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Civil Procedure Fall 2003 – Professor Rochelle Dreyfuss

Alex Feinstein

  1. Justiceability – Standing

A. Standing

  1. There are three elements for standing
  2. Is there direct injury?
  3. Is the injury traceable to the defendant?
  4. Is it redressable by the relief sought?
  5. Ex-Cello Corp v. City of Chicago - there was no direct particularized injury; the plaintiff was too far removed for there to be an actual case or controversy
  1. People are wary of federal courts reversing decisions of local courts and governments

B. Injunctive Relief - Two part test to determine if plaintiff is entitled to injunctive relief

  1. Likelihood of success on the merits
  2. Chance of irremediable harm (ask how bad will the harm be?)

C. Other Measures of Temporary Relief

  1. Temporary restraining order – can be obtained without the other side present if it is needed immediately
  2. Preliminary injunction – decides interaction of parties prior to the trial
  3. In certain cases (child custody, copyright) preliminary injunction will often decide the matter at trial as well
  4. Stay – Suspending judicial proceedings or putting them on hold

D. Policy Rationales affected by standing

  1. We want the best motivated litigants for the case; courts do not want litigants who are just trying to prove a point out of principle
  2. Efficiency and economy of judicial resources
  3. We want the facts to be crystallized to have the best possible case in front of the court

E. Times when standing can be brought up

  1. Motion for dismissal for lack of subject matter jurisdiction – Rule 12(b)(1); this can be brought up anytime
  2. Failure to state a claim on which relief can be granted – Rule 12(b)(6) – this is a USE IT OR LOSE IT; can be brought up
  3. by a motion for judgment on the pleadings, or
  4. At the trial on the merits

II. Justiceability - Timing

A. Timing

  1. Exercise of judicial power depends upon the existence of a case or controversy
  2. controversy must be “definite and concrete” and
  3. touch the legal relations of parties having adverse legal interests
  1. A case is moot if there is no longer a live controversy about which the court can do anything (holding of DeFunis v. Odegaard)
  1. Two exceptions to the Mootness doctrine
  2. Voluntary cessation – defendant is free to return to wrongdoing
  3. Capable of repetition yet evading review
  4. Applicable in a small set of case (ie, Roe v. Wade)
  1. Declaratory Judgments
  2. Court may declare the rights and other legal relations of parties seeking declaration whether or not further relief is or could be sought
  3. Federal Rule 57 (pursuant to 28 USC §2201)
  4. Case is Aetna v. Haworth
  5. Aetna anticipated Haworth’s wife would file claim for payments when he died; they wanted a declaration of their legal obligations
  6. This was a crystallized case or controversy
  7. The parties have distinct adversarial legal positions
  8. There is a full record of material facts
  9. The best litigants were before the Court

III. Justiceability – Disputes Appropriate for Judicial Resolution

A. Federal courts can be reticent to involve themselves in local affairs (Ex-Cello)

  1. Some issues are best resolved by ongoing debate (Cudahy)

B. It is inappropriate for the Court to interfere with political questions

  1. Orlando v. Laird – How President and Congress interact is NOT judicially manageable by the courts; they are constitutionally obligated to stay out of it
  2. Litigants were trying to involve the Court with whether Congress had really ratified Vietnam military action
  3. Plaintiffs had standing – their harm was direct result of defendant (Sec. of Defense) actions
  4. There are two different types of political questions
  5. Those that violate separation of powers, and
  6. Policy issues that undermine legitimacy of courts decisions

Subject Matter Jurisdiction

IV. Diversity Jurisdiction

A. Basis of federal question jurisdiction

  1. First issue is justiceability
  2. Standing, timing, Redressability
  3. Second question is subject matter jurisdiction

B. Scope and Requirements (see 28 USC §1332)

  1. Controversy is between citizens of different states; or between citizens of a state and citizens or subjects of a foreign state
  2. Amount in Controversy must be greater than $75,000
  3. Aggregation of claims
  4. Allowed when one person is aggregating all his claims against a party
  5. Plaintiffs may not aggregate claims with other plaintiffs unless their interest is indivisible
  6. P may not aggregate claims against D’s unless the D’s are jointly liable
  7. NOT allowed when many people aggregate their claims against a party
  8. Two questions to be asked
  9. Is the amount claimed in good faith
  10. Does it appear to a legal certainty that the plaintiff can’t recover what they asked for
  11. Some D’s try to assert counterclaim over the amount to get into federal court (Horton v. Liberty Mutual), but this is always a losing argument
  12. Penalties if the requirement isn’t met
  13. 28 USC §1332(b) – some costs imposed if damages don’t end up over $75k
  14. Rule 11 – penalizes attorneys and clients for frivolous claims
  15. Three theories of diversity jurisdiction – efficiency, prejudice, consolidation

C. The complete diversity requirement of Strawbridge v. Curtiss

  1. Every party on one side has to be a resident of a different state than every party on the other side
  2. How to determine citizenship
  3. Individuals: domiciliary – presence plus an intent to remain
  4. Corporations
  5. Every state of incorporation and
  6. State of principal place of business
  7. Partnerships and unincorporated associations
  8. Citizens of all the states of its members
  9. Insurance Companies
  10. §1332(c) makes them residents of the state of the insured
  11. So people don’t sue the insurance company directly just to get into federal court
  12. Class actions – look at the named representative
  13. US citizens living abroad – not residents of any state, so you cant use diversity jurisdiction
  14. Diversity must exist when the complaint is filed

D. Interpleader – 28 USC §1335

  1. Allows (most typically) an insurance company to come into federal court, make a payment, and let all interested parties fight it out to get their share
  2. Allows everyone to get into federal court without causing multiple vexation
  3. If an insured person hits a bus full of people from different states, the insurance company will not be multiply vexed
  4. They show up once, make their payment and let the injured parties sort out their damages
  1. Has benefits of both efficiency and justice

E. The Real Party in Interest Requirement

  1. Rule 17(a) - Named parties must be real parties in the interest of the controversy
  2. 28 USC §1359 – District courts do not have subject matter jurisdiction when parties have been collusively joined to invoke jurisdiction
  3. See Rose v. Giamatti – Rose (OH) joins Reds (OH) to keep the case in Ohio state court
  4. Standing tells you what kinds of interests can be heard in court; real parties tells you who can sue on behalf of those interests

V. Diversity Jurisdiction Cases (other than Strawbridge)

A. Carden v. Arkoma – Examine the citizenship of all members of a partnership for diversity purposes

  1. O’Connor dissents in this case – says limited partners are not real parties to the controversy because they don’t have decision making power
  2. Scalia (majority) says there is no real party to the controversy test here
  3. Court has never held that an artificial entity can invoke diversity jurisdiction based on citizenship of some, but not all members
  4. Seems to be inconsistent with class action rules

B. Rose v. Giamatti – Parties must be real parties to the controversy for diversity of citizenship

  1. Rose (OH) joins the Reds (OH) to nail the case into state court
  2. Rose’s suit was against Giamatti (NY) only – the Reds and MLB were not real parties to the controversy; there is diversity of citizenship

VI. Subject Matter Jurisdiction of Class Actions (Zahn v. International Paper)

A. First two questions to be asked

  1. Citizenship – look at the named representatives
  2. Amount in controversy – only those whose claims meet the amount in controversy can be members of the class
  3. Brennan in dissent of Zahn – breaking up the class fractures the lawsuit; this is a bad thing

B. Policy Arguments

  1. Splitting up classes takes away some appeal for shady attorneys
  2. Discourage lawsuits for small amounts people might otherwise forget about
  3. 28 USC §1369 provides another way to consolidate cases in specific circumstances (ie 75 deaths in a single accident)

C. Policy Arguments to be made against Zahn

  1. Possibly have the ability to plead an “undivided interest” for defendants (ie a clean lake in Zahn)
  2. Problem: essentially the same as aggregating claims and we know you can’t do that – you have to make a really creative argument (red flag for exam)

VII. Class Actions (in general) – Rule 23

A. Four requirements of class actions

  1. Numerosity – Rule 23(a)(1): Class members must be so numerous that joinder of all members as named parties would be impracticable
  2. Relevant factors include:
  3. Geographical dispersion
  4. Practical difficulty of joining named parties
  5. When class is large, numbers alone are dispositive
  6. When class is small, other factors are significant
  7. Commonality – Rule 23(a)(2): Must be questions of law or fact common to the class
  8. Only really applies to 23(b)(3) claims
  9. Typicality – Rule 23(a)(3): Claims or defenses of named party are typical of those of the class as a whole
  10. Such that in representing their own interests, they also represent the interests of the class members
  11. Fair and Adequate Representation of the Class – Rule 23(a)(4): Named party must provide fair and adequate protection of the interests of the class as a whole

B. Three types of class actions

  1. Rule 23(b)(1) class actions – members are so intertwined that you need to adjudicate all their claims together
  2. Rule 23(b)(1)(A) – Intervention by a right (See Rule 24)
  3. Rule 23(b)(1)(B) – looks like Rule 19 (parties need for a just adjudication)
  1. Rule 23(b)(2) class actions – About declaratory judgments and injunctions
  2. There are some people who will be so affected by declaratory judgments and injunctions that everyone involved will be member of a suit
  1. Rule 23(b)(3) class actions – Efficiency class actions
  2. Where common questions dominate and resolving the questions as a whole will be efficient
  3. Two things separating Rule 23(b)(3) class actions:
  4. You have to give notice to every member of the class
  5. People who are a member of the class have the right to opt out

C. Other issues about class actions

  1. Consider if there is a more efficient way to adjudicate the case (than as a class action)
  2. Ask if the case is manageable
  3. To distinguish between b1 and b2 is unnecessary – one is about money, the other about injunctions
  4. Notice must come at the expense of the plaintiff – another small way in which supreme court has tried to discourage class actions
  5. The Shutts question (see Phillips v. Shutts): how to think about federal class actions
  6. If federal class action is brought in state with a limited long arm statute, is the federal court bound by that?
  7. Some people think the only question with class actions is constitutionality
  8. Congress wrote specific jurisdiction rules, but didn’t bother to do so for class actions
  9. NOTE: Prof. Dreyfuss thinks this is still an open question
  10. Response to long arm problem: Jurisdiction by necessity for justice to be provided
  11. Rules 19 and 24 say nothing about jurisdiction; the answer would be to go to another forum
  12. In class actions, there may not be another appropriate forum

VIII. Federal Question Jurisdiction – 28 USC §1331

A. The Mottley well-pleaded complaint rule – the plaintiff would have to raise the federal issue in a complaint which includes the elements and only those elements she needs to prove to establish her claim

  1. 28 USC §1331 – District courts have original jurisdiction over civil actions arising under Constitution, laws or treaties of the United States
  2. It is NOT enough that an anticipated defense will assert a federal question
  3. Declaratory judgments CANNOT be used to get around the well-pleaded complaint rule (Franchise Tax Board)
  4. To determine whether a declaratory judgment complaint raises a federal question
  5. hypothesize what “coercive case” would be by reversing roles and see if it is still a federal question
  6. What is required in a well pleaded complaint – look at Rule 8
  7. Short statement of jurisdiction
  8. Short statement of claim of which relief is entitled
  9. Demand for judgment

B. Gully v. First National Bank - a right or immunity created by the Constitution or federal law must be an essential element of plaintiff’s complaint

  1. P sues D over a state’s right to tax a bank; D files for removal to federal court
  2. Court rules that a state is given permission to levy taxes by federal law, but permission is not preliminary to action
  3. Tax was levied by Mississippi state statute

C. Smith v Kansas City Tile & Trust – the test of substantiality

  1. Shareholder files suit to prevent company from investing in federal farm loan bond act
  2. Relationship between shareholders and corporations are matters of state law; possibly in conflict with Gully
  3. BUT there was a substantial federal issue at stake
  4. The federal farm loan program wouldn’t have achieved its goals if nobody adjudicated the case quickly, accurately and uniformly
  5. The gov’t wanted to be sure people would invest in the program and know they would be repaid
  6. At this time, banks were doing perfectly fine (Gully), but the success of farmers depended on the success of this program
  7. Fine-tuning of judicial resources – think about what issues really belong on the federal docket

D. The Holmes “arising under” test

  1. Holmes suggested a suit arises “under the law that creates the cause of action”
  2. Would find §1331 jurisdiction if the source of P’s enforceable legal right against D is federal law
  3. Problem – it does not put enough cases on the federal docket
  4. It is difficult to determine substantiality on a case-by-case basis

IX. Implied Private Rights of Action

A. Four-part test for implied private rights of action (Cort v. Ash)

  1. Is the constitutional provision specially enacted to protect people like the plaintiff
  2. Look at the legislative history – did Congress intend to create a private right of action
  3. Is a private right of action consistent with the underlying purposes of the statute
  4. Is this an area that is federal or is it an area mainly assigned to the states

B. Thompson v. Merrell Dow – use the four part test of Cort v. Ash to determine private rights of action

  1. P’s sue D under various tort and contract claims for damages resulting from use of a drug
  2. One of the counts was that the drug was mislabeled under the FDCA; D tries to remove to federal court
  3. Two things keeping this case out of federal court
  4. Using the Smith test - Federal question jurisdiction would exist if plaintiffs’ right to relief depended necessarily on substantial question of federal law
  5. FDCA was just one available criterion for determining Dow’s negligence
  6. Jury could have found negligence without ruling on
  7. There was no implied federal right of action under the FDCA using the four part test
  8. Foreigners were not among the intended protected class
  9. No history in legislation to indicate private right of action
  10. FDA is a better regulator than the courts
  11. Tort action is usually under state courts
  12. Since there is no private right of action, the private right of action raised in Dow in trying to remove is not substantial enough
  13. The trend in the Courts has been towards this approach – limited implied private rights of action

C. Policy Arguments – Was Merrell Dow decided correctly? (NOTE: Prof. Dreyfuss probably says no it wasn’t)

  1. Now the drug industry has to worry about state interpretations of federal law
  2. If Congress did not intend a private right of action, it seems like there is an important federal question at stake
  3. Was Merrell Dow properly disposed of (Prof. Dreyfuss would say the Court messed it up)
  4. Federal jurisdiction denied on 12(b)(1) grounds – subject matter jurisdiction
  5. No implied private right of action is a 12(b)(6) motion – failure to state a claim

X. Protective Jurisdiction

A. Sometimes there is a question about whether Congress intended to create protective jurisdiction

  1. Red Cross case – Red Cross wanted to remove to federal court claiming they were under exclusive jurisdiction
  2. Charter of the Red Cross says they have the right to sue or be sued in federal court
  3. Court held they were under federal jurisdiction
  4. When Congress creates an entity, Congress must decide their rights of suit or being sue

XI. Supplemental Jurisdiction – 28 USC §1367

A. Claims that don’t have independent basis for federal jurisdiction

  1. Jurisdiction anyway because of their relationship to an anchor claim that is within the court’s jurisdiction
  2. Added supplemental jurisdiction amendment to civil actions commenced on or after the enactment of the act (December 1, 1990)

B. What §1367 allows and disallows

  1. §1367(a) – expressly states there is jurisdiction that may include the joinder of additional parties
  2. If court has power over a claim, then it has power over all related claims
  3. §1367(b) adds exception for claims based on §1332
  1. §1367(b) – Supplemental Jurisdiction is not to be used to get around the requirements for diversity jurisdiction in §1332 actions
  2. No supplemental jurisdiction over claims by plaintiffs against parties joined by
  3. Rule 14 – third party defendants
  4. Rule 19 – party needed for a just adjudication
  5. Rule 20 – permissive joinder
  6. Rule 24 – seeking to intervene
  1. §1367(c) – Trial court has discretion to decline exercising supplemental jurisdiction if there is
  2. Novel or complex issue of state law
  3. Supplemental claim substantially dominates that which gave district court original jurisdiction
  4. District court has dismissed all claims over which it had original jurisdiction
  5. Other compelling reasons
  1. Problem is §1367 doesn’t mention Rule 23
  2. If one member had damages greater than $75K, but others don’t
  3. You can argue that the default is supplemental jurisdiction; therefore, there is supplemental jurisdiction over those claims
  4. Counter argument: Zahn was on the books prior to §1367; Zahn is still the rule
  5. This issue went to the Supreme Court; tied 4-4 with one justice not participating
  6. Freid v. Abbott Laboratories
  7. We don’t know what the correct answer is – we don’t know if §1367 overruled Zahn

C. Rule 42

  1. Rule 42 (a) – gives judges some power to consolidate cases
  2. Rule 42 (b) – gives judge power to separate cases
  1. Case may stay in front of the same judge, but it will be tried separately and go to different juries

XII. Supplemental Jurisdiction Cases