Civil procedure I. Introductory Material

3. Notes:

• 
  R. 1359 no fed jurisdiction when such jurisdiction is obtained improperly or collusively made or joined
  
• 
  Only formal parties to the suit must be diverse, nominal members are immaterial
  
• 
  R. 1332 a corporation’s home jur is wherever the corp was incorporated and where its principle business is
  

1. 28 USC §1332(b): In addition to diversity, jurisdictional amount requirement of $75K or over

2. Tongkook America, Inc. v. Shipton Sportswear Co – case dismissed because though parties thought suit was for $100K, it was actually for $40K, good faith mistake defense not accepted by court

• 
  Test: If parties made mistake as to amount in good faith, the case may continue, but if there was no way that the claim could have ever been for the required amount- dismissal is proper- penalties for doing so – See R. 1332
  
• 
  settled rule is that whenever you find a jurisdiction error you dismiss
  

3. Snyder v. Harris – P’s claim was only for $8K, the total claim for all shareholders was $1.2M

• 
  decides against the rule- court will not allow aggregation
  
• 
  Traditional Rule: multiple parties may aggregate the amounts to make it sufficient for fed. Jurisdiction
  
• 
  If it is brought in state court and the D wants to move it to federal court it would be on the D. → It would generally fall on whoever wants to invoke federal jurisdiction.
  

4. McCarty v. Amaco Pipeline Co. → Amount in question is determined by P’s viewpoint if it originated in fed. Court, by D’s account if case removed to fed. Court, either-whichever party estimates at $75K

1. Rule 28 USC §1367 (a): same case or controversy provision (supplemental jur.) Pendent jurisdiction- at the discretion of the court- a federal court may hear a P’s state law claims, whenever one claims arises under fed. Law and the state and fed claims derive from a common nucleus of operative facts

a. Pendent jurisdiction – when P in her complaint, appends a claim lacking an independent basis for federal subject-matter jurisdiction to a claim possessing such a basis

b. Ancillary Jurisdiction – when either a P or a D injects a claim lacking an independent basis for jurisdiction by way of a counterclaim, cross claim, or 3p claim.

b. United Mine Workers of America v. Gibbs → federal question- fed court properly exercised jur. over both state and fed. Claim since both claims arose out of common facts

• 
  TEST: the state and federal claims must “derive from a common nucleus of operative fact” and must be so closely related that usually a P would be expected to try them all in one judicial proceeding
  

2. Rule 28 USC §1367 (b): no supplemental jur. as to diversity suits; Ancillary jur (formally pendent jur.) a fed court odes not retain jur. based on diversity when the P adds a pendent party D who destroys complete diversity

a. Owen Equipment & Erection Co. v. Kroger – diversity suit- no discretion for court to hear case once complete diversity (all members of the diverse party must be diverse) has been destroyed

• 
  federal courts are limited jurisdiction courts and we don’t want to expand the jurisdiction
  
• 
  P cannot use ancillary jurisdiction to assert a claim against the 3^rd party D even if that 3pd has already been brought into the action by the ancillary doctrine
  

3. 28 USC §1367, added in 1990, codifies the ancillary and pendent concepts and combines them into a single motion of supplemental jurisdiction

1. 28 U.S.C. §1441: Removal Statute—D may remove case to federal court if P could have brought suit there originally (P has first choice of jur); 1441 C- If state question is separate and independent it can be removed along w/the federal issue; P cannot conceal the true nature of a complaint through “artful pleading”

2. Bright v. Bechtel Petroleum – case dismissed; also by pendent jur. entire claim both federal and state, was dismissed instead of state matter being remanded, a P cannot sue when D is complying with federal tax law; P here was penalized for bringing a frivolous suit
F. Attacks on Subject Matter Jurisdiction

1. Capron v. Van Noorden – Capron sued D in federal court for trespass and damage. In his complaint, P alleged that D was from NC, but failed to allege his own citizenship.

• 
  Diversity of citizenship must be shown affirmatively in the pleadings. Since there was no allegation that either party was an alien, or that the plaintiff was a citizen of a state other than NC, there is no diversity of citizenship.
  
• 
  In Federal Ct., a case will be thrown out for lack subject matter jur. even if it has already made it to the appellate stage; strict rules of dismissal-judgment w/o jurisdiction is a nullity-period
  
• 
  Direct and collateral attack: Court is not required to decide subject matter jur. before personal jur; Direct attack = challenging jur. during actual trial
  
• 
  Hypo: If Capron had let the judgment become final, lost in the first action, and then filed the 2^nd action (i.e. instead of appealing, he files a new suit).
  
  • 
    Collateral attack → separate law suit
    
  • 
    Res judicata – once the case is finished, it is over and done with and jurisdiction attaches, but not if it is a collateral suit
    

• 
  Provides that the parties or the parties or the court on its own initiative can always object to the court’s lack of subject matter jurisdiction
  

3. Collateral Attack – The rules allowing collateral attack on the decision of the court of another jurisdiction are generally the same for both subject matter and personal jurisdiction.

• 
  It is only where a party to the first action had a default judgment entered against him that he may claim, when he is sued on the judgment in a second court, that the first court lacked subject matter jurisdiction
  

A. General Principles

1. Venue refers to the place within a sovereign jurisdiction in which a given action is to be brought. It becomes a consideration only when jurisdiction over the parties has been established.

2. 28 USC §1391- “Which federal district court shall try the action?”

• 
  Suit can be brought only in a district that satisfies both the venue requirements and the personal jurisdiction requirements as to all D
  
• 
  (Federal application only) V is proper in a location where a substantial part of the events or omission giving rise to the claim occurred.
  

3. Venue in local actions. IN “local actions, V is proper only in the district where the property that is the subject of the action is located. If the property is located in more than one district of the same state, the action may be brought in any such district.

• 
  Bates v. C & S Adjusters, Inc – Venue is proper in cases where a P’s home district if a collection agency had mailed a collection notice to an address in that district or telephoned in that district.
  

4. Federal Transfer of V – Transfer on the motion of D may be made only to those districts “where P would have had the right, independent of the wishes of the D, to bring the action. This clearly establishes that consent by the D will not permit transfer to a forum where the action could not originally have been commenced.” Hoffman.

• 
  In the interest of reduction of forum shopping, the SC has rule that in fed transfer of V cases, the substantive law that is applied to the transferee court must be the same substantive law that the transferor court would have applied. This ruling tends to ensure that a transfer of fed V is only a change of courtrooms rather than a change of law and possibly of outcome.
  
• 
  Even the consent by all Ds would not authorize the action to be transferred to that district.
  

5. Venue in today’s law

• 
  According to 28 §1291 (d) an alien may be sued in any district if the alien does not contest jur. so in Helicopteros there would be jurisdiction
  
• 
  In Burger King venue seems impermissible.
  
• 
  Long arm statute provides for personal jurisdiction but does not apply to venue
  

1. FNC – a court may resist imposition upon its jurisdiction even when jurisdiction is authorized by the letter of general venue statute; court’s discretion

2. Gulf Oil Corp v. Gilbert – (balancing test) There is ordinarily a strong presumption in favor of Ps choice of forum, which may be disturbed only when the private interest (affecting the convenience of the litigants) and the public interest (affecting the convenience of the forum) clearly point toward trial in alterative forum.

3. Piper Aircraft – airplane crash in Scotland, but US citizen on board, Scotland not the most convenient forum, but court upheld the forum using Gilbert balancing test, in the interest of the private litigants and public interest to have case in Scotland) → The fact that the substantive law of an alternative forum is less favorable to P is not conclusive and should not be given substantial weight in applying doctrine of FNC

A. Federal v. State Law in Diversity Cases

1. Erie Doctrine – the essence of Erie is that, while federal courts are free to apply their own rules of “procedure,” any issue of “substantive” law (other than a federal question) must be determined according to the laws of the state in which the federal court is located. → procedure v. substance

• 
  Overruled Shift v. Tyson which resulted in forum shopping b/c incentive to get into federal court.
  

2. Guaranty Trust Co. v. York (Outcome determinative test 1945) – Here the running statute of limitations substantially affected the outcome of the litigation. Therefore, it was substantive within the Erie mandate, and state law controlled. Since the state statute of limitations had run before commencement of action, the case was properly dismissed.

• 
  Under the ODT, fed courts have been rqd to follow state practice in such quasi-procedural areas as the effect of res judicata, determination of date of official commencement of law suit, sufficiency of minimum jurisdictional contacts, burden of proof, and conflict-of-law rules
  

3. Byrd v. Blue Ridge Rural Electric Cooperative, Inc. (Court begins to retreat from complete acceptance of ODT 1958) – application of state law would deprive P of jury trial upon a major part of his case. Rather the DC must determine for itself, using federal guidelines, whether jury trial upon the issue is proper keeping in mind the strong federal preference for jury trial. → The preference for state law must be balanced against the deprivation of federal rights resulting form application of state law, a test that a separate from, and intended to augment, the ODT.

• 
  The preference for state law is not binding if application of such a law would deprive one party of a strongly protected federal right, even if the standard ODT is met.
  

4. 28 USC 2072: “Enabling Act” allowed the SC to “prescribe, by general rules…the forms of process, writs, pleadings, and motions, and the practice and procedure in civil actions at law” for the federal courts

5. Hanna v. Plumer (adherence to federal rules where they do not affect choice of forum) – left service process with his wife, D claimed that this service conflicted with a MA statute making special provision for service upon the executor → Process must be governed by Federal Rules even though it is outcome determinative because overriding a fed rule would disembowel either the Constitution’s grant of power over federal procedure or Congress’ attempt to exercise that power in the Enabling Act

• 
  The modern rule is that in case of conflict between Federal Rules and state law, the Federal Rules control (i.e. such matters are presumptively procedural)
  

6. Walker v. Armco Steel Corp ( No conflict between federal and state laws) – Issue: In diversity action, should the federal court follow state law in determining when an action is commenced for the purpose of tolling the state of limitations? Yes.

• 
  Rule 3 is not intended to toll statutes of limitations or displace tolling rules. It governs the date from which the various timing requirements of the FRCP begin to run. It does not replace the policy determination sound in state law: (1) actual service establishes a deadline (2) after certain period of time unfair to require defense to old claim
  
• 
  Hanna v. Plumer does not apply. (Law not intended to overstep)