
be proper in the current district; (2) venue must be proper in the transferee
district and that court must have personal jurisdiction over the defendant;
and (3) the party moving to transfer bears the burden to clearly show that
the transferee district is more convenient.

1. Venue Must be Proper in the Current District

A threshold requirement under Section 1404(a) is that the party seeking
transfer must show that venue is proper in the current district. VMS/PCA
Ltd. Partnership v. PCA Partners Ltd. Partnership, 727 F. Supp. 1167, 1173
(N.D. Ill. 1989). In part, this requirement is to ensure that a party seeking to
transfer under Section 1404(a) is not attempting to transfer a case for
improper venue in a case after it had waived an objection to improper
venue. If venue is improper in the current forum, then Section 1404(a) is
not the proper vehicle to use to seek transfer; Section 1406(a) and Rule
12(b)(3) are.
As noted in Chapters 8 and 9, a court that lacks personal jurisdiction over
a defendant can rely on Section 1406(a) to transfer the case. May it also
rely on Section 1404(a) in such circumstances? The courts split, with some
courts holding that Section 1406(a) is the only vehicle, while others allow
the motion to be made under Section 1404(a). In short, the courts try to
transfer rather than dismiss if they can, so that the merits can be the focus.
Why might it matter whether a court without personal jurisdiction can
rely on Section 1404(a) but not Section 1406(a)? For one thing, under
Section 1406(a) the court should dismiss unless the plaintiff shows that the
interests of justice warrant transferring the case, while under Section
1404(a) the court cannot dismiss but must transfer, but only if the defendant
shows that it's clear that the balance of convenience is in the other forum.
Depending on which section applies, the burden of proof and issues vary.
Second, the appellate standard of review may differ, depending on precisely
how the district court rules. See Jumara v. State Farm Ins. Co., 55 F.3d 873
(3rd Cir. 1995).
 Note that most of the time the moving party will argue that the court
lacks power to transfer under Section 1404(a), since if the court lacks
personal jurisdiction its only option otherwise is to dismiss unless the
plaintiff shows under Section 1406(a) that the interests of justice necessitate
transferring the case. The defendant is usually better served by dismissal
rather than transfer since the plaintiff is more likely to lose interest in
pursuing the case, and may fail to refile the claim in a timely fashion.

2. Venue in the Proposed Transferee District Must

be
Proper and the Defendant Must be Subject to
Personal Jurisdiction in the Transferee Forum
A second requirement is that the transferee district — the place to which
transfer is sought — must be a district where the claim “could have been
brought.” Although the decision on whether to transfer is left to the district
court, the statute expressly limits the destination: the division and district
must be one where the claim “might have been brought.” In other words,
the court in the proposed destination must have personal jurisdiction
(subject matter will be a given), and venue must be proper in that district.
See Hoffman v. Blaski, 363 U.S. 335 (1960) (transferee court must have had
personal jurisdiction over defendant at time suit was commenced). Thus, a
case cannot be transferred to a court where venue is improper or personal
jurisdiction lacking. That court is not one where the claim “might have been
brought.”

3. The Party Seeking to Transfer the Case Bears

the Burden to Establish the Transferee District
is Clearly More Convenient
If the first two requirements are proven, then the question becomes
whether transfer is warranted “for the convenience of parties and witnesses
[and] in the interests of justice.” 28 U.S.C. § 1404(a). Don't think that the
court must transfer the case if the other district is more convenient. That's
wrong for two reasons: first, the district court where the case is filed has
wide discretion in deciding whether to transfer and, second, the general
federal venue statutes only require that a suit be in a proper venue. Transfer
to a convenient venue is purely for the convenience of the court, parties,
and witnesses. See D.H. Blair & Co. v. Gottdiener, 462 F.3d 95, 106 (2d
Cir. 2006). In that regard, remember that a Section 1404(a) motion
effectively concedes that venue is proper in the pertinent district, but that it
is more convenient somewhere else. Thus, a party seeking to transfer a case
is trying to override a proper selection by the plaintiff. A party seeking
transfer, as a result, bears the burden of making what some courts call a
“clear-cut showing” that transfer is in the parties and witnesses' interests.
Smart v. Goord, 21 F. Supp. 2d 309, 315 (S.D.N.Y. 1998) (collecting cases).
See Schultze v. DaimlerChrysler Corp., 2006 WL 3375373 (S.D.N.Y. Nov.
14, 2006) (explaining that defendant had burden to make a “clear and
convincing showing” that the balance of convenience favors transfer);
PKWare v. Meade, 79 F. Supp. 2d 1007, 1018 (E.D. Wis. 2000) (party
seeking transfer must show transferee forum “is a clearly more convenient
forum”).
All pertinent factors come into play in determining whether the case
should be transferred to that other district. Generally, courts consider the
convenience of witnesses as the most important factor, but look to both the
private and public concerns that could be affected by transfer. Among the
private interests that courts consider are: (1) plaintiffs' privilege of choosing
the forum; (2) defendant's preferred forum; (3) where the claim arose; (4)
convenience of the parties and their witnesses; (5) convenience of
witnesses, but only to the extent that witnesses may be unavailable for trial
in one of the fora; (6) ease of access to sources of proof, such as documents
and other tangible evidence; (7) applicability of each forum's law; (8) each
party's ability to enforce a judgment; (9) comparative costs of each party to
litigating in each forum; and (10) other pertinent facts. Among the public
interest factors courts consider are: (1) the transferee court's familiarity with
the law governing the claim; (2) the relative congestion between the
transferor and potential transferee courts; and (3) whether there is a local
interest in deciding local controversies near where they occurred.
Because of the fact-bound nature of Section 1404(a) motions, parties
often will submit affidavits establishing, for example, who likely witnesses
will be and where they reside; statistics showing that the case will be more
quickly tried in one forum or the other; where the incident occurred; that
the matter is one peculiar to one state's law or the other; where the bulk of
the pertinent documentary evidence is stored; and so on. None of these
factors “controls,” and the lists above are not exclusive, but are the factors
most often noted by the courts. Let's take a quick look at the key factors.
Convenience of the Witnesses. The convenience of the witnesses is often
called a “primary” factor in the analysis of which district is more
convenient. As you will see later, non-party witnesses can be compelled to
testify at trial only to the extent they live within 100 miles of the courthouse
where trial will occur. See FRCP 45(b)(2). Even if the witness is beyond
subpoena range, it still may be more convenient for the case to be pending
nearer to a large number of significant witnesses.
Locus of Operative Events. Another factor often labeled as “significant”
is where the events that led to the suit occurred. “Courts routinely transfer
cases to the district where the principal place events occurred, and where
the principal witnesses are located in.” Schultze v. DaimlerChrysler Corp.,
2006 WL 3375373 (S.D.N.Y. 2006)
Plaintiff's Choice of Forum: The Oft-Ignored Choice. Often both the
district where the case was filed as well as the transferee district have some
connection to the dispute. Courts often state that the “plaintiff's choice of
forum is to be given considerable deference.” Eichenholtz v. Brennan, 677
F. Supp. 198, 201 (S.D.N.Y. 1988). If so, courts will often give great weight
to the fact that the plaintiff made a proper choice of forum, and deny
transfer.
In close cases, this is correct, but courts are quite willing to give less
weight to this factor when practical convenience or efficiencies point to
transfer. So, for example, if all or the vast majority of the witnesses reside
in the transferee forum and the events also occurred there, courts will not
give much weight to the plaintiff's choice of some other forum with “no
meaningful ties to the controversy and no particular interest in the parties or
the subject matter.” Greater Yellowstone Coalition v. Bosworth, 180 F.
Supp. 2d 124, 128 (D. D.C. 2001). The courts say that “the defendant's
burden in a motion to transfer decreases when the plaintiffs' choice of
forum has no meaningful nexus to the controversy and the parties.” Id.
Also, consider the weight that should be given to a plaintiff's choice of
forum if it was chosen in violation of a forum selection clause. Courts
typically state that enforceable forum selection clauses “negate” the weight
usually accorded to a plaintiff's choice of forum. E.g., Hodgson v.
Gilmartin, 2006 WL 2707397 (E.D. Pa. 2006).
Related to the question of giving the plaintiff some deference in its
choice of venue is the problem of competing lawsuits: often, a defendant
will respond to a lawsuit in the plaintiff's forum by filing a mirror image
lawsuit in the defendant's home state. Courts generally give the first-filed
suit some weight, but not if it was an improper “anticipatory” lawsuit. See
Ontel Prods., Inc. v. Project Strategies Corp., 899 F. Supp. 1144, 1150
(S.D.N.Y. 1995). For similar reasons, courts often permit a second-filed
direct action to hold as the venue even though the party named as a
defendant in that suit was the plaintiff in a previously filed mirror-image
declaratory judgment action, if the first-filed declaratory judgment action
had been filed in order to secure a venue more convenient to the defendant
but without substantial connection to the dispute, or for other reasons. See
Hy Cite Corp. v. Advanced Marketing Int'l, Inc., 2006 WL 3377861 (W.D.
Wis. 2006).
 B. Procedure to Move to Transfer Under
Section 1404(a)
If venue is proper in the district where the suit is pending, but a party has
a Rule 11 basis to assert that there is a more convenient district (or even
division in the same district) to litigate the case, that party can move to
transfer venue for convenience of the parties and witnesses under § 1404(a).
See Van Dusen v. Barrack, 376 U.S. 612 (1964). The movant must file a
written motion with the court where the case is filed that, typically, includes
affidavits by the lawyers in the case as to where likely witnesses,
documents, and related evidence is located and which includes statistics
regarding the time-to-trial in the competing districts.

1. Is a Rule 12(b)(3) Motion Required to Move

Under Section 1404(a)?
I believe the answer to that question is “no,” but courts split on how
motions to transfer from a proper venue to a more convenient one made
pursuant to Section 1404(a) should be viewed for purposes of waiver and
consolidation under Rule 12. As shown in Chapter 32, courts hold that a
motion to dismiss or transfer for improper venue under Section 1406(a) is
waived if the defense of improper venue under Rule 12(b)(3) is not properly
raised either in any pre-answer motion or, if not, in the answer or an
amendment thereto.
In contrast, a motion to transfer for the convenience of the parties under
Section 1404(a) is not waived if it is not raised in the way required by Rule
12. Put the other way, a party who neither files a Rule 12(b)(3) motion nor
objects to venue in the party's answer can still move to transfer the case to a
more convenient forum. “A motion to transfer venue for the convenience of
parties or witnesses or the interests of justice, brought pursuant to 28 U.S.C.
§ 1404(a), is not a motion under Rule 12(b)(3) of the Federal Rules . . . so
the waiver provision of Rule 12(h) is inapplicable.” Red Wing Shoe Co. v.
B-Jays USA, Inc., 2002 WL 1398538 (D. Minn. 2002) (collecting cases).
See Wilson v. U.S., 2006 WL 3431895 (E.D. Ark. 2006) (same).

2. Transfer, Not Dismissal, is the Only Option

 If the transferor court concludes the transferee district is clearly more
convenient, it has discretion to transfer — but it is not required to do so.
Note that dismissal is not a proper result of a Section 1404(a) motion:
transfer is. Decisions granting or denying motions to transfer under Section
1404(a) are reviewed for abuse of discretion. Lony v. E.I. DuPont de
Nemours & Co., 886 F.2d 628, 632 (3d Cir. 1989).
 C. Intra-District, Inter-Divisional
Transfer
Under Section 1404(a)
Some large districts are sub-divided further into two or more “divisions.”
The Southern District of Texas, for example, is quite large and extends from
Houston to Galveston to parts of the Rio Grande Valley. Courts can transfer
a case from one division to another division within a district. This is
somewhat rare, and is known as interdivisional transfer. The same basic
principles discussed above concerning section 1404(a) apply here. (Section
1406(a) does not apply to divisions. There is no such thing as an “improper
division.”)
For example, in Smith v. Colonial Penn Ins. Co., 943 F. Supp. 782 (S.D.
Tex. 1996), suit was filed in the Galveston Division of the Southern District
of Texas, and the defendants sought to transfer it pursuant to Section
1404(a) to the Houston division, about 45 miles up I-45. The court denied
the motion because the defendant failed to prove greater convenience to the
parties and witnesses beyond the fact that Galveston did not have a
commercial airport. Thus, when suit is filed in a geographically large or
otherwise diverse district, intra-district, interdivisional transfer under
Section 1404(a) should be considered.

Checkpoints

Can you describe when a court should grant a motion to transfer venue under Section 1404(a)?
Can you explain why a motion to transfer venue under Section 1404(a) is best not viewed as a Rule
12(b)(3) motion?
Can you list the showings that a party seeking to transfer a case must make?
Chapter 40

Special Venue Issues

Special Venue Issues Roadmap

This chapter examines the impact of forum selection clauses on venue, and explores the
doctrine of forum non conveniens.

This chapter addresses a number of special issues that can arise when
addressing either whether venue is proper, or whether to transfer to a more
convenient venue under Section 1404(a).

A. The Impact of Forum Selection

Clauses
1. Enforceability and Interpretation
It is common for commercial contracts to include forum selection clauses
that specify where a suit over breach of the agreement must be filed. In
Bremen v. Zapata, 407 U.S. 1, 15 (1972) the court reversed long-standing
judicial hostility to such clauses and instead held that they should be
enforced unless doing so “would be unreasonable or unjust” or that “the
clause was invalid for such reasons as fraud or over-reaching.” Even
“boilerplate” clauses in consumer contracts have been upheld. This issue is
explored in several casebooks.
Sometimes the clauses are unenforceable, however. For example, in
Jones v. GNC Franchising, Inc., 211 F.3d 495 (9th Cir. 2000), a franchisee
sued the franchisor in California, where the franchise was located. The
franchisor moved to dismiss or transfer under Section 1406(a) or to transfer
under Section 1404(a), basing its argument in part upon a clause in the
franchise agreement requiring suits be filed in Pennsylvania “and the parties
waive all questions of personal jurisdiction or venue for the purpose of
carrying out this provision.” The district court denied the motion to dismiss,
and also the motion to transfer, and stated that the clause was unenforceable
under California's public policy against forum selection clauses. The Ninth
Circuit affirmed because California had adopted a statute that stated that
any provision in a franchise agreement precluding the filing of claims in
California was void as against public policy. Because the policy was
codified, the court held the clause was unenforceable.
But enforceability of the clause normally is not the issue: interpretation
is. The contract may be enforceable but yet cover the claim in the suit. Just
because I agree to litigate disputes over a cruise line with the company in
Florida doesn't mean I have agreed to litigate a claim that arose when one of
their employees happened to crash into my car while I was headed to the
dock to board the ship. It is important for counsel to look closely at the
language of the forum selection clause to determine if the clause requires
the particular claim to be litigated in the designated forum. See Hodgson v.
Gilmartin, 2006 WL 2707397 (E.D. Pa. 2006) (discussing various
interpretive issues that accompany forum selection clauses).

2. Interplay Between Forum Selection

Clauses and Rule 12(b)(3)
Suppose plaintiff files suit in a venue in violation of a forum selection
clause. Must the defendant file a Rule 12(b)(3) motion or include an
objection to improper venue in its answer or an amendment thereto, in order
to have the court enforce the clause?
Until very recently, there was no clear answer to that question. However,
in 2013 the Supreme Court held that whether venue is proper, or not, is
determined by the venue statutes (primarily Section 1391). The Court held
that “[w]hether the parties entered into a contract containing a forum-
selection clause has no bearing on whether a case falls into one of the
categories of cases listed in § 1391(b). As a result, a case filed in a district
that falls within § 1391 may not be dismissed under § 1406(a) or Rule 12(b)
(3).” Atlantic Marine Const. Co., Inc. v. U.S. Dist. Court for Western Dist.
of Texas, 134 S.Ct. 568 (2014). Instead, a party enforces a forum selection
clause through a motion to transfer venue under Section 1404. However,
absent “extraordinary circumstances” the clause should be enforced.
Further, the Court stated that the analysis under Section 1404 is changed in
three fundamental ways:
the plaintiff's choice of forum merits no weight, but because it is defying
the forum-selection clause, it must establish “that transfer to the forum for
which the parties bargained is unwarranted”;
the court should not consider the parties' private interests because when
“parties agree to a forum-selection clause, they waive the right to challenge
the preselected forum as inconvenient or less convenient for themselves or
their witnesses, or for their pursuit of the litigation”; and
the district court that decides the case — whether it is transferred or not —
should apply the choice of law principles of the parties' selected state.

To sum up, a party who files suit in violation of a forum selection clause
will have a hard time making his choice of forum stick. Finally, if suit is
filed in federal court in violation of a clause that specifies that any dispute
must be heard in state court, or in a foreign country, the Court in Atlantic
Marine stated that a district court should address what to do in light of the
doctrine of forum non conveniens, discussed next.

B. Forum Non Conveniens

Forum non conveniens (often called just “forum non”) is a narrow
exception to the principle that if personal and subject matter jurisdiction
and venue are proper and there is no more convenient forum, the district
court where the suit is filed must hear the case.

1. International Application of Forum Non

The circumstances that can lead to application of forum non arise when
the dispute has international elements. So, for example in Piper Aircraft Co.
v. Reyno, 454 U.S. 235 (1981), a small airliner crashed in Scotland during a
flight between foreign destinations. Suit was filed on behalf of several
people killed on the flight, all Scottish citizens, in California against the
aircraft manufacturer even though a related proceeding and various
administrative investigations had occurred and were occurring in the United
Kingdom. Some of those proceedings involved parties over whom a U.S.
court could not get personal jurisdiction. Eventually the case was
transferred to the Middle District of Pennsylvania under Section 1404(a).
At that point, the defendants moved to dismiss on the basis of forum non
conveniens. The district court granted the motion; the appellate court
reversed; the Supreme Court reversed the appellate court, holding that the
district court had not abused its discretion in dismissing the case because it
considered the various public and private factors that dismissal, compared
to keeping the case, would create.
In more recent years, courts have created a process for addressing
motions to dismiss for forum non. E.g., Yavuz v. 61 MM, Ltd., 465 F.3d 418
(10th Cir. 2006). A federal court has discretion to dismiss a case when there
is an alternative “adequate” forum to hear the case, trial in the current
forum would be oppressive and vexatious out of all proportion to the
convenience of the forum to the plaintiff or because the forum is
inappropriate because of “considerations affecting the court's own
administrative and legal problems.” Sinochem Int'l Co. Ltd. v. Malaysia Int'l
Shipping Corp., 127 S.Ct. 1184, 1190 (2007).
An available forum is one that would have subject matter jurisdiction
over the claim, and personal jurisdiction over the parties. Alpine View Co. v.
Atlas Copco AB, 205 F.3d 208, 221 (5th Cir. 2000). A forum is “adequate”
if it is one in which “differences in that forum's laws would not deprive the
plaintiff of all remedies or result in unfair treatment.” Empresa Lineas
Maritamas Argentinas, S.A. v. Schichau-Unterweser A.G., 955 F.2d 368,
372 (5th Cir. 1992). A forum is still “adequate” even if the plaintiff's claim
would not be economically viable to bring because the foreign jurisdiction's
law would provide less of a remedy. Gonzalez v. Chrysler Corp., 301 F.3d
377, 383 (5th Cir. 2002).
If there is an adequate, available forum, then a variety of private and
public factors influence the court's decision to determine whether to
dismiss. The private factors include: (1) relative ease of access to sources of
proof; (2) availability of compulsory process to compel attendance of
witnesses at trial or deposition; (3) cost of obtaining attendance of non-
willing non-party witnesses; (4) possibility of a view of the premises, if any
and if appropriate; and (5) all other practical problems that make trial
easier, more expeditious, or less expensive in one place or the other.
Baumgart v. Fairchild Aircraft Corp., 981 F.2d 824, 835 (5th Cir. 1993). If
these private factors show that dismissal is proper, then the court should
dismiss without proceeding further; however, if they do not support
dismissal, then the court must consider whether the public interest factors
weigh in favor of dismissal. Id. The public factors include: (1)
administrative difficulties faced by courts with crowded dockets which can
be exacerbated by cases not being filed where they arose; (2) the burden on
jury duty of members of a community with no connection to the dispute or,
perhaps, the parties; (3) the interest of the foreign venue of having local
disputes decided at home; and (4) the fact that a foreign court will be more
familiar with foreign law than will a court in the United States. See Duha,
448 F.3d at 872.

2. Narrow Domestic Application of Forum Non

Forum non generally does not apply in federal court where there is a
district in the United States where venue is proper. “For the federal-court
system, Congress has codified the doctrine and has provided for transfer,
rather than dismissal, when sister federal court is the more convenient place
for trial of the action.” Sinochem, 127 S. Ct. at 1190 (citing 28 U.S.C. §§
1404 and 1406). However, as noted above, the Atlantic Marine court held
that if parties in a forum selection clause specify that any dispute must be
filed either a state court in the United States or in a foreign tribunal, then a
court may dismiss the action under the doctrine of forum non.

3. Appellate Review
A decision to dismiss under forum non is reviewed for abuse of
discretion. See Duha v. Agrium, Inc., 448 F.3d 867 (6th Cir. 2006). Finally,
as with all aspects of venue, forum non is determined on a claim-by-claim
basis, not on the basis of what the “dispute” is about. Id.

4. Waiver of Forum Non

A party must make a motion to dismiss based upon forum non “within a
reasonable time after the facts or circumstances which serve as the basis for
the motion have developed and become known or reasonably knowable” to
it. In re Air Crash Disaster Near New Orleans, La., 821 F.2d 1147, 1165
(5th Cir. 1987) (en banc), vacated on other grounds sub nom., Pan Am.
World Airways, Inc. v. Lopez, 490 U.S. 1032 (1989).

C. Venue in Removed Actions

Specific rules govern venue in removed actions, discussed in Chapter 10.

Checkpoints
Can you explain when forum selection clauses will be enforced?
Can you explain how a party seeking to enforce a choice of venue specified in a forum selection
clause can raise the issue?
Can you describe the doctrine of forum non conveniens?
Chapter 41

Amending Pleadings

Amending Pleadings Roadmap

This chapter explains when a party has a right to amend a pleading, and what standards
govern a court's decision to grant an amendment once that right has expired.
This chapter also explains how to determine whether a claim added by an amended
pleading “relates back” to an earlier time, and when relation back matters.

We'll see in the next chapter that in almost all federal litigation a
scheduling order will control whether a party may amend a pleading.
Nonetheless, there are two reasons to study the rules that apply only if there
is no scheduling order: first, a few cases don't have scheduling orders that
have deadlines for amending and, second, the standards that apply under a
scheduling order are influenced by and in some circumstances are the same
standards that apply without a scheduling order. In other words, you need to
know both.

A. The General Rule Regarding

Amendment
of Pleadings in Rule 15(a)
At the outset, note that the discussion here is limited to “pleadings.”
“Pleadings” is a term of art, limited to those papers identified as pleadings
in Rule 7(a).
Why the need to amend? Suppose a party files a pleading but later
realizes it forgot something: a plaintiff asserting a duty to rescue claim fails,
for example, to allege facts showing that the claim falls into an exception to
the general rule that there is no duty to rescue. Or, the plaintiff omits a
claim that the facts also presented. Or, in the defendant's answer, the
defendant fails to include an objection to personal jurisdiction, venue, or the
sufficiency of service of process (and it did not make a pre-answer motion).
The Rules provide both a limited but unfettered right to amend a pleading
and also, if the opposing party will not agree to allow an amendment, the
right to move the court for leave to file an amended pleading.

1. The Right to Amend

Rule 15(a) creates two separate windows giving an unfettered right to
amend one time: “A party may amend its pleading once as a matter of
course: (A) 21 days after serving it, or (B) if the pleading is one to which a
responsive pleading is required, 21 days after service of a responsive
pleading or 21 days after service of a motion under Rule 12(b), (e), or (f).”
Thus, a party has at least 21 days to serve and file an amended pleading —
even if the other party files its responsive pleading or files a motion under
Rule 12.
This is a recent amendment and a significant change from prior practice.
As now structured, the rule gives a party 21 days to amend its pleading
even after a Rule 12 motion is served, giving a plaintiff, for example, a
significant incentive to review the sufficiency of its complaint if the
defendant moves to dismiss under Rule 12. Note that Rule 15 applies to all
pleadings, not just complaints.

2. Agreement From the Opposing Parties

As next shown, the law encourages courts to permit amendment.
Consequently, often opposing parties will agree to an amendment even if
the time to amend as of right has passed, particularly if the request to
amend occurs before much discovery or other action has occurred.

3. Moving for Leave to Amend

a. Rule 15(a)(2): The General Rule
The general rule governing amendments of pleadings is Rule 15(a)(2):
Courts “should freely give leave when justice so requires.” Courts have
interpreted the Rule to be strongly biased toward allowing amendment,
since denying the amendment means that the merits of the dispute will not
be reached. The leading case emphasized:
 Rule 15(a) declares that leave to amend ‘shall be freely given when
justice so requires’; this mandate is to be heeded. If the underlying
facts or circumstances relied upon by a plaintiff may be a proper
subject of relief, he ought to be afforded an opportunity to test his
claim on the merits. In the absence of any apparent or declared reason
— such as undue delay, bad faith or dilatory motive on the part of the
movant, repeated failure to cure deficiencies by amendments
previously allowed, undue prejudice to the opposing party by virtue of
allowance of the amendment, futility of amendment, etc. — the leave
sought should, as the rules require, be ‘freely given.’ Of course, the
grant or denial of an opportunity to amend is within the discretion of
the District Court, but outright refusal to grant the leave without any
justifying reason appearing for the denial is not an exercise of
discretion; it is merely abuse of that discretion and inconsistent with
the spirit of the Federal Rules.
Foman v. Davis, 371 U.S. 178, 182 (1962). Delay, alone, is insufficient to
deny amendment. Id. See Laber v. Harvey, 438 F.2d 404, 427 (4th Cir.
2006) (analyzing amendment offered after judgment had been entered).
What more, or besides, delay is sufficient to deny leave to amend a
pleading?
Futility. An amendment is usually deemed to be futile because the claim
the party seeks to add by the amendment is time-barred, Bonerb v. Richard
J. Caron Found., 159 F.R.D. 16, 18 (W.D.N.Y.1994), or the amendment
does not cure the defect in the existing pleading, Shell Oil Co. v. Aetna
Casualty & Sur. Co., 158 F.R.D. 395, 403 (N.D. Ill.1994), or on its face the
new claim in the proposed pleading fails to state a claim upon which relief
can be granted, see Clark v. Exxon Corp., 159 F.R.D. 26, 28 (M.D. La.
1994).
Prejudice From Delay. “A common example of a prejudicial amendment
is one that raises a new legal theory that would require the gathering and
analysis of facts not already considered by [the defendant, and] is offered
shortly before or during trial.” Johnson v. Oroweat Foods Co., 785 F.2d
503, 509 (4th Cir. 1986). In contrast, if the amendment merely adds an
additional legal theory to the facts already pled, or is offered before any
discovery has occurred, prejudice is unlikely to arise. Laber v. Harvey, 438
F.2d 404, 427 (4th Cir. 2006).
Prior Failures to Cure a Pleading Defect. If a court grants leave for a
party to cure a deficient pleading, but the party fails to properly amend the
pleading, a subsequent request for leave to amend can be denied. Glaser v.
Enzo Biochem, Inc., 464 F.3d 474 (4th Cir. 2006) (affirming denial of
motion for leave to amend where the plaintiff had been given four prior
chances to correct its complaint).
Evidentiary Prejudice. Prejudice to the opposing party in the form of lost
evidence or faded memories can be sufficient to deny amendment. A
common example is evidentiary prejudice: “Undue prejudice is not mere
harm to the non-movant but a denial of the opportunity to present facts or
evidence which would have [been] offered had the amendments been
timely.” Dove v. Wash. Area Metro. Transit Auth., 221 F.R.D. 246, 248 (D.
D.C. 2004). Other examples of sufficient prejudice include where the
proposed amendment will alter, late in litigation, the opposing party's
strategy or choice of counsel. See Atchinson v. Dist. of Columbia, 73 F.3d
418, 427 (D.C. Cir. 1996) (indicating that “the district court's concerns
regarding [the non-movant's] choice of counsel and litigation strategy seem
well-founded”).
Other Forms of Prejudice. Prejudice to both parties was at issue in
Beeck v. Aquaslide ‘n’ Dive Corp., 562 F.2d 537 (8th Cir. 1977), where the
plaintiff had been injured in an accident on a pool slide. The plaintiff
investigated and sued the company that apparently made the slide,
Aquaslide. Based upon its own investigation, in its answer Aquaslide
admitted that it had manufactured the slide. However, after a more complete
investigation later, Aquaslide realized that it had not manufactured the slide,
and so sought to amend its answer to change its admission to a denial. The
plaintiff argued that it would be prejudiced because the statute of limitations
had run against the proper defendant. The district court permitted the
amendment. The appellate court found no abuse of discretion, agreeing with
the district court that there had been no bad faith by the defendant to deny it
the right to contest the question of whether it had, in fact, made the slide.
The appellate court emphasized that the defendant would be prejudiced
without the amendment — it would not be able to contest the issue of who
made the slide — and the plaintiff had not established that it could not still
sue the actual manufacturer of the slide.

B. The Procedure to Amend a Pleading

A party with the right to amend simply files the amended pleading and
serves it on the other parties. If the opposing parties agree to the
amendment, then the party seeking to amend simply files an unopposed
motion to amend the pleading (including a certification that the other
parties have agreed to allow the amendment) along with a copy of the
amended pleading, and serves those papers on the other parties.
If there is no agreement or right to amend, then the process is only
slightly more involved. A party generally files a motion for leave to amend
the pleading in which it argues why the amendment ought to be granted,
attaching the proposed amended pleading as an exhibit to the motion. The
party must include a certificate of conference in the motion explaining that
the issue could not be resolved among counsel. If the motion is granted
(after the other side gets its opportunity to respond to the motion, see
Chapter 28), then the party must file and serve the amended pleading.

C. The Other Parties' Right to Respond

if Amendment is Permitted
Suppose a plaintiff files an amended complaint after receiving leave of
court. What then? The last sentence of Rule 15(a)(3) provides a partial
answer: “Unless the court orders otherwise, any required response to an
amended pleading must be made within the time remaining to respond to
the original pleading or within 14 days after service of the amended
pleading, whichever is later.” Does this permit a defendant, for example, in
response to an amended complaint, to raise counterclaims that it had
omitted, or defenses that it had not raised in its original answer, or is a party
limited in its to responding only to the new material introduced in the other
party's amended pleading? There is no clear answer:
Under the permissive view, a party is entitled to amend its answer once
as of right upon the plaintiff's filing of an amended complaint. The
philosophy underlying this approach appears to be that plaintiffs
amend their complaint at their peril, opening themselves up to any and
all counterclaims [the defendants] choose to assert. The permissive
approach has been justified by reference to the “liberal standard for the
amendment of pleadings” under Rule 15(a) . . .
By contrast, courts that have adopted the narrow approach, generally
hold that a party is only entitled to respond as of right to an amended
complaint if its answer is strictly confined to the new issues raised by
the amended complaint.
 To complete this exercise in triangulation, some courts have adopted
the moderate view as a “third way” of approaching the Rule 15(a)
dilemma. These courts agree with those taking the narrow view that
Rule 15(a)'s “in response” language limits the ability of defendants to
assert counterclaims. Moderate courts differ by concluding that this
language only limits the breadth of the changes allowed in an amended
response to the breadth of the changes made in the amended
complaint. Thus, there is no requirement that a defendant specifically
tailor its answer to the amended complaint; rather, moderate courts
attempt to discern whether the defendant's answer affects the scope of
the litigation in a manner commensurate with the amended complaint. .
. . [T]he moderate approach is premised on a notion of equity that, if
the plaintiff expands its case by adding new theories or claims, it
cannot complain if the defendant seeks to do the same by averring new
counterclaims.
So. New England Tel. Co. v. Global NAPS, Inc., 2007 WL 521162 (D.
Conn. 2007). This split in approach remains the law.

D. Rule 15(c) Relation Back

of an Otherwise Time-Barred Claim
The interplay between the statute of limitations and amended pleadings
creates a somewhat complex problem which is addressed by Rule 15(c).
Suppose a complaint is filed within the statute of limitations, but after the
statute has run it is amended to add a new claim: should the new claim be
treated as if it filing date of the original complaint, or only the later filing
date of the amended complaint? If the former, it is timely; if the latter, it is
barred by the statute of limitations. Be clear: This is an issue only where (a)
the amended pleading adds a new claim and (b) that claim is time-barred by
a statute of limitations if given the filing date of the amended pleading, but
is not time-barred if given the benefit of the filing date of the pleading
which is sought to be amended. Thus, the only fact pattern that implicates
relation back is this:

Typically, the issue of relation back is litigated when a plaintiff moves for
leave to amend its complaint to add a new claim; in opposition to the
motion to amend, the defendant contends the claim does not relate back,
and so permitting the filing of the amended complaint is “futile” and so the
motion to amend should be denied.

1. Rule 15(c)(1): The Rule Governing Relation

Back
Rule 15(c)(1) creates three separate rules covering different
circumstances by providing that an amendment “relates back to the date of
the original pleading when:
(1) When an Amendment Relates Back. An amendment to a
pleading relates back to the date of the original pleading when:
(A) the law that provides the applicable statute of limitations
allows relation back;
(B) the amendment asserts a claim or defense that arose out of the
conduct, transaction, or occurrence set out — or attempted to be
set out — in the original pleading; or
(C) the amendment changes the party or the naming of the party
against whom a claim is asserted, if Rule 15(c)(1)(B) is satisfied
and if, within the period provided by Rule 4(m) for serving the
summons and complaint, the party to be brought in by
amendment:
(i) received such notice of the action that it will not be
prejudiced in defending on the merits; and
(ii) knew or should have known that the action would
have been brought against it, but for a mistake
concerning the proper party's identity.

a. Relation Back Under Rule 15(c)(1)(A)

If a statute specifically provides that the claim relates back, then it does.
Such statutes are not common.

b. Relation Back Under Rule 15(c)(1)(B)

Rule 15(c)(1)(B) is the most common basis for disputes over whether a
claim relates back, since it involves only the addition of a new claim, not
the addition of a new party. (Note that Rule 15(c)(1)(B) controls when a
new claim is asserted against an existing party; Rule 15(c)(1)(C) applies
when a new party is added or the name of an existing party is changed.)
Under this Rule, a claim relates back if it “arose out of the conduct,
transaction, or occurrence” in the pleading that is being amended.
The focus is on whether the factual circumstances alleged in the
unamended pleading gave the opposing party notice of the facts underlying
the newly-asserted claim. The “critical issue in Rule 15(c) determinations is
whether the original complaint gave notice to the defendant of the claim
now being asserted.” Moore v. Baker, 929 F.2d 1129, 1131 (11th Cir. 1993).
As stated in Tri-Ex Enterprises, Inc. v. Morgan Guaranty Trust Co., 586 F.
Supp. 930, 932 (S.D.N.Y. 1984):
[T]he relation back doctrine is based upon the principle that one who
has been given notice of litigation concerning a given transaction or
occurrence has been provided with all the protection that statutes of
limitation are designed to afford. Thus, if the litigant has been advised
at the outset of the general facts from which the belatedly asserted
claim arises, the amendment will relate back even though the statute of
limitations may have run in the interim.
Thus, to determine whether a claim relates back, the allegations used to
support to the newly asserted claim should be compared to the allegations
used to support to the original claim: if they arise out of the same set of
circumstances, the claim relates back.
So, for example, in Bonerb v. Richard J. Caron Found., 159 F.R.D. 16
(W.D.N.Y. 1994), the original complaint alleged that plaintiff was injured
when he slipped and fell on a wet, muddy basketball court “while
participating in a mandatory exercise program . . .” at defendant's
rehabilitation facility and the proposed amendment alleged that plaintiff
“was caused to fall while playing in an outdoor basketball court . . . in an
exercise program mandated as part of his treatment in the rehabilitation
program . . .” and that “the rehabilitation and counseling care rendered . . .
was negligently, carelessly and unskillfully performed.” The court held that
the claim related back even though the duties breached were distinct
because both claims arose from “the injury suffered by plaintiff on
November 29, 1991,” which was the focus of the original pleading.
In contrast, however, if the claim arises out of a different set of
circumstances, then it does not relate back. So, for example, in Moore v.
Baker, the plaintiff's original complaint alleged that the defendant doctor
had breached a statutory obligation to advise the patient of alternative
therapy before conducting an operation that went awry. The complaint,
therefore, focused on the events that occurred before the operation. After
discovery and even after the defendant had moved for summary judgment,
the plaintiff moved to amend the complaint to assert a claim that the
operation had itself been conducted negligently. The district court held the
amendment did not relate back, and the Eleventh Circuit affirmed:
the allegations asserted in [the plaintiff's] original complaint contain
nothing to put [the defendant] on notice that the new claims of
negligence might be asserted. Even when given a liberal construction,
there is nothing in [the plaintiff's] original complaint which makes
reference to any acts of alleged negligence by [the defendant] either
during or after surgery. The original complaint focuses on [the
defendant's] actions before [the plaintiff] decided to undergo surgery,
but the amended complaint focuses on [the defendant's] actions during
and after the surgery. The alleged acts of negligence occurred at
different times and involved separate and distinct conduct. In order to
recover on the negligence claim contained in her amended complaint,
[the plaintiff] would have to prove completely different facts than
would otherwise have been required to recover on the informed
consent claim in the original complaint.
Moore, 989 F.2d at 1132.
Likewise, in Marsh v. Coleman Co., 774 F. Supp. 608 (D. Kan. 1991),
the plaintiff initially filed breach of contract and age discrimination claims
against his former employer arising out of his termination in 1988. Later, he
sought to amend to add a fraud claimed arising out of statements made to
him by his employer in 1985. The court held that the fraud claim did not
relate back because the original complaint made no mention of any events
in 1985, and so was “based on conduct substantially different in kind and
time” from the 1988 termination.
A decision under Rule 15(c)(3) is reviewed de novo, with no deference to
the district court's decision. Slayton v. Am. Exp. Co., 460 F.3d 215, 227 (2d
Cir. 2006). This is because an appellate court is in as good a position as the
trial court to determine whether the new claim arose out of the same
circumstances as those alleged in the original pleading.
 c. Relation Back Under Rule 15(c)(1)(C)
i. Changing the Defendant or Defendant's Name
Rule 15(c)(1)(C) is the more problematic subsection of Rule 15(c), since
it allows the party to change the identity of the party being sued. Rule 15(c)
(1)(C) requires that:
(1) the claim arise out of the same transaction or occurrence as the
original pleading;
(2) the party to be added had, within 120 days of the filing of the
original pleading, received notice of the suit such that the party “will
not be prejudiced in defending on the merits”; and
(3) the party to be added “knew or should have known that the action
would have been brought against it, but for a mistake concerning the
proper party's identity.”
The analysis under the first step is the same as above.
In determining whether a defendant received notice such that it will not
be prejudiced in defending the suit on the merits, the easy cases are those in
which the right defendant is served, but its name is misspelled. This type of
“mistake” relates back. Edwards v. Occidental Chem. Corp., 892 F.2d 1442,
1446 (9th Cir. 1990). In those cases, the defendant likely had notice and
was not prejudiced and should have known of the mistake if it was simply a
typographical error.
More difficult are those cases in which the wrong party was named as a
defendant. See Braud v. Transp. Serv. Co. of Ill., 445 F.3d 801, 806 n. 12
(5th Cir. 2006) (explaining that if a different person or corporation is added,
rather than merely fixing a typographical error, then the amending party
must satisfy all elements of Rule 15(c)(1)(C)). In such cases, in addition to
satisfying the first prong, the question of both “notice” and of whether the
new defendant will have been prejudiced must be addressed. Brink v. First
Credit Resources, 57 F. Supp. 2d 848 (D. Ariz. 1999).
In Brink, for example, the plaintiff initially sued a company for alleging
violating the Fair Debt Collection Practices Act. After limitations had run
on his claims, he sought to amend the complaint to (1) change the name of
the corporate defendant and (2) add as defendant two individuals who were
officers of that corporate defendant. The court explained that “notice” in
terms of the second requirement can be either actual or constructive. Id. If
the new defendant has an “identity of interest” with a named defendant,
knowledge of the suit will be imputed from the named defendant to the new
one. Id. Thus, for example, if a person owns all of the shares of a
corporation, knowledge to the corporation is knowledge to that person for
purposes of Rule 15(c)(1)(C). Id.
Other courts have likewise noted that constructive notice can arise in at
least two ways:
(a) the “shared attorney” method, in which the plaintiff shows that
“there was some communication or relationship” between the attorney
for the named defendant and the proposed one before the 120 day
period expired; or
(b) the “identity of interest” method, which requires the plaintiff
demonstrate that the named defendant and the proposed one “are so
closely related in business or other activities that it is fair to presume
the added parties learned of the institution of the action shortly after it
was commenced,” such as when the unnamed defendant is a company
that is closely related to, or is an officer or director of, the named
defendant and has close connections to it.
See Markhorst v. Rigid, Inc., 2007 WL 958604 (E.D. Pa. 2007). In addition,
if the potential defendant misleads a plaintiff into thinking that the named
party is the proper defendant, the unnamed defendant can be held to have
had constructive notice or be estopped from denying that it had no notice.
See id. If the newly named defendant was notified of the suit at the same
time as the original defendant, then it is unlikely it will be able to show
prejudice since it will have had the same amount of time to prepare its case
as the original defendant. Brink, 57 F. Supp. 2d at 851.
Finally, the third prong “permits an amendment to relate back only where
there has been an error made concerning the identity of the proper party and
where that party is chargeable with knowledge of the mistake, but it does
not permit relation back where . . . there is a lack of knowledge of the
proper party.” Wood v. Worachek, 618 F.2d 1225, 1229 (7th Cir. 1980). A
“mistake concerning the identity of the proper party” does not apply where
the plaintiff simply lacks knowledge of the proper defendant. Hall v.
Norfolk So. Ry. Co., 469 F.3d 590, 595 (7th Cir. 2006).

ii. Changing the Plaintiff

Read literally, Rule 15(c)(1)(C) permits amendment only changing the
person against whom the claim is asserted, not the party asserting the claim.
Nonetheless, under some circumstances an amendment can change the
plaintiff and Rule 15(c)(3) will permit relation back of the claim. See, e.g.,
Penn Millers Ins. Co. v. U.S., 472 F. Supp. 2d 705 (E.D. N.C. 2007).
Although the law governing whether a new plaintiff's claim can be said to
relate back is less developed than when the change is as to a defendant, see
Cliff v. Payco Gen'l Am. Credits, Inc., 363 F.3d 1113, 1131–32 (11th Cir.
2004), courts apply a different test to the question. One test is:
Where a new plaintiff is added or substituted, the same conduct,
transaction, or occurrence originally alleged as a basis for the action
must be relied upon by the substituted plaintiff. Moreover, (1) there
must be a sufficient identity of interest between the new plaintiff, the
old plaintiff, and their respective claims so that the defendant can be
said to have received adequate notice of the latecomer's claim against
the defendant so as to avoid prejudice; and (2) the defendant must have
known or should have known that the new plaintiff would have
brought the action against it but for a mistake concerning the identity
of the proper party.
Penn Millers, 472 F. Supp. 2d at 715 (collecting cases). Note, however, that
this “is not an open invitation to every plaintiff whose claim otherwise
would be time-barred to salvage it by joining an earlier-filed action.” Young
v. Lepone, 305 F.3d 1, 14 (1st Cir. 2002).
The standard of review of decisions under Rule 15(c)(1)(C) is abuse of
discretion because the district court is required “to exercise its discretion in
deciding whether the circumstances of a given case are such that it would
be unfair to permit the plaintiff to add a new defendant.” Percy v. San
Francisco Gen. Hosp., 841 F.2d 975, 978 (9th Cir. 1988).

2. How the Question of Relation Back is

Typically Litigated
It is settled that “an amendment which seeks to include time-barred
claims is futile.” Aequitron Medical, Inc. v. CBS, Inc., 1994 WL 414361 at
*2 (S.D.N.Y. Aug. 5, 1994). Thus, if a party moves for leave to amend to
add a time-barred claim, the other party can oppose the amendment because
permitting it would be “futile” under Foman v. Davis. See id. Accordingly,
even though leave to amend normally must be freely given, if the claim
does not relate back, then allowing the amendment would be futile, and so
should be denied.
Finally, note that even if a claim relates back, the court must still consider
whether allowing the amendment is proper under Rule 15(a). Simply
because the claim relates back does not mean that the amendment must be
allowed. It means only that the amendment is not futile — there could still
be other reasons to deny leave to amend.

Checkpoints

Can you identify the three standards for amending a pleading that apply at different times?
Can you describe when a court can properly deny leave to amend a pleading?
Can you describe when relation back of a claim matters? How to determine whether a claim relates
back, or not? The impact of that decision?
Chapter 42

Lawyer Responsibility for

and Judicial Involvement
in Case Management
In recent decades the Rules were amended to increase both the
responsibility of counsel to cooperate and judicial involvement in managing
litigation. Three Rules, in particular, are standouts: (1) Rule 26(f)'s
requirement of an initial conference and the court's issuance of a scheduling
order under Rule 16(b); (2) Rule 26(a)(2)'s requirement of the disclosure of
expert reports and information; and (3) the requirement in Rule 26(a)(3)
and Rule 16(e) of the preparation and submission of the final pretrial order.
First, lawyers are required to confer about the scope of discovery, timing
of trial, and various other issues promptly after the defendant responds to
the complaint and to prepare and file a report with the district court. After
receiving the parties' report, the district court issues a scheduling order that
establishes deadlines for amending pleadings, conducting discovery,
submitting dispositive motions, and other actions. The passing of a deadline
makes it more difficult for a party who misses one to amend a pleading or
otherwise take action.
Second, the Rules require lawyers to disclose the identity of experts and
to have certain experts prepare reports prior to being deposed. We'll see that
a party who fails to timely disclose an expert and have a report prepared
may have a difficult time overcoming their tardiness.
Finally, third, about a month before trial the parties are required to work
together to prepare and submit the final pretrial order. And, again, we will
see that a party who seeks to make a change to the pretrial order, while not
completely precluded from doing so, nonetheless must jump over a higher
hurdle.
 The chart below brings these three requirements together in one place as
a preview. Notice that a party who misses a deadline in a scheduling order
has an easier time overcoming their tardiness than does a party who seeks
to amend the final pretrial order. The hurdles are not impossible to clear,
but the bar grows higher as the case progresses.
Chapter 43

The First Steps After Pleadings

Close: Conferences and
Required Initial Disclosures

After Pleadings Close Roadmap

This chapter explains how proceed once the pleadings are closed, including the scope of
initial disclosures and the preparation of the scheduling order.

As we've seen, pleadings no longer play the primary role of identifying

all facts that are likely to be relevant and dispositive of the claims or
defenses. Instead, they provide only notice of the claims and defenses. The
primary way that parties obtain access to information held by the opposing
parties, or non-parties, now takes the form of discovery — a process where
a party, and sometimes non-parties, must disclose information, but only to a
limited extent and only upon proper request.
Although discovery is the principal way, it is not the only way that
information beyond the pleadings is obtained from opposing parties. The
Rules require each party to voluntarily disclose certain information that a
party intends to use at trial, even without a request. This chart summarizes
voluntary disclosures:
 These disclosures take place at separate and specific times during the
suit, but Rule 26(a) lumps them together. We'll see each step as we move
closer to trial. This chapter describes the first of these, initial disclosures.

A. Required Initial Disclosures:

Each Party Must Show its Best Hand
Discovery, as we will see, is the process by which one party uncovers
information known to the other side by sending the other side written
questions (called “interrogatories”), asking the other side to produce
documents, and to submit to oral questioning at what are known as
depositions, among other things. From the Rules' adoption in 1938 until the
early 1990s discovery was the only means authorized by the Rules for a
party to ascertain the facts known only to another party. There was,
essentially, only one phase to the information exchange process of
litigation, and that was discovery. It was an adversarial process in which a
party had to provide information only if requested by another party.
Just in the last twenty-five years, the Rules added required “initial
disclosures.” Under the current Rules, parties are required, without request
by another party, to produce significant information early in litigation. This
chapter focuses principally on what occurs while the parties are waiting for
discovery to begin, and how the process of initial disclosures required under
Rule 26(a)(1) occurs.
The current approach to required initial disclosures was adopted in 2000,
after 7 years of a different rule, under which parties had been required to
disclose information that was relevant to any claim or defense, regardless of
whether it helped or hurt that party's case. As you can imagine, lawyers
construed “relevant” narrowly if the particular information was
unfavorable, and broadly if that information was helpful. This led to
changing the rule to require disclosure of, generally, all information that a
party will use to support its positions.
This pre-discovery phase has a number of steps.

B. The Parties Agree on a Plan for the

Lawsuit
at the Rule 26(f) Conference
Once a defendant appears in a case, either by filing a pleading, Rule 12
motion, or motion for summary judgment, the parties' attorneys are required
to meet to confer to agree and identify any disagreements on a variety of
subjects that will control the timing, scope, and order of the rest of the
lawsuit.

1. When
The attorneys are required to confer so “as soon as practicable” but at
least 21 days before the district court's date for the Rule 16(b) scheduling
conference. FRCP 26(f)(1). The latest they can meet thus turns on when the
district court sets the time for the scheduling conference under Rule 16(b),
which, as amended in 2015, must be as soon as practicable, but no later
than the earlier of (a) 90 days after any defendant has been served or (b) 60
days after any defendant has appeared. FRCP 16(b)(2). The 2015
amendments shortened the time in an effort to create earlier judicial
involvement in a case and restricted the ability of the district court to delay
entry of its Rule 16(b) order. Thus, now a district court has broad power to
order the parties to meet more quickly, but it cannot extend the deadline for
the Rule 16(b) conference absent good cause. FRCP 26(f)(1); FRCP 16(b)
(2). (We'll come back to the Rule 16(b) conference and what results from it
later in this chapter.) The attorneys for the parties are jointly required to set
up this conference and to attempt in good faith to agree on a plan. FRCP
26(f)(2).

2. What
Rule 26(f)(2) requires the attorneys are required to confer (telephonically,
in person, or otherwise) to in good faith attempt to agree on the following,
and it must state the parties' views on these issues:
(a) The nature and basis of the parties' claims and defenses;
(b) The possibility of settlement or other resolution of the case;
(c) To arrange how to make the required initial disclosures;
(d) To develop a plan to manage discovery, including:
(1) What if any changes should be made to the various required
disclosures (both the initial disclosures and those that come later)
and when they will take place;
(2) The subjects on which discovery may be needed, when it must
be completed, and whether it will be conducted in phases or
limited to particular issues;
(3) Any steps that need to be taken concerning preservation,
disclosure, or discovery of electronically stored information;
(4) Any agreement concerning what happens if privileged or
work product information is inadvertently produced or disclosed;
(5) Whether any of the limitations on discovery imposed by the
Rules or a local rule of the district court need to be changed or
whether other limitations need to be imposed; and
(6) Whether any protective orders under Rule 26(c) are needed, or
whether any orders under Rule 16(b) or (c) are needed.
What does this list mean in practical terms? The first two items are
designed to achieve broader goals than the others. In part, the goal of the
conference is to ensure that the parties have a basic understanding of each
other's claims or defenses and that settlement has been discussed. The
requirement of paragraph (c) is mechanical: as we'll see, in making the
required initial disclosures each party will have to get information and, in
many cases, documents to the other party. Paragraph (c) requires that they
agree on when and how to do so.
Rule 26(f)(2) and (f)(3) require lawyers to think through, at the outset of
the suit, both timing and substantive issues. At the outset of the suit, the
lawyer must have thought through, for example, whether she needs more
than the 10 depositions allowed by the Rules, or more than the permitted 25
interrogatories. She'll need to know her likely work schedule in other cases
(you'll be juggling a docket of cases for various clients; you don't handle
one at a time) to know when trial can be set. She'll have to predict roughly
how long it will take to conduct discovery, and how much time to prepare
any motions for summary judgment. In addition, Rule 26(f)(3)(D) requires
the lawyer to think about whether the case will require disclosure of
information that may be proprietary or sensitive: if so, the lawyer may need
to ask that the parties agree, or the court impose, a “protective order” under
Rule 26(c) to limit disclosure of that sensitive information. See Chapter 51
for more on protective orders. Electronic discovery must be addressed,
including the obligation to preserve it and how it will be produced.
There's a lot to think about and to report on. As a result, some district
courts have adopted forms for these reports. Generally they ask a series of
questions that force the lawyers to address all of the issues required by the
Rule, and others. On the next page is a simplified version of one used in an
Ohio district court, which is posted as a pdf file on the court's webpage,
which you can find at http://www.ohsd.uscourts.gov/pdf/abreppar.pdf. It's
set up so that the lawyers can fill in the blanks, and submit it to the court
after signing it. A lot of it relates to dates and deadlines. As we will see, the
court or parties use the report to generate a signed Rule 16 scheduling order,
which we'll look at next.
It is common for attorneys to agree on most of the basic deadlines and
other issues. To the extent they disagree, however, they include in the report
a statement of each party's position on the disputed issue so that the district
court can resolve the dispute when it enters the scheduling order, which is
the major reason a conference is required.
3. Why
The parties are required to meet to confer because they must prepare and
submit a report to the district court to help the court formulate a scheduling
order that will state each major deadline for the lawsuit. If a party fails to
participate in good faith “in the development and submission of a proposed
discovery plan,” the court may order the party or its attorney to “pay to any
other party the reasonable expenses, including attorney's fees, caused by the
failure.” FRCP 37(f).

B. The Rule 26(f) Conference's Impact

on Discovery
Until the 2015 amendments, no discovery could be served prior to the
Rule 26(f) conference. Then and now, the parties can exchange their
required initial disclosures before the Rule 16(b) conference. Parties then
and now must exchange their required initial disclosures within 14 days of
the Rule 26(f) conference, unless they agree on another time or during the
Rule 26(f) conference a party raises the objection that initial disclosures are
not appropriate in the particular case. We'll come back to that.
The 2015 amendments permitted a party to serve requests for production,
21 days after a party has been served, to that party by any other party or by
that party on any other plaintiff or party who has also been served. FRCP
26(d)(2). However, the requests are considered to be served only as of the
date of the Rule 26(f) conference. Id.
As soon as the parties have completed the Rule 26(f) conference then,
unless they've agreed otherwise, discovery can commence. FRCP 26(d)(1).
Thus, these events — exchange of initial disclosures, holding of the Rule
16(b) conference, and commencement of formal discovery — can occur in
different orders, depending on the facts, circumstances, and desires of the
parties.

C. The Rule 16(b) Conference and

Order
The first thing a district court faced with a new lawsuit is required to do
is receive the parties' Rule 26(f) report and issue a scheduling order under
Rule 16(b). That Rule 16(b) scheduling order will set out the critical phases
of the entire lawsuit, including when discovery can commence and end,
when parties must be joined, and when trial will be held.
A formal conference is not required, and often the court will simply take
the dates identified by the parties in their Rule 26(f) report and adopt them
in its order. Because most suits, perhaps 95%, resolve without trial, and
many without any judicial involvement whatsoever, typically the dates are
of little practical importance to the court itself. But, the fact that the court
enters an order setting deadlines is important for reasons we'll see in a
moment. On the next page, is a real, fairly typical Rule 16(b) scheduling
order from a case that a friend of mine litigated recently:
 D. Exchange of Required Initial
Disclosures
As noted above, the parties may exchange initial disclosures before or
after the Rule 16(b) conference. It simply turns on whether the conference
is held before the parties have agreed to make the exchanges.
1. Exemptions
Rule 26(a)(1)(B) exempts only certain cases from initial disclosure
requirements, and they are not common. It bears emphasizing that one thing
does not constitute an exemption: Another party's failure to make initial
disclosures does not excuse compliance. In other words, an opposing party's
failure to properly make initial disclosures does not justify a tit-for-tat
holding back. FRCP 26(a)(1)(E).

2. When
Unless the parties agree or the court orders otherwise, the parties must
make their initial disclosures within 30 days of the Rule 26(f) conference.
FRCP 26(a)(1)(D). If a party is joined to the suit after the Rule 26(f)
conference occurred, that party must make its initial disclosures within 30
days after being served or joined, or as agreed, or as ordered by the court.
Id.

3. What: The Good Stuff Reasonably Available

to the Party
Four specific categories of information and documents are subject to the
initial disclosure requirement. The first two are designed to force each party
to disclose the information and documents that will support its claims or
defenses — the good stuff, so far as that party is concerned. The second two
categories are included to facilitate settlement. The four categories are:
(A) each witness likely to have discoverable information that the
disclosing party may use to support its claims or defenses, unless
solely for impeachment, identifying the subjects of the information;
(B) documents that the disclosing party may use to support its claims
or defenses, unless solely for impeachment;
(C) a computation of damages or documents allowing for a
computation to be done; and
(D) any insurance policy that may cover a claim.
FRCP 26(a)(1)(A). The list is fairly straightforward. A party who fails to
make a proper initial disclosure can be barred from introducing the
evidence at trial, as shown below.
4. Supplementation
If after making its initial disclosures, a party learns of information that is
covered by Rule 26(a)(1), under some circumstances it must “supplement”
its disclosures. FRCP 26(e)(1). Specifically, “in a timely manner,” a party
must supplement or correct their initial disclosures to include information
acquired after the disclosure was made if “ordered to do so or if the party
learns that in some material respect the disclosure or response is incomplete
or incorrect, and if the additional or corrective information has not
otherwise been made known to the other parties during the discovery
process or in writing.” FRCP 26(e)(1). Thus, the obligation to supplement
does not arise if the parties have already received the information through
discovery or some other written correspondence.
However, if the parties have not received the information and the party
fails to supplement its disclosure, then the information that was not timely
supplemented can be excluded from evidence, and the court can impose
other sanctions under Rule 37(c)(1). Thus, when in doubt, supplement.

5. Sanctions and Exclusion From Evidence

for Violating the Rule
The teeth of the initial disclosure requirement come from two rules.
First, an attorney or party must sign the required disclosures. FRCP 26(g)
(1). The signature certifies that “to the best of the signer's knowledge,
information, and belief, formed after a reasonable inquiry, any disclosure is
complete and correct as of the time it is made.” Id. A court may sanction a
lawyer or party who, without substantial justification, signs a disclosure that
violates that certification. FRCP 26(g)(3).
Second, if a party without substantial justification fails to disclose
information covered by Rule 26(a)(1), then “unless the failure was
substantially justified or is harmless” the party is prohibited from using that
evidence at trial. FRCP 37(c)(1). In addition, other sanctions, including
having the court tell the jury what happened, are available. Id.
Thus, it is important for a party to timely make required initial
disclosures, particularly because initial disclosures largely cover the “good
stuff.” If a party fails to do so, then it won't be able to use the good stuff at
trial unless the failure was substantially justified or the nondisclosure was
harmless. As an extreme example of both behavior and sanction, the court
in Advance Financial Corp. v. Utsey, 2001 WL 102484 (S.D. Ala. 2001),
entered a default judgment as a sanction against a plaintiff whose lawyers
had failed to make initial disclosures despite repeated orders to do so.

E. Amending a Deadline in a Rule 16

Scheduling Order: Good Cause Plus
If the parties have agreed on the dates in the scheduling order, why does
it matter if the court enters an order? The answer to that question comes
from Rule 16(b)(4): “A schedule may be modified only for good cause and
with the judge's consent.” That sentence is important for a number of
reasons, many of which don't come through in typical civil procedure book.
First, if the scheduling order sets a deadline, that deadline is the one that
applies, not the deadline that would apply under another rule. So, for
example, under Rule 15(a) a party has the right to amend certain pleadings
within a certain number of days. If the court enters a scheduling order,
however, then the parties' right to amend ends when the scheduling order
says so, not when stated by Rule 15(a).
Second, if a party needs to do something covered by a scheduling order
after the deadline for doing so has passed, then the party must establish
good cause to modify the order and seek the court's approval. So, for
example, a party who wants to amend its pleading after the deadline in the
scheduling order has passed must show the court in a motion that there is
good cause to move the deadline. To establish good cause, at minimum
movant must show that it could not have met the deadline with reasonable
diligence. Grochowski v. Phoenix Constr. Co., 318 F.3d 80, 86 (2d Cir.
2003). As a consequence, if the movant knew the facts necessitating the
amendment before the deadline, good cause is usually not found. Parker v.
Colombia Pictures Indus., 204 F.3d 236, 241 (2d Cir. 2000); Sosa v.
Airprint Sys., Inc., 133 F.3d 1417, 1419 (11th Cir. 1998) (Rule 16(b)
precludes modification “unless the schedule cannot be met despite the
diligence of the party seeking the extension”). Some district courts consider
several factors, including “1) the explanation for the failure to move timely
for leave to amend; 2) the importance of the amendment; 3) the potential
prejudice in allowing the amendment; and 4) the availability of a
continuance to cure such prejudice.” Hawthorne Land Co. v. Occidental
Chem. Corp., 431 F.3d 221, 227 (5th Cir. 2006); U.S. v. First Nat'l Bank of
Circle, 652 F.2d 882 (9th Cir. 1981) (similar list of factors, and explaining
that if denial of modification would result in injustice but allowing it would
not substantially injury the other party nor inconvenience the court, the
modification should be permitted).
Although general rules are difficult to come by, if the amendment to a
pleading, for example, is sought while discovery is still open and does not
create the need, for the sake of fairness and completeness, to re-take
depositions, courts will generally allow the amendment. E.g., Liberty Mut.
Ins. Co. v. Midwest Cold Storage & Ice Corp., 1989 WL 21155 (D. Kan.
1989). This approach reflects the general principle in the Rules to resolve
disputes on the merits unless prejudice will arise.
A district court has discretion to deny a motion to modify a scheduling
order. NAS Elecs., Inc. v. Transtech Elecs. Pte Ltd., 262 F. Supp. 2d 134,
150 (S.D.N.Y. 2003). Thus, the district court's decision is not likely to be
overturned on appeal.

1. Amending Pleadings: Good Cause to Amend or

Bias To Allow the Amendment?
Requiring a party seeking to amend a scheduling order show good cause
is the opposite approach of Rule 15(a), which generally requires
amendments to pleadings to be allowed unless the opposing party
establishes that the party seeking the amendment acted in bad faith, had a
dilatory motive, or there is another similar reason to deny amendment. See
Chapter 41. So, the mere absence of prejudice, bad faith, futility, or similar
factors by the party seeking the amendment is not sufficient to show good
cause. Carnite v. Granada Hosp. Group, Inc., 175 F.R.D. 439, 448
(W.D.N.Y. 1997). More is required by Rule 16(b) than Rule 15(a).
Suppose the party seeking amendment establishes good cause. Is that
enough, given that Rule 15(a) has its own separate requirement? In other
words, does Rule 16 supplant, or supplement, any requirement in Rule
15(a)? Courts hold that Rule 16 supplements showings required in other
rules, but does not replace them. Thus, a party who establishes good cause
to modify a scheduling order to change the deadline for amending a
pleading must also establish that leave to amend should be granted under
Rule 15(a). S&W Enterp., L.L.C. v. Southtrust Bank of Alabama, NA, 315
F.3d 533, 536 (5th Cir. 2003); Sosa, 133 F.3d at 1419 (“because Sosa's
motion to amend was filed after the scheduling order's deadline, she must
first demonstrate good cause under Rule 16(b) before we will consider
whether the amendment is proper under Rule 15(a).”). The reason is that if
a party could ignore a Rule 16(b) deadline by simply complying with the
requirements of the other rule, then the scheduling order adds nothing.
Sosa, 133 F.3d at 1419.
To sum up, if a party fails to comply with a deadline in a scheduling
order, that party must show good cause to modify the scheduling order and
meet the requirement imposed by any other rule. What this means is that the
further into a suit one goes, the harder it is to make changes. We'll see,
when we get to the final required disclosure that comes in the form of the
Final Pretrial Order, that it becomes even more difficult to make changes
because that disclosure occurs just before trial.
Think about the big picture: at the start, it is easy to amend pleadings, but
over time it becomes more difficult. In large part this is because, until
discovery is underway, there's been little reliance by one party on the other
side's disclosures. The further into discovery, and the closer to trial, the
greater that reliance has been, and thus the harder it is to change courses.

Checkpoints

Can you describe what each party must disclose as part of its “initial disclosures”?
Can you list what the parties must consider during their Rule 26(f) conference?
Can you explain the impact of the Rule 16 scheduling order on subsequent action in the case, and on
amendment of pleadings?
Chapter 44

Adjudication or Resolution
of Claims Before Discovery

Adjudication Before Discovery Roadmap

This Chapter identifies the ways that a claim can be adjudicated without discovery,
including through default judgment, voluntary dismissal (often because a case settled quickly
after filing), involuntary dismissal, pursuant to Rules 12(b)(6), 12(c), or by way of summary
judgment.

This Chapter shows the common ways claims are resolved without
discovery and, often shortly after suit is filed. First, if a party fails to
respond to the claims against it, the suit may be subject to entry of default
judgment. Second, a party against whom a claim is asserted can contend
that the pleading fails to state a claim upon which relief can be granted. (If
the plaintiff asserted only one claim in its complaint, this can result in
dismissal of the entire suit; if it contains more than one claim is asserted,
then this can result in dismissal of a claim, but not the suit.) Third, many
cases settle shortly after suit is filed and without much, if any, discovery.
Finally, but only in extreme circumstances, a court can strike a party's
pleading as a sanction.

A. Default Judgments
Rule 55 allows a party to move for entry of default judgment if it has
asserted a claim against a party which “has failed to plead or otherwise
defend, and that failure is shown by affidavit or otherwise . . .” FRCP 55(a).
Rule 55 “tracks the ancient common law axiom that a default is an
admission of all well-pleaded allegations against the defaulting party.” Vt.
Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 246 (2d Cir. 2004).
1. The Three Steps to Obtain a Default Judgment
There are three steps to determine whether entry of default judgment is
proper. First, there must be an act of default: a party must have failed to
“plead or otherwise defend” against a claim against it. Second, the party
seeking default judgment must obtain entry of default. Third, the party
seeking default must have default judgment entered. So, for example, if a
defendant fails to respond to service of a complaint, the plaintiff may move
for entry of default and then seek a default judgment.
It “is important to keep straight default language.” N.Y. Life Ins. Co. v.
Brown, 84 F.3d 137, 141 (5th Cir. 1996). “A default occurs when a
defendant has failed to plead or otherwise respond to the complaint within
the time required by the Federal Rules.” Id. “An entry of default is what the
clerk enters when the default is established by affidavit or otherwise.” Id.
“After defendant's default has been entered, plaintiff may apply for a
judgment based on such default. This is a default judgment.” Id. A party
against whom default has been entered may move to set it aside; after
default judgment is entered, the party must move to vacate the default
judgment.

a. An Act of Default: The Failure to “Plead or

Otherwise Defend”
i. Failure to Plead
Failing “to plead” means failing to file a pleading that is required to be
filed in response to a pleading stating a claim. For example, if a defendant
fails to file, that defendant has failed to “plead.” Defaults are available
against a party who was required to file a responsive pleading, but did not
do so (and did not “otherwise defend,” which we'll get to next).
While a defendant's failure to answer is the classic example, Rule 7(a)
also requires these pleadings (or a Rule 12 motion) be filed in response to
other pleadings:
A plaintiff's reply to a defendant's counterclaim;
A co-party's failure to file an answer to a crossclaim; and
A third-party defendant's answer to a third-party complaint.
Thus, a plaintiff, a defendant, a third-party plaintiff, or a party that has
asserted a counter- or cross-claim may move for default if the opposing
party did not plead or otherwise defend the claim. See FRCP 55(a).

ii. What Constitutes “Failure to Otherwise Defend”?

Default is not authorized if the party against whom it is sought, though
failing to file a pleading, nonetheless has “otherwise defended” itself.
Failure to “otherwise defend” means the party against whom entry of
default is sought failed to take affirmative action sufficient enough to
constitute “defending” itself. Wickstrom v. Ebert, 101 F.R.D. 26, 33 (E.D.
Wis. 1984).
It includes defending the merits. For example, the phrase “otherwise
defend” includes making any motion under Rule 12. Id. Likewise, it
includes a party who moved for summary judgment, instead of answering
or filing a pre-answer motion. See Rashidi v. Albright, 818 F. Supp. 1354,
1356 (D. Nev. 1993) (“If challenges less strenuous than those pleading to
the merits can prevent the entry of default, clearly a summary judgment
motion which speaks to the merits of the case and demonstrates a concerted
effort and an undeniable desire to contest the action is sufficient to fall
within the ambit of ‘otherwise defend’ for purposes of Fed.R.Civ.P. 55.”).
Less merits-oriented conduct has also been held to constitute “otherwise
defending.” See de Antonio v. Solomon, 42 F.R.D. 320 (D.C. Mass. 1967)
(denying motion for entry of default because defendant's obligation to plead
or otherwise defend was satisfied by his assertion of privilege against self
incrimination even though allegations of complaint were not addressed);
Pikofsky v. Jem Oil Co., 607 F. Supp. 727, 734 (E.D. Wis. 1985) (filing
motion to transfer venue under Section 1404(a)); N.Y. Life Ins. Co. v.
Brown, 84 F.3d 137, 141 (5th Cir. 1996) (participating in court conferences
and simply engaging in conversation and exchanging letters with opposing
counsel). Obviously, the less activity by the party against whom entry of
default is sought, the more likely it is that the party will not have “otherwise
defended” itself.
If a party has failed to plead or otherwise defend, then the party that
asserted the claim may move for entry of default. Otherwise, it may not.

b. Entry of Default and Setting Entry of Default

Aside
 i. Entry of Default
If an opposing party has defaulted, the party seeking default judgment
can request the clerk of the court to make an “entry of default” on the
docket sheet (a list of activities in the case that the clerk keeps which,
nowadays, is on-line). Breuer Elec. Mfg. Co. v. Toronado Sys., Inc., 687
F.2d 182, 185 (7th Cir. 1982). Typically, the party asking for entry of
default files a notice with the clerk along with an affidavit establishing that
the opposing party was served with the pleading but failed to plead or
otherwise defend itself. See FRCP 55(a). The clerk must enter default if the
notice establishes that the other party has not plead or otherwise defended.
Although the judge can also enter default, the clerk is authorized to do so
and action by the judge is not required.
Entry of default cuts off the defendant's right to contest liability on the
claims asserted against it. Greyhound Exhibit Group, Inc. v. E.L.U.L. Realty
Corp., 973 F.2d 155, 160 (2d Cir. 1992). The right to a jury also ends,
unless a statute specifically preserves it. In re Dierschke, 975 F.2d 181, 185
(5th Cir. 1992) (“It is universally understood that a default operates as a
deemed admission of liability. It is also clear that in a default case neither
the plaintiff nor the defendant has a constitutional right to a jury trial on the
issue of damages.”).

ii. Setting Aside Entry of Default

A party against whom default is entered may move the court to set it
aside. The court may set it aside if the movant shows good cause. FRCP
55(c). The courts interpret “good cause” liberally, and the threshold to set
aside entry of default is quite low. Effjohn Int'l Cruise Holdings, Inc. v. A &
L Sales, Inc., 346 F.3d 552, 563 (5th Cir. 2003). In deciding whether good
cause exists, courts consider whether the moving party has a meritorious
defense, whether it acted with reasonable promptness, the personal
responsibility of the defaulting party (as opposed to its counsel), the
prejudice to the party who obtained entry, whether there was a history of
dilatory action, and the availability of sanctions less drastic than default.
Payne v. Brake, 439 F.3d 198 (4th Cir. 2006). Although there is no express
deadline to move to set aside entry of default, the motion must be made
with reasonable promptness. Id.

c. Entry of Default Judgment and Vacating Entry

 i. Can the Clerk or Must the Judge Enter Default
Judgment?
A party who obtains entry of default then may move for entry of default
judgment. A party against whom entry is made may not appeal it. Ackra
Direct Mktg. Corp. v. Fingerhut Corp., 86 F.3d 852, 855 (8th Cir. 1996).
Unlike entry of default, which can be performed by the clerk, under some
circumstances the court must enter default judgment.
The limits on the clerk's authority to enter default judgment are important
because if the clerk cannot enter default judgment, then the party against
whom default is sought must be given the protections of Rule 55(b)(2),
which may require that notice and a hearing be afforded before default
judgment is entered. See Key Bank v. Tablecloth Textile Co., 74 F.3d 349,
352–53 (1st Cir. 1996). This table shows when the clerk may, or the judge
must, enter default judgment:

Thus, the clerk can enter judgment only if the claim is for a “sum
certain” and the defaulting party neither filed a responsive pleading nor
“appeared.” Whether the defaulting party has filed a responsive pleading is
straightforward: if, for example, the defendant has filed an answer, the clerk
cannot enter default judgment. The other two limitations on the ability of a
clerk to enter default are less black and white.

(a) What Is a “Sum Certain”?

If the damages sought are not for a “sum certain” or a “sum that can be
made certain by computation” the clerk cannot enter default judgment.
FRCP 55(b)(1), (2). Damages are “sum certain” when they are for a
liquidated amount. Unliquidated damages may only be awarded without a
hearing if the record accurately reflects the basis for award by detailed
affidavits establishing the necessary facts. Carter v. Macon Manor NRC,
LLC, 2007 WL 951419 (M.D. Ga. 2007). This table summarizes it:

(b) What is an “Appearance”?

If the defaulting party has “appeared,” the clerk may not enter default
judgment. Courts tend to liberally construe what constitutes an
“appearance.” Lutomski v. Panther Valley Coin Exchange, 653 F.2d 270,
271 (6th Cir.1981) (defendants contacted plaintiffs and made clear that the
damages sought were excessive); H.F. Livermore Corp. v.
Aktiengesellschaft Gebruder Loeppfe, 432 F.2d 689, 691 (D.C. Cir. 1970)
(exchanges between parties were normal effort to see if dispute could be
settled and neither party doubted that suit would be contested if efforts
failed); Dalminter, Inc. v. Jessie Edwards, Inc., 27 F.R.D. 491, 493
(S.D.Tex.1961) (defendant contacted plaintiff's counsel by letter). However,
the issue of what constitutes an “appearance” can be fact intensive. Cf.
Port-Wide Container Co. v. Interstate Maint. Corp., 440 F.2d 1195 (3rd Cir.
1971) (unlike H.F. Livermore, court held that oral and written
communications between counsel for the parties in an effort to settle a
dispute did not constitute an appearance).

ii. Vacating a Default Judgment

As noted above, the issues of setting aside entry of default, as opposed to
setting aside entry of default judgment, are distinct. While “good cause” is
enough to set aside entry of default, after default judgment is entered the
defaulting party must move to set it aside under Rule 60(b). FRCP 55(c).
Rule 60(b) is discussed in Chapter 59.

B. Voluntary Dismissal
 Rule 41(a) provides:
an action may be dismissed by the plaintiff without a court order by
filing (i) a notice of dismissal before the opposing party serves either
an answer or a motion for summary judgment, or (ii) a stipulation of
dismissal signed by all parties who have appeared. Unless the notice or
stipulation states otherwise, the dismissal is without prejudice. But if
the plaintiff previously dismissed any federal or state court action
based on or including the same claim, a notice of dismissal operates as
an adjudication on the merits.

1. Voluntary Unilateral Dismissal of a Claim by a

Party
a. Time for Filing Notice of Dismissal
Under Rule 41(a)(1), until the defendant files a motion for summary
judgment or an answer, the plaintiff has an unfettered right to voluntarily
dismiss its complaint and do so without prejudice to refile it. No court
approval is required: “Other than to determine, should the question arise,
whether an answer or a motion for summary judgment has in fact been filed
prior to the filing of a notice of dismissal, a court has no function under
Rule 41(a)(1)(A)(i).” D.C. Electronics, Inc. v. Nartron Corp., 511 F.2d 294,
298 (6th Cir. 1975).
Suppose a defendant files a Rule 12(b)(6) motion before the plaintiff
moves to voluntarily dismiss. If the Rule 12(b)(6) motion includes materials
beyond the pleadings that are not excluded by the court, does this unfettered
right to dismiss extinguish? Although there is some minor disagreement,
the more principled conclusion is that, so long as the notice of dismissal is
filed before the district court notifies the parties that it will convert the Rule
12(b)(6) motion into one for summary judgment, it does not become a
motion for summary judgment that terminates a plaintiff's right to voluntary
dismissal under Rule 41(a)(1)(A)(i). Marques v. Federal Reserve Bank of
Chicago, 286 F.3d 1014, 1017 (7th Cir. 2002) (plaintiffs had an absolute
right to voluntary dismissal, even though defendant filed a motion to
dismiss that was later converted to a motion for summary judgment on the
same day the plaintiffs filed a notice of voluntary dismissal, where the trial
court did not convert the motion to dismiss into a motion for summary
judgment until after the plaintiffs' notice of voluntary dismissal was filed).
Cf. Swedberg v. Marotzke, 339 F.3d 1139, 1142–45 (9th Cir. 2003) (a
motion to dismiss for failure to state a claim upon which relief can be
granted supported by extraneous materials cannot be regarded as a motion
for summary judgment until a court converts the motion by indicating it
will not those materials from consideration, and so such a motion will not,
at the time it is served, preclude voluntary dismissal).

b. Impact of Filing a Notice of Dismissal

The filing of a notice of voluntary dismissal divests a court of jurisdiction
to proceed further:
Rule 41(a)(1) is the shortest and surest route to abort a complaint when
it is applicable. So long as plaintiff has not been served with his
adversary's answer or motion for summary judgment he need do no
more than file a notice of dismissal with the Clerk. That document
itself closes the file. There is nothing the defendant can do to fan the
ashes of that action into life and the court has no role to play. This is a
matter of right running to the plaintiff and may not be extinguished or
circumscribed by adversary or court. There is not even a perfunctory
order of court closing the file. Its alpha and omega was the doing of
the plaintiff alone. He suffers no impairment beyond his fee for filing.
Am. Cyanamid Co. v. McGhee, 317 F.2d 295, 297 (5th Cir.1963). The court
cannot consider motions pending in the case when the notice is filed. See
Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 409 (11th Cir. 1999)
(“Voluntary dismissal [under Rule 41(a)(1)(i)] normally may precede any
analysis of subject matter jurisdiction because it is self-executing and moots
all pending motions, obviating the need for the district court to exercise its
jurisdiction.”).

2. Only one Voluntary Dismissal Without Prejudice

Rule 41(a)(1)(B) provides that unless the notice or stipulation of
dismissal states otherwise, voluntary dismissal is without prejudice —
unless the plaintiff previously “dismissed any federal- or state-court action
based on or including the same claim. . . .” So, a plaintiff gets one voluntary
dismissal without prejudice; the second time, dismissal is with prejudice.

3. Dismissal by Stipulation of the Parties

 The parties may voluntarily dismiss by filing a signed stipulation of
dismissal by filing a stipulation of dismissal signed by all parties who have
appeared. FRCP 41(a)(1)(A)(ii). This often happens after the parties settle a
case, a process discussed later in this Chapter. While a properly stipulated
dismissal under Rule 41(a)(1)(A)(ii) is self-executing and does not require
judicial approval, Aamot v. Kassel, 1 F.3d 441, 445 (6th Cir. 1993), a court
may, “exercising its inherent powers . . . look behind [a settlement] to
determine whether there is collusion or other improper conduct giving rise
to the dismissal.” U.S. v. Mercedes-Benz of North Am., 547 F. Supp. 399,
400 (N.D. Cal.1982).

a. Dismissal After Answer or Summary

Judgment or Without
All Parties' Consent: Court Approval Required
If voluntary dismissal without court approval is unavailable, then Rule
41(a)(2) applies:
Except as provided in Rule 41(a)(1), an action may be dismissed at the
plaintiff's request only by court order, on terms that the court considers
proper. If a defendant has pleaded a counterclaim before being served
with the plaintiff's motion to dismiss, the action may be dismissed over
the defendant's objection only if the counterclaim can remain pending
for independent adjudication. Unless the order states otherwise, a
dismissal under this paragraph (2) is without prejudice.
If the parties agree and file a stipulation of dismissal, then the court is
divested of jurisdiction even if it does not approve the stipulation. See
Hester Indus., Inc. v. Tyson Foods, Inc., 160 F.3d 911, 916 (2d Cir.1998).
However, if all parties do not agree, then the court has discretion on
whether to grant a motion for voluntary dismissal. “The basic purpose of
Rule 41(a)(2) is to freely permit the plaintiff, with court approval, to
voluntarily dismiss an action so long as no other party will be prejudiced.”
Versa Prods., Inc. v. Home Depot, USA, Inc., 387 F.3d 1325 (11th Cir.
2004). Thus, the key inquiry is whether dismissal will result in prejudice in
addition to the prospect of a second lawsuit. See id.

C. Involuntary Dismissal with Prejudice

 for Violating Rules or Orders
Rule 41(b) provides:
If the plaintiff fails to prosecute or to comply with these rules or a
court order, a defendant may move to dismiss the action or any claim
against it. Unless the dismissal order states otherwise, a dismissal
under this subdivision (b) and any dismissal not under this rule —
except one for lack of jurisdiction, improper venue, or failure to join a
party under Rule 19 — operates as an adjudication on the merits.
Rule 41(b) authorizes two very distinct forms of involuntary dismissal.
First, Rule 41(b) is the basis on which district courts dismiss claims for
lack of subject matter or personal jurisdiction, improper venue, or for
failure to join an indispensable party. Such dismissals are involuntary in
that the plaintiff does not seek them. They are “without prejudice” —
meaning the plaintiff can refile the claim because dismissal is not based on
the merits of the claim.
Second, Rule 41(b) permits a court to dismiss claims or cases with
prejudice — meaning the claim cannot be refiled — “for failure of the
plaintiff to prosecute or to comply with these rules or a court order. . . .”
Although the Rules read as if involuntary dismissal can occur only upon the
motion of the defendant, the a court may sua sponte involuntarily dismiss a
claim. See Link v. Wabash R.R., 370 U.S. 626, 630 (1962). A violation of
Rule 11 can also permit a court to involuntarily dismiss with prejudice. See
Chapter 44.
However, dismissal under Rule 41(b) is “a harsh remedy to be utilized
only in extreme situations.” Theilmann v. Rutland Hospital, Inc., 455 F.2d
853, 855 (2d Cir. 1972). Typically courts consider all circumstances
including: “(1) whether the party's failure is due to willfulness, bad faith, or
fault; (2) whether the adversary was prejudiced by the dismissed party's
conduct; (3) whether the dismissed party was warned that failure to
cooperate could lead to dismissal; and (4) whether less drastic sanctions
were imposed or considered before dismissal was ordered.” U.S. v. Reyes,
307 F.3d 451, 458 (6th Cir. 2002). “Although no one factor is dispositive,
dismissal is proper if the record demonstrates delay or contumacious
conduct.” Id.
In addition, a court has discretion to dismiss a complaint where the
plaintiff failed to diligently prosecute the case. A court contemplating
dismissing under Rule 41(b) for failure to prosecute must consider: “[1] the
duration of the plaintiff's failures, [2] whether plaintiff had received notice
that further delays would result in dismissal, [3] whether the defendant is
likely to be prejudiced by further delay, [4] whether the district judge has
take[n] care to strik[e] the balance between alleviating court calendar
congestion and protecting a party's right to due process and a fair chance to
be heard . . . and [5] whether the judge has adequately assessed the efficacy
of lesser sanctions.” Alvarez v. Simmons Mkt. Research Bureau, Inc., 839
F.2d 930, 932 (2d Cir. 1988).

D. Dismissal of a Claim Based Upon a

Motion Under Rules 12(b)(6) or 12(c)
As we explored in Chapter 34, a claim can be dismissed involuntarily
without any discovery to the extent it fails to state a claim upon which relief
can be granted. However, a grant of a dismissal under Rule 12(b)(6) or
12(c) is not viewed as a Rule 41(b) involuntary dismissal, which is
reviewed for abuse of discretion, but is instead reviewed de novo. Ajifu v.
Int'l Ass'n. of Machinists & Aerospace Workers, 205 Fed. Appx. 488 (9th
Cir. 2006).

E. Settling the Case

It is common for parties to settle disputes promptly after a plaintiff files
suit. If so, defendants typically require the plaintiff dismiss the claims with
prejudice (i.e., so that res judicata precludes refiling the claim) and require
the plaintiff to “release” the claims (and more). A release provides
additional protection to a defendant. As we will see in Chapter 60, the law
of res judicata is often unsettled in some areas, or provides less protection
to a defendant than it may want. As a result, parties often include in their
settlement agreements “releases” whereby the parties agree not to raise
claims not just arising out of or related to the dispute, but to claims that are
unknown and even vaguely connected to the dispute. Releases are governed
by state law, and it often requires specific words be used to release certain
types of claims.

Checkpoints
Can you identify the steps to obtain a default judgment, and when the court, as opposed to the clerk,
must be involved?
Can you describe when a plaintiff may take voluntary dismissal without impact on their claim? When
voluntary dismissal will bar their claim?
Can you describe when involuntary dismissal is proper?
Chapter 45

The Foundations of Choice

of Law in Federal Court

Foundations of Choice of Law Roadmap

This Chapter explains that one consequence of our Republican form of government is that
each State has autonomy to enact laws as it sees fit, and the federal government has the power,
to the extent authorized by the States in the Constitution to do so, to do the same.

A. Federal Power is Limited

Federal power is limited. Remember that unless the States delegated
power to the federal government to enact laws about a subject, power over
that subject is “reserved” to the States under the Tenth Amendment. As a
consequence, a federal statute, called the Rules of Decision Act, 28 U.S.C.
§ 1652, provides that State law controls unless federal law requires
otherwise:
The laws of the several States, except where the Constitution or treaties
of the United States or Acts of Congress otherwise require or provide, shall
be regarded as rules of decision in civil actions in the courts of the United
States, in cases where they apply.
We saw that the States gave Congress power to set up courts to decide
disputes between citizens of different States; they did not give Congress the
power to displace state law governing those disputes. A court has only
subject matter jurisdiction — power — to decide the state claim.
The question of whether state or federal law applies turns on whether the
claim arises under an area that is reserved to the States under the
Constitution? If so, then state law must apply, since the States have not
delegated to the federal government the power to regulate that area. So, a
federal court deciding a state claim should apply state law “except where
the Constitution or treaties of the United States or Acts of Congress
otherwise require or provide . . .”

B. States Authorized Congress to Create

Federal District Courts
Think for a moment about the grant in Article III by the States to
Congress to create courts. The States empowered Congress to create lower
federal courts. Does that mean the States also delegated to Congress power
to enact rules of procedure to govern proceedings in federal court? When
deciding a state law claim, does the federal court apply federal procedural
law, or state procedural law? If so, what's “procedure” and what's not?

C. Limits on State Power

Not only is Congress's power limited by the Constitution to enact laws
covering certain subject matter, each state's power is also limited, but more
so by geography than subject matter. Because each State is equal and
sovereign, its laws end at its borders. Consider also that it is quite common
for the laws of one state on a subject to vary, often dramatically, from those
of another state on exactly that same subject. Thus, it may be that a certain
set of facts, if proven, would constitute a claim upon which relief can be
granted under the laws of one state, but not under the laws of another. As
one court:
For example, the meaning of the concept of negligence and subsidiary
concepts such as duty of care, foreseeability, and proximate cause
varies amongst the states. Furthermore, as Defendant catalogued in its
appendices, many states vary the limitations period under which a
cause of action for negligence or products liability may be brought.
The same can be said for the limitations periods governing breach of
warranty claims.
Drooger v. Carlisle Tire & Wheel Co., 2006 WL 1008719 (W.D. Mich.
2006).
As a result, “choice of law” principles have arisen that dictate which
state's law will apply to a particular claim, if the claim is governed by state
law. Just because a suit is filed in Delaware state court doesn't mean
Delaware law will apply to the state law claims. Instead, as we'll see, the
Delaware state court must conduct a “choice of law” analysis to identify
which state's laws apply to each claim before it. Each state not only has
different substantive law, often they use different “choice of law” rules to
determine which state's law applies to a particular claim.
Now envision a federal court in Delaware that happens to have subject
matter jurisdiction over a state law claim because of diversity jurisdiction.
That federal court must also apply the “choice of law” principles of the
forum state — the state in which the federal court sits, here, Delaware — to
decide which law applies, so that the same law is applied to a state law
dispute whether it's filed in state, or federal, court in Delaware.

D. The Complexities of Choice of Law

Those principles — that federal law only applies to areas in which the
States granted the federal government power to act; that when the matter is
one of state law, each state's law often varies; and that it may be awkward
for a federal court to have to follow state procedural law — create several
issues, which are interrelated at some levels. Viewed broadly, there are at
least three issues to keep in mind, though each presents a number of sub-
issues.
First, what law should a federal court apply when deciding state law
claims? We'll see that when deciding state law claims, a federal court must
apply state law, generally the law of the state in which it sits. So, a New
Hampshire federal district court deciding a claim for breach of a New
Hampshire contract will look to the substantive law developed by New
Hampshire state courts in deciding that claim.
Second, what if a case is filed in a federal court in a state with no real
connection to the dispute? Suppose, for example, that a plaintiff files a suit
in the defendant's home state because the plaintiff could not obtain personal
jurisdiction over the defendant in the plaintiff's home state. If all of the
activities that led to the suit occurred in the plaintiff's home state, doesn't
that indicate that the plaintiff's state's law, not the defendant's state's law,
ought to apply? How does a federal court determine which state's law to
apply to a particular dispute? We'll see that a federal district court must
apply the same choice of law principles as does a state court in that State —
with some narrow exceptions involving cases where venue has been
transferred.
Third, although state substantive law will control in deciding state
claims, federal courts will apply their own rules of procedure (e.g., the
FRCP). Only when an issue is one of substance — not procedure — must a
federal court follow state law. Usually that distinction is clear; sometimes it
is not.

Checkpoints

Can you explain the reasons why state substantive law will generally apply unless a federal statute
creates the claim?
Do you understand why it is necessary to identify which state's law applies to a particular claim, and
that there are constitutional limitations on the ability of a state to have its law apply to a claim?
Chapter 46

Vertical and Horizontal

Choice of Law

Choice of Law Roadmap

This chapter explains “vertical” choice of law: how to determine which law — state or
federal — applies to civil lawsuits filed federal court, and the resulting need to distinguish
between substantive and procedural law.
This chapter also explains “horizontal” choice of law: how federal courts determine, if state
law applies to an issue, which state's law applies, including resulting need to understand how
the transfer of a case from one federal district court to one in a different state affects that
analysis.
Finally, this chapter explains how federal courts determine the content of state law,
including when they have to do so by “guessing.”

A. Federal Law and Federal Procedure

Apply
to Claims Arising Under Federal Law
Like almost everything in civil procedure, it is important to analyze
issues on a claim-by-claim basis. It may be that federal law will apply to
one claim, and state to another.
If a federal court is adjudicating a claim created by federal law, the
analysis is straightforward: the court applies federal substantive law since
federal law created the claim, and it also applies federal procedural rules.
Why?
The fact that federal substantive law applies to claims created by federal
law — or “arising under” federal law — should be pretty straightforward.
In the Constitution, States granted to Congress the power to enact laws
concerning certain subjects. If Congress has done so by creating a claim,
the States have allowed federal law to control. So, if Congress has created a
federal claim, federal law applies.
With respect to procedure, the analysis is a little murkier. The States in
the Constitution gave Congress power to create federal courts. Implicit in
the power to create courts is the power to regulate what happens in them.
Put another way, creating federal procedure is implicit in the power to
create federal courts in the first place. Congress recognized this. Not only
are there statutes that create federal district courts, and the appellate courts,
but Congress enacted the Rules Enabling Act, 28 U.S.C. § 2072, to
“enable” the Supreme Court to adopt (and amend) what we now call the
Federal Rules of Civil Procedure. Section 2072 provides in pertinent part:
“The Supreme Court shall have the power to prescribe, by general rules, the
forms of process, writs, pleadings, and motions, and the practice and
procedure of the district courts and courts of appeals of the United States in
civil actions. . . .”
Thus, federal courts have power — indeed, the mandate — to apply
federal substantive law and federal procedure when adjudicating a claim
that arises under federal law. When federal law creates the claim, the
analysis is pretty simple.

B. State Substantive Law, but Federal

Procedural
Law, Applies to Claims Arising Under
State Law
Remember that federal courts have diversity subject matter jurisdiction.
That means they can decide claims created by state law. Claims adjudicated
in federal court but created by state law require more analysis, including the
need to distinguish between “substantive” law and “procedural” law. There
are three things to keep in mind in this analysis.
First, remember that the States in the Constitution gave Congress only
limited power to legislate, and only Congress, not the courts, can enact
statutes: federal courts have no power to legislative, only to decide disputes
between parties. So there is only a limited body of federal substantive law
and it is almost created by federal statutes, not “federal common law.” In
fact, courts often say there is no “general federal common law.” So, if a
claim is created by state law, state law is going to control.
 Second, federal courts have limited power to adjudicate state law claims.
(As we saw, original subject matter jurisdiction exists generally only if a
claim is between citizens of different states and the amount in controversy
exceeds $75,000, but there can be supplemental jurisdiction over closely
related claims or a state law claim that is closely related to a federal claim.)
Logically, the law that applies to a claim should not be different simply
because a state law claim happens to fall within one of these categories and
so is being heard in federal court. The outcome should be the same, whether
the claim is in state or federal court.
Third, and this is where it gets messy, as explained above, implicit in the
power to create federal courts is the power to create rules governing the
proceedings in those courts. This is where the difficult issues exist: if a state
law is arguably substantive and it conflicts with federal procedural law,
what happens? How do courts distinguish between state procedural law —
which will not apply in federal court — and state substantive law, which
will if the claim arises under state law?

1. The Erie Decision: State Substantive Law

Applies
to State Law Claims Being Adjudicated
in Federal Court
It may sound axiomatic: if state law creates a claim, the fact that a federal
court happens to have jurisdiction to decide the claim should not change the
substance of that state law. The law has evolved, slowly, to that point. Most
casebooks spend some time explaining how we got here. We will be brief.
The story begins with the Rules of Decision Act, 28 U.S.C. § 1652,
which provides: “The law of the several states, except where the
Constitution or Acts of Congress otherwise require or provide, shall be
regarded as rules of decision in civil actions in the courts of the United
States, in cases where they apply.” This statute seems to say that state law
applies unless a federal statute or the U.S. Constitution says otherwise.
A long time ago, however, the Court held that the Rules of Decision Act
did not require federal courts to follow state common law decisions,
meaning opinions by state judges. Swift v. Tyson, 41 U.S. 1 (1841). Instead,
the Swift Court held that federal judges could ignore state judicial opinions
— state common law — when deciding what state law required, and they
only had to follow state statutes (and certain other narrow “types” of “law”)
because only statutes and those other narrow types were the “law.”
As a result, of Swift, for nearly 100 years, federal judges applied “federal
common law” when there was no state statute on a particular issue, and in
doing so held that this federal law could differ from, and even contradict,
state law. Thus, and for a long time, if a claim created by state common law
claim was being adjudicated in federal court, a judge could apply different
“federal law” to it than would a state court judge deciding the same claim in
state court.
Think about that for a second. Whether a plaintiff could win or lose a
claim would depend upon whether the defendant was from a different state
and the amount in controversy exceeded the statutory minimum!
Things had gotten that weird when the issue finally returned to the Court
in Erie v. Tomkins. It took nearly 100 years, but the Erie Court overruled
Swift. In Erie, the plaintiff, Tompkins, had been walking along a railroad
track in Pennsylvania when a train operated by Erie Railroad injured him.
Tompkins brought a state law claim. To prevail on that claim under
Pennsylvania state law, he was required to allege and prove that the railroad
had acted willfully or wantonly. To avoid this, Tompkins sued in federal
district court, basing subject matter jurisdiction on diversity. Because under
Swift the federal judge was not required to follow state common law, the
district court relied on opinions from federal courts applying “federal
common law” to railroad accidents. Federal common law only required
Tompkins plead and prove lack of due care by the railroad, an easier
standard for the plaintiff than willful or wanton misconduct. Tompkins
obtained a jury verdict and judgment in his favor based on that lower
federal standard.
On appeal, the Supreme Court overruled Swift and replaced it with what
seemed to be a simple rule: a federal court deciding a state claim must
apply state law, whether created by a court (in a judicial opinion
announcing the common law) or a legislature (in a statute). In justifying its
overruling of Swift, the Court noted the “mischief” that Swift had created,
including the fact that out-of-state citizens like Tompkins were able to
invoke federal law, which could be more favorable than the law applicable
to an in-state plaintiff. The Court also recognized that the States had not
delegated to Congress the power to create general law on anything — just
to enact statutes on limited subjects — and yet under Swift the federal
courts were creating their own common law on topics far beyond the
limited power of Congress. The Erie court concluded that Swift constituted
an “unconstitutional assumption of powers by courts of the United States
which no lapse of time or respectable array of opinion could make us
hesitate to correct.”
Erie thus enforces the limited power that the States gave to the federal
government to make law. Erie ensures that the Tenth Amendment is
followed. Another core policy Erie furthers is that which forum decides the
claim — state or federal court — should not be outcome determinative.
Guaranty Trust Co. v. York, 326 U.S. 99, 108–10 (1945). Thus, the York
Court held that a state statute of limitations that would bar a claim if the
claim were brought in state court also bar it if the claim were adjudicated in
federal court. Id.
To sum up, if state law creates the claim, state substantive law will apply
to that claim in federal court. The happenstance that the federal judiciary
has subject matter jurisdiction over the claim for one of the three reasons
above will not change the substance of the law.

2. The Federal Power to Regulate Federal

Procedure
and its Limitations
Again, as part of the Constitutional power given Congress to create
“inferior” courts, it is “necessary and proper” (in terms of the Constitution)
for Congress to adopt rules to regulate proceedings in those courts. Thus,
“Erie and its offspring cast no doubt on the long-recognized power of
Congress to prescribe housekeeping rules for federal courts.” Hanna v.
Plumer, 380 U.S. 460 (1965).
This Constitutional power to create procedure governing in federal court
is codified in the Rules Enabling Act. To ensure that only procedure, not
substance, is regulated, Section 2072(b) of the Rules Enabling Act
provides: “Such rules shall not abridge, enlarge or modify any substantive
right.” Thus, so long as a federal procedural rule does not affect
“substantive rights” created by state or federal law, it should apply in
federal court.
This creates a dichotomy between procedural rules and substantive law.
Federal procedural law applies so long as it does not affect a substantive
right. This can be an issue where a claim is created either by federal or state
law, but it is a much more common problem where state law creates a claim
because state substantive law applies, but federal procedural law applies.
How do we distinguish between state “substantive” and “procedural” law,
since only state “substantive” law applies? And, what if there is a conflict
between state substantive law and federal procedural law, since federal
procedural law should apply in federal court?
Often, of course, there is no doubt whether some state law is procedural
or substantive. State common law defines the elements of a state common
law tort. The level of misconduct required by state law in Erie, as a result,
was substantive: under state law willful and wanton misconduct was
required, and that is substantive. Likewise, state law that provides the
requirements to form a valid contract necessary to support a breach of
contract claim is substantive.
But there is grey at the dividing line between “substance” and
“procedure.” That uncertainty must be resolved if federal procedural law
would affect a “substantive” right. The approach taken by the Court in
trying to distinguish substance from procedure has varied over the years.
Accordingly, the development of the law is important to grasp the current
state of the law and to see the remaining ambiguities.
For a time after Erie, the Court seemed to encourage courts to defer to
state law in doubtful circumstances. For example, in Guaranty Trust Co. v.
York, 326 U.S. 99 (1945), the plaintiff's state law claim was barred by New
York's statute of limitation; the plaintiff, however, filed in federal court and
argued that Erie created a distinction between substance and procedure, and
that the statute of limitation was procedural, not substantive, and so federal
law applied, and under federal law, the claim was not time-barred. The
Guaranty Trust Court held that it was “immaterial” under Erie whether the
statute was characterized as substantive or procedural. It characterized Erie
as expressing “a policy that touches vitally the proper distribution of
judicial power between State and federal courts.” In essence, Guaranty
Trust sought to make it so that the result of a state law claim filed in federal
court should be substantially the same as if it had been filed in state court.
The distinction between substance and procedure was recast as to whether
the state law “concerns merely the manner and the means by which a right
to recover, as recognized by the State, is enforced, or whether such statutory
limitation is a matter of substance in an aspect that alone is relevant to our
problem, namely, does it significantly affect the result of a litigation for a
federal court to disregard a law of a State that would be controlling in an
action upon the same claim by the same parties in a State court?” Id. The
Court held that the state statute of limitation controlled adjudication of the
state claim in federal court.
Whether, or not, the distinction between “manner and mode” and
“substance” is exactly the same line drawn in Erie, the Guaranty Trust
Court suggested that even what arguably was state procedural law could
control in federal court if failing to do so would change the result. So, a
state statute that simply said precluded corporations that hadn't paid state
taxes from suing applied in federal courts. It is hard to characterize that sort
of statute as “substantive.” E.g., Woods v. Interstate Realty Co, 337 U.S.
535 (1949).
The story becomes more complicated because of a related, but distinct,
line of cases involving the validity of the Federal Rules of Civil Procedure.
Specifically, later in Hanna, the Court considered a state statute that
required that process be served “in hand,” a stricter approach than required
by the federal rules in Rule 4. In Hanna, the plaintiff served the defendant
in a way that was proper under Rule 4, but was not proper under the state
law. Which controlled? The Court stated that under the Rules Enabling Act,
the Rules applied in federal court unless a Rule violated either the terms of
the Rules Enabling Act (because it was substantive, not procedural) or
Constitutional limitations. It then held:
To hold that a [Rule] must case to function whenever it alters the mode
of enforcing state-created rights would be to disembowel either the
Constitution's grant of power over federal procedure or Congress'
attempt to exercise that power in the Enabling Act.
Applying this principle, the Hanna Court held that Rule 4 was a valid
exercise of the Rules Enabling Act, not unconstitutional, and so controlled
despite being contrary to state law.
This means that a federal rule of civil procedure will apply unless it is not
“procedural” but instead “substantive” (or otherwise unconstitutional).
What is “procedure” and so authorized by the Rules Enabling Act? Luckily
it is quite broad: Enactments that are “‘rationally capable of classification’
as procedural rules are necessary and proper for carrying into execution the
power to establish federal courts vested in Congress by Article III, § 1.”
Budinich v. Becton Dickinson & Co., 486 U.S. 196, 199 (1988). As one
court recently explained:
As recognized by the Supreme Court, however, “[c]lassification of a
law as ‘substantive’ or ‘procedural’ for Erie purposes is sometimes a
challenging endeavor.” Gasperini v. Center for Humanities, Inc., 518
U.S. 415, 416 (1996). To aid courts in this “challenging endeavor” the
Supreme Court developed a two-part test in Hanna v. Plumer, 380 U.S.
460 (1965). Under the Hanna test, “when the federal law sought to be
applied is a congressional statute or Federal Rule of Civil Procedure,
the district court must first decide whether the statute is ‘sufficiently
broad to control the issue before the court.’” Alexander Proudfoot Co.
World Headquarters L.P. v. Thayer, 877 F.2d 912, 917 (11th Cir.
1989). If the federal procedural rule is “sufficiently broad to control
the issue” and conflicts with the state law, the federal procedural rule
applies instead of the state law. See Cohen v. Office Depot, Inc., 184
F.3d 1292, 1296 (11th Cir.1999) (explaining that “if the state law
conflicts with a federal procedural rule, then the state law is procedural
for Erie / Hanna purposes regardless of how it may be characterized
for other purposes”). If the federal rule does not directly conflict with
the state law, then the second prong of the Hanna test requires the
district court to evaluate “whether failure to apply the state law would
lead to different outcomes in state and federal court and result in
inequitable administration of the laws or forum shopping.” Cohen, 184
F.3d at 1297 (citing Hanna, 380 U.S. at 468)
Burke v. Smith, 252 F.3d 1260 (11th Cir. 2001). The following have been
held to be procedural issues, and so are governed by federal law:

An issue addressed by the Federal Rules of Civil Procedure. Com/Tech

Commn. Tech., Inc. v. Wireless Data Sys., Inc., 163 F.3d 149, 150–51 (2d
Cir.1998) (“it is settled that the [FRCP] applies regardless of contrary state
law.”).
What constitutes a “final decisions of the district courts” in terms of the
final judgment rule in 28 U.S.C. § 1291. Budinich v. Becton Dickinson &
Co., 486 U.S. 196, 199 (1988).
An issue addressed by the Federal Rules of Evidence. Legg v. Chopra, 286
F.3d 286, 289 (6th Cir. 2002).
Questions of appealability of district court orders. Cohen v. Beneficial
Industrial Loan Corp., 337 U.S. 541 (1949).
Thus, unless a Rule is not “procedural,” it will control. But, what if a
federal procedural rule is contrary to state law so that the rule, if applied,
would alter substantive rights?

3. Where We Are Today

a. A Validly Enacted Rule Will Control Absent
State Substantive
Law to the Contrary
As just shown, over time Hanna and Erie have come to stand for the
proposition that federal courts when deciding a state law claim must “apply
state substantive law and federal procedural law.” Gasperini v. Ctr. for
Humanities, Inc., 518 U.S. 415, 427 (1996). Likewise, a rule adopted under
the Rules Enabling Act will control, unless there is state substantive law to
the contrary. What has happened is that over time courts have concluded
that Erie helps maintain the limited delegation of authority in the
Constitution to the federal government to create substantive law, while
Hanna helps to ensure that the federal government's power to create federal
courts included the necessary ability to enact rules of procedure, but not
more than that.
Taken together, they both reflect the straightforward principle that there
is no reason why a claim “which concededly would be barred in the state
courts . . . should proceed through litigation to judgment in federal court
solely because of the fortuity that there is diversity of citizenship. . . .”
Walker v. Armco Steel Corp., 446 U.S. 740, 752 (1980). Although rare,
these issues continue to arise today. See, e.g., Moreland v. Barrette, 2006
WL 3147651 (D. Ariz. 2006) (holding that state statute that required that a
doctor provide an affidavit before a medical malpractice claim could be
filed did not conflict with the Rules and controlled in federal court because
affidavit's absence would preclude a state court from trying the claim);
Caiola v. Berkshire Med. Ctr., Inc., 2004 WL 2607805 (N.D.N.Y. 2004)
(state law requiring medical malpractice plaintiff to first submit its claim to
a medical “tribunal” controlled under Erie and did not conflict with the
Rules).
The key is to focus on what law creates the claim. At that point, the
substantive law that creates the claim will control in either state or federal
court, and federal procedural law will apply in all circumstances. If a
federal court's failure to apply state law would change the outcome, then
careful application of Hanna and Erie is required.

B. Determining Which State's Law

Applies and
Then Identifying the Content of that
State's Law
1. Which State's Law Applies?
The building block for understanding horizontal choice of law is
something that you are picking up on in your other classes: state courts
come to different conclusions about what the law is or ought to be. You've
probably seen that states draw the line for proximate cause in tort law in
different places. It may be, consequently, that conduct is actionable as a tort
in one state, but not in another. Also, some states recognize certain torts —
negligent infliction of emotional distress is a good example — which other
states simply do not. So, what might be a tort under one state's laws is not
under another.
Those differences are outcome determinative!
It is also important you recognize that it is common for suits to be filed in
one state, but for another state's law to control the claim. For example, a
defendant who engaged in wrongdoing in New Mexico might have to be
sued in his state of domicile, say Arizona, because personal jurisdiction is
lacking in New Mexico. As noted at the outset of this chapter, even on
common issues, common law (and statutes, for that matter) varies
enormously between states. It is very possible that a set of facts will state a
claim for a plaintiff under one state's law but not under another's. Long ago,
courts held that simply because a suit was filed in a particular state did not
mean that the law of that state where the suit was filed controlled. Georgia
law won't apply to a car wreck that happened in New York simply because
the plaintiff files the suit in Georgia.

a. Choice of Law in Federal Courts: The General

Rule
 How do federal courts figure out which state's law applies to a state law
claim? A federal court must apply the same substantive law as would a state
court where the federal court sits. Thus, the first question is to ask which
state's law would the forum's state courts apply to the claim.
Instead of simply applying the law of the forum state, courts apply what
are called “choice of law” principles. Although they vary, most states apply
the law of the State with the most “significant contacts” to the claim. So, a
state court would ask: what state has the most significant contacts with this
claim? That state's law applies, no matter where the suit was filed. So, in
our car wreck hypo above, a car wreck that occurred in New York will be
governed by New York law — whether the suit is filed in state court in
Georgia, New York, or any other state's court.
With an exception that applies when a case is transferred by a federal
court out of the state in which it sits — cases that we'll get to in a moment
— a federal court must apply the same approach to legal rules governing
choice of law as do the state courts in the forum where the federal court sits.
Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941). So, a federal
district court in Georgia must apply Georgia's choice of law rules to
determine whether the laws of New York, New Mexico, or some other state
apply to a claim. In theory, therefore, the fact that a claim is filed in federal
court will make no difference.

b. Choice of Law After Transfer of Venue to a

Different State
What happens when a federal court transfers a case to a district in
another state? Does the transferee court apply the choice of law rules — the
rules that determine which law applies to an interstate dispute — of the
transferor's state, or its own state?
You ask: why would it matter that different states have different law
about choice of law? After all, the tort occurred “somewhere” and that
place's law ought to apply. Most of the time, that is true: there's not going to
be much disagreement about what law applies in a car wreck case. But what
law applies where, for example, a defendant in Missouri mails fraudulent
statements to a plaintiff in Texas about land in Iowa? The “most significant
contacts” analysis might lead to different answers; and, the law of one state
might be highly more favorable than another.
 Just as they disagree about tort law itself, courts in different states
sometimes use different choice of law rules to determine which law applies
to an inter-state dispute, and sometimes they just take slightly different
approaches — even though using the exact same approach. As a
consequence, sometimes, a good plaintiff's lawyer might be able to pick a
forum that has the “right” choice of law rules, so that the law of a state that
is favorable to the plaintiff will be chosen over less favorable law. Thus, it
can matter greatly how a court determines the applicable law after transfer.

i. Choice of Law After a Section 1404(a) Transfer to a More

Convenient Forum
If a court transfers a case under Section 1404(a), what happens? Does the
transferee court pretend like it's in the transferor's state for the purpose of
determining which state's law applies?
Yes. In Van Dusen v. Barrack, 376 U.S. 612 (1964), the Court held that
the transferor's state's law, including the transferor's state's choice of law
rules, applied in the transferee court. The court reasoned that because the
transferor forum was proper, the fact that the case was transferred for the
convenience of parties and witnesses should not change which law applied
to the dispute. Note that this does not mean, necessarily, that the laws of the
transferor's state will apply: it means that the transferee court will look to
the laws of the transferor state to determine which laws apply. That's true
whether the plaintiff or defendant seeks transfer.
In some states the statute of limitation is “procedural” and not
“substantive” and so a plaintiff could file suit in that state, and have the
court apply that state's longer statue of limitations to a claim that is
otherwise governed by another state's law. Once the plaintiff gets the
favorable law selected, can it then transfer the case to the state where it's
most convenient, under section 1404(a), and still get the benefit of the
longer statute of limitations?
The answer is “yes” and it happens more often than you might think. For
example, in Ferens et ux. v. John Deere Co., 494 U.S. 516 (1990), the
plaintiff's hand was injured by a John Deere combine. In an attempt to
avoid a statute of limitations defense, the plaintiff filed two suits. In his
home state of Pennsylvania, he filed a complaint with two claims that were
not barred by limitations. But, he had other claims that were, under
Pennsylvania's law, time-barred. So, he filed a second suit in Mississippi,
because he knew that the Mississippi federal court would follow
Mississippi's choice of law rules, under which it would apply Mississippi's
longer statute of limitations because it was procedural. As a result, the
claim would not be barred, even though Pennsylvania law provided all the
substantive law to the claim.
Then, to finish this remarkable lawyering feat, plaintiff's counsel sought
under Section 1404(a) to transfer the Mississippi case to Pennsylvania so
that it could be consolidated with the case with the two other claims.
Plaintiff's counsel believed that under Van Dusen the Pennsylvania court
would apply the same choice of law rules as the Mississippi court, and end
up holding that the claim filed in Mississippi was not barred because
Mississippi's procedural statute of limitation would control.
The defendant did not oppose the transfer (why would it?). After transfer,
the Pennsylvania district court rejected the plaintiff's attempt and held that
Pennsylvania's shorter statute applied, and refused to apply Mississippi law.
The Court, however, ultimately reversed, reasoning that Erie required that
federal courts apply to a transferred case the same law that would have been
applied by a state court in the transferor forum. So, the Court held that the
Pennsylvania federal court had to apply Mississippi's statute of limitation to
the claim, and so the claim was not time-barred.
Thus, no matter which party invokes transfer under Section 1404(a), the
transferee court must apply the same law and choice of law principles that
the state courts in the transferor forum would have applied. The transferee
court, in other words, has to pretend like it is in the transferor's forum for
this purpose. If the transferor court would apply Mississippi's statute of
limitations, so must the transferee. Remember that under Section 1404(a)
the plaintiff's choice of venue was proper; the law shouldn't change simply
because there was also a more convenient, proper venue.

ii. Choice of Law After a Section 1406(a) Transfer for

Improper
Venue (or Lack of Personal Jurisdiction)
The rule of Van Dusen does not apply to transfers made under Section
1406(a), from an improper venue to a proper one, or from a court lacking
personal jurisdiction to one with personal jurisdiction. Instead, “following a
transfer under § 1406(a), the transferee district court should apply its own
state law rather than the state law of the transferor district court.” Jackson v.
West Telemarketing Corp. Outbound, 245 F.3d 518 (5th Cir. 2001).
So for example, if a plaintiff files suit in a California district where venue
is improper, or personal jurisdiction lacking, and the case is transferred
under Section 1406(a) to a Texas federal court, the Texas court would apply
Texas's choice of law rules to determine what law governed the dispute, not
California's. Id. The result would be the opposite if the transfer had been for
convenience under Section 1404(a).

2. How Does a Federal Court Determine What

State Law
is — the “Content” of State Law?
Once a court identifies which state's law applies to a claim, it must
determine what state law provides. How does it do so?
First, a court should look to decisions of the supreme court of the state
which law applies to the dispute. If that state supreme court has decided the
issue, its decision must be followed. If it has not, then the court must follow
decisions of the state's intermediate appellate courts absent a strong
showing that the state supreme court would have ruled differently. Lawler v.
Fireman's Fund Ins. Co., 322 F.3d 900, 903 (6th Cir. 2003).
If there is no definitive answer, the federal district court must guess —
what is called the the “Erie guess.” The court should do its best to predict
what the state's supreme court would find the law to be if it were faced with
the issue. Under some circumstances, a federal court can “ask” the state
supreme court for its answer!

3. Constitutional Limitations on Imposition

of Substantive State Law
The question of whether a state can assert personal jurisdiction over a
defendant turns on the defendant's contacts with the state. See Chapter 6;
see also Chapter 7 (discussing in rem jurisdiction). Does the fact that a state
court has personal jurisdiction mean that it can apply its law to the dispute,
regardless of the connection between the dispute and the state?
There are Constitutional limitations arising from the Due Process Clause
and the Full Faith and Credit Clause on the power of a court to apply its
state's substantive law to a dispute even if it has personal jurisdiction over
the defendant. The Court in Allstate Ins. v. Hague, 449 U.S. 301 (1982),
held that if “a State has only an insignificant contact with the parties and the
occurrence or transaction, application of its law is unconstitutional.” See
also Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985) (holding court
could not apply Kansas law to leases that had no connection to Kansas even
in a nationwide class action). On the other hand, states may constitutionally
apply their procedural law to disputes in the forum. Sun Oil Co. v.
Wortman, 486 U.S. 717 (1988).

D. Appellate Review
An appellate court reviews a district court's determination of which law
applies de novo. Olympic Sports Prods., Inc. v. Universal Athletic Sales Co.,
760 F.2d 910 (9th Cir. 1985). Likewise, the Erie “guess” is reviewed de
novo, Salve Regina College v. Russell, 499 U.S. 225 (1991), as is a district
court's determination that an issue is “procedural” or “substantive.” Am.
Reliable Ins. Co. v. Navratil, 445 F.3d 402 (5th Cir. 2006).

Checkpoints

Can you describe when Erie requires application of state law?

Can you describe what Hanna held concerning the Rules?
Can you identify when law will be classified as “procedural” as opposed to “substantive”? What
impact does that classification have?
Can you describe how a federal court identifies which state's law applies, either in a case that has, or
has not, been transferred?
Chapter 47

Discovery

Discovery Roadmap
This chapter explains the purpose of discovery and the ways by which the Rules require
lawyers to cooperate and plan the scope and timing of discovery.
This chapter describes the scope of discovery, both in general and as to each method of
discovery.

Before adoption of the Rules, very little information was exchanged

between the parties before trial. Because pleadings were often done in
multiple rounds, some information was disclosed through the process of
pleading, but trial was the principal way that one side learned the full
details of the facts possessed by the other side. Generally, one party did not
learn facts known only to the other party until the witnesses were on the
stand. “Trial by ambush” was not uncommon.
Under the Rules, however, the importance of pleadings has diminished,
since they need only provide notice of the claims and defenses. Remember
that the under Iqbal and Twombly, the Rules require that a plaintiff put very
little information in a complaint: the plaintiff must plead factual material
that, if true, plausibly states a claim upon which relief can be granted. But
recall that, although a plaintiff must have a Rule 11 basis to plead its
allegations, simply because the plaintiff can do so does not mean that there
is no evidence that undermines the allegations; it also does not mean that a
plaintiff cannot violate Rule 11 by pleading an allegation without evidence
to support it. The same is true, of course, for a defendant's answer.
Instead of multiple rounds of pleadings, the Rules now provide multiple
mechanisms — forms of discovery — for each side to learn information
known by the other side, and by third parties. Although parties are free —
within the bounds of ethics — to simply use informal means to gather
information, discovery is the Rules' way to force parties to give up even
damaging information.
Thus, rather than learning the bulk of information at trial or through
informal investigation, parties now learn information from other parties and
non-parties through “discovery.” Because of the discovery rules, trial by
ambush is the exception, not the rule. The thought is that it is better to try
cases on the merits, rather than by last minute evidentiary surprises.
The net effect of discovery is to shift forward from trial the time when
each party should be fully informed of all relevant information bearing on
the parties' claims or defenses. In theory, therefore, discovery should reduce
the time needed to resolve disputes. However, in fact discovery has proven
quite expensive and, although trials are less frequent than they were without
discovery, costs have generally increased, not decreased. The focus of
dispute resolution, however, has shifted from courtroom to discovery
process.
As a consequence, litigators must be very familiar with all aspects of
discovery. Discovery is the process by which facts are gathered. Summary
judgment and trial are the means by which those facts are used in creative
but legitimate ways to tell a story and persuade the judge or jury that
liability should, or should not, be imposed.

A. Purpose of Discovery
As we saw above, as part of the required initial disclosures, shortly after
suit is filed the Rules require parties to disclose information that they will
likely want to use at trial to support their claims or defenses (and other
information, such as damages and insurance) and to do so without a request.
Boiled down, under initial required disclosures, each party must disclose to
the other its “good stuff” — what it will use to support its case or defense.
In discovery, each party is required to produce all relevant evidence — even
evidence that undermines or contradicts allegations needed to prove their
claim or defense — if sought by an opposing party through a proper
discovery request.
Although the Rules create means to discover information from opposing
parties and non-parties, the Rules also limit what can be discovered. All
discovery, for example, is — for the first time — limited to discovering
information that is relevant to a claim or defense. But, even some relevant
information can be protected from disclosure where the costs exceed the
likely benefit of producing the information, or the information is subject to
a privilege, including the attorney-client privilege. Finally, each specific
method of discovery has its own limitations: some forms of discovery can
only be used against parties, for example, not non-parties; other forms of
discovery are limited in number.
Despite eliminating trial by ambush (and so saving costs) and eliminating
multiple rounds of pleadings, discovery is expensive, intrusive, and time-
consuming. See In re Brand Name Prescription Drugs Antitrust Litig., 123
F.3d 599, 614 (7th Cir. 1997) (“Pretrial discovery included the taking of a
thousand depositions and the production of fifty million pages of
documents.”). Think that's an extreme case? It is, but it's not unique. See
Mitzel v. Westinghouse Elec. Corp., 72 F.3d 414 (3rd Cir. 1995) (in a simple
injury case, 5100 attorney hours were spent conducting 19 depositions and
producing 22 linear feet of documents).
Before learning about discovery and related to how much its costs, it is
important to emphasize that litigants do not always have to get information
through formal discovery. Instead, they are generally free to engage in
informal information gathering. For example, a lawyer can discuss an
accident with a non-party witness without having to take that witness's
deposition, and, indeed, a lawyer probably should interview a non-party
witness before noticing that witness's deposition. Instead of taking a
witness's deposition, for example, a lawyer can interview the witness and
obtain a sworn affidavit as to who ran the red light.
While ethical rules limit a lawyer's ability to talk to opposing parties who
are represented by counsel (including, to some extent, current and former
employees of an entity-opponent), generally lawyers are free to learn
information from non-parties. Likewise, lawyers are generally free to use
undercover investigators, to search public databases and the Internet for
factual information that may help to bring or defend a lawsuit. Formal
discovery is an important part of the information gathering process that
lawyers must do, but only a part of it.

B. Party Responsibility for Setting

the Boundaries for Discovery
and Making Initial Disclosures
Disputes between lawyers over the scope of discovery have existed since
discovery became the norm. A lot of judges spent enormous amounts of
time and energy resolving arguments about whether one side was asking for
too much, or the other side giving up too little. As a result, beginning in the
1980s, the Rules were amended to require parties to negotiate their
disagreements more fully before going to a judge. Most disagreements are
resolved by negotiation between lawyers without involving the court
through motion practice. But disputes continued. As a result, the Rules in
2015 were again amended to encourage early judicial management of
discovery and require greater party management of its scope.

C. Greater Judicial Involvement in and

Lawyer
Management of Discovery
The parties' obligations to manage discovery are clear, and recent
amendments require greater, earlier judicial involvement.

1. Each Lawyer Must Participate in the

Rule 26(f) Conference
At the start of a lawsuit, at a Rule 26(f) conference the parties' lawyers
must meet to discuss and agree upon the scope of discovery. See Chapter
42. If have disagreements, they must articulate and submit them promptly
to the court for decision. See id.

2. New Amendment Requires Early, More Judicial

Involvement
The Rules require judges be more proactive in managing discovery than
ever before. The changes are subtle. The rule used to state the court would
enter the scheduling order “after consulting with the parties, attorneys and
any unrepresented parties at a scheduling conference by telephone, mail, or
other means”; but it was changed to delete “telephone, mail, or other
means.” A committee note states that the rule still allows a scheduling order
to be based on the parties Rule 26(f) report without holding an in-person
conference, but emphasizes the court should use “direct simultaneous
communication” to the text of the rule is intended to encourage judges to
participate in direct exchanges with the parties early on in the litigation
process.
 Another change was to shorten the time period for issuing the scheduling
order, from 120 days to 90 days (generally after the first defendant was
served), unless the judge finds good cause for a longer deadline. FRCP
16(b)(2).
A third change was, as pointed out in Chapter 42, to expand what must be
in the Rule 42 report in the first place.
Taken together, the rules as amended are intended to get even more
information to the judge, even earlier in the case, and to get judges more
involved earlier in managing discovery.

3. Each Party Must Make Initial Disclosures

Each party must make its “initial disclosures.” See Chapter 42.

4. A Discovery Request Is Certified as Reasonable

The Rules require parties to take into account the burden that their
discovery requests will impose on the opposing party, and to certify that
each discovery request is reasonable in light of the stakes in the case.
Specifically, Rule 26(g)(1) requires every request for discovery be signed
by a party's lawyer, and the signature certifies that: (A) the request is
consistent with the rules, or at least is not frivolous under them; (B) is not
made for “any improper purpose” including causing harassment,
unnecessary delay, or “needless” increase in litigation costs; and (C) is “not
unreasonable nor unduly burdensome or expensive, considering the needs
of the case, prior discovery in the case, the amount in controversy, and the
importance of the issues at stake in the action.” FRCP 26(g)(1).
These Rules require attorneys to determine before sending a request that
it is reasonable in light of the circumstances in the case. This is intended to
rein in discovery by requiring lawyers to self-police and to not seek
discovery that is unduly difficult to gather given the circumstances of the
case.

5. Lawyers Must Meet and Confer Before Raising

Disputes with the Court, and Must Request a
Conference with the Court Before Filing a
Discovery
Motion
If a discovery dispute arises, the Rules require that the lawyers first
attempt in good faith to resolve their dispute, and — in a new amendment
— to first ask for a conference with the court before filing any discovery
motion. FRCP 37(B).
The Rules are designed to require the lawyers to be reasonable in
discovery, to work without judicial intervention in both in setting the
boundaries and timing of discovery, and to resolve disputes over discovery.

Checkpoints

Can you describe how the Rules require lawyers to cooperate in discovery, and judicial involvement
in managing it?
Chapter 48

Scope of Discovery: Relevancy

and Other Boundaries

Scope of Discovery Roadmap

This chapter explains the basic tools of discovery: requests for production of documents;
interrogatories; requests for admission; and depositions.
This chapter describes how the Rules limit discovery to, at most, “relevant” information.
This chapter also explains how sometimes even relevant information may not be
discovered, either because the usefulness of the evidence is outweighed by the cost to obtain it,
or because the information is protected from discovery because of competing policies
including those embodied in the attorney-client privilege, the work-product doctrine, or
principles of privacy.

Significant amendments were made in December 2015 to those rules

governing discovery. As always, the Rules have express limitations on
discovery — but as amended they are different and seemingly more
restrictive. Those boundaries must be enforced by a party: if the other side
seeks, for example, undiscoverable information, the party from whom that
information is sought must object, or the objection will be waived if the
party tries to assert it later. The same is true even for efforts to discover
information that, while relevant, is not discoverable because it is protected
from discovery by the attorney-client privilege or other doctrines. It is very
easy to waive an objection that the other party is seeking “too much”
information.
The proper way to object to a discovery request that exceeds the scope
authorized by the Rules varies depending on what type of discovery is
being sought (i.e., whether what is sought is documents, or deposition
testimony, for example.). The proper way to object, therefore, is discussed
in connection with how a party must respond to each type of discovery is
being requested. See Chapter 49.
 A. Relevancy to a Claim and
Proportionality
as a Key Limit on Discovery
Since their inception, the Rules have limited discovery to “relevant”
information. “Relevant to what” has undergone recent changes and
sometimes even relevant information is not discoverable.
Until 2000, information was discoverable without court approval if it was
at least “reasonably calculated to lead to discovery of” information that was
“relevant to the subject matter” of the suit.
But in 2000, the rule was narrowed to allow discovery only to
information that was reasonably calculated to lead to discovery of
information that “relevant to a claim or defense” in the suit, and so
narrower than the “subject matter” of the suit. But the rule still permitted
discovery of information that was merely “relevant to the subject matter”
— but only if the party seeking that information showed “good cause” to
allow it. See Sanyo Laser Prods., Inc. v. Arista Records, Inc., 214 F.R.D.
496 (S.D. Ind. 2003) (discussing the 2000 amendment).
Then in December, 2015, the scope of discovery was narrowed in two
ways, and a third change was made that is intended to heighten awareness
of the need for discovery to be “proportional” to a case, and likely will
narrow discovery even if that was not its intent.
First, the amended rule eliminates the 2015 provision which had allowed
a court for good cause to permit discovery of information that, while not
relevant to a claim or defense, was relevant to the subject matter of the suit.
Second, the rule after 2015 no longer states that information is
discoverable if it is “reasonably calculated” to lead to evidence relevant to
the claim or suit.
Third, the 2015 amendment made a change by moving, and re-ordering,
language that had been “buried” in Rule 26(b)(2)(C) to a more prominent
spot. Now the rule more specifically states that a discovery request seeking
information relevant to a claim or defense is not proper unless the request is
also was “proportional to the needs of the case, considering the importance
of the issues at stake in the action, the amount in controversy, the parties'
relative access to relevant information, the parties' resources, the
importance of the discovery in resolving the issues, and whether the burden
or expense of the proposed discovery outweigh its likely benefit.” Fed. R.
Civ. P. 26(b)(1).
This language had existed in earlier rules, but in explaining when
discovery was “unduly burdensome.”
Thus, since 2000 the rules have substantially narrowed the scope of
discovery:

This chapter now takes a closer look at the requirements of the new rule.
First, the information must be “relevant” to a claim or defense. The Rules
do not and have never defined “relevance,” stating instead only that
relevant evidence is discoverable even if it is not admissible at trial. The
Federal Rules of Evidence define “relevant evidence” as “evidence having
any tendency to make the existence of any fact that is of consequence to the
determination of the action more probable or less probable than it would be
without the evidence.” Taken together, then, information is discoverable —
again, even if it will not be admissible at trial — so long as the information
is reasonably likely to lead to evidence that is admissible at trial that makes
the existence of a fact of consequence at trial more or less probable.
A lot of this is beyond your first year civil procedure course, but not all
of it. What facts will matter at trial turns on what claims or defenses are in
the pleadings. A deposition question in a car wreck case asking the
defendant “did you run the red light” obviously goes to a fact that has
consequence at trial, and the defendant's testimony about what he did, or
didn't do, is admissible because the defendant has personal knowledge of
his own action.
When would a question seek information that, while itself is not
admissible, is reasonably calculated to lead to discovery of admissible
evidence? You can't learn the rules of evidence in civil procedure, but you
probably have some idea that “hearsay” is inadmissible. So, for example, a
lawyer could object at trial if a witness were asked, “did someone tell you
whether she saw the defendant run the red light?” However, during a
deposition in discovery, that question would be proper, since it is
reasonably calculated to lead to discovery of the identity of the person who
made that statement, and that person's testimony as to whether she saw the
defendant run the red light would be admissible. So, information is
discoverable even if it is not admissible. The two are related, but separate,
concepts. See Bank of the Orient v. Superior Court, 136 Cal. Rptr. 741 (Cal.
App. 1977) (court held information that would be inadmissible at trial
because it was a “subsequent remedial measure” in terms of the Rules of
Evidence was discoverable).
The casebooks typically use a few cases to illustrate the meaning of
“relevance.” In Davis v. Precoat Metals, 2002 WL 1759828 (N.D. Ill.
2002), for example, the plaintiffs' claim was that the defendant engaged in
unlawful racial and sex discrimination at a particular plant. The court held
that the plaintiffs were entitled to discovery of information that could show
that other employees — besides the plaintiffs — had been discriminated
against. Why was that relevant to the plaintiffs' claim? Because it might
show that any explanation offered by the defendant for its actions was
pretextual: if the defendant had legitimate reasons for its hiring decisions
concerning plaintiffs, why were there so many other instances of
discrimination? The court held the plaintiff was entitled to discover
evidence that would be probative of that point. Cf. Steffan v. Cheney, 920
F.2d 74 (D.C. Cir. 1990) (because judicial review of an administrative
action was limited to the ground upon which it was based, discovery into
conduct that might also have supported administrative action was
irrelevant).
Similarly, in Pacitti v. Macy's, 193 F.3d 766 (3rd Cir. 1999), Macy's
department store worked with producers of the musical “Annie” to locate
the “next Annie” by conducting a star search. The advertisements stated
that the winner would be the star on Broadway in the upcoming production
of Annie. The eventual winner of the search performed in the off-Broadway
road show, but was fired just before the show began its Broadway run. The
girl's parents then sued Macy's, contending that Macy's had intended all
along not to actually let the winner perform on Broadway, asserting several
claims including fraudulent inducement: the plaintiffs contended that
Macy's had a secret deal with the producers by which the winner in fact
would not appear on Broadway. Plaintiffs alleged they relied on the
fraudulent misrepresentation to the contrary. Even so, the district court
denied discovery into communications between Macy's and the producers.
The district court reversed, finding that the information was relevant
because the information that “Macy's possessed when [the girl] relied on its
representations and participated in the Search forms the very basis of
plaintiff's fraudulent misrepresentation claims.”
As noted above, the Rules recently were amended to narrow the scope of
relevance by requiring the information be relevant to a claim or defense,
and not allowing discovery into information relevant to the subject matter,
even with “good cause” for the court to do so. Again, before 2000,
discovery was allowed — without court approval — if the information
sought was relevant to the “subject matter” of the suit, and not only if it was
relevant to a claim or defense. “Relevant to the subject matter” had been
construed “broadly to encompass any matter that bears on, or that
reasonably could lead to other matter that could bear on, any issue that is or
may be in the case.” Oppenheimer Fund, Inc. v. Sanders, 473 U.S. 340
(1978) (emph. added).
What difference does it make that information is discoverable now only
if it is relevant to the claim or defense, as compared to relevant to the
subject matter? It is clear that the amendment was “designed to involve the
court more actively in regulating the breadth of sweeping or contentious
discovery.” In re Sealed Case, 381 F.3d 1205, 1215 (D.C. Cir. 2004).
Beyond that, the courts are disagreeing on the degree of the limitation.
On the one hand, one could read the requirement that the information be
relevant to a claim or defense to mean that discovery cannot be used to
uncover facts that relate to potential claims or defenses, but ones that have
not already been pled. Toms v. Links Sports Mgmt. Group, L.P., 2006 WL
3255865 (W.D. La. 2006) (“Absent an order expanding the scope of
discovery for good cause shown, discovery generally should not be allowed
for the purpose of developing new claims or defenses not already
pleaded.”). On the other hand, courts have rejected that reading. Thompson
v. Dep't of Housing & Urban Dev., 199 F.R.D. 168, 172 (D. Md. 2001)
(stating that it was a mistake to conclude that the 2000 amendment means
that “no fact may be discovered unless it directly correlates with a factual
allegation in the complaint or answer” but recognizing that the amendment
was intended to narrow the scope of discovery “in some meaningful way”).
Other courts have indicated the change is not so great as either end of that
spectrum suggest. See Anderson v. Hale, 2001 U.S. Dist. Lexis 7538 (N.D.
Ill. 2001) (“None of the decisions suggest that amended Rule 26(b)(1) will
bring about a dramatic effect on the scope of discovery).
The third limitation is the “new” proportionality requirement. Thus far,
courts are holding that the movement of the language — from when it
described when discovery was “unduly burdensome” into the rule defining
the scope of discovery — and the slight changes made to the language
when moved, do not change the scope of discovery. One court stated flatly
that the burdens to show “unduly burdensome” under the old rule, or “lack
of proportionality” under the new, “have not fundamentally changed” Carr
v. State Farm Mut. Auto. Ins. Co., 312 F.RD. 459 (N.D. Tex. 2015) (party
objecting to discovery as not proportional must make a specific objection
and come forward with specific information to address, insofar as that
information is available to it, importance of issues at stake in action,
amount in controversy, parties' relative access to relevant information,
parties' resources, importance of discovery in resolving issues, and whether
burden or expense of the proposed discovery outweighs its likely benefit).

B. Sometimes Even a Request for

Information
that is Relevant to a Claim or Defense
and which
is Proportional to the Case is
Objectionable
Sometimes even a request for information that is relevant to a claim or
defense and which is proportional to the case is objectionable. “All
discovery is subject to the limitations imposed by Rule 26(b)(2)(C).” FRCP
26(b)(1). Those limitations include:

Court orders may limit the number of depositions or interrogatories, or the

length of depositions;
Court orders or local rules may limit the number of requests for admission;
Electronically stored information that is not “reasonably accessible because
of undue burden or cost” may not need to be produced absent a showing of
good cause by the party seeking it;
The party opposing the discovery shows that the discovery sought is
unreasonably cumulative or duplicative, or is obtainable from some other
source that is more convenient, less burdensome, or less expensive;
The party opposing the discovery shows that the party seeking the
discovery has had ample opportunity by discovery in the action to obtain
the information sought; or
The party opposing the discovery shows that the burden or expense of the
proposed discovery outweighs its likely benefit, taking into account the
needs of the case, the amount in controversy, the parties' resources, the
importance of the issues at stake in the litigation, and the importance of the
proposed discovery in resolving the issues.

So, for example, even if a party seeks information that is discoverable, if it

is available in another form or duplicates information already known to the
party, discovery can be denied, even though the information is relevant to a
claim or defense.

C. Privilege and Work Product

as Boundaries to Discovery
The attorney-client privilege and work product doctrines both limit
discovery, but one is largely absolute (at least under the Rules) while the
other may be overcome. This section briefly describes both the attorney-
client privilege and the work product doctrine and explains how each serves
as boundaries under the Rules.

1. Privileged Information Is Protected from

Disclosure
Rule 26(b)(1) limits discovery to “any non-privileged matter” that is
relevant to a claim or defense. While this sounds like a party has an
obligation not to ask for privileged information, instead the Rules work
exactly in the opposite fashion: a party must object to disclosing privileged
information, or the objection is waived.
A privilege means the right not to reveal certain information. The term
“privileged” in the Rule has the same meaning in discovery as at trial, and
so is defined by the Federal Rules of Evidence. U.S. v. Reynolds, 345 U.S. 1
(1953). Under the Federal Rules of Evidence, a privilege can arise from
various sources, including the Constitution (e.g., the privilege against self-
incrimination), substantive law, rules of evidence, and “principles of the
common law as they may be interpreted by courts of the United States in
light of reason and experience.” Federal Rule of Evidence 501; see Jaffe v.
Redmond, 518 U.S. 1 (1996) (adopting a federal privilege protecting
psychotherapist-patient communications). State privilege law provides the
scope of any privilege where state law provides an element of the claim or
defense. Id. The attorney-client privilege is a common privilege, and our
sole focus here.
Although there are entire books on the scope of the attorney-client
privilege, only a basic understanding is necessary here. Information is
generally subject to a claim that it is protected by the attorney-client
privilege only if:
(1) the asserted holder of the privilege is or sought to become a client;
(2) the person to whom the communication was made (a) is a member
of the bar of a court or his subordinate and (b) in connection with this
communication is acting as a lawyer; (3) the communication relates to
a fact of which the attorney was informed (a) by his client (b) without
the presence of strangers (c) for the purpose of securing primarily
either (i) an opinion on law or (ii) legal services or (iii) assistance in
some legal proceeding, and not (d) for the purpose of committing a
crime or tort; and (4) the privilege has been (a) claimed and (b) not
waived by the client.
In re Sealed Case, 737 F.2d 94, 98–99 (D.C. Cir.1984) (quoting U. S. v.
United Shoe Machinery Corp., 89 F. Supp. 357, 358–59 (D. Mass. 1950)).
The privilege creates special issues when the client is not a person, but a
business entity such as a corporation: is everyone employed by a corporate
party a “client” for purposes of the privilege? If not everyone, who? The
answer to the question is important because if a communication is not from
or to a “client,” there can be no privilege. Upjohn Co. v. U.S., 449 U.S. 383
(1981) is the oft-cited case analyzing privilege in the context of entities.
The Court reasoned that federal law would recognize a privilege over
communications between an attorney and an employee of a business entity
would be privileged if the employee is someone who is a member of the
“control group” of the company — who can cause the company to act on
the advice — or who gave the information in the course of enabling the
lawyer to give sound advice. Thus, the content of communications (though
not the facts in the communications) from either type of employee may be
privileged if all the elements are satisfied.
A person or party who believes that a party is seeking discovery of
privileged information must object, either by interposing an objection to an
interrogatory or deposition question and not disclosing the privileged
information, or, in the case of requests for production, by producing a
“privilege log” of documents that are withheld from production. These
procedures will be explored more fully in the next chapter. The key thing is
to realize that privileged information is not discoverable but that the party
withholding it has an obligation to object and preserve the privilege.
Privilege may be waived in other ways as well, for example by
intentionally disclosing part of a privileged communication or using it
“offensively” against a party. See Santelli v. Electro-Motive, 188 F.R.D. 306
(N.D. Ill. 1999) (party avoided waiver of psychotherapist-patient privilege
by eliminating any claim for emotional distress damages in sexual
discrimination case). Again, however, the key issue is to recognize how to
claim the privilege, a process that will be discussed in connection with each
form of discovery.

2. Work Product or “Trial Preparation” Materials

Receive Qualified Protection
Suppose litigation is anticipated and defense counsel interviews
witnesses and memorializes their statements in several memoranda, putting
them in his file. Later, in fact, a suit is filed. The information is not
privileged, since it was not communicated between client and attorney. Is
there any protection for it? What if one of the memos reveals the lawyer's
litigation strategies, and includes his impressions on how good each witness
might do at trial?
Before a specific Rule governing this type of litigation materials was
adopted, in Hickman v. Taylor, 329 U.S. 495 (1947), the Court held that
communications could be protected from disclosure even if they were not
privileged because attorneys needed to have a “certain degree of privacy,
free from unnecessary intrusion by opposing parties and their counsel” to
properly prepare a client's case. However, the Court also recognized that
this protection had to give way sometimes, at least as to factual
information: “Where relevant and non-privileged facts remain hidden in an
attorneys' file and where production of those facts is essential to the
preparation of [the other party's] case, discovery may properly be had.”
With that phrase, the court made a narrow limit on protection of work
product: factual information could be had, but only if they were essential to
the other side's case.
Today a rule controls but Hickman influenced the rule. Rule 26(b)(3)
protects work product or trial preparation information from discovery —
even when it is relevant to a claim or defense — but unlike the protection
afforded to privileged communications, the protection granted to some
forms of work product can be overcome under some circumstances:

(3) Trial Preparation: Materials.

(A) Documents and Tangible Things. Ordinarily, a party may not
discover documents and tangible things that are prepared in
anticipation of litigation or for trial by or for another party or its
representative (including the other party's attorney, consultant, surety,
indemnitor, insurer, or agent). But, subject to Rule 26(b)(4), those
materials may be discovered if:
(i) they are otherwise discoverable under Rule 26(b)(1); and
(ii) the party shows that it has substantial need for the materials to
prepare its case and cannot, without undue hardship, obtain their
substantial equivalent by other means.
(B) Protection Against Disclosure. If the court orders discovery of
those materials, it must protect against disclosure of the mental
impressions, conclusions, opinions, or legal theories of a party's
attorney or other representative concerning the litigation.
(C) Previous Statement. Any party or other person may, on request and
without the required showing, obtain the person's own previous
statement about the action or its subject matter. If the request is
refused, the person may move for a court order, and Rule 37(a)(5)
applies to the award of expenses. A previous statement is either:
(i) a written statement that the person has signed or otherwise
adopted or approved; or
(ii) a contemporaneous stenographic, mechanical, electrical, or
other recording — or a transcription of it — that recites
 substantially verbatim the person's oral statement.
FRCP 26(b)(3). Thus, something can be work product if:
(1) it is a document or a tangible thing;
(2) it was prepared in anticipation of litigation; and
(3) had been prepared by or for a party, or by his representative.
Note that only tangible things are protected, not information memorialized
in them. Simply because a witness tells a lawyer a fact which the lawyer
writes down doesn't make that fact “protected”; the document itself is.
Because facts themselves are not protected simply because they are
memorialized in a document by a lawyer in anticipation of litigation, work
product is often misunderstood. In a recent case the district court tried to
clarify the limitations on what is, and is not, work product:
Interrogatories which seek to discover facts regarding an attorney's
mental thought process seek improper work product information.
“Although the work product doctrine is most commonly applied to
documents and things, unjustified disclosure of the opinions or mental
processes of counsel may occur when questions are posed which seek
information at depositions or in interrogatories.” United States v. Dist.
Council of New York City and Vicinity of the United Brotherhood of
Carpenters and Joiners of Am., 1992 WL 208284 (S.D.N.Y. 1992). In
United Brotherhood, the court found,
How a party, its counsel and agents choose to prepare their case,
the efforts they undertake, and the people they interview is not
factual information to which an adversary is entitled. Disclosure
of this information would inevitably teach defendants which
individuals the [plaintiff] considered more or less valuable
witnesses and how it was preparing for trial.
Similarly, in Commonwealth of Massachusetts v. First National
Supermarkets, Inc., 112 F.R.D. 149 (D. Mass. 1986), the court
distinguished between interrogatories seeking discoverable facts and
those seeking attorney work product, finding a “distinction between
asking the identity of persons with knowledge, which is clearly
permissible, and asking the identity of persons contacted and/or
interviewed during an investigation, which is not.” First National, 112
F.R.D. at 152. Likewise, in Morgan v. City of New York, 2002 WL
1808233 (S.D.N.Y. 2002), the court directed plaintiff to answer an
 interrogatory requesting the identity of “every person whom Plaintiff
believes has knowledge of any facts concerning Plaintiff's claims in
this litigation[,]” but not an interrogatory requiring plaintiff to
“[i]dentify every person whom Plaintiff or her agents have contacted,
interviewed or communicated with concerning Plaintiff's allegations in
this case.” See also Seven Hanover Assocs., LLC v. Jones Lang LaSalle
Americas, Inc., 2005 WL 3358597 (S.D.N.Y. 2005) (“Defendant is free
to ask for the names of persons with knowledge of the facts, but it is
not entitled, through plaintiffs, to the identification of who among such
knowledgeable individuals may have been interviewed by plaintiffs'
attorney.”); Donson Stores, Inc. v. American Bakeries Co., 1973 WL
791 (S.D.N.Y. 1973) (striking the clause “including your counsel”
from the interrogatory requesting, “State whether you, including your
counsel, made any investigation regarding any possible violations of
any company policy. . . .”).
Weiss v. Nat'l Westminster Bank, PLC, 2007 WL 1460933 (E.D. N.Y. 2007).
See also ECDC Envtl., L.C. v. New York Marine and Gen. Ins. Co., 1998
WL 614478 (S.D.N.Y. 1998) (“because the work product privilege does not
protect facts in that document (the privilege protects documents, not facts),
the party seeking those facts may obtain them through [means other than
document requests], such as through depositions and interrogatories.”).
Thus, work product does not make facts secret. In addition, some of what
is protected by work product can be discovered. Consistent with Hickman,
Rule 26(b)(3)(B) creates a three-tiered system — (1) factual or “ordinary”
work product, (2) “opinion” work product, and (3) a party or person's own
statement. Only factual work product, not opinion work product, can be
discovered, and it only if the party seeking its discovery makes the showing
required by Rule 26(b)(3)(A).
Thus, Rule 26(b)(3) provides that, even if the party seeking discovery
of information otherwise protected by the work product doctrine has
made the requisite showing of need and undue hardship, courts must
still protect against the disclosure of mental impressions, conclusions,
opinions, or legal theories of an attorney and his agents. Stated
differently, Rule 26(b)(3) establishes two tiers of protection: first, work
prepared in anticipation of litigation by an attorney or his agent is
discoverable only upon a showing of need and hardship; second,
“core” or “opinion” work product that encompasses the “mental
 impressions, conclusions, opinion or legal theories of an attorney or
other representative of a party concerning the litigation” is “generally
afforded near absolute protection from discovery.” Thus, core or
opinion work product receives greater protection than ordinary work
product and is discoverable only upon a showing of rare and
exceptional circumstances.
In re Cendant Corp. Sec. Litig., 343 F.3d 658, 663 (3d Cir. 2003).
It is rare for opinion work product to be discoverable. For example, in
Holmgren v. State Farm Mut. Ins. Co., 976 F.2d 573 (9th Cir. 1992), the
court held that opinion work product was discoverable when “mental
impressions are the pivotal issue in the current litigation and the need for
the material is compelling.” At issue were notes written by State Farm's
adjuster evaluating a claim against its insured, and the suit was a claim by
the insured against State Farm for not settling that claim in good faith.
Thus, the notes reflected an opinion made during litigation, but that opinion
— the amount of liability the insured faced — was critical in the bad faith
suit.

D. Other Boundaries
As noted in Chapter 50, courts generally do not permit a party to discover
facts known to or opinions held by an opposing party's consulting expert.
Finally, Rule 33(d) permits a party responding to an interrogatory request
to provide the raw business information that can lead to the answer to the
interrogatory if “the burden of deriving or ascertaining the answer [to the
interrogatory] is substantially the same for either party. . . .” FRCP 33(d).

E. Enforcing the Boundaries

A party who believes that another party is seeking either irrelevant
information or information that is otherwise undiscoverable must object and
may move for a protective order. See Chapter 51. Conversely, a party who
believes that it is entitled to overcome a boundary — by seeking
information that is relevant only to the subject matter, or which is protected
by the work product doctrine, for example — must file a motion to compel
that information if the opposing party objects.

Checkpoints
Can you explain when information will be relevant to a claim or defense?
Can you identify those circumstances when even relevant information will not be discoverable, and
how a party goes about precluding discovery into relevant information?
What information is protected from discovery by the attorney-client privilege? The attorney-work
product doctrine? When can either protection be overcome, if ever?
Chapter 49

Forms of Discovery

Forms of Discovery Roadmap

This chapter describes the forms of discovery, their limitations, and how lawyers typically
use each.

There are five major forms of discovery: document requests; requests for
admission; interrogatories; requests for physical exams; and oral
depositions. (In addition, the rules allow “depositions on written questions,”
which have a limited but useful purpose.) This chapter explores each form
of discovery.
In a typical case, lawyers use discovery in a fairly predictable order: each
side requests documents from the other side, which once received are put in
chronological order and examined by the recipients' lawyers. Then,
interrogatories, requests for admission, and depositions on written questions
are used for specific purposes (for reasons we'll see below). Finally, lawyers
depose fact witnesses and, then, finally, expert witnesses. We won't analyze
discovery in the order the Rules are in, because examining the discovery
tools in the order they're usually used in will give you a better intuition
about them. Casebooks, however, generally follow the order of the Rules.

A. Requests for Production

of Documents and Things
Typically, but especially in commercial litigation, lawyers first send
“document requests” or “requests for production” to other parties to the
lawsuit in order to require them to produce existing documents, documents
that were created at the time of the events that led to the lawsuit. Generally,
once those documents are produced, then the lawyer who requested the
documents will place them in chronological order. The lawyer can then read
the documents in the order they were created, and thus learn much of the
story of what went on, who was involved, and what issues might arise in the
lawsuit. Particularly in large law firms, young lawyers spend significant
time reviewing documents that have been produced by the other parties to
the suit. At times, document review produces “smoking guns” which
greatly affect the value of a case.
As you can imagine, it can be quite expensive and disruptive to force a
business to rummage through files — including e-mails and other electronic
files (called Electronically Stored Information, or ESI) — to locate
documents that respond to a document request. Lawyers receiving a
document request must examine carefully whether a request is not
proportional, since it can cost a lot to gather and produce documents. This
section next describes how parties send requests and respond to them.

1. Obligations of the Requesting Party

A party wishing to obtain documents from another party to a suit does so
by serving written requests for production. See FRCP 34. The requests must
be signed by an attorney and must include the attorney's name and address,
and the signature of the lawyer constitutes a certification that the request is
proper, as discussed in Chapter 47. As noted in Chapter 47, a request must
seek information relevant to a claim or defense and be proportional. The
amended rules emphasize that a lawyer sending a request must consider the
proportionality requirement in drafting a request. However, a party seeking
information may have no idea how expensive or otherwise burdensome it
will be for the other party to respond. While the parties should discuss these
issues at their Rule 26(f) conference, they may not have done so sufficiently
because they could not then appreciate the issues in the case or difficulties
that would develop during discovery, particularly of electronically stored
information, or ESI.
In practice, what attorneys do in creating requests for production is to put
together a list of descriptions of documents that they believe the other party
might have, and which would either contain or lead to the discovery of
admissible evidence. See the examples below. Obviously, the claims and
defenses and the particular facts determine which kinds of documents might
exist and might be relevant. The rules simply require that the party serving
the requests to set forth the categories of documents “with reasonable
particularity.” FRCP 34(b)(1)(A). If a party wants electronically stored
documents to be produced in a certain way, for example in pdf format, then
it must state the form in the request.

2. Obligations of the Recipient

The Rules give the recipient 30 days or as otherwise agreed to respond to
requests for production. FRCP 34(b)(2); see FRCP 29. During that time, the
party may have a lot of work to do.
The first step is for the lawyer responding to the request to analyze the
document requests to determine if any are not proportional, or otherwise
seek irrelevant or otherwise undiscoverable information. Objections are
subject to Rule 26(g), and must be made only after investigation. See St.
Paul Reinsurance Co. v. Commercial Fin. Corp., 198 F.R.D. 508 (N.D.
Iowa 2000) (requiring lawyer to publish an article on why boilerplate
objections are improper).
If the lawyer has a reasonable basis for this belief, then he can object and
must object to preserve the objection. FRCP 34(b)(2)(B). The 2015
amendments made a significant change to objections. For the first time, if a
party objects it must state whether it is withholding documents on the basis
of that objection. FRCP 34(a)(2)(C). Notice that if the attorney only objects
in part to a request, he must produce documents that are not objectionable.
FRCP 34(b)(2)(C) (“An objection to part of a request must specify the part
and permit inspection of the rest.”) The new rule also requires that, if a
party specifies in a request the format of how it wants ESI produced (e.g.,
pdf, TIFF, etc.), the responding party must make its objection; if the
requesting party does not specify the format, then the responding party must
identify what format it will use. FRCP 34(d).
As a practical matter, to respond to requests, a lawyer will have a
secretary re-type the requests, and beneath them the lawyer will state her
objections. So, for example, a response to one of the requests above might
look like this:

REQUEST: Produce all documents that refer to failures of the widget.

RESPONSE: Defendant objects to this response to the extent it seeks
information covered by the attorney-client privilege or the work
product doctrine. In addition, Defendant objects to producing
documents which refer to any failure of the widget, since the failure in
 this case relates to metal fatigue. Accordingly, documents that refer to
other failures are irrelevant, and also not proportional to the needs of
the case. Subject to and without waiving such objections, Defendant
will produce documents responsive to this request, and is withholding
documents on the basis of this objection. Defendant will produce ESI
in pdf format.

A party must state objections in the response or they are waived. See
Drexel Heritage Furnishings, Inc. v. Furniture USA Inc., 200 F.R.D. 255
(M.D. N.C. 2001) (recognizing that waiver is implicit Rule 34's requirement
that objections be specifically stated). Thus, for example, a party that fails
to include an objection to producing privileged documents waives the right
to withhold such documents from copying and inspection, unless the court
excuses the waiver for good cause shown. Starlight Int'l Inc. v. Herlihy, 181
F.R.D. 494 (D. Kan. 1998) (attorney's negligence is not good cause). As a
result, responses to request for production invariably include objections to
producing privileged or work product information, information that is not
reasonably calculated to lead to discovery of admissible evidence, or
information held by experts which is not otherwise discoverable. Typical
objections to discovery requests include:
The request is non-proportional, over broad, unduly burdensome, or
harassing. This objection is typically proper where a request is not limited
to the claims or defenses in suit by time or subject matter. So, for example,
a document request in the products liability case would be objectionable
where it sought documents concerning widgets that were unrelated to the
widget in suit. A similar objection is that the request seeks information that
is “not reasonably calculated to lead to the discovery of admissible
evidence.”
The request seeks information subject to the attorney-client privilege or
attorney work product doctrine. As a general rule, attorney-client privileged
communications are not discoverable, and attorney-work product can be
discovered only upon special showings. See Chapter 48. As a result, a party
should object to requests for production that seek protected documents. (In
addition, a party withholding documents on the basis of privilege or work
product must prepare a privilege log, as discussed below.)
The request seeks information held by experts but protected from
disclosure by Rule 26(b)(4). As shown below, expert witnesses are subject
to special rules and procedures. A request for production that exceeds those
boundaries is objectionable.
In addition to preparing objections and the written responses, the attorney
must work with the client to use reasonable efforts locate all responsive
documents or electronically stored information. The phrase “documents or
electronically stored information” is broad and includes “writings,
drawings, graphs, charts, photographs, sound recordings, images, and other
data or data compilations — stored in any medium from which information
can be obtained either directly or, if necessary, after translation by the
responding party into a reasonably usable form.” FRCP 34(a)(1)(A). Thus,
it is not just paper documents, but x-rays, e-mail, electronic files such as
Microsoft Word files, pdf files, voicemail recordings, and the like.
This can be quite time consuming, particularly where large corporations
are responding to a request. The recipient of a document request has an
obligation to produce non-objectionable, responsive documents that it has
in its “possession, custody, or control.” FRCP 34(a). Attorneys, therefore,
have an obligation to ensure that their clients search out responsive
“documents” that the client possesses, has custody of, or controls.
What does “possession, custody, or control” mean? The word “control” is
probably the broadest, and it includes all documents that the responding
party has a legal right to access. Searock v. Stripling, 736 F.2d 650, 654
(11th Cir. 1984). Thus, a party must produce not just documents in its actual
possession or custody, but also those that it has the right to control.
Therefore, a document in possession of the agent of a party — including its
attorneys or employees — is within that party's control. For example, a
common issue that arises when a corporation is a party is whether it must
produce documents that are possessed, not by the corporate entity that is
named as a party to the suit, but by a related corporation, such as a parent,
subsidiary, or affiliate. Courts tend to hold that if the corporate party has the
right to access the documents, then they are under its control and must be
produced. E.g., Gerling Int'l Ins. Co. v. Comm'r of Internal Rev., 839 F.2d
131, 140 (3rd Cir. 1988). Absent control, then a subpoena duces tecum must
be served on the affiliated corporation, since a non-party controls the
document. See below.
How much of an effort must the client take to find “documents” that it
possesses, controls, or has custody of? The short answer is a “reasonable”
one. See Chambers v. Capital Cities/ABC, 154 F.R.D. 63 (S.D.N.Y. 1994).
What is “reasonable” obviously turns on the facts of the case. However, the
2015 amendments state that a “party need not provide discovery of
electronically stored information from sources that the party identifies as
not reasonably accessible because of undue burden or cost.” FRCP 26(b)(2)
(B).
As a practical matter, how do lawyers respond to requests for production?
Clients often do not understand that they have an obligation to disclose
documents that contain information that could harm their case. They do
have that obligation and the withholding of responsive information can not
only subject the lawyer and client to sanctions, it can result in the judge or
jury concluding that the party is hiding the truth — that is never a good
thing.
As a result, what generally happens is that a lawyer will first send a letter
to a client who has been served with a set of document requests listing
which categories of “documents” need to be located, and then meet with the
client to discuss where responsive documents might be located. In the
electronic environment, this may include talking to IT personnel to learn
where e-documents are stored or backed-up electronically. Voicemail, e-
mail, and all documents of the usual kind need to be gathered.
Once documents are gathered, the next typical step is to stamp (software
and scanners do it now) each page of each document with its own unique
number, called a “Bates Stamp.” Bates stamping is important because it
gives each page its own unique identifier. Typically, the plaintiff will use
numbers starting with “P” or some other letter indicating the source of the
document, and the defendant will use “D” or some other letter, followed by
a unique number for each document.
After that, lawyers representing the producing party will examine each
page to determine whether, though responsive, the document can be
withheld because it discloses privileged or work product information. (An
objection can be made to production of the whole document, or to a part of
it by “redacting” information that is not discoverable by blacking it out with
a marker or some form of electronic obliteration.) Often when literally read,
document requests will call for production of documents protected by the
attorney-client privilege, work product doctrine, or both. If the producing
party has withheld any responsive documents on the basis of privilege or
work product, the party must not only explicitly state the objection in the
response, but must also prepare what is called a “privilege log.” A privilege
log identifies every document being withheld from production on the basis
that, though responsive to a request for production, it is protected from
disclosure by privilege (or work product). See FRCP 26(b)(5).
A responding party withholding documents on the basis of privilege must
prepare a list of withheld documents — which provides enough information
so that the party seeking the document can fairly assess whether privilege
was properly claimed — and serve that list either along with the response to
the request for production of documents, or later if agreed by the parties.
See Burlington Northern & Santa Fe Ry. Co. v. U.S. Dist. Ct., 408 F.3d
1142, 1147 (9th Cir. 2005). A portion of a typical privilege log might look
like this:

A privilege log includes a statement from counsel identifying Ann Jones

and Bob Smith as attorneys and Susie and Ernie as employees party. These
logs can take many hours to prepare. Young lawyers are often tasked to do
“privilege reviews” of potentially responsive documents so that documents
that can be claimed as privileged can be withheld from production and
identified on a privilege log, as set out above.
The final step for the producing party is to organize the documents for
production: how this must be done turns on whether the documents are
paper or electronically stored. With paper documents, the producing party
can either produce them as they were kept in the usual course of the party's
business or labeled to respond to the requests for production. Rule 34(b)(2)
(E)(i). With respect to electronically stored information, if the requesting
party asked for it to be produced in a certain form, the party must produce it
in that form (unless it objected to doing so); if the request did not specify
the format, then it can be produced either in which it is ordinarily
maintained or in “a reasonably usable form or forms.” Rule 34(b)(2)(E)(ii).
A party need not produce the same ESI in more than one form. Rule 34(b)
(2)(E)(iii).
Why must a party go through all this trouble? Why not just ignore the
document request and keep back the “bad” information (after all, the
“good” information will have been disclosed during as part of the initial
disclosures). First, a party who fails to respond to a request under Rule 34
may be sanctioned, such as precluding the use of evidence at trial, and also
award attorneys' fees to the party that served the unanswered requests.
FRCP 37(a)(3)(B)(iii). Second, the party who served the requests may move
to compel, and if the failure to respond (or an incomplete or evasive
response) was not substantially justified, the party who failed to answer
may also be sanctioned. FRCP 37(a)(5)(A); see below, discussing motions
to compel. If a party believes that a request for production is objectionable,
it must confer with the party that served it and if that does not resolve the
matter, it may file a motion for protection or wait to see if the party moves
to compel production. See FRCP 26(c).
In this regard, a real world note bears emphasizing. Lawyers face
pressure to interpret document requests narrowly or awkwardly to avoid
producing the “smoking gun” or bad documents. In Washington State
Physicians Ins. Exchange & Ass'n. v. Fisons Corp., 858 P.2d 1054 (Wash.
1993), for example, the plaintiff had sued the defendant for injuries
sustained by ingesting a defective medicine. The defendant held back a
document that showed that it knew the medicine was defective by making
evasive objections and doing its best to simply avoid producing the
document even though it was responsive to a request for production. When
it eventually came out, the plaintiff moved for sanctions. The Washington
Supreme Court published an opinion detailing the misconduct. Although
you will be tempted to play these games, don't do so. It's much more fun to
win when you play fair than when you cheat.
The next step is for the producing party to sign and serve its response to
the request for production on each party. FRCP 34(b). The producing party
is not obligated to actually copy and serve the documents. Instead, the
obligation is to make the documents available for copying under reasonable
circumstances. FRCP 34(b). Despite the fact that no such obligation is
owed, in practice if only a few documents are responsive, the producing
party will simply copy and produce them to all parties. However, if a
voluminous number of pages are responsive, then the responding party will
let the other parties come to inspect and designate which, if any, of those
documents they want copied and produced. The producing party may be
required, if the document is in electronic format, to convert it into a
perceivable, reasonably useable form. FRCP 34(b)(2)(E). However, Rule 34
cannot be used to force a party to create a document. Rockwell Int'l Corp. v.
H. Wolfe Iron & Metal Co., 576 F. Supp. 511, 513 (W.D. Pa. 1983).
After receiving responsive documents or copying those that it wants from
all that the party makes available for inspection, the party that served the
requests for production then, as noted above, typically makes a copy of the
documents (in case they get marked up or damaged) and then “chrons” the
copy set, putting the documents into chronological order in order to study
them and determine what happened and who from the other side were
involved in the matter that led to the lawsuit. In that regard, review of the
documents may lead the attorneys to realize that their client has additional
claims or defenses. Further, the documents may reveal which of the other
side's employees are likely to be key witnesses at trial, and so be subject to
a pre-trial deposition. See below. Finally, reviewing the documents will
suggest areas for further inquiry by interrogatory, requests for admission, or
further requests for production.
If during document production a privileged or work product document is
inadvertently produced, then under a recent amendment to Rule 26(b)(5)
(B):
If information produced in discovery is subject to a claim of privilege
or of protection as trial-preparation material, the party making the
claim may notify any party that received the information of the claim
and the basis for it. After being notified, a party must promptly return,
sequester, or destroy the specified information and any copies it has;
must use or disclose the information until the claim is resolved; must
take reasonable steps to retrieve the information if the party disclosed
it before being notified; and may promptly present the information to
the court under seal for a determination of the claim. The producing
party must preserve the information until the claim is resolved.
This new “claw back” provision ostensibly will result in less privilege
waiver through inadvertent production of privileged documents.
If the party that served the requests believes that one or more documents
on the privilege log were not privileged, they can, after conferring with the
party claiming privilege, move to compel production of privileged
documents. The process by which district courts determine whether a
document is in fact privileged often involves the district judge examining
the challenged documents in camera (i.e., without the party seeking their
production present, or the party claiming privilege), so that the judge can
review the document to determine whether it is, in fact, privileged. See
Banks v. Office of Senate Sergeant-at-Arms, 2007 WL 949738 (D. D.C.
2007) (describing role of privilege logs and process of in camera
examination of documents by the court).

3. Obtaining Documents from Non-Parties by Rule

45 Subpoena Duces Tecum
A party to a lawsuit can compel non-parties to produce documents only
by serving the non-party with a “subpoena duces tecum.” See Rules 34(c) &
45(d)(1). The non-party has the same obligations to search for documents,
and the same options in how it will produce them, as a party does. Those
are discussed above.
A non-party can choose to comply with a subpoena. A non-party who
wants to comply with a subpoena subject to some objections must serve a
written response to the subpoena on the party who served it. FRCP 45(c).
For example, a party may be willing to produce documents, but the
subpoena may call for production of privileged documents. The subpoenaed
party may, therefore, serve a written response objecting to the requests for
production to the extent they call for privileged documents, but otherwise
agreeing to produce responsive documents. FRCP 45(d)(2).
If the non-party chooses to comply, either subject to objections or not,
then the non-party must make the documents available for inspection and
copying at a reasonable time and place, or simply produce them. FRCP
45(d)(1). If the lawyers cannot agree, the non-party may move the court to
order that inspection be held at a convenient location, particularly if the
volume of documents or other circumstances makes production at other
locations unduly burdensome. Caruso v. Coleman Co., 157 F.R.D. 344, 349
(E.D. Pa. 1994).
If the party serving the subpoena believes that the non-party is
withholding responsive, discoverable documents or otherwise refusing to
comply with the subpoena, it may move to compel compliance. In re Sealed
Case, 121 F.3d 729, 741 (D.C. Cir. 1997).

B. Requests for Inspection of Land and

Other Locations to Parties or Non-
Parties
Rule 34 is also the means by which one party may gain access to land,
property or other physical locations in the possession, custody, or control of
a party or, through subpoena, a third party. FRCP 34(a)(2). A party may
seek access for any purpose reasonably likely to lead to discovery of
admissible evidence, including to inspect, measure, survey, photograph or
sample property. Id. Because entry onto land obviously can be intrusive, the
party seeking the request should state what it intends to do on the property
and why it is reasonably necessary for the claim or defense. Belcher v.
Basset Furn. Indus., 588 F.2d 904, 908 (4th Cir. 1978) (applying a
balancing test to determine propriety of request for inspection). In addition,
requests for inspection are not proper means to interview or depose persons
who are on the land. Id.
A party who wants to inspect land or property owned by a non-party may
do so through a subpoena. See Rules 34(c) & 45.

C. Interrogatories to Parties
Interrogatories are written questions that a party may serve on another
party. They provide an efficient but inherently limited means to uncover
useful information. For example, interrogatories are often used to ask for
the identity of all persons with knowledge of relevant facts (rather than
those who know information the opposing party will use to support its
claims or defenses, as required by initial disclosures). Another useful and
common interrogatory is the “contention interrogatory.” A contention
interrogatory asks what the opposing party will contend is the basis, in law
or fact, of a claim, position, or defense in the lawsuit. For example, a
plaintiff can ask a defendant why it contends that a claim is barred by the
affirmative defense of statute of limitations.

1. Serving Party's Obligations

Parties may serve interrogatories on parties to uncover any information
that is relevant to a claim or defense of the suit. FRCP 26(b)(1). A party
may serve interrogatories only on another party. FRCP 33(a). They may not
be served, even when accompanied by a subpoena, on a non-party. Univ. of
Tex. v. Vratil, 96 F.3d 1337, 1340 (10th Cir. 1996).
Absent court order or agreement of counsel, a party may serve no more
than 25 interrogatories, including discrete subparts. FRCP 33(a). In
practice, what exactly is a “subpart” that counts as an interrogatory is a
source of controversy. What if, for example, a party serves an interrogatory
which reads: “Please state the name, address, and telephone number of all
witnesses to the accident.” Is that one interrogatory, or three? See Williams
v. Bd. Of City Comm'rs., 192 F.R.D. 698, 701 (D. Kan. 2000) (holding that
it was one, not three). When forced to decide such issues, the courts apply a
functional test, asking whether the subparts are related to the primary
question, or logically instead would be separate questions and so should
each “count” toward the limit of 25. Kendall v. GES Exposition Servs., Inc.,
174 F.R.D. 684 (D. Nev. 1997). If a party believes more than 25 are
necessary and cannot secure agreement from opposing counsel to let it ask
more, then it can seek a court order increasing the number available. FRCP
26(b)(2); 33(a).
Before including an interrogatory in its requests, a party must determine
it is a proper request, both in that it seeks relevant information and is
proportional. FRCP 26(g)(1)(B). A proper interrogatory is a “contention”
interrogatory. The first item in the example below is a proper contention
interrogatory:

1. Identify the facts supporting your contention that defendant

breached the agreement.
2. Identify every person with knowledge of relevant facts.

2. Recipient's Obligations
A party served with interrogatories must first conduct a reasonable
inquiry into the subject of each interrogatory. FRCP 26(g)(1). Then it must,
within 30 days of service of the interrogatories, serve its objections and
answers to each interrogatory. FRCP 33(b)(2).
 Objectionable interrogatories would include those that inquire into
irrelevant matters, are not proportional, or which seek disclosure of
privileged or work product information. Objections must be specifically
stated. FRCP 33(b)(4). Before interposing an objection, however, the party
must determine that the objection is consistent with the Rules, not
interposed for an improper purpose, and is not unreasonable given the scope
of the case. FRCP 26(g)(1)(B).
Why must a party go through all this trouble? Why not just ignore the
interrogatory and keep back the “bad” information (after all, the “good”
information will have been disclosed during as part of the initial
disclosures)? For the same reasons we saw above: a party who fails to
answer an interrogatory may be sanctioned, such as precluding the use of
evidence at trial, and the court may also award attorneys' fees to the party
that served the unanswered requests. FRCP 37(a)(3)(B)(ii). Second, the
party who served the interrogatories may move to compel, and if the failure
to answer (or an incomplete or evasive answer) was not “substantially
justified,” the party who failed to answer may also be sanctioned. FRCP
37(a)(5); see below, discussing motions to compel. If a party believes that
an interrogatory is objectionable, it must confer with the party that served it
and if that does not resolve the matter, file a motion for protection. FRCP
26(c).

D. Requests for Admission

1. Serving Party's Obligations
Rule 36(a) allows a party to serve “requests for admission” on another
party. “A party may serve upon any other party a written request to admit,
for purposes of the pending action only, the truth of any matters within the
scope of Rule 26(b)(1) relating to: (A) facts, the application of law to fact
or opinions about either; and (B) the genuineness of any described
documents.” Thus, typical requests for admission may ask:

1. Admit that the document attached as Exhibit A and bates stamped

P001-005 is genuine.
2. Admit that the defendant is incorporated in Texas and has its
principal place of business in Illinois.
 3. Admit that the defendant was negligent.

2. Recipient's Obligations
The party must respond to a request for admission within 30 days of
service or each request is “deemed” admitted. FRCP 36(a)(3). The lawyer
must reasonably investigate before answering requests for admission. She
then has these options: object, admit, deny, admit in part and deny in part,
or state that it has investigated and cannot admit or deny. A district court
summarized the obligations of a party responding to requests for admission:
A party may not avoid responding based on technicalities. For
example, a party who is unable to agree with the exact wording of the
request for admission should agree to an alternate wording or
stipulation. When the purpose and significance of a request are
reasonably clear, courts do not permit denials based on an overly-
technical reading of the request.
Instead of admitting or denying the request for admission, a party
may respond by claiming inability (lack of sufficient information) to
admit or deny the matter stated in the request. But a party responding
in this manner must also state that he or she has made “reasonable
inquiry and that the information known or readily obtainable by the
party is insufficient to enable the party to admit or deny.” The
responding party is required to undertake a “good faith” investigation
of sources reasonably available to him or her in formulating answers to
request for admissions (similar to the duty owed in responding to
interrogatories).
“Reasonable inquiry” is limited to persons and documents within
the responding party's control (e.g., its employees, partners, corporate
affiliates, etc.). It does not require the responding party to interview or
subpoena records from independent third parties in order to admit or
deny a Request for admission. Likewise, a party cannot be forced to
admit or deny facts testified to by a third party witness as to which the
responding party has no personal knowledge. Because request for
admissions can have dire consequences, the responding party's duty to
obtain information is no broader than that owed in responding to
interrogatories; i.e., generally limited to obtaining information from
 persons and entities over which it has actual control.
The responding party's simple statement that he or she has made a
“reasonable” inquiry and is unable to admit or deny the request
because insufficient information is available may not suffice as an
answer to the request for admission. Moreover, the fact that the party
has not done so may be asserted as a basis for challenging the
response. Alternatively, costs may be awarded against a party for
failure to inform himself or herself before answering, as provided by
Rule 37(c).
Finally, it is not ground for objection that the request is
“ambiguous” unless so ambiguous that the responding party cannot, in
good faith, frame an intelligent reply. Parties should admit to the
fullest extent possible, and explain in detail why other portions of a
request may not be admitted. Failure to do so may result in sanctions.
U.S. ex rel. Englund v. Los Angeles County, 235 F.R.D. 674 (E.D. Cal.
2006).
A party who believes that a request for admission exceeds the boundaries
of discovery or inquires into protected information such as privileged or
work product materials should object on that basis. However, it is not a
proper basis to object to a request for admission that it asks an ultimate
question, such as whether the party was negligent in the underlying matter
or breached a contract at issue in the case.
Why not deny everything and make the other side prove it at trial? If a
party fails to properly admit a request for admission and forces the other
side to do so, the party who served the request may move for sanctions,
including attorneys' fees. The court must impose sanctions unless (a) the
request was held to be objectionable; (b) the admission was “of no
substantial importance”; (c) the party failing to admit had “reasonable
ground to believe” it might prevail on the issue; or (d) “there was other
good reason for the failure to admit.” FRCP 37(c)(2).

3. Scope of Admission and Withdrawal of an

Admission
Under Rule 36(b) if a party either fails to timely respond to a request, or
admits a request, that matter is “conclusively established” unless that party
succeeds in withdrawing the admission. A party may withdraw (and, so,
amend) an answer only if it persuades the court doing so would promote
“presentation of the merits of the action” will be subserved thereby and the
party who obtained the admission wouldn't be prejudiced “in maintaining or
defending the action on the merits.” FRCP 36(b).
An admission is only for the purposes of the civil action in which the
admission is made. It cannot be used as an admission in any other lawsuit.
Id.

E. Depositions on Written Questions

Depositions on written questions can be served on parties or, if
accompanied by a subpoena, on non-parties. FRCP 31(a). Depositions on
written questions have limited utility, but can effectively be used to obtain
testimony from a third party custodian of records that certain documents are
authentic, or constitute “business records” in terms of an exception to the
hearsay Rule of Evidence.

1. Sender's Obligations
A party who wants to depose another party on written questions may do
so by agreement or without court order unless (A) the proposed deposition
would result in more than 10 being taken in the case; (B) the proposed
deponent has already been deposed once; or (C) the deposition is sought
before the Rule 26(f) conference has occurred. FRCP 31(a)(2).
The sender simply includes in the notice a series of questions that the
recipient must answer, under oath, and in writing. FRCP 31(a)(3). The other
parties then serve crossquestions which they want the person to answer.
FRCP 31(a)(5). The party noticing the deposition on written questions can
serve redirect questions, and then the other parties may serve re-
crossquestions. Id. Ultimately, a person authorized to take the deposition
takes the testimony of the person or the person simply provides the answers
in writing. FRCP 31(b).

2. Recipient's Obligations
The recipient must answer the questions and its lawyer must interpose
any objections that the questions exceed a boundary on discovery, such as
by inquiring into irrelevant matters or seeking privileged or work product
information. A party who fails to respond to a written deposition request
may be sanctioned. See FRCP 37.

F. Oral Depositions
1. Overview
Oral depositions are the most expensive but typically the most fruitful
form of discovery. The attorney for each party will be allowed to ask
questions of the witness (called a deponent) while sitting across the table
from him and so obtain spontaneous answers to those questions, without
coaching or other input from the attorney (at least during the deposition).
The deposition is recorded, either only by a stenographer or by both a
stenographer and by videotape. Typically, depositions are taken only after
documents are exchanged and interrogatories and requests for admission
answered, so that the attorney can ask questions after having already
reviewed the story told through the contemporaneous documents produced
by the other side.

2. Procedure for Taking the Deposition of Parties

or Non-Parties
Depositions may be taken of a party, an employee of a party (under Rule
30(b)(6)), and of non-parties (through a subpoena). The following sections
explore the differences between these depositions, but they share a lot in
common, and we'll discuss that first.
A party who wants to depose another party or person may do so by
agreement and without agreement or court order unless (A) the proposed
deposition would result in more than 10 being taken in the case; (B) the
proposed deponent has already been deposed once; or (C) the deposition is
sought before the Rule 26(f) conference has occurred. FRCP 30(a)(2); see
also FRCP 27 (allowing a deposition to be taken under some narrow
circumstances before suit is filed).
The party seeking the deposition must give written notice stating the time
and place for the deposition and indicating who will be deposed and how
the deposition will be recorded (by videotape or only stenographically,
typically). If another party wants the deposition to be recorded in another
way, it may designate that method, at its expense. FRCP 30(b)(3).
 On the day designated for the deposition, the parties appear before a
person authorized by Rule 28 (often called a “court reporter”), who swears
the witness to tell the truth, and then the lawyers take the deposition. The
court reporter types every word said by a lawyer, the deponent, or any one
else present at the deposition so that the transcript may be used at trial.
The party who noticed the deposition asks its questions first, and then the
other parties' lawyers may ask questions as well. Before the witness
answers each question, lawyers for the other parties may interpose an
objection, which must be stated “concisely in an nonargumentative and
nonsuggestive manner.” FRCP 30(c)(2). The witness may be instructed not
to answer a question only to preserve a privilege, enforce a limitation
ordered by the court previously, or to present a motion to the court to
terminate the deposition. Id. The deposition may last no more than one day
of seven hours, absent court order. FRCP 30(d)(1).
Once the deposition is complete, a copy with exhibits is sent by the court
reporter to the witness, who has 30 days to make corrections and sign the
deposition as being accurate. FRCP 30(e). The court reporter then sends the
deposition transcript along with any documents that were used as exhibits at
the deposition to the lawyer who noticed the deposition, who must store and
protect that material. FRCP 30(f)(1). If other parties want a copy of the
transcript and exhibits, they must pay the court reporter for their copy.
FRCP 30(f)(2).
Here, for example, might be a deposition transcript:

Hricik: I am handing you what has been marked as plaintiff's exhibit 1,

which is bates stamped D005-008. Have you seen that before?
Smith: Yes.
Hricik: Can you tell me what that is?
Smith: This is the contract I executed with your client, the defendant.
Hricik: Was that executed on or about the date shown, April 5, 2007?
Smith: Yes.
Hricik: Turning your attention to the third page of that document, bates
stamped D008, do you see the handwriting in the margin on the left
side?
Opposing lawyer: Hold on, there's handwriting at the top and the
 bottom.
Hricik: I'm calling your attention to the handwriting at the top. Do you
see that?
Smith: Yes, I do.
Hricik: Do you recognize that as your handwriting . . .

Why go through all this trouble? Why not just ignore the deposition
notice and keep back the “bad” information (after all, the “good”
information will have been disclosed during as part of the initial
disclosures). First, a party who fails to attend its own deposition (or who
fails to show up for a Rule 30(b)(6) deposition) may be sanctioned, such as
precluding the use of evidence at trial, and also award attorneys' fees to the
party that served the unanswered requests. FRCP 37(d). Second, the party
who noticed the deposition may move to compel, and if the failure to attend
was not substantially justified, the party who failed to answer may also be
sanctioned. FRCP 37(d); see below, discussing motions to compel.

3. Deposing a Natural Person Who Is Already

a Party to the Suit
The procedures above are all that are required to depose a natural person
who is a party to the suit.

4. Deposing Corporations and Other Entities:

Rule 30(b)(6)
What does a party do if it wants to take deposition testimony from an
entity? There is no “person” named “Ford Motor Company,” after all. How
does a party take the deposition of a large corporation about its accounting
practices if the party has no idea who at the company would know about
those practices? (If the party does know the name of the individual it wishes
to depose, then it can proceed under the normal rules, and does not need to
rely on Rule 30(b)(6). See FRCP 30(b)(6), last sentence.) Although one
could imagine forcing the party seeking the information to hope to guess
the name of the right employee, the Rules take a different approach.
 a. The Procedure for Obtaining a Rule 30(b)(6)
Deposition
Rule 30(b)(6) provides a straightforward mechanism to obtain deposition
testimony from entities. The first step is for the party seeking the deposition
to serve a deposition notice, or subpoena if a non-party, that specifies the
subject matter on which testimony is desired. Thus, the first sentence of
Rule 30(b)(6) provides: “In its notice or subpoena a party may name as the
deponent a public or private corporation, a partnership, an association, a
governmental agency, or other entity and must describe with reasonable
particularity the matters for examination.”
The recipient has several obligations. First, the second sentence of Rule
30(b)(6) requires the recipient “designate one or more” officer, director,
“managing agent” or “persons who consent to testify on its behalf” and list
for each designee the subject “matters on which the person will testify.”
This limitation is important because by implication it precludes using a
30(b)(6) notice to take the deposition of an ordinary employee. Williams v.
Lehigh Valley R.R. Co., 19 F.R.D. 285, 286 (S.D. N.Y. 1956). See also
FRCP 37(d) (court may sanction only party, officer, director, or managing
agent who does not appear for a deposition). “Once served with a Rule
30(b)(6) notice, the corporation is compelled to comply, and it may be
ordered to designate [an officer, director, or managing agent as] witnesses if
it fails to do so.” United States v. J.M. Taylor, 166 F.R.D. 356, 360
(M.D.N.C. 1996).
In addition, the designee is required to testify as to “matters known or
reasonably available to the organization.” Thus, the party that receives the
notice must present a witness who can testify on its behalf, after engaging
in a reasonable investigation as to the subject matters designated in the Rule
30(b)(6) notice. “Corporations must act responsively; they are not entitled
to declare themselves mere document-gatherers. They must produce live
witnesses who know or who can reasonably find out what happened in
given circumstances.” Wilson v. Lakner, 228 F.R.D. 524, 530 (D. Md.
2005).

b. Issues Concerning the Designee's Testimony

Rule 30(b)(6) testimony creates several issues concerning the scope of
the deposition and the use of the testimony. Foremost, to what extent is the
testimony of the 30(b)(6) witness binding on the designating entity?
Suppose, for example, the witness makes a statement that is an admission
that, if “made by the company” would constitute a judicial admission under
the Rules of Evidence. Suppose, for instance, the witness said, “I admit we
were negligent in marketing the product that hurt the plaintiff.” Would that
bind the company? Does the fact that the company designated the
individual to testify under Rule 30(b)(6) make the testimony binding? Put
the other way, if a 30(b)(6) witness testifies X is true, does that preclude the
corporation from adducing evidence showing that X is not true?
Courts are split on this question. Some courts hold that 30(b)(6)
testimony is the equivalent of a judicial admission. “By commissioning the
designee as the voice of the corporation, the Rule obligates a corporate
party ‘to prepare its designee to be able to give binding answers’ in its
behalf.” Rainey v. Am. Forest & Paper Ass'n., Inc., 26 F. Supp. 2d 82
(D.D.C. 1998) (quoting Ierardi v. Lorillard, Inc., 1991 WL 158911 (E.D.
Pa. 1991). Other courts, however, reject that approach. See Industrial Hard
Chrome, Ltd. v. Hetran, Inc., 92 F. Supp. 2d 786, 791 (N.D. Ill. 2000) (Rule
30(b)(6) “testimony is not a judicial admission that ultimately decides an
issue. The testimony given at a Rule 30(b)(6) deposition is evidence which,
like any other deposition testimony, can be contradicted and used for
impeachment purposes.”).
Second, may the interrogating party question beyond the scope of the
subjects listed in the 30(b)(6) notice? “Courts are divided on whether a
party noticing a Rule 30(b)(6) deposition is limited to the topics set forth in
the notice.” U.S. ex rel. Tiesinga v. Dianon Systems, Inc., 2006 WL
3332883 (D. Conn. 2006).
One the one hand, a majority of courts hold that a Rule 30(b)(6) witness
may be examined as to any relevant subject. See King v. Pratt & Whitney,
161 F.R.D. 475 (S.D. Fla. 1995). Courts following this approach reason that
questions outside the scope of the notice are objectionable only as with a
normal deponent. See Bracco Diagnostics, Inc. v. Amersham Health Inc.,
2005 U.S. Dist. LEXIS 26854 (D.N.J. 2005) (noting string of district courts
have followed the King court's reasoning). Thus, the subject matters listed
in the 30(b)(6) notice “cannot be used to limit what is asked of a designated
witness at deposition.” Detoy v. San Francisco, 196 F.R.D. 362, 367 (N.D.
Cal. 2000). Instead, “the scope of the deposition is determined solely by
relevance under Rule 26, that is, that the evidence sought may lead to the
discovery of admissible evidence.” Id.
 On the other hand, some courts hold that the deposition is limited to
“matters included in the notice.” Paparelli v. Prudential Ins. Co., 108
F.R.D. 727, 730 (D. Mass. 1985); see Hoechst Celanese Corp. v. Nat'l Fire
Union Fire Ins. Co. of Pittsburgh, 623 A.2d 1099, 1113 (Del. Supr. 1991).
These courts reason that implicit in the approach of Rule 30(b)(6) is a
limitation that the deposition be limited to the subjects designated,
reasoning that if “a party were free to ask any questions, even if ‘relevant’
to the lawsuit, which were completely outside the scope of the ‘matters on
which examination is requested,’ the requirement that matters be listed
‘with reasonable particularity’ would make no sense.” Paparelli, 108 F.R.D.
at 730.
A third issue implicated by Rule 30(b)(6) depositions is whether any
testimony beyond the scope of the notice is binding on the corporation. If a
30(b)(6) notice seeks testimony as to topic A, testimony as to topic B ought
not bind the corporation even if the question was not objectionable as
outside the scope of the notice. See U.S. E.E.O.C. v. Caesars Entertainment,
Inc., 237 F.R.D. 428, 433 (D. Nev. 2006).
A fourth issue, related to the third, is whether counsel presenting the
30(b)(6) witness for the deposition must object to questions outside the
scope at the deposition. District courts have suggested that lawyers make
objections at the deposition and ask the judge to exclude the testimony as
not intended to be the answers of the designating party. Id.
Finally, the question of where the deposition takes place sometimes is a
litigated issue. There is a presumption that the deposition should take place
at the corporation's principal place of business. Cadent Ltd v. 3M Unitek
Corp., 232 F.R.D. 625 (C.D. Cal. 2005). However, either party can move
for a protective order under Rule 26(c) and show that justice requires that
the deposition be held elsewhere. Id. In fact, “corporate defendants are
frequently deposed in places other than the location of the principal place of
business, especially in the forum [where the action is pending], for the
convenience of the parties and in the general interests of judicial economy.”
Id.
Like all discovery disputes, fights over where a deposition should take
place are to be avoided, as judges find the inability of counsel to agree on
such matters troubling. As one court recently wrote in deciding a motion
brought to determine where a 30(b)(6) deposition should take place wrote:
This matter comes before the Court on Plaintiff's Motion to
 designate location of a Rule 30(b)(6) deposition. Upon consideration
of the Motion — the latest in a series of Gordian knots that the parties
have been unable to untangle without enlisting the assistance of the
federal courts — it is ORDERED that said Motion is DENIED.
Instead, the Court will fashion a new form of alternative dispute
resolution, to wit: at 4:00 P.M. on Friday, June 30, 2006, counsel shall
convene at a neutral site agreeable to both parties. If counsel cannot
agree on a neutral site, they shall meet on the front steps of the Sam M.
Gibbons U.S. Courthouse. . . . Each lawyer shall be entitled to be
accompanied by one paralegal who shall act as an attendant and
witness. At that time and location, counsel shall engage in one (1)
game of “rock, paper, scissors.” The winner of this engagement shall
be entitled to select the location for the 30(b)(6) deposition to be held
somewhere in Hillsborough County during the period July 11–12,
2006. If either party disputes the outcome of this engagement, an
appeal may be filed and a hearing will be held at 8:30 A.M. on Friday,
July 7, 2006 before the undersigned . . .
Avista Mgmt., Inc. v. Wausau Underwriters Ins. Co., Civ. A. No. 6:05-cv-
1430-Orl-31JGG (M.D. Fla. 2006).

5. Taking Oral Deposition of a Non-Party by

Service
of a Subpoena
The general rules regarding when discovery may be served applies to
subpoenas, even though Rule 45 does not itself contain any time limits. See
Alper v. U.S., 190 F.R.D. 281, 283 (D. Mass. 2000).
Rule 45(a) requires certain formalities in subpoenas, all of which can be
satisfied by using a common form subpoena available online. An attorney
for a party is authorized to complete the subpoena to compel a non-party to
give an oral deposition, to produce documents, or both, an attorney is
authorized where the deposition will be held or documents produced issue a
subpoena requiring the non-party to testify, produce the documents, or both.
FRCP 45(a). (Subpoenas may also be used to compel trial testimony. See
id.)
A party requesting a subpoena, like all discovery, has an affirmative
obligation to avoid imposing undue burden or expense. FRCP 45(c)(1).
Improper use of subpoenas may result in sanctions. Id.
The subpoena must be served, along with a check to cover attendance
and mileage of the witness, by a non-party who is at least 18 years old.
FRCP 45(b). Court reporters typically provide this service for a fee. There
are geographic limitations on a court's subpoena power. Generally, a
subpoena is ineffective if either the person is served outside of the district
which issues the subpoena or more than 100 miles from the place where the
activity demanded by the subpoena will occur. FRCP 45(b)(2).
A non-party served with a subpoena can seek to challenge it by moving
to quash it, or comply with it without or subject to objections. FRCP 45(c).
A non-party who wants to object to complying with the subpoena must
object or move to quash it. FRCP 45(c). A non-party who wants to comply
with a subpoena duces tecum but subject to objections must serve a written
response on the party who served it. For example, a party subpoenaed to
produce documents, but the document requests may call for production of
privileged documents. The subpoenaed party may, therefore, serve a written
response objecting to the requests for production to the extent they call for
privileged documents, but otherwise agreeing to produce responsive
documents.

G. Physical and Mental Examinations

Under Rule 35, a party may request a physical or mental examination
under some circumstances. These are often called “IMEs” or “independent
medical examinations.”

1. Obtaining an Order for an Examination

What is required to obtain an examination? Examinations are available
by court order, either as the result of an agreement by the parties or after an
opposed request for an exam. (Often the parties simply agree to a physical
exam and avoid the order entirely.) If the request for an exam is opposed,
however, the party seeking the exam must move the court for an order and
in it show that (A) the person is a party, under the control of the party, or in
the custody of the party; (B) that the condition of the party is “in
controversy”; and (C) that there is “good cause” for the examination(s)
sought. FRCP 35(a).
 a. Who May Be Examined?
Only a party or a person “who is in the custody or under its legal control”
can be ordered to undergo an exam. Thus, it allows for an examination of
any party, whether plaintiff, defendant, or otherwise. FRCP 35(a)(1). See
Schlagenhauf v. Holder, 379 U.S. 104 (1964). The phrase “custody or legal
control” includes, for example, a minor or incapacitated adult, but it does
not include an employee of a party. Lewis v. Herrman's Excavating, Inc.,
200 F.R.D. 657 (D. Kan. 2001).

b. When Is a Condition “in Controversy”?

To establish that the person's condition is “in controversy” the movant
must show that “each condition as to which the examination is sought is
really and genuinely in controversy” and normally cannot rely on pleadings
alone. Nonetheless, often little is required. The classic example of “in
controversy,” for example, occurs when a plaintiff pleads in a personal
injury action that the defendant caused it specific harm. A plaintiff who
claims that the defendant's negligence broke the plaintiff's finger, for
example, puts the condition of the plaintiff's finger “in controversy.” See
Schlagenhauf.
At other times this element requires a greater showing. For example, in
Schlagenhauf, the plaintiff was injured when the bus in which he was riding
plowed into the back of a tractor-trailer that was parked along the side of a
freeway. The plaintiff sued the bus driver as well as the bus company. The
plaintiff sought several medical exams of the defendant bus driver. To
establish that there was good cause for several medical exams, the plaintiff
argued in its motion seeking an exam that the driver had admitted that he
had seen the red lights of the tractor-trailer for 15 seconds before the
collision, but had done nothing, and that he had been involved in a similar
prior accident. The Court held that this was insufficient to establish that his
mental or physical condition was “in controversy.” The Court further held
that it was insufficient to order only an eye exam.

c. What Constitutes “Good Cause”?

Generally “good cause” exists where the exam sought will “determine
the existence and extent of” the condition. Schlagenhauf. Thus, for
example, the facts of Schlagenhauf might constitute good cause for an eye
exam, but not heart exam. But “good cause” also takes into account whether
the information might be obtainable through means other than the desired
examination. Benham v. Rice, 238 F.R.D. 15 (D.D.C. 2006). Thus, even if a
condition is in controversy, there may be “good cause” only for one type of
exam and not another.

H. Special Issues
1. E-Discovery
In December 2006 substantial revisions to the Rules came into effect
designed largely to address problems and concerns arising from the fact that
today many “documents” are in electronic format, and sometimes difficult
and expensive to access or locate. The critical, broad issue that E-discovery
creates is the need for lawyers to become familiar with their client's
document management systems, so that a lawyer can accurately certify that
responsive documents have been produced. Electronic discovery can be
massively expensive, and courts are only just beginning to struggle with
how to allocate costs and address the difficult amounts of material that must
be reviewed in response to a request for production that includes electronic
materials. See, e.g., Zubalake v. UBS Warburg LLC, 217 F.R. D. 309
(S.D.N.Y. 2003).

I. Practical but Crucial

Big Picture View of Discovery
In order to recover at trial, a plaintiff must produce sufficient evidence of
each element of every claim that it pleads. Some of the information that the
plaintiff has it does not need to acquire through discovery: for example, a
plaintiff who has pled a breach of contract against a pizza box manufacturer
for delivering defective boxes does not need to use formal discovery to
prove that its restaurants actually received the boxes, since its own records
and witnesses can establish that fact (if receipt of the boxes is even disputed
by the defendant). But a plaintiff in such a case would have to prove that
the boxes were defective or otherwise failed to meet the specifications set
forth in the parties' contract. It may be able to do that through its own
testing, or it may need access to the defendant's plant and documents in the
defendant's possession in order to show that the boxes were in fact below
standard.
In this sense, discovery is about gap filling: any element of a claim that
the plaintiff lacks evidence for, it must find, either through informal
investigation or formal discovery. The same is true for defendants: a
defendant who pleads that the statute of limitations has expired can rely on
the date of filing suit for when limitations ceased to run, but will likely have
to conduct discovery to find out, for example, when plaintiff discovered the
alleged breach of duty to it. Discovery allows parties to fill gaps in their
own cases.
At the same time, it allows parties to gather evidence that undermines the
other side's claims or defenses. A plaintiff could, for example, take
discovery of employees of the defendant to show that, even though
limitations might have appeared to have expired, defendant engaged in
active concealment of the facts, and so limitations should be “tolled.”
Ultimately, each side's lawyer will have to determine whether it has
sufficient, credible evidence on each element of each claim or defense. That
assessment typically comes near the end of discovery, since it is only at that
time that the parties have fully exchanged information and can accurately
assess the strengths and weaknesses of each side's positions. At that time,
settlement is very common, as is the filing of summary judgment by one or
both parties.

Checkpoints

Can you describe each discovery tool, and when it likely will be best to use?
Can you explain how to avoid production of privileged or work product information when
responding to each type of discovery request?
Can you explain the process for obtaining a Rule 30(b)(6) deposition, and when using Rule 30(b)(6)
may be useful or necessary?
Can you explain when a court will likely order a mental or physical exam of a party and who is
“controlled” by a party for purposes of that rule?
Chapter 50

Expert Witnesses: Disclosure,

Discovery, and Protection

Expert Witnesses Roadmap

This chapter explains how to identify the three different types of “experts” created by the
Rules, and the obligations that a party has with respect to each different type.
This chapter also explains how the rules prohibit discovery of information known to certain
experts, and identifies the exceptions to those prohibitions.

As explained earlier, the Rules require parties to disclose information

without having been served a discovery request to do so. One circumstance
that may require disclosure concerns expert witnesses. (We saw required
initial disclosures in Chapter 43, and you'll see that additional disclosures
are required in connection with the final pretrial order in Chapter 53.)
The Rules state that “a party must disclose to the other parties the
identify of any witness it may use at trial to present evidence” under the
Rules of Evidence relating to expert testimony. FRCP 26(a)(2)(A). Thus,
whether someone is an “expert” turns on the rules of evidence, not the rules
of civil procedure.
“Experts” are more common than you may think, and so the rules
requiring disclosure of information about certain experts are triggered more
often than you might intuit. Specifically, the rules of evidence say that
someone is an expert if she has “scientific, technical, or other specialized
knowledge that will help the trier of fact to understand the evidence or to
determine a fact in issue.” FRE 702. A carpenter testifying about the proper
way to make a chair is just as much of an expert as is a chemist describing a
new patented formula.
If someone is going to offer an expert opinion at trial, then the party
intending to do so has certain required disclosures they must make.
Conversely, sometimes a party may retain an expert and plan not to use the
testimony at trial; in those cases, it may be that the opposing parties cannot
discover information about that witness. The rules treat the three categories
of experts very differently from each other:

A. Required Disclosures from Parties

Intending to Use Testifying Experts and
Hybrid Experts at Trial
1. An Overview of the Two Rounds of Disclosures
Rule 26(a)(2)(D) requires that at least 90 days before trial, or as required
by the scheduling order or the parties' agreement, the parties must begin a
process of disclosing certain information about experts and expert
witnesses. Unless modified by the scheduling order or agreement, the Rules
require two rounds of disclosures.
First, each party must to disclose (a) the identity of each hybrid expert
and a summary of the subject matter on which the expert will give expert
testimony along with a summary of the facts and opinions about which she
is expected to testify (FRCP 26(a)(2)(C)); and (b) the identify of each
testifying expert along with a report prepared and signed by the expert that
includes:
(i) a complete statement of all opinions the witness will express and
the basis and reasons for them;
(ii) the facts or data considered by the witness in forming them;
(iii) any exhibits that will be used to summarize or support them;
(iv) the witness's qualifications, including a list of all publications
 authored in the previous 10 years;
(v) a list of all other cases in which, during the previous 4 years, the
witness testified as an expert at trial or by deposition; and
(vi) a statement of the compensation to be paid for the study and
testimony in the case.
FRCP 26(a)(2)(B). So, imagine a car wreck case. The plaintiff saw a doctor
in the emergency room and both plaintiff and defendant have hired accident
reconstruction experts. In that case, 90 days before trial, the plaintiff must
identify the doctor from the emergency room if he is going to give opinions
(“the plaintiff had a broken bone”) and a summary of those opinions, and
the plaintiff would have to identify the accident reconstruction expert and
provide his written report. Likewise, the defendant at that time would have
to disclose the identity of her accident reconstruction expert and provide his
written report. Note that, often, a hybrid expert will have been identified
much earlier as a person that the party intends to call at trial as a fact
witness, but a hybrid expert must still be listed as an expert in these
disclosures.
The second round comes, if not modified by the scheduling order, 30
days later (i.e., 60 days before trial). At that point, if a party has expert
evidence that is intended solely to contradict or rebut evidence on the same
subject matter by an expert of another party, then it must disclose the (a)
identity of the expert and (b) with respect to testifying experts but not
hybrid experts, provide reports. So, for example, if a defendant intends to
offer an expert's testimony solely to rebut the testimony offered by an
expert identified by the plaintiff in the first round of disclosures, the
defendant need only identify this expert 60 days prior to trial, and if a
testifying expert, provide the report. If, on the other hand, the defendant had
an expert to testify concerning an affirmative defense, the defendant must
identify that expert 90 days out, and if the plaintiff has an expert to rebut
the defendant's expert, the plaintiff must identify that expert 60 days from
trial.

a. Disclosure of the Identity of Each Testifying

Expert
and Hybrid Expert
Rule 26(a)(2)(a) requires a party to disclose the identity of “any witness it
may use at trial to present evidence under Federal Rule of Evidence 702,
703, or 705.” The Rules of Evidence generally do not permit witnesses to
give opinions, only to state facts the witnesses observed. However, the rules
of evidence allow “experts” to give opinions. Again, what is “expert
testimony” in terms of the Rules of Evidence includes a lot. Studies show
that there are “experts” in about 90% of cases, and the average case has
over three experts involved.
Any witness who is expected to offer “expert opinion” at trial — even if
that witness is also a fact witness — must be identified 90 days prior to
trial, unless the testimony is rebuttal. If the testimony is not purely factual,
the witness should be identified and, again, should be identified as a person
who will offer expert testimony even if the witness was previously
identified as a fact witness. In re Illusions Holdings, Inc., 189 F.R.D. 316
(S.D.N.Y. 1999), the plaintiff was injured while scuba diving in the Virgin
Islands. The plaintiff sought to exclude two of the defendant's witnesses
from testifying at trial because they were not identified as experts, only as
fact witnesses. The two men were professional scuba divers had been
deposed by plaintiffs' counsel and had testified not just about their
familiarity with the area where the accident occurred and what they heard
and saw, but also as to scuba diving training methods, proper procedures for
diving, their opinions about currents, and other information. The court
therefore excluded the two witness's testimony from trial and imposed other
sanctions.
Thus, the identity of two of the three kinds of experts — hybrid experts
and testifying experts — must be disclosed. Although there is a split, many
courts hold that the identity of a consulting expert may be obtained only
upon a showing of “exceptional circumstances.” Ager v. Jane C. Stormont
Hosp. & Training School for Nurses, 622 F.2d 496, 502 (10th Cir. 1980)
(requiring exceptional circumstances).

b. Disclosure of Reports of Testifying Experts

and Summaries from Hybrid Experts
Parties are required to disclose far more than just the identity of testifying
experts, and somewhat more with respect to hybrid experts. This section
describes the two types of testifying experts and what must be disclosed
about each, before describing the summaries that must be provided along
with hybrid experts.
i. Who is a “Testifying Expert” and so Must Prepare a
Report?
Two categories of testifying experts must prepare written, signed reports:
(1) any witness who was retained or specially employed to provide expert
testimony in the case; or (2) any witness whose duties as an employee of a
party regularly involve giving expert testimony. FRCP 26(a)(2)(B).
Who is covered by the first category? The typical expert witness is a
person who has expert knowledge in a field who is hired by a party to
testify for a specific case. If a witness does not have personal knowledge of
the facts of the case, but was retained to testify about his opinions based on
the testimony of those who do have that knowledge, that person is an expert
witness.
Who is covered by the second category? It is not as broad category as the
first. If a party's employee's job regularly entails testifying as an expert and
the employee will be offering opinions, then she is a testifying expert and
must prepare a report. Where an employee regularly testifies, complicated
issues concerning the scope of discovery can arise. E.g., People ex rel.
Wheeler v. So. Pac. Transp. Co., 1993 WL 816066 (E.D. Cal. 1993)
(examining scope of discovery over employee who regularly testified but
also used discoverable information and other information in conducting his
job).
Who would not be covered by either category? The doctor who treated
the plaintiff before the accident, or the doctor who treated him afterward,
would not — absent more — be required to prepare a report. Likewise, a
mechanic employed by a party who will testify about proper maintenance
procedures when maintaining the employer's vehicle fleet will not —
without more — be covered by this Rule. In the former case, the doctors
would have to be retained as experts in the case; in the latter case, the
employee's duties would have to regularly involve giving testimony. Again,
those witnesses would likely be hybrid experts: they don't have to prepare a
report, but the lawyer who intends to use their opinion testimony must
provide a written summary, discussed at the end of this section.

ii. What Must Be in the Report of a Testifying Expert?

Rule 26(a)(2)(B) requires that the report include:
a complete statement of all opinions the witness will express and the basis
and reasons for them;
the facts or data considered by the witness in forming the opinions;
any exhibits to be used as a summary of or support for the opinions;
the qualifications of the witness, including a list of all publications authored
by the witness during the last ten years;
the compensation to be paid for the study and testimony; and
a listing of any other cases in which the witness has testified as an expert at
trial or by deposition within the preceding four years.

FRCP 26(a)(2)(B). Expert reports can be voluminous. The Federal Rules of

Evidence impose requirements concerning minimum qualifications to be an
expert as well as limitations on what expert testimony may address.
Substantive law, as well, must be consulted because it may limit the extent
to which an expert may testify, or impose other requirements. Two issues
are worth emphasizing here.
First, the term “data or other information considered” by the expert
means what it says. The term “considered” includes more than just “relied
upon,” referring instead to any information furnished to a testifying expert
that such an expert generates, reviews, reflects upon, reads, and/or uses in
connection with the formulation of his opinions, even if the expert
ultimately rejected relying on the information. Compare Amway Corp. v.
Procter & Gamble Co., 2001 WL 1877268 (W.D. Mich. 2001) (holding that
documents supplied to testifying expert, but which he did not read, review,
or consider in forming opinions, were not discoverable under Rule 26(a)(2)
(B)) with Vitalo v. Cabot Corp., 212 F.R.D. 472, 474 (E.D. Pa. 2002)
(defining “consider” as reflecting on, reviewing, or using, even if ultimately
rejected by expert).
Second, and related to that point, until recently, privileged or work
product information was generally not exempted from “data or information
considered” by the expert. Until recently, if a lawyer provided a testifying
expert with a document that revealed the lawyer's litigation strategy and key
opinions, the majority of courts held that there is complete waiver, even as
to opinion work product. In re Pioneer Hi-Bred Int'l, Inc., 238 F.3d 1370
(Fed. Cir. 2001). Other courts did not permit discovery of “core” or
“opinion” work product, but find protection as to all other types of
protected information has been waived. E.g., Krisa v. Equitable Life
Assurance Soc'y, 196 F.R.D. 254, 259 (M.D.Pa. 2000) (finding that
disclosure of core work product to a testifying expert does not abrogate the
privilege that attaches to such materials).
As amended in 2010, however, the rule expressly states that certain
information is not discoverable: (1) draft reports or disclosures of testifying
experts; (2) communications between testifying experts and the party's
attorneys; and (3) facts known or opinions held by consulting (non-
testifying) experts. FRCP 26(b)(4)(B)-(D). However, if an expert
“considers” information from someone other than a party's attorney, tbose
communications are discoverable. Whole Women's Health v. Lakey, 301
F.R.D. 266 (W.D. Tex. 2014) (collecting cases).

iii. What Must the Summary of a Hybrid Expert Contain?

Hybrid experts need not prepare reports, but the lawyer intending to call
a hybrid expert as a witness must prepare a summary of the facts and
opinions regarding the witnesses testimony. Obviously, the detail in a
testifying expert's report is not required. Courts have held that simply
stating that a treating physician will rely upon medical records is not
sufficient since that is not a “summary.” E.g., Smothers v. Solvay Chem.,
Inc., 2014 WL 3051210 (D. Wyo. July 3, 2014) (collecting cases).

2. Each Party Must Supplement Expert

Disclosures
Rule 26(a)(2)(E) requires that every report be supplemented, and, in
addition, that information disclosed by the expert during his deposition also
be supplemented. So, for example, if the expert conducts additional
experiments or reaches additional conclusions not disclosed in the expert
report or which were queried about at his deposition, the information must
be supplemented. The latest time for supplementation is at the time the Rule
26(a)(3) disclosures are due, which is either when stated in the scheduling
order or 30 days prior to trial.

3. Incomplete or Late Reports, Summaries of

Hybrid Experts, or Deposition Testimony
Suppose at trial or in connection with summary judgment motions a party
seeks to introduce evidence that was not properly and timely disclosed by
the expert in his report or summary, or at deposition, or afterward by
supplementation. The other parties can seek to exclude the evidence under
Rule 37(c)(1), which provides that if “a party fails to provide information or
identify a witness as required by Rule 26(a) or 26(e), the party is not
allowed ot use that information or witness to supply evidence on a motion,
at a hearing, or at trial unless the failure was substantially justified or was
harmless.” In addition, the court, on motion and after hearing can impose
other, or additional, sanctions. Id.
Thus, unless the nondisclosure was either “substantially justified” or
“harmless,” a district court must exclude the undisclosed witness or
evidence from being used. Salgado v. Gen'l Motors Corp., 150 F.3d 735,
742 and n.6 (7th Cir. 1998). The sanction of “exclusion is automatic and
mandatory unless the sanctioned party can show that its violation of Rule
26(a) was either justified or harmless.” Id. Importantly, the filing of a late
but complete report also must be “substantially justified” or “harmless.”
J&J Celcom v. AT&T Wireless Serv., Inc., 2006 WL 3825343 (9th Cir.
2006).
“Substantial justification” turns on all the facts, including prejudice to the
other party. But it is a high hurdle. Courts have held that a party who fails to
identify a plaintiff's treating physician as an expert is not substantially
justified in doing so, because the case law is fairly clear that disclosure is
required. E.g., Musser v. Gentiva Health Serv., 356 F.3d 751 (7th Cir. 2004).
In Musser, the plaintiffs brought a medical malpractice claim against a
home nursing service, alleging that its negligent monitoring led to their
baby's death. As part of initial required disclosures, the plaintiffs identified
various treating physicians and nurses as fact witnesses. Depositions were
taken of various witnesses, including those doctors and nurses.
When the time came for expert witness disclosures, however, plaintiffs'
counsel did not identify any of these witnesses as persons who would give
expert opinion testimony. The defendant then moved for summary
judgment, arguing that plaintiffs could not produce any evidence of
causation, since proof of causation requires expert testimony and plaintiffs
had not identified any expert witnesses. When the plaintiffs' lawyer realized
the problem, she argued that she had misunderstood the law, and didn't
realize that, even though these witnesses had been disclosed as part of
required initial disclosures as fact witnesses, they also had to be identified
as expert witnesses.
The district court excluded the witnesses and the Seventh Circuit
affirmed. It noted that, though the exclusion of the evidence meant
dismissal of the case, under the facts presented it was not an abuse of
discretion for the district court to find that the omission was not
substantially justified. 356 F.3d at 759–60.
A “harmless” omission requires both an honest mistake by the
nondisclosing party and sufficient knowledge on behalf of the other party of
the withheld information. Vance v. U.S., 1999 WL 455435 (6th Cir. 1999).
So, for example, if the nondisclosure occurred at such a time as to prejudice
a party in preparing a motion for summary judgment, or responses to one,
the nondisclosure is not harmless. Hermeling v. Montgomery Ward & Co.,
851 F. Supp. 1369, 1376 (D. Minn. 1994).
A trial court's decision that nondisclosure was not substantially justified
or was not harmless is reviewed for abuse of discretion. Southern States
Rack & Fixture, Inc. v. Sherwin-Williams Co., 318 F.3d 592, 597 (4th Cir.
2003). However, if the court does not find substantial justification or
harmlessness, then it must exclude the evidence or witness. Id.

B. Non-Testifying (aka Consulting)

Experts
1. The Rule: No Discovery of Consulting Experts
When a party intends to have an expert testify at trial, the disclosure
obligations above are triggered. Suppose, and this happens a lot, a lawyer
retains an expert who provides his opinion to the lawyer . . . and it's not
good. The expert basically thinks that the other side's right. Or, suppose the
expert's opinion is favorable to the lawyer's client, but the expert just makes
an awful witness. In either case, what, if anything, is the party required to
disclose?
“Nothing” is the short answer: the required disclosure obligations
concerning experts do not apply unless the party intends for the expert to
testify at trial. There's a longer answer, though: although the required
disclosure obligations in Rule 26(a) do not apply to non-testifying experts,
in some circumstances discovery can be had of these experts.
Stop and consider the extreme rules that could apply to this issue. The
rule could provide that nothing known to a consulting expert is
discoverable; or, it could permit discovery of everything known to a
consulting expert. We instead have a rule that provides broad protection to
facts known or opinions held by a non-testifying expert, but which has an
exception. Here is the Rule, which both authorizes access to such
information while conditioning it:
Ordinarily, a party may not, by interrogatories or deposition, discover
facts known or opinions held by an expert who has been retained or
specially employed by another party in anticipation of litigation or to
prepare for trial and who is not expected to be called as a witness at
trial. But a party may do so only:
(i) as provided in Rule 35(b); or
(ii) on showing exceptional circumstances under which it is
impracticable for the party to obtain facts or opinions on the same
subject by other means.
FRCP 26(b)(4)(D) (emph. added).
Thus, apart from medical examinations under Rule 35, facts known to or
opinions held by a non-testifying expert can be discovered through
deposition or interrogatories, but only if “exceptional circumstances” as
defined in the emphasized language exist. Make sure you get the rule and
exception: the rule “forbids the judge to order disclosure in pretrial
discovery of the facts found or opinions formulated by an opponent's non-
testifying experts except . . . ‘upon a showing of exceptional circumstances
under which it is impracticable for the party seeking discovery to obtain
facts or opinions on the same subject by other means.’” Braun v. Lorillard
Inc., 84 F.3d 230, 236 (7th Cir. 1996).
Why not one extreme or the other, and why the narrow exception? The
Rules generally prevent disclosure concerning non-testifying experts so that
each party can hire experts and get the case fairly evaluated without fear
that an adverse opinion will become “grist for the adversary's mill.” Long
Term Capital Holdings v. U.S., 2003 U.S. Dist. LEXIS 14579 (D. Conn.
2003). Think about it for a moment: if you knew that any unfavorable
opinion you obtained from an expert that you paid could be used by the
other side, you'd not hire truly neutral experts, but instead a partisan you
knew you could count on for a favorable, not neutral, opinion. So, don't lose
sight of the broad prohibition into discovery of consulting experts, even
though the rest of this section focuses on the exception, not the general rule.
2. The “Exceptional Circumstances” Exception
A party seeking discovery from a non-testifying expert carries a “heavy
burden” of proving “exceptional circumstances.” Spearman Indus., Inc. v.
St. Paul Fire & Marine Ins. Co., 128 F. Supp. 2d 1148, 1151 (N.D. Ill.
2001). The party seeking the discovery must show it is unable to obtain
equivalent information from other sources. The requisite “exceptional
circumstances” are typically found under three fact patterns:
(A) the consulting expert observed an event, object, or condition that
no longer is observable but the event relates to a material issue at trial,
and the party seeking discovery could not reasonably have been
expected to observe it;
(B) the cost to replicate the event, object, or condition is prohibitively
expensive; or
(C) there are no other available experts in the field.
See Braun v. Lorillard Inc., 84 F.3d 230, 236 (7th Cir. 1996). These are
fairly rare circumstances: if the plaintiff claims it was injured by a defective
product, for example, each side can usually have its own expert examine the
product See Grindell v. Am. Motors Corp., 108 F.R.D. 94, 95 (W.D.N.Y.
1985) (quashing subpoena for non-testifying expert that had been retained
by the defendant because plaintiffs could hire their own expert to examine
the car and so there were no exceptional circumstances); Hermsdorfer v.
Am. Motors Corp., 96 F.R.D. 13, 14 (W.D.N.Y. 1982) (plaintiffs had access
to the car model in question to same extent as defendant, and so no
exceptional circumstances existed).

a. The Condition Is No Longer Observable and

Could Not Have Been Observed by the Party
Seeking Discovery from the Consulting Expert
Casebooks use a few cases to illustrate when courts will allow access
because a condition that is relevant to the suit is no longer observable and
could not have been observed by the party seeking the discovery. In
Thompson v. Haskell Co., 65 F. Empl. Prac. Cas. (BNA) 1088 (M.D. Fla.
1994), the court found “exceptional circumstances” where the plaintiff, who
was claiming mental anguish from sexual harassment and who had alleged
that she had been severely depressed by the harassment, had seen a
psychologist immediately after she had been fired from her job, but suit was
not filed until many months later. Her mental condition immediately after
she had been fired obviously was essential to her case, and could not be
recreated by the defendant. See Braun v. Lorillard Inc., 84 F.3d 230, 236
(7th Cir. 1996) (Because the tissue samples had been destroyed, the “only
way defense could find out whether there were . . . asbestos fibers in the
tissues that the plaintiff's experts had tested was to get the test results.”)
On the other hand, in Chiquita Int'l Ltd. v. M/V Bolero Reefer, 1994 U.S.
Dist. Lexis 5820 (S.D.N.Y. 1994), the court found no exceptional
circumstances where, in a dispute over a spoiled commercial shipment by
boat of bananas, both parties could have investigated the conditions on the
dock that resulted in the bananas being left to rot, but only one party did so,
even though the dock was at the critical time equally accessible to both of
them.

b. The Event or Condition Can be Recreated

Only at Great Expense
This exception is not designed to permit a party from building its case by
using the other side's financial resources, diligence, or better preparation.
Consequently, it is not enough to satisfy this prong to show that testing or
examination take time and money. In re Shell Oil Refinery, 132 F.R.D. 437
(E.D. La. 1990) (cost of $300,000 insufficient to constitute “exceptional
circumstances”). In other words, this exception is narrow but courts will
grant discovery in extreme circumstances, but will not let one party “free
ride” on the work of the other.

c. There's No Other Expert in the Field Available

This is an extremely rare occurrence.

C. Special Issues
1. Deposing a Testifying Expert's Non-Testifying
Assistants
Generally, as we've seen, a non-testifying expert is treated quite
differently from a testifying expert: full discovery is allowed of a testifying
expert, but rarely is discovery concerning a non-testifying expert even
allowed. Suppose, though, that a testifying expert has been substantially
assisted in the preparation of his report by an assistant, who is not going to
testify. Is that assistant a non-testifying expert, or does involvement in the
report allow for discovery of the person as a testifying expert?
The answer generally seems to turn on whether the assistant was a
collaborator in the sense that the testifying expert did not independently
verify the work. To that extent, while the assistant may not need to testify at
trial, the other parties may be able to take discovery of the assistant. Dura
Automotive Sys., of Indiana, Inc. v. CTS Corp., 285 F.3d 609, 612–14 (7th
Cir. 2002) (an assistant or collaborator may be deposed to “make sure they
performed their tasks competently.”); Herman v. Marine Midland Bank, 207
F.R.D. 26, 31 (W.D.N.Y. 2002) (allowing discovery of assistant's work
because the report was “the result of substantial collaborative work”). If a
testifying expert is simply using a report prepared by a non-testifying
expert, courts sometimes find “exceptional circumstances” and permit
discovery of the non-testifying expert. See Heitmann v. Concrete Pip
Machinery, 98 F.R.D. 740 (E.D. Mo. 1983).

2. Waiver of Protection of Non-Testifying Expert's

Opinions
If the opinions of a non-testifying expert are provided to a testifying
expert, has the party waived protection of opinions known to the consulting
expert? What if an opinion of a consulting expert is provided to a third
party, such as a government agency? Is protection lost, not just for that
document, but for all related communications? “The rule itself does not
mention waiver, and the courts are divided.” In re Polymedica Corp. Sec.
Litig., 235 F.R.D. 28, 35 (D. Mass. 2006) (collecting the few cases on this
point).

3. De-Designating a Testifying Expert

Suppose a lawyer designates a person as a testifying expert, but then
changes her mind. Can she “de-designate” the expert and thus make it so
that, rather than having unfettered discovery of the person, the expert must
be treated as a consulting expert and so discovery can be had only if
“exceptional circumstances” are established? The issue puts various
policies in play and has split the courts and resulted in fact-intensive
decisions. E.g., Commerce & Indus. Ins. Co. v. Grinnell Corp., 1999 WL
731410 (E.D. La. 1999).

Checkpoints

Can you describe the two forms of disclosures that apply to testifying experts?
Can you define when a fact witness is also an expert?
Can you explain what must be in an expert report, and who must submit one?
Can you identify when facts known to or opinions held by a consulting expert?
Chapter 51

Adjudication of Discovery
Disputes

Adjudication of Discovery Disputes

Roadmap
This chapter explains how lawyers must first attempt to resolve discovery disputes by
conferring, and only if that fails can either the party seeking discovery move to compel
disclosure or the party opposing a discovery request move for protection from complying with
it.
This chapter also explains how a party who violates a prior order — either compelling
disclosure or protecting against it — can face additional sanctions.

A. Penalties for Noncompliance with

Discovery Requests and Disclosure
Obligations
In prior chapters, we discussed the rules that create obligations on both
the party serving and the party responding to discovery requests. If one
party believes the other side has violated the rules, then it must first confer
to resolve the dispute. If that fails, a party may move for an order
preventing the discovery or compelling it. (A non-party from whom
discovery is sought may also file a motion to prevent discovery sought
against it.) A party or non-party may use a motion for a protective order to
prevent discovery; and its mirror image, the motion to compel, is used by a
party to force another party (or non-party) to comply with a discovery
request. Sanctions can be imposed on a party, non-party or its counsel for
violating the rules.

1. The Process for Adjudicating Disputes

About Discovery
The rules have been repeatedly amended over the last twenty years to
increase judicial management of cases, particularly with respect to
discovery. Early and increased judicial involvement was seen as a way to
reduce the scope and frequency of disagreements between counsel
concerning the scope of discovery. In addition, the fact that the Rules now
require counsel to consider proportionality before serving a discovery
request also has reduced disputes because it imposes some self-restraint.
But, disputes still occur.
Where parties do disagree, the Rules first require that the parties meet
and confer over their disagreement. FRCP 37(a)(2)(1) (conference required
before a party can move to compel discovery or compliance with initial
disclosure obligation); FRCP 26(c)(1) (conference required before a person
or party may move for a protective order). These “conferences” need not be
formal face-to-face meetings, but they must be meaningful attempts to
resolve the disagreement. In my experience, often after receiving a set of
discovery requests, or after sending back objections and responses, the
parties will negotiate and come to an agreement on the scope of the
requests. See, e.g., Davis v. Precoat Metals, 2002 WL 1759828 (N.D. Ill.
2002) (court noted that plaintiffs limited their requests in scope from those
which were actually served prior to bringing a motion to compel). Most
discovery disputes are resolved in this way, and the requirement of
conference was designed for that to happen more. They are required, and a
motion to compel or for protective order must include a certificate of
conference. Shuffle Master Inc. v. Progressive Games, Inc., 170 F.R.D. 166
(D. Nev. 1996) (denying motion for sanctions where motion was
unaccompanied by certificate of conference).
Courts take the obligation to confer seriously. Courts insist that parties
negotiate over the scope of requests in light of the needs of the case, and to
limit or comply with the requests when the case warrants. See Thompson v.
Dept. of Housing & Urban Dev., 199 F.R.D. 168 (D. Md. 2001)
(admonishing lawyers for not taking into account the stakes in the case and
the volume of information sought in attempting to “set aside their
differences as adversaries and make a good faith effort to reach common
ground on the disputes”). Typically, the certificate of conference is included
at the end of the motion to compel or for protection, and may state simply:
“Counsel has conferred in a good faith effort to secure the information
without court action, but counsel could not resolve the matter and require
the court's involvement.” Lawyers often sign these certificates separately
from the motion itself. If a certificate of conference is omitted, the clerk or
court will reject a motion.
If the conference fails to resolve the dispute, or to resolve it completely,
then a party who believes it is entitled to discovery that the other party, or
non-party, refuses to provide may file a “motion to compel” under Rule 37.
A party or non-party who believes that a party is seeking discovery to
which it is not entitled may file a “motion for a protective order” under
Rule 26(c). This section addresses the more common bases for each motion
and describes their adjudication. They are mirror images of each other.

2. Adjudicating a Party's Motion to Compel

a. The Process for Moving to Compel
Where a party believes that another party is refusing to disclose
discoverable information, it may move for a motion to compel production
of the information. FRCP 37(a)(3)(B). Likewise, if a party believes that
another party failed to make its required disclosures under Rule 26(a), it
may move to compel production. FRCP 37(a)(3)(A). A motion to compel
may be used when a party has entirely failed to disclose or made an
incomplete or evasive disclosure. FRCP 37(a)(4).
Common bases for motions to compel include disagreements over what
is, or is not, “relevant” to a claim or defense. Likewise, often parties will
argue that, although the information sought is relevant, it is too expensive
for the case, duplicative of other discovery which has already been
answered, or otherwise harassing. Another common basis for motions to
compel is the scope of the attorney-client privilege or work product
doctrine: a party will claim privilege over certain communications, and the
party that sought the information (say through a document request) will
move to compel because the parties disagree over whether the information
is protected from discovery, or whether protection has been waived. There
are numerous reasons that lead to discovery disputes.
If a party files a motion to compel, the other parties or persons against
whom it is filed have the opportunity to respond as the chapter on motion
practice points out. See Chapter 28. What happens next depends on whether
the court grants, grants in part, or denies the motion entirely:
 So for example, in Poole v. Textron, Inc., 192 F.R.D. 494 (D. Md. 2000),
the plaintiff moved to compel answers and objections to a set of requests for
admissions that it had served. The court granted the motion to compel in its
entirety. It held the defendant had not been substantially justified in making
excessive qualifications to its answers to 92% of the requests for admission
and so awarded the plaintiff 92% of the attorneys' fees it incurred in
bringing the motion.

b. Violation of an Order Compelling Discovery

Suppose after a motion to compel is adjudicated, a party or non-party
violates an order by not responding to the discovery as the court ordered?
Under Rule 37(b), the court may impose various sanctions, including
striking pleadings, precluding evidence, and other sanctions. See FRCP
37(b)(1), (2). Thus, if a party or non-party loses a motion to compel filed
against it, it faces the prospect of paying attorney fees incurred by the
movant in making the motion; if it violates the order the court issues when
it grants that motion, the party faces losing the ability to introduce evidence
or, even dismissal of its case or entry of default judgment against it. FRCP
37(b)(2).
An example of this latter circumstance is Chrysler Corp. v. Carey, 186
F.3d 1016 (8th Cir. 1999). The district court granted a plaintiff's motion to
compel, but the defendants nonetheless did not comply with the order and,
in addition, engaged in a systematic pattern to avoid complying with the
district court's orders and the Rules. The district court sanctioned the
defendants by striking their answer. The appellate court affirmed, in part
because the district court found that defense counsel had repeatedly lied
during discovery, including denying that responsive documents existed and
making unfounded objections to discovery. Although emphasizing that
dismissal was a rare sanction, dismissal was proper if there has been a
“blatant disregard of the Court's orders and the discovery rules”
accompanied by actual deceit.
Poole v. Textron, Inc., 192 F.R.D. 494 (D. Md. 2000) also involved
violation of an order granting a motion to compel. There, the defendant did
not act reasonably in responding to the district court's order granting the
plaintiff's motion to compel the defendant to produce certain documents.
The court found that the defendant, a large company, had attempted to
stonewall the plaintiff, and as a result imposed sanctions of about $40,000
for violating its order granting the motion to compel.

3. Adjudication of a Party's or Non-Party's Motion

for Protective Order
Rule 26(c) permits a party or a non-party who believes a discovery
request is improper to ask the court to protect it from the request. The party
or person is first required to confer with the party seeking the discovery to
resolve the disagreement. If that fails, the party or person may move the
court for an order protecting it from discovery which exceeds the scope of
discovery and, further, from “annoyance, embarrassment, oppression, or
undue burden or expense.” The rule allows a court deny discovery or “to
regulate the terms, conditions, time or place of discovery.” Pro Billiards
Tour Ass'n. v. R.J. Reynolds Tobacco Co., 187 F.R.D. 229, 230 (M.D.N.C.
1999).
The first step is for the recipient of a discovery request who believes the
request is improper is to confer with the party seeking the discovery. If that
fails to resolve the entire disagreement, then the recipient of the request
may move for a protective order. (And, again, conversely the party seeking
the discovery may move to compel, as discussed above.)
The party or person seeking a protective order must file a motion that
establishes “good cause” to preclude or limit the discovery and show that
“good cause requires [granting the protective order] to protect a party or
person from annoyance, embarrassment, oppression, or undue burden or
expense.” FRCP 26(c). “For good cause to exist, the party seeking
protection bears the burden of showing specific prejudice or harm will
result if no protective order is granted.” Phillips v. General Motors Corp.,
307 F.3d 1206, 1211 (9th Cir. 2002).
An interesting example of the issuance of protective orders arose in
Stalnaker v. Kmart Corp., 71 Fair Empl. Prac. Cas. (BNA) 705 (D. Kan.
1996). There, a female employee brought a claim that her supervisor had
sexually harassed her and created a hostile work environment. To support
her claim, she sought to depose other women who worked in her
department, but who were not parties. She did not argue that they had
witnessed the defendant's harassment of her, or made any claim against
them. Instead, she wanted to depose them to find out if he had sexually
harassed them. The defendant sought a protective order, arguing that such
questions would invade the non-parties' right to privacy. The court
recognized that inquiry into voluntary romantic or sexual relationships
invaded a matter of privacy between the defendant and the non-party
women, but nonetheless held that the plaintiff could inquire about even
voluntary relationships to the extent they showed “conduct on his part to
encourage, solicit, or influence any employee . . . to engage or continue in
such activity.” The court further limited use of the discovery to the pending
suit. The court thus balanced the privacy rights with the need to discover
relevant information.
If the court determines that a protective order is proper, then it may take
any action it deems “just” to protect the moving party from the annoyance,
oppression, undue expense, or embarrassment. That can include ordering
that the discovery be conducted another way (e.g., interrogatories rather
than depositions), that certain matters not be inquired into (as in Stalnaker),
and various other steps or limitations be observed. FRCP 26(c).
If the motion is denied in whole or in part, then the court may enter an
order to the extent that it is granted ordering the party that filed the motion
to produce the information. FRCP 26(c)(2).
 Checkpoints

Can you describe the process for adjudicating motions to compel? Motions for protective orders?
Can you explain the sanctions available when a court grants, denies, or grants in part each motion?
Chapter 52

Summary Judgment:
Adjudication of Claims
Before Trial but Usually
After Discovery Closes

Summary Judgment Roadmap

This chapter explains how summary judgment motions are used to resolve claims or
defenses for which the party with the burden of proof at trial has been unable, despite having
the opportunity during discovery to do so, to produce sufficient evidence to reach a jury on a
claim or defense.
This chapter also explains how courts determine whether there is a “genuine issue” of
“material fact” and the process for adjudicating motions for summary judgment.

A lawyer for a defendant who realizes that even if the factual allegations
in the complaint do not plausibly show a basis for relief should quickly file
a motion under Rule 12(b)(6) or 12(c) to dismiss the claim. There is no
need to wait and the motion will eliminate the expense of discovery and of
litigation generally. If the complaint does state a claim, then the case will
move into discovery.
The filing of a motion for summary judgment is typically the next time
the defendant can test the merits of the plaintiff's case. The most common
use of a motion for summary judgment is for the defendant to show that the
plaintiff, although making a certain allegation, cannot produce evidence to
support that allegation. While Rule 56(b) allows a motion for summary
judgment to be filed even before an answer is filed, or at any time up until
30 days after discovery closes (or as the scheduling order provides) if a
defendant files the motion before the plaintiff has had opportunity for
discovery, the plaintiff can show that it needs time to take discovery. FRCP
56(d). For that reason, usually defendants file motions for summary
judgment are filed shortly after discovery closes. (Timing is discussed more
fully below.)
Summary judgment motions will be filed after discovery and used to
show there is no evidence of something that a party (usually the plaintiff)
bears the burden of persuasion on at trial (e.g., the plaintiff's claim). What
this means is that during discovery, the plaintiff must gather some evidence
of every element of each claim; the defendant should gather evidence to
undermine that evidence. Conversely, the defendant should gather evidence
to support each element of any affirmative defense it has pled, and the
plaintiff should gather evidence to undermine that evidence.
Here is a simple example. Suppose the plaintiff alleges in the complaint
that while she was swimming, the defendant saw her drowning and yet
failed to rescue her. Further, because the law provides that there is no duty
to rescue unless there is a “special relationship” between the plaintiff and
defendant, suppose the plaintiff alleges in the complaint that the plaintiff
and defendant had an attorney-client relationship between them. Suppose,
finally, that under applicable state law, an attorney-client relationship is
sufficient under state law to create a “special relationship” sufficient to
create a duty to rescue.
Thus, the allegations state a claim upon which relief can be granted
because the factual allegations taken as true plausibly show the plaintiff is
entitled to relief. Suppose, however the defendant tells his lawyer that, in
fact, he never had an attorney-client relationship with the plaintiff but
instead had told her to get a different lawyer, and soon after that he saw her
drowning. If that is true and there is no dispute about it, then no reasonable
jury could find there had been an attorney-client relationship. The rules
could make the defendant wait to show that there is no evidence of an
attorney client relationship, despite the allegation in the complaint.
This is where Rule 56 comes in: it moves forward — from trial — the
court's determination that no reasonable jury could find for the plaintiff on
its claim. Why wait until trial if the evidence will be undisputed that the
party with the burden of proof (a plaintiff on each element of a claim, for
example) though given the opportunity during discovery, did not produce
sufficient evidence to support a jury verdict in its favor.
If the party with the burden of proof on an claim lacks any evidence on
just one element on that claim, then a jury cannot find for it. To show a duty
to rescue, the plaintiff must show duty, breach, causation, and damages: if
there is no duty, then the plaintiff loses. If there were no damages, the
plaintiff loses; and so on. No reasonable jury can find for a party with the
burden of proof on a claim or defense if there is no evidence on one or more
of its elements. Thus, summary judgment can be used to point out that the
other party won't have enough evidence (we'll see how much is enough
below) for a reasonable jury to find for it even though it's had an
opportunity to conduct discovery. Summary judgment exists because there
is no reason to wait after discovery but until trial to decide that there is no
evidence.
Notice that in the example above the defendant moved for summary
judgment on an issue that the plaintiff has the burden of proof on: an
element of the plaintiff's claim. Now think about the defendant and an
affirmative defense. Suppose the defendant in this same duty to rescue case
has pled an affirmative defense of statute of limitations, alleging that the
plaintiff had failed to file suit within two years from the date of the incident,
as required by the applicable state statute of limitations. Suppose the
defendant believes no reasonable jury could reject that defense — the
evidence is so overwhelming that no reasonable jury could find that the
plaintiff's claim was not barred by limitations.
In that circumstance, the defendant would be moving for summary
judgment on an issue that it has the burden of proof on at trial: its
affirmative defense. It's not enough for the defendant to show there's no
evidence on an element (indeed, it loses if that happens; be sure you
understand why). Instead, the defendant has to show the opposite: that there
is so much evidence that no reasonable jury could not find that it had not
proven its affirmative defense. That, obviously, is a lot harder to
accomplish: it's easier to show there's no evidence of one element of the
other side's issue that to show there's so much evidence of every element of
your issue that a reasonable jury couldn't come out any other way than for
you.
We'll come back to this more below, but that example should make you
realize that it is critical to identify whether the party moving for summary
judgment is the party who bears the burden of proof on the claim or defense
that is the subject of the motion, or not. Now for the details.

A. Timing: When Motions for Summary

 Judgment Can Be and Typically Are
Filed
Either party may move for summary judgment at any time, up until 30
days after discovery closes or the scheduling order provides. FRCP 56(b).
Nonetheless motions for summary judgment are typically not filed until or
near the conclusion of discovery. There are several reasons why that is so.
First, Rule 56(d) allows a party opposing a motion for summary judgment
to file an affidavit with the court explaining why it needs time to conduct
discovery to oppose the motion. Thus, as a practical matter a party who
files a motion for summary judgment will not have the motion promptly
decided by the court: instead, filing the motion will simply give the
opposing party an early peak at the party's theory as to why a trial will be
unnecessary. Other reasons are more practical, and relate to the fact that
often a party will not be able to get evidence to support a summary
judgment motion without taking the deposition of the other party's
witnesses or of third parties. Thus, although a party can file a motion for
summary judgment early in the case, as general practice they are filed once
discovery ends.

B. What a Court May Consider in

Adjudicating
a Motion for Summary Judgment
Unlike motions under Rule 12(b)(6) or Rule 12(c), which are limited to
the pleadings, in deciding a summary judgment motion the court may
consider admissible evidence submitted to the court by either party in the
motion, the response, or the reply. The rule allows the parties to submit, and
the court to consider, discovery responses, deposition testimony, admissible
documents, answers to interrogatories, answers to requests for admissions,
and also “affidavits.” FRCP 57(c).
“Affidavits” are signed, written, sworn statements that lawyers obtain
from their own clients or non-parties. (Ethical rules will generally prevent a
lawyer from obtaining an affidavit from an opposing party who is
represented by counsel in a matter.) So, for example, a lawyer representing
a defendant accused of failing to rescue the plaintiff who wants to show that
there was no attorney-client relationship between the plaintiff and defendant
might obtain an affidavit from the defendant in which the defendant swears
that he never had an attorney-client relationship with the plaintiff. Or,
defense counsel might obtain an affidavit from his client's secretary in
which the secretary testifies that he has examined the books and records of
the defendant's law firm and no document showed that the law firm had
ever represented the plaintiff. Or, defense counsel could do both.
Notice that if a party relies on an affidavit in a summary judgment
proceeding, Rule 56(d) allows the opposing party the opportunity to file a
motion that includes an affidavit that explains why it needs time to obtain
discovery or other affidavits. Finally, note that if an affidavit is made in bad
faith, the court may impose sanctions. FRCP 56(h).

C. The Burden of Persuasion is on the

Party Moving for Summary Judgment
Movant
1. The Burden of Persuasion
Why does a party gather together discovery responses and affidavits to
file a motion for summary judgment? It does so because it believes the
court should decide, before trial, that there is nothing for the jury to decide
at trial. Again, what a motion for summary judgment does is move forward
in time from the middle of trial to the end of discovery the question of
whether there is enough evidence so there is something for the jury to
decide. The party moving for summary judgment must persuade the court
there is no evidence. Specifically, the movant must show that “there is no
genuine issue as to any material fact and that the movant is entitled to a
judgment as a matter of law.” FRCP 56(a). Let's break that down further.

a. No Genuine Issue of Material Fact

The moving party must show that there is no real dispute — that's what
“genuine issue” means — over an important (“material”) fact. The moving
party has the burden of demonstrating the absence of any disputed material
facts. In deciding whether the movant has carried that burden the court must
resolve all ambiguities and draw all inferences in favor of the party against
whom summary judgment is sought. Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986).
i. When Is a Fact “Material”?
“Material” means “important.” If it doesn't matter to the success or
failure of the claim or defense that is the subject of the motion, then it's
immaterial and a dispute over the fact doesn't matter. Suppose, for example,
that the plaintiff in our duty to rescue hypothetical had alleged that the
defendant lawyer had represented the plaintiff in a breach of contract suit. It
would be immaterial if the defendant came forward and showed that, in
fact, the defendant had represented the plaintiff, but only in a car wreck
case: what matters to the element of whether a special relationship existed
is whether there was an attorney-client representation, not what any
representation was about.
Thus, to know whether a fact is material to the outcome of a dispute, the
court must be guided by the substantive law. The key question is whether
the fact important to an element of the claim or defense that is the subject of
the motion.

ii. When Is There a “Genuine Issue”?

A factual dispute is “genuine” only when there is “sufficient evidence
favoring the non-moving party for a jury to return a verdict for that party.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). An example of
the need to show a genuine issue of material fact that sheds light on the
meaning of the phrase occurred in Bias v. Advantage Int'l., Inc., 905 F.2d
1558 (D.C. Cir. 1990). There, Len Bias, a Maryland basketball star died of
a cocaine overdose shortly after being drafted in the first round of the NBA
draft. His parents sued Advantage, which had been Len's agent, contending
that it had agreed to but had failed to buy life insurance on Len's life. The
insurance company moved for summary judgment, contending that the
plaintiff could not prove that its breach of contract caused any harm.
The defendant in moving for summary judgment relied on deposition and
affidavits from two groups of people. First, it filed evidence with the court
showing eyewitnesses had seen Len use cocaine at various times. Second, it
filed evidence showing that every insurance company inquired about drug
use, and would deny coverage to anyone who admitted drug use.
(Obviously, the parents could not contend that Len would have lied and so
avoided the obligation.) Thus, the defendant asserted that there was no
causation: even if it had breached the contract by not applying for insurance
for Len, he would not have been issued a policy because (a) he used
cocaine and (b) every insurer asked about drug use before issuing a policy
and no insurer would issue a policy to a cocaine user.
To try to establish there was a “genuine issue” on both points (showing
there was a dispute as to one would have been sufficient), the parents
introduced (a) affidavits from people who said they had never seen Len use
cocaine and (b) affidavits from insurance companies that said they did not
inquire at certain stages of the application process about drug use. The
district court granted the defendant's motion for summary judgment,
holding that the plaintiffs had failed to establish there was a genuine dispute
over causation.
The appellate court affirmed. The fact that some people had not seen Len
use cocaine on other days did not create a dispute with those who swore
they had seen him use cocaine on certain other days. Further, the fact that
some insurers did not inquire about drug use at certain stages of the
application process did not create a dispute with plaintiff's showing that all
of them did before issuing a policy and none would issue a policy to a
cocaine user.
Thus, the moving party carries the burden to show that there is no
“genuine issue” — no “disputed issue” — and in Bias the defendant insurer
did so. We'll come back to this point below when we talk about the
procedure of deciding summary judgment motions, but to avoid having
summary judgment rendered against it, the non-movant can show that there
is a dispute about the issue targeted by the movant. So, for example, in Bias
Len's parents could (only hypothetically, it seems) have obtained affidavits
from other people who had been at the parties and places where Len
supposedly used cocaine in which they swore, for example, they were with
Len the whole time and he never did cocaine at the parties where
defendants' witnesses said they saw him do so. That would create a dispute
of material fact on the first issue: who is telling the truth about whether he
used cocaine at those parties? Or, Bias's lawyers could have obtained
evidence that some insurance companies insured admitted cocaine users:
thus, there would be some evidence for a jury to find the defendant could
have obtained an insurance policy.

b. When Is a Movant “Entitled to Judgment as a

Matter
 of Law”?
As noted above, it's easier for a party to obtain summary judgment when
the motion is directed to an issue that the party moving for summary
judgment does not have the burden of proof on at trial. From the defendant's
perspective, for example, it's easier to show there's no evidence on one
element of plaintiff's claim than it is to show that there's so much evidence
on every element of an affirmative defense that no jury could decide against
the defendant. Although we haven't talked about in using the terminology
yet, that fact is a reflection of the phrase “the moving party is entitled to a
judgment as a matter of law.”
Before we get into the details, when will this be an issue? If there is a
disputed issue of material fact, then summary judgment is improper. If there
is no disputed issue of material fact, why shouldn't the court have to either
grant summary judgment for one side or the other?
Simply because there's no dispute about material facts doesn't mean that
the moving party is entitled to judgment — it doesn't mean no jury could
come out for the other side. Indeed, often the opposite is true. Suppose, for
example, in the Bias case one person testifies that he was with Bias at every
one of the parties and didn't see him use cocaine. That means there is a
disputed issue of fact on whether he used cocaine at those parties, or not.
Does that mean a jury must believe that witness, when ten others say they
saw Bias use cocaine at those parties? No, it simply means that there is
some evidence that could support a jury's verdict, not that a jury must rule
for it. Now to look at the second step.

2. The Burden of Production, Not Persuasion,

Is Usually What Matters
Your understanding what “entitled to judgment as a matter of law” means
starts with understanding this: How much evidence does a party who has
the burden of proof on an issue (a plaintiff on its claim; a defendant on an
affirmative defense, for instance) have to produce during trial for there to
be something for the jury to decide? The answer to that question is
measured, not just on a claim-by-claim basis, but on an element-by-element
basis. (Likewise, affirmative defenses also have elements, and the same
analysis applies to the amount of evidence the defendant must produce on
an element-by-element basis.)
 It may be helpful to think of a claim or defense as a series of boxes. Each
element is represented by one box, and the party with the burden of proof
must produce “enough” evidence in each box for a reasonable jury to find
for the party. Again, that doesn't mean the jury must find for that party, just
that it can. So, for example, you might think of a negligence claim in this
fashion:

In terms of Rule 50(a)(1) (the rule that governs “judgments as a matter of

law,” and to which Rule 56(a) refers) puts the burden of production in these
terms: by the time a party with the burden of proof on an issue finishes
putting on its evidence (so, by the time the plaintiff rests), it must during
trial have put into evidence a “legally sufficient evidentiary basis for a
reasonable jury to find for that party on that issue.” If not, then if the
defendant moves for “judgment as a matter of law,” then the plaintiff should
lose. To break this down further, in terms of the example above, by the time
the plaintiff rests at trial, there must be “legally sufficient” evidence in each
box.
Summary judgment moves this question of is there sufficient evidence
earlier, from the middle of trial to the end of the discovery period. When a
party is moving for summary judgment against the party that has the burden
of proof — for example, if the defendant is moving for summary judgment
on a plaintiff's claim — the defendant has the burden to show that the
plaintiff has not come forward — has not gathered enough evidence durig
discovery — with “enough” evidence in every box. If discovery shows that
there is no evidence of an element of a claim — no evidence in one or more
boxes — then because a jury could not find for the plaintiff at trial, the
defendant is entitled to summary judgment: the plaintiff had the chance in
discovery but found no evidence.
So, if one box — say duty — is completely empty (there is, for example,
no evidence of any special relationship between the plaintiff and
defendant), then the plaintiff has not met its burden of production on an
element on which it bears the burden of proof. It doesn't matter if the
defendant's failure to rescue caused the plaintiff damages, because there
was no duty. This element-by-element analysis is critical in legal reasoning
and in understanding summary judgment.

a. How Much Evidence Is Sufficient?

Clearly, producing no evidence is legally insufficient evidence. On the
other end of the spectrum, if there's undisputed and overwhelming evidence
of an element, then obviously that is enough for a reasonable jury to find
for the party. Suppose, for example, everyone concedes that the plaintiff
and defendant had a “special relationship” and it is in fact admitted at trial.
Or the evidence is that every insurance company agreed to insure cocaine
users. Clearly, that would be “legally sufficient.”
The difficult conceptual issue is the middle ground: when is some
evidence still not enough? The courts state that if there is more than a
“scintilla” of evidence on an element, then judgment as a matter of law is
improper. If there is at least a scintilla of evidence in the box, in other
words, then there is something for the jury to decide.
Note that the question is not whether there is “more” evidence against
that “scintilla.” If there is a “scintilla” of evidence, then there is something
the jury must decide even if there is a lot of evidence to the contrary. All
that shows is that there's a disputed issue of fact, not that the party with the
burden of proof didn't meet its burden to produce more than a scintilla of
evidence.
Return to our duty to rescue case. Suppose the defendant moves for
summary judgment and to support it produces affidavits from the attorney-
defendant, deposition testimony of her secretary, and the deposition of
another witness all of which states that the attorney had never represented
the plaintiff. If the plaintiff in opposition to the defendant's motion produces
(submits to the court) his deposition testimony where he testified that he
had met with the defendant as a lawyer for an hour. If believed, that
deposition testimony is some evidence the plaintiff had an attorney-client
relationship with the defendant, and so some evidence of the “special
relationship” element of the plaintiff's duty to rescue claim. That would be
sufficient evidence for the jury to find for the plaintiff because plaintiff has
produced more than a scintilla of evidence on the element.
In other words, don't confuse avoiding summary judgment with winning
at trial. Juries will weigh the plaintiff's weak evidence with the defendant's
strong evidence. But credibility is for the jury: judges in summary judgment
motions cannot weigh the movant's evidence against the non-movants
“scintilla” to decide whether or not there's a scintilla. If there's more than a
scintilla, then summary judgment is improper, regardless of the credibility
of the evidence and weight to the contrary. Who to believe is for the jury to
decide (in most cases!).

D. The Summary Judgment Process:

Shifting Burdens of Production
While the burden of persuasion is always on the summary judgment
movant to show there is no genuine issue of material fact and that it is
entitled to judgment as a matter of law, summary judgment itself is litigated
with shifting burdens of production.
Think about those boxes, above, and the fact that summary judgment is
available to both plaintiffs and defendants and as to both claims and
defenses. A party who is seeking to obtain summary judgment on an issue
on which the other party bears the burden of proof at trial has an easier
burden: if there is not at least a scintilla of evidence for each element of a
claim — in every box — the party with the burden of proof loses. Why?
Because there is no dispute about a material fact because there is no
evidence — not even a scintilla — to support that fact. But, as shown
above, if a party moving for summary judgment has the burden of proof at
trial, it must show that there is “so much” evidence and no dispute about it
that no reasonable jury could find for the other side. Thus, a key step in
determining what “the party is entitled to a judgment as a matter of law”
means is determining whether, or not, the party moving for summary
judgment has the burden of proof at trial on the subject of the motion.
In the vast majority of cases, the party moving for summary judgment
will not have the burden of proof at trial. In those circumstances (e.g., the
defendant is moving for summary judgment on the plaintiff's claim), the
movant (defendant) must persuade the court there is no dispute about a
material fact. FRCP 56. How does it do so? It must support its assertion that
there is no dispute about a fact by citing to “particular parts of materials in
the record, incldugin depositions, documents, electronically stored
information, affidavits or declarations, stipulations (including those made
for purposes of the motion only), admissions, interrogatory answers, or
other materials” or, instead, “showing that the materials cited do not
establish the absence or presence of a genuine dispute, or that an adverse
party cannot produce admissible evidence to support the fact” FRCP 56(c)
(1). What does that mean? We turn there next.

1. The Movant's Initial Burden of Production

and the Shift to the Responding Party
If a party moves for summary judgment, the burden of production it faces
depends on whether it bears the burden of proof at trial on the claim or
defense for which it is moving for summary judgment. Only if the movant
meets its burden of production does the responding party have any
obligation. This section summarizes the movant's burden of production and
the responding party's burden.

a. The Burden of Production If the Party Moving

for Summary Judgment Does Not Have the
Burden of Proof at Trial
The most common use of summary judgment is defensively: the party
against whom a claim is asserted (typically a defendant) will move for
summary judgment with respect to the claim by contending that the plaintiff
cannot produce evidence on each element of the claim. The Supreme Court
in Celotex v. Catrett, 477 U.S. 317 (1986) addressed this fact pattern. The
plaintiff brought a product liability claim against several asbestos
manufacturers, one of whom moved for summary judgment, contending
that the plaintiff could not produce evidence that its product (as opposed to
something else) had caused the plaintiff's cancer.
What exactly must a defendant in that circumstance do? Must it
affirmatively negate the plaintiff's claim — i.e., show that it could not have
been its product that caused the harm? Or, is it sufficient to show that the
plaintiff can't prove that it was the defendant's product that caused the
harm? If the latter, how does the defendant prove the plaintiff can't prove it?
How does a party show there isn't “more than a scintilla” of evidence in
one or more boxes supporting the other side's position? It must, in its
motion, show the materials in the record — the depositions, interrogatory
answers, and other items in Rule 56(c) — show there is no genuine disputed
issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In
other words, a movant for summary judgment cannot simply file a motion
that says, “there's no evidence of” an element: it must show that the
discovery in the case shows there is no evidence of an element of the
plaintiff's claim.
Again, the defendant cannot simply say “the plaintiff has no evidence of”
an element. If the party moving for summary judgment does that, it fails to
discharge that burden of production, then the court should deny the motion
for summary judgment without even addressing the type of showing needed
by the non-movant. Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th
Cir. 1991). In other words, if a defendant moves for summary judgment but
fails to show that the record fails to show there's no genuine dispute of
material fact, the plaintiff technically doesn't even have to respond to the
motion (of course, it will, and in its response it will point this defect out)
and it would be improper to grant the defendant's motion.
The moving party instead of saying “there is no evidence” must instead
support its assertion that there is no genuine issue of material fact by citing
to the discovery materials and (optionally) affidavits and explaining why
they show there is no evidence. The moving party has a “burden of
production” to cite to the record which shows there is no evidence on an
issue. The Celotex Court thus held that the movant must demonstrate in its
motion that the non-movant has, through discovery, been unable (or by
affidavit shows that it will be unable) to produce any evidence at trial
supporting an essential element of an issue on which the non-movant bears
the burden of proof.
But, if the movant does not meet its burden of production — if it does not
cite support for its assertion that there is no disputed issue of material fact
— that does not shift the burden onto the non-movant to come forward with
evidence to show there is some evidence to support the challenged element.
Only if the motion cites the record and shows why that establishes the lack
of evidence must the non-movant produce to the court in its opposition to
the motion evidence sufficient to demonstrate an issue for trial. Celotex,
477 U.S. at 323

b. The Burden of Production If the Party Moving

for Summary Judgment Also Has the Burden of
Proof at Trial
It is much less frequent for a party to believe it has a Rule 11 basis to
move for summary judgment on an issue on which it bears the burden of
proof at trial, but it does happen. The party must show that there is no
genuine issue of disputed fact and that it is entitled to judgment as a matter
of law. Thus, the movant must show that (1) there is no genuine issue of
material fact and (2) as a matter of law the evidence is so compelling or
conclusive that it is entitled to judgment; no reasonable jury could not find
for it. Calderone v. U.S., 799 F.2d 254, 259 (6th Cir. 1986). For that reason,
it is much rarer for a party to move for, let alone for a court to grant,
summary judgment offensively — on an issue the party has the burden of
persuasion on at trial. See, e.g., Arbegast v. Bd. of Ed. Of S. New Berlin
Central H.S., 480 N.E.2d 365 (N.Y. 1985) (defendant was properly granted
JMOL on affirmative defense of assumption of the risk to negligence claim
by plaintiff who had ridden a donkey in a game of “Donkey Ball” after
being told that donkeys buck and that she could play “only at her own
risk”).
Recall that a motion can be directed to just an element of a claim or a
defense. If a plaintiff (or defendant) believes it is entitled to partial
summary judgment, it may not be worth the cost. For example, if a plaintiff
believes that it is clear that the defendant owed it a duty to rescue — no jury
would find there was not a special relationship — filing that motion likely
would not save much time or money, and there will still be a trial on breach,
causation, and damages. So, these “offensive” motions are rarer but they do
happen.

2. The Burden of Production Shifts Only if the

Summary Judgment Movant Meets Its Burden
of Production
If the moving party does not satisfy its burden of production, it is not
proper to grant summary judgment. Why? Because Rule 56 authorizes entry
of summary judgment only when the party seeking it has shown that there
is no genuine issue of disputed fact and the movant is entitled to judgment
as a matter of law. So, if a defendant simply says, without citing to the
record, “plaintiff has no evidence to support a special relationship,” the
court should deny the motion.
Significantly, however, the non-movant must raise the failure of the
movant to meet its burden of production, or this argument is waived. Logan
v. Commercial Union Ins. Co., 96 F.3d 971, 978 (7th Cir. 1996) (citing
Celotex). Thus, a non-movant should always examine whether the movant
has satisfied its burden of production. Only if the party moving for
summary judgment makes the required showing (depending on whether it
has the burden of persuasion at trial on the issue, or not), has it carried its
burden of production on the motion.
In response to a motion for summary judgment that does meet the burden
of production, the non-movant cannot rest on its pleadings, but instead must
use evidence from depositions, answers to interrogatories, requests for
admission, as well as affidavits in its response in opposition to the motion
to show that a genuine issue of material fact remains, requiring trial. See
Celotex at 324. In determining whether the non-movant has identified a
“material” issue of fact for trial, courts look to the applicable substantive
law, and “[o]nly disputes that could affect the outcome of the suit under
governing law will properly preclude the entry of summary judgment.”
McGinn v. Burlington Northern R.R. Co., 102 F.3d 295, 298 (7th Cir.1996).
As noted above, a factual dispute is “genuine” only when there is
“sufficient evidence favoring the non-moving party for a jury to return a
verdict for that party.” Anderson, 477 U.S. at 249 (1986). Hence, a
“metaphysical doubt” regarding the existence of a genuine fact issue is not
enough to stave off summary judgment, and “the non-movant fails to
demonstrate a genuine issue for trial ‘where the record taken as a whole
could not lead a rational trier of fact to find for the non — moving party. . .
.’” Logan, 96 F.3d at 978 (quoting Matsushita, 475 U.S. at 587 (1986)).

E. Examples with Explanations and a

Flow Chart
1. Examples with Explanations
Several oft-cited cases all adjudicated motions filed by the party that did
not have the burden of proof at trial.
In Celotex Corp. v. Catrett, 477 U.S. 317 (1986) for example, the
plaintiff brought a products liability claim against several asbestos
manufacturers, alleging that her husband had died as a result of exposure to
their products. One element of that claim is that the defendant made the
product that injured the person. The defendant moved for summary
judgment on the plaintiff's claim. In its motion it met its burden of
production by showing that during discovery the plaintiff had not identified
in response to an interrogatory any person who knew that the plaintiff's
husband had been exposed to defendant's products. In that way, the
defendant showed there was less than a scintilla of evidence to support an
element of the plaintiff's claim. (In response to the defendant's motion, the
plaintiff had sought to show that it had more than a scintilla of evidence
supporting this element by submitting with its opposition to the motion
three items: the deposition of the husband and two letters, each of which
tended to suggest that the husband had been exposed to defendant's
products.) The Court held that the defendant had met its burden of
production, and remanded for consideration of whether the plaintiff had met
its burden to show that there was more than a scintilla of evidence to
support the element of its claim.
In Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986), the plaintiff
brought a defamation claim against a publisher. Under the circumstances of
the case, the First Amendment required that the plaintiff prove each element
of its case, not just by the usual “preponderance of the evidence” standard,
but by clear and convincing evidence. In addition, one element of a
defamation claim under the circumstances was “actual malice” by the
defendant in publishing the article. The defendant moved for summary
judgment, arguing that there had to be more than a scintilla of clear and
convincing evidence for each element of the defamation claim, and it was
lacking. The defendant met its burden of production by including with its
motion for summary judgment an affidavit of the author of the allegedly
defamatory article explaining that he had spent a lot of time substantiating
the facts in the article and still believed them to be true. Defendant
contended plaintiff could not produce more than a scintilla of clear and
convincing evidence to support its claim.
The Court held, first, that the higher standard of proof did matter on
summary judgment: “in ruling on summary judgment the judge must view
the evidence presented through the prism of the substantive evidentiary
burden.” Thus, the question of whether there was more than a scintilla had
to be viewed in light of the fact that it had to be clear and convincing
evidence. The appellate court had not applied this standard, and so the
Court reversed and remanded the case.
Finally, in Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475
U.S. 574 (1986), the Court addressed summary judgment in the context of a
complex antitrust suit. Plaintiff claimed that defendants had conspired to
price television sets below cost to drive the plaintiff from the market. One
element of that claim was intent: the plaintiff had to show that they priced
low to hurt it, not just to compete by gaining sales. The defendants moved
for summary judgment, contending plaintiff could not adduce any evidence
of that intent. They met their burden of production by showing there was no
“smoking gun” direct evidence of intent, and that it was as plausible that
they had lowered prices in order to gain market share, rather than to drive
the plaintiff out of business.
The Court held that the defendants had met their burden of production,
and the plaintiff as a result should have been required to come forward with
“sufficiently unambiguous” evidence to support this element of its claim,
and remanded for it to do so. The Court emphasized that it was not enough
to create metaphysical doubt over the defendants' plausible inference that
their intent had been to compete, not monopolize: because the evidence
gave rise to the reasonable inference that defendants had acted legally, on
remand the plaintiff “must come forward with more persuasive evidence to
support their claim than would otherwise be necessary.”

2. A Flow Chart
 Checkpoints

Can you explain why it is more difficult for the party with the burden of proof on an issue at trial to
obtain summary judgment than otherwise?
Can you explain when a fact is “material” and what impact it has on the propriety of summary
judgment when there is a dispute over a material fact?
Can you explain how a party must “point out” that the other side lacks evidence on an element of its
claim or defense?
Chapter 53

The Final Set of Required

Disclosures: The Pretrial Order

Pretrial Order Roadmap

This chapter explains the requirements for preparation of the final pretrial order.

In Chapter 43 we saw that each party is required to unilaterally initially

disclose the “good stuff” to the other parties. In Chapter 50, we saw that
each party is also required to disclose expected expert testimony to the
other parties, sometimes in the form of reports. The third and final form of
required disclosures comes in the form of the pretrial order, which the
parties are jointly required to prepare and submit to the court. This
document will effectively override the pleadings and becomes the roadmap
for trial for both the court and the parties.
The process described by Rules 26(a)(3) and 16 and is frequently
modified by local rule or custom, under which the parties are required to
jointly prepare and file a pretrial order. Nonetheless, we'll start out with
explaining what that Rule requires before briefly turning to the more
common form of jointly prepared pretrial orders required by the courts
today.

A. Pretrial Disclosures Required by Rule

26(a)(3) 30 Days Before Trial
The two-step set of filings set out in Rule 26(a)(3) is usually not
followed; instead, the one-step set of filings discussed in the next section is
usually required by a court's local rules. But the rules gives the basics for
understanding what typically happens.
As envisioned by Rule 26(a)(3), thirty days before trial (or as per the
Rule 16(b) scheduling order), each party must file with the court and
provide to each other party the following information, unless it is to be used
solely for impeachment:
(i) the name and, if not previously provided, the address and telephone
number of each witness — separately identifying those the party
expects to present and those it may call if the need arises;
(ii) the designation of those witnesses whose testimony the party
expects to present by deposition and, if not taken stenographically, a
transcript of the pertinent parts of the deposition; and
(iii) an identification of each document or other exhibit, including
summaries of other evidence — separately identifying those items the
party expects to offer and those it may offer if the need arises.
Paragraph (i) requires preparing a witness list, categorizing the witnesses
by whether the party expects that it “may call” or “will call” that person to
testify at trial. This is commonly referred to as a “witness list.”
Paragraph (ii) requires preparing a “deposition designations” or “depo
degs” as they're commonly referred to. To prepare this, lawyers must go
through the depositions they have taken and decide which testimony they
expect to offer, and provide a written list designating it page by page and
line by line.
Paragraph (iii) requires preparing an “exhibit list.” Each party must
identify the documents and other physical evidence that it expects to, or
may, offer at trial. Typically, a party will examine the documents that it used
as exhibits at depositions and prepare a list identifying those exhibits so that
the parties can tell that the document is the same as the one used at the
deposition.
Thus, the first step for each party to file and provide this information to
each other party. Then, fourteen days (or by any deadline in a Rule 16
scheduling order) after each party files this information, each party then
does the second step: object to the other party's submissions. FRCP 26(a)(3)
requires two objections be made or they will be waived. First, each party
state its objections to the extent that the deposition designations are not
permitted by Rule 32. Second, with respect to both the deposition
designations and the exhibits listed, each party must state any evidentiary
objection it may have, except for those arising under Federal Rule of
Evidence 402 or 403. Thus, for example, if a document listed on a party's
witness list contains hearsay, the opposing party must object to that portion
of the document or it waives the objection. (Rule 402 and 403 relate to lack
of relevant and unfair prejudice; those objections need not be made.) The
objections made in this second step, under the rule, must be filed and
provided to other parties within 14 days of the filing of each party's original
filing of its witness list, deposition designations, and exhibit list.
Once these two-steps of filings are complete, then the trial court then has
this material in advance of the trial so that it can rule on any objections, or
at least be prepared to do so.

B. The More Common, Jointly Prepared

Pretrial Order and Commonly Required
Additional Materials
It is much more common for parties to be required by local rule or as part
of the Rule 16 scheduling order to prepare, jointly, a pretrial order that
includes materials required by Rule 26(a)(3) in a format that is a bit more
helpful to the district court, and to also include additional information to get
the court up to speed on the legal and factual issues likely to be presented at
trial.
Specifically, whether by local rule or standing order, most federal courts
require the parties do the two steps, but file only a joint pretrial order. Thus,
each side will first provide to the other the materials required in the first
step, above, but they do not file it with the court. Then, they make
objections to each other's witnesses and documents, and combine those
materials into one filing with the court, not four filings, as the rule would
suggest occurs.
In addition to the materials required by Rule 26(a)(3), many courts
require the parties to provide a summary of the claims and defenses and a
“trial brief” from each side laying out its position of the law and facts. This
approach permits the trial court to get an advanced, organized look at the
legal and factual issues for trial. In addition, courts often require the parties
to lay out which claims and which defenses pled in their pleadings they
were going to actually take to trial. (It's common for a party to plead several
claims or defenses, but to not actually try each claim or defense. When a
lawyer is drafting a complaint or answer, she doesn't know how the
evidence will turn out and so often pleads multiple claims or defenses just
in case.)

C. Impact of the Pretrial Order

on Subsequent Events
Suppose after the parties submit the pretrial order, or their submissions as
required by Rule 26(a)(3), a party realizes it omitted a critical document
from the exhibit list, or deposition testimony from the designations, or
witness from the witness list? Can a party freely amend the pretrial order?
Rule 16(e) ends with this sentence: “The court may modify the order
issued after a final pretrial conference only to prevent manifest injustice.”
This is a difficult standard to reach, but courts consider “the need for doing
justice on the merits between the parties (in spite of the errors and
oversights of their attorneys) against the need for maintaining efficient
procedural arrangements.” Laguna v. Am. Export Isbrandtsen Lines, 439
F.2d 97 (2d Cir. 1971). As another court put it, although the rule “does
impose some restraint on the trial court's normal broad discretion in
decisions to amend pleadings and pretrial orders, Rule 16(e) does not
supplant the court's discretion.” Schmitt v. Beverly Health & Rehab. Serv.,
Inc., 993 F. Supp. 1354, 1365 (D. Kan. 1998).
The countervailing circumstance is the fact that a pretrial order is due
only after the parties have gone through discovery and will be on the eve of
trial. So, it “manifest injustice” can arise because of the sunk cost of
litigation and the burden on the courts and parties. So, in U.S. v. First Nat'l
Bank of Circle, 652 F.2d 882 (9th Cir. 1981), the federal government sued a
bank. The government claimed that the bank had failed to withhold certain
taxes on loans that it made to a builder, an obligation imposed by a federal
statute on banks that made certain loans. The bank in the final pretrial order
had agreed with a statement that it had made loans covered by the statute.
On the first day of trial, however, the bank put on evidence that in fact it
had not made any loan covered by the statute. The trial court granted
judgment to the bank. On appeal, the court held that the district court had
erred in modifying the final pretrial order to permit introduction of this
evidence since doing so caused substantial prejudice to the government.
The court emphasized that in determining whether to permit an amendment
to a pretrial order to allow evidence not included in it, the district court
should measure the prejudice to the party seeking the amendment, the
prejudice to the party opposing it, the impact of such a late modification on
the proceedings at such a late stage, and the degree of willfulness, bad faith
or inexcusable neglect by the party seeking modification. See McKey v.
Fairbairn, 345 F.2d 739 (D.C. Cir. 1965) (holding district court did not
abuse its discretion in denying plaintiff leave, at trial, to amend final pretrial
order to change theory of liability).
Thus, if an exhibit, witness, or deposition designation is omitted, or if the
court requires that claims or defenses also be included in the party's
pleading, and one is omitted from the final pretrial order, it may be waived
or abandoned unless the party can establish “manifest injustice” would
result. As one court explained:
While pretrial orders entered earlier in the life of a case often deal with
interstitial questions like discovery staging and motions practice and
are relatively easy to amend as a result, a final pretrial order focused
on formulating a plan for an impending trial may be amended “only to
prevent manifest injustice.” Fed. R. Civ.P. 16(e). Even that standard
isn't meant to preclude any flexibility — trials are high human dramas;
surprises always emerge; and no judge worth his salt can forget or fail
to sympathize with the challenges the trial lawyer confronts. For all
our extensive pretrial procedures, even the most meticulous trial plan
today probably remains no more reliable a guide than the script in a
high school play — provisional at best and with surprising deviations
guaranteed. See, e.g., Sill Corp. v. United States, 343 F.2d 411, 420
(10th Cir. 1965) (pretrial orders should not be treated as “hoops of
steel”). At the same time, the standard for modifying a final pretrial
order is as high as it is to ensure everyone involved has sufficient
incentive to fulfill the order's dual purposes of encouraging self-editing
and providing reasonably fair disclosure to the court and opposing
parties alike of their real trial intentions. See, e.g., Case v. Abrams, 352
F.2d 193, 195 (10th Cir. 1965) (“A policy of too-easy modification not
only encourages carelessness in the preparation and approval of the
initial order, but unduly discounts it as the governing pattern of the
trial.” (quoting A. Sherman Christenson, The Pre–Trial Order, 29
F.R.D. 362, 371 (1961))).
Monfore v. Phillips, 778 F.3d 849 (10th Cir. 2015).
If a party has included a claim in a pleading, but not in the pretrial order,
then amending the pretrial order will cure the problem. What if the plaintiff
had never pled the claim which it seeks to add to the final pretrial order?
The final pretrial order supplants the pleadings and controls from its entry
forward. FRCP 16(d). Thus, if the final pretrial order is amended, there is
no reason to seek amendment of the pleadings. Consequently, unlike a party
who is seeking to amend a scheduling order in order to amend a pleading, a
party seeking to amend a final pretrial order need only meet the
requirements of Rule 16(e), not both it and Rule 15(a).

Checkpoints

Can you describe what each party must include in the final pretrial order?
Can you explain how to analyze a motion to amend the pretrial order?
Chapter 54

Adjudication of Claims
by Trial

Adjudication of Claims by Trial Roadmap

This chapter identifies the procedures that take place prior to taking testimony that relate to
the Rules, including the filing of motions in limine, the question of whether a jury will decide
a claim, and the process of jury selection.
This chapter also explains briefly the turn-taking nature of civil trials, and how the Rules
allow, but limit, the use of discovery at trial.
This chapter also explains how Rule 50(a) allows a judge to grant “judgment as a matter of
law” against a party if it fails to produce sufficient evidence on an issue on which it bears the
burden of proof.

Your evidence and trial practice classes will focus more upon trial
procedure than will your civil procedure class. This chapter provides brief
but important context for much of pre- and post-trial practice, describes the
extent to which discovery responses may used at trial, the basics of how to
object at trial, and summarizes the trial process.

A. Pretrial Motions in Limine

Usually the local rules require that the final pretrial order include any
pretrial motion that a party wants resolved. Many of the motions authorized
by the Rules can be raised at trial, such as motions for separate trial,
consolidation, and the like.
One motion that is not mentioned in the Rules but which is extremely
common is the motion in limine. This motion essentially permits a party to
obtain a pre-trial ruling on admissibility of certain evidence prior to trial.
Suppose, for example, that defense counsel believes that plaintiff's counsel
will attempt at trial to get before the jury some damaging fact about the
defendant that defense counsel believes is irrelevant to the case. Defense
counsel can prepare a motion in limine to advise the trial court of the
expected dispute to seek an order requiring plaintiffs' counsel to approach
the bench before mentioning or seeking testimony about that subject in
front of the jury.

B. Juries
1. Will a Jury Hear the Claim?
a. Is There a Right to Trial by Jury?
The Seventh Amendment to the U.S. Constitution provides that in “suits
at common law, where the value in controversy shall exceed twenty dollars,
the right of trial by jury shall be preserved. . . .” See FRCP 38(a). The
Amendment has been interpreted literally: if a jury right existed in a suit “at
common law” in the year the Seventh Amendment was adopted, 1791, then
it is “preserved” today. See Chauffers, Teamsters Helpers Local No. 391 v.
Terry, 494 U.S. 558 (1990). This part of the Bill of Rights does not create
any right: it simply preserves one.
In practice, determining whether a jury trial right is available for most
claims is a matter of simple legal research. A claim for conversion,
negligence, damages for trespass, and other common claims carry a right to
trial by jury, for example. Similarly, many statutes create rights and specify
a jury trial right. (The Seventh Amendment does not prevent Congress from
expanding the jury trial right, just from failing to preserve it.)
Complexities arise when a post-1791 statute creates a claim but does not
expressly grant a jury trial right. Rather than holding that such claims are
not subject to the Seventh Amendment, the Court has held that the question
is whether the claim resolves rights that would have been subject to trial by
jury in 1791. Chauffers, supra. Although recognizing that invariably the
form of relief will dictate whether the claim is “legal” — meaning subject
to jury trial — or “equitable” — meaning subject to decision by the judge
alone — the Court in Chauffers held that a court must analyze two factors.
First, the court must identify the claim that could have been brought in
England prior to 1791 that is most “analogous” to the statutory claim. If that
claim carried a right to trial by jury, that fact indicates that the statutory
claim has a jury trial right, too. Second, the court must look to the relief that
is sought: if the relief is money damages, rather than equitable relief, then it
is more likely that a jury trial is available. See, e.g., Tull v. U.S., 481 U.S.
412 (1987) (holding that there was a jury trial right for a claim by the
government for a civil penalty for violating the Clean Water Act, but not for
determining the amount of the penalty since historically governments could
determine the amount of a penalty).

b. Was the Right Waived or, if Made, Can It be

Revoked?
Rule 38(b) authorizes two ways for a party to demand a trial by jury: (1)
it may include the demand in a pleading (e.g., putting “plaintiff demands a
jury trial” in a complaint); or (2) it may serve a jury demand on the parties
within 10 days after service of the last pleading directed to the issue (e.g.,
10 days after a defendant serves its answer, it could serve a jury demand on
all the parties, as could the plaintiff). If a party fails to demand a jury trial in
either way, then the right is waived. FRCP 38(d).
The demand for a jury trial can be partial or full. FRCP 38(c). For
example, a plaintiff can demand a jury trial on one of its two claims; a
defendant can demand it only on its affirmative defense. If one party
demands only a partial jury trial, the other party can demand one on other
issues by serving a demand for a jury trial on the other issues within 10
days.
The Rules specifically allow one party to rely on the jury demand made
by another. “A proper demand may be withdrawn only if the parties
consent.” FRCP 38(d). Thus, if a plaintiff demands a trial by jury in the
complaint, the defendant does not need to demand one on the claims against
it. Indeed, the jury demand must be honored unless the parties file a written
stipulation with the court that a jury trial is waived, or do so orally in open
court. FRCP 39(a).
The issue of whether a demand is necessary becomes more complicated
when counterclaims are involved. Suppose plaintiff does not demand a jury,
but defendant makes a counterclaim and demands a jury trial on its
counterclaim, but not on plaintiff's claim. If the defendant's counterclaim
does not arise out of the same transaction or occurrence as the plaintiff's
claim, then the plaintiff must ask for a jury trial on its claim. Cf. Cal. Scents
v. Surco Prods., Inc., 406 F.3d 1102, 1109 (9th Cir. 2005) (plaintiff could
rely on demand in defendant's counterclaim where plaintiff's claim arose
out of same “matrix of facts” as counterclaim).

c. Power of the Court to use a Jury on Non-Jury

Questions,
or Despite the Parties' Waiver of the Right to
One
Even if a party fails to properly demand a jury trial, the court has
discretion to order a jury trial. FRCP 39(b). See Lewis v. Time Inc., 710 F.2d
549 (9th Cir. 1983) (court may, but need not, grant a tardy effort to obtain a
jury trial when waiver occurred through oversight or inadvertence). In
addition, even where there is no right to jury trial, a court may use an
“advisory jury” — one whose verdict will not control the court, but simply
advise it — if either a party moves for one or the court decides on its own
to use an advisory jury. FRCP 39(c). In addition, the court may with the
consent of the parties try the case to a binding jury verdict even where no
right to jury is recognized, unless the United States government is a party to
the case. FRCP 39(c).

2. Jury Selection
a. Jury Pools
Each district is required to have a system to randomly select jurors and to
do so in a way that results in a fair cross section of the community. 28
U.S.C. §§ 1861 to 1865. There are specific procedures for lawyers to
challenge these systems. 28 U.S.C. § 1867. While challenges were once
common, they are of diminishing importance as the law has grown clearer
and courts have become familiar with how to properly summon a potential
jury.
Although the precise methods vary among the courts, generally potential
jurors are summoned to the courthouse and gather in a large room, waiting
to be called to a specific courtroom. Many citizens are called to jury duty
and never leave that large room, where dozens if not hundreds of others are
gathered to wait. Others wait for hours before being summoned to a
courtroom to be considered as a juror for a particular case.

b. Jury Strikes
 A judge will typically summon far more potential jurors to a courtroom
than she needs to try the case because some jurors will be “struck” for
cause, and others peremptorily. It is not uncommon for 25 to 40 people to
be seated as potential jurors for a civil case, even if the jury will consist
only of eleven jurors.
Typically, before potential jurors arrive the clerk of the court will give
each lawyer a very brief form that each potential juror had completed that
lists, typically, the person's address, workplace, spouse's employer, and
certain other factual information. Then the judge will conduct and may
permit lawyers to participate in voir dire. This is a process where the judge
alone, sometimes with input from the parties, or the judge and then each
lawyer will have the opportunity to ask questions of the panel in order to
identify bias, interest, or prejudice and to simply learn more about the
potential jurors. See Fietzer v. Ford Motor Co., 622 F.2d 281 (7th Cir. 1980)
(holding that although a district judge has wide discretion to choose the
scope and means of voir dire, the process chosen must create a reasonable
assurance that bias or prejudice would be discovered if it was present).

i. Striking for Cause

Each party is allowed an unlimited number of “challenges for cause or
favor.” 28 U.S.C. § 1870. These may be used where, for example, a
potential juror is related to a party or employed by one. A lawyer who
believes that a person should be struck “for cause” typically approaches the
bench with opposing counsel and explains the reasons for his belief. If the
court agrees, it grants the motion to strike, typically only advising the
lawyers, privately, of that determination.
Arguments among lawyers about striking for cause can become quite
heated. See, e.g., Thompson v. Altheimer & Gray, 248 F.3d 621 (7th Cir.
2003). Suppose, for example, that a potential juror states in response to a
question that she believes that medical malpractice claims are what cause
insurance rates to go up, and many malpractice plaintiffs exaggerate their
injuries. That person would make a great juror for the defense, and so
defense counsel will do their level best to have the person “rehabilitated” by
stating that she can be fair and impartial despite those beliefs. The plaintiff's
counsel, on the other hand, wants the person struck “for cause” because
otherwise the person will be seated, unless plaintiff's counsel uses a
“peremptory strike.”
ii. Striking Peremptorily
Each party in a civil case gets three peremptory strikes. 28 U.S.C. §
1870. Where multiple parties are involved, the court has discretion to allow
for additional strikes, or to require them to be exercised jointly, and to
otherwise equalize the number of strikes. Id.
A peremptory strike can be made for any reason, unless the reason
violates the constitutional rights of the potential juror or a litigant. So, for
example, if that potential juror who believed malpractice claims were
causing insurance problems and malpractice plaintiffs often exaggerated
their injuries was not struck for cause, plaintiff's counsel could use one of
the three “peremptory strikes” to prevent him from being seated as a juror.
There are limits to the proper use of peremptory strikes. In a series of
cases, the Court has held that it violates the constitutional rights of a
potential juror if she is stricken on the basis of race, gender, ethnicity or
other protected traits. See William C. Slusser, David Hricik & Matthew P.
Eastus, Batson, J.E.B., and Purkett: A Step-By-Step-By-Step Guide to
Making and Challenging Peremptory Challenges in Federal Court, 37 S.
Tex. L. Rev. 127 (1996). See, e.g., Hidalgo v. Fagen, 206 F.3d 1013 (10th
Cir. 2000) (rejecting plaintiff's motion for new trial based upon defense
counsel's alleged Batson violation); Edmonson v. Leesville Concrete Co.,
500 U.S. 614 (1991) (holding trial court should have required race-neutral
explanations for counsel's striking of two African American jurors in case
brought by African American plaintiff). The American Bar Association
continues to state that, while a lawyer may not discriminate on the basis of
race and other protected classes during jury selection, a Batson violation by
itself does not violate that rule. See Am. B. Ass'n. Model R. Prof. Conduct
8.4(g) (2016).

c. Jury Seated
Generally, what happens during jury trial is that after voir dire and strikes
for cause are decided, the parties look at the first 15 or so potential jurors
who were not struck for cause and consider what they know about them.
Each lawyer then makes a judgment and advises the clerk by written note
which, if any, potential jurors she wants to strike peremptorily. The clerk
then seats the first 11 (or whatever number of jurors the court has decided to
seat) who were neither struck for cause by the court or peremptorily by
either party. Those people are seated in the jury box. Trial then begins.
 C. Trial
1. Turns and Burdens
Trials are conducted largely in turns, and each turn is itself divided into
smaller turns. In the typical one-plaintiff-one-defendant case, the plaintiff
goes first: it decides which witnesses to call, and in what order, with the
minimum goal being to establish, by the time it rests its case, that there is
sufficient evidence of each element of each claim to require resolution by
the jury. Thus, after each side makes opening statements, plaintiff's counsel
begins.

2. Plaintiff's Case in Chief

A plaintiff's counsel must determine what evidence it needs to introduce
during its case in chief — before it rests and defendant gets its turn — and
determine who can “sponsor” that evidence — we've seen already that to
avoid entry of judgment as a matter of law against it, the plaintiff must
produce more than a scintilla of evidence on each element of each claim.
Unfortunately, putting on a case cannot follow the order of elements of a
claim.
The Rules of Evidence generally permit a witness to testifying only as to
the witness's personal knowledge. The rules of trial conduct generally
permit a party to call a witness only once. Taken together, that results in an
awkward, non-linear, non-chronological trial where each witness can testify
only as to his personal knowledge, and only one time. So, for example, a
witness who was involved in early negotiations of a contract, but then who
had no involvement until the contract was breached, will testify once, and
will address the early negotiations and then the breach, but will say nothing
about the actual execution of the agreement, since the witness has no
personal knowledge about it. The next witness might know only of the
execution of the agreement, but not its breach. And so on. Also because of
the requirement of personal knowledge, a witness can also only testify as to
documents that they can “lay a foundation for.” If the witness doesn't have
personal knowledge of a document, the lawyer can't use that witness to “get
the exhibit into evidence.” This, again, leads to disjointed presentation of
evidence.
And there is one more turn within a turn: after a plaintiff conducts direct
examination of a witness, the defendant then gets the opportunity to cross-
examine that witness. The plaintiff then gets the opportunity to re-direct.
Then the plaintiff calls its next witness, and the process continues, witness-
by-witness, turn-by-turn, in an unfamiliar and strange format.
Plaintiff's counsel must be sure to get admitted evidence to support each
element of each claim. This may require calling the defendant's employees
during the plaintiff's case in chief, or admitting excerpts from depositions
taken during discovery. The need to have this evidence available at trial is
why lawyers will depose witnesses who are under the control of the
opposing party — such as employees. Rule 32 governs the use of
depositions at trial or hearings. Absent agreement or court order, the Rule
permits unfettered use of deposition testimony if the witness is
“unavailable.” A deponent is “unavailable” only if the court finds that the
party seeking to use the deposition testimony has proven:
(A) that the witness is dead;
(B) that the witness is more than 100 miles from the place of trial or
hearing, or is the United States, unless it appears that the witness's
absence was procured by the party offering the deposition;
(C) that the witness is unable to attend or testify because of age,
illness, infirmity, or imprisonment;
(D) that the party offering the deposition could not procure the
witness's attendance by subpoena; or
(E) on motion and notice, that exceptional circumstances make it
desirable, in the interest of justice and with due regard to the
importance of live testimony orally in open court, to permit the
deposition to be used.
FRCP 32(a)(4). This Rule allows depositions — which are normally
inadmissible under the Rules of Evidence because they are hearsay — to be
used at trial. Angelo v. Armstrong World Indus., Inc., 11 F.3d 957, 962–63
(10th Cir. 1993) (holding that Rule 32(a)(4) created an exception to the rule
against admissibility of hearsay). Even so, Rule 32(a)(4) also reflects the
bias toward live testimony, and so the party seeking to use deposition
testimony has the burden to prove the testimony fits within an exception in
this rule. Young & Assocs. Public Relations, LLC v. Delta Air Lines, Inc.,
216 F.R.D. 521, 522 (D. Utah 2003).
If a party offers part of a deposition in evidence, an adverse party may
invoke the rule of “optional completeness,” which requires “the offeror to
introduce any other part which ought in fairness to be considered with the
part introduced” and, in addition, once part of a deposition is introduced,
“any party may introduce any other parts.” While objections are made to
the deposition testimony as if “the witness were then present and
testifying,” objections are typically interposed during the designation of
deposition excerpts during preparation of the pretrial order.

3. Defendant's Turn
a. JMOL under Rule 50(a): aka “Motions for
Directed Verdict”
The first thing a defendant should do when the plaintiff's lawyer rests is
examine whether that is the best time to move under Rule 50(a) for
judgment as a matter of law. The purpose of a Rule 50(a) motion is to allow
the judge to take away a claim or issue from the jury when no reasonably
jury could decide for the non-movant.

i. Timing of Rule 50(a) Motion

The earliest time during trial that a party against whom a claim is
asserted can move for judgment as a matter of law on that claim is at the
time the party asserting the claim rests its case in chief, since at that time
the party asserting the claim has been “fully heard” on that claim. FRCP
50(a)(1). Thus, for example, when the plaintiff rests, the defendant can
move for JMOL under Rule 50(a)(1).
A defendant is not required to raise JMOL at the close of plaintiff's case-
in-chief; instead, it may wait until the close of all evidence (i.e., after the
plaintiff and defendant have both rested their cases and any rebuttal is
over). FRCP 50(a)(2). However, a party waives important rights if it does
not move under Rule 50(a) prior to submission of the case to the jury. As
shown later, if a party fails to move for JMOL before jury submission, the
most it can hope for a is a new trial, not an order turning it from the verdict-
loser into the judgment-winner. See Chapter 54.

ii. Two Motions

A Rule 50(a) motion may be in writing but need not be. FRCP 7(b)(1).
The lawyer must explain how the law and specific facts show the movant is
entitled to judgment. FRCP 50(a)(2).
The reason the motion must be made prior to submission to the jury is
two-fold. First, the opposing party must be given an opportunity to cure any
defect in its proof. The motion thus effectively alerts “the opponent to
deficiencies that he may still have time to repair — by asking to reopen his
case in chief, or by reshaping his cross-examination of the defendant's
witnesses, or by putting in evidence in rebuttal to the defendant's case.”
McKinnon v. City of Berwyn, 750 F.2d 1383, 1388 (7th Cir. 1984).
Remember that the Rules favor resolving cases on the merits and so if a
lawyer has mistakenly failed to put in evidence that was available, the
Rules want that cured. Second, it is unconstitutional to “reexamine” a jury's
finding. U.S. Const. Am. VII. We'll come back to that point later.

iii. Movant's Burden of Proof

A movant under Rule 50(a) must show that “a reasonable jury would not
have a legally sufficient evidentiary basis to find for that party on that issue
. . .” FRCP 50(a)(1). If so, then the court may resolve that issue against the
party and, if under the controlling law the claim or defense can be
maintained or defeated only with a favorable finding by the non-movant on
that issue, enter judgment as a matter of law in favor of the movant. FRCP
50(a)(1). The process for determining whether JMOL can be granted
consists of two steps: (1) identifying each element of the claim (or defense)
on which JMOL is sought; and (2) analyzing whether there is “legally
sufficient” evidence on each element.
The first step turns on substantive, or “controlling” law. Before the case
is submitted to the jury, a party asserting a claim must introduce evidence of
each element of its claim, or it has failed to prove its entitlement to relief. A
party who proves, for example, the existence of a contract and its breach,
but fails to produce any evidence of causation of damages has failed to
prove breach of contract. Likewise, a party asserting an affirmative defense
must introduce at trial legally sufficient evidence on each element of that
affirmative defense.
The second step is to determine whether there is “legally sufficient
evidence” for each element. How much is “enough” turns on what law
created the claim. When a Rule 50(a) motion is directed against a federal
question claim, the burden of proof is often stated as follows:
On motions for directed verdict [i.e., under Rule 50(a)] and for
 judgment notwithstanding the verdict [i.e., under Rule 50(b)] the Court
should consider all of the evidence — not just that evidence which
supports the nonmover's case — but in the light and with all
reasonable inferences most favorable to the party opposed to the
motion. If the facts and inferences point so strongly and
overwhelmingly in favor of one party that the Court believes that
reasonable men could not arrive at a contrary verdict, granting of the
motions is proper. On the other hand, if there is substantial evidence
opposed to the motions, that is, evidence of such quality and weight
that reasonable and fair-minded men in the exercise of impartial
judgment might reach different conclusions, the motions should be
denied, and the case submitted to the jury.
Boeing Co. v. Shipman, 411 F.2d 365 (5th Cir.1969). Put in terms of the
movant's burden, the movant must show that there is not enough evidence
on at least one element such that fair minded men could reach different
conclusions, with all reasonable inferences taken in favor of the non-
movant. If there is no evidence on an element then obviously JMOL is
proper; it is also proper if there is less than a scintilla; it is improper if there
is more than a scintilla.
The district court may not resolve any conflicts in the testimony nor
weigh the evidence, except to the extent of determining whether substantial
evidence could support a jury verdict: “a mere scintilla of evidence will not
suffice.” Von Zuckerstein v. Argonne Nat'l Lab., 984 F.2d 1467, 1471 (7th
Cir.1993) There must be more than a scintilla of evidence to support a
verdict. Generally, “to create a jury question, there must be a dispute in the
substantial evidence, that is, evidence which is of such quality and weight
that reasonable and fair-minded men in the exercise of impartial judgment
might reach different conclusions,” such that “a mere scintilla of evidence
is insufficient to present a question for the jury” but that “[e]ven if the
evidence is more than a scintilla . . . some evidence may exist to support a
position which is yet so overwhelmed by contrary proof as to yield to a
directed verdict.” Sobley v. So. Natural Gas Co, 302 F.3d 325, 336 (5th Cir.
2002). Thus, there may be a small amount of evidence to support a verdict,
but an overwhelming amount of evidence is to the contrary.
In contrast, the circuits are split on whether state or federal standards
control the amount of evidence the non-movant must have introduced to
avoid entry of JMOL against it on a state law claim. See Dick v. N.Y. Life
Ins. Co., 359 U.S. 437, 444 (1959) (noting that the Court had not resolved
the issue). In some circuits, when a Rule 50 motion for judgment as a
matter of law is based on a challenge to the sufficiency of the evidence, the
court applies the burden used by the courts of the state whose substantive
law governs the claim or defense to determine how much evidence is
“sufficient.” Kusens v. Pascal Co., Inc., 448 F.3d 349 (6th Cir. 2006). Some
other circuits, however, deem this question to be procedural, not
substantive, and so apply the same standard applied to federal claims.
Magnum Foods, Inc. v. Continental Cas. Co., 36 F.3d 1491, 1504 (10th Cir.
1994).

iv. Grant or Denial of Motion

A district court has discretion to grant or deny a motion for JMOL under
Rule 50(a). Many district judges will deny the motion, even if she believes
there is legally insufficient evidence to support a verdict. They do so
because it is easier to uphold a jury verdict than it is to uphold the grant of a
motion for JMOL: to uphold a jury verdict, there merely must be substantial
evidence to support the verdict; to uphold the grant of a JMOL motion,
there must be virtually no evidence to support one or more elements of a
claim. Thus, if the judge's instincts are correct about the lack of evidence on
one side, the jury will likely reach the same result, and the party that
“should have” been granted JMOL will win the jury's verdict and be in a
better position than had the judge granted the Rule 50(a) motion. Further, if
the jury gets it “wrong” the judge can still grant the party's renewed motion
under Rule 50(b). Thus, for various reasons, Rule 50(a) motions are not as
frequently granted as the circumstances might actually warrant.
JMOL motions are made on a claim-by-claim, defense-by-defense, and
element-by-element basis. Thus, even if a court decides to grant a motion, it
may only be on one claim of several raised.

4. Plaintiff's Rebuttal Case and Plaintiff's JMOL

Against Defendant's Counterclaims or Affirmative
Defenses
After the defendant rests and makes any Rule 50(a) motions, the plaintiff
may have an opportunity to present rebuttal testimony. The plaintiff also
has its first opportunity to make Rule 50(a) motions with respect to any
issues on which the defendant had the burden of proof. Thus, if the
defendant had a counterclaim, or if it raised an affirmative defense, the
plaintiff can at the close of the defendant's case move for JMOL under Rule
50(a) because, at that time, the defendant has been “fully heard” on those
issues.

5. JMOL on Issues on Which the Movant Has the

Burden of Proof
The Rule 50(a) motions discussed so far were brought by the party that
did not have the burden of proof on the issue at trial: a defendant moving
for JMOL on a plaintiff's claim, or a plaintiff moving for JMOL on a
defendant's counterclaim or affirmative defense. A party may also move for
JMOL on issues on which it carries the burden of proof at trial. Thus, a
plaintiff may move for JMOL on its claim, or a defendant may move for
JMOL on its affirmative defense. These motions can be brought no earlier
than the close of the defendant's case-in-chief.
These motions are rarely granted because of the burden of proof the
movant carries: grant of JMOL in favor of a party bearing the burden of
proof may be granted only where (1) the movant “has established [its] case
by evidence that the jury would not be at liberty to disbelieve” and (2) “the
only reasonable conclusion is in [the movant's] favor.” Hurd v. American
Hoist & Derrick Co., 734 F.2d 495, 499 (10th Cir. 1984).

6. JMOL Examples with Explanations

Several cases are commonly cited that address JMOL. Note that some of
these are pre-submission JMOL decisions (aka directed verdicts) while
others are post-judgment JMOL motions (aka judgment nonobstante
verdicto, or JNOV). The standard that applies to both motions is the same,
although as we'll see the post-judgment motion is limited to those issues
that were raised in the pre-submission motion. But, for purposes of
understanding how JMOL works, the cases are equally applicable.
In Lavender v. Kurn, 327 U.S. 645 (1946), a man was killed while
working on a railroad. His estate brought a claim under a federal statute that
required as an element of the claim that the railroad's negligence had caused
his death. However, there was no eyewitness to the accident. The plaintiff
relied on circumstantial evidence, pointing out that the location of the body
and the injuries to it led to the inference that he had been hit by a mail hook
hanging from a train. The defendant argued that the evidence showed that
he had been murdered, relying on the fact that there were tramps in the area
and the decedent's pistol was found beneath him, and he was found without
any money. The jury returned a verdict for the plaintiff, but the defendant
obtained (what was then) judgment notwithstanding the verdict, or JNOV.
The Court held that there was sufficient evidence for a jury to reasonably
infer that the mail hook had killed him. It emphasized that although there
was evidence showing it might have been impossible for the hook to hit
him, and which might have shown he was murdered, the jury had made a
reasonable inference of which had been the cause of death. “Whenever the
facts are in dispute or the evidence is such that fair-minded men may draw
different inferences, a measure of speculation and conjecture is required on
the part of those whose duty it is to settle the dispute by choosing what
seems to them to be the most reasonable inference.” JMOL would have
been proper, though, if there had been “a complete absence of probative
facts to support” the verdict.
In contrast, in Reid v. San Pedro, Los Angeles & Salt Lake R.R., 118 P.
1009 (Utah 1911), a cow was found near railroad tracks after having been
killed by a train. An element of plaintiff's claim was proof that the cow had
wandered onto the tracks through a breach of duty by the railroad. The
railroad had a duty to maintain a fence around the tracks. So, plaintiff had
to show that the cow came through a hole in the fence. But, there was also a
gate nearby, and the railroad was not responsible if the cow had wandered
through the gate. The court held that under these circumstances, the
evidence was in equipoise and so the party with the burden of proof lost:
JMOL was proper because a reasonable jury could only speculate as to how
the cow wandered onto the tracks.
In Pennsylvania Railroad v. Chamberlain, 288 U.S. 333 (1933), a man
was also killed while working on a railroad, and again without actual
eyewitnesses. However, many people had been near the scene of the
accident. The court granted a directed verdict to the defendant. The
Supreme Court affirmed, even though the plaintiff had presented the
testimony of an eyewitness who said he had heard a crash emanating from a
railroad car on which the plaintiff had been standing just before being found
dead. The Court emphasized, however, that several other witnesses who had
actually seen the car did not see any collision. The Court believed that
because the plaintiff had shown only an inference that a collision had
occurred, which contradicted direct evidence from witnesses who actually
saw the car, that the plaintiff had failed to produce evidence on an issue of
causation: “here there really is no conflict in the testimony as to the facts.
The witnesses for [defendant] flatly testified that there was no collision”
and the plaintiff's witness merely testified that he heard a crash and inferred
that there had been a collision. Given that the railroad yard had many
crashes, the inference was not reasonable that it was the decedent's car that
had been involved in a collision, especially when that inference
contradicted the direct testimony.
In Honaker v. Smith, 256 F.3d 477 (7th Cir. 2001), the plaintiff's house
burned down. He filed several claims. One was a claim under 28 U.S.C. §
1983, which allows a claim against a defendant only for acts undertaken
“under the color of” law. The plaintiff contended at trial that the mayor of
the city had set fire to the plaintiff's house, but produced no evidence to
show that even if the mayor had done so, there was no evidence to show
that he had acted as mayor while doing so. Thus, the appellate court
properly held the district court had properly granted a post-judgment Rule
50 motion. The plaintiff had also claimed that the fire department had
negligently worked to stop the fire. The district court had granted a pre-
verdict JMOL motion on that claim because no one had testified that the
fire department had not acted properly; the only evidence to support the
claim was plaintiff's opinion that the fire took too long to put out. Third, the
district court also granted a pre-submission JMOL motion as to plaintiff's
claim for intentional infliction of emotional distress. On this claim, the
appellate court held that the plaintiff had produced more than a scintilla of
evidence to show that the mayor had been involved in setting the fire, the
act of setting a house on fire would be reasonably foreseeable to cause
severe emotional distress, and that the plaintiff had in fact experienced
severe emotional distress in seeing his house burn down. Thus, the
appellate court remanded for a new trial on that claim, but affirmed the
entry of JMOL on the other two claims.
Finally, in Howard v. Wal-Mart Stores, Inc., 160 F.3d 358 (1998), a
plaintiff sued Wal-Mart over a slip and fall claim, alleging she had fallen on
a puddle of liquid soap. As an element of her claim and under the
circumstances of the case, the plaintiff had to prove that a Wal-Mart
employee, not a customer, had spilled the soap. The jury found for the
plaintiff and the judge denied both Wal-Mart's pre-submission and post-
judgment Rule 50 motions. On appeal, the court held there was sufficient
evidence — more than a scintilla — to support the verdict because the
accident had occurred in the morning, which the evidence shows was a time
when Wal-Mart employees stocked the shelves and that the container was
never found, which the court concluded created the reasonable inference
that an employee had spilled it, since a customer would not buy a bottle of
soap with half its contents spilled out.

D. Conferring on the Charge and

Verdict Form
Most local rules require the parties to work together to submit a joint jury
charge for the court to read to the jury. The jury must be instructed as to
what the elements of each claim and defense involved in the case require.
They are often instructed on what the burden of proof requires, how to
determine credulity, and the weight to give testimony.
Often bar associations publish “model jury charges” that provide the bulk
of a jury charge and the parties agree to and follow these model charges.
See Mitchell v. Gonzales, 819 P.2d 872 (Cal. 1991). To the extent that the
parties disagree on how the jury should be charged, the court will hold a
“charge conference” to hear the arguments and examine the competing
charges. Rule 51 requires that any objection to instructions state “distinctly
the matter objected to and the grounds of the objection.”
In addition to agreeing upon the instructions and hearing disagreements,
the parties are typically ordered to work together to create a verdict form
for the jury. A verdict form can be “general” in that it simply asks which
party won, and how much money, if any, to award, or it can be quite
specific, accompanied by “special interrogatories” as to whether the party
with the burden of proof established each element of its clam or defense by
a preponderance of the evidence.
Under Rule 49, the decision to use a general verdict form, a special
verdict form, or a general verdict form with special interrogatories is within
the sound discretion of the trial court. Workman v. Frito-Lay, Inc., 165 F.3d
460, 465 (6th Cir. 1999). As a general principle, plaintiffs' counsel favor
general verdicts, while defense counsel favor special verdicts, since if the
jury finds “no” to just one element on a claim listed on special verdict, the
plaintiff's claim fails. In addition, because of its complexity, a special
verdict is more likely to create an inconsistent verdict which may result in a
new trial. See generally, McClaughlin v. Fellows Gear Shaper Co., 786 F.2d
592 (3rd Cir. 1986) (addressing complications created by an inconsistent
verdict, but upholding denial of new trial under the facts).

E. Closing Arguments
In closing argument, each attorney summarizes the evidence and explains
how it satisfies the burden that the party has, or fails to satisfy the burden
that the other party faces. Thus, plaintiff's counsel in a breach of contract
action will contend that it has established that there was a contract; that it
was breached; and that the breach caused damage to plaintiff; defense
counsel will argue the opposite. If the defendant has raised an affirmative
defense, defense counsel will contend that the evidence shows defendant
has met its burden of proof; plaintiff will argue the opposite.
As with all aspects of civil procedure, there are limits but those limits
must be enforced by an objection. Brokopp v. Ford Motor Co., 139 Cal.
Rptr. 888 (Cal. App. 1977) (defense counsel failed to object to various
improper arguments made by plaintiff's counsel in closing).

F. Charging the Jury

Once the parties have completed closing argument, the judge will read
aloud the jury charge. Sometimes the jurors are also given a copy of the
charge.
After the charge is read to the jury, a party who has an objection likely
must again assert it. See Meagher v. Long Island R.R. Co., 261 N.E.2d 384
(N.Y. 1970) (analyzing whether objection was properly preserved). Some
circuits hold even if the “initial request is made in detail, the party who
seeks but did not get the instruction must object again after the instructions
are given but before the jury retires for deliberations.” Gray v. Genlyte
Group, Inc., 289 F.3d 128, 134 (1st Cir. 2002)

G. Jury Deliberation
Juries deliberate in secret. Federal Rule of Evidence 606(b) reinforces
that:
Upon an inquiry into the validity of a verdict or indictment, a juror
may not testify as to any matter or statement occurring during the
 course of the jury's deliberations or to the effect of anything upon that
or any other juror's mind or emotions as influencing the juror to assent
to or dissent from the verdict or indictment or concerning the juror's
mental processes in connection therewith. But a juror may testify
about (1) whether extraneous prejudicial information was improperly
brought to the jury's attention, (2) whether any outside influence was
improperly brought to bear upon any juror, or (3) whether there was a
mistake in entering the verdict onto the verdict form. A juror's affidavit
or evidence of any statement by the juror may not be received on a
matter about which the juror would be precluded from testifying.
See Warger v. Shauers, 135 S.Ct. 521 (2014) (holding that a party cannot
seek a new trial based upon a juror's testimony that another jury lied during
voir dire). It is improper under Rule 606(b) to receive testimony from the
jury that it misunderstood the jury instructions. Peterson v. Wilson, 141 F.3d
573 (5th Cir. 1998). In Peterson, after a jury had found for the plaintiff, the
district court met with jurors after the verdict and outside the presence of
counsel. The district court granted a motion for new trial based upon the
jurors' comments. The Fifth Circuit reversed the grant of new trial because
it relied on information obtained during the post-verdict conversation, and
not because the requirements for the grant of a new trial in terms of Rule 59
were present.

H. Return of Verdict
Unless a mistrial occurs, the jury will return its verdict after deliberating.
(In my experience with complex federal cases, it takes about three days.
Those are long, anxious days!)
After the jury returns its verdict, there typically will be a party that
“wins” and one that “loses,” although split or mixed verdicts are also
possible. What happens after verdict is addressed in the next chapter, even
though some of the actions must take place while the jury is still in the box.

Checkpoints

Can you define when a right to jury trial will subsist for a claim that existed prior to 1791? To one
created afterward?
Can you describe how to demand a right to trial by jury, and how a court can even absent the right to,
or a request for, a jury, have a jury provide binding or advisory verdicts?
Can you define when a challenge for cause is proper? A peremptory strike?
Do you understand the limited rights to use discovery at trial?
Do you understand the operation of Rule 50(a)?
Do you understand why people refer to juries as “black boxes”?
Chapter 55

After Verdict:
In the District Court

After Verdict Roadmap

This chapter identifies the procedure that a party must undertake immediately after verdict
and shortly after judgment is issued in a case.
This chapter thus analyzes when a post-judgment motion under either to turn the loser into
the winner under Rule 50(b) or to grant a new trial under Rule 59 may be granted.

After the jury has returned its verdict, several steps follow quickly, a few
of which must take place before the jury is discharged. After the jury is
discharged, the district court will enter judgment, triggering a 28-day
deadline for parties — usually only one party, the loser, but sometimes both
sides can “lose” at trial — to file post-trial motions. For example, if a
plaintiff has one claim and the jury finds for the defendant, the plaintiff will
be the only loser. If the plaintiff has two claims and prevailed on one, but
lost on one that would have resulted in greater damages, then the plaintiff
and the defendant both “lost.” A defendant who wins on the claim against
it, but lost on a counterclaim, likewise has “lost” something. This chapter
discusses post-verdict practice. It also explains how the rules require trial
courts to structure their post-verdict rulings to allow for efficient review and
resolution of the case.

A. Options for the Verdict Loser That

Must Be Taken before Jury Discharge
The verdict loser has a few options that are not taken very often and are
not often successful, but which must be taken immediately after the verdict
is announced if they are to be taken at all.
 One possible issue is the inconsistent verdict. What if when the jury
returns its verdict, there is an inconsistency on the verdict form? For
example, suppose that in answer to a specific interrogatory on whether there
was a contract, the jury found “no,” but yet it found for the plaintiff and
awarded it damages for breach of that, ostensibly nonexistent, contract? If
there is inconsistency, a party must object before the jury is dismissed.
Corpus v. Bennett, 430 F.3d 912 (8th Cir. 2005); Correia v. Fitzgerald, 354
F.3d 47, 57 (1st Cir. 2003) (failure to object to an alleged inconsistency
while the jury is still in the box waives a party's objection); Wennik v.
Polygram Group Distrib., Inc., 304 F.3d 123, 130 (1st Cir. 2002) (a party
waives verdict inconsistency claims by failing to object before the jury is
dismissed as “iron-clad”); Skillin v. Kimball, 643 F.2d 19, 19–20 (1st Cir.
1981) (the “only efficient time to cure . . . possible problems of [verdict]
inconsistency would be after the jury announced the results of its
deliberations and before it was excused”).
Another possible, but rarely fruitful, option is to “poll the jury.” The
verdict-loser may ask the trial judge for permission to ask each juror
whether the verdict was, in fact, its intended verdict. This request must be
made before the jury is dismissed. Audette v. Isaksen Fishing Corp., 789
F.2d 956 (1st Cir. 1986). This is an unusual request, and the inquiry is
generally limited to asking each juror if he or she agrees with the verdict.
Only if a juror actually disagrees with the verdict — believe it or not,
sometimes a juror or even the jury may think that he's or it's doing precisely
the opposite of what the verdict actually does — is there basis for a new
trial. Grossheim v. Freightliner Corp., 974 F.2d 745, 750 (6th Cir. 1992).
Another uncommon event is a request by the verdict-loser to interview
jurors before they are dismissed. The problem is that there is very little that
jurors are allowed to discuss. As noted above, Federal Rule of Evidence
606(b) prohibits jurors from testifying “as to any matter or statement
occurring during the course of the jury's deliberations or to the effect of
anything upon that or any other juror's mind or emotions as influencing the
juror to assent to or dissent from the verdict . . . or concerning the juror's
mental processes in connection therewith.” There are two narrow
exceptions: a juror can testify as to whether there was extraneous
prejudicial information improperly brought to the jury's attention or
whether there was a mistake in entering the verdict on the form. Id. See
Warger v. Shauers, 135 S.Ct. 521 (2014) (holding that a party cannot seek a
new trial based upon a juror's testimony that another jury lied during voir
dire).
That's it for what can happen to challenge the verdict before discharge.
The jury process by design is a black box, one that lawyers and parties are
not readily able to impeach by taking apart what the jury did. More likely
the jury verdict will be overcome, if at all, by showing not that the jury
process was somehow misguided, but that there were procedural mistakes
made at trial by the judge that caused the jury to err, or that the evidence
does not support the verdict. Those issues can be raised, however, not only
after the jury has discharged, but only after judgment has been entered on
the verdict.

B. After the Jury Discharge: Verdict

Winner Moves for Entry of Judgment
1. Process for Entry of Judgment
As noted above, the verdict winner will generally ask the trial court to
enter judgment in its favor. Typically, the prevailing party submits a draft
judgment along with a motion for the court to enter the judgment. In some
circumstances, the clerk may enter judgment, while in others the court must
do so.

In either circumstance, it is often wise for the verdict winner to file a

motion with the court to have it enter the judgment, as entry of the
judgment begins the time for accrual of post-judgment interest and also the
time-tables for the verdict-loser to file its post-judgment motions. Entry of
judgment triggers a 28-day window for the verdict loser to file its post trial
motions. There are two common post-trial motions: Post-judgment motions
for judgment as a matter of law under Rule 50(b) (formerly known as
motions for judgment non obstante verdicto, or “JNOV”) and motions for
new trial under Rule 59. We now turn to those two motions. Then, we
examine the final means by which a verdict loser can challenge a judgment
in the trial court, which is by filing a motion under Rule 60(b) for relief
from the judgment.

2. Form of Judgment
A judgment must be contained in a separate document and be in writing.
FRCP 58. A judgment is not an opinion: it simply identifies which party
won, and what relief was awarded, but without identifying the reasons
therefore. See Clough v. Rush, 959 F.2d 182, 185 (10th Cir. 1992) (15 page
opinion is not a “judgment”).

C. Within 28 Days of Entry of

Judgment, the Verdict Loser Must File
Any Motions for New Trial and Rule
50(b) Renewed Motions for JMOL
The Rules require that two post-trial motions be made, if at all, within 28
days of entry of the judgment. FRCP 50(b). This period cannot be extended.

1. Post-Judgment Rule 50(b) JMOL Motions

(aka JNOV)
a. Predicate: Pre-Submission Rule 50(a) JMOL
Motion
A party who failed to timely move under Rule 50(a) for JMOL before the
case is submitted to the jury waives the right to move for post-judgment
JMOL. The filing of both a pre-submission and post-judgment motion
under Rule 50 is required for a judgment-loser to be made the judgment
winner. Unitherm Food Sys., Inc. v. Swift-Eckrich, 126 S.Ct. 980, 985
(2006). If a party fails to file a post-judgment JMOL then it cannot properly
assert that it should be made the judgment-winner, either after judgment or
on appeal: it can at most assert that it should be entitled to a new trial. Id.;
Fuesting v. Zimmer, Inc., 448 F.3d 936 (7th Cir. 2006) (verdict loser may
still be awarded a new trial even without complying with Rule 50).
However, the failure to object to a post-judgment Rule 50(b) motion on
the basis that the moving party failed to make a pre-verdict JMOL motion
waives the objection. So, if a verdict loser makes a post-judgment Rule
50(b) motion without having made a Rule 50(a) motion before submission
of the case to the jury, the verdict winner must object to the motion.

b. Scope of Post-Judgment Rule 50(b) Motion

Limited
to Pre-Verdict Rule 50(a) Motion
A post-judgment JMOL motion cannot raise issues that were not raised in
the pre-submission JMOL motion. Phillips v. Bowen, 115 F. Supp. 2d 303,
305 (N.D.N.Y. 2000), aff'd, 278 F.3d 103 (2d Cir. 2002). As noted in the
prior chapter, this is a limitation for two reasons: to allow the non-movant
during trial at the time the Rule 50(a) motion is made to cure the
evidentiary defect, and for Constitutional reasons, to avoid “reexamination”
of facts found by a jury. Fruend v. Nycomed Amersham, 347 F.3d 752, 761
(9th Cir. 2003) (reversing district court's order granting defendant's Rule
50(b) motion because it was based on an argument that defendant failed to
raise in its Rule 50(a) motion); Lifshitz v. Walter Drake & Sons, Inc., 806
F.2d 1426, 1429 (9th Cir. 1986) (in affirming district court's rejection of
argument made for the first time in its Rule 50(b) motion, court held that a
party may secure a Rule 50(b) judgment only based on the specific grounds
raised in the Rule 50(a) motion because otherwise “the directed verdict
motion would not serve its purpose of providing clear notice of claimed
evidentiary insufficiencies and of preserving the issue of the sufficiency of
the evidence on a particular matter as a question of law”).
However, the objection that a post-judgment JMOL motion raises issues
that were not raised in the movant's pre-verdict Rule 50(a) motion itself can
be waived. “[W]here a party did not object to a movant's Rule 50(b) motion
specifically on the grounds that the issue was waived by an inadequate Rule
50(a) motion, the party's right to object on that basis is itself waived.”
Williams v. Runyon, 130 F.3d 568, 572 (3d Cir. 1997). Put another way, if a
party raises an issue in a Rule 50(b) motion that it did not raise in its pre-
submission Rule 50(a) motion, the party opposing that motion must in its
response point out that fact. Otherwise, that objection is itself waived.
Canny v. Dr. Pepper/Seven-Up Bottling Group, Inc., 439 F. 3d 894 (8th Cir.
2006).
 c. Burden of Proof
Any issue that would permit the trial court to hold that judgment on one
or more claims or defenses should be rendered in favor of the verdict-loser
can serve as the basis of a motion for JMOL. The issue can be a pure
question of law: suppose, for example, that the parties disputed which
statute of limitations applied to a claim — the defendant arguing that a
statute that imposed a two-year period applied, the plaintiff, that a statute
imposing a four-year period applied — and under one party's position it was
undisputed that the plaintiff's claim was barred, but under the other's, that
the plaintiff's claim was timely.
Another common issue in JMOL motions is the legal insufficiency of the
evidence — a “no evidence” argument. Suppose, for example, that the jury
verdict was for the plaintiff, but the defendant believes that there was no
evidence of one or more elements of the claim. Let's say that the plaintiff
brought a claim that the defendant failed to rescue the plaintiff from
drowning; that applicable state law imposes such a duty only if there is a
blood or marriage relationship between plaintiff and defendant; but that the
plaintiff introduced no evidence of any such relationship between plaintiff
and defendant. Nonetheless, the jury found for the plaintiff. The same
standard — there must be more than a scintilla of evidence supporting the
verdict with all reasonable inferences viewed in a light most favorable to
the verdict winner — applies to Rule 50(b) post-judgment JMOL motions.
See the examples in Chapter 54.

d. Impact of Rulings
If a court finds that JMOL is proper as to one or more claims, then it
vacates its prior judgment and enters judgment accordingly. In one-claim
cases, the verdict winner becomes the judgment loser. The result of trial
where a new trial is not granted (discussed next) is a final judgment that can
be appealed. The party on appeal — the verdict-winner — will now be the
judgment-loser.

2. Motions for New Trial under Rule 59

As with post-judgment JMOL motions, a motion for new trial must be
filed within 28 days of entry of the judgment. FRCP 59(b). In addition,
within that same period, the district court on its own initiative may order a
new trial. FRCP 59(d).

a. The Two Common Bases for New Trial

Motions
Rule 59 grants discretion to district courts to permit a new trial whether
either the court made procedural errors or the evidence in favor of the
verdict, though sufficient to uphold the verdict, is against the “great weight
of the evidence.”
With respect to errors by the district court, error is not enough to grant a
new trial. Erroneous rulings do not justify a grant of a new trial unless they
affected the “substantial rights” of the parties. FRCP 61. Thus, the fact that
a judge gave an erroneous jury instruction can warrant a new trial only
where the objecting party can show that it was prejudiced by the erroneous
instruction. Fink v. Foley-Belsaw Co., 983 F.2d 111, 113–14 (8th Cir. 1993)
(improper jury instructions or failure to comply with Rule 51 may be
ground for a new trial, but only if movant shows material prejudice).
The district court has broad discretion to grant a new trial if the basis for
doing so is a ruling on a matter that initially rested within the discretion of
the court (such as evidentiary rulings), see Bhaya v. Westinghouse Elec.
Corp., 922 F.2d 184, 187 (3d Cir. 1990) or prejudicial statements made
during trial by counsel, see Lind v. Schenley Indus., Inc., 278 F.2d 79, 90
(3d Cir. 1960). To establish a right to new trial based upon a procedural
error, the movant must show (1) that an error was in fact made, (2) that the
party seeking a new trial objected to the erroneous ruling at the time; and
(3) that the error was so prejudicial that a refusal to grant a new trial would
affect a party's “substantial rights.” FRCP 61.
So for example, in Tesser v. Bd. of Ed., 190 F. Supp. 2d 430 (E.D.N.Y.
2002), the plaintiff brought an employment discrimination claim. The jury
found for the defendants, and the plaintiff moved for a new trial, making
three arguments. First, she argued that the court had committed harmful
error by refusing to allow her to testify after she had put two defendants on
the stand during her case in chief. The court held that she had failed to
object and that, in any event, the ordering and presentation of evidence had
been a proper exercise of its discretion. Second, she argued that the trial
court had committed prejudicial error by allowing the defense to admit into
evidence unredacted versions of her tax returns, which showed she was
wealthy, which was irrelevant. The trial court held it had not erred because
one of plaintiff's experts had considered them in formulating his report, thus
rendering it admissible and the court had, further, cured any substantial
prejudice by instructing the jury not to consider the amount of her income
other than in connection with the expert's report. Finally, third, she argued
that defense counsel in closing argument had improperly suggested that
plaintiff had destroyed evidence. The court held that these statements were
insufficient to sway the jury and that any prejudice had been cured by
instructions to the jury that arguments of counsel are not evidence.
Motions based on the verdict “being against the great weight of the
evidence” are seldom granted, especially if the subject matter of the suit
was not particularly complex and instead dealt with issues which are
familiar to a lay jury. Lind v. Schenley Indus., Inc., 278 F.2d 79, 90–91 (3d
Cir. 1960). The party challenging the verdict must bear the heavy burden of
showing that the verdict is against the weight of the evidence and that a
miscarriage of justice would result if the verdict were to stand. Williamson
v. Consol. Rail Corp., 926 F.2d 1344, 1353 (3d Cir. 1991).
For example, in Lind the district court granted a new trial to the verdict
loser based upon the verdict being against the great weight of the evidence.
Though noting that the question was only whether the district court had
“abused its discretion,” the Third Circuit emphasized that where there is
evidence to support the verdict but the judge nonetheless grants a new trial
to the verdict loser, the judge “has, to some extent at least, substituted his
judgment of the facts and the credibility of the witnesses for that of the
jury.” As a result, appellate courts were to examine the order with “a closer
degree of scrutiny” than otherwise applies to the grant of a motion for new
trial based on procedural errors. Id. Thus, although the district court may in
analyzing a motion for new trial consider the credibility of witnesses and
even weigh the evidence, it must “exercise restraint to avoid usurping the
jury's primary function.” Blakey v. Continental Airlines, Inc., 992 F. Supp.
731, 734 (D.N.J. 1998).
Similarly, in Latino v. Kazer, 58 F.3d 310 (7th Cir. 1995) the plaintiffs
brought false arrest and Section 1983 claims against two police officers. In
an earlier trial, the jury had found for the defendants. However, the district
judge had granted a new trial because he concluded that the police officer's
version of the incident had been perjurious and so entitled to no weight, and
thus he granted a new trial. At the second trial, the jury found for the
plaintiffs. After final judgment was entered against them, the defendants
appealed the order that granted the new trial after the first trial. In reversing,
the appellate court emphasized that the Seventh Amendment limits the
ability to reexamine the jury's verdict as being against the great weight, and
that a “more exacting standard of review” applies when such a motion is
granted. Because the court believed that the judge had “act[ed] as a 13th
juror” rather than merely giving no weight to evidence that no reasonable
juror could believe. As a result, it vacated the order granting new trial in the
first case, and reinstated the jury verdict in that case for the defendants. See
Dadurian v. Underwriters at Lloyd's of London, 787 F.2d 756 (1st Cir.
1986); U.S. v. An Article of Drug, 725 F.2d 976 (5th Cir. 1984).

b. New Trial Awarded Based Only on the Amount

of Damages
Suppose a district judge believes that the jury's verdict on liability is
supported by the evidence, but that the jury either awarded far too much or
far too little in damages. Only if the jury awards too much does a federal
court judge have the ability to order a new trial.

i. Remittitur
What if the damages awarded by the jury in its verdict seem far too high,
and seemingly resulted not from the proof of damage to the plaintiff, but of
passion or prejudice from a highly emotional case? In extreme — extreme
— cases a trial court can order remittitur. It's available only if the “verdict
exceeds any rational appraisal or estimate of the damages that could be
based on the evidence before the jury.” Rivera Castillo v. Autokirey, Inc.,
379 F.3d 4, 13 (1st Cir. 2004). In considering whether the award is too high,
courts compare the amounts awarded in similar cases. See, e.g., Sylvester v.
City of N.Y., 2006 WL 3230152 (S.D.N.Y. 2006) (comparing award of
$30,000 in false arrest case to similar awards and denying remittitur).
If the trial court determines remittitur is appropriate, it cannot simply
award the amount it thinks justified by the evidence; instead, it issues an
order that grants the defendant's motion for new trial unless the plaintiff
agrees to take the lesser amount set by the court. See, e.g., Brown v. McBro
Planning & Dev. Co., 660 F. Supp. 1333, 1337 (D.V.I.1987) (“The court has
the power to grant a new trial on the issue of damages, conditioned on
plaintiff's refusal to file a remittitur (that is, a reduction in the amount of the
award), if the size of the verdict is so grossly excessive that it is not
rationally related to any evidence adduced at trial.”). If the plaintiff accepts,
then judgment is entered for that amount, and the defendant can appeal. If it
rejects, then there will be a new trial. (We'll see below that the plaintiff
won't be able to appeal the grant of a new trial until after judgment is
entered after the next trial.)

ii. Additur: Unconstitutional in Federal Court

If the damages awarded by the jury verdict seems too low, a federal court
may not grant a new trial to the plaintiff unless the defendant agrees to pay
more. Under Dimick v. Schiedt, 293 U.S. 474, 486–87 (1935), federal courts
may not use additur because it violates the Seventh Amendment's right to a
jury trial. Id. The only thing the court can do is grant a motion for new trial
conditioned on the defendant's agreement to pay more.

D. Motions to Amend the Judgment

under Rule 59(e)
Rule 59(e) permits a motion to alter or amend the judgment to be filed
within 28 days of entry of judgment. These motions are uncommon and
generally cannot be used to turn the verdict-loser into the verdict winner, or
to obtain a new trial. Instead, generally district courts may alter or amend
judgment “to correct a clear error of law or prevent manifest injustice.”
Collision v. Int'l Chem. Workers Union, Local 217, 34 F.3d 233, 236 (4th
Cir. 1994). For example, parties have moved to amend a judgment that
failed to award the relief that the court had previously found was warranted,
or which failed to award interest on the judgment. See, e.g., Continental
Cas. Co. v. Howard, 775 F.2d 876 (10th Cir. 2000). A district court's denial
of a party's motion to alter or amend judgment under Rule 59(e) is reviewed
for an abuse of discretion. Devlin v. Transp. Communications Int'l Union,
175 F.3d 121, 132 (2d Cir. 1999).

E. What Does the Verdict and Judgment

Winner Have to Do?
The verdict winner must look at two issues.

1. Did the Verdict Deprive It of Any Relief?

The verdict winner should analyze whether the verdict in fact awarded it
all that it was entitled to. If, for example, a plaintiff won one of two claims
and the claim on which it lost had a greater damage remedy, the “winner”
may not have won all it was entitled to. It may need to file a post-judgment
JMOL motion, or motion for new trial, in the same way the losing
defendant would.

2. Respond to the Loser's Motions

The only other task for the judgment winner is to respond to the other
party's motions.

F. Impact of Entry of Judgment

on Execution and Appeals
The principal reason most plaintiffs file suit is to obtain monetary
damages. Once 14 days have passed after a judgment is entered, a
prevailing plaintiff may “execute the judgment” and take actions authorized
by state law to collect up to the amount awarded by the court. FRCP 69(a);
62(a). See Chapter 56. (Remember Pennoyer v. Neff?)
In addition, entry of judgment starts the time period for appeal. See
Chapter 58. Normally, a notice of appeal must be filed within 30 days of
entry of the judgment. Fed R. App. P. 4(A)(1)(a). Id. The filing of a post-
judgment JMOL motion or a motion for new trial delays the running of the
appellate timetable. When one or more such motions have been timely
filed, “the time to file an appeal runs for all parties from the entry of the
order disposing of the last such remaining motion.” Fed. R.App. P. 4(a)(4)
(A). See Chapter 58.
However, the filing of such motions does not prohibit the prevailing party
from starting to execute on the judgment. Instead, the Rules specifically
authorize motions to stay execution pending the district court ruling on a
motion for JMOL or new trial, or a few other less common motions. FRCP
62(b). Consequently, the losing party often, along with its post-judgment
motions, files a motion to stay execution of the judgment. FRCP 62.

G. Possible Actions by the Trial Court

and the Impact on Appeal
What makes post-trial practice somewhat confusing is that a verdict-loser
can combine a motion for JMOL with a motion for new trial, and argue that
it's entitled to judgment despite the verdict, but that if not judgment, it's at
least entitled to a new trial. The system wants one appeal, and if on appeal
the appellate court decides that the verdict loser should remain so, it should
also address whether, in the alterative, the verdict loser was entitled to a
new trial. A trial judge, therefore, can grant or deny the relief sought in the
alternative, or conditionally. As a result, the trial when presented with
appropriate post-trial motions for JMOL or, in the alternative, for a new
trial, can:

This chart depicts all of this graphically:

Checkpoints
Can you describe the steps that a verdict loser must take before the jury is discharged? After
judgment is entered to obtain judgment in its favor? To obtain a new trial?
Do you understand the process for entry of judgment?
Do you understand how the rules require the trial court to rule so that, no matter the decision on
appeal, the questions of who “won” and whether there should be a new trial can both be decided?
Chapter 56

Obtaining Relief after Prevailing

on a Claim

Obtaining Relief Roadmap

This chapter explains that a party who obtains a judgment granting relief against another
party generally can “execute” that judgment. “Executing a judgment” permits the prevailing
party as a judgment creditor to utilize state methods for collecting the judgment, such as
attachment of real or personal property (so it can be sold) and garnishment of wages.

A. Execution of Judgment and Discovery

in Aid of Execution
Rule 69(a) controls execution of a judgment, and has two main
provisions. The first explains the execution process, and the second allows
the holder of a judgment to obtain discovery in aid of execution. It
provides:
(1) Money Judgment; Applicable Procedure. A money judgment is
enforced by a writ of execution, unless the court directs otherwise. The
procedure on execution — and in proceedings supplementary to and in
aid of judgment or execution — must accord with the procedure of the
state where the court is located, but a federal statute governs to the
extent it applies.
(2) Obtaining Discovery. In aid of the judgment or execution, the
judgment creditor or a successor in interest whose interest appears of
record may obtain discovery from any person — including the
judgment debtor — as provided in these rules or by the procedure of
the state where the court is located.
Execution is how a judgment creditor turns the judgment — a piece of
paper — into money. A judgment creditor must rely on the execution
procedures of the state in which the district court sits. FRCP 69(a);
Fuddruckers, Inc. v. KCOB I, LLC, 31 F. Supp. 2d 1274, 1279 (D. Kan.
1998) (“a judgment creditor is confined to the methods authorized by state
law with respect to execution procedures, including the method for
conducting a formal hearing in aid of execution”). Most states have various
procedures that can be used, including garnishment of wages, writs of
attachment (to force sale of real or personal property), and other
mechanisms.
If the creditor needs to obtain discovery to identify assets or otherwise
execute the judgment, it can rely upon either state or federal discovery
procedures. See In re Clerici, 2007 WL 840327 (11th Cir. 2007); see also
F.D.I.C. v. LeGrand, 43 F.3d 163, 171 (5th Cir. 1995) (rejecting judgment
debtor's argument that “state procedural rules apply to the determination of
the post-judgment discovery issue”). The scope of post-judgment discovery
is broad so a judgment creditor can discover assets upon which to execute.
LeGrand, 43 F.3d at 172.

B. The Judgment Loser Can Move

in Federal Court to Stay Execution
of the Judgment Pending Appeal
Federal Rule of Civil Procedure 62(a) provides that a prevailing party
may not execute a judgment until fourteen days after the entry of judgment.
There are three ways to stay a judgment pending appeal. Unless the federal
court stays execution, the judgment holder is free to seek execution of the
judgment, pursuant to Rule 69. First, the judgment-creditor can agree to
stay execution. Although not unheard of, agreeing to a stay will greatly
reduce the leverage that the judgment creates.
Second, the rules provide two grounds to stay execution of money
judgments under Rule 62(d) or 62(f).
First, under Rule 62(d), execution of a money judgment is automatically
stayed pending appeal if the judgment-debtor posts a supersedeas bond of a
type and in an amount left to the discretion of the trial court. Acevedo-
Garcia v. Vera-Monroig, 296 F.3d 13, 17 (1st Cir. 2002). The requirement
of a bond can be excused if: (1) the defendant's ability to pay is so plain that
the posting of a bond would be a waste of money; or (2) the bond would put
the defendant's other creditors in undue jeopardy. Olympia Equipment
Leasing Co. v. Western Union Tel. Co., 786 F.2d 794, 796 (7th Cir. 1986).
Second, Rule 62(f) provides that if “a judgment is a lien upon the
judgment debtor's property . . . , a judgment debtor is entitled to the same
stay of execution the state court would give.” The district court must grant a
stay without a bond if the requirements of Rule 62(f) are met. Id .To obtain
a stay pending appeal, a movant must establish a strong likelihood of
success on the merits or, failing that, nonetheless demonstrate a substantial
case on the merits provided that the harm factors militate in its favor. Hilton
v. Braunskill, 481 U.S. 770, 778 (1987). In deciding whether to grant a stay
pending appeal, a court “assesses the movant's chances of success on the
merits and weighs the equities as they affect the parties and the public.” E.I.
du Pont de Nemours & Co. v. Phillips Petroleum Co., 835 F.2d 277, 278
(Fed. Cir. 1987).

Checkpoints

Can you explain the process that a judgment-winner uses to obtain money awarded by a court?
Can you explain why federal courts have a limited role in that process, and describe it?
Chapter 57

Limited Availability of Appeals:

The Final Judgment Rule and Its
Exceptions

Final Judgment Rule Roadmap

This chapter explains the final judgment rule, which provides that ordinarily there can be
no appeal until final judgment, which means essentially when the case is “over.”
This chapter also identifies the few, narrow exceptions to the final judgment rule.

Most of law school is spent reading decisions of the state or federal

supreme or appellate courts. As a result, you may believe that appeals are
both common and easily obtained. That's not the case. One of the more
counter-intuitive aspects of civil procedure is that appeals are the exception,
not the rule. Although we could have a system in which the decisions of
district court judges are readily reviewed on appeal, and in which any error
can be corrected, we do not. Instead, as a general rule an appeal cannot take
place until the district court has completely resolved the parties' dispute and
entered a final judgment.
Other doctrines also limit the ability of a litigant to obtain relief on
appeal. For example, many decisions by district court judges are reviewed
for an “abuse of discretion,” and so an appellate court will not reverse even
if it were, on its own, to have decided the issue the other way. It gives
deference to the trial court. Similarly, appellate courts give deference to
factual findings of district court judges: by reversing them generally only if
a fact finding is “clearly erroneous.” Finally, even if a district court judge
has erred, an appellate court will not reverse unless the error caused a
certain amount of harm: there is such a thing as “harmless error.”
These various procedures and doctrines make appeals the exception, not
the rule, and make it difficult to reverse a judge on appeal. It is important to
grasp the breadth of the final judgment rule and the narrowness of
exceptions to that rule, along with doctrines that limit the ability of litigants
to obtain reversal of district court decisions, because together they give
tremendous power to district court judges and that should make you
understand that getting it right is important, because chances are there will
only be one opportunity to do so and any mistake will not be easily
overturned.

A. Who Can Appeal?

As a general rule, a party can appeal only when it has both suffered an
adverse impact — when it has been “aggrieved” — by a trial court's
judgment or order and it has preserved its objection to the error. To be clear,
a party who failed to preserve its objection can still appeal, but the hurdle
that it must clear to reverse the district court — called “plain error” — is
incredibly high.
Whether a party suffered an adverse impact is often clear: the plaintiff
suffers an adverse impact where a jury returns a verdict for the defendant
against the only claim brought by the plaintiff, for example. Conversely, if
the jury were to have found for the defendant, it would suffer an adverse
impact. A plaintiff who wins only one claim out of more than one filed may
also suffer an adverse impact. For example, a plaintiff who pleads both
fraud and breach of contract but who prevails only on the breach of contract
claim likely suffers an adverse impact because fraud allows for punitive
damages and for a somewhat greater measure of damages than contract
claims.
But a party who obtains a judgment that awarded it all that it had sought
is not aggrieved and cannot appeal. Armotek Indus., Inc. v. Employers Ins.,
952 F.2d 756, 759 n. 3 (3rd Cir. 1991) (defendant's appeal dismissed
because it was not aggrieved by a judgment in its favor); Watson v. City of
Newark, 746 F.2d 1008, 1010 (3d Cir. 1984) (“Generally, a party who
receives all of the relief which he sought is not aggrieved by the judgment
affording the relief and cannot appeal from it.”); In re Arthur Treacher's
Franchisee Litig., 689 F.2d 1137, 1149, n. 16 (3d Cir. 1982) (party who is
successful in district court has “no right of appeal from a judgment in its
favor for the purpose ‘of obtaining a review of findings he deems erroneous
which are not necessary to support the decree’”). A party who is not
aggrieved includes a plaintiff who voluntarily dismisses its complaint. See,
e.g., Bell v. City of Kellogg, 922 F.2d 1418 (9th Cir. 1991). Consequently, a
party may have been subject to court errors of even constitutional
proportions, but if the final decision, order, or judgment gives it all the
relief it sought, those errors are beyond appellate review.
Even if the party was aggrieved, it can realistically appeal issues only to
the extent its lawyer preserved the error in the district court. Preservation of
error is a complex subject. E.g., Rush v. Smith, 56 F.3d 918, 922 (8th
Cir.1995) (party failed to lodge a timely objection to the trial judge's
comments); Dupre v. Fru-Con Eng'g, Inc., 112 F.3d 329, 336 (8th Cir.
1997) (“[o]ne of the most fundamental principles in the law of evidence is
that in order to challenge a trial court's exclusion of evidence, an attorney
must preserve the issue for appeal by making an offer of proof,” and where
the offer is unrecorded, review of the exclusion of evidence is for “plain
error”); Yannacopoulos v. Gen'l Dynamics Corp., 75 F.3d 1298, 1304 (8th
Cir. 1996) (“When a party waits until the end of a case to complain of juror
misconduct . . . the objection is waived . . . and we will reverse the District
Court only if it has committed plain error”); McKeel v. City of Pine Bluff,
73 F.3d 207, 211 (8th Cir. 1996) (to preserve the error of exclusion of
evidence, the party objecting must lodge an objection at trial, and failure to
object limits the appellate court to “plain error” review).
As a general rule, though, counsel's failure to make a timely and specific
objection at trial “results in a waiver of the objection advanced on appeal,
and the jury verdict can be reversed only for plain error.” Preferred RX, Inc.
v. Am. Prescription Plan, Inc., 46 F.3d 535, 547 (6th Cir. 1995). Plain error
exists “where the error was obvious and prejudicial and require[s] action by
the reviewing court in the interests of justice.” Ivey v. Wilson, 832 F.2d 950,
955 (6th Cir. 1987).

B. When is the Earliest an Appeal Can

Be
Taken? The Final Judgment Rule and
Its Few Exceptions
The final judgment rule is embodied in 28 U.S.C. § 1291, which creates
and limits appellate authority. That statute provides that appeals lie “from
all final decisions of the district courts.” The negative implication is that
appeals lie only from final judgments of district courts. An attempt to
appeal made prior to a final judgment is, therefore, premature unless it falls
within one of the several exceptions to the final judgment rule. This section
addresses what constitutes a “final judgment.” The next section addresses
exceptions to the rule.
The importance of knowing when a “final judgment” has been entered
comes from the need for timely filing of an appeal after a “final judgment”
has been entered, and from recognizing when an order is not a final
judgment, and so cannot be appealed from. The issue is jurisdictional, and
so an appellate court on its own must address the issue, even if the parties
do not. See also FRCP 12(h)(3) (district courts may address subject matter
jurisdiction sua sponte).
The rules require that a final judgment must “be set forth on a separate
document” unless it an order disposing of a motion: (1) for judgment under
Rule 50(b); (2) to amend or make additional findings under Rule 52(b); (3)
for attorney's fees under Rule 54; (4) for a new trial, or to alter or amend the
judgment, under Rule 59; or (5) for relief under Rule 60. See FRCP 58.
The separate document rule is “designed to reduce uncertainty on the part
of an aggrieved party as to when the time to file a notice of appeal begins to
run.” RR Vill. Ass'n Inc. v. Denver Sewer Corp., 826 F.2d 1197, 1201 (2d
Cir. 1987). Rule 58(a) “must be mechanically applied . . . to avoid new
uncertainties as to the date on which a judgment is entered.” U.S. v.
Indrelunas, 411 U.S. 216, 221–22 (1973) (per curiam). “[A] one-sentence
order denying a motion satisfies the separate document rule.” RR Vill., 826
F.2d at 1201. “[A]n order that is part of an opinion or memorandum,
however, does not.” Id.
So, a document that is a separate document that is a “final judgment”
must be appealed from within 30 days. But what is a final judgment?
The definition of a final judgment is straightforward: it “is one which
ends the litigation on the merits and leaves nothing for the court to do but
execute the judgment.” Catlin v. U.S., 324 U.S. 229, 233 (1945). Applying
the final judgment rule is also straightforward in many common
circumstances. Certain things are clearly “final judgments” and so are
appealable as of right. For example, a paper labeled “final judgment” issued
after a jury verdict resolving all the claims in a suit is a “final judgment.”
On the other end of the spectrum, certain things are clearly not “final
judgments” and so do not create a right of appeal unless they fall within an
exception. For example, orders granting or denying discovery are not final
decisions and cannot be reviewed until final judgment. See U.S. v. Diabetes
Treatment Centers of Am., Inc., 444 F.3d 462, 471 (6th Cir. 2006).
In between those two extremes lie ambiguity, and what the comments to
the Federal Rules of Appellate Procedure themselves call “a trap for an
unsuspecting litigant.” Timing is the culprit: appeal too soon, and unless
there's an exception to the final judgment rule, the appeal will be dismissed
as “premature.” Appeal too late, and the right of appeal is waived. Thus,
identifying exactly when a “final judgment” exists is crucial.
Labels do not count. Thus, a district court captioning an otherwise
interlocutory order as a “final judgment” does not make it so. E.g., Liberty
Mut. Ins. Co. v. Wetzel, 424 U.S. 737 (1976) (dismissing appeal from
district court order which “directed that final judgment be entered . . .”).
Instead, it is the substantive impact of whether the paper ends litigation on
the merits.
But “ends the litigation on the merits” is not the same as “completely
ends activities in the trial court.” Thus, even if there are questions
“remaining to be decided after an order ending litigation” that does not
prevent a paper from being a final judgment, so long as the answers to those
questions will not “moot or revise decisions embodied in the order.”
Budnich v. Becton Dickinson & Co., 486 U.S. 196, 199 (1988). So, for
example, the fact that the district court must still decide a request for
attorneys' fees does not render the judgment issued by the court non-final.
Id. (collecting cases). Similarly, an order imposing sanctions on an attorney
is not appealable as a final order even where the attorney no longer
represents a party to the case. Cunningham v. Hamilton County, 527 U.S.
198 (1999).

1. Exceptions to the Final Judgment Rule

Federal appellate jurisdiction is statutorily circumscribed. Appeals of
anything but a “final decision” are, therefore, available only in very narrow
circumstances. As a result, an interlocutory order may not be appealed
unless: (1) the district court has directed entry of a partial final judgment
under Rule 54(b); (2) the district court certified a controlling issue of law
under § 1292(b); (2) the order includes the grant or denial of an injunction,
§ 1292(a)(1); (4) the order is appealable under the judge-made collateral
order doctrine; or (5) mandamus relief is available. See Great Rivers Co-op.
of S.E. Ia. v. Farmland Indus., Inc., 198 F.3d 685, 688–89 (8th Cir. 1999).
The following table summarizes the exceptions.

a. Rule 54(b)
The final judgment rule does not permit appeals unless the case is “over.”
What if, however, the case involves multiple parties, and claims by, or
against, one of them are entirely dismissed? Under the final judgment rule,
no appeal will lie because there is still more for the court to do beyond
executing the judgment: it has to resolve the remaining claims of the
parties.
Rule 54(b) applies only when a suit “presents more than one claim for
relief — whether as a claim, counterclaim, crossclaim, or third-party claim
— or when multiple parties are involved.” In that circumstance, the rule
makes it clear that an order — no matter what it is labelled by the court —
“that adjudicates fewer than all the claims or the rights and liabilities of
fewer than all the parties does not end the action as to any of the claims or
parties . . .” FRCP 54(b). Consequently, for example, a defendant in a multi-
defendant suit, against whom even all claims have been dismissed, still
must monitor the lawsuit and is still a “party” to the suit. There is no final
judgment even as to that defendant. The judge can reconsider his decision
at any time and there is no appeal because there is no final judgment. That's
the general rule.
But there is an exception in Rule 54(b). It creates a procedure for a party
to have the district court enter a partial final judgment, permitting an
immediate appeal from a judgment even when some of the case remains
pending. That exception comes from the first sentence of Rule 54(b):
When an action presents more than one claim for relief . . . or when
multiple parties are involved, the court may direct entry of a final
 judgment as to one or more, but fewer than all, claims or parties only if
the court expressly determines that there is no just reason for delay.
FRCP 54(b).
Taken as a whole, if a case involves more than one claim or party and if
the court has not resolved it all, then the any order disposing of part of the
case can be modified at any time by the district court, and so is not
appealable, unless (1) the order adjudicates at least one claim in a multiple
claim suit and (2) the district court (a) “expressly determines” that there is
no just reason to delay and (b) expressly directs entry of a final judgment on
the claim, or claims, adjudicated. So, the general rule is that the
adjudication of some, but not all, claims does not constitute an appealable
order. We turn to the exception in Rule 54(b) now.

i. Adjudication of at Least One of Multiple Claims

Rule 54(b) only gives a district court power to direct entry of a partial
final judgment if it has adjudicated at least one claim in a suit involving
more than one claim, or if it involves multiple parties.
Multiple claims generally do not exist where the claims are related to
each other. Instead, they exist where one claim is factually independent or
could be enforced separately from another, or where there is more than one
type of relief requested or potential recovery. See Advanced Magnetics v.
Bayfront Partners, 106 F.3d 11, 16, n. 21 (2d Cir. 1997); Ginett v. Computer
Task Group, 962 F.2d 1085, 1096 (2d Cir.1992) (“Only those claims
‘inherently inseparable’ from or ‘inextricably interrelated’ to each other are
inappropriate for rule 54(b) certification.”).
When is a claim adjudicated? A judgment can be certified for appeal
under Rule 54(b) only when it reflects “an ultimate disposition of an
individual claim entered in the course of a multiple claims action.” Sears,
Roebuck & Co. v. Mackey, 351 U.S. 427, 436 (1956). The requirement of a
final disposition of a claim is mandatory and is not a matter of discretion.
Houston Indus. Inc. v. U.S., 78 F.3d 564 (Fed. Cir. 1996). Thus, an order
which states that a plaintiff has established one element of a claim, or which
otherwise decides an issue but which does not adjudicate a claim, cannot
properly be the subject of a Rule 54(b) motion. The resolution of individual
issues within a claim does not satisfy the requirement in Rule 54(b) that a
claim be adjudicated. Compare Liberty Mut. Ins. Co. v. Wetzel, 424 U.S.
737, 742–43 (1976) (entry of judgment under Rule 54(b) was not proper
where district court determined issue of liability in employment
discrimination claim but requests for relief, including damages, remained).

ii. Express Determination There Is No Just Reason for Delay

Often a district court will state in its certification order the words
required in Rule 54(b): there is no just reason for delay. That language is
required in some circuits, but even when it is required, it may not control.
When it is required, its absence precludes appeal. In some circuits, “when
district courts fail to make express determinations, we do not consider the
parties' arguments about finality and no just reason for delay.” New Mexico
v. Trujillo, 813 F.3d 1308 (10th Cir. 2016). Even when it is present, a court
will review the determination for an abuse of discretion. If a circuit does nto
require the language, it will look at the order together with the record in the
district court to determine if the district court had an unmistakable intent to
render the issue appealable under Rule 54(b). Ford v. Elsbury, 32 F.3d 931,
934–35 (5th Cir. 1994).
The reason certification is required is because Rule 54(b) balances two
policies: avoiding the “danger of hardship or injustice through delay which
would be alleviated by immediate appeal” and “avoid[ing] piecemeal
appeals.” PYCA Indus. v. Harrison County Waste Water Management Dist.,
81 F.3d 1412, 1421 (5th Cir.1996). The purpose of Rule 54(b) is to provide
the opportunity to appeal adjudication affecting some, but not all, of the
parties or some but not all of the claims against a single party.
The first policy, the “historic federal policy against piecemeal appeals,”
cuts against certifying cases for appeal under Rule 54(b). Reiter v. Cooper,
507 U.S. 258 (1993). Respect for that policy requires that the court's power
to enter a final judgment before the entire case is concluded, in order to
permit an aggrieved party to take an immediate appeal, be exercised
sparingly. The Supreme Court has emphasized that “[n]ot all” dismissals of
“individual claims should be immediately appealable, even if they are in
some sense separable from the remaining unresolved claims.” Curtiss-
Wright Corp. v. General Electric Co., 446 U.S. 18 (1980). Likewise, Rule
54(b) “should be used only in the infrequent harsh case,” Cullen v.
Margiotta, 618 F.2d 226, 228 (6th Cir. 1980), such as when “there exists
‘some danger of hardship or injustice through delay which would be
alleviated by immediate appeal,’” id. (quoting Brunswick Corp. v. Sheridan,
582 F.2d 175, 183 (2d Cir.1978)).
 Piecemeal appeals result in additional work for courts and the parties. For
example, if a plaintiff's claims against one of two defendants are
adjudicated and an appeal is permitted, the plaintiff will be proceeding in
the district court against one defendant while having to appeal the judgment
in favor of the other defendant.
The second policy, danger of hardship, is a reason to certify, but it is
personal to a party and finding it too readily will create the risk of
unnecessary appeals and violations of the final judgment rule. As a result,
great hardship is required. Courts emphasize that certification under Rule
54(b) should be “exercised sparingly,” and “only if there are interests of
sound judicial administration and efficiency to be served, or in the
infrequent harsh case where there exists some danger of hardship or
injustice through delay which would be alleviated by immediate appeal.”
Harriscom Svenska AB v. Harris Corp., 947 F.2d 627, 629 (2d Cir. 1991).
This means that “[n]ot all” dismissals of “individual claims should be
immediately appealable, even if they are in some sense separable from the
remaining unresolved claims.” Curtiss-Wright Corp., 446 U.S. at 8. “The
power which this Rule confers upon the trial judge should be used only in
the infrequent harsh case,” Cullen v. Margiotta, 618 F.2d 226, 228 (2d Cir.
1980), such as “if there exists ‘some danger of hardship or injustice through
delay which would be alleviated by immediate appeal.’” Id. That means, for
example, that if the district court dismisses some but not all claims in an
action, but the remaining claims will require “the same or closely related
issues . . . to be litigated,” the court generally should not certify its
judgment as appealable under Rule 54(b), Nat'l Bank of Washington v.
Dolgov, 853 F.2d 57, 58 (2d Cir.1988), unless it concludes “that adherence
to the normal and federally preferred practice of postponing appeal until
after a final judgment has been entered . . . will cause unusual hardship or
work an injustice.” Hogan v. Consolidated Rail Corp., 961 F.2d 1021, 1026
(2d Cir. 1992).
For these reasons, the need to avoid a second trial in cases where the
dismissed claims are closely related to the still-surviving claims is generally
not a proper ground to certify a case for appeal. See Hogan, 961 F.2d at
1026 (“Though we sympathize with the district court's desire to avoid a
retrial of the entire case . . . the interrelationship of the dismissed and
surviving claims is generally a reason for not granting a Rule 54(b)
certification. . . . To deem sufficient under Rule 54(b) a finding simply that
an immediate appeal might avoid the need for a retrial . . . could only
contravene the federal policy against piecemeal appeals.” Harriscom, 947
F.2d at 631 (“[T]he federal scheme does not provide for an immediate
appeal solely on the ground that such an appeal may advance the
proceedings in the district court.”); see also Brunswick Corp. v. Sheridan,
582 F.2d 175, 185 (2d Cir.1978) (disapproving district court's Rule 54(b)
certification and cautioning that “[t]he policy against piecemeal appeals of
intertwined claims should not be subverted by the specters of additional
trials summoned up by . . . able district judge[s]”).

iii. Express Entry of Final Judgment

Again, normally a district court that certifies a case for appeal under Rule
54(b) simply captions the order as a “final judgment” and includes a
statement that the judgment is intended to be appealable. However, the
words are not required and are not enough, by themselves, to indicate the
intent to permit an interlocutory appeal under Rule 54(b).

iv. Waiver of the Right to Seek Rule 54(b) Certification

Although Rule 54(b) does not have a time limit on seeking certification,
delay can waive the right to use the procedure. The court in Schaefer v.
First Nat'l Bank of Lincolnwood, 465 F.2d 234, 236 (7th Cir.1972), held
that absent exceptional circumstances it would be an abuse of discretion for
a district court to enter judgment under Rule 54(b) when the motion for
certification had been filed more than 30 days after the entry of the order.
Otherwise, a party would have more time to appeal during a lawsuit than it
would after final judgment.

v. Appellate Review
A party on appeal of a Rule 54(b) order can argue that certification was
improper, and so the appeal should be dismissed. Appellate courts review a
district court's Rule 54(b) certification for abuse of discretion. Curtiss-
Wright Corp., 446 U.S. 1, 8–10. However, because Rule 54(b) severance is
consistent with the final judgment rule, certification is rarely reversed on
appeal. See, e.g., In re First T.D. & Inv., Inc., 253 F.3d 520, 531–33 (9th
Cir. 2001).

b. Collateral Orders
A “collateral order” may be appealed before final judgment. The
collateral order doctrine is a common law exception that grew out of Cohen
v. Beneficial Indus. Loan Corp., 337 U.S. 541(1949). The Supreme Court
has repeatedly characterized the collateral order doctrine as “narrow,” and
described conditions for its application as “stringent,” explaining that it
“should stay that way and never be allowed to swallow the general rule.”
Digital Equip. Corp. v. Desktop Direct Inc., 511 U.S. 863, 868 (1994). In
addition, strict construction of the collateral order doctrine is consistent
with the statutory policy against piecemeal appeals that underlies the final
judgment rule. Thus, courts apply the test “without regard to the chance that
the litigation at hand might be speeded, or a particular injustice averted, by
a prompt appellate court decision.” Digital Equip., 511 U.S. at 868. The
reason for the strict construction is the concern that the collateral order
doctrine “will overpower the substantial finality interests § 1291 is meant to
further: judicial efficiency, for example, and the ‘sensible policy “of
avoid[ing] the obstruction to just claims that would come from permitting
the harassment and cost of a succession of separate appeals from the
various rulings to which a litigation may give rise.”’” Will v. Hallock, 546
U.S. 345 (2006).
In narrow circumstances, Cohen and the collateral order exception permit
appeal, before final judgment, of a district court order but only one that (i)
“conclusively determine[s]” the disputed question; (ii) “resolve[s] an
important issue completely separate” from the merits of the action; and (iii)
is “effectively unreviewable” on appeal from a final judgment. Coopers &
Lybrand v. Livesay, 437 U.S. 463, 468–69 (1978). If the order does not
satisfy each requirement, appellate review must await final judgment. See
Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 276
(1988). Many orders will meet the first two requirements, but not the third.

i. Conclusive Determination
It is usually clear whether or not the district court's decision conclusively
determines an issue, and when it does not. See, e.g., Blake v. Gov't of V.I.
Dept. of Housing, 198 Fed. Appx. 216 (3rd Cir. 2006) (order staying
discovery on affirmative defense did not conclusively resolve whether
affirmative defense was proper); Reyes v. Freebery, 192 Fed. Appx. 120
(3rd Cir. 2006) (order which trial court entered “without prejudice” to party
to re-urge its motion did not conclusively determine the issue).

ii. An Important Issue Separate From the Merits

 The right at issue must be jurisprudentially “important.” Generally courts
weigh the importance of the issue to the parties to the litigation against “the
policies militating against interlocutory appeals.” Lauro Lines S.R.L. v.
Chasser, 490 U.S. 495, 502 (1989) (Scalia, J., concurring). The issue must
be important in light of the fact that it will result in piecemeal appeals. Id.

iii. Effectively Unreviewable After Appeal

This is the hardest element to satisfy. “It is not mere avoidance of trial,
but avoidance of a trial that would imperil a substantial public interest, that
counts when asking whether an order is ‘effectively’ unreviewable if review
is to be left until later.” Sinochem, 126 S.Ct. at 959. The decision in Lauro
Lines illustrates this point. In that case, a man was killed by terrorists who
had hijacked a cruise liner. The man's estate filed a wrongful death action
against the owner of the cruise line, which moved to dismiss based upon a
forum selection clause which ostensibly obligated all suits to be brought in
Naples, Italy. The district court denied the motion to dismiss, and the
defendant sought to appeal.
The Supreme Court held that the order was not within the collateral order
exception because it was reviewable after appeal, even though that meant
that the cruise ship owner would have to go through the entire trial and
then, after final judgment, appeal and get the case dismissed, then have the
suit brought again, if at all, in Italy. The Court emphasized that an order was
“effectively unreviewable” only if the right would be destroyed if not
vindicated prior to trial. The right to have the case heard in Italy would not
be destroyed by trial in the U.S.: “If it is eventually decided that the District
Court erred in allowing trial in this case to take place in New York,
petitioner will have been put to unnecessary trouble and expense, and the
value of its contractual right to an Italian forum will have been diminished,”
but that was not enough to “essentially destroy” the right. Lauro Lines, 490
U.S. at 502. See Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863
(1994) (district court's order vacating its prior order dismissing a case
pursuant to parties' settlement was not a final judgment).
Few orders meet this hurdle, but some do — usually those that involve
the right not to be sued, at all. Puerto Rico Aqueduct and Sewer Auth. v.
Metcalf & Eddy, Inc., 506 U.S. 139, 144 (1993) (state sovereign immunity
immediately appealable); Mitchell v. Forsyth, 472 U.S. 511, 526 (1985)
(qualified executive immunity immediately appealable); Larsen v. Senate of
Commonwealth of Penn., 152 F.3d 240, 245 (3d Cir.1998) (legislative
immunity immediately appealable). Finally, the fact that courts split on
whether even an order that will result in disclosure of privileged
information meets the test gives some idea of its narrow nature. See U.S. v.
Diabetes Treatment Centers of Am., Inc., 444 F.3d 462, 471 (6th Cir. 2006)
(explaining that some circuits permit collateral order review of discovery
orders involving claims of privilege).

c. Orders Granting or Denying Injunctive Relief:

28 U.S.C. § 1292(a)(1)
There are generally three types of injunctions: permanent, preliminary,
and temporary. Permanent injunctions are issued with final adjudication and
so are appealable as part of a final injunction. Permanent injunctions are
issued before then, but last (at the longest) only until final adjudication.
While that may only “a few” months, even that amount of time can be
disruptive of a business, and litigation can take years. Temporary
injunctions, or “TROs” last only 30 days and are typically available only, in
a civil case, to maintain the status quo for a short time until the court can
more fully adjudicate the claims.
The availability of an appeal prior to final judgment thus matters only if
the court has entered a preliminary or temporary injunction since permanent
injunctions by definition only exist after final judgment. Permanent
injunctions are appealable as of right under Section 1292(a)(1) and by its
express terms. See also Continental Training Services, Inc. v. Cavazos, 893
F.2d 877, 880 (7th Cir.1990) (where a permanent injunction has been
granted that supersedes the original preliminary injunction, appeal from an
interlocutory preliminary order is properly dismissed); New York State Nat.
Organization for Women v. Terry, 886 F.2d 1339, 1350 (2d Cir.1989) (“the
appealability of the district court's grant of a preliminary injunction is moot
. . . because the district court subsequently granted a permanent
injunction”).
28 U.S.C. § 1292(a)(1) creates appellate jurisdiction over “[i]nterlocutory
orders of the district courts . . . granting, continuing, modifying, refusing or
dissolving injunctions, or refusing to dissolve or modify injunctions, except
where a direct review may be had in the Supreme Court.” This statute “was
intended to carve out only a limited exception to the final-judgment rule.”
Carson v. Am. Brands, Inc., 450 U.S. 79, 84 (1981).
This statute presents several issues that are common to all forms of
injunctions. For example, although an order denying or granting a
preliminary injunction would be immediately appealable, orders that would
seem to have the same substantive impact are not appealable, such as
denying a motion for summary judgment where the plaintiff contended it
was entitled to a preliminary injunction. Second, orders that are not labeled
“injunctions” but which have the same effect as an injunction may be
appealable if they otherwise meet the requirements of the statute. We turn
briefly to those issues before turning to issues that turn on which type of
injunction is entered, preliminary or temporary.
Suppose a court denies a motion for summary judgment in a case where
the only relief the plaintiff seeks is an injunction. Sounds like the district
court denied a preliminary injunction? It did not. Conversely, suppose the
court grants a summary judgment motion of the plaintiff in that same case,
or even one where it sought permanent injunctive relief upon entry of
summary judgment. Neither results in an order granting or denying
injunctive relief. Instead, “the denial of summary judgment is not a final,
appealable decision. Moreover, even when a district court denies a
summary judgment motion seeking a permanent injunction, § 1292(a)(1)
does not provide a basis for appellate jurisdiction. In Switzerland Cheese
Ass'n, Inc. v. E. Horne's Market, Inc., 385 U.S. 23, 25 (1966), the Supreme
Court characterized the denial of such a summary judgment motion because
of disputed issues of fact as relating only to “pretrial procedures” and
therefore not “‘interlocutory’ within the meaning of § 1292(a)(1).” United
Keetoowah Band of Cherokee Indians in Oklahoma v. U.S. ex rel. Norton,
2007 WL 2562352 (10th Cir. Sept. 6, 2007).
On the other hand, sometimes a court can grant summary judgment and
order a defendant (or other party) to do something. An order that someone
do, or not do, something is injunctive relief. Under those circumstances the
grant of summary judgment along with the order requiring action (or not
acting) is appealable, even if the case remains pending below (for
adjudication of other claims, damages, and so on). See Gon v. First State
Ins. Co., 871 F.2d 863, 866 (9th Cir. 1989) (“The order [directing the
insurer to pay defense expenses] met the general definition of an injunction
in that it was directed to [the insurer], was enforceable by contempt, and
provided most of the substantive relief the insureds sought.”).
We turn to the aspects of Section 1291(a)(1) which depend on the type of
injunction issued: preliminary or temporary.
i. Orders Granting or Denying Preliminary Injunctions:
Appealable as of Right
A district court's order granting or denying a preliminary injunction is
generally immediately appealable under 28 U.S.C. § 1292(a)(1). But even if
the injunction runs through trial, to be appealable, the order must “either
grant or deny the relief sought by a claimant in more than a temporary
fashion.” Cohen v. Bd. of Trustees of the Univ. of Med. & Dentistry of N.J.,
867 F.2d 1455 (3rd Cir. 1989).

ii. Temporary Restraining Orders: Generally Not Appealable

As a general rule, a temporary restraining order that does nothing but
preserve the status quo is not appealable under Section 1292(a)(1). See
Office of Pers. Mgmt. v. Am. Fed'n of Gov't Employees, AFL-CIO, 473 U.S.
1301, 1303–04 (1985). The reasons are largely practical: TROs last less
than a month and usually terminate with a prompt ruling on a preliminary
injunction, from which the losing party has the right to immediately appeal.
See Vuitton v. White, 945 F.2d 569, 573 (3d Cir.1991). “Therefore, an
appeal of the TRO is not necessary to protect the rights of the parties, and
practical reasons favor waiting for an appeal of the preliminary injunction.”
Northeast Ohio Coalition for Homeless and Serv. Employees Int'l. v.
Blackwell, 467 F.3d 999 (6th Cir. 2006).
However, appeal of a narrow type of order is permitted, even if the
district court captions the order as a “TRO” or “temporary restraining
order.” “The label attached to an order by the trial court is not decisive, and
the court looks to the nature of the order and the substance of the
proceeding below to determine whether the rationale for denying appeal
applies.” Id. “An order may be appealed under section 1292(a)(1) if it has
the practical effect of an injunction and ‘further[s] the statutory purpose of
“permit[ting] litigants to effectually challenge interlocutory orders of
serious, perhaps irreparable, consequence.”’” Id. (quoting Carson v. Am.
Brands, Inc., 450 U.S. 79, 84 (1981)). Thus, an “order granting a TRO may
be appealable as an order granting a preliminary injunction when three
conditions are satisfied: (1) the duration of the relief sought or granted
exceeds that allowed by a TRO (ten days), (2) the notice and hearing sought
or afforded suggest that the relief sought was a preliminary injunction, and
(3) the requested relief seeks to change the status quo.” AT&T Broadband v.
Tech Communications, Inc., 381 F.3d 1309 (11th Cir. 1004).
 Under this exception, interlocutory appeals of TROs have been allowed
if the TRO threatened to inflict irretrievable harm before it expired. See
Ross v. Rell, 398 F.3d 203 (2d Cir. 2005). In addition, courts have allowed
interlocutory appeal of TROs that do not preserve the status quo but rather
act as a mandatory injunction requiring affirmative action. See Belknap v.
Leary, 427 F.2d 496, 498 (2d Cir. 1970). When a TRO does not “merely
preserve the status quo pending further proceedings,” but rather “directs
action so potent with consequences so irretrievable, we provide an
immediate appeal to protect the rights of the parties.” Adams, 570 F.2d at
953; see Am. Fed'n of Gov't Employees, 473 U.S. at 1304–05 (noting that
“[o]nly if the District Court granted the temporary restraining order would
it have disturbed the status quo” by preventing the implementation of new
regulations, and implying that interlocutory appeal would be available).

d. Appeals under 28 U.S.C. § 1292(b)

Under 28 U.S.C. § 1292(b), a district court may certify an otherwise non-
final order for interlocutory appellate review if the order “involves a
controlling question of law as to which there is substantial ground for
difference of opinion and . . . an immediate appeal from the order may
materially advance the ultimate termination of the litigation.” A court of
appeals may then, in its discretion, determine whether the order warrants
prompt review. Id.

i. Requirements
The first sentence of Section 1292(b) provides: “When a district judge, in
making in a civil action an order not otherwise appealable under this
section, shall be of the opinion that such order involves a controlling
question of law as to which there is substantial ground for difference of
opinion and that an immediate appeal from the order may materially
advance the ultimate termination of the litigation, he shall so state in
writing in such order.” Section 1292(b) thus clearly requires that the order
(1) involve a controlling question of law; (2) as to which there is substantial
ground for difference of opinion and (3) an immediate appeal may
materially advance termination of the litigation. See Garner v.
Wolfinbarger, 433 F.2d 117 (5th Cir. 1970) (holding that an order granting
or denying a motion to transfer venue under Section 1404(a) was not
reviewable under Section 1292(b)).
 (a) Controlling Question of Law
Questions are “controlling” when they “materially affect issues
remaining to be decided in the trial court.” Marriott Int'l Resorts, L.P. v.
U.S., 63 Fed. Cl. 144, 145 (Fed. Ct. Cl. 2005). Controlling is not the same
as “important.” Otherwise, interlocutory appeals would neither be
exceptional nor rare. See Singh v. George Washington University, 383 F.
Supp. 2d 99, 105 (D.D.C.2005).
The phrase “question of law” is used “much the same way a lay person
might, as referring to a pure question of law rather than merely to an issue
that might be free from a factual contest. The idea was that if a case turned
on a pure question of law, something the court of appeals could decide
quickly and cleanly without having to study the record, the court should be
enabled to do so without having to wait till the end of the case.” Ahrenholz
v. Bd. of Trustees of Univ. of Ill., 219 F.3d 674, 677 (7th Cir. 2000).

(b) Substantial Ground for Difference of Opinion

There are at least four ways that a party seeking certification can show
that there is “substantial ground” for difference of opinion.
First, there may be two different but plausible interpretations of a line of
cases addressing the legal question. See Vereda, Ltda. v. United States, 271
F.3d 1367, 1374 (Fed. Cir. 2001) (agreeing with district court that
“substantial ground for difference of opinion” was present regarding
interaction between two controlling circuit court cases). Second it can be
shown by splits among the circuit courts. See Marriott Int'l Resorts, 63 Fed.
Cl. at 146. Third, the party can show that there is an intra-circuit conflict or
a conflict between an earlier circuit precedent and a later Supreme Court
case. See Ins. Co. of the West v. United States, 1999 WL 33604131 at *4
(Fed.Cl.1999). Finally, at minimum, the party can argue that there is a
substantial difference of opinion among the district courts. See Hermes
Consol., Inc. v. United States, 58 Fed. Cl. 409, 419–20 (2003), rev'd on
other grounds, 405 F.3d 1339 (Fed. Cir. 2005).
It is not enough that the case present a question of first impression.
“Unsettled” is not the same as a substantial ground for difference of
opinion. In re Flor, 79 F.3d 281, 284 (2d Cir.1996) (“the mere presence of a
disputed issue that is a question of first impression, standing alone, is
insufficient to demonstrate a substantial ground for difference of opinion.”).
 (c) Interlocutory Appeal May Materially
Advance Litigation
This is a pragmatic inquiry. “Whether interlocutory review of this
question would materially advance the resolution of this case depends in
large part on considerations of judicial economy and the need to avoid
‘unnecessary delay and expense’ and piecemeal litigation.” Coast Fed.
Bank, FSB v. United States, 49 Fed. Cl. 11, 14 (Fed. Cl. 2001).

ii. Process in the District Court

The first sentence of Section 1292(b) requires a district court to state in
writing in an order that the order “involves a controlling question of law as
to which there is substantial ground for difference of opinion and that an
immediate appeal from the order may materially advance the ultimate
termination of the litigation.” Typically, a party will by motion ask the
district court, either after it entered its order or in connection with briefing
the motions underlying the order, to certify the order under Section 1292(b).
Even if the elements for certification are present, the trial court can still
deny certification, as it is a matter of discretion.

iii. Process in the Appellate Court

The second sentence of Section 1292(b) provides: “The Court of Appeals
which would have jurisdiction of an appeal of such action may thereupon,
in its discretion, permit an appeal to be taken from such order, if application
is made to it within ten days after the entry of the order . . .” Thus, even if
the district court certifies the order for appeal, the party seeking to appeal
must also apply to the appellate court for it to certify the order as
appealable. Even if the district court believes the requirements of Section
1292(b) are satisfied, the appellate court can still deny review, and it gives
no deference to the district court's decision to grant certification:
Even when all of those factors are present, the court of appeals has
discretion to turn down a § 1292(b) appeal. And we will sometimes do
so. The proper division of labor between the district courts and the
court of appeals and the efficiency of judicial resolution of cases are
protected by the final judgment rule, and are threatened by too
expansive use of the § 1292(b) exception to it. Because permitting
piecemeal appeals is bad policy, permitting liberal use of § 1292(b)
interlocutory appeals is bad policy.
McFarlin v. Conseco Serv., LLC, 381 F.3d 1251 (11th Cir. 2004). The
Seventh Circuit in 2000 noted that it had denied certifications in roughly
two-thirds of appeals under Section 1292(b). See Ahrenholz, 219 F.3d at
675.

iv. Waiver
Under the statute, an appellant who fails to move appellate court within
10 days of entry of the district court's order waives the right to appeal. In
addition, a party who does not promptly ask the district court to certify the
order for appeal can waive the right to seek certification, since the language
of that statue requires that an “immediate appeal” from the order will
materially advance the litigation. As such, the statute clearly contemplates
an expedited procedure for seeking certification to appeal. See Martens v.
Smith Barney, Inc., 238 F. Supp. 2d 596, 600 (S.D.N.Y.2002) (denying
motion certification where movant had waited almost 5 months and had no
reasonable explanation for that delay).

e. Mandamus
Mandamus is the least well defined but, nonetheless, narrowest of the
various exceptions to the final judgment rule. “The remedy of mandamus is
a drastic one, to be involved only in extraordinary situations.” Kerr v.
United States Dist. Court, 426 U.S. 394, 402 (1976). The writ of mandamus
“has traditionally been used in the federal courts only ‘to confine an inferior
court to a lawful exercise of its prescribed jurisdiction or to compel it to
exercise its authority when it is its duty to do so.’” Id. (quoting Will v.
United States, 389 U.S. 90, 95 (1967)) (quoting Roche v. Evaporated Milk
Ass'n, 319 U.S. 21, 26 (1943)). Courts have developed multi-factor tests for
evaluating its propriety, such as this:
(1) The party seeking the writ has no other adequate means, such as a
direct appeal, to attain the relief he or she desires.
(2) The petitioner will be damaged or prejudiced in a way not
correctable on appeal.
(3) The district court's order is clearly erroneous as a matter of law.
(4) The district court's order is an oft-repeated error, or manifests a
persistent disregard of the federal rules.
(5) The district court's order raises new and important problems, or
issues of law of first impression.
Silver Sage Partners, Ltd. v. U.S. Dist. Court, 1998 WL 246526 (9th Cir.
1998). See also In re Chimenti, 79 F.3d 534 (6th Cir. 1996) (applying
similar five factor test).
No doubt to prevent it from swallowing the final judgment rule and the
other narrow exceptions, mandamus has been held unavailable to obtain
appellate review of various rulings including awards of new trials, Silver
Sage, supra, but it has been found proper to review orders compelling
disclosure of privileged information. See U.S. v. Diabetes Treatment
Centers of Am., Inc., 444 F.3d 462, 471 (6th Cir. 2006) (discussing
availability of mandamus and in some circuits collateral orders for review).

C. The Big Picture

Appeals are rare. Appeals prior to final judgment are exceedingly rare.
Those facts highlight important realities about lawyering. First, what the
district court decides will very likely be the final decision. Second, all error
— from the day of filing the complaint 'til the day of final judgment —
must be appealed in one appeal, in a brief that typically is limited to about
50 pages. Third, many issues that a district judge gets wrong will not be
corrected. What does all of that mean? You will get one shot at getting a
judge to rule your way.

Checkpoints

Can you describe how the requirement that a party have been aggrieved by a district court limits who
can appeal?
Can you identify a final judgment?
Can you articulate the exceptions to the final judgment rule and each of their requirements?
Chapter 58

A Brief Word on Appeals

Appeals Roadmap
This chapter summarizes the appellate process, including the constraints on appellate
review.

A. Timing of Filing of Notice of Appeal

The entry of final judgment triggers the 30 day deadline to file a notice of
appeal. Fed. R. App. P. 4(a). That deadline can be extended for good cause
under some circumstances. Id.
Importantly, however, six post-trial motions suspend the time for filing
the notice of appeal. In other words, even though a final judgment has been
entered, if one of the following motions has been filed, the 30 day period
does not begin to run if one or more of these motions are filed: (1) a post-
judgment JMOL motion under Rule 50(b); (2) a motion for new trial under
Rule 59(b); (3) a motion to alter or amend the judgment under Rule 59(e);
(4) a motion to reopen the judgment under Rule 60(b) if that motion is filed
within 10 days of entry of judgment; (5) a motion to amend or make
additional findings of fact under Rule 62(b); and (6) a motion for attorneys'
fees under Rule 54 if the district court extends the time to appeal under Rule
58.
If one of those motions is filed, then the 30-day period begins to run for
all parties once the district court enters “the order disposing of the last such
remaining motion.” Fed. R. App. P. 4(a)(4)(A). However, an appellant does
not have to wait: if a party files a notice of appeal after judgment has been
entered but before the court has ruled on of motion listed above, the notice
of appeal simply does not “become[] effective” before an order disposing of
that motion has been entered. Fed. R. App. P. 4(a)(4)(B)(i).
 B. The Appellate Process
Very briefly, an appellant must file a single brief with the appellate court
for the circuit in which the district court sits. In that one brief, which
generally can run no more than about 50 pages (federal circuits now limit
the length of brief by the number of words, and require certification of the
number of words in a brief), the appellant must explain the facts of the case,
its procedural posture, why the district court erred, and how the appellant
was aggrieved by the judgment below. The appellee gets one brief of
roughly the same length to demonstrate that the district court's judgment
should be affirmed. The appellant then can file a short reply brief.

1. Reversible Error and Harm Must Be

Established
Parties are not guaranteed perfect trials, but instead can obtain a relief on
appeal only if there was error and the error was harmful. Whether a district
court committed error turns on what “standard of review” is applied.
Whether the error was harmful turns on whether the appellant can show that
the error harmed its substantial rights, and may require more depending on
whether the appellant properly preserved its objection.

a. Standards of Review
Appellate courts are courts of review, not places where a second trial
occurs. They receive only written trial transcripts and exhibits used at trial,
or otherwise properly in the appellate record. They do not receive testimony
from witnesses, and except in extraordinary circumstances the record of
what transpired in the district court cannot be enlarged on appeal. If a
document or testimony was not introduced at trial, for example, it cannot be
relied upon on appeal.
As a result, appellate courts are generally deferential to trial courts,
particularly where the error involves an act that by law is discretionary with
a trial judge, or when the appellate court is reviewing fact findings made by
a district court (or jury). In contrast, appellate courts review errors of law
closely, since a three judge panel of an appellate court is more likely to get
the law right and has no real reason to defer to a district judge where the
question is a purely legal one. But, again, error is not enough: the error
must have caused harm.
 There are entire law review articles addressed to which is the proper
standard of review for a particular issue on appeal. The following chart only
summarizes the broad categories, but it applies only if the error was
properly preserved below — if the lawyer objected. Otherwise, the
appellate court may apply a much more deferential standard, finding error
only under if the error was “plain.” Katzenmeier v. Black Powder Prods.,
Inc., 628 F.3d 948 (8th Cir. 2010) (“When a party seeks to exclude evidence
in a motion in limine, but fails to interpose an objection to the evidence
during trial, we review under the plain error standard because the party
failed to preserve the alleged error.”).

Many errors reviewed by appellate courts involve mixed questions of law

and fact, or are legal determinations based on subsidiary fact findings. The
standard of review is critical on appeal, since the less discretion afforded to
the decision below, the more likely it is that the appellate court will reverse.
Hence, appellants do their best to characterize all errors as legal questions,
and appellees portray all issues as being discretionary or factual, or at best,
a mixture of law and fact.

b. Harmful Error Is Required to Reverse

A district court's mistake does not require reversal or remand. Instead, the
party asserting error must demonstrate that the error was harmful by
showing that the error affected that party's substantial rights See FRCP 61;
Federico v. Order of St. Benedict in R.I., 64 F.3d 1, 3 (1st Cir. 1995)
(burden of showing harmful error in a civil case is on party asserting error).
“In determining whether an error affected a party's substantial right[s], the
central question is whether this court can say with fair assurance . . . that the
judgment was not substantially swayed by the error.” Ahern v. Scholz, 85
F.3d 774, 786 (1st Cir. 1996).
Whether harmful error occurred depends on context. Suppose, for
example, that the alleged error was in admitting evidence over an objection.
Under those circumstances, courts rely on various factors to determine the
likelihood that the jury verdict was substantially swayed by the error
include the centrality of the evidence and the prejudicial effect of its
admission or exclusion. See Ahern, 85 F.3d at 786.
On the other hand, if the error concerns assigning the burden of proof to
the wrong party, then whether the error was harmful turns on how close the
case was. Therefore, the only conceivable prejudice from the district court's
error is the possibility that its misallocation of the ultimate burden of proof
affected the outcome of the case. For this to occur, the evidence presented
would have to be in sufficient balance so that the outcome would depend on
who had the burden. See, e.g., U.S. ex rel. Bilyew v. Franzen, 686 F.2d
1238, 1248 (7th Cir. 1982) (“If the evidence is closely balanced, then
common sense indicates there is a reasonable possibility that who bears the
burden of proof will determine the outcome.”); New York Life Ins. Co. v.
Taylor, 147 F.2d 297, 301 (D.C. Cir. 1945) (harmful error found where
burden of proof was placed on wrong party because “the evidence was such
that the result might well have depended on where the ultimate burden of
proof lay”).

2. Affirm, Reverse, Render or Remand

A three judge panel typically decides each appeal, often without
receiving oral argument. Generally, an appellate panel can, with respect to
each claim or defense raised on appeal, either affirm the district court,
reverse it, render (turning the judgment loser below into the judgment
winner on appeal), or remand for further proceedings.

3. Panel Reconsideration and Rehearing En Banc

A party that loses the appeal can file for the panel for reconsideration or
seek rehearing of the panel's decision by all of the active members of the
court, called “rehearing en banc.” Both motions are rarely granted.

C. Petition for Certiorari

 to the United States Supreme Court
The last possible phase in the typical civil suit is the filing by the party
that suffered an adverse result in the appellate court a petition for writ of
certiorari with the United States Supreme Court. In large measure, the Court
has absolute discretion as to what cases it will review, and only a tiny
percentage of cases for which “cert” is sought are ultimately reviewed by
the Court.

Checkpoints

Can you explain why error, alone, is insufficient for an appellate court to reverse a trial court's ruling
or action?
Can you explain when the different standards of review apply and articulate which presents a greater
challenge to an appellant?
Chapter 59

Attacking a Judgment in District

Court under Rule 60(b)

Rule 60(b) Roadmap

This chapter explains how a party can attack a judgment by way of a “collateral” attack
under Rule 60(b), rather than “directly” by an appeal after the judgment, and the severe
limitations that such a party faces.

A. Motions to Reopen the Judgment

under Rule 60(b)
Ordinarily, a party who wants to challenge a judgment must do so within
28 days of its entry by moving for a new trial or JMOL, and then by
appealing. Parke-Chapley Constr. Co. v. Cherrington, 865 F.2d 907, 915
(7th Cir. 1989) (“an appeal or motion for new trial, rather than a FRCP
60(b) motion, is the proper avenue to redress mistakes of law committed by
the trial judge, as distinguished from clerical mistakes caused by
inadvertence . . . parties should not be allowed to escape the consequences
of their failure to file a timely appeal by addressing questions of law to the
trial court for reconsideration. That is the function of appellate courts”).
Rule 60(b) presents a narrow exception to that general rule. The key
point is that Rule 60(b) gives district courts much less power to vacate a
judgment than its plain meaning would suggest to you. The reason for that?
Finality, foremost, and also to encourage parties to vigorously litigate cases:
if a party could easily reopen a case it had lost, there would be no finality
and less incentive to litigate aggressively, since the result could always be
undone later. To avoid that, Rule 60(b) is construed narrowly.

B. The Six Narrow Bases of Rule 60(b)

 and the Short Time Limits
Rule 60(b) sets out five specific, and one general, bases for granting
relief from a final judgment:
On motion and just terms, the court may relieve a party or its legal
representative from a final judgment, order, or proceeding for the
following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence that, with reasonable diligence, could
not have been discovered in time to move for a new trial under Rule
59(b);
(3) fraud (whether previously called intrinsic or extrinsic),
misrepresentation, or misconduct by an opposing party;
(4) the judgment is void;
(5) the judgment has been satisfied, released, or discharged; it is based
on an earlier judgment that has been reversed or vacated; or applying it
prospectively is no longer equitable; or
(6) any other reason that justifies relief.
A Rule 60(b) motion must be made within one year after entry of
judgment under subsections (1), (2), and (3), and otherwise, within a
reasonable time. FRCP 60(c).

C. Adjudication of Rule 60(b) Motions

1. Rule 60(b)(1): Mistake, Inadvertence, Surprise,
or Excusable Neglect
Excusable neglect is the most common basis urged to set aside a default
judgment. The factors to be considered in deciding a motion to set aside a
default judgment are identical to those under Rule 60(b)(1): “(1) whether
the default was willful; (2) whether the plaintiff will be prejudiced if the
default is set aside; and (3) whether the defendant has any meritorious
defenses to the complaint.” Gucci America, Inc., v. Gold Ctr. Jewelry, 158
F.3d 631, 634 (2d Cir. 1998). Although the criteria is “identical to those
used to determine whether to vacate a default judgment under the Rule
60(b)(1) standard of ‘mistake, inadvertence, surprise, or excusable neglect,’
although the ‘good cause’ standard is less rigorous because the concepts of
finality . . . are more deeply implicated in cases of default judgment under
Rule 60.” Richardson v. Nassau County, 184 F.R.D. 497, 501 (E.D.N.Y.
1999).
Whether to set aside a default judgment is a discretionary decision, but
one that must be viewed in light of the “oft-stated preference for resolving
disputes on the merits.” Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 96 (2d
Cir. 1993). Default judgments are “not favored, particularly when the case
presents issues of fact, and doubts are to be resolved in favor of a trial on
the merits.” Meehan, 652 F.2d at 277. Setting aside defaults when business
entities are parties is, as a practical matter, more difficult than with less
sophisticated laymen. See EMI April Music, Inc. v. 1064 Old River Rd.,
Inc., 214 Fed. Appx. 589 (6th Cir. 2007) (fact that corporation's president's
brother died did not excuse failure of corporation to file an answer).

2. Rule 60(b)(2): Newly Discovered Evidence

If a party discovers new evidence after trial — that it could not with
reasonable diligence have otherwise had — that may satisfy the first
requirement of this subsection. Obviously, if after final judgment a party
first learns of the existence of evidence, that evidence is “newly
discovered.”
Courts do afford some flexibility beyond that, recognizing for example,
that a party may have thought during trial that a document that once existed
had been destroyed, and later finding it. In one case, the court found
evidence “newly discovered” under those circumstances, when the pivotal
document, thought to have been destroyed, was later discovered
unexpectedly to have been have survived a disaster because it had been
moved to an unanticipated place. See Serio v. Badger Mut. Ins. Co., 266
F.2d 418 (5th Cir. 1959). However, “[w]hile awareness of evidence,
standing alone, does not categorically preclude considering the evidence to
be ‘newly discovered’ under Rule 60(b)(2), a party's unannounced
awareness of evidence can affect the assessment of whether it exercised the
‘reasonable diligence’ contemplated by the Rule. Fed.R.Civ.P. 60(b)(2).”
Bain v. MJJ Prods., Inc., 751 F.3d 642 (10th Cir. 2014).
While newly discovered evidence that could not have been found without
reasonable diligence is required, it is not enough. The movant must also
must show that the evidence likely would have caused a different result.
Rozier v. Ford Motor Co., 573 F.2d 1332 (5th Cir. 1978).

3. Rule 60(b)(3): Fraud

In Rozier v. Ford Motor Co., 573 F.2d 1332 (5th Cir. 1978), the plaintiff
sued Ford after his wife was killed in a car fire after an accident. During
discovery, the plaintiff had requested any documents analyzing whether the
fuel tank could have been put in a safer place, but Ford responded hat no
such documents existed. The jury after trial found for Ford. Less than a year
later, plaintiff's counsel happened upon a document concerning a similar
model of Ford that did analyze the fuel tank's placement, and sought to
reopen the judgment on the basis of fraud under Rule 60(b)(3).
The court held that a party seeking to reopen a judgment under Rule
60(b)(3) had to show by clear and convincing evidence that the adverse
party obtained a verdict through fraud and that the information prevented
the party that had lost from fully and fairly presenting its case. In
adjudicating that motion, Ford's counsel admitted that he had known of the
document prior to the first trial, but chose not to disclose it. The court held
this satisfied the first element. As to the second the court found that the
document would have made a difference in the way the case was presented,
and that was sufficient — it was not necessary to show the document itself
would have changed the outcome. That is not required under Rule 60(b)(3),
which requires fraud, but it is under Rule 60(b)(2), which does not.

4. Rule 60(b)(4): Judgment is Void

“A void judgment is a legal nullity . . . . [I]t suffices to say that a void
judgment is one so affected by a fundamental infirmity that the infirmity
may be raised even after the judgment becomes final. The list of such
infirmities is exceedingly short; otherwise, Rule 60(b)(4)'s exception to
finality would swallow the rule.” United Student Aid Funds, Inc. v.
Espinosa, 130 S. Ct. 1367 (2010). The narrow “infirmities” that have been
found to render a judgment “void” in terms of Rule 60(b)(4) are limited to
“the rare instance where a judgment is premised either on a certain type of
jurisdictional error or on a violation of due process that deprives a party of
notice or the opportunity to be heard.” Id. Thus, a judgment issued by a
court that lacks subject matter jurisdiction to do so is void only in “the
exceptional case in which the court that rendered judgment lacked even an
‘arguable basis’ for jurisdiction.” Id.

5. Rule 60(b)(5): Judgment has been Satisfied,

Released, Discharged, Reversed, or Become
Inequitable
Rule 60(b)(5) allows a court to reopen a judgment that was satisfied,
released, discharged, or if it has been vacated or reversed on appeal, or if it
has prospective application that has become inequitable. The last phrase
principally covers only judgments that awarded injunctive relief, not orders
granting or denying monetary damages. DeWeerth v. Baldinger, 38 F.3d
1266 (2d Cir. 1994).

6. Rule 60(b)(6): The Narrow Catch-all

The final “catch-all” provision, Rule 60(b)(6), provides that a court may
relieve a party from a final judgment for “any other reason that justifies
relief.” This “any other reason” clause is a “grand reservoir of equitable
power” to do justice in a case, but only if both relief is and was not
warranted by the five other enumerated grounds, and “extraordinary
circumstances” are present. Batts v. Tow-Motor Forklift Co., 66 F.3d 743,
747 (5th Cir. 1995).
Perhaps the most famous Rule 60(b)(6) case is DeWeerth v. Baldinger, 38
F.3d 1266 (2d Cir. 1994). The plaintiff, several years before filing this suit,
had in 1982 filed suit to obtain possession of a Monet painting that
American soldiers had taken from her home during World War II, and that
the defendant had acquired from a Swiss art dealer. The district court in
1987 held a trial and awarded the painting to the plaintiff. However, on
appeal in late 1987, the Second Circuit held that the plaintiff's claim was
barred by the New York statute of limitations because, the Second Circuit
held, it required proof that the plaintiff had acted reasonable diligence in
locating stolen property, and plaintiff had not done so. Three years later,
however, New York's highest court in an unrelated case issued an opinion
holding that the statute of limitations did not require reasonable diligence
by the plaintiff.
The plaintiff then moved the court under Rule 60(b)(6) (and, as well, (b)
(5)) to re-open the prior judgment. The district court granted the motion, but
the Second Circuit reversed. It reasoned that “Erie simply does not stand
for the proposition that a plaintiff is entitled to reopen a federal court case
that has been closed for several years in order to gain the benefit of a newly
announced decision of a state court.” It further held that, although the court
had been wrong in its Erie guess, that was a risk the plaintiff had brought
on herself by filing a diversity action in the first place.

Checkpoints

Can you explain why it is more difficult to challenge a judgment under Rule 60(b) than through
direct appeal?
Can you articulate what each subsection of Rule 60(b) requires in order to set aside a judgment?
Chapter 60

After Appeals: Claim

and Issue Preclusion

Claim and Issue Preclusion Roadmap

This chapter explains the doctrines of claim and issue preclusion.
This chapter also explains how claim and issue preclusion are litigated.

Claim preclusion and issue preclusion are related but distinct doctrines
that are often confused with each other. In part, the confusion stems from
their similar names, and in part because courts often use the phrase “res
judicata” to describe both claim and issue preclusion, while others limit
“res judicata” to refer only to claim preclusion, and use “collateral
estoppel” to refer to issue preclusion. So, normally if you see “collateral
estoppel” you know it's issue preclusion, but if a court uses the phrase “res
judicata,” you need to read it closely to determine which doctrine the court
was using. Let's turn to each.
Claim preclusion helps ensure finality over “disputes.” Broadly stated,
after a lawsuit, a party to that lawsuit — and sometimes others — cannot
later asserts a claim in a different lawsuit if it was the “same” or closely
related to one in the first suit — whether the party later asserting the claim
won, or lost, the first suit. To understand this, back up and think for a
moment about the fact that we want lawsuits to be efficient and final. To
meet those goals, once a party files a lawsuit, the law of claim preclusion
generally requires that party to assert all related claims it then has.
Likewise, if a defendant is sued, to force efficiency and finality, claim
preclusion generally forces the defendant to raise related claims it then has
against the plaintiff. So, for example, a plaintiff who sues for medical
malpractice from a botched back operation cannot later sue for the same
surgery. Claim preclusion prevents later asserting the “same claim” and
more than just the identical claim. For example, a plaintiff who brings a
negligence claim for a botched back operation could not later in a different
suit bring a battery claim for the same the operation. Claim preclusion
precludes later asserting not just the “same claim” from the first suit, but
also every claim that, for policy reasons, is similar enough to a claim
brought in the first suit that it “should have been” pled in the first suit. And
it applies even if the plaintiff won in the first suit, and even if the later-
asserted claim wasn't filed in the first suit.
Issue preclusion is different. It does not address whether a claim is
barred. Instead, issue preclusion generally prevents a party who has actually
litigated an issue — a question of fact or law — from litigating that issue
again. So, for example, if a court holds in the medical malpractice case
against the doctor that his license had been obtained through forgery, the
doctor would not be able to relitigate whether his license had been forged
— and hope to persuade another jury or court to find that his license had
been properly granted. Notice that with issue preclusion, the issue has to
have been actually decided; with claim preclusion, a claim that was not
brought, but “should” have been, is barred.

A. Choice of Law
When issue or claim preclusion is adjudicated in federal court, the
question of whether the federal court applies federal or state law arises. If
the judgment was entered by a federal court which had federal question
subject matter jurisdiction, then federal law applies to determine its
preclusive effect; if subject matter jurisdiction was based on diversity, then
state law would apply. See Taylor v. Sturgell, 553 U.S. 880 (2008) (claim
preclusion). If the prior judgment was entered by a state court, then state
law would apply. See Semtek Int'l Inc. v. Lockheed Martin Corp., 531 U.S.
497 (2001).
What if a prior judgment adjudiated both state and federal claims but is
in federal court? Ordinarily, of course, a suit that contains both state and
federal claims, will be related to each other, and chances are choice of law
won't matter. Courts reason that federal law likely will control the
preclusive effect of a federal judgment with both state and federal claims.
18B Charles Alan Wright et al., Federal Practice and Procedure § 4472 (2d
ed. 2011) (“[I]f state questions are decided as an incident of federal-
question litigation, the clear right of federal courts to insist on their own
preclusion rules as to the federal questions may carry over to include all
questions in a uniform body of doctrine.”).
One interesting wrinkle is if the first suit was a federal suit dismissed
under Rule 41 If a federal court dismisses a case under Rule 41, whether
that dismissal is “on the merits” turns on state law, not Rule 41. For
example in Semtek, the federal court dismissed under Rule 41, but the
plaintiff refiled in state court. The court held that beause the dismissal
would not have been “on the merits” under state law, the dismissal was not
on the merits under federal law if the suit were filed in a state court or
different federal court. However, the Court stated that if “state law is
incompatible with federal interests,” then federal law might preclude later
assertion of the claim in federal court. Id. The gave as an example state law
that “did not accord claim-preclusive effect to dismissal for willful violation
of discovery orders . . . .” Id.

B. Claim Preclusion
1. Purpose of Claim Preclusion
Claim preclusion is to make lawsuits efficient and final. “To preclude
parties from contesting matters that they have had a full and fair
opportunity to litigate protects their adversaries from the expense and
vexation attending multiple lawsuits, conserves judicial resources, and
fosters reliance on judicial action by minimizing the possibility of
inconsistent decisions.” Montana v. U.S., 440 U.S. 147, 153–54 (1979). In
essence, claim preclusion bars later assertion of a claim that was asserted —
or one that efficiency dictates should and could have been asserted — in an
earlier suit. As a consequence, if a party had an opportunity to assert a
claim, it can be precluded from litigating that claim and related claims later
— even if it inadvertently failed to raise a related claim in the earlier suit.
Thus, while courts often portray claim preclusion as preventing asserting
the same claim twice, it does far more than that, since a later claim can be
barred even if it was never asserted in a suit — if it was related to one that
was raised.
The rules don't require plaintiffs assert related claims. Rule 20 authorizes
a plaintiff to bring every claim that it has against a defendant that arises out
of the same transaction or occurrence as another claim, but does not require
the plaintiff do so. The law of claim preclusion is what requires plaintiffs to
assert certain claims. Unlike Rule 20, claim preclusion forces a party who
has filed a claim or been sued to include in that suit all of the claims that it
has that are “close enough” to the dispute that it would be convenient and
efficient to litigate it in that suit. On the other hand, claim preclusion
doesn't force a party to file unrelated claims that it might have, since that
would expand the suit beyond one general dispute, and might increase
litigation by forcing parties to assert even unrelated claims that they
otherwise might not even want to bring.
What about counterclaims? Rule 13(a) does require defendants to file
“compulsory counterclaims,” which are speaking generally those claims
which are related to the plaintiff's claims against the defendant. So, not does
Rule 13 require defendants to bring such counterclaims, the law of claim
preclusion reinforces the Rule's requirements and, we will see, fills a couple
of gaps in Rule 13.

2. The Elements of Claim Preclusion

The elements of claim preclusion generally are:
A. Could the later-asserted claim have been brought in the first suit?
B. Is the later-asserted claim:
1. the “same” claim as a claim in the first suit (i.e., is it identical
or to on that was asserted, or related “enough?”);
2. a compulsory counterclaim to a claim in the first suit; or
3. a defense to a claim in the first suit that, if allowed to be raised,
could nullify rights established in the first suit?
C. Was the party who is bringing the later-asserted claim a party to the
first suit or in privity with someone who was a party to the first suit?
D. Did the first suit end with a final judgment “on the merits.”
Notice that there is no requirement that the later-asserted claim actually
have been asserted in the first suit. This is because claim preclusion forces
parties to assert claims that, for the sake of efficiency, should be brought.
Also, there is no requirement that the party later asserting the claim have
lost the earlier suit: claim preclusion applies whether the party later
asserting the claim won, or lost, the first suit. This section now explores
each element.
 a. Could the Later-Asserted Claim Have Been
Brought in the First Suit?
Claim preclusion bars a later-asserted claim only applies if it could have
been asserted in the first suit. As a simple example, a claim that arose after
the complaint had been filed in the first suit is not barred. So, if a plaintiff
sues a doctor for malpractice, and later the doctor punches the plaintiff, the
claim for battery arising out of the punch is not barred.
Another example of when a later-asserted claim could not have been
brought is when the first court was a state court, and the later-asserted claim
is one over which the federal courts have exclusive subject matter
jurisdiction. For example, in Gargallo v. Merrill Lunch, Pierce, Fenner &
Smith, 918 F.2d 658 (6th Cir. 1990), the first suit included a state law fraud
claim that ended in a final judgment. The same plaintiff later sued the same
defendant, but asserted a securities fraud claim over which federal courts
had exclusive subject matter jurisdiction. Because the law of the state of the
court that issued the judgment did not preclude the filing of claims that the
first court would have lacked subject matter jurisdiction to hear, the
Gargallo court held that claim preclusion did not apply since the state court
would have lacked subject matter jurisdiction over the later-asserted federal
securities law claim.
Casebooks often discuss Sopha v. Owens-Corning Fiberglas Corp., 601
N.W.2d 627 (Wis. 1999). In that case, in the first suit the plaintiff alleged
his lungs had been injured by long-term exposure to asbestos. While the
defendants motion for summary judgment based upon the statute of
limitations was pending, the plaintiff voluntarily dismissed the case but with
prejudice. Later, he died of more serious complications, and his surviving
spouse filed suit, claiming his death had also caused by asbestos exposure.
The defendants raised claim preclusion, asserting the later-asserted claim
was simply for other injuries caused by the same exposure raised earlier.
The court held for the plaintiff, reasoning that those who tried to bring an
action when the non-malignant injuries appeared would not be able to
recover for being “afraid” of getting the more malignant injuries, as they
would be speculative. Thus, the court held that because the claim for
damages from the malignant injury could not have been brought, claim
preclusion did not bar the later-asserted claim.
 b. Should the Later-Asserted Claim Have Been
Asserted
in the First Suit: is it the “Same Claim” as one in
the
Earlier Suit?
Claim preclusion has the goal of forcing parties to bring all the claims
that they have that arise out of the “same” claim as one being litigated. If a
later-asserted claim was related “enough” to one in an earlier suit, then for
efficiency's sake it should have been asserted. There are three things to
watch for: is the later-asserted claim so identical or at least related
“enough” that it should have been asserted in the first suit? Was the later-
asserted claim a compulsory counterclaim in the first suit? Or, rarely, is the
later-asserted claim something that was a defense to the first suit, and if it is
allowed to proceed as a claim later, it could nullify rights that were
established in the earlier suit?

i. Is the Later-Asserted Claim so Identical to or Closely

Related to one in the Earlier Suit that “Should Have Been”
Brought Earlier?
Sometimes it's clear whether a later-asserted claim is, or is not, close
“enough” to one in the first suit that it should have been raised then. If Bob
sues Susie over a car wreck, and later sues her over a bar fight, the claim
arising out of the bar fight isn't the “same claim” as the car wreck. On the
other end of the spectrum, if Bob had in the first suit sued Susie for
damages only to his car, but then filed a second suit seeking damages for a
broken pinky he had suffered in that wreck, that would be the same claim:
negligence from a car wreck, with just a different item of damage sought.
The trouble of course lies in the middle and is compounded by the fact
that courts, including federal courts, apply different definitions of what
constitutes close “enough,” ranging from very broad tests to very narrow.
The broader the definition of what's “close enough,” more claims that must
be brought in a suit, and so each suit will be more complicated; the
narrower the definition, fewer claims, must be brought, but that, of course,
means there may be more suits.
At the broadest end of the spectrum, probably a majority of courts hold a
later-asserted claim is must be asserted if it arose out of the same
transaction or series of transactions out of which the earlier claim arose.
E.g., Restatement (Second) of Judgments § 24. This test focuses on
pragmatic issues and generally operates to require that a claim be brought if
it would be convenient to try it in the same suit as another claim. Apotex,
Inc. v. Food & Drug Admin., 393 F.3d 210 (D.C. Cir. 2004); Porn v. Nat'l
Grange Mut. Ins. Co., 93 F.3d 31 (1st Cir. 1996); O'Brien v. City of
Syracuse, 429 N.E.2d 1158 (N.Y. 1981).
A smaller number of courts apply a narrower approach. Some courts
apply a “same cause of action” or “same evidence” test which focuses on
whether “the evidence necessary to sustain a second verdict would sustain
the first.” See, e.g., Redfern v. Sullivan, 444 N.E.2d 205, 208 (Ill. App.
1983); Snell v. Mayor and City Council of Havre de Grace, 837 F.2d 173
(4th Cir. 1988); Smith v. Kirkpatrick, 111 N.E.2d 209 (N.Y. 1953).
There are variations. Sometimes, courts saying that they are using the
narrower test in fact apply it as broadly as the “convenient trial unit”
approach of the majority. See Snell, 847 F.2d at 176–77 (explaining that
Maryland courts use the narrow-sounding test but apply it in a pragmatic
fashion). Beyond the two primary tests, other courts apply distinct ones,
such as California's “primary rights” definition of a “claim.” See Los
Angeles Branch NAACP v. Los Angeles Unified School Dist., 750 F.2d 731
(9th Cir. 1984) (en banc).
Most of the time, the answer to the question of whether a later-asserted
claim will be barred will the same under either test. Obviously, asserting
what is literally a claim twice is covered. Also, simply changing the legal
theory — asserting negligent misrepresentation in the sale of a car in the
first, and then fraud for selling the car in the second suit — does not make a
claim “different” under either test. Similarly, if the later-asserted claim
merely seeks different damages for the same wrong as the earlier claim, it is
barred under either suit. So, for example, a claim for damages to a car
would be the same as a later claim for personal injuries, if both arose out of
the same car wreck. it is easy to tell if a claim is close enough, and to do so
under either test. (The trick is to remember that even if the plaintiff won the
first suit, the later claim will be barred! That's why the importance of this
step may not be intuitive!)
But the result can depend on which test is applied. For example, in Frier
v. City of Vandalia, 770 F.2d 699 (7th Cir. 1985), the plaintiff in its first suit
brought replevin claims against the city government for allegedly
wrongfully towing his cars. Later, he filed suit claiming that the city had
violated his Due Process rights by not giving him a hearing before towing
the cars. The majority held that the claim for violation of Due Process was
the “same claim” as the claim to replevin his cars under the narrower “same
cause of action” test applied by Illinois courts; the dissent argued that the
claim for due process “requires an entirely different factual showing” and
so was not barred, and contended that the majority had improperly applied
the broader Restatement test to a claim covered by the narrower test.

ii. Was the Later-Asserted Claim a Compulsory

Counterclaim in the First Suit?
As noted above, Rule 13(a) requires parties to plead compulsory
counterclaims, and claim preclusion rests upon and reinforces that rule. See,
e.g., Publicis Communication v. True North Communications Inc., 132 F.3d
363, 365 (7th Cir. 1997) (“The definition of a compulsory counterclaim
mirrors the condition that triggers a defense of claim preclusion (res
judicata) if a claim was left out of a prior suit.”). If a later-asserted claim
“should have been” a compulsory counterclaim in prior litigation, then it is
barred.
First off, you have to look at what court system the first suit was in. If the
prior judgment was issued by a state court, then whether the later-asserted
claim was a compulsory counterclaim turns on state, not federal, law. See
Stone v. Dept. of Aviation, 453 F.3d 1271, 1280–81 (10th Cir. 2006)
(applying Colorado's rule on compulsory counterclaim because prior
judgment had been issued by a Colorado state court).
If the prior judgment was issued by a federal court, then the Federal
Rules of Civil Procedure would determine whether a later-asserted claim
was a compulsory counterclaim to the first suit. Remember two things
about Rule 13(a). First under Rule 13(a), certain counterclaims are not
compulsory even if they arise out of the same transaction or occurrence as
the plaintiff's claim:
those that it did not have at the time it served the pleading responding
to the claim;
those that were already pending in another suit at the time the suit was
commenced;
 those that require joinder of parties over whom the court cannot obtain
jurisdiction; or
those where jurisdiction was based on in rem.
See Chapter 16. Second, if a defendant did not file an answer, then Rule
13(a) does not apply: no counterclaim was required to be pled because there
was no pleading. Martino v. McDonald's Sys., Inc., 598 F.2d 1079 (7th Cir.
1979).
But, if a later-asserted claim was a compulsory counterclaim — under
state or federal law governing the underlying judgment — then its later
assertion is barred by claim preclusion. In addition, claim preclusion law
may go a bit further than state or federal law about compulsory
counterclaims. This is where claim preclusion fills some gaps.

iii. Could the Later-asserted Claim Have Been a Defense

to the First Suit That, if Successful, Would Nullify Rights
Established in the First Suit?
What if a defendant does not file an answer, and so the compulsory
counterclaim rule is not triggered? What if the facts form both a defense,
and a counterclaim?
The general rule is that if the defendant does not file an answer, or if facts
form the basis of both a defense and a counterclaim, that defendant is not
precluded from “relying on those facts in an action subsequently brought by
him against the plaintiff.” Martino v. McDonald's Sys., Inc., 598 F.2d 1079,
1084 (7th Cir. 1979). However, courts have used claim preclusion law to
create a narrow exception to that rule, barring a later-asserted claim if
allowing it would nullify rights established in an earlier lawsuit.
For example, in Martino, McDonald's sued a franchisee, alleging that the
franchisee had violated a restrictive covenant in the franchise agreement.
The parties entered into a consent judgment pursuant to which the
franchisee sold his franchise back to the franchisor. Later, the franchisee
sued McDonald's alleging that the enforcement of the restrictive covenant
in the franchise agreement violated antitrust laws. Id. at 1081. The district
court granted summary judgment in favor of McDonald's. The Seventh
Circuit affirmed and held that the antitrust claim was barred:
Both precedent and policy require that res judicata bar a counterclaim
when its prosecution would nullify rights established by the prior
 action. Judicial economy is not the only basis for the doctrine of res
judicata. Res judicata also preserves the integrity of judgments and
protects those who rely on them.
Id. at 1085. If the antitrust counterclaim had merit, then the franchise
agreement was illegal, and so it would have nullified the rights established
by the prior consent judgment in favor of McDonald's. Therefore, the court
held the later-asserted claim was barred even though it was not within the
scope of Rule 13(a). See Mendota Ins. Co. v. Hurst, 965 F. Supp. 1290
(W.D. Mo. 1997) (following Martino); A.B.C.G. Enterp., Inc. v. First Bank
Southeast, N.A., 515 N.W.2d 904 (Wis. 1994) (explaining Martino and
other cases).

c. If the Party Bringing the Later-Asserted Claim

was not
a Party to the First Suit, is it Nonetheless Bound
by the
Prior Judgment Because it is in “Privity” with a
Party
to the First Suit?
Typically, claim preclusion is raised when someone who was a party in
the first suit tries to avoid the judgment. A plaintiff lost, but then tries to sue
a different defendant. As a general rule, claim preclusion only applies
where the second suit is against someone who was a party to the first suit.
The general rule is subject to exceptions, but these exceptions cut against
the principle that Due Process requires that a person be given a full and fair
opportunity to litigate a claim (or defense to one).
Courts often state that if a person falls into one of the exceptions, then it
is “in privity” with a party to the earlier suit, and so bound by the judgment
in that case. The word “privity” has a somewhat unintuitive meaning in this
context, however. “Privity may exist for the purpose of determining one
legal question but not another depending on the circumstances and legal
doctrines at issue.” Chase Manhattan Bank v. Celotex Corp., 56 F.3d 343,
346 (2d Cir.1995). “Whether there is privity between a party against whom
claim preclusion is asserted and a party to prior litigation is a functional
inquiry in which the formalities of legal relationships provide clues but not
the solutions.” Id.
The Supreme Court recently summarized the narrow exceptions — when
“privity” exists — that exist to the rule that only a party is bound by a
judgment entered by a federal court when it has federal question subject
matter jurisdiction, and so federal law applies:

A person who agrees to be bound by the judgment entered in a suit between

others is bound by that agreement.
A person is bound by a prior judgment if there was a pre-existing
“substantive legal relationship” between the person asserting the later claim
and a party to the judgment in the first case. Those relationships include:
preceding and succeeding owners of property, bailee and bailor, and
assignee and assignor.
In “limited certain limited circumstances,” a party asserting a claim is
bound by an earlier judgment because she was “adequately represented” by
someone who was a party to the first suit. But this is generally limited to
when the prior suit was a class action, or a suit brought by a trustee,
guardian, or other fiduciary, and the later suit is by a member of the class or
someone whose interests the fiduciary was obligated to protect.
A party asserting a claim is bound by an earlier judgment if she “assumed
control” over the first case, and so effectively “already “had his day in
court” even though not a formal party.
A party is bound by a judgment may not avoid it by bringing a second suit
through a proxy that it controls, so for example a person who was not a
party to the first suit who brings the second suit as an agent for someone
who was a party to the first suit would be bound.
Finally, statutes may expressly bar successive litigation, but these include
things like bankruptcy and somewhat unusual claims.

Taylor v. Sturgell, 553 U.S. 880 (2008).

Some exceptions — some examples of “privity” — are easy to spot. If
Bob agrees to be bound by what a court decies in a suit between Juanita and
Julia, he's going to be bound by it. Likewise, for example, if property is
sold, the exception should be easy to spot. For example, suppose in the first
suit Bob obtained a judgment about the property lines between his property
and that of his neighbor, Susie. If Susie later sold her land to Jill, Jill would
be in privity with Susie. Whatever happened in the first suit would bind Jill.
Likewise, if Bob sold his land after the suit, that buyer would be bound as
well.
When a person has actual control of how a party to the first suit litigated
it, again it may be relatively easy to spot. But there must be actual control:
the Supreme Court has rejected holding a person bound by an earlier
judgment if the person had been “virtually represented” in the first suit.
Taylor, supra. The Court rejected analyzing whether the person's interests
were “close enough” to those of a party to the first suit, and to balance
competing equitable concerns, instead favoring the general rule that a
person is not bound by a prior judgment unless within the narrow categories
above.

d. Did the First Suit End with a Final Judgment

“On the Merits”?
Normally, whether the first suit ended with a final judgment on the merits
is fairly straightforward: if the court granted summary judgment or entered
judgment based upon a jury verdict, the judgment is “on the merits.” Once
the district court enters its judgment, it's final even if there may be appeals
or motions for costs and other items to be decided. See Coover v. Saucon
Valley Sch. Dist., 955 F. Supp. 392, 410 (E.D. Pa. 1997). But there are some
complexities.
First, in a case discussed in casebooks, Fed. Dept. Stores, Inc. v. Moitie,
452 U.S. 394 (1981), the court faced unusual facts which illuminate the
basic contours of claim preclusion. Seven lawsuits alleging antitrust
violations were filed against a department store. The suits were filed in, or
removed to, federal court. The district courts held that the plaintiffs did not
and could not allege a required element of the claim, and so dismissed all
seven suits with prejudice. Five plaintiffs appealed their cases, but two re-
filed their suits, which eventually were again dismissed by federal courts,
though this time on claim preclusion grounds. Those two plaintiffs appealed
the dismissals. While those two appeals were pending, the Supreme Court
issued a decision that changed the substantive law governing the claims,
and in light of the change each plaintiff could now allege a claim. As a
result, the appellate court reversed the judgment against the five plaintiffs
who had appealed, since the judgment had been based on an incorrect
understanding of antitrust law. It also reversed the judgments against the
two plaintiffs, even though they were based on claim preclusion. The
Supreme Court reversed. It held that a suit by the same plaintiff against the
same defendant over the same conduct was barred, and a “judgment merely
voidable because based upon an erroneous view of the law is not open to
collateral attack, but can be corrected only by [a direct appeal] . . . and not
by bringing another action upon the same” claim. Id.
Second, recall that a federal court judgment entered in a diversity case is
given the preclusive effect of state law. If a federal court dismisses a claim
under Rule 41(b), the Semtek Court has held that state law governs the
preclusive effect, unless federal interests override. When federal law
applies, dismissals are generally “on the merits” even though it was entered
as a sanction. Goel v. Heller, 667 F. Supp. 144 (D. N.J. 1987); see FRCP
41(b). State law generally is similar. See, e.g., Jaffe v. Accredited Surety &
Cas. Co., Inc., 294 F.3d 584 (4th Cir. 2002) (analyzing impact of
involuntary dismissals under Florida law).
Third, if a court dismisses a claim for failing to state a claim upon which
relief can be granted, the dismissal is “with prejudice” and “on the merits”
for the purpose of claim preclusion. Federated Dep't Stores v. Moitie, 452
U.S. 394, 399 n. 3 (1981).

C. Issue Preclusion
1. Purpose of Issue Preclusion
Issue preclusion, or “collateral estoppel,” is related but distinct from
claim preclusion. The doctrine “applies to prevent issues of ultimate fact
from being relitigated between the same parties in another lawsuit if that
issue has once been determined by a valid and final judgment. Vines v. Univ.
of La. at Monroe, 398 F.3d 700, 705 (5th Cir. 2005). Once a court decides
an issue, it is, for that party and those in privity with it, decided once and
for all — with narrow exceptions.
Suppose, for example, Susie sues Bob for breach of contract and a
judgment issues that could only have issued if there was a finding that there
had been no contract between them. If Susie again sued Bob — even on an
unrelated claim — Bob could use the prior judgment to preclude Susie from
attempting to prove that there was a contract between them. Bob could
estop Susie from contradicting the finding implicit in the first judgment.
 The doctrine of issue preclusion exists for two principal reasons. First, it
serves efficiency for both court and parties: it “has the dual purpose of
protecting litigants from the burden of re-litigating an identical issue with
the same party or his privy and of promoting judicial economy by
preventing needless litigation.” Parklane Hosiery Co. v. Shore, 439 U.S.
322, 326 (1979). Second, issue preclusion protects “the integrity of the prior
judgment by precluding the possibility of opposite results by two different
juries on the same set of facts . . .” Ill. Central R. Co. v. Parks, 390 N.E.2d
1078 (Ind. App. 1979). In other words, courts recognize that a jury in a
subsequent suit on precisely the same issue could reach the opposite
conclusion from a first jury. To protect the first jury verdict's integrity, a
second trial can be precluded when the elements of issue preclusion are
met. Think about that for a second. Issue preclusion prevents us from seeing
that juries do not find the truth; they just decide who won.

2. Elements of Issue Preclusion

The elements of issue preclusion have only been broadly stated by the
Supreme Court, which relies upon the Restatement, which “explains that
subject to certain well-known exceptions, the general rule is that ‘when an
issue of fact or law is actually litigated and determined by a valid and final
judgment, and the determination is essential to the judgment, the
determination is conclusive in a subsequent action between the parties,
whether on the same or a different claim.” B & B Hardware, Inc. v. Hargis
Indus., Inc., 135 S. Ct. 1293 (2015) (quoting Restatement (Second) of
Judgments § 27, p. 250 (1980)). Although the circuits vary slightly in how
they cast them, this requires that five questions must be analyzed to know
whether issue preclusion applies:
A. Was the same issue litigated and actually determined in the first
suit?
B. Was the issue essential to the judgment in the first case, such that
the judgment could not have issued without that issue having been
decided?
C. Was there a valid, final judgment on the merits in the first suit?
D. Can issue preclusion be applied against the party in the second suit?
E. Can the party in the second suit assert issue preclusion?
See Robinette v. Jones, 476 F.3d 585 (8th Cir. 2007); NAACP, Detroit
Branch v. Detroit Police Officers Assoc., 821 F .2d 328, 330 (6th Cir.1987).
 a. Was the Same Issue Litigated and Actually
Determined
in the First Suit?
Normally, this issue is fairly straightforward: if a party in the first suit
claims the plaintiff was negligent, and in the second suit claims that same
party was negligent, the issue is the same; if in the first case, the issue was
breach of contract and in the second it is fraud, the issue is not the same.
The conceptual problem with this issue concerns changes in the burden
of proof: for purposes of issue preclusion, the “issue decided” has to be cast
in terms of the burden of proof. The simple example involves a civil suit
followed by a criminal suit: suppose in a civil suit, a jury finds that a
defendant had caused the wrongful death of his ex-girlfriend. Because the
burden of proof in that case would have been preponderance of the
evidence, that jury's finding that the defendant had killed the ex-girlfriend
would not constitute the “same issue” in a subsequent criminal case for
murder against the man. Because of the difference of degree of proof
necessary, an issue of fact already adjudicated in a civil case is never “the
same issue” in a criminal case. See, e.g., U.S. v. Konovsky, 202 F.2d 721,
726–27 (7th Cir.1953). For purposes of claim preclusion, what was proven
in the first case was not that the man had killed the woman: it was that the
plaintiff had proven by a preponderance of the evidence that the man had
killed the woman. That is not the same issue as proof beyond a reasonable
doubt that the man had killed the woman. See also Ferrell v. Pierce, 785
F.2d 1372 (7th Cir. 1986) (prior judgment in civil action did not constitute
proof of “same issue” in later contempt proceeding, as it had a higher
burden of proof of clear and convincing evidence). So, for example,
acquittal in a prior criminal action does not bar a subsequent civil suit for
wrongful death on the basis that the “issue” of whether the man killed the
woman had been decided, as O.J. Simpson found out.
Notice, though, that if the burden of proof was higher in the case that led
to judgment, the “same issue” would be present. See Studio Art Theatre of
Evansville, Inc. v. City of Evansville, Ind., 76 F.3d 128 (7th Cir. 1996)
(applying Indiana law to prior state court judgment and holding prior
criminal conviction supported “same issue” element of issue preclusion).
Also, the Court has held that findings by an administrative agency in an
adjudicatory proceeding can be given preclusive effect: “courts may take it
as given that Congress has legislated with the expectation that the principle
[of issue preclusion] will apply except when a statutory purpose to the
contrary is evident.” B & B Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct.
1293 (2015).

b. Was the Issue Essential to the Judgment in the

First Case, Such That the Judgment Could Not
Have Issued Without That Issue Having Been
Decided?
In stark contrast to claim preclusion, which applies whether or not the
later-asserted claim was decided in the prior suit, issue preclusion only
arises if the issue was actually litigated in the prior suit. “As a general rule,
an issue is ‘actually litigated’ only when it is properly raised by the
pleadings, submitted for a determination, and actually determined.” Matter
of Gober, 100 F.3d 1195, 1203 (5th Cir. 1996); see Ill. Central R. Co. v.
Parks, 390 N.E.2d 1078 (Ind. App. 1979) (analyzing impact of prior jury
verdict closely to determine what issues were clearly “actually litigated).
Normally this is fairly straightforward: did the fact have to be decided for
the first judgment to be entered?
But it can be difficult to apply. For example, Rios v. Davis, 373 S.W.2d
386 (Tex. Civ. App. — Eastland 1963, writ ref'd), involved two suits arising
out of a single car wreck. Rios had been driving a truck owned by his
employer when it was involved in an accident with Davis. The employer
sued Davis to recover damages to the truck. Davis impleaded Rios,
contending that Rios had been contributorily negligent, and seeking money
damages for the damages to Davis' car. The jury in the first case found that
all three parties had been negligent but that Davis had proximately caused
the accident. The court entered judgment that Davis and the employer take
nothing. Then in the second suit, Rios sued Davis for personal injuries. The
appellate court reversed entry of judgment based upon issue preclusion,
holding that a finding that Davis had been negligent was not essential to the
judgment, since a judgment against Davis could have been entered based
upon Davis' own negligence in the accident, without having found that Rios
had been negligent. Therefore, the finding against Davis was not essential
to the judgment, particularly because Rios could not have appealed that
finding since no adverse judgment had been entered against him.
 Similarly, in Illinois Central Gulf Railroad v. Parks, 390 N.E.2d 1078
(Ind. App. 1979), a car carrying a husband and wife collided with a train. In
the first suit, both of them sued the railroad company, but she sought
damages for her injuries, while he only sought loss of consortium damages
(i.e., compensation for injuries caused to their marriage because of her
injuries, not compensation for his own personal injuries). The railroad
raised the issue of contributory negligence. The jury awarded her $30,000,
but awarded him nothing without specifying why. Later, he brought suit for
his injuries. The railroad argued that the award by the jury in the first case
of nothing to him meant that the jury had found him contributorily
negligent. The court disagreed, recognizing that the verdict could mean
either that they found him contributorily negligent or that there had been no
loss of consortium damages incurred. As a result, it could not be said that a
finding of contributory negligence was essential to the first judgment.
Often, this requires examining the claims and defenses in the first suit as
well as the jury instructions that were given. Herrera v. Reicher, 608
S.W.2d 539 (Mo. App. 1980) (analyzing jury instructions to determine if
issue had been actually decided in prior case). See also, Cunningham v.
Outten, 2001 WL 428687 (Del. Supr. 2001) (prior criminal judgment that
party had violated an “inattentive driving” statute did not preclude litigation
of “liability which consists of more than guilt or innocence”).
However, there are exceptions to the “actual litigation” requirement,
where a judgment will be given preclusive effect even though clearly the
issues were not actually litigated. First, as noted above, an order dismissing
a case “with prejudice” is “on the merits” for purposes of claim preclusion,
even if it was entered as a sanction, and so obviously was not in any
meaningful sense “on the merits.” When a state court strikes a pleading and
enters a judgment, whether a federal court will give that judgment
preclusive effect turns on state law. See Matter of Gober, 100 F.3d at 1204–
05 (analyzing how Texas courts treat various forms of default including
those entered after striking a pleading). Federal courts appear to hold that
under federal law the entry of a default judgment is not sufficient to satisfy
the “actually litigated” requirement unless the party substantially
participated prior to entry of the default. See In re Daily, 47 F.3d 365 (9th
Cir. 1995).
The problem can arise, however, where two separate independent
findings support the entry of judgment in the first case. Suppose, for
example, that a court dismisses both because it lacks personal and subject
matter jurisdiction. Are both preclusive, or neither? The federal courts split.
See Jean Alexander Cosmetics, Inc. v. L'Oreal USA, Inc., 458 F.3d 244 (3rd
Cir. 2006) (collecting cases and discussing split). In some circuits, both
issues will be deemed necessary to the outcome, while in others, neither
will. See also Aldrich v. New York, 494 N.Y.S. 2d 662 (N.Y. App. Div.
1985) (holding that one of two alternative grounds sufficed because record
showed the alternative was, in fact, fully litigated).

c. Was There a Valid, Final Judgment on the

Merits
in the First Suit?
Whether the prior judgment ended on the merits is usually fairly
straightforward: a judgment after a jury trial, or after summary judgment
has been granted, clearly is on the merits, for example. Any decision based
upon lack of personal jurisdiction, subject matter jurisdiction, venue,
improper service of process, or failure to join an indispensable party, on the
other hand, obviously are not.
Normally, of course, voluntary dismissal will be without prejudice. But
not always. In Robinette v. Jones, 476 F.3d 585 (8th Cir. 2007) the court
observed that in the context of claim preclusion “final” may require less
finality than claim preclusion. “Finality in the context of issue preclusion
may mean little more than the litigation of a particular issue has reached
such a stage that a court sees no really good reason for permitting it to be
litigated gain.” Id. at 590. In that case, the court held that a final judgment
had arisen even though the plaintiffs had voluntarily dismissed their
complaint in the prior action because they had done so after the defendant
had answered and while its motion for summary judgment was pending.
“On the merits” means different things when the prior judgment issued
from state court, however. For example, a dismissal of a claim as barred by
the statute of limitations is not uniformly viewed as “on the merits.” Thus,
the plaintiff in Semtek filed suit in California state court, and the defendants
removed the case to California federal district court based on diversity
subject matter jurisdiction. The court later dismissed the suit as barred by
California's two-year statute of limitations. 531 U.S. at 499. After that
dismissal, the plaintiff filed suit in Maryland state court, asserting the same
claims but arguing that Maryland law applied, and Maryland had a three-
year statute of limitations. The state court granted the defendant's motion
for summary judgment based upon claim preclusion. The appellate courts
affirmed the dismissal. The United States Supreme Court granted certiorari,
and concluded that “federal common law governs the claim-preclusive
effect of a dismissal by a federal court sitting in diversity.” Id. at 508. In
addition, the Court concluded that the federal court should adopt “the law
that would be applied by state courts in the State in which the federal
diversity court sits.” Id. Consequently, the Supreme Court concluded that
the Maryland appellate courts erred in holding that the dismissal in
California necessarily precluded the subsequent action in Maryland: under
California law a dismissal of an action on statute-of-limitations grounds by
a California state court would not be claim preclusive. Id. at 509.

d. Can Issue Preclusion be Applied Against the

Party
in the Second Suit?
Issue preclusion can be applied against a person who was a party in the
first suit or who is in privity with a party who was. The same principles
above concerning claim preclusion apply.

e. Can the Party in the Second Suit Assert Issue

Preclusion?
Issue preclusion can be used offensively or defensively. “[O]ffensive use
. . . occurs when the plaintiff seeks to foreclose the defendant from
litigating an issue the defendant has previously litigated unsuccessfully in
an action with another party.” Parklane Hosiery Co. v. Shore, 439 U.S. 322,
326 n. 4 (1979). However, they are not available on equal terms.
Until fairly recently, they were, because issue preclusion required
“mutuality.” If the plaintiff could not use issue preclusion against the
defendant, the defendant could not use it against the plaintiff. Why it was
that a party who had had a full opportunity to litigate an issue, but lost,
could not be precluded from re-litigating it simply because the party
asserting issue preclusion was not bound by that determination because it
had not been a party was never quite clear. See Berhard v. Bank of Am., 122
P.2d 892 (Cal. 1942) (“No satisfactory rationalization has been advanced
for the requirement of mutuality.”).
 Now, federal courts permit non-mutual issue preclusion, but if the party
asserting issue preclusion is using it offensively — against a party that lost
a case — the federal courts have discretion to deny its use. On the other
hand, defensive use — if a party loses an issue but then sues another
defendant — is permitted as of right if the elements are otherwise satisfied.
The reason for unfettered non-mutual defensive use of issue preclusion
was made clear in Blonder-Tongue Labs., Inc. v. Univ. of Ill., 402 U.S. 313
(1971). In that case, a patent owner sued a defendant, but the patent was
found to be invalid. The plaintiff then sued a second defendant for
infringing that same patent. The second defendant argued that the issue of
invalidity of the patent had been decided in the first case, and the plaintiff
should as a result be estopped from contending that its patent was valid.
The Supreme Court agreed even though, had the plaintiff won the first suit,
it obviously could not have used the finding that the patent was valid
against the second defendant. (Due process requires that, unless a person
was a party to or in privity with a party to a suit, that it get at least one
chance to litigate an issue.) The court recognized that any time a defendant
“is forced to present a complete defense on the merits to a claim which the
plaintiff has fully litigated and lost in a prior action, there is an arguable
misallocation of resources.”
The reason for limiting offensive non-mutual use of issue preclusion was
stated in Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979). In that case, a
plaintiff filed a private securities fraud action against the defendant. While
that suit was pending, the SEC brought a serious securities action in federal
district court against a company for misstatements in those same corporate
filings. The SEC proceeding resulted in judgment against the company. The
plaintiffs in the private suit then moved for partial summary judgment,
arguing that the judgment against the company in the SEC action precluded
the company from re-litigating issues found against it. Thus, the private
plaintiffs were using the SEC judgment offensively — against the party that
had lost the prior case — and it was non-mutual because, again, obviously
they could not be bound by a judgment in a case that they were neither
parties to, nor in privity with a party to.
The Court held that district courts would have discretion to permit
offensive use of issue preclusion. It held that it should not be available as a
matter of right, unlike defensive issue preclusion, for several reasons. First,
offensive use could increase the amount of litigation: a party who was
aware of a lawsuit on the same issue could avoid joining that suit, and if the
plaintiff in that case won, it could then file suit and use offensive issue
preclusion, but if the plaintiff lost, there would be no impact on it — it
could freely litigate the issue. Thus, allowing unfettered offensive issue
preclusion would result in more, not less, social cost. Second, it could cause
over-litigation in the first suit: suppose a defendant is sued for a small
amount of money. If offensive issue preclusion is always available, it would
have to “over litigate” the case to avoid having a judgment entered that
someone else, in a more serious case, might be able to use against it.
Likewise, if the first suit was in a forum where full discovery was not
permitted, or other limitations on presenting evidence existed, it would be
unfair. As a result, the court held that discretion, not right, guided the
availability of non-mutual offensive issue preclusion.
Inconsistent prior judgments are a rare basis for denying non-mutual
offensive use, but one mentioned by Parklane and involved in other suits.
For example, in State Farm Fire & Cas. Co. v. Century Home Components,
550 P.2d 1185 (Or. 1976), a series of lawsuits were filed by plaintiffs whose
property was damaged during a fire. Sometimes the plaintiff won, but
sometimes it did not. The court adopted the “rule” from the few cases that
dealt with actual inconsistent verdicts and held that “where outstanding
determinations are actually inconsistent on the matter sought to be
precluded, it would be patently unfair to estop a party by the judgment it
lost.” Id.

D. Procedure for Litigating Claim

Preclusion
1. Claim Preclusion is “Res Judicata” and So Must
be Pled as an Affirmative
“Res judicata” — which includes both claim and issue preclusion — is
an affirmative defense under Rule 8(c). Under that Rule, in “a pleading to a
preceding pleading,” a party must affirmatively plead certain defenses,
including claim and issue preclusion. Thus, a party who fails to plead the
defense waives it. Scherer v. Equitable Life Assurance Soc'y, 347 F.3d 394,
398 (2d Cir. 2003) (“The preclusion doctrines . . . are waiveable affirmative
defenses”).
A federal court may on its own motion raise claim (or issue) preclusion.
Plaut v. Spendthrift Farm, Inc., 514 U.S. 211 (1995). So, for example, “if a
court is on notice that it has previously decided the issue presented, the
court may dismiss the action sua sponte, even though the defense has not
been raised. This result is fully consistent with the policies underlying res
judicata: it is not based solely on the defendant's interest in avoiding the
burdens of twice defending a suit, but is also based on the avoidance of
unnecessary judicial waste.” U.S. v. Sioux Nation, 448 U.S. 371, 432 (1980)
(Rehnquist, J., dissenting) (citations omitted). See, e.g., Transclean Corp. v.
Jiffy Lube Int'l., Inc., 474 F.3d 1298 (Fed. Cir. 2007) (affirming district
court's dismissal raising issue preclusion sua sponte).

2. Ordinarily Claim Preclusion can be Resolved by

Moving for Summary Judgment
Typically, a party who believes that a claim against it is barred by claim
preclusion raises the issue through summary judgment, providing a copy of
the prior judgment and any other papers necessary to prove the elements of
the affirmative defense to the court.

E. Procedure for Litigating Issue

Preclusion
1. Pleading Requirements
a. Because Issue Preclusion is “Res Judicata” it
must be Pled as an Affirmative Defense Under
Rule 8(c)
As noted above, “res judicata” is an affirmative defense. Generally,
failure to plead issue preclusion waives it, unless the court raises it sua
sponte in rare instances.

b. Offensive Use: Must Plaintiff Plead Issue

Preclusion?
Offensive use of issue preclusion by a plaintiff creates a problem: does
the plaintiff have to plead offensive use? The defendant would have to,
since it is an affirmative defense, but is the plaintiff required to be plead it?
So far the courts have generally held that the Rules do not require that issue
preclusion be pled in the complaint. Harvey by Blankenbaker v. United
Transp. Union, 878 F.2d 1235 (10th Cir. 1989).

2. Litigating Issue Preclusion by Moving for

Summary Judgment
Because proof of the prior adjudication is an element of issue preclusion,
as with claim preclusion, the party relying on it must prove the prior
adjudication occurred. Where facts are not disputed, it is typically done
through a summary judgment.

F. Special Issues
1. Co-Pending Suits with Same Claims
Where two suits with the same claims are pending at the same time, a
defendant must also act. Even though a motion for summary judgment
based upon claim or issue preclusion cannot be filed until the first suit goes
to judgment, a motion to dismiss based on improper claim-splitting —
filing the “same claim” in two separate suits — “need not-indeed, often
cannot-wait until the first suit reaches final judgment.” Hartsel Springs
Ranch of Co., Inc. v. Bluegreen Corp., 296 F.3d 982 (10th Cir. 2002)
(recognizing that, if two suits based on the same claim are pending, but the
defendant waits to file a motion to dismiss until “after judgment enters on
one of the two,” then “the motion should be denied”); Bockweg v.
Anderson, 428 S.E.2d 157, 164 n. 2 (N.C. 1993) (“While it is clear that
defendants could not raise their res judicata defense until and unless the
[prior] court action resulted in a final judgment, defendants could have
moved to dismiss on the grounds of a prior action pending involving the
same claim.”); Lake v. Jones, 598 A.2d 858, 861–62 (Md. 1991)
(“[Defendant] may not lie in wait silently until one of the two actions is
brought to judgment to ambush the plaintiff and defeat the other action.”).
Thus, even if there is no judgment, the defendant faced with claim-
splitting can move the court in the second suit to hold that it is precluded
pursuant to claim preclusion. E.g., Klipsch, Inc. v. WWR Tech., Inc., 127
F.3d 729, 734–35 (8th Cir.1997) (district court erred in granting summary
judgment in favor of defendant on res judicata defense because defendant
had acquiesced in the splitting of plaintiff's claims); Clements v. Airport
Auth. of Washoe County, 69 F.3d 321, 328 (9th Cir.1995) (defendant waived
res judicata defense by acquiescing in the splitting of plaintiff's claims);
Calderon Rosado v. General Elec. Circuit Breakers, Inc., 805 F.2d 1085,
1087 (1st Cir.1986) (refusing to apply claim preclusion because defendant
acquiesced to splitting of claim when he failed to object or complain while
the two actions were pending).

Checkpoints

Can you explain the purposes of claim and issue preclusion?

Can you articulate each element of claim preclusion? Issue preclusion?
Can you explain the impact of concluding that a claim or issue is precluded?
Do you understand the difference between offensive and defensive issue preclusion?
Can you explain the procedure for raising claim or issue preclusion?
 Part C

Special Procedures for Resolving

Similar
Claims among Many Parties
Chapter 61

A Brief Introduction
to Mass and Class Actions
Especially in the last few decades, courts have been forced to resolve
claims of enormous numbers of plaintiffs that arise out of a single set of
facts. For example, the rise of mass manufacturing techniques and
distribution channels have enabled a single model of a product to be sold to
thousands, if not millions, of consumers, each of whom may then have a
claim if the product causes injuries or is otherwise defective. Recent class
actions suits involving allegedly defective drugs have gained national
headlines, and other class action suits have been litigated for years in the
federal courts.
The Rules generally permit each plaintiff to file its own suit. A defendant
facing multiple suits over the same basic set of facts will rarely be able to
force joinder of one of those plaintiffs into a suit by another because Rule
19 requires joinder only rarely, and t would never require joinder of two
plaintiffs who assert, for example, personal injuries caused to each when
each bought a defective product. While having two separate lawsuits over
the same product may not be socially intolerable, where there are hundreds
or thousands of plaintiffs, the courts, the parties (or at least the defendant),
and society may want more efficient resolution of the claims.
Two procedures exist to help resolve multiple parties' claims more
efficiently than individual suits might: (1) class action lawsuits and (2) use
of multi-district litigation, or “MDL.”
Boiled down, a class action allows for enormous numbers of plaintiffs
(and in some cases, defendants) to be joined in one lawsuit where efficiency
would be served by doing so. In recent years, class actions have become
regulated by statute, and in some ways restricted and reduced in utility and
scope.
 If a series of disputes does not qualify as a class action, it may
nonetheless be subject to special management procedures as “multi-district
litigation.” Suppose, for example, there are a dozen or two suits filed
around the United States over the same issue, against the same defendants,
but each with its own plaintiff, but the cases cannot be brought as a class
action. It may make sense to combine the cases for some purposes,
particularly discovery, so that different judges do not have to repeatedly
address and resolve the same issues among the various parties. The tools to
manage multi-district litigation can be used when the dispute is “more” than
a typical lawsuit, but “less” than is required to create a class action suit.
In recent years, class actions have become subject to federal statutes, and
particularly the Class Action Fairness Act (“CAFA”), and their prominence
is probably waning. Some firms specialize in bringing or defending class
suits, but most lawyers will have no involvement in class action, or mass
action, suits during their careers. This chapter, as a result, simply provides
the basics.

A. Class Actions
1. Overview of Class Actions
The rules impose two broad requirements on whether a class is proper.
First, Rule 23 creates four requirements class actions only if: (1) the class is
so numerous that joinder of all members is impracticable, (2) there are
questions of law or fact common to the class, (3) the claims or defenses of
the representative parties are typical of the claims or defenses of the class,
and (4) the representative parties will fairly and adequately protect the
interests of the class. FRCP 23(a).
Second, Rule 23(b) requires that one of the following three be present:
(1) the prosecution of separate actions by or against individual
members of the class would create a risk of
(A) inconsistent or varying adjudications with respect to individual
class members which would establish incompatible standards of
conduct for the party opposing the class, or
(B) adjudications with respect to individual class members which
would, as a practical matter, be dispositive of the interests of the other
members not parties to the individual adjudications or substantially
 impair or impede their ability to protect their interests; or
(2) the party opposing the class has acted or refused to act on grounds
that apply generally to the class, so that final injunctive relief or
corresponding declaratory relief respecting the class as a whole; or
(3) the court finds that the questions of law or fact common to the class
members predominate over any questions affecting only individual
members, and that a class action is superior to other available methods
for the fairly and efficiently adjudicating of the controversy. The
matters pertinent to the findings include: (A) the class members'
interests in individually controlling the prosecution or defense of
separate actions; (B) the extent and nature of any litigation concerning
the controversy already begun by or against members of the class; (C)
the desirability or undesirability of concentrating the litigation of the
claims in the particular forum; (D) the likely difficulties in managing a
class action.
FRCP 23(b).
If a plaintiff files a suit seeking to represent a class, then it must “at an
early practicable time” have the court decide whether to certify the action as
a class action. FRCP 23(c)(1)(A). In addition to examining whether the two
conditions for certification noted above are present the court must also
certify counsel to represent the class. FRCP 23(g). The class action
plaintiff's lawyer will be responsible for adjudicating the rights of large
numbers of plaintiffs with whom she will likely not have the normal direct
form of attorney-client relations. As a result, certification of counsel is a
means by which courts protect the class.
If the court issues a certification order, it must identify the class, appoint
class counsel, and provide various notices to class members. FRCP 23(c).
During litigation, the court has power to make various rulings to streamline
proceedings. FRCP 23(d). Cases may not be dismissed or settled except by
approval of the court and notice to class members. FRCP 23(e).

2. Impact of CAFA
In 2005, CAFA and amendments to Rule 23 almost completely replaced
the law governing class actions. Together, they have radically increased the
ability of federal courts to hear class actions involving state claims. CAFA
adopted the constitutional “minimal diversity” for interstate class actions.
Congress amended the diversity jurisdiction statute (28 U.S.C. § 1332) by
allowing diversity jurisdiction if any one class member is diverse from any
one defendant. Although CAFA still has an “amount in controversy”
requirement of $5 million, the amount of each class member's claim may be
aggregated for purposes of satisfying that amount in controversy
requirement. Id. The statute made numerous changes to existing class action
law and will likely be the subject of an advanced litigation course, not your
basic civil procedure class. See, e.g., Blockbuster, Inc. v. Galeno, 2006 WL
3775326 (2d Cir. 2006) (discussing CAFA's impact on removability of class
actions); Miedema v. Maytag Corp., 450 F.3d 1322 (11th Cir. 2006) (same).

B. Multi-District Consolidation: 28
U.S.C. § 1407
Suppose there are a significant number of suits filed all across the
country, each by a separate plaintiff but against a common defendant and
arising out of the same basic facts. Suppose, for example, a drug maker
sells an allegedly defective drug that harms thousands of consumers across
the country, resulting in dozens, hundreds, or even thousands of lawsuits.
See, e.g., In re Zyprexa Prods. Liability Litig., 2006 WL 3495667 (E.D.N.Y.
Dec. 5, 2006).
If there is no class formed or it is for some reason a class is unavailable,
federal courts have the power to consolidate these suits through 28 U.S.C. §
1407. That statute allows civil actions that involve at least one common
question of law in fact that are pending in different district to be
“transferred to any district for coordinated or consolidated pretrial
proceedings.” A special “MDL panel” then handles the cases through pre-
trial procedures “for the convenience of parties and witnesses” and to
“promote the just and efficient conduct of such actions.” Id. Once pretrial
proceedings are finished — in other words, when the cases are ready to be
tried, each action is transferred back to the district where it came from for
trial. Id.
 Mastering Civil Procedure
Master Checklist
For cases originally filed in federal court, is there an anchor claim —
which is a claim over which the court has personal jurisdiction, venue,
and subject matter jurisdiction because of diversity or federal question
jurisdiction? If not, then the defendant should move to dismiss the case.

Subject matter jurisdiction over the anchor claim:

Does the claim “arise under” federal law?
• Is there a “substantial federal question” raised by a state
law claim that does not satisfy diversity requirements?
Is there complete diversity between the parties and does the
amount in controversy, exclusive of costs and interest, exceed
$75,000? If there is more than one claim, can the amounts be
aggregated to reach $75,000?
Personal jurisdiction over the anchor claim:
Did the defendant consent, either contractually or by operation
of law such as through incorporation, registration, or operation of
a motor vehicle?
Has the party voluntarily appeared, waived, or consented to
personal jurisdiction either pre- or post-suit?
Is jurisdiction in rem sufficient?
If a federal long-arm statute applies to the claim, or if a state long-
arm statute applies to the claim, are its requirements met?
If only a state long-arm statute applies, if the requirements of the
state long-arm statute is met, does assertion of personal jurisdiction
over the claim comport with Due Process requirements?
Is there general jurisdiction over the defendant because (a) the
defendant is a natural person and is domiciled in the state or (b)
the defendant is a corporation and it is incorporated in the state,
the state is its principal place of business, or there are
“exceptional circumstances”?
 Is there specific jurisdiction over the claim because the
defendant has minimum contacts with the forum and assertion of
personal jurisdiction would not offend traditional notions of fair
play and substantial justice?
Venue over the anchor claim:
Is venue over the claim proper under a specific statute?
Is venue over the claim proper under the general federal venue
statute, in that either it is filed (a) in a judicial district where any
defendant resides and all the defendants reside in that state; (b) it
is filed in a district in which a substantial part of the events or
omissions occurred; or (c) it is in a district where any defendant
can be found if venue is not proper elsewhere?
If defendant is seeking to remove to federal court a case pending in
state court:
Did the removing parties file to remove within 30 days of receipt of
the pleading or other paper showing the case was removable?
For diversity-type removal, in addition ask:
Is there complete diversity over one claim? If not, is the non-
diverse defendant fraudulently joined?
Is there a forum defendant? If so, has it been fraudulently
joined?
Is the amount in controversy established?
Did the defendants comply with the one-year deadline? If not, is
there an equitable exception to the one-year deadline?
Has the right to seek removal been waived by conduct?
Did all properly joined defendants join in the removal? If not, were
they fraudulently joined?
Is the case subject to remand by the plaintiff?
Is any state law claim “separate and independent” and so subject
to remand?
For each additional claim:
Is there authority in Rules 13, 14, 18, 19, 20, 21, 22, 23, or 24 to join
the claim? Does a federal statute, such as those governing intervention
or interpleader authorize joinder?
Is there personal jurisdiction or pendent personal jurisdiction over
the claim, or has an objection to personal jurisdiction been waived or
 provided by consent?
Is there original subject matter jurisdiction or supplemental
jurisdiction over the claim?
Is there venue, pendent venue, or is venue over the claim
unnecessary because of consent or other reasons?
Complaints
Does the complaint allege facts showing subject matter and personal
jurisdiction?
Does the complaint allege factual material that, if true, states a claim
upon which relief can be granted?
Are allegations of fraud or mistake pled with particularity as
required by Rule 9(b)?
Are damages prayed for, and special damages specifically pled?
Is it signed in accordance with Rule 11?
Defendant's Choices Upon Receipt of a Complaint:
Make a pre-answer motion.
Is a pre-answer motion required because the complaint contains
scandalous material or is indefinite?
Is a pre-answer motion permitted because subject matter
jurisdiction, personal jurisdiction, or venue are lacking, or the
complaint fails to state a claim upon which relief can be granted,
was improperly served, or fails to join an indispensable party?
If a pre-answer motion is permitted or required, all available
defenses except lack of subject matter jurisdiction, failure to join
an indispensable party, and failure to state a claim must be
consolidated or they are waived.
File and serve an Answer.
Which averments must the defendant deny? Admit? Plead
insufficient information?
Which affirmative defenses must be pled?
Which “compulsory counterclaims” must be pled?
Do nothing.
This generally allows the plaintiff to obtain a default judgment.
Defendant must file and serve any answer or motion in the time
allowed, and sign in accordance with Rule 11.
Even if Venue is Proper, is There a More Convenient Venue, or or is
Forum Non Available?
Even if a claim is properly filed a court, if the convenience of parties
and witnesses indicates another forum is clearly more convenient, is
there basis for any party to move to transfer venue under 28 U.S.C.
1404(a)?
Is there a forum selection clause which supports transfer of venue?
Does forum non conveniens necessitate dismissal?
Amendments to Pleadings.
If the amendment adds a claim (or a party), and if limitations has run
on that claim, then the amendment would be futile if the claim does
not “relate back” under Rule 15(c).
If no scheduling order is in effect:
A party may amend its pleading as a matter of right for 21 days
after serving it even if the opposing party serves a responsive
pleading or a motion under Rule 12(b),(e), or (f).
A party may amend its pleading with consent of the opposing
parties;
A party may even without the right or consent of the opposing
party amend its pleading upon motion, which shall be freely
given.
If a scheduling order is in effect and the deadline has passed, then
the party must show good cause to modify the scheduling order and
also move to amend the pleading.
If a final pretrial order is in effect and the deadline has passed, then
the party must show “manifest injustice” will result.
Rule 26(f) Conference, Initial Disclosures, Scheduling Conference, and
Discovery
Each party must confer more than 21 days before the scheduling
conference date set by the judge and, within 14 days after conferring,
disclose to each other party certain information under Rule 26(a)(1)
that it may use to support a claim or defense.
The court must issue a Rule 16 scheduling order, which sets
deadlines that will control the case.
The parties may serve requests for production before the conference,
but if so they are deemed served on the date of the conference, and
other discovery can begin only after the discovery conference under
Rule 26(f) has occurred:
 Up to 25 interrogatories may be served, but only on parties.
Requests for admissions may be served only on parties, and may
be limited in number by local rule.
Document requests may be served on parties and, by way of
subpoena, on non-parties.
Up to 10 depositions per side may be taken of parties and, by
way of subpoena, of non-parties.
Other forms of discovery such as physical examination and
deposition on written questions are available.
All discovery is limited, absent court order, to that which is
relevant to a claim or defense in the lawsuit and which is
proportional to the case.
Expert witnesses must be identified and, for testifying experts,
reports must be prepared before the expert may be deposed, and
for hybrid experts, a summary must be prepared.
Facts known and opinions held by consulting experts are
generally not discoverable.
Which Law Applies to the Merits?
Federal Claims: Federal substantive and procedural law applies.
State Claims: Federal procedural law, but state substantive law,
applies.
Which state's law applies turns on which state has the most
significant contacts with the facts giving rise to the claim.
Whether state law is characterized as “substantive” — and so
controls over a contrary federal procedural rule — turns on the
Erie doctrine.
Adjudication Prior to Trial
Default judgment can be taken if the defending party fails to answer
or otherwise appear.
A party asserting the claim can voluntarily dismiss under Rule 41.
A party defending a claim can move to dismiss for failure to state a
claim upon which relief can be granted or for judgment on the
pleadings under Rule 12.
A party may seek summary judgment on a claim or defense asserted
by or against it.
If the party moving for summary judgment does not have the
 burden of proof on the issue at trial, then it need only show that
there is no genuine issue of disputed fact and the summary
judgment evidence shows there is insufficient evidence for a
reasonable jury to find for the non-movant on one or more
elements of the claim or defense.
If the party moving for summary judgment has the burden of
proof on the issue at trial, then it must show there is no genuine
issue of disputed fact and the summary judgment evidence is so
compelling that no reasonable jury could find for the non-movant.
Adjudication by Trial
The parties must submit the final pretrial order including exhibits,
witnesses, and other information required by Rule 26(a)(3).
Whether the court, or jury, will decide a claim turns on whether
there is a right to trial by jury and whether a party properly invoked
that right under Rule 38.
Once the party with the burden of proof on an issue has had an
opportunity to be fully heard, then the opposing party may move for
judgment as a matter of law under Rule 50.
Post-trial
After verdict, an aggrieved party must promptly poll the jury or
argue that the jury's verdict is inconsistent.
After verdict, the clerk or court must enter judgment on a separate
document.
Post-trial motions for new trial and for judgment as a matter of law
must be made within 28 days of entry of the judgment.
A post-judgment Rule 50(b) motion can be granted only to the
extent the issues it raises were raised prior to submission of the
case to the jury.
New trial motions under Rule 59 may be based upon either
errors at trial or the fact that the verdict was against the great
weight of the evidence.
The judgment winner can “execute” on the judgment unless
execution is stayed pending appeal.
Absent an exception to the final judgment rule, only after judgment
is entered can anyone appeal.
The exceptions to the final judgment rule are narrow and
include the collateral order doctrine, orders affecting certain types
 of injunctive relief, certified appeals, and appeals under Rule
54(b).
Collateral attacks by way of Rule 60(b) are extremely limited in
order to avoid the final judgment rule.
 Index
Abstention Doctrines, 293
Chart of, 286
Colorado River, 296
Pullman, 297
Rooker-Feldman, 293
Younger, 294–295
Additur, see New Trials.
Affirmative defense, 336–340
Alternative and Inconsistent, 339
Defined, 336
Detail Required, 339
Example, 340
Impact on amount in controversy, 48
Presentation at trial, 50
Raising by way of Rule 12(b)(6), 317
Res judicata, 179, 181, 321, 337, 400, 571, 577–578, 589–591
Amendment of pleadings, 365
As of Right, 366
Burden on party opposing amendment, 366–367
By agreement, 366
By motion, 366
Compared to amendment of scheduling order, 389
Factors to deny, 366–367
Procedure for, 366
Relation back doctrine, 370
Changing legal theory, 371–372
Changing party, 373–375
Statute authorizes, 371
Scheduling order, impact of, 388
Scope of response to amended pleading, 369
Amendment of scheduling order, see Scheduling Order.
Amount in controversy, see Subject Matter Jurisdiction.
Ancillary jurisdiction, see Supplemental Jurisdiction.
Answer,
Affirmative defenses, 336–340
Answer as one option to complaint, 279
Detail required, 339
Example, 336
Inconsistency, 339
Joinder of claims and parties, 340
Jury demand, 341
Requirements for, 335–341
Responding to allegations of complaint, 336
Appeals,
Adverse decision requirement 542
Certification for under section 1292(b), 552
Chart of exceptions to, 545
Collateral order doctrine, 550
Final Judgment Rule, 543
Grant or denial of injunctive relief, 552
Mandamus, 557
Rule 54(b) and multiple claims or parties, 545
Plain error, 542–543, 561
Rehearing en banc, 562
Standards of review, 560
Arbitration clauses, 330
Attorney-client privilege, 430
Defined, 432
Privilege log, 444
Attorney work product, 434
Defined, 434–438
Privilege log, 444
Burden of production on summary judgment, see Summary Judgment.
Cause of action, see Claim.
Choice of law, 403
Erie Doctrine, 408
Horizontal, 415
Vertical, 408
Claim, defined, 5
Claim preclusion, 573
Elements of, 574
Procedure for litigating, 589
Purpose, 571
Class actions, 595–597
Closing argument, 51
Collateral attack on judgment, 565
Collateral estoppel, see Issue preclusion.
Colorado River Abstention, see Abstention Doctrines.
Complaint, 147
Civil cover sheet, 162
Corporate disclosure form, 162
Demand or Prayer for Relief, 158
Example, 177
Impact of Iqbal and Twombly, 152
Inconsistency allowed
Request for waiver of service of process, 260
Rule 9(b), 157
Service of process, 258
Short and Plain Statement of claim, 152
Summons, 25i
Consolidation,
Of multi-district proceedings, 598
Of Rule 12 motions, 325
Constitutional Limitations on Subject Matter Jurisdiction, see Abstention
Doctrines.
Counterclaims,
Chart to determine whether counterclaim is compulsory, 183
Compulsory counterclaim, 180
Joinder of additional party to, 200
Personal jurisdiction waived as to, 236
Venue not required as to, 242
Supplemental subject matter jurisdiction over, 248
Permissive counterclaim, 249–250
Joinder of additional party to, 190
Supplemental subject matter jurisdiction over, 249
 Res judicata, 577
Cross-claim, 207
Joinder of party to, 208
Default judgment, 391
Appearance, 396
Entry of default, 393
Setting aside, 394
Entry of default judgment
Vacating, 396
Sum certain, 395
Depositions, see Discovery.
Directed verdict, see Judgment as a Matter of Law.
Discovery, 421
Depositions, 453
Of corporate party under Rule 30(b)(6), 455
Of natural party by notice, 453
Of non-party by subpoena 453
Oral, 453
On written questions, 458
Discovery conference, 424
Discovery disputes, 475
Experts, 463
Consulting or non-testifying experts, 470
Hybrid type, 465
Reports,
Contents required, 467
Who must prepare, 466
Supplementation, 468
Initial disclosures, see Required Initial Disclosures.
Interrogatories, 448
Motions to compel, 477
Motions for protective orders, 479
Physical and mental examinations, 459
Privilege protected, 433
Proportionality, 428
Relevance, 428
Request for production of documents, 444
 Privilege log requirement, 444
Subpoena duces tecum for non-parties, 447
Requests for admission, 450
Requests to inspect land and locations, 447
Rule 26(f) conference, 424
Sanctions, 475
Scope of, see Relevance.
Work product information protected, 433
Diversity, see Subject Matter Jurisdiction.
Erie doctrine, see Choice of Law.
Expert witnesses, see Discovery.
Execution of judgment, 537
Federal Question, see Subject Matter Jurisdiction.
Final judgment, see Judgment.
Final judgment rule, see Appeals.
Final pretrial order, 499
Modifying, 501.
Forum non conveniens, 359, 361, 363
Domestic application of, 362
Forum selection clauses, 360
Impact on venue, 360
Impleader, 202
Procedure for, 204
In rem jurisdiction, 93
Indispensable parties, 190
Initial Disclosures, see Required Initial Disclosures.
Interlocutory appeal, see Appellate review.
Interpleader, 211
Interrogatories, see Discovery.
Intervention, 215
Involuntary dismissal, 399
Issue preclusion, 581
Choice of law, 572
Elements, 582
Procedure for litigating, 589
Purpose, 581
JMOL, see Judgment as a Matter of Law.
JNOV, see Judgment as a Matter of Law.
Joinder of claims, 172
By defendant against plaintiff, see Counterclaims.
By plaintiff against a defendant, 175
By plaintiff or defendant against a co-party, see Cross-claim.
Chart summarizing, 172
Consolidation, see Consolidation.
Misjoinder, 209
Separate trials, 209
Severance, see Severance.
Joinder of parties,
By defendant
By impleader, 202
To a counterclaim or cross-claim, 190, 200
By plaintiff,
As co-defendant, 190
As co-plaintiff, 188
Chart summarizing, 172
Consolidation, see Consolidation.
Indispensable parties, 190
Misjoinder, 209
Separate trials, 209
Severance, see Severance.
Judgment,
Attacking under Rule 60, 565
Execution on, 537
Form of, 525
Motion to alter or amend, 531, 559
Judgment as a Matter of Law, 526
Boeing v. Shipman formulation, 514
Burden of production and proof, 527
Examples with explanations, 516
Post-judgment JMOL, 526
Impact of grant or denial, 528
Must be raised in pre-verdict JMOL, 526
Pre-verdict JMOL, 512
Impact of grant or denial, 515
Judgment notwithstanding the verdict, see Judgment as a Matter of Law
Juries,
Challenge for cause by jury strike, 508
Charge, 520
Deliberations as secret, 520
Demanding a jury, 507
Determination of right to jury, 506
Peremptory challenges, 509
Power of judge to use in non-jury claims, 507
Revocation of demand, 507
Selection and challenges to jurors, 508
Verdict form, 518
Voir dire, 508
Mental examinations, see Discovery.
Mootness, 288, 290–291
Motions,
Generally, 271
Affidavits to support, 273
In limine, 505–506, 561
To dismiss for failure to join an indispensable party, 323
To dismiss for failure to state a claim upon which relief can be granted, 313
Conversion into summary judgment motion, 314
Rule 12(c) compared, 400
To dismiss for improper venue, 305
To dismiss for insufficient service of process, 311
To dismiss for lack of personal jurisdiction, 299
To dismiss for lack of subject matter jurisdiction, 283
Multi-district litigation, 595–596
Necessary parties, 190
New Trial,
Additur, 531
Grounds, 528
Motions for, 528
Remittitur, 530
Pendent Party Jurisdiction, see Supplemental Jurisdiction.
Pendent personal jurisdiction, 237
Pendent venue, 243
Permissive joinder, see Joinder.
Personal jurisdiction, 61
Consent to,
By motor vehicle consent statute, 65
By pre-suit agreement, 65
By state registration statute, 65
Federal long-arm statute authorizing nationwide service, 74
General jurisdiction, 77
In rem jurisdiction, 93
Motion to dismiss for lack of, 299
Pendent personal jurisdiction, 237
Physical presence in forum state when “tagged,” 76
Quasi in rem, 95
Specific jurisdiction, 79
State long-arm statutes as affecting, 71
Physical examination, see Discovery.
Pleadings, 150
Amending, see Amendment of Pleadings.
Defined, 150
Role of, 148
Technical requirements for, 150
Political Question, 285
Post-judgment practice
Chart illustrating impact of grant or denial of post-judgment motions, 531
Decision tree illustrating post-judgment motions, 532
Motions for JMOL, see Judgment as a Matter of Law.
Motions for new trial, see New Trial.
Post-verdict practice, 523
Pre-suit investigation, 141
Preemption, see Subject Matter Jurisdiction.
Pretrial order, see Scheduling Order.
Pullman Doctrine, see Abstention Doctrines.
Quasi in rem, 95
Relation Back Doctrine, see Amendment of pleadings.
Relief from judgment under Rule 60(b), 565
Remand, see Removal.
Remittitur, see New Trials.
Removal, 115
Diversity-type, 119
Amount in controversy, 124
Forum defendant rule, 123
Fraudulent joinder, 120
One-year bar, 129
Thirty-day deadline, 125
Federal question-type removal, 118
Thirty-day deadline, 125
Procedure to remove a case, 131
Remand of case to state court, 132
Waiver of right to remove conduct, 130
Reply to counterclaim, see Pleadings.
Requests for admission, see Discovery.
Required Initial Disclosures, 386
Sanctions, 387
Supplementation, 387
Res judicata, see Claim preclusion.
Ripeness, 288–290
Rooker-Feldman Doctrine, see Abstention Doctrines.
Rule 26(f) Conference, 380.
Rules Enabling Act, 408, 411
Rules of Decision Act, 403, 409
Sanctions,
For discovery violations, see Discovery.
Inherent power to sanction, 349
Under Rule 11, 343
Later advocating, 343–345
Motion by court, 345
Motion by party, 345
Safe harbor, 345
Nature of permissible sanctions, 346
Representations implied by signature on papers, 142
Under Section 1927, 349
Scheduling orders, 365
Modifying, 388
Separate trials, 209
Service of process,
Constructive, 261
Method of making, 259
Motion to dismiss for improper service, 311
Waiver of objection to, 311
Severance of claims or parties, 209
Standing,
Constitutional, 289
Prudential, 292
Subject matter jurisdiction,
Ancillary jurisdiction, see Supplemental jurisdiction.
Constitutional limitations on, see Abstention Doctrines.
Diversity subject matter jurisdiction, 37
Amount in controversy, 38
Aggregation, 51
Impact of affirmative defense on, 48
Judgment is for less than minimum, 50
Legal certainty test, 47
Valuing injunctive and other non-monetary relief, 49
When determined, 47
Citizenship,
Chart summarizing, 46
Complete diversity required by statute, 39
Contamination theory, 224–225
Of corporations, 43
Of natural persons, 41
Of other entities, 44
Of representatives of real parties in interest, 46
When determined, 40
Scope of Section 1332 and Constitutional grant compared, 37
Federal question subject matter jurisdiction, 27
Comparing Section 1331 to Constitution, 27
Complete preemption as basis for, 36
Exclusive federal jurisdiction, 53
Express federal statutory claims, 30
Substantial Federal Question in State Law Claim, 31
Well-pleaded-complaint rule, 28
 Motion to dismiss for lack of, 283
Pendent party jurisdiction, see Supplemental jurisdiction.
Subpoena, see Discovery.
Subpoena duces tecum, see Discovery.
Summary judgment, 483
Burden of persuasion, 487
Burden of production of movant, 487
Burden shifting process, 491
Examples with explanations, 496
Flow chart, 496
When, 483
Summons, see Complaint.
Supplemental jurisdiction, 220
Case or controversy, 222
Gibbs Test, 223
Charts for determining, 222
Discretion to decline exercise of, 228
Examples with explanations, 247
History of statute, 220
Procedure to apply, 222
Third-party practice, see Impleader.
Transfer of actions, see Venue.
Trials,
Closing argument, 519–520, 529
Judgment as a matter of law, see Judgment as a Matter of Law.
Plaintiff's case in chief, 510–511
Plaintiff's rebuttal, 515
Use of depositions at, 511
Venue, 105
Catch-all provision, 112
Choice of law after transfer, 416
Claim-by-claim determination, 105
Defendant's residence,
Corporations, 109–111
Chart of, 110
Other entities, 109–111
Natural person, 109
 Single defendant cases, 109
Forum non conveniens, see Forum non conveniens.
Forum selection clause impact on proper venue, 360
General federal venue statute, 105
Motion to dismiss for lack of, 305
Adjudication of motion, 308–310
Waiver of right, 305–307
Motion to transfer to more convenient forum, 351
Specific venue statutes, 105, 112
Substantial part of the events, 106
Voir dire, see Juries.
Voluntary dismissal, 396
Younger Abstention, see Abstention Doctrines.