OUTLINE FOR CIVIL PROCEDURE II: Prepared by J. William Snyder, Jr. Term: Spring 1993 Text: Yeazell, Landers, & Martin, Civil Procedure (3d ed. 1992). Instructor: Professor Gibson 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. Pretrial conference: Rule 16 A. Rule 16 - With the prodding of Congress, this rule expedites cases. - This rule also raises questions about how much of a role should the judge play in case management. Some judges take an active role in case management, but others do not. 1. Rule 16(a): The court has the discretion to require the attorneys for the parties and any unrepresented parties to appear before it for a conference or conferences prior to trial for one or more of the following purposes. (a) Expediting the disposition of the action (b) Establishing early and continuing control so that the case will not become protracted for want of management. (c) Discouraging wasteful pretrial activities (d) Improving the quality of trial through more thorough preparation, and (e) Facilitating settlement of the case. 2. Rule 16(b): The judge shall enter an order after a scheduling conference limiting the time for (a) Joinder of parties and amendments to the pleadings (b) To file and hear motions, and (c) To complete discovery The judge may also include in the order (d) Date or dates for pretrial conferences, the final pretrial conference, and trial, and (e) Any other matters appropriate to the circumstances of the case. 3. Rule 16(c): These subjects may be discussed at the pretrial conference: (a) The formulation and simplification of the issues, including the elimination of frivolous claims or defenses. (b) The necessity or desirability of amendments to the pleadings. (c) The possibility of obtaining admissions of fact and of documents which avoid unnecessary proof, stipulations of authenticity...and advance rulings on admissibility of evidence. (d) Identification of witnesses and documents, exchange of any pretrial briefs, and dates for further pretrial conferences. (e) The possibility of settlement or alternative dispute resolution. (f) The form and substance of the pretrial order. (g) The disposition of pending motions. (h) Special procedures for complex or unusual cases. (i) And other matters which may facilitate disposition of the action. 4. Rule 16(d): Final pretrial conference 5. Rule 16(e): Pretrial orders 6. Rule 16(f): Sanctions. If the party or party's attorney fails to obey a scheduling or pretrial order, fails to appear at a scheduling or pretrial conference, if the party or attorney is substantially unprepared to participate, or fails to participate in good faith, then the court may at its discretion impose sanctions as justice requires. B. Two goals of the pretrial conference: 1. Move the case to trial in an orderly and timely fashion 2. Trying to resolve the lawsuit without trial C. Main functions 1. Scheduling and deadlines for (a) Joinder of parties and amendments (b) Filing of other motions (c) Deadlines for discovery (d) In the E.D.N.C, the court set firm dates for trial. While this policy can help move things along to trial, is this policy too rigid? 2. Trying to settle the case: Should this function be left to the attorneys, or should the court take a more active role in settlement? This is a controversial area of the law. [Does the judge essentially prejudge the case by taking affirmative steps to settle it?] (a) Ways of encouraging settlement: Lockhart v. Patel (1) This case was a medical malpractice action by a teenager who lost sight in one eye as a result of the defendant doctor's negligence (allegedly). The court conducted a summary jury trial, and the jury returned a verdict for the plaintiff for $200K. After the SJT, the court held several formal and informal conferences with the parties and their attorneys. The attorney for the defendant doctor's insurance company indicated at one of these conferences that he had been authorized to settle for $125K, but the plaintiff continued to hold out for $175K. The judge then directed the attorney to attend a settlement conference and further ordered him to bring someone from the home office with authority to negotiate. On the appointed day, the company sent an adjuster from the local office who had been ordered to go no higher than $125K (and not to call back if he could not settle for that amount). The judge responded to this affront by striking the pleadings of the defendant and held him in default. The insurance company promptly settled for $175 and sent several officers from the home office to a subsequent hearing to apologize and explain their failure to appear was a result of a misunderstanding. They were absolved of the contempt charges. (2) Question: What authority does the court have to hold meaningful settlement conferences? (3) Clear authority of the court to hold conferences and compel the attendance of attorneys, parties, and their insurers [, but Rule 16(a) explicitly covers attorneys and unrepresented parties only]. Rule 16(f) would have no meaning if it was not read to include the parties' insurers. [A literal reading of Rule 16(f) indicates the judge had no authority to do what he did.] (4) Unless those with the power and authority to negotiate a settlement are present, the conference will not be productive. (5) References to the docket pressures on Federal District Courts. (6) "The exigencies of modern dockets demand the adoption of novel and imaginative means... [including] compulsory arbitration, summary jury trials, imposing reasonable limits on trial time, or, as here, the relatively innocuous device of requiring a settlement conference attended by clients as well as the attorneys." The court cannot order a settlement, but it can require the parties to use the good offices of the court to at least discuss settlement in good faith. (7) Pending amendments to Rule 16 would change the rule to include specific references to parties and their insurers. (8) This opinion was written after all action in the case had ceased. Accordingly, its status as precedent is dubious at best. 3. Hypothetical on page 686 1. No, she has not gone too far at that point. 2.- You risk angering the judge by refusing to settle for the suggested amount - Does the judge prejudice the case by expressing an opinion as to the worth of the case? 4. Preparing the case for trial a. Final pretrial conference and pretrial orders (1) Final pretrial conference (a) The court will require the presence of the lawyers who will try the suit (and any unrepresented parties). (b) Some courts will require them to make proposals at the conference, mapping out what evidence will be introduced at trial. The court may also require that certain motions be made at that time if they are to be made at all. (2) Pretrial order (1) After the pretrial conference, the court will promulgate a pretrial order prescribing the course of the trial (Factual disputes, legal theories, witnesses, evidence, etc). Deviation from this order is not permitted, and altering the order is rarely permitted. (2) The standard for modifying the pretrial order is "manifest injustice" unless the order is modified (Rule 16(e)). This is a much tougher standard than that for amendments to the pleadings. - McKey v. Fairburn (a) This case was an action for negligence against the plaintiff's landlord. Dampness on the floor from a roof leak resulted in the plaintiff's deceased slipping and falling on the floor, causing injury. The landlord had been notified of the dampness and had promised to correct the problem; they had not done so. (b) The plaintiff's first theory was simple negligence (duty of care under the lease, and a breach of that duty). At the pretrial conference, the plaintiff indicated this was her sole theory of negligence. At trial, plaintiff moved to amend the pretrial order to permit her to introduce sections from the DC Housing Regulations requiring landlords to repair leaky roofs (negligence per se). The judge denied the motion and directed a verdict for the defendants. (c) On appeal, the court noted that the pre-trial statement made no reference to the code. [So, the defendant would have been prejudiced at this late state in the case by having to defend against a novel legal theory.] [Since the standard for amending the pretrial order is "manifest injustice"], it was within the court's discretion to deny the motion for the amendment. (d) [The court also concluded that since the plaintiff's deceased knew the floor was wet when she walked on it, she was contributorily negligent as a matter of law and would have lost anyway.] (e) The dissenter would have cut the plaintiff a break for her attorney's inadvertence. A continuance could have been granted to permit the defendant to prepare a defense to the net legal theory. II. Trial process: The case has not settled or otherwise disposed of, so it goes to trial A. Determining the trier of fact: Judge or Jury? 1. U.S. Const Amend. 7 In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any Court of the United States, than according to the rules of the common law. a. The 7th Amendment has not been incorporated and made applicable to the states via the DPC of the 14th Amendment. It applies only to the Federal government. b. For the most part, facts as found by a jury must be accepted. c. Suits at common law: This has been interpreted to mean legal actions and remedies as opposed to equitable actions and remedies. d. Preserved: The framers believed that a right to trial by jury existed in the common law courts prior to 1791, but not in courts of equity (Chancery). Accordingly, this amendment purports to "preserve" those rights they believed already existed at the time. This interpretation has spawned the Historical Test for determining whether or not the parties in an action are entitled to a jury trial. e. The Historical Test: What jury trial rights existed in 1791 with regards to this action? (1) If the action could have been brought and adjudicated in an English CL court, then the parties had a right to a jury trial. (2) If the action could only be brought in a court of equity (Chancery), then the parties had no right to a jury trial. f. The S.Ct. loves the 7th Amendment: they have upheld it in the face of recalcitrant Dst. Cts. g. Problems: Page 703 (1) Plaintiff and defendant sign a contract (a) Plaintiff sues for breach and asks for money damages: This is clearly an action at law, so parties are entitled to a jury trial. (b) Plaintiff sues for breach and asks for a decree of specific performance: Specific performance is an equitable remedy, so no right to a jury trial exists. (c) Plaintiff seeks to have the contract reformed to read "$200,000" instead of "$100,000": Reformation is an equitable remedy, so no right to a jury trial. (d) Plaintiff charges that defendant tricked her into signing by fraud, so she seeks to have the agreement rescinded: Rescission is an equitable remedy, so no jury trial rights. (2) Plaintiff and defendant own adjoining real property. Plaintiff charges that defendant is committing a nuisance on the defendant's land. (a) Plaintiff seeks damages caused by the nuisance: A legal remedy, so jury trial rights exist. (b) Plaintiff seeks an injunction against the defendant: Injunctions are a form of equitable relief, so no trial by jury exists. (3) Plaintiff alleges Defendant took his diamond ring. (a) Plaintiff seeks to recover its value: At CL, this action was known as "trover", and it had an accompanying writ. So, right to jury trial exists (b) Plaintiff seeks to have the ring returned: At CL, this action was known as "replevin", and it too had an accompanying writ. So, parties are entitled to a jury trial. (4) Plaintiff charges defendant wrongfully entered and occupied Blackacre. (a) Plaintiff seeks money damages: Legal remedy, so jury trial rights exist. (b) Plaintiff seeks to have the defendant ejected: This action had a corresponding writ known as a "writ of ejectment", making it a legal action, so jury trial rights exist. h. Chauffers v. Terry (1) Plaintiff workers had three grievances with their company over layoffs and loss of seniority. Their union (The Teamsters) prosecuted the first two grievances but refused to prosecute the third grievance. The workers the sued the company for breach of the collective bargaining agreement and the union for breach of its duty of fair representation. They sought relief in the form of backpay. The employer declared bankruptcy and the claim against it was dropped. (2) Plaintiffs demanded a jury trial, but the district court denied it. Terry respondents appealed. (3) The Historical test: To determine whether or not the parties are entitled to a jury trial, the court must examine both the (a) Nature of the issues raised, and (b) The remedy sought. The statutory action is compared to actions that could be brought in 1791 and adjudged either legal or equitable based on the closest analogy. The remedy is then compared to those available in the law and equity courts of 1791 and adjudged either legal or equitable. (4) Since collective bargaining was illegal at common law, and breach of the duty of fair representation did not exist at common law, an analogous action must be found. NO member of the court holds that the action had to have actually existed at common law in order to get a trial by jury- they refuse to read the 7th Amendment that narrowly. a. Defendant's arguments (1) Similar to an action to set aside an arbitration award, an equitable action. However, since no arbitration was effected in this case, this analogy does not apply. (2) Defendant also argues that this action is similar to an action by a trust beneficiary against the trustee for breach of fiduciary duty. The Marshall bloc is impressed with this analogy, since " a union, as the exclusive representative of the workers, must exercise its power to act on behalf of the employees in good faith." b. Plaintiff argues that the present action is more similar to an action for attorney malpractice, an action at law. However, the court believes that since clients retain a fair amount of power of their attorney's actions as well as the right to fire their attorney, the court feels this analogy does not quite capture the employee-union relationship as well as the beneficiary- trustee relationship does. c. However, the court still refuses to construe the action as wholly equitable. It chooses to examine the nature of the issues to be tried rather than the character of the overall suit. They hold that since Terry respondents must prove that the company violated 301 (breach of the collective bargaining agreement), that gives the action a legal character. Accordingly, the first prong is a wash as far is whether or not the action is legal or equitable. (5) The second (and more important) prong of the Historical Test calls for the court to examine the nature of the remedy sought. Respondents seek relief in the form or backpay (money damages), but not all awards of money damages are legal remedies. Monetary damages that are restitutionary in character are equitable remedies. But the backpay sought is not money wrongfully held by the union but money the respondents would have earned had their grievances been decided in their favor, so such an award could not be restitutionary. Monetary award coupled with injunctive relief may be equitable, but the respondents seek no injunctive relief. Petitioners argue that under Title VII backpay is deemed an equitable remedy. That may be so under Title VII, as the court has determined such an award of backpay to be restitutionary, but the award of backpay here is different than the award of backpay would be in this case. So, the nature of the remedy sought is essentially legal. (6) Accordingly the Historical Test indicates the nature of the case is legal, so plaintiffs have a right to a jury trial. (7) Brennan's concurrence: Junk the first prong of the Historical Test and look only at the nature of the remedy sought in making the determination of whether or not a right to a trial by jury exists. (8) Stevens's concurrence: Impressed with the attorney malpractice analogy and argues that it is closer to the worker-union relationship than the beneficiary-trustee relationship. (9) Kennedy's dissent: Since the nature of the action resembles an action by a beneficiary against a trustee, a historically equitable action, that determination is dispositive for the rest of the analysis; this action is equitable, so no right to trial by jury exists. i. No constitutional right to a bench trial exists under the 7th Amendment, even in equitable proceedings. 2. Congressional control over jury trial rights a. Augmenting jury trial rights (1) We can avoid 7th Amendment analysis when Congress by statute enacts a right to a trial by jury in certain actions. Congress is free to augment 7th Amendment rights by statute, but it is not free to derogate 7th Amendment rights in the same fashion. (2) Hypotheticals on page 714 (a) Congress authorizes a jury trial for injunctive relief: Yes, Congress is free to do this by statute. (b) No, Congress cannot derogate 7th Amendment jury rights. Such a law would be unconstitutional. (c) When a statute is silent, we must look to the 7th Amendment for guidance. b. Removing jury trial rights (1) Congress may only do so when public rights are being adjudicated. Congress may assign adjudication of claims involving these rights to an administrative agency whose tribunals sit without juries if a jury trial is incompatible with those proceedings. (2) Atlas Roofing v. OSHA (a) The Secretary of Labor cited Atlas for "a major violation" and fined it $600. Atlas challenged the ruling, and the case went before an OSHA ALJ (administrative law judge; a non-Article III judge) who upheld the fine. Atlas appealed to the full OSHA review board and into the Ct. of App. to no avail. Atlas finally demands a jury trial, but the demand is denied. Atlas then proceeds to challenge the statutory scheme on constitutional grounds as violative of the 7th Amendment. (b) The S.Ct. rules against Atlas and upholds the statutory scheme. Congress may create new "public rights" and assign their adjudication to administrative agencies and other non-Article III tribunals that need not respect the 7th Amendment. (c) Limits (1) Must be a "public right": Rights and obligations that "arise between the Government and persons subject to its authority in connection with the performance of the constitutional functions of the executive or legislative departments." NOT: (A) Constitutional rights (B) Private rights (tort, contract, etc.) (d) Atlas test: is the government a party? Is this wise? The right to a jury trial was preserved to keep government from running roughshod over our rights. (e) ALJ's are not Article III judges - No lifetime tenure - No salary protection (3) Granfinanciera v. Nordberg (a) Nordberg is a bankruptcy trustee who brings an action to recover assets fraudulently conveyed to Granfinanciera from the debtor's estate. Prior to 1978, Nordberg would have had to bring this case in Federal District Court where a jury trial could be demanded, as this was a legal cause of action. After 1978, Congress placed this action under the jurisdiction of a Bankruptcy judge (another non-Article III judge who serves for 14 years and has no salary protection.) The implication was that no jury trial could then be given. The assumption was that jury trials were incompatible with Bankruptcy. (b) Drawing from Atlas, the court treats Bankruptcy court like an administrative agency that adjudicates public rights. However, they hold that since a private right is being adjudicated, a jury trial may be demanded. A jury trial, it decides, is not incompatible with the bankruptcy scheme. (c) The court focuses on private vs. public rights in determining whether or not there is a right to a jury trial. Outside the holding of Atlas Roofing, rights to a jury trial cannot be abrogated by statute. But, if the subject matter of the case is not intertwined with a federal public regulatory scheme, or the suit is not against the US government, then the controversy must be adjudicated by an Article III judge, and jury trial rights may not be denied. (For a public right to exist, the government need not always be a party. (4) Hypothetical: P v. D: considerations as to whether or not a right to a jury trial exists. (a) Statutory right to jury trial (b) Legal or equitable claim (7th Amendment as interpreted using the historical test). (1) Type of action (legal or equitable) (2) Remedy sought (legal or equitable) (c) Public or private tight determination is not necessary if Congress has not given jurisdiction over the claim to a non- Article III tribunal. (d) Administrative agency (forums in which jury trials are usually inconsistent with the underlying purpose of delegating responsibility to an administrative agency.) (1) Is the right to be adjudicated a private or public right? (in other words, did Congress have the authority to remove jurisdiction to a non-Article III tribunal?) (2) If the right is private, then is it a legal or equitable right? (e) Subpart of a Federal court presided over by a non-Article III judge (1) Bankruptcy judges (2) Magistrates 3. Mixed claims: Mixed COA's and mixed claims for relief- the Beacon problem a. Equity clean up rule: Beacon Theatres v. Westover (1) This is a mandamus action to order a Federal District judge to grant a party a jury trial. (Mandamus is an extraordinary remedy, but the Federal courts consider jury trial rights to be so fundamental as to warrant use of mandamus when the right must be granted.) (2) Fox sues Beacon Theatres, seeking a Dec. Judgment that what Beacon is doing to force Fox out of the market is in violation of Federal Antitrust laws. He also seeks injunctive relief against lawsuits by Beacon and threats by Beacon to buy them. Beacon counterclaims and sought treble damages. Beacon has demanded a jury trial. (3) The district court rules that the issues in the case are largely equitable (The common issue to both the claim and the counterclaim is the reasonableness of the clearances granting Beacon the sole right to show first run movies in the area.) The judge is to be the trier of fact for the equitable issues, and the equitable issues were to be tried first. Then a jury trial would follow if Fox loses. However, a jury would not be able to reconsider reasonableness issues on grounds of res judicata and collateral estoppel (4) Beacon is not happy and feels deprived of its right to a jury trial as to the issue of the reasonableness of the clearances. (5) Applying the Historical test, Fox would have had to go into a court of equity in order to obtain injunctive relief. Beacon would have had to have gone into a court of law and sought money damages. (6) Old Equity rule (Equity clean up rule): in 1791, equity would not have had to dismiss the case for lack of subject matter jurisdiction even though a legal remedy was available. Equity could enjoin the legal proceedings and decide the entire lawsuit itself, even if there was an overlap. The District Court was persuaded by this rule. (7) Procedure and rights have changed since the time when that old equity rule prevailed. (a) Dec. Judgment action was not available in 1791. (The DJA preserves jury trial rights for legal claims, but not for equitable claims). (b) The FRCP merged law and equity, and they expanded legal rights and their adequacy. (8) The S.Ct. grants mandamus (a) The court can grant a preliminary injunction against Beacon's harassment and threats of lawsuits as well as the bringing of other lawsuits. (b) There is no need for equity to go first. (c) The judge does have the power to structure trial and order of issue presentation, but where a litigant has a right to have a common issue tried to a jury, the judge's discretion is curtailed and jury trial must be held first. (1) Preliminary injunction pending the lawsuit (2) Jury trial is to be held first on the issue of reasonableness. (3) The judge will decide whatever is left. b. Problems on page 729. 2a. All equitable b. All equitable c. Beacon problem: If a common issues is at stake in both demands for legal and equitable relief, then a jury trial must be held first. d. Answer is not clear. c. The equity clean up rule is under attack and may be defunct under current S.Ct. rulings. (1) Dairy Queen v. Wood (a) Plaintiff was the owner of the Dairy Queen Trademark. Plaintiff licensed Defendant to use the trademark in exchange for payment. Defendant defaulted, so plaintiff terminated the contract and cancelled defendant's right to use the DQ name Plaintiff then sued seeking relief. (1) Temporary & permanent injunctions (2) Accounting to determine how much D owed P (3) Injunction preventing D from collecting money under the DQ name. (b) D demanded a jury trial, but the Dst. Ct. struck the demand, calling the action "purely equitable" and deeming the legal issues "incidental". (c) 7th Amendment analysis: P and Dst.Ct. argue that the character of the suit is entirely equitable. Accounting was an equitable remedy because it required inspection of the defendant's ledgers and books. Such a task was too much for the law courts. Now, the FRCP provides for the appointment of special masters to handle such tasks. The masters will investigate and assist the jury in the fact finding process. (this has the effect of turning a formerly equitable remedy into a legal remedy) Accordingly, P is really only after money damages. (d) Try the legal issues first (overlapping factual disputes) to a jury, then try the equitable issues to the court. 4. Rule 38: Jury trials of right a. Rule 38(a): Rehash of 7th Amendment plus a mention of statutory rights to jury trials. b. A party seeking a jury trial must demand one within ten (10) days after service of last pleading directed to such issue. - If defendant files a counterclaim, plaintiff may request as jury trial as to that issue in the reply, but only to that issue if the time for asking for a jury trial on other issues has run out. c. Safest route: Demand a jury trial in your complaint, answer, or reply d. The clock starts ticking after service of answer (10 days). After that, neither party can ask for a jury trial. Failure to request a jury trial in time is deemed a waiver. e. Amended pleadings (1) If you amend your pleadings to state a new claim, you may be able to request a jury trial as to that issue. f. Jury trials, once granted, can only be withdrawn by mutual consent. g. Rule 38(b): Court may order a jury trial upon a motion, but the matter is left to the court's discretion. h. Rule 39(c): Impanelling of advisory juries or jury trials by consent. i. Just because the court grants a jury trial, that does not mean that the case will go to the jury. (1) Dismissal of the case (2) Default judgment (3) Summary judgment 5. Assuming there is a trial, there is no guarantee that the court will send the case to the jury. a. Directed verdict/JML b. JNOV/JML - Touchstone for each: have the parties met their respective burdens of proof: (1) [Burden of pleading] (2) Burden of production (3) Burden of persuasion c. Initially, the plaintiff normally has the burden of production. The party who has the burden of production must produce enough evidence so that a reasonable jury could find in its behavior. This burden is critical in DV's and JNOV's Continuum: X Y P-----+--------------------+------D Between X and Y, a reasonable jury could find for either party. on either end of the continuum, no reasonable jury could find for the respective party. Plaintiff must present enough evidence to make it past X. If the quality of the evidence puts the case between X and Y, Defendant need not introduce any evidence at all. However, Defendant will almost always try to force the case back over across X so as to get a DV. If Plaintiff moves the case across Y, then Defendant must introduce evidence to push the case back over Y in order to avoid a DV. Likewise, if the case is between P and X, then a DV for the defendant is warranted. d. Burden of persuasion: This burden is significant for jury deliberations. When the evidence is equally balanced, the case must be resolved against the party with the burden of persuasion. e. Rule 50: Judgments as a matter of law: Merger of DV's and JNOV's as well as a simplification. (1) Rule 50(a): The rule for what used to be DV's. (2) Rule 50(b): If the motion for a JML is made and denied at the close of all evidence, it may be renewed after the jury returns. JML motions made at the close of all evidence may be renewed after the jury comes back. But, unless a party makes a timely motion for a JML, that party cannot move for a JML if the jury comes back with an adverse verdict. f. Reid v. San Pedro (cow case) (1) Plaintiff contends that his cow got onto the defendant's RR tracks through a hole in the fence and was killed by an oncoming train. The cow was killed apx 1 mile from the break in the fence, but only a few hundred yards from the open gate. The defendant contended that the cow got through a gate left open by the landowner. A state statute absolves an RR of liability for cows that wander onto tracks through open gates and get run over, but not for breaks in the fence. (Plaintiff charges that the train driver was negligent. The headlight on the train was also defective. - Subtle argument of statutory interpretation: The plaintiff in the case is not the "owner" of the land, so the statute may not technically apply. However, such an interp would tend to frustrate legislative intent. However, neither party addresses this argument. (2) Question: could a reasonable jury find that the cow came through the break in the fence? On the whole, no reasonable jury could find for the plaintiff, so a directed verdict for the defendant is warranted. (3) Can the jury base its decision in part on their personal experiences? RP vs. special experiences. Do we need to put expert witnesses on the stand? g. Problems: page 769 (1) B. P sues white cab company, who owns 75% of all cabs in town, claiming that a white cab hit her. Is this evidence enough to get to the jury? Is 95% enough? If based only on statistical evidence, the case should not go to the jury. (2) 4. Should the case go to the jury? Causation is the key. Contaminated water & air. Can res ipsa be used to smoke out D? Can damages be fashioned to reflect the % of liability? Overpunishment vs. underpunishment. h. How do we know when we have enough evidence to get to the jury? - RA RR v. Chamberlain (1) This was a wrongful death action in which the survivors of the plaintiff, a "RR car driver" was killed while directing cars onto their appropriate tracks. The survivors sue the RR co. for negligence, charging that the decedent was thrown onto the tracks when cars driven by other employees rammed into the decedent's car, knocking him onto the tracks to be run over and killed. Defendant produced several witnesses (company employees) who testified that there had been no collision. Plaintiff put on Bainbridge, who testified that he heard a loud "crash" and looked up to see that the decedent was no longer on his car. Bainbridge "viewed" all this from 900 hundred yards away at a 3 degree angle from the situs of the accident, and he saw no collision. The question is should the case go to the jury based on Bainbridge's testimony. (2) Can conflicting inferences be drawn from the evidence? Is Bainbridge's testimony literally "incredible"? (3) S.Ct. says that the case was properly kept from the jury. 3 reasons (a) Defendant could have gotten a DV at the close of the plaintiff's case since the plaintiff failed to put up enough proof, and thus, failed to meet the burden of production. (b) Even if P's evidence were enough to get past X, D's evidence pushed the case back over X, so a DV for D was proper. (4) The applicable test: The court must look at all the evidence in the light most favorable to P and decide if a reasonable jury could rule for P. (5) Bainbridge's testimony was circumstantial evidence, while D's testimony was direct evidence. (Was the evidence biased towards D?) (6) The court thinks the inference P wants the jury to draw is nor warranted based on the facts. Direct conflict plus credibility make jury questions, and the court thinks Bainbridge's testimony was simply not credible. (7) The burden's of production and persuasion rest on P, but in res ipsa, those burdens are shifted one plaintiff shows that the instrument of the injury was under D's exclusive control, and that the sort of injury normally does not occur in the absence of negligence. - RR co. v. Stout (1) Plaintiff Stout was a 6 year old boy who was injured on a RR turntable owned by the Defendant that was not secured. Plaintiff's foot was crushed while he and his friends were playing on it. Access to the turntable was not restricted, and the turntable lock was broken. In response to Plaintiff's negligence charge, it alleged that it was not negligent since it believed the injury was an accident. An instruction of attractive nuisances was given to the jury, and the jury awarded $7500 to plaintiff. Defendant appeals (2) There is no real question over the raw facts, but rather the controversy is over the application of the law to the facts. The dispute is whether or not defendant was negligent. Negligence is normally a jury question since it involves a determination of what an RPS would have done under the same circumstances. Only the jury is qualified to decide if the RR used the appropriate level of care. (3) 2 inferences are possible: D was negligent, or it was not negligent. (4) While judges decide questions on the law, this is a combined question of law and fact, which is within the province of the jury in this case. Accordingly, it was appropriate to send this question to the jury. However, in other circumstances, the judge should be the actor who applies the law to the facts. i. Other methods of jury control a. Instructions on the law/ Rule 51: The jury is not permitted to make up its own rules of law. The jury is charged with the applicable law and instructed to follow it. (1) Counsel for each party will propose jury instructions to the judge in a charge conference after the close of both cases and object to the proposed instructions of opposing counsel. (2) Counsel will also argue how the instructions should be applied to the facts. (3) Counsel must object to proposed instructions (or lack thereof) in order to appeal and adverse judgment on the grounds that the instructions were faulty. (4) The court has a duty to instruct properly, and the attorneys have a duty to propose jury instructions. (5) Plain error review: Under this doctrine, appellate courts may review jury instructions and reverse for plain error, even if no party objected to the instructions. The 9th Cir. rejects the plain error rule and reads Rule 51 literally (no objection when instruction is given, no right to appeal on grounds of a faulty instruction). However, The 2d Cir. permits plain error review of jury instructions. b. Jury experimentation limitations (1) In re Bev. Hills. Fire Litigation (a) A fire in the BH Supper Club killed 165 and injured many more. A class action suit was filed against BH based on diversity jurisdiction. The plaintiff put on evidence tending to show that defective installation of aluminum wiring was the CIF of the accident. One of the jurors was distressed to hear this line of argument since he had aluminum wiring in his own home. The juror went home, inspected his own wiring, and what he found directly contradicted plaintiff's theory. The juror reported his findings to the rest of the jury, and the jury returned a verdict for D. The juror send an anonymous letter to the paper explaining his experiment and its role in the jury's decision, and on the basis of the letter the plaintiff moved for a new trial. (b) Under Fed. R. Evidence Rule 606(b), the court may not inquire into the reasons for the jury's verdict in an effort to impeach the verdict, but the court may inquire into external influences. This rule facilitates open and frank discussion, and it forestalls endless review by giving some finality to the verdict. (c) Since the juror's evidence was untested and not cross examination, it flouted the Rules of Evidence. The court deemed the juror's acts an improper jury experiment and ordered a new trial. (d) However, jurors still may use their general experience and common knowledge in deciding a case. Voir dire can be used to exclude jurors who may be tempted to engage in such experimentation. c. Restriction on comments to the jury: When may judges permissible make comments to the jury? (1) Treza v. Dame (a) This was an automobile personal injury case involving a head on collision between P and D while D was attempting to pass an 18 wheeler. The particular controversy was over comments made by the judge to the jury and whether they were prejudicial or improper. Plaintiff testified, and T-T driver corroborated, that the defendant darted out from behind the T-T, giving no time to the plaintiff to avoid the collision. Defendant claimed that the T-T driver was playing games with her when she pulled out to pass. She saw the plaintiff coming, but T-T would not let her back over. The judge commented that he thought the defendant was negligent, but he also noted that they were free to disagree with him. (b) In Federal Ct., judges may comment on the evidence to the jury. The rationale is that the jury could benefit from the insights of the judge. However, many state courts forbid such commentary on the evidence. (c) The Ct. of App. is not thrilled with the comments, but it nevertheless denies the defendant a new trial. It labels the comments "dangerously close to usurping the function of the jury." But, the jury was told that it could disagree with the judge, and the weight of the evidence allowed a verdict against D. (d) Quercia v. US pg 792: consistent with Trezza (judge proposes a lie detector test) (Also, this was a criminal case, where judge's comments are more likely to be prejudicial in that they detract from the reasonable doubt test.) d. Controlling juries includes limiting extraneous influences (1) Instructions to ignore certain testimony. (2) Mistrial: Trial so infected with error that a new trial with a new jury is needed. (3) New trial motions (4) Ct of App finds error and orders a new trial on remand. B. New Trials 1. New trials: Some error that was so prejudicial that a new trial is needed. 2. Dst Cts are empowered to order new trials when there is a. Some serious error with the trial, or b. When the verdict is against the weight of the evidence. 3. Conditional rulings on new trials after grants of JNOV's: Lind v. Schenley Industries a. Question: was there a contract for a 1% commission on all of the plaintiff's sales? Defendant argues there was no such contract, but plaintiff argues that there was a contract. Plaintiff and another person testify to oral promises made by the defendant. Defendant argues that the commission would have been unreasonable in light of what the plaintiff's salary would have been, and plaintiff did not ask about it for several years. Defendant's motion for a DV was denied. Case goes to the jury, and it renders a verdict for plaintiff. Trial court granted a JNOV & conditionally grants a new trial. b. Under Rule 50, in order to make a JNOV motion, you must make a timely motion for a DV at the close of all evidence. c. Why rule on the new trial motion? Because if the App. Ct. reverses the JNOV, the new trial question will have been already decided while the case was still fresh in the judge's mind. (Rule 50(c)(1)). d. General issues (1) Can Plaintiff appeal the grant of a motion for a new trial to the defendant? General rule: plaintiff may only appeal from a final judgment, and since the grant of a new trial is not a final judgment, plaintiff must wait until a final judgment is rendered before she can appeal the grant of the new trial. (Likewise for defendant who wins a verdict but where the court grants a new trial.) (2) Suppose at Trial #2, the jury returns a verdict for Defendant. Plaintiff can appeal at this point, but any reversal of a new trial might be pyhrric. e. In this case, we have entry of JNOV for Defendant (final judgment), so plaintiff could appeal the grant of a new trial motion as well. f. Appealable vs. Reviewable (1) What is the scope of review? App. Ct.: most of the time, new trial motions are not reviewable. But the 3rd Cir. says that they are not unreviewable (under an abuse of discretion standard). (2) Applicable standard of review as to appeals of new trial motions. (a) Verdicts against the weight of the evidence: "Close scrutiny" required (b) Serious error with trial: Rational basis required (abuse of discretion standard. (3) Standard: is the material the kind that would be unfamiliar to laymen. If so, then the trial judge must exercise more exacting scrutiny when dealing with motions to set aside the verdict. If not, then the court must be more deferential to the jury's decision. Professor Moore's std: Did he jury reach a "seriously erroneous" result so that the judge must act to avoid a serious miscarriage of justice? g. Diagram: verdicts against the weight of the evidence. Here, the judge must weigh the evidence during a jury trial. I----------)----(-----)------------I A B C D A: Judge merely disagrees with the verdict and would have voted differently had he been on the jury. In these circumstances the judge should leave the verdict alone. (This area also represents the area encompassing the ordinary knowledge of jurors.). Otherwise, the role of he jury would have been subverted. C: This range represents the complex case. Here, a new trial is warranted because the verdict is against the weight of the evidence. This is the rare case when not to set aside the verdict would lead to a miscarriage of justice. D: This range represents the times when the evidence is incredible as a matter of law. Accordingly, a judgment as a matter of law is warranted, either in the form of a DV, or a JNOV. Granting either is a statement that "no reasonable jury could rule against the moving party when taking all the evidence in the light most favorable to the non-moving party. These operates as checks on the jury system. A JNOV essentially states that the case never should have gone to the jury. h. Was there legal error? On this question, the court has an active role since it is the higher authority on the law. (No deference to trial ct.) i. If there was error, was it harmless? This is evaluated according to the abuse of discretion std. (Lots of deference to the trial ct.) j. In dealing with grants of new trial motions based on insufficiency of the evidence for a verdict, the first question is legal: did the trial court understand the law on granting new trial (no deference to trial court). If the trial court did understand the law, did the trial court apply the proper standard? (Close scrutiny vs. Rational basis). This determination is based on whether the matters were within the knowledge of ordinary jurors (rational basis for the verdict) or if they were matters which ordinary jurors had no particular knowledge about (Close scrutiny). k. When a judge has denied a NTM, the Appellate court is unlikely to reverse, even if the aggrieved party can appeal it. 4. Partial retrials a. P sued D, and the jury returns a verdict for P. D moves for a new trial due to error Order of inquiry (1) Was there error? (2) If so, was the error a factor in the trial (harmless error?) (3) If there was an impact, was the error limited to a discrete issue or did it interfere with the entire process? (4) Would it be fair (or expedient) to have a retrial only on the discrete issue or should the new jury have the benefit of hearing the entire case. b. If the above circumstances indicate that a partial retrial is warranted, then the court may grant one upon a motion. C. Remittur/Additur 1. These two doctrine permit a judge to cure perceived jury error upon a motion for a new trial by a losing party by presenting a prevailing (losing) party with an ultimatum: The party can either face a new trial or accept a reduced (remittur) award (or agree to pay an increased award (additur)). 2. The S.Ct. has permitted remittur to be used in the Federal court system because the judge would be awarding an amount that the jury has already awarded. However, the S.Ct. has held additur a violation of the 7th Amendment since it awards an amount the jury never awarded. Additur is still available in may state court systems. 3. So long as an award is reasonable, the judge should not remit the award. 4. Some verdicts are so excessive or so paltry that a new trial is warranted because of some undetermined error. 5. Should not the judge have to award to upper amount in the original range since the jury awarded at least that amount? (Split of authority) 6. If P accepts remittur, P cannot appeal, though he might be able to cross appeal if D appeals the denial of the JNOV. D. Post trial motions: trying to undo what the jury has done. This is an intricate and technical procedure where the goals of finality and not usurping the role of the jury are intertwined. 1. Neely v. Martin a. The jury returns a verdict for P, and defendant moves for a JNOV or a NT in the alternative. Both are denied, and judgment is entered on the verdict. P wants to defend the integrity of the verdict and argue for the denial of the post trial motions. b. Defendant appeals the denial of the JNOV to the App. Ct., arguing that the JNOV should have been granted. The App. Ct. must make a dual inquiry: (1) Did the Dst.Ct. invoke the proper standard (DV standard)? (2) Did the Dst.Ct. apply the standard properly? Plaintiff continues to defend the integrity of the verdict by presenting evidence from the record, but does not argue for a new trial in the event the denial of the JNOV is reversed. c. The App.Ct. agrees with D that the JNOV should have been granted, and so it remands with an order for the entry of a judgment for D. P immediately petitions for cert., arguing that the App.Ct. had no authority to direct the entry of judgment of dismissal. The trial judge should be permitted to pass upon the motion for a new trial. d. By requiring P to argue both for preserving the integrity of the verdict and for a new trial, the plaintiff may be faced with a logical quandary at first glance (error & no error). But, this is not necessarily the case (error but harmless & not harmless). e. The S.Ct. declines to lay down an absolute rule that an App.Ct. can never direct the entry of judgment. (i.e. dismissal for lack of subject matter jurisdiction). The normal procedure would be for the App.Ct. to remand for consideration of a new trial motion, but the App.Ct. is not obligate to do so. The S.Ct. also notes that there were three possible opportunities for the plaintiff to move for a new trial (1) At the end of the trial court action. (2) In the appellate brief (3) In a petition for rehearing at the App.Ct. level. Also, the App.Ct. could have remanded for consideration of a new trial motion in its discretion. 2. Rule 50(b): if a timely motion for a JML is made at the close of ALL evidence (including P's rebuttal), the motion may be renewed within 10 days after the entry of judgment. 3. Problems: page 824. b. No, because D did not move at the close of all evidence for a JML. It is irrelevant that D moved for a JML at the close of P's evidence. c(1). It is not clear if D has moved for a new trial or a JNOV. c(2). D must file notice of renewal within ten days after entry of judgment, and the court cannot do this on its own motion (usually). 2. P v. D., verdict for P, D's JNOV is denied, but a NT is granted a. No b. No c. Yes (now you have a judgment from which you can appeal). d. No e. Technically, yes, but it would be a weak argument. E. Nonjury trials: the majority of trials in the Federal system. 1. Unlike jury trials, no one has the right to a bench trial, and neither party may demand one. 2. Bench trial: judge is the finder of fact as well as the interpreter of the law. Accordingly, the App.Ct. accords less deference to the judge's findings of fact. 3. Rule 52(a) a. Judge must specifically state the findings of fact and conclusions of law. b. The findings may be reversed only if "clearly erroneous". It's a deferential standard, but not as deferential as the standard accorded to findings of fact as made by juries. Jury findings have special protections not accorded to judge-made findings. 4. Tittle v. Aldacosta a. Woman slips while disembarking from the defendant's vessel and is injured. Owner sued for A DJ of non- liability and woman counterclaims for damages. b. App. Ct. believes that the Dst.Ct. was wrong in concluding that the owner was not negligent. (Has the App.Ct. adhered to the "clearly erroneous" standard? Did it have a "firm conviction" that the finding was erroneous? III. Appeals A. Threshold issues 1. Who can appeal? a. There is no constitutional right to appeal in civil cases. The right to appeal in civil cases is largely statutory. b. Under 18 U.S.C. 1291, the Cir. Ct. of Appeals have jurisdiction over the final judgments of the Dst. Cts. c. Standing (1) An appellant's standing to appeal depends on his status as an aggrieved party. (2) Generally speaking, only aggrieved parties have the right to appeal. (3) Aetna v. Cunningham (a) Defendant Cunningham defaulted on a building contract, for which Aetna was the surety agent ($32,000 surety bond). Aetna sued for indemnity from Cunningham under 2 theories (1) Contract calling for indemnity (2) Tort (fraud) claim (b) Aetna won on the contract claim, but the court found no fraud, and so refused to enter judgment based on the fraud claim. Aetna won a judgment for $32,000 + interest. (c) Though Aetna won, they want to appeal the denial of the tort judgment, even though they do not stand to collect any more than the $32,000 + interest awarded in the contract judgment. Aetna fears that Cunningham may seek bankruptcy protection, and a contract judgment would be dischargeable, and Aetna would only be entitled to a pro rata judgment under those circumstances. A judgment based on fraud would not be dischargeable. (d) The 5th Cir. rules that Aetna is an aggrieved party entitled to appeal denial of a judgment of the quality they originally sought. (Under the FRCP, you may plead in the alternative.) (e) This case does not stand for the proposition that you can appeal the denial of any alternative theory. You can only appeal an alternative theory upon which you lost if the quality of the judgment would have been higher had the court entered judgment on the favored theory. The aggrieved party has the burden of showing that there will be a practical or legal difference by reversal. (f) Ultimately, the court affirms the denial of the fraud claim. d. Losing parties who wish to appeal must file timely notice of appeal. 2. What can be discussed? Appellants may only bring up discuss on appeal issues which were raised in the trial court (unless extraordinary circumstances compel otherwise). The rationale is that you have to have given the trial court the chance to be right. a. Extraordinary circumstances, such as the existence of new case law on the subject, may justify discussion of the new material. Carson Products v. Califano (1) This case involved FDA denial of trade secret status to an ingredient in a men's depilatory product. (2) Initial challenges: (a) Wrong result: There was no substantial evidence to justify the agency's finding of presumption in favor of the FDA. (b) Arbitrary and capricious decision that was not based on reasonable decision making. The Dst. Ct. denied both claims, and Carson appeals. (3) In the interim, the Zotos decision is handed down, where another Dst. Ct. found that the FDA's procedure for determining whether or not an ingredient was a trade secret denied applicants due process. The FDA lost and declined to appeal, opting instead to overhaul their evaluation procedure. (4) Carson would like to raise the DPC issue, but he did not raise it at the Dst. Ct. level. Under normal circumstances, he would be precluded from raising that issue in the Ct. of App. (5) However, the court may in its discretion hear issues not raised below when it would not be just not to hear them. There is no jurisdictional bar to hearing issues not raised below. (6) App. Ct. has as part of the record what procedures were used, and since the FDA briefed the court on the issue, they would not be prejudiced. (7) Another pyhrric victory: The Ct. decides to hear the DPC issue, but ends up deciding there was no DPC violation. 3. Cross-appeals a. When should both parties take an appeal up to the Ct. of App.? Mass. Mutual Life Ins. Co v. Ludwig (1) Plaintiff's deceased and insured died while crossing some train tracks. Plaintiff administrator sued ins. co. for double indemnity. Under the policy, the ins. co. was bound to pay double indemnity if the insured died while on a common carrier. (2) The insured was not strictly speaking a passenger, as she was crossing the tracks at the time. Accordingly, the insurance company refused to pay double indemnity. (3) Issues (a) Whose law applies? IL or MI? IL was the situs of the accident, so its choice of laws applies. (1) Plaintiff asks for MI law. (2) Defendant asks for IL law. (4) The court rules that MI law applies and that the insured was not a passenger at the time, so the administrator is entitled only to single indemnity. (5) The administrator appeals. The ins. co, wants to argue that the court applied MI law correctly, but it also wants to argue that IL law applies, and under it the administrator is entitled only to single indemnity. (constructive dilemma). (6) The 7th Cir. rules that: (a) The Dst. Ct. misread MI law, so the insurer would be liable for double indemnity under MI law. (b) But, since the ins. co. did not cross appeal the judgment that MI law applied, it is barred from raising the issue. [Defendant wants to argue that under IL law, it is liable only for single indemnity.] (7) The S.Ct. holds that the ins. co. was not required to cross appeal to attack the Dst. Ct's ruling. The Ct. of App. reviews judgments only. Any party may use any ground brought up in the record to attack the Dst. Ct's reasoning and argue that the judgment should be affirmed. If the same result could have been reached on different grounds, then no cross appeal would be needed. The party is not asking for modification of the judgment or reversal of that judgment, so the party need not cross appeal. The S.Ct. kicks the case back down to the 7th Cir. with instructions to let the Defendant raise the IL law issue. (1. Does it apply? 2. If so, is the Defendant liable for double indemnity?) B. Finality 1. Normally, only "final decisions" of the Federal Dst. Cts are reviewable by the Cts. of App (28 U.S.C.  1291). Why? a. Efficiency & avoiding delay in the trial b. Avoidance of detracting from the judge's authority. If every ruling of the judge could be appealed immediately, his authority would be undercut dramatically. Problems c. Prejudicial harm/irreparable harm d. Close questions of law e. Efficiency may weigh in. 2. According to the S.Ct., "final decision" has a broad meaning: Collateral order doctrine- an exception to  1291. Cohen v. Beneficial a.- The ruling in question was final - Not tied up with the merits of the lawsuit. It was separable from the merits. - Too important to be denied review (now or never) b. This doctrine applies to a small class of cases, like double jeopardy rulings in criminal law. c. This doctrine does not apply to rulings on personal jurisdiction [and possible new trial rulings]. 3. Interlocutory appeals: 28 U.S.C.  1292 Grounds: a. Controlling questions of law to which there is substantial ground for difference of opinion. b. The Dst. Ct. must certify the question as such. c. Review by the Ct. of App. is discretionary - Under Rule 54(b), mandamus and contempt proceedings are reviewable under this procedure. - State ct. policies on interlocutory appeals differ. C. [Quick review] 1. Final decision 2. Aggrieved party 3. Issue raised below D. Scope of Review 1. As the appellant seeking a reversal, you must convince the Ct. of App. that: a. The Dst. Ct. did something wrong, and b. That the error was prejudicial and that the error could not have been harmless. 2. Standard of review: A critical determination on appeal a. Questions of law The Ct. of App. is the superior authority on the law, and the Ct. of App. gives no significant deference to the Dst. Ct. "We would have decided it differently." is enough for a reversal. De novo review permitted. b. Questions of fact These questions are reviewable only under the "clearly erroneous std." Much deferential weight is given to the trial court. De novo review is not permitted. c. Standards in general (1) Clearly erroneous (reserved for findings of fact made by Dst. Ct. judges). (2) Abuse of discretion (a deferential standard) (3) De novo (virtually no deference) 3. Review of findings of fact (FOF's) under the clearly erroneous (CE) standard: CE & Anderson v. Bessemer City a. This case involved a Title VII sex discrimination dispute. Bessimer City was looking for a Recreation director. Plaintiff was denied the job, and she believes she was denied the job because of her gender. (This was a bench trial, since Title VII relief is deemed to be "equitable" relief.) b. The Dst. Ct. found that (1) The plaintiff was the more qualified candidate. (2) She was asked several inappropriate questions (like, "Does your husband approve?") (3) Pretextual reasons for hiring Kinkaid (the other person hired). c. The 4th Cir. pays lip service to the clearly erroneous std., but instead finds that the Dst. Ct was completely wrong. The 4th Cir. declares that close scrutiny is required because the paries proposed FOF's to the court. d. The S.Ct. reverses. According to the S.Ct., all FOF's are reviewable under the clearly erroneous standard. e. The S.Ct. then reviews the FOF's under the CE standard. (1) If 2 inferences are permissible, the FOF is not clearly erroneous. (2) If the App. Ct. is left with the firm conviction that an error was made, in that only one inference is possible and the Dst. Ct. made the wrong inference, then the FOF is CE. (3) In this case, the S.Ct. thinks the Ct. of App. made a de novo review of the facts that is not permissible. The proper question was whether the Dst. Ct. did something wrong. f. In some instances, the Cts. of App. have said that when findings are based on inferences from documentary evidence and not on credibility then the standard of review is different. The S.Ct. has decried this practice. Even if an FOF is made from documentary evidence. g. CE is one step away from the almost absolute deference that is given to a jury verdict. 4. Harmless error a. Errors committed by the Dst. Ct. that were not prejudicial to the decision are not grounds for reversal. b. Gertz v. Bass (1) In this case, the jury asked the bailiff for a dictionary, and the bailiff gave them one. The dictionary had not been admitted into evidence, and the case turned on the legal definitions of several key terms. (Foreign materials are not permitted in the jury room.) The dictionary definitions were extremely unfavorable to the plaintiff. The jury returned a verdict in favor of the defendant. (2) The Court found that this was potentially prejudicial error since the decision turned on specialized legal definitions of key terms. V. Respect for judgments A. Three goals 1. Efficiency 2. Finality 3. Avoidance of inconsistent judgments B. Terminology: res judicata, collateral estoppel, etc. 1. Preclusive effect of judgments (final judgments on the merits) a. Claim preclusion (res judicata) (1) What does "claim" mean in this context? The definition is influenced by pleading and joinder rules. The meaning of "claim" has broadened as the law has broadened. (2) While there is no compulsory joinder of claims under the Federal Rules, compulsion to join all possible related claims comes from claim preclusion law. (2a) Overview: Goals and requirements for claim preclusion (a) Efficiency (b) Consistency in judgments (c) Identity of the parties (d) Final judgment on the merits (3) "Efficiency": Frier v. City of Vandalia: What is a "claim"? (a) Plaintiff is a man who likes to park his cars in the street. At one point, the city had two of his cars towed because they were blocking something. He first sued for replevin in state court against the city and the garage that was holding his car. The relief he was seeking was replevin of the cars, and the issue to be decided was the legality of the towing (the right to tow). The state ct. held that the city had the right to tow, and so it refused to grant replevin. (b) Plaintiff then files suit in Federal Court against the city under  1983 alleging that the city deprived him of property without due process (no notice or opportunity to be heard). He seeks actual and punitive damages. (c) The Dst. Ct. bounces the suit out on a 12(b)(6) (pseudo SJ for defendant). In the Dst. Ct's opinion, there was no DPC violation, and there was no claim preclusion. Frier appeals, but the city does not cross appeal (it may challenge anything in the record that supports the judgment). (d) The court avoids the constitutional question by dealing with the claim preclusion issue. The ct. applies IL claim preclusion law. Under  1738, Full faith and credit must be extended to the IL judgment, and accordingly, it must be evaluated under IL law. (e) The majority pays lip service to the IL "identical claim of action" standard, but it actually applies the more favored and newer "transaction standard", which embodies a broader notion of "claim". The transaction in this case was the towing of the cars. (f) IL "identical claim of action" standard: are the parties and the causes of action identical? (1) Each individual has his own separate claim. (2) The meaning of "COA" is unclear, but COA's are identical when evidence used to sustain the first verdict would sustain the 2d verdict. (3) It is not enough to look at the transaction and see if the legal theory was raided at the first trial. Even if the particular legal theory was not raised at trial, the claim may still be precluded. (g) The message is to come up will all claims you can and join them in the same lawsuit (Use 'em or lose 'em!) What Frier should have done was sue in Federal court under  1983 and joined the replevin claim by invoking pendent (supplemental) jurisdiction. (h) A concurring opinion points out that the majority is trying to force IL into the transactional standard. (i) Claim preclusion is independent of the outcome. The S.Ct. would have ruled the same in the Frier case had Frier won his replevin suit. (j) Hyp: His wife would not have been kept out on claim preclusion, but would she have been kept out of court on issue preclusion? NO: issue preclusion would not have kept her out of court because her legal rights were not and could not be affected by a suit to which she was not a party. However, her husband's replevin suit will have a stare decisis effect on her case. [Is she a necessary and indispensable party?] (4) Note 7: Splitting claim into 2 lawsuits (a) Separate theories (b) Arithmetical splitting (c) Split relief (Property damage divorced from personal injury damages, or injunction vs. money damages). (5) The Restatement (2d) of judgments prefers the transactional test over the identical cause of action test. (6) "Consistency: The logical implications of the former judgment" : Martino v. McDonald's Systems (a) 1st lawsuit: McD sued Martino and his brothers for breach of a franchise agreement, in particular a covenant not to compete (the son bought a Burger Chef franchise, and Martino financed the deal). (b) Judgment on a consent decree was entered. The consent decree was tagged with FOF's and conclusions of law. (1) Sale of the franchise back to FRIC for $140,000 (2) Acknowledgement that the covenant was breached. (c) 2d lawsuit: Martinos sued McD under Sherman Antitrust act, charging that the consent decree violated Federal antitrust laws. They asked for lost profits and they challenged the $140,000 figure as too low. They ask for the difference between FMV of the franchise and $140,000. The question is whether there is res judicata. (d) McD presents 2 theories in favor of res judicata determination. (1) 1st theory: The antitrust claim is properly a compulsory counterclaim since it arose out of the same transaction or occurrence, and therefore since Martino did not bring it, it is waived. The Ct. holds that since Martine never filed an answer, technically, Rule 13(a) does not apply, since the counterclaim according to the rule must be stated in the pleading. Though the time period for an answer had passed, Rule 13(a) still applies. Also, there is a default judgment rule for recalcitrant defendants who try to avoid compulsory counterclaims by not answering. (2) 2d theory: Res judicata. Since res judicata extends to different theories of recovery on the same case, it extends to defenses raised by the defendant as well. (a) Judgment precludes subsequent claims & defenses (b) Different individuals have distinct COA's. Absent Rule 13(a) (compulsory counterclaims), parties can litigate their claims against one another separately. (c) When Defendant's lawsuit would nullify rights established by the prior action, the claim is precluded. This avoids inconsistent judgments and accords a party the right to rely upon a judgment. (3) In the previous lawsuit, McD got the franchise back for $140,000, and it won a ruling that the covenant was valid. Martino's antitrust claim stood to undermine both points. (4) Claim preclusion circumscribes the wide sweep of Rule 18 (claim joinder), and Rule 13(a) takes care of counterclaims arising out of the same transaction or occurrences that Defendant could have raised but chose not to. (5) 7th Cir's holding: Claim preclusion is not a bar to subsequent claims that could have been brought as counterclaims in a previous action. Exceptions: (a) Rule 13(a) compulsory counterclaims. (b) Claims that would have served as defenses to the previous action. (7) Restatement  22 view: Hyp #1: Dr. sues patient for an unpaid fee, and Dr. wins a default judgment. Patient later sues Dr. for malpractice. NO CLAIM PRECLUSION. The malpractice claim is a separate claim that does not affect the doctor's rights in the first suit. Hyp #2: Driver 1 sues Driver 2 for negligence and takes a default judgment. Driver 2 then sues driver 1 for negligence. Driver 2's suit would prejudice rights obtained by Driver 1 in the 1st suit. However, the Restatement says that Driver 2 should be able to sue (a narrow view: it is not enough just to say the claim might have been a defense). Hyp #3: Seller sues buyer to recover an unpaid purchase price on a good, and he takes a default judgment. Buyer then sues Seller for rescission and restitution of the purchase price. Here, claim preclusion would operate to bar this collateral challenge to the 1st judgment. Allowing the Buyer to proceed with his claim would seriously prejudice the rights Seller obtained in his lawsuit. (This is the situation in Martino). [Remember: If you fail to answer all of the allegations of the complaint, those allegations which you did not answer are deemed admitted.] (8) "Identity of the parties": Who is bound? Parties to a lawsuit and their privies. Searle Brothers v. Searle (a) Question: to what extent are non-parties bound? (b) 1st lawsuit: Divorce action. A slaughterhouse was awarded to the wife. The court rejected the husband's claim that a partnership owned 1/2 of the slaughterhouse since it was in the husband's name only, and he controlled all the rents. (c) 2d lawsuit: Sons of Searle sue to assert their interest. They seek a DJ that their are entitled to a 1/2 interest in the slaughterhouse. The defendant claims that since they were intimately involved in the divorce action even though they were not parties, they are in privity with Searle. (A finding of privity is properly a conclusion). (d) Easy cases on these facts would be between the following parties: (1) Mr. & Mrs. Searle : clear claim preclusion (2) Subsequent purchasers, since they would have been in privity with the vendor. (e) In this case, though the Searle sons were intimately involved with the divorce action, none chose to intervene. There is also the lack of any mutual or successive relationship that would give rise to privity. (f) The court rules that they had their own interest and they had the right to assert it. Since they were not parties to the divorce action, their legal rights were not affected, though they will have to contend with the stare decisis effect of the divorce decree. (g) Mrs. Searle's remedy in retrospect would have been to join the sons under Rule 19 (compulsory joinder of necessary or indispensable parties) or Rule 20 (permissive joinder) in order to bind them to the determination of the court. (h) Themes in privity (1) Successive relationships (2) Control of litigation (life insurance company) (3) Person suing in a representative capacity, like class action representatives, guardians ad litem, executors, and trustees (4) Co owners are apparently not in privity with other co owners. (5) The Restatement bails out on a definition of privity. (6) Issue preclusion follows similar privity rules. (9) A judgment that is on appeal still has a preclusive effect until and unless it is reversed. (10) Final judgment on the merits: these are given preclusive effect through the doctrine of res judicata. (a) How far do you have to go to get a final judgment on the merits? (1) Page 919: a, b, c, d, g, e (maybe). A determination is a determination on the merits unless the judge indicates otherwise. (See Rule 41(b)) (b) Rule 41(b): declares certain dismissals to be adjudications on the merits (1) Failure to comply with rules or orders of the court, including discovery orders. (2) Failure to prosecute (This rule puts teeth in the dismissal power of the court). EXCEPTIONS- Dismissals for: (1) Lack of jurisdiction (2) Improper venue (3) Failure to join a Rule 19 party (c) Saylor v. Lindsay (1) 1st action: Hawkins' shareholder derivative suit. Hawkins sued the directors and officers for SEC violations and breach of fiduciary duties. He failed to post a required bond, so the court dismissed "with prejudice." (2) 2d action: Saylor sued the same defendants. Saylor is a member of a class of shareholders, so "new person, new claim" is inapposite in this circumstance. (3) Three reasons not to impose CP. (a) Not the same COA (b) No judgment on the merits (c) No notice of Hawkins's action (violation of due process rights). (4) Ct: failing to post a bond could not have been an adjudication on the merits. It accordingly refuses to apply Rule 41(b) literally. The other court did not reach the merits of the issue. (The court appears to look to the background justifications behind the rule and finds that they are not satisfied.) (The court appears to treat the dismissal as an effective dismissal for lack of jurisdiction (a bit of a stretch; even a 12(b)(6) dismissal is on the merits unless otherwise stated.)). (5) Default judgments are judgments on the merits. (Failure to deny is treated as a bi