1391(c)(2) and (d): Residence of Corporate and Noncorporate entities
(c)(2) single district state: (covers incorporated and unincorporated businesses and partnerships) resident of the state where personal jdx is established (ie: headquarters or place of incorporation or minimum contacts)
(d) multi-district state: (corporate entities): districts are treated as separate states and based on personal jdx contacts with the districts (can be more than one)
For unincorporated entities, entity could be deemed resident of any district in multidistrict state regardless of contact w district as personal jdx has been satisfied statewide.
Transfer of Venue in Federal Court
1404(a) (filed in right court) transfer motion can be filed by P or D to wherever action under court’s discretion
P and D can bring suit to one where court initially did not have personal jdx or proper venue if both parties agree
Substantive state law of transferor court is applied and follows the case (ex: state X state Y, state X law applied)
Federal law of circuit in which transferee court sits will be applied (based on notion that federal laws is uniform throughout nation)
(Strong preference for P’s choice of forum)
1) Ease of access to sources of proof
2) Availability of compulsory process for unwilling witnesses
3) Cost of obtaining attendance of willing witnesses
4) Practical problems that make trial easy, expeditious and inexpensive
5) Public interest factors: congestion of court docket, local community interest, forums familiarity w/ law
Skyhawke Tech v. DECA: P (MS) is patent assignee that filed claims against DECA (CA/Korea) for patent infringement on golf GPS product. Filed in MS court and D motion to transfer venue to CA. Standard is that movant has to demonstrate that transferee venue is clearly more convenient (general respect for P’s choice of venue). Court applies private and public interest factors. In all 4 private interest area transfer for D is neutral or only slightly weighs in its favor. Held: D did not show that preferred venue was clearly more convenient.
1406(a) (filed in the wrong court) court can either dismiss or transfer to right court
Substantive state law of transferor court does not apply if transferred
Federal law of circuit in which transferee court sits will be applied (based on notion that federal law is uniform throughout nation)
Steps for transfer:
Step 1) Apply 1391 to all claims and all Ds to determine if venue is correct or not
Step 2) Apply 1391 to the venue Ds want to have case transferred to to determine if venue is proper or not
Step 3) Apply either 1404(a) or 1406(a) apply discretionary factors
Step 4) Determine which substantive law will be applied
Forum Selection Clauses: Provision under K which parties to K can designate appropriate forum for suit
Step 1: Does the clause apply because the lawsuit falls w/in terms of clause?
Step 2: Is clause enforceable?
Clauses come w strong presumption of enforceability (by express or implicit negotiation)
Breman Standard: Defeat presumption must clearly show enforcement would be unreasonable and unjust or that clause was invalid for reasons as fraud or overreaching OR if enforcement would violate strong public policy as declared by statute or judicial decision
Jones v. GNC Franchising: Jones (CA) a franchisee sued GNC (PN) in a CA state court and parties had signed franchise agreement that had exclusive forum clause stating that any lawsuit will be brought in federal or state court in PN. D moved to federal court based on diversity and then moved under 1406(a) to dismiss or transfer to PN OR under 1404(a). Held: No transfer under 1406(a) b/c CA Business and Professional Code expressly invalidates any franchise agreement with forum selection clause and Breman made this a public policy exception. No under 1404(a) b/c weighing of private and public factors GNC failed to meet burden of showing that PN more appropriate forum (factors of GNC’s forum selection clause and CA code statute barring forum selection clauses were relevant factors)
Laws on forum selection clause is federal C/L practice, so states adopt their own doctrines
Step 3: What type of clause
Exclusive clause: only forum that suit may be brought (“must be”)
DC must grant motion to dismiss if clause does not give federal venue option
Type 1) enforceable, exclusive and NO otherwise correct statutory federal venue option & motion to dismiss court must dismiss
Type 2) enforceable, exclusive and there IS otherwise correct statutory federal venue & motion to transfer
Some courts will retain or dismiss based on 1404(a) balancing factors;
Others see “exclusive” clause as defeating any venue that is legitimately established by statute and dismiss
Permissive clause: suit may be filed in that forum but does not preclude filing in other proper venues (“may be”)
Federal option just based on whether you can file in that federal forum or not
Step 4: (If permissive) then there is discretion to transfer if there is a federal option apply discretionary factors under 1404(a)
Forum non conveniens
Forum non conveniens: C/L dismissal doctrine that permits court to decline jdx in order to permit suit to be filed in more convenient forum
Used by federal court when more convenient forum is foreign country
Used by state court when more convenient forum is foreign country or sister state
States do not follow the requirements below
CA ex: alternate forum is a forum where a party will be subject to service of process, so much easier to find forum non conveniens
Requirements (federal): D’s heavy burden of proof
1) there must be an alternate forum
forum is adequate so long as it provides the P w/ some remedy
2) the balance of private and public concerns implicated by choice of forum weighs heavily in favor of dismissal (Gilbert factors)
1) relative ease of access to sources of proof
2) availability of compulsory process of attendance of unwilling and willing witnesses
3) possibility of view of premises (if view appropriate)
4) all other practical problems that make trial of case easy and expeditious and inexpensive
1) administrative difficulties flowing from court congestion
2) local interest in having localized controversies decided at home
3) interest in having trial in diversity in forum that is home w law that must govern
4) avoidance of unnecessary conflicts in foreign law
5) unfairness of burdening citizens in unrelated forum w jury duty
Piper Aircraft v. Reyno: Scottish residents were killed in plane crash in Scottish highlands that was operated by a Scottish taxi service and owned by a British company, both of which were in the UK. The wreckage is in England. The plane and propellers were made by US companies Piper (PN) and Hartzell (OH) respectively. Reyno administratix of the passengers filed wrongful death claiming strict liability against Piper and Hartzel in CA Superior Court b/c Scottish law does not recognize strict liability. Ds removed case to federal court in PN and then moved to dismiss based on forum non conveniens. D args that majority of third party Ds and crucial witnesses are in Scotland it would be fairer to bring all parties in one case and present to jury and Scotland has more interest in outcome of litigation than PN. Held: 1) granting forum non conveniens b/c one forums law is more favorable than another is not an appropriate reason for dismissal b/c courts would have to get into substantive and comparative law (not the purpose of forum non conveniens). 2) DC did not abuse discretion in applying Gilbert factors and Scotland has overwhelming interest in case and better to resolve in one case.
THE ERIE DOCTRINE AND RELATED PROBLEMS
Substantive law: defines rules, rights, obligations and enforcement remedies
Procedural law: solely to formal methods of litigation in court
Federal Procedural Laws:
2) Formal rules (Fed Rules of Civ Pro, Fed Rules of Appellate)
3) Judge-made procedure (ex: forum non conveniens)
Federal court hearing state law issue (diversity suit and supplemental jdx)- federal procedural law is followed but applies the law of the state that the court would apply
(*not: applies laws of the state b/c of choice of law a state could apply another state’s laws)
federal ruling on state law issue does not become part of state substantive law (ie: federal courts cannot make state law)
State court hearing federal law issue- state applies federal substantive law
Pre-Erie: (Swift v. Tyson) “Federal General C/L”- federal interpretation of law is equal to state law; underlying idea that there is one true law
Local law gets deferred to states (such as prop law) problem, what is general law and what is local law?
Erie Railroad v. Tompkins: P was injured by a train operated by D in PN. P files negligence suit in NYDC; D’s arg was accident happened in PN (in PN C/L P was trespasser and therefore no normal duty of care, P must show D acted willfully or wantonly); Ps arg was that PN law doesn’t apply b/c under Swift the general C/L applies here. NYDC applied federal C/L and not state law of PN b/c this was an issue of “general law” Held: Unconstitutionality of Swift: constitution operates by vesting certain powers in the federal gov’t; anything not expressly vested are reserved to states both impliedly and expressly; No such thing as federal C/L and federal courts cannot make state laws
Choice-of-law: Federal court sitting in diversity’s decision to apply state X’s laws or state Y’s laws (usually arises when events leading to claim occurred in one state and P filed in another state)
Federal court applies the same substantive law the forum state court would apply (won’t always be the forum state)
Federal court refers to state statutes, constitutions, rules and judicial decisions in determining content of law (ie: how the highest court in that state would apply the law)
Three-Track Approach : What if there is a conflict btwn federal procedural law and state substantive law?
Ex: Statute of limitations: defines temporal scope of rights/enforcement remedy (substantive) and when you are allowed to file a claim (procedural); state and federal have diff laws
Supremacy clause: Article 6 of Constitution
Valid federal law (pursuant to the Constitution) trumps state law to the contrary always
Federal procedural law rule: If procedural law is “valid” then federal law trumps state law
STEP 1 (conflict): Is there a real conflict btwn state and constitutional law?
1. Identify potential conflict or possible inconsistency
2. Identify issue that conflict is around
3. Is the federal statute sufficiently broad to control the issue?
Always refer to text of statute to determine if it is broad enough
STEP 2 (validity): If there is a conflict is federal law valid?
Track 1: Federal Statute (28 USC …)
i. Must be rationally classifiable as procedural
ex: 1404(a) allows transfer of a case from one proper venue to another proper venue ~ operates w/in federal litigation system and promotes fairness and efficiency
Track 2: Formal Federal Rule (via Rules Enabling Act) (FRCP, FRAP)
i. Must be rationally classifiable as procedural AND
ex: 14 allows joinder of party for indemnity ~ operates for courts to efficiently adjudicate a matter concerning all related parties interests and rights.
ii. May not abridge, modify or enlarge any substantive right
a) Identify the potentially altered right (most likely asserted by P)
b) Ask 3 questions in relation to underlying right:
1. Has the federal rule changed any element of the claim?
2. Has the federal rule altered the remedy to enforce claim?
3. Has the federal rule altered statute of limitations?
Extra steps likely not; Procedural penalty fee likely not; Shortening of service time likely not
*RE: Shady Grove pluralist opinion: federal rules should be uniform throughout US and not dependent on nuances of state law or particular circumstances of pending case therefore very unlikely that federal rule will ever “on its face” abridge, enlarge or modify substantive right
Dissent: REA clearly permits “as-applied” challenges
For now: apply both facial and as-applied challenges
Track 3: Judge-made principle
i. Must be rationally classifiable as procedural AND
ii. Does it function substantively in this case?
Refined Outcome Determinative test: At the forum shopping stage is there a substantial advantage to the federal forum over state court such that the P chooses the forum
Ex A: Federal law permits service of process at party’s usual place of abode and state law requires personal service No. No substantive advantage (may be more convenient but does not alter underlying elements of claim, remedies or timeframe of when suit can be brought)
Ex B: P files suit seeking equiatable accounting of trust’s assets but filed it after state law’s applicable statute of limitations. Federal court has judge-made doctrine of laches that allows case to proceed as matter of equity Yes. P would clearly choose federal forum over state since federal court will allow claim and state would not
Ex C: Federal court can reduce potentially excessive jury verdict only if damages “shock the conscience” (standard is highly deferential to jury’s verdict) and State X’s court a judge can reduce size of amount “deviates materially” from damages awarded in similar cases (less deferential toward jury) In between. “forum effective”
Gasperini: court determined state standard must be applied.
STEP 3: If federal standard is sufficiently broad to control and valid must apply federal standard per Supremacy Clause
Ex: P and D PI/negligence case where P provided 2 eye witnesses that corroborated her version of the story which would make D liable. Jury verdict returned for D. P filed motion 50a2 which is a motion for judgment as matter of law. D points to part in rule which does not allow post judgment motion under this rule and P points to state law that allows post judgment. Does not modify elements of her claim, or remedy or alter statute of limitations. Option to file motion before judgment unlikely would be a factor when forum shopping.
PLEADINGS AND DISCOVERY
Complaints: initiates the case
Answer to complaints: response
Demurrers: not available in federal court; way of saying P has failed to state facts on which claim may be asserted
[C/L Pleading (a.k.a equity pleading or issue pleading)]
every case could be reduced to single issue and court and issue decides
12 categories of forms that you fit your case into
reform led to code pleading
Issue pleading reform Code Pleading & Notice Pleading
Code Pleading (fact pleading)
1 action only: civil action and liberal joinder of parties and claims
Complaints are facts constituting cause of action; facts supporting each element of the claim; Ultimate facts
CA Fact Pleading:
Doe v. Los Angeles (CA case): Civ Pro code extends statute of limitations for victims of sexual abuse to sue Ds that “knew or had reason to know or was otherwise on notice of unlawful sexual conduct by employee or agent.” Doe 1 and 2 came forward filing complaint against BSA and LAPD as employers of Kalish (abuser). Allegations included 1) D inadequately supervised program at the station b/c officers engaged in improper activity w scouts 2) general allegations that BSA was aware of past incidents of sexual molestation among scout leaders and that prior Ds were aware of sexual misconduct w scouts at those specific stations 3) BSA was aware of prior sexual abuse and from these incidents they could infer a comparable number 4) Other police officers aware of Kalish’s pedophilia tendencies: fraternizing w boys, trips to Thailand, relationship w pornographer 5) allegations pertaining to Kalish’s molestation of P while on duty. Held: Ps failed to state sufficient complaint that Ds had knowledge of Kalish’s sexual conduct w Ps; just that Ds had knowledge of misconduct of Kalish that created risk of sexual abuse is not enough under the terms of the statute. Ps allowed to allege things on information and belief but must still be derived from information that is factual
Doctrine of less particularity (same as ultimate facts): Senate bill that attempted to allow victims to have claim against perpetrator’s employer b/c they concealed from victim the sexual abuse (not b/c evidence was lost or memories fade after a long time) but b/c evidence of concealment is in possession of employer Ps not eligible for this b/c complaint still does not include facts that allege D had this information about Kalish
3 types of facts:
1) Ultimate fact: reports on Kalish’s activity between a certain time period (court is looking for ultimate facts)
2) Evidentiary fact: who testifies and what they’ll say
3) Conclusions of law: Ds knew about Kalish’s sexual abuse
3 levels of specificity:
1) General standard: ultimate facts require a factual narrative and connection to every element of claim
Less Particularity Doctrine is the same as ultimate facts standard
2) Heightened standard (in narrow range of cases)- ex: fraud and complex allegations of causation
3) Conclusions of law: don’t count toward sufficiency of a claim, but you may still include it
Notice Pleading and Federal Rules of Civ Pro
Federal Reform: Notice pleading a.k.a. “simplified pleading:” so long as information was sufficient to appraise the other side of what the case is about
Other motions such as summary judgment or discovery conferences can narrow down factual dispute
Rule 8(a): pleading states claim for relief requires:
(1) short and plain statement of SMJ
(2) short and plain statement of claim showing pleader is entitled to relief
(3) demand for relief sought
Using forms comply to Rule 8 (appendix)
Ex: Form 11: negligence form: on this date D did ____, P demands _____ for damages; Form 7: allege diversity case form: P is ____ or corporation in _____; D is citizen of _____
3 exceptions to rule 8
1) Rule 9(b): alleging fraud or mistake, party must state w particularity the circumstances constituting fraud or mistake (“heightened pleading” standard)
Malice and knowledge may be alleged generally though
2) Statutes: federal statutes (mostly in business litigation area) where Congress has imposed higher pleading standard
Ex: (Private Securities Litigation Reform Act) complaint required to specify why statements have been misleading and if allegation regarding statement is made on information and belief, the complaint shall state w/ particularity all facts on which belief is formed.
3) Judge-made: C/L realm of heightened pleading
Ex: Lower federal courts were imposing a higher pleading standard complaints under civil rights action under 1983 and other complex cases
Leatherman v. Tarrant County Narcotics: Ps sued local county when officers forcibly entered home based on detection of narcotics odors and one P claimed he was assaulted by officer and other said officers entered in her absence and killed her 2 dogs. Claim under 1983 that local or state police conduct violated 4th Amendment rights and County failed to train officers in manner that complies w/ constitutional limits. D argues that 5th circuit has created heightened pleading standard for complaints under 1983 and Ps do not meet this. Held: rejects D’s arg that heightened pleading standard should be applied b/c Rule 8(a)(2) for short and plain statement holds and although Rule 9(b) gives exceptions Congress did not expressly provide for 1983 to be held to higher pleading standard, so court will not interpret it so.
Move from interpreting Rule 8 as Notice Pleading Code pleading?
Ashcroft v. Iqbal: P Iqbal was detained by federal officials after 9/11 and filed, via Bivens action, complaint alleging that he was subjected to harsh conditions of confinement b/c of his race, religion or national origin. Sues Ashcroft and Mueller that each knew of condoned, willfully and maliciously agreed to subject respondent to harsh conditions of confinement as matter of policy based on race, religion national origin. Ashcroft as the principal architect of policy and Mueller as instrumental to its adaptation and promulgation. Complaint includes claims against other Ds (officers) that kicked him in the stomach, punched him, subjected him to serial strip and body cavity searches when he posed no safety risk to himself or others and refused to allow him to pray. Bivens right of action requires policies adopted for the “purpose” of discrimination. Held: Iqbal did not plead sufficient facts. After all legal conclusions are excised, what’s left are facts about a policy detaining Arab men after 9/11. Court follows what Twombly suggested in anti-trust dispute that Ps facts of parallel conduct of Ds smaller utility providers was not sufficient to establish that there was concerted effort. Suggests a higher level of pleading required and Iqbal affirmatively applies this standard to Rule 8
*Issue in Kennedy’s opinion: He infers that there is a difference between general allegation (that is permissible in 9(b)) and conclusory one which is not but doesn’t explain what the difference is
IDEES: Identify, Elementize, Excise and Scrutinize