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.

MICHAEL STEVEN GREEN

CIVIL PROCEDURE

Law 102

Section 3

FALL 2006

December 6, 2006

 Four Hours

This examination consists of 18 pages, including this cover sheet.
 
TIME:  You have Four Hours for this exam. I have indicated how much time should be devoted to each question in order to pace properly. Try your best to finish the exam.
 
SCORING: The total number of points for the exam is 200.
Part I consists of 16 multiple-choice questions, each of which is worth 5 points. The total number of points for Part I is 80. Use the scantron card for the multiple choice questions.
Part II consists of 5 essay questions. The total number of points for Part II is 120. Write the essays in bluebooks or type your answers.
 
WHAT YOU MAY USE IN THE EXAM:
Commercial outlines, hornbooks, treatises etc. are not permitted in the examination. You may have with you in the examination only the following:
1)  All materials assigned in this course:
Field, Kaplan & Clermont, Civil Procedure (8th ed.)
Glannon, Civil Procedure: Examples and Explanations (5th ed.)
Federal Rules of Civil Procedure (West) (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)
Material on the website for the course.
2) Any outline made by you or by a study group within which you participated.
3) Your class notes.
Use of the Web is prohibited.
 
NOTES:
Should you feel ill or panicky in anyway, please immediately see Dean Jackson in room 107
The entire examination must be returned.

16 Multiple Choice Questions

(5 points – 6 minutes – each)

(80 points – 96 minutes – total)

Answers must be put on the scantron cards!


1.    P files a complaint against the D Corp. and its President, X, in the Federal District Court for the Southern District of New York. P’s suit is for violation of federal securities laws. Four days later P has a process server deliver a copy of a summons and the complaint in hand to X while he is at his office in Philadelphia, Pennsylvania. Both the D Corp. and X make motions to dismiss for insufficient service. Which of the following is most accurate?

a.     The D Corp.’s motion should succeed, but not X’s.

Wrong. See answer c. (7 of you chose this answer.)

b.     X’s motion should succeed, but not the D Corp.’s

Wrong. See answer c. (2 of you chose this answer.)

c.     Neither the D Corp.’s nor X’s motion should succeed.

Correct. Service on X is correct, because FRCP 4(e) is satisfied. According to 4(e)(2), “service upon an individual … may be effected in any judicial district of the United States … by delivering a copy of the summons and of the complaint to the individual personally.” Service on the D Corp. is correct, because FRCP 4(h) is satisfied. According to 4(h)(1), “service upon a domestic or foreign corporation … shall be effected … by delivering a copy of the summons and of the complaint to an officer, a managing or general agent.” The President of D Corp. surely fits this description. (48 of you chose this answer.)

d.     One cannot know whether the D Corp.’s or X’s motion should succeed without knowing New York law governing service.

Wrong. It is true that under FRCP 4(e)(1), service on individuals may be effected “pursuant to the law of the state in which the district court is located, or in which service is effected.” So if New York law on service (the law of the state where the district court is located) had been satisfied, then service on X would be OK. But that is only optional. Even if state law standards are not satisfied, service will be OK if the standard in 4(e)(2) is satisfied, which it is here. (See answer c.) So you don’t need to know state law on service to know whether service on X is OK. The same point applies to service on the D Corp. Rule 4(h)(1) permits service on a corporation “in a judicial district of the United States in the manner prescribed for individuals by subdivision (e)(1)” (that is, “pursuant to the law of the state in which the district court is located, or in which service is effected”), but it does not require it. Incidentally, if you did think (wrongly) that you needed to know state law service rules to know whether service was adequate, you should have thought that you needed to know both New York and Pennsylvania rules, since Rule 4 refers to “the law of the state in which the district court is located [New York], or in which service is effected [Pennsylvania].” (2 of you chose this answer.)

                  e.    One cannot know whether the D Corp.’s or X’s motion should succeed without knowing New York and Pennsylvania law governing service.

Wrong. See d for why. (11 of you chose this.)

2              P, a citizen of Ohio, files a complaint in the Federal District Court for the Eastern District of Michigan against General Motors (a citizen of Michigan and Delaware) and Ford (a citizen of Michigan and Delaware) on behalf of a class of 100 million American urban dwellers, alleging that the defendants violated the Sherman Antitrust Act (a federal statute) and Michigan state antitrust law by conspiring to restrain the development of automobile air pollution mechanisms, thereby polluting the atmosphere of North America and causing the plaintiff class damages of $100 billion dollars (i.e. $1000 for each member of the plaintiff class). The defendants are properly served. Which of the following is most accurate?

a.     The Michigan state antitrust actions should be dismissed for lack of federal subject matter jurisdiction, since aggregation of plaintiffs’ claims is not allowed to meet the jurisdictional minimum. (Ignore the recently-enacted jurisdictional provisions of the Class Action Fairness Act for this answer.)

Wrong. Aggregation is irrelevant, because meeting the jurisdictional minimum for diversity is unnecessary. The Michigan state antitrust actions would all have supplemental jurisdiction, since they would all be part of the same constitutional case or controversy as the Sherman Act actions, which have federal question jurisdiction. (25 of you chose this.)

b.     Both the federal and the state antitrust actions should be dismissed for lack of federal subject matter jurisdiction, since aggregation of plaintiffs’ claims is not allowed to meet the jurisdictional minimum. (Ignore the recently-enacted jurisdictional provisions of the Class Action Fairness Act for this answer.)

Wrong. Aggregation is irrelevant, because meeting the jurisdictional minimum for diversity is unnecessary. The Sherman Act actions all have federal question jurisdiction. And the Michigan state antitrust actions all have supplemental jurisdiction. (See a.) (14 of you chose this.)

c.     If P has offered no evidentiary support of his factual allegations of an antitrust conspiracy, his complaint should be dismissed for failure to state a claim.

Wrong. This is gibberish. Dismissal for failure to state a claim is justified when the plaintiff’s allegations fail to assert any violation of the law. Evidentiary support is irrelevant. (4 of you chose this.)

d.     P’s complaint should be dismissed for failure to satisfy the pleading requirements in Rule 9(b).

Wrong. Rule 9(b) applies to allegations of fraud and mistake. No allegations of fraud or mistake have been made.

                e.     P’s Sherman Act action should be dismissed for failure to state a claim, since conspiracy to restrain the development of automobile air pollution mechanisms is not restraint of trade of the sort encompassed by the Sherman Act.

Correct. This is the best answer. If indeed the Sherman Act does not provide relief for conspiracy to restrain the development of air pollution mechanisms, then dismissal for failure to state a claim would be appropriate. (Only 22 of you chose this. Nevertheless, those who chose this were more likely to do well on the rest of the exam than those who chose any other answer.)



3.            P, a citizen of New York, files a complaint against D, a police officer and citizen of New Jersey, in the federal District Court for the District of New Jersey. P alleges that she is entitled to damages under 28 U.S.C. § 1983, because D violated her Fourth Amendment rights by searching her apartment without a warrant when consent was provided by her roommate. Although P’s lawyer, X, signed P’s complaint, the Fourth Amendment argument was P’s idea. <> 

D has a process server serve a motion for Rule 11 sanctions in hand on P’s lawyer. 25 days later D files the motion with the court. D argues that P’s claim of a Fourth Amendment violation is a frivolous legal contention in violation of Fed. R. Civ. P. 11(b)(2). Assume that the Supreme Court decided, in U.S. v. Matlock, 415 U.S. 164 (1974), that searches of the sort undertaken by D are legal under the Fourth Amendment. Assume further that no subsequent Supreme Court case has cast doubt upon the Matlock decision. Which of the following is most accurate?

a.     X, but not P, may be sanctioned monetarily under Rule 11.

Wrong, because we have as yet no reason to believe that Rule 11 was violated. (See c.) Still, this answer is partially right, because if it is true that Rule 11(b)(2) was violated (because there was no nonfrivolous argument that the Supreme Court should reverse Matlock), then it would be the case that P could not be sanctioned monetarily. Under Rule 11(c)(2)(A), “[m]onetary sanctions may not be awarded against a represented party for a violation of subdivision (b)(2).” (13 of you chose this.)

       I am going to give students who chose this credit. The problem is my use of the term “may.” I had to use “may” because, according to Rule 11(c), even if the standards in Rule 11(b) have been violated, a court “may … impose an appropriate sanction.” It is not obligated to sanction anyone. But the problem is that one could reasonably think that this “may” meant that sanctions on X were possible, if it was determined that Rule 11(b)(2) was violated. Another reason to give credit is that this was the only wrong answer on the entire exam that increased one’s likelihood of getting other answers right about as much as choosing the right answer for this question, which was c.

b.     Both P and X may be sanctioned monetarily under Rule 11.

Wrong. First of all, we have as yet no reason to believe that Rule 11 was violated. See c. Second, if 11(b)(2) was violated, only X could be sanctioned monetarily. See a. (7 of you chose this.)

c.     The fact that the Matlock decision is directly contrary to P’s claim of a Fourth Amendment violation does not, on its own, mean that P has made a frivolous legal contention under Fed. R. Civ. P. 11(b)(2).

Correct. Under Rule 11(b)(2), Rule 11 sanctions are appropriate in connection with legal contentions only if they are not “warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law.” P may simply have been arguing (nonfrivolously) that the Supreme Court should reverse Matlock. (47 of you chose this.)

d.     D’s motion is invalid. D must first file the motion with the court and then serve P.

Wrong. Service on P must precede filing with the court by 21 days. Under Rule 11(c)(1)(A), a motion for Rule 11 sanctions “shall be served as provided in Rule 5, but shall not be filed with or presented to the court unless, within 21 days after service of the motion (or such other period as the court may prescribe), the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected.” (2 of you chose this.) 

e.     D’s motion is invalid. A motion for Rule 11 sanctions cannot be served on P’s lawyer.

Wrong. Rule 5, not 4, applies to motions, including motions for Rule 11 sanctions. And, as we discussed in class (and was stated in the readings), Rule 5 allows for service on a party’s lawyer. (Only 1 of you chose this.)


4.            P sues D under federal antitrust law in the Federal District Court for the District of Connecticut. D defaults and P gets a judgment of $80,000. P then sues D in state court in Connecticut for violations of Connecticut state antitrust law. P’s state court suit concerns the same events as the earlier federal suit. D removes P’s action to federal court in Connecticut. The grounds for removal, D argues, is that the claim preclusive effect of the earlier federal judgment is a question of federal law. Which of the following is most accurate?

a.     The suit will be remanded. Under Semtek International Inc. v. Lockheed Martin Corp., the preclusive effect of the earlier federal judgment is governed by Connecticut state law, not federal law. However, P is probably not claim precluded under Connecticut state law, because D defaulted in the first judgment.

Wrong. The suit will indeed be remanded, but not for the reason stated here. First of all, the earlier federal judgment was for a federal question suit, not a diversity suit, so Erie and Semtek are irrelevant. Federal law on the preclusive effect of the judgment would clearly apply. Second, the question of whether federal or state preclusion law applies is really irrelevant anyway, since even though federal law applies, the case still must be remanded. Federal defenses are not grounds for removal and claim preclusion is an affirmative defense.

       This is also wrong because P is claim precluded. Default judgments in fact do have claim preclusive effect under the federal law of claim preclusion (and probably under Connecticut claim preclusion law too, although that law – as we have seen – is irrelevant). (6 of you chose this.)

b.     The suit will be remanded. Under Semtek International Inc. v. Lockheed Martin Corp., the preclusive effect of the earlier federal judgment is governed by Connecticut state law, not federal law. However, P is probably not claim precluded under Connecticut law, because there was no federal subject matter jurisdiction for P’s state law antitrust action in the first federal action.

Wrong. The suit will indeed be remanded, but not for the reason stated here. See answer a above. This is also wrong because there was federal subject matter jurisdiction for the state antitrust actions. They would have had supplemental jurisdiction in the first suit. So there is no reason to think that P is not claim precluded. (4 of you chose this.)

c.     Although the preclusive effect of the earlier federal judgment is governed by federal, not Connecticut, law, the suit will be remanded. Furthermore, according to federal claim preclusion law, P is claim precluded.

Correct. First of all, this is right in saying that federal claim preclusion law will apply. See answer a above. Second, it is right that the case should still be remanded. See answer a above. And finally, it is right that P should be claim precluded, since the state antitrust actions concerned the same transaction as the earlier federal antirust actions. (37 of you chose this.)

d.     Although the preclusive effect of the earlier federal judgment is governed by federal, not Connecticut, law, the suit will be remanded. However, P is not claim precluded under federal law, because D defaulted in the first judgment.

Wrong. First of all, this is right in saying that federal claim preclusion law will apply. See answer a above. Second, it is right that the case should still be remanded. See answer a above. But it is wrong in saying that P is not claim precluded. Default judgments have claim preclusive effect. (They do not, however, have issue preclusive effect.) (20 of you chose this.)

                        e.    Although the preclusive effect of the earlier federal judgment is governed by federal, not Connecticut, law, the suit will be remanded. However, P is not claim precluded under federal law, because there was no federal subject matter jurisdiction for P’s state law antitrust actions in the first federal action. <>

Wrong. First of all, this is right in saying that federal claim preclusion law will apply. See answer a above. Second, it is right that the case should still be remanded. See answer a above. But it is wrong in saying that P is not claim precluded. There would have been supplemental jurisdiction for the state antitrust actions in the earlier federal suit. (2 of you chose this.)



5.        P sues D in federal court for damages in a brawl in which P, D and X participated. Which of the following is most likely allowed under the joinder rules in the Federal Rules of Civil Procedure? (Do not consider personal jurisdiction, venue or subject matter jurisdiction in answering this question.)

a.     D joins an action against X for the damages D sustained from X in the brawl.

Wrong. D can join X (under Rule 14) only if X “is or may be liable to [D] for all or part of [P’s] claim against [D].” Here D is asking for his own damages from X. (10 of you chose this.)

b.     D seeks to have X joined as a necessary party.

Wrong. There is no reason to believe that any of the criteria in Rule 19(a) apply to X simply because he also took part in the brawl. (14 of you chose this.)

c.     D joins an action against Z for breach of an unrelated contract.

Wrong. Obviously not allowed under the joinder rules. (No one chose this.)

d.     P joins an action against Z for breach of an unrelated contract.

Wrong. Obviously not allowed under the joinder rules. (No one chose this.)

                        e.    P joins an action against D for breach of an unrelated contract.

Correct. Allowed under Rule 18(a). (45 of you chose this.)


6.            P (a citizen of New York) sues D (a citizen of New Jersey) for $80,000 under New York battery law in the Federal District Court for the Southern District of New York concerning a brawl between P and D that occurred in New York City. D joins his insurer I (a New York corporation with its principal place of business in New Jersey) under Rule 14. Which of the following is most accurate?

a.     There is federal subject matter jurisdiction for both P’s action against D and D’s action against I.

Correct. P’s suit against D is an adequate diversity suit under 28 USC 1332. And D’s impleader has supplemental jurisdiction under 28 USC 1367. (66 of you chose this – it was too easy a question.)

b.     D’s action against I should be dismissed for lack of federal subject matter jurisdiction. P’s action against D has federal subject matter jurisdiction and can remain in federal court.

Wrong. D’s impleader has supplemental jurisdiction under 28 USC 1367. (2 of you chose this.)

c.     D’s action against I should be dismissed for lack of federal subject matter jurisdiction. Furthermore, P’s action against D should also be dismissed for lack of federal subject matter jurisdiction, since it is “contaminated” by D’s action against I.

Wrong. D’s impleader has supplemental jurisdiction under 28 USC 1367. Furthermore, even if it didn’t, it would not contaminate P’s action against D. The contamination theory applies only to actions between plaintiffs’ actions against defendants. (2 of you chose this.)

d.     P’s action against D should be dismissed for lack of federal subject matter jurisdiction because P is an in-state plaintiff. Once P’s action is dismissed, D’s action against I will also have to be dismissed for lack of federal subject matter jurisdiction.

Wrong. It is true that in-state defendants can’t remove under diversity (see 28 USC 1441), but the same requirement does not apply to in-state plaintiffs suing under diversity (although arguably it should). So this is wrong. But it is right in saying that if P’s suit against D did not have diversity jurisdiction, then D’s action against I would have to be dismissed, since it would no longer have supplemental jurisdiction. (None of you chose this.)

e.     P’s action against D should be dismissed for lack of federal subject matter jurisdiction because P is an in-state plaintiff. Once P’s suit is dismissed, the court may at its discretion choose to retain or dismiss D’s action against I.

Wrong. First of all, in-state plaintiffs can sue under diversity (see d above). Second, if it were true that P’s suit against D did not have diversity jurisdiction, then D’s action against I would have to be dismissed, since it would no longer have supplemental jurisdiction. (None of you chose this.)


7.    P, a German citizen admitted for residency in the US and domiciled in New Jersey, sues D, a German citizen domiciled in Germany. The suit is under German battery law and concerns a brawl between P and D in Germany. P’s action is brought in the Federal District Court for the District of New Jersey. Which of the following is most accurate?

a.     Although according to 28 USC § 1332 there is federal subject matter jurisdiction for P’s action against D, it is nevertheless contrary to Article III of the United States Constitution for the federal court to entertain the suit.

Correct. This is the best answer. First of all, according to 28 USC 1332(a), “an alien admitted to the United States for permanent residence shall be deemed a citizen of the State in which such alien is domiciled.” That makes P a New Jerseyan as far as 1332 is concerned. What is more, 1332(a)(2) allows original jurisdiction for controversies between “citizens of a State and citizens or subjects of a foreign state.” P is a citizen of a state (New Jersey) and D is a citizen or subject of a foreign state. So there is federal subject matter jurisdiction for P’s suit against D under 1332. But the following is the (relevant) language of Article III, section 2 of the US Constitution:

The judicial Power shall extend … to Controversies … between a State and Citizens of another State;--between Citizens of different States,--between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.

Notice that the Constitution does not allow for federal jurisdiction for controversies between citizens or subjects of foreign states alone. And that looks like what P’s suit against D is. A German is suing a German, even if 1332 treats one of the Germans as a New Jerseyan. So it is arguable that allowing P’s suit against D into federal court is contrary to the Constitution. A recent court has suggested as much. Gall v. Topcall Int'l, A.G., 2005 WL 664502 (E.D. Pa. 2005). (38 of you chose this answer.)

b.     There is no federal subject matter jurisdiction under 28 USC § 1332 for P’s action against D because both the plaintiff and the defendant are citizens of the same country.

Wrong. There is no language in 1332 allowing for suits into federal court if the plaintiff and defendant are from different countries. Suits between aliens (whether of different countries or the same country) are not allowed under 1332. (2 of you chose this)

c.     There is personal jurisdiction over D under Fed. R. Civ. P. 4(k)(2).

Wrong. 4(k)(2) does not apply. First of all, this is not a claim “arising under federal law,” as 4(k)(2) requires. Second, it is not clear that this is a case where exercise of PJ “is consistent with the Constitution and laws of the United States.” There is no evidence of Int’l Shoe contacts between D and the US. (8 of you chose this.)

d.     There is no federal subject matter jurisdiction under 28 USC § 1332 for P’s action against D because the action is under German law.

Wrong. Diversity (or alienage) cases under 1332 need not be brought just under state law. They can also be brought under foreign law. I said this many times in class. (3 of you chose this.)

                         e.     There is no venue for P’s action against D in the District of New Jersey. <>Wrong. Under 28 USC 1391(d), an alien may be sued in any district. (19 of you chose this.)   


8.            P, a New York citizen, sues D, a California citizen, in the Federal District Court for the Northern District of California. The suit is under New York battery law and concerns a brawl in New York City involving P, D, and X (a California citizen). P is asking for $100,000 – which consists of the totality of damages that P sustained from D and X. D joins – under Fed. R. Civ. P. 14 – an action for contribution against X. D asks for $50,000 – which consists of X’s share of the damages suffered by P. P then joins – under Fed. R. Civ. P. 14 – a $50,000 action against X for the damages that X caused P in the brawl. Which of the following actions most accurate?

a.     P may not join an action against X, because P is already demanding that D pay all the damages caused by D and X as joint tortfeasors.

Wrong. It is true that, in the end, P cannot get double recovery. P cannot get the totality of the damages caused by D and X first from D and then from X. But that does not mean that P cannot join the two together in a suit and assert his right to the totality of damages from each. Under FRCP 20(a) two parties that are joint and severally liable may both be joined together. I never suggested anything contrary in class. (13 of you chose this.)

       By the way, you should have known that this answer was wrong. The next four answers (b-e) exhaust the possibilities concerning subject matter jurisdiction for the two actions, so one of these four has to be right.

b.     D’s action against X and P’s action against X should be dismissed for lack of federal subject matter jurisdiction.

Wrong. D’s action against X clearly has supplemental jurisdiction. It is part of the same constitutional case or controversy as P’s diversity action against D, and furthermore it does not fall under any of the exceptions to supplemental jurisdiction spelled out in 28 USC 1367(b).

       On the other hand, this answer is right in saying that P’s action against D should be dismissed for lack of federal subject matter jurisdiction. Although it is part of the same constitutional case or controversy as P’s action against D, it falls under one of the exceptions to supplemental jurisdiction spelled out in 28 USC 1367(b). It is a claim by a plaintiff against a person made a party under Rule 14, and exercising supplemental jurisdiction would be inconsistent with the jurisdictional requirements of section 1332 (because the jurisdictional minimum is not satisfied). (2 of you chose this.)

c.     Neither D’s action against X nor P’s action against X should be dismissed for lack of federal subject matter jurisdiction.

Wrong. P’s action against X should be dismissed. See b above. (11 of you chose this.)

d.     D’s action against X should be dismissed for lack of federal subject matter, but P’s action against X should not be dismissed for lack of federal subject matter jurisdiction.

Doubly wrong. D’s action against X should not be dismissed and P’s action against X should be dismissed. See b above. (2 of you chose this.)

                        e.    D’s action against X should not be dismissed for lack of federal subject matter, but P’s action against X should be dismissed for lack of federal subject matter jurisdiction.

Correct. See b above. (42 of you chose this.)



9.            P (a citizen of New York) files a complaint against D (a citizen of New Jersey) in the Federal District Court for the District of New Jersey on January 1, 2005. P’s complaint is for battery. P alleges that D, a New Jersey state trooper, committed battery in connection with D’s arrest of P in New Jersey on January 2, 2003. P serves D in hand while D is at his office in New Jersey. This manner of service is adequate under New Jersey law. D makes a pre-answer motion to dismiss on the grounds of inadequate service. This motion is denied by the court. D then serves an answer on P. The answer includes the defense that P’s action is outside New Jersey’s 2 year statute of limitations. Under New Jersey law, a statute of limitations is tolled on service. D’s answer also includes a counterclaim against P for breach of an unrelated contract. Which of the following is most accurate?

a.     D’s statute of limitations defense should fail. D waived this defense putting a permissive counterclaim in his answer.

Wrong. We talked about waiver of statutes of limitations in connection with counterclaims, but that concerned situations where P sued D within the statute of limitations, and D asserted a compulsory counterclaim outside the statute of limitations. We concluded that the plaintiff waived the right to challenge the compulsory counterclaim on statute of limitations grounds when he made the choice to sue the defendant. There was never a suggestion that the defendant waived the right to assert the defense of statute of limitations against the plaintiff simply by asserting a compulsory counterclaim (much less a permissive one) against the plaintiff. And I can’t think of an argument why that would be a reasonable rule. (3 of you chose this.)

b.     The district court was correct to deny D’s motion to dismiss for inadequate service. Because P’s action is under diversity, state service rules apply.

Wrong. There is a FRCP that governs service, namely Rule 4. Hanna makes it clear that this federal rule applies even in a diversity case. (9 of you chose this.)

c.     The district court was wrong to deny D’s motion to dismiss for inadequate service. According to Fed. R. Civ. P. 4(c)(2), “service may be effected by any person who is not a party and who is at least 18 years of age.”

This is the best answer, although this is a matter of some dispute. The question is whether 4(c)(2) determines who may serve for all cases in federal court or whether state law standards on who may serve are relevant for a plaintiff relying upon FRCP 4(e)(1), which states that service on individuals may be effected “pursuant to the law of the state in which the district court is located, or in which service is effected.” Although this is a matter of debate, this is the best answer, since all the others are clearly wrong. (39 of you chose this.)

d.     D’s statute of limitations defense should fail because it was waived by not being joined with P’s motion to dismiss for inadequate service.

Wrong. Statute of limitations is not one of the waivable defenses mentioned in FRCP 12(g)-(h). (7 of you chose this.)

                        e.    D’s statute of limitations defense should fail because, under federal law, a statute of limitations is tolled on filing, not service.

Wrong. Federal tolling law does not apply here. The tolling law that should be used is the law of the state where the federal court is located (that is, New Jersey). This Erie question was answered by Ragan. (12 of you chose this.)



10.            P (a citizen of New York) is suing D (a citizen of New Jersey) in the Federal District Court for the Southern District of New York under New York negligence law concerning a car accident that occurred between P and D in Manhattan. P alleges that he is severely disabled as a result of the accident. Which of the following is most accurate?

a.     A videotape that D made of P working out vigorously at a gym several days after D was served with P’s complaint is not covered by the work product privilege, because the contents of the tape are facts.

Wrong. The tape is a tangible thing and was surely prepared by D “in anticipation of litigation or for trial.” So it is work product under FRCP 26(b)(3). It is true that facts are not themselves protected by the work product privilege even if the facts are themselves expressed in work product. But that simply means that D could be required to testify truthfully about what he believes the level of P’s injuries even though he would be expressing what he learned through making the tape. A document and tangible thing does not cease to be work product simply because its contents consist of facts. (6 of you chose this.)

b.     D’s recollections of what he heard a number of witnesses say to the police at the scene of the accident is not discoverable because it is inadmissible hearsay.

Wrong. Inadmissible evidence is discoverable provided that it is reasonably calculated to lead to admissible evidence. FRCP 26(b)(1). (4 of you chose this.)

c.     D’s recollections of what he heard a number of witnesses say to the police at the scene of the accident is protected by the work product privilege.

Wrong. The statements of the witnesses are not work product because they were not prepared in anticipation of litigation by or for D or by or for D’s representative. See FRCP 26(b)(3). (3 of you chose this.)

d.     Interrogatories may not be served on witnesses to the accident.

Correct. Interrogatories may be served only on parties. See FRCP 33. (57 of you chose this.)

                        e.    P must be served with a subpoena duces tecum before he can be deposed by D.

Wrong. A subpoena duces tecum is used to get documents from a non-party. (No one chose this.)



11.    Which of the following is most accurate?

a.     Assume that there is a federal choice-of-law statute that specifies that the law that applies to breach of contract actions brought in federal court is the law of the place of contracting. P brings a diversity action against D in federal court. This statute should not be applied to the action. The choice of law rules of the state where the federal court is located control.

Wrong. Choice of law is surely rationally classifiable as procedural. For example, a state court will use its own choice of law rules to determine what substantive law applies. The fact that forum choice-of-law rules apply is one reason to consider choice of law procedural. So, according to Hanna, choice of law is something that Congress could regulate by statute, even in diversity actions. And remember, it does not matter that choice of law is also rationally classifiable as substantive. If it is rationally classifiable as procedural as well, then Congress can regulate it.

       It is true that currently the choice of law decisions made by a federal court sitting in diversity are determined by the law of the state where the federal court sits. But that is the result of the federal common law Erie analysis that occurred in Klaxon. There was no choice-of-law statute at issue in Klaxon. (22 of you chose this.)

b.     Assume that Fed. R. Civ. P. 4X states that the statute of limitations for all actions in which the limitations period is not otherwise set by federal statute should be 2 years. P brings an action under federal law against D in federal court. Rule 4X should not be applied to the action.

This is the best answer. The Supreme Court has the power to create Federal Rules of Civil Procedure because it was given that power by Congress in the Rules Enabling Act. A Rule is invalid (which would mean that it is invalid totally – in federal question as well as diversity actions) if it is contrary to the restrictions in the Act. According to the Act,

(a) The Supreme Court shall have the power to prescribe general rules of practice and procedure and rules of evidence for cases in the United States district courts (including proceedings before magistrate judges thereof) and courts of appeals.

(b) Such rules shall not abridge, enlarge or modify any substantive right. . . .

Now there is not much information out there about what it means to abridge, enlarge or modify a substantive right. But it is at least arguable that a Rule that sets limitations for when actions can be brought abridges or modifies substantive rights. (There is, of course, no such Rule currently and none has even been suggested.) After all, such a Rule says, after a certain point, that the substantive rights cannot be sued upon.

       In answering this question, you had to compare this answer to the others that are available. The final answer – e – is straightforwardly wrong. There is also a reason to choose b over c and d. All three answers involve the issue of whether Rule is contrary to the restrictions in the Rules Enabling Act. But to choose c or d you had to conclude that a Rule that currently exists and is constantly used (Rule 56 or Rule 13(a)) is in fact invalid. That’s a big step. If you choose b, you claim that a Rule that does not currently exist is invalid. What is more, a Rule that determines the time limitations for vindicating substantive rights seems more intrusive into those substantive rights than Rules concerning summary judgment and joinder.

       What about answer a? Which is more accurate, that choice of law is not rationally classifiable as procedural, or that an FRCP that limits the time period for when actions can be brought abridges or modifies substantive rights? The second is more accurate because the Rules Enabling Act standard is the more restrictive one – the one more easily violated. One reason is that it simply sounds more restrictive. But there is another reason to think that the “not rationally classifiable as procedural” standard is the less restrictive one. It is the constitutional limitation on Congress’s power to regulate procedure. The Rules Enabling Act limitation is a further limitation that Congress created when it delegated its constitutional power to regulate procedure to the Supreme Court. So logically, it should be more restrictive.

       Only 3 of you chose this answer. But those who chose it were more likely to do better on the rest of the exam, something that was not true of any of the other answers to this question. Indeed, the three people who chose this were among the highest scorers on the rest of the multiple choice exam.

c.     Assume that the New York state constitution has been amended to include a provision stating that that the right to a jury trial is of great importance to the people of New York and that summary judgment is therefore forbidden. P brings a diversity action against D in federal court in New York. The New York constitutional provision should be applied to the action. Neither P nor D can make a motion for summary judgment.

Wrong. There is a FRCP on point – Rule 56 – which governs summary judgment. We know from Hanna that the only way that Rule 56 is not going to apply, even in a diversity action, is if it is contrary to the restrictions in the Rules Enabling Act. Does Rule 56 abridge, enlarge, or modify a substantive right? Perhaps there are arguments that it does. But you have a strong reason to believe that it does not, namely the fact that Rule 56 is currently in use and has not been struck down on these grounds.

       Notice that the question is whether Rule 56 abridges, enlarges or modifies a substantive right – that is the right that is being sued on (tort, contract, etc.). The question is not whether it abridges, enlarges or modifies procedural rights that a state thinks important. So the NY state constitution is irrelevant. (13 of you chose this.)

d.     Assume that there is no compulsory counterclaim rule in New York’s rules of civil procedure. P brings a diversity action against D in federal court in New York. This New York approach should be applied to the action, releasing D of any obligation to bring compulsory counterclaims against P.

Wrong. There is a FRCP on point – Rule 13(a) – which governs compulsory counterclaims. We know from Hanna that the only way that Rule 13(a) is not going to apply, even in a diversity action, is if it is contrary to the restrictions in the Rules Enabling Act. Does Rule 13(a) abridge, enlarge, or modify a substantive right? Perhaps there are arguments that it does. But you have a strong reason to believe that it does not, namely the fact that Rule 13(a) is currently in use and has not been struck down on these grounds. (1 of you chose this.

                        e.    Assume that there is no Fed. R. Civ. P. governing service. But there is a federal common law rule according to which service must always be in-hand upon the defendant. P brings a diversity action against D in federal court. This rule should not be applied to P’s diversity action. The service rules of the state where the federal court is located control.

Wrong. Hanna explicitly stated that if there were no FRCP governing service and the matter were instead covered by federal common law, this federal common law would apply in a diversity case. After all, differences in service rules as one moves between state court and federal court is unlikely to motivate forum shopping. (31 of you chose this.)



12.        In which of the following cases is personal jurisdiction over the defendant least appropriate?

a.     A federal civil rights action concerning the defendant’s arrest of the plaintiff in Buffalo (in the Northern District of New York). Defendant lives in Pennsylvania and is served there. The action is brought in the Federal District Court for the Southern District of New York.

Wrong. A New York state court would clearly have specific personal jurisdiction over the defendant under Int’l Shoe standards. The defendant’s actions in New York gave rise to the cause of action. Since a New York state court would have PJ, under FRCP 4(k)(1)(A), a federal court in New York would too. (2 of you chose this.)

b.     A California state-law product liability action brought as a diversity action by a California plaintiff against a corporation incorporated in Delaware with its principal place of business in Tennessee. The defendant corporation has a large factory in Buffalo, New York (in the Northern District of New York), but the plaintiff at no time has this asset of the corporation attached by the federal court. The defendant corporation is served (through service on its Chief Legal Officer) in Tennessee. The action is brought in the Federal District Court for the Southern District of New York.

Wrong. A New York state court would clearly have general personal jurisdiction over the defendant under Int’l Shoe standards. The defendant engages in substantial continuous activities in the state of New York, by virtue of having a large factory in that state. It can be sued in New York on any cause of action. Since a New York state court would have PJ, under FRCP 4(k)(1)(A), a federal court in New York would too.

       Attachment is irrelevant. It is relevant (if at all) only in cases of in rem and quasi in rem personal jurisdiction, not general personal jurisdiction. (3 of you chose this.)

c.     A California state-law diversity action concerning a brawl between the plaintiff and the defendant in California. The plaintiff is a citizen of California and the defendant a citizen of New York. The defendant is served while on a business trip in California. The action is brought in the Federal District Court for the Southern District of New York.

Wrong. The defendant is a citizen of New York and so is domiciled there. Domicile is a clear source of general personal jurisdiction. Since a New York state court would have PJ, under FRCP 4(k)(1)(A), a federal court in New York would too. (3 of you chose this.)

d.     An action by a New York citizen against a California citizen for violation of a federal antiterrorism act. The defendant’s alleged violations of the federal act were all committed in Iraq. The defendant has no contacts with the state of New York. The action is brought in the Federal District Court for the Southern District of New York.

Correct. There would be no PJ in a state court in New York. There are no Int’l Shoe connections with the state of New York. Those who thought there was PJ might be thinking of FRCP 4(k)(2), which would allow for PJ even if a New York state court would not have PJ. But that provision would allow for PJ only if the defendant “is not subject to the jurisdiction of the courts of general jurisdiction of any state.” This defendant is a California citizen and so would clearly be subject to general PJ in California state courts. (51 of you chose this.)

                         e.    An action by a New York plaintiff against a German defendant for breach of German contract law concerning a contract signed in Germany with performance in Germany. At the initiation of the suit the American plaintiff had the federal court attach the assets of a trust that had been created by the German’s mother with the German as the beneficiary. The assets of the trust and the trustee are located in New York City. Defendant is served in Germany. The action is brought in the Federal District Court for the Southern District of New York.

Wrong. It is true that PJ in this case is somewhat suspect. This is a quasi in rem action. The property that is the source of PJ is the defendant’s New York financial assets (namely the corpus of a trust in his name). In the light of Shaffer, quasi in rem actions should be viewed with skepticism. But, as I mentioned often in class, they are often still brought, and the connection between the property and the forum in this case is clearer than it was in Shaffer (which involved shares that were considered to be located in Delaware under Delaware law because the corporation was incorporated in Delaware). Furthermore the exercise in PJ is more reasonably foreseeable in this case than in Shaffer. It is not surprising that one’s financial assets in New York might be seized for a quasi-in-rem action in New York. But most importantly PJ in this case is only debatable. In answer d the exercise of PJ is clearly wrong. So d is the correct answer. (11 of you chose this.)


        13.        Which of the following is most accurate?

a.     P sues D in New Jersey state court concerning ownership of $100,000 in shares of the X Corp. The X Corp. is incorporated in New Jersey. Under New Jersey law, the situs of all stock in a New Jersey corporation is taken to be New Jersey. D has no other contracts with the state of New Jersey except ownership of the stock. D’s motion to dismiss for lack of personal jurisdiction should not succeed.

Correct. This is the best answer. Those who thought that there wasn’t PJ probably thought that this case was like Shaffer. It isn’t. Shaffer involved a quasi-in-rem action, where stock (which was considered by law to be in Delaware) was attached by a Delaware court to create personal jurisdiction for a cause of action unrelated to the property. This is an in-rem action to determine ownership of the stock. The cause of action concerns the very property that is the source of PJ. So PJ is far less problematic here than it was in Shaffer.
   To be sure, there are still some worries about whether there is PJ, because there remains the question of whether the property really is located in Delaware. After all, it is only considered to be located there by law. Furthermore, this problem is somewhat related to Shaffer, because the problem of the stock being located in Delaware only by law was likely a factor in the Shaffer court's conclusion that there was no PJ. But even if the Shaffer court had concluded that the stock clearly was in Delaware, there would still be the much larger issue of whether this contact with Delaware could create PJ under Int'l Shoe, given that the cause of action was unrelated to the stock. This second, far more important, problem in Shaffer is simply not an issue in our question. That there is no PJ in our question does not follow obviously from Shaffer.

    Indeed, if there is no PJ in this case there might not be any place where an in rem action concerning ownership of the stock could be brought, particularly if the claimants on the stock were scattered over different states. The stock needs to be somewhere and it is not strange to say it is in the state of incorporation.

   Finally, although this answer is questionable, it is far better than all the other answers, which are clearly wrong. (12 of you chose this. But those who did were far more likely to do better on the rest of the questions than those who did not.)

b.     P sues D in diversity in the federal court. Assume P’s suit is a California fraud action concerning a hand-held computer that P bought from D.  In P's complaint, which is signed by P's lawyer, there is an allegation that D knowingly lied to P when D said that the computer had the capacity to send e-mails. After discovery, it becomes clear that P and P’s lawyer had no evidence at the time the complaint was drafted that D knew that the computer could not send e-mails. Nevertheless, P cannot be submitted to Rule 11 sanctions. Since P was bringing 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.

Wrong. Rule 9(b) is about specificity in the complaint. It creates a requirement of heightened specificity for fraud, but makes an exception to this requirement for allegations of condition of mind. But none of this absolves P of satisfying Rule 11. Just because you don’t have to be specific concerning your allegation of condition of mind does not mean you don’t have to have the evidence in favor of that allegation necessary to satisfy Rule 11. Rule 11 could still have been violated if the allegation in the complaint that D knowingly lied to P had no evidentiary support at the time that the complaint was signed by P's lawyer (unless P stated that the allegation was only likely to have evidentiary support after further discovery). Satisfying Rule 9(b) does not mean you have satisfied Rule 11. (14 of you chose this.)

c.     P sues D in diversity in federal court in California. P's action is under Arizona negligence law and concerns a car accident that took place between P and D in ArizonaArizona has a one year statute of limitations for negligence actions. P’s action was both filed and served more than one year after the accident. Under Klaxon, P’s action is barred by the Arizona statute of limitations.

Wrong. It is true that, under York, a federal court sitting in diversity cannot use its own common-law limitations rules. It must use the limitations law that would be used by a state court where the federal court is located. But, as I stated many times in class, in general a California state court would use California’s statute of limitations, even when California choice-of-law rules suggested that Arizona substantive law applies. Nothing in Klaxon mandates that Arizona’s statute of limitations be used simply because Arizona’s substantive law is. (14 of you chose this.)

d.     P sues D in diversity in federal court in New York. P seeks compensation for injuries due to a car accident in New York City in which P, D and X participated. D joins a contribution action against X. After discovery, X brings a motion for summary judgment against D on the grounds that a reasonable jury would have to find that all of P’s damages were the result of D’s negligence alone. X’s motion is granted. At trial, P receives a verdict in his favor and the court awards him a judgment against D. Some months later, D sues X in New York state court for the damages X caused D during the accident. This action is not barred by claim preclusion.

Wrong. When D brought his contribution action against X, he was obligated under the law of claim preclusion to join all causes of action that he had against X that concerned the same transaction (that is, the brawl). D did not do that, and now that his impleader has come to a judgment he is claim precluded. Notice that this is true whether New York or federal law on the scope of a claim applies – that is, however one answers this Erie question. For both NY and the feds use the transactional standard. (New York adopted the transactional standard in O’Brien.) (7 of you chose this.

                        e.    P sues D in federal court. D brings a pre-answer motion to dismiss for insufficiency of service. After the motion is filed with the court and served upon P, D requests leave to amend the motion to include the defense of lack of personal jurisdiction. If the court grants leave to amend, the defense of lack of personal jurisdiction is not waived.

Wrong. You can save a waivable defense only through an amendment “as a matter of course.” See FRCP 12(h)(1). But only pleadings (e.g. answers) can be amended as a matter of course. See Rule 15. Motions, including pre-answer motions, cannot. (23 of you chose this.)

 
             14.     The warranty that D Automobiles (hereinafter D) provides for its cars states that it is void if replacement parts other than those made by D are used. P, a wholesale purchaser of auto parts, brings an action in federal court against D, alleging that it is violating federal antitrust law. D’s warranty, P alleges, restricts competition, raising the price for wholesale purchasers. P asks that the warranty be changed to allow parts from other manufacturers to be used. Which of the following is least accurate?

a.     X, another wholesale purchaser of auto parts, with the same grievance against D, is a necessary party.

Wrong. This is not the least accurate, because X is a necessary party. X claims an interest relating to the subject of the action and is so situated that the disposition of the action in X’s absence may leave D subject to a substantial risk of incurring inconsistent obligations by reason of the claimed interest. Assume P loses but X wins. D can’t both have and not have a warranty that allows for parts from other manufacturers to be used. It needs a consistent warranty. (12 of you chose this.)

b.     X, another wholesale purchaser of auto parts, with the same grievance against D, may intervene of right.

Wrong. This is not the least accurate, because X may intervene of right. As we discussed in class, the requirements for an intervener of right and a necessary party overlap considerably. And X is a necessary party (see a). (6 of you chose this.)

c.     If P’s action were brought as part of a class action consisting of all wholesale purchasers of auto parts, members of the class would not have the opportunity to opt out.

Wrong. This is not the least accurate. If P’s action were brought as part of a class action consisting of all wholesale purchasers of auto parts, it would clearly be a 23(b)(1)(A) or (b)(1)(B) class action. As we discussed in class, the requirements for these class actions and the requirements for necessary parties overlap considerably. And the other wholesale purchasers of auto parts would be necessary parties. See a. Opting out is not possible in a 23(b)(1)(A) or (b)(1)(B) class action (as one would expect given that the members of the class are all necessary parties). Note that once you saw that X was a necessary party, answers a, b, and c could all be immediately rejected. (17 of you chose this.)

d.     Assume P’s suit is tried and there is a judgment for P. Assume further that under federal antitrust law damages for the higher prices that resulted from D’s warranty are not available. Such damages are, however, available under state antitrust law. If P were to subsequently sue D in state court under state antitrust law, she would not be claim precluded by the earlier federal judgment.

Correct. This is the least accurate, because it is downright false. P would be claim precluded. The fact that damages are unavailable under federal antitrust law but are available under state antitrust law does not mean that P is not claim precluded. If P wanted these damages, all he had to do was join a state-law antitrust action to the federal antitrust action in his first suit. Indeed, under the law of claim preclusion, P was obligated to join the state antitrust action in the first suit because it concerned the same transaction as his federal antitrust action. Subject matter jurisdiction would not have stood in the way of such joinder. The state antitrust action would have had supplemental jurisdiction. (32 of you chose this.

                        e.    D’s insurer, who has an obligation to indemnify D for the losses that would result from P’s suit, is not a necessary party.

Wrong.
This is not the least accurate, because it is correct. D’s insurer is not a necessary party. In general those against whom one brings impleaders are not necessary parties. They can usually be sued in separate suits without the issues identified in FRCP 19(a) arising. (3 of you chose this.)


        15.    P, a student at the College of William & Mary, sues D, an officer of the campus police and a citizen of Virginia, under 42 U.S.C. § 1983, for damages resulting from violations of her federal constitutional rights. P’s suit is brought in the Federal District Court for the Eastern District of Virginia. P’s complaint alleges that D violated her Fourth Amendment rights in connection with his search of her rooms. In his answer, D admits most of the factual allegations in P’s complaint. But he denies that he was the officer who entered her room. And he also denies that the officer who entered her room was acting “under the color of state law,” a necessary element of a successful section 1983 action. The relevant officer was off-duty and was not taking advantage of his position of authority in entering P’s room. He was merely a private trespasser. Therefore, even if D was found to be the officer who entered the room, D would not be liable under section 1983.

D moves for summary judgment. He offers as evidence in support of his motion an affidavit from a student witness who states that the D was not the officer who entered the room and that the officer who did enter was out of uniform, flashed no badge, and simply barged into P’s room in a way that took no advantage of his authority. P offers in opposition to the College’s motion an affidavit from another student witness stating that the officer who barged into the room in fact said, “Open up, this is the campus police.” D is granted summary judgment. Which of the following is most accurate?

a.     The grant of summary judgment was in error.

Wrong. The grant of summary judgment was correct. Given D’s admissions, there are two remaining issues in the case: whether D was the officer who broke into the room and whether the break-in was under the color of state law. What has P offered in opposition to D’s motion for summary judgment? Only a witness in her favor concerning the second issue. So P has nothing – zip – in support of D being the officer who entered the room. If P herself viewed D and can act as a witness, she should have offered her own affidavit. (Her complaint is not itself evidence.) She didn’t (maybe she did not really see who it was). So no reasonable jury could find that D was the person. This would be so even if D had not offered a witness who stated that D was not the person. Summary judgment for D is appropriate. I said in class that there was going to be a question like this. (24 of you chose this.)

b.     Assume that, X, another student who was in the searched room, sues D under 42 U.S.C. § 1983, making the same allegations as P did in her complaint. D may issue preclude X from relitigating whether he was the officer who entered the room.

Wrong. X was not a party in the earlier suit, nor was she in privity with P. She cannot be issue precluded. (13 of you chose this.)

c.     If P is domiciled in Virginia, P’s action should have been dismissed for lack of federal subject matter jurisdiction.

Wrong. There is no worry about complete diversity. This is a federal question case. (2 of you chose this.)

d.     If P tried to bring a subsequent state-law trespass action against D in Virginia state court, she would be claim precluded from doing so.

Correct. A state-law trespass action would concern the same transaction (namely the break-in), so P would be claim precluded from bringing it subsequently. (32 of you chose this.)

e.     If the College of William & Mary has a contractual obligation to indemnify D for any damages D must pay to P, then the College is a necessary party to P’s action against D.

Wrong. Once again, in general those against whom one brings impleaders are not necessary parties. They can usually be sued in separate suits without the issues identified in FRCP 19(a) arising. (8 of you chose this.)


16.       
P (a citizen of New York) wishes to bring an action against D (a citizen of Germany living in Germany) for breach of a contract to purchase 100 used cars worth $3,000 each (that is, worth $300,000 total). The action concerns a fire at a warehouse in Germany that was holding the cars prior to delivery to P in New York City. P claims that D was liable for any loss up to the point of delivery and that failure to deliver is a breach of their contract. But P knows her argument is somewhat weak and that she has only around a 10% chance of winning. Prior to suing, P enters into a contract with X (a citizen of France living in France) according to which P assigns to X one half of P’s interest in the contract with D, in exchange for $15,000 from X. P and X together sue D in New York state court for $150,000 each. There is in-hand service upon D while he is visiting New York City. Under the relevant choice-of-law rules, German contract law applies to the suit. Which of the following is most accurate?

 

a.     D may successfully remove the state court suit to federal court in New York on the grounds that the suit as it stands satisfies the jurisdictional requirements in 28 U.S.C. § 1332.

Wrong. As we discussed in class, courts have consistently held that such a case does not fall under 1332. It is not a case of a suit between “citizens of different States” under 1332(a)(1), because there is a citizen of a State (meaning a U.S. state) on only one side. It is not a case of a suit between “citizens of a State and citizens or subjects of a foreign state” under 1332(a)(2), because we have aliens on both side. And it is not a suit between “citizens of different States and in which citizens or subjects of a foreign state are additional parties” because there are not citizens of U.S. states on each side. (15 of you chose this.)

b.     D may not successfully remove the state court suit to federal court in New York. Because X bought his interest in the suit for only $15,000, the amount in controversy in 28 U.S.C. § 1332 is not satisfied for X’s action against D.

Wrong. The jurisdictional minimum for X’s action against D is met. The amount in controversy, not the amount that X bought the claim for, is relevant for the jurisdictional minimum. The reason that the case cannot be removed is because it is a case of an alien suing a US citizen and an alien. (2 of you chose this.)

c.     D may successfully remove the state court suit to federal court in New York, because X’s action against D may be ignored. The rule in Rose v Giamatti applies.

Wrong. First of all, Rose v. Giamatti was not about assignment of interest to defeat diversity, it was about joinder of a defendant to defeat diversity. Furthermore, in the Rose case, the Reds and Major League Baseball simply did not have the capability of providing Rose with the relief he was requesting. They were not genuine defendants. But here X is a genuine plaintiff. Indeed, I mentioned in class that this example of assignment to defeat diversity would be successful, provided that a sufficient part of the claim is assigned to the diversity-destroying plaintiff. (6 of you chose this.)

d.     If, instead of removing, D made a motion to dismiss for improper venue to the New York state court, the motion would fail. Under 28 U.S.C. § 1441, an alien may be sued in any district.

Wrong. 1441 is the venue statute for federal courts. It does not apply to state courts. (14 of you chose this.)

e.     Assume that New York joinder rules are the same as those in the Federal Rules of Civil Procedure. Assume further that X’s check to P for $15,000 bounced. P is not obligated to join an action against X for breach of the assignment contract.

Correct. Cross-claims are not compulsory under the FRCP and this action between P and X is a cross-claim. (33 of you chose this.)

 

Essay Question 1. [45 points – 54 minutes]

P bought a blender at the X appliance store in her hometown of Lexington, Kentucky in 2004. That day she tried to make a smoothie. The blade on the blender immediately flew off and hit P in both eyes. Her vision was cloudy as a result of the accident. She complained to the D Corp., the manufacturer of the blender. The D Corp. paid for P to visit a doctor in Kentucky, who recommended that she visit an eye treatment facility located in Richmond, Virginia. Since P was retired, she decided to sell her house in Kentucky and rent an apartment in Richmond. She had few belongings and decided to bring all of them with her to Virginia. Another reason she decided to go to Virginia is that if she remained permanently disabled, living in Virginia would be a good idea, since it has a better state-financed disability benefit program than Kentucky. She planned to go back to Kentucky, however, if she recovered from the eye injury or if she got enough in compensation in a civil suit against the D Corp. to live comfortably even with Kentucky’s lower disability benefits. Unfortunately, in Virginia the condition of P’s right eye deteriorated further and she became blind in that eye. This occurred in 2006. It was then that she decided to finally bring suit against the D Corp.

The D Corp. is incorporated in Delaware. Currently it sells only blenders. These have always been manufactured at two plants, one in Kentucky and the other in Ohio. Most officers of the corporation work in offices in Cincinnati, Ohio, although most of them (including the Chief Executive Officer and the Chief Legal Officer) live in suburbs of Cincinnati located across the Ohio River in Kentucky. The D Corp.’s only shareholders are the members of the Y family, all of whom live in Louisville, Kentucky.

Currently the D Corp. sells its blenders in Kentucky, Ohio and Michigan. All of its sales are through a distributor (Z). Z makes its own choices about where to sell the blenders, but the D Corp. is aware that at this point Z’s blender sales are only in those three states. The D Corp. regularly advertises concerning its blenders in newspapers in Kentucky, Ohio and Michigan. This includes advertisements in newspapers in towns in Kentucky that are near the Virginia border. These newspapers have distribution in some smaller towns in the western part of Virginia. The D Corp. knows that its blender ads extend to Virginia, although it has no blender sales in Virginia stores. Z however is planning on extending sales of the D Corp.’s blenders to Virginia and has recently begun advertising the blenders in papers in Virginia. (The D Corp. is aware of these ads.)

Around the time of P’s accident, in 2004, the D Corp. was in the middle of a plan to expand into food processors. In 2003, it established a plant in Richmond, Virginia to manufacture the processors. It also advertised the processors and sold them in Virginia and Kentucky from 2003-05. The project was a commercial disaster, however, and by the end of 2005, the D Corp. had sold its plant in Virginia and ended all sales of the food processors.

P decides to sue the D Corp. in the Federal District Court for the Eastern District of Virginia (in Richmond, Virginia). After filing her complaint there, P had a process server serve the D Corp.’s Chief Legal Officer (CLO) while the CLO was transferring between flights at the Richmond airport. P’s suit is under Kentucky product liability law. In a pre-answer motion, the D Corp. asks that P’s action be dismissed for lack of personal jurisdiction, lack of subject matter jurisdiction and improper venue. Should the D Corp.’s motions succeed?

 

SMJ

Let’s begin with Subject Matter Jurisdiction, which was fairly easy. The only possible source of federal subject matter jurisdiction for this case is diversity. There is no problem with the jurisdictional minimum, given the injuries suffered by P. All we need for federal subject matter jurisdiction, therefore, is that P’s state of citizenship is different from the states of citizenship of the D Corp. (hereinafter D).

What is P’s state of citizenship – Kentucky or Virginia? Citizenship of an individual is determined by that person’s domicile. At the time of the injury, P clearly had a Kentucky domicile. But what is relevant for diversity purposes is citizenship at the time that the suit was filed. Were the criteria for the establishment of a Virginia domicile satisfied by the time of the filing of the suit? She clearly had physical presence in Virginia. Did she also have the intent to remain in Virginia for the indefinite future? (See Baker v. Keck.)

This is obviously a fact-intensive question and we don’t have all the information that might be relevant to a court making this determination. A good deal could be said about this one way or the other. But we do have two important facts.

First of all, we know that she intended to return to Kentucky if she recovered sufficiently from her eye injury. If she is just in Virginia for treatment – even for lengthy treatment – the case might look like World Wide Volkswagen, where the plaintiffs’ remaining in Oklahoma for treatment after a car accident was insufficient to give them an Oklahoma domicile. On the other hand, P eventually went blind in one eye, which suggests that she is never going to recover. This could indicate a Virginia domicile.

The second important fact is that P intends to stay in Virginia to take advantage of Virginia’s generous disability benefits, unless she recovers enough from her suit against D. In Baker v Keck, the fact that the plaintiff might return to Illinois at the end of the litigation was considered compatible with his having an Oklahoma domicile. One might say the same thing here. On the other hand, one might also argue that her intention to stay in Virginia is at this point too contingent (since it depends upon the outcome of the suit) to establish domicile there.

I did not really care how you decided, as long as you addressed the relevant considerations.

What about the citizenship of D? It is clearly a citizen of Delaware (its state of incorporation). But it is also a citizen of its principal state of business. What is that state? Once again, what is relevant is citizenship at the time of the filing of the suit. The food processor factory in Virginia, which no longer exists, would not be relevant.

D has two factories (one in Ohio and one in Kentucky) and its financial and administrative activities are primarily in Ohio. The domicile of the people who engage in these financial and administrative activities is irrelevant. True, they might work at home at times, but we already know that most of their financial and administrative activities are in Ohio. The domicile of the corporation’s shareholders is also irrelevant. We have no reason to believe that these shareholders actually run the corporation – much less that they do so from the state of their domicile, Kentucky.

Using the “nerve center” test for principal place of business would therefore place it in Ohio. But the same result would occur if one used the “muscle” test. We have no reason to believe that the manufacturing is not evenly divided between Ohio and Kentucky. In situations, like the American Airlines case, where muscle is distributed evenly or widely, nerve center activities tend to be decisive.

So we probably have a diversity case. If P is domiciled in Virginia, we have no problem whether D’s principal place of business is Ohio or Kentucky. But even if P is domiciled in Kentucky, we probably have no problem because D’s principal place of business is likely Ohio.

Most of you handled this part of the essay question fine. Things changed when you moved to personal jurisdiction.

PJ

It’s worth mentioning that what is relevant (according to FRCP 4(k)(1)(A)) is whether a Virginia state court would have personal jurisdiction over D. The primary problem is whether a Virginia state court’s assertion of PJ over D would be compatible with the 14th Amendment. But it is worth saying that even if the 14th Amendment were satisfied, the Virginia state constitution and Virginia’s long-arm statute (about which you were not required to know anything) might cause a problem.

Most of you recognized that PJ over D is not possible simply through tagging an officer of D in Virginia. That would work only if the officer were sued personally or if the officer were an agent for service of process for the corporation (and nothing in the question indicates that this is so). Notice that the fact that service on the officer is adequate as service on the corporation (under 4(h)) does not mean that it creates personal jurisdiction.

There also seems to be no property of D in Virginia, so quasi in rem jurisdiction is unavailable.

Once we’ve set these aside, there are really only two arguments for PJ over D. The first is that D has such substantial and continuous contacts with Virginia that there would be general jurisdiction over it, that is, jurisdiction for any cause of action, no matter how unrelated it is to D’s activities in Virginia.

When assessing whether there is general jurisdiction, discussion of cases that deal with specific jurisdiction (such as Asahi or World-Wide Volkswagen) were irrelevant and showed serious confusion on your part. The case that we read that dealt with general jurisdiction was Perkins (plus we discussed the Helicopteros case briefly).

The problem with finding general jurisdiction over D is that the contact with Virginia that could best support such jurisdiction – namely its food processor factory – no longer exists. As we discussed in class, the contacts between a corporation and a state used for general jurisdiction generally have to be current contacts. The past contacts with Virginia could, of course, give rise to specific jurisdiction – for example, for causes of action arising from the manufacture of the food processors in that state. But P’s is not such a cause of action.

Once one concentrates on current in-state activities it is impossible to find general jurisdiction. One cannot plausibly say that D could be sued on any cause of action in Virginia simply because it sends a few advertisements into some small towns in the western part of the state. Nor does it help to add that Z, D’s distributor, plans to market blenders in Virginia and has begun advertising there. Even if all that activity had been engaged in by D itself (which it was not) there still would not be general jurisdiction.

So the only possibility is specific jurisdiction. But there is a substantial hurdle to finding specific jurisdiction. P’s cause of action concerns an accident in Kentucky involving a blender purchased in Kentucky that was manufactured either in Kentucky or Ohio. There are no Virginia activities that are being sued upon here.

Many of you blithely discussed D’s blender ads in Virginia (or Z’s blender ads and plans to market blenders in Virginia) as grounds for specific jurisdiction, often in conjunction with specific jurisdiction cases like Asahi. It was a big mistake to do this without noting the massive difference between specific jurisdiction cases like Asahi and P’s case. In the specific jurisdiction cases we read there were always activities in the forum state that were the subject matter of the suit. In Asahi, for example, it was the blow-out of the tire with an Asahi valve. To be sure, there were worries about whether Asahi’s contacts with California were sufficient for specific PJ. But there was at least something that occurred in the forum that was the subject matter of the suit.

The fact D advertises a bit in the western part of Virginia would clearly be relevant to specific jurisdiction over D for causes of action brought by Virginians who buy blenders in response to those ads. But P is not such a person. Of course, it is worth noting that D’s blender ads are sort of related to P’s cause of action – since they both concern blenders. But such relatedness is minimal. It is nothing like the relatedness that occurred in cases like McGee, Asahi or even World-Wide Volkswagen (where no specific jurisdiction was found). For in all those cases, the activities used to support PJ were the very activities that were being sued upon.

For example, in McGee the reinsurance contract that was sent into California was the very contract that the plaintiff was suing the defendant under. The plaintiff did not point to the fact that the defendant had sent a reinsurance contract into California in order to get PJ over the defendant concerning the breach of a reinsurance contract that the defendant had not sent into California.

Even in World-Wide Volkswagen, the plaintiffs argued that the fact that Seaway sold cars that ended up in Oklahoma supported PJ in Oklahoma for an accident concerning one of those cars that ended up in Oklahoma. They did not use the fact that Seaway sold cars that ended up in Oklahoma to support PJ in Oklahoma for an accident concerning a car that did not end up in Oklahoma.

That’s why the best arguments for specific PJ pointed to the fact that P moved to Virginia on the recommendation of a doctor who was paid by D. That is at least an action by D that reached out to the state of Virginia and was actually related to the very activities concerning which P was suing D. Part of P’s damages manifested themselves in Virginia due to D’s actions (because P was in Virginia due to D's actions). I’m not saying that this argument should work, but discussion of it was rewarded, because it showed comprehension of the idea of specific jurisdiction.

I did not even penalize those who argued that there should be PJ over D in Virginia as a result of the blender ads in Western Virginia or Z's ads in the state (even though this is fairly clearly wrong), provided that it was recognized that the argument had a big hurdle to overcome, since P did not buy the blender in response to those ads.

Finally, it is worth noting the McGee factors arguing for PJ are the inconvenience of P having to return to Kentucky to sue (given her injuries), the ease of D defending in Virginia, and Virginia’s manifest interest in recovery for disabled residents. McGee factors arguing against PJ are the fact that many of the witnesses would be in Kentucky – the place of injury and perhaps the place of manufacture.

Venue

One reason there would be venue in the E.D. Va. Is if it is a district where D resides. See 28 USC 1391(a)(1). According to 1391(c), a corporation “shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced.” Since we have concluded that D is not subject to PJ in Virginia, however, we would have to conclude that it does not reside in the E.D. Va.

The second reason for venue in the E.D. Va. is if a “substantial part of the events or omissions giving rise to the claim occurred” in that district. See 28 USC 1391(a)(2). One might argue that the fact that P went blind in one eye is a substantial part of the events giving rise to the claim. After all, the claim includes damages and the blindness that occurred in Virginia increased these damages. One can argue that there is venue on this ground without arguing that the fact that the blindness occurred in Virginia is a source of PJ over D.

It is worth noting, finally, that because there is clearly venue in Kentucky, 1391(a)(3) is irrelevant.


Essay Question 2. [20 points – 24 minutes]

P1 (a citizen of New York) and P2 (a citizen of New York), joining under Rule 20, sue D (a citizen of New Jersey) in the Federal District Court for the Southern District of New York. P1 and P2’s suit is under state-law negligence in connection with a car accident in New York City. The jurisdictional minimum is met for both plaintiffs’ actions against D. During the pleading period, P1 files a cross-claim against P2 under state-law negligence for damages that P2 caused P1 in the same accident. P2 makes a motion to dismiss P1’s cross-claim for lack of subject matter jurisdiction.

Meanwhile, in D’s answer to P1 and P2’s complaint, D joins a counterclaim against P1 for state-law breach of contract. P, D and X had entered into a contract according to which P and X were to clean the windows in D’s large apartment building twice a year. D claims that P’s work was shoddy for the past few years. D is asking for damages and for injunctive relief demanding that P and X use a certain cleaning process in the future. D also chooses to join X to his counterclaim against P1. X is a citizen of New Jersey. Both X and P1 make a motion to dismiss the counterclaim for lack of subject matter jurisdiction. Assess the likelihood of success of P2’s, P1’s and X’s motions to dismiss.

Let us begin with P2’s motion to dismiss. Does P1’s cross-claim against P2 have supplemental jurisdiction? It is part of the same constitutional case or controversy as P1’s and P2’s diversity actions against D. (It would be described as pendent.) So there is no problem as far as 28 USC 1367(a) is concerned. But the cross-claim falls under one of the exceptions to supplemental jurisdiction spelled out in 1367(b). First of all, this case is a “civil action of which the district courts have original jurisdiction founded solely on section 1332,” because P1’s and P2’s actions against D are founded solely on diversity. Second, the cross-claim is a claim by a plaintiff against a person made a party under Rule 20. Furthermore, “exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332,” because P1 and P2 are not diverse. So P2’s motion will succeed.

It is worth noting that this is probably the right result. After all, if we allowed supplemental jurisdiction for P1’s cross-claim against P2, P1 and P2 could collusively subvert the requirements of diversity and get their lawsuit into federal court by finding some diverse defendant to sue and then bringing their non-diverse cross-claim in under supplemental jurisdiction.

Some of you said there would be supplemental jurisdiction because P1 joined his cross-claim against P2 under Rule 13(g), and 13(g) is not mentioned in the exceptions in 1367(b). This is a mistake. The question is not the Rule used to join the action being assessed for supplemental jurisdiction. The question is how the person against whom that action is brought was made a party. P2 was not made a party through 13(g). He was already a party before P1’s cross-claim was brought. P2 was made a party through Rule 20(a).

Let’s move on to P1’s motion to dismiss. Notice that D&