OUTLINE for Civil Procedure Fall 1992. Prepared by J. William Snyder, Jr. Term: Fall 1992 Text: Yeazell, Landers, & Martin, Civil Procedure (3d ed. 1992). Instructor: Professor Broun NOTE: This outline was originally prepared for my own private study, and it is based primarily on my own class notes, handouts, and excerpts from the textbook, either in paraphrase or direct quote. When possible, I tried to indicate material that has been directly quoted, but it is possible that some material from the textbook has been directly quoted without indication. I. Characteristics of our system A. Rational resolution of disputes (cf. Middle Ages) B. Accusatorial system, not inquisitorial 1. Judges are passive operators, not investigators 2. Advocates do the investigating 3. System relies on parties adverse to one another so that issues will be honed to sharpness with an eye towards exposing the truth. 4. State has an interest in resolving disputed, but it costs money. 5. Problems with our system a. Quality of the advocate b. Resource inequality 6. Problems with the inquisitorial system a. Bias of the investigator b. Static; Changing the system is extremely difficult, and any changes that occur do so slowly over time. II. Process of civil litigation A. Themes in civil procedure 1. Trial is a rational search for a resolution of a dispute. 2. Adversarial process with adverse interests to present facts to a trier of fact. 3. Cost of procedural system to the state: Though the state has an interest in resolving disputed to keep the peace, the process is costly. Tension: How to make the process more efficient and cost effective without jeopardizing the rational inquiry. These two goals tend to clash. B. Investigation 1. Lawsuits ordinarily begin when the client walks into a lawyer's office. a. Investigation (1) Interview client (2) Obtain police & other reports (3) Factual investigation (4) Legal investigation (5) Do any of the facts give rise to a COA b. Rule 11 (1) Pleadings and other filings must be signed by the attorney of a represented party and filed in good faith after a reasonable inquiry into the facts. (2) The sanctions for violating Rule 11 are high. C. Decision making after investigation 1. Subject matter jurisdiction a. State courts (1) Lower courts of limited jurisdiction (2) Mid-level courts of general jurisdiction b. Federal courts - Courts of limited jurisdiction (1) Diversity of citizenship (a) $50K minimum claim (b) Diversity must be complete, that is, no plaintiff and no defendant can be citizens of the same state. (EXCEPTION: Federal Interpleader Act, which permits minimal diversity between claimants. (2) Citizen of a state vs. citizen or subject of a foreign state. (3) Citizens of different states vs. citizen or subjects of foreign states. (4) Foreign state (5) Ambassadors (6) Disputes between 2 or more states (7) US is a party (8) Citizen of US vs. Foreign government 2. Personal jurisdiction - The court has jurisdiction over those persons who are subject to service of process (SOP) 3. Venue- What court has jurisdiction (There might be more than one.) - Cases can be transferred if misfiled 4. Alternative dispute resolution: movement to have disputes resolved without court action- alternative forums a. Arbitration b. Mediation c. Summary jury trials - Balancing of goals of adversarial process and rational dispute resolution C. Pleading 1. Filing of complaint- start of the process (subject to Rule 11) 2. Joinder a. What parties should be joined as plaintiffs and defendants? b. What claims, counterclaims, and cross claims should be joined? 3. Class action- all persons similarly situated 4. Service of Process - Service of complaint and summons to court. This is how the defendant is formally notified that she has been sued. If that person is not subject to SOP, the court does not have personal jurisdiction. 5. Answer by defendant (subject to Rule 11) (a) Factual disputes (1) Counterclaim: "Not true, and you owe me" (2) Cross claim: A claim between two parties aligned on the same side in the same lawsuit. (3) Third party claim: Impleading third parties for contribution or indemnification. (b) Legal disputes (1) Demurrer/FRCP 12(b)(6): Motion to dismiss for failure to state a claim upon which relief can be granted... "So what?" (2) Intervention: someone else may want a piece of the action. Courts generally leave it up to plaintiffs, but in cases where rights are intertwined, courts will allow intervention. D. Discovery 1. Acquisition of evidence 2. Depositions: examination of witnesses or party under oath outside of court- testimony is recorded. Depositions tie deponents to a story- they can be used at trial to impeach a witness if the witness deviates from her previous story. 3. Interrogatories: asking written questions- answered by the lawyer in consultation with the client. Interrogatories require investigation on the part of the party served with the interrogatory if the information is not within the immediate province of the lawyer or the client. 4. Documents 5. Requests to admit: asking a party to stipulate, attest, or admit something. 6. Physical examination or mental exam 7. Costs: where most of the costs arise during the litigation process a. travel, lawyers' expenses just on depositions- resources can become important here. b. Dealing with a mountain of interrogatories c. Production of documents: pouring over whole warehouses of documents. d. Judge may cap time of discovery E. Resolutions without trial 1. Summary judgment a. No issue over facts, and b. Movant is entitled to judgment as a matter of law. c. If there is an issue of fact, the case can proceed to trial. 2. Pretrial conference and potential for settlements a. Some judges press hard for settlements. b. Other judges are not as aggressive in pursuing settlements c. A high percentage of cases settle at some stage. If you are ready to go to trial, you have a good chance of getting a favorable settlement. d. Must request a jury trial if you want one. F. Trial 1. Opening statements 2. Presentation of evidence and examination of witnesses. 3. Motion for a directed verdict - Even if all the evidence is viewed in a light most favorable to the adverse party, the movant is entitled to relief as a matter of law- no reasonable jury could rule against the movant. - Similar to demurrer and motion for summary judgment 4. Juries are charged and instructed on the law. 5. Verdict 6. Judgment NOV (not withstanding the verdict) - No reasonable jury could have found against the moving party, so the movant is entitled to judgment not withstanding the verdict. - There might be precedent for dealing with a particular fact pattern. G. Appeal 1. Is the case ripe for appeal? Motions during trial are usually not appealable during trial, except under special circumstances. Appeals are normally taken from final orders 2. Reviewability: what rulings of the trial judge are in error. NOT REVIEWABLE: denial of motions to dismiss. H. Relief from judgment a. Losing party seeks to have judgment set aside. b. Time limits on collection c. Losing party filing bankruptcy to avoid paying judgment. I. Issue preclusion (res judicata) a. Cannot re-litigate the same issue in many instances b. Determination made at the beginning of the next case whether or not the subject matter is res judicata. III. Common law system of procedure and pleading- peculiar to the English system A. Plethora of courts who were jealous of their respective subject matter jurisdictions, mainly for the court fees they collected. a. Chancery (equity courts) b. King's Bench c. Queen's Bench d. Ecclesiastical and baronic courts e. Lower common law courts B. Writs based on a form of action 1. Different writs for different causes of action to get into court- you purchased the appropriate writ from Chancery a. Trespass (3 general types) b. Contract (assumpsit) c. Replevin d. Debt e. Trover f. Covenant g. Ejectment 2. You had to pick the right writ, or you were out of court. The common law system of pleading is characterized by its extremely technical nature. 3. Court of Chancery: the Lord Chancellor's court a. Get in by bill, not by writ b. Remedies were flexibly developed (1) Injunctive relief (tort) (2) Specific performance (assumpsit) (3) Remedies for fraud c. No jury d. Cryptic language e. Witnesses examined under oath f. Only one issue resolved per case g. Choice of either legal or factual question. Demurrers could be fatal. No discover, pretrial, etc. You went straight to court. h. The Court of Chancery arose to cure the defects of the common law courts, especially the rigidity. (1) Maxim: no remedy in Chancery where the remedy at law is adequate (2) Not bound by precedent, but relied on legal maxims 4. Pleadings eventually became legal fictions, as new situations were forced into old writs (trying title under trespass quare clausum fregit) 5. Why study common law pleading a. CL exercises influence on how judges and lawyers think b. Early determination of dispute. CL pleading aimed at separating legal from factual issues c. Shared power: separate jurisdictions/separation of powers C. Premises 1. Royal judicial power is limited (plethora of courts) At first, only when local courts failed did the royal courts step in. 2. A subject had to explain to the court why it should bother to hear the claim. *** Breaking of the King's peace got the courts' attention. Offenses that broke the peace and harmed the plaintiff 3. Violence was under the jurisdiction of the royal courts 4. Later, violence was stretched to include other cases, like breach of contract and negligence. The writs became legal fictions. New writs were added, but later became frozen at a set number. 5. Different procedure for each form of action. D. Common law pleading 1. Separated legal from factual issues 2. Early dispute definition 3. Juries became central to the process, eventually 4. CL pleading required parties to define their dispute as factual or legal 5. Limited number of responses a. Dilatory pleas (1) Challenges to jurisdiction (2) Pleas in suspension (Disabilities) (3) Pleas in abatement (defect in pleading) b. Answers (peremptory pleas that addressed the merits) (1) Demurrer: challenges the legal sufficiency and form of the claim- "So what?" (2) Traverse: Opposite of a demurrer- denial of the factual allegations, but not the legal issues. "Not true!" (3) Plea in confession and avoidance: legal and factual issues ok, but alleges additional facts that alter the significance of the complaint. "Yeah, but.." IV. Code Pleading (Field code) A. An attempt to reform the unwieldy common law system: abolished common law pleading in favor of fact pleading. It started in the 19th century, and it is still used in many jurisdictions (CA, NY, etc.) 1. Abolished multiple forms of action and replaced them with one form known as "civil action" 2. Fact pleading: allege ultimate facts a. Ultimate facts: facts from which a cause of action can be read. NOT: b. Evidentiary facts (details) c. Legal conclusions 3. Anatomy of a code complaint a. Facts constituting a cause of action (ultimate facts) b. Demand for judgment for relief 4. Code states insist elements be set forth more precisely than would be required in a Federal Court. 5. Logan v. SCRTD A 1983 claim. Plaintiff must plead facts that he was deprived of a federal right, in this case, property without due process He failed to plead facts as to SCRTD's outrageous conduct. B. Advantages 1. Less technical than CL pleading 2. Better notice of issues in the case. 3. Exposes insubstantial claims early. Earlier determination of legal issues. 4. Issue and claim preclusion determinations easier. 5. Encourages investigation into the case. V. Pleading under the Federal Rules of Civil Procedure A. Cure defects of Code Pleading. Replace it with notice pleading. Dispense with dance and precision of fact pleading. B. Rule 8(a): Complaint must include 1. A short and plain statement of the jurisdictional grounds for the case. 2. "A short and plain statement of the claim showing that a pleader is entitled to relief, and" 3. A demand for judgment for the pleader. C. Campbell v. Laurel and 1983 1. Elements of a 1983 action a. Action under the color of state law. b. To deprive a person of a federal right 2. Campbell accused her probation officer Laurel of sexual harassment. She charged him and the Inham County probation Dept. with 1983 et al. violations. 3. Campbell did not correctly plead her 1983 claim, and so the court sustained the defendant's 12(b)(6) motion. a. She failed to sufficiently allege that the action was under the color of state law with reference to the probation department. She had to allege "pattern or practice" or policy where they encouraged or condoned such conduct, not just gross negligence. Moreover, the court wanted specific facts regarding a policy or practice. Negligence is insufficient for the color of law requirement, though she might have a case in tort. b. No alleged violation of a Federal right. 4. After sustaining a 12(b)(6), the court usually grants leave to amend and dismisses only if the plaintiff does not choose to amend the complaint. D. Rannels v. Nichols 1. Complaint for malicious prosecution. Plaintiff filed a diversity suit in Federal court. 2. Defendant filed a 12(b)(6): court sustained the motion for failure to allege specific facts. 3. Elements for the tort of malicious prosecution a. Termination of criminal proceedings in plaintiff's favor. b. Lack of probable cause c. Malice 4. FRCP is notice pleading, not fact pleading- Defendant had notice of what they were being charged with, especially the contended lack of probable cause. Rule 9(b): "Malice, intent, knowledge, and other conditions of mind...may be averred generally." E. Code pleading vs. FRCP 1. Code pleading a. Early determination of issues b. Better definition of the issues c. Claim preclusion easier/ greater certainty d. Better notice e. Forces better and earlier investigation 2. FRCP a. Flexibility- can plead and prove more things b. Prevents too early a decision. By avoiding early determination, the parties have a chance to make their cases. c. Removes technical issues, like what is an ultimate fact. d. DISCOVERY: Reliance on discovery, pre-trial orders and other devices for 1 b,c,d. e. Rule 11: sanctions for frivolous and inconsiderate pleadings and other filings. 3. NC is an FRCP/Code hybrid. NC courts want specificity in pleading (ultimate facts), but they leave discovery and pre- trial orders pretty much open. F. Ethical limitations and disfavored claims 1. Rule 11 [NOTE: RULE 11 HAS BEEN CHANGED SINCE THIS OUTLINE WAS PREPARED!!!!!!] a. Brief overview (1) All pleadings, motions, and other filings must be signed by the party if the party is unrepresented or by the party's attorney if the party is represented. The address of the signer shall be stated. (2) By signing the filing, the signer certifies that she has read the filing, conducted a "reasonable inquiry," and to the best of their knowledge the filing is "well grounded in fact and is warranted by existing law or good faith argument for [changing] of existing law." (3) If a filing violates this rule, a party by motion or the court on its own motion may impose sanctions consisting of reasonable costs plus a reasonable attorney's fee. b. Business Guides v. CCE (1) Business Guides sought a TRO to keep CCE from publishing what it called plagiarized material- seeds from seeded listings. To obtain a TRO, the filer must file an affidavit attesting to certain requirements (See Rule 65(b)) (2) Rule 11 applied not just to attorneys who fail to make a reasonable inquiry into the facts before filing, but any party who signs, even if the signature is superfluous. (3) Rule 11 requires that all pleadings and motions be made in good faith and bear the signature of the attorney of the represented party. Rule 11 allows frivolous and unsubstantiated pleadings to be sanctioned. The pleader must conduct a reasonable inquiry into the facts prior to filing; an objective standard. (Standard is not the subjective good/bad faith that existed prior to 1983.) 2. Disfavored claims a. Fraud (1) Rule 9(b) requires that fraud and mistake or the circumstances surrounding each be "stated with particularity" (2) Dileo v. Ernst & Young (a) Allegations of fraud must be pleaded with particularity and specificity. (b) Tough for Dileo to plead fraud. He could not get at the information he needed until discovery. However, his fraud complaint fell short of Rule 9(b)'s requirements. (c) Broun's advice: Throw everything in but the kitchen sink when making out complaints for fraud. You have to clearly demonstrate some intent to deceive. (d) Judge Easterbrook, the judge who wrote this opinion, is a big free- marketeer, so he is not to wild about claims of fraud. (3) Why require such particularity in pleading fraud claims? (a) Discourages frivolous fraud claims. Fraud is a nebulous concept and may come down to a swearing contest. (b) Fraud is a serious charge which reflects on the reputation of a person or business. b. Civil Rights Though Rule 9(b) does not require that civil rights claims be pleaded with specificity, some federal courts have demanded specificity more specificity in civil rights complaints. Fisher v. Flynn (a bad decision in my opinion) (1) Sexual discrimination case: Fisher got canned after failing to come across for her department chair. She alleged a 1983 violation. (2) Court concluded she alleged no causation in her complaint (ie, that her department chair used his influence to have her fired after she refused to yield to his advances.) (3) Court also wanted a factual outlining of her charge- her complaint lacked the required specificity. [!????!] (4) S.Ct. had just granted cert. to a similar case (a) Does dismissal for these sorts of defects violate the REA by impinging on the substantive rights of persons? (b) Heightened pleading requirements not stated with Rule 9(b) and that conflict with Rule 8(a). When, if ever a federal court requires heightened pleading, it is essentially a substantive decision. (5) Substantive law v. Procedure (a) Substantive law deals with actual legal rights (b) Procedure deals with how those rights are enforced. (c) Sometimes the difference is hazy, like diversity suits where state substantive law applies, but FRCP governs the procedure. (1) Statutes of limitation (2) Burdens of proof. G. Allocating the elements 1. Burdens of proof a. Burden of pleading - Elements that must be included in the complaint or answer (elements of an offense, affirmative defenses, compulsory counterclaims, etc.) b. Burden of production - Who must present the evidence with regard to what issues. c. Burden of persuasion - If jury is right in the middle, who wins? The party with the burden of persuasion is the one who will lose, as that party must win by preponderance of the evidence. d. Usually all three are on the same party, but not always e. In criminal prosecutions, all BOP's are on the prosecutor, who must prove all elements of an offense beyond a reasonable doubt. f. Negligence claim (1) Duty (2) Breach of duty (3) Causation (4) Proximate causation (5) Damages (6) Defendant must allege and prove any contributory negligence in most states and in federal jurisdictions (See Rule 8(c). g. Burden of pleading is a procedural matter that is governed by the FRCP in federal cases. h. Gomez v. Toledo (1) Question: Must the plaintiff allege that the defendant acted in bad faith as part of the complaint in a 1983 action, or must the defendant plead good faith as an affirmative defense? (2) Two elements for 1983 claim (a) Deprivation under the color of law (b) Of a federal right (3) Though it has been recognized that officials are entitled to qualified immunity for actions taken in good faith, pleading bad faith is not a requirement of 1983. (case law, intent, and text) (4) Rule 8(c) application: Moreover, the circumstances regarding the state of mind of the defendant are peculiar to the defendant, and so hi is the better person to make those allegations. It has the feel of an affirmative defense and therefore the defendant must plead it in his answer. (5) Why did Gomez appeal to S.Ct? instead of amending his complaint? (a) No evidence to back up such a claim, so Rule 11 comes into consideration. (b) Practical: if he pleads it, he has to prove it. (6) Rehnquist concurrence: Burden of persuasion is still an open question. (7) Another reason: Allocating the burdens this way makes plaintiffs case easier. Allocating the burdens can be a substantive decision as to who should win in a close case. VI. Responding to the complaint: A. Rule 12(a): Once served with process, you have 20 days to serve an answer (30 days in most states) B. Choices: Pre-answer motions 1. Answer on the merits, or 2. Move to dismiss under 12(b)(1-7) (1) Lack of subject matter jurisdiction (2) Lack of personal jurisdiction (3) Improper venue (4) Insufficiency of process (5) Insufficiency of service of process (6) Move to dismiss for failure to state a claim upon which relief can be granted (7) Failure to join a Rule 19 necessary or indispensable party. 3. Rule 12(e): Motion for a more definite statements. 12(e)'s are rarely made or granted- the rule is almost an anachronism. A judge is likely to say file interrogatories or deny the allegations a. When made, it is usually coupled with a 12(b)(6). b. Was a common motion in the early days of the FRCP, but no longer. 4. Rule 12(f): Move to strike a. Expunge scandalous material b. Strike a count as legally or fatally insufficient (ie. punitive damages in a negligence case.) 5. Rule 12(c): Motion for judgment on the pleadings (similar to summary judgment) 6. Rule 12(d): Upon application of a party, a hearing to consider a motion made under Rule 12(b) can be convened unless the judge delays such a hearing until trial. 7. If a Rule 12(b) motion is a. Granted, then the court will dismiss the complaint with leave to amend. b. Denied, then under Rule 12(a)(1), the party has 10 days in which to serve a responsive pleading. 8. [Review hypotheticals on page 427] 9. Four parts of a motion a. Request for specific relief sought (the motion itself) b. Notice of the motion c. Affidavit containing relevant facts, if necessary d. Memorandum of law supporting the legal basis of the motion 10. Rule 12(6): If certain motions are not made in a motion to dismiss, they can only be made in a responsive pleading within the time limit prescribed by Rule 12(a), subject to the exceptions listed in Rule 12(h). C. Answer (to factual allegations) 1. Once served with process, you have 20 days to answer without an extension, which is usually granted. (Rule 12(a)) 2. Choices (Rule 8) a. Rule 8(b): Denial of factual allegations (1) Specific denials: denying specific factual allegations (2) General denials: denial of factual allegations generally. These can be made subject to Rule 11. Though general denials are almost always misused and frowned upon, they are usually tolerated. b. Rule 8(c): Affirmative defenses (several enumerated defenses plus a "catch all" phrase) c. Rule 8(d): Failure to deny (adequately) an allegation is interpreted as admitting that allegation. 3. Zielinski v. PPI and the dangers of ineffective denials (Rule 8(d)) a. PPI was sloppy in issuing a general denial to Zielinski's complaint. b. Misleading interrogatories led Zielinski to believe incorrectly that he had sued the correct party. c. PPI was present at Sandy Johnson's deposition and did not object with SJ testified that he was a PPI employee. d. Only 2 years later did Zielinski find out that he had sued the wrong party. He asked the court to grant estoppel to prevent PPI from denying agency. e. 2 sorts of admissions (1) Binding admission: If you plead it, you are bound by it at trial. Ineffective denial is regarded as an admission under Rule 8(d). PPI did not effectively deny agency, so they are bound by that admission at trial. (2) Factual admission: These can be used against you at trial, but jury may choose to believe or disbelieve it. f. Court rules against PPI. Sets up a legal fiction. (1) Binding admission by PPI's ineffectual denial. (2) Equitable estoppel: unfair to allow PPI to escape at this point (not to mention the insurance company who insured both PPI and CCI, for if the case were dismissed at this point, Zielinski would not be able to refile because the SOL had expired. (3) The balance of equities decided this case, not formal rules of pleading. PPI's general denial might have been effective in another case. (4) PPI is estopped from denying agency. 4. Layman v. SW Bell and affirmative defenses (Rule 8(c)) a. Trespass complaint against SW Bell by Layman. b. SW bell denied the allegation of trespass c. At trial, SW Bell tried to admit into evidence an easement. The plaintiff objected on the grounds that the defense of easement was an affirmative defense which the defendants did not plead. The trial court overruled and admitted the evidence. d. Ct of appeals reversed: easement is an affirmative defense and the defendant must plead it. e. Plaintiff could not have been surprised "surprised": The plaintiff could have reasonably anticipated that the telephone company would try to invoke the defense of easement. f. Court says yes, this is an affirmative defense. The defendant must give notice to the plaintiff that it will use this defense by pleading it in its answer. Information concerning the defense is also within the purview of the defendant, so it ought to have to plead it. g. When courts make these sorts of decisions, they are making substantive pronouncements on who should win a close case. Who is allocated what burdens plays a big role in these decisions. h. [See hypotheticals on page 437.] 6. Reply: Rule 7(a) - Response to answer when a response is required a. Counterclaim b. Court ordered replies c. Otherwise, no reply is required and allegations in the answer are assumed denied. 7. Amendments: Rule 15 a. Two goals in amendment, often in conflict (1) Easy amendment to allow pleadings to reflect the changed view of the parties as the case develops. Policy: allow the pleadings to reflect the true positions of the parties in order to facility better factual analysis and trying what is really at issue. (2) Prejudicing the other party: at some point the parties should have to be pinned down to their cases and stories out of fairness. b. Rule 15(a): A party may amend its pleading once as a matter of course before responsive pleading is served. If the pleading sought to be amended requires no responsive pleading, then the pleader has 20 days in which to amend as a matter of course. Otherwise, leave of court or written consent of adverse party is required in order to amend. (must respond to amended pleading in 10 days or balance of time for reply of original pleading, which ever is longer. c. Rule 15(c): Relation back of amendments - Basic problem of notice: did the opposing party have reasonable notice within the statutory period that the new claim might be made? A responsive pleading related back to the date of the filing of the original pleading when (1) Relation back is permitted by the law that supplies the statute of limitations for the action, or (2) When the claim or defense "arose out of the [same] conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, or, (3) The amendment seeks to change the party or the naming of the party in the original pleading within the 120 days service of process time period established by Rule 4(j) if (a) The party intended to be sued has received such notice [from any source] of the impending action such that he would not be prejudiced in defending himself on the merits. (b) Knew or should have known that but for the mistake concerning the party's identity that he would have been sued and not the other party. - This last section came into being as a result of 2 cases in which the pleader attempted to change the party sued because of a mixup. (a) Dr. V.J. Kumar case: Plaintiff served the wrong "Dr. V.J. Kumar", and the plaintiff did not find out his mistake until the SOL had ran. Ct of appeals allowed amendment. (b) Schiavone v. Fortune, Inc.: Schiavone wanted to sue Fortune magazine for running a libelous article. He should have sued Time-Warner, since Fortune, Inc. was a dummy corporation with no existence separate from Time-Warner, Inc. The SOL had run, so he could not dismiss his present suit and file suit against Time-Warner. S.Ct. did not allow amendment to relate back, and the amendment did not satisfy SOL. - Courts are reluctant to toll the SOL. Exceptions: (a) Out and out fraud. (b) SOL does not run against a child until the age of majority. d. Beeck v. Aquaslide (1) Aquaslide admitted manufacture of a water slide on which Beeck was injured. (2) They believed they were the manufacturer- their own insurer confirmed manufacture. (3) After SOL had expired, the company president inspected the slide and determined that Aquaslide had not manufactured that slide. The slide in fact was a cheap imitation. At this point, Aquaslide attempted to deny manufacture. (4) Court allowed them to amend their answer to deny manufacture and held a special trial on the question of manufacture. The verdict was that Aquaslide had not made that particular water slide. Beeck's case was summarily dismissed (5) SOL had expired, so Beeck could not sue the true manufacturer. (6) Neither party did anything wrong or acted in bad faith. Both sides acted with due diligence. Who should bear the loss? The equities point towards allowing the amendment. e. Barnes v. Callaghan & Co. and relation back (Rule 15(c)(2)) (1) Barnes charged Callaghan with sex discrimination in her discharge. (2) Amended her complaint 2 times. Finally alleged CRA violation and slander. The trial court bounced the CRA claim but awarded damages on the slander claim. (3) Ct. of appeals reversed (a) No allegations of malice as required by IL law (!?!) (b) Did not arise out of the original conduct, so cannot relate back under Rule 15(c)(2). [The alleged slander occurred several months after her discharge in phone conversations between Callaghan and Barnes's prospective employers. (c) No notice of slander charge before SOL ran out: no timely allegations of slander. (4) Affirmed bounce of the CRA claim VII. Remedies and damages A. Substitutionary remedies: Usually CASH. 1. US v. Hatahley a. US agents rounded up and sold Navajo cattle to a glue factory before a dispute over grazing lands had been adjudicated. On review of the district court's opinion b. Value of the lost animals = Cost of comparable animals + training costs. c. Loss of use damages = loss of profits until such time as a reasonable person would have replaced the animals. d. Pain and suffering damages are individual damages and cannot be assessed collectively. e. [Different culture] (1) They might have not been able to get a loan to procure replacement animals (2) They might not have wanted to get a loan: not in their culture to do so. (3) Monetary damages are placed on something with no monetary value in that culture. 3. Other forms of damages a. Liquidated damages for breach of contract: decided beforehand what damages for breach are to be (specified in the contract) subject to certain limitations, like statutory limitations. b. Punitive damages for wilful, malicious, or purposeful conduct (intentional torts, etc.) B. Specific remedies (as opposed to substitutionary) 1. Replevin, ejectment, specific performance, injunctions, etc. 2. Dispensed through the equity power of courts derived from the Chancery court (Usually, though not always.) 3. Injunctions- non-compliance by contempt proceedings. 4. In order to seek an equitable remedy, the remedy at law must be inadequate (remedial hierarchy) (Irreparable harm) 5. Sigma v. Harris a. When Harris first was hired by Sigma Chemical, he signed a restrictive covenant barring him from working for a competitor for 2 years after separation and never to divulge any of Sigma's proprietary secrets as to their procurement process. b. Harris quit and started working for ICN, one of Sigma's competitors, almost immediately. c. Sigma sought and got a TRO and eventually a permanent injunction. d. The court adjudged the covenant to be valid. Requirements for validity (1) Need a valid reason (2) Must be reasonable in time; cannot be permanent (3) Must be reasonable in geographic scope. e. After a balancing of the hardships and equities, the court granted the permanent injunction, but allowed Harris to divulge what he learned at Sigma after such time that ICN could have learned the same thing. There was a significant possibility of irreparable harm, and so equitable relief was warranted (the legal remedy, probably some sort of cash damages, would have been inadequate.). f. Injunctions must be worded precisely, or you can run into problems. h. Mandatory injunctions are rare: can run into 13th amendment (involuntary servitude) problems. C. Declaratory Judgment 1. Federal Declaratory Judgment Act permits individuals to file suit to get a declaration of their rights. Governed by Rule 51. 2. No remedial hierarchy: can bypass any legal remedies. 3. Problems in clashing with "cases and controversies" doctrine. 4. Converts parties who would be defendants into plaintiffs, and vice versa. Also, jurisdictional squabbles ("arising under" jurisdiction) 5. Shifting burdens of proof D. Attorneys' fees and the high cost of legal services - Part of the design of the US system that private parties bear the costs of litigation, so legal fees are high (contrast to inquisitorial systems). - Incentives and disincentives for clients and attorneys. 1. The American Rule a. Parties go to court "Dutch": each party bears its own court costs and legal fees. b. English rule: Loser pays the winners costs and legal fees in addition to his own. c. Where litigation is a part of the constitutional system of government, the American rule allows parties to bring less than certain cases without fear of paying the other side's legal fees if they lose. 2. Payment schemes a. Billable hours: certainty of payment b. Flat rate (1) Criminal defense attorneys typically demand up front lump-sum payment in advance. (2) Cut and dry legal procedures where the attorney knows how much time it will take and wont require research. (3) Wills (4) Stock offering (5) Uncontested divorce c. Insurance companies (1) As part of liability insurance policies, the insurance company must provide defendants with a lawyer. (2) There is also pure legal insurance, but it only covers fairly routine legal services at a flat rate or free. d. Contingent fee (A uniquely American arrangement) (1) Lawyer agrees to represent a client in exchange for a percentage of the judgment. This arrangement is common in personal injury cases. (a) This arrangement is workable only if the party is after a monetary damages award. (b) The law firm must have a cash base from which to operate before the judgment comes in. (2) Standard Percentages on a sliding scale (a) 20% for settlement before filing (b) 25% for settlement after suit is filed (c) 33% if case goes to trial (d) 50% if case goes up on appeal (e) 0% if you lose (3) Lawyers end up balancing contingent fee cases against each other. Cases with big payoffs go to pay for losing cases. (4) Screening of cases to pick out winners from losers. (5) Premium billing: mixture of contingent fee and billable hours. e. Public subsidies and charities (1) Lawyers who volunteer their services for free or for a nominal charge (2) Public funding from all levels of government (Legal Aid) (3) Publically financed legal efforts that challenge the political order earn the ire of legislators and others. f. Fee shifting (English rule) Shifting costs to the other party. (1) Contractual provisions, like between landlord and tenant. to pay costs of litigation to recover rent. Loan agreements often contain similar provisions. (2) Common law exceptions to American rule (a) Malicious prosecution (b) Rule 11 violations/Rule 26(g) violations (c) Inherent power of the court to punish abuse of legal system (d) Common fund theory: Payment of part of attorney's fees from a class action judgment. Requires action by plaintiff to establish. (3) By statute (a) Private attorney general theory: Plaintiff who performs a law enforcement function receives compensation for his attorneys fees. (b) 1988 and the CR statutes. Allows attorneys fees to be awarded to "prevailing party" as part of the costs. [Interpreted as "prevailing plaintiff" only, except when suit is filed in bad faith.] (c) Equal Access to Justice Act: Allows court to award attorney's fees in certain cases where US is the antagonist. (d) Rule 68: Pre-trial/during trial settlement offers. If the defendant makes you a settlement offer, you turn it down and end up with a less favorable judgment, you have to pay all post-offer court costs. Encourages settlement. (e) Marek v. Chesny (1) Rule 68 offer turned down. At trial, Marek got a less favorable judgment but still tried to recoup 1988 attorney's fees. Adverse parties objected, contending attorneys fees were Rule 68 "costs" that could not be recouped. (2) S.Ct. agreed Plaintiff pays [-All post offer court costs] - His own attorney's fees, even though they swallow up the judgment and leave Marek owing lots of money to his attorney. Cannot get 1988 attorney's fees. (3) Offer was valid under Rule 68 despite the lack of itemization. (4) 1988 attorney's fees are Rule 68 costs- the only interpretation which gives meaning to both regulations. (5) Brennan's dissent: Interp interferes with substantive rights. (6) Delta Airlines v. August: Plaintiff has to win something more that $0 for Rule 60 to come into play. Rehnquist dissented. Prevents "lo-balling" by the defendant in order to shift fees in cases where defendant is likely to win. (7) Possible conflict between client and attorney if settlement offer explicitly excludes attorney's fees. Goals of encouraging settlements and encouraging the representation of indigents conflict. Usual reaction: "Tough luck, attorney!" (Evans v. Jeff D.) E. Provisional remedies 1. Rule 65: Preliminary injunctions a. Inglis & Sons v. ITT (1) Inglis charged ITT with antitrust violations and unfair competition. It sought a preliminary injunction to keep ITT from selling house brand bread below cost. (2) District court's test (a) Will plaintiff suffer irreparable harm? (b) Will plaintiff probably win on the merits? (c) Do the balance of equities favor the plaintiff? (d) Is granting the injunction in the public interest? - The district court denied the injunction after applying these tests. (3) Ct. of appeals: adds an additional test (a) No abuse of discretion on the part of the district court judge (b) But, he neglected to apply an additional test (1) Does the plaintiff have the combination of probable success, and (2) Is there a possibility of irreparable harm, or (3) Does the balance of hardships tilt in the plaintiff's favor? b. In cases where the preliminary injunction effectively ends a dispute, the court should expedite the process and hold a trial as soon as possible. Consolidation of hearing and trial on merits (Rule 65(a)(2)). 2. Temporary restraining orders: Rule 65(b) a. A ten day order stopping a certain activity pending a hearing. It can be issued at an expedited hearing and without notice under certain circumstances. Also, plaintiff must post a bond to compensate the defendant for any damages if the TRO was not warranted. 2 requirements (1) From an affidavit or a verified complaint it appears that irreparable harm is likely (2) Certification in writing of the efforts to give notice and reasons for not requiring notice. If both these conditions are met to the court's satisfaction, it can grant a TRO without notice to the defendant. b. At a subsequent hearing, the judge will decide whether or not to convert the TRO into a preliminary injunction. 3. Provisional remedies and the Due Process clause Fuentes v. Shevin a. FL and PA replevin statutes allowing replevin without notice or a hearing- hearing comes later in FL, but might not come at all in PA. Fill out form with clerk of court and clerk issues the writ. Post security bond of double value. b. Violated DPC: right to possess is a property right that cannot be deprived without (1) Notice (2) Hearing DPC requires both out of fairness to the parties involved. c. State might have a compelling interest in seizing property that is likely to sprout legs and leave the jurisdiction, but interest short of that is not likely to be deemed compelling. d. Since seizures under the replevin statutes constitute state action, those actions fall under the scope of the DPC. The DPC does not extend to private conduct, so private repo men are not covered by this decision. e. Mitchell v. Grant: S.Ct upheld LA's replevin statute. It distinguished Fuentes in several respects (1) A judge issued the replevin order, not a clerk, so the opportunity for judicial oversight is much higher. (2) Required affidavit recited more facts. (3) Provisions for immediate post-seizure hearing. (4) Damages for wrongful replevin (5) More judicial supervision over the replevin process. f. The DPC establishes no absolutes. If there were a danger that a chattel was about to sprout legs and leave the jurisdiction, a TRO obtained without notice and a hearing might be acceptable under the DPC as warranted because the situation would not admit of delay. (1) An ex parte hearing for a TRO might not violate the DPC under certain circumstances. The judge might be able to act as the absent party's advocate. (2) Ex parte + judicial supervision would likely pass constitutional muster. g. The Court reaffirmed Fuentes in North Georgia Finishing v. DiChem, leaving many observers confused about what the law is in this area (no coherent rule) VIII. Joinder A. Joinder of claims: Rule 18 1. Rule 18(a): In asserting a claim for relief (claim, counterclaim, crossclaim, third party claim), you may assert as many claims as you may have against the opposing party [subject to the court's jurisdictional limitations, like subject matter jurisdiction (lack of diversity or federal question.)] - There is no compulsory joinder of claims under Rule 18. In order to join a claim, counterclaim, cross-claim, etc., it must satisfy both (a) The procedural requirements of the applicable rule, and (b) Jurisdictional requirements (diversity or federal jurisdiction) 2. Counterclaims: Rule 13 a. A counterclaim is a claim for relief from the plaintiff (1) Not a denial (2) Not an affirmative defense b. Compulsory counterclaims: Rule 13(a) - Some matters must be brought up as counterclaims when a plaintiff has sued a defendant in order to avoid the bar of res judicata in a subsequent action. (1) In a responsive pleading, the pleader shall state any counterclaim the pleader has against the opposing party if it (a) Arises out of the same transaction or occurrence, and (b) Does not require the presence of indispensable parties in order for fair adjudication. (2) The pleader need not state the compulsory counterclaims if (a) The counterclaim was the source of another pending action, or (b) The adverse party has brought an action on the claim by attachment or other process such that the court did not acquire jurisdiction over the claim. (3) If a counterclaim is determined to be compulsory, then the Federal court will have jurisdiction to hear the counterclaim under its supplemental (ancillary) jurisdiction over questions of state law. It inherently arises out of the common nucleus of operative fact. c. Permissive counterclaims: Rule 13(b) (1) A pleader may state in a counterclaim any other claim the pleader may have against the adverse party not arising out of the transaction or occurrence that makes up the subject matter of the adverse party's claim. (2) Permissive counterclaims must have an independent jurisdictional basis in order to be heard in a Federal court. d. Plant v. Blazer Financial Services (1) Plant filed an action under the Truth in Lending Act in Federal district court concerning a loan she took out with Blazer. Blazer counterclaimed for the debt. Plaintiff won her Truth in Lending (TIL) claim, but she lost on the counterclaim for the debt she owed, so the judgments offset leaving her owing Blazer a rather sizeable sum. (2) Plaintiff appealed the district court judge's determination that the counterclaim was compulsory. Since there was no independent jurisdictional basis for the claim, as a permissive counterclaim it would have to fail. Accordingly, it had to have been compulsory or it could not be considered in Federal court. (3) Four suggested tests for ascertaining whether or not a counterclaim is compulsory. (a) "Are the issues of fact and law raised by the claim and counterclaim largely the same." (b) "Would res judicata bar a subsequent suit on the defendant's claim?" (c) "Will substantially the same evidence support or refute the plaintiff's claim as well as the defendant's counterclaim." (d) "Is there any logical [sensible] relation between the claim and the counterclaim?" (4) The court keys on the "logical relation" test announced in Revere Copper and Brass v. Aetna. A logical relation between the claim and counterclaim exists when the counterclaim arises from the same common nucleus of operative facts which underlie both the claim and counterclaim. The claim activates otherwise dormant legal rights in the defendant. (5) In deciding whether or not a counterclaim is compulsory, the court must (a) Look at the factual relationship (b) Look at the parties (c) Look at policies behind the legislation And attempt to answer the question, "Is these the type of claims that should tried at the same time in a Federal Court?" There is no bright line test.All the factors must be considered together. (6) The core of operative facts must be large enough in order for the court to constitutionally extend its supplementary jurisdiction. (7) The court decides that the TIL claim and the debt counterclaim did arise out of the same core of operative fact. That core gives rise to both the claim and counterclaim. The court recognizes a split of opinion in this area, but it decides that the counterclaim is compulsory. It decided that from the dual jurisdictional provisions of the suit that Congress intended that TIL and debt claims be handled together. 3. Cross claims: Rule 13(g) a. A party may plead a cross claim against a co-party "arising out of the transaction or occurrence that is the subject matter of the original action or of a counterclaim." Cross claims for contribution or indemnification are permitted. b. Once you have met the procedural requirements for making a cross claim under Rule 13(g), you can conceivable join any other claim you have under Rule 18, subject to the supplementary jurisdictional limitations (arising out of the same case or controversy) or possibly other jurisdictional limitations. B. Joinder of Parties 1. Joinder by plaintiffs [or claim propounders] (permissive joinder): Rule 20(a) a. Rule 20(a) (1) A plaintiffs may join together to sue a common defendant(s) if that "assert any right to relief jointly, severally, or in the alternative (a) In respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences, and (b) If and question of law or fact common to all these person will arise in the action." (2) Rule 20(b) and Rule 42(b) allow the trial judge to order separate trials in order to avoid delay or prejudice. (3) While the rules on joinder of claims are extremely liberal, the rules concerning permissive joinder of parties are much more restrictive. b. Mosely v. General Motors Corp. (1) Mosely and nine other plaintiffs bring 1981 and Title VII actions against General Motors and their union for racial discrimination in employment practices. The trial court found no common question of law or fact among 10 of the claims, and it ordered them severed into 10 separate causes of action. The plaintiffs obtained an interlocutory appeal to decide this Rule 20(a) question. (2) The court looks to the two requirements of Rule 20(a) and concludes both are satisfied. (a) Analogizing to state-wide systems aimed at depriving blacks of the right to vote, the court concludes that since in that the plaintiffs were alleging a pattern or practice of discrimination, the claims did arise out of the same "series of transactions or occurrences." The analogous language in Rule 13(a) allows all reasonably related claims for relief by the parties to be joined; identity among the claims is not required. (b) The court found that GM's and the union's company-wide discriminatory conduct was a question of fact common to all parties, and thus, the second part of the Rule 20(a) test is satisfied. Though each plaintiff may have suffered different effects of that conduct, that is irrelevant to a Rule 20(a) determination. c. As Mosely demonstrates, one need not show that the claims arise out of the same discrete events in order to meet the requirements of Rule 20(a). A series of distinct but related accidents (like at a particular railroad crossing where there may be a related cause) may be adequate grounds for permissive joinder of plaintiffs. d. Though more restrictive than Rule 13(a), Rule 20(a) is so broad that any common issue of law or fact among plaintiffs is enough to permit joinder. (See the warehouse/explosive hypothetical in which an insurance company can impleaded for a common question of fact. In notes for 16-OCT-92) - The judge may sever the claims for trial if treating the various legal theories propounded by the different defendants in one trial would be unwieldy (but, courts usually don't like to hold separate trials). However, one other parties could move for joinder for sentencing. - Joinder gives the parties the benefits of discovery, in particular, the use of discovery devices that may only be used on parties to an action. 2. Joinder by defendants: Rule 14(a) (Impleader/Third party practice) a. Rule 14(a) (1) After the commencement of a suit a defendant (third-party plaintiff) may bring an action against and serve summons and complaint upon a third-party defendant (implead the third-party defendant) who is or may be liable to the defendant for all (indemnification) or part (contribution) of the amount of the plaintiff's claim against the defendant. See Rule 14(a) for service and leave of court requirements. (2) Rule 14(b): [Plaintiff may implead a third party if the plaintiff is served with a counterclaim.] b. Derivative liability of the third-party defendant to the defendant: The touchstone of Rule 14(a). Watergate Landmark Condominium Unit Owners' Association v. Wiss, Janey, Elstner Associates (1) Plaintiff is a condominium owners' association. Defendants are an engineering firm and a real estate management firm. The claim concerns faulty repairs to balconies of the residents' condominiums. The residents complained to the real estate management firm that their balconies were crumbling. The firm hired the engineering firm to draw up specifications for the repair of the balconies. The Association hired Brisk waterproofing to do the repairs pursuant to the specifications. When the Association deemed the repairs to be inadequate, it sued the engineering firm and the real estate management firm. The real estate management firm filed a cross claim against the engineering firm and a third party complaint against Brisk, alleging that they negligently performed the repairs. Brisk moved for a 12(b)(6), and the motion was granted. (2) Under the FRCP, a party defendant may implead a third party only if there is a chain of liability running through the party defendant to the third party. (a) The liability of the defendant to the plaintiff must be derivative of or secondary to the liability of the third- party defendant to the party defendant. (b) If the essence of the third-party claim is "Him, not me!", then impleader is improper. (c) If the essence of the third-party claim is "If I'm liable to the her, then he's liable to me!", then impleader is proper. (3) Whether or not there is secondary or derivative liability depends on substantive law. The law of the state in which the action is tried applies, including any (a) Rights of contribution (b) Joint & several liability (4) The essence of the third-party complaint in this case as "Him, not me!", so the claim was improper and was properly dismissed. (5) Policy: Who a plaintiff wants to sue and under what theory is his own business. The defendant has no right to change the nature of the case like that. [Here, the gravamen of the Association's complaint against the RMF and the EF was that the plans were defective, thus any claim of negligence on the part of Brisk would have been regarded as irrelevant by the plaintiff, though the court would have probably differed and allowed the defense.] [Recall the so-called "empty chair" defense (I'm not liable....He's liable! (pointing to empty chair))] 3. Supplemental jurisdiction: pendant and ancillary jurisdiction- 28 U.S.C. 1367 a. Federal courts are courts of limited jurisdiction. They are usually limited to hearing claims involving (1) Federal questions (2) Diversity of citizenship b. However, state law claims do arise between citizens of the same state during cases involving issues with their own jurisdictional bases. c. Federal courts deal with these claims under their supplementary jurisdiction (formerly known as pendant jurisdiction and ancillary jurisdiction), now governed under 28 USC 1367. (1) Pendant jurisdiction: The court may hear and decide state claims at the same time it decides any federal claims brought by the plaintiff so long as those state claims arise out of the "common nucleus of operative fact." United Mine Workers v. Gibbs. (2) Ancillary jurisdiction: Power of a federal court to hear nonfederal claims incidental to a claim over which the court is exercising its primary jurisdiction (Culled from Black's) d. Congress enacted 1367 in order to provide Federal courts with more clear cut rule on when they may entertain state law claim that have no independent jurisdictional basis. e. 28 U.S.C 1367 (a) Except as limited by (b),(c), or Federal statute, the district courts 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...Such [SJ] shall include claims that involve the joinder or intervention of additional parties." (b) In actions where the only basis for jurisdiction is diversity of citizenship, the district courts may not exercise supplemental jurisdiction over claims by plaintiffs against persons made parties under (1) Rule 14 (Third Party practice/Impleader) (2) Rule 19 (Compulsory/mandatory joinder of indispensable or necessary parties (3) Rule 20 (Permissive joinder) (4) Rule 24 (Intervention) [Subsection b. codifies the Kroger decision.] (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 question of State Law (2) The claim substantially predominates over the claim or claims over which the 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." f. Owen v. Kroger (This case was decided before the existence of 1367). (1) Kroger, a citizen of IA, sued Omaha Public Power District (OPPD), a citizen of NE, for the wrongful death of her husband. Mr. Kroger was electrocuted when he walked too close to a steel crane whose boom had come too close to a high tension power line. Owen Equipment and erection (Owen), allegedly a citizen of NE, was the owner/operator of the crane. OPPD then impleaded Owen under Rule 14(a) (NE law permitted J&S liability for joint tortfeasors, so OPPD was after indemnification) and moved for summary judgment. Meanwhile, the plaintiff was granted leave to amend naming Owen as a party defendant. The court then granted OPPD's motion for summary judgment, and further litigation took place between Owen and Kroger only. At trial, it was revealed that Owen's principal place of business was actually in IA, thus complete diversity was destroyed. Owen then moved for dismissal for lack of subject matter jurisdiction, which was eventually denied. The Ct. of Appeals held that the district court could properly extend its ancillary jurisdiction over the claim because the matter arose out of the same "common nucleus of operative fact" (Gibbs). (b) The Court concluded that the Ct. of App. misinterpreted the scope of the Gibbs decision. If the constitution were the only determiner of federal jurisdiction, the Ct. of App. would have been correct. However, Congress has broad power to legislate the jurisdictional power of the federal courts (Aldinger). The Court has interpreted 1332 (diversity jurisdiction) as to require complete diversity of citizenship (no party plaintiff or party defendant may be citizens of the same state.) (Strawbridge). Kroger could not have brought this suit directly against Owen, but essentially the same lawsuit arose when Kroger sued OPPD and OPPD impleaded Owen. If the district courts were permitted to exercise ancillary jurisdiction over nonfederal claims where diversity was the only basis for federal jurisdiction, then the door would be wide open for collusive efforts to create federal jurisdiction. Accordingly, the district court did not have jurisdiction over Kroger's claim against Owen. (The dissenters believe that the district court did have ancillary jurisdiction to entertain the claim.) (c) What the court is essentially saying is this: Plaintiffs may not bring nonfederal claims against party defendants impleaded under Rule 14(a) when bringing the claim would destroy complete diversity. Even if OPPD had stayed in the suit and continued their third party claim against Owen, Kroger would have been prohibited from bringing her claim against Owen. (d) As for possible estoppel, the court cannot waive subject matter jurisdiction by invoking estoppel. The court would have no discretion to do so. - Without subject matter jurisdiction, you are OUT OF COURT ON YOUR ASS!!!! g. Insufficiency of relationship with original claim: Amco v. Mississippi State Building Commission (1) This case arose out of a deal to build a state park. Amco was the primary contractor who eventually bowed out of the project leaving their surety agent to complete the job (directing the subcontractors, etc). However, the surety agent did not complete the job to the satisfaction of the commission, which then secured other contractors to complete the job. (2) After a complicated bout of claiming and counterclaiming in Federal Court, all claims were dismissed except for a cross claim by Amco against the commission claiming the plans and specifications the commission provided them were defective along with several other breaches of contract. Both Amco and the commission were citizens of MS (no diversity of jurisdiction). The district court declined to extend ancillary jurisdiction. (3) The S.Ct applied the logical relation test and found that there was no logical relationship between the claim and the counterclaim to the "aggregate core of operative fact." Such a logical relation exists when (a) The aggregate core serves as the basis for both the claims, or (b) The aggregate core activates otherwise dormant legal rights in the legal party. Revere Copper & Brass v. Aetna (4) The original claim brought by Stiglet against Houston General concerned payment under the surety bond, so the breach of contract claims did not arise out of the same transaction or occurrence. Additionally, it did not arise during the course of the main claim (activation of dormant legal rights) nor was it an integral part of the main claim. (5) Had 1367 existed at the time of this case, the district court could have denied supplemental jurisdiction under subsection (2) (substantial predomination) or subsection (3) (court has dismissed all other claims over which it had original jurisdiction). Otherwise, this case smacks of a legal realist post hoc justification for not dealing with a claim over which it probably could have exercised ancillary jurisdiction if it wanted to (broadly characterizing the series of transactions and occurrences). 4. Compulsory joinder: Rule 19 a. Rule 19 (1) Necessary parties: An individual who is subject to service of process and whose joinder into the suit would not destroy the court's jurisdiction over the case must be joined as a party if (a) Without the person's presence complete relief cannot be accorded among the parties already in the suit, or (b) The individual claims an interest relating to the subject matter of the action and is so situated that disposition without that person could (1) As a practical matter, impair or impede, that individual's ability to protect that interest, or (2) Leave any of the present parties subject to incurring multiple, double, or otherwise inconsistent obligations as a result of the interest claimed. The court may compel joinder of the individual if the individual resists. (see rule for what to do if a venue problems arise.) (2) Indispensable parties: If an individual described in (a) or (b) cannot be made a party, "the court shall determine whether in equity and good conscience the action should proceed among the parties before it or should be dismissed, the absent person being thus regarded as indispensable" Factors to consider (a) Any extend a judgment would be prejudicial to a party or that individual (b) Can the court effectively minimize any prejudice by placing protective measures in the judgment, by shaping the relief, etc. (3) Will any rendered judgment be adequate without the individual (4) Will the plaintiff have an alternative adequate remedy if the case is dismissed for non-joinder. b. Necessary and indispensable parties (1) Necessary party: A party who should and could be joined. (2) Indispensable party: A party who should be joined but could not be joined [and without whom the court cannot in good conscience proceed.] c. Helzberg v. Valley West (1) Helzberg (MO), a full service jewelry chain, held a lease with Valley West (IA) mall. According to this lease, Valley West agreed not to lease space to more than 2 other full service jewelry stores and no space at all to a catalog jewelry store. After they had "leased up" to the limit, Valley West entered a lease with Lord's Jewelers (IA), and though the lease facially prohibited Lord's from operating a full line jewelry store, Lord's intended to operate such a store. Helzberg sued Valley west for breach of the lease in their home district (WD KS) invoking diversity jurisdiction. They sought preliminary and injunctive relief. (2) VW moved to dismiss under Rule 19 for failure to join Lord's as a party (they argued Lord's was an indispensable party- not subject to SOP in MO). The court held that a decision without Lord's would not affect Lord's rights or obligations (it would retain all of its rights under the lease agreement). Additionally, any possibility of VW being subject to inconsistent obligations it its own fault. Lord's had declined an opportunity to intervene. A party does not automatically become indispensable because its rights under a separate contract will be affected in an adjudication on another contract. (3) Though it agrees Lord's is a necessary party, it does not believe Lord's is an indispensable party. In making this determination, it goes right down the list of Rule 19(b) considerations (1a) Lord's is not bound by this case, so its legal rights are not prejudiced. [But, as a practical matter, its interests could be very much affected by this case.] (1b) Any inconsistent obligations are voluntarily created. [By saying this the court essentially makes a judgment on the merits, that is, Helzberg should win. Indeed, VW did stand to be the object of inconsistent and contradictory obligations. (2) Opportunity to intervene declined (3) Judgment would be adequate w/o Lord's (4) [Could have sued in IA Dst. Ct. as well, but Helzberg chose to sue in its home district and hometown. The court respects that choice instead of transferring the case Under 1404 to IA where Lord's would be subject to SOP.] - But, if Lord's were brought it, the case could turn into a three ring circus with claims and counterclaims out the ass. d. Supplemental jurisdiction: Look out for supplemental jurisdiction problems when a plaintiff makes a claim against a party made a party under Rule 19 as a party defendant. C. Intervention: Rule 24 1. Rule 24 a. Rule 24(a)- Intervention as a matter of right: "Upon timely application", any person wishing to intervene in an action may do so (1) When US statutory law confers an unconditional right to intervene, or (2) When the applicant claims: (a) An interest relating to the property or transaction which composes the subject matter of the action, and (b) The applicant is so situated that disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest (c) Unless the applicant's interests are already adequately represented by those already parties to the action. (b) Rule 24(b)- Permissive intervention: "Upon timely application" a person may be allowed to intervene in an action when (1) When US statutory law confers an unconditional right to intervene, or (2) When the intervener's claim or defense and the main action share a common question of law or fact. - The court has discretion as to whether or not to permit intervention, but in making that determination, the court shall consider whether the intervention will unduly delay or prejudice the adjudication of those already parties to the action. 2. Natural Resources Defense Counsel v. US Nuclear Regulatory Commission a. NDRC sued the NRC and the New Mexico Environmental Improvement Agency (NMEIA) seeking injunctive and declaratory relief against both to issue environmental impact statements before licensing uranium mills (procedures regarded as "major federal actions" [like my wanting to put up a 1000 ft tower on my property] The NRC is required by Federal law to issue such statements before licensing uranium mills, but the NRC has entered agreements with the states to permit them to issue the same types of licenses. These state agencies are not required by Federal or state law to issue environmental impact statements. b. Other parties wished to intervene (1) United Nuclear Corporation (UNC), a company holding a license issued by NMEIA, sought intervention, and the court allowed it. None of the parties objected. (2) Kerr-McGee, Anaconda Co., Gulf Oil, Phillips Petroleum, and the American Mining Congress (AMC) also sought intervention as of right. The court denied intervention as of right because it believed their interests were adequately represented by UNC and intervention might result in an unwieldy trial. The court also denied permissive intervention. Kerr-McGee and AMC appealed. (3) Ct. of App. applied the Rule 24(a) three part test (a) Interest: The court concluded the Dst. Ct. imposed a too narrow construction on this test by requiring a direct interest. All the rule requires is a "significantly protectable interest", that being in this case the ability to secure a license. (b) Impact: Yes, a decision would likely affect the interests of the movants, that is, their ability to secure a license. Though their own legal rights would not be affected by this action, the decision would have a practical effect on their rights through stare decisis, though theoretically there would be no res judicata. (c) Adequate representation: UNC is differently situated in that it has already secured a license from NMEIA. There would be a significant possibility that UNC in pursuit of its own interest would "sell out" the movants by reaching a settlement whereby their own license is protected but the prospects for others wishing to obtain licenses would be severely curtailed if not eliminated. (possibility of adverse settlement). - The burden to show any inadequacy of representation is on the intervener, but the showing is not difficult to satisfy. All you must show is something different is likely to happen in the absence of the movant that would likely be decisive. 3. Martin v. Wilkes a. The plaintiffs in this suit are white firefighters who are charging the defendants (City of Birmingham and the Jefferson Cty. Personnel Board along with intervener Martin petitioners (black firefighters)) with reverse discrimination in violation of Federal statute and the Constitution. The defendants answered by asserting that they had taken the discriminatory acts pursuant to consent decrees reached in 1981 calling for remedial schemes, hiring goals, and promotion goals. The trial court declined to dismiss the case as an impermissible collateral attack on a consent decree, but it allowed them to be used an affirmative defense. b. The 11th Cir. reversed, refusing to dismiss the suit as an impermissible collateral attack (rejected the doctrine). It held that the Martin plaintiffs were not parties to the earlier action, and they are not bound to those actions to which they were not parties. c. S.Ct action: (1) Petitioners argued that the Martin plaintiffs failed to intervene in time, and accordingly, they may not now collaterally attack the consent decrees. They should not be permitted to litigate an action against the consent decrees later by sitting on the sidelines and passing up a chance to intervene. They argued that the Martin plaintiffs met all three requirements of Rule 24(a) and therefore had a right to intervene. They argued failure to intervene had a preclusive effect on subsequent challenges. (2) The S.Ct. refuses to buy the "mandatory intervention" argument; all intervention is voluntary, and failure to intervene carries with it no preclusive effect. It holds up the principle that the legal rights of those persons not parties to an action are not affected by the outcome of the action. The court concludes that the mandatory joinder provisions of Rule 19(a) are the proper procedure to make a judgment or decree binding upon a person. The parties to a lawsuit presumably know better how it will affect the rights of other persons, so they would better know who should be joined into the lawsuit. Any difficulties that would be arise as a result of having the affected parties in the suit is not a result of mandatory intervention or joinder, but because of the broad sweeping nature of the relief they seek. Mandatory intervention would not make matters any less awkward. (c) Congress passed the CRA '91 in 1991, which included a provision intended to overrule this decision, at least with regard to Civil Rights cases. It requires that a would be challenger to a consent decree have had (1) Actual notice of the proposed judgment (from any source), and (2) A reasonable opportunity to present objection to such judgment or order, or (3) A persons whose interests were adequately represented in the first action. Otherwise, collateral attacks on consent decrees are prohibited. The statute gives some preclusive effect to failure to intervene. - Recall the Charlotte police case currently going on. This very statute is at the heart of the matter in that case (whether certain consent decrees that now have the effect of discriminating against white police officers should stand.) 4. Competing interests with regard to collateral attacks. a. Allowing collateral attacks increases litigations and lowers the possibility of a real FINAL judgment. Without a preclusive effect for failure to intervene, the possibility for endless litigation exists. b. On the other hand, barring collateral attacks risks binding persons not parties to the suit. 5. Supplemental jurisdiction: LOOK OUT for claims made by plaintiffs against those persons made parties to an action under Rule 24: NO SUPPLEMENTAL JURISDICTION!!!! D. Interpleader a. Interpleader is a device originally fashioned in equity as a means whereby a stakeholder who might be subject to double or multiple liability at the hands of several claimants. Using interpleader, the stakeholder pays the state to the court and forces any and all claimants to litigate any claims they may have on the stake in that forum and no where else. Today, the Federal court system recognizes interpleader under two different provisions: FRCP Rule 22 and Federal Interpleader Act. Both repeal the 4 conditions placed on equity interpleader, but each provision has different requirements for its use. (1) Subject matter jurisdiction (a) Rule 22: Complete diversity consisting of stakeholder on one side and claimants on the other is required. (b) FIA: Only minimal diversity, defined and diversity between claimants, is required. (2) Amount (a) Rule 22: $50,001 minimum (b) FIA: $500 minimum (3) Service of process (a) Rule 22: Court must have personal jurisdiction over the claimants (b) FIA: Nationwide service of process. (4) Venue (a) Rule 22: Residence of stakeholder or all claimants, or the place where the claim arose. (b) FIA: Residence of one or more of the claimants. (5) Injunctions (a) Rule 22: Statutory authority for injunctions (28 U.S.C. 2361). (b) FIA: Only basis is provision in 28 U.S.C. 2283 for stay "where necessary in aid of jurisdiction." b. State Farm v. Tashire (1) This case arose out of a head on collision between a Greyhound Bus and a truck driven by Ellis Clark in the northern part of CA. Four passengers (all citizens of OR) brought actions against Clark, Greyhound, and others in CA state court for damages in excess of $1,000,000. Before the cases went to trial, State Farm, Clark's insurer ($20,000 policy), filed a bill in the nature of an interpleader in Dst. Ct. on OR. - Paid the $20,000 to the court - Requested that all possible claimants to the fund come to the OR Dst. Ct. and duke it out there. (2) Subsequently, SF began to manipulate the proceedings. They obtained an order essentially requiring anyone with a claim against Clark to bring it in the OR Dst. Ct. (As his insurer, SF is required to provide him with a defense attorney at every trial to which he is a party. Thus, SF was faced with the daunting possibility it could be required to provide 4 dozen lawyers. Soon, the other defendants wised up and moved that any injunction barring actions against Clark outside OR Dst. Ct. be expanded to include them as well. (3) The S.Ct. holds that it is an abuse of the interpleader procedure to use it as an omnibus "bill of peace" to sweep all claims into one forum. Other devices, like the Multi-litigation panels, are set up to deal with such possibilities. SF can bring its interpleader bill in OR for the insurance fund and thereby limit claimants to it from filing action to collect on it in any court other than OR Dst. Ct., but it cannot swallow up all other litigants and claims into one proceeding with the interpleader device. Clark, Greyhound, et al. can still be sued wherever they are subject to SOP. (A pyhrric victory for SF- they could care less who gets the $20,000 fund, for once it is exhausted, they have an excuse for not paying subsequent claimants.) E. Class Actions: Rule 23 1. Rule 23 a. Rule 23(a): Prerequisites in order to sue or be sued as a class (all must be satisfied). (1) The class is so numerous that joinder of all members is impractical. (2) Commonality: There are common questions of law or fact within the class. (3) Typicality: The claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) Adequacy of representation: The representative parties will fairly and adequately protect the interests of the class. b. Rule 23(b): Class actions maintainable If all prerequisites are met, then (1) A class action can be maintained if not doing so would risk (a) Inconsistent or varying adjudications (b) Adjudications as to some members would be dispositive of the interests of other members. (2) If the party opposing the class has acted in such a way as to make final injunctive relief or declaratory relief as to the class appropriate. (3) Common questions of law or fact predominate over individual questions and the class action is the superior method to fairly and efficiently adjudicate the matter Pertinent matters (a) Interest of members in independently controlling the prosecution (b) The extent and nature of any litigation already commenced by or against members of the class (c) The desirability of consolidating all the litigation into one forum (d) Difficulties in managing the class action. c. Rule 23(c): Notice and class descriptions (1) Notice is required for class actions under Rule 23(b)(3). The court must direct to the members of the class the "best notice practicable" under the circumstances, INCLUDING (a) Individual notice to all members who can be identified through reasonable effort. (2) What must be in the notice (a) Exclusion upon request (opt out) (b) Judgment will be binding if member does not seek to opt out. (c) If member does not opt out, she may appear by counsel (3) See Rule 23(c)(3) for what is done with other class actions d. Rule 23(d): Court may issue orders in a class action, among other things, to require notice to class members during the conduction of the suit or even for those class actions that do not explicitly require notification ((b)(1) or (b)(2) class actions) : Rule 26(d)(2). (See the rule for other types of orders that can be issued.) 2. Adequacy of representation: Hansberry v. Lee a. The Hanberrys sought to challenge a racially restrictive covenant on their property that would have the effect of barring them from living there. The defendants claimed that the Hansberrys rights were bound by the case Burke v. Kleinman in which the plaintiffs as a class got the covenant upheld as valid. In that case, the defendants stipulated, albeit falsely, that 95% of the surrounding owners had signed on to the covenant when in reality only 54% had. Since the Hanberrys predecessors in title were members of the Burke plaintiff's class, the defendants argued that the Hanberrys were bound by that stipulation (plea of res judicata). The IL courts agreed with the Lee's and upheld the covenant. The Hansberrys claimed that making that decision binding upon them violated the DPC. b. The S.Ct. agreed with the Hansberrys. Though the court recognizes that members of a class may be bound by a class action to which they are not named parties under certain circumstances (4 conditions page 538), it also rejects Lee's argument that the class is defined as property owners under the covenant. The Court holds that it is wrong to lump those who want the agreement enforced and those who want it invalidated into 1 group and assume the interests of all were adequately represented. The court finds that the Hansberrys' interests were not adequately represented, and so the class action cannot bind them. c. If we take Hansberry literally, there will always be someone who is a member of a class who is not named and who has contrary interests. Will that person be bound by the class action? (taxpayer suits) The BOP will be on the party d. Suppose Burke were not a class action but was decided the same way. Since the Hansberrys' rights derived from their predecessors in title, and they were the plaintiffs in the Burke case. Accordingly, it seems like in that situation there would be res judicata, and the case would have to be dismissed. 3. Dalkon Shield Case a. Apx. 166 Dalcon shield cases were pending in the ND of CA. After a jury trial in one of the cases that lasted 9 weeks, the judge on his own motion moved to consolidate the cases as a class action for certain issues. (1) Nationwide class for punitive damages (Rule 23(b)(1)(B): dispositivity to other members of the class) (2) California liability class (Rule 23(b)(3): predominating question of law or fact) b. The plaintiffs vehemently opposed class certification. Why? (1) The plaintiffs' attorneys stand to lose much of their fees (and they are probably working under the contingent fee arrangement). In class actions, the court sets the fees and directs that the attorneys be paid out of the fund. But here, each of the claims is fairly substantial, so each lawyer stood to collect a rather hefty contingent fee. (2) Typically, the court will look to the attorneys representing the class and look for an experienced atty who is adequately representing the interests of the members of the class. But above all, the court must look to the interests of the members of the class and ascertain if they all would be adequately represented in a class action. The attorneys chosen by the court to represent the class in this case bowed out as soon as they were chosen. c. Nationwide punitive damages class: the Court applies the Rule 23(a) prerequisites (1) Joinder in this case would be impractical (Rule of thumb: 25+ parties and a court may want to look into a class action, especially if one of the parties is adequately representing the interests of the class. (2) Commonality: The question concerning what AHR knew about the safety of the IUD are not entirely common to all plaintiffs. Additionally, not all the jurisdictions apply the same standards for punitive damages (gross negligence vs. recklessness or wilful/wanton conduct.) (3) Typicality: No single plaintiff is typical of all plaintiffs in the putative class - Different injuries - Different defendants - Different legal theories. (4) Adequacy of representation: The Dst. Ct. designated a representative for the class, but he declined to serve. No one was willing to serve as class counsel. The right to choose one's own atty cannot be disregarded. So, prerequisites are not satisfied. d. California liability class (1) Rule 23(a) prerequisites (a) No commonality (different injuries and warnings) (b) No typicality (some plaintiffs had sued different defendants) (c) No adequacy of representation (no one wanted the job) (2) Rule 23(b)(3) problems (a) Predominance: Though there were common questions of law and facts, these did not outweigh the individual claims not common to the class. (b) Superiority: What would be gained by trying some issues as class actions while trying others individually would be insignificant and is insufficient to justify a class certification. Mass torts are usually not good candidates for class actions due to the multitude of claims, legal theories, questions, etc. 4. When assessing the feasibility of a class action, you must determine whether the goal is to cut costs by saving time or to add complexity and cost to the litigation. 5. Class actions involving large number of small claimants: The problem of notice Eisen v. Carlisle & Jacquelin a. Eisen sued Carlsile on behalf of all odd lot traders for violations of antitrust and securities laws (He charged that Carlisle and other brokerage firms had monopolized odd lot trading by setting the odd-lot differential at an excessively high level in violation of Federal antitrust laws and SEC regulations.) He sought damages and attorneys' fees. [This was probably a "strike suit", a suit that had the prospect to turning into a gold mine for the attorneys.] b. Eisen's own damages amounted to only apx $70, so he sought to sue on behalf of all odd lot traders. Eventually that group was restricted to odd lot traders who traded from 1962 to 1966. He sought certification under Rule 26(b)(3) (predominating common questions of law or fact/superior means of adjudication). c. Problem: Under Rule 26(c)(2), the court must direct to all members of a class represented under Rule 26(b)(3) the "best notice practicable, including individual notice to all members who can be identified through reasonable effort." That notice must include the three elements outlined in Rule 26(c)(2) (Opt out option, etc.) d. 2 million could be identified (direct notification) 4 million would be given constructive notice (through newspaper publication) For complete notification, the cost would be $225K plus publishing costs. Eisen was unwilling (and unable) to put up that kind of funding. e. The Dst. Ct. ruled that the DPC nor Rule 23 required such a massive cash outlay. The court thus proposed an alternative scheme. - Actual notice to banks and investment organizations - Actual notice to odd lot traders with 10 or more trades - 5000 other odd lot traders at random - Public notice to notify the remainder This scheme would have cut the costs by 90% f. Dst. Ct. analogized to preliminary injunction procedure and convened a hearing where Eisen demonstrated that he was likely to win. The court thus required the defendant brokerage firms to bear 90% of the costs of notice while requiring Eisen to bear the other 10%. g. [Strategic use of motion for notice in order to kill the lawsuit.] h. S.Ct. granted cert. to decide the notice question. Strangely, it focused on the statutory (rule) issues and did not consider the DPC questions this case raised. (1) Rule 23(c)(2) makes notice for class actions under Rule 23(b)(3) mandatory, NOT discretionary. (a) Improper to shift the costs of notice to the defendants. (b) No authority to conduct a hearing on the merits to decide who should bear the cost of notice. i. Policy issues pervade questions over notice. (1) Do we want individuals to be able to enforce antitrust & discrimination claims where awards per person are so small that it does not make sense for each member to bring her own suit? By reading the notice requirements so narrowly, individuals are discouraged from bringing meritorious actions because of the small damage award they would get. The S.Ct.'s decision tends to foreclose nationwide class actions for small individual claims and leave pursing such actions to governmental agencies. (2) Justice Powell could have come down on either side, and he came down on the restrictive side. (3) How one feels about what sort of notice should be required can translate into how one feels about class actions generally (permissive or restrictive) (4) Several states who have modeled their CRP's after the FRCP have refused to construe their Rules 23(c)(2) as narrowly as does the Federal judiciary construes Rule 26(c)(2). (5) The defendants in this case probably viewed this case as a strike suit, and so they probably pushed the literal interpretation for strategic reasons. IX. Discovery A. Discovery in the FRCP is governed under Rules 26-37 Overview of Discovery rules 1. Rule 26: General provisions governing discovery (a) Discovery methods (b) Discovery scope and limits (1) In General (2) Insurance agreements (3) Trial preparation: Materials [Atty work product] (4) Trial preparation: Experts (c) Protective orders (d) Sequence and Timing of discovery (e) Supplementation of Responses (f) Discovery conference (g) Signing of discovery requests, responses, and objections 2. Rule 27: Depositions before action or pending appeal (a) Before action (1) Petition (2) Notice and service (3) Order and examination (4) Use of deposition (b) Pending appeal (c) Perpetuation by action 3. Rule 28: Persons before whom depositions may be taken (a) Within the United States (b) In foreign countries (c) Disqualification for interest 4. Rule 29: Stipulations regarding discovery procedure 5. Rule 30: Depositions upon oral examination - This device may be used to obtain discovery from parties and nonparties alike. (a) When depositions may be taken - Deposition may be taken from any person by any party at any time. Leave of court is required only if plaintiff seeks to take a deposition within 30 days after SOP except leave is not required if defendant has noticed a deposition or sought discovery, or special notice is given in accordance with (b)(2) (b) Notice of examination: and other requirements (c) Examination and Cross-Examination; record of examination; oath; objections (d) Motion to terminate or limit examination (e) Submission to witness; changes; signing (witness must read and sign unless parties agree by stipulation to waive reading and signing.) (f) Certification and filing by officer; exhibits; copies; notice of filing (g) Failure to attend or serve subpoena; expenses 6. Rule 31: Depositions upon written questions - Can be used for a non-party witness- similar to interrogatories- used for remote witnesses (a) Serving questions; notice (b) Officer to take responses and prepare record (c) Notice of filing 7. Rule 32: Use of depositions in court proceeding (a) Use of depositions (b) Objections to admissibility (c) Effect of taking or using depositions (abrogated) (d) Effect of errors and irregularities in depositions (1) As to notice (2) As to disqualification of officer (3) As to taking of deposition (4) As to completion and return of deposition 8. Rule 33: Interrogatories to parties - Interrogatories can only be used to obtain discovery from parties to the suit. - Information you want the lawyer to answer (lawyer and client will confer on certain interrogatories to make sure they are phrased correctly). Requires investigation if the requested information is not within the lawyer's knowledge. - When answering interrogatories, be fair and straight forward, but don't say too much; don't give more than what is absolutely necessary to answer the question. Don't volunteer information. - NC limits the number of interrogatories that can be served to 50, and some Federal courts also limit the number of interrogatories. - Generally not required to supplement interrogatories, except for the names of witnesses. - You may object to an interrogatory - Privileged information - Work-product - Trade secrets - Irrelevancy and not calculated to lead to discovery of admissible evidence - Undue burden or hardship; annoyance; embarrassment - Serve objections to the other side- let them make the motion to require response if they so choose. (a) Availability; procedures for use (b) Scope; use at trial (c) Option to produce business records 9. Rule 34: Production of documents and things and entry upon land for inspection and other purposes - "Document" is broadly defined to mean virtually any recorded, hard copy, or graphic material. - Don't ask for too many documents; be specific in what you request, or you may find yourself buried in paper. Document management is a tough job. (a) Scope (b) Procedure (c) Persons not parties - A non party is not subject to comply with a Rule 34 request for documents, but a party may take the non-party's deposition and compel the non- party's presence with a subpoena duces tecum, which requires them to bring certain specified documents with them to the deposition. 10. Rule 35: Physical and mental examination of persons - This discovery device may be used against only parties to the lawsuit. (a) Order for examination (b) Report of examiner (examinations by agreement of the parties subject to Rule 35) 11. Rule 36: Requests for admission - This discovery device may only be used against parties to the lawsuit. - A kind of supplemental pleading - These are used to clean up certain issues, like the authenticity of documents. They usually are not used to discover any new information. - Requests for admission are effective for the current lawsuit only and have no binding effect on latter lawsuits. (a) Request for admission (b) Effect of admission (binding admission) 12. Rule 37: Failure to make or cooperate in discovery; sanctions (a) Motion for order compelling discovery (1) Appropriate court (2) Motion (3) Evasive or incomplete answer (4) Award of expenses of motion (b) Failure to comply with order (1) Sanctions by court in district where deposition is taken (2) Sanctions by court in which action is pending (c) Expenses on failure to admit (d) Failure of part to attend at own deposition or serve answers to interrogatories or respond to request for inspection (g) Failure to participate in the framing of discovery plan. B. Rule 26(b) 1. Rule 26(b)(1): a. Parties may seek and obtain discovery "regarding any matter not privileged, which is relevant to the subject matter involved in the pending action...It is not ground for objection that the information sought will be inadmissible at trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence." b. The court shall limit the use of discovery if (1) The discovery is unreasonably cumulative or duplicative, or can be obtained from a less costly, inconvenient, or burdensome source, or (2) Seeker has had ample opportunity to discover the information sought (3) The discovery sought is unduly burdensome or expenses given the needs of the case, amount in controversy, and the importance of the issues to be decided. 2. Blank v. Sullivan & Cromwell a. The plaintiffs were female lawyers who were denied jobs at the defendant law firm. They requested information concerning the defendant's partner promotion practices. Defendant objected that the requested information was irrelevant, and the court initially sided with the defendants. b. On reconsideration, the court held that the requested information was "relevant to the subject matter" of the dispute, and thus it fell under Rule 26(b)(1). The defendant's promotion practices could shed light on their hiring practices. After all, they are attempting to show pattern or practice, and so all the defendant's employment practices are subject to scrutiny. 3. Steffan v. Cheney a. Steffan was a midshipman at the naval academy who was forced out after admitting he was a homosexual. While suing the Navy to be readmitted, he refused to answer an interrogatory inquiring into any homosexual activity he may have engaged in while at the Naval Academy. The Navy countered that he was seeking reinstatement, and the information was relevant to any decision to reinstate him or not. b. The court disagreed. It held that if he was dismissed unlawfully from the Naval Academy, then in the eyes of the law he is still a member of the Navy; he would have not have been dismissed in the first place, so reinstatement would not be necessary. If he was right, then his discharge would be expunged. Accordingly, the information could not lead to the discovery of admissible evidence. 4. Can these two cases be reconciled? a. Blank seems to accept a broad notion of what is discoverable: anything relevant to the subject matter that might lead to the discovery of admissible evidence. b. Steffan is much more limited: Ct. limits discovery by disallowing inquiries into his homosexual behavior (irrelevant to question if he had been unlawfully discharged). Reinstatement not needed if he was unlawfully discharged. c. Distinguishing the cases (1) Blank: Clearly admissible evidence (alleging pattern or practice) (2) Steffan: Tied too closely to reinstatement, which was not at issue. 5. Privilege a. Privilege is a sphere of evidence law protecting certain communications as confidential, inadmissible, and undiscoverable. Persons may not be compelled to divulge privileged information Communications between - Lawyer-client - Doctor-patient - Priest-penitent - Self-incrimination 6. Privacy is NOT a privilege, but the courts may weigh relevancy with invasions into privacy. The court can declare certain invasions of privacy as unduly burdensome, annoying, or embarrassing; Protective orders can be issued to bar discovery of that area. 7. Considerations (1) Relative strengths and abilities of party of develop the information on its own (single person vs. corporation) 8. Two devices can be used to limit discoverable material/limiting the scope of discovery (a) Rule 26(b)(1): Relevancy to subject matter/calculated to lead to the discovery of admissible evidence. (b) Rule 26(c): Protective orders 9. In seeking information about a person's financial worth, the court will permit a limited inquiry (tax returns usually) 10. Insurance coverage is discoverable under Rule 26(b)(2). - Though this information is not admissible, the courts will allow its discovery if only to facilitate settlements. C. Privilege and self help: Rule 26(b)(3) 1. Pre-Rule 26(b)(3) Work-product doctrine: Hickman v. Taylor a. A tug sank, and its owners and underwriters immediately retained Fortenbaugh's law firm. Fortenbaugh took statements from the survivors in anticipation of trial. The plaintiff interrogatoried the defendant asking for - Written statements from interviews - Recollections from non-recorded interviews Defendant objected on grounds of atty-client privilege. The plaintiff was seeking to prepare himself for examining the witnesses. [It's always to have as many statements of a witness as you can. Does the witness tell the same story every time? If not, you can use a prior inconsistent statement to impeach a witness.] b. The court first finds that the plaintiff used the wrong procedure to obtain the materials. As a non-party, Fortenbaugh cannot himself be served with interrogatories or requests for the production of documents. The proper procedure would have been to take his deposition and serve him with a subpoena duces tecum (Rule 45) to bring certain documents with him to the deposition. [The documents were his and his alone, not his client's.] c. However, the court refused to deny discovery on those grounds, for it felt the plaintiff should not get the documents in the first place. - He can get the same information from other sources - By interviewing the survivors himself - By examining the public testimony before the Steamboat inspectors d. The attorney-client privilege does not extend to the attorney's own work- just to communications. e. However, the court is unwilling to allow discovery of the attorney's "work-product" without a showing of (1) Substantial need, and (2) Undue hardship if the materials are not discovered. f. The court above all is focusing on the principle that our system is an adversarial process and that legal parasitism is undesirable, as it tends to undermine the adversarial process. g. The underlying facts in the statements (or any work product) and the names of witnesses, even those obtained through considerable expense, are not protected by the doctrine, only the documents themselves. However, if the underlying facts are equally obtainable by both sides, you might be able to object. h. As far as the oral statements taken but not recorded by Fortenbaugh, they are likely to be fraught with his own impressions, theories, and interpretations. Accordingly, by allowing their discovery or even admission, the attorney would be transformed from his role as advocate to that of witness, a role attorney's wish to avoid. Counsel cannot be a witness because of ethical concerns. (Justice Jackson's concurrence: he would absolutely bar discovery of oral statements not recorded by the attorney for the above stated reasons. Reading this in light of the court's opinion, it seems clear that oral statements are absolutely protected from discovery). 2. Rule 26(b)(3)- Trial preparation materials: The codification of Hickman a. A party may obtain discovery of - documents - tangible things otherwise discoverable under (b)(1) and prepared in anticipation of trial by or for - another party, or - that other party's representative, including attorneys, consultants, surety agents, indemnificators, insurers, or other agents, ONLY upon showing of - Substantial need, and - Undue hardship would be incurred in obtaining the same materials through other means. - This first part goes beyond Hickman - Party's and attorney's agents's statements and reports are protected. - Mental impressions of investigators are also protected. [This creates an incentive to load up reports with mental impressions or conclusions so that if the reports are discovered, what the other side gets resembles a classified CIA document released to the public with portions deleted.] - Statements taken before litigation and trial but in preparation for it are protected. - Routine inspection reports not prepared for litigation or trial are not protected. *** Key touchstone: Was it prepared for trial or litigation? If so, it is protected. - Work-product may not be protected in Rule 11 proceedings, because the work-product is likely to be what is at issue. b. However, the mental impressions, conclusions, opinions, or legal theories of the attorney or other representatives are absolutely protected, and the court shall see to it that they are protected if discovery may be had. c. A party may obtain its own statement without the required showing d. Upon request, a non-party may obtain his statement on the subject matter without the required showing. D. Expert witnesses and discoverability: Rule 26(b)(4) 1. Broun's hypothetical: Medical malpractice case. Four doctors are consulted (1) Dr. A: Made the initial diagnosis and referral to you (2) Dr. B: Contacted as an expert witness- will be a great witness. (3) Dr. C: Retained, good opinion, but not a good witness; won't be called at trial (4) Dr. D: Consulted, but did not give you a favorable opinion 2. To what extent are the following discoverable with respect to each doctor? - Name - Reports (1) Dr. A (a) Name: As a fact witness, his name is freely discoverable. (b) Reports: As a fact witness, his reports are freely discoverable. - He may be deposed without leave of court, special showing, or payment for his time. (2) Dr. B (Falls under Rule 26(b)(4)(A) (a) Name: Her name and the substance of her planned testimony as well as the substance for the grounds for the opinions are discoverable through interrogatories (sub-sub-subsection (1)) (b) Reports: The substance of her testimony can be inquired into with interrogatories, and upon leave of court and a willingness to pay the expert for her time, the adverse party may take discovery by other means, like deposition: no special need be shown (Rule 26(b)(4)(A)(ii)) - This is how the adversarial process deals with experts: You may make inquiries into what the expert will testify about at trial without having to pay for the expert, but if you want to use the expert or seek discovery of the expert by other means, you must be willing to share the costs of retaining the expert. - In practice, attorneys usually don't seek payment of experts from the adverse party because all the costs will wash out since both sides are likely to depose each others' experts. - Attorneys will even resort to voluntary exchange of information in an informal setting when time is of the essence. (3) Dr. C (Falls under Rule 26(b)(4)(B)) (a) Name: Split of opinion as to whether her name is discoverable (1) Some courts hold that her name is work- product (Rule 26(b)(3)), since it took time and money to track down the expert, and additionally, what experts are consulted may tip off the other party as to the legal theories being played with by the other side. (2) Other courts hold that there is nothing in the rules that prohibits the discovery of their names. In the names of fact witnesses are discoverable, then so should the names of experts. Indeed, it may be impossible to make a motion under 26(b)(4)(B) unless you know the name of the expert whose opinion you seek to discover. (b) Reports: Discovery of facts or opinions held by her cannot be had except upon a showing of exceptional circumstances under which the party seeking discovery cannot obtain the same information, facts, or opinions by other means. - Coates argument: suppose you suspect "expert shopping" on the part of the other party. - Intersection of Rule 26(b)(4)(B) and Rule 35(b): report of a physical or mental exam 3. Schlagenhauf v. Holder a. Schlagenhauf was the driver of a Greyhound bus that collided with the rear end of a tractor-trailer. Party defendants in cross claims against Schlagenhauf and others alleged that he was mentally and physically incapable of safely operating the bus. The other party defendants moved under Rule 35 that Schlagenhauf, a party defendant, be required to submit to physical examinations from 4 different doctors from 4 different fields (internal medicine, ophthalmology, neurology, and psychiatry). The Dst. Ct. granted nine exams, and the App. Ct. affirmed by denying Schlagenhauf's writ of mandamus. b. Does Rule 35 apply to defendants? Schlagenhauf argues that Rule 35 applies only to plaintiffs and not to defendants. As a defendant, he is involuntarily in the suit while plaintiffs are "voluntarily" in the suit. However, the court rejects the "waiver" theory because plaintiffs are involuntarily injured, so both parties are involuntarily in the suit. Ct. argues that is too narrow an interpretation. Rule 35 requires that the examinee be a party of the suit: alignment is irrelevant. - Merely being an employee is insufficient to be under the "legal control" of the employer. "Legal control" envisions relationships like custody and conservatorship. c. Even if it applies to defendants, should it only apply to adverse parties? The Court also rejects this argument, since a contrary holding would spawn an unnecessary proliferation of cross claims, counterclaims, etc. d. Even if it applies to non-adverse parties as well, there has been no showing of "in controversy" or "good cause" (BOTH are required under Rule 35. Ct. agrees, and remands the case for reconsideration of the eye exam question. Some of the movants only made vague, conclusory allegations that Schlagenhauf was mentally and physically unfit for duty. The only specific allegation anyone made was that his vision was impaired. e. The court ends up weighing need of an examination of the defendant with the defendant's privacy. Additionally, there are relevancy problems with regard to the exams. E. Sanctions: Rule 37(a)(4)-(g) 1. Ordinarily, discovery proceeds without problems. There are extra-legal motives and forces that act to keep discovery moving smoothly. a. Agreement by the parties b. Sense of community among lawyers: attorneys who have to practice with one another, especially those who practice in smaller communities, are reluctant to rub their opponents the wrong way for fear of jeopardizing working relationships with opposing counsel in later lawsuits. However, in larger areas where lawyers may never encounter each other again, the temptation to abuse discovery is ever present (Refac) c. In the Federal courts, a judge is assigned to a case, and she oversees the case from beginning to end. However, in state courts, the judge who eventually tries the case usually does not deal with the case before jury selection, and she usually is not involved in discovery. Except for medical malpractice cases, there is usually no discovery conference either. 2. Occasionally, you will have problems a. If your opponent objects to an interrogatory on what you believe are insufficient grounds, you must move to compel discovery under Rule 37(a). Theoretically, you could collect attorney's fees after winning on a motion to compel discovery, but usually judges do not interfere. (The potential awards include attorney's fees and severe sanctions should they be warranted.) b. Refac v. Hitatchi (1) Refac was a "litigation mill" in the business of purchasing the rights to pursue violators of copyrights owned by other parties. In a previous lawsuit, Refac's activities were adjudged to be "champertous". Their avowed policy was to use the cost of the litigation process in order to extract settlement on terms favorable to them. In this case, Refac has filed patent infringement actions against 118 original defendants, some of whom owned licenses from Refac, charging infringement on 2 LCD patents owned by Refac. They contended that the sale of any LCD product violated their patent rights. When opposing parties interrogatoried Refac to find out more about the exact nature of Refac's claim against them (What products were charged and what parts of those products were charged), Refac began stonewalling by not answering interrogatories. The opposing parties eventually had to move to compel discovery, and they obtained an order compelling discovery. Refac continued to give evasive and incomplete answers, prompting their opponents to move to dismiss under Rules 11 and 37. The magistrate concluded that Refac had "deliberately and knowingly" failed to comply with the order compelling discovery, and it recommended the suit be dismissed with prejudice and he also awarded sanctions under Rule 37(a)(4) and suggested that the court look into Rule 11 sanctions. However, the court declined to award Rule 11 sanctions, but it did dismiss Refac's action without prejudice and entered a judgment of non-infringement for the defendants. (2) Refac appealed the District Court's ruling, and defendants cross-appealed for Rule 11 sanctions. The Ct. of App. upheld the imposition of Rule 37 sanctions in light of Refac's bad faith and repeated non-compliance with the Dst. Ct's discovery orders. It found that the Dst. Ct. had considered lesser sanctions and properly concluded that more severe sanctions were warranted. The court also awarded defendants costs for Refac's frivolous appeal under Fed. R. App. P. Rule 38. Lastly, court also ruled that once a Rule 11 violation has been established, sanctions are mandatory. Refac sued their own licensees...a red flag indicating a probably violation of Rule 11. Rule 11 sanctions can be awarded for costs proximate to the entire lawsuit, not just for failure to comply with discovery. c. Pressey v. Patterson (1) Plaintiff was shot and killed by a Houston Police officer while driving through a scene of a traffic accident. The officer and his partner then tried to cover the shooting up. The survivors of the plaintiff sue a Houston police officer and the Houston Police Department under 1983. The plaintiff sought discovery of a taped interview of an IAD sergeant (Reiser) concerning the interworkings of IAD. The defendants responded that the tape had been destroyed through normal reuse, but in reality Reiser had burned the tapes. Upon learning the true fate of the tapes through Reiser's deposition, the plaintiffs moved for Rule 37(b) sanctions. The court ordered the defendants' answer struck (the proverbial "death penalty" in civil litigation.) and entered a default judgment against the HPD. The court then held a trial on damages, and the plaintiff won an award of $6.7 million. (2) On appeal, the Ct. of App. reviewed the Dst. Ct's actions for abuse of discretion and found it. Since there was no showing of bad faith or wilful misconduct, the court concluded that it was an abuse of discretion to strike the defendants' answer. The sanction was too severe given the nature of the violation. Reiser allegedly destroyed the tapes while cleaning out his office. It concluded that since the tape was of an interview for a newspaper, and the newspaper printed excerpts of the interview, it was a reasonable to assume the newspaper would print anything that was damaging to the IAD. Also, it is possible that the City did honestly misunderstand Reiser when he reported that the tapes had been "destroyed". Additionally, the court argued that Reiser had nothing to gain from destroying the tapes since the newspaper reporter had his own copy. On remand, the App. Ct. ordered the Dst. Ct. to consider other possible sanctions, for instance, deeming the newspaper report admitted because of the City's negligence in responding to the request for discovery. (3) This all seems rather bogus. The City in all probability has lied in this matter, but the 5th circuit goes easy on them. Why? - No prejudice to plaintiff - 5th Circuit is strange - Subsidiary evidence that was not central to the case. - A defendant abusing discovery and not a plaintiff, as in Refac. Arguably, the defenses attorneys are not responsible for the City's mismanagement, while Refac's attorneys were probably at the core of the mismanagement of its case. If the City's lead counsel had been involved the court might have come down hard. (Courts are tough on civil rights actions/ X. Summary judgment: Rule 56 A. Summary judgment is a form of disposition of a case without trial. 1. Rule 56(a): A claimant may move for summary judgment at any time after 20 days from commencement of the action or after service of a motion for summary judgment by the adverse party. The claimant may move with or without supporting affidavits. 2. Rule 56(b): A defendant may move for summary judgment with or without supporting affidavits. [The defendant need not answer first.] 3. Rule 56(c): "The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. " 4. Rule 56(d): The court shall make provisions for trying those issues of material fact not disposed of in summary judgment. 5. Rule 56(e): Affidavits shall be made from personal knowledge, and "shall set forth such facts as would be admissible in evidence..." An adverse party to a motion for summary judgment may not merely rest on the allegations or denials in the pleadings, but must instead point out specific facts by affidavits or other means (like discovery) which show that there is a genuine issue for trial. [Respond or face summary judgment.] 6. Rule 56(e): If affidavits from the adverse party are unavailable, the court may either deny summary judgment or delay a determination until affidavits are available or other discovery made. B. The kinds of issues that warrant/do not warrant summary judgment 1. Plain mistake as to the party sued (plaintiff miscopied the license plate number after an accident.) The defendant would move for summary judgment and file an affidavit swearing that she was not at the scene. The plaintiff would then set forth facts tending to show an issue of material fact (affidavits, depositions, interrogatories, requests for admission.) 2. Issues over negligence and other issues normally determined by juries, are generally speaking not ripe for summary judgment. It is unusual for courts to grant summary judgment on negligence issues. Courts are more willing to grant summary judgment when the non-moving party has the burden of proof. C. What sort of submission is required by an adverse party in order to avoid summary judgment?: Celotex v. Catrett 1. This was a wrongful death action against a manufacturer of asbestos products. The plaintiff claims her husband was exposed to the defendant's products and developed cancer from that exposure. The defendant moved for summary judgment pointing to affidavits and charging that there was no evidence that the plaintiff's husband had been exposed to any of the defendant's products. The plaintiff submitted three documents (dead man's deposition, a letter from former employer whom the petitioner planned on calling at trial, and a letter from an insurance company. All the documents tended to show that the decedent had been exposed to the defendant's products in Chicago.) However, the district court granted summary judgment. 2. The S.Ct. rules that the defendant is not required to eliminate all possible avenues of plaintiff's attack. All that the defendant is required to do is make a "showing" that there is a lack of evidence to support the nonmoving party's case. The plaintiff had submitted a letter from the decedent's former employer identifying the products and attesting that the decedent had been exposed to them. 3. [The Dst. Ct. could have continued the motion for summary judgment by requiring that the plaintiff obtain affidavits instead of merely relying on these letters.] 4. The both the Court and the dissenters hold that the moving party need not show that there is an absence of any genuine issue of material fact, but merely that there is an absence of evidence which will support the nonmoving party's case. 5. The Court and the dissenters part company on what exactly the nonmoving party must submit in order to avoid summary judgment. Rehnquist and the Court: they hold that the nonmoving party with the burden of proof at trial must establish relevant evidence in the record, and the mere prospect of admissible evidence is insufficient to avoid summary judgment. Rehnquist would put the burden on the party with the burden of proof at trial to put the evidence into an admissible form. Dissenters: The minority believes that the prospect of a supporting witness at trial might sufficient to avoid summary judgment. - The burden on the party with the BOP at trial is small; he need only produce some evidence to refute the defendant's motion for summary judgment. How much is a matter of contention between the majority and the dissenters. 6. Addicks: If the moving party does not have the burden of proof at trial, then the moving party must show that the adverse party could not make out their case at trial. 7. Significance of the burdens of proof at trial in a summary judgment motion: a. Liberty Lobby case (Liberty Lobby was a group that handed out hate literature.) They sued a guy for libel, and the defendant moved for summary judgment. (Plaintiff could not show malice by "clear and convincing evidence"- the required burden of proof under Federal libel law. The court ruled that the plaintiff might have had enough evidence to win by a preponderance of the evidence, but not enough to win by clear and convincing evidence. (Impact of the plaintiff's BOP at trial) b. Once the defendant has made the required showing at a motion for summary judgment, the burden then shifts to the plaintiff to show that he has enough evidence to meet his required burden of proof. c. Negligence per se might fetch summary judgment under some circumstances. 8. Visser v. Packer Engineering: a. ADEA case. Visser (64) was fired from Packer Engineering 9 months before his pension rights would have vested after refusing to swear allegiance to Packer after a long and bitter battle involving allegations that Packer had been siphoning off money from the company. Visser sued under the ADEA charging age discrimination. b. Defendant moved for summary judgment, asserting that the plaintiff could not prove that age or pension costs were a substantial factor in the termination decision. c. Burden shifts to plaintiff to show discriminatory motive. (Under Celotex, that evidence must be in an admissible form.) Plaintiff submitted three affidavits from three former coworkers that stated that Packer fired Visser because of his age and pension costs. d. Once the plaintiff makes his showing, then the burden shifts back to the plaintiff to show a predominating non-discriminatory motive. e. App. Ct. (1) Affidavits did not present evidence from personal knowledge. They were too speculative, conclusory, [and down right self-serving.] (2) No primary facts from which a reasonable person could infer discriminatory motive, In fact, the evidence tends to suggest that age was not a motive. He apparently was fired for disloyalty (not actionable). (3) The plaintiff seems to be trying to argue bad conduct from bad character in violation of the Federal Rules of Evidence. f. Judge Flaum's dissent (1) ADEA grants a right to trial on any issue of fact. Enough evidence has been presented to get to the jury, and so an evaluation of packer's motives was in order. g. Judge Bauer's dissent (1) You're too fast! Let Visser's case get to the jury. h. This case again raises a clash of philosophies: How much evidence should be required in order to avoid summary judgment? (1) Judge Posner: an imperial judge who likes to pre- judge a case and forecast how it is likely to come out and making his decisions accordingly. (2) Judge Flaum: a populist judge who tends to let cases go to the jury.