CIVIL PROCEDURE -- READING ASSIGNMENTS

Professor Achtenberg

Choice of Law in Federal Court

This is the reading list for the vertical choice of laws section of the second semester of the class. This entire section deals with a single question:

Sometimes a claim is in federal court solely because of diversity or because it is a supplemental state law claim. In that situation, how does the court decide which issues will be governed by federal law and which issues will be governed by state law?

The Supreme Court has struggled with this question since 1842 and keeps changing the answer. We're going to work through that history primarily by seeing how you as a lawyer would argue a particular case (the attached Erie Doctrine Discussion Hypothetical) using each of the seminal Supreme Court decisions as your authority. Students who sit on the left side of the class (the four columns of seats to my left as I face you) will represent Paul, while students who sit on the right side of the class will represent Dan. In each class, you will be asked to argue the hypothetical by explaining what standard the Supreme Court articulated in a particular case (e.g. Swift v. Tyson) and how that standard shows that your client should win. For each class, you will need to prepare to argue based on each of the cases assigned for that class.

I expect that the hardest part of preparing for class will be your effort to identify the standard each case sets for deciding which issues will be governed by federal law and which by state law. For example, in dealing with Swift, you will need to identify its general rule (that federal common law usually governs) and the list of exceptions (see the middle of page 922) where state law would govern. I strongly encourage you to e-mail me (or drop by my office) with questions or with your tentative conclusions as to the standards in each case. I also think this is an excellent opportunity for you to work together in study groups.

We will cover the materials in the order indicated. However, the breakdown by class session is (as always) only approximate.

Classes / Topic / Pages
22 / Swift and Erie
Be ready to argue the hypo under each of these case.
In addition, try to decide whether Erie is based on statutory interpretation, the constitution, or something else. / 921-932
28 USC 1652
The Outcome Determinative Approach
Be prepared to argue the hypo under Guaranty Trust. (Read the note cases 938-942 for background only)
Warning: Do not assume that this approach is still viable -- but do not assume that it has disappeared entirely either. Read each of the 4 note cases and be prepared to identify what the specific issue was, how the court resolved it, and why. / 932-942
An Aside on Which State Law to Apply.
Read the note on 942-44 carefully and be certain you understand what Klaxon tells us about which state law the federal district courts should apply when they apply some state law. / 942-944
The Balancing Approach
Be prepared to argue the hypo under Byrd. See Warning above. / 944-951
23 / Modern Efforts at Synthesis (I)
Just one case for this class (Hanna) but it's the most important one in the entire section so read it very carefully. Be prepared to argue the hypo under Hanna. / 951-959
Notes on 962-967
28 U.S.C. 2072
24 / Modern Efforts at Synthesis (II)
Now try to figure out what Burlington Northern and Walker add to Hanna's test. Then look back at Justice Harlan's opinion in Hanna and look at Justice Kennedy's opinions in Chambers (Note 5 at 975-976). Try to figure out what arguments need to be made to get Kennedy's vote. (Be sure to figure out what Harlan and Kennedy mean by primary conduct.) As usual, be ready to argue the hypo under these cases, but also be ready to argue the hypo as if the Court was made up entirely of Justices who agreed with Harlan and Kennedy. / 967-976
25 / Modern Efforts at Synthesis (III)
For this class, prepare a workable flow chart to determine whether to apply state or federal law (a) when their is no Federal Rule of Civil Procedure, no federal statute, and no federal constitutional provision dealing with the issue, (b) when there is a Federal Rule of Civil Procedure dealing with the issue, (c) when there is a federal statute dealing with the issue, and (d) when there is a federal constitutional provison dealing with the issue. For further details, see the attached Instructions for Flow Charts. / No New Reading
Determining State Law
Background reading only / 968-974
26 / Catch Up and Review
Outline in writing your answer to the attached 1997 Exam question. / No New Reading

Instructions for Flow Charts

This assignment is an ungraded exercise. The students who have done it in the past have indicated that it was an extremely useful learning experience and that it helped them on the exam. It will not be collected, but your colleagues will be reviewing parts of your flow chart on the Elmo. Please make two copies so that we can mark on one.

Parts of some of your flow charts will be put on the Elmo and projected for the class. So that the students will be able to see what you have done, please follow the following directions:

1.Please draw your flow charts with a felt tip pen or some other writing instrument that makes a reasonably thick line. Please do not write in a teensy-tiny script intended to show that the entire constitution could be written on the back of a dime. The Elmo likes bold, reasonable size printing.

2. Feel free to use more than one sheet of paper. You can tape them together if you want, but it is much easier to just use connecting directions. (For example, if you are using multiple sheets, you can have an arrow that just goes to a circle that says, e.g., Go to Erie Factors Analysis, and then have another sheet that starts with a circle labeled Erie Factors Analysis.

3.Put your name on the back of each page of your chart. (You can put it on the front but then you run the risk that the whole class will know who prepared the chart.)

If you have any questions about how to do this assignment, please call me or e-mail me or come by my office.

Erie Doctrine Discussion Hypothetical (Based on Q 1 from the 1994 Exam)

Relevant Euphoria State Law

The state of Euphoria enacted a statute requiring that, in all suits seeking punitive damages, the plaintiff must prove the elements necessary for punitive damages beyond a reasonable doubt. Thus, in Euphoria state courts, if a plaintiff prays for punitive damages on the basis that the defendant's conduct was malicious, the plaintiff must prove malice beyond a reasonable doubt.

In addition, the Euphoria statute provides that in punitive damage cases, the amount of punitive damages will be decided in the second part of a bifurcated trial. In the first part, the jury decides liability for compensatory damages, the amount (if any) of compensatory damages, and liability for (but not the amount of) punitive damages. In this first part, no evidence of defendant's net worth is admissible. If the jury, in the first part of the trial, finds that defendant is liable for punitive damages, the court then conducts the second part of the trial during which defendant's net worth is admissible and at the end of which the jury determines the amount of punitive damages to award. The judge is given no discretion: a punitive damage case always requires a bifurcated trial.

Relevant Federal Law

There is no Federal Rule of Civil Procedure or federal statute setting forth the burden of proof for punitive damages. However, in federal question civil cases, federal judges generally apply the preponderance of the evidence standard to all factual issues -- including issues necessary for an award of punitive damages.

Federal Rules of Civil Procedure 42(b) provides, in relevant part, "The court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of . . . any separate issue . . . or issues." This has been interpreted to give the trial court extremely broad discretion to decide whether or not to bifurcate issues for trial.

Facts

Paul Plaintiff sued Dan Defendant in the United States District Court for the District of Euphoria. Paul asserted only a state law tort claim. The sole basis for federal jurisdiction was diversity of citizenship. Paul claimed that he was entitled to punitive damages because Dan's conduct was malicious.

Relying on the Euphoria statute, Dan argues that the federal court should bifurcate the trial. The District Judge, Jane Jaglowski, does not believe that bifurcation would be convenient, avoid prejudice, or be conducive to expedition and economy. Thus, if it is up to her under FRCivP 42(b), she would not bifurcate the trial. On the other hand, if the Euphoria statute is controlling, she would bifurcate.

Similarly, Dan argues that the jury should be instructed that it could not award punitive damages unless it found malice beyond a reasonable doubt. Paul opposes that instruction.

Should Judge Jaglowski bifurcate the trial? Should she instruct the jury that it cannot award punitive damages unless it finds malice beyond a reasonable doubt?

QUESTION 1 -- ERIE DOCTRINE

Federal Rule of Civil Procedure 68 provides, in relevant part:

Federal Rule of Civil Procedure 68.

Offer of Judgment

[A] party defending against a claim may serve upon the adverse party an offer to allow judgment to be taken against the defending party for the money or property or to the effect specified in the offer, with costs then accrued. . . . If the [offeree rejects the offer and the] judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer.

The federal courts have interpreted the word costs in FRCivP 68 to mean court costs (filing fee, witness fees, deposition expenses, etc.) but not attorneys fees. In addition, the Supreme Court has held that, at least in federal question cases, federal courts should apply the so-called American Rule on attorneys fees: absent a statute providing for fee shifting, parties bear their own attorneys fees. For many years, the state of Mythic has had a rule (Mythic Rule 68) that is identical to FRCivP 68. However, eight years ago, in response to lobbying by the Mythic Bar Association, the Mythic Supreme Court adopted an additional rule known as Mythic Rule 68A. Mythic Rule 68A is identical to FRCivP 68 except for the addition of the highlighted words:

Mythic Rule of Civil Procedure 68.

Offers of Judgment in Legal Malpractice Cases

[A] party defending against a legal malpractice claim may serve upon the adverse party an offer to allow judgment to be taken against the defending party for the money or property or to the effect specified in the offer, with costs then accrued. . . . If the [offeree rejects the offer and the] judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs and reasonable attorneys fees incurred after the making of the offer. [emphasis added]

Clark Client sued Laura Lawyer for legal malpractice in the United States District Court for the District of Mythic, asking for $1,000,000 damages. Federal jurisdiction was based solely (and properly) on diversity of citizenship. Laura served a proper offer of judgment in the amount of $10,000 which Clark rejected. At trial, the jury found Laura liable but awarded Clark only nominal damages of $1, and final judgment was entered in that amount. (Thus, the judgment was less favorable to Clark than the offer.) Laura then asked the court to apply Mythic Rule 68A and award her $8,000 as the reasonable attorneys fees that she had incurred after making her offer of judgment. (Laura had hired and paid another attorney to represent her in the suit.) All parties agreed that Laura would be entitled to recover the $8,000 if, but only if, the court applies Mythic Rule 68A. They also agree that, if any state law should apply, it would be Mythics. The case has worked its way to the United States Supreme Court.

You represent Laura in the United States Supreme Court. Explain why the Supreme Court should require the district court to apply Mythic Rule 68A. Be sure to set forth all non-frivolous arguments for your position and deal with all non-frivolous arguments against that position.