CIVIL PROCEDURE: OUTLINE, FALL 2006, B.

NEUBORNE

TABLE OF CONTENTS

PREFACE: LEGAL PHILOSOPHY 2

ISSUE ONE: JURISDICTION 2-7

ISSUE TWO: SERVICE OF PROCESS 7-10

ISSUE THREE: VENUE AND FORUM NON-CONVENIENS 10-14

ISSUE FOUR: JUDICIAL POWER OVER SUBJECT MATTER 14-24

ISSUE FIVE: CHOICE OF LAW 24-29

ISSUE SIX: PRECLUSION 30-42

ISSUE SEVEN: PARTIES AND THEIR CLAIMS 42-53

ISSUE EIGHT: CLASS ACTION LAWSUITS (RULE 23) 53-58

CLASS ACTION CHART ATTACHED

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 PREFACE: LEGAL PHILOSOPHY

I. APPROACH EACH ISSUE FROM A GENERAL PARADIGM:

a. LITERALISM USES A DICTIONARY TO GIVE AN OBJECTIVE MEANING TO WORDS USED IN A TEXT.
b. ORIGINALISM ASKS WHAT THE DRAFTERS INTENDED THE TEXT TO MEAN.
c. CONSTRUCTIVE ORIGINALISM ASKS WHAT THE ORIGINAL DRAFTERS WOULD PROBABLY WANT THE
TEXT TO MEAN TODAY.
d. PRAGMATISM BREAKS TIES ABOUT A TEXT’S MEANING BY WORRYING ABOUT THE CONSEQUENCES
OF DIFFERENT READINGS.
e. LEGAL REALISM: ALL LAW IS MADE BY HUMAN BEINGS AND, THUS, IS SUBJECT TO HUMAN
FOIBLES, FRAILTIES AND IMPERFECTIONS.
f. NATURAL LAW THEORY ASSERTS THAT THERE ARE LAWS THAT ARE IMMANENT IN NATURE, TO
WHICH ENACTED LAWS SHOULD CORRESPOND AS CLOSELY AS POSSIBLE. UNJUST LAW IS NOT A
TRUE LAW.
g. LEGAL POSITIVISM IS THE VIEW THAT THE LAW IS DEFINED BY THE SOCIAL RULES OR PRACTICES
THAT IDENTIFY CERTAIN NORMS AS LAWS. (SIMILAR TO LEGAL REALISM)
II. TAKE EACH ARGUMENT AND APPLY PHILSOPHICAL PRIMER—HOW DO YOU VIEW THE ISSUE, FROM WHICH
PERSPECTIVE DO YOU ALLIGN WITH? LEGAL REALISM IN ALMOST ALL INSTANCES.
III. ADD PUBLIC POLICY CONSIDERATIONS: WHY IS THIS NORMATIVELY APPLEAING? WHAT IS THE INTENDED
PURPOSE OF THE STATUTE?

ISSUE I: JURISDICTION

IS THERE IN PERSONAM JURISDICTION? (IF THERE ISN’T YOU NEED A PRETTY COMPELLING REASON)
BEFORE MOVING FORWARD COMMENT ON THE FOLLOWING: IS PERSONAL JURISDICTION FOR THIS
MATTER IN LINE WITH THE STATE’S LONG-ARM STATUE?
WILL D WAVE P.J.?
(1) Full Faith & Credit (Article IV, §1): compels enforcement of one
state’s judicial proceedings in all other states, been construed not
to require enforcement if court lacked jurisdiction over D.
DO NOT have to give full faith and credit to an invalid
judgment from another state: Pennoyer and Hanson.
(2) Due Process (14th Amendment): guarantee of due process been
used to prohibit excessive assertions of jurisdictions by state
courts.

I. TRANSITORY JURISDICTION:
a. IS THE PERSON BEING SERVED “VOLUNATARILY” IN THE STATE AT THE TIME OF SUMMONS?
(PENNOYER BURNHAM)
I. DID D CONSENT TO JURISDICTION (EXPRESSLY) OR HAVE AN AGENT SERVING IN THE
STATE (IMPLIED)?
II. WAS THE STATE D’S HOME RESIDENCE? DID HE HAVE DOMICLE THERE? IS THE
CORPORATION INCORPATED THERE OR HAVE AN OFFICE THERE?

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 III. WAS THERE ANY FRAUD, DURESS, OR JUDICIAL PROCEEDING BRINGING D INTO THE
STATE?
IV. DID D ANSWER THE SUMMONS OR IGNORE IT? (IF IGNORED AND SERVICE WAS
PROPER, DEFAULT JUDGMENT)
V. WAS IT SERVED PROPERLY? (SEE BELOW FOR REQUIRMENTS AND RULES)
1. PUBLICATION ALONE IS NOT ENOUGH PENNOYER
2. IF THIS PERSON IS ABROAD, FEDERAL COURTS HAVE POWER TO SUBPOENA A
US CITIZEN.
vi. DID THE D CONSENT TO JURISDICTION?
vii. WAS A STATE APPOINTED AGENT OF THE PERSON SERVED? (HESS)
1. IMPLIED CONSENT: STATUTES COMPELLING CONSENT TO JURISDICTION IF D ENTERS
AND USES STATE FACILITIES (HERE, ROADS) ARE NOT A VIOLATION OF DUE
PROCESS.
VIII. WERE THEY IN THE STATE ON A:
1. GENERAL APPEARANCE
2. LIMITED APPEARANCE—QUASI IN REM
3. SPECIAL APPEARANCE—THERE TO PROTEST JURISDICTION
B. YOUR DEBTS AND OBLIGATIONS FOLLOW YOU:
i. IF A CREDITOR CAN SUE A PERSON [PRESENTLY IN THE STATE] AND RECOVER THE
DEBT, THEN HE IS LIABLE TO PROCESS OF GARNISHMENT, NO MATTER WHERE THE DEBT
WAS ORIGINALLY. (HARRIS)
1. YOU CAN BE SUED ON THE DEBT NO MATTER WHERE YOU- THE DEBT TRAVELS.
c. DOES THE JURISDICTION MESH WITH THE TRADITIONAL NOTIONS OF “FAIR PLAY AND
JUSTICE?” EVERY CASE SHOULD BE TESTED ON THIS NOTION (SHAFFER, OFF OF THE INTL.
SHOE LINE OF CASES—
i. THIS ARGUMENT IS DISPUTED BY SCALIA’S ARGUMENT IN BURNHAM)—
1. PUSH THIS PHILOSOPHICALLY ON THE EXAM. AFTER BURHAM, PENNOYER
STILL STANDS BUT IT SHOULD BE EVALUATED WITH THE NOTIONS OF FAIR PLAY
AND JUSTICE. IN THE STATE=MINIMAL CONTACTS BY DEFAULT.
II.
NOTIONS TO CONSIDER:
1. The burden on D
2. Witnesses and Evidence located in the area
3. P’s interest
4. The forum state’s interests
5. Efficiency
6. Furthering fundamental substantive social policies
(WWV)
d. Three ways to directly grab: personal, property (see below for
discussion of In Rem and Quasi in Rem, and corporation.

II. JURISDICTION WITHOUT PHYSICAL PRESENCE (THE BEGINNING OF LEGAL REALISM):

A. ASK YOURSELF: WHAT IS THE PERSONS OR CORPORATION’S RELATION TO THE CAUSE OF
ACTION AND WHAT IS THEIR RELATION TO THE JURISDICTION?
b. BURGER KING MODEL: “Once it has been decided that a defendant
purposefully established minimum contacts within the forum
state, these contacts may be considered in light of other

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 factors to determine whether the assertion of personal
jurisdiction would comport with “fair play and substantial
justice.”
I. CHECK MINIMUM CONTACTS THEN CHECK FAIR PLAY AND SUBSTANTIAL JUSTICE. USE
THIS MODEL AS THE BASIS FOR RESPONSE.
--------ISOLATED RELATIONSHIP/UNRELATED EVENT (NO JURISDICTION)------
CONTINUOUS RELATIONSHIP/UNRELATED EVENT (GENERAL JURISDICTION)----------
ISOLATED RELATIONSHIP/RELATED EVENT (SPECIFIC JURISDICTION)--------------
CONTINUOUS RELATIONSHIP/RELATED EVENT (GENERAL JURISDICTION)------
c. General Jurisdiction: Defendant has sufficient contact with the forum
to warrant asserting jurisdiction over it for all matter. Requires
sufficient and continuous activity (Perkins)
d. Specific Jurisdiction: A Defendant has sufficient contact with the
forum to warrant asserting jurisdiction over it for matters related to
its activity with the forum without having sufficient contact with the
forum to warrant general jurisdiction. (McGee, Burger King, Hilton
Hotels)
e. “PRESENCE” IS ESTABLISHED WITH A CERTAIN MINIMUM AMOUNT OF CONTACT WITHIN THE STATE
AND WITH THE STIPULATION THAT JURISDICTION DOES NOT OFFEND “TRADITIONAL NOTIONS OF FAIR
PLAY AND SUBSTANTIAL JUSTICE”. (INTL SHOE)
I. NOTIONS OF FAIR PLAY TO CONSIDER:
1. FORESEEABILITY THAT THE PRODUCTS MAY REACH THE FORUM STATE IS NOT
ENOUGH TO ESTABLISH JURISDICTION (WWV)
2. REASONABLENESS: TAKE INTO ACCOUNT LITIGANTS AND STATE INTERESTS
3. The burden on D (Asahi and WWV)
4. Witnesses and Evidence located in the area
5. P’s interest
6. Severe disadvantage to either party (Asahi)
7. The forum state’s interests
a. Protecting its citizens from defective products
(Asahi)
8. Efficiency
9. Furthering fundamental substantive social policies
F. WHAT IS A MINIMAL CONTACT? WHAT CREATES A MINIMAL CONTACT? FROM THE CASES:
I. NUMBER ONE: QUALITY AND QUANTITY OF THE CONTACTS ARE THE IMPORTANT
POINTS TO CONSIDER. GO DOWN EACH POINT BELOW AND USE EACH INSTRUMENTAL
ARGUMENT IF POSSIBLE.
1. THE TEST IS PURELY ON THE D, THE P DOES NOT HAVE TO MINIMUM
CONTACTS (HUSTLER)
ii. TO ASSERT PERSONAL JURISDICTION OVER D, THERE MUST BE AN INSTANCE WHERE D
PURPOSEFULLY AVAILS ITSELF OF THE PRIVILEGE OF CONDUCTING ACTIVITIES
WITH THE FORUM STATE, THUS INVOKING THE BENEFITS AND PROTECTIONS OF ITS
LAWS.
1. A STATE CAN’T ASSERT JURISDICTION ONLY BECAUSE IT IS MOST CONVENIENT
FOR THE PARTIES FOR LITIGATION; PERSONAL JURISDICTION MUST STILL BE
ESTABLISHED.

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 2. A STATE CANNOT ASSERT JURISDICTION BECAUSE OF UNILATERAL IMPACT ON
THE D BUT THE D NOT IMPACTED THE JURISDICTION
a. HANSON V. DENCKLA
3. THIS RULE APPLIES EVEN IF YOU THEN CANNOT INCLUDE AN INDESPENSIBLE
PARTY.
iii. ASK: Are the activities of the nature that the D knows or reasonably
anticipates that could give rise to being hauled into court in the forum?
Hustler
a. Not enough: WWV, KULKO, ASAHI
iv. THESE RULES APPLY TO CLASS ACTION DEFENDANTS AS LONG AS THEY HAVE MINIMUM
CONTACTS (SHUTTS)
g. “Continuous and systematic supervision/activities” IN A STATE IS WHAT IS NEEDED FOR
GENERAL JURISDICTION (PERKINS V. BENGUET) FALLS SHORT IN HELICOL
H. PREDICTABILITY:
i. By requiring that individuals have fair warning (in this case in
the form of a franchisee agreement with a forum clause) that
a particular activity may subject them to jurisdiction of a
forum state, the Due Process Clause gives a degree of
predictability to the legal system that allows potential Ds to
structure their conduct with some assurance as to where that
conduct will render them liable to suit. Burger King
I. ECONOMY AND COMMERCE
i. PURPOSEFUL AVAILMENT OF THE STATE’S ECONOMY AND INFRASTRUCTURE AND CLEARLY
HAVING AN INFLUENCE IN THE STATE IS ENOUGH FOR JURISDICTION (HUSTLER)
j. A DEFENDANT MUST “PURPOSEFULLY DIRECT” HIS ACTIVITY TOWARD THE FORUM
STATE. JURISDICTION IS PROPER WHERE THE CONTACTS PROXIMATELY RESULT FROM
ACTIONS BY THE DEFENDANT HIMSELF THAT CREATE A “SUBSTANTIAL CONNECTION”
WITH THE FORUM STATE BURGER KING.
k. EFFECTS TEST (KULKO): DEFENDANT HAS COMMITTED AN INTENTIONAL ACT EXPRESSLY AIMED
AT THE FORUM STATE CAUSING HARM, THE BRUNT OF WHICH IS SUFFERED AND WHICH THE
DEFENDANT KNOWS IS LIKELY TO BE SUFFERED—IN THE FORUM STATE. NOT CONSISTENTLY
USED THOUGH: SEE RADIATOR CAUSE FOR MORE DETAILS ON THIS.
i. PARENT SENDING CHILD TO LIVE IN ANOTHER STATE IS NOT AN EFFECT (KULKO)
l. CONTRACT (PLUS): A CONTRACT WITH SUBSTANTIAL CONNECTION TO THE STATE (MCGEE)
THEN THERE IS SPECIFIC JURISDICTION
m. IF PRODUCT IS PURPOSEFULLY DIRECTD TO THE STATE:
i. IF THERE IS SUBSTANTIAL USE OF A PRODUCT AND CONSUMPTION IN THE STATE, AND A
TORT IS COMMITTED AS RESULT OF THE PRODUCT, THEN THERE IS SUFFICIENT CONTACT
TO SUE IN THE STATE OF THE TORT AND NOT THE PLACE OF MANUFACTURING (GRAY
RADIATOR)—NOT SCOTUS. (MANUFACTURER, NOT THE CONSUMER MUST BRING
THE PRODUCT INTO THE STATE)
n. SUBSTANTIAL CONNECTION: JUST BEING DROPPED IN THE STREAM OF COMMERCE IN THE EYES
OF O’CONNOR IN ASAHI, IS NOT ENOUGH BUT THE BUSINESS MUST MAKE A DIRECT EFFECT IN
THE MARKET—ADVERTISING, CLEAR EVIDENCE OF BEING THERE, ETC.
I. BRENNAN’S STANDARDS ARE LOWER (AND THE COURTS METHODS ON THIS ARE MIXED)
—STREAM OF COMMERCE IS NOT UNPREDICATABLE AND THERE CAN BE JURISDICTION

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 WITHOUT CLEAR CONNECTION.
ii. The substantial connection between D and the forum state necessary for a
finding of minimum contacts must come about by an action of D’s
purposefully directed toward the forum state. The placement of a product into
the stream of commerce, without more, is not such an act. D’s awareness that
the stream of commerce may sweep the product into the state does not convert
the mere act of placing the product into the stream into an act purposefully
directed toward the forum state. Asahi
iii. PRODUCTS BEING SENT INTO THE STATE THROUGH THE MAIL IS ENOUGH FOR MINIMUM
CONTACTS (QUILL CORP. V. NORTH DAKOTA)—USE FOR INTERNET.
IV. WHEN SUBSIDIARIES ACT AS AGENTS FOR THE PARENT COMPANY, THEIR ACTIONS
WILL BE IMPUTED ONTO THE PARENT COMPANY:
1. A RESERVATIONS SERVICE LINKING TO THE POINT OF JURISDICTION IS ENOUGH
TO ESTABLISH JURISDICTION (FRUMMER V. HILTON HOTELS)
o. Not enough:
1. BUYING PRODUCTS AND BEING A CONSUMER IN THE JURISDICTION IS NOT A
CONTACT (HELICOPTEROS)
2. A CONSUMER BRINGING A FINISHED PRODUCT INTO THE STATE IS NOT ENOUGH
TO ESTABLISH JURISDICTION (WWV)
3. SALES AND SALES PROMOTION BY INDEPENDENT NONEXCLUSIVE SALES REP IS
NOT ENOUGH (FISCHER GOVERNOR CORP. V. SUPERIOR COURT)
4. SUING FOR LOSING MONEY AS A DIRECTOR IN A CORP. BECAUSE OF INJURIES
SUFFERED BY THE CORP. AT THE PLACE OF INCORPORATION. TOO VAGUE.
GREEN V. ADVANCE ROSS ELECTRONICS CORP.
P. TORTS
i. NELSON V. MILLER: COMMISSION OF A SINGLE TORT WITHIN THE STATE WAS
SUFFICIENT TO SUSTAIN JURISDICTION UNDER THE LONG ARM STATUE IN ILLINOIS.
III. CHOICE OF LAW ISSUES IN RELATION TO JURISDICTION (SCHUTTS, ALLSTATE, SUN OIL…) SEE
OPENING TO ERIE DISCUSSION LATER IN THE OUTLINE.
IV. JURISDICTION IN REM AND QUASI IN REM: TRADITIONAL POWER OVER PROPERTY
a. IN REM: Valuable painting, many people claim it (like 10 or so)
—many claims—jurisdiction where the Rembrandt is located,
regardless where the person is who is claiming it.
i. Is similar to Rule 22, interpleader:
1. See Rule Chart
ii. A state doesn’t acquire in rem jurisdiction to adjudicate a trust
simply because its decision may affect an estate passing
through its probate courts. That the decedent was domiciled
in the state also doesn’t give the state in rem jurisdiction over
assets outside the state. Hanson
iii. JURISDICTION FOR PROPERTY IN REM PROBABLY RELIES ON PHYSICAL PRESENCE OF THE
PROPERTY OR SOME VERY SIGNIFICANT CONTACTS.
iv. Tyler v. Judges of the Court of Registration (1900)—unclear on
case—some quotes:
v. A proceeding in rem, dealing with tangible res, may be
instituted and carried to judgment without personal service

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 upon claimants within the state, or notice by name to those
outside of it, and not encounter any provision of either
constitution. Jurisdiction is secured by the power of the
court over the res.
vi. If on the other hand, the object is to bar indifferently
all who might be minded to make any objection of any
sort against the right sought to be established, and if
any one in the world has a right to be heard on the
strength of alleged facts which, if true, show an
inconsistent interest, the proceedings is in rem.
b. Quasi in Rem: POWER OVER THE PERSON DUE TO THE POWER OVER THEIR PROPERTY—
LIMITED APPEARANCE.
i. QUASI-IN REM: PENNOYER INTRODUCES IT, NOT A DISPUTE ABOUT LAND, BUT
WHETHER THE LAND CAN BE USED AS A SETTLEMENT. CAN THE LAND BE USED AS A
SUBSTITUTE FOR PERSON—CAN THE LAND STAND IN FOR THE MISSING PERSON (IN AN
IN PERSONA CASE NATURALLY)
1. QUASI IN REM (1) PROPERTY HAS SOME CONNECTION TO THE DISPUTE IN
THE FIRST PLACE.
A. FOR EXAMPLE, FORECLOSURE
B. CAN BE USED AS A SUBSTITUTE FOR “PRESENCE” WHEN THERE ARE
LONG ARM ISSUES.
C. RECOVERY IS LIMITED TO THE VALUE OF THE PROPERTY.
2. QUASI IN REM (2) WHEN THE PROPERTY IS TANGENTIAL TO THE DISPUTE
—ATTEMPTING TO USE SEIZE THE PROPERTY TO INDUCE D TO GRANT
JURISDICTION/TO INTIMIDATE/ETC.
A. RECOVERY IS LIMITED TO THE VALUE OF THE PROPERTY.
b. SHAFFER ELIMINATES THE USE OF QUASI IN REM (2) EXCEPT FOR
SERIOUS OUTLIERS.
c. PENNOYER ALLOWED FOR THE SEIZURE OF PROPERTY AS NOTICE—THIS
IS NO LONGER ALLOWED UNLESS THE PROPERTY ITSELF IS IN DISPUTE
(QIR1) AND THERE HAS BEEN A PRELIMINARY HEARING—DISCUSSED IN
SUMMONS BELOW.
ii. Pennington v. Fourth National Bank (1917): Indebtedness due
from a resident to a nonresident—of which bank deposits are
an example—is property within the state. But garnishment or
foreign attachment is a proceeding quasi in rem. Basically
property up to the value in debate is seized until the matter is
settled.
c. EVERY SEIZURE MUST BE STUDIED UNDER THE SYSTEM OF INTL SHOE (SEE ABOVE)

ISSUE II: WHAT PROCESS IS DUE

WHAT IS PROPER SERVICE OF SUMMONS?

I. VALUES THAT DUE PROCESS NOTICE REQUIREMENTS SERVE:

a. Dignity values: must uphold the individual’s right to litigate or individual may suffer

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 humiliation/loss of self-respect.
b. Participation values: individual exerting influence or have their wills “counted” in
societal decisions they care about.
c. Deterrence values: litigation constrains individual behavior in ways thought socially
desirable.
d. Effectuation values: give individuals the opportunity to fight for what they believe is
actually theirs.
II. SERVICE OF PROCESS BEGINS THE ACTION IN SOME STATE COURTS, BUT RULE 3 GOVERNS FEDERAL
COURTS: THE ACTION BEGINS WITH THE FILING OF THE COMPLAINT.
A. 4M: 120 DAYS TO SERVE OR NEEDS TO SHOW REASON WHY SERVICE WAS NOT GIVEN TO D,
6(B): EXTENSION. IF SERVICE IS IMPROPER, COURT MAY QUASH THE ENTIRE ACTION OR JUST
THE SERVICE
III. PROPER SERVICE OF PROCESS BEGINS WITH PROPER NOTIFICATION:
a. NOTICE MUST BE REASONABLY CALCULATED TO REACH THE INTERESTED PARTIES.
MULLANE. [REASONABLE TEST]
I. ACTUAL (DIRECT) AND CONSTRUCTIVE (LEGAL FICTION)
ii. PUBLICATION IS INSUFFICIENT WHEN OTHER, MORE EFFECTIVE METHODS ARE AVAILABLE,
BUT WHEN THE PERSON NEEDED HAS NO KNOWN ADDRESS OR LOCATION THEN
NEWSPAPER PUBLICATION IS THE ONLY WAY TO GO. MULLANE
iii. THE SUBSTITUTE FOR DIRECT SERVICE HAS TO BE THE ONE MOST LIKELY TO REACH D.
MCDONALD V. MABEE
iv. WHEN NOTICE IS NOT REASONABLY CERTAIN TO REACH THE PARTIES, THE FORM CHOSEN
MUST NOT BE SUBSTANTIALLY LESS LIKELY TO BRING HOME NOTICE THAN OTHER OF THE
FEASIBLE AND CUSTOMARY SUBSTITUTES. MULLANE.
B. RULES OF SERVICE: RULE 4 OF THE FEDERAL RULES OF CIVIL PROCEDURE GOVERNS
SUMMONS
i. Form (4a)—the same master form must be filled out by P to be
delivered to D along with the complaint.
ii. Waiver of Service (4d)—The D has a duty to save costs of
service and should request waiver. The D does not thereby
waive the right to object to venue or jurisdiction. P notifies D of
the commencement of action and request that the D waive
service of a summons: The request is in writing
1. The court shall impose the costs subsequently incurred in
effecting service on the defendant if they do not waive
unless good cause is shown. 4(d)
iii. Through first class mail and attached to a copy of the
complaint 4(c)(1)
iv. Shall allow the defendant a reasonable time to return the
waiver. (1993—may refuse in order to use S.O.L. and then the P
is required to personally serve. The amended rule allows the
defendant 60 days to answer the complaint if they waive formal
service through the mail.
1. Federal Rule 5(b): amended in 2001 allows service by electronic means
when consented to in writing by the person served.
v. Federal courts may take advantage of state long arm statutes—

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 4(e).
vi. You may serve anyone in the US and anyone in an extradition
country 4(f)
vii. Service upon people who cannot “actually be served”, infant,
corps, the US Government done through a different means. 4(g)
(i)
viii. Property may be seized if summons is not feasible in the district
where the suit is brought, through the manner provided by law.
4(n)
1. see below for proper rules.
ix. Aguchak v. Montgomery Ward Co.: Not only does notice have to
be sufficient, but notice must be correct in that it provides in
formation about written pleadings, change of venue, etc.
x. Outside of the US 4f: do not violate sovereignty!
C. NOT THE ACTUAL PERSON BEING SERVED:
i. Federal Rule 4(e)(2): Service on a Person Residing in D’s
Dwelling
1. You may leave a summons with someone who lives in the
same place as the person being served as long as they
are of age etc.
ii. Federal Rule 4(e)(2): Delivery to an Agent authorized by
appointment
1. Evidence that D intended to confer authority upon the
agent.
D. SERVING A CORPORATION:
I. RULE 4H
ii. INSURANCE CO. OF N.AMERICA V. S/S HELLENIC CHALLENGER:
1. CONSTRUE RULES IN A MANNER REASONABLY CALCULATED TO EFFECTUATE THEIR
PRIMARY PURPOSE OF GIVING D NOTICE.
2. IT IS NOT LIMITED TO FORMALLY TITLED OFFICERS—“TO PEOPLE INTEGRATED
INTO THE COMPANY SO THAT THEY KNOW WHAT TO DO WITH THE PAPERS”.
A. RECEPTIONIST WAS CONSIDERED LEGIT IN ONE CASE IF SHE KNEW WHAT
TO DO WITH IT.
b. NOT OK: AN OFFICER IN ANOTHER COMPANY WHICH IS OWNED BY THE
SAME PERSON AS A THE COMPANY RELIANCE MUST BE PLACED ON THE
PERSON WITHIN TO THE COMPANY TO GET SUMMONS IN THE RIGHT
HANDS.
E. CANNOT FIND THE PERSON TO BE SERVED:
i. (NY) it is the fault of D for not leaving a correct forwarding
address and not receiving notice. (Dobkin v. Chapman).
ii. Due Process is not violated where the third party to a contract
agreement receives summons and transmits it to the party. It
might be a different case if the agent had not given prompt
notice to the respondents, for then the claim might well be
made that her failure to do so had operated to invalidate the
agency. National Equipment Rental, Ltd.v. Szukhent.

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 IV. WHERE CAN’T YOU SERVE AND WHEN IS SERVICE NOT BINDING?
a. IN COURT, BUT YOU CAN SERVE IN PRISON. State Ex. Rel. Sivnksty v. Duffield
b. Wyman v. Newhouse: tricking someone and bringing someone into a
jurisdiction is different than flushing someone out of hiding in the
same state. Trickery to flush out of hiding is allowed in some
jurisdictions but not all, but tricking or fraudulently establishing in
personam jurisdiction is not a binding summons.
V. WHAT IS NOT SUFFICIENT NOTICE?
a. Not: Posting on apartment doors (Greene v. Lindsey)
b. Someone is insane and without guardian, mail service (Covey v.
Town of Somers).
c. Receipt in the mail is not due process. If D does not do anything
about it- this does not meet the service requirement; he must prove
good cause for not responding or he will bear the direct service cost.
Maryland State Firemen’s Association
d. FEDEX etc. do not count as service. Audio Enterprises.
VI. § 1335: THE ONLY GENERAL JURISDICTIONAL STATUTE THAT HAS NATIONWIDE SERVICE OF PROCESS—ITS FOR
BANKS OR INSURANCE COMPANIES TO FIND OUT IF THEY HAVE MORE THAN ONE PERSON CLAIMING AN ACCOUNT
OR POLICY.
VII. RETURN OF SERVICE AND OPPORTUNITY TO BE HEARD:
A. D GETS 20 DAYS TO RESPOND FED RULE 12(A)
B. AN AFFIDAVIT MUST BE FILED BY THE PERSON WHO SERVED TO D.
I. LEGISLATURE WARDS AGAINST “SEWER SERVICE”
VIII. PRE-JUDGMENT HEARINGS AND SEIZURE:
a. TWO TYPES OF SEIZURE: QUASI IN REM (2) SHAFFER ENDS AND PROTECTIVE ATTACHMENT:
ASSURE THE PROPERTY WILL BE THERE AT THE END OF THE SUIT.
b. Recipient of governmentally funded assistance must be give the
opportunity for an evidentiary hearing prior to the termination of
benefits Goldberg v. Kelly
c. Struck down a prejudgment wage garnishment procedure as
a violation of due process guarantees. Sniadach.
d. BEFORE SEIZING PROPERTY THE D MUST BE GIVEN AN OPPORTUNITY TO BE HEARD IN THE FORM
OF A HEARING. FUENTES V. SHEVIN, CONN. V. DOEHR
i. Court does not distinguish between the importance and different kinds of
property: North Georgia Finish Inc. v. Di-Chem
II. EXCEPTIONS:
1. (1) the seizure has been directly necessary to secure an
important government or general public interest. (2)
there has been a special need for very prompt action. (3)
the state has kept strict control over its monopoly of
legitimate force; the person initiating the seizure has
been a government official responsible for determining,
under the standards of a narrowly drawn statute, that it
was necessary and justified in the particular instance.
2. Mitchell v. W.T. Grant Co.: Louisiana has enough
safeguards to not need a pretrial hearing—but this is

10
 heavily criticized. Protects property from going
somewhere.
3. Termination of social security benefits: Matthews v.
Eldridge (post termination is fine)
4. Possibly in some contract cases (Shaumyan)
IX. “Provisional Remedies”:
a. temporary restraining orders Rule 65(b), preliminary injunctions, pre-
action attachments and the like—that play an important role in
consumer and other commercial disputes.

ISSUE III: VENUE AND FORUM NON CONVENIENS

I. WHAT IS VENUE?
a. VENUE CAN BE WAIVED: MOTIONS OF VENUE ARE DISRECTIONARY AND MUST
BE ARGUED IN THE FIRST PLEADING
B. VENUE IS A DOCTRINE THAT SERVES TO “ALLOCATE CASES AMONG THE SAME TYPE OF COURTS WITHIN
A GIVEN JUDICIAL SYSTEM”.
C. VENUE=THE PLACE OF THE TRIAL WITHIN A STATE. LAY=SELECTING THE PLACE
D. MAIN CONSIDERATIONS:
I. (1) CONVENIENCE OF THE PARTIES (2) CONCERNS OF JUDICIAL ECONOMY
II. HOW IS DIFFERENT THAN PERSONAL JURISDICTION?
A. UNLIKE PJ AND SMJ, THE VENUE OF A CIVIL ACTION IS A STATUTORY AND NOT A CONSTITUTIONAL
QUESTION.
III. WHAT IS THE PROPER VENUE?
A. DEPENDS UPON A COMBINATION OF:
I. THEORY OF CLAIM, SUBJECT MATTER OF THE CLAIM, PARTIES INVOLVED
b. GENERAL PURPOSE OF VENUE STATUTES (GO THROUGH EACH OF THESE):
I. PROTECT DS AGAINST UNFAIR OR INCONVENIENT TRIAL LOCATION
II. LOCATION OF EVIDENCE AND WITNESSES
III. FAMILIARITY WITH THE LAW—NOT WANTING THE TRANSFEREE COURT TO HAVE TO UNTANGLE
A BUNCH OF UNFAMILIAR LAW.
IV. P’S CONVENIENCE WAS NOT A RELEVANT FACTOR
V. IN ONLY RARE CASES SHOULD THERE BE MORE THAN ONE DISTRICT IN WHICH A CLAIM CAN BE
SAID TO ARISE.
IV. DIFFERENCE BETWEEN STATE AND FEDERAL VENUE PROVISIONS:
A. STATE HAS STATUTORY RULES, BUT USE FORUM NON CONVENIENS INSTEAD OF THE STATUTES TO
DISMISS CASES INSTEAD OF TRANSFERING THEM.
B. DROP DOWN IN THE OUTLINE AS TO WHETHER STATE OR FEDERAL RULES APPLY.
V. COMMON STATE STATUTORY VENUE PROVISIONS:
A. WHERE THE SUBJECT OF ACTION OR PART THEREOF IS SITUATED: CL CONCEPT: ACTIONS WHICH WERE
LOCAL BECAUSE THE FACTS COULD HAVE OCCURRED ONLY IN A PARTICULAR PLACE.
i. LOCAL ISSUES SHOULD BE HANDLED LOCALLY: TRIAL CONVENIENCE
II. OUTWEIGHS CONSIDERATIONS TO THE PARTIES OR WITNESSES.
B. WHERE D RESIDES OR DOES BUSINESS, OR HAS AN OFFICE/BUSINESS (CORP).
C. WHERE P RESIDES OR DOES BUSINESS:
I. NOT OFTEN USED, PURELY FOR CONVENIENCE TO P, WHEN D IS NONRESIDENT OR FOREIGN

11
 CAUSE OF ACTION.
D.
WHERE THE SEAT OF GOVERNMENT IS LOCATED: ACTIONS AGAINST GOV.
E.
MOST BROAD:
I. IN ANY COUNTY WITHIN THE JURISDICTION.
F. LESS POPULAR:
I. WHERE A FACT IS PRESENT OR HAPPENED. (NORMALLY SPECIAL CIRCUMSTANCES)
II. WHERE D MAY BE SUMMONED OR SERVED
III. IN A COUNTY DESIGNATED IN P’S COMPLAINT
G. THE RULES DO NOT NECESSARILY HAVE TO BE FAIR TO ALL PARTIES/NOR COMPLETELY CONSISTENT—
THEY CAN SERVE LOCAL INTERESTS:
i. Burlington Northern R.R. Co v. Ford (1992): Montana’s venue rules permit a P
to sue a corporation incorporated in Montana only in the county of its principal
place of business, but permits suit in any county against a corporation, like D in
this case, that is incorporated elsewhere. 9-0.
ii. One may designate a forum selection clause of contracts a place to litigate
outside of the state’s venue statues purview: National Equipment Rental, LTtd.
V. Szukhenti.
VI. FEDERAL STATUTORY RULES:
A. 28 USC § 1391: VENUE GENERALLY, A SUIT MAY BE BROUGHT IN:
i. 1391A: DIVERSITY, WHERE THE D RESIDES, A SUBSTANTIAL PART OF THE EVENTS GIVING
RISE TO THE CLAIM OCCURRED OR WHERE A SUBSTANTIAL PART OF THE PROPERTY IN DISPUTE
IS SITUATED, WHERE D HAS PERSONAL JURISDICTION AND IT CANNOT BE BROUGHT
ELSEWHERE.
ii. 1391B: NOT DIVERSITY, D RESIDES, A SUBSTANTIAL PART OF THE EVENTS GIVING RISE
TO THE CLAIM OCCURRED OR WHERE A SUBSTANTIAL PART OF THE PROPERTY IN DISPUTE IS
SITUATED, WHERE D MAY BE FOUND IT CANNOT BE BROUGHT ELSEWHERE.
1. BATES V. C &S ADJUSTERS: A CLAIMS NOTICE IN THE MAIL IS WHERE A
SUBSTANTIAL PART OF THE EVENTS AROSE—THE COLLECTIONS NOTICE IN THE MAIL
SATISFIES THIS.
III. 1391C: WHEN THERE ARE MULTIPLE DISTRICTS WITHIN THE STATE, THE COURT SHOULD APPLY
THE NORMAL MINIMUM CONTACTS ANALYSIS BETWEEN THE DIFFERENT DISTRICTS.
VII. FEDERAL TRANSFERS:
a. In deciding motions to transfer the settled view is that the P’s choice of forum should
rarely be disturbed—rarely is not never.
b. The P wins in 58% of the nontransferred cases but only 29% of the cases in which
transferred occurred. Pp. 346
c. Hoffman: bars the transfer of a case to a district that lacks PJ over the D.
D. 28 U.S.C. §1404(A) CHANGE OF VENUE
I. FOR THE CONVENIENCE OF PARTIES AND WITNESSES, IN THE INTEREST OF JUSTICE, A DISTRICT
COURT MAY TRANSFER ANY CIVIL ACTION TO ANY OTHER DISTRICT OR DIVISION WHERE IT
MIGHT HAVE BEEN BROUGHT.
ii. IN ORDER TO TRANSFER UNDER 1404(A), P MUST HAVE ORIGINALLY BEEN ABLE TO BRING
THE SUIT TO THE PLACE BEING TRANSFERRED TO (HOFFMAN V. BLASKI).
1. The power of a District Court under 1404(a) to transfer an action to
another district is not made upon the wish or waiver of the defendant,
but upon whether the transferee district was one in which the plaintiff

12
 might have brought the action. Hoffmann v. Blaski.
iii. THE CURRENT FORUM’S LAW GOES WITH THE CASE TO THE NEW FORUM (VAN DUSEN: FOR
DIVERSITY CASES).
1. Ferens v. John Deere Co.(1990) pp. 347: Regardless of who initiates the
transfer, the transferee forum is required to apply the law of the
transferor court.
a. Clever Ps: Intentionally bring suit in an inconvenient forum with
favorable law and then move for transfer under section 1404(a)
ending up with both the forum and law of her choice
e. 28 U.S.C. § 1406 Cure of Waiver of Defects
i. (a) The district court of a district in which is filed a case laying venue in the
wrong diversion or district shall dismiss, or if it be in the interest of justice,
transfer such case to any district or division in which it could have been
brought.
ii. (b) Nothing in this chapter shall impair the jurisdiction of a district court of any
matter involving a party who does not interpose timely and sufficient objection
to the venue.
iii. Dismissal or transfer—the law of the new forum applies/org. law does not
follow
iv. Goldlawr, inc. v. Heiman (1962): 1406 allows the transfer of an action even if
the transferor court lacks personal jurisdiction. In the interests of justice it may
require transfer without penalty to the P. Heavily criticized for obvious reasons,
too much benefit to the P.
f. LOOPHOLE: Exception to removal- home state defendant being sued
in home state cannot remove to federal court on the basis of
diversity. Called pinning- pin defendant in state ct. by bringing claim
in his own state.
VIII. FORUM NON-CONVENIENS:
A. A COURT MAY RESIST THE IMPOSITION UPON ITS JURISDICTION EVEN WHEN JURISDICTION IS
AUTHORIZED BY THE LETTER OF A GENERAL VENUE STATUE GULF OIL V. GILBERT (1947)
I. ESTABLISHES A BALANCING TEST: PRIVATE INTERESTS OF LITIGANTS AND THE PUBLIC INTEREST
—SEE POINT VIIIF.
1. CF: “Courts have acknowledged that modern modes of transportation,
multilateral treaties providing for service abroad and other procedural
mechanisms for international litigation, render Gilbert’s private interest
analysis, virtually obsolete”. Pg. 357, Boyd
b. NO NEED FOR A MOTION, THE COURT CAN APPLY IT ALONE. STATES DO NOT HAVE THE OPTION OF
TRANSFER HORIZONTALLY WITHOUT CONSENT OF THE OTHER COURT, SO DISMISSAL UNDER FNC IS USED.
C. IT IS NOT OFTEN USED: MAINLY WITH FOREIGN DS AND IN STATE COURTS.
d. The central focus is convenience; dismissal isn’t barred solely because of the
possibility of an unfavorable change in law (C. of law should not be weighed
heavily). Piper Aircraft Co. v. Reyno 454 U.S. 235 (1981) (p. 293)
e. Dismissal is ordinarily appropriate where P’s forum choice imposes a heavy
burden on defendant or the court and plaintiff can’t give a specific reason of
convenience supporting that choice of forum. Piper Aircraft Co. v. Reyno
F. TEST: COMBINATION AND WEIGHT OF THE FOLLOWING FACTORS:

13
 I. THERE MUST BE ANOTHER ADEQUATE FORUM FROM WHICH THE P MAY OBTAIN
RELIEF
II. OTHER FACTORS (PRIVATE INTEREST):
1. PRIVATE INTEREST OF THE LITIGANTS.
2. RELATIVE EASE OF ACCESS TO EVIDENCE
3. AVAILABILITY OF WITNESSES
4. COMBINING CLAIMS FOR EFFICIENCY: ONE PLACE CAN HEAR ALL OF THE CLAIMS
WHILE OTHERS CANNOT
5. POSSIBILITY OF VIEW OF PREMISES, IF VIEW BE APPROPRIATE (ACTUALLY LOOKING AT
THE REAL PROPERTY IN CASES DEALING WITH PROPERTY)
6. ALL OTHER FACTORS INCLUDED TO HAVE AN EFFICIENT TRIAL—INCLUDING CHOICE
OF LAW ISSUES
iii. FACTORS OF PUBLIC INTEREST—ADMINISTRATIVE DIFFICULTIES
1. TOO MANY CASES ON THE ROLLS
2. JURY DUTY BURDENS THAT OUGHT NOT BE IMPOSED
3. THERE IS A LOCAL INTEREST IN HAVING LOCAL PROBLEMS RESOLVED LOCALLY.
4. THERE IS AN INTEREST IN DIVERSITY CASES TO HAVE THE TRIAL IN THE PLACE WHERE
THE STATE LAW GOVERNS SO COURTS DO NOT HAVE TO DEAL WITH COMPLICATED
ISSUES OF LAW.
iv. The forum non conveniens determination is at the discretion of the trial
court and deserves substantial deference when the court has considered all
relevant private and public interest factors and its balancing of those
factors is reasonable. Piper Aircraft Co.
g. Avoiding FNC:
i. Ways to ward against fnc to protect D’s interests: forum-selection clause in
contracts AND Commence a parallel proceeding in a foreign forum and to seek
injunctive or declaratory relief.
ii. WIWA v. Royal Dutch Petroleum Co.: The greater the P’s ties to the P’s chosen
forum, the more likely it is that the P would be inconvenienced by a requirement
to bring the claim in a foreign jurisdiction. If in Piper the victims were
American, the suit would have gone forward.
iii. Iragorri v. United Technologies Corp.: The more it appears that a domestic or
foreign plaintiff’s choice of forum has been dictated by reasons that the law
recognizes as valid, the greater the deference that will be given to the P’s choice
of forum.
h. In diversity actions in which Erie applies, state notions of fnc must also apply.
IX. ORGANIZATIONS AND VENUE:
a. Denver & R.G.W.R. Co. v. Brotherhood of Railroad Trainmen, 387 US 556 (1967): For
venue purposes, an unincorporated association is determined by looking to the
residence of the association itself rather than that of its individual members.
X. Is this a Supplemental claim?
a. Derivative venue: refers to venue over a particular claim or party that is derived from
venue some other claim or party in the same lawsuit—venue that would not exist
independent of the other claim or party.
i. Bredberg v. Long, 778 F.2d 1285 (8th Cir. 1985): Where venue is proper for the
original claims by a P against D and additional claims are asserted as

14
 counterclaims or cross-claims, or come in through impleader, interpleader, or
intervention, a venue objection may be unavailable as to the additional claims
ii. Where a federal court (in the absence of diversity of citizenship) exercises
pendent jurisdiction over state-law claims joined with federal claims, an
independent basis for venue over the state-law claims is unnecessary.
XI. INTERNATIONAL ISSUES:
a. TRIBUNALS: ONLY IF THE TRIBUNAL APPEARS TO BE LEGITIMATE AND THAT P WILL GET SOME RELIEF
WILL THE AMERICAN COURT DISMISS UNDER FNC.
I. ALTHOUGH OUT OF COUNTRY DS ARE REQUIRED TO WAIVE ANY PROCEDURAL HOLDUPS IN
OTHER FORUMS BEFORE A MOTION OF FNC WILL BE GRANTED, THIS IS GENERALLY NOT ENOUGH
TO ENSURE THAT THE PS WILL OBTAIN JUSTICE.
b. ALIEN TORT CLAIMS ACT: ALLOWS FOREIGN LITIGANTS TO SUE IN US COURTS TO REDRESS HUMAN
RIGHTS VIOLATIONS SUCH AS TORTURE AND ETHNIC CLEANSING.
C. FOR PROPERTY OUTSIDE OF THE US, THERE PROBABLY IS NO US VENUE APPROPRIATE TO SETTLE THE
MATTER.

ISSUE IV: JUDICIAL POWER OVER SUBJECT MATTER

I. ALL SUBJECT MATTER JURISDICTION DERIVES FROM ARTICLE III, SECTION II OF THE CONSTITUTION:
a. The judicial power shall extend to all cases, in law and equity, arising under this Constitution, the laws of
the United States, and treaties made, or which shall be made, under their authority;--to all cases affecting
ambassadors, other public ministers and consuls;--to all cases of admiralty and maritime jurisdiction;--to
controversies to which the United States shall be a party;--to controversies between two or more states;--
between a state and citizens of another state;--between citizens of different states;--between citizens of
the same state claiming lands under grants of different states, and between a state, or the citizens thereof,
and foreign states, citizens or subjects.
II. THERE ARE DIFFERENT TYPES OF SUBJECT MATTER JURISDICTION COURTS RECOGNIZE:
A. LOOK FOR ALL THREE AND NOTE: THE COURT NEEDS NO MOTION (COURTS OF LIMITED
JURISDICTION)—IT IS THEIR DUTY TO ENSURE A JUST FORUM FOR SUBJECT MATTER.
I. DIVERSITY JURISDICTION
II. FEDERAL QUESTION JURISDICTION
1. EXCLUSIVE—CLEARLY A FEDERAL ISSUE
2. CONCURRENT: P HAS A CHOICE (OR COURT INTERPRETS A CHOICE)
III. SUPPLEMENTAL JURISDICTION
1. WHICH IS DISCRETIONARY
III. DIVERSITY JURISDICTION
A. CODIFIED IN 28 USC § 1332 (PP. 224)
I. FEDERAL COURTS HEAR CLAIMS UNDER STATE LAW
II. (ALSO LAYS OUT RULES FOR CLASS ACTION GROUPS THAT MUST BE LOOKED AT IF THE Q HAS
CLASS ACTION)
b. THE DISTRICT COURTS SHALL HAVE ORIGINAL JURISDICTION OF ALL CIVIL ACTIONS WHERE THE MATTER
IN CONTROVERSY EXCEEDS THE SUM OR VALUE OF 75K (ENSURE IT IS AT LEAST 75,001, EXCLUSIVE
OF INTEREST AND COSTS, AND IS BETWEEN:
I. CITIZENS OF DIFFERENT STATES
II. CITIZENS OF A STATE AND CITIZENS OR SUBJECTS OF A FOREIGN STATE
III. CITIZENS OF DIFFERENT STATES AND IN WHICH CITIZENS OR SUBJECTS OF A FOREIGN STATE
ARE ADDITIONAL PARTIES, AND

15
 IV.A FOREIGN STATE AS P AND CITIZENS OF A STATE OR OF DIFFERENT STATES.
c. COMPLETE DIVERSITY IS REQUIRED: NO SAMENESS ON OPPOSITE SIDES OF THE V.
I. ALL DS MUST BE CITIZENS OF STATES DIFFERENT FROM ALL PS.
ii. Marshall: Strawbridge v. Curtiss:: If any P is a citizens of the same state as any
D, no matter how many parties are involved in the litigation—there is no
diverse effect.
iii. Contamination Theory: The inclusion of a claim or party outside the DC’s
original jurisdiction contaminates every other claim in the complaint, depriving
the court of original jurisdiction over any of these claims.
iv. Article III only requires minimum diversity but the courts have been clear that
maximum diversity is required.
D. WHAT IS CITIZENSHIP BY DIVERSITY STANDARDS?
I. FOR DIVERSITY PURPOSES, EACH OF US IS A CITIZEN OF ONLY ONE STATE.
1. CITIZENSHIP (AND THUS DIVERSITY) IS DETERMINED ON THE DAY OF THE
INSTITUTION OF THE ACTION. EXCEPT IN A MOTION REMOVE, THEN IT IS
MEASURED ON THE DAY OF THE FILING OF THE MOTION.
2. THOUGH DRED SCOTT WAS OVERTURNED BY CONSTITUTIONAL AMENDMENT a
threshold issue in determining the existence of diversity jurisdiction
continues to be whether an individual or entity is a citizen of a state for
purposes of 1332.
A. DOMICILE IS EQUIVALENT TO CITIZENSHIP.
I. AN INDIVIDUAL'S CITIZENSHIP, OR DOMICILE, IS THE DOMICILE OF
BIRTH, CONTINUED THROUGH LIFE WHICH IS PRESUMED TO
CONTINUE THROUGH LIFE UNLESS: THE INDIVIDUAL PHYSICALLY
CHANGES HIS OR HER STATE AND THE INDIVIDUAL DOES THAT
WITH THE INTENTION OF REMAINING IN THE NEW STATE FOR THE
INDEFINITE FUTURE.MAS V. PERRY, PALAZZO V. CORIO
1. BEING A STUDENT IS NOT CHANGING DOMICILLARY MAS V.
PERRY
2. YOU DO NOT FOLLOW YOUR PARTNER’S DOMICLE IN
MARRIAR MAS V. PERRY
B. THE ISSUE IS: WHERE IS THAT PERSON'S CENTER OF GRAVITY. WHERE IS
THAT PERSON'S CITIZENSHIP, AS DETERMINED BY THE CENTER OF GRAVITY OF
THAT LIFE?
II. CORPORATIONS HAVE TWO CITIZENSHIPS, UNLIKE NATURAL PEOPLE, WHO ONLY HAVE ONE.
1. TREATED AS A CITIZEN OF THE STATE OF ITS INCORPORATION.
2. THE STATE WHERE IT HAS ITS PRINCIPLE PLACE OF BUSINESS.
A. PRINCIPLE PLACE OF BUSINESS TESTS:
i. Nerve Center Test: The locus of corporate decision-
making authority
ii. Corporate Activities or Operating Assets Test: Location
of production or service activities.
iii. Total Activity: Hybrid of Nerve Center and Operating
Assets. Realistic, flexible, and nonformalistic approach.
3. Woods v. Interstate Realty Co.: If the corporation does not have
incorporated status in another state, they may not sue in diversity.

16
 III.
ALL NON CORPS AND GROUPS: UNINCORPORATED ASSOCIATIONS: LABOR UNIONS
AND PARTNERSHIPS:
1. YOU CUMULATE THE STATES OF ALL OF THE MEMBERS OF THE UNINCORPORATED
ASSOCIATIONS.
a. CARDEN VS. ARKOMA: To have complete diversity over a party
not a natural person or a corporation, the citizenship of all
partners/union members must be considered.
b. United Steelworkers v. RH Bouligny, Inc.: an unincorporated
association is not treated as a citizen but instead courts consider
the citizenship of each member.
iv. PARTIES IN REPRESENTATIVE ACTIONS: ACTIONS BROUGHT BY OR AGAINST A REPRESENTATIVE
OF A DECEASED'S ESTATE; A REPRESENTATIVE OF A CHILD; A REPRESENTATIVE OF AN
INCOMPETENT PERSON, SHAREHOLDER DERIVATIVE SUITS AND CLASS ACTIONS.
1. THE HISTORIC RULE WAS WHEN AN ACTION IS BROUGHT BY A REPRESENTATIVE IS
BASED ON THE CITIZENSHIP OF THE REPRESENTATIVE.
2. IN 1980S, CONGRESS PASSED A STATUTE THAT OVERRODE THE HISTORICAL RULE IN
ACTIONS INVOLVING CHILDREN, INCOMPETENTS, AND ESTATES: IN ACTIONS INVOLVING
THOSE CATEGORIES OF REPRESENTATIVES, DIVERSITY OF CITIZENSHIP IS TESTED IN
TERMS OF THE CITIZENSHIP OF THE REPRESENTED.
A. BUT FOR CLASS ACTIONS AND SHAREHOLDER DERIVATIVE SUITS THE
TRADITIONAL RULE LIVES.
V. PEOPLE NOT CITIZENS OF THE UNITED STATES:
1. The basic goal of the alien diversity law is not to interfere in foreign
issues in which the US court does not have a place and to not discourage
foreign investment.
2. Stateless people cannot sue in diversity: Blair Holding Corp. v.
Rubinstein
3. Tango Music LLC v. Deadquick Music, Inc.: Posner held that diversity
was unaffected when aliens on both sides of the v. were from the same
country.
4. Permanent resident alien is citizen of the state he lives. Singh v.
Daimler-Benz, 9 F.3d 303 (3d Cir. 1993): An alien corporation can sue a
permanent resident alien in a federal court by 1332a.
5. Ruhrgas AG v. Marathon Oil Co.: aliens on both sides of the action
“rendered diversity incomplete”.
E. NOMINAL OR FORMAL PARTIES:
i. Rose v. Giamatti, 721 F. Supp. 906 (S.D. Ohio 1989): Must regard the parties
and disregard the nominal or formal parties in the action—and determine
diversity based upon the “real parties”. A real party in interest D is one who, by
substantive law, has the duty sought to be enforced or enjoined. A nominal or
formal party is one who has no interest in the result of the suit. Nominal parties
are excluded for the diversity discussion.
F. CANNOT BE CREATED FRAUDENTLY:
i. 28 USC 1359: DC shall not have jurisdiction of a civil action in which a party
has been improperly or collusively made or joined to invoke the jurisdiction of
such court. BUT you can still have someone represent you if it is legitimate.

17
 ii. Kramer v. Caribbean Mills, Inc): You cannot fraudulently create diversity by
hiring someone to file suit on your behalf. Anything that destroys or creates
diversity through assignment should be scrutinized.
g. AMOUNT IN CONTROVERSY:
I. THE MATTER IN CONTROVERSY MUST BE MORE THAN $75,000 (HAS TO BE GREATER THAN),
EXCLUSIVE OF, NOT COUNTING, INTEREST AND COSTS.
1. YOU MAY COUNT STATUTORY ATTORNEY FEES AND PUNITIVE DAMAGES.
II. WHERE THE OTHER ELEMENTS OF JURISDICTION ARE PRESENT IN A DIVERSITY ACTION AND AT
LEAST ONE NAMED P IN THE ACTION SATISFIES THE AMOUNT-IN-CONTROVERSY REQUIREMENT,
1367 DOES AUTHORIZE SUPPLEMENTAL JURISDICTION OVER THE CLAIMS OF OTHER PS IN THE
SAME ARTICLE III CASE OR CONTROVERSY. EXXON V. ALLAPATTAH.
1. AN EXERCISE IN SUPPLEMENTAL JURISDICTION (1367, SEE BELOW)
2. HIGHLY CRITICISED BY GINSBURG IN DISSENT.
III. THE RULE HAS BEEN THAT A SINGLE P AND A SINGLE D, YOU CAN AGGREGATE THE CLAIMS;
YOU CAN ADD THEM UP EVEN IF THE CLAIMS ARE UNRELATED FROM ONE ANOTHER. (20,000
FOR TORT, 60,000 FOR BREACH OF CON. ETC)
IV. BUT THE RULE IS EXACTLY THE REVERSE WHEN YOU'RE TRYING TO ADD UP THE CLAIMS OF
TWO PLAINTIFFS OR FIVE PLAINTIFFS AGAINST A DEFENDANT; OR A SINGLE PLAINTIFF'S CLAIM
AGAINST MULTIPLE DEFENDANTS. IN OTHER WORDS, YOU CANNOT AGGREGATE IN THE MULTI-
PARTY SITUATION, UNLESS THE CLAIMS REALLY ARE JOINT CLAIMS, LIKE UNDIVIDED INTEREST
CLAIMS.
V. SCOTUS HAS SAID THAT, BASICALLY, THE COURT IS SUPPOSED TO ACCEPT A P’S
ALLEGATION OF JURISDICTIONAL AMOUNT, UNLESS THE COURT IS CONVINCED TO A LEGAL
CERTAINTY THAT THE P CANNOT RECOVER THE JURISDICTIONAL AMOUNT.
H. WHAT IS THE PURPOSE OF DIVERSITY JURISDICTION AND WHAT ENDS DOES IT SERVE?
i. Bank of the United States v. Deveaux: The desire to avoid discrimination against
out-of-state residents in state courts.
ii. Pros:
1. State-court prejudice against out-of-state parties still exist and provincial
attitudes especially amongst jurors, can interfere with justice.
2. Superiority of the federal courts
3. Fear of investors in corporations that local prejudice may exist.
4. State courts may not be able to handle class actions.
iii. Cons:
1. Frankfurter: congestion diversity cases cause in federal court.
2. Erie makes diversity cases wasteful and inappropriate.
3. Judicial and legislative authority should be coextensive, and that for
federal courts to decide cases under state law is interference in state
autonomy
4. May retard the development of state law
5. Continuation of diversity jurisdiction diminishes incentives for state
court reform by lobbyists because they avoid state court.
6. Parties use choice of forum for tactical purposes to forum shop.
7. Federal judges dislike of large tort damage awards.
8. Choice of law issues
9. The costs to the court system

18
 I. MULTIPARTY, MULTIFORUM TRIAL JURISDICTION ACT OF 2002:
I. 28 USC 1369: IF AT LEAST 75 PEOPLE DIE IN THE SAME ACCIDENT (SEE STATUTE)
IV. FEDERAL QUESTION JURISDICTION
a. For federal question jurisdiction, the action, plaintiff's cause of action, must arise
under the Constitution, treaties, or laws of the United States. (If it does apply Smith)
i. No amount in controversy
ii. THERE MAY BE OTHER CLAIMS, BUT THE PRESENCE OF STATE LAW DOES NOT ALTER P’S
COMPLAINT IF IT IS BASED UPON FED. JURISDICITON. Chicago v. Internal College of
Surgeons:
b. 1331: Federal Question (basically a codification of Article III of the Constitution for the
DC and COA)
i. codified after the Civil War.
ii. Traditional case: Osborn v. Bank of the United States, Marshall shows that the
jurisdictional grant to the federal court was in all cases to which the bank was a
party based upon the act of Congress.
iii. Said to allow Congress to confer “protective” jurisdiction on the federal courts
“whenever there exists in the background some federal proposition that might
be challenged, despite the remoteness of the likelihood of actual presentation of
such a federal question”.
iv. Berger: Osborn reflects a broad conception of arising under jurisdiction,
according to which Congress may confer on the federal courts jurisdiction
over any case or controversy that might call for the application of federal
law.
C. OTHER SPECIFIC STATUES:
i. 1334: bankruptcy
ii. 1337: Interstate Commerce and Antitrust
iii. 1338: Patents, Copyright Trademark
iv. 1343: Civil Rights Statutes: 42 USC 1983, 85
v. 1345: When US is plaintiff
vi. 1346: When US is defendant
d. ARISING UNDER THE CONSTITUTION, TREATIES, OR LAWS OF THE US:
I. MAIN CONCERN: DID CONGRESS INTEND FOR A PRIVATE CAUSE OF ACTION.
1. WELL-PLEADED COMPLAINT RULE: ARISING UNDER DOES NOT MEAN WHAT CAN BE
DEFENDED AGAINST! IT HAS TO BE STATED IN THE COMPLAINT. SIMPLY ANTICIPATING
A FEDERAL DEFENSE IS NOT A CAUSE OF ACTION; THAT IS SOMETHING FOR THE
DEFENDANT TO ASSERT. LOUISVILLE & NASHVILLE R. CO. V. MOTTLEY
A. ALI WOULD LIKE TO SEE THIS RULE CHANGED.
2. HOLMES GROUP, INC. V. VORNADO CIRCULATION SYSTEMS, INC.: THE FEDERAL LAW
COUNTERCLAIMS CANNOT FORM THE SOLE BASIS FOR FEDERAL QUESTION
JURISDICTION.
ii. SMITH V. KANSAS CITY TITLE & TRUST CO., 255 US 180 (1921): PROVIDES AN EXAMPLE
OF A CLAIM THAT, ALTHOUGH CREATED BY STATE LAW, “ARISES UNDER” A LAW OF THE US
BY VIRTUE OF REQUIRING A DETERMINATION OF THE MEANING OR APPLICATION OF SUCH LAW.
1. THE GENERAL RULE: WHERE IT APPEARS FROM THE COMPLAINT THAT THE RIGHT
TO RELIEF DEPENDS UPON THE CONSTRUCTION OR APPLICATION OF THE
CONSTITUTION OR THE LAWS OF THE US, AND THAT SUCH FEDERAL CLAIM IS

19
 NOT MERELY COLORABLE, AND RESTS UPON A REASONABLE FOUNDATION, THE
DC HAS JURISDICTION.
A. DOES CONGRESS INTEND TO CREATE A PRIVATE CAUSE OF ACTION?
B. IS THERE A STRONG FEDERAL INTEREST?
C. IS THIS ISSUE NORMALLY IN STATE COURT?
D. IS P PART OF THE CLASS THAT THE LAW WAS INTENDED TO PROTECT?
I. IN DISSENT HOLMES SAYS THIS IS NEVER ACTUALLY POSSIBLE.
III. SHOULD BE WITH THE STATES:
1. MOORE V. CHESAPEAKE & OHIO RY: A SUIT BROUGHT UNDER THE STATE STATUTE
WHICH DEFINES LIABILITY TO EMPLOYEES WHO ARE INJURED WHILE ENGAGED IN
INTERSTATE COMMERCE AND BRINGS ALSO A BREACH OF THE DUTY IMPOSED BY THE
US LAWS SHOULD NOT BE REGARDED AS A SUIT ARISING UNDER THE LAWS OF US.
(USE SMITH) INSTEAD.
2. When the decision is based upon interpreting local custom it arises out
of state law. Shoshone Mining Co. v. Rutter:
IV. PRIVATE RIGHTS OF ACTION REFER TO SUITS BROUGHT BY PRIVATE LITIGANTS AGAINT PRIVATE
PERSONS ALLEGDLY ACTION IN VIOLATION OF A STATUTE:
1. THE TEST (CORT V. ASH): WHETHER A PRIVATE RIGHT OF ACTION SHOULD BE IMPLIED
FROM A FEDERAL STATUTE THAT DOES NOT PROVIDE FOR A PRIVATE REMEDY/DOES IT
ARISE OUT OF?
a. one of the class for whose benefit the statute was enacted
b. Is there any indication of legislative intent? Explicitly or
implicitly?
c. Is it consistent with the underlying purpose of the legislative
scheme to imply a remedy for P??
d. Is the cause of action one traditionally relegated to state law?
v. Rights of action may also arise under the Constitution itself Bivens v. Six
Unknown Named Agents of the FB of Narcotics.
VI. THE TEST IN ACTION:
1. A complaint alleging a violation of a federal statute as an element of
a state cause of action, when Congress has determined that there
should be no private, federal cause of action for the violation, does
not state a claim arising under federal law [and therefore federal
courts do not have subject-matter jurisdiction over the claim].
Merrel Dow Pharmaceuticals Inc. v. Thompson 478 U.S. 804 (1986)
a. Here there was a federal cause of action in P’s complaint (unlike
Mottley) – violation of drug labeling rules –but court said the
negligence case didn’t depend on the federal law, so the cause
wasn’t arising under federal law.
b. Grable says that Merrell Dow should not be read as treating the
absence of a private federal right of action as “sensitive
judgments of congressional intent” No private federal cause of
action codified does not mean there is no federal issue.
c. Brennan strongly dissented: Just because they do not create a
private cause of action does not mean it cannot be there. It does
not pre-empt such

20
 i. a state remedy—it requires federal enforcement and
should be encouraged.
2. FEDERAL COURTS OUGHT TO BE ABLE TO HEAR CLAIMS RECOGNIZED UNDER STATE
LAW THAT NONETHELESS TURN ON SIGNIFICANTLY SUBSTANTIAL QUESTIONS OF
FEDERAL LAW, AND THUS JUSTIFY RESORT TO THE EXPERIENCE, SOLICITUDE, AND
HOPE OF UNIFORMITY THAT A FEDERAL FORUM OFFERS ON FEDERAL ISSUES. GRABLE
AND SONS V. DARUE.(MAY BE LIMITED TO TAX LITIGATION)
a. TAX LAW IN THIS INSTANCE AND PROPER SUMMONS: SMITH TEST USED.
vii. Declaratory Judgments
1. Skelly Oil v. Phillips Petroleum Co: does not interfere with the rules of
diversity.
V. SUPPLEMENTAL JURISDICTION: LOOK TO 1367 BEFORE THE CASES
A. IS ALWAYS DISCRETIONARY!!!
B. ISSUES ARISING OUT OF THE SAME NUCLEUS OF COMMON FACTS AND TRANSACTION/OCCURRENCE.
C. 28 USC 1367 CODIFIES THE COMMON LAW PRINCIPLES OF:
i. Pendent Jurisdiction: When the P in her complaint, appends a claim lacking an
independent basis for federal subject-matter jurisdiction to a claim possessing
such a basis.
ii. Ancillary Jurisdiction: When either a P or a D injects a claim lacking an
independent basis for jurisdiction by way of a counterclaim, cross-claim, or
third-party complaint.
1. "Ancillary jurisdiction allowed plaintiffs to bring a case and allowed
defendants to assert jurisdictionally insufficient compulsory
counterclaims, cross claims, and third-party claims: do they come
from the same transaction or occurrence?
iii. Codifies Gibbs.
d. 1367(a):
i. Makes supplemental jurisdiction available in federal question cases with respect
to claims and parties with a common nucleus of operative facts (Same case or
controversy)
ii. Overrules Finley: Impleader against nondiverse third-party Defendants are
authorized as are compulsory counter claims and cross-claims involving
additional parties.
e. 1367(b) (restrictions on supplemental jurisdiction IN DIVERSITY):
i. Codifies Kroger (EXCEPT A PERSON CANNOT INTERVENE UNDER 24A NOR BE JOINED AS A P
UNDER RULE 19 IF IT VIOLATED DIVERSITY).
ii. Cannot use supplemental jurisdiction in favor of P in diversity-based
action.
1. Prohibits supplemental jurisdiction over claims by plaintiffs against
persons made parties through any of the joinder devices of the Federal
Rules when doing so would be inconsistent with the 1332 diversity
statute.
2. OR PUT MORE SPECIFICALLY
iii. Prohibits the use of supplemental jurisdiction when the case is based solely on
diversity jurisdiction, and the jurisdictionally insufficient claim is one by a
plaintiff under Federal Rules 14 third-party practice; 19 and 20, which is

21
 permissive and compulsory joinder; and 24, which is intervention. Also, you
may not join a P as indispensable under rule 19 for supplemental jurisdiction
(Sue them originally).
IV. NO EXCEPTIONS UNDER RULE 20 (PERMISSIVE JOINDER) OR RULE 23 (CLASS ACTION).
v. However, an original defendant MAY break diversity by impleading a
third party defendant under rule 14 if the original plaintiff does not have a
direct claim against the new third party defendant.
vi. Criticisms of 1367B/Examples and Application:
1. That if a claim is asserted against the P, P cannot implead a nondiverse
third-party D who may owe her indemnity or contribution.
2. If a claim is asserted against P, P cannot assert a crossclaim against a
nondiverse co-plaintiff.
3. That a nondiverse third-party D may assert a claim against P, but that P
cannot assert a compulsory counterclaim in response
4. P cannot assert a claim against a nondiverse intervenor or necessary
party, even though their claims against P will invoke supplemental
jurisdiction.
5. Nothing in the text of 1367b withholds supplemental jurisdiction over
the claims of plaintiffs permissively joined under rule 20.
f. 1367(c):
i. Provides the federal courts with discretion to decline supplemental jurisdiction:
1. The claim raise a novel or complex issue of state law
2. The claim substantially predominates over the claim or claims over
which the court has original jurisdiction
3. The court has dismissed all claims over which it has original jurisdiction
4. In exceptional circumstances there are other compelling reasons for
declining jurisdiction
ii. Careful: P’s try to sneak into federal courts with thin federal claims.
g. 1367(d):
i. A period of tolling of the statute of limitations for any of the supplemental
claims that is dismissed. Some parties will desire their entire action to state
court if they are prohibited from raising some or all of their supplemental
claims.
ii. If the federal claim is dismissed the court has discretion on the state law claims.
h. PENDENT JURISDICTION: IN THE SENSE OF JUDICIAL POWER, EXISTS WHENEVER THERE IS A CLAIM
“ARISING UNDER THE CONSTITUTION, THE LAWS OF THE UNITED STATES, AND TREATIES MADE, OR
WHICH SHALL BE MADE UNDER THEIR AUTHORITY AND THE RELATIONSHIP BETWEEN THAT CLAIM AND
THE STATE CLAIMS MADE IN THE COMPLAINT PERMITS THE CONCLUSION THAT THE ENTIRE ACTION
BEFORE THE COURT COMPRISES BUT ONE CONSTITUTIONAL “CASE”: A COMMON NUCLEUS OF
OPERATIVE FACTS.
I. LOOK FOR A BROAD SENSE OF FACT RELATEDNESS
ii. THE FEDERAL CLAIM MUST HAVE SUBSTANCE SUFFICIENT TO CONFER SUBJECT MATTER
JURISDICTION ON THE COURT. State law claims are appropriate for federal court
determination if they form a separate but parallel ground for relief also
sought in a substantial claim based on federal law.
iii. IGNORING THE FEDERAL/STATE DISTINCTION WOLD PLAINTIFF’S CLAIM ORDINARILY BE

22
 CONSTITUTIONAL CASE? UNITED MINE WORKERS OF AMERICA V. GIBBS.
EXPECTED TO BE ONE
1. EXPANDS BEYOND THE MERRELL DOW AND MOTTLEY DISCUSSION BY ALLOWING
STATE LAW CLAIMS IN FEDERAL COURT AS LONG AS THEY ARE PINNED TO LEGITIMATE
FEDERAL SUITS.
IV.PUBLIC POLICY REASONS TO SUPPORT PENDENT JURISDICTION:
1. Ensures that litigants will not be dissuaded from maintaining their
federal rights in a federal court solely because they can dispose of all
claims by one litigation in the state but not the federal forum.
2. Assuming that the litigants are in a federal forum, pendent jurisdiction
serves the interest of avoiding piecemeal litigation, thus promoting
judicial economy and greater expedition for the litigants.
I. PENDENT PARTY JURISDICTION
i. NON-DIVERSE CASE: Aldinger v. Howard: refused to apply pendent jurisdiction to
an additional party with respect to whom no independent basis of federal
jurisdiction existed. They did not completely outlaw it though.
ii. DIVERSITY CASE: Owen Equipment & Erection Co. v. Kroger: A third party
complaint filed under Rule 14(a) ended up breaking diversity after a summary
judgment against the original party. Court: beyond the minimum requirements
established by Aldinger (independent basis for federal jurisdiction), that a
common nucleus of operative facts is important, there must be an examination
of the specific statute that confers jurisdiction over the federal claim, in
order to determine whether “Congress in [that statute] has expressly or by
implication negated the exercise of jurisdiction over the particular
nonfederal claim.
1. YOU MAY NOT BREAK DIVERSITY WITH A THIRD-PARTY
DEFENDANT IF P HAS A CLAIM AS WELL AS D1.
2. LAST CASE BEFORE 1367 CHANGED THE RULES: FINLEY V.
UNITED STATE: stated that Aldinger indicated that the Gibbs approach
would not be extended to the pendant party field (over non-federal Ds),
and they decided to follow that course but tempting Congress to change
the law. Barred pendent party jurisdiction.
J. COUNTERCLAIMS: SEE PARTY AND THIR CLAIMS
I. SUPPLEMENTAL JURISDICTION OVER RULE 13A BUT NOT 13B.
VI. REMOVAL STATUTORY LAW
a. 28 USC §1441(Removable Actions): Ds can remove civil actions from state to federal
court when the federal court has original jurisdiction; if original jurisdiction arises
under Constitution or federal laws then the case is removable without regard to parties’
residences, but in diversity cases, the removal grant is limited. Only Ds can exercise
right of removal; if P is a D in a counterclaim, P still can’t exercise the right of
removal. Subsection (c) provides an exception: when one of the claims is based on a
federal question, the whole case may be removed if the removable federal claims are
separate and independent from any nonfederal claims. The district court can decide all
cases or remand the state issues.
i. Once the removal notice is filed, a motion to remand back to state court must be
raised within 30 days after the filing of the removal notice or no remand.
Exception: if at any time before final judgment the district court finds it lacks

23
 subject matter jurisdiction, the case gets remanded. Merits can’t be addressed
before district court establishes subject-matter jurisdiction, but court can dismiss
based on lack of personal jurisdiction before it raises issue of subject-matter
jurisdiction.

ISSUE V: CHOICE OF LAW

I. CHOICE OF LAW: AFTER DOING PERSONAL JURISDICTION AND SUBJECT MATTER JURISDICTION, DO AN
ANALYSIS OF WHAT IS THE PROPER LAW FOR THE COURT TO USE.
A. DIFFERENT STANDARDS FOR DIFFERENT COURTS:
I. CRIMINAL: 99%, REASONABLE DOUBT, COMMITTING, TAKING KIDS AWAY: 75%, CLEAR
AND CONVINCING, CIVIL ACTION: 51%, PREPONDERANCE
II. CHOICE OF LAW IN STATE COURT
A. ASK FIRST: DOES THE FORUM STATE HAVE AN INTEREST IN DECIDING THE CASE?
I. PREDICTABILITY OF RESULT
II. MAINTAINANCE OF INTERESTATE ORDER
III. SIMPLIFICATION OF JUDICIAL TAST
IV. ADVANCEMENT OF THE FORUM’S GOVERNMENTAL INTERESTS
V. APPLICATION OF THE BETTER RULE OF LAW
VI. FEAR OF FORUM SHOPPING:
1. “To believe that a defendant’s contacts with the forum state should be
stronger under the due process clause for jurisdictional purposes than for
choice of law is to believe that an accused is more concerned with where
he will be hanged than whether.” Silberman.
b. FOR A STATE’S SUBSTANTIVE LAW TO BE SELECTED IN A CONSTITUTIONALLY PERMISSIBLE
MANNER, THAT STATE MUST HAVE (1) A SIGNIFICANT CONTACT OR SIGNIFICANT AGGREGATION
CONTACTS, (2) CREATING STATE INTERESTS, SUCH THAT CHOICE OF ITS LAW IS NEITHER
ARBITRARY NOR FUNDAMENTALLY UNFAIR. ALLSTATE INSURANCE V. HAGUE
I. IN THIS CASE, HE WORKED IN MINNESOTA, HE COMMUTED THERE, AND HIS WIFE MOVED THEM
AFTER HIS DEATH.
c. CHOICE OF LAW: IF A STATE’S LAW IS GOING TO BE USED (WHEN OTHER STATES HAVE CONFLICTING
LAW) IT MUST HAVE SIGNIFICANT CONTACT OR A SIGNIFICANT AGGREGATION OF CONTACTS,
CREATING STATE INTERESTS, SUCH THAT CHOICE OF ITS LAW IS NEITHER ARBITRARY NOR
FUNDAMENTALLY UNFAIR. SHUTTS V. PHILLIPS PETROELUM
i. WHEN THERE ARE CONFLICTS WITH OTHER STATES, THIS ANALYSIS MUST BE EMPLOYED.
d. A FORUM STATE MAY EXERCISE JURISDICTION OVER THE CLAIM OF AN ABSENT CLASS-ACTION
PLAINTIFF, EVEN THOUGH THAT PLAINTIFF DOES NOT POSSESS THE MINIMUM CONTACTS WITH THE
FORUM WHICH WOULD SUPPORT PERSONAL JURISDICTION OVER A DEFENDANT. SHUTTS
i. NOTICE MUST BE SERVED AND THE ABILITY TO “OPT OUT” MUST BE EXPLAINED SHUTTS.
e. PROCEDURAL RULES/STATUTE OF LIMITATIONS IN STATE COURT:
i. Forum State shall use its own procedural rules even if applying the substantive
law of another forum. Sun Oil
ii. The Constitution does not bar application of the forum state’s statue of
limitations to claims that in their substances are and must be governed by
different choice of law (if they desire to). Statutes of limitations are a procedural
matter. Sun Oil v. Wortman

24
 1. THIS CASE MAY HAVE COME OUT DIFFERENTLY IF THE OTHER STATES DID NOT VIEW
THE S.O.L. AS PROCEDURAL AS WELL.
III. CHOICE OF LAW IN FEDERAL COURTS
A. GOVERNING LAW
I. ARTICLE III OF THE CONSTITUTION (SEE ABOVE FOR SECTION II)
II. JUDICIARY ACT OF 1789, SECTION 34: THE RULES OF DECISION ACT
1. 28 U.S. § 1652: State laws as rules of decision
2. The laws of the several states, except where the Constitution or treaties
of the United States or Acts of Congress otherwise require or provide,
shall be regarded as rules of decision in civil actions in the courts of the
United States, in cases where they apply.
iii. 28 USC § 2072: RULES ENABLING ACT
1. RULES OF PROCEDURE AND EVIDENCE; POWER TO PRESCRIBE
a. (a) The Supreme Court shall have the power to prescribe general
rules of practice and procedure and rules of evidence for cases in
the United States district courts (including proceedings before
magistrates thereof) and courts of appeals.
b. (b) Such rules not abridge, enlarge or modify any substantive
right. All laws in conflict with such rules shall be of no further
force or effect after such rules have taken effect.
c. (c) Such rules may define when a ruling of a district court is final
for the purposes of appeal under section 1291 of this title.
iv. § 1291. Final decisions of district courts
1. The court of appeals (other than the United States Court of Appeals for
the Federal Circuit) shall have jurisdiction of appeals from all final
decisions of the district courts of the United States, the United States
District Courts, except where a direct review may be had in the Supreme
Court.
V. ASCERTAINING THE APPLICABLE LAW
1. As soon as the litigation touches two or more states, one is likely to be
confronted with the serious question of choosing between to or more
sources of law.
2. The problem of choosing between federal and state law also is present
when a state court is called upon to decide cases arising under federal
statutes or cases in which federal rights and liabilities are in issue.
3. FORUM SHOPPING MUST BE A PRIMARY CONCERN
B. STATE LAW IN FEDERAL COURTS: CASES AND ISSUES
I. HISTORICAL RULE (OVERTURNED):
1. Held (unanimous): The Rules of Decision Act commanded federal
courts to follow simply the statutory law of the states and not stare
decisis of the courts. 1842. Swift v. Tyson
2. Swift helped simplify commercial law and simultaneously encouraged
the nationalist goals of the federal government because it said it did not
extend into the commercial realm allowing the doctrines of commercial
jurisprudence to trump state judge created law.
a. Abuse of Swft: Black & White Taxicab v. Brown & Yellow

25
 Taxicab: knowing that common law would void a contract in
Kentucky, one company re-incorporated there under Tennessee
law and executed the contract there.
3. Swift was a reflection on natural law, whereas Erie moves towards Legal
Positivism.
ii. THE ERIE DOCTRINE: Creates a twin-aims test: “(1) discouragement of forum-
shopping and (2) avoidance of inequitable administration of the law”.
1. The court is likely to sanction the continued expansion of the Erie
doctrine until convinced that suits brought in federal courts merely to
evade state rules of law have been substantially eliminated.
2. EXCEPT IN MATTERS GOVERNED BY THE FEDERAL CONSTITUTION OR ACTS OF
CONGRESS, THE LAW TO BE APPLIED IN ANY CASE IS THE LAW OF THE STATE;
WHETHER THAT LAW OF THE STATE SHALL BE DECLARED BY ITS LEGISLATURE OR
BY ITS HIGHEST COURT IN A DECISION IS NOT A MATTER OF FEDERAL CONCERN.
ERIE R. CO. V. TOMPKINS
a. OVERTURNS SWIFT V. TYSON. SWIFT: AN UNCONSTITUTIONAL
ASSUMPTION OF POWERS BY THE COURTS IN THE US. THE COURTS
HAVE INVADED RIGHTS WHICH ARE RESERVED FOR THE STATES.
B. NEW RULE – STATE COMMON AND STATUTORY LAW HOLDS IN FEDERAL
COURTS, UNLESS A FEDERAL LAW OR CONSTITUTIONAL ISSUE IS INVOLVED.
GETS RID OF FEDERAL COMMON LAW.
III. ERIE TESTS: RUN THROUGH EACH OF THEM
1. OUTCOME DETERMINATIVE TEST: YORK
2. BALANCING TEST: BYRD
3. PRESUMPTIVELY PROCEDURAL TEST: HANNA
4. PRE-EVENT TEST: HANNA (HARLAN’S CONCURRENCE)
IV. OUTCOME DETERMINATIVE TEST
1. BECAUSE THE CASES ARE BEING TRIED IN DIVERSITY, THE INTENT OF ERIE WAS TO
ENSURE THAT IN ALL CASES WHERE A FEDERAL COURT IS EXERCISING JURISDICTION,
THE OUTCOME OF THE LITIGATION IN THE FEDERAL COURT SHOULD BE
SUBSTANTIALLY THE SAME, SO FAR AS LEGAL RULES DETERMINE THE OUTCOME OF A
LITIGATION, AS IT WOULD BE IF TRIED IN A STATE COURT. GUARANTY TRUST CO OF
NY V. YORK.
2. Statute of limitations are on the border of procedural/substantive (If SOL
were clearly procedural, the Fed. Rules would apply)—the distinction
does not matter if it changes the outcome---substantive rights enforced
by the federal government in diversity is the law of the states.
3. RAGAN V. MERCHANTS TRANSFER & WAREHOUSE CO.: RULE 3 OF THE F. R. OF
CIV. PRO. WAS NOT INTENDED TO GOVERN QUESTIONS CONCERNING THE TOLLING OF
A STATUTE OF LIMITATIONS, AND, THEREFORE, STATE LAW WOULD DETERMINE IN
DIVERSITY WHEN THE STATUTE WAS TOLLED.
4. UNWRITTEN FEDERAL RULES THAT ARE NOT STATUTES—THEN OUTCOME
DETERMINATIVE TEST STILL FLIES.
V. THE BALANCING TEST (SUBJECTIVE, VALUE DRIVEN APPROACH)
1. THE POLICY OF UNIFORM ENFORCEMENT OF STATE-CREATED RIGHTS AND
OBLIGATIONS CANNOT IN EVERY CASE EXACT COMPLIANCE WITH A STATE RULE—NOT

26
 BOUND UP WITH RIGHTS AND OBLIGATIONS—WHICH DISRUPTS THE FEDERAL SYSTEM
OF ALLOCATING FUNCTION OF JUDGE AND JURY.IF IT IS NOT BOUND UP WITH RIGHTS
AND OBLIGATIONS- BALANCE THE TWO.BYRD V. BLUE RIDGE.
2. BRENNAN: HOW DOES A COURT DETERMINE WHETHER A STATE RULE IS “BOUND
UP WITH THE DEFINITION OF THE RIGHTS AND OBLIGATIONS OF THE PARTIES?”
a. WHEN THE LIKELIHOOD OF A DIFFERENT RESULT IS NOT A STRONG
POSSIBILITY, THE FEDERAL PRACTICE OF JURY DETERMINATION OF
DISPUTED FACTUAL ISSUES DOES NOT YIELD TO THE STATE RULE IN THE
INTEREST OF UNIFORMITY OF OUTCOME AND UPHOLDING THE RIGHT TO
7 AMENDMENT. BYRD.
JURY IN THE
TH

B. OUTCOME IS NOT THE ONLY DETERMINATION THAT THE COURT MUST

ACCOUNT FOR.
c. 7 AMENDMENT INFLUENCES IF NOT COMMANDS THAT THE DECISION OF
TH

DISPUTED FACTS IN THE FEDERAL COURT MUST GO TO THE JURY.

i. 7 AMENDMENT DOES NOT APPLY TO THE STATES.
TH

ii. GUARANTY WOULD’VE DEFINITELY COME OUT ONE WAY IF THE

STATE RULE WAS APPLIED AND ANOTHER WAY IF IT WASN’T; HERE,
THE COURT IS SAYING THAT WHEN THERE’S NO STRONG POSSIBILITY
THAT THE OUTCOME WILL BE AFFECTED EITHER WAY BALANCE THE
CONSIDERATIONS
D. TWO PROCEDURAL PRINCIPLES—STATE AND FEDERAL—YOU BALANCE THE
STATE’S INTERESTS OF APPLYING THEIR PARTICULAR CODA V. FEDERAL
PRINCIPLE OF UNIFORMITY OF THE APPLICATION OF THE LAW AND FEDERAL
INTERESTS: PREDICTIVE DETERMINATION, CONSTITUTIONAL RIGHTS.
VI. PRESUMPTIVELY PROCEDURAL TEST
1. STATUTES THAT INTERFERE WITH THE CONFORMITY OF THE RULES OF THE FEDERAL
COURTS ARE NOT BINDING DUE TO THE RULES OF DECISION ACT. HERRON.
2. TO HOLD THAT A FEDERAL RULE OF CIVIL PROCEDURE MUST CEASE TO
FUNCTION WHENEVER IT ALTERS A MODE OF ENFORCING STATE-CREATED RIGHTS
WOULD BE TO DISEMBOWEL EITHER THE CONSTITUTION’S GRANT OF POWER OVER
FEDERAL PROCEDURE OR CONGRESS’ ATTEMPT TO EXERCISE THAT POWER IN THE
ENABLING ACT. HANNA V. PLUMER
a. THE TEST MUST BE WHETHER A RULE REALLY
REGULATES PROCEDURE—THE JUDICIAL PROCESS
FOR ENFORCING RIGHTS AND DUTIES RECOGNIZED
BY SUBSTANTIVE LAW AND JUSTLY ADMINISTERING REMEDY AND
REDRESS FOR DISREGARD OR INFRACTION OF THEM. SIBBACH V. WILSON.
b. FEDERAL COURTS SHOULD APPLY FEDERAL PROCEDURAL RULES AND STATE
SUBSTANTIVE LAWS.
I. HOLDS WITH BYRD THAT FEDERAL PROCEDURAL RULES APPLY IN
FEDERAL COURT. DOESN’T DENY YORK BUT NOTES THAT A LITERAL
APPLICATION OF ITS RULE WOULD MEAN THAT FEDERAL
PROCEDURAL LAW WAS UTTERLY DENIED.
C.AFTER HANNA, THE OUTCOME DETERMINATIVE TEST APPLIES TO ONLY JUDGE
MADE LAW.
VII. PRE-EVENT TEST (JUDGE HARLAN)

27
 1. The purpose is to stay close to basic principles by inquiring if the choice
of rule would substantially affect those primary decisions respecting
human conduct which our constitutional system leaves to state
regulation.
2. Presumptively moves too far to far the federal rules, but the use of a
federal rule regarding summons in this case would not have a substantial
affect on human behavior.
3. When you focus on pre-event, then most of the rules are going to be
fine: Procedural. If the behavior is affected, then it is a substantive rule.
viii. TIPS ON ANALYSIS
1. THE CONSTITUTION IS RELEVANT ONLY WHERE CONGRESS HAS PASSED A STATUTE
CREATING LAW FOR DIVERSITY ACCTIONS—ONLY WHEN THE FEDERAL RULES ARE
CLEAR.
2. When there is no direct rule of civ. pro. Use the York test. Whether state
or federal law should be applied is controlled by the Rules of Decision
Act, the statute construed in Erie and York.
3. TEST THE RULE:
A. PERTINENCE
B. VALIDITY
C. DID THE FRAMERS OF THE RULE INTEND FOR IT TO GOVERN THE ISSUE AT
HAND.
IX. APPLYING THE RULES
1. WHEN THERE IS DIRECT COLLISION BETWEEN FEDERAL AND STATE RULES, THE
FEDERAL RULE APPLIES: HANNA. BUT WHEN THERE IS NO DIRECT COLLISION, POLICIES
BEHIND ERIE AND RAGAN APPLY: BASICALLY APPLY EITHER YORK OR BYRD. WALKER
V. ARMCO STEEL.
2. “DIRECT COLLISION” LANGUAGE EXPRESSES THE REQUIREMENT THAT THE FEDERAL
STATUTE BE SUFFICIENTLY BROAD TO COVER THE POINT IN DISPUTE; IF NO FEDERAL
STATUTE OR RULE COVERS THE POINT, THE DISTRICT COURT THEN PROCEEDS TO
EVALUATE WHETHER APPLICATION OF FEDERAL JUDGE-MADE LAW WOULD DISSERVE
THE SO-CALLED “TWIN AIMS OF THE ERIE RULE: DISCOURAGEMENT OF FORUM-
SHOPPING AND AVOIDANCE OF INEQUITABLE ADMINISTRATION OF THE LAWS.”
STEWART V. RICOH
3. Rule 3 governs the date from which various timing requirements of the
Federal Rules begin to run, but does not affect state statutes of
limitations.
a. THE RULE WAS READ VERY NARROWLY AND LIMITED THE APPLICATION
OF RULE 3. TRY TO READ THE RULES BROADER ON EXAM.
4. RULE 38 OF APPELLATE PROCEDURAL RULES: A PENALTY FOR FRIVOLOUS APPEALS
WAS CONSIDERED PROCEDURAL UNDER HANNA. BURLINGTON NORTHERN R. CO. V.
WOODS.
5. Kennedy: Honoring forum-selection clauses is important to ensure that
expectations are met and there is uniformity in the judicial system. They
should be honored in all but the most exceptional cases. Stewart v.
Ricoh
6. VENUE MOTIONS TO TRANSFER (1404A AND 1406) ARE PROCEDURAL AND

28
 FEDERAL LAW APPLIES STEWART ORGANIZATION V. RICOH:
a. Section 1404(a), fairly construed, does cover the point in dispute.
As between two choices in a single field of operation, the
instructions of Congress are supreme. 1404a is discretionary and
should look at multiple factors (not just the forum selection
clause) therefore it is not outcome determinative. Stewart v.
Ricoh.
7. STATE LAW CONTROLLING COMPENSATION AWARDS FOR EXCESSIVENESS OR
INADEQUACY CAN BE GIVEN EFFECT, WITHOUT DETRIMENT TO THE 7 AMENDMENT, IF
TH

THE REVIEW STANDARD SET OUT IN THE STATE LAW IS APPLIED BY THE FEDERAL
TRIAL COURT JUDGE, WITH APPELLATE CONTROL OF THE TRIAL COURT’S RULING
“ABUSE OF DISCRETION” THE RULE IS BOTH SUBSTANTIVE
LIMITED TO REVIEW FOR
AND PROCEDURAL, THERE IS NO DIRECT COLLISION, SO APPLY YORK AND BYRD TESTS.
(FOLLOW THE STATE RULE) A DAMAGE AWARD IN STATE COURT SHOULD NOT BE
SIGNIFICANTLY LARGER THAN WHAT ONE WOULD RECEIVE IN STATE COURT (FORUM
SHOPPING) GASPERINI V. CENTER FOR HUMANITIES, INC.
a. SCALIA THOUGHT THE RULE (59) WAS BROAD ENOUGH FOR APPLICATION
UNDER HANNA.
b. COULD HAVE REACH RESULT UNDER BYRD BUT CHOSE TO USE YORK.
X. WHICH LAW TO APPLY OF THE STATE?
1. Klaxon co. Stentor Electric MFG. Co.: In order to promote the desired
uniform application of substantive law within a state, federal courts must
apply the conflicts-of-laws rules of the states in which they sit. They
decide what the state law is, not what it ought to be.

ISSUE VI: PRECLUSION

I. THE BINDING EFFECT OF PRIOR DECISIONS: RES JUDICATA AND COLLATERAL ESTOPPEL
PRECLUSION MUST BE RAISED!!!!! IT IS COMMON LAW CAN BE OVERRULED BY STATUTE!
CHECK FOR STAUTE!!
A. RES JUDICATA=CLAIM PRECLUSION.
I. A PARTY GETS ONLY ONE CHANCE TO LITIGATE A “CLAIM”
1. IF A PARTY LITIGATES ONLY A PORTION OF A CLAIM THE FIRST TIME AROUND, SHE
RISKS LOSING THE CHANCE TO LITIGATE THE REST.
ii. CLAIM PRECLUSION: A VALID FINAL ADJUDICATION OF A CLAIM PRECLUDES A SECOND ACTION
ON THAT CLAIM OR ANY PART OF IT.
B. COLLATERAL ESTOPPEL=ISSUE PRECLUSION.
I. A PARTY ORDINARILY ONLY GETS ONE CHANCE TO LITIGATE A FACTUAL OR LEGAL “ISSUE”;
ONCE LITIGATED, SHE CANNOT ASK A SECOND COURT TO DECIDE IT DIFFERENTLY LATER
ii. ISSUE PRECLUSION: AN ISSUE OF FACT OR LAW, ACTUALLY LITIGATED AND RESOLVED BY A
VALID FINAL JUDGMENT, BINDS THE PARTIES IN A SUBSEQUENT ACTION, WHETHER ON THE
SAME OR DIFFERENT CLAIM.
II. VALUES TO THINK ABOUT WHEN DEALING WITH PRECLUSION:

29
 A. RELIEVE PARTIES OF THE COST AND TROUBLE OF MULTIPLE LAWSUITS, CONSERVE JUDICIAL
RESOURCES, AND, BY PREVENTING INCONSISTENT DECISIONS, ENCOURAGE RELIANCE ON
ADJUDICATION
B. THE DOCTRINE OF RES JUDICATA SERVES VITAL PUBLIC INTERESTS BEYOND ANY INDIVIDUAL JUDGE’S
AD HOC DETERMINATION OF THE EQUITIES IN A PARTICULAR CASE. PUBLIC POLICY DICTATES THAT
THERE BE AN END OF LITIGATION; THAT THOSE WHO HAVE CONTESTED AN ISSUE SHALL BE BOUND BY
THE RESULT OF THE CONTEST, AND THAT MATTERS ONCE TRIED SHALL BE CONSIDERED FOREVER
SETTLED AS BETWEEN THE PARTIES. YOU DON’T LIKE IT APPEAL, NO SECOND CHANCES! FEDERATED
DEPARTMENT STORES, INC. V. MOITIE
c. EFFICIENCY: IF WE DIDN'T HAVE RES JUDICATA AND COLLATERAL ESTOPPEL, WE WOULD LIVE UNDER A
CONSTANT CLOUD OF RE-LITIGATION. IT WOULD BE UNSTABLE. WE WOULD NOT BE ABLE TO GET ON
WITH OUR LIVES, AND RESOURCES WOULD BE TIED UP.
D. REPOSE
E. DETERRENCE
F. DIGNITY
G. COMPENSATION
III. QUESTIONS TO ASK:
A. IS THERE CLAIM PRECLUSION? IF NOT..,
B. IS THERE ISSUE PRECLUSION?...
C. FOR BOTH: ARE THESE PARTIES BOUND TO THE DECISIONS.
D. WAS THE ISSUE DECIDED IN THE PRIOR ADJUDICATION IDENTICAL WITH THE ONE PRESENTED IN THE
ACTION IN QUESTION?
E. WAS THERE A FINAL JUDGMENT ON THE MERITS?
F. WAS THE PARTY AGAINST WHOM THE PLEA IS ASSERTED A PARTY OR IN PRIVITY WITH A PARTY TO THE
PRIOR ADJUDICATION?
IV. ITEMS TO REMEMBER
a. NEUBORNE’S TEST: NEUBORNE ASKS WHETHER THE FACTS THAT DETERMINE LIABILITY ARE THE
SAME IN BOTH CASE ONE AND CASE TWO. IN CASE TWO, ARE THE FACTS THE SAME AS WAS NEEDED
TO DECIDE CASE ONE. CASE TWO BECOMES A FORMALITY BUT THE OUTCOME OF THE CASE IS A
FOREGONE CONCLUSION BECAUSE THE LIABILITY FACTS/ISSUES WILL HAVE BEEN DECIDED ALREADY
IN CASE ONE.
B. A PARTY IS ENTITLED TO AT LEAST ONE “FULL AND FAIR” CHANCE TO LITIGATE BEFORE BEING
PRECLUDED.
c. Dismissal without prejudice doesn’t dispose the merits and the case can be
brought again; dismissal with prejudice is on the merits and issue or claim is
precluded.
d. PRECLUSION MAY BE WAIVED UNLESS IT IS CLAIMED AT EARLY STAGE OF THE LITIGATION!!!!!!
REMEMBER: PARTY MUST ACTUALLY RAISE PRECLUSION ISSUES!
V. TERMINOLOGY
a. RES JUDICATA HAS BEEN USED AS A GENERAL TERM REFERRING TO ALL OF THE WAYS IN WHICH ONE
JUDGMENT WILL HAVE A BINDING EFFECT ON ANOTHER.
a. TWO DIFFERENT ELEMENTS.
I. (1) [NORMALLY CALLED TRUE RES JUDICATA OR MERGER AND BAR] THE EFFECT OF
FORECLOSING ANY LITIGATION OF MATTERS THAT NEVER HAVE BEEN LITIGATED, BECAUSE OF
THE DETERMINATION THAT THEY SHOULD HAVE BEEN ADVANCED IN AN EARLIER SUIT.
II. (2) [NORMALLY CALLED COLLATERAL ESTOPPEL] FORECLOSING RELITIGATION OF MATTERS

30
 THAT HAVE ONCE BEEN LITIGATED AND DECIDED.
b. CAUSE OF ACTION: IN THE OLD DAYS, A CAUSE OF ACTION WAS EQUIVALENT TO A WRIT. IF YOU GOT
A WRIT IN TRESPASS, OR A WRIT IN REPLEVIN. SOME COURTS SAID A CAUSE OF ACTION IS A RIGHT.
EVERY RIGHT IS A CAUSE OF ACTION. OTHER COURTS: A CAUSE OF ACTION IS A WRONG. OVER TIME,
COURTS: IF THE EVIDENCE IN ACTION TWO IS MORE OR LESS THE SAME AS IT WAS IN ACTION ONE, YOU
CAN'T RE-LITIGATE. MODERN STANDARD: TRANSACTION AND OCCURRENCE.
c. ON THE MERITS: FEDERAL RULE 41(B), THERE'S AN INDICATION IN THERE, IN THE LAST SENTENCE
OF THAT PROVISION, THAT IT'S AN ADJUDICATION ON THE MERITS TO DISMISS FOR FAILURE TO
STATE A CLAIM BECAUSE, AS THE RULE INDICATES, UNLESS THE DISMISSAL IS FOR ONE OF THE
STATED BASES OF 41(B), AND NONE OF THEM INCLUDE THE MOTION TO DISMISS FOR FAILURE TO
STATE A CLAIM, THE ADJUDICATION IS ON THE MERITS.
I. UNCLEAR IF IT IS WITH 12(B)(6) AND FAILURE TO STATE A CLAIM: NEUBORNE SAYS
PRECLUSION.
II. THE ORIGINAL CONNOTATION OF AN “ON THE MERITS” ADJUDICATION IS ONE THAT ACTUALLY
“PASSES DIRECTLY ON THE SUBSTANCE OF A PARTICULAR CLAIM” BEFORE THE COURT.
RESTATEMENT § 19, COMMENT A.
iii. RINEHHART V. LOCKE: RELYING ON FED. RULE 41(B) CONCLUDED THAT A DISMISSAL FOR
FAILURE TO STATE A CLAIM PRECLUDED A SUBSEQUENT SUIT ON THE CLAIM P APPARENTLY
“WAS ATTEMPTING TO STATE”. THIS CONCLUSION PLACES ON P THE BURDEN OF EITHER
PERSUADING THE DISTRICT COURT TO ALLOW AN AMENDED COMPLAINT OR TO APPEAL THE
DC’S JUDGMENT.
VI. CLAIM PRECLUSION: THE MEAT AX
A. CONSIDERED CONCLUSIVE, BOTH ON THE PARTIES TO THE JUDGMENT AND ON THOSE IN PRIVITY WITH
THEM, AS TO MATTERS THAT (1) ACTUALLY WERE LITIGATED OR (2) SHOULD HAVE BEEN LITIGATED IN
THE FIRST SUIT.
B. ELEMENTS OF CLAIM PRECLUSION:
I. SAME TRANSACTION AND OCCURENCE
II. (1) ONLY JUDGMENTS THAT ARE “FINAL”, “VALID”, AND “ON THE MERITS” HAVE
PRECLUSIVE EFFECT.
III. (2) THE CLAIM IN THE SECOND SUIT MUST INVOLVE MATTERS PROPERLY CONSIDERED
INCLUDED IN THE FIRST ACTION. (BOTH SHOULD HAVE BEEN AND WAS
DECIDED)
iv. TRANSACTION TEST:
1. “WITH RESPECT TO ALL OR ANY PART OF THE TRANSACTION, OR SERIES OF
CONNECTED TRANSACTIONS, OUT OF WHICH THE ORIGINAL ACTION AROSE”. WHAT
FACTS ARE CONSIDERED A TRANSACTION? THE CRITICAL ISSUE: WHETHER THE TWO
ACTIONS UNDER CONSIDERATION ARE BASED ON THE SAME NUCLEUS OF OPERATIVE
FACTS. PETRO-HUNT LLC V. US, 365 F.39 385 (5 CIR 2004)
V. CASE LAW:
1. personal injury and property damage as a result of the same
wrongful act, only a single cause of action arises:, A PLAINTIFF MAY
MAINTAIN ONLY ONE ACTION TO ENFORCED HIS RIGHTS EXISTING AT THE TIME SUCH
ACTION IS COMMENCED. HOWEVER, A SEPARATION OF CAUSES OF ACTION IS
ALMOST UNIVERSALLY RECOGNIZED WHERE AN INSURER HAS ACQUIRED BY AN
ASSIGNMENT OR BY SUBROGATION THE RIGHT TO RECOVER FOR MONEY IT HAS
ADVANCED TO PAY FOR PROPERTY DAMAGE. RUSH V. CITY OF MAPLE HEIGHTS

31
 2. IF A TRANSACTION IS REPRESENTED BY ONE SINGLE AND INDIVISIBLE CONTRACT AND
THE BREACH GIVES RISE TO ONE SINGLE CAUSE OF ACTION, IT CANNOT BE SPLIT INTO
DISTINCT PARTS AND SEPARATE ACTIONS MAINTAINED IN EACH. UNDER THE
UNCONDITIONAL ACCELERATION PROVISION IN THE NOTE INVOLVED AND IN THE
ABSENCE OF THE USUAL OPTIONAL PROVISION RESERVED TO THE HOLDER, THE ENTIRE
AMOUNT DUE UPON THE NOTE BECAME DUE AND PAYABLE WHEN DEFAULT WAS MADE
IN PAYING AN INSTALLMENT. JONES V. MORRIS PLAN BANK OF PORTSMOUTH
a. THE ACCELERATION CLAUSE HAS TO CLEARLY BAR FUTURE ACTION AIGLON
ASSOCIATES LTD. V. ALLAN (VA)
3. WHEN A DEBT IS SECURED BY A SERIES OF NOTES OR WHEN A BOND INCLUDES A
NUMBER INTEREST COUPONS, AN ACTION ON ONE OF THE NOTES OR COUPONS, EVEN
THOUGH OTHERS ARE DUE DOES NOT BAR A SUBSEQUENT ACTION ON THOSE OTHERS.
RESTATEMENT OF JUDGMENTS § 62 COMMENT I.
A. EACH MATURED COUPLE IS A SEPARABLE PROMISE, AND GIVES RISE TO A
SEPARATE CAUSE OF ACTION. IT MAY BE DETACHED FROM THE BOND AND
SOLD BY ITSELF.
4. SCOPE IS OFTEN INFLUENCED BY WHETHER THE TREATMENT OF ITEMS/TRANSACTIONS
APPEAR AS A UNIT CONFORMS TO THE PARTIES’ EXPECTATIONS OR BUSINESS
UNDERSTANDING OR USAGE. RESTATEMENT (SECOND) JUDGMENTS § 24.
vi. YOU MAY NOT BREAK THE CLAIM UP AND TRY DIFFERENT PORTIONS SEPERATELY AND AT
DIFFERENT TIMES.
vii. CAUSE OF ACTION HAS A POINT OF VIEW TO IT. MY CAUSE OF ACTION IS NOT THE SAME
AS YOURS, EVEN IF BOTH CAME FROM THE SAME TRANSACTION OR OCCURRENCE.
VII. RENEWED CONDUCT
A. IF THE CONDUCT THAT IS THE SUBJECT OF THE FIRST ACTION CONTINUES AFTER JUDGMENT IN THE FIRST
ACTION, CLAIM PRECLUSION WOULD NOT PREVENT A SECOND ACTION.
B. ISSUE PRECLUSION MAY APPLY TO MATTERS OF STATUES OR ISSUES OF FACT RESOLVED IN THE FIRST
ACTION.
c. NUISANCE SUITS COMMONLY INVOLVE CONTINUING CONDUCT. JUDGMENTS INVOLVING “PERMANENT”
NUISANCES ARE CONSIDERED TO HAVE FULL PRECLUSIVE EFFECT; THOSE INVOLVING “TEMPORARY”
NUISANCES ARE NOT CONSIDERED TO PRECLUDE LATER LITIGATION INVOLVING THE SAME BEHAVIOR.
COURTS HAVE NOT CONSISTENTLY APPLIED THIS STANDARD.
D. IT IS ABOUT CONCEPTIONS:
i. IF THE PARTIES CONCEIVE OF THEIR RELATIONSHIP AS A SERIES OF DISCRETE TRANSACTIONS, A
SUIT BY THE CREDITOR SEEKING TO RECOVER ANY ONE OF THE PAYMENTS WOULD NOT BAR
SUBSEQUENT SUITS FOR OTHER PAYMENTS. IF, HOWEVER, THE PARTIES BELIEVE THEY HAVE A
SINGLE RUNNING ACCOUNT, A SUIT BY THE CREDITOR WOULD HAVE TO SEEK TO RECOVER THE
ENTIRE BALANCE THEN DUE.
VIII. DEFENSE PRECLUSION:
A. HOW DEFENDANTS MUST ACCOUNT FOR THE DOCTRINE
B. A SECOND ACTION BY THE ORIGINAL P IN WHICH THE D SEEKS TO RAISE DEFENSES THAT WERE
EQUALLY AVAILABLE IN THE FIRST ACTION BUT WERE NOT ADVANCED THERE. [THIS SITUATION
IS REFERRED TO DEFENSE PRECLUSION].
C. TERMS:
I. AT COMMON LAW THE TERM “RECOUPMENT” DESCRIBES A CLAIM THAT DEFENDANT COULD
ASSERT AGAINST P ONLY IF IT AROSE FROM THE SAME TRANSACTION AS P’S CLAIM.

32
 II. “SETOFF” ON THE OTHER HAND, REFERRED TO A CLAIM BY D THAT WAS UNRELATED TO P’S
CLAIM. SETOFF PERMITTED D TO ASSERT AN AFFIRMATIVE CLAIM FOR RELIEF. BUT THE
UTILITY OF SETOFF WAS LIMITED BY THE REQUIREMENT THAT THE CLAIM EITHER BE FOR A
LIQUIDATED AMOUNT OR ARISE OUT OF A CONTRACT OF JUDGMENT.
d. If matters are set up in the first action merely as a defense in Case One, and not raised
as a counterclaim for relief, the judgment in such case precludes the use of the in a
subsequent action or as the basis of an independent suit against the former P. You
cannot split the defense into defense in C1 and offense in C2. Mitchell v. Federal
Intermediate Credit Bank
I. WHEN YOU HAVE THE OPTION OF A COUNTERCLAIM UNDER RULE 13, BUT DO NOT EMPLOY IT,
THE CLAIM MAY BE PRECLUDED.
E. CASE LAW:
i. KIRVEN V. CHEMICAL CO:
1. C1: KIRVEN HAD BOUGHT FROM CHEM. FERTILIZERS AND HAD GIVEN HIS NOTE FOR
THAT AMOUNT. THE COMPANY SUED FOR RECOVERY. HE ARGUED THAT THE
FERTILIZERS FURNISHED WERE BAD AND THAT THERE WAS NO CONSIDERATION FOR
THE NOTE BECAUSE OF THIS.HE LATER WITHDREW THIS THIRD DEFENSE AND MADE
OTHER ARGUMENTS. ON THE TRIAL THE COURT RENDERED A VERDICT FOR
CHEMICAL.
2. C2: KRIVEN BROUGHT ACTION AGAINST THE COMPANY BECAUSE THE FERTILIZERS
DESTROYED HIS CROPS. THE COMPANY SET UP A DEFENSE THAT THE ISSUES IN THIS
ACTION WERE OR COULD HAVE BEEN ADJUDICATED IN HIS FIRST SUIT.
3. HELD: HE WAS NOT PRECLUDED FROM USING THE DIFFERENT FACTS AND INJURY AS
THE BASIS OF AN INDEPENDENT ACTION BECAUSE THE ISSUE WAS NOT DECIDED IN THE
FIRST CLAIM AND DID NOT NEED TO BE DECIDED.
4. O’CONNOR V. VARNEY: YOU CANNOT USE THE SAME DEFENSE FIRST AS SWORD THEN
AS A SHIELD.
IX. COUNTERCLAIMS: SEE RULE 13 AND SECTION 7 OF THE OUTLINE
a. D’S FAILURE TO RAISE A COUNTERCLAIM THAT IS NOT COMPULSORY DOES NOT PRECLUDE A LATER
ACTION. LINDERMAN MACHINE CO. V. HILLENBRAND CO.
B. BOTH PRECEDENT AND POLICY REQUIRE THAT RES JUDICATA BAR A COUNTERCLAIM WHEN ITS
PROSECUTION WOULD NULLIFY RIGHTS ESTABLISHED BY THE PRIOR ACTION.
c. JACOBSON V. MILLER: THE TENANT SOUGHT TO DEFEND THE SECOND SUIT BY ALLEGING THAT HE HAD
NEVER EXECUTED THE LEASE. HE SHOULD NOT BE ALLOWED TO DEFEND WITH AN ISSUE THAT WOULD
HAVE BEEN RELEVANT IN C1 IN A SYSTEM OF COMPULSORY COUNTERCLAIMS.
D. CO-PARTIES ARE NOT PRECLUDED AGAINST ONE ANOTHER UNLESS THEY RAISE THEIR COUNTERCLAIMS
E. IN MOST SITUATIONS THE BROAD SWEEP OF COMPULSORY-COUNTERCLAIM PRECLUSION MAKES IT
UNNECESSARY TO CONSIDER WHETHER AND HOW DEFENSE PRECLUSION MIGHT APPLY.

X. COLLATERAL ESTOPPEL/ISSUE PRELUSION: THE SCALPEL

A. IN COLLATERAL ESTOPPEL, WHAT WE'RE DOING IS LOOKING AT THE QUESTION OF WHETHER AN
ISSUE THAT WAS LITIGATED IN ONE CONTEXT, IN ACTION ONE, SHOULD OR SHOULD NOT BE RE-
LITIGATED IN A DIFFERENT CONTEXT BECAUSE IT'S A DIFFERENT CAUSE OF ACTION IN ACTION TWO.
B. PREREQUISITES TO COLLATERAL ESTOPPEL/ISSUE PRECLUSION:
I. SAME ISSUE
ii. THE ISSUE ACTUALLY (ON THE MERITS) WAS LITIGATED IN THE FIRST CASE.
1. PRAISE/CRITICISM OF ACTUALLY LITIGATED:

33
 A.
AN ACTION MAY INVOLVE SO SMALL AN AMOUNT THAT LITIGATION OF THE
ISSUE MAY COST MORE THAN THE VALUE OF THE LAWSUIT.
B. JUSTIFICATION: THE FORUM MAY BE AN INCONVENIENT ONE IN WHICH TO
PRODUCE THE NECESSARY EVIDENCE OR IN WHICH TO LITIGATE AT ALL.
C. THE RESTATEMENT’S COMMENT ALSO GIVES AS A REASON FOR THE
“ACTUALLY LITIGATED RULE” THAT A RULE TO THE CONTRARY “MIGHT
SERVE TO DISCOURAGE COMPROMISE, TO DECREASE THE LIKELIHOOD THAT
THE ISSUES IN A ACTION WOULD BE NARROWED BY STIPULATION, AND THUS
TO INTENSIFY LITIGATION.
2. WHERE THE SECOND ACTION BETWEEN THE SAME PARTIES IS ON A DIFFERENT ISSUE,
THE JUDGMENT IN THE PRIOR ACTION IS ONLY AN ESTOPPEL AS TO THOSE MATTERS
NECESSARILY DECIDED TO RENDER THE FIRST VERDICT. CROMWELL V. COUNTY OF
SAC
3. BLANCHETTE V. SCHOOL COMMITTEE OF WESTWOOD: EMPLOYMENT LITIGATION.
ARBITRATION PROCEEDING PURSUANT TO THE TERMS OF A COLLECTIVE BARGAINING
AGREEMENT SHOULD NOT PRECLUDE A P FROM PURSUING CIVIL RIGHTS CLAIM.
SHOULD HAVE DAY IN COURT.
4. RULE 49 AND RULE 52: WHEN THE PRIOR DECISION IS AMBIGUOUS ON WHAT IT
ACTUALLY DECIDED, DOUBTS SHOULD BE RESOLVED AGAINST THE PARTY SEEKING TO
ASSERT PRECLUSION.
III. THE ISSUE MUST HAVE BEEN NECESSARILY DECIDED IN THE FIRST ACTION:
1. GENERAL VERDICTS:
A. A GENERAL VERDICT (WHERE IT IS UNCLEAR WHAT ISSUES DECIDED THE
MATTER FOR THE COURT) DOES NOT ALLOW FOR ISSUE PRECLUSION IN C2.
THE PRECISE ISSUE MUST HAVE BEEN DETERMINED IN THE PREVIOUS SUIT.
RUSSELL V. PLACE, FIELD (PENNOYER) CF. KELLEY V. CURTISS (NJ COURT)
B. ISSUE PRECLUSION ALLOWED IN GV VERDICT BECAUSE HOLDING WAS
BASED ON THE FACT THAT JUDGE IN THE EARLIER ACTION HAD PROVIDED A
COMPLETE DISCUSSION OF HIS HOLDING ON EACH GROUND. MALLOY V.
TROMBLEY
2. IMMATERIAL FACTS OR SPECIAL VERDICTS:
a. A FINDING OF FACT BY A JURY OR COURT WHICH DOES NOT BECOME THE
BASIS OR ONE OF THE GROUNDS OF THE JUDGMENT RENDERED IS NOT
CONCLUSIVE AGAINST EITHER PARTY TO THE SUIT.
No issue preclusion
on immaterial findings in special verdicts. RIOS V. DAVIS.
C. HOLDING V. DICTUM: ABRAMOWICZ/STEARNS, A HOLDING CONSISTS OF THOSE PROPOSITIONS ALONG
THE CHOSEN PATH OR PATHS OF REASONING THAT (1) ARE ACTUALLY DECIDED (2) ARE BASED UPON
THE FACTS OF THE CASE AND (3) LEAD TO THE JUDGMENT.
I. SECTION 27 OF RESTATEMENT (SECOND) OF JUDGMENTS:
1. THE CLEAREST CASE FOR SUCH AN ESTOPPEL IS WHERE A D PLEADS GUILTY TO A
SUBSTANTIAL CRIMINAL CHARGE AND THEN SEEKS IN CIVIL LITIGATION CONCERNING
THE SAME TRANSACTION TO ASSERT THAT HE DID NOT COMMIT THE ACT. HERE IS NO
EXCEPTION IN THE RESTATEMENT FOR THIS BEHAVIOR.
2. A JUDICIAL ADMISSION IS CONSIDERED IN SUBSEQUENT LITIGATIONS AS PRIMA FACIE
EVIDENCE THAT THE ADMITTED MATTER IS TRUE.
D. ADMINISTRATIVE HEARINGS:

34
 i. PRECLUSION MAY BE AFFECTED BY STATUTE: TITLE VII HAS A RULE. IF THERE IS NO
FEDERAL RULE, FEDERAL COURTS MUST DETERMINE IF THE STATE GRANTS PRECLUSIVE EFFECT
TO ADMINISTRATIVE HEARINGS. WHEN A STATE AGENCY “ACTING IN A JUDICIAL CAPACITY
RESOLVES DISPUTED ISSUES OF FACT PROPERLY BEFORE IT WHICH THE PARTIES HAVE HAD AN
ADEQUATE OPPORTUNITY TO LITIGATE,” UTAH CONSTRUCTION & MINING CO., 422, FEDERAL
COURTS MUST GIVE THE AGENCY’S FACTFINDING THE SAME PRECLUSIVE EFFECT TO WHICH IT
STATE’S COURTS. UNIVERSITY OF TENNESSEE V. ELLIOT
WOULD BE ENTITLED IN THE
II. THE COURT PREVIOUSLY RECOGNIZED THAT IT IS SOUND POLICY TO APPLY PRINCIPLES OF ISSUE
PRECLUSION TO THE FACTFINDING OF ADMIN. BODIES ACTING IN JUDICIAL CAPACITIES—UTAH
CONSTRUCTION.
III. DISSENTERS SAID TO THAT TO APPLY PRECLUSION IN SOME CIVIL RIGHTS ISSUES AND NOT
OHTERS IS SCHIZOPHRENIC
E.FULL FAITH AND CREDIT OF PRECLUSIVE JUDGMENTS
I. THE COURT HAS PREVIOUSLY HELD THAT § 1738, FULL FAITH AND CREDIT, REQUIRES THAT
STATE-COURT JUDGMENTS BEEN GIVEN BOTH ISSUE AND CLAIM PRECLUSIVE EFFECT IN
SUBSEQUENT ACTIONS UNDER 42 U.S.C. § 1983 (ALLEN (ISSUE) MIGRA V. WARRANT CITY
SCHOOL (CLAIM)). CONGRESS, IN ENACTING THE RECONSTRUCTION CIVIL RIGHT STATUES, DID
NOT INTEND TO CREATE AN EXCEPTION TO GENERAL RULES OF PRECLUSION:
XI. WHICH PARTIES ARE BOUND BY FORMER ADJUDICATION
a. WHAT WE DO KNOW IS YOU ARE NOT BOUND BY A RESULT THAT YOU WERE NOT A PARTY TO, OR A
PRIVY TO A PARTY TO. NOW THAT RULE HAS ALWAYS BEEN THE LAW AND IS STILL THE LAW. DO
NOT FORGET THAT! DO NOT GET TRAPPED BY AN EXAMINATION QUESTION THAT TRIES TO GET
YOU TO APPLY COLLATERAL ESTOPPEL AGAINST SOMEONE WHO WAS NOT A PARTY TO THE FIRST
ACTION. IT CAN'T BE DONE.
B. HISTORICAL RULE: MUTUALITY
I. A STRANGER TO THE LITIGATION CANNOT BENEFIT FROM PAST ADJUDICATION. SOMEONE
WHO WAS A STRANGER TO THE FIRST ACTION COULD NOT BE BOUND BY THAT ACTION, AND
COULD NOT BE BENEFITED BY THAT ACTION.
1. IT HAD TO DO WITH SYMMETRY.
1. MAYBE IT HAD TO DO WITH SOME MORALISTIC NOTION THAT THE STRANGER DID NOT
RISK ANYTHING
II.THIS RULE WAS ABANDONED IN ALMOST ALL JURISDICTIONS, STARTING IN THE 1940S WITH
TRAYNOR’S DECISION IN BERNHARDT V. BANK OF AMERICA.
III. EXCEPTIONS: VICARIOUS LIABILITY OR THE SUB-GEN CONTRACTOR RELATIONSHIPS.
B. DEFENSIVE NON-MUTUAL COLLATERAL ESTOPPEL:
i. THERE IS NO TEST: IT APPLIES AUTOMATICALLY! DEFENSIVE USE OCCURS WHEN A D SEEKS TO
PREVENT P FROM ASSERTING A CLAIM THE P HAS PREVIOUSLY LITIGATED AND LOST AGAINST
ANOTHER D.
II. GO UP TO TOP AND ASK THE THREE BIG QUESTIONS: IDENTICAL ISSUE, FINAL JUDGMENT
(OTM), AND PARTY AGAINST WHOM THE PLEA IS ASSERTED WAS A PARTY IN THE PREVIOUS
ACTION.
iii. The criteria for determining who may assert a plea of res judicata differ
fundamentally from the criteria for determining against whom a plea of res
judicata may be asserted. The requirements of due process forbid the
assertion of a plea of res judicata against a party unless he was bound by
the earlier litigation in which the matter was decided. BERNHARD V. BANK OF

35
 AMERICA NAT’L TRUST & SAVINGS ASSOC.
IV. THERE IS NO COMPELLING REASON FOR REQUIRING THAT THE PARTY ASSERTING THE PLEA OF
RES JUDICATA MUST HAVE BEEN A PARTY OR IN PRIVITY WITH A PARTY TO EARLIER ACTION.
BERNHARD V. BANK OF AMERICA
V. THE QUESTION OF WHETHER A DEFENDANT CAN PREVENT A PLAINTIFF FROM RELITIGATING AN
ISSUE THAT WAS PREVIOUSLY DECIDED AGAINST THE PLAINTIFF.
VI. REASONS WHY DNMCE IS DESIRABLE:
1. IT IS UNJUST TO PERMIT ONE WHO HAS HAD HIS DAY IN COURT TO REOPEN IDENTICAL
ISSUES BY MERELY SWITCHING ADVERSARIES.
2. IT FORCES P TO JOIN ALL DS UP FRONT AND NOT WAIT AROUND TO SEE WHAT
HAPPENS IN THE FIRST CASE, THEN THROW THE ENTIRE CLAIM IN ONE CASE, AND
KNOW WHAT THEY ARE DEALING WITH IN TERMS OF ALL DEFENSIVES UP FRONT.
OTHERWISE THEY CAN SUE ONE D, LOSE, AND SUE ANOTHER D FOR DIFFERENT
PARTS OF THE CLAIM FOREVER.
3. EMPLOY WHEN P LOST CASE 1 AGAINT D1 AND RAISES THE SAME CLAIM
AGAINST D2.
4. SC EXPANDED THE NONMUTUAL DEFENSIVE RIGHT. (PATENT CASE—SAID TO ONLY
HOLD TO PATENT CASES):
A. IN A LAWSUIT WHERE A D, BECAUSE OF THE MUTUALITY PRINCIPLE, IS
FORCED TO PRESENT A COMPLETE DEFENSE ON THE MERITS TO A CLAIM THAT
P HAS FULLY LITIGATED AND LOST IN A PRIOR ACTION, THERE IS AN
ARGUABLE MISALLOCATION OF RESOURCES. BLONDER-TONGUE
LABORATORIES, INC. V. UNIVERSITY OF ILLINOIS FOUNDATION, (1971)
5. THE REQUIREMENT OF DETERMINING WHETHER THE PARTY AGAINST WHOM AN
ESTOPPEL IS ASSERTED HAD A FULL AND FAIR OPPORTUNITY TO LITIGATE IS A STRONG
SAFEGUARD—SOME LITIGANTS, THOSE WHO NEVER APPEARED IN A PRIOR ACTION—
MAY NOT BE COLLATERALLY ESTOPPED WITHOUT LITIGATING THE ISSUE. BUT THIS
CASE DOES NOT INVOLVE THAT—P HAD THEIR CHANCE AND LOST.
6. COMPROMISE VERDICTS: NO, SEE CITE BELOW.
C. OFFENSIVE NON-MUTUAL COLLATERAL ESTOPPEL:
I. OFFENSIVE USE OF COLLATERAL ESTOPPEL OCCURS WHEN THE P SEEKS TO FORECLOSE THE D
FROM LITIGATING AN ISSUE THE D HAS PREVIOUS LITIGATED UNSUCCESSFULLY IN AN ACTION WITH
ANOTHER PARTY.
II. OFFENSIVE COLLATERAL ESTOPPEL IS ALLOWED, BUT TRIAL COURTS MUST USE BROAD
DISCRETION TO DETERMINE WHEN IT SHOULD BE APPLIED. 4 TESTS/FACTORS PARKLANE
HOSIERY CO. V. SHORE
iii. PREREQUISITES TO USE OF OFFENSIVE NON-MUTUAL COLLATERAL ESTOPPEL:
1. IF THE STRANGER COULD HAVE JOINED IN THAT FIRST ACTION EASILY, AND
DIDN'T, THAT STRANGER CAN'T TAKE ADVANTAGE OF THE DOCTRINE: YOU CAN'T
SIT ON THE SIDELINES AND THEN CLAIM THE FRUITS OF THE VICTORY IN THE
GAME.
2. THE LOSING PARTY MUST HAVE BEEN GIVEN A FULL AND FAIR OPPORTUNITY TO
LITIGATE IN THE FIRST ACTION. THERE CAN'T BE ANY PROCEDURAL INHIBITIONS.
MUST HAVE HAD A FULL AND FAIR OPPORTUNITY TO LITIGATE, AND MUST HAVE
EXPLOITED THAT OPPORTUNITY. THE PARTY AGAINST WHOM YOU'RE TRYING TO RUN
THE COLLATERAL ESTOPPEL MUST HAVE ACTIVELY AND FULLY LITIGATED THE ISSUE.

36
 a. ONLY UNDER THE MOST IMPERATIVE CIRCUMSTANCES, CIRCUMSTANCES
WHICH IN VIEW OF THE FLEXIBLE PROCEDURES OF THE FEDERAL RULES WE
CANNOT NOW ANTICIPATE, CAN THE RIGHT TO A JURY TRIAL OF LEGAL
ISSUES BE LOST THROUGH PRIOR DETERMINANT OF EQUITABLE CLAIMS. RULE
IS LESS RELEVANT BECAUSE NOW THE CLAIMS ARE TAKEN TOGETHER—
EQUITY AND JURY. BEACON THEATRES, INC. V. WESTOVER (BLACK).
3. NO INCONSISTENCIES WITH OTHER JUDGMENTS FOR/AGAINST D.
A. INCLUDING FAIRNESS: FIRST CASE WAS FOR SMALL AND NOMINAL DAMAGES
B. ANY FORUM DISADVANTAGES?
4. THE PARTY MUST HAVE FORESEEN THE SECOND ACTION
IV. MAKE SURE YOU CHECK FOR ALL PRECONDITIONS.
v. JACK FAUCETT ASSOCIATES V. AMERICAN TELEPHONE & TELEGRAPH CO: PARKLANE DOES NOT
HOLD THAT ONLY INCONSISTENT FINAL JUDGMENTS CAN PRECLUDE OFFENSIVE ESTOPPEL—THE
ISSUE IS ONLY WHETHER “THE INCONSISTENCY UNDERMINES THE COURT’S CONFIDENCE IN THE
CORRECTNESS OF THE PRIOR DECISION”. PRECLUDES THE USE OF OCE IF THE COURT FOUND A
“HARMLESS ERROR” EVEN.
vi. PRETRIAL RULINGS LACKS THE ULTIMATE FINALITY FOR OFFENSIVE USE GARCIA V. GENERAL
MOTORS CORP.
VII. COMPROMISE VERDICTS:
1. TAYLOR V. HAWKINSON: TRAYNOR SAYS NO. HOW FAR CAN YOU GO TO PROVE IT
WAS COMPROMISE? KATZ V. ELI LILLY & CO., 84 F.R.D. 387 (EDNY 1979)
ALLOWED FOR THE SUBPOENA OF FORMER JURORS IN C1.
VIII. GUILTY VERDICTS:
1. IN DECIDING WHETHER TO ALLOW CIVIL PLAINTIFF TO EMPLOY OFFENSIVE
COLLATERAL ESTOPPEL WITH A D’S GUILTY VERDICT IN CRIMINAL COURTS, COURTS
SHOULD CONSIDER THE INCENTIVES D HAD TO LITIGATE THE FIRST ACTION
VIGOROUSLY, THE PROCEDURAL OPPORTUNITIES AVAILABLE, AND ANY OTHER FACTOR
THAT MIGHT WEIGH ON FAIRNESS.
2. BLACKMUN: ISSUE WHETHER TO EXCLUDE EVIDENCE IS SUBSIDIARY TO THE PURPOSE
OF A CRIMINAL TRIAL, WHICH IS TO DETERMINE THE GUILT OR INNOCENCE OF THE
DEFENDANT, AND A TRIAL COURT, AT LEAST SUBCONSCIOUSLY, MUST WEIGH THE
POTENTIAL DAMAGE TO THE TRUTH-SEEKING PROCESS CAUSED BY EXCLUDING
RELEVANT EVIDENCE.
3. A guilty plea results in D’s loss of any meaningful opportunity he
might have had to challenge the admissibility of evidence obtained
in violation of the Fourth Amendment, but the plea is not a waiver
of antecedent Fourth Amendment claims that may be given effect
outside the confines of the criminal proceedings. Haring v. Prosise
464
a. Allowed case to proceed because the issue had not been decided.
ix. SUITS AGAINST THE US:
1. EXCEPTION TO OFFENSIVE COLLATERAL ESTOPPEL—US V. MENDOZA
x. CO-PARTIES:
1. THERE CAN BE A PRECLUSIVE EFFECT.
XI. JURY TRIALS WHEN FIRST SUIT HAD NONE:
1. LYTLE V. HOUSEHOLD MANUFACTURING, INC: MARSHALL: SEVENTH AMENDMENT

37
 DOES NOT GUARANTEE THE RIGHT TO RELITIGATE AN ISSUE BEFORE A JURY IF THE
ISSUE ALREADY HAS BEEN FULLY LITIGATED IN AN EQUITABLE ACTION, UNLESS
THERE IS AN ERROR.
XII. VOLUNTARY SETTLEMENTS/CONSENT DECREES:
1. A VOLUNTARY SETTLEMENT IN THE FORM OF A CONSENT DECREE BETWEEN ONE
GROUP OF EMPLOYEES AND THEIR EMPLOYER CANNOT “SETTLE”, THE CONFLICTING
CLAIMS OF ANOTHER GROUP OF EMPLOYEES WHO DO NOT JOIN IN THE AGREEMENT.
THIS IS TRUE EVEN IF THE SECOND GROUP OF EMPLOYEES IS A PARTY TO THE
LITIGATION. MARTIN V. WILKS
2. BRANDEIS: “THE LAW DOES NOT IMPOSE UPON ANY PERSON ABSOLUTELY ENTITLED
TO A HEARING THE BURDEN OF VOLUNTARY INTERVENTION IN A SUIT TO WHICH HE IS
A STRANGER.” UNLESS DULY SUMMONED TO APPEAR IN A LEGAL PROCEEDING, A
PERSON NOT A PRIVY MAY REST ASSURED THAT A JUDGMENT RECOVERED THEREIN
WILL NOT AFFECT HIS LEGAL RIGHTS. TO NOT ALLOW THIS SUIT IS INCONSISTENT
WITH RULE 19 AND RULE 24.
3. DISSENT ARGUED THE FIREFIGHTERS SHOULD HAVE “OPTED INTO THE SUIT, AND THAT
THEY SHOULD BE PRECLUDED BECAUSE THE ISSUE WAS FARILY SETTLED”.
4. SECTION 108 OF THE CIVIL RIGHTS ACT OF 1991 OVERRULED THE SPECIFIC
HOLDING OF MARTIN: PROHIBITS CHALLENGES TO EMPLOYMENT CONSENT DECREES BY
INDIVIDUALS WHO HAD ACTUAL NOTICE AND A REASONABLE OPPORTUNITY TO
INTERVENE, OR WHOSE INTERESTS WERE ADEQUATELY REPRESENTED.
XIII. CRITICISM OF NONMUTUAL OFFENSIVE C.E.:
1. ANY SINGLE DECISION CAN BE AN ANOMALY—BUT WHAT IF THE DID ANOMALY IS
FIRST AND THEN D IS BOUND BY IT FOR ALL FUTURE PS?
2. DAMAGE AWARDS: THERE IS SOME FEAR THAT NOT REHEARING THE FACTS MAY
LOWER THE AMOUNT GIVEN TO P2.
XII. BINDING NONPARTIES
A. OFTEN FORMAL RELATIONSHIPS BETWEEN PERSONS WILL JUSTIFY NONPARTY PRECLUSION. ADULT-
MINOR IS A SERIOUS EXAMPLE. OTHER INSTANCES ARE LESS FORMAL:
I. MONTANA V. UNITED STATES: WHEN NONPARTIES ASSUME CONTROL OVER LITIGATION IN
WHICH THEY HAVE A DIRECT FINANCIAL OR PECUNIARY INTEREST, THEY MAY BE PRECLUDED
FROM SUBSEQUENTLY RELITIGATING ISSUES THAT THE EARLIER SUIT RESOLVED. MARSHALL:
ALTHOUGH NOT A PARTY, THE US PLAINLY HAD SUFFICIENT LABORING OAR IN THE CONDUCT
OF THE STATE-COURT LITIGATION TO ACTUATE PRINCIPLES OF ESTOPPEL”.
II. WHEN SUFFICIENT EVIDENCE OF AN AGREEMENT EXISTS, NONPARTIES ARE PRECLUDED FROM
RELITIGATING THE CLAIMS. A LIMITED NUMBER OF COURTS HAVE BEEN WILLING TO PERMIT
NONPARTY PRECLUSION IN A NARROW RANGE OF CASES BASED UPON “VIRTUAL
REPRESENTATION” WHICH IS SIMILAR TO THE IDEAS OF CLASS ACTION.
XIII. STATE-FEDERAL PRECLUSION
A. 28 U.S.C. § 1738: STATE AND TERRITORIAL STATUTES AND JUDICIAL PROCEEDINGS; FULL
FAITH AND CREDIT
I. THE ACTS OF THE LEGISLATURE OF ANY STATE, TERRITORY, OR POSSESSION OF THE UNITED
STATES, OR COPIES THEREOF, SHALL HAVE THE SAME FULL FAITH AND CREDIT IN EVERY
COURT WITHIN THE UNITED STATES AND ITS TERRITORIES AND POSSESSIONS AS THEY HAVE
BY LAW OR USAGE IN THE COURTS OF SUCH STATE, TERRITORY OR POSSESSION FROM WHICH
THEY ARE TAKEN.

38
 B. 42 USC § 1983. CIVIL ACTION FOR DEPRIVATION OF RIGHTS: SEE STATUES IF CIVIL RIGHTS
ISSUE COMES UP.
c. WHEN NOTHING IN THE LANGUAGE OF THE STATUTE PROVES ANY CONGRESSIONAL INTENT TO DENY
BINDING EFFECT TO A STATE-COURT JUDGMENT OR DECISION WHEN THE STATE COURT, ACTING WITHIN
ITS PROPER JURISDICTION, HAS GIVEN THE PARTIES A FULL AND FAIR OPPORTUNITY TO LITIGATE
FEDERAL CLAIMS, AND THEREBY SHOWN ITSELF WILLING AND ABLE TO PROTECT FEDERAL RIGHTS.
ALLEN V. MCCURRY (STEWART)
D. WHEN A STATE COURT’S DECISION SHOULD NOT BE BINDING IN A LATER FEDERAL CASE:
I. WHERE THE STATE SUBSTANTIVE LAW WAS FACIALLY UNCONSTITUTIONAL
II. WHERE STATE PROCEDURAL LAW WAS INADEQUATE TO ALLOW FULL LITIGATION OF A
CONSTITUTIONAL CLAIM
III.
WHERE STATE PROCEDURAL LAW, THOUGH ADEQUATE IN THEORY, WAS INADEQUATE IN
PRACTICE.
b. MIGRA V. WARREN CITY SCHOOL DISTRICT BOARD OF EDUCATION: MIGRA IS FOR CLAIM WHAT ALLEN
IS FOR ISSUE PRECLUSION IN THE STATE TO FEDERAL DYNAMIC.
c. TWO STEP TEST FOR DETERMINING THE PRECLUSIVE EFFECT OF A STATE COURT JUDGMENT IN A
SUBSEQUENT FEDERAL ACTION IN WHICH THE FEDERAL COURT HAS EXCLUSIVE JURISDICITON:
I. MARRESE V. AMERICAN ACADEMY OF ORTHOPEDIC
1. APPLYING 1738, FULL FAITH AND CREDIT, THE FEDERAL COURT MUST DETERMINE
WHETHER STATE CLAIM-PRECLUSION LAW WOULD PRECLUDE THE FEDERAL SUIT. IF
NOT, THERE IS NO PRECLUSION.
2. IF YES, THEN THE FEDERAL COURT MUST DETERMINE WHETHER THE RELEVANT
FEDERAL LAW CONTAINS AN IMPLIED OR EXPLICIT EXCEPTION TO SECTION 1738.
3. IN MOST CASES THE TEST WILL PREVENT PRECLUSION. THIS IS SO BECAUSE
VIRTUALLY EVERY STATE FOLLOWS THE “PRIOR JURISDICTIONAL COMPETENCY RULE”
WHICH PROHIBITS PRECLUSION OF A CLAIM BEYOND THE RENDERING COURT’S
JURISDICTION. MARRESE PROHIBITS FEDERAL COURTS FORM PRECLUDING CLAIMS THAT
WOULD NOT BE PRECLUDED UNDER STATE RULES.
D. OPTING FOR STATE COURT INSTEAD OF GOING TO FEDERAL COURT FIRST:
i. KREMER V. CHEMICAL CONSTRUCTION CORP : ALTHOUGH P COULD HAVE SUED IN FED.
COURT ON AN EMPLOYMENT DISCRIMINATION CLAIM INITIALLY, ONCE HE OPTED TO APPEAL TO
A STATE AGENCY HE WAS SUBJECT TO THE NORMAL PRECLUSION RULES. HE COULD ONLY
RELITIGATE IN FEDERAL COURT IF THERE WAS ISSUES OF IMPROPER TRIAL OR FAIRNESS.
XIV. FEDERAL-STATE PRECLUSION
A. NOT BASED UPON THE CONSTITUTION, BUT THERE IS AGREEMENT THAT FEDERAL PRECLUSION RULES
APPLY IN A STATE COURT WHEN THE PRIOR FEDERAL-COURT JUDGMENT INVOLVED A FEDERAL
QUESTION.
B. THE RESTATEMENT OF JUDGMENTS ADOPTED THE POSITION THAT, ALTHOUGH FEDERAL LAW
ULTIMATELY MUST CONTROL THE CHOICE OF PRECLUSION RULES, FEDERAL LAW SHOULD MANDATE THE
APPLICATION OF STATE RULES WHEN THOSE RULES ARE IMPORTANT TO THE EFFECTUATION OF
SUBSTANTIVE STATE POLICIES. RESTATEMENT (SECOND) JUDGMENTS § 87 (1982).
c. FEDERAL COMMON LAW GOVERNS THE CLAIM PRECLUSIVE EFFECT OF A DISMISSAL BY THE FEDERAL
COURT SITTING IN DIVERSITY Federal common law claim preclusion: must be on the
merits. “On the merits” is defined by the state rule when sitting in diversity with regard
to statute of limitations. Semetk Intl. v. Lockheed.
d. This rule requires courts to apply the law of the forum state of the prior action to

39
 determine the preclusive effect of prior diversity actions.
1. HERE, CA LAW STATED THAT A DISMISSAL OF AN ACTION DUE TO THE STATUTE OF
LIMITATIONS BY A CA STATE COURT IS NOT PRECLUSIVE—FEDERAL RULE
INCORPORATES CA’S LAW OF CLAIM PRECLUSION.
2. NATIONWIDE UNIFORMITY IS SERVED BY APPLYING THE STATE RULE IN WHICH THE
COURT SITS.
3. THEREFORE, BECAUSE THE CLAIM-PRECLUSIVE EFFECT OF THE CALIFORNIA FEDERAL
COURT’S DISMISSAL “UPON THE MERITS” OF PETITIONER’S ACTION ON STATUTE-
OF-LIMITATIONS GROUNDS IS GOVERNED BY A FEDERAL RULE THAT IN TURN
INCORPORATES CALIFORNIA’S LAW OF CLAIM PRECLUSION, IT IS WRONG TO HOLD
THAT THE DISMISSAL NECESSARILY PRECLUDED THE ACTION IN MARYLAND COURTS.
SEMTEK INTERNATIONAL INC. V. LOCKHEED MARTIN CORP
4. STATE COURTS APPLY THEIR OWN STATUTE OF LIMITATIONS AND FEDERAL COURTS
APPLY THE STATUTE OF LIMITATIONS OF THE STATES IN WHICH THEY SIT, SO A
FEDERAL COURT DISMISSING A CASE ONLY HAS CLAIM-PRECLUSIVE EFFECT IF THE
STATE COURTS CONSIDER A STATUTE OF LIMITATIONS DISMISSAL AS “ON THE MERITS”
5. CLAIM DISMISSED ON SOL GROUNDS MAY BE BROUGHT IN ANOTHER STATE COURT
(AFTER BEING DISMISSED FROM A DIVERSITY COURT) IF THE FIRST COURT WOULD NOT
PRECLUDE IT.
E. RULE: COURTS MUST APPLY THE LAW OF THE FORUM STATE OF THE PRIOR ACTION TO
DETERMINE THE PRECLUSIVE EFFECT OF PRIOR DIVERSITY ACTIONS (FOR SOL)
f. PARSON STEEL INC. V. FIRST ALABAMA BANK: A STATE COURT’S REJECTION OF A CLAIM THAT AN
EARLIER FEDERAL JUDGMENT PRECLUDES THE STATE ACTION IS ITSELF RES JUDICATA IN A LATER
FEDERAL ACTION TO ENJOIN THE ENFORCEMENT OF THE STATE-COURT JUDGMENT.
XV. HABEAS CORPUS AND PRECLUSION
a. HABEAS CORPUS: A WRIT REQUIRING A PERSON UNDER ARREST TO BE BROUGHT BEFORE A JUDGE OR
INTO COURT, SHOW LEGAL GROUNDS FOR DETENTION.
B. PRECLUSION WAS NEVER A DEFENSE TO A WRIT OF HABEAS CORPUS
c. Today: in habeas corpus, a fed court must ask, did state courts make a mistake by
ignoring a clearly stated federal principle at the time the case was decided? If yes, then
a federal court can set aside a state court ruling. Otherwise, no.So, habeas corpus can
only be used in instances of clear mistake in state court regarding a federal statute
(existing at the time of the decision, not after).
XVI. THE BIG PICTURE:
A. FULL FAITH AND CREDIT TRANSFERS PRECLUSION FROM ONE STATE TO ANOTHER
b. FROM ONE COUNTRY TO ANOTHER: PROBABLY—AS LONG AS THE JUDGMENT IS FINAL, ETC. (comity
—respect at least)
C. VERTICAL FROM STATE TO FED: HABEAS CORPUS IS THE ONLY EXCEPT.
D. ADMIN TO COURT: IT IS A LEGITIMATE FACTFINDING EFFORT AND IS NOT PROHIBITTED BY STATUE.

ISSUE VII: THE PARTIES AND THEIR CLAIMS

I. JOINDER OF CLAIMS AND PARTIES: EXPANDING THE SCOPE OF THE CIVIL ACTION
A. HISTORICAL LIMITATIONS ON THE PERMISSIVE JOINDER
i. JOINDER WAS ALLOWED WHEN THERE WAS ONE TRANSACTION, BUT NOT WHEN THERE WAS
MULTIPLE CAUSES OF ACTION. HARRIS V. AVERY 5. KAN. 146 (1869) SHOWS THE THINKING

40
 OF THE TIME.
1. Common law: “where the same form of action may be adopted for
several distinct injuries, the plaintiff may, in general, proceed for all in
one action, though the several rights affected were derived from
different titles, and different forms of action may be united “where the
same plea may be pleaded and the same judgment given on all the
counts of the declaration, or whenever the counts are of the same nature,
and the same judgment is to be given on them, although the pleas be
different”
2. Typical Code authorized joinder of claims when they fell into a statutory
category:
a. Contracts
b. Injuries to person
c. Injuries to character
d. Injuries to property
e. Actions to recover real property, with or without damages
f. Actions to recover chattels, with or without damages,
g. Actions arising out of the same transaction or transactions
connected with the same subject of the action.
II. RULE 18: PERMISSIVE JOINDER OF CLAIMS UNDER THE FRCP
A. THE ONLY RESTRICTIONS ON CLAIMS THAT RULE 18 IMPOSES IS SUBJECT-MATTER JURISDICTION
REQUIREMENTS.
b. MK V. TENET, 216. F.R.D. 133 (2002): JOINDER OF NEW CLAIMS IS ALLOWED UNDER RULE 18.
C. THE RULE IS PHRASED IN HIGHLY PERMISSIVE TERMS, BUT THAT’S A TRAP – THERE IS A “MUST”
LURKING THERE, THE “MUST” FROM COMMON-LAW CLAIM PRECLUSION, WHICH MEANS P MUST EITHER
BRING THE CLAIMS OR LOSE THEM FOREVER.
I. THE COMBINATION OF RULE 18 AND PRECLUSION FORCE P TO MAKE ALL CLAIMS IN ONE
SESSION OR RISK LOSING THE UNUSED CLAIMS DUE TO PRECLUSION.
D. YOU MAY JOIN AS MANY CLAIMS AS YOU WISH, BUT AFTER YOU ESTABLISH IN PERSONAM AND
SUBJECT MATTER JURISDICTION.
E. STILL, ABSENT DIVERSITY, STATE CLAIMS NOT SUBSTANTIALLY RELATED TO THE FEDERAL COURT WILL
BE DISMISSED FROM FEDERAL COURT DUE TO LACK OF SUBJECT-MATTER JURISDICTION
F. REVISIONS TO THE RULES OF CIV PRO HAVE ALWAYS KEPT IN TACT THE CLAIM JOINDER RULES
BEING BASED UPON “TRANSACTIONAL RELATEDNESS”.
G. OFTEN WORKS WITH RULE 20 (PERMISSIVE JOINDER OF PARTIES)
I. MAKE ADDITIONAL CLAIMS AFTER JOINDED UNDER 20A.
II. CONSIDER RULE 42 WHEN IT GETS VERY COMPLICATED.
III. COUNTERCLAIMS AND CROSSCLAIMS: (13)
A. COMMON LAW PRINCIPLES:
I. RECOUPMENT: LIMITED TO SHOWING OF PAYMENT, OR OF FORMER RECOVERY. LATER, IT
DEVELOPED TO ALLOW A DEFENDANT TO SHOW FOR THE PURPOSE OF REDUCING P’S RECOVERY
ARISING OUT OF THE TRANSACTION SUED UPON OR CONNECTED WITH THE SUBJECT THEREOF,
WHICH FACTS MIGHT HAVE FOUNDED AN INDEPENDENT ACTION IN FAVOR OF THE D AGAINST
THE P. BUT IF IT AROSE OUT OF A DIFFERENT TRANSACTION, D WOULD HAVE TO SUE P
SEPARATELY. NO AFFIRMATIVE RECOVERY FOR D.
II. SET-OFF: IT WAS NECESSARY THAT THE DEMANDS EITHER BE LIQUIDATED, OR ARISE OUT OF

41
 CONTRACT OR JUDGMENT. IN ORDER TO WIN AN AFFIRMATIVE AMOUNT IT HAD TO BE FOR A
LIQUIDATED AMOUNT.
B. 13(A) COMPULSORY COUNTERCLAIMS:
I. D’S ANSWER MUST STATE AS A COUNTERCLAIM ANY CLAIM THAT D HAS AGAINST P AT THE
TIME OF THE ANSWER IF THE CLAIM ARISES OUT OF THE SAME TRANSACTION AND OCCURRENCE
AS P’S COMPLAINT AND COUNTERCLAIM’S ADJUDICATION DOESN’T REQUIRE PRESENCE OF
THIRD PARTIES OVER WHOM COURT DOESN’T HAVE JURISDICTION.
1. IT IS NICE TO HAVE A BROAD UNDERSTANDING OF T/O BECAUSE IT HELPS TO AVOID
THE MULTIPILICTY OF LAWSUITS.
2. WHEN APPLYING THE RULE THE MAIN Q IS “WHAT CONSTITUTES A T/O?” FOUR
TESTS:
A. ARE THE ISSUES OF FACT AND LAW RAIDED BY THE CLAIM AND
COUNTERCLAIM LARGELY THE SAME?
B. WOULD PRECLUSION BAR A SUBSEQUENT SUIT ON DEFENDANT’S CLAIM
ABSENT THE COMPULSORY COUNTERCLAIM RULE?
C. WILL SUBSTANTIALLY THE SAME EVIDENCE SUPPORT OR REFUTE PLAINTIFF’S
CLAIM AS WELL AS DEFENDANT’S COUNTERCLAIM?
D. IS THERE ANY LOGICAL RELATION BETWEEN THE CLAIM AND THE
COUNTERCLAIM?
I. THE ONE COMPELLING TEST OF COMPULSORINESS.
II. BASICALLY EMPLOY THE SAME ANALYSIS IF YOU WERE CHECKING
FOR SUPPLEMENTAL JURISDICTION
3. IN HAYWARD-ROBINSON, SOME OF THE FACTORS THAT LEAD TO THE COURT BELIEVING
IT WAS THE SAME T/O:
A. PAID FOR THE JOBS AT SAME TIME WITH ONE CHECK
B. A SINGLE INSURANCE POLICY COVERED BOTH JOBS
C. THE CLAIMS WERE INTERWOVEN AT TRIAL
D. SERVES THE INTEREST OF THE COURT: INTEREST OF LITIGANTS AND THE
PUBLIC.
ii. DOOR CLOSING:
1. TRYING TO BRING A CLAIM AND GETTING BLOCKED BY THE COURT BECAUSE IT
WAS A COMPULSORY COUNTERCLAIM IN A PREVIOUS CASE.
iii. DOOR OPENING:
1. COUNTERCLAIM LIES WITHIN SUPPLEMENTAL JURISDICTION OF THE COURT—
THERE IS NO NEED FOR INDEPENDENT BASIS FOR JURISDICTION OVER IT.
iv. LOGICAL CONNECTION TEST:
1. “TRANSACTION IS A WORD OF FLEXIBLE MEANING. IT MAY COMPREHEND A SERIES OF
MANY OCCURENCES, DEPENDING NOT UPON THE IMMEDIATENESS OF THEIR
CONNECTION AS UPON THEIR LOGICAL CONNECTION” US V. HEYWARD-ROBINSON.
CO.
2. Is there a logical connection between the door-opening claim and the
original case; this is where liability-fact analysis helps, because if the
liability facts are the same in the claim and counterclaim, then it’s both
likely that it’ll be allowed as compulsory counterclaim and that it’ll be
issue precluded if you don’t bring it in the original CASE BUT YOU BRING IT
LATER.

42
 V. COMPULSORY COUNTERCLAIMS APPLY IN BOTH DIVERSITY AND FEDERAL Q CASES. HANNA.
1. CALLING A CLAIM COMPULSORY SHOULD BE MADE IN THE PLEADING STAGE.
2. IF A CASE IN FEDERAL COURT IS GOVERNED BY 13(A) AND D DOESN’T BRING THE
COMPULSORY COUNTERCLAIM, D IS RULE-PRECLUDED FROM BRINGING THE CLAIM IN
FEDERAL COURT.
A. 13F IS QUITE LIBERAL IN HELPING CORRECT PROBLEMS—SEE RULE CHART.
3. STILL IF IT WAS IN STATE COURT, THEY MAY NOT BE ABLE TO REMOVE BECAUSE 13A
MAY NOT BE A REMOVABLE ISSUE.
VI. RULE 13(A) DOES NOT COMPEL A COUNTERCLAIM TO BE MADE WHEN THERE ARE TWO SUITS
IN TWO DIFFERENT JURISDICTIONS--- IF IT IS MADE IN THE SECOND SUIT FILED AND NOT THE
FIRST—THIS IS NOT THE TYPE OF PROBLEM THE RULE WAS WRITTEN FOR. SOUTHERN
CONSTRUCTION CO. V. PICKARD.
VII. A PARTY WHO IS TRYING ANOTHER ISSUE IN ANOTHER COURT IS NOT RESPONSIBLE TO BRING
THAT ISSUE AS A COMPULSORY COUNTERCLAIM IN A DIFFERENT ACTION ALLOWING THEM TO
MAINTAIN THEIR VENUE CHOICEUNION PAVING CO. V. DOWNER CORP.
VIII.AMOUNT IN CONTROVERSY AND 13(A):
1. THE AMOUNT OF THE COUNTERCLAIM SHOULD BE CONSIDERED IN DETERMINING
WHETHER THE AMOUNT-IN-CONTROVERSY THRESHOLD HAD BEEN MET BY P.
SPECTATOR MANAGEMENT GROUP V. BROWN (3 CIR)
RD

ix. VERY COMPLICATED SUITS:

1. COURTS MAY ACCEPT A MOTION OF 42(B) TO SEPARATE THE TRIAL.
C. PERMISSIVE COUNTERCLAIMS 13(B):
i. D’s answer may state counterclaims against P that don’t arise out of the same
transaction and occurrence as P’s complaint.
ii. If the claim isn’t part of the same transaction and occurrence, if D still decides
to bring it, the court has to have an independent basis of jurisdiction – no
supplemental jurisdiction over these claims
D. RULE BETWEEN PERMISSIVE AND COMPULSORY COUNTERCLAIMS:
i. “THE RULE OF COUNTERCLAIMS FOR THE SECOND CIRCUIT: IF THEY ARE PERMISSIVE THERE
IS NO FEDERAL JURISDICTION OVER THEM UNLESS THEY REST ON INDEPENDENT
JURISDICTIONAL GROUNDS. IF THEY ARE COMPULSORY CLAIMS, THEY ARE ANCILLARY TO THE
CLAIM ASSERTED IN THE COMPLAINT AND NO INDEPENDENT BASIS OF FEDERAL JURISDICTION IS
REQUIRED” UNITED STATES V. HEYWARD-ROBINSON CO. (1970)
E. CROSS-CLAIMS AGAINST CO-PARTIES (13G):
i. “ARISING OUT OF THE SAME TRANSACTION/OCCURRENCE”, ONE PARTY MAY MAKE A CLAIM
AGAINST A CO-PARTY ON THE SAME SIDE OF THE V.
ii. “THE WORDS TRANSACTION OR OCCURRENCE” ARE GIVEN A BROAD AND LIBERAL
INTERPRETATION IN ORDER TO AVOID A MULTIPILICY OF SUITS” LASA.
iii. Lasa v. Alexander (1969) – cross-claims, counterclaims, and third-party
complaints arising from the same transaction or occurrence as the subject matter
of the original complaint may be joined with the original complaint.
1. If it gets too complicated the court has the option of using a 42(b)
motion.
2. Scathing dissent explaining the t/o def. was way too broad and the court
should have broken up the tort claims from the contract claims.
IV. GENERALLY CROSS-CLAIMS ARE PERMISSIVE AND FAILURE TO RAISE THEM IS NOT

43
 PRECLUSIVE.
STILL, YOU MIGHT GET ISSUE PRECLUDED—SO IF YOU DO NOT BRING THE
CROSSCLAIM YOU MAY REGRET IT LATER.
V. SOME JURISDICTIONS HAVE A MUCH MORE NARROW APPROACH THEN LASA, LIKE THE
WISCONSIN STATUTE ON PG. 597.
1. P SHOULD HAVE THE RIGHT TO LITIGATE WITHOUT WAITING FOR THE CROSS-CLAIMS
TO FIGHT IT OUT.
vi. A THIRD PARTY DEFENDANT AND AN ORIGINAL D ARE STILL CO-PARTIES FOR THE PURPOSES OF
13(G). EARLE M. JORGENSON CO. V. TI UNITED STATES, LTD.
vii. A PARTY PLAINTIFF CANNOT CROSS-CLAIM AGAINST A COPLAINTIFF DANNER V. ANSKIS: 13G
DOES NOT AUTHORIZE P TO STATE AS A CROSS-CLAIM AGAINST A CO-P A CLAIM ARISING OUT
OF THE TRANSATCTION OR OCCURRENCE WHICH IS ALSO THE SUBJECT MATTER OF THEIR
COMMON COMPLAINT AGAINST D.
1. A CROSS-CLAIM IS MEANT TO BE ANCILLARY. CF. HARRISON V. MS. CARRIERS, INC.: DANNERS
READS THE STATUTE WRONG. THE LANGUAGE IS CLEAR.
F. RULE 13(H): JOINDER OF ADDITIONAL PARTIES:
I. IF SOMEONE IS USING A RULE 13A, B, OR G, YOU CAN INVOKE RULE 13H. RULE 14 DS CAN
BE TRANSFORMED INTO 13H IF THIS HAPPENS.
IV. JOINDER OF CLAIMS AND PARTIES
A. RULE 20: PERMISSIVE JOINDER OF PARTIES:
i. EXPLAINS THAT PARTIES MAY BE JOINED NOT THAT THEY HAVE TO BE.
II. ENCOURAGES P TO JOIN ALL POTENTIAL DS BUT THEY STILL HAVE TO ESTABLISH PJ AND
SMJ.
1. IT IS OF GREAT TACTIAL IMPORTANCE—THE COURT WILL NOT DIMISS THE CASE UNTIL
THE DS HAVE BATTLED OUT THEIR OWN PROBLEMS AND HAVE RAISED CLAIMS
AGAINST EACH OTHER WHICH WILL HELP P PROVE HER CASE.
III. TESTS TO SEE IF A PARTY SHOULD BE JOINED:
1. TRANSACTIONAL TEST:
a. “LOGICAL RELATEDNESS” TRANSACTION IS A WORD OF FLEXIBLE MEANING.
IT MAY COMPREHEND A SERIES OF MANY OCCURENCES, DEPENDING NOT
UPON THE IMMEDIATENESS OF THEIR CONNECTION AS UPON THEIR LOGICAL
CONNECTION” US V. HEYWARD-ROBINSON. CO.
b. THE “SAME TRANSACTION OR OCCURRENCE” DOES NOT REQUIRE AN
IDENTITY OF DUTY AND RELATIONSHIP TO ASSERT ALTERNATIVE LIABILITY.
TANBRO FABRICS V. BEAUNIT MILLS. (COMBINES 18/20)
2. COMMON QUESTION OF LAW OR FACT
a. DID DS OR PS EXHIBIT/ENGAGE IN A COMMON SCHEME OR PATTERN OF
BEHAVIOR? MK V. TENET
iv. UNDERLYING NOTION: TO PROMOTE TRIAL CONVENIENCE, EXPEDITE THE FINAL
DETERMINATION OF DISPUTES, AND PREVENT MULTIPLE LAWSUITS.
v. THE RIGHT OF JOINDER AND THE PRIVILEDGE TO OBTAIN COSOLIDATION IS ALWAYS
COUNTERBALANCED, OF COURSE, BY THE POWER OF THE COURT TO GRANT A SEVERENCE, OR
TO DENY A CONSOLIDATION, IF PREJUDICE OR INJUSTICE APPEAR. THE BUYER IS INTITLED TO
LESS HAZARDOUS ADJUDICATION OF HIS DISPUTE WHEN THE MANUFACTURER AND SELLER
BELIEVE THEY SHOULD HAVE SEPRATE TRIALS. TANBRO
B. COMPULSORY JOINDER/INDISPENSABLE PARTIES: RULE 19
I. A COMPULSORY JOINDER ENABLES COURTS TO IDENTIFY NONPARTIES WHO EITHER HAVE SOME

44
 INTEREST THAT MAY BE JEOPARDIZED BY THE RESOLUTION OF PENDING LITIGATION OR WHO
ABSENCE MAY HARM A PARTY TO THE LITIGATION.
1. COMPLICATIONS ARISE BECAUSE:
A. IT OVERRIDES P’S SCOPE OF COMPLAINT
B. IF THE PERSON NEEDED TO BE JOINDED DOES NOT HAVE PJ
C. OR THERE ARE OBJECTIONS TO VENUE OR NOT AMENABLE TO SERVICE OF
PROCESS.
II. TRADITIONAL NOTIONS OF “INDISPENSABLE” V. MERELY “NECESSARY”:
1. WHILE NECESSARY PARTIES ARE SO INTERESTED IN THE CONTROVERSY THAT THEY
SHOULD NORMALLY BE MADE PARTIES IN ORDER TO ENABLE THE COURT TO DO
COMPLETE JUSTICE, YET IF THEIR INTERESTS ARE SEPERABLE FROM THE REST AND
WHERE THEIR PRESENCE CANNOT BE OBTAINED, THEY ARE NOT INDISPENSABLE. BANK
OF CA. V. SUPERIOR COURT.
2. BANK OF CA V. SUPERIOR COURT –WHERE A PARTY SEEKS SOME TYPE OF
AFFIRMATIVE RELIEF WHICH, IF GRANTED, WOULD INJURE OR AFFECT THE INTERESTS
OF A THIRD PERSON NOT JOINED, THAT THIRD PERSON IS AN INDISPENSABLE PARTY.
(other indispensable parties: in actions by one creditor for payment of
his share, the other creditors; in actions by lessor against a sublessee to
forfeit a parent lease, the sublessor).
a. Necessary parties have separable interests, where they are
necessary for a complete settlement of the entire controversy or
transaction, but are not indispensable to any valid judgment in
the particular case.
3. THINK ABOUT WHETHER THE PARTY IS TRULY
INDISPENSIBLE!!
4. GOOD QUOTE ON INDISPENSABLE: PERSONS WHO NOT ONLY HAVE AN INTEREST IN A
CONTROVERSY, BUT AN INTEREST OF SUCH A NATURE THAT A FINAL DECREE CANNOT
BE MADE WITHOUT EITHER AFFECTING THAT INTEREST, OR LEAVING THE
CONTROVERSY IN SUCH A CONDITION THAT ITS FINAL TERMINATION MAY BE WHOLLY
INCONSISTENT WITH EQUITY AND GOOD COSCIENCE. SHIELDS V. BARROW SCOTUS
(1854)
a. Necessary – must join if possible (if will not mess up
jurisdiction)
b. Indispensable – a party without which the action cannot go
forward. Generally applicable when there is a limited fund
that multiple parties have a claim on
III. MODERN STATUTORY RULE 19
1. NO SUPPLEMENTAL JURISDICTION—IT HAS TO BE IN THE THICK OF THE CLAIM. “100
mile bulge”—you can serve process to bring in a Rule 14 or 19
joinder within 100 miles regardless of the state law.
2. WITHOUT JOINDER: PERSON’S ABSENCE DOES NOT ALLOW FOR COMPLETE RELIEF,
(2) SO SITUATED IN THE SUBJECT MATTER THAT (1) THEY MAY NOT BE ABLE TO
PROTECT THEIR INTEREST (2) MIGHT CREATE MULTIPLE LAWSUITS AND UNCLEAR
JUDGMENTS. 19B: IT IS THE COURTS DISCRETION IF THE TRIAL COURT SHOULD MOVE
ON WITHOUT THE PARTY—MAY ON BE NECESSARY NOT INDISPENSABLE.
3. PARTIES SHOULD BE “JOINED IF FEASIBLE” (STILL NEED PJ)

45
 A. COURT CAN DO IT IF THE PARTIES DO NOT MOVE.
4. SHOULD YOU PROCEED IF YOU CANNOT GET THE PARTY? FOUR INTERESTS TEST
PROVIDENT TRADEMENS BANK V. PATTERSON:
A. IS THERE A SATISFACTORY ALTERNATIVE FORUM?
B. D WANTS TO AVOID MULTIPLE LITIGATION, INCONSISTENT RELIEF, OR SOLE
RESPONSIBILITY FOR A LIABILITY HE SHARES WITH OTHERS. WITHOUT THE
OTHER PARTY HE MAY BE FORECLOSED ON REDRESS.
C. THERE IS THE INTEREST OF THE OUTSIDE WHOM IT WOULD HAVE BEEN
DESIRABLE TO JOIN.
i. COURT MUST CONSIDER THE EXTENT TO WHICH THE JUDGMENT MAY
“AS A PRACTICAL MATTER IMPAIR OR IMPEDE HIS ABILITY TO
PROTECT HIS INTEREST IN THE SUBJECT MATTER”.
D. THE INTERESTS OF THE COURTS AND THE PUBLIC IN COMPLETE, CONSISTENT,
AND EFFICIENT SETTLEMENT OF CONTROVERSIES.
5. In the absence of a party who cannot feasibly be joined, a court should
not dismiss the action if, in equity and good conscience it could proceed
without the party. Provident Tradesmens v. Patterson
6. If you can join a P through a rule 13(h) party through a compulsory
counterclaim, you should not dismiss and allow that. ASSOCIATED DRY
GOODS CORP. V. TOWERS FINANCIAL CORP. (2 CIR).ND

7. Have to play out the litigation and see how a decision on the merits
would affect parties not currently joined, see how and why they might
sue over it, and if the results of that second litigation could be a decision
at odds with the decision in case 1 such that someone’s rights are
infringed (e.g. have to try to obey two contrary injunctions, have to pay
more damages than the harm caused because paying full amount to
different Ps, etc.)
C. IMPLEADER (RULE 14)
I. HISTORICAL RULE (VOUCHING TO WARRANTY):
1. “VOUCHING IS THE PROCEDURE WHEREBY THE D IN A PRIMARY ACTION IS KNOWN AS
THE “VOUCHER”, AND HE BELIEVES ANOTHER PARTY- “THE VOUCHEE”—IS LIABLE
OVE ROT HIM FOR ANY LIABILITY RESULTING FROM THE ACTION, MAY TENDER
DEFENSE OF THE PRIMARY ACTION TO THE PARTY.
A. THIS MAY ARISE AS A RESULT OF CONTRACTS, INDEMNITY, WARRANTY, OR
BY SIMILAR OPERATIONS OF LAW.
II. MODERN RULE: RULE 14:
1. MAIN GOAL:
A. AVOID INCONSISTENT ADJUDICATION AND MULTIPLE LAWSUITS. RIGHTS OF
ALL PARTY ARE DETERMINED IN ONE PROCEEDING.
2. (A) ONCE D IS SERVED, D CAN TURN INTO A THIRD-PARTY P BY BRINGING IN A
THIRD PARTY DEFENDANT, NOT ALREADY A PART OF THE SUIT, WHO MAY BE LIABLE
TO HIM (FOR PART OF P’S CLAIM) (B) IF THERE’S A COUNTERCLAIM AGAINST P, P
CAN BRING IN A THIRD PARTY UNDER THE SAME RULES AS D IN 14(A).
3. IMPORTANT FACTORS:
a. Rule 14 is D’s mechanism for joining indemnitor and thus
binding indemnitor to results of case 1.

46
 b. Washington Hosp. Center National Rehabilitation Hosp. v.
Collier (1991): 1367 supplemental jurisdiction encompasses
impleader claims and additional related claims asserted by the
third party plaintiff against the third-party defendant.
i. Therefore under 1367B, P may not sue third party Ds
if it breaks diversity (withholds supplemental
jurisdiction). Viacom International v. Kearney (2000).
c. Statutory venue limitations have no application to Rule 14 claims
even if they would require the third-party proceeding to be heard
in another district had it been brought as an independent action.
4. RULE 14 PERMITS THE IMPLEADER OF A PARTY WHO IS OR MAY BE LIABLE.
EXAMPLE: JEUB V. B/G FOODS
A. IN JEUB THE COURT RECOGNIZED THE SUBSTANTIVE RIGHT TO IMPLEAD BUT
DID NOT HAVE THE PROCEDURAL MECHANSM—IN STATES THAT DO NOT
HAVE JOINT-TORTFEASOR RULES, DO THE DIVERSITY COURTS HAVE TO
FOLLOW THAT—I WOULD ARGUE HANNA SAYS NO.
5. “100 MILE BULGE”—YOU CAN SERVE PROCESS TO BRING IN A RULE 14 OR 19
JOINDER WITHIN 100 MILES REGARDLESS OF THE STATE LAW.
6. RULE 14 TRIGGERS SUPPLEMENTAL JURISDICTION, SO COURT DOESN’T NEED
INDEPENDENT JURISDICTION OVER THE IMPLEADED PARTY (BUT STILL MUST HAVE IN
PERSONAM JURISDICTION).
7. THIRD PARTY D MAY USE ALL AVAILABLE COUNTERCLAIMS AND CROSSCLAIMS
AVAILABLE UNDER RULE 13.
8. COURTS WATCH OUT FOR INDISPENSABLE AND NECESSARY PARTIES HIDDEN UNDER
THE GUISE OF A THIRD-PARTY DEFENDANT THROUGH RULE 14. COURTS ARE AFRAID
OF COMPLETE DIVERSITY BEING UNDERMINED (IF A PLAINTIFF RELIES ON DEFENDANT
TO IMPLEAD A THIRD PARTY P COULD NOT SUE INITIALLY, THIRD PARTY ASSERTS
CLAIM AGAINST P, AND THEN P CAN COUNTERCLAIM)
a. SCHWAB V. EIRE LACKAWANNA R. CO.: P ALLOWED TO ASSERT A
PERMISSIVE COUNTERCLAIM AGAINST A THIRD PARTY D.
D. INTERPLEADER (22 AND STATUTORY)
I. CHECK FOR RULE 19 CLAIMS BEFORE GETTING CRAZY WITH INTERPLEADER.
II. EXPLANATION:
1. INTERPLEADER IS DESIGNED TO ENABLE A PARTY WHO MIGHT BE EXPOSED TO
MULTIPLE CLAIMS TO MONEY OR PROPERTY UNDER HIS/HER CONTROL TO SETTLE THE
CONTROVERSY IN A SINGLE PROCEEDING.
2. MODERN NOTION: TWO OR MORE PEOPLE CLAIMING A PARTICULAR ASSET YOU CAN
FORCE THEM ALL INTO A SINGLE PROCEEDING.
3. TRUE INTERPLEADER:
A. PLAINTIFF IS NOT A STAKEHOLDER, HAVING NO INTEREST IN THE MONEY
(INSURANCE COMPANY IN DUNLEVY)
4. ACTION IN THE NATURE OF INTERPLEADER:
A. P IS BOTH A STAKEHOLDER AND A CLAIMANT.
III. REASONING:
1. INTEREST OF THE STAKEHOLDER
A. PROVIDING PRECLUSIVE EFFECT

47
 2. MULTIPLE LITIGATION COULD LEAD TO INCONSISTENT RESULTS OR LIABILITY
EXCEEDING THE SUM OF THE P’S ITEM VALUE.
3. RESCUE A DEBTOR FROM UNDUE HARASSMENT WHEN THERE ARE SEVERAL CLAIMS
MADE AGAINST THE SAME FUND. REVERE.
IV. REQUIREMENTS/RULES/ISSUES FROM REVERE:
1. JURISDICTION
2. STRICT IMPLEADER/NATURE OF IMPLEADER
A. DISTINGUISHING BETWEEN PURE AND IMPURE INTERPLEADER IS NO LONGER
NECESSARY. PAN AMERICAN FIRE V. REVERE.
3. POSSIBLE EXPOSURE TO MULTIPLE LIABILITY
4. ADVERSITY OF THE CLAIMANTS
A. THE CLAIMANTS, THOUGH INDIFFERENT TOWARD ONE ANOTHER, ARE IN FACT
COMPETING FOR A FUND WHICH IS NOT LARGE ENOUGH TO SATISFY THEM
ALL.
5. FAULT OF PLAINTIFF
A. ENSURE THE P IS NOT GUILTY OF “UNCLEAN HANDS”
6. AN UNLIQUIDATED TORT CLAIM IS JUSTIFIABLE FOR INTERPLEADER BUT AFTER IT IS
MADE CLEAR WHO IS ABLE TO RECOVER STATE FARM V. TASHIRE.
7. JURY TRIALS?
A. NOTHING IN RULE 22 OR THE INTERPLEADER ACT OPPOSES JURY TRIAL.
8. ENJOINING OTHER PROCEEDINGS:
A. MAY NOT INTERFERE UNLESS:
I. WHEN IT IS AUTHORIZED BY CONGRESS
1. APPLIES UNDER INTERPLEADER STAT.
II. WHERE THE INJUNCTION IS NECESSARY IN AID OF ITS JURISDICTION
III. TO PROTECT THE JUDGMENTS OF THE COURT.
B. IT WILL MOST LIKELY BE GRANTED EVEN WITHOUT STATUTE WHEN THE
OTHER CASES COME OUT OF THE SAME LIMITED POOL.
9. VENUE AND SERVICE OF PROCESS:
A. ONLY PROPER VENUE FOR THE SUIT WHEN DS DO NOT ALL RESIDE IN THE
SAME STATE IS THE RESIDENCE OF P.
B. PROCESS CANNOT RUN BEYOND THE BOUNDARY OF THE STATE.
I. THIS IS NOT THE CASE UNDER STATUTORY INTERPLEADER.
v. RULE 22: SEE CHART (VERY RARE)
1. GETS AROUND THE RULE 19 PROBLEMS—GETS EVERYONE IN THE ROOM.
2. REQUIRES IN PERSONAM JURISDICTION.
3. CONCEPTUALIZES THE CASE WITH THE HOLDER AS THE PLAINTIFF. HOLDER OF THE
ASSET SUES ALL OF THE CLAIMANTS TO DETERMINE WHO OWNS THE PROPERTY.
A. MORE APPROPRIATE FOR ACTIONS IN THE NATURE OF INTERPLEADER—
PERCEIVES OF THE PARTIES AS ADVERSE CLAIMANTS.
4. REQUIRES MAXIMUM DIVERSITY.
A. ALL CLAIMANTS MUST BE COMPLETELY DIVERSIE FROM HOLDER.
B. MUST SATISFY 75,001 AMOUNT.
5. CASE WILL GO FORWARD WITH RULE INTERPLEADER AS IN REM OR QUASI IN REM
(1).
6. New York Life Insurance v. Dunlevy (1916): personal jurisdiction must

48
 be obtained over the individual in an interpleader action to have the
judgment be binding on that individual.
a. Mrs. Dunlevy did not voluntary submit to jurisdiction when the
In Rem life insurance case occurred, therefore the judgment
given to her father was not valid.
I. THIS DECISION MADE IT DIFFICULT FOR DC TO HEAR INTERPLEADER
CASES IN DIVERSITY—PJ STOOD IN THE WAY.
1. THE STATUES ARE IN RESPONSE TO THIS DUNLEVY
DECISION.
7. In a federal court, in insurer can interplead all claimants to a particular
policy if the claims would exceed the policy limit. The only equitable
ground necessary for interpleader is the exposure to undue harassment
by a multiplicity of suits, undue harassment resulting from several
claims being made against the same fund. Adversity of claimants is a
requirement. Pan American v. Revere
vi. STATUES:
1. 28 USC 1335: INTERPLEADER:
A. DISTRICT COURT HAS JURISDICTION OVER AN INTERPLEADER CLAIM OVER
500 DOLLARS IF TWO OF THE DEFENDANTS ARE DIVERSE—IT DOES NOT ASK
IF P IS DIVERSE FROM D. CODIFICATION OF MINIMAL DIVERSITY, FIRST
TIME EVER. IT IGNORES THE HOLDER AND ONLY COMPARES THE DS.
2. 28 USC 1397: ANY INTERPLEADER UNDER STATUTE MAY BE BROUGHT IN THE
JUDICIAL DISTRICT IN WHICH ONE OR MORE OF THE CLAIMANTS RESIDE.
3. 28 US 2361: DC MAY ISSUE ITS PROCESS FOR ALL CLAIMANTS AND ENTER ITS
ORDER RESTRAINING THEM FROM INSTITUTING OR PROSECUTING ANY PROCEEDING
AFFECTING THE PROPERTY, INSTRUMENT, OR OBLIGATION INVOLVED IN THE
INTERPLEADER ACTION UNTIL FURTHER ORDER OF THE COURT.
A. ALLOWS FOR NATIONWIDE SERVICE OF PROCESS FOR BANKS AND INSURANCE
COMPANIES FOR MULTIPLE CLAIMS ON ONE ACCOUNT.
4. INSURANCE COMPANIES MAY INVOKE INTERPLEADER BEFORE THE CLAIMS AGAINST
THOSE THEY INSURED ARE REDUCED TO JUDGMENT STATE FARM V. TASHIRE.
A. STILLS THEY MAY NOT EXTEND THE INTERPLEADER ACTION OUTSIDE THE
CONFINES OF THE “POOL” TO THE INSURED ITSELF—THE TORTFEASOR.
B. THE CIRCUMSTANCES THAT ONE OF THE DS HAS AN INSURANCE POLICY DOES
NOT DRIVE THE ENTIRE TORT.
5. INTERPLEADER MAY NOT SWEEP DOZENS OF LAWSUITS OUT OF THE COURTS AND INTO
A SINGLE INTERPLEADER ACTION—IT MAY ONLY BE USED TO HELP SETTLE A
PARTICULAR POOL OF RESOURCES, NOT MANY DIFFERENT ONES WITH DIFFERENT
INTERESTS. TASHIRE.
a. A party to a multiparty litigation can only interplead the
claimants seeking the funds of that party.
b. “It cannot be used to solve all the vexing problems of multiparty
litigation out of a mass tort”.
6. A FEDERAL COURT COULD ASSERT JURISDICTION UNDER THE FEDERAL INTERPLEADER
DESPITE THE SAME CITIZENSHIP OF THE STAKEHOLDER AND ONE OF THE CLAIMANTS
TREINES V. SUNSHINE MINING CO.

49
 7. APPLY ERIE IN DIVERSITY STATUTORY INTERPLEADER IN DEALING WITH CONFLICT OF
LAWS RULES GRIFFIN V. MCCOACH.
V. INTERVENTION (RULE 24)
a. File both a and b and see where it goes!
i. If they deny you under 24(b) it is not repealable.
ii. Shrinking pot is a good reason for a 24A
B. PARTY ADDING ONESELF—THEY ARE NOT ADDED BY ORIGINAL PARTIES LIKE IN 19, 20, AND 14.
C. CUTS AGAINST THE GENERAL NOTION THAT P CONTROLS THE SUIIT.
d. Factors for determining whether intervention should be granted:
i. Does the Party have an interest? (Interest Test)
1. This should be the threshold question, from there, two other standards
must be met:
a. Intervener may be impeded in protecting his interest by the
action
b. His interest is not adequately represented by others.
ii. Smuck v. Hobson (DC COA)
iii. Other reasons to allow:
1. Applicant’s interests are not represented at all
2. The Applicant and the attorney who supposedly represents his interest
are antagonistic
3. Collusion between the representative and adverse parties.
e. Permissive intervention – may intervene when an applicant’s claim or defense and the
main action have a question of law or fact in common. Court has discretion, and should
consider whether the intervention will unduly delay or prejudice the adjudication of the
rights of the original parties.
VI. Rule 41 – Dismissal of Actions
A) NO PRECLUSIVE EFFECT TO DISMISSAL FOR LACK OF JURISDICTION, IMPROPER VENUE, FAILURE TO JOIN A
PARTY UNDER RULE 19, BUT IF THERE IS AN OPPORTUNITY TO DISMISS OR IF THERE IS A MOTION TO
DISMISS—SEE RULE CHART.

ISSUE VIII: RULE 23 CLASS ACTIONS

I. CLASS ACTION LAWSUITS
a. Can be viewed as another joinder device or better as a representational tool.
b. Diverts from the notion that individuals may be bound by a court judgment only
when they themselves have had a day in court.
C. HISTORICAL UNDERPINNINGS
I. THE NUMBER OF PERSONS WERE TOO LARGE TO PERMIT JOINDER
II. ALL MEMBERS OF THE GROUP POSSESSED A JOINT INTEREST IN THE QUESTION BEING
ADJUDICATED
III. THE NAMED PARTIES ADEQUATELY REPRESENTED THE INTERESTS OF THOSE NOT
PRESENT
D. MODERN CONTEXT
I. MASS TORT CLASS ACTIONS ARE COMMON AND VERY CONTROVERSIAL WAY OF SETTLING
COMPLEX DISPUTES
1. LACK OF P’S AUTONOMY IS A BIG ISSUE

50
 2. CERTIFICATION IS RARE IN THIS INSTANCE
A. SEE MASS TORT STATUE: 28 USC 1369
3. ECONOMIC MOTIVATION: A BUNCH OF SMALL CLAIMS ALONE WILL NOT BE
LITIGATED, BUT THAT MONEY AGGREGATED IS A LOT OF FUNDS THAT CAN BE
PUT TO GOOD USE.
II. CIVIL RIGHTS, DESEGREGATION, AFFIRMATIVE ACTION, AND VOTING RIGHTS
III. SECURITY FRAUD:
1. CONGRESS ENACTED SPECIFIC ADDITIONAL REQUIREMENTS.
2. LEAD PLAINTIFF: “A PRESUMPTION THAT THE INDIVIDUAL IS SO SELECTED
SHOULD BE ONE WITH THE LARGEST FINANCIAL INTEREST IN THE RELIEF
SOUGHT BY THE CLASS”
3. PRIVATE SECURITIES LITIGATION ACT RAISES THE STANDARD ADEQUACY
THRESHOLD—MOST SOPHISTICATED INVESTOR AVAILABLE. CF:
4. THREE STEP PROCESS:
A. PUBLICIZE THE SUIT—A PERSON MAY MOVE IN THE COURT TO
BECOME LEAD P
B. CONSIDER THE LOSSES OF THE VARIOUS PS
C. GIVE OTHER PS A CHANCE TO REBUT THE LEAD PS PLACE WITH
TYPICALITY AND ADEQUACY ARGUMENTS
5. Making sure the choice of counsel is not collusive is important in
this act!
iv. IMMIGRATION:
1. RESTRICTED CLASSWIDE RELIEF
v. LEGAL SERVICES:
1. BARRED INDIGENT LITIGANTS (ANYONE WHO RECEIVES MONEY FROM THE
FEDERALLY FUNDED LEGAL SERVICES CORP) FROM PARTICIPATING IN CA,
UNLESS THEY USE PRIVATE FUNDS.
E. INITIATION OF CLASS ACTIONS
I. SEE APPENDIX
II. LAWYERS SEEKING OUT VICTIMS IS AGAINST LAWYERING ETHICS OHRALIK V. OHIO
STATE BAR ASSC.
1. THIS DOES NOT EXTEND TO SEEKING OUT NAMED PLAINTIFFS FOR CIVIL RIGHTS
CA.
III. A CLASS:
1. MUST BE PRECISE, OBJECTIVE, AND PRESENTLY ASCERTAINABLE AND ALSO
MUST NOT DEPEND ON SUBJECTIVE CRITERIA OR THE MERITS OF THE CASE OR
REQUIRE EXTENSIVE FACTUAL INQUIRY TO DETERMINE WHO IS A CLASS
MEMBER.
2. DEFINING THE CLASS:
A. “WITHOUT ANY SPECIFIC PRESENTATION IDENTIFYING THE QUESTIONS
OF LAW OR FACT THAT WERE COMMON TO THE CLAIMS OF
RESPONDENT AND OF THE MEMBERS OF THE CLASS HE SOUGHT TO
REPRESENT THE COURT SHOULD NOT HAVE CERTIFIED” GENERAL
TELEPHONE CO. V. FALCON
B. JUST AN ALLEGATION OF RACIAL DISCRIMINATION IS NOT ENOUGH.
F. “HYBRID” CLASS ACTIONS

51
 I. PREDOMINANCE TEST:
ii. JOHNSON V. GENERAL MOTORS: PS ALLEGED RACIAL DISCRIMINATION. AN EARLIER
CLASS SUIT HAD WON INJUNCTIVE AND COMPENSATORY RELIEF, BUT P IN SECOND SUIT
CLAIMED HE HAD NOT RECEIVED NOTICE OF THE FIRST SUIT). IN THE FIRST SUIT ONLY
THE NAMED P RECEIVED COMPENSATION.
III. BEFORE AN ABSENT CLASS MEMBER MAY BE FOREVER BARRED FROM PURSUING AN
INDIVIDUAL MONETARY CLAIM (AS OPPOSED TO INJUNCTIVE RELIEF), DUE PROCESS
REQUIRES THAT HE RECEIVE SOME FORM OF NOTICE THAT THE CLASS ACTION IS PENDING
AND THAT HIS DAMAGE CLAIMS MAY BE ADJUDICATED AS PART OF IT.
JOHNSON V.
GENERAL MOTORS CORP. (1979)
iv. TICOR TITLE INSURANCE CO. V. BROWN (1994): SC SUGGESTED THERE IS AT LEAST
A SUBSTANTIAL POSSIBILITY THAT IN ACTIONS SEEKING MONETARY DAMAGES, CLASSES
CAN BE CERTIFIED ONLY UNDER RULE 23 (B)(3), WHICH PERMITS OPT-OUT, AND NOT
THE OTHER TWO, WHICH DO NOT. IN RESPONSE, SOME COURTS ARE ORDERING NOTICE
AND OPT-OUT RIGHTS IN HYBRID CASES CERTIFIED UNDER RULE 23(B)(2).
V. MINORITY RULE:
1. DUKES V. WAL-MART STORES, INC. (2004): COURT ORDERED AN
INJUNCTIVE AND DECLARATORY RELIEF CERTIFICATION EVEN THOUGH THE
CLASS SOUGHT PUNITIVE DAMAGES AND INJUNCTIVE RELIEF, EXPLAINING THAT
THE TEST IN A HYBRID CLASS ACTION TURNS ON THE PRIMARY GOAL OF THE
LITIGATION, NOT THE POTENTIAL SIZE OF A PUNITIVE DAMAGE AWARD.
II. SETTLEMENT AND CERTIFICATION
A. MOST CLASS ACTIONS ARE SETTLED AND THEREFORE THE CERTIFICATION PROCESS IS KEY.
B. CERTIFICATION CREATES NEGATIVE PUBLICITY FOR THE OPPOSITION AND THEY LOSE SETTLEMENT
LEVERAGE.
C. SETTLEMENT ONLY CLASS CERTIFICATION:
I. DO THE NORMAL ANALYSIS MINUS THE PROCEDURAL HOLDUPS FOR THE ACTUAL TRIAL:
II. FOLLOW ALL: QUESTIONS OF LAW OR FACT COMMON TO THE MEMBERS OF THE CLASS
PREDOMINATE OVER ANY QUESTIONS AFFECTING INDIVIDUAL MEMBERS, AND THAT
CLASS ACTION IS SUPERIOR TO OTHER AVAILABLE METHODS FOR FAIR ADJUDICATION:
A) THE INTEREST OF INDIVIDUAL MEMBERS OF THE CLASS TO CONTROL THEIR OWN SUITS
IF THEY WANT TO
B) THE EXTENT AND NATURE OF ANY LITIGATION ON THE ISSUE THAT HAS ALREADY
COMMENCED BY OR AGAINST MEMBERS OF THE CLASS
III. ALSO FOLLOW 23(E)
iv. Confronted with a request for settlement-only class certification, a
district court need not inquire whether the case, if tried, would
present intractable management problems, but other specifications of
the rule –those designed to protect absentees by blocking
unwarranted or overbroad class definitions – demand undiluted, even
heightened, attention in the settlement context. Amchem Products, Inc.
v. Amchem v. Windsor (1997): Rule 23 (b)(3) class – asbestos company
wants to preclude all future claims against it by setting aside a pot of
money. Court holds that were there are important conflicts of interests
among plaintiffs, a class cannot be certified, even for a settlement class—
loyalty problems (exposure only class versus symptoms class)

52
 1. No commonality (common questions of law or fact that
predominate over those affecting individual members).
a.  Predominance criterion is far more demanding than
mere commonality.
b. There are far too many different and individual questions
here, particular to different class members.
2. No typicality (claims or defenses of the named reps must be typical
of the claims or defenses of the class).
3. No adequacy – there are conflicting interests between the currently
injured and the exposure-only class members.
a. Concurring Stevens and Breyer says Ginsburg overstepped
her bounds in the opinion with that in mind use your own
philosophy to approach a difficult settlement question on
the exam.
4. Ortiz v. Fibreboard (1999): Rule 23 (b)(1)(B) class seeks a global
settlement. BUT there are conflicts of interest—no commonality.
There are differences between current and future claimants, and
pre- and post-insurance claims. Lack of opt-out opportunity and
moving to a B(1) instead of a B(3) helps the company and not the
victims enough. The settlement has to be fair and it has to satisfy
the important components of 23B. It has to be both, even it will
save transaction costs.
vi. SUBCLASSES:
1. AFTER ANCEM IT IS CLEAR THAT THE CLASS MUST BE SPLIT INTO SUBCLASSES
FOR PRESENT AND FUTURE CLAIMS.
2. EXAMPLE OF SUCCESSFUL SUBCLASSES:
A. HOLOCAUST CASES
B. PRESCRIPTION DRUG CASE: IN RE DIET DRUGS
III. PRECLUSION: BINDING NONPARTIES TO CLASS ACTION DECISIONS/COLLATERAL ATTACK ON
CLASS ACTION DECISIONS:
A. ENSURE DUE PROCESS OCCURRED.
B. ARE THE INTERESTS PROPERLY REPRESENTED HANSBERRY V. LEE ANALYSIS
C. MEMBERS OF A CLASS NOT PRESENT AS PARTIES TO THE LITIGATION MAY BE BOUND BY THE
JUDGMENT WHERE:
1. THEY ARE IN FACT ADEQUATELY REPRESENTED BY PARTIES WHO ARE PRESENT,
OR
2. WHERE THEY ACTUALLY PARTICIPATE IN THE CONDUCT OF THE LITIGATION IN
WHICH MEMBERS OF THE CLASS ARE PRESENT AS PARTIES,
3. OR WHERE THE INTEREST OF THE MEMBERS OF THE CLASS, SOME OF WHOM ARE
PRESENT AS PARTIES, IS JOINT,
4. OR WHERE FOR ANY OTHER REASON THE RELATIONSHIP BETWEEN THE PARTIES
PRESENT AND THOSE WHO ARE ABSENT IS SUCH AS LEGALLY TO ENTITLE THE
FORMER TO STAND IN JUDGMENT FOR THE LATTER. HANSBERRY V. LEE
d. A failure of due process occurs only in those cases where it cannot be said that the
procedure adopted fairly insures the protection of the interests of absent parties
who are to be bound by it—When there are internal conflicts of interests (loyalty

53
 problem) in the class it should not be certified and is not a valid class. Hansberry
I. THOSE WHO DO NOT WANT TO ENFORCE A RACIALLY DISCRIMINATORY LAND CLAIM ARE
NOT THE SAME AS THOSE THAT DO.
e. ALLOWING TO COLLATERALLY ATTACK A JUDGMENT THAT P DOES NOT APPEAL BECAUSE IT
BENEFITS HIM AND NOT THE CLASS-- TEST FOR ADEQUACY OF REPRESENTATION IN A
COLLATERAL ATTACK:
1. (1) DID THE TRIAL COURT IN THE FIRST SUIT DETERMINE CORRECTLY THAT
THE REPRESENTATIVE WAS ADEQUATE?
2. (2) DOES IT APPEAR, AFTER TERMINATION OF THE SUIT, THAT THE REP. DID
NOT ADEQUATELY PROTECT THE INTERESTS OF THE CLASS? GONZALEZ V.
CASSIDY (5 CIR)
TH

F. IT HAS TO BE CLEAR THAT THE REPRESENTATIVE IS SUING ON BEHALF OF THE “CLASS” AND THAT
IT HAS TO BE PROVEN THAT THE CLAIMS OF THOSE IN COURT ARE THE SAME AS THE ABSENT
PARTIES.
RICHARDS V. JEFFERSON COUNTY, AL.
g. COOPER V. FEDERAL RESERVE BANK OF RICHMOND:
I. ISSUE: WHERE A JUDGMENT IN A CLASS ACTION THAT AN EMPLOYER DID NOT ENGAGE
IN A GENERAL PATTERN OF RACIAL DISCRIMINATION BARS AN INDIVIDUAL
DISCRIMINATION SUIT LATER?
II. HOLDING: THE JUDGMENT IN COOPER BARS THE CLASS MEMBERS FROM BRINGING
ANOTHER CLASS ACTION AGAINST THE BANK ALLEGING A PATTERN OF BEHAVIOR AND
PRECLUDES CLASS MEMBERS FROM LITIGATING THE QUESTION OF A “PATTERN OF
BEHAVIOR”, HOWEVER, INDIVIDUALS FROM THE CLASS MAY MAKE INDIVIDUAL
DISCRIMINATION SUITS BASED UPON SPECIFIC INSTANCES.
1. Where an issue has not been actually litigated (liability facts are
different), then there is no claim preclusion. Here, prior action
found no pattern or practice of discrimination. However, an
individual may have been discriminated against.  Look at the
liability facts.
IV. SUBJECT MATTER JURISDICTION AND CLASS ACTION LAWSUITS
A. STATE COURT
B. FEDERAL QUESTION
I. NO MINIMAL AMOUNT REQUIRED
C. DIVERSITY
I. 75,001—ONE OF THE NAMED PLAINTIFFS HAVE TO HAVE IT.
II. IS THERE DIVERSITY?
1. THE DETERMINATION OF DIVERSITY OF CITIZENSHIP IS BASED ON THE NAMED PS
ONLY SUPREME TRIBE OF BEN-HUR V. CAUBLE (1921)
2. FOR UNINCORPORATED ASSOCIATION—ONLY WILL BE CONSIDERED IN NORMAL
FASHION IF NAMED AS A P AS AN ORG PATRICIAN TOWERS OWNERS, INC. V.
FAIRCHILD (4 ) TH

III. TO WHICH CLASS MEMBERS SHOULD THE COURT LOOK IN CALCULATING THE
JURISDICTIONAL-AMOUNT REQUIREMENT?
1. SEPARATE AND DISTINCT CLAIMS CANNOT BE AGGREGATED AGGREGATION IS
PERMITTED ONLY (1) A SINGLE P SEEKS TO AGGREGATE TWO OR MORE CLAIMS
AGAINST A SINGLE D (2) TWO OR MORE PS UNITE TO ENFORCE A SINGLE
TITLE THAT THEY HAVE A COMMON/UNDIVIDED INTEREST. SNYDER V. HARRIS

54
 (1969)
2. ALLAPATTAH: WHEN AT LEAST ONE CLAIM SATISFIES THE AMOUNT-IN-
CONTROVERSY REQUIREMENT AND THERE ARE NO OTHER RELEVANT
JURISDICTIONAL DEFECTS THE CASE MAY MOVE FORWARD WITH SUPPLEMENTAL
JURISDICTION OVER OTHER CLAIMS.
V. PERSONAL JURISDICTION AND CHOICE OF LAW:
A. MINIMUM CONTACTS IS ONLY WITH THE DEFENDANT IN A CLASS ACTION SUIT SCHUTTS.
B. NON-NAMED PS MUST HAVE THE OPPORTUNITY TO OPT OUT OR THE JUDGMENT WILL NOT BE
BINDING ON THEM AT A LATER DATE SCHUTTS
I. THIS ONLY APPLIES TO CASES DEALING WITH MONETARY DAMAGES
C. CHOICE OF LAW:
I. APPLY THE LAW OF THE STATE IN WHICH THE COURT SITS IS NO PROBLEM AS LONG AS
THERE IS NO CONFLICT WITH THE OTHER JURISDICTIONS. THERE MUST BE SIGNIFICANT
CONTACT OR SIGNIFICANT AGGREGATION OF CONTACTS CREATING STATE INTERESTS,
SUCH THAT CHOICE OF LAW IS NEITHER ARBITRARY NOR UNFAIR SCHUTTS.
1. THE STATE MAY NOT ABROGATE THE RIGHTS OF PARTIES BEYOND ITS BORDERS
HAVING NO RELATION TO ANYTHING DONE OR TO BE DONE WITHIN THEM
(CLASS ACTIONS MAY HAVE TO APPLY MULTIPLE LAWS)
A. ASK:
I. ARE THERE MATERIAL DIFFERENCES IN LAW?
II. WHAT ARE THE CONTACTS OF THE OTHER STATES, AND DO
THEY HAVE AN INTEREST?
III. ARE THERE DIFFERENT CONTRACTS OR TRANSACTIONS THEN
WHAT OCCURRED IN THE HOME STATE?
VI. VENUE:
A. COURTS HAVE LOOKED ONLY TO THE RESIDENCES OF THE CLASS REPRESENTATIVES FOR THE
PURPOSES OF VENUE.

ISSUE VIII: RULE 23 (APPENDIX I)

• STEP ONE: FILING OF COMPLAINT AND SERVICE OF SUMMONS—FILED IN A REPRESENTATIVE
CAPACITY ON BEHALF OF “CLASS”. REPRESENTED PARTIES ARE SAID TO BE “ABSENT”.
• REPRESENTATIVE MUST BE A MEMBER OF THE CLASS.
• NAMED PLAINTIFF’S CLAIM MUST NOT BE RESOLVED BEFORE THE CLASS IS CERTIFIED OR THE CLAIM MAY
BE DISMISSED. BRADLEY V. HOUSING AUTHORITY (8 CIR), BUT IT MAY EXPIRE IN THE NORMAL COURSE
TH

OF EVENTS AND THE CLAIM WILL SURVIVE.

I. A: PREREQUISITES TO A CLASS ACTION:

ONE OR MORE MEMBERS OF A CLASS MAY SUE AS A REPRESENTATIVE FOR ALL IF:
1) THE CLASS IS SO NUMEROUS THAT JOINDER OF ALL MEMBERS IS IMPRACTICABLE
NUMEROSITY(NORMALLY MORE THAN 40 IS REQUIRED) LESS THAN 25 IS NO GOOD. 1.5
MILLION IN WAL-MART CASE WAS IMPRACTIBLE.

2) THERE ARE QUESTIONS OF LAW OR FACT COMMON TO THE CLASS

COMMONALITY: Key question: whether differences in the factual
background of each claim will affect the outcome of the legal issue.
(Califano v. Yamasaki, 1979)

55
 3) THE CLAIMS OR DEFENSES OF THE REPRESENTATIVE PARTIES ARE TYPICAL OF THE CLAIMS OR
DEFENSES OF THE CLASS
TYPICALITY: “WHEN EACH CLASS MEMBER MAKES SIMILAR LEGAL ARGUES TO PROVIDE THE
D’S LIABILITY” MARISOL V. GIULIANI (2 ). ABOUT FAIR AND ADEQUATE REPRESENTATION.
ND

4) THE REPRESENTATIVE PARTIES WILL FAIRLY AND ADEQUATELY PROTECT THE INTERESTS OF
THE CLASS.
ADEQUACY: A defect in the adequacy of representation might leave the
judgment vulnerable to collateral attack (Hansberry)

A defect in the adequacy of representation in an action might leave the

judgment vulnerable to collateral attack.

“Serves to uncover conflicts of interest between named parties and the

class they seek to represent” Anchem v. Windsor

Example: Mexican American passed over for promotion that went to less senior, less qualified whites,
sought certification as a class of Mexican-Americans employed, seeking employment, or had been denied
employment. SCOTUS decertified class: Here, there is a gap between individual’s claim and his
unsupported allegation that the company has a policy of discrimination, AND the existence of a class of
persons suffering the same injury and that the individual’s claim will by typical of the class claims.
General Telephone Co. v. Falcon (1982)

II. B: CLASS ACTIONS MAINTAINABLE: BEFORE B MAKE SURE ALL OF A IS GOOD!

(1) SEPARATE ACTIONS WOULD CREATE THE RISK OF:

(1) CREATES MANDATORY CLASS ACTIONS—NO OPT OUT—INDIVIDUAL ACTIONS CAUSE PREJUDICE

B1(A) INCONSISTENT OR VARYING ADJUDICATIONS THAT WOULD RESULT IN THE OPPOSITION

PARTY HAVING INCOMPATIBLE STANDARDS OF CONDUCT

APPLIES WHEN DIFFERENT RESULTS IN INDIVIDUAL ACTIONS WOULD PLACE THE NONCLASS
PARTY IN A POSITION OF UNCERTAINTY, NOT KNOWING HOW TO TREAT THE CLASS AS A
WHOLE.

B1(B) INDIVIDUALS NOT PARTY TO THE SEPARATE ACTIONS WOULD HAVE THEIR INTERESTS
IMPAIRED OR IMPEDED AGAINST AS A PRACTICAL MATTER

AVOID “RACE TO THE POT” POT SHRINKING IS A PRACTICAL PROBLEM

B(2) THE PARTY OPPOSING THE CLASS HAS ACTED OR REFUSED TO ACT ON GROUNDS GENERALLY
APPLICABLE TO THE CLASS, THEREBY MAKING THE RESULTS OF THE SUIT APPLICABLE TO THE CLASS AS A
WHOLE

(MOST POPULAR OF THE THREE) INJUNCTION: CIVIL RIGHTS, EMPLOYMENT DISC., CONSUMER,
ENVIRONMENTAL—STOP AN ACTION AND NOT GET $. DOES NOT EXTEND TO CASES IN WHICH THE

56
 APPROPRIATE FINAL RELIEF IS MONEY. (NOTICE IS NOT ESSENTIAL/NO OPT OUT)
ONLY NEEDS TO BE
“GENERALLY APPLICABLE” TO THE CLASS- NOT ALL HAVE TO EXPERIENCE THE PROBLEM (DRESS CODE).

B(3) QUESTIONS OF LAW OR FACT COMMON TO THE MEMBERS OF THE CLASS (1) PREDOMINATE OVER ANY
QUESTIONS AFFECTING INDIVIDUAL MEMBERS, AND (2) THAT CLASS ACTION IS SUPERIOR TO OTHER
AVAILABLE METHODS FOR FAIR ADJUDICATION. 4 QUALIFICATIONS:
A) THE INTEREST OF INDIVIDUAL MEMBERS OF THE CLASS TO CONTROL THEIR OWN SUITS IF
THEY WANT TO
B) THE EXTENT AND NATURE OF ANY LITIGATION ON THE ISSUE THAT HAS ALREADY
COMMENCED BY OR AGAINST MEMBERS OF THE CLASS
C) PARTICULAR FORUM—DESIRABLE?
D) DIFFICULTIES IN MANAGING THE CLASS

DAMAGE ACTIONS, MASS TORTS, INJURED IN THE SAME WAY BY THE D. LOOK FOR
EFFICIENCY, ECONOMY OUTWEIGHING THE INTEREST OF EACH INDIVIDUAL TO HAVE HIS/HER
OWN ADJUDICATION. DO A TEST OF THE SUPERIORITY OF THE CA.

MEANT FOR PEOPLE WHO INDIVIDUALLY WOULD BE WITHOUT EFFECTIVE STRENGTH TO BRING
THEIR OPPONENTS TO COURT AT ALL.

IN ANCHEM, IT WAS FOUND THAT THE EXPOSURE ONLY V. ALREADY INJURED CLASSES WERE
TOO AT ODDS FOR AN ISSUE TO HAVE PREDOMINANCE. LOOK FOR LINKING FACTORS—ARE
THERE VARIABLES? MIGHT NOT PASS PREDOMINANCE.

III. C: CLASS CERTIFICATION; CLASS COUNSEL; NOTICE AND MEMBERSHIP IN CLASS; JUDGMENT; MULTIPLE
CLASSES AND SUBCLASSES
C(1)(A) AFTER THE SUIT IS FILED BY THE REPRESENTATIVE, OR THE REPRESENTATIVE IS SUED, THE COURT
MUST DETERMINE (AT AN EARLY TIME) TO CERTIFY THE CLASS ACTION
MUST BE PRECISE, OBJECTIVE, AND PRESENTLY ASCERTAINABLE

C(1)(B) CERTIFICATION MUST DEFINE: THE CLASS, THE CLAIMS, ISSUES, DEFENSES, AND MUST APPOINT
COUNSEL UNDER 23(G).

COURT MAY CHOOSE ONLY TO CERTIFY A PARTIAL CLASS.

C(1)(C) CERTIFICATION MAY BE ALTERED/AMENDED BEFORE FINAL JUDGMENT

C(2)(A) FOR CLASSES UNDER 23(B)(1) AND 23(B)(2), THE COURT MAY DIRECT APPROPRIATE NOTICE TO
THE CLASS.

C(2)(B) FOR CLASSES UNDER 23(B)(3), THE COURT MUST DIRECT TO CLASS MEMBERS THE BEST NOTICE
PRACTICABLE UNDER THE CIRCUMSTANCES, INCLUDING INDIVIDUAL NOTICE IF POSSIBLE THROUGH A
REASONABLE EFFORT. THE NOTICE MUST STATE:
-THE NATURE OF THE ACTION, DEFINITION OF THE CLASS, CLASS CLAIMS, ISSUES, DEFENSES, THAT THEY
MAY APPEAR IF THEY DESIRE, OPTION TO “OPT OUT”, THE BINDING EFFECT OF A CLASS JUDGMENT
UNDER 23(C)(3)

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 IF THE PARTY DOES NOTHING AFTER RECEIVING NOTICE, HE IS IN. “COSTS OF PROVIDING NOTICE MUST
BE BORNE BY THE PARTY SEEKING CLASS TREATMENT” EISEN V. CARLISLE- CANNOT BE FORWARDED
ONTO THE D. IF THE CLASS SUIT IS SUCCESSFUL, THE COST OF NOTICE CAN BE SUBTRACTED FROM THE
RECOVERY.

OPPENHEIMER FUND V. SANDERS: D CANNOT BE MADE TO BEAR THE COST OF NOTICE THROUGH THE
DISCOVERY PROCESS, BUT BUSINESS RECORDS WILL STILL BE MADE AVAILABLE.

C(3) IN A JUDGMENT UNDER B(1) OR B(2), THE COURT WILL EXPLAIN WHO WERE THE MEMBERS OF THE
CLASS. UNDER B(3), THE COURT WILL STATE WHO RECEIVED NOTICE, WHO REQUESTED EXCLUSION, AND
WHO THE COURTS DEEMS TO BE MEMBERS OF THE CLASS.

C(4)(A) AN ACTION MAY BE BROUGHT OR MAINTAINED AS A CLASS ACTION WITH RESPECT TO PARTICULAR
ISSUES

C(4)(B) A CLASS MAY BE DIVIDED INTO SUBCLASSES AND EACH SUBCLASS TREATED AS A CLASS.

IV. D: ORDERS IN CONDUCT OF ACTIONS (PROCEDURAL RULES): THE COURSE OF PROCEEDINGS:

CREATES A TIMETABLE FOR DISCOVERY, PRESENTATION OF ISSUES; SETS TIME LIMITS ON ORAL
PRESENTATION MADE BY COUNSEL; ESTABLISHES A COMMITTEE OF COUNSELS; REGULATES THE SUBSTANTIVE
ASPECTS OF DISCOVERY (FROM WHOM, WHAT MAY BE REQUESTED).

BECAUSE OF THE DIFFICULT TASK OF SORTING OUT MONETARY RELIEF IN A CLASS ACTION, IT OFTEN
REQUIRES “FRAGMENTATION” OR “INDIVIDUALIZATION” OF THE CLASS.

WAYS TO PROCEDURALLY HANDLE THE CLASS:

1) ONE TRIAL FOR DEFENDANT’S LIABILITY AND THE AMOUNT OF DAMAGES
A. THE COURT THEN DETERMINES HOW TO DISTRIBUTE THE AWARD AMONG INDIVIDUAL CLASS
MEMBERS.
2) BIFURCATED TRIAL
A. FIRST TRIAL ONLY CONSIDERS LIABILITY
B. TRIAL TWO CONSIDERS ADDRESSES DAMAGES
I. HIGHLY INDIVIDUALIZED—MINITRIALS, ADMINISTRATIVE HEARINGS, ETC.
3) SAMPLING:
I. JUDGE SELECTS SOME OF THE CASES AT RANDOM, AND THEN COMBINES THE
OUTCOME OF THE SAMPLE CASES STATISTICALLY TO YIELD A RESULT FOR THE
LARGER CLASS POPULATION.
4) FLUID CLASS RECOVERY:
a. CLASS AWARD PROVIDES A GENERAL BENEFIT TO CLASS MEMBERS RATHER THAN TO
COMPENSATE THEM INDIVIDUALLY. DAAR V. YELLOW CAB CO.: LOWER THE PRICE OF THE
CABS FOR ALL CUSTOMERS.
B. DAMAGE IS SPREAD EVENLY BETWEEN THOSE WHO COULD HAVE BEEN AFFECTED
c. SHAW V. TOSHIBA, 2.1 BILLION FOR FAULTY COMPUTER DISKS—THE MONEY LEFT OVER
WENT TO A CHARITY TO HELP PUT COMPUTERS IN SCHOOLS.

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 V. (E): SETTLEMENT, VOLUNTARY DISMISSAL, OR COMPROMISE
(E)(1)(A) COURT MUST APPROVE ANY SETTLEMENT, VOLUNTARY DISMISSAL, OR COMPROMISE OF THE CLAIMS,
ISSUES, OR DEFENSES OF A CERTIFIED CLASS.

(E)(1)(B) NOTICE MUST BE SENT OF ANYTHING THAT HAPPENS IN E1A.

(E)(1)(C) COURT WILL APPROVE SETTLEMENT AFTER A HEARING TO DETERMINE IT IS FAIR, REASONABLE, AND
ADEQUATE

E2: MUST FILE A STATEMENT IDENTIFYING THE AGREEMENT FOR SETTLEMENT

E3: UNDER 23(B)(3), THE COURT MAY REFUSE TO SETTLEMENT UNLESS IT AFFORDS A NEW OPPORTUNITY TO
REQUEST EXCLUSION TO INDIVIDUAL CLASS MEMBERS WHO HAD AN EARLIER OPPORTUNITY TO “OPT OUT” BUT
DID NOT ORIGINALLY.

(BECAUSE THEY MIGHT NOT HAVE HAD ENOUGH INFORMATION IN THE FIRST INSTANCE)
DUE PROCESS DEMANDS THAT THE ABSENT CLASS MEMBERS—WHAT HAPPENS IF THE REP. PARTIES
HAVE LOST THEIR ENTHUSIASM FOR THE LITIGATION/GETTING AN UNFAIR SHARE.
THOSE PROPOSING SETTLEMENT HAVE THE BURDEN TO PROVE ITS FAIRNESS.

E(4)(A): ANY CLASS MEMBER MAY OBJECT TO SETTLEMENT

IF IT IS GRANTED, THE OBJECTING CLASS MEMBERS MAY APPEAL

BE WARY OF A COUPON SETTLEMENT—IN KIND.

E(4)(B): AN OBJECTION MAY ONLY BE WITHDRAWN WITH THE COURT’S APPROVAL.

VI. (F) APPEALS WITHIN 10 DAYS, THE C.O.A. MAY REVIEW A CLASS CERTIFICATION. DOES NOT STOP
PROCEEDINGS WITHOUT ADDITIONAL ORDER THOUGH.

FIRST CIRCUIT: HEAR AN APPEAL WHEN THE ACTION WOULD END BECAUSE CA IS P’S ONLY RECOURSE, IF
D FEELS IRRESISTIBLE PRESSURE TO SETTLE DUE TO CERTIFICATION, CLARIFICATION OF A FUNDAMENTAL
ISSUE OF LAW. APPEALS COURT SHOULD BE RESTRAINED AS TO WHETHER TO REVIEW IT.

VII. (G) CLASS COUNSEL.

(G)(1) APPOINTING CLASS COUNSEL:
G(1)(A): UNLESS A STATUE PROVIDES OTHERWISE A COURT THAT CERTIFIES A CLASS MUST APPOINT CLASS
COUNSEL.

G(1)(B): MUST FAIRLY AND ADEQUATELY REPRESENT THE INTERESTS OF THE CLASS.

(G)(1)(C)(i): IN APPOINTING COUNSEL THE COURT MUST CONSIDER:

1) THE WORK COUNSEL HAS DONE IN IDENTIFYING OR INVESTIGATING POTENTIAL CLAIMS IN THE ACTION
2) COUNSEL’S CLASS ACTION EXPERIENCE/THIS TYPE OF ISSUE
3) COUNSEL’S KNOWLEDGE OF THE APPLICABLE LAW
4) RESOURCES COUNSEL IS WILLING TO COMMIT TO THE CLASS ACTION

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 (ii) MAY CONSIDER ANY OTHER MATTER PERTINENT
(iii) MAY DIRECT POTENTIAL CLASS COUNSEL TO PROVIDE INFORMATION ON ANY SUBJECT PERTINENT TO
THE APPOINTMENT AND TO PROPOSE TERMS FOR FEES AND NONTAXABLE COSTS; AND

(IV) MAY MAKE ANY OTHER FURTHER ORDERS

G(2) APPOINTMENT PROCEDURE:

G(2)(A) INTERIM COUNSEL WILL BE APPOINTED UNTIL A DECISION ON CERTIFICATION

G(2)(B) APPLICANTS MUST PASS THE ENTIRE TEST UNDER G(1) AND IF THERE IS MORE THAN ONE APPLICANT
THE COURT SHOULD CHOOSE THE APPLICANT BEST APPLE TO REPRESENT THE INTEREST OF THE CLASS

(G)(2)(C) THE ORDER OF APPOINTMENT MAY INCLUDE THE PROVISIONS FOR FEES AND COSTS UNDER RULE
23(H)

VIII. H: ATTORNEY FEES AWARD: MAY AWARD REASONABLE FEES AND NONTAXABLE COSTS AUTHORIZED BY LAW
OR BY AGREEMENT OF THE PARTIES AS FOLLOWS:
BOEING CO. V. VAN GEMERT: THE LOSING PARTY CAN PAY THE WINNING PARTY’S ATTORNEY’S FEES.

DETERMINING THE FEES: 1) AMOUNT OF BENEFIT THE SUIT PRODUCES-- % OF THE FUND FOR THE
CLASS. 2) LODESTAR: NUMBER OF HOURS MULTIPLIED BY THE NORMAL BILLING RATE AND ADJUST FOR
RISKINESS FACTORS AND QUALITY OF PERFORMANCE (SCOTUS HAS DISCOURAGED RISK
MULTIPLIER)

H(1): MOTION FOR AWARD OF ATTORNEY FEES:

MADE BY MOTION 54(D)(2), NOTICE OF THE MOTION MUST BE SERVED ON ALL PARTIES AND, FOR
MOTIONS BY CLASS COUNSEL, DIRECTED TO CLASS MEMBERS IN A REASONABLE MANNER.

H(2): OBJECTIONS TO MOTION: ANYONE ON EITHER SIDE OF THE V. MAY OBJECT

H(3): HEARING AND FINDINGS: MAY HOLD A HEARING ON THE ISSUE

H(4): REFERENCE TO SPECIAL MASTER OR MAGISTRATE JUDGE—UNDER 54(D)(2)(D)

ISSUE VIII: 1332 AND CLASS ACTIONS (APPENDIX II), NOT ON EXAM

I. 1332(D)(1): CLASS ACTIONS

D1: DEFINITIONS

D2: THE DISTRICT COURT SHALL HAVE ORIGINAL JURISDICTION OF ANY CIVIL ACTION IN WHICH THE MATTER IN
CONTROVERSY EXCEEDS THE SUM OR VALUE OF 5,000,001, EXCLUSIVE OF INTEREST AND COSTS, AND IS A
CLASS ACTION IN WHICH:

D2A: ANY MEMBER OF A CLASS OF PLAINTIFFS IS A CITIZEN OF A STATE DIFFERENT FROM ANY

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 DEFENDANT.

2B: ANY MEMBER OF A CLASS OF PLAINTIFFS IS A FOREIGN STATE/OR A CITIZEN OF A FOREIGN STATE
AND ANY DEFENDANT IS A CITIZEN OF A STATE; OR

2C: D=FOREIGN.

D3: COURT MAY DECLINE JURISDICTION OVER A CLASS ACTION IN WHICH GREATER THAN 1/3 BUT LESS THAN
2/3 OF THE MEMBERS OF ALL PROPOSED PLAINTIFF CLASSES IN THE AGGREGATE AND THE PRIMARY DEFENDANTS
ARE CITIZENS OF THE STATE IN WHICH THE ACTION WAS ORIGINALLY FILED BASED ON CONSIDERATION OF:

A) NATIONAL INTEREST- INTERSTATE INTEREST?

B) LAWS OF THE STATE OR THE LAWS OF OTHER STATES?

C) PLEADED IN A MANNER SEEKING TO AVOID FEDERAL JURISDICTION?

D) WHETHER THE ACTION WAS BROUGHT IN A FORUM WITH A DISTINCT NEXUS OF THE HARM-THE
CLASS-OR THE DS.

E) IS THE STATE OF THE ORIGINAL FILING A PLACE WHERE THERE ARE A TON OF PS FROM THAT STATE
AND WHERE DO THE REST OF THE PEOPLE LIVE?

F) WAS THERE A PREVIOUS FILING?

D(4): DECLINE JURISDICTION:

D4AI: OVER CLASS ACTIONS IN WHICH

A(I)(I): GREAT THAN TWO-THIRDS OF THE MEMBERS OF ALL PROPOSED CLASSES ARE FROM THE ORIGINAL
STATE

D4AIII: ONE D IS:

AA. FROM WHOM SIGNIFICANT RELIEF IS SOUGHT BY THE CLASS, (BB) WHOSE CONDUCT FORMS
THE BASIS FOR THE CLAIMS, (CC) WHO IS A CITIZEN OF THE STATE IN WHICH MORE 2/3 OF THE
CLAIMANTS ARE FROM; AND

D4AIIII: THE INJURIES OCCURRED IN THAT STATE

D4AII: NO OTHER SUITS WERE FILED.

D4(B): 2/3 OR MORE OF THE MEMBERS OF THE CLASS AND THE PRIMARY DS ARE CITIZENS OF THE STATE
IN WHICH THE ACTION WAS ORIGINALLY FILED.

D5: D2, D3, AND D4 DOES NOT APPLY WHEN THE PRIMARY DEFENDANTS ARE STATES, STATE OFFICIALS, OR

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GOVERNMENT ENTITIES THAT THE DC MAY NOT HAVE JURISDICTION OVER OR IF THE NUMBER OF THE CLASS IS
LESS THAN 100 PEOPLE.

D6: THE VALUE OF 5,000,0001 CAN BE ACHIEVED THROUGH AGGREGATING PS CLAIMS

D7: CITIZENSHIP IS DETERMINED ON THE DAY OF FILING

D8: STATUTES APPLIES BOTH BEFORE AND AFTER FILING

D9: EXCLUDES THE SECURITIES STATUTES

D10: AN UNINCORPORATED ASSOCIATION IS A CITIZEN OF THEIR PRINCIPLE PLACE OF BUSINESS.

D11: MASS TORT STUFF

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