Civ Pro

Question 1

Service of summons

Answer 1

Under Federal Rule of Civil Procedure 4(h), service upon a corporation may be effected within a
United States judicial district by “following state law for serving a summons in an action brought
in courts of general jurisdiction in the state where the district court is located or where service is
made,” or “by delivering a copy of the summons and of the complaint to an officer, a managing
or general agent.”

Question 2

Diversity jurisdiction

Answer 2

The diversity jurisdiction statute, 28 U.S.C. § 1332(a)(1), grants original federal jurisdiction to
the United States District Courts in cases “where the amount in controversy exceeds . . . $75,000 . . . and is between (1) citizens of different States.” Diversity of citizenship is determined as of the time the suit is filed.

Question 3

Original jurisdiction - matters arisun under the laws of the US

Answer 3

Pursuant to 28 U.S.C. § 1331, federal courts have “original jurisdiction of all civil actions arising
under the . . . laws . . . of the United States.” This provision gives a federal court subject-matter
jurisdiction over any case in which a plaintiff’s well-pleaded complaint alleges a cause of action
based on federal law.

Question 4

Domicile, and change of domicile, in diversity jurisdiction matters

Answer 4

The citizenship of individuals for diversity purposes is determined by domicile at the time of the
lawsuit. Domicile continues until changed. A person can change her domicile by (1) taking up residence in a new jurisdiction with (2) the intent to remain there indefinitely.

Question 5

Court considerations in diversity cases

Answer 5

Courts look at a variety of facts, none of which is dispositive on its own (and many of
which can be manipulated by the individual concerned) in an attempt to determine the
individual’s true, fixed, permanent home and the place to which the individual intends to return
when absent. Relevant facts include the individual’s residence, the location of the person’s
property, the person’s voting behavior, the location of bank accounts, the individual’s
memberships and personal associations, automobile registration, place of employment, and other matters.

Question 6

Determining the citizenship of a corporation

Answer 6

The airline’s citizenship for diversity purposes is determined by both the place of its
incorporation and the place where it has its principal place of business.

Question 7

General jurisdiction over a corporation

Answer 7

General (all-purpose) jurisdiction is proper over a corporation only when “the continuous
corporate operations within a state [are] so substantial and of such a nature as to justify suit . . .
on causes of action arising from dealings entirely distinct from those activities.”

Although courts and commentators often have described the standard for general jurisdiction as
whether a corporation has engaged in a “substantial, continuous and systematic course of
business” in a state, the Supreme Court has recently described that standard as “unacceptably
grasping.” The proper test is not whether the activities are “continuous and systematic,” it is
whether the business’s “affiliations with the State are so ‘continuous and systematic’ as to render [it] essentially at home in the forum state.” There are “only a limited set of affiliations with a forum” that will justify concluding that the corporation is “essentially at home” there. The
paradigmatic affiliations are place of incorporation and principal place of business, each of which has “the virtue of being unique . . . as well as easily ascertainable.”

Question 8

Corporations domicile - nerve center test

Answer 8

In Hertz Corp., the Supreme Court decided that a corporation’s principal place of business for
diversity purposes would be deemed to be “the place where a corporation’s officers direct,
control, and coordinate the corporation’s activities,” its so-called “nerve center.”

Question 9

When a defendant can bring a nonparty into action

Answer 9

Federal Rule of Civil Procedure 14(a) authorizes a defendant to bring a nonparty into an action
only in very limited circumstances. If the defendant claims that the nonparty “is or may be liable to [the defendant] for all or part of the claim against it,” then the defendant may bring a third-party complaint against the nonparty and the nonparty may be joined as a third-party defendant.

Question 10

Personal jurisdiction

Answer 10

Rule 4(k) indicates that a federal district court may exercise personal jurisdiction to the same extent as a state court of general jurisdiction in the state where the district court sits. State A’s long-arm statute extends jurisdiction as far as the Due Process Clause of the 14th Amendment allows. The Due Process Clause permits the exercise of personal jurisdiction over out-of-state defendants like the distributor if they have minimum contacts with the forum state such that the exercise of jurisdiction would not offend traditional notions of fair play and substantial justice.

Question 11

Transient jurisdiction

Answer 11

In Burnham v. Superior Court of California, a unanimous Supreme Court held that a court’s
exercise of such “transient jurisdiction,” i.e., jurisdiction based on physical presence alone, is
generally consistent with due process. A plurality concluded that transient jurisdiction is
constitutional simply “because it is one of the continuing traditions of our legal system that
define the due process standard . . . .” Although five members of the Court believed that tradition alone did not warrant upholding the constitutionality of transient jurisdiction, they did all agree at least that “the Due Process Clause of the Fourteenth Amendment generally permits a state court to exercise jurisdiction over a defendant if he is served with process while voluntarily
present in the forum State.”

Question 12

Subject matter jurisdiction

Answer 12

Under 28 U.S.C. § 1331, district courts may exercise subject-matter jurisdiction over “all civil
actions arising under the Constitution, laws, or treaties of the United States.” As a general rule,
causes of action that are created by federal law qualify for federal-question jurisdiction while
those created by state law do not.

Question 13

Determination of state citizenship

Answer 13

State citizenship for individual U.S. citizens is determined by their domicile: the true, fixed,
permanent home to which the individual intends to return when absent.

Question 14

Venue

Answer 14

28 U.S.C. § 1391(b) governs venue in this action. Under § 1391(b), venue is appropriate “in (1) a judicial district in which any defendant resides, if all defendants are residents of the State in
which the district is located, (2) a judicial district in which a substantial part of the events or
omissions giving rise to the claim occurred, . . . or (3) if there is no district in which an action
may otherwise be brought . . . , any judicial district in which any defendant is subject to the court’s personal jurisdiction with respect to such action.”

Question 15

Rule 11 Filing

Answer 15

Every pleading, written motion, or other paper (except for discovery requests and responses)
must be signed by an attorney, or by a party if the party is unrepresented. An attorney’s signature on a pleading “certifies that to the best of the person’s knowledge, information,and belief, formed after an inquiry reasonable under the circumstances”

(1) the pleading is not being presented for an improper purpose . . .;
(2) the . . . legal contentions are warranted by existing law or by a nonfrivolous argument for changing existing law;
(3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and
(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information.

Question 16

Rule 11 Reasonableness Standard

Answer 16

A lawyer who files an inaccurate pleading is not subject to sanctions if the lawyer acted in good faith after making a pre-filing “inquiry” that was “reasonable under the circumstances.” Reasonableness is judged as of the time the pleading was submitted, and depends on “such factors as how much time for investigation was available to the signer; whether he had to rely on a client for information as to the facts underlying the pleading, motion, or other paper; whether the pleading, motion, or other paper was based on a plausible view of the law; or whether he depended on forwarding counsel or another member of the bar.”

Question 17

Seeking sanctions under Rule 11

Answer 17

Before a party may seek sanctions under Rule 11, the party must serve on the opposing party a
motion that describes the specific conduct that allegedly violated the rule. The opposing party
must be given 21 days to withdraw or correct the challenged pleading. If the 21-day period
passes, and the pleading is not corrected, the motion for sanctions may be filed with the court.

Question 18

Types of sanctions under Rule 11

Answer 18

“Whether a violation has occurred and what sanctions, if any, to impose for a violation are
matters committed to the discretion of the trial court . . .” Sanctions should be “limited to what
suffices to deter repetition of the conduct or comparable conduct by others similarly situated.”
Sanctions can be monetary or nonmonetary. If the sanctions are monetary, they can include “an
order to pay a penalty into court; or, if imposed on motion and warranted for effective
deterrence, an order directing payment to the movant of part or all of the reasonable attorney’s
fees and other expenses directly resulting from the violation.” Examples of nonmonetary
sanctions would be “striking the offending paper; issuing an admonition, reprimand, or censure;
requiring participation in seminars or other educational programs; . . . or referring the matter to
disciplinary authorities . . .”

A non-exhaustive list of factors the court may consider in deciding what sanctions, if any, should be imposed for a violation includes whether the improper conduct was willful, or negligent; whether it was part of a pattern of activity, or an isolated event; whether it infected the entire pleading, or only one particular count or defense; whether the person has engaged in similar conduct in other litigation; whether it was intended to injure; what effect it had on the litigation process in time or expense; whether the responsible person is trained in the law; what amount, given the financial resources of the responsible person, is needed to deter that person from repetition in the same case; what amount is needed to deter similar activity by other litigants.

Question 19

Who can be subject to Rule 11 sanctions?

Answer 19

The court may impose sanctions on “any attorney, law firm, or party that violated the rule or is
responsible for the violation.”

Question 20

Personal jurisdiction

Answer 20

A federal court can exercise personal jurisdiction over a defendant who is subject to the
jurisdiction of the courts of the state in which the federal court sits. In this case, State B’s courts
exercise jurisdiction to the limits of the Constitution.

In Helicopteros Nacionales de Colombia, S.A. v. Hall, the Supreme Court recognized a distinction between “general jurisdiction” (also called “all-purpose” jurisdiction), which permits a court to exercise jurisdiction over any claim against a defendant if the defendant has extensive connections with the forum, and “specific jurisdiction” (also called “case-linked” jurisdiction), which permits a forum to hear a case only if the suit arises out of or relates to the defendant’s forum contacts.

Question 21

Personal jurisdiction in state and federal courts

Answer 21

Federal district courts may exercise personal jurisdiction to the same extent as the courts of
general jurisdiction of the state in which the district court sits.

Question 22

Personal jurisdiction over non residents

Answer 22

The due process clause of the Fourteenth Amendment permits states to assert personal
jurisdiction over nonresident defendants who have established minimum contacts with the state
such that the exercise of personal jurisdiction would not offend traditional notions of fair play
and substantial justice. This test may be met even if a nonresident defendant has only a few
contacts with the state, so long as the contacts relate directly to the causes of action asserted.
This is referred to as specific jurisdiction. Under the test for specific jurisdiction, a nonresident
defendant is subject to specific jurisdiction when its contacts with the forum state demonstrate
purposeful availment of the benefits of the forum state, and the cause of action is related to those contacts.

Question 23

Stream of commerce is not sufficient basis to exercise jurisdiction over the manufacturer of a product

Answer 23

In J. McIntyre Machinery, Ltd. v. Nicastro, the Supreme Court rejected the so-called “stream of
commerce” theory of personal jurisdiction and held that merely placing a product in the stream
of commerce with awareness that it might reach a particular state was not a sufficient basis to
exercise jurisdiction over the manufacturer of the product. “The exercise of judicial power is
not lawful,” said the four-justice plurality, “unless the defendant ‘purposefully avails itself of the
privilege of conducting activities within the forum State . . . .” In particular, according to the
plurality, the transmission of goods (e.g., the brochure) to the forum is a sufficient basis for
jurisdiction “only where the defendant can be said to have targeted the forum; as a general rule, it is not enough that the defendant might have predicted that its goods will reach the forum State.” Two concurring justices agreed with the rejection of the “stream of commerce” theory, although they felt that a flexible approach needed to be taken with regard to what additional facts might warrant jurisdiction in a particular case.

Question 24

Duty to preserve evidence

Answer 24

When litigation is reasonably anticipated, whether or not it has been commenced, potential
litigants in possession of evidence (including ESI evidence) that may be relevant to that litigation
have a duty to preserve that evidence.

Question 25

When does the duty to preserve evidence arise?

Answer 25

The mere existence of a dispute between the parties does not give rise to an obligation to preserve relevant information. Instead, future litigation must be ‘probable,’ which has been held to mean ‘more than a possibility.’ Thus, a letter from the plaintiff to the defendant stating a clear intent to sue and specifying the nature of the claim triggers an obligation to preserve. In addition, properly crafted pre litigation preservation letters can impose the duty of preservation.

Question 26

Consequence of failure in duty to preserve evidence

Answer 26

Rule 37 of the Federal Rules of Civil Procedure expressly addresses the sanctions that may be imposed when a party fails to take reasonable steps to preserve ESI that should have been preserved in anticipation of litigation. The rule authorizes sanctions only if the information cannot be restored or replaced through additional discovery. In some cases, for example, the lost information may be retrievable from sources that would normally be considered inaccessible because of the cost of retrieval. When such retrieval is possible, a court can require it and shift the costs to the party that destroyed the more accessible electronic record but may not impose other sanctions. Where there is no alternative source of the lost information, additional sanctions may be appropriate.

Question 27

Court considerations in determining failure in duty to preserve evidence

Answer 27

If a party is prejudiced by another party’s failure to preserve electronic information, Rule 37(e)(1) authorizes a court to impose sanctions in the form of measures no greater than necessary to cure the prejudice. The precise measures to use are entrusted to the court’s discretion. Much depends on the degree of prejudice and the means available to cure it. Serious measures might include forbidding the party that failed to preserve the information from putting on certain evidence, permitting the parties to present evidence and argument to the jury regarding the loss of information and letting the jury draw its own inference, or giving the jury instructions to assist in its evaluation of such evidence or argument.

Question 28

Sanctions where there was intent to deprive another party of information in litigation

Answer 28

Certain sanctions, including the sanctions requested here, can be used only if the court finds that the sanctioned party“acted with the intent to deprive another party of the information’s use in the litigation. The potential sanctions that require a finding of bad intent are (a) a presumption that the lost information was unfavorable to the sanctioned party, (b) an instruction to the jury that it may or must presume the information was unfavorable to the party, or (c) entry of a default judgment against the party.

Question 29

Permissive joinder - claims arising out of the same occurrence and raise a common question of fact

Answer 29

Two persons may bring their separate claims in a single lawsuit in federal court if (1) those claims arise out of the same occurrence, and (2) any question of law or fact common to all plaintiffs will arise in the action.

Question 30

Compulsory counterclaims

Answer 30

Under the compulsory counterclaim rule applicable in federal courts, a defendant must include in her answer to a complaint any claim that the defendant has against the plaintiff that arises out of the transaction or occurrence that is the subject matter of the plaintiff’s claim.

Question 31

Failure to bring a compulsory counterclaim results

Answer 31

It is well established that a failure to plead a compulsory counterclaim bars a party from bringing a later independent action on that claim. Although this result is not required by the language of the rule itself, some courts treat the subsequent action as barred by res judicata or claim preclusion, on the theory that Rule 13(a) effectively makes a compulsory counterclaim part of the claim that was decided in the first suit. Other courts have concluded that a failure to assert a compulsory counterclaim constitutes a waiver of that claim. Whatever the theory, a party that does not assert its compulsory counterclaim in the first proceeding is forever barred from asserting that claim in future litigation.

Question 32

The doctrine of collateral estoppel

Answer 32

The doctrine of collateral estoppel, or issue preclusion, provides generally that factual matters that are put in issue and directly determined by a court of competent jurisdiction must be taken as conclusively established if the same factual issue arises in a subsequent suit. A party who asserts that collateral estoppel precludes re-litigation of a factual issue must establish that (1) the previous determination was necessary to the decision; (2) the identical issue was previously litigated; (3) the issue was actually decided in a decision that was final, valid, and on the merits; and (4) the party being precluded from re-litigating the issue was adequately represented in the previous action. United Access Technologies LLC v. CenturyTel Broadband Services LLC

Question 33

When the doctrine of collateral estoppel can be asserted

Answer 33

Traditionally, collateral estoppel could only be asserted by a party to a prior action or by someone who was otherwise bound by the result in that action. However, most jurisdictions have moved away from this mutuality requirement. The Supreme Court long ago abandoned mutuality in the federal courts involving federal claims. As a result, a litigant who was not a party to a prior federal case may use collateral estoppel ‘offensively’ in a new federal suit against the party who lost on the decided issue in the first case, unless allowing estoppel would be unfair. However, some state courts continue to apply the doctrine of mutuality. In these states, a nonparty who would not be bound by a finding in the first suit contrary to the nonparty’s interest cannot use a finding from the first suit that is favorable to the nonparty

Question 34

Claim and issue preclusion

Answer 34

In Semtek International, Inc. v. Lockheed Martin Corp, the Supreme Court held that the claim-preclusive effect of a judgment of a federal diversity court should ordinarily be determined by the claim-preclusion rules that would be applied by the state courts in the State in which the federal diversity court sits. Although Semtek only addressed claim preclusion, lower courts have assumed that it applies as well to issue preclusion. Although state rules of preclusion generally apply in these circumstances, the question of the effect of a federal judgment remains a question of federal law, and state rules can be ignored in situations in which the state law is incompatible with federal interests.

Question 35

Motion for summary judgment

Answer 35

Federal Rule of Civil Procedure 56(a) allows a summary judgment motion to be granted only if “there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law JML.” An issue of fact is “genuine” if, based on the evidence presented by the nonmoving party, a reasonable jury could return a verdict for that party. A fact is “material” if it is relevant to an element of a claim or defense and its existence would affect the outcome of the case under the governing law. In determining whether there is a genuine dispute as to material fact, the court should consider the “depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials.”

Question 36

Access to non-privileged information in litigation

Answer 36

In general, a party to a lawsuit in federal court “may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense.” This includes the right to inspect and copy documents in the other party’s possession.

Question 37

Sanctions for misbehavior

Answer 37

Federal courts have inherent power to control the litigation process and can sanction misbehavior, including spoliation, even when there has been no specific violation of the Federal Rules of Civil Procedure. The range of available sanctions is broad. It can include such sanctions as the payment of expenses incurred by the other party as a result of the destruction of the evidence, an instruction to the jury authorizing it to draw an adverse inference from the destruction of the evidence, a shifting of the burden of proof on the relevant issue, or even judgment against the responsible party. In determining appropriate sanctions for spoliation, courts consider both the level of culpability of the spoliating party and the degree of prejudice the loss of evidence has caused the other party. Many courts impose severe sanctions (such as an adverse-inference instruction or the entry of judgment against the spoliating party) only when there is evidence of bad faith in the form of an intentional effort to hide information. However, other courts have said that negligence in preserving evidence can support an adverse-inference instruction.

Question 38

Rules on intervention

Answer 38

Rule 24 of the Federal Rules of Civil Procedure governs intervention, the process by which a non-party to an action may join the litigation. Under Rule 24(a) (intervention of right), a person must be permitted to intervene if three conditions are met: (1) the movant “claims an interest relating to the property or transaction that is the subject of the action,” (2) the movant “is so situated that disposition of the action may as a practical matter impair or impede the movant’s ability to protect its interest,” and (3) “existing parties” do not “adequately represent [the movant’s] interest.” The three requirements for intervention of right are often “very interrelated.”

Question 39

Temporary restraining orders

Answer 39

A TRO can be issued without notice to the adverse party, but only in limited circumstances and only for a limited time. To secure a TRO without notice, the nonprofit would need to submit an affidavit containing specific facts that demonstrate a risk of “immediate and irreparable injury” if a permit is issued. In deciding whether to grant a TRO, courts will also consider the same factors that are relevant in deciding whether to grant a preliminary injunction (e.g. the moving party’s likelihood of success on the merits, the balance of hardships, and the public interest). The TRO would last only long enough for the court to consider and resolve a request by the nonprofit for a preliminary injunction, but no longer than 14 days (unless the court extends it for good cause or the adverse party consents to an extension). In addition, bond is required.

Question 40

Preliminary injunction

Answer 40

Rule 65 of the Federal Rules of Civil Procedure sets out the procedural requirements for preliminary injunctions. Preliminary injunctions may be granted only upon notice to the adverse party, and only if the movant “gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained.” While Rule 65 sets out the procedural requirements for preliminary injunctive relief, it does not specify the substantive grounds upon which it may be granted. The court’s discretion in ruling upon a motion for a preliminary injunction “is exercised in conformity with historic federal equity practice.” The court typically considers four factors: (1) the significance of the threat of irreparable harm to the plaintiff if the injunction is not granted, (2) the balance between this harm and the injury that granting the injunction would inflict on the defendant, (3) the probability that the plaintiff will succeed on the merits, and (4) the public interest. The most important of these factors is the risk of irreparable harm to the plaintiff. If the plaintiff has an adequate remedy at law (e.g., if money damages can compensate the plaintiff for its loss), then a preliminary injunction will be denied.

Question 41

Defendants have the burden of pleading affirmative defense

Answer 41

A defendant has the burden of pleading all affirmative defenses. Federal Rule of Civil Procedure 8(c) is very clear when it states that a party defending a claim “must affirmatively state any avoidance or affirmative defense . . . .”

Question 42

When a court should give leave to amend pleadings

Answer 42

Under Rule 15(a)(2), a district court “should freely give leave [to amend] when justice so requires.” The Supreme Court has defined this standard “negatively” by indicating that amendments should be allowed unless they result in a form of injustice. The categories of injustice the Court describes are undue delay, bad faith or dilatory motive, repeated failure to cure defects by amendment, undue prejudice to the party opposing the amendment, or futility of the amendment.

Question 43

Class Actions

Answer 43

In 2005, Congress amended the federal diversity-jurisdiction statute, 28 U.S.C. § 1332, to allow large class actions to be brought in federal court, even if there is not complete diversity between the defendants and the plaintiffs. Under § 1332(d)(2)(A), a federal district court can exercise diversity jurisdiction over a class action if (i) “the matter in controversy exceeds the sum or value of $5,000,000” and (ii) “any member of a class of plaintiffs is a citizen of a State different from any defendant” (i.e., “minimal diversity”).

Question 44

Claims based on state-law rights brought in federal court are governed by federal procedure

Answer 44

The Supreme Court held that federal courts sitting in diversity must look to state law for the substantive rules of decision governing such cases. However, in a series of subsequent cases, the Court made clear that federal law would continue to govern procedural matters in federal court, even if the federal procedure affected the outcome of the litigation. In Shady Grove, the Court considered a New York law barring class actions to enforce statutory damages claims. The Court concluded that such actions can be maintained in federal court, despite the state law, if the action is authorized by Rule 23. According to the Court, Rule 23 is both a procedural rule within the scope of the Rules Enabling Act and a rule that entitles “a plaintiff whose suit meets the specified criteria to pursue his claim as a class action.” 559 U.S. at 398.