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.

Civil Procedure

Law 112

Professor Green

Final Exam (Fall 2000)

Part I
Multiple Choice & True/False Questions
Part I of this exam has 19 pages, including this cover sheet. It consists of 16 multiple choice questions and 10 True/False or Yes/No questions.

The total number of points for the entire exam is 200.  The total number of points for Part I is 100 points. Each multiple choice question is worth 5 points.  Each True/False or Yes/No question is worth 2 points.  Pace accordingly.

Commercial outlines, hornbooks, treatises etc. are not permitted in the examination. You may bring into the examination only the following materials:

1)  All materials assigned in this course:
Field, Kaplan & Clermont, Civil Procedure (7th ed. 1997)
Glannon, Civil Procedure: Examples and Explanations (3rd ed. 1997)
Federal Rules of Civil Procedure (West 2000) (or any other version of the Federal Rules and statutory materials used in the course, provided it contains only material available from the West book)
The set of Supplementary Materials that were available on the TWEN site.

2) Any outline made by you or by a study group within which you participated

3)  Your class notes.
 

Part I. Section 1.
16 Multiple Choice Questions
5 points each
80 points total

1. P (a citizen of New York) files a suit against the D Corp. for fraud under New York law in Wyoming state court.  P is asking for $80,000.  The suit concerns misrepresentations the president of the D Corp. allegedly made to P in New York City about the productivity of oil fields that the D Corp. holds in Wyoming.  These misrepresentations induced P to buy a significant amount of D Corp. stock in New York.  The D Corp. is an oil company incorporated in Delaware.  It has extensive oil fields of roughly equal size and value in Wyoming, Western Texas and Southern California.  The president of the D Corp. works in Houston, Texas, and the board of directors meets there.  Most financial decisions are also made in Houston.  The D Corp. removes the Wyoming action to the Federal District Court for the District of Wyoming on the basis of diversity, arguing that the parties are diverse and that P has admitted that the amount in controversy is satisfied by asking for more than $75,000 in his complaint.  Which of the following statements is most accurate?

 A. After removal, the D Corp. would be able to successfully move to dismiss for lack of personal jurisdiction.  There is no personal jurisdiction because the misrepresentation at issue took place in New York.  The fact that the misrepresentation was about something in Wyoming is insufficient to establish personal jurisdiction.

Wrong.  There would obviously be personal jurisdiction over the D Corp. in Wyoming state court and thus in a federal court under R. 4(k), since the D Corp. has extensive oil fields in Wyoming.  This would be sufficient for general personal jurisdiction, even if the cause of action is unrelated to these oil fields.  6 of you chose this answer anyway.
 

 B. The district court will remand the case back to state court.  The D Corp. may not successfully remove because it resides within the state of Wyoming.  A diversity case may not be removed if a defendant is an in-state resident.

Wrong.  A diversity case may not be removed if the defendant is an in-state citizen, not resident.  The D Corp. is almost certainly not an in-state citizen, since its principal place of business is surely Texas, not Wyoming.  Its other state of citizenship is Delaware, where it was incorporated.  29 of you chose this answer anyway.

 C. The district court may not remand the case back to state court.  The plaintiff and the defendant are diverse.  Furthermore, the court may not find that the amount in controversy is below the jurisdictional minimum, because the plaintiff has admitted that the amount in controversy is more than $75,000 by asking for $80,000 in his complaint.

Wrong.  A court may find that the amount in controversy is less than a plaintiff states in his complaint.  The court has a duty to determine on its own whether subject matter jurisdiction exists.  SMJ cannot be created simply through the agreement or admissions of the parties.  35 of you chose this answer anyway.

 D. Assume that in Wyoming state court P had joined to his claim against the D Corp. an unrelated breach of contract action against both the D Corp. and X (a citizen of New York).  In the contract action, P sued the D Corp. and X for damages for violating a contract, signed by all three in Wyoming, under which the D Corp. and X were each to provide P with coal for his factory in Wyoming.  (Assume that the Wyoming state court has joinder rules identical to the federal rules.)  If so, after removal, the district court would remand both the fraud and the breach of contract suits back to state court.

Correct. It is possible to defeat removal of a diversity case by joining an unrelated claim to which one joins a diversity-destroying party.  (Joining unrelated non-removable claims to a federal question case cannot defeat diversity, however, under 1441(c) – this may have confused you.)  I never gave you this exact example in class, but it follows from what we have learned about joinder to defeat diversity.  Only 19 of you chose this.

 E. The district court will remand the case back to state court, because the case lacks venue.  It is not true that a “substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated,” in Wyoming.  The fact that the misrepresentation was about Wyoming is insufficient to establish venue.

Wrong. First of all, if the action lacked venue if would be dismissed, not remanded.  Second, there is venue for this removed action because the District of Wyoming embraces the state court from which the action was removed.  See 28 U.S.C. 1441(a) and Glannon 88.  Finally, even if 28 U.S.C. 1391 were used to determine venue (which it shouldn’t), there would still be venue under 1391(a)(1) and 1391(c).  14 of you chose this anyway.

2. P, a citizen of New York, sues D, also a citizen of New York, for federal copyright infringement in the Federal District Court for the Southern District of New York.  D defaults and P receives a judgment of $35,000 in damages.  Subsequently P has the Federal District Court for the District of New Jersey attach $30,000 worth of D’s stock in a New Jersey corporation and then brings an action on the earlier judgment before the District of New Jersey.  The stock is considered to be in New Jersey by virtue of a New Jersey statute that holds that the situs of the shares of any company incorporated in New Jersey shall be New Jersey.  Which of the following is most accurate?
 
 A. The action in New Jersey must be dismissed for lack of federal subject matter jurisdiction.  It would have had supplemental federal subject matter jurisdiction if it had been brought as supplementary proceedings to the earlier federal question suit.  But brought as a separate suit, it cannot be entertained by a federal court.

Correct.  The action does not have its own source of subject matter jurisdiction, because it is a state law action between non-diverse parties.  Furthermore, there is no supplemental jurisdiction for the action because it is not brought as a continuation of the earlier proceedings in federal court (for example, though R. 69). I mentioned this point orally at least two times in class. [NOTE: There is a certification method under 28 U.S.C. section 1963, by means of which the enforcement of a federal judgment is possible in a district other than that in which the judgment was issued. But that was not discussed in class and furthermore, no reference to certification was made in the question. If there is certification, the enforcement of the federal judgment, although a state-law cause of action, has federal jurisdiction because it is considered ancillary to the earlier federal proceedings that resulted in the judgment.] 29 of you chose this answer. 

 B. The action in New Jersey must be dismissed for lack of personal jurisdiction.  In the light of Shaffer v. Heitner, such a quasi-in-rem action is no longer allowed.

Wrong.  The action in New Jersey is not a quasi in rem action.  A quasi in rem action would be an action in New Jersey for copyright infringement where the source of personal jurisdiction was D’s New Jersey stock.  This action is an action to obtain the stock in satisfaction of a debt.  The action is an in rem action because the very property to which the plaintiff is claiming entitlement is located in New Jersey.  Shaffer is irrelevant, since the cause of action concerns that property.  30 of you chose this answer anyway.

 C. D will prevail in the action in New Jersey.  The property at issue should have been attached in the first suit in New York.  Without such attachment, the New York judgment is void for want of personal jurisdiction.
 
Wrong.  The source of PJ over D in the first action was the fact that D’s domicile was in New York.  No attachment of D’s property was necessary.  Indeed a federal court in New York would not have jurisdiction over the New Jersey property to attach it anyway.  2 of you chose this answer anyway.

 D. The action in New Jersey will not be dismissed for lack of federal subject matter jurisdiction.  The enforcement of a federal judgment is itself a federal cause of action.  Therefore P’s New Jersey action will have federal question jurisdiction.

Wrong.  This is just false.  I said many times in class that an action to enforce a judgment, even a federal judgment, is a state law cause of action.  R. 69 makes this clear too.  33 of you chose this anyway.

 E. The action in New Jersey must be dismissed for lack of personal jurisdiction.  In the light of Shaffer v. Heitner, a state may no longer statutorily determine the situs of shares of companies incorporated in that state.
 
Wrong.  Shaffer does not say this.  It is true that Shaffer puts doubt on quasi in rem actions where the situs of the intangible property is determined to be in the state by statute, but this isn’t a quasi in rem action.  The action in New Jersey concerns the very property attached.  8 chose this anyway.
 

3. In 1860, prior to the enactment of the 14th Amendment, P, a citizen of Oregon, sued D, a citizen of California, in Oregon state court.  The suit concerned $300 in unpaid fees for lawyer services that P performed in Oregon for D while D was a citizen of Oregon.  Service was on D in California.  D defaulted.  In 1870, after the enactment of the 14th Amendment and after the case of Pennoyer v. Neff, P brought an action on the earlier judgment before another Oregon state court.  In the second action, property owned by D that was worth $400 was attached in order to execute the judgment.  D appeared.  What is the best defense that D could make in the second suit?

 A. The judgment in the first suit is void because the exercise of personal jurisdiction over D in the first suit was in violation of the 14th Amendment.
 
Wrong.  How can one appeal to the 14th Amendment when it did not exist at the time that the earlier judgment was rendered?  Pennoyer itself makes it clear that that cannot be done.  17 of you chose this anyway.

 B. The judgment in the first suit is not entitled to Full Faith and Credit.
 
Wrong.  The full faith and credit clause and 28 U.S.C. 1738 are relevant to one state’s treatment of another state’s judgments.  This is a question of how Oregon treats its own judgments.  25 of you chose this anyway.

 C. The first suit was removable as a diversity case.  As a result the judgment in the first suit is void because the state court lacked subject matter jurisdiction.
 
Wrong.  This is basically gibberish.  Just because an action is removable does not mean that if it is not removed the state court does not have subject matter jurisdiction.  3 of you chose this anyway.

 D. The judgment in the first suit is void because the exercise of personal jurisdiction in the first suit was in violation of Oregon law.
 
Correct.  If there is no 14th Amendment to appeal to, then the only way that you can convince an Oregon court that an earlier default judgment before another Oregon court is void is by showing that the earlier court’s assertion of personal jurisdiction was in violation of Oregon law.  And in fact we know from Pennoyer than such an assertion of personal jurisdiction would have been contrary to Oregon law at the time, since D was not served in Oregon as required under Oregon law for an in personam action.  37 of you chose this.

 E. The second suit should be dismissed for lack of personal jurisdiction, because the exercise of jurisdiction over D in the second suit is in violation of the 14th Amendment.

This is not the best answer.  The second suit concerns the very property attached by the court.  If the property is in Oregon, then the assertion of personal jurisdiction in the second suit is clearly in keeping with the 14th Amendment.  I failed to say that the property was in Oregon however.  Thus you might have thought that the property was not in Oregon (although the court could never have attached it then).  Therefore, I will give the 37 who chose this 2 out of 5 points.
 

4. The state legislature of Alabama added to a state medical malpractice statute the following provision:
 § 4(a)  Exclusive state jurisdiction.  Alabama state courts shall have exclusive subject matter jurisdiction for all actions brought under this statute.
 Which of the following is most accurate?
 
 A. Section 4(a) is valid.  Just as Congress can create exclusive federal subject matter jurisdiction for federal causes of action, so can state legislatures create exclusive state subject matter jurisdiction for state causes of action.
 
Wrong.  This is just false. See answer C.  8 of you chose this answer anyway.

 B. Section 4(a) should be applied by a federal court sitting in diversity before whom an action under the Alabama medical malpractice statute is brought, because the requirement of state court subject matter jurisdiction is “bound up with [state] rights and obligations in such a way that its application in . . . federal court is required.” Byrd v. Blue Ridge Rural Electric Corp.
 
Wrong.  Section 4(a) is contrary to the U.S. Constitution and 1332.  See answer C.  Therefore it does not matter whether 4(a) is bound up with state substantive rights – federal law must be used.  5 of you chose this anyway.

 C. Section 4(a) is invalid because it is in violation of Art. III, § 2 of the United States Constitution and 28 U.S.C. § 1332.

Correct.  Under Art. III, § 2, the United States has judicial power over diversity cases.  Congress has decided to let the federal courts exercise (part of) that power by enacting 1332.  A state legislature cannot divest federal courts of their constitutional powers over diversity cases by enacting a statute.  It is therefore invalid.  76 of you chose this.

 D. Section 4(a) is valid because
  1. applying a contrary federal rule would promote forum-shopping and the inequitable administration of the laws
  2. there is no countervailing federal interest in uniformity and
  3. Alabama is obviously interested in this rule applying in federal court.

Wrong.  See answer C.  7 of you chose this anyway.

 E. Section 4(a) is invalid because it would “abridge, enlarge or modify a substantive right.”
 
Wrong.  See answer C.  7 of you chose this anyway.

5. P (a citizen of New York) sues D (a citizen of Louisiana) under New Jersey negligence law in the Federal District Court for the District of New Jersey.  P’s suit asks for compensation for personal injuries due to a car accident between P and D that occurred in New Jersey in 1998.  D is provided with in-hand service of the summons and complaint at his office in New Orleans, Louisiana.  D fails to submit an answer or pre-answer motion and as a result a default judgment is entered for P.  Subsequently, D brings suit against P under New Jersey negligence law in New Jersey state court for the same accident between P and D.  P counterclaims against D under New Jersey negligence law for damages to his car as a result of the accident.  Which of the following is the most accurate?
 
 A. D will be allowed to bring his action in New Jersey state court only if New Jersey does not have a compulsory counterclaim rule.
 
Wrong.  The question of whether something is a compulsory counterclaim is determined by the law of the court where the action allegedly should have been brought, not where it was subsequently brought.  New Jersey law is irrelevant.  What is relevant is federal law, specifically R. 13.  26 of you chose this anyway.

 B. P will not be able to bring his counterclaim in New Jersey state court, because it was a compulsory counterclaim in the earlier action in federal court.

Wrong.  P’s counterclaim is barred because it is claim precluded, not because it was a compulsory counterclaim to the earlier action.  19 of you chose this anyway.

 C. Assuming that the service on D in the first suit was not valid under Louisiana or New Jersey law, D will be allowed to bring his claim in New Jersey state court because the judgment in the first suit was void.  D must be served at his “dwelling house or usual place of abode.”

Wrong.  Under R. 4(e)(2), in-hand service is fine, even if it is not at the defendant’s place of abode.   10 of you chose this anyway.

 D. Assume contributory negligence is an affirmative defense to negligence under New Jersey law.  If P introduces contributory negligence in his answer to D’s complaint, D will not succeed in his action in New Jersey state court.  P will be able to issue preclude D from relitigating his contributory negligence.

Wrong.  Default judgments do not have issue preclusive effect.  25 of you chose this anyway.

 E. D will not be precluded from bringing his action in New Jersey state court.  Under Fed. R. Civ. P. 13(a), “[a] pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim.”  Since D submitted no pleading in response to P’s complaint in federal court, R. 13(a) does not apply.

Correct.  This deals with an issue that we never addressed explicitly in class – namely whether a defendant who defaulted can be barred from bringing actions that concern the same transaction or occurrence as the default judgment.  I expected you to get this anyway for three reasons.  First of all, and most importantly, all of the other answers are wrong.  Secondly, the statutory argument that I have presented here that 13(a) does not apply to default judgments (which is the argument that has been accepted by the courts) is persuasive.  Thirdly it seems unfair to sanction D for not bringing up counterclaims in an action that he did not even show up for.  23 of you chose this answer.
 
6. P1, a citizen of New York, and P2, a citizen of Wisconsin, sue the D Corp. (hereinafter “D”), a fried chicken restaurant franchiser incorporated in Delaware with its principal place of business in New Jersey.  P1's and P2's suit is brought in Wisconsin state court.  P1 and P2 argue that, by requiring in its franchise agreements that franchisees buy breading and frying oil from D at above-market prices, D has violated New York and Wisconsin antitrust law.  P1 asks for $40,000 and P2 for $20,000 in damages due to past over-payments for breading and frying oil.  They also ask that the contracts that D has with each of them be altered to remove the purchasing requirements in the future.  The future value to P1 and to P2 of the removal of the purchasing requirements from their contracts is $40,000 each.  The cost of the removal of the requirements to D is $40,000 per contract.  D counterclaims against P1 and P2 under federal antitrust law, claiming that they are colluding with other franchisees to control the fried chicken franchisee market.  D’s federal antitrust action has exclusive federal subject matter jurisdiction.  Which of the following is most accurate?

 A. If P1 and P2 both agree, they may remove all the actions to federal court on the basis of the D’s federal counterclaim against them.

Wrong.  Federal counterclaims do not make an otherwise non-removable action removable.  6 of you chose this anyway.

 B. P1 and P2 cannot settle with D without judicial approval.

Wrong.  Judicial approval is required for settlement of class actions.  This is not a class action.  4 of you chose this anyway.

 C. D cannot remove to federal court because P2 is a citizen of Wisconsin.

Wrong.  The citizenship of defendants, not plaintiffs, is relevant for removability.  2 of you chose this anyway.

 D. D may remove to federal court on the ground that P1's suit satisfies 28 U.S.C. § 1332(a) and P2's claim has supplemental jurisdiction.  If D removes, his federal antitrust counterclaim may also be removed because it has both supplemental jurisdiction and federal question jurisdiction.
 
Correct.  P1's suit satisfies the amount in controversy requirement and therefore is a diversity case under 1332(a).  D’s counterclaim is removable as well because it has both supplemental jurisdiction and its own source of federal question jurisdiction.  The problem is P2's suit, which does not satisfy the amount in controversy requirement.  Does it has supplemental jurisdiction under 1367?  Some courts would say yes, following the explicit language of 1367(b), while others would say no.  This answer is nevertheless the most accurate because the other answers are wrong.  50 of you chose this.

 E. All the actions must be removed to federal court with or without D’s requesting removal, because D’s counterclaim has exclusive federal jurisdiction.

Wrong.  No such claim was ever made in class or in the readings.  Indeed, it was made clear that counterclaims cannot make an otherwise non-removable action removable.  Furthermore, if this answer were correct, a defendant could force removal simply by bringing a compulsory counterclaim that had exclusive federal subject matter jurisdiction.  In fact, what should happen if a defendant brings such a counterclaim is that the state court should dismiss it for lack of subject matter jurisdiction.  The defendant is then free to bring the action up in federal court later.  40 of you chose this anyway.

7. P sues D in New Jersey state court for $40,000 in damages under Utah battery law.  P’s suit concerns a brawl that occurred between P and D in Utah.  At the initiation of the suit, P has a 30-acre empty parcel of property owned by D worth $30,000 attached by the New Jersey state court.  D, a citizen of California, inherited the property from his great aunt several years before and has made 3 one-day trips to inspect the property since then.  Other than that, D has only driven through New Jersey a few times when taking trips to Pennsylvania from New York City.  D is provided with legally sufficient service.  In his answer, D admits liability but makes a motion to dismiss on the basis of a lack of jurisdiction over him.  The court denies D’s motion because it considers D’s owning property in New Jersey sufficient to establish jurisdiction over D.  The court then renders a judgment for P of $40,000.  Which of the following is most accurate?
 
 A. In the light of Shaffer v. Heitner, the New Jersey state court’s assertion of quasi in rem jurisdiction is in violation of the 14th Amendment.
 
Wrong.  This cannot be a quasi in rem action because the judgment was for more than the amount of the property attached.  Quasi in rem actions cannot be brought for more than the property establishing personal jurisdiction.  Therefore it must be an in personam action.  See answer C.  42 of you chose this anyway.

 B. The New Jersey state court’s assertion of quasi in rem jurisdiction is compatible with the 14th Amendment, even in the light of Shaffer v. Heitner.

Once again, this is not a quasi in rem action.  It is an in personam action.  See answers A and C.  42 of you chose this anyway.

 C. The New Jersey state court’s assertion of in personam jurisdiction is in keeping with the standard required under International Shoe.
 
Correct.  This is an in personam action because D’s entire liability is at issue, not merely the value of the property attached.  The standard for in personam actions (as well as quasi in rem actions, in the light of Shaffer) is Int’l Shoe.  Ownership of property is a strong Int’l Shoe connection, so it is most accurate to say that Int’l Shoe is satisfied, especially given the fact that the other answers are wrong.  Only 9 of you chose this.  (Nevertheless, the students who did better on the exam were more likely to choose it and those who did worse were less likely, so I have kept it despite the fact that so few got it right.)

 D. Because D admitted liability, D may not challenge the New Jersey court’s jurisdiction over him.
 
Wrong.  That’s not so.  Even if you admit liability, you can still challenge personal jurisdiction.  8 of you chose this anyway.

 E. The New Jersey state court cannot apply Utah state law if the source of jurisdiction over D is his property in New Jersey.

Wrong.  This is gibberish.  2 of you chose it anyway.
 

8. P, a citizen of Oklahoma, sues the D Corp. (hereinafter “D”), a New York corporation with its principal place of business in New York, in the Federal District Court for the Southern District of New York.  P’s suit is under New York law for breach of contract.  P’s house and belongings were destroyed in a tornado and P is seeking compensation for the loss under his insurance contract with D.  Although D has paid for P’s house, it has refused to pay for P’s belongings, because a clause in their contract states that if P subsequently contracts with any insurance company for coverage that overlaps with the coverage in his contract with D, D will no longer be responsible for the overlapping coverage.  D claims that P subsequently contracted with the X Corp. (hereinafter “X”), a New York corporation with its principal place of business in Connecticut, to cover any losses to P’s belongings as a result of a natural catastrophe.  X has argued that P did not contract with X after contracting with D.  P instead simply paid his yearly premium to X, which does not constitute a new contract.  Since, X believes, P’s contract with D was the later contract and since X’s contract with P also has a clause denying responsibility if there is a subsequent insurance contract for overlapping coverage, X has also refused to pay for P’s belongings.  Which of the following is most accurate?
 
 A. X is a necessary party.
 
Correct.  This is a tough case but it is probably true that X is a necessary party under R. 19(a).  75 of you chose this.

 B. P’s action against D is an impleader brought under R. 14(a).

Wrong.  Just because P is suing D under an insurance contract does not make P’s action an impleader.  P is not himself being sued so he can’t be impleading anyone.  1 of you chose this anyway.

 C. If it is determined in the suit between P and D that P’s contract with D was earlier than his contract with X, then X will be bound by that determination of the issue in a suit by P against X, because X could have easily intervened in the earlier action.

Wrong.  No one can ever be bound by issue preclusion if he was not a party to the earlier action, even if he could have easily intervened.  Those who chose this must have been thinking of Parklane, which says that a plaintiff who was not a party cannot issue preclude someone who was a party to the earlier action if the plaintiff in the second action could have easily intervened in the earlier action.  That’s a much different scenario.  15 chose this anyway.

 D. If it is determined in the suit between P and D that P’s contract with D was earlier than his contract with X, then X not will be bound by that determination of the issue in a suit by P against X, because X could not have easily intervened in the earlier action.  Had he intervened, he would have destroyed diversity.

Wrong.  First of all, X cannot be bound by issue preclusion no matter what.  See the answer to C.  Second, X could have intervened without destroying diversity since he would have intervened as a defendant.  11 chose this anyway.

 E. After P’s suit against D comes to judgment, P will be claim precluded from subsequently suing X, because X and D are in privity with one another.

Wrong.  There is no relationship of privity between X and D.  None of you chose this.
 

9. P, a citizen of California,  visits L's law offices to complain that he has been harmed by a $1 lighter he bought from a drugstore in Sacramento, California. Some time after purchasing the lighter, it flared up, causing second and some third degree burns to P's thumb and forefinger. It seems that in attempting to light the lighters one can easily reset the height of the flame to a dangerously high level. Although P's damages are small (only $20,000), L is aware of similar incidents occurring and considers P to be a possible named plaintiff for a class action against the D Corp., the manufacturer of the lighters. The lighters were sold throughout the country through three distributors.  The D Corp.’s distributor for the western states, X, provided warnings about the possibility of flareups on its packaging.  The D Corp.’s distributor for the southern states, Y, and for the northeast, Z, provided no instructions or warnings.  Around two thousand people from every state in the country have suffered harm from the flareups, although no one has been harmed to a greater extent than P. Although the D Corp. has over $100,000,000 in assets, its insurance coverage for tort judgments against it will not cover all of the potential plaintiffs’ claims against it and the D Corp. is unwilling to use any of its own assets to satisfy judgments against it.  The D Corp. is incorporated in Delaware and has its financial offices in Los Angeles, California, which is where the chief financial officer lives and works. Its sole business is the manufacture of lighters. The sole manufacturing plant for the lighters is in Allentown, Pennsylvania, which is where the lighters were designed.  The board of directors meet in Allentown and the Chief Executive Officer spends most of his time there.  L plans to bring suit under state negligence laws against D in the Federal District Court for the Eastern District of California, located in Sacramento. P will be the named plaintiff for a nationwide class that includes all those who bought and were harmed by the defective lighters. In addition to compensatory damages, L plans to ask for an injunction requiring the D Corp. to undertake an advertising campaign to inform those who bought the lighters of their dangers. Which of the following is the most likely?
 
 A. A nationwide class action with P as the named plaintiff would be certified as a 23(a) class action.

Wrong.  There is no such thing as a 23(a) class action.  23(a) is a requirement for any class action.  3 of you chose this anyway.

 B. A nationwide class action with P as the named plaintiff would be certified as a 23(b)(1)(A) class action.
 
Wrong.  Although it is possible that separate suits might lead to incompatible standards of conduct with respect to the injunctive relief requested, that does not justify class action treatment for the damages actions.  With respect to them the defendant cannot be subjected to incompatible standards of conduct so 23(b)(1)(A) would not work.  12 of you chose this anyway.

 C. A nationwide class action with P as the named plaintiff would be certified as a 23(b)(1)(B) class action.

Wrong.  This is not a limited fund class action, because the defendant has the assets to satisfy judgments in favor of all the potential plaintiffs.  The fact that its insurance is limited is irrelevant.  27 of you chose this anyway.

 D. A nationwide class action with P as the named plaintiff would be certified as a 23(b)(2) class action.

Wrong.  This type of class action is for discrimination cases asking for primarily injunctive relief.  This action is neither.  3 of you chose this anyway.

 E. A nationwide class action with P as the named plaintiff would not be certified.

Correct.  This is the best answer.  As in the Amchem case, it is very unlikely that this mass tort class action would succeed, given the different state laws applicable and the differing affirmative defenses that the defendant could bring against various plaintiffs.  59 of you chose this.

10. Using the same facts as in Question 9 and assuming that the nationwide class action can be brought under Rule 23, which of the following is the most accurate?
 
 A. According to the reasoning of Justice O’Conner’s opinion in Asahi, there would be no personal jurisdiction over the D Corp. because D’s product was not designed for the California market.

Wrong.  O’Connor never says this in Asahi.  The fact that the defendant chose a distributor for California would be enough for PJ as far as she is concerned.  5 chose this anyway.

 B. There is no venue under 28 U.S.C. § 1391(a)(1), because the D Corp. does not reside within the Eastern District of California.

Wrong.  The D Corp. does reside in the E.D. Cal. since it would be subject to PJ there if the district were a separate state.  It would be subject to PJ because it contracted to have a distributor deliver its lighters to the E.D. Cal.  Furthermore there is venue under 1391(a)(2).  16 chose this anyway.

 C. A nationwide class action does not have subject matter jurisdiction.  The D Corp. has its principal places of business, and thus citizenship, in California and Pennsylvania.  Since P is a citizen of California, the parties are not diverse.

Wrong.  A corporation has only one principal place of business, not two.  The D Corp’s would surely be Pennsylvania, where all of its manufacturing is located.  Indeed most of its “nerve center” is in Pennsylvania as well.  As for its state of citizenship on the basis of its place of incorporation, that is Delaware, not California.  26 of you chose this anyway.

 D. A nationwide class action has subject matter jurisdiction because those claims by members of the plaintiff class that do not satisfy the diversity statute will be supplemental to P’s claim against the D Corp.

Probably wrong, but I will give 3 points for this answer.  First of all, for P’s claim to provide supplemental jurisdiction, one has to accept the view, about which there is a circuit split, that 1367 abrogated Zahn.  Second P’s claim can provide supplemental jurisdiction only if it has its own source of subject matter jurisdiction.  P is only asking for $20,000, so that’s not enough to satisfy the amount in controversy requirement.  That means that we have to take into account the injunctive relief requested.  There are two possibilities here: 1) the injunctive relief cannot be aggregated because there is no common and undivided interest or 2) it can be aggregated.  If it can be aggregated (which is the likely answer, since there is no way injunctive relief can be provided to one member of the class without providing it to all) then each member of the plaintiff class satisfies the amount in controversy.  That would mean that supplemental jurisdiction is not needed and this answer is wrong.  Instead, answer E is correct.  If it cannot be aggregated, then that means that the value of the injunction has to be divided up between the members of the plaintiff class in some way to avoid violating Snyder v. Harris.  If so then there are two things that are possible: 1) divided up, the value of the injunction bumps all the members of the class above the jurisdictional minimum, in which case supplemental jurisdiction is not needed and this answer is wrong or 2) it bumps up P and some others but not all, in which case this answer would be correct.  39 of you chose this.

 E. A nationwide class action has subject matter jurisdiction, because the injunctive relief requested by the plaintiff class is a right in which the class has a common and undivided interest.

Correct.  See the answer to D.  This is the better answer because it does not rely on a controversial reading of 1367 and because aggregation of this injunctive relief is plausible in the light of Shields v. Thomas.  16 of you chose this.

11. P, a citizen of New York, sues D, a citizen of New York, in the Federal District Court for the Southern District of New York under 42 U.S.C. § 1983 (the federal statute allowing citizens to sue state actors for damages for violation of their civil rights) and under New York state battery law.  P argues that the 1983 action has federal question jurisdiction and that his state law battery action has supplemental jurisdiction.  P’s two actions concern a fight that P and D had in a bar in New York.  D is not, and was not alleged in P’s complaint to be, a state actor.  Before D submitted an answer, the district court sua sponte dismissed both of P’s actions without stating that the dismissal was without prejudice.  Subsequently P brought his New York state law battery action in New Jersey state court.  Which of the following would be the best reason that P’s action in state court would not be claim precluded?
 
 A. P’s New York state law battery action was dismissed on subject matter jurisdiction grounds, because the federal action to which the battery action was supplemental had been dismissed for failure to state a claim.  Under 28 U.S.C. § 1367(c)(3), a district court may decline to exercise supplemental jurisdiction when the district court has dismissed all claims over which it has original jurisdiction.

Wrong.  Assume that the state law battery action had been dismissed on subject matter jurisdiction grounds by the federal court.  P’s state law battery action would still be claim precluded because it concerned the same transaction as the 1983 action and the 1983 action was dismissed for failure to state a claim.  Since the federal court did not say its dismissal was without prejudice, it was with prejudice (see R. 41(b)) and thus all causes of action concerning the same transaction are claim precluded.  What is needed to avoid claim preclusion is a dismissal of both the 1983 and the state law battery actions on subject matter jurisdiction grounds and this answer does not provide that.  58 of you chose this anyway.

 B. Under New Jersey law of claim preclusion, the scope of a claim does not include different causes of action concerning the same transaction.

Wrong.  The relevant law for determining the claim preclusive effect of the federal judgment is federal law, not New Jersey law.  6 of you chose this anyway.

 C. The district court used the reasoning in Bell v. Hood to dismiss P’s 1983 action for lack of subject matter jurisdiction.

Correct.  This is the only possibility that will allow both the 1983 and the state law battery actions to be dismissed without prejudice.  Since the court did not say “without prejudice” then the only possible way that the 1983 action could have been dismissed without prejudice under R. 41(b) is if it was dismissed on jurisdictional grounds.  Bell v. Hood provides a plausible reason why this action could have been dismissed on subject matter jurisdiction grounds rather than for failure to state a claim.  If the 1983 action was dismissed on subject matter jurisdiction grounds then the state law battery action would have to be dismissed on subject matter jurisdiction grounds as well.  It could not have supplemental jurisdiction since there was no action with original federal jurisdiction that it could be supplemental to.  Only 9 chose this.  Nevertheless, those students who did better on the exam were more likely to choose this answer.

 D. Dismissals for failure to state a claim are not dismissals on the merits.

Wrong.  They can be, if the court does not say “without prejudice.”  See R. 41(b).  16 of you chose this anyway.

 E. P did not have a full and fair opportunity to litigate his claim.

Not the relevant criterion.  See R. 41(b).  14 chose this anyway.
 
12. The D Corp. (hereinafter “D”), which is incorporated in California, manufacturers travel kits in California and distributes them primarily to airports and bus stations in California and Nevada.  While traveling in California, P purchased a $4 travel kit manufactured and distributed by D.  While back home in D.C., P suffered harm from a faultily designed toothbrush from the travel kit.  During the time between P’s accident and P's decision to bring suit, D expanded its operations to Pennsylvania, where it opened up a manufacturing plant for travel kits.  The Pennsylvania kits are distributed in Pennsylvania, Delaware and New Jersey.  Which of the following is most accurate?  (Ignore state and D.C. long-arm statutes and state constitutions for the purpose of this question.)

 A. Assume that the president of D is in D.C. on a trip to explore the expansion of D’s operations there.  If P sued D in the Federal District Court for the Eastern District of Pennsylvania and D is served by serving D’s president in hand with process during his business trip in D.C., then a motion to dismiss for lack of personal jurisdiction by D should be denied.

Correct.  General personal jurisdiction over the D Corp. by a Pennsylvania court would be possible on the basis of the D Corp. having a factory in Pennsylvania.  The fact that the factory was established after the cause of action arose is irrelevant.  If the contact with the forum state is sufficient to give rise to general personal jurisdiction, the cause of action need not be related to the activities in the forum state.  Since a Pennsylvania state court would have personal jurisdiction, the federal court in Pennsylvania will as well under R. 4(k).  42 of you chose this.

 B. Assume that P chooses to sue D in the Federal District Court for the Eastern District of Pennsylvania.  A motion to dismiss for lack of personal jurisdiction by D should be granted, because the activities of D in Pennsylvania on the basis of which personal jurisdiction could be established occurred after P bought his travel kit.

Wrong.  See answer A.  13 of you chose this anyway.
 

 C. Assume that the president of D is in D.C. on a trip to explore the expansion of D’s operations there.  If P sued D in the Federal District Court for the District of the District of Columbia and D is served by serving D’s president in hand with process during his business trip there, then a motion to dismiss for lack of personal jurisdiction made by D would be denied, because of Burnham v. Superior Court.

Wrong.  Personal jurisdiction over a corporation cannot be accomplished simply through tagging an officer in the forum state, the way you can get PJ over an individual through tagging.  The corporation as a whole must have sufficient Int’l Shoe contacts with the state.  Therefore Burnham does not apply.  In this case the Int’l Shoe contacts are insufficient.  33 of you chose this anyway.

 D. Assume that P chooses to sue D in the Federal District Court for the District of the District of Columbia.  If D is served by serving D’s president in hand with process in Delaware, which is within 100 miles of the courthouse in D.C., then a motion to dismiss for lack of personal jurisdiction by D would be denied, provided that D has sufficient International Shoe contacts with the state of Delaware such that there would have been personal jurisdiction in Delaware if the suit had been brought in state court there.
 
Wrong.  The 100 mile bulge applies only to joinder of parties under Rules 14 and 19.  3 of you chose this anyway.

 E. Assume that P chooses to sue D in the Federal District Court for the District of the District of Columbia.  If D is served by serving D’s president in hand with process in Pennsylvania, a motion to dismiss for lack of personal jurisdiction by D would be denied, because it was foreseeable that D’s products would be taken to D.C.  They were, after all, sold to travelers in airports and bus stations.
 
Wrong.  Foreseeability that the product would end up in the forum state is insufficient to establish PJ in that state.  See Worldwide VW.  11 of you chose this anyway.

13. P sues D for negligence in the Federal District Court for the District of Wyoming in connection with an auto accident between three cars driven by P, D and Y.  P moves for and receives summary judgment against D concerning liability.  At trial P is awarded a verdict and judgment of $120,000 in damages.  Subsequently D brings a negligence action against Y for $1000 in automobile damage in connection with the same automobile accident.  D’s suit against Y is before a Wyoming small claims court.  The primary difference between the procedures before the Wyoming small claims court and those in a normal state or federal court is that no rules of evidence are used.  In his answer before the small claims court, Y argues contributory negligence and moves for summary judgment on the ground that D is issue precluded from relitigating his contributory negligence.  Which of the following is most accurate?
 
 A. The issue of D’s contributory negligence is not essential to a judgment in Y’s favor, since a judgment for Y could also result from a showing that Y was not negligent.  Therefore issue preclusion does not apply.

Wrong.  The essentiality requirement for issue preclusion concerns whether the issue was essential to the judgment in the issue precluding action, not whether it is essential to the judgment in the action where issue preclusion is being made use of.  16 of you chose this anyway.

 B. If there is a finding that Y could have easily intervened in the earlier action, then Y may not take advantage of issue preclusion against D.

Wrong.  No one can be issue precluded who was not a party to the earlier action (or in privity with a party) even if he could have easily intervened.  Those who chose this must have been thinking of Parklane, which says that a plaintiff who was not a party cannot issue preclude someone who was a party to the earlier action if the plaintiff in the second action could have easily intervened in the earlier action.  21 chose this anyway.

 C. Issue preclusion does not apply because the judgment for P in the earlier federal suit was not on the merits.
 
Wrong.  Summary judgment is a judgment on the merits.  7 chose this anyway.

 D. Because the evidentiary standards for proving D’s negligence are much easier in the Wyoming small claims court than they were in the earlier federal action, issue preclusion does not apply.

Wrong.  Under Parklane, if the evidentiary standards were easier in the earlier judgment, then that is a reason not to apply issue preclusion, but here they were harder.  5 chose this anyway.

 E. Y may issue preclude D from relitigating his contributory negligence.
 
Correct.  This is an appropriate case of issue preclusion.  53 chose this.

14. P, a citizen of New York, sued D, a citizen of Oregon, for breach of contract under Oregon law in the Federal District Court for the District of Oregon, which is within the 9th Circuit.  P asked for damages as a result of D’s refusal to pay P the $400,000 D promised in exchange for 1,000 shares of X Corp. stock.  In addition to refusing to pay the $400,000, D also refused to accept the X Corp. stock from P.  Because the share price of the X Corp. fell $80/share before P could find an alternative buyer, P asked for $80,000 in damages from D.  In his answer, D introduced the affirmative defense of fraud under Oregon law, arguing that P misrepresented the future income of the X Corp.  In particular, D alleges that P claimed that the companies that had outstanding contracts with the X Corp. were “financially sound” and thus able to meet their contractual obligations to the X Corp.  In fact, P has a letter from the president of the X Corp. written at the time P and D contracted to buy the shares, which states that “an unusually high number of the obligations due the X Corp. are likely to remain unfulfilled.”  D mentions the letter in his answer.  Which of the following is most accurate?
 
 A. D’s affirmative defense is actually a compulsory counterclaim.

Wrong.  It is not a compulsory counterclaim.  There is no evidence that D is asking for relief himself in addition to claiming that he has no obligation to provide the relief that P wants.  Indeed it is not clear what kind of relief D would want.  D hasn’t paid P any money.  17 chose this anyway.

 B. Fed. R. Civ. P. 9(b) does not apply to D’s allegations of fraud, because they are in the form of an affirmative defense.
 
Wrong.  Rule 9(b) applies to affirmative defenses as much as it does to complaints.  9 chose this anyway.

 C. In the 9th Circuit, the letter would be sufficient to satisfy Rule 9(b)’s requirements to provide evidence of the falsity of D’s statement.  The letter would not, however, be sufficient in the 2nd Circuit.
 
Wrong.  There is no difference between the 9th Circuit and the 2nd Circuit concerning the pleadings standards for falsity under 9(b).  See Glenfed.  Their disagreement concerns scienter.  Furthermore, neither thinks that evidence of falsity is required at all.  All that is required is that falsity be pleaded with particularity.  22 chose this anyway.

 D. D’s allegations of fraud fail to satisfy R. 9(b), because the letter is inadmissible.  It is not relevant to P’s state of mind, because there is no allegation that P was aware of the letter.  And it is not evidence of the falsity of P’s statement, because it is inadmissible hearsay.

Wrong.  The question of admissibility or inadmissibility at trial is irrelevant for R. 9(b).  Rule 9(b) is a standard for pleading, not for the admissibility of evidence.  Those who chose this must have been confusing R. 9(b) with summary judgment. 16 chose this anyway.

 E. D may satisfy the requirements of Rule 9(b) without having any evidence of the falsity of P’s statement, although the absence of such evidence may lead him to be sanctioned under Rule 11.

Correct.  Rule 9(b) is a standard for pleading.  It makes no requirements of actually having any evidence at all.  When making allegations of fraud, one must plead falsity with particularity, but that does not mean that one has to plead evidence.  Even when one does plead evidence, one does not actually have to have it, although if one doesn’t one may have violated R. 11.  39 chose this.

15. D, a citizen of New York, made use graffiti art from a subway station in New York City in a poster that D produced and distributed to art stores throughout the eastern seaboard.  P, a citizen of New York and one of the graffiti artists whose work was used, brings suit against D in the Federal District Court for the Eastern District of Pennsylvania for infringement of his federally copyrighted materials.  Some of D’s posters were sold in the Philadelphia, Pennsylvania, in the Eastern District of Pennsylvania.  P joins a New York state-law cause of action concerning a brawl that occurred between P, D and X in a poster shop in New York City when P first learned of D’s use of his material.  X joins in the battery action as co-plaintiff.  X is also a citizen of New York and the other graffiti artist whose work D used.  D counterclaims against P and X for his damages in the brawl.  Do not assume any other contacts with Pennsylvania.  Which of the following is most accurate?
 
 A. P’s battery claim against D has supplemental jurisdiction.  But it is still possible that the district court could find that X’s battery claim against D does not have supplemental jurisdiction, depending upon whether it looks to the plain language of 28 U.S.C. § 1367(b) or looks to legislative history.

Wrong.  1367(b) concerns actions that are supplemental to diversity actions.  X’s battery claim against D is a case of an action that is supplemental to a federal question action (the copyright action).  Therefore 1367(b) does not apply.  All that is relevant is whether X’s battery action against D is part of the same constitutional case or controversy as P’s copyright claim against D.  If P’s battery claim against D is part of the same constitutional case or controversy, it’s hard to see how X’s battery claim against D isn’t as well.  24 chose this anyway.

 B. X will be claim precluded if, after the Pennsylvania actions come to a judgment on the merits, he subsequently sues P in New York state court for battery in connection with the brawl.
 
Wrong.  X will not be claim precluded to bring a battery claim against P.  X never sued P concerning any transaction and therefore was never required to join all causes of action concerning that transaction.  Claim preclusion does not force co-plaintiffs to bring cross-claims against each other.  19 chose this anyway.

 C. By counterclaiming, D has waived his defense of personal jurisdiction concerning P’s and X’s actions against him.

Wrong.  D’s claims against P and X are compulsory counterclaims to P and X’s battery claims against him.  Federal courts agree that a defendant’s compulsory counterclaims do not waive his defense of PJ concerning actions brought against him.  44 chose this anyway.

 D. If P’s battery action against D has supplemental jurisdiction, then there is also personal jurisdiction over D for the battery action.

Wrong.  This is just plain false.  Subject matter jurisdiction does not create personal jurisdiction.  6 chose this one anyway.

 E. Assume that P would have been claim precluded if he had not joined the battery action against D and had instead brought it in a subsequent suit.  If so then X will be claim precluded if he subsequently tries to bring a copyright infringement action D in a separate suit.

Correct.  If P would have been claim precluded if he had not brought the battery action against D, then that means that the battery and the copyright violation are part of the same “claim.”  If so, then when X brings his battery action against D, he must bring up the copyright violation, since it concerns the same “claim.”  If he doesn’t he will be claim precluded.  Only 10 chose this, but those students who did better on the exam were more likely to chose it.

16. P sues D in diversity in federal court under Maryland battery law.  18 days after service of the summons and complaint, D makes a motion for a more definite statement, because P has failed to allege damages clearly.  Two days later, the court grants the motion for a more definite statement.  A week after that, P responds to the motion for a more definite statement, serving D with an amended complaint.  P’s amendment of the complaint makes it clear that P cannot allege damages and that P’s citizenship is in fact the same as D’s.  D also realizes that P improperly served him with the original summons and complaint.  The next day, D seeks to amend his motion to dismiss, to include the defenses of failure to state a claim, lack of subject matter jurisdiction and insufficient service.  Which of the following is most accurate?
 
 A. D’s defense of insufficient service will fail, because the amendment does not relate back to the first motion.

Wrong.  Relation back concerns saving actions from statutes of limitations, not saving disfavored defenses from waiver.  See R. 15(c).  10 chose this anyway.

 B. D’s defense of lack of subject matter is not lost.  Even if D could not amend his original motion, D could bring up the defense of subject matter jurisdiction in his answer or after the pleading period. But the defense can be immediately entertained by the court because it was not available to D at the time of his original motion.

Wrong.  Even if the defense had been available at the time that D made his original motion, a federal court will still have to entertain it no matter when D brings it up.  See R. 12(h)(3).  47 chose this anyway.

 C. D’s defense of a failure to state a claim is not lost.  Even if D could not amend his original motion, D could bring up this defense in his answer or after the pleading period. But the defense can be immediately entertained by the court because it was not available to D at the time of his original motion.
 
Correct.  The only reason the court can hear the defense of failure to state a claim through an amendment of D’s earlier motion is because it was not available at the time the original motion was brought. See R. 12(g).  Otherwise D would have to wait to put the defense in his answer or in a motion during the post-pleading period.  30 chose this.

 D. D’s defense of lack of service is saved because D’s amendment of his earlier motion to dismiss is “as a matter of course.”

Wrong.  Amendments of pleadings only, not motions, can be as a matter of course.  See R. 15(a).  3 chose this anyway.

 E. D’s defense of lack of service is saved because a motion for a more definite statement cannot waive disfavored defenses.

Wrong.  A motion for a more definite statement can waive disfavored defenses.  See R. 12(g)-(h).  12 chose this anyway.
 
 

Part I. Section 2.
10 True/False or Yes/No Questions.
2 points each.
20 points total.

17. Under the Rules of Decision Act, Federal Rules of Civil Procedure may not “abridge, enlarge or modify any substantive right.”
 
 A. True.
 B. False.

False.  The Rules Enabling Act, not the Rule of Decision Act, concerns this limit on the Federal Rules.  31 chose true, 72 false.

18. Congress has less power to regulate the procedure of United States Courts of Appeals than it has to regulate the procedure of Federal District Courts.
 
 A. True.
 B. False.

False.  The power that Congress has to regulate the lower federal courts, which include both district courts and courts of appeals, is dependent upon its power to create and abolish them.  Since it is the same source of power, there is no reason that the extent of the power would be different.  On the other hand, Congress probably does have less power to regulate the procedure of the Supreme Court, which it has no power to abolish.  9 chose true, 93 false.
 
19. P has sued D in federal court for negligence concerning a car accident.  Right after the accident, D heard a witness at the scene recount to the police what she saw.  In an interrogatory served on D, P asks for the content of the witness’s statements to the police.  True or false: D must provide this content in response to the interrogatory.
 
 A. True.
 B. False.

True.  First of all, although D’s testimony is hearsay, that is not a reason to refuse to answer, since inadmissible evidence can still be discoverable.  Indeed it might even be admissible as impeachment evidence against the witness’s subsequent testimony.  Furthermore, what D heard is not work product, since it was not prepared in anticipation of litigation.  D was simply a witness.  47 said true, 55 false.

20. A Federal District Court’s power to create common-law procedural rules is less extensive in diversity cases than in federal question cases.
 
 A. True.
 B. False.
 
True.  As Erie cases like York and Byrd show, there are limits on a federal court’s ability to create common law procedural rules in diversity cases.  These limits have their source in the purposes behind the diversity statute.  The same limitations do not exist in connection with federal question cases.  62 chose true, 40 false.

21. There is currently a split in the federal courts of appeal about the interpretation of 28 U.S.C. § 1367(b).  Some courts of appeal hold that if the named plaintiff of a class action satisfies the requirements for diversity jurisdiction,1367(b) allows federal courts to provide supplemental jurisdiction to the other members of the plaintiff class, irrespective of whether they satisfy the requirements for diversity.  Other courts of appeals hold that such a reading of 1367(b) extends supplemental jurisdiction beyond the scope of the “case or controversy” requirement in Article III, § 2 of the United States Constitution.
 
 A. True.
 B. False.

False.  The disagreement over 1367(b) concerns whether one should look to the plain language of a statute or congressional intent.  Neither side claims that their reading of 1367(b) is demanded by the case or controversy requirement.  36 chose true, 66 false.

22. Pendent party jurisdiction in federal question cases was made allowable with the enactment of 28 U.S.C. § 1367.
 
 A. True.
 B. False.
 
True.  1367 abrogated Aldinger.  39 said true, 63 false.

23. Assume D and X acted in concert in order to beat up P.  Assume further that P sues D for the entirety of P’s damages.  If so, then D will lose his right to receive contribution from X unless he joins X to P’s suit against D through an impleader.  In federal court such an action would be under Fed. R. Civ. P. 14(a).
 
 A. True.
 B. False.

False.  D could bring a contribution action later in a separate suit.  There is no requirement that he join X through an impleader in the current suit.  46 said true, 56 false.

24. Assume Congress has passed a statute allowing any state-law case (including one between non-diverse parties) in which the defendant introduces a federal defense in his answer to be removable by the defendant to the Federal District Court for the District of the District of Columbia.  Yes or No, is the statute constitutional?
 
 A. Yes.
 B. No.

Yes, the statute would be constitutional.  Federal defenses are sufficient to create “arising under” subject matter jurisdiction under Article III.  Furthermore, if there is personal jurisdiction in any state court under the 14th Amendment, there would be personal jurisdiction in a United States court under the 5th Amendment wherever the federal court was located, even if all actions had to be brought in DC.  56 chose yes, 46 no.

25. P files an action against the chief financial officer of the D Corp. in the E.D. Va. for violation of federal law.  P serves the officer by having a process server leave a copy of the summons and complaint at the officer’s house in Pennsylvania with his 18-year-old son.  The officer specially appears in the E.D. Va. and makes a motion to dismiss the complaint for insufficiency of service of process.  Will he succeed? (Assume that neither Virginia nor Pennsylvania law permit such a form of service.)

 A. Yes.
 B. No.

No, he won't succeed.  Service is adequate under R. 4(e).  It is important to understand that the officer, not the corporation, was being sued here.  So 4(e), not 4(h) applies.  41 said yes; 61 said no.
 
26. P is suing D in federal court for violations of state antitrust law.  P should obtain documents from D through the use of a subpoena duces tecum.

 A. True.
 B. False.

False.  P should use a document request under R. 34.  21 said true, 81 said false.

END OF PART I OF THE EXAMINATION
Civil Procedure

Law 112

Professor Green

Final Exam (Fall 2000)

Part II
Essay Questions

DO NOT PUT YOUR NAME ON THIS EXAM!

Part II of this exam has 21 pages, including this cover sheet. It consists of 4 essay questions.

The total number of points for the entire exam is 200.  The total number of points for Part II is 100. The number of points for each essay question are indicated. Pace accordingly.

Use only the pages provided in this exam for your answers. Write only on the front of each page.
Remember to keep your answers brief, organized and to the point.
Write your examination number on each page!
DO NOT PUT YOUR NAME ON THE EXAM!

Commercial outlines, hornbooks, treatises etc. are not permitted in the examination. You may bring into the examination only the following materials:

1)  All materials assigned in this course:
Field, Kaplan & Clermont, Civil Procedure (7th ed. 1997)
Glannon, Civil Procedure: Examples and Explanations (3rd ed. 1997)
Federal Rules of Civil Procedure (West 2000) (or any other version of the Federal Rules and statutory materials used in the course, provided it contains only material available from the West book)
The set of Supplementary Materials that were available on the TWEN site.
 
2) Any outline made by you or by a study group within which you participated

3)  Your class notes.

If you need to make an assumption to answer a question, make your assumption explicit.  Don't make an assumption if it is not necessary to answer the question.

Essay Question 1. Consider the following replacement for Rule 11.  If a party successfully moves for summary judgment, the person against whom summary judgment is entered is required to pay the costs and attorney’s fees that the movant incurred during the suit.  What are the disadvantages and advantages of this rule compared to Rule 11? [20 points]

I was very disappointed by the answers to this question.  The proposed rule is an absolutely terrible replacement for Rule 11 for many reasons.  Keep in mind that you were supposed to talk about the benefits and disadvantages of the new rule compared to R. 11.  Many many of you did not do this.  You simply stated what the advantages and disadvantages of the rule were, without discussing whether the rule was better or worse compared to R. 11.

First, you got points for stating what the standards for R. 11 and for summary judgment were.  I was dismayed how many of you got these simple matters wrong. I will not state them here.  Go back to your notes and the lectures for what these standards are.

Second, the disadvantages of the new rule.  First of all, the rule is terribly underinclusive, in the sense that there are many people whom we want to be sanctioned and who would be sanctioned under R. 11 who would not be sanctioned under the new rule.  Here are some examples:

1.  Someone who makes an outright lie in his factual allegations in a pleading but who nevertheless does not lose on summary judgment.  Imagine a defendant who lies horribly in his answer but who does not get summary judgment against him because the plaintiff does not have enough evidence concerning each element of the cause of action that a reasonable jury would have to find in his favor.  Such a person or his attorney could be sanctioned under R. 11 but could not be sanctioned under the new rule.  Another example is a defendant who lies when introducing an affirmative defense in his answer.  Even if the affirmative defense fails when the lies come out, there still may not be summary judgment against the defendant because the plaintiff may not have presented enough information such that a reasonable jury would have to find in his favor concerning each element of the cause of action.  Another example is a plaintiff who lies in his complaint but who still has sufficient evidence concerning each element of the cause of action such that a reasonable jury could find in his favor.  All of these people should be sanctioned and could be under R. 11 but could not under the new rule.

2. A plaintiff who makes utterly frivolous legal arguments, not factual allegations, and so loses for failure to state a claim, not on summary judgment.  Such a person could be sanctioned under R. 11 but not under the new rule.  Another example is a defendant who introduces an utterly frivolous legal argument in an affirmative defense.  Just because a court rejects the defense does not mean the defendant is going to get summary judgment against him.

3. Someone who lies in a pleading concerning facts relevant to personal jurisdiction, subject matter jurisdiction, venue or service.  When the truth comes out, if the liar is a plaintiff, the action will be dismissed, rather than summary judgment being granted.  If the liar is a defendant, the action will simply proceed, rather than summary judgment for the plaintiff being granted.  In both cases the liar should be sanctioned and could be under R. 11 but could not be under the new rule.

Another problem is that since summary judgment for defendants is much easier than summary judgment for plaintiffs, defendants’ lies will be less likely to be sanctioned under the new rule than under R. 11.

In general most of you failed to notice that the rule was far too underinclusive.

More of you noticed that the rule was also overinclusive, that is, that it led people to be sanctioned whom we would not want to be sanctioned and who would not be under R. 11.  The most important example of this is someone who made factual allegations reasonably believing that the allegation will be supported by evidence in discovery although they did not currently have evidentiary support.  If such a person indicates this in his pleading, then he would not be subject to sanctions under R. 11 if his reasonable belief turns out to be false and he lost on summary judgment.  But he would be sanctioned under the new rule.  Since the person acted reasonably, it does not seem fair to subject him to sanctions.

There are a number of other smaller disadvantages with the rule, for example that it does not allow sanctions greater than attorney’s fees, that it does not allow for judicial discretion, and that it does not allow attorneys to be sanctioned, only parties.

What are the benefits of the new rule compared to R. 11?  If you don’t like the 21-day safe harbor, then the fact that the new rule has no such harbor would appear to be a benefit.  (However, a party who thought he would lose on summary judgment could avoid sanctions by voluntarily dismissing the case, which is very similar to there being a safe harbor.)

Of course the rule discourages frivolous suits, but the question is whether it does so better than R. 11.  Given the underinclusiveness of the rule, that does not seem clear.

Essay Question 2. In response to a flood of malpractice litigation, the state of Colorado passed the Certificate of Review Statute, requiring anyone suing a licensed professional for malpractice to provide, with the complaint filed, a certificate stating that an expert in the licensed professional’s area of practice has examined the claim and has determined that it has substantial justification.  P (a citizen of New York) sues D (a citizen of Colorado) in the Federal District Court for the District of Colorado for medical malpractice under New York law.  P’s suit concerns an operation that D performed upon P in New York City.  P is asking for $80,000.  P does not filed a Certificate of Review with her complaint.  In his answer, D asks that the action be dismissed for failure to file a Certificate of Review.  What result and why? [30 points]

This was a fairly straightforward Erie question.  People who answered this question fell into one of four categories:

1. Some answered the question properly, treating this as a case of conflict between a federal common law procedural rule (not requiring certificates) and a state statute (requiring certificates).  Erie analysis as applied to federal procedural common law was appropriate.

2. Some treated this case as if the state statute were in conflict with a Federal Rule of Civil Procedure.  Some said Rule 8(a), some said Rule 11, some said Rule 4 (which is clearly irrelevant since it concerns service, not filing), some left it unclear exactly what federal rule was at issue.  If there really were a federal rule in conflict with the state statute, than the analysis would be the fairly simple one spelled out in Hanna.  All that would be at issue would be whether the rule was within Congress’s power to regulate the procedure of federal courts (that is, whether it was arguably procedural) and whether it satisfied the Rules Enabling Act.  Keep in mind, however, that for this analysis to apply, there must be a direct conflict between the federal rule and the state statute.  See Walker.  That is hardly the case here.  None of these rules explicitly forbid the submission of a certificate when filing the complaint.  Indeed, if they did then we would have to revisit Woods and Cohen, both of which decided that a state-law  requirement for bringing suit applied in diversity cases.  However, those who undertook the Hanna analysis properly did not do that poorly on this question.

3. Some simply muddled all the Erie tests together, without making it clear whether this was a question of federal procedural common law, a Federal Rule of Civil Procedure, or a federal statute.  Those who did this did very poorly.  You had to make it clear what analysis applied and why.

4. Some people improperly treated this case as if it were solved by Klaxon.  Thus they said that under Klaxon, a federal court sitting in diversity in Colorado must make the choice of law decisions that a Colorado state court would.  They then said one of two things.  Some said that New York law should apply and thus that the certificate statute would not apply.  This is false.  Under most states’ choice of law rules, the certificate statute would be considered procedural and thus forum law would apply.  Thus, a Colorado state court would apply the Colorado certificate statute even though the substantive law applied would be New York law.  Indeed, the question itself makes this clear, insofar as the certificate statute says that anyone suing a licensed professional for malpractice must provide the certificate – without making any exception for those who sue under another state’s law.  On the other hand, some said that under Colorado choice of law rules Colorado law would apply.  They then took that to answer the question of whether a federal court sitting in diversity should apply the Colorado certificate statute.  It doesn’t.  Whether a federal court sitting in diversity should apply the Colorado certificate statute must be answered by undertaking proper Erie analysis.  Klaxon is irrelevant to this analysis.  Klaxon only provides answers to questions of what choice of law rules a federal court should use when making a decision between various states’ laws.  Klaxon decided that federal courts could not make up their own federal common law of choice of law in such circumstances, but should rely on the common law of choice of law of the state where the federal court is sitting.  The Erie situation we are facing here is between a federal common law procedural rule not requiring certificates and a state statute requiring certificates.

Let me now say a bit more about the proper Erie analysis that should be applied in this case – that is, analysis under which the state statute is seen as conflicting with federal procedural common law.  The first issue, as spelled out in Byrd, is whether the state procedural statute at issue is so tied up with state substantive rights that to apply federal procedural common law would be tantamount to applying federal substantive common law, in violation of the constitutional aspect of the Erie case.  That does not seem to be the case here.  The paradigm example of such a violation is a federal court using its own rules concerning who has the burden of showing contributory negligence.  That would arguably make a difference to people’s activities when they make a decision about how much care they should take when confronting someone who was negligent.  It is less easy to see how the presence or absence of the certificate statute would make a difference to how professionals behave (although an argument could be given that it would).

Assuming that the constitutional question has been set aside, the next issue is the statutory question of whether the application of federal procedural common law contrary to the state statute would violate the purposes of the diversity statute.  Under Hanna, the first question to ask is whether different rules in federal and state court would lead to forum shopping and the inequitable administration of the laws.  It would most certainly lead to forum shopping.  Why sue in state court, where you have to find an expert who will back up your claim before even filing suit, when you can avoid that requirement by going to federal court?  It is less likely that the difference would lead to the inequitable administration of the laws.

The next question is whether there are any countervailing interests in favor of federal uniformity.  Certainly nothing as clear as in the Byrd case.  It does not appear that the fact that such a certificate must be filed in a diversity malpractice case and not in a federal question case is that disruptive to the federal procedural system.

The most interesting question is whether the state of Colorado is interested in its statute applying in federal court.  See Szantay.  If the statute exists in order to protect professionals from frivolous suits, then the state of Colorado would want it to apply in federal court, and the Erie analysis would tilt in favor of applying state law.  If the statute exists in order to protect Colorado state courts from frivolous suits, then the state of Colorado would not care whether the rule applied in federal court or not, and the Erie analysis would tilt in favor of applying federal law.

Essay Question 3.

Consider the following scenario.  P (a citizen of New York) sues D (a citizen of New York) for violation of federal antitrust law.  P’s suit concerns D’s alleged attempt to control the market for dry cleaning in New York City.  Assume that the relevant federal antitrust statute gives claims brought under the statute exclusive federal subject matter jurisdiction.  Assume further that the statute has a provision allowing for nationwide service of process, that is, allowing federal district courts to assert personal jurisdiction over defendants for claims brought under the statute whenever such jurisdiction satisfies Fifth Amendment due process.  P chooses to bring his suit in the Federal District Court for the District of Utah.  He joins to this federal antitrust claim a New York state-law antitrust claim against D.   D makes a motion to dismiss the state-law claim for lack of personal jurisdiction.

There is currently disagreement among the federal courts (and among commentators) concerning whether D's motion should succeed.  Some argue that it should and some that it shouldn’t.  What arguments are there for and against D’s motion? [20 points]
 

This question concerns what is known as pendent personal jurisdiction.  If a statute grants a federal court personal jurisdiction over a defendant concerning a federal cause of action up to the limit of the fifth amendment, should personal jurisdiction also be granted over the defendant concerning state law causes of action that are supplemental (according to 1367) to the federal cause of action?  Although we never discussed this issue, we discussed everything that you need to know in order to discuss it.  It should be noted that the example I provided here was radically simplified compared to the examples that actually occur in the federal courts.

The question can be divided into three parts.  First of all, is pendent personal jurisdiction allowed under the constitution?  Second, is pendent personal jurisdiction statutorily allowed?  Third, is pendent personal jurisdiction pragmatically a good idea?

The first question can be answered easily.  Of course pendent personal jurisdiction is allowed under the constitution.  Federal courts’ personal jurisdictional scope under the constitution is determined by the fifth amendment.  All that is required is minimal contacts with the United States.  That is clearly satisfied here with respect to the state law cause of action, just as it is satisfied with respect to the federal cause of action.  How well you did on this question fundamentally depended on whether you understood this point or not.  Many many of you said that personal jurisdiction over the state law cause of action was a violation of due process.  You tended to cite cases involving the application of the fourteenth amendment to state courts’ personal jurisdictional scope.  These were irrelevant.

The third question is fairly easy to answer as well.  Since the federal antitrust action is proceeding in Utah anyway, it is efficient to allow the state law cause of action to proceed as well.  It is hard to see how the defendant will be disadvantaged by pendent personal jurisdiction, since he is already in Utah litigating these events anyway.  Of course, there are plenty of inefficiencies concerning the litigation of New York events in Utah.  It is for this reason that there would not be venue for the state law cause of action, as many of you noted.  But those inefficiencies exist whether or not there is pendent personal jurisdiction, since we are already assuming that the federal cause of action is being litigated in Utah.

There is a legitimate worry of forum shopping however.  The plaintiff is likely to choose a state in order to take advantage of its choice of law rules with respect to his supplemental state law claim.

It is the second question that is the difficult one.  There are two statutes that suggest that pendent personal jurisdiction should be allowed.  The first is the nationwide service of process statute in the federal antitrust law itself.  Since personal jurisdiction over federal antitrust claims is being allowed in any federal court in the United States, it makes sense that personal jurisdiction would be allowed for any state law claims that concern the same events.  This reading is reinforced by the supplemental jurisdiction statute, which provides federal subject matter jurisdiction for these pendent state law claims.  If 1367 provides these state law claims with subject matter jurisdiction in the federal courts, it makes sense that they should be provided with personal jurisdiction as well.

What argues against pendent personal jurisdiction is Fed. R. Civ. P. 4(k)(1)(A), which allows personal jurisdiction over a defendant in federal court only if a state court where the federal court is located would have had personal jurisdiction over the defendant.  One could argue however that this is a case where Rule 4(k)(1)(D) applies (just as it clearly applies with respect to the federal cause of action) – personal jurisdiction is allowed for the state law cause of action because it is authorized by a statute of the United States, namely the antitrust statute that provides nationwide service of process.

What you decided as far as the statutory inquiry was concerned did not matter as much as your recognition of the competing considerations involved.  But what was most important is that you recognized that pendent personal jurisdiction was constitutionally allowable under the fifth amendment.

Essay Question 4.

Assess the following scenario: P is suing D for negligence in federal court concerning a car accident between P and D.  An insurance claims adjuster for D measured the tire skid marks on the road after the accident.  The police report also has a measurement of the marks, but P thinks the police measured them improperly and the report underestimates their length.  In an interrogatory served by P on D, D is asked what the length of the skid marks were.  In his response, D gives the measurements in the police report.  During a deposition of D, D is asked by P’s lawyer whether D knows of any other measurements of the marks.  D has heard from his lawyer that the insurance adjuster also measured the marks and came up with different measurements from those in the police report.  D’s lawyer tells him not to answer the question.  D refuses to answer.  Subsequently, P’s lawyer finds out about the insurance adjuster’s measurements through someone who was on the site at the same time as the adjuster.  P’s lawyer deposes the adjuster and asks him two questions, “What was the length of the skid marks at the scene of the accident?” and “What were your measurements of the skid marks at the scene of the accident?” D’s lawyer tells the adjuster not to answer either question.  The adjuster refuses to answer. Who acted correctly and why?  [20 points]
 

Most people figured out that this question was primarily about the work-product privilege.  But most of you were not sensitive to the details of the question.  The question was an attempt to get you to tease out the distinction between work product, which is privileged, and facts, which are not privileged.  Unfortunately, most of you didn’t do so.

Let’s start with D’s response to the interrogatory.  Was D acting correctly when giving the measurements of the police report in response to the question of what the length of the skid marks was?  Only if D actually believed that the police report was correct.  Keep in mind that D’s responses to the interrogatories are under oath.  D cannot give the police report as a response if he does not believe it to be true.  So we have to assume that, unlike the otherwise similar Rackers v. Siegfried case, the defendant in this case does not admit that the police report is inaccurate.

Next, let’s look at D’s response to the deposition.  Many of you said that D was correct in not responding, because the material requested was work product.  This is wrong.  Information concerning the existence and location of work product is factual matter not itself protected by the work product privilege.  Only the content of the work product is protected.  P was not asking for this content.  Therefore, D acted improperly in not responding.  Furthermore, the fact that D got this information from his attorney does not mean that it is protected by the attorney client privilege.  Only confidential communications are protected, and P was not asking for the communications, only the underlying facts.  Facts are not protected by the attorney client privilege.

Now let’s look at the insurance adjuster’s responses.  One interesting question that was noted by some of you is the question of whether D can control the insurance adjuster’s responses, such that, if the material requested is indeed work product, D can force the adjuster not to divulge the material.  The adjuster would very likely be considered the agent of D, and therefore he would be required to assert D’s privilege, if it does indeed exist.

Most of you took no notice of the difference between the two questions asked of the adjuster.  The first question asked what the length of the skid marks was.  This is a question of fact.  For this reason, it is fair to say that it is not subject to the work product privilege.  Of course, if the adjuster thought that his measurements were wrong and that the police report was right, as D seems to believe, then he just has to give over the measurements of the police report, not his own measurements.  But it is unlikely that the adjuster distrusts his own measurements.  Therefore, this appears to be a way for P to get the information he wants.  At the very least, I expected you to consider this possibility.

The second question asks for the adjuster’s measurements concerning the skid marks.  This does seem to be the request for work product material.  Some of you were unsure whether the adjuster should be considered D’s representative or not.  Since you were assigned the Rackers case, where an adjuster was considered to be a party’s representative, you should have known the answer to this question.  It also seems fair to say that the measurements were created in anticipation of litigation.  Therefore they are work product, but not under Fed. R. Civ. P. 26(b)(3), which provides protection to documents and tangible things.  The Hickman case itself has to be relied upon to provide protection to this information.

Of course, just because the material is work product does not mean that it can’t be obtained, provided that P shows substantial need and the inability without undue hardship to obtain the substantial equivalent of the materials by other means.  As in the Rackers case, it seems likely that P will be able to make such a showing, since there is a dispute about whose measurements are correct, the adjuster’s or the police’s.  Some of you attempted to argue that the adjuster was a testifying expert, and therefore the measurements would be subject to disclosure obligations under R. 26(a)(2). I didn’t see any reason to assume that he was an expert, much less a testifying one.