Civ Pro Workshop Flashcards
Questions flagged or missed (12 cards)
A seller entered a contract with a buyer
under which the buyer agreed to purchase
certain corporate securities for $500,000.
The buyer refused to go through with the
purchase, contending that the entire transaction
was void because of federal securities
statutes. The seller thus sold the securities
to another party but was able to sell them
for only $420,000. The seller filed an action
against the buyer in federal district court,
alleging that the transaction did not violate
federal securities statutes and seeking
$80,000 for the buyer’s breach of contract.
The seller and the buyer are both citizens of
the same state.
Does the federal court have subject matter
jurisdiction over the action?
(A) Yes, because the action raises the
federal issue of whether the transaction
violated federal securities statutes.
(B) Yes, because the amount in controversy
exceeds the required minimum
for purposes of federal question jurisdiction.
(C) No, because the buyer and seller are
citizens of the same state and the
action does not arise under federal law.
(D) No, because the amount in controversy
for purposes of federal question jurisdiction
is not sufficient.
C No, because the buyer and seller are
citizens of the same state and the
action does not arise under federal law.
The federal court does not have subject matter jurisdiction because neither federal question jurisdiction nor diversity of citizenship jurisdiction exists under these facts. Diversity of citizenship jurisdiction is available when (i) there is complete diversity of citizenship, meaning that each plaintiff is a citizen of a different state from every defendant; and (ii) the amount in controversy exceeds $75,000. Here, since the seller and buyer are both from the same state, complete diversity does not exist. Federal question jurisdiction is available when the plaintiff, in his well-pleaded complaint, alleges a claim that arises under federal law. Anticipation of a federal defense or the fact that federal law is implicated by the plaintiff’s claim do not give rise to federal question jurisdiction; the plaintiff’s claim must arise under federal law. Here, the plaintiff is anticipating that the defendant might raise federal securities laws as a defense, which is not enough to give rise to federal question jurisdiction. (A) is incorrect because the federal question is raised by the anticipation of a federal defense, which is not sufficient to give rise to federal question jurisdiction, as described above. (B) and (D) are incorrect. Both imply that there is a required jurisdictional minimum for federal question jurisdiction. Federal question jurisdiction does not require that any particular amount be in controversy.
A citizen of State A filed a breach of
contract action against a citizen of State B
in a State A state trial court. The State B
defendant timely and properly removed the
action to the United States District Court for
the District of State A. The defendant then
filed a motion to dismiss the action based
on insufficient service of process. Following
a hearing, the court found that service was
proper and denied the motion. The defendant
then filed her answer, responding to the
merits of the complaint and asserting that
the case should be dismissed on the grounds
that another action was pending between the
same parties for the same cause in a State
B state court. The State A Rules of Civil
Procedure provide that a party waives the
right to seek dismissal on that ground if the
party files a pre-answer motion to dismiss
and does not assert that ground in the
motion.
Should the federal court hold that the
defendant has waived the right to seek
dismissal based on the pendency of the same
cause in another court?
(A) Yes, because this action was commenced
in a State A state court, so the
federal court must apply State A law.
(B) Yes, because this action is in a federal
court in State A on the basis of the
court’s diversity of citizenship jurisdiction,
so the federal court must apply
State A law.
(C) No, because this issue is unlikely to
affect the outcome of the action or to
create forum-shopping, so the federal
court should apply federal law, under
which the defendant has not waived
this defense.
(D) No, because this issue is governed by
the Federal Rules of Civil Procedure,
under which the defendant has not
waived this defense.
D No, because this issue is governed by
The defendant has not waived this defense. Unlike the state rule here, Federal Rule of Civil Procedure 12 does not require the defendant to raise the defense that another action is pending between the parties in the first responsive pleading. While the federal court exercising diversity of citizenship subject matter jurisdiction must apply state substantive law (here, State A law), applicable Federal Rules of Civil Procedure supersede state law in federal court as long as the rule comports with the requirements of the Rules Enabling Act (i.e., the rule governs practice and procedure and does not modify or abridge substantive rights). (A) and (B) are incorrect because they are too broad. The federal court need not apply State A procedural law. (C) is incorrect because, if the rule in question is on point and clearly procedural, it is simply applied. There is no need to determine if its application would affect the outcome of the case.
A researcher and an analyst had employment
contracts with a corporation. The
corporation fired them because it believed
they had conspired to give its trade secrets to
a competitor. Knowing that the conspiracy
allegations were not true, the researcher and
the analyst sued the corporation in federal
district court for breach of their employment
contracts. The researcher seeks $100,000
in damages and the analyst seeks $50,000.
They are both citizens of State A. The
corporation is incorporated in State B, and
its principal place of business is in State B.
Does the federal district court have
subject matter jurisdiction over both of the
claims?
(A) Yes, the court has diversity of citizenship
jurisdiction over both claims
because the amounts of their related
claims may be aggregated to satisfy the
amount in controversy requirement.
(B) Yes, the court has diversity of citizenship
jurisdiction over the researcher’s
$100,000 claim and supplemental jurisdiction
over the analyst’s $50,000 claim.
(C) No, the court does not have subject
matter jurisdiction over the analyst’s
$50,000 claim because the claims of
both plaintiffs may not be aggregated
to satisfy the amount in controversy
requirement.
(D) No, the court does not have subject
matter jurisdiction over either claim
because the breach of contract claim is
based on state law.
B Yes, the court has diversity of citizenship
jurisdiction over the researcher’s
$100,000 claim and supplemental jurisdiction
over the analyst’s $50,000 claim.
The court has jurisdiction over both claims but under different bases. Generally, every claim in federal court must have a basis for federal subject matter jurisdiction. There are three main flavors of federal subject matter jurisdiction-diversity of citizenship jurisdiction, federal question jurisdiction, and supplemental jurisdiction. Diversity of citizenship jurisdiction is available when (i) there is complete diversity of citizenship, meaning that each plaintiff is a citizen of a different state from every defendant; and (ii) the amount in controversy exceeds $75,000. A natural person’s citizenship is the state that is the person’s permanent home. A corporation is a citizen of every state in which it is incorporated and the one state in which it has its principal place of business. The amount in controversy is determined by the plaintiff’s good faith allegation. In the instant case, the facts state that the researcher and the analyst are citizens of State A, and that the corporation was incorporated and has its principal place of business in State B. As a result, complete diversity exists. The researcher claims $100,000, presumably in good faith. Therefore, the researcher may claim diversity jurisdiction to have his claim heard in federal court. The analyst, on the other hand, claims only $50,000 in damages; thus, he may not invoke diversity jurisdiction to have his claim heard in federal court. However, the analyst might invoke supplemental jurisdiction to have his claim heard in federal court. When the federal court has subject matter jurisdiction over one claim, it has discretion to exercise supplemental jurisdiction over related claims that derive from the same common nucleus of fact and are such that a plaintiff would ordinarily be expected to try them in a single judicial proceeding. Here, the analyst’s claim is derived from the corporation’s wrongful termination of both plaintiffs based on an allegation that they conspired to sell a trade secret to a competitor. As a result, the analyst’s claim springs from the same common nucleus of fact as the researcher’s claim. There are several restrictions on the use of supplemental jurisdiction when joined with a claim based solely on diversity; however, a co-plaintiff with a below-limit claim generally can use supplemental jurisdiction to have his claim heard in federal court so long as the co-plaintiff’s presence in the suit does not destroy complete diversity. Here, the analyst’s presence does not destroy complete diversity. Thus, the analyst may invoke supplemental jurisdiction to have his claim heard in federal court, making (B) correct. (A) is incorrect because multiple plaintiffs may not aggregate their claims against a single defendant unless they are seeking to enforce a joint right in which they have an undivided interest. Such a case is not presented under these facts. (C) is incorrect. Although it is true that the claims of both plaintiffs may not be aggregated, the answer ignores the possibility of there being supplemental jurisdiction. (D) is incorrect because state law claims may be heard in federal court under the court’s diversity jurisdiction.
An investor filed a civil action against
her broker in a State A state court seeking
$30,000 for violation of federal securities
statutes. The investor is a citizen of State B
and the broker is a citizen of State A.
May the broker remove the action to
federal district court?
(A) No, because the amount in controversy
is too small for federal subject matter
jurisdiction.
(B) No, because the defendant is a citizen
of the state from whose court the
action is removed.
(C) Yes, the broker may remove the action
to federal district court on the basis of
federal question jurisdiction.
(D) Yes, the broker may remove the action
to federal district court on the basis of
federal diversity of citizenship jurisdiction.
C Yes, the broker may remove the action
to federal district court on the basis of
federal question jurisdiction.
The broker may remove the action on the basis of federal question jurisdiction. A defendant may remove an action that could have originally been brought in the federal courts, either on the basis of a federal question being presented or on the basis of diversity of citizenship. Federal question jurisdiction is available when the plaintiff, in his well-pleaded complaint, alleges a claim that arises under federal law. In the instant case, the cause of action is based on a violation of federal securities law. Thus, a federal question has been presented, making the case removable on the basis of federal question jurisdiction. (A) is incorrect. Although diversity of citizenship jurisdiction has an amount in controversy requirement of more than $75,000, there is no amount in controversy requirement for federal question jurisdiction. (B) is also incorrect. When jurisdiction of the federal court is based solely on diversity, and one of the defendants is a citizen of the state in which the action was brought, the action is not removable. There is no similar restriction on removal when removal is based on federal question jurisdiction. (D) is incorrect because the amount in controversy ($30,000) is not sufficient to invoke diversity jurisdiction (i.e., it does not exceed $75,000).
A car buyer, a resident of State A, wished
to purchase a new car. After shopping both
online and in person for the best price, the
buyer decided to purchase a car from a
dealer in State B. The buyer drove to the
State B dealership, signed a sales contract,
paid for the car, and drove the car back home
to State A. Three months later, the buyer was
in an accident in State A while driving the
new car. The other driver in the accident was
a resident of State B who was just passing
through State A. The other driver filed a
negligence action against the buyer in a
court in State B.
Does the buyer have sufficient contacts
with State B such that a State B court could
exercise personal jurisdiction over the buyer
for the negligence action?
(A) Yes, because the buyer had purposeful
contacts with State B.
(B) No, because the other driver’s claim
does not arise from the buyer’s
contacts with State B, and the contacts
are insufficient to create general
personal jurisdiction.
(C) No, because the buyer did not benefit
in any way from the contacts with
State B.
(D) No, because the buyer’s contacts with
State B were not purposeful.
B No, because the other driver’s claim
does not arise from the buyer’s
contacts with State B, and the contacts
are insufficient to create general
personal jurisdiction.
The buyer does not have sufficient contacts. In addition to the state having a statute authorizing the court to exercise personal jurisdiction over a defendant, the exercise of personal jurisdiction must be constitutional, meaning that the defendant must have purposeful contacts with the forum state such that it would be fair and reasonable to exercise personal jurisdiction over him. Personal jurisdiction may be “specific,” meaning that the court has personal jurisdiction over the defendant for the complained-of cause of action, or it may be “general,” meaning that the court has personal jurisdiction over the defendant for all causes of action. The close connection between the plaintiff’s cause of action and the contact from which the case sprung is usually sufficient for the court to exercise “specific” jurisdiction over the defendant. As to “general” jurisdiction, an individual defendant must be domiciled in the state. Here, the buyer did have purposeful contacts with State B, and the buyer benefited from those contacts in purchasing the car. However, the contacts were not related to the claim asserted. As a result, there is no close connection between the case and the buyer’s contacts, and it would not be fair and reasonable to exercise specific jurisdiction in this instance. Furthermore, the buyer is not domiciled in State B, so he is not “at home” there. (A) is incorrect because, although the fact that the contacts are purposeful is critical to the determination whether a court has personal jurisdiction over the defendant, the purposeful contacts must be related to the plaintiff’s cause of action. (C) and (D) are incorrect factual statements-the buyer did benefit from the transaction, and buying a car in State B is a purposeful activity. Note that benefit-type language is used when discussing whether the defendant’s contacts were purposeful-i.e., the defendant must have purposeful contacts with the forum such that it can be said that the defendant invoked the benefits and protections of state law with respect to the transaction or incident (e.g., if the car dealer had become involved in a contract-type dispute with the buyer over the sale of the car).
A hunter residing in State A visited a
website created and operated by a hunting
equipment company. The company is a
State B corporation, and its headquarters
and all its facilities are in State B. It sells
its products in several stores in State B and
through its website. Its marketing efforts
and most of its sales are in State A and State
B. Using the company’s website, the hunter
ordered a hunting stand. The hunter paid
for the stand and shipment to State A by
providing his credit card information on the
company’s website. After the stand arrived
at the hunter’s home in State A, the hunter
used the stand while on a hunting trip in
State C—a very popular hunting destination.
The stand collapsed, causing severe injuries
to the hunter.
The hunter filed a products liability action
against the company in a State C court. The
company filed a motion to dismiss the action
on the ground that the State C court lacks
personal jurisdiction over it. Although the
company’s website is accessible in State C,
the company does not otherwise advertise
there, and it does no business there and thus
has not registered to do business in the state.
There is no evidence that the company has
sold any products in State C.
Does the company have sufficient contacts
with State C such that a State C court may
exercise personal jurisdiction over it?
(A) Yes, because the company’s website is
continuously accessible in State C so
that people there may purchase products
from the company at any time.
(B) Yes, because the company could
foresee that its customers would carry
the company’s hunting products on
hunting trips to other states—particularly
states where hunting is popular.
(C) No, because personal jurisdiction
cannot be based on Internet contacts.
(D) No, because the company does not
have sufficient purposeful contacts
with State C.
D No, because the company does not
have sufficient purposeful contacts
with State C.
The company does not have sufficient contacts for personal jurisdiction. In addition to the state having a statute authorizing the court to exercise personal jurisdiction over a defendant, the exercise of personal jurisdiction must be constitutional, meaning that the defendant must have purposeful contacts with the forum state such that it would be fair and reasonable to exercise personal jurisdiction over him. Personal jurisdiction may be “specific,” meaning that the court has personal jurisdiction over the defendant only for the plaintiff’s cause of action, or it may be “general,” meaning that the court has personal jurisdiction over the defendant for all causes of action. The close connection between the plaintiff’s cause of action and the contact from which the case springs is usually sufficient for the court to exercise “specific” jurisdiction over the defendant. As to “general” jurisdiction, the defendant must be “at home” in the jurisdiction (meaning that is it incorporated or has its principal place of business in the state) or have registered to do business in the state (assuming state law authorizes such jurisdiction). Here, the company is not “at home” in the state, nor has it registered to do business in the state. It also had no purposeful contact with State C. It was the hunter’s unilateral act that brought the stand to State C from State A. Such an act does not give the forum court personal jurisdiction over a company that places a movable object into the stream of commerce. (A) is incorrect because the mere accessibility of a company’s website in a state, without more, is usually insufficient contact to support personal jurisdiction, and the claim does not arise from that contact. (B) is incorrect because the stand’s transport to State C is the result of the plaintiff’s unilateral activity and thus not purposeful on the part of the company. (C) is incorrect because Internet contacts can be sufficient to create personal jurisdiction in appropriate cases (for example, when they are purposeful and the claim arises from the contacts).
A bar prep company discovered that its
copyrighted content was being used in an
online simulated exam that its competitor
was administering in a few days. The
company filed a petition for an ex parte
order to direct the competitor to immediately
remove that content from its website.
The company submitted an affidavit specifying
why immediate and irreparable injury
will result if the exam is administered, and
offered to provide security for any costs or
damages incurred by the competitor if it was
determined that the order was wrongfully
issued.
Should the court issue the order?
(A) Yes, because the company submitted
an affidavit with specific facts showing
immediate and irreparable injury.
(B) Yes, because the competitor will
receive notice of the order once it is
issued by the court.
(C) No, because a court cannot issue an
injunction unless the adverse party has
notice of the hearing.
(D) No, because the company has not
provided sufficient certification for
obtaining an ex parte order.
D No, because the company has not
provided sufficient certification for
obtaining an ex parte order.
The court should not issue the ex parte order. A temporary restraining order may be granted by a court when it is necessary to prevent irreparable injury to a party, and the injury will result before a preliminary injunction hearing can be held. As a general rule, notice of the hearing for the issuance of the order must be given before it is issued. However, a court may grant an ex parte temporary restraining order without notice of the hearing to the adverse party if the moving party does the following: (i) gives specific facts in an affidavit or a verified complaint to establish that immediate and irreparable injury will result to the moving party before the adverse party can be heard in opposition; (ii) certifies in writing all efforts it made to give notice to the adverse party and why notice should not be required; and (iii) provides some security to pay for any costs and damages incurred by the adverse party if it is wrongfully enjoined or restrained. Here, the company alleged irreparable injury and offered to provide security, but nothing in the facts indicates that it certified efforts to give notice to the competitor or why notice should not be required. The facts do not establish that it is impossible to provide notice to the competitor before a restraining order is issued. (A) is incorrect because the company’s affidavit is not enough to justify the issuance of an ex parte order, as discussed above. (B) is incorrect because, while actual notice of the order also is required, notice of the hearing is required as well unless the three requirements stated above are met. (C) is incorrect because it is too broad. A court may issue an ex parte order without prior notice to the adverse party if the three requirements stated above are met.
Two citizens of State A were injured in
State B when the taxi in which they were
riding was in an accident. The two State A
citizens intend to file tort claims against the
taxi driver, a citizen of State B, in federal
district court seeking over $100,000 each.
May or must they assert their claims in
federal district court in a single civil action?
(A) They must assert their claims in a
single action because their claims arise
from the same accident.
(B) They may assert their claims in a
single action if they wish, or they may
file separate actions.
(C) They may not assert their claims in
a single action because they are not
asserting a single undivided interest.
(D) They may not assert their claims in a
single action because each plaintiff is
seeking damages for his own discrete
bodily injuries.
B They may assert their claims in a
single action if they wish, or they may
file separate actions.
The two plaintiffs may assert their claims in a single action. Under Federal Rule 20, parties may permissively join as plaintiffs (or be joined as defendants) whenever: (i) some claim is made by each plaintiff and against each defendant relating to or arising out of the same series of occurrences or transactions; and (ii) there is a question of fact or law common to all the parties. Here, the plaintiffs were injured in the same accident. Thus, the claims arise out the same series of occurrences and transactions, and, by necessity, the claims share common questions of law or fact (e.g., whether the acts of the taxi driver were negligent, etc.). (A) is incorrect because joinder under these facts is permissive, not mandatory. (C) is incorrect. Although plaintiffs may (and probably must under Rule 19) join together when they are asserting a single undivided interest, plaintiffs may permissively join together under the circumstances described above. (D) is incorrect. Although differences in damages may arise, the court may hear both claims together.
Three drivers were in a traffic accident
in State A. The three drivers were
citizens of State A, State B, and State C,
respectively. Only the driver from State
C sustained any injuries and damage.
The driver from State C filed a tort
action against the State A driver, seeking
$100,000 in damages. The State A driver
believes that he was not at fault in any way
and that the driver from State B was the
sole cause of the accident. Assume State A
does not recognize any claim of contribution
among joint tortfeasors.
May the State A driver assert a thirdparty
claim against the State B driver in
the pending action, alleging that the State
B driver was the party at fault and should
pay for the State C driver’s injuries?
(A) Yes, because third-party claims are
permitted as long as they arise from
the same transaction or occurrence as
the original action.
(B) Yes, because the State A driver’s
third-party claim is derivative of the
State C driver’s original claim.
(C) Yes, provided the State A driver
obtains leave of the court.
(D) No, the State A driver may not
maintain the third-party claim
D No, the State A driver may not
maintain the third-party claim
The State A driver may not maintain the third-party claim. Third-party claims may be maintained only if the defendant/third-party plaintiff alleges that the third-party defendant is liable to the defendant/third-party plaintiff for all or part of the defendant/third-party plaintiff’s liability to the plaintiff. Here, the defendant/third-party plaintiff (the State A driver) can make no such claim because state law does not recognize contribution among joint tortfeasors. In other words, the State A driver may raise the State B driver’s negligence as a defense, alleging that the State B driver was the sole cause of the action, but he may not implead the State B driver based on joint contribution. (A) is incorrect because the answer provides the wrong standard for third-party claims. A defending party may implead a nonparty, but only if the nonparty is or may be liable to her for any part of a judgment that the plaintiff may recover against her. This is not the case here, as discussed above. (B) is incorrect because it provides the wrong standard for a third-party impleader claim. The correct standard is stated above. (C) is also incorrect for the reasons stated above. Additionally, leave of court is required only if the third-party complaint is filed more than 14 days after service of the defendant’s original answer.
A former shareholder of a corporation
filed an action against the corporation’s
board of directors, alleging that the directors’
wrongful actions diminished the value
of the corporation and its stock. The former
shareholder served a request for production
of documents that included a request for
any documents relating to the value of the
corporation. The corporation produced a
number of documents, but withheld certain
documents that were written by its attorneys,
claiming that the documents were protected
from discovery under the attorney-client
privilege. Without contacting or conferring
with the corporation or its lawyer, the former
shareholder filed a motion to compel production
of the withheld documents, claiming
that they were not covered by the privilege.
The court ruled that the documents were not
privileged and had to be produced.
What will be the likely result if the former
shareholder seeks to recover costs or attorneys’
fees related to the motion or to have
sanctions imposed on the corporation?
(A) The shareholder may not recover costs
or attorneys’ fees or have sanctions
imposed.
(B) The shareholder may recover the costs
of asserting the motion to compel but
may not recover any attorneys’ fees or
have sanctions imposed.
(C) The shareholder may recover the
costs and attorneys’ fees incurred in
asserting the motion to compel, but
may not have sanctions imposed.
(D) The shareholder may recover costs and
attorneys’ fees incurred in asserting
the motion to compel, and may have
sanctions imposed.
A The shareholder may not recover costs
or attorneys’ fees or have sanctions
imposed.
The shareholder is not likely to recover costs or attorneys’ fees or have sanctions imposed. If a party fails to provide discovery or provides incomplete discovery, including disclosures and answers to interrogatories and deposition questions, the other party may move to compel discovery. However, a motion to compel must certify that the moving party has made a good faith attempt to confer with the opponent to obtain the discovery without court intervention. The certification (and an actual attempt at resolving the discovery dispute without court intervention) is a prerequisite to an award of reasonable expenses (which includes attorneys’ fees). Here, the movant cannot certify in a motion to compel that he made a good faith effort to obtain discovery without court action because the facts indicate that he made no such effort. (B) is incorrect. The applicable federal rule [Federal Rule 37] does not distinguish between costs and attorneys’ fees. (C) is incorrect. As explained above, an attempt to confer with the opponent (and the certification that the attempt was made) is a prerequisite to an award of reasonable costs. On the other hand, (C) correctly states that sanctions are not available. Sanctions generally may be imposed only for violating a court order on discovery. (D) is incorrect because, as explained above, an attempt to confer and certification are required before an award of reasonable costs may be made, and sanctions generally may be imposed only for violating a court order on discovery.
The owner of property bordering a river
properly brought suit in federal court against
a power company, alleging that the power
company dumped radioactive waste water
from one of its nuclear plants into the river,
causing the property owner many health
issues and resulting in the diminution of his
property’s value. The suit sought damages
and a preliminary injunction forbidding the
power company from dumping any waste
into the river. The power company was
provided with notice of the hearing, to which
it sent its lawyer. During the hearing, the
power company claimed that it has complied
with applicable state and federal environmental
regulations, and stated that it will
continue to comply with the regulations if
the injunction is denied. The judge granted
the preliminary injunction and set a date
for a pretrial conference, as required by the
Federal Rules of Civil Procedure.
May the power company immediately
appeal the judge’s granting of the preliminary
injunction?
(A) No, because the order is not final.
(B) No, because the question has not been
certified as one falling within the Interlocutory
Appeals Act.
(C) Yes, but only if the power company
takes a default judgment, thereby
making the judgment final.
(D) Yes, because the order is immediately
appealable as of right.
D Yes, because the order is immediately
appealable as of right.
The power company may immediately appeal. Although the general rule is that only a final order may be appealed, there are certain exceptions to that rule. A party may appeal, as of right, any order granting, continuing, modifying, refusing, dissolving, or refusing to dissolve or modify an injunction. (A) is incorrect because the granting, continuing, modifying, etc. of an injunction is an exception to the final order rule, as explained above. (B) is incorrect because there is no need for the power company to have the question certified under the Interlocutory Appeals Act. Review under the Interlocutory Appeals Act is discretionary and may be available when: (i) the trial judge certifies that the interlocutory order involves a controlling question of law, as to which there is substantial ground for difference of opinion, and immediate appeal from the order may materially advance the ultimate termination of the litigation; and (ii) the court of appeals then agrees to allow the appeal. The process is not required for orders involving an injunction. By rule, an order involving an injunction is appealable as of right, as explained above. (C) is incorrect because a final judgment is not required before a party may appeal the granting of an injunction. Additionally, taking a default judgment is a risky strategy, as it precludes defending the case on the merits if the party loses on appeal.
A plaintiff filed a single cause of action against a defendant on a claim based on
products liability in state court. The plaintiff
contends that a space heater that he was
using during the winter short-circuited,
causing a fire that burned down his house. In
July, the plaintiff’s case against the defendant
went to trial, and the jury determined
that the fire was caused by faulty wiring in
the plaintiff’s home.
The following September, the plaintiff
filed a breach of warranty action against
the defendant in federal court, properly
invoking the court’s diversity jurisdiction.
The defendant, after properly being served
with process, files an answer with an affirmative
defense of claim preclusion as his
first pleading or motion. The defendant, at
an appropriate time, then files a motion for
summary judgment based on the assertion of
claim preclusion.
How should the court rule on the defendant’s
motion?
(A) Deny the motion, because the application
of claim preclusion is a factual
issue for the jury to determine.
(B) Deny the motion, because the plaintiff’s
breach of warranty theory is not
the same cause of action as the plaintiff’s
products liability claim.
(C) Grant the motion, because claim
preclusion applies to bar the claim.
(D) Grant the motion, because the defendant,
by raising the issue in his first
pleading or motion, did not waive the
defense of claim preclusion.
C Grant the motion, because claim
preclusion applies to bar the claim.
The court should grant the motion on claim preclusion grounds. Before claim preclusion (also called res judicata) applies, it must be shown that (i) the earlier judgment is a valid, final judgment “on the merits”; (ii) the cases are brought by the same claimant against the same defendant; and (iii) the same “cause of action” (or “claim”) is involved in the later lawsuit. While various tests have been used to define “cause of action,” the modern approach is to require assertion of all claims arising out of the same transaction or occurrence that is the subject matter of a claim asserted by the claimant. Here, the products liability claim was determined in the defendant’s favor by a jury. Thus, there is a valid, final judgment. The same plaintiff is suing the same defendant, and the same claim is involved, as both the products liability and breach of warranty claims arise out of the same transaction or occurrence-the alleged malfunction of the space heater that burned down the plaintiff’s home. Thus, claim preclusion applies to bar the claim. (Note that when the plaintiff loses the earlier case, claim preclusion “bars” further litigation. When the plaintiff wins the earlier case, the different theories “merge” to prevent further litigation.) (A) is incorrect because claim preclusion is not a factual issue for the jury to determine. It is a legal issue for the judge to determine. (B) is incorrect because, as explained above, a later claim is deemed to be the same claim if it arises from the same transaction or occurrence as the earlier claim. (D) is incorrect because a defense of claim preclusion is not necessarily waived if it is not included in the defendant’s first pleading or motion. A judge would have discretion to allow a defendant to amend his answer to include an omitted defense, and she will likely do so when no prejudice to the defendant results. (Leave to amend is freely granted when justice so requires.)
