WARNING!

This answer key does NOT take into account subsequent changes in the law. Some of what is said here may no longer be correct.

Here are the answers to the multiple choice questions.  I have indicated in brackets how many people chose each answer.

Question 1.
 P buys two telemarketing companies, one owned by D and one owned by E.  Both companies market primarily to the state of Minnesota.  As a condition for the sale of the companies, D and E enter into separate contracts with P, each governed by Minnesota law, under which each promises not to compete with P in telemarketing within the state of Minnesota.  D and E move to North Dakota and start up new telemarketing companies that primarily market in Minnesota.  P sues D in diversity in the federal district court for the District of Minnesota for breach of contract.  D gets a judgment in his favor, because the district court finds that under Minnesota law covenants not to compete are void.  P declines to appeal the judgment.  A few months later, the Minnesota Supreme Court issues a new opinion that covenants not to compete are enforceable.  P then sues E in diversity in the federal district court for the District of Minnesota for breach of contract.  E answers that P is issue precluded from relitigating the validity of a covenant not to compete.
 Which one of the following is true?

a. P is not issue precluded, because issue preclusion does not apply to pure issues of law.

[39] Correct.  The only overlapping issue between the two cases -- whether covenants not to compete are void -- is a pure issue of law, not a mixed issue of law and fact.  Unlike the U.S. v. Moser case, there is no overlapping issue that is tied down to particular rights or duties.  In the Moser case the overlapping issue was whether Moser had a right to collect higher pension benefits from the U.S. by virtue of his having "served" in the Civil War.  In the two cases in this question there is no such overlapping mixed issue of law and fact.  The contracts in the two cases are independent of one another and the only overlap is the legal question of whether covenants not to compete are void.

b. P is not issue precluded, because subsequent litigation was not foreseeable at the time that the issue was originally decided.

[1] Wrong. Clearly future litigation was foreseeable at the time of the first case.

c. P is not issue precluded, because there has been a change in the applicable law.

[20]  I messed up here.  In general, only fairly comprehensive changes in law will allow one to escape from issue preclusion.  The Restatement (Second) of Judgments section 28(2) speaks of an "intervening change in the applicable legal context."  But since it is arguable that the change here is comprehensive, I will give credit to those who put down this answer.

d. P is not issue precluded, because, under Parklane Hosiery v. Shore, offensive non-mutual collateral estoppel should not be provided to someone who could have easily intervened in the earlier action, and it is clear that E could have intervened in P's suit against D.

[18] Wrong.  This is a case of (attempted) defensive non-mutual collateral estoppel.  The requirement that the person asserting collateral estoppel could have easily intervened does not exist and does not make sense in a defensive context.  See Parklane Hosiery.

e. None of the above is true.

[26] Wrong, because a (and perhaps c) is true.
 

Question 2.
 P, a domiciliary of New York, is considering a diversity suit in federal court against both D1, a domiciliary of Philadelphia, Pennsylvania, and D2, a domiciliary of Switzerland, for a battery allegedly committed by D1 and D2 against P in France.  P will sue under French law.  D2's only contact with the U.S. is that he has engaged in 25 one-day business trips to the U.S. over the last year, each trip to a different state.  Which one of the following is true about P's action against D1 and D2?

 a. Any federal district court will be able to get personal jurisdiction over D2.

[51] Wrong.  Many of you fell for this.  It may be true that any federal court has power over D2 as far as the 5th Amendment is concerned.  There may be sufficient contacts with the United States as a whole to allow for personal jurisdiction over D2 concerning a tort that occurred in France, although this could be doubted.  But even if this were true, the personal jurisdictional reach of federal courts is limited by Fed. R. Civ. P. 4(k), and nothing there allows any (much less every) federal court to assert personal jurisdiction over D2.  It may be that many of you thought  4(k)(2) applied here, but it doesn't.  It's true that this is a case where no state court could get personal jurisdiction over D2.  But 4(k)(2) allows a federal court to get personal jurisdiction over such a defendant only if the 5th Amendment is satisfied and the claim is under federal law.  The claim here is not under federal law.  Admittedly, a tricky question.

 b. There is no personal jurisdiction over D2 because D1 and D2 don't reside in the same state.

[0] Wrong. Gibberish meant to play off possible confusions between venue, specifically 1391(a)(1), and personal jurisdiction.  No one fell for it.

 c. If the summons with which D1 was served issued from a federal district court in Camden, NJ, right across the Delaware River from where D1 lives, there would be personal jurisdiction over him because he would be within the 100-mile "bulge."

[11] Wrong. The bulge provision of Fed. R. Civ. P. 4(k)(1)(B) does not apply because D1 was not joined under Rules 14 or 19.

 d. There is no venue for this action in any federal district in the United States.

[14] Wrong.  Under 1391(a)(3), if it is the case that there is no district that has venue under 1391(a)(1)-(2), then there is venue wherever a defendant is subject to personal jurisdiction.  D1 is subject to personal jurisdiction in Pennsylvania, so there would be venue there.

e. None of the above is true.

[29] Correct, because a, b, c, and d are false.

Question 3.
 P, a domiciliary of California, brings a complaint in the federal district court for the Southern District of  New York against D, a domiciliary of New York, for battery under Wisconsin law in connection with a barroom brawl that took place between P, D and X in Wisconsin.  P asks for $100,000 in damages and waives his right to any more damages.  D answers, denying liability, and counterclaims against P and Y, a domiciliary of New York, for battery under Vermont law in connection with a barroom brawl between P, D and Y in Vermont.  D asks for $100,000 each from P and Y.  D also impleads X, a domiciliary of California, on the grounds that if D is found liable to P in connection with the Wisconsin brawl, X will be liable under contribution to D for half of what D has to pay to P, since X and D were joint tortfeasors.  On the basis of what you know, which one of the following is true about these actions?

a. Even if X had not been impleaded, he would still be a necessary party under Rule 19(a).  Because of X's responsibility to pay contribution, complete relief to P is not possible without X being a party.

[5] Wrong.  Whether or not D gets contribution from X, D remains liable to P for the totality of P's damages from the Wisconsin brawl.  So P can get complete relief without X being a party.

b. D's counterclaim against P and Y does not have supplemental jurisdiction.

[46] Correct.  D's counterclaim against P and Y is not part of the same constitutional case or controversy as P's claim against D (it concerns a different brawl), so 1367 would not allow supplemental jurisdiction.

c. D cannot join Y as a counterclaim defendant to his counterclaim against P, because D's claim against Y does not concern the same transaction or occurrence as P's claim against D.

[30] Wrong.  The rule for joining parties to counterclaims is 13(h), which allows joinder of a party when it would be allowed under Rules 20 or 19.  Rule 20 allows one to join defendants when the claims against the defendants concern the same transaction or occurrence and at least one question of law or fact is in common.  Here D's counterclaim against Y and his counterclaim against P concern the same transaction or occurrence (the Vermont brawl) and there will surely be one question of law or fact in common.  So joinder is allowed.

d. D's impleader against X cannot be brought in federal court, because it is a legal certainty that D cannot obtain more than $75,000 from X.

[4] Wrong.  There is supplemental jurisdiction for the impleader under 1367 whether or not the impleader is itself a diversity case that satisfies the jurisdictional minimum.

e. None of the above is true.

[20] Wrong, because b is true.

Question 4.
 The Rules Enabling Act, 28 U.S.C. § 2072, states that the "general rules of practice and procedure . . . for cases in the United States district courts" prescribed by the Supreme Court under the Act "shall not abridge, enlarge or modify any substantive right." Assume that in a recent case the United States Supreme Court decided that the "abridge, enlarge or modify" limitation in the Act is the same as the limit on Congress's power to regulate the procedure of federal courts under U.S. Const. Art. I, § 8 and Art. III, § 1.
 Taking this new case into account, which one of the following is a true statement?

a. As interpreted by the Supreme Court in this new case, the "abridge, enlarge or modify" limitation is superfluous, since even without it the Supreme Court would not be able to prescribe rules under the Act that went beyond Congress's power to regulate procedure in the federal courts.

[62] Correct.  The Supreme Court's power to regulate procedure under the Rules Enabling Act could never go further than the power of Congress to regulate the procedure of federal courts under the Constitution, because Congress delegated its power to regulate procedure to the Supreme Court in the Rules Enabling Act.  Therefore, if the "abridge, enlarge or modify" limitation on the Supreme Court's regulatory power specified in the Act is the same as the constitutional limit on Congress's power, the "abridge, enlarge or modify" limitation is superfluous.

b. The new case means that in the future the validity of Federal Rules of Civil Procedure will be examined under the old "outcome-determinative" test in Guarantee Trust v. York.

[5] Wrong.  This makes no sense.  See the answer spelled out at a.

c. The new case means that in the future the validity of Federal Rules of Civil Procedure will be examined on the basis of whether they lead to forum shopping and inequitable administration of the laws, as spelled out in Hanna (taking into account, perhaps, countervailing federal interests in uniformity of the sort identified in Byrd).

[14] Wrong.  This makes no sense.  See the answer spelled out at a.

d. The Supreme Court's decision in the new case is the creation of a common law procedural rule.

[18] Wrong.  A common law procedural rule is a procedural rule made by courts out of whole cloth.  The Supreme Court's decision is an interpretation of a statute -- the Rules Enabling Act.

e. None of the above is true.

[5] Wrong, because a is correct.

Question 5.
 P, a Pennsylvania domiciliary, sues D, a Pennsylvania domiciliary and Pennsylvania state trooper, in Pennsylvania state court under 42 U.S.C. § 1983 for violations of his civil rights in connection with D's arrest of P and search of P's house.  Section 1983 is a federal cause of action concerning which state and federal courts have concurrent jurisdiction.  P joins to the § 1983 action state-law battery and trespass actions against D concerning the same arrest and search.  P uses a process server who is over 18 years old to serve D with a summons and complaint by affixing them to the front door of D's home.  This method of service is in accordance with Pennsylvania law.  D removes the action to the federal district court for the Eastern District of Pennsylvania (the federal district within which the Pennsylvania state court is situated).  After removal, D brings a motion to dismiss for insufficiency of service of process and P brings a motion to remand to state court.
 On the basis of what you know, which one of the following is true?

a. D's motion to dismiss will succeed because, under Hanna v. Plumer, federal law governing service applies, rather than a state law rule.

[11] Wrong.  This question contains a problem that we never discussed -- whether the service standards for removed actions is the federal standard under Fed. R. Civ. P. 4 or the standard of the court from which the action was removed (which is Pennsylvania law here).  This is not answered by Hanna, which merely says that R. 4 applies to service in diversity cases that are brought originally in federal court.  The answer is that one uses the service standard of the court where the action was removed from.  It would be unreasonable to expect a plaintiff in state court to abide by Rule 4, since he can't know in advance that the case will be removed to federal court.  But you don't have to know the answer to this question.  Under 4(e)(1) service is correct in federal court if it is correct pursuant to the law of the state where the district court is located (Pennsylvania law in this case).  So whether Pennsylvania law applies or Fed. R. Civ. P. 4 applies, service is adequate, since Rule 4 incorporates Pennsylvania law.  If you knew that service in federal court is OK if it is in accordance with the law of the state where the federal court is located, you would know that this answer is wrong.

b. P's motion to remand will succeed.  Because the state court has concurrent jurisdiction over the § 1983 action, it is not removable to federal court.

[6] Wrong.  Since state courts have concurrent jurisdiction over most federal causes of action and over all diversity cases, such a rule, if it did exist, would mean that no diversity case could be removed to federal court and only very few federal question cases could be removed (only those over which federal courts have exclusive jurisdiction).  There is no such requirement in 1441.

c. P's motion to remand will succeed with respect to the state law battery and trespass actions only, because they lack federal subject matter jurisdiction.

[18] Wrong. The state law actions have supplemental jurisdiction under 1367.

d. D's motion to dismiss will fail because the federal district embracing the state court where a removed action was originally brought is its proper venue.

[14] Wrong.  This is basically gibberish.  It is true that the motion to dismiss will fail, but the fact that venue is adequate is irrelevant.  The motion to dismiss is for insufficiency of service, not inadequate venue.  The motion to dismiss will fail because service was adequate.

e. None of the above is true.

[56] Correct, because a, b, c, and d are false.

Question 6.
 P, a domiciliary of New York, brings a diversity action against D, a domiciliary of Pennsylvania, for $100,000 in damages under state-law fraud in the federal district court for the Eastern District of Pennsylvania.  In P's complaint, which is signed by P's lawyer in accordance with Fed. R. Civ. P. 11(a), there is an allegation that D knowingly lied to P about termites in a house in order to induce P to buy the house.  After discovery, it becomes clear that there is no evidence in favor of the allegation in P's complaint that D believed that there were termites in the house at the time he sold the house to P.  D brings a motion for Rule 11 sanctions against P.  What one of the following is a valid reason why this motion should fail?

a. P, as a represented party, cannot be subjected to Rule 11 sanctions.

[5] Wrong.  Represented parties can be subject to Rule 11 sanctions if they were responsible for the signer's violation.  See R. 11(c).

b. Rule 11 does not apply to discovery.

[5] Wrong.  The Rule 11 sanctions at issue do not concern discovery abuse.  They concern the factual allegations in P's complaint, to which Rule 11 does apply.

c. Since it was a fraud action, P was allowed under R. 9(b) to allege a condition of mind generally.  It was not necessary for him to state any evidence in favor of D's condition of mind.

[35] Wrong.  It may be true that, under Rule 9(b), P did not have to offer evidence of D's condition of mind in his complaint.  Whether that is true has to do with whether the 3rd Circuit follows the 2nd Circuit rule or the 9th Circuit rule.  See In re Glenfed.  But Rule 9(b) is not the only rule that applies to complaints.  Even if 9(b) was satisfied, Rule 11 could still have been violated if the factual allegations in the complaint (including the assertion that D knowingly lied to P) had no evidentiary support at the time that the complaint was signed by P's lawyer.  Satisfying Rule 9(b) does not mean you have satisfied Rule 11.

d. P's lawyer had a good faith belief in the truth of the allegations in the complaint.

[36] Wrong.  Assume that P fed his lawyer lies concerning D's mental state and the lawyer believed them in good faith without engaging in  reasonable inquiry into their truth.  His good faith belief would be insufficient to shield him from a Rule 11 violation.  Rule 11 uses an objective standard.  And if the lawyer could be subject to Rule 11 sanctions, then P could be too, since he is responsible for the violation.

e. None of the above is a valid reason to deny Rule 11 sanctions against P.

[24] Correct, because a, b, c, and d are wrong.

Question 7.
 P, a domiciliary of New York, brings a diversity action against D, a domiciliary of Pennsylvania, in the federal district court for the Eastern District of Pennsylvania.  P asks for $100,000 in damages.  P's action is under Maryland battery law and concerns a fight that took place between P and D on a bus in Annapolis, Maryland.  P alleges in his complaint that the fight occurred on July 5, 1997.  Maryland has a one year battery statute of limitations.  There is a two year statute of limitations written into a federal battery law that allows plaintiffs to sue concerning battery that has a connection with interstate commerce.  P files his action against D on July 1, 1998.  D is served in accordance with Fed. R. Civ. P. 4(e) on July 6, 1998.  The day after service, D brings a preanswer motion to dismiss for failure to state a claim on the grounds that P's action is barred by the applicable statute of limitations.
 Which one of the following is most likely?

a. The motion to dismiss will fail, because the federal statute of limitations should be used.  What statute of limitations is used in a diversity case is an arguably procedural question and therefore is something that can be regulated by Congress.

[14] Wrong.  Congress never indicated that the federal statute of limitations should be used in diversity cases, so the issue of Congress's power to regulate procedure is irrelevant.  The federal statute of limitations is part of the federal cause of action.  P isn't suing under that federal cause of action.  He is suing under Maryland law.  A careful reading of the question would show that this answer is wrong.

b. The motion to dismiss will succeed because the Maryland statute of limitations should be used.  Under Klaxon Co. v. Stentor Electric Mfg. Co., federal courts should use state-law rather than federal-law statutes of limitations in diversity cases.

[42] Wrong. Despite repeated warnings, included a very pointed warning during the review session, many of you fell for this anyway.  Under Klaxon, the statute of limitations that would be used is almost certainly Pennsylvania's not Maryland's, despite the fact that the suit is under Maryland law.  That's because Klaxon says that a federal court sitting in diversity should make the same choice-of-law decisions as a state court in the state where the federal court is located.  The federal court in this question is located in Pennsylvania and a Pennsylvania state court entertaining a Maryland battery action would almost certainly use Pennsylvania's statute of limitations, not Maryland's.  The general choice-of-law rule for statute of limitations is that the forum's law applies.

c. The motion to dismiss will fail because even if the Maryland statute of limitations applies, under Fed. R. Civ. P. 3, the limitations period is tolled from the time of filing, not from the time of service.

[29] Wrong.  You just have to know Ragan v. Merchants Transfer & Warehouse Co. and Walker v. Armco Steel Corp. to know that this is wrong.  It is not true that the federal rule for tolling statute of limitations derived from Rule 3 applies in diversity cases.  If there is a competing state law rule (in particular, Pennsylvania rule) that says that tolling is upon service, then, under Ragan and Walker, the state law rule applies.

d. The motion to dismiss will fail, because statute of limitations is an affirmative defense.  D should have put the defense of statute of limitations in his answer and then moved for summary judgment or a judgment on the pleadings.

[16] Correct.  You cannot get a case dismissed on statute of limitations grounds through a preanswer motion.  None of the 12(b) defenses concern statutes of limitations.  In particular, failure to state a claim does not.  Because statute of limitations is an affirmative defense, a complaint can state a claim (that is, spell out a cause of action) even if the complaint alleges facts that show that it is barred on statute of limitations grounds.

e. The motion to dismiss will fail, because in diversity cases federal courts borrow analogous federal statutes of limitations and the most analogous statute of limitations is that for a federal battery action.

[4] Wrong.  In diversity cases, under York and Klaxon, federal courts use the forum state's statute of limitations.

Question 8.
 P is suing D in the federal district court for the Southern District of New York for federal antitrust violations.  P believes that D conspired with X to fix the price of citric acid.  But P makes the decision to sue D alone.  Which one of the following is true?

a.   If P were to bring a separate suit against X while P's action against D was still proceeding, X could get the action against him dismissed without prejudice, because P would be engaging in claim-splitting.

[19]  Wrong.  It is not claim splitting to bring separate actions against separate defendants.  Under federal law of claim preclusion, a claim encompasses all causes of action concerning the same transaction or occurrence that were or could be brought by the same plaintiff against the same defendant.

b. P needs to make X a party if he wants to use discovery to get documents from X concerning X's alleged conspiracy with D.

[7] Wrong.  Although you can't use a document request to get documents from a non-party, you can use a subpoena duces tecum.

c. P may request of D documentary evidence that is hearsay and so would be inadmissible at trial.

[48] Correct.  Inadmissible evidence is nevertheless discoverable if it is reasonably calculated to lead to admissible evidence. See R. 26(b)(1).

d. Assume P's suit against D comes to a judgment in P's favor.  If P then sues X, X can be precluded from relitigating issues decided in P's suit against D (provided that there was a full and fair litigation of the issues and the issues were essential to the judgment), because X had ample opportunity to intervene in the earlier action.

[19] Wrong.  Non-parties can never be bound by a prior adjudication of an issue, whether or not they could have intervened.  The question of whether the non-party could have intervened is only relevant (under Parklane Hosiery) when the non-party is seeking to benefit from a prior adjudication of an issue through offensive non-mutual collateral estoppel.

e. None of the above is true.

[12] Wrong. because c is true.

Question 9.
 P, a domiciliary of California, sues D, a Nevada corporation with its principal place of business in Nevada, in federal district court in Oregon in diversity, under a theory of respondeat superior. P's claim against D concerns a battery allegedly committed against P by X, an Oregon domiciliary and D's employee, in a store owned by D in Oregon.  P lost an eye in the fight and asks for $200,000 in damages.  D impleads X to assert its right of indemnification.  D is almost insolvent and has not been paying X his wages since well before the fight between X and P.  X therefore counterclaims against D for $80,000, which includes all unpaid wages up to the time of the fight.
 Which one of the following is true?

a. Assume that X gets a judgment in his favor on the counterclaim and receives $80,000 in damages.  X would be claim precluded from bringing a subsequent action against D for all unpaid wages from the time of the fight until the time X counterclaimed against D.

[42] Correct.  Under federal law a "claim" includes the entirety of a continuing course of conduct up until the time an action concerning that conduct is brought.  See Sutcliffe Storage & Warehouse Co. v. U.S.

b. Under the Federal Rules of Civil Procedure, X cannot counterclaim against D, since the counterclaim does not concern the same transaction or occurrence as P's claim against D.

[14] Wrong.  X's counterclaim against D is a permissive counterclaim allowed under R. 13(b).  There is no requirement under 13(b) or anywhere else in the Federal Rules of Civil Procedure that X's claim against D concern the same transaction or occurrence as P's claim against D.  Of course, simply because it is allowed under the Federal Rules of Civil Procedure does not mean that there is subject matter jurisdiction for it.  Subject matter jurisdiction is governed by Art. III of the U.S. Constitution and statutes (such as 1331, 1332 and 1367), not the Federal Rules of Civil Procedure.  See my explanation of c immediately below.

c. There is supplemental jurisdiction for X's counterclaim against D.

[9] Wrong.  Under 1367, there is no supplemental jurisdiction for X's counterclaim against D, because it does not concern the same constitutional case or controversy as P's claim against D.

d. Assume D is able to bring his impleader against X.  Assume further that the actions between P and D and between D and X come to a judgment.  X would be barred from subsequently suing P for X's damages in the fight between P and X.

[27] Wrong.  The sixth sentence of R. 14 merely says that an impleaded party such as X may sue P if the suit concerns the same transaction or occurrence as P's suit against D, not that he must do so.

e. None of the above is true.

[12] Wrong, because a is true.

Question 10.
 P, a domiciliary of Nevada, is the named plaintiff of a class action law suit brought in Nevada against D Corp, a California corporation with its principal place of business in Arizona.  The nationwide plaintiff class of 2000 members asks for damages due to accidents involving D Corp's lighters, which tend to flare up unexpectedly, causing second degree burns.  The class action is brought under state law negligence.  The members of the rest of the plaintiff class claim between $10,000 and $40,000 in damages, but P has $80,000 in claimed damages.  Which one of the following is true of this action?

a. If this action were brought in federal court in Nevada it could be brought as a Fed. R. Civ. P. 23(b)(2) class action, since the defendant, by exposing each of the members of the plaintiff class to a negligently made product, has "acted . . . on grounds generally applicable to the class."

[9] Wrong, because the plaintiff class is not asking for injunctive relief, as is required under 23(b)(2).  In addition, acting on grounds generally applicable to the class concerns the defendant's attitude toward the class.  An example is when the class consists of blacks and the defendant has allegedly discriminated against the class by virtue of their being black.  When one negligently exposes a particular group to harm, one is not treating that group as a class.

b. If the named plaintiff filed the action in federal court in Nevada as a diversity case, the defendant could respond by reincorporating in Nevada.  This would defeat diversity, provided no new named plaintiff was selected.

[9] Wrong.  Citizenship for diversity purposes is determined at the time of filing.  Reincorporation post-filing won't work.

c. If the named plaintiff filed the action in state court in Nevada, the defendant could remove it to federal court, because the jurisdictional minimum for diversity for each plaintiff's claim could be met by aggregating the damages sought by all the members of the plaintiff class.

[14] Wrong.  Removal would be possible through supplemental jurisdiction under 1367, not through aggregation.  I drew the distinction between supplemental jurisdiction and aggregation many times in class.

d. If the named plaintiff filed the action in state court in Nevada, the defendant could not remove it to federal court, because the defendant does not have Nevada as its home state.

[4] Wrong.  The rule under 1441(b) is just the opposite.  If there is a home state defendant, a case is not removable to federal court as a diversity case.

e. None of the above is true.

[69] Correct because a, b, c, and d are false.

Question 11.
 P Corp. (hereinafter P) sues D Corp. (hereinafter D) in diversity in the federal district court for the Eastern District of Pennsylvania for breach of contract under Pennsylvania law, alleging that D failed to build a factory by the deadline specified in their contract, causing P $100,000 in lost profits.  The deadline (and thus the time of the alleged breach) was July 1, 1996.  The statute of limitations for breach of contract under Pennsylvania law is two years.
 P files suit on June 1, 1998 and has D served with a complaint three days later on June 4, 1998.  D answers ten days after service, denying liability on the grounds that P had waived compliance with the deadline.  P requests no reply to D's answer.  Thirty days after D's answer (on July 14, 1998), D discovers two things.  First of all, it discovers that it was never served with a summons.  Second, it discovers that a year ago P reincorporated from Delaware to Pennsylvania.  Pennsylvania is D's state of incorporation.
 D therefore seeks to amend its answer to include the defenses of insufficiency of process and lack of subject matter jurisdiction.
 Which one of the following is true?

a. The defense of insufficiency of process will fail but the defense of lack of subject matter jurisdiction will succeed.  The defense of insufficiency of process does not "relate back" and so is barred by the statute of limitations, but the defense of lack of subject matter jurisdiction does "relate back" and so is not barred.

[4] Wrong.  This is gibberish intended to play off of confusion between statutes of limitations on the one hand and the waiver rules under Fed. R. Civ. P. 12(g)-(h) concerning 12(b) defenses on the other.

b.  Both defenses will succeed.  Because P asked for no reply, both amendments are "as a matter of course" and therefore neither defense is waived.

[5] Wrong.  See comments on d.

c. The defense of insufficiency of process will fail but the defense of lack of subject matter jurisdiction will succeed.  The amendment concerning lack of subject matter jurisdiction is "as a matter of course" and therefore that defense is not waived, but the amendment concerning insufficiency of process is "by leave of court" and therefore that defense is waived.

[21] Wrong.  See comments on d.

d. The defense of insufficiency of process will fail but the defense of lack of subject matter jurisdiction will succeed.  Both amendments are "by leave of court."  But even if the court allowed an amendment concerning the defense of insufficiency of process, that defense is waived.  The defense of lack of subject matter jurisdiction is not waived, and the court will certainly allow such an amendment.

[60] Correct.  An amendment of a pleading is allowed "as a matter of course" at any time before a responsive pleading is served or, if the pleading is one to which no responsive pleading is permitted, within 20 days after service of the pleading.  Otherwise the amendment is by leave of the court.  See R. 15(a).  A reply to an answer is permitted only if the plaintiff requests it and that request is granted by the court.  See R. 7(a).  Because the plaintiff did not request a reply, D's answer is one to which no responsive pleading is permitted.  Since D seeks to amend more than 20 days after service of his answer, the amendments are by leave of the court.  The court will probably allow the amendments.  But whether or not it does, under R. 12(h)(1), D's defense concerning process is waived because it was not put in the first response or through the amendment of the first response as a matter of course.  Under R. 12(h)(3), D's defense of concerning subject matter jurisdiction is not waived.

e. None of the above is true.

[15] Wrong, because d is true.

Question 12.
 Under a contract between P and D, D was to deliver baseball bats from his warehouse in Duluth, Minnesota to P's sporting goods store in Superior, Wisconsin.  The distance between Duluth and Superior is about 10 miles.  D did not deliver.  As a result P sued D in Wisconsin state court for breach of contract.  In his complaint, P alleged that the Wisconsin state court had personal jurisdiction over D because D accepted P's offer to enter into the contract in a phone call P made from Wisconsin to D's home in Duluth.  D was served with a complaint and summons at his home in accordance with both Wisconsin and Minnesota state law.  D did not answer and the Wisconsin court issued a judgment for P.  Wisconsin state courts do not allow special appearances.
 Subsequently P sued D on the Wisconsin judgment in Minnesota state court.  D made a motion to dismiss for failure to state a claim on the ground that the Wisconsin court lacked personal jurisdiction over him.  On the basis of what you know about this case, which one of the following is the most likely result of D's motion?

a. D's motion will fail.  D cannot collaterally attack the Wisconsin judgment, because Wisconsin state courts don't allow special appearances.

[3] Wrong.  Whether special appearances are allowed has nothing to do with whether one can collaterally attack a judgment.  If a special appearance is allowed, that means one can enter the court to challenge personal jurisdiction without submitting oneself to the personal jurisdiction of the court by one's mere presence there.  Whether or not special appearances are allowed, to collaterally attack a judgment one should default and then attack the validity of the judgment when a suit on the judgment is brought subsequently.

b. D's motion will succeed because, under the 14th Amendment due process clause, the Wisconsin state court must allow special appearances.

[6] Wrong.  First, whether special appearances are allowed has nothing to do with whether one can collaterally attack a judgment.  See comments on a above.  Second, it is not true that under the 14th Amendment special appearances must be allowed by state courts, although most state courts do allow special appearances.

c. D's motion will fail because D was adequately served in his home state according to Minnesota law.

[2] Wrong.  Adequate service under Minnesota law is irrelevant to the question of whether the Wisconsin court had personal jurisdiction over D.

d. D's motion will fail because the facts alleged by P show that D engaged in activity that was purposefully directed toward the state of Wisconsin.

[47] Wrong.  See comments on e.

e. D's motion will succeed because the facts alleged by P do not show that D engaged in any activity that was purposefully directed toward the state of Wisconsin.

[47] Correct.  The facts alleged by P do not show that D engaged in any activity that was purposefully directed toward Wisconsin.  As far as P's allegations are concerned, all D did was agree to a contract entered into by a phone call made by P to D (not the other way around) while D was in his home in Minnesota.  It is true that D agreed to deliver goods to Wisconsin, but he never did so.  Nothing D ever did (once again, as a far as P's allegations are concerned) was purposefully directed across the border to Wisconsin.

Question 13.
 Foreigners from Sub-Saharan Africa visiting the City of Arlington sue city officials in federal court in a diversity class action for violations of state civil rights laws.  The plaintiff class asks for an injunction forbidding what they claim is the targeting of Sub-Saharan Africans by city officials.  The named plaintiff is domiciled and resides in Nigeria.  The defendants are all domiciled in Virginia.  Which one of the following is true of this class action?

a. Notice to the members of the plaintiff class is needed at the initiation of the suit in order to allow them the opportunity to opt out.

[8] Wrong.  This is undoubtedly brought as a 23(b)(2) action, since it is a discrimination action for injunctive relief.  As a result, no notice or opportunity to opt out is required.

b. If the class action were to settle, no notice would be needed to the plaintiff class.

[33] Wrong.  R. 23(e) does not make any exceptions to the rule that compromises or dismissals of a class action require notice to the class.

c. The class action cannot be brought as a diversity case.  Because the plaintiffs are not asking for damages, there is no amount in controversy.

[12] Wrong.  Although the valuation of injunctions to determine whether they meet the jurisdictional minimum is difficult, an action solely for injunctive relief can nevertheless meet the jurisdictional minimum and so qualify as a diversity case.

d. The class action cannot be brought as a diversity case, because there is no domiciliary of a U.S. state as the named plaintiff.

[24] Wrong.  Under 1332(a)(2) actions between citizens of different states and citizens and subjects of a foreign state are diversity cases.

e. None of the above is true.

[28] Correct, because a, b, c, and d, are false.
 

Question 14.
 P brings a state law negligence action against D Corp. (hereinafter "D") as a diversity action in federal district court.  Assume that the elements for a cause of action for negligence are:
 1)  the defendant had a duty of care to the plaintiff
      2)  the defendant breached that duty
      3)  the plaintiff suffered damages
      4) the plaintiff's damages were proximately caused by the defendant's negligence.
In his complaint P alleges that D had a duty to P to non-negligently manufacture lighters, that D breached that duty by negligently manufacturing a lighter such that the lighter would flare up unexpectedly during use, and that, as a proximate cause of D's negligence, P suffered severe burns on his hands and face when using the lighter.  P alleges that the lighter was negligently manufactured because it used ceramic instead of steel valves and that D knew or should have known that ceramic valves produce flareups.  P asks for $100,000 in damages.
 D answers, admitting the existence of a duty of care to P, its use of ceramic valves, the $100,000 in damages suffered by P, the fact that these damages were the result of a flareup from a lighter purchased by P from D, and the fact that ceramic valves do cause flareups.  But D denies a breach of duty.  Specifically, D denies that, at the time the lighter was manufactured, it knew or should have known that ceramic valves lead to flareups.  D also alleges that P put kerosene rather than the recommended lighter fluid in the lighter and thus that P was contributorily negligent, because kerosene helps contribute to flareups in lighters.  There are no other pleadings submitted or requested.
 After discovery, both P and D bring motions for summary judgment.  P presents the following evidence in favor of his motion and in opposition to D's motion:
  An affidavit from a lighter expert stating that ceramic valves lead to flareups.
 An affidavit from P stating that he used the recommended lighter fluid, not kerosene.
 D submits the following evidence in favor of its motion and in opposition to P's motion:
 An affidavit from an acquaintance of P's stating that he saw P put kerosene in the lighter the day it flared up.
 A letter from a lighter expert to D's attorney stating that, at the time the lighter was manufactured, the lighter expert believed that ceramic valves were completely safe.  The letter also states that ceramic valves had passed all industrial tests up to the time of the manufacture of the lighter and that the discovery that ceramic valves cause flareups occurred as a side effect in an unrelated experiment one year after the lighter was manufactured.
 Which one of the following is most likely?

a. Neither P nor D will be granted summary judgment because there is a genuine issue of material fact concerning whether P used kerosene in the lighter or not.

[71] Wrong.  It was disturbing how many of you fell for this.  Remember, a defendant will win a motion for summary judgment if he can show that no reasonable jury could find in favor of the plaintiff with respect to one element of the cause of action.  P has offered absolutely no evidence that D knew or should have known at the time that the lighter was manufactured that ceramic valves cause flareups.  All he has offered is an affidavit by a lighter expert saying that ceramic values do cause flareups (which D already admitted in his answer).  That's not evidence about what D knew or what D should have known at the time of the manufacture of the lighters.  Without any evidence in his favor concerning breach of duty no reasonable jury could find in favor of P in an action for negligence.  So D wins his motion for summary judgment.  The fact that P has evidence against and D evidence for the existence of an affirmative defense is irrelevant.  Even if P could convince a jury that he did not use kerosene, a reasonable jury would still have to find in favor of D, because no reasonable jury could ever find that D breached his duty of care to P.

b. P will win his motion for summary judgment, because the letter submitted by D is not admissible in support of a summary judgment motion.

[5] Wrong.  True, it's not admissible and must be ignored when assessing the motion.  But that's not enough to show that P will win his motion for summary judgment.  For P to win, he must show that a reasonable jury would have to find in his favor concerning every element of the cause of action (and concerning the affirmative defense brought up by D).  But because P offers no evidence in favor of breach of D's duty of care, a reasonable jury would have to find in favor of D, not P, on this issue.  The fact that D has no evidence on his own does not matter to the success of his motion.  See Celotex.

 c. D will win his motion for summary judgment, because P has offered no evidence other than his own allegations that he did not use kerosene in the lighter.

[2] Wrong.  P's affidavit is admissible evidence for a summary judgment motion, because it concerns P's personal knowledge.  The reason D will win his motion is because P has failed to offer evidence that, at the time that the lighter was manufactured, D knew or should have known that ceramic valves cause flareups.

d. D will win his motion for summary judgment, because P has failed to offer evidence that, at the time that the lighter was manufactured, D knew or should have known that ceramic valves cause flareups.

[23] Correct.  See comments on a.

e. D will win his motion for summary judgment because P should have requested a reply in order to deny the allegations in D's answer that P used kerosene.  By refusing to deny, P has admitted that he used kerosene.

[3] Wrong.  If no reply is requested, all factual allegations in an answer are taken to be denied by the plaintiff.  See R. 8(d).  D will win his motion for the reason stated in the comments on a.

Question 15.
 Section 1367(b) of the supplemental jurisdiction statute has been recognized to have been improperly drafted.  Here is § 1367(b) as it presently stands:

 In any civil action of which the district courts have original jurisdiction founded solely on section 1332 of this title, the district courts shall not have supplemental jurisdiction under subsection (a) over claims by plaintiffs against persons made parties under Rule 14, 19, 20, or 24 of the Federal Rules of Civil Procedure, or over claims by persons proposed to be joined as plaintiffs under Rule 19 of such rules, or seeking to intervene as plaintiffs under Rule 24 of such rules, when exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332.

Which one of the following would solve a recognized problem with the statute?  The parts added to the statute will be in bold.  The parts removed from the statute will be in italics

 a. In any civil action of which the district courts have original jurisdiction founded solely on section 1332 or 1331 of this title, the district courts shall not have supplemental jurisdiction under subsection (a) over claims by plaintiffs against persons made parties under Rule 14, 19, 20, or 24 of the Federal Rules of Civil Procedure, or over claims by persons proposed to be joined as plaintiffs under Rule 19 of such rules, or seeking to intervene as plaintiffs under Rule 24 of such rules, when exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332 or 1331.

[2] Wrong.  See comments on b.

 b. In any civil action of which the district courts have original jurisdiction founded solely on section 1332 of this title, the district courts shall not have supplemental jurisdiction under subsection (a) over claims by plaintiffs against persons made parties under Rule 14, 19, 20, or 24 of the Federal Rules of Civil Procedure, or over claims by persons joined as plaintiffs under Rule 20 of such rules,  proposed to be joined as plaintiffs under Rule 19 of such rules, or seeking to intervene as plaintiffs under Rule 24 of such rules, when exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332.

[68] Correct.  The main problem with the supplemental jurisdiction statute is that it allows the following type of action to have supplemental jurisdiction.  Assume P, a citizen of California, sues D, a citizen of Nevada, under state battery law for damages greater than $75,000 concerning a bar room brawl in which P, D, and X, a citizen of Nevada, each participated.  P joins X as a co-plaintiff under R. 20.  X brings an action against D for his damages of $50,000 due to D's bunches in the brawl.  It appears that there would be supplemental jurisdiction for X's claim against D under 1367.  The claim concerns the same constitutional case or controversy (the same brawl), and although the claim is inconsistent with the jurisdictional requirements of 1331 (X and D are not diverse and X's action is for less than the jurisdictional minimum), it does not fall under the exclusions specified in 1367(b).  It is not an action by a plaintiff against someone made a party under Rs. 14, 19, 20, or 24 (Rs. 14, 19, and 24 weren't used and D was a party before the application of R. 20) nor is it a claim by a person proposed to be joined under R. 19 or seeking to intervene under R. 24 (it is a claim by a person joined under R. 20).  The amendment suggested here would prevent such actions from receiving supplemental jurisdiction.  None of the other amendments solve this or any other problem with 1367(b).

 c. In any civil action of which the district courts have original jurisdiction founded solely on section 1332 of this title, the district courts shall not have supplemental jurisdiction under subsection (a) over claims by plaintiffs against persons made parties under Rule 14, 19, 20,  or 24 of the Federal Rules of Civil Procedure, or over claims by persons proposed to be joined as plaintiffs under Rule 19 of such rules, or seeking to intervene as plaintiffs under Rule 24 of such rules, when exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332.

[10] Wrong.  See comments on b.

 d. In any civil action of which the district courts have original jurisdiction founded solely on section 1332 of this title, the district courts shall not have supplemental jurisdiction under subsection (a) over claims by plaintiffs or defendants against persons made parties under Rule 14, 19, 20, or 24 of the Federal Rules of Civil Procedure, or over claims by persons proposed to be joined as plaintiffs under Rule 19 of such rules, or seeking to intervene as plaintiffs under Rule 24 of such rules, when exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332.

[19] Wrong.  See comments on b.

e. None of the above solves a recognized problem with the supplemental jurisdiction statute.

[6] Wrong.  See comments on b.

Question 16.
 P plans on suing D Corp for federal securities law violations in the federal district court for the Central District of California.  P believes that on June 1, 1998, the officers of D Corp, in order to induce P to buy shares in the corporation, falsely said that some wells owned by the corporation would produce around 100 barrels per day.  P got the idea to bring suit because X, a middle manager at D Corp, made an unsolicited phone call to tell P that around June 1, 1998, people at D Corp already knew the wells would produce only 25 barrels a day.  In order to have more information to give to whatever lawyer he decides to retain, P hires a private investigator to look into what people at the D Corp knew or should have known about the value of the oil wells around June 1, 1998.  By chance, the private investigator interviews X, who tells him that, around that time, people at D Corp all believed that the wells would produce around 100 barrels a day.  The private investigator writes up X's statements in a memo to P.  P then sues D Corp.
 Which one of the following is true?

a. If D Corp requests the memo through a document request, P does not have to turn it over, because it is material that would be used to impeach X's testimony on the stand.

[6] Wrong.  Material that could be used to impeach one's own witnesses must be turned over.  Material that would impeach the opposing side's witnesses must also be turned over, although one may ask that the witness be deposed before the material is provided.

b. If D Corp requests the memo through a document request, P would have to turn it over.  The work-product privilege does not apply to the memo, because P had not yet retained an attorney at the time that X was interviewed.

[2] Wrong.  As long as it was created in anticipation of litigation it is work product, even if one had not yet retained a lawyer.

c. D Corp could get the memo if it could convince X to request it from P.

[58] Correct.  Every witness has a right to his own statement, even if it is work product.  R. 26(b)(3).  If X requested the statement from P, P would have to give it to X and X could then give it to D Corp.

d. Assume the memo is work-product.  Although P would not have to give over the memo itself if D Corp requested it in a document request, P would have to give over the content of the memo to D Corp in response to an interrogatory, if D Corp asked in the interrogatory what X said to the investigator.  This is because the work product privilege does not protect facts from disclosure and does not override the requirement to answer interrogatories truthfully.

[26] Wrong.  Not only is the witness statement itself privileged under R. 26(b)(3), under the Hickman case, the substance of the witness statement (what the witness said in the statement) is also privileged.  Otherwise there would be a huge loophole in the work-product privilege.  It is true that facts are not protected, but the D Corp's interrogatory was asking for the substance of witness statements, not facts.  The following example will help show the difference.  Imagine that Y, a non-party, tells P that the stock price of the D Corp fell for reasons unrelated to the oil wells and P believes this to be a fact.  P writes up Y's comments as a witness statement.  If D Corp asks for this statement or the content of this statement, P does not have to turn either over.  But if D Corp asks P in an interrogatory whether there are other reasons why the D Corp's share price went down, P must answer truthfully that there are.

e. None of the above is true.

[13] Wrong, because c is true.

Question 17.
 In the well-publicized case of P & X v. D, P, a domiciliary of New York, assigned to X, a domiciliary of New Jersey, a 50% interest in P's state-law breach of contract suit against D, a domiciliary of New Jersey.  P received $20,000 from X for the assignment.  P's entire claim for breach of contract was for $200,000.  After the assignment, both P and X sued D as co-plaintiffs for $100,000 each in state court in New York.  D removed the case to federal court, but P and X  made a motion to remand to state court that was granted by the federal court on the ground that there was no federal subject matter jurisdiction for the suit.
 In response, Congress passed a law allowing defendants to remove to federal court suits that would have satisfied the complete diversity requirement of § 1332 but for an assignment of interest by a plaintiff in the suit to a diversity-destroying co-plaintiff.
 Which one of the following statements is most accurate?

a. The statute was not needed to address the case of P & X v. D, because the federal court made an improper decision to remand.  Under Kramer v. Caribbean Mills, assignments to defeat diversity are invalid.

[27] Wrong.  Kramer is about assignments to create diversity.  Furthermore the assignment in Kramer was one that did not give the assigned party a genuine interest in the outcome of the litigation.  Here there is such an interest.  Indeed it is probably the case that P has succeeded in defeating diversity through this assignment.  We discussed this in class.  See also question 16 on p. 891 of F&K.

b. The statute was not needed to address the case of P & X v. D, because the federal court made an improper decision to remand.  The situation is covered by Rose v. Giamatti, which holds that assignments to defeat diversity are invalid.

[12] Wrong.  Rose is about joinder of defendants to defeat diversity, not assignment of interest to co-plaintiffs  Furthermore in Rose, Pete Rose did not have a genuine cause of action against the joined defendants, who could not provide him with the relief he requested.  In this case both plaintiffs do have genuine causes of action against the defendant.

c. The statute was not needed to address the case of P & X v. D, because the federal court made an improper decision to remand.  Under 28 U.S.C. § 1367, there is supplemental jurisdiction for X's claim against D.

[35] This is the most accurate.  Under a very plausible reading of 1367, there would be supplemental jurisdiction for X's claim against D.  X's claim against D concerns the same constitutional case or controversy as P's claim against D and, as an action by a plaintiff joined under R. 20 against an already existing defendant, this action does not fall under the exceptions to supplemental jurisdiction spelled out in 1367(b).  It is precisely this possibility that has suggested to many that 1367 is improperly drafted.  This is the scenario dealt with in question 15 in this exam.

d. The statute was not needed to address the case of P & X v. D, because the federal court made an improper decision to remand.  The assignment would have been valid only if X had paid $100,000 for his 50% interest in the suit against D.

[18] Wrong.  Nothing we read or discussed on assignment of interests to defeat diversity suggested this answer and seeing that it is wrong just requires common sense.  Paying $100,000 for a 50% interest in a claim that would provide a total recovery of only $200,000 would make economic sense only if one had a 100% chance of winning (and that's ignoring the costs of suing).  Since chance of a winning a suit varies from suit to suit and is usually less than 100%, this principle is obviously wrong.

e.  The statute is unconstitutional because it allows state-law suits not involving completely diverse parties to be entertained by federal courts.

[13] Wrong.  The constitution does not require complete diversity, only minimal diversity.  The requirement of complete diversity is drawn from 1332.

Question 18.
 In 1860, prior to the enactment of the 14th Amendment, P, a Wisconsin domiciliary, brings suit against D, a Minnesota domiciliary, in Wisconsin state court concerning $5000 in unpaid lawyer's fees.  In order to get personal jurisdiction over D, P has the Wisconsin court attach, at the beginning of the suit, a $3000 piece of property owned by D that is located in Wisconsin.  The notice to D is by publication.  D makes a limited appearance and litigates the issue of his liability for the lawyer's fees.  The court grants judgment in favor of P.  Subsequently P sues D in Minnesota state court for the remaining $2000.  Which one of the following is a true statement?

 a. D will not be successful if he makes a motion to dismiss for lack of personal jurisdiction in the second suit, because he did not lose the first suit by default.

[31] Wrong.  Realizing that this is not the right answer depended upon your realizing that the second suit by P against D in Minnesota is not a suit to enforce the first judgment; it is a completely different suit to determine the remaining $2000 of potential liability.  Indeed, P can't bring a suit on the first judgment, because he already received the $3000 in attached property in satisfaction of that first judgment.  P has already been paid.  Since the second suit is not a suit on the first judgment, D can't possibly be collaterally attacking the first judgment on the grounds of lack of personal jurisdiction.  The first judgment simply is not at issue in the second suit.  Accordingly whether or not D defaulted in the first judgment is not at issue.
          Aside from the fact that D could not possibly be collaterally attacking the first judgment, you should also have been tipped off by the fact that D is making a motion to dismiss for lack of personal jurisdiction.  That means that D is claiming that the court in Minnesota has no personal jurisdiction over him -- a frivolous argument, since he is domiciled in Minnesota.  When one collaterally attacks an earlier judgment one does not make a motion to dismiss for lack of personal jurisdiction, one rather makes a motion to dismiss for failure to state a claim.  One argues that the plaintiff bringing a suit on the judgment fails to state a claim for enforcement of the judgment because the judgment to be enforced was issued by a court that lacked personal jurisdiction.

 b. The judgment in the first suit does not have claim-preclusive effect in the second suit.

[52] Correct.  The judgment in the first suit was the result of a limited appearance.  It determined only $3000 of liability.  Therefore, P is not claim precluded from suing for the remaining $2000 of potential liability in a separate suit.

 c. D can use only the Full Faith and Credit Clause to argue in favor of a motion to dismiss for lack of personal jurisdiction in the second suit.

[8] Wrong.  This answer also played off the error that the second action is a suit on the first judgment.  Because it isn't, the question of Full Faith and Credit for the first judgment is not an issue.  What would the lack of the 14th Amendment mean to D's motion to dismiss on the grounds that the Minnesota court lacks personal jurisdiction over him?  D would have to rely on Minnesota law to claim that the Minnesota court did not have personal jurisdiction.  He could not appeal to federal law (in particular the due process clause of the 14th Amendment).

 d. D will win a motion to dismiss for lack of personal jurisdiction in the second suit, because in 1860 publication was insufficient as a form of notice for a quasi-in-rem action.

[2] Wrong.  This answer also took advantage of an erroneous belief that the second action is a suit on the first judgment.  Because the first judgment is not at an issue in the second suit, inadequacy of notice in the first suit is not an issue.  Besides, publication was sufficient as a form of notice for a quasi-in-rem action at the time.  See Pennoyer v. Neff.

 e. None of the above is true.

[12] Wrong, because b is true.

Question 19.
 P sues D in federal district court for the Eastern District of Pennsylvania for violations of federal antitrust law.  Federal courts have exclusive federal jurisdiction for federal antitrust cases.  P claims that D violated federal antitrust law by engaging in predatory pricing in the dry cleaning market.  P alleges that D would enter an area and undercut P's prices, forcing P to withdraw.  Once P withdrew, D would raise his prices.  The district court grants D's motion to dismiss for failure to state a claim with prejudice, because federal antitrust law does not recognize a claim of predatory pricing unless the defendant has been alleged to have monopoly power in the market and P never alleged that D had monopoly power.
 P then sues D in Pennsylvania state court, alleging that D's predatory pricing was a violation of Pennsylvania common law on restraint of trade.  Once again P does not allege that D was a monopolist.  P believes that he can nevertheless win under Pennsylvania law because there is a 1911 case from the Pennsylvania Supreme Court stating that a plaintiff need not allege that the defendant has monopoly power in order to make a claim that predatory pricing is restraint of trade. The 1911 case is the only case law on this issue in Pennsylvania courts, but the overwhelming trend in both federal and state law on antitrust and restraint of trade is to require monopoly power for a claim of predatory pricing.  D brings a motion to dismiss for failure to state a claim and a motion for summary judgment on the ground of claim preclusion.
 Which one of the following is true?

a. D should win its motion to dismiss for failure to state a claim, on the ground that P has not alleged that D is a monopolist.  Because the Pennsylvania Supreme Court would now require allegations of monopoly power to bring a claim of predatory pricing, the trial court may dismiss P's action.

[9] Wrong.  Even though the Pennsylvania trial court may think that the Pennsylvania Supreme Court would rule differently now, it is bound by the 1911 decision.  (In contrast, a federal district court sitting in diversity could predict what the Pennsylvania Supreme Court would do now.)

b. D should lose its motion for summary judgment.  The federal antitrust judgment does not have claim preclusive effect in state court because, given federal courts' exclusive jurisdiction over federal antitrust actions, the federal antitrust action could not have been brought in state court.

[23] Wrong.  There is no such exception to claim preclusion and such an exception wouldn't make any sense anyway.  Under the law of claim preclusion, P should have brought the Pennsylvania state law action with his earlier federal antitrust action in federal court.  Both actions concern the same transaction or occurrence and the Pennsylvania action clearly could have been brought in federal court, since there was supplemental jurisdiction for it there.  The fact that the earlier federal antitrust action could not have been brought in the second state law action is irrelevant to this point.  Those of you who chose this answer were probably were thinking of a case where the first action was a state law action in state court and the second action was a federal antitrust action in federal court.  If that had been the scenario then it would be true that the federal action would not have been claim precluded, because, given the exclusive federal jurisdiction for federal antitrust actions, it could not have been brought in the earlier state court action.  But that wasn't this question.

c. D should lose its motion for summary judgment.  The federal antitrust judgment does not have claim preclusive effect because a predatory pricing action was not available under federal law.

[6] Wrong.  This is a huge non sequitur.  Who cares whether the predatory pricing suit was not available under federal law?  Under the law of claim preclusion, P still had an obligation to bring the Pennsylvania action with the federal antitrust action in the first suit -- both actions concerned the same transaction or occurrence and the state law action had supplemental jurisdiction in federal court.

d. Assume that, under Pennsylvania law, the definition of a "claim" for the purposes of claim preclusion is much narrower than under federal law.  A "claim" includes only the causes of action that the plaintiff sued under in the action whose judgment is alleged to have claim preclusive effect.  If so, then D should lose his motion for summary judgment, since a federal antitrust violation is a different "claim" from a violation of Pennsylvania common law on restraint of trade.

[42] Wrong.  When determining the claim preclusive effect of a judgment, a court does not use its own law -- it looks to the applicable law of the court issuing the claim precluding judgment.  That was a federal court.  Furthermore, because the federal court was deciding a federal question case, federal law on claim preclusion necessarily applies.  There is no Erie problem of the sort that you dealt with in Essay Question 2 about whether state or federal claim preclusion applies in diversity actions.  Because federal law applies, Pennsylvania law on claim preclusion is irrelevant.

e. None of the above is true.

[25] Correct, because a, b, c, and d are wrong.

Question 20.
 P, a domiciliary of Nevada, brings a diversity action against D, a domiciliary of California, under California negligence law, in the federal district court for the Southern District of California, concerning personal injury done to him in connection with an accident involving three cars driven by P, D and X.  D impleads her husband, X, a domiciliary of California, on the ground that if she is found liable, X was a joint tortfeasor and so is liable to her under contribution.  D claims X was a joint tortfeasor because D and X, while driving, were having an argument through the windows of their cars at the time that the accident occurred.  X brings a motion to dismiss the impleader for failure to state a claim on the ground that, under California law, spouses may not sue one another under contribution.  The federal court grants the motion to dismiss in the following brief statement:
 X is D's husband and, under California law, interspousal immunity applies to actions for contribution.  Therefore D's impleader is dismissed for failure to state a claim.
After discovery, both P and D move for summary judgment.  The court arrives at two findings of fact.  The first is that, on the basis of the evidence presented by each side, a reasonable jury would have to find that D was negligent, because, at the time of the accident, she had completely removed her hands from the wheel and was leaning over in order to yell at her husband out of the window of her car.  The second is that a reasonable jury would have to find P contributorily negligent because he was severely intoxicated during the accident.  The court therefore grants summary judgment to D.
 Which one of the following is a true statement?

a. The federal court should not have granted X's motion to dismiss for failure to state a claim.  Motions to dismiss for failure to state a claim are appropriate only in response to complaints, not impleaders.

[5] Wrong.  That's simply false.  See the first sentence of R. 12(b).  Furthermore, if it were true, how would you get rid of impleaders that are legally insufficient on their face?

b. Even if actions against spouses for negligence are allowed under California law, D is claim precluded from subsequently suing X under negligence for the damages that X's negligence caused her.

[24] Correct.  D brought an impleader against X.  That impleader was dismissed for failure to state a claim and the court did not say "without prejudice."  Therefore, under R. 41(b), it is with prejudice.  The law of claim preclusion applies when someone brings an impleader just as much as when he sues as a plaintiff.  Therefore D had an obligation to bring with her impleader any other cause of action against X that concerned the car accident.  She didn't bring this negligence action with her impleader, so she is claim precluded from bringing it later.

c. If Y, the owner of the car that P was driving, sues P under negligence for the damages P did to Y's car, P is not issue precluded from relitigating P's negligence, because Y was not a party to the earlier suit.

[21] Wrong.  There mere fact that Y was not a party to the earlier suit does not mean that P can escape issue preclusion.  Offensive non-mutual collateral estoppel is possible.  See Parklane Hosiery.  A number of hurdles must be passed for Y to take advantage of issue preclusion against P, but the mere fact that Y was not a party in the earlier suit isn't enough to stop issue preclusion.

d. If Y, the owner of the car that P was driving, sues P under negligence for the damages P did to Y's car, P is not issue precluded from relitigating P's negligence, because P's negligence was not essential to the judgment in the earlier suit.

[15] Wrong.  The finding that P was negligent was essential to the court's judgment in the earlier suit.  If the court had found only that D was negligent it would not have been able to give summary judgment to D.  The finding that P was contributorily negligent was essential to the court's judgment for D.  It is the court's finding that D was negligent that was not essential.  See Cambria v. Jefferey.

e.  None of the above is true.

[40] Wrong, because b is true.
 
 

Essay 1.
35 points.

 Consider the following procedural rule for federal district courts, which we can call the "entire transaction rule."  Under this rule, if a plaintiff sues a defendant concerning a particular transaction or occurrence and the suit comes to a judgment, then all causes of action concerning that same transaction or occurrence will be forever barred, whether or not the barred cause of action is one brought by someone who was not a plaintiff in the original action or is against someone who was not a defendant in the original action.
 Write a brief essay that assesses the merits of this rule.  Be sure to respond to the following questions:
1) How is this rule different from and similar to rules and principles of civil procedure that currently exist in federal district courts?
2) What are the benefits of this rule and what problems does it create?
3) Can any of the problems be addressed by introducing other procedural requirements?

ANSWER

 More wide-ranging answers to this question were acceptable than the answers to essay questions 2 and 3.

I. Similarities and differences of this rule to current procedure in federal courts.

 Most of you understood that this rule is like claim preclusion in the sense that it precludes causes of action concerning a transaction or occurrence that has already been the subject of litigation.  But, as most of you noted, under current claim preclusion law, only those who sued in the earlier action and their privies are claim precluded.  (Actually, most of you said all parties to the earlier action and their privies are precluded under current claim preclusion law, but that's not right.  Those who were sued in the earlier action are not claim precluded, although they -- and those in privity with them -- are precluded under R. 13(a), the compulsory counterclaim rule.)  In contrast, under the new rule even non-parties not in privity are precluded.  Thus this is like a greatly expanded claim preclusion and compulsory counterclaim rule.

 That was it on this section for most of you.  Some of you mentioned that issue preclusion was similar to the new rule as well, especially since issue preclusion can be taken advantage of by non-parties.  But it's important to note exactly how the new rule is and is not like non-mutual collateral estoppel.  In one respect non-mutual collateral estoppel is drastically different from the new rule.  Under non-mutual collateral estoppel, non-parties are not precluded from bringing causes of action concerning a transaction or occurrence that has already been the subject of litigation.  They may bring these actions.  All it does is allow these non-parties to take advantage of the determination of issues in the earlier litigation.  Unlike the new rule, which motivates all potential parties to join, nonmutual collateral estoppel of the offensive variety has the opposite effect -- it motivates potential parties to hold back and wait for a favorable determination of issues.  The only sense in which nonmutual collateral estoppel is like the new rule is from the perspective of the parties to the earlier litigation.  If the adjudication of issues in the earlier litigation is to these parties' disadvantage, they can be effectively precluded from suing even non-parties concerning the same transaction or occurrence, because the non-parties can assert defensive non-mutual collateral estoppel in these new suits.

 Finally another difference between issue preclusion and the new rule should be noted.  Sometimes there is an overlap of issues even though the transaction or occurrence is different.  Consider a breach of a contract followed by a suit followed by another breach of the same contract followed by another suit.  There could be plenty of overlap of issues between the two suits but the transactions or occurrences that were the subject of the two suits would be different (even under the new rule).

In general, discussing issue preclusion was a trap for the unwary.

 It was much more fruitful to compare the new rule to other rules that compel joinder (or the equivalent of joinder) of parties.  These are the necessary party rule R. 19(a) and class actions, particularly those class actions that do not allow for notice or the opportunity to opt out, that is, R. 23(b)(1)(A), 23(b)(1)(B), and 23(b)(2).  Those of you who simply rejected the new rule as a terrible violation of due process that was completely antithetical to federal civil procedure as it currently stands were obviously not thinking of class actions.  Many class actions bind all possible parties whether or not they were given notice to the suit.  The new rule already exists in some circumstances.  Class actions were a particularly useful point of reference because it helped make sense of the benefits and problems with the new rule, as well as the ways that these problems can be resolved.  A few of you mentioned strict in rem actions as another analogy.  This was a useful comparison as well.

 Although there are similarities between the new rule and Rules 19 and 23, there are also important differences.  Someone is a necessary party under R. 19(a) only when he will be practically unable to vindicate his interests or someone who is already a party will be subject to incompatible obligations without joinder.  In addition, compulsory class actions (that is, those not requiring the ability to opt out) exist only in limited circumstances where the representative party is sure to represent the other class members' interests or the class members would not be able to get any meaningful recovery if they sued separately.  That's much more limited that the new rule.

 Some of you thought that the new rule is incompatible with current joinder rules under the Federal Rules of Civil Procedure.  That's not really so.  No current joinder rule forbids joinder of a cause of action concerning the same transaction or occurrence, even when it involves the joinder of another party.  Such joinder is at least permitted under the current rules, although it is not always required.  For example, Rule 20 allows joinder of the parties that the new rule compels.

II. Benefits.

 Most of you did fairly well on this part.  The benefits of the new rule are the benefits of claim preclusion and the compulsory counterclaim rule generally.  It is more efficient to litigate a transaction or occurrence in one rather than in multiple suits, because there will be a great deal of overlap of evidence and arguments in the multiple suits.  Furthermore, having only one suit will mean that there will be no inconsistent adjudication of issues, something that is possible under current rules even given the rules of issue preclusion.  It is also arguably fairer to defendants to require them to answer all accusations concerning a transaction or occurrence in one suit, rather than requiring them to bear the costs of multiple suits.  Indeed the benefits of finality could help society as a whole by putting to end all financial and legal questions concerning a particular event.  Finally, the problem of multiple and duplicative punitive damages is solved by having only one suit to determine these damages.

III. Disadvantages and Possible Solutions.

 Some of the disadvantages of the new rule are disadvantages of claim preclusion.  One problem is the perpetuation of an erroneous decision.  If the first litigation of the transaction or occurrence is wrong, we are all stuck with it forever.  Not much can be done about that problem, though, since it is intimately tied to the benefits of the new rule.

 The second is satellite litigation concerning the scope and effect of the new rule (something that always occurs when you introduce a new procedural rule).  Here too not much can be done.

 The third is that the new rule, by encouraging plaintiffs to join anyone who might conceivably be a defendant and encouraging any potential plaintiff to intervene, might lead to the litigation of many more claims than might be litigated if the actions were allowed to proceed piecemeal.  This is similar to the "everything but the kitchen sink" problem with claim preclusion law as it currently stands.  But now it is everyone but the kitchen sink.  Once again, this disadvantage is too intimately tied to the advantages of the rule for it to be fixed, although it might be possible to use class action concepts of a representative party to make litigation more manageable.  But it would be necessary to determine whether the representative party adequately represented the interests of the other parties.  Rule 23(b)(1)-(2) requirements concerning allowable compulsory class actions (that is those in which there is no possibility to opt out) give an indication of when this would exist.  It is unlikely that a representative party would always adequately represent the interests of the other parties, as the example of mass torts in the Dalkon Shield case showed.  If not, then the due process rights of the other parties (under the 5th, not the 14th Amendment -- remember, we are in federal court) would be violated.

 The example of mass tort class actions should help remind you of other problems with the new rule.  There could be serious choice of law problems, if the transaction or occurrence involved an event that crossed state boundaries.  It may be that many different states' laws need to be applied in the same suit, which would put an insuperable burden on the jury.  The possibility that defendants had different affirmative defenses could also make it unlikely that one party could represent the interests of all plaintiffs or defendants.

 Of course, just how factually and legally complex the litigation would get would depend on just how one understood the scope of a transaction or occurrence -- an issue that is more pressing and difficult under the new rule than under the current law of claim preclusion.  Perhaps the scope of a transaction or occurrence could be defined to reduce these problems.  Maybe all harms from a defective product are not one transaction or occurrence, only the harms that a particular person suffered from the product.  If so, many of the problems of complexity would be solved.  That would not mean that the new rule was useless however, because it would still require the person harmed by the defective product to sue all possible defendants at the same time.

 Nevertheless, because of new parties joining the suit, litigation is likely to be larger and more unmanageable under the new rule.  A particular problem is that if there is any potential dissent among co-defendants or co-plaintiffs, it will be brought out.  Cross-claims are compulsory rather than permissive under the new rule.  That means that unified fronts between plaintiffs and defendants would no longer exist.  It is possible to make cross-claims permissive again, although that would undermine much of the benefits of the new rule.

 Another problem is the possibility under current joinder rules (namely 18(a) and 13(b)) of unrelated causes of action being joined in the suit.  If they were still allowed, the new rule would apply to them too and all parties to that new transaction or occurrence would have to be joined as well.  That would make litigation truly unmanageable.  This problem could perhaps be solved by not allowing unrelated claims to be joined.

 Another problem with the new rule is that the first plaintiff who sued would be able to get his choice of forum, to the disadvantage of the other plaintiffs who would be forced to join the suit (and to the disadvantage all the defendants who were joined by those plaintiffs).  Some of you treated this forum shopping problem as if it were a violation of some due process right of the other plaintiffs.  But defendants constantly deal with forums that are not of their own choosing, so why is it so bad that plaintiffs should as well?  Nevertheless, it is possible that the forum chosen by the first plaintiff could be inappropriate (setting aside personal jurisdiction and venue problems, which I'll discuss later).  So liberal use of transfer to a more convenient federal district might be needed.

 The most important problem with the new rule is potential plaintiffs who find their causes of action barred under the new rule because the transaction or occurrence they want to sue about was already the subject of earlier litigation that they were not aware of.  Many of you thought that this possibility was an obvious violation of due process.  It is not so obvious.  After all, notice is not required under 23(b)(1)-(2) class actions and yet unknown members of the class are bound.  Furthermore, even when there is notice, the bound party may not have received it.  See Mullane.  But it seems clear that, at least in some circumstances, Mullane-like notice to potential plaintiffs would be required.

 If one relied upon class action devises of representative parties to simplify the suit, then it might also be necessary to allow parties the opportunity to opt out, although this would likely eviscerate the rule.  If one did not use representative parties, then mere notice, which would give potential parties the opportunity to defend their interests might be enough.  This would be like a strict in rem action.  Notice is given to (but not always received by) all potential plaintiffs concerning a piece of property.  All potential plaintiffs may not opt out of the proceedings and will be bound by the judgment.  But the notice does allow these potential plaintiffs the opportunity to intervene and vindicate their interests concerning the property.

  The next set of problems involves the intersection of the new rule with personal jurisdiction, subject matter jurisdiction and venue.  What if a party must be joined under the new rule, but joinder defeats diversity, or destroys venue or there is no personal jurisdiction over the party?  Should there be something like Rule 19's distinction between a necessary and indispensable party?  In other words, should the rule be that a party to the transaction or occurrence should be joined if there is jurisdiction or venue and otherwise the case as a whole should be dismissed to be brought in a forum with venue and jurisdiction, unless there is no such forum, in which case the action should proceed without the party?  Another possibility is simply to expand personal jurisdiction, subject matter jurisdiction and venue to their full constitutional scope.  That would mean requiring only minimal rather than complete diversity and allowing a federal court to assert personal jurisdiction over a party if there are International Shoe contacts with the United States as a whole.  (Venue is not a constitutional requirement at all, so we could get rid of it entirely without any constitutional difficulty.)  Another possibility would be to rely on class action devises like a representative party.  As you know, one only looks to representative parties for diversity, venue and personal jurisdiction purposes.  For example, although one might think that there should be personal jurisdiction over unnamed members of a plaintiff class (at least in a 23(b)(1)-(2) class action), since they did not consent to personal jurisdiction, personal jurisdiction over them has not generally been required, since there is no burden of participation in the suit put on the unnamed members and the named member is assumed to adequately represent their interests.  If that's true, then using representative parties could allow us to get around the problems of personal jurisdiction, venue, and subject matter jurisdiction.

 Finally, some of you noted that the new rule did not spell out the exceptions to claim preclusion under current law.  For example, it did not require that the judgment be on the merits.  That problem however is easily solved by simply incorporating these requirements into the new rule.
 

Essay 2.
30 points.

     P brings a diversity action against D in the federal district court for the District of Connecticut.  P's action is under state-law negligence and asks for compensation for property damage resulting from a car accident between P and D.  The court issues summary judgment for P.  P subsequently brings another diversity action against D in the federal district court for the Southern District of New York.  This second action is under state-law negligence and requests compensation for personal injuries resulting from the same car accident that was litigated in Connecticut.  Under Connecticut's law of claim preclusion, P's second action is not barred, because a judgment concerning property damage in an accident does not have claim preclusive effect on a subsequent action concerning personal injuries.  D answers P's complaint, asserting the affirmative defense of claim preclusion.  D then brings a motion for a judgment on the pleadings.  P argues that, since his action in federal court in Connecticut was in diversity, Connecticut law concerning the claim preclusive effect of the judgment should apply.  D argues federal law concerning claim preclusion applies.  Who is right, P or D, and why?

ANSWER

[NOTE: Since this question was asked on the exam, the Supreme Court has decided that a judgment by a federal court sitting in diversity has the claim-preclusive effect of a judgment of state court in the state where the federal court is sitting. See Semtek v. Lockheed Martin, 121 S.Ct. 1021 (2001). The Semtek case arose in connection with the claim preclusive effect of a dismissal on statute of limitations grounds. Our question here concerns the scope of a claim. This difference is one reason why the Supreme Court recommended using state law, whereas I recommended using federal law below. It is not entirely clear whether the Supreme Court would use state claim preclusion law concerning the scope of a claim, since to use state law would in some cases conflict with important federal interests in uniformity of procedure (for example interests in maintaining parallels between the scope of claim preclusion and the scope of the compulsory counter-claim rule). In any event, anyone who argued in the exam that state claim-preclusion law applied got the same points as someone who argued that federal claim preclusion law applied, provided that the Erie analysis was pursued correctly.]

     You should already know that when deciding the claim preclusive effect of a judgment, a court should look to the claim preclusion law of the court that issued the claim precluding judgment.  But the court issuing the claim precluding judgment in this case was a federal court in Connecticut sitting in diversity.  That means that there are two possible sources of claim preclusion law, Connecticut and federal.  The question of which applies is an Erie question.

     A few of you mistakenly said that under Klaxon the federal court in New York should look to New York's choice of law rules to determine whether Connecticut or federal claim preclusion law applies.  This is wrong.  Klaxon applies to choices between different states' laws.  But the question of whether a federal court sitting in diversity should choose federal or state law is an Erie question that cannot be answered by state choice-of-law rules.

     A few of you simply said that because one looks to the claim preclusion law of the court that issued the judgment, federal law applies.  But a federal court in Connecticut sitting in diversity can apply two types of law - Connecticut or federal.  So the Erie question must be answered.  If you ignored the Erie question entirely you got practically no points on this essay.

     The next step was to note that this is a case of conflict between a state procedural rule and a federal common law procedural rule.  Some of you wrongly said that federal law on claim preclusion was derived from a statute or a Federal Rule of Civil Procedure.  That's not so.  Fed. R. Civ. P. 41(b) does state when an involuntary dismissal is on the merits, but it does not say what the scope of a claim is for claim preclusion purposes.  Likewise, Fed. R. Civ. P. 8(c) mentions res judicata as an affirmative defense, but it does not state what the law of res judicata is, in particular whether actions for personal injury and actions for property damages are part of the same "claim."  The federal transactional test for the scope of a claim was created by federal courts and so is a common law rule.

     Knowing that federal claim preclusion law is common law is important because it tells you what Erie test to apply.  Many of you simply used every single Erie test, including those for statutes or Federal Rules of Civil Procedure.  For example, you asked whether the federal law on claim preclusion "abridged, enlarged, or modified a substantive right."  This showed a profound confusion on your part and resulted in many many points being taken off.

     The first test for common law rules is whether these rules are within the constitutional power of federal courts.  The question is not, as many of you put it, whether they are within the constitutional power of Congress to regulate the procedure of federal courts.  Congress does not create common law, courts do.  The power of Congress to regulate procedure is at issue only in connection with Congressional statutes or Federal Rules of Civil Procedure (which involve Congressional delegation of its power to the Supreme Court through the Rules Enabling Act).

     There are a number of ways of putting the extent of federal courts' power to create common  law.  We know from Erie that substantive common law (in diversity cases) is not allowed.  But what is substantive law?  In Byrd, common law making was said to be beyond the power of federal courts if the common law was bound up with substantive rights.  It's possible that this is the same standard as the "arguably procedural" standard that applies to Congress's power to regulate procedure.  I allowed you to use the "arguably procedural" standard but only if you made it clear that you were speaking of federal courts' power to create common law, not Congress's power to regulate the procedure of federal courts.  But it was clearer to use the Byrd standard.

     Is claim preclusion law substantive or bound up with substantive rights?  Clearly no.  Claim preclusion is a compulsory joinder rule.  If it is substantive, then so is Fed. R. Civ. P. 13(a) (the compulsory counterclaim rule).  I was shocked how many of you said that claim preclusion law was substantive, offering as a reason the fact that it precluded substantive claims from being brought.  This showed a complete misunderstanding of what substantive and procedural law are.  A rule determining what actions should be joined in a lawsuit does nothing to regulate people's everyday activities.  Consider the related question of compulsory counterclaim rules.  Some states have compulsory counterclaim rules and some don't.  Does that make any difference to how people act outside of a litigation context?

     But even though federal common law of claim preclusion is constitutionally valid, there is a conflict with state procedural law and so we need to engage in the more fluid "policy" Erie inquiry.  The test that should be used is the York test as modified by Hanna.  Many of you wrongly said the question is whether the use of the federal rule is "outcome determinative."   This is no longer good law.  The old York  test could be mentioned but only if it was made clear that it is no longer good law.  The question now, according to Hanna, is whether using federal law in federal court and state law in state court will lead to forum shopping and the inequitable administration of the law.

     Will differing standards lead to forum shopping?  Perhaps.  A defendant may want to remove from Connecticut state court to federal court in order to force the plaintiff to bring both personal injury and property damage claims against him in one forum.  But a defendant may want them brought separately, for example, if he does not like the current forum.  The plaintiff on the other hand might have an incentive to eschew federal court in favor of Connecticut state court in order to bring personal injury and property damage actions separately.  But the plaintiff too might want them to be brought together, in which case there would be no incentive to forum shop. [NOTE: In the Semtek case, the possibility of forum shopping is much greater.]

     Will it lead to inequitable administration of the laws between federal and state courts?  Many of you talked about irrelevancies here.  The inequity of a defendant having to defend against two suit is irrelevant.  That's simply an inequity of the state law rule when it is applied, not an inequity that results from federal courts' using the federal rule and state courts' using the state rule.  Likewise the inequity of the plaintiff being barred by the federal court in New York from bringing a claim that he thought was not claim precluded is irrelevant.  That is simply an inequity that results from the Erie issue having not been decided before P brought his suit in federal court in Connecticut.

     The question is whether there is going to be an unfairness created by the difference between federal proceedings in Connecticut and state proceedings in Connecticut as a result of the different claim preclusion rules in federal and state courts.  I don't see why there would be.  It's true that the plaintiff would have to bring personal injury and property damages claims together in the federal proceedings and not in the state proceedings, but since this rule concerning joinder does not affect how the cases are adjudicated, I don't see how there is any important difference between how justice is administered.  Contrast this with differing rules of evidence in state or federal courts that would allow important types of evidence in in state court and not in federal court.  In such a case there might be inequitable administration of the laws.

     The next question is whether there are countervailing federal interests in favor of the use of federal law, of the sort mentioned in Byrd.  Clearly there are.  The federal court has a very very strong interest in not wasting judicial resources and in the finality of federal judgments.  If the state law rule is used, there may be two trials instead of one and the second trial could very likely be in another federal court (as it was in this case).  Federal courts have very strong interests in making sure that their time and money is not wasted.  This is the reason that most federal courts that have addressed this Erie issue have argued that federal and not state claim preclusion law should apply in a diversity case.  I was astonished how many of you missed this very crucial point.

     Another important point is that other joinder rules in federal court would come into conflict with the Connecticut rule.  This is especially true of R. 13(a).  The defendant being sued would have to bring against the plaintiff both personal injury and property damage actions that concerned the same transaction or occurrence as the plaintiff's claim against him, but the plaintiff himself could bring separate personal injury and property damage actions.  That's odd and argues against using state preclusion law.  Furthermore, if the defendant did bring a compulsory counterclaim against the plaintiff, then under R. 13(a) the plaintiff all of the sudden would have to bring all property damage and personal injury actions that concern the same transaction, since they would now be compulsory counterclaims to the defendant's counterclaim.

     Finally there is the Szantay question of whether the state has any interest in its rule applying in federal court.  It was difficult to see what the purpose behind the state law rule was.  Some of you engaged in some speculation here, which was perfectly fine to do.  But if the purpose was simply that Connecticut courts have the time and money to allow for litigation of the same transaction twice, then arguably this is not an interest that applies when the action is brought in federal court.
 

Essay 3.
35 points.

 You work as a litigation associate in a large New York law firm.  A partner calls you into her office and says that a summons and complaint have been on D Corp (hereinafter D), a for-profit chain of hospitals, and on E, a doctor employed by D.  Both are your firm's clients.  Before your firm looks into the facts with the clients to determine how to answer the compliant, she wants you to quickly look into some possible preanswer responses.

 She gives you the following information.  The plaintiff in the action, P, is bringing a diversity suit against D and E for medical malpractice under New York law in the federal district court for the Eastern District of California.  Because service on D was in accordance with Fed. R. Civ. P. 4(h) and service on E was in accordance with Fed. R. Civ. P. 4(e), there is no possible objection to service or to process.  P currently resides in her summer home in the foothills of the Sierras, in the Eastern District of California.  She is recovering there from complications resulting from a gall bladder operation performed by E that took place in one of D's hospitals in New York City.  She chose to reside in the summer home, because it is only a few blocks from the best post-operative care facility in the United States, which E recommended that she enter after the complications with her operation became clear.  Before the operation, she lived in her permanent home in New York City and visited the summer home for only a few weeks out of the year.

 D is incorporated in California and has its administrative headquarters at its founding hospital in Los Angeles, in the Central District of California.  The board of directors meets in Los Angeles and the Chief Executive Officer of D lives and works in Los Angeles.  D has three hospitals, one is New York City, one in Albany, New York; and one in Los Angeles.  D's sole shareholder is F, whose home is in New York City.  D does advertising solely in Los Angeles, New York City and Albany.

 E has his home in Greenwich, Connecticut and works in D's hospital in New York.  He is a famous gall bladder surgeon and performs surgery all over the country.  He has performed surgery similar to that performed on P a number of times in Los Angeles and in San Francisco (which is in the Northern District of California) but never in the Eastern District of California.  He has, however, attended a gall bladder conference in Sacramento, which is in the Eastern District of California.  During the week prior to her surgery P was at her summer home and P and E spoke a number of times on the phone concerning the operation.  Some of these calls originated from E's home in Greenwich.

 Draw up a brief memo for the partner on possible preanswer responses to P's complaint.  If there is something that you need to know but can't tell from the question, say what it is.

ANSWER

 Covering all the bases was heavily rewarded in this relatively easy essay question.

A Motion to Dismiss for Lack of Subject Matter Jurisdiction

 You should have noted that the case is brought under diversity and that complete diversity could fail to exist in two ways: both P and D could be domiciled in New York or both P and D could be domiciled in California.  (Using the term residence rather than domicile cost you a lot.  A very large number of you did this.)  You should have mentioned that E, who is domiciled in Connecticut, is not a possible diversity-destroying party.

 You should have begun by stating the test for domicile for an individual -- Presence in the state with an intent to make the state one's home for the indefinite future.  Clearly before the operation New York was P's domicile.  It will remain her domicile unless she established a domicile in California.  The question is whether P intends to remain in California for the indefinite future.  She probably does not.  She probably intends to remain there until she recovers.  Although when she recovers is indefinite, that's not enough to make California her domicile.  Otherwise simply crossing a state border without being sure exactly when you will come back would make the new state your domicile.  Think of World Wide Volkswagen, where the family who had the accident in Oklahoma and resided but was not domiciled there during their recovery.  Nothing really was lost by going the other way on the issue, however, provided you were aware of the proper test for domicile.

 What about D's domicile?  As a corporation it has two domiciles - its state of incorporation (California) and its principal place of business.   Under the nerve center test its PPB would be California.  Under the total activity test it might be New York, since 2/3 of its hospitals are there.  Once again, you could go either way on this issue, but you needed to be sensitive to the two possible tests for a principal place of business.  The fact that the LA hospital was the founding hospital might also be relevant for principal place of business purposes.  You should have noted that the residence or domicile of D's shareholder is irrelevant to determine D's domicile.

 Finally you should have mentioned the problem of the jurisdictional minimum for diversity.  It may be that the amount in controversy is less than $75,000.  You should have indicated to the partner that the complaint should be examined to determine this.

     The main mistakes in this section involved speaking of residence rather than domicile and not stating the test for domicile for individuals.  Many of you simply said that California or New York was P's domicile without saying why.  You got practically no points if you did this.  Many of you also forgot to mention one or another of the tests for the principal place of business for corporations or forgot that D's being incorporated in California was a way to establish its domicile there.  Finally many of you ignored alternative means for destroying diversity.  For example many of you argued that the way to get the case dismissed for lack of subject matter juriisdiction is to argue for New York being P's domicile and New York being D's principal place of business and so its domicile, without noting that if California is P's domicile, then there clearly is no diversity because D is also domiciled in California by virtue of its being D's state of incorporation.

A Motion to Dismiss for Lack of Personal Jurisdiction

 You should have looked to whether there is personal jurisdiction over D and E.  This examination involves a number of parts.  First of all there is the 5th Amendment due process examination of whether personal jurisdiction over the defendants by a federal court is constitutional.  Clearly it is because both of them have sufficient International Shoe contacts with the United States.  Most of you forgot the 5th Amendment inquiry entirely.

 But you then need to look to the requirements of Fed. R. Civ. P. 4(k) which, with some exceptions irrelevant to this case, limits the personal jurisdiction of federal courts to the personal jurisdictional reach of a state court in the same state where the federal court is located.  The question then becomes whether a California state court would have personal jurisdiction over the defendants.  Most of you failed to mention 4(k) entirely.  You simply spoke as if P were suing in a California state court.

 The 4(k) test has a number of parts.  The first is the International Shoe 14th Amendment due process test.  There is no question that D has sufficient International Shoe contacts with California.  It is incorporated in California and has a hospital there.  This is enough for there to be general jurisdiction over D, that is, jurisdiction sufficient for D to be sued on any cause of action, even one that occurred in New York.

 The International Shoe problem is more pressing with respect to E.  Here only specific jurisdiction is possible.  You could go either way here but there were certain things I wanted you to look to.  Most importantly, you needed to look to the relatedness of the trips, phone calls, and conference attendance to the cause of action against E.  The level of relatedness is essential to specific jurisdiction.  With respect to the phone calls, you should have noted whether they were initiated by E or not and whether he solicited the operation through the phone calls or not.  If they were not the solicitation of the operation they are probably not enough to establish personal jurisdiction.  The level of relatedness to the activities being sued upon (namely the operation in NY) would be too low.  The situation is not like McGee, where the contact with California (the contract of reinsurance mailed by the defendant to the plaintiff's son in California) was the very thing being sued upon.  The plaintiff is not suing concerning these phone calls.  Likewise, the operations that E engaged in in California would never be considered by a court to be sufficient for specific jurisdiction, contrary to what many of you said.  The level of relatedness is very low.  Otherwise simply by performing an operation in state A one would be open to personal jurisdiction in A for the same type of operation no matter where it took place.  You should also have noted what might be the best candidate for personal jurisdiction over E -- E's recommending that P go to California to recover.  The relevance of E's having a duty to P could also have been explored.  Once again, you could have gone either way here, but sensitivity to how related the activities allegedly establishing personal jurisdiction over E were to the activities being sued upon was necessary.
 

     Finally you could have mentioned the fairness (vs. power) considerations of exercising personal jurisdiction over D and E.  It helped also to note the question of whether E was tagged in California.  I wrote the question assuming he was not, but if he was, of course, there would be no personal jurisdictional problem.

 Then you needed to mention the impact of California's long-arm statute and its state constitution on personal jurisdiction.  The effect of both would have to be examined with respect to both D and E.  Most of you forgot this.  You didn't have to know the content of either, but you merely needed to mention that each would have to be examined to see whether they restrict personal jurisdiction further than the 14th Amendment.  But many of you knew and mentioned that California's long-arm statute does not limit California courts more that the 14th Amendment and the state constitution.

     The biggest errors were ignoring the 5th Amendment, Fed. R. Civ. P. 4(k), the California Constitution and California's long-arm statute.  Most of you simply acted as if P were suing D and E in California state court and the only relevant issue were the 14th Amendment.

     Many of you also forgot to mention personal jurisdiction over D and that there would be general jurisdiction over it by virtue of its being incorporated in California.

     Many of you simply spoke of the level of contacts between E and California without speaking of relatedness.  Some of you, as a result of confusing generated by venue, spoke of contacts with the E.D. of Cal. rather than California as a whole.

A Motion to Dismiss for Lack of Venue

 There are three ways that there could be venue for the action in the E.D. Cal. under 1391.  If one defendant resided in the E.D. Cal., then venue would be possible if both defendants resided in California.  This provision is clearly inapplicable because  both defendants do not reside in California.  E clearly resides in Connecticut.  (One does not use the personal jurisdiction test on E because he is not a corporation.  Some of you made this mistake.)

 The second is if a substantial part of the events giving rise to the claim occurred in the E.D. Cal.  You could have gone either way here.  It is possible that P's having to go to the E.D. Cal. to recover is a  substantial part of the events giving rise to the claim, especially since E recommended that she go there.  You should have noted this.

 The final possibility would apply if there is no other district that would have venue.  If that's the case, then venue would exist in any district where a defendant is subject to personal jurisdiction.  But there is clearly venue in the Southern District of New York, where the operation occurred.  So this doesn't apply either.

     The majority of answers given here showed a complete lack of understanding of venue.  Many of you simply claimed that there would be "venue over E" if E would be subject to personal jurisdiction in the E.D. Cal.  That showed an utter lack of understanding of venue and resulted in your getting practically no points for this part.

 You must look to all the defendants to determine venue.  The question of whether E would be subject to personal jurisdiction in the E.D. Cal. is relevant to venue only if no district in the US can get venue any other way.  But this is false.  There clearly would be venue in the S.D.N.Y.  You had to look to the language of 1391(a) to answer this question and most of you did not.

     Perhaps as a result of the similarity between personal jurisdiction and venue as it was improperly understood by many of you, many of you who made this mistake concerning venue simply skipped personal jurisdiction as a defense.  The result was a massive loss of points.

Other motions

 You should have briefly mentioned preanswer motions that you had too little information about to discuss - e.g. failure to state a claim, failure to join a necessary party, motion for a more definite statement.